(in millions) | TPC | Other Subsidiaries | TRV | Eliminations | Consolidated | |||||||||||||||
Revenues | ||||||||||||||||||||
Premiums | $ | 18,508 | $ | 8,551 | $ | — | $ | — | $ | 27,059 | ||||||||||
Net investment income | 1,704 | 738 | 32 | — | 2,474 | |||||||||||||||
Fee income | 432 | — | — | — | 432 | |||||||||||||||
Net realized investment gains (losses) (1) | 118 | 9 | (13 | ) | — | 114 | ||||||||||||||
Other revenues | 96 | 112 | — | (5 | ) | 203 | ||||||||||||||
Total revenues | 20,858 | 9,410 | 19 | (5 | ) | 30,282 | ||||||||||||||
Claims and expenses | ||||||||||||||||||||
Claims and claim adjustment expenses | 12,344 | 5,947 | — | — | 18,291 | |||||||||||||||
Amortization of deferred acquisition costs | 2,972 | 1,409 | — | — | 4,381 | |||||||||||||||
General and administrative expenses | 2,947 | 1,335 | 20 | (5 | ) | 4,297 | ||||||||||||||
Interest expense | 48 | — | 304 | — | 352 | |||||||||||||||
Total claims and expenses | 18,311 | 8,691 | 324 | (5 | ) | 27,321 | ||||||||||||||
Income (loss) before income taxes | 2,547 | 719 | (305 | ) | — | 2,961 | ||||||||||||||
Income tax expense (benefit) | 437 | 115 | (114 | ) | — | 438 | ||||||||||||||
Net income of subsidiaries | — | — | 2,714 | (2,714 | ) | — | ||||||||||||||
Net income | $ | 2,110 | $ | 604 | $ | 2,523 | $ | (2,714 | ) | $ | 2,523 |
(1) | Total other-than-temporary impairments (OTTI) for the year ended December 31, 2018, and the amounts comprising total OTTI that were recognized in net realized investment gains (losses) and in other comprehensive income (OCI), were as follows: |
(in millions) | TPC | Other Subsidiaries | TRV | Eliminations | Consolidated | |||||||||||||||
Total OTTI losses | $ | (1 | ) | $ | — | $ | — | $ | — | $ | (1 | ) | ||||||||
OTTI losses recognized in net realized investment gains (losses) | $ | (1 | ) | $ | — | $ | — | $ | — | $ | (1 | ) | ||||||||
OTTI losses recognized in OCI | $ | — | $ | — | $ | — | $ | — | $ | — |
(in millions) | TPC | Other Subsidiaries | TRV | Eliminations | Consolidated | |||||||||||||||
Revenues | ||||||||||||||||||||
Premiums | $ | 17,562 | $ | 8,121 | $ | — | $ | — | $ | 25,683 | ||||||||||
Net investment income | 1,627 | 759 | 24 | (13 | ) | 2,397 | ||||||||||||||
Fee income | 447 | — | — | — | 447 | |||||||||||||||
Net realized investment gains (1) | 19 | 131 | 66 | — | 216 | |||||||||||||||
Other revenues | 101 | 68 | — | (10 | ) | 159 | ||||||||||||||
Total revenues | 19,756 | 9,079 | 90 | (23 | ) | 28,902 | ||||||||||||||
Claims and expenses | ||||||||||||||||||||
Claims and claim adjustment expenses | 11,735 | 5,732 | — | — | 17,467 | |||||||||||||||
Amortization of deferred acquisition costs | 2,820 | 1,346 | — | — | 4,166 | |||||||||||||||
General and administrative expenses | 2,906 | 1,249 | 25 | (10 | ) | 4,170 | ||||||||||||||
Interest expense | 48 | — | 321 | — | 369 | |||||||||||||||
Total claims and expenses | 17,509 | 8,327 | 346 | (10 | ) | 26,172 | ||||||||||||||
Income (loss) before income taxes | 2,247 | 752 | (256 | ) | (13 | ) | 2,730 | |||||||||||||
Income tax expense (benefit) | 519 | 290 | (130 | ) | (5 | ) | 674 | |||||||||||||
Net income of subsidiaries | — | — | 2,190 | (2,190 | ) | — | ||||||||||||||
Net income | $ | 1,728 | $ | 462 | $ | 2,064 | $ | (2,198 | ) | $ | 2,056 |
(1) | Total other-than-temporary impairments (OTTI) for the year ended December 31, 2017, and the amounts comprising total OTTI that were recognized in net realized investment gains and in other comprehensive income (OCI), were as follows: |
(in millions) | TPC | Other Subsidiaries | TRV | Eliminations | Consolidated | |||||||||||||||
Total OTTI losses | $ | (4 | ) | $ | (9 | ) | $ | — | $ | — | $ | (13 | ) | |||||||
OTTI losses recognized in net realized investment gains | $ | (5 | ) | $ | (9 | ) | $ | — | $ | — | $ | (14 | ) | |||||||
OTTI gains recognized in OCI | $ | 1 | $ | — | $ | — | $ | — | $ | 1 |
(in millions) | TPC | Other Subsidiaries | TRV | Eliminations | Consolidated | |||||||||||||||
Revenues | ||||||||||||||||||||
Premiums | $ | 16,788 | $ | 7,746 | $ | — | $ | — | $ | 24,534 | ||||||||||
Net investment income | 1,569 | 720 | 13 | — | 2,302 | |||||||||||||||
Fee income | 458 | — | — | — | 458 | |||||||||||||||
Net realized investment gains (losses) (1) | 30 | 39 | (1 | ) | — | 68 | ||||||||||||||
Other revenues | 248 | 36 | — | (21 | ) | 263 | ||||||||||||||
Total revenues | 19,093 | 8,541 | 12 | (21 | ) | 27,625 | ||||||||||||||
Claims and expenses | ||||||||||||||||||||
Claims and claim adjustment expenses | 10,232 | 4,838 | — | — | 15,070 | |||||||||||||||
Amortization of deferred acquisition costs | 2,702 | 1,283 | — | — | 3,985 | |||||||||||||||
General and administrative expenses | 2,928 | 1,242 | 5 | (21 | ) | 4,154 | ||||||||||||||
Interest expense | 48 | — | 315 | — | 363 | |||||||||||||||
Total claims and expenses | 15,910 | 7,363 | 320 | (21 | ) | 23,572 | ||||||||||||||
Income (loss) before income taxes | 3,183 | 1,178 | (308 | ) | — | 4,053 | ||||||||||||||
Income tax expense (benefit) | 999 | 208 | (168 | ) | — | 1,039 | ||||||||||||||
Net income of subsidiaries | — | — | 3,154 | (3,154 | ) | — | ||||||||||||||
Net income | $ | 2,184 | $ | 970 | $ | 3,014 | $ | (3,154 | ) | $ | 3,014 |
(1) | Total other-than-temporary impairments (OTTI) for the year ended December 31, 2016, and the amounts comprising total OTTI that were recognized in net realized investment gains (losses) and in other comprehensive income (OCI), were as follows: |
(in millions) | TPC | Other Subsidiaries | TRV | Eliminations | Consolidated | |||||||||||||||
Total OTTI losses | $ | (19 | ) | $ | (20 | ) | $ | (1 | ) | $ | — | $ | (40 | ) | ||||||
OTTI losses recognized in net realized investment gains (losses) | $ | (13 | ) | $ | (15 | ) | $ | (1 | ) | $ | — | $ | (29 | ) | ||||||
OTTI losses recognized in OCI | $ | (6 | ) | $ | (5 | ) | $ | — | $ | — | $ | (11 | ) |
(in millions) | TPC | Other Subsidiaries | TRV | Eliminations | Consolidated | |||||||||||||||
Net income | $ | 2,110 | $ | 604 | $ | 2,523 | $ | (2,714 | ) | $ | 2,523 | |||||||||
Other comprehensive loss: | ||||||||||||||||||||
Changes in net unrealized gains on investment securities: | ||||||||||||||||||||
Having no credit losses recognized in the consolidated statement of income | (1,028 | ) | (461 | ) | — | — | (1,489 | ) | ||||||||||||
Having credit losses recognized in the consolidated statement of income | (20 | ) | (7 | ) | — | — | (27 | ) | ||||||||||||
Net changes in benefit plan assets and obligations | 1 | (4 | ) | (53 | ) | — | (56 | ) | ||||||||||||
Net changes in unrealized foreign currency translation | (144 | ) | (103 | ) | — | — | (247 | ) | ||||||||||||
Other comprehensive loss before income taxes and other comprehensive loss of subsidiaries | (1,191 | ) | (575 | ) | (53 | ) | — | (1,819 | ) | |||||||||||
Income tax benefit | (231 | ) | (101 | ) | (17 | ) | — | (349 | ) | |||||||||||
Other comprehensive loss, net of taxes, before other comprehensive loss of subsidiaries | (960 | ) | (474 | ) | (36 | ) | — | (1,470 | ) | |||||||||||
Other comprehensive loss of subsidiaries | — | — | (1,434 | ) | 1,434 | — | ||||||||||||||
Other comprehensive loss | (960 | ) | (474 | ) | (1,470 | ) | 1,434 | (1,470 | ) | |||||||||||
Comprehensive income | $ | 1,150 | $ | 130 | $ | 1,053 | $ | (1,280 | ) | $ | 1,053 |
(in millions) | TPC | Other Subsidiaries | TRV | Eliminations | Consolidated | |||||||||||||||
Net income | $ | 1,728 | $ | 462 | $ | 2,064 | $ | (2,198 | ) | $ | 2,056 | |||||||||
Other comprehensive income (loss): | ||||||||||||||||||||
Changes in net unrealized gains on investment securities: | ||||||||||||||||||||
Having no credit losses recognized in the consolidated statement of income | 313 | 25 | (44 | ) | — | 294 | ||||||||||||||
Having credit losses recognized in the consolidated statement of income | 6 | 2 | — | — | 8 | |||||||||||||||
Net changes in benefit plan assets and obligations | (1 | ) | 8 | 22 | — | 29 | ||||||||||||||
Net changes in unrealized foreign currency translation | 83 | 108 | — | — | 191 | |||||||||||||||
Other comprehensive income (loss) before income taxes and other comprehensive income of subsidiaries | 401 | 143 | (22 | ) | — | 522 | ||||||||||||||
Income tax expense | 98 | 10 | 2 | — | 110 | |||||||||||||||
Other comprehensive income (loss), net of taxes, before other comprehensive income of subsidiaries | 303 | 133 | (24 | ) | — | 412 | ||||||||||||||
Other comprehensive income of subsidiaries | — | — | 436 | (436 | ) | — | ||||||||||||||
Other comprehensive income | 303 | 133 | 412 | (436 | ) | 412 | ||||||||||||||
Comprehensive income | $ | 2,031 | $ | 595 | $ | 2,476 | $ | (2,634 | ) | $ | 2,468 |
(in millions) | TPC | Other Subsidiaries | TRV | Eliminations | Consolidated | |||||||||||||||
Net income | $ | 2,184 | $ | 970 | $ | 3,014 | $ | (3,154 | ) | $ | 3,014 | |||||||||
Other comprehensive loss: | ||||||||||||||||||||
Changes in net unrealized gains on investment securities: | ||||||||||||||||||||
Having no credit losses recognized in the consolidated statement of income | (696 | ) | (198 | ) | 11 | — | (883 | ) | ||||||||||||
Having credit losses recognized in the consolidated statement of income | 11 | 10 | — | — | 21 | |||||||||||||||
Net changes in benefit plan assets and obligations | 25 | 11 | (20 | ) | — | 16 | ||||||||||||||
Net changes in unrealized foreign currency translation | 73 | (114 | ) | — | — | (41 | ) | |||||||||||||
Other comprehensive loss before income taxes and other comprehensive loss of subsidiaries | (587 | ) | (291 | ) | (9 | ) | — | (887 | ) | |||||||||||
Income tax benefit | (222 | ) | (66 | ) | (1 | ) | — | (289 | ) | |||||||||||
Other comprehensive loss, net of taxes, before other comprehensive loss of subsidiaries | (365 | ) | (225 | ) | (8 | ) | — | (598 | ) | |||||||||||
Other comprehensive loss of subsidiaries | — | — | (590 | ) | 590 | — | ||||||||||||||
Other comprehensive loss | (365 | ) | (225 | ) | (598 | ) | 590 | (598 | ) | |||||||||||
Comprehensive income | $ | 1,819 | $ | 745 | $ | 2,416 | $ | (2,564 | ) | $ | 2,416 |
(in millions) | TPC | Other Subsidiaries | TRV | Eliminations | Consolidated | |||||||||||||||
Assets | ||||||||||||||||||||
Fixed maturities, available for sale, at fair value (amortized cost $63,601) | $ | 43,683 | $ | 19,697 | $ | 84 | $ | — | $ | 63,464 | ||||||||||
Equity securities, at fair value (cost $382) | 105 | 92 | 171 | — | 368 | |||||||||||||||
Real estate investments | 2 | 902 | — | — | 904 | |||||||||||||||
Short-term securities | 1,855 | 759 | 1,371 | — | 3,985 | |||||||||||||||
Other investments | 2,746 | 810 | 1 | — | 3,557 | |||||||||||||||
Total investments | 48,391 | 22,260 | 1,627 | — | 72,278 | |||||||||||||||
Cash | 181 | 192 | — | — | 373 | |||||||||||||||
Investment income accrued | 434 | 187 | 3 | — | 624 | |||||||||||||||
Premiums receivable | 5,089 | 2,417 | — | — | 7,506 | |||||||||||||||
Reinsurance recoverables | 5,904 | 2,466 | — | — | 8,370 | |||||||||||||||
Ceded unearned premiums | 522 | 56 | — | — | 578 | |||||||||||||||
Deferred acquisition costs | 1,930 | 190 | — | — | 2,120 | |||||||||||||||
Deferred taxes | 167 | 302 | (24 | ) | — | 445 | ||||||||||||||
Contractholder receivables | 3,867 | 918 | — | — | 4,785 | |||||||||||||||
Goodwill | 2,578 | 1,368 | — | (9 | ) | 3,937 | ||||||||||||||
Other intangible assets | 224 | 121 | — | — | 345 | |||||||||||||||
Investment in subsidiaries | — | — | 26,993 | (26,993 | ) | — | ||||||||||||||
Other assets | 2,220 | 15 | 669 | (32 | ) | 2,872 | ||||||||||||||
Total assets | $ | 71,507 | $ | 30,492 | $ | 29,268 | $ | (27,034 | ) | $ | 104,233 | |||||||||
Liabilities | ||||||||||||||||||||
Claims and claim adjustment expense reserves | $ | 34,093 | $ | 16,575 | $ | — | $ | — | $ | 50,668 | ||||||||||
Unearned premium reserves | 9,414 | 4,141 | — | — | 13,555 | |||||||||||||||
Contractholder payables | 3,867 | 918 | — | — | 4,785 | |||||||||||||||
Payables for reinsurance premiums | 169 | 120 | — | — | 289 | |||||||||||||||
Debt | 693 | 32 | 5,871 | (32 | ) | 6,564 | ||||||||||||||
Other liabilities | 4,133 | 849 | 496 | — | 5,478 | |||||||||||||||
Total liabilities | 52,369 | 22,635 | 6,367 | (32 | ) | 81,339 | ||||||||||||||
Shareholders’ equity | ||||||||||||||||||||
Common stock (1,750.0 shares authorized; 263.7 shares issued and 263.6 shares outstanding) | — | 401 | 23,144 | (401 | ) | 23,144 | ||||||||||||||
Additional paid-in capital | 11,634 | 7,023 | — | (18,657 | ) | — | ||||||||||||||
Retained earnings | 8,065 | 879 | 35,211 | (8,951 | ) | 35,204 | ||||||||||||||
Accumulated other comprehensive loss | (561 | ) | (446 | ) | (1,859 | ) | 1,007 | (1,859 | ) | |||||||||||
Treasury stock, at cost (510.9 shares) | — | — | (33,595 | ) | — | (33,595 | ) | |||||||||||||
Total shareholders’ equity | 19,138 | 7,857 | 22,901 | (27,002 | ) | 22,894 | ||||||||||||||
Total liabilities and shareholders’ equity | $ | 71,507 | $ | 30,492 | $ | 29,268 | $ | (27,034 | ) | $ | 104,233 |
(in millions) | TPC | Other Subsidiaries | TRV | Eliminations | Consolidated | |||||||||||||||
Assets | ||||||||||||||||||||
Fixed maturities, available for sale, at fair value (amortized cost $61,316) | $ | 43,240 | $ | 19,372 | $ | 82 | $ | — | $ | 62,694 | ||||||||||
Equity securities, available for sale, at fair value (cost $440) | 161 | 111 | 181 | — | 453 | |||||||||||||||
Real estate investments | 54 | 878 | — | — | 932 | |||||||||||||||
Short-term securities | 2,751 | 914 | 1,230 | — | 4,895 | |||||||||||||||
Other investments | 2,673 | 854 | 1 | — | 3,528 | |||||||||||||||
Total investments | 48,879 | 22,129 | 1,494 | — | 72,502 | |||||||||||||||
Cash | 157 | 187 | — | — | 344 | |||||||||||||||
Investment income accrued | 418 | 183 | 5 | — | 606 | |||||||||||||||
Premiums receivable | 4,852 | 2,292 | — | — | 7,144 | |||||||||||||||
Reinsurance recoverables | 5,842 | 2,467 | — | — | 8,309 | |||||||||||||||
Ceded unearned premiums | 493 | 58 | — | — | 551 | |||||||||||||||
Deferred acquisition costs | 1,835 | 190 | — | — | 2,025 | |||||||||||||||
Deferred taxes | (89 | ) | 173 | (14 | ) | — | 70 | |||||||||||||
Contractholder receivables | 3,854 | 921 | — | — | 4,775 | |||||||||||||||
Goodwill | 2,592 | 1,368 | — | (9 | ) | 3,951 | ||||||||||||||
Other intangible assets | 202 | 140 | — | — | 342 | |||||||||||||||
Investment in subsidiaries | — | — | 27,946 | (27,946 | ) | — | ||||||||||||||
Other assets | 2,181 | (3 | ) | 700 | (14 | ) | 2,864 | |||||||||||||
Total assets | $ | 71,216 | $ | 30,105 | $ | 30,131 | $ | (27,969 | ) | $ | 103,483 | |||||||||
Liabilities | ||||||||||||||||||||
Claims and claim adjustment expense reserves | $ | 33,386 | $ | 16,264 | $ | — | $ | — | $ | 49,650 | ||||||||||
Unearned premium reserves | 8,957 | 3,958 | — | — | 12,915 | |||||||||||||||
Contractholder payables | 3,854 | 921 | — | — | 4,775 | |||||||||||||||
Payables for reinsurance premiums | 165 | 109 | — | — | 274 | |||||||||||||||
Debt | 693 | 14 | 5,878 | (14 | ) | 6,571 | ||||||||||||||
Other liabilities | 4,161 | 882 | 524 | — | 5,567 | |||||||||||||||
Total liabilities | 51,216 | 22,148 | 6,402 | (14 | ) | 79,752 | ||||||||||||||
Shareholders’ equity | ||||||||||||||||||||
Common stock (1,750.0 shares authorized; 271.5 shares issued and 271.4 shares outstanding) | — | 390 | 22,886 | (390 | ) | 22,886 | ||||||||||||||
Additional paid-in capital | 11,634 | 6,972 | — | (18,606 | ) | — | ||||||||||||||
Retained earnings | 8,036 | 594 | 33,460 | (8,628 | ) | 33,462 | ||||||||||||||
Accumulated other comprehensive income (loss) | 330 | 1 | (343 | ) | (331 | ) | (343 | ) | ||||||||||||
Treasury stock, at cost (500.9 shares) | — | — | (32,274 | ) | — | (32,274 | ) | |||||||||||||
Total shareholders’ equity | 20,000 | 7,957 | 23,729 | (27,955 | ) | 23,731 | ||||||||||||||
Total liabilities and shareholders’ equity | $ | 71,216 | $ | 30,105 | $ | 30,131 | $ | (27,969 | ) | $ | 103,483 |
(in millions) | TPC | Other Subsidiaries | TRV | Eliminations | Consolidated | |||||||||||||||
Cash flows from operating activities | ||||||||||||||||||||
Net income | $ | 2,110 | $ | 604 | $ | 2,523 | $ | (2,714 | ) | $ | 2,523 | |||||||||
Net adjustments to reconcile net income to net cash provided by operating activities | 1,141 | 605 | (363 | ) | 474 | 1,857 | ||||||||||||||
Net cash provided by operating activities | 3,251 | 1,209 | 2,160 | (2,240 | ) | 4,380 | ||||||||||||||
Cash flows from investing activities | ||||||||||||||||||||
Proceeds from maturities of fixed maturities | 5,158 | 1,906 | 22 | — | 7,086 | |||||||||||||||
Proceeds from sales of investments: | ||||||||||||||||||||
Fixed maturities | 2,449 | 1,096 | 1 | — | 3,546 | |||||||||||||||
Equity securities | 65 | 107 | 6 | — | 178 | |||||||||||||||
Real estate investments | 66 | 8 | — | — | 74 | |||||||||||||||
Other investments | 403 | 108 | — | — | 511 | |||||||||||||||
Purchases of investments: | ||||||||||||||||||||
Fixed maturities | (9,404 | ) | (4,096 | ) | (26 | ) | — | (13,526 | ) | |||||||||||
Equity securities | (8 | ) | (99 | ) | (10 | ) | — | (117 | ) | |||||||||||
Real estate investments | (1 | ) | (73 | ) | — | — | (74 | ) | ||||||||||||
Other investments | (454 | ) | (83 | ) | — | — | (537 | ) | ||||||||||||
Net sales (purchases) of short-term securities | 895 | 154 | (141 | ) | — | 908 | ||||||||||||||
Securities transactions in course of settlement | (80 | ) | 24 | — | — | (56 | ) | |||||||||||||
Acquisition, net of cash acquired | — | (4 | ) | — | — | (4 | ) | |||||||||||||
Other | (310 | ) | (8 | ) | — | — | (318 | ) | ||||||||||||
Net cash used in investing activities | (1,221 | ) | (960 | ) | (148 | ) | — | (2,329 | ) | |||||||||||
Cash flows from financing activities | ||||||||||||||||||||
Treasury stock acquired — share repurchase authorization | — | — | (1,270 | ) | — | (1,270 | ) | |||||||||||||
Treasury stock acquired — net employee share-based compensation | — | — | (51 | ) | — | (51 | ) | |||||||||||||
Dividends paid to shareholders | — | — | (814 | ) | — | (814 | ) | |||||||||||||
Payment of debt | — | — | (600 | ) | — | (600 | ) | |||||||||||||
Issuance of debt | — | 18 | 591 | (18 | ) | 591 | ||||||||||||||
Issuance of common stock — employee share options | — | — | 132 | — | 132 | |||||||||||||||
Dividends paid to parent company | (2,003 | ) | (255 | ) | — | 2,258 | — | |||||||||||||
Net cash used in financing activities | (2,003 | ) | (237 | ) | (2,012 | ) | 2,240 | (2,012 | ) | |||||||||||
Effect of exchange rate changes on cash | (3 | ) | (7 | ) | — | — | (10 | ) | ||||||||||||
Net increase in cash | 24 | 5 | — | — | 29 | |||||||||||||||
Cash at beginning of year | 157 | 187 | — | — | 344 | |||||||||||||||
Cash at end of year | $ | 181 | $ | 192 | $ | — | $ | — | $ | 373 | ||||||||||
Supplemental disclosure of cash flow information | ||||||||||||||||||||
Income taxes paid (received) | $ | 437 | $ | 254 | $ | (283 | ) | $ | — | $ | 408 | |||||||||
Interest paid | $ | 47 | $ | — | $ | 300 | $ | — | $ | 347 |
(in millions) | TPC | Other Subsidiaries | TRV | Eliminations | Consolidated | |||||||||||||||
Cash flows from operating activities | ||||||||||||||||||||
Net income | $ | 1,728 | $ | 462 | $ | 2,064 | $ | (2,198 | ) | $ | 2,056 | |||||||||
Net adjustments to reconcile net income to net cash provided by operating activities | 1,500 | 701 | (32 | ) | (77 | ) | 2,092 | |||||||||||||
Net cash provided by operating activities | 3,228 | 1,163 | 2,032 | (2,275 | ) | 4,148 | ||||||||||||||
Cash flows from investing activities | ||||||||||||||||||||
Proceeds from maturities of fixed maturities | 6,576 | 2,168 | 6 | — | 8,750 | |||||||||||||||
Proceeds from sales of investments: | ||||||||||||||||||||
Fixed maturities | 1,007 | 846 | 1 | — | 1,854 | |||||||||||||||
Equity securities | 97 | 414 | 254 | — | 765 | |||||||||||||||
Real estate investments | — | 23 | — | — | 23 | |||||||||||||||
Other investments | 357 | 124 | — | (13 | ) | 468 | ||||||||||||||
Purchases of investments: | ||||||||||||||||||||
Fixed maturities | (8,513 | ) | (3,697 | ) | (40 | ) | — | (12,250 | ) | |||||||||||
Equity securities | (68 | ) | (133 | ) | (258 | ) | — | (459 | ) | |||||||||||
Real estate investments | (1 | ) | (58 | ) | — | — | (59 | ) | ||||||||||||
Other investments | (444 | ) | (97 | ) | — | — | (541 | ) | ||||||||||||
Net sales (purchases) of short-term securities | (303 | ) | (120 | ) | 397 | — | (26 | ) | ||||||||||||
Securities transactions in course of settlement | (55 | ) | 5 | 3 | — | (47 | ) | |||||||||||||
Acquisition, net of cash acquired | — | 25 | (477 | ) | 13 | (439 | ) | |||||||||||||
Other | (244 | ) | 3 | — | — | (241 | ) | |||||||||||||
Net cash used in investing activities | (1,591 | ) | (497 | ) | (114 | ) | — | (2,202 | ) | |||||||||||
Cash flows from financing activities | ||||||||||||||||||||
Treasury stock acquired — share repurchase authorization | — | — | (1,378 | ) | — | (1,378 | ) | |||||||||||||
Treasury stock acquired — net employee share-based compensation | — | — | (62 | ) | — | (62 | ) | |||||||||||||
Dividends paid to shareholders | — | — | (785 | ) | — | (785 | ) | |||||||||||||
Payment of debt | — | — | (657 | ) | — | (657 | ) | |||||||||||||
Issuance of debt | — | 14 | 789 | (14 | ) | 789 | ||||||||||||||
Issuance of common stock — employee share options | — | — | 173 | — | 173 | |||||||||||||||
Dividends paid to parent company | (1,624 | ) | (665 | ) | — | 2,289 | — | |||||||||||||
Net cash used in financing activities | (1,624 | ) | (651 | ) | (1,920 | ) | 2,275 | (1,920 | ) | |||||||||||
Effect of exchange rate changes on cash | 3 | 8 | — | — | 11 | |||||||||||||||
Net increase (decrease) in cash | 16 | 23 | (2 | ) | — | 37 | ||||||||||||||
Cash at beginning of year | 141 | 164 | 2 | — | 307 | |||||||||||||||
Cash at end of year | $ | 157 | $ | 187 | $ | — | $ | — | $ | 344 | ||||||||||
Supplemental disclosure of cash flow information | ||||||||||||||||||||
Income taxes paid (received) | $ | 481 | $ | 206 | $ | (173 | ) | $ | — | $ | 514 | |||||||||
Interest paid | $ | 47 | $ | — | $ | 320 | $ | — | $ | 367 |
(in millions) | TPC | Other Subsidiaries | TRV | Eliminations | Consolidated | |||||||||||||||
Cash flows from operating activities | ||||||||||||||||||||
Net income | $ | 2,184 | $ | 970 | $ | 3,014 | $ | (3,154 | ) | $ | 3,014 | |||||||||
Net adjustments to reconcile net income to net cash provided by operating activities | 1,282 | 139 | (122 | ) | 156 | 1,455 | ||||||||||||||
Net cash provided by operating activities | 3,466 | 1,109 | 2,892 | (2,998 | ) | 4,469 | ||||||||||||||
Cash flows from investing activities | ||||||||||||||||||||
Proceeds from maturities of fixed maturities | 6,589 | 2,380 | 6 | — | 8,975 | |||||||||||||||
Proceeds from sales of investments: | ||||||||||||||||||||
Fixed maturities | 768 | 647 | 2 | — | 1,417 | |||||||||||||||
Equity securities | 47 | 45 | — | — | 92 | |||||||||||||||
Real estate investments | — | 69 | — | — | 69 | |||||||||||||||
Other investments | 386 | 180 | — | — | 566 | |||||||||||||||
Purchases of investments: | ||||||||||||||||||||
Fixed maturities | (7,921 | ) | (3,676 | ) | (12 | ) | — | (11,609 | ) | |||||||||||
Equity securities | (6 | ) | (42 | ) | (3 | ) | — | (51 | ) | |||||||||||
Real estate investments | (1 | ) | (47 | ) | — | — | (48 | ) | ||||||||||||
Other investments | (453 | ) | (127 | ) | — | — | (580 | ) | ||||||||||||
Net sales (purchases) of short-term securities | (501 | ) | 383 | (81 | ) | — | (199 | ) | ||||||||||||
Securities transactions in course of settlement | 12 | (32 | ) | (1 | ) | — | (21 | ) | ||||||||||||
Other | (331 | ) | (10 | ) | 3 | — | (338 | ) | ||||||||||||
Net cash used in investing activities | (1,411 | ) | (230 | ) | (86 | ) | — | (1,727 | ) | |||||||||||
Cash flows from financing activities | ||||||||||||||||||||
Treasury stock acquired — share repurchase authorization | — | — | (2,400 | ) | — | (2,400 | ) | |||||||||||||
Treasury stock acquired — net employee share-based compensation | — | — | (72 | ) | — | (72 | ) | |||||||||||||
Dividends paid to shareholders | — | — | (757 | ) | — | (757 | ) | |||||||||||||
Payment of debt | — | — | (400 | ) | — | (400 | ) | |||||||||||||
Issuance of debt | — | — | 491 | — | 491 | |||||||||||||||
Issuance of common stock — employee share options | — | — | 332 | — | 332 | |||||||||||||||
Dividends paid to parent company | (2,140 | ) | (858 | ) | — | 2,998 | — | |||||||||||||
Net cash used in financing activities | (2,140 | ) | (858 | ) | (2,806 | ) | 2,998 | (2,806 | ) | |||||||||||
Effect of exchange rate changes on cash | 1 | (10 | ) | — | — | (9 | ) | |||||||||||||
Net increase (decrease) in cash | (84 | ) | 11 | — | — | (73 | ) | |||||||||||||
Cash at beginning of year | 225 | 153 | 2 | — | 380 | |||||||||||||||
Cash at end of year | $ | 141 | $ | 164 | $ | 2 | $ | — | $ | 307 | ||||||||||
Supplemental disclosure of cash flow information | ||||||||||||||||||||
Income taxes paid (received) | $ | 737 | $ | 287 | $ | (132 | ) | $ | — | $ | 892 | |||||||||
Interest paid | $ | 47 | $ | — | $ | 311 | $ | — | $ | 358 |
(in millions) | TPC | Other Subsidiaries | TRV | Eliminations | Consolidated | |||||||||||||||
Net income | $ | 2,110 | $ | 604 | $ | 2,523 | $ | (2,714 | ) | $ | 2,523 | |||||||||
Other comprehensive loss: | ||||||||||||||||||||
Changes in net unrealized gains on investment securities: | ||||||||||||||||||||
Having no credit losses recognized in the consolidated statement of income | (1,028 | ) | (461 | ) | — | — | (1,489 | ) | ||||||||||||
Having credit losses recognized in the consolidated statement of income | (20 | ) | (7 | ) | — | — | (27 | ) | ||||||||||||
Net changes in benefit plan assets and obligations | 1 | (4 | ) | (53 | ) | — | (56 | ) | ||||||||||||
Net changes in unrealized foreign currency translation | (144 | ) | (103 | ) | — | — | (247 | ) | ||||||||||||
Other comprehensive loss before income taxes and other comprehensive loss of subsidiaries | (1,191 | ) | (575 | ) | (53 | ) | — | (1,819 | ) | |||||||||||
Income tax benefit | (231 | ) | (101 | ) | (17 | ) | — | (349 | ) | |||||||||||
Other comprehensive loss, net of taxes, before other comprehensive loss of subsidiaries | (960 | ) | (474 | ) | (36 | ) | — | (1,470 | ) | |||||||||||
Other comprehensive loss of subsidiaries | — | — | (1,434 | ) | 1,434 | — | ||||||||||||||
Other comprehensive loss | (960 | ) | (474 | ) | (1,470 | ) | 1,434 | (1,470 | ) | |||||||||||
Comprehensive income | $ | 1,150 | $ | 130 | $ | 1,053 | $ | (1,280 | ) | $ | 1,053 |
(in millions) | TPC | Other Subsidiaries | TRV | Eliminations | Consolidated | |||||||||||||||
Net income | $ | 1,728 | $ | 462 | $ | 2,064 | $ | (2,198 | ) | $ | 2,056 | |||||||||
Other comprehensive income (loss): | ||||||||||||||||||||
Changes in net unrealized gains on investment securities: | ||||||||||||||||||||
Having no credit losses recognized in the consolidated statement of income | 313 | 25 | (44 | ) | — | 294 | ||||||||||||||
Having credit losses recognized in the consolidated statement of income | 6 | 2 | — | — | 8 | |||||||||||||||
Net changes in benefit plan assets and obligations | (1 | ) | 8 | 22 | — | 29 | ||||||||||||||
Net changes in unrealized foreign currency translation | 83 | 108 | — | — | 191 | |||||||||||||||
Other comprehensive income (loss) before income taxes and other comprehensive income of subsidiaries | 401 | 143 | (22 | ) | — | 522 | ||||||||||||||
Income tax expense | 98 | 10 | 2 | — | 110 | |||||||||||||||
Other comprehensive income (loss), net of taxes, before other comprehensive income of subsidiaries | 303 | 133 | (24 | ) | — | 412 | ||||||||||||||
Other comprehensive income of subsidiaries | — | — | 436 | (436 | ) | — | ||||||||||||||
Other comprehensive income | 303 | 133 | 412 | (436 | ) | 412 | ||||||||||||||
Comprehensive income | $ | 2,031 | $ | 595 | $ | 2,476 | $ | (2,634 | ) | $ | 2,468 |
(in millions) | TPC | Other Subsidiaries | TRV | Eliminations | Consolidated | |||||||||||||||
Net income | $ | 2,184 | $ | 970 | $ | 3,014 | $ | (3,154 | ) | $ | 3,014 | |||||||||
Other comprehensive loss: | ||||||||||||||||||||
Changes in net unrealized gains on investment securities: | ||||||||||||||||||||
Having no credit losses recognized in the consolidated statement of income | (696 | ) | (198 | ) | 11 | — | (883 | ) | ||||||||||||
Having credit losses recognized in the consolidated statement of income | 11 | 10 | — | — | 21 | |||||||||||||||
Net changes in benefit plan assets and obligations | 25 | 11 | (20 | ) | — | 16 | ||||||||||||||
Net changes in unrealized foreign currency translation | 73 | (114 | ) | — | — | (41 | ) | |||||||||||||
Other comprehensive loss before income taxes and other comprehensive loss of subsidiaries | (587 | ) | (291 | ) | (9 | ) | — | (887 | ) | |||||||||||
Income tax benefit | (222 | ) | (66 | ) | (1 | ) | — | (289 | ) | |||||||||||
Other comprehensive loss, net of taxes, before other comprehensive loss of subsidiaries | (365 | ) | (225 | ) | (8 | ) | — | (598 | ) | |||||||||||
Other comprehensive loss of subsidiaries | — | — | (590 | ) | 590 | — | ||||||||||||||
Other comprehensive loss | (365 | ) | (225 | ) | (598 | ) | 590 | (598 | ) | |||||||||||
Comprehensive income | $ | 1,819 | $ | 745 | $ | 2,416 | $ | (2,564 | ) | $ | 2,416 |
(in millions) | TPC | Other Subsidiaries | TRV | Eliminations | Consolidated | |||||||||||||||
Assets | ||||||||||||||||||||
Fixed maturities, available for sale, at fair value (amortized cost $63,601) | $ | 43,683 | $ | 19,697 | $ | 84 | $ | — | $ | 63,464 | ||||||||||
Equity securities, at fair value (cost $382) | 105 | 92 | 171 | — | 368 | |||||||||||||||
Real estate investments | 2 | 902 | — | — | 904 | |||||||||||||||
Short-term securities | 1,855 | 759 | 1,371 | — | 3,985 | |||||||||||||||
Other investments | 2,746 | 810 | 1 | — | 3,557 | |||||||||||||||
Total investments | 48,391 | 22,260 | 1,627 | — | 72,278 | |||||||||||||||
Cash | 181 | 192 | — | — | 373 | |||||||||||||||
Investment income accrued | 434 | 187 | 3 | — | 624 | |||||||||||||||
Premiums receivable | 5,089 | 2,417 | — | — | 7,506 | |||||||||||||||
Reinsurance recoverables | 5,904 | 2,466 | — | — | 8,370 | |||||||||||||||
Ceded unearned premiums | 522 | 56 | — | — | 578 | |||||||||||||||
Deferred acquisition costs | 1,930 | 190 | — | — | 2,120 | |||||||||||||||
Deferred taxes | 167 | 302 | (24 | ) | — | 445 | ||||||||||||||
Contractholder receivables | 3,867 | 918 | — | — | 4,785 | |||||||||||||||
Goodwill | 2,578 | 1,368 | — | (9 | ) | 3,937 | ||||||||||||||
Other intangible assets | 224 | 121 | — | — | 345 | |||||||||||||||
Investment in subsidiaries | — | — | 26,993 | (26,993 | ) | — | ||||||||||||||
Other assets | 2,220 | 15 | 669 | (32 | ) | 2,872 | ||||||||||||||
Total assets | $ | 71,507 | $ | 30,492 | $ | 29,268 | $ | (27,034 | ) | $ | 104,233 | |||||||||
Liabilities | ||||||||||||||||||||
Claims and claim adjustment expense reserves | $ | 34,093 | $ | 16,575 | $ | — | $ | — | $ | 50,668 | ||||||||||
Unearned premium reserves | 9,414 | 4,141 | — | — | 13,555 | |||||||||||||||
Contractholder payables | 3,867 | 918 | — | — | 4,785 | |||||||||||||||
Payables for reinsurance premiums | 169 | 120 | — | — | 289 | |||||||||||||||
