v3.24.1.u1
Insurance and Contractholder Liabilities (Tables)
 3 Months Ended
Mar. 31, 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:
March 31, 2024December 31, 2023March 31, 2023
(In millions)CurrentNon-currentTotalCurrentNon-currentTotalTotal
Unpaid claims and claim expenses
Cigna Healthcare
$5,786 $77 $5,863 $5,017 $75 $5,092 $4,959 
Other Operations99 161 260 99 154 253 272 
Future policy benefits
Cigna Healthcare
92 515 607 97 518 615 601 
Other Operations163 3,297 3,460 163 3,375 3,538 3,631 
Contractholder deposit funds
Cigna Healthcare
11 130 141 12 133 145 163 
Other Operations365 6,087 6,452 362 6,178 6,540 6,670 
Market risk benefits26 865 891 37 966 1,003 1,220 
Unearned premiums815 21 836 846 22 868 1,440 
Total7,357 11,153 18,510 6,633 11,421 18,054 
Insurance and contractholder liabilities classified as liabilities of businesses held for sale (1)
(1,569)(512)(2,081)(1,119)(517)(1,636)
Total insurance and contractholder liabilities$5,788 $10,641 $16,429 $5,514 $10,904 $16,418 $18,956 
(1) Amounts classified as liabilities of businesses held for sale include $1,378 million of Unpaid claims, $427 million of Future policy benefits, $161 million of Unearned premiums and $115 million of Contractholder deposit funds as of March 31, 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:
Three Months Ended March 31,
(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 year9,452 9,041 
Prior years(226)(144)
Total incurred9,226 8,897 
Paid costs related to:
Current year5,072 5,316 
Prior years3,352 2,795 
Total paid8,424 8,111 
Ending balance, net5,658 4,741 
Add: Reinsurance and other amounts recoverable205 218 
Ending balance$5,863 $4,959 
(1) Includes unpaid claims amounts classified as liabilities of businesses held for sale. As of March 31, 2024 and December 31, 2023, $1,378 million and $823 million classified as liabilities of businesses held for sale, respectively.
Variances in Incurred Costs Related to Prior Years' Unpaid Claims and Claims Expenses
Variances in incurred costs related to prior years' unpaid claims and claim expenses that resulted from the differences between actual experience and the Company's key assumptions were as follows:
Three Months Ended March 31,
20242023
(Dollars in millions)$
% (1)
$
% (2)
Actual completion factors$76 0.2 %$1 — %
Medical cost trend150 0.4 143 0.5 
Total favorable variance$226 0.6 %$144 0.5 %
(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
March 31, 2024March 31, 2023
Interest accretion rate 2.56 %2.59 %
Current discount rate 5.11 %5.29 %
Weighted average duration 7.8 years8.1 years
The present values of expected net premiums and expected future policy benefits for the Cigna Healthcare segment were as follows:
Three Months Ended March 31,
(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 
Issuances and lapses 446 306 
Net premiums collected(350)(326)
Interest and other (2)
73 56 
Ending balance at original discount rate10,556 10,130 
Effect of end of period discount rate assumptions(1,309)(1,312)
Ending balance (3)
$9,247 $8,818 
Present value of expected policy benefits
Beginning balance$9,633 $8,945 
Reversal of effect of discount rate assumptions1,220 1,611 
Issuances and lapses 457 307 
Benefit payments(362)(326)
Interest and other (2)
71 58 
Ending balance at original discount rate11,019 10,595 
Effect of discount rate assumptions(1,381)(1,378)
Ending balance (4)
$9,638 $9,217 
Liability for future policy benefits $391 $399 
Other (5)
216 202 
Total liability for future policy benefits (6)(7)
$607 $601 
(1)Includes future policy benefits amounts classified as liabilities of businesses held for sale.
(2)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.
(3)As of March 31, 2024 and March 31, 2023 undiscounted expected future gross premiums were $19.0 billion and $17.6 billion, respectively. As of March 31, 2024 and March 31, 2023 discounted expected future gross premiums were $13.3 billion and $12.5 billion, respectively.
(4)As of March 31, 2024 and March 31, 2023, undiscounted expected future policy benefits were $13.6 billion and $12.8 billion, respectively.
(5)The liability for future policyholder benefits includes immaterial businesses shown as reconciling items above, most of which are in run-off.
(6)$72 million and $154 million reported in Reinsurance recoverables in the Consolidated Balance Sheets as of March 31, 2024 and March 31, 2023, respectively, relate to the liability for future policy benefits. Additionally, $81 million of reinsurance recoverables are reported in assets of businesses held for sale in the Consolidated Balance Sheets as of March 31, 2024.
(7)Includes $427 million of future policy benefits classified as liabilities of businesses held for sale in the Consolidated Balance Sheets as of March 31, 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
March 31, 2024March 31, 2023
Interest accretion rate 5.64 %5.64 %
Current discount rate 5.16 %4.95 %
Weighted average duration 11.3 years11.7 years
Summary of Market Risk Benefit
Market risk benefits activity was as follows:
Three Months Ended March 31,
(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(3)(6)
Changes due to capital markets versus expected(113)(41)
Changes due to policyholder behavior versus expected(14)6 
Assumption changes— (33)
Balance, end of period, before the effect of changes in nonperformance risk (own credit risk)955 1,305 
Nonperformance risk (own credit risk), end of period(64)(85)
Balance, end of period$891 $1,220 
Reinsured market risk benefit, end of period$951 $1,301 
(In millions)
Reinsurer (1)
March 31, 2024December 31, 2023
Collateral and Other Terms
at March 31, 2024
Berkshire$777 $873 
100% were secured by assets in a trust.
Sun Life Assurance Company of Canada79 92 
Liberty Re (Bermuda) Ltd.91 104 
100% were secured by assets in a trust.
SCOR SE27 31 
75% were secured by a letter of credit.
Market risk benefits (2)
$974 $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 $23 million as of March 31, 2024 and $19 million as of December 31, 2023. These amounts are excluded from market risk benefits at of March 31, 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)March 31, 2024March 31, 2023
Net amount at risk$1,441 $2,183 
Average attained age of contractholders (weighted by exposure)77.7 years75.4 years