XML 47 R20.htm IDEA: XBRL DOCUMENT v3.3.1.900
Segment Information
 12 Months Ended
Dec. 31, 2015
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 insurance operations, as well as amounts generated through our capital management strategies, which may include the issuance of debt and equity securities.

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.

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.

Our combined insurance segments are subject to certain geographic concentrations, particularly in the Northeast and Mid-Atlantic regions of the country. In 2015, approximately 21% of NPW were related to insurance policies written in New Jersey.
 
The goodwill balance of $7.8 million at both December 31, 2015 and 2014 relates to our Standard Commercial Lines reporting unit.
  
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)
 
2015
 
2014
 
2013
Standard Commercial Lines:
 
 

 
 

 
 

Net premiums earned:
 
 

 
 

 
 

Commercial automobile
 
$
358,909

 
333,310

 
310,994

Workers compensation
 
290,075

 
274,585

 
267,612

General liability
 
483,291

 
444,938

 
405,322

Commercial property
 
269,022

 
244,792

 
224,412

Businessowners’ policies
 
93,428

 
85,788

 
77,097

Bonds
 
20,350

 
19,288

 
19,000

Other
 
14,367

 
13,011

 
12,182

Miscellaneous income
 
6,343

 
14,747

 
10,253

Total Standard Commercial Lines revenue
 
1,535,785

 
1,430,459

 
1,326,872

Standard Personal Lines:
 
 
 
 
 
 
Net premiums earned:
 
 
 
 
 
 
Personal automobile
 
146,784

 
151,317

 
152,005

Homeowners
 
134,382

 
134,273

 
127,991

Other
 
6,968

 
11,157

 
14,336

Miscellaneous income
 
1,113

 
1,834

 
1,948

Total Standard Personal Lines revenue
 
289,247

 
298,581

 
296,280

E&S Lines:
 
 
 
 
 
 
Net premiums earned:
 
 
 
 
 
 
General liability
 
121,802

 
96,142

 
88,761

Commercial property
 
42,736

 
38,572

 
32,054

Commercial automobile
 
7,795

 
5,436

 
4,306

Miscellaneous income
 
—

 
17

 
—

Total E&S Lines revenue
 
172,333

 
140,167

 
125,121

Investments:
 
 

 
 

 
 

Net investment income
 
121,316

 
138,708

 
134,643

Net realized investment gains
 
13,171

 
26,599

 
20,732

Total investment revenues
 
134,487

 
165,307

 
155,375

Total all segments
 
2,131,852

 
2,034,514

 
1,903,648

Other income
 
—

 
347

 
93

Total revenues
 
$
2,131,852

 
2,034,861

 
1,903,741



Income from Continuing Operations before Federal Income Tax
 
 
 
 
 
 
Years ended December 31,
 
 
 
 
 
 
($ in thousands)
 
2015
 
2014
 
2013
Standard Commercial Lines:
 
 

 
 

 
 

Underwriting gain, before federal income tax
 
$
164,496

 
61,221

 
33,856

GAAP combined ratio
 
89.2
%
 
95.7
%
 
97.4
%
Statutory combined ratio
 
89.2
%
 
95.5
%
 
97.1
%
 
 
 
 
 
 
 
Standard Personal Lines:
 
 
 
 
 
 
Underwriting gain, before federal income tax
 
1,336

 
16,536

 
8,645

GAAP combined ratio
 
99.5
%
 
94.4
%
 
97.1
%
Statutory combined ratio
 
99.9
%
 
94.5
%
 
96.9
%
 
 
 
 
 
 
 
E&S Lines:
 
 
 
 
 
 
Underwriting (loss) gain, before federal income tax
 
(16,803
)
 
386

 
(3,735
)
GAAP combined ratio
 
109.8
%
 
99.7
%
 
103.0
%
Statutory combined ratio
 
108.4
%
 
99.2
%
 
102.9
%
 
 
 
 
 
 
 
Investments:
 
 

 
 

 
 

Net investment income
 
$
121,316

 
138,708

 
134,643

Net realized investment gains
 
13,171

 
26,599

 
20,732

Total investment income, before federal income tax
 
134,487

 
165,307

 
155,375

Tax on investment income
 
32,090

 
43,811

 
40,489

Total investment income, after federal income tax
 
$
102,397

 
121,496

 
114,886


 
Reconciliation of Segment Results to Income from Continuing Operations, before Federal Income Tax
 
 
 
 
 
 
Years ended December 31,
 
 
 
 
 
 
($ in thousands)
 
2015
 
2014
 
2013
Underwriting gain (loss), before federal income tax
 
 
 
 
 
 
     Standard Commercial Lines
 
$
164,496

 
61,221

 
33,856

     Standard Personal Lines
 
1,336

 
16,536

 
8,645

     E&S Lines
 
(16,803
)
 
386

 
(3,735
)
Investment income, before federal income tax
 
134,487

 
165,307

 
155,375

Total all segments
 
283,516

 
243,450

 
194,141

Interest expense
 
(22,428
)
 
(23,063
)
 
(26,361
)
General corporate and other expenses
 
(28,396
)
 
(23,256
)
 
(23,978
)
Income from continuing operations, before federal income tax
 
$
232,692

 
197,131

 
143,802