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Fair Value (Tables) | 12 Months Ended
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Dec. 31, 2019
Fair Value Disclosures [Abstract] |
Fair value of financial assets and liabilities | Financial assets measured at fair value on a recurring basis on the consolidated balance sheets at December 31, 2019 and 2018 were as follows:
In millions | Level 1 |  | Level 2 |  | Level 3 |  | Total
December 31, 2019 |  |  |  |  |  |  |
Cash and cash equivalents | $ | 3,397 |  |  | $ | 2,286 |  |  | $ | — |  |  | $ | 5,683 |
Debt securities: |  |  |  |  |  |  |  |  |  |  |
U.S. government securities | 1,785 |  |  | 67 |  |  | — |  |  | 1,852 |
States, municipalities and political subdivisions | — |  |  | 2,309 |  |  | — |  |  | 2,309 |
U.S. corporate securities | — |  |  | 7,700 |  |  | 37 |  |  | 7,737 |
Foreign securities | — |  |  | 2,348 |  |  | — |  |  | 2,348 |
Residential mortgage-backed securities | — |  |  | 533 |  |  | — |  |  | 533 |
Commercial mortgage-backed securities | — |  |  | 700 |  |  | — |  |  | 700 |
Other asset-backed securities | — |  |  | 1,405 |  |  | — |  |  | 1,405 |
Redeemable preferred securities | — |  |  | 26 |  |  | 12 |  |  | 38 |
Total debt securities | 1,785 |  |  | 15,088 |  |  | 49 |  |  | 16,922 |
Equity securities | 34 |  |  | — |  |  | 39 |  |  | 73 |
Total | $ | 5,216 |  |  | $ | 17,374 |  |  | $ | 88 |  |  | $ | 22,678 |
December 31, 2018 |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 2,619 |  |  | $ | 1,440 |  |  | $ | — |  |  | $ | 4,059 |
Debt securities: |  |  |  |  |  |  |
U.S. government securities | 1,597 |  |  | 91 |  |  | — |  |  | 1,688 |
States, municipalities and political subdivisions | — |  |  | 2,399 |  |  | — |  |  | 2,399 |
U.S. corporate securities | — |  |  | 6,422 |  |  | 67 |  |  | 6,489 |
Foreign securities | — |  |  | 2,380 |  |  | 3 |  |  | 2,383 |
Residential mortgage-backed securities | — |  |  | 577 |  |  | — |  |  | 577 |
Commercial mortgage-backed securities | — |  |  | 605 |  |  | — |  |  | 605 |
Other asset-backed securities | — |  |  | 1,085 |  |  | — |  |  | 1,085 |
Redeemable preferred securities | — |  |  | 22 |  |  | 7 |  |  | 29 |
Total debt securities | 1,597 |  |  | 13,581 |  |  | 77 |  |  | 15,255 |
Equity securities | 19 |  |  | — |  |  | 54 |  |  | 73 |
Total | $ | 4,235 |  |  | $ | 15,021 |  |  | $ | 131 |  |  | $ | 19,387 |
Changes in level 3 financial assets | The changes in the balances of Level 3 financial assets during 2019 were as follows:
In millions | Foreign securities |  | U.S. corporate securities |  | Equity securities |  | Redeemable preferred securities |  | Total
Beginning balance | $ | 3 |  |  | $ | 67 |  |  | $ | 54 |  |  | $ | 7 |  |  | $ | 131 |
Net realized and unrealized capital gains (losses): |  |  |  |  |  |  |  |  |
Included in earnings | — |  |  | (33 | ) |  | 13 |  |  | — |  |  | (20 | )
Included in other comprehensive income | — |  |  | 18 |  |  | — |  |  | 5 |  |  | 23 |
Purchases | 2 |  |  | 3 |  |  | 13 |  |  | — |  |  | 18 |
Sales | — |  |  | (6 | ) |  | (41 | ) |  | — |  |  | (47 | )
Settlements | (1 | ) |  | (12 | ) |  | — |  |  | — |  |  | (13 | )
Transfers out of Level 3, net | (4 | ) |  | — |  |  | — |  |  | — |  |  | (4 | )
Ending balance | $ | — |  |  | $ | 37 |  |  | $ | 39 |  |  | $ | 12 |  |  | $ | 88 |
The total gross transfers into (out of) Level 3 during the year ended December 31, 2019 were as follows:
In millions |
Gross transfers into Level 3 | $ | — |
Gross transfers out of Level 3 | (4 | )
Net transfers out of Level 3 | $ | (4 | )
Carrying value and estimated fair value of certain financial instruments | The carrying value and estimated fair value classified by level of fair value hierarchy for financial instruments carried on the consolidated balance sheets at adjusted cost or contract value at December 31, 2019 and 2018 were as follows:
| Carrying Value |  | Estimated Fair Value
In millions |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
December 31, 2019 |  |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |  |
Mortgage loans | $ | 1,213 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,239 |  |  | $ | 1,239 |
Equity securities (1) | 149 |  |  | N/A |  |  | N/A |  |  | N/A |  |  | N/A |
Liabilities: |  |  |  |  |  |  |  |  |
Investment contract liabilities: |  |  |  |  |  |  |  |  |
With a fixed maturity | 5 |  |  | — |  |  | — |  |  | 5 |  |  | 5 |
Without a fixed maturity | 372 |  |  | — |  |  | — |  |  | 392 |  |  | 392 |
Long-term debt | 68,480 |  |  | 74,306 |  |  | — |  |  | — |  |  | 74,306 |
| Carrying Value |  | Estimated Fair Value
In millions |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
December 31, 2018 |  |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |  |
Mortgage loans | $ | 1,361 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,366 |  |  | $ | 1,366 |
Equity securities (1) | 140 |  |  | N/A |  |  | N/A |  |  | N/A |  |  | N/A |
Liabilities: |  |  |  |  |  |  |  |  |
Investment contract liabilities: |  |  |  |  |  |  |  |  |
With a fixed maturity | 5 |  |  | — |  |  | — |  |  | 5 |  |  | 5 |
Without a fixed maturity | 382 |  |  | — |  |  | — |  |  | 357 |  |  | 357 |
Long-term debt | 72,709 |  |  | 71,252 |  |  | — |  |  | — |  |  | 71,252 |
_____________________________________________
(1) | It was not practical to estimate the fair value of these cost-method investments as it represents shares of unlisted companies. See Note 1 ‘‘Significant Accounting Policies’’ for additional information regarding the valuation of cost method investments.
Separate account financial assets | Separate Accounts financial assets at December 31, 2019 and 2018 were as follows:
| December 31, 2019 |  | December 31, 2018
In millions | Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Cash and cash equivalents | $ | 2 |  |  | $ | 143 |  |  | $ | — |  |  | $ | 145 |  |  | $ | 2 |  |  | $ | 189 |  |  | $ | — |  |  | $ | 191 |
Debt securities | 1,224 |  |  | 2,589 |  |  | — |  |  | 3,813 |  |  | 782 |  |  | 2,500 |  |  | 4 |  |  | 3,286 |
Equity securities | — |  |  | 2 |  |  | — |  |  | 2 |  |  | — |  |  | 3 |  |  | — |  |  | 3 |
Common/collective trusts | — |  |  | 499 |  |  | — |  |  | 499 |  |  | — |  |  | 404 |  |  | — |  |  | 404 |
Total | $ | 1,226 |  |  | $ | 3,233 |  |  | $ | — |  |  | $ | 4,459 |  |  | $ | 784 |  |  | $ | 3,096 |  |  | $ | 4 |  |  | $ | 3,884 |

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