Fair Value

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value

Fair Value

The preparation of the Company’s unaudited condensed consolidated financial statements in accordance with GAAP requires certain assets and liabilities to be reflected at their fair value and others to be reflected on another basis, such as an adjusted historical cost basis. The Company’s assets and liabilities carried at fair value have been classified within one of three levels of a hierarchy established by GAAP. The following are the levels of the hierarchy and a brief description of the type of valuation information (“valuation inputs”) that qualifies a financial asset or liability for each level:

•Level 1 – Unadjusted quoted prices for identical assets or liabilities in active markets.

•Level 2 – Valuation inputs other than Level 1 that are based on observable market data. These include: quoted prices for similar assets in active markets, quoted prices for identical assets in inactive markets, valuation inputs that are observable that are not prices (such as interest rates and credit risks) and valuation inputs that are derived from or corroborated by observable markets.

•Level 3 – Developed from unobservable data, reflecting the Company’s assumptions.

For a description of the methods and assumptions that are used to estimate the fair value and determine the fair value hierarchy classification of each class of financial instrument, see Note 5 ‘‘Fair Value’’ in the 2023 Form 10-K.

There were no financial liabilities measured at fair value on a recurring basis on the unaudited condensed consolidated balance sheets at June 30, 2024 or December 31, 2023. Financial assets measured at fair value on a recurring basis on the unaudited condensed consolidated balance sheets at June 30, 2024 and December 31, 2023 were as follows:

In millions	Level 1		Level 2		Level 3		Total
June 30, 2024
Cash and cash equivalents	$	4,663	$	7,844	$	—	$	12,507
Debt securities:
U.S. government securities	2,515		23		—		2,538
States, municipalities and political subdivisions	—		1,323		—		1,323
U.S. corporate securities	—		11,273		27		11,300
Foreign securities	—		2,553		—		2,553
Residential mortgage-backed securities	—		781		—		781
Commercial mortgage-backed securities	—		1,103		10		1,113
Other asset-backed securities	—		4,191		15		4,206
Redeemable preferred securities	—		17		—		17
Total debt securities	2,515		21,264		52		23,831
Equity securities	217		—		88		305
Total	$	7,395	$	29,108	$	140	$	36,643
December 31, 2023
Cash and cash equivalents	$	2,174	$	6,022	$	—	$	8,196
Debt securities:
U.S. government securities	2,013		23		—		2,036
States, municipalities and political subdivisions	—		2,215		—		2,215
U.S. corporate securities	—		9,814		29		9,843
Foreign securities	—		2,512		—		2,512
Residential mortgage-backed securities	—		810		—		810
Commercial mortgage-backed securities	—		975		—		975
Other asset-backed securities	—		3,302		—		3,302
Redeemable preferred securities	—		20		—		20
Total debt securities	2,013		19,671		29		21,713
Equity securities	194		—		79		273
Total	$	4,381	$	25,693	$	108	$	30,182

During the three and six months ended June 30, 2024, there were no transfers into or out of Level 3. During the three and six months ended June 30, 2023 there were $13 million and $42 million, respectively, of transfers out of Level 3.

The carrying value and estimated fair value classified by level of fair value hierarchy for financial instruments carried on the unaudited condensed consolidated balance sheets at adjusted cost or contract value at June 30, 2024 and December 31, 2023 were as follows:

	Carrying Value		Estimated Fair Value
In millions			Level 1		Level 2		Level 3		Total
June 30, 2024
Assets:
Mortgage loans	$	1,402	$	—	$	—	$	1,356	$	1,356
Equity securities (1)	588		N/A		N/A		N/A		N/A
Liabilities:
Investment contract liabilities:
With a fixed maturity	1		—		—		1		1
Without a fixed maturity	322		—		—		281		281
Long-term debt	66,374		60,840		—		—		60,840
December 31, 2023
Assets:
Mortgage loans	$	1,311	$	—	$	—	$	1,274	$	1,274
Equity securities (1)	534		N/A		N/A		N/A		N/A
Liabilities:
Investment contract liabilities:
With a fixed maturity	1		—		—		1		1
Without a fixed maturity	312		—		—		279		279
Long-term debt	61,410		58,451		—		—		58,451

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(1)It was not practical to estimate the fair value of these cost-method investments as it represents shares of unlisted companies.

Separate Accounts assets relate to the Company’s large case pensions products which represent funds maintained to meet specific objectives of contract holders. Since contract holders bear the investment risk of these assets, a corresponding Separate Accounts liability has been established equal to the assets. These assets and liabilities are carried at fair value. Separate Accounts financial assets as of June 30, 2024 and December 31, 2023 were as follows:

	June 30, 2024								December 31, 2023
In millions	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	—	$	162	$	—	$	162	$	2	$	166	$	—	$	168
Debt securities	589		1,816		—		2,405		558		1,949		—		2,507
Common/collective trusts	—		571		—		571		—		529		—		529
Total (1)	$	589	$	2,549	$	—	$	3,138	$	560	$	2,644	$	—	$	3,204

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(1)Excludes $49 million and $46 million of other receivables at June 30, 2024 and December 31, 2023, respectively.