Segments Information

12 Months Ended

Dec. 31, 2011

Segments Information [Abstract]

Segments Information

(14) Segments Information

The principal business of the Corporation is the sale of property and casualty insurance. The profitability of the property and casualty insurance business depends on the results of both underwriting operations and investments, which are viewed as two distinct operations. The underwriting operations are managed and evaluated separately from the investment function.

The P&C Group underwrites most lines of property and casualty insurance. Underwriting operations consist of four separate business units: personal insurance, commercial insurance, specialty insurance and reinsurance assumed. The personal segment targets the personal insurance market. The personal classes include automobile, homeowners and other personal coverages. The commercial segment includes those classes of business that are generally available in broad markets and are of a more commodity nature. Commercial classes include multiple peril, casualty, workers’ compensation and property and marine. The specialty segment includes those classes of business that are available in more limited markets since they require specialized underwriting and claim settlement. Specialty classes include professional liability coverages and surety. The reinsurance assumed business is in runoff following the transfer of the ongoing business to a reinsurance company in 2005.

Corporate and other includes investment income earned on corporate invested assets, corporate expenses and the results of the Corporation’s non-insurance subsidiaries.

Performance of the property and casualty underwriting segments is measured based on statutory underwriting results. Statutory underwriting profit is arrived at by reducing premiums earned by losses and loss expenses incurred and statutory underwriting expenses incurred. Under statutory accounting principles applicable to property and casualty insurance companies, policy acquisition and other underwriting expenses are recognized immediately, not at the time premiums are earned.

Management uses underwriting results determined in accordance with GAAP to assess the overall performