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Insurance and Contractholder Liabilities (Tables)
 6 Months Ended
Jun. 30, 2024
Insurance Loss Reserves [Abstract]  
Summary of Insurance and Contractholder Liabilities, Activity in the Unpaid Claims Liability and Liability Details for Unpaid Claims and Claim Expenses
The Company's insurance and contractholder liabilities were comprised of the following:
June 30, 2024December 31, 2023June 30, 2023
(In millions)CurrentNon-currentTotalCurrentNon-currentTotalTotal
Unpaid claims and claim expenses
Cigna Healthcare
$5,124 $78 $5,202 $5,017 $75 $5,092 $5,336 
Other Operations165 151 316 99 154 253 297 
Future policy benefits
Cigna Healthcare
90 506 596 97 518 615 595 
Other Operations162 3,200 3,362 163 3,375 3,538 3,587 
Contractholder deposit funds
Cigna Healthcare
10 125 135 12 133 145 158 
Other Operations360 6,021 6,381 362 6,178 6,540 6,647 
Market risk benefits25 840 865 37 966 1,003 1,069 
Unearned premiums737 28 765 846 22 868 1,425 
Total6,673 10,949 17,622 6,633 11,421 18,054 
Insurance and contractholder liabilities classified as liabilities of businesses held for sale (1)
(1,057)(500)(1,557)(1,119)(517)(1,636)
Total insurance and contractholder liabilities$5,616 $10,449 $16,065 $5,514 $10,904 $16,418 $19,114 
(1) Amounts classified as liabilities of businesses held for sale include $900 million of Unpaid claims, $417 million of Future policy benefits, $129 million of Unearned premiums and $111 million of Contractholder deposit funds as of June 30, 2024 and $823 million of Unpaid claims, $429 million of Future policy benefits, $261 million of Unearned premiums and $123 million of Contractholder deposit funds as of December 31, 2023.
Activity, net of intercompany transactions, in the unpaid claims liability for the Cigna Healthcare segment was as follows:
Six Months Ended June 30,
(In millions)
2024 (1)
2023
Beginning balance$5,092 $4,176 
Less: Reinsurance and other amounts recoverable236 221 
Beginning balance, net4,856 3,955 
Incurred costs related to:
Current year18,821 17,974 
Prior years(284)(202)
Total incurred18,537 17,772 
Paid costs related to:
Current year14,397 13,408 
Prior years3,960 3,199 
Total paid18,357 16,607 
Ending balance, net5,036 5,120 
Add: Reinsurance and other amounts recoverable166 216 
Ending balance$5,202 $5,336 
(1) Includes unpaid claims amounts classified as liabilities of businesses held for sale. As of June 30, 2024 and December 31, 2023, $900 million and $823 million classified as liabilities of businesses held for sale, respectively.
Variances in Incurred Costs Related to Prior Years' Unpaid Claims and Claims Expenses
Variances in incurred costs related to prior years' unpaid claims and claim expenses that resulted from the differences between actual experience and the Company's key assumptions were as follows:
Six Months Ended June 30,
20242023
(Dollars in millions)$
% (1)
$
% (2)
Actual completion factors$83 0.2 %$29 0.1 %
Medical cost trend201 0.6 173 0.5 
Total favorable variance$284 0.8 %$202 0.6 %
(1)Percentage of current year incurred costs as reported for the year ended December 31, 2023.
(2)Percentage of current year incurred costs as reported for the year ended December 31, 2022.
Future Policy Benefit Activity
The weighted average interest rates applied and duration for future policy benefits in the Cigna Healthcare segment, consisting primarily of supplemental health products including individual Medicare supplement, limited benefit health products and individual private medical insurance, were as follows:
As of
June 30, 2024June 30, 2023
Interest accretion rate 2.70 %2.20 %
Current discount rate 5.31 %5.36 %
Weighted average duration 7.8 years7.8 years
The present values of expected net premiums and expected future policy benefits for the Cigna Healthcare segment were as follows:
Six Months Ended June 30,
(In millions)
2024 (1)
2023
Present value of expected net premiums
Beginning balance$9,233 $8,557 
Reversal of effect of beginning of period discount rate assumptions1,154 1,537 
Effect of assumption changes and actual variances from expected experience (2)
(90)51 
Issuances and lapses 848 570 
Net premiums collected(699)(658)
Interest and other (3)
142 106 
Ending balance at original discount rate10,588 10,163 
Effect of end of period discount rate assumptions(1,357)(1,491)
Ending balance (4)
$9,231 $8,672 
Present value of expected policy benefits
Beginning balance$9,633 $8,945 
Reversal of effect of discount rate assumptions1,220 1,611 
Effect of assumption changes and actual variances from expected experience (2)
(87)54 
Issuances and lapses 855 558 
Benefit payments(725)(661)
Interest and other (3)
147 121 
Ending balance at original discount rate11,043 10,628 
Effect of discount rate assumptions(1,432)(1,565)
Ending balance (5)
$9,611 $9,063 
Liability for future policy benefits $380 $391 
Other (6)
216 204 
Total liability for future policy benefits (1)(7)
$596 $595 
(1)Includes $417 million and $429 million of future policy benefits classified as liabilities of businesses held for sale in the Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023, respectively.
