Document and Entity Information
Document and Entity Information - USD ($) $ / shares in Units, $ in Billions | 12 Months Ended | ||||
Dec. 31, 2017 | Jan. 31, 2018 | Jun. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Document Document And Entity Information [Abstract] | |||||
Document Type | 10-K | ||||
Document Period End Date | Dec. 31, 2017 | ||||
Entity Registrant Name | CIGNA Corporation | ||||
Entity Central Index Key | 701,221 | ||||
Current Fiscal Year End Date | --12-31 | ||||
Entity Filer Category | Large Accelerated Filer | ||||
Trading Symbol | CI | ||||
Entity Common Stock Shares Outstanding | 242,875,357 | ||||
Amendment Flag | false | ||||
Entity Current Reporting Status | Yes | ||||
Entity Well Known Seasoned Issuer | Yes | ||||
Entity Voluntary Filers | No | ||||
Entity Public Float | $ 42.2 | ||||
Document Fiscal Year Focus | 2,017 | ||||
Document Fiscal Period Focus | FY | ||||
Common stock, par value per share | $ 0.25 | $ 0.25 | $ 0.25 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues | |||
Premiums | $ 32,307 | $ 30,626 | $ 29,642 |
Fees and other revenues | 4,867 | 4,760 | 4,488 |
Net investment income | 1,226 | 1,147 | 1,153 |
Mail order pharmacy revenues | 2,979 | 2,966 | 2,536 |
Realized investment gains (losses): | |||
Other-than-temporary impairments on fixed maturities | (27) | (35) | (112) |
Other realized investment gains (losses), net | 264 | 204 | 169 |
Net realized investment gains (losses) | 237 | 169 | 57 |
Total revenues | 41,616 | 39,668 | 37,876 |
Benefits and Expenses | |||
Global Health Care medical costs | 19,967 | 19,009 | 18,354 |
Other benefit expenses | 5,439 | 5,477 | 4,936 |
Mail order pharmacy costs | 2,456 | 2,468 | 2,134 |
Other operating expenses | 10,033 | 9,584 | 8,982 |
Amortization of other acquired intangible assets, net | 115 | 151 | 143 |
Total benefits and expenses | 38,010 | 36,689 | 34,549 |
Income before Income Taxes | 3,606 | 2,979 | 3,327 |
Income taxes (benefits): | |||
Current | 1,132 | 1,062 | 1,229 |
Deferred | 242 | 74 | 21 |
Total income taxes | 1,374 | 1,136 | 1,250 |
Net Income | 2,232 | 1,843 | 2,077 |
Less: Net Income (Loss) Attributable to Noncontrolling Interests | (5) | (24) | (17) |
Shareholders' Net Income | $ 2,237 | $ 1,867 | $ 2,094 |
Shareholders' Net Income Per Share: | |||
Basic | $ 8.92 | $ 7.31 | $ 8.17 |
Diluted | 8.77 | 7.19 | 8.04 |
Dividends Declared Per Share | $ 0.04 | $ 0.04 | $ 0.04 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement Of Comprehensive Income | |||||||||||
Shareholders' Net Income | $ 266 | $ 560 | $ 813 | $ 598 | $ 382 | $ 456 | $ 510 | $ 519 | $ 2,237 | $ 1,867 | $ 2,094 |
Shareholders' other comprehensive income (loss), net of tax: | |||||||||||
Net unrealized appreciation (depreciation) on securities | (34) | (56) | (202) | ||||||||
Net unrealized appreciation (depreciation) on derivatives | (3) | (4) | 15 | ||||||||
Net translation of foreign currencies | 304 | (95) | (212) | ||||||||
Postretirement benefits liability adjustment | 33 | 23 | 85 | ||||||||
Shareholders' other comprehensive income (loss), net of tax | 300 | (132) | (314) | ||||||||
Shareholders' comprehensive income (loss) | $ 2,537 | $ 1,735 | $ 1,780 |
Consolidated Statements of Tota
Consolidated Statements of Total Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement Of Comprehensive Income | |||
Shareholders' comprehensive income (loss) | $ 2,537 | $ 1,735 | $ 1,780 |
Comprehensive income (loss) attributable to noncontrolling interests: | |||
Net income (loss) attributable to redeemable noncontrolling interests | 0 | (7) | (6) |
Net income (loss) attributable to other noncontrolling interests | (5) | (17) | (11) |
Other comprehensive income (loss) attributable to redeemable noncontrolling interests | (3) | (10) | (17) |
Other comprehensive income (loss) attributable to other noncontrolling interests | 0 | 0 | (1) |
Total comprehensive income (loss) attributable to noncontrolling interests | (8) | (34) | (35) |
Total comprehensive income | $ 2,529 | $ 1,701 | $ 1,745 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Investments: | ||
Fixed maturities, at fair value (amortized cost, $21,867; $19,942) | $ 23,138 | $ 20,961 |
Equity securities, at fair value (cost, $589; $583) | 588 | 583 |
Commercial Mortgage Loans | 1,761 | 1,666 |
Policy loans | 1,415 | 1,452 |
Other long-term investments | 1,518 | 1,462 |
Short-term investments | 199 | 691 |
Total investments | 28,619 | 26,815 |
Cash and cash equivalents | 2,972 | 3,185 |
Premiums, accounts and notes receivable, net | 3,380 | 3,077 |
Reinsurance recoverables | 6,046 | 6,478 |
Deferred policy acquisition costs | 2,237 | 1,818 |
Property and equipment | 1,563 | 1,536 |
Deferred tax assets, net | 33 | 304 |
Goodwill | 6,164 | 5,980 |
Other assets, including other intangibles | 2,316 | 2,227 |
Separate account assets | 8,423 | 7,940 |
Total assets | 61,753 | 59,360 |
Liabilities: | ||
Contractholder deposit funds | 8,196 | 8,458 |
Future policy benefits | 10,040 | 9,648 |
Unpaid claims and claim expenses | 5,168 | 4,917 |
Global Health Care medical costs payable | 2,719 | 2,532 |
Unearned premiums | 724 | 634 |
Total insurance and contractholder liabilities | 26,847 | 26,189 |
Accounts payable, accrued expenses and other liabilities | 7,260 | 6,414 |
Short-term debt | 240 | 276 |
Long-term debt | 5,199 | 4,756 |
Separate account liabilities | 8,423 | 7,940 |
Total liabilities | 47,969 | 45,575 |
Contingencies - Note 21 | ||
Redeemable noncontrolling interests | 49 | 58 |
Shareholders' Equity | ||
Common stock (par value per share, $0.25; shares issued, 296; authorized, 600) | 74 | 74 |
Additional paid-in capital | 2,940 | 2,892 |
Accumulated other comprehensive (loss) | (1,082) | (1,382) |
Retained earnings | 15,824 | 13,855 |
Less: treasury stock, at cost | (4,021) | (1,716) |
Total shareholders' equity | 13,735 | 13,723 |
Noncontrolling interests | 0 | 4 |
Total equity | 13,735 | 13,727 |
Total liabilities and equity | $ 61,753 | $ 59,360 |
Shareholders' Equity Per Share | $ 56.3 | $ 53.42 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) shares in Thousands, $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Consolidated Balance Sheets | ||
Fixed maturities, at amortized cost | $ 21,867 | $ 19,942 |
Equity securities, at cost | $ 589 | $ 583 |
Common stock, par value per share | $ 0.25 | $ 0.25 |
Common stock shares issued | 296,145 | 296,145 |
Common stock shares authorized | 600,000 | 600,000 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Total Equity - USD ($) $ in Millions | Total | Shareholders' Equity [Member] | Common Stock [Member] | Additional Paid In Capital [Member] | Accumulated Other Comprehensive Income [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Other noncontrolling interests [Member] |
Total Equity, beginning of period at Dec. 31, 2014 | $ 10,789 | $ 10,774 | $ 74 | $ 2,769 | $ (936) | $ 10,289 | $ (1,422) | $ 15 |
Increase (Decrease) In Stockholders Equity [Roll Forward] | ||||||||
Effect of issuing stock for employee benefit plans | 183 | 183 | 99 | (252) | 336 | |||
Other comprehensive income (loss) | (315) | (314) | (314) | (1) | ||||
Net income (loss) | 2,083 | 2,094 | 2,094 | (11) | ||||
Common dividends declared (per share: $0.04) | (10) | (10) | (10) | |||||
Repurchase of common stock | (683) | (683) | (683) | |||||
Other transactions impacting noncontrolling interest | (3) | (9) | (9) | 6 | ||||
Total Equity, end of period at Dec. 31, 2015 | 12,044 | 12,035 | 74 | 2,859 | (1,250) | 12,121 | (1,769) | 9 |
Beginning Balance at Dec. 31, 2014 | 90 | |||||||
Redeemable Noncontrolling Interests | ||||||||
Other comprehensive income (loss) | (17) | |||||||
Net income (loss) | (6) | |||||||
Other transactions impacting noncontrolling interest | 2 | |||||||
Ending Balance at Dec. 31, 2015 | 69 | |||||||
Increase (Decrease) In Stockholders Equity [Roll Forward] | ||||||||
Effect of issuing stock for employee benefit plans | 91 | 91 | 51 | (123) | 163 | |||
Other comprehensive income (loss) | (132) | (132) | (132) | |||||
Net income (loss) | 1,850 | 1,867 | 1,867 | (17) | ||||
Common dividends declared (per share: $0.04) | (10) | (10) | (10) | |||||
Repurchase of common stock | (110) | (110) | (110) | |||||
Other transactions impacting noncontrolling interest | (6) | (18) | (18) | 12 | ||||
Total Equity, end of period at Dec. 31, 2016 | 13,727 | 13,723 | 74 | 2,892 | (1,382) | 13,855 | (1,716) | 4 |
Redeemable Noncontrolling Interests | ||||||||
Other comprehensive income (loss) | (10) | |||||||
Net income (loss) | (7) | |||||||
Other transactions impacting noncontrolling interest | 6 | |||||||
Ending Balance at Dec. 31, 2016 | 58 | |||||||
Increase (Decrease) In Stockholders Equity [Roll Forward] | ||||||||
Effect of issuing stock for employee benefit plans | 248 | 248 | 51 | (258) | 455 | |||
Other comprehensive income (loss) | 300 | 300 | 300 | |||||
Net income (loss) | 2,232 | 2,237 | 2,237 | (5) | ||||
Common dividends declared (per share: $0.04) | (10) | (10) | (10) | |||||
Repurchase of common stock | (2,760) | (2,760) | (2,760) | |||||
Other transactions impacting noncontrolling interest | (2) | (3) | (3) | 1 | ||||
Total Equity, end of period at Dec. 31, 2017 | 13,735 | $ 13,735 | $ 74 | $ 2,940 | $ (1,082) | $ 15,824 | $ (4,021) | $ 0 |
Redeemable Noncontrolling Interests | ||||||||
Other comprehensive income (loss) | (3) | |||||||
Net income (loss) | 0 | |||||||
Other transactions impacting noncontrolling interest | (6) | |||||||
Ending Balance at Dec. 31, 2017 | $ 49 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Cash Flows from Operating Activities | ||||
Net Income | $ 2,232 | $ 1,843 | $ 2,077 | |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||
Depreciation and amortization | 566 | 610 | 585 | |
Realized investment (gains) losses | (237) | (169) | (57) | |
Deferred income taxes (benefits) | 242 | 74 | 21 | |
Net changes in assets and liabilities, net of non-operating effects: | ||||
Premiums, accounts and notes receivable | (233) | 663 | (945) | |
Reinsurance recoverables | 214 | 142 | 55 | |
Deferred policy acquisition costs | (282) | (213) | (182) | |
Other assets | (171) | 134 | 16 | |
Insurance liabilities | 506 | 683 | 657 | |
Accounts payable, accrued expenses and other liabilities | 639 | 124 | 423 | |
Current income taxes | 92 | 1 | (25) | |
Debt extinguishment costs | 321 | 0 | 100 | |
Distributions from partnership investments | [1] | 161 | 144 | 137 |
Other, net | [2] | 36 | (10) | 71 |
Net cash provided by (used in) operating activities | [1],[2] | 4,086 | 4,026 | 2,933 |
Proceeds from investments sold: | ||||
Fixed maturities and equity securities | 2,012 | 1,544 | 1,555 | |
Investment maturities and repayments: | ||||
Fixed maturities and equity securities | 2,051 | 1,755 | 1,435 | |
Commercial mortgage loans | 335 | 316 | 640 | |
Other sales, maturities and repayments (primarily short-term and other long-term investments) | [1] | 1,702 | 1,431 | 1,160 |
Investments purchased or originated: | ||||
Fixed maturities and equity securities | (5,628) | (5,191) | (4,234) | |
Commercial mortgage loans | (430) | (165) | (500) | |
Other (primarily short-term and other long-term investments) | (1,065) | (1,698) | (1,183) | |
Property and equipment purchases, net | (471) | (461) | (510) | |
Acquisitions, net of cash acquired | (209) | (4) | (99) | |
Other, net | 0 | (101) | 0 | |
Net cash provided by (used in) investing activities | [1] | (1,703) | (2,574) | (1,736) |
Cash Flows from Financing Activities | ||||
Deposits and interest credited to contractholder deposit funds | 1,230 | 1,460 | 1,429 | |
Withdrawals and benefit payments from contractholder deposit funds | (1,363) | (1,362) | (1,359) | |
Net change in short-term debt | 80 | (148) | (21) | |
Payments for debt extinguishment | (313) | 0 | (87) | |
Repayment of long-term debt | (1,250) | 0 | (851) | |
Net proceeds on issuance of long-term debt | 1,581 | 0 | 894 | |
Repurchase of common stock | (2,725) | (139) | (671) | |
Issuance of common stock | 131 | 36 | 154 | |
Other, net | [2] | (22) | (72) | (97) |
Net cash provided by (used in) financing activities | [2] | (2,651) | (225) | (609) |
Effect of foreign currency rate changes on cash and cash equivalents | 55 | (10) | (40) | |
Net increase / (decrease) in cash and cash equivalents | (213) | 1,217 | 548 | |
Cash and cash equivalents, January 1, | 3,185 | 1,968 | 1,420 | |
Cash and cash equivalents, December 31, | 2,972 | 3,185 | 1,968 | |
Supplemental Disclosure of Cash Information: | ||||
Income taxes paid, net of refunds | 1,036 | 1,064 | 1,194 | |
Interest paid | 240 | 244 | 245 | |
Accounting Standards Update 2016-09 [Member] | ||||
Net changes in assets and liabilities, net of non-operating effects: | ||||
Other, net | 61 | 72 | ||
Net cash provided by (used in) operating activities | 61 | 72 | ||
Cash Flows from Financing Activities | ||||
Other, net | (61) | (72) | ||
Net cash provided by (used in) financing activities | (61) | (72) | ||
Accounting Standards Update 2016-09 [Member] | Restatement Adjustment [Member] | ||||
Net changes in assets and liabilities, net of non-operating effects: | ||||
Other, net | 79 | |||
Net cash provided by (used in) operating activities | 79 | |||
Cash Flows from Financing Activities | ||||
Other, net | (79) | |||
Net cash provided by (used in) financing activities | (79) | |||
Accounting Standards Update 2016-15 [Member] | ||||
Net changes in assets and liabilities, net of non-operating effects: | ||||
Distributions from partnership investments | 161 | 144 | ||
Net cash provided by (used in) operating activities | 161 | 144 | ||
Investment maturities and repayments: | ||||
Other sales, maturities and repayments (primarily short-term and other long-term investments) | (161) | (144) | ||
Investments purchased or originated: | ||||
Net cash provided by (used in) investing activities | $ (161) | $ (144) | ||
Accounting Standards Update 2016-15 [Member] | Restatement Adjustment [Member] | ||||
Net changes in assets and liabilities, net of non-operating effects: | ||||
Distributions from partnership investments | 137 | |||
Net cash provided by (used in) operating activities | 137 | |||
Investment maturities and repayments: | ||||
Other sales, maturities and repayments (primarily short-term and other long-term investments) | (137) | |||
Investments purchased or originated: | ||||
Net cash provided by (used in) investing activities | $ (137) | |||
[1] | As required in adopting ASU 2016-15 in 2016, the Company retrospectively reclassified $137 million of cash distributions of earnings from partnership investments from investing to operating activities in 2015. The comparable amounts reported in operating activities were $161 million in 2017 and $144 million in 2016. | |||
[2] | As required in adopting Accounting Standard Update ("ASU") 2016-09 in 2016, the Company retrospectively reclassified $79 million of cash payments from operating to financing activities in 2015. These payments were related to employee tax obligations associated with stock compensation. The comparable amounts reported in financing activities were $61 million in 2017 and $72 million in 2016. |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2017 | |
Description Of Business [Abstract] | |
Description of Business | Note 1 – Description of Business Cigna Corporation , together with its subsidiaries (either individually or collectively referred to as “Cigna,” the “Company,” “we,” “our” or “us” ) is a global health services organization dedicated to a mission of helping individuals improve their health, well-being and sense of security. To execute on our mission, Cigna's evolved strategy is to “Go Deeper” , “Go Local” and “Go Beyond” with a differentiated set of medical, dental, disability, life and accident in surance and related products and services offered by our subsidiaries . The majority of these products are offered through employers and other groups such as governmental and non-governmental organizations, unions and associations. Cigna also offers comme rcial health and dental insurance, Medicare and Medicaid products and health, life and accident insurance coverages to individuals in the United States and selected international markets. In addition to these ongoing operations, Cigna also has certain run-off oper ations. The financial results of the Company’s businesses are reported in the following segments: Global Health Care aggregates the Commercial and Government operating segments due to their similar economic characteristics, products and services and regulatory environment: The Commercial operating segment (“Commercial segment”) encompasses both the U.S. commercial and certain international health care businesses serving employers and their employees, other groups, and individuals. Products and services include medical, dental, behavioral health, vision, and prescription drug benefit plans, health advocacy programs and other products and services to insured and self-insured customers. The Government operating segment (“Government segment”) offers Medicare Advant age and Medicare Part D plans to seniors . This segment also offers Medicaid plans in selected markets. Global Supplemental Benefits includes supplemental health, life and accident insurance products offered in selected international markets and in the U n ited States. Group Disability and Life provides group long-term and short-term disability, group life, accident and specialty insurance products and related services. Other Operations consist of: corporate-owned life insurance (“COLI”); run-off reinsur ance business that is predominantly comprised of guaranteed minimum death benefit (“ GMDB ”) and guaranteed minimum income benefit (“ GMIB ”) business effectively exited through reinsurance with Berkshire Hathaway Life Insurance Company of Nebraska (“Berkshire”) in 2013; deferred gains recognized from the 1998 sale of the individual life insurance and annuity business and the 2004 sale of the retirement benefits business; and run-off settlement annuity business. Corporate reflects amounts not allocated to operating segments, including net interest expense (defined as interest on corporate debt less net investment income on investments not supporting segment operations), inter est on uncertain tax positions, certain litigation matters, intersegment eliminations, compensation cost for stock options and related excess tax benefits , expense associated with our fr ozen pension plans and certain overhead and project costs. |
Summary of Signficant Accountin
Summary of Signficant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | Note 2 – Summary of Significant Accounting Policies Basis of Presentation The Consolidated F inancial S tatements include th e accounts of C igna Corporation and its subsidiaries . Intercompany transactions and accounts have been eliminated in consolidation. These Consolidated Financial S tatements were prepared in conformity with accounting principles generally accepted in the United States of America ( “ GAAP ”). Amounts recorded in the Consolidated F inancial S tatements necessarily reflect manag ement’s estimates and assumptions about medical costs, investment valuation, interest rates and other factors. Significant estimates are discussed throughout these Notes; however, actual results could differ from those estimates. The impact of a change i n estimate is generally included in earnings in the period of adjustment. Certain reclassifications have been made to prior year amounts to conform to the current presentation. Variable interest entities. See Note 13 for a discussion of consolidated variable interest entities. Recent Accounting Guidance The following tables provide information about recently adopted accounting guidance and accounting guidance not yet adopted that is applicable to Cigna. Recently Adopted Accounting Guidance Accounting Standard and Adoption Date Effects of Adopting New Guidance GUIDANCE ADOPTED IN 2017 Securities and Exchange Commission ("SEC") Staff Accounting Bulletin No. 118 ("SAB 118"), adopted December 31, 2017 Guidance: • Allows a company to recognize the effects of U.S. tax reform as provisional in its 2017 financial statements when it does not have the necessary information in reasonable detail to complete its accounting for the change in tax law. • Establishes a maximum one-year measurement period that ends when a company has obtained the information necessary to finalize its accounting. During the measurement period, adjustments for the effects of the law will be recorded to the extent a reasonable estimate for all or a portion of the effects of the law can be made. Effects of adoption: • The Company has reported reasonable estimates of the income tax effects of U.S. tax reform as provisional in its financial statements. • See Note 20 for disclosures about the impact of U.S. tax reform on the Company's financial statements. Accounting Guidance Not Yet Adopted Accounting Standard and Effective Date Applicable for Cigna Requirements and Expected Effects of New Guidance Not Yet Adopted GUIDANCE TO BE ADOPTED JANUARY 1, 2018 Revenue from Contracts with Customers (Accounting Standards Update ("ASU") 2014-09 and related amendments) Required as of January 1, 2018 Requires: • Companies to estimate and allocate the expected customer contract revenues among distinct goods or services based on relative standalone selling prices • Revenues to be recognized as goods or services are delivered • New disclosures including presenting relevant categories of revenues and information about related contract assets and liabilities • Adoption through retrospective restatement with or without using certain practical expedients or adoption with a cumulative effect adjustment Expected effects: • Guidance applies to the Company’s administrative service, mail order pharmacy and other non-insurance contracts, but does not apply to certain contracts within the scope of other GAAP, such as the Company's insurance and investment contracts accounted for under the Financial Accounting Standards Board's Accounting Standards Codification ("ASC") 944. • The Company has completed its evaluation of the new requirements and the adoption of the new guidance will not have a material impact to its pattern of revenue recognition or net income. • The Company will adopt the new guidance through retrospective restatement and is currently working to develop required disclosures and restate historical periods in line with its chosen method of adoption. The Company does not anticipate significant changes to its systems, processes or controls. • The Company's cumulative effect of implementing this guidance will result in an immaterial decrease to the opening balance of retained earnings from establishing a contract liability for service fee revenue that must be recognized when services are provided after the termination of certain administrative service contracts. • The Company also will reclassify certain fees as a result of clarifications in the new guidance and its related interpretations. Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01) Required as of January 1, 2018 Requires: • Entities to measure equity investments at fair value in net income if they are neither consolidated nor accounted for under the equity method • Cumulative effect adjustment to the beginning balance of retained earnings at adoption Expected effects: • Certain limited partnership interests carried at cost of approximately $200 million as of December 31, 2017 will be reported at fair value at adoption with future changes in fair value reported in net investment income. • Changes in fair value for equity securities previously reported in accumulated other comprehensive income will now be reported in net realized investment gains. • Retained earnings will increase by approximately $60 million after-tax on January 1, 2018. Accounting Standard and Effective Date Applicable for Cigna Requirements and Expected Effects of New Guidance Not Yet Adopted GUIDANCE TO BE ADOPTED JANUARY 1, 2018 Intra-Entity Asset Transfers of Assets Other than Inventory (ASU 2016-16) Required as of January 1, 2018 Requires: • Entities to recognize the tax impacts of all intra-entity sales of assets other than inventory even though the pre-tax effects of those transactions are eliminated in consolidation • Modified retrospective approach for adoption with a cumulative-effect adjustment recorded in retained earnings Expected effects: the adoption of this standard will not have a material effect on the Company’s financial statements. Clarifying the Definition of a Business (ASU 2017-01) Required as of January 1, 2018 Guidance: • Revises the definition of a business and provides a more robust framework for entities to use in determining when a set of assets and activities is a business. • Requires entities to apply this new definition to business transactions beginning in the first quarter of 2018. Expected effects: the Company does not expect this change in definition will have a material impact on its financial statements. Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (ASU 2017-07) Required as of January 1, 2018 Requires: • Employers to separate the service cost component from the other components of net benefit cost • Only service cost is eligible for capitalization (as either deferred policy acquisition costs or capitalized software), to be applied prospectively upon adoption • Income statement captions used for each component of net benefit cost to be disclosed Expected effects: the Company does not expect the effect of this new guidance to be material to results of operations because its most significant plans are frozen. See Note 15 for additional information. GUIDANCE TO BE EARLY ADOPTED JANUARY 1, 2018 Targeted Improvements to Accounting for Hedging Activities (ASU 2017-12) Required as of January 1, 2019, with early adoption permitted in 2017 Guidance: • Relaxes requirements for financial and nonfinancial hedging strategies to be eligible for hedge accounting and changes how companies assess effectiveness. • Amends presentation and disclosure requirements to improve transparency about the uses and results of hedging programs. Expected effects: the Company is planning to adopt this guidance on January 1, 2018 with an immaterial impact to its financial statements for existing hedges. Accounting Standard and Effective Date Applicable for Cigna Requirements and Expected Effects of New Guidance Not Yet Adopted GUIDANCE TO BE ADOPTED AFTER 2018 OR ADOPTION DATE HAS NOT BEEN DETERMINED Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02) Effective as of January 1, 2019 with early adoption permitted for reporting periods for which financials have not been issued. Guidance: • Allows companies to reclassify tax effects stranded in accumulated other comprehensive income as a result of U.S. tax reform to retained earnings. • Requires additional disclosures of the company's accounting policy for releasing income tax effects from accumulated other comprehensive income. • Allows companies to apply the guidance retrospectively or in the period of adoption. Effects of adoption: • The Company is evaluating this new standard and its expected timing of adoption. • If adopted as of December 31, 2017, approximately $230 million of accumulated other comprehensive income would have been reclassified to retained earnings. Leases (ASU 2016-02) Required as of January 1, 2019 Requires: • Balance sheet recognition of assets and liabilities arising from leases, including leases embedded in other contracts • Additional disclosures of the amount, timing and uncertainty of cash flows from leases will be required • Modified retrospective approach for leases in effect as of and after the date of adoption with a cumulative-effect adjustment recorded in retained earnings Expected effects: • The Company is continuing to evaluate the impact this standard will have on its financial statements. • While not yet quantified, the Company expects a material impact to the Consolidated Balance Sheets from recognizing additional assets and liabilities of operating leases upon adoption. The actual increase in assets and liabilities will depend on the volume and terms of leases in place at the time of adoption. • The Company is implementing a new lease system in connection with the adoption. Measurement of Credit Losses on Financial Instruments (ASU 2016-13) Required as of January 1, 2020, with early adoption permitted as of January 1, 2019 Requires: • A new approach using expected credit losses to estimate and recognize credit losses for certain financial instruments such as mortgage loans, reinsurance recoverables and other receivables • Changes in the criteria for impairment of available-for-sale debt securities • Adoption using a modified retrospective approach with a cumulative-effect adjustment recorded in retained earnings Expected effects: • The Company is evaluating this new standard, its expected timing of adoption and effects on its financial statements and disclosures. • An additional allowance for future expected credit losses for certain financial instruments may be required at adoption. Simplifying the Test for Goodwill Impairment (ASU 2017-04) Required as of January 1, 2020, with early adoption permitted as of January 1, 2017 Guidance: • Simplifies the accounting for goodwill impairment by eliminating the need to determine the fair value of individual assets and liabilities of a reporting unit to measure a goodwill impairment. • Redefines the amount of goodwill impairment to be equal to the amount by which a reporting unit’s carrying value exceeds its fair value, limited to the total amount of goodwill of the reporting unit. • Requires prospective adoption. Expected effects: the Company is evaluating this new standard and its expected timing of adoption. Significant Accounting Policies The Company’s accounting policies are described either in this Note or in the applicable Notes to the Consolidated Financial Statements as indicated in the table below. Note Number Footnote and policy Page 4 Earnings per share 71 7 Global Health Care medical costs payable 73 8 Liabilities for unpaid claims and claim expenses 75 9 Reinsurance 78 · GMDB 79 · GMIB 79 10 Fair value measurements 80 · Fixed maturities, equity securities, short-term investments and derivatives 81 · Separate accounts 83 · Commercial mortgage loans 85 · Contractholder deposit funds 85 · Long-term debt 85 11 Investments, investment income and gains and losses 85 · Fixed maturities and equity securities 85 · Commercial mortgage loans 87 · Other long-term investments 88 · Short-term investments and cash equivalents 88 · Net investment income 89 · Realized investment gains and losses 89 12 Derivative financial instruments 89 13 Variable interest entities 91 15 Pension and other postretirement benefit plans 92 16 Employee incentive plans 95 17 Goodwill, other intangibles and property and equipment 98 20 Income taxes 100 21 Contingencies and other matters 102 A. Investments – Policy Loans Policy loans are carried at unpaid principal balances plus accumulated interest, the total of which approximates fair value. These loans are collateralized by life insurance policy cash values and therefore have minimal exposure to credit loss. Interest rate s are reset annually based on a rolling average of benchmark interest rates . B. Cash and Cash Equivalents Cash and cash equivalents are carried at cost that approximates fair value. Cash equivalents consist of sh ort-term investments with maturities of three months or less from the time of purchase. The Company reclassifies cash overdraft positions to accounts payable, accrued expenses and other liabilities when the legal right of offset does not exist. C. Pr emiums, Accounts and Notes Receivable and Reinsurance Recoverables Premiums, accounts and notes receivable and reinsurance recoverables are reported net of allowances for doubtful accounts and unrecoverab le reinsurance of $ 210 million as of December 31, 2017 and $ 203 million as of December 31, 2016 . The Company estimates these allowances for doubtful accounts and unrecoverable reinsurance using management’s best estimates of collectability, taking into consideration the age of the outstanding amou nts, historical collection patterns and other economic factors . See Note 22 for additional discussion of the allowance established in 2016 for the risk corridor receivable. D. Deferred Policy Acquisition Costs Costs eligible for deferral include incremental, direct costs of acquiring new or renewal insurance and investment contracts and other costs directly related to successful contract acquisition. Examples of deferrable costs include commissions, sales compensation and benefits, policy issuan ce and underwriting costs and premium taxes. The Company records acquisition costs differently depending on the product line. Acquisition costs for: Supplemental health, life and accident insurance products (primarily individual products) that comprise the majority of the Company’s deferred policy acquisition costs and group health and accident insurance products are deferred and amortized, generally in proportion to the ratio of periodic revenue to the estimated total revenues over the contract periods. Universal life products are deferred and amortized in proportion to the present value of total estimated gross profits over the expected lives of the contracts. Other products are expensed as incurred. Deferred policy acquisition costs also include the v alue of business acquired for certain acquisitions with material long-duration insurance contracts . The Company recorded amortization of deferred policy acquisition co sts of $ 322 mi llion in 2017 , $ 292 million in 2016 and $ 286 million in 2015 primarily in other operating expenses. Each year, deferred policy acquisition costs are tested for recoverability. For universal life and other individual products, management estimates the present value of future revenues less expected payments. For group health and accident insurance products, management estimates the sum of unearned premiums and anticipated net investment income less future expected claims and related costs. If management’s estimates of these s ums are less than the deferred costs, the Company reduces deferred policy acquisitio n costs and records an additional expense. E. Other Assets, including Other Intangibles Other assets, including other intangibles consist primarily of GMIB assets, accrued net investment income, other intangible assets and various other insurance-related assets. See Note 9 for the Company’s accounting policy for GMIB assets and s ee Note 17 for the Company’s accounting policy for other intangibles. Addit ionally, these other assets include the carrying value of our equity-method investments in joint ventures in China , India (as of 2017) and other foreign jurisdictions. F. Contractholder Deposit Funds Liabilities for contractholder deposit funds primar ily include deposits received from customers for investment-related and universal life products and investment earnings on their fund balances. These liabilities are adjusted to reflect administrative charges and, for universal life fund balances, mortali ty charges. In addition, this caption includes: 1) premium stabilization reserves under group insurance contracts representing experience refunds left with the Company to pay future premiums; 2) deposit administration funds used to fund non-pension retir ee insurance programs; 3) retained asset accounts; and 4) annuities or supplementary contracts without significant life contingencies. Interest credited on these funds is accrued ratably over the contract period. G. Future Policy Benefits Future pol icy benefits represent the present value of estimated future obligations under long-term life and supplemental health insurance policies and annuity products currently in force. These obligations are estimated using actuarial methods and consist primarily of reserves for annuity contracts, life insurance benefits, GMDB contracts (see Note 9 for additional information) and certain health, life and accident insurance products of our Global Supplemental Benefits segment. Obligations for annuities rep resent specified periodic benefits to be paid to an individual or groups of individuals over their remaining lives. Obligations for life insurance policies and GMDB contracts represent benefits expected to be paid to policyholders, net of future premiums expected to be received. Management estimates these obligations based on assumptions as to premiums, interest rates, mortality or morbidity, future claim adjudication expenses and surrenders, allowing for adverse deviation as appropriate. Mortality, morb idity and surrender assumptions are based on the Company’s own experience and published actuarial tables. Interest rate assumptions are based on management’s judgment considering the Company’s experience and future expectatio ns, and range from 0.1 % to 9 %. Obligations for the run-off settlement annuity business include adjustments for realized and unrealized investment returns consistent with GAAP when a premium deficiency exists. H. Redeemable Noncontrolling Interests Produc ts and services are offered in Turkey and India through joint venture entities. T he Company is the principal equity holder and primary beneficiary of the Turkey joint venture and a ccordingly, this entity is consolidated. In 2017, Cigna modified the agree ment governing its joint venture in India due to changes in the local regulatory environment that require control by a local partner. As a result of the changes in the joint venture agreement, the Company determined that it is no longer the primary benefi ciary of the joint venture and, effective with the third quarter of 2017, no longer consolidates its results. As of December 31, 2017 t he redeemable noncontrolling interests on our Consolidated Balance Sheets represent the Turkey joint venture partner’s preferred and common stock interests in the entity . Our joint venture partner may, at their election, require the Company to purchase their redeemable noncontrolling interests. We also have the right to require our joint venture partner to sell their re deemable noncontrolling interests to us. The redeemable noncontrolling interests were recorded at fair value as of the dates of purchase. When the estimated redemption value for a redeemable noncontrolling interest exceeds its carrying value, an adjustme nt to increase the redeemable noncontrolling interest is recorded with an offsetting reduction to additional paid-in capital. When an adjustment is made to the carrying value of the redeemable noncontrolling interest, the calculation of shareholders’ net income per share will be adjusted if the redemption value exceeds the greater of the carrying value or fair value. I. Accounts Payable, Accrued Expenses and Other Liabilities Accounts payable, accrued expenses and other liabilities include liabilities for pension, other postretirement and postemployment benefits (see Note 15 ), GMIB contract liabilities (see Note 9 ), self-insured exposures, management compensation, cash overdraft positions and various insurance-related liabilities, includ ing experience-rated refunds, reinsurance contracts and the risk adjustment and minimum medical loss ratio rebate accrual s under The Patient Protection and Affordable Care Act (the “ACA”). Legal costs to defend the Company’s litigation and arbitration mat ters are expensed when incurred in cases where the Company cannot reasonably estimate the ultimate cost to defend. In cases where the Company can reasonably estimate the cost to defend, a liability for these costs is accrued when the claim is reported. J . Translation of Foreign Currencies The Company generally conducts its international business through foreign operating entities that maintain assets and liabilities in local currencies that are generally their functional currencies. The Company uses e xchange rates as of the balance sheet date to translate assets and liabilities into U.S. dollars. Translation gains or losses on functional currencies, net of applicable taxes, are recorded in accumulated other comprehensive income (loss). The Company us es average monthly exchange rates during the year to translate revenues and expenses into U.S. dollars. K. Premiums and Related Expenses Premiums for group life, accident and health insurance and managed care coverages are recognized as revenue on a pro rata basis over the contract period. Benefits and expenses are recognized when incurred and, for our Global Health Care insured business, medical costs are presented net of pharmaceutical manufacturer rebates. For experience-rated contracts, premium revenue includes an adjustment for experience-rated refunds based on contract terms and calculated using the customer’s experience (including e stimates of incurred but not reported claims). Premium revenue also includes an adjustment to reflect the estimated effect of rebates due to customers under the commercial minimum medical loss ratio provisions of the ACA . These rebates are settled in t he year following the policy year. Premiums received for the Company’s Medicare Advantage Plans and Medicare Part D products from the Centers for Medicare and Medicaid Services (“CMS”) and customers are recognized as revenue ratably over the contract pe riod. CMS provides risk-adjusted premium payments for Medicare Advantage Plans and Medicare Part D products based on the demographics and wellness of enrollees. The Company recognizes periodic changes to risk-adjusted premiums as revenue when the amounts are determinable and collection is reasonably assured. Additionally, Medicare Part D premiums include payments from CMS for risk sharing adjustments. The risk sharing adjustments are estimated quarterly based on claim experience by compar ing actual incu rred drug benefit costs to estimated costs submitted in original contracts . These adjustments may result in more or less revenue from CMS. Final revenue adjustments are determined and settled with CMS in the year following the contract year. Premium rev enue also includes an adjustment to reflect the estimated effect of rebates due to CMS under the Medicare Advantage and Medicare Part D minimum medical loss ratio provisions of the ACA . T he ACA prescribed three programs to mitigate the risk for participating health insurance companies selling c overage on the public exchanges: risk adjustment, reinsurance and risk corridor. The reinsurance and risk corridor programs expired at the end of 2016, while the permanent risk adjustment program continue s. A summary of these programs and the Company’s accounting policy is provided below. The risk adjustment program reallocates funds from insurers with lower risk populations to insurers with higher risk populations based on the relative risk scores of pa rticipants in non-grandfathered plans in the individual and small group markets, both on and off the exchanges. We estimate our receivable or payable based on the risk of our members compared to the risk of other members in the same state and market, cons idering data obtained from industry studies and the United States Department of Health and Human Services (“HHS”). Receivables or payables are recorded as adjustments to premium revenue based on our year-to-date experience when the amounts are reasonably estimable and collection is reasonably assured. Final revenue adjustments are determined by HHS in the year following the policy year. The reinsurance program (discontinued as of December 31, 2016) was designed to provide reimbursement to insurers for hi gh cost individual business sold on or off the public exchanges. Reinsurance contributions associated with non-grandfathered individual plans were reported as reductions in premium revenues, and estimated reinsurance recoveries were established with offse tting reductions in Global Health Care medical costs. Reinsurance fee contributions for other insured business were reported in other operating expenses. The risk corridor program (also discontinued as of December 31, 2016) was designed to limit insurer gains and losses by comparing allowable medical costs to a target amount as defined by HHS. The Company recorded receivables or payables as adjustments to premium revenue based on year-to-date experience when the amounts were reasonably estimable and coll ection was reasonably assured. In 2016, the Company also recorded an allowance against these risk corridor receivables that is discussed further in Note 22. Premiums for individual life, accident and supplemental health insurance and annuity products, exc luding universal life and investment-related products, are recognized as revenue when due. Benefits and expenses are matched with premiums. Revenue for universal life products is recognized as follows: Investment income on assets supporting universal li fe products is recognized in net investment income as earned. Charges for mortality, administration and policy surrender are recognized in premiums as earned. Administrative fees are considered earned when services are provided. Benefits and expenses for universal life products consist of benefit claims in excess of policyholder account balances and income earned by policyholders. Expenses are recognized when claims are incurred, and income is credited to policyholders in accordance with contract provisio ns. The unrecognized portion of premiums received is recorded as unearned premiums. L. Fees, Related Expenses and Mail Order Pharmacy Revenues and Costs Contr act fees for administrative services only (“ASO”) programs and pharmacy programs and services are recognized in fees and other revenues as services are provided, net of estimated pharmaceutical manufacturer rebates payable to ASO clients using our network of retail pharmacies and estimated refunds under performance guarantees. Expenses associated with these programs and services are recognized in other operating expenses as incurred, net of estimated pharmaceutical rebates from manufacturers for prescripti ons filled through our network of retail pharmacies. In some cases, the Company provides performance guarantees associated with meeting certain service standards, clinical outcomes or financial metrics. If these service standards, clinical outcomes or financial metrics are not met, the Company may be financially at risk up to a stated percentage of the contracted fee s or a stated dollar amount. The Company defers revenues for estimated payouts associated with these performance guarante es. Approximatel y 11 % of ASO fees reported for the year ended December 31, 2017 were at risk under performance guarantees, with reimbursements estimat ed to be less than 1 % of revenues. Revenues for investment-related products are recognized as follows : Investment income on assets supporting investment-related products is recognized in net investment income as earned. Contract fees based upon related administrative expenses are recognized in fees and other revenues as they are earned ratably over the contract period. Benefits and expenses for investment-related products consist primarily of income credited to policyholders in accordance with contract provisions. Mail order pharmacy revenues and the cost of prescriptions are recognized as each prescri ption is shipped. Mail order pharmacy revenues are presented net of estimated pharmaceutical manufacturer rebates payable to ASO clients using our mail order business. Mail order pharmacy costs include the cost of prescriptions sold and other costs to op erate this business including supplies, shipping and handling, net of estimated pharmaceutical rebates from manufacturers for prescriptions filled through our mail order business. |
Mergers and Acquisitions
Mergers and Acquisitions | 12 Months Ended |
Dec. 31, 2017 | |
Acquisitions and Dispositions [Abstract] | |
Acquisitions and Dispositions | Note 3 – Mergers, Acquisitions and Dispositions The following table presents transaction-related costs incurred by the Company for the years ended December 31, 2017, 2016 and 2015. Transaction-related costs primarily consist of fees for legal, advisory and other professional services as well as employee costs. In addition, because the merger with Anthem, Inc. (“Anthem”) was not consummated, certain transaction-related costs that were previously not deductible for federal income tax purposes became deductible. The Company recognized an incremental tax benefit fo r these newly deductible costs in 2017 as presented below. 2017 2016 2015 (In millions) Before-tax After-tax Before-tax After-tax Before-tax After-tax Transaction-related costs $ 126 $ 92 $ 166 $ 147 $ 66 $ 57 Tax (benefit) - previously non-deductible costs - (59) - - - - Transaction-related costs, net $ 126 $ 33 $ 166 $ 147 $ 66 $ 57 |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 4 – E arnings P er S hare (“EPS”) Accounting policy. The Company computes basic earnings per share using the weighted-average number of unrestricted common and deferred shares outstanding. Diluted earnings per share also includes the dilutive effect of outstanding employee stock options and restricted stock using the treasury stock method and the effect of strategic performance shares. Basic and diluted earnings per share were computed as follows: 2017 2016 2015 (Shares in thousands, dollars in millions, except per share amounts) Effect of Effect of Effect of Basic Dilution Diluted Basic Dilution Diluted Basic Dilution Diluted Shareholders' net income $ 2,237 $ - $ 2,237 $ 1,867 $ - $ 1,867 $ 2,094 $ - $ 2,094 Shares Weighted average 250,892 - 250,892 255,360 - 255,360 256,149 - 256,149 Common stock equivalents 4,180 4,180 4,287 4,287 4,443 4,443 Total shares 250,892 4,180 255,072 255,360 4,287 259,647 256,149 4,443 260,592 EPS $ 8.92 $ (0.15) $ 8.77 $ 7.31 $ (0.12) $ 7.19 $ 8.17 $ (0.13) $ 8.04 The following outstanding employee stock options were not included in the computation of diluted earnings per share because their effect w as anti - dilutive. (In millions) 2017 2016 2015 Anti-dilutive options 0.9 2.3 0.4 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Note 5 – Debt The outstanding amounts of debt and capital leases for the years ended December 31 were as follows: (In millions) 2017 2016 Short-term debt Commercial paper $ 100 $ - Current maturities of long-term debt 131 250 Other, including capital leases 9 26 Total short-term debt $ 240 $ 276 Long-term uncollateralized debt $131 million, 6.35% Notes due 2018 $ - $ 131 $250 million, 4.375% Notes due 2020 (1) 249 252 $300 million, 5.125% Notes due 2020 (1) 299 301 $78 million, 6.37% Notes due 2021 78 78 $300 million, 4.5% Notes due 2021 (1) 299 302 $750 million, 4% Notes due 2022 745 744 $100 million, 7.65% Notes due 2023 100 100 $17 million, 8.3% Notes due 2023 17 17 $900 million, 3.25% Notes due 2025 894 893 $600 million, 3.05% Notes due 2027 594 - $259 million, 7.875% Debentures due 2027 (2) 258 299 $45 million, 8.3% Step Down Notes due 2033 (2) 45 82 $191 million, 6.15% Notes due 2036 (2) 190 498 $121 million, 5.875% Notes due 2041 (2) 119 296 $317 million, 5.375% Notes due 2042 (2) 315 743 $1,000 million, 3.875% Notes due 2047 988 - Other, including capital leases 9 20 Total long-term debt $ 5,199 $ 4,756 (1) The Company has entered into interest rate swap contracts hedging a portion of these fixed-rate debt instruments. See Note 12 for further information about the Company’s interest rate risk management and these derivative instruments. (2) The Company redeemed a portion of these debt issues through a cash tender offer in September 2017, the aggregate amount of which was $1.0 billion. In the third quarter of 2017, the Company entered into two significant debt transactions: the issuance of new debt and a cash tender offer to retire a portion of outstanding debt. These transactions are described in more detail below. On September 14, 2017, the Company issued new long-term debt as follows: (In millions) Debt Instrument Principal Term Maturity Stated Interest Rate Effective Interest Rate Amount net of discount and fees Interest payment dates 10-Year Notes $ 600 10-Year October 15, 2027 3.05 % 3.183 % $ 594 April 15 and October 15 30-Year Notes $ 1,000 30-Year October 15, 2047 3.875 % 3.951 % $ 987 April 15 and October 15 The proceeds of this debt were mainly used to pay the consideration for the cash tender offer as described below. The Company intends to use the remaining proceeds for general corporate purposes, including the maturity of its Notes due in 2018. At any time prior to July 15, 2027 (three months prior to the maturity date of the 10-Year Notes) or April 15, 2047 (six months prior to the maturity date of the 30-Year Notes), the Company may redeem the 10-Year Notes or the 30-Year Notes, in whole or in part, with accrued and unpaid interest, at a redemption price equal to the greater of: 100% of the principal amount of the applicable Notes; or the sum of the present values of the remaining scheduled payments of principal and interest (excluding interest accru ed at the redemption date) from the redemption date to the maturity date discounted at the applicable Treasury Rate plus 15 basis points for the 10-Year Notes and 20 basis points for the 30-Year Notes. In the third quarter of 2017, the Company completed a cash tender offer to purchase $1.0 billion of aggregate principal amount of certain of its outstanding debt securities. The Company recorded a pre-tax loss of $321 million ($209 million after-tax), consisting primarily of premium payments on the tender. During the first quarter of 2017, the Company repaid $250 million of long-term notes that had matured. In April 2015, the Company redeemed two of its outstanding notes early. The Company paid $955 million, including accrued interest and expenses that resulted in a pre-tax loss on early debt extinguishment of $100 million ($65 million after-tax). In December 2017, the Company entered into an updated revolving credit and letter of credit agreement. This agreement extends through December 2022 and is diversified among 15 banks. Under this agreement, the Company can borrow up to $ 1.5 billion for general corporate purposes, of which up to $ 500 million can be used for letters of credit. The credit agreement includes options to increase the commitment amount to $ 2 billion and to extend the term past December 2022 , subject to consent by the lenders. The agreement contains customary covenants and restrictions, including a financial covenant that the Company may not permit its leverage ratio – total consolidated debt to total consolidated capitalization (each as defined in the credit agreement) – to be greater than 50% . The Company was in compliance wit h its debt covenants as of December 31, 2017 . As of December 31, 2017 , the Company had $ 9.3 billion of borrowing capacity within the maximum debt leverage covenant in the credit agreement, in addition to $ 5.4 billion of debt ou tstanding. The Company had $ 11 million of letters of credit outstanding as of December 31, 2017 . Maturi ties of long-term debt and capital leases a re as follows: Scheduled Maturities (In millions) Long-term Debt (1) Capital Leases 2018 $ 131 $ 9 2019 $ - $ 8 2020 $ 550 $ 1 2021 $ 378 $ - 2022 $ 750 $ - Maturities after 2022 $ 3,550 $ - (1) Long-term debt maturity amounts exclude capital leases. Inte rest expense on long-term and short-term debt was $ 243 million in 2017 , $ 251 million in 2016 , and $ 252 million in 2015 . These amounts exclude losses on the early extinguishment of debt. |
Common and Preferred Stock
Common and Preferred Stock | 12 Months Ended |
Dec. 31, 2017 | |
Common And Preferred Stock [Abstract] | |
Common and preferred stock | Note 6 – Common and Preferred Stock As of December 31, the Company had issued the following shares: (Shares in thousands) 2017 2016 2015 Common: Par value $0.25; 600,000 shares authorized Outstanding - January 1, 256,869 256,544 259,276 Issued for stock option exercises and other benefit plans 2,761 1,110 2,751 Repurchased common stock (15,663) (785) (5,483) Outstanding - December 31, 243,967 256,869 256,544 Treasury stock 52,178 39,276 39,601 Issued - December 31, 296,145 296,145 296,145 The Company maintains a share repurchase program authoriz ed by its Board of Directors. Under this program, the Company may repurchase shares from time to time. The timing and actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions, and alternate uses of capital. The share repurchase program may be effected through open market purchases or privately negotiated transactions in compliance with Rule 10b-18 under the Securities Exc hange Act of 1934, as amended, including through Rule 10b5-1 trading plans. The program may be suspended or discontinued at any time. T he Comp any has authorized a total of 25 million shares of $1 par value preferred stock. No shares of preferred stock w ere ou tstanding at December 31, 2017 , 2016 or 2015 . |
Global Health Care Medical Cost
Global Health Care Medical Costs Payable | 12 Months Ended |
Dec. 31, 2017 | |
Global Health Benefits Segment [Member] | |
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | |
Global Health Care Medical Costs Payable | N ote 7 – Global H ealth C are M edical Costs P ayable Medical costs payable for the Global Health Care segment reflects estimates of the ultimate cost of claims that have been incurred but not reported, including expected development on reported claims, those that have been reported but not yet paid (reported claims in process), and other medical care expenses and services payable that are primarily comprised of accruals for incentives and other amounts payable to health care professionals and fac ilities. Accounting policy. The Company uses actuarial principles and assumptions that are consistently applied each reporting period and recognizes the actuarial best est imate of the ultimate liability along with a margin for adverse deviation . This ap proach is consistent with actuarial standards of practice that the liabilities be adequate under moderately adverse conditions. This liability predominately consists of incurred but not reported amounts and reported claims in process including expected d evelopment on reported claims. The liability is primarily calculated using “completion factors” developed by comparing the claim incurral date to the date claims were paid. Completion factors are impacted by several key items including changes in: 1) electronic (auto-adjudication) versus manual claim processing, 2) provider claims submission rates, 3) membership and 4) the mix of products. The Company uses historical completion factors combined with an analysis of current trends and operational fa ctors to develop current estimates of completion factors. T he Company estimates the liability for claims incurred in each month by applying the current estimates of completion factors to the current paid claims data. This approach implicitly assumes that historical completion rates will be a useful indicator for the current period. F or more recent months , the Company relies more heavily on medical cost trend analysis that reflects expected claim payment patterns and other relevant operational consider ations. Medical cost trend is primarily impacted by medical service utilization and unit costs that are affected by changes in the level and mix of medical benefits offered, including inpatient, outpatient and pharmacy, the impact of copays and deductible s, changes in provider practices and changes in consumer demographics and consumption behavior. For each reporting period, the Company compares key assumptions used to establish the medical costs payable to actual experience. When actual experience diffe rs from these assumptions, medical costs payable are adjusted through current period shareholders’ net income. Additionally, the Company evaluates expected future developments and emerging trends tha t may impact key assumptions. The process used to deter mine this liability requires the Company to make critical accounting estimates that involve considerable judgment , reflecting the variability inherent in forecasting future claim payments. These estimates are highly sensitive to changes in the Company’s k ey assumptions, specifically completion factors and medical cost trends. Activity in medical costs payable for the years ended December 31 was as follows: (In millions) 2017 2016 2015 Balance at January 1, $ 2,532 $ 2,355 $ 2,180 Less: Reinsurance and other amounts recoverable 275 243 252 Balance at January 1, net 2,257 2,112 1,928 Incurred costs related to: Current year 20,233 19,087 18,564 Prior years (266) (78) (210) Total incurred 19,967 19,009 18,354 Paid costs related to: Current year 17,979 17,052 16,588 Prior years 1,791 1,812 1,582 Total paid 19,770 18,864 18,170 Balance at December 31, net 2,454 2,257 2,112 Add: Reinsurance and other amounts recoverable 265 275 243 Balance at December 31, $ 2,719 $ 2,532 $ 2,355 Reinsurance and other amounts recoverable reflect amounts due from reinsurers and policyholders to cover incurred but not reported and pending claims for certain business where the Company administers the plan benefits but the right of offset does not exist. See Note 9 for additio nal information on reinsurance. The total of incurred but not reported liabilities plus expected development on reported claims, including reported claims in process, was $ 2.6 billion at December 31, 2017 and $ 2.4 billion at December 31, 2016 . The remaining balance in both periods reflects amounts due for physician incentives and other medical care expenses and services payable. For the years ended December 31, variances in incurred costs related to pri or years’ medical costs payable that resulted from the differences between actual experience and the Company’s key assumptions were as follows: 2017 2016 ($ in millions) $ % (1) $ % (2) Actual completion factors $ 124 0.7 % $ 59 0.3 % Medical cost trend 133 0.7 27 0.1 Other (3) 9 - (8) - Total favorable variance $ 266 1.4 % $ 78 0.4 % (1) Percentage of current year incurred costs as reported for 2016. (2) Percentage of current year incurred costs as reported for 2015. (3) Other amounts in 2017 primarily related to an increase in the 2016 reinsurance reimbursement rate from CMS under the ACA. Other amounts in 2016 primarily related to increased medical costs in the Government segment resulting from sharing additional risk adjustment revenue with providers. Incurred costs related to prior years in the table above , although adjusted through shareholders’ net income, do not directly correspond to an increase or decrease to shareholders’ net income . The primary reason for this difference is that decreases to prior year incurred costs pertaining to the portion of the liability established for moderately adverse conditions are not considered as impacting shareholders’ net income if they are offset by increases in the current year provision f or moderately adverse conditions. The net impact of prior year development on shareholders’ net income was a $ 112 million increase for the year ended December 31, 2017 . The net impact of prior year development on shareholders’ net income was insign ificant in 2016 . F avorable prior year development implies primarily low er than expected utilization of medical services and vice versa while amounts close to zero imply utilization of medical serv ices that are consistent with expectations . The following table depicts the incurred and paid claims development as of December 31, 2017 (net of reinsurance), claims frequency metrics and incurred but not reported liabilities for Cigna's Global Health Care medical costs payable. The information about incurred and paid claims development for the year ended December 31, 2016 is presented as supplementary information and is unaudited. Incurred Costs Incurral Year 2016 (Unaudited) 2017 Medical Costs Payable Claims Frequency ($ in millions, except for claims frequency) 2016 $ 19,087 $ 18,822 $ 159 2.7 million 2017 20,233 $ 2,254 3.3 million Cumulative incurred costs for the periods presented $ 39,055 Cumulative Paid Costs Incurral Year 2016 (Unaudited) 2017 2016 $ 17,052 $ 18,663 2017 17,979 Cumulative paid costs for the periods presented $ 36,642 Cumulative incurred costs less cumulative paid costs for the periods presented $ 2,413 Outstanding liabilities prior to 2016 41 Net outstanding liabilities for Global Health Care medical costs payable 2,454 Reinsurance and other amounts recoverable 265 Total liability for Global Health Care medical costs payable $ 2,719 More than 95% of health claims for an accident year are paid within one year of their incurred date. There is no single or common claim frequency metric used in the health care industry. The Company believes a relevant metric for the Global Health Care segment is the number of customers for whom an insured medical claim was paid. Customers for whom no insured medical claim was paid are excluded from the calculation. Claims that did not result in a liability are not included in the frequency metric. |
Liabilities for Unpaid Claims a
Liabilities for Unpaid Claims and Claims Expenses | 12 Months Ended |
Dec. 31, 2017 | |
Group Disability and Life, Global Supplemental Beneftits and Other Operations [Member] | |
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | |
