Fair Value (Tables)

12 Months Ended

Dec. 31, 2020

Fair Value Disclosures [Abstract]

Fair value of financial assets and liabilities

Financial assets measured at fair value on a recurring basis on the consolidated balance sheets at December 31, 2020 and 2019 were as follows:

In millions	Level 1		Level 2		Level 3		Total
December 31, 2020
Cash and cash equivalents	$	4,210	$	3,869	$	—	$	8,079
Debt securities:
U.S. government securities	2,370		99		—		2,469
States, municipalities and political subdivisions	—		2,727		1		2,728
U.S. corporate securities	—		8,842		52		8,894
Foreign securities	—		2,918		—		2,918
Residential mortgage-backed securities	—		705		—		705
Commercial mortgage-backed securities	—		1,046		—		1,046
Other asset-backed securities	—		2,403		—		2,403
Redeemable preferred securities	—		24		1		25
Total debt securities	2,370		18,764		54		21,188
Equity securities	17		—		30		47
Total	$	6,597	$	22,633	$	84	$	29,314
December 31, 2019
Cash and cash equivalents	$	3,397	$	2,286	$	—	$	5,683
Debt securities:
U.S. government securities	1,785		67		—		1,852
States, municipalities and political subdivisions	—		2,309		—		2,309
U.S. corporate securities	—		7,700		37		7,737
Foreign securities	—		2,348		—		2,348
Residential mortgage-backed securities	—		533		—		533
Commercial mortgage-backed securities	—		700		—		700
Other asset-backed securities	—		1,405		—		1,405
Redeemable preferred securities	—		26		12		38
Total debt securities	1,785		15,088		49		16,922
Equity securities	34		—		39		73
Total	$	5,216	$	17,374	$	88	$	22,678

Changes in level 3 financial assets

The changes in the balances of Level 3 financial assets during the year ended December 31, 2020 were as follows:

In millions	States, municipalities and political subdivisions		U.S. corporate securities		Equity securities		Redeemable preferred securities		Total
Beginning balance	$	—	$	37	$	39	$	12	$	88
Net realized and unrealized capital gains (losses):
Included in earnings	—		(11)		(3)		18		4
Included in other comprehensive income	—		—		—		(5)		(5)
Purchases	—		27		3		—		30
Sales	—		—		(9)		(24)		(33)
Settlements	—		(1)		—		—		(1)
Transfers into Level 3, net	1		—		—		—		1
Ending balance	$	1	$	52	$	30	$	1	$	84

The changes in the balances of Level 3 financial assets during the year ended December 31, 2019 were as follows:

In millions	Foreign securities		U.S. corporate securities		Equity securities		Redeemable preferred securities		Total
Beginning balance	$	3	$	67	$	54	$	7	$	131
Net realized and unrealized capital gains (losses):
Included in earnings	—		(33)		13		—		(20)
Included in other comprehensive income	—		18		—		5		23
Purchases	2		3		13		—		18
Sales	—		(6)		(41)		—		(47)
Settlements	(1)		(12)		—		—		(13)
Transfers out of Level 3, net	(4)		—		—		—		(4)
Ending balance	$	—	$	37	$	39	$	12	$	88

The total gross transfers into (out of) Level 3 during the years ended December 31, 2020 and 2019 were as follows:

In millions	2020		2019
Gross transfers into Level 3	$	1	$	—
Gross transfers out of Level 3	—		(4)
Net transfers out of Level 3	$	1	$	(4)

Carrying value and estimated fair value of certain financial instruments

The carrying value and estimated fair value classified by level of fair value hierarchy for financial instruments carried on the consolidated balance sheets at adjusted cost or contract value at December 31, 2020 and 2019 were as follows:

	Carrying Value		Estimated Fair Value
In millions			Level 1		Level 2		Level 3		Total
December 31, 2020
Assets:
Mortgage loans	$	1,047	$	—	$	—	$	1,070	$	1,070
Equity securities (1)	145		N/A		N/A		N/A		N/A
Liabilities:
Investment contract liabilities:
With a fixed maturity	5		—		—		5		5
Without a fixed maturity	322		—		—		371		371
Long-term debt	64,647		75,940		—		—		75,940
December 31, 2019
Assets:
Mortgage loans	$	1,213	$	—	$	—	$	1,239	$	1,239
Equity securities (1)	149		N/A		N/A		N/A		N/A
Liabilities:
Investment contract liabilities:
With a fixed maturity	5		—		—		5		5
Without a fixed maturity	372		—		—		392		392
Long-term debt	68,480		74,306		—		—		74,306

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(1)It was not practical to estimate the fair value of these cost-method investments as it represents shares of unlisted companies. See Note 1 ‘‘Significant Accounting Policies’’ for additional information regarding the valuation of cost method investments.

Separate account financial assets

Separate Accounts financial assets at December 31, 2020 and 2019 were as follows:

	December 31, 2020								December 31, 2019
In millions	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	2	$	186	$	—	$	188	$	2	$	143	$	—	$	145
Debt securities	1,465		2,634		—		4,099		1,224		2,589		—		3,813
Equity securities	—		2		—		2		—		2		—		2
Common/collective trusts	—		563		—		563		—		499		—		499
Total (1)	$	1,467	$	3,385	$	—	$	4,852	$	1,226	$	3,233	$	—	$	4,459

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(1)Excludes $29 million of other receivables at December 31, 2020.