Deferred Policy Acquisition Costs
A progression of deferred policy acquisition costs is presented below (in millions): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | P&C | | | Annuity and Run-off Long-term Care and Life | | | | | Deferred | | | Deferred | | Sales | | | | | | | | | | | Consolidated | | Costs | | | Costs | | Inducements | | PVFP | | Subtotal | | Unrealized (*) | | Total | | | Total | Balance at December 31, 2015 | $ | 226 |
| | | $ | 1,018 |
| | $ | 119 |
| | $ | 55 |
| | $ | 1,192 |
| | $ | (234 | ) | | $ | 958 |
| | | $ | 1,184 |
| Additions | 535 |
| | | 230 |
| | 9 |
| | — |
| | 239 |
| | — |
| | 239 |
| | | 774 |
| Amortization: | | | | | | | | | | | | | | | | | | Periodic amortization | (520 | ) | | | (169 | ) | | (24 | ) | | (9 | ) | | (202 | ) | | — |
| | (202 | ) | | | (722 | ) | Annuity unlocking | — |
| | | 25 |
| | 4 |
| | — |
| | 29 |
| | — |
| | 29 |
| | | 29 |
| Included in realized gains | — |
| | | 6 |
| | 2 |
| | — |
| | 8 |
| | — |
| | 8 |
| | | 8 |
| Foreign currency translation | (3 | ) | | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | | (3 | ) | Change in unrealized | — |
| | | — |
| | — |
| | — |
| | — |
| | (31 | ) | | (31 | ) | | | (31 | ) | Balance at December 31, 2016 | 238 |
| | | 1,110 |
| | 110 |
| | 46 |
| | 1,266 |
| | (265 | ) | | 1,001 |
| | | 1,239 |
| | | | | | | | | | | | | | | | | | | Additions | 588 |
| | | 225 |
| | 4 |
| | — |
| | 229 |
| | — |
| | 229 |
| | | 817 |
| Amortization: | | | | | | | | | | | | | | | | | | Periodic amortization | (556 | ) | | | (161 | ) | | (19 | ) | | (8 | ) | | (188 | ) | | — |
| | (188 | ) | | | (744 | ) | Annuity unlocking | — |
| | | 34 |
| | 6 |
| | 1 |
| | 41 |
| | — |
| | 41 |
| | | 41 |
| Included in realized gains | — |
| | | 9 |
| | 1 |
| | — |
| | 10 |
| | — |
| | 10 |
| | | 10 |
| Foreign currency translation | — |
| | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | | — |
| Other | — |
| | | — |
| | — |
| | 10 |
| | 10 |
| | — |
| | 10 |
| | | 10 |
| Change in unrealized | — |
| | | — |
| | — |
| | — |
| | — |
| | (157 | ) | | (157 | ) | | | (157 | ) | Balance at December 31, 2017 | 270 |
| | | 1,217 |
| | 102 |
| | 49 |
| | 1,368 |
| | (422 | ) | | 946 |
| | | 1,216 |
| | | | | | | | | | | | | | | | | | | Additions | 675 |
| | | 263 |
| | 2 |
| | — |
| | 265 |
| | — |
| | 265 |
| | | 940 |
| Amortization: | | | | | | | | | | | | | | | | | | Periodic amortization | (644 | ) | | | (238 | ) | | (19 | ) | | (7 | ) | | (264 | ) | | — |
| | (264 | ) | | | (908 | ) | Annuity unlocking | — |
| | | 29 |
| | — |
| | — |
| | 29 |
| | — |
| | 29 |
| | | 29 |
| Included in realized gains | — |
| | | 14 |
| | 1 |
| | — |
| | 15 |
| | — |
| | 15 |
| | | 15 |
| Foreign currency translation | (2 | ) | | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | | (2 | ) | Change in unrealized | — |
| | | — |
| | — |
| | — |
| | — |
| | 392 |
| | 392 |
| | | 392 |
| Balance at December 31, 2018 | $ | 299 |
| | | $ | 1,285 |
| | $ | 86 |
| | $ | 42 |
| | $ | 1,413 |
| | $ | (30 | ) | | $ | 1,383 |
| | | $ | 1,682 |
|
| | (*) | Adjustments to DPAC related to net unrealized gains/losses on securities and cash flow hedges. |
The present value of future profits (“PVFP”) amounts in the table above are net of $148 million and $141 million of accumulated amortization at December 31, 2018 and 2017, respectively. During each of the next five years, the PVFP is expected to decrease at a rate of approximately one-eighth of the balance at the beginning of each respective year. |