Liabilities for Unpaid Claims and Claims Expenses | N ote 8 ― Liabilities for Unpaid Claims and Claim Expenses The following information relates to the Company’s unpaid claims and claim expense liabilities. Accounting policy. Liabilities for unpaid claims and claim expenses are established by book of business within the Company's Group Disability and Life, Global Supplemental Benefits and Other Operations segments . The Group Disability and Life segment’s liability for unpaid claims and claim expenses consists of the following primary products: long-term and short-term disability, life insurance, and accident coverages. Unpaid claims and claim expenses consist of (1) case or claims reserves for reported claims that are unpaid as of the balance sheet date; (2) incurred but not reported reserves for claims whe n the insured event has occurred but has not been reported to the Company; and (3) loss adjustment expense reserves for the expected costs of settling the se claims . The Company consistently estimates incurred but not yet reported losses usi ng actuarial principles and assumptions based on historical and projected claim incidence patterns, claim size and the expected payment period. The Company recognizes the actuarial best estimate of the ultimate liability within a level of confidence, cons istent with actuarial standards of practice that the liabilities be adequate under moderately adverse conditions. When estimates of these liabilities change, the Company immediately records the adjustment in benefits and expenses. The majority of the Company’s liability for disability claims consists of the present value of estimated future benefit payments, including expected development, for each reported claim that is currently receiving benefit payments, or pending a decision on eligibility for ben efits, over the expected disability period. The Company projects the expected disability period by using historical resolution rates combined with an analysis of current trends and operational factors to develop current estimates of resolution rates. Usi ng the Company’s experience, expected claim resolution rates may vary based upon the anticipated disability period, the covered benefit period, the cause of disability, the benefit design and the claimant’s age, gender and income level. The gross monthly benefit is reduced (offset) by disability income received under other benefit programs, most commonly Social Security Disability Income, workers’ compensation, statutory disability or other group benefit plans. For certain offsets not yet finalized, the C ompany estimates the probability and amount of future offset awards and lapses based on the Company’s experience. The Company also establishes a liability for the expected present value of future benefit payments for known claims that have recently been r esolved but may reopen in the future, based on Company experience. Prior to a claim becoming known, the Company establishes a liability for incurred but not reported claims, using standard actuarial techniques and calculations based on completion factors and loss ratio assumptions using the Company’s experience combined with an analysis current trends and operational factors. Completion factors are impacted by several key items including changes in claim inventory levels, claim payment patterns, changes i n business volume and other factors. Loss ratio assumptions are developed using historical Company experience, adjusted prospectively for expected changes in the underlying business including rate actions, persistency and inforce growth. Liability balan ce details. The liability for unpaid claims and claim expenses by segment as of December 31 is as follows: (In millions) 2017 2016 Group Disability and Life $ 4,491 $ 4,342 Global Supplemental Benefits 484 384 Other Operations 193 191 Unpaid claims and claim expenses $ 5,168 $ 4,917 The Company discounts certain liabilities, predominantly long-term disability, because benefits payments are made over extended periods. Discount rate assumptions for these liabilities are based on projected investment returns for the supporting asset portfolios . Details of the Company’s unpaid claim discounted liability balances as of December 31 were as follows: (In billions) 2017 2016 Discounted liabilities $ 4.0 $ 3.9 Aggregate amount of discount $ 1.0 $ 1.1 Range of discount rates 4.5 % - 5.2 % 3.3 % - 5.8 % Interest is accreted and recognized in other benefit expenses in the Consolidated Statement of Income. Activity in the Company’s Group Disability and Life and the Global Supplemental Benefits segments’ liabilities for unpaid claims and claim expenses are presented in the following table. Liabilities associated with the Company’s Other Operations segment ar e excluded because they pertain to obligations for long-duration insurance contracts or, if short-duration, the liabilities have been fully reinsured. (In millions) 2017 2016 2015 Balance at January 1, $ 4,726 $ 4,359 $ 4,178 Less: Reinsurance 121 115 104 Balance at January 1, net 4,605 4,244 4,074 Incurred claims related to: Current year 4,341 4,258 3,813 Prior years Interest accretion 163 161 163 All other incurred (4) 93 (91) Total incurred 4,500 4,512 3,885 Paid claims related to: Current year 2,724 2,575 2,325 Prior years 1,572 1,560 1,382 Total paid 4,296 4,135 3,707 Acquisitions - - 11 Foreign currency 29 (16) (19) Balance at December 31, net 4,838 4,605 4,244 Add: Reinsurance 137 121 115 Balance at December 31, $ 4,975 $ 4,726 $ 4,359 Reinsurance in the previous table reflect s amounts due from reinsurers related to unpaid claims liabilities. The Company's insurance subsidiaries enter into agreements with other companies primarily to limit losses from large exposures and to permit recovery of a portion of incurred losses. See Note 9 for additional information on reinsurance. The majority of the liability for unpaid claims and claim expenses is related to disability claims with long-tailed payouts. Interest earned on assets backing these liabilities is an integral part o f pricing and reserving. Therefore, interest accreted on prior year balances is shown as a separate component of prior year incurred claims. This i nterest is calculated by applying the average discount rate used in determining the liability balance to th e average liability balance over the period. The remaining prior year incurred claims amount primarily reflects updates to the Company’s liability estimates and variances between actual experience during the period relative to the assumptions and expectat ions reflected in determining the liability. Assumptions reflect the Company’s expectations over the life of the book of business and will vary from actual experience in any period, both favorably and unfavorably, with variation in resolution rates being the most significant driver for the long-term disability business. Prior year i ncurred claims reported in 2016 included the impact of changes made to our disability claims management process and a period of elevated life claims. Long- t erm d isability d evelopment t ables. The table below presents information about incurred and paid claims development as of December 31, 2017 ( net of reinsurance ) cumulative claim frequency and total incurred but not reported liabilities for the Company's long-term disability book of business. The information about incurred and paid claims d evelopment for the years ended 2012 through 2016 is presented as supplementary information and is unaudited. As permitted under GAAP, the Company presented develo pment table information beginning in 2012 because obtaining information beyond this period was impracticable as historical data was not maintained in such detail. (In millions, except for claims frequency) Incurred Claims (undiscounted) Accident Year 2012 (Unaudited) 2013 (Unaudited) 2014 (Unaudited) 2015 (Unaudited) 2016 (Unaudited) 2017 Incurred But Not Reported Liabilities Claims Frequency 2012 $ 995 $ 951 $ 889 $ 876 $ 883 $ 880 $ - 21,180 2013 1,063 1,037 1,062 1,072 1,057 - 23,516 2014 1,158 1,129 1,167 1,146 - 25,281 2015 1,184 1,154 1,185 5 25,609 2016 1,246 1,184 20 24,722 2017 1,226 540 10,569 Cumulative incurred claims for the periods presented $ 6,678 Cumulative Paid Claims Accident Year 2012 (Unaudited) 2013 (Unaudited) 2014 (Unaudited) 2015 (Unaudited) 2016 (Unaudited) 2017 2012 $ 81 $ 288 $ 429 $ 504 $ 571 $ 621 2013 92 342 503 600 670 2014 111 379 575 667 2015 114 417 603 2016 122 411 2017 110 Cumulative paid claims for the periods presented $ 3,082 All outstanding liabilities for the periods presented, net of reinsurance $ 3,596 All outstanding liabilities prior to 2012, net of reinsurance 1,142 Impact of discounting (948) Liability for long-term disability unpaid claims and claim expenses, net of reinsurance $ 3,790 The claims frequency metric used for the Company’s long-term disability line of business represents the number of unique claim events for which benefits have been approved and payments made. Claim events are identified using a unique claimant identifier and incurral date. Thus, if an individual has multiple claims for different disabling events (and therefore different incurral dates), each will be determined to be a unique claim event. However, if an individual receives multiple benefits under more tha n one policy (for example for supplemental disability benefits such as pension contribution benefits or survivor benefits), the Company treats this as a single claim occurrence because they related to the same claim event. Claims frequency metrics for the most recent year are expected to be low reflecting the long-term disability product features including waiting and elimination periods that result in delayed eligibility for contract benefits. Claims that did not result in a liability are not included in the frequency metric. The following is supplementary and unaudited information about average historical claims payout patterns for the long-term disability business for the years presented in the development table as of December 31, 2017 . The average annual perc entage payout of incurred claims, net of reinsurance, is approximately 9 % in year one, 24 % in year two, 16 % in year three, 9 % in year four , 7 % in year five , and 6 % in year six. The following table reconciles the long-term disability net incurred and paid claims development table to the liability for unpaid claims and claim expenses in the Company's C onsolidated B alance S heet s as of December 31, 2017 . (In millions) Net outstanding liabilities – Group Disability and Life segment Long-term disability liabilities, net of reinsurance $ 3,790 Other short-duration insurance books of business, net of reinsurance 599 Liabilities for unpaid claims and claim expenses, net of reinsurance 4,389 Reinsurance recoverable on unpaid claims – Group Disability and Life segment Long-term disability 94 Other short-duration insurance books of business 8 Total reinsurance recoverable on unpaid claims 102 Total liability for unpaid claims and claim expenses – Group Disability and Life segment 4,491 Global Supplemental Benefits segment 484 Other Operations segment 193 Total liability for unpaid claims and claim expenses $ 5,168 The other short-duration insurance books of business, net of reinsurance, primarily include liabilities for life, accident and short-term disability insurance products. Liabilities for these products are typically complete within one year. Claim development on these liabilities is largely driven by completion factors and loss ratio assumptions. In 2016, development on these liabilities was driven by a period of elevated life claims. |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2017 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | N ote 9 – R einsurance The Company’s insurance subsidiaries enter into agreements with other insurance companies to assume and cede reinsurance. Reinsurance is ceded primarily to limit losses from large exposures and to permit recovery of a portion of direct or assumed losses. Reinsurance is also used in acquisition and disposition transactions when the underwriting company is not be ing acquired. R einsurance does not relieve the originating insurer of liability. Therefore, reinsured liabilities must continue to be reported along with the related reinsurance recoverables . The Company regularly evaluates the financial condition of it s reinsurers and monitors concentrations of its credit risk. Reinsurance Recoverables The majority of the Company’s reinsurance recoverables resulted from acquisition and disposition transactions in which the underwriting company was not acquired. Components of the Company’s reinsurance recoverables are presented in the following table : (Dollars in millions) Line of Business Reinsurer(s) December 31, 2017 December 31, 2016 Collateral and Other Terms at December 31, 2017 Ongoing Operations Global Health Care, Global Supplemental Benefits, Group Disability and Life, COLI Various $ 454 $ 478 Recoverables from approximately 90 reinsurers, used in the ordinary course of business. Current balances range from less than $1 million up to $80 million. Over 70% of the balance is from companies rated as investment grade by Standard & Poor's, and 11% is secured by assets in trusts or letters of credit. Total recoverables related to ongoing operations 454 478 Acquisition, disposition or runoff activities Individual Life and Annuity (sold in 1998) Lincoln National Life and Lincoln Life & Annuity of New York 3,436 3,586 Both companies' ratings were sufficient to avoid triggering a contractual obligation to fully secure the outstanding balance. GMDB (effectively exited in 2013) Berkshire 928 1,085 100% secured by assets in a trust. Other 34 44 100% secured by assets in a trust or letters of credit. Retirement Benefits Business (sold in 2004) Prudential Retirement Insurance and Annuity 850 921 100% secured by assets in a trust. Supplemental Benefits Business (2012 acquisition) Great American Life 283 297 100% secured by assets in a trust. Other run-off reinsurance Various 61 67 100% secured by assets in a trust or other deposits. Total recoverables related to acquisition, disposition or runoff activities 5,592 6,000 Total reinsurance recoverables $ 6,046 $ 6,478 The Company bears the risk of loss if its reinsurers and retrocessionaires do not meet or are unable to meet their reinsurance obligations to the Company. The Company reviews its reinsurance arrangements and establishes reserves against the recoverables if recovery is not considered probable. Effects of Reinsurance The following table presents direct, assumed and ceded p remiums for both short-duration and long-duration insurance contracts. It also presents reinsurance recoveries that have been netted against benefits and expenses in the Company’s Consolidated Statements of Income . (In millions) 2017 2016 2015 Premiums Short-duration contracts Direct $ 28,654 $ 27,496 $ 26,751 Assumed 199 247 289 Ceded (150) (229) (254) Total short-duration contract premiums 28,703 27,514 26,786 Long-duration contracts Direct 3,748 3,259 3,061 Assumed 130 137 111 Ceded Individual life insurance and annuity business sold (143) (153) (158) Other (131) (131) (158) Total long-duration contract premiums 3,604 3,112 2,856 Total premiums $ 32,307 $ 30,626 $ 29,642 Reinsurance recoveries Individual life insurance and annuity business sold $ 259 $ 279 $ 301 Other 66 261 436 Total reinsurance recoveries $ 325 $ 540 $ 737 The effects of reinsurance on written premiums for short-duration contracts were not materially different from the recognized premium amounts shown in the table above Effective Exit of GMDB and GMIB Business In 2013, the Company entered into an agreement with Berkshire to effectively exit the GMDB and GMIB business via a reinsurance transaction. Berkshire reinsured 100% of the Company's future claim payments in this business, net of other reinsurance arrangements existing at that time. The reinsurance agreement is subject to an overall limit with approximately $3.4 billion remaining at December 31, 2017. GMDB is accounted for as reinsurance and GMIB assets and liab ilities are reported as derivatives at fair value as discussed below. GMIB assets are reported in other assets, including intangibles, and GMIB liabilities are reported in accounts payable, accrued expenses and other liabilities. GMDB The majority of th e GMDB exposure arises under annuities written by ceding companies that guarantee the benefit received at death will be no less than the highest historical account value of the related mutual fund investments on a contractholder’s anniversary date. Under this type of death benefit, the Company’s exposure arises when the highest anniversary account value exceeds the fair value of the related mutual fund investments at the tim e of a contractholder’s death. Accounting policy. The Company estimates th e gross liability and reinsurance recoverable with an internal model based on the Company’s experience and future expectations over an extended period, consistent with the long-term nature of this product. As a result of the reinsurance transaction, reser ve increases have a corresponding increase in the recorded reinsurance recoverable, provided the increased recoverable remains within the overall Berkshire limit (including the GMIB asset presented below ). The ending net retained reserve covers ongoing ad ministrative expenses, as well as minor claim exposure retained by the Company. Because the product is premium deficient, the Company records an increase to the net retained reserve if it is inadequate based on the model. The following table presents the account value, net amount at risk and average attained age of underlying contractholders for guarantees assumed by the Company in the event of death. The net amount at risk is the amount that the Company would have to pay if all contractholders died as of the specified date. Unless the Berkshire reinsurance limit is exceeded, the Company sh ould be reimbursed in full for these payments. (Dollars in millions, excludes impact of reinsurance ceded) 2017 2016 Account value $ 10,109 $ 10,650 Net amount at risk $ 2,112 $ 2,458 Average attained age of contractholders (weighted by exposure) 75 75 Number of contractholders 245,000 285,000 GMIB In this business, the Company reinsured contracts with issuers of GMIB products. The Company’s exposure represents the excess of a contractually guaranteed amount over the level of variable annuity account values. Payment by the Company depends on the actual account value in the underlying mutual funds and the level of interest rates when the contractholders elect to receive minimum income payments that must occur within 30 days of a policy anniversary after the a ppropriate waiting period . The Company has purchased retrocessional coverage (“GMIB assets”) for these contracts. Accounting policy. The Company reports GMIB liabilities and assets as derivatives at fair value because cash flows of these liabilities and assets are affected by equity markets and interest rates, but are without significant life insurance risk and are settled in lump sum payments . Periodically, the Company receives and pays fees based on either contractholders’ account values or deposits i ncreased at a contractual rate. The Company will also pay and receive cash depending on changes in account values and interest rates when contractholders first elect to receive minimum income payments. Cash flows on these contracts are reported in operat ing activities. As of December 31, 2017 an d 2016 , there were three reinsurers for GMIB as follows: (In millions) Line of Business Reinsurer December 31, 2017 December 31, 2016 Collateral and Other Terms at December 31, 2017 GMIB Berkshire $ 359 $ 370 100% were secured by assets in a trust. Sun Life Assurance Company of Canada 221 227 Liberty Re (Bermuda) Ltd. 197 202 100% were secured by assets in a trust. Total GMIB recoverables reported in other assets $ 777 $ 799 Assumptions used in fair value measurement. GMIB assets and liabilities are established using capital market assumptions (including market returns, interest rates and market volatilities of the underlying equity and bond mutual fund investments) and assumptions related to future annuitant behavior (including mortality, lapse, and annuity election rates). As assumptions related to future annuitant behavior are largely unobservable , the Company classifies GMIB assets and liabilities in Level 3 in the fair value hierarchy presented in Note 10. The only assumption expected to impact future shareholders’ net income is non-performance risk. The non-performance risk adjustment reflects a market participant’s view of nonpayment risk by adding an additional spread to the discount rate in the calculation of both (a) the GMIB liabilities to be paid by the Company, and (b) the GMIB assets to be paid by the reinsurers, after considering collateral. The Company regularly evaluates each of the assumptions used in establishing these assets and liabilities. Significant decreases in assumed lapse rates or spreads used to calculate non-performance risk of the Company, or significant increases in assumed annuity election rates or spreads used to cal culate the non-performance risk of the reinsurers, would result in higher fair value measurements. A change in one of these assumptions is not necessarily accompanied by a change in another assumption. GMIB guarantees. Future payments are not fixed and determinable under the terms of these contracts. Accordingly, the Company calculated exposure, without considering any reinsurance coverage, using the following hypothetical assumptions: no annuitants surrendered their accounts; all annuitants lived to elect their benefit; all annuitants elected to receive their benefit on the next available date (2018 through 2022 ); and all underlying mutual fund investment values remained at the December 31, 2017 value of $ 822 million with no future returns. The Company has reinsurance coverage in place that covers the exposures on these contracts. Using these hypothetical assumptions, GMIB exposure is $ 573 million , which is lower than the recorded l iability for GMIB calculated using fair value assumptions. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | N ote 10 – Fair Value Measurements The Company carries certain financial instruments at fair value in the financial statements including fixed maturities, equity securities, short-term investments and derivatives. Other financial instruments are measured at fair value only under certain co nditions, such as when impaired. Fair value is defined as the price at which an asset could be exchanged in an orderly transaction between market participants at the balance sheet date. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a market participant, not the amount that would be paid to settle t he liability with the creditor. The Company’s financial assets and liabilities carried at fair value have been classified based upon a hierarchy defined by GA AP. The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest ranking to fair values determined using methodologies and models with unob servable inputs (Level 3). An asset’s or a liability’s classification is based on the lowest level of input that is significant to its measurement. For example, a financial asset or liability carried at fair value would be classified in Level 3 if unobse rvable inputs were significant to the instrument’s fair value, even though the measurement may be derived using inputs that are both observable (Levels 1 and 2) and unobservable (Level 3). The Company estimates fair values using prices from third parties or internal pricing methods. Fair value estimates received from third-party pricing services are based on reported trade activity and quoted market prices when available, and other market information that a market participant may use to estimate fair valu e. The internal pricing methods are performed by the Company’s investment professionals and generally involve using discounted cash flow analyses, incorporating current market inputs for similar financial instruments with comparable terms and credit quali ty, as well as other qualitative factors. In instances where there is little or no market activity for the same or similar instruments, fair value is estimated using methods, models and assumptions that the Company believes a hypothetical market participa nt would use to determine a current transaction price. These valuation techniques involve some level of estimation and judgment that becomes significant with increasingly complex instruments or pricing models. The Company is responsible for determining f air value, as well as for assigning the appropriate level within the fair value hierarchy, based on the significance of unobservable inputs. The Company reviews methodologies, processes and controls of third-party pricing services and compares prices on a test basis to those obtained from other external pricing sources or internal estimates. The Company performs ongoing analyses of both prices received from third-party pricing services and those developed internally to determine that they represent approp riate estimates of fair value. The controls executed by the Company include evaluating changes in prices and monitoring for potentially stale valuations. The Company also performs sample testing of sales values to confirm the accuracy of prior fair value estimates. The minimal e xceptions identified during these processes indicate that adjustments to prices are infrequent and do not significantly impact valuations. Annually, we conduct an on-site visit of the most significant pricing service to review th eir processes, methodologies and controls. This on-site review includes a walk-through of inputs for a sample of securities held across various asset types to validate the documented pricing process. Financial Assets and Financial Liabilities Carried at Fair Value The following table provides information as of December 31, 2017 and 2016 about the Company’s financial assets and liabilities carried at fair value. Separate account assets that are also recorded at fair value on the Company’s Consolidated Balance Sheets are reported separately in the Separate Accounts section as gains and losses related to these assets ge nerally a ccrue directly to policyholders. As of December 31, (In millions) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total 2017 2016 2017 2016 2017 2016 2017 2016 Financial assets at fair value Fixed maturities Federal government and agency $ 253 $ 374 $ 526 $ 503 $ - $ - $ 779 $ 877 State and local government - - 1,287 1,435 - - 1,287 1,435 Foreign government - - 2,442 2,066 45 47 2,487 2,113 Corporate - - 17,658 15,552 430 498 18,088 16,050 Mortgage and other asset-backed - - 343 329 154 157 497 486 Total fixed maturities 253 374 22,256 19,885 629 702 23,138 20,961 Equity securities 412 396 73 113 103 74 588 583 Subtotal 665 770 22,329 19,998 732 776 23,726 21,544 Short-term investments - - 199 691 - - 199 691 GMIB assets - - - - 777 799 777 799 Other derivative assets - - 2 10 - - 2 10 Total financial assets at fair value, excluding separate accounts $ 665 $ 770 $ 22,530 $ 20,699 $ 1,509 $ 1,575 $ 24,704 $ 23,044 Financial liabilities at fair value GMIB liabilities $ - $ - $ - $ - $ 762 $ 780 $ 762 $ 780 Other derivative liabilities - - 25 5 - - 25 5 Total financial liabilities at fair value, excluding separate accounts $ - $ - $ 25 $ 5 $ 762 $ 780 $ 787 $ 785 Level 1 Financial Assets Inputs for instruments classified in Level 1 include unadjusted quoted prices for identical assets in active markets accessible at the measurement date. Active markets provide pricing data for trades occurring at least weekly and include exchanges and dealer markets. Assets in Level 1 include actively-traded U.S. government bonds and exchange-listed equity securities. Given the narrow definition of Level 1 and the Company's investment asset strategy to maximize investment ret urns, a relatively small portion of the Company’s investment assets are classified in this category. Level 2 Financial Assets and Financial Liabilities Inputs for instruments classified in Level 2 include quoted prices for similar assets or liabilities i n active markets, quoted prices from those willing to trade in markets that are not active, or other inputs that are market observable or can be corroborated by market data for the term of the instrument. Such other inputs include market interest rates an d volatilities, spreads and yield curves. An instrument is classified in Level 2 if the Company determines that unobservable inputs are insignificant. Fixed maturities and equity securities. Approximately 94 % of the Company’s investments in fixed maturities and equity securities are classified in Level 2 including most public and private corporate debt and equity securities, federal agency and municipal bonds, non-government mortgage-backed securities and preferred stocks. Because many fixed maturities do not trade daily, third-party pricing services and internal methods often use recent trades of securities with similar features and characteristics. When recent trades are not available, pricing models are used to determine these prices. Th ese models calculate fair values by discounting future cash flows at estimated market interest rates. Such market rates are derived by calculating the appropriate spreads over comparable U.S. Treasury securities, based on the credit quality, industry and structure of the asset. Typical inputs and assumptions to pricing models include, but are not limited to, a combination of benchmark yields, reported trades, issuer spreads, liquidity, benchmark securities, bids, offers, reference data, and industry and e conomic events. For mortgage-backed securities, inputs and assumptions may also include characteristics of the issuer, collateral attributes, prepayment speeds and credit rating. Nearly all of these instruments are valued using recent trades or pricing models. Less than 1 % of the fair value of investments classified in Level 2 represents foreign bonds that are valued using a single unadjusted market-observable input derived by averaging multiple broker-dealer quotes, consistent with local market pra ctice. Short-term investments are carried at fair value which approximates cost. On a regular basis, the Company compares market prices for these securities to recorded amounts to validate that current carrying amounts approximate exit prices. The short- term nature of the investments and corroboration of the reported amounts over the holding period support their classification in Level 2. Other derivatives classified in Level 2 represent over-the-counter instruments such as interest rate and foreign currency swap contracts. Fair values for these instruments are determined using market observable inputs including forward currency and interest rate curves and widely published market observable indices. Credit risk related to the counterparty and the C ompany is considered when estimating the fair values of these derivatives. However, the Company is largely protected by collateral arrangements with counterparties and determined that no adjustment for credit risk was required as of December 31, 2017 or 2016 . Level 2 also includes exchange-traded interest rate swap contracts. Credit risk related to the clearinghouse counterparty and the Company is considered minimal when estimating the fair values of these derivatives because of upfront margin deposits and d aily settlement requirements. The nature and use of these other derivatives are described in Note 12 . Level 3 Financial Assets and Financial Liabilities Certain inputs for instruments classified in Level 3 are unobservable (supported by little or no market activity) and significant to their resulting fair value measurement. Unobservable inputs reflect the Company’s best estimate of what hypothetical market participants would use to determine a transaction price for the asset or liability at the reporting date. The Company classifies certain newly issued, privately-placed, complex or illiquid securities, as well as assets and liabilities relating to GMIB, in Level 3. Approximately 3 % of fixed maturities and equity securities are priced using significant unobservable inputs and classified in this category. Fair values of mortgage and other asset-backed securities, corporate and government fixed maturities are primarily determined using pricing models that incorporate the specific characteristics of each asset and related assumptions including the investment type and structure, credit quality, industry and maturity date in comparison to current market indices, spreads and liquidity of assets with similar characteristics. For mortgage and other asset- backed securities, inputs and assumptions for pricing may also in clude collateral attributes and prepayment speeds. Recent trades in the subject security or similar securities are assessed when available, and the Company may also review published research in its evaluation, as well as the issuer’s financial statements. Quantitative Information about Unobservable Inputs The following table summarizes the fair value and significant unobservable inputs used in pricing the following securities that were developed directly by the Company as of December 31, 2017 and 2016 . The range and weighted average basis point amounts (“bps”) for fixed maturity spreads (adjustme nt to discount rates) and price-to- earnings multiples for equity investments reflect the Company’s best estimates of the unobservable adjustments a market participa nt would make to calculate the se fair values. Mortgage and other asset-backed securities. The significant unobservable inputs used to value the following mortgage and other asset-backed securities are liquidity and weighting of credit spreads. When th ere is limited trading activity for the security, an adjustment for liquidity is made as of the measurement date that considers current market conditions, issuer circumstances and complexity of the security structure. An adjustment to weight credit spread s is needed to value a more complex bond structure with multiple underlying collateral and no standard market valuation technique. The weighting of credit spreads is primarily based on the underlying collateral’s characteristics and their proportional cas h flows supporting the bond obligations. Corporate and government fixed maturities . The significant unobservable input used to value the following corporate and government fixed maturities is an adjustment for liquidity. When there is limited trading activity for the security, an adjustment is needed to reflect current market conditions and issuer circumstances. Private equity securities. The significant unobservable input used to value the following private equity securities is a multiple of earning s before interest, taxes, depreciation and amortization (“EBITDA”). These securities are comprised of private equity investments with limited trading activity and therefore a ratio of EBITDA is used to estimate value based on company circumstances and rel ative risk characteristics. Hybrid equity securities. The significant unobservable input used to value the following hybrid equity securities is an adjustment for liquidity due to limited trading activity. These cumulative preferred shares are deemed likely to exercise certain call options and the Company estimates an adjustment used to discount cash flows based on current market conditions and issuer circumstances. As of December 31, Fair Value Unobservable Input Unobservable Adjustment Range (Weighted Average) (Fair value in millions ) 2017 2016 2017 2016 Fixed maturities Mortgage and other asset-backed securities $ 154 $ 157 Liquidity 60 - 370 (90) bps 60 - 330 (90) bps Weighting of credit spreads 180 - 290 (230) bps 160 - 470 (230) bps Corporate and government fixed maturities 446 490 Liquidity 70 - 1,650 (300) bps 80 - 1,300 (340) bps Total fixed maturities 600 647 Equity securities Private equity securities 70 74 Price-to-EBITDA multiples 5.0 - 12.0 (8.9) 4.2 - 11.6 (8.5) Hybrid equity securities 33 - Liquidity 270 - 270 (270) bps Total equity securities 103 74 Subtotal 703 721 Securities not priced by the Company (1) 29 55 Total Level 3 securities $ 732 $ 776 (1) The fair values for these securities use single, unadjusted non-binding broker quotes not developed directly by the Company. Significant increases in liquidity or credit spreads would result in lower fair value measurement s while decreases in these inputs would result in higher fair value measurement s . Significant decreases in equity price - to -EBITDA multiples would result in lower fair value measurement s while increases in these inputs would result in higher fair value measurement s . Generally, the unobservable inputs are not interrelated and a change in the assumption used for one unobservable input is not accompanied by a change i n the other unobservable input. G MIB contracts. See dis cussion in Note 9 . Changes in Level 3 Financial Assets and Financial Liabilities Carried at Fair Valu e The following table summarize s the changes in financial assets and financial liabilities classified in Level 3 for the years ended December 31, 2017 and 2016 . Separate account asset changes are reported in the Separate Accounts section as the changes in fair values of these assets generally accrue directly to the policyholders. G ains and losses reported in this table may include net changes in fair v alue that are attributable to both observable and unobservable inputs. (In millions) Fixed Maturities & Equity Securities GMIB Assets GMIB Liabilities 2017 2016 2017 2016 2017 2016 Balance at January 1, $ 776 $ 726 $ 799 $ 907 $ (780) $ (885) Gains (losses) included in shareholders' net income GMIB fair value gain/(loss) - - 31 (47) (31) 47 Other 25 (18) 1 - (5) (3) Total gains (losses) included in shareholders' net income 25 (18) 32 (47) (36) 44 Losses included in other comprehensive income (11) (1) - - - - Gains required to adjust future policy benefits for settlement annuities (1) 7 29 - - - - Purchases, sales, settlements Purchases 133 96 - - - - Sales (95) (140) - - - - Settlements (74) (74) (54) (61) 54 61 Total purchases, sales and settlements (36) (118) (54) (61) 54 61 Transfers into/(out of) Level 3 Transfers into Level 3 275 338 - - - - Transfers out of Level 3 (304) (180) - - - - Total transfers into/(out of) Level 3 (29) 158 - - - - Balance at December 31, $ 732 $ 776 $ 777 $ 799 $ (762) $ (780) Total gains (losses) included in shareholders' net income attributable to instruments held at the reporting date $ (9) $ (18) $ 32 $ (47) $ (36) $ 44 (1) Amounts do not accrue to shareholders. As noted in the preceding tables, total gains and losses included in shareholders’ net income are reflected in the following captions in the Consolidated Statements of Income: Realized investment gains (losses) and net investment income for amounts related to fixed maturities and equity securities and realized investment gains (losses) for the impact of changes in non-performance risk related to GMIB assets and liabilities, similar to hedge ineffectiveness; and Other operating expenses for amounts re lated to GMIB assets and liabilities (GMIB fair value gain/loss), except for the impact of changes in non-performance risk. In the tables above, gains and losses included in other comprehensive income are reflected in net unrealized appreciation (deprecia tion) on securities in the Consolidated Statements of Comprehensive Income. Reclassifications impacting Level 3 financial instruments are reported as transfers into or out of the Level 3 category as of the beginning of the quarter in which the transfer oc curs. Therefore gains and losses in income only reflect activity for the period the instrument was classified in Level 3. Transfers into or out of the Level 3 category occur when unobservable inputs, such as the Company’s best estimate of what a market participant would use to determine a current transaction price, become more or less significant to the fair value measurement. During 2017 and 2016 , transfers between Level 2 and Level 3 primarily reflect ed changes in liquidity and credit risk est imates for certain private placement issuers across several sectors including metals, mining, energy, utilities, capital goods, consumer products and transportation services. Separate A ccount s Accounting policy. Separate account assets and liabilities are contractholder funds maintained in accounts with specific investment objectives. The assets of these accounts are legally segregated and are not subject to claims that arise out of any of the Company’s other businesses. These separate account assets are carried at fair value with equal amounts recorded for related separate account liabilities. The investment income and fair value gains and losses of these accounts gene rally accrue directly to the contractholders and, together with their deposits and withdrawals, are excluded from the Company’s Consolidated Statements of Income and Cash Flows. Fees and charges earned for mortality risks, asset management or administrati ve services are reported in either premiums or fees and other revenues. I nvestments that are measured using the practical expedient of Net Asset V alue (“ NAV ”) are excluded from the fair value hierarchy. At December 31, fair values of separate account ass ets were as follows: (In millions) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total 2017 2016 2017 2016 2017 2016 2017 2016 Guaranteed separate accounts (See Note 21) $ 215 $ 238 $ 308 $ 262 $ - $ - $ 523 $ 500 Non-guaranteed separate accounts (1) 1,536 1,368 5,298 4,885 292 331 7,126 6,584 Subtotal $ 1,751 $ 1,606 $ 5,606 $ 5,147 $ 292 $ 331 7,649 7,084 Non-guaranteed separate accounts priced at NAV as a practical expedient (1) 774 856 Total separate account assets $ 8,423 $ 7,940 (1) Non-guaranteed separate accounts included $3.9 billion as of December 31, 2017 and $3.7 billion as of December 31, 2016 in assets supporting the Company's pension plans, including $0.3 billion classified in Level 3 for both periods and $0.8 billion as of December 31, 2017 and $0.9 billion as of December 31, 2016 priced at NAV as a practical expedient for each year. Separate account assets in Level 1 primarily include exchange-listed equity securities. Level 2 assets primarily include: corporate and structured bonds valued using recent trades of similar securities or pricing models that discount future cash flows at estimated market interest rates as described above; and actively-traded institutional and retail mutual fund investments . Separate account assets classified in Level 3 primarily support Cigna’s pension plans, and include certain newly issued, privately-placed, complex, or illiquid securities that are priced using methods discussed above, as well as commercial mortgage loans that are valued according to the methodologies discussed below. The following tables summarize the changes in separate account assets reported in Level 3 for the year s ended December 31, 2017 and 2016 . (In millions) 2017 2016 Balance at January 1 $ 331 $ 297 Policyholder gains (losses) 34 2 Purchases, issuances, settlements Purchases 33 22 Sales (53) (11) Settlements (13) (18) Total purchases, sales and settlements (33) (7) Transfers into/(out of) Level 3 Transfers into Level 3 7 65 Transfers out of Level 3 (47) (26) Total transfers into/(out of) Level 3: (40) 39 Balance at December 31 $ 292 $ 331 Separate account investments in securities partnerships, real estate, and hedge funds are generally valued based on the separate account’s ownership share of the equity of the investee (NAV as a practical expedient), including changes in the fair values of its underlying investments. Substantially all of these assets support the Cigna Pension Plans. The following table provides additional information on these investments. Unfunded Data as of December 31, 2017 and 2016 Commitments Redemption Frequency Fair Value as of as of (if currently Redemption Notice (In millions) December 31, 2017 December 31, 2016 December 31, 2017 eligible) Period Securities partnerships $ 458 $ 424 $ 365 Not applicable Not applicable Real estate funds 239 231 - Quarterly 45-90 days Hedge funds 77 201 - Up to annually, varying by fund 30-90 days Total $ 774 $ 856 $ 365 Assets and Liabilities Measured at Fair Value under Certain Conditions Some financial assets and liabilities are not carried at fair value each reporting period, but may be measured using fair value only under certain conditions, such as investments in real estate, partnership entities and commercial mortgage loans when they become impaired. Impaired values for these asset types classified as Level 3 representing less than 1 % of total investments, were written down to their fair values, res ulting in immaterial realized investment losses in 2017 and 2016 . Fair Value Disclosures for Financial Instruments Not Carried at Fair Value The following table includes the Company’s financial instruments not recorded at fair value that are subject to fai r value disclosure requirements at December 31, 2017 and 2016 . In addition to universal life products and capital leases, f inancial instruments that are carried in the Company’s C onsolidated F inancial S tatements at amounts that approximate fair value are excluded from the following table. (In millions) December 31, 2017 December 31, 2016 Classification in Fair Value Hierarchy Fair Value Carrying Value Fair Value Carrying Value Commercial mortgage loans Level 3 $ 1,766 $ 1,761 $ 1,682 $ 1,666 Contractholder deposit funds, excluding universal life products Level 3 $ 1,121 $ 1,119 $ 1,215 $ 1,212 Long-term debt, including current maturities, excluding capital leases Level 2 $ 5,730 $ 5,321 $ 5,460 $ 4,991 The fair values for all financial instruments presented in the table above have been estimated using market information when available. The following valuation methodologies and inputs are used by the Company to determine fair value. Commercial mortgage loans . The Company estimates the fair value of commercial mortgage loans generally by discounting the contractual cash flows at estimated market interest rates that reflect the Company’s assessment of the credit quality of the loans. Market inte rest rates are derived by calculating the appropriate spread over comparable U.S. Treasury rates based on the property type, quality rating and average life of the loan. The quality ratings reflect the relative risk of the loan co nsidering debt service co verage, the loan -to- value ratio and other factors . Fair values of impaired mortgage loans are based on the estimated fair value of the underlying collateral generally determined using an internal discounted cash flow model. The fair value measurements we re classified in Level 3 because the cash flow models incorporate significant unobservable inputs. Contractholder deposit funds, excluding universal life products . Generally, these funds do not have stated maturities. Approximately 70 % of the se balances can be withdrawn by the customer at any time without prior notice or penalty. The fair value for these contracts is the amount estimated to be payable to the customer as of the reporting date, which is generally the carrying value. Most of th e remaining contractholder deposit funds are reinsured by the buyers of the individual life and annuity and retirement benefits businesses. The fair value for these contracts is determined using the fair value of these buyers’ assets supporting these rein sured contracts. The Company had reinsurance recoverable s equal to the carrying value of these reinsured contracts . These instruments were classified in Level 3 because certain inputs are unobservable (supported by little or no market activity) and significant to their resulting fair value measurement. Long-term debt, including current maturities, excluding capital leases . The fair value of long-term debt is based on quoted market prices for recent trades . W hen quoted market prices are not avail able, fair value is estimated using a discounted cash flow analysis and the Company’s estimated current borrowing rate for debt of si milar terms and remaining maturities. These measurements were classified in Level 2 because the fair values are based on q uoted market prices or other inputs that are market observable or can be corroborated by market data . Fair values of off-balance sheet financial instruments were not material as of December 31, 2017 and 2016 . |
Investments
Investments | 12 Months Ended |
Dec. 31, 2017 | |
Investments: | |
Investments | Note 11 – Investments , Investment Income and Gains and Losses Cigna's investment portfolio consists of a broad range of investments including fixed maturities and equity securities, commercial mortgage loans, other long-term investments and short- term investments. The sections below provide more detail regarding our accounting policies, investment balances, net investment income and realized investment gains and losses. See Note 10 for information about the valuation of the Company’s investment portfolio. Investment Portfolio Fixed Maturities and Equity Securities Accounting policy. Fixed maturities (including bonds, mortgage and other asset-backed securities and preferred stocks redeemable by the investor) and most equity securities are classified as available for sale and are carried at fair value with changes in fair value recorded in accumulated other comprehensive income (loss) within shareholders’ equity. Net unrealized appreciation on investments supporting the Company’s run-off settlement annuity business is reported in future policy benefit liabilities rather than accumulated other comprehensive income (loss). Equity securities include hybrid investments consisting of preferred stock with call features that are carried at fair value with changes in fair value reported in other realized investment gains (losses) and dividends reported in net investment income. As of December 31, 2017 , fair values of these securities were $ 49 million and amortized cost was $ 61 million. As of December 31, 2016 , fair values of these securities were $ 36 million and amort ized cost was $ 49 million. The Company records impairment losses in net income for fixed maturities with fair value below amortized cost that meet either of the following conditions: If the Company intends to sell or determines that it is m ore likely than not to be required to sell these fixed maturities before the ir fair values recover , an impairment loss is recognized for the excess of the amortized cost over fair value. If the net present value of projected future cash flows of a fixed maturity (based on qualitative and quantitative factors, including the probability of default, and the estimated timing and amount of recovery) is below the amortized cost basis, that diffe rence is recognized as an impairment loss. For mortgage and asset-backed securities, estimated future cash flows are also based on assumptions about the collateral attributes including prepayment speeds, default rates and changes in value. The amortize d cost and fair value by contractual maturity periods for fixed maturities were as follows at December 31, 2017 : Amortized Fair (In millions) Cost Value Due in one year or less $ 1,511 $ 1,522 Due after one year through five years 6,655 6,848 Due after five years through ten years 9,377 9,599 Due after ten years 3,855 4,672 Mortgage and other asset-backed securities 469 497 Total $ 21,867 $ 23,138 Actual maturities of these securities could differ from their contractual maturities used in the table above. This could occur because issuers may have the right to call or prepay obligations, with or without penalties. Gross unrealized appreciation (depreciation) on fixed maturities by type of issuer is shown below . Amortized Unrealized Unrealized Fair (In millions) Cost Appreciation Depreciation Value December 31, 2017 Federal government and agency $ 541 $ 239 $ (1) $ 779 State and local government 1,196 93 (2) 1,287 Foreign government 2,360 142 (15) 2,487 Corporate 17,301 868 (81) 18,088 Mortgage and other asset-backed 469 29 (1) 497 Total $ 21,867 $ 1,371 $ (100) $ 23,138 Investments supporting liabilities of the Company's run-off settlement annuity business (included in above total) (1) $ 2,200 $ 681 $ (2) $ 2,879 December 31, 2016 Federal government and agency $ 658 $ 223 $ (4) $ 877 State and local government 1,342 99 (6) 1,435 Foreign government 1,998 129 (14) 2,113 Corporate 15,483 716 (149) 16,050 Mortgage and other asset-backed 461 29 (4) 486 Total $ 19,942 $ 1,196 $ (177) $ 20,961 Investments supporting liabilities of the Company's run-off settlement annuity business (included in above total) (1) $ 2,196 $ 539 $ (15) $ 2,720 (1) Net unrealized appreciation for these investments is excluded from accumulated other comprehensive income. As of December 31, 2017 , the Company had commitments to purchase $ 118 million of fixed maturities, all of which bear interest at a fixed market rate. Review of declines in fair value. Management reviews fixed maturities with a decline in fair value from cost for impairment based on criteria that include: length of time and severity of decline; financial health and specific near term prospects of the issuer; changes in the regulatory, economic or general market environment of the issuer’s industry or geographic region; and the Company’s intent to sell or the likelihood of a required sale prior to recovery. Based on this review, management believ es the unrealized depreciation below to be temporary, and therefore has not impaired these amounts. The table below summarizes fixed maturities with a decline in fair value from amortized cost by the length of time these securities have bee n in an unrealized loss position. December 31, 2017 December 31, 2016 Fair Amortized Unrealized Number Fair Amortized Unrealized Number (Dollars in millions) Value Cost Depreciation of Issues Value Cost Depreciation of Issues One year or less Investment grade $ 3,272 $ 3,309 $ (37) 797 $ 4,346 $ 4,475 $ (129) 992 Below investment grade $ 543 $ 553 $ (10) 643 $ 724 $ 736 $ (12) 591 More than one year Investment grade $ 1,503 $ 1,549 $ (46) 373 $ 308 $ 327 $ (19) 53 Below investment grade $ 155 $ 162 $ (7) 42 $ 186 $ 203 $ (17) 28 There were no available for sale equity securities with a significant unreali zed loss reflected in accumulated other comprehensive income at December 31, 2017 . Commercial Mortgage Loans Mortgage loans held by the Company are made exclusively to commercial borrowers and are diversified by property type, location and borrower. Loans are generally issued at a fixed rate of interest and are secured by high quality, primarily completed and substantially leased operating properties. Accounting policy. Commercial mortgage loans are carried at unpaid principal balances or, if impaired, the lower of unpaid principal or fair value of the underlying real estate. See the “Impaired commercial mortgage loans” section below for the Company’s accounting policy for impaired commercial mortgage loans . At December 31, commercial mortgage loans were distributed among the following property types and geographic regions: (In millions) 2017 2016 Property type Office buildings $ 652 $ 592 Apartment buildings 608 428 Industrial 197 302 Hotels 141 205 Retail facilities 135 139 Other 28 - Total $ 1,761 $ 1,666 U.S. geographic region Pacific $ 841 $ 714 South Atlantic 210 268 New England 238 227 Central 237 239 Middle Atlantic 203 186 Mountain 32 32 Total $ 1,761 $ 1,666 As of December 31, 2017 , approximately 86% of the Company’s commercial mortgage loan portfolio is scheduled to mature in 2022 or thereafter. Actual maturities could differ from contractual maturities for several reasons: borrowers may have the right to prepay obligations with or without prepayment penalties; the maturity date may be extended; and loans may be refinanced. As of December 31, 2017 , the Company had commitments to extend credit under commercial mortgage loan agreements of $ 21 million . Credit quality . The Company regularly evaluates and monitors credit risk, beginning with the initial underwriting of a mortgage loan an d continuing throughout the investment holding period. Mortgage origination professionals employ an internal credit quality rating system designed to evaluate the relative risk of the transaction at origination that is then updated each year as part of th e annual portfolio loan review. The Company evaluates and monitors credit quality on a consistent and ongoing basis, classifying each loan as a loan in good standing, potential problem loan or problem loan. Quality ratings are based on our evaluation of a number of key inputs related to the loan, including real estate market-related factors such as rental rates and vacancies, and property-specific inputs such as growth rate assumptions and lease rollover statistics. However, the two most significant cont ributors to the credit quality rating are the debt service coverage and loan-to-value ratios. The debt service coverage ratio measures the amount of property cash flow available to meet annual interest and principal payments on debt, with a ratio below 1. 0 indicating that there is not enough cash flow to cover the required loan payments. The loan-to-value ratio, commonly expressed as a percentage, compares the amount of the loan to the fair value of the underlying property collateralizing the loan. The f ollowing table summarizes the credit risk profile of the Company’s commercial mortgage loan portfolio based on loan-to-value and debt service coverage ratios, as of December 31, 2017 and 2016 : (Dollars in millions) 2017 2016 Loan-to-Value Ratio Carrying Value Average Debt Service Coverage Ratio Average Loan-to-Value Ratio Carrying Value Average Debt Service Coverage Ratio Average Loan-to-Value Ratio Below 60% $ 1,109 2.03 $ 943 2.06 60% to 79% 652 2.24 702 1.89 80% to 100% - - 21 - Total $ 1,761 2.11 57% $ 1,666 1.95 57% The Company’s annual in-depth review of its commercial mortgage loan investments is the primary mechanism for identifying emerging risks in the portfolio. The most recent review was completed by the Company’s investment professionals in the second quarter of 201 7 and included an analysis of each underlying property’s most recent annual financial statements, rent rolls, operating plans, budgets, a physical inspection of the property and other pertinent factors. Based on historical results, current l eases, lease expirations and rental conditions in each market, the Company estimates the current year and future stabilized property income and fair value for each loan. The Company will reevaluate a loan’s credit quality between annual reviews if new pro perty information is received or an event such as delinquency or a borrower’s request for restructure causes management to believe that the Company’s estimate of financial performance, fair value or the risk profile of the underlying property has been impa cted. Impaired commercial mortgage loans. A commercial mortgage loan is considered impaired when it is probable that the Company will not collect all amounts due according to the terms of the original loan agreement. These loans are included in either p roblem or potential problem loans. The Company monitors credit risk and assesses the impairment of loans individually and on a consistent basis for all loans in the portfolio. Impaired loans are carried at the lower of unpaid principal balance or the fai r value of the underlying real estate. The Company estimates the fair value of the underlying real estate using internal valuations generally based on discounted cash flow analyses. Certain commercial mortgage loans without valuation reserves are consider ed impaired because the Company will not collect all interest due according to the terms of the original agreements; however, the Company expects to recover the unpaid principal because it is less than the fair value of the underlying real estate. Because of the risk profile of the underlying investment, the Company recognizes interest income on impaired mortgage loans only when payment is actually received. As of December 31, 2017 and 2016 , i mpaired commercial mortgage loans and valuation reserves associated with impaired loans were not material . For the years ended December 31, 2017 and 2016 , the average recorded investment in impaired loans and interest income on impaired loans were not material. Other Long- T erm Investments Accounting policy. Other long-term investments include investments in unconsolidated entities. These entities include certain limited partnerships and limited liability companies holding real estate, securities or loans. These investments are carried at cost plus the Company’s ownership percentage of reported income or loss in cases where the Company has significant influence; otherwise the investment is carried at cost. Income from certain entities is reported on a one q uarter lag depending on when their financial information is received. Other long-term investments are considered impaired, and written down to their fair value, when cash flows indicate that the carrying value may not be recoverable. Fair value is genera lly determined based on a discounted cash flow analysis. Other long-term investments also include investment real estate carried at depreciated cost less any impairment write downs to fair value when cash flows indicate that the carrying value may not be recoverable. Depreciation is generally recorded using the straight-line method based on the estimated useful life of each asset. Investment real estate as of December 31, 2017 and 2016 is expected to be held longer than one year and includes real estate acq uired through the foreclosure of commercial mortgage loans. Additionally, other long-term investments include interest rate and foreign currency swaps carried at fair value . See Note 12 for information on the Company’s accounting policies for these derivative financial instruments. Other long-term investments and related commitments are diversified by issuer, property type and geographic regions. The following table provides unfunded commitment and fair value information on these investment s. The Company expects to disburse approximately 31% of the committed amounts in 2018. Unfunded Fair value as of December 31, Commitments as of (In millions) 2017 2016 December 31, 2017 Real estate investments $ 591 $ 738 $ 270 Securities partnerships 863 650 876 Other 64 74 32 Total $ 1,518 $ 1,462 $ 1,178 Short-Term Investments and Cash Equivalents Accounting policy. Security investments with maturities of greater than three months to one year from time of purchase are classified as short-term, available for sale and carried at fair value that approximates cost. Cash equivalents consist of short-term investments with maturities of three months or less from the time of purchase and are carried at cost that approximates fair value. Short-term investments and cash equivalents included the following types of issuers: December 31, December 31, (In millions) 2017 2016 Corporate securities $ 1,143 $ 2,234 Federal government securities $ 604 $ 378 Foreign government securities $ 159 $ 94 Money market funds $ 12 $ 11 Concentration of Risk As of December 31, 2017 and 2016 , the Company did not have a concentration of investments in a single issuer or borrower exceeding 10% of shareholders’ equity . Net Investment Income Accounting policy. When interest and principal payments on investments are current, the Company recognizes interest income when it is earned. The Company recognizes interest income on a cash basis when interest payments are delinquent based on contractual terms or when certain terms (interest rate or maturity date) of the investment have been restructured . The components of pre-tax net investment income for the years ended December 31 were as follows: (In millions) 2017 2016 2015 Fixed maturities $ 946 $ 899 $ 879 Equity securities 14 4 3 Commercial mortgage loans 81 91 112 Policy loans 69 72 72 Other long-term investments 124 98 116 Short-term investments and cash 42 26 14 Total investment income 1,276 1,190 1,196 Less investment expenses 50 43 43 Net investment income $ 1,226 $ 1,147 $ 1,153 Net investment income for separate accounts (1) $ 225 $ 236 $ 262 (1) Net investment income for these investments is excluded from the Company's revenues. Real estate investments and securities partnerships with a carrying value of $ 191 million at December 31, 2017 and $ 220 million at December 31, 2016 were non-income producing during the preceding twelve months. Realized Investment Gains And L osses Accounting policy. Realized investment gains and losses are based on specifically identified assets and result from sales, investment asset write-downs, changes in the fair values of certain derivatives and changes in valuation reserves on commercial mortgage loans. The following realized gains and losses on investments for the years ended December 31 exclude amounts required to adjust future policy benefits for the run-off settlement annuity business. (In millions) 2017 2016 2015 Fixed maturities $ 25 $ 23 $ (82) Equity securities 52 (1) 36 Commercial mortgage loans (1) 4 (2) Other investments, including derivatives 161 143 105 Net realized investment gains, before income taxes 237 169 57 Less income taxes 81 60 17 Net realized investment gains $ 156 $ 109 $ 40 Included in the realized investment gains and losses in the above table were pre-tax asset write-downs on debt securities and other asset write-downs of $ 31 million for the year ended December 31, 2017 , $ 58 million for the year ended December 31, 2016 and $ 140 million for the year ended December 31, 2015 . Realized investment gains in other investments, including derivatives, represent primarily gains on sale of real estate properties held in joint ventures. Realized investment gain s that are excluded from the Company’s revenues for the years ended December 31 were as follows: (In millions) 2017 2016 2015 Separate accounts $ 157 $ 16 $ 117 Investment gains required to adjust future policy benefits for the run-off settlement annuity business $ 20 $ 63 $ 114 The following table presents s ales information for available-for-sale fixed maturities and equity securities for the years ended December 31. Gross gains on sales and gross losses on sales exclude amounts required to adjust future policy benefits for the run-off settlement annuity business. (In millions) 2017 2016 2015 Proceeds from sales $ 2,012 $ 1,544 $ 1,555 Gross gains on sales $ 103 $ 83 $ 85 Gross losses on sales $ (18) $ (7) $ (13) |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Note 12 – Derivative Financial Instruments The Company uses derivative financial instruments to manage the characteristics of investment assets (such as duration, yield, currency and liquidity) to meet the varying demands of the related insurance and contractholder liabilities (such as paying claims, investment returns and withdrawals) and to hedge interest rate risk of its long-term debt. The C ompany has written and purchased GMIB reinsurance contracts in its run-off reinsurance business that are accounted for as freestanding derivatives and further discussed in Note 9 . Derivatives in the Company’s separate accounts are excluded from the following discussion because associated gains and losses generally accrue directly to separate account policyholders. Accounting p olicy. The Company applies hedge accounting when derivatives are designated, qualified and highly effective as hedges. Effe ctiveness is formally assessed and documented at inception and each period throughout the life of a hedge using various quantitative methods appropriate for each hedge, including regression analysis and dollar offset. Under hedge accounting, the changes i n fair value of the derivative and the hedged risk are generally recognized together and offset each other when reported in shareholders’ net income. Changes in the fair value of a derivative instrument may not always equal changes in the fair value of th e hedged item. This is referred to as “hedge ineffectiveness” and is generally recorded in realized investment gains and losses. In the event of an early hedge termination, the changes in fair value of derivatives that qualified for hedge accounting are reported in shareholders’ net income, generally as a part of realized investment gains and losses. Derivative cash flows are generally reported in operating activities. The following tables provide information on the Company’s specific applications of d erivative financial instruments during the years ended December 31 Fair Value Hedge of Long-Term Corporate Debt Notional Value (in millions) Type of instrument. Interest rate swap contracts 2017 2016 $ 750 $ 750 Purpose. To convert a portion of the interest rate exposure on the Company's long-term debt from fixed to variable rates. This more closely aligns the Company's interest expense with the interest income received on its cash equivalent and short-term investment balances. The variable rates are benchmarked to LIBOR. Terms of derivative instruments. The Company provides upfront margin and settles fair value changes and net interest between variable and fixed rates daily with a central clearinghouse. Accounting. Using fair value hedge accounting, the fair values of the swap contracts are reported in other assets, including other intangibles, or accounts payable, accrued expenses, and other liabilities. The critical terms of these swaps match those of the long-term debt being hedged. As a result, the carrying value of the hedged debt is adjusted to reflect changes in its fair value driven by LIBOR. The effects of those adjustments on other operating expenses are offset by the effects of corresponding changes in the swaps' fair value. The net impact from the hedge reported in other operating expenses reflects interest expense on the hedged debt at the variable interest rate. Fair Value Hedges of Fixed Maturity Bonds Notional Value (in millions) Type of instrument. Foreign currency swap contracts 2017 2016 $ 318 $ 78 Purpose. To hedge the foreign exchange related changes in fair values of the Company's fixed maturity bonds. Terms of derivative instruments. The Company periodically exchanges cash flows between two currencies for both principal and interest. Foreign currency swaps are Euros and British pounds and have terms for up to twelve years. Accounting. Using fair value hedge accounting, fair values are reported in other long-term investments or accounts payable, accrued expenses, and other liabilities. Changes in fair values of the swap contracts, as well as changes in the fair values of the hedged bonds attributable to the hedged risk, are reported in other realized investment gains and losses. Economic Hedges of a Fixed Maturity Bond Portfolio Notional Value (in millions) Type of instrument. Foreign currency forward contracts 2017 2016 $ 255 $ 149 Purpose. To hedge the foreign exchange related changes in fair values of a U.S. dollar-denominated fixed maturity bond portfolio to reflect the local currency for one of the Company's foreign subsidiaries. Terms of derivative instruments. The Company agrees to purchase South Korean won in exchange for U.S. dollars at a future date, generally within three months from the contracts' trade dates. Accounting. As these arrangements were not designated as accounting hedges, fair values are reported in short-term investments or accounts payable, accrued expenses, and other liabilities, and changes in fair values are reported in other realized investment gains and losses. As of and for the years ended December 31, 2017 and 2016 , the effects of these derivative instruments on the Consolidated Financial Statements were not material , including the amounts of gains or losses reclassified from accumulated other comprehensive income into shareholders’ net income . No material amounts were excluded from the assessment of hedge effectiveness and no significant gains or losses were recognized due to hedge ineffectiveness. Collateral and termination features . The Company routinely monitors exposure to credit risk associated with derivatives and diversifies the portfolio among approved dealers of high credit quality to minimize this risk. As of December 31, 2017 , the Company had $ 9 million in cash on deposit representing the upfront margin required for the Company’s centrally-cleared derivative instruments. Certain of the Company’s over-the-counter derivative instruments contain provisions requiring either the Com pany or the counterparty to post collateral or demand immediate payment depending on the amount of the net liability position and predefined financial strength or credit rating thresholds. Collateral posting requirements vary by counterparty. The net ass et or liability positions of these derivatives were not material as of December 31, 2017 or 2016 . |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Dec. 31, 2017 | |
