Deferred Acquisition Costs

3 Months Ended

Mar. 31, 2016

Deferred Costs [Abstract]

Deferred Acquisition Costs

Deferred Policy Acquisition Costs

Expenses directly related to successfully acquired insurance policies – primarily commissions, premium taxes and underwriting costs – are deferred and amortized over the terms of the policies. We update our acquisition cost assumptions periodically to reflect actual experience, and we evaluate the costs for recoverability. The table below shows the deferred policy acquisition costs and asset reconciliation.

(Dollars in millions)	Three months ended March 31,
	2016			2015
Property casualty:
Deferred policy acquisition costs asset, beginning of period	$	388		$	379
Capitalized deferred policy acquisition costs	210			196
Amortized deferred policy acquisition costs	(201		)	(198		)
Deferred policy acquisition costs asset, end of period	$	397		$	377
Life:
Deferred policy acquisition costs asset, beginning of period	$	228		$	199
Capitalized deferred policy acquisition costs	12			11
Amortized deferred policy acquisition costs	(11		)	(11		)
Amortized shadow deferred policy acquisition costs	(8		)	(5		)
Deferred policy acquisition costs asset, end of period	$	221		$	194
Consolidated:
Deferred policy acquisition costs asset, beginning of period	$	616		$	578
Capitalized deferred policy acquisition costs	222			207
Amortized deferred policy acquisition costs	(212		)	(209		)
Amortized shadow deferred policy acquisition costs	(8		)	(5		)
Deferred policy acquisition costs asset, end of period	$	618		$	571

No premium deficiencies were recorded in the condensed consolidated statements of income, as the sum of the anticipated loss and loss adjustment expenses, policyholder dividends and unamortized deferred acquisition expenses did not exceed the related unearned premiums and anticipated investment income.