Deferred Acquisition Costs

3 Months Ended

Mar. 31, 2017

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,
	2017			2016
Property casualty:
Deferred policy acquisition costs asset, beginning of period	$	408		$	388
Capitalized deferred policy acquisition costs	226			210
Amortized deferred policy acquisition costs	(206		)	(201		)
Deferred policy acquisition costs asset, end of period	$	428		$	397
Life:
Deferred policy acquisition costs asset, beginning of period	$	229		$	228
Capitalized deferred policy acquisition costs	13			12
Amortized deferred policy acquisition costs	(8		)	(11		)
Amortized shadow deferred policy acquisition costs	(2		)	(8		)
Deferred policy acquisition costs asset, end of period	$	232		$	221
Consolidated:
Deferred policy acquisition costs asset, beginning of period	$	637		$	616
Capitalized deferred policy acquisition costs	239			222
Amortized deferred policy acquisition costs	(214		)	(212		)
Amortized shadow deferred policy acquisition costs	(2		)	(8		)
Deferred policy acquisition costs asset, end of period	$	660		$	618

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