Variable Interest Entities [Abstract] | |
Variable interest entities | Note 13 – Variable Interest Entities When the Company becomes involved with a variable interest entity, as well as when the re is a change in the Company’s involvement with an entity, the Company must determine if it is the primary beneficiary and must consolidate the entity. The Company would be considered the primary beneficiary if it has the power to direct the entity’s most significant economic activities or has the right to receive benefits or obligation to absorb losses that could be s ignificant to the entity. The Company evaluates the following criteria : the structure and purpose of the entity; the risks and rewards created by and shared through the entity; and the Company’s ability to direct its activities, receive its benefits and absorb its losses relative to the other parties involved with the entity including its sponsors, equity holders, guarantors, creditors and servicers. As of December 31, 2017 and 2016 , the Company determined it was not a primary beneficiary in any material var iable interest entities. The Company’s involvement in variable interest entities where it is not the primary beneficiary is described below. Securities limited partnerships and real estate limited partnerships . The Company owns interests in securities l imited partnerships and real estate limited partnerships that are defined as variable interest entities . These partnerships invest in the equity or mezzanine debt of privately held companies and real estate properties. General partners unaffiliated with the Company control decisions that most significantly impact the partnership’s operations and the limited partners do not have substantive kick-out or participating rights. The Company’s maximum exposure to these entities of $ 2.4 b illion across approximately 116 li mited partnerships as of December 31, 2017 includes $ 1.2 b illion reported in other long-term investments and commitments to contribute an additional $ 1.2 b illion. The Company’s non-controlling interest in each of these limited partnerships is generally less than 10 % of the partnership ownership interests . Other asset-backed and corporate securities. In the normal course of its investing activities, the Company also m akes passive investments in certain asset-backed and corporate securities that are issued by variable interest entities whose sponsors or issuers are unaffiliated with the Company . Th e Company receives fixed-rate cash flows from these investments and the maximum potential exposure to loss is limited to the carrying amount of $ 0.6 b illion as of December 31, 2017 that is reported in fixed maturities. The Company’s combined ownership interests are insignificant relative to the total principal amount s issued by these entities. The Company is also involved in real estate joint ventures, independent physician associat ion s (“IPAs”) and a joint venture in India that are variable interest entities . The carrying values and maximum exposures associated with these arrangements are immaterial. The Company has not provided, and does not intend to provide, financial support to any of the above entities that it is not contractually required to provide. The Company performs ongoing qualitative analyses of its involvement with these variable interest entities to determine if consolidation is required. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Note 14 – Accumulated Other Comprehensive Income ( Loss ) (“AOCI”) AOCI includes the Company’s share from entities accounted for using the equity method. AOCI excludes amounts required to adjust future policy benefits for the run-off settlement annuity business and a portion of deferred acquisition costs associated with the corporate-owned life insurance business. Changes in the components of accumulated other comprehensive income (loss) were as follows: (in millions) 2017 2016 2015 Securities Beginning balance $ 362 $ 418 $ 620 Appreciation (depreciation) on securities 35 (48) (389) Tax (expense) benefit (19) 6 157 Net appreciation (depreciation) on securities 16 (42) (232) Reclassification adjustment for (gains) losses included in shareholders' net income (net realized investment gains) (77) (22) 46 Tax benefit (expense) 27 8 (16) Net (gains) losses reclassified from AOCI to net income (50) (14) 30 Other comprehensive (loss), net of tax (34) (56) (202) Ending balance $ 328 $ 362 $ 418 Derivatives Beginning balance $ 3 $ 7 $ (8) (Depreciation) appreciation on derivatives (1) - 10 Tax (expense) - - (3) Net (depreciation) appreciation on derivatives (1) - 7 Reclassification adjustment for losses included in shareholders' net income (other operating expenses) 1 1 12 Reclassification adjustment for (gains) included in shareholders' net income (net realized investment gains) (4) (7) - Tax benefit (expense) 1 2 (4) Net (gains) losses reclassified from AOCI to net income (2) (4) 8 Other comprehensive (loss) income , net of tax (3) (4) 15 Ending balance $ - $ 3 $ 7 Translation of foreign currencies Beginning balance $ (369) $ (274) $ (62) Translation of foreign currencies 309 (95) (224) Tax (expense) benefit (5) - 12 Net translation of foreign currencies 304 (95) (212) Ending balance $ (65) $ (369) $ (274) Postretirement benefits liability Beginning balance $ (1,378) $ (1,401) $ (1,486) Reclassification adjustment for amortization of net losses from past experience and prior service costs (other operating expenses) 64 64 68 Reclassification adjustment for settlement (other operating expenses) 7 - - Tax (expense) benefit (24) (22) (23) Net adjustments reclassified from AOCI to net income 47 42 45 Valuation update (22) (29) 63 Tax benefit (expense) 8 10 (23) Net change due to valuation update (14) (19) 40 Other comprehensive income (loss), net of tax 33 23 85 Ending balance $ (1,345) $ (1,378) $ (1,401) |
Pension and Other Postretiremen
Pension and Other Postretirement Benefit Plans | 12 Months Ended |
Dec. 31, 2017 | |
Pension and Other Postretirement Benefit Plans [Abstract] | |
Pension and Other Postretirement Benefit Plans | Note 15 – Pension and Other Postretirement Benefit Plans About our Plans Pension plans . The Company’s principal qualified defined benefit pension plans, the Cigna Pension Plan and the Cigna Pension Plan for Certain Former Employees, cover approximately 22,200 retirees, 14,500 vested former employees and 14,000 active employees. Current retirees, certain vested former employees and longer-service active employees are entitled to an annuity benefit based on pay and length of service. Most pension-eligible active employees and certain vested former employees are entitled to a cash balance defined benefit. The Cigna Supplemental Pension Plan, a non-qualified and unfunded plan, covers only certain employees. We froz e future benefit accruals for all of these domestic pension plans in 2009. Additionally the Company has foreign pension and other postretirement benefit plans that are immaterial to our results of operations, liquidity and financial position. As furthe r discussed in Note 21 , Cigna Corporation and the Cigna Pension Plan are defendants in a class action lawsuit related to the Plan’s conversion of certain employees from an annuity to a cash balance benefit in 1997. When the required plan amendment re lated to this litigation is adopted, the pension benefit obligation will be updated to reflect benefits resulting from this litigation. Other postretirement benefit plans. The Company’s postretirement benefit medical plan covers approximately 18,400 retirees and 18,600 active employees. Post-1988 retirees contribute to the cost of this coverage, whereas pre-1989 retirees do not. For post-1988 retirees, the Company’s cost is capped at 200% of the per capita cost in 2000. Pharmacy cover age for Medicare-eligible retirees is delivered using an Employer Group Waiver Plan. Under that plan, the Company receives subsidies from CMS. The postretirement medical plan is unfunded and future benefit accruals were frozen in 2013. The Company also offers certain postretirement life insurance benefits through various plans. Retirees do not contribute to the cost of life insurance benefits. Accounting policy. The Company measures the assets and liabilities of its domestic pension and other postre tirement benefit plans as of December 31. Benefit obligations are measured at the present value of estimated future payments based on actuarial assumptions. The Company uses the “corridor” method to account for changes in the benefit obligation when actu al results differ from those assumed, or when assumptions change. These changes are called net unrecognized actuarial gains (losses). Under the corridor method, net unrecognized actuarial gains (losses) are initially recorded in accumulated other compreh ensive income. When the unrecognized gain (loss) exceeds 10% of the benefit obligation, that excess is amortized to other operating expense over the expected remaining lives of plan participants. For balance sheet purposes, we measure plan assets at fai r value. When the actual return differs from the expected return, those differences are reflected in the net unrealized actuarial gain (loss) discussed above. However, to measure pension benefit costs, we use a “market-related” asset valuation that diffe rs from the actual fair value for domestic pension plan assets invested in non-fixed income investments. The “market-related” value recognizes the difference between actual and expected long-term returns in the portfolio over five years, a method that red uces the short-term impact of market fluctuations on pension costs. At December 31, 2017 , the market-related asset value was approximately $ 4.1 billion compared with a fair value of approximately $ 4.3 billion. Funded Status and Amounts Included in Accumulated Other Comprehensive Income The following table summarizes the projected benefit obligations and assets related to our domestic and international pension and other postretirement benefit plans as of, and for the years ended, Decemb er 31: Pension Other Postretirement Benefits Benefits (In millions) 2017 2016 2017 2016 Change in benefit obligation Benefit obligation, January 1 $ 4,888 $ 4,934 $ 277 $ 295 Service cost 3 2 - - Interest cost 186 199 9 11 Loss from past experience 181 (1) 57 (1) 1 2 Benefits paid from plan assets (277) (284) (3) (3) Benefits paid — other (12) (20) (26) (28) Benefit obligation, December 31 4,969 4,888 258 277 Change in plan assets Fair value of plan assets, January 1 3,977 3,981 5 8 Actual return on plan assets 418 279 - - Benefits paid (277) (284) (3) (3) Contributions 163 1 - - Fair value of plan assets, December 31 4,281 3,977 2 5 Funded status $ (688) $ (911) $ (256) $ (272) (1) Loss in each year reflects a decrease in the discount rate, partially offset by a favorable change in the mortality assumption. We fund our qualified pension plans at least at the minimum amount required by the Employee Retirement Income Security Act of 1974 and the Pension Protection Act of 2006. For 2018, we do not expect to make a ny contributions to the qualified pension plans because none are required. Future years’ contributions will ultimately be based on a wide range of factors including but not limited to asset returns, discount rates and funding targets. Non-qualified pension and other postretirement benefit plans are generally funded on a pay-as-you-go basis as there are no plan assets for these plans. Benefit payments. The following benefit payments are expected to be paid in: Pension Other Postretirement (In millions) Benefits Benefits 2018 $ 340 $ 27 2019 $ 334 $ 26 2020 $ 325 $ 25 2021 $ 325 $ 23 2022 $ 324 $ 22 2023-2027 $ 1,573 $ 87 Amounts reflected in the pension and other postretirement benefit liabilities shown above that have not yet been reported in net income and therefore are included in accu mulated other comprehensive los s consisted of the following as of December 31: Pension Other Benefits Postretirement Benefits (In millions) 2017 2016 2017 2016 Unrecognized net (losses) $ (2,113) $ (2,163) $ - $ - Unrecognized prior service cost (6) (6) 46 49 Postretirement benefits liability adjustment $ (2,119) $ (2,169) $ 46 $ 49 We expect to recognize pre-tax losses of $ 69 million in 2018 from amortization of the net actuarial loss in our pension plans and pre-tax gains of $ 3 million in 2018 from amortization of prior service cost in the other postretirement benefit plans. These estimates are based on a weighted average amortization period for the frozen and inactive plans that is based on the average expected remaining life of plan participants of approximately 26 years. Cost of O ur Plans Components of net pension and other postretirement benefits cost for the years ended December 31 were as follows: Pension Benefits Other Postretirement Benefits (In millions) 2017 2016 2015 2017 2016 2015 Service cost $ 3 $ 2 $ 2 $ - $ - $ - Interest cost 186 199 194 9 11 11 Expected long-term return on plan assets (260) (249) (267) - - - Amortization of: Net loss from past experience 66 65 70 1 1 - Prior service cost - 1 - (3) (3) (3) Settlement loss 7 - - - - - Net plan cost $ 2 $ 18 $ (1) $ 7 $ 9 $ 8 Assumptions Used for Pension and O ther Postretirement Benefit Plans Management determined the present value of the projected benefit obligation and the accumulated other postretirement benefit obligation and related benefit costs based on the following weighted average assumptions as of and for the years ended December 31: 2017 2016 Discount rate: Pension benefit obligation 3.51% 3.95% Other postretirement benefit obligation 3.37% 3.70% Pension benefit cost 3.95% 4.17% Other postretirement benefit cost 3.70% 3.89% Expected long-term return on plan assets: Pension benefit cost 7.25% 7.25% Other postretirement benefit cost 5.00% 5.00% Mortality table for pension and postretirement benefit obligations RP 2014 with MP 2017 projection scale RP 2014 with MP 2016 projection scale The Company used the Society of Actuaries mortality table RP2014 and the updated improvement scales published in 2016 and 2017 to value its benefit obligations because the Company’s mortality experience closely matched these tables based on internal stud ies. The updated improvement scales published in 2016 and 2017 both indicated that mortality improvement is expected to be lower than was originally projected when the study was first published in 2014, resulting in decreases to the benefit obligations in both years. The Company set s discount rates by applying actual annualized yields for high quality bonds at various durations to the expected cash flows of the pension and other postretirement benefits liabilities. A discount rate curve is constructed using an array of bonds in various industries throughout the domestic market, but only selects those for the curve that have an above average return at each duration. Management believe s that this curve is representative of the yields that the Company is able to achieve through its plan asset investment strategy. Expected long-term rates of return on plan assets were developed considering actual long-term historical returns, expected long-term market conditions, plan asset mix and management’s investment strategy that continues a significant allocation to domestic and foreign equity securities as well as securities partnerships, real estate and hedge funds. Expected long-term market conditions take into consideration certain key macroeconomic trends inclu ding expected domestic and foreign GDP growth, employment levels and inflation. The estimated rate of future increases in the per capita cost of postretirement health care benefits is 6.50 % in 2018 , decreasing by 0.25 % per year to 4.75 % in 2024 and beyond. The impact of a 1% increase or decrease in the estimated rate would be immaterial to postretirement cost and benefit obligation. Pension Plan Assets As of December 31, 2017 , pension assets included $ 3.9 billion invested in the separate accounts of Connecticut General Life Insurance Company and Life Insurance Company of North America, subsidiaries of the Company, as well as an additional $ 342 million invested directly in funds offered by the buyer of the retirement benefits business. The fair values of pension assets by category are as follows as of December 31, 2017 and 2016 . (In millions) 2017 2016 Fixed maturities: Federal government and agency $ 1 $ 1 Corporate 1,124 1,125 Asset-backed 22 22 Fund investments 884 630 Total fixed maturities 2,031 1,778 Equity securities: Domestic 689 681 International, including funds and pooled separate accounts (1) 476 350 Total equity securities 1,165 1,031 Securities partnerships 457 424 Real estate funds, including pooled separate accounts (1) 300 289 Commercial mortgage loans 140 129 Hedge funds 73 196 Guaranteed deposit account contract 63 67 Cash equivalents and other current assets, net 52 63 Total pension assets at fair value $ 4,281 $ 3,977 (1) A pooled separate account has several participating benefit plans and each owns a share of the total pool of investments. The Company’s current target investment allocation percentages ( 50 % fixed income, 30 % public equity securities and 20 % in other investments, including private equity (securities partnerships), real estate and hedge funds) are developed by management as guidelines, although the fair values of each asset category are expected to vary as a result of c hanges in market conditi ons. The Company would expect to further reduce the allocation to equity securities and other investments and increase the allocation to fixed income investments as funding levels improve. See Note 10 for further details regarding how fair value is det ermined, including the level within the fair value hierarchy and the procedures we use to validate fair value measurements . Within pension plan asset s, t he Company classifies substantially all fixed maturities in Level 2. These assets are valued using recent trades o f similar securities or are fund investments priced using their daily net asset value that is the exit price. Within pension assets, a substantial portion of domestic equity securities are classified as Level 1, while international equity funds are predom inantly classified in Level 2 using daily net asset value. S ecurities partnerships, r eal estate and hedge funds are valued using NAV as a practical expedient and are excluded from the fair value hierarchy. See Note 10 for additional disclosures related t o these assets invested in the separate accounts of the Company’s subsidiaries. Certain securities as described in Note 10, as well as commercial mortgage loans and guaranteed deposit account contracts , are classified in L evel 3 because unobservable input s used in their valuation are significant. 401(k) Plans The Company sponsors a 401(k) plan in which the Company matches a portion of employees’ pre-tax contributions. Participants in the plan may invest in various fund s that inves t in the Company’s common stock , several diversified stock funds, a bond fund or a fixed-income fund. The Company may elect to increase its matching contributions if the Company’s annual performance meets certain targets. The Company’s annual expense for these plans was as follows: (In millions) 2017 2016 2015 Expense $ 122 $ 113 $ 106 |
Employee Incentive Plans
Employee Incentive Plans | 12 Months Ended |
Dec. 31, 2017 | |
Employee Incentive Plans [Abstract] | |
Employee Incentive Plans | Note 16 – Employee Incentive Plans A. About Our Plans The People Resources Committee (“the Committee”) of the Board of Directors awards stock options, restricted stock , deferred stock and strategic performance shares (“SPS”) to certain employees. T he Committee has issued common stock instead of cash compensation . The Company issues shares from Treasury stock for these awards. The Company record s compens ation expense for stock and option awards over their vesting periods pri marily based on the estimated fair value at the grant date. Fair value is determined differently for each type of award as discussed below. Shares of common stock available for award at December 31 were as follows: (In millions) 2017 2016 2015 Common shares available for award 14.0 6.8 8.6 B. Stock Options Accounting policy. The Company awards options to purchase Cigna common stock at the market price of the stock on the grant date. Options vest over periods ranging from one to three years and expire no later than 10 years from grant date. Fair value is estimated using the Black-Scholes option-pricing model by applying the assumptions presented below. That fair value is reduced by options expected to be forfeited during the vesting period. The Company estimates forfeitures at the grant date based on our experience and adjusts the expense to reflect actual forfeitures over the vesting period. The fair value of options, net of forfeitures, is recognized in operating expenses on a str aight line basis over the vesting period. Compensation cost for stock options recorded in operating expenses was as follows for the years ended December 31: (In millions) 2017 2016 2015 Stock options compensation cost $ 52 $ 53 $ 42 Black-Scholes option-pricing model assumptions and the resulting fair value of options are presented in the following table. 2017 2016 2015 Dividend yield 0.0% 0.0% 0.0% Expected volatility 35.0% 35.0% 35.0% Risk-free interest rate 1.8% 1.2% 1.3% Expected option life 4.3 years 4.3 years 4.3 years Weighted average fair value of options $ 46.38 $ 42.01 $ 36.40 The expected volatility reflects the past daily stock price volatility of Cigna stock. The Company does not consider volatility implied in the market prices of traded options to be a good indicator of future volatility because remaining traded options will expire within one year. The risk-free interest rate is derived using the four-year U.S. Treasury bond yield rate as of the award date for the primary annual grant. Expected option life reflects the Company’s historical experience. The following ta ble shows the status of, and changes in, common stock options during the last three years. (Options in thousands) 2017 2016 2015 Weighted Weighted Weighted Average Average Average Options Exercise Price Options Exercise Price Options Exercise Price Outstanding - January 1 7,097 $ 82.01 6,433 $ 68.86 7,331 $ 51.84 Granted 1,230 $ 149.17 1,336 $ 139.20 1,410 $ 120.94 Exercised (2,072) $ 63.41 (577) $ 62.09 (2,146) $ 43.63 Expired or canceled (99) $ 138.41 (95) $ 117.18 (162) $ 86.04 Outstanding - December 31 6,156 $ 100.79 7,097 $ 82.01 6,433 $ 68.86 Options exercisable at year-end 3,894 $ 77.36 4,409 $ 58.36 3,414 $ 46.55 Compensation expense of $ 39 million related to unvested stock options at December 31, 2017 will be recognized over the next two years (weighted average period). The table below summarizes information for stock options exercised during the last three years: (In millions) 2017 2016 2015 Intrinsic value of options exercised $ 218 $ 41 $ 179 Cash received for options exercised $ 131 $ 36 $ 94 Tax benefit from options exercised $ 41 $ 11 $ 42 The following table summarizes information for outstanding common stock options at December 31, 2017 : Options Options Outstanding Exercisable Number (in thousands) 6,156 3,894 Total intrinsic value (in millions) $ 630 $ 490 Weighted average exercise price $ 100.79 $ 77.36 Weighted average remaining contractual life 6.6 5.5 C. R estricted Stock The Company awards restricted stock to the Company’s employees with vesting periods ranging from three to five years. Recipients of restricted stock awards accumulate dividends during the vesting period, but forfeit their awards and accumulated dividends if their employment ter minates before the vesting date. Accounting policy. Fair value of restricted stock awards is equal to the market price of Cigna’s common stock on the date of grant. This fair value is reduced by awards that are expected to forfeit. At the grant date, the Company estimates forfeitures based on experience and adjusts the expense to reflect actual forfeitures over the vesting period. This fair value, net of forfeitures, is recognized in other opera ting expenses over the vesting period on a straight line basis. Compensation cost for restricted stock awards was as follows for the years ended December 31: (In millions) 2017 2016 2015 Restricted stock compensation cost $ 53 $ 40 $ 33 The following table shows the status of, and changes in, restricted stock awards during the last three years. (Awards in thousands) 2017 2016 2015 Weighted Average Fair Value at Award Date Weighted Average Fair Value at Award Date Weighted Average Fair Value at Award Date Grants/Units Grants/Units Grants/Units Outstanding - January 1 1,309 $ 97.78 1,642 $ 72.58 2,121 $ 53.59 Awarded 451 $ 155.21 315 $ 138.61 352 $ 121.93 Vested (409) $ 67.09 (591) $ 50.01 (736) $ 41.99 Forfeited (56) $ 121.74 (57) $ 92.51 (95) $ 68.31 Outstanding - December 31 1,295 $ 126.44 1,309 $ 97.78 1,642 $ 72.58 T he fair value of vested restricted stock at the vesting date for the years ended December 31 was as follows : (In millions) 2017 2016 2015 Fair value of vested restricted stock $ 62 $ 82 $ 92 At the end of 2017 , approximately 4,800 employees held 1.3 million restricted stock awards with $ 68 million of related compensation expense to be recognized over the next two years (weighted average period). D. St rategic Performance Shares (“SPS”) The Company awards SPSs to executives and certain other key employees generally with a perfor mance period of three years. Half of these shares are subject to a market condition (total shareholder return relative to industry peer companies) and half are subject to a performance condition (cumulative adjusted net income). These targets are set by the Committee. At the end of the performance period, holders of SPSs are awarded shares of Cigna common stock ranging anyw here from 0 to 200% of the original grant of SPSs. Accounting policy. Compensation expense for SPSs is recorded over the performance period. For “market condition” SPSs, fair value is determined at the grant date using a Monte Carlo simulation model a nd not subsequently adjusted regardless of the final outcome. For “performance condition” SPSs, expense is initially accrued based on the most likely outcome, but evaluated for adjustment each period for updates in the expected outcome. At the end of the performance period, expense is adjusted to the actual outcome (number of shares awarded times the share price at the grant date). At the grant date, the Company estimates forfeitures based on experience and adjusts the expense to reflect actual forfeitur es over the vesting period. Compensation expense for SPSs was as follows for the years ended December 31: (In millions) 2017 2016 2015 Strategic performance shares compensation cost $ 40 $ 35 $ 36 The following table shows the status of, and changes in, SPSs during the last three years: 2017 2016 2015 Weighted Weighted Weighted Average Fair Value Average Fair Value Average Fair Value (Awards in thousands) Shares at Award Date Shares at Award Date Shares at Award Date Outstanding - January 1 942 $ 109.14 1,188 $ 81.68 1,547 $ 59.20 Awarded 275 $ 150.06 286 $ 139.05 311 $ 121.78 Vested (386) $ 78.91 (494) $ 60.15 (608) $ 45.51 Forfeited (53) $ 138.19 (38) $ 112.70 (62) $ 76.33 Outstanding - December 31 778 $ 136.57 942 $ 109.14 1,188 $ 81.68 T he fair value of vested SPSs at the vesting date for the years ended December 31 was as follows: 2017 2016 2015 (Shares in thousands; $ in millions) Shares Fair Value Shares Fair Value Shares Fair Value Shares of Cigna common stock distributed upon SPS vesting 476 $ 70 768 $ 109 972 $ 119 At the end of 2017 , approximately 1,500 employees held 778,000 SPSs and $ 38 million of related compensation expense is expected to be recognized over the next two years . For “ performance condition ” SPSs , the amount of expense may vary based on actual performance in 2018 and 2019 . E. One- T ime E mployee S tock Award In 2017, the Company granted most employees a one-time stock award of five sh ares that immediately vested. In connection with this program, approximately 205,000 shares were issued at a price of $162.96, resulting in a pre-tax cost of $33 million . F. Compensation Cost and Tax Effects of Share-based Compensation During the vesting period, the Company records tax benefits in shareholders’ net income based on the amount of expense being recognized . When stock options are exer cised, or when restricted stock and SPSs vest, the difference between tax benefits based on the expense and the actual tax benefit realized are also recorded in net income beginning in 2016 in accordance with ASU 2016-09 . Prior to 2016, such excess tax be nefits were recorded as an adjustment to additional paid-in capital. The table below provides information about the cost and tax benefits related to all of our share-based compensation arrangements discussed above . (In millions) 2017 2016 2015 Total compensation cost for shared-based awards $ 178 $ 128 $ 111 Tax benefits recognized $ 79 $ 57 $ 24 |
Goodwill, Other Intangibles, an
Goodwill, Other Intangibles, and Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill Other Intangibles And Property And Equipment [Abstract] | |
Goodwill, Other Intangibles, and Property and Equipment | Note 17 – Goodwill , O ther Intangibles and Property and Equipment Goodwill Accounting policy. Goodwill represents the excess of the cost of businesses acquired over the fair value of their net assets. The resulting goodwill is assigned to those reporting units expected to realize cash flows from the acquisition, allocated to reporting units based on relative fair values, primarily reported in the Global Health Care segment ($ 5.9 billion) and, to a lesser extent, the Global Supplemental Benefits segment ($ 0.3 billion). The Company evaluates goodwill for impairment at least ann ually during the third quarter at the reporting unit level and writes it down through shareholders’ net income if impaired. Fair value of a reporting unit is generally estimated based on either market data or a discounted cash flow analysis using assumpti ons that the Company believes a hypothetical market participant would use to determine a current transaction price. The significant assumptions and estimates used in determining fair value include the discount rate and future cash flows. A range of disco unt rates is used that corresponds with the reporting unit’s weighted average cost of capital, consistent with that used for investment decisions considering the specific and detailed operating plans and strategies within the reporting unit. Projections o f future cash flows for the reporting unit are consistent with our annual planning process for revenues, claims, operating expenses, taxes, capital levels and long-term growth rates. Goodwill activity. Goodwill activity during 2017 and 2016 was as follows: (In millions) 2017 2016 Balance at January 1, $ 5,980 $ 6,019 Goodwill acquired, net 154 1 Impact of foreign currency translation 30 (40) Balance at December 31, $ 6,164 $ 5,980 Other Intangibles Accounting policy. The Company’s other intangible assets include purchased customer and producer relationships, provider networks and trademarks. The fair value of purchased customer relationships and the amortization method were determined as of the dates of purchase using an income approach that relies on projected future net cash flows including key assumptions for the customer attrition rate and discount rate. The Company amortizes other intangibles on an accelerated or straig ht-line basis over periods from five to 30 years. Management revises amortization periods if it believes there has been a change in the length of time that an intangible asset will continue to have value. Costs incurred to renew or extend the terms of these intangible assets are generally expensed as incurred. Components of other assets, including other intangibles. Other intangible assets were comprised of the following at December 31: Accumulated Net Carrying (In millions) Cost Amortization Value 2017 Customer relationships $ 1,280 $ 1,056 $ 224 Other 291 170 121 Total reported in other assets, including other intangibles 1,571 1,226 345 Value of business acquired (reported in deferred policy acquisition costs) 232 86 146 Total other intangible assets $ 1,803 $ 1,312 $ 491 2016 Customer relationships $ 1,256 $ 965 $ 291 Other 284 151 133 Total reported in other assets, including other intangibles 1,540 1,116 424 Value of business acquired (reported in deferred policy acquisition costs) 232 68 164 Total other intangible assets $ 1,772 $ 1,184 $ 588 Property and E quipment Accounting policy. Property and equipment is carried at cost less accumulated depreciation. When applicable, cost includes interest, real estate taxes and other costs incurred during construction. Also included in this category is internal-use software that is acquired, developed or modified solely to meet the Company’s internal needs, with no plan to market externally. Costs directly related to acquiring, developing or modifying internal-use software are capitalized. The Compa ny calculates depreciation and amortization principally using the straight-line method generally based on the estimated useful life of each asset as follows: buildings and improvements, 10 to 40 years; purchased software, three to five years; internally developed software, three to seven years; and furniture and equipment (including computer equipment), three to 10 years. Improvements to leased facilities are depreciated over the lesser of the remaining lease term or the estimated life of the improvement. The Company considers events and circumstances that would indicate the carrying value of property, equipment or capitalized software might not be recoverable. If the Co mpany determines the carrying value of any of these assets is not recoverable, an impairment charge is recorded. Components of property and equipment. Property and equipment was comprised of the following as of December 31: Accumulated Net Carrying (In millions) Cost Amortization Value 2017 Internal-use software $ 2,991 $ 2,184 $ 807 Other property and equipment Assets recorded under capital leases (1) 49 31 18 Other property and equipment not recorded under capital leases 1,573 835 738 Total other property and equipment 1,622 866 756 Total property and equipment $ 4,613 $ 3,050 $ 1,563 2016 Internal-use software $ 2,766 $ 1,997 $ 769 Other property and equipment Assets recorded under capital leases (1) 87 49 38 Other property and equipment not recorded under capital leases 1,511 782 729 Total other property and equipment 1,598 831 767 Total property and equipment $ 4,364 $ 2,828 $ 1,536 (1) Current capital lease agreements are for equipment and generally have a term of 48 months with the equipment expected to be returned to the lessor at termination. Components of depreciation and amortization. Depreciation and amortization was comprised of the following for the years ended December 31: (In millions) 2017 2016 2015 Internal-use software $ 298 $ 303 $ 288 Other property and equipment (1) 153 158 160 Value of business acquired (reported in deferred policy acquisition costs) 18 20 18 Other intangibles (2) 97 129 119 Total depreciation and amortization $ 566 $ 610 $ 585 (1) Other property and equipment includes amortization on assets recorded under capital leases of $14 million in 2017, $20 million in 2016 and $22 million in 2015. (2) Includes the one-time $23 million bargain purchase gain on an acquisition in 2015. The Company estimates annual pre-tax amortization for intangible assets, including internal-use software, over the next five calendar years to be as follows: (In millions) Pre-tax Amortization 2018 $ 387 2019 $ 299 2020 $ 177 2021 $ 114 2022 $ 88 |
Leases and Rentals
Leases and Rentals | 12 Months Ended |
Dec. 31, 2017 | |
Leases and Rentals [Abstract] | |
Leases and Rentals | Note 18 – Leases and Rentals Description of operating leases. The Company’s operating le ases are primarily for office space and certain computer and other equipment . Some of these leases include renewal options and other incentives that are amortized over the life of the lease . L eases active in 2017 had terms ranging from one month to 18 years . Rental expense and payments. For the years ended December 31, net r ental expenses for operating leases were approximately : (In millions) 2017 2016 2015 Net rental expense for operating leases $ 162 $ 151 $ 165 As of December 31, 2017 , future net minimum rental payments under non-cancelable operating leases were approximately $ 580 million, pa yable as follows: (In millions) Operating Lease Payments 2018 $ 130 2019 $ 113 2020 $ 94 2021 $ 73 2022 $ 58 2023 and thereafter $ 114 The Company also has capital lease arrangements. See Note 17 and Note 5 for further information on assets recorded under capital leases and the related obligations. |
Shareholders Equity and Dividen
Shareholders Equity and Dividend Restrictions | 12 Months Ended |
Dec. 31, 2017 | |
Shareholders Equity And Dividend Restrictions [Abstract] | |
Stockholders' Equity And Dividend Restrictions | Note 19 – Shareholders’ Equity and Dividend Restrictions State insurance departments and foreign jurisdictions that regulate certain of the Company’s subsidiaries prescribe accounting practices (differ ing in some respects from GAAP ) to determine statutory net income and surplus. The Company’s life , accident and health insurance and Health Maintenance Organization (“ HMO ”) subsidiaries are regulated by such statutory requirements . D ue to regulatory changes in the jurisdiction of one of ou r foreign insurance affiliate s , surplus increased significantly in 2017 , primarily due to including deferred policy acquisition costs as an admitted asset. The statutory net income of the Company’ s life, accident and health insurance and HMO subsidiaries for the years ended, and their statutory surplus as of December 31, were as follows: (In billions) 2017 2016 2015 Net income $ 2.5 $ 2.0 $ 2.1 Surplus $ 10.4 $ 8.5 $ 8.0 The Company’s HMO and life, accident and health insurance subsidiaries are also subject to minimum statutory surplus requirements and may be required to maintain investments on deposit with state departments of insurance or other regulatory bodies. Additionally, these subsidiaries may be subject to re gulatory restrictions on the amount of annual dividends or other distributions (such as loans or cash advances) that insurance companies may extend to the parent company without prior approval. As of December 31, 2017 , these amounts, including restricted GAAP net assets of the Company’s subsidiaries , were as follow s: (In billions) 2017 Minimum statutory surplus required by regulators $ 3.2 Investments on deposit with regulatory bodies $ 0.6 Maximum dividend distributions permitted in 2018 without regulatory approval $ 1.6 Maximum loans to the parent company permitted without regulatory approval $ 1.3 Restricted GAAP net assets of Cigna Corporation's subsidiaries $ 12.0 There were no permitted practices for the Company’s insurance subsidiaries that significantly differed from prescribed regulatory accounting practices. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes [Abstract] | |
Income Taxes | Note 20 – Income Taxes U.S. Tax Reform Legislation Major U.S. tax reform legislation was signed into law on December 22, 2017. The legislation is highlighted by a reduction in the corporate income tax rate from the current 35% to 21% effective January 1, 2018. The Company expect s a significant decline in its effective tax rate b eginning in 2018 as a result of the rate reduction . The remaining provisions of the law, most of which take effect on January 1, 2018, are not expected to have a material impact on the Company’s results of operations beginning in 2018. The Company recorded additional tax expense of $ 232 million in 2017 resulting from this legislation, comprised of $ 144 million due to the revaluation of net deferred tax assets to reflect the reduction in the corporate tax rate and $ 88 million due to the ass essment of U.S. taxes related to the Company’s accumulated unremitted foreign earnings. The legislation provides an election to pay these taxes over eight years, and we expect to adopt this election. Both the revaluation of deferred tax assets and liabil ities and the taxes on accumulated unremitted foreign earnings are considered provisional as permitted under SAB 118 (see Note 2) because certain adjustments used to calculate the taxes at year-end were based on estimates. Also as a result of tax reform, the Company r ecorded a reduction in operating expenses of $ 56 million ($ 36 million after-tax) reflecting a decrease in a liability to reimburse a reinsurer for taxes related to a block of business sold through reinsurance . An offsetting tax effect is included in the $ 144 million charge discussed above, resulting in no after-tax effect for this item. Accounting policy. Deferred income tax assets and liabilities are recognized for differences between the financial and income tax reporting bases of the underlying assets and liabilities and established based upon enacted tax rates and laws, including the U.S. tax reform legislation enacted in December 2017. Deferred income tax assets are recogni zed when available evidence indicates that realization is more likely than not. The deferred income tax provision generally represents the net change in deferred income tax assets and liabilities during the year, excluding amounts reported as adjustments to accumulated other comprehensive income or amounts initially recorded due to business combinations. The current income tax provision generally represents estimated amounts due on various income tax returns for the year reported plus the effect of any un certain tax positions. Uncertain tax positions are evaluated in accordance with GAAP. Income taxes for the Company’s foreign operations are provided using the respective foreign jurisdictions’ tax rate. The Company’s foreign operations continue to retai n a significant portion of their earnings overseas. These undistributed earnings are deployed outside of the United States in support of the liquidity and capital needs of our foreign operations as well as to support growth initiatives overseas. The Comp any does not intend to repatriate these earnings. Income Tax Expense The components of income taxes for the years ended December 31 were as follows: (In millions) 2017 2016 2015 Current taxes U.S. income taxes $ 974 $ 935 $ 1,076 Foreign income taxes 122 95 93 State income taxes 36 32 60 Total current taxes 1,132 1,062 1,229 Deferred taxes (benefits) U.S. income taxes 204 69 22 Foreign income taxes (benefits) 39 9 (6) State income taxes (benefits) (1) (4) 5 Total deferred taxes 242 74 21 Total income taxes $ 1,374 $ 1,136 $ 1,250 Total income taxes for the years ended December 31 were different from the amount computed using the nominal federal income tax rate of 35% for the following reasons: (In millions) 2017 2016 2015 Tax expense at nominal rate $ 1,262 $ 1,043 $ 1,164 Effect of U.S. tax reform legislation 232 - - Effect of undistributed foreign earnings (70) (57) (67) Health insurance industry tax - 108 109 State income tax (net of federal income tax benefit) 23 18 42 Other (73) 24 2 Total income taxes $ 1,374 $ 1,136 $ 1,250 Consolidated pre-tax income from t he Company’s foreign operations was approximately 14 % of the Company’s pre-tax income in 2017 . The comparable amount in prior years was 11 % in 2016 and 2015 . South Korean operations produced approximately 13 % of the Company’s pre-tax income in 2017 , 11 % in 2016 and 8 % in 2015 . The consolidated effective tax rate was 38.1 % in both 2017 a nd 2016 . T he additional tax expense associated with the recently enacted U.S. tax reform legislation w as offset by the favorable effects of the one- year moratorium on the non-deductible health insurance industry tax and recognizing an incremental tax benefit associated with transaction -related costs that is included in “Other” in the above table. The Company retains a significant portion of its foreign earnings overseas. If the Company intended to remit these earnings it would have recorded additio nal deferred tax liabilities of approximately $120 million for foreign withholding taxes. A portion of these taxes may be eligible for credit against the Company’s U.S. tax liability. Deferred Income Taxes Deferred income tax assets and liabilities as of December 31 were as follows: (In millions) 2017 2016 Deferred tax assets Employee and retiree benefit plans $ 279 $ 481 Other insurance and contractholder liabilities 352 460 Net operating losses 105 128 Other accrued liabilities 101 166 Other 91 140 Deferred tax assets before valuation allowance 928 1,375 Valuation allowance for deferred tax assets (72) (87) Deferred tax assets, net of valuation allowance 856 1,288 Deferred tax liabilities Depreciation and amortization 496 781 Unrealized appreciation on investments and foreign currency translation 102 149 Other 225 54 Total deferred tax liabilities 823 984 Net deferred income tax assets $ 33 $ 304 Deferred income tax balances as of December 31, 2017 have been adjusted to reflect the reduced statutory tax rate that took effect as of January 1, 2018 pursuant to the recently enacted U.S. tax reform legislation. The Company has recorded incremental tax expense of $ 144 million including the adjustment of deferred tax balances related to items reported in accumulated other comprehensive income. Included in the consolidated net deferred tax asset of $ 33 million is approxi mately $ 175 million of deferred tax liabilities attributable to foreign jurisdictions, most notably South Korea and Taiwan. Management believes that future results will be sufficient to realize the Company’s deferred tax assets. With the exception of certain net operating loss related tax benefits, the Company’s deferred tax benefits may be carried forward indefinitely. Net operating loss benefits are primarily attributable to foreign jurisdictions. The Company establishes a valuation allowance w hen it determines that realization of a deferred tax asset does not meet the more likely than not standard. Valuation allowances have been established against certain federal, foreign and state deferred tax assets, generally when there is a requirement to assess them on a separate entity basis. C. Uncertain Tax Positions A reconciliation of unrecognized tax benefits for the years ended December 31 was as follows: (In millions) 2017 2016 2015 Balance at January 1, $ 31 $ 31 $ 26 Increase due to current year positions 7 10 7 Reduction related to settlements with taxing authorities (1) (2) - Reduction related to lapse of applicable statute of limitations (2) (8) (2) Balance at December 31, $ 35 $ 31 $ 31 D. Other Tax Matters The Internal Revenue Service has completed review of the Company’s consolidated income tax returns through 2012 . The statute of limitations for 2013 has expired , but the Company has filed an amended return for which the pending refund is subject to review . The Company conducts business in a number of state and foreign jurisdictions, and may be engaged in multiple audit proceedings at any given time. Generally, no further state or foreign audit activity is expected for tax years prior to 2 011 . |
Contingencies and Other Matters
Contingencies and Other Matters | 12 Months Ended |
Dec. 31, 2017 | |
Contingencies And Other Matters [Abstract] | |
Contingencies and Other Matters | N ote 21 – Contingencies and Other Matters The Company, through its subsidiaries, is contingently liable for various guarantees provided in the ordinary course of business. Financial Guarantees: Retiree and Life Insurance Benefits The Company guarantees that separate account assets will be sufficient to pay certain life insurance or retiree benefits. The sponsoring employers are primarily responsible for ensuring that assets are sufficient to pay these benefits and are required to maintain ass ets that exceed a certain percentage of benefit obligations. If employers fail to do so, the Company or an affiliate of the buyer of the retirement benefits business (Prudential Retirement Insurance and Annuity Company or “Prudential”) has the right to re direct the management of the related assets to provide for benefit payments. As of December 31, 2017 , employers maintained assets that exceeded the benefit obligations under these arrangements of approximately $ 470 million. A pproximately 12 % of these are reinsured by Prudential . The remaining guarantees are provided by the Company with minimal reinsurance from third parties. The Company establishes an additional liability if management believes that the Company will be required to make payment under the guarantees; t here were no additional liabilities required for th ese guarantees as of December 31, 2017 . Separate account assets supporting these guarantees are classified in Levels 1 and 2 of the GAAP fair value hierarchy (s ee Note 10 ). The Company doe s not expect that these financial guarantees will have a material effect on the Company’s consolidated results of operations, liquidity or financial condition. B. Guaranteed M inimum I ncome B enefit C ontracts See Note 9 for discussion. C. Certain Other Guarantees The Compan y had i ndemnification obligations to a lender of approximately $ 90 million as of December 31, 2017 , related to a borrowing by a certain real estate joint venture that the Company records as an investment . Th is borrowing ( a nonrecourse obligation of the Company ) is secured by the joint venture ’s real estate propert y with a fair value in excess of the loan amount and mature s in 2021. The Company’s indemnification obligation would require payment to the lender for any actual damages resulting from certain acts such as unauthorized ownership transfers, misappropriation of rental payments by others or environmental damages. Based on initial and ongoing reviews of property management and operations, the Company does not expect th at payments will be required under th is indemnification obligation . Any payment that might be required could be recovered through a refinancing or sale of the assets. T he Company also has recourse to the partner for their proportionate share of amounts paid. There were no liabilities required for th is indemnification obligatio n as of December 31, 2017 The Company had indemnification obligations as of December 31, 2017 in connection with acquisition and disposition transactions. These indemnification obligations are triggered by the breach of representations or covenants provided by the Company, such as representations for the presentation of financial statements, the filing of tax returns, compliance with law or the identification of outstanding litigation. These obligations are typically subject to various time limitations, defined by the contr act or by operation of law, such as statutes of limitation. In some cases, the maximum potential amount due is subject to contractual limitations based on a percentage of the transaction purchase price, while in other cases limitations are not specified o r applicable. The Company does not believe that it is possible to determine the maximum potential amount due under these obligations because not all amounts due under these indemnification obligations are subject to limitation. There were no liabilities for these indemnification obligations as of December 31, 2017 . D. Guaranty Fund Assessments The Company operates in a regulatory environment that may require its participation in assessments under state insurance guaranty association laws. The Company’s exposure to assessments for certain obligations of insolvent insurance companies to policyholders and claimants is based on its share of business written in the relevant jurisdictions. On March 1, 2017, the Commonwealth Court of Pennsylvania entered an order of liquidation of Penn Treaty Network America Insuran ce Company, together with its subsidiary American Network Insurance Company (collectively “Penn Treaty”, a long-term care insurance carrier), triggering guaranty fund coverage and accrual of a liability. For the year ended December 31, 2017 , the Company recorded i n operating expenses approximately $ 130 million pre-tax (approximately $ 85 million after-tax), representing its estimate of the total assessments, net of premium tax offsets for insurance contracts currently written. S ome of the assessments were recorded on a discounted basis, using a weighted average discount rate of 3.5 %. As of December 31, 2017 , the recorded liability was approximately $ 55 million and t otal future cash outflows as of December 31, 2017 are expected to approximate $ 65 million. This assessment is expected to be updated in future periods for changes in the estimate of the insolvency. In addition, a portion of this assessment is expected to be offset in the future by premium tax credits that will be recognized in the period received . E. Legal and Reg ulatory Matters The Company is routinely involved in numerous claims, lawsuits, regulatory audits, investigations and other legal matters arising, for the most part, in the ordinary course of managing a global health services business. Except for the specific matters noted below, the Company believes that the legal actions, regulatory matters, proceedings and investigations currently pendin g against it should not have a material adverse effect on the Company’s results of operations, financial condition or liquidity based upon our current knowledge and taking into consideration current accruals. Disputed tax matters arising from audits by th e Internal Revenue Service (“IRS”) or other state and foreign jurisdictions, including those resulting in litigation, are accounted for under GAAP guidance for uncertain tax positions. Further information on income tax matters can be found in Note 20 . Pending litigation and legal or regulatory matters that the Company has identified with a reasonably possible material loss are described below. When litigation and regulatory matters present loss contingencies that are both probable and estimable, the Company accrues the estimated loss by a charge to shareholders’ net income. The estimated loss is the Company’s best estimate of the probable loss at the time or an amount within a range of estimated losses reflecting the most likely outcome or the mi nimum amount of the range (if no amount is better than any other estimated amount in the range.) The Company provides disclosure in the aggregate for material pending litigation and legal or regulatory matters, including accruals, range of loss, or a stat ement that such information cannot be estimated. Due to numerous uncertain factors presented in these cases, it is not possible to estimate an aggregate range of loss (if any) for these matters at this time. In light of the uncertainties involved in thes e matters, there is no assurance that their ultimate resolution will not exceed the amounts currently accrued by the Company. An adverse outcome in one or more of these matters could be material to the Company’s results of operations, financial condition or liquidity for any particular period. The Company had pre-tax reserves as of December 31, 2017 of $ 195 million ($ 155 million after-tax) for the matters discussed below under “Litigation Matters.” Litigation related to the Co mpany’s claim processing practices for a commercial client, for which the Company held a reserve of $ 40 million pre-tax ($ 25 million after-tax) at September 30, 2016, was settled for that amount during the fourth quarter of 20 16. Litigation Matters Amara cash balance pension plan litigation. In December 2001, Janice Amara filed a class action lawsuit in the U.S. District Court for the District of Connecticut against Cigna Corporation and the Cigna Pension Plan (the “Plan”) on behalf of herself and other similarly situated Plan participants affected by the 1998 conversion to a cash balance formula. The plaintiffs allege various violations of the Employee Retirement Income Security Act of 1974 (“ERISA”), including that the Pl an’s cash balance formula discriminates against older employees; that the conversion resulted in a wear-away period (when the pre-conversion accrued benefit exceeded the post-conversion benefit); and that the Plan communications contained inaccurate or ina dequate disclosures about these conditions. In 2008, the District Court (1) affirmed the Company’s right to convert to a cash balance plan prospectively beginning in 1998; (2) found for plaintiffs on the disclosure claim only; and (3) required the Compa ny to pay pre-1998 benefits under the pre-conversion traditional annuity formula and post-1997 benefits under the post-conversion cash balance formula. From 2008 through 2015, this case has undergone a series of court proceedings that resulted in the orig inal District Court order being largely upheld. In 2015, the Company submitted to the District Court its proposed method for calculating the additional pension benefits due to class members and plaintiffs responded in August 2015. In January 2016, the District Court ordered the method of calculating the additional pension benefits due to class members. The court order left several aspects of the calculation of additional plan benefits open to interpretation. From that time through the present, both pa rties have disputed various aspects of the Court’s interpretation and the Court has attempted to clarify. On July 14, 2017, the Court issued a ruling clarifying certain aspects of the January 2016 order. The Plaintiffs filed a motion for reconsideration of the July 14, 2017 ruling that was denied by the Court on November 7, 2017. The Company’s reserve for this litigation is adequate at December 31, 2017, based on calculations consistent with the Company’s interpretation of the latest guidance from the Co urt. Due to the continuing inability of the parties to agree on the details of calculating the pension benefits, the final timing of the resolution of this matter remains uncertain. Once these issues are resolved, the Plan will be amended to comply with the District Court’s orders and the benefits will begin to be paid. Ingenix. In April 2004, the Company was sued in a number of putative nationwide class actions alleging that the Company improperly underpaid claims for out-of-network providers through t he use of data provided by Ingenix, Inc., a subsidiary of one of the Company’s competitors. These actions were consolidated into Franco v. Connecticut General Life Insurance Company, et al. , pending in the U.S. District Court for the District of New Jerse y. The consolidated amended complaint, filed in 2009 on behalf of subscribers, health care providers and various medical associations, asserted claims related to benefits and disclosure under ERISA, the Racketeer Influenced and Corrupt Organizations (“RIC O”) Act, the Sherman Antitrust Act and New Jersey state law and seeks recovery for alleged underpayments from 1998 through the present. Other major health insurers have been the subject of, or have settled, similar litigation. In September 2011, the Dist rict Court (1) dismissed all claims by the health care provider and medical association plaintiffs for lack of standing; and (2) dismissed the antitrust claims, the New Jersey state law claims and the ERISA disclosure claim. In January 2013 and again in A pril 2014, the District Court denied separate motions by the plaintiffs to certify a nationwide class of subscriber plaintiffs. The Third Circuit denied plaintiffs’ request for an immediate appeal of the January 2013 ruling. As a result, the case is proc eeding on behalf of the named plaintiffs only. In June 2014, the District Court granted the Company’s motion for summary judgment to terminate all claims, and denied the plaintiffs’ partial motion for summary judgment. In July 2014, the plaintiffs appeal ed all of the District Court’s decisions in favor of the Company, including the class certification decision, to the Third Circuit. On May 2, 2016, the Third Circuit affirmed the District Court’s decisions denying class certification for the claims assert ed by members, the granting of summary judgment on the individual plaintiffs’ claims, as well as the dismissal of the antitrust claims. However, the Third Circuit also reversed the earlier dismissal of the providers’ ERISA claims. The Company will contin ue to vigorously defend its position. Regulatory Matters Civil Investigative Demand. The U.S. Department of Justice (“DOJ”) is currently conducting an industry review of the risk adjustment data submission practices and business processes, including review of medical charts, of Medicare Advantage organizations under Medicare Parts C and D. In connection with this industry review, in December 2016, the Company received a Civil Investigative Demand from the Civil Division of the DOJ. We are in the pro cess of voluntarily cooperating with the DOJ’s request and responding to the information request. Disability claims regulatory matter. During the second quarter of 2013, the Company finalized an agreement with the Departments of Insurance for Maine, Mass achusetts, Pennsylvania, Connecticut and California (together, the “monitoring states”) related to the Company’s long-term disability claims handling practices. The agreement requires primarily: (1) enhanced procedures related to documentation and dispos ition and (2) a two-year monitoring period followed by a re-examination that began in the second quarter of 2016. Management believes the Company has addressed the requirements of the agreement. If the monitoring states find material non-compliance with the agreement upon re-examination, the Company may be subject to additional costs and penalties or requests to change its business practices that could negatively impact future earnings for this business. Other Legal Matters Litigation with Anthem. In F ebruary 2017, the Company delivered a notice to Anthem terminating the merger agreement, and notifying Anthem that it must pay the Company the $1.85 billion reverse termination fee pursuant to the terms of the merger agreement. Also in February 2017, the Company filed suit against Anthem in the Delaware Court of Chancery (the “Chancery Court”) seeking declaratory judgments that the Company’s termination of the merger agreement was valid and that Anthem was not permitted to extend the termination date. The complaint also sought payment of the reverse termination fee and additional damages in an amount exceeding $13 billion, including the lost premium value to the Company’s shareholders caused by Anthem’s willful breaches of the merger agreement. Also in February 2017, Anthem filed a lawsuit in the Chancery Court against the Company seeking (i) a temporary restraining order to enjoin Cigna from terminating and taking any action contrary to the terms of the merger agreement, (ii) specific performance compel ling Cigna to comply with the merger agreement and (iii) damages. On February 15, 2017, the Chancery Court granted Anthem's motion for a temporary restraining order and temporarily enjoined the Company from terminating the merger agreement. In May 2017 , the Chancery Court denied Anthem's motion for a preliminary injunction to enjoin Cigna from terminating the merger agreement but stayed its ruling pending Anthem's determination as to whether to seek an appeal. Anthem subsequently notified Cigna and the Chancery Court that it did not intend to appeal the Chancery Court's decision. As a result, the merger agreement was terminated. The litigation between the parties remains pending. Trial is scheduled for 2019. We believe in the merits of our claims and dispute Anthem’s claims, and we intend to vigorously defend ourselves and pursue our claims. The outcomes of lawsuits are inherently unpredictable, and we may be unsuccessful in the ongoing litigation or any future claims or litigation. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Information [Abstract] | |
