Reserve for Future Policy Benefits and SA Liabilities Level 1 (Notes)

9 Months Ended

Sep. 30, 2017

Separate Accounts Disclosure [Abstract]

Liability for Future Policy Benefits and Unpaid Claims Disclosure [Text Block]

Property and Casualty Insurance Products

Roll-forward of Liabilities for Unpaid Losses and Loss Adjustment Expenses



	For the nine months ended September 30,
	2017		2016
Beginning liabilities for unpaid losses and loss adjustment expenses, gross	$	21,833	$	21,825
Reinsurance and other recoverables	2,776		2,882
Beginning liabilities for unpaid losses and loss adjustment expenses, net	19,057		18,943
Add: Maxum acquisition	—		122
Provision for unpaid losses and loss adjustment expenses
Current accident year	5,587		5,215
Prior accident year development	1		409
Total provision for unpaid losses and loss adjustment expenses	5,588		5,624
Less: payments
Current accident year	1,770		1,901
Prior accident years	3,143		3,380
Total payments	4,913		5,281
Less: net reserves transferred to liabilities held for sale	—		487
Ending liabilities for unpaid losses and loss adjustment expenses, net	19,732		18,921
Reinsurance and other recoverables [1]	2,817		2,694
Ending liabilities for unpaid losses and loss adjustment expenses, gross	$	22,549	$	21,615


[1]	Includes reinsurance recoverables of $2,355 and $2,313 for the nine months ended September 30, 2017 and 2016, respectively.

(Favorable) Unfavorable Prior Accident Year Development



	For the nine months ended September 30,
	2017			2016
Workers’ compensation	$	(29	)	$	(87	)
Workers’ compensation discount accretion	21			21
General liability	10			67
Package business	(22		)	50
Commercial property	(5		)	2
Professional liability	—			(35		)
Bond	10			(6		)
Automobile liability - Commercial Lines	20			19
Automobile liability - Personal Lines	—			140
Homeowners	—			(4		)
Net asbestos reserves	—			197
Net environmental reserves	—			71
Catastrophes	(12		)	(7		)
Uncollectible reinsurance	—			(30		)
Other reserve re-estimates, net	8			11
Total prior accident year development	$	1		$	409

Re-estimates of prior accident year reserves for the nine months ended September 30, 2017

Workers’ compensation reserves were reduced, primarily in Small Commercial, given the continued emergence of favorable frequency for accident years 2013 to 2015. Management has placed additional weight on this favorable experience as it becomes more credible.

General liability reserves were increased for the 2013 to 2016 accident years on a class of business that insures service and maintenance contractors. This increase was partially offset by a decrease in recent accident year reserves for other Middle Market general liability reserves.

Package reserves were reduced for accident years 2013 and prior largely due to reducing the Company’s estimate of allocated loss adjustment expenses incurred to settle the claims.

Bond business reserves increased for customs bonds written between 2000 and 2010 which was partly offset by a reduction in reserves for recent accident years as reported losses for commercial and contract surety have emerged favorably.

Automobile liability reserves within Commercial Lines were increased in Small Commercial and large national accounts for the 2013 to 2016 accident years, driven by higher frequency of more severe accidents, including litigated claims.

Catastrophes reserves were reduced primarily due to lower estimates of 2016 wind and hail event losses and a decrease in losses on a 2015 wildfire.

Re-estimates of prior accident year reserves for the nine months ended September 30, 2016

Workers' compensation reserves consider favorable emergence on reported losses for recent accident years as well as a partially offsetting adverse impact related to two recent Florida Supreme Court rulings that have increased the Company's exposure to workers' compensation claims in that state. The favorable emergence has been driven by lower frequency and, to a lesser extent, lower medical severity and management has placed additional weight on this favorable experience as it becomes more credible.

General liability reserves increased for accident years 2012 through 2015 primarily due to higher severity losses incurred on a class of business that insures service and maintenance contractors and, in second quarter 2016, increased reserves in general liability for accident years 2008 and 2010 primarily due to indemnity losses and legal costs associated with a litigated claim.

Small Commercial package business reserves increased due to higher than expected severity on liability claims, principally for accident years 2013 through 2015. Severity for these accident years has developed unfavorably and management has placed more weight on emerged experience.

Professional liability reserves decreased for claims made years 2008 through 2013, primarily for large accounts, including on non-securities class action cases. Claim costs have emerged favorably as these years have matured and management has placed more weight on the emerged experience.

