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Fair Value (Tables) | 12 Months Ended
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Dec. 31, 2020
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, 2020 and 2019 were as follows:
In millions | Level 1 |  | Level 2 |  | Level 3 |  | Total
December 31, 2020 |  |  |  |  |  |  |
Cash and cash equivalents | $ | 4,210 |  |  | $ | 3,869 |  |  | $ | — |  |  | $ | 8,079 |
Debt securities: |  |  |  |  |  |  |
U.S. government securities | 2,370 |  |  | 99 |  |  | — |  |  | 2,469 |
States, municipalities and political subdivisions | — |  |  | 2,727 |  |  | 1 |  |  | 2,728 |
U.S. corporate securities | — |  |  | 8,842 |  |  | 52 |  |  | 8,894 |
Foreign securities | — |  |  | 2,918 |  |  | — |  |  | 2,918 |
Residential mortgage-backed securities | — |  |  | 705 |  |  | — |  |  | 705 |
Commercial mortgage-backed securities | — |  |  | 1,046 |  |  | — |  |  | 1,046 |
Other asset-backed securities | — |  |  | 2,403 |  |  | — |  |  | 2,403 |
Redeemable preferred securities | — |  |  | 24 |  |  | 1 |  |  | 25 |
Total debt securities | 2,370 |  |  | 18,764 |  |  | 54 |  |  | 21,188 |
Equity securities | 17 |  |  | — |  |  | 30 |  |  | 47 |
Total | $ | 6,597 |  |  | $ | 22,633 |  |  | $ | 84 |  |  | $ | 29,314 |
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 |
Changes in level 3 financial assets | The changes in the balances of Level 3 financial assets during the year ended December 31, 2020 were as follows:
In millions | States, municipalities and political subdivisions |  | U.S. corporate securities |  | Equity securities |  | Redeemable preferred securities |  | Total
Beginning balance | $ | — |  |  | $ | 37 |  |  | $ | 39 |  |  | $ | 12 |  |  | $ | 88 |
Net realized and unrealized capital gains (losses): |  |  |  |  |  |  |  |  |
Included in earnings | — |  |  | (11) |  |  | (3) |  |  | 18 |  |  | 4 |
Included in other comprehensive income | — |  |  | — |  |  | — |  |  | (5) |  |  | (5) |
Purchases | — |  |  | 27 |  |  | 3 |  |  | — |  |  | 30 |
Sales | — |  |  | — |  |  | (9) |  |  | (24) |  |  | (33) |
Settlements | — |  |  | (1) |  |  | — |  |  | — |  |  | (1) |
Transfers into Level 3, net | 1 |  |  | — |  |  | — |  |  | — |  |  | 1 |
Ending balance | $ | 1 |  |  | $ | 52 |  |  | $ | 30 |  |  | $ | 1 |  |  | $ | 84 |
The changes in the balances of Level 3 financial assets during the year ended December 31, 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 years ended December 31, 2020 and 2019 were as follows:
In millions | 2020 |  | 2019
Gross transfers into Level 3 | $ | 1 |  |  | $ | — |
Gross transfers out of Level 3 | — |  |  | (4) |
Net transfers out of Level 3 | $ | 1 |  |  | $ | (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, 2020 and 2019 were as follows:
| Carrying Value |  | Estimated Fair Value
In millions |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
December 31, 2020 |  |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |  |
Mortgage loans | $ | 1,047 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,070 |  |  | $ | 1,070 |
Equity securities (1) | 145 |  |  | N/A |  | N/A |  | N/A |  | N/A
Liabilities: |  |  |  |  |  |  |  |  |
Investment contract liabilities: |  |  |  |  |  |  |  |  |
With a fixed maturity | 5 |  |  | — |  |  | — |  |  | 5 |  |  | 5 |
Without a fixed maturity | 322 |  |  | — |  |  | — |  |  | 371 |  |  | 371 |
Long-term debt | 64,647 |  |  | 75,940 |  |  | — |  |  | — |  |  | 75,940 |
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 |
_____________________________________________ (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, 2020 and 2019 were as follows:
| December 31, 2020 |  | December 31, 2019
In millions | Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Cash and cash equivalents | $ | 2 |  |  | $ | 186 |  |  | $ | — |  |  | $ | 188 |  |  | $ | 2 |  |  | $ | 143 |  |  | $ | — |  |  | $ | 145 |
Debt securities | 1,465 |  |  | 2,634 |  |  | — |  |  | 4,099 |  |  | 1,224 |  |  | 2,589 |  |  | — |  |  | 3,813 |
Equity securities | — |  |  | 2 |  |  | — |  |  | 2 |  |  | — |  |  | 2 |  |  | — |  |  | 2 |
Common/collective trusts | — |  |  | 563 |  |  | — |  |  | 563 |  |  | — |  |  | 499 |  |  | — |  |  | 499 |
Total (1) | $ | 1,467 |  |  | $ | 3,385 |  |  | $ | — |  |  | $ | 4,852 |  |  | $ | 1,226 |  |  | $ | 3,233 |  |  | $ | — |  |  | $ | 4,459 |
_____________________________________________ (1)Excludes $29 million of other receivables at December 31, 2020.

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- Definition Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19279-110258 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 + Details
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