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,
	2019			2018
Property casualty:
Deferred policy acquisition costs asset, beginning of period	$	464		$	438
Capitalized deferred policy acquisition costs	254			232
Amortized deferred policy acquisition costs	(233		)	(224		)
Deferred policy acquisition costs asset, end of period	$	485		$	446

Life:
Deferred policy acquisition costs asset, beginning of period	$	274		$	232
Capitalized deferred policy acquisition costs	16			13
Amortized deferred policy acquisition costs	(13		)	(10		)
Shadow deferred policy acquisition costs	(11		)	10
Deferred policy acquisition costs asset, end of period	$	266		$	245

Consolidated:
Deferred policy acquisition costs asset, beginning of period	$	738		$	670
Capitalized deferred policy acquisition costs	270			245
Amortized deferred policy acquisition costs	(246		)	(234		)
Shadow deferred policy acquisition costs	(11		)	10
Deferred policy acquisition costs asset, end of period	$	751		$	691

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.