Debt | 693 | 32 | 5,871 | (32 | ) | 6,564 | ||||||||||||||
Other liabilities | 4,133 | 849 | 496 | — | 5,478 | |||||||||||||||
Total liabilities | 52,369 | 22,635 | 6,367 | (32 | ) | 81,339 | ||||||||||||||
Shareholders’ equity | ||||||||||||||||||||
Common stock (1,750.0 shares authorized; 263.7 shares issued and 263.6 shares outstanding) | — | 401 | 23,144 | (401 | ) | 23,144 | ||||||||||||||
Additional paid-in capital | 11,634 | 7,023 | — | (18,657 | ) | — | ||||||||||||||
Retained earnings | 8,065 | 879 | 35,211 | (8,951 | ) | 35,204 | ||||||||||||||
Accumulated other comprehensive loss | (561 | ) | (446 | ) | (1,859 | ) | 1,007 | (1,859 | ) | |||||||||||
Treasury stock, at cost (510.9 shares) | — | — | (33,595 | ) | — | (33,595 | ) | |||||||||||||
Total shareholders’ equity | 19,138 | 7,857 | 22,901 | (27,002 | ) | 22,894 | ||||||||||||||
Total liabilities and shareholders’ equity | $ | 71,507 | $ | 30,492 | $ | 29,268 | $ | (27,034 | ) | $ | 104,233 |
(in millions) | TPC | Other Subsidiaries | TRV | Eliminations | Consolidated | |||||||||||||||
Assets | ||||||||||||||||||||
Fixed maturities, available for sale, at fair value (amortized cost $61,316) | $ | 43,240 | $ | 19,372 | $ | 82 | $ | — | $ | 62,694 | ||||||||||
Equity securities, available for sale, at fair value (cost $440) | 161 | 111 | 181 | — | 453 | |||||||||||||||
Real estate investments | 54 | 878 | — | — | 932 | |||||||||||||||
Short-term securities | 2,751 | 914 | 1,230 | — | 4,895 | |||||||||||||||
Other investments | 2,673 | 854 | 1 | — | 3,528 | |||||||||||||||
Total investments | 48,879 | 22,129 | 1,494 | — | 72,502 | |||||||||||||||
Cash | 157 | 187 | — | — | 344 | |||||||||||||||
Investment income accrued | 418 | 183 | 5 | — | 606 | |||||||||||||||
Premiums receivable | 4,852 | 2,292 | — | — | 7,144 | |||||||||||||||
Reinsurance recoverables | 5,842 | 2,467 | — | — | 8,309 | |||||||||||||||
Ceded unearned premiums | 493 | 58 | — | — | 551 | |||||||||||||||
Deferred acquisition costs | 1,835 | 190 | — | — | 2,025 | |||||||||||||||
Deferred taxes | (89 | ) | 173 | (14 | ) | — | 70 | |||||||||||||
Contractholder receivables | 3,854 | 921 | — | — | 4,775 | |||||||||||||||
Goodwill | 2,592 | 1,368 | — | (9 | ) | 3,951 | ||||||||||||||
Other intangible assets | 202 | 140 | — | — | 342 | |||||||||||||||
Investment in subsidiaries | — | — | 27,946 | (27,946 | ) | — | ||||||||||||||
Other assets | 2,181 | (3 | ) | 700 | (14 | ) | 2,864 | |||||||||||||
Total assets | $ | 71,216 | $ | 30,105 | $ | 30,131 | $ | (27,969 | ) | $ | 103,483 | |||||||||
Liabilities | ||||||||||||||||||||
Claims and claim adjustment expense reserves | $ | 33,386 | $ | 16,264 | $ | — | $ | — | $ | 49,650 | ||||||||||
Unearned premium reserves | 8,957 | 3,958 | — | — | 12,915 | |||||||||||||||
Contractholder payables | 3,854 | 921 | — | — | 4,775 | |||||||||||||||
Payables for reinsurance premiums | 165 | 109 | — | — | 274 | |||||||||||||||
Debt | 693 | 14 | 5,878 | (14 | ) | 6,571 | ||||||||||||||
Other liabilities | 4,161 | 882 | 524 | — | 5,567 | |||||||||||||||
Total liabilities | 51,216 | 22,148 | 6,402 | (14 | ) | 79,752 | ||||||||||||||
Shareholders’ equity | ||||||||||||||||||||
Common stock (1,750.0 shares authorized; 271.5 shares issued and 271.4 shares outstanding) | — | 390 | 22,886 | (390 | ) | 22,886 | ||||||||||||||
Additional paid-in capital | 11,634 | 6,972 | — | (18,606 | ) | — | ||||||||||||||
Retained earnings | 8,036 | 594 | 33,460 | (8,628 | ) | 33,462 | ||||||||||||||
Accumulated other comprehensive income (loss) | 330 | 1 | (343 | ) | (331 | ) | (343 | ) | ||||||||||||
Treasury stock, at cost (500.9 shares) | — | — | (32,274 | ) | — | (32,274 | ) | |||||||||||||
Total shareholders’ equity | 20,000 | 7,957 | 23,729 | (27,955 | ) | 23,731 | ||||||||||||||
Total liabilities and shareholders’ equity | $ | 71,216 | $ | 30,105 | $ | 30,131 | $ | (27,969 | ) | $ | 103,483 |
(in millions) | TPC | Other Subsidiaries | TRV | Eliminations | Consolidated | |||||||||||||||
Cash flows from operating activities | ||||||||||||||||||||
Net income | $ | 2,110 | $ | 604 | $ | 2,523 | $ | (2,714 | ) | $ | 2,523 | |||||||||
Net adjustments to reconcile net income to net cash provided by operating activities | 1,141 | 605 | (363 | ) | 474 | 1,857 | ||||||||||||||
Net cash provided by operating activities | 3,251 | 1,209 | 2,160 | (2,240 | ) | 4,380 | ||||||||||||||
Cash flows from investing activities | ||||||||||||||||||||
Proceeds from maturities of fixed maturities | 5,158 | 1,906 | 22 | — | 7,086 | |||||||||||||||
Proceeds from sales of investments: | ||||||||||||||||||||
Fixed maturities | 2,449 | 1,096 | 1 | — | 3,546 | |||||||||||||||
Equity securities | 65 | 107 | 6 | — | 178 | |||||||||||||||
Real estate investments | 66 | 8 | — | — | 74 | |||||||||||||||
Other investments | 403 | 108 | — | — | 511 | |||||||||||||||
Purchases of investments: | ||||||||||||||||||||
Fixed maturities | (9,404 | ) | (4,096 | ) | (26 | ) | — | (13,526 | ) | |||||||||||
Equity securities | (8 | ) | (99 | ) | (10 | ) | — | (117 | ) | |||||||||||
Real estate investments | (1 | ) | (73 | ) | — | — | (74 | ) | ||||||||||||
Other investments | (454 | ) | (83 | ) | — | — | (537 | ) | ||||||||||||
Net sales (purchases) of short-term securities | 895 | 154 | (141 | ) | — | 908 | ||||||||||||||
Securities transactions in course of settlement | (80 | ) | 24 | — | — | (56 | ) | |||||||||||||
Acquisition, net of cash acquired | — | (4 | ) | — | — | (4 | ) | |||||||||||||
Other | (310 | ) | (8 | ) | — | — | (318 | ) | ||||||||||||
Net cash used in investing activities | (1,221 | ) | (960 | ) | (148 | ) | — | (2,329 | ) | |||||||||||
Cash flows from financing activities | ||||||||||||||||||||
Treasury stock acquired — share repurchase authorization | — | — | (1,270 | ) | — | (1,270 | ) | |||||||||||||
Treasury stock acquired — net employee share-based compensation | — | — | (51 | ) | — | (51 | ) | |||||||||||||
Dividends paid to shareholders | — | — | (814 | ) | — | (814 | ) | |||||||||||||
Payment of debt | — | — | (600 | ) | — | (600 | ) | |||||||||||||
Issuance of debt | — | 18 | 591 | (18 | ) | 591 | ||||||||||||||
Issuance of common stock — employee share options | — | — | 132 | — | 132 | |||||||||||||||
Dividends paid to parent company | (2,003 | ) | (255 | ) | — | 2,258 | — | |||||||||||||
Net cash used in financing activities | (2,003 | ) | (237 | ) | (2,012 | ) | 2,240 | (2,012 | ) | |||||||||||
Effect of exchange rate changes on cash | (3 | ) | (7 | ) | — | — | (10 | ) | ||||||||||||
Net increase in cash | 24 | 5 | — | — | 29 | |||||||||||||||
Cash at beginning of year | 157 | 187 | — | — | 344 | |||||||||||||||
Cash at end of year | $ | 181 | $ | 192 | $ | — | $ | — | $ | 373 | ||||||||||
Supplemental disclosure of cash flow information | ||||||||||||||||||||
Income taxes paid (received) | $ | 437 | $ | 254 | $ | (283 | ) | $ | — | $ | 408 | |||||||||
Interest paid | $ | 47 | $ | — | $ | 300 | $ | — | $ | 347 |
(in millions) | TPC | Other Subsidiaries | TRV | Eliminations | Consolidated | |||||||||||||||
Cash flows from operating activities | ||||||||||||||||||||
Net income | $ | 1,728 | $ | 462 | $ | 2,064 | $ | (2,198 | ) | $ | 2,056 | |||||||||
Net adjustments to reconcile net income to net cash provided by operating activities | 1,500 | 701 | (32 | ) | (77 | ) | 2,092 | |||||||||||||
Net cash provided by operating activities | 3,228 | 1,163 | 2,032 | (2,275 | ) | 4,148 | ||||||||||||||
Cash flows from investing activities | ||||||||||||||||||||
Proceeds from maturities of fixed maturities | 6,576 | 2,168 | 6 | — | 8,750 | |||||||||||||||
Proceeds from sales of investments: | ||||||||||||||||||||
Fixed maturities | 1,007 | 846 | 1 | — | 1,854 | |||||||||||||||
Equity securities | 97 | 414 | 254 | — | 765 | |||||||||||||||
Real estate investments | — | 23 | — | — | 23 | |||||||||||||||
Other investments | 357 | 124 | — | (13 | ) | 468 | ||||||||||||||
Purchases of investments: | ||||||||||||||||||||
Fixed maturities | (8,513 | ) | (3,697 | ) | (40 | ) | — | (12,250 | ) | |||||||||||
Equity securities | (68 | ) | (133 | ) | (258 | ) | — | (459 | ) | |||||||||||
Real estate investments | (1 | ) | (58 | ) | — | — | (59 | ) | ||||||||||||
Other investments | (444 | ) | (97 | ) | — | — | (541 | ) | ||||||||||||
Net sales (purchases) of short-term securities | (303 | ) | (120 | ) | 397 | — | (26 | ) | ||||||||||||
Securities transactions in course of settlement | (55 | ) | 5 | 3 | — | (47 | ) | |||||||||||||
Acquisition, net of cash acquired | — | 25 | (477 | ) | 13 | (439 | ) | |||||||||||||
Other | (244 | ) | 3 | — | — | (241 | ) | |||||||||||||
Net cash used in investing activities | (1,591 | ) | (497 | ) | (114 | ) | — | (2,202 | ) | |||||||||||
Cash flows from financing activities | ||||||||||||||||||||
Treasury stock acquired — share repurchase authorization | — | — | (1,378 | ) | — | (1,378 | ) | |||||||||||||
Treasury stock acquired — net employee share-based compensation | — | — | (62 | ) | — | (62 | ) | |||||||||||||
Dividends paid to shareholders | — | — | (785 | ) | — | (785 | ) | |||||||||||||
Payment of debt | — | — | (657 | ) | — | (657 | ) | |||||||||||||
Issuance of debt | — | 14 | 789 | (14 | ) | 789 | ||||||||||||||
Issuance of common stock — employee share options | — | — | 173 | — | 173 | |||||||||||||||
Dividends paid to parent company | (1,624 | ) | (665 | ) | — | 2,289 | — | |||||||||||||
Net cash used in financing activities | (1,624 | ) | (651 | ) | (1,920 | ) | 2,275 | (1,920 | ) | |||||||||||
Effect of exchange rate changes on cash | 3 | 8 | — | — | 11 | |||||||||||||||
Net increase (decrease) in cash | 16 | 23 | (2 | ) | — | 37 | ||||||||||||||
Cash at beginning of year | 141 | 164 | 2 | — | 307 | |||||||||||||||
Cash at end of year | $ | 157 | $ | 187 | $ | — | $ | — | $ | 344 | ||||||||||
Supplemental disclosure of cash flow information | ||||||||||||||||||||
Income taxes paid (received) | $ | 481 | $ | 206 | $ | (173 | ) | $ | — | $ | 514 | |||||||||
Interest paid | $ | 47 | $ | — | $ | 320 | $ | — | $ | 367 |
(in millions) | TPC | Other Subsidiaries | TRV | Eliminations | Consolidated | |||||||||||||||
Cash flows from operating activities | ||||||||||||||||||||
Net income | $ | 2,184 | $ | 970 | $ | 3,014 | $ | (3,154 | ) | $ | 3,014 | |||||||||
Net adjustments to reconcile net income to net cash provided by operating activities | 1,282 | 139 | (122 | ) | 156 | 1,455 | ||||||||||||||
Net cash provided by operating activities | 3,466 | 1,109 | 2,892 | (2,998 | ) | 4,469 | ||||||||||||||
Cash flows from investing activities | ||||||||||||||||||||
Proceeds from maturities of fixed maturities | 6,589 | 2,380 | 6 | — | 8,975 | |||||||||||||||
Proceeds from sales of investments: | ||||||||||||||||||||
Fixed maturities | 768 | 647 | 2 | — | 1,417 | |||||||||||||||
Equity securities | 47 | 45 | — | — | 92 | |||||||||||||||
Real estate investments | — | 69 | — | — | 69 | |||||||||||||||
Other investments | 386 | 180 | — | — | 566 | |||||||||||||||
Purchases of investments: | ||||||||||||||||||||
Fixed maturities | (7,921 | ) | (3,676 | ) | (12 | ) | — | (11,609 | ) | |||||||||||
Equity securities | (6 | ) | (42 | ) | (3 | ) | — | (51 | ) | |||||||||||
Real estate investments | (1 | ) | (47 | ) | — | — | (48 | ) | ||||||||||||
Other investments | (453 | ) | (127 | ) | — | — | (580 | ) | ||||||||||||
Net sales (purchases) of short-term securities | (501 | ) | 383 | (81 | ) | — | (199 | ) | ||||||||||||
Securities transactions in course of settlement | 12 | (32 | ) | (1 | ) | — | (21 | ) | ||||||||||||
Other | (331 | ) | (10 | ) | 3 | — | (338 | ) | ||||||||||||
Net cash used in investing activities | (1,411 | ) | (230 | ) | (86 | ) | — | (1,727 | ) | |||||||||||
Cash flows from financing activities | ||||||||||||||||||||
Treasury stock acquired — share repurchase authorization | — | — | (2,400 | ) | — | (2,400 | ) | |||||||||||||
Treasury stock acquired — net employee share-based compensation | — | — | (72 | ) | — | (72 | ) | |||||||||||||
Dividends paid to shareholders | — | — | (757 | ) | — | (757 | ) | |||||||||||||
Payment of debt | — | — | (400 | ) | — | (400 | ) | |||||||||||||
Issuance of debt | — | — | 491 | — | 491 | |||||||||||||||
Issuance of common stock — employee share options | — | — | 332 | — | 332 | |||||||||||||||
Dividends paid to parent company | (2,140 | ) | (858 | ) | — | 2,998 | — | |||||||||||||
Net cash used in financing activities | (2,140 | ) | (858 | ) | (2,806 | ) | 2,998 | (2,806 | ) | |||||||||||
Effect of exchange rate changes on cash | 1 | (10 | ) | — | — | (9 | ) | |||||||||||||
Net increase (decrease) in cash | (84 | ) | 11 | — | — | (73 | ) | |||||||||||||
Cash at beginning of year | 225 | 153 | 2 | — | 380 | |||||||||||||||
Cash at end of year | $ | 141 | $ | 164 | $ | 2 | $ | — | $ | 307 | ||||||||||
Supplemental disclosure of cash flow information | ||||||||||||||||||||
Income taxes paid (received) | $ | 737 | $ | 287 | $ | (132 | ) | $ | — | $ | 892 | |||||||||
Interest paid | $ | 47 | $ | — | $ | 311 | $ | — | $ | 358 |
(in millions) | TPC | Other Subsidiaries | TRV | Eliminations | Consolidated | |||||||||||||||
Revenues | ||||||||||||||||||||
Premiums | $ | 18,508 | $ | 8,551 | $ | — | $ | — | $ | 27,059 | ||||||||||
Net investment income | 1,704 | 738 | 32 | — | 2,474 | |||||||||||||||
Fee income | 432 | — | — | — | 432 | |||||||||||||||
Net realized investment gains (losses) (1) | 118 | 9 | (13 | ) | — | 114 | ||||||||||||||
Other revenues | 96 | 112 | — | (5 | ) | 203 | ||||||||||||||
Total revenues | 20,858 | 9,410 | 19 | (5 | ) | 30,282 | ||||||||||||||
Claims and expenses | ||||||||||||||||||||
Claims and claim adjustment expenses | 12,344 | 5,947 | — | — | 18,291 | |||||||||||||||
Amortization of deferred acquisition costs | 2,972 | 1,409 | — | — | 4,381 | |||||||||||||||
General and administrative expenses | 2,947 | 1,335 | 20 | (5 | ) | 4,297 | ||||||||||||||
Interest expense | 48 | — | 304 | — | 352 | |||||||||||||||
Total claims and expenses | 18,311 | 8,691 | 324 | (5 | ) | 27,321 | ||||||||||||||
Income (loss) before income taxes | 2,547 | 719 | (305 | ) | — | 2,961 | ||||||||||||||
Income tax expense (benefit) | 437 | 115 | (114 | ) | — | 438 | ||||||||||||||
Net income of subsidiaries | — | — | 2,714 | (2,714 | ) | — | ||||||||||||||
Net income | $ | 2,110 | $ | 604 | $ | 2,523 | $ | (2,714 | ) | $ | 2,523 |
(1) | Total other-than-temporary impairments (OTTI) for the year ended December 31, 2018, and the amounts comprising total OTTI that were recognized in net realized investment gains (losses) and in other comprehensive income (OCI), were as follows: |
(in millions) | TPC | Other Subsidiaries | TRV | Eliminations | Consolidated | |||||||||||||||
Total OTTI losses | $ | (1 | ) | $ | — | $ | — | $ | — | $ | (1 | ) | ||||||||
OTTI losses recognized in net realized investment gains (losses) | $ | (1 | ) | $ | — | $ | — | $ | — | $ | (1 | ) | ||||||||
OTTI losses recognized in OCI | $ | — | $ | — | $ | — | $ | — | $ | — |
(in millions) | TPC | Other Subsidiaries | TRV | Eliminations | Consolidated | |||||||||||||||
Revenues | ||||||||||||||||||||
Premiums | $ | 17,562 | $ | 8,121 | $ | — | $ | — | $ | 25,683 | ||||||||||
Net investment income | 1,627 | 759 | 24 | (13 | ) | 2,397 | ||||||||||||||
Fee income | 447 | — | — | — | 447 | |||||||||||||||
Net realized investment gains (1) | 19 | 131 | 66 | — | 216 | |||||||||||||||
Other revenues | 101 | 68 | — | (10 | ) | 159 | ||||||||||||||
Total revenues | 19,756 | 9,079 | 90 | (23 | ) | 28,902 | ||||||||||||||
Claims and expenses | ||||||||||||||||||||
Claims and claim adjustment expenses | 11,735 | 5,732 | — | — | 17,467 | |||||||||||||||
Amortization of deferred acquisition costs | 2,820 | 1,346 | — | — | 4,166 | |||||||||||||||
General and administrative expenses | 2,906 | 1,249 | 25 | (10 | ) | 4,170 | ||||||||||||||
Interest expense | 48 | — | 321 | — | 369 | |||||||||||||||
Total claims and expenses | 17,509 | 8,327 | 346 | (10 | ) | 26,172 | ||||||||||||||
Income (loss) before income taxes | 2,247 | 752 | (256 | ) | (13 | ) | 2,730 | |||||||||||||
Income tax expense (benefit) | 519 | 290 | (130 | ) | (5 | ) | 674 | |||||||||||||
Net income of subsidiaries | — | — | 2,190 | (2,190 | ) | — | ||||||||||||||
Net income | $ | 1,728 | $ | 462 | $ | 2,064 | $ | (2,198 | ) | $ | 2,056 |
(1) | Total other-than-temporary impairments (OTTI) for the year ended December 31, 2017, and the amounts comprising total OTTI that were recognized in net realized investment gains and in other comprehensive income (OCI), were as follows: |
(in millions) | TPC | Other Subsidiaries | TRV | Eliminations | Consolidated | |||||||||||||||
Total OTTI losses | $ | (4 | ) | $ | (9 | ) | $ | — | $ | — | $ | (13 | ) | |||||||
OTTI losses recognized in net realized investment gains | $ | (5 | ) | $ | (9 | ) | $ | — | $ | — | $ | (14 | ) | |||||||
OTTI gains recognized in OCI | $ | 1 | $ | — | $ | — | $ | — | $ | 1 |
(in millions) | TPC | Other Subsidiaries | TRV | Eliminations | Consolidated | |||||||||||||||
Revenues | ||||||||||||||||||||
Premiums | $ | 16,788 | $ | 7,746 | $ | — | $ | — | $ | 24,534 | ||||||||||
Net investment income | 1,569 | 720 | 13 | — | 2,302 | |||||||||||||||
Fee income | 458 | — | — | — | 458 | |||||||||||||||
Net realized investment gains (losses) (1) | 30 | 39 | (1 | ) | — | 68 | ||||||||||||||
Other revenues | 248 | 36 | — | (21 | ) | 263 | ||||||||||||||
Total revenues | 19,093 | 8,541 | 12 | (21 | ) | 27,625 | ||||||||||||||
Claims and expenses | ||||||||||||||||||||
Claims and claim adjustment expenses | 10,232 | 4,838 | — | — | 15,070 | |||||||||||||||
Amortization of deferred acquisition costs | 2,702 | 1,283 | — | — | 3,985 | |||||||||||||||
General and administrative expenses | 2,928 | 1,242 | 5 | (21 | ) | 4,154 | ||||||||||||||
Interest expense | 48 | — | 315 | — | 363 | |||||||||||||||
Total claims and expenses | 15,910 | 7,363 | 320 | (21 | ) | 23,572 | ||||||||||||||
Income (loss) before income taxes | 3,183 | 1,178 | (308 | ) | — | 4,053 | ||||||||||||||
Income tax expense (benefit) | 999 | 208 | (168 | ) | — | 1,039 | ||||||||||||||
Net income of subsidiaries | — | — | 3,154 | (3,154 | ) | — | ||||||||||||||
Net income | $ | 2,184 | $ | 970 | $ | 3,014 | $ | (3,154 | ) | $ | 3,014 |
(1) | Total other-than-temporary impairments (OTTI) for the year ended December 31, 2016, and the amounts comprising total OTTI that were recognized in net realized investment gains (losses) and in other comprehensive income (OCI), were as follows: |
(in millions) | TPC | Other Subsidiaries | TRV | Eliminations | Consolidated | |||||||||||||||
Total OTTI losses | $ | (19 | ) | $ | (20 | ) | $ | (1 | ) | $ | — | $ | (40 | ) | ||||||
OTTI losses recognized in net realized investment gains (losses) | $ | (13 | ) | $ | (15 | ) | $ | (1 | ) | $ | — | $ | (29 | ) | ||||||
OTTI losses recognized in OCI | $ | (6 | ) | $ | (5 | ) | $ | — | $ | — | $ | (11 | ) |
Claims and Claim Adjustment Expenses Incurred Related to: | Amortization of Deferred Acquisition Costs | Paid Claims and Claim Adjustment Expenses | ||||||||||||||||||||||||||||||||||||||||||
Affiliation with Registrant(2) | Deferred Acquisition Costs | Claims and Claim Adjustment Expense Reserves | Discount From Reserves for Unpaid Claims(3) | Unearned Premiums | Earned Premiums | Net Investment Income | Current Year | Prior Year | Net Written Premiums | |||||||||||||||||||||||||||||||||||
2018 | $ | 2,120 | $ | 50,653 | $ | 1,158 | $ | 13,555 | $ | 27,059 | $ | 2,474 | $ | 18,614 | $ | (406 | ) | $ | 4,381 | $ | 17,060 | $ | 27,708 | |||||||||||||||||||||
2017 | $ | 2,025 | $ | 49,633 | $ | 1,102 | $ | 12,915 | $ | 25,683 | $ | 2,397 | $ | 17,846 | $ | (458 | ) | $ | 4,166 | $ | 16,043 | $ | 26,219 | |||||||||||||||||||||
2016 | $ | 1,923 | $ | 47,929 | $ | 1,083 | $ | 12,329 | $ | 24,534 | $ | 2,302 | $ | 15,675 | $ | (680 | ) | $ | 3,985 | $ | 14,796 | $ | 24,958 |
(1) | Excludes accident and health insurance business. |
(2) | Consolidated property-casualty insurance operations. |
(3) | For a discussion of types of reserves discounted and discount rates used, see note 7 of notes to the consolidated financial statements. |
Balance at beginning of period | Charged to costs and expenses | Charged to other accounts | Deductions (1) | Balance at end of period | ||||||||||||||||
2018 | ||||||||||||||||||||
Reinsurance recoverables | $ | 111 | $ | — | $ | — | $ | 1 | $ | 110 | ||||||||||
Allowance for uncollectible: | ||||||||||||||||||||
Premiums receivable from underwriting activities | $ | 58 | $ | 50 | $ | — | $ | 54 | $ | 54 | ||||||||||
Deductibles | $ | 26 | $ | (1 | ) | $ | — | $ | 1 | $ | 24 | |||||||||
2017 | ||||||||||||||||||||
Reinsurance recoverables | $ | 116 | $ | — | $ | — | $ | 5 | $ | 111 | ||||||||||
Allowance for uncollectible: | ||||||||||||||||||||
Premiums receivable from underwriting activities | $ | 61 | $ | 38 | $ | — | $ | 41 | $ | 58 | ||||||||||
Deductibles | $ | 34 | $ | (2 | ) | $ | — | $ | 6 | $ | 26 | |||||||||
2016 | ||||||||||||||||||||
Reinsurance recoverables | $ | 157 | $ | — | $ | — | $ | 41 | $ | 116 | ||||||||||
Allowance for uncollectible: | ||||||||||||||||||||
Premiums receivable from underwriting activities | $ | 65 | $ | 35 | $ | — | $ | 39 | $ | 61 | ||||||||||
Deductibles | $ | 35 | $ | 5 | $ | — | $ | 6 | $ | 34 |
(1) | Credited to the related asset account. |
Segment | Deferred Acquisition Costs | Claims and Claim Adjustment Expense Reserves | Unearned Premiums | Earned Premiums | Net Investment Income (1) | Claims and Claim Adjustment Expenses | Amortization of Deferred Acquisition Costs | Other Operating Expenses (2) | Net Written Premiums | |||||||||||||||||||||||||||
2018 | ||||||||||||||||||||||||||||||||||||
Business Insurance | $ | 1,102 | $ | 41,132 | $ | 7,112 | $ | 14,722 | $ | 1,833 | $ | 10,171 | $ | 2,388 | $ | 2,623 | $ | 14,956 | ||||||||||||||||||
Bond & Specialty Insurance | 277 | 3,255 | 1,619 | 2,420 | 233 | 772 | 454 | 459 | 2,528 | |||||||||||||||||||||||||||
Personal Insurance | 741 | 6,266 | 4,824 | 9,917 | 408 | 7,348 | 1,539 | 1,185 | 10,224 | |||||||||||||||||||||||||||
Total—Reportable Segments | 2,120 | 50,653 | 13,555 | 27,059 | 2,474 | 18,291 | 4,381 | 4,267 | 27,708 | |||||||||||||||||||||||||||
Other | — | 15 | — | — | — | — | — | 382 | — | |||||||||||||||||||||||||||
Consolidated | $ | 2,120 | $ | 50,668 | $ | 13,555 | $ | 27,059 | $ | 2,474 | $ | 18,291 | $ | 4,381 | $ | 4,649 | $ | 27,708 | ||||||||||||||||||
2017 | ||||||||||||||||||||||||||||||||||||
Business Insurance | $ | 1,060 | $ | 40,352 | $ | 6,857 | $ | 14,146 | $ | 1,786 | $ | 9,521 | $ | 2,286 | $ | 2,563 | $ | 14,270 | ||||||||||||||||||
Bond & Specialty Insurance | 258 | 3,421 | 1,515 | 2,307 | 228 | 899 | 432 | 464 | 2,359 | |||||||||||||||||||||||||||
Personal Insurance | 707 | 5,860 | 4,543 | 9,230 | 383 | 7,047 | 1,448 | 1,111 | 9,590 | |||||||||||||||||||||||||||
Total—Reportable Segments | 2,025 | 49,633 | 12,915 | 25,683 | 2,397 | 17,467 | 4,166 | 4,138 | 26,219 | |||||||||||||||||||||||||||
Other | — | 17 | — | — | — | — | — | 401 | — | |||||||||||||||||||||||||||
Consolidated | $ | 2,025 | $ | 49,650 | $ | 12,915 | $ | 25,683 | $ | 2,397 | $ | 17,467 | $ | 4,166 | $ | 4,539 | $ | 26,219 | ||||||||||||||||||
2016 | ||||||||||||||||||||||||||||||||||||
Business Insurance | $ | 1,026 | $ | 39,555 | $ | 6,725 | $ | 13,855 | $ | 1,701 | $ | 8,753 | $ | 2,221 | $ | 2,554 | $ | 13,900 | ||||||||||||||||||
Bond & Specialty Insurance | 246 | 3,323 | 1,444 | 2,260 | 239 | 633 | 421 | 445 | 2,271 | |||||||||||||||||||||||||||
Personal Insurance | 651 | 5,051 | 4,160 | 8,419 | 362 | 5,684 | 1,343 | 1,124 | 8,787 | |||||||||||||||||||||||||||
Total—Reportable Segments | 1,923 | 47,929 | 12,329 | 24,534 | 2,302 | 15,070 | 3,985 | 4,123 | 24,958 | |||||||||||||||||||||||||||
Other | — | 20 | — | — | — | — | — | 394 | — | |||||||||||||||||||||||||||
Consolidated | $ | 1,923 | $ | 47,949 | $ | 12,329 | $ | 24,534 | $ | 2,302 | $ | 15,070 | $ | 3,985 | $ | 4,517 | $ | 24,958 |
(1) | See note 2 of notes to the consolidated financial statements for discussion of the method used to allocate net investment income and invested assets to the identified segments. |
(2) | Expense allocations are determined in accordance with prescribed statutory accounting practices. These practices make a reasonable allocation of all expenses to those product lines with which they are associated. |
(at December 31, in millions) | 2018 | 2017 | ||||||
Property-casualty | $ | 50,653 | $ | 49,633 | ||||
Accident and health | 15 | 17 | ||||||
Total | $ | 50,668 | $ | 49,650 |
(for the year ended December 31, in millions) | 2018 | 2017 | 2016 | |||||||||
Business Insurance: | ||||||||||||
Domestic: | ||||||||||||
Select Accounts | $ | 2,828 | $ | 2,800 | $ | 2,729 | ||||||
Middle Market | 8,214 | 7,756 | 7,379 | |||||||||
National Accounts | 1,025 | 1,010 | 1,058 | |||||||||
National Property and Other | 1,805 | 1,691 | 1,779 | |||||||||
Total Domestic | 13,872 | 13,257 | 12,945 | |||||||||
International | 1,084 | 1,013 | 955 | |||||||||
Total Business Insurance | 14,956 | 14,270 | 13,900 | |||||||||
Bond & Specialty Insurance: | ||||||||||||
Domestic: | ||||||||||||
Management Liability | 1,455 | 1,367 | 1,342 | |||||||||
Surety | 835 | 793 | 757 | |||||||||
Total Domestic | 2,290 | 2,160 | 2,099 | |||||||||
International | 238 | 199 | 172 | |||||||||
Total Bond & Specialty Insurance | 2,528 | 2,359 | 2,271 | |||||||||
Personal Insurance: | ||||||||||||
Domestic: | ||||||||||||
Agency: | ||||||||||||
Automobile | 4,972 | 4,646 | 4,103 | |||||||||
Homeowners and Other | 4,148 | 3,933 | 3,772 | |||||||||
Total Agency | 9,120 | 8,579 | 7,875 | |||||||||
Direct-to-Consumer | 396 | 361 | 309 | |||||||||
Total Domestic | 9,516 | 8,940 | 8,184 | |||||||||
International | 708 | 650 | 603 | |||||||||
Total Personal Insurance | 10,224 | 9,590 | 8,787 | |||||||||
Total consolidated net written premiums | $ | 27,708 | $ | 26,219 | $ | 24,958 |
(at December 31, in millions) | 2018 | 2017 | ||||||
Gross reinsurance recoverables on paid and unpaid claims and claim adjustment expenses | $ | 3,485 | $ | 3,303 | ||||
Allowance for uncollectible reinsurance | (110 | ) | (111 | ) | ||||
Net reinsurance recoverables | 3,375 | 3,192 | ||||||
Mandatory pools and associations | 2,005 | 2,011 | ||||||
Structured settlements | 2,990 | 3,106 | ||||||
Total reinsurance recoverables | $ | 8,370 | $ | 8,309 |
Pension Plans | Postretirement Benefit Plans | |||||||||||||||||||||||
(for the year ended December 31, in millions) | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | ||||||||||||||||||
Service Cost: | ||||||||||||||||||||||||
Net investment income | $ | 1 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Claims and claim adjustment expenses | 54 | 48 | 48 | — | $ | — | — | |||||||||||||||||
General and administrative expenses | 78 | 71 | 70 | — | — | — | ||||||||||||||||||
Total service cost | 133 | 119 | 118 | — | — | — | ||||||||||||||||||
Non-Service Cost: | ||||||||||||||||||||||||
Claims and claim adjustment expenses | (19 | ) | (11 | ) | (18 | ) | 1 | 1 | 2 | |||||||||||||||
General and administrative expenses | (29 | ) | (15 | ) | (24 | ) | 2 | 2 | 3 | |||||||||||||||
Total non-service cost (benefit) | (48 | ) | (26 | ) | (42 | ) | 3 | 3 | 5 | |||||||||||||||
Net periodic benefit cost | $ | 85 | $ | 93 | $ | 76 | $ | 3 | $ | 3 | $ | 5 |
Unamortized Fair Value Purchase Adjustment at December 31, | Effective Interest Rate to Maturity | |||||||||||||||
(in millions) | Issue Rate | Maturity Date | 2018 | 2017 | ||||||||||||
Junior subordinated debentures | 7.625 | % | Dec. 2027 | $ | 12 | $ | 13 | 6.147 | % | |||||||
8.500 | % | Dec. 2045 | 14 | 15 | 6.362 | % | ||||||||||
8.312 | % | Jul. 2046 | 18 | 18 | 6.362 | % | ||||||||||
Total | $ | 44 | $ | 46 |
(at and for the year ended December 31, in millions) | Qualified Domestic Pension Plan | Nonqualified and Foreign Pension Plans | Total | |||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | |||||||||||||||||||
Change in projected benefit obligation: | ||||||||||||||||||||||||
Benefit obligation at beginning of year | $ | 3,679 | $ | 3,367 | $ | 230 | $ | 225 | $ | 3,909 | $ | 3,592 | ||||||||||||
Benefits earned | 126 | 112 | 7 | 7 | 133 | 119 | ||||||||||||||||||
Interest cost on benefit obligation | 119 | 120 | 7 | 7 | 126 | 127 | ||||||||||||||||||
Actuarial (gain) loss | (273 | ) | 258 | (11 | ) | 1 | (284 | ) | 259 | |||||||||||||||
Benefits paid | (207 | ) | (178 | ) | (12 | ) | (9 | ) | (219 | ) | (187 | ) | ||||||||||||
Settlement | — | — | — | (11 | ) | — | (11 | ) | ||||||||||||||||
Foreign currency exchange rate change | — | — | (6 | ) | 10 | (6 | ) | 10 | ||||||||||||||||
Benefit obligation at end of year | $ | 3,444 | $ | 3,679 | $ | 215 | $ | 230 | $ | 3,659 | $ | 3,909 | ||||||||||||
Change in plan assets: | ||||||||||||||||||||||||
Fair value of plan assets at beginning of year | $ | 3,957 | $ | 3,387 | $ | 113 | $ | 106 | $ | 4,070 | $ | 3,493 | ||||||||||||
Actual return on plan assets | (179 | ) | 448 | (1 | ) | 11 | (180 | ) | 459 | |||||||||||||||
Company contributions | 200 | 300 | 10 | 7 | 210 | 307 | ||||||||||||||||||
Benefits paid | (207 | ) | (178 | ) | (12 | ) | (9 | ) | (219 | ) | (187 | ) | ||||||||||||
Settlement | — | — | — | (12 | ) | — | (12 | ) | ||||||||||||||||
Foreign currency exchange rate change | — | — | (7 | ) | 10 | (7 | ) | 10 | ||||||||||||||||
Fair value of plan assets at end of year | 3,771 | 3,957 | 103 | 113 | 3,874 | 4,070 | ||||||||||||||||||
Funded status of plan at end of year | $ | 327 | $ | 278 | $ | (112 | ) | $ | (117 | ) | $ | 215 | $ | 161 | ||||||||||
Amounts recognized in the consolidated balance sheet consist of: | ||||||||||||||||||||||||
Accrued over-funded benefit plan assets | $ | 327 | $ | 278 | $ | 4 | $ | 6 | $ | 331 | $ | 284 | ||||||||||||
Accrued under-funded benefit plan liabilities | — | — | (116 | ) | (123 | ) | (116 | ) | (123 | ) | ||||||||||||||
Total | $ | 327 | $ | 278 | $ | (112 | ) | $ | (117 | ) | $ | 215 | $ | 161 | ||||||||||
Amounts recognized in accumulated other comprehensive income consist of: | ||||||||||||||||||||||||
Net actuarial loss | $ | 1,113 | $ | 1,035 | $ | 36 | $ | 47 | $ | 1,149 | $ | 1,082 | ||||||||||||
Prior service benefit | (5 | ) | (6 | ) | 1 | — | (4 | ) | (6 | ) | ||||||||||||||
Total | $ | 1,108 | $ | 1,029 | $ | 37 | $ | 47 | $ | 1,145 | $ | 1,076 |
Postretirement Benefit Plans | ||||||||
(at and for the year ended December 31, in millions) | 2018 | 2017 | ||||||
Change in projected benefit obligation: | ||||||||
Benefit obligation at beginning of year | $ | 225 | $ | 214 | ||||
Benefits earned | — | — | ||||||
Interest cost on benefit obligation | 7 | 7 | ||||||
Actuarial (gain) loss | (18 | ) | 13 | |||||
Benefits paid | (10 | ) | (10 | ) | ||||
Foreign currency exchange rate change | (1 | ) | 1 | |||||
Benefit obligation at end of year | $ | 203 | $ | 225 | ||||
Change in plan assets: | ||||||||
Fair value of plan assets at beginning of year | $ | 13 | $ | 14 | ||||
Actual return on plan assets | — | — | ||||||
Company contributions | 9 | 9 | ||||||
Benefits paid | (10 | ) | (10 | ) | ||||
