10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

RQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2018

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

for the transition period from            to           

Commission file number 1-08323

Cigna Corporation

(Exact name of registrant as specified in its charter)

Delaware	06-1059331
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
900 Cottage Grove Road Bloomfield, Connecticut	06002
(Address of principal executive offices)	(Zip Code)
(860) 226-6000
Registrant’s telephone number, including area code
(860) 226-6741 or (215) 761-5511
Registrant’s facsimile number, including area code
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark				YES	NO
·whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.				R	o
·whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).				R	o
·whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.  See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer R	Accelerated filer o	Non-accelerated filer o	Smaller Reporting Company o	Emerging growth company o
·If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.o
·whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).				o	R

As of July 20, 2018, 243,364,579 shares of the issuer’s common stock were outstanding.

Cigna Corporation

TABLE OF CONTENTS

PART I	FINANCIAL INFORMATION	Page
Item 1.	Financial Statements (Unaudited)
	Consolidated Statements of Income	1
	Consolidated Statements of Comprehensive Income	2
	Consolidated Balance Sheets	3
	Consolidated Statements of Changes in Total Equity	4
	Consolidated Statements of Cash Flows	6
	Notes to the Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	47
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	66
Item 4.	Controls and Procedures	66
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	67
Item 1.A.	Risk Factors	67
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	71
Item 6.	Exhibits	72
SIGNATURE		73

As used herein, “Cigna” or the “Company” refers to one or more of Cigna Corporation and its consolidated subsidiaries.

Part I.   FINANCIAL INFORMATION

Item 1.   FINANCIAL STATEMENTS

Cigna Corporation

Consolidated Statements of Income

	Unaudited				Unaudited
	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In millions, except per share amounts)	2018		2017		2018		2017
Revenues
Premiums	$	9,012	$	8,057	$	18,011	$	16,208
Fees and other revenues	1,358		1,252		2,726		2,516
Net investment income	352		308		681		611
Mail order pharmacy revenues	758		757		1,475		1,467
Realized investment gains (losses)
Other-than-temporary impairments on fixed maturities	(5)		(2)		(18)		(9)
Other realized investment gains (losses), net	2		53		(18)		106
Net realized investment (losses) gains	(3)		51		(36)		97
TOTAL REVENUES	11,477		10,425		22,857		20,899
Benefits and expenses
Global Health Care medical costs	5,421		4,890		10,738		9,839
Other benefit expenses	1,424		1,335		2,879		2,702
Mail order pharmacy costs	613		626		1,174		1,207
Other operating expenses	2,893		2,412		5,695		5,067
Amortization of other acquired intangible assets	24		28		51		60
TOTAL BENEFITS AND EXPENSES	10,375		9,291		20,537		18,875
Income before income taxes	1,102		1,134		2,320		2,024
Income taxes
Current	297		304		589		590
Deferred	(3)		20		6		31
TOTAL INCOME TAXES	294		324		595		621
Net income	808		810		1,725		1,403
Less: Net income (loss) attributable to noncontrolling interests	2		(3)		4		(8)
SHAREHOLDERS’ NET INCOME	$	806	$	813	$	1,721	$	1,411
Shareholders’ net income per share
Basic	$	3.32	$	3.20	$	7.10	$	5.54
Diluted	$	3.29	$	3.15	$	7.01	$	5.45
Dividends declared per share	$	-	$	-	$	0.04	$	0.04

The accompanying Notes to the Consolidated Financial Statements (unaudited) are an integral part of these statements.

1

Cigna Corporation

Consolidated Statements of Comprehensive Income

	Unaudited				Unaudited
	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In millions)	2018		2017		2018		2017
Shareholders’ net income	$	806	$	813	$	1,721	$	1,411
Shareholders’ other comprehensive income, net of tax
Net unrealized (depreciation) appreciation, securities	(141)		67		(420)		74
Net unrealized (depreciation), derivatives	(8)		-		(13)		(3)
Net translation of foreign currencies	(152)		27		(107)		139
Postretirement benefits liability adjustment	5		12		18		26
Shareholders’ other comprehensive (loss) income, net of tax	(296)		106		(522)		236
Shareholders’ comprehensive income	510		919		1,199		1,647
Comprehensive income (loss) attributable to noncontrolling interests
Net income (loss) attributable to redeemable noncontrolling interests	2		(1)		4		(3)
Net (loss) attributable to other noncontrolling interests	-		(2)		-		(5)
Other comprehensive (loss) income attributable to redeemable noncontrolling interests	(8)		2		(10)		-
Total comprehensive (loss) attributable to noncontrolling interests	(6)		(1)		(6)		(8)
TOTAL COMPREHENSIVE INCOME	$	504	$	918	$	1,193	$	1,639

The accompanying Notes to the Consolidated Financial Statements (unaudited) are an integral part of these statements.

2

Cigna Corporation

Consolidated Balance Sheets

	Unaudited
	As of		As of
	June 30,		December 31,
(In millions, except per share amounts)	2018		2017
Assets
Investments
Fixed maturities, at fair value (amortized cost, $23,123; $21,867)	$	23,593	$	23,138
Equity securities	560		588
Commercial mortgage loans	1,866		1,761
Policy loans	1,422		1,415
Other long-term investments	1,678		1,518
Short-term investments	220		199
Total investments	29,339		28,619
Cash and cash equivalents	3,634		2,972
Premiums, accounts and notes receivable, net	3,412		3,380
Reinsurance recoverables	5,877		6,046
Deferred policy acquisition costs	2,300		2,237
Property and equipment	1,554		1,563
Deferred tax assets, net	140		39
Goodwill	6,147		6,164
Other assets, including other intangibles	2,412		2,316
Separate account assets	8,287		8,423
TOTAL ASSETS	$	63,102	$	61,759
Liabilities
Contractholder deposit funds	$	8,121	$	8,196
Future policy benefits	9,707		10,040
Unpaid claims and claim expenses	5,246		5,168
Global Health Care medical costs payable	3,005		2,719
Unearned premiums	1,244		724
Total insurance and contractholder liabilities	27,323		26,847
Accounts payable, accrued expenses and other liabilities	7,406		7,290
Short-term debt	109		240
Long-term debt	5,195		5,199
Separate account liabilities	8,287		8,423
TOTAL LIABILITIES	48,320		47,999
Contingencies — Note 16
Redeemable noncontrolling interests	39		49
Shareholders’ Equity
Common stock (par value per share, $0.25; shares issued, 296; authorized, 600)	74		74
Additional paid-in capital	2,974		2,940
Accumulated other comprehensive (loss)	(1,843)		(1,082)
Retained earnings	17,722		15,800
Less treasury stock, at cost	(4,184)		(4,021)
TOTAL SHAREHOLDERS’ EQUITY	14,743		13,711
Total liabilities and shareholders’ equity	$	63,102	$	61,759
SHAREHOLDERS’ EQUITY PER SHARE	$	60.59	$	56.20

The accompanying Notes to the Consolidated Financial Statements (unaudited) are an integral part of these statements.

3

Cigna Corporation

Consolidated Statements of Changes in Total Equity

					Accumulated												Redeemable
Unaudited			Additional		Other								Other Non-				Non-
For the three months ended June 30, 2018	Common		Paid-in		Comprehensive		Retained		Treasury		Shareholders’		controlling		Total		controlling
(In millions)	Stock		Capital		(Loss)		Earnings		Stock		Equity		Interests		Equity		Interests
Balance at March 31, 2018 (1)	$	74	$	2,963	$	(1,547)	$	16,933	$	(4,228)	$	14,195	$	-	$	14,195	$	49
Effect of issuing stock for employee benefit plans			11				(17)		44		38				38
Other comprehensive (loss)					(296)						(296)				(296)		(8)
Net income							806				806				806		2
Other transactions impacting noncontrolling interests											-				-		(4)
BALANCE AT JUNE 30, 2018	$	74	$	2,974	$	(1,843)	$	17,722	$	(4,184)	$	14,743	$	-	$	14,743	$	39
					Accumulated												Redeemable
			Additional		Other								Other Non-				Non-
For the three months ended June 30, 2017	Common		Paid-in		Comprehensive		Retained		Treasury		Shareholders’		controlling		Total		controlling
(In millions)	Stock		Capital		(Loss)		Earnings		Stock		Equity		Interests		Equity		Interests
Balance at March 31, 2017 as reported	$	74	$	2,912	$	(1,252)	$	14,356	$	(1,864)	$	14,226	$	3	$	14,229	$	56
Cumulative effect of accounting for revenue recognition (1)							(24)				(24)				(24)
Balance at March 31, 2017 as retrospectively adjusted	74		2,912		(1,252)		14,332		(1,864)		14,202		3		14,205		56
Effect of issuing stock for employee benefit plans			10				(67)		150		93				93
Other comprehensive income					106						106				106		2
Net income (loss)							813				813		(2)		811		(1)
Repurchase of common stock									(692)		(692)				(692)
Other transactions impacting noncontrolling interests											-				-		1
BALANCE AT JUNE 30, 2017	$	74	$	2,922	$	(1,146)	$	15,078	$	(2,406)	$	14,522	$	1	$	14,523	$	58

The accompanying Notes to the Consolidated Financial Statements (unaudited) are an integral part of these statements.

(1) See Note 2 for further information about adjustments resulting from the Company’s adoption of new accounting standards in 2018.

4

Cigna Corporation

Consolidated Statements of Changes in Total Equity

					Accumulated												Redeemable
Unaudited			Additional		Other								Other Non-				Non-
For the six months ended June 30, 2018	Common		Paid-in		Comprehensive		Retained		Treasury		Shareholders’		controlling		Total		controlling
(In millions)	Stock		Capital		(Loss)		Earnings		Stock		Equity		Interests		Equity		Interests
Balance at December 31, 2017 as retrospectively adjusted	$	74	$	2,940	$	(1,082)	$	15,800	$	(4,021)	$	13,711	$	-	$	13,711	$	49
Cumulative effect of accounting for financial instruments and hedging (1)					(10)		68				58				58
Reclassification adjustment related to U.S. tax reform legislation (1)					(229)		229				-				-
Effect of issuing stock for employee benefit plans			34				(86)		112		60				60
Other comprehensive (loss)					(522)						(522)				(522)		(10)
Net income							1,721				1,721				1,721		4
Common dividends declared (per share:  $0.04)							(10)				(10)				(10)
Repurchase of common stock									(275)		(275)				(275)
Other transactions impacting noncontrolling interests											-				-		(4)
BALANCE AT JUNE 30, 2018	$	74	$	2,974	$	(1,843)	$	17,722	$	(4,184)	$	14,743	$	-	$	14,743	$	39
For the six months ended June 30, 2017
Balance at December 31, 2016 as reported	$	74	$	2,892	$	(1,382)	$	13,855	$	(1,716)	$	13,723	$	4	$	13,727	$	58
Cumulative effect of accounting for revenue recognition (1)							(24)				(24)				(24)
Balance at December 31, 2016 as retrospectively adjusted	74		2,892		(1,382)		13,831		(1,716)		13,699		4		13,703		58
Effect of issuing stock for employee benefit plans			33				(154)		252		131				131
Other comprehensive income					236						236				236		-
Net income (loss)							1,411				1,411		(5)		1,406		(3)
Common dividends declared (per share:  $0.04)							(10)				(10)				(10)
Repurchase of common stock									(942)		(942)				(942)
Other transactions impacting noncontrolling interests			(3)								(3)		2		(1)		3
BALANCE AT JUNE 30, 2017	$	74	$	2,922	$	(1,146)	$	15,078	$	(2,406)	$	14,522	$	1	$	14,523	$	58

The accompanying Notes to the Consolidated Financial Statements (unaudited) are an integral part of these statements.

(1) See Note 2 for further information about adjustments resulting from the Company’s adoption of new accounting standards in 2018.

5

Cigna Corporation

Consolidated Statements of Cash Flows

	Unaudited
	Six Months Ended June 30,
(In millions)	2018		2017
Cash Flows from Operating Activities
Net income	$	1,725	$	1,403
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	276		286
Realized investment losses (gains)	36		(97)
Deferred income taxes	6		31
Net changes in assets and liabilities, net of non-operating effects:
Premiums, accounts and notes receivable	(5)		(222)
Reinsurance recoverables	60		64
Deferred policy acquisition costs	(139)		(137)
Other assets	244		(71)
Insurance liabilities	955		973
Accounts payable, accrued expenses and other liabilities	(246)		(159)
Current income taxes	70		83
Distributions from partnership investments	71		74
Other, net	(33)		48
NET CASH PROVIDED BY OPERATING ACTIVITIES	3,020		2,276
Cash Flows from Investing Activities
Proceeds from investments sold:
Fixed maturities and equity securities	1,273		930
Investment maturities and repayments:
Fixed maturities and equity securities	887		945
Commercial mortgage loans	88		118
Other sales, maturities and repayments (primarily short-term and other long-term investments)	412		1,059
Investments purchased or originated:
Fixed maturities and equity securities	(3,544)		(2,938)
Commercial mortgage loans	(194)		(194)
Other (primarily short-term and other long-term investments)	(501)		(444)
Property and equipment purchases	(220)		(194)
Acquisitions, net of cash acquired	-		(14)
NET CASH (USED IN) INVESTING ACTIVITIES	(1,799)		(732)
Cash Flows from Financing Activities
Deposits and interest credited to contractholder deposit funds	574		686
Withdrawals and benefit payments from contractholder deposit funds	(594)		(733)
Net change in short-term debt	(5)		(14)
Repayment of long-term debt	(131)		(250)
Repurchase of common stock	(310)		(895)
Issuance of common stock	27		76
Other, net	(103)		(13)
NET CASH (USED IN) FINANCING ACTIVITIES	(542)		(1,143)
Effect of foreign currency rate changes on cash and cash equivalents	(17)		25
Net increase in cash and cash equivalents	662		426
Cash and cash equivalents, January 1,	2,972		3,185
Cash and cash equivalents, June 30,	$	3,634	$	3,611
Supplemental Disclosure of Cash Information:
Income taxes paid, net of refunds	$	519	$	504
Interest paid	$	127	$	123

The accompanying Notes to the Consolidated Financial Statements (unaudited) are an integral part of these statements.

6

CIGNA CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

TABLE OF CONTENTS

Note Number	Footnote	Page
BUSINESS AND CAPITAL STRUCTURE
1	Description of Business	8
2	Significant Accounting Policies	9
3	Mergers and Acquisitions	13
4	Earnings Per Share	14
5	Debt	15
INSURANCE INFORMATION
6	Global Health Care Medical Costs Payable	16
7	Liabilities for Unpaid Claims and Claim Expenses	18
8	Reinsurance	19
INVESTMENTS
9	Fair Value Measurements	22
10	Investments	29
11	Derivative Financial Instruments	33
12	Variable Interest Entities	37
13	Accumulated Other Comprehensive Income (Loss)	37
WORKFORCE MANAGEMENT AND COMPENSATION
14	Pension and Other Postretirement Benefit Plans	39
COMPLIANCE, REGULATION AND CONTINGENCIES
15	Income Taxes	40
16	Contingencies and Other Matters	40
RESULTS DETAILS
17	Segment Information	43

7

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 insurance and related products and services offered by our insurance and other subsidiaries.  The majority of these products are offered through employers and other groups such as governmental and non-governmental organizations, unions and associations.  Cigna also offers commercial health and dental insurance, Medicare and Medicaid products and health, life and accident insurance coverages to individuals in the United States and selected international markets.  In addition to its ongoing operations described above, Cigna also has certain run-off operations.

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, 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 Advantage 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 primarily in selected international markets and in the United 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 reinsurance 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, such as net interest expense (defined as interest on corporate debt less net investment income on investments not supporting segment operations), interest on uncertain tax positions, intersegment eliminations, compensation cost for stock options and related excess tax benefits, expense associated with frozen pension plans and certain litigation matters and costs for corporate projects, including overhead.

8

Note 2 – Significant Accounting Policies

Basis of Presentation

The Consolidated Financial Statements include the accounts of Cigna Corporation and its subsidiaries.  Intercompany transactions and accounts have been eliminated in consolidation.  These Consolidated Financial Statements were prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).  Amounts recorded in the Consolidated Financial Statements necessarily reflect management’s estimates and assumptions about medical costs, investment 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 in 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.

These interim Consolidated Financial Statements are unaudited but include all adjustments (including normal recurring adjustments) necessary, in the opinion of management, for a fair statement of financial position and results of operations for the periods reported.  The interim Consolidated Financial Statements and Notes should be read in conjunction with the Consolidated Financial Statements and Notes included in the Company’s 2017 Annual Report on Form 10-K (“2017 Form 10-K”).  The preparation of interim Consolidated Financial Statements necessarily relies heavily on estimates.  This and certain other factors, including the seasonal nature of portions of the health care and related benefits business, as well as competitive and other market conditions, call for caution in estimating full-year results based on interim results of operations.

Recent Accounting Pronouncements

The Company’s 2017 Form 10-K includes discussion of significant recent accounting pronouncements that either have impacted or may impact our financial statements in the future.

The following tables provide information about recently adopted and recently issued or changed accounting guidance (applicable to Cigna) that have occurred since the Company filed its 2017 Form 10-K.

9

Recently Adopted Accounting Guidance

Accounting Standard and Adoption Date	Requirements and Effects of Adopting New Guidance
Revenue from Contracts with Customers (Accounting Standards Update (“ASU”) 2014-09 and related amendments) Adopted as of January 1, 2018	Requires: · Revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services · Additional revenue-related disclosures Effects of adoption: · Applies to the Company’s service and mail order pharmacy contracts with customers · Adopted through full retrospective restatement · Cumulative effect adjustment of $24 million after-tax was recorded, reducing the December 31, 2016 balance of retained earnings.  Adjustment established a contract liability for service fee revenue billed that must be deferred and allocated to services performed after a customer contract terminates.  Subsequent changes in the contract liability and the related impact to net income and per share amounts since adoption were immaterial. · Immaterial reclassifications were made to prior periods in the Consolidated Statements of Income to conform to the current presentation.  The ASU and related interpretive guidance provide clarification on topics including whether all or a part of a contract is within its scope, and the definition of a customer.  Companies are required to identify and evaluate distinct performance obligations within their contracts.  These clarifications resulted in reclassifications within the Global Health Care Segment affecting premiums, fees and other revenues, Global Health Care medical costs, and other operating expenses and had no impact on recognition patterns or net income. · Prior period balances in the Company’s footnote disclosures have been updated to reflect adjustments resulting from the adoption of this ASU.
Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01 and related amendments) Adopted 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 Effects of adoption: · Certain limited partnership interests previously carried at cost of approximately $200 million were increased to fair value of approximately $275 million on January 1, 2018.  Subsequent changes in fair value are reported in net investment income. · Changes in fair value for equity securities that have a readily determinable fair value that were previously reported in accumulated other comprehensive income are now reported in net realized investment gains. · Cumulative effect adjustment of $62 million after-tax was recorded, increasing the opening balance of retained earnings in 2018. · See Notes 9 and 10 for updated disclosures about equity securities.
Targeted Improvements to Accounting for Hedging Activities (ASU 2017-12) Early adopted as of January 1, 2018	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 Effects of adoption: · An immaterial amount of retained earnings was reclassified to accumulated other comprehensive income, decreasing the opening balance in 2018, for a portion of the hedging instruments that was previously excluded from the assessment of hedge effectiveness for fair value hedges. · See Note 11 for the Company’s disclosures about derivatives.

10

Recently Adopted Accounting Guidance

Accounting Standard and Adoption Date

Requirements and Effects of Adopting New Guidance

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02) Early adopted as of January 1, 2018

Guidance: · Allows companies to reclassify the tax effects stranded in accumulated other comprehensive income to retained earnings as a result of H.R.1, An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018 (referred to throughout this Form 10-Q as “U.S. tax reform” or “U.S. tax reform legislation”) · 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:  Accumulated other comprehensive income of $229 million was reclassified to retained earnings, increasing the opening balance in 2018.  See Note 13 for additional information including accounting policy disclosures.

In addition to the standards listed above, the Company adopted the following guidance in first quarter 2018 with no material impact to our financial statements:  Intra-Entity Transfers of Assets Other than Inventory (ASU 2016-16), Clarifying the Definition of a Business (ASU 2017-01), Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (ASU 2017-07), Statement of Cash Flows:  Restricted Cash (ASU 2016-18), Gains and Losses from the Derecognition of Nonfinancial Assets (ASU 2017-05) and Stock Compensation Scope of Modification Accounting (ASU 2017-09).

Accounting Guidance Not Yet Adopted

Accounting Standard and Effective Date Applicable for Cigna

Requirements and Expected Effects of Guidance Not Yet Adopted

Leases (ASU 2016-02 and related amendments) 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 · 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 its 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 plans to elect the optional practical expedient to retain the current classification of leases, and therefore, does not anticipate a material impact to the Consolidated Statements of Income or Cash Flows. · The Company is implementing a new lease system and also expects that adoption of the new standard will require changes to internal control over financial reporting.

11

Updates to Significant Accounting Policies

The Company’s 2017 Form 10-K includes discussion of significant accounting policies in Note 2 or the applicable Notes to the Consolidated Financial Statements.  Significant updates to these policies resulting from the adoption of new accounting guidance in 2018 are provided as follows:

· ASU 2016-1 (Recognition and Measurement of Financial Assets and Liabilities):  see Notes 9 and 10

· ASU 2017-12 (Targeted Improvements to Accounting for Hedging Activities):  see Note 11

· ASU 2014-09 (Revenue from Contracts with Customers), also referred to as Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers and related guidance (“ASC 606”):  see below.

The majority of the Company’s revenues are not subject to the guidance in ASC 606, including premiums from insurance contracts and fees for investment-related products accounted for under insurance guidance (ASC 944).  ASC 606 applies to the Company’s service and mail order pharmacy contracts with clients.  See Note 17 for disaggregated revenue from external customers by segment and by major product or service identified with applicable accounting guidance (ASC 944 or ASC 606).

Accounting for Contracts with Customers – Service and Mail Order Pharmacy Arrangements

Service Fees and Expenses

The majority of the Company’s service fees are derived from administrative services only (“ASO”) arrangements that allow corporate clients to self-fund claims and assume the risk of medical or other benefit costs.  Most of the Company’s ASO arrangements are for Global Health Care medical and specialty services, including pharmacy benefits and, to a lesser extent, ASO services in its Group Disability and Life and Global Supplemental Benefits segments.  Generally, the Company’s ASO arrangements are short-term.  Contract modifications typically occur on renewal and are prospective in nature.

In return for fees from these clients, the Company provides or makes available various services supporting benefit management and claims administration.  In addition, Global Health Care’s services include access to the Company’s participating provider networks, disease management, utilization management, and cost containment services.

In general, the Company considers these services to be a combined performance obligation to provide cost effective administration of plan benefits over the contract period.  Fees are billed, due and recognized monthly at contracted rates based on current membership or utilization.  This recognition pattern aligns with the benefits from services provided to clients.  These revenues are reported in fees and other revenues in the Consolidated Statements of Income.

For most ASO arrangements, the Company is required to perform services for a limited period after a client cancels.  If these services will not be separately billed to the client as they are performed, the Company estimates and defers a portion of compensation attributable to this service obligation received in advance.  Deferred revenue is recorded as a contract liability in accounts payable, accrued expenses and other liabilities and recognized when the related services are performed.

The Company may also provide performance guarantees that provide potential refunds to clients if certain service standards, clinical outcomes or financial metrics are not met.  If these standards, outcomes and metrics are not met, the Company may be financially at risk up to a stated percentage of the contracted fee or a stated dollar amount.  The Company defers revenue by recording a liability for estimated payouts associated with these guarantees within accounts payable, accrued expenses and other liabilities.  The amount of revenue deferred is estimated for each type of guarantee, using either a most likely amount or expected value method depending upon the nature of the guarantee and the information available to estimate refunds.  Estimates are refined each reporting period as additional information on the Company’s performance becomes available, and upon final reconciliation and settlement at the end of the guarantee period.  Amounts accrued and paid for performance guarantees during the reporting periods were not material.

Service fees are recognized net of estimated pharmaceutical manufacturer rebates payable to ASO clients using our network of retail pharmacies.  Net rebates retained by the Company from pharmaceutical manufacturers resulting from ASO client utilization at retail pharmacies represent compensation for pharmacy services and are reflected as fee revenue.  Rebates generally represent a per script amount from the manufacturer and are determined based on scripts filled during the reporting period.

Expenses associated with administrative programs and services are recognized in other operating expenses as incurred.

12

Mail Order Pharmacy Revenues and Costs

Mail order pharmacy revenues are due and recognized as each prescription is shipped.  Mail order pharmacy revenues are presented net of estimated pharmaceutical manufacturer rebates payable to ASO clients that use our mail order business.  Rebates are generally determined based on actual prescriptions filled during the reporting period.

Mail order pharmacy costs are recognized as each prescription is shipped and include the cost of prescriptions sold and other costs to operate this business (including supplies, shipping and handling), net of estimated pharmaceutical rebates from manufacturers for prescriptions filled through our mail order business.

Contract Balances

The following table provides information about receivables and contract liabilities from service and mail order pharmacy contracts with clients.  The allowance for doubtful accounts for receivables and the Company’s contract assets were not material as of the dates presented.

(In millions)	June 30, 2018		December 31, 2017
Receivables, net	$	911	$	885
Contract liabilities	$	56	$	54

Revenue recognized for the three months and six months ended June 30, 2018 and 2017 that was included in the contract liability balance at the beginning of the reporting period was not material.

The amount of revenue recognized for the three months and six months ended June 30, 2018 and 2017 from performance obligations satisfied in prior periods was not material.

The incremental costs of obtaining ASO and mail order pharmacy contracts (such as sales commissions) are expensed as incurred and the Company does not disclose information about remaining performance obligations for these contracts in accordance with elections made by the Company as they are generally short-term with original expected durations of one year or less.

Note 3 – Mergers and Acquisitions

Proposed Acquisition of Express Scripts

On March 8, 2018, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Express Scripts Holding Company (“Express Scripts”), Halfmoon Parent, Inc., a direct wholly owned subsidiary of the Company (“New Cigna”), Halfmoon I, Inc., a direct wholly owned subsidiary of New Cigna (“Cigna Merger Sub”), and Halfmoon II, Inc., a direct wholly owned subsidiary of New Cigna (“Express Scripts Merger Sub”).  Subject to the terms and conditions of the Merger Agreement, the Company will acquire Express Scripts in a cash and stock transaction through (1) the merger of Cigna Merger Sub with and into the Company, with the Company surviving as a direct wholly owned subsidiary of New Cigna and (2) the merger of Express Scripts Merger Sub with and into Express Scripts, with Express Scripts surviving as a direct wholly owned subsidiary of New Cigna (collectively, the “Merger”).  New Cigna will be renamed “Cigna Corporation” immediately after the Merger.

Upon completion of the Merger, Cigna stockholders will receive one share of New Cigna common stock in exchange for each share of Cigna common stock held immediately prior to the Merger, and Express Scripts stockholders will receive (1) 0.2434 of a share of New Cigna common stock and (2) the right to receive $48.75 in cash, without interest, subject to applicable withholding taxes (the “Merger Consideration”), in exchange for each share of Express Scripts common stock held immediately prior to the Merger.  After completion of the Merger, shares of New Cigna common stock are expected to be listed for trading on the New York Stock Exchange.

Cigna and Express Scripts have each scheduled stockholders’ meetings for August 24, 2018 to seek certain approvals from their respective stockholders related to the Merger.  In addition to approval of Cigna’s and Express Scripts’ stockholders, consummation of the Merger is subject to the satisfaction of other customary closing conditions, including receipt of applicable regulatory approvals.  The Merger is not subject to a financing condition.  The Company intends to fund the cash portion of the Merger Consideration through a combination of cash on hand, assumed Express Scripts debt and new debt issuance.  See Note 5 for additional information about the financing of the Merger.  The Merger is expected to be completed by December 31, 2018.

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The Merger Agreement provides for certain termination rights and fees for both the Company and Express Scripts.  If the Merger Agreement is terminated (1) by Express Scripts because the board of directors of the Company has changed its recommendation prior to obtaining the required approval of the stockholders of the Company, (2) by Express Scripts or the Company if the board of directors of the Company has changed its recommendation and the stockholders of the Company have voted against adopting the Merger Agreement or (3) by the Company in order to enter into an alternative acquisition agreement with respect to a Parent Superior Proposal (as defined in the Merger Agreement) that did not result from a breach of the Company’s non-solicitation obligations, then the Company will be required to pay Express Scripts a fee equal to $1.6 billion (the “Parent Termination Fee”).  Further, if the Merger Agreement is terminated under certain circumstances and within 12 months after the date of such termination the Company enters into an agreement regarding a sale of a majority of the Company’s assets or equity or consummates such a sale, then the Company will be required to pay the Parent Termination Fee prior to or contemporaneously with such entry or consummation.  Express Scripts has reciprocal obligations under specified circumstances to pay a $1.6 billion termination fee to the Company.

Additionally, in the event that the Merger Agreement is terminated by either the Company or Express Scripts due to (1) a legal restraint relating to a regulatory law prohibiting consummation of the Merger having become final and non-appealable or (2) the Merger not having been consummated on or prior to December 8, 2018 (subject to an extension to June 8, 2019 if extended by the Company or Express Scripts under certain circumstances); and, in the case of clause (2), at the time of such termination, all of the conditions to the Company’s obligation to consummate the Merger have been satisfied other than those that relate to the absence of a legal restraint relating to a regulatory law or the receipt of a regulatory approval, the Company may be required to pay Express Scripts a reverse termination fee of $2.1 billion.

Other transactions

In May 2018, the Company announced an agreement to acquire OnePath Life NZ Limited from ANZ Bank New Zealand Limited, a part of Australia and New Zealand Banking Group Limited, for NZ$700 million (approximately $470 million as of June 30, 2018).  The Company expects that the transaction will be completed no later than the first quarter of 2019, subject to final regulatory approval.

Transaction-related costs

In connection with the proposed acquisition of Express Scripts, as well as other transactions including the terminated merger with Anthem, Inc. (“Anthem”), the Company has incurred costs of $130 million pre-tax ($109 million after-tax) for the three months and $190 million pre-tax ($159 million after-tax) for the six months ended June 30, 2018.  Transaction-related costs were $16 million pre-tax ($12 million after-tax) for the three months and $79 million pre-tax ($61 million after-tax) for the six months ended June 30, 2017.  These costs consisted primarily of fees for legal, advisory and other professional services as well as amortization of the Bridge Facility fees in 2018. In the second quarter of 2017, the Company recognized an incremental tax benefit of $59 million for costs that became deductible upon the termination of its merger agreement with Anthem.  If the Express Scripts acquisition is consummated, a significant portion of the costs related to that acquisition will not be deductible for federal income tax purposes.

Note 4 – Earnings Per Share

Basic and diluted earnings per share (“EPS”) were computed as follows:

	Three Months Ended
	June 30, 2018						June 30, 2017
(Shares in thousands, dollars in millions, except per share amounts)	Basic		Effect of Dilution		Diluted		Basic		Effect of Dilution		Diluted
Shareholders’ net income	$	806			$	806	$	813			$	813
Shares
Weighted average	242,453				242,453		254,087				254,087
Common stock equivalents			2,886		2,886				3,974		3,974
Total shares	242,453		2,886		245,339		254,087		3,974		258,061
EPS	$	3.32	$	(0.03)	$	3.29	$	3.20	$	(0.05)	$	3.15

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	Six Months Ended
	June 30, 2018						June 30, 2017
(Shares in thousands, dollars in millions, except per share amounts)	Basic		Effect of Dilution		Diluted		Basic		Effect of Dilution		Diluted
Shareholders’ net income	$	1,721			$	1,721	$	1,411			$	1,411
Shares
Weighted average	242,316				242,316		254,879				254,879
Common stock equivalents			3,248		3,248				4,034		4,034
Total shares	242,316		3,248		245,564		254,879		4,034		258,913
EPS	$	7.10	$	(0.09)	$	7.01	$	5.54	$	(0.09)	$	5.45

The following outstanding employee stock options were not included in the computation of diluted earnings per share for the three months and six months ended June 30, 2018 and 2017 because their effect was anti-dilutive.

	Three Months Ended		Six Months Ended
	June 30,		June 30,
(In millions)	2018	2017	2018	2017
Anti-dilutive options	0.9	1.2	0.9	1.9

The Company held approximately 52.8 million shares of common stock in Treasury as of June 30, 2018, and 43.3 million shares as of June 30, 2017.

Note 5— Debt

The outstanding amounts of debt and capital leases were as follows:

	June 30,		December 31,
(In millions)	2018		2017
Short-term
Commercial paper	$	100	$	100
Current maturities of long-term debt		-		131
Other, including capital leases	9		9
Total short-term debt	$	109	$	240
Long-term
$250 million, 4.375% Notes due 2020	$	247	$	249
$300 million, 5.125% Notes due 2020	297		299
$78 million, 6.37% Notes due 2021	78		78
$300 million, 4.5% Notes due 2021	296		299
$750 million, 4% Notes due 2022	746		745
$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		894
$600 million, 3.05% Notes due 2027	594		594
$259 million, 7.875% Debentures due 2027	258		258
$45 million, 8.3% Step Down Notes due 2033	45		45
$191 million, 6.15%  Notes due 2036	190		190
$121 million, 5.875% Notes due 2041	119		119
$317 million, 5.375% Notes due 2042	315		315
$1,000 million, 3.875% Notes due 2047	988		988
Other, including capital leases	11		9
Total long-term debt	$	5,195	$	5,199

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Bridge Facility.  In March 2018, in connection with the proposed Merger, the Company and New Cigna entered into a commitment letter (the “Commitment Letter”) with Morgan Stanley Senior Funding, Inc., The Bank of Tokyo-Mitsubishi UFJ, Ltd and 21 additional banks, to provide a $26.7 billion 364-day senior unsecured bridge facility (the “Bridge Facility”).  The Bridge Facility commitment will be reduced if the Company, New Cigna or, in some instances, any of their domestic subsidiaries obtains certain other debt financing, completes certain asset sales or certain equity issuances.  Concurrently with entry into the Term Loan Credit Agreement described below, the Bridge Facility commitment was reduced to $23.7 billion.  The proceeds of the Bridge Facility may be used to finance the Merger, repay certain existing Express Scripts debt and pay related fees and expenses.

The definitive documentation related to the Bridge Facility, if drawn upon at closing of the proposed Merger, will contain customary covenants and restrictions, including a financial covenant that the Company or New Cigna may not permit its leverage ratio – which is the ratio of total consolidated debt to total consolidated capitalization – to be greater than 60%.

The Company accrued approximately $140 million in fees upon entering into the Commitment Letter.  The Company paid $111 million during the six months ended June 30, 2018 and expects to pay the remainder of the fees over the balance of 2018.  The fees were capitalized in other assets and are being amortized to operating expenses over the period the Bridge Facility is outstanding.  The Company recorded amortization of the Bridge Facility fees of $65 million during the three months and $85 million during the six months ended June 30, 2018.

Revolving Credit Agreement.  On April 6, 2018, in connection with the proposed Merger, the Company and New Cigna entered into the Revolving Credit and Letter of Credit Agreement (the “Revolving Credit Agreement”), which matures on April 6, 2023 and is diversified among 23 banks.

Prior to the Merger, the Company can borrow up to $1.5 billion for general corporate purposes, of which up to $500 million is available for the issuance of letters of credit.  On and after the Merger, New Cigna can borrow up to $3.25 billion for general corporate purposes, of which up to $500 million is available for the issuance of letters of credit.  The Revolving Credit Agreement also includes an option to increase the facility amount by up to $500 million and an option to extend the termination date for additional one year periods, subject to the consent of the banks.

The Revolving Credit Agreement contains customary covenants and restrictions, including a financial covenant that the Company or New Cigna may not permit its leverage ratio to be greater than 50% prior to the Merger or 60% after the Merger.

Term Loan Credit Agreement.  On April 6, 2018, the Company and New Cigna entered into a Term Loan Credit Agreement (the “Term Loan Credit Agreement”), which is diversified among 26 banks.  The Term Loan Credit Agreement provides for a three-year unsecured term loan facility in aggregate principal amount of $3.0 billion, which will be available to finance the Merger, repay certain existing indebtedness of Express Scripts, and pay fees and expenses in connection with the Merger.

The Term Loan Credit Agreement contains customary covenants and restrictions, including a financial covenant that the Company, or after the Merger, New Cigna may not permit its leverage ratio to be greater than 60%.

Prior to the Merger, the Company is the borrower under the Bridge Facility, the Revolving Credit Agreement and the Term Loan Credit Agreement.  On and after the Merger, New Cigna will be the borrower under each of these agreements.  In certain circumstances, certain subsidiaries of the Company, or after the Merger, New Cigna will be required to guarantee each other’s obligations under the Bridge Facility, the Term Loan Credit Agreement and the Revolving Credit Agreement.

The Company was in compliance with its debt covenants as of June 30, 2018.

Note 6— Global Health Care Medical Costs Payable

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 facilities.  See Note 7 to the Consolidated Financial Statements in the Company’s 2017 Form 10-K for further information about the assumptions and estimates used to establish this liability.

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Activity in medical costs payable was as follows:

	Six Months Ended
	June 30,		June 30,
(In millions)	2018		2017
Beginning balance	$	2,719	$	2,532
Less: Reinsurance and other amounts recoverable	265		275
Beginning balance, net	2,454		2,257
Incurred costs related to:
Current year	10,906		10,077
Prior years	(168)		(238)
Total incurred	10,738		9,839
Paid costs related to:
Current year	8,557		7,823
Prior years	1,873		1,684
Total paid	10,430		9,507
Ending balance, net	2,762		2,589
Add: Reinsurance and other amounts recoverable	243		259
Ending balance	$	3,005	$	2,848

Reinsurance and other amounts recoverable in the above table includes 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 8 for additional information on reinsurance.

The total of incurred but not reported liabilities plus expected development on reported claims, including reported claims in process, was $2.9 billion at June 30, 2018 and $2.7 billion at June 30, 2017.  The remaining balance in both periods reflects amounts due for physician incentives and other medical care expenses and services payable.

For the periods ended June 30, incurred costs related to prior years were attributable to the following factors:

	Six Months Ended
(Dollars in millions)	June 30, 2018				June 30, 2017
	$		%(1)		$		%(2)
Actual completion factors	$	93	0.5	%	$	108	0.6	%
Medical cost trend	66		0.3		121		0.6
Other	9		-		9		-
Total favorable (unfavorable) variance	$	168	0.8	%	$	238	1.2	%

(1) Percentage of current year incurred costs as reported for the year ended December 31, 2017.

(2) Percentage of current year incurred costs as reported for the year ended December 31, 2016.

Incurred costs related to prior years in the table above, although adjusted through shareholders’ net income, do not directly correspond to an increase or decrease to shareholders’ net income.  The primary reason for this difference is that decreases to prior year incurred costs pertaining to the portion of the liability established for moderately adverse conditions are not considered as impacting shareholders’ net income if they are offset by increases in the current year provision for moderately adverse conditions.

Favorable prior year development increased shareholders’ net income by $66 million for the six months ended June 30, 2018 compared with $97 million for the six months ended June 30, 2017.  This development was attributed to both medical cost trend and completion factors resulting from lower than expected utilization of medical services in both periods.

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Note 7 — Liabilities for Unpaid Claims and Claim Expenses

The following information relates to unpaid claims and claim expense liabilities for short-duration insurance contracts other than those sold by the Global Health Care segment.  See Note 8 to the Consolidated Financial Statements in the Company’s 2017 Form 10-K for further information about the assumptions and estimates used to establish this liability.

The liability for unpaid claims and claim expenses by segment as of June 30 is as follows:

(In millions)	June 30, 2018		June 30, 2017
Group Disability and Life	$	4,573	$	4,400
Global Supplemental Benefits	480		452
Other Operations	193		187
Unpaid claims and claim expenses	$	5,246	$	5,039

Activity in the Group Disability and Life and the Global Supplemental Benefits segments’ liabilities for unpaid claims and claim expenses is presented in the following table.  Liabilities associated with Other Operations are excluded because they pertain to obligations for long-duration insurance contracts or, if short-duration, the liabilities have been fully reinsured.

	Six Months Ended
(In millions)	June 30, 2018		June 30, 2017
Beginning balance	$	4,975	$	4,726
Less: Reinsurance	137		121
Beginning balance, net	4,838		4,605
Incurred claims related to:
Current year	2,382		2,224
Prior years:
Interest accretion	77		83
All other incurred	(66)		(71)
Total incurred	2,393		2,236
Paid claims related to:
Current year	1,204		1,074
Prior years	1,101		1,058
Total paid	2,305		2,132
Foreign currency	(14)		13
Ending balance, net	4,912		4,722
Add: Reinsurance	141		130
Ending balance	$	5,053	$	4,852

Reinsurance in the table above reflects amounts due from reinsurers related to unpaid claims liabilities.  The Company’s insurance subsidiaries enter into agreements with other companies primarily to limit losses from large exposures and to permit recovery of a portion of incurred losses.  See Note 8 for additional information on reinsurance.

The majority of the liability for unpaid claims and claim expenses is related to disability claims with long-tailed payouts.  Interest earned on assets backing these liabilities is an integral part of pricing and reserving.  Therefore, interest accreted on prior year balances is shown as a separate component of prior year incurred claims.  This interest is calculated by applying the average discount rate used in determining the liability balance to the average liability balance over the period.  The remaining prior year incurred claims amount primarily reflects updates to the Company’s liability estimates and variances between actual experience during the period relative to the assumptions and expectations reflected in determining the liability.  Assumptions reflect the Company’s expectations over the life of the book of business and will vary from actual experience in any period, both favorably and unfavorably, with variation in resolution rates being the most significant driver for the long-term disability business and variations in mortality and morbidity being the most significant factors for other business.  Favorable prior year incurred claims reported for the six months ended June 30, 2018 largely reflect favorable life and voluntary loss ratio experience relative to expectations for claims incurred in 2017.  Favorable prior year incurred claims reported for the six months ended June 30, 2017 largely reflect improved long-term disability resolution rate experience relative to expectations.

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Note 8 — Reinsurance

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 being acquired.  Because reinsurance does not relieve the originating insurer of liability, such liabilities must continue to be reported along with the related reinsurance recoverables.  The Company regularly evaluates the financial condition of its reinsurers and monitors concentrations of its credit risk.

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 below:

(In millions)

Line of Business	Reinsurer(s)	June 30, 2018		December 31, 2017		Collateral and Other Terms at June 30, 2018
Ongoing operations
Global Health Care, Global Supplemental Benefits, Group Disability and Life, COLI	Various	$	447	$	454	Recoverables from approximately 85 reinsurers, used in the ordinary course of business.  Current balances range from less than $1 million up to $70 million.  Over 70% of the balance is from companies rated as investment grade by Standard & Poor’s, and 12% is secured by assets in trusts or letters of credit.
Total recoverables related to ongoing operations		447		454
Acquisition, disposition or runoff activities
Individual Life and Annuity (sold in 1998)	Lincoln National Life and Lincoln Life & Annuity of New York	3,361		3,436		Both companies’ ratings are sufficient to avoid triggering a contractual obligation to fully secure the outstanding balance.
GMDB	Berkshire	889		928		100% secured by assets in a trust.
	Other	33		34		100% secured by assets in a trust or letters of credit.
Retirement Benefits Business (sold in 2004)	Prudential Retirement Insurance and Annuity	819		850		100% secured by assets in a trust.
Supplemental Benefits Business (2012 acquisition)	Great American Life	272		283		100% secured by assets in a trust.
Other run-off reinsurance	Various	56		61		100% secured by assets in trusts.
Total recoverables related to acquisition, disposition or runoff activities		5,430		5,592
Total reinsurance recoverables		$	5,877	$	6,046

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

In the Company’s Consolidated Statements of Income, premiums were reported net of amounts ceded to reinsurers and Global Health Care medical costs and other benefit expenses were reported net of reinsurance recoveries in the following amounts:

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	Three Months Ended				Six Months Ended
(In millions)	June 30, 2018		June 30, 2017		June 30, 2018		June 30, 2017
Ceded premiums
Individual life insurance and annuity business sold	$	34	$	33	$	71	$	72
Other	98		54		196		135
Total ceded premiums	$	132	$	87	$	267	$	207
Reinsurance recoveries
Individual life insurance and annuity business sold	$	56	$	66	$	113	$	136
Other	-		17		47		46
Total reinsurance recoveries	$	56	$	83	$	160	$	182

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 of this business, net of other reinsurance arrangements existing at that time.  The Berkshire reinsurance agreement is subject to an overall limit with approximately $3.4 billion remaining as of June 30, 2018.

GMDB is accounted for as reinsurance and GMIB assets and liabilities are reported as derivatives at fair value as discussed below.  GMIB assets are reported in other assets, including intangibles, and GMIB liabilities are reported in accounts payable, accrued expenses and other liabilities.

GMDB

The Company estimates the gross liability and reinsurance recoverable with an internal model based on the Company’s experience and future expectations over an extended period, consistent with the long-term nature of this product.  As a result of the reinsurance transaction, reserve increases have a corresponding increase in the recorded reinsurance recoverable, provided the increased recoverable remains within the overall Berkshire limit (including the GMIB asset presented below).

The following table presents the account value, net amount at risk and number 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 should be reimbursed in full for these payments.

(Dollars in millions, excludes impact of reinsurance ceded)	June 30, 2018		December 31, 2017
Account value	$	9,667	$	10,109
Net amount at risk	$	2,044	$	2,112
Number of contractholders	230,000		245,000

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 appropriate waiting period.  The Company has purchased retrocessional coverage (“GMIB assets”) for these contracts.

The Company reports GMIB liabilities and assets as derivatives at fair value because the 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.

20

As of June 30, 2018 and December 31, 2017, there were three reinsurers for GMIB as follows:

(In millions)

Line of Business	Reinsurer	June 30, 2018		December 31, 2017		Collateral and Other Terms at June 30, 2018
GMIB	Berkshire	$	320	$	359	100% secured by assets in a trust.
	Sun Life Assurance Company of Canada	191		221
	Liberty Re (Bermuda) Ltd.	173		197		100% secured by assets in a trust.
Total GMIB recoverables reported in other assets		$	684	$	777

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 9.

The only assumption expected to impact the Company’s 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 fair value 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 calculate 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 the 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 June 30, 2018 value of $782 million with no future returns.

The Company has reinsurance coverage in place that covers the exposures on these contracts.  Using these hypothetical assumptions, the GMIB exposure of $549 million is lower than the recorded liability for GMIB calculated using fair value assumptions.

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Note 9 — Fair Value Measurements

The Company carries certain financial instruments at fair value in the financial statements including fixed maturities, certain equity securities, short-term investments and derivatives.  Other financial instruments are measured at fair value only under certain conditions, 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 the liability with the creditor.

The Company’s financial assets and liabilities carried at fair value have been classified based upon a hierarchy defined by GAAP.  The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3).  An asset’s or a liability’s classification is based on the lowest level of input that is significant to its measurement.  For example, a financial asset or liability carried at fair value would be classified in Level 3 if unobservable inputs were significant to the instrument’s fair value, even though the measurement may be derived using inputs that are both observable (Levels 1 and 2) and unobservable (Level 3).

The Company estimates fair values using prices from third parties or internal pricing methods.  Fair value estimates received from third-party pricing services are based on reported trade activity and quoted market prices when available, and other market information that a market participant may use to estimate fair value.  The internal pricing methods are performed by the Company’s investment professionals and generally involve using discounted cash flow analyses, incorporating current market inputs for similar financial instruments with comparable terms and credit quality, as well as other qualitative factors.  In instances where there is little or no market activity for the same or similar instruments, fair value is estimated using methods, models and assumptions that the Company believes a hypothetical market participant would use to determine a current transaction price.  These valuation techniques involve some level of estimation and judgment that becomes significant with increasingly complex instruments or pricing models.

The Company is responsible for determining fair value, 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 appropriate estimates of fair value.  The controls executed by the Company include evaluating changes in prices and monitoring for potentially stale valuations.  The Company also performs sample testing of sales values to confirm the accuracy of prior fair value estimates.  The minimal exceptions identified during these processes indicate that adjustments to prices are infrequent and do not significantly impact valuations.  Annually, we conduct an on-site visit of the most significant pricing service to review their processes, methodologies and controls.  This on-site review includes a walk-through of inputs for a sample of securities held across various asset types to validate the documented pricing process.

Financial Assets and Financial Liabilities Carried at Fair Value

The following table provides information as of June 30, 2018 and December 31, 2017 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 generally accrue directly to policyholders.

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	Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)				Total
(In millions)	As of June 30, 2018		As of December 31, 2017		As of June 30, 2018		As of December 31, 2017		As of June 30, 2018		As of December 31, 2017		As of June 30, 2018		As of December 31, 2017
Financial assets at fair value
Fixed maturities
Federal government and agency	$	271	$	253	$	509	$	526	$	-	$	-	$	780	$	779
State and local government	-		-		1,045		1,287		-		-		1,045		1,287
Foreign government	-		-		2,411		2,442		44		45		2,455		2,487
Corporate	-		-		18,478		17,658		307		430		18,785		18,088
Mortgage and other asset-backed	-		-		384		343		144		154		528		497
Total fixed maturities	271		253		22,827		22,256		495		629		23,593		23,138
Equity securities (1)	391		412		68		73		33		103		492		588
Subtotal	662		665		22,895		22,329		528		732		24,085		23,726
Short-term investments	-		-		220		199		-		-		220		199
GMIB assets	-		-		-		-		684		777		684		777
Other derivative assets	-		-		32		2		-		-		32		2
Total financial assets at fair value, excluding separate accounts and real estate funds	$	662	$	665	$	23,147	$	22,530	$	1,212	$	1,509	$	25,021	$	24,704
Real estate funds priced at NAV as a practical expedient (2)													263		N/A
Financial liabilities at fair value
GMIB liabilities	$	-	$	-	$	-	$	-	$	653	$	762	$	653	$	762
Other derivative liabilities	-		-		54		25		-		-		54		25
Total financial liabilities at fair value, excluding separate accounts	$	-	$	-	$	54	$	25	$	653	$	762	$	707	$	787

(1) Beginning in 2018, certain private equity securities are no longer carried at fair value under the policy election of ASU 2016-01 (Recognition and Measurement of Financial Assets and Financial Liabilities).  As of December 31, 2017, private equity securities of $70 million were included in the Level 3 amount.  See Note 10 for additional information on this accounting policy change.

