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Business Segments (Tables) | 9 Months Ended
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Sep. 30, 2023
Segment Reporting [Abstract] |
Significant components of the Company's continuing operations and selected balance sheet items | The Company's results of operations and selected balance sheet items by segment are presented in the following tables.
Three months ended September 30, 2023 | Specialty |  | Commercial |  | International |  | Life & Group |  | Corporate & Other |  |  |  |
(In millions) |  |  |  |  |  | Eliminations |  | Total
Operating revenues |  |  |  |  |  |  |  |  |  |  |  |  |
Net earned premiums | $ | 829 |  |  | $ | 1,170 |  |  | $ | 296 |  |  | $ | 112 |  |  | $ | — |  |  | $ | (1) |  |  | $ | 2,406 |
Net investment income | 136 |  |  | 156 |  |  | 26 |  |  | 216 |  |  | 19 |  |  | — |  |  | 553 |
Non-insurance warranty revenue | 407 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 407 |
Other revenues | — |  |  | 9 |  |  | (1) |  |  | — |  |  | 2 |  |  | (2) |  |  | 8 |
Total operating revenues | 1,372 |  |  | 1,335 |  |  | 321 |  |  | 328 |  |  | 21 |  |  | (3) |  |  | 3,374 |
Claims, benefits and expenses |  |  |  |  |  |  |  |  |  |  |  |  |
Net incurred claims and benefits | 480 |  |  | 807 |  |  | 178 |  |  | 343 |  |  | 10 |  |  | — |  |  | 1,818 |
Policyholders’ dividends | 2 |  |  | 6 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 8 |
Amortization of deferred acquisition costs | 175 |  |  | 188 |  |  | 63 |  |  | — |  |  | — |  |  | — |  |  | 426 |
Non-insurance warranty expense | 386 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 386 |
Other insurance related expenses | 89 |  |  | 156 |  |  | 20 |  |  | 29 |  |  | 1 |  |  | (1) |  |  | 294 |
Other expenses | 13 |  |  | 11 |  |  | 6 |  |  | (1) |  |  | 51 |  |  | (2) |  |  | 78 |
Total claims, benefits and expenses | 1,145 |  |  | 1,168 |  |  | 267 |  |  | 371 |  |  | 62 |  |  | (3) |  |  | 3,010 |
Core income (loss) before income tax | 227 |  |  | 167 |  |  | 54 |  |  | (43) |  |  | (41) |  |  | — |  |  | 364 |
Income tax (expense) benefit on core income (loss) | (49) |  |  | (34) |  |  | (14) |  |  | 14 |  |  | 8 |  |  | — |  |  | (75) |
Core income (loss) | $ | 178 |  |  | $ | 133 |  |  | $ | 40 |  |  | $ | (29) |  |  | $ | (33) |  |  | $ | — |  |  | 289 |
Net investment gains (losses) |  |  |  |  |  |  |  |  |  |  |  |  | (38) |
Income tax (expense) benefit on net investment gains (losses) |  |  |  |  |  |  |  |  |  |  |  |  | 7 |
Net investment gains (losses), after tax |  |  |  |  |  |  |  |  |  |  |  |  | (31) |
Net income (loss) |  |  |  |  |  |  |  |  |  |  |  |  | $ | 258 |
Three months ended September 30, 2022 | Specialty |  | Commercial |  | International |  | Life & Group (1) |  | Corporate & Other |  |  |  |
(In millions) |  |  |  |  | Eliminations |  | Total (1)
Operating revenues |  |  |  |  |  |  |  |  |  |  |  |  |
Net earned premiums | $ | 810 |  |  | $ | 1,023 |  |  | $ | 270 |  |  | $ | 118 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,221 |
Net investment income | 102 |  |  | 112 |  |  | 16 |  |  | 187 |  |  | 5 |  |  | — |  |  | 422 |
Non-insurance warranty revenue | 399 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 399 |
Other revenues | (1) |  |  | 13 |  |  | — |  |  | — |  |  | 1 |  |  | (2) |  |  | 11 |
Total operating revenues | 1,310 |  |  | 1,148 |  |  | 286 |  |  | 305 |  |  | 6 |  |  | (2) |  |  | 3,053 |
