NOTE 9. Segment Information

We have classified our operations into two segments, the disaggregated results of which are reported to and used by senior management to manage our operations:

Insurance Operations, which is evaluated based on statutory underwriting results (net premiums earned, incurred losses and loss expenses, policyholders dividends, policy acquisition costs, and other underwriting expenses), and statutory combined ratios; and
Investments, which is evaluated based on net investment income and net realized gains and losses.

In computing the results of each segment, we do not make adjustments for interest expense, net general corporate expenses, or federal income taxes. We do not maintain separate investment portfolios for the segments and therefore, do not allocate assets to the segments. In addition, we do not aggregate any of our operating segments.

The following summaries present revenue from continuing operations (net investment income and net realized gain (loss) on investments in the case of the Investments segment) and pre-tax income from continuing operations for the individual segments.


Revenue from Continuing Operations by Segment		Quarter ended		Six Months ended
		June 30,		June 30,
($ in thousands)		2011	2010	2011	2010
Insurance Operations:
Net premiums earned:	$
Commercial automobile		69,198	73,176	138,868	147,492
Workers compensation		63,855	62,069	126,381	126,710
General liability		85,672	83,967	168,238	169,188
Commercial property		47,877	50,294	96,070	100,630
Business owners' policies		16,407	16,152	32,892	32,438
Bonds		4,725	4,828	9,492	9,431
Other		2,561	2,515	5,117	5,020
Total commercial lines		290,295	293,001	577,058	590,909
Personal automobile		37,189	35,243	74,151	69,563
Homeowners		25,060	21,126	49,615	41,619
Other		3,036	2,820	6,099	6,301
Total personal lines		65,285	59,189	129,865	117,483
Total net premiums earned		355,580	352,190	706,923	708,392
Other income		2,388	2,231	5,158	4,497
Total Insurance Operations revenues		357,968	354,421	712,081	712,889
Investments:
Net investment income		39,345	36,545	82,818	71,251
Net realized gain (loss) on investments		2,146	(3,264)	7,906	(3,328)
Total investment revenues		41,491	33,281	90,724	67,923
Total all segments		399,459	387,702	802,805	780,812
Other income		111	16	221	18
Total revenues from continuing operations	$	399,570	387,718	803,026	780,830


Income from Continuing Operations, Before Federal Income Tax		Quarter ended			Six Months ended
		June 30,			June 30,
($ in thousands)		2011		2010	2011		2010
Insurance Operations:
Commercial lines underwriting	$	(22,331)		3,305	(27,165)		(7,667)
Personal lines underwriting		(10,351)		(6,466)	(16,601)		(10,099)
Underwriting loss, before federal income tax		(32,682)		(3,161)	(43,766)		(17,766)
GAAP combined ratio		109.2	%	100.9	106.2	%	102.5
Statutory combined ratio		109.5	%	101.0	106.1	%	101.9
Investments:
Net investment income	$	39,345		36,545	82,818		71,251
Net realized gain (loss) on investments		2,146		(3,264)	7,906		(3,328)
Total investment income, before federal income tax		41,491		33,281	90,724		67,923
Total all segments		8,809		30,120	46,958		50,157
Interest expense		(4,559)		(4,655)	(9,116)		(9,497)
General corporate and other expenses		(3,029)		(2,617)	(8,849)		(10,165)

Income from continuing operations, before federal income tax	$	1,221		22,848	28,993		30,495