
	December 31, 2021						December 31, 2020
(In millions)	Current		Non-current		Total		Current		Non-current		Total
Contractholder deposit funds	$	352	$	6,702	$	7,054	$	350	$	6,823	$	7,173
Future policy benefits	312		9,194		9,506		327		9,317		9,644
Unearned premiums	558		418		976		485		394		879
Unpaid claims and claim expenses
Cigna Healthcare	4,159		102		4,261		3,608		87		3,695
Other Operations	548		180		728		538		223		761
Total	5,929		16,596		22,525
Insurance and contractholder liabilities classified as Liabilities of businesses held for sale (1)	(611)		(4,033)		(4,644)
Total insurance and contractholder liabilities	$	5,318	$	12,563	$	17,881	$	5,308	$	16,844	$	22,152

Accounting Policy - Contractholder Deposit Funds. Liabilities for contractholder deposit funds primarily include deposits received from customers for investment-related and universal life products and investment earnings on their fund balances. These liabilities are adjusted to reflect administrative charges and, for universal life fund balances, mortality charges. In addition, this caption includes: 1) premium stabilization reserves under group health insurance contracts representing experience refunds left with the Company to pay future premiums; 2) deposit administration funds used to fund non-pension retiree insurance programs; 3) retained asset accounts and 4) annuities or supplementary contracts without significant life contingencies. Interest credited on these funds is accrued ratably over the contract period.

Accounting Policy - Future Policy Benefits. Future policy benefits represent the present value of estimated future obligations under long-term life and supplemental health insurance policies and annuity products currently in force. These obligations are estimated using actuarial methods and consist primarily of reserves for annuity contracts, life insurance benefits, GMDB contracts (GMDB contracts are fully reinsured, see Note 10 for additional information) and certain life and accident insurance products of our international businesses to be sold.

Obligations for annuities represent specified periodic benefits to be paid to an individual or groups of individuals over their remaining lives. Obligations for life insurance policies and GMDB contracts represent benefits expected to be paid to policyholders, net of future premiums expected to be received. Management estimates these obligations based on assumptions as to premiums, interest rates, mortality or morbidity, future claim adjudication expenses and surrenders, allowing for adverse deviation as appropriate. Mortality, morbidity and surrender assumptions are based on the Company's own experience and published actuarial tables. Interest rate

assumptions are based on management's judgment considering the Company's experience and future expectations and range from 1% to 9%. Obligations for the direct and assumed run-off settlement annuity business include adjustments for realized and unrealized investment returns consistent with GAAP when a premium deficiency exists. As of December 31, 2021, approximately 18% of the liability for future policy benefits was supported by assets held in trust for the benefit of the ceding company under reinsurance agreements.

Accounting policy. The Company uses actuarial principles and assumptions that are consistently applied each reporting period and recognizes the actuarial best estimate of the ultimate liability along with a margin for adverse deviation. This approach is consistent with actuarial standards of practice that the liabilities be adequate under moderately adverse conditions.

The Company compares key assumptions used to establish the medical costs payable to actual experience for each reporting period. The unpaid claims liability is adjusted through current period shareholders' net income when actual experience differs from these assumptions. Additionally, the Company evaluates expected future developments and emerging trends that may impact key assumptions. The process used to determine this liability requires the Company to make critical accounting estimates that involve considerable judgment, reflecting the variability inherent in forecasting future claim payments. These estimates are highly sensitive to changes in the Company's key assumptions, specifically completion factors and medical cost trend.

The liability is primarily calculated using "completion factors" developed by comparing the claim incurral date to the date claims were paid. Completion factors are impacted by several key items including changes in: 1) electronic (auto-adjudication) versus manual claim processing; 2) frequency and timeliness of provider claims submissions; 3) number of customers and 4) the mix of products. The Company uses historical completion factors combined with an analysis of current trends and operational factors to develop current estimates of completion factors. The Company estimates the liability for claims incurred in each month by applying the current estimates of completion factors to the current paid claims data. This approach implicitly assumes that historical completion rates will be a useful indicator for the current period.

The Company relies more heavily on medical cost trend analysis that reflects expected claim payment patterns and other relevant operational considerations for more recent months. Medical cost trend is primarily impacted by medical service utilization and unit costs that are affected by changes in the level and mix of health benefits offered, including inpatient, outpatient and pharmacy, the impact of copays and deductibles, changes in provider practices and changes in consumer demographics and consumption behavior.



