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Insurance and Contractholder Liabilities (Tables)
 9 Months Ended
Sep. 30, 2023
Insurance Loss Reserves [Abstract]  
Summary of Insurance and Contractholder Liabilities, Activity in the Unpaid Claims Liability and Liability Details for Unpaid Claims and Claim Expenses
The Company's insurance and contractholder liabilities were comprised of the following:
September 30, 2023December 31, 2022September 30, 2022
(In millions)CurrentNon-currentTotalCurrentNon-currentTotalTotal
Unpaid claims and claim expenses
Cigna Healthcare
$5,240 $77 $5,317 $4,117 $59 $4,176 $4,250 
Other Operations105 169 274 107 177 284 280 
Future policy benefits
Cigna Healthcare
64 526 590 43 544 587 593 
Other Operations164 3,216 3,380 150 3,442 3,592 3,610 
Contractholder deposit funds
Cigna Healthcare
12 139 151 14 157 171 181 
Other Operations364 6,243 6,607 351 6,358 6,709 6,747 
Market risk benefits41 893 934 51 1,217 1,268 1,337 
Unearned premiums1,362 23 1,385 576 22 598 1,283 
Total insurance and contractholder liabilities$7,352 $11,286 $18,638 $5,409 $11,976 $17,385 $18,281 
Activity, net of intercompany transactions, in the unpaid claims liability for the Cigna Healthcare segment was as follows:
 Nine Months Ended
(In millions)September 30, 2023September 30, 2022
Beginning balance$4,176 $4,261 
Less: Reinsurance and other amounts recoverable221 261 
Beginning balance, net3,955 4,000 
Incurred costs related to:
Current year26,788 23,431 
Prior years(237)(278)
Total incurred26,551 23,153 
Paid costs related to:
Current year22,053 19,655 
Prior years3,362 3,450 
Total paid25,415 23,105 
Ending balance, net5,091 4,048 
Add: Reinsurance and other amounts recoverable226 202 
Ending balance$5,317 $4,250 
Variances in Incurred Costs Related to Prior Years' Unpaid Claims and Claims Expenses
Variances in incurred costs related to prior years' unpaid claims and claim expenses that resulted from the differences between actual experience and the Company's key assumptions were as follows:
Nine Months Ended
September 30, 2023September 30, 2022
(Dollars in millions)$
% (1)
$
% (2)
Actual completion factors$45 0.2 %$81 0.3 %
Medical cost trend192 0.6 197 0.6 
Total favorable variance$237 0.8 %$278 0.9 %
(1)Percentage of current year incurred costs as reported for the year ended December 31, 2022.
(2)Percentage of current year incurred costs as reported for the year ended December 31, 2021.
Future Policy Benefit Activity
The weighted average interest rates applied and duration for future policy benefits in the Cigna Healthcare segment, consisting primarily of supplemental health products including individual Medicare supplement, limited benefit health products and individual private medical insurance, were as follows:
As of
September 30, 2023September 30, 2022
Interest accretion rate 2.85 %2.34 %
Current discount rate 6.03 %5.67 %
Weighted average duration 7.0 years7.5 years
The present values of expected net premiums and expected future policy benefits for the Cigna Healthcare segment are as follows:
Nine Months Ended
(In millions)September 30, 2023September 30, 2022
Present value of expected net premiums
Beginning balance$8,557 $9,314 
Reversal of effect of beginning of period discount rate assumptions1,537 (367)
Effect of assumption changes and actual variances from expected experience (1)
314 1,101 
Issuances and lapses 822 718 
Net premiums collected(1,019)(956)
Interest and other (2)
58 44 
Ending balance at original discount rate10,269 9,854 
Effect of end of period discount rate assumptions(1,681)(1,576)
Ending balance (3)
$8,588 $8,278 
Present value of expected policy benefits
Beginning balance$8,945 $9,794 
Reversal of effect of discount rate assumptions1,611 (379)
Effect of assumption changes and actual variances from expected experience (1)
112 1,006 
Issuances and lapses 902 827 
Benefit payments(1,017)(1,081)
Interest and other (2)
184 161 
Ending balance at original discount rate10,737 10,328 
Effect of discount rate assumptions(1,765)(1,652)
Ending balance (4)
$8,972 $8,676 
Liability for future policy benefits $384 $398 
Other (5)
206 195 
Total liability for future policy benefits (6)
$590 $593 
(1)Includes the effect of actual variances from expectations, which (decreased)/increased the total liability for future policy benefits by $(12) million and $58 million, respectively, for the nine months ended September 30, 2023 and September 30, 2022.
