Segment Information

3 Months Ended

Mar. 31, 2020

We evaluate the results of our four reportable segments as follows:


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


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

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 do not allocate assets to each segment.

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



Revenue by Segment	Quarter Ended March 31,
($ in thousands)	2020			2019
Standard Commercial Lines:
Net premiums earned:
Commercial automobile	$	149,690		131,186
Workers compensation	66,706			78,715
General liability	164,580			161,525
Commercial property	93,869			86,067
Businessowners’ policies	27,036			26,081
Bonds	9,639			8,904
Other	5,060			4,706
Miscellaneous income	1,391			2,044
Total Standard Commercial Lines revenue	517,971			499,228
Standard Personal Lines:
Net premiums earned:
Personal automobile	42,487			43,163
Homeowners	31,490			32,130
Other	2,151			2,014
Miscellaneous income	434			276
Total Standard Personal Lines revenue	76,562			77,583
E&S Lines:
Net premiums earned:
Casualty lines	44,072			44,528
Property lines	14,923			13,554
Miscellaneous income	—			—
Total E&S Lines revenue	58,995			58,082
Investments:
Net investment income	55,967			50,618
Net realized and unrealized investment (losses) gains	(44,666		)	13,451
Total Investments revenue	11,301			64,069
Total revenues	$	664,829		698,962



Income Before and After Federal Income Tax	Quarter Ended March 31,
($ in thousands)	2020			2019
Standard Commercial Lines:
Underwriting gain, before federal income tax	$	17,126		25,815
Underwriting gain, after federal income tax	13,529			20,394
Combined ratio	96.7		%	94.8
ROE contribution	2.4			4.4

Standard Personal Lines:
Underwriting gain, before federal income tax	$	387		3,167
Underwriting gain, after federal income tax	306			2,502
Combined ratio	99.5		%	95.9
ROE contribution	0.1			0.5

E&S Lines:
Underwriting gain, before federal income tax	$	3,844		4,579
Underwriting gain, after federal income tax	3,037			3,617
Combined ratio	93.5		%	92.1
ROE contribution	0.6			0.8

Investments:
Net investment income	$	55,967		50,618
Net realized and unrealized investment (losses) gains	(44,666		)	13,451
Total investment segment income, before federal income tax	11,301			64,069
Tax on investment segment income	1,104			12,120
Total investment segment income, after federal income tax	$	10,197		51,949
ROE contribution of after-tax net investment income	8.5			8.9



Reconciliation of Segment Results to Income Before Federal Income Tax	Quarter Ended March 31,
($ in thousands)	2020			2019
Underwriting gain
Standard Commercial Lines	$	17,126		25,815
Standard Personal Lines	387			3,167
E&S Lines	3,844			4,579
Investment income	11,301			64,069
Total all segments	32,658			97,630
Interest expense	(7,601		)	(11,526	)
Corporate expenses	(9,060		)	(12,410	)
Income, before federal income tax	$	15,997		73,694