(2)Includes the effect of actual variances from expectations, which (decreased) increased the total liability for future policy benefits by $(2) million and $2 million, respectively, for the six months ended June 30, 2024 and June 30, 2023.
(3)Includes the foreign exchange rate impact of translating from transactional and functional currency to United States dollar and the impact of flooring the liability at zero. The flooring impact is calculated at the cohort level after discounting the reserves at the current discount rate.
(4)As of June 30, 2024 and June 30, 2023 undiscounted expected future gross premiums were $18.9 billion and $17.7 billion, respectively. As of June 30, 2024 and June 30, 2023 discounted expected future gross premiums were $13.2 billion and $12.3 billion, respectively.
(5)As of June 30, 2024 and June 30, 2023, undiscounted expected future policy benefits were $13.7 billion and $12.9 billion, respectively.
(6)The liability for future policyholder benefits includes immaterial businesses shown as reconciling items above, most of which are in run-off.
(7)$73 million and $154 million reported in Reinsurance recoverables in the Consolidated Balance Sheets as of June 30, 2024 and June 30, 2023, respectively, relate to the liability for future policy benefits. Additionally, $80 million of reinsurance recoverables are reported in assets of businesses held for sale in the Consolidated Balance Sheets as of June 30, 2024.
The weighted average interest rates applied and duration for future policy benefits in Other Operations, consisting of annuity and life insurance products, were as follows:
As of
June 30, 2024June 30, 2023
Interest accretion rate 5.64 %5.64 %
Current discount rate 5.38 %5.02 %
Weighted average duration 11.2 years11.7 years
Summary of Market Risk Benefit
Market risk benefits activity was as follows:
Six Months Ended June 30,
(Dollars in millions)20242023
Balance, beginning of year$1,003 $1,268 
Balance, beginning of year, before the effect of nonperformance risk (own credit risk)1,085 1,379 
Changes due to expected run-off(6)(14)
Changes due to capital markets versus expected(133)(194)
Changes due to policyholder behavior versus expected(17)8 
Assumption changes— (32)
Balance, end of period, before the effect of changes in nonperformance risk (own credit risk)929 1,147 
Nonperformance risk (own credit risk), end of period(64)(78)
Balance, end of period$865 $1,069 
Reinsured market risk benefit, end of period$927 $1,143 
Effective Exit of Variable Annuity Reinsurance Business
The Company entered into an agreement with Berkshire to effectively exit the variable annuity reinsurance business via a reinsurance transaction in 2013. Variable annuity contracts are accounted for as assumed and ceded reinsurance and categorized as market risk benefits as discussed in Note 9 to the Consolidated Financial Statements. Berkshire reinsured 100% of the Company's future cash flows in this business, net of other reinsurance arrangements existing at that time. The reinsurance agreement is subject to an overall limit with approximately $3.0 billion remaining at June 30, 2024. As a result of the reinsurance transaction, amounts payable are offset by a corresponding reinsurance recoverable, provided the increased recoverable remains within the overall Berkshire limit.
(In millions)
Reinsurer (1)
June 30, 2024December 31, 2023
Collateral and Other Terms
at June 30, 2024
Berkshire$762 $873 
90% were secured by assets in a trust.
Sun Life Assurance Company of Canada75 92 
Liberty Re (Bermuda) Ltd.85 104 
100% were secured by assets in a trust.
SCOR SE27 31 
75% were secured by a letter of credit.
Market risk benefits (2)
$949 $1,100 
(1)All reinsurers are rated A- equivalent and higher by an NRSRO.
(2)Includes incurred but not reported ("IBNR") and outstanding claims of $22 million as of June 30, 2024 and $19 million as of December 31, 2023. These amounts are excluded from market risk benefits as of June 30, 2024 in Note 9 and Note 10A to the Consolidated Financial Statements.
Account Value, Net Amount at Risk and the Number of Contractholders for Guarantees Assumed in the Event of Death
The following table presents the net amount at risk and the average attained age of contractholders (weighted by exposure) for contracts assumed by the Company. The net amount at risk is the amount the Company would have to pay to contractholders if all deaths or annuitizations occurred as of the earliest possible date in accordance with the insurance contract. The Company should be reimbursed in full for these payments unless the Berkshire reinsurance limit is exceeded, as discussed further in Note 10 to the Consolidated Financial Statements.
(Dollars in millions, excludes impact of reinsurance ceded)June 30, 2024June 30, 2023
Net amount at risk$1,391 $1,871 
Average attained age of contractholders (weighted by exposure)77.8 years76.3 years