Fair value of plan assets at end of year | 12 | 13 | ||||||
Funded status of plan at end of year | $ | (191 | ) | $ | (212 | ) | ||
Amounts recognized in the consolidated balance sheet consist of: | ||||||||
Accrued under-funded benefit plan liability | $ | (191 | ) | $ | (212 | ) | ||
Amounts recognized in accumulated other comprehensive income consist of: | ||||||||
Net actuarial gain | $ | (17 | ) | $ | — | |||
Prior service benefit | (25 | ) | (28 | ) | ||||
Total | $ | (42 | ) | $ | (28 | ) |
Changes in Net Unrealized Gains on Investment Securities | ||||||||||||||||||||
(in millions) | Having No Credit Losses Recognized in the Consolidated Statement of Income | Having Credit Losses Recognized in the Consolidated Statement of Income | Net Benefit Plan Assets and Obligations Recognized in Shareholders’ Equity | Net Unrealized Foreign Currency Translation | Total Accumulated Other Comprehensive Income (Loss) | |||||||||||||||
Balance, December 31, 2015 | $ | 1,100 | $ | 189 | $ | (713 | ) | $ | (733 | ) | $ | (157 | ) | |||||||
Other comprehensive income (loss) (OCI) before reclassifications | (530 | ) | 4 | (30 | ) | (49 | ) | (605 | ) | |||||||||||
Amounts reclassified from AOCI, net of tax | (42 | ) | 9 | 40 | — | 7 | ||||||||||||||
Net OCI, current period | (572 | ) | 13 | 10 | (49 | ) | (598 | ) | ||||||||||||
Balance, December 31, 2016 | 528 | 202 | (703 | ) | (782 | ) | (755 | ) | ||||||||||||
OCI before reclassifications | 367 | 4 | (24 | ) | 171 | 518 | ||||||||||||||
Amounts reclassified from AOCI, net of tax | (148 | ) | 1 | 41 | — | (106 | ) | |||||||||||||
Net OCI, current period | 219 | 5 | 17 | 171 | 412 | |||||||||||||||
Balance, December 31, 2017 | 747 | 207 | (686 | ) | (611 | ) | (343 | ) | ||||||||||||
Cumulative effect of adoption of updated accounting guidance for equity financial instruments at January 1, 2018 | (34 | ) | — | — | — | (34 | ) | |||||||||||||
Income tax benefit | (12 | ) | — | — | — | (12 | ) | |||||||||||||
Net of taxes | (22 | ) | — | — | — | (22 | ) | |||||||||||||
Reclassification of certain tax effects from accumulated other comprehensive income at January 1, 2018 | 145 | 7 | (141 | ) | (35 | ) | (24 | ) | ||||||||||||
Total effect of adoption of new guidance at January 1, 2018, net of tax | 123 | 7 | (141 | ) | (35 | ) | (46 | ) | ||||||||||||
OCI before reclassifications, net of tax | (1,151 | ) | (21 | ) | (114 | ) | (227 | ) | (1,513 | ) | ||||||||||
Amounts reclassified from AOCI, net of tax | (25 | ) | — | 68 | — | 43 | ||||||||||||||
Net OCI, current period | (1,176 | ) | (21 | ) | (46 | ) | (227 | ) | (1,470 | ) | ||||||||||
Balance, December 31, 2018 | $ | (306 | ) | $ | 193 | $ | (873 | ) | $ | (873 | ) | $ | (1,859 | ) |
(for the year ended December 31, in millions) | 2018 | 2017 | 2016 | |||||||||
Changes in net unrealized gains on investment securities: | ||||||||||||
Having no credit losses recognized in the consolidated statement of income | $ | (1,489 | ) | $ | 294 | $ | (883 | ) | ||||
Income tax expense (benefit) | (313 | ) | 75 | (311 | ) | |||||||
Net of taxes | (1,176 | ) | 219 | (572 | ) | |||||||
Having credit losses recognized in the consolidated statement of income | (27 | ) | 8 | 21 | ||||||||
Income tax expense (benefit) | (6 | ) | 3 | 8 | ||||||||
Net of taxes | (21 | ) | 5 | 13 | ||||||||
Net changes in benefit plan assets and obligations | (56 | ) | 29 | 16 | ||||||||
Income tax expense (benefit) | (10 | ) | 12 | 6 | ||||||||
Net of taxes | (46 | ) | 17 | 10 | ||||||||
Net changes in unrealized foreign currency translation | (247 | ) | 191 | (41 | ) | |||||||
Income tax expense (benefit) | (20 | ) | 20 | 8 | ||||||||
Net of taxes | (227 | ) | 171 | (49 | ) | |||||||
Total other comprehensive income (loss) | (1,819 | ) | 522 | (887 | ) | |||||||
Total income tax expense (benefit) | (349 | ) | 110 | (289 | ) | |||||||
Total other comprehensive income (loss), net of taxes | $ | (1,470 | ) | $ | 412 | $ | (598 | ) |
(for the year ended December 31, in millions) | 2018 | 2017 | 2016 | |||||||||
Reclassification adjustments related to unrealized gains on investment securities: | ||||||||||||
Having no credit losses recognized in the consolidated statement of income (1) | $ | (32 | ) | $ | (228 | ) | $ | (64 | ) | |||
Income tax expense (2) | (7 | ) | (80 | ) | (22 | ) | ||||||
Net of taxes | (25 | ) | (148 | ) | (42 | ) | ||||||
Having credit losses recognized in the consolidated statement of income (1) | — | 1 | 13 | |||||||||
Income tax benefit (2) | — | — | 4 | |||||||||
Net of taxes | — | 1 | 9 | |||||||||
Reclassification adjustment related to benefit plan assets and obligations: | ||||||||||||
Claims and claim adjustment expenses (3) | 35 | 32 | 25 | |||||||||
General and administrative expenses (3) | 51 | 48 | 37 | |||||||||
Total | 86 | 80 | 62 | |||||||||
Income tax benefit (2) | 18 | 39 | 22 | |||||||||
Net of taxes | 68 | 41 | 40 | |||||||||
Reclassification adjustment related to foreign currency translation (1) | — | — | — | |||||||||
Income tax benefit (2) | — | — | — | |||||||||
Net of taxes | — | — | — | |||||||||
Total reclassifications | 54 | (147 | ) | 11 | ||||||||
Total income tax (expense) benefit | 11 | (41 | ) | 4 | ||||||||
Total reclassifications, net of taxes | $ | 43 | $ | (106 | ) | $ | 7 |
(1) | (Increases) decreases net realized investment gains on the consolidated statement of income. |
(2) | (Increases) decreases income tax expense on the consolidated statement of income. |
(3) | Increases (decreases) expenses on the consolidated statement of income. |
For the year ended December 31, | 2018 | 2017 | 2016 | |||||||||
Revenues | ||||||||||||
Net investment income | $ | 32 | $ | 24 | $ | 13 | ||||||
Net realized investment gains (losses) (1) | (13 | ) | 66 | (1 | ) | |||||||
Total revenues | 19 | 90 | 12 | |||||||||
Expenses | ||||||||||||
Interest | 304 | 321 | 315 | |||||||||
Other | 20 | 25 | 5 | |||||||||
Total expenses | 324 | 346 | 320 | |||||||||
Loss before income taxes and net income of subsidiaries | (305 | ) | (256 | ) | (308 | ) | ||||||
Income tax benefit | (114 | ) | (130 | ) | (168 | ) | ||||||
Loss before net income of subsidiaries | (191 | ) | (126 | ) | (140 | ) | ||||||
Net income of subsidiaries | 2,714 | 2,190 | 3,154 | |||||||||
Net income | $ | 2,523 | $ | 2,064 | $ | 3,014 |
For the year ended December 31, | 2018 | 2017 | 2016 | |||||||||
Net income | $ | 2,523 | $ | 2,064 | $ | 3,014 | ||||||
Other comprehensive income (loss) — parent company: | ||||||||||||
Changes in net unrealized gains on investment securities having no credit losses recognized in the consolidated statement of income | — | (44 | ) | 11 | ||||||||
Net changes in benefit plan assets and obligations | (53 | ) | 22 | (20 | ) | |||||||
Other comprehensive loss before income taxes and other comprehensive income (loss) of subsidiaries | (53 | ) | (22 | ) | (9 | ) | ||||||
Income tax expense (benefit) | (17 | ) | 2 | (1 | ) | |||||||
Other comprehensive loss, net of taxes, before other comprehensive income (loss) of subsidiaries | (36 | ) | (24 | ) | (8 | ) | ||||||
Other comprehensive income (loss) of subsidiaries | (1,434 | ) | 436 | (590 | ) | |||||||
Other comprehensive income (loss) | (1,470 | ) | 412 | (598 | ) | |||||||
Comprehensive income | $ | 1,053 | $ | 2,476 | $ | 2,416 |
At December 31, | 2018 | 2017 | ||||||
Assets | ||||||||
Fixed maturities | $ | 84 | $ | 82 | ||||
Equity securities | 171 | 181 | ||||||
Short-term securities | 1,371 | 1,230 | ||||||
Investment in subsidiaries | 26,993 | 27,946 | ||||||
Other assets | 649 | 692 | ||||||
Total assets | $ | 29,268 | $ | 30,131 | ||||
Liabilities | ||||||||
Debt | $ | 5,871 | $ | 5,878 | ||||
Other liabilities | 496 | 524 | ||||||
Total liabilities | 6,367 | 6,402 | ||||||
Shareholders’ equity | ||||||||
Common stock (1,750.0 shares authorized; 263.7 and 271.5 shares issued, 263.6 and 271.4 shares outstanding) | 23,144 | 22,886 | ||||||
Retained earnings | 35,211 | 33,460 | ||||||
Accumulated other comprehensive loss | (1,859 | ) | (343 | ) | ||||
Treasury stock, at cost (510.9 and 500.9 shares) | (33,595 | ) | (32,274 | ) | ||||
Total shareholders’ equity | 22,901 | 23,729 | ||||||
Total liabilities and shareholders’ equity | $ | 29,268 | $ | 30,131 |
For the year ended December 31, | 2018 | 2017 | 2016 | |||||||||
Cash flows from operating activities | ||||||||||||
Net income | $ | 2,523 | $ | 2,064 | $ | 3,014 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Equity in net income of subsidiaries | (2,714 | ) | (2,190 | ) | (3,154 | ) | ||||||
Dividends received from consolidated subsidiaries | 2,258 | 2,289 | 2,998 | |||||||||
Deferred federal income tax expense | 28 | 40 | 12 | |||||||||
Change in income taxes payable | 100 | 3 | (48 | ) | ||||||||
Other | (35 | ) | (174 | ) | 70 | |||||||
Net cash provided by operating activities | 2,160 | 2,032 | 2,892 | |||||||||
Cash flows from investing activities | ||||||||||||
Net sales (purchases) of short-term securities | (141 | ) | 397 | (81 | ) | |||||||
Other investments, net | (7 | ) | (34 | ) | (5 | ) | ||||||
Acquisition, net of cash acquired | — | (477 | ) | — | ||||||||
Net cash used in investing activities | (148 | ) | (114 | ) | (86 | ) | ||||||
Cash flows from financing activities | ||||||||||||
Treasury stock acquired—share repurchase authorization | (1,270 | ) | (1,378 | ) | (2,400 | ) | ||||||
Treasury stock acquired—net employee share-based compensation | (51 | ) | (62 | ) | (72 | ) | ||||||
Dividends paid to shareholders | (814 | ) | (785 | ) | (757 | ) | ||||||
Payment of debt | (600 | ) | (657 | ) | (400 | ) | ||||||
Issuance of debt | 591 | 789 | 491 | |||||||||
Issuance of common stock—employee share options | 132 | 173 | 332 | |||||||||
Net cash used in financing activities | (2,012 | ) | (1,920 | ) | (2,806 | ) | ||||||
Net decrease in cash | — | (2 | ) | — | ||||||||
Cash at beginning of year | — | 2 | 2 | |||||||||
Cash at end of year | $ | — | $ | — | $ | 2 | ||||||
Supplemental disclosure of cash flow information | ||||||||||||
Cash received during the year for taxes | $ | 283 | $ | 173 | $ | 132 | ||||||
Cash paid during the year for interest | $ | 300 | $ | 320 | $ | 311 |
1. | GUARANTEES |
(at December 31, in millions) | 2018 | 2017 | ||||||
Short-term: | ||||||||
Commercial paper | $ | 100 | $ | 100 | ||||
5.90% Senior notes due June 2, 2019 | 500 | — | ||||||
5.80% Senior notes due May 15, 2018 | — | 500 | ||||||
Total short-term debt | 600 | 600 | ||||||
Long-term: | ||||||||
5.90% Senior notes due June 2, 2019 | — | 500 | ||||||
3.90% Senior notes due November 1, 2020 | 500 | 500 | ||||||
7.75% Senior notes due April 15, 2026 | 200 | 200 | ||||||
7.625% Junior subordinated debentures due December 15, 2027 | 125 | 125 | ||||||
6.375% Senior notes due March 15, 2033 | 500 | 500 | ||||||
6.75% Senior notes due June 20, 2036 | 400 | 400 | ||||||
6.25% Senior notes due June 15, 2037 | 800 | 800 | ||||||
5.35% Senior notes due November 1, 2040 | 750 | 750 | ||||||
4.60% Senior notes due August 1, 2043 | 500 | 500 | ||||||
4.30% Senior notes due August 25, 2045 | 400 | 400 | ||||||
8.50% Junior subordinated debentures due December 15, 2045 | 56 | 56 | ||||||
3.75% Senior notes due May 15, 2046 | 500 | 500 | ||||||
8.312% Junior subordinated debentures due July 1, 2046 | 73 | 73 | ||||||
4.00% Senior notes due May 30, 2047 | 700 | 700 | ||||||
4.05% Senior notes due March 7, 2048 | 500 | — | ||||||
Total long-term debt | 6,004 | 6,004 | ||||||
Total debt principal | 6,604 | 6,604 | ||||||
Unamortized fair value adjustment | 44 | 46 | ||||||
Unamortized debt issuance costs | (84 | ) | (79 | ) | ||||
Total debt | $ | 6,564 | $ | 6,571 |
Unamortized Fair Value Purchase Adjustment at December 31, | Effective Interest Rate to Maturity | |||||||||||||||
(in millions) | Issue Rate | Maturity Date | 2018 | 2017 | ||||||||||||
Junior subordinated debentures | 7.625 | % | Dec. 2027 | $ | 12 | $ | 13 | 6.147 | % | |||||||
8.500 | % | Dec. 2045 | 14 | 15 | 6.362 | % | ||||||||||
8.312 | % | Jul. 2046 | 18 | 18 | 6.362 | % | ||||||||||
Total | $ | 44 | $ | 46 |
Amortized | Gross Unrealized | Fair | ||||||||||||||
(at December 31, 2018, in millions) | Cost | Gains | Losses | Value | ||||||||||||
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities | $ | 2,076 | $ | 4 | $ | 16 | $ | 2,064 | ||||||||
Obligations of states, municipalities and political subdivisions: | ||||||||||||||||
Local general obligation | 14,473 | 219 | 120 | 14,572 | ||||||||||||
Revenue | 9,755 | 172 | 74 | 9,853 | ||||||||||||
State general obligation | 1,329 | 18 | 13 | 1,334 | ||||||||||||
Pre-refunded | 2,772 | 80 | — | 2,852 | ||||||||||||
Total obligations of states, municipalities and political subdivisions | 28,329 | 489 | 207 | 28,611 | ||||||||||||
Debt securities issued by foreign governments | 1,255 | 7 | 5 | 1,257 | ||||||||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities | 2,557 | 54 | 38 | 2,573 | ||||||||||||
All other corporate bonds | 29,307 | 156 | 583 | 28,880 | ||||||||||||
Redeemable preferred stock | 77 | 2 | — | 79 | ||||||||||||
Total | $ | 63,601 | $ | 712 | $ | 849 | $ | 63,464 |
Amortized | Gross Unrealized | Fair | ||||||||||||||
(at December 31, 2017, in millions) | Cost | Gains | Losses | Value | ||||||||||||
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities | $ | 2,080 | $ | 4 | $ | 8 | $ | 2,076 | ||||||||
Obligations of states, municipalities and political subdivisions: | ||||||||||||||||
Local general obligation | 13,488 | 444 | 26 | 13,906 | ||||||||||||
Revenue | 11,307 | 338 | 19 | 11,626 | ||||||||||||
State general obligation | 1,443 | 44 | 3 | 1,484 | ||||||||||||
Pre-refunded | 3,758 | 142 | 1 | 3,899 | ||||||||||||
Total obligations of states, municipalities and political subdivisions | 29,996 | 968 | 49 | 30,915 | ||||||||||||
Debt securities issued by foreign governments | 1,505 | 14 | 10 | 1,509 | ||||||||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities | 2,334 | 87 | 11 | 2,410 | ||||||||||||
All other corporate bonds | 25,311 | 478 | 100 | 25,689 | ||||||||||||
Redeemable preferred stock | 90 | 5 | — | 95 | ||||||||||||
Total | $ | 61,316 | $ | 1,556 | $ | 178 | $ | 62,694 |
(for the year ended December 31,) | 2018 | 2017 | 2016 | |||||||||
Assumptions used in estimating fair value of options on grant date | ||||||||||||
Expected term of stock options | 6 years | 6 years | 5 – 6 years | |||||||||
Expected volatility of Company’s stock | 14.94 | % | 16.50 | % | 15.14% – 16.80% | |||||||
Weighted average volatility | 14.94 | % | 16.50 | % | 16.79 | % | ||||||
Expected annual dividend per share | $2.88 | $2.68 | $2.44 – $2.68 | |||||||||
Risk-free rate | 2.68 | % | 2.08 | % | 1.36% – 2.23% | |||||||
Additional information | ||||||||||||
Weighted average grant-date fair value of options granted (per share) | $ | 20.13 | $ | 16.15 | $ | 13.29 | ||||||
Total intrinsic value of options exercised during the year (in millions) | $ | 67 | $ | 90 | $ | 167 |
Stock Options | Number | Weighted Average Exercise Price | Weighted Average Contractual Life Remaining | Aggregate Intrinsic Value ($ in millions) | |||||||||
Outstanding, beginning of year | 8,712,467 | $ | 97.45 | ||||||||||
Original grants | 1,632,361 | 140.85 | |||||||||||
Exercised | (1,229,850 | ) | 83.74 | ||||||||||
Forfeited or expired | (120,622 | ) | 117.39 | ||||||||||
Outstanding, end of year | 8,994,356 | $ | 106.93 | 6.2 years | $ | 149 | |||||||
Vested at end of year (1) | 5,861,909 | $ | 99.28 | 5.3 years | $ | 134 | |||||||
Exercisable at end of year | 3,889,013 | $ | 88.83 | 3.9 years | $ | 123 |
(1) | Represents awards for which the requisite service has been rendered, including those that are retirement eligible. |
Restricted and Deferred Stock Units | Performance Shares | |||||||||||||
Other Equity Instruments | Number | Weighted Average Grant-Date Fair Value | Number | Weighted Average Grant-Date Fair Value | ||||||||||
Nonvested, beginning of year | 1,286,970 | $ | 111.74 | 787,732 | $ | 112.40 | ||||||||
Granted | 559,807 | 139.20 | 319,408 | 140.85 | ||||||||||
Vested | (554,640 | ) | (1) | 114.77 | (385,604 | ) | (2) | 106.06 | ||||||
Forfeited | (75,461 | ) | 122.29 | (68,593 | ) | 123.01 | ||||||||
Performance-based adjustment | — | — | 31,946 | (3) | 126.29 | |||||||||
Nonvested, end of year | 1,216,676 | (4) | $ | 122.34 | 684,889 | $ | 128.83 |
(1) | Represents awards for which the requisite service has been rendered. |
(2) | Reflects the number of performance shares attributable to the performance goals attained over the completed performance period (three years) and for which service conditions have been met. |
(3) | Represents the current year change in estimated performance shares to reflect the attainment of performance goals for the awards that were granted in each of the years 2016 through 2018. |
(4) | 95,953 shares of restricted common stock were also issued outside of the 2014 Incentive Plan in 2017 in connection with the acquisition of Simply Business, of which 92,995 shares remain unvested and are not included in this table. See note 9. |
(for the year ended December 31, in millions, except per share amounts) | 2018 | 2017 | 2016 | |||||||||
Basic and Diluted | ||||||||||||
Net income, as reported | $ | 2,523 | $ | 2,056 | $ | 3,014 | ||||||
Participating share-based awards — allocated income | (19 | ) | (15 | ) | (22 | ) | ||||||
Net income available to common shareholders — basic and diluted | $ | 2,504 | $ | 2,041 | $ | 2,992 | ||||||
Common Shares | ||||||||||||
Basic | ||||||||||||
Weighted average shares outstanding | 267.4 | 276.0 | 288.1 | |||||||||
Diluted | ||||||||||||
Weighted average shares outstanding | 267.4 | 276.0 | 288.1 | |||||||||
Weighted average effects of dilutive securities: | ||||||||||||
Stock options and performance shares | 2.4 | 2.6 | 2.9 | |||||||||
Total | 269.8 | 278.6 | 291.0 | |||||||||
Net income Per Common Share | ||||||||||||
Basic | $ | 9.37 | $ | 7.39 | $ | 10.39 | ||||||
Diluted | $ | 9.28 | $ | 7.33 | $ | 10.28 |
(for the year ended December 31, in millions) | 2018 | 2017 | 2016 | |||||||||
Written premiums | ||||||||||||
Direct | $ | 28,210 | $ | 26,648 | $ | 25,567 | ||||||
Assumed | 1,042 | 1,000 | 928 | |||||||||
Ceded | (1,544 | ) | (1,429 | ) | (1,537 | ) | ||||||
Total net written premiums | $ | 27,708 | $ | 26,219 | $ | 24,958 | ||||||
Earned premiums | ||||||||||||
Direct | $ | 27,536 | $ | 26,189 | $ | 25,262 | ||||||
Assumed | 1,024 | 965 | 875 | |||||||||
Ceded | (1,501 | ) | (1,471 | ) | (1,603 | ) | ||||||
Total net earned premiums | $ | 27,059 | $ | 25,683 | $ | 24,534 | ||||||
Percentage of assumed earned premiums to net earned premiums | 3.8 | % | 3.8 | % | 3.6 | % | ||||||
Ceded claims and claim adjustment expenses incurred | $ | 1,293 | $ | 1,225 | $ | 762 |
(in millions) | Fixed Maturities | Other Investments | Total | |||||||||
Balance at December 31, 2017 | $ | 204 | $ | 38 | $ | 242 | ||||||
Total realized and unrealized investment gains (losses): | ||||||||||||
Reported in net realized investment gains (1) | 2 | 7 | 9 | |||||||||
Reported in increases in other comprehensive income (loss) | (4 | ) | — | (4 | ) | |||||||
Purchases, sales and settlements/maturities: | ||||||||||||
Purchases | 146 | 3 | 149 | |||||||||
Sales | (11 | ) | (12 | ) | (23 | ) | ||||||
Settlements/maturities | (71 | ) | — | (71 | ) | |||||||
Gross transfers into Level 3 | 11 | — | 11 | |||||||||
Gross transfers out of Level 3 | (91 | ) | — | (91 | ) | |||||||
Balance at December 31, 2018 | $ | 186 | $ | 36 | $ | 222 | ||||||
Amount of total realized investment gains (losses) for the period included in the consolidated statement of income attributable to changes in the fair value of assets still held at the reporting date | $ | — | $ | — | $ | — |
(1) | Includes impairments on investments held at the end of the period as well as amortization on fixed maturities. |
(in millions) | Fixed Maturities | Other Investments | Total | |||||||||
Balance at December 31, 2016 | $ | 184 | $ | 36 | $ | 220 | ||||||
Total realized and unrealized investment gains (losses): | ||||||||||||
Reported in net realized investment gains (1) | — | (1 | ) | (1 | ) | |||||||
Reported in increases in other comprehensive income (loss) | 1 | 3 | 4 | |||||||||
Purchases, sales and settlements/maturities: | ||||||||||||
Purchases | 312 | — | 312 | |||||||||
Sales | (2 | ) | — | (2 | ) | |||||||
Settlements/maturities | (47 | ) | — | (47 | ) | |||||||
Gross transfers into Level 3 | 21 | — | 21 | |||||||||
Gross transfers out of Level 3 | (265 | ) | — | (265 | ) | |||||||
Balance at December 31, 2017 | $ | 204 | $ | 38 | $ | 242 | ||||||
Amount of total realized investment gains (losses) for the period included in the consolidated statement of income attributable to changes in the fair value of assets still held at the reporting date | $ | — | $ | (1 | ) | $ | (1 | ) |
(1) | Includes impairments on investments held at the end of the period as well as amortization on fixed maturities. |
(at December 31, 2018, in millions) | Carrying Value | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||
Financial assets: | ||||||||||||||||||||
Short-term securities | $ | 3,985 | $ | 3,985 | $ | 632 | $ | 3,316 | $ | 37 | ||||||||||
Financial liabilities: | ||||||||||||||||||||
Debt | $ | 6,464 | $ | 7,128 | $ | — | $ | 7,128 | $ | — | ||||||||||
Commercial paper | 100 | 100 | — | 100 | — |
(at December 31, 2017, in millions) | Carrying Value | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||
Financial assets: | ||||||||||||||||||||
Short-term securities | $ | 4,895 | $ | 4,895 | $ | 1,238 | $ | 3,622 | $ | 35 | ||||||||||
Financial liabilities: | ||||||||||||||||||||
Debt | $ | 6,471 | $ | 7,702 | $ | — | $ | 7,702 | $ | — | ||||||||||
Commercial paper | 100 | 100 | — | 100 | — |
• | Level 1 - Unadjusted quoted market prices for identical assets or liabilities in active markets that the Company has the ability to access. |
• | Level 2 - Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; or valuations based on models where the significant inputs are observable (e.g., interest rates, yield curves, prepayment speeds, default rates, loss severities, etc.) or can be corroborated by observable market data. |
• | Level 3 - Valuations based on models where significant inputs are not observable. The unobservable inputs reflect the Company’s own assumptions about the inputs that market participants would use. |
(at December 31, 2018, in millions) | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Invested assets: | ||||||||||||||||
Fixed maturities | ||||||||||||||||
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities | $ | 2,064 | $ | 2,064 | $ | — | $ | — | ||||||||
Obligations of states, municipalities and political subdivisions | 28,611 | — | 28,599 | 12 | ||||||||||||
Debt securities issued by foreign governments | 1,257 | — | 1,257 | — | ||||||||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities | 2,573 | — | 2,554 | 19 | ||||||||||||
All other corporate bonds | 28,880 | — | 28,725 | 155 | ||||||||||||
Redeemable preferred stock | 79 | 3 | 76 | — | ||||||||||||
Total fixed maturities | 63,464 | 2,067 | 61,211 | 186 | ||||||||||||
Equity securities | ||||||||||||||||
Public common stock | 316 | 316 | — | — | ||||||||||||
Non-redeemable preferred stock | 52 | 30 | 22 | — | ||||||||||||
Total equity securities | 368 | 346 | 22 | — | ||||||||||||
Other investments | 52 | 16 | — | 36 | ||||||||||||
Total | $ | 63,884 | $ | 2,429 | $ | 61,233 | $ | 222 | ||||||||
Other liabilities | $ | 10 | $ | — | $ | — | $ | 10 |
(at December 31, 2017, in millions) | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Invested assets: | ||||||||||||||||
Fixed maturities | ||||||||||||||||
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities | $ | 2,076 | $ | 2,076 | $ | — | $ | — | ||||||||
Obligations of states, municipalities and political subdivisions | 30,915 | — | 30,910 | 5 | ||||||||||||
Debt securities issued by foreign governments | 1,509 | — | 1,509 | — | ||||||||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities | 2,410 | — | 2,371 | 39 | ||||||||||||
All other corporate bonds | 25,689 | 11 | 25,518 | 160 | ||||||||||||
Redeemable preferred stock | 95 | 3 | 92 | — | ||||||||||||
Total fixed maturities | 62,694 | 2,090 | 60,400 | 204 | ||||||||||||
Equity securities | ||||||||||||||||
Public common stock | 339 | 339 | — | — | ||||||||||||
Non-redeemable preferred stock | 114 | 45 | 69 | — | ||||||||||||
Total equity securities | 453 | 384 | 69 | — | ||||||||||||
Other investments | 57 | 19 | — | 38 | ||||||||||||
Total | $ | 63,204 | $ | 2,493 | $ | 60,469 | $ | 242 |
(in millions) | Fixed Maturities | Other Investments | Total | |||||||||
Balance at December 31, 2017 | $ | 204 | $ | 38 | $ | 242 | ||||||
Total realized and unrealized investment gains (losses): | ||||||||||||
Reported in net realized investment gains (1) | 2 | 7 | 9 | |||||||||
Reported in increases in other comprehensive income (loss) | (4 | ) | — | (4 | ) | |||||||
Purchases, sales and settlements/maturities: | ||||||||||||
Purchases | 146 | 3 | 149 | |||||||||
Sales | (11 | ) | (12 | ) | (23 | ) | ||||||
Settlements/maturities | (71 | ) | — | (71 | ) | |||||||
Gross transfers into Level 3 | 11 | — | 11 | |||||||||
Gross transfers out of Level 3 | (91 | ) | — | (91 | ) | |||||||
Balance at December 31, 2018 | $ | 186 | $ | 36 | $ | 222 | ||||||
Amount of total realized investment gains (losses) for the period included in the consolidated statement of income attributable to changes in the fair value of assets still held at the reporting date | $ | — | $ | — | $ | — |
(1) | Includes impairments on investments held at the end of the period as well as amortization on fixed maturities. |
(in millions) | Fixed Maturities | Other Investments | Total | |||||||||
Balance at December 31, 2016 | $ | 184 | $ | 36 | $ | 220 | ||||||
Total realized and unrealized investment gains (losses): | ||||||||||||
Reported in net realized investment gains (1) | — | (1 | ) | (1 | ) | |||||||
Reported in increases in other comprehensive income (loss) | 1 | 3 | 4 | |||||||||
Purchases, sales and settlements/maturities: | ||||||||||||
Purchases | 312 | — | 312 | |||||||||
Sales | (2 | ) | — | (2 | ) | |||||||
Settlements/maturities | (47 | ) | — | (47 | ) | |||||||
Gross transfers into Level 3 | 21 | — | 21 | |||||||||
Gross transfers out of Level 3 | (265 | ) | — | (265 | ) | |||||||
Balance at December 31, 2017 | $ | 204 | $ | 38 | $ | 242 | ||||||
Amount of total realized investment gains (losses) for the period included in the consolidated statement of income attributable to changes in the fair value of assets still held at the reporting date | $ | — | $ | (1 | ) | $ | (1 | ) |
(1) | Includes impairments on investments held at the end of the period as well as amortization on fixed maturities. |
(at December 31, 2018, in millions) | Carrying Value | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||
Financial assets: | ||||||||||||||||||||
Short-term securities | $ | 3,985 | $ | 3,985 | $ | 632 | $ | 3,316 | $ | 37 | ||||||||||
Financial liabilities: | ||||||||||||||||||||
Debt | $ | 6,464 | $ | 7,128 | $ | — | $ | 7,128 | $ | — | ||||||||||
Commercial paper | 100 | 100 | — | 100 | — |
(at December 31, 2017, in millions) | Carrying Value | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||
Financial assets: | ||||||||||||||||||||
Short-term securities | $ | 4,895 | $ | 4,895 | $ | 1,238 | $ | 3,622 | $ | 35 | ||||||||||
Financial liabilities: | ||||||||||||||||||||
Debt | $ | 6,471 | $ | 7,702 | $ | — | $ | 7,702 | $ | — | ||||||||||
Commercial paper | 100 | 100 | — | 100 | — |
(at December 31, in millions) | 2018 | 2017 | ||||||
Business Insurance (1) | $ | 2,585 | $ | 2,585 | ||||
Bond & Specialty Insurance | 550 | 550 | ||||||
Personal Insurance | 776 | 790 | ||||||
Other | 26 | 26 | ||||||
Total | $ | 3,937 | $ | 3,951 |
(at December 31, 2018, in millions) | Gross Carrying Amount | Accumulated Amortization | Net | |||||||||
Subject to amortization | ||||||||||||
Customer-related | $ | 98 | $ | 12 | $ | 86 | ||||||
Contract-based (1) | 208 | 175 | 33 | |||||||||
Total subject to amortization | 306 | 187 | 119 | |||||||||
Not subject to amortization | 226 | — | 226 | |||||||||
Total | $ | 532 | $ | 187 | $ | 345 |
(at December 31, 2017, in millions) | Gross Carrying Amount | Accumulated Amortization | Net | |||||||||
Subject to amortization | ||||||||||||
Customer-related | $ | 77 | $ | 4 | $ | 73 | ||||||
Contract-based (1) | 209 | 167 | 42 | |||||||||
Total subject to amortization | 286 | 171 | 115 | |||||||||
Not subject to amortization | 227 | — | 227 | |||||||||
Total | $ | 513 | $ | 171 | $ | 342 |
(1) | Contract-based intangible assets subject to amortization are comprised of fair value adjustments on claims and claim adjustment expense reserves, reinsurance recoverables and other contract-related intangible assets. Fair value adjustments recorded in connection with insurance acquisitions were based on management’s estimate of nominal claims and claim adjustment expense reserves and reinsurance recoverables. The method used calculated a risk adjustment to a risk-free discounted reserve that would, if reserves ran off as expected, produce results that yielded the assumed cost-of-capital on the capital supporting the loss reserves. The fair value adjustments are reported as other intangible assets on the consolidated balance sheet, and the amounts measured in accordance with the acquirer’s accounting policies for insurance contracts have been reported as part of the claims and claim adjustment expense reserves and reinsurance recoverables. The intangible assets are being recognized into income over the expected payment pattern. Because the time value of money and the risk adjustment (cost of capital) components of the intangible assets run off at different rates, the amount recognized in income may be a net benefit in some periods and a net expense in other periods. |
(for the year ended December 31, in millions) | 2018 | 2017 | 2016 | |||||||||
Composition of income tax expense included in the consolidated statement of income | ||||||||||||
Current expense: | ||||||||||||
Federal | $ | 424 | $ | 314 | $ | 899 | ||||||
Impact of TCJA at enactment | — | 21 | — | |||||||||
Foreign | 41 | 56 | 21 | |||||||||
State | 8 | 4 | 8 | |||||||||
Total current tax expense | 473 | 395 | 928 | |||||||||
Deferred expense (benefit): | ||||||||||||
Federal | (13 | ) | 229 | 110 | ||||||||
Impact of TCJA at enactment | — | 108 | — | |||||||||
Foreign | (22 | ) | (58 | ) | 1 | |||||||
Total deferred tax expense (benefit) | (35 | ) | 279 | 111 | ||||||||
Total income tax expense included in the consolidated statement of income | 438 | 674 | 1,039 | |||||||||
Composition of income tax expense (benefit) included in shareholders’ equity | ||||||||||||
Expense (benefit) relating to changes in the unrealized gain (loss) on investments, unrealized loss on foreign exchange and other items in other comprehensive income (loss) | (349 | ) | 110 | (289 | ) | |||||||
