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Segment Information | 12 Months Ended
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Dec. 31, 2014
Segment Reporting [Abstract] |
Segment Information | Segment Information We classify our business into four reportable segments:
• | Standard Commercial Lines - comprised of insurance products and services provided in the standard marketplace to our commercial customers, who are typically businesses, non-profit organizations, and local government agencies.
• | Standard Personal Lines - comprised of insurance products and services, including flood insurance coverage, provided primarily to individuals acquiring coverage in the standard marketplace.
• | E&S Lines - comprised of insurance products and services provided to customers who have not obtained coverage in the standard marketplace.
• | Investments - invests the premiums collected by our Standard Commercial Lines, Standard Personal Lines, and E&S Lines, as well as amounts generated through our capital management strategies, which may include the issuance of debt and equity securities.
We revised our reporting segments to the above in 2014 because:
• | The revised segments reflect the way we currently manage our business and allocate resources and therefore, our previously-reported segment of "Standard Insurance Operations" is now "Standard Commercial Lines" and "Standard Personal Lines." Historically, we focused our service model predominantly on our distribution partners. We now focus our customer service model on our policyholders, the servicing of which is shared by us and our distribution partners. This change in focus not only heightens awareness of our brand with our distribution partners, but it increases our brand recognition with our policyholders.
• | We implemented changes related to our field model as we realigned the responsibilities of certain management positions and their related field employees. This realignment included redeploying certain field employees to focus solely on Standard Personal Lines marketing, instead of sharing responsibilities between both Standard Personal Lines and Standard Commercial Lines business. Our Agency Management Specialists continue to be a central focus of our field model, with responsibility for managing the growth and profitability of their territories and underwriting new Standard Commercial Lines accounts.
• | We are in the process of implementing organizational changes that realign executive leadership roles over Standard Personal Lines and Standard Commercial Lines.
We remain an account underwriter within Standard Commercial Lines and Standard Personal Lines, as evidenced by the fact that we do not actively market certain mono-line business, such as workers compensation and homeowners coverages. Our E&S Lines remain a separate segment as their customers and distribution channel have different characteristics than that of our Standard Commercial Lines and Standard Personal Lines. In addition, our Investment segment continues to be managed separately and distinctly from our insurance segments, therefore it continues to meet the definition of a segment for us. All prior year information contained in this Form 10-K has been restated to reflect our revised segments. The disaggregated results of our four segments are used by senior management to manage our operations. These segments are evaluated as follows:
• | Standard Commercial Lines, Standard Personal Lines, and our E&S Lines are 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
• | Our Investments segment is evaluated based on after-tax net investment income and net realized gains and losses.
Our combined insurance segments are subject to certain geographic concentrations, particularly in the Northeast and Mid-Atlantic regions of the country. In 2014, approximately 23% of net premiums written were related to insurance policies written in New Jersey. The goodwill balance of $7.8 million at both December 31, 2014 and 2013 relates to our Standard Commercial Lines reporting unit. In computing the results of each segment, we do not make adjustments for interest expense or net general corporate expenses. While we do not fully allocate taxes to all segments, we do allocate taxes to our investments segment as we manage that segment on after-tax results. We do not maintain separate investment portfolios for the segments and therefore, do not allocate assets to the segments. The following summaries present revenues from continuing operations (net investment income and net realized gains on investments in the case of the Investments segment) and pre-tax income from continuing operations for the individual segments:
Revenue by Segment |  |  |  |  |  |
Years ended December 31, |  |  |  |  |  |
($ in thousands) |  | 2014 |  | 2013 |  | 2012
Standard Commercial Lines: |  |  |  |  |  |  |  |  |
