Deferred Policy Acquisition Costs and Value of Business Acquired

12 Months Ended

Dec. 31, 2011

Deferred Policy Acquisition Costs and Value of Business Acquired [Abstract]

Deferred Policy Acquisition Costs and Value of Business Acquired

6. Deferred Policy Acquisition Costs and Value of Business Acquired

Information regarding DAC and VOBA was as follows:

	DAC			VOBA			Total
	(In millions)
Balance at January 1, 2009	$	13,638		$	3,491		$	17,129
Capitalizations		2,502			—			2,502
Subtotal		16,140			3,491			19,631
Amortization related to:
Net investment gains (losses)		568			87			655
Other expenses		(1,445	)		(265	)		(1,710	)
Total amortization		(877	)		(178	)		(1,055	)
Unrealized investment gains (losses)		(1,850	)		(505	)		(2,355	)
Effect of foreign currency translation and other		138			56			194
Balance at December 31, 2009		13,551			2,864			16,415
Capitalizations		2,770			—			2,770
Acquisitions		—			9,210			9,210
Subtotal		16,321			12,074			28,395
Amortization related to:
Net investment gains (losses)		(92	)		(16	)		(108	)
Other expenses		(1,875	)		(494	)		(2,369	)
Total amortization		(1,967	)		(510	)		(2,477	)
Unrealized investment gains (losses)		(1,043	)		(125	)		(1,168	)
Effect of foreign currency translation and other		66			(351	)		(285	)
Balance at December 31, 2010		13,377			11,088			24,465
Capitalizations		5,558			—			5,558
Acquisitions		—			11			11
Subtotal		18,935			11,099			30,034
Amortization related to:
Net investment gains (losses)		(478	)		(49	)		(527	)
Other expenses		(2,614	)		(1,757	)		(4,371	)
Total amortization		(3,092	)		(1,806	)		(4,898	)
Unrealized investment gains (losses)		(427	)		(361	)		(788	)
Effect of foreign currency translation and other		(176	)		447			271
Balance at December 31, 2011	$	15,240		$	9,379		$	24,619

See Note 2 for a description of acquisitions and dispositions.

The estimated future amortization expense allocated to other expenses for the next five years for VOBA is $1.3 billion in 2012, $1.1 billion in 2013, $917 million in 2014, $774 million in 2015 and $661 million in 2016.

Amortization of DAC and VOBA is attributed to both investment gains and losses and to other expenses for the amount of gross margins or profits originating from transactions other than investment gains and losses. Unrealized investment gains and losses represent the amount of DAC and VOBA that would have been amortized if such gains and losses had been recognized.

See Note 1 for information on the retrospective application of the adoption of new accounting guidance related to DAC. See also Note 22 for information on the continued realignment of certain products and businesses among the Company’s existing segments during the third quarter of 2012, which was retrospectively applied.

Information regarding DAC and VOBA by segment, as well as Corporate & Other, was as follows:

	DAC				VOBA				Total
	December 31,
	2011		2010		2011		2010		2011		2010
	(In millions)
Retail	$	10,470	$	10,477	$	1,211	$	1,927	$	11,681	$	12,404
Group, Voluntary & Worksite Benefits		377		387		—		—		377		387
Corporate Benefit Funding		86		61		3		1		89		62
Latin America		693		650		357		442		1,050		1,092
Asia		2,990		1,632		6,564		6,998		9,554		8,630
EMEA		623		168		1,243		1,719		1,866		1,887
Corporate & Other		1		2		1		1		2		3
Total	$	15,240	$	13,377	$	9,379	$	11,088	$	24,619	$	24,465