Segment Information [Text Block] | Note 22 – Segment Information See Note 1 for a description of our reporting segments. In the Company’s segment disclosures, we present “operating revenues,” defined as total revenues excluding realized investment results. The Company excludes realized investment results from this measure because its portfolio managers may sell investments based on factors largely unrelated to the underlying business purposes of each segment. As a result, gains or losses created in this process may not be indicative of past or future underlying performance of the business. The Company uses “adjusted income from operations” as its principal financial measure of segment operating performance because management believes it best reflects the underlying results of business operations and permits analysis of trends in underlying revenue, expenses and profitabilit y. Adjusted income from operations is defined as shareholders’ net income excluding after-tax realized investment gains and losses, net amortization of other acquired intangible assets and special items. Income or expense amounts are excluded from adjust ed income from operations for the following reasons: Realized investment results are excluded because, as noted above, our portfolio managers may sell investments based on factors largely unrelated to the underlying business purposes of each segment. N et amortization of other intangible assets is excluded because it relates to costs incurred for acquisitions and, as a result, it does not relate to the core performance of the Company’s business operations. In 2015, the amortization amount was net of a b argain purchase gain on an acquisition. Special items, if any, are excluded because management believes they are not representative of the underlying results of operations. This is generally because the nature and size of these matters are not indicative of our ongoing business operations. Additional details about these items that provide further context as to why they are not considered indicative of ongoing business operations may be found in the footnotes referenced in the table below. The following table presents the special items recorded by the Compa ny for the years ended December 31, 2017 , 2016 and 2015 . (In millions) Description of Special Item and Financial Statement Line Item(s) After-tax Before-tax Year ended December 31, 2017 Charges associated with U.S. tax reform - Other operating expenses (see Note 20 for details) $ (36) $ (56) - Tax expense (see Note 20 for details) 232 - Total charges associated with U.S. tax reform $ 196 $ (56) Debt extinguishment costs (Other operating expenses, see Note 5 for details) $ 209 $ 321 Long-term care guaranty fund assessment (Other operating expenses, see Note 21(D) for details) $ 83 $ 129 Transaction-related costs (Other operating expenses, see Note 3 for details) $ 33 $ 126 Year ended December 31, 2016 Transaction-related costs (Other operating expenses, see Note 3 for details) $ 147 $ 166 Risk corridor allowance (Other operating expenses, see page ##EndofNotesPage in this Note for details) $ 80 $ 124 Charges associated with litigation matters (Other operating expenses, see Note 21(E) for a discussion of litigation charges) $ 25 $ 40 Year ended December 31, 2015 Debt extinguishment costs (Other operating expenses, see Note 5 for details) $ 65 $ 100 Transaction-related costs (Other operating expenses, see Note 3 for details) $ 57 $ 66 Summarized segment financial information for the years ended December 31 , was as follows: (In millions) Global Health Care Global Supplemental Benefits Group Disability and Life Other Operations Corporate Total 2017 Premiums $ 24,538 $ 3,684 $ 3,985 $ 112 $ (12) $ 32,307 Fees and other revenues (1) 4,722 66 106 10 (37) 4,867 Net investment income 378 122 350 346 30 1,226 Mail order pharmacy revenues 2,979 - - - - 2,979 Total operating revenues 32,617 3,872 4,441 468 (19) 41,379 Net realized investment gains (losses) 136 32 74 (5) - 237 Total revenues 32,753 3,904 4,515 463 (19) 41,616 Depreciation and amortization 477 54 30 1 4 566 Total benefits and expenses 29,440 3,407 4,044 316 803 38,010 Income (loss) before income taxes 3,313 497 471 147 (822) 3,606 Income taxes (benefits) and net loss attributable to noncontrolling interests 1,031 195 113 222 (192) 1,369 Shareholders' net income (loss) by segment 2,282 302 358 (75) (630) 2,237 After-tax adjustments to reconcile to adjusted income from operations Net realized investment (gains) losses (88) (24) (49) 4 1 (156) Amortization of other acquired intangible assets, net 48 18 - - - 66 Special items U.S. tax reform (137) 73 (39) 138 161 196 Debt extinguishment costs - - - - 209 209 Long-term care guaranty fund assessment 68 - 15 - - 83 Transaction-related costs - - - - 33 33 Adjusted income (loss) from operations $ 2,173 $ 369 $ 285 $ 67 $ (226) $ 2,668 (In millions) Global Health Care Global Supplemental Benefits Group Disability and Life Other Operations Corporate Total 2016 Premiums $ 23,295 $ 3,226 $ 4,002 $ 103 $ - $ 30,626 Fees and other revenues (1) 4,623 49 98 11 (21) 4,760 Net investment income 315 110 343 358 21 1,147 Mail order pharmacy revenues 2,966 - - - - 2,966 Total operating revenues 31,199 3,385 4,443 472 - 39,499 Net realized investment gains 119 (5) 59 (5) 1 169 Total revenues 31,318 3,380 4,502 467 1 39,668 Depreciation and amortization 526 54 28 1 1 610 Total benefits and expenses 28,467 3,052 4,273 369 528 36,689 Income (loss) before taxes 2,851 328 229 98 (527) 2,979 Income taxes (benefits) and net loss attributable to noncontrolling interests 1,100 60 65 30 (143) 1,112 Shareholders' net income (loss) by segment 1,751 268 164 68 (384) 1,867 After-tax adjustments to reconcile to adjusted income from operations Net realized investment (gains) (78) 6 (39) 2 - (109) Amortization of other acquired intangible assets, net 74 20 - - - 94 Special items Transaction-related costs - - - - 147 147 Risk corridor allowance 80 - - - - 80 Charges associated with litigation matters 25 - - - - 25 Adjusted income (loss) from operations $ 1,852 $ 294 $ 125 $ 70 $ (237) $ 2,104 (1) Includes the Company's share of the earnings of its joint ventures in China and India in the Global Supplemental Benefits segment. (In millions) Global Health Care Global Supplemental Benefits Group Disability and Life Other Operations Corporate Total 2015 Premiums $ 22,696 $ 3,000 $ 3,843 $ 103 $ - $ 29,642 Fees and other revenues (1) 4,357 46 91 13 (19) 4,488 Net investment income 340 103 337 369 4 1,153 Mail order pharmacy revenues 2,536 - - - - 2,536 Total operating revenues 29,929 3,149 4,271 485 (15) 37,819 Net realized investment gains 43 - 5 9 - 57 Total revenues 29,972 3,149 4,276 494 (15) 37,876 Depreciation and amortization 526 31 26 1 1 585 Total benefits and expenses 27,028 2,849 3,796 374 502 34,549 Income (loss) before taxes 2,944 300 480 120 (517) 3,327 Income taxes (benefits) and net income attributable to noncontrolling interests 1,150 33 152 40 (142) 1,233 Shareholders' net income (loss) by segment 1,794 267 328 80 (375) 2,094 After-tax adjustments to reconcile to adjusted income from operations Net realized investment (gains) (30) (1) (4) (5) - (40) Amortization of other acquired intangible assets, net (2) 84 (4) - - - 80 Special items Debt extinguishment costs - - - - 65 65 Transaction-related costs - - - - 57 57 Adjusted income (loss) from operations $ 1,848 $ 262 $ 324 $ 75 $ (253) $ 2,256 (1) Includes the Company's share of the earnings of its joint ventures in China and India in the Global Supplemental Benefits segment. (2) Includes a $23 million bargain purchase gain for a 2015 acquisition. Revenue from external customers includes p remiums , fees and other revenues and mail order pharmacy revenues . The following table presents these revenues by product type for the years ended December 31: (In millions) 2017 2016 2015 Global Health Care premiums by product: Guaranteed cost $ 6,245 $ 4,610 $ 4,761 Experience-rated 2,741 2,383 2,329 Stop loss 3,483 3,082 2,701 International health care 1,934 1,859 1,834 Dental 1,791 1,586 1,392 Medicare 5,534 6,621 6,142 Medicaid 1,061 1,146 1,102 Medicare Part D 764 1,122 1,589 Other 985 886 846 Total premiums 24,538 23,295 22,696 Fees 4,503 4,368 4,107 Total Global Health Care premiums and fees 29,041 27,663 26,803 Disability 2,091 2,045 1,899 Life, Accident and Supplemental Health 5,704 5,300 5,054 Mail order pharmacy 2,979 2,966 2,536 Other 338 378 374 Total $ 40,153 $ 38,352 $ 36,666 Foreign and U.S. revenues from external customers for the three years ended December 31 are shown below. The Company’s foreign revenues are generated by its foreign operating entities. In the periods shown, no foreign country contributed more than 5% of consolidated revenues from external customers. (In millions) 2017 2016 2015 United States $ 36,128 $ 34,672 $ 33,185 South Korea 1,892 1,666 1,521 All other foreign countries 2,133 2,014 1,960 Total $ 40,153 $ 38,352 $ 36,666 The Company had net receivables from CMS of $ 0.5 billion as of December 31, 2017 and $ 0.6 billion as of December 31, 2016 . These amounts were included in premiums, accounts and notes receivable and reinsurance recoverables. As a percentage of consolidated revenues, premiums and fees from CMS were 17 % in 2017 , 20 % in 2016 and 21 % in 2015 . These amounts were reported in the Global Health Care segment. In 2016, the Company recorded an allo wance for the balance of its risk corridor receivable from CMS of $ 124 million based on court decisions and the large risk corridor program deficit. As of December 31, 2017, the Company continues to hold an allowance for the balance of its risk corridor receivable of $ 109 million based on the current status of court decisions. However, the Company continues to believe that the government has a binding obligation to satisfy the risk corridor receivable. |
Quarterly Financial Data
Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data | Quarterly Financial Data (unaudited) The following unaudited quarterly financial data is presented on a consolidated basis for each of the years ended December 31, 2017 and December 31, 2016 . Quarterly financial results necessarily rely heavily on estimates. This and certain other factors, such as the seasonal nature of portions of the insurance business, suggest the need to exercise caution in drawing specific conclusions from q uarterly consolidated results. (In millions, except per share amounts) Three Months Ended March 31, June 30, September 30, December 31, Consolidated Results 2017 Total revenues $ 10,385 $ 10,318 $ 10,382 $ 10,531 Income before income taxes 890 1,134 824 758 Shareholders' net income 598 (1) 813 (1) 560 (1) 266 (1) Shareholders' net income per share 1 Basic 2.34 3.20 2.25 1.09 Diluted 2.30 3.15 2.21 1.07 2016 Total revenues $ 9,884 $ 9,960 $ 9,880 $ 9,944 Income before income taxes 819 813 742 605 Shareholders' net income 519 (1) 510 (1) 456 (1) 382 (1) Shareholders' net income per share 1 Basic 2.04 2.00 1.79 1.49 Diluted 2.00 1.97 1.76 1.47 Stock and dividend data 2017 Price range of common stock — high $ 154.83 $ 173.21 $ 188.36 $ 212.46 — low $ 133.52 $ 146.70 $ 166.81 $ 183.08 Dividends declared per common share $ 0.04 $ - $ - $ - 2016 Price range of common stock — high $ 147.93 $ 142.91 $ 148.99 $ 142.00 — low $ 123.54 $ 121.87 $ 123.53 $ 115.03 Dividends declared per common share $ 0.04 $ - $ - $ - (1) Shareholders' net income includes the following after-tax charges (benefits), described in Note 22 to the Consolidated Financial Statements: March 31, June 30, September 30, December 31, 2017 U.S. tax reform $ - $ - $ - $ 196 2017 Debt extinguishment costs - - 209 - 2017 Long-term care guaranty fund assessment 83 - - - 2017 Transaction-related costs 49 (47) 6 25 Total 2017 charges (benefits) $ 132 $ (47) $ 215 $ 221 2016 Risk corridor allowance $ - $ - $ - $ 80 2016 Transaction-related costs 36 26 46 39 2016 Charges associated with litigation matters - - 25 - Total 2016 charges $ 36 $ 26 $ 71 $ 119 |
Schedule I - Summary of Investm
Schedule I - Summary of Investments | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Investments, Other than Investments in Related Parties [Abstract] | |
Summary of Investments, Other than Investments in Related Parties | CIGNA CORPORATION AND SUBSIDIARIES SCHEDULE I SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES December 31, 2017 Amount at which shown in (in millions) Fair the Consolidated Type of Investment Cost Value Balance Sheet Fixed maturities Bonds United States government and government agencies and authorities $ 541 $ 779 $ 779 States, municipalities and political subdivisions 1,196 1,287 1,287 Foreign governments 2,360 2,487 2,487 Public utilities 2,187 2,342 2,342 All other corporate bonds 15,107 15,739 15,739 Mortgage and other asset-backed 469 497 497 Redeemable preferred stocks 7 7 7 Total fixed maturities 21,867 23,138 23,138 Equity securities Common stocks Industrial, miscellaneous and all other 485 496 496 Non-redeemable preferred stocks 104 92 92 Total equity securities 589 588 588 Commercial mortgage loans on real estate 1,761 1,761 Policy loans 1,415 1,415 Other long-term investments 1,518 1,518 Short-term investments 199 199 Total investments $ 27,349 $ 28,619 |
Schedule II - Condensed Financi
Schedule II - Condensed Financial Information of Registrant | 12 Months Ended |
Dec. 31, 2017 | |
Condensed Financial Information of Cigna Corporation (Registrant) [Abstract] | |
Condensed Financial Information of Cigna Corporation (Registrant) | CIGNA CORPORATION AND SUBSIDIARIES SCHEDULE II CONDENSED FINANCIAL INFORMATION OF CIGNA CORPORATION (REGISTRANT) STATEMENTS OF INCOME For the years ended December 31, (in millions) 2017 2016 2015 Operating expenses Interest $ 237 $ 244 $ 246 Intercompany interest 18 3 2 Debt extinguishment costs 321 - 100 Other 204 281 147 TOTAL OPERATING EXPENSES 780 528 495 Loss before income taxes (780) (528) (495) Income tax benefit (194) (146) (135) Loss of parent company (586) (382) (360) Equity in income of subsidiaries 2,823 2,249 2,454 SHAREHOLDERS' NET INCOME 2,237 1,867 2,094 Shareholders' other comprehensive income (loss) Net unrealized (depreciation) on securities (34) (56) (202) Net unrealized (depreciation) appreciation on derivatives (3) (4) 15 Net translation of foreign currencies 304 (95) (212) Postretirement benefits liability adjustment 33 23 85 Shareholders' other comprehensive income (loss): 300 (132) (314) SHAREHOLDERS' COMPREHENSIVE INCOME $ 2,537 $ 1,735 $ 1,780 See Notes to Financial Statements on the following pages. CIGNA CORPORATION AND SUBSIDIARIES SCHEDULE II CONDENSED FINANCIAL INFORMATION OF CIGNA CORPORATION (REGISTRANT) BALANCE SHEETS As of December 31, (in millions) 2017 2016 Assets Cash and cash equivalents $ 9 $ 18 Short-term investments 63 57 Investments in subsidiaries 22,655 20,315 Intercompany receivable 200 173 Other assets 252 415 TOTAL ASSETS $ 23,179 $ 20,978 Liabilities Intercompany payable $ 2,980 $ 998 Short-term debt 231 257 Long-term debt 5,112 4,658 Other liabilities 1,121 1,342 TOTAL LIABILITIES 9,444 7,255 Shareholders' Equity Common stock (shares issued, 296; authorized, 600) 74 74 Additional paid-in capital 2,940 2,892 Accumulated other comprehensive loss (1,082) (1,382) Retained earnings 15,824 13,855 Less treasury stock, at cost (4,021) (1,716) TOTAL SHAREHOLDERS' EQUITY 13,735 13,723 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 23,179 $ 20,978 See Notes to Financ ial Statements on the following pages . CIGNA CORPORATION AND SUBSIDIARIES SCHEDULE II CONDENSED FINANCIAL INFORMATION OF CIGNA CORPORATION (REGISTRANT) STATEMENTS OF CASH FLOWS For the years ended December 31, (in millions) 2017 2016 2015 Cash Flows from Operating Activities Shareholders' net income $ 2,237 $ 1,867 $ 2,094 Adjustments to reconcile shareholders' net income to net cash provided by operating activities Equity in income of subsidiaries (2,823) (2,249) (2,454) Dividends received from subsidiaries 758 580 880 Other liabilities (224) (9) 112 Debt extinguishment costs 321 - 100 Other, net (1) 333 187 112 NET CASH PROVIDED BY OPERATING ACTIVITIES (1) 602 376 844 Cash Flows from Investing Activities Short-term investment purchased, net (6) (3) (54) Other, net (11) (8) (14) NET CASH (USED IN) INVESTING ACTIVITIES (17) (11) (68) Cash Flows from Financing Activities Net change in amounts due to (from) affiliates 1,955 (78) (161) Net change in short-term debt 100 (100) - Payments for debt extinguishment (313) - (87) Repayment of long-term debt (1,250) - (851) Net proceeds on issuance of long-term debt 1,581 - 894 Issuance of common stock 131 36 154 Common dividends paid (10) (10) (10) Repurchase of common stock (2,725) (139) (671) Tax withholding on stock compensation (1) (61) (72) (79) Other (2) - - NET CASH (USED IN) FINANCING ACTIVITIES (1) (594) (363) (811) Net (decrease) increase in cash and cash equivalents (9) 2 (35) Cash and cash equivalents, beginning of year 18 16 51 Cash and cash equivalents, end of year $ 9 $ 18 $ 16 (1) As required in adopting Accounting Standard Update ("ASU") 2016-09, the Company retrospectively reclassified $79 million cash payments from operating to financing activities in 2015. These payments were related to employee tax obligations associated with stock compensation. The comparable amounts reported in financing activities were $61 million in 2017 and $72 million in 2016. See Notes to Fi nancial Statements on the following pages . CIGNA CORPORATION AND SUBSIDIARIES SCHEDULE II CONDENSED FINANCIAL INFORMATION OF CIGNA CORPORATION (REGISTRANT) NOTES TO CONDENSED FINANCIAL STATEMENTS The accompanying condensed financial statements should be read in conjunction with the Consolidated Financial Statements and the accompanying notes thereto contained in this Annual Report on Form 10-K (“Form 10-K”). Note 1 — For purposes of these condensed financial statements, Cigna Corporation’s (the “Company”) wholly-owned and majority-o wned subsidiaries are recorded using the equity basis of accounting. Note 2 — See Note 5 – Debt included in Part II, Item 8 of this Form 10-K for a description of the short-term and long-term debt obligations of Cigna Corporation and its subsidiaries. Al l debt is a direct obligation of Cigna Corporation, except for $78 million of 6.37% Notes due 2021 and $18 million of capital leases. Note 3 — Intercompany liabilities consist primarily of payables to Cigna Holdings, Inc. of $ 2.8 billion as of December 31, 2017 and $ 0.7 billion as of December 31, 2016 . Interest was accrued at an average monthly rate of 1.47 % for 2017 and 0.93 % for 2016 Note 4 — The Company had guarantees of approximately $235 million as of December 31, 2017 . These guarantees are primarily to secure payment obligations or solvency requirements of certain wholly-owned subsidiaries. In 2017 , no payments have been made on these guarantees. |
Schedule III - Supplementary In
Schedule III - Supplementary Insurance Information | 12 Months Ended |
Dec. 31, 2017 | |
Supplementary Insurance Information [Abstract] | |
Supplementary Insurance Information | CIGNA CORPORATION AND SUBSIDIARIES SCHEDULE III SUPPLEMENTARY INSURANCE INFORMATION Deferred Future policy Medical costs policy benefits and payable and (in millions) acquisition contractholder unpaid Unearned Segment costs deposit funds claims (1) premiums Year Ended December 31, 2017 Global Health Care $ 15 $ 157 $ 2,719 $ 213 Global Supplemental Benefits 2,176 3,746 484 490 Group Disability and Life 1 1,686 4,491 7 Other Operations 45 12,647 193 14 Corporate - - - - Total $ 2,237 $ 18,236 $ 7,887 $ 724 Year Ended December 31, 2016 Global Health Care $ 16 $ 161 $ 2,532 $ 170 Global Supplemental Benefits 1,752 3,225 384 435 Group Disability and Life 1 1,786 4,342 13 Other Operations 49 12,934 191 16 Corporate - - - - Total $ 1,818 $ 18,106 $ 7,449 $ 634 Year Ended December 31, 2015 Global Health Care $ 11 $ 169 $ 2,355 $ 145 Global Supplemental Benefits 1,593 3,006 353 453 Group Disability and Life 1 1,714 4,006 13 Other Operations 54 13,033 215 18 Corporate - - - - Total $ 1,659 $ 17,922 $ 6,929 $ 629 (1) Unpaid claims balances reported in Corporate in 2015 have been retrospectively reclassified to the Group Disability and Life segment to conform to the presentation of unpaid claim balances in Note 8 to the Consolidated Financial Statements. These amounts represent elimination entries. Amortization of deferred Net policy Other investment Benefit acquisition operating Segment Premiums (2) income (3) expenses (2)(4) expenses expenses (5) Year Ended December 31, 2017 Global Health Care $ 24,538 $ 378 $ 19,967 $ 56 $ 9,417 Global Supplemental Benefits 3,684 122 2,033 259 1,115 Group Disability and Life 3,985 350 3,076 1 967 Other Operations 112 346 342 6 (32) Corporate (12) 30 (12) - 815 Total $ 32,307 $ 1,226 $ 25,406 $ 322 $ 12,282 Year Ended December 31, 2016 Global Health Care $ 23,295 $ 315 $ 19,009 $ 47 $ 9,411 Global Supplemental Benefits 3,226 110 1,784 238 1,030 Group Disability and Life 4,002 343 3,354 1 918 Other Operations 103 358 339 6 24 Corporate - 21 - - 528 Total $ 30,626 $ 1,147 $ 24,486 $ 292 $ 11,911 Year Ended December 31, 2015 Global Health Care $ 22,696 $ 340 $ 18,354 $ 53 $ 8,621 Global Supplemental Benefits 3,000 103 1,659 227 963 Group Disability and Life 3,843 337 2,934 1 861 Other Operations 103 369 343 5 26 Corporate - 4 - - 502 Total $ 29,642 $ 1,153 $ 23,290 $ 286 $ 10,973 Amounts presented are shown net of the effects of reinsurance. See Note 9 to the Consolidated Financial Statements included in this Form 10-K. Premiums in the Corporate segment represent the elimination of intercompany transactions. The allocation of net investment income is based upon the identification of certain portfolios with specific segments, the mean reserve method, or a combination of both. Benefit expenses include Global Health Care medical costs and other benefit expenses. Othe r operating expenses includes mail order pharmacy costs, other operating expenses, and net amortization of other intangible assets. It excludes amortization of deferred policy acquisition expenses. In 2017, other operating expenses in the Other Operation s segment includes a reduction of $56 million related to U.S. tax reform. See Note 20 to the Consolidated Financial Statements included in this Form 10-K. |
Schedule IV - Reinsurance
Schedule IV - Reinsurance | 12 Months Ended |
Dec. 31, 2017 | |
Supplemental Schedule of Reinsurance Premiums for Insurance Companies [Abstract] | |
Supplemental Schedule of Reinsurance Premiums for Insurance Companies [Text Block] | CIGNA CORPORATION AND SUBSIDIARIES SCHEDULE IV REINSURANCE Percentage Ceded to Assumed of amount Gross other from other Net assumed (in millions) amount companies companies amount to net Year Ended December 31, 2017 Life insurance in force $ 1,105,323 $ 49,172 $ 2,478 $ 1,058,629 0.2% Premiums Life insurance and annuities $ 2,307 $ 233 $ 22 $ 2,096 1.0% Accident and health insurance 30,095 191 307 30,211 1.0% Total $ 32,402 $ 424 $ 329 $ 32,307 1.0% Year Ended December 31, 2016 Life insurance in force $ 1,047,002 $ 55,399 $ 2,827 $ 994,430 0.3% Premiums Life insurance and annuities $ 2,881 $ 310 $ 22 $ 2,593 0.8% Accident and health insurance 27,874 203 362 28,033 1.3% Total $ 30,755 $ 513 $ 384 $ 30,626 1.3% Year Ended December 31, 2015 Life insurance in force $ 1,047,982 $ 72,208 $ 3,273 $ 979,047 0.3% Premiums Life insurance and annuities $ 2,886 $ 335 $ 106 $ 2,657 4.0% Accident and health insurance 26,926 235 294 26,985 1.1% Total $ 29,812 $ 570 $ 400 $ 29,642 1.3% |
Schedule V - Valuation and Qual
Schedule V - Valuation and Qualifying Accounts and Reserves | 12 Months Ended |
Dec. 31, 2017 | |
Valuation and Qualifying Accounts and Reserves [Abstract] | |
Valuation and Qualifying Accounts and Reserves | CIGNA CORPORATION AND SUBSIDIARIES SCHEDULE V VALUATION AND QUALIFYING ACCOUNTS AND RESERVES Charged Charged Balance at (Credited) to (Credited) Balance at (in millions) beginning costs and to other Other end Description of year expenses (1) accounts deductions (2) of year 2017 Investment asset valuation reserves Commercial mortgage loans $ 5 $ 1 $ - $ (6) $ - Allowance for doubtful accounts Premiums, accounts and notes receivable $ 200 $ 19 $ (11) $ (1) $ 207 Deferred tax asset valuation allowance $ 87 $ 11 $ (26) $ - $ 72 Reinsurance recoverables $ 3 $ - $ - $ - $ 3 2016 Investment asset valuation reserves Commercial mortgage loans $ 15 $ - $ - $ (10) $ 5 Allowance for doubtful accounts Premiums, accounts and notes receivable $ 75 $ 134 $ (8) $ (1) $ 200 Deferred tax asset valuation allowance $ 71 $ 21 $ (5) $ - $ 87 Reinsurance recoverables $ 3 $ - $ - $ - $ 3 2015 Investment asset valuation reserves Commercial mortgage loans $ 12 $ 7 $ - $ (4) $ 15 Allowance for doubtful accounts Premiums, accounts and notes receivable $ 101 $ (10) $ (15) $ (1) $ 75 Deferred tax asset valuation allowance $ 49 $ 8 $ 14 $ - $ 71 Reinsurance recoverables $ 4 $ - $ (1) $ - $ 3 (1) Amounts for 2017 and 2016 include risk corridor allowance. See Note 22 to the Consolidated Financial Statements for additional information. (2) Amounts for commercial mortgage loans primarily reflect charge-offs upon sales and repayments, as well as transfers to foreclosed real estate. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Consolidated F inancial S tatements include th e accounts of C igna Corporation and its subsidiaries . Intercompany transactions and accounts have been eliminated in consolidation. These Consolidated Financial S tatements were prepared in conformity with accounting principles generally accepted in the United States of America ( “ GAAP ”). Amounts recorded in the Consolidated F inancial S tatements necessarily reflect manag ement’s estimates and assumptions about medical costs, investment valuation, interest rates and other factors. Significant estimates are discussed throughout these Notes; however, actual results could differ from those estimates. The impact of a change i n estimate is generally included in earnings in the period of adjustment. Certain reclassifications have been made to prior year amounts to conform to the current presentation. |
Recent Accounting Changes | Accounting Standard and Adoption Date Effects of Adopting New Guidance GUIDANCE ADOPTED IN 2017 Securities and Exchange Commission ("SEC") Staff Accounting Bulletin No. 118 ("SAB 118"), adopted December 31, 2017 Guidance: • Allows a company to recognize the effects of U.S. tax reform as provisional in its 2017 financial statements when it does not have the necessary information in reasonable detail to complete its accounting for the change in tax law. • Establishes a maximum one-year measurement period that ends when a company has obtained the information necessary to finalize its accounting. During the measurement period, adjustments for the effects of the law will be recorded to the extent a reasonable estimate for all or a portion of the effects of the law can be made. Effects of adoption: • The Company has reported reasonable estimates of the income tax effects of U.S. tax reform as provisional in its financial statements. • See Note 20 for disclosures about the impact of U.S. tax reform on the Company's financial statements. Accounting Standard and Effective Date Applicable for Cigna Requirements and Expected Effects of New Guidance Not Yet Adopted GUIDANCE TO BE ADOPTED JANUARY 1, 2018 Revenue from Contracts with Customers (Accounting Standards Update ("ASU") 2014-09 and related amendments) Required as of January 1, 2018 Requires: • Companies to estimate and allocate the expected customer contract revenues among distinct goods or services based on relative standalone selling prices • Revenues to be recognized as goods or services are delivered • New disclosures including presenting relevant categories of revenues and information about related contract assets and liabilities • Adoption through retrospective restatement with or without using certain practical expedients or adoption with a cumulative effect adjustment Expected effects: • Guidance applies to the Company’s administrative service, mail order pharmacy and other non-insurance contracts, but does not apply to certain contracts within the scope of other GAAP, such as the Company's insurance and investment contracts accounted for under the Financial Accounting Standards Board's Accounting Standards Codification ("ASC") 944. • The Company has completed its evaluation of the new requirements and the adoption of the new guidance will not have a material impact to its pattern of revenue recognition or net income. • The Company will adopt the new guidance through retrospective restatement and is currently working to develop required disclosures and restate historical periods in line with its chosen method of adoption. The Company does not anticipate significant changes to its systems, processes or controls. • The Company's cumulative effect of implementing this guidance will result in an immaterial decrease to the opening balance of retained earnings from establishing a contract liability for service fee revenue that must be recognized when services are provided after the termination of certain administrative service contracts. • The Company also will reclassify certain fees as a result of clarifications in the new guidance and its related interpretations. Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01) Required as of January 1, 2018 Requires: • Entities to measure equity investments at fair value in net income if they are neither consolidated nor accounted for under the equity method • Cumulative effect adjustment to the beginning balance of retained earnings at adoption Expected effects: • Certain limited partnership interests carried at cost of approximately $200 million as of December 31, 2017 will be reported at fair value at adoption with future changes in fair value reported in net investment income. • Changes in fair value for equity securities previously reported in accumulated other comprehensive income will now be reported in net realized investment gains. • Retained earnings will increase by approximately $60 million after-tax on January 1, 2018. Accounting Standard and Effective Date Applicable for Cigna Requirements and Expected Effects of New Guidance Not Yet Adopted GUIDANCE TO BE ADOPTED JANUARY 1, 2018 Intra-Entity Asset Transfers of Assets Other than Inventory (ASU 2016-16) Required as of January 1, 2018 Requires: • Entities to recognize the tax impacts of all intra-entity sales of assets other than inventory even though the pre-tax effects of those transactions are eliminated in consolidation • Modified retrospective approach for adoption with a cumulative-effect adjustment recorded in retained earnings Expected effects: the adoption of this standard will not have a material effect on the Company’s financial statements. Clarifying the Definition of a Business (ASU 2017-01) Required as of January 1, 2018 Guidance: • Revises the definition of a business and provides a more robust framework for entities to use in determining when a set of assets and activities is a business. • Requires entities to apply this new definition to business transactions beginning in the first quarter of 2018. Expected effects: the Company does not expect this change in definition will have a material impact on its financial statements. Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (ASU 2017-07) Required as of January 1, 2018 Requires: • Employers to separate the service cost component from the other components of net benefit cost • Only service cost is eligible for capitalization (as either deferred policy acquisition costs or capitalized software), to be applied prospectively upon adoption • Income statement captions used for each component of net benefit cost to be disclosed Expected effects: the Company does not expect the effect of this new guidance to be material to results of operations because its most significant plans are frozen. See Note 15 for additional information. GUIDANCE TO BE EARLY ADOPTED JANUARY 1, 2018 Targeted Improvements to Accounting for Hedging Activities (ASU 2017-12) Required as of January 1, 2019, with early adoption permitted in 2017 Guidance: • Relaxes requirements for financial and nonfinancial hedging strategies to be eligible for hedge accounting and changes how companies assess effectiveness. • Amends presentation and disclosure requirements to improve transparency about the uses and results of hedging programs. Expected effects: the Company is planning to adopt this guidance on January 1, 2018 with an immaterial impact to its financial statements for existing hedges. Accounting Standard and Effective Date Applicable for Cigna Requirements and Expected Effects of New Guidance Not Yet Adopted GUIDANCE TO BE ADOPTED AFTER 2018 OR ADOPTION DATE HAS NOT BEEN DETERMINED Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02) Effective as of January 1, 2019 with early adoption permitted for reporting periods for which financials have not been issued. Guidance: • Allows companies to reclassify tax effects stranded in accumulated other comprehensive income as a result of U.S. tax reform to retained earnings. • Requires additional disclosures of the company's accounting policy for releasing income tax effects from accumulated other comprehensive income. • Allows companies to apply the guidance retrospectively or in the period of adoption. Effects of adoption: • The Company is evaluating this new standard and its expected timing of adoption. • If adopted as of December 31, 2017, approximately $230 million of accumulated other comprehensive income would have been reclassified to retained earnings. Leases (ASU 2016-02) Required as of January 1, 2019 Requires: • Balance sheet recognition of assets and liabilities arising from leases, including leases embedded in other contracts • Additional disclosures of the amount, timing and uncertainty of cash flows from leases will be required • Modified retrospective approach for leases in effect as of and after the date of adoption with a cumulative-effect adjustment recorded in retained earnings Expected effects: • The Company is continuing to evaluate the impact this standard will have on its financial statements. • While not yet quantified, the Company expects a material impact to the Consolidated Balance Sheets from recognizing additional assets and liabilities of operating leases upon adoption. The actual increase in assets and liabilities will depend on the volume and terms of leases in place at the time of adoption. • The Company is implementing a new lease system in connection with the adoption. Measurement of Credit Losses on Financial Instruments (ASU 2016-13) Required as of January 1, 2020, with early adoption permitted as of January 1, 2019 Requires: • A new approach using expected credit losses to estimate and recognize credit losses for certain financial instruments such as mortgage loans, reinsurance recoverables and other receivables • Changes in the criteria for impairment of available-for-sale debt securities • Adoption using a modified retrospective approach with a cumulative-effect adjustment recorded in retained earnings Expected effects: • The Company is evaluating this new standard, its expected timing of adoption and effects on its financial statements and disclosures. • An additional allowance for future expected credit losses for certain financial instruments may be required at adoption. Simplifying the Test for Goodwill Impairment (ASU 2017-04) Required as of January 1, 2020, with early adoption permitted as of January 1, 2017 Guidance: • Simplifies the accounting for goodwill impairment by eliminating the need to determine the fair value of individual assets and liabilities of a reporting unit to measure a goodwill impairment. • Redefines the amount of goodwill impairment to be equal to the amount by which a reporting unit’s carrying value exceeds its fair value, limited to the total amount of goodwill of the reporting unit. • Requires prospective adoption. Expected effects: the Company is evaluating this new standard and its expected timing of adoption. |
Investments - Policy Loans | A. Investments – Policy Loans Policy loans are carried at unpaid principal balances plus accumulated interest, the total of which approximates fair value. These loans are collateralized by life insurance policy cash values and therefore have minimal exposure to credit loss. Interest rate s are reset annually based on a rolling average of benchmark interest rates . |
Cash and Cash Equivalents | B. Cash and Cash Equivalents Cash and cash equivalents are carried at cost that approximates fair value. Cash equivalents consist of sh ort-term investments with maturities of three months or less from the time of purchase. The Company reclassifies cash overdraft positions to accounts payable, accrued expenses and other liabilities when the legal right of offset does not exist. |
Premiums, Accounts and Notes Receivable and Reinsurance Recoverables | C. Pr emiums, Accounts and Notes Receivable and Reinsurance Recoverables Premiums, accounts and notes receivable and reinsurance recoverables are reported net of allowances for doubtful accounts and unrecoverab le reinsurance of $ 210 million as of December 31, 2017 and $ 203 million as of December 31, 2016 . The Company estimates these allowances for doubtful accounts and unrecoverable reinsurance using management’s best estimates of collectability, taking into consideration the age of the outstanding amou nts, historical collection patterns and other economic factors . See Note 22 for additional discussion of the allowance established in 2016 for the risk corridor receivable. |
Deferred Policy Acquisition Costs | D. Deferred Policy Acquisition Costs Costs eligible for deferral include incremental, direct costs of acquiring new or renewal insurance and investment contracts and other costs directly related to successful contract acquisition. Examples of deferrable costs include commissions, sales compensation and benefits, policy issuan ce and underwriting costs and premium taxes. The Company records acquisition costs differently depending on the product line. Acquisition costs for: Supplemental health, life and accident insurance products (primarily individual products) that comprise the majority of the Company’s deferred policy acquisition costs and group health and accident insurance products are deferred and amortized, generally in proportion to the ratio of periodic revenue to the estimated total revenues over the contract periods. Universal life products are deferred and amortized in proportion to the present value of total estimated gross profits over the expected lives of the contracts. Other products are expensed as incurred. Deferred policy acquisition costs also include the v alue of business acquired for certain acquisitions with material long-duration insurance contracts . The Company recorded amortization of deferred policy acquisition co sts of $ 322 mi llion in 2017 , $ 292 million in 2016 and $ 286 million in 2015 primarily in other operating expenses. Each year, deferred policy acquisition costs are tested for recoverability. For universal life and other individual products, management estimates the present value of future revenues less expected payments. For group health and accident insurance products, management estimates the sum of unearned premiums and anticipated net investment income less future expected claims and related costs. If management’s estimates of these s ums are less than the deferred costs, the Company reduces deferred policy acquisitio n costs and records an additional expense. |
Other Assets, including Other Intangibles | E. Other Assets, including Other Intangibles Other assets, including other intangibles consist primarily of GMIB assets, accrued net investment income, other intangible assets and various other insurance-related assets. See Note 9 for the Company’s accounting policy for GMIB assets and s ee Note 17 for the Company’s accounting policy for other intangibles. Addit ionally, these other assets include the carrying value of our equity-method investments in joint ventures in China , India (as of 2017) and other foreign jurisdictions. |
Contractholder Deposit Funds | F. Contractholder Deposit Funds Liabilities for contractholder deposit funds primar ily include deposits received from customers for investment-related and universal life products and investment earnings on their fund balances. These liabilities are adjusted to reflect administrative charges and, for universal life fund balances, mortali ty charges. In addition, this caption includes: 1) premium stabilization reserves under group insurance contracts representing experience refunds left with the Company to pay future premiums; 2) deposit administration funds used to fund non-pension retir ee insurance programs; 3) retained asset accounts; and 4) annuities or supplementary contracts without significant life contingencies. Interest credited on these funds is accrued ratably over the contract period. |
Future Policy Benefits | G. Future Policy Benefits Future pol icy benefits represent the present value of estimated future obligations under long-term life and supplemental health insurance policies and annuity products currently in force. These obligations are estimated using actuarial methods and consist primarily of reserves for annuity contracts, life insurance benefits, GMDB contracts (see Note 9 for additional information) and certain health, life and accident insurance products of our Global Supplemental Benefits segment. Obligations for annuities rep resent specified periodic benefits to be paid to an individual or groups of individuals over their remaining lives. Obligations for life insurance policies and GMDB contracts represent benefits expected to be paid to policyholders, net of future premiums expected to be received. Management estimates these obligations based on assumptions as to premiums, interest rates, mortality or morbidity, future claim adjudication expenses and surrenders, allowing for adverse deviation as appropriate. Mortality, morb idity and surrender assumptions are based on the Company’s own experience and published actuarial tables. Interest rate assumptions are based on management’s judgment considering the Company’s experience and future expectatio ns, and range from 0.1 % to 9 %. Obligations for the run-off settlement annuity business include adjustments for realized and unrealized investment returns consistent with GAAP when a premium deficiency exists. |
Redeemable Noncontrolling Interests | H. Redeemable Noncontrolling Interests Produc ts and services are offered in Turkey and India through joint venture entities. T he Company is the principal equity holder and primary beneficiary of the Turkey joint venture and a ccordingly, this entity is consolidated. In 2017, Cigna modified the agree ment governing its joint venture in India due to changes in the local regulatory environment that require control by a local partner. As a result of the changes in the joint venture agreement, the Company determined that it is no longer the primary benefi ciary of the joint venture and, effective with the third quarter of 2017, no longer consolidates its results. As of December 31, 2017 t he redeemable noncontrolling interests on our Consolidated Balance Sheets represent the Turkey joint venture partner’s preferred and common stock interests in the entity . Our joint venture partner may, at their election, require the Company to purchase their redeemable noncontrolling interests. We also have the right to require our joint venture partner to sell their re deemable noncontrolling interests to us. The redeemable noncontrolling interests were recorded at fair value as of the dates of purchase. When the estimated redemption value for a redeemable noncontrolling interest exceeds its carrying value, an adjustme nt to increase the redeemable noncontrolling interest is recorded with an offsetting reduction to additional paid-in capital. When an adjustment is made to the carrying value of the redeemable noncontrolling interest, the calculation of shareholders’ net income per share will be adjusted if the redemption value exceeds the greater of the carrying value or fair value. |
Accounts Payable, Accrued Expenses and Other Liabilities | I. Accounts Payable, Accrued Expenses and Other Liabilities Accounts payable, accrued expenses and other liabilities include liabilities for pension, other postretirement and postemployment benefits (see Note 15 ), GMIB contract liabilities (see Note 9 ), self-insured exposures, management compensation, cash overdraft positions and various insurance-related liabilities, includ ing experience-rated refunds, reinsurance contracts and the risk adjustment and minimum medical loss ratio rebate accrual s under The Patient Protection and Affordable Care Act (the “ACA”). Legal costs to defend the Company’s litigation and arbitration mat ters are expensed when incurred in cases where the Company cannot reasonably estimate the ultimate cost to defend. In cases where the Company can reasonably estimate the cost to defend, a liability for these costs is accrued when the claim is reported. |
Translation of Foreign Currencies | J . Translation of Foreign Currencies The Company generally conducts its international business through foreign operating entities that maintain assets and liabilities in local currencies that are generally their functional currencies. The Company uses e xchange rates as of the balance sheet date to translate assets and liabilities into U.S. dollars. Translation gains or losses on functional currencies, net of applicable taxes, are recorded in accumulated other comprehensive income (loss). The Company us es average monthly exchange rates during the year to translate revenues and expenses into U.S. dollars. |
Premiums and Related Expenses | K. Premiums and Related Expenses Premiums for group life, accident and health insurance and managed care coverages are recognized as revenue on a pro rata basis over the contract period. Benefits and expenses are recognized when incurred and, for our Global Health Care insured business, medical costs are presented net of pharmaceutical manufacturer rebates. For experience-rated contracts, premium revenue includes an adjustment for experience-rated refunds based on contract terms and calculated using the customer’s experience (including e stimates of incurred but not reported claims). Premium revenue also includes an adjustment to reflect the estimated effect of rebates due to customers under the commercial minimum medical loss ratio provisions of the ACA . These rebates are settled in t he year following the policy year. Premiums received for the Company’s Medicare Advantage Plans and Medicare Part D products from the Centers for Medicare and Medicaid Services (“CMS”) and customers are recognized as revenue ratably over the contract pe riod. CMS provides risk-adjusted premium payments for Medicare Advantage Plans and Medicare Part D products based on the demographics and wellness of enrollees. The Company recognizes periodic changes to risk-adjusted premiums as revenue when the amounts are determinable and collection is reasonably assured. Additionally, Medicare Part D premiums include payments from CMS for risk sharing adjustments. The risk sharing adjustments are estimated quarterly based on claim experience by compar ing actual incu rred drug benefit costs to estimated costs submitted in original contracts . These adjustments may result in more or less revenue from CMS. Final revenue adjustments are determined and settled with CMS in the year following the contract year. Premium rev enue also includes an adjustment to reflect the estimated effect of rebates due to CMS under the Medicare Advantage and Medicare Part D minimum medical loss ratio provisions of the ACA . T he ACA prescribed three programs to mitigate the risk for participating health insurance companies selling c overage on the public exchanges: risk adjustment, reinsurance and risk corridor. The reinsurance and risk corridor programs expired at the end of 2016, while the permanent risk adjustment program continue s. A summary of these programs and the Company’s accounting policy is provided below. The risk adjustment program reallocates funds from insurers with lower risk populations to insurers with higher risk populations based on the relative risk scores of pa rticipants in non-grandfathered plans in the individual and small group markets, both on and off the exchanges. We estimate our receivable or payable based on the risk of our members compared to the risk of other members in the same state and market, cons idering data obtained from industry studies and the United States Department of Health and Human Services (“HHS”). Receivables or payables are recorded as adjustments to premium revenue based on our year-to-date experience when the amounts are reasonably estimable and collection is reasonably assured. Final revenue adjustments are determined by HHS in the year following the policy year. The reinsurance program (discontinued as of December 31, 2016) was designed to provide reimbursement to insurers for hi gh cost individual business sold on or off the public exchanges. Reinsurance contributions associated with non-grandfathered individual plans were reported as reductions in premium revenues, and estimated reinsurance recoveries were established with offse tting reductions in Global Health Care medical costs. Reinsurance fee contributions for other insured business were reported in other operating expenses. The risk corridor program (also discontinued as of December 31, 2016) was designed to limit insurer gains and losses by comparing allowable medical costs to a target amount as defined by HHS. The Company recorded receivables or payables as adjustments to premium revenue based on year-to-date experience when the amounts were reasonably estimable and coll ection was reasonably assured. In 2016, the Company also recorded an allowance against these risk corridor receivables that is discussed further in Note 22. Premiums for individual life, accident and supplemental health insurance and annuity products, exc luding universal life and investment-related products, are recognized as revenue when due. Benefits and expenses are matched with premiums. Revenue for universal life products is recognized as follows: Investment income on assets supporting universal li fe products is recognized in net investment income as earned. Charges for mortality, administration and policy surrender are recognized in premiums as earned. Administrative fees are considered earned when services are provided. Benefits and expenses for universal life products consist of benefit claims in excess of policyholder account balances and income earned by policyholders. Expenses are recognized when claims are incurred, and income is credited to policyholders in accordance with contract provisio ns. The unrecognized portion of premiums received is recorded as unearned premiums. |
Fees, Related Expenses and Mail Order Revenue and Costs | L. Fees, Related Expenses and Mail Order Pharmacy Revenues and Costs Contr act fees for administrative services only (“ASO”) programs and pharmacy programs and services are recognized in fees and other revenues as services are provided, net of estimated pharmaceutical manufacturer rebates payable to ASO clients using our network of retail pharmacies and estimated refunds under performance guarantees. Expenses associated with these programs and services are recognized in other operating expenses as incurred, net of estimated pharmaceutical rebates from manufacturers for prescripti ons filled through our network of retail pharmacies. In some cases, the Company provides performance guarantees associated with meeting certain service standards, clinical outcomes or financial metrics. If these service standards, clinical outcomes or financial metrics are not met, the Company may be financially at risk up to a stated percentage of the contracted fee s or a stated dollar amount. The Company defers revenues for estimated payouts associated with these performance guarante es. Approximatel y 11 % of ASO fees reported for the year ended December 31, 2017 were at risk under performance guarantees, with reimbursements estimat ed to be less than 1 % of revenues. Revenues for investment-related products are recognized as follows : Investment income on assets supporting investment-related products is recognized in net investment income as earned. Contract fees based upon related administrative expenses are recognized in fees and other revenues as they are earned ratably over the contract period. Benefits and expenses for investment-related products consist primarily of income credited to policyholders in accordance with contract provisions. Mail order pharmacy revenues and the cost of prescriptions are recognized as each prescri ption is shipped. Mail order pharmacy revenues are presented net of estimated pharmaceutical manufacturer rebates payable to ASO clients using our mail order business. Mail order pharmacy costs include the cost of prescriptions sold and other costs to op erate this business including supplies, shipping and handling, net of estimated pharmaceutical rebates from manufacturers for prescriptions filled through our mail order business. |
Earnings Per Share | Accounting policy. The Company computes basic earnings per share using the weighted-average number of unrestricted common and deferred shares outstanding. Diluted earnings per share also includes the dilutive effect of outstanding employee stock options and restricted stock using the treasury stock method and the effect of strategic performance shares. |
Reinsurance | R einsurance does not relieve the originating insurer of liability. Therefore, reinsured liabilities must continue to be reported along with the related reinsurance recoverables . GMDB is accounted for as reinsurance and GMIB assets and liab ilities are reported as derivatives at fair value as discussed below. GMIB assets are reported in other assets, including intangibles, and GMIB liabilities are reported in accounts payable, accrued expenses and other liabilities. |
Fair Value Measurements | Assumptions used in fair value measurement. GMIB assets and liabilities are established using capital market assumptions (including market returns, interest rates and market volatilities of the underlying equity and bond mutual fund investments) and assumptions related to future annuitant behavior (including mortality, lapse, and annuity election rates). As assumptions related to future annuitant behavior are largely unobservable , the Company classifies GMIB assets and liabilities in Level 3 in the fair value hierarchy presented in Note 10. The only assumption expected to impact future shareholders’ net income is non-performance risk. The non-performance risk adjustment reflects a market participant’s view of nonpayment risk by adding an additional spread to the discount rate in the calculation of both (a) the GMIB liabilities to be paid by the Company, and (b) the GMIB assets to be paid by the reinsurers, after considering collateral. The Company regularly evaluates each of the assumptions used in establishing these assets and liabilities. Significant decreases in assumed lapse rates or spreads used to calculate non-performance risk of the Company, or significant increases in assumed annuity election rates or spreads used to cal culate the non-performance risk of the reinsurers, would result in higher fair value measurements. A change in one of these assumptions is not necessarily accompanied by a change in another assumption. The Company carries certain financial instruments at fair value in the financial statements including fixed maturities, equity securities, short-term investments and derivatives. Other financial instruments are measured at fair value only under certain co nditions, such as when impaired. Fair value is defined as the price at which an asset could be exchanged in an orderly transaction between market participants at the balance sheet date. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a market participant, not the amount that would be paid to settle t he liability with the creditor. The Company’s financial assets and liabilities carried at fair value have been classified based upon a hierarchy defined by GA AP. The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest ranking to fair values determined using methodologies and models with unob servable inputs (Level 3). An asset’s or a liability’s classification is based on the lowest level of input that is significant to its measurement. For example, a financial asset or liability carried at fair value would be classified in Level 3 if unobse rvable inputs were significant to the instrument’s fair value, even though the measurement may be derived using inputs that are both observable (Levels 1 and 2) and unobservable (Level 3). The Company estimates fair values using prices from third parties or internal pricing methods. Fair value estimates received from third-party pricing services are based on reported trade activity and quoted market prices when available, and other market information that a market participant may use to estimate fair valu e. The internal pricing methods are performed by the Company’s investment professionals and generally involve using discounted cash flow analyses, incorporating current market inputs for similar financial instruments with comparable terms and credit quali ty, as well as other qualitative factors. In instances where there is little or no market activity for the same or similar instruments, fair value is estimated using methods, models and assumptions that the Company believes a hypothetical market participa nt would use to determine a current transaction price. These valuation techniques involve some level of estimation and judgment that becomes significant with increasingly complex instruments or pricing models. The Company is responsible for determining f air value, as well as for assigning the appropriate level within the fair value hierarchy, based on the significance of unobservable inputs. The Company reviews methodologies, processes and controls of third-party pricing services and compares prices on a test basis to those obtained from other external pricing sources or internal estimates. The Company performs ongoing analyses of both prices received from third-party pricing services and those developed internally to determine that they represent approp riate estimates of fair value. The controls executed by the Company include evaluating changes in prices and monitoring for potentially stale valuations. The Company also performs sample testing of sales values to confirm the accuracy of prior fair value estimates. The minimal e xceptions identified during these processes indicate that adjustments to prices are infrequent and do not significantly impact valuations. Annually, we conduct an on-site visit of the most significant pricing service to review th eir processes, methodologies and controls. This on-site review includes a walk-through of inputs for a sample of securities held across various asset types to validate the documented pricing process. Level 1 Financial Assets Inputs for instruments classified in Level 1 include unadjusted quoted prices for identical assets in active markets accessible at the measurement date. Active markets provide pricing data for trades occurring at least weekly and include exchanges and dealer markets. Assets in Level 1 include actively-traded U.S. government bonds and exchange-listed equity securities. Given the narrow definition of Level 1 and the Company's investment asset strategy to maximize investment ret urns, a relatively small portion of the Company’s investment assets are classified in this category. Level 2 Financial Assets and Financial Liabilities Inputs for instruments classified in Level 2 include quoted prices for similar assets or liabilities i n active markets, quoted prices from those willing to trade in markets that are not active, or other inputs that are market observable or can be corroborated by market data for the term of the instrument. Such other inputs include market interest rates an d volatilities, spreads and yield curves. An instrument is classified in Level 2 if the Company determines that unobservable inputs are insignificant. Fixed maturities and equity securities. Approximately 94 % of the Company’s investments in fixed maturities and equity securities are classified in Level 2 including most public and private corporate debt and equity securities, federal agency and municipal bonds, non-government mortgage-backed securities and preferred stocks. Because many fixed maturities do not trade daily, third-party pricing services and internal methods often use recent trades of securities with similar features and characteristics. When recent trades are not available, pricing models are used to determine these prices. Th ese models calculate fair values by discounting future cash flows at estimated market interest rates. Such market rates are derived by calculating the appropriate spreads over comparable U.S. Treasury securities, based on the credit quality, industry and structure of the asset. Typical inputs and assumptions to pricing models include, but are not limited to, a combination of benchmark yields, reported trades, issuer spreads, liquidity, benchmark securities, bids, offers, reference data, and industry and e conomic events. For mortgage-backed securities, inputs and assumptions may also include characteristics of the issuer, collateral attributes, prepayment speeds and credit rating. Nearly all of these instruments are valued using recent trades or pricing models. Less than 1 % of the fair value of investments classified in Level 2 represents foreign bonds that are valued using a single unadjusted market-observable input derived by averaging multiple broker-dealer quotes, consistent with local market pra ctice. Short-term investments are carried at fair value which approximates cost. On a regular basis, the Company compares market prices for these securities to recorded amounts to validate that current carrying amounts approximate exit prices. The short- term nature of the investments and corroboration of the reported amounts over the holding period support their classification in Level 2. Other derivatives classified in Level 2 represent over-the-counter instruments such as interest rate and foreign currency swap contracts. Fair values for these instruments are determined using market observable inputs including forward currency and interest rate curves and widely published market observable indices. Credit risk related to the counterparty and the C ompany is considered when estimating the fair values of these derivatives. However, the Company is largely protected by collateral arrangements with counterparties and determined that no adjustment for credit risk was required as of December 31, 2017 or 2016 . Level 2 also includes exchange-traded interest rate swap contracts. Credit risk related to the clearinghouse counterparty and the Company is considered minimal when estimating the fair values of these derivatives because of upfront margin deposits and d aily settlement requirements. The nature and use of these other derivatives are described in Note 12 . Level 3 Financial Assets and Financial Liabilities Certain inputs for instruments classified in Level 3 are unobservable (supported by little or no market activity) and significant to their resulting fair value measurement. Unobservable inputs reflect the Company’s best estimate of what hypothetical market participants would use to determine a transaction price for the asset or liability at the reporting date. The Company classifies certain newly issued, privately-placed, complex or illiquid securities, as well as assets and liabilities relating to GMIB, in Level 3. Approximately 3 % of fixed maturities and equity securities are priced using significant unobservable inputs and classified in this category. Fair values of mortgage and other asset-backed securities, corporate and government fixed maturities are primarily determined using pricing models that incorporate the specific characteristics of each asset and related assumptions including the investment type and structure, credit quality, industry and maturity date in comparison to current market indices, spreads and liquidity of assets with similar characteristics. For mortgage and other asset- backed securities, inputs and assumptions for pricing may also in clude collateral attributes and prepayment speeds. Recent trades in the subject security or similar securities are assessed when available, and the Company may also review published research in its evaluation, as well as the issuer’s financial statements. Mortgage and other asset-backed securities. The significant unobservable inputs used to value the following mortgage and other asset-backed securities are liquidity and weighting of credit spreads. When th ere is limited trading activity for the security, an adjustment for liquidity is made as of the measurement date that considers current market conditions, issuer circumstances and complexity of the security structure. An adjustment to weight credit spread s is needed to value a more complex bond structure with multiple underlying collateral and no standard market valuation technique. The weighting of credit spreads is primarily based on the underlying collateral’s characteristics and their proportional cas h flows supporting the bond obligations. Corporate and government fixed maturities . The significant unobservable input used to value the following corporate and government fixed maturities is an adjustment for liquidity. When there is limited trading activity for the security, an adjustment is needed to reflect current market conditions and issuer circumstances. Private equity securities. The significant unobservable input used to value the following private equity securities is a multiple of earning s before interest, taxes, depreciation and amortization (“EBITDA”). These securities are comprised of private equity investments with limited trading activity and therefore a ratio of EBITDA is used to estimate value based on company circumstances and rel ative risk characteristics. Hybrid equity securities. The significant unobservable input used to value the following hybrid equity securities is an adjustment for liquidity due to limited trading activity. These cumulative preferred shares are deemed likely to exercise certain call options and the Company estimates an adjustment used to discount cash flows based on current market conditions and issuer circumstances. Significant increases in liquidity or credit spreads would result in lower fair value measurement s while decreases in these inputs would result in higher fair value measurement s . Significant decreases in equity price - to -EBITDA multiples would result in lower fair value measurement s while increases in these inputs would result in higher fair value measurement s . Generally, the unobservable inputs are not interrelated and a change in the assumption used for one unobservable input is not accompanied by a change i n the other unobservable input. As noted in the preceding tables, total gains and losses included in shareholders’ net income are reflected in the following captions in the Consolidated Statements of Income: Realized investment gains (losses) and net investment income for amounts related to fixed maturities and equity securities and realized investment gains (losses) for the impact of changes in non-performance risk related to GMIB assets and liabilities, similar to hedge ineffectiveness; and Other operating expenses for amounts re lated to GMIB assets and liabilities (GMIB fair value gain/loss), except for the impact of changes in non-performance risk. In the tables above, gains and losses included in other comprehensive income are reflected in net unrealized appreciation (deprecia tion) on securities in the Consolidated Statements of Comprehensive Income. Reclassifications impacting Level 3 financial instruments are reported as transfers into or out of the Level 3 category as of the beginning of the quarter in which the transfer oc curs. Therefore gains and losses in income only reflect activity for the period the instrument was classified in Level 3. Transfers into or out of the Level 3 category occur when unobservable inputs, such as the Company’s best estimate of what a market participant would use to determine a current transaction price, become more or less significant to the fair value measurement. Separate account assets in Level 1 primarily include exchange-listed equity securities. Level 2 assets primarily include: corporate and structured bonds valued using recent trades of similar securities or pricing models that discount future cash flows at estimated market interest rates as described above; and actively-traded institutional and retail mutual fund investments . Separate account assets classified in Level 3 primarily support Cigna’s pension plans, and include certain newly issued, privately-placed, complex, or illiquid securities that are priced using methods discussed above, as well as commercial mortgage loans that are valued according to the methodologies discussed below. Separate account investments in securities partnerships, real estate, and hedge funds are generally valued based on the separate account’s ownership share of the equity of the investee (NAV as a practical expedient), including changes in the fair values of its underlying investments. Some financial assets and liabilities are not carried at fair value each reporting period, but may be measured using fair value only under certain conditions, such as investments in real estate, partnership entities and commercial mortgage loans when they become impaired. Commercial mortgage loans . The Company estimates the fair value of commercial mortgage loans generally by discounting the contractual cash flows at estimated market interest rates that reflect the Company’s assessment of the credit quality of the loans. Market inte rest rates are derived by calculating the appropriate spread over comparable U.S. Treasury rates based on the property type, quality rating and average life of the loan. The quality ratings reflect the relative risk of the loan co nsidering debt service co verage, the loan -to- value ratio and other factors . Fair values of impaired mortgage loans are based on the estimated fair value of the underlying collateral generally determined using an internal discounted cash flow model. The fair value measurements we re classified in Level 3 because the cash flow models incorporate significant unobservable inputs. Contractholder deposit funds, excluding universal life products . Generally, these funds do not have stated maturities. Approximately 70 % of the se balances can be withdrawn by the customer at any time without prior notice or penalty. The fair value for these contracts is the amount estimated to be payable to the customer as of the reporting date, which is generally the carrying value. Most of th e remaining contractholder deposit funds are reinsured by the buyers of the individual life and annuity and retirement benefits businesses. The fair value for these contracts is determined using the fair value of these buyers’ assets supporting these rein sured contracts. The Company had reinsurance recoverable s equal to the carrying value of these reinsured contracts . These instruments were classified in Level 3 because certain inputs are unobservable (supported by little or no market activity) and significant to their resulting fair value measurement. Long-term debt, including current maturities, excluding capital leases . The fair value of long-term debt is based on quoted market prices for recent trades . W hen quoted market prices are not avail able, fair value is estimated using a discounted cash flow analysis and the Company’s estimated current borrowing rate for debt of si milar terms and remaining maturities. These measurements were classified in Level 2 because the fair values are based on q uoted market prices or other inputs that are market observable or can be corroborated by market data . |
