Value of Business Acquired, Deferred Acquisition Costs and Deferred Sales Inducements

3 Months Ended

Mar. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Value of Business Acquired, Deferred Acquisition Costs and Deferred Sales Inducements

A summary of the changes in the carrying amounts of our VOBA, DAC and DSI intangible assets is as follows (in millions):


	VOBA		DAC		DSI		Total
Balance at January 1, 2022	$	1,185	$	761	$	88	$	2,034

Deferrals	—		154		16		170
Amortization	(94)		(39)		(11)		(144)
Interest	7		6		—		13
Unlocking	(6)		(1)		2		(5)
Adjustment for net unrealized investment (gains) losses	318		88		21		427

Balance at March 31, 2022	$	1,410	$	969	$	116	$	2,495

	VOBA		DAC		DSI		Total
Balance at January 1, 2021	$	1,466	$	222	$	36	$	1,724

Deferrals	—		133		21		154
Amortization	(132)		(8)		(8)		(148)
Interest	8		2		—		10
Unlocking	1		—		—		1
Adjustment for net unrealized investment (gains) losses	132		(5)		—		127

Balance at March 31, 2021	$	1,475	$	344	$	49	$	1,868

Amortization of VOBA, DAC, and DSI is based on the current and future expected gross margins or profits recognized, including investment gains and losses. The interest accrual rate utilized to calculate the accretion of interest on VOBA ranged from 0% to 4.71%. The adjustment for unrealized net investment losses (gains) represents the amount of VOBA, DAC, and DSI that would have been amortized if such unrealized gains and losses had been recognized. This is referred to as the “shadow adjustments” as the additional amortization is reflected in AOCI rather than the unaudited Condensed Consolidated Statements of Earnings. As of March 31, 2022 and March 31, 2021, the VOBA balances included cumulative adjustments for net unrealized investment gains (losses) of $(86) million and $152 million, respectively, the DAC balances included cumulative adjustments for net unrealized investment gains (losses) of $(49) million and $30 million, respectively, and the DSI balance included net unrealized investment gains (losses) of $(15) million and $4 million, respectively.

For the in-force liabilities as of March 31, 2022, the estimated amortization expense for VOBA in future fiscal periods is as follows (in millions):


	Estimated Amortization Expense
Fiscal Year
2022	$	(19)
2023	120
2024	157
2025	150
2026	138

Thereafter	778