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,
	2018			2017
Property casualty:
Deferred policy acquisition costs asset, beginning of period	$	438		$	408
Capitalized deferred policy acquisition costs	232			226
Amortized deferred policy acquisition costs	(224		)	(206		)
Deferred policy acquisition costs asset, end of period	$	446		$	428

Life:
Deferred policy acquisition costs asset, beginning of period	$	232		$	229
Capitalized deferred policy acquisition costs	13			13
Amortized deferred policy acquisition costs	(10		)	(8		)
Amortized shadow deferred policy acquisition costs	10			(2		)
Deferred policy acquisition costs asset, end of period	$	245		$	232

Consolidated:
Deferred policy acquisition costs asset, beginning of period	$	670		$	637
Capitalized deferred policy acquisition costs	245			239
Amortized deferred policy acquisition costs	(234		)	(214		)
Amortized shadow deferred policy acquisition costs	10			(2		)
Deferred policy acquisition costs asset, end of period	$	691		$	660

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.