Deferred Policy Acquisition Costs, Deferred Sales Inducements and Value of Business Acquired

9 Months Ended

Sep. 30, 2024

Deferred Policy Acquisition Costs, Deferred Sales Inducements and Value of Business Acquired

14. Deferred Policy Acquisition Costs, Deferred Sales Inducements and Value of Business Acquired

The following tables present the balances and changes in DAC, DSI and VOBA by segment:


	Three Months Ended September 30, 2024
	Annuity		Life		Property and Casualty		Total
	(Dollars in millions)
DAC
Balance, beginning of period	$	406	$	271	$	140	$	817
Additions	242		26		106		374
Amortization	(8)		(10)		(99)		(117)
Net change	234		16		7		257
Balance, end of period	$	640	$	287	$	147	$	1,074

DSI
Balance, beginning of period	$	103	$	—	$	—	$	103
Additions	141		—		—		141
Amortization	(4)		—		—		(4)
Net change	137		—		—		137
Balance, end of period	$	240	$	—	$	—	$	240

VOBA
Balance, beginning of period	$	7,126	$	293	$	16	$	7,435
Measurement period adjustment (2)	45		—		—		45
Additions	—		—		—		—
Amortization	(162)		(9)		3		(168)
Other (1)	—		(250)		—		(250)
Net change	(117)		(259)		3		(373)
Balance, end of period	$	7,009	$	34	$	19	$	7,062
Total DAC, DSI, and VOBA Asset	$	7,889	$	321	$	166	$	8,376

	Three Months Ended September 30, 2023
	Annuity		Life		Property and Casualty		Total
	(Dollars in millions)
DAC
Balance, beginning of period	$	128	$	162	$	156	$	446
Additions	49		30		128		207
Amortization	(4)		(2)		(121)		(127)
Net change	45		28		7		80
Balance, end of period	$	173	$	190	$	163	$	526

DSI
Balance, beginning of period	$	6	$	—	$	—	$	6
Additions	1		—		—		1
Amortization	—		—		—		—
Net change	1		—		—		1
Balance, end of period	$	7	$	—	$	—	$	7

VOBA
Balance, beginning of period	$	43	$	321	$	23	$	387
Acquisition from business combinations	—		—		—		—
Additions	—		—		—		—
Amortization	(1)		(5)		(3)		(9)
Other	—		—		—		—
Net change	(1)		(5)		(3)		(9)
Balance, end of period	$	42	$	316	$	20	$	378
Total DAC, DSI, and VOBA Asset	$	222	$	506	$	183	$	911


	Nine Months Ended September 30, 2024
	Annuity		Life		Property and Casualty		Total
	(Dollars in millions)
DAC
Balance, beginning of period	$	190	$	224	$	158	$	572
Additions	472		83		302		857
Amortization	(22)		(20)		(313)		(355)
Net change	450		63		(11)		502
Balance, end of period	$	640	$	287	$	147	$	1,074

DSI
Balance, beginning of period	$	8	$	—	$	—	$	8
Additions	235		—		—		235
Amortization	(3)		—		—		(3)
Net change	232		—		—		232
Balance, end of period	$	240	$	—	$	—	$	240

VOBA
Balance, beginning of period	$	39	$	305	$	20	$	364
Acquisition from business combinations	7,239		—		—		7,239
Additions	—		—		—		—
Amortization	(269)		(21)		(1)		(291)
Other (1)	—		(250)		—		(250)
Net change	6,970		(271)		(1)		6,698
Balance, end of period	$	7,009	$	34	$	19	$	7,062
Total DAC, DSI, and VOBA Asset	$	7,889	$	321	$	166	$	8,376

	Nine Months Ended September 30, 2023
	Annuity		Life		Property and Casualty		Total
	(Dollars in millions)
DAC
Balance, beginning of period	$	43	$	88	$	121	$	252
Additions	139		114		355		608
Amortization	(9)		(12)		(313)		(334)
Net change	130		102		42		274
Balance, end of period	$	173	$	190	$	163	$	526

DSI
Balance, beginning of period	$	4	$	—	$	—	$	4
Additions	3		—		—		3
Amortization	—		—		—		—
Net change	3		—		—		3
Balance, end of period	$	7	$	—	$	—	$	7

VOBA
Balance, beginning of period	$	44	$	335	$	64	$	443
Acquisition from business combinations	—		—		—		—
Additions	—		—		—		—
Amortization	(2)		(19)		(44)		(65)
Other	—		—		—		—
Net change	(2)		(19)		(44)		(65)
Balance, end of period	$	42	$	316	$	20	$	378
Total DAC, DSI, and VOBA Asset	$	222	$	506	$	183	$	911

(1)See Note 12 - Reinsurance for details of a reinsurance transaction in relation to the Company’s Life business, resulting in the adjustment to VOBA asset recognized upon the acquisition of American National in 2022.

(2)See Note 16 - Acquisitions for details of the measurement period adjustment to VOBA acquired from the acquisition of AEL in May 2024.

Value of Business Acquired

The VOBA asset is included in “Deferred policy acquisition costs, deferred sales inducements and value of business acquired” in the Consolidated Statements of Financial Position. The amortization of VOBA asset is recorded in “Amortization of deferred policy acquisition costs, deferred sales inducements and value of business acquired” in the Consolidated Statements of Operations.

The following table provides the projected VOBA asset amortization expenses for a five-year period and thereafter:


Years	(Dollars in millions)
2024	$	160
2025	617
2026	566
2027	513
2028	470
Thereafter	4,736
Total amortization expense	$	7,062