Deferred Policy Acquisition Costs

3 Months Ended

Mar. 31, 2023

DEFERRED POLICY ACQUISITION COSTS

The following tables provide the balances of and changes in deferred policy acquisition costs for the Company’s Traditional business for the three months ended March 31, 2023 and 2022 (dollars in millions):


Three months ended March 31, 2023:	U.S. and Latin America – Traditional		Canada – Traditional		Europe, Middle East and Africa – Traditional		Asia Pacific – Traditional
Balance, beginning of year	$	2,087	$	171	$	294	$	1,043
Capitalization	57		3		25		19
Amortization expense	(35)		(3)		(10)		(15)
Foreign currency translation	—		—		—		(3)
Balance, end of period	$	2,109	$	171	$	309	$	1,044


Three months ended March 31, 2022:	U.S. and Latin America – Traditional		Canada – Traditional		Europe, Middle East and Africa – Traditional		Asia Pacific – Traditional
Balance, beginning of year	$	1,947	$	191	$	270	$	1,056
Capitalization	70		2		15		34
Amortization expense	(36)		(3)		(11)		(23)
Foreign currency translation	—		2		4		(6)
Balance, end of period	$	1,981	$	192	$	278	$	1,061

The following tables provide the balances of and changes in deferred policy acquisition costs for the Company’s Financial Solutions business for the three months ended March 31, 2023 and 2022 (dollars in millions):


Three months ended March 31, 2023:	U.S. and Latin America – Financial Solutions		Canada – Financial Solutions		Europe, Middle East and Africa – Financial Solutions		Asia Pacific – Financial Solutions
Balance, beginning of year	$	341	$	—	$	—	$	188
Capitalization	—		—		—		108
Amortization expense	(11)		—		—		(6)
Foreign currency translation	—		—		—		(1)
Balance, end of period	$	330	$	—	$	—	$	289


Three months ended March 31, 2022:	U.S. and Latin America – Financial Solutions		Canada – Financial Solutions		Europe, Middle East and Africa – Financial Solutions		Asia Pacific – Financial Solutions
Balance, beginning of year	$	312	$	—	$	—	$	81
Capitalization	6		—		—		13
Amortization expense	(20)		—		—		(3)
Foreign currency translation	—		—		—		—
Balance, end of period	$	298	$	—	$	—	$	91

The reconciliation of deferred policy acquisition costs to the condensed consolidated balance sheets as of March 31, 2023 and 2022 is as follows (dollars in millions):


	March 31,
	2023		2022
Deferred policy acquisition costs included in the rollforwards:
Traditional:
U.S. and Latin America	$	2,109	$	1,981
Canada	171		192
Europe, Middle East and Africa	309		278
Asia Pacific	1,044		1,061
Financial Solutions:
U.S. and Latin America	330		298
Canada	—		—
Europe, Middle East and Africa	—		—
Asia Pacific	289		91
Other long-duration business:
Corporate and Other	5		5
Total deferred policy acquisition costs	$	4,257	$	3,906