Deferred Policy Acquisition Costs

3 Months Ended

Mar. 31, 2025

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. For property casualty, we evaluate the costs for recoverability. 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.

The table below shows the deferred policy acquisition costs and asset reconciliation.


(Dollars in millions)	Three months ended March 31,
		2025		2024
Property casualty:
Deferred policy acquisition costs asset, beginning of period		$	886	$	749
Capitalized deferred policy acquisition costs		485		407
Amortized deferred policy acquisition costs		(434)		(360)
Deferred policy acquisition costs asset, end of period		$	937	$	796

Life:
Deferred policy acquisition costs asset, beginning of period		$	356	$	344
Capitalized deferred policy acquisition costs		12		10
Amortized deferred policy acquisition costs		(8)		(7)

Deferred policy acquisition costs asset, end of period		$	360	$	347

Consolidated:
Deferred policy acquisition costs asset, beginning of period		$	1,242	$	1,093
Capitalized deferred policy acquisition costs		497		417
Amortized deferred policy acquisition costs		(442)		(367)

Deferred policy acquisition costs asset, end of period		$	1,297	$	1,143

The table below shows the life deferred policy acquisition costs asset by product:


(Dollars in millions)
Three months ended March 31, 2025	Term		Whole life		Deferred annuity		Universal life		Total
Balance, beginning of period	$	245	$	52	$	8	$	51	$	356
Capitalized deferred policy acquisition costs	9		2		—		1		12
Amortized deferred policy acquisition costs	(6)		(1)		—		(1)		(8)
Balance, end of period	$	248	$	53	$	8	$	51	$	360

Three months ended March 31, 2024
Balance, beginning of period	$	236	$	48	$	8	$	52	$	344
Capitalized deferred policy acquisition costs	8		2		—		—		10
Amortized deferred policy acquisition costs	(6)		(1)		—		—		(7)
Balance, end of period	$	238	$	49	$	8	$	52	$	347