Separate Accounts | Separate A ccount s Accounting policy. Separate account assets and liabilities are contractholder funds maintained in accounts with specific investment objectives. The assets of these accounts are legally segregated and are not subject to claims that arise out of any of the Company’s other businesses. These separate account assets are carried at fair value with equal amounts recorded for related separate account liabilities. The investment income and fair value gains and losses of these accounts gene rally accrue directly to the contractholders and, together with their deposits and withdrawals, are excluded from the Company’s Consolidated Statements of Income and Cash Flows. Fees and charges earned for mortality risks, asset management or administrati ve services are reported in either premiums or fees and other revenues. I nvestments that are measured using the practical expedient of Net Asset V alue (“ NAV ”) are excluded from the fair value hierarchy. |
Investments | Fixed Maturities and Equity Securities Accounting policy. Fixed maturities (including bonds, mortgage and other asset-backed securities and preferred stocks redeemable by the investor) and most equity securities are classified as available for sale and are carried at fair value with changes in fair value recorded in accumulated other comprehensive income (loss) within shareholders’ equity. Net unrealized appreciation on investments supporting the Company’s run-off settlement annuity business is reported in future policy benefit liabilities rather than accumulated other comprehensive income (loss). Equity securities include hybrid investments consisting of preferred stock with call features that are carried at fair value with changes in fair value reported in other realized investment gains (losses) and dividends reported in net investment income. The Company records impairment losses in net income for fixed maturities with fair value below amortized cost that meet either of the following conditions: If the Company intends to sell or determines that it is m ore likely than not to be required to sell these fixed maturities before the ir fair values recover , an impairment loss is recognized for the excess of the amortized cost over fair value. If the net present value of projected future cash flows of a fixed maturity (based on qualitative and quantitative factors, including the probability of default, and the estimated timing and amount of recovery) is below the amortized cost basis, that diffe rence is recognized as an impairment loss. For mortgage and asset-backed securities, estimated future cash flows are also based on assumptions about the collateral attributes including prepayment speeds, default rates and changes in value. Review of declines in fair value. Management reviews fixed maturities with a decline in fair value from cost for impairment based on criteria that include: length of time and severity of decline; financial health and specific near term prospects of the issuer; changes in the regulatory, economic or general market environment of the issuer’s industry or geographic region; and the Company’s intent to sell or the likelihood of a required sale prior to recovery. Accounting policy. Commercial mortgage loans are carried at unpaid principal balances or, if impaired, the lower of unpaid principal or fair value of the underlying real estate. See the “Impaired commercial mortgage loans” section below for the Company’s accounting policy for impaired commercial mortgage loans . Credit quality . The Company regularly evaluates and monitors credit risk, beginning with the initial underwriting of a mortgage loan an d continuing throughout the investment holding period. Mortgage origination professionals employ an internal credit quality rating system designed to evaluate the relative risk of the transaction at origination that is then updated each year as part of th e annual portfolio loan review. The Company evaluates and monitors credit quality on a consistent and ongoing basis, classifying each loan as a loan in good standing, potential problem loan or problem loan. Quality ratings are based on our evaluation of a number of key inputs related to the loan, including real estate market-related factors such as rental rates and vacancies, and property-specific inputs such as growth rate assumptions and lease rollover statistics. However, the two most significant cont ributors to the credit quality rating are the debt service coverage and loan-to-value ratios. The debt service coverage ratio measures the amount of property cash flow available to meet annual interest and principal payments on debt, with a ratio below 1. 0 indicating that there is not enough cash flow to cover the required loan payments. The loan-to-value ratio, commonly expressed as a percentage, compares the amount of the loan to the fair value of the underlying property collateralizing the loan. The Company’s annual in-depth review of its commercial mortgage loan investments is the primary mechanism for identifying emerging risks in the portfolio. The most recent review was completed by the Company’s investment professionals in the second quarter of 201 7 and included an analysis of each underlying property’s most recent annual financial statements, rent rolls, operating plans, budgets, a physical inspection of the property and other pertinent factors. Based on historical results, current l eases, lease expirations and rental conditions in each market, the Company estimates the current year and future stabilized property income and fair value for each loan. The Company will reevaluate a loan’s credit quality between annual reviews if new pro perty information is received or an event such as delinquency or a borrower’s request for restructure causes management to believe that the Company’s estimate of financial performance, fair value or the risk profile of the underlying property has been impa cted. Impaired commercial mortgage loans. A commercial mortgage loan is considered impaired when it is probable that the Company will not collect all amounts due according to the terms of the original loan agreement. These loans are included in either p roblem or potential problem loans. The Company monitors credit risk and assesses the impairment of loans individually and on a consistent basis for all loans in the portfolio. Impaired loans are carried at the lower of unpaid principal balance or the fai r value of the underlying real estate. The Company estimates the fair value of the underlying real estate using internal valuations generally based on discounted cash flow analyses. Certain commercial mortgage loans without valuation reserves are consider ed impaired because the Company will not collect all interest due according to the terms of the original agreements; however, the Company expects to recover the unpaid principal because it is less than the fair value of the underlying real estate. Because of the risk profile of the underlying investment, the Company recognizes interest income on impaired mortgage loans only when payment is actually received. Other Long- T erm Investments Accounting policy. Other long-term investments include investments in unconsolidated entities. These entities include certain limited partnerships and limited liability companies holding real estate, securities or loans. These investments are carried at cost plus the Company’s ownership percentage of reported income or loss in cases where the Company has significant influence; otherwise the investment is carried at cost. Income from certain entities is reported on a one q uarter lag depending on when their financial information is received. Other long-term investments are considered impaired, and written down to their fair value, when cash flows indicate that the carrying value may not be recoverable. Fair value is genera lly determined based on a discounted cash flow analysis. Other long-term investments also include investment real estate carried at depreciated cost less any impairment write downs to fair value when cash flows indicate that the carrying value may not be recoverable. Depreciation is generally recorded using the straight-line method based on the estimated useful life of each asset. Investment real estate as of December 31, 2017 and 2016 is expected to be held longer than one year and includes real estate acq uired through the foreclosure of commercial mortgage loans. Additionally, other long-term investments include interest rate and foreign currency swaps carried at fair value Short-Term Investments and Cash Equivalents Accounting policy. Security investments with maturities of greater than three months to one year from time of purchase are classified as short-term, available for sale and carried at fair value that approximates cost. Cash equivalents consist of short-term investments with maturities of three months or less from the time of purchase and are carried at cost that approximates fair value. Net Investment Income Accounting policy. When interest and principal payments on investments are current, the Company recognizes interest income when it is earned. The Company recognizes interest income on a cash basis when interest payments are delinquent based on contractual terms or when certain terms (interest rate or maturity date) of the investment have been restructured . Realized Investment Gains And L osses Accounting policy. Realized investment gains and losses are based on specifically identified assets and result from sales, investment asset write-downs, changes in the fair values of certain derivatives and changes in valuation reserves on commercial mortgage loans. |
Derivative Financial Instruments | Accounting policy. The Company reports GMIB liabilities and assets as derivatives at fair value because cash flows of these liabilities and assets are affected by equity markets and interest rates, but are without significant life insurance risk and are settled in lump sum payments . Periodically, the Company receives and pays fees based on either contractholders’ account values or deposits i ncreased at a contractual rate. The Company will also pay and receive cash depending on changes in account values and interest rates when contractholders first elect to receive minimum income payments. Cash flows on these contracts are reported in operat ing activities. Accounting. Using fair value hedge accounting, the fair values of the swap contracts are reported in other assets, including other intangibles, or accounts payable, accrued expenses, and other liabilities. The critical terms of these swaps match those of the long-term debt being hedged. As a result, the carrying value of the hedged debt is adjusted to reflect changes in its fair value driven by LIBOR. The effects of those adjustments on other operating expenses are offset by the effects of corresponding changes in the swaps' fair value. The net impact from the hedge reported in other operating expenses reflects interest expense on the hedged debt at the variable interest rate. Accounting. As these arrangements were not designated as accounting hedges, fair values are reported in short-term investments or accounts payable, accrued expenses, and other liabilities, and changes in fair values are reported in other realized investment gains and losses. Accounting. Using fair value hedge accounting, fair values are reported in other long-term investments or accounts payable, accrued expenses, and other liabilities. Changes in fair values of the swap contracts, as well as changes in the fair values of the hedged bonds attributable to the hedged risk are reported in other realized investment gains and losses. Accounting p olicy. The Company applies hedge accounting when derivatives are designated, qualified and highly effective as hedges. Effe ctiveness is formally assessed and documented at inception and each period throughout the life of a hedge using various quantitative methods appropriate for each hedge, including regression analysis and dollar offset. Under hedge accounting, the changes i n fair value of the derivative and the hedged risk are generally recognized together and offset each other when reported in shareholders’ net income. Changes in the fair value of a derivative instrument may not always equal changes in the fair value of th e hedged item. This is referred to as “hedge ineffectiveness” and is generally recorded in realized investment gains and losses. In the event of an early hedge termination, the changes in fair value of derivatives that qualified for hedge accounting are reported in shareholders’ net income, generally as a part of realized investment gains and losses. Derivative cash flows are generally reported in operating activities. |
Variable Interest Entities | When the Company becomes involved with a variable interest entity, as well as when the re is a change in the Company’s involvement with an entity, the Company must determine if it is the primary beneficiary and must consolidate the entity. The Company would be considered the primary beneficiary if it has the power to direct the entity’s most significant economic activities or has the right to receive benefits or obligation to absorb losses that could be s ignificant to the entity. The Company evaluates the following criteria : the structure and purpose of the entity; the risks and rewards created by and shared through the entity; and the Company’s ability to direct its activities, receive its benefits and absorb its losses relative to the other parties involved with the entity including its sponsors, equity holders, guarantors, creditors and servicers. |
Pension and other postretirement benefits | Accounting policy. The Company measures the assets and liabilities of its domestic pension and other postre tirement benefit plans as of December 31. Benefit obligations are measured at the present value of estimated future payments based on actuarial assumptions. The Company uses the “corridor” method to account for changes in the benefit obligation when actu al results differ from those assumed, or when assumptions change. These changes are called net unrecognized actuarial gains (losses). Under the corridor method, net unrecognized actuarial gains (losses) are initially recorded in accumulated other compreh ensive income. When the unrecognized gain (loss) exceeds 10% of the benefit obligation, that excess is amortized to other operating expense over the expected remaining lives of plan participants. For balance sheet purposes, we measure plan assets at fai r value. When the actual return differs from the expected return, those differences are reflected in the net unrealized actuarial gain (loss) discussed above. However, to measure pension benefit costs, we use a “market-related” asset valuation that diffe rs from the actual fair value for domestic pension plan assets invested in non-fixed income investments. The “market-related” value recognizes the difference between actual and expected long-term returns in the portfolio over five years, a method that red uces the short-term impact of market fluctuations on pension costs. The Company used the Society of Actuaries mortality table RP2014 and the updated improvement scales published in 2016 and 2017 to value its benefit obligations because the Company’s mortality experience closely matched these tables based on internal stud ies. The updated improvement scales published in 2016 and 2017 both indicated that mortality improvement is expected to be lower than was originally projected when the study was first published in 2014, resulting in decreases to the benefit obligations in both years. The Company set s discount rates by applying actual annualized yields for high quality bonds at various durations to the expected cash flows of the pension and other postretirement benefits liabilities. A discount rate curve is constructed using an array of bonds in various industries throughout the domestic market, but only selects those for the curve that have an above average return at each duration. Management believe s that this curve is representative of the yields that the Company is able to achieve through its plan asset investment strategy. Expected long-term rates of return on plan assets were developed considering actual long-term historical returns, expected long-term market conditions, plan asset mix and management’s investment strategy that continues a significant allocation to domestic and foreign equity securities as well as securities partnerships, real estate and hedge funds. Expected long-term market conditions take into consideration certain key macroeconomic trends inclu ding expected domestic and foreign GDP growth, employment levels and inflation. See Note 10 for further details regarding how fair value is det ermined, including the level within the fair value hierarchy and the procedures we use to validate fair value measurements . Within pension plan asset s, t he Company classifies substantially all fixed maturities in Level 2. These assets are valued using recent trades o f similar securities or are fund investments priced using their daily net asset value that is the exit price. Within pension assets, a substantial portion of domestic equity securities are classified as Level 1, while international equity funds are predom inantly classified in Level 2 using daily net asset value. S ecurities partnerships, r eal estate and hedge funds are valued using NAV as a practical expedient and are excluded from the fair value hierarchy. See Note 10 for additional disclosures related t o these assets invested in the separate accounts of the Company’s subsidiaries. Certain securities as described in Note 10, as well as commercial mortgage loans and guaranteed deposit account contracts , are classified in L evel 3 because unobservable input s used in their valuation are significant. |
Employee Incentive Plans | The Company issues shares from Treasury stock for these awards. The Company record s compens ation expense for stock and option awards over their vesting periods pri marily based on the estimated fair value at the grant date. Fair value is determined differently for each type of award as discussed below. Accounting policy. The Company awards options to purchase Cigna common stock at the market price of the stock on the grant date. Options vest over periods ranging from one to three years and expire no later than 10 years from grant date. Fair value is estimated using the Black-Scholes option-pricing model by applying the assumptions presented below. That fair value is reduced by options expected to be forfeited during the vesting period. The Company estimates forfeitures at the grant date based on our experience and adjusts the expense to reflect actual forfeitures over the vesting period. The fair value of options, net of forfeitures, is recognized in operating expenses on a str aight line basis over the vesting period. Black-Scholes option-pricing model assumptions and the resulting fair value of options are presented in the following table. 2017 2016 2015 Dividend yield 0.0% 0.0% 0.0% Expected volatility 35.0% 35.0% 35.0% Risk-free interest rate 1.8% 1.2% 1.3% Expected option life 4.3 years 4.3 years 4.3 years Weighted average fair value of options $ 46.38 $ 42.01 $ 36.40 The expected volatility reflects the past daily stock price volatility of Cigna stock. The Company does not consider volatility implied in the market prices of traded options to be a good indicator of future volatility because remaining traded options will expire within one year. The risk-free interest rate is derived using the four-year U.S. Treasury bond yield rate as of the award date for the primary annual grant. Expected option life reflects the Company’s historical experience. Accounting policy. Fair value of restricted stock awards is equal to the market price of Cigna’s common stock on the date of grant. This fair value is reduced by awards that are expected to forfeit. At the grant date, the Company estimates forfeitures based on experience and adjusts the expense to reflect actual forfeitures over the vesting period. This fair value, net of forfeitures, is recognized in other opera ting expenses over the vesting period on a straight line basis. Accounting policy. Compensation expense for SPSs is recorded over the performance period. For “market condition” SPSs, fair value is determined at the grant date using a Monte Carlo simulation model a nd not subsequently adjusted regardless of the final outcome. For “performance condition” SPSs, expense is initially accrued based on the most likely outcome, but evaluated for adjustment each period for updates in the expected outcome. At the end of the performance period, expense is adjusted to the actual outcome (number of shares awarded times the share price at the grant date). At the grant date, the Company estimates forfeitures based on experience and adjusts the expense to reflect actual forfeitur es over the vesting period. During the vesting period, the Company records tax benefits in shareholders’ net income based on the amount of expense being recognized . When stock options are exer cised, or when restricted stock and SPSs vest, the difference between tax benefits based on the expense and the actual tax benefit realized are also recorded in net income beginning in 2016 in accordance with ASU 2016-09 . Prior to 2016, such excess tax be nefits were recorded as an adjustment to additional paid-in capital. The table below provides information about the cost and tax benefits related to all of our share-based compensation arrangements discussed above . |
Goodwill | Accounting policy. Goodwill represents the excess of the cost of businesses acquired over the fair value of their net assets. The resulting goodwill is assigned to those reporting units expected to realize cash flows from the acquisition, allocated to reporting units based on relative fair values, primarily reported in the Global Health Care segment ($ 5.9 billion) and, to a lesser extent, the Global Supplemental Benefits segment ($ 0.3 billion). The Company evaluates goodwill for impairment at least ann ually during the third quarter at the reporting unit level and writes it down through shareholders’ net income if impaired. Fair value of a reporting unit is generally estimated based on either market data or a discounted cash flow analysis using assumpti ons that the Company believes a hypothetical market participant would use to determine a current transaction price. The significant assumptions and estimates used in determining fair value include the discount rate and future cash flows. A range of disco unt rates is used that corresponds with the reporting unit’s weighted average cost of capital, consistent with that used for investment decisions considering the specific and detailed operating plans and strategies within the reporting unit. Projections o f future cash flows for the reporting unit are consistent with our annual planning process for revenues, claims, operating expenses, taxes, capital levels and long-term growth rates. |
Other intangibles | Other Intangibles Accounting policy. The Company’s other intangible assets include purchased customer and producer relationships, provider networks and trademarks. The fair value of purchased customer relationships and the amortization method were determined as of the dates of purchase using an income approach that relies on projected future net cash flows including key assumptions for the customer attrition rate and discount rate. The Company amortizes other intangibles on an accelerated or straig ht-line basis over periods from five to 30 years. Management revises amortization periods if it believes there has been a change in the length of time that an intangible asset will continue to have value. Costs incurred to renew or extend the terms of these intangible assets are generally expensed as incurred. |
Property and Equipment | Accounting policy. Property and equipment is carried at cost less accumulated depreciation. When applicable, cost includes interest, real estate taxes and other costs incurred during construction. Also included in this category is internal-use software that is acquired, developed or modified solely to meet the Company’s internal needs, with no plan to market externally. Costs directly related to acquiring, developing or modifying internal-use software are capitalized. The Compa ny calculates depreciation and amortization principally using the straight-line method generally based on the estimated useful life of each asset as follows: buildings and improvements, 10 to 40 years; purchased software, three to five years; internally developed software, three to seven years; and furniture and equipment (including computer equipment), three to 10 years. Improvements to leased facilities are depreciated over the lesser of the remaining lease term or the estimated life of the improvement. The Company considers events and circumstances that would indicate the carrying value of property, equipment or capitalized software might not be recoverable. If the Co mpany determines the carrying value of any of these assets is not recoverable, an impairment charge is recorded. |
Income Taxes | Accounting policy. Deferred income tax assets and liabilities are recognized for differences between the financial and income tax reporting bases of the underlying assets and liabilities and established based upon enacted tax rates and laws, including the U.S. tax reform legislation enacted in December 2017. Deferred income tax assets are recogni zed when available evidence indicates that realization is more likely than not. The deferred income tax provision generally represents the net change in deferred income tax assets and liabilities during the year, excluding amounts reported as adjustments to accumulated other comprehensive income or amounts initially recorded due to business combinations. The current income tax provision generally represents estimated amounts due on various income tax returns for the year reported plus the effect of any un certain tax positions. Uncertain tax positions are evaluated in accordance with GAAP. Income taxes for the Company’s foreign operations are provided using the respective foreign jurisdictions’ tax rate. The Company’s foreign operations continue to retai n a significant portion of their earnings overseas. These undistributed earnings are deployed outside of the United States in support of the liquidity and capital needs of our foreign operations as well as to support growth initiatives overseas. The Comp any does not intend to repatriate these earnings. The Company establishes a valuation allowance w hen it determines that realization of a deferred tax asset does not meet the more likely than not standard. Valuation allowances have been established against certain federal, foreign and state deferred tax assets, generally when there is a requirement to assess them on a separate entity basis. |
Commitments and Contingencies | Pending litigation and legal or regulatory matters that the Company has identified with a reasonably possible material loss are described below. When litigation and regulatory matters present loss contingencies that are both probable and estimable, the Company accrues the estimated loss by a charge to shareholders’ net income. The estimated loss is the Company’s best estimate of the probable loss at the time or an amount within a range of estimated losses reflecting the most likely outcome or the mi nimum amount of the range (if no amount is better than any other estimated amount in the range.) The Company provides disclosure in the aggregate for material pending litigation and legal or regulatory matters, including accruals, range of loss, or a stat ement that such information cannot be estimated. |
Segment Information | In the Company’s segment disclosures, we present “operating revenues,” defined as total revenues excluding realized investment results. The Company excludes realized investment results from this measure because its portfolio managers may sell investments based on factors largely unrelated to the underlying business purposes of each segment. As a result, gains or losses created in this process may not be indicative of past or future underlying performance of the business. The Company uses “adjusted income from operations” as its principal financial measure of segment operating performance because management believes it best reflects the underlying results of business operations and permits analysis of trends in underlying revenue, expenses and profitabilit y. Adjusted income from operations is defined as shareholders’ net income excluding after-tax realized investment gains and losses, net amortization of other acquired intangible assets and special items. Income or expense amounts are excluded from adjust ed income from operations for the following reasons: Realized investment results are excluded because, as noted above, our portfolio managers may sell investments based on factors largely unrelated to the underlying business purposes of each segment. N et amortization of other intangible assets is excluded because it relates to costs incurred for acquisitions and, as a result, it does not relate to the core performance of the Company’s business operations. In 2015, the amortization amount was net of a b argain purchase gain on an acquisition. Special items, if any, are excluded because management believes they are not representative of the underlying results of operations. This is generally because the nature and size of these matters are not indicative of our ongoing business operations. Additional details about these items that provide further context as to why they are not considered indicative of ongoing business operations may be found in the footnotes referenced in the table below. |
Accounting Policies - Unpaid Cl
Accounting Policies - Unpaid Claims and Claims Expenses (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Global Health Benefits Segment [Member] | |
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | |
Liabilities for unpaid claims and claims expenses | Accounting policy. The Company uses actuarial principles and assumptions that are consistently applied each reporting period and recognizes the actuarial best est imate of the ultimate liability along with a margin for adverse deviation . This ap proach is consistent with actuarial standards of practice that the liabilities be adequate under moderately adverse conditions. This liability predominately consists of incurred but not reported amounts and reported claims in process including expected d evelopment on reported claims. The liability is primarily calculated using “completion factors” developed by comparing the claim incurral date to the date claims were paid. Completion factors are impacted by several key items including changes in: 1) electronic (auto-adjudication) versus manual claim processing, 2) provider claims submission rates, 3) membership and 4) the mix of products. The Company uses historical completion factors combined with an analysis of current trends and operational fa ctors to develop current estimates of completion factors. T he Company estimates the liability for claims incurred in each month by applying the current estimates of completion factors to the current paid claims data. This approach implicitly assumes that historical completion rates will be a useful indicator for the current period. F or more recent months , the Company relies more heavily on medical cost trend analysis that reflects expected claim payment patterns and other relevant operational considera tions. Medical cost trend is primarily impacted by medical service utilization and unit costs that are affected by changes in the level and mix of medical benefits offered, including inpatient, outpatient and pharmacy, the impact of copays and deductibles , changes in provider practices and changes in consumer demographics and consumption behavior. For each reporting period, the Company compares key assumptions used to establish the medical costs payable to actual experience. When actual experience differ s from these assumptions, medical costs payable are adjusted through current period shareholders’ net income. Additionally, the Company evaluates expected future developments and emerging trends tha t may impact key assumptions. The process used to determ ine this liability requires the Company to make critical accounting estimates that involve considerable judgment , reflecting the variability inherent in forecasting future claim payments. These estimates are highly sensitive to changes in the Company’s ke y assumptions, specifically completion factors and medical cost trends. |
Group Disability and Life, Global Supplemental Beneftits and Other Operations [Member] | |
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | |
Liabilities for unpaid claims and claims expenses | Accounting policy. Liabilities for unpaid claims and claim expenses are established by book of business within the Company's Group Disability and Life, Global Supplemental Benefits and Other Operations segments . The Group Disability and Life segment’s liability for unpaid claims and claim expenses consists of the following primary products: long-term and short-term disability, life insurance, and accident coverages. Unpaid claims and claim expenses consist of (1) case or claims reserves for reported claims that are unpaid as of the balance sheet date; (2) incurred but not reported reserves for claims whe n the insured event has occurred but has not been reported to the Company; and (3) loss adjustment expense reserves for the expected costs of settling the se claims . The Company consistently estimates incurred but not yet reported losses usi ng actuarial principles and assumptions based on historical and projected claim incidence patterns, claim size and the expected payment period. The Company recognizes the actuarial best estimate of the ultimate liability within a level of confidence, cons istent with actuarial standards of practice that the liabilities be adequate under moderately adverse conditions. When estimates of these liabilities change, the Company immediately records the adjustment in benefits and expenses. The majority of the Company’s liability for disability claims consists of the present value of estimated future benefit payments, including expected development, for each reported claim that is currently receiving benefit payments, or pending a decision on eligibility for ben efits, over the expected disability period. The Company projects the expected disability period by using historical resolution rates combined with an analysis of current trends and operational factors to develop current estimates of resolution rates. Usi ng the Company’s experience, expected claim resolution rates may vary based upon the anticipated disability period, the covered benefit period, the cause of disability, the benefit design and the claimant’s age, gender and income level. The gross monthly benefit is reduced (offset) by disability income received under other benefit programs, most commonly Social Security Disability Income, workers’ compensation, statutory disability or other group benefit plans. For certain offsets not yet finalized, the C ompany estimates the probability and amount of future offset awards and lapses based on the Company’s experience. The Company also establishes a liability for the expected present value of future benefit payments for known claims that have recently been r esolved but may reopen in the future, based on Company experience. Prior to a claim becoming known, the Company establishes a liability for incurred but not reported claims, using standard actuarial techniques and calculations based on completion factors and loss ratio assumptions using the Company’s experience combined with an analysis current trends and operational factors. Completion factors are impacted by several key items including changes in claim inventory levels, claim payment patterns, changes i n business volume and other factors. Loss ratio assumptions are developed using historical Company experience, adjusted prospectively for expected changes in the underlying business including rate actions, persistency and inforce growth. The Company discounts certain liabilities, predominantly long-term disability, because benefits payments are made over extended periods. Discount rate assumptions for these liabilities are based on projected investment returns for the supporting asset portfolios . The claims frequency metric used for the Company’s long-term disability line of business represents the number of unique claim events for which benefits have been approved and payments made. Claim events are identified using a unique claimant identifier and incurral date. Thus, if an individual has multiple claims for different disabling events (and therefore different incurral dates), each will be determined to be a unique claim event. However, if an individual receives multiple benefits under more tha n one policy (for example for supplemental disability benefits such as pension contribution benefits or survivor benefits), the Company treats this as a single claim occurrence because they related to the same claim event. Claims frequency metrics for the most recent year are expected to be low reflecting the long-term disability product features including waiting and elimination periods that result in delayed eligibility for contract benefits. Claims that did not result in a liability are not included in the frequency metric. |
Accounting Policies - Guarantee
Accounting Policies - Guaranteed Minimum Death Benefits (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Activity in future policy benefits reserves for GMDB business [Line Items] | |
Future Policy Benefits | G. Future Policy Benefits Future pol icy benefits represent the present value of estimated future obligations under long-term life and supplemental health insurance policies and annuity products currently in force. These obligations are estimated using actuarial methods and consist primarily of reserves for annuity contracts, life insurance benefits, GMDB contracts (see Note 9 for additional information) and certain health, life and accident insurance products of our Global Supplemental Benefits segment. Obligations for annuities rep resent specified periodic benefits to be paid to an individual or groups of individuals over their remaining lives. Obligations for life insurance policies and GMDB contracts represent benefits expected to be paid to policyholders, net of future premiums expected to be received. Management estimates these obligations based on assumptions as to premiums, interest rates, mortality or morbidity, future claim adjudication expenses and surrenders, allowing for adverse deviation as appropriate. Mortality, morb idity and surrender assumptions are based on the Company’s own experience and published actuarial tables. Interest rate assumptions are based on management’s judgment considering the Company’s experience and future expectatio ns, and range from 0.1 % to 9 %. Obligations for the run-off settlement annuity business include adjustments for realized and unrealized investment returns consistent with GAAP when a premium deficiency exists. |
Variable Annuity [Member] | Guaranteed Minimum Death Benefit [Member] | |
Activity in future policy benefits reserves for GMDB business [Line Items] | |
Future Policy Benefits | Accounting policy. The Company estimates th e gross liability and reinsurance recoverable with an internal model based on the Company’s experience and future expectations over an extended period, consistent with the long-term nature of this product. As a result of the reinsurance transaction, reserve increases have a corresponding increase in the recorded reinsurance recoverable, provided the increased recoverable remains within the overall Berkshire limit (including the GMIB asset presented below ). The ending net retained reserve covers ongoing administrative expenses, as well as minor claim exposure retained by the Company. Because the product is premium deficient, the Company records an increase to the net retained reserve if it is inadequate based on the model. |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Requirements and Effects of New Accounting Guidance | Accounting Standard and Adoption Date Effects of Adopting New Guidance GUIDANCE ADOPTED IN 2017 Securities and Exchange Commission ("SEC") Staff Accounting Bulletin No. 118 ("SAB 118"), adopted December 31, 2017 Guidance: • Allows a company to recognize the effects of U.S. tax reform as provisional in its 2017 financial statements when it does not have the necessary information in reasonable detail to complete its accounting for the change in tax law. • Establishes a maximum one-year measurement period that ends when a company has obtained the information necessary to finalize its accounting. During the measurement period, adjustments for the effects of the law will be recorded to the extent a reasonable estimate for all or a portion of the effects of the law can be made. Effects of adoption: • The Company has reported reasonable estimates of the income tax effects of U.S. tax reform as provisional in its financial statements. • See Note 20 for disclosures about the impact of U.S. tax reform on the Company's financial statements. Accounting Standard and Effective Date Applicable for Cigna Requirements and Expected Effects of New Guidance Not Yet Adopted GUIDANCE TO BE ADOPTED JANUARY 1, 2018 Revenue from Contracts with Customers (Accounting Standards Update ("ASU") 2014-09 and related amendments) Required as of January 1, 2018 Requires: • Companies to estimate and allocate the expected customer contract revenues among distinct goods or services based on relative standalone selling prices • Revenues to be recognized as goods or services are delivered • New disclosures including presenting relevant categories of revenues and information about related contract assets and liabilities • Adoption through retrospective restatement with or without using certain practical expedients or adoption with a cumulative effect adjustment Expected effects: • Guidance applies to the Company’s administrative service, mail order pharmacy and other non-insurance contracts, but does not apply to certain contracts within the scope of other GAAP, such as the Company's insurance and investment contracts accounted for under the Financial Accounting Standards Board's Accounting Standards Codification ("ASC") 944. • The Company has completed its evaluation of the new requirements and the adoption of the new guidance will not have a material impact to its pattern of revenue recognition or net income. • The Company will adopt the new guidance through retrospective restatement and is currently working to develop required disclosures and restate historical periods in line with its chosen method of adoption. The Company does not anticipate significant changes to its systems, processes or controls. • The Company's cumulative effect of implementing this guidance will result in an immaterial decrease to the opening balance of retained earnings from establishing a contract liability for service fee revenue that must be recognized when services are provided after the termination of certain administrative service contracts. • The Company also will reclassify certain fees as a result of clarifications in the new guidance and its related interpretations. Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01) Required as of January 1, 2018 Requires: • Entities to measure equity investments at fair value in net income if they are neither consolidated nor accounted for under the equity method • Cumulative effect adjustment to the beginning balance of retained earnings at adoption Expected effects: • Certain limited partnership interests carried at cost of approximately $200 million as of December 31, 2017 will be reported at fair value at adoption with future changes in fair value reported in net investment income. • Changes in fair value for equity securities previously reported in accumulated other comprehensive income will now be reported in net realized investment gains. • Retained earnings will increase by approximately $60 million after-tax on January 1, 2018. Accounting Standard and Effective Date Applicable for Cigna Requirements and Expected Effects of New Guidance Not Yet Adopted GUIDANCE TO BE ADOPTED JANUARY 1, 2018 Intra-Entity Asset Transfers of Assets Other than Inventory (ASU 2016-16) Required as of January 1, 2018 Requires: • Entities to recognize the tax impacts of all intra-entity sales of assets other than inventory even though the pre-tax effects of those transactions are eliminated in consolidation • Modified retrospective approach for adoption with a cumulative-effect adjustment recorded in retained earnings Expected effects: the adoption of this standard will not have a material effect on the Company’s financial statements. Clarifying the Definition of a Business (ASU 2017-01) Required as of January 1, 2018 Guidance: • Revises the definition of a business and provides a more robust framework for entities to use in determining when a set of assets and activities is a business. • Requires entities to apply this new definition to business transactions beginning in the first quarter of 2018. Expected effects: the Company does not expect this change in definition will have a material impact on its financial statements. Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (ASU 2017-07) Required as of January 1, 2018 Requires: • Employers to separate the service cost component from the other components of net benefit cost • Only service cost is eligible for capitalization (as either deferred policy acquisition costs or capitalized software), to be applied prospectively upon adoption • Income statement captions used for each component of net benefit cost to be disclosed Expected effects: the Company does not expect the effect of this new guidance to be material to results of operations because its most significant plans are frozen. See Note 15 for additional information. GUIDANCE TO BE EARLY ADOPTED JANUARY 1, 2018 Targeted Improvements to Accounting for Hedging Activities (ASU 2017-12) Required as of January 1, 2019, with early adoption permitted in 2017 Guidance: • Relaxes requirements for financial and nonfinancial hedging strategies to be eligible for hedge accounting and changes how companies assess effectiveness. • Amends presentation and disclosure requirements to improve transparency about the uses and results of hedging programs. Expected effects: the Company is planning to adopt this guidance on January 1, 2018 with an immaterial impact to its financial statements for existing hedges. Accounting Standard and Effective Date Applicable for Cigna Requirements and Expected Effects of New Guidance Not Yet Adopted GUIDANCE TO BE ADOPTED AFTER 2018 OR ADOPTION DATE HAS NOT BEEN DETERMINED Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02) Effective as of January 1, 2019 with early adoption permitted for reporting periods for which financials have not been issued. Guidance: • Allows companies to reclassify tax effects stranded in accumulated other comprehensive income as a result of U.S. tax reform to retained earnings. • Requires additional disclosures of the company's accounting policy for releasing income tax effects from accumulated other comprehensive income. • Allows companies to apply the guidance retrospectively or in the period of adoption. Effects of adoption: • The Company is evaluating this new standard and its expected timing of adoption. • If adopted as of December 31, 2017, approximately $230 million of accumulated other comprehensive income would have been reclassified to retained earnings. Leases (ASU 2016-02) Required as of January 1, 2019 Requires: • Balance sheet recognition of assets and liabilities arising from leases, including leases embedded in other contracts • Additional disclosures of the amount, timing and uncertainty of cash flows from leases will be required • Modified retrospective approach for leases in effect as of and after the date of adoption with a cumulative-effect adjustment recorded in retained earnings Expected effects: • The Company is continuing to evaluate the impact this standard will have on its financial statements. • While not yet quantified, the Company expects a material impact to the Consolidated Balance Sheets from recognizing additional assets and liabilities of operating leases upon adoption. The actual increase in assets and liabilities will depend on the volume and terms of leases in place at the time of adoption. • The Company is implementing a new lease system in connection with the adoption. Measurement of Credit Losses on Financial Instruments (ASU 2016-13) Required as of January 1, 2020, with early adoption permitted as of January 1, 2019 Requires: • A new approach using expected credit losses to estimate and recognize credit losses for certain financial instruments such as mortgage loans, reinsurance recoverables and other receivables • Changes in the criteria for impairment of available-for-sale debt securities • Adoption using a modified retrospective approach with a cumulative-effect adjustment recorded in retained earnings Expected effects: • The Company is evaluating this new standard, its expected timing of adoption and effects on its financial statements and disclosures. • An additional allowance for future expected credit losses for certain financial instruments may be required at adoption. Simplifying the Test for Goodwill Impairment (ASU 2017-04) Required as of January 1, 2020, with early adoption permitted as of January 1, 2017 Guidance: • Simplifies the accounting for goodwill impairment by eliminating the need to determine the fair value of individual assets and liabilities of a reporting unit to measure a goodwill impairment. • Redefines the amount of goodwill impairment to be equal to the amount by which a reporting unit’s carrying value exceeds its fair value, limited to the total amount of goodwill of the reporting unit. • Requires prospective adoption. Expected effects: the Company is evaluating this new standard and its expected timing of adoption. |
Mergers and Acquisitions (Table
Mergers and Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Acquisitions and Dispositions [Abstract] | |
Merger-related costs | 2017 2016 2015 (In millions) Before-tax After-tax Before-tax After-tax Before-tax After-tax Transaction-related costs $ 126 $ 92 $ 166 $ 147 $ 66 $ 57 Tax (benefit) - previously non-deductible costs - (59) - - - - Transaction-related costs, net $ 126 $ 33 $ 166 $ 147 $ 66 $ 57 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings per Share | 2017 2016 2015 (Shares in thousands, dollars in millions, except per share amounts) Effect of Effect of Effect of Basic Dilution Diluted Basic Dilution Diluted Basic Dilution Diluted Shareholders' net income $ 2,237 $ - $ 2,237 $ 1,867 $ - $ 1,867 $ 2,094 $ - $ 2,094 Shares Weighted average 250,892 - 250,892 255,360 - 255,360 256,149 - 256,149 Common stock equivalents 4,180 4,180 4,287 4,287 4,443 4,443 Total shares 250,892 4,180 255,072 255,360 4,287 259,647 256,149 4,443 260,592 EPS $ 8.92 $ (0.15) $ 8.77 $ 7.31 $ (0.12) $ 7.19 $ 8.17 $ (0.13) $ 8.04 |
Antidilutive Options Table | (In millions) 2017 2016 2015 Anti-dilutive options 0.9 2.3 0.4 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt [Table] [Abstract] | |
Short-term and Long-term Debt | (In millions) 2017 2016 Short-term debt Commercial paper $ 100 $ - Current maturities of long-term debt 131 250 Other, including capital leases 9 26 Total short-term debt $ 240 $ 276 Long-term uncollateralized debt $131 million, 6.35% Notes due 2018 $ - $ 131 $250 million, 4.375% Notes due 2020 (1) 249 252 $300 million, 5.125% Notes due 2020 (1) 299 301 $78 million, 6.37% Notes due 2021 78 78 $300 million, 4.5% Notes due 2021 (1) 299 302 $750 million, 4% Notes due 2022 745 744 $100 million, 7.65% Notes due 2023 100 100 $17 million, 8.3% Notes due 2023 17 17 $900 million, 3.25% Notes due 2025 894 893 $600 million, 3.05% Notes due 2027 594 - $259 million, 7.875% Debentures due 2027 (2) 258 299 $45 million, 8.3% Step Down Notes due 2033 (2) 45 82 $191 million, 6.15% Notes due 2036 (2) 190 498 $121 million, 5.875% Notes due 2041 (2) 119 296 $317 million, 5.375% Notes due 2042 (2) 315 743 $1,000 million, 3.875% Notes due 2047 988 - Other, including capital leases 9 20 Total long-term debt $ 5,199 $ 4,756 (1) The Company has entered into interest rate swap contracts hedging a portion of these fixed-rate debt instruments. See Note 12 for further information about the Company’s interest rate risk management and these derivative instruments. (2) The Company redeemed a portion of these debt issues through a cash tender offer in September 2017, the aggregate amount of which was $1.0 billion. (In millions) Debt Instrument Principal Term Maturity Stated Interest Rate Effective Interest Rate Amount net of discount and fees Interest payment dates 10-Year Notes $ 600 10-Year October 15, 2027 3.05 % 3.183 % $ 594 April 15 and October 15 30-Year Notes $ 1,000 30-Year October 15, 2047 3.875 % 3.951 % $ 987 April 15 and October 15 |
Maturities of long-term debt and capital leases | Scheduled Maturities (In millions) Long-term Debt (1) Capital Leases 2018 $ 131 $ 9 2019 $ - $ 8 2020 $ 550 $ 1 2021 $ 378 $ - 2022 $ 750 $ - Maturities after 2022 $ 3,550 $ - (1) Long-term debt maturity amounts exclude capital leases. (In millions) Operating Lease Payments 2018 $ 130 2019 $ 113 2020 $ 94 2021 $ 73 2022 $ 58 2023 and thereafter $ 114 |
Common and Preferred Stock (Tab
Common and Preferred Stock (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Common And Preferred Stock [Abstract] | |
Schedule of issued shares | (Shares in thousands) 2017 2016 2015 Common: Par value $0.25; 600,000 shares authorized Outstanding - January 1, 256,869 256,544 259,276 Issued for stock option exercises and other benefit plans 2,761 1,110 2,751 Repurchased common stock (15,663) (785) (5,483) Outstanding - December 31, 243,967 256,869 256,544 Treasury stock 52,178 39,276 39,601 Issued - December 31, 296,145 296,145 296,145 |
Global Health Care Medical Co45
Global Health Care Medical Costs Payable (Tables) - Global Health Benefits Segment [Member] | 12 Months Ended |
Dec. 31, 2017 | |
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | |
Activity in medical costs payable | (In millions) 2017 2016 2015 Balance at January 1, $ 2,532 $ 2,355 $ 2,180 Less: Reinsurance and other amounts recoverable 275 243 252 Balance at January 1, net 2,257 2,112 1,928 Incurred costs related to: Current year 20,233 19,087 18,564 Prior years (266) (78) (210) Total incurred 19,967 19,009 18,354 Paid costs related to: Current year 17,979 17,052 16,588 Prior years 1,791 1,812 1,582 Total paid 19,770 18,864 18,170 Balance at December 31, net 2,454 2,257 2,112 Add: Reinsurance and other amounts recoverable 265 275 243 Balance at December 31, $ 2,719 $ 2,532 $ 2,355 |
Variances in incurred costs related to prior years' medical costs payable | 2017 2016 ($ in millions) $ % (1) $ % (2) Actual completion factors $ 124 0.7 % $ 59 0.3 % Medical cost trend 133 0.7 27 0.1 Other (3) 9 - (8) - Total favorable variance $ 266 1.4 % $ 78 0.4 % (1) Percentage of current year incurred costs as reported for 2016. (2) Percentage of current year incurred costs as reported for 2015. (3) Other amounts in 2017 primarily related to an increase in the 2016 reinsurance reimbursement rate from CMS under the ACA. Other amounts in 2016 primarily related to increased medical costs in the Government segment resulting from sharing additional risk adjustment revenue with providers. |
Incurred and paid claims development | Incurred Costs Incurral Year 2016 (Unaudited) 2017 Medical Costs Payable Claims Frequency ($ in millions, except for claims frequency) 2016 $ 19,087 $ 18,822 $ 159 2.7 million 2017 20,233 $ 2,254 3.3 million Cumulative incurred costs for the periods presented $ 39,055 Cumulative Paid Costs Incurral Year 2016 (Unaudited) 2017 2016 $ 17,052 $ 18,663 2017 17,979 Cumulative paid costs for the periods presented $ 36,642 Cumulative incurred costs less cumulative paid costs for the periods presented $ 2,413 Outstanding liabilities prior to 2016 41 Net outstanding liabilities for Global Health Care medical costs payable 2,454 Reinsurance and other amounts recoverable 265 Total liability for Global Health Care medical costs payable $ 2,719 |
Liabilities for Unpaid Claims46
Liabilities for Unpaid Claims and Claims Expenses (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | |
Details of unpaid claim discounted liability | (In billions) 2017 2016 Discounted liabilities $ 4.0 $ 3.9 Aggregate amount of discount $ 1.0 $ 1.1 Range of discount rates 4.5 % - 5.2 % 3.3 % - 5.8 % |
Long-term Disability [Member] | |
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | |
Incurred and paid claims development | (In millions, except for claims frequency) Incurred Claims (undiscounted) Accident Year 2012 (Unaudited) 2013 (Unaudited) 2014 (Unaudited) 2015 (Unaudited) 2016 (Unaudited) 2017 Incurred But Not Reported Liabilities Claims Frequency 2012 $ 995 $ 951 $ 889 $ 876 $ 883 $ 880 $ - 21,180 2013 1,063 1,037 1,062 1,072 1,057 - 23,516 2014 1,158 1,129 1,167 1,146 - 25,281 2015 1,184 1,154 1,185 5 25,609 2016 1,246 1,184 20 24,722 2017 1,226 540 10,569 Cumulative incurred claims for the periods presented $ 6,678 Cumulative Paid Claims Accident Year 2012 (Unaudited) 2013 (Unaudited) 2014 (Unaudited) 2015 (Unaudited) 2016 (Unaudited) 2017 2012 $ 81 $ 288 $ 429 $ 504 $ 571 $ 621 2013 92 342 503 600 670 2014 111 379 575 667 2015 114 417 603 2016 122 411 2017 110 Cumulative paid claims for the periods presented $ 3,082 All outstanding liabilities for the periods presented, net of reinsurance $ 3,596 All outstanding liabilities prior to 2012, net of reinsurance 1,142 Impact of discounting (948) Liability for long-term disability unpaid claims and claim expenses, net of reinsurance $ 3,790 |
Reconciliation of net inucurred and paid claims development table to the liability for unpaid claims and claim expenses | (In millions) Net outstanding liabilities – Group Disability and Life segment Long-term disability liabilities, net of reinsurance $ 3,790 Other short-duration insurance books of business, net of reinsurance 599 Liabilities for unpaid claims and claim expenses, net of reinsurance 4,389 Reinsurance recoverable on unpaid claims – Group Disability and Life segment Long-term disability 94 Other short-duration insurance books of business 8 Total reinsurance recoverable on unpaid claims 102 Total liability for unpaid claims and claim expenses – Group Disability and Life segment 4,491 Global Supplemental Benefits segment 484 Other Operations segment 193 Total liability for unpaid claims and claim expenses $ 5,168 |
Group Disability and Life, Global Supplemental Beneftits and Other Operations [Member] | |
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | |
Liability balance details | (In millions) 2017 2016 Group Disability and Life $ 4,491 $ 4,342 Global Supplemental Benefits 484 384 Other Operations 193 191 Unpaid claims and claim expenses $ 5,168 $ 4,917 |
Group Disability and Life and Global Supplemental Benefits [Member] | |
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | |
Liability balance details | (In millions) 2017 2016 2015 Balance at January 1, $ 4,726 $ 4,359 $ 4,178 Less: Reinsurance 121 115 104 Balance at January 1, net 4,605 4,244 4,074 Incurred claims related to: Current year 4,341 4,258 3,813 Prior years Interest accretion 163 161 163 All other incurred (4) 93 (91) Total incurred 4,500 4,512 3,885 Paid claims related to: Current year 2,724 2,575 2,325 Prior years 1,572 1,560 1,382 Total paid 4,296 4,135 3,707 Acquisitions - - 11 Foreign currency 29 (16) (19) Balance at December 31, net 4,838 4,605 4,244 Add: Reinsurance 137 121 115 Balance at December 31, $ 4,975 $ 4,726 $ 4,359 |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Effects Of Reinsurance [Line Items] | |
Components of reinsurance recoverables | (Dollars in millions) Line of Business Reinsurer(s) December 31, 2017 December 31, 2016 Collateral and Other Terms at December 31, 2017 Ongoing Operations Global Health Care, Global Supplemental Benefits, Group Disability and Life, COLI Various $ 454 $ 478 Recoverables from approximately 90 reinsurers, used in the ordinary course of business. Current balances range from less than $1 million up to $80 million. Over 70% of the balance is from companies rated as investment grade by Standard & Poor's, and 11% is secured by assets in trusts or letters of credit. Total recoverables related to ongoing operations 454 478 Acquisition, disposition or runoff activities Individual Life and Annuity (sold in 1998) Lincoln National Life and Lincoln Life & Annuity of New York 3,436 3,586 Both companies' ratings were sufficient to avoid triggering a contractual obligation to fully secure the outstanding balance. GMDB (effectively exited in 2013) Berkshire 928 1,085 100% secured by assets in a trust. Other 34 44 100% secured by assets in a trust or letters of credit. Retirement Benefits Business (sold in 2004) Prudential Retirement Insurance and Annuity 850 921 100% secured by assets in a trust. Supplemental Benefits Business (2012 acquisition) Great American Life 283 297 100% secured by assets in a trust. Other run-off reinsurance Various 61 67 100% secured by assets in a trust or other deposits. Total recoverables related to acquisition, disposition or runoff activities 5,592 6,000 Total reinsurance recoverables $ 6,046 $ 6,478 |
Effects of Reinsurance | (In millions) 2017 2016 2015 Premiums Short-duration contracts Direct $ 28,654 $ 27,496 $ 26,751 Assumed 199 247 289 Ceded (150) (229) (254) Total short-duration contract premiums 28,703 27,514 26,786 Long-duration contracts Direct 3,748 3,259 3,061 Assumed 130 137 111 Ceded Individual life insurance and annuity business sold (143) (153) (158) Other (131) (131) (158) Total long-duration contract premiums 3,604 3,112 2,856 Total premiums $ 32,307 $ 30,626 $ 29,642 Reinsurance recoveries Individual life insurance and annuity business sold $ 259 $ 279 $ 301 Other 66 261 436 Total reinsurance recoveries $ 325 $ 540 $ 737 |
Variable Annuity [Member] | Guaranteed Minimum Death Benefit [Member] | |
