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Value of Business Acquired, Deferred Acquisition Costs and Deferred Sales Inducements
 6 Months Ended
Jun. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Value of Business Acquired, Deferred Acquisition Costs and Deferred Sales Inducements Value of Business Acquired, Deferred Acquisition Costs and Deferred Sales Inducements
The following table reconciles to Other intangible assets, net, on the unaudited Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022.
June 30, 2023December 31, 2022
(In millions)
Customer relationships and contracts$209 $202 
VOBA1,529 $1,615 
DAC1,856 1,411 
DSI258 200 
Value of distribution asset93 100 
Computer software280 196 
Definite lived trademarks, tradenames, and other32 27 
Indefinite lived tradenames and other60 60 
Total Other intangible assets, net$4,317 $3,811 
The following tables roll forward VOBA by product for the six months ended June 30, 2023 and June 30, 2022.
FIAFixed Rate AnnuitiesImmediate AnnuitiesUniversal LifeTraditional LifeTotal
(In millions)
Balance at January 1, 2023
$1,166 $32 $201 $143 $73 $1,615 
Amortization(71)(3)(6)(4)(2)(86)
Balance at June 30, 2023
$1,095 $29 $195 $139 $71 $1,529 
FIAFixed Rate AnnuitiesImmediate AnnuitiesUniversal LifeTraditional LifeTotal
(In millions)
Balance at January 1, 2022
$1,314 $39 $212 $153 $25 $1,743 
Amortization(76)(3)(6)(5)(1)(91)
Shadow Premium Deficiency Testing (“PDT”)— — — — 52 52 
Balance at June 30, 2022
$1,238 $36 $206 $148 $76 $1,704 

VOBA amortization expense of $86 million and $91 million was recorded in Depreciation and amortization on the unaudited Condensed Consolidated Statements of Earnings for the six months ended June 30, 2023 and June 30, 2022, respectively.
The following table presents a reconciliation of VOBA to the table above, which is included in Other intangible assets, net in the unaudited Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022:
June 30, 2023December 31, 2022
(In millions)
FIA$1,095 $1,166 
Fixed Rate Annuities29 32 
Immediate Annuities195 201 
Universal Life139 143 
Traditional Life71 73 
Total$1,529 $1,615 
The following tables roll forward DAC by product for the six months ended June 30, 2023 and June 30, 2022.
FIAFixed Rate AnnuitiesUniversal LifeTotal (a)
(In millions)
Balance at January 1, 2023
$971 $83 $348 $1,402 
Capitalization249 91 109 449 
Amortization(47)(20)(16)(83)
Reinsurance related adjustments— 79 — 79 
Balance at June 30, 2023
$1,173 $233 $441 $1,847 
FIAFixed Rate AnnuitiesUniversal LifeTotal (a)
(In millions)
Balance at January 1, 2022
$564 $38 $173 $775 
Capitalization216 25 91 332 
Amortization(29)(4)(9)(42)
Balance at June 30, 2022
$751 $59 $255 $1,065 
(a) Excludes insignificant amounts of DAC related to Funding Agreement Backed Note (“FABN”)
DAC amortization expense of $83 million and $42 million was recorded in Depreciation and amortization on the unaudited Condensed Consolidated Statements of Earnings for the six months ended June 30, 2023 and June 30, 2022, respectively.
The following table presents a reconciliation of DAC to the table above, which is included in Other intangible assets, net in the unaudited Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022:
June 30, 2023December 31, 2022
(In millions)
FIA$1,173 $971 
Fixed Rate Annuities233 83 
Universal Life441 348 
Funding Agreements9 9 
Total$1,856 $1,411 
The following tables roll forward DSI for the six months ended June 30, 2023 and June 30, 2022:
FIATotal
(In millions)
Balance at January 1, 2023
$200 $200 
Capitalization68 68 
Amortization(10)(10)
Balance at June 30, 2023
$258 $258 
FIATotal
(In millions)
Balance at January 1, 2022
$127 $127 
Capitalization38 38 
Amortization(6)(6)
Balance at June 30, 2022
$159 $159 
DSI amortization expense of $10 million and $6 million was recorded in Depreciation and amortization on the unaudited Condensed Consolidated Statements of Earnings for the six months ended June 30, 2023 and June 30, 2022, respectively.
The following table presents a reconciliation of DSI to the table above, which is included in Other intangible assets, net in the unaudited Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022:
June 30, 2023December 31, 2022
(In millions)
FIA$258 $200 
Total$258 $200 
The cash flow assumptions used to amortize VOBA and DAC were consistent with the assumptions used to estimate the FPB for life contingent immediate annuity and PRT contracts, and will be reviewed and unlocked, if applicable, in the same period as those balances. For nonparticipating traditional life contracts, the VOBA amortization is straight-line, without the use of cash flow assumptions. For FIA contracts, the cash flow assumptions used to amortize VOBA, DAC, and DSI were consistent with the assumptions used to estimate the value of the embedded derivative and MRBs, and will be reviewed and unlocked, if applicable, in the same period as those balances. For fixed rate annuities and IUL the cash flow assumptions used to amortize VOBA, DAC and DSI reflect the company’s best estimates for policyholder behavior, consistent with the development of assumptions for FIA, immediate annuity, and PRT.
We review cash flow assumptions annually, generally in the third quarter. In 2022, F&G undertook a review of all significant assumptions and revised GMWB utilization for our deferred annuity contracts (FIA and fixed rate annuities) to reflect internal and industry experience in the first several contract years.
For the in-force liabilities as of June 30, 2023, the estimated amortization expense for VOBA in future fiscal periods is as follows:
Estimated Amortization Expense
Fiscal Year(In millions)
2023$80 
2024151 
2025139 
2026128 
2027117 
Thereafter914