Total income tax expense included in the consolidated financial statements | $ | 89 | $ | 784 | $ | 750 |
(for the year ended December 31, in millions) | 2018 | 2017 | 2016 | |||||||||
Income (loss) before income taxes | ||||||||||||
U.S. | $ | 3,039 | $ | 2,798 | $ | 3,946 | ||||||
Foreign | (78 | ) | (68 | ) | 107 | |||||||
Total income before income taxes | 2,961 | 2,730 | 4,053 | |||||||||
Effective tax rate | ||||||||||||
Statutory tax rate | 21 | % | 35 | % | 35 | % | ||||||
Expected federal income tax expense | 622 | 956 | 1,419 | |||||||||
Tax effect of: | ||||||||||||
Nontaxable investment income | (150 | ) | (297 | ) | (323 | ) | ||||||
TCJA at enactment | — | 129 | — | |||||||||
Other, net | (34 | ) | (114 | ) | (57 | ) | ||||||
Total income tax expense | $ | 438 | $ | 674 | $ | 1,039 | ||||||
Effective tax rate | 15 | % | 25 | % | 26 | % |
(at December 31, in millions) | 2018 | 2017 | ||||||
Deferred tax assets | ||||||||
Claims and claim adjustment expense reserves | $ | 571 | $ | 930 | ||||
Unearned premium reserves | 503 | 478 | ||||||
Compensation-related liabilities | 92 | 61 | ||||||
Other | 200 | 191 | ||||||
Total gross deferred tax assets | 1,366 | 1,660 | ||||||
Less: valuation allowance | 8 | 6 | ||||||
Adjusted gross deferred tax assets | 1,358 | 1,654 | ||||||
Deferred tax liabilities | ||||||||
Claims and claim adjustment expense reserve discounting (transition rule) | 159 | 560 | ||||||
Deferred acquisition costs | 397 | 376 | ||||||
Investments | 152 | 454 | ||||||
Internally developed software | 92 | 97 | ||||||
Depreciation | 67 | 57 | ||||||
Other | 46 | 40 | ||||||
Total gross deferred tax liabilities | 913 | 1,584 | ||||||
Net deferred tax asset | $ | 445 | $ | 70 |
(in millions) | Amount | Year of expiration | ||||
United States | $ | 2 | 2035 - 2036 | |||
Brazil | $ | 19 | None | |||
Canada | $ | 1 | 2037 - 2038 | |||
United Kingdom | $ | 146 | None |
(in millions) | 2018 | 2017 | ||||||
Balance at January 1 | $ | 6 | $ | 13 | ||||
Additions for tax positions of prior years | 25 | — | ||||||
Reductions for tax positions of prior years | — | (1 | ) | |||||
Reductions based on tax positions related to current year | — | (6 | ) | |||||
Balance at December 31 | $ | 31 | $ | 6 |
(for the year ended December 31, in millions) | 2018 | 2017 | 2016 | |||||||||
Gross investment income | ||||||||||||
Fixed maturities | $ | 1,980 | $ | 1,895 | $ | 1,981 | ||||||
Equity securities | 16 | 28 | 37 | |||||||||
Short-term securities | 92 | 62 | 29 | |||||||||
Real estate investments | 48 | 44 | 51 | |||||||||
Other investments | 377 | 406 | 242 | |||||||||
Gross investment income | 2,513 | 2,435 | 2,340 | |||||||||
Investment expenses | 39 | 38 | 38 | |||||||||
Net investment income | $ | 2,474 | $ | 2,397 | $ | 2,302 |
(at December 31, 2018, in millions) | Amortized Cost | Fair Value | ||||||
Due in one year or less | $ | 4,489 | $ | 4,505 | ||||
Due after 1 year through 5 years | 17,020 | 17,021 | ||||||
Due after 5 years through 10 years | 17,030 | 16,785 | ||||||
Due after 10 years | 22,505 | 22,580 | ||||||
61,044 | 60,891 | |||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities | 2,557 | 2,573 | ||||||
Total | $ | 63,601 | $ | 63,464 |
Amortized | Gross Unrealized | Fair | ||||||||||||||
(at December 31, 2018, in millions) | Cost | Gains | Losses | Value | ||||||||||||
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities | $ | 2,076 | $ | 4 | $ | 16 | $ | 2,064 | ||||||||
Obligations of states, municipalities and political subdivisions: | ||||||||||||||||
Local general obligation | 14,473 | 219 | 120 | 14,572 | ||||||||||||
Revenue | 9,755 | 172 | 74 | 9,853 | ||||||||||||
State general obligation | 1,329 | 18 | 13 | 1,334 | ||||||||||||
Pre-refunded | 2,772 | 80 | — | 2,852 | ||||||||||||
Total obligations of states, municipalities and political subdivisions | 28,329 | 489 | 207 | 28,611 | ||||||||||||
Debt securities issued by foreign governments | 1,255 | 7 | 5 | 1,257 | ||||||||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities | 2,557 | 54 | 38 | 2,573 | ||||||||||||
All other corporate bonds | 29,307 | 156 | 583 | 28,880 | ||||||||||||
Redeemable preferred stock | 77 | 2 | — | 79 | ||||||||||||
Total | $ | 63,601 | $ | 712 | $ | 849 | $ | 63,464 |
Amortized | Gross Unrealized | Fair | ||||||||||||||
(at December 31, 2017, in millions) | Cost | Gains | Losses | Value | ||||||||||||
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities | $ | 2,080 | $ | 4 | $ | 8 | $ | 2,076 | ||||||||
Obligations of states, municipalities and political subdivisions: | ||||||||||||||||
Local general obligation | 13,488 | 444 | 26 | 13,906 | ||||||||||||
Revenue | 11,307 | 338 | 19 | 11,626 | ||||||||||||
State general obligation | 1,443 | 44 | 3 | 1,484 | ||||||||||||
Pre-refunded | 3,758 | 142 | 1 | 3,899 | ||||||||||||
Total obligations of states, municipalities and political subdivisions | 29,996 | 968 | 49 | 30,915 | ||||||||||||
Debt securities issued by foreign governments | 1,505 | 14 | 10 | 1,509 | ||||||||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities | 2,334 | 87 | 11 | 2,410 | ||||||||||||
All other corporate bonds | 25,311 | 478 | 100 | 25,689 | ||||||||||||
Redeemable preferred stock | 90 | 5 | — | 95 | ||||||||||||
Total | $ | 61,316 | $ | 1,556 | $ | 178 | $ | 62,694 |
(at December 31, 2018, in millions) | Amortized Cost | Fair Value | ||||||
Due in one year or less | $ | 4,489 | $ | 4,505 | ||||
Due after 1 year through 5 years | 17,020 | 17,021 | ||||||
Due after 5 years through 10 years | 17,030 | 16,785 | ||||||
Due after 10 years | 22,505 | 22,580 | ||||||
61,044 | 60,891 | |||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities | 2,557 | 2,573 | ||||||
Total | $ | 63,601 | $ | 63,464 |
(at December 31, 2018, in millions) | Cost | Gross Gains | Gross Losses | Fair Value | ||||||||||||
Public common stock | $ | 338 | $ | 2 | $ | 24 | $ | 316 | ||||||||
Non-redeemable preferred stock | 44 | 8 | — | 52 | ||||||||||||
Total | $ | 382 | $ | 10 | $ | 24 | $ | 368 |
(at December 31, 2017, in millions) | Cost | Gross Gains | Gross Losses | Fair Value | ||||||||||||
Public common stock | $ | 332 | $ | 8 | $ | 1 | $ | 339 | ||||||||
Non-redeemable preferred stock | 108 | 12 | 6 | 114 | ||||||||||||
Total | $ | 440 | $ | 20 | $ | 7 | $ | 453 |
Less than 12 months | 12 months or longer | Total | ||||||||||||||||||||||
(at December 31, 2018, in millions) | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||||||||
Fixed maturities | ||||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities | $ | 484 | $ | 5 | $ | 1,011 | $ | 11 | $ | 1,495 | $ | 16 | ||||||||||||
Obligations of states, municipalities and political subdivisions | 5,241 | 82 | 3,298 | 125 | 8,539 | 207 | ||||||||||||||||||
Debt securities issued by foreign governments | 96 | — | 328 | 5 | 424 | 5 | ||||||||||||||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities | 593 | 9 | 1,070 | 29 | 1,663 | 38 | ||||||||||||||||||
All other corporate bonds | 12,622 | 303 | 6,872 | 280 | 19,494 | 583 | ||||||||||||||||||
Total fixed maturities | $ | 19,036 | $ | 399 | $ | 12,579 | $ | 450 | $ | 31,615 | $ | 849 |
Less than 12 months | 12 months or longer | Total | ||||||||||||||||||||||
(at December 31, 2017, in millions) | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||||||||
Fixed maturities | ||||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities | $ | 1,150 | $ | 5 | $ | 470 | $ | 3 | $ | 1,620 | $ | 8 | ||||||||||||
Obligations of states, municipalities and political subdivisions | 505 | 2 | 2,959 | 47 | 3,464 | 49 | ||||||||||||||||||
Debt securities issued by foreign governments | 394 | 6 | 111 | 4 | 505 | 10 | ||||||||||||||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities | 1,021 | 7 | 250 | 4 | 1,271 | 11 | ||||||||||||||||||
All other corporate bonds | 6,062 | 48 | 1,990 | 52 | 8,052 | 100 | ||||||||||||||||||
Total fixed maturities | 9,132 | 68 | 5,780 | 110 | 14,912 | 178 | ||||||||||||||||||
Equity securities | ||||||||||||||||||||||||
Public common stock | 18 | — | 34 | 1 | 52 | 1 | ||||||||||||||||||
Non-redeemable preferred stock | 3 | — | 56 | 6 | 59 | 6 | ||||||||||||||||||
Total equity securities | 21 | — | 90 | 7 | 111 | 7 | ||||||||||||||||||
Total | $ | 9,153 | $ | 68 | $ | 5,870 | $ | 117 | $ | 15,023 | $ | 185 |
(for the year ended December 31, in millions) | 2018 | 2017 | 2016 | |||||||||
Fixed maturities | ||||||||||||
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities | $ | — | $ | — | $ | — | ||||||
Obligations of states, municipalities and political subdivisions | — | — | — | |||||||||
Debt securities issued by foreign governments | — | — | — | |||||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities | — | — | — | |||||||||
All other corporate bonds | 1 | 4 | 15 | |||||||||
Redeemable preferred stock | — | — | — | |||||||||
Total fixed maturities | 1 | 4 | 15 | |||||||||
Equity securities | ||||||||||||
Public common stock | — | 9 | 9 | |||||||||
Non-redeemable preferred stock | — | — | 3 | |||||||||
Total equity securities | — | 9 | 12 | |||||||||
Other investments | — | 1 | 2 | |||||||||
Total | $ | 1 | $ | 14 | $ | 29 |
Year ended December 31, 2018 (in millions) | Cumulative OTTI Credit Losses Recognized for Securities Held, Beginning of Period | Additions for OTTI Securities Where No Credit Losses Were Previously Recognized | Additions for OTTI Securities Where Credit Losses Have Been Previously Recognized | Reductions Due to Sales/Defaults of Credit- Impaired Securities | Adjustments to Book Value of Credit- Impaired Securities due to Changes in Cash Flows | Cumulative OTTI Credit Losses Recognized for Securities Still Held, End of Period | ||||||||||||||||||
Fixed maturities | ||||||||||||||||||||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities | $ | 29 | $ | — | $ | — | $ | (18 | ) | $ | 4 | $ | 15 | |||||||||||
All other corporate bonds | 46 | — | — | (12 | ) | 8 | 42 | |||||||||||||||||
Total fixed maturities | $ | 75 | $ | — | $ | — | $ | (30 | ) | $ | 12 | $ | 57 |
Year ended December 31, 2017 (in millions) | Cumulative OTTI Credit Losses Recognized for Securities Held, Beginning of Period | Additions for OTTI Securities Where No Credit Losses Were Previously Recognized | Additions for OTTI Securities Where Credit Losses Have Been Previously Recognized | Reductions Due to Sales/Defaults of Credit- Impaired Securities | Adjustments to Book Value of Credit- Impaired Securities due to Changes in Cash Flows | Cumulative OTTI Credit Losses Recognized for Securities Still Held, End of Period | ||||||||||||||||||
Fixed maturities | ||||||||||||||||||||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities | $ | 31 | $ | — | $ | — | $ | — | $ | (2 | ) | $ | 29 | |||||||||||
All other corporate bonds | 54 | — | 1 | (7 | ) | (2 | ) | 46 | ||||||||||||||||
Total fixed maturities | $ | 85 | $ | — | $ | 1 | $ | (7 | ) | $ | (4 | ) | $ | 75 |
(for the year ended December 31, in millions) | 2018 | 2017 | 2016 | |||||||||
Gross investment income | ||||||||||||
Fixed maturities | $ | 1,980 | $ | 1,895 | $ | 1,981 | ||||||
Equity securities | 16 | 28 | 37 | |||||||||
Short-term securities | 92 | 62 | 29 | |||||||||
Real estate investments | 48 | 44 | 51 | |||||||||
Other investments | 377 | 406 | 242 | |||||||||
Gross investment income | 2,513 | 2,435 | 2,340 | |||||||||
Investment expenses | 39 | 38 | 38 | |||||||||
Net investment income | $ | 2,474 | $ | 2,397 | $ | 2,302 |
(at and for the year ended December 31, in millions) | 2018 | 2017 | 2016 | |||||||||
Changes in net unrealized investment gains | ||||||||||||
Fixed maturities | $ | (1,515 | ) | $ | 513 | $ | (915 | ) | ||||
Equity securities | — | (215 | ) | 51 | ||||||||
Other investments | (1 | ) | 4 | 2 | ||||||||
Change in net pre-tax unrealized gains on investment securities | (1,516 | ) | 302 | (862 | ) | |||||||
Related tax expense (benefit) | (319 | ) | 78 | (303 | ) | |||||||
Change in net unrealized gains on investment securities | (1,197 | ) | 224 | (559 | ) | |||||||
Cumulative effect of adoption of updated accounting guidance for equity financial instruments at January 1, 2018 | (22 | ) | — | — | ||||||||
Reclassification of certain tax effects from accumulated other comprehensive income at January 1, 2018 | 152 | — | — | |||||||||
Balance, beginning of year | 954 | 730 | 1,289 | |||||||||
Balance, end of year | $ | (113 | ) | $ | 954 | $ | 730 |
(at December 31, in millions) | 2018 | 2017 | ||||||
Property-casualty | $ | 50,653 | $ | 49,633 | ||||
Accident and health | 15 | 17 | ||||||
Total | $ | 50,668 | $ | 49,650 |
(at and for the year ended December 31, in millions) | 2018 | 2017 | 2016 | |||||||||
Claims and claim adjustment expense reserves at beginning of year | $ | 49,633 | $ | 47,929 | $ | 48,272 | ||||||
Less reinsurance recoverables on unpaid losses | 8,123 | 7,981 | 8,449 | |||||||||
Net reserves at beginning of year | 41,510 | 39,948 | 39,823 | |||||||||
Estimated claims and claim adjustment expenses for claims arising in the current year | 18,614 | 17,846 | 15,675 | |||||||||
Estimated decrease in claims and claim adjustment expenses for claims arising in prior years | (406 | ) | (458 | ) | (680 | ) | ||||||
Total increases | 18,208 | 17,388 | 14,995 | |||||||||
Claims and claim adjustment expense payments for claims arising in: | ||||||||||||
Current year | 7,697 | 7,335 | 6,220 | |||||||||
Prior years | 9,363 | 8,708 | 8,576 | |||||||||
Total payments | 17,060 | 16,043 | 14,796 | |||||||||
Unrealized foreign exchange loss (gain) | (187 | ) | 217 | (74 | ) | |||||||
Net reserves at end of year | 42,471 | 41,510 | 39,948 | |||||||||
Plus reinsurance recoverables on unpaid losses | 8,182 | 8,123 | 7,981 | |||||||||
Claims and claim adjustment expense reserves at end of year | $ | 50,653 | $ | 49,633 | $ | 47,929 |
(at December 31, 2018, in mllions) | Net Undiscounted Claims and Claim Adjustment Expense Reserves | Discount (Net of Reinsurance) | Subtotal: Net Claims and Claim Adjustment Expense Reserves | Reinsurance Recoverables on Unpaid Losses (4) | Claims and Claim Adjustment Expense Reserves | |||||||||||||||
Business Insurance | ||||||||||||||||||||
General liability | $ | 7,159 | $ | (174 | ) | $ | 6,985 | $ | 854 | $ | 7,839 | |||||||||
Commercial property | 973 | — | 973 | 429 | 1,402 | |||||||||||||||
Commercial multi-peril | 3,535 | — | 3,535 | 181 | 3,716 | |||||||||||||||
Commercial automobile | 2,861 | — | 2,861 | 226 | 3,087 | |||||||||||||||
Workers’ compensation (1) | 16,039 | (909 | ) | 15,130 | 698 | 15,828 | ||||||||||||||
Bond & Specialty Insurance | ||||||||||||||||||||
General liability | 1,833 | — | 1,833 | 152 | 1,985 | |||||||||||||||
Fidelity and surety | 419 | — | 419 | 7 | 426 | |||||||||||||||
Personal Insurance | ||||||||||||||||||||
Automobile | 2,776 | — | 2,776 | 480 | 3,256 | |||||||||||||||
Homeowners (excluding Other) | 1,376 | — | 1,376 | 3 | 1,379 | |||||||||||||||
International - Canada | 710 | — | 710 | 26 | 736 | |||||||||||||||
Subtotal — claims and allocated claim adjustment expenses for the products presented in the development tables below | 37,681 | (1,083 | ) | 36,598 | 3,056 | 39,654 | ||||||||||||||
Other insurance contracts (2) | 3,762 | (5 | ) | 3,757 | 2,116 | 5,873 | ||||||||||||||
Unallocated loss adjustment expense reserves | 2,053 | — | 2,053 | 37 | 2,090 | |||||||||||||||
Structured settlements (3) | — | — | — | 2,990 | 2,990 | |||||||||||||||
Other | 63 | — | 63 | (17 | ) | 46 | ||||||||||||||
Total property-casualty | 43,559 | (1,088 | ) | 42,471 | 8,182 | 50,653 | ||||||||||||||
Accident and health | — | — | — | 15 | 15 | |||||||||||||||
Total | $ | 43,559 | $ | (1,088 | ) | $ | 42,471 | $ | 8,197 | $ | 50,668 |
(1) | Net discount amount includes discount of $70 million on reinsurance recoverables for long-term disability and annuity claim payments. |
(2) | Primarily includes residual market, international (other than operations in Canada within the Personal Insurance segment) and runoff assumed reinsurance business. |
(3) | Includes structured settlements in cases where the Company did not receive a release from the claimant. |
(4) | Total reinsurance recoverables (on paid and unpaid losses) at December 31, 2018 were $8.37 billion. |
(dollars in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||
2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | ||||||||||||||||||||||||||||||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||||||
Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | IBNR Reserves Dec 31, 2018 | Cumulative Number of Reported Claims | |||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 1,060 | $ | 1,071 | $ | 1,028 | $ | 960 | $ | 869 | $ | 837 | $ | 809 | $ | 796 | $ | 783 | $ | 775 | $ | 56 | 25,702 | ||||||||||||||||||||||||
2010 | 1,028 | 1,031 | 1,021 | 959 | 927 | 912 | 918 | 908 | 911 | 79 | 27,911 | ||||||||||||||||||||||||||||||||||||
2011 | 1,004 | 1,074 | 1,065 | 998 | 972 | 935 | 913 | 908 | 80 | 27,444 | |||||||||||||||||||||||||||||||||||||
2012 | 989 | 985 | 935 | 913 | 892 | 905 | 917 | 98 | 24,801 | ||||||||||||||||||||||||||||||||||||||
2013 | 965 | 975 | 958 | 940 | 927 | 933 | 101 | 22,446 | |||||||||||||||||||||||||||||||||||||||
2014 | 976 | 989 | 983 | 948 | 956 | 177 | 22,108 | ||||||||||||||||||||||||||||||||||||||||
2015 | 998 | 956 | 923 | 967 | 222 | 21,033 | |||||||||||||||||||||||||||||||||||||||||
2016 | 1,075 | 1,058 | 1,087 | 439 | 19,190 | ||||||||||||||||||||||||||||||||||||||||||
2017 | 1,133 | 1,143 | 717 | 16,464 | |||||||||||||||||||||||||||||||||||||||||||
2018 | 1,253 | 1,080 | 13,107 | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 9,850 |
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 35 | $ | 167 | $ | 314 | $ | 446 | $ | 543 | $ | 613 | $ | 643 | $ | 667 | $ | 689 | $ | 701 | ||||||||||||||||||||||||||||
2010 | 35 | 139 | 324 | 487 | 629 | 702 | 756 | 781 | 800 | |||||||||||||||||||||||||||||||||||||||
2011 | 47 | 187 | 355 | 539 | 660 | 725 | 762 | 799 | ||||||||||||||||||||||||||||||||||||||||
2012 | 32 | 150 | 295 | 489 | 589 | 699 | 754 | Liability for Claims | ||||||||||||||||||||||||||||||||||||||||
2013 | 35 | 175 | 363 | 498 | 639 | 745 | And Allocated Claim | |||||||||||||||||||||||||||||||||||||||||
2014 | 37 | 163 | 321 | 515 | 640 | Adjustment Expenses, | ||||||||||||||||||||||||||||||||||||||||||
2015 | 36 | 137 | 336 | 558 | Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||
2016 | 35 | 191 | 421 | |||||||||||||||||||||||||||||||||||||||||||||
2017 | 40 | 180 | 2009 - | Before | ||||||||||||||||||||||||||||||||||||||||||||
2018 | 42 | 2018 | 2009 | |||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 5,640 | $ | 4,210 | $ | 2,949 | ||||||||||||||||||||||||||||||||||||||||||
Total net liability | $ | 7,159 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | ||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | ||||||||||||||||||||
3.8 | % | 13.6 | % | 19.0 | % | 19.1 | % | 13.4 | % | 9.5 | % | 5.0 | % | 3.2 | % | 2.5 | % | 1.5 | % |
(dollars in millions) | |||||||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | |||||||||||||||||||||||
Incurred Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance | |||||||||||||||||||||||||||
Unaudited | |||||||||||||||||||||||||||
Accident Year | IBNR Reserves December 31, 2018 | Cumulative Number of Reported Claims | |||||||||||||||||||||||||
2014 | $ | 936 | $ | 860 | $ | 836 | $ | 835 | $ | 834 | $ | 6 | 21,568 | ||||||||||||||
2015 | 786 | 750 | 741 | 731 | 6 | 20,143 | |||||||||||||||||||||
2016 | 896 | 863 | 820 | 22 | 22,267 | ||||||||||||||||||||||
2017 | 1,209 | 1,177 | 30 | 24,855 | |||||||||||||||||||||||
2018 | 1,093 | 73 | 21,547 | ||||||||||||||||||||||||
Total | $ | 4,655 |
Cumulative Paid Claims and Allocated Claim | ||||||||||||||||||||||||||||
Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||
Liability for Claims | ||||||||||||||||||||||||||||
Accident Year | And Allocated Claim | |||||||||||||||||||||||||||
2014 | $ | 464 | $ | 710 | $ | 775 | $ | 803 | $ | 817 | Adjustment Expenses, | |||||||||||||||||
2015 | 376 | 615 | 681 | 699 | Net of Reinsurance | |||||||||||||||||||||||
2016 | 441 | 685 | 745 | |||||||||||||||||||||||||
2017 | 618 | 1,003 | 2014 - | Before | ||||||||||||||||||||||||
2018 | 561 | 2018 | 2014 | |||||||||||||||||||||||||
Total | $ | 3,825 | $ | 830 | $ | 143 | ||||||||||||||||||||||
Total net liability | $ | 973 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | |||||||||||||||
Unaudited | |||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | ||||||||||
52.9 | % | 31.2 | % | 8.0 | % | 2.9 | % | 1.7 | % |
(dollars in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||
2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | ||||||||||||||||||||||||||||||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||||||
Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | IBNR Reserves December 31, 2018 | Cumulative Number of Reported Claims | |||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 1,484 | $ | 1,506 | $ | 1,501 | $ | 1,498 | $ | 1,511 | $ | 1,514 | $ | 1,514 | $ | 1,509 | $ | 1,500 | $ | 1,493 | $ | 21 | 103,448 | ||||||||||||||||||||||||
2010 | 1,711 | 1,826 | 1,832 | 1,861 | 1,895 | 1,892 | 1,898 | 1,885 | 1,881 | 32 | 111,931 | ||||||||||||||||||||||||||||||||||||
2011 | 2,235 | 2,244 | 2,269 | 2,286 | 2,296 | 2,287 | 2,283 | 2,279 | 38 | 125,743 | |||||||||||||||||||||||||||||||||||||
2012 | 1,885 | 1,883 | 1,903 | 1,888 | 1,888 | 1,867 | 1,859 | 42 | 104,800 | ||||||||||||||||||||||||||||||||||||||
2013 | 1,615 | 1,623 | 1,620 | 1,609 | 1,591 | 1,600 | 51 | 83,667 | |||||||||||||||||||||||||||||||||||||||
2014 | 1,663 | 1,627 | 1,625 | 1,617 | 1,626 | 72 | 78,097 | ||||||||||||||||||||||||||||||||||||||||
2015 | 1,568 | 1,625 | 1,593 | 1,597 | 110 | 71,242 | |||||||||||||||||||||||||||||||||||||||||
2016 | 1,662 | 1,623 | 1,598 | 204 | 68,024 | ||||||||||||||||||||||||||||||||||||||||||
2017 | 1,872 | 1,928 | 357 | 69,218 | |||||||||||||||||||||||||||||||||||||||||||
2018 | 1,976 | 605 | 58,784 | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 17,837 |
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 603 | $ | 958 | $ | 1,121 | $ | 1,264 | $ | 1,360 | $ | 1,408 | $ | 1,436 | $ | 1,449 | $ | 1,457 | $ | 1,466 | ||||||||||||||||||||||||||||
2010 | 709 | 1,180 | 1,395 | 1,579 | 1,698 | 1,763 | 1,798 | 1,819 | 1,834 | |||||||||||||||||||||||||||||||||||||||
2011 | 1,060 | 1,573 | 1,803 | 1,979 | 2,088 | 2,156 | 2,193 | 2,222 | ||||||||||||||||||||||||||||||||||||||||
2012 | 795 | 1,246 | 1,424 | 1,590 | 1,699 | 1,752 | 1,780 | Liability for Claims | ||||||||||||||||||||||||||||||||||||||||
2013 | 644 | 987 | 1,167 | 1,304 | 1,410 | 1,475 | And Allocated Claim | |||||||||||||||||||||||||||||||||||||||||
2014 | 628 | 956 | 1,154 | 1,328 | 1,448 | Adjustment Expenses, | ||||||||||||||||||||||||||||||||||||||||||
2015 | 595 | 970 | 1,144 | 1,310 | Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||
2016 | 585 | 950 | 1,133 | |||||||||||||||||||||||||||||||||||||||||||||
2017 | 716 | 1,199 | 2009 - | Before | ||||||||||||||||||||||||||||||||||||||||||||
2018 | 792 | 2018 | 2009 | |||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 14,659 | $ | 3,178 | $ | 357 | ||||||||||||||||||||||||||||||||||||||||||
Total net liability | $ | 3,535 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | ||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | ||||||||||||||||||||
39.7 | % | 23.2 | % | 11.0 | % | 9.4 | % | 6.2 | % | 3.3 | % | 1.7 | % | 1.1 | % | 0.7 | % | 0.6 | % |
(dollars in millions) | |||||||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | |||||||||||||||||||||||
Incurred Claims and Allocated Claims Adjustment | |||||||||||||||||||||||||||
Expenses, Net of Reinsurance | |||||||||||||||||||||||||||
Unaudited | |||||||||||||||||||||||||||
Accident Year | IBNR Reserves December 31, 2018 | Cumulative Number of Reported Claims | |||||||||||||||||||||||||
2014 | $ | 1,156 | $ | 1,153 | $ | 1,155 | $ | 1,171 | $ | 1,193 | $ | 36 | 177,493 | ||||||||||||||
2015 | 1,188 | 1,202 | 1,234 | 1,283 | 83 | 173,333 | |||||||||||||||||||||
2016 | 1,278 | 1,303 | 1,371 | 191 | 182,647 | ||||||||||||||||||||||
2017 | 1,386 | 1,501 | 401 | 190,126 | |||||||||||||||||||||||
2018 | 1,645 | 736 | 185,419 | ||||||||||||||||||||||||
Total | $ | 6,993 |
Cumulative Paid Claims and Allocated Claim | ||||||||||||||||||||||||||||
Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||
Liability for Claims | ||||||||||||||||||||||||||||
Accident Year | And Allocated Claim | |||||||||||||||||||||||||||
2014 | $ | 394 | $ | 611 | $ | 812 | $ | 977 | $ | 1,089 | Adjustment Expenses, | |||||||||||||||||
2015 | 405 | 650 | 885 | 1,058 | Net of Reinsurance | |||||||||||||||||||||||
2016 | 412 | 688 | 931 | |||||||||||||||||||||||||
2017 | 456 | 746 | 2014 - | Before | ||||||||||||||||||||||||
2018 | 515 | 2018 | 2014 | |||||||||||||||||||||||||
Total | $ | 4,339 | $ | 2,654 | $ | 207 | ||||||||||||||||||||||
Total net liability | $ | 2,861 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | |||||||||||||||
Unaudited | |||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | ||||||||||
31.3 | % | 19.2 | % | 17.6 | % | 13.7 | % | 9.3 | % |
(dollars in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||
2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | ||||||||||||||||||||||||||||||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||||||
Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | IBNR Reserves December 31, 2018 | Cumulative Number of Reported Claims | |||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 1,799 | $ | 1,778 | $ | 1,746 | $ | 1,753 | $ | 1,753 | $ | 1,766 | $ | 1,775 | $ | 1,750 | $ | 1,736 | $ | 1,728 | $ | 221 | 104,789 | ||||||||||||||||||||||||
2010 | 1,886 | 2,042 | 2,035 | 2,056 | 2,049 | 2,052 | 2,055 | 2,021 | 2,003 | 271 | 117,368 | ||||||||||||||||||||||||||||||||||||
2011 | 2,284 | 2,303 | 2,347 | 2,350 | 2,379 | 2,385 | 2,363 | 2,348 | 356 | 136,728 | |||||||||||||||||||||||||||||||||||||
2012 | 2,447 | 2,456 | 2,457 | 2,456 | 2,445 | 2,453 | 2,416 | 404 | 137,922 | ||||||||||||||||||||||||||||||||||||||
2013 | 2,553 | 2,545 | 2,540 | 2,506 | 2,463 | 2,423 | 473 | 132,424 | |||||||||||||||||||||||||||||||||||||||
2014 | 2,554 | 2,553 | 2,547 | 2,476 | 2,430 | 563 | 124,507 | ||||||||||||||||||||||||||||||||||||||||
2015 | 2,644 | 2,585 | 2,505 | 2,441 | 751 | 122,388 | |||||||||||||||||||||||||||||||||||||||||
2016 | 2,768 | 2,690 | 2,569 | 863 | 122,493 | ||||||||||||||||||||||||||||||||||||||||||
2017 | 2,779 | 2,681 | 1,179 | 119,890 | |||||||||||||||||||||||||||||||||||||||||||
2018 | 2,744 | 1,738 | 109,002 | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 23,783 |
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 288 | $ | 623 | $ | 828 | $ | 961 | $ | 1,065 | $ | 1,137 | $ | 1,193 | $ | 1,235 | $ | 1,274 | $ | 1,303 | ||||||||||||||||||||||||||||
2010 | 341 | 750 | 978 | 1,133 | 1,246 | 1,321 | 1,385 | 1,430 | 1,465 | |||||||||||||||||||||||||||||||||||||||
2011 | 420 | 911 | 1,185 | 1,365 | 1,487 | 1,583 | 1,652 | 1,696 | ||||||||||||||||||||||||||||||||||||||||
2012 | 443 | 940 | 1,217 | 1,394 | 1,536 | 1,629 | 1,689 | Liability for Claims | ||||||||||||||||||||||||||||||||||||||||
2013 | 458 | 954 | 1,237 | 1,413 | 1,525 | 1,604 | And Allocated Claim | |||||||||||||||||||||||||||||||||||||||||
2014 | 455 | 944 | 1,224 | 1,399 | 1,505 | Adjustment Expenses, | ||||||||||||||||||||||||||||||||||||||||||
2015 | 430 | 893 | 1,154 | 1,310 | Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||
2016 | 421 | 873 | 1,118 | |||||||||||||||||||||||||||||||||||||||||||||
2017 | 433 | 890 | 2009 - | Before | ||||||||||||||||||||||||||||||||||||||||||||
2018 | 440 | 2018 | 2009 | |||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 13,020 | $ | 10,763 | $ | 5,276 | ||||||||||||||||||||||||||||||||||||||||||
Total net liability | $ | 16,039 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | ||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | ||||||||||||||||||||
17.4 | % | 19.5 | % | 11.2 | % | 7.3 | % | 5.3 | % | 3.8 | % | 3.0 | % | 2.2 | % | 2.0 | % | 1.7 | % |
(dollars in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||
2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | ||||||||||||||||||||||||||||||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||||||
Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | IBNR Reserves December 31, 2018 | Cumulative Number of Reported Claims | |||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 592 | $ | 624 | $ | 665 | $ | 686 | $ | 680 | $ | 660 | $ | 655 | $ | 641 | $ | 631 | $ | 626 | $ | 11 | 6,297 | ||||||||||||||||||||||||
2010 | 571 | 612 | 679 | 679 | 661 | 668 | 653 | 653 | 657 | 18 | 5,673 | ||||||||||||||||||||||||||||||||||||
2011 | 565 | 596 | 639 | 632 | 601 | 545 | 520 | 508 | (12 | ) | 5,212 | ||||||||||||||||||||||||||||||||||||
2012 | 538 | 591 | 614 | 605 | 601 | 599 | 605 | 97 | 4,853 | ||||||||||||||||||||||||||||||||||||||
2013 | 510 | 565 | 606 | 630 | 654 | 607 | 103 | 4,442 | |||||||||||||||||||||||||||||||||||||||
2014 | 549 | 571 | 563 | 518 | 473 | 67 | 4,335 | ||||||||||||||||||||||||||||||||||||||||
2015 | 528 | 524 | 486 | 437 | 92 | 4,155 | |||||||||||||||||||||||||||||||||||||||||
2016 | 512 | 511 | 504 | 153 | 4,235 | ||||||||||||||||||||||||||||||||||||||||||
2017 | 534 | 517 | 266 | 4,128 | |||||||||||||||||||||||||||||||||||||||||||
2018 | 530 | 406 | 2,894 | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 5,464 |
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 36 | $ | 167 | $ | 310 | $ | 390 | $ | 460 | $ | 497 | $ | 563 | $ | 592 | $ | 595 | $ | 597 | ||||||||||||||||||||||||||||
2010 | 33 | 152 | 291 | 396 | 482 | 565 | 597 | 623 | 631 | |||||||||||||||||||||||||||||||||||||||
2011 | 33 | 143 | 249 | 324 | 414 | 447 | 476 | 490 | ||||||||||||||||||||||||||||||||||||||||
2012 | 38 | 160 | 255 | 342 | 383 | 419 | 436 | Liability for Claims | ||||||||||||||||||||||||||||||||||||||||
2013 | 34 | 154 | 252 | 352 | 400 | 434 | And Allocated Claim | |||||||||||||||||||||||||||||||||||||||||
2014 | 38 | 150 | 239 | 312 | 367 | Adjustment Expenses, | ||||||||||||||||||||||||||||||||||||||||||
2015 | 38 | 141 | 234 | 310 | Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||
2016 | 30 | 141 | 233 | |||||||||||||||||||||||||||||||||||||||||||||
2017 | 38 | 155 | 2009 - | Before | ||||||||||||||||||||||||||||||||||||||||||||
2018 | 49 | 2018 | 2009 | |||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 3,702 | $ | 1,762 | $ | 71 | ||||||||||||||||||||||||||||||||||||||||||
Total net liability | $ | 1,833 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | ||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | ||||||||||||||||||||
6.8 | % | 21.4 | % | 19.4 | % | 15.3 | % | 11.4 | % | 7.3 | % | 6.0 | % | 3.7 | % | 0.9 | % | 0.2 | % |
(dollars in millions) | |||||||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | IBNR Reserves December 31, 2018 | Cumulative | |||||||||||||||||||||
Incurred Claims and Allocated Claims Adjustment | Number of | ||||||||||||||||||||||||||
Expenses, Net of Reinsurance | Reported | ||||||||||||||||||||||||||