(2) Beginning in 2018 upon adopting ASU 2016-01, certain real estate funds are carried at fair value (previously carried at cost) based on the Company’s ownership share of the equity of the investee (Net Asset Value (“NAV”) as a practical expedient) including changes in the fair value of its underlying investments.  The funds have a quarterly redemption frequency, 45-90 day redemption notice period and $65 million in unfunded commitments as of June 30, 2018.  See Note 10 for additional information on this accounting policy change.  Prior periods are designated as not applicable (“N/A”) in this table.

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 returns, 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 in active markets, quoted prices from those willing to trade in markets that are not active, or other inputs that are market observable or can be corroborated by market data for the term of the instrument.  Such other inputs include market interest rates and volatilities, spreads and yield curves.  An instrument is classified in Level 2 if the Company determines that unobservable inputs are insignificant.

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Fixed maturities and equity securities.Approximately 95% of the Company’s investments in fixed maturities and equity securities are classified in Level 2 including most public and private corporate debt and hybrid equity securities, federal agency and municipal bonds, non-government mortgage-backed securities and preferred stocks.  Because many fixed maturities do not trade daily, third-party pricing services and internal valuation 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.  These models calculate fair values by discounting future cash flows at estimated market interest rates.  Such market rates are derived by calculating the appropriate spreads over comparable U.S. Treasury securities, based on the credit quality, industry and structure of the asset.  Typical inputs and assumptions to pricing models include, but are not limited to, a combination of benchmark yields, reported trades, issuer spreads, liquidity, benchmark securities, bids, offers, reference data, and industry and economic events.  For mortgage-backed securities, inputs and assumptions may also include characteristics of the issuer, collateral attributes, prepayment speeds and credit rating.

Nearly all of these instruments are valued using recent trades or pricing models.  Less than 1% of the fair value of investments classified in Level 2 represents foreign bonds that are valued using a single unadjusted market-observable input derived by averaging multiple broker-dealer quotes, consistent with local market practice.

Short-term investments are carried at fair value 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 Company is considered when estimating the fair values of these derivatives.  However, the Company is largely protected by collateral arrangements with counterparties and determined that no adjustment for credit risk was required as of June 30, 2018 or December 31, 2017.  The nature and use of these other derivatives are described in Note 11.

Level 3 Financial Assets and Financial Liabilities

Certain inputs for instruments classified in Level 3 are unobservable (supported by little or no market activity) and significant to their resulting fair value measurement.  Unobservable inputs reflect the Company’s best estimate of what hypothetical market participants would use to determine a transaction price for the asset or liability at the reporting date.

The Company classifies certain newly issued, privately-placed, complex or illiquid securities, as well as assets and liabilities relating to GMIB, in Level 3.  Approximately 2% 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 include 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 June 30, 2018 and December 31, 2017.  The range and weighted average basis point amounts (“bps”)  for liquidity and credit spreads (adjustment to discount rates) and price-to-earnings multiples for equity investments reflect the Company’s best estimates of the unobservable adjustments a market participant would make to calculate these 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 there 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 spreads is needed to value a more complex bond structure with multiple underlying collateral and no standard market valuation technique.  The weighting of credit spreads is primarily based on the underlying collateral’s characteristics and their proportional cash flows supporting the bond obligations.

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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 earnings 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 relative 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.

	Fair Value as of				Unobservable	Unobservable AdjustmentRange (Weighted Average) as of
(Fair value in millions )	June 30, 2018		December 31, 2017		Input	June 30, 2018	December 31, 2017
Fixed maturities
Mortgage and other asset-backed securities	$	144	$	154	Liquidity	60 - 350 (80) bps	60 - 370 (90) bps
					Weighting of credit spreads	190 - 300 (240) bps	180 - 290 (230) bps
Corporate and government fixed maturities	333		446		Liquidity	80 - 930 (240) bps	70 - 1,650 (300) bps
Total fixed maturities	477		600
Equity securities
Private equity securities (1)	N/A		70		Price-to-EBITDA multiples	N/A	5.0 - 12.0 (8.9)
Hybrid equity securities	33		33		Liquidity	230 bps (3)	270 bps (3)
Total equity securities	33		103
Subtotal	510		703
Securities not priced by the Company (2)	18		29
Total Level 3 securities	$	528	$	732

(1) Beginning in 2018, private equity securities are no longer carried at fair value under the policy election of ASU 2016-01 (Recognition and Measurement of Financial Assets and Financial Liabilities).  Current periods are designated as N/A in this table.

(2) The fair values for these securities use single, unadjusted non-binding broker quotes not developed directly by the Company.

(3) The range and weighted average is equivalent for this security type.

Significant increases in liquidity or credit spreads would result in lower fair value measurements while decreases in these inputs would result in higher fair value measurements.  Significant decreases in equity price-to-EBITDA multiples would result in lower fair value measurements while increases in these inputs would result in higher fair value measurements.  Generally, the unobservable inputs are not interrelated and a change in the assumption used for one unobservable input is not accompanied by a change in the other unobservable input.

GMIB contracts.  See discussion in Note 8.

Changes in Level 3 Financial Assets and Financial Liabilities Carried at Fair Value

The following table summarizes the changes in financial assets and financial liabilities classified in Level 3 for the three months and six months ended June 30, 2018 and 2017.  Separate account asset changes are reported separately in the Separate Accounts section as the changes in fair values of these assets generally accrue directly to the policyholders.  Gains and losses reported in these tables may include net changes in fair value that are attributable to both observable and unobservable inputs.

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	Fixed Maturities & Equity Securities				GMIB Assets				GMIB Liabilities
(In millions)	2018		2017		2018		2017		2018		2017
Balance at April 1,	$	596	$	727	$	717	$	777	$	(682)	$	(761)
Gains (losses) included in shareholders’ net income
GMIB fair value gain/(loss)	-		-		(27)		15		27		(15)
Other	(1)		1		1		-		(5)		(3)
Total gains (losses) included in shareholders’ net income	(1)		1		(26)		15		22		(18)
Gains (losses) included in other comprehensive income	(5)		5		-		-		-		-
Gains (losses) required to adjust future policy benefits for settlement annuities (1)	(2)		9		-		-		-		-
Purchases, sales, settlements
Purchases	6		65		-		-		-		-
Sales	-		(23)		-		-		-		-
Settlements	(13)		(12)		(7)		(15)		7		15
Total purchases, sales and settlements	(7)		30		(7)		(15)		7		15
Transfers into/(out of) Level 3
Transfers into Level 3	-		36		-		-		-		-
Transfers out of Level 3	(53)		(57)		-		-		-		-
Total transfers into/(out of) Level 3	(53)		(21)		-		-		-		-
Balance at June 30,	$	528	$	751	$	684	$	777	$	(653)	$	(764)
Total gains (losses) included in shareholders’ net income attributable to instruments held at the reporting date	$	(1)	$	-	$	(26)	$	15	$	22	$	(18)

	Fixed Maturities & Equity Securities				GMIB Assets				GMIB Liabilities
(In millions)	2018		2017		2018		2017		2018		2017
Balance at January 1,	$	732	$	776	$	777	$	799	$	(762)	$	(780)
Gains (losses) included in shareholders’ net income
GMIB fair value gain (loss)	-		-		(67)		4		69		(4)
Other	(21)		24		(2)		1		11		(7)
Total gains (losses) included in shareholders’ net income	(21)		24		(69)		5		80		(11)
Losses included in other comprehensive income	(10)		(3)		-		-		-		-
Gains (losses) required to adjust future policy benefits for settlement annuities (1)	(6)		9		-		-		-		-
Purchases, sales, settlements
Purchases	16		90		-		-		-		-
Sales	(11)		(70)		-		-		-		-
Settlements	(15)		(39)		(24)		(27)		29		27
Total purchases, sales and settlements	(10)		(19)		(24)		(27)		29		27
Transfers into/(out of) Level 3
Transfers into Level 3	20		76		-		-		-		-
Transfers out of Level 3 (2)	(177)		(112)		-		-		-		-
Total transfers into/(out of) Level 3	(157)		(36)		-		-		-		-
Balance at June 30,	$	528	$	751	$	684	$	777	$	(653)	$	(764)
Total gains (losses) included in shareholders’ net income attributable to instruments held at the reporting date	$	(8)	$	(6)	$	(69)	$	5	$	80	$	(11)

(1)  Amounts do not accrue to shareholders.

(2) Beginning in 2018, certain private equity securities are no longer carried at fair value under the policy election of ASU 2016-01 (Recognition and Measurement of Financial Assets and Financial Liabilities).  $70 million in private equity securities as of December 31, 2017 are included in the June 30, 2018 Transfers out of Level 3 amount.

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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; and

·     Other operating expenses for amounts related 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 (depreciation) 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 occurs.  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 2018 and 2017, transfers between Level 2 and Level 3 primarily reflected changes in liquidity and credit risk estimates for certain private placement issuers across several sectors including metals, mining, energy, electric, capital goods and consumer.  As noted above, transfers out of Level 3 during 2018 also include $70 million of private equity securities that are no longer carried at fair value.

Separate Accounts

Fair values and changes in the fair values of separate account assets generally accrue directly to the policyholders and are excluded from the Company’s revenues and expenses.  See Note 10 to the Consolidated Financial Statements contained in the Company’s 2017 Form 10-K for additional policy information related to separate accounts.

As of June 30, 2018 and December 31, 2017, separate account assets were as follows:

	Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)				Total
	June		December		June		December		June		December		June		December
	30,		31,		30,		31,		30,		31,		30,		31,
(In millions)	2018		2017		2018		2017		2018		2017		2018		2017
Guaranteed separate accounts (see Note 16)	$	208	$	215	$	299	$	308	$	-	$	-	$	507	$	523
Non-guaranteed separate accounts (1)	1,392		1,536		5,356		5,298		256		292		7,004		7,126
Subtotal	$	1,600	$	1,751	$	5,655	$	5,606	$	256	$	292	7,511		7,649
Non-guaranteed separate accounts priced at NAV as a practical expedient (1)													776		774
Total separate account assets													$	8,287	$	8,423

(1)  Non-guaranteed separate accounts included $3.9 billion as of June 30, 2018 and December 31, 2017 in assets supporting the Company’s pension plans, including $0.2 billion classified in Level 3 as of June 30, 2018 and $0.3 billion classified in Level 3 as of December 31, 2017.

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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.  The following tables summarize the changes in separate account assets reported in Level 3 for the periods ending June 30.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In millions)	2018		2017		2018		2017
Balance, beginning of period	$	262	$	330	$	292	$	331
Policyholder (losses) gains	(2)		10		43		37
Purchases, sales and settlements
Purchases	4		7		12		17
Sales	-		(17)		(72)		(52)
Settlements	(8)		-		(12)		(1)
Total purchases, sales and settlements	(4)		(10)		(72)		(36)
Transfers into (out of) Level 3
Transfers into Level 3	-		1		-		1
Transfers out of Level 3	-		(15)		(7)		(17)
Total transfers into (out of) Level 3	-		(14)		(7)		(16)
Balance, end of period	$	256	$	316	$	256	$	316

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 table below provides additional information on these investments.

	Fair Value as of				Unfunded		Data as of June 30, 2018 and December 31, 2017
					Commitments as		Redemption Frequency	Redemption Notice
(In millions)	June 30, 2018		December 31, 2017		of June 30, 2018		(if currently eligible)	Period
Securities Partnerships	$	485	$	458	$	302	Not applicable	Not applicable
Real Estate Funds	247		239		-		Quarterly	45-90 days
Hedge Funds	44		77		-		Up to Annually, varying by fund	30-90 days
Total	$	776	$	774	$	302

Assets and Liabilities Measured at Fair Value under Certain Conditions

Some financial assets and liabilities are not carried at fair value each reporting period, but may be measured using fair value only under certain conditions, such as investments when they become impaired including real estate, partnership entities, commercial mortgage loans, and certain equity securities with no readily determinable fair value.  There were no such impaired investments written down to fair value for the three and six months ended June 30, 2018.  Impaired values for these asset types representing less than 1% of total investments, were written down to their fair values, resulting in immaterial realized losses for the three months and six months ended June 30, 2017.

Fair Value Disclosures for Financial Instruments Not Carried at Fair Value

The following table includes the Company’s financial instruments not recorded at fair value that are subject to fair value disclosure requirements at June 30, 2018 and December 31, 2017.  In addition to universal life products and capital leases, financial instruments that are carried in the Company’s Consolidated Financial Statements at amounts that approximate fair value are excluded from the following table.

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	Classification in	June 30, 2018				December 31, 2017
(In millions)	the Fair Value Hierarchy	Fair Value		Carrying Value		Fair Value		Carrying Value
Commercial mortgage loans	Level 3	$	1,839	$	1,866	$	1,766	$	1,761
Long-term debt, including current maturities, excluding capital leases	Level 2	$	5,201	$	5,184	$	5,730	$	5,321

Fair values of off-balance sheet financial instruments were not material as of June 30, 2018 and December 31, 2017.

Note 10 — Investments

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 investment balances, net investment income and realized investment gains and losses.  See Note 9 for information about the valuation of the Company’s investment portfolio.  See Note 11 to the Consolidated Financial Statements contained in the Company’s 2017 Form 10-K for accounting policies for each investment type.  Updates to these policies resulting from the adoption of new accounting guidance in 2018 are provided below.

A.Investment Portfolio

Fixed Maturities

The amortized cost and fair value by contractual maturity periods for fixed maturities were as follows at June 30, 2018:

	Amortized		Fair
(In millions)	Cost		Value
Due in one year or less	$	1,561	$	1,569
Due after one year through five years	6,678		6,760
Due after five years through ten years	10,430		10,242
Due after ten years	3,935		4,494
Mortgage and other asset-backed securities	519		528
Total fixed maturities	$	23,123	$	23,593

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.

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			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(In millions)	Cost		Appreciation		Depreciation		Value
As of June 30, 2018
Federal government and agency	$	575	$	209	$	(4)	$	780
State and local government	978		69		(2)		1,045
Foreign government	2,354		120		(19)		2,455
Corporate	18,697		473		(385)		18,785
Mortgage and other asset-backed	519		19		(10)		528
Total fixed maturities	$	23,123	$	890	$	(420)	$	23,593
Investments supporting liabilities of the Company’s run-off settlement annuity business (included in above total) (1)	$	2,282	$	525	$	(25)	$	2,782
As of 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 fixed maturities	$	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

(1) Net unrealized appreciation for these investments is excluded from accumulated other comprehensive income.

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 expected recovery.

Based on this review, management believes the unrealized depreciation below to be temporary, and therefore has not impaired these amounts.  The table below summarizes fixed maturities in an unrealized loss position at June 30, 2018 by the length of time these securities have been in an unrealized loss position.  These fixed maturities were primarily corporate securities with a decline in fair value that reflects an increase in market yields since purchase.

	June 30, 2018							December 31, 2017
	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	$	9,283	$	9,566	$	(283)	1,944	$	3,272	$	3,309	$	(37)	797
Below investment grade	$	1,285	$	1,318	$	(33)	1,157	$	543	$	553	$	(10)	643
More than one year
Investment grade	$	1,759	$	1,852	$	(93)	470	$	1,503	$	1,549	$	(46)	373
Below investment grade	$	147	$	158	$	(11)	55	$	155	$	162	$	(7)	42

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Equity Securities

Accounting policy.  Upon adopting ASU 2016-01 beginning in 2018, changes in the fair values of equity securities that have a readily determinable fair value (primarily exchange-traded funds) are reported in other realized investment gains (losses).  As of June 30, 2018, the fair values of these securities were $443 million and cost was $453 million.  Also beginning in 2018, private equity securities of $68 million as of June 30, 2018, that do not have a readily determinable fair value are carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes.  The amount of impairments or value changes resulting from observable price changes was not material.

Equity securities also include hybrid investments consisting of preferred stock with call features that are carried at fair value with changes in fair value reported in other realized investment gains (losses) and dividends reported in net investment income.  As of June 30, 2018 and December 31, 2017, fair values of these securities were $49 million.  Cost was $64 million as of June 30, 2018, compared with $61 million as of 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.

Credit quality.  The Company regularly evaluates and monitors credit risk, beginning with the initial underwriting of a mortgage loan and continuing throughout the investment holding period.  Mortgage origination professionals employ an internal credit quality rating system designed to evaluate the relative risk of the transaction at origination that is then updated each year as part of the annual portfolio loan review.  The Company evaluates and monitors credit quality on an ongoing basis, classifying each loan as a loan in good standing, potential problem loan or problem loan.

Quality ratings are based on our evaluation of a number of key inputs related to the loan including real estate market-related factors such as rental rates and vacancies, and property-specific inputs such as growth rate assumptions and lease rollover statistics.  However, the two most significant contributors to the credit quality rating are the debt service coverage and loan-to-value ratios.  The debt service coverage ratio measures the amount of property cash flow available to meet annual interest and principal payments on the debt, with a ratio below 1.0 indicating that there is not enough cash flow to cover the required loan payments.  The loan-to-value ratio, commonly expressed as a percentage, compares the amount of the loan to the fair value of the underlying property collateralizing the loan.

The following table summarizes the credit risk profile of the Company’s commercial mortgage loan portfolio based on loan-to-value and debt service coverage ratios, as of June 30, 2018 and December 31, 2017:

(Dollars in millions)	As of June 30, 2018					As of December 31, 2017
			Average Debt		Average			Average Debt	Average
	Carrying		Service Coverage		Loan-to-	Carrying		Service Coverage	Loan-to-
Loan-to-Value Ratio	Value		Ratio		Value Ratio	Value		Ratio	Value Ratio
Below 60%	$	1,195		2.02		$	1,109	2.03
60% to 79%	595		1.95			652		2.24
80% to 100%	76		1.49			-		-
Total	$	1,866		1.97	57%	$	1,761	2.11	57%

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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 2018 and included an analysis of each underlying property’s December 31, 2017 annual financial statements, rent rolls, operating plans and budgets for 2018, a physical inspection of the property and other pertinent factors.  Based on historical results, current leases, lease expirations and rental conditions in each market, the Company estimates the current year and future stabilized property income and fair value for each loan.  Based on property values and cash flows estimated as part of this review, the average loan to value ratio at June 30, 2018 is unchanged from last year and remains very strong.  The portfolio’s average debt service coverage ratio decreased slightly at June 30, 2018 compared with December 31, 2017 due to loans transitioning from interest only to amortizing payments.

The Company will reevaluate a loan’s credit quality between annual reviews if new property information is received or an event such as delinquency or a borrower’s request for restructure causes management to believe that the Company’s estimate of financial performance, fair value or the risk profile of the underlying property has been impacted.

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 problem 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 fair value of the underlying real estate.  Certain commercial mortgage loans without valuation reserves are considered 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.  The Company recognizes interest income on impaired mortgage loans only when payment is actually received.

As of June 30, 2018 and December 31, 2017, there were no impaired commercial mortgage loans.  The average recorded investment in impaired loans and interest income on impaired loans were not material.

Other Long-Term Investments

Accounting policy.  Other long-term investments include investments in unconsolidated entities.  These entities include certain limited partnerships and limited liability companies holding real estate, securities or loans.  These investments are carried at cost plus the Company’s ownership percentage of reported income or loss in cases where the Company has significant influence.  Upon adopting ASU 2016-01 beginning in 2018, the investments are carried at fair value using NAV as a practical expedient in cases when the Company does not have significant influence.

Short-Term Investments and Cash Equivalents

Short-term investments and cash equivalents included the following types of issuers:

	June 30,		December 31,
(In millions)	2018		2017
Corporate securities	$	1,663	$	1,143
Federal government securities	$	621	$	604
Foreign government securities	$	161	$	159
Money market funds	$	10	$	12

B.Realized Investment Gains and Losses

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 equity securities and changes in valuation reserves on commercial mortgage loans.  The following realized gains and (losses) on investments exclude amounts required to adjust future policy benefits for the run-off settlement annuity business.

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	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In millions)	2018		2017		2018		2017
Fixed maturities	$	(26)	$	14	$	(46)	$	16
Equity securities	(7)		1		(26)		34
Commercial mortgage loans	-		(1)		-		(1)
Other investments, including derivatives	30		37		36		48
Realized investment (losses) gains before income taxes	(3)		51		(36)		97
Less income tax (benefit) expense	(1)		17		(11)		32
Net realized investment (losses) gains	$	(2)	$	34	$	(25)	$	65

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 $23 million for the six months ended June 30, 2018 and $13 million for the six months ended June 30, 2017.  Realized losses on equity securities still held at June 30, 2018 were $7 million for the three months and $26 million for the six months ended June 30, 2018.

The following table presents sales information for available-for-sale securities (fixed maturities in 2018, and fixed maturities and equity securities in 2017).  Gross gains on sales and gross losses on sales exclude amounts required to adjust future policy benefits for the run-off settlement annuity business.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In millions)	2018		2017		2018		2017
Proceeds from sales	$	774	$	516	$	1,273	$	930
Gross gains on sales	$	13	$	12	$	18	$	59
Gross losses on sales	$	(7)	$	(2)	$	(29)	$	(4)

Note 11 — 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).  The Company also uses derivative financial instruments to hedge the risk of changes in the net assets of certain of its foreign subsidiaries due to changes in foreign currency exchange rates, and to hedge the interest rate risk of its long-term debt.  The Company has written and purchased GMIB reinsurance contracts in its run-off reinsurance business that are accounted for as freestanding derivatives and discussed further in Note 8.  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 policy.  During the first quarter of 2018, the Company early adopted ASU 2017-12 (Targeted Improvements to Accounting for Hedging Activities) with no material impact to its financial statements.  The Company applies hedge accounting when derivatives are designated, qualified and highly effective as hedges.  Effectiveness is formally assessed and documented at inception and each period throughout the life of a hedge using various qualitative or quantitative methods appropriate for each hedge.  Under hedge accounting, the changes in fair value of the derivative and the hedged risk are generally recognized together and offset each other when reported in shareholders’ net income.  Changes in the fair value of a derivative instrument may not always equal changes in the fair value of the hedged item.  This is referred to as “hedge ineffectiveness” and, with the adoption of ASU 2017-12, is no longer measured and reported separately from the effective portion of the hedge.  The Company excludes certain components of derivative instruments’ changes in fair value from the assessment of hedge effectiveness.  With the adoption of ASU 2017-12, those excluded components are initially recorded in other comprehensive income and recognized in shareholders’ net income over the life of the derivative instrument as further discussed below.  See Note 9 for further information on our policies for determining fair value.  Derivative cash flows are generally reported in operating activities.

During the first quarter of 2018, the Company terminated its Fair Value Hedge of Long-Term Corporate Debt (notional value of $750 million as of December 31, 2017) with no material impact to the Company’s financial statements.  The following tables provide information on the Company’s other specific applications of derivative financial instruments during the periods ended June 30, 2018 and December 31, 2017.

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Economic  Hedges of Benchmark Interest Rates on Expected Debt Issuances	Notional Value (in millions)
Type of instrument.  Swaptions	June 30, 2018		December 31, 2017
	$	3,550	$	-
Purpose.  To hedge the benchmark interest rates on forecasted coupon cash flows on debt issuances to be used primarily to finance a portion of the proposed acquisition of Express Scripts expected later in 2018.
Terms of derivative instruments.  There is no upfront premium paid or received, and the instruments contain upper and lower threshold strike rates based on the benchmark interest rate.  These instruments provide offsetting economic benefits when the Company receives cash at settlement as rates rise above the upper threshold, and offsetting economic losses when the Company must pay cash at settlement as rates decline below the lower threshold.
Accounting.  Hedge accounting has not been designated for these instruments.  The fair values of the swaption contracts are reported in other assets, including other intangibles, or accounts payable, accrued expenses, and other liabilities.  Changes in fair value and settlements are reported in interest expense.

Cash Flow Hedges of Benchmark Interest Rates on Expected Debt Issuances	Notional Value (in millions)
Type of instrument.  Swaptions	June 30, 2018		December 31, 2017
	$	2,050	$	-
Purpose.  To hedge the benchmark interest rates on forecasted coupon cash flows on debt issuances expected later in 2018.
Terms of derivative instruments.  There is no upfront premium paid or received, and the instruments contain upper and lower threshold strike rates based on the benchmark interest rate.  These instruments provide offsetting economic benefits when the Company receives cash at settlement as rates rise above the upper threshold, and offsetting economic losses when the Company must pay cash at settlement as rates decline below the lower threshold.  The notional value of these derivatives matches the par value of the hedged debt issuance.
Accounting.  Using cash flow hedge accounting, the fair values of these instruments are reported in other assets, including other intangibles, or accounts payable, accrued expenses, and other liabilities.  Changes in fair value are reported in accumulated other comprehensive income (“AOCI”).  Upon issuance of the debt, any cumulative gain or loss on these contracts will begin amortizing to interest expense over the life of the hedged debt.

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Fair Value Hedges of Fixed Maturity Bonds	Notional Value (in millions)
Type of instrument.  Foreign currency swap contracts	June 30, 2018		December 31, 2017
	$	478	$	318
Purpose.  To hedge the foreign exchange related changes in fair values of certain fixed maturity foreign-denominated bonds.
Terms of derivative instruments.  The Company periodically exchanges cash flows between two currencies for both principal and interest.  Foreign currency swaps are Euros, British pounds and Australian dollars, and have terms for periods of up to thirty years.  The notional value of these derivatives matches the amortized cost of the hedged bonds.
Accounting.  Using fair value hedge accounting, swap fair values are reported in other long-term investments or in accounts payable, accrued expenses and other liabilities.  Changes in fair values attributable to foreign exchange risk of the swap contracts and the hedged bonds are reported in other realized investment gains and losses.  The portion of the swap contracts’ changes in fair value excluded from the assessment of hedge effectiveness is recorded in accumulated other comprehensive income and recognized in net investment income as swap coupon payments are accrued, offsetting the foreign denominated coupons received on the designated bonds.  Prior to adopting ASU 2017-12, changes in fair value of excluded components of the swap contracts were recognized immediately in realized investment gains and losses.

Net Investment Hedge of Certain International Subsidiaries	Notional Value (in millions)
Type of instrument.  Foreign currency swap contracts	June 30, 2018		December 31, 2017
	$	439	$	-
Purpose.  During the first quarter of 2018, the Company entered into fixed-for-fixed currency swaps to reduce the risk of changes in net assets due to changes in foreign currency spot exchange rates for certain foreign subsidiaries that conduct their business principally in Euros.
Terms of derivative instruments.  The Company receives fixed rate U.S. dollar coupon and principal payments, and pays fixed rate coupon and principal payments denominated in the functional currency of the hedged foreign subsidiary.  The notional value of hedging instruments matches the hedged amount of subsidiary net assets.  Foreign currency swaps are denominated in Euros.
Accounting.  As a net investment hedge, the fair values of the swap contracts are reported in other assets, including other intangibles, or in accounts payable, accrued expenses, and other liabilities.  The changes in fair values of these instruments are reported in other comprehensive income, specifically in translation of foreign currencies.  The portion of the change in swap fair values relating to foreign exchange spot rates will be recognized in earnings upon deconsolidation of the hedged foreign subsidiaries.  The remaining changes in swap fair value are excluded from the effectiveness assessment and recognized in other operating expenses as swap coupon payments are accrued.

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Economic Hedges of a Fixed Maturity Bond Portfolio	Notional Value (in millions)
Type of instrument.  Foreign currency forward contracts	June 30, 2018		December 31, 2017
	$	309	$	255
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 the Company’s foreign subsidiary in South Korea.
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.  The notional value of hedging instruments generally aligns with the fair value of the hedged bond portfolio.
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.

Gross fair values of our derivative financial instruments are presented in Note 9.  As of June 30, 2018 and December 31, 2017, and for the three months and six months ended June 30, 2018 and 2017, the effects of these derivative instruments on the Consolidated Financial Statements were not material, including amounts excluded from the assessment of hedge effectiveness, as well as associated gains or losses reclassified from accumulated other comprehensive income into shareholders’ net income.

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.  Certain of the Company’s over-the-counter derivative instruments contain provisions requiring either the Company 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 asset or liability positions of these derivatives were not material as of June 30, 2018 or December 31, 2017.

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Note 12 — Variable Interest Entities

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.

The Company determined it was not a primary beneficiary in any material variable interest entities as of June 30, 2018 or December 31, 2017.  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 limited partnerships and real estate limited partnerships defined as variable interest entities that 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 these partnerships’ operations and the limited partners do not have substantive kick-out or participating rights.  The Company’s maximum exposure to these entities of $2.7 billion across approximately 125 limited partnerships as of June 30, 2018 includes $1.4 billion reported in other long-term investments and commitments to contribute an additional $1.3 billion.  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 makes passive investments in certain asset-backed and corporate securities that are issued by variable interest entities whose sponsors or issuers are unaffiliated with the Company.  The Company receives fixed-rate cash flows from these investments and the maximum potential exposure to loss is limited to its carrying amount of $0.6 billion as of June 30, 2018, that is reported in fixed maturities.  The Company’s combined ownership interests are insignificant relative to the total principal amounts issued by these entities.

The Company is also involved in real estate joint ventures, independent physician associations (“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.

Note 13 — 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.  Generally, tax effects in AOCI are established at the currently enacted tax rate and reclassified to net income in the same period that the related pre-tax AOCI reclassifications are recognized.  As discussed in Note 2, the Company early adopted ASU 2018-02 effective January 1, 2018 and $229 million of stranded tax effects resulting from U.S. tax reform legislation enacted in 2017 were reclassified from AOCI to retained earnings.  Changes in the components of AOCI, including the reclassification of the stranded tax effects, were as follows:

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	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In millions)	2018		2017		2018		2017
Securities
Beginning balance	$	110	$	369	$	328	$	362
Reclassification adjustment to retained earnings related to U.S. tax reform legislation(1)	-		-		65		-
Reclassification adjustment to retained earnings related to new financial instruments guidance(1)	-		-		(4)		-
Adjusted beginning balance	110		369		389		362
(Depreciation) appreciation on securities	(176)		115		(555)		168
Tax benefit (expense)	37		(38)		113		(62)
Net (depreciation) appreciation on securities	(139)		77		(442)		106
Reclassification adjustment for losses (gains) included in shareholders’ net income (net realized investment gains)	(2)		(15)		28		(50)
Tax (expense) benefit	-		5		(6)		18
Net losses (gains) reclassified from AOCI to net income	(2)		(10)		22		(32)
Other comprehensive (loss) income, net of tax	(141)		67		(420)		74
Ending balance	$	(31)	$	436	$	(31)	$	436
Derivatives
Beginning balance	$	(11)	$	-	$	-	$	3
Reclassification adjustment from retained earnings related to new hedging guidance(1)	-		-		(6)		-
Adjusted beginning balance	(11)		-		(6)		3
(Depreciation) on derivatives	(10)		-		(16)		-
Tax benefit	2		-		3		-
Net (depreciation) on derivatives	(8)		-		(13)		-
Reclassification adjustment for (gains) included in shareholders’ net income (net realized investment gains)	-		-		-		(4)
Tax benefit	-		-		-		1
Net (gains) reclassified from AOCI to net income	-		-		-		(3)
Other comprehensive (loss), net of tax	(8)		-		(13)		(3)
Ending balance	$	(19)	$	-	$	(19)	$	-
Translation of foreign currencies
Beginning balance	$	(24)	$	(257)	$	(65)	$	(369)
Reclassification adjustment to retained earnings related to U.S. tax reform legislation(1)	-		-		(4)		-
Adjusted beginning balance	(24)		(257)		(69)		(369)
Translation of foreign currencies	(151)		30		(105)		141
Tax (expense) benefit	(1)		(3)		(2)		(2)
Net translation of foreign currencies	(152)		27		(107)		139
Ending balance	$	(176)	$	(230)	$	(176)	$	(230)

(1) See Note 2 for further information about adjustments resulting from the Company’s adoption of new accounting standards in 2018.

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	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In millions)	2018		2017		2018		2017
Postretirement benefits liability
Beginning balance	$	(1,622)	$	(1,364)	$	(1,345)	$	(1,378)
Reclassification adjustment to retained earnings related to U.S. tax reform legislation(1)	-		-		(290)		-
Adjusted beginning balance	(1,622)		(1,364)		(1,635)		(1,378)
Reclassification adjustment for amortization of net losses from past experience and prior service costs (other operating expenses)	17		17		34		32
Reclassification adjustment for settlement (other operating expenses)	-		-		-		6
Tax (expense)	(3)		(7)		(7)		(14)
Net adjustments reclassified from AOCI to net income	14		10		27		24
Valuation update	(12)		2		(12)		2
Tax benefit (expense)	3		-		3		-
Net change due to valuation update	(9)		2		(9)		2
Other comprehensive income, net of tax	5		12		18		26
Ending balance	$	(1,617)	$	(1,352)	$	(1,617)	$	(1,352)

(1) See Note 2 for further information about adjustments resulting from the Company’s adoption of new accounting standards in 2018.

Note 14 — Pension and Other Postretirement Benefit Plans

The Company and certain of its subsidiaries provide pension, health care and life insurance defined benefits to eligible retired employees, spouses and other eligible dependents through various domestic and foreign plans.  The effect of its foreign pension and other postretirement benefit plans is immaterial to the Company’s results of operations, liquidity and financial position.  The Company froze its defined benefit postretirement medical plan in 2013 and its primary domestic pension plans in 2009.

As further discussed in Note 16, 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 related to this litigation is adopted, the pension benefit obligation will be updated to reflect benefits resulting from this litigation.

Pension and Other Postretirement Benefits.  Components of net pension and net other postretirement benefit costs were as follows:

	Pension Benefits								Other Postretirement Benefits
	Three Months Ended				Six Months Ended				Three Months Ended				Six Months Ended
	June 30,				June 30,				June 30,				June 30,
(In millions)	2018		2017		2018		2017		2018		2017		2018		2017
Service cost	$	-	$	1	$	1	$	1	$	-	$	-	$	-	$	-
Interest cost	42		45		84		93		2		2		4		5
Expected long-term return on plan assets	(64)		(64)		(128)		(129)		-		-		-		-
Amortization of:
Net loss from past experience	18		17		35		33		-		-		-		-
Prior service cost	-		-		-		-		(1)		-		(1)		(1)
Settlement loss	-		-		-		6		-		-		-		-
Net cost	$	(4)	$	(1)	$	(8)	$	4	$	1	$	2	$	3	$	4

All components of pension and other postretirement benefit costs are reported in operating expenses.  The Company funds its domestic qualified pension plans at least at the minimum amount required by the Employee Retirement Income Security Act of 1974 and the Pension Protection Act of 2006.  The Company did not make any pension contributions during the six months ended June 30, 2018, and does not expect to make any pension contributions for the remainder of 2018.

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Note 15 — Income Taxes

A. Income Tax Expense

The consolidated effective tax rate decreased to 25.6% for the six months ended June 30, 2018 compared with 30.7% for the six months ended June 30, 2017.  The significantly lower effective tax rate for 2018 was attributable to a lower U.S. tax rate effective January 1, 2018 resulting from U.S. tax reform legislation enacted in 2017.  This favorable effect was partially offset by the reinstatement of the non-deductible health insurance industry tax in 2018 and the absence of an incremental tax benefit recognized in the second quarter of 2017 associated with merger-related costs (see Note 3).

For the six months ended June 30, 2018, there were no adjustments to the provisional amounts first recognized in fourth quarter 2017 as a result of U.S. tax reform legislation.  In accordance with guidance of the staff of the Securities and Exchange Commission, the Company’s accounting for these amounts will be evaluated and adjusted, if needed, until we file our 2017 U.S. tax return later in 2018.  In addition, the Company has evaluated the global intangible low-taxed income (“GILTI”) provisions of U.S. tax reform that became effective January 1, 2018.  For the six months ended June 30, 2018, the GILTI tax impact was immaterial.  The Company will continue to evaluate these provisions in future periods as further guidance emerges.  It is the Company’s policy to recognize any GILTI taxes as period costs when incurred.

The Company’s foreign operations continue to maintain a significant portion of their earnings overseas.  These undistributed earnings are deployed outside of the United States predominantly in support of the liquidity and regulatory capital requirements of our foreign operations as well as to support growth initiatives overseas.  The Company does not intend to repatriate these earnings to the United States.  If the Company had intended to repatriate these foreign earnings to the United States, the Company would have recorded additional deferred tax liabilities of approximately $138 million for foreign withholding taxes as of June 30, 2018.  A portion of these taxes may be eligible for credit against the Company’s U.S. tax liability.

B. Unrecognized Tax Benefits

Changes in unrecognized tax benefits were immaterial for the six months ended June 30, 2018.

Note 16 — Contingencies and Other Matters

The Company, through its subsidiaries, is contingently liable for various guarantees provided in the ordinary course of business.

A. Financial Guarantees:  Retiree and Life Insurance Benefits

Separate account assets are contractholder funds maintained in accounts with specific investment objectives.  The Company records separate account liabilities equal to separate account assets.  In certain cases, the Company guarantees a minimum level of benefits for retirement and insurance contracts written in separate accounts and establishes an additional liability if management believes that the Company will be required to make a payment under these guarantees.

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 assets that exceed a certain percentage of benefit obligations.  If employers fail to do so, the Company or an affiliate of the buyer of the retirement benefits business (Prudential Retirement Insurance and Annuity Company or “Prudential”) has the right to redirect the management of the related assets to provide for benefit payments.  As of June 30, 2018 employers maintained assets that exceeded the benefit obligations under these arrangements of approximately $460 million.  Approximately 12% of these are reinsured by Prudential.  The remaining guarantees are provided by the Company with minimal reinsurance from third parties.  There were no additional liabilities required for these guarantees as of June 30, 2018.  Separate account assets supporting these guarantees are classified in Levels 1 and 2 of the GAAP fair value hierarchy (see Note 9).

The Company does not expect that these financial guarantees will have a material effect on the Company’s consolidated results of operations, liquidity or financial condition.

B. GMIB Contracts

See Note 8 for discussion.

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C. Certain Other Guarantees

The Company had indemnification obligations to a lender of approximately $90 million as of June 30, 2018, related to a borrowing by a certain real estate joint venture that the Company records as an investment.  This borrowing (a nonrecourse obligation of the Company) matures in 2021 and is secured by the joint venture’s real estate property with a fair value in excess of the loan amount.  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 that payments will be required under this indemnification obligation.  Any payment that might be required could be recovered through a refinancing or sale of the assets.  The Company also has recourse to the partner for their proportionate share of amounts paid.  There were no liabilities required for this indemnification obligation as of June 30, 2018.

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.

In first quarter 2017, the Commonwealth Court of Pennsylvania entered an order of liquidation of Penn Treaty Network America Insurance Company, together with its subsidiary American Network Insurance Company (collectively “Penn Treaty”, a long-term care insurance carrier), triggering guaranty fund coverage and a charge of approximately $130 million before-tax ($85 million after-tax).  As of June 30, 2018, the recorded liability for this assessment was approximately $42 million.  Updates to the amount of the Penn Treaty assessment were not material in 2018.  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 Regulatory 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 pending 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 the 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 15.

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 minimum amount of the range (if no amount is better than any other estimated amount in the range).  For material pending litigation and legal or regulatory matters discussed below, the Company provides disclosure in the aggregate of accruals and range of loss, or a statement that such information cannot be estimated.  The Company had pre-tax accruals as of June 30, 2018 of $195 million ($155 million after-tax) for the matters discussed below under “Litigation Matters.”  Due to numerous uncertain factors presented in these cases, it is not possible to estimate an aggregate range of loss (if any) for these matters at this time.  In light of the uncertainties involved in these matters, there is no assurance that their ultimate resolution will not exceed the amounts currently accrued by the Company.  An adverse outcome in one or more of these matters could be material to the Company’s results of operations, financial condition or liquidity for any particular period.

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 Plan’s cash balance formula discriminates against older employees; that the conversion resulted in a wear-away period (when the pre-conversion accrued benefit exceeded the post-conversion benefit); and that the Plan communications contained inaccurate or inadequate disclosures about these conditions.

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In 2008, the District Court (1) affirmed the Company’s right to convert to a cash balance plan prospectively beginning in 1998; (2) found for plaintiffs on the disclosure claim only; and (3) required the Company to pay pre-1998 benefits under the pre-conversion traditional annuity formula and post-1997 benefits under the post-conversion cash balance formula.  From 2008 through 2015, this case has undergone a series of court proceedings that resulted in the original District Court order being largely upheld.  In 2015, the Company submitted to the District Court its proposed method for calculating the additional pension benefits due to class members and plaintiffs responded in August 2015.

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 July 25, 2018, both parties 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.  On July 25, 2018, the Court issued an oral ruling.  It is anticipated that the Plan will be amended promptly to comply with the District Court’s orders and the remedy benefits will begin to be paid as soon as practicable thereafter.  The Company’s reserve for this litigation is adequate at June 30, 2018, based on calculations consistent with the latest guidance from the Court.

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 the 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 Jersey.  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 (“RICO”) 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 District 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 April 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 proceeding 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 appealed 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 asserted 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 continue to vigorously defend its position.

Regulatory Matters

Civil Investigative Demand.  The U.S. Department of Justice (“DOJ”) is conducting an industry review of Medicare Advantage organizations’ risk adjustment practices under Medicare Parts C and D, including medical chart reviews and health exams.  The Company is currently responding to information requests (civil investigative demands) received from the DOJ (U.S. Attorney’s Offices for the Eastern District of Pennsylvania and the Southern District of New York).  We will continue to cooperate with the DOJ’s investigation.

Disability claims regulatory matter.  During the second quarter of 2013, the Company finalized an agreement with the Departments of Insurance for Maine, Massachusetts, 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 disposition and (2) a two-year monitoring period followed by a re-examination.  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.

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Other Legal Matters

Litigation related to the Merger.  Following announcement of the Company’s Merger Agreement with Express Scripts as discussed in Note 3, putative class action complaints (collectively the “complaints”) have been filed against Express Scripts and the Express Scripts board of directors.  Certain of these complaints also include Cigna, New Cigna, Cigna Merger Sub and Express Scripts Merger Sub as defendants.  The complaints allege that the registration statement filed in connection with the Merger (and certain amendments thereto) omitted material information in violation of Sections 14(a) and 20(a) of the Exchange Act, rendering the registration statement false and misleading.  Among other remedies, the complaints seek to enjoin the Express Scripts special meeting and the closing of the Merger, as well as damages, costs and attorneys’ fees.  The defendants believe that the lawsuits are without merit.

Litigation with Anthem.  In February 2017, the Company delivered a notice to Anthem terminating the 2015 merger agreement, and notifying Anthem that it must pay the Company the $1.85 billion reverse termination fee pursuant to the terms of the merger agreement.  Also in February 2017, the Company filed suit against Anthem in the Delaware Court of Chancery (the “Chancery Court”) seeking declaratory judgments that the Company’s termination of the merger agreement was valid and that Anthem was not permitted to extend the termination date.  The complaint also sought payment of the reverse termination fee and additional damages in an amount exceeding $13 billion, including the lost premium value to the Company’s shareholders caused by Anthem’s willful breaches of the merger agreement.

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 compelling 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 February 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.

Note 17 — Segment Information

See Note 1 for a description of the Company’s reporting segments.

In the Company’s segment disclosures, we present “operating revenues,” defined as total revenues excluding realized investment results.  Beginning in 2018, realized investment results from the Company’s equity method joint ventures in the Global Supplemental Benefits segment are also excluded due to the potential increased volatility in investment results after adopting ASU 2016-01.  Investment gains or losses are managed based on factors largely unrelated to the underlying business purpose of each segment and are not indicative of the underlying performance of the Company’s core business operations, so they are excluded from operating revenues.

The Company uses “adjusted income (loss) from operations” as its principal financial measure of segment operating performance because management believes it best reflects the underlying results of core business operations and permits analysis of trends in underlying revenue, expenses and profitability.  Adjusted income from operations is defined as shareholders’ net income (loss) excluding after-tax realized investment gains and losses, amortization of other acquired intangible assets and special items.  Income or expense amounts that are excluded from adjusted income from operations because they are not indicative of underlying performance or the responsibility of operating segment management include:

·Realized investment results, including changes in market values of certain financial instruments between balance sheet dates, as well as gains and losses associated with invested asset sales.  As discussed above, beginning in 2018, realized investment results from the Company’s equity method joint ventures in the Global Supplemental Benefits segment are also excluded.

·Amortization of other intangible assets related to costs incurred for acquisitions

·Special items, if any, that management believes are not representative of the underlying results of operations due to the nature or size of these matters.  Further context about these items is provided in the footnotes listed in the table below.

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	Three Months Ended
	June 30, 2018				June 30, 2017
(In millions)	Before-tax		After-tax		Before-tax		After-tax
Transaction-related costs - see Note 3	$	130	$	109	$	16	$	(47)
Total impact from special items	$	130	$	109	$	16	$	(47)

	Six Months Ended
	June 30, 2018				June 30, 2017
	Before-tax		After-tax		Before-tax		After-tax
Transaction-related costs - see Note 3	$	190	$	159	$	79	$	2
Long-term care guaranty fund assessment - see Note 16(D)		-		-		129		83
Total impact from special items	$	190	$	159	$	208	$	85

Summarized segment financial information was as follows:

(In millions)	Global Health Care		Global Supplemental Benefits		Group Disability and Life		Other Operations		Corporate		Total
Three Months Ended June 30, 2018
Premiums, fees and other revenues and mail order pharmacy revenues (1)	$	9,025	$	1,050	$	1,031	$	33	$	(11)	$	11,128
Net investment income	125		36		96		88		7		352
Less net realized investment (losses) from equity method subsidiaries (2)	-		(20)		-		-		-		(20)
Operating revenues	$	9,150	$	1,106	$	1,127	$	121	$	(4)	$	11,500
Total revenues	$	9,155	$	1,075	$	1,132	$	119	$	(4)	$	11,477
Shareholders’ net income (loss)	$	780	$	86	$	107	$	19	$	(186)	$	806
After-tax adjustments to reconcile to adjusted income from operations
Net realized investment (gains) losses (2)	(4)		27		(4)		2		1		22
Amortization of other acquired intangible assets, net	13		5		-		-		-		18
Special item
Transaction-related costs	-		-		-		-		109		109
Adjusted income (loss) from operations	$	789	$	118	$	103	$	21	$	(76)	$	955

Three Months Ended June 30, 2017
Premiums, fees and other revenues and mail order pharmacy revenues (1)	$	8,100	$	924	$	1,023	$	30	$	(11)	$	10,066
Net investment income	92		31		89		88		8		308
Operating revenues	$	8,192	$	955	$	1,112	$	118	$	(3)	$	10,374
Total revenues	$	8,224	$	954	$	1,134	$	116	$	(3)	$	10,425
Shareholders’ net income (loss)	$	599	$	101	$	97	$	17	$	(1)	$	813
After-tax adjustments to reconcile to adjusted income from operations
Net realized investment (gains) losses	(22)		-		(14)		2		-		(34)
Amortization of other acquired intangible assets, net	14		4		-		-		-		18
Special items
Transaction-related costs	-		-		-		-		(47)		(47)
Adjusted income (loss) from operations	$	591	$	105	$	83	$	19	$	(48)	$	750

(1) Includes the Company’s share of the earnings of its joint ventures in China and India in the Global Supplemental Benefits segment.

(2) Beginning in 2018, the Company’s share of the realized investment results of equity method joint ventures in the Global Supplemental Benefits segment (reported in other revenues) is excluded from operating revenues and adjusted income from operations.

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(In millions)	Global Health Care		Global Supplemental Benefits		Group Disability and Life		Other Operations		Corporate		Total
Six Months Ended June 30, 2018
Premiums, fees and other revenues and mail order pharmacy revenues (1)	$	17,999	$	2,116	$	2,057	$	64	$	(24)	$	22,212
Net investment income	240		70		186		173		12		681
Less net realized investment (losses) on equity method subsidiaries (2)	-		(22)		-		-		-		(22)
Operating revenues	$	18,239	$	2,208	$	2,243	$	237	$	(12)	$	22,915
Total revenues	$	18,224	$	2,175	$	2,232	$	239	$	(13)	$	22,857
Shareholders’ net income (loss)	$	1,622	$	191	$	161	$	48	$	(301)	$	1,721
After-tax adjustments to reconcile to adjusted income from operations
Net realized investment losses (gains) (2)	11		28		9		(3)		2		47
Amortization of other acquired intangible assets	27		11		-		-		-		38
Special item
Transaction-related costs	-		-		-		-		159		159
Adjusted income (loss) from operations	$	1,660	$	230	$	170	$	45	$	(140)	$	1,965

Six Months Ended June 30, 2017
Premiums, fees and other revenues and mail order pharmacy revenues (1)	$	16,295	$	1,805	$	2,055	$	60	$	(24)	$	20,191
Net investment income	184		59		178		174		16		611
Operating revenues	$	16,479	$	1,864	$	2,233	$	234	$	(8)	$	20,802
Total revenues	$	16,537	$	1,876	$	2,263	$	231	$	(8)	$	20,899
Shareholders’ net income (loss)	$	1,143	$	178	$	156	$	37	$	(103)	$	1,411
After-tax adjustments to reconcile to adjusted income from operations
Net realized investment (gains) losses	(38)		(9)		(20)		2		-		(65)
Amortization of other acquired intangible assets	28		10		-		-		-		38
Special items
Transaction-related costs	-		-		-		-		2		2
Long-term care guaranty fund assessment	68		-		15		-		-		83
Total special items	68		-		15		-		2		85
Adjusted income (loss) from operations	$	1,201	$	179	$	151	$	39	$	(101)	$	1,469

(1) Includes the Company’s share of the earnings of its joint ventures in China and India in the Global Supplemental Benefits segment.

(2) Beginning in 2018, the Company’s share of the realized investment results of equity method joint ventures in the Global Supplemental Benefits segment (reported in other revenues) is excluded from operating revenues and adjusted income from operations.

