Insurance and Contractholder Liabilities (Tables)

3 Months Ended

Mar. 31, 2020

Summary of Insurance and Contractholder Liabilities, Activity in the Unpaid Claims Liability and Liability Details for Unpaid Claims and Claim Expenses

As of March 31, 2020, December 31, 2019 and March 31, 2019, the Company’s insurance and contractholder liabilities were comprised of the following:


	March 31, 2020										December 31, 2019				March 31, 2019
(In millions)	Current		Non-current		Total		Current		Non-current		Total		Total
Contractholder deposit funds	$	613	$	7,086	$	7,699	$	600	$	7,139	$	7,739	$	7,947
Future policy benefits	541		9,110		9,651		553		9,281		9,834		9,691
Unpaid claims and claim expenses
Integrated Medical	2,982		18		3,000		2,875		17		2,892		2,961
Other segments	2,544		3,575		6,119		2,529		3,474		6,003		5,725
Unearned premiums	480		360		840		453		360		813		779
Total	7,160		20,149		27,309		7,010		20,271		27,281		27,103
Insurance and contractholder liabilities classified as liabilities of business held for sale⁽¹⁾	(2,130)		(4,311)		(6,441)		(2,089)		(4,219)		(6,308)
Total insurance and contractholder liabilities	$	5,030	$	15,838	$	20,868	$	4,921	$	16,052	$	20,973	$	27,103

⁽¹⁾ Amounts classified as Liabilities of business held for sale primarily include $5.1 billion of unpaid claims,$726 million of contractholder deposit funds and $640 million of future policy benefits as of March 31, 2020 and $4.9 billion of unpaid claims, $717 million of contractholder deposit funds and $653 million of future policy benefits as of December 31, 2019.

Activity in the unpaid claims liability for the Integrated Medical segment for the three months ended March 31, was as follows:


	Three Months Ended
(In millions)	March 31, 2020		March 31, 2019
Beginning balance	$	2,892	$	2,697
Less: Reinsurance and other amounts recoverable	303		264
Beginning balance, net	2,589		2,433
Incurred costs related to:
Current year	6,661		6,095
Prior years	(152)		(117)
Total incurred	6,509		5,978
Paid costs related to:
Current year	4,271		3,786
Prior years	2,027		1,908
Total paid	6,298		5,694
Ending balance, net	2,800		2,717
Add: Reinsurance and other amounts recoverable	200		244
Ending balance	$	3,000	$	2,961

The liability details for unpaid claims and claim expenses are as follows:


(In millions)	March 31, 2020 ⁽¹⁾		March 31, 2019
Group Disability and Other
Group Disability and Life	$	5,084	$	4,786
Other Operations	209		194
Total Group Disability and Other	5,293		4,980
International Markets	826		745
Unpaid claims and claim expenses Group Disability and Other and International Markets	$	6,119	$	5,725

⁽¹⁾ Includes unpaid claim amounts classified as Liabilities of business held for sale.

Activity in the Company’s liabilities for unpaid claims and claim expenses, excluding Other Operations, are 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.


	Three Months Ended
(In millions)	March 31, 2020⁽¹⁾		March 31, 2019
Beginning balance	$	5,816	$	5,432
Less: Reinsurance	184		156
Beginning balance, net	5,632		5,276
Incurred claims related to:
Current year	1,473		1,428
Prior years:
Interest accretion	42		38
All other incurred	46		(32)
Total incurred	1,561		1,434
Paid claims related to:
Current year	490		474
Prior years	946		856
Total paid	1,436		1,330
Foreign currency	(25)		(7)
Ending balance, net	5,732		5,373
Add: Reinsurance	178		158
Ending balance	$	5,910	$	5,531

(1) Includes Unpaid claims amounts classified as Liabilities of business held for sale.

Variances in Incurred Costs Related to Prior Years' Unpaid Claims and Claims Expenses

Variances in incurred costs related to prior years’ unpaid claims and claims expenses that resulted from the differences between actual experience and the Company’s key assumptions were as follows:


	Three Months Ended
(Dollars in millions)	March 31, 2020						March 31, 2019
	$		%⁽¹⁾		$		%⁽²⁾
Actual completion factors	$	63	0.3	%	$	55	0.2	%
Medical cost trend	89		0.3		62		0.3

Total favorable variance	$	152	0.6	%	$	117	0.5	%

(1)Percentage of current year incurred costs as reported for the year ended December 31, 2019.

(2)Percentage of current year incurred costs as reported for the year ended December 31, 2018.