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Significant Accounting Policies (Tables)
 12 Months Ended
Dec. 31, 2018
Corporate Information And Statement Of IFRS Compliance [Abstract]  
Schedule of Significant Estimates and Judgments
Significant estimates and judgments have been made in the following areas and are discussed as noted:
Insurance contract and investment contract assumptions and measurement
 
Note 1 Insurance Contract Liabilities and Investment Contract Liabilities Note 10 Insurance Contract Liabilities and Investment Contract Liabilities
Determination of fair value
 
Note 1 Basis of Consolidation Note 1 Determination of Fair Value
Note 3 Acquisitions
Note 5 Total Invested Assets and Related Net Investment Income

Impairment of financial instruments
 
Note 1 Financial Assets Excluding Derivative Financial Instruments
Note 6 Financial Instrument Risk Management
Income taxes
 
Note 1 Income Taxes
Note 20 Income Taxes
Pension plans
 
Note 1 Pension Plans and Other Post-Retirement Benefits
Note 25 Pension Plans and Other Post-Retirement Benefits
Goodwill and intangible assets on acquisition and impairment

 
Note 1 Goodwill
Note 1 Intangible Assets
Note 3 Acquisitions
Note 9 Goodwill and Intangible Assets
Determination of control for purpose of consolidation
 
Note 1 Basis of Consolidation
Note 16 Interests in Other Entities
Share-based payments
 
Note 19 Share-Based Payments
Summary of Financial Assets
The following table summarizes the financial assets included in our Consolidated Statements of Financial Position and the asset classifications applicable to these assets:
Cash, cash equivalents and short-term securities
FVTPL
Debt securities
FVTPL and AFS
Equity securities
FVTPL and AFS
Mortgages and loans
Loans and receivables
Other invested assets
FVTPL and AFS
Policy loans
Loans and receivables
Cash, cash equivalents and short-term securities presented in our Consolidated Statements of Financial Position and Net cash, cash equivalents and short-term securities presented in our Consolidated Statements of Cash Flows consist of the following:
As at December 31,
2018
 
2017
 
Cash
 
$
2,089

 
$
1,504

Cash equivalents
 
5,209

 
4,592

Short-term securities
 
2,208

 
2,794

Cash, cash equivalents and short-term securities
 
9,506

 
8,890

Less: Bank overdraft, recorded in Other liabilities
 
104

 
140

Net cash, cash equivalents and short-term securities
 
$
9,402

 
$
8,750

The carrying values and fair values of our financial assets are shown in the following table:
As at
 
December 31, 2018
 
December 31, 2017
 
 
Carrying value

 
Fair value

 
Carrying value

 
Fair value

Assets
 
 
 
 
 
 
 
 
Cash, cash equivalents and short-term securities
 
$
9,506

 
$
9,506

 
$
8,890

 
$
8,890

Debt securities – fair value through profit or loss
 
61,402

 
61,402

 
59,967

 
59,967

Debt securities – available-for-sale
 
13,041

 
13,041

 
12,652

 
12,652

Equity securities – fair value through profit or loss
 
4,014

 
4,014

 
5,078

 
5,078

Equity securities – available-for-sale
 
620

 
620

 
942

 
942

Mortgages and loans
 
46,822

 
48,434

 
42,805

 
45,406

Derivative assets
 
1,112

 
1,112

 
1,478

 
1,478

Other invested assets – fair value through profit or loss(1)
 
2,701

 
2,701

 
2,211

 
2,211

Other invested assets – available-for-sale(1) 
 
621

 
621

 
562

 
562

Policy loans
 
3,222

 
3,222

 
3,106

 
3,106

Total financial assets(2)
 
$
143,061

 
$
144,673

 
$
137,691


$
140,292


(1) Other invested assets (FVTPL and AFS) include our investments in segregated funds, mutual funds, and limited partnerships.
(2) Invested assets on our Consolidated Statements of Financial Position of $151,726 ($146,139 as at December 31, 2017) includes Total financial assets in this table, Investment properties of $7,157 ($7,067 as at December 31, 2017), and Other invested assets – non-financial assets of $1,508 ($1,381 as at December 31, 2017).