Accident Year | Unaudited | Claims | |||||||||||||||||||||||||
2014 | $ | 223 | $ | 212 | $ | 165 | $ | 136 | $ | 130 | $ | (4 | ) | 1,069 | |||||||||||||
2015 | 217 | 191 | 179 | 145 | 38 | 827 | |||||||||||||||||||||
2016 | 226 | 239 | 205 | 12 | 866 | ||||||||||||||||||||||
2017 | 244 | 271 | 64 | 863 | |||||||||||||||||||||||
2018 | 220 | 121 | 595 | ||||||||||||||||||||||||
Total | $ | 971 |
Cumulative Paid Claims and Allocated Claim | ||||||||||||||||||||||||||||
Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||
Accident Year | Unaudited | Liability for Claims | ||||||||||||||||||||||||||
And Allocated Claim | ||||||||||||||||||||||||||||
2014 | $ | 58 | $ | 96 | $ | 111 | $ | 127 | $ | 124 | Adjustment Expenses, | |||||||||||||||||
2015 | 32 | 75 | 87 | 86 | Net of Reinsurance | |||||||||||||||||||||||
2016 | 54 | 121 | 142 | |||||||||||||||||||||||||
2017 | 70 | 166 | 2014 - | Before | ||||||||||||||||||||||||
2018 | 64 | 2018 | 2014 | |||||||||||||||||||||||||
Total | $ | 582 | $ | 389 | $ | 30 | ||||||||||||||||||||||
Total net liability | $ | 419 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | |||||||||||||||
Unaudited | |||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | ||||||||||
29.5 | % | 31.8 | % | 9.9 | % | 6.1 | % | (2.7 | )% |
(dollars in millions) | |||||||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | IBNR Reserves December 31, 2018 | Cumulative | |||||||||||||||||||||
Incurred Claims and Allocated Claims Adjustment | Number of | ||||||||||||||||||||||||||
Expenses, Net of Reinsurance | Reported | ||||||||||||||||||||||||||
Accident Year | Unaudited | Claims | |||||||||||||||||||||||||
2014 | $ | 2,014 | $ | 1,994 | $ | 1,981 | $ | 1,985 | $ | 1,980 | $ | 14 | 670,431 | ||||||||||||||
2015 | 2,186 | 2,244 | 2,236 | 2,222 | 35 | 757,837 | |||||||||||||||||||||
2016 | 2,779 | 2,791 | 2,772 | 126 | 921,479 | ||||||||||||||||||||||
2017 | 3,323 | 3,256 | 341 | 1,059,610 | |||||||||||||||||||||||
2018 | 3,281 | 825 | 960,293 | ||||||||||||||||||||||||
Total | $ | 13,511 |
Cumulative Paid Claims and Allocated Claim | ||||||||||||||||||||||||||||
Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||
Accident Year | Unaudited | Liability for Claims | ||||||||||||||||||||||||||
And Allocated Claim | ||||||||||||||||||||||||||||
2014 | $ | 1,193 | $ | 1,564 | $ | 1,763 | $ | 1,879 | $ | 1,936 | Adjustment Expenses, | |||||||||||||||||
2015 | 1,319 | 1,768 | 1,985 | 2,109 | Net of Reinsurance | |||||||||||||||||||||||
2016 | 1,610 | 2,203 | 2,466 | |||||||||||||||||||||||||
2017 | 1,912 | 2,575 | 2014 - | Before | ||||||||||||||||||||||||
2018 | 1,889 | 2018 | 2014 | |||||||||||||||||||||||||
Total | $ | 10,975 | $ | 2,536 | $ | 240 | ||||||||||||||||||||||
Total net liability | $ | 2,776 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | |||||||||||||||
Unaudited | |||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | ||||||||||
58.8 | % | 20.2 | % | 9.8 | % | 5.7 | % | 2.9 | % |
(dollars in millions) | |||||||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | IBNR Reserves December 31, 2018 | Cumulative | |||||||||||||||||||||
Incurred Claims and Allocated Claims Adjustment | Number of | ||||||||||||||||||||||||||
Expenses, Net of Reinsurance | Reported | ||||||||||||||||||||||||||
Accident Year | Unaudited | Claims | |||||||||||||||||||||||||
2014 | $ | 1,515 | $ | 1,450 | $ | 1,453 | $ | 1,457 | $ | 1,451 | $ | 7 | 151,705 | ||||||||||||||
2015 | 1,438 | 1,454 | 1,461 | 1,452 | 10 | 145,088 | |||||||||||||||||||||
2016 | 1,556 | 1,547 | 1,525 | 27 | 143,797 | ||||||||||||||||||||||
2017 | 2,312 | 2,340 | 101 | 168,357 | |||||||||||||||||||||||
2018 | 2,610 | 568 | 165,780 | ||||||||||||||||||||||||
Total | $ | 9,378 |
Cumulative Paid Claims and Allocated Claim | ||||||||||||||||||||||||||||
Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||
Accident Year | Unaudited | Liability for Claims | ||||||||||||||||||||||||||
And Allocated Claim | ||||||||||||||||||||||||||||
2014 | $ | 1,053 | $ | 1,338 | $ | 1,402 | $ | 1,425 | $ | 1,433 | Adjustment Expenses, | |||||||||||||||||
2015 | 994 | 1,333 | 1,395 | 1,421 | Net of Reinsurance | |||||||||||||||||||||||
2016 | 1,049 | 1,392 | 1,455 | |||||||||||||||||||||||||
2017 | 1,471 | 2,059 | 2014 - | Before | ||||||||||||||||||||||||
2018 | 1,657 | 2018 | 2014 | |||||||||||||||||||||||||
Total | $ | 8,025 | $ | 1,353 | $ | 23 | ||||||||||||||||||||||
Total net liability | $ | 1,376 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | |||||||||||||||
Unaudited | |||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | ||||||||||
67.2 | % | 22.7 | % | 4.3 | % | 1.7 | % | 0.5 | % |
(dollars in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
For the Years Ended December 31, | IBNR Reserves December 31, 2018 | Cumulative | |||||||||||||||||||||||||||||||||||||||||||||
2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | Number of | |||||||||||||||||||||||||||||||||||||
Accident | Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | Reported | |||||||||||||||||||||||||||||||||||||||||||||
Year | Unaudited | Claims | |||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 454 | $ | 442 | $ | 450 | $ | 456 | $ | 464 | $ | 456 | $ | 449 | $ | 449 | $ | 442 | $ | 440 | $ | — | 55,162 | ||||||||||||||||||||||||
2010 | 463 | 464 | 475 | 488 | 477 | 469 | 465 | 459 | 457 | 5 | 54,919 | ||||||||||||||||||||||||||||||||||||
2011 | 436 | 416 | 424 | 420 | 412 | 406 | 401 | 396 | 4 | 55,783 | |||||||||||||||||||||||||||||||||||||
2012 | 413 | 393 | 394 | 378 | 377 | 361 | 355 | 12 | 51,226 | ||||||||||||||||||||||||||||||||||||||
2013 | 461 | 455 | 446 | 435 | 422 | 421 | 14 | 54,231 | |||||||||||||||||||||||||||||||||||||||
2014 | 408 | 422 | 423 | 412 | 405 | (3 | ) | 52,291 | |||||||||||||||||||||||||||||||||||||||
2015 | 343 | 342 | 342 | 339 | 16 | 45,201 | |||||||||||||||||||||||||||||||||||||||||
2016 | 343 | 389 | 389 | 32 | 45,728 | ||||||||||||||||||||||||||||||||||||||||||
2017 | 329 | 362 | 26 | 46,545 | |||||||||||||||||||||||||||||||||||||||||||
2018 | 418 | 89 | 46,883 | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 3,982 |
Accident | Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||||||
Year | Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 189 | $ | 283 | $ | 323 | $ | 350 | $ | 379 | $ | 403 | $ | 419 | $ | 430 | $ | 433 | $ | 434 | ||||||||||||||||||||||||||||
2010 | 182 | 278 | 313 | 351 | 380 | 409 | 425 | 437 | 442 | |||||||||||||||||||||||||||||||||||||||
2011 | 167 | 237 | 266 | 299 | 332 | 353 | 370 | 378 | ||||||||||||||||||||||||||||||||||||||||
2012 | 157 | 219 | 249 | 274 | 300 | 317 | 325 | Liability for Claims | ||||||||||||||||||||||||||||||||||||||||
2013 | 184 | 258 | 289 | 320 | 351 | 368 | And Allocated Claim | |||||||||||||||||||||||||||||||||||||||||
2014 | 180 | 252 | 287 | 314 | 344 | Adjustment Expenses, | ||||||||||||||||||||||||||||||||||||||||||
2015 | 154 | 215 | 241 | 269 | Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||
2016 | 201 | 269 | 294 | |||||||||||||||||||||||||||||||||||||||||||||
2017 | 173 | 244 | 2009 - | Before | ||||||||||||||||||||||||||||||||||||||||||||
2018 | 208 | 2018 | 2009 | |||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 3,306 | $ | 676 | $ | 34 | ||||||||||||||||||||||||||||||||||||||||||
Total net liability | $ | 710 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | ||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | ||||||||||||||||||||
45.2 | % | 18.7 | % | 7.8 | % | 7.4 | % | 7.3 | % | 5.2 | % | 3.5 | % | 2.2 | % | 1.0 | % | 0.2 | % |
• | The paid loss development method assumes that the future change (positive or negative) in cumulative paid losses for a given cohort of claims will occur in a stable, predictable pattern from year-to-year, consistent with the pattern observed in past cohorts. |
• | The case incurred development method is the same as the paid loss development method but is based on cumulative case-incurred losses rather than paid losses. |
• | The Bornhuetter-Ferguson method uses an initial estimate of ultimate losses for a given product line reserve component, typically expressed as a ratio to earned premium. The method assumes that the ratio of additional claim activity to earned premium for that component is relatively stable and predictable over time and that actual claim activity to date is not a credible predictor of further activity for that component. The method is used most often for more recent accident years where claim data is sparse and/or volatile, with a transition to other methods as the underlying claim data becomes more voluminous and therefore more credible. |
• | The average value analysis combined with the reported claim development method assumes that average claim values are stable and predictable over time for a particular cohort of claims. It is typically limited to analysis at more granular levels, such as coverage or hazard/peril, where a more homogeneous subset of claims produce a more stable and fairly predictable average value. The reported claim development method is the same as the paid loss development method but uses changes in cumulative claim counts to produce estimates of ultimate claim counts rather than ultimate dollars. The resulting estimate of ultimate claim counts by cohort is multiplied by an average value per claim from an average value analysis to obtain estimated ultimate claims and claim adjustment expenses. |
• | a high level of litigation activity in certain jurisdictions involving individuals alleging serious asbestos-related illness, primarily involving mesothelioma claims; |
• | while overall payment patterns have been generally stable, there has been an increase in severity for certain policyholders due to the high level of litigation activity; and |
• | a moderate level of asbestos-related bankruptcy activity. |
• | Select Accounts provides small businesses with property and casualty insurance products and services, including commercial multi-peril, workers’ compensation, commercial automobile, general liability and commercial property. |
• | Middle Market provides mid-sized businesses with property and casualty insurance products and services, including workers’ compensation, general liability, commercial multi-peril, commercial automobile and commercial property, as well as risk management, claims handling and other services. Middle Market generally provides these products to mid-sized businesses through Commercial Accounts, as well as to targeted industries through Construction, Technology, Public Sector Services and Oil & Gas, and additionally, provides mono-line umbrella and excess coverage insurance through Excess Casualty. Middle Market also provides insurance for goods in transit and movable objects, as well as builders’ risk insurance, through Inland Marine; insurance for the marine transportation industry and related services, as well as other businesses involved in international trade, through Ocean Marine; and comprehensive breakdown for equipment, including property and business interruption, through Boiler & Machinery. |
• | National Accounts provides large companies with casualty insurance products and services, including workers’ compensation, commercial automobile and general liability, generally utilizing loss-sensitive products, on both a bundled and unbundled basis. National Accounts also includes the Company’s commercial residual market business, which primarily offers workers’ compensation services to the involuntary market. |
• | National Property and Other provides traditional and customized commercial property insurance programs to large and mid-sized customers through National Property. National Property and Other also provides insurance coverage for the commercial transportation industry through Northland Transportation, general liability and commercial property policies for small, difficult to place specialty classes of commercial business primarily on an excess and surplus lines basis through Northfield, and tailored property and casualty insurance programs on an admitted basis for customers with common risk characteristics or coverage requirements through National Programs. National Property and Other also serves small to medium-sized agricultural businesses, including farms, ranches, wineries and related operations, through Agribusiness. |
• | International, through its operations in Canada, the United Kingdom, the Republic of Ireland and Brazil, provides property and casualty insurance and risk management services to several customer groups, including, among others, those in the technology, manufacturing and public services industry sectors. International also provides insurance for both the foreign exposures of United States organizations and the United States exposures of foreign organizations through Global Services. At its Lloyd’s syndicate (Syndicate 5000), for which the Company provides 100% of the capital, International underwrites six principal businesses — international marine, retail marine, global property, construction & special risks, energy and aviation. |
Year ended December 31, 2018 (in millions) | Cumulative OTTI Credit Losses Recognized for Securities Held, Beginning of Period | Additions for OTTI Securities Where No Credit Losses Were Previously Recognized | Additions for OTTI Securities Where Credit Losses Have Been Previously Recognized | Reductions Due to Sales/Defaults of Credit- Impaired Securities | Adjustments to Book Value of Credit- Impaired Securities due to Changes in Cash Flows | Cumulative OTTI Credit Losses Recognized for Securities Still Held, End of Period | ||||||||||||||||||
Fixed maturities | ||||||||||||||||||||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities | $ | 29 | $ | — | $ | — | $ | (18 | ) | $ | 4 | $ | 15 | |||||||||||
All other corporate bonds | 46 | — | — | (12 | ) | 8 | 42 | |||||||||||||||||
Total fixed maturities | $ | 75 | $ | — | $ | — | $ | (30 | ) | $ | 12 | $ | 57 |
Year ended December 31, 2017 (in millions) | Cumulative OTTI Credit Losses Recognized for Securities Held, Beginning of Period | Additions for OTTI Securities Where No Credit Losses Were Previously Recognized | Additions for OTTI Securities Where Credit Losses Have Been Previously Recognized | Reductions Due to Sales/Defaults of Credit- Impaired Securities | Adjustments to Book Value of Credit- Impaired Securities due to Changes in Cash Flows | Cumulative OTTI Credit Losses Recognized for Securities Still Held, End of Period | ||||||||||||||||||
Fixed maturities | ||||||||||||||||||||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities | $ | 31 | $ | — | $ | — | $ | — | $ | (2 | ) | $ | 29 | |||||||||||
All other corporate bonds | 54 | — | 1 | (7 | ) | (2 | ) | 46 | ||||||||||||||||
Total fixed maturities | $ | 85 | $ | — | $ | 1 | $ | (7 | ) | $ | (4 | ) | $ | 75 |
(at and for the year ended December 31, in millions) | Qualified Domestic Pension Plan | Nonqualified and Foreign Pension Plans | Total | |||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | |||||||||||||||||||
Change in projected benefit obligation: | ||||||||||||||||||||||||
Benefit obligation at beginning of year | $ | 3,679 | $ | 3,367 | $ | 230 | $ | 225 | $ | 3,909 | $ | 3,592 | ||||||||||||
Benefits earned | 126 | 112 | 7 | 7 | 133 | 119 | ||||||||||||||||||
Interest cost on benefit obligation | 119 | 120 | 7 | 7 | 126 | 127 | ||||||||||||||||||
Actuarial (gain) loss | (273 | ) | 258 | (11 | ) | 1 | (284 | ) | 259 | |||||||||||||||
Benefits paid | (207 | ) | (178 | ) | (12 | ) | (9 | ) | (219 | ) | (187 | ) | ||||||||||||
Settlement | — | — | — | (11 | ) | — | (11 | ) | ||||||||||||||||
Foreign currency exchange rate change | — | — | (6 | ) | 10 | (6 | ) | 10 | ||||||||||||||||
Benefit obligation at end of year | $ | 3,444 | $ | 3,679 | $ | 215 | $ | 230 | $ | 3,659 | $ | 3,909 | ||||||||||||
Change in plan assets: | ||||||||||||||||||||||||
Fair value of plan assets at beginning of year | $ | 3,957 | $ | 3,387 | $ | 113 | $ | 106 | $ | 4,070 | $ | 3,493 | ||||||||||||
Actual return on plan assets | (179 | ) | 448 | (1 | ) | 11 | (180 | ) | 459 | |||||||||||||||
Company contributions | 200 | 300 | 10 | 7 | 210 | 307 | ||||||||||||||||||
Benefits paid | (207 | ) | (178 | ) | (12 | ) | (9 | ) | (219 | ) | (187 | ) | ||||||||||||
Settlement | — | — | — | (12 | ) | — | (12 | ) | ||||||||||||||||
Foreign currency exchange rate change | — | — | (7 | ) | 10 | (7 | ) | 10 | ||||||||||||||||
Fair value of plan assets at end of year | 3,771 | 3,957 | 103 | 113 | 3,874 | 4,070 | ||||||||||||||||||
Funded status of plan at end of year | $ | 327 | $ | 278 | $ | (112 | ) | $ | (117 | ) | $ | 215 | $ | 161 | ||||||||||
Amounts recognized in the consolidated balance sheet consist of: | ||||||||||||||||||||||||
Accrued over-funded benefit plan assets | $ | 327 | $ | 278 | $ | 4 | $ | 6 | $ | 331 | $ | 284 | ||||||||||||
Accrued under-funded benefit plan liabilities | — | — | (116 | ) | (123 | ) | (116 | ) | (123 | ) | ||||||||||||||
Total | $ | 327 | $ | 278 | $ | (112 | ) | $ | (117 | ) | $ | 215 | $ | 161 | ||||||||||
Amounts recognized in accumulated other comprehensive income consist of: | ||||||||||||||||||||||||
Net actuarial loss | $ | 1,113 | $ | 1,035 | $ | 36 | $ | 47 | $ | 1,149 | $ | 1,082 | ||||||||||||
Prior service benefit | (5 | ) | (6 | ) | 1 | — | (4 | ) | (6 | ) | ||||||||||||||
Total | $ | 1,108 | $ | 1,029 | $ | 37 | $ | 47 | $ | 1,145 | $ | 1,076 |
Postretirement Benefit Plans | ||||||||
(at and for the year ended December 31, in millions) | 2018 | 2017 | ||||||
Change in projected benefit obligation: | ||||||||
Benefit obligation at beginning of year | $ | 225 | $ | 214 | ||||
Benefits earned | — | — | ||||||
Interest cost on benefit obligation | 7 | 7 | ||||||
Actuarial (gain) loss | (18 | ) | 13 | |||||
Benefits paid | (10 | ) | (10 | ) | ||||
Foreign currency exchange rate change | (1 | ) | 1 | |||||
Benefit obligation at end of year | $ | 203 | $ | 225 | ||||
Change in plan assets: | ||||||||
Fair value of plan assets at beginning of year | $ | 13 | $ | 14 | ||||
Actual return on plan assets | — | — | ||||||
Company contributions | 9 | 9 | ||||||
Benefits paid | (10 | ) | (10 | ) | ||||
Fair value of plan assets at end of year | 12 | 13 | ||||||
Funded status of plan at end of year | $ | (191 | ) | $ | (212 | ) | ||
Amounts recognized in the consolidated balance sheet consist of: | ||||||||
Accrued under-funded benefit plan liability | $ | (191 | ) | $ | (212 | ) | ||
Amounts recognized in accumulated other comprehensive income consist of: | ||||||||
Net actuarial gain | $ | (17 | ) | $ | — | |||
Prior service benefit | (25 | ) | (28 | ) | ||||
Total | $ | (42 | ) | $ | (28 | ) |
Pension Plans | Postretirement Benefit Plans | |||||||||||||||||||||||
(for the year ended December 31, in millions) | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | ||||||||||||||||||
Net Periodic Benefit Cost: | ||||||||||||||||||||||||
Service cost | $ | 133 | $ | 119 | $ | 118 | $ | — | $ | — | $ | — | ||||||||||||
Non-service cost: | ||||||||||||||||||||||||
Interest cost on benefit obligation | 126 | 127 | 122 | 7 | 7 | 8 | ||||||||||||||||||
Expected return on plan assets | (264 | ) | (240 | ) | (230 | ) | — | — | — | |||||||||||||||
Settlement | — | 3 | 1 | — | — | — | ||||||||||||||||||
Amortization of unrecognized: | ||||||||||||||||||||||||
Prior service benefit | (1 | ) | (1 | ) | (1 | ) | (4 | ) | (4 | ) | (3 | ) | ||||||||||||
Net actuarial loss | 91 | 85 | 66 | — | — | — | ||||||||||||||||||
Total non-service cost (benefit) | (48 | ) | (26 | ) | (42 | ) | 3 | 3 | 5 | |||||||||||||||
Net periodic benefit cost | 85 | 93 | 76 | 3 | 3 | 5 | ||||||||||||||||||
Other Changes in Benefit Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income: | ||||||||||||||||||||||||
Prior service benefit | — | — | — | — | — | — | ||||||||||||||||||
Net actuarial loss (gain) | 160 | 40 | 66 | (18 | ) | 13 | (17 | ) | ||||||||||||||||
Foreign currency exchange rate change | (1 | ) | 2 | (2 | ) | — | (1 | ) | 1 | |||||||||||||||
Settlement | — | (2 | ) | (1 | ) | — | — | — | ||||||||||||||||
Amortization of prior service benefit | 1 | 1 | 1 | 4 | 4 | 3 | ||||||||||||||||||
Amortization of net actuarial loss | (91 | ) | (85 | ) | (66 | ) | — | — | — | |||||||||||||||
Total other changes recognized in other comprehensive income | 69 | (44 | ) | (2 | ) | (14 | ) | 16 | (13 | ) | ||||||||||||||
Total other changes recognized in net periodic benefit cost and other comprehensive income | $ | 154 | $ | 49 | $ | 74 | $ | (11 | ) | $ | 19 | $ | (8 | ) |
Pension Plans | Postretirement Benefit Plans | |||||||||||||||||||||||
(for the year ended December 31, in millions) | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | ||||||||||||||||||
Service Cost: | ||||||||||||||||||||||||
Net investment income | $ | 1 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Claims and claim adjustment expenses | 54 | 48 | 48 | — | $ | — | — | |||||||||||||||||
General and administrative expenses | 78 | 71 | 70 | — | — | — | ||||||||||||||||||
Total service cost | 133 | 119 | 118 | — | — | — | ||||||||||||||||||
Non-Service Cost: | ||||||||||||||||||||||||
Claims and claim adjustment expenses | (19 | ) | (11 | ) | (18 | ) | 1 | 1 | 2 | |||||||||||||||
General and administrative expenses | (29 | ) | (15 | ) | (24 | ) | 2 | 2 | 3 | |||||||||||||||
Total non-service cost (benefit) | (48 | ) | (26 | ) | (42 | ) | 3 | 3 | 5 | |||||||||||||||
Net periodic benefit cost | $ | 85 | $ | 93 | $ | 76 | $ | 3 | $ | 3 | $ | 5 |
(at and for the year ended December 31,) | 2018 | 2017 | ||||
Assumptions used to determine benefit obligations | ||||||
Discount rate: | ||||||
Qualified domestic pension plan | 4.39 | % | 3.71 | % | ||
Nonqualified domestic pension plan | 4.33 | % | 3.66 | % | ||
Domestic postretirement benefit plan | 4.26 | % | 3.60 | % | ||
Cash balance interest crediting rate | 4.01 | % | 4.01 | % | ||
Future compensation increase rate | 4.00 | % | 4.00 | % | ||
Assumptions used to determine net periodic benefit cost | ||||||
Discount rate: | ||||||
Qualified domestic pension plan: | ||||||
Service cost | 3.87 | % | 4.52 | % | ||
Interest cost | 3.34 | % | 3.55 | % | ||
Nonqualified domestic pension plan: | ||||||
Service cost | 3.73 | % | 4.24 | % | ||
Interest cost | 3.26 | % | 3.43 | % | ||
Domestic postretirement benefit plan: | ||||||
Interest cost | 3.21 | % | 3.42 | % | ||
Expected long-term rate of return on assets: | ||||||
Pension plan | 7.00 | % | 7.00 | % | ||
Postretirement benefit plan | 4.00 | % | 4.00 | % | ||
Assumed health care cost trend rates | ||||||
Following year: | ||||||
Medical (before age 65) | 7.50 | % | 7.50 | % | ||
Medical (age 65 and older) | 8.75 | % | 8.75 | % | ||
Rate to which the cost trend rate is assumed to decline (ultimate trend rate) | 4.50 | % | 4.50 | % | ||
Year that the rate reaches the ultimate trend rate: | ||||||
Medical (before age 65) | 2026 | 2026 | ||||
Medical (age 65 and older) | 2026 | 2026 |
(at December 31, 2018, in millions) | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Invested assets: | ||||||||||||||||
Fixed maturities | ||||||||||||||||
Obligations of states, municipalities and political subdivisions | $ | 3 | $ | — | $ | 3 | $ | — | ||||||||
Debt securities issued by foreign governments | 27 | — | 27 | — | ||||||||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities | 30 | — | 30 | — | ||||||||||||
All other corporate bonds | 712 | — | 712 | — | ||||||||||||
Total fixed maturities | 772 | — | 772 | — | ||||||||||||
Mutual funds | ||||||||||||||||
Equity mutual funds | 1,288 | 1,282 | 6 | — | ||||||||||||
Bond mutual funds | 760 | 757 | 3 | — | ||||||||||||
Total mutual funds | 2,048 | 2,039 | 9 | — | ||||||||||||
Equity securities | 783 | 783 | — | — | ||||||||||||
Other investments | 1 | — | — | 1 | ||||||||||||
Cash and short-term securities | ||||||||||||||||
U.S. Treasury securities | 30 | 30 | — | — | ||||||||||||
Other | 240 | 19 | 221 | — | ||||||||||||
Total cash and short-term securities | 270 | 49 | 221 | — | ||||||||||||
Total | $ | 3,874 | $ | 2,871 | $ | 1,002 | $ | 1 |
(at December 31, 2017, in millions) | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Invested assets: | ||||||||||||||||
Fixed maturities | ||||||||||||||||
Obligations of states, municipalities and political subdivisions | $ | 3 | $ | — | $ | 3 | $ | — | ||||||||
Debt securities issued by foreign governments | 16 | — | 16 | — | ||||||||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities | 10 | — | 10 | — | ||||||||||||
All other corporate bonds | 514 | — | 514 | — | ||||||||||||
Total fixed maturities | 543 | — | 543 | — | ||||||||||||
Mutual funds | ||||||||||||||||
Equity mutual funds | 1,335 | 1,328 | 7 | — | ||||||||||||
Bond mutual funds | 822 | 819 | 3 | — | ||||||||||||
Total mutual funds | 2,157 | 2,147 | 10 | — | ||||||||||||
Equity securities | 883 | 882 | 1 | — | ||||||||||||
Other investments | 1 | — | — | 1 | ||||||||||||
Cash and short-term securities | ||||||||||||||||
U.S. Treasury securities | 241 | 241 | — | — | ||||||||||||
Money market mutual funds | 27 | 27 | — | — | ||||||||||||
Other | 218 | 27 | 191 | — | ||||||||||||
Total cash and short-term securities | 486 | 295 | 191 | — | ||||||||||||
Total | $ | 4,070 | $ | 3,324 | $ | 745 | $ | 1 |
Benefits Expected to be Paid | ||||||||
(in millions) | Pension Plans | Postretirement Benefit Plans | ||||||
2019 | $ | 239 | $ | 13 | ||||
2020 | 246 | 14 | ||||||
2021 | 255 | 15 | ||||||
2022 | 260 | 15 | ||||||
2023 | 268 | 15 | ||||||
2024 through 2028 | 1,361 | 72 |
2018 (in millions, except per share amounts) | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Total | |||||||||||||||
Total revenues | $ | 7,286 | $ | 7,477 | $ | 7,723 | $ | 7,796 | $ | 30,282 | ||||||||||
Total expenses | 6,508 | 6,846 | 6,917 | 7,050 | 27,321 | |||||||||||||||
Income before income taxes | 778 | 631 | 806 | 746 | 2,961 | |||||||||||||||
Income tax expense | 109 | 107 | 97 | 125 | 438 | |||||||||||||||
Net income | $ | 669 | $ | 524 | $ | 709 | $ | 621 | $ | 2,523 | ||||||||||
Net income per share (1): | ||||||||||||||||||||
Basic | $ | 2.45 | $ | 1.93 | $ | 2.65 | $ | 2.33 | $ | 9.37 | ||||||||||
Diluted | 2.42 | 1.92 | 2.62 | 2.32 | 9.28 | |||||||||||||||
2017 (in millions, except per share amounts) | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Total | |||||||||||||||
Total revenues | $ | 6,942 | $ | 7,184 | $ | 7,325 | $ | 7,451 | $ | 28,902 | ||||||||||
Total expenses | 6,182 | 6,394 | 7,005 | 6,591 | 26,172 | |||||||||||||||
Income before income taxes | 760 | 790 | 320 | 860 | 2,730 | |||||||||||||||
Income tax expense (2) | 143 | 195 | 27 | 309 | 674 | |||||||||||||||
Net income | $ | 617 | $ | 595 | $ | 293 | $ | 551 | $ | 2,056 | ||||||||||
Net income per share (1): | ||||||||||||||||||||
Basic | $ | 2.19 | $ | 2.13 | $ | 1.06 | $ | 2.00 | $ | 7.39 | ||||||||||
Diluted | 2.17 | 2.11 | 1.05 | 1.98 | 7.33 |
(1) | Due to the use of an average number of shares for each quarter, the sum of the quarterly earnings per share may not equal the total earnings per share for the full year. |
(2) | Income tax expense for the fourth quarter and full year of 2017 included a net charge of $129 million to reflect the change in tax laws and tax rates enacted in the U.S. on December 22, 2017 as part of the Tax Cuts and Jobs Act of 2017, resulting primarily from revaluing the Company’s deferred tax assets and liabilities and the tax imposed on accumulated foreign earnings. |
(for the year ended December 31, in millions) | 2018 | 2017 | 2016 | |||||||||
Fixed maturities | ||||||||||||
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities | $ | — | $ | — | $ | — | ||||||
Obligations of states, municipalities and political subdivisions | — | — | — | |||||||||
Debt securities issued by foreign governments | — | — | — | |||||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities | — | — | — | |||||||||
All other corporate bonds | 1 | 4 | 15 | |||||||||
Redeemable preferred stock | — | — | — | |||||||||
Total fixed maturities | 1 | 4 | 15 | |||||||||
Equity securities | ||||||||||||
Public common stock | — | 9 | 9 | |||||||||
Non-redeemable preferred stock | — | — | 3 | |||||||||
Total equity securities | — | 9 | 12 | |||||||||
Other investments | — | 1 | 2 | |||||||||
Total | $ | 1 | $ | 14 | $ | 29 |
(for the year ended December 31, in millions) | 2018 | 2017 | 2016 | |||||||||
Reclassification adjustments related to unrealized gains on investment securities: | ||||||||||||
Having no credit losses recognized in the consolidated statement of income (1) | $ | (32 | ) | $ | (228 | ) | $ | (64 | ) | |||
Income tax expense (2) | (7 | ) | (80 | ) | (22 | ) | ||||||
Net of taxes | (25 | ) | (148 | ) | (42 | ) | ||||||
Having credit losses recognized in the consolidated statement of income (1) | — | 1 | 13 | |||||||||
Income tax benefit (2) | — | — | 4 | |||||||||
Net of taxes | — | 1 | 9 | |||||||||
Reclassification adjustment related to benefit plan assets and obligations: | ||||||||||||
Claims and claim adjustment expenses (3) | 35 | 32 | 25 | |||||||||
General and administrative expenses (3) | 51 | 48 | 37 | |||||||||
Total | 86 | 80 | 62 | |||||||||
Income tax benefit (2) | 18 | 39 | 22 | |||||||||
Net of taxes | 68 | 41 | 40 | |||||||||
Reclassification adjustment related to foreign currency translation (1) | — | — | — | |||||||||
Income tax benefit (2) | — | — | — | |||||||||
Net of taxes | — | — | — | |||||||||
Total reclassifications | 54 | (147 | ) | 11 | ||||||||
Total income tax (expense) benefit | 11 | (41 | ) | 4 | ||||||||
Total reclassifications, net of taxes | $ | 43 | $ | (106 | ) | $ | 7 |
(1) | (Increases) decreases net realized investment gains on the consolidated statement of income. |
(2) | (Increases) decreases income tax expense on the consolidated statement of income. |
(3) | Increases (decreases) expenses on the consolidated statement of income. |
(at December 31, in millions) | 2018 | 2017 | ||||||
Asset reconciliation: | ||||||||
Business Insurance | $ | 78,965 | $ | 78,082 | ||||
Bond & Specialty Insurance | 8,693 | 8,776 | ||||||
Personal Insurance | 15,943 | 15,949 | ||||||
Total assets for reportable segments | 103,601 | 102,807 | ||||||
Other assets (1) | 632 | 676 | ||||||
Total consolidated assets | $ | 104,233 | $ | 103,483 |
(1) | The primary components of other assets at December 31, 2018 were accrued over-funded benefit plan assets related to the Company's qualified domestic pension plan and other intangible assets. The primary components of other assets at December 31, 2017 were accrued over-funded benefit plan assets related to the Company's qualified domestic pension plan, other intangible assets and deferred taxes. |
(for the year ended December 31, in millions) | 2018 | 2017 | 2016 | |||||||||
Revenue reconciliation | ||||||||||||
Earned premiums | ||||||||||||
Business Insurance: | ||||||||||||
Domestic: | ||||||||||||
Workers’ compensation | $ | 3,899 | $ | 3,962 | $ | 3,969 | ||||||
Commercial automobile | 2,388 | 2,132 | 2,010 | |||||||||