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Revenue from external customers includes premiums, fees and other revenues and mail order pharmacy revenues.  The following table presents these revenues by product type for the periods ended June 30:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In millions)	2018		2017		2018		2017
Premiums by product (ASC 944 - insurance activities)
Global Health Care
Commercial
Guaranteed cost	$	2,046	$	1,522	$	4,045	$	3,065
Experience-rated	736		727		1,475		1,454
Stop loss	993		856		1,973		1,708
International health care	515		479		1,028		954
Dental	482		441		961		882
Other	259		243		517		489
Government
Medicare	1,461		1,389		2,959		2,850
Medicaid	243		273		478		553
Medicare Part D	189		198		417		432
Total Global Health Care	6,924		6,128		13,853		12,387
Disability	510		491		1,015		992
Life, Accident and Supplemental Health	1,551		1,413		3,090		2,780
Total premiums from ongoing operations	8,985		8,032		17,958		16,159
Fees (ASC 606 - service activities)
Global Health Care	1,333		1,213		2,659		2,433
Global Supplemental Benefits	8		7		15		12
Group Disability and Life	25		25		50		52
Total fees from ongoing operations	1,366		1,245		2,724		2,497
Mail order pharmacy (ASC 606 - service activities)	758		757		1,475		1,467
Other	19		32		55		68
Total revenues from external customers	$	11,128	$	10,066	$	22,212	$	20,191

Premiums from the Centers for Medicare and Medicaid Services (“CMS”) were 18% of consolidated revenues for the six months ended June 30, 2018 and 17% for the six months ended June 30, 2017.  These amounts were reported in the Global Health Care segment.

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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

INDEX

Cautionary Statement	48
Executive Overview	49
Liquidity and Capital Resources	54
Critical Accounting Estimates	57
Segment Reporting	57
Global Health Care	58
Global Supplemental Benefits	60
Group Disability and Life	61
Other Operations	61
Corporate	62
Investment Assets	62
Market Risk	65

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to provide information to assist you in better understanding and evaluating our financial condition as of June 30, 2018 compared with December 31, 2017 and our results of operations for the three months and six months ended June 30, 2018 compared with the same periods last year.  We encourage you to read this MD&A in conjunction with our Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2017 (“2017 Form 10-K”), in particular the “Risk Factors” contained in Part I, Item 1A of that form.

Unless otherwise indicated, financial information in the MD&A is presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”).  See Note 2 to the Consolidated Financial Statements in our 2017 Form 10-K for additional information regarding our significant accounting policies and Note 2 to the Consolidated Financial Statements in this Form 10-Q for updates to those accounting policies resulting from adopting new accounting guidance.  The preparation of interim consolidated financial statements necessarily relies heavily on estimates.  This and certain other factors, such as the seasonal nature of portions of the health care and related benefits business, as well as competitive and other market conditions, call for caution in estimating full-year results based on interim results of operations.  In some of our financial tables in this MD&A, we present percentage changes or “N/M” when those changes are so large as to become not meaningful.  Changes in percentages are expressed in basis points (“bps”).

In this MD&A, our consolidated measures “operating revenues” and “adjusted income from operations” are not determined in accordance with GAAP and should not be viewed as substitutes for the most directly comparable GAAP measures “total revenues” and “shareholders’ net income.”

We define operating revenues as total revenues excluding realized investment results.  Beginning in 2018, realized investment results from our equity method joint ventures in the Global Supplemental Benefits segment are also excluded from operating revenues due to the potential increased volatility in investment results after adopting Accounting Standards Update (“ASU”) 2016-01.  Investment gains or losses are managed based on factors largely unrelated to the underlying business purpose of each segment and are not indicative of the underlying performance of our core business operations, so they are excluded from operating revenues.

We use adjusted income (loss) from operations as our principal financial measure of operating performance because management believes it best reflects the underlying results of our business operations and permits analysis of trends in underlying revenue, expenses and profitability.  We define adjusted income from operations as shareholders’ net income (loss) excluding after-tax realized investment gains and losses, amortization of other acquired intangible assets and special items.  Income or expense amounts that are excluded from adjusted income from operations because they are not indicative of underlying performance or the responsibility of operating segment management include:

·Realized investment results, including changes in market values of certain financial instruments between balance sheet dates as well as gains and losses associated with invested asset sales.  As discussed above, beginning in 2018, realized investment results from our equity method joint ventures in the Global Supplemental Benefits segment are also excluded.

·Amortization of other intangible assets related to costs incurred for acquisitions

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·Special items, if any, that management believes are not representative of the underlying results of operations.  See Note 17 to the Consolidated Financial Statements for descriptions of special items.

Cautionary Note Regarding Forward-Looking Statements

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are based on Cigna’s current expectations and projections about future trends, events and uncertainties.  These statements are not historical facts.  Forward-looking statements may include, among others, statements concerning future financial or operating performance, including our ability to deliver personalized and innovative solutions for our customers and clients; future growth, business strategy, strategic or operational initiatives; economic, regulatory or competitive environments, particularly with respect to the pace and extent of change in these areas; financing or capital deployment plans and amounts available for future deployment; our prospects for growth in the coming years; the proposed merger with Express Scripts (the “Merger”), and other statements regarding Cigna’s or Express Script’s future beliefs, expectations, plans, intentions, financial condition or performance.  You may identify forward-looking statements by the use of words such as “believe,” “expect,” “plan,” “intend,” “anticipate,” “estimate,” “predict,” “potential,” “may,” “should,” “will” or other words or expressions of similar meaning, although not all forward-looking statements contain such terms.

Forward-looking statements are subject to risks and uncertainties, both known and unknown, that could cause actual results to differ materially from those expressed or implied in forward-looking statements.  Such risks and uncertainties include, but are not limited to:  our ability to achieve our financial, strategic and operational plans or initiatives; our ability to predict and manage medical costs and price effectively and develop and maintain good relationships with physicians, hospitals and other health care providers; the impact of modifications to our operations and processes; our ability to identify potential strategic acquisitions or transactions and realize the expected benefits of such transactions, including with respect to the Merger; the substantial level of government regulation over our business and the potential effects of new laws or regulations or changes in existing laws or regulations; the outcome of litigation, regulatory audits, investigations, actions and/or guaranty fund assessments; uncertainties surrounding participation in government-sponsored programs such as Medicare; the effectiveness and security of our information technology and other business systems; unfavorable industry, economic or political conditions, including foreign currency movements; acts of war, terrorism, natural disasters or pandemics; our ability to obtain shareholder or regulatory approvals required for the Merger or the requirement to accept conditions that could reduce the anticipated benefits of the Merger as a condition to obtaining regulatory approvals; the possibility that the anticipated benefits from the Merger cannot be realized in full or at all or may take longer to realize than expected; a longer time than anticipated to consummate the proposed Merger; problems regarding the successful integration of the businesses of Express Scripts and Cigna; unexpected costs regarding the proposed Merger; diversion of management’s attention from ongoing business operations and opportunities during the pendency of the Merger; potential litigation associated with the proposed Merger; the ability to retain key personnel; the availability of financing, including relating to the proposed Merger; effects on the businesses as a result of uncertainty surrounding the proposed Merger; as well as more specific risks and uncertainties discussed in Part I, Item 1A – Risk Factors and Part II, Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 2017 Form 10-K, Part II, Item 1A of this Quarterly Report on Form 10-Q and as described from time to time in our future reports filed with the Securities and Exchange Commission (the “SEC”) as well as the risks and uncertainties described in Express Scripts’ most recent report on Form 10-K and subsequent reports filed with the SEC.

You should not place undue reliance on forward-looking statements that speak only as of the date they are made, are not guarantees of future performance or results, and are subject to risks, uncertainties and assumptions that are difficult to predict or quantify.  Cigna undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as may be required by law.

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EXECUTIVE OVERVIEW

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, our evolved strategy is to “Go Deeper”, “Go Local” and “Go Beyond” with a differentiated set of medical, dental, disability, life and accident insurance and related products and services offered by our subsidiaries.  In addition to our ongoing operations, we also have certain run-off operations.

For further information on our business and strategy, please see Part 1, Item 1, “Business” in our 2017 Form 10-K.

Summarized below are key measures of our performance by reporting segment for the six months ended June 30, 2018 and 2017:

Financial highlights by segment

	Three Months Ended							Six Months Ended
	June 30,							June 30,
(Dollars in millions, except per share amounts)		2018		2017		% Change			2018		2017		% Change
Total revenues (1)		$	11,477	$	10,425	10	%		$	22,857	$	20,899	9	%
Operating revenues (1)
Global Health Care		$	9,150	$	8,192	12	%		$	18,239	$	16,479	11	%
Global Supplemental Benefits		1,106		955		16			2,208		1,864		18
Group Disability and Life		1,127		1,112		1			2,243		2,233		-
Other Operations		121		118		3			237		234		1
Corporate		(4)		(3)		(33)			(12)		(8)		(50)
Consolidated operating revenues		$	11,500	$	10,374	11	%		$	22,915	$	20,802	10	%
Shareholders’ net income (1)		$	806	$	813	(1)	%		$	1,721	$	1,411	22	%
Adjusted income (loss) from operations (1)
Global Health Care		$	789	$	591	34	%		$	1,660	$	1,201	38	%
Global Supplemental Benefits		118		105		12			230		179		28
Group Disability and Life		103		83		24			170		151		13
Other Operations		21		19		11			45		39		15
Corporate		(76)		(48)		(58)			(140)		(101)		(39)
Total adjusted income from operations		$	955	$	750	27	%		$	1,965	$	1,469	34	%
Earnings per share (diluted)
Shareholders’ net income (1)		$	3.29	$	3.15	4	%		$	7.01	$	5.45	29	%
Adjusted income from operations (1)		$	3.89	$	2.91	34	%		$	8.00	$	5.67	41	%
								As of June 30,
									2018		2017
Global medical customers (in thousands)									16,236		15,654		4	%

(1) See page 50 for reconciliations of consolidated operating revenues to consolidated total revenues and adjusted income from operations to shareholders’ net income.

See Note 1 to the Consolidated Financial Statements for a description of our reporting segments.  For further analysis and explanation of individual segment results, see the “Segment Reporting” section of this MD&A beginning on page 57.

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Consolidated results of operations (GAAP basis)

	Three Months Ended							Six Months Ended
	June 30,							June 30,
(In millions)		2018		2017		% Change			2018		2017		% Change
Premiums		$	9,012	$	8,057	12	%		$	18,011	$	16,208	11	%
Fees and other revenues		1,358		1,252		8			2,726		2,516		8
Net investment income		352		308		14			681		611		11
Mail order pharmacy revenues		758		757		-			1,475		1,467		1
Net realized investment (losses) gains		(3)		51		(106)			(36)		97		(137)
Total revenues		11,477		10,425		10			22,857		20,899		9
Less: net realized investment (losses) gains		(3)		51		(106)			(36)		97		(137)
Less: net realized investment (losses) from equity method subsidiaries (1)		(20)		-		N/M			(22)		-		N/M
Consolidated operating revenues		11,500		10,374		11			22,915		20,802		10
Global Health Care medical costs		5,421		4,890		11			10,738		9,839		9
Other benefit expenses		1,424		1,335		7			2,879		2,702		7
Mail order pharmacy costs		613		626		(2)			1,174		1,207		(3)
Operating expenses		2,893		2,412		20			5,695		5,067		12
Amortization of other acquired intangible assets		24		28		(14)			51		60		(15)
Total benefits and expenses		10,375		9,291		12			20,537		18,875		9
Income before income taxes		1,102		1,134		(3)			2,320		2,024		15
Income taxes		294		324		(9)			595		621		(4)
Net income		808		810		-			1,725		1,403		23
Less: net income (losses) attributable to noncontrolling interests		2		(3)		167			4		(8)		150
Shareholders’ net income		$	806	$	813	(1)	%		$	1,721	$	1,411	22	%

Reconciliation of shareholders’ net income to adjusted income from operations

	Three Months Ended					Change		Six Months Ended					Change
	June 30,					Favorable		June 30,					Favorable
(In millions)		2018		2017		(Unfavorable)			2018		2017		(Unfavorable)
Shareholders’ net income		$	806	$	813	(1)	%		$	1,721	$	1,411	22	%
After-tax adjustments required to reconcile to adjusted income from operations
Net realized investment (gains) losses (1)		22		(34)					47		(65)
Amortization of other acquired intangible assets		18		18					38		38
Special items
Transaction-related costs		109		(47)					159		2
Long-term care guaranty fund assessment		-		-					-		83
Total special items		109		(47)					159		85
Adjusted income from operations		$	955	$	750	27	%		$	1,965	$	1,469	34	%

Other key consolidated financial data

	Three Months Ended							Change		Six Months Ended							Change
	June 30,							Favorable		June 30,							Favorable
(In millions)		2018			2017			(Unfavorable)			2018			2017			(Unfavorable)
Earnings per share (diluted)
Shareholders’ net income		$	3.29		$	3.15		4	%		$	7.01		$	5.45		29	%
After-tax adjustments required to reconcile to adjusted income from operations
Net realized investment (gains) losses (1)		0.09			(0.13)						0.19			(0.25)
Amortization of other acquired intangible assets		0.07			0.07						0.15			0.15
Special items
Transaction-related costs		0.44			(0.18)						0.65			-
Long-term care guaranty fund assessment		-			-						-			0.32
Adjusted income from operations		$	3.89		$	2.91		34	%		$	8.00		$	5.67		41	%
Effective tax rate		26.7		%	28.6		%	190	bps		25.6		%	30.7		%	510	bps

(1) Beginning in 2018, our share of the realized investment results of equity method joint ventures in the Global Supplemental Benefits segment (reported in other revenues) is excluded from operating revenues and adjusted income from operations.

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Earnings, Revenue and Medical Customer Commentary

Shareholders’ net income decreased slightly for the three months ended June 30, 2018 compared with the same period in 2017 primarily due to increased after-tax transaction costs reported as a special item and lower realized investment results, offset by higher adjusted income from operations.  For the six months ended June 30, 2018, the increase was driven by higher adjusted income from operations partially offset by increased after-tax transaction costs reported as a special item and lower realized investment results.

Adjusted income from operations increased for the three months and six months ended June 30, 2018 compared with the same periods in 2017, primarily due to the impact of a lower U.S. tax rate effective January 1, 2018.  Customer growth in our Global Health Care and Global Supplemental Benefits segments, together with increased contributions from specialty products in our Commercial segment also contributed meaningfully to the increases.

Revenues for the three months and six months ended June 30, 2018 increased compared with the same periods in 2017 primarily resulting from business growth in our Global Health Care and Global Supplemental Benefits segments.  Components of the revenue increases were as follows:

·Premiums increased, primarily reflecting customer growth in the Commercial segment including contributions from specialty products as well as growth in the Global Supplemental Benefits segment.  Also contributing to the increases were higher rates in our Commercial segment reflecting:  1) underlying medical cost trend; 2) the government’s suspension of cost share reduction subsidies; and 3) the resumption of the health insurance industry tax.

·Fees and other revenues also increased, primarily due to growth in our specialty businesses and an increased customer base for our administrative services only (“ASO”) business.

·Net investment income was higher, reflecting growth in average assets and higher yields, largely driven by increased partnership income.

·Realized investment results declined for the three months and six months ended June 30, 2018 reflecting lower gains on sales of alternative, partnership and fixed maturity investments as well as mark-to-market losses on equity securities reported in net income as required by ASU 2016-01 beginning in 2018.

Global medical customers.  Our medical customer base increased as of June 30, 2018 compared with June 30, 2017, reflecting growth primarily in our select and middle market segments.

Commentary on Other Components of Consolidated Results of Operations

·Global Health Care medical costs increased for the three months and six months ended June 30, 2018 compared with the same periods in 2017, primarily due to customer growth in the Commercial segment and medical cost trend.

·Other benefit expenses increased for the three months and six months ended June 30, 2018 compared with the same periods in 2017, driven by customer growth in the Global Supplemental Benefits segment.

·Operating expenses increased for the three months and six months ended June 30, 2018 compared with the same periods in 2017 driven by the resumption of the health insurance industry tax in 2018, volume-based expenses reflecting business growth, spending on business initiatives and increased transaction-related costs.  For the six months ended June 30, 2018, the absence of the long-term care guaranty fund assessment recognized in the first quarter of 2017 partially offset the increase.

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·Effective tax rates decreased for the three months and six months ended June 30, 2018 compared with the same periods in 2017, primarily due to a lower U.S. tax rate effective January 1, 2018.  This favorable effect was partially offset by the resumption of the non-deductible health insurance industry tax in 2018 and the absence of the incremental tax benefit recognized in the second quarter of 2017 associated with certain transaction costs related to the terminated merger with Anthem.

Key Transactions and Developments

Proposed Acquisition of Express Scripts

On March 8, 2018, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Express Scripts Holding Company (“Express Scripts”), Halfmoon Parent, Inc., a direct wholly owned subsidiary of the Company (“New Cigna”), Halfmoon I, Inc., a direct wholly owned subsidiary of New Cigna (“Cigna Merger Sub”), and Halfmoon II, Inc., a direct wholly owned subsidiary of New Cigna (“Express Scripts Merger Sub”).  See Note 3 to the Consolidated Financial Statements for additional details of our proposed acquisition of Express Scripts (the “Merger”).  We have incurred material costs related to this proposed acquisition and we expect these costs to continue to be significant for the remainder of 2018.  These costs are being reported in “transaction-related costs” as a special item and excluded from adjusted income from operations.  See the “Liquidity and Capital Resources” section of the MD&A for further discussion of the financing for the proposed acquisition.

U.S. Tax Reform Legislation

Major U.S. tax reform legislation was enacted in December 2017.  The legislation was highlighted by a reduction in the corporate income tax rate to 21% effective January 1, 2018.  As further discussed in Note 15 to the Consolidated Financial Statements, our effective tax rate declined significantly for the three months and six months ended June 30, 2018 compared with the same periods in 2017, contributing to a material increase in shareholders’ net income.  We would expect that trend to continue in 2018.  Through June 30, 2018 there were no adjustments to the provisional amounts first recognized in 2017 as a result of U.S. tax reform legislation.  In accordance with guidance of the staff of the SEC, our accounting for these amounts is not complete and is expected to be evaluated and adjusted, as needed, until we file our 2017 U.S. tax return later in 2018.  In addition, we have evaluated the global intangible low-taxed income (“GILTI”) provisions of U.S. tax reform that became effective January 1, 2018.  For the three months and six months ended June 30, 2018, the GILTI tax impact was immaterial.  We will continue to evaluate these provisions in future periods as further guidance emerges.  It is our policy to recognize any GILTI taxes as period costs when incurred.

Health Care Industry Developments and Other Matters Affecting Our Global Health Care Segment

Our 2017 Form 10-K provides a detailed description of The Patient Protection and Affordable Care Act (the “ACA”) provisions and other legislative initiatives that impact our health care business, including regulations issued by the Centers for Medicare & Medicaid Services (“CMS”) and the Departments of the Treasury and Health and Human Services (“HHS”).  The table presented below provides an update of the impact of these items and other matters affecting our Global Health Care segment as of June 30, 2018.

Item

Description

Medicare Advantage (“MA”)

Medicare Star Quality Ratings (“Star Ratings”):  Medicare Advantage plans must have a Star Rating of four Stars or greater to qualify for bonus payments.  Approximately 60% of our Medicare Advantage customers are in a four Star or greater plan for bonus payments to be received in 2018.  We now expect that approximately 70% of our Medicare Advantage customers will be in a four Star or greater plan for bonus payments to be received in 2019. 2019 MA Rates:  Final MA reimbursement rates for 2019 were published by CMS in April 2018.  We do not expect the new rates to have a material impact on our consolidated results of operations in 2019.

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Item	Description
Health Care Reform Act Taxes and Fees	Health Insurance Industry Tax:  Federal legislation imposed a moratorium on the health insurance industry tax for 2017 and 2019.  The industry tax is being assessed in 2018 and, under current law, will be imposed in 2020.  The industry tax for Cigna in 2018 is expected to approximate $370 million ($245 million for Commercial and $125 million for Government).  We recorded $88 million for the three months and $185 million for the six months ended June 30, 2018 for the industry tax.  For our Commercial business, the tax is reflected in our 2018 premium rates, and did not have a material effect on shareholders’ net income for the six months ended June 30, 2018.  For our Medicare business, the earnings impact in 2018 resulting from this renewed tax was somewhat offset with benefit and pricing changes.  Because this tax is not deductible for federal income tax purposes, it negatively impacted our effective tax rate for the six months ended June 30, 2018, and we expect this negative effect to continue throughout 2018.
Public Health Exchanges	Market Participation:  For 2018, we offer individual coverage on six public health insurance exchanges in the following states:  Colorado, Illinois, Missouri, North Carolina, Tennessee and Virginia. Cost Sharing Reduction Subsidies:  The ACA provides for cost sharing reductions that offset the amount that qualifying customers pay for deductibles, copayments and coinsurance.  The federal government provided funding for the cost sharing reduction subsidies to the qualifying customer’s insurer until October 2017 when these payments were stopped.  The attorneys general of 18 states and the District of Columbia sued the Trump administration, seeking to require the administration to continue paying these subsidies.  In October 2017, the court denied the request of the attorneys general for an injunction, allowing the government to cease providing the cost sharing reduction payments to insurers during the pendency of the matter.  In July 2018, the court granted a motion by the states to dismiss the lawsuit without prejudice, meaning the states may refile a lawsuit at a later time.  The U.S. Congress discussed the potential funding of these subsidies earlier this year and could revisit the issue in the future.  We will continue to monitor developments.  Our premium rates for the 2018 plan year reflect the government’s decision to cease paying these subsidies.

Risk Mitigation Programs

See the MD&A in our 2017 Form 10-K for a description of the allowance for the balance of our risk corridor receivable.  In June 2018, the U.S. Federal Circuit court ruled that health insurers are not entitled to receive amounts due under the risk corridor program that have been withheld by Congress.  The plaintiffs have asked the full Federal Circuit court to review this unfavorable decision.  As of June 30, 2018, we continue to carry this allowance based on the current status of court decisions.

In February of 2018, a federal judge issued a decision invalidating the use of statewide average premium for risk adjustment purposes.  In response, on July 7th, CMS temporarily suspended collections and payments under the program.  On July 24th, CMS issued a final rule clarifying the 2017 program methodology and addressing issues raised in the ruling by the federal judge.  This rule clears the way for CMS to resume risk adjustment collections and payments for the 2017 program year.  Despite the issuance of a final rule, the resolution of the legal matter remains uncertain.  As of June 30, 2018, our financial statements reflect the risk adjustment balances for the 2018 and 2017 plan years under the rules currently in effect for the program.

The following table presents our balances associated with the risk adjustment program as of June 30, 2018 and December 31, 2017.

	Receivable (Payable) Balance
	June 30,		December 31,
(In millions)	2018		2017
Risk Adjustment
Receivables (1)	$	86	$	69
Payables (2)	(363)		(250)
Net risk adjustment	$	(277)	$	(181)

(1) Receivables, net of allowances, are reported in premiums, accounts and notes receivable in the Consolidated Balance Sheets.

(2) Payables are reported in accounts payable, accrued expenses and other liabilities in the Consolidated Balance Sheets.

After-tax charges for the risk adjustment program were $15 million for the three months and $75 million for the six months ended June 30, 2018 compared with $33 million and $51 million for the same periods in 2017.

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LIQUIDITY AND CAPITAL RESOURCES

Liquidity

We maintain liquidity at two levels:  the subsidiary level and the parent company level.

Liquidity requirements at the subsidiary level generally consist of:

·medical costs and benefit payments to policyholders; and

·expense requirements, primarily for employee compensation and benefits, information technology and facilities costs; and

·income taxes.

Our subsidiaries normally meet their operating requirements by:

·maintaining appropriate levels of cash, cash equivalents and short-term investments;

·using cash flows from operating activities;

·selling investments;

·matching investment durations to those estimated for the related insurance and contractholder liabilities; and

·borrowing from affiliates, subject to applicable regulatory limits.

Liquidity requirements at the parent company level generally consist of:

·debt service and dividend payments to shareholders;

·pension plan funding; and

·repurchases of common stock.

The parent company normally meets its liquidity requirements by:

·maintaining appropriate levels of cash and various types of marketable investments;

·collecting dividends from its subsidiaries;

·using proceeds from issuance of debt and equity securities; and

·borrowing from its subsidiaries, subject to applicable regulatory limits.

Cash flows for the six months ended June 30, were as follows:

(In millions)	2018		2017
Operating activities	$	3,020	$	2,276
Investing activities	$	(1,799)	$	(732)
Financing activities	$	(542)	$	(1,143)

Operating activities

Cash flows from operating activities consist of cash receipts and disbursements for premiums, fees and other revenues, mail order pharmacy, investment income, taxes and benefits and expenses.  Because certain income and expense transactions do not generate cash, and because cash transactions related to revenues and expenses may occur in periods different from when those revenues and expenses are recognized in shareholders’ net income, cash flows from operating activities can significantly differ from shareholders’ net income.

Cash provided by operating activities increased for the six months ended June 30, 2018 compared with the same period in 2017, primarily driven by higher net income.  Both periods included early receipt of July payments from CMS of approximately $740 million in 2018 and $700 million for 2017.

Investing activities

Cash flows from investing activities generally consist of net investment purchases or sales and net purchases of property and equipment including capitalized internal-use software, as well as cash used to acquire businesses.

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Cash used in investing activities increased for the six months ended June 30, 2018 compared with the same period in 2017, primarily due to higher net investment purchases.

Financing activities

Cash flows from financing activities are generally comprised of issuances and re-payment of debt, proceeds on the issuance of common stock resulting from stock option exercises, and stock repurchases.  In addition, the subsidiaries report net deposits and withdrawals to and from contractholder deposit fund liabilities (that include universal life insurance liabilities) because such liabilities are considered financing activities with policyholders.

Cash used in financing activities decreased for the six months ended June 30, 2018 compared with the same period in 2017, primarily due to lower stock repurchases and repayments of long-term debt partially offset by bridge financing fees paid in 2018.

We maintain a share repurchase program, authorized by our Board of Directors.  Under this program, we may repurchase shares from time to time, depending on market conditions and alternate uses of capital.  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 Exchange Act of 1934, as amended, including through Rule 10b5-1 trading plans.  The program may be suspended or discontinued at any time.

Year to date through August 1, 2018, we repurchased 1.3 million shares for approximately $275 million.  We do not expect to conduct additional share repurchases prior to closing of the Express Scripts combination.

Interest Expense

Interest expense on long-term debt, short-term debt and capital leases was as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In millions)	2018		2017		2018		2017
Interest expense	$	69	$	60	$	128	$	122

Capital Resources

Our capital resources (primarily retained earnings and the proceeds from issuing debt and equity securities) provide protection for policyholders, furnish the financial strength to underwrite insurance risks and facilitate continued business growth.

Management, guided by regulatory requirements and rating agency capital guidelines, determines the amount of capital resources that we maintain.  Management allocates resources to new long-term business commitments when returns, considering the risks, look promising and when the resources available to support existing business are adequate.

We prioritize our use of capital resources to:

·provide the capital necessary to support growth and maintain or improve the financial strength ratings of subsidiaries;

·consider acquisitions that are strategically and economically advantageous; and

·return capital to investors through share repurchase.

The availability of capital resources will be impacted by equity and credit market conditions.  Extreme volatility in credit or equity market conditions may reduce our ability to issue debt or equity securities.

Liquidity and Capital Resources Outlook

The availability of resources at the parent company level is partially dependent on dividends from our subsidiaries, most of which are subject to regulatory restrictions and rating agency capital guidelines, and partially dependent on the availability of liquidity from the issuance of debt or equity securities.

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At June 30, 2018, there was $1.2 billion in cash and marketable investments available at the parent company level.  For the remainder of 2018, the parent company’s cash obligations are approximately $250 million, primarily for interest payments and incurred but unpaid bridge financing fees.  In the first quarter of 2018, we repaid $131 million of long-term debt.

We expect to have sufficient liquidity to meet the obligations discussed above, based on the parent company’s current cash position and current projections for subsidiary dividends.  In addition, we expect to have sufficient liquidity to meet the cash requirements for the consummation of the merger with Express Scripts through the accumulation of additional parent cash over the course of 2018 and debt financing as described below.

Our cash projections may not be realized and the demand for funds could exceed available cash if our ongoing businesses experience unexpected shortfalls in earnings, or we experience material adverse effects from one or more risks or uncertainties described more fully in the Risk Factors section of the 2017 Form 10-K and in Part II, Item 1 of this Form 10-Q.  In those cases, we expect to have the flexibility to satisfy liquidity needs through a variety of measures including intercompany borrowings.  The parent company may borrow up to $1.0 billion from its insurance subsidiaries without additional state approval.  We have additional liquidity available through short-term commercial paper borrowing capacity.

Management believes we have adequate sources of liquidity to meet our operating requirements.  However, disruption or volatility in the capital and credit markets could affect our ability to access those markets for additional borrowings or could increase costs associated with borrowing funds.

We expect to finance the acquisition of Express Scripts as follows:

·Stock.  Express Scripts stockholders will receive 0.2434 of a share of common stock of New Cigna for every one share of Express Scripts common stock.  Based on the number of Express Scripts shares outstanding at the date of the Merger Agreement, we expect to issue approximately 140 million additional shares to Express Scripts stockholders.  Cigna shareholders will receive one share of New Cigna common stock for each Cigna common share.

·Debt.  In March 2018, we entered into a $26.7 billion Bridge Facility commitment letter to finance the cash portion of the acquisition.  On April 6, 2018, we entered into a $3.0 billion 3-year Term Loan Credit Agreement.  Concurrent with entry into the Term Loan Credit Agreement, the Bridge Facility commitment was reduced to $23.7 billion.  The available commitment under the Bridge Facility will be further reduced to the extent we obtain certain other debt financing, complete certain asset sales or certain equity issuance.  See Note 5 to the Consolidated Financial Statements for further information.

·Assumption of Express Scripts debt.  This debt will be paid upon its scheduled maturities in the normal course of business.

Upon closing the transaction, we expect that our pro forma debt-to-capitalization ratio will be approximately 49%.  We expect to deleverage to a range of 35-40% within 18 to 24 months after the closing.  Based on current interest rates, the additional debt financing is expected to increase annual interest payments by approximately $900 million.

On April 6, 2018, in connection with the proposed Merger, the Company and New Cigna entered into the Revolving Credit and Letter of Credit Agreement (the “Revolving Credit Agreement”), which extends through April 5, 2023 and is diversified among 23 banks.  Prior to the Merger, the Company will be the borrower under the Revolving Credit Agreement.  On and after the Merger, New Cigna will be the borrower under the Revolving Credit Agreement.

Prior to the Merger, the Company can borrow up to $1.5 billion for general corporate purposes, of which up to $500 million is available for the issuance of letters of credit.  On and after the Merger, New Cigna can borrow up to $3.25 billion for general corporate purposes, of which up to $500 million can be used for letters of credit.  The Revolving Credit Agreement also includes an option to increase the facility amount by up to $500 million and an option to extend the termination date for additional one year periods, subject to consent by the banks.

The Revolving Credit Agreement contains customary covenants and restrictions, including a financial covenant that the Company or New Cigna may not permit its leverage ratio – which is the ratio of total consolidated debt to total consolidated capitalization (each as defined in the Revolving Credit Agreement) – to be greater than 50% prior to the Merger or 60% after the Merger.

In certain circumstances, certain subsidiaries of the Company or New Cigna will be required to guarantee each other’s obligations under the Revolving Credit Agreement and the Term Loan Credit Agreement.  See Note 5 to the Consolidated Financial Statements for further information on guarantees and debt covenants.

The Company had $10 million of letters of credit outstanding as of June 30, 2018.

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Overseas earnings.  We continue to maintain a capital management strategy to retain overseas a significant portion of the earnings from our foreign operations.  These undistributed earnings are deployed outside of the United States predominantly in support of the liquidity and regulatory capital requirements of our foreign operations as well as to support growth initiatives overseas.  This strategy does not materially limit our ability to meet our liquidity and capital needs in the United States.

Guarantees and Contractual Obligations

We are contingently liable for various contractual obligations entered into during the ordinary course of business.  See Note 16 to the Consolidated Financial Statements for additional information.

Contractual obligations.  We have updated certain obligations previously provided in our 2017 Form 10-K for the following item:

·Investment commitments:  the Company has entered into new commitments to invest in security partnerships and to purchase investments.

			Less than 1		1-3		4-5		After 5
(In millions, on an undiscounted basis)	Total		year		years		years		years
Off-Balance Sheet
Purchase obligations	$	2,157	$	801	$	869	$	396	$	91

CRITICAL ACCOUNTING ESTIMATES

The preparation of Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures in the Consolidated Financial Statements.  We consider an accounting estimate to be critical if:

·it requires assumptions to be made that were uncertain at the time the estimate was made; and

·changes in the estimate or different estimates that could have been selected could have a material effect on our consolidated results of operations or financial condition.

We have discussed the development and selection of our critical accounting estimates and reviewed the disclosures presented in our 2017 Form 10-K with the Audit Committee of our Board of Directors.  We regularly evaluate items that may impact critical accounting estimates.  Our most critical accounting estimates, as well as the effects of hypothetical changes in material assumptions used to develop each estimate, are described in the 2017 Form 10-K.  As of June 30, 2018, there were no significant changes to the critical accounting estimates from what was reported in our 2017 Form 10-K.

SEGMENT REPORTING

The following section of this MD&A discusses the results of each of our reporting segments.  In these segment discussions, we present “operating revenues,” defined as total revenues excluding realized investment results and “adjusted income from operations,” defined as shareholders’ net income (loss) excluding after-tax realized investment results, amortization of other acquired intangible assets and special items.  Ratios presented in this segment discussion exclude the same items as adjusted income from operations.  See Note 17 to the Consolidated Financial Statements for additional discussion of these metrics.

In these segment discussions, we also present “adjusted margin,” defined as adjusted income from operations divided by operating revenues.

See the MD&A Executive Overview beginning on page 49 for summarized financial results of each of our reporting segments.

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Global Health Care Segment

As described in the Segment Reporting introduction above, the performance of the Global Health Care segment is measured using adjusted income from operations as presented in the table below.  The key factors affecting adjusted income from operations for this segment are:

·customer growth;

·sales of specialty products;

·medical costs as a percentage of premiums (medical care ratio or “MCR”) for our Commercial and Government businesses; and

·operating expenses as a percentage of operating revenues (operating expense ratio)

Effective January 1, 2018, we adopted amended accounting guidance for revenue recognition.  For the Global Health Care segment, prior year operating revenues along with adjusted margin and both the medical care and operating expense ratios have been retrospectively adjusted to conform to this new basis of accounting.  See Note 2 to the Consolidated Financial Statements for additional information.

Results of Operations

Global Health Care segment financial	Three Months Ended								Six Months Ended
summary	June 30,						Change		June 30,						Change
(In millions)	2018			2017			Favorable (Unfavorable)		2018			2017			Favorable (Unfavorable)
Operating revenues	$	9,150		$	8,192		12	%	$	18,239		$	16,479		11	%
Adjusted income from operations	$	789		$	591		34	%	$	1,660		$	1,201		38	%
Adjusted margin	8.6		%	7.2		%	140bps		9.1		%	7.3		%	180bps
Medical Care Ratios
Commercial	76.3		%	77.0		%	70bps		75.0		%	76.5		%	150bps
Government	83.7		%	86.1		%	240bps		84.1		%	86.0		%	190bps
Consolidated Global Health Care	78.3		%	79.8		%	150bps		77.5		%	79.4		%	190bps
Operating expense ratio	22.7		%	21.4		%	(130)bps		22.7		%	21.6		%	(110)bps

	As of June 30,
(In thousands)	2018	2017	% Change
Customers
Total Commercial risk	3,144	2,927	7	%
Total Government	484	491	(1)
Total risk	3,628	3,418	6
Service	12,608	12,236	3
Total medical customers	16,236	15,654	4	%

	As of
	June 30,		December 31,
(In millions)	2018		2017		% Change
Global Health Care medical costs payable	$	3,005	$	2,719	11	%

Operating revenues.  The increases for the three months and six months ended June 30, 2018 compared with the same periods in 2017 were primarily due to customer growth in our Commercial segment including contributions from specialty products.  Also contributing to the increases were higher rates in our Commercial segment reflecting:  1) underlying medical cost trend; 2) the government’s suspension of cost share reduction subsidies; and 3) the resumption of the health insurance industry tax.

Adjusted income from operations increased for the three months and six months ended June 30, 2018 compared with the same periods in 2017 reflecting the favorable effect of a lower U.S. tax rate in 2018 and strong ongoing performance in our Commercial business, including increased contributions from specialty products and improved margins in our U.S. individual business.

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Medical care ratios.  The Commercial medical care ratios decreased for the three months and six months ended June 30, 2018 compared with the same periods in 2017, reflecting strong ongoing medical cost performance in our Commercial business and the pricing impact of the resumption of the health insurance industry tax, partially offset by less favorable prior year reserve development.

The Government medical care ratio decreased for the three months ended June 30, 2018 compared with the same period in 2017, primarily reflecting increased premiums, partially offset by higher medical costs in our Medicare business.  For the six months ended June 30, 2018 compared with the same period in 2017, the Government medical care ratio decreased reflecting increased premiums and lower medical costs in our Medicare business, partially offset by less favorable prior year reserve development.

Operating expense ratios increased for the three months and six months ended June 30, 2018 compared to the same periods in 2017, primarily reflecting the resumption of the health insurance industry tax in 2018.

Other Items Affecting Health Care Results

Medical Customers

A medical customer is defined as a person meeting any one of the following criteria:

·is covered under an insurance policy, managed care arrangement, or service agreement issued by us;

·has access to our provider network for covered services under their medical plan; or

·has medical claims and services that are administered by us.

Our medical customer base was higher at June 30, 2018 compared to the same period in 2017, primarily reflecting growth in our middle market and select market segments.

Global Health Care Medical Costs Payable

Medical costs payable was higher at June 30, 2018 compared to December 31, 2017, primarily due to seasonality in our stop loss products, as well as customer growth.  See Note 6 to the Consolidated Financial Statements for additional information.

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Global Supplemental Benefits Segment

As described in the Segment Reporting introduction on page 57, the performance of the Global Supplemental Benefits segment is measured using adjusted income from operations.  The key factors affecting adjusted income from operations for this segment are:

·premium growth, including new business and customer retention;

·benefit expenses as a percentage of premiums (loss ratio);

·operating expenses and acquisition expenses as a percentage of operating revenues (expense ratio and acquisition cost ratio); and

·the impact of foreign currency movements.

Throughout this discussion and in the table presented below, prior period currency adjusted income from operations and operating revenues are calculated by applying the current period’s exchange rates to reported results in the prior period.  A strengthening U.S. dollar against foreign currencies decreases these measures, while a weakening U.S. dollar produces the opposite effect.

Results of Operations

Global Supplemental Benefits segment	Three Months Ended								Six Months Ended
financial summary	June 30,						Change		June 30,						Change
(In millions)	2018			2017			Favorable (Unfavorable)		2018			2017			Favorable (Unfavorable)
Operating revenues	$	1,106		$	955		16	%	$	2,208		$	1,864		18	%
Adjusted income from operations	$	118		$	105		12	%	$	230		$	179		28	%
Operating revenues, using 2018 currency exchange rates	$	1,106		$	977		13	%	$	2,208		$	1,932		14	%
Adjusted income from operations, using 2018 currency exchange rates	$	118		$	111		6	%	$	230		$	192		20	%
Adjusted margin	10.7		%	11.0		%	(30)bps		10.4		%	9.6		%	80bps
Loss ratio	55.6		%	54.2		%	(140)bps		55.9		%	56.3		%	40bps
Acquisition cost ratio	16.2		%	17.0		%	80bps		16.5		%	17.1		%	60bps
Expense ratio (excluding acquisition costs)	15.5		%	17.2		%	170bps		15.1		%	17.2		%	210bps

Operating revenues increased for the three months and six months ended June 30, 2018 compared with the same periods in 2017, primarily due to business growth, particularly in the United States and South Korea, and the favorable impact of foreign currency movements, primarily in the South Korean Won.

Adjusted income from operations increased for the three months and six months ended June 30, 2018 compared with the same periods in 2017, reflecting business growth, primarily in South Korea and China, and lower acquisition cost and operating expense ratios, partially offset by higher taxes in South Korea.  For the three months ended June 30, 2018, a higher loss ratio also partially offset the increase.

The segment’s loss ratios increased for the three months ended June 30, 2018 compared with the same period in 2017, primarily due to a shift in business mix to higher loss ratio products.  For the six months ended June 30, 2018 the loss ratio decreased compared with the same period in 2017, primarily due to favorable claims experience in South Korea, partially offset by a shift in business mix.

The acquisition cost ratios decreased for the three months and six months ended June 30, 2018 compared with the same periods in 2017 due to a shift toward higher premium products with lower acquisition costs, primarily in the United States.

Operating expense ratio.  The operating expense ratios (excluding acquisition costs) decreased for the three months and six months ended June 30, 2018 compared with the same periods in 2017 reflecting strong expense management.

Other Items Affecting Global Supplemental Benefits Results

For our Global Supplemental Benefits segment, South Korea is the single largest geographic market.  South Korea generated 49% of the segment’s operating revenues and 82% of the segment’s adjusted income from operations for the six months ended June 30, 2018.  On a consolidated basis, our operations in South Korea represented 5% of our operating revenues and 10% of adjusted income from operations for the six months ended June 30, 2018.

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Group Disability and Life Segment

As described in the Segment Reporting introduction on page 57, the performance of the Group Disability and Life segment is measured using adjusted income from operations.  The key factors affecting adjusted income from operations for this segment are:

·premium growth, including new business and customer retention;

·net investment income;

·benefit expenses as a percentage of premiums (loss ratio); and

·operating expenses as a percentage of premiums and fees and other revenues (expense ratio).

Results of Operations

Group Disability and Life segment	Three Months Ended								Six Months Ended
financial summary	June 30,						Change		June 30,						Change
(In millions)	2018			2017			Favorable (Unfavorable)		2018			2017			Favorable (Unfavorable)
Operating revenues	$	1,127		$	1,112		1	%	$	2,243		$	2,233		-	%
Adjusted income from operations	$	103		$	83		24	%	$	170		$	151		13	%
Adjusted margin	9.1		%	7.5		%	160bps		7.6		%	6.8		%	80bps
Loss ratio	74.8		%	76.3		%	150bps		76.9		%	77.3		%	40bps
Expense ratio	23.8		%	22.5		%	(130)bps		23.6		%	22.6		%	(100)bps

Operating revenues were slightly higher for the three months and six months ended June 30, 2018 compared with the same periods in 2017 due to moderate business growth and higher investment income.

Adjusted income from operations increased for the three months and six months ended June 30, 2018 compared with the same periods in 2017, driven by a lower tax rate and more favorable life results, partially offset by  less favorable disability results.

The segment’s loss ratios decreased for the three months and six months ended June 30, 2018 compared with the same periods in 2017 due primarily to lower life new claim incidence, partially offset by a less favorable disability claim resolution rate.

Operating expense ratios increased for the three months and six months ended June 30, 2018 compared with the same periods in 2017 due primarily to a higher commission rate and premium taxes.

Other Operations

As described in the Segment Reporting introduction on page 57, the performance of the Other Operations segment is measured using adjusted income from operations.  Cigna’s corporate-owned life insurance (“COLI”) business contributes the majority of earnings in Other Operations.  Other Operations also includes the results from the run-off reinsurance and settlement annuity businesses, as well as the remaining deferred gains recognized from the sale of the individual life insurance and annuity and retirement benefits businesses.

Results of Operations

Other Operations segment financial	Three Months Ended								Six Months Ended
summary	June 30,						Change		June 30,						Change
(In millions)	2018			2017			Favorable (Unfavorable)		2018			2017			Favorable (Unfavorable)
Operating revenues	$	121		$	118		3	%	$	237		$	234		1	%
Adjusted income from operations	$	21		$	19		11	%	$	45		$	39		15	%
Adjusted margin	17.4		%	16.1		%	130bps		19.0		%	16.7		%	230bps

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Operating revenues for the three months and six months ended June 30, 2018 were higher when compared with the same periods in 2017 primarily due to higher premiums on experience-rated business.

Adjusted income from operations for the three months and six months ended June 30, 2018 increased when compared with the same periods in 2017 and reflects a lower tax rate in 2018 as a result of U.S. tax reform legislation.

Corporate

Description

Corporate reflects amounts not allocated to operating segments, such as net interest expense (defined as interest on corporate debt less net investment income on investments not supporting segment operations), interest on uncertain tax positions, intersegment eliminations, compensation cost for stock options and related excess tax benefits, expense associated with our frozen pension plans and certain litigation matters, overhead and project costs.

Corporate financial summary	Three Months Ended						Six Months Ended
	June 30,						June 30,
(In millions)	2018		2017		% Change		2018		2017		% Change
Adjusted (loss) from operations	$	(76)	$	(48)	(58)	%	$	(140)	$	(101)	(39)	%

Corporate’s adjusted loss from operations increased for the three months and six months ended June 30, 2018 compared with the same periods in 2017, primarily due to lower tax benefits, including lower excess tax benefits on stock compensation and the impact of a lower U.S. tax rate effective in 2018 resulting from U.S. tax reform legislation.  For the six months ended June 30, 2018, lower operating expenses partially offset the increase.

INVESTMENT ASSETS

The following table presents our investment asset portfolio, excluding separate account assets, as of June 30, 2018 and December 31, 2017.  Additional information regarding our investment assets and related accounting policies is included in Notes 9, 10, 11, 12 and 13 to the Consolidated Financial Statements.

	June 30,		December 31,
(In millions)	2018		2017
Fixed maturities	$	23,593	$	23,138
Equity securities	560		588
Commercial mortgage loans	1,866		1,761
Policy loans	1,422		1,415
Other long-term investments	1,678		1,518
Short-term investments	220		199
Total investment assets	$	29,339	$	28,619

Fixed Maturities

Investments in fixed maturities include publicly traded and privately placed debt securities, mortgage and other asset-backed securities and preferred stocks redeemable by the investor.  These investments are classified as available for sale and are carried at fair value on our balance sheet.  Additional information regarding valuation methodologies, key inputs and controls is included in Note 9 to the Consolidated Financial Statements.  More detailed information about fixed maturities by type of issuer and maturity dates is included in Note 10 to the Consolidated Financial Statements.

The following table reflects our fixed maturity portfolio by type of issuer as of June 30, 2018 and December 31, 2017:

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	June 30,		December 31,
(In millions)	2018		2017
Federal government and agency	$	780	$	779
State and local government	1,045		1,287
Foreign government	2,455		2,487
Corporate	18,785		18,088
Mortgage and other asset-backed	528		497
Total fixed maturities	$	23,593	$	23,138

The fixed maturity portfolio increased by $455 million during the six months ended June 30, 2018, primarily reflecting an increase in investable funds, partially offset by declines in fair value due to increasing market interest rates and unfavorable foreign currency movements.  As of June 30, 2018, $21.1 billion, or 89%, of the fixed maturities in our investment portfolio were investment grade (Baa and above, or equivalent), and the remaining $2.5 billion were below investment grade.  The majority of the bonds that were below investment grade were rated at the higher end of the non-investment grade spectrum.  These quality characteristics have not materially changed from the prior year and are consistent with our investment strategy.

State and local government.  Our investment in state and local government securities, with an average quality rating of Aa2, was diversified by issuer and geography with no single exposure greater than $35 million as of June 30, 2018.  We assess each issuer’s credit quality based on a fundamental analysis of underlying financial information and do not rely solely on statistical rating organizations or monoline insurer guarantees.

Foreign government.  We invest in high quality foreign government obligations, with an average quality rating of Aa3 as of June 30, 2018.  These investments were concentrated in Asia, primarily South Korea, consistent with the geographic locations of our international business operations.  Foreign government obligations also include $258 million of investments in European sovereign debt, none of which were in countries with significant political or economic concerns such as Portugal, Italy, Ireland, Greece, Spain or Turkey.

Corporate.  As of June 30, 2018, corporate fixed maturities included the following:

·Private placement investments were $6 billion.  These investments are generally less marketable than publicly-traded bonds; however, yields on these investments tend to be higher than yields on publicly-traded bonds with comparable credit risk.  We perform a credit analysis of each issuer, diversify investments by industry and issuer and require financial and other covenants that allow us to monitor issuers for deteriorating financial strength and pursue remedial actions, if warranted.

·Investments in companies that are domiciled or have significant business interests in Italy, Ireland, Spain and Turkey were $409 million.  These investments have an average quality rating of Baa2 and are diversified by industry sector, including approximately 2% invested in financial institutions.

·Investments in the energy and natural gas sector were $1.8 billion with gross unrealized losses of $29 million.  These investments have an average quality rating of Baa2 and were diversified by issuer with no exposure greater than $65 million.

·Fixed maturity investments in the retail sector were approximately $425 million with gross unrealized losses of $13 million.  These investments have an average quality rating of Baa2 and were diversified across approximately 40 issuers with no exposure exceeding $45 million.

In addition to amounts classified in fixed maturities on our Consolidated Balance Sheets, we operate an insurance joint venture in China in which we have a 50% ownership interest.  We account for this joint venture on the equity basis of accounting and report it in other assets, including other intangibles.  This entity had an investment portfolio of approximately $5.8 billion that is primarily invested in local Chinese corporate and government fixed maturities.  There are no investments with a material unrealized loss as of June 30, 2018.

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Equity Securities

As of June 30, 2018, approximately $380 million in equity securities were invested in an exchange-traded fund (“ETF”) as part of a program to invest available cash in high quality and liquid assets.  The underlying assets of the ETF are primarily U.S. investment grade corporate bonds.  Upon adopting ASU 2016-01 effective January 1, 2018, unrealized gains of $10 million were reclassified from accumulated other comprehensive income to retained earnings.  Going forward, quarterly changes in market value will be recognized in realized investment results.

Commercial Mortgage Loans

Our commercial mortgage loans are fixed rate loans, diversified by property type, location and borrower.  Loans are secured by high quality commercial properties located throughout the United States and are generally made at less than 70% of the property’s value at origination of the loan.  Property value, debt service coverage, quality, building tenancy and stability of cash flows are all important financial underwriting considerations.  We hold no direct residential mortgage loans and do not originate or service securitized mortgage loans.

We completed the annual in-depth review of our commercial mortgage loan portfolio during the second quarter of 2018.  The results of the 2018 review were in line with the prior year and confirmed the strength of the overall portfolio.  For further discussion of the results of this review and changes in key loan metrics, see Note 10 to the Consolidated Financial Statements.

Commercial real estate capital markets remain very active for well-leased, quality commercial real estate located in strong institutional investment markets.  The vast majority of properties securing the mortgages in our mortgage loan portfolio possess these characteristics.  As of June 30, 2018, we had $167 million of commercial mortgage loans secured by retail properties, a sector that has been under pressure generally.  The loan-to-value ratio for these loans was 49%, and the debt service coverage ratio was 2.08.