Automobile liability reserves increased in commercial lines, predominantly for the 2015 accident year, primarily due to increased frequency of large claims. Automobile liability reserves also increased in personal lines, primarily related to increased bodily injury frequency and severity for the 2015 accident year, including for uninsured and under-insured motorist claims, and increased bodily injury severity for the 2014 accident year. Increases in auto liability loss costs were across both the direct and agency distribution channels.

Asbestos and environmental reserves increased during the period as a result of the 2016 comprehensive annual review. For a discussion of the Company's 2016 review of asbestos and environmental reserves, see Part II, Item 7 MD&A, Critical Accounting Estimates, Property & Casualty Other Operations section in the Company’s 2016 Form 10-K Annual Report.

Uncollectible reinsurance reserves decreased as a result of giving greater weight to favorable collectibility experience in recent calendar periods in estimating future collections.

Group Life, Disability and Accident Products

Roll-forward of Liabilities for Unpaid Losses and Loss Adjustment Expenses



	For the nine months ended September 30,
	2017			2016 [1]
Beginning liabilities for unpaid losses and loss adjustment expenses, gross	$	5,772		$	5,889
Reinsurance recoverables	208			218
Beginning liabilities for unpaid losses and loss adjustment expenses, net	5,564			5,671
Provision for unpaid losses and loss adjustment expenses
Current incurral year	1,960			1,930
Prior year's discount accretion	148			155
Prior incurral year development [2]	(162		)	(126		)
Total provision for unpaid losses and loss adjustment expenses [3]	1,946			1,959
Less: payments
Current incurral year	917			932
Prior incurral years	1,118			1,126
Total payments	2,035			2,058
Ending liabilities for unpaid losses and loss adjustment expenses, net	5,475			5,572
Reinsurance recoverables	208			211
Ending liabilities for unpaid losses and loss adjustment expenses, gross	$	5,683		$	5,783


[1]	Certain prior year amounts have been reclassified to conform to the current year presentation for unpaid losses and loss adjustment expenses.


[2]	Prior incurral year development represents the change in estimated ultimate incurred losses and loss adjustment expenses for prior incurral years on a discounted basis.


[3]	Includes unallocated loss adjustment expenses of $74, and $76 for the nine months ended September 30, 2017 and 2016, respectively, that are recorded in insurance operating costs and other expenses in the Condensed Consolidated Statements of Operations.

Re-estimates of prior incurral years reserves for the nine months ended September 30, 2017

Group Disability- Prior period reserve estimates decreased by approximately $105 largely driven by group long-term disability claim recoveries and deaths higher than prior reserve assumptions. This favorability was partially reduced by lower expectation of future benefit offsets, particularly lower Social Security Disability Income approval rates and longer decision turnaround times in the Social Security Administration.

Group Life and Accident (including Group Life Premium Waiver)- Prior period reserve estimates decreased by approximately $55 largely driven by lower than previously expected claim incidence in Group Life and Group Life Premium Waiver.

Re-estimates of prior incurral years reserves for the nine months ended September 30, 2016

Group Disability- Prior period reserve estimates decreased by approximately $85 largely driven by group long-term disability claim recoveries higher than prior reserve assumptions. This favorability was partially offset by lower Social Security Disability Income approvals driven by lower approval rates and ongoing backlogs in the Social Security Administration.

Group Life and Accident (including Group Life Premium Waiver)- Prior period reserve estimates decreased by approximately $30 largely driven by lower than previously expected incidence on Group Life Premium Waiver.



Changes in Reserves for Future Policy Benefits
	Universal Life - Type Contracts
	GMDB/GMWB [1]			Universal Life Secondary Guarantees		Traditional Annuity and Other Contracts [2]			Total Future Policy Benefits
Liability balance as of January 1, 2017	$	786		$	2,627	$	10,516		$	13,929
Incurred [3]	57			231		582			870
Paid	(76		)	—		(603		)	(679		)
Change in unrealized investment gains and losses	—			—		127			127
Liability balance as of September 30, 2017	$	767		$	2,858	$	10,622		$	14,247
Reinsurance recoverable asset, as of January 1, 2017	$	432		$	2,627	$	1,392		$	4,451
Incurred [3]	37			231		60			328
Paid	(63		)	—		(44		)	(107		)
Reinsurance recoverable asset, as of September 30, 2017	$	406		$	2,858	$	1,408		$	4,672



	Universal Life - Type Contracts
	GMDB/GMWB [1]			Universal Life Secondary Guarantees		Traditional Annuity and Other Contracts [2]			Total Future Policy Benefits
Liability balance as of January 1, 2016	$	863		$	2,313	$	10,683		$	13,859
Incurred [3]	50			234		575			859
Paid	(92		)	—		(604		)	(696		)
Change in unrealized investment gains and losses	—			—		433			433
Liability balance as of September 30, 2016	$	821		$	2,547	$	11,087		$	14,455
Reinsurance recoverable asset, as of January 1, 2016	$	523		$	2,313	$	1,478		$	4,314
Incurred [3]	40			234		(14		)	260
Paid	(73		)	—		(48		)	(121		)
Reinsurance recoverable asset, as of September 30, 2016	$	490		$	2,547	$	1,416		$	4,453


[1]	These liability balances include all GMDB benefits, plus the life-contingent portion of GMWB benefits in excess of the return of the GRB. GMWB benefits that make up a shortfall between the account value and the GRB are embedded derivatives held at fair value and are excluded from these balances.