Commercial property | 1,828 | 1,775 | 1,769 | |||||||||
General liability | 2,181 | 2,047 | 1,977 | |||||||||
Commercial multi-peril | 3,333 | 3,198 | 3,148 | |||||||||
Other | 28 | 29 | 31 | |||||||||
Total Domestic | 13,657 | 13,143 | 12,904 | |||||||||
International | 1,065 | 1,003 | 951 | |||||||||
Total Business Insurance | 14,722 | 14,146 | 13,855 | |||||||||
Bond & Specialty Insurance: | ||||||||||||
Domestic: | ||||||||||||
Fidelity and surety | 1,017 | 977 | 962 | |||||||||
General liability | 1,004 | 962 | 946 | |||||||||
Other | 195 | 187 | 180 | |||||||||
Total Domestic | 2,216 | 2,126 | 2,088 | |||||||||
International | 204 | 181 | 172 | |||||||||
Total Bond & Specialty Insurance | 2,420 | 2,307 | 2,260 | |||||||||
Personal Insurance: | ||||||||||||
Domestic | ||||||||||||
Automobile | 5,097 | 4,655 | 4,013 | |||||||||
Homeowners and Other | 4,135 | 3,943 | 3,813 | |||||||||
Total Domestic | 9,232 | 8,598 | 7,826 | |||||||||
International | 685 | 632 | 593 | |||||||||
Total Personal Insurance | 9,917 | 9,230 | 8,419 | |||||||||
Total earned premiums | 27,059 | 25,683 | 24,534 | |||||||||
Net investment income | 2,474 | 2,397 | 2,302 | |||||||||
Fee income | 432 | 447 | 458 | |||||||||
Other revenues | 201 | 153 | 252 | |||||||||
Total segment revenues | 30,166 | 28,680 | 27,546 | |||||||||
Other revenues | 2 | 6 | 11 | |||||||||
Net realized investment gains | 114 | 216 | 68 | |||||||||
Total revenues | $ | 30,282 | $ | 28,902 | $ | 27,625 | ||||||
Income reconciliation, net of tax | ||||||||||||
Total segment income | $ | 2,728 | $ | 2,297 | $ | 3,211 | ||||||
Interest Expense and Other (1) | (298 | ) | (254 | ) | (244 | ) | ||||||
Core income | 2,430 | 2,043 | 2,967 | |||||||||
Net realized investment gains | 93 | 142 | 47 | |||||||||
Impact of Tax Cuts and Jobs Act of 2017 at enactment | — | (129 | ) | — | ||||||||
Net income | $ | 2,523 | $ | 2,056 | $ | 3,014 |
(1) | The primary component of Interest Expense and Other was after-tax interest expense of $278 million, $240 million and $236 million in 2018, 2017 and 2016, respectively. |
(for the year ended December 31, in millions) | 2018 | 2017 | 2016 | |||||||||
Written premiums | ||||||||||||
Direct | $ | 28,210 | $ | 26,648 | $ | 25,567 | ||||||
Assumed | 1,042 | 1,000 | 928 | |||||||||
Ceded | (1,544 | ) | (1,429 | ) | (1,537 | ) | ||||||
Total net written premiums | $ | 27,708 | $ | 26,219 | $ | 24,958 | ||||||
Earned premiums | ||||||||||||
Direct | $ | 27,536 | $ | 26,189 | $ | 25,262 | ||||||
Assumed | 1,024 | 965 | 875 | |||||||||
Ceded | (1,501 | ) | (1,471 | ) | (1,603 | ) | ||||||
Total net earned premiums | $ | 27,059 | $ | 25,683 | $ | 24,534 | ||||||
Percentage of assumed earned premiums to net earned premiums | 3.8 | % | 3.8 | % | 3.6 | % | ||||||
Ceded claims and claim adjustment expenses incurred | $ | 1,293 | $ | 1,225 | $ | 762 |
(at December 31, in millions) | 2018 | 2017 | ||||||
Gross reinsurance recoverables on paid and unpaid claims and claim adjustment expenses | $ | 3,485 | $ | 3,303 | ||||
Allowance for uncollectible reinsurance | (110 | ) | (111 | ) | ||||
Net reinsurance recoverables | 3,375 | 3,192 | ||||||
Mandatory pools and associations | 2,005 | 2,011 | ||||||
Structured settlements | 2,990 | 3,106 | ||||||
Total reinsurance recoverables | $ | 8,370 | $ | 8,309 |
Changes in Net Unrealized Gains on Investment Securities | ||||||||||||||||||||
(in millions) | Having No Credit Losses Recognized in the Consolidated Statement of Income | Having Credit Losses Recognized in the Consolidated Statement of Income | Net Benefit Plan Assets and Obligations Recognized in Shareholders’ Equity | Net Unrealized Foreign Currency Translation | Total Accumulated Other Comprehensive Income (Loss) | |||||||||||||||
Balance, December 31, 2015 | $ | 1,100 | $ | 189 | $ | (713 | ) | $ | (733 | ) | $ | (157 | ) | |||||||
Other comprehensive income (loss) (OCI) before reclassifications | (530 | ) | 4 | (30 | ) | (49 | ) | (605 | ) | |||||||||||
Amounts reclassified from AOCI, net of tax | (42 | ) | 9 | 40 | — | 7 | ||||||||||||||
Net OCI, current period | (572 | ) | 13 | 10 | (49 | ) | (598 | ) | ||||||||||||
Balance, December 31, 2016 | 528 | 202 | (703 | ) | (782 | ) | (755 | ) | ||||||||||||
OCI before reclassifications | 367 | 4 | (24 | ) | 171 | 518 | ||||||||||||||
Amounts reclassified from AOCI, net of tax | (148 | ) | 1 | 41 | — | (106 | ) | |||||||||||||
Net OCI, current period | 219 | 5 | 17 | 171 | 412 | |||||||||||||||
Balance, December 31, 2017 | 747 | 207 | (686 | ) | (611 | ) | (343 | ) | ||||||||||||
Cumulative effect of adoption of updated accounting guidance for equity financial instruments at January 1, 2018 | (34 | ) | — | — | — | (34 | ) | |||||||||||||
Income tax benefit | (12 | ) | — | — | — | (12 | ) | |||||||||||||
Net of taxes | (22 | ) | — | — | — | (22 | ) | |||||||||||||
Reclassification of certain tax effects from accumulated other comprehensive income at January 1, 2018 | 145 | 7 | (141 | ) | (35 | ) | (24 | ) | ||||||||||||
Total effect of adoption of new guidance at January 1, 2018, net of tax | 123 | 7 | (141 | ) | (35 | ) | (46 | ) | ||||||||||||
OCI before reclassifications, net of tax | (1,151 | ) | (21 | ) | (114 | ) | (227 | ) | (1,513 | ) | ||||||||||
Amounts reclassified from AOCI, net of tax | (25 | ) | — | 68 | — | 43 | ||||||||||||||
Net OCI, current period | (1,176 | ) | (21 | ) | (46 | ) | (227 | ) | (1,470 | ) | ||||||||||
Balance, December 31, 2018 | $ | (306 | ) | $ | 193 | $ | (873 | ) | $ | (873 | ) | $ | (1,859 | ) |
(at December 31, 2018, in millions) | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Invested assets: | ||||||||||||||||
Fixed maturities | ||||||||||||||||
Obligations of states, municipalities and political subdivisions | $ | 3 | $ | — | $ | 3 | $ | — | ||||||||
Debt securities issued by foreign governments | 27 | — | 27 | — | ||||||||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities | 30 | — | 30 | — | ||||||||||||
All other corporate bonds | 712 | — | 712 | — | ||||||||||||
Total fixed maturities | 772 | — | 772 | — | ||||||||||||
Mutual funds | ||||||||||||||||
Equity mutual funds | 1,288 | 1,282 | 6 | — | ||||||||||||
Bond mutual funds | 760 | 757 | 3 | — | ||||||||||||
Total mutual funds | 2,048 | 2,039 | 9 | — | ||||||||||||
Equity securities | 783 | 783 | — | — | ||||||||||||
Other investments | 1 | — | — | 1 | ||||||||||||
Cash and short-term securities | ||||||||||||||||
U.S. Treasury securities | 30 | 30 | — | — | ||||||||||||
Other | 240 | 19 | 221 | — | ||||||||||||
Total cash and short-term securities | 270 | 49 | 221 | — | ||||||||||||
Total | $ | 3,874 | $ | 2,871 | $ | 1,002 | $ | 1 |
(at December 31, 2017, in millions) | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Invested assets: | ||||||||||||||||
Fixed maturities | ||||||||||||||||
Obligations of states, municipalities and political subdivisions | $ | 3 | $ | — | $ | 3 | $ | — | ||||||||
Debt securities issued by foreign governments | 16 | — | 16 | — | ||||||||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities | 10 | — | 10 | — | ||||||||||||
All other corporate bonds | 514 | — | 514 | — | ||||||||||||
Total fixed maturities | 543 | — | 543 | — | ||||||||||||
Mutual funds | ||||||||||||||||
Equity mutual funds | 1,335 | 1,328 | 7 | — | ||||||||||||
Bond mutual funds | 822 | 819 | 3 | — | ||||||||||||
Total mutual funds | 2,157 | 2,147 | 10 | — | ||||||||||||
Equity securities | 883 | 882 | 1 | — | ||||||||||||
Other investments | 1 | — | — | 1 | ||||||||||||
Cash and short-term securities | ||||||||||||||||
U.S. Treasury securities | 241 | 241 | — | — | ||||||||||||
Money market mutual funds | 27 | 27 | — | — | ||||||||||||
Other | 218 | 27 | 191 | — | ||||||||||||
Total cash and short-term securities | 486 | 295 | 191 | — | ||||||||||||
Total | $ | 4,070 | $ | 3,324 | $ | 745 | $ | 1 |
(at and for the year ended December 31,) | 2018 | 2017 | ||||
Assumptions used to determine benefit obligations | ||||||
Discount rate: | ||||||
Qualified domestic pension plan | 4.39 | % | 3.71 | % | ||
Nonqualified domestic pension plan | 4.33 | % | 3.66 | % | ||
Domestic postretirement benefit plan | 4.26 | % | 3.60 | % | ||
Cash balance interest crediting rate | 4.01 | % | 4.01 | % | ||
Future compensation increase rate | 4.00 | % | 4.00 | % | ||
Assumptions used to determine net periodic benefit cost | ||||||
Discount rate: | ||||||
Qualified domestic pension plan: | ||||||
Service cost | 3.87 | % | 4.52 | % | ||
Interest cost | 3.34 | % | 3.55 | % | ||
Nonqualified domestic pension plan: | ||||||
Service cost | 3.73 | % | 4.24 | % | ||
Interest cost | 3.26 | % | 3.43 | % | ||
Domestic postretirement benefit plan: | ||||||
Interest cost | 3.21 | % | 3.42 | % | ||
Expected long-term rate of return on assets: | ||||||
Pension plan | 7.00 | % | 7.00 | % | ||
Postretirement benefit plan | 4.00 | % | 4.00 | % | ||
Assumed health care cost trend rates | ||||||
Following year: | ||||||
Medical (before age 65) | 7.50 | % | 7.50 | % | ||
Medical (age 65 and older) | 8.75 | % | 8.75 | % | ||
Rate to which the cost trend rate is assumed to decline (ultimate trend rate) | 4.50 | % | 4.50 | % | ||
Year that the rate reaches the ultimate trend rate: | ||||||
Medical (before age 65) | 2026 | 2026 | ||||
Medical (age 65 and older) | 2026 | 2026 |
(at December 31, 2017, in millions) | Cost | Gross Gains | Gross Losses | Fair Value | ||||||||||||
Public common stock | $ | 332 | $ | 8 | $ | 1 | $ | 339 | ||||||||
Non-redeemable preferred stock | 108 | 12 | 6 | 114 | ||||||||||||
Total | $ | 440 | $ | 20 | $ | 7 | $ | 453 |
(for the year ended December 31, in millions) | 2018 | 2017 | 2016 | |||||||||
Composition of income tax expense included in the consolidated statement of income | ||||||||||||
Current expense: | ||||||||||||
Federal | $ | 424 | $ | 314 | $ | 899 | ||||||
Impact of TCJA at enactment | — | 21 | — | |||||||||
Foreign | 41 | 56 | 21 | |||||||||
State | 8 | 4 | 8 | |||||||||
Total current tax expense | 473 | 395 | 928 | |||||||||
Deferred expense (benefit): | ||||||||||||
Federal | (13 | ) | 229 | 110 | ||||||||
Impact of TCJA at enactment | — | 108 | — | |||||||||
Foreign | (22 | ) | (58 | ) | 1 | |||||||
Total deferred tax expense (benefit) | (35 | ) | 279 | 111 | ||||||||
Total income tax expense included in the consolidated statement of income | 438 | 674 | 1,039 | |||||||||
Composition of income tax expense (benefit) included in shareholders’ equity | ||||||||||||
Expense (benefit) relating to changes in the unrealized gain (loss) on investments, unrealized loss on foreign exchange and other items in other comprehensive income (loss) | (349 | ) | 110 | (289 | ) | |||||||
Total income tax expense included in the consolidated financial statements | $ | 89 | $ | 784 | $ | 750 |
(for the year ended December 31, in millions) | 2018 | 2017 | 2016 | |||||||||
Changes in net unrealized gains on investment securities: | ||||||||||||
Having no credit losses recognized in the consolidated statement of income | $ | (1,489 | ) | $ | 294 | $ | (883 | ) | ||||
Income tax expense (benefit) | (313 | ) | 75 | (311 | ) | |||||||
Net of taxes | (1,176 | ) | 219 | (572 | ) | |||||||
Having credit losses recognized in the consolidated statement of income | (27 | ) | 8 | 21 | ||||||||
Income tax expense (benefit) | (6 | ) | 3 | 8 | ||||||||
Net of taxes | (21 | ) | 5 | 13 | ||||||||
Net changes in benefit plan assets and obligations | (56 | ) | 29 | 16 | ||||||||
Income tax expense (benefit) | (10 | ) | 12 | 6 | ||||||||
Net of taxes | (46 | ) | 17 | 10 | ||||||||
Net changes in unrealized foreign currency translation | (247 | ) | 191 | (41 | ) | |||||||
Income tax expense (benefit) | (20 | ) | 20 | 8 | ||||||||
Net of taxes | (227 | ) | 171 | (49 | ) | |||||||
Total other comprehensive income (loss) | (1,819 | ) | 522 | (887 | ) | |||||||
Total income tax expense (benefit) | (349 | ) | 110 | (289 | ) | |||||||
Total other comprehensive income (loss), net of taxes | $ | (1,470 | ) | $ | 412 | $ | (598 | ) |
(at December 31, in millions) | 2018 | 2017 | ||||||
Short-term: | ||||||||
Commercial paper | $ | 100 | $ | 100 | ||||
5.90% Senior notes due June 2, 2019 | 500 | — | ||||||
5.80% Senior notes due May 15, 2018 | — | 500 | ||||||
Total short-term debt | 600 | 600 | ||||||
Long-term: | ||||||||
5.90% Senior notes due June 2, 2019 | — | 500 | ||||||
3.90% Senior notes due November 1, 2020 | 500 | 500 | ||||||
7.75% Senior notes due April 15, 2026 | 200 | 200 | ||||||
7.625% Junior subordinated debentures due December 15, 2027 | 125 | 125 | ||||||
6.375% Senior notes due March 15, 2033 | 500 | 500 | ||||||
6.75% Senior notes due June 20, 2036 | 400 | 400 | ||||||
6.25% Senior notes due June 15, 2037 | 800 | 800 | ||||||
5.35% Senior notes due November 1, 2040 | 750 | 750 | ||||||
4.60% Senior notes due August 1, 2043 | 500 | 500 | ||||||
4.30% Senior notes due August 25, 2045 | 400 | 400 | ||||||
8.50% Junior subordinated debentures due December 15, 2045 | 56 | 56 | ||||||
3.75% Senior notes due May 15, 2046 | 500 | 500 | ||||||
8.312% Junior subordinated debentures due July 1, 2046 | 73 | 73 | ||||||
4.00% Senior notes due May 30, 2047 | 700 | 700 | ||||||
4.05% Senior notes due March 7, 2048 | 500 | — | ||||||
Total long-term debt | 6,004 | 6,004 | ||||||
Total debt principal | 6,604 | 6,604 | ||||||
Unamortized fair value adjustment | 44 | 46 | ||||||
Unamortized debt issuance costs | (84 | ) | (79 | ) | ||||
Total debt | $ | 6,564 | $ | 6,571 |
(at December 31, in millions) | 2018 | 2017 | ||||||
Deferred tax assets | ||||||||
Claims and claim adjustment expense reserves | $ | 571 | $ | 930 | ||||
Unearned premium reserves | 503 | 478 | ||||||
Compensation-related liabilities | 92 | 61 | ||||||
Other | 200 | 191 | ||||||
Total gross deferred tax assets | 1,366 | 1,660 | ||||||
Less: valuation allowance | 8 | 6 | ||||||
Adjusted gross deferred tax assets | 1,358 | 1,654 | ||||||
Deferred tax liabilities | ||||||||
Claims and claim adjustment expense reserve discounting (transition rule) | 159 | 560 | ||||||
Deferred acquisition costs | 397 | 376 | ||||||
Investments | 152 | 454 | ||||||
Internally developed software | 92 | 97 | ||||||
Depreciation | 67 | 57 | ||||||
Other | 46 | 40 | ||||||
Total gross deferred tax liabilities | 913 | 1,584 | ||||||
Net deferred tax asset | $ | 445 | $ | 70 |
(for the year ended December 31, in millions, except per share amounts) | 2018 | 2017 | 2016 | |||||||||
Basic and Diluted | ||||||||||||
Net income, as reported | $ | 2,523 | $ | 2,056 | $ | 3,014 | ||||||
Participating share-based awards — allocated income | (19 | ) | (15 | ) | (22 | ) | ||||||
Net income available to common shareholders — basic and diluted | $ | 2,504 | $ | 2,041 | $ | 2,992 | ||||||
Common Shares | ||||||||||||
Basic | ||||||||||||
Weighted average shares outstanding | 267.4 | 276.0 | 288.1 | |||||||||
Diluted | ||||||||||||
Weighted average shares outstanding | 267.4 | 276.0 | 288.1 | |||||||||
Weighted average effects of dilutive securities: | ||||||||||||
Stock options and performance shares | 2.4 | 2.6 | 2.9 | |||||||||
Total | 269.8 | 278.6 | 291.0 | |||||||||
Net income Per Common Share | ||||||||||||
Basic | $ | 9.37 | $ | 7.39 | $ | 10.39 | ||||||
Diluted | $ | 9.28 | $ | 7.33 | $ | 10.28 |
(for the year ended December 31, in millions) | 2018 | 2017 | 2016 | |||||||||
Income (loss) before income taxes | ||||||||||||
U.S. | $ | 3,039 | $ | 2,798 | $ | 3,946 | ||||||
Foreign | (78 | ) | (68 | ) | 107 | |||||||
Total income before income taxes | 2,961 | 2,730 | 4,053 | |||||||||
Effective tax rate | ||||||||||||
Statutory tax rate | 21 | % | 35 | % | 35 | % | ||||||
Expected federal income tax expense | 622 | 956 | 1,419 | |||||||||
Tax effect of: | ||||||||||||
Nontaxable investment income | (150 | ) | (297 | ) | (323 | ) | ||||||
TCJA at enactment | — | 129 | — | |||||||||
Other, net | (34 | ) | (114 | ) | (57 | ) | ||||||
Total income tax expense | $ | 438 | $ | 674 | $ | 1,039 | ||||||
Effective tax rate | 15 | % | 25 | % | 26 | % |
Benefits Expected to be Paid | ||||||||
(in millions) | Pension Plans | Postretirement Benefit Plans | ||||||
2019 | $ | 239 | $ | 13 | ||||
2020 | 246 | 14 | ||||||
2021 | 255 | 15 | ||||||
2022 | 260 | 15 | ||||||
2023 | 268 | 15 | ||||||
2024 through 2028 | 1,361 | 72 |
(at December 31, 2018, in millions) | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Invested assets: | ||||||||||||||||
Fixed maturities | ||||||||||||||||
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities | $ | 2,064 | $ | 2,064 | $ | — | $ | — | ||||||||
Obligations of states, municipalities and political subdivisions | 28,611 | — | 28,599 | 12 | ||||||||||||
Debt securities issued by foreign governments | 1,257 | — | 1,257 | — | ||||||||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities | 2,573 | — | 2,554 | 19 | ||||||||||||
All other corporate bonds | 28,880 | — | 28,725 | 155 | ||||||||||||
Redeemable preferred stock | 79 | 3 | 76 | — | ||||||||||||
Total fixed maturities | 63,464 | 2,067 | 61,211 | 186 | ||||||||||||
Equity securities | ||||||||||||||||
Public common stock | 316 | 316 | — | — | ||||||||||||
Non-redeemable preferred stock | 52 | 30 | 22 | — | ||||||||||||
Total equity securities | 368 | 346 | 22 | — | ||||||||||||
Other investments | 52 | 16 | — | 36 | ||||||||||||
Total | $ | 63,884 | $ | 2,429 | $ | 61,233 | $ | 222 | ||||||||
Other liabilities | $ | 10 | $ | — | $ | — | $ | 10 |
(at December 31, 2017, in millions) | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Invested assets: | ||||||||||||||||
Fixed maturities | ||||||||||||||||
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities | $ | 2,076 | $ | 2,076 | $ | — | $ | — | ||||||||
Obligations of states, municipalities and political subdivisions | 30,915 | — | 30,910 | 5 | ||||||||||||
Debt securities issued by foreign governments | 1,509 | — | 1,509 | — | ||||||||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities | 2,410 | — | 2,371 | 39 | ||||||||||||
All other corporate bonds | 25,689 | 11 | 25,518 | 160 | ||||||||||||
Redeemable preferred stock | 95 | 3 | 92 | — | ||||||||||||
Total fixed maturities | 62,694 | 2,090 | 60,400 | 204 | ||||||||||||
Equity securities | ||||||||||||||||
Public common stock | 339 | 339 | — | — | ||||||||||||
Non-redeemable preferred stock | 114 | 45 | 69 | — | ||||||||||||
Total equity securities | 453 | 384 | 69 | — | ||||||||||||
Other investments | 57 | 19 | — | 38 | ||||||||||||
Total | $ | 63,204 | $ | 2,493 | $ | 60,469 | $ | 242 |
(at December 31, 2018, in millions) | Gross Carrying Amount | Accumulated Amortization | Net | |||||||||
Subject to amortization | ||||||||||||
Customer-related | $ | 98 | $ | 12 | $ | 86 | ||||||
Contract-based (1) | 208 | 175 | 33 | |||||||||
Total subject to amortization | 306 | 187 | 119 | |||||||||
Not subject to amortization | 226 | — | 226 | |||||||||
Total | $ | 532 | $ | 187 | $ | 345 |
(at December 31, 2017, in millions) | Gross Carrying Amount | Accumulated Amortization | Net | |||||||||
Subject to amortization | ||||||||||||
Customer-related | $ | 77 | $ | 4 | $ | 73 | ||||||
Contract-based (1) | 209 | 167 | 42 | |||||||||
Total subject to amortization | 286 | 171 | 115 | |||||||||
Not subject to amortization | 227 | — | 227 | |||||||||
Total | $ | 513 | $ | 171 | $ | 342 |
(1) | Contract-based intangible assets subject to amortization are comprised of fair value adjustments on claims and claim adjustment expense reserves, reinsurance recoverables and other contract-related intangible assets. Fair value adjustments recorded in connection with insurance acquisitions were based on management’s estimate of nominal claims and claim adjustment expense reserves and reinsurance recoverables. The method used calculated a risk adjustment to a risk-free discounted reserve that would, if reserves ran off as expected, produce results that yielded the assumed cost-of-capital on the capital supporting the loss reserves. The fair value adjustments are reported as other intangible assets on the consolidated balance sheet, and the amounts measured in accordance with the acquirer’s accounting policies for insurance contracts have been reported as part of the claims and claim adjustment expense reserves and reinsurance recoverables. The intangible assets are being recognized into income over the expected payment pattern. Because the time value of money and the risk adjustment (cost of capital) components of the intangible assets run off at different rates, the amount recognized in income may be a net benefit in some periods and a net expense in other periods. |
(at December 31, in millions) | 2018 | 2017 | ||||||
Business Insurance (1) | $ | 2,585 | $ | 2,585 | ||||
Bond & Specialty Insurance | 550 | 550 | ||||||
Personal Insurance | 776 | 790 | ||||||
Other | 26 | 26 | ||||||
Total | $ | 3,937 | $ | 3,951 |
(at December 31, 2018, in millions) | Gross Carrying Amount | Accumulated Amortization | Net | |||||||||
Subject to amortization | ||||||||||||
Customer-related | $ | 98 | $ | 12 | $ | 86 | ||||||
Contract-based (1) | 208 | 175 | 33 | |||||||||
Total subject to amortization | 306 | 187 | 119 | |||||||||
Not subject to amortization | 226 | — | 226 | |||||||||
Total | $ | 532 | $ | 187 | $ | 345 |
(at December 31, 2017, in millions) | Gross Carrying Amount | Accumulated Amortization | Net | |||||||||
Subject to amortization | ||||||||||||
Customer-related | $ | 77 | $ | 4 | $ | 73 | ||||||
Contract-based (1) | 209 | 167 | 42 | |||||||||
Total subject to amortization | 286 | 171 | 115 | |||||||||
Not subject to amortization | 227 | — | 227 | |||||||||
Total | $ | 513 | $ | 171 | $ | 342 |
(1) | Contract-based intangible assets subject to amortization are comprised of fair value adjustments on claims and claim adjustment expense reserves, reinsurance recoverables and other contract-related intangible assets. Fair value adjustments recorded in connection with insurance acquisitions were based on management’s estimate of nominal claims and claim adjustment expense reserves and reinsurance recoverables. The method used calculated a risk adjustment to a risk-free discounted reserve that would, if reserves ran off as expected, produce results that yielded the assumed cost-of-capital on the capital supporting the loss reserves. The fair value adjustments are reported as other intangible assets on the consolidated balance sheet, and the amounts measured in accordance with the acquirer’s accounting policies for insurance contracts have been reported as part of the claims and claim adjustment expense reserves and reinsurance recoverables. The intangible assets are being recognized into income over the expected payment pattern. Because the time value of money and the risk adjustment (cost of capital) components of the intangible assets run off at different rates, the amount recognized in income may be a net benefit in some periods and a net expense in other periods. |
(at and for the year ended December 31, in millions) | 2018 | 2017 | 2016 | |||||||||
Claims and claim adjustment expense reserves at beginning of year | $ | 49,633 | $ | 47,929 | $ | 48,272 | ||||||
Less reinsurance recoverables on unpaid losses | 8,123 | 7,981 | 8,449 | |||||||||
Net reserves at beginning of year | 41,510 | 39,948 | 39,823 | |||||||||
Estimated claims and claim adjustment expenses for claims arising in the current year | 18,614 | 17,846 | 15,675 | |||||||||
Estimated decrease in claims and claim adjustment expenses for claims arising in prior years | (406 | ) | (458 | ) | (680 | ) | ||||||
Total increases | 18,208 | 17,388 | 14,995 | |||||||||
Claims and claim adjustment expense payments for claims arising in: | ||||||||||||
Current year | 7,697 | 7,335 | 6,220 | |||||||||
Prior years | 9,363 | 8,708 | 8,576 | |||||||||
Total payments | 17,060 | 16,043 | 14,796 | |||||||||
Unrealized foreign exchange loss (gain) | (187 | ) | 217 | (74 | ) | |||||||
Net reserves at end of year | 42,471 | 41,510 | 39,948 | |||||||||
Plus reinsurance recoverables on unpaid losses | 8,182 | 8,123 | 7,981 | |||||||||
Claims and claim adjustment expense reserves at end of year | $ | 50,653 | $ | 49,633 | $ | 47,929 |
Pension Plans | Postretirement Benefit Plans | |||||||||||||||||||||||
(for the year ended December 31, in millions) | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | ||||||||||||||||||
Net Periodic Benefit Cost: | ||||||||||||||||||||||||
Service cost | $ | 133 | $ | 119 | $ | 118 | $ | — | $ | — | $ | — | ||||||||||||
Non-service cost: | ||||||||||||||||||||||||
Interest cost on benefit obligation | 126 | 127 | 122 | 7 | 7 | 8 | ||||||||||||||||||
Expected return on plan assets | (264 | ) | (240 | ) | (230 | ) | — | — | — | |||||||||||||||
Settlement | — | 3 | 1 | — | — | — | ||||||||||||||||||
Amortization of unrecognized: | ||||||||||||||||||||||||
Prior service benefit | (1 | ) | (1 | ) | (1 | ) | (4 | ) | (4 | ) | (3 | ) | ||||||||||||
Net actuarial loss | 91 | 85 | 66 | — | — | — | ||||||||||||||||||
Total non-service cost (benefit) | (48 | ) | (26 | ) | (42 | ) | 3 | 3 | 5 | |||||||||||||||
Net periodic benefit cost | 85 | 93 | 76 | 3 | 3 | 5 | ||||||||||||||||||
Other Changes in Benefit Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income: | ||||||||||||||||||||||||
Prior service benefit | — | — | — | — | — | — | ||||||||||||||||||
Net actuarial loss (gain) | 160 | 40 | 66 | (18 | ) | 13 | (17 | ) | ||||||||||||||||
Foreign currency exchange rate change | (1 | ) | 2 | (2 | ) | — | (1 | ) | 1 | |||||||||||||||
Settlement | — | (2 | ) | (1 | ) | — | — | — | ||||||||||||||||
Amortization of prior service benefit | 1 | 1 | 1 | 4 | 4 | 3 | ||||||||||||||||||
Amortization of net actuarial loss | (91 | ) | (85 | ) | (66 | ) | — | — | — | |||||||||||||||
Total other changes recognized in other comprehensive income | 69 | (44 | ) | (2 | ) | (14 | ) | 16 | (13 | ) | ||||||||||||||
Total other changes recognized in net periodic benefit cost and other comprehensive income | $ | 154 | $ | 49 | $ | 74 | $ | (11 | ) | $ | 19 | $ | (8 | ) |
2018 (in millions, except per share amounts) | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Total | |||||||||||||||
Total revenues | $ | 7,286 | $ | 7,477 | $ | 7,723 | $ | 7,796 | $ | 30,282 | ||||||||||
Total expenses | 6,508 | 6,846 | 6,917 | 7,050 | 27,321 | |||||||||||||||
Income before income taxes | 778 | 631 | 806 | 746 | 2,961 | |||||||||||||||
Income tax expense | 109 | 107 | 97 | 125 | 438 | |||||||||||||||
Net income | $ | 669 | $ | 524 | $ | 709 | $ | 621 | $ | 2,523 | ||||||||||
Net income per share (1): | ||||||||||||||||||||
Basic | $ | 2.45 | $ | 1.93 | $ | 2.65 | $ | 2.33 | $ | 9.37 | ||||||||||
Diluted | 2.42 | 1.92 | 2.62 | 2.32 | 9.28 | |||||||||||||||
2017 (in millions, except per share amounts) | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Total | |||||||||||||||
Total revenues | $ | 6,942 | $ | 7,184 | $ | 7,325 | $ | 7,451 | $ | 28,902 | ||||||||||
Total expenses | 6,182 | 6,394 | 7,005 | 6,591 | 26,172 | |||||||||||||||
Income before income taxes | 760 | 790 | 320 | 860 | 2,730 | |||||||||||||||
Income tax expense (2) | 143 | 195 | 27 | 309 | 674 | |||||||||||||||
Net income | $ | 617 | $ | 595 | $ | 293 | $ | 551 | $ | 2,056 | ||||||||||
Net income per share (1): | ||||||||||||||||||||
Basic | $ | 2.19 | $ | 2.13 | $ | 1.06 | $ | 2.00 | $ | 7.39 | ||||||||||
Diluted | 2.17 | 2.11 | 1.05 | 1.98 | 7.33 |
(1) | Due to the use of an average number of shares for each quarter, the sum of the quarterly earnings per share may not equal the total earnings per share for the full year. |
(2) | Income tax expense for the fourth quarter and full year of 2017 included a net charge of $129 million to reflect the change in tax laws and tax rates enacted in the U.S. on December 22, 2017 as part of the Tax Cuts and Jobs Act of 2017, resulting primarily from revaluing the Company’s deferred tax assets and liabilities and the tax imposed on accumulated foreign earnings. |
(for the year ended December 31, in millions) | 2018 | 2017 | 2016 | |||||||||
U.S. | $ | 28,418 | $ | 27,253 | $ | 25,904 | ||||||
Non-U.S.: | ||||||||||||
Canada | 1,293 | 1,232 | 1,154 | |||||||||
Other Non-U.S. | 571 | 417 | 567 | |||||||||
Total Non-U.S. | 1,864 | 1,649 | 1,721 | |||||||||
Total revenues | $ | 30,282 | $ | 28,902 | $ | 27,625 |
(for the year ended December 31, in millions) | Business Insurance | Bond & Specialty Insurance | Personal Insurance | Total Reportable Segments | ||||||||||||
2018 | ||||||||||||||||
Premiums | $ | 14,722 | $ | 2,420 | $ | 9,917 | $ | 27,059 | ||||||||
Net investment income | 1,833 | 233 | 408 | 2,474 | ||||||||||||
Fee income | 412 | — | 20 | 432 | ||||||||||||
Other revenues | 112 | 23 | 66 | 201 | ||||||||||||
Total segment revenues (1) | $ | 17,079 | $ | 2,676 | $ | 10,411 | $ | 30,166 | ||||||||
Amortization and depreciation | $ | 2,943 | $ | 515 | $ | 1,719 | $ | 5,177 | ||||||||
Income tax expense | 259 | 198 | 42 | 499 | ||||||||||||
Segment income (1) | 1,638 | 793 | 297 | 2,728 | ||||||||||||
2017 | ||||||||||||||||
Premiums | $ | 14,146 | $ | 2,307 | $ | 9,230 | $ | 25,683 | ||||||||
Net investment income | 1,786 | 228 | 383 | 2,397 | ||||||||||||
Fee income | 430 | — | 17 | 447 | ||||||||||||
Other revenues | 69 | 24 | 60 | 153 | ||||||||||||
Total segment revenues (1) | $ | 16,431 | $ | 2,559 | $ | 9,690 | $ | 28,680 | ||||||||
Amortization and depreciation | $ | 2,852 | $ | 493 | $ | 1,627 | $ | 4,972 | ||||||||
Income tax expense (benefit) | 448 | 208 | (44 | ) | 612 | |||||||||||
Segment income (1) | 1,613 | 556 | 128 | 2,297 | ||||||||||||
2016 | ||||||||||||||||
Premiums | $ | 13,855 | $ | 2,260 | $ | 8,419 | $ | 24,534 | ||||||||
Net investment income | 1,701 | 239 | 362 | 2,302 | ||||||||||||
Fee income | 442 | — | 16 | 458 | ||||||||||||
Other revenues | 168 | 21 | 63 | 252 | ||||||||||||
Total segment revenues (1) | $ | 16,166 | $ | 2,520 | $ | 8,860 | $ | 27,546 | ||||||||
Amortization and depreciation | $ | 2,783 | $ | 491 | $ | 1,530 | $ | 4,804 | ||||||||
Income tax expense | 656 | 309 | 192 | 1,157 | ||||||||||||
Segment income (1) | 1,982 | 712 | 517 | 3,211 |
(1) | Segment revenues for reportable business segments exclude net realized investment gains. Segment income for reportable business segments equals net income excluding the after-tax impact of net realized investment gains and, in 2017, the impact of the Tax Cuts and Jobs Act of 2017 at enactment. |
Stock Options | Number | Weighted Average Exercise Price | Weighted Average Contractual Life Remaining | Aggregate Intrinsic Value ($ in millions) | |||||||||
Outstanding, beginning of year | 8,712,467 | $ | 97.45 | ||||||||||
Original grants | 1,632,361 | 140.85 | |||||||||||
Exercised | (1,229,850 | ) | 83.74 | ||||||||||
Forfeited or expired | (120,622 | ) | 117.39 | ||||||||||
Outstanding, end of year | 8,994,356 | $ | 106.93 | 6.2 years | $ | 149 | |||||||
Vested at end of year (1) | 5,861,909 | $ | 99.28 | 5.3 years | $ | 134 | |||||||
Exercisable at end of year | 3,889,013 | $ | 88.83 | 3.9 years | $ | 123 |
(1) | Represents awards for which the requisite service has been rendered, including those that are retirement eligible. |