As of June 30, 2018, the $1.9 billion commercial mortgage loan portfolio consisted of approximately 64 loans that are all in good standing.  Given the quality and diversity of the underlying real estate, positive debt service coverage and significant borrower cash investment generally ranging between 30 and 40%, we remain confident that borrowers will continue to perform as expected under their contract terms.

Other Long-term Investments

As of June 30, 2018, other long-term investments of $1.7 billion included investments in securities limited partnerships and real estate limited partnerships as well as direct investments in real estate joint ventures.  The funds typically invest in mezzanine debt or equity of privately held companies (securities partnerships) and equity real estate.  Given our subordinate position in the capital structure of these underlying entities, we assume a higher level of risk for higher expected returns.  To mitigate risk, these investments are diversified across approximately 130 separate partnerships, and approximately 65 general partners who manage one or more of these partnerships.  Also, the funds’ underlying investments are diversified by industry sector or property type, and geographic region.  No single partnership investment exceeded 4% of our securities and real estate partnership portfolio.

Problem and Potential Problem Investments

“Problem” bonds and commercial mortgage loans are either delinquent by 60 days or more or have been restructured as to terms, including concessions by us to modify the interest rate, principal payment or maturity date.  “Potential problem” bonds and commercial mortgage loans are considered current (no payment is more than 59 days past due), but management believes they have certain characteristics that increase the likelihood that they may become problems.  The characteristics management considers include, but are not limited to, the following:

·     request from the borrower for restructuring;

·     principal or interest payments past due by more than 30 but fewer than 60 days;

·     downgrade in credit rating;

·     collateral losses on asset-backed securities; and

·     for commercial mortgages, deterioration of debt service coverage below 1.0 or value declines resulting in estimated loan-to-value ratios increasing to 100% or more.

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We recognize interest income on problem bonds and commercial mortgage loans only when payment is actually received.  The amount that would have been reflected in net income if interest on non-accrual investments had been recognized in accordance with the original terms was not significant for the six months ended June 30, 2018 or 2017.

The following table shows problem and potential problem investments at amortized cost, net of valuation reserves and write-downs:

	June 30, 2018						December 31, 2017
(In millions)	Gross		Reserve		Net		Gross		Reserve		Net
Problem bonds	$	14	$	(14)	$	-	$	25	$	(7)	$	18
Foreclosed real estate	-		-		-		46		-		46
Total problem investments	$	14	$	(14)	$	-	$	71	$	(7)	$	64
Potential problem bonds	$	18	$	(1)	$	17	$	31	$	(1)	$	30
Total potential problem investments	$	18	$	(1)	$	17	$	31	$	(1)	$	30

Problem and potential problem investments decreased by $77 million since December 31, 2017 due primarily to sales of foreclosed real estate and fixed maturity bonds.  There were no problem or potential problem mortgage loans at June 30, 2018 or December 31, 2017.

Investment Outlook

Financial markets in the United States experienced increased volatility during the first half of 2018, as interest rates rose along with inflation expectations.  We continue to closely monitor global macroeconomic trends and their potential impact to our investment portfolio.  Certain sectors, such as retail, energy and natural gas have continued to show volatility and we expect that trend to continue.  See the fixed maturities and commercial mortgage loan sections of this MD&A for further information on our investments in these sectors.  Future realized and unrealized investment results will be driven largely by market conditions that exist when a transaction occurs or at the reporting date.  These future conditions are not reasonably predictable; however, we believe that the vast majority of our investments will continue to perform under their contractual terms.  Based on our strategy to match the duration of invested assets to the duration of insurance and contractholder liabilities, we expect to hold a significant portion of these assets for the long term.  Although future impairment losses resulting from interest rate movements and credit deterioration due to both investment-specific and the global economic uncertainties discussed above remain possible, we do not expect these losses to have a material adverse effect on our financial condition or liquidity.

MARKET RISK

Financial Instruments

Our assets and liabilities include financial instruments subject to the risk of potential losses from adverse changes in market rates and prices.  Our primary market risk exposures are interest rate risk and foreign currency exchange rate risk.  Certain financial instruments, such as insurance-related assets and liabilities, are excluded from these hypothetical calculations.  We encourage you to read this in conjunction with “Market Risk – Financial Instruments” included in Part II, Item 7 of our 2017 Form 10-K.  As of June 30, 2018, there are no material changes in our risk exposures from that reported in our 2017 Form 10-K.

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Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information responsive to this item is contained under the caption “Market Risk” in Item 2 above, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 4.  CONTROLS AND PROCEDURES

Based on an evaluation of the effectiveness of Cigna’s disclosure controls and procedures conducted under the supervision andwith the participation of Cigna’s management, Cigna’s Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, Cigna’s disclosure controls and procedures are effective to ensure that information required tobe disclosed by Cigna in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms and is accumulated and communicatedto Cigna’s management, including Cigna’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timelydecisions regarding required disclosure.

During the period covered by this report, there have been no changes in Cigna’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, Cigna’s internal control over financial reporting.

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Part II.  OTHER INFORMATION

Item 1.   LEGAL PROCEEDINGS

The information contained under “Litigation Matters”, “Regulatory Matters” and “Other Legal Matters” in Note 16 to the Consolidated Financial Statements is incorporated herein by reference.

Item 1A.  RISK FACTORS

In addition to the risk factors set forth in Part 1, Item 1A of Cigna’s Annual Report on Form 10-K for the year ended December 31, 2017, investors should consider the following risk factors arising from our proposed acquisition of Express Scripts.  The risk factors set forth below update and should be read together with the detailed description of risk factors reported in Cigna’s 2017 Form 10-K.

Cigna will be subject to business uncertainties and contractual restrictions while the Merger is pending.

Uncertainty about the effect of the Merger on employees and customers may have an adverse effect on Cigna and consequently on the combined company after the closing of the Merger.  These uncertainties may impair Cigna’s ability to retain and motivate key personnel and could cause customers and others that deal with Cigna to defer or decline entering into contracts with Cigna or making other decisions concerning Cigna or seek to change existing business relationships with Cigna.  Certain of Cigna’s customer contracts, joint venture agreements, shareholder or partnership agreements, vendor or supplier contracts, financing-related agreements, promissory notes and indentures contain change of control restrictions that may give rise to a right of termination or cancellation in connection with the Merger.  In addition, if key employees depart because of uncertainty about their future roles and the potential complexities of the Merger, Cigna’s businesses could be harmed.  Furthermore, the Merger Agreement contains restrictions on the conduct of Cigna’s businesses prior to the consummation of the Merger, which may prevent Cigna from undertaking certain actions or business opportunities that may arise pending consummation of the Merger.

The parties must obtain certain regulatory approvals in order to complete the actions contemplated by the Merger Agreement; if such approvals are not obtained or are obtained with conditions, the Merger may be prevented or delayed or the anticipated benefits of the Merger could be reduced.

Consummation of the Merger is conditioned upon, among other things, the expiration or termination of the waiting period (and any extensions thereof) applicable to the Merger under the federal Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”).  At any time before or after the Merger is consummated, any of the Department of Justice, the Federal Trade Commission or U.S. state attorneys general could take action under the antitrust laws in opposition to the Merger, including seeking to enjoin completion of the Merger, condition completion of the Merger upon the divestiture of assets of Cigna, Express Scripts or their subsidiaries or impose restrictions on the combined company’s post-merger operations.  These could negatively affect the results of operations and financial condition of the combined company following completion of the Merger.  Any such requirements or restrictions may prevent or delay completion of the Merger or may reduce the anticipated benefits of the Merger, which could also have a material adverse effect on the combined company’s business and cash flows, financial condition and results of operations.  Additionally, Cigna has agreed to accept certain remedies, conditioned on the closing, and may take other actions that Cigna determines in its sole discretion to take, to the extent necessary to ensure satisfaction, on or prior to the termination date of the Merger Agreement (as it may be extended), of certain conditions to the closing of the Merger relating to regulatory approvals.

Consummation of the Merger is also conditioned upon receiving certain approvals from, and/or making certain filings with, certain state insurance departments relating to Cigna’s and Express Scripts’ insurance company subsidiaries and certain state health departments relating to Cigna’s health care service plans and, to the extent required by applicable law, certain state pharmacy boards relating to Express Scripts’ subsidiaries licensed or authorized to engage in pharmaceutical-related business and certain state health departments relating to Express Scripts’ subsidiaries licensed or authorized as home health agencies.  No assurance can be given that the required regulatory approvals will be obtained or that the required conditions to closing will be satisfied, and, even if all such approvals are obtained and the conditions are satisfied, no assurance can be given as to the terms, conditions and timing of the approvals.

The Merger is subject to a number of closing conditions and, if these conditions are not satisfied, the Merger Agreement may be terminated in accordance with its terms and the Merger may not be completed.  In addition, the parties have the right to terminate the Merger Agreement under other specified circumstances, in which case the Merger would not be completed.

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The Merger is subject to a number of closing conditions and, if these conditions are not satisfied or waived (to the extent permitted by law), the Merger will not be completed.  These conditions include, among others:  (1) the adoption of the Merger Agreement by Cigna stockholders; (2) the adoption of the Merger Agreement by Express Scripts stockholders; (3) the absence of certain legal restraints prohibiting completion of the Merger; (4) the absence of certain actions or proceedings seeking to prohibit consummation of the Merger; (5) the receipt of certain regulatory approvals and consents without the imposition, individually or in the aggregate, of any condition that would result in, or would be reasonably likely to result in, individually or in the aggregate, a material adverse effect on Cigna, Express Scripts and their respective subsidiaries, taken as a whole, after giving effect to the Merger, including the synergies expected to be realized from the Merger; (6) the approval for listing of the shares of New Cigna common stock on the NYSE to be issued to Cigna stockholders and Express Scripts stockholders; and (7) the effectiveness of the registration statement to be filed by New Cigna in connection with the Merger.  In addition, each of Cigna’s and Express Scripts’ obligation to complete the Merger is subject to the accuracy of the other party’s representations and warranties in the Merger Agreement (subject in most cases to “materiality” and “material adverse effect” qualifications), the other party’s compliance with its covenants and agreements in the Merger Agreement in all material respects and such party’s receipt of a legal opinion from its tax counsel with respect to the tax treatment of the Merger.

The conditions to the closing may not be fulfilled and, accordingly, the Merger may not be completed.  In addition, if the Merger is not completed by December 8, 2018 (subject to extension to June 8, 2019 in certain circumstances), Cigna or Express Scripts may choose not to proceed with the Merger.  Moreover, the parties can mutually decide to terminate the Merger Agreement at any time prior to the consummation of the Merger, before or after the required Cigna stockholder approval and Express Scripts stockholder approval.  In addition, each of Cigna and Express Scripts may elect to terminate the Merger Agreement in certain other circumstances.  If the Merger Agreement is terminated, Cigna may incur substantial fees in connection with termination of the Merger Agreement and it will not realize the anticipated benefits of the Merger.

Failure to complete the Merger could impact the business, financial results and stock price of Cigna.

If the Merger is not completed, the ongoing businesses of Cigna may be adversely affected and Cigna will be subject to several risks and consequences, including the following:

·Cigna may be required, under certain circumstances, to pay Express Scripts a termination fee of $1.6 billion;

·Cigna may be required to pay Express Scripts a reverse termination fee of $2.1 billion under certain circumstances relating to the failure to obtain the required regulatory approvals for the Merger (but in no event will Cigna be required to pay both the termination fee and the reverse termination fee);

·Cigna will be required to pay certain costs relating to the Merger, whether or not the Merger is completed, such as significant fees and expenses relating to regulatory filings, financing arrangements and legal, accounting, financial advisory, consulting and other advisory fees and expenses,  employee benefit-related expenses, and filing and printing fees;

·Cigna may be required to pay significant fees and expenses relating to financing arrangements, whether or not the Merger is completed, which may include investment banking fees and commissions, commitment fees, early termination or redemption premiums, interest on debt financing between the date of incurrence and the date of repayment, professional fees and other costs and expenses;

·under the Merger Agreement, Cigna is subject to certain restrictions on the conduct of its business prior to completing the Merger which may adversely affect its ability to execute certain of its business strategies; and

·matters relating to the Merger may require substantial commitments of time and resources by Cigna management and the expenditure of significant funds in the form of fees and expenses, which could otherwise have been devoted to day-to-day operations and other opportunities that may have been beneficial to Cigna as an independent company.

68

Investors’ reactions to a failure to complete the Merger may be reflected in the trading price of our common stock.  In addition, employees, clients, customers and partners could have a variety of reactions if the Merger is not completed, which could affect our business relationships.  Cigna also could be subject to litigation related to a failure to complete the Merger or to enforce its obligations under the Merger Agreement.  If the Merger is not consummated, Cigna cannot assure its stockholders that the risks described above will not materially affect the business, financial results and stock price of Cigna.

Cigna’s inability to satisfy and comply with conditions under its existing financing arrangements or raise additional or replacement financing could delay or prevent the completion of the Merger.

Consummation of the Merger is not conditioned on Cigna’s ability to obtain financing.  Cigna expects to use cash on hand and debt financing to fund the cash component of the Merger Consideration.  Such debt financing could take any of several forms or any combination of them, including but not limited to the following:  (1) New Cigna may borrow under the Bridge Facility; (2) Cigna or New Cigna may issue senior notes in the public and/or private capital markets; (3) New Cigna may borrow up to $3.0 billion under the Term Loan Credit Agreement; (4) New Cigna may borrow under the Revolving Credit Agreement; and (5) Cigna and/or New Cigna may issue commercial paper.  The Term Loan Credit Agreement contains and the Commitment Letter contemplates customary conditions to funding, affirmative covenants, negative covenants and events of default.  There is a risk that these conditions or covenants will not be satisfied or complied with, as applicable, on a timely basis or at all.  There is also a risk that one or more members of the lending syndicate will default on its obligations to provide its committed portion of the financing (and the commitments of any defaulting syndicate member may not be replaced on a timely basis or at all).  There are a number of risks and uncertainties associated with the execution of a capital markets financing.  All of these risks are magnified given the scale and complexity of financing required to consummate the transactions contemplated by the Merger Agreement.  Any failure of Cigna or New Cigna to satisfy and comply with conditions under its existing financing arrangements or raise additional or replacement financing could delay or impede the closing of the Merger.

Failure to successfully combine the businesses of Cigna and Express Scripts in the expected time frame may adversely affect the combined company’s future results.

The success of the Merger will depend, in part, on the combined company’s ability to realize the anticipated benefits from combining the businesses of Cigna and Express Scripts.  To realize these anticipated benefits, the businesses of Cigna and Express Scripts must be successfully combined.  Historically, Cigna and Express Scripts have been independent companies, and they will continue to be operated as such until the completion of the Merger.  The management of the combined company may face significant challenges in consolidating the functions of Cigna and Express Scripts, integrating the technologies, organizations, procedures, policies and operations, as well as addressing the different business cultures at the two companies, and retaining key personnel.  If the combined company is not successfully integrated, the anticipated benefits of the Merger may not be realized fully or at all or may take longer to realize than expected.  The integration may also be complex and time consuming, and require substantial resources and effort.  The integration process and other disruptions resulting from the Merger may also disrupt each company’s ongoing businesses and/or adversely affect each company’s relationships with employees, regulators and others with whom each company has business or other dealings.

Combining the businesses of Cigna and Express Scripts may be more difficult, costly or time-consuming than expected, which may adversely affect the combined company’s results and negatively affect the value of the combined company’s common stock following the Merger.

Cigna has entered into the Merger Agreement because it believes that the Merger will be beneficial to Cigna and its stockholders and that combining the businesses of Cigna and Express Scripts will produce benefits and cost savings.  If the combined company is not able to successfully combine the businesses of Cigna and Express Scripts in an efficient, effective and timely manner, the anticipated benefits and cost savings of the Merger may not be realized fully, or at all, or may take longer to realize than expected, and the value of the common stock of the combined company may be affected adversely.  An inability to realize the full extent of the anticipated benefits of the Merger, as well as any delays encountered in the integration process, could have an adverse effect upon the revenues, level of expenses and operating results of the combined company, which may adversely affect the value of the common stock of the combined company after the completion of the Merger.  In addition, the actual integration may result in additional and unforeseen expenses, and the anticipated benefits of the integration plan may not be realized.  Actual synergies, if achieved, may be lower than expected and may take longer to achieve than anticipated.  If the combined company is not able to adequately address integration challenges, the combined company may be unable to successfully integrate Cigna’s and Express Scripts’ operations or to realize the anticipated benefits of the integration of the two companies.

69

Third parties may terminate or alter existing contracts or relationships with Cigna or Express Scripts.

Each of Cigna and Express Scripts has contracts with customers, vendors, licensors, joint venture partners, lenders and other business partners which may require Cigna or Express Scripts, as applicable, to obtain consents from these other parties in connection with the Merger.  If these consents cannot be obtained, the counterparties to these contracts and other third parties with which Cigna and/or Express Scripts currently have relationships may have the ability to terminate, reduce the scope of or otherwise materially adversely alter their relationships with either party or both parties in anticipation of the Merger, or with the combined company following the Merger.  The pursuit of such rights may result in Cigna, Express Scripts or the combined company suffering a loss of potential future revenue or incurring liabilities in connection with a breach of such agreements or losing rights that are material to its business.  Any such disruptions could limit the combined company’s ability to achieve the anticipated benefits of the Merger.  The adverse effect of such disruptions could also be exacerbated by a delay in the completion of the Merger or the termination of the Merger Agreement.

The Merger Agreement limits Cigna’s ability to pursue alternatives to the Merger.

The Merger Agreement contains provisions that make it more difficult for Cigna to enter into alternative transactions.  The Merger Agreement contains certain provisions that restrict Cigna’s ability to, among other things, solicit, initiate or knowingly encourage or knowingly facilitate the submission of inquiries, proposals or offers relating to or that would reasonably be expected to lead to any acquisition proposal from a third party.  The Merger Agreement also provides that the Board of Directors of Cigna will not change its recommendation that the stockholders of Cigna adopt the Merger Agreement and will not approve any agreement with respect to an acquisition proposal, subject to limited exceptions.

In addition, Cigna may be required to pay a termination fee of $1.6 billion to Express Scripts if the Merger is not consummated under specified circumstances.  In addition, upon adoption of the Merger Agreement by the stockholders of Cigna, Cigna’s right to terminate the Merger Agreement in response to a superior proposal will be eliminated.  While Cigna believes these provisions are reasonable, customary and not preclusive of other offers, the provisions might discourage a third party that has an interest in acquiring all or a significant part of Cigna from considering or proposing such acquisition, even if such party were prepared to enter into an agreement that may be more favorable to Cigna and/or its stockholders.  Furthermore, the requirement to pay a termination fee under certain circumstances may result in a third party proposing to pay a lower per-share price to acquire Cigna than it might otherwise have proposed to pay because of the added expense of the $1.6 billion termination fee that may become payable by Cigna in certain circumstances.

Cigna will incur significant transaction and merger-related transition costs in connection with the Merger.

Cigna expects that it will incur significant, non-recurring costs in connection with consummating the Merger and integrating the operations of the two companies post-closing.  Cigna may incur additional costs to maintain employee morale and to retain key employees.  Cigna will also incur significant fees and expenses relating to financing arrangements and legal, accounting and other transaction fees and other costs associated with the Merger.  Some of these costs are payable regardless of whether the Merger is completed.  Moreover, under specified circumstances, Cigna may be required to pay a termination fee of $1.6 billion.  In addition, Cigna may be required to pay a reverse termination fee of $2.1 billion under certain circumstances relating to a failure to obtain the required regulatory approvals for the Merger.  Notwithstanding the foregoing, in no event will the termination fee be paid to a party more than once, and in no event will Cigna be required to pay both the termination fee and the reverse termination fee.  Cigna continues to assess the magnitude of these costs, and additional unanticipated costs may be incurred in the Merger and the integration of the two companies’ businesses.

70

Item 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(c)  Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The following table provides information about Cigna’s share repurchase activity for the quarter ended June 30, 2018:

Issuer Purchases of Equity Securities

Period	Total # of shares purchased(1)	Average price paid per share	Total # of shares purchased as part of publicly announced program(2)	Approximate dollar value of shares that may yet be purchased as part of publicly announced program(3)
April 1-30, 2018	428	$168.70	-	$2,723,207,261
May 1-31, 2018	1,316	$172.00	-	$2,723,207,261
June 1-30, 2018	444	$172.42	-	$2,723,207,261
Total	2,188	$171.44	-	N/A

(1) Includes shares tendered by employees as payment of taxes withheld on the vesting of restricted stock and strategic performance shares granted under the Company’s equity compensation plans.  Employees tendered 428 shares in April, 1,316 shares in May and 444 shares in June 2018.

(2) Additionally, the Company maintains a share repurchase program, authorized by the Board of Directors.  Under this program, the Company may repurchase shares from time to time, depending on market conditions and alternate uses of capital.  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 Exchange Act of 1934, as amended, including through Rule 10b5-1 trading plans.  The program may be suspended or discontinued at any time.  No shares were repurchased from July 1, 2018 through August 1, 2018.  The remaining share repurchase authority authorization under the program was $2.7 billion as of August 2, 2018.  The Company does not expect to conduct additional share repurchases prior to closing the Express Scripts combination.

(3) Approximate dollar value of shares is as of the last date of the applicable month.

71

Item 6.EXHIBITS

INDEX TO EXHIBITS

Number	Description	Method of Filing
2.1	Amendment No. 1, dated as of June 27, 2018, to the Agreement and Plan of Merger, dated as of March 8, 2018, by and among Cigna Corporation, Express Scripts Holding Company, Halfmoon Parent, Inc., Halfmoon I, Inc. and Halfmoon II, Inc.	Filed as Exhibit 2.1 to the registrant’s Form 8-K filed July 2, 2018 and incorporated herein by reference.
3.1	Restated Certificate of Incorporation of the registrant as last amended April 25, 2018	Filed as Exhibit 3.1 to the registrant’s Form 8-K filed April 30, 2018 and incorporated herein by reference.
3.2	By-Laws of the registrant as last amended and restated April 25, 2018	Filed as Exhibit 3.2 to the registrant’s Form 8-K filed April 30, 2018.
12	Computation of Ratio of Earnings to Fixed Charges	Filed herewith.
31.1	Certification of Chief Executive Officer of Cigna Corporation pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934	Filed herewith.
31.2	Certification of Chief Financial Officer of Cigna Corporation pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934	Filed herewith.
32.1	Certification of Chief Executive Officer of Cigna Corporation pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section 1350	Furnished herewith.
32.2	Certification of Chief Financial Officer of Cigna Corporation pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section 1350	Furnished herewith.
101	Financial statements from the quarterly report on Form 10-Q of Cigna Corporation for the quarter ended June 30, 2018 formatted in XBRL (eXtensible Business Reporting Language):  (i) the Consolidated Statements of Income; (ii) the Consolidated Statements of Comprehensive Income; (iii) the Consolidated Balance Sheets; (iv) the Consolidated Statements of Total Equity; (v) the Consolidated Statements of Cash Flow; and (vi) the Notes to the Consolidated Financial Statements	Filed herewith.

Shareholders may obtain copies of exhibits by writing to Cigna Corporation, Shareholder Services Department, 1601 Chestnut Street, Philadelphia, PA 19192.

72

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Cigna Corporation
Date:	August 2, 2018
By:	/s/ Eric P. Palmer
	Eric P. Palmer
	Executive Vice PresidentChief Financial Officer
	(Duly Authorized Officer and Principal Financial Officer)

73

EX-12

Exhibit 12

Cigna Corporation

Computation of Ratio of Earnings to Fixed Charges

	Six Months Ended
	June 30,
(Dollars in millions)	2018		2017
Income before income taxes	$	2,320	$	2,024
Adjustments
(Income) from equity investees, net of distributions	(20)		(5)
(Income) Loss attributable to noncontrolling interests	(4)		8
Income before income taxes, as adjusted	$	2,296	$	2,027
Fixed charges included in income
Interest expense	$	128	$	122
Interest portion of rental expense	27		27
Interest credited to contractholders	1		1
Total fixed charges included in income	$	156	$	150
Income available for fixed charges	$	2,452	$	2,177
RATIO OF EARNINGS TO FIXED CHARGES:	15.7		14.5

EX-31.1

Exhibit 31.1CERTIFICATION

I, DAVID M. CORDANI, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Cigna Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	/s/ David M. Cordani
	Chief Executive Officer
Date:	August 2, 2018

EX-31.2

Exhibit 31.2CERTIFICATION

I, ERIC P. PALMER, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Cigna Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	/s/ Eric P. Palmer
	Chief Financial Officer
Date:	August 2, 2018

EX-32.1

Exhibit 32.1 Certification of Chief Executive Officer of Cigna Corporation pursuant to 18 U.S.C. Section 1350

I certify that, to the best of my knowledge and belief, the Quarterly Report on Form 10-Q of Cigna Corporation for the fiscal period ended June 30, 2018 (the “Report”):

(1)      complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)      the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Cigna Corporation.

/s/ David M. Cordani

David M. Cordani

Chief Executive Officer

August 2, 2018

EX-32.2

Exhibit 32.2 Certification of Chief Financial Officer of Cigna Corporation pursuant to 18 U.S.C. Section 1350

I certify that, to the best of my knowledge and belief, the Quarterly Report on Form 10-Q of Cigna Corporation for the fiscal period ended June 30, 2018 (the “Report”):

(1)      complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)      the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Cigna Corporation.

/s/ Eric P. Palmer

Eric P. Palmer

Chief Financial Officer

August 2, 2018

XML

Document and Entity Information - $ / shares	6 Months Ended
	Jun. 30, 2018	Jul. 20, 2018	Dec. 31, 2017
Document Document And Entity Information [Abstract]
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Entity Registrant Name	CIGNA Corporation
Entity Central Index Key	0000701221
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Trading Symbol	CI
Entity Common Stock Shares Outstanding		243,364,579
Amendment Flag	false
Entity Current Reporting Status	Yes
Entity Well Known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Common stock, par value per share	$ 0.25		$ 0.25

XML

Consolidated Statements of Income - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenues
Premiums	$ 9,012	$ 8,057	$ 18,011	$ 16,208
Fees and other revenues	1,358	1,252	2,726	2,516
Net investment income	352	308	681	611
Mail order pharmacy revenues	758	757	1,475	1,467
Realized investment gains (losses):
Other-than-temporary impairments on fixed maturities	(5)	(2)	(18)	(9)
Other realized investment gains (losses), net	2	53	(18)	106
Net realized investment gains (losses)	(3)	51	(36)	97
Total revenues	11,477	10,425	22,857	20,899
Benefits and Expenses
Global Health Care medical costs	5,421	4,890	10,738	9,839
Other benefit expenses	1,424	1,335	2,879	2,702
Mail order pharmacy costs	613	626	1,174	1,207
Other operating expenses	2,893	2,412	5,695	5,067
Amortization of other acquired intangible assets	24	28	51	60
Total benefits and expenses	10,375	9,291	20,537	18,875
Income before Income Taxes	1,102	1,134	2,320	2,024
Income taxes (benefits):
Current	297	304	589	590
Deferred	(3)	20	6	31
Total income taxes	294	324	595	621
Net Income	808	810	1,725	1,403
Less: net income (loss) attributable to noncontrolling interests	2	(3)	4	(8)
Shareholders' net income	$ 806	$ 813	$ 1,721	$ 1,411
Shareholders' net income per share:
Basic	$ 3.32	$ 3.2	$ 7.1	$ 5.54
Diluted	3.29	3.15	7.01	5.45
Dividends declared per share	$ 0	$ 0	$ 0.04	$ 0.04

XML

Consolidated Statements of Shareholders' Comprehensive Income - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Statement Of Comprehensive Income
Shareholders' net income	$ 806	$ 813	$ 1,721	$ 1,411
Shareholders' other comprehensive income (loss), net of tax:
Net unrealized appreciation (depreciation), securities	(141)	67	(420)	74
Net unrealized appreciation (depreciation), derivatives	(8)	0	(13)	(3)
Net translation of foreign currencies	(152)	27	(107)	139
Postretirement benefits liability adjustment	5	12	18	26
Shareholders' other comprehensive income (loss), net of tax	(296)	106	(522)	236
Shareholders' comprehensive income (loss)	$ 510	$ 919	$ 1,199	$ 1,647

XML

Consolidated Statements of Total Comprehensive Income - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Statement Of Comprehensive Income
Shareholders' comprehensive income (loss)	$ 510	$ 919	$ 1,199	$ 1,647
Comprehensive income (loss) attributable to noncontrolling interests:
Net income (loss) attributable to redeemable noncontrolling interests	2	(1)	4	(3)
Net income (loss) attributable to other noncontrolling interests	0	(2)	0	(5)
Other comprehensive income (loss) attributable to redeemable noncontrolling interests	(8)	2	(10)	0
Total comprehensive income (loss) attributable to noncontrolling interests	(6)	(1)	(6)	(8)
Total comprehensive income	$ 504	$ 918	$ 1,193	$ 1,639

XML

Consolidated Balance Sheets - USD ($) $ in Millions	Jun. 30, 2018	Dec. 31, 2017
Investments:
Fixed maturities, at fair value (amortized cost, $23,123; $21,867)	$ 23,593	$ 23,138
Equity securities	560	588
Commercial mortgage loans	1,866	1,761
Policy loans	1,422	1,415
Other long-term investments	1,678	1,518
Short-term investments	220	199
Total investments	29,339	28,619
Cash and cash equivalents	3,634	2,972
Premiums, accounts and notes receivable, net	3,412	3,380
Reinsurance recoverables	5,877	6,046
Deferred policy acquisition costs	2,300	2,237
Property and equipment	1,554	1,563
Deferred tax assets, net	140	39
Goodwill	6,147	6,164
Other assets, including other intangibles	2,412	2,316
Separate account assets	8,287	8,423
Total assets	63,102	61,759
Liabilities:
Contractholder deposit funds	8,121	8,196
Future policy benefits	9,707	10,040
Unpaid claims and claim expenses	5,246	5,168
Global Health Care medical costs payable	3,005	2,719
Unearned premiums	1,244	724
Total insurance and contractholder liabilities	27,323	26,847
Accounts payable, accrued expenses and other liabilities	7,406	7,290
Short-term debt	109	240
Long-term debt	5,195	5,199
Separate account liabilities	8,287	8,423
Total liabilities	48,320	47,999
Contingencies - Note 16
Redeemable noncontrolling interests	39	49
Shareholders' Equity
Common stock (par value per share, $0.25; shares issued, 296; authorized, 600)	74	74
Additional paid-in capital	2,974	2,940
Accumulated other comprehensive income (loss)	(1,843)	(1,082)
Retained earnings	17,722	15,800
Less: treasury stock, at cost	(4,184)	(4,021)
Total shareholders' equity	14,743	13,711
Total liabilities and shareholders' equity	$ 63,102	$ 61,759
Shareholders' Equity Per Share	$ 60.59	$ 56.2

XML

Consolidated Balance Sheets (Parentheticals) - USD ($) shares in Millions, $ in Millions	Jun. 30, 2018	Dec. 31, 2017
Consolidated Balance Sheets
Fixed maturities, at amortized cost	$ 23,123	$ 21,867
Common stock, par value per share	$ 0.25	$ 0.25
Common stock shares issued	296	296
Common stock shares authorized	600	600

XML

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 (Previously Reported [Member]) at Dec. 31, 2016		$ 13,727	$ 13,723	$ 74	$ 2,892	$ (1,382)	$ 13,855	$ (1,716)	$ 4
Total Equity, beginning of period (Restatement Adjustment [Member])	[1]	(24)	(24)				(24)
Total Equity, beginning of period at Dec. 31, 2016		13,703	13,699	74	2,892	(1,382)	13,831	(1,716)	4
Increase (Decrease) In Stockholders Equity [Roll Forward]
Effect of issuing stock for employee benefit plans		131	131		33		(154)	252
Other comprehensive income (loss)		236	236			236
Net income (loss)		1,406	1,411				1,411		(5)
Common dividends declared (per share: $0.04)		(10)	(10)				(10)
Repurchase of common stock		(942)	(942)					(942)
Other transactions impacting noncontrolling interest		(1)	(3)		(3)				2
Total Equity, end of period at Jun. 30, 2017		14,523	14,522	74	2,922	(1,146)	15,078	(2,406)	1
Beginning Balance (Previously Reported [Member]) at Dec. 31, 2016		58
Beginning Balance at Dec. 31, 2016		58
Redeemable Noncontrolling Interests
Other comprehensive income (loss)		0
Net income (loss)		(3)
Other transactions impacting noncontrolling interest		3
Ending Balance at Jun. 30, 2017		58
Total Equity, beginning of period (Previously Reported [Member]) at Mar. 31, 2017		14,229	14,226	74	2,912	(1,252)	14,356	(1,864)	3
Total Equity, beginning of period (Restatement Adjustment [Member])	[1]	(24)	(24)				(24)
Total Equity, beginning of period at Mar. 31, 2017		14,205	14,202	74	2,912	(1,252)	14,332	(1,864)	3
Increase (Decrease) In Stockholders Equity [Roll Forward]
Effect of issuing stock for employee benefit plans		93	93		10		(67)	150
Other comprehensive income (loss)		106	106			106
Net income (loss)		811	813				813		(2)
Repurchase of common stock		(692)	(692)					(692)
Other transactions impacting noncontrolling interest		0	0
Total Equity, end of period at Jun. 30, 2017		14,523	14,522	74	2,922	(1,146)	15,078	(2,406)	1
Beginning Balance (Previously Reported [Member]) at Mar. 31, 2017		56
Beginning Balance at Mar. 31, 2017		56
Redeemable Noncontrolling Interests
Other comprehensive income (loss)		2
Net income (loss)		(1)
Other transactions impacting noncontrolling interest		1
Ending Balance at Jun. 30, 2017		58
Total Equity, beginning of period at Dec. 31, 2017		13,711	13,711	74	2,940	(1,082)	15,800	(4,021)	0
Increase (Decrease) In Stockholders Equity [Roll Forward]
Reclassification adjustment related to U.S. tax reform legislation	[1]	0	0			(229)	229
Effect of issuing stock for employee benefit plans		60	60		34		(86)	112
Other comprehensive income (loss)		(522)	(522)			(522)
Net income (loss)		1,721	1,721				1,721
Common dividends declared (per share: $0.04)		(10)	(10)				(10)
Repurchase of common stock		(275)	(275)					(275)
Other transactions impacting noncontrolling interest		0	0
Total Equity, end of period at Jun. 30, 2018		14,743	14,743	74	2,974	(1,843)	17,722	(4,184)	0
Beginning Balance at Dec. 31, 2017		49
Redeemable Noncontrolling Interests
Other comprehensive income (loss)		(10)
Net income (loss)		4
Other transactions impacting noncontrolling interest		(4)
Ending Balance at Jun. 30, 2018		39
Total Equity, beginning of period at Mar. 31, 2018	[1]	14,195	14,195	74	2,963	(1,547)	16,933	(4,228)	0
Increase (Decrease) In Stockholders Equity [Roll Forward]
Effect of issuing stock for employee benefit plans		38	38		11		(17)	44
Other comprehensive income (loss)		(296)	(296)			(296)
Net income (loss)		806	806				806		0
Common dividends declared (per share: $0.04)		0	0
Repurchase of common stock		0	0					0
Other transactions impacting noncontrolling interest		0	0
Total Equity, end of period at Jun. 30, 2018		14,743	$ 14,743	$ 74	$ 2,974	$ (1,843)	$ 17,722	$ (4,184)	$ 0
Beginning Balance at Mar. 31, 2018	[1]	49
Redeemable Noncontrolling Interests
Other comprehensive income (loss)		(8)
Net income (loss)		2
Other transactions impacting noncontrolling interest		(4)
Ending Balance at Jun. 30, 2018		$ 39

[1] See Note 2 for further information about adjustments resulting from the Company's adoption of new accounting standards in 2018.

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Consolidated Statements of Cash Flows - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash Flows from Operating Activities
Net Income	$ 1,725	$ 1,403
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	276	286
Realized investment (gains) losses	36	(97)
Deferred income taxes (benefits)	6	31
Net changes in assets and liabilities, net of non-operating effects:
Premiums, accounts and notes receivable	(5)	(222)
Reinsurance recoverables	60	64
Deferred policy acquisition costs	(139)	(137)
Other assets	244	(71)
Insurance liabilities	955	973
Accounts payable, accrued expenses and other liabilities	(246)	(159)
Current income taxes	70	83
Distributions from partnership investments	71	74
Other, net	(33)	48
Net cash provided by (used in) operating activities	3,020	2,276
Proceeds from investments sold:
Fixed maturities and equity securities	1,273	930
Investment maturities and repayments:
Fixed maturities and equity securities	887	945
Commercial mortgage loans	88	118
Other sales, maturities and repayments (primarily short-term and other long-term investments)	412	1,059
Investments purchased or originated:
Fixed maturities and equity securities	(3,544)	(2,938)
Commercial mortgage loans	(194)	(194)
Other (primarily short-term and other long-term investments)	(501)	(444)
Property and equipment purchases	(220)	(194)
Acquisitions, net of cash acquired	0	(14)
Net cash provided by (used in) investing activities	(1,799)	(732)
Cash Flows from Financing Activities
Deposits and interest credited to contractholder deposit funds	574	686
Withdrawals and benefit payments from contractholder deposit funds	(594)	(733)
Net change in short-term debt	(5)	(14)
Repayment of long-term debt	(131)	(250)
Repurchase of common stock	(310)	(895)
Issuance of common stock	27	76
Other, net	(103)	(13)
Net cash provided by (used in) financing activities	(542)	(1,143)
Effect of foreign currency rate changes on cash and cash equivalents	(17)	25
Net increase / (decrease) in cash and cash equivalents	662	426
Cash and cash equivalents, January 1,	2,972	3,185
Cash and cash equivalents, June 30,	3,634	3,611
Supplemental Disclosure of Cash Information:
Income taxes paid, net of refunds	519	504
Interest paid	$ 127	$ 123

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Description of Business

6 Months Ended

Jun. 30, 2018

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 insurance and related products and services offered by our insurance and other subsidiaries. The majority of these products are offered through employers and other groups such as governmental and non-governmental organizations, unions and associations. Cigna also offers commercial health and dental insurance, Medicare and Medicaid products and health, life and accident insurance coverages to individuals in the United States and selected international markets. In addition to its ongoing operations described above, Cigna also has certain run-off operations.

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, 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 Advantage 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 primarily in selected international markets and in the United 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 reinsurance 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, such as net interest expense (defined as interest on corporate debt less net investment income on investments not supporting segment operations), interest on uncertain tax positions, intersegment eliminations, compensation cost for stock options and related excess tax benefits, expense associated with frozen pension plans and certain litigation matters and costs for corporate projects, including overhead.

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Summary of Signficant Accounting Policies

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

Note 2 – Significant Accounting Policies

Basis of Presentation

The Consolidated Financial Statements include the accounts of Cigna Corporation and its subsidiaries. Intercompany transactions and accounts have been eliminated in consolidation.  These Consolidated Financial Statements were prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Amounts recorded in the Consolidated Financial Statements necessarily reflect management’s estimates and assumptions about medical costs, investment 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 in 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.

These interim Consolidated Financial Statements are unaudited but include all adjustments (including normal recurring adjustments) necessary, in the opinion of management, for a fair statement of financial position and results of operations for the periods reported. The interim Consolidated Financial Statements and Notes should be read in conjunction with the Consolidated Financial Statements and Notes included in the Company’s 2017 Annual Report on Form 10-K (“2017Form 10-K”). The preparation of interim Consolidated Financial Statements necessarily relies heavily on estimates. This and certain other factors, including the seasonal nature of portions of the health care and related benefits business, as well as competitive and other market conditions, call for caution in estimating full-year results based on interim results of operations.

Recent Accounting Pronouncements

The Company’s 2017Form 10-K includes discussion of significant recent accounting pronouncements that either have impacted or may impact our financial statements in the future.

The following tables provide information about recently adopted and recently issued or changed accounting guidance (applicable to Cigna) that have occurred since the Company filed its 2017Form 10-K.

Recently Adopted Accounting Guidance
Accounting Standard and Adoption Date	Requirements and Effects of Adopting New Guidance
Revenue from Contracts with Customers (Accounting Standards Update ("ASU") 2014-09 and related amendments)Adopted as of January 1, 2018	Requires:
	•	Revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services
	•	Additional revenue-related disclosures
	Effects of adoption:
	•	Applies to the Company’s service and mail order pharmacy contracts with customers
	•	Adopted through full retrospective restatement
	•	Cumulative effect adjustment of $24 million after-tax was recorded, reducing the December 31, 2016 balance of retained earnings. Adjustment established a contract liability for service fee revenue billed that must be deferred and allocated to services performed after a customer contract terminates. Subsequent changes in the contract liability and the related impact to net income and per share amounts since adoption were immaterial.
	•	Immaterial reclassifications were made to prior periods in the Consolidated Statements of Income to conform to the current presentation. The ASU and related interpretive guidance provide clarification on topics including whether all or a part of a contract is within its scope, and the definition of a customer. Companies are required to identify and evaluate distinct performance obligations within their contracts. These clarifications resulted in reclassifications within the Global Health Care Segment affecting premiums, fees and other revenues, Global Health Care medical costs, and other operating expenses and had no impact on recognition patterns or net income.
	•	Prior period balances in the Company's footnote disclosures have been updated to reflect adjustments resulting from the adoption of this ASU.
Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01 and related amendments)Adopted 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
	Effects of adoption:
	•	Certain limited partnership interests previously carried at cost of approximately $200 million were increased to fair value of approximately $275 million on January 1, 2018. Subsequent changes in fair value are reported in net investment income.
	•	Changes in fair value for equity securities that have a readily determinable fair value that were previously reported in accumulated other comprehensive income are now reported in net realized investment gains.
	•	Cumulative effect adjustment of $62 million after-tax was recorded, increasing the opening balance of retained earnings in 2018.
	•	See Notes 9 and 10 for updated disclosures about equity securities.
Targeted Improvements to Accounting for Hedging Activities (ASU 2017-12)Early adopted as of January 1, 2018	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
	Effects of adoption:
	•	An immaterial amount of retained earnings was reclassified to accumulated other comprehensive income, decreasing the opening balance in 2018, for a portion of the hedging instruments that was previously excluded from the assessment of hedge effectiveness for fair value hedges.
	•	See Note 11 for the Company's disclosures about derivatives.

Recently Adopted Accounting Guidance
Accounting Standard and Adoption Date	Requirements and Effects of Adopting New Guidance
Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02)Early adopted as of January 1, 2018	Guidance:
	•	Allows companies to reclassify the tax effects stranded in accumulated other comprehensive income to retained earnings as a result of H.R.1, An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018 (referred to throughout this Form 10-Q as "U.S. tax reform" or "U.S. tax reform legislation")
	•	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: Accumulated other comprehensive income of $229 million was reclassified to retained earnings, increasing the opening balance in 2018. See Note 13 for additional information including accounting policy disclosures.

In addition to the standards listed above, the Company adopted the following guidance in first quarter 2018 with no material impact to our financial statements: Intra-Entity Transfers of Assets Other than Inventory (ASU 2016-16), Clarifying the Definition of a Business (ASU 2017-01), Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (ASU 2017-07), Statement of Cash Flows: Restricted Cash (ASU 2016-18), Gains and Losses from the Derecognition of Nonfinancial Assets (ASU 2017-05) and Stock Compensation Scope of Modification Accounting (ASU 2017-09).

Accounting Guidance Not Yet Adopted
Accounting Standard and Effective Date Applicable for Cigna	Requirements and Expected Effects of Guidance Not Yet Adopted
Leases (ASU 2016-02 and related amendments)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
	•	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 its 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 plans to elect the optional practical expedient to retain the current classification of leases, and therefore, does not anticipate a material impact to the Consolidated Statements of Income or Cash Flows.
	•	The Company is implementing a new lease system and also expects that adoption of the new standard will require changes to internal control over financial reporting.

Updates to Significant Accounting Policies

The Company’s 2017 Form 10-K includes discussion of significant accounting policies in Note 2 or the applicable Notes to the Consolidated Financial Statements. Significant updates to these policies resulting from the adoption of new accounting guidance in 2018 are provided as follows:

• ASU 2016-1 (Recognition and Measurement of Financial Assets and Liabilities): see Notes 9 and 10
• ASU 2017-12 (Targeted Improvements to Accounting for Hedging Activities): see Note 11
• ASU 2014-09 (Revenue from Contracts with Customers), also referred to as Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers and related guidance (“ASC 606”): see below.

The majority of the Company’s revenues are not subject to the guidance in ASC 606, including premiums from insurance contracts and fees for investment-related products accounted for under insurance guidance (ASC 944). ASC 606 applies to the Company’s service and mail order pharmacy contracts with clients. See Note 17 for disaggregated revenue from external customers by segment and by major product or service identified with applicable accounting guidance (ASC 944 or ASC 606).

Accounting for Contracts with Customers – Service and Mail Order Pharmacy Arrangements

Service Fees and Expenses

The majority of the Company’s service fees are derived from administrative services only (“ASO”) arrangements thatallow corporate clients to self-fund claims and assume the risk of medical or other benefit costs. Most of the Company’s ASO arrangements are for Global Health Care medical and specialty services, including pharmacy benefits and, to a lesser extent, ASO services in its Group Disability and Life and Global Supplemental Benefits segments. Generally, the Company’s ASO arrangements are short-term. Contract modifications typically occur on renewal and are prospective in nature.

In return for fees from these clients, the Company provides or makes available various services supporting benefit management and claims administration. In addition, Global Health Care’s services include access to the Company’s participating provider networks, disease management, utilization management, and cost containment services.

In general, the Company considers these services to be a combined performance obligation to provide cost effective administration of plan benefits over the contract period.Fees are billed, due and recognized monthly at contracted rates based on current membership or utilization. This recognition pattern aligns with the benefits from services provided to clients. These revenues are reported in fees and other revenues in the Consolidated Statements of Income.

For most ASO arrangements, the Company is required to perform services for a limited period after a client cancels. If these services will not be separately billed to the client as they are performed, the Company estimates and defers a portion of compensation attributable to this service obligation received in advance. Deferred revenue is recorded as a contract liability in accounts payable, accrued expenses and other liabilities and recognized when the related services are performed.

The Company may also provide performance guarantees that provide potential refunds to clients if certain service standards, clinical outcomes or financial metrics are not met. If these standards, outcomes and metrics are not met, the Company may be financially at risk up to a stated percentage of the contracted fee or a stated dollar amount. The Company defers revenue by recording a liability for estimated payouts associated with these guarantees within accounts payable, accrued expenses and other liabilities. The amount of revenue deferred is estimated for each type of guarantee, using either a most likely amount or expected value method depending upon the nature of the guarantee and the information available to estimate refunds. Estimates are refined each reporting period as additional information on the Company’s performance becomes available, and upon final reconciliation and settlement at the end of the guarantee period. Amounts accrued and paid for performance guarantees during the reporting periods were not material.

Service fees are recognized net of estimated pharmaceutical manufacturer rebates payable to ASO clients using our network of retail pharmacies. Net rebates retained by the Company from pharmaceutical manufacturers resulting from ASO client utilization at retail pharmacies represent compensation for pharmacy services and are reflected as fee revenue. Rebates generally represent a per script amount from the manufacturer and are determined based on scripts filled during the reporting period.

Expenses associated with administrative programs and services are recognized in other operating expenses as incurred.

Mail Order Pharmacy Revenues and Costs

Mail order pharmacy revenues are due and recognized as each prescription is shipped. Mail order pharmacy revenues are presented net of estimated pharmaceutical manufacturer rebates payable to ASO clients that use our mail order business. Rebates are generally determined based on actual prescriptions filled during the reporting period.

Mail order pharmacy costs are recognized as each prescription is shipped and include the cost of prescriptions sold and other costs to operate this business (including supplies, shipping and handling), net of estimated pharmaceutical rebates from manufacturers for prescriptions filled through our mail order business.

Contract Balances

The following table provides information about receivables and contract liabilities from service and mail order pharmacy contracts with clients. The allowance for doubtful accounts for receivables and the Company’s contract assets were not material as of the dates presented.

(In millions)	June 30, 2018		December 31, 2017
Receivables, net	$	911	$	885
Contract liabilities	$	56	$	54

Revenue recognized for the three months and six months endedJune 30, 2018 and 2017 that was included in the contract liability balance at the beginning of the reporting period was not material.

The amount of revenue recognized for the three months and six months endedJune 30, 2018 and 2017 from performance obligations satisfied in prior periods was not material.

The incremental costs of obtaining ASO and mail order pharmacy contracts (such as sales commissions) are expensed as incurred and the Company does not disclose information about remaining performance obligations for these contracts in accordance with elections made by the Company as they are generally short-term with original expected durations of one year or less.

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Mergers and Acquisitions

6 Months Ended

Jun. 30, 2018

Acquisitions and Dispositions [Abstract]

Acquisitions and Dispositions

Note 3 – Mergers and Acquisitions

Proposed Acquisition of Express Scripts

On March 8, 2018, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Express Scripts Holding Company (“Express Scripts”), Halfmoon Parent, Inc., a direct wholly owned subsidiary of the Company (“New Cigna”), Halfmoon I, Inc., a direct wholly owned subsidiary of New Cigna (“Cigna Merger Sub”), and Halfmoon II, Inc., a direct wholly owned subsidiary of New Cigna (“Express Scripts Merger Sub”). Subject to the terms and conditions of the Merger Agreement, the Company will acquire Express Scripts in a cash and stock transaction through (1) the merger of Cigna Merger Sub with and into the Company, with the Company surviving as a direct wholly owned subsidiary of New Cigna and (2) the merger of Express Scripts Merger Sub with and into Express Scripts, with Express Scripts surviving as a direct wholly owned subsidiary of New Cigna (collectively, the “Merger”). New Cigna will be renamed “Cigna Corporation” immediately after the Merger.

Upon completion of the Merger, Cigna stockholders will receive one share of New Cigna common stock in exchange for each share of Cigna common stock held immediately prior to the Merger, and Express Scripts stockholders will receive (1) 0.2434 of a share of New Cigna common stock and (2) the right to receive $48.75 in cash, without interest, subject to applicable withholding taxes (the “Merger Consideration”), in exchange for each share of Express Scripts common stock held immediately prior to the Merger. After completion of the Merger, shares of New Cigna common stock are expected to be listed for trading on the New York Stock Exchange.

