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Claims and Surrenders. A breakout of claims and surrender benefits is detailed below. 

## CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES 

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• Death claims expense decreased 3.0% in 2018 compared to 2017 after remaining relatively flat in 2017 compared to 2016. Death claims can fluctuate from year to year. Mortality experience is closely monitored by the Company as a key performance indicator and these amounts were within expected levels. 

• Surrender expenses are consistent with actuarial expectations and remained relatively consistent. 

• Property claims decreased in 2018 compared to 2017 due to higher reported weather claims experienced in 2017. Property claims decreased in 2017 compared to 2016, which was primarily due to tornado activity in Louisiana and high winds that accompanied the severe flooding in Louisiana during 2016. 

Increase in Future Policy Benefit Reserves. The change in reserves decrease is related to the decrease in current year sales. 

Commissions. Commission expense decreased in 2018, which was in line with the premium levels and was comparable for all three periods presented based upon fluctuations in premiums collected. 

Other General Expenses. Expenses decreased 12.7% in 2018 and increased 53.4% in 2017 compared to prior periods. The increase in 2017 was related to the write-off of our Home Service goodwill value of $4.6 million. Expenses are higher for both 2018 and 2017 due primarily to increased consulting and audit fees, as well as higher salaries, bonuses and related employee benefits paid to top executives. Expenses are allocated by segment based upon an annual expense study performed by the Company. 

Capitalization and Amortization of Deferred Policy Acquisition Costs. DAC capitalization is directly correlated to fluctuations in first year commissions. Amortization of DAC was relatively flat from 2017 to 2018 (only decreasing by 1.7%) and increased by 7.5% from 2016 to 2017. The increase in 2016 was primarily due to an increase in surrenders, although both 2016 and 2017 increases reflect the impact of updates in our assumptions as well. 

