Intangible Assets

12 Months Ended

Dec. 31, 2011

6. Intangible assets

Included in Goodwill and other intangible assets in the consolidated balance sheets at December 31, 2011, are goodwill of $4.2 billion and other intangible assets of $651 million.

The following table presents a roll-forward of Goodwill by business segment:


(in millions of U.S. dollars)	Insurance - North American			Insurance - Overseas General			Global Reinsurance		Life			ACE Consolidated
Balance at December 31, 2009	$	1,205		$	1,497		$	365	$	747		$	3,814
Acquisition of Rain and Hail		135			–			–		–			135
Acquisition of Jerneh		–			94			–		–			94
Purchase price allocation adjustment		–			–			–		3			3
Foreign exchange revaluation and other		11			(27	)		–		–			(16	)
Balance at December 31, 2010	$	1,351		$	1,564		$	365	$	750		$	4,030
Purchase price allocation adjustment		(12	)		5			–		–			(7	)
Acquisition of New York Life's Korea operations and Hong Kong operations		–			–			–		121			121
Acquisition of PMHC		11			–			–		–			11
Acquisition of Rio Guayas		–			31			–		–			31
Foreign exchange revaluation and other		–			3			–		(9	)		(6	)
Balance at December 31, 2011	$	1,350		$	1,603		$	365	$	862		$	4,180

Included in the other intangible assets balance at December 31, 2011, are intangible assets subject to amortization of $558 million and intangible assets not subject to amortization of $93 million. Intangible assets subject to amortization include agency relationships, software, client lists, renewal rights, and trademarks, primarily attributable to the acquisitions of Rain and Hail and Combined Insurance. The majority of the balance of intangible assets not subject to amortization relates to Lloyd's of London (Lloyd's) Syndicate 2488 capacity. Amortization expense related to other intangible assets amounted to $29 million, $9 million, and $11 million for the years ended December 31, 2011, 2010, and 2009, respectively. Amortization expense related to other intangible assets is estimated to be between approximately $31 million and $43 million for each of the next five fiscal years.

The following table presents a roll-forward of VOBA:


(in millions of U.S. dollars)	2011			2010			2009
Balance, beginning of year	$	634		$	748		$	823
Acquisition of New York Life's Korea operations and Hong Kong operations		120			–			–
Amortization expense		(105	)		(111	)		(130	)
Foreign exchange revaluation		(1	)		(3	)		55
Balance, end of year	$	648		$	634		$	748

The following table presents the estimated amortization expense related to VOBA for the next five years:


For the Year Ending December 31 (in millions of U.S. dollars)
2012	$	96
2013		86
2014		77
2015		70
2016		65
Total	$	394

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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