Deferred Policy Acquisition Costs

9 Months Ended

Sep. 30, 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 nine months ended September 30, 2023 and 2022 (dollars in millions):


Nine months ended September 30, 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	183		7		75		94
Amortization expense	(111)		(9)		(28)		(44)
Foreign currency translation	1		—		(10)		(24)
Balance, end of period	$	2,160	$	169	$	331	$	1,069


Nine months ended September 30, 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	208		5		57		66
Amortization expense	(108)		(14)		(25)		(53)
Foreign currency translation	—		(16)		(40)		(57)
Balance, end of period	$	2,047	$	166	$	262	$	1,012

The following tables provide the balances of and changes in deferred policy acquisition costs for the Company’s Financial Solutions business for the nine months ended September 30, 2023 and 2022 (dollars in millions):


Nine months ended September 30, 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	—		—		—		89
Amortization expense	(32)		—		—		(24)
Foreign currency translation	—		—		—		(6)
Balance, end of period	$	309	$	—	$	—	$	247


Nine months ended September 30, 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	85		—		—		92
Amortization expense	(42)		—		—		(13)
Foreign currency translation	—		—		—		(2)
Balance, end of period	$	355	$	—	$	—	$	158

The reconciliation of deferred policy acquisition costs to the condensed consolidated balance sheets as of September 30, 2023 and 2022 is as follows (dollars in millions):


	September 30,
	2023		2022
Deferred policy acquisition costs included in the rollforwards:
Traditional:
U.S. and Latin America	$	2,160	$	2,047
Canada	169		166
Europe, Middle East and Africa	331		262
Asia Pacific	1,069		1,012
Financial Solutions:
U.S. and Latin America	309		355
Canada	—		—
Europe, Middle East and Africa	—		—
Asia Pacific	247		158
Other long-duration business:
Corporate and Other	4		4
Total deferred policy acquisition costs	$	4,289	$	4,004