Deferred Policy Acquisition Costs

6 Months Ended

Jun. 30, 2012

Deferred Policy Acquisition Costs [Abstract]

Deferred Policy Acquisition Costs

G. Deferred Policy Acquisition Costs

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

	June 30, 2012			December 31, 2011
Property and casualty insurance	$	198		$	189
Annuity and supplemental insurance:
Policy acquisition costs		955			898
Policyholder sales inducements		200			207
Present value of future profits (“PVFP”)		135			144
Impact of unrealized gains and losses on securities		(642	)		(537	)
Total annuity and supplemental		648			712
	$	846		$	901

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

The PVFP amounts in the table above are net of $204 million and $195 million of accumulated amortization at June 30, 2012 and December 31, 2011, respectively.

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

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
Property and casualty insurance	$	111	$	108	$	212	$	208
Annuity and supplemental insurance:
Policy acquisition costs		31		30		59		62
Policyholder sales inducements		8		7		16		14
PVFP		4		5		9		11
Total annuity and supplemental		43		42		84		87
	$	154	$	150	$	296	$	295