Cigna Group
For the period ended Dec 31, 2023. Filed Feb 29, 2024.
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FY2023 · Filed Feb 29, 2024
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Accumulated Other Comprehensive Income (Loss)
Note 16 – Accumulated Other Comprehensive Income (Loss)
AOCI includes net unrealized (depreciation) appreciation on securities and derivatives, change in discount rate and instrument specific credit risk for certain long-duration insurance contractholder liabilities (Note 10 to the Consolidated Financial Statements), foreign currency translation and the net postretirement benefits liability adjustment. AOCI includes the Company's share from unconsolidated entities reported on the equity method. Generally, tax effects in AOCI are established at the currently enacted tax rate and reclassified to Shareholders' net income in the same period that the related pre-tax AOCI reclassifications are recognized.
Shareholders' other comprehensive (loss), net of tax, for the years ended 2023, 2022 and 2021, is primarily driven by the change in discount rates for certain long-duration liabilities, unrealized changes in the market values of securities and derivatives and changes in postretirement benefits liabilities, including the impacts from unconsolidated entities reported on the equity method.
Changes in the components of AOCI, including the restatement for amended accounting guidance for long-duration insurance contracts (discussed in Note 2 to the Consolidated Financial Statements), are as follows:
| For the Years Ended December 31, | ||||
|---|---|---|---|---|
| (In millions) · 2023 · 2022 · 2021 | ||||
| Securities and Derivatives | ||||
| Beginning balance, as previously disclosed | $900 | |||
| Cumulative effect of accounting for Long-duration Insurance Contracts guidance (ASU 2018-12) | 668 | |||
| Beginning balance, as retrospectively restated | $(332) | $1,266 | 1,568 | |
| Unrealized appreciation (depreciation) on securities and derivatives | 620 | (2,274) | (335) | |
| Tax (expense) benefit | (146) | 467 | 52 | |
| Net unrealized appreciation (depreciation) on securities and derivatives | 474 | (1,807) | (283) | |
| Reclassification adjustment for losses included in Shareholders' net income ((Loss) gain on sale of businesses) | — | 172 | — | |
| Reclassification adjustment for losses (gains) included in Shareholders' net income (Net realized investment (losses) gains) | 38 | 47 | (24) | |
| Reclassification adjustment for (gains) included in Shareholders' net income (Selling, general and administrative expenses) | (1) | — | — | |
| Reclassification adjustment for tax (benefit) expense included in Shareholders' net income | (8) | (10) | 5 | |
| Net losses (gains) reclassified from AOCI to Shareholders' net income | 29 | 209 | (19) | |
| Other comprehensive income (loss), net of tax | 503 | (1,598) | (302) | |
| Ending balance | $171 | $(332) | $1,266 | |
| For the Years Ended December 31, | ||||
|---|---|---|---|---|
| (In millions) · 2023 · 2022 · 2021 | ||||
| Net long-duration insurance and contractholder liabilities measurement adjustments (1) | ||||
| Beginning balance, as previously disclosed | $— | |||
| Cumulative effect of accounting for Long-duration Insurance Contracts guidance (ASU 2018-12) | (832) | |||
| Beginning balance, as retrospectively restated | $(256) | $(765) | (832) | |
| Current period change in discount rate for certain long-duration liabilities | (913) | 642 | 59 | |
| Tax benefit (expense) | 222 | (122) | (3) | |
| Net current period change in discount rate for certain long-duration liabilities | (691) | 520 | 56 | |
| Current period change in instrument-specific credit risk for market risk benefits | (29) | (14) | 13 | |
| Tax benefit (expense) | 5 | 3 | (2) | |
| Net current period change in instrument-specific credit risk for market risk benefits | (24) | (11) | 11 | |
| Other comprehensive (loss) income, net of tax | (715) | 509 | 67 | |
| Ending balance | $(971) | $(256) | $(765) | |
(1)Established upon the adoption of Targeted Improvements to the Accounting for Long-Duration Contracts in 2023. See Note 2 to the Consolidated Financial Statements for further information.
| For the Years Ended December 31, | |||
|---|---|---|---|
| (In millions) | 2023 | 2022 | 2021 |
| Translation of foreign currencies | |||
| Beginning balance, as retrospectively restated | $(154) | $(233) | $(15) |
| Translation of foreign currencies | — | (277) | (213) |
| Tax benefit (expense) | 5 | (33) | (19) |
| Net translation of foreign currencies | 5 | (310) | (232) |
| Reclassification adjustment for losses included in Net income ((Loss) gain on sale of businesses) | — | 358 | — |
| Reclassification adjustment for tax expense included in Net income | — | 29 | — |
| Net translation losses reclassified from AOCI to Net income | — | 387 | — |
| Translation of foreign currencies | — | 81 | (213) |
| Tax benefit (expense) | 5 | (4) | (19) |
| Other comprehensive income (loss), net of tax | 5 | 77 | (232) |
| Less: Net translation (loss) on foreign currencies attributable to noncontrolling interests | — | (2) | (14) |
| Shareholders' other comprehensive income (loss), net of tax | 5 | 79 | (218) |
| Ending balance | $(149) | $(154) | $(233) |
| For the Years Ended December 31, | |||
|---|---|---|---|
| (In millions) | 2023 | 2022 | 2021 |
| Postretirement benefits liability | |||
| Beginning balance | $(916) | $(1,336) | $(1,746) |
| Reclassification adjustment for amortization of net prior actuarial losses and prior service costs (Interest expense and other) | 46 | 65 | 85 |
| Reclassification adjustment for (gains) included in Shareholders' net income ((Loss) gain on sale of businesses) | — | (1) | — |
| Reclassification adjustment for settlement (Interest expense and other) | — | — | 4 |
| Reclassification adjustment for tax (benefit) included in Shareholders' net income | (11) | (16) | (21) |
| Net adjustments reclassified from AOCI to Shareholders' net income | 35 | 48 | 68 |
| Valuation update | (46) | 487 | 448 |
| Tax benefit (expense) | 12 | (115) | (106) |
| Net change due to valuation update | (34) | 372 | 342 |
| Other comprehensive income, net of tax | 1 | 420 | 410 |
| Ending balance | $(915) | $(916) | $(1,336) |
| For the Years Ended December 31, | ||||
|---|---|---|---|---|
| (In millions) · 2023 · 2022 · 2021 | ||||
| Total Accumulated other comprehensive loss | ||||
| Beginning balance, as previously disclosed | $(861) | |||
| Cumulative effect of accounting for Long-duration Insurance Contracts guidance (ASU 2018-12) | (164) | |||
| Beginning balance, as retrospectively restated | $(1,658) | $(1,068) | (1,025) | |
| Shareholders' other comprehensive (loss), net of tax | (206) | (590) | (43) | |
| Ending balance | $(1,864) | $(1,658) | $(1,068) | |
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