Cigna and Express Scripts have each scheduled stockholders’ meetings for August 24, 2018 to seek certain approvals from their respective stockholders related to the Merger. In addition to approval of Cigna's and Express Scripts’ stockholders, consummation of the Merger is subject to the satisfaction of other customary closing conditions, including receipt of applicable regulatory approvals. The Merger is not subject to a financing condition. The Company intends to fund the cash portion of the Merger Consideration through a combination of cash on hand, assumed Express Scripts debt and new debt issuance. See Note 5 for additional information about the financing of the Merger. The Merger is expected to be completed by December 31, 2018.

The Merger Agreement provides for certain termination rights and fees for both the Company and Express Scripts. If the Merger Agreement is terminated (1) by Express Scripts because the board of directors of the Company has changed its recommendation prior to obtaining the required approval of the stockholders of the Company, (2) by Express Scripts or the Company if the board of directors of the Company has changed its recommendation and the stockholders of the Company have voted against adopting the Merger Agreement or (3) by the Company in order to enter into an alternative acquisition agreement with respect to a Parent Superior Proposal (as defined in the Merger Agreement) that did not result from a breach of the Company's non-solicitation obligations, then the Company will be required to pay Express Scripts a fee equal to $1.6 billion (the "Parent Termination Fee"). Further, if the Merger Agreement is terminated under certain circumstances and within 12 months after the date of such termination the Company enters into an agreement regarding a sale of a majority of the Company's assets or equity or consummates such a sale, then the Company will be required to pay the Parent Termination Fee prior to or contemporaneously with such entry or consummation. Express Scripts has reciprocal obligations under specified circumstances to pay a $1.6 billion termination fee to the Company.

Additionally, in the event that the Merger Agreement is terminated by either the Company or Express Scripts due to (1) a legal restraint relating to a regulatory law prohibiting consummation of the Merger having become final and non-appealable or (2) the Merger not having been consummated on or prior to December 8, 2018 (subject to an extension to June 8, 2019 if extended by the Company or Express Scripts under certain circumstances); and, in the case of clause (2), at the time of such termination, all of the conditions to the Company's obligation to consummate the Merger have been satisfied other than those that relate to the absence of a legal restraint relating to a regulatory law or the receipt of a regulatory approval, the Company may be required to pay Express Scripts a reverse termination fee of $2.1 billion.

Other transactions

In May 2018, the Company announced an agreement to acquire OnePath Life NZ Limited from ANZ Bank New Zealand Limited, a part of Australia and New Zealand Banking Group Limited, for NZ$700 million (approximately $470 million as of June 30, 2018). The Company expects that the transaction will be completed no later than the first quarter of 2019, subject to final regulatory approval.

Transaction-related costs

In connection with the proposed acquisition of Express Scripts, as well as other transactions including the terminated merger with Anthem, Inc. (“Anthem”), the Company has incurred costs of $130 million pre-tax ($109 million after-tax) for the three months and $190 million pre-tax ($159 million after-tax) for the six months endedJune 30, 2018. Transaction-related costs were $16 million pre-tax ($12 million after-tax) for the three months and $79 million pre-tax ($61 million after-tax) for the six months endedJune 30, 2017. These costs consisted primarily of fees for legal, advisory and other professional services as well as amortization of the Bridge Facility fees in 2018. In the second quarter of 2017, the Company recognized an incremental tax benefit of $59 million for costs that became deductible upon the termination of its merger agreement with Anthem.If the Express Scripts acquisition is consummated, a significant portion of the costs related to that acquisition will not be deductible for federal income tax purposes.

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Earnings Per Share

6 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Earnings Per Share

Note 4–Earnings Per Share

Basic and diluted earnings per share (“EPS”) were computed as follows:

	Three Months Ended
	June 30, 2018						June 30, 2017
(Shares in thousands, dollars in millions, except per share amounts)			Effect of						Effect of
	Basic		Dilution		Diluted		Basic		Dilution		Diluted
Shareholders' net income	$	806			$	806	$	813			$	813
Shares
Weighted average		242,453				242,453		254,087				254,087
Common stock equivalents				2,886		2,886				3,974		3,974
Total shares		242,453		2,886		245,339		254,087		3,974		258,061
EPS	$	3.32	$	(0.03)	$	3.29	$	3.20	$	(0.05)	$	3.15

	Six Months Ended
	June 30, 2018						June 30, 2017
(Shares in thousands, dollars in millions, except per share amounts)			Effect of						Effect of
	Basic		Dilution		Diluted		Basic		Dilution		Diluted
Shareholders' net income	$	1,721			$	1,721	$	1,411			$	1,411
Shares
Weighted average		242,316				242,316		254,879				254,879
Common stock equivalents				3,248		3,248				4,034		4,034
Total shares		242,316		3,248		245,564		254,879		4,034		258,913
EPS	$	7.10	$	(0.09)	$	7.01	$	5.54	$	(0.09)	$	5.45

The following outstanding employee stock options were not included in the computation of diluted earnings per share for the three months and six months endedJune 30, 2018 and 2017 because their effect was anti-dilutive.

	Three Months Ended		Six Months Ended
	June 30,		June 30,
(In millions)	2018	2017	2018	2017
Anti-dilutive options	0.9	1.2	0.9	1.9

The Company held approximately 52.8 million shares of common stock in Treasury as of June 30, 2018, and 43.3 million shares as of June 30, 2017.

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Debt

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Debt

Note 5― Debt

The outstanding amounts of debt and capital leases were as follows:

	June 30,		December 31,
(In millions)	2018		2017
Short-term
Commercial paper	$	100	$	100
Current maturities of long-term debt		-		131
Other, including capital leases		9		9
Total short-term debt	$	109	$	240
Long-term
$250 million, 4.375% Notes due 2020	$	247	$	249
$300 million, 5.125% Notes due 2020		297		299
$78 million, 6.37% Notes due 2021		78		78
$300 million, 4.5% Notes due 2021		296		299
$750 million, 4% Notes due 2022		746		745
$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		894
$600 million, 3.05% Notes due 2027		594		594
$259 million, 7.875% Debentures due 2027		258		258
$45 million, 8.3% Step Down Notes due 2033		45		45
$191 million, 6.15% Notes due 2036		190		190
$121 million, 5.875% Notes due 2041		119		119
$317 million, 5.375% Notes due 2042		315		315
$1,000 million, 3.875% Notes due 2047		988		988
Other, including capital leases		11		9
Total long-term debt	$	5,195	$	5,199

Bridge Facility. In March 2018, in connection with the proposed Merger, the Company and New Cigna entered into a commitment letter (the “Commitment Letter”) with Morgan Stanley Senior Funding, Inc., The Bank of Tokyo-Mitsubishi UFJ, Ltd and 21 additional banks, to provide a $26.7 billion 364-day senior unsecured bridge facility (the “Bridge Facility”). The Bridge Facility commitment will be reduced if the Company, New Cigna or, in some instances, any of their domestic subsidiaries obtains certain other debt financing, completes certain asset sales or certain equity issuances. Concurrently with entry into the Term Loan Credit Agreement described below, the Bridge Facility commitment was reduced to $23.7 billion. The proceeds of the Bridge Facility may be used to finance the Merger, repay certain existing Express Scripts debt and pay related fees and expenses.

The definitive documentation related to the Bridge Facility, if drawn upon at closing of the proposed Merger, will contain customary covenants and restrictions, including a financial covenant that the Company or New Cigna may not permit its leverage ratio – which is the ratio of total consolidated debt to total consolidated capitalization – to be greater than 60%.

The Company accrued approximately $140 million in fees upon entering into the Commitment Letter. The Company paid $111 million during the six months endedJune 30, 2018and expects to pay the remainder of the fees over the balance of 2018. The fees were capitalized in other assets and are being amortized to operating expenses over the period the Bridge Facility is outstanding. The Company recorded amortization of the Bridge Facility fees of $65 million during the three months and $85 million during the six months endedJune 30, 2018.

Revolving Credit Agreement. On April 6, 2018, in connection with the proposed Merger, the Company and New Cigna entered into the Revolving Credit and Letter of Credit Agreement (the “Revolving Credit Agreement”), which matures on April 6, 2023 and is diversified among 23 banks.

Prior to the Merger, the Company can borrow up to $1.5 billion for general corporate purposes, of which up to $500 million is available for the issuance of letters of credit. On and after the Merger, New Cigna can borrow up to $3.25 billion for general corporate purposes, of which up to $500 million is available for the issuance of letters of credit. The Revolving Credit Agreement also includes an option to increase the facility amount by up to $500 million and an option to extend the termination date for additional one year periods, subject to the consent of the banks.

The Revolving Credit Agreement contains customary covenants and restrictions, including a financial covenant that the Company or New Cigna may not permit its leverage ratio to be greater than 50% prior to the Merger or 60% after the Merger.

Term Loan Credit Agreement.On April 6, 2018, the Company and New Cigna entered into a Term Loan Credit Agreement (the “Term Loan Credit Agreement”), which is diversified among 26 banks. The Term Loan Credit Agreement provides for a three-year unsecured term loan facility in aggregate principal amount of $3.0 billion, which will be available to finance the Merger, repay certain existing indebtedness of Express Scripts, and pay fees and expenses in connection with the Merger.

The Term Loan Credit Agreement contains customary covenants and restrictions, including a financial covenant that the Company, or after the Merger, New Cigna may not permit its leverage ratio to be greater than 60%.

Prior to the Merger, the Company is the borrower under the Bridge Facility, the Revolving Credit Agreement and the Term Loan Credit Agreement. On and after the Merger, New Cigna will be the borrower under each of these agreements. In certain circumstances, certain subsidiaries of the Company, or after the Merger, New Cigna will be required to guarantee each other’s obligations under the Bridge Facility, the Term Loan Credit Agreement and the Revolving Credit Agreement.

The Company was in compliance with its debt covenants as of June 30, 2018.

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Global Health Care Medical Costs Payable

6 Months Ended

Jun. 30, 2018

Global Health Benefits Segment [Member]

Liability For Unpaid Claims And Claims Adjustment Expense [Line Items]

Global Health Care Medical Costs Payable

Note6— Global Health Care MedicalCosts Payable

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 payablethat are primarily comprised of accruals for incentives and other amounts payable to health care professionals and facilities. See Note 7 to the Consolidated Financial Statements in the Company’s 2017 Form 10-K for further information about the assumptions and estimates used to establish this liability.

Activity in medical costs payable was as follows:

	Six Months Ended
	June 30,		June 30,
(In millions)	2018		2017
Beginning balance	$	2,719	$	2,532
Less: Reinsurance and other amounts recoverable		265		275
Beginning balance, net		2,454		2,257
Incurred costs related to:
Current year		10,906		10,077
Prior years		(168)		(238)
Total incurred		10,738		9,839
Paid costs related to:
Current year		8,557		7,823
Prior years		1,873		1,684
Total paid		10,430		9,507
Ending balance, net		2,762		2,589
Add: Reinsurance and other amounts recoverable		243		259
Ending balance	$	3,005	$	2,848

Reinsurance and other amounts recoverable in the above table includes 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 8 for additional information on reinsurance.

The total of incurred but not reported liabilities plus expected development on reported claims, including reported claims in process, was $2.9 billion at June 30, 2018 and $2.7 billion at June 30, 2017. The remaining balance in both periods reflects amounts due for physician incentives and other medical care expenses and services payable.

For the periods ended June 30, incurred costs related to prior years were attributable to the following factors:

	Six Months Ended
(Dollars in millions)	June 30, 2018			June 30, 2017
		$	%(1)			$	%(2)
Actual completion factors	$	93	0.5	%	$	108	0.6	%
Medical cost trend		66	0.3			121	0.6
Other		9	-			9	-
Total favorable (unfavorable) variance	$	168	0.8	%	$	238	1.2	%
(1) Percentage of current year incurred costs as reported for the year ended December 31, 2017.
(2) Percentage of current year incurred costs as reported for the year ended December 31, 2016.

Incurred costs related to prior years in the table above, although adjusted through shareholders’ net income, do not directly correspond to an increase or decrease to shareholders’ net income. The primary reason for this difference is that decreases to prior year incurred costs pertaining to the portion of the liability established for moderately adverse conditions are not considered as impacting shareholders’ net income if they are offset by increases in the current year provision for moderately adverse conditions.

Favorable prior year development increased shareholders’ net income by $66 million for the six months endedJune 30, 2018 compared with $97 million for the six months endedJune 30, 2017. This development was attributed to both medical cost trend and completion factors resulting from lower than expected utilization of medical services in both periods.

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Liabilities for Unpaid Claims and Claims Expenses

6 Months Ended

Jun. 30, 2018

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

Note7―Liabilities for Unpaid Claims and Claim Expenses

The following information relates to unpaid claims and claim expense liabilities for short-duration insurance contracts other than those sold by the Global Health Care segment. See Note 8 to the Consolidated Financial Statements in the Company’s 2017 Form 10-K for further information about the assumptions and estimates used to establish this liability.

The liability for unpaid claims and claim expenses by segment as of June 30is as follows:

(In millions)	June 30, 2018		June 30, 2017
Group Disability and Life	$	4,573	$	4,400
Global Supplemental Benefits		480		452
Other Operations		193		187
Unpaid claims and claim expenses	$	5,246	$	5,039

Activity in the Group Disability and Life and the Global Supplemental Benefits segments’ liabilities for unpaid claims and claim expenses is presented in the following table. Liabilities associated with Other Operations are excluded because they pertain to obligations for long-duration insurance contracts or, if short-duration, the liabilities have been fully reinsured.

	Six Months Ended
(In millions)	June 30, 2018		June 30, 2017
Beginning balance	$	4,975	$	4,726
Less: Reinsurance		137		121
Beginning balance, net		4,838		4,605
Incurred claims related to:
Current year		2,382		2,224
Prior years:
Interest accretion		77		83
All other incurred		(66)		(71)
Total incurred		2,393		2,236
Paid claims related to:
Current year		1,204		1,074
Prior years		1,101		1,058
Total paid		2,305		2,132
Foreign currency		(14)		13
Ending balance, net		4,912		4,722
Add: Reinsurance		141		130
Ending balance	$	5,053	$	4,852

Reinsurance in the table above reflects amounts due from reinsurers related to unpaid claims liabilities. The Company's insurance subsidiaries enter into agreements with other companies primarily to limit losses from large exposures and to permit recovery of a portion of incurred losses. See Note 8 for additional information on reinsurance.

The majority of the liability for unpaid claims and claim expenses is related to disability claims with long-tailed payouts. Interest earned on assets backing these liabilities is an integral part of pricing and reserving. Therefore, interest accreted on prior year balances is shown as a separate component of prior year incurred claims. This interest is calculated by applying the average discount rateused in determining the liability balance to the average liability balance over the period. The remaining prior year incurred claims amount primarily reflects updates to the Company’s liability estimates and variances between actual experience during the period relative to the assumptions and expectations reflected in determining the liability. Assumptions reflect the Company’s expectations over the life of the book of business and will vary from actual experience in any period, both favorably and unfavorably, with variation in resolution rates being the most significant driver for the long-term disability business and variations in mortality and morbidity being the most significant factors for other business. Favorable prior year incurred claims reported for the six months endedJune 30, 2018 largely reflect favorable life and voluntary loss ratio experience relative to expectations for claims incurred in 2017. Favorable prior year incurred claims reported for the six months endedJune 30, 2017 largely reflect improvedlong-term disability resolution rate experience relative to expectations.

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Reinsurance

6 Months Ended

Jun. 30, 2018

Reinsurance Disclosures [Abstract]

Reinsurance

Note8― Reinsurance

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 being acquired. Because reinsurance does not relieve the originating insurer of liability, such liabilities must continue to be reported along with the related reinsurance recoverables. The Company regularly evaluates the financial condition of its reinsurers and monitors concentrations of its credit risk.

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 below:

(In millions)
			June 30,		December 31,		Collateral and Other Terms
Line of Business		Reinsurer(s)	2018		2017		at June 30, 2018
Ongoing operations
	Global Health Care, Global Supplemental Benefits, Group Disability and Life, COLI	Various	$	447	$	454	Recoverables from approximately 85 reinsurers, used in the ordinary course of business. Current balances range from less than $1 million up to $70 million. Over 70% of the balance is from companies rated as investment grade by Standard & Poor's, and 12% is secured by assets in trusts or letters of credit.
	Total recoverables related to ongoing operations			447		454
Acquisition, disposition or runoff activities
	Individual Life and Annuity (sold in 1998)	Lincoln National Life and Lincoln Life & Annuity of New York		3,361		3,436	Both companies' ratings are sufficient to avoid triggering a contractual obligation to fully secure the outstanding balance.
	GMDB	Berkshire		889		928	100% secured by assets in a trust.
		Other		33		34	100% secured by assets in a trust or letters of credit.
	Retirement Benefits Business (sold in 2004)	Prudential Retirement Insurance and Annuity		819		850	100% secured by assets in a trust.
	Supplemental Benefits Business (2012 acquisition)	Great American Life		272		283	100% secured by assets in a trust.
	Other run-off reinsurance	Various		56		61	100% secured by assets in trusts.
	Total recoverables related to acquisition, disposition or runoff activities			5,430		5,592
Total reinsurance recoverables			$	5,877	$	6,046

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

In the Company’s Consolidated Statements of Income, premiums were reported net of amounts ceded to reinsurers and Global Health Care medical costs and other benefit expenses were reported net of reinsurance recoveries in the following amounts:

	Three Months Ended				Six Months Ended
(In millions)	June 30, 2018		June 30, 2017		June 30, 2018		June 30, 2017
Ceded premiums
Individual life insurance and annuity business sold	$	34	$	33	$	71	$	72
Other		98		54		196		135
Total ceded premiums	$	132	$	87	$	267	$	207
Reinsurance recoveries
Individual life insurance and annuity business sold	$	56	$	66	$	113	$	136
Other		-		17		47		46
Total reinsurance recoveries	$	56	$	83	$	160	$	182

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 of this business, net of other reinsurance arrangements existing at that time. The Berkshire reinsurance agreement is subject to an overall limit with approximately $3.4 billion remaining as of June 30, 2018.

GMDB is accounted for as reinsurance and GMIB assets and liabilities are reported as derivatives at fair value as discussed below. GMIB assets are reported in other assets, including intangibles, and GMIB liabilities are reported in accounts payable, accrued expenses and other liabilities.

GMDB

The Company estimates the gross liability and reinsurance recoverable with an internal model based on the Company’s experience and future expectations over anextended period, consistent with the long-term nature of this product. As a result of the reinsurance transaction, reserve increases have acorresponding increase in the recorded reinsurance recoverable, provided the increased recoverable remains within the overallBerkshire limit (including the GMIB asset presented below).

The following table presents the account value, net amount at risk and number 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 should be reimbursed in full for these payments.

(Dollars in millions, excludes impact of reinsurance ceded)	June 30, 2018		December 31, 2017
Account value	$	9,667	$	10,109
Net amount at risk	$	2,044	$	2,112
Number of contractholders		230,000		245,000

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 appropriate waiting period. The Company has purchased retrocessional coverage (“GMIB assets”) for these contracts.

The Company reports GMIB liabilities and assets as derivatives at fair value because the 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.

As of June 30, 2018 and December 31, 2017, therewere three reinsurers for GMIB as follows:

(In millions)
		June 30,		December 31,		Collateral and Other Terms
Line of Business	Reinsurer	2018		2017		at June 30, 2018
GMIB	Berkshire	$	320	$	359	100% secured by assets in a trust.
	Sun Life Assurance Company of Canada		191		221
	Liberty Re (Bermuda) Ltd.		173		197	100% secured by assets in a trust.
Total GMIB recoverables reported in other assets		$	684	$	777

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 9.

The only assumption expected to impact the Company’s 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 fair value 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 calculate 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 the 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 June 30, 2018 value of $782million with no future returns.

The Company has reinsurance coverage in place that covers the exposures on these contracts. Using these hypothetical assumptions, the GMIB exposure of $549 millionis lower than the recorded liability for GMIB calculated using fair value assumptions.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Fair value measurements

Note9―Fair Value Measurements

The Company carries certain financial instruments at fair value in the financial statements including fixed maturities, certain equity securities, short-term investments and derivatives. Other financial instruments are measured at fair value only under certain conditions, 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 the liability with the creditor.

The Company’s financial assets and liabilities carried at fair value have been classified based upon a hierarchy defined by GAAP. The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). An asset’s or a liability’s classification is based on the lowest level of input that is significant to its measurement. For example, a financial asset or liability carried at fair value would be classified in Level 3 if unobservable inputs were significant to the instrument’s fair value, even though the measurement may be derived using inputs that are both observable (Levels 1 and 2) and unobservable (Level 3).

The Company estimates fair values using prices from third parties or internal pricing methods. Fair value estimates received from third-party pricing services are based on reported trade activity and quoted market prices when available, and other market information that a market participant may use to estimate fair value. The internal pricing methods are performed by the Company’s investment professionals and generally involve using discounted cash flow analyses, incorporating current market inputs for similar financial instruments with comparable terms and credit quality, as well as other qualitative factors. In instances where there is little or no market activity for the same or similar instruments, fair value is estimated using methods, models and assumptions that the Company believes a hypothetical market participant would use to determine a current transaction price. These valuation techniques involve some level of estimation and judgment that becomes significant with increasingly complex instruments or pricing models.

The Company is responsible for determining fair value, 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 appropriate estimates of fair value. The controls executed by the Company include evaluating changes in prices and monitoring for potentially stale valuations. The Company also performs sample testing of sales values to confirm the accuracy of prior fair value estimates. The minimal exceptions identified during these processes indicate that adjustments to prices are infrequent and do not significantly impact valuations. Annually, we conduct an on-site visit of the most significant pricing service to review their processes, methodologies and controls. This on-site review includes a walk-through of inputs for a sample of securities held across various asset types to validate the documented pricing process.

Financial Assets and Financial Liabilities Carried at Fair Value

The following table provides information as of June 30, 2018 and December 31, 2017 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 generally accrue directly to policyholders.

(In millions)	Quoted Prices in Active Markets for Identical Assets(Level 1)				Significant Other Observable Inputs(Level 2)				Significant Unobservable Inputs(Level 3)				Total
	As of June 30, 2018		As of December 31, 2017		As of June 30, 2018		As of December 31, 2017		As of June 30, 2018		As of December 31, 2017		As of June 30, 2018		As of December 31, 2017
Financial assets at fair value
Fixed maturities
Federal government and agency	$	271	$	253	$	509	$	526	$	-	$	-	$	780	$	779
State and local government		-		-		1,045		1,287		-		-		1,045		1,287
Foreign government		-		-		2,411		2,442		44		45		2,455		2,487
Corporate		-		-		18,478		17,658		307		430		18,785		18,088
Mortgage and other asset-backed		-		-		384		343		144		154		528		497
Total fixed maturities		271		253		22,827		22,256		495		629		23,593		23,138
Equity securities (1)		391		412		68		73		33		103		492		588
Subtotal		662		665		22,895		22,329		528		732		24,085		23,726
Short-term investments		-		-		220		199		-		-		220		199
GMIB assets		-		-		-		-		684		777		684		777
Other derivative assets		-		-		32		2		-		-		32		2
Total financial assets at fair value, excluding separate accounts and real estate funds	$	662	$	665	$	23,147	$	22,530	$	1,212	$	1,509	$	25,021	$	24,704
Real estate funds priced at NAV as a practical expedient (2)														263		N/A
Financial liabilities at fair value
GMIB liabilities	$	-	$	-	$	-	$	-	$	653	$	762	$	653	$	762
Other derivative liabilities		-		-		54		25		-		-		54		25
Total financial liabilities at fair value, excluding separate accounts	$	-	$	-	$	54	$	25	$	653	$	762	$	707	$	787
(1) Beginning in 2018, certain private equity securities are no longer carried at fair value under the policy election of ASU 2016-01 (Recognition and Measurement of Financial Assets and Financial Liabilities). As of December 31, 2017, private equity securities of $70 million were included in the Level 3 amount. See Note 10 for additional information on this accounting policy change.
(2) Beginning in 2018 upon adopting ASU 2016-01, certain real estate funds are carried at fair value (previously carried at cost) based on the Company's ownership share of the equity of the investee (Net Asset Value ("NAV") as a practical expedient) including changes in the fair value of its underlying investments. The funds have a quarterly redemption frequency, 45-90 day redemption notice period and $65 million in unfunded commitments as of June 30, 2018. See Note 10 for additional information on this accounting policy change. Prior periods are designated as not applicable ("N/A") in this table.

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 returns, 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 in active markets, quoted prices from those willing to trade in markets that are not active, or other inputs that are market observable or can be corroborated by market data for the term of the instrument.  Such other inputs include market interest rates and volatilities, spreads and yield curves. An instrument is classified in Level 2 if the Company determines that unobservable inputs are insignificant.

Fixed maturities and equity securities.Approximately95% of the Company’s investments in fixed maturities and equity securities are classified in Level 2 including most public and private corporate debt and hybrid equity securities, federal agency and municipal bonds, non-government mortgage-backed securities and preferred stocks.  Because many fixed maturities do not trade daily, third-party pricing services and internal valuation 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.  These models calculate fair values by discounting future cash flows at estimated market interest rates.  Such market rates are derived by calculating the appropriate spreads over comparable U.S. Treasury securities, based on the credit quality, industry and structure of the asset. Typical inputs and assumptions to pricing models include, but are not limited to, a combination of benchmark yields, reported trades, issuer spreads, liquidity, benchmark securities, bids, offers, reference data, and industry and economic events.  For mortgage-backed securities, inputs and assumptions may also include characteristics of the issuer, collateral attributes, prepayment speeds and credit rating.

Nearly all of these instruments are valued using recent trades or pricing models. Less than 1% of the fair value of investments classified in Level 2 represents foreign bonds that are valued using a single unadjusted market-observable input derived by averaging multiple broker-dealer quotes, consistent with local market practice.

Short-term investments are carried at fair value 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 Company is considered when estimating the fair values of these derivatives.  However, the Company is largely protected by collateral arrangements with counterparties and determined that no adjustment for credit risk was required as of June 30, 2018 or December 31, 2017. The nature and use of these other derivatives are described in Note 11.

Level 3 Financial Assets and Financial Liabilities

Certain inputs for instruments classified in Level 3 are unobservable (supported by little or no market activity) and significant to their resulting fair value measurement.  Unobservable inputs reflect the Company’s best estimate of what hypothetical market participants would use to determine a transaction price for the asset or liability at the reporting date.

The Company classifies certain newly issued, privately-placed, complex or illiquid securities, as well as assets and liabilities relating to GMIB, in Level 3. Approximately 2% 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 include 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 June 30, 2018 and December 31, 2017. The range and weighted average basis point amounts (“bps”) for liquidity and credit spreads (adjustment to discount rates) and price-to-earnings multiples for equity investments reflect the Company’s best estimates of the unobservable adjustments a market participant would make to calculate these 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 there 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 spreads is needed to value a more complex bond structure with multiple underlying collateral and no standard market valuation technique. The weighting of credit spreads is primarily based on the underlying collateral’s characteristics and their proportional cash flows supporting the bond obligations.

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 earnings 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 relative 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.

	Fair Value as of				Unobservable Input	Unobservable AdjustmentRange (Weighted Average) as of
(Fair value in millions )	June 30, 2018		December 31, 2017			June 30, 2018	December 31, 2017
Fixed maturities
Mortgage and other asset-backed	$	144	$	154	Liquidity	60 - 350 (80) bps	60 - 370 (90) bps
securities					Weighting of credit spreads	190 - 300 (240) bps	180 - 290 (230) bps
Corporate and government fixed maturities		333		446	Liquidity	80 - 930 (240) bps	70 - 1,650 (300) bps
Total fixed maturities		477		600
Equity securities
Private equity securities (1)		N/A		70	Price-to-EBITDA multiples	N/A	5.0 - 12.0 (8.9)
Hybrid equity securities		33		33	Liquidity	230 bps (3)	270 bps (3)
Total equity securities		33		103
Subtotal		510		703
Securities not priced by the Company (2)		18		29
Total Level 3 securities	$	528	$	732
(1) Beginning in 2018, private equity securities are no longer carried at fair value under the policy election of ASU 2016-01 (Recognition and Measurement of Financial Assets and Financial Liabilities). Current periods are designated as N/A in this table.
(2) The fair values for these securities use single, unadjusted non-binding broker quotes not developed directly by the Company.
(3) The range and weighted average is equivalent for this security type.

Significant increases in liquidity or credit spreads would result in lower fair value measurements while decreases in these inputs would result inhigher fair value measurements.Significant decreases in equity price-to-EBITDA multiples would result in lower fair value measurements while increases in these inputs would result in higher fair value measurements.Generally, the unobservable inputs are not interrelated and a change in the assumption used for one unobservable input is not accompanied by a change in the other unobservable input.

GMIB contracts.See discussion in Note 8.

Changes in Level 3 Financial Assets and Financial Liabilities Carried at Fair Value

The following table summarizes the changes in financial assets and financial liabilities classified in Level 3 for the three months and six months endedJune 30, 2018 and 2017.  Separate account asset changes are reported separately in the Separate Accounts section as the changes in fair values of these assets generally accrue directly to the policyholders. Gains and losses reported in these tables may include net changes in fair value that are attributable to both observable and unobservable inputs.

(In millions)	Fixed Maturities & Equity Securities				GMIB Assets				GMIB Liabilities
	2018		2017		2018		2017		2018		2017
Balance at April 1,	$	596	$	727	$	717	$	777	$	(682)	$	(761)
Gains (losses) included in shareholders' net income
GMIB fair value gain/(loss)		-		-		(27)		15		27		(15)
Other		(1)		1		1		-		(5)		(3)
Total gains (losses) included in shareholders' net income		(1)		1		(26)		15		22		(18)
Gains (losses) included in other comprehensive income		(5)		5		-		-		-		-
Gains (losses) required to adjust future policy benefits for settlement annuities (1)		(2)		9		-		-		-		-
Purchases, sales, settlements
Purchases		6		65		-		-		-		-
Sales		-		(23)		-		-		-		-
Settlements		(13)		(12)		(7)		(15)		7		15
Total purchases, sales and settlements		(7)		30		(7)		(15)		7		15
Transfers into/(out of) Level 3
Transfers into Level 3		-		36		-		-		-		-
Transfers out of Level 3		(53)		(57)		-		-		-		-
Total transfers into/(out of) Level 3		(53)		(21)		-		-		-		-
Balance at June 30,	$	528	$	751	$	684	$	777	$	(653)	$	(764)
Total gains (losses) included in shareholders' net income attributable to instruments held at the reporting date	$	(1)	$	-	$	(26)	$	15	$	22	$	(18)

(In millions)	Fixed Maturities & Equity Securities				GMIB Assets				GMIB Liabilities
	2018		2017		2018		2017		2018		2017
Balance at January 1,	$	732	$	776	$	777	$	799	$	(762)	$	(780)
Gains (losses) included in shareholders' net income
GMIB fair value gain (loss)		-		-		(67)		4		69		(4)
Other		(21)		24		(2)		1		11		(7)
Total gains (losses) included in shareholders' net income		(21)		24		(69)		5		80		(11)
Losses included in other comprehensive income		(10)		(3)		-		-		-		-
Gains (losses) required to adjust future policy benefits for settlement annuities (1)		(6)		9		-		-		-		-
Purchases, sales, settlements
Purchases		16		90		-		-		-		-
Sales		(11)		(70)		-		-		-		-
Settlements		(15)		(39)		(24)		(27)		29		27
Total purchases, sales and settlements		(10)		(19)		(24)		(27)		29		27
Transfers into/(out of) Level 3
Transfers into Level 3		20		76		-		-		-		-
Transfers out of Level 3 (2)		(177)		(112)		-		-		-		-
Total transfers into/(out of) Level 3		(157)		(36)		-		-		-		-
Balance at June 30,	$	528	$	751	$	684	$	777	$	(653)	$	(764)
Total gains (losses) included in shareholders' net income attributable to instruments held at the reporting date	$	(8)	$	(6)	$	(69)	$	5	$	80	$	(11)
(1) Amounts do not accrue to shareholders.
(2) Beginning in 2018, certain private equity securities are no longer carried at fair value under the policy election of ASU 2016-01 (Recognition and Measurement of Financial Assets and Financial Liabilities). $70 million in private equity securities as of December 31, 2017 are included in the June 30, 2018 Transfers out of Level 3 amount.

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; and
• Other operating expenses for amounts related 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 (depreciation) 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 occurs. 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 2018 and 2017,transfers between Level 2and Level 3 primarily reflected changes in liquidity and credit risk estimates for certain private placement issuers across several sectors including metals, mining, energy, electric, capital goods and consumer. As noted above, transfers out of Level 3 during 2018 also include $70 million of private equity securities that are no longer carried at fair value.

Separate Accounts

Fair values and changes in the fair values of separate account assets generally accrue directly to the policyholders and are excluded from the Company’s revenues and expenses.See Note 10 to the Consolidated Financial Statements contained in the Company’s 2017Form 10-K for additional policy information related to separate accounts.

As of June 30, 2018 and December 31, 2017, separate account assets 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
	June		December		June		December		June		December		June		December
	30,		31,		30,		31,		30,		31,		30,		31,
	2018		2017		2018		2017		2018		2017		2018		2017
Guaranteed separate accounts (see Note 16)	$	208	$	215	$	299	$	308	$	-	$	-	$	507	$	523
Non-guaranteed separate accounts (1)		1,392		1,536		5,356		5,298		256		292		7,004		7,126
Subtotal	$	1,600	$	1,751	$	5,655	$	5,606	$	256	$	292		7,511		7,649
Non-guaranteed separate accounts priced at NAV as a practical expedient (1)														776		774
Total separate account assets													$	8,287	$	8,423
(1) Non-guaranteed separate accounts included $3.9 billion as of June 30, 2018 and December 31, 2017 in assets supporting the Company's pension plans, including $0.2 billion classified in Level 3 as of June 30, 2018 and $0.3 billion classified in Level 3 as of December 31, 2017.

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. The following tables summarize the changes in separate account assets reported in Level 3 for the periods ending June 30.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In millions)	2018		2017		2018		2017
Balance, beginning of period	$	262	$	330	$	292	$	331
Policyholder (losses) gains		(2)		10		43		37
Purchases, sales and settlements
Purchases		4		7		12		17
Sales		-		(17)		(72)		(52)
Settlements		(8)		-		(12)		(1)
Total purchases, sales and settlements		(4)		(10)		(72)		(36)
Transfers into (out of) Level 3
Transfers into Level 3		-		1		-		1
Transfers out of Level 3		-		(15)		(7)		(17)
Total transfers into (out of) Level 3		-		(14)		(7)		(16)
Balance, end of period	$	256	$	316	$	256	$	316

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 table below provides additional information on these investments.

	Fair Value as of				Unfunded Commitments as of June 30, 2018		Data as of June 30, 2018 and December 31, 2017
(In millions)	June 30, 2018		December 31, 2017				Redemption Frequency (if currently eligible)	Redemption Notice Period
Securities Partnerships	$	485	$	458	$	302	Not applicable	Not applicable
Real Estate Funds		247		239		-	Quarterly	45-90 days
Hedge Funds		44		77		-	Up to Annually, varying by fund	30-90 days
Total	$	776	$	774	$	302

Assets and Liabilities Measured at Fair Value under Certain Conditions

Some financial assets and liabilitiesare not carried at fair value each reporting period, but may be measured using fair value only under certain conditions, such as investments when they become impaired includingreal estate, partnership entities, commercial mortgage loans, and certain equity securities with no readily determinable fair value. There were no such impaired investments written down to fair value for the three and six months endedJune 30, 2018. Impaired values for these asset types representing less than 1% of total investments, were written down to their fair values, resulting in immaterial realized losses for the three months and six months endedJune 30, 2017.

Fair Value Disclosures for Financial Instruments Not Carried at Fair Value

The following table includesthe Company’s financialinstruments not recorded at fair value that are subject to fair value disclosure requirements atJune 30, 2018 and December 31, 2017.In addition to universal life products and capital leases, financial instruments that are carried in the Company’s Consolidated Financial Statements at amounts that approximate fair value are excluded from the following table.

			June 30, 2018				December 31, 2017
(In millions)	Classification in the Fair Value Hierarchy		Fair Value		Carrying Value		Fair Value		Carrying Value
Commercial mortgage loans	Level 3	$	1,839	$	1,866	$	1,766	$	1,761
Long-term debt, including current maturities, excluding capital leases	Level 2	$	5,201	$	5,184	$	5,730	$	5,321

Fair values of off-balance sheet financial instruments were not material as of June 30, 2018 and December 31, 2017.

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Investments

6 Months Ended

Jun. 30, 2018

Investments:

Investments

Note 10 — Investments

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 investment balances, net investment income and realized investment gains and losses. See Note 9 for information about the valuation of the Company’s investment portfolio. See Note 11 to the Consolidated Financial Statements contained in the Company’s 2017Form 10-K for accounting policies for each investment type. Updates to these policies resulting from the adoption of new accounting guidance in 2018 are provided below.

• Investment Portfolio

Fixed Maturities

The amortized cost and fair value by contractual maturity periods for fixed maturities were as follows at June 30, 2018:

		Amortized		Fair
(In millions)		Cost		Value
Due in one year or less	$	1,561	$	1,569
Due after one year through five years		6,678		6,760
Due after five years through ten years		10,430		10,242
Due after ten years		3,935		4,494
Mortgage and other asset-backed securities		519		528
Total fixed maturities	$	23,123	$	23,593

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.

				Gross		Gross
				Unrealized		Unrealized
		Amortized		Appre-		Depre-		Fair
(In millions)		Cost		ciation		ciation		Value
As of June 30, 2018
Federal government and agency	$	575	$	209	$	(4)	$	780
State and local government		978		69		(2)		1,045
Foreign government		2,354		120		(19)		2,455
Corporate		18,697		473		(385)		18,785
Mortgage and other asset-backed		519		19		(10)		528
Total fixed maturities	$	23,123	$	890	$	(420)	$	23,593
Investments supporting liabilities of the Company's run-off settlement annuity business (included in above total) (1)	$	2,282	$	525	$	(25)	$	2,782
As of 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 fixed maturities	$	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
(1) Net unrealized appreciation for these investments is excluded from accumulated other comprehensive income.

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 expected recovery.

Based on this review, management believes the unrealized depreciation below to be temporary, and therefore has not impaired these amounts. The table below summarizes fixed maturities in an unrealized loss position at June 30, 2018 by the length of time these securities have been in an unrealized loss position. These fixed maturities were primarily corporate securities with a decline in fair value that reflects an increase in market yields since purchase.

	June 30, 2018							December 31, 2017
	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	$	9,283	$	9,566	$	(283)	1,944	$	3,272	$	3,309	$	(37)	797
Below investment grade	$	1,285	$	1,318	$	(33)	1,157	$	543	$	553	$	(10)	643
More than one year
Investment grade	$	1,759	$	1,852	$	(93)	470	$	1,503	$	1,549	$	(46)	373
Below investment grade	$	147	$	158	$	(11)	55	$	155	$	162	$	(7)	42

Equity Securities

Accounting policy. Upon adopting ASU 2016-01 beginning in 2018, changes in the fair values of equity securities that have a readily determinable fair value (primarily exchange-traded funds) are reported in other realized investment gains (losses). As of June 30, 2018, the fair values of these securities were $443 million andcost was $453 million. Also beginning in 2018, private equity securities of $68 million as of June 30, 2018, that do not have a readily determinable fair value are carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes. The amount of impairments or value changes resulting from observable price changes was not material.

Equity securities also include hybrid investments consisting of preferred stock with call features that are carried at fair value with changes in fair value reported in other realized investment gains (losses) and dividends reported in net investment income. As of June 30, 2018 and December 31, 2017, fair values of these securities were $49 million. Cost was $64 million as of June 30, 2018, compared with $61 million as of 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.

Credit quality. The Company regularly evaluates and monitors credit risk, beginning with the initial underwriting of a mortgage loan and continuing throughout the investment holding period. Mortgage origination professionals employ an internal credit quality rating system designed to evaluate the relative risk of the transaction at origination that is then updated each year as part of the annual portfolio loan review. The Company evaluates and monitors credit quality on an ongoing basis, classifying each loan as a loan in good standing, potential problem loan or problem loan.

Quality ratings are based on our evaluation of a number of key inputs related to the loan including real estate market-related factors such as rental rates and vacancies, and property-specific inputs such as growth rate assumptions and lease rollover statistics. However, the two most significant contributors to the credit quality rating are the debt service coverage and loan-to-value ratios. The debt service coverage ratio measures the amount of property cash flow available to meet annual interest and principal payments on the debt, with a ratio below 1.0 indicating that there is not enough cash flow to cover the required loan payments. The loan-to-value ratio, commonly expressed as a percentage, compares the amount of the loan to the fair value of the underlying property collateralizing the loan.

The following table summarizes the credit risk profile of the Company’s commercial mortgage loan portfolio based on loan-to-value and debt service coverage ratios, as of June 30, 2018 and December 31, 2017:

(Dollars in millions)	As of June 30, 2018				As of December 31, 2017
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%	$	1,195	2.02		$	1,109	2.03
60% to 79%		595	1.95			652	2.24
80% to 100%		76	1.49			-	-
Total	$	1,866	1.97	57%	$	1,761	2.11	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 2018 and included an analysis of each underlying property’s December 31, 2017 annual financial statements, rent rolls, operating plans and budgets for 2018, a physical inspection of the property and other pertinent factors.Based on historical results, current leases, lease expirations and rental conditions in each market, the Company estimates the current year and future stabilized property income and fair value for each loan. Based on property values and cash flows estimated as part of this review, the average loan to value ratioat June 30, 2018 is unchanged from last year and remains very strong. The portfolio’s average debt service coverage ratio decreased slightly at June 30, 2018 compared with December 31, 2017 due to loans transitioning from interest only to amortizing payments.

The Company will reevaluate a loan’s credit quality between annual reviews if new property information is received or an event such as delinquency or a borrower’s request for restructure causes management to believe that the Company’s estimate of financial performance, fair value or the risk profile of the underlying property has been impacted.

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 problem 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 fair value of the underlying real estate. Certain commercial mortgage loans without valuation reserves are considered 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.The Company recognizes interest income on impaired mortgage loans only when payment is actually received.

As of June 30, 2018 and December 31, 2017, there were no impaired commercial mortgage loans. The average recorded investment in impaired loans and interest income on impaired loans were not material.

Other Long-Term Investments

Accounting policy. Other long-term investments include investments in unconsolidated entities. These entities include certain limited partnerships and limited liability companies holding real estate, securities or loans. These investments are carried at cost plus the Company’s ownership percentage of reported income or loss in cases where the Company has significant influence. Upon adopting ASU 2016-01 beginning in 2018, the investments are carried at fair value using NAV as a practical expedient in cases when the Company does not have significant influence.

Short-Term Investments and Cash Equivalents

Short-term investments and cash equivalents included the following types of issuers:

		June 30,		December 31,
(In millions)		2018		2017
Corporate securities	$	1,663	$	1,143
Federal government securities	$	621	$	604
Foreign government securities	$	161	$	159
Money market funds	$	10	$	12

Realized Investment Gains and Losses

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 equity securities and changes in valuation reserves on commercial mortgage loans. The following realized gains and (losses) on investments exclude amounts required to adjust future policy benefits for the run-off settlement annuity business.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In millions)	2018		2017		2018		2017
Fixed maturities	$	(26)	$	14	$	(46)	$	16
Equity securities		(7)		1		(26)		34
Commercial mortgage loans		-		(1)		-		(1)
Other investments, including derivatives		30		37		36		48
Realized investment (losses) gains before income taxes		(3)		51		(36)		97
Less income tax (benefit) expense		(1)		17		(11)		32
Net realized investment (losses) gains	$	(2)	$	34	$	(25)	$	65

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 $23 million for the six months endedJune 30, 2018 and $13 million for the six months endedJune 30, 2017. Realized losses on equity securities still held at June 30, 2018 were $7 million for the three months and $26 million for the six months endedJune 30, 2018.

The following table presents sales information for available-for-sale securities (fixed maturities in 2018, and fixed maturities and equity securities in 2017). Gross gains on sales and gross losses on sales exclude amounts required to adjust future policy benefits for the run-off settlement annuity business.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In millions)	2018		2017		2018		2017
Proceeds from sales	$	774	$	516	$	1,273	$	930
Gross gains on sales	$	13	$	12	$	18	$	59
Gross losses on sales	$	(7)	$	(2)	$	(29)	$	(4)

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Derivative Financial Instruments

6 Months Ended

Jun. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Note 11 — 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). The Company also uses derivative financial instruments to hedge the risk of changes in the net assets of certain of its foreign subsidiaries due to changes in foreign currency exchange rates, and to hedge the interest rate risk of its long-term debt. The Company has written and purchased GMIB reinsurance contracts in its run-off reinsurance business that are accounted for as freestanding derivatives and discussed further in Note 8. 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 policy. During the first quarter of 2018, the Company early adopted ASU 2017-12 (Targeted Improvements to Accounting for Hedging Activities) with no material impact to its financial statements. The Company applies hedge accounting when derivatives are designated, qualified and highly effective as hedges. Effectiveness is formally assessed and documented at inception and each period throughout the life of a hedge using various qualitative or quantitativemethods appropriate for each hedge. Under hedge accounting, the changes in fair value of thederivative 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 the hedged item. This is referred to as “hedge ineffectiveness” and, with the adoption of ASU 2017-12, is no longer measured and reported separately from the effective portion of the hedge.The Company excludes certain components of derivative instruments’ changes in fair value from the assessment of hedge effectiveness. With the adoption of ASU 2017-12, those excluded components are initially recorded in other comprehensive income and recognized in shareholders’ net income over the life of the derivative instrument as further discussed below. See Note 9 for further information on our policies for determining fair value. Derivative cash flows are generally reported in operating activities.

During the first quarter of 2018, the Company terminated its Fair Value Hedge of Long-Term Corporate Debt (notional value of $750 million as of December 31, 2017) with no material impact to the Company’s financial statements. The following tables provide information on the Company’s other specific applications of derivative financial instruments during the periods ended June 30, 2018 and December 31, 2017.

Economic Hedges of Benchmark Interest Rates on Expected Debt Issuances	Notional Value (in millions)
Type of instrument. Swaptions	June 30, 2018		December 31, 2017
	$	3,550	$	-
Purpose. To hedge the benchmark interest rates on forecasted coupon cash flows on debt issuances to be used primarily to finance a portion of the proposed acquisition of Express Scripts expected later in 2018.
Terms of derivative instruments. There is no upfront premium paid or received, and the instruments contain upper and lower threshold strike rates based on the benchmark interest rate. These instruments provide offsetting economic benefits when the Company receives cash at settlement as rates rise above the upper threshold, and offsetting economic losses when the Company must pay cash at settlement as rates decline below the lower threshold.
Accounting. Hedge accounting has not been designated for these instruments. The fair values of the swaption contracts are reported in other assets, including other intangibles, or accounts payable, accrued expenses, and other liabilities. Changes in fair value and settlements are reported in interest expense.

Cash Flow Hedges of Benchmark Interest Rates on Expected Debt Issuances	Notional Value (in millions)
Type of instrument. Swaptions	June 30, 2018		December 31, 2017
	$	2,050	$	-
Purpose. To hedge the benchmark interest rates on forecasted coupon cash flows on debt issuances expected later in 2018.
Terms of derivative instruments. There is no upfront premium paid or received, and the instruments contain upper and lower threshold strike rates based on the benchmark interest rate. These instruments provide offsetting economic benefits when the Company receives cash at settlement as rates rise above the upper threshold, and offsetting economic losses when the Company must pay cash at settlement as rates decline below the lower threshold. The notional value of these derivatives matches the par value of the hedged debt issuance.
Accounting. Using cash flow hedge accounting, the fair values of these instruments are reported in other assets, including other intangibles, or accounts payable, accrued expenses, and other liabilities. Changes in fair value are reported in accumulated other comprehensive income ("AOCI"). Upon issuance of the debt, any cumulative gain or loss on these contracts will begin amortizing to interest expense over the life of the hedged debt.

Fair Value Hedges of Fixed Maturity Bonds	Notional Value (in millions)
Type of instrument. Foreign currency swap contracts	June 30, 2018		December 31, 2017
	$	478	$	318
Purpose. To hedge the foreign exchange related changes in fair values of certain fixed maturity foreign-denominated bonds.
Terms of derivative instruments. The Company periodically exchanges cash flows between two currencies for both principal and interest. Foreign currency swaps are Euros, British pounds and Australian dollars, and have terms for periods of up to thirty years. The notional value of these derivatives matches the amortized cost of the hedged bonds.
Accounting. Using fair value hedge accounting, swap fair values are reported in other long-term investments or in accounts payable, accrued expenses and other liabilities. Changes in fair values attributable to foreign exchange risk of the swap contracts and the hedged bonds are reported in other realized investment gains and losses. The portion of the swap contracts' changes in fair value excluded from the assessment of hedge effectiveness is recorded in accumulated other comprehensive income and recognized in net investment income as swap coupon payments are accrued, offsetting the foreign denominated coupons received on the designated bonds. Prior to adopting ASU 2017-12, changes in fair value of excluded components of the swap contracts were recognized immediately in realized investment gains and losses.

Net Investment Hedge of Certain International Subsidiaries	Notional Value (in millions)
Type of instrument. Foreign currency swap contracts	June 30, 2018		December 31, 2017
	$	439	$	-
Purpose. During the first quarter of 2018, the Company entered into fixed-for-fixed currency swaps to reduce the risk of changes in net assets due to changes in foreign currency spot exchange rates for certain foreign subsidiaries that conduct their business principally in Euros.
Terms of derivative instruments. The Company receives fixed rate U.S. dollar coupon and principal payments, and pays fixed rate coupon and principal payments denominated in the functional currency of the hedged foreign subsidiary. The notional value of hedging instruments matches the hedged amount of subsidiary net assets. Foreign currency swaps are denominated in Euros.
Accounting. As a net investment hedge, the fair values of the swap contracts are reported in other assets, including other intangibles, or in accounts payable, accrued expenses, and other liabilities. The changes in fair values of these instruments are reported in other comprehensive income, specifically in translation of foreign currencies. The portion of the change in swap fair values relating to foreign exchange spot rates will be recognized in earnings upon deconsolidation of the hedged foreign subsidiaries. The remaining changes in swap fair value are excluded from the effectiveness assessment and recognized in other operating expenses as swap coupon payments are accrued.

