v3.24.2
Fair Value
 6 Months Ended
Jun. 30, 2024
Fair Value Disclosures [Abstract]  
Fair Value Fair Value
Assets and liabilities recorded at fair value in our consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. These assets and liabilities are classified into one of three levels of hierarchy defined by GAAP.
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 7, “Fair Value,” to our audited consolidated financial statements as of and for the year ended December 31, 2023 included in Part II, Item 8 of our 2023 Annual Report on Form 10-K.
A summary of fair value measurements by level for assets and liabilities measured at fair value on a recurring basis at June 30, 2024 and December 31, 2023 is as follows:
Level ILevel IILevel IIITotal
June 30, 2024
Assets:
Cash equivalents$1,508$—$—$1,508
Fixed maturity securities, available-for-sale:
United States Government securities—1,713—1,713
Government sponsored securities—125—125
Foreign government securities—69—69
States, municipalities and political subdivisions, tax-exempt—3,519—3,519
Corporate securities—15,5666215,628
Residential mortgage-backed securities—3,85373,860
Commercial mortgage-backed securities—1,892—1,892
Other asset-backed securities—2,1767672,943
Total fixed maturity securities, available-for-sale—28,91383629,749
Equity securities:
Exchange traded funds481——481
Common equity securities1322—35
Private equity securities——7878
Total equity securities4942278594
Other invested assets - common equity securities19——19
Securities lending collateral—2,701—2,701
Derivatives - other assets—6—6
Total assets$2,021$31,642$914$34,577
Percentage of total assets at fair value
6%92%2%100%
Liabilities:
Derivatives - other liabilities$—$(55)$—$(55)
Total liabilities$—$(55)$—$(55)
December 31, 2023
Assets:
Cash equivalents$2,210$—$—$2,210
Fixed maturity securities, available-for-sale:
United States Government securities—1,844—1,844
Government sponsored securities—110—110
Foreign government securities—4—4
States, municipalities and political subdivisions, tax-exempt—3,902—3,902
Corporate securities—14,5324614,578
Residential mortgage-backed securities—3,83023,832
Commercial mortgage-backed securities—2,047—2,047
Other asset-backed securities—3,6345394,173
Total fixed maturity securities, available-for-sale—29,90358730,490
Equity securities:
Exchange traded funds106——106
Common equity securities1233—45
Private equity securities——7878
Total equity securities1183378229
Other invested assets - common equity securities111——111
Securities lending collateral—2,382—2,382
Derivatives - other assets—10—10
Total assets$2,439$32,328$665$35,432
Percentage of total assets at fair value
7%91%2%100%
Liabilities:
Derivatives - other liabilities$—$(40)$—$(40)
Total liabilities$—$(40)$—$(40)
There were no individually material transfers into or out of Level III during the three and six months ended June 30, 2024 or 2023. There were no adjustments to quoted market prices obtained from the pricing services during the three and six months ended June 30, 2024 or 2023.
Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances. As disclosed in Note 3, “Business Acquisitions and Divestitures,” we completed our acquisition of Paragon in the first quarter of 2024 and the acquisition of BioPlus in the first quarter of 2023. The net assets acquired in our acquisitions of Paragon and BioPlus and resulting goodwill and other intangible assets were recorded at fair value primarily using Level III inputs. The majority of tangible assets acquired and liabilities assumed were recorded at their carrying values as of the acquisition date, as their carrying values approximated their fair values due to their short-term nature. The fair values of goodwill and other intangible assets acquired in our acquisitions of Paragon and BioPlus were internally estimated based on the income approach. The income approach estimates fair value based on the present value of the cash flows that the assets could be expected to generate in the future. We developed internal estimates for the expected cash flows and discount rate in the present value calculation. Also in 2023, we entered into a shareholder’s agreement which included certain put and call options on our minority interest ownership of Liberty Dental. The resulting net put option liability was recorded at its fair value measured at the date of acquisition using Level III inputs with an election not to mark the derivative to market. Other than the assets acquired and liabilities assumed in our acquisitions of Paragon and BioPlus and the net put option on Liberty Dental, there were no material assets or liabilities measured at fair value on a nonrecurring basis during the three and six months ended June 30, 2024 or 2023.
In addition to the preceding disclosures on assets recorded at fair value in the consolidated balance sheets, FASB guidance also requires the disclosure of fair values for certain other financial instruments for which it is practicable to estimate fair value, whether or not such values are recognized in our consolidated balance sheets.
Non-financial instruments such as property and equipment, other current assets, deferred income taxes, intangible assets and certain financial instruments, such as policy liabilities, are excluded from the fair value disclosures. Therefore, the fair value amounts cannot be aggregated to determine our underlying economic value.
The carrying amounts reported in the consolidated balance sheets for cash, premium receivables, self-funded receivables, other receivables, unearned income, accounts payable and accrued expenses, and certain other current liabilities approximate fair value because of the short-term nature of these items. These assets and liabilities are not listed in the table below.
See Note 7, “Fair Value,” to our audited consolidated financial statements as of and for the year ended December 31, 2023 included in Part II, Item 8 of our 2023 Annual Report on Form 10-K for details on the methods and assumptions used to estimate the fair value of each class of financial instrument that is recorded at its carrying value in our consolidated balance sheets.
A summary of the estimated fair values by level of each class of financial instrument that is recorded at its carrying value on our consolidated balance sheets at June 30, 2024 and December 31, 2023 is as follows:
 Carrying
Value		Estimated Fair Value
 Level ILevel IILevel IIITotal
June 30, 2024
Assets:
Other invested assets$6,791 $— $— $6,760 $6,760 
Liabilities:
Debt:
Short-term borrowings225 — 225 — 225 
Notes27,461 — 25,326 — 25,326 
December 31, 2023
Assets:
Other invested assets$5,996 $— $— $5,972 $5,972 
Liabilities:
Debt:
Short-term borrowings225 — 225 — 225 
Notes24,895 — 23,569 — 23,569