(for the year ended December 31,) | 2018 | 2017 | 2016 | |||||||||
Assumptions used in estimating fair value of options on grant date | ||||||||||||
Expected term of stock options | 6 years | 6 years | 5 – 6 years | |||||||||
Expected volatility of Company’s stock | 14.94 | % | 16.50 | % | 15.14% – 16.80% | |||||||
Weighted average volatility | 14.94 | % | 16.50 | % | 16.79 | % | ||||||
Expected annual dividend per share | $2.88 | $2.68 | $2.44 – $2.68 | |||||||||
Risk-free rate | 2.68 | % | 2.08 | % | 1.36% – 2.23% | |||||||
Additional information | ||||||||||||
Weighted average grant-date fair value of options granted (per share) | $ | 20.13 | $ | 16.15 | $ | 13.29 | ||||||
Total intrinsic value of options exercised during the year (in millions) | $ | 67 | $ | 90 | $ | 167 |
Restricted and Deferred Stock Units | Performance Shares | |||||||||||||
Other Equity Instruments | Number | Weighted Average Grant-Date Fair Value | Number | Weighted Average Grant-Date Fair Value | ||||||||||
Nonvested, beginning of year | 1,286,970 | $ | 111.74 | 787,732 | $ | 112.40 | ||||||||
Granted | 559,807 | 139.20 | 319,408 | 140.85 | ||||||||||
Vested | (554,640 | ) | (1) | 114.77 | (385,604 | ) | (2) | 106.06 | ||||||
Forfeited | (75,461 | ) | 122.29 | (68,593 | ) | 123.01 | ||||||||
Performance-based adjustment | — | — | 31,946 | (3) | 126.29 | |||||||||
Nonvested, end of year | 1,216,676 | (4) | $ | 122.34 | 684,889 | $ | 128.83 |
(1) | Represents awards for which the requisite service has been rendered. |
(2) | Reflects the number of performance shares attributable to the performance goals attained over the completed performance period (three years) and for which service conditions have been met. |
(3) | Represents the current year change in estimated performance shares to reflect the attainment of performance goals for the awards that were granted in each of the years 2016 through 2018. |
(4) | 95,953 shares of restricted common stock were also issued outside of the 2014 Incentive Plan in 2017 in connection with the acquisition of Simply Business, of which 92,995 shares remain unvested and are not included in this table. See note 9. |
(in millions, except per share amounts) Quarterly Period Ending | Number of shares repurchased | Cost of shares repurchased | Average price paid per share | Remaining capacity under share repurchase authorization | |||||||||||
March 31, 2018 | 2.5 | $ | 350 | $ | 141.84 | $ | 4,206 | ||||||||
June 30, 2018 | 2.7 | 350 | 129.66 | 3,856 | |||||||||||
September 30, 2018 | 3.0 | 400 | 130.22 | 3,456 | |||||||||||
December 31, 2018 | 1.4 | 170 | 125.09 | 3,286 | |||||||||||
Total | 9.6 | $ | 1,270 | 132.33 | 3,286 |
Less than 12 months | 12 months or longer | Total | ||||||||||||||||||||||
(at December 31, 2018, in millions) | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||||||||
Fixed maturities | ||||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities | $ | 484 | $ | 5 | $ | 1,011 | $ | 11 | $ | 1,495 | $ | 16 | ||||||||||||
Obligations of states, municipalities and political subdivisions | 5,241 | 82 | 3,298 | 125 | 8,539 | 207 | ||||||||||||||||||
Debt securities issued by foreign governments | 96 | — | 328 | 5 | 424 | 5 | ||||||||||||||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities | 593 | 9 | 1,070 | 29 | 1,663 | 38 | ||||||||||||||||||
All other corporate bonds | 12,622 | 303 | 6,872 | 280 | 19,494 | 583 | ||||||||||||||||||
Total fixed maturities | $ | 19,036 | $ | 399 | $ | 12,579 | $ | 450 | $ | 31,615 | $ | 849 |
Less than 12 months | 12 months or longer | Total | ||||||||||||||||||||||
(at December 31, 2017, in millions) | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||||||||
Fixed maturities | ||||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities | $ | 1,150 | $ | 5 | $ | 470 | $ | 3 | $ | 1,620 | $ | 8 | ||||||||||||
Obligations of states, municipalities and political subdivisions | 505 | 2 | 2,959 | 47 | 3,464 | 49 | ||||||||||||||||||
Debt securities issued by foreign governments | 394 | 6 | 111 | 4 | 505 | 10 | ||||||||||||||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities | 1,021 | 7 | 250 | 4 | 1,271 | 11 | ||||||||||||||||||
All other corporate bonds | 6,062 | 48 | 1,990 | 52 | 8,052 | 100 | ||||||||||||||||||
Total fixed maturities | 9,132 | 68 | 5,780 | 110 | 14,912 | 178 | ||||||||||||||||||
Equity securities | ||||||||||||||||||||||||
Public common stock | 18 | — | 34 | 1 | 52 | 1 | ||||||||||||||||||
Non-redeemable preferred stock | 3 | — | 56 | 6 | 59 | 6 | ||||||||||||||||||
Total equity securities | 21 | — | 90 | 7 | 111 | 7 | ||||||||||||||||||
Total | $ | 9,153 | $ | 68 | $ | 5,870 | $ | 117 | $ | 15,023 | $ | 185 |
(for the year ended December 31, in millions) | Business Insurance | Bond & Specialty Insurance | Personal Insurance | Total Reportable Segments | ||||||||||||
2018 | ||||||||||||||||
Premiums | $ | 14,722 | $ | 2,420 | $ | 9,917 | $ | 27,059 | ||||||||
Net investment income | 1,833 | 233 | 408 | 2,474 | ||||||||||||
Fee income | 412 | — | 20 | 432 | ||||||||||||
Other revenues | 112 | 23 | 66 | 201 | ||||||||||||
Total segment revenues (1) | $ | 17,079 | $ | 2,676 | $ | 10,411 | $ | 30,166 | ||||||||
Amortization and depreciation | $ | 2,943 | $ | 515 | $ | 1,719 | $ | 5,177 | ||||||||
Income tax expense | 259 | 198 | 42 | 499 | ||||||||||||
Segment income (1) | 1,638 | 793 | 297 | 2,728 | ||||||||||||
2017 | ||||||||||||||||
Premiums | $ | 14,146 | $ | 2,307 | $ | 9,230 | $ | 25,683 | ||||||||
Net investment income | 1,786 | 228 | 383 | 2,397 | ||||||||||||
Fee income | 430 | — | 17 | 447 | ||||||||||||
Other revenues | 69 | 24 | 60 | 153 | ||||||||||||
Total segment revenues (1) | $ | 16,431 | $ | 2,559 | $ | 9,690 | $ | 28,680 | ||||||||
Amortization and depreciation | $ | 2,852 | $ | 493 | $ | 1,627 | $ | 4,972 | ||||||||
Income tax expense (benefit) | 448 | 208 | (44 | ) | 612 | |||||||||||
Segment income (1) | 1,613 | 556 | 128 | 2,297 | ||||||||||||
2016 | ||||||||||||||||
Premiums | $ | 13,855 | $ | 2,260 | $ | 8,419 | $ | 24,534 | ||||||||
Net investment income | 1,701 | 239 | 362 | 2,302 | ||||||||||||
Fee income | 442 | — | 16 | 458 | ||||||||||||
Other revenues | 168 | 21 | 63 | 252 | ||||||||||||
Total segment revenues (1) | $ | 16,166 | $ | 2,520 | $ | 8,860 | $ | 27,546 | ||||||||
Amortization and depreciation | $ | 2,783 | $ | 491 | $ | 1,530 | $ | 4,804 | ||||||||
Income tax expense | 656 | 309 | 192 | 1,157 | ||||||||||||
Segment income (1) | 1,982 | 712 | 517 | 3,211 |
(1) | Segment revenues for reportable business segments exclude net realized investment gains. Segment income for reportable business segments equals net income excluding the after-tax impact of net realized investment gains and, in 2017, the impact of the Tax Cuts and Jobs Act of 2017 at enactment. |
(for the year ended December 31, in millions) | 2018 | 2017 | 2016 | |||||||||
Business Insurance: | ||||||||||||
Domestic: | ||||||||||||
Select Accounts | $ | 2,828 | $ | 2,800 | $ | 2,729 | ||||||
Middle Market | 8,214 | 7,756 | 7,379 | |||||||||
National Accounts | 1,025 | 1,010 | 1,058 | |||||||||
National Property and Other | 1,805 | 1,691 | 1,779 | |||||||||
Total Domestic | 13,872 | 13,257 | 12,945 | |||||||||
International | 1,084 | 1,013 | 955 | |||||||||
Total Business Insurance | 14,956 | 14,270 | 13,900 | |||||||||
Bond & Specialty Insurance: | ||||||||||||
Domestic: | ||||||||||||
Management Liability | 1,455 | 1,367 | 1,342 | |||||||||
Surety | 835 | 793 | 757 | |||||||||
Total Domestic | 2,290 | 2,160 | 2,099 | |||||||||
International | 238 | 199 | 172 | |||||||||
Total Bond & Specialty Insurance | 2,528 | 2,359 | 2,271 | |||||||||
Personal Insurance: | ||||||||||||
Domestic: | ||||||||||||
Agency: | ||||||||||||
Automobile | 4,972 | 4,646 | 4,103 | |||||||||
Homeowners and Other | 4,148 | 3,933 | 3,772 | |||||||||
Total Agency | 9,120 | 8,579 | 7,875 | |||||||||
Direct-to-Consumer | 396 | 361 | 309 | |||||||||
Total Domestic | 9,516 | 8,940 | 8,184 | |||||||||
International | 708 | 650 | 603 | |||||||||
Total Personal Insurance | 10,224 | 9,590 | 8,787 | |||||||||
Total consolidated net written premiums | $ | 27,708 | $ | 26,219 | $ | 24,958 |
(for the year ended December 31, in millions) | 2018 | 2017 | 2016 | |||||||||
Revenue reconciliation | ||||||||||||
Earned premiums | ||||||||||||
Business Insurance: | ||||||||||||
Domestic: | ||||||||||||
Workers’ compensation | $ | 3,899 | $ | 3,962 | $ | 3,969 | ||||||
Commercial automobile | 2,388 | 2,132 | 2,010 | |||||||||
Commercial property | 1,828 | 1,775 | 1,769 | |||||||||
General liability | 2,181 | 2,047 | 1,977 | |||||||||
Commercial multi-peril | 3,333 | 3,198 | 3,148 | |||||||||
Other | 28 | 29 | 31 | |||||||||
Total Domestic | 13,657 | 13,143 | 12,904 | |||||||||
International | 1,065 | 1,003 | 951 | |||||||||
Total Business Insurance | 14,722 | 14,146 | 13,855 | |||||||||
Bond & Specialty Insurance: | ||||||||||||
Domestic: | ||||||||||||
Fidelity and surety | 1,017 | 977 | 962 | |||||||||
General liability | 1,004 | 962 | 946 | |||||||||
Other | 195 | 187 | 180 | |||||||||
Total Domestic | 2,216 | 2,126 | 2,088 | |||||||||
International | 204 | 181 | 172 | |||||||||
Total Bond & Specialty Insurance | 2,420 | 2,307 | 2,260 | |||||||||
Personal Insurance: | ||||||||||||
Domestic | ||||||||||||
Automobile | 5,097 | 4,655 | 4,013 | |||||||||
Homeowners and Other | 4,135 | 3,943 | 3,813 | |||||||||
Total Domestic | 9,232 | 8,598 | 7,826 | |||||||||
International | 685 | 632 | 593 | |||||||||
Total Personal Insurance | 9,917 | 9,230 | 8,419 | |||||||||
Total earned premiums | 27,059 | 25,683 | 24,534 | |||||||||
Net investment income | 2,474 | 2,397 | 2,302 | |||||||||
Fee income | 432 | 447 | 458 | |||||||||
Other revenues | 201 | 153 | 252 | |||||||||
Total segment revenues | 30,166 | 28,680 | 27,546 | |||||||||
Other revenues | 2 | 6 | 11 | |||||||||
Net realized investment gains | 114 | 216 | 68 | |||||||||
Total revenues | $ | 30,282 | $ | 28,902 | $ | 27,625 | ||||||
Income reconciliation, net of tax | ||||||||||||
Total segment income | $ | 2,728 | $ | 2,297 | $ | 3,211 | ||||||
Interest Expense and Other (1) | (298 | ) | (254 | ) | (244 | ) | ||||||
Core income | 2,430 | 2,043 | 2,967 | |||||||||
Net realized investment gains | 93 | 142 | 47 | |||||||||
Impact of Tax Cuts and Jobs Act of 2017 at enactment | — | (129 | ) | — | ||||||||
Net income | $ | 2,523 | $ | 2,056 | $ | 3,014 |
(1) | The primary component of Interest Expense and Other was after-tax interest expense of $278 million, $240 million and $236 million in 2018, 2017 and 2016, respectively. |
(at December 31, in millions) | 2018 | 2017 | ||||||
Asset reconciliation: | ||||||||
Business Insurance | $ | 78,965 | $ | 78,082 | ||||
Bond & Specialty Insurance | 8,693 | 8,776 | ||||||
Personal Insurance | 15,943 | 15,949 | ||||||
Total assets for reportable segments | 103,601 | 102,807 | ||||||
Other assets (1) | 632 | 676 | ||||||
Total consolidated assets | $ | 104,233 | $ | 103,483 |
(1) | The primary components of other assets at December 31, 2018 were accrued over-funded benefit plan assets related to the Company's qualified domestic pension plan and other intangible assets. The primary components of other assets at December 31, 2017 were accrued over-funded benefit plan assets related to the Company's qualified domestic pension plan, other intangible assets and deferred taxes. |
(for the year ended December 31, in millions) | 2018 | 2017 | 2016 | |||||||||
U.S. | $ | 28,418 | $ | 27,253 | $ | 25,904 | ||||||
Non-U.S.: | ||||||||||||
Canada | 1,293 | 1,232 | 1,154 | |||||||||
Other Non-U.S. | 571 | 417 | 567 | |||||||||
Total Non-U.S. | 1,864 | 1,649 | 1,721 | |||||||||
Total revenues | $ | 30,282 | $ | 28,902 | $ | 27,625 |
(for the year ended December 31,) | 2018 | 2017 | 2016 | |||||||||
Assumptions used in estimating fair value of options on grant date | ||||||||||||
Expected term of stock options | 6 years | 6 years | 5 – 6 years | |||||||||
Expected volatility of Company’s stock | 14.94 | % | 16.50 | % | 15.14% – 16.80% | |||||||
Weighted average volatility | 14.94 | % | 16.50 | % | 16.79 | % | ||||||
Expected annual dividend per share | $2.88 | $2.68 | $2.44 – $2.68 | |||||||||
Risk-free rate | 2.68 | % | 2.08 | % | 1.36% – 2.23% | |||||||
Additional information | ||||||||||||
Weighted average grant-date fair value of options granted (per share) | $ | 20.13 | $ | 16.15 | $ | 13.29 | ||||||
Total intrinsic value of options exercised during the year (in millions) | $ | 67 | $ | 90 | $ | 167 |
(dollars in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||
2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | ||||||||||||||||||||||||||||||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||||||
Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | IBNR Reserves Dec 31, 2018 | Cumulative Number of Reported Claims | |||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 1,060 | $ | 1,071 | $ | 1,028 | $ | 960 | $ | 869 | $ | 837 | $ | 809 | $ | 796 | $ | 783 | $ | 775 | $ | 56 | 25,702 | ||||||||||||||||||||||||
2010 | 1,028 | 1,031 | 1,021 | 959 | 927 | 912 | 918 | 908 | 911 | 79 | 27,911 | ||||||||||||||||||||||||||||||||||||
2011 | 1,004 | 1,074 | 1,065 | 998 | 972 | 935 | 913 | 908 | 80 | 27,444 | |||||||||||||||||||||||||||||||||||||
2012 | 989 | 985 | 935 | 913 | 892 | 905 | 917 | 98 | 24,801 | ||||||||||||||||||||||||||||||||||||||
2013 | 965 | 975 | 958 | 940 | 927 | 933 | 101 | 22,446 | |||||||||||||||||||||||||||||||||||||||
2014 | 976 | 989 | 983 | 948 | 956 | 177 | 22,108 | ||||||||||||||||||||||||||||||||||||||||
2015 | 998 | 956 | 923 | 967 | 222 | 21,033 | |||||||||||||||||||||||||||||||||||||||||
2016 | 1,075 | 1,058 | 1,087 | 439 | 19,190 | ||||||||||||||||||||||||||||||||||||||||||
2017 | 1,133 | 1,143 | 717 | 16,464 | |||||||||||||||||||||||||||||||||||||||||||
2018 | 1,253 | 1,080 | 13,107 | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 9,850 |
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 35 | $ | 167 | $ | 314 | $ | 446 | $ | 543 | $ | 613 | $ | 643 | $ | 667 | $ | 689 | $ | 701 | ||||||||||||||||||||||||||||
2010 | 35 | 139 | 324 | 487 | 629 | 702 | 756 | 781 | 800 | |||||||||||||||||||||||||||||||||||||||
2011 | 47 | 187 | 355 | 539 | 660 | 725 | 762 | 799 | ||||||||||||||||||||||||||||||||||||||||
2012 | 32 | 150 | 295 | 489 | 589 | 699 | 754 | Liability for Claims | ||||||||||||||||||||||||||||||||||||||||
2013 | 35 | 175 | 363 | 498 | 639 | 745 | And Allocated Claim | |||||||||||||||||||||||||||||||||||||||||
2014 | 37 | 163 | 321 | 515 | 640 | Adjustment Expenses, | ||||||||||||||||||||||||||||||||||||||||||
2015 | 36 | 137 | 336 | 558 | Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||
2016 | 35 | 191 | 421 | |||||||||||||||||||||||||||||||||||||||||||||
2017 | 40 | 180 | 2009 - | Before | ||||||||||||||||||||||||||||||||||||||||||||
2018 | 42 | 2018 | 2009 | |||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 5,640 | $ | 4,210 | $ | 2,949 | ||||||||||||||||||||||||||||||||||||||||||
Total net liability | $ | 7,159 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | ||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | ||||||||||||||||||||
3.8 | % | 13.6 | % | 19.0 | % | 19.1 | % | 13.4 | % | 9.5 | % | 5.0 | % | 3.2 | % | 2.5 | % | 1.5 | % |
(dollars in millions) | |||||||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | |||||||||||||||||||||||
Incurred Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance | |||||||||||||||||||||||||||
Unaudited | |||||||||||||||||||||||||||
Accident Year | IBNR Reserves December 31, 2018 | Cumulative Number of Reported Claims | |||||||||||||||||||||||||
2014 | $ | 936 | $ | 860 | $ | 836 | $ | 835 | $ | 834 | $ | 6 | 21,568 | ||||||||||||||
2015 | 786 | 750 | 741 | 731 | 6 | 20,143 | |||||||||||||||||||||
2016 | 896 | 863 | 820 | 22 | 22,267 | ||||||||||||||||||||||
2017 | 1,209 | 1,177 | 30 | 24,855 | |||||||||||||||||||||||
2018 | 1,093 | 73 | 21,547 | ||||||||||||||||||||||||
Total | $ | 4,655 |
Cumulative Paid Claims and Allocated Claim | ||||||||||||||||||||||||||||
Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||
Liability for Claims | ||||||||||||||||||||||||||||
Accident Year | And Allocated Claim | |||||||||||||||||||||||||||
2014 | $ | 464 | $ | 710 | $ | 775 | $ | 803 | $ | 817 | Adjustment Expenses, | |||||||||||||||||
2015 | 376 | 615 | 681 | 699 | Net of Reinsurance | |||||||||||||||||||||||
2016 | 441 | 685 | 745 | |||||||||||||||||||||||||
2017 | 618 | 1,003 | 2014 - | Before | ||||||||||||||||||||||||
2018 | 561 | 2018 | 2014 | |||||||||||||||||||||||||
Total | $ | 3,825 | $ | 830 | $ | 143 | ||||||||||||||||||||||
Total net liability | $ | 973 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | |||||||||||||||
Unaudited | |||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | ||||||||||
52.9 | % | 31.2 | % | 8.0 | % | 2.9 | % | 1.7 | % |
(dollars in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||
2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | ||||||||||||||||||||||||||||||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||||||
Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | IBNR Reserves December 31, 2018 | Cumulative Number of Reported Claims | |||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 1,484 | $ | 1,506 | $ | 1,501 | $ | 1,498 | $ | 1,511 | $ | 1,514 | $ | 1,514 | $ | 1,509 | $ | 1,500 | $ | 1,493 | $ | 21 | 103,448 | ||||||||||||||||||||||||
2010 | 1,711 | 1,826 | 1,832 | 1,861 | 1,895 | 1,892 | 1,898 | 1,885 | 1,881 | 32 | 111,931 | ||||||||||||||||||||||||||||||||||||
2011 | 2,235 | 2,244 | 2,269 | 2,286 | 2,296 | 2,287 | 2,283 | 2,279 | 38 | 125,743 | |||||||||||||||||||||||||||||||||||||
2012 | 1,885 | 1,883 | 1,903 | 1,888 | 1,888 | 1,867 | 1,859 | 42 | 104,800 | ||||||||||||||||||||||||||||||||||||||
2013 | 1,615 | 1,623 | 1,620 | 1,609 | 1,591 | 1,600 | 51 | 83,667 | |||||||||||||||||||||||||||||||||||||||
2014 | 1,663 | 1,627 | 1,625 | 1,617 | 1,626 | 72 | 78,097 | ||||||||||||||||||||||||||||||||||||||||
2015 | 1,568 | 1,625 | 1,593 | 1,597 | 110 | 71,242 | |||||||||||||||||||||||||||||||||||||||||
2016 | 1,662 | 1,623 | 1,598 | 204 | 68,024 | ||||||||||||||||||||||||||||||||||||||||||
2017 | 1,872 | 1,928 | 357 | 69,218 | |||||||||||||||||||||||||||||||||||||||||||
2018 | 1,976 | 605 | 58,784 | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 17,837 |
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 603 | $ | 958 | $ | 1,121 | $ | 1,264 | $ | 1,360 | $ | 1,408 | $ | 1,436 | $ | 1,449 | $ | 1,457 | $ | 1,466 | ||||||||||||||||||||||||||||
2010 | 709 | 1,180 | 1,395 | 1,579 | 1,698 | 1,763 | 1,798 | 1,819 | 1,834 | |||||||||||||||||||||||||||||||||||||||
2011 | 1,060 | 1,573 | 1,803 | 1,979 | 2,088 | 2,156 | 2,193 | 2,222 | ||||||||||||||||||||||||||||||||||||||||
2012 | 795 | 1,246 | 1,424 | 1,590 | 1,699 | 1,752 | 1,780 | Liability for Claims | ||||||||||||||||||||||||||||||||||||||||
2013 | 644 | 987 | 1,167 | 1,304 | 1,410 | 1,475 | And Allocated Claim | |||||||||||||||||||||||||||||||||||||||||
2014 | 628 | 956 | 1,154 | 1,328 | 1,448 | Adjustment Expenses, | ||||||||||||||||||||||||||||||||||||||||||
2015 | 595 | 970 | 1,144 | 1,310 | Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||
2016 | 585 | 950 | 1,133 | |||||||||||||||||||||||||||||||||||||||||||||
2017 | 716 | 1,199 | 2009 - | Before | ||||||||||||||||||||||||||||||||||||||||||||
2018 | 792 | 2018 | 2009 | |||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 14,659 | $ | 3,178 | $ | 357 | ||||||||||||||||||||||||||||||||||||||||||
Total net liability | $ | 3,535 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | ||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | ||||||||||||||||||||
39.7 | % | 23.2 | % | 11.0 | % | 9.4 | % | 6.2 | % | 3.3 | % | 1.7 | % | 1.1 | % | 0.7 | % | 0.6 | % |
(dollars in millions) | |||||||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | |||||||||||||||||||||||
Incurred Claims and Allocated Claims Adjustment | |||||||||||||||||||||||||||
Expenses, Net of Reinsurance | |||||||||||||||||||||||||||
Unaudited | |||||||||||||||||||||||||||
Accident Year | IBNR Reserves December 31, 2018 | Cumulative Number of Reported Claims | |||||||||||||||||||||||||
2014 | $ | 1,156 | $ | 1,153 | $ | 1,155 | $ | 1,171 | $ | 1,193 | $ | 36 | 177,493 | ||||||||||||||
2015 | 1,188 | 1,202 | 1,234 | 1,283 | 83 | 173,333 | |||||||||||||||||||||
2016 | 1,278 | 1,303 | 1,371 | 191 | 182,647 | ||||||||||||||||||||||
2017 | 1,386 | 1,501 | 401 | 190,126 | |||||||||||||||||||||||
2018 | 1,645 | 736 | 185,419 | ||||||||||||||||||||||||
Total | $ | 6,993 |
Cumulative Paid Claims and Allocated Claim | ||||||||||||||||||||||||||||
Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||
Liability for Claims | ||||||||||||||||||||||||||||
Accident Year | And Allocated Claim | |||||||||||||||||||||||||||
2014 | $ | 394 | $ | 611 | $ | 812 | $ | 977 | $ | 1,089 | Adjustment Expenses, | |||||||||||||||||
2015 | 405 | 650 | 885 | 1,058 | Net of Reinsurance | |||||||||||||||||||||||
2016 | 412 | 688 | 931 | |||||||||||||||||||||||||
2017 | 456 | 746 | 2014 - | Before | ||||||||||||||||||||||||
2018 | 515 | 2018 | 2014 | |||||||||||||||||||||||||
Total | $ | 4,339 | $ | 2,654 | $ | 207 | ||||||||||||||||||||||
Total net liability | $ | 2,861 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | |||||||||||||||
Unaudited | |||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | ||||||||||
31.3 | % | 19.2 | % | 17.6 | % | 13.7 | % | 9.3 | % |
(dollars in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||
2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | ||||||||||||||||||||||||||||||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||||||
Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | IBNR Reserves December 31, 2018 | Cumulative Number of Reported Claims | |||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 1,799 | $ | 1,778 | $ | 1,746 | $ | 1,753 | $ | 1,753 | $ | 1,766 | $ | 1,775 | $ | 1,750 | $ | 1,736 | $ | 1,728 | $ | 221 | 104,789 | ||||||||||||||||||||||||
2010 | 1,886 | 2,042 | 2,035 | 2,056 | 2,049 | 2,052 | 2,055 | 2,021 | 2,003 | 271 | 117,368 | ||||||||||||||||||||||||||||||||||||
2011 | 2,284 | 2,303 | 2,347 | 2,350 | 2,379 | 2,385 | 2,363 | 2,348 | 356 | 136,728 | |||||||||||||||||||||||||||||||||||||
2012 | 2,447 | 2,456 | 2,457 | 2,456 | 2,445 | 2,453 | 2,416 | 404 | 137,922 | ||||||||||||||||||||||||||||||||||||||
2013 | 2,553 | 2,545 | 2,540 | 2,506 | 2,463 | 2,423 | 473 | 132,424 | |||||||||||||||||||||||||||||||||||||||
2014 | 2,554 | 2,553 | 2,547 | 2,476 | 2,430 | 563 | 124,507 | ||||||||||||||||||||||||||||||||||||||||
2015 | 2,644 | 2,585 | 2,505 | 2,441 | 751 | 122,388 | |||||||||||||||||||||||||||||||||||||||||
2016 | 2,768 | 2,690 | 2,569 | 863 | 122,493 | ||||||||||||||||||||||||||||||||||||||||||
2017 | 2,779 | 2,681 | 1,179 | 119,890 | |||||||||||||||||||||||||||||||||||||||||||
2018 | 2,744 | 1,738 | 109,002 | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 23,783 |
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 288 | $ | 623 | $ | 828 | $ | 961 | $ | 1,065 | $ | 1,137 | $ | 1,193 | $ | 1,235 | $ | 1,274 | $ | 1,303 | ||||||||||||||||||||||||||||
2010 | 341 | 750 | 978 | 1,133 | 1,246 | 1,321 | 1,385 | 1,430 | 1,465 | |||||||||||||||||||||||||||||||||||||||
2011 | 420 | 911 | 1,185 | 1,365 | 1,487 | 1,583 | 1,652 | 1,696 | ||||||||||||||||||||||||||||||||||||||||
2012 | 443 | 940 | 1,217 | 1,394 | 1,536 | 1,629 | 1,689 | Liability for Claims | ||||||||||||||||||||||||||||||||||||||||
2013 | 458 | 954 | 1,237 | 1,413 | 1,525 | 1,604 | And Allocated Claim | |||||||||||||||||||||||||||||||||||||||||
2014 | 455 | 944 | 1,224 | 1,399 | 1,505 | Adjustment Expenses, | ||||||||||||||||||||||||||||||||||||||||||
2015 | 430 | 893 | 1,154 | 1,310 | Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||
2016 | 421 | 873 | 1,118 | |||||||||||||||||||||||||||||||||||||||||||||
2017 | 433 | 890 | 2009 - | Before | ||||||||||||||||||||||||||||||||||||||||||||
2018 | 440 | 2018 | 2009 | |||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 13,020 | $ | 10,763 | $ | 5,276 | ||||||||||||||||||||||||||||||||||||||||||
Total net liability | $ | 16,039 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | ||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | ||||||||||||||||||||
17.4 | % | 19.5 | % | 11.2 | % | 7.3 | % | 5.3 | % | 3.8 | % | 3.0 | % | 2.2 | % | 2.0 | % | 1.7 | % |
(dollars in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||
2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | ||||||||||||||||||||||||||||||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||||||
Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | IBNR Reserves December 31, 2018 | Cumulative Number of Reported Claims | |||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 592 | $ | 624 | $ | 665 | $ | 686 | $ | 680 | $ | 660 | $ | 655 | $ | 641 | $ | 631 | $ | 626 | $ | 11 | 6,297 | ||||||||||||||||||||||||
2010 | 571 | 612 | 679 | 679 | 661 | 668 | 653 | 653 | 657 | 18 | 5,673 | ||||||||||||||||||||||||||||||||||||
2011 | 565 | 596 | 639 | 632 | 601 | 545 | 520 | 508 | (12 | ) | 5,212 | ||||||||||||||||||||||||||||||||||||
2012 | 538 | 591 | 614 | 605 | 601 | 599 | 605 | 97 | 4,853 | ||||||||||||||||||||||||||||||||||||||
2013 | 510 | 565 | 606 | 630 | 654 | 607 | 103 | 4,442 | |||||||||||||||||||||||||||||||||||||||
2014 | 549 | 571 | 563 | 518 | 473 | 67 | 4,335 | ||||||||||||||||||||||||||||||||||||||||
2015 | 528 | 524 | 486 | 437 | 92 | 4,155 | |||||||||||||||||||||||||||||||||||||||||
2016 | 512 | 511 | 504 | 153 | 4,235 | ||||||||||||||||||||||||||||||||||||||||||
2017 | 534 | 517 | 266 | 4,128 | |||||||||||||||||||||||||||||||||||||||||||
2018 | 530 | 406 | 2,894 | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 5,464 |
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 36 | $ | 167 | $ | 310 | $ | 390 | $ | 460 | $ | 497 | $ | 563 | $ | 592 | $ | 595 | $ | 597 | ||||||||||||||||||||||||||||
2010 | 33 | 152 | 291 | 396 | 482 | 565 | 597 | 623 | 631 | |||||||||||||||||||||||||||||||||||||||
2011 | 33 | 143 | 249 | 324 | 414 | 447 | 476 | 490 | ||||||||||||||||||||||||||||||||||||||||
2012 | 38 | 160 | 255 | 342 | 383 | 419 | 436 | Liability for Claims | ||||||||||||||||||||||||||||||||||||||||
2013 | 34 | 154 | 252 | 352 | 400 | 434 | And Allocated Claim | |||||||||||||||||||||||||||||||||||||||||
2014 | 38 | 150 | 239 | 312 | 367 | Adjustment Expenses, | ||||||||||||||||||||||||||||||||||||||||||
2015 | 38 | 141 | 234 | 310 | Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||
2016 | 30 | 141 | 233 | |||||||||||||||||||||||||||||||||||||||||||||
2017 | 38 | 155 | 2009 - | Before | ||||||||||||||||||||||||||||||||||||||||||||
2018 | 49 | 2018 | 2009 | |||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 3,702 | $ | 1,762 | $ | 71 | ||||||||||||||||||||||||||||||||||||||||||
Total net liability | $ | 1,833 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | ||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | ||||||||||||||||||||
6.8 | % | 21.4 | % | 19.4 | % | 15.3 | % | 11.4 | % | 7.3 | % | 6.0 | % | 3.7 | % | 0.9 | % | 0.2 | % |
(dollars in millions) | |||||||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | IBNR Reserves December 31, 2018 | Cumulative | |||||||||||||||||||||
Incurred Claims and Allocated Claims Adjustment | Number of | ||||||||||||||||||||||||||
Expenses, Net of Reinsurance | Reported | ||||||||||||||||||||||||||
Accident Year | Unaudited | Claims | |||||||||||||||||||||||||
2014 | $ | 223 | $ | 212 | $ | 165 | $ | 136 | $ | 130 | $ | (4 | ) | 1,069 | |||||||||||||
2015 | 217 | 191 | 179 | 145 | 38 | 827 | |||||||||||||||||||||
2016 | 226 | 239 | 205 | 12 | 866 | ||||||||||||||||||||||
2017 | 244 | 271 | 64 | 863 | |||||||||||||||||||||||
2018 | 220 | 121 | 595 | ||||||||||||||||||||||||
Total | $ | 971 |
Cumulative Paid Claims and Allocated Claim | ||||||||||||||||||||||||||||
Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||
Accident Year | Unaudited | Liability for Claims | ||||||||||||||||||||||||||
And Allocated Claim | ||||||||||||||||||||||||||||
2014 | $ | 58 | $ | 96 | $ | 111 | $ | 127 | $ | 124 | Adjustment Expenses, | |||||||||||||||||
2015 | 32 | 75 | 87 | 86 | Net of Reinsurance | |||||||||||||||||||||||
2016 | 54 | 121 | 142 | |||||||||||||||||||||||||
2017 | 70 | 166 | 2014 - | Before | ||||||||||||||||||||||||
2018 | 64 | 2018 | 2014 | |||||||||||||||||||||||||
Total | $ | 582 | $ | 389 | $ | 30 | ||||||||||||||||||||||
Total net liability | $ | 419 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | |||||||||||||||
Unaudited | |||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | ||||||||||
29.5 | % | 31.8 | % | 9.9 | % | 6.1 | % | (2.7 | )% |
(dollars in millions) | |||||||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | IBNR Reserves December 31, 2018 | Cumulative | |||||||||||||||||||||
Incurred Claims and Allocated Claims Adjustment | Number of | ||||||||||||||||||||||||||
Expenses, Net of Reinsurance | Reported | ||||||||||||||||||||||||||
Accident Year | Unaudited | Claims | |||||||||||||||||||||||||
2014 | $ | 2,014 | $ | 1,994 | $ | 1,981 | $ | 1,985 | $ | 1,980 | $ | 14 | 670,431 | ||||||||||||||
2015 | 2,186 | 2,244 | 2,236 | 2,222 | 35 | 757,837 | |||||||||||||||||||||
2016 | 2,779 | 2,791 | 2,772 | 126 | 921,479 | ||||||||||||||||||||||
2017 | 3,323 | 3,256 | 341 | 1,059,610 | |||||||||||||||||||||||
2018 | 3,281 | 825 | 960,293 | ||||||||||||||||||||||||
Total | $ | 13,511 |
Cumulative Paid Claims and Allocated Claim | ||||||||||||||||||||||||||||
Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||
Accident Year | Unaudited | Liability for Claims | ||||||||||||||||||||||||||
And Allocated Claim | ||||||||||||||||||||||||||||
2014 | $ | 1,193 | $ | 1,564 | $ | 1,763 | $ | 1,879 | $ | 1,936 | Adjustment Expenses, | |||||||||||||||||
2015 | 1,319 | 1,768 | 1,985 | 2,109 | Net of Reinsurance | |||||||||||||||||||||||
2016 | 1,610 | 2,203 | 2,466 | |||||||||||||||||||||||||
2017 | 1,912 | 2,575 | 2014 - | Before | ||||||||||||||||||||||||
2018 | 1,889 | 2018 | 2014 | |||||||||||||||||||||||||
Total | $ | 10,975 | $ | 2,536 | $ | 240 | ||||||||||||||||||||||
Total net liability | $ | 2,776 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | |||||||||||||||
Unaudited | |||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | ||||||||||
58.8 | % | 20.2 | % | 9.8 | % | 5.7 | % | 2.9 | % |
(dollars in millions) | |||||||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | IBNR Reserves December 31, 2018 | Cumulative | |||||||||||||||||||||
Incurred Claims and Allocated Claims Adjustment | Number of | ||||||||||||||||||||||||||
Expenses, Net of Reinsurance | Reported | ||||||||||||||||||||||||||
Accident Year | Unaudited | Claims | |||||||||||||||||||||||||
2014 | $ | 1,515 | $ | 1,450 | $ | 1,453 | $ | 1,457 | $ | 1,451 | $ | 7 | 151,705 | ||||||||||||||
2015 | 1,438 | 1,454 | 1,461 | 1,452 | 10 | 145,088 | |||||||||||||||||||||
2016 | 1,556 | 1,547 | 1,525 | 27 | 143,797 | ||||||||||||||||||||||
2017 | 2,312 | 2,340 | 101 | 168,357 | |||||||||||||||||||||||