Economic Hedges of a Fixed Maturity Bond Portfolio	Notional Value (in millions)
Type of instrument. Foreign currency forward contracts	June 30, 2018		December 31, 2017
	$	309	$	255
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 the Company's foreign subsidiary in South Korea.
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. The notional value of hedging instruments generally aligns with the fair value of the hedged bond portfolio.
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.

Gross fair values of our derivative financial instruments are presented in Note 9. As of June 30, 2018 and December 31, 2017, and for the three months and six months endedJune 30, 2018 and 2017, the effects of these derivative instruments on the Consolidated Financial Statements were not material, including amounts excluded from the assessment of hedge effectiveness, as well as associated gains or losses reclassified from accumulated other comprehensive income into shareholders’ net income.

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. Certain of the Company’s over-the-counter derivative instruments contain provisions requiring either the Company 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 asset or liability positions of these derivatives were not material as of June 30, 2018 or December 31, 2017.

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Variable Interest Entities

6 Months Ended

Jun. 30, 2018

Variable Interest Entities [Abstract]

Variable interest entities

Note 12 – Variable Interest Entities

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.

The Company determined it was not a primary beneficiary in any material variable interest entitiesas of June 30, 2018 or December 31, 2017. 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 securitieslimited partnerships and real estate limited partnerships defined as variable interest entities that 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 these partnerships’ operations and the limited partners do not have substantive kick-out or participating rights. The Company’s maximum exposure to these entities of $2.7 billion across approximately 125 limited partnerships as of June 30, 2018 includes $1.4 billion reported in other long-term investments and commitments to contribute an additional $1.3 billion. 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 makes passive investments in certain asset-backed and corporate securities that are issued by variable interest entities whose sponsors or issuers are unaffiliated with the Company. The Company receives fixed-rate cash flows from these investments and the maximum potential exposure to loss is limited to its carrying amount of $0.6billion as of June 30, 2018, that is reported in fixed maturities. The Company’s combined ownership interests are insignificant relative to the total principal amounts issued by these entities.

The Company is also involved in real estate joint ventures, independent physician associations (“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.

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Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2018

Accumulated Other Comprehensive Income (Loss) [Abstract]

Accumulated Other Comprehensive Income (Loss)

Note 13—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.Generally, tax effects in AOCI are established at the currently enacted tax rate and reclassified to net income in the same period that the related pre-tax AOCI reclassifications are recognized. As discussed in Note 2, the Company early adopted ASU 2018-02 effective January 1, 2018 and $229 million of stranded tax effects resulting from U.S. tax reform legislation enacted in 2017 were reclassified from AOCI to retained earnings. Changes in the components of AOCI, including the reclassification of the stranded tax effects, were as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In millions)	2018		2017		2018		2017
Securities
Beginning balance	$	110	$	369	$	328	$	362
Reclassification adjustment to retained earnings related to U.S. tax reform legislation (1)		-		-		65		-
Reclassification adjustment to retained earnings related to new financial instruments guidance (1)		-		-		(4)		-
Adjusted beginning balance		110		369		389		362
(Depreciation) appreciation on securities		(176)		115		(555)		168
Tax benefit (expense)		37		(38)		113		(62)
Net (depreciation) appreciation on securities		(139)		77		(442)		106
Reclassification adjustment for losses (gains) included in shareholders' net income (net realized investment gains)		(2)		(15)		28		(50)
Tax (expense) benefit		-		5		(6)		18
Net losses (gains) reclassified from AOCI to net income		(2)		(10)		22		(32)
Other comprehensive (loss) income, net of tax		(141)		67		(420)		74
Ending balance	$	(31)	$	436	$	(31)	$	436
Derivatives
Beginning balance	$	(11)	$	-	$	-	$	3
Reclassification adjustment from retained earnings related to new hedging guidance (1)		-		-		(6)		-
Adjusted beginning balance		(11)		-		(6)		3
(Depreciation) on derivatives		(10)		-		(16)		-
Tax benefit		2		-		3		-
Net (depreciation) on derivatives		(8)		-		(13)		-
Reclassification adjustment for (gains) included in shareholders' net income (net realized investment gains)		-		-		-		(4)
Tax benefit		-		-		-		1
Net (gains) reclassified from AOCI to net income		-		-		-		(3)
Other comprehensive (loss), net of tax		(8)		-		(13)		(3)
Ending balance	$	(19)	$	-	$	(19)	$	-
Translation of foreign currencies
Beginning balance	$	(24)	$	(257)	$	(65)	$	(369)
Reclassification adjustment to retained earnings related to U.S. tax reform legislation (1)		-		-		(4)		-
Adjusted beginning balance		(24)		(257)		(69)		(369)
Translation of foreign currencies		(151)		30		(105)		141
Tax (expense) benefit		(1)		(3)		(2)		(2)
Net translation of foreign currencies		(152)		27		(107)		139
Ending balance	$	(176)	$	(230)	$	(176)	$	(230)
(1) See Note 2 for further information about adjustments resulting from the Company's adoption of new accounting standards in 2018.
	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In millions)	2018		2017		2018		2017
Postretirement benefits liability
Beginning balance	$	(1,622)	$	(1,364)	$	(1,345)	$	(1,378)
Reclassification adjustment to retained earnings related to U.S. tax reform legislation (1)		-		-		(290)		-
Adjusted beginning balance		(1,622)		(1,364)		(1,635)		(1,378)
Reclassification adjustment for amortization of net losses from past experience and prior service costs (other operating expenses)		17		17		34		32
Reclassification adjustment for settlement (other operating expenses)		-		-		-		6
Tax (expense)		(3)		(7)		(7)		(14)
Net adjustments reclassified from AOCI to net income		14		10		27		24
Valuation update		(12)		2		(12)		2
Tax benefit (expense)		3		-		3		-
Net change due to valuation update		(9)		2		(9)		2
Other comprehensive income, net of tax		5		12		18		26
Ending balance	$	(1,617)	$	(1,352)	$	(1,617)	$	(1,352)
(1) See Note 2 for further information about adjustments resulting from the Company's adoption of new accounting standards in 2018.

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Pension and Other Postretirement Benefit Plans

6 Months Ended

Jun. 30, 2018

Pension and Other Postretirement Benefit Plans [Abstract]

Pension and Other Postretirement Benefit Plans

Note 14 — Pension and Other Postretirement Benefit Plans

The Company and certain of its subsidiaries provide pension, health care and life insurance defined benefits to eligible retired employees, spouses and other eligible dependents through various domestic and foreign plans. The effect of its foreign pension and other postretirement benefit plans is immaterial to the Company’s results of operations, liquidity and financial position. The Company froze its defined benefit postretirement medical plan in 2013 and its primary domestic pension plans in 2009.

As further discussed in Note 16, 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 related to this litigation is adopted, the pension benefit obligation will be updated to reflect benefits resulting from this litigation.

Pension and Other Postretirement Benefits. Components of net pension and net other postretirement benefit costs were as follows:

	Pension Benefits								Other Postretirement Benefits
	Three Months Ended				Six Months Ended				Three Months Ended				Six Months Ended
	June 30,				June 30,				June 30,				June 30,
(In millions)	2018		2017		2018		2017		2018		2017		2018		2017
Service cost	$	-	$	1	$	1	$	1	$	-	$	-	$	-	$	-
Interest cost		42		45		84		93		2		2		4		5
Expected long-term return on plan assets		(64)		(64)		(128)		(129)		-		-		-		-
Amortization of:
Net loss from past experience		18		17		35		33		-		-		-		-
Prior service cost		-		-		-		-		(1)		-		(1)		(1)
Settlement loss		-		-		-		6		-		-		-		-
Net cost	$	(4)	$	(1)	$	(8)	$	4	$	1	$	2	$	3	$	4

All components of pension and other postretirement benefit costs are reported in operating expenses. The Company funds its domestic qualified pension plans at least at the minimum amount required by the Employee Retirement Income Security Act of 1974 and the Pension Protection Act of 2006. The Company did not make any pension contributions during the six months endedJune 30, 2018, and does not expect to make any pension contributions for the remainder of 2018.

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Income Taxes

6 Months Ended

Jun. 30, 2018

Income Taxes [Abstract]

Income Taxes

Note 15― Income Taxes

A. Income Tax Expense

The consolidated effective tax rate decreased to 25.6% for the six months endedJune 30, 2018 compared with 30.7% for the six months endedJune 30, 2017. The significantly lower effective tax rate for 2018 was attributable to a lower U.S. tax rate effective January 1, 2018 resulting from U.S. tax reform legislation enacted in 2017. This favorable effect was partially offset by the reinstatement of the non-deductible health insurance industry tax in 2018 and the absence of an incremental tax benefit recognized in the second quarter of 2017 associated with merger-related costs (see Note 3).

For the six months endedJune 30, 2018, there were no adjustments to the provisional amounts first recognized in fourth quarter 2017 as a result of U.S. tax reform legislation. In accordance with guidance of the staff of the Securities and Exchange Commission, the Company’s accounting for these amounts will be evaluated and adjusted, if needed, until we file our 2017 U.S. tax return later in 2018. In addition, the Company has evaluated the global intangible low-taxed income (“GILTI”) provisions of U.S. tax reform that became effective January 1, 2018. For the six months endedJune 30, 2018, the GILTI tax impact was immaterial. The Company will continue to evaluate these provisions in future periods as further guidance emerges. It is the Company’s policy to recognize any GILTI taxes as period costs when incurred.

The Company’s foreign operations continue to maintain a significant portion of their earnings overseas. These undistributed earnings are deployed outside of the United States predominantly in support of the liquidity and regulatory capital requirements of our foreign operations as well as to support growth initiatives overseas. The Company does not intend to repatriate these earnings to the United States. If the Company had intended to repatriate these foreign earnings to the United States, the Company would have recorded additional deferred tax liabilities of approximately $138 million for foreign withholding taxes as of June 30, 2018. A portion of these taxes may be eligible for credit against the Company’s U.S. tax liability.

B. Unrecognized Tax Benefits

Changes in unrecognized tax benefits were immaterial for the six months endedJune 30, 2018.

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Contingencies and Other Matters

6 Months Ended

Jun. 30, 2018

Contingencies And Other Matters [Abstract]

Contingencies and Other Matters

Note 16 ― 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

Separate account assets are contractholder funds maintained in accounts with specific investment objectives. The Company records separate account liabilities equal to separate account assets.  In certain cases, the Company guarantees a minimum level of benefits for retirement and insurance contracts written in separate accounts and establishes an additional liability if management believes that the Company will be required to make a payment under these guarantees.

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 assets that exceed a certain percentage of benefit obligations. If employers fail to do so, the Company or an affiliate of the buyer of the retirement benefits business (Prudential Retirement Insurance and Annuity Company or “Prudential”) has the right to redirect the management of the related assets to provide for benefit payments. As of June 30, 2018 employers maintained assets that exceeded the benefit obligations under these arrangements of approximately $460 million. Approximately 12% of these are reinsured by Prudential. The remaining guarantees are provided by the Company with minimal reinsurance from third parties. There were no additional liabilities required for these guarantees as of June 30, 2018. Separate account assets supporting these guarantees are classified in Levels 1 and 2 of the GAAP fair value hierarchy (see Note 9).

The Company does not expect that these financial guarantees will have a material effect on the Company’s consolidated results of operations, liquidity or financial condition.

GMIB Contracts

See Note 8 for discussion.

C. Certain Other Guarantees

The Company had indemnification obligations to a lender of approximately $90 million as of June 30, 2018, related to a borrowing by a certain real estate joint venture that the Company records as an investment. This borrowing (a nonrecourse obligation of the Company)matures in 2021 and is secured by the joint venture’s real estate property with a fair value in excess of the loan amount. 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 that payments will be required under this indemnification obligation. Any payment that might be required could be recovered through a refinancing or sale of the assets. The Company also has recourse to the partner for their proportionate share of amounts paid. There were no liabilities required for this indemnification obligation as of June 30, 2018.

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.

In first quarter 2017, the Commonwealth Court of Pennsylvania entered an order of liquidation of Penn Treaty Network America Insurance Company, together with its subsidiary American Network Insurance Company (collectively “Penn Treaty”, a long-term care insurance carrier), triggering guaranty fund coverage and a charge of approximately $130 million before-tax ($85 million after-tax). As of June 30, 2018, the recorded liability for this assessment was approximately $42 million. Updates to the amount of the Penn Treaty assessment were not material in 2018. 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.

Legal and Regulatory 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 pending 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 the 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 15.

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 minimum amount of the range (if no amount is better than any other estimated amount in the range). For material pending litigation and legal or regulatory matters discussed below, the Company provides disclosure in the aggregate of accruals and range of loss, or a statement that such information cannot be estimated. The Company had pre-tax accruals as of June 30, 2018 of $195 million ($155 million after-tax) for the matters discussed below under “Litigation Matters.” Due to numerous uncertain factors presented in these cases, it is not possible to estimate an aggregate range of loss (if any) for these matters at this time. In light of the uncertainties involved in these matters, there is no assurance that their ultimate resolution will not exceed the amounts currently accrued by the Company. An adverse outcome in one or more of these matters could be material to the Company’s results of operations, financial condition or liquidity for any particular period.

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 Plan’s cash balance formula discriminates against older employees; that the conversion resulted in a wear-away period (when the pre-conversion accrued benefit exceeded the post-conversion benefit); and that the Plan communications contained inaccurate or inadequate disclosures about these conditions.

In 2008, the District Court (1) affirmed the Company’s right to convert to a cash balance plan prospectively beginning in 1998; (2) found for plaintiffs on the disclosure claim only; and (3) required the Company to pay pre-1998 benefits under the pre-conversion traditional annuity formula and post-1997 benefits under the post-conversion cash balance formula.  From 2008 through 2015, this case has undergone a series of court proceedings that resulted in the original District Court order being largely upheld. In 2015, the Company submitted to the District Court its proposed method for calculating the additional pension benefits due to class members and plaintiffs responded in August 2015.

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 July 25, 2018, both parties 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. On July 25, 2018, the Court issued an oral ruling. It is anticipated that the Plan will be amended promptly to comply with the District Court’s orders and the remedy benefits will begin to be paid as soon as practicable thereafter.The Company’s reserve for this litigation is adequate at June 30, 2018, based on calculations consistent with the latest guidance from the Court.

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 the 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 Jersey. 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 (“RICO”) 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 District 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 April 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 proceeding 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 appealed 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 asserted 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 continue to vigorously defend its position.

Regulatory Matters

Civil Investigative Demand. The U.S. Department of Justice (“DOJ”) is conducting an industry review of Medicare Advantage organizations’ risk adjustment practices under Medicare Parts C and D, including medical chart reviews and health exams.  The Company is currently responding to information requests (civil investigative demands) received from the DOJ (U.S. Attorney’s Offices for the Eastern District of Pennsylvania and the Southern District of New York).  We will continue to cooperate with the DOJ’s investigation. 

Disability claims regulatory matter. During the second quarter of 2013, the Company finalized an agreement with the Departments of Insurance for Maine, Massachusetts, 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 disposition and (2) a two-year monitoring period followed by a re-examination. 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 related to the Merger.Following announcement of the Company’s Merger Agreement with Express Scripts as discussed in Note 3, putative class action complaints (collectively the “complaints”) have been filed against Express Scripts and the Express Scripts board of directors. Certain of these complaints also include Cigna, New Cigna, Cigna Merger Sub and Express Scripts Merger Sub as defendants. The complaints allege that the registration statement filed in connection with the Merger (and certain amendments thereto) omitted material information in violation of Sections 14(a) and 20(a) of the Exchange Act, rendering the registration statement false and misleading. Among other remedies, the complaints seek to enjoin the Express Scripts special meeting and the closing of the Merger, as well as damages, costs and attorneys’ fees. The defendants believe that the lawsuits are without merit.

Litigation with Anthem. In February 2017, the Company delivered a notice to Anthem terminating the 2015 merger agreement, and notifying Anthem that it must pay the Company the $1.85 billion reverse termination fee pursuant to the terms of the merger agreement. Also in February 2017, the Company filed suit against Anthem in the Delaware Court of Chancery (the “Chancery Court”) seeking declaratory judgments that the Company’s termination of the merger agreement was valid and that Anthem was not permitted to extend the termination date. The complaint also sought payment of the reverse termination fee and additional damages in an amount exceeding $13 billion, including the lost premium value to the Company’s shareholders caused by Anthem’s willful breaches of the merger agreement.

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 compelling 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 February 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.

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Segment Information

6 Months Ended

Jun. 30, 2018

Segment Information [Abstract]

Segment Information [Text Block]

Note 17 ― Segment Information

See Note 1 for a description of the Company’s reporting segments.

In the Company’s segment disclosures, we present “operating revenues,” defined as total revenues excluding realized investment results. Beginning in 2018, realized investment results from the Company's equity method joint ventures in the Global Supplemental Benefits segment are also excluded due to the potential increased volatility in investment results after adopting ASU 2016-01. Investment gains or losses are managed based on factors largely unrelated to the underlying business purpose of each segment and are not indicative of the underlying performance of the Company’s core business operations, so they are excluded from operating revenues.

The Company uses “adjusted income (loss) from operations” as its principal financial measure of segment operating performance because management believes it best reflects the underlying results of core business operations and permits analysis of trends in underlying revenue, expenses and profitability. Adjusted income from operations is defined as shareholders’ net income (loss) excluding after-tax realized investment gains and losses, amortization of other acquired intangible assets and special items. Income or expense amounts that are excluded from adjusted income from operations because they are not indicative of underlying performance or the responsibility of operating segment management include:

• Realized investment results, including changes in market values of certain financial instruments between balance sheet dates, as well as gains and losses associated with invested asset sales. As discussed above, beginning in 2018, realized investment results from the Company's equity method joint ventures in the Global Supplemental Benefits segment are also excluded.
• Amortization of other intangible assets related to costs incurred for acquisitions
• Special items, if any, that management believes are not representative of the underlying results of operations due to the nature or size of these matters.Further context about these items is provided in the footnotes listed in the table below.

	Three Months Ended
	June 30, 2018				June 30, 2017
(In millions)	Before-tax		After-tax		Before-tax		After-tax
Transaction-related costs - see Note 3	$	130	$	109	$	16	$	(47)
Total impact from special items	$	130	$	109	$	16	$	(47)
	Six Months Ended
	June 30, 2018				June 30, 2017
	Before-tax		After-tax		Before-tax		After-tax
Transaction-related costs - see Note 3	$	190	$	159	$	79	$	2
Long-term care guaranty fund assessment - see Note 16(D)		-		-		129		83
Total impact from special items	$	190	$	159	$	208	$	85

Summarized segment financial information was as follows:

(In millions)	Global Health Care		Global Supplemental Benefits		Group Disability and Life		Other Operations		Corporate		Total
Three Months Ended June 30, 2018
Premiums, fees and other revenues and mail order pharmacy revenues (1)	$	9,025	$	1,050	$	1,031	$	33	$	(11)	$	11,128
Net investment income		125		36		96		88		7		352
Less net realized investment (losses) from equity method subsidiaries (2)		-		(20)		-		-		-		(20)
Operating revenues	$	9,150	$	1,106	$	1,127	$	121	$	(4)	$	11,500
Total revenues	$	9,155	$	1,075	$	1,132	$	119	$	(4)	$	11,477
Shareholders' net income (loss)	$	780	$	86	$	107	$	19	$	(186)	$	806
After-tax adjustments to reconcile to adjusted income from operations
Net realized investment (gains) losses (2)		(4)		27		(4)		2		1		22
Amortization of other acquired intangible assets, net		13		5		-		-		-		18
Special item
Transaction-related costs		-		-		-		-		109		109
Adjusted income (loss) from operations	$	789	$	118	$	103	$	21	$	(76)	$	955
Three Months Ended June 30, 2017
Premiums, fees and other revenues and mail order pharmacy revenues (1)	$	8,100	$	924	$	1,023	$	30	$	(11)	$	10,066
Net investment income		92		31		89		88		8		308
Operating revenues	$	8,192	$	955	$	1,112	$	118	$	(3)	$	10,374
Total revenues	$	8,224	$	954	$	1,134	$	116	$	(3)	$	10,425
Shareholders' net income (loss)	$	599	$	101	$	97	$	17	$	(1)	$	813
After-tax adjustments to reconcile to adjusted income from operations
Net realized investment (gains) losses		(22)		-		(14)		2		-		(34)
Amortization of other acquired intangible assets, net		14		4		-		-		-		18
Special items
Transaction-related costs		-		-		-		-		(47)		(47)
Adjusted income (loss) from operations	$	591	$	105	$	83	$	19	$	(48)	$	750
(1) Includes the Company's share of the earnings of its joint ventures in China and India in the Global Supplemental Benefits segment.
(2) Beginning in 2018, the Company's share of the realized investment results of equity method joint ventures in the Global Supplemental Benefits segment (reported in other revenues) is excluded from operating revenues and adjusted income from operations.

(In millions)	Global Health Care		Global Supplemental Benefits		Group Disability and Life		Other Operations		Corporate		Total
Six Months Ended June 30, 2018
Premiums, fees and other revenues and mail order pharmacy revenues (1)	$	17,999	$	2,116	$	2,057	$	64	$	(24)	$	22,212
Net investment income		240		70		186		173		12		681
Less net realized investment (losses) on equity method subsidiaries (2)		-		(22)		-		-		-		(22)
Operating revenues	$	18,239	$	2,208	$	2,243	$	237	$	(12)	$	22,915
Total revenues	$	18,224	$	2,175	$	2,232	$	239	$	(13)	$	22,857
Shareholders' net income (loss)	$	1,622	$	191	$	161	$	48	$	(301)	$	1,721
After-tax adjustments to reconcile to adjusted income from operations
Net realized investment losses (gains) (2)		11		28		9		(3)		2		47
Amortization of other acquired intangible assets		27		11		-		-		-		38
Special item
Transaction-related costs		-		-		-		-		159		159
Adjusted income (loss) from operations	$	1,660	$	230	$	170	$	45	$	(140)	$	1,965
Six Months Ended June 30, 2017
Premiums, fees and other revenues and mail order pharmacy revenues (1)	$	16,295	$	1,805	$	2,055	$	60	$	(24)	$	20,191
Net investment income		184		59		178		174		16		611
Operating revenues	$	16,479	$	1,864	$	2,233	$	234	$	(8)	$	20,802
Total revenues	$	16,537	$	1,876	$	2,263	$	231	$	(8)	$	20,899
Shareholders' net income (loss)	$	1,143	$	178	$	156	$	37	$	(103)	$	1,411
After-tax adjustments to reconcile to adjusted income from operations
Net realized investment (gains) losses		(38)		(9)		(20)		2		-		(65)
Amortization of other acquired intangible assets		28		10		-		-		-		38
Special items
Transaction-related costs		-		-		-		-		2		2
Long-term care guaranty fund assessment		68		-		15		-		-		83
Total special items		68		-		15		-		2		85
Adjusted income (loss) from operations	$	1,201	$	179	$	151	$	39	$	(101)	$	1,469
(1) Includes the Company's share of the earnings of its joint ventures in China and India in the Global Supplemental Benefits segment.
(2) Beginning in 2018, the Company's share of the realized investment results of equity method joint ventures in the Global Supplemental Benefits segment (reported in other revenues) is excluded from operating revenues and adjusted income from operations.

Revenue from external customers includes premiums, fees and other revenues and mail order pharmacy revenues. The following table presents these revenues by product type for the periods ended June 30:

(In millions)	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Premiums by product (ASC 944 - insurance activities)
Global Health Care
Commercial
Guaranteed cost	$	2,046	$	1,522	$	4,045	$	3,065
Experience-rated		736		727		1,475		1,454
Stop loss		993		856		1,973		1,708
International health care		515		479		1,028		954
Dental		482		441		961		882
Other		259		243		517		489
Government
Medicare		1,461		1,389		2,959		2,850
Medicaid		243		273		478		553
Medicare Part D		189		198		417		432
Total Global Health Care		6,924		6,128		13,853		12,387
Disability		510		491		1,015		992
Life, Accident and Supplemental Health		1,551		1,413		3,090		2,780
Total premiums from ongoing operations		8,985		8,032		17,958		16,159
Fees (ASC 606 - service activities)
Global Health Care		1,333		1,213		2,659		2,433
Global Supplemental Benefits		8		7		15		12
Group Disability and Life		25		25		50		52
Total fees from ongoing operations		1,366		1,245		2,724		2,497
Mail order pharmacy (ASC 606 - service activities)		758		757		1,475		1,467
Other		19		32		55		68
Total revenues from external customers	$	11,128	$	10,066	$	22,212	$	20,191

Premiums from the Centers for Medicare and Medicaid Services (“CMS”) were 18% of consolidated revenues for the six months endedJune 30, 2018and 17% for the six months endedJune 30, 2017. These amounts were reported in the Global Health Care segment.

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Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The Consolidated Financial Statements include the accounts of Cigna Corporation and its subsidiaries. Intercompany transactions and accounts have been eliminated in consolidation.  These Consolidated Financial Statements were prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Amounts recorded in the Consolidated Financial Statements necessarily reflect management’s estimates and assumptions about medical costs, investment 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 in 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.

These interim Consolidated Financial Statements are unaudited but include all adjustments (including normal recurring adjustments) necessary, in the opinion of management, for a fair statement of financial position and results of operations for the periods reported. The interim Consolidated Financial Statements and Notes should be read in conjunction with the Consolidated Financial Statements and Notes included in the Company’s 2017 Annual Report on Form 10-K (“2017Form 10-K”). The preparation of interim Consolidated Financial Statements necessarily relies heavily on estimates. This and certain other factors, including the seasonal nature of portions of the health care and related benefits business, as well as competitive and other market conditions, call for caution in estimating full-year results based on interim results of operations.

Recent Accounting Changes

Recent Accounting Pronouncements

The Company’s 2017Form 10-K includes discussion of significant recent accounting pronouncements that either have impacted or may impact our financial statements in the future.

The following tables provide information about recently adopted and recently issued or changed accounting guidance (applicable to Cigna) that have occurred since the Company filed its 2017Form 10-K.

Recently Adopted Accounting Guidance
Accounting Standard and Adoption Date	Requirements and Effects of Adopting New Guidance
Revenue from Contracts with Customers (Accounting Standards Update ("ASU") 2014-09 and related amendments)Adopted as of January 1, 2018	Requires:
	•	Revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services
	•	Additional revenue-related disclosures
	Effects of adoption:
	•	Applies to the Company’s service and mail order pharmacy contracts with customers
	•	Adopted through full retrospective restatement
	•	Cumulative effect adjustment of $24 million after-tax was recorded, reducing the December 31, 2016 balance of retained earnings. Adjustment established a contract liability for service fee revenue billed that must be deferred and allocated to services performed after a customer contract terminates. Subsequent changes in the contract liability and the related impact to net income and per share amounts since adoption were immaterial.
	•	Immaterial reclassifications were made to prior periods in the Consolidated Statements of Income to conform to the current presentation. The ASU and related interpretive guidance provide clarification on topics including whether all or a part of a contract is within its scope, and the definition of a customer. Companies are required to identify and evaluate distinct performance obligations within their contracts. These clarifications resulted in reclassifications within the Global Health Care Segment affecting premiums, fees and other revenues, Global Health Care medical costs, and other operating expenses and had no impact on recognition patterns or net income.
	•	Prior period balances in the Company's footnote disclosures have been updated to reflect adjustments resulting from the adoption of this ASU.
Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01 and related amendments)Adopted 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
	Effects of adoption:
	•	Certain limited partnership interests previously carried at cost of approximately $200 million were increased to fair value of approximately $275 million on January 1, 2018. Subsequent changes in fair value are reported in net investment income.
	•	Changes in fair value for equity securities that have a readily determinable fair value that were previously reported in accumulated other comprehensive income are now reported in net realized investment gains.
	•	Cumulative effect adjustment of $62 million after-tax was recorded, increasing the opening balance of retained earnings in 2018.
	•	See Notes 9 and 10 for updated disclosures about equity securities.
Targeted Improvements to Accounting for Hedging Activities (ASU 2017-12)Early adopted as of January 1, 2018	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
	Effects of adoption:
	•	An immaterial amount of retained earnings was reclassified to accumulated other comprehensive income, decreasing the opening balance in 2018, for a portion of the hedging instruments that was previously excluded from the assessment of hedge effectiveness for fair value hedges.
	•	See Note 11 for the Company's disclosures about derivatives.

Recently Adopted Accounting Guidance
Accounting Standard and Adoption Date	Requirements and Effects of Adopting New Guidance
Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02)Early adopted as of January 1, 2018	Guidance:
	•	Allows companies to reclassify the tax effects stranded in accumulated other comprehensive income to retained earnings as a result of H.R.1, An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018 (referred to throughout this Form 10-Q as "U.S. tax reform" or "U.S. tax reform legislation")
	•	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: Accumulated other comprehensive income of $229 million was reclassified to retained earnings, increasing the opening balance in 2018. See Note 13 for additional information including accounting policy disclosures.

In addition to the standards listed above, the Company adopted the following guidance in first quarter 2018 with no material impact to our financial statements: Intra-Entity Transfers of Assets Other than Inventory (ASU 2016-16), Clarifying the Definition of a Business (ASU 2017-01), Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (ASU 2017-07), Statement of Cash Flows: Restricted Cash (ASU 2016-18), Gains and Losses from the Derecognition of Nonfinancial Assets (ASU 2017-05) and Stock Compensation Scope of Modification Accounting (ASU 2017-09).

Accounting Guidance Not Yet Adopted
Accounting Standard and Effective Date Applicable for Cigna	Requirements and Expected Effects of Guidance Not Yet Adopted
Leases (ASU 2016-02 and related amendments)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
	•	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 its 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 plans to elect the optional practical expedient to retain the current classification of leases, and therefore, does not anticipate a material impact to the Consolidated Statements of Income or Cash Flows.
	•	The Company is implementing a new lease system and also expects that adoption of the new standard will require changes to internal control over financial reporting.

The incremental costs of obtaining ASO and mail order pharmacy contracts (such as sales commissions) are expensed as incurred and the Company does not disclose information about remaining performance obligations for these contracts in accordance with elections made by the Company as they are generally short-term with original expected durations of one year or less.

Revenue Recognition Policy

Accounting for Contracts with Customers – Service and Mail Order Pharmacy Arrangements

Service Fees and Expenses

The majority of the Company’s service fees are derived from administrative services only (“ASO”) arrangements thatallow corporate clients to self-fund claims and assume the risk of medical or other benefit costs. Most of the Company’s ASO arrangements are for Global Health Care medical and specialty services, including pharmacy benefits and, to a lesser extent, ASO services in its Group Disability and Life and Global Supplemental Benefits segments. Generally, the Company’s ASO arrangements are short-term. Contract modifications typically occur on renewal and are prospective in nature.

In return for fees from these clients, the Company provides or makes available various services supporting benefit management and claims administration. In addition, Global Health Care’s services include access to the Company’s participating provider networks, disease management, utilization management, and cost containment services.

In general, the Company considers these services to be a combined performance obligation to provide cost effective administration of plan benefits over the contract period.Fees are billed, due and recognized monthly at contracted rates based on current membership or utilization. This recognition pattern aligns with the benefits from services provided to clients. These revenues are reported in fees and other revenues in the Consolidated Statements of Income.

For most ASO arrangements, the Company is required to perform services for a limited period after a client cancels. If these services will not be separately billed to the client as they are performed, the Company estimates and defers a portion of compensation attributable to this service obligation received in advance. Deferred revenue is recorded as a contract liability in accounts payable, accrued expenses and other liabilities and recognized when the related services are performed.

The Company may also provide performance guarantees that provide potential refunds to clients if certain service standards, clinical outcomes or financial metrics are not met. If these standards, outcomes and metrics are not met, the Company may be financially at risk up to a stated percentage of the contracted fee or a stated dollar amount. The Company defers revenue by recording a liability for estimated payouts associated with these guarantees within accounts payable, accrued expenses and other liabilities. The amount of revenue deferred is estimated for each type of guarantee, using either a most likely amount or expected value method depending upon the nature of the guarantee and the information available to estimate refunds. Estimates are refined each reporting period as additional information on the Company’s performance becomes available, and upon final reconciliation and settlement at the end of the guarantee period. Amounts accrued and paid for performance guarantees during the reporting periods were not material.

Service fees are recognized net of estimated pharmaceutical manufacturer rebates payable to ASO clients using our network of retail pharmacies. Net rebates retained by the Company from pharmaceutical manufacturers resulting from ASO client utilization at retail pharmacies represent compensation for pharmacy services and are reflected as fee revenue. Rebates generally represent a per script amount from the manufacturer and are determined based on scripts filled during the reporting period.

Expenses associated with administrative programs and services are recognized in other operating expenses as incurred.

Mail Order Pharmacy Revenues and Costs

Mail order pharmacy revenues are due and recognized as each prescription is shipped. Mail order pharmacy revenues are presented net of estimated pharmaceutical manufacturer rebates payable to ASO clients that use our mail order business. Rebates are generally determined based on actual prescriptions filled during the reporting period.

Mail order pharmacy costs are recognized as each prescription is shipped and include the cost of prescriptions sold and other costs to operate this business (including supplies, shipping and handling), net of estimated pharmaceutical rebates from manufacturers for prescriptions filled through our mail order business.

Contract Balances

The following table provides information about receivables and contract liabilities from service and mail order pharmacy contracts with clients. The allowance for doubtful accounts for receivables and the Company’s contract assets were not material as of the dates presented.

(In millions)	June 30, 2018		December 31, 2017
Receivables, net	$	911	$	885
Contract liabilities	$	56	$	54

Revenue recognized for the three months and six months endedJune 30, 2018 and 2017 that was included in the contract liability balance at the beginning of the reporting period was not material.

The amount of revenue recognized for the three months and six months endedJune 30, 2018 and 2017 from performance obligations satisfied in prior periods was not material.

The incremental costs of obtaining ASO and mail order pharmacy contracts (such as sales commissions) are expensed as incurred and the Company does not disclose information about remaining performance obligations for these contracts in accordance with elections made by the Company as they are generally short-term with original expected durations of one year or less.

Reinsurance

Because reinsurance does not relieve the originating insurer of liability, such liabilities must continue to be reported along with the related reinsurance recoverables. The Company regularly evaluates the financial condition of its reinsurers and monitors concentrations of its credit risk.

GMDB

The Company estimates the gross liability and reinsurance recoverable with an internal model based on the Company’s experience and future expectations over anextended period, consistent with the long-term nature of this product. As a result of the reinsurance transaction, reserve increases have acorresponding increase in the recorded reinsurance recoverable, provided the increased recoverable remains within the overallBerkshire limit (including the GMIB asset presented below).

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 9.

The only assumption expected to impact the Company’s 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 fair value 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 calculate 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, certain equity securities, short-term investments and derivatives. Other financial instruments are measured at fair value only under certain conditions, 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 the liability with the creditor.

The Company’s financial assets and liabilities carried at fair value have been classified based upon a hierarchy defined by GAAP. The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). An asset’s or a liability’s classification is based on the lowest level of input that is significant to its measurement. For example, a financial asset or liability carried at fair value would be classified in Level 3 if unobservable inputs were significant to the instrument’s fair value, even though the measurement may be derived using inputs that are both observable (Levels 1 and 2) and unobservable (Level 3).

The Company estimates fair values using prices from third parties or internal pricing methods. Fair value estimates received from third-party pricing services are based on reported trade activity and quoted market prices when available, and other market information that a market participant may use to estimate fair value. The internal pricing methods are performed by the Company’s investment professionals and generally involve using discounted cash flow analyses, incorporating current market inputs for similar financial instruments with comparable terms and credit quality, as well as other qualitative factors. In instances where there is little or no market activity for the same or similar instruments, fair value is estimated using methods, models and assumptions that the Company believes a hypothetical market participant would use to determine a current transaction price. These valuation techniques involve some level of estimation and judgment that becomes significant with increasingly complex instruments or pricing models.

The Company is responsible for determining fair value, 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 appropriate estimates of fair value. The controls executed by the Company include evaluating changes in prices and monitoring for potentially stale valuations. The Company also performs sample testing of sales values to confirm the accuracy of prior fair value estimates. The minimal exceptions identified during these processes indicate that adjustments to prices are infrequent and do not significantly impact valuations. Annually, we conduct an on-site visit of the most significant pricing service to review their processes, methodologies and controls. This on-site review includes a walk-through of inputs for a sample of securities held across various asset types to validate the documented pricing process.

Level 1 Financial Assets

Inputs for instruments classified in Level 1 include unadjusted quoted prices for identical assets in active markets accessible at the measurement date.  Active markets provide pricing data for trades occurring at least weekly and include exchanges and dealer markets.

Assets in Level 1 include actively-traded U.S. government bonds and exchange-listed equity securities.Given the narrow definition of Level 1 and the Company's investment asset strategy to maximize investment returns, 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 in active markets, quoted prices from those willing to trade in markets that are not active, or other inputs that are market observable or can be corroborated by market data for the term of the instrument.  Such other inputs include market interest rates and volatilities, spreads and yield curves. An instrument is classified in Level 2 if the Company determines that unobservable inputs are insignificant.

Fixed maturities and equity securities.Approximately95% of the Company’s investments in fixed maturities and equity securities are classified in Level 2 including most public and private corporate debt and hybrid equity securities, federal agency and municipal bonds, non-government mortgage-backed securities and preferred stocks.  Because many fixed maturities do not trade daily, third-party pricing services and internal valuation 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.  These models calculate fair values by discounting future cash flows at estimated market interest rates.  Such market rates are derived by calculating the appropriate spreads over comparable U.S. Treasury securities, based on the credit quality, industry and structure of the asset. Typical inputs and assumptions to pricing models include, but are not limited to, a combination of benchmark yields, reported trades, issuer spreads, liquidity, benchmark securities, bids, offers, reference data, and industry and economic events.  For mortgage-backed securities, inputs and assumptions may also include characteristics of the issuer, collateral attributes, prepayment speeds and credit rating.

Nearly all of these instruments are valued using recent trades or pricing models. Less than 1% of the fair value of investments classified in Level 2 represents foreign bonds that are valued using a single unadjusted market-observable input derived by averaging multiple broker-dealer quotes, consistent with local market practice.

Short-term investments are carried at fair value 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 Company is considered when estimating the fair values of these derivatives.  However, the Company is largely protected by collateral arrangements with counterparties and determined that no adjustment for credit risk was required as of June 30, 2018 or December 31, 2017. 

The nature and use of these other derivatives are described in Note 11.

Level 3 Financial Assets and Financial Liabilities

Certain inputs for instruments classified in Level 3 are unobservable (supported by little or no market activity) and significant to their resulting fair value measurement.  Unobservable inputs reflect the Company’s best estimate of what hypothetical market participants would use to determine a transaction price for the asset or liability at the reporting date.

The Company classifies certain newly issued, privately-placed, complex or illiquid securities, as well as assets and liabilities relating to GMIB, in Level 3.

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 include 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 there 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 spreads is needed to value a more complex bond structure with multiple underlying collateral and no standard market valuation technique. The weighting of credit spreads is primarily based on the underlying collateral’s characteristics and their proportional cash flows supporting the bond obligations.

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 earnings 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 relative 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 measurements while decreases in these inputs would result inhigher fair value measurements.Significant decreases in equity price-to-EBITDA multiples would result in lower fair value measurements while increases in these inputs would result in higher fair value measurements.Generally, the unobservable inputs are not interrelated and a change in the assumption used for one unobservable input is not accompanied by a change in 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; and
• Other operating expenses for amounts related 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 (depreciation) 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 occurs. 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

Separate account investments in securities partnerships, real estate, and hedge funds are generally valued based on the separate account’s ownership share of the equity of the investee (NAV as a practical expedient) including changes in the fair values of its underlying investments. Substantially all of these assets support the Cigna Pension Plans.

Some financial assets and liabilitiesare not carried at fair value each reporting period, but may be measured using fair value only under certain conditions, such as investments when they become impaired includingreal estate, partnership entities, commercial mortgage loans, and certain equity securities with no readily determinable fair value

Separate Accounts

Fair values and changes in the fair values of separate account assets generally accrue directly to the policyholders and are excluded from the Company’s revenues and expenses.See Note 10 to the Consolidated Financial Statements contained in the Company’s 2017Form 10-K for additional policy information related to separate accounts.

Investments

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 expected recovery.

Accounting policy. Upon adopting ASU 2016-01 beginning in 2018, changes in the fair values of equity securities that have a readily determinable fair value (primarily exchange-traded funds) are reported in other realized investment gains (losses). As of June 30, 2018, the fair values of these securities were $443 million andcost was $453 million. Also beginning in 2018, private equity securities of $68 million as of June 30, 2018, that do not have a readily determinable fair value are carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes. The amount of impairments or value changes resulting from observable price changes was not material.

Equity securities also include hybrid investments consisting of preferred stock with call features that are carried at fair value with changes in fair value reported in other realized investment gains (losses) and dividends reported in net investment income.

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

Credit quality. The Company regularly evaluates and monitors credit risk, beginning with the initial underwriting of a mortgage loan and continuing throughout the investment holding period. Mortgage origination professionals employ an internal credit quality rating system designed to evaluate the relative risk of the transaction at origination that is then updated each year as part of the annual portfolio loan review. The Company evaluates and monitors credit quality on an ongoing basis, classifying each loan as a loan in good standing, potential problem loan or problem loan.

Quality ratings are based on our evaluation of a number of key inputs related to the loan including real estate market-related factors such as rental rates and vacancies, and property-specific inputs such as growth rate assumptions and lease rollover statistics. However, the two most significant contributors to the credit quality rating are the debt service coverage and loan-to-value ratios. The debt service coverage ratio measures the amount of property cash flow available to meet annual interest and principal payments on the 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 2018 and included an analysis of each underlying property’s December 31, 2017 annual financial statements, rent rolls, operating plans and budgets for 2018, a physical inspection of the property and other pertinent factors.Based on historical results, current leases, lease expirations and rental conditions in each market, the Company 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 property information is received or an event such as delinquency or a borrower’s request for restructure causes management to believe that the Company’s estimate of financial performance, fair value or the risk profile of the underlying property has been impacted.

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 problem 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 fair value of the underlying real estate. Certain commercial mortgage loans without valuation reserves are considered 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.The Company recognizes interest income on impaired mortgage loans only when payment is actually received.

Other Long-Term Investments

Accounting policy. Other long-term investments include investments in unconsolidated entities. These entities include certain limited partnerships and limited liability companies holding real estate, securities or loans. These investments are carried at cost plus the Company’s ownership percentage of reported income or loss in cases where the Company has significant influence. Upon adopting ASU 2016-01 beginning in 2018, the investments are carried at fair value using NAV as a practical expedient in cases when the Company does not have significant influence.

Realized Investment Gains and Losses

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 equity securities and changes in valuation reserves on commercial mortgage loans. The following realized gains and (losses) on investments exclude amounts required to adjust future policy benefits for the run-off settlement annuity business.

Derivative Financial Instruments

The Company reports GMIB liabilities and assets as derivatives at fair value because the 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.

Accounting policy. During the first quarter of 2018, the Company early adopted ASU 2017-12 (Targeted Improvements to Accounting for Hedging Activities) with no material impact to its financial statements. The Company applies hedge accounting when derivatives are designated, qualified and highly effective as hedges. Effectiveness is formally assessed and documented at inception and each period throughout the life of a hedge using various qualitative or quantitativemethods appropriate for each hedge. Under hedge accounting, the changes in fair value of thederivative 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 the hedged item. This is referred to as “hedge ineffectiveness” and, with the adoption of ASU 2017-12, is no longer measured and reported separately from the effective portion of the hedge.The Company excludes certain components of derivative instruments’ changes in fair value from the assessment of hedge effectiveness. With the adoption of ASU 2017-12, those excluded components are initially recorded in other comprehensive income and recognized in shareholders’ net income over the life of the derivative instrument as further discussed below. See Note 9 for further information on our policies for determining fair value. Derivative cash flows are generally reported in operating activities.

Accounting. Hedge accounting has not been designated for these instruments. The fair values of the swaption contracts are reported in other assets, including other intangibles, or accounts payable, accrued expenses, and other liabilities. Changes in fair value and settlements are reported in interest expense.

Accounting. Using cash flow hedge accounting, the fair values of these instruments are reported in other assets, including other intangibles, or accounts payable, accrued expenses, and other liabilities. Changes in fair value are reported in accumulated other comprehensive income ("AOCI"). Upon issuance of the debt, any cumulative gain or loss on these contracts will begin amortizing to interest expense over the life of the hedged debt.

Accounting. Using fair value hedge accounting, swap fair values are reported in other long-term investments or in accounts payable, accrued expenses and other liabilities. Changes in fair values attributable to foreign exchange risk of the swap contracts and the hedged bonds are reported in other realized investment gains and losses. The portion of the swap contracts' changes in fair value excluded from the assessment of hedge effectiveness is recorded in accumulated other comprehensive income and recognized in net investment income as swap coupon payments are accrued, offsetting the foreign denominated coupons received on the designated bonds. Prior to adopting ASU 2017-12, changes in fair value of excluded components of the swap contracts were recognized immediately in realized investment gains and losses.

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. As a net investment hedge, the fair values of the swap contracts are reported in other assets, including other intangibles, or in accounts payable, accrued expenses, and other liabilities. The changes in fair values of these instruments are reported in other comprehensive income, specifically in translation of foreign currencies. The portion of the change in swap fair values relating to foreign exchange spot rates will be recognized in earnings upon deconsolidation of the hedged foreign subsidiaries. The remaining changes in swap fair value are excluded from the effectiveness assessment and recognized in other operating expenses as swap coupon payments are accrued.

Accumulated Other Comprehensive Income

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.

Generally, tax effects in AOCI are established at the currently enacted tax rate and reclassified to net income in the same period that the related pre-tax AOCI reclassifications are recognized.

Income Taxes

It is the Company’s policy to recognize any GILTI taxes as period costs when incurred.

The Company’s foreign operations continue to maintain a significant portion of their earnings overseas.

These undistributed earnings are deployed outside of the United States predominantly in support of the liquidity and regulatory capital requirements of our foreign operations as well as to support growth initiatives overseas. The Company does not intend to repatriate these earnings to the United States.

Commitments and Contingencies

GMIB guarantees.Future payments are not fixed and determinable under the terms of these contracts. Accordingly, the Company calculated the 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 June 30, 2018 value of $782million with no future returns.

The Company has reinsurance coverage in place that covers the exposures on these contracts.

Separate account assets are contractholder funds maintained in accounts with specific investment objectives. The Company records separate account liabilities equal to separate account assets.  In certain cases, the Company guarantees a minimum level of benefits for retirement and insurance contracts written in separate accounts and establishes an additional liability if management believes that the Company will be required to make a payment under these guarantees.

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 pending 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 the 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 15.

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 minimum amount of the range (if no amount is better than any other estimated amount in the range).

Segment Information

In the Company’s segment disclosures, we present “operating revenues,” defined as total revenues excluding realized investment results. Beginning in 2018, realized investment results from the Company's equity method joint ventures in the Global Supplemental Benefits segment are also excluded due to the potential increased volatility in investment results after adopting ASU 2016-01. Investment gains or losses are managed based on factors largely unrelated to the underlying business purpose of each segment and are not indicative of the underlying performance of the Company’s core business operations, so they are excluded from operating revenues.

The Company uses “adjusted income (loss) from operations” as its principal financial measure of segment operating performance because management believes it best reflects the underlying results of core business operations and permits analysis of trends in underlying revenue, expenses and profitability. Adjusted income from operations is defined as shareholders’ net income (loss) excluding after-tax realized investment gains and losses, amortization of other acquired intangible assets and special items. Income or expense amounts that are excluded from adjusted income from operations because they are not indicative of underlying performance or the responsibility of operating segment management include:

• Realized investment results, including changes in market values of certain financial instruments between balance sheet dates, as well as gains and losses associated with invested asset sales. As discussed above, beginning in 2018, realized investment results from the Company's equity method joint ventures in the Global Supplemental Benefits segment are also excluded.
• Amortization of other intangible assets related to costs incurred for acquisitions
• Special items, if any, that management believes are not representative of the underlying results of operations due to the nature or size of these matters.

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Accounting Policies - Unpaid Claims and Claims Expenses (Policies)

6 Months Ended

Jun. 30, 2018

Global Health Benefits Segment [Member]

Liability For Unpaid Claims And Claims Adjustment Expense [Line Items]

Liabilities for unpaid claims and claims expenses

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 payablethat are primarily comprised of accruals for incentives and other amounts payable to health care professionals and facilities. See Note 7 to the Consolidated Financial Statements in the Company’s 2017 Form 10-K for further information about the assumptions and estimates used to establish this liability.

Reinsurance and other amounts recoverable in the above table includes 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 8 for additional information on reinsurance.

Incurred costs related to prior years in the table above, although adjusted through shareholders’ net income, do not directly correspond to an increase or decrease to shareholders’ net income. The primary reason for this difference is that decreases to prior year incurred costs pertaining to the portion of the liability established for moderately adverse conditions are not considered as impacting shareholders’ net income if they are offset by increases in the current year provision for moderately adverse conditions.

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

Reinsurance in the table above reflects amounts due from reinsurers related to unpaid claims liabilities. The Company's insurance subsidiaries enter into agreements with other companies primarily to limit losses from large exposures and to permit recovery of a portion of incurred losses. See Note 8 for additional information on reinsurance.

The majority of the liability for unpaid claims and claim expenses is related to disability claims with long-tailed payouts. Interest earned on assets backing these liabilities is an integral part of pricing and reserving. Therefore, interest accreted on prior year balances is shown as a separate component of prior year incurred claims. This interest is calculated by applying the average discount rateused in determining the liability balance to the average liability balance over the period. The remaining prior year incurred claims amount primarily reflects updates to the Company’s liability estimates and variances between actual experience during the period relative to the assumptions and expectations reflected in determining the liability. Assumptions reflect the Company’s expectations over the life of the book of business and will vary from actual experience in any period, both favorably and unfavorably, with variation in resolution rates being the most significant driver for the long-term disability business and variations in mortality and morbidity being the most significant factors for other business.

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 appropriate waiting period. The Company has purchased retrocessional coverage (“GMIB assets”) for these contracts.

