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, amounts prior to 2012 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 $1.4 billion in 2013, compared with $1.7 billion in 2012 and $1.6 billion in 2011. The following table presents a rollforward of deferred policy acquisition costs by segment for the years ended December 31.



	2013								2012
(In millions)	Japan				U.S.				Japan				U.S.
Deferred policy acquisition costs:
Balance, beginning of year		$	6,801			$	2,857			$	7,102			$	2,687
Capitalization		893				555				1,177				570
Amortization		(641		)		(433		)		(716		)		(400		)
Foreign currency translation and other		(1,234		)		0				(762		)		0
Balance, end of year		$	5,819			$	2,979			$	6,801			$	2,857

Commissions deferred as a percentage of total acquisition costs deferred were 81% in 2013, compared with 84% in 2012 and 82% in 2011.

Personnel, compensation and benefit expenses as a percentage of insurance expenses were 51% in 2013 and 2012 and 49% in 2011. 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)	2013			2012			2011
Advertising expense:
Aflac Japan		$	112		$	127		$	128
Aflac U.S.		128			127			130
Total advertising expense		$	240		$	254		$	258

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)	2013			2012			2011
Depreciation expense		$	56		$	60		$	59
Other amortization expense		13			7			5
Total depreciation and other amortization expense		$	69		$	67		$	64

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)	2013			2012			2011
Lease and rental expense:
Aflac Japan		$	55		$	71		$	73
Aflac U.S.		10			9			8
Other		1			1			1
Total lease and rental expense		$	66		$	81		$	82

Advertising, lease and rental expense decreased for Aflac Japan in 2013 due to the weakening of the yen relative to the U.S. dollar.