Segment Information

12 Months Ended

Dec. 31, 2019

The disaggregated results of our four reportable segments are used by senior management to manage our operations. These reportable segments are evaluated as follows:


•	Our Standard Commercial Lines, Standard Personal Lines, and E&S Lines are evaluated based on before and after-tax underwriting results (net premiums earned, incurred loss and loss expense, policyholders dividends, policy acquisition costs, and other underwriting expenses), return on equity ("ROE") contribution, and combined ratios.


•	Our Investments segment is evaluated based on after-tax net investment income and its ROE contribution. Also included in our Investment segment results are after-tax net realized and unrealized gains and losses, which are not included in non-GAAP operating income.

In computing the results of each segment, we do not make adjustments for interest expense or corporate expenses. We do not maintain separate investment portfolios for the segments and therefore, do not allocate assets to the segments.

Our combined insurance operations are subject to certain geographic concentrations, particularly in the Eastern region of the country. In 2019, approximately 19% of NPW were related to insurance policies written in New Jersey.

We had a goodwill balance of $7.8 million at both December 31, 2019 and 2018 on our Consolidated Balance Sheet that relates to our Standard Commercial Lines reporting unit.

The following summaries present revenues (net investment income and net realized and unrealized gains and losses on investments in the case of the Investments segment) and pre-tax income for the individual segments:



Revenue by Segment	Years ended December 31,
($ in thousands)	2019		2018		2017
Standard Commercial Lines:
Net premiums earned:
Commercial automobile	$	554,256	493,093		442,818
Workers compensation	311,370		317,616		317,982
General liability	669,895		616,187		569,217
Commercial property	353,834		329,660		311,932
Businessowners’ policies	105,252		103,412		100,266
Bonds	35,726		33,991		29,086
Other	19,281		18,263		17,198
Miscellaneous income	10,889		8,180		9,488
Total Standard Commercial Lines revenue	2,060,503		1,920,402		1,797,987
Standard Personal Lines:
Net premiums earned:
Personal automobile	172,606		168,250		153,147
Homeowners	127,543		128,961		129,699
Other	7,590		7,230		6,855
Miscellaneous income	1,466		1,257		1,228
Total Standard Personal Lines revenue	309,205		305,698		290,929
E&S Lines:
Net premiums earned:
Casualty lines	182,864		164,313		157,366
Property lines	56,954		55,253		55,461
Miscellaneous income	—		1		—
Total E&S Lines revenue	239,818		219,567		212,827
Investments:
Net investment income	222,543		195,336		161,882
Net realized and unrealized investment gains (losses)	14,422		(54,923	)	6,359
Total Investments revenues	236,965		140,413		168,241
Total revenues	$	2,846,491	2,586,080		2,469,984



Income Before and After Federal Income Tax	Years ended December 31,
($ in thousands)	2019			2018		2017
Standard Commercial Lines:
Underwriting gain, before federal income tax	$	145,990		109,104		149,514
Underwriting gain, after federal income tax	115,332			86,192		97,184
Combined ratio	92.9		%	94.3	%	91.6	%
ROE contribution	5.8		%	4.9		6.1

Standard Personal Lines:
Underwriting gain, before federal income tax	8,260			12,764		11,104
Underwriting gain, after federal income tax	6,525			10,084		7,217
Combined ratio	97.3		%	95.8	%	96.2	%
ROE contribution	0.3		%	0.6		0.4

E&S Lines:
Underwriting gain (loss), before federal income tax	9,743			(695	)	(6,282	)
Underwriting gain (loss), after federal income tax	7,697			(549	)	(4,083	)
Combined ratio	95.9		%	100.3	%	103.0	%
ROE contribution	0.4		%	—		(0.3	)

Investments:
Net investment income	$	222,543		195,336		161,882
Net realized and unrealized investment gains (losses)	14,422			(54,923	)	6,359
Total investment segment income, before federal income tax	236,965			140,413		168,241
Tax on investment segment income	45,301			19,560		45,588
Total investment segment income, after federal income tax	$	191,664		120,853		122,653
ROE contribution of after-tax net investment income	9.6		%	6.9		7.5



Reconciliation of Segment Results to Income Before Federal Income Tax	Years ended December 31,
($ in thousands)	2019			2018		2017
Underwriting gain (loss)
Standard Commercial Lines	$	145,990		109,104		149,514
Standard Personal Lines	8,260			12,764		11,104
E&S Lines	9,743			(695	)	(6,282	)
Investment income	236,965			140,413		168,241
Total all segments	400,958			261,586		322,577
Interest expense	(33,668		)	(24,419	)	(24,354	)
Corporate expenses	(30,900		)	(25,446	)	(36,255	)
Income, before federal income tax	$	336,390		211,721		261,968