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Requirements and Effects of New Accounting Guidance

Recently Adopted Accounting Guidance
Accounting Standard and Adoption Date	Requirements and Effects of Adopting New Guidance
Revenue from Contracts with Customers (Accounting Standards Update ("ASU") 2014-09 and related amendments)Adopted as of January 1, 2018	Requires:
	•	Revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services
	•	Additional revenue-related disclosures
	Effects of adoption:
	•	Applies to the Company’s service and mail order pharmacy contracts with customers
	•	Adopted through full retrospective restatement
	•	Cumulative effect adjustment of $24 million after-tax was recorded, reducing the December 31, 2016 balance of retained earnings. Adjustment established a contract liability for service fee revenue billed that must be deferred and allocated to services performed after a customer contract terminates. Subsequent changes in the contract liability and the related impact to net income and per share amounts since adoption were immaterial.
	•	Immaterial reclassifications were made to prior periods in the Consolidated Statements of Income to conform to the current presentation. The ASU and related interpretive guidance provide clarification on topics including whether all or a part of a contract is within its scope, and the definition of a customer. Companies are required to identify and evaluate distinct performance obligations within their contracts. These clarifications resulted in reclassifications within the Global Health Care Segment affecting premiums, fees and other revenues, Global Health Care medical costs, and other operating expenses and had no impact on recognition patterns or net income.
	•	Prior period balances in the Company's footnote disclosures have been updated to reflect adjustments resulting from the adoption of this ASU.
Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01 and related amendments)Adopted 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
	Effects of adoption:
	•	Certain limited partnership interests previously carried at cost of approximately $200 million were increased to fair value of approximately $275 million on January 1, 2018. Subsequent changes in fair value are reported in net investment income.
	•	Changes in fair value for equity securities that have a readily determinable fair value that were previously reported in accumulated other comprehensive income are now reported in net realized investment gains.
	•	Cumulative effect adjustment of $62 million after-tax was recorded, increasing the opening balance of retained earnings in 2018.
	•	See Notes 9 and 10 for updated disclosures about equity securities.
Targeted Improvements to Accounting for Hedging Activities (ASU 2017-12)Early adopted as of January 1, 2018	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
	Effects of adoption:
	•	An immaterial amount of retained earnings was reclassified to accumulated other comprehensive income, decreasing the opening balance in 2018, for a portion of the hedging instruments that was previously excluded from the assessment of hedge effectiveness for fair value hedges.
	•	See Note 11 for the Company's disclosures about derivatives.

Recently Adopted Accounting Guidance
Accounting Standard and Adoption Date	Requirements and Effects of Adopting New Guidance
Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02)Early adopted as of January 1, 2018	Guidance:
	•	Allows companies to reclassify the tax effects stranded in accumulated other comprehensive income to retained earnings as a result of H.R.1, An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018 (referred to throughout this Form 10-Q as "U.S. tax reform" or "U.S. tax reform legislation")
	•	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: Accumulated other comprehensive income of $229 million was reclassified to retained earnings, increasing the opening balance in 2018. See Note 13 for additional information including accounting policy disclosures.

Accounting Guidance Not Yet Adopted
Accounting Standard and Effective Date Applicable for Cigna	Requirements and Expected Effects of Guidance Not Yet Adopted
Leases (ASU 2016-02 and related amendments)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
	•	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 its 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 plans to elect the optional practical expedient to retain the current classification of leases, and therefore, does not anticipate a material impact to the Consolidated Statements of Income or Cash Flows.
	•	The Company is implementing a new lease system and also expects that adoption of the new standard will require changes to internal control over financial reporting.

Receivables and Contract Liabilities from Contracts with Clients

(In millions)	June 30, 2018		December 31, 2017
Receivables, net	$	911	$	885
Contract liabilities	$	56	$	54

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Earnings per Share

	Three Months Ended
	June 30, 2018						June 30, 2017
(Shares in thousands, dollars in millions, except per share amounts)			Effect of						Effect of
	Basic		Dilution		Diluted		Basic		Dilution		Diluted
Shareholders' net income	$	806			$	806	$	813			$	813
Shares
Weighted average		242,453				242,453		254,087				254,087
Common stock equivalents				2,886		2,886				3,974		3,974
Total shares		242,453		2,886		245,339		254,087		3,974		258,061
EPS	$	3.32	$	(0.03)	$	3.29	$	3.20	$	(0.05)	$	3.15

	Six Months Ended
	June 30, 2018						June 30, 2017
(Shares in thousands, dollars in millions, except per share amounts)			Effect of						Effect of
	Basic		Dilution		Diluted		Basic		Dilution		Diluted
Shareholders' net income	$	1,721			$	1,721	$	1,411			$	1,411
Shares
Weighted average		242,316				242,316		254,879				254,879
Common stock equivalents				3,248		3,248				4,034		4,034
Total shares		242,316		3,248		245,564		254,879		4,034		258,913
EPS	$	7.10	$	(0.09)	$	7.01	$	5.54	$	(0.09)	$	5.45

Antidilutive Options Table

	Three Months Ended		Six Months Ended
	June 30,		June 30,
(In millions)	2018	2017	2018	2017
Anti-dilutive options	0.9	1.2	0.9	1.9

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Debt (Tables)

6 Months Ended

Jun. 30, 2018

Debt [Table] [Abstract]

Short-term and Long-term Debt

	June 30,		December 31,
(In millions)	2018		2017
Short-term
Commercial paper	$	100	$	100
Current maturities of long-term debt		-		131
Other, including capital leases		9		9
Total short-term debt	$	109	$	240
Long-term
$250 million, 4.375% Notes due 2020	$	247	$	249
$300 million, 5.125% Notes due 2020		297		299
$78 million, 6.37% Notes due 2021		78		78
$300 million, 4.5% Notes due 2021		296		299
$750 million, 4% Notes due 2022		746		745
$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		894
$600 million, 3.05% Notes due 2027		594		594
$259 million, 7.875% Debentures due 2027		258		258
$45 million, 8.3% Step Down Notes due 2033		45		45
$191 million, 6.15% Notes due 2036		190		190
$121 million, 5.875% Notes due 2041		119		119
$317 million, 5.375% Notes due 2042		315		315
$1,000 million, 3.875% Notes due 2047		988		988
Other, including capital leases		11		9
Total long-term debt	$	5,195	$	5,199

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Global Health Care Medical Costs Payable (Tables) - Global Health Benefits Segment [Member]

6 Months Ended

Jun. 30, 2018

Liability For Unpaid Claims And Claims Adjustment Expense [Line Items]

Activity in medical costs payable

	Six Months Ended
	June 30,		June 30,
(In millions)	2018		2017
Beginning balance	$	2,719	$	2,532
Less: Reinsurance and other amounts recoverable		265		275
Beginning balance, net		2,454		2,257
Incurred costs related to:
Current year		10,906		10,077
Prior years		(168)		(238)
Total incurred		10,738		9,839
Paid costs related to:
Current year		8,557		7,823
Prior years		1,873		1,684
Total paid		10,430		9,507
Ending balance, net		2,762		2,589
Add: Reinsurance and other amounts recoverable		243		259
Ending balance	$	3,005	$	2,848

Variances in incurred costs related to prior years' medical costs payable

	Six Months Ended
(Dollars in millions)	June 30, 2018			June 30, 2017
		$	%(1)			$	%(2)
Actual completion factors	$	93	0.5	%	$	108	0.6	%
Medical cost trend		66	0.3			121	0.6
Other		9	-			9	-
Total favorable (unfavorable) variance	$	168	0.8	%	$	238	1.2	%
(1) Percentage of current year incurred costs as reported for the year ended December 31, 2017.
(2) Percentage of current year incurred costs as reported for the year ended December 31, 2016.

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Liabilities for Unpaid Claims and Claims Expenses (Tables)

6 Months Ended

Jun. 30, 2018

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)	June 30, 2018		June 30, 2017
Group Disability and Life	$	4,573	$	4,400
Global Supplemental Benefits		480		452
Other Operations		193		187
Unpaid claims and claim expenses	$	5,246	$	5,039

Group Disability and Life and Global Supplemental Benefits [Member]

Liability For Unpaid Claims And Claims Adjustment Expense [Line Items]

Liability balance details

	Six Months Ended
(In millions)	June 30, 2018		June 30, 2017
Beginning balance	$	4,975	$	4,726
Less: Reinsurance		137		121
Beginning balance, net		4,838		4,605
Incurred claims related to:
Current year		2,382		2,224
Prior years:
Interest accretion		77		83
All other incurred		(66)		(71)
Total incurred		2,393		2,236
Paid claims related to:
Current year		1,204		1,074
Prior years		1,101		1,058
Total paid		2,305		2,132
Foreign currency		(14)		13
Ending balance, net		4,912		4,722
Add: Reinsurance		141		130
Ending balance	$	5,053	$	4,852

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Reinsurance (Tables)

6 Months Ended

Jun. 30, 2018

Effects Of Reinsurance [Line Items]

Components of reinsurance recoverables

(In millions)
			June 30,		December 31,		Collateral and Other Terms
Line of Business		Reinsurer(s)	2018		2017		at June 30, 2018
Ongoing operations
	Global Health Care, Global Supplemental Benefits, Group Disability and Life, COLI	Various	$	447	$	454	Recoverables from approximately 85 reinsurers, used in the ordinary course of business. Current balances range from less than $1 million up to $70 million. Over 70% of the balance is from companies rated as investment grade by Standard & Poor's, and 12% is secured by assets in trusts or letters of credit.
	Total recoverables related to ongoing operations			447		454
Acquisition, disposition or runoff activities
	Individual Life and Annuity (sold in 1998)	Lincoln National Life and Lincoln Life & Annuity of New York		3,361		3,436	Both companies' ratings are sufficient to avoid triggering a contractual obligation to fully secure the outstanding balance.
	GMDB	Berkshire		889		928	100% secured by assets in a trust.
		Other		33		34	100% secured by assets in a trust or letters of credit.
	Retirement Benefits Business (sold in 2004)	Prudential Retirement Insurance and Annuity		819		850	100% secured by assets in a trust.
	Supplemental Benefits Business (2012 acquisition)	Great American Life		272		283	100% secured by assets in a trust.
	Other run-off reinsurance	Various		56		61	100% secured by assets in trusts.
	Total recoverables related to acquisition, disposition or runoff activities			5,430		5,592
Total reinsurance recoverables			$	5,877	$	6,046

Effects of Reinsurance

	Three Months Ended				Six Months Ended
(In millions)	June 30, 2018		June 30, 2017		June 30, 2018		June 30, 2017
Ceded premiums
Individual life insurance and annuity business sold	$	34	$	33	$	71	$	72
Other		98		54		196		135
Total ceded premiums	$	132	$	87	$	267	$	207
Reinsurance recoveries
Individual life insurance and annuity business sold	$	56	$	66	$	113	$	136
Other		-		17		47		46
Total reinsurance recoveries	$	56	$	83	$	160	$	182

Variable Annuity [Member] | Guaranteed Minimum Death Benefit [Member]

Effects Of Reinsurance [Line Items]

Account value, net amount at risk and number of contractholders

(Dollars in millions, excludes impact of reinsurance ceded)	June 30, 2018		December 31, 2017
Account value	$	9,667	$	10,109
Net amount at risk	$	2,044	$	2,112
Number of contractholders		230,000		245,000

Variable Annuity [Member] | Guaranteed Minimum Income Benefit [Member]

Effects Of Reinsurance [Line Items]

Components of reinsurance recoverables

(In millions)
		June 30,		December 31,		Collateral and Other Terms
Line of Business	Reinsurer	2018		2017		at June 30, 2018
GMIB	Berkshire	$	320	$	359	100% secured by assets in a trust.
	Sun Life Assurance Company of Canada		191		221
	Liberty Re (Bermuda) Ltd.		173		197	100% secured by assets in a trust.
Total GMIB recoverables reported in other assets		$	684	$	777

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Financial assets and liabilities carried at fair value

(In millions)	Quoted Prices in Active Markets for Identical Assets(Level 1)				Significant Other Observable Inputs(Level 2)				Significant Unobservable Inputs(Level 3)				Total
	As of June 30, 2018		As of December 31, 2017		As of June 30, 2018		As of December 31, 2017		As of June 30, 2018		As of December 31, 2017		As of June 30, 2018		As of December 31, 2017
Financial assets at fair value
Fixed maturities
Federal government and agency	$	271	$	253	$	509	$	526	$	-	$	-	$	780	$	779
State and local government		-		-		1,045		1,287		-		-		1,045		1,287
Foreign government		-		-		2,411		2,442		44		45		2,455		2,487
Corporate		-		-		18,478		17,658		307		430		18,785		18,088
Mortgage and other asset-backed		-		-		384		343		144		154		528		497
Total fixed maturities		271		253		22,827		22,256		495		629		23,593		23,138
Equity securities (1)		391		412		68		73		33		103		492		588
Subtotal		662		665		22,895		22,329		528		732		24,085		23,726
Short-term investments		-		-		220		199		-		-		220		199
GMIB assets		-		-		-		-		684		777		684		777
Other derivative assets		-		-		32		2		-		-		32		2
Total financial assets at fair value, excluding separate accounts and real estate funds	$	662	$	665	$	23,147	$	22,530	$	1,212	$	1,509	$	25,021	$	24,704
Real estate funds priced at NAV as a practical expedient (2)														263		N/A
Financial liabilities at fair value
GMIB liabilities	$	-	$	-	$	-	$	-	$	653	$	762	$	653	$	762
Other derivative liabilities		-		-		54		25		-		-		54		25
Total financial liabilities at fair value, excluding separate accounts	$	-	$	-	$	54	$	25	$	653	$	762	$	707	$	787
(1) Beginning in 2018, certain private equity securities are no longer carried at fair value under the policy election of ASU 2016-01 (Recognition and Measurement of Financial Assets and Financial Liabilities). As of December 31, 2017, private equity securities of $70 million were included in the Level 3 amount. See Note 10 for additional information on this accounting policy change.
(2) Beginning in 2018 upon adopting ASU 2016-01, certain real estate funds are carried at fair value (previously carried at cost) based on the Company's ownership share of the equity of the investee (Net Asset Value ("NAV") as a practical expedient) including changes in the fair value of its underlying investments. The funds have a quarterly redemption frequency, 45-90 day redemption notice period and $65 million in unfunded commitments as of June 30, 2018. See Note 10 for additional information on this accounting policy change. Prior periods are designated as not applicable ("N/A") in this table.

Level 3 fixed maturities and equity securities priced using significant unobservable inputs

	Fair Value as of				Unobservable Input	Unobservable AdjustmentRange (Weighted Average) as of
(Fair value in millions )	June 30, 2018		December 31, 2017			June 30, 2018	December 31, 2017
Fixed maturities
Mortgage and other asset-backed	$	144	$	154	Liquidity	60 - 350 (80) bps	60 - 370 (90) bps
securities					Weighting of credit spreads	190 - 300 (240) bps	180 - 290 (230) bps
Corporate and government fixed maturities		333		446	Liquidity	80 - 930 (240) bps	70 - 1,650 (300) bps
Total fixed maturities		477		600
Equity securities
Private equity securities (1)		N/A		70	Price-to-EBITDA multiples	N/A	5.0 - 12.0 (8.9)
Hybrid equity securities		33		33	Liquidity	230 bps (3)	270 bps (3)
Total equity securities		33		103
Subtotal		510		703
Securities not priced by the Company (2)		18		29
Total Level 3 securities	$	528	$	732
(1) Beginning in 2018, private equity securities are no longer carried at fair value under the policy election of ASU 2016-01 (Recognition and Measurement of Financial Assets and Financial Liabilities). Current periods are designated as N/A in this table.
(2) The fair values for these securities use single, unadjusted non-binding broker quotes not developed directly by the Company.
(3) The range and weighted average is equivalent for this security type.

Changes in level 3 financial assets and liabilities carried at fair value

(In millions)	Fixed Maturities & Equity Securities				GMIB Assets				GMIB Liabilities
	2018		2017		2018		2017		2018		2017
Balance at April 1,	$	596	$	727	$	717	$	777	$	(682)	$	(761)
Gains (losses) included in shareholders' net income
GMIB fair value gain/(loss)		-		-		(27)		15		27		(15)
Other		(1)		1		1		-		(5)		(3)
Total gains (losses) included in shareholders' net income		(1)		1		(26)		15		22		(18)
Gains (losses) included in other comprehensive income		(5)		5		-		-		-		-
Gains (losses) required to adjust future policy benefits for settlement annuities (1)		(2)		9		-		-		-		-
Purchases, sales, settlements
Purchases		6		65		-		-		-		-
Sales		-		(23)		-		-		-		-
Settlements		(13)		(12)		(7)		(15)		7		15
Total purchases, sales and settlements		(7)		30		(7)		(15)		7		15
Transfers into/(out of) Level 3
Transfers into Level 3		-		36		-		-		-		-
Transfers out of Level 3		(53)		(57)		-		-		-		-
Total transfers into/(out of) Level 3		(53)		(21)		-		-		-		-
Balance at June 30,	$	528	$	751	$	684	$	777	$	(653)	$	(764)
Total gains (losses) included in shareholders' net income attributable to instruments held at the reporting date	$	(1)	$	-	$	(26)	$	15	$	22	$	(18)

(In millions)	Fixed Maturities & Equity Securities				GMIB Assets				GMIB Liabilities
	2018		2017		2018		2017		2018		2017
Balance at January 1,	$	732	$	776	$	777	$	799	$	(762)	$	(780)
Gains (losses) included in shareholders' net income
GMIB fair value gain (loss)		-		-		(67)		4		69		(4)
Other		(21)		24		(2)		1		11		(7)
Total gains (losses) included in shareholders' net income		(21)		24		(69)		5		80		(11)
Losses included in other comprehensive income		(10)		(3)		-		-		-		-
Gains (losses) required to adjust future policy benefits for settlement annuities (1)		(6)		9		-		-		-		-
Purchases, sales, settlements
Purchases		16		90		-		-		-		-
Sales		(11)		(70)		-		-		-		-
Settlements		(15)		(39)		(24)		(27)		29		27
Total purchases, sales and settlements		(10)		(19)		(24)		(27)		29		27
Transfers into/(out of) Level 3
Transfers into Level 3		20		76		-		-		-		-
Transfers out of Level 3 (2)		(177)		(112)		-		-		-		-
Total transfers into/(out of) Level 3		(157)		(36)		-		-		-		-
Balance at June 30,	$	528	$	751	$	684	$	777	$	(653)	$	(764)
Total gains (losses) included in shareholders' net income attributable to instruments held at the reporting date	$	(8)	$	(6)	$	(69)	$	5	$	80	$	(11)
(1) Amounts do not accrue to shareholders.
(2) Beginning in 2018, certain private equity securities are no longer carried at fair value under the policy election of ASU 2016-01 (Recognition and Measurement of Financial Assets and Financial Liabilities). $70 million in private equity securities as of December 31, 2017 are included in the June 30, 2018 Transfers out of Level 3 amount.

Separate account assets schedule

(In millions)	Quoted Prices in Active Markets for Identical Assets(Level 1)				Significant Other Observable Inputs(Level 2)				Significant Unobservable Inputs(Level 3)				Total
	June		December		June		December		June		December		June		December
	30,		31,		30,		31,		30,		31,		30,		31,
	2018		2017		2018		2017		2018		2017		2018		2017
Guaranteed separate accounts (see Note 16)	$	208	$	215	$	299	$	308	$	-	$	-	$	507	$	523
Non-guaranteed separate accounts (1)		1,392		1,536		5,356		5,298		256		292		7,004		7,126
Subtotal	$	1,600	$	1,751	$	5,655	$	5,606	$	256	$	292		7,511		7,649
Non-guaranteed separate accounts priced at NAV as a practical expedient (1)														776		774
Total separate account assets													$	8,287	$	8,423
(1) Non-guaranteed separate accounts included $3.9 billion as of June 30, 2018 and December 31, 2017 in assets supporting the Company's pension plans, including $0.2 billion classified in Level 3 as of June 30, 2018 and $0.3 billion classified in Level 3 as of December 31, 2017.

Changes in level 3 separate account assets

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In millions)	2018		2017		2018		2017
Balance, beginning of period	$	262	$	330	$	292	$	331
Policyholder (losses) gains		(2)		10		43		37
Purchases, sales and settlements
Purchases		4		7		12		17
Sales		-		(17)		(72)		(52)
Settlements		(8)		-		(12)		(1)
Total purchases, sales and settlements		(4)		(10)		(72)		(36)
Transfers into (out of) Level 3
Transfers into Level 3		-		1		-		1
Transfers out of Level 3		-		(15)		(7)		(17)
Total transfers into (out of) Level 3		-		(14)		(7)		(16)
Balance, end of period	$	256	$	316	$	256	$	316

Separate account assets priced at net asset value

	Fair Value as of				Unfunded Commitments as of June 30, 2018		Data as of June 30, 2018 and December 31, 2017
(In millions)	June 30, 2018		December 31, 2017				Redemption Frequency (if currently eligible)	Redemption Notice Period
Securities Partnerships	$	485	$	458	$	302	Not applicable	Not applicable
Real Estate Funds		247		239		-	Quarterly	45-90 days
Hedge Funds		44		77		-	Up to Annually, varying by fund	30-90 days
Total	$	776	$	774	$	302

Financial instruments not carried at fair value

			June 30, 2018				December 31, 2017
(In millions)	Classification in the Fair Value Hierarchy		Fair Value		Carrying Value		Fair Value		Carrying Value
Commercial mortgage loans	Level 3	$	1,839	$	1,866	$	1,766	$	1,761
Long-term debt, including current maturities, excluding capital leases	Level 2	$	5,201	$	5,184	$	5,730	$	5,321

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Investments (Tables)

6 Months Ended

Jun. 30, 2018

Investment [Line Items]

Schedule of short-term investments and cash equivalents

		June 30,		December 31,
(In millions)		2018		2017
Corporate securities	$	1,663	$	1,143
Federal government securities	$	621	$	604
Foreign government securities	$	161	$	159
Money market funds	$	10	$	12

Realized gains and losses on investments

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In millions)	2018		2017		2018		2017
Fixed maturities	$	(26)	$	14	$	(46)	$	16
Equity securities		(7)		1		(26)		34
Commercial mortgage loans		-		(1)		-		(1)
Other investments, including derivatives		30		37		36		48
Realized investment (losses) gains before income taxes		(3)		51		(36)		97
Less income tax (benefit) expense		(1)		17		(11)		32
Net realized investment (losses) gains	$	(2)	$	34	$	(25)	$	65

Sales information for available-for-sale fixed maturities and equity securities

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In millions)	2018		2017		2018		2017
Proceeds from sales	$	774	$	516	$	1,273	$	930
Gross gains on sales	$	13	$	12	$	18	$	59
Gross losses on sales	$	(7)	$	(2)	$	(29)	$	(4)

Fixed Maturities [Member]

Investment [Line Items]

Investment maturities

		Amortized		Fair
(In millions)		Cost		Value
Due in one year or less	$	1,561	$	1,569
Due after one year through five years		6,678		6,760
Due after five years through ten years		10,430		10,242
Due after ten years		3,935		4,494
Mortgage and other asset-backed securities		519		528
Total fixed maturities	$	23,123	$	23,593

Gross unrealized appreciation (depreciation) on fixed maturities

				Gross		Gross
				Unrealized		Unrealized
		Amortized		Appre-		Depre-		Fair
(In millions)		Cost		ciation		ciation		Value
As of June 30, 2018
Federal government and agency	$	575	$	209	$	(4)	$	780
State and local government		978		69		(2)		1,045
Foreign government		2,354		120		(19)		2,455
Corporate		18,697		473		(385)		18,785
Mortgage and other asset-backed		519		19		(10)		528
Total fixed maturities	$	23,123	$	890	$	(420)	$	23,593
Investments supporting liabilities of the Company's run-off settlement annuity business (included in above total) (1)	$	2,282	$	525	$	(25)	$	2,782
As of 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 fixed maturities	$	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
(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

	June 30, 2018							December 31, 2017
	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	$	9,283	$	9,566	$	(283)	1,944	$	3,272	$	3,309	$	(37)	797
Below investment grade	$	1,285	$	1,318	$	(33)	1,157	$	543	$	553	$	(10)	643
More than one year
Investment grade	$	1,759	$	1,852	$	(93)	470	$	1,503	$	1,549	$	(46)	373
Below investment grade	$	147	$	158	$	(11)	55	$	155	$	162	$	(7)	42

Commercial Mortgage Loans [Member]

Investment [Line Items]

Credit risk profile of commercial mortgage loan portfolio

(Dollars in millions)	As of June 30, 2018				As of December 31, 2017
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%	$	1,195	2.02		$	1,109	2.03
60% to 79%		595	1.95			652	2.24
80% to 100%		76	1.49			-	-
Total	$	1,866	1.97	57%	$	1,761	2.11	57%

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Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2018

Designated as Hedging Instrument [Member] | Net Investment Hedge [Member] | Foreign Currency Swaps [Member]

Derivative [Line Items]

Schedule of derivative instruments

Net Investment Hedge of Certain International Subsidiaries	Notional Value (in millions)
Type of instrument. Foreign currency swap contracts	June 30, 2018		December 31, 2017
	$	439	$	-
Purpose. During the first quarter of 2018, the Company entered into fixed-for-fixed currency swaps to reduce the risk of changes in net assets due to changes in foreign currency spot exchange rates for certain foreign subsidiaries that conduct their business principally in Euros.
Terms of derivative instruments. The Company receives fixed rate U.S. dollar coupon and principal payments, and pays fixed rate coupon and principal payments denominated in the functional currency of the hedged foreign subsidiary. The notional value of hedging instruments matches the hedged amount of subsidiary net assets. Foreign currency swaps are denominated in Euros.
Accounting. As a net investment hedge, the fair values of the swap contracts are reported in other assets, including other intangibles, or in accounts payable, accrued expenses, and other liabilities. The changes in fair values of these instruments are reported in other comprehensive income, specifically in translation of foreign currencies. The portion of the change in swap fair values relating to foreign exchange spot rates will be recognized in earnings upon deconsolidation of the hedged foreign subsidiaries. The remaining changes in swap fair value are excluded from the effectiveness assessment and recognized in other operating expenses as swap coupon payments are accrued.

Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Foreign Currency Swaps [Member]

Derivative [Line Items]

Schedule of derivative instruments

Cash Flow Hedges of Benchmark Interest Rates on Expected Debt Issuances	Notional Value (in millions)
Type of instrument. Swaptions	June 30, 2018		December 31, 2017
	$	2,050	$	-
Purpose. To hedge the benchmark interest rates on forecasted coupon cash flows on debt issuances expected later in 2018.
Terms of derivative instruments. There is no upfront premium paid or received, and the instruments contain upper and lower threshold strike rates based on the benchmark interest rate. These instruments provide offsetting economic benefits when the Company receives cash at settlement as rates rise above the upper threshold, and offsetting economic losses when the Company must pay cash at settlement as rates decline below the lower threshold. The notional value of these derivatives matches the par value of the hedged debt issuance.
Accounting. Using cash flow hedge accounting, the fair values of these instruments are reported in other assets, including other intangibles, or accounts payable, accrued expenses, and other liabilities. Changes in fair value are reported in accumulated other comprehensive income ("AOCI"). Upon issuance of the debt, any cumulative gain or loss on these contracts will begin amortizing to interest expense over the life of the hedged debt.

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	June 30, 2018		December 31, 2017
	$	478	$	318
Purpose. To hedge the foreign exchange related changes in fair values of certain fixed maturity foreign-denominated bonds.
Terms of derivative instruments. The Company periodically exchanges cash flows between two currencies for both principal and interest. Foreign currency swaps are Euros, British pounds and Australian dollars, and have terms for periods of up to thirty years. The notional value of these derivatives matches the amortized cost of the hedged bonds.
Accounting. Using fair value hedge accounting, swap fair values are reported in other long-term investments or in accounts payable, accrued expenses and other liabilities. Changes in fair values attributable to foreign exchange risk of the swap contracts and the hedged bonds are reported in other realized investment gains and losses. The portion of the swap contracts' changes in fair value excluded from the assessment of hedge effectiveness is recorded in accumulated other comprehensive income and recognized in net investment income as swap coupon payments are accrued, offsetting the foreign denominated coupons received on the designated bonds. Prior to adopting ASU 2017-12, changes in fair value of excluded components of the swap contracts were recognized immediately in realized investment gains and losses.

Non designated [Member] | Swaption [Member]

Derivative [Line Items]

Schedule of derivative instruments

Economic Hedges of Benchmark Interest Rates on Expected Debt Issuances	Notional Value (in millions)
Type of instrument. Swaptions	June 30, 2018		December 31, 2017
	$	3,550	$	-
Purpose. To hedge the benchmark interest rates on forecasted coupon cash flows on debt issuances to be used primarily to finance a portion of the proposed acquisition of Express Scripts expected later in 2018.
Terms of derivative instruments. There is no upfront premium paid or received, and the instruments contain upper and lower threshold strike rates based on the benchmark interest rate. These instruments provide offsetting economic benefits when the Company receives cash at settlement as rates rise above the upper threshold, and offsetting economic losses when the Company must pay cash at settlement as rates decline below the lower threshold.
Accounting. Hedge accounting has not been designated for these instruments. The fair values of the swaption contracts are reported in other assets, including other intangibles, or accounts payable, accrued expenses, and other liabilities. Changes in fair value and settlements are reported in interest expense.

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	June 30, 2018		December 31, 2017
	$	309	$	255
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 the Company's foreign subsidiary in South Korea.
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. The notional value of hedging instruments generally aligns with the fair value of the hedged bond portfolio.
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.

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Accumulated Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Jun. 30, 2018

Accumulated Other Comprehensive Income (Loss) [Abstract]

Changes in accumulated other comprehensive income (loss)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In millions)	2018		2017		2018		2017
Securities
Beginning balance	$	110	$	369	$	328	$	362
Reclassification adjustment to retained earnings related to U.S. tax reform legislation (1)		-		-		65		-
Reclassification adjustment to retained earnings related to new financial instruments guidance (1)		-		-		(4)		-
Adjusted beginning balance		110		369		389		362
(Depreciation) appreciation on securities		(176)		115		(555)		168
Tax benefit (expense)		37		(38)		113		(62)
Net (depreciation) appreciation on securities		(139)		77		(442)		106
Reclassification adjustment for losses (gains) included in shareholders' net income (net realized investment gains)		(2)		(15)		28		(50)
Tax (expense) benefit		-		5		(6)		18
Net losses (gains) reclassified from AOCI to net income		(2)		(10)		22		(32)
Other comprehensive (loss) income, net of tax		(141)		67		(420)		74
Ending balance	$	(31)	$	436	$	(31)	$	436
Derivatives
Beginning balance	$	(11)	$	-	$	-	$	3
Reclassification adjustment from retained earnings related to new hedging guidance (1)		-		-		(6)		-
Adjusted beginning balance		(11)		-		(6)		3
(Depreciation) on derivatives		(10)		-		(16)		-
Tax benefit		2		-		3		-
Net (depreciation) on derivatives		(8)		-		(13)		-
Reclassification adjustment for (gains) included in shareholders' net income (net realized investment gains)		-		-		-		(4)
Tax benefit		-		-		-		1
Net (gains) reclassified from AOCI to net income		-		-		-		(3)
Other comprehensive (loss), net of tax		(8)		-		(13)		(3)
Ending balance	$	(19)	$	-	$	(19)	$	-
Translation of foreign currencies
Beginning balance	$	(24)	$	(257)	$	(65)	$	(369)
Reclassification adjustment to retained earnings related to U.S. tax reform legislation (1)		-		-		(4)		-
Adjusted beginning balance		(24)		(257)		(69)		(369)
Translation of foreign currencies		(151)		30		(105)		141
Tax (expense) benefit		(1)		(3)		(2)		(2)
Net translation of foreign currencies		(152)		27		(107)		139
Ending balance	$	(176)	$	(230)	$	(176)	$	(230)
(1) See Note 2 for further information about adjustments resulting from the Company's adoption of new accounting standards in 2018.
	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In millions)	2018		2017		2018		2017
Postretirement benefits liability
Beginning balance	$	(1,622)	$	(1,364)	$	(1,345)	$	(1,378)
Reclassification adjustment to retained earnings related to U.S. tax reform legislation (1)		-		-		(290)		-
Adjusted beginning balance		(1,622)		(1,364)		(1,635)		(1,378)
Reclassification adjustment for amortization of net losses from past experience and prior service costs (other operating expenses)		17		17		34		32
Reclassification adjustment for settlement (other operating expenses)		-		-		-		6
Tax (expense)		(3)		(7)		(7)		(14)
Net adjustments reclassified from AOCI to net income		14		10		27		24
Valuation update		(12)		2		(12)		2
Tax benefit (expense)		3		-		3		-
Net change due to valuation update		(9)		2		(9)		2
Other comprehensive income, net of tax		5		12		18		26
Ending balance	$	(1,617)	$	(1,352)	$	(1,617)	$	(1,352)
(1) See Note 2 for further information about adjustments resulting from the Company's adoption of new accounting standards in 2018.

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Pension and Other Postretirement Benefit Plans (Tables)

6 Months Ended

Jun. 30, 2018

Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]

Components of net defined benefit plan costs

	Pension Benefits								Other Postretirement Benefits
	Three Months Ended				Six Months Ended				Three Months Ended				Six Months Ended
	June 30,				June 30,				June 30,				June 30,
(In millions)	2018		2017		2018		2017		2018		2017		2018		2017
Service cost	$	-	$	1	$	1	$	1	$	-	$	-	$	-	$	-
Interest cost		42		45		84		93		2		2		4		5
Expected long-term return on plan assets		(64)		(64)		(128)		(129)		-		-		-		-
Amortization of:
Net loss from past experience		18		17		35		33		-		-		-		-
Prior service cost		-		-		-		-		(1)		-		(1)		(1)
Settlement loss		-		-		-		6		-		-		-		-
Net cost	$	(4)	$	(1)	$	(8)	$	4	$	1	$	2	$	3	$	4

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2018

Segment Information [Abstract]

Special item charges

	Three Months Ended
	June 30, 2018				June 30, 2017
(In millions)	Before-tax		After-tax		Before-tax		After-tax
Transaction-related costs - see Note 3	$	130	$	109	$	16	$	(47)
Total impact from special items	$	130	$	109	$	16	$	(47)
	Six Months Ended
	June 30, 2018				June 30, 2017
	Before-tax		After-tax		Before-tax		After-tax
Transaction-related costs - see Note 3	$	190	$	159	$	79	$	2
Long-term care guaranty fund assessment - see Note 16(D)		-		-		129		83
Total impact from special items	$	190	$	159	$	208	$	85

Summarized segment financial information

(In millions)	Global Health Care		Global Supplemental Benefits		Group Disability and Life		Other Operations		Corporate		Total
Three Months Ended June 30, 2018
Premiums, fees and other revenues and mail order pharmacy revenues (1)	$	9,025	$	1,050	$	1,031	$	33	$	(11)	$	11,128
Net investment income		125		36		96		88		7		352
Less net realized investment (losses) from equity method subsidiaries (2)		-		(20)		-		-		-		(20)
Operating revenues	$	9,150	$	1,106	$	1,127	$	121	$	(4)	$	11,500
Total revenues	$	9,155	$	1,075	$	1,132	$	119	$	(4)	$	11,477
Shareholders' net income (loss)	$	780	$	86	$	107	$	19	$	(186)	$	806
After-tax adjustments to reconcile to adjusted income from operations
Net realized investment (gains) losses (2)		(4)		27		(4)		2		1		22
Amortization of other acquired intangible assets, net		13		5		-		-		-		18
Special item
Transaction-related costs		-		-		-		-		109		109
Adjusted income (loss) from operations	$	789	$	118	$	103	$	21	$	(76)	$	955
Three Months Ended June 30, 2017
Premiums, fees and other revenues and mail order pharmacy revenues (1)	$	8,100	$	924	$	1,023	$	30	$	(11)	$	10,066
Net investment income		92		31		89		88		8		308
Operating revenues	$	8,192	$	955	$	1,112	$	118	$	(3)	$	10,374
Total revenues	$	8,224	$	954	$	1,134	$	116	$	(3)	$	10,425
Shareholders' net income (loss)	$	599	$	101	$	97	$	17	$	(1)	$	813
After-tax adjustments to reconcile to adjusted income from operations
Net realized investment (gains) losses		(22)		-		(14)		2		-		(34)
Amortization of other acquired intangible assets, net		14		4		-		-		-		18
Special items
Transaction-related costs		-		-		-		-		(47)		(47)
Adjusted income (loss) from operations	$	591	$	105	$	83	$	19	$	(48)	$	750
(1) Includes the Company's share of the earnings of its joint ventures in China and India in the Global Supplemental Benefits segment.
(2) Beginning in 2018, the Company's share of the realized investment results of equity method joint ventures in the Global Supplemental Benefits segment (reported in other revenues) is excluded from operating revenues and adjusted income from operations.

(In millions)	Global Health Care		Global Supplemental Benefits		Group Disability and Life		Other Operations		Corporate		Total
Six Months Ended June 30, 2018
Premiums, fees and other revenues and mail order pharmacy revenues (1)	$	17,999	$	2,116	$	2,057	$	64	$	(24)	$	22,212
Net investment income		240		70		186		173		12		681
Less net realized investment (losses) on equity method subsidiaries (2)		-		(22)		-		-		-		(22)
Operating revenues	$	18,239	$	2,208	$	2,243	$	237	$	(12)	$	22,915
Total revenues	$	18,224	$	2,175	$	2,232	$	239	$	(13)	$	22,857
Shareholders' net income (loss)	$	1,622	$	191	$	161	$	48	$	(301)	$	1,721
After-tax adjustments to reconcile to adjusted income from operations
Net realized investment losses (gains) (2)		11		28		9		(3)		2		47
Amortization of other acquired intangible assets		27		11		-		-		-		38
Special item
Transaction-related costs		-		-		-		-		159		159
Adjusted income (loss) from operations	$	1,660	$	230	$	170	$	45	$	(140)	$	1,965
Six Months Ended June 30, 2017
Premiums, fees and other revenues and mail order pharmacy revenues (1)	$	16,295	$	1,805	$	2,055	$	60	$	(24)	$	20,191
Net investment income		184		59		178		174		16		611
Operating revenues	$	16,479	$	1,864	$	2,233	$	234	$	(8)	$	20,802
Total revenues	$	16,537	$	1,876	$	2,263	$	231	$	(8)	$	20,899
Shareholders' net income (loss)	$	1,143	$	178	$	156	$	37	$	(103)	$	1,411
After-tax adjustments to reconcile to adjusted income from operations
Net realized investment (gains) losses		(38)		(9)		(20)		2		-		(65)
Amortization of other acquired intangible assets		28		10		-		-		-		38
Special items
Transaction-related costs		-		-		-		-		2		2
Long-term care guaranty fund assessment		68		-		15		-		-		83
Total special items		68		-		15		-		2		85
Adjusted income (loss) from operations	$	1,201	$	179	$	151	$	39	$	(101)	$	1,469
(1) Includes the Company's share of the earnings of its joint ventures in China and India in the Global Supplemental Benefits segment.
(2) Beginning in 2018, the Company's share of the realized investment results of equity method joint ventures in the Global Supplemental Benefits segment (reported in other revenues) is excluded from operating revenues and adjusted income from operations.

Revenue from external customers

(In millions)	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Premiums by product (ASC 944 - insurance activities)
Global Health Care
Commercial
Guaranteed cost	$	2,046	$	1,522	$	4,045	$	3,065
Experience-rated		736		727		1,475		1,454
Stop loss		993		856		1,973		1,708
International health care		515		479		1,028		954
Dental		482		441		961		882
Other		259		243		517		489
Government
Medicare		1,461		1,389		2,959		2,850
Medicaid		243		273		478		553
Medicare Part D		189		198		417		432
Total Global Health Care		6,924		6,128		13,853		12,387
Disability		510		491		1,015		992
Life, Accident and Supplemental Health		1,551		1,413		3,090		2,780
Total premiums from ongoing operations		8,985		8,032		17,958		16,159
Fees (ASC 606 - service activities)
Global Health Care		1,333		1,213		2,659		2,433
Global Supplemental Benefits		8		7		15		12
Group Disability and Life		25		25		50		52
Total fees from ongoing operations		1,366		1,245		2,724		2,497
Mail order pharmacy (ASC 606 - service activities)		758		757		1,475		1,467
Other		19		32		55		68
Total revenues from external customers	$	11,128	$	10,066	$	22,212	$	20,191

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Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) $ in Millions		6 Months Ended
		Jun. 30, 2018	Jan. 01, 2018	Dec. 31, 2017	Dec. 31, 2016
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Cumulative effect on equity in period of adoption	[1]		$ 58
Accounting Standards Update 2014-09 [Member] | Retained Earnings [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Cumulative effect on equity, retrospective adjustment					$ (24)
Accounting Standards Update 2016-01 [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Carrying value of certain limited partnership interests			275	$ 200
Accounting Standards Update 2016-01 [Member] | Retained Earnings [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Cumulative effect on equity in period of adoption			62
Accounting Standards Update 2017-12 [Member] | Retained Earnings [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Cumulative effect on equity in period of adoption
Accounting Standards Update 2017-12 [Member] | Accumulated Other Comprehensive Income [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Cumulative effect on equity in period of adoption
Accounting Standards Update 2018-02 [Member] | Retained Earnings [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Cumulative effect on equity in period of adoption			229
Accounting Standards Update 2018-02 [Member] | Accumulated Other Comprehensive Income [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Cumulative effect on equity in period of adoption			$ (229)
Accounting Standards Update 2016-02 [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Material effect on Company's financial statements		Yes

[1] See Note 2 for further information about adjustments resulting from the Company's adoption of new accounting standards in 2018.

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Summary of Significant Accounting Policies - Significant Accounting Policies (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Contract with Customer, Asset and Liability [Abstract]
Allowance for doubtful accounts for receivables
Contract assets
Receivables, net	911		911		885
Contract liabilities	56		56		$ 54
Revenue recognized that was included in the contract liability balance at the beginning of the reporting period
Revenue recognized from performance obligations satisfied in prior periods
Performance Guarantee [Member]
Loss Contingencies [Line Items]
Amounts accrued for performance guarantees
Amounts paid for performance guarantees

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Mergers and Acquistions (Details) $ / shares in Units, $ in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2018 NZD ($) shares	Jun. 30, 2018 USD ($) $ / shares shares
Business Acquisition [Line Items]
Transaction-related costs, before tax	$ 130	$ 16	$ 190	$ 79
Transaction-related costs, after-tax	109	12	159	61
Tax (benefit) - previously non-deductible costs		(59)		(59)
Transaction-related costs, net	$ 109	$ (47)	$ 159	$ 2
Express Scripts Holding Company [Member]
Business Acquisition [Line Items]
Stock consideration per share | shares					0.2434	0.2434
Cash consideration per share | $ / shares						$ 48.75
Parent termination fee payable to Express Scripts						$ 1,600
Reciprocal termination fee payable to Company						1,600
Reverse termination fee payable to Express Scripts						2,100
OnePath Insurance [Member]
Business Acquisition [Line Items]
Merger consideration					$ 700	$ 470

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Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Earnings Per Share [Abstract]
Shareholders' net income	$ 806	$ 813	$ 1,721	$ 1,411
Shares:
Weighted average	242,453	254,087	242,316	254,879
Common stock equivalents	2,886	3,974	3,248	4,034
Total shares	245,339	258,061	245,564	258,913
EPS, basic	$ 3.32	$ 3.2	$ 7.1	$ 5.54
EPS, effect of dilution	(0.03)	(0.05)	(0.09)	(0.09)
EPS, diluted	$ 3.29	$ 3.15	$ 7.01	$ 5.45
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Common shares held in Treasury	52,800	43,300	52,800	43,300
Employee Stock Option [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive options	900	1,200	900	1,900

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Debt - Short-term and Long-term Debt (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Debt Instrument [Line Items]
Total short-term debt	$ 109		$ 240
Long-term debt, carrying value	5,195		5,199
Repayment of long-term debt	131	$ 250
Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Commercial paper	100		100
Current maturities of long-term debt	0		131
Other, including capital leases	9		9
Total short-term debt	109		240
Long-term debt, carrying value	5,195		5,199
$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	$ 247		$ 249
$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	$ 297		$ 299
$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	$ 296		$ 299
$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	$ 746		$ 745
$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		$ 894
$600 million, 3.05% Notes due 2027 | Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, face value	$ 600		$ 600
Long-term debt, stated interest rate	3.05%		3.05%
Long-term debt, carrying value	$ 594		$ 594
$259 million, 7.875% Debentures due 2027 [Member] | Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, face value	$ 259		$ 259
Long-term debt, stated interest rate	7.875%		7.875%
Long-term debt, carrying value	$ 258		$ 258
$45 million, 8.3% Step Down Notes due 2033 [Member] | Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, face value	$ 45		$ 45
Long-term debt, stated interest rate	8.30%		8.30%
Long-term debt, carrying value	$ 45		$ 45
$191 million, 6.15% Notes due 2036 [Member] | Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, face value	$ 191		$ 191
Long-term debt, stated interest rate	6.15%		6.15%
Long-term debt, carrying value	$ 190		$ 190
$121 million, 5.875% Notes due 2041 [Member] | Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, face value	$ 121		$ 121
Long-term debt, stated interest rate	5.875%		5.875%
Long-term debt, carrying value	$ 119		$ 119
$317 million, 5.375% Notes due 2042 [Member] | Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, face value	$ 317		$ 317
Long-term debt, stated interest rate	5.375%		5.375%
Long-term debt, carrying value	$ 315		$ 315
$1,000 million, 3.875% Notes due 2047 | Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, face value	$ 1,000		$ 1,000
Long-term debt, stated interest rate	3.875%		3.875%
Long-term debt, carrying value	$ 988		$ 988
Other, including capital leases [Member] | Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, carrying value	$ 11		$ 9

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Debt - Long-tem Debt Issued (Details) - USD ($) $ in Millions	Jun. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Amount net of discount and fees	$ 5,195	$ 5,199
Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Amount net of discount and fees	5,195	5,199
$600 million, 3.05% Notes due 2027 | Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, face value	$ 600	$ 600
Long-term debt, stated interest rate	3.05%	3.05%
Amount net of discount and fees	$ 594	$ 594
$1,000 million, 3.875% Notes due 2047 | Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, face value	$ 1,000	$ 1,000
Long-term debt, stated interest rate	3.875%	3.875%
Amount net of discount and fees	$ 988	$ 988

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Debt - Revolving Credit and Letter of Credit (Details) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2018 USD ($) Banks	Jun. 30, 2018 USD ($) Banks	Mar. 31, 2018 USD ($)
Bridge Loan [Member]
Line of Credit Facility [Line Items]
Number of participating banks | Banks	23	23
Credit agreement term		364 days
Maximum borrowing capacity	$ 23,700	$ 23,700	$ 26,700
Leverage ratio covenant	60.00%	60.00%
Fees incurred			$ 140
Fees paid		$ 111
Amortization of fees	$ 65	$ 85
Revolving Credit And Letter Of Credit Facility [Member]
Line of Credit Facility [Line Items]
Number of participating banks | Banks	23	23
Credit agreement term		5 years
Maximum borrowing capacity	$ 1,500	$ 1,500
Maximum borrowing capacity on or after the Merger	3,250	3,250
Amount by which credit facilty amount can be increased	$ 500	$ 500
Amount by which credit facilty term length can be increased		1 year
Leverage ratio covenant	50.00%	50.00%
Leverage ratio covenant post-Merger	60.00%	60.00%
Letter of Credit [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 500	$ 500
Maximum borrowing capacity on or after the Merger	$ 500	$ 500
Term Loan Credit Agreement [Member]
Line of Credit Facility [Line Items]
Number of participating banks | Banks	26	26
Credit agreement term		3 years
Aggregate principal amount	$ 3,000	$ 3,000
Leverage ratio covenant	60.00%	60.00%

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Common and Preferred Stock (Details) - $ / shares shares in Millions	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2017
Common: Par value $.25, 600,000,000 shares authorized
Treasury stock	52.8		43.3
Common Stock, par value and shares authorized
Common stock, par value per share	$ 0.25	$ 0.25
Common stock shares authorized	600.0	600.0

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Global Health Care Medical Costs Payable - Activity (Details) - Global Health Benefits Segment [Member] - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Medical Claims Payable Activity [Abstract]
Beginning balance, unpaid claims, gross	$ 2,719	$ 2,532
Less: Reinsurance and other amounts recoverable	265	275
Beginning balance, unpaid claims, net	2,454	2,257
Incurred claims related to:
Current year	10,906	10,077
Prior years	(168)	(238)
Total incurred	10,738	9,839
Paid claims related to:
Current year	8,557	7,823
Prior years	1,873	1,684
Total paid	10,430	9,507
Ending balance, unpaid claims, net	2,762	2,589
Add: Reinsurance and other amounts recoverable	243	259
Ending balance, unpaid claims, gross	3,005	2,848
Total of incurred but not reported liabilities plus expected claim development on reported claims, including reported claims in process	$ 2,900	$ 2,700

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Global Health Care Medical Costs Payable - Prior Year Development (Details) - Global Health Benefits Segment [Member] - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Abstract]
Variance (unfavorable) in incurred costs related to prior years' claims payable	$ 168	$ 238
Variance (unfavorable) in incurred costs related to prior years' claims payable, percentage	0.80%	1.20%
Net impact (unfavorable) of prior development on shareholders' net income	$ 66	$ 97
Completion Factors [Member]
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Abstract]
Variance (unfavorable) in incurred costs related to prior years' claims payable	$ 93	$ 108
Variance (unfavorable) in incurred costs related to prior years' claims payable, percentage	0.50%	0.60%
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	$ 66	$ 121
Variance (unfavorable) in incurred costs related to prior years' claims payable, percentage	0.30%	0.60%
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	$ 9
Variance (unfavorable) in incurred costs related to prior years' claims payable, percentage	0.00%	0.00%

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Global Health Care Medical Costs Payable - Unpaid Claims Development (Details) - Global Health Benefits Segment [Member] - USD ($) $ in Millions	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2017	Dec. 31, 2016
Claims Development [Line Items]
Liability for unpaid claims and claims expenses, net of reinsurance	$ 2,762	$ 2,454	$ 2,589	$ 2,257
Reinsurance recoverable on unpaid claims	243	265	259	275
Total liability for unpaid claims and claims expenses	$ 3,005	$ 2,719	$ 2,848	$ 2,532