Effects Of Reinsurance [Line Items] | |
Account value, net amount at risk, contractholder average age | (Dollars in millions, excludes impact of reinsurance ceded) 2017 2016 Account value $ 10,109 $ 10,650 Net amount at risk $ 2,112 $ 2,458 Average attained age of contractholders (weighted by exposure) 75 75 Number of contractholders 245,000 285,000 |
Variable Annuity [Member] | Guaranteed Minimum Income Benefit [Member] | |
Effects Of Reinsurance [Line Items] | |
Effects of Reinsurance | (In millions) Line of Business Reinsurer December 31, 2017 December 31, 2016 Collateral and Other Terms at December 31, 2017 GMIB Berkshire $ 359 $ 370 100% were secured by assets in a trust. Sun Life Assurance Company of Canada 221 227 Liberty Re (Bermuda) Ltd. 197 202 100% were secured by assets in a trust. Total GMIB recoverables reported in other assets $ 777 $ 799 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Financial assets and liabilities carried at fair value | As of December 31, (In millions) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total 2017 2016 2017 2016 2017 2016 2017 2016 Financial assets at fair value Fixed maturities Federal government and agency $ 253 $ 374 $ 526 $ 503 $ - $ - $ 779 $ 877 State and local government - - 1,287 1,435 - - 1,287 1,435 Foreign government - - 2,442 2,066 45 47 2,487 2,113 Corporate - - 17,658 15,552 430 498 18,088 16,050 Mortgage and other asset-backed - - 343 329 154 157 497 486 Total fixed maturities 253 374 22,256 19,885 629 702 23,138 20,961 Equity securities 412 396 73 113 103 74 588 583 Subtotal 665 770 22,329 19,998 732 776 23,726 21,544 Short-term investments - - 199 691 - - 199 691 GMIB assets - - - - 777 799 777 799 Other derivative assets - - 2 10 - - 2 10 Total financial assets at fair value, excluding separate accounts $ 665 $ 770 $ 22,530 $ 20,699 $ 1,509 $ 1,575 $ 24,704 $ 23,044 Financial liabilities at fair value GMIB liabilities $ - $ - $ - $ - $ 762 $ 780 $ 762 $ 780 Other derivative liabilities - - 25 5 - - 25 5 Total financial liabilities at fair value, excluding separate accounts $ - $ - $ 25 $ 5 $ 762 $ 780 $ 787 $ 785 |
Level 3 fixed maturities and equity securities priced using significant unobservable inputs | As of December 31, Fair Value Unobservable Input Unobservable Adjustment Range (Weighted Average) (Fair value in millions ) 2017 2016 2017 2016 Fixed maturities Mortgage and other asset-backed securities $ 154 $ 157 Liquidity 60 - 370 (90) bps 60 - 330 (90) bps Weighting of credit spreads 180 - 290 (230) bps 160 - 470 (230) bps Corporate and government fixed maturities 446 490 Liquidity 70 - 1,650 (300) bps 80 - 1,300 (340) bps Total fixed maturities 600 647 Equity securities Private equity securities 70 74 Price-to-EBITDA multiples 5.0 - 12.0 (8.9) 4.2 - 11.6 (8.5) Hybrid equity securities 33 - Liquidity 270 - 270 (270) bps Total equity securities 103 74 Subtotal 703 721 Securities not priced by the Company (1) 29 55 Total Level 3 securities $ 732 $ 776 (1) The fair values for these securities use single, unadjusted non-binding broker quotes not developed directly by the Company. |
Changes in level 3 financial assets and liabilities carried at fair value | (In millions) Fixed Maturities & Equity Securities GMIB Assets GMIB Liabilities 2017 2016 2017 2016 2017 2016 Balance at January 1, $ 776 $ 726 $ 799 $ 907 $ (780) $ (885) Gains (losses) included in shareholders' net income GMIB fair value gain/(loss) - - 31 (47) (31) 47 Other 25 (18) 1 - (5) (3) Total gains (losses) included in shareholders' net income 25 (18) 32 (47) (36) 44 Losses included in other comprehensive income (11) (1) - - - - Gains required to adjust future policy benefits for settlement annuities (1) 7 29 - - - - Purchases, sales, settlements Purchases 133 96 - - - - Sales (95) (140) - - - - Settlements (74) (74) (54) (61) 54 61 Total purchases, sales and settlements (36) (118) (54) (61) 54 61 Transfers into/(out of) Level 3 Transfers into Level 3 275 338 - - - - Transfers out of Level 3 (304) (180) - - - - Total transfers into/(out of) Level 3 (29) 158 - - - - Balance at December 31, $ 732 $ 776 $ 777 $ 799 $ (762) $ (780) Total gains (losses) included in shareholders' net income attributable to instruments held at the reporting date $ (9) $ (18) $ 32 $ (47) $ (36) $ 44 (1) Amounts do not accrue to shareholders. |
Separate account assets schedule | (In millions) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total 2017 2016 2017 2016 2017 2016 2017 2016 Guaranteed separate accounts (See Note 21) $ 215 $ 238 $ 308 $ 262 $ - $ - $ 523 $ 500 Non-guaranteed separate accounts (1) 1,536 1,368 5,298 4,885 292 331 7,126 6,584 Subtotal $ 1,751 $ 1,606 $ 5,606 $ 5,147 $ 292 $ 331 7,649 7,084 Non-guaranteed separate accounts priced at NAV as a practical expedient (1) 774 856 Total separate account assets $ 8,423 $ 7,940 (1) Non-guaranteed separate accounts included $3.9 billion as of December 31, 2017 and $3.7 billion as of December 31, 2016 in assets supporting the Company's pension plans, including $0.3 billion classified in Level 3 for both periods and $0.8 billion as of December 31, 2017 and $0.9 billion as of December 31, 2016 priced at NAV as a practical expedient for each year. |
Changes in level 3 separate account assets | (In millions) 2017 2016 Balance at January 1 $ 331 $ 297 Policyholder gains (losses) 34 2 Purchases, issuances, settlements Purchases 33 22 Sales (53) (11) Settlements (13) (18) Total purchases, sales and settlements (33) (7) Transfers into/(out of) Level 3 Transfers into Level 3 7 65 Transfers out of Level 3 (47) (26) Total transfers into/(out of) Level 3: (40) 39 Balance at December 31 $ 292 $ 331 |
Separate account assets priced at net asset value | Unfunded Data as of December 31, 2017 and 2016 Commitments Redemption Frequency Fair Value as of as of (if currently Redemption Notice (In millions) December 31, 2017 December 31, 2016 December 31, 2017 eligible) Period Securities partnerships $ 458 $ 424 $ 365 Not applicable Not applicable Real estate funds 239 231 - Quarterly 45-90 days Hedge funds 77 201 - Up to annually, varying by fund 30-90 days Total $ 774 $ 856 $ 365 |
Financial instruments not carried at fair value | (In millions) December 31, 2017 December 31, 2016 Classification in Fair Value Hierarchy Fair Value Carrying Value Fair Value Carrying Value Commercial mortgage loans Level 3 $ 1,766 $ 1,761 $ 1,682 $ 1,666 Contractholder deposit funds, excluding universal life products Level 3 $ 1,121 $ 1,119 $ 1,215 $ 1,212 Long-term debt, including current maturities, excluding capital leases Level 2 $ 5,730 $ 5,321 $ 5,460 $ 4,991 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Investment [Line Items] | |
Other long-term investments | Unfunded Fair value as of December 31, Commitments as of (In millions) 2017 2016 December 31, 2017 Real estate investments $ 591 $ 738 $ 270 Securities partnerships 863 650 876 Other 64 74 32 Total $ 1,518 $ 1,462 $ 1,178 |
Schedule of short-term investments and cash equivalents | December 31, December 31, (In millions) 2017 2016 Corporate securities $ 1,143 $ 2,234 Federal government securities $ 604 $ 378 Foreign government securities $ 159 $ 94 Money market funds $ 12 $ 11 |
Components of pre-tax net investment income | (In millions) 2017 2016 2015 Fixed maturities $ 946 $ 899 $ 879 Equity securities 14 4 3 Commercial mortgage loans 81 91 112 Policy loans 69 72 72 Other long-term investments 124 98 116 Short-term investments and cash 42 26 14 Total investment income 1,276 1,190 1,196 Less investment expenses 50 43 43 Net investment income $ 1,226 $ 1,147 $ 1,153 Net investment income for separate accounts (1) $ 225 $ 236 $ 262 (1) Net investment income for these investments is excluded from the Company's revenues. |
Realized gains and losses on investments | (In millions) 2017 2016 2015 Fixed maturities $ 25 $ 23 $ (82) Equity securities 52 (1) 36 Commercial mortgage loans (1) 4 (2) Other investments, including derivatives 161 143 105 Net realized investment gains, before income taxes 237 169 57 Less income taxes 81 60 17 Net realized investment gains $ 156 $ 109 $ 40 |
Realized investment gains that are excluded from the Company's revenues | (In millions) 2017 2016 2015 Separate accounts $ 157 $ 16 $ 117 Investment gains required to adjust future policy benefits for the run-off settlement annuity business $ 20 $ 63 $ 114 |
Sales information for available-for-sale fixed maturities and equity securities | (In millions) 2017 2016 2015 Proceeds from sales $ 2,012 $ 1,544 $ 1,555 Gross gains on sales $ 103 $ 83 $ 85 Gross losses on sales $ (18) $ (7) $ (13) |
Fixed Maturities [Member] | |
Investment [Line Items] | |
Investment maturities | Amortized Fair (In millions) Cost Value Due in one year or less $ 1,511 $ 1,522 Due after one year through five years 6,655 6,848 Due after five years through ten years 9,377 9,599 Due after ten years 3,855 4,672 Mortgage and other asset-backed securities 469 497 Total $ 21,867 $ 23,138 |
Gross unrealized appreciation (depreciation) on fixed maturities | Amortized Unrealized Unrealized Fair (In millions) Cost Appreciation Depreciation Value December 31, 2017 Federal government and agency $ 541 $ 239 $ (1) $ 779 State and local government 1,196 93 (2) 1,287 Foreign government 2,360 142 (15) 2,487 Corporate 17,301 868 (81) 18,088 Mortgage and other asset-backed 469 29 (1) 497 Total $ 21,867 $ 1,371 $ (100) $ 23,138 Investments supporting liabilities of the Company's run-off settlement annuity business (included in above total) (1) $ 2,200 $ 681 $ (2) $ 2,879 December 31, 2016 Federal government and agency $ 658 $ 223 $ (4) $ 877 State and local government 1,342 99 (6) 1,435 Foreign government 1,998 129 (14) 2,113 Corporate 15,483 716 (149) 16,050 Mortgage and other asset-backed 461 29 (4) 486 Total $ 19,942 $ 1,196 $ (177) $ 20,961 Investments supporting liabilities of the Company's run-off settlement annuity business (included in above total) (1) $ 2,196 $ 539 $ (15) $ 2,720 (1) Net unrealized appreciation for these investments is excluded from accumulated other comprehensive income. |
Fixed maturities with a decline in fair value from amortized cost | December 31, 2017 December 31, 2016 Fair Amortized Unrealized Number Fair Amortized Unrealized Number (Dollars in millions) Value Cost Depreciation of Issues Value Cost Depreciation of Issues One year or less Investment grade $ 3,272 $ 3,309 $ (37) 797 $ 4,346 $ 4,475 $ (129) 992 Below investment grade $ 543 $ 553 $ (10) 643 $ 724 $ 736 $ (12) 591 More than one year Investment grade $ 1,503 $ 1,549 $ (46) 373 $ 308 $ 327 $ (19) 53 Below investment grade $ 155 $ 162 $ (7) 42 $ 186 $ 203 $ (17) 28 |
Commercial Mortgage Loans [Member] | |
Investment [Line Items] | |
Commercial mortgage loans by property type and geographic region | (In millions) 2017 2016 Property type Office buildings $ 652 $ 592 Apartment buildings 608 428 Industrial 197 302 Hotels 141 205 Retail facilities 135 139 Other 28 - Total $ 1,761 $ 1,666 U.S. geographic region Pacific $ 841 $ 714 South Atlantic 210 268 New England 238 227 Central 237 239 Middle Atlantic 203 186 Mountain 32 32 Total $ 1,761 $ 1,666 |
Credit risk profile of commercial mortgage loan portfolio | (Dollars in millions) 2017 2016 Loan-to-Value Ratio Carrying Value Average Debt Service Coverage Ratio Average Loan-to-Value Ratio Carrying Value Average Debt Service Coverage Ratio Average Loan-to-Value Ratio Below 60% $ 1,109 2.03 $ 943 2.06 60% to 79% 652 2.24 702 1.89 80% to 100% - - 21 - Total $ 1,761 2.11 57% $ 1,666 1.95 57% |
Derivative Financial Instrume50
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | Interest Rate Swaps [Member] | |
Derivative [Line Items] | |
Schedule of derivative instruments | Fair Value Hedge of Long-Term Corporate Debt Notional Value (in millions) Type of instrument. Interest rate swap contracts 2017 2016 $ 750 $ 750 Purpose. To convert a portion of the interest rate exposure on the Company's long-term debt from fixed to variable rates. This more closely aligns the Company's interest expense with the interest income received on its cash equivalent and short-term investment balances. The variable rates are benchmarked to LIBOR. Terms of derivative instruments. The Company provides upfront margin and settles fair value changes and net interest between variable and fixed rates daily with a central clearinghouse. Accounting. Using fair value hedge accounting, the fair values of the swap contracts are reported in other assets, including other intangibles, or accounts payable, accrued expenses, and other liabilities. The critical terms of these swaps match those of the long-term debt being hedged. As a result, the carrying value of the hedged debt is adjusted to reflect changes in its fair value driven by LIBOR. The effects of those adjustments on other operating expenses are offset by the effects of corresponding changes in the swaps' fair value. The net impact from the hedge reported in other operating expenses reflects interest expense on the hedged debt at the variable interest rate. |
Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | Foreign Currency Swaps [Member] | |
Derivative [Line Items] | |
Schedule of derivative instruments | Fair Value Hedges of Fixed Maturity Bonds Notional Value (in millions) Type of instrument. Foreign currency swap contracts 2017 2016 $ 318 $ 78 Purpose. To hedge the foreign exchange related changes in fair values of the Company's fixed maturity bonds. Terms of derivative instruments. The Company periodically exchanges cash flows between two currencies for both principal and interest. Foreign currency swaps are Euros and British pounds and have terms for up to twelve years. Accounting. Using fair value hedge accounting, fair values are reported in other long-term investments or accounts payable, accrued expenses, and other liabilities. Changes in fair values of the swap contracts, as well as changes in the fair values of the hedged bonds attributable to the hedged risk, are reported in other realized investment gains and losses. |
Non designated [Member] | Forward Contracts [Member] | |
Derivative [Line Items] | |
Schedule of derivative instruments | Economic Hedges of a Fixed Maturity Bond Portfolio Notional Value (in millions) Type of instrument. Foreign currency forward contracts 2017 2016 $ 255 $ 149 Purpose. To hedge the foreign exchange related changes in fair values of a U.S. dollar-denominated fixed maturity bond portfolio to reflect the local currency for one of the Company's foreign subsidiaries. Terms of derivative instruments. The Company agrees to purchase South Korean won in exchange for U.S. dollars at a future date, generally within three months from the contracts' trade dates. Accounting. As these arrangements were not designated as accounting hedges, fair values are reported in short-term investments or accounts payable, accrued expenses, and other liabilities, and changes in fair values are reported in other realized investment gains and losses. |
Accumulated Other Comprehensi51
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Abstract] | |
Changes in accumulated other comprehensive income (loss) | (in millions) 2017 2016 2015 Securities Beginning balance $ 362 $ 418 $ 620 Appreciation (depreciation) on securities 35 (48) (389) Tax (expense) benefit (19) 6 157 Net appreciation (depreciation) on securities 16 (42) (232) Reclassification adjustment for (gains) losses included in shareholders' net income (net realized investment gains) (77) (22) 46 Tax benefit (expense) 27 8 (16) Net (gains) losses reclassified from AOCI to net income (50) (14) 30 Other comprehensive (loss), net of tax (34) (56) (202) Ending balance $ 328 $ 362 $ 418 Derivatives Beginning balance $ 3 $ 7 $ (8) (Depreciation) appreciation on derivatives (1) - 10 Tax (expense) - - (3) Net (depreciation) appreciation on derivatives (1) - 7 Reclassification adjustment for losses included in shareholders' net income (other operating expenses) 1 1 12 Reclassification adjustment for (gains) included in shareholders' net income (net realized investment gains) (4) (7) - Tax benefit (expense) 1 2 (4) Net (gains) losses reclassified from AOCI to net income (2) (4) 8 Other comprehensive (loss) income , net of tax (3) (4) 15 Ending balance $ - $ 3 $ 7 Translation of foreign currencies Beginning balance $ (369) $ (274) $ (62) Translation of foreign currencies 309 (95) (224) Tax (expense) benefit (5) - 12 Net translation of foreign currencies 304 (95) (212) Ending balance $ (65) $ (369) $ (274) Postretirement benefits liability Beginning balance $ (1,378) $ (1,401) $ (1,486) Reclassification adjustment for amortization of net losses from past experience and prior service costs (other operating expenses) 64 64 68 Reclassification adjustment for settlement (other operating expenses) 7 - - Tax (expense) benefit (24) (22) (23) Net adjustments reclassified from AOCI to net income 47 42 45 Valuation update (22) (29) 63 Tax benefit (expense) 8 10 (23) Net change due to valuation update (14) (19) 40 Other comprehensive income (loss), net of tax 33 23 85 Ending balance $ (1,345) $ (1,378) $ (1,401) |
Pension and Other Postretirem52
Pension and Other Postretirement Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Projected benefit obligations and assets | Pension Other Postretirement Benefits Benefits (In millions) 2017 2016 2017 2016 Change in benefit obligation Benefit obligation, January 1 $ 4,888 $ 4,934 $ 277 $ 295 Service cost 3 2 - - Interest cost 186 199 9 11 Loss from past experience 181 (1) 57 (1) 1 2 Benefits paid from plan assets (277) (284) (3) (3) Benefits paid — other (12) (20) (26) (28) Benefit obligation, December 31 4,969 4,888 258 277 Change in plan assets Fair value of plan assets, January 1 3,977 3,981 5 8 Actual return on plan assets 418 279 - - Benefits paid (277) (284) (3) (3) Contributions 163 1 - - Fair value of plan assets, December 31 4,281 3,977 2 5 Funded status $ (688) $ (911) $ (256) $ (272) (1) Loss in each year reflects a decrease in the discount rate, partially offset by a favorable change in the mortality assumption. |
Expected benefit payments | Pension Other Postretirement (In millions) Benefits Benefits 2018 $ 340 $ 27 2019 $ 334 $ 26 2020 $ 325 $ 25 2021 $ 325 $ 23 2022 $ 324 $ 22 2023-2027 $ 1,573 $ 87 |
Postretirement benefits liability adjustment included in AOCI | Pension Other Benefits Postretirement Benefits (In millions) 2017 2016 2017 2016 Unrecognized net (losses) $ (2,113) $ (2,163) $ - $ - Unrecognized prior service cost (6) (6) 46 49 Postretirement benefits liability adjustment $ (2,119) $ (2,169) $ 46 $ 49 |
Components of net defined benefit plan costs | Pension Benefits Other Postretirement Benefits (In millions) 2017 2016 2015 2017 2016 2015 Service cost $ 3 $ 2 $ 2 $ - $ - $ - Interest cost 186 199 194 9 11 11 Expected long-term return on plan assets (260) (249) (267) - - - Amortization of: Net loss from past experience 66 65 70 1 1 - Prior service cost - 1 - (3) (3) (3) Settlement loss 7 - - - - - Net plan cost $ 2 $ 18 $ (1) $ 7 $ 9 $ 8 |
Assumptions for pension and other postretirement benefit plans | 2017 2016 Discount rate: Pension benefit obligation 3.51% 3.95% Other postretirement benefit obligation 3.37% 3.70% Pension benefit cost 3.95% 4.17% Other postretirement benefit cost 3.70% 3.89% Expected long-term return on plan assets: Pension benefit cost 7.25% 7.25% Other postretirement benefit cost 5.00% 5.00% Mortality table for pension and postretirement benefit obligations RP 2014 with MP 2017 projection scale RP 2014 with MP 2016 projection scale |
Annual expense for 401(k) plans | (In millions) 2017 2016 2015 Expense $ 122 $ 113 $ 106 |
Pension Benefits [Member] | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Fair value of pension plan assets | (In millions) 2017 2016 Fixed maturities: Federal government and agency $ 1 $ 1 Corporate 1,124 1,125 Asset-backed 22 22 Fund investments 884 630 Total fixed maturities 2,031 1,778 Equity securities: Domestic 689 681 International, including funds and pooled separate accounts (1) 476 350 Total equity securities 1,165 1,031 Securities partnerships 457 424 Real estate funds, including pooled separate accounts (1) 300 289 Commercial mortgage loans 140 129 Hedge funds 73 196 Guaranteed deposit account contract 63 67 Cash equivalents and other current assets, net 52 63 Total pension assets at fair value $ 4,281 $ 3,977 (1) A pooled separate account has several participating benefit plans and each owns a share of the total pool of investments. |
Employee Incentive Plans (Table
Employee Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Employee Incentive Plan Aggregate Disclosures [Line Items] | |
Compensation cost | (In millions) 2017 2016 2015 Total compensation cost for shared-based awards $ 178 $ 128 $ 111 Tax benefits recognized $ 79 $ 57 $ 24 |
Information for stock options exercised | Options Options Outstanding Exercisable Number (in thousands) 6,156 3,894 Total intrinsic value (in millions) $ 630 $ 490 Weighted average exercise price $ 100.79 $ 77.36 Weighted average remaining contractual life 6.6 5.5 |
Black-Scholes option-pricing model assumptions | 2017 2016 2015 Dividend yield 0.0% 0.0% 0.0% Expected volatility 35.0% 35.0% 35.0% Risk-free interest rate 1.8% 1.2% 1.3% Expected option life 4.3 years 4.3 years 4.3 years Weighted average fair value of options $ 46.38 $ 42.01 $ 36.40 |
Status of, and changes in, common stock options | (Options in thousands) 2017 2016 2015 Weighted Weighted Weighted Average Average Average Options Exercise Price Options Exercise Price Options Exercise Price Outstanding - January 1 7,097 $ 82.01 6,433 $ 68.86 7,331 $ 51.84 Granted 1,230 $ 149.17 1,336 $ 139.20 1,410 $ 120.94 Exercised (2,072) $ 63.41 (577) $ 62.09 (2,146) $ 43.63 Expired or canceled (99) $ 138.41 (95) $ 117.18 (162) $ 86.04 Outstanding - December 31 6,156 $ 100.79 7,097 $ 82.01 6,433 $ 68.86 Options exercisable at year-end 3,894 $ 77.36 4,409 $ 58.36 3,414 $ 46.55 |
Status of, and changes in, restricted stock grants and units | (Awards in thousands) 2017 2016 2015 Weighted Average Fair Value at Award Date Weighted Average Fair Value at Award Date Weighted Average Fair Value at Award Date Grants/Units Grants/Units Grants/Units Outstanding - January 1 1,309 $ 97.78 1,642 $ 72.58 2,121 $ 53.59 Awarded 451 $ 155.21 315 $ 138.61 352 $ 121.93 Vested (409) $ 67.09 (591) $ 50.01 (736) $ 41.99 Forfeited (56) $ 121.74 (57) $ 92.51 (95) $ 68.31 Outstanding - December 31 1,295 $ 126.44 1,309 $ 97.78 1,642 $ 72.58 |
Status of, and changes in, strategic performance shares | 2017 2016 2015 Weighted Weighted Weighted Average Fair Value Average Fair Value Average Fair Value (Awards in thousands) Shares at Award Date Shares at Award Date Shares at Award Date Outstanding - January 1 942 $ 109.14 1,188 $ 81.68 1,547 $ 59.20 Awarded 275 $ 150.06 286 $ 139.05 311 $ 121.78 Vested (386) $ 78.91 (494) $ 60.15 (608) $ 45.51 Forfeited (53) $ 138.19 (38) $ 112.70 (62) $ 76.33 Outstanding - December 31 778 $ 136.57 942 $ 109.14 1,188 $ 81.68 |
Employee Stock Option [Member] | |
Employee Incentive Plan Aggregate Disclosures [Line Items] | |
Compensation cost | (In millions) 2017 2016 2015 Stock options compensation cost $ 52 $ 53 $ 42 |
Information for stock options exercised | (In millions) 2017 2016 2015 Intrinsic value of options exercised $ 218 $ 41 $ 179 Cash received for options exercised $ 131 $ 36 $ 94 Tax benefit from options exercised $ 41 $ 11 $ 42 |
Shares available for award / Fair value of vested shares | (In millions) 2017 2016 2015 Common shares available for award 14.0 6.8 8.6 |
Restricted Stock Grants And Units [Member] | |
Employee Incentive Plan Aggregate Disclosures [Line Items] | |
Compensation cost | (In millions) 2017 2016 2015 Restricted stock compensation cost $ 53 $ 40 $ 33 |
Shares available for award / Fair value of vested shares | (In millions) 2017 2016 2015 Fair value of vested restricted stock $ 62 $ 82 $ 92 |
Performance Shares [Member] | |
Employee Incentive Plan Aggregate Disclosures [Line Items] | |
Compensation cost | (In millions) 2017 2016 2015 Strategic performance shares compensation cost $ 40 $ 35 $ 36 |
Shares available for award / Fair value of vested shares | 2017 2016 2015 (Shares in thousands; $ in millions) Shares Fair Value Shares Fair Value Shares Fair Value Shares of Cigna common stock distributed upon SPS vesting 476 $ 70 768 $ 109 972 $ 119 |
Goodwill, Other Intangibles, 54
Goodwill, Other Intangibles, and Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill Other Intangibles And Property And Equipment [Abstract] | |
Goodwill activity | (In millions) 2017 2016 Balance at January 1, $ 5,980 $ 6,019 Goodwill acquired, net 154 1 Impact of foreign currency translation 30 (40) Balance at December 31, $ 6,164 $ 5,980 |
Components of other assets, including other intangbiles | Accumulated Net Carrying (In millions) Cost Amortization Value 2017 Customer relationships $ 1,280 $ 1,056 $ 224 Other 291 170 121 Total reported in other assets, including other intangibles 1,571 1,226 345 Value of business acquired (reported in deferred policy acquisition costs) 232 86 146 Total other intangible assets $ 1,803 $ 1,312 $ 491 2016 Customer relationships $ 1,256 $ 965 $ 291 Other 284 151 133 Total reported in other assets, including other intangibles 1,540 1,116 424 Value of business acquired (reported in deferred policy acquisition costs) 232 68 164 Total other intangible assets $ 1,772 $ 1,184 $ 588 |
Components of property and equipment | Accumulated Net Carrying (In millions) Cost Amortization Value 2017 Internal-use software $ 2,991 $ 2,184 $ 807 Other property and equipment Assets recorded under capital leases (1) 49 31 18 Other property and equipment not recorded under capital leases 1,573 835 738 Total other property and equipment 1,622 866 756 Total property and equipment $ 4,613 $ 3,050 $ 1,563 2016 Internal-use software $ 2,766 $ 1,997 $ 769 Other property and equipment Assets recorded under capital leases (1) 87 49 38 Other property and equipment not recorded under capital leases 1,511 782 729 Total other property and equipment 1,598 831 767 Total property and equipment $ 4,364 $ 2,828 $ 1,536 (1) Current capital lease agreements are for equipment and generally have a term of 48 months with the equipment expected to be returned to the lessor at termination. |
Components of depreciation and amortization | (In millions) 2017 2016 2015 Internal-use software $ 298 $ 303 $ 288 Other property and equipment (1) 153 158 160 Value of business acquired (reported in deferred policy acquisition costs) 18 20 18 Other intangibles (2) 97 129 119 Total depreciation and amortization $ 566 $ 610 $ 585 (1) Other property and equipment includes amortization on assets recorded under capital leases of $14 million in 2017, $20 million in 2016 and $22 million in 2015. (2) Includes the one-time $23 million bargain purchase gain on an acquisition in 2015. |
Pre-tax amortization for intangible assets, including internal-use software | (In millions) Pre-tax Amortization 2018 $ 387 2019 $ 299 2020 $ 177 2021 $ 114 2022 $ 88 |
Leases and Rentals (Tables)
Leases and Rentals (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Leases and Rentals [Abstract] | |
Net rental expenses for operating leases | (In millions) 2017 2016 2015 Net rental expense for operating leases $ 162 $ 151 $ 165 |
Future net minimum rental payments under non-cancelable operating leases | Scheduled Maturities (In millions) Long-term Debt (1) Capital Leases 2018 $ 131 $ 9 2019 $ - $ 8 2020 $ 550 $ 1 2021 $ 378 $ - 2022 $ 750 $ - Maturities after 2022 $ 3,550 $ - (1) Long-term debt maturity amounts exclude capital leases. (In millions) Operating Lease Payments 2018 $ 130 2019 $ 113 2020 $ 94 2021 $ 73 2022 $ 58 2023 and thereafter $ 114 |
Shareholders Equity and Divid56
Shareholders Equity and Dividend Restrictions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Shareholders Equity And Dividend Restrictions [Abstract] | |
Statutory net income and surplus | (In billions) 2017 2016 2015 Net income $ 2.5 $ 2.0 $ 2.1 Surplus $ 10.4 $ 8.5 $ 8.0 (In billions) 2017 Minimum statutory surplus required by regulators $ 3.2 Investments on deposit with regulatory bodies $ 0.6 Maximum dividend distributions permitted in 2018 without regulatory approval $ 1.6 Maximum loans to the parent company permitted without regulatory approval $ 1.3 Restricted GAAP net assets of Cigna Corporation's subsidiaries $ 12.0 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes [Abstract] | |
Componenets of income taxes | (In millions) 2017 2016 2015 Current taxes U.S. income taxes $ 974 $ 935 $ 1,076 Foreign income taxes 122 95 93 State income taxes 36 32 60 Total current taxes 1,132 1,062 1,229 Deferred taxes (benefits) U.S. income taxes 204 69 22 Foreign income taxes (benefits) 39 9 (6) State income taxes (benefits) (1) (4) 5 Total deferred taxes 242 74 21 Total income taxes $ 1,374 $ 1,136 $ 1,250 |
Reconciliation of total income taxes to the amount computed using the nominal federal income tax rate | (In millions) 2017 2016 2015 Tax expense at nominal rate $ 1,262 $ 1,043 $ 1,164 Effect of U.S. tax reform legislation 232 - - Effect of undistributed foreign earnings (70) (57) (67) Health insurance industry tax - 108 109 State income tax (net of federal income tax benefit) 23 18 42 Other (73) 24 2 Total income taxes $ 1,374 $ 1,136 $ 1,250 |
Deferred income tax assets and liabilities | (In millions) 2017 2016 Deferred tax assets Employee and retiree benefit plans $ 279 $ 481 Other insurance and contractholder liabilities 352 460 Net operating losses 105 128 Other accrued liabilities 101 166 Other 91 140 Deferred tax assets before valuation allowance 928 1,375 Valuation allowance for deferred tax assets (72) (87) Deferred tax assets, net of valuation allowance 856 1,288 Deferred tax liabilities Depreciation and amortization 496 781 Unrealized appreciation on investments and foreign currency translation 102 149 Other 225 54 Total deferred tax liabilities 823 984 Net deferred income tax assets $ 33 $ 304 |
Reconciliation of unrecognized tax benefits | (In millions) 2017 2016 2015 Balance at January 1, $ 31 $ 31 $ 26 Increase due to current year positions 7 10 7 Reduction related to settlements with taxing authorities (1) (2) - Reduction related to lapse of applicable statute of limitations (2) (8) (2) Balance at December 31, $ 35 $ 31 $ 31 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Information [Abstract] | |
Special item charges | (In millions) Description of Special Item and Financial Statement Line Item(s) After-tax Before-tax Year ended December 31, 2017 Charges associated with U.S. tax reform - Other operating expenses (see Note 20 for details) $ (36) $ (56) - Tax expense (see Note 20 for details) 232 - Total charges associated with U.S. tax reform $ 196 $ (56) Debt extinguishment costs (Other operating expenses, see Note 5 for details) $ 209 $ 321 Long-term care guaranty fund assessment (Other operating expenses, see Note 21(D) for details) $ 83 $ 129 Transaction-related costs (Other operating expenses, see Note 3 for details) $ 33 $ 126 Year ended December 31, 2016 Transaction-related costs (Other operating expenses, see Note 3 for details) $ 147 $ 166 Risk corridor allowance (Other operating expenses, see page ##EndofNotesPage in this Note for details) $ 80 $ 124 Charges associated with litigation matters (Other operating expenses, see Note 21(E) for a discussion of litigation charges) $ 25 $ 40 Year ended December 31, 2015 Debt extinguishment costs (Other operating expenses, see Note 5 for details) $ 65 $ 100 Transaction-related costs (Other operating expenses, see Note 3 for details) $ 57 $ 66 |
Summarized segment financial information | (In millions) Global Health Care Global Supplemental Benefits Group Disability and Life Other Operations Corporate Total 2017 Premiums $ 24,538 $ 3,684 $ 3,985 $ 112 $ (12) $ 32,307 Fees and other revenues (1) 4,722 66 106 10 (37) 4,867 Net investment income 378 122 350 346 30 1,226 Mail order pharmacy revenues 2,979 - - - - 2,979 Total operating revenues 32,617 3,872 4,441 468 (19) 41,379 Net realized investment gains (losses) 136 32 74 (5) - 237 Total revenues 32,753 3,904 4,515 463 (19) 41,616 Depreciation and amortization 477 54 30 1 4 566 Total benefits and expenses 29,440 3,407 4,044 316 803 38,010 Income (loss) before income taxes 3,313 497 471 147 (822) 3,606 Income taxes (benefits) and net loss attributable to noncontrolling interests 1,031 195 113 222 (192) 1,369 Shareholders' net income (loss) by segment 2,282 302 358 (75) (630) 2,237 After-tax adjustments to reconcile to adjusted income from operations Net realized investment (gains) losses (88) (24) (49) 4 1 (156) Amortization of other acquired intangible assets, net 48 18 - - - 66 Special items U.S. tax reform (137) 73 (39) 138 161 196 Debt extinguishment costs - - - - 209 209 Long-term care guaranty fund assessment 68 - 15 - - 83 Transaction-related costs - - - - 33 33 Adjusted income (loss) from operations $ 2,173 $ 369 $ 285 $ 67 $ (226) $ 2,668 (In millions) Global Health Care Global Supplemental Benefits Group Disability and Life Other Operations Corporate Total 2016 Premiums $ 23,295 $ 3,226 $ 4,002 $ 103 $ - $ 30,626 Fees and other revenues (1) 4,623 49 98 11 (21) 4,760 Net investment income 315 110 343 358 21 1,147 Mail order pharmacy revenues 2,966 - - - - 2,966 Total operating revenues 31,199 3,385 4,443 472 - 39,499 Net realized investment gains 119 (5) 59 (5) 1 169 Total revenues 31,318 3,380 4,502 467 1 39,668 Depreciation and amortization 526 54 28 1 1 610 Total benefits and expenses 28,467 3,052 4,273 369 528 36,689 Income (loss) before taxes 2,851 328 229 98 (527) 2,979 Income taxes (benefits) and net loss attributable to noncontrolling interests 1,100 60 65 30 (143) 1,112 Shareholders' net income (loss) by segment 1,751 268 164 68 (384) 1,867 After-tax adjustments to reconcile to adjusted income from operations Net realized investment (gains) (78) 6 (39) 2 - (109) Amortization of other acquired intangible assets, net 74 20 - - - 94 Special items Transaction-related costs - - - - 147 147 Risk corridor allowance 80 - - - - 80 Charges associated with litigation matters 25 - - - - 25 Adjusted income (loss) from operations $ 1,852 $ 294 $ 125 $ 70 $ (237) $ 2,104 (1) Includes the Company's share of the earnings of its joint ventures in China and India in the Global Supplemental Benefits segment. (In millions) Global Health Care Global Supplemental Benefits Group Disability and Life Other Operations Corporate Total 2015 Premiums $ 22,696 $ 3,000 $ 3,843 $ 103 $ - $ 29,642 Fees and other revenues (1) 4,357 46 91 13 (19) 4,488 Net investment income 340 103 337 369 4 1,153 Mail order pharmacy revenues 2,536 - - - - 2,536 Total operating revenues 29,929 3,149 4,271 485 (15) 37,819 Net realized investment gains 43 - 5 9 - 57 Total revenues 29,972 3,149 4,276 494 (15) 37,876 Depreciation and amortization 526 31 26 1 1 585 Total benefits and expenses 27,028 2,849 3,796 374 502 34,549 Income (loss) before taxes 2,944 300 480 120 (517) 3,327 Income taxes (benefits) and net income attributable to noncontrolling interests 1,150 33 152 40 (142) 1,233 Shareholders' net income (loss) by segment 1,794 267 328 80 (375) 2,094 After-tax adjustments to reconcile to adjusted income from operations Net realized investment (gains) (30) (1) (4) (5) - (40) Amortization of other acquired intangible assets, net (2) 84 (4) - - - 80 Special items Debt extinguishment costs - - - - 65 65 Transaction-related costs - - - - 57 57 Adjusted income (loss) from operations $ 1,848 $ 262 $ 324 $ 75 $ (253) $ 2,256 (1) Includes the Company's share of the earnings of its joint ventures in China and India in the Global Supplemental Benefits segment. (2) Includes a $23 million bargain purchase gain for a 2015 acquisition. |
Revenue from external customers | (In millions) 2017 2016 2015 Global Health Care premiums by product: Guaranteed cost $ 6,245 $ 4,610 $ 4,761 Experience-rated 2,741 2,383 2,329 Stop loss 3,483 3,082 2,701 International health care 1,934 1,859 1,834 Dental 1,791 1,586 1,392 Medicare 5,534 6,621 6,142 Medicaid 1,061 1,146 1,102 Medicare Part D 764 1,122 1,589 Other 985 886 846 Total premiums 24,538 23,295 22,696 Fees 4,503 4,368 4,107 Total Global Health Care premiums and fees 29,041 27,663 26,803 Disability 2,091 2,045 1,899 Life, Accident and Supplemental Health 5,704 5,300 5,054 Mail order pharmacy 2,979 2,966 2,536 Other 338 378 374 Total $ 40,153 $ 38,352 $ 36,666 |
Foreign and U.S. revenues from external customers | (In millions) 2017 2016 2015 United States $ 36,128 $ 34,672 $ 33,185 South Korea 1,892 1,666 1,521 All other foreign countries 2,133 2,014 1,960 Total $ 40,153 $ 38,352 $ 36,666 |
Quarterly Financial Data (Table
Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data | (In millions, except per share amounts) Three Months Ended March 31, June 30, September 30, December 31, Consolidated Results 2017 Total revenues $ 10,385 $ 10,318 $ 10,382 $ 10,531 Income before income taxes 890 1,134 824 758 Shareholders' net income 598 (1) 813 (1) 560 (1) 266 (1) Shareholders' net income per share 1 Basic 2.34 3.20 2.25 1.09 Diluted 2.30 3.15 2.21 1.07 2016 Total revenues $ 9,884 $ 9,960 $ 9,880 $ 9,944 Income before income taxes 819 813 742 605 Shareholders' net income 519 (1) 510 (1) 456 (1) 382 (1) Shareholders' net income per share 1 Basic 2.04 2.00 1.79 1.49 Diluted 2.00 1.97 1.76 1.47 Stock and dividend data 2017 Price range of common stock — high $ 154.83 $ 173.21 $ 188.36 $ 212.46 — low $ 133.52 $ 146.70 $ 166.81 $ 183.08 Dividends declared per common share $ 0.04 $ - $ - $ - 2016 Price range of common stock — high $ 147.93 $ 142.91 $ 148.99 $ 142.00 — low $ 123.54 $ 121.87 $ 123.53 $ 115.03 Dividends declared per common share $ 0.04 $ - $ - $ - (1) Shareholders' net income includes the following after-tax charges (benefits), described in Note 22 to the Consolidated Financial Statements: March 31, June 30, September 30, December 31, 2017 U.S. tax reform $ - $ - $ - $ 196 2017 Debt extinguishment costs - - 209 - 2017 Long-term care guaranty fund assessment 83 - - - 2017 Transaction-related costs 49 (47) 6 25 Total 2017 charges (benefits) $ 132 $ (47) $ 215 $ 221 2016 Risk corridor allowance $ - $ - $ - $ 80 2016 Transaction-related costs 36 26 46 39 2016 Charges associated with litigation matters - - 25 - Total 2016 charges $ 36 $ 26 $ 71 $ 119 |
Schedule I - Summary of Inves60
Schedule I - Summary of Investments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Investments, Other than Investments in Related Parties [Abstract] | |
Summary Of Investments Other Than Investments In Related Parties [Table Text Block] | Amount at which shown in (in millions) Fair the Consolidated Type of Investment Cost Value Balance Sheet Fixed maturities Bonds United States government and government agencies and authorities $ 541 $ 779 $ 779 States, municipalities and political subdivisions 1,196 1,287 1,287 Foreign governments 2,360 2,487 2,487 Public utilities 2,187 2,342 2,342 All other corporate bonds 15,107 15,739 15,739 Mortgage and other asset-backed 469 497 497 Redeemable preferred stocks 7 7 7 Total fixed maturities 21,867 23,138 23,138 Equity securities Common stocks Industrial, miscellaneous and all other 485 496 496 Non-redeemable preferred stocks 104 92 92 Total equity securities 589 588 588 Commercial mortgage loans on real estate 1,761 1,761 Policy loans 1,415 1,415 Other long-term investments 1,518 1,518 Short-term investments 199 199 Total investments $ 27,349 $ 28,619 |
Schedule II - Condensed Finan61
Schedule II - Condensed Financial Information of Registrant (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Condensed Financial Information of Cigna Corporation (Registrant) [Abstract] | |
Condensed Financial Information Of Parent Company Only, Statements Of Income | For the years ended December 31, (in millions) 2017 2016 2015 Operating expenses Interest $ 237 $ 244 $ 246 Intercompany interest 18 3 2 Debt extinguishment costs 321 - 100 Other 204 281 147 TOTAL OPERATING EXPENSES 780 528 495 Loss before income taxes (780) (528) (495) Income tax benefit (194) (146) (135) Loss of parent company (586) (382) (360) Equity in income of subsidiaries 2,823 2,249 2,454 SHAREHOLDERS' NET INCOME 2,237 1,867 2,094 Shareholders' other comprehensive income (loss) Net unrealized (depreciation) on securities (34) (56) (202) Net unrealized (depreciation) appreciation on derivatives (3) (4) 15 Net translation of foreign currencies 304 (95) (212) Postretirement benefits liability adjustment 33 23 85 Shareholders' other comprehensive income (loss): 300 (132) (314) SHAREHOLDERS' COMPREHENSIVE INCOME $ 2,537 $ 1,735 $ 1,780 See Notes to Financial Statements on the following pages. |
Condensed Financial Information Of Parent Company Only, Balance Sheets | As of December 31, (in millions) 2017 2016 Assets Cash and cash equivalents $ 9 $ 18 Short-term investments 63 57 Investments in subsidiaries 22,655 20,315 Intercompany receivable 200 173 Other assets 252 415 TOTAL ASSETS $ 23,179 $ 20,978 Liabilities Intercompany payable $ 2,980 $ 998 Short-term debt 231 257 Long-term debt 5,112 4,658 Other liabilities 1,121 1,342 TOTAL LIABILITIES 9,444 7,255 Shareholders' Equity Common stock (shares issued, 296; authorized, 600) 74 74 Additional paid-in capital 2,940 2,892 Accumulated other comprehensive loss (1,082) (1,382) Retained earnings 15,824 13,855 Less treasury stock, at cost (4,021) (1,716) TOTAL SHAREHOLDERS' EQUITY 13,735 13,723 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 23,179 $ 20,978 See Notes to Financ ial Statements on the following pages . |
Condensed Financial Information Of Parent Company Only, Statements Of Cash Flows | For the years ended December 31, (in millions) 2017 2016 2015 Cash Flows from Operating Activities Shareholders' net income $ 2,237 $ 1,867 $ 2,094 Adjustments to reconcile shareholders' net income to net cash provided by operating activities Equity in income of subsidiaries (2,823) (2,249) (2,454) Dividends received from subsidiaries 758 580 880 Other liabilities (224) (9) 112 Debt extinguishment costs 321 - 100 Other, net (1) 333 187 112 NET CASH PROVIDED BY OPERATING ACTIVITIES (1) 602 376 844 Cash Flows from Investing Activities Short-term investment purchased, net (6) (3) (54) Other, net (11) (8) (14) NET CASH (USED IN) INVESTING ACTIVITIES (17) (11) (68) Cash Flows from Financing Activities Net change in amounts due to (from) affiliates 1,955 (78) (161) Net change in short-term debt 100 (100) - Payments for debt extinguishment (313) - (87) Repayment of long-term debt (1,250) - (851) Net proceeds on issuance of long-term debt 1,581 - 894 Issuance of common stock 131 36 154 Common dividends paid (10) (10) (10) Repurchase of common stock (2,725) (139) (671) Tax withholding on stock compensation (1) (61) (72) (79) Other (2) - - NET CASH (USED IN) FINANCING ACTIVITIES (1) (594) (363) (811) Net (decrease) increase in cash and cash equivalents (9) 2 (35) Cash and cash equivalents, beginning of year 18 16 51 Cash and cash equivalents, end of year $ 9 $ 18 $ 16 (1) As required in adopting Accounting Standard Update ("ASU") 2016-09, the Company retrospectively reclassified $79 million cash payments from operating to financing activities in 2015. These payments were related to employee tax obligations associated with stock compensation. The comparable amounts reported in financing activities were $61 million in 2017 and $72 million in 2016. See Notes to Fi nancial Statements on the following pages . |
Schedule III - Supplementary 62
Schedule III - Supplementary Insurance Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Supplementary Insurance Information [Abstract] | |
Supplementary Insurance Information For Insurance Companies Disclosure [Table Text Block] | Deferred Future policy Medical costs policy benefits and payable and (in millions) acquisition contractholder unpaid Unearned Segment costs deposit funds claims (1) premiums Year Ended December 31, 2017 Global Health Care $ 15 $ 157 $ 2,719 $ 213 Global Supplemental Benefits 2,176 3,746 484 490 Group Disability and Life 1 1,686 4,491 7 Other Operations 45 12,647 193 14 Corporate - - - - Total $ 2,237 $ 18,236 $ 7,887 $ 724 Year Ended December 31, 2016 Global Health Care $ 16 $ 161 $ 2,532 $ 170 Global Supplemental Benefits 1,752 3,225 384 435 Group Disability and Life 1 1,786 4,342 13 Other Operations 49 12,934 191 16 Corporate - - - - Total $ 1,818 $ 18,106 $ 7,449 $ 634 Year Ended December 31, 2015 Global Health Care $ 11 $ 169 $ 2,355 $ 145 Global Supplemental Benefits 1,593 3,006 353 453 Group Disability and Life 1 1,714 4,006 13 Other Operations 54 13,033 215 18 Corporate - - - - Total $ 1,659 $ 17,922 $ 6,929 $ 629 (1) Unpaid claims balances reported in Corporate in 2015 have been retrospectively reclassified to the Group Disability and Life segment to conform to the presentation of unpaid claim balances in Note 8 to the Consolidated Financial Statements. These amounts represent elimination entries. Amortization of deferred Net policy Other investment Benefit acquisition operating Segment Premiums (2) income (3) expenses (2)(4) expenses expenses (5) Year Ended December 31, 2017 Global Health Care $ 24,538 $ 378 $ 19,967 $ 56 $ 9,417 Global Supplemental Benefits 3,684 122 2,033 259 1,115 Group Disability and Life 3,985 350 3,076 1 967 Other Operations 112 346 342 6 (32) Corporate (12) 30 (12) - 815 Total $ 32,307 $ 1,226 $ 25,406 $ 322 $ 12,282 Year Ended December 31, 2016 Global Health Care $ 23,295 $ 315 $ 19,009 $ 47 $ 9,411 Global Supplemental Benefits 3,226 110 1,784 238 1,030 Group Disability and Life 4,002 343 3,354 1 918 Other Operations 103 358 339 6 24 Corporate - 21 - - 528 Total $ 30,626 $ 1,147 $ 24,486 $ 292 $ 11,911 Year Ended December 31, 2015 Global Health Care $ 22,696 $ 340 $ 18,354 $ 53 $ 8,621 Global Supplemental Benefits 3,000 103 1,659 227 963 Group Disability and Life 3,843 337 2,934 1 861 Other Operations 103 369 343 5 26 Corporate - 4 - - 502 Total $ 29,642 $ 1,153 $ 23,290 $ 286 $ 10,973 Amounts presented are shown net of the effects of reinsurance. See Note 9 to the Consolidated Financial Statements included in this Form 10-K. Premiums in the Corporate segment represent the elimination of intercompany transactions. The allocation of net investment income is based upon the identification of certain portfolios with specific segments, the mean reserve method, or a combination of both. Benefit expenses include Global Health Care medical costs and other benefit expenses. Othe r operating expenses includes mail order pharmacy costs, other operating expenses, and net amortization of other intangible assets. It excludes amortization of deferred policy acquisition expenses. In 2017, other operating expenses in the Other Operation s segment includes a reduction of $56 million related to U.S. tax reform. See Note 20 to the Consolidated Financial Statements included in this Form 10-K. |
Schedule IV - Reinsurance (Tabl
Schedule IV - Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Supplemental Schedule of Reinsurance Premiums for Insurance Companies [Abstract] | |
Supplemental Schedule Of Reinsurance Premiums For Insurance Companies [Table Text Block] | Percentage Ceded to Assumed of amount Gross other from other Net assumed (in millions) amount companies companies amount to net Year Ended December 31, 2017 Life insurance in force $ 1,105,323 $ 49,172 $ 2,478 $ 1,058,629 0.2% Premiums Life insurance and annuities $ 2,307 $ 233 $ 22 $ 2,096 1.0% Accident and health insurance 30,095 191 307 30,211 1.0% Total $ 32,402 $ 424 $ 329 $ 32,307 1.0% Year Ended December 31, 2016 Life insurance in force $ 1,047,002 $ 55,399 $ 2,827 $ 994,430 0.3% Premiums Life insurance and annuities $ 2,881 $ 310 $ 22 $ 2,593 0.8% Accident and health insurance 27,874 203 362 28,033 1.3% Total $ 30,755 $ 513 $ 384 $ 30,626 1.3% Year Ended December 31, 2015 Life insurance in force $ 1,047,982 $ 72,208 $ 3,273 $ 979,047 0.3% Premiums Life insurance and annuities $ 2,886 $ 335 $ 106 $ 2,657 4.0% Accident and health insurance 26,926 235 294 26,985 1.1% Total $ 29,812 $ 570 $ 400 $ 29,642 1.3% |
Schedule V - Valuation and Qu64
Schedule V - Valuation and Qualifying Accounts and Reserves (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Valuation and Qualifying Accounts and Reserves [Abstract] | |
Schedule Of Valuation And Qualifying Accounts Disclosure [Table Text Block] | Charged Charged Balance at (Credited) to (Credited) Balance at (in millions) beginning costs and to other Other end Description of year expenses (1) accounts deductions (2) of year 2017 Investment asset valuation reserves Commercial mortgage loans $ 5 $ 1 $ - $ (6) $ - Allowance for doubtful accounts Premiums, accounts and notes receivable $ 200 $ 19 $ (11) $ (1) $ 207 Deferred tax asset valuation allowance $ 87 $ 11 $ (26) $ - $ 72 Reinsurance recoverables $ 3 $ - $ - $ - $ 3 2016 Investment asset valuation reserves Commercial mortgage loans $ 15 $ - $ - $ (10) $ 5 Allowance for doubtful accounts Premiums, accounts and notes receivable $ 75 $ 134 $ (8) $ (1) $ 200 Deferred tax asset valuation allowance $ 71 $ 21 $ (5) $ - $ 87 Reinsurance recoverables $ 3 $ - $ - $ - $ 3 2015 Investment asset valuation reserves Commercial mortgage loans $ 12 $ 7 $ - $ (4) $ 15 Allowance for doubtful accounts Premiums, accounts and notes receivable $ 101 $ (10) $ (15) $ (1) $ 75 Deferred tax asset valuation allowance $ 49 $ 8 $ 14 $ - $ 71 Reinsurance recoverables $ 4 $ - $ (1) $ - $ 3 (1) Amounts for 2017 and 2016 include risk corridor allowance. See Note 22 to the Consolidated Financial Statements for additional information. (2) Amounts for commercial mortgage loans primarily reflect charge-offs upon sales and repayments, as well as transfers to foreclosed real estate. |
Summary of Significant Accoun65
Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Accounting Standards Update 2014-09 [Member] | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Material effect on Company's financial statements | No |
Accounting Standards Update 2016-01 [Member] | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Current carrying value of certain limited partnership interests to be reported at fair value upon adoption of ASU 2016-01 | $ 203 |
Impact of new guidance on equity if adopted at reporting date | $ 59 |
Accounting Standards Update 2016-16 [Member] | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Material effect on Company's financial statements | No |
Accounting Standards Update 2017-01 [Member] | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Material effect on Company's financial statements | No |
Accounting Standards Update 2017-07 [Member] | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Material effect on Company's financial statements | No |
Accounting Standards Update 2017-12 [Member] | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Material effect on Company's financial statements | No |
Accounting Standards Update 2016-02 [Member] | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Material effect on Company's financial statements | Yes |
Summary of Significant Accoun66
Summary of Significant Accounting Policies - Significant Accounting Policies (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | |||
Allowance for doubtful accounts and unrecoverable reinsurance | $ 210 | $ 203 | |
Amortization for policy acquisition costs recorded primarily in other operating expense | $ 322 | $ 292 | $ 286 |
Percent of ASO fees at risk for performance guarantees | 11.00% | ||
Minimum [Member] | |||
Future policy benefits interest rate assumptions | 0.10% | ||
Maximum [Member] | |||
Future policy benefits interest rate assumptions | 9.00% | ||
Percent of ASO fees reimbursed for performance guarantees | 1.00% |
Mergers and Acquistions (Detail
Mergers and Acquistions (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Acquisitions and Dispositions [Abstract] | |||||||||||
Transaction-related costs, before tax | $ 126 | $ 166 | $ 66 | ||||||||
Transaction-related costs, after-tax | 92 | 147 | 57 | ||||||||
Tax (benefit) - previously non-deductible costs | (59) | 0 | 0 | ||||||||
Transaction-related costs, net | $ 25 | $ 6 | $ (47) | $ 49 | $ 39 | $ 46 | $ 26 | $ 36 | $ 33 | $ 147 | $ 57 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |||||||||||
Shareholders' net income | $ 266 | $ 560 | $ 813 | $ 598 | $ 382 | $ 456 | $ 510 | $ 519 | $ 2,237 | $ 1,867 | $ 2,094 |
Shares: | |||||||||||
Weighted average | 250,892 | 255,360 | 256,149 | ||||||||
Common stock equivalents | 4,180 | 4,287 | 4,443 | ||||||||
Total shares | 255,072 | 259,647 | 260,592 | ||||||||
EPS, basic | $ 1.09 | $ 2.25 | $ 3.2 | $ 2.34 | $ 1.49 | $ 1.79 | $ 2 | $ 2.04 | $ 8.92 | $ 7.31 | $ 8.17 |
EPS, effect of dilution | (0.15) | (0.12) | (0.13) | ||||||||
EPS, diluted | $ 1.07 | $ 2.21 | $ 3.15 | $ 2.3 | $ 1.47 | $ 1.76 | $ 1.97 | $ 2 | $ 8.77 | $ 7.19 | $ 8.04 |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||||||||||
Antidilutive options | 900 | 2,300 | 400 | ||||||||
Common shares held in Treasury | 52,178 | 39,276 | 52,178 | 39,276 | 39,601 |
Debt - Short-term and Long-term
Debt - Short-term and Long-term Debt (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Sep. 14, 2017 | |
Debt Instrument [Line Items] | |||||
Commercial paper | $ 100 | $ 0 | |||
Current maturities of long-term debt | 131 | 250 | |||
Other, including capital leases | 9 | 26 | |||
Total short-term debt | 240 | 276 | |||
Long-term debt, carrying value | 5,199 | 4,756 | |||
Repayment of long-term debt | $ 250 | 1,250 | 0 | $ 851 | |
$131 million, 6.35% Notes due 2018 [Member] | Uncollateralized Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, face value | $ 131 | $ 131 | |||
Long-term debt, stated interest rate | 6.35% | 6.35% | |||
Long-term debt, carrying value | $ 0 | $ 131 | |||
$250 million, 4.375% Notes due 2020 [Member] | Uncollateralized Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, face value | $ 250 | $ 250 | |||
Long-term debt, stated interest rate | 4.375% | 4.375% | |||
Long-term debt, carrying value | $ 249 | $ 252 | |||
$300 million, 5.125% Notes due 2020 [Member] | Uncollateralized Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, face value | $ 300 | $ 300 | |||
Long-term debt, stated interest rate | 5.125% | 5.125% | |||
Long-term debt, carrying value | $ 299 | $ 301 | |||
$78 million, 6.37% Notes due 2021 [Member] | Uncollateralized Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, face value | $ 78 | $ 78 | |||
Long-term debt, stated interest rate | 6.37% | 6.37% | |||
Long-term debt, carrying value | $ 78 | $ 78 | |||
$300 million, 4.5% Notes due 2021 [Member] | Uncollateralized Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, face value | $ 300 | $ 300 | |||
Long-term debt, stated interest rate | 4.50% | 4.50% | |||
Long-term debt, carrying value | $ 299 | $ 302 | |||
$750 million, 4% Notes due 2022 [Member] | Uncollateralized Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, face value | $ 750 | $ 750 | |||
Long-term debt, stated interest rate | 4.00% | 4.00% | |||
Long-term debt, carrying value | $ 745 | $ 744 | |||
$100 million, 7.65% Notes due 2023 [Member] | Uncollateralized Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, face value | $ 100 | $ 100 | |||
Long-term debt, stated interest rate | 7.65% | 7.65% | |||
Long-term debt, carrying value | $ 100 | $ 100 | |||
$17 million, 8.3% Notes due 2023 [Member] | Uncollateralized Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, face value | $ 17 | $ 17 | |||
Long-term debt, stated interest rate | 8.30% | 8.30% | |||
Long-term debt, carrying value | $ 17 | $ 17 | |||
$900 million, 3.25% Notes Due 2025 [Member] | Uncollateralized Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, face value | $ 900 | $ 900 | |||
Long-term debt, stated interest rate | 3.25% | 3.25% | |||
Long-term debt, carrying value | $ 894 | $ 893 | |||
$600 million, 3.05% Notes due 2027 | Uncollateralized Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, face value | $ 600 | ||||
Long-term debt, stated interest rate | 3.05% | ||||
Long-term debt, carrying value | $ 594 | 0 | $ 594 | ||
$259 million, 7.875% Debentures due 2027 [Member] | Uncollateralized Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, face value | $ 259 | $ 300 | |||
Long-term debt, stated interest rate | 7.875% | 7.875% | |||
Long-term debt, carrying value | $ 258 | $ 299 | |||
$45 million, 8.3% Step Down Notes due 2033 [Member] | Uncollateralized Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, face value | $ 45 | $ 83 | |||
Long-term debt, stated interest rate | 8.30% | 8.30% | |||
Long-term debt, carrying value | $ 45 | $ 82 | |||
$191 million, 6.15% Notes due 2036 [Member] | Uncollateralized Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, face value | $ 191 | $ 500 | |||
Long-term debt, stated interest rate | 6.15% | 6.15% | |||
Long-term debt, carrying value | $ 190 | $ 498 | |||
$121 million, 5.875% Notes due 2041 [Member] | Uncollateralized Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, face value | $ 121 | $ 300 | |||
Long-term debt, stated interest rate | 5.875% | 5.875% | |||
Long-term debt, carrying value | $ 119 | $ 296 | |||
$317 million, 5.375% Notes due 2042 [Member] | Uncollateralized Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, face value | $ 317 | $ 750 | |||
Long-term debt, stated interest rate | 5.375% | 5.375% | |||
Long-term debt, carrying value | $ 315 | $ 743 | |||
$1,000 million, 3.875% Notes due 2047 | Uncollateralized Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, face value | $ 1,000 | ||||
Long-term debt, stated interest rate | 3.875% | ||||
Long-term debt, carrying value | $ 988 | 0 | $ 987 | ||
Other, including capital leases [Member] | Uncollateralized Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, carrying value | $ 9 | $ 20 |
Debt - Long-tem Debt Issued (De
Debt - Long-tem Debt Issued (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Sep. 14, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | |||
Amount net of discount and fees | $ 5,199 | $ 4,756 | |
$600 million, 3.05% Notes due 2027 | Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, issuance date | Sep. 14, 2017 | ||
Long-term debt, face value | $ 600 | ||
Long-term debt, term | 10 years | ||
Long-term debt, maturity date | Oct. 15, 2027 | ||
Long-term debt, stated interest rate | 3.05% | ||
Effective interest rate | 3.183% | ||
Amount net of discount and fees | $ 594 | $ 594 | 0 |
Debt instrument redemption period end date | Jul. 15, 2027 | ||
Debt instrument redemption price percentage | 100.00% | ||
Basis points added to Treasury rate used in debt redemption discount calculation | 0.15% | ||
$1,000 million, 3.875% Notes due 2047 | Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, issuance date | Sep. 14, 2017 | ||
Long-term debt, face value | $ 1,000 | ||
Long-term debt, term | 30 years | ||
Long-term debt, maturity date | Oct. 15, 2047 | ||
Long-term debt, stated interest rate | 3.875% | ||
Effective interest rate | 3.951% | ||
Amount net of discount and fees | $ 988 | $ 987 | $ 0 |
Debt instrument redemption period end date | Apr. 15, 2047 | ||
Debt instrument redemption price percentage | 100.00% | ||
Basis points added to Treasury rate used in debt redemption discount calculation | 0.20% |
Debt - Extinguishment (Details)
Debt - Extinguishment (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Apr. 30, 2015 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Apr. 13, 2015 | |
Extinguishment of Debt [Line Items] | |||||||||
Extinguishment of Debt, Amount | $ 1,000 | ||||||||
Debt redeemed, including accrued interest and expenses | $ 955 | ||||||||
Debt extinguishment costs | $ 100 | 321 | $ 321 | $ 0 | $ 100 | ||||
Debt extinguishment costs, after-tax | $ 65 | $ 0 | $ 209 | $ 0 | $ 0 | $ 209 | $ 65 |
Debt - Revolving Credit and Let
Debt - Revolving Credit and Letter of Credit (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($)Banks | |
Line of Credit Facility [Line Items] | |
Debt outstanding | $ 5,400 |
Revolving Credit And Letter Of Credit Facility [Member] | |
Line of Credit Facility [Line Items] | |
Maximum borrowing capacity under credit facility | $ 1,500 |
Expiration date | Dec. 31, 2022 |
Number of participating banks | Banks | 15 |
Maximum borrowing capacity under option to increase | $ 2,000 |
Covenant terms | The agreement contains customary covenants and restrictions, including a financial covenant that the Company may not permit its leverage ratio – total consolidated debt to total consolidated capitalization (each as defined in the credit agreement) – to be greater than 50%. |
Leverage ratio covenant | 50.00% |
Borrowing capacity within maximum debt coverage covenant | $ 9,300 |
Debt covenant compliance | The Company was in compliance with its debt covenants as of December 31, 2017. |
Letter of Credit [Member] | |
Line of Credit Facility [Line Items] | |
Maximum borrowing capacity under credit facility | $ 500 |
Letters of credit outstanding | $ 11 |
Debt - Maturities and Interest
Debt - Maturities and Interest Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Maturities Of Debt Excluding Capital Leases [Abstract] | |||
Maturities of Debt in 2018 | $ 131 | ||
Maturities of Debt in 2019 | 0 | ||
Maturities of Debt in 2020 | 550 | ||
Maturities of Debt in 2021 | 378 | ||
Maturities of Debt in 2022 | 750 | ||
Maturities of Debt in years after 2022 | 3,550 | ||
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
Maturities of debt under capital lease arrangements in 2018 | 9 | ||
Maturities of debt under capital lease arrangements in 2019 | 8 | ||
Maturities of debt under capital lease arrangements in 2020 | 1 | ||
Maturities of debt under capital lease arrangements in 2021 | 0 | ||
Maturities of debt under capital lease arrangements in 2022 | 0 | ||
Maturities of debt under capital lease arrangements in years after 2022 | 0 | ||
Interest Expense [Abstract] | |||
Interest expense on long-term and short-term debt | $ 243 | $ 251 | $ 252 |
Common and Preferred Stock (Det
Common and Preferred Stock (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Common: Par value $.25, 600,000,000 shares authorized | |||
Outstanding - January 1 | 256,869,000 | 256,544,000 | 259,276,000 |
Issued for stock option exercises and other benefit plans | 2,761,000 | 1,110,000 | 2,751,000 |
Repurchase of common stock | (15,663,000) | (785,000) | (5,483,000) |
Outstanding - December 31 | 243,967,000 | 256,869,000 | 256,544,000 |
Treasury stock | 52,178,000 | 39,276,000 | 39,601,000 |
Issued - December 31 | 296,145,000 | 296,145,000 | 296,145,000 |
Common Stock, par value and shares authorized | |||
Common stock, par value per share | $ 0.25 | $ 0.25 | $ 0.25 |
Common stock shares authorized | 600,000,000 | 600,000,000 | 600,000,000 |
Preferred Stock [Abstract] | |||
Preferred Stock, Shares Authorized | 25,000,000 | 25,000,000 | 25,000,000 |
Preferred Stock, Par Value Per Share | $ 1 | $ 1 | $ 1 |
Preferred Stock, Shares Outstanding | 0 | 0 | 0 |
Global Health Care Medical Co75
Global Health Care Medical Costs Payable - Activity (Details) - Global Health Benefits Segment [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Medical Claims Payable Activity [Abstract] | |||
Beginning balance, unpaid claims, gross | $ 2,532 | $ 2,355 | $ 2,180 |
Less: Reinsurance and other amounts recoverable | 275 | 243 | 252 |
Beginning balance, unpaid claims, net | 2,257 | 2,112 | 1,928 |
Incurred claims related to: | |||
Current year | 20,233 | 19,087 | 18,564 |
Prior years | (266) | (78) | (210) |
Total incurred | 19,967 | 19,009 | 18,354 |
Paid claims related to: | |||
Current year | 17,979 | 17,052 | 16,588 |
Prior years | 1,791 | 1,812 | 1,582 |
Total paid | 19,770 | 18,864 | 18,170 |
Ending balance, unpaid claims, net | 2,454 | 2,257 | 2,112 |
Add: Reinsurance and other amounts recoverable | 265 | 275 | 243 |
Ending balance, unpaid claims, gross | 2,719 | 2,532 | $ 2,355 |
Total of incurred but not reported liabilities plus expected claim development on reported claims, including reported claims in process | 2,600 | 2,400 | |
Amounts due for physician incentives and other medical care expenses and services payable | $ 100 | $ 100 |
Global Health Care Medical Co76
Global Health Care Medical Costs Payable - Prior Year Development (Details) - Global Health Benefits Segment [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Abstract] | |||
Variance (unfavorable) in incurred costs related to prior years' claims payable | $ 266 | $ 78 | $ 210 |
Variance (unfavorable) in incurred costs related to prior years' claims payable, percentage | 1.40% | 0.40% | |
Net impact (unfavorable) of prior development on shareholders' net income | $ 112 | ||
Completion Factors [Member] | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Abstract] | |||
Variance (unfavorable) in incurred costs related to prior years' claims payable | $ 124 | $ 59 | |
Variance (unfavorable) in incurred costs related to prior years' claims payable, percentage | 0.70% | 0.30% | |
Medical Cost Trend [Member] | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Abstract] | |||
Variance (unfavorable) in incurred costs related to prior years' claims payable | $ 133 | $ 27 | |
Variance (unfavorable) in incurred costs related to prior years' claims payable, percentage | 0.70% | 0.10% | |
Other [Member] | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Abstract] | |||
Variance (unfavorable) in incurred costs related to prior years' claims payable | $ 9 | $ (8) | |
Variance (unfavorable) in incurred costs related to prior years' claims payable, percentage | 0.00% | 0.00% |
Global Health Care Medical Co77
Global Health Care Medical Costs Payable - Unpaid Claims Development (Details) - Global Health Benefits Segment [Member] Claims in Millions, $ in Millions | Dec. 31, 2017USD ($)Claims | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Claims Development [Line Items] | ||||
Incurred claims | $ 39,055 | |||
Cumulative Paid Claims | 36,642 | |||
Outstanding liabilities for the periods presented, net of reinsurance | 2,413 | |||
Outstanding liabilities prior to 2016 | 41 | |||
Liability for unpaid claims and claims expenses, net of reinsurance | 2,454 | $ 2,257 | $ 2,112 | $ 1,928 |
Reinsurance recoverable on unpaid claims | 265 | 275 | 243 | 252 |
Total liability for unpaid claims and claims expenses | $ 2,719 | 2,532 | $ 2,355 | $ 2,180 |
Minimum [Member] | ||||
Claims Development [Line Items] | ||||
Percent of health claims paid within one year | 95.00% | |||
Accident Year 2016 [Member] | ||||
Claims Development [Line Items] | ||||
Incurred claims | $ 18,822 | 19,087 | ||
Cumulative Paid Claims | 18,663 | $ 17,052 | ||
Liability for unpaid claims and claims expenses, net of reinsurance | $ 159 | |||
Claim frequency | Claims | 2.7 | |||
Accident Year 2017 [Member] | ||||
Claims Development [Line Items] | ||||
Incurred claims | $ 20,233 | |||
Cumulative Paid Claims | 17,979 | |||
Liability for unpaid claims and claims expenses, net of reinsurance | $ 2,254 | |||
Claim frequency | Claims | 3.3 |
Liabilities for Unpaid Claims78
Liabilities for Unpaid Claims and Claims Expenses - Liability Balance Details (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Group Disability and Life, Global Supplemental Beneftits and Other Operations [Member] | ||
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | ||
Total liability for unpaid claims and claims expenses | $ 5,168 | $ 4,917 |
Group Disability And Life Segment [Member] | ||