(In millions)	2021		2020		2019
Beginning balance	$	3,695	$	3,336	$	3,090
Less: Reinsurance and other amounts recoverable	237		318		280
Beginning balance, net	3,458		3,018		2,810

Incurred costs related to:
Current year	31,755		27,494		26,026
Prior years	(219)		(144)		(180)
Total incurred	31,536		27,350		25,846
Paid costs related to:
Current year	27,929		24,187		23,176
Prior years	3,065		2,723		2,462
Total paid	30,994		26,910		25,638

Ending balance, net	4,000		3,458		3,018
Add: Reinsurance and other amounts recoverable	261		237		318
Ending balance	$	4,261	$	3,695	$	3,336

Reinsurance and other amounts recoverable reflect amounts due from reinsurers and policyholders to cover incurred but not reported and pending claims of certain business for which the Company administers the plan benefits without any right of offset. See Note 10 for additional information on reinsurance.

Variances in incurred costs related to prior years' unpaid claims and claim expenses that resulted from the differences between actual experience and the Company's key assumptions for the years ended December 31 were as follows:

The following table depicts the incurred and paid claims development as of December 31, 2021 (net of reinsurance), claims frequency metrics and incurred but not reported liabilities reported in the Cigna Healthcare segment. The information about incurred and paid claims development for the year ended December 31, 2020 is presented as supplementary information and is unaudited.


	Incurred Costs
Incurral Year	2020 (Unaudited)		2021		Unpaid Claims & Claim Expenses	Claims Frequency
(In millions)
2020	$	26,532	$	26,332	156	4.7	million
2021			30,735		3,696	5.1	million
Cumulative incurred costs for the periods presented			$	57,067

	Cumulative Costs Paid
Incurral Year	2020 (Unaudited)		2021
(In millions)
2020	$	23,347	$	26,176
2021			27,039
Cumulative paid costs for the periods presented			$	53,215

Outstanding liabilities for the periods presented, net of reinsurance			$	3,852
Other long-duration liabilities not included in development table above			148
Net unpaid claims and claims expenses - Cigna Healthcare			4,000
Reinsurance and other amounts recoverable			261
Unpaid claims and claim expenses - Cigna Healthcare			$	4,261

There is no single or common claim frequency metric used in the health care industry. The Company believes a relevant metric for its health insurance business is the number of customers for whom an insured medical claim was paid. Customers for whom no insured medical claim was paid are excluded from the calculation. Claims that did not result in a liability are not included in the frequency metric.

Accounting policy. Liabilities for unpaid claims and claim expenses are established by book of business within Other Operations including the international businesses to be sold. Unpaid claims and claim expenses within the Other Operations consist of (1) case or claims reserves for reported claims that are unpaid as of the balance sheet date; (2) incurred but not reported reserves for claims when the insured event has occurred but has not been reported to the Company and (3) loss adjustment expense reserves for the expected costs of settling these claims. The Company consistently estimates incurred but not yet reported losses using actuarial principles and assumptions based on historical and projected claim incidence patterns, claim size and the expected payment period. The Company recognizes the actuarial best estimate of the ultimate liability within a level of confidence, consistent with actuarial standards of practice that the liabilities be adequate under moderately adverse conditions. The Company immediately records an adjustment in Medical costs and other benefit expenses when estimates of these liabilities change.

See Note 4 for a discussion of the divestiture of the Group Disability and Life business on December 31, 2020. Prior to the sale, the liabilities for unpaid claims and claim expenses in the Group Disability and Life business reflected reserves for long-term and short-term disability, life insurance and accident products. The majority of the unpaid claim liability related to disability claims that was measured as the present value of estimated future benefit payments, including expected development, for each reported claim that was receiving benefit payments over the expected disability period or pending a decision on eligibility for benefits.

Liability balance details. The liability details for unpaid claims and claim expenses are as follows. The liability no longer includes the International Health businesses now reported in Cigna Healthcare following our change in segment reporting. Prior year rollforwards have been updated to reflect the segment change.

Activity in the unpaid claims and claim expenses for international businesses held for sale and, prior to the sale, Group Disability and Life (see Note 4 for further information) 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 largely reinsured.


(In millions)	2021 (1)		2020		2019
Beginning balance	$	452	$	5,372	$	5,039
Less: Reinsurance	45		169		140
Beginning balance, net	407		5,203		4,899
Incurred claims related to:
Current year	982		4,205		3,958
Prior years:
Interest accretion	—		154		152
All other incurred	11		48		(25)
Total incurred	993		4,407		4,085
Paid claims related to:
Current year	738		2,392		2,163
Prior years	227		1,690		1,607
Total paid	965		4,082		3,770

Foreign currency	(34)		21		(11)
Divestiture of Group Disability and Life business (2)	—		(5,142)		—
Ending balance, net	401		407		5,203
Add: Reinsurance	46		45		169
Ending balance	$	447	$	452	$	5,372

(2) Includes Group Disability and Life reserves sold or reinsured to New York Life Insurance Company as part of the sale of the Group Disability and Life business and immaterial retained balances which are now excluded from this table.