The following table provides a reconciliation of the beginning and ending balances for assets that are categorized in Level 3:
For the year ended
Debt securities – fair value through profit or loss 
 
Debt securities – available-for-sale
 
Equity securities – fair value through profit or loss
 
Equity securities – available-for-sale
 
Other invested assets
 
Investment properties
 
Total invested assets measured at fair value
 
Investments for account of segregated fund holders
 
Total assets measured at fair value
 
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
$
417

 
$
136

 
$
167

 
$
38

 
$
1,721

 
$
7,067

 
$
9,546

 
$
1,154

 
$
10,700

Included in net income(1)(3)(5)          
 
(4
)
 
—

 
9

 
—

 
69

 
441

 
515

 
29

 
544

Included in OCI(3)
 
—

 
(5
)
 
—

 
(8
)
 
(9
)
 
—

 
(22
)
 
—

 
(22
)
Purchases
 
164

 
140

 
19

 
4

 
644

 
621

 
1,592

 
430

 
2,022

Sales
 
(49
)
 
(6
)
 
—

 
(1
)
 
(227
)
 
(1,113
)
 
(1,396
)
 
(31
)
 
(1,427
)
Settlements
 
(21
)
 
(4
)
 
—

 
(1
)
 
—

 
—

 
(26
)
 
(1
)
 
(27
)
Transfers into Level 3(2)
 
12

 
1

 
—

 
1

 
—

 
—

 
14

 
4

 
18

Transfers (out) of Level 3(2)
 
(159
)
 
(221
)
 
—

 
—

 
—

 
—

 
(380
)
 
(5
)
 
(385
)
Foreign currency translation(4) 
 
13

 
2

 
7

 
3

 
43

 
141

 
209

 
16

 
225

Ending balance
 
$
373


$
43


$
202

 
$
36


$
2,241


$
7,157


$
10,052


$
1,596

 
$
11,648

Gains (losses) included in earnings relating to instruments still held at the reporting date(1)
 
$
5

 
$
—

 
$
9

 
$
—

 
$
69

 
$
331

 
$
414

 
$
27

 
$
441

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
$
442

 
$
191

 
$
144

 
$
7

 
$
1,544

 
$
6,592

 
$
8,920

 
$
865

 
$
9,785

Included in net income(1)(3)(5)          
 
(3
)
 
(1
)
 
7

 
—

 
(59
)
 
158

 
102

 
60

 
162

Included in OCI(3)
 
—

 
—

 
—

 
—

 
18

 
—

 
18

 
—

 
18

Purchases
 
180

 
215

 
34

 
32

 
505

 
448

 
1,414

 
302

 
1,716

Sales
 
(41
)
 
(2
)
 
(7
)
 
—

 
(318
)
 
(277
)
 
(645
)
 
(77
)
 
(722
)
Settlements
 
(66
)
 
(5
)
 
(7
)
 
—

 
—

 
—

 
(78
)
 
(1
)
 
(79
)
Transfers into Level 3(2)(6)
 
204

 
—

 
—

 
—

 
49

 
259

 
512

 
—

 
512

Transfers (out) of Level 3(2)
 
(284
)
 
(262
)
 
—

 
—

 
—

 
—

 
(546
)
 
—

 
(546
)
Foreign currency translation(4) 
(15
)
 
—

 
(4
)
 
(1
)
 
(18
)
 
(113
)
 
(151
)
 
5

 
(146
)
Ending balance
 
$
417


$
136


$
167


$
38


$
1,721


$
7,067


$
9,546


$
1,154


$
10,700

Gains (losses) included in earnings relating to instruments still held at the reporting date(1)
 
$
—

 
$
—

 
$
8

 
$
—

 
$
(59
)
 
