Deferred Acquisition Costs

3 Months Ended

Mar. 31, 2021

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,
	2021		2020
Property casualty:
Deferred policy acquisition costs asset, beginning of period	$	542	$	512
Capitalized deferred policy acquisition costs	312		280
Amortized deferred policy acquisition costs	(268)		(256)
Deferred policy acquisition costs asset, end of period	$	586	$	536
Life:
Deferred policy acquisition costs asset, beginning of period	$	263	$	262
Capitalized deferred policy acquisition costs	14		15
Amortized deferred policy acquisition costs	(9)		(9)
Shadow deferred policy acquisition costs	26		23
Deferred policy acquisition costs asset, end of period	$	294	$	291
Consolidated:
Deferred policy acquisition costs asset, beginning of period	$	805	$	774
Capitalized deferred policy acquisition costs	326		295
Amortized deferred policy acquisition costs	(277)		(265)
Shadow deferred policy acquisition costs	26		23
Deferred policy acquisition costs asset, end of period	$	880	$	827

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.