(2)Includes the foreign exchange rate impact of translating from transactional and functional currency to United States dollar and the impact of flooring the liability at zero. The flooring impact is calculated at the cohort level after discounting the reserves at the current discount rate.
(3)As of September 30, 2023 and September 30, 2022, respectively, undiscounted expected future gross premiums were $18.5 billion and $17.1 billion. As of September 30, 2023 and September 30, 2022, respectively, discounted expected future gross premiums were $12.5 billion and $11.8 billion.
(4)As of September 30, 2023 and September 30, 2022, respectively, undiscounted expected future policy benefits were $13.1 billion and $12.4 billion.
(5)The liability for future policyholder benefits includes immaterial businesses shown as reconciling items above, most of which are in run-off.
(6)$154 million and $156 million of reinsurance recoverable asset reported in the Consolidated Balance Sheets as of September 30, 2023 and September 30, 2022, respectively, relate to the liability for future policy benefits.
The weighted average interest rates applied and duration for future policy benefits in Other Operations, consisting of annuity and life insurance products, were as follows:
As of
September 30, 2023September 30, 2022
Interest accretion rate 5.64 %5.64 %
Current discount rate 5.73 %5.28 %
Weighted average duration 10.9 years11.8 years
Summary of Market Risk Benefit Market risk benefits activity was as follows:
Nine Months Ended
(In millions)September 30, 2023September 30, 2022
Balance, beginning of year$1,268 $1,824 
Balance, beginning of year, before the effect of nonperformance risk (own credit risk)1,379 1,949 
Changes due to expected run-off(15)(44)
Changes due to capital markets versus expected(352)(510)
Changes due to policyholder behavior versus expected(1)(4)
Assumption changes(16)65 
Balance, end of period, before the effect of changes in nonperformance risk (own credit risk)995 1,456 
Nonperformance risk (own credit risk), end of period(61)(119)
Balance, end of period$934 $1,337 
Reinsured market risk benefit, end of period$993 $1,450 
(In millions)
Reinsurer (1)
September 30, 2023December 31, 2022
Collateral and Other Terms
at September 30, 2023
Berkshire$810 $1,116 
90% were secured by assets in a trust.
Sun Life Assurance Company of Canada81 115 
Liberty Re (Bermuda) Ltd.94 128 
100% were secured by assets in a trust.
SCOR SE29 39 
85% were secured by a letter of credit.
Market risk benefits (2)
$1,014 $1,398 
(1)All reinsurers are rated A- equivalent and higher by an NRSRO.
(2)Includes IBNR and outstanding claims of $21 million. These amounts are excluded from market risk benefits at September 30, 2023 in Note 9 and Note 10A to the Consolidated Financial Statements. At December 31, 2022, IBNR and outstanding claims of $27 million offset by premium due of $3 million were excluded from the market risk benefits as restated due to the adoption of LDTI.
Account Value, Net Amount at Risk and the Number of Contractholders for Guarantees Assumed in the Event of Death
The following table presents the net amount at risk and the average attained age of contractholders (weighted by exposure) for contracts assumed by the Company. The net amount at risk is the amount the Company would have to pay to contractholders if all deaths or annuitizations occurred as of the earliest possible date in accordance with the insurance contract. The Company should be reimbursed in full for these payments unless the Berkshire reinsurance limit is exceeded, as discussed further in Note 10 to the Consolidated Financial Statements.
(Dollars in millions, excludes impact of reinsurance ceded)September 30, 2023September 30, 2022
Net amount at risk$1,986 $2,881 
Average attained age of contractholders (weighted by exposure)75.9 years74.0 years