DEFERRED POLICY ACQUISITION COSTS AND INSURANCE EXPENSES

12 Months Ended

Dec. 31, 2012

Deferred Policy Acquisition Costs and Insurance Expense Disclosure [Abstract]

DEFERRED POLICY ACQUISITION COSTS AND INSURANCE EXPENSES

DEFERRED POLICY ACQUISITION COSTS AND INSURANCE EXPENSES

As discussed in Note 1, effective January 1, 2012 we retrospectively adopted amended accounting guidance on accounting for costs associated with acquiring or renewing insurance contracts. As a result, prior-year amounts have been adjusted for the adoption of this new accounting guidance for deferred policy acquisition costs.

Consolidated policy acquisition costs deferred during the year were $1.7 billion in 2012, compared with $1.6 billion in 2011 and $1.3 billion in 2010. The following table presents a rollforward of deferred policy acquisition costs by segment for the years ended December 31.

	2012								2011
(In millions)	Japan				U.S.				Japan				U.S.
Deferred policy acquisition costs:
Balance, beginning of year		$	7,102			$	2,687			$	6,390			$	2,548
Capitalization		1,177				570				1,043				522
Amortization		(716		)		(400		)		(650		)		(383		)
Foreign currency translation and other		(762		)		0				319				0
Balance, end of year		$	6,801			$	2,857			$	7,102			$	2,687

Commissions deferred as a percentage of total acquisition costs deferred were 84% in 2012, compared with 82% in 2011 and 2010.

Personnel, compensation and benefit expenses as a percentage of insurance expenses were 51% in 2012, 49% in 2011 and 46% in 2010. Advertising expense, which is included in insurance expenses in the consolidated statements of earnings, was as follows for the years ended December 31:

(In millions)	2012			2011			2010
Advertising expense:
Aflac Japan		$	127		$	128		$	112
Aflac U.S.		127			130			116
Total advertising expense		$	254		$	258		$	228

Depreciation and other amortization expenses, which are included in insurance expenses in the consolidated statements of earnings, were as follows for the years ended December 31:

(In millions)	2012			2011			2010
Depreciation expense		$	60		$	59		$	60
Other amortization expense		7			5			22
Total depreciation and other amortization expense(1)		$	67		$	64		$	82

⁽¹⁾Aflac Japan accounted for $33 in 2012, $51 in 2011 and $48 in 2010

Lease and rental expense, which are included in insurance expenses in the consolidated statements of earnings, were as follows for the years ended December 31:

(In millions)	2012			2011			2010
Lease and rental expense:
Aflac Japan		$	71		$	73		$	68
Aflac U.S.		9			8			8
Other		1			1			1
Total lease and rental expense		$	81		$	82		$	77