Claims, benefits and expenses |  |  |  |  |  |  |  |  |  |  |  |  |
Net incurred claims and benefits | 459 |  |  | 733 |  |  | 169 |  |  | 525 |  |  | (13) |  |  | — |  |  | 1,873 |
Policyholders’ dividends | 2 |  |  | 5 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 7 |
Amortization of deferred acquisition costs | 169 |  |  | 163 |  |  | 51 |  |  | — |  |  | — |  |  | — |  |  | 383 |
Non-insurance warranty expense | 371 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 371 |
Other insurance related expenses | 88 |  |  | 145 |  |  | 35 |  |  | 29 |  |  | 1 |  |  | (1) |  |  | 297 |
Other expenses | 15 |  |  | 3 |  |  | 11 |  |  | 2 |  |  | 47 |  |  | (1) |  |  | 77 |
Total claims, benefits and expenses | 1,104 |  |  | 1,049 |  |  | 266 |  |  | 556 |  |  | 35 |  |  | (2) |  |  | 3,008 |
Core income (loss) before income tax | 206 |  |  | 99 |  |  | 20 |  |  | (251) |  |  | (29) |  |  | — |  |  | 45 |
Income tax (expense) benefit on core income (loss) | (45) |  |  | (19) |  |  | (1) |  |  | 59 |  |  | 4 |  |  | — |  |  | (2) |
Core income (loss) | $ | 161 |  |  | $ | 80 |  |  | $ | 19 |  |  | $ | (192) |  |  | $ | (25) |  |  | $ | — |  |  | 43 |
Net investment gains (losses) |  |  |  |  |  |  |  |  |  |  |  |  | (96) |
Income tax (expense) benefit on net investment gains (losses) |  |  |  |  |  |  |  |  |  |  |  |  | 11 |
Net investment gains (losses), after tax |  |  |  |  |  |  |  |  |  |  |  |  | (85) |
Net income (loss) |  |  |  |  |  |  |  |  |  |  |  |  | $ | (42) |
(1) As of January 1, 2023, the Company adopted ASU 2018-12 using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Condensed Consolidated Financial Statements for additional information.
Nine months ended September 30, 2023 | Specialty |  | Commercial |  | International |  | Life & Group |  | Corporate & Other |  |  |  |
(In millions) |  |  |  |  | Eliminations |  | Total
Operating revenues |  |  |  |  |  |  |  |  |  |  |  |  |
Net earned premiums | $ | 2,438 |  |  | $ | 3,336 |  |  | $ | 888 |  |  | $ | 340 |  |  | $ | — |  |  | $ | (1) |  |  | $ | 7,001 |
Net investment income | 407 |  |  | 470 |  |  | 74 |  |  | 659 |  |  | 43 |  |  | — |  |  | 1,653 |
Non-insurance warranty revenue | 1,221 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,221 |
Other revenues | — |  |  | 22 |  |  | — |  |  | — |  |  | 7 |  |  | (7) |  |  | 22 |
Total operating revenues | 4,066 |  |  | 3,828 |  |  | 962 |  |  | 999 |  |  | 50 |  |  | (8) |  |  | 9,897 |
Claims, benefits and expenses |  |  |  |  |  |  |  |  |  |  |  |  |
Net incurred claims and benefits | 1,419 |  |  | 2,235 |  |  | 552 |  |  | 998 |  |  | 32 |  |  | — |  |  | 5,236 |
Policyholders’ dividends | 5 |  |  | 17 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 22 |
Amortization of deferred acquisition costs | 508 |  |  | 532 |  |  | 168 |  |  | — |  |  | — |  |  | — |  |  | 1,208 |
Non-insurance warranty expense | 1,154 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,154 |
Other insurance related expenses | 269 |  |  | 456 |  |  | 102 |  |  | 89 |  |  | 2 |  |  | (1) |  |  | 917 |
Other expenses | 39 |  |  | 27 |  |  | 2 |  |  | — |  |  | 136 |  |  | (7) |  |  | 197 |
Total claims, benefits and expenses | 3,394 |  |  | 3,267 |  |  | 824 |  |  | 1,087 |  |  | 170 |  |  | (8) |  |  | 8,734 |
Core income (loss) before income tax | 672 |  |  | 561 |  |  | 138 |  |  | (88) |  |  | (120) |  |  | — |  |  | 1,163 |
Income tax (expense) benefit on core income (loss) | (146) |  |  | (118) |  |  | (36) |  |  | 36 |  |  | 23 |  |  | — |  |  | (241) |