2018 | 2,610 | 568 | 165,780 | ||||||||||||||||||||||||
Total | $ | 9,378 |
Cumulative Paid Claims and Allocated Claim | ||||||||||||||||||||||||||||
Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||
Accident Year | Unaudited | Liability for Claims | ||||||||||||||||||||||||||
And Allocated Claim | ||||||||||||||||||||||||||||
2014 | $ | 1,053 | $ | 1,338 | $ | 1,402 | $ | 1,425 | $ | 1,433 | Adjustment Expenses, | |||||||||||||||||
2015 | 994 | 1,333 | 1,395 | 1,421 | Net of Reinsurance | |||||||||||||||||||||||
2016 | 1,049 | 1,392 | 1,455 | |||||||||||||||||||||||||
2017 | 1,471 | 2,059 | 2014 - | Before | ||||||||||||||||||||||||
2018 | 1,657 | 2018 | 2014 | |||||||||||||||||||||||||
Total | $ | 8,025 | $ | 1,353 | $ | 23 | ||||||||||||||||||||||
Total net liability | $ | 1,376 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | |||||||||||||||
Unaudited | |||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | ||||||||||
67.2 | % | 22.7 | % | 4.3 | % | 1.7 | % | 0.5 | % |
(dollars in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
For the Years Ended December 31, | IBNR Reserves December 31, 2018 | Cumulative | |||||||||||||||||||||||||||||||||||||||||||||
2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | Number of | |||||||||||||||||||||||||||||||||||||
Accident | Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | Reported | |||||||||||||||||||||||||||||||||||||||||||||
Year | Unaudited | Claims | |||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 454 | $ | 442 | $ | 450 | $ | 456 | $ | 464 | $ | 456 | $ | 449 | $ | 449 | $ | 442 | $ | 440 | $ | — | 55,162 | ||||||||||||||||||||||||
2010 | 463 | 464 | 475 | 488 | 477 | 469 | 465 | 459 | 457 | 5 | 54,919 | ||||||||||||||||||||||||||||||||||||
2011 | 436 | 416 | 424 | 420 | 412 | 406 | 401 | 396 | 4 | 55,783 | |||||||||||||||||||||||||||||||||||||
2012 | 413 | 393 | 394 | 378 | 377 | 361 | 355 | 12 | 51,226 | ||||||||||||||||||||||||||||||||||||||
2013 | 461 | 455 | 446 | 435 | 422 | 421 | 14 | 54,231 | |||||||||||||||||||||||||||||||||||||||
2014 | 408 | 422 | 423 | 412 | 405 | (3 | ) | 52,291 | |||||||||||||||||||||||||||||||||||||||
2015 | 343 | 342 | 342 | 339 | 16 | 45,201 | |||||||||||||||||||||||||||||||||||||||||
2016 | 343 | 389 | 389 | 32 | 45,728 | ||||||||||||||||||||||||||||||||||||||||||
2017 | 329 | 362 | 26 | 46,545 | |||||||||||||||||||||||||||||||||||||||||||
2018 | 418 | 89 | 46,883 | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 3,982 |
Accident | Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||||||
Year | Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 189 | $ | 283 | $ | 323 | $ | 350 | $ | 379 | $ | 403 | $ | 419 | $ | 430 | $ | 433 | $ | 434 | ||||||||||||||||||||||||||||
2010 | 182 | 278 | 313 | 351 | 380 | 409 | 425 | 437 | 442 | |||||||||||||||||||||||||||||||||||||||
2011 | 167 | 237 | 266 | 299 | 332 | 353 | 370 | 378 | ||||||||||||||||||||||||||||||||||||||||
2012 | 157 | 219 | 249 | 274 | 300 | 317 | 325 | Liability for Claims | ||||||||||||||||||||||||||||||||||||||||
2013 | 184 | 258 | 289 | 320 | 351 | 368 | And Allocated Claim | |||||||||||||||||||||||||||||||||||||||||
2014 | 180 | 252 | 287 | 314 | 344 | Adjustment Expenses, | ||||||||||||||||||||||||||||||||||||||||||
2015 | 154 | 215 | 241 | 269 | Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||
2016 | 201 | 269 | 294 | |||||||||||||||||||||||||||||||||||||||||||||
2017 | 173 | 244 | 2009 - | Before | ||||||||||||||||||||||||||||||||||||||||||||
2018 | 208 | 2018 | 2009 | |||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 3,306 | $ | 676 | $ | 34 | ||||||||||||||||||||||||||||||||||||||||||
Total net liability | $ | 710 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | ||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | ||||||||||||||||||||
45.2 | % | 18.7 | % | 7.8 | % | 7.4 | % | 7.3 | % | 5.2 | % | 3.5 | % | 2.2 | % | 1.0 | % | 0.2 | % |
(at December 31, 2018, in mllions) | Net Undiscounted Claims and Claim Adjustment Expense Reserves | Discount (Net of Reinsurance) | Subtotal: Net Claims and Claim Adjustment Expense Reserves | Reinsurance Recoverables on Unpaid Losses (4) | Claims and Claim Adjustment Expense Reserves | |||||||||||||||
Business Insurance | ||||||||||||||||||||
General liability | $ | 7,159 | $ | (174 | ) | $ | 6,985 | $ | 854 | $ | 7,839 | |||||||||
Commercial property | 973 | — | 973 | 429 | 1,402 | |||||||||||||||
Commercial multi-peril | 3,535 | — | 3,535 | 181 | 3,716 | |||||||||||||||
Commercial automobile | 2,861 | — | 2,861 | 226 | 3,087 | |||||||||||||||
Workers’ compensation (1) | 16,039 | (909 | ) | 15,130 | 698 | 15,828 | ||||||||||||||
Bond & Specialty Insurance | ||||||||||||||||||||
General liability | 1,833 | — | 1,833 | 152 | 1,985 | |||||||||||||||
Fidelity and surety | 419 | — | 419 | 7 | 426 | |||||||||||||||
Personal Insurance | ||||||||||||||||||||
Automobile | 2,776 | — | 2,776 | 480 | 3,256 | |||||||||||||||
Homeowners (excluding Other) | 1,376 | — | 1,376 | 3 | 1,379 | |||||||||||||||
International - Canada | 710 | — | 710 | 26 | 736 | |||||||||||||||
Subtotal — claims and allocated claim adjustment expenses for the products presented in the development tables below | 37,681 | (1,083 | ) | 36,598 | 3,056 | 39,654 | ||||||||||||||
Other insurance contracts (2) | 3,762 | (5 | ) | 3,757 | 2,116 | 5,873 | ||||||||||||||
Unallocated loss adjustment expense reserves | 2,053 | — | 2,053 | 37 | 2,090 | |||||||||||||||
Structured settlements (3) | — | — | — | 2,990 | 2,990 | |||||||||||||||
Other | 63 | — | 63 | (17 | ) | 46 | ||||||||||||||
Total property-casualty | 43,559 | (1,088 | ) | 42,471 | 8,182 | 50,653 | ||||||||||||||
Accident and health | — | — | — | 15 | 15 | |||||||||||||||
Total | $ | 43,559 | $ | (1,088 | ) | $ | 42,471 | $ | 8,197 | $ | 50,668 |
(1) | Net discount amount includes discount of $70 million on reinsurance recoverables for long-term disability and annuity claim payments. |
(2) | Primarily includes residual market, international (other than operations in Canada within the Personal Insurance segment) and runoff assumed reinsurance business. |
(3) | Includes structured settlements in cases where the Company did not receive a release from the claimant. |
(4) | Total reinsurance recoverables (on paid and unpaid losses) at December 31, 2018 were $8.37 billion. |
(dollars in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||
2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | ||||||||||||||||||||||||||||||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||||||
Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | IBNR Reserves Dec 31, 2018 | Cumulative Number of Reported Claims | |||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 1,060 | $ | 1,071 | $ | 1,028 | $ | 960 | $ | 869 | $ | 837 | $ | 809 | $ | 796 | $ | 783 | $ | 775 | $ | 56 | 25,702 | ||||||||||||||||||||||||
2010 | 1,028 | 1,031 | 1,021 | 959 | 927 | 912 | 918 | 908 | 911 | 79 | 27,911 | ||||||||||||||||||||||||||||||||||||
2011 | 1,004 | 1,074 | 1,065 | 998 | 972 | 935 | 913 | 908 | 80 | 27,444 | |||||||||||||||||||||||||||||||||||||
2012 | 989 | 985 | 935 | 913 | 892 | 905 | 917 | 98 | 24,801 | ||||||||||||||||||||||||||||||||||||||
2013 | 965 | 975 | 958 | 940 | 927 | 933 | 101 | 22,446 | |||||||||||||||||||||||||||||||||||||||
2014 | 976 | 989 | 983 | 948 | 956 | 177 | 22,108 | ||||||||||||||||||||||||||||||||||||||||
2015 | 998 | 956 | 923 | 967 | 222 | 21,033 | |||||||||||||||||||||||||||||||||||||||||
2016 | 1,075 | 1,058 | 1,087 | 439 | 19,190 | ||||||||||||||||||||||||||||||||||||||||||
2017 | 1,133 | 1,143 | 717 | 16,464 | |||||||||||||||||||||||||||||||||||||||||||
2018 | 1,253 | 1,080 | 13,107 | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 9,850 |
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 35 | $ | 167 | $ | 314 | $ | 446 | $ | 543 | $ | 613 | $ | 643 | $ | 667 | $ | 689 | $ | 701 | ||||||||||||||||||||||||||||
2010 | 35 | 139 | 324 | 487 | 629 | 702 | 756 | 781 | 800 | |||||||||||||||||||||||||||||||||||||||
2011 | 47 | 187 | 355 | 539 | 660 | 725 | 762 | 799 | ||||||||||||||||||||||||||||||||||||||||
2012 | 32 | 150 | 295 | 489 | 589 | 699 | 754 | Liability for Claims | ||||||||||||||||||||||||||||||||||||||||
2013 | 35 | 175 | 363 | 498 | 639 | 745 | And Allocated Claim | |||||||||||||||||||||||||||||||||||||||||
2014 | 37 | 163 | 321 | 515 | 640 | Adjustment Expenses, | ||||||||||||||||||||||||||||||||||||||||||
2015 | 36 | 137 | 336 | 558 | Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||
2016 | 35 | 191 | 421 | |||||||||||||||||||||||||||||||||||||||||||||
2017 | 40 | 180 | 2009 - | Before | ||||||||||||||||||||||||||||||||||||||||||||
2018 | 42 | 2018 | 2009 | |||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 5,640 | $ | 4,210 | $ | 2,949 | ||||||||||||||||||||||||||||||||||||||||||
Total net liability | $ | 7,159 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | ||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | ||||||||||||||||||||
3.8 | % | 13.6 | % | 19.0 | % | 19.1 | % | 13.4 | % | 9.5 | % | 5.0 | % | 3.2 | % | 2.5 | % | 1.5 | % |
(dollars in millions) | |||||||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | |||||||||||||||||||||||
Incurred Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance | |||||||||||||||||||||||||||
Unaudited | |||||||||||||||||||||||||||
Accident Year | IBNR Reserves December 31, 2018 | Cumulative Number of Reported Claims | |||||||||||||||||||||||||
2014 | $ | 936 | $ | 860 | $ | 836 | $ | 835 | $ | 834 | $ | 6 | 21,568 | ||||||||||||||
2015 | 786 | 750 | 741 | 731 | 6 | 20,143 | |||||||||||||||||||||
2016 | 896 | 863 | 820 | 22 | 22,267 | ||||||||||||||||||||||
2017 | 1,209 | 1,177 | 30 | 24,855 | |||||||||||||||||||||||
2018 | 1,093 | 73 | 21,547 | ||||||||||||||||||||||||
Total | $ | 4,655 |
Cumulative Paid Claims and Allocated Claim | ||||||||||||||||||||||||||||
Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||
Liability for Claims | ||||||||||||||||||||||||||||
Accident Year | And Allocated Claim | |||||||||||||||||||||||||||
2014 | $ | 464 | $ | 710 | $ | 775 | $ | 803 | $ | 817 | Adjustment Expenses, | |||||||||||||||||
2015 | 376 | 615 | 681 | 699 | Net of Reinsurance | |||||||||||||||||||||||
2016 | 441 | 685 | 745 | |||||||||||||||||||||||||
2017 | 618 | 1,003 | 2014 - | Before | ||||||||||||||||||||||||
2018 | 561 | 2018 | 2014 | |||||||||||||||||||||||||
Total | $ | 3,825 | $ | 830 | $ | 143 | ||||||||||||||||||||||
Total net liability | $ | 973 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | |||||||||||||||
Unaudited | |||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | ||||||||||
52.9 | % | 31.2 | % | 8.0 | % | 2.9 | % | 1.7 | % |
(dollars in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||
2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | ||||||||||||||||||||||||||||||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||||||
Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | IBNR Reserves December 31, 2018 | Cumulative Number of Reported Claims | |||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 1,484 | $ | 1,506 | $ | 1,501 | $ | 1,498 | $ | 1,511 | $ | 1,514 | $ | 1,514 | $ | 1,509 | $ | 1,500 | $ | 1,493 | $ | 21 | 103,448 | ||||||||||||||||||||||||
2010 | 1,711 | 1,826 | 1,832 | 1,861 | 1,895 | 1,892 | 1,898 | 1,885 | 1,881 | 32 | 111,931 | ||||||||||||||||||||||||||||||||||||
2011 | 2,235 | 2,244 | 2,269 | 2,286 | 2,296 | 2,287 | 2,283 | 2,279 | 38 | 125,743 | |||||||||||||||||||||||||||||||||||||
2012 | 1,885 | 1,883 | 1,903 | 1,888 | 1,888 | 1,867 | 1,859 | 42 | 104,800 | ||||||||||||||||||||||||||||||||||||||
2013 | 1,615 | 1,623 | 1,620 | 1,609 | 1,591 | 1,600 | 51 | 83,667 | |||||||||||||||||||||||||||||||||||||||
2014 | 1,663 | 1,627 | 1,625 | 1,617 | 1,626 | 72 | 78,097 | ||||||||||||||||||||||||||||||||||||||||
2015 | 1,568 | 1,625 | 1,593 | 1,597 | 110 | 71,242 | |||||||||||||||||||||||||||||||||||||||||
2016 | 1,662 | 1,623 | 1,598 | 204 | 68,024 | ||||||||||||||||||||||||||||||||||||||||||
2017 | 1,872 | 1,928 | 357 | 69,218 | |||||||||||||||||||||||||||||||||||||||||||
2018 | 1,976 | 605 | 58,784 | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 17,837 |
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 603 | $ | 958 | $ | 1,121 | $ | 1,264 | $ | 1,360 | $ | 1,408 | $ | 1,436 | $ | 1,449 | $ | 1,457 | $ | 1,466 | ||||||||||||||||||||||||||||
2010 | 709 | 1,180 | 1,395 | 1,579 | 1,698 | 1,763 | 1,798 | 1,819 | 1,834 | |||||||||||||||||||||||||||||||||||||||
2011 | 1,060 | 1,573 | 1,803 | 1,979 | 2,088 | 2,156 | 2,193 | 2,222 | ||||||||||||||||||||||||||||||||||||||||
2012 | 795 | 1,246 | 1,424 | 1,590 | 1,699 | 1,752 | 1,780 | Liability for Claims | ||||||||||||||||||||||||||||||||||||||||
2013 | 644 | 987 | 1,167 | 1,304 | 1,410 | 1,475 | And Allocated Claim | |||||||||||||||||||||||||||||||||||||||||
2014 | 628 | 956 | 1,154 | 1,328 | 1,448 | Adjustment Expenses, | ||||||||||||||||||||||||||||||||||||||||||
2015 | 595 | 970 | 1,144 | 1,310 | Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||
2016 | 585 | 950 | 1,133 | |||||||||||||||||||||||||||||||||||||||||||||
2017 | 716 | 1,199 | 2009 - | Before | ||||||||||||||||||||||||||||||||||||||||||||
2018 | 792 | 2018 | 2009 | |||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 14,659 | $ | 3,178 | $ | 357 | ||||||||||||||||||||||||||||||||||||||||||
Total net liability | $ | 3,535 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | ||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | ||||||||||||||||||||
39.7 | % | 23.2 | % | 11.0 | % | 9.4 | % | 6.2 | % | 3.3 | % | 1.7 | % | 1.1 | % | 0.7 | % | 0.6 | % |
(dollars in millions) | |||||||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | |||||||||||||||||||||||
Incurred Claims and Allocated Claims Adjustment | |||||||||||||||||||||||||||
Expenses, Net of Reinsurance | |||||||||||||||||||||||||||
Unaudited | |||||||||||||||||||||||||||
Accident Year | IBNR Reserves December 31, 2018 | Cumulative Number of Reported Claims | |||||||||||||||||||||||||
2014 | $ | 1,156 | $ | 1,153 | $ | 1,155 | $ | 1,171 | $ | 1,193 | $ | 36 | 177,493 | ||||||||||||||
2015 | 1,188 | 1,202 | 1,234 | 1,283 | 83 | 173,333 | |||||||||||||||||||||
2016 | 1,278 | 1,303 | 1,371 | 191 | 182,647 | ||||||||||||||||||||||
2017 | 1,386 | 1,501 | 401 | 190,126 | |||||||||||||||||||||||
2018 | 1,645 | 736 | 185,419 | ||||||||||||||||||||||||
Total | $ | 6,993 |
Cumulative Paid Claims and Allocated Claim | ||||||||||||||||||||||||||||
Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||
Liability for Claims | ||||||||||||||||||||||||||||
Accident Year | And Allocated Claim | |||||||||||||||||||||||||||
2014 | $ | 394 | $ | 611 | $ | 812 | $ | 977 | $ | 1,089 | Adjustment Expenses, | |||||||||||||||||
2015 | 405 | 650 | 885 | 1,058 | Net of Reinsurance | |||||||||||||||||||||||
2016 | 412 | 688 | 931 | |||||||||||||||||||||||||
2017 | 456 | 746 | 2014 - | Before | ||||||||||||||||||||||||
2018 | 515 | 2018 | 2014 | |||||||||||||||||||||||||
Total | $ | 4,339 | $ | 2,654 | $ | 207 | ||||||||||||||||||||||
Total net liability | $ | 2,861 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | |||||||||||||||
Unaudited | |||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | ||||||||||
31.3 | % | 19.2 | % | 17.6 | % | 13.7 | % | 9.3 | % |
(dollars in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||
2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | ||||||||||||||||||||||||||||||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||||||
Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | IBNR Reserves December 31, 2018 | Cumulative Number of Reported Claims | |||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 1,799 | $ | 1,778 | $ | 1,746 | $ | 1,753 | $ | 1,753 | $ | 1,766 | $ | 1,775 | $ | 1,750 | $ | 1,736 | $ | 1,728 | $ | 221 | 104,789 | ||||||||||||||||||||||||
2010 | 1,886 | 2,042 | 2,035 | 2,056 | 2,049 | 2,052 | 2,055 | 2,021 | 2,003 | 271 | 117,368 | ||||||||||||||||||||||||||||||||||||
2011 | 2,284 | 2,303 | 2,347 | 2,350 | 2,379 | 2,385 | 2,363 | 2,348 | 356 | 136,728 | |||||||||||||||||||||||||||||||||||||
2012 | 2,447 | 2,456 | 2,457 | 2,456 | 2,445 | 2,453 | 2,416 | 404 | 137,922 | ||||||||||||||||||||||||||||||||||||||
2013 | 2,553 | 2,545 | 2,540 | 2,506 | 2,463 | 2,423 | 473 | 132,424 | |||||||||||||||||||||||||||||||||||||||
2014 | 2,554 | 2,553 | 2,547 | 2,476 | 2,430 | 563 | 124,507 | ||||||||||||||||||||||||||||||||||||||||
2015 | 2,644 | 2,585 | 2,505 | 2,441 | 751 | 122,388 | |||||||||||||||||||||||||||||||||||||||||
2016 | 2,768 | 2,690 | 2,569 | 863 | 122,493 | ||||||||||||||||||||||||||||||||||||||||||
2017 | 2,779 | 2,681 | 1,179 | 119,890 | |||||||||||||||||||||||||||||||||||||||||||
2018 | 2,744 | 1,738 | 109,002 | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 23,783 |
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 288 | $ | 623 | $ | 828 | $ | 961 | $ | 1,065 | $ | 1,137 | $ | 1,193 | $ | 1,235 | $ | 1,274 | $ | 1,303 | ||||||||||||||||||||||||||||
2010 | 341 | 750 | 978 | 1,133 | 1,246 | 1,321 | 1,385 | 1,430 | 1,465 | |||||||||||||||||||||||||||||||||||||||
2011 | 420 | 911 | 1,185 | 1,365 | 1,487 | 1,583 | 1,652 | 1,696 | ||||||||||||||||||||||||||||||||||||||||
2012 | 443 | 940 | 1,217 | 1,394 | 1,536 | 1,629 | 1,689 | Liability for Claims | ||||||||||||||||||||||||||||||||||||||||
2013 | 458 | 954 | 1,237 | 1,413 | 1,525 | 1,604 | And Allocated Claim | |||||||||||||||||||||||||||||||||||||||||
2014 | 455 | 944 | 1,224 | 1,399 | 1,505 | Adjustment Expenses, | ||||||||||||||||||||||||||||||||||||||||||
2015 | 430 | 893 | 1,154 | 1,310 | Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||
2016 | 421 | 873 | 1,118 | |||||||||||||||||||||||||||||||||||||||||||||
2017 | 433 | 890 | 2009 - | Before | ||||||||||||||||||||||||||||||||||||||||||||
2018 | 440 | 2018 | 2009 | |||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 13,020 | $ | 10,763 | $ | 5,276 | ||||||||||||||||||||||||||||||||||||||||||
Total net liability | $ | 16,039 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | ||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | ||||||||||||||||||||
17.4 | % | 19.5 | % | 11.2 | % | 7.3 | % | 5.3 | % | 3.8 | % | 3.0 | % | 2.2 | % | 2.0 | % | 1.7 | % |
(dollars in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||
2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | ||||||||||||||||||||||||||||||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||||||
Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | IBNR Reserves December 31, 2018 | Cumulative Number of Reported Claims | |||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 592 | $ | 624 | $ | 665 | $ | 686 | $ | 680 | $ | 660 | $ | 655 | $ | 641 | $ | 631 | $ | 626 | $ | 11 | 6,297 | ||||||||||||||||||||||||
2010 | 571 | 612 | 679 | 679 | 661 | 668 | 653 | 653 | 657 | 18 | 5,673 | ||||||||||||||||||||||||||||||||||||
2011 | 565 | 596 | 639 | 632 | 601 | 545 | 520 | 508 | (12 | ) | 5,212 | ||||||||||||||||||||||||||||||||||||
2012 | 538 | 591 | 614 | 605 | 601 | 599 | 605 | 97 | 4,853 | ||||||||||||||||||||||||||||||||||||||
2013 | 510 | 565 | 606 | 630 | 654 | 607 | 103 | 4,442 | |||||||||||||||||||||||||||||||||||||||
2014 | 549 | 571 | 563 | 518 | 473 | 67 | 4,335 | ||||||||||||||||||||||||||||||||||||||||
2015 | 528 | 524 | 486 | 437 | 92 | 4,155 | |||||||||||||||||||||||||||||||||||||||||
2016 | 512 | 511 | 504 | 153 | 4,235 | ||||||||||||||||||||||||||||||||||||||||||
2017 | 534 | 517 | 266 | 4,128 | |||||||||||||||||||||||||||||||||||||||||||
2018 | 530 | 406 | 2,894 | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 5,464 |
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 36 | $ | 167 | $ | 310 | $ | 390 | $ | 460 | $ | 497 | $ | 563 | $ | 592 | $ | 595 | $ | 597 | ||||||||||||||||||||||||||||
2010 | 33 | 152 | 291 | 396 | 482 | 565 | 597 | 623 | 631 | |||||||||||||||||||||||||||||||||||||||
2011 | 33 | 143 | 249 | 324 | 414 | 447 | 476 | 490 | ||||||||||||||||||||||||||||||||||||||||
2012 | 38 | 160 | 255 | 342 | 383 | 419 | 436 | Liability for Claims | ||||||||||||||||||||||||||||||||||||||||
2013 | 34 | 154 | 252 | 352 | 400 | 434 | And Allocated Claim | |||||||||||||||||||||||||||||||||||||||||
2014 | 38 | 150 | 239 | 312 | 367 | Adjustment Expenses, | ||||||||||||||||||||||||||||||||||||||||||
2015 | 38 | 141 | 234 | 310 | Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||
2016 | 30 | 141 | 233 | |||||||||||||||||||||||||||||||||||||||||||||
2017 | 38 | 155 | 2009 - | Before | ||||||||||||||||||||||||||||||||||||||||||||
2018 | 49 | 2018 | 2009 | |||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 3,702 | $ | 1,762 | $ | 71 | ||||||||||||||||||||||||||||||||||||||||||
Total net liability | $ | 1,833 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | ||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | ||||||||||||||||||||
6.8 | % | 21.4 | % | 19.4 | % | 15.3 | % | 11.4 | % | 7.3 | % | 6.0 | % | 3.7 | % | 0.9 | % | 0.2 | % |
(dollars in millions) | |||||||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | IBNR Reserves December 31, 2018 | Cumulative | |||||||||||||||||||||
Incurred Claims and Allocated Claims Adjustment | Number of | ||||||||||||||||||||||||||
Expenses, Net of Reinsurance | Reported | ||||||||||||||||||||||||||
Accident Year | Unaudited | Claims | |||||||||||||||||||||||||
2014 | $ | 223 | $ | 212 | $ | 165 | $ | 136 | $ | 130 | $ | (4 | ) | 1,069 | |||||||||||||
2015 | 217 | 191 | 179 | 145 | 38 | 827 | |||||||||||||||||||||
2016 | 226 | 239 | 205 | 12 | 866 | ||||||||||||||||||||||
2017 | 244 | 271 | 64 | 863 | |||||||||||||||||||||||
2018 | 220 | 121 | 595 | ||||||||||||||||||||||||
Total | $ | 971 |
Cumulative Paid Claims and Allocated Claim | ||||||||||||||||||||||||||||
Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||
Accident Year | Unaudited | Liability for Claims | ||||||||||||||||||||||||||
And Allocated Claim | ||||||||||||||||||||||||||||
2014 | $ | 58 | $ | 96 | $ | 111 | $ | 127 | $ | 124 | Adjustment Expenses, | |||||||||||||||||
2015 | 32 | 75 | 87 | 86 | Net of Reinsurance | |||||||||||||||||||||||
2016 | 54 | 121 | 142 | |||||||||||||||||||||||||
2017 | 70 | 166 | 2014 - | Before | ||||||||||||||||||||||||
2018 | 64 | 2018 | 2014 | |||||||||||||||||||||||||
Total | $ | 582 | $ | 389 | $ | 30 | ||||||||||||||||||||||
Total net liability | $ | 419 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | |||||||||||||||
Unaudited | |||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | ||||||||||
29.5 | % | 31.8 | % | 9.9 | % | 6.1 | % | (2.7 | )% |
(dollars in millions) | |||||||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | IBNR Reserves December 31, 2018 | Cumulative | |||||||||||||||||||||
Incurred Claims and Allocated Claims Adjustment | Number of | ||||||||||||||||||||||||||
Expenses, Net of Reinsurance | Reported | ||||||||||||||||||||||||||
Accident Year | Unaudited | Claims | |||||||||||||||||||||||||
2014 | $ | 2,014 | $ | 1,994 | $ | 1,981 | $ | 1,985 | $ | 1,980 | $ | 14 | 670,431 | ||||||||||||||
2015 | 2,186 | 2,244 | 2,236 | 2,222 | 35 | 757,837 | |||||||||||||||||||||
2016 | 2,779 | 2,791 | 2,772 | 126 | 921,479 | ||||||||||||||||||||||
2017 | 3,323 | 3,256 | 341 | 1,059,610 | |||||||||||||||||||||||
2018 | 3,281 | 825 | 960,293 | ||||||||||||||||||||||||
Total | $ | 13,511 |
Cumulative Paid Claims and Allocated Claim | ||||||||||||||||||||||||||||
Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||
Accident Year | Unaudited | Liability for Claims | ||||||||||||||||||||||||||
And Allocated Claim | ||||||||||||||||||||||||||||
2014 | $ | 1,193 | $ | 1,564 | $ | 1,763 | $ | 1,879 | $ | 1,936 | Adjustment Expenses, | |||||||||||||||||
2015 | 1,319 | 1,768 | 1,985 | 2,109 | Net of Reinsurance | |||||||||||||||||||||||
2016 | 1,610 | 2,203 | 2,466 | |||||||||||||||||||||||||
2017 | 1,912 | 2,575 | 2014 - | Before | ||||||||||||||||||||||||
2018 | 1,889 | 2018 | 2014 | |||||||||||||||||||||||||
Total | $ | 10,975 | $ | 2,536 | $ | 240 | ||||||||||||||||||||||
Total net liability | $ | 2,776 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | |||||||||||||||
Unaudited | |||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | ||||||||||
58.8 | % | 20.2 | % | 9.8 | % | 5.7 | % | 2.9 | % |
(dollars in millions) | |||||||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | IBNR Reserves December 31, 2018 | Cumulative | |||||||||||||||||||||
Incurred Claims and Allocated Claims Adjustment | Number of | ||||||||||||||||||||||||||
Expenses, Net of Reinsurance | Reported | ||||||||||||||||||||||||||
Accident Year | Unaudited | Claims | |||||||||||||||||||||||||
2014 | $ | 1,515 | $ | 1,450 | $ | 1,453 | $ | 1,457 | $ | 1,451 | $ | 7 | 151,705 | ||||||||||||||
2015 | 1,438 | 1,454 | 1,461 | 1,452 | 10 | 145,088 | |||||||||||||||||||||
2016 | 1,556 | 1,547 | 1,525 | 27 | 143,797 | ||||||||||||||||||||||
2017 | 2,312 | 2,340 | 101 | 168,357 | |||||||||||||||||||||||
2018 | 2,610 | 568 | 165,780 | ||||||||||||||||||||||||
Total | $ | 9,378 |
Cumulative Paid Claims and Allocated Claim | ||||||||||||||||||||||||||||
Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||
Accident Year | Unaudited | Liability for Claims | ||||||||||||||||||||||||||
And Allocated Claim | ||||||||||||||||||||||||||||
2014 | $ | 1,053 | $ | 1,338 | $ | 1,402 | $ | 1,425 | $ | 1,433 | Adjustment Expenses, | |||||||||||||||||
2015 | 994 | 1,333 | 1,395 | 1,421 | Net of Reinsurance | |||||||||||||||||||||||
2016 | 1,049 | 1,392 | 1,455 | |||||||||||||||||||||||||
2017 | 1,471 | 2,059 | 2014 - | Before | ||||||||||||||||||||||||
2018 | 1,657 | 2018 | 2014 | |||||||||||||||||||||||||
Total | $ | 8,025 | $ | 1,353 | $ | 23 | ||||||||||||||||||||||
Total net liability | $ | 1,376 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | |||||||||||||||
Unaudited | |||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | ||||||||||
67.2 | % | 22.7 | % | 4.3 | % | 1.7 | % | 0.5 | % |
(dollars in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
For the Years Ended December 31, | IBNR Reserves December 31, 2018 | Cumulative | |||||||||||||||||||||||||||||||||||||||||||||
2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | Number of | |||||||||||||||||||||||||||||||||||||
Accident | Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | Reported | |||||||||||||||||||||||||||||||||||||||||||||
Year | Unaudited | Claims | |||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 454 | $ | 442 | $ | 450 | $ | 456 | $ | 464 | $ | 456 | $ | 449 | $ | 449 | $ | 442 | $ | 440 | $ | — | 55,162 | ||||||||||||||||||||||||
2010 | 463 | 464 | 475 | 488 | 477 | 469 | 465 | 459 | 457 | 5 | 54,919 | ||||||||||||||||||||||||||||||||||||
2011 | 436 | 416 | 424 | 420 | 412 | 406 | 401 | 396 | 4 | 55,783 | |||||||||||||||||||||||||||||||||||||
2012 | 413 | 393 | 394 | 378 | 377 | 361 | 355 | 12 | 51,226 | ||||||||||||||||||||||||||||||||||||||
2013 | 461 | 455 | 446 | 435 | 422 | 421 | 14 | 54,231 | |||||||||||||||||||||||||||||||||||||||
2014 | 408 | 422 | 423 | 412 | 405 | (3 | ) | 52,291 | |||||||||||||||||||||||||||||||||||||||
2015 | 343 | 342 | 342 | 339 | 16 | 45,201 | |||||||||||||||||||||||||||||||||||||||||
2016 | 343 | 389 | 389 | 32 | 45,728 | ||||||||||||||||||||||||||||||||||||||||||
2017 | 329 | 362 | 26 | 46,545 | |||||||||||||||||||||||||||||||||||||||||||
2018 | 418 | 89 | 46,883 | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 3,982 |
Accident | Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||||||
Year | Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 189 | $ | 283 | $ | 323 | $ | 350 | $ | 379 | $ | 403 | $ | 419 | $ | 430 | $ | 433 | $ | 434 | ||||||||||||||||||||||||||||
2010 | 182 | 278 | 313 | 351 | 380 | 409 | 425 | 437 | 442 | |||||||||||||||||||||||||||||||||||||||
2011 | 167 | 237 | 266 | 299 | 332 | 353 | 370 | 378 | ||||||||||||||||||||||||||||||||||||||||
2012 | 157 | 219 | 249 | 274 | 300 | 317 | 325 | Liability for Claims | ||||||||||||||||||||||||||||||||||||||||
2013 | 184 | 258 | 289 | 320 | 351 | 368 | And Allocated Claim | |||||||||||||||||||||||||||||||||||||||||
2014 | 180 | 252 | 287 | 314 | 344 | Adjustment Expenses, | ||||||||||||||||||||||||||||||||||||||||||
2015 | 154 | 215 | 241 | 269 | Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||
2016 | 201 | 269 | 294 | |||||||||||||||||||||||||||||||||||||||||||||
2017 | 173 | 244 | 2009 - | Before | ||||||||||||||||||||||||||||||||||||||||||||
2018 | 208 | 2018 | 2009 | |||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 3,306 | $ | 676 | $ | 34 | ||||||||||||||||||||||||||||||||||||||||||
Total net liability | $ | 710 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | ||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | ||||||||||||||||||||
45.2 | % | 18.7 | % | 7.8 | % | 7.4 | % | 7.3 | % | 5.2 | % | 3.5 | % | 2.2 | % | 1.0 | % | 0.2 | % |
(in millions, except per share amounts) Quarterly Period Ending | Number of shares repurchased | Cost of shares repurchased | Average price paid per share | Remaining capacity under share repurchase authorization | |||||||||||
March 31, 2018 | 2.5 | $ | 350 | $ | 141.84 | $ | 4,206 | ||||||||
June 30, 2018 | 2.7 | 350 | 129.66 | 3,856 | |||||||||||
September 30, 2018 | 3.0 | 400 | 130.22 | 3,456 | |||||||||||
December 31, 2018 | 1.4 | 170 | 125.09 | 3,286 | |||||||||||
Total | 9.6 | $ | 1,270 | 132.33 | 3,286 |
(in millions) | 2018 | 2017 | ||||||
Balance at January 1 | $ | 6 | $ | 13 | ||||
Additions for tax positions of prior years | 25 | — | ||||||
Reductions for tax positions of prior years | — | (1 | ) | |||||
Reductions based on tax positions related to current year | — | (6 | ) | |||||
Balance at December 31 | $ | 31 | $ | 6 |
(in millions) | Amount | Year of expiration | ||||
United States | $ | 2 | 2035 - 2036 | |||
Brazil | $ | 19 | None | |||
Canada | $ | 1 | 2037 - 2038 | |||
United Kingdom | $ | 146 | None |
(at December 31, 2018, in millions) | Cost | Gross Gains | Gross Losses | Fair Value | ||||||||||||
Public common stock | $ | 338 | $ | 2 | $ | 24 | $ | 316 | ||||||||
Non-redeemable preferred stock | 44 | 8 | — | 52 | ||||||||||||
Total | $ | 382 | $ | 10 | $ | 24 | $ | 368 |
(at and for the year ended December 31, in millions) | 2018 | 2017 | 2016 | |||||||||
Changes in net unrealized investment gains | ||||||||||||
Fixed maturities | $ | (1,515 | ) | $ | 513 | $ | (915 | ) | ||||
Equity securities | — | (215 | ) | 51 | ||||||||
Other investments | (1 | ) | 4 | 2 | ||||||||
Change in net pre-tax unrealized gains on investment securities | (1,516 | ) | 302 | (862 | ) | |||||||
Related tax expense (benefit) | (319 | ) | 78 | (303 | ) | |||||||
Change in net unrealized gains on investment securities | (1,197 | ) | 224 | (559 | ) | |||||||
Cumulative effect of adoption of updated accounting guidance for equity financial instruments at January 1, 2018 | (22 | ) | — | — | ||||||||
Reclassification of certain tax effects from accumulated other comprehensive income at January 1, 2018 | 152 | — | — | |||||||||
Balance, beginning of year | 954 | 730 | 1,289 | |||||||||
Balance, end of year | $ | (113 | ) | $ | 954 | $ | 730 |