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | ||
Total liability for unpaid claims and claims expenses | 4,491 | 4,342 |
Global Supplemental Benefits Segment [Member] | ||
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | ||
Total liability for unpaid claims and claims expenses | 484 | 384 |
Other Operations Segment [Member] | ||
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | ||
Total liability for unpaid claims and claims expenses | $ 193 | $ 191 |
Liabilities for Unpaid Claims79
Liabilities for Unpaid Claims and Claims Expenses - Discounted Liabilities (Details) - USD ($) $ in Billions | Dec. 31, 2017 | Dec. 31, 2016 |
Short-duration Insurance Contracts Discounted Liabilities [Line Items] | ||
Discounted liabilities | $ 4 | $ 3.9 |
Aggregate amount of discount | $ 1 | $ 1.1 |
Minimum [Member] | ||
Short-duration Insurance Contracts Discounted Liabilities [Line Items] | ||
Range of discount rates | 4.50% | 3.30% |
Maximum [Member] | ||
Short-duration Insurance Contracts Discounted Liabilities [Line Items] | ||
Range of discount rates | 5.20% | 5.80% |
Liabilities for Unpaid Claims80
Liabilities for Unpaid Claims and Claims Expenses - Activity in Liabilities for Unpaid Claims and Claims Expenses (Details) - Group Disability and Life and Global Supplemental Benefits [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | |||
Beginning balance, unpaid claims, gross | $ 4,726 | $ 4,359 | $ 4,178 |
Less: Reinsurance and other amounts recoverable | 121 | 115 | 104 |
Beginning balance, unpaid claims, net | 4,605 | 4,244 | 4,074 |
Incurred claims related to: | |||
Current year | 4,341 | 4,258 | 3,813 |
Interest accretion | 163 | 161 | 163 |
All other prior years | (4) | 93 | (91) |
Total incurred | 4,500 | 4,512 | 3,885 |
Paid claims related to: | |||
Current year | 2,724 | 2,575 | 2,325 |
Prior years | 1,572 | 1,560 | 1,382 |
Total paid | 4,296 | 4,135 | 3,707 |
Acquisitions | 0 | 0 | 11 |
Foreign currency | 29 | (16) | (19) |
Ending balance, unpaid claims, net | 4,838 | 4,605 | 4,244 |
Add: Reinsurance and other amounts recoverable | 137 | 121 | 115 |
Ending balance, unpaid claims, gross | $ 4,975 | $ 4,726 | $ 4,359 |
Liabilities for Unpaid Claims81
Liabilities for Unpaid Claims and Claims Expenses - Long-term Disability Claims Development Tables (Details) - Long-term Disability [Member] Claims in Millions, $ in Millions | 12 Months Ended | |||||
Dec. 31, 2017USD ($)Claims | Dec. 31, 2016USD ($)Claims | Dec. 31, 2015USD ($)Claims | Dec. 31, 2014USD ($)Claims | Dec. 31, 2013USD ($)Claims | Dec. 31, 2012USD ($)Claims | |
Claims Development [Line Items] | ||||||
Incurred claims | $ 6,678 | |||||
Cumulative Paid Claims | 3,082 | |||||
Outstanding liabilities for the periods presented, net of reinsurance | 3,596 | |||||
All outstanding liabilities prior to 2012, net of reinsurance | 1,142 | |||||
Impact of discounting | (948) | |||||
Liability for unpaid claims and claims expenses, net of reinsurance | $ 3,790 | |||||
Claims frequency, methodology | The claims frequency metric used for the Company’s long-term disability line of business represents the number of unique claim events for which benefits have been approved and payments made. Claim events are identified using a unique claimant identifier and incurral date. Thus, if an individual has multiple claims for different disabling events (and therefore different incurral dates), each will be determined to be a unique claim event. However, if an individual receives multiple benefits under more than one policy (for example for supplemental disability benefits such as pension contribution benefits or survivor benefits), the Company treats this as a single claim occurrence because they related to the same claim event. Claims frequency metrics for the most recent year are expected to be low reflecting the long-term disability product features including waiting and elimination periods that result in delayed eligibility for contract benefits. Claims that did not result in a liability are not included in the frequency metric. | |||||
Accident Year 2012 [Member] | ||||||
Claims Development [Line Items] | ||||||
Incurred claims | $ 880 | $ 883 | $ 876 | $ 889 | $ 951 | $ 995 |
Cumulative Paid Claims | 621 | 571 | 504 | 429 | 288 | $ 81 |
Incurred But Not Reported Liabilities | 0 | |||||
Claim frequency | Claims | 21,180 | |||||
Accident Year 2013 [Member] | ||||||
Claims Development [Line Items] | ||||||
Incurred claims | 1,057 | 1,072 | 1,062 | 1,037 | 1,063 | |
Cumulative Paid Claims | 670 | 600 | 503 | 342 | $ 92 | |
Incurred But Not Reported Liabilities | 0 | |||||
Claim frequency | Claims | 23,516 | |||||
Accident Year 2014 [Member] | ||||||
Claims Development [Line Items] | ||||||
Incurred claims | 1,146 | 1,167 | 1,129 | 1,158 | ||
Cumulative Paid Claims | 667 | 575 | 379 | $ 111 | ||
Incurred But Not Reported Liabilities | 0 | |||||
Claim frequency | Claims | 25,281 | |||||
Accident Year 2015 [Member] | ||||||
Claims Development [Line Items] | ||||||
Incurred claims | 1,185 | 1,154 | 1,184 | |||
Cumulative Paid Claims | 603 | 417 | $ 114 | |||
Incurred But Not Reported Liabilities | 5 | |||||
Claim frequency | Claims | 25,609 | |||||
Accident Year 2016 [Member] | ||||||
Claims Development [Line Items] | ||||||
Incurred claims | 1,184 | 1,246 | ||||
Cumulative Paid Claims | 411 | $ 122 | ||||
Incurred But Not Reported Liabilities | 20 | |||||
Claim frequency | Claims | 24,722 | |||||
Accident Year 2017 [Member] | ||||||
Claims Development [Line Items] | ||||||
Incurred claims | 1,226 | |||||
Cumulative Paid Claims | 110 | |||||
Incurred But Not Reported Liabilities | $ 540 | |||||
Claim frequency | Claims | 10,569 |
Liabilities for Unpaid Claims82
Liabilities for Unpaid Claims and Claims Expenses - Annual Percentage Payout of Incurred Claims (Details) | Dec. 31, 2017 |
Long-term Disability [Member] | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
Average annual percentage payout of incurred claims in year one, net of reinsurance | 9.00% |
Average annual percentage payout of incurred claims in year two, net of reinsurance | 24.00% |
Average annual percentage payout of incurred claims in year three, net of reinsurance | 16.00% |
Average annual percentage payout of incurred claims in year four, net of reinsurance | 9.00% |
Average annual percentage payout of incurred claims in year five, net of reinsurance | 7.00% |
Average annual percentage payout of incurred claims in year six, net of reinsurance | 6.00% |
Other Short-duration Insurance Product Line [Member] | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
Average annual percentage payout of incurred claims in year one, net of reinsurance | 100.00% |
Liabilities for Unpaid Claims83
Liabilities for Unpaid Claims and Claims Expenses - Reconciliation to the Liability for Unpaid Claims and Claims Expense (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Group Disability and Life, Global Supplemental Beneftits and Other Operations [Member] | ||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||
Total liability for unpaid claims and claims expenses | $ 5,168 | $ 4,917 |
Group Disability And Life Segment [Member] | ||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||
Liability for unpaid claims and claims expenses, net of reinsurance | 4,389 | |
Reinsurance recoverable on unpaid claims | 102 | |
Total liability for unpaid claims and claims expenses | 4,491 | 4,342 |
Global Supplemental Benefits Segment [Member] | ||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||
Total liability for unpaid claims and claims expenses | 484 | 384 |
Other Operations Segment [Member] | ||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||
Total liability for unpaid claims and claims expenses | 193 | $ 191 |
Long-term Disability [Member] | ||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||
Liability for unpaid claims and claims expenses, net of reinsurance | 3,790 | |
Long-term Disability [Member] | Group Disability And Life Segment [Member] | ||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||
Liability for unpaid claims and claims expenses, net of reinsurance | 3,790 | |
Reinsurance recoverable on unpaid claims | 94 | |
Other Short-duration Insurance Product Line [Member] | Group Disability And Life Segment [Member] | ||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||
Liability for unpaid claims and claims expenses, net of reinsurance | 599 | |
Reinsurance recoverable on unpaid claims | $ 8 |
Reinsurance - Reinsurance Recov
Reinsurance - Reinsurance Recoverables (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2017USD ($)Reinsurers | Dec. 31, 2016USD ($) | |
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables | $ 6,046 | $ 6,478 |
Global Health Care, Global Supplemental Benefits, Group Disability and Life [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables | $ 454 | 478 |
Number of external reinsurers | Reinsurers | 90 | |
Maximum reinsurance recoverable from a single reinsurer | $ 80 | |
Global Health Care, Global Supplemental Benefits, Group Disability and Life [Member] | Maximum [Member] | ||
Ceded Credit Risk [Line Items] | ||
Minimum reinsurance recoverable from a single reinsurer | $ 1 | |
Global Health Care, Global Supplemental Benefits, Group Disability and Life [Member] | Minimum [Member] | Standard & Poor's Investment Grade [Member] | Reinsurance Recoverable [Member] | ||
Ceded Credit Risk [Line Items] | ||
Concentration Risk, Percentage | 70.00% | |
Global Health Care, Global Supplemental Benefits, Group Disability and Life [Member] | Ceded Credit Risk Secured [Member] | Reinsurance Recoverable [Member] | ||
Ceded Credit Risk [Line Items] | ||
Concentration Risk, Percentage | 11.00% | |
Acquisition, disposition or runoff activities [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables | $ 5,592 | 6,000 |
The Lincoln National Life Insurance Company And Lincoln Life And Annuity Of New York [Member] | Individual Life Insurance And Annuity (sold in 1998) [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables | 3,436 | 3,586 |
Berkshire [Member] | Guaranteed Minimum Death Benefits [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables | $ 928 | 1,085 |
Berkshire [Member] | Guaranteed Minimum Death Benefits [Member] | Ceded Credit Risk Secured [Member] | Reinsurance Recoverable [Member] | ||
Ceded Credit Risk [Line Items] | ||
Concentration Risk, Percentage | 100.00% | |
Prudential Retirement Insurance And Annuity Company [Member] | Retirement Benefits Business (sold in 2004) [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables | $ 850 | 921 |
Prudential Retirement Insurance And Annuity Company [Member] | Retirement Benefits Business (sold in 2004) [Member] | Ceded Credit Risk Secured [Member] | Reinsurance Recoverable [Member] | ||
Ceded Credit Risk [Line Items] | ||
Concentration Risk, Percentage | 100.00% | |
Great American Life Insurance Company [Member] | Supplemental Benefits Business (2012 acquistion) [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables | $ 283 | 297 |
Great American Life Insurance Company [Member] | Supplemental Benefits Business (2012 acquistion) [Member] | Ceded Credit Risk Secured [Member] | Reinsurance Recoverable [Member] | ||
Ceded Credit Risk [Line Items] | ||
Concentration Risk, Percentage | 100.00% | |
Other Retrocessionaires [Member] | Guaranteed Minimum Death Benefits [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables | $ 34 | 44 |
Other Retrocessionaires [Member] | Guaranteed Minimum Death Benefits [Member] | Ceded Credit Risk Secured [Member] | Reinsurance Recoverable [Member] | ||
Ceded Credit Risk [Line Items] | ||
Concentration Risk, Percentage | 100.00% | |
Other Retrocessionaires [Member] | Other run-off reinsurance [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables | $ 61 | $ 67 |
Other Retrocessionaires [Member] | Other run-off reinsurance [Member] | Ceded Credit Risk Secured [Member] | Reinsurance Recoverable [Member] | ||
Ceded Credit Risk [Line Items] | ||
Concentration Risk, Percentage | 100.00% |
Reinsurance - Effects of Reinsu
Reinsurance - Effects of Reinsurance (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Premiums Earned, Net [Abstract] | |||
Direct | $ 32,402 | $ 30,755 | $ 29,812 |
Assumed | 329 | 384 | 400 |
Ceded | (424) | (513) | (570) |
Premiums Earned Net | 32,307 | 30,626 | 29,642 |
Reinsurance Recoveries [Abstract] | |||
Reinsurance recoveries | 325 | 540 | 737 |
Individual Life Insurance And Annuity Business Sold [Member] | |||
Reinsurance Recoveries [Abstract] | |||
Reinsurance recoveries | 259 | 279 | 301 |
Other Subsegments [Member] | |||
Reinsurance Recoveries [Abstract] | |||
Reinsurance recoveries | 66 | 261 | 436 |
Short Duration Contracts [Member] | |||
Premiums Earned, Net [Abstract] | |||
Direct | 28,654 | 27,496 | 26,751 |
Assumed | 199 | 247 | 289 |
Ceded | (150) | (229) | (254) |
Premiums Earned Net | 28,703 | 27,514 | 26,786 |
Premiums Written, Net [Abstract] | |||
Direct premiums, written versus earned | |||
Assumed premiums, written versus earned | |||
Ceded premiums, written versus earned | |||
Net premiums, written versus earned | |||
Long Duration Contracts [Member] | |||
Premiums Earned, Net [Abstract] | |||
Direct | 3,748 | 3,259 | 3,061 |
Assumed | 130 | 137 | 111 |
Premiums Earned Net | 3,604 | 3,112 | 2,856 |
Long Duration Contracts [Member] | Individual Life Insurance And Annuity Business Sold [Member] | |||
Premiums Earned, Net [Abstract] | |||
Ceded | (143) | (153) | (158) |
Long Duration Contracts [Member] | Other Subsegments [Member] | |||
Premiums Earned, Net [Abstract] | |||
Ceded | $ (131) | $ (131) | $ (158) |
Reinsurance - Effective Exit of
Reinsurance - Effective Exit of GMDB and GMIB Business (Details) - Berkshire Hathway Life Insurance Company Of Nebraska [Member] - Variable Annuity [Member] - USD ($) $ in Billions | Dec. 31, 2017 | Dec. 31, 2014 |
Ceded Credit Risk [Line Items] | ||
Percent of future claim payments reinsured | 100.00% | |
Ceded Reinsurance Agreement, Coverage Limit, Amount Remaining | $ 3.4 |
Reinsurance - Account Value, Ne
Reinsurance - Account Value, Net Amount at Risk and Contractholders for GMDB Business (Details) - Variable Annuity [Member] - Guaranteed Minimum Death Benefit [Member] $ in Millions | 12 Months Ended | |
Dec. 31, 2017USD ($)Contractholders | Dec. 31, 2016USD ($)Contractholders | |
Guaranteed Minimum Death Benefits Account Value, Net Amount at Risk And Average Age Table [Line Items] | ||
Account value | $ 10,109 | $ 10,650 |
Net amount at risk | $ 2,112 | $ 2,458 |
Average attained age of contractholders (weighted by exposure) | 75 years | 75 years |
Number of contractholders | Contractholders | 245,000 | 285,000 |
Reinsurance - GMIB Reinsurers (
Reinsurance - GMIB Reinsurers (Details) - Guaranteed Minimum Income Benefit [Member] Reinsurers in Thousands, $ in Millions | 12 Months Ended | |
Dec. 31, 2017USD ($)Reinsurers | Dec. 31, 2016USD ($) | |
Ceded Credit Risk [Line Items] | ||
Annuitization election period | 30 days | |
Number of external reinsurers | Reinsurers | 3 | |
GMIB Assets | $ 777 | $ 799 |
Berkshire [Member] | ||
Ceded Credit Risk [Line Items] | ||
GMIB Assets | $ 359 | 370 |
Berkshire [Member] | Ceded Credit Risk Secured [Member] | GMIB Assets [Member] | ||
Ceded Credit Risk [Line Items] | ||
Concentration percentage | 100.00% | |
Sun Life Assurance Company Of Canada [Member] | ||
Ceded Credit Risk [Line Items] | ||
GMIB Assets | $ 221 | 227 |
Liberty Re (Bermuda) Ltd. [Member] | ||
Ceded Credit Risk [Line Items] | ||
GMIB Assets | $ 197 | $ 202 |
Liberty Re (Bermuda) Ltd. [Member] | Ceded Credit Risk Secured [Member] | GMIB Assets [Member] | ||
Ceded Credit Risk [Line Items] | ||
Concentration percentage | 100.00% |
Reinsurance - GMIB Guarantees (
Reinsurance - GMIB Guarantees (Details) - Guarantee Type, Other [Member] - Guaranteed Minimum Income Benefit [Member] - Variable Annuity [Member] $ in Millions | Dec. 31, 2017USD ($) |
Guarantee Obligations [Line Items] | |
Underlying mutual fund investment values | $ 822 |
Maximum Exposure, Undiscounted | $ 573 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and Financial Liabilities Carried at Fair Value (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Financial assets at fair value: | ||
Fixed maturities | $ 23,138 | $ 20,961 |
Equity securities | 588 | 583 |
Short-term investments | 199 | 691 |
Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 23,138 | 20,961 |
Equity securities | 588 | 583 |
Subtotal | 23,726 | 21,544 |
Short-term investments | 199 | 691 |
Total financial assets at fair value, excluding separate accounts | 24,704 | 23,044 |
Financial liabilities at fair value: | ||
Total financial liabilities at fair value | 787 | 785 |
Other derivatives [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Derivative assets | 2 | 10 |
Financial liabilities at fair value: | ||
Derivative liabilities | 25 | 5 |
Guaranteed Minimum Income Benefit [Member] | ||
Financial assets at fair value: | ||
Derivative assets | 777 | 799 |
Guaranteed Minimum Income Benefit [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Derivative assets | 777 | 799 |
Financial liabilities at fair value: | ||
Derivative liabilities | 762 | 780 |
Federal government and agency [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 779 | 877 |
State and local government [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 1,287 | 1,435 |
Foreign government [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 2,487 | 2,113 |
Corporate [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 18,088 | 16,050 |
Mortgage and other asset-backed [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 497 | 486 |
Fair Value Inputs Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 253 | 374 |
Equity securities | 412 | 396 |
Subtotal | 665 | 770 |
Short-term investments | 0 | 0 |
Total financial assets at fair value, excluding separate accounts | 665 | 770 |
Financial liabilities at fair value: | ||
Total financial liabilities at fair value | 0 | 0 |
Fair Value Inputs Level 1 [Member] | Other derivatives [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Derivative assets | 0 | 0 |
Financial liabilities at fair value: | ||
Derivative liabilities | 0 | 0 |
Fair Value Inputs Level 1 [Member] | Guaranteed Minimum Income Benefit [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Derivative assets | 0 | 0 |
Financial liabilities at fair value: | ||
Derivative liabilities | 0 | 0 |
Fair Value Inputs Level 1 [Member] | Federal government and agency [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 253 | 374 |
Fair Value Inputs Level 1 [Member] | State and local government [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 0 | 0 |
Fair Value Inputs Level 1 [Member] | Foreign government [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 0 | 0 |
Fair Value Inputs Level 1 [Member] | Corporate [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 0 | 0 |
Fair Value Inputs Level 1 [Member] | Mortgage and other asset-backed [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 0 | 0 |
Fair Value Inputs Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 22,256 | 19,885 |
Equity securities | 73 | 113 |
Subtotal | 22,329 | 19,998 |
Short-term investments | 199 | 691 |
Total financial assets at fair value, excluding separate accounts | 22,530 | 20,699 |
Financial liabilities at fair value: | ||
Total financial liabilities at fair value | 25 | 5 |
Fair Value Inputs Level 2 [Member] | Other derivatives [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Derivative assets | 2 | 10 |
Financial liabilities at fair value: | ||
Derivative liabilities | 25 | 5 |
Fair Value Inputs Level 2 [Member] | Guaranteed Minimum Income Benefit [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Derivative assets | 0 | 0 |
Financial liabilities at fair value: | ||
Derivative liabilities | 0 | 0 |
Fair Value Inputs Level 2 [Member] | Federal government and agency [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 526 | 503 |
Fair Value Inputs Level 2 [Member] | State and local government [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 1,287 | 1,435 |
Fair Value Inputs Level 2 [Member] | Foreign government [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 2,442 | 2,066 |
Fair Value Inputs Level 2 [Member] | Corporate [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 17,658 | 15,552 |
Fair Value Inputs Level 2 [Member] | Mortgage and other asset-backed [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 343 | 329 |
Fair Value Inputs Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 629 | 702 |
Equity securities | 103 | 74 |
Subtotal | 732 | 776 |
Short-term investments | 0 | 0 |
Total financial assets at fair value, excluding separate accounts | 1,509 | 1,575 |
Financial liabilities at fair value: | ||
Total financial liabilities at fair value | 762 | 780 |
Fair Value Inputs Level 3 [Member] | Other derivatives [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Derivative assets | 0 | 0 |
Financial liabilities at fair value: | ||
Derivative liabilities | 0 | 0 |
Fair Value Inputs Level 3 [Member] | Guaranteed Minimum Income Benefit [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Derivative assets | 777 | 799 |
Financial liabilities at fair value: | ||
Derivative liabilities | 762 | 780 |
Fair Value Inputs Level 3 [Member] | Federal government and agency [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 0 | 0 |
Fair Value Inputs Level 3 [Member] | State and local government [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 0 | 0 |
Fair Value Inputs Level 3 [Member] | Foreign government [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 45 | 47 |
Fair Value Inputs Level 3 [Member] | Corporate [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 430 | 498 |
Fair Value Inputs Level 3 [Member] | Mortgage and other asset-backed [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | $ 154 | $ 157 |
Fair Value Measurements - Level
Fair Value Measurements - Level 2 Financial Assets and Financial Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value Disclosures [Abstract] | ||
Percentage of investments in fixed maturities and equity securities classified as Level 2 | 94.00% | |
Maximum percentage of investments classified in Level 2 representing foreign bonds priced using unadjusted broker quotes | 1.00% | |
Other derivatives [Member] | ||
Derivative [Line Items] | ||
Adjustment for credit risk on derivatives assets | $ 0 | $ 0 |
Adjustment for credit risk on derivatives liabilities | $ 0 | $ 0 |
Fair Value Measurements - Lev92
Fair Value Measurements - Level 3 Financial Assets and Liabilities (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Fair Value Disclosures [Abstract] | ||
Percentage of investments in fixed maturities and equity securities classified in Level 3 | 3.00% | |
Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Fixed Maturities And Equity Securities | $ 23,726 | $ 21,544 |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Fixed Maturities And Equity Securities | 732 | 776 |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Unobservable Inputs Developed By Company [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Fixed Maturities And Equity Securities | 703 | 721 |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Securities not priced by the Company [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Fixed Maturities And Equity Securities | 29 | 55 |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Equity securities [Member] | Unobservable Inputs Developed By Company [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Fixed Maturities And Equity Securities | 103 | 74 |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Private equity securities [Member] | Unobservable Inputs Developed By Company [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Fixed Maturities And Equity Securities | $ 70 | $ 74 |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Private equity securities [Member] | Maximum [Member] | Unobservable Inputs Developed By Company [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Multiple of earnings before interest, taxes, depreciation and amortization (EBITDA) used to value equity securities. | 12 | 11.6 |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Private equity securities [Member] | Minimum [Member] | Unobservable Inputs Developed By Company [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Multiple of earnings before interest, taxes, depreciation and amortization (EBITDA) used to value equity securities. | 5 | 4.2 |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Private equity securities [Member] | Weighted Average [Member] | Unobservable Inputs Developed By Company [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Multiple of earnings before interest, taxes, depreciation and amortization (EBITDA) used to value equity securities. | 8.9 | 8.5 |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Hybrid equity securities [Member] | Unobservable Inputs Developed By Company [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Fixed Maturities And Equity Securities | $ 33 | $ 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Hybrid equity securities [Member] | Maximum [Member] | Unobservable Inputs Developed By Company [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Liquidity adjustment to discount rates used to value fixed maturities and equity securities | 2.70% | |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Hybrid equity securities [Member] | Minimum [Member] | Unobservable Inputs Developed By Company [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Liquidity adjustment to discount rates used to value fixed maturities and equity securities | 2.70% | |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Hybrid equity securities [Member] | Weighted Average [Member] | Unobservable Inputs Developed By Company [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Liquidity adjustment to discount rates used to value fixed maturities and equity securities | 2.70% | |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Fixed Maturities [Member] | Unobservable Inputs Developed By Company [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Fixed Maturities And Equity Securities | $ 600 | 647 |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Corporate and government fixed maturities [Member] | Unobservable Inputs Developed By Company [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Fixed Maturities And Equity Securities | $ 446 | $ 490 |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Corporate and government fixed maturities [Member] | Maximum [Member] | Unobservable Inputs Developed By Company [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Liquidity adjustment to discount rates used to value fixed maturities and equity securities | 16.50% | 13.00% |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Corporate and government fixed maturities [Member] | Minimum [Member] | Unobservable Inputs Developed By Company [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Liquidity adjustment to discount rates used to value fixed maturities and equity securities | 0.70% | 0.80% |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Corporate and government fixed maturities [Member] | Weighted Average [Member] | Unobservable Inputs Developed By Company [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Liquidity adjustment to discount rates used to value fixed maturities and equity securities | 3.00% | 3.40% |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Mortgage and other asset-backed securities [Member] | Unobservable Inputs Developed By Company [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Fixed Maturities And Equity Securities | $ 154 | $ 157 |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Mortgage and other asset-backed securities [Member] | Maximum [Member] | Unobservable Inputs Developed By Company [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Liquidity adjustment to discount rates used to value fixed maturities and equity securities | 3.70% | 3.30% |
Adjustment to discount rates used to value fixed maturities and equity securities for weighting of credit spreads | 2.90% | 4.70% |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Mortgage and other asset-backed securities [Member] | Minimum [Member] | Unobservable Inputs Developed By Company [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Liquidity adjustment to discount rates used to value fixed maturities and equity securities | 0.60% | 0.60% |
Adjustment to discount rates used to value fixed maturities and equity securities for weighting of credit spreads | 1.80% | 1.60% |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Mortgage and other asset-backed securities [Member] | Weighted Average [Member] | Unobservable Inputs Developed By Company [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Liquidity adjustment to discount rates used to value fixed maturities and equity securities | 0.90% | 0.90% |
Adjustment to discount rates used to value fixed maturities and equity securities for weighting of credit spreads | 2.30% | 2.30% |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in Level 3 Financial Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Fixed Maturities And Equity Securities [Member] | ||
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | $ 776 | $ 726 |
Gains (losses) included in shareholders' net income: | ||
GMIB fair value gain/(loss) | 0 | 0 |
Other | 25 | (18) |
Total gains (losses) included in shareholders' net income | 25 | (18) |
Gains (losses) included in other comprehensive income | (11) | (1) |
Gains (losses) required to adjust future policy benefits for settlement annuities | 7 | 29 |
Purchases, sales, and settlements: | ||
Purchases | 133 | 96 |
Sales | (95) | (140) |
Settlements | (74) | (74) |
Total purchases, sales, settlements | (36) | (118) |
Transfers into/(out of) Level 3: | ||
Transfers into Level 3 | 275 | 338 |
Transfers out of Level 3 | (304) | (180) |
Total transfers into/(out of) Level 3 | (29) | 158 |
Ending Balance | 732 | 776 |
Total gains (losses) included in income attributable to instruments held at the reporting date | (9) | (18) |
Derivative Financial Instruments, Assets [Member] | Guaranteed Minimum Income Benefit [Member] | ||
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | 799 | 907 |
Gains (losses) included in shareholders' net income: | ||
GMIB fair value gain/(loss) | 31 | (47) |
Other | 1 | 0 |
Total gains (losses) included in shareholders' net income | 32 | (47) |
Gains (losses) included in other comprehensive income | 0 | 0 |
Gains (losses) required to adjust future policy benefits for settlement annuities | 0 | 0 |
Purchases, sales, and settlements: | ||
Purchases | 0 | 0 |
Sales | 0 | 0 |
Settlements | (54) | (61) |
Total purchases, sales, settlements | (54) | (61) |
Transfers into/(out of) Level 3: | ||
Transfers into Level 3 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 |
Total transfers into/(out of) Level 3 | 0 | 0 |
Ending Balance | 777 | 799 |
Total gains (losses) included in income attributable to instruments held at the reporting date | $ 32 | $ (47) |
Fair Value Measurements - Cha94
Fair Value Measurements - Changes in Level 3 Financial Liabilities (Details) - Derivative Financial Instruments, Liabilities [Member] - Guaranteed Minimum Income Benefit [Member] - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ (780) | $ (885) |
Gains (losses) included in shareholders' net income: | ||
GMIB fair value gain/(loss) | (31) | 47 |
Other | (5) | (3) |
Total gains (losses) included in shareholders' net income | (36) | 44 |
Gains (losses) included in other comprehensive income | 0 | 0 |
Gains (losses) required to adjust future policy benefits for settlement annuities | 0 | 0 |
Purchases, sales, settlements: | ||
Purchases | 0 | 0 |
Sales | 0 | 0 |
Settlements | 54 | 61 |
Total purchases, sales, and settlements | 54 | 61 |
Transfers into/(out of) Level 3: | ||
Transfers into Level 3 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 |
Transfers into/(out of) Level 3 | 0 | 0 |
Ending balance | (762) | (780) |
Total gains (losses) included in income attributable to instruments held at the reporting date | $ (36) | $ 44 |
Fair Value Measurements - Separ
Fair Value Measurements - Separate Account Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Financial assets and financial liabilities carried at fair value [Line Items] | ||
Guaranteed separate accounts | $ 523 | $ 500 |
Non-guaranteed separate accounts | 7,126 | 6,584 |
Subtotal | 7,649 | 7,084 |
Non-guaranteed separate accounts priced at NAV as a practical expedient | 774 | 856 |
Total separate account assets | 8,423 | 7,940 |
Pension Benefits [Member] | ||
Financial assets and financial liabilities carried at fair value [Line Items] | ||
Non-guaranteed separate accounts priced at NAV as a practical expedient | 800 | 900 |
Non-guaranteed separate accounts | 3,900 | 3,700 |
Fair Value Inputs Level 1 [Member] | ||
Financial assets and financial liabilities carried at fair value [Line Items] | ||
Guaranteed separate accounts | 215 | 238 |
Non-guaranteed separate accounts | 1,536 | 1,368 |
Subtotal | 1,751 | 1,606 |
Fair Value Inputs Level 2 [Member] | ||
Financial assets and financial liabilities carried at fair value [Line Items] | ||
Guaranteed separate accounts | 308 | 262 |
Non-guaranteed separate accounts | 5,298 | 4,885 |
Subtotal | 5,606 | 5,147 |
Fair Value Inputs Level 3 [Member] | ||
Financial assets and financial liabilities carried at fair value [Line Items] | ||
Guaranteed separate accounts | 0 | 0 |
Non-guaranteed separate accounts | 292 | 331 |
Subtotal | 292 | 331 |
Fair Value Inputs Level 3 [Member] | Pension Benefits [Member] | ||
Financial assets and financial liabilities carried at fair value [Line Items] | ||
Non-guaranteed separate accounts | 300 | 300 |
Separate Account Assets [Member] | ||
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | 331 | 297 |
Policyholder gains (losses) | 34 | 2 |
Purchases, sales, and settlements: | ||
Purchases | 33 | 22 |
Sales | (53) | (11) |
Settlements | (13) | (18) |
Total purchases, sales, and settlements | (33) | (7) |
Transfers into/(out of) Level 3: | ||
Transfers into Level 3 | 7 | 65 |
Transfers out of Level 3 | (47) | (26) |
Total transfers into/(out of) Level 3 | (40) | 39 |
Ending Balance | $ 292 | $ 331 |
Fair Value Measurements - Sep96
Fair Value Measurements - Separate Account Assets Priced at NAV (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Unfunded Commitments | $ 1,178 | |
Separate Account Assets [Member] | ||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Unfunded Commitments | 365 | |
Separate Account Assets [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Fair Value | 774 | $ 856 |
Security Partnerships [Member] | Separate Account Assets [Member] | ||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Unfunded Commitments | $ 365 | |
Redemption Frequency | Not applicable | |
Security Partnerships [Member] | Separate Account Assets [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Fair Value | $ 458 | $ 424 |
Real Estate Funds [Member] | Separate Account Assets [Member] | ||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Unfunded Commitments | $ 0 | |
Redemption Frequency | Quarterly | |
Real Estate Funds [Member] | Separate Account Assets [Member] | Minimum [Member] | ||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Redemption Notice Period | 45 days | 45 days |
Real Estate Funds [Member] | Separate Account Assets [Member] | Maximum [Member] | ||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Redemption Notice Period | 90 days | 90 days |
Real Estate Funds [Member] | Separate Account Assets [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Fair Value | $ 239 | $ 231 |
Hedge Funds [Member] | Separate Account Assets [Member] | ||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Unfunded Commitments | $ 0 | |
Redemption Frequency | Up to annually, varying by fund | |
Hedge Funds [Member] | Separate Account Assets [Member] | Minimum [Member] | ||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Redemption Notice Period | 30 days | 30 days |
Hedge Funds [Member] | Separate Account Assets [Member] | Maximum [Member] | ||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Redemption Notice Period | 90 days | 90 days |
Hedge Funds [Member] | Separate Account Assets [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Fair Value | $ 77 | $ 201 |
Fair Value Measurements - Measu
Fair Value Measurements - Measured Under Certain Conditions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Financing Receivable, Impaired [Line Items] | ||
Realized investment losses on impaired real estate, partnership entities, and commercial mortgage loans, after-tax | ||
Maximum [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Impaired real estate, partnership entities, and commercial mortgage loans as a percent of total investments | 1.00% | 1.00% |
Fair Value Measurements - Not C
Fair Value Measurements - Not Carried at Fair Value (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Commercial Mortgage Loans | $ 1,761 | $ 1,666 |
Percentage of contractholder deposit funds that can be withdrawn at any time | 70.00% | |
Estimate Of Fair Value Fair Value Disclosure [Member] | Fair Value Inputs Level 2 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Long-term debt, including current maturities, excluding capital leases | $ 5,730 | 5,460 |
Estimate Of Fair Value Fair Value Disclosure [Member] | Fair Value Inputs Level 3 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Commercial Mortgage Loans | 1,766 | 1,682 |
Contractholder deposit funds, excluding universal life products | 1,121 | 1,215 |
Carrying Reported Amount Fair Value Disclosure [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Commercial Mortgage Loans | 1,761 | 1,666 |
Contractholder deposit funds, excluding universal life products | 1,119 | 1,212 |
Long-term debt, including current maturities, excluding capital leases | $ 5,321 | $ 4,991 |
Fair Value Measurements - Off-B
Fair Value Measurements - Off-Balance Sheet Financial Instruments (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value Off Balance Sheet Risks Disclosure Information [Line Items] | ||
Fair value of off-balance-sheet financial assets | ||
Fair value of off-balance-sheet financial liabilities |
Investments - Hybrid Securities
Investments - Hybrid Securities (Details) - Equity securities [Member] - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Investment [Line Items] | ||
Hybrid securities | $ 49 | $ 36 |
Hybrid instruments, cost | $ 61 | $ 49 |
Investments - Fixed Maturities
Investments - Fixed Maturities by Contractual Maturity Periods (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Amortized Cost: | ||
Due in one year or less | $ 1,511 | |
Due after one year through five years | 6,655 | |
Due after five years through ten years | 9,377 | |
Due after ten years | 3,855 | |
Mortgage and other asset-backed securities | 469 | |
Amortized Cost | 21,867 | $ 19,942 |
Fair Value: | ||
Due in one year or less | 1,522 | |
Due after one year through five years | 6,848 | |
Due after five years through ten years | 9,599 | |
Due after ten years | 4,672 | |
Mortgage and other asset-backed securities | 497 | |
Total fair value | $ 23,138 |
Investments - Gross Unrealized
Investments - Gross Unrealized Appreciation (Depreciation) on Fixed Maturities (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 21,867 | $ 19,942 |
Unrealized Appreciation | 1,371 | 1,196 |
Unrealized (Depreciation) | (100) | (177) |
Total Fair Value | 23,138 | 20,961 |
Run-off Settlement Annuity Business [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 2,200 | 2,196 |
Unrealized Appreciation | 681 | 539 |
Unrealized (Depreciation) | (2) | (15) |
Total Fair Value | 2,879 | 2,720 |
Fixed Maturities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Commitments to make additional investments | 118 | |
Federal government and agency [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 541 | 658 |
Unrealized Appreciation | 239 | 223 |
Unrealized (Depreciation) | (1) | (4) |
Total Fair Value | 779 | 877 |
State and local government [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 1,196 | 1,342 |
Unrealized Appreciation | 93 | 99 |
Unrealized (Depreciation) | (2) | (6) |
Total Fair Value | 1,287 | 1,435 |
Foreign government [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 2,360 | 1,998 |
Unrealized Appreciation | 142 | 129 |
Unrealized (Depreciation) | (15) | (14) |
Total Fair Value | 2,487 | 2,113 |
Corporate [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 17,301 | 15,483 |
Unrealized Appreciation | 868 | 716 |
Unrealized (Depreciation) | (81) | (149) |
Total Fair Value | 18,088 | 16,050 |
Mortgage and other asset-backed [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 469 | 461 |
Unrealized Appreciation | 29 | 29 |
Unrealized (Depreciation) | (1) | (4) |
Total Fair Value | $ 497 | $ 486 |
Investments - Securities with a
Investments - Securities with a Decline in Fair Value (Details) $ in Millions | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Investment Grade [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Fair value, one year or less | $ 4,346 | |
Fair value, more than one year | 308 | |
Amortized cost, one year or less | 4,475 | |
Amortized cost, more than one year | 327 | |
Unrealized depreciation, one year or less | (129) | |
Unrealized depreciation, more than one year | $ (19) | |
Investment Grade [Member] | One Year Or Less [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Number of issues, total | 992 | |
Investment Grade [Member] | More Than One Year [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Number of issues, total | 53 | |
Below Investment Grade [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Fair value, one year or less | $ 724 | |
Fair value, more than one year | 186 | |
Amortized cost, one year or less | 736 | |
Amortized cost, more than one year | 203 | |
Unrealized depreciation, one year or less | (12) | |
Unrealized depreciation, more than one year | $ (17) | |
Below Investment Grade [Member] | One Year Or Less [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Number of issues, total | 591 | |
Below Investment Grade [Member] | More Than One Year [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Number of issues, total | 28 | |
Fixed Maturities [Member] | Investment Grade [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Fair value, one year or less | $ 3,272 | |
Fair value, more than one year | 1,503 | |
Amortized cost, one year or less | 3,309 | |
Amortized cost, more than one year | 1,549 | |
Unrealized depreciation, one year or less | (37) | |
Unrealized depreciation, more than one year | $ (46) | |
Fixed Maturities [Member] | Investment Grade [Member] | One Year Or Less [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Number of issues, total | 797 | |
Fixed Maturities [Member] | Investment Grade [Member] | More Than One Year [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Number of issues, total | 373 | |
Fixed Maturities [Member] | Below Investment Grade [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Fair value, one year or less | $ 543 | |
Fair value, more than one year | 155 | |
Amortized cost, one year or less | 553 | |
Amortized cost, more than one year | 162 | |
Unrealized depreciation, one year or less | (10) | |
Unrealized depreciation, more than one year | $ (7) | |
Fixed Maturities [Member] | Below Investment Grade [Member] | One Year Or Less [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Number of issues, total | 643 | |
Fixed Maturities [Member] | Below Investment Grade [Member] | More Than One Year [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Number of issues, total | 42 |
Investments - Commerical Mortga
Investments - Commerical Mortgage Loans by Property Type and Geographic Region (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Mortgage Loans on Real Estate [Line Items] | ||
Commercial Mortgage Loans | $ 1,761 | $ 1,666 |
Commercial Mortgage Loans [Member] | ||
Mortgage Loans on Real Estate [Line Items] | ||
Commitments to make additional investments | 21 | |
Pacific Region [Member] | ||
Mortgage Loans on Real Estate [Line Items] | ||
Commercial Mortgage Loans | 841 | 714 |
South Atlantic Region [Member] | ||
Mortgage Loans on Real Estate [Line Items] | ||
Commercial Mortgage Loans | 210 | 268 |
New England Region [Member] | ||
Mortgage Loans on Real Estate [Line Items] | ||
Commercial Mortgage Loans | 238 | 227 |
Central Region [Member] | ||
Mortgage Loans on Real Estate [Line Items] | ||
Commercial Mortgage Loans | 237 | 239 |
Middle Atlantic [Member] | ||
Mortgage Loans on Real Estate [Line Items] | ||
Commercial Mortgage Loans | 203 | 186 |
Mountain [Member] | ||
Mortgage Loans on Real Estate [Line Items] | ||
Commercial Mortgage Loans | 32 | 32 |
Office Buildings [Member] | ||
Mortgage Loans on Real Estate [Line Items] | ||
Commercial Mortgage Loans | 652 | 592 |
Apartment Buildings [Member] | ||
Mortgage Loans on Real Estate [Line Items] | ||
Commercial Mortgage Loans | 608 | 428 |
Industrial [Member] | ||
Mortgage Loans on Real Estate [Line Items] | ||
Commercial Mortgage Loans | 197 | 302 |
Hotels [Member] | ||
Mortgage Loans on Real Estate [Line Items] | ||
Commercial Mortgage Loans | 141 | 205 |
Retail Facilities [Member] | ||
Mortgage Loans on Real Estate [Line Items] | ||
Commercial Mortgage Loans | 135 | 139 |
Other Property [Member] | ||
Mortgage Loans on Real Estate [Line Items] | ||
Commercial Mortgage Loans | $ 28 | $ 0 |
Investments - Commercial Mortga
Investments - Commercial Mortgage Loan Maturities (Details) | Dec. 31, 2017 |
Investments: | |
Percentage of commercial mortage loan portfolio scheduled to mature in 2022 or thereafter | 86.00% |
Investments - Credit Risk Profi
Investments - Credit Risk Profile, Commercial Mortgage Loans (Details) | 12 Months Ended | |
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Financing Receivable, Recorded Investment [Line Items] | ||
Commercial mortgage loan | $ 1,761,000,000 | $ 1,666,000,000 |
Weighted Average [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Average Debt Service Coverage Ratio | 2.11 | 1.95 |
Average Loan-to-Value Ratio | 57.00% | 57.00% |
Below 60% [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Commercial mortgage loan | $ 1,109,000,000 | $ 943,000,000 |
Below 60% [Member] | Weighted Average [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Average Debt Service Coverage Ratio | 2.03 | 2.06 |
60% to 79% [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Commercial mortgage loan | $ 652,000,000 | $ 702,000,000 |
60% to 79% [Member] | Weighted Average [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Average Debt Service Coverage Ratio | 2.24 | 1.89 |
80% to 100% [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Commercial mortgage loan | $ 0 | $ 21,000,000 |
80% to 100% [Member] | Weighted Average [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Average Debt Service Coverage Ratio | 0 | 0 |
Investments - Impaired Commerci
Investments - Impaired Commercial Mortgage Loans (Details) - Mortgage Loans on Real Estate [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Financing Receivable, Impaired [Line Items] | ||
Impaired commercial mortgage loans, gross | ||
Impaired commercial mortgage loans, reserves | ||
Average recorded investment in impaired mortgage loans | ||
Interest income on impaired commercial mortgage loans |
Investments - Other Long-Term I
Investments - Other Long-Term Investments (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Other Long Term Investments [Line Items] | ||
Percentage of the committed amounts expected to be disbursed in the next fiscal year | 31.00% | |
Other long-term investments | $ 1,518 | $ 1,462 |
Unfunded Commitments | 1,178 | |
Real Estate Entities [Member] | ||
Other Long Term Investments [Line Items] | ||
Other long-term investments | 591 | 738 |
Unfunded Commitments | 270 | |
Security Partnerships [Member] | ||
Other Long Term Investments [Line Items] | ||
Other long-term investments | 863 | 650 |
Unfunded Commitments | 876 | |
Other Long Term Investments [Member] | ||
Other Long Term Investments [Line Items] | ||
Other long-term investments | 64 | $ 74 |
Unfunded Commitments | $ 32 |
Investments - Short-Term Invest
Investments - Short-Term Investments and Cash Equivalents (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Corporate Securities [Member] | ||
Short Term Investments And Cash Equivalents [Line Items] | ||
Short-term investments and cash equivalents | $ 1,143 | $ 2,234 |
Federal goverment securities | ||
Short Term Investments And Cash Equivalents [Line Items] | ||
Short-term investments and cash equivalents | 604 | 378 |
Foreign government [Member] | ||
Short Term Investments And Cash Equivalents [Line Items] | ||
Short-term investments and cash equivalents | 159 | 94 |
Money Market Funds [Member] | ||
Short Term Investments And Cash Equivalents [Line Items] | ||
Short-term investments and cash equivalents | $ 12 | $ 11 |
Investments - Concentration of
Investments - Concentration of Risk (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Shareholders' Equity [Member] | Investments [Member] | Maximum [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 10.00% | 10.00% |
Investments - Net Investment In
Investments - Net Investment Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule Of Investment Income Reported Amounts By Category [Line Items] | |||
Gross investment income | $ 1,276 | $ 1,190 | $ 1,196 |
Less: investment expenses | 50 | 43 | 43 |
Net investment income | 1,226 | 1,147 | 1,153 |
Net investment income for separate accounts | 225 | 236 | 262 |
Non-income producing real estate investments and securities partnerships, carrying value | 191 | 220 | |
Fixed Maturities [Member] | |||
Schedule Of Investment Income Reported Amounts By Category [Line Items] | |||
Gross investment income | 946 | 899 | 879 |
Equity securities [Member] | |||
Schedule Of Investment Income Reported Amounts By Category [Line Items] | |||
Gross investment income | 14 | 4 | 3 |
Commercial Mortgage Loans [Member] | |||
Schedule Of Investment Income Reported Amounts By Category [Line Items] | |||
Gross investment income | 81 | 91 | 112 |
Policy Loans [Member] | |||
Schedule Of Investment Income Reported Amounts By Category [Line Items] | |||
Gross investment income | 69 | 72 | 72 |
Other Long Term Investments [Member] | |||
Schedule Of Investment Income Reported Amounts By Category [Line Items] | |||
Gross investment income | 124 | 98 | 116 |
Short-term investments and cash [Member] | |||
Schedule Of Investment Income Reported Amounts By Category [Line Items] | |||
Gross investment income | $ 42 | $ 26 | $ 14 |
Investments - Realized Investme
Investments - Realized Investment Gains and Losses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Realized Gains (Losses) on Investments [Line Items] | |||
Realized investment gains (losses) before income taxes | $ 237 | $ 169 | $ 57 |
Less income taxes (benefits) | 81 | 60 | 17 |
Net realized investment gains (losses) | 156 | 109 | 40 |
Fixed Maturities [Member] | |||
Realized Gains (Losses) on Investments [Line Items] | |||
Realized investment gains (losses) before income taxes | 25 | 23 | (82) |
Equity securities [Member] | |||
Realized Gains (Losses) on Investments [Line Items] | |||
Realized investment gains (losses) before income taxes | 52 | (1) | 36 |
Commercial Mortgage Loans [Member] | |||
Realized Gains (Losses) on Investments [Line Items] | |||
Realized investment gains (losses) before income taxes | (1) | 4 | (2) |
Other Investments Including Derivatives [Member] | |||
Realized Gains (Losses) on Investments [Line Items] | |||
Realized investment gains (losses) before income taxes | $ 161 | $ 143 | $ 105 |
Investments - Write Downs and S
Investments - Write Downs and Sales (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Pre-Tax Asset Write-downs [Line Items] | |||
Pre-Tax Asset Write-Downs | $ 31 | $ 58 | $ 140 |
Realized Investment Results Not Reflected In Revenues Table Details [Abstract] | |||
Separate accounts | 157 | 16 | 117 |
Investment gains required to adjust future policy benefits for the run-off settlement annuity business | 20 | 63 | 114 |
Sales Information For Available For Sale Fixed Maturities Equity Securities [Abstract] | |||
Proceeds from sales | 2,012 | 1,544 | 1,555 |
Gross gains on sales | 103 | 83 | 85 |
Gross losses on sales | $ (18) | $ (7) | $ (13) |
Derivative Financial Instrum114
Derivative Financial Instruments (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Derivative [Line Items] | ||
Amounts excluded from assessment of hedge effectiveness | ||
Gains (losses) recognized due to hedge ineffectiveness | ||
Cash on deposit representing upfront margin required for centrally-cleared derivative instruments | 9 | |
Fair Value | ||
Net liability position of derivatives that contain certain credit risk-related contingent features | ||
Gain (Loss) Recognized in Other Comprehensive Income | ||
Gain (Loss) Recognized in Income Statement | ||
Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | Interest Rate Swaps [Member] | ||
Derivative [Line Items] | ||
Notional Amount | 750 | 750 |
Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | Foreign Currency Swaps [Member] | ||
Derivative [Line Items] | ||
Notional Amount | $ 318 | 78 |
Maximum term length, foreign currency derivatives | 12 years | |
Non designated [Member] | Forward Contracts [Member] | ||
Derivative [Line Items] | ||
Notional Amount | $ 255 | $ 149 |
Maximum term length, foreign currency derivatives | 3 months |
Variable Interest Entities (Det
Variable Interest Entities (Details) $ in Billions | 12 Months Ended |
Dec. 31, 2017USD ($)LimitedPartnerships | |
Variable Interest Entity [Line Items] | |
Methodology for determining whether the Company is primary beneficiary | When the Company becomes involved with a variable interest entity, as well as when there is a change in the Company’s involvement with an entity, the Company must determine if it is the primary beneficiary and must consolidate the entity. The Company would be considered the primary beneficiary if it has the power to direct the entity’s most significant economic activities or has the right to receive benefits or obligation to absorb losses that could be significant to the entity. The Company evaluates the following criteria: the structure and purpose of the entity; the risks and rewards created by and shared through the entity; and the Company’s ability to direct its activities, receive its benefits and absorb its losses relative to the other parties involved with the entity including its sponsors, equity holders, guarantors, creditors and servicers. |
Securities limited partnerships and real estate limited partnerships [Member] | |
Variable Interest Entity [Line Items] | |
Maximum exposure to loss related to arrangements with variable interest entity | $ 2.4 |
Number of limited partnerships defined as variable interest entities | LimitedPartnerships | 116 |
Carrying amount of assets | $ 1.2 |
Commitments to contribute additional cash, amount | $ 1.2 |
Securities limited partnerships and real estate limited partnerships [Member] | Maximum [Member] | |
Variable Interest Entity [Line Items] | |
Non-controlling interest percentage | 10.00% |
Other asset-backed and corporate securities [Member] | |
Variable Interest Entity [Line Items] | |
Maximum exposure to loss related to arrangements with variable interest entity | $ 0.6 |
Carrying amount of assets | $ 0.6 |
Non-controlling interest percentage | |
Real estate joint ventures [Member] | |
Variable Interest Entity [Line Items] | |
Maximum exposure to loss related to arrangements with variable interest entity | |
Carrying amount of assets | |
Independent physician associations [Member] | |
Variable Interest Entity [Line Items] | |
Maximum exposure to loss related to arrangements with variable interest entity | |
Carrying amount of assets | |
India Joint Venture [Member] | |
Variable Interest Entity [Line Items] | |
Maximum exposure to loss related to arrangements with variable interest entity | |
Carrying amount of assets |
Accumulated Other Comprehens116
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Accumulated other comprehensive income (loss), beginning | $ (1,382) | ||
Shareholders' other comprehensive income (loss), net of tax | 300 | $ (132) | $ (314) |
Accumulated other comprehensive income (loss), ending | (1,082) | (1,382) | |
Securities [ Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Accumulated other comprehensive income (loss), beginning | 362 | 418 | 620 |
Other comprehensive income (loss) before reclassifications, pre-tax | 35 | (48) | (389) |
Other comprehensive income (loss) before reclassifications, tax (expense) benefit | (19) | 6 | 157 |
Other comprehensive income (loss) before reclassifications, after-tax | 16 | (42) | (232) |
Reclassification adjustment, pre-tax | (77) | (22) | 46 |
Reclassification adjustment, tax (expense) benefit | 27 | 8 | (16) |
Reclassification adjustment, after-tax | (50) | (14) | 30 |
Shareholders' other comprehensive income (loss), net of tax | (34) | (56) | (202) |
Accumulated other comprehensive income (loss), ending | 328 | 362 | 418 |
Derivatives [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Accumulated other comprehensive income (loss), beginning | 3 | 7 | (8) |
Other comprehensive income (loss) before reclassifications, pre-tax | (1) | 0 | 10 |
Other comprehensive income (loss) before reclassifications, tax (expense) benefit | 0 | 0 | (3) |
Other comprehensive income (loss) before reclassifications, after-tax | (1) | 0 | 7 |
Reclassification adjustment, tax (expense) benefit | 1 | 2 | (4) |
Reclassification adjustment, after-tax | (2) | (4) | 8 |
Shareholders' other comprehensive income (loss), net of tax | (3) | (4) | 15 |
Accumulated other comprehensive income (loss), ending | 0 | 3 | 7 |
Derivatives [Member] | Other Operating Expenses [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Reclassification adjustment, pre-tax | 1 | 1 | 12 |
Derivatives [Member] | Net Realized Investment Gains [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Reclassification adjustment, pre-tax | (4) | (7) | 0 |
Translation of foreign currencies [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Accumulated other comprehensive income (loss), beginning | (369) | (274) | (62) |
Other comprehensive income (loss) before reclassifications, pre-tax | 309 | (95) | (224) |
Other comprehensive income (loss) before reclassifications, tax (expense) benefit | (5) | 0 | 12 |
Shareholders' other comprehensive income (loss), net of tax | 304 | (95) | (212) |
Accumulated other comprehensive income (loss), ending | (65) | (369) | (274) |
Postretirement benefits liability [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Accumulated other comprehensive income (loss), beginning | (1,378) | (1,401) | (1,486) |
Other comprehensive income (loss) before reclassifications, pre-tax | (22) | (29) | 63 |
Other comprehensive income (loss) before reclassifications, tax (expense) benefit | 8 | 10 | (23) |
Other comprehensive income (loss) before reclassifications, after-tax | (14) | (19) | 40 |
Reclassification adjustment, tax (expense) benefit | (24) | (22) | (23) |
Reclassification adjustment, after-tax | 47 | 42 | 45 |
Shareholders' other comprehensive income (loss), net of tax | 33 | 23 | 85 |
Accumulated other comprehensive income (loss), ending | (1,345) | (1,378) | (1,401) |
Reclassification adjustment for amortization of net losses from past experience and prior service costs [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Reclassification adjustment, pre-tax | 64 | 64 | 68 |
Reclassification adjustment for settlement losses [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Reclassification adjustment, pre-tax | $ 7 | $ 0 | $ 0 |
Accumulated Other Comprehens117
Accumulated Other Comprehensive Income - Reclassifications out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||
Realized investment (gains) losses | $ (237) | $ (169) | $ (57) |
Other operating expenses | 10,033 | 9,584 | 8,982 |
Securities [ Member] | Reclassification Out Of Accumulated Other Comprehensive Income [Member] | |||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||
Realized investment (gains) losses | (77) | (22) | 46 |
Derivatives [Member] | Reclassification Out Of Accumulated Other Comprehensive Income [Member] | |||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||
Realized investment (gains) losses | (4) | (7) | 0 |
Other operating expenses | 1 | 1 | 12 |
Reclassification adjustment for amortization of net losses from past experience and prior service costs [Member] | Reclassification Out Of Accumulated Other Comprehensive Income [Member] | |||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||
Other operating expenses | 64 | 64 | 68 |
Reclassification adjustment for settlement losses [Member] | Reclassification Out Of Accumulated Other Comprehensive Income [Member] | |||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||
Other operating expenses | $ 7 | $ 0 | $ 0 |
Pension and Other Postretire118
Pension and Other Postretirement Benefits - About our Plans (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)Employees | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Cigna Pension Plan And Cigna Pension Plan For Certain Former Employees [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Covered retirees | Employees | 22,200 | ||
Covered vested former employees | Employees | 14,500 | ||
Covered active employees | Employees | 14,000 | ||
Tax status | us-gaap:QualifiedPlanMember | ||
Funding status | us-gaap:FundedPlanMember | ||
Sponsor location | country:US | ||
Plan Type | us-gaap:PensionPlansDefinedBenefitMember | ||
Cigna Supplemental Pension Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Tax status | us-gaap:NonqualifiedPlanMember | ||
Funding status | us-gaap:UnfundedPlanMember | ||
Sponsor location | country:US | ||
Plan Type | us-gaap:PensionPlansDefinedBenefitMember | ||
United States [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Percent at which excess actuarial gains (losses) are amortized to other operating expense | 10.00% | ||
Period for recognizing differences between actual and expected long-term returns to determine penison costs | 5 years | ||
United States [Member] | Pension Benefits [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Market-related valuation of pension plan assets | $ 4,100 | ||
Plan assets at fair value | 4,281 | $ 3,977 | $ 3,981 |
Defined benefit plan cost | 2 | 18 | (1) |
Defined benefit plan benefit obligation | 4,969 | 4,888 | 4,934 |
United States [Member] | Other Postretirement Benefits [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | 2 | 5 | 8 |
Defined benefit plan cost | 7 | 9 | 8 |
Defined benefit plan benefit obligation | $ 258 | $ 277 | $ 295 |
United States [Member] | Postretirement medical plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Covered retirees | Employees | 18,400 | ||
Covered active employees | Employees | 18,600 | ||
Percentage of year 2000 per capita cost at which defined benefit plan cost is capped for post-1988 retirees | 200.00% | ||
Funding status | us-gaap:UnfundedPlanMember | ||
Foreign Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | |||
Defined benefit plan cost | |||
Defined benefit plan benefit obligation |
Pension and Other Postretire119
Pension and Other Postretirement Benefits - Funded Status (Details) - United States [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Pension Benefits [Member] | |||
Change in benefit obligation [Abstract] | |||
Benefit obligation, January 1 | $ 4,888 | $ 4,934 | |
Service cost | 3 | 2 | $ 2 |
Interest cost | 186 | 199 | 194 |
(Gain) loss from past experience | 181 | 57 | |
Benefits paid from plan assets | (277) | (284) | |
Benefits paid - other | (12) | (20) | |
Benefit obligation, December 31 | 4,969 | 4,888 | 4,934 |
Change in plan assets [Roll Forward] | |||
Fair value of plan assets, January 1 | 3,977 | 3,981 | |
Actual return on plan assets | 418 | 279 | |
Benefits paid | (277) | (284) | |
Contributions | 163 | 1 | |
Fair value of plan assets, December 31 | 4,281 | 3,977 | 3,981 |
Funded Status | (688) | (911) | |
Pension Benefits [Member] | Qualified Plan [Member] | |||
Change in plan assets [Roll Forward] | |||
Expected total pension plan contributions for next fiscal year | 0 | ||
Pension Benefits [Member] | Non-qualifed Plan [Member] | |||
Change in plan assets [Roll Forward] | |||
Fair value of plan assets, December 31 | 0 | ||
Other Postretirement Benefits [Member] | |||
Change in benefit obligation [Abstract] | |||
Benefit obligation, January 1 | 277 | 295 | |
Service cost | 0 | 0 | 0 |
Interest cost | 9 | 11 | 11 |
(Gain) loss from past experience | 1 | 2 | |
Benefits paid from plan assets | (3) | (3) | |
Benefits paid - other | (26) | (28) | |
Benefit obligation, December 31 | 258 | 277 | 295 |
Change in plan assets [Roll Forward] | |||
Fair value of plan assets, January 1 | 5 | 8 | |
Actual return on plan assets | 0 | 0 | |
Benefits paid | (3) | (3) | |
Contributions | 0 | 0 | |
Fair value of plan assets, December 31 | 2 | 5 | $ 8 |
Funded Status | (256) | $ (272) | |
Other Postretirement Benefits [Member] | Non-qualifed Plan [Member] | |||
Change in plan assets [Roll Forward] | |||
Fair value of plan assets, December 31 | $ 0 |
Pension and Other Postretire120
Pension and Other Postretirement Benefit Plans - Benefit Payments (Details) - United States [Member] $ in Millions | Dec. 31, 2017USD ($) |
Pension Benefits [Member] | |
Benefit payments including expected future services [Abstract] | |
Paid in 2018 | $ 340 |
Paid in 2019 | 334 |
Paid in 2020 | 325 |
Paid in 2021 | 325 |
Paid in 2022 | 324 |
Paid in 2023-2027 | 1,573 |
Other Postretirement Benefits [Member] | |
Benefit payments including expected future services [Abstract] | |
Paid in 2018 | 27 |
Paid in 2019 | 26 |
Paid in 2020 | 25 |
Paid in 2021 | 23 |
Paid in 2022 | 22 |
Paid in 2023-2027 | $ 87 |
Pension and Other Postretire121
Pension and Other Postretirement Benefit Plans - Amounts included in AOCI (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Pension Benefits [Member] | ||
Amounts included in AOCI [Abstract] | ||
Unrecognized net gains (losses) | $ (2,113) | $ (2,163) |
Unrecognized prior service cost | (6) | (6) |
Postretirement benefits liabilty adjustment | (2,119) | (2,169) |
Expected pre-tax gains (losses) related to amortization of net actuarial gain/loss | $ (69) | |
Weighted average amortization period for amortization of net actuarial gain/loss | 26 years | |
Other Postretirement Benefits [Member] | ||
Amounts included in AOCI [Abstract] | ||
Unrecognized net gains (losses) | $ 0 | 0 |
Unrecognized prior service cost | 46 | 49 |
Postretirement benefits liabilty adjustment | 46 | $ 49 |
Expected pre-tax (gains) losses related to amortization of net prior service cost | $ (3) | |
Weighted average amortization period for prior service costs | 26 years |
Pension and Other Postretire122
Pension and Other Postretirement Benefits - Cost of our Plans (Details) - United States [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Pension Benefits [Member] | |||
Components of net pension and other postretirement benefits cost [Abstract] | |||