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Liabilities for Unpaid Claims and Claims Expenses - Liability Balance Details (Details) - USD ($) $ in Millions	Jun. 30, 2018	Jun. 30, 2017
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	$ 5,246	$ 5,039
Group Disability And Life Segment [Member]
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items]
Total liability for unpaid claims and claims expenses	4,573	4,400
Global Supplemental Benefits Segment [Member]
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items]
Total liability for unpaid claims and claims expenses	480	452
Other Operations Segment [Member]
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items]
Total liability for unpaid claims and claims expenses	$ 193	$ 187

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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	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items]
Beginning balance, unpaid claims, gross	$ 4,975	$ 4,726
Less: Reinsurance and other amounts recoverable	137	121
Beginning balance, unpaid claims, net	4,838	4,605
Incurred claims related to:
Current year	2,382	2,224
Interest accretion	77	83
All other prior years	(66)	(71)
Total incurred	2,393	2,236
Paid claims related to:
Current year	1,204	1,074
Prior years	1,101	1,058
Total paid	2,305	2,132
Foreign currency	(14)	13
Ending balance, unpaid claims, net	4,912	4,722
Add: Reinsurance and other amounts recoverable	141	130
Ending balance, unpaid claims, gross	$ 5,053	$ 4,852

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Liabilities for Unpaid Claims and Claims Expenses - Reconciliation to the Liability for Unpaid Claims and Claims Expense (Details) - USD ($) $ in Millions	Jun. 30, 2018	Jun. 30, 2017
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	$ 5,246	$ 5,039
Group Disability And Life Segment [Member]
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Total liability for unpaid claims and claims expenses	4,573	4,400
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	480	452
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	$ 187

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Reinsurance - Reinsurance Recoverables (Details) $ in Millions	6 Months Ended
	Jun. 30, 2018 USD ($) Reinsurers	Dec. 31, 2017 USD ($)
Ceded Credit Risk [Line Items]
Reinsurance recoverables	$ 5,877	$ 6,046
Acquisition, disposition or runoff activities [Member]
Ceded Credit Risk [Line Items]
Reinsurance recoverables	5,430	5,592
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	3,361	3,436
Berkshire [Member] | Guaranteed Minimum Death Benefits [Member]
Ceded Credit Risk [Line Items]
Reinsurance recoverables	$ 889	928
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	$ 819	850
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	$ 272	283
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] | Global Health Care, Global Supplemental Benefits, Group Disability and Life [Member]
Ceded Credit Risk [Line Items]
Reinsurance recoverables	$ 447	454
Number of external reinsurers | Reinsurers	85
Minimum reinsurance recoverable from a single reinsurer	$ 1
Maximum reinsurance recoverable from a single reinsurer	$ 70
Other Retrocessionaires [Member] | 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%
Other Retrocessionaires [Member] | 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	12.00%
Other Retrocessionaires [Member] | Guaranteed Minimum Death Benefits [Member]
Ceded Credit Risk [Line Items]
Reinsurance recoverables	$ 33	34
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	$ 56	$ 61
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%

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Reinsurance - Effects of Reinsurance (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Premiums Earned, Net [Abstract]
Ceded	$ 132	$ 87	$ 267	$ 207
Premiums Earned Net	9,012	8,057	18,011	16,208
Reinsurance Recoveries [Abstract]
Reinsurance recoveries	56	83	160	182
Individual Life Insurance And Annuity Business Sold [Member]
Premiums Earned, Net [Abstract]
Ceded	34	33	71	72
Reinsurance Recoveries [Abstract]
Reinsurance recoveries	56	66	113	136
Other Subsegments [Member]
Premiums Earned, Net [Abstract]
Ceded	98	54	196	135
Reinsurance Recoveries [Abstract]
Reinsurance recoveries	$ 0	$ 17	$ 47	$ 46

XML

Reinsurance - Effective Exit of GMDB and GMIB Business (Details) - Berkshire Hathway Life Insurance Company Of Nebraska [Member] - Variable Annuity [Member] - USD ($) $ in Billions	Jun. 30, 2018	Dec. 31, 2013
Ceded Credit Risk [Line Items]
Percent of future claim payments reinsured		100.00%
Ceded Reinsurance Agreement, Coverage Limit, Amount Remaining	$ 3.4

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Reinsurance - Account Value, Net Amount at Risk and Contractholders for GMDB Business (Details) - Variable Annuity [Member] - Guaranteed Minimum Death Benefit [Member] Contractholders in Millions, $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2018 USD ($) Contractholders	Dec. 31, 2017 USD ($) Contractholders
Guaranteed Minimum Death Benefits Account Value, Net Amount at Risk And Average Age Table [Line Items]
Account value	$ 9,667	$ 10,109
Net amount at risk	$ 2,044	$ 2,112
Number of contractholders | Contractholders	230,000	245,000

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Reinsurance - GMIB Reinsurers (Details) - Guaranteed Minimum Income Benefit [Member] $ in Millions	6 Months Ended
	Jun. 30, 2018 USD ($) Reinsurers	Dec. 31, 2017 USD ($)
Ceded Credit Risk [Line Items]
Annuitization election period	30 days
Number of external reinsurers | Reinsurers	3
GMIB Assets	$ 684	$ 777
Berkshire [Member]
Ceded Credit Risk [Line Items]
GMIB Assets	$ 320	359
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	$ 191	221
Liberty Re (Bermuda) Ltd. [Member]
Ceded Credit Risk [Line Items]
GMIB Assets	$ 173	$ 197
Liberty Re (Bermuda) Ltd. [Member] | Ceded Credit Risk Secured [Member] | GMIB Assets [Member]
Ceded Credit Risk [Line Items]
Concentration percentage	100.00%

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Reinsurance - GMIB Guarantees (Details) - Guarantee Type, Other [Member] - Guaranteed Minimum Income Benefit [Member] - Variable Annuity [Member] $ in Millions	Jun. 30, 2018 USD ($)
Guarantee Obligations [Line Items]
Underlying mutual fund investment values	$ 782
Maximum Exposure, Undiscounted	$ 549

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Fair Value Measurements - Financial Assets and Financial Liabilities Carried at Fair Value (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Financial assets at fair value:
Fixed maturities	$ 23,593	$ 23,138
Equity securities	560	588
Short-term investments	220	199
Financial liabilities at fair value:
Unfunded Commitments	$ 65
Minimum [Member]
Financial liabilities at fair value:
Redemption Notice Period	45 days
Maximum [Member]
Financial liabilities at fair value:
Redemption Notice Period	90 days
Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	$ 23,593	23,138
Equity securities	492	588
Subtotal	24,085	23,726
Short-term investments	220	199
Total financial assets at fair value, excluding separate accounts	25,021	24,704
Real estate funds priced at NAV as a practical expedient	263
Financial liabilities at fair value:
Total financial liabilities at fair value	$ 707	787
Redemption Frequency	Quarterly redemption frequency
Other derivatives [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Derivative assets	$ 32	2
Financial liabilities at fair value:
Derivative liabilities	54	25
Guaranteed Minimum Income Benefit [Member]
Financial assets at fair value:
Derivative assets	684	777
Guaranteed Minimum Income Benefit [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Derivative assets	684	777
Financial liabilities at fair value:
Derivative liabilities	653	762
Federal government and agency [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	780	779
State and local government [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	1,045	1,287
Foreign government [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	2,455	2,487
Corporate [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	18,785	18,088
Mortgage and other asset-backed [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	528	497
Fair Value Inputs Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	271	253
Equity securities	391	412
Subtotal	662	665
Short-term investments	0	0
Total financial assets at fair value, excluding separate accounts	662	665
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	271	253
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	22,827	22,256
Equity securities	68	73
Subtotal	22,895	22,329
Short-term investments	220	199
Total financial assets at fair value, excluding separate accounts	23,147	22,530
Financial liabilities at fair value:
Total financial liabilities at fair value	54	25
Fair Value Inputs Level 2 [Member] | Other derivatives [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Derivative assets	32	2
Financial liabilities at fair value:
Derivative liabilities	54	25
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	509	526
Fair Value Inputs Level 2 [Member] | State and local government [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	1,045	1,287
Fair Value Inputs Level 2 [Member] | Foreign government [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	2,411	2,442
Fair Value Inputs Level 2 [Member] | Corporate [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	18,478	17,658
Fair Value Inputs Level 2 [Member] | Mortgage and other asset-backed [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	384	343
Fair Value Inputs Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	495	629
Equity securities	33	103
Subtotal	528	732
Short-term investments	0	0
Total financial assets at fair value, excluding separate accounts	1,212	1,509
Financial liabilities at fair value:
Total financial liabilities at fair value	653	762
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	684	777
Financial liabilities at fair value:
Derivative liabilities	653	762
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	44	45
Fair Value Inputs Level 3 [Member] | Corporate [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	307	430
Fair Value Inputs Level 3 [Member] | Mortgage and other asset-backed [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	$ 144	154
Fair Value Inputs Level 3 [Member] | Private equity securities [Member]
Financial assets at fair value:
Equity securities		$ 70

XML

Fair Value Measurements - Level 2 Financial Assets and Financial Liabilities (Details) - USD ($) $ in Millions	Jun. 30, 2018	Dec. 31, 2017
Fair Value Disclosures [Abstract]
Percentage of investments in fixed maturities and equity securities classified as Level 2	95.00%
Maximum percentage of investments classified in Level 2 representing foreign bonds priced using unadjusted broker quotes	1.00%
Other derivatives [Member] | Fair Value Inputs Level 2 [Member]
Derivative [Line Items]
Adjustment for credit risk on derivatives assets	$ 0	$ 0
Adjustment for credit risk on derivatives liabilities	$ 0	$ 0

XML

Fair Value Measurements - Level 3 Financial Assets and Liabilities (Details) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2018 USD ($)	Dec. 31, 2017 USD ($)
Fair Value Disclosures [Abstract]
Percentage of investments in fixed maturities and equity securities classified in Level 3	2.00%
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	$ 24,085	$ 23,726
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	528	732
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	510	703
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	18	29
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	33	103
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
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
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
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
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	$ 33
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	2.30%	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	2.30%	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	2.30%	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	$ 477	$ 600
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	$ 333	$ 446
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	9.30%	16.50%
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	0.80%	0.70%
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Corporate and government fixed maturities [Member] | Weighted Average [Member] | Unobservable Inputs Developed By Company [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Liquidity adjustment to discount rates used to value fixed maturities and equity securities	2.40%	3.00%
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	$ 144	$ 154
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	3.50%	3.70%
Adjustment to discount rates used to value fixed maturities and equity securities for weighting of credit spreads	3.00%	2.90%
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	1.90%	1.80%
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	0.80%	0.90%
Adjustment to discount rates used to value fixed maturities and equity securities for weighting of credit spreads	2.40%	2.30%

XML

Fair Value Measurements - Changes in Level 3 Financial Assets (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Fixed Maturities And Equity Securities [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Beginning Balance	$ 596	$ 727	$ 732	$ 776
Gains (losses) included in shareholders' net income:
GMIB fair value gain/(loss)	0	0	0	0
Other	(1)	1	(21)	24
Total gains (losses) included in shareholders' net income	(1)	1	(21)	24
Gains (losses) included in other comprehensive income	(5)	5	(10)	(3)
Gains (losses) required to adjust future policy benefits for settlement annuities	(2)	9	(6)	9
Purchases, sales, and settlements:
Purchases	6	65	16	90
Sales	0	(23)	(11)	(70)
Settlements	(13)	(12)	(15)	(39)
Total purchases, sales, settlements	(7)	30	(10)	(19)
Transfers into/(out of) Level 3:
Transfers into Level 3	0	36	20	76
Transfers out of Level 3	(53)	(57)	(177)	(112)
Total transfers into/(out of) Level 3	(53)	(21)	(157)	(36)
Ending Balance	528	751	528	751
Total gains (losses) included in income attributable to instruments held at the reporting date	(1)	0	(8)	(6)
Fixed Maturities And Equity Securities [Member] | Accounting Standards Update 2016-01 [Member]
Transfers into/(out of) Level 3:
Transfers out of Level 3			(70)
Derivative Financial Instruments, Assets [Member] | Guaranteed Minimum Income Benefit [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Beginning Balance	717	777	777	799
Gains (losses) included in shareholders' net income:
GMIB fair value gain/(loss)	(27)	15	(67)	4
Other	1	0	(2)	1
Total gains (losses) included in shareholders' net income	(26)	15	(69)	5
Gains (losses) included in other comprehensive income	0	0	0	0
Gains (losses) required to adjust future policy benefits for settlement annuities	0	0	0	0
Purchases, sales, and settlements:
Purchases	0	0	0	0
Sales	0	0	0	0
Settlements	(7)	(15)	(24)	(27)
Total purchases, sales, settlements	(7)	(15)	(24)	(27)
Transfers into/(out of) Level 3:
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
Total transfers into/(out of) Level 3	0	0	0	0
Ending Balance	684	777	684	777
Total gains (losses) included in income attributable to instruments held at the reporting date	$ (26)	$ 15	$ (69)	$ 5

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Fair Value Measurements - Changes in Level 3 Financial Liabilities (Details) - Derivative Financial Instruments, Liabilities [Member] - Guaranteed Minimum Income Benefit [Member] - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ (682)	$ (761)	$ (762)	$ (780)
Gains (losses) included in shareholders' net income:
GMIB fair value gain/(loss)	27	(15)	69	(4)
Other	(5)	(3)	11	(7)
Total gains (losses) included in shareholders' net income	22	(18)	80	(11)
Gains (losses) included in other comprehensive income	0	0	0	0
Gains (losses) required to adjust future policy benefits for settlement annuities	0	0	0	0
Purchases, sales, settlements:
Purchases	0	0	0	0
Sales	0	0	0	0
Settlements	7	15	29	27
Total purchases, sales, and settlements	7	15	29	27
Transfers into/(out of) Level 3:
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
Transfers into/(out of) Level 3	0	0	0	0
Ending balance	(653)	(764)	(653)	(764)
Total gains (losses) included in income attributable to instruments held at the reporting date	$ 22	$ (18)	$ 80	$ (11)

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Fair Value Measurements - Separate Account Assets (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Financial assets and financial liabilities carried at fair value [Line Items]
Guaranteed separate accounts	$ 507		$ 507		$ 523
Non-guaranteed separate accounts	7,004		7,004		7,126
Subtotal	7,511		7,511		7,649
Non-guaranteed separate accounts priced at NAV as a practical expedient	776		776		774
Total separate account assets	8,287		8,287		8,423
Pension Benefits [Member]
Financial assets and financial liabilities carried at fair value [Line Items]
Non-guaranteed separate accounts	3,900		3,900		3,900
Fair Value Inputs Level 1 [Member]
Financial assets and financial liabilities carried at fair value [Line Items]
Guaranteed separate accounts	208		208		215
Non-guaranteed separate accounts	1,392		1,392		1,536
Subtotal	1,600		1,600		1,751
Fair Value Inputs Level 2 [Member]
Financial assets and financial liabilities carried at fair value [Line Items]
Guaranteed separate accounts	299		299		308
Non-guaranteed separate accounts	5,356		5,356		5,298
Subtotal	5,655		5,655		5,606
Fair Value Inputs Level 3 [Member]
Financial assets and financial liabilities carried at fair value [Line Items]
Guaranteed separate accounts	0		0		0
Non-guaranteed separate accounts	256		256		292
Subtotal	256		256		292
Fair Value Inputs Level 3 [Member] | Pension Benefits [Member]
Financial assets and financial liabilities carried at fair value [Line Items]
Non-guaranteed separate accounts	200		200		$ 300
Separate Account Assets [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Beginning Balance	262	$ 330	292	$ 331
Policyholder gains (losses)	(2)	10	43	37
Purchases, sales, and settlements:
Purchases	4	7	12	17
Sales	0	(17)	(72)	(52)
Settlements	(8)	0	(12)	(1)
Total purchases, sales, and settlements	(4)	(10)	(72)	(36)
Transfers into/(out of) Level 3:
Transfers into Level 3	0	1	0	1
Transfers out of Level 3	0	(15)	(7)	(17)
Total transfers into/(out of) Level 3	0	(14)	(7)	(16)
Ending Balance	$ 256	$ 316	$ 256	$ 316

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Fair Value Measurements - Separate Account Assets Priced at NAV (Details) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items]
Unfunded Commitments	$ 65
Minimum [Member]
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items]
Redemption Notice Period	45 days
Maximum [Member]
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items]
Redemption Notice Period	90 days
Fair Value, Measurements, Recurring [Member]
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items]
Redemption Frequency	Quarterly redemption frequency
Separate Account Assets [Member]
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items]
Unfunded Commitments	$ 302
Separate Account Assets [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items]
Fair Value	776	$ 774
Security Partnerships [Member] | Separate Account Assets [Member]
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items]
Unfunded Commitments	$ 302
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	$ 485	$ 458
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	$ 247	$ 239
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	$ 44	$ 77

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Fair Value Measurements - Measured Under Certain Conditions (Details) - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Financing Receivable, Impaired [Line Items]
Realized investment losses on impaired real estate, partnership entities, and commercial mortgage loans, after-tax	$ 0
Maximum [Member]
Financing Receivable, Impaired [Line Items]
Impaired real estate, partnership entities, and commercial mortgage loans as a percent of total investments		1.00%

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Fair Value Measurements - Not Carried at Fair Value (Details) - USD ($) $ in Millions	Jun. 30, 2018	Dec. 31, 2017
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Commercial mortgage loans	$ 1,866	$ 1,761
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	5,201	5,730
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	1,839	1,766
Carrying Reported Amount Fair Value Disclosure [Member]
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Commercial mortgage loans	1,866	1,761
Long-term debt, including current maturities, excluding capital leases	$ 5,184	$ 5,321

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Fair Value Measurements - Off-Balance Sheet Financial Instruments (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
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

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Investments - Fixed Maturities by Contractual Maturity Periods (Details) - USD ($) $ in Millions	Jun. 30, 2018	Dec. 31, 2017
Amortized Cost:
Due in one year or less	$ 1,561
Due after one year through five years	6,678
Due after five years through ten years	10,430
Due after ten years	3,935
Mortgage and other asset-backed securities	519
Amortized Cost	23,123	$ 21,867
Fair Value:
Due in one year or less	1,569
Due after one year through five years	6,760
Due after five years through ten years	10,242
Due after ten years	4,494
Mortgage and other asset-backed securities	528
Total fair value	$ 23,593

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Investments - Gross Unrealized Appreciation (Depreciation) on Fixed Maturities (Details) - USD ($) $ in Millions	Jun. 30, 2018	Dec. 31, 2017
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 23,123	$ 21,867
Unrealized Appreciation	890	1,371
Unrealized (Depreciation)	(420)	(100)
Total Fair Value	23,593	23,138
Run-off Settlement Annuity Business [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	2,282	2,200
Unrealized Appreciation	525	681
Unrealized (Depreciation)	(25)	(2)
Total Fair Value	2,782	2,879
Federal government and agency [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	575	541
Unrealized Appreciation	209	239
Unrealized (Depreciation)	(4)	(1)
Total Fair Value	780	779
State and local government [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	978	1,196
Unrealized Appreciation	69	93
Unrealized (Depreciation)	(2)	(2)
Total Fair Value	1,045	1,287
Foreign government [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	2,354	2,360
Unrealized Appreciation	120	142
Unrealized (Depreciation)	(19)	(15)
Total Fair Value	2,455	2,487
Corporate [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	18,697	17,301
Unrealized Appreciation	473	868
Unrealized (Depreciation)	(385)	(81)
Total Fair Value	18,785	18,088
Mortgage and other asset-backed [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	519	469
Unrealized Appreciation	19	29
Unrealized (Depreciation)	(10)	(1)
Total Fair Value	$ 528	$ 497

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Investments - Securities with a Decline in Fair Value (Details) - Fixed Maturities [Member] $ in Millions	Jun. 30, 2018 USD ($) Securities	Dec. 31, 2017 USD ($) Securities
Investment Grade [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Fair value, one year or less	$ 9,283	$ 3,272
Amortized cost, one year or less	9,566	3,309
Unrealized depreciation, one year or less	$ (283)	$ (37)
Number of issues, one year or less | Securities	1,944	797
Fair value, more than one year	$ 1,759	$ 1,503
Amortized cost, more than one year	1,852	1,549
Unrealized depreciation, more than one year	$ (93)	$ (46)
Number of issues, more than one year | Securities	470	373
Below Investment Grade [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Fair value, one year or less	$ 1,285	$ 543
Amortized cost, one year or less	1,318	553
Unrealized depreciation, one year or less	$ (33)	$ (10)
Number of issues, one year or less | Securities	1,157	643
Fair value, more than one year	$ 147	$ 155
Amortized cost, more than one year	158	162
Unrealized depreciation, more than one year	$ (11)	$ (7)
Number of issues, more than one year | Securities	55	42

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Investments - Equity Securities (Details) $ in Millions	Jun. 30, 2018 USD ($)
Investments:
Fair value of equity securities that have a readily determinable fair value	$ 443
Amortized cost of equity securities that have a readily determinable fair value	453
Carrying value of private equity securities that do not have a readily determinable fair value	68
Impairment or value changes of equity securities without a readily determinable fair value

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Investments - Hybrid Securities (Details) - Equity securities [Member] - USD ($) $ in Millions	Jun. 30, 2018	Dec. 31, 2017
Investment [Line Items]
Hybrid securities	$ 49	$ 49
Hybrid instruments, cost	$ 64	$ 61

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Investments - Commerical Mortgage Loans by Property Type and Geographic Region (Details) - USD ($) $ in Millions	Jun. 30, 2018	Dec. 31, 2017
Mortgage Loans on Real Estate [Line Items]
Commercial mortgage loans	$ 1,866	$ 1,761

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Investments - Credit Risk Profile, Commercial Mortgage Loans (Details) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2018 USD ($)	Dec. 31, 2017 USD ($)
Financing Receivable, Recorded Investment [Line Items]
Commercial mortgage loan	$ 1,866	$ 1,761
Weighted Average [Member]
Financing Receivable, Recorded Investment [Line Items]
Average Debt Service Coverage Ratio	1.97	2.11
Average Loan-to-Value Ratio	57.00%	57.00%
Below 60% [Member]
Financing Receivable, Recorded Investment [Line Items]
Commercial mortgage loan	$ 1,195	$ 1,109
Below 60% [Member] | Weighted Average [Member]
Financing Receivable, Recorded Investment [Line Items]
Average Debt Service Coverage Ratio	2.02	2.03
60% to 79% [Member]
Financing Receivable, Recorded Investment [Line Items]
Commercial mortgage loan	$ 595	$ 652
60% to 79% [Member] | Weighted Average [Member]
Financing Receivable, Recorded Investment [Line Items]
Average Debt Service Coverage Ratio	1.95	2.24
80% to 100% [Member]
Financing Receivable, Recorded Investment [Line Items]
Commercial mortgage loan	$ 76	$ 0
80% to 100% [Member] | Weighted Average [Member]
Financing Receivable, Recorded Investment [Line Items]
Average Debt Service Coverage Ratio	1.49	0

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Investments - Impaired Commercial Mortgage Loans (Details) - Mortgage Loans on Real Estate [Member] - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Financing Receivable, Impaired [Line Items]
Impaired commercial mortgage loans, gross	$ 0	$ 0
Average recorded investment in impaired mortgage loans
Interest income on impaired commercial mortgage loans

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Investments - Other Long-Term Investments (Details) - USD ($) $ in Millions	Jun. 30, 2018	Dec. 31, 2017
Other Long Term Investments [Line Items]
Other long-term investments	$ 1,678	$ 1,518
Unfunded Commitments	$ 65

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Investments - Short-Term Investments and Cash Equivalents (Details) - USD ($) $ in Millions	Jun. 30, 2018	Dec. 31, 2017
Corporate Securities [Member]
Short Term Investments And Cash Equivalents [Line Items]
Short-term investments and cash equivalents	$ 1,663	$ 1,143
Federal goverment securities
Short Term Investments And Cash Equivalents [Line Items]
Short-term investments and cash equivalents	621	604
Foreign government [Member]
Short Term Investments And Cash Equivalents [Line Items]
Short-term investments and cash equivalents	161	159
Money Market Funds [Member]
Short Term Investments And Cash Equivalents [Line Items]
Short-term investments and cash equivalents	$ 10	$ 12

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Investments - Net Investment Income (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Schedule Of Investment Income Reported Amounts By Category [Line Items]
Net investment income	$ 352	$ 308	$ 681	$ 611

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Investments - Realized Investment Gains and Losses (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Realized Gains (Losses) on Investments [Line Items]
Realized investment gains (losses) before income taxes	$ (3)	$ 51	$ (36)	$ 97
Less income taxes (benefits)	(1)	17	(11)	32
Net realized investment gains (losses)	(2)	34	(25)	65
Fixed Maturities [Member]
Realized Gains (Losses) on Investments [Line Items]
Realized investment gains (losses) before income taxes	(26)	14	(46)	16
Equity securities [Member]
Realized Gains (Losses) on Investments [Line Items]
Realized investment gains (losses) before income taxes	(7)	1	(26)	34
Realized gains (losses) on investments still held at reporting date	(7)		(26)
Commercial Mortgage Loans [Member]
Realized Gains (Losses) on Investments [Line Items]
Realized investment gains (losses) before income taxes	0	(1)	0	(1)
Other Investments Including Derivatives [Member]
Realized Gains (Losses) on Investments [Line Items]
Realized investment gains (losses) before income taxes	$ 30	$ 37	$ 36	$ 48

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Investments - Write Downs and Sales (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Pre-Tax Asset Write-downs [Line Items]
Pre-Tax Asset Write-Downs			$ 23	$ 13
Sales Information For Available For Sale Fixed Maturities Equity Securities [Abstract]
Proceeds from sales	$ 774	$ 516	1,273	930
Gross gains on sales	13	12	18	59
Gross losses on sales	$ (7)	$ (2)	$ (29)	$ (4)

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Derivative Financial Instruments (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Derivative [Line Items]
Gains (losses) reclassified from other comprehensive income into shareholders' net income
Amounts excluded from assessment of hedge effectiveness
Gains (losses) recognized due to hedge ineffectiveness
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] | Net Investment Hedge [Member] | Foreign Currency Swaps [Member]
Derivative [Line Items]
Notional Amount	439		439		0
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Swaption [Member]
Derivative [Line Items]
Notional Amount	2,050		2,050		0
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Interest Rate Swaps [Member]
Derivative [Line Items]
Notional Amount					750
Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | Foreign Currency Swaps [Member]
Derivative [Line Items]
Notional Amount	478		$ 478		318
Derivative contract term			30 years
Non designated [Member] | Swaption [Member]
Derivative [Line Items]
Notional Amount	3,550		$ 3,550		0
Non designated [Member] | Forward Contracts [Member]
Derivative [Line Items]
Notional Amount	$ 309		$ 309		$ 255

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Variable Interest Entities (Details) $ in Billions	6 Months Ended
	Jun. 30, 2018 USD ($) 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. The Company determined it was not a primary beneficiary in any material variable interest entities as of June 30, 2018 or December 31, 2017. 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 [Member]
Variable Interest Entity [Line Items]
Maximum exposure to loss related to arrangements with variable interest entity	$ 2.7
Number of limited partnerships defined as variable interest entities | LimitedPartnerships	125
Carrying amount of assets	$ 1.4
Commitments to contribute additional cash, amount	$ 1.3
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

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Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income (loss), beginning			$ (1,082)
Shareholders' other comprehensive income (loss), net of tax	$ (296)	$ 106	(522)	$ 236
Accumulated other comprehensive income (loss), ending	(1,843)		(1,843)
Securities [ Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income (loss), beginning	110	369	389	362
Other comprehensive income (loss) before reclassifications, pre-tax	(176)	115	(555)	168
Other comprehensive income (loss) before reclassifications, tax (expense) benefit	37	(38)	113	(62)
Other comprehensive income (loss) before reclassifications, after-tax	(139)	77	(442)	106
Reclassification adjustment, pre-tax	(2)	(15)	28	(50)
Reclassification adjustment, tax (expense) benefit	0	5	(6)	18
Reclassification adjustment, after-tax	(2)	(10)	22	(32)
Shareholders' other comprehensive income (loss), net of tax	(141)	67	(420)	74
Accumulated other comprehensive income (loss), ending	(31)	436	(31)	436
Securities [ Member] | Previously Reported [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income (loss), beginning	110	369	328	362
Securities [ Member] | Restatement Adjustment [Member] | Accounting Standards Update 2018-02 [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income (loss), beginning	0	0	65	0
Securities [ Member] | Restatement Adjustment [Member] | Accounting Standards Update 2016-01 [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income (loss), beginning	0	0	(4)	0
Derivatives [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income (loss), beginning	(11)	0	(6)	3
Other comprehensive income (loss) before reclassifications, pre-tax	(10)	0	(16)	0
Other comprehensive income (loss) before reclassifications, tax (expense) benefit	2	0	3	0
Other comprehensive income (loss) before reclassifications, after-tax	(8)	0	(13)	0
Reclassification adjustment, pre-tax	0	0	0	(4)
Reclassification adjustment, tax (expense) benefit	0	0	0	1
Reclassification adjustment, after-tax	0	0	0	(3)
Shareholders' other comprehensive income (loss), net of tax	(8)	0	(13)	(3)
Accumulated other comprehensive income (loss), ending	(19)	0	(19)	0
Derivatives [Member] | Previously Reported [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income (loss), beginning	(11)	0	0	3
Derivatives [Member] | Restatement Adjustment [Member] | Accounting Standards Update 2017-12 [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income (loss), beginning	0	0	(6)	0
Translation of foreign currencies [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income (loss), beginning	(24)	(257)	(69)	(369)
Other comprehensive income (loss) before reclassifications, pre-tax	(151)	30	(105)	141
Other comprehensive income (loss) before reclassifications, tax (expense) benefit	(1)	(3)	(2)	(2)
Other comprehensive income (loss) before reclassifications, after-tax	(152)	27	(107)	139
Accumulated other comprehensive income (loss), ending	(176)	(230)	(176)	(230)
Translation of foreign currencies [Member] | Previously Reported [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income (loss), beginning	(24)	(257)	(65)	(369)
Translation of foreign currencies [Member] | Restatement Adjustment [Member] | Accounting Standards Update 2018-02 [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income (loss), beginning	0	0	(4)	0
Postretirement benefits liability [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income (loss), beginning	(1,622)	(1,364)	(1,635)	(1,378)
Other comprehensive income (loss) before reclassifications, pre-tax	(12)	2	(12)	2
Other comprehensive income (loss) before reclassifications, tax (expense) benefit	3	0	3	0
Other comprehensive income (loss) before reclassifications, after-tax	(9)	2	(9)	2
Reclassification adjustment, tax (expense) benefit	(3)	(7)	(7)	(14)
Reclassification adjustment, after-tax	14	10	27	24
Shareholders' other comprehensive income (loss), net of tax	5	12	18	26
Accumulated other comprehensive income (loss), ending	(1,617)	(1,352)	(1,617)	(1,352)
Postretirement benefits liability [Member] | Previously Reported [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income (loss), beginning	(1,622)	(1,364)	(1,345)	(1,378)
Postretirement benefits liability [Member] | Restatement Adjustment [Member] | Accounting Standards Update 2018-02 [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income (loss), beginning	0	0	(290)	0
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	17	17	34	32
Reclassification adjustment for settlement losses [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Reclassification adjustment, pre-tax	$ 0	$ 0	$ 0	$ 6

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Accumulated Other Comprehensive Income - Reclassifications out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Realized investment (gains) losses	$ 3	$ (51)	$ 36	$ (97)
Other operating expenses	2,893	2,412	5,695	5,067
Securities [ Member] | Reclassification Out Of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Realized investment (gains) losses	(2)	(15)	28	(50)
Derivatives [Member] | Reclassification Out Of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Realized investment (gains) losses	0	0	0	(4)
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	17	17	34	32
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	$ 0	$ 0	$ 0	$ 6

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Pension and Other Postretirement Benefits - About our Plans (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Pension Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined benefit plan cost	$ (4)	$ (1)	$ (8)	$ 4
Other Postretirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined benefit plan cost	$ 1	$ 2	$ 3	$ 4

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Pension and Other Postretirement Benefits - Funded Status (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Pension Benefits [Member]
Change in benefit obligation [Abstract]
Service cost	$ 0	$ 1	$ 1	$ 1
Interest cost	42	45	84	93
Pension Benefits [Member] | United States [Member] | Qualified Plan [Member]
Change in plan assets [Roll Forward]
Contributions			0
Expected plan contributions for the remaining fiscal year	0		0
Other Postretirement Benefits [Member]
Change in benefit obligation [Abstract]
Service cost	0	0	0	0
Interest cost	$ 2	$ 2	$ 4	$ 5

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Pension and Other Postretirement Benefits - Cost of our Plans (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Pension Benefits [Member]
Components of net pension and other postretirement benefits cost [Abstract]
Service cost	$ 0	$ 1	$ 1	$ 1
Interest cost	42	45	84	93
Expected long-term return on plan assets	(64)	(64)	(128)	(129)
Amortization of net loss from past experience	18	17	35	33
Amortization of prior service cost	0	0	0	0
Settlement loss	0	0	0	6
Net plan cost	(4)	(1)	(8)	4
Other Postretirement Benefits [Member]
Components of net pension and other postretirement benefits cost [Abstract]
Service cost	0	0	0	0
Interest cost	2	2	4	5
Expected long-term return on plan assets	0	0	0	0
Amortization of net loss from past experience	0	0	0	0
Amortization of prior service cost	(1)	0	(1)	(1)
Settlement loss	0	0	0	0
Net plan cost	$ 1	$ 2	$ 3	$ 4

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Goodwill, Other Intangibles, and Property and Equipment - Goodwill Activity (Details) $ in Millions	Jun. 30, 2018 USD ($)
Goodwill [Line Items]
Goodwill, Beginning Balance	$ 6,164
Goodwill, Ending Balance	$ 6,147

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Goodwill, Other Intangibles, and Property and Equipment - Property and Equipment (Details) - USD ($) $ in Millions	Jun. 30, 2018	Dec. 31, 2017
Property Plant And Equipment [Line Items]
Net carrying value	$ 1,554	$ 1,563

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Goodwill, Other Intangibles, and Property and Equipment - Depreciation and Amortization (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Depreciation And Amortization By Type [Line Items]
Depreciation and amortization	$ 276	$ 286

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Income Taxes - U.S. Tax Reform Legislation (Details)	6 Months Ended
	Jun. 30, 2018 USD ($)
Income Tax Disclosure [Line Items]
Tax impact of global intangible low-taxed income ("GILTI") provisions of U.S. tax reform
Adjustments to provisional amounts first recognized in 2017	$ 0

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Income Taxes - Income Tax Expense (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Current taxes
Total taxes, current	$ 297	$ 304	$ 589	$ 590
Deferred taxes (benefits)
Total taxes (benefits), deferred	(3)	20	6	31
Total taxes	$ 294	$ 324	$ 595	$ 621

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Income Taxes - Reconciliation to Nominal Tax Rate (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Reconciliation of total taxes to nominal federal rate details [Abstract]
Total income taxes	$ 294	$ 324	$ 595	$ 621

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Income Taxes - Effective Tax Rates (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Income Taxes [Abstract]
Consolidated effective tax rate	25.60%	30.70%
Cumulative unrecognized deferred tax liabilities	$ 138

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Income Taxes - Deferred Income Taxes (Details) - USD ($) $ in Millions	Jun. 30, 2018	Dec. 31, 2017
Deferred tax liabilities [Abstract]
Net deferred income tax assets	$ 140	$ 39

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Income Taxes - Uncertain Tax Positions (Details)	6 Months Ended
	Jun. 30, 2018 USD ($)
Reconciliation of unrecognized tax benefits details [Abstract]
Changes in unrecognized tax benefits

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Contingencies and Other Matters - Guarantees (Details) $ in Millions	6 Months Ended
	Jun. 30, 2018 USD ($)
Financial Guarantee [Member] | Retiree and Life Insurance Benefits [Member]
Guarantee Obligations [Line Items]
Maximum Exposure, Undiscounted	$ 460
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	460
Indemnification obligations to lenders [Member]
Guarantee Obligations [Line Items]
Maximum Exposure, Undiscounted	90
Guarantee obligations carrying value	$ 0

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Contingencies and Other Matters - Legal and Regulatory Matters (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Mar. 31, 2017	Jun. 30, 2018
Guaranty Fund Assessments [Member]
Loss Contingencies [Line Items]
Charges for loss contingency, pre-tax	$ 130.0
Charges for loss contingency, after-tax	$ 85.0
Recorded liability, Penn Treaty assessment		42.0
Pending Litigation [Member]
Loss Contingencies [Line Items]
Reserves for litigation matters, pre-tax		195.0
Reserves for litigation matters, after-tax		$ 155.0

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Contingencies and Other Matters - Anthem Litigation (Details) $ in Millions	Jun. 30, 2018 USD ($)
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

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Segment Information - Special Items (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Before-tax [Abstract]
Transaction-related costs	$ 130	$ 16	$ 190	$ 79
Long-term care guaranty fund assessment			0	129
Total impact from special items, before-tax	130	16	190	208
After-tax [Abstract]
Transaction-related costs	109	(47)	159	2
Long-term care guaranty fund assessment			0	83
Total impact of special items, after-tax	$ 109	$ (47)	$ 159	$ 85

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Segment Information - Summarized Segment Financial Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Segment Reporting Information [Line Items]
Premiums, fees and other revenues and mail order pharmacy revenues	$ 11,128	$ 10,066	$ 22,212	$ 20,191
Net investment income	352	308	681	611
Less net realized investment gains (losses) on equity method subsidiaries	(20)		(22)
Total operating revenues	11,500	10,374	22,915	20,802
Total revenues	11,477	10,425	22,857	20,899
Shareholders' net income	806	813	1,721	1,411
After-tax adjustments to reconcile to adjusted income from operations:
Net realized investment (gains) losses	22	(34)	47	(65)
Amortization of other acquired intangible assets, net	18	18	38	38
Special items:
Transaction-related costs	109	(47)	159	2
Long-term care guaranty fund assessment			0	83
Total special items	109	(47)	159	85
Adjusted income (loss) from operations	955	750	1,965	1,469
Operating Segments [Member] | Global Health Care [Member]
Segment Reporting Information [Line Items]
Premiums, fees and other revenues and mail order pharmacy revenues	9,025	8,100	17,999	16,295
Net investment income	125	92	240	184
Less net realized investment gains (losses) on equity method subsidiaries	0		0
Total operating revenues	9,150	8,192	18,239	16,479
Total revenues	9,155	8,224	18,224	16,537
Shareholders' net income	780	599	1,622	1,143
After-tax adjustments to reconcile to adjusted income from operations:
Net realized investment (gains) losses	(4)	(22)	11	(38)
Amortization of other acquired intangible assets, net	13	14	27	28
Special items:
Transaction-related costs	0	0	0	0
Long-term care guaranty fund assessment				68
Total special items				68
Adjusted income (loss) from operations	789	591	1,660	1,201
Operating Segments [Member] | Global Supplemental Benefits Segment [Member]
Segment Reporting Information [Line Items]
Premiums, fees and other revenues and mail order pharmacy revenues	1,050	924	2,116	1,805
Net investment income	36	31	70	59
Less net realized investment gains (losses) on equity method subsidiaries	(20)		(22)
Total operating revenues	1,106	955	2,208	1,864
Total revenues	1,075	954	2,175	1,876
Shareholders' net income	86	101	191	178
After-tax adjustments to reconcile to adjusted income from operations:
Net realized investment (gains) losses	27	0	28	(9)
Amortization of other acquired intangible assets, net	5	4	11	10
Special items:
Transaction-related costs	0	0	0	0
Long-term care guaranty fund assessment				0
Total special items				0
Adjusted income (loss) from operations	118	105	230	179
Operating Segments [Member] | Group Disability And Life Segment [Member]
Segment Reporting Information [Line Items]
Premiums, fees and other revenues and mail order pharmacy revenues	1,031	1,023	2,057	2,055
Net investment income	96	89	186	178
Less net realized investment gains (losses) on equity method subsidiaries	0		0
Total operating revenues	1,127	1,112	2,243	2,233
Total revenues	1,132	1,134	2,232	2,263
Shareholders' net income	107	97	161	156
After-tax adjustments to reconcile to adjusted income from operations:
Net realized investment (gains) losses	(4)	(14)	9	(20)
Amortization of other acquired intangible assets, net	0	0	0	0
Special items:
Transaction-related costs	0	0	0	0
Long-term care guaranty fund assessment				15
Total special items				15
Adjusted income (loss) from operations	103	83	170	151
Operating Segments [Member] | Other Operations Segment [Member]
Segment Reporting Information [Line Items]
Premiums, fees and other revenues and mail order pharmacy revenues	33	30	64	60
Net investment income	88	88	173	174
Less net realized investment gains (losses) on equity method subsidiaries	0		0
Total operating revenues	121	118	237	234
Total revenues	119	116	239	231
Shareholders' net income	19	17	48	37
After-tax adjustments to reconcile to adjusted income from operations:
Net realized investment (gains) losses	2	2	(3)	2
Amortization of other acquired intangible assets, net	0	0	0	0
Special items:
Transaction-related costs	0	0	0	0
Long-term care guaranty fund assessment				0
Total special items				0
Adjusted income (loss) from operations	21	19	45	39
Corporate [Member]
Segment Reporting Information [Line Items]
Premiums, fees and other revenues and mail order pharmacy revenues	(11)	(11)	(24)	(24)
Net investment income	7	8	12	16
Less net realized investment gains (losses) on equity method subsidiaries	0		0
Total operating revenues	(4)	(3)	(12)	(8)
Total revenues	(4)	(3)	(13)	(8)
Shareholders' net income	(186)	(1)	(301)	(103)
After-tax adjustments to reconcile to adjusted income from operations:
Net realized investment (gains) losses	1	0	2	0
Amortization of other acquired intangible assets, net	0	0	0	0
Special items:
Transaction-related costs	109	(47)	159	2
Long-term care guaranty fund assessment				0
Total special items				2
Adjusted income (loss) from operations	$ (76)	$ (48)	$ (140)	$ (101)

XML

Segment Information - Revenue from External Customers (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenue from External Customer [Line Items]
Mail order pharmacy revenues	$ 758	$ 757	$ 1,475	$ 1,467
Other	19	32	55	68
Revenues from external customers	11,128	10,066	22,212	20,191
Operating Segments [Member]
Revenue from External Customer [Line Items]
Total premiums from ongoing operations	8,985	8,032	17,958	16,159
Total fees from ongoing operations	1,366	1,245	2,724	2,497
Operating Segments [Member] | Global Health Care [Member]
Revenue from External Customer [Line Items]
Total premiums from ongoing operations	6,924	6,128	13,853	12,387
Total fees from ongoing operations	1,333	1,213	2,659	2,433
Revenues from external customers	9,025	8,100	17,999	16,295
Operating Segments [Member] | Global Supplemental Benefits Segment [Member]
Revenue from External Customer [Line Items]
Total fees from ongoing operations	8	7	15	12
Revenues from external customers	1,050	924	2,116	1,805
Operating Segments [Member] | Group Disability And Life Segment [Member]
Revenue from External Customer [Line Items]
Total fees from ongoing operations	25	25	50	52
Revenues from external customers	1,031	1,023	2,057	2,055
Guaranteed Cost [Member] | Operating Segments [Member] | Global Health Care [Member]
Revenue from External Customer [Line Items]
Total premiums from ongoing operations	2,046	1,522	4,045	3,065
Experience Rated [Member] | Operating Segments [Member] | Global Health Care [Member]
Revenue from External Customer [Line Items]
Total premiums from ongoing operations	736	727	1,475	1,454
Stop Loss [Member] | Operating Segments [Member] | Global Health Care [Member]
Revenue from External Customer [Line Items]
Total premiums from ongoing operations	993	856	1,973	1,708
International Health Care [Member] | Operating Segments [Member] | Global Health Care [Member]
Revenue from External Customer [Line Items]
Total premiums from ongoing operations	515	479	1,028	954
Dental [Member] | Operating Segments [Member] | Global Health Care [Member]
Revenue from External Customer [Line Items]
Total premiums from ongoing operations	482	441	961	882
Other Medical [Member] | Operating Segments [Member] | Global Health Care [Member]
Revenue from External Customer [Line Items]
Total premiums from ongoing operations	259	243	517	489
Medicare [Member] | Operating Segments [Member] | Global Health Care [Member]
Revenue from External Customer [Line Items]
Total premiums from ongoing operations	1,461	1,389	2,959	2,850
Medicaid [Member] | Operating Segments [Member] | Global Health Care [Member]
Revenue from External Customer [Line Items]
Total premiums from ongoing operations	243	273	478	553
Medicare Part D [Member] | Operating Segments [Member] | Global Health Care [Member]
Revenue from External Customer [Line Items]
Total premiums from ongoing operations	189	198	417	432
Disability [Member] | Operating Segments [Member]
Revenue from External Customer [Line Items]
Total premiums from ongoing operations	510	491	1,015	992
Life, Accident and Supplemental Health [Member] | Operating Segments [Member]
Revenue from External Customer [Line Items]
Total premiums from ongoing operations	$ 1,551	$ 1,413	$ 3,090	$ 2,780

XML

Segment Information - Foreign and U.S. Revenues (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues from external customers	$ 11,128	$ 10,066	$ 22,212	$ 20,191

XML

Segment Information - Concentration Risk (Details) - Revenue Consolidated [Member] - Customer Concentration Risk [Member]	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Concentration Risk [Line Items]
Concentration Risk, Percentage	18.00%	17.00%
Concentration Risk, Benchmark Description	Consolidated revenues
Concentration Risk, Additional Characteristic	Premiums and fees from CMS

XML

Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Consolidated Results
Total revenues	$ 11,477	$ 10,425	$ 22,857	$ 20,899
Income (loss) before income taxes	1,102	1,134	2,320	2,024
Shareholders' net income	$ 806	$ 813	$ 1,721	$ 1,411
Shareholders' net income per share:
EPS, basic	$ 3.32	$ 3.2	$ 7.1	$ 5.54
EPS, diluted	3.29	3.15	7.01	5.45
Stock and Dividend Data
Dividends declared per share	$ 0	$ 0	$ 0.04	$ 0.04
Special items
Long-term care guaranty fund assessment			$ 0	$ 83
Transaction-related costs	$ 109	$ (47)	159	2
Total special items	$ 109	$ (47)	$ 159	$ 85

XML

Schedule II - Condensed Financial Information, Statements of Income (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Operating expenses:
Total operating expenses	$ 2,893	$ 2,412	$ 5,695	$ 5,067
Income before Income Taxes	1,102	1,134	2,320	2,024
Income tax expense (benefit)	294	324	595	621
Shareholders' net income	806	813	1,721	1,411
Shareholders' other comprehensive income (loss), net of tax:
Net unrealized appreciation (depreciation) on securities	(141)	67	(420)	74
Net unrealized appreciation (depreciation), derivatives	(8)	0	(13)	(3)
Net translation of foreign currencies	(152)	27	(107)	139
Postretirement benefits liability adjustment	5	12	18	26
Shareholders' other comprehensive income (loss)	(296)	106	(522)	236
Shareholders' comprehensive income (loss)	$ 510	$ 919	$ 1,199	$ 1,647

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Schedule II - Condensed Financial Information, Balance Sheets (Details) - USD ($) $ in Millions	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2017	Dec. 31, 2016
Assets
Cash and cash equivalents	$ 3,634	$ 2,972	$ 3,611	$ 3,185
Short-term investments	220	199
Other assets	2,412	2,316
Total assets	63,102	61,759
Liabilities:
Short-term debt	109	240
Long-term debt	5,195	5,199
Total liabilities	48,320	47,999
Shareholders Equity:
Common stock (shares issued, 296; authorized, 600)	74	74
Additional paid-in capital	2,974	2,940
Accumulated other comprehensive loss	(1,843)	(1,082)
Retained earnings	17,722	15,800
Less: treasury stock, at cost	(4,184)	(4,021)
Total shareholders' equity	14,743	13,711
Total liabilities and shareholders' equity	$ 63,102	$ 61,759

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Schedule II - Condensed Financial Information, Balance Sheets - Parentheticals (Details) - shares shares in Millions	Jun. 30, 2018	Dec. 31, 2017
Consolidated Balance Sheets
Common stock shares issued	296	296
Common stock shares authorized	600	600

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Schedule II - Condensed Financial Information, Statements of Cash Flows (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Cash Flows from Operating Activities
Shareholders' net income	$ 806	$ 813	$ 1,721	$ 1,411
Adjustments to reconcile shareholders' net income to net cash provided by (used in) operating activities:
Other liabilities			(246)	(159)
Other, net			(33)	48
Net cash provided by (used in) operating activities			3,020	2,276
Cash Flows from Investing Activities
Short term investments purchased			(501)	(444)
Net cash provided by (used in) investing activities			(1,799)	(732)
Cash Flows from Financing Activities
Net change in short-term debt			(5)	(14)
Repayment of long-term debt			(131)	(250)
Issuance of common stock			27	76
Repurchase of common stock			(310)	(895)
Other, net			(103)	(13)
Net cash provided by (used in) financing activities			(542)	(1,143)
Net increase (decrease) in cash and cash equivalents			662	426
Cash and cash equivalents, January 1,			2,972	3,185
Cash and cash equivalents, June 30,	$ 3,634	$ 3,611	$ 3,634	$ 3,611

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Schedule II - Condensed Financial Information, Short-term and Long-term Debt (Details) - USD ($) $ in Millions	Jun. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Long-term debt, carrying value	$ 5,195	$ 5,199
Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, carrying value	5,195	5,199
$78 million, 6.37% Notes due 2021 [Member] | Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, carrying value	$ 78	$ 78

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Schedule IV - Reinsurance (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Premiums:
Ceded to other companies, premiums	$ 132	$ 87	$ 267	$ 207
Net amount	$ 9,012	$ 8,057	$ 18,011	$ 16,208

XML

Label	Element	Value
Shareholders' Equity [Member]
Cumulative effect on equity in period of adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ 58,000,000
Accumulated Other Comprehensive Income [Member]
Cumulative effect on equity in period of adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	(10,000,000)
Retained Earnings [Member]
Cumulative effect on equity in period of adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ 68,000,000

[1] See Note 2 for further information about adjustments resulting from the Company's adoption of new accounting standards in 2018.