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Segment Information
 3 Months Ended
Mar. 31, 2012
Segment Information [Abstract]  
Segment Information

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.

 

Our Insurance Operations segment has historically reflected the results of our standard market insurance products. In 2011, through our acquisition activities, we began writing E&S business. This business has not met the quantitative thresholds for individual segment reporting, as our E&S operations share various economic, regulatory, and production-related characteristics with our standard market insurance products, we have aggregated their results into our Insurance Operations segment.

 

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.

 

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

 

         

Revenue by Segment

 

Quarter ended

 

 

March 31,

($ in thousands)

 

2012

 

2011

Insurance Operations:

 

 

 

 

  Net premiums earned:

 

 

 

 

    Commercial automobile

$

70,484 

 

69,670 

    Workers compensation

 

65,811 

 

62,526 

    General liability

 

90,143 

 

82,566 

    Commercial property

 

49,371 

 

48,193 

    Business owners' policies

 

16,857 

 

16,485 

    Bonds

 

4,663 

 

4,767 

    Other

 

12,891 

 

2,556 

    Total commercial lines

 

310,220 

 

286,763 

    Personal automobile

 

37,456 

 

36,962 

    Homeowners

 

27,958 

 

24,555 

    Other

 

3,195 

 

3,063 

    Total personal lines

 

68,609 

 

64,580 

    Total net premiums earned

 

378,829 

 

351,343 

    Miscellaneous income

 

3,457 

 

2,770 

    Total Insurance Operations revenues

 

382,286 

 

354,113 

Investments:

 

 

 

 

    Net investment income

 

32,628 

 

43,473 

    Net realized gain on investments

 

4,358 

 

5,760 

    Total investment revenues

 

36,986 

 

49,233 

Total all segments

 

419,272 

 

403,346 

   Other income

 

76 

 

110 

Total revenues

$

419,348 

 

403,456 

 

         

Income Before Federal Income Tax

 

Quarter ended

 

 

March 31,

($ in thousands)

 

2012

 

2011

Insurance Operations:

 

 

 

 

    Commercial lines underwriting

$

(4,484)

 

(6,192)

    Personal lines underwriting

 

3,121 

 

(6,506)

    Underwriting loss, before federal income tax

 

(1,363)

 

(12,698)

     GAAP combined ratio

 

100.4 

%

103.6 

     Statutory combined ratio

 

99.1 

%

102.6 

Investments:

 

 

 

 

    Net investment income

$

32,628

 

43,473 

    Net realized gain on investments

 

4,358 

 

5,760 

    Total investment income, before federal income tax

 

36,986 

 

49,233 

Total all segments

 

35,623 

 

36,535 

    Interest expense

 

(4,700)

 

(4,557)

    General corporate and other expenses

 

(7,732)

 

(5,820)

 

 

 

 

 

Income before federal income tax

$

23,191

 

26,158