$
147

 
$
96

 
$
27

 
$
123

(1) Included in Net investment income (loss) for Total invested assets measured at fair value in our Consolidated Statements of Operations.
(2) Transfers into Level 3 occur when the inputs used to price the assets and liabilities lack observable market data, and as a result, no longer meet the Level 1 or 2 definitions at the reporting date. Transfers out of Level 3 occur when the pricing inputs become more transparent and satisfy the Level 1 or 2 criteria and are primarily the result of observable market data being available at the reporting date, thus removing the requirement to rely on inputs that lack observability.
(3) Total gains and losses in net income (loss) and OCI are calculated assuming transfers into or out of Level 3 occur at the beginning of the period. For an asset or liability that transfers into Level 3 during the reporting period, the entire change in fair value for the period is included in the table above. For transfers out of Level 3 during the reporting period, the change in fair value for the period is excluded from the table above.
(4) Foreign currency translation relates to the foreign exchange impact of translating Level 3 assets and liabilities of foreign subsidiaries from their functional currencies to Canadian dollars.
(5) Investment properties included in net income is comprised of fair value changes on investment properties of $529 ($211 in 2017) net of amortization of leasing commissions and tenant inducements of $88 ($53 in 2017).
(6) Transfers into Level 3 in Investment properties includes the reclassification of our former head office location in 2017, previously classified as owner-occupied with a fair value of $259 at the time of transfer from Other assets to Investment properties. The reclassification recognized a revaluation surplus of $172, which was recorded as an increase of $139 of accumulated other comprehensive income, net of taxes of $33.

The carrying value of debt securities by geographic location is shown in the following table. The geographic location is based on the country of the creditor's parent.
As at December 31,
2018
2017
 
Fair value through profit or loss
 
Available-for- sale
 
Total debt securities
 
Fair value through profit or loss
 
Available-for- sale
 
Total debt securities
 
Canada
 
$
25,091

 
$
4,217

 
$
29,308

 
$
24,132

 
$
4,114

 
$
28,246

United States
 
21,329

 
5,917

 
27,246

 
20,758

 
5,719

 
26,477

United Kingdom
 
5,092

 
565

 
5,657

 
5,319

 
590

 
5,909

Other
 
9,890

 
2,342

 
12,232

 
9,758

 
2,229

 
11,987

Balance
 
$
61,402

 
$
13,041

 
$
74,443

 
$
59,967


$
12,652


$
72,619


The carrying value of debt securities by issuer and industry sector is shown in the following table:
As at December 31,
2018
2017
 
Fair value through profit or loss
 
Available-for-sale
 
Total debt securities
 
Fair value through profit or loss
 
Available-for-sale
 
Total debt securities
 
Debt securities issued or guaranteed by:
 
 
 
 
 
 
 
 
 
 
 
 
Canadian federal government
 
$
3,830

 
$
1,746

 
$
5,576

 
$
3,366

 
$
1,832

 
$
5,198

Canadian provincial and municipal government
 
11,866

 
1,199

 
13,065

 
12,158

 
1,138

 
13,296

U.S. government and agency
 
1,380

 
1,527

 
2,907

 
1,231

 
818

 
2,049

Other foreign government
 
4,929

 
717

 
5,646

 
5,361

 
752

 
6,113

Total government issued or guaranteed debt securities
 
22,005

 
5,189

 
27,194

 
22,116

 
4,540

 
26,656

Corporate debt securities by industry sector(1):
 
 
 
 
 
 
 
 
 
 
 
 
Financials
 
8,390

 
1,470

 
9,860

 
7,856

 
1,705

 
9,561

Utilities
 
6,353

 
528

 
6,881

 
6,756

 
550

 
7,306

Industrials
 
4,053

 
590

 
4,643

 
4,090

 
707

 
4,797

Energy
 
3,628

 
340

 
3,968

 
3,657

 
455

 
4,112

Communication services(2)
 
2,826

 
481

 
3,307

 
2,826

 
545

 
3,371

Real estate
 
2,640

 
376

 
3,016

 
2,213

 
366

 
2,579

Health care
 
1,734

 
299

 
2,033

 
1,256

 
323

 
1,579

Consumer staples
 
1,625

 
257

 
1,882

 
1,920

 
351

 
2,271

Consumer discretionary(2)
 
1,372

 
209

 
1,581

 
1,329

 
363

 
1,692

Materials
 
1,225

 
256

 
1,481

 
1,211

 
262

 
1,473

Information technology(2)
 
1,024

 
207

 
1,231

 
1,056

 
267

 
1,323

Total corporate debt securities
 
34,870

 
5,013

 
39,883

 
34,170

 
5,894

 
40,064

Asset-backed securities
 
4,527

 
2,839

 
7,366

 
3,681

 
2,218

 
5,899

Total debt securities
 
$
61,402

 
$
13,041

 
$
74,443

 
$
59,967

 
$
12,652

 
$
72,619


(1) Balances in 2017 have been changed to conform with current year presentation.
(2) Our grouping of debt securities by sector is based on the Global Industry Classification Standard and S&P Dow Jones Indices. During 2018, certain
Consumer discretionary and Information technology debt securities were moved to the Communication services sector.