Net premiums earned: |  |  |  |  |  |  |  |  |
Commercial automobile |  | $ | 333,310 |  |  | 310,994 |  |  | 288,010 |
Workers compensation |  | 274,585 |  |  | 267,612 |  |  | 262,108 |
General liability |  | 444,938 |  |  | 405,322 |  |  | 373,381 |
Commercial property |  | 244,792 |  |  | 224,412 |  |  | 202,340 |
Businessowners’ policies |  | 85,788 |  |  | 77,097 |  |  | 68,462 |
Bonds |  | 19,288 |  |  | 19,000 |  |  | 18,891 |
Other |  | 13,011 |  |  | 12,182 |  |  | 12,143 |
Miscellaneous income |  | 14,747 |  |  | 10,253 |  |  | 7,003 |
Total Standard Commercial Lines revenue |  | 1,430,459 |  |  | 1,326,872 |  |  | 1,232,338 |
Standard Personal Lines: |  |  |  |  |  |
Net premiums earned: |  |  |  |  |  |
Personal automobile |  | 151,317 |  |  | 152,005 |  |  | 152,142 |
Homeowners |  | 134,273 |  |  | 127,991 |  |  | 113,850 |
Other |  | 11,157 |  |  | 14,336 |  |  | 13,563 |
Miscellaneous income |  | 1,834 |  |  | 1,948 |  |  | 1,824 |
Total Standard Personal Lines revenue |  | 298,581 |  |  | 296,280 |  |  | 281,379 |
E&S Lines: |  |  |  |  |  |
Net premiums earned: |  |  |  |  |  |
General liability |  | 96,142 |  |  | 88,761 |  |  | 59,721 |
Commercial property |  | 38,572 |  |  | 32,054 |  |  | 17,698 |
Commercial automobile |  | 5,436 |  |  | 4,306 |  |  | 1,810 |
Miscellaneous income |  | 17 |  |  | — |  |  | — |
Total E&S Lines revenue |  | 140,167 |  |  | 125,121 |  |  | 79,229 |
Investments: |  |  |  |  |  |  |  |  |
Net investment income |  | 138,708 |  |  | 134,643 |  |  | 131,877 |
Net realized investment gains |  | 26,599 |  |  | 20,732 |  |  | 8,988 |
Total investment revenues |  | 165,307 |  |  | 155,375 |  |  | 140,865 |
Total all segments |  | 2,034,514 |  |  | 1,903,648 |  |  | 1,733,811 |
Other income |  | 347 |  |  | 93 |  |  | 291 |
Total revenues from continuing operations |  | $ | 2,034,861 |  |  | 1,903,741 |  |  | 1,734,102 |
Income from Continuing Operations before Federal Income Tax |  |  |  |  |  |
Years ended December 31, |  |  |  |  |  |
($ in thousands) |  | 2014 |  | 2013 |  | 2012
Standard Commercial Lines: |  |  |  |  |  |  |  |  |
Underwriting gain (loss), before federal income tax |  | $ | 61,221 |  |  | 33,856 |  |  | (40,935 | )
GAAP combined ratio |  | 95.7 | % |  | 97.4 |  |  | 103.3 |
Statutory combined ratio |  | 95.5 | % |  | 97.1 |  |  | 103.0 |
Standard Personal Lines: |  |  |  |  |  |
Underwriting gain (loss), before federal income tax |  | 16,536 |  |  | 8,645 |  |  | (3,514 | )
GAAP combined ratio |  | 94.4 | % |  | 97.1 | % |  | 101.3 | %
Statutory combined ratio |  | 94.5 | % |  | 96.9 | % |  | 100.7 | %
E&S Lines: |  |  |  |  |  |
Underwriting gain (loss), before federal income tax |  | 386 |  |  | (3,735 | ) |  | (19,558 | )
GAAP combined ratio |  | 99.7 | % |  | 103.0 |  |  | 124.7 |
Statutory combined ratio |  | 99.2 | % |  | 102.9 |  |  | 118.8 |
Investments: |  |  |  |  |  |  |  |  |
Net investment income |  | 138,708 |  |  | 134,643 |  |  | 131,877 |
Net realized investment gains |  | 26,599 |  |  | 20,732 |  |  | 8,988 |
Total investment income, before federal income tax |  | 165,307 |  |  | 155,375 |  |  | 140,865 |
Tax on investment income |  | 43,811 |  |  | 40,489 |  |  | 34,758 |
Total investment income, after federal income tax |  | $ | 121,496 |  |  | 114,886 |  |  | 106,107 |
Reconciliation of Segment Results to Income from Continuing Operations, before Federal Income Tax |  |  |  |  |  |
Years ended December 31, |  |  |  |  |  |
($ in thousands) |  | 2014 |  | 2013 |  | 2012
Underwriting gain (loss), before federal income tax |  |  |  |  |  |
Standard Commercial Lines |  | $ | 61,221 |  |  | 33,856 |  |  | (40,935 | )
Standard Personal Lines |  | 16,536 |  |  | 8,645 |  |  | (3,514 | )
E&S Lines |  | 386 |  |  | (3,735 | ) |  | (19,558 | )
Investment income, before federal income tax |  | 165,307 |  |  | 155,375 |  |  | 140,865 |
Total all segments |  | 243,450 |  |  | 194,141 |  |  | 76,858 |
Interest expense |  | (22,086 | ) |  | (22,538 | ) |  | (18,872 | )
General corporate and other expenses |  | (24,233 | ) |  | (27,801 | ) |  | (20,351 | )
Income from continuing operations, before federal income tax |  | $ | 197,131 |  |  | 143,802 |  |  | 37,635 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8864-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8933-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8844-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8538-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8380-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8984-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9054-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9031-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8971-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8595-108599 + Details
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