Service cost | $ 3 | $ 2 | $ 2 |
Interest cost | 186 | 199 | 194 |
Expected long-term return on plan assets | (260) | (249) | (267) |
Amortization of net loss from past experience | 66 | 65 | 70 |
Amortization of prior service cost | 0 | 1 | 0 |
Settlement loss | 7 | 0 | 0 |
Net plan cost | 2 | 18 | (1) |
Other Postretirement Benefits [Member] | |||
Components of net pension and other postretirement benefits cost [Abstract] | |||
Service cost | 0 | 0 | 0 |
Interest cost | 9 | 11 | 11 |
Expected long-term return on plan assets | 0 | 0 | 0 |
Amortization of net loss from past experience | 1 | 1 | 0 |
Amortization of prior service cost | (3) | (3) | (3) |
Settlement loss | 0 | 0 | 0 |
Net plan cost | $ 7 | $ 9 | $ 8 |
Pension and Other Postretire123
Pension and Other Postretirement Benefits - Assumptions Used (Details) - United States [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Assumptions for pension and other postretirement benefits [Abstract] | ||
Mortality table for pension and postretirement benefit obligations, current year | RP 2014 with MP 2017 projection scale | |
Mortality table for pension and postretirement benefit obligations, prior year | RP 2014 with MP 2016 projection scale | |
Defined Benefit Plan Assumed Health Care Cost Trend Rates [Abstract] | ||
Estimated rate of increase in postretirement health care costs, next fiscal year | 6.50% | |
Annual decrease in estimated rate of increase in postretirement health care costs | 0.25% | |
Estimated rate of increase in postretirement health care costs, ultimate | 4.75% | |
Year in which ultimate estimated rate of increase in postretirement health care costs is reached | 2,024 | |
Pension Benefits [Member] | ||
Assumptions for pension and other postretirement benefits [Abstract] | ||
Discount rate: Benefit obligation | 3.51% | 3.95% |
Discount rate: Benefit cost | 3.95% | 4.17% |
Expected long-term return on plan assets: Benefit cost | 7.25% | 7.25% |
Other Postretirement Benefits [Member] | ||
Assumptions for pension and other postretirement benefits [Abstract] | ||
Discount rate: Benefit obligation | 3.37% | 3.70% |
Discount rate: Benefit cost | 3.70% | 3.89% |
Expected long-term return on plan assets: Benefit cost | 5.00% | 5.00% |
Impact of a 1% increase or decrease in estimate rate of future increases in postretirement health care benefits [Abstract] | ||
Effect of increase in estimated rate on postretirement cost | ||
Effect of decrease in estimated rate on postretirement cost | ||
Effect of increase in estimated rate on postretirement benefit obligation | ||
Effect of decrease in estimated rate on postretirement benefit obligation |
Pension and Other Postretire124
Pension and Other Postretirement Benefits - Pension Plan Assets (Details) - Pension Benefits [Member] - United States [Member] - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets invested in separate accounts of subsidiaries | $ 3,900 | ||
Plan assets invested in funds offered by the buyer of the retirement benefits business | 342 | ||
Plan assets at fair value | 4,281 | $ 3,977 | $ 3,981 |
Fixed Maturities [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | $ 2,031 | 1,778 | |
Target allocation percentages | 50.00% | ||
Federal government and agency [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | $ 1 | 1 | |
Corporate [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | 1,124 | 1,125 | |
Asset-backed [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | 22 | 22 | |
Fund Investments And Pooled Separate Accounts [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | 884 | 630 | |
Equity securities [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | $ 1,165 | 1,031 | |
Target allocation percentages | 30.00% | ||
Domestic [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | $ 689 | 681 | |
International, including funds and pooled seperate accounts [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | $ 476 | 350 | |
Other Plan Asset Categories [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target allocation percentages | 20.00% | ||
Securities Partnerships [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | $ 457 | 424 | |
Real estate, including pooled separate accounts [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | 300 | 289 | |
Commercial Mortgage Loans [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | 140 | 129 | |
Hedge Funds [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | 73 | 196 | |
Guaranteed Deposit Account Contract [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | 63 | 67 | |
Cash equivalents and other current assets, net [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | $ 52 | $ 63 |
Pension and Other Postretire125
Pension and Other Postretirement Benefit Plans - 401(k) Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Pension and Other Postretirement Benefit Plans [Abstract] | |||
Expense for matching contributions in the 401K plan | $ 122 | $ 113 | $ 106 |
Employee Incentive Plans - Abou
Employee Incentive Plans - About our Plans (Details) - shares shares in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Employee Incentive Plans [Abstract] | |||
Common shares available for award | 14 | 6.8 | 8.6 |
Employee Incentive Plans - Stoc
Employee Incentive Plans - Stock Options (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | |||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Employee Incentive Plan Aggregate Disclosures [Line Items] | ||||||
Compensation cost | $ 178 | $ 128 | $ 111 | |||
Employee Stock Option [Member] | ||||||
Employee Incentive Plan Aggregate Disclosures [Line Items] | ||||||
Compensation cost | $ 52 | $ 53 | $ 42 | |||
Black-Scholes option-pricing model assumptions and resulting fair value of options [Abstract] | ||||||
Dividend Yield | 0.00% | 0.00% | 0.00% | |||
Expected volatility | 35.00% | 35.00% | 35.00% | |||
Risk-free interest rate | 1.80% | 1.20% | 1.30% | |||
Expected option life | 4 years 3 months 18 days | 4 years 3 months 18 days | 4 years 3 months 18 days | |||
Weighted average fair value of options | $ 46.38 | $ 42.01 | $ 36.4 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||||
Options outstanding - January 1 | 7,097 | 6,433 | 7,331 | |||
Options Granted | 1,230 | 1,336 | 1,410 | |||
Options Exercised | (2,072) | (577) | (2,146) | |||
Options Expired or canceled | (99) | (95) | (162) | |||
Options outstanding - December 31 | 6,156 | 7,097 | 6,433 | |||
Options Exercisable - Number (in thousands) | 3,894 | 4,409 | 3,414 | |||
Share Based Compensation Arrangement By Share Based Payment Award, Options Outstanding, Weighted Average Exercise Price [Roll Forward] | ||||||
Weighted Average Exercise Price - Options Outstanding - January 1 | $ 82.01 | $ 68.86 | $ 51.84 | |||
Weighted Average Exercise Price - Options Granted | 149.17 | 139.2 | 120.94 | |||
Weighted Average Exercise Price - Options Exercised | 63.41 | 62.09 | 43.63 | |||
Weighted Average Exercise Price - Options Expired or canceled | 138.41 | 117.18 | 86.04 | |||
Weighted Average Exercise Price - Options Outstanding - December 31 | $ 100.79 | $ 82.01 | $ 68.86 | |||
Options Exercisable - Weighted Average Exercise Price | $ 77.36 | $ 58.36 | $ 46.55 | |||
Related compensation expense to be recognized | $ 39 | |||||
Period over which compensation expense will be recognized | 2 years | |||||
Information For Stock Options Exercised Details [Abstract] | ||||||
Intrinsic value of options exercised | $ 218 | $ 41 | $ 179 | |||
Cash received for options exercised | 131 | 36 | 94 | |||
Tax benefit from options exercised | $ 41 | $ 11 | $ 42 | |||
Information for Outstanding Common Stock Options [Abstract] | ||||||
Options Outstanding - Number (in thousands) | 6,156 | 7,097 | 7,331 | 6,156 | 7,097 | 6,433 |
Options Outstanding - Total intrinsic value | $ 630 | |||||
Options Outstanding - Weighted Average Exercise Price | $ 82.01 | $ 82.01 | $ 51.84 | $ 100.79 | $ 82.01 | $ 68.86 |
Options Outstanding - Weighted average remaining contractual life | 6 years 7 months 6 days | |||||
Options Exercisable - Number (in thousands) | 3,894 | 4,409 | 3,414 | |||
Options Exercisable - Total Intrinsic Value | $ 490 | |||||
Options Exercisable - Weighted Average Exercise Price | $ 77.36 | $ 58.36 | $ 46.55 | |||
Options Exercisable - Weighted Average Remaining Contractual Life | 5 years 6 months | |||||
Employee Stock Option [Member] | Minimum [Member] | ||||||
Employee Incentive Plan Aggregate Disclosures [Line Items] | ||||||
Award vesting period | 1 year | |||||
Employee Stock Option [Member] | Maximum [Member] | ||||||
Employee Incentive Plan Aggregate Disclosures [Line Items] | ||||||
Award vesting period | 3 years | |||||
Award expiration period | 10 years | |||||
Black-Scholes option-pricing model assumptions and resulting fair value of options [Abstract] | ||||||
Remaining maturity of traded options | 1 year |
Employee Incentive Plans - Rest
Employee Incentive Plans - Restricted Stock (Details) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)Employees$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | |
Employee Incentive Plan Aggregate Disclosures [Line Items] | |||
Compensation cost | $ | $ 178 | $ 128 | $ 111 |
Restricted Stock Grants And Units [Member] | |||
Employee Incentive Plan Aggregate Disclosures [Line Items] | |||
Compensation cost | $ | $ 53 | $ 40 | $ 33 |
Share Based Compensation Arrangement By Share Based Payment Award, Equity Instruments Other Than Options, Nonvested, Roll Forward | |||
Outstanding - January 1 | shares | 1,309 | 1,642 | 2,121 |
Awarded | shares | 451 | 315 | 352 |
Vested | shares | (409) | (591) | (736) |
Forfeited | shares | (56) | (57) | (95) |
Outstanding - December 31 | shares | 1,295 | 1,309 | 1,642 |
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Nonvested Weighted Average Grant Date Fair Value Roll Forward [Abstract] | |||
Outstanding - January 1 | $ / shares | $ 97.78 | $ 72.58 | $ 53.59 |
Awarded | $ / shares | 155.21 | 138.61 | 121.93 |
Vested | $ / shares | 67.09 | 50.01 | 41.99 |
Forfeited | $ / shares | 121.74 | 92.51 | 68.31 |
Outstanding - December 31 | $ / shares | $ 126.44 | $ 97.78 | $ 72.58 |
Fair value of shares vested | $ | $ 62 | $ 82 | $ 92 |
Number of employees holding share-based payment awards | Employees | 4,800 | ||
Related compensation expense to be recognized | $ | $ 68 | ||
Period over which compensation expense will be recognized | 2 years | ||
Restricted Stock Grants And Units [Member] | Minimum [Member] | |||
Employee Incentive Plan Aggregate Disclosures [Line Items] | |||
Award vesting period | 3 years | ||
Restricted Stock Grants And Units [Member] | Maximum [Member] | |||
Employee Incentive Plan Aggregate Disclosures [Line Items] | |||
Award vesting period | 5 years |
Employee Incentive Plans - Stra
Employee Incentive Plans - Strategic Performance Shares (Details) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)Employees$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | |
Employee Incentive Plan Aggregate Disclosures [Line Items] | |||
Compensation cost | $ | $ 178 | $ 128 | $ 111 |
Strategic Performance Shares [Member] | |||
Employee Incentive Plan Aggregate Disclosures [Line Items] | |||
Performance period | 3 years | ||
Percent of shares subject to market conditions | 50.00% | ||
Percent of shares subject to performance conditions | 50.00% | ||
Compensation cost | $ | $ 40 | $ 35 | $ 36 |
Share Based Compensation Arrangement By Share Based Payment Award, Equity Instruments Other Than Options, Nonvested, Roll Forward | |||
Outstanding - January 1 | 942 | 1,188 | 1,547 |
Awarded | 275 | 286 | 311 |
Vested | (386) | (494) | (608) |
Forfeited | (53) | (38) | (62) |
Outstanding - December 31 | 778 | 942 | 1,188 |
Share Based Compensation Arrangement By Share Based Payment Award, Equity Instruments Other Than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |||
Outstanding - January 1 | $ / shares | $ 109.14 | $ 81.68 | $ 59.2 |
Awarded | $ / shares | 150.06 | 139.05 | 121.78 |
Vested | $ / shares | 78.91 | 60.15 | 45.51 |
Forfeited | $ / shares | 138.19 | 112.7 | 76.33 |
Outstanding - December 31 | $ / shares | $ 136.57 | $ 109.14 | $ 81.68 |
Employee Service Share-based Compensation, Additional Disclosures [Abstract] | |||
Shares of Cigna common stock distributed upon SPS vesting | 476 | 768 | 972 |
Fair value of shares vested | $ | $ 70 | $ 109 | $ 119 |
Number of employees holding share-based payment awards | Employees | 1,500 | ||
Related compensation expense to be recognized | $ | $ 38 | ||
Period over which compensation expense will be recognized | 2 years | ||
Strategic Performance Shares [Member] | Minimum [Member] | |||
Employee Incentive Plan Aggregate Disclosures [Line Items] | |||
Percentage of original shares granted that may be awarded at end of performance period | 0.00% | ||
Strategic Performance Shares [Member] | Maximum [Member] | |||
Employee Incentive Plan Aggregate Disclosures [Line Items] | |||
Percentage of original shares granted that may be awarded at end of performance period | 200.00% |
Employee Incentive Plans - One-
Employee Incentive Plans - One-time Employee Stock Award (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Employee Incentive Plan Aggregate Disclosures [Line Items] | |||
Compensation cost | $ 178 | $ 128 | $ 111 |
Stock award [Member] | |||
Employee Incentive Plan Aggregate Disclosures [Line Items] | |||
Shares issued | 205,000 | ||
Stock award price | $ 162.96 | ||
Compensation cost | $ 33 |
Employee Incentive Plans - Comp
Employee Incentive Plans - Compensation Cost and Tax Effects of Share-based Compensation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Employee Incentive Plans [Abstract] | |||
Compensation cost | $ 178 | $ 128 | $ 111 |
Tax benefits recognized in earnings based on expense | $ 79 | $ 57 | $ 24 |
Goodwill, Other Intangibles,132
Goodwill, Other Intangibles, and Property and Equipment - Goodwill Activity (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill [Line Items] | ||
Goodwill, Beginning Balance | $ 5,980 | $ 6,019 |
Goodwill acquired, net | 154 | 1 |
Impact of foreign currency translation | 30 | (40) |
Goodwill, Ending Balance | 6,164 | $ 5,980 |
Global Health Care [Member] | ||
Goodwill [Line Items] | ||
Goodwill, Ending Balance | 5,900 | |
Global Supplemental Benefits [Member] | ||
Goodwill [Line Items] | ||
Goodwill, Ending Balance | $ 300 |
Goodwill, Other Intangibles,133
Goodwill, Other Intangibles, and Property and Equipment - Amoritzation Periods (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Minimum [Member] | |
Finite Lived Intangible Assets Net [Line Items] | |
Other intangibles amortization period | 5 years |
Maximum [Member] | |
Finite Lived Intangible Assets Net [Line Items] | |
Other intangibles amortization period | 30 years |
Goodwill, Other Intangibles,134
Goodwill, Other Intangibles, and Property and Equipment - Other Intangible Assets (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Finite Lived Intangible Assets Net [Line Items] | ||
Cost | $ 1,803 | $ 1,772 |
Accumulated amortization | 1,312 | 1,184 |
Net carrying value | 491 | 588 |
Other assets [Member] | ||
Finite Lived Intangible Assets Net [Line Items] | ||
Cost | 1,571 | 1,540 |
Accumulated amortization | 1,226 | 1,116 |
Net carrying value | 345 | 424 |
Customer relationships [Member] | Other assets [Member] | ||
Finite Lived Intangible Assets Net [Line Items] | ||
Cost | 1,280 | 1,256 |
Accumulated amortization | 1,056 | 965 |
Net carrying value | 224 | 291 |
Other intangibles [Member] | Other assets [Member] | ||
Finite Lived Intangible Assets Net [Line Items] | ||
Cost | 291 | 284 |
Accumulated amortization | 170 | 151 |
Net carrying value | 121 | 133 |
Value of business acquired [Member] | Deferred policy acquisition costs [Member] | ||
Finite Lived Intangible Assets Net [Line Items] | ||
Cost | 232 | 232 |
Accumulated amortization | 86 | 68 |
Net carrying value | $ 146 | $ 164 |
Goodwill, Other Intangibles,135
Goodwill, Other Intangibles, and Property and Equipment - Useful Life (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Building improvements [Member] | Minimum [Member] | |
Property Plant And Equipment [Line Items] | |
Property, plant and equipment useful life | 10 years |
Building improvements [Member] | Maximum [Member] | |
Property Plant And Equipment [Line Items] | |
Property, plant and equipment useful life | 40 years |
Purchased software [Member] | Minimum [Member] | |
Property Plant And Equipment [Line Items] | |
Property, plant and equipment useful life | 3 years |
Purchased software [Member] | Maximum [Member] | |
Property Plant And Equipment [Line Items] | |
Property, plant and equipment useful life | 5 years |
Internally developed software [Member] | Minimum [Member] | |
Property Plant And Equipment [Line Items] | |
Property, plant and equipment useful life | 3 years |
Internally developed software [Member] | Maximum [Member] | |
Property Plant And Equipment [Line Items] | |
Property, plant and equipment useful life | 7 years |
Furniture and equipment (including computer equipment) [Member] | Minimum [Member] | |
Property Plant And Equipment [Line Items] | |
Property, plant and equipment useful life | 3 years |
Furniture and equipment (including computer equipment) [Member] | Maximum [Member] | |
Property Plant And Equipment [Line Items] | |
Property, plant and equipment useful life | 10 years |
Goodwill, Other Intangibles,136
Goodwill, Other Intangibles, and Property and Equipment - Property and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Property Plant And Equipment [Line Items] | ||
Cost | $ 4,613 | $ 4,364 |
Accumulated amortization | 3,050 | 2,828 |
Net carrying value | $ 1,563 | 1,536 |
Capital lease agreements, term length | 4 years | |
Internal-use software [Member] | ||
Property Plant And Equipment [Line Items] | ||
Cost | $ 2,991 | 2,766 |
Accumulated amortization | 2,184 | 1,997 |
Net carrying value | 807 | 769 |
Total other property and equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Cost | 1,622 | 1,598 |
Accumulated amortization | 866 | 831 |
Net carrying value | 756 | 767 |
Assets recorded under capital leases [Member] | ||
Property Plant And Equipment [Line Items] | ||
Cost | 49 | 87 |
Accumulated amortization | 31 | 49 |
Net carrying value | 18 | 38 |
Other property and equipment not recorded under capital leases [Member] | ||
Property Plant And Equipment [Line Items] | ||
Cost | 1,573 | 1,511 |
Accumulated amortization | 835 | 782 |
Net carrying value | $ 738 | $ 729 |
Goodwill, Other Intangibles,137
Goodwill, Other Intangibles, and Property and Equipment - Depreciation and Amortization (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Depreciation And Amortization By Type [Line Items] | |||
Depreciation and amortization | $ 566 | $ 610 | $ 585 |
Bargain purchase gain | 23 | ||
Internal-use software [Member] | |||
Depreciation And Amortization By Type [Line Items] | |||
Depreciation and amortization | 298 | 303 | 288 |
Other property and equipment [Member] | |||
Depreciation And Amortization By Type [Line Items] | |||
Depreciation and amortization | 153 | 158 | 160 |
Assets recorded under capital leases [Member] | |||
Depreciation And Amortization By Type [Line Items] | |||
Amortization on assets under capital leases | 14 | 20 | 22 |
Value of business acquired [Member] | |||
Depreciation And Amortization By Type [Line Items] | |||
Depreciation and amortization | 18 | 20 | 18 |
Other intangibles [Member] | |||
Depreciation And Amortization By Type [Line Items] | |||
Depreciation and amortization | $ 97 | $ 129 | 119 |
Bargain purchase gain | $ 23 |
Goodwill, Other Intangibles,138
Goodwill, Other Intangibles, and Property and Equipment - Amortization for Intangible Assets (Details) $ in Millions | Dec. 31, 2017USD ($) |
Goodwill Other Intangibles And Property And Equipment [Abstract] | |
Estimated pre-tax intangible asset amortization expense in 2018 | $ 387 |
Estimated pre-tax intangible asset amortization expense in 2019 | 299 |
Estimated pre-tax intangible asset amortization expense in 2020 | 177 |
Estimated pre-tax intangible asset amortization expense in 2021 | 114 |
Estimated pre-tax intangible asset amortization expense in 2022 | $ 88 |
Leases and Rentals (Details)
Leases and Rentals (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Leases Rentals And Outsourced Service Arrangements [Line Items] | |||
Net rental expense for operating leases | $ 162 | $ 151 | $ 165 |
Future net minimum rental payments under non-cancelable operating leases [Abstract] | |||
Future net minimum rental payments under non-cancelable operating leases | 580 | ||
Payable in 2018 | 130 | ||
Payable in 2019 | 113 | ||
Payable in 2020 | 94 | ||
Payable in 2021 | 73 | ||
Payable in 2022 | 58 | ||
Payable in 2023 and thereafter | $ 114 | ||
Minimum [Member] | Office space [Member] | |||
Leases Rentals And Outsourced Service Arrangements [Line Items] | |||
Term length for operating leases | 1 month | ||
Maximum [Member] | Office space [Member] | |||
Leases Rentals And Outsourced Service Arrangements [Line Items] | |||
Term length for operating leases | 18 years |
Shareholders Equity and Divi140
Shareholders Equity and Dividend Restrictions (Details) - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statutory Accounting Practices [Line Items] | |||
Statutory net income | $ 2.5 | $ 2 | $ 2.1 |
Statutory surplus | 10.4 | $ 8.5 | $ 8 |
Minimum statutory surplus required by regulators | 3.2 | ||
Investments on deposit with regulatory bodies | 0.6 | ||
Maximum dividend distributions permitted in 2018 without regulatory approval | 1.6 | ||
Maximum loans to parent company permitted without regulatory approval | 1.3 | ||
Restricted GAAP net assets of Cigna Corporation's subsidiaries | $ 12 |
Income Taxes - U.S. Tax Reform
Income Taxes - U.S. Tax Reform Legislation (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Line Items] | ||||
Nominal federal income tax rate | 35.00% | |||
Additional tax expense due to tax reform legislation, provisional amount | $ 232 | $ 0 | $ 0 | |
Additional tax expense due to change in tax rate, provisional amount | 144 | |||
Additional one-time tax expense on accumulated unremitted foreign earnings, provisional amount | 88 | |||
Reduction of operating expenses resulting from tax reform | 56 | |||
Reduction of operating expenses resulting from tax reform, after-tax | 36 | |||
Tax effect offsetting reduction of operating expenses included in additional tax epense due to tax reform legislation | 36 | |||
Net after-tax effect of reduction in operating expenses resulting from tax reform | $ 0 | |||
Scenario Plan [Member] | ||||
Income Tax Disclosure [Line Items] | ||||
Nominal federal income tax rate | 21.00% |
Income Taxes - Income Tax Expen
Income Taxes - Income Tax Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current taxes | |||
U.S. income taxes | $ 974 | $ 935 | $ 1,076 |
Foreign income taxes | 122 | 95 | 93 |
State income taxes | 36 | 32 | 60 |
Total taxes, current | 1,132 | 1,062 | 1,229 |
Deferred taxes (benefits) | |||
U.S. Income taxes (benefits) | 204 | 69 | 22 |
Foreign income taxes (benefits) | 39 | 9 | (6) |
State income taxes (benefits) | (1) | (4) | 5 |
Total taxes (benefits), deferred | 242 | 74 | 21 |
Total taxes | $ 1,374 | $ 1,136 | $ 1,250 |
Income Taxes - Reconciliation t
Income Taxes - Reconciliation to Nominal Tax Rate (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes [Abstract] | |||
Nominal federal income tax rate | 35.00% | ||
Reconciliation of total taxes to nominal federal rate details [Abstract] | |||
Tax expense at nominal rate | $ 1,262 | $ 1,043 | $ 1,164 |
Effect of U.S. tax reform legislation | 232 | 0 | 0 |
Effect of undistributed foreign earnings | (70) | (57) | (67) |
Health insurance industry tax | 0 | 108 | 109 |
State income tax (net of federal income tax benefit) | 23 | 18 | 42 |
Other | (73) | 24 | 2 |
Total income taxes | $ 1,374 | $ 1,136 | $ 1,250 |
Income Taxes - Foreign Earnings
Income Taxes - Foreign Earnings Percentage (Details) - Pre-tax income [Member] - Geographic Concentration Risk [Member] | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 14.00% | 11.00% | 11.00% |
Concentration Risk, Benchmark Description | Pre-tax income, consolidated | ||
Concentration Risk, Additional Characteristic | Foreign operations | ||
South Korea [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 13.00% | 11.00% | 8.00% |
Concentration Risk, Benchmark Description | Pre-tax income, consolidated | ||
Concentration Risk, Additional Characteristic | South Korea |
Income Taxes - Effective Tax Ra
Income Taxes - Effective Tax Rates (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Taxes [Abstract] | ||
Consolidated effective tax rate | 38.10% | 38.10% |
Cumulative unrecognized deferred tax liabilities | $ 120 |
Income Taxes - Deferred Income
Income Taxes - Deferred Income Taxes (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets [Abstract] | ||
Employee and retiree benefit plans | $ 279 | $ 481 |
Other insurance and contractholder liabilities | 352 | 460 |
Net operating losses | 105 | 128 |
Other accrued liabilities | 101 | 166 |
Other | 91 | 140 |
Deferred tax assets before valuation allowance | 928 | 1,375 |
Valuation allowance for deferred tax assets | (72) | (87) |
Deferred tax assets, net of valuation allowance | 856 | 1,288 |
Deferred tax liabilities [Abstract] | ||
Depreciation and amortization | 496 | 781 |
Unrealized appreciation (depreciation) on investments and foreign currency translation | 102 | 149 |
Other | 225 | 54 |
Total deferred tax liabilities | 823 | 984 |
Net deferred income tax assets | 33 | $ 304 |
Foreign [Member] | ||
Deferred tax liabilities [Abstract] | ||
Total deferred tax liabilities | $ 175 |
Income Taxes - Uncertain Tax Po
Income Taxes - Uncertain Tax Positions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of unrecognized tax benefits details [Abstract] | |||
Balance at January 1, | $ 31 | $ 31 | $ 26 |
Increase due to current year positions | 7 | 10 | 7 |
Reduction related to settlements with taxing authorities | (1) | (2) | 0 |
Reduction related to lapse of applicable statute of limitations | (2) | (8) | (2) |
Balance at December 31, | $ 35 | $ 31 | $ 31 |
Contingencies and Other Matt148
Contingencies and Other Matters - Guarantees (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Financial Guarantee [Member] | Retiree and Life Insurance Benefits [Member] | |
Guarantee Obligations [Line Items] | |
Maximum Exposure, Undiscounted | $ 470 |
Percentage of benefit obligations reinsured | 12.00% |
Guarantee obligations carrying value | $ 0 |
Financial Guarantee [Member] | Retiree and Life Insurance Benefits [Member] | Minimum [Member] | |
Guarantee Obligations [Line Items] | |
Assets maintained by employers | 470 |
Indemnification obligations to lenders [Member] | |
Guarantee Obligations [Line Items] | |
Maximum Exposure, Undiscounted | 90 |
Guarantee obligations carrying value | 0 |
Indemnification obligations in connection with acquistion, disposition and reinsurance transactions [Member] | |
Guarantee Obligations [Line Items] | |
Guarantee obligations carrying value | $ 0 |
Maximum Exposure Inestimable | The Company does not believe that it is possible to determine the maximum potential amount due under these obligations because not all amounts due under these indemnification obligations are subject to limitation. |
Contingencies and Other Matt149
Contingencies and Other Matters - Legal and Regulatory Matters (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Sep. 30, 2016 | |
Guaranty Fund Assessments [Member] | ||
Loss Contingencies [Line Items] | ||
Charges for loss contingency, pre-tax | $ 130 | |
Charges for loss contingency, after-tax | $ 85 | |
Discount rate, Penn Treaty assessments | 3.50% | |
Recorded liability, Penn Treaty assessment | $ 55 | |
Total future expected cash outflows, Penn Treaty assessment | 65 | |
Pending Litigation [Member] | ||
Loss Contingencies [Line Items] | ||
Reserves for litigation matters, pre-tax | 195 | |
Reserves for litigation matters, after-tax | $ 155 | |
Settled Litigation [Member] | ||
Loss Contingencies [Line Items] | ||
Reserves for litigation matters, pre-tax | $ 40 | |
Reserves for litigation matters, after-tax | $ 25 |
Contingencies and Other Matt150
Contingencies and Other Matters - Anthem Litigation (Details) $ in Millions | Dec. 31, 2017USD ($) |
Contingencies And Other Matters [Abstract] | |
Termination fee payable to Company | $ 1,850 |
Positive Outcome Of Litigation [Member] | Minimum [Member] | |
Gain Contingencies [Line Items] | |
Damages sought | $ 13,000 |
Segment Information - Special I
Segment Information - Special Items (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
Apr. 30, 2015 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
After-tax [Abstract] | ||||||||||||
Other operating expenses (see Note 20 for details) | $ (36) | |||||||||||
Tax expense (see Note 20 for details) | 232 | $ 0 | $ 0 | |||||||||
Total charges associated with U.S. tax reform | $ 196 | $ 0 | $ 0 | $ 0 | 196 | |||||||
Debt extinguishment costs | $ 65 | 0 | 209 | 0 | 0 | 209 | 65 | |||||
Long-term care guaranty fund assessment | 0 | 0 | 0 | 83 | 83 | |||||||
Transaction-related costs | $ 25 | 6 | $ (47) | $ 49 | $ 39 | $ 46 | $ 26 | $ 36 | 33 | 147 | 57 | |
Risk corridor allowance | 80 | 0 | 0 | 0 | 80 | |||||||
Charges associated with litigation matters | $ 0 | $ 25 | $ 0 | $ 0 | 25 | |||||||
Before-tax [Abstract] | ||||||||||||
Other operating expenses (see note 20 for additional details) | (56) | |||||||||||
Total charges associated with U.S. tax reform | (56) | |||||||||||
Debt extinguishment costs | $ 100 | $ 321 | 321 | 0 | 100 | |||||||
Long-term care guaranty fund assessment | 129 | |||||||||||
Transaction-related costs | 126 | 166 | 66 | |||||||||
Risk corridor allowance | 124 | |||||||||||
Charges associated with litigation matters | 40 | |||||||||||
Other Operating Expenses [Member] | ||||||||||||
After-tax [Abstract] | ||||||||||||
Other operating expenses (see Note 20 for details) | (36) | |||||||||||
Debt extinguishment costs | 209 | 65 | ||||||||||
Long-term care guaranty fund assessment | 83 | |||||||||||
Transaction-related costs | 33 | 147 | 57 | |||||||||
Risk corridor allowance | 80 | |||||||||||
Charges associated with litigation matters | 25 | |||||||||||
Before-tax [Abstract] | ||||||||||||
Other operating expenses (see note 20 for additional details) | (56) | |||||||||||
Debt extinguishment costs | 321 | 100 | ||||||||||
Long-term care guaranty fund assessment | 129 | |||||||||||
Transaction-related costs | $ 126 | 166 | $ 66 | |||||||||
Risk corridor allowance | 124 | |||||||||||
Charges associated with litigation matters | $ 40 |
Segment Information - Summarize
Segment Information - Summarized Segment Financial Information (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
Apr. 30, 2015 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | ||||||||||||
Premiums | $ 32,307 | $ 30,626 | $ 29,642 | |||||||||
Fees and other revenues | 4,867 | 4,760 | 4,488 | |||||||||
Net investment income | 1,226 | 1,147 | 1,153 | |||||||||
Mail order pharmacy revenues | 2,979 | 2,966 | 2,536 | |||||||||
Total operating revenues | 41,379 | 39,499 | 37,819 | |||||||||
Net realized investment gains (losses) | 237 | 169 | 57 | |||||||||
Total revenues | $ 10,531 | $ 10,382 | $ 10,318 | $ 10,385 | $ 9,944 | $ 9,880 | $ 9,960 | $ 9,884 | 41,616 | 39,668 | 37,876 | |
Depreciation and amortization | 566 | 610 | 585 | |||||||||
Total benefits and expenses | 38,010 | 36,689 | 34,549 | |||||||||
Income (loss) before income taxes | 758 | 824 | 1,134 | 890 | 605 | 742 | 813 | 819 | 3,606 | 2,979 | 3,327 | |
Income taxes (benefits) and net (income) loss attributable to noncontrolling interests | 1,369 | 1,112 | 1,233 | |||||||||
Shareholders' Net Income | 266 | 560 | 813 | 598 | 382 | 456 | 510 | 519 | 2,237 | 1,867 | 2,094 | |
After-tax adjustments to reconcile to adjusted income from operations: | ||||||||||||
Realized investment (gains) losses | (156) | (109) | (40) | |||||||||
Amortization of other acquired intangible assets | 66 | 94 | 80 | |||||||||
Special items: | ||||||||||||
U.S. tax reform | 196 | 0 | 0 | 0 | 196 | |||||||
Debt extinguishment costs | $ 65 | 0 | 209 | 0 | 0 | 209 | 65 | |||||
Long-term care guaranty fund assessment | 0 | 0 | 0 | 83 | 83 | |||||||
Transaction-related costs | $ 25 | $ 6 | $ (47) | $ 49 | 39 | 46 | 26 | 36 | 33 | 147 | 57 | |
Risk corridor allowance | 80 | 0 | 0 | 0 | 80 | |||||||
Charges associated with litigation matters | $ 0 | $ 25 | $ 0 | $ 0 | 25 | |||||||
Adjusted income (loss) from operations | 2,668 | 2,104 | 2,256 | |||||||||
Bargain purchase gain | 23 | |||||||||||
Operating Segments [Member] | Global Health Benefits Segment [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Premiums | 24,538 | 23,295 | 22,696 | |||||||||
Fees and other revenues | 4,722 | 4,623 | 4,357 | |||||||||
Net investment income | 378 | 315 | 340 | |||||||||
Mail order pharmacy revenues | 2,979 | 2,966 | 2,536 | |||||||||
Total operating revenues | 32,617 | 31,199 | 29,929 | |||||||||
Net realized investment gains (losses) | 136 | 119 | 43 | |||||||||
Total revenues | 32,753 | 31,318 | 29,972 | |||||||||
Depreciation and amortization | 477 | 526 | 526 | |||||||||
Total benefits and expenses | 29,440 | 28,467 | 27,028 | |||||||||
Income (loss) before income taxes | 3,313 | 2,851 | 2,944 | |||||||||
Income taxes (benefits) and net (income) loss attributable to noncontrolling interests | 1,031 | 1,100 | 1,150 | |||||||||
Shareholders' Net Income | 2,282 | 1,751 | 1,794 | |||||||||
After-tax adjustments to reconcile to adjusted income from operations: | ||||||||||||
Realized investment (gains) losses | (88) | (78) | (30) | |||||||||
Amortization of other acquired intangible assets | 48 | 74 | 84 | |||||||||
Special items: | ||||||||||||
U.S. tax reform | (137) | |||||||||||
Debt extinguishment costs | 0 | 0 | ||||||||||
Long-term care guaranty fund assessment | 68 | |||||||||||
Transaction-related costs | 0 | 0 | 0 | |||||||||
Risk corridor allowance | 80 | |||||||||||
Charges associated with litigation matters | 25 | |||||||||||
Adjusted income (loss) from operations | 2,173 | 1,852 | 1,848 | |||||||||
Operating Segments [Member] | Global Supplemental Benefits Segment [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Premiums | 3,684 | 3,226 | 3,000 | |||||||||
Fees and other revenues | 66 | 49 | 46 | |||||||||
Net investment income | 122 | 110 | 103 | |||||||||
Mail order pharmacy revenues | 0 | 0 | 0 | |||||||||
Total operating revenues | 3,872 | 3,385 | 3,149 | |||||||||
Net realized investment gains (losses) | 32 | (5) | 0 | |||||||||
Total revenues | 3,904 | 3,380 | 3,149 | |||||||||
Depreciation and amortization | 54 | 54 | 31 | |||||||||
Total benefits and expenses | 3,407 | 3,052 | 2,849 | |||||||||
Income (loss) before income taxes | 497 | 328 | 300 | |||||||||
Income taxes (benefits) and net (income) loss attributable to noncontrolling interests | 195 | 60 | 33 | |||||||||
Shareholders' Net Income | 302 | 268 | 267 | |||||||||
After-tax adjustments to reconcile to adjusted income from operations: | ||||||||||||
Realized investment (gains) losses | (24) | 6 | (1) | |||||||||
Amortization of other acquired intangible assets | 18 | 20 | (4) | |||||||||
Special items: | ||||||||||||
U.S. tax reform | 73 | |||||||||||
Debt extinguishment costs | 0 | 0 | ||||||||||
Long-term care guaranty fund assessment | 0 | |||||||||||
Transaction-related costs | 0 | 0 | 0 | |||||||||
Risk corridor allowance | 0 | |||||||||||
Charges associated with litigation matters | 0 | |||||||||||
Adjusted income (loss) from operations | 369 | 294 | 262 | |||||||||
Bargain purchase gain | 23 | |||||||||||
Operating Segments [Member] | Group Disability And Life Segment [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Premiums | 3,985 | 4,002 | 3,843 | |||||||||
Fees and other revenues | 106 | 98 | 91 | |||||||||
Net investment income | 350 | 343 | 337 | |||||||||
Mail order pharmacy revenues | 0 | 0 | 0 | |||||||||
Total operating revenues | 4,441 | 4,443 | 4,271 | |||||||||
Net realized investment gains (losses) | 74 | 59 | 5 | |||||||||
Total revenues | 4,515 | 4,502 | 4,276 | |||||||||
Depreciation and amortization | 30 | 28 | 26 | |||||||||
Total benefits and expenses | 4,044 | 4,273 | 3,796 | |||||||||
Income (loss) before income taxes | 471 | 229 | 480 | |||||||||
Income taxes (benefits) and net (income) loss attributable to noncontrolling interests | 113 | 65 | 152 | |||||||||
Shareholders' Net Income | 358 | 164 | 328 | |||||||||
After-tax adjustments to reconcile to adjusted income from operations: | ||||||||||||
Realized investment (gains) losses | (49) | (39) | (4) | |||||||||
Amortization of other acquired intangible assets | 0 | 0 | 0 | |||||||||
Special items: | ||||||||||||
U.S. tax reform | (39) | |||||||||||
Debt extinguishment costs | 0 | 0 | ||||||||||
Long-term care guaranty fund assessment | 15 | |||||||||||
Transaction-related costs | 0 | 0 | 0 | |||||||||
Risk corridor allowance | 0 | |||||||||||
Charges associated with litigation matters | 0 | |||||||||||
Adjusted income (loss) from operations | 285 | 125 | 324 | |||||||||
Operating Segments [Member] | Other Operations Segment [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Premiums | 112 | 103 | 103 | |||||||||
Fees and other revenues | 10 | 11 | 13 | |||||||||
Net investment income | 346 | 358 | 369 | |||||||||
Mail order pharmacy revenues | 0 | 0 | 0 | |||||||||
Total operating revenues | 468 | 472 | 485 | |||||||||
Net realized investment gains (losses) | (5) | (5) | 9 | |||||||||
Total revenues | 463 | 467 | 494 | |||||||||
Depreciation and amortization | 1 | 1 | 1 | |||||||||
Total benefits and expenses | 316 | 369 | 374 | |||||||||
Income (loss) before income taxes | 147 | 98 | 120 | |||||||||
Income taxes (benefits) and net (income) loss attributable to noncontrolling interests | 222 | 30 | 40 | |||||||||
Shareholders' Net Income | (75) | 68 | 80 | |||||||||
After-tax adjustments to reconcile to adjusted income from operations: | ||||||||||||
Realized investment (gains) losses | 4 | 2 | (5) | |||||||||
Amortization of other acquired intangible assets | 0 | 0 | 0 | |||||||||
Special items: | ||||||||||||
U.S. tax reform | 138 | |||||||||||
Debt extinguishment costs | 0 | 0 | ||||||||||
Long-term care guaranty fund assessment | 0 | |||||||||||
Transaction-related costs | 0 | 0 | 0 | |||||||||
Risk corridor allowance | 0 | |||||||||||
Charges associated with litigation matters | 0 | |||||||||||
Adjusted income (loss) from operations | 67 | 70 | 75 | |||||||||
Corporate [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Premiums | (12) | 0 | 0 | |||||||||
Fees and other revenues | (37) | (21) | (19) | |||||||||
Net investment income | 30 | 21 | 4 | |||||||||
Mail order pharmacy revenues | 0 | 0 | 0 | |||||||||
Total operating revenues | (19) | 0 | (15) | |||||||||
Net realized investment gains (losses) | 0 | 1 | 0 | |||||||||
Total revenues | (19) | 1 | (15) | |||||||||
Depreciation and amortization | 4 | 1 | 1 | |||||||||
Total benefits and expenses | 803 | 528 | 502 | |||||||||
Income (loss) before income taxes | (822) | (527) | (517) | |||||||||
Income taxes (benefits) and net (income) loss attributable to noncontrolling interests | (192) | (143) | (142) | |||||||||
Shareholders' Net Income | (630) | (384) | (375) | |||||||||
After-tax adjustments to reconcile to adjusted income from operations: | ||||||||||||
Realized investment (gains) losses | 1 | 0 | 0 | |||||||||
Amortization of other acquired intangible assets | 0 | 0 | 0 | |||||||||
Special items: | ||||||||||||
U.S. tax reform | 161 | |||||||||||
Debt extinguishment costs | 209 | 65 | ||||||||||
Long-term care guaranty fund assessment | 0 | |||||||||||
Transaction-related costs | 33 | 147 | 57 | |||||||||
Risk corridor allowance | 0 | |||||||||||
Charges associated with litigation matters | 0 | |||||||||||
Adjusted income (loss) from operations | $ (226) | $ (237) | $ (253) |
Segment Information - Revenues
Segment Information - Revenues by Product Type (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue from External Customer [Line Items] | |||
Premiums | $ 32,307 | $ 30,626 | $ 29,642 |
Mail order pharmacy revenues | 2,979 | 2,966 | 2,536 |
Other | 338 | 378 | 374 |
Revenues from external customers | 40,153 | 38,352 | 36,666 |
Medical [Member] | |||
Revenue from External Customer [Line Items] | |||
Premiums | 24,538 | 23,295 | 22,696 |
Fees | 4,503 | 4,368 | 4,107 |
Total premiums and fees | 29,041 | 27,663 | 26,803 |
Guaranteed Cost [Member] | |||
Revenue from External Customer [Line Items] | |||
Premiums | 6,245 | 4,610 | 4,761 |
Experience Rated [Member] | |||
Revenue from External Customer [Line Items] | |||
Premiums | 2,741 | 2,383 | 2,329 |
Stop Loss [Member] | |||
Revenue from External Customer [Line Items] | |||
Premiums | 3,483 | 3,082 | 2,701 |
International Health Care [Member] | |||
Revenue from External Customer [Line Items] | |||
Premiums | 1,934 | 1,859 | 1,834 |
Dental [Member] | |||
Revenue from External Customer [Line Items] | |||
Premiums | 1,791 | 1,586 | 1,392 |
Medicare [Member] | |||
Revenue from External Customer [Line Items] | |||
Premiums | 5,534 | 6,621 | 6,142 |
Medicaid [Member] | |||
Revenue from External Customer [Line Items] | |||
Premiums | 1,061 | 1,146 | 1,102 |
Medicare Part D [Member] | |||
Revenue from External Customer [Line Items] | |||
Premiums | 764 | 1,122 | 1,589 |
Other Medical [Member] | |||
Revenue from External Customer [Line Items] | |||
Premiums | 985 | 886 | 846 |
Disability [Member] | |||
Revenue from External Customer [Line Items] | |||
Total premiums and fees | 2,091 | 2,045 | 1,899 |
Life, Accident and Supplemental Health [Member] | |||
Revenue from External Customer [Line Items] | |||
Total premiums and fees | $ 5,704 | $ 5,300 | $ 5,054 |
Segment Information - Foreign a
Segment Information - Foreign and U.S. Revenues (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues from external customers | $ 40,153 | $ 38,352 | $ 36,666 |
Revenues From External Customers [Member] | Geographic Concentration Risk [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Concentration Risk, Benchmark Description | Consolidated revenues from external customers | ||
Concentration Risk, Additional Characteristic | Single foreign country | ||
Revenues From External Customers [Member] | Geographic Concentration Risk [Member] | Maximum [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Concentration Risk, Percentage | 5.00% | ||
United States [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues from external customers | $ 36,128 | 34,672 | 33,185 |
South Korea [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues from external customers | 1,892 | 1,666 | 1,521 |
All Other Countries [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues from external customers | $ 2,133 | $ 2,014 | $ 1,960 |
Segment Information - Concentra
Segment Information - Concentration Risk (Details) - CMS [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Concentration Risk [Line Items] | |||
Net receivables from CMS | $ 500 | $ 600 | |
Risk corridor receivable from CMS | 109 | 124 | |
Risk corridor allowance | $ 109 | $ 124 | |
Revenue Consolidated [Member] | Customer Concentration Risk [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 17.00% | 20.00% | 21.00% |
Concentration Risk, Benchmark Description | Consolidated revenues | ||
Concentration Risk, Additional Characteristic | Premiums and fees from CMS |
Quarterly Financial Data (Detai
Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
Apr. 30, 2015 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Consolidated Results | ||||||||||||
Total revenues | $ 10,531 | $ 10,382 | $ 10,318 | $ 10,385 | $ 9,944 | $ 9,880 | $ 9,960 | $ 9,884 | $ 41,616 | $ 39,668 | $ 37,876 | |
Income (loss) before income taxes | 758 | 824 | 1,134 | 890 | 605 | 742 | 813 | 819 | 3,606 | 2,979 | 3,327 | |
Shareholders' net income | $ 266 | $ 560 | $ 813 | $ 598 | $ 382 | $ 456 | $ 510 | $ 519 | $ 2,237 | $ 1,867 | $ 2,094 | |
Shareholders' Net Income Per Share: | ||||||||||||
EPS, basic | $ 1.09 | $ 2.25 | $ 3.2 | $ 2.34 | $ 1.49 | $ 1.79 | $ 2 | $ 2.04 | $ 8.92 | $ 7.31 | $ 8.17 | |
EPS, diluted | 1.07 | 2.21 | 3.15 | 2.3 | 1.47 | 1.76 | 1.97 | 2 | 8.77 | 7.19 | 8.04 | |
Stock and Dividend Data | ||||||||||||
Price range of common stock - high | 212.46 | 188.36 | 173.21 | 154.83 | 142 | 148.99 | 142.91 | 147.93 | ||||
Price range of common stock - low | 183.08 | 166.81 | 146.7 | 133.52 | 115.03 | 123.53 | 121.87 | 123.54 | ||||
Dividends Declared Per Share | $ 0 | $ 0 | $ 0 | $ 0.04 | $ 0 | $ 0 | $ 0 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 | |
Special items | ||||||||||||
U.S. tax reform | $ 196 | $ 0 | $ 0 | $ 0 | $ 196 | |||||||
Debt extinguishment costs | $ 65 | 0 | 209 | 0 | 0 | 209 | $ 65 | |||||
Long-term care guaranty fund assessment | 0 | 0 | 0 | 83 | 83 | |||||||
Transaction-related costs | 25 | 6 | (47) | 49 | $ 39 | $ 46 | $ 26 | $ 36 | $ 33 | $ 147 | $ 57 | |
Risk corridor allowance | 80 | 0 | 0 | 0 | 80 | |||||||
Charges associated with litigation matters | 0 | 25 | 0 | 0 | $ 25 | |||||||
Total impact of special items, after-tax | $ 221 | $ 215 | $ (47) | $ 132 | $ 119 | $ 71 | $ 26 | $ 36 |
Schedule I - Summary of Inve157
Schedule I - Summary of Investments (Details) $ in Millions | Dec. 31, 2017USD ($) |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | $ 27,349 |
Amount at which shown in the Consolidated Balance Sheet | 28,619 |
Fixed Maturties [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 21,867 |
Fair value | 23,138 |
Amount at which shown in the Consolidated Balance Sheet | 23,138 |
United States government and government agencies and authorities [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 541 |
Fair value | 779 |
Amount at which shown in the Consolidated Balance Sheet | 779 |
States, municipalities and political subdivisions [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 1,196 |
Fair value | 1,287 |
Amount at which shown in the Consolidated Balance Sheet | 1,287 |
Foreign governments [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 2,360 |
Fair value | 2,487 |
Amount at which shown in the Consolidated Balance Sheet | 2,487 |
Public utilities [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 2,187 |
Fair value | 2,342 |
Amount at which shown in the Consolidated Balance Sheet | 2,342 |
All other corporate bonds [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 15,107 |
Fair value | 15,739 |
Amount at which shown in the Consolidated Balance Sheet | 15,739 |
Mortgage and other asset-backed [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 469 |
Fair value | 497 |
Amount at which shown in the Consolidated Balance Sheet | 497 |
Redeemable preferred stocks [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 7 |
Fair value | 7 |
Amount at which shown in the Consolidated Balance Sheet | 7 |
Equity securities [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 589 |
Fair value | 588 |
Amount at which shown in the Consolidated Balance Sheet | 588 |
Industrial, miscellaneous and all other [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 485 |
Fair value | 496 |
Amount at which shown in the Consolidated Balance Sheet | 496 |
Non-redeemable preferred stock [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 104 |
Fair value | 92 |
Amount at which shown in the Consolidated Balance Sheet | 92 |
Commercial mortgage loans on real estate [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 1,761 |
Amount at which shown in the Consolidated Balance Sheet | 1,761 |
Policy loans [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 1,415 |
Amount at which shown in the Consolidated Balance Sheet | 1,415 |
Other long-term investments [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 1,518 |
Amount at which shown in the Consolidated Balance Sheet | 1,518 |
Short-term investments [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 199 |
Amount at which shown in the Consolidated Balance Sheet | $ 199 |
Schedule II - Condensed Fina158
Schedule II - Condensed Financial Information, Statements of Income (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
Apr. 30, 2015 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating expenses: | ||||||||||||
Debt extinguishment costs | $ 100 | $ 321 | $ 321 | $ 0 | $ 100 | |||||||
Total operating expenses | 10,033 | 9,584 | 8,982 | |||||||||
Income before Income Taxes | $ 758 | 824 | $ 1,134 | $ 890 | $ 605 | $ 742 | $ 813 | $ 819 | 3,606 | 2,979 | 3,327 | |
Income tax expense (benefit) | 1,374 | 1,136 | 1,250 | |||||||||
Shareholders' Net Income | $ 266 | $ 560 | $ 813 | $ 598 | $ 382 | $ 456 | $ 510 | $ 519 | 2,237 | 1,867 | 2,094 | |
Shareholders' other comprehensive income (loss), net of tax: | ||||||||||||
Net unrealized appreciation (depreciation) on securities | (34) | (56) | (202) | |||||||||
Net unrealized appreciation (depreciation) on derivatives | (3) | (4) | 15 | |||||||||
Net translation of foreign currencies | 304 | (95) | (212) | |||||||||
Postretirement benefits liability adjustment | 33 | 23 | 85 | |||||||||
Shareholders' other comprehensive income (loss) | 300 | (132) | (314) | |||||||||
Shareholders' comprehensive income (loss) | 2,537 | 1,735 | 1,780 | |||||||||
Parent Company [Member] | ||||||||||||
Operating expenses: | ||||||||||||
Interest | 237 | 244 | 246 | |||||||||
Intercompany interest | 18 | 3 | 2 | |||||||||
Debt extinguishment costs | 321 | 0 | 100 | |||||||||
Other | 204 | 281 | 147 | |||||||||
Total operating expenses | 780 | 528 | 495 | |||||||||
Income before Income Taxes | (780) | (528) | (495) | |||||||||
Income tax expense (benefit) | (194) | (146) | (135) | |||||||||
(Loss) of parent company | (586) | (382) | (360) | |||||||||
Equity in income from subsidiaries | 2,823 | 2,249 | 2,454 | |||||||||
Shareholders' Net Income | 2,237 | 1,867 | 2,094 | |||||||||
Shareholders' other comprehensive income (loss), net of tax: | ||||||||||||
Net unrealized appreciation (depreciation) on securities | (34) | (56) | (202) | |||||||||
Net unrealized appreciation (depreciation) on derivatives | (3) | (4) | 15 | |||||||||
Net translation of foreign currencies | 304 | (95) | (212) | |||||||||
Postretirement benefits liability adjustment | 33 | 23 | 85 | |||||||||
Shareholders' other comprehensive income (loss) | 300 | (132) | (314) | |||||||||
Shareholders' comprehensive income (loss) | $ 2,537 | $ 1,735 | $ 1,780 |
Schedule II - Condensed Fina159
Schedule II - Condensed Financial Information, Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Assets | ||||
Cash and cash equivalents | $ 2,972 | $ 3,185 | $ 1,968 | $ 1,420 |
Short-term investments | 199 | 691 | ||
Other assets | 2,316 | 2,227 | ||
Total assets | 61,753 | 59,360 | ||
Liabilities: | ||||
Short-term debt | 240 | 276 | ||
Long-term debt | 5,199 | 4,756 | ||
Total liabilities | 47,969 | 45,575 | ||
Shareholders Equity: | ||||
Common stock (shares issued, 296; authorized, 600) | 74 | 74 | ||
Additional paid-in capital | 2,940 | 2,892 | ||
Accumulated other comprehensive loss | (1,082) | (1,382) | ||
Retained earnings | 15,824 | 13,855 | ||
Less: treasury stock, at cost | (4,021) | (1,716) | ||
Total shareholders' equity | 13,735 | 13,723 | ||
Total liabilities and equity | 61,753 | 59,360 | ||
Parent Company [Member] | ||||
Assets | ||||
Cash and cash equivalents | 9 | 18 | $ 16 | $ 51 |
Short-term investments | 63 | 57 | ||
Investments in subsidiaries | 22,655 | 20,315 | ||
Intercompany receivable | 200 | 173 | ||
Other assets | 252 | 415 | ||
Total assets | 23,179 | 20,978 | ||
Liabilities: | ||||
Intercompany payable | 2,980 | 998 | ||
Short-term debt | 231 | 257 | ||
Long-term debt | 5,112 | 4,658 | ||
Other liabilities | 1,121 | 1,342 | ||
Total liabilities | 9,444 | 7,255 | ||
Shareholders Equity: | ||||
Common stock (shares issued, 296; authorized, 600) | 74 | 74 | ||
Additional paid-in capital | 2,940 | 2,892 | ||
Accumulated other comprehensive loss | (1,082) | (1,382) | ||
Retained earnings | 15,824 | 13,855 | ||
Less: treasury stock, at cost | (4,021) | (1,716) | ||
Total shareholders' equity | 13,735 | 13,723 | ||
Total liabilities and equity | $ 23,179 | $ 20,978 |
Schedule II - Condensed Fina160
Schedule II - Condensed Financial Information, Balance Sheets - Parentheticals (Details) - shares shares in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Consolidated Balance Sheets | |||
Common stock shares issued | 296,145 | 296,145 | 296,145 |
Common stock shares authorized | 600,000 | 600,000 | 600,000 |
Parent Company [Member] | |||
Consolidated Balance Sheets | |||
Common stock shares issued | 296,000 | 296,000 | |
Common stock shares authorized | 600,000 | 600,000 |
Schedule II - Condensed Fina161
Schedule II - Condensed Financial Information, Statements of Cash Flows (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||
Apr. 30, 2015 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Cash Flows from Operating Activities | |||||||||||||
Shareholders' net income | $ 266 | $ 560 | $ 813 | $ 598 | $ 382 | $ 456 | $ 510 | $ 519 | $ 2,237 | $ 1,867 | $ 2,094 | ||
Adjustments to reconcile shareholders' net income to net cash provided by (used in) operating activities: | |||||||||||||
Other liabilities | 639 | 124 | 423 | ||||||||||
Debt extinguishment costs | $ 100 | $ 321 | 321 | 0 | 100 | ||||||||
Other, net | [1] | 36 | (10) | 71 | |||||||||
Net cash provided by (used in) operating activities | [1],[2] | 4,086 | 4,026 | 2,933 | |||||||||
Cash Flows from Investing Activities | |||||||||||||
Short term investments purchased | (1,065) | (1,698) | (1,183) | ||||||||||
Other, net | 0 | (101) | 0 | ||||||||||
Net cash provided by (used in) investing activities | [2] | (1,703) | (2,574) | (1,736) | |||||||||
Cash Flows from Financing Activities | |||||||||||||
Net change in short-term debt | 80 | (148) | (21) | ||||||||||
Payments for debt extinguishment | (313) | 0 | (87) | ||||||||||
Repayment of long-term debt | (250) | (1,250) | 0 | (851) | |||||||||
Net proceeds on issuance of long-term debt | 1,581 | 0 | 894 | ||||||||||
Issuance of common stock | 131 | 36 | 154 | ||||||||||
Repurchase of common stock | (2,725) | (139) | (671) | ||||||||||
Other, net | [1] | (22) | (72) | (97) | |||||||||
Net cash provided by (used in) financing activities | [1] | (2,651) | (225) | (609) | |||||||||
Net increase (decrease) in cash and cash equivalents | (213) | 1,217 | 548 | ||||||||||
Cash and cash equivalents, January 1, | 3,185 | 1,968 | 3,185 | 1,968 | 1,420 | ||||||||
Cash and cash equivalents, December 31, | 2,972 | 3,185 | 2,972 | 3,185 | 1,968 | ||||||||
Accounting Standards Update 2016-09 [Member] | |||||||||||||
Adjustments to reconcile shareholders' net income to net cash provided by (used in) operating activities: | |||||||||||||
Other, net | 61 | 72 | |||||||||||
Net cash provided by (used in) operating activities | 61 | 72 | |||||||||||
Cash Flows from Financing Activities | |||||||||||||
Other, net | (61) | (72) | |||||||||||
Net cash provided by (used in) financing activities | (61) | (72) | |||||||||||
Accounting Standards Update 2016-09 [Member] | Restatement Adjustment [Member] | |||||||||||||
Adjustments to reconcile shareholders' net income to net cash provided by (used in) operating activities: | |||||||||||||
Other, net | 79 | ||||||||||||
Net cash provided by (used in) operating activities | 79 | ||||||||||||
Cash Flows from Financing Activities | |||||||||||||
Other, net | (79) | ||||||||||||
Net cash provided by (used in) financing activities | (79) | ||||||||||||
Parent Company [Member] | |||||||||||||
Cash Flows from Operating Activities | |||||||||||||
Shareholders' net income | 2,237 | 1,867 | 2,094 | ||||||||||
Adjustments to reconcile shareholders' net income to net cash provided by (used in) operating activities: | |||||||||||||
Equity in income from subsidiaries | (2,823) | (2,249) | (2,454) | ||||||||||
Dividends received from subsidiaries | 758 | 580 | 880 | ||||||||||
Other liabilities | (224) | (9) | 112 | ||||||||||
Debt extinguishment costs | 321 | 0 | 100 | ||||||||||
Other, net | [1] | 333 | 187 | 112 | |||||||||
Net cash provided by (used in) operating activities | [1] | 602 | 376 | 844 | |||||||||
Cash Flows from Investing Activities | |||||||||||||
Short term investments purchased | (6) | (3) | (54) | ||||||||||
Other, net | (11) | (8) | (14) | ||||||||||
Net cash provided by (used in) investing activities | (17) | (11) | (68) | ||||||||||
Cash Flows from Financing Activities | |||||||||||||
Net change in amounts due to / from affiliates | 1,955 | (78) | (161) | ||||||||||
Net change in short-term debt | 100 | (100) | 0 | ||||||||||
Payments for debt extinguishment | (313) | 0 | (87) | ||||||||||
Repayment of long-term debt | (1,250) | 0 | (851) | ||||||||||
Net proceeds on issuance of long-term debt | 1,581 | 0 | 894 | ||||||||||
Issuance of common stock | 131 | 36 | 154 | ||||||||||
Common dividends paid | (10) | (10) | (10) | ||||||||||
Repurchase of common stock | (2,725) | (139) | (671) | ||||||||||
Tax withholding on stock compensation | (61) | (72) | (79) | ||||||||||
Other, net | [1] | (2) | 0 | 0 | |||||||||
Net cash provided by (used in) financing activities | [1] | (594) | (363) | (811) | |||||||||
Net increase (decrease) in cash and cash equivalents | (9) | 2 | (35) | ||||||||||
Cash and cash equivalents, January 1, | $ 18 | $ 16 | 18 | 16 | 51 | ||||||||
Cash and cash equivalents, December 31, | $ 9 | $ 18 | 9 | 18 | 16 | ||||||||
Parent Company [Member] | Accounting Standards Update 2016-09 [Member] | |||||||||||||
Adjustments to reconcile shareholders' net income to net cash provided by (used in) operating activities: | |||||||||||||
Other, net | 61 | 72 | |||||||||||
Net cash provided by (used in) operating activities | 61 | 72 | |||||||||||
Cash Flows from Financing Activities | |||||||||||||
Tax withholding on stock compensation | (61) | (72) | |||||||||||
Net cash provided by (used in) financing activities | $ (61) | $ (72) | |||||||||||
Parent Company [Member] | Accounting Standards Update 2016-09 [Member] | Restatement Adjustment [Member] | |||||||||||||
Adjustments to reconcile shareholders' net income to net cash provided by (used in) operating activities: | |||||||||||||
Other, net | 79 | ||||||||||||
Net cash provided by (used in) operating activities | 79 | ||||||||||||
Cash Flows from Financing Activities | |||||||||||||
Tax withholding on stock compensation | (79) | ||||||||||||
Net cash provided by (used in) financing activities | $ (79) | ||||||||||||
[1] | As required in adopting Accounting Standard Update ("ASU") 2016-09 in 2016, the Company retrospectively reclassified $79 million of cash payments from operating to financing activities in 2015. These payments were related to employee tax obligations associated with stock compensation. The comparable amounts reported in financing activities were $61 million in 2017 and $72 million in 2016. | ||||||||||||
[2] | As required in adopting ASU 2016-15 in 2016, the Company retrospectively reclassified $137 million of cash distributions of earnings from partnership investments from investing to operating activities in 2015. The comparable amounts reported in operating activities were $161 million in 2017 and $144 million in 2016. |
Schedule II - Condensed Fina162
Schedule II - Condensed Financial Information, Short-term and Long-term Debt (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Debt outstanding | $ 5,400 | |
Long-term debt, carrying value | 5,199 | $ 4,756 |
$78 million, 6.37% Notes due 2021 [Member] | Uncollateralized Debt [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, carrying value | 78 | 78 |
Parent Company [Member] | ||
Debt Instrument [Line Items] | ||
Debt outstanding | 5,343 | |
Long-term debt, carrying value | 5,112 | $ 4,658 |
Subsidiaries [Member] | Uncollateralized Debt [Member] | ||
Debt Instrument [Line Items] | ||
Capital lease obligations | 18 | |
Subsidiaries [Member] | $78 million, 6.37% Notes due 2021 [Member] | Uncollateralized Debt [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, carrying value | $ 78 |
Schedule II - Condensed Fina163
Schedule II - Condensed Financial Information, Intercompany Liabilities (Details) - Parent Company [Member] - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Condensed Financial Statements, Captions [Line Items] | ||
Intercompany liabilities, consisting primarily of payables to Cigna Holdings, Inc. | $ 2,980 | $ 998 |
Cigna Holdings Incorporated [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Intercompany liabilities, consisting primarily of payables to Cigna Holdings, Inc. | $ 2,800 | $ 700 |
Average monthly interest rate on intercompany payables | 1.47% | 0.93% |
Schedule II - Condensed Fina164
Schedule II - Condensed Financial Information, Guarantees (Details) $ in Millions | Dec. 31, 2017USD ($) |
Parent Company [Member] | |
Guarantee Obligations [Line Items] | |
Guarantee obligations carrying value | $ 235 |
Schedule III - Supplementary165
Schedule III - Supplementary Insurance Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Supplementary Insurance Information, by Segment [Line Items] | |||
Deferred policy acquisition costs | $ 2,237 | $ 1,818 | $ 1,659 |
Future policy benefits and contractholder deposit funds | 18,236 | 18,106 | 17,922 |
Medical claims payable and unpaid claims | 7,887 | 7,449 | 6,929 |
Unearned premiums | 724 | 634 | 629 |
Premiums | 32,307 | 30,626 | 29,642 |
Net investment income | 1,226 | 1,147 | 1,153 |
Benefit expenses | 25,406 | 24,486 | 23,290 |
Amortization of deferred policy acquisition expenses | 322 | 292 | 286 |
Other operating expenses | 12,282 | 11,911 | 10,973 |
Reduction of operating expenses resulting from tax reform | 56 | ||
Corporate [Member] | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Deferred policy acquisition costs | 0 | 0 | 0 |
Future policy benefits and contractholder deposit funds | 0 | 0 | 0 |
Medical claims payable and unpaid claims | 0 | 0 | 0 |
Unearned premiums | 0 | 0 | 0 |
Premiums | (12) | 0 | 0 |
Net investment income | 30 | 21 | 4 |
Benefit expenses | (12) | 0 | 0 |
Amortization of deferred policy acquisition expenses | 0 | 0 | 0 |
Other operating expenses | 815 | 528 | 502 |
Global Health Care [Member] | Operating Segments [Member] | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Deferred policy acquisition costs | 15 | 16 | 11 |
Future policy benefits and contractholder deposit funds | 157 | 161 | 169 |
Medical claims payable and unpaid claims | 2,719 | 2,532 | 2,355 |
Unearned premiums | 213 | 170 | 145 |
Premiums | 24,538 | 23,295 | 22,696 |
Net investment income | 378 | 315 | 340 |
Benefit expenses | 19,967 | 19,009 | 18,354 |
Amortization of deferred policy acquisition expenses | 56 | 47 | 53 |
Other operating expenses | 9,417 | 9,411 | 8,621 |
Global Supplemental Benefits [Member] | Operating Segments [Member] | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Deferred policy acquisition costs | 2,176 | 1,752 | 1,593 |
Future policy benefits and contractholder deposit funds | 3,746 | 3,225 | 3,006 |
Medical claims payable and unpaid claims | 484 | 384 | 353 |
Unearned premiums | 490 | 435 | 453 |
Premiums | 3,684 | 3,226 | 3,000 |
Net investment income | 122 | 110 | 103 |
Benefit expenses | 2,033 | 1,784 | 1,659 |
Amortization of deferred policy acquisition expenses | 259 | 238 | 227 |
Other operating expenses | 1,115 | 1,030 | 963 |
Group Disability And Life [Member] | Operating Segments [Member] | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Deferred policy acquisition costs | 1 | 1 | 1 |
Future policy benefits and contractholder deposit funds | 1,686 | 1,786 | 1,714 |
Medical claims payable and unpaid claims | 4,491 | 4,342 | 4,006 |
Unearned premiums | 7 | 13 | 13 |
Premiums | 3,985 | 4,002 | 3,843 |
Net investment income | 350 | 343 | 337 |
Benefit expenses | 3,076 | 3,354 | 2,934 |
Amortization of deferred policy acquisition expenses | 1 | 1 | 1 |
Other operating expenses | 967 | 918 | 861 |
Other Operations [Member] | Operating Segments [Member] | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Deferred policy acquisition costs | 45 | 49 | 54 |
Future policy benefits and contractholder deposit funds | 12,647 | 12,934 | 13,033 |
Medical claims payable and unpaid claims | 193 | 191 | 215 |
Unearned premiums | 14 | 16 | 18 |
Premiums | 112 | 103 | 103 |
Net investment income | 346 | 358 | 369 |
Benefit expenses | 342 | 339 | 343 |
Amortization of deferred policy acquisition expenses | 6 | 6 | 5 |
Other operating expenses | (32) | $ 24 | $ 26 |
Reduction of operating expenses resulting from tax reform | $ 56 |
Schedule IV - Reinsurance (Deta
Schedule IV - Reinsurance (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Life insurance in force | |||
Gross amount, Life insurance in force | $ 1,105,323 | $ 1,047,002 | $ 1,047,982 |
Ceded to other companies, Life insurance in force | 49,172 | 55,399 | 72,208 |
Assumed from other companies, Life insurance in force | 2,478 | 2,827 | 3,273 |
Net amount, Life Insurance In Force | $ 1,058,629 | $ 994,430 | $ 979,047 |
Percentage of amount assumed to net, Life insurance in force | 0.20% | 0.30% | 0.30% |
Premiums: | |||
Gross amount, premiums | $ 32,402 | $ 30,755 | $ 29,812 |
Ceded to other companies, premiums | 424 | 513 | 570 |
Assumed from other companies, premiums | 329 | 384 | 400 |
Net amount | $ 32,307 | $ 30,626 | $ 29,642 |
Percentage of amount assumed to net, premiums | 1.00% | 1.30% | 1.30% |
Life insurance and annuities [Member] | |||
Premiums: | |||
Gross amount, premiums | $ 2,307 | $ 2,881 | $ 2,886 |
Ceded to other companies, premiums | 233 | 310 | 335 |
Assumed from other companies, premiums | 22 | 22 | 106 |
Net amount | $ 2,096 | $ 2,593 | $ 2,657 |
Percentage of amount assumed to net, premiums | 1.00% | 0.80% | 4.00% |
Accident and health insurance [Member] | |||
Premiums: | |||
Gross amount, premiums | $ 30,095 | $ 27,874 | $ 26,926 |
Ceded to other companies, premiums | 191 | 203 | 235 |
Assumed from other companies, premiums | 307 | 362 | 294 |
Net amount | $ 30,211 | $ 28,033 | $ 26,985 |
Percentage of amount assumed to net, premiums | 1.00% | 1.30% | 1.10% |
Schedule V - Valuation and Q167
Schedule V - Valuation and Qualifying Accounts and Reserves (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Commercial mortgage loans [Member] | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | $ 5 | $ 15 | $ 12 |
Charged (Credited) to costs and expenses | 1 | 0 | 7 |
Charged (Credited) to other accounts | 0 | 0 | 0 |
Other deductions | (6) | (10) | (4) |
Balance at end of period | 0 | 5 | 15 |
Premiums, accounts and notes receivable [Member] | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | 200 | 75 | 101 |
Charged (Credited) to costs and expenses | 19 | 134 | (10) |
Charged (Credited) to other accounts | (11) | (8) | (15) |
Other deductions | (1) | (1) | (1) |
Balance at end of period | 207 | 200 | 75 |
Deferred tax asset valuation allowance [Member] | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | 87 | 71 | 49 |
Charged (Credited) to costs and expenses | 11 | 21 | 8 |
Charged (Credited) to other accounts | (26) | (5) | 14 |
Other deductions | 0 | 0 | 0 |
Balance at end of period | 72 | 87 | 71 |
Reinsurance recoverables [Member] | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | 3 | 3 | 4 |
Charged (Credited) to costs and expenses | 0 | 0 | 0 |
Charged (Credited) to other accounts | 0 | 0 | (1) |
Other deductions | 0 | 0 | 0 |
Balance at end of period | $ 3 | $ 3 | $ 3 |