[2]	Represents life-contingent reserves for which the company is subject to insurance and investment risk.


[3]	Includes the portion of assessments established as additions to reserves as well as changes in estimates affecting the reserves.



Account Value by GMDB/GMWB Type as of September 30, 2017
	Account Value (“AV”) [8]		Net Amount at Risk (“NAR”) [9]		Retained Net Amount at Risk (“RNAR”) [9]		Weighted Average Attained Age of Annuitant
Maximum anniversary value (“MAV”) [1]
MAV only	$	13,674	$	2,047	$	305	71
With 5% rollup [2]	1,149		143		45		72
With Earnings Protection Benefit Rider (“EPB”) [3]	3,482		522		80		71
With 5% rollup & EPB	476		105		23		73
Total MAV	18,781		2,817		453
Asset Protection Benefit (“APB”) [4]	10,175		102		70		70
Lifetime Income Benefit (“LIB”) — Death Benefit [5]	454		4		4		70
Reset [6] (5-7 years)	2,445		6		5		70
Return of Premium (“ROP”) [7]/Other	8,852		55		52		71
Subtotal Variable Annuity with GMDB/GMWB [10]	40,707		$	2,984	$	584	71
Less: General Account Value with GMDB/GMWB	3,665
Subtotal Separate Account Liabilities with GMDB	37,042
Separate Account Liabilities without GMDB	78,584
Total Separate Account Liabilities	$	115,626


[1]	MAV GMDB is the greatest of current AV, net premiums paid and the highest AV on any anniversary before age 80 years (adjusted for withdrawals).


[2]	Rollup GMDB is the greatest of the MAV, current AV, net premium paid and premiums (adjusted for withdrawals) accumulated at generally 5% simple interest up to the earlier of age 80 years or 100% of adjusted premiums.


[3]	EPB GMDB is the greatest of the MAV, current AV, or contract value plus a percentage of the contract’s growth. The contract’s growth is AV less premiums net of withdrawals, subject to a cap of 200% of premiums net of withdrawals.


[4]	APB GMDB is the greater of current AV or MAV, not to exceed current AV plus 25% times the greater of net premiums and MAV (each adjusted for premiums in the past 12 months).


[5]	LIB GMDB is the greatest of current AV; net premiums paid; or, for certain contracts, a benefit amount generally based on market performance that ratchets over time.


[6]	Reset GMDB is the greatest of current AV, net premiums paid and the most recent five to seven year anniversary AV before age 80 years (adjusted for withdrawals).


[7]	ROP GMDB is the greater of current AV or net premiums paid.


[8]	AV includes the contract holder’s investment in the separate account and the general account.


[9]	NAR is defined as the guaranteed minimum death benefit in excess of the current AV. RNAR represents NAR reduced for reinsurance. NAR and RNAR are highly sensitive to equity markets movements and increase when equity markets decline.

[10] Some variable annuity contracts with GMDB also have a life-contingent GMWB that may provide for benefits in excess of the return of the GRB. Such contracts included in this amount have $6.3 billion of total account value and weighted average attained age of 73 years. There is no NAR or retained NAR related to these contracts. Includes $1.7 billion of account value for contracts that had a GMDB at issue but no longer have a GMDB due to certain elections made by policyholders or their beneficiaries.



Account Balance Breakdown of Variable Separate Account Investments for Contracts with Guarantees
Asset type	As of September 30, 2017		As of December 31, 2016
Equity securities (including mutual funds)	$	34,267	$	33,880
Cash and cash equivalents	2,775		3,045
Total	$	37,042	$	36,925

As of September 30, 2017 and December 31, 2016, approximately 15% and 16%, respectively, of the equity securities (including mutual funds), in the preceding table were funds invested in fixed income securities and approximately 85% and 84%, respectively, were funds invested in equity securities.

For further information on guaranteed living benefits that are accounted for at fair value, such as GMWB, see Note 5 - Fair Value Measurements of Notes to Condensed Consolidated Financial Statements.