Core income (loss) | $ | 526 |  |  | $ | 443 |  |  | $ | 102 |  |  | $ | (52) |  |  | $ | (97) |  |  | $ | — |  |  | 922 |
Net investment gains (losses) |  |  |  |  |  |  |  |  |  |  |  |  | (105) |
Income tax (expense) benefit on net investment gains (losses) |  |  |  |  |  |  |  |  |  |  |  |  | 21 |
Net investment gains (losses), after tax |  |  |  |  |  |  |  |  |  |  |  |  | (84) |
Net income (loss) |  |  |  |  |  |  |  |  |  |  |  |  | $ | 838 |
September 30, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |
(In millions) |  |  |  |  |  |  |  |  |  |  |  |  |
Reinsurance receivables | $ | 1,384 |  |  | $ | 1,217 |  |  | $ | 455 |  |  | $ | 97 |  |  | $ | 2,316 |  |  | $ | — |  |  | $ | 5,469 |
Insurance receivables | 1,010 |  |  | 1,880 |  |  | 346 |  |  | 4 |  |  | — |  |  | — |  |  | 3,240 |
Deferred acquisition costs | 398 |  |  | 358 |  |  | 124 |  |  | — |  |  | — |  |  | — |  |  | 880 |
Goodwill | 117 |  |  | — |  |  | 28 |  |  | — |  |  | — |  |  | — |  |  | 145 |
Deferred non-insurance warranty acquisition expense | 3,688 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3,688 |
Insurance reserves |  |  |  |  |  |  |  |  |  |  |  |  |
Claim and claim adjustment expenses | 7,090 |  |  | 9,902 |  |  | 2,572 |  |  | 649 |  |  | 2,623 |  |  | — |  |  | 22,836 |
Unearned premiums | 3,202 |  |  | 2,764 |  |  | 717 |  |  | 106 |  |  | — |  |  | — |  |  | 6,789 |
Future policy benefits | — |  |  | — |  |  | — |  |  | 12,654 |  |  | — |  |  | — |  |  | 12,654 |
Deferred non-insurance warranty revenue | 4,736 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 4,736 |
Nine months ended September 30, 2022 | Specialty |  | Commercial |  | International |  | Life & Group (1) |  | Corporate & Other |  |  |  |
(In millions) |  |  |  |  | Eliminations |  | Total (1)
Operating revenues |  |  |  |  |  |  |  |  |  |  |  |  |
Net earned premiums | $ | 2,376 |  |  | $ | 2,901 |  |  | $ | 803 |  |  | $ | 356 |  |  | $ | (1) |  |  | $ | — |  |  | $ | 6,435 |
Net investment income | 305 |  |  | 343 |  |  | 44 |  |  | 600 |  |  | 10 |  |  | — |  |  | 1,302 |
Non-insurance warranty revenue | 1,173 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,173 |
Other revenues | — |  |  | 25 |  |  | — |  |  | — |  |  | 4 |  |  | (5) |  |  | 24 |
Total operating revenues | 3,854 |  |  | 3,269 |  |  | 847 |  |  | 956 |  |  | 13 |  |  | (5) |  |  | 8,934 |
Claims, benefits and expenses |  |  |  |  |  |  |  |  |  |  |  |  |
Net incurred claims and benefits | 1,360 |  |  | 1,916 |  |  | 487 |  |  | 1,140 |  |  | 36 |  |  | — |  |  | 4,939 |
Policyholders’ dividends | 5 |  |  | 15 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 20 |
Amortization of deferred acquisition costs | 488 |  |  | 467 |  |  | 146 |  |  | — |  |  | — |  |  | — |  |  | 1,101 |
Non-insurance warranty expense | 1,092 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,092 |
Other insurance related expenses | 250 |  |  | 409 |  |  | 112 |  |  | 89 |  |  | 4 |  |  | (1) |  |  | 863 |
Other expenses | 40 |  |  | 21 |  |  | 25 |  |  | 7 |  |  | 133 |  |  | (4) |  |  | 222 |
Total claims, benefits and expenses | 3,235 |  |  | 2,828 |  |  | 770 |  |  | 1,236 |  |  | 173 |  |  | (5) |  |  | 8,237 |
Core income (loss) before income tax | 619 |  |  | 441 |  |  | 77 |  |  | (280) |  |  | (160) |  |  | — |  |  | 697 |
Income tax (expense) benefit on core income (loss) | (134) |  |  | (91) |  |  | (14) |  |  | 84 |  |  | 29 |  |  | — |  |  | (126) |