The contractual maturities of debt securities are shown in the following table. Actual maturities could differ from contractual maturities because of the borrower's right to call or extend or right to prepay obligations, with or without prepayment penalties.
As at December 31,
2018
2017
 
Fair value through profit or loss
 
Available-for- sale
 
Total debt securities
 
Fair value through profit or loss
 
Available-for- sale
 
Total debt securities
 
Due in 1 year or less
 
$
2,189

 
$
1,175

 
$
3,364

 
$
1,432

 
$
1,053

 
$
2,485

Due in years 2-5
 
9,307

 
4,865

 
14,172

 
7,903

 
3,465

 
11,368

Due in years 6-10
 
10,080

 
2,580

 
12,660

 
10,148

 
3,177

 
13,325

Due after 10 years
 
39,826

 
4,421

 
44,247

 
40,484

 
4,957

 
45,441

Total debt securities
 
$
61,402

 
$
13,041

 
$
74,443

 
$
59,967

 
$
12,652

 
$
72,619


The carrying value of mortgages by scheduled maturity, before allowances for losses, is as follows:
As at December 31,
2018
 
2017
 
Due in 1 year or less
 
$
968

 
$
931

Due in years 2-5
 
5,118

 
4,829

Due in years 6-10
 
7,351

 
6,963

Due after 10 years
 
3,021

 
2,792

Total mortgages
 
$
16,458

 
$
15,515


The carrying value of loans by scheduled maturity, before allowances for losses, is as follows:
As at December 31,
2018
 
2017
 
Due in 1 year or less
 
$
1,425

 
$
1,806

Due in years 2-5
 
6,968

 
6,350

Due in years 6-10
 
5,183

 
4,968

Due after 10 years
 
16,863

 
14,216

Total loans
 
$
30,439

 
$
27,340

The carrying value of mortgages and loans by geographic location and type is shown in the following tables. The geographic location for mortgages is based on location of property, while for corporate loans it is based on the country of the creditor's parent.
As at December 31, 2018
Canada
 
United States
 
 
United Kingdom

 
Other

 
Total

Mortgages
 
 
 
 
 
 
 
 
 
 
  Retail
 
$
1,921

 
$
2,281

 
$
—

 
$
—

 
$
4,202

  Office
 
1,811

 
2,417

 
—

 
—

 
4,228

  Multi-family residential
 
3,455

 
1,920

 
—

 
—

 
5,375

  Industrial and land
 
752

 
1,154

 
—

 
—

 
1,906

  Other
 
618

 
104

 
—

 
—

 
722

Total mortgages(1)
 
$
8,557

 
$
7,876

 
$
—

 
$
—

 
$
16,433

Loans
 
$
13,238

 
$
11,458

 
$
2,547

 
$
3,146

 
$
30,389

Total mortgages and loans
$
21,795

 
$
19,334

 
$
2,547

 
$
3,146

 
$
46,822


(1) $3,537 of mortgages in Canada are insured by the CMHC.
As at December 31, 2017
Canada
 
United States
 
 
United Kingdom

 
Other

 
Total

Mortgages
 
 
 
 
 
 
 
 
 
 
  Retail
 
$
2,027

 
$
2,264

 
$
—

 
$
—

 
$
4,291

  Office
 
1,898

 
2,363

 
—

 
—

 
4,261

  Multi-family residential
 
3,214

 
1,368

 
—

 
—

 
4,582

  Industrial and land
 
670

 
990

 
—

 
—

 
1,660

  Other
 
581

 
118

 
—

 
—

 
699

Total mortgages(1)
 
$
8,390

 
$
7,103

 
$
—

 
$
—

 
$
15,493

Loans
 
$
13,265

 
$
9,542

 
$
1,678

 
$
2,827

 
$
27,312

Total mortgages and loans
$
21,655

 
$
16,645

 
$
1,678

 
$
2,827

 
$
42,805


(1) $3,171 of mortgages in Canada are insured by the CMHC.