Deferred Policy Acquisition Costs

9 Months Ended

Sep. 30, 2012

Deferred Policy Acquisition Costs Disclosures [Abstract]

Deferred Policy Acquisition Costs

G.    Deferred Policy Acquisition Costs

Deferred policy acquisition costs consisted of the following (in millions):

	September 30, 2012			December 31, 2011
Property and casualty insurance	$	200		$	189
Annuity and supplemental insurance:
Policy acquisition costs	876			898
Policyholder sales inducements	195			207
Present value of future profits (“PVFP”)	114			144
Impact of unrealized gains and losses on securities	(764		)	(537		)
Total annuity and supplemental	421			712
	$	621		$	901

See Accounting Standards Adopted in 2012under Note A — “Accounting Policies.”

The PVFP amounts in the table above are net of $169 million and $195 million of accumulated amortization at September 30, 2012 and December 31, 2011, respectively. Annuity and supplemental insurance policy acquisition costs and PVFP decreased $92 million and $16 million, respectively, due to the August 2012 sale of the Medicare supplement and critical illness businesses.

Amortization of deferred acquisition costs for the third quarter and first nine months of 2012 and 2011 were as follows (in millions):

	Three months ended				Nine months ended
	September 30,				September 30,
	2012		2011		2012		2011
Property and casualty insurance	$	111	$	102	$	323	$	310
Annuity and supplemental insurance:
Policy acquisition costs	27		27		86		89
Policyholder sales inducements	8		6		24		20
PVFP	5		5		14		16
Total annuity and supplemental	40		38		124		125
	$	151	$	140	$	447	$	435