Core income (loss) | $ | 485 |  |  | $ | 350 |  |  | $ | 63 |  |  | $ | (196) |  |  | $ | (131) |  |  | $ | — |  |  | 571 |
Net investment gains (losses) |  |  |  |  |  |  |  |  |  |  |  |  | (166) |
Income tax (expense) benefit on net investment gains (losses) |  |  |  |  |  |  |  |  |  |  |  |  | 38 |
Net investment gains (losses), after tax |  |  |  |  |  |  |  |  |  |  |  |  | (128) |
Net income (loss) |  |  |  |  |  |  |  |  |  |  |  |  | $ | 443 |
December 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |
(In millions) |  |  |  |  |  |  |  |  |  |  |  |  |
Reinsurance receivables | $ | 1,384 |  |  | $ | 1,062 |  |  | $ | 414 |  |  | $ | 101 |  |  | $ | 2,477 |  |  | $ | — |  |  | $ | 5,438 |
Insurance receivables | 1,082 |  |  | 1,728 |  |  | 369 |  |  | 8 |  |  | — |  |  | — |  |  | 3,187 |
Deferred acquisition costs | 381 |  |  | 321 |  |  | 104 |  |  | — |  |  | — |  |  | — |  |  | 806 |
Goodwill | 117 |  |  | — |  |  | 27 |  |  | — |  |  | — |  |  | — |  |  | 144 |
Deferred non-insurance warranty acquisition expense | 3,671 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3,671 |
Insurance reserves |  |  |  |  |  |  |  |  |  |  |  |  |
Claim and claim adjustment expenses | 6,878 |  |  | 9,395 |  |  | 2,403 |  |  | 695 |  |  | 2,749 |  |  | — |  |  | 22,120 |
Unearned premiums | 3,193 |  |  | 2,425 |  |  | 653 |  |  | 103 |  |  | — |  |  | — |  |  | 6,374 |
Future policy benefits | — |  |  | — |  |  | — |  |  | 13,480 |  |  | — |  |  | — |  |  | 13,480 |
Deferred non-insurance warranty revenue | 4,714 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 4,714 |
(1) As of January 1, 2023, the Company adopted ASU 2018-12 using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Condensed Consolidated Financial Statements for additional information.
Revenues by line of business | The following table presents operating revenues by line of business for each reportable segment.
Periods ended September 30 | Three Months |  | Nine Months
(In millions) | 2023 |  | 2022 |  | 2023 |  | 2022
Specialty |  |  |  |  |  |  |
Management & Professional Liability | $ | 723 |  |  | $ | 688 |  |  | $ | 2,146 |  |  | $ | 2,041 |
Surety | 189 |  |  | 171 |  |  | 540 |  |  | 481 |
Warranty & Alternative Risks | 460 |  |  | 451 |  |  | 1,380 |  |  | 1,332 |
Specialty revenues | 1,372 |  |  | 1,310 |  |  | 4,066 |  |  | 3,854 |
Commercial |  |  |  |  |  |  |
Middle Market | 437 |  |  | 397 |  |  | 1,254 |  |  | 1,133 |
Construction | 444 |  |  | 372 |  |  | 1,249 |  |  | 1,046 |
Small Business | 160 |  |  | 149 |  |  | 470 |  |  | 430 |
Other Commercial | 294 |  |  | 230 |  |  | 855 |  |  | 660 |
Commercial revenues | 1,335 |  |  | 1,148 |  |  | 3,828 |  |  | 3,269 |
International |  |  |  |  |  |  |
Canada | 98 |  |  | 93 |  |  | 287 |  |  | 272 |
Europe | 139 |  |  | 112 |  |  | 401 |  |  | 350 |
Hardy | 84 |  |  | 81 |  |  | 274 |  |  | 225 |
International revenues | 321 |  |  | 286 |  |  | 962 |  |  | 847 |
Life & Group revenues | 328 |  |  | 305 |  |  | 999 |  |  | 956 |
Corporate & Other revenues | 21 |  |  | 6 |  |  | 50 |  |  | 13 |
Eliminations | (3) |  |  | (2) |  |  | (8) |  |  | (5) |
Total operating revenues | 3,374 |  |  | 3,053 |  |  | 9,897 |  |  | 8,934 |
Net investment gains (losses) | (38) |  |  | (96) |  |  | (105) |  |  | (166) |
Total revenues | $ | 3,336 |  |  | $ | 2,957 |  |  | $ | 9,792 |  |  | $ | 8,768 |

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