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Segment Information
 6 Months Ended
Jun. 30, 2014
Segment Reporting [Abstract]  
Segment Information
Segment Information
The disaggregated results of our three operating segments are used by senior management to manage our operations. These segments are evaluated based on the following:
•
Our Standard Insurance Operations segment and our E&S Insurance Operations segment are evaluated based on statutory underwriting results (net premiums earned, incurred loss and loss expenses, policyholders dividends, policy acquisition costs, and other underwriting expenses), and statutory combined ratios; and
•
Our Investments segment is evaluated based on after-tax net investment income and net realized gains and losses.

In computing the results of each segment, we do not make adjustments for interest expense or net general corporate expenses. While we do not fully allocate taxes to all segments, we do allocate taxes to our Investments segment as we manage that segment on after-tax results. We do not maintain separate investment portfolios for the segments and therefore, do not allocate assets to the segments.

In the first quarter of 2014, we sold the renewal rights to our $38 million self-insured group, or "SIG," book of business within the Standard Insurance Operations segment. We decided to opportunistically sell this very small and specialized book of pooled business as a significant portion of the business was produced outside of our standard lines footprint, and proved difficult to grow. As this was a renewal rights sale, we will continue to service policies that were in force at the date of the sale. We continue to remain active in the municipal and public school marketplace for individual risks that procure traditional insurance programs rather than pooling arrangements. The proceeds from this sale, which amounted to $8 million, are included in "Miscellaneous income" within the table below as a component of the Standard Insurance Operations revenue.

The following summaries present revenues from continuing operations (net investment income and net realized gains on investments in the case of the Investments segment) and pre-tax income from continuing operations for the individual segments:
Revenue by Segment
 
Quarter ended June 30,
 
Six Months ended June 30,
($ in thousands)
 
2014
 
2013
 
2014
 
2013
Standard Insurance Operations:
 
 

 
 

 
 
 
 
Net premiums earned:
 
 

 
 

 
 
 
 
Commercial automobile
 
$
83,472

 
76,706

 
165,688

 
151,053

Workers compensation
 
68,992

 
64,855

 
138,405

 
130,939

General liability
 
111,591

 
99,766

 
220,409

 
197,469

Commercial property
 
61,226

 
54,937

 
121,412

 
108,352

Businessowners’ policies
 
21,279

 
18,625

 
42,148

 
37,165

Bonds
 
4,734

 
4,775

 
9,490

 
9,539

Other
 
3,213

 
2,993

 
6,396

 
5,985

Total Standard Commercial Lines
 
354,507

 
322,657

 
703,948

 
640,502

Personal automobile
 
38,022

 
38,526

 
76,248

 
76,919

Homeowners
 
33,576

 
31,702

 
66,874

 
62,837

Other
 
2,946

 
3,320

 
6,240

 
6,828

Total Standard Personal Lines
 
74,544

 
73,548

 
149,362

 
146,584

Total Standard Insurance Operations net premiums earned
 
429,051

 
396,205

 
853,310

 
787,086

Miscellaneous income
 
1,908

 
3,528

 
11,727

 
6,248

Total Standard Insurance Operations revenue
 
430,959

 
399,733

 
865,037

 
793,334

E&S Insurance Operations:
 
 
 
 
 
 
 
 
Net premiums earned
 
34,574

 
30,047

 
66,810

 
60,106

Investments:
 
 

 
 

 
 

 
 

Net investment income
 
36,774

 
34,003

 
72,308

 
66,873

Net realized investment gains
 
4,539

 
5,154

 
11,757

 
8,509

Total investment revenues
 
41,313

 
39,157

 
84,065

 
75,382

Total all segments
 
506,846

 
468,937

 
1,015,912

 
928,822

Other income
 
3

 
8

 
8

 
72

Total revenues from continuing operations
 
$
506,849

 
468,945

 
1,015,920

 
928,894

 
Income from Continuing Operations before Federal Income Tax
 
Quarter ended June 30,
 
Six Months ended June 30,
($ in thousands)
 
2014
 
2013
 
2014
 
2013
Standard Insurance Operations:
 
 

 
 

 
 
 
 
Commercial Lines underwriting gain
 
$
15,703

 
9,743

 
$
12,073

 
15,845

Personal Lines underwriting (loss) gain
 
(5,582
)
 
(2,975
)
 
(7,942
)
 
2,998

Total Standard Insurance Operations underwriting gain, before federal income tax
 
10,121

 
6,768

 
4,131

 
18,843

GAAP combined ratio
 
97.6
%
 
98.3

 
99.5
%
 
97.6

Statutory combined ratio
 
97.3
%
 
97.0

 
99.2
%
 
96.9

 
 
 
 
 
 
 
 
 
E&S Insurance Operations:
 
 
 
 
 
 
 
 
Underwriting (loss) gain
 
(37
)
 
(2,285
)
 
938

 
(2,199
)
GAAP combined ratio
 
100.1
%
 
107.6

 
98.6
%
 
103.7

Statutory combined ratio
 
99.9
%
 
106.8

 
98.8
%
 
102.6

 
 
 
 
 
 
 
 
 
Investments:
 
 

 
 

 
 
 
 
Net investment income
 
36,774

 
34,003

 
72,308

 
66,873

Net realized investment gains
 
4,539

 
5,154

 
11,757

 
8,509

Total investment income, before federal income tax
 
41,313

 
39,157

 
84,065

 
75,382

Tax on investment income
 
10,941

 
10,107

 
22,516

 
19,312

      Total investment income, after federal income tax

30,372


29,050

 
61,549

 
56,070


Reconciliation of Segment Results to Income from Continuing Operations,
before Federal Income Tax
 
Quarter ended June 30,
 
Six Months ended June 30,
($ in thousands)
 
2014
 
2013
 
2014
 
2013
Standard Insurance Operations underwriting gain, before federal income tax
 
$
10,121

 
6,768

 
$
4,131

 
18,843

E&S Insurance Operations underwriting (loss) gain, before federal income tax
 
(37
)
 
(2,285
)
 
938

 
(2,199
)
Investment income, before federal income tax
 
41,313

 
39,157

 
84,065

 
75,382

Total all segments
 
51,397

 
43,640

 
89,134

 
92,026

Interest expense
 
(5,425
)
 
(5,570
)
 
(10,986
)
 
(11,401
)
General corporate and other expenses
 
(6,451
)
 
(1,869
)
 
(13,543
)
 
(15,556
)
Income from continuing operations, before federal income tax
 
$
39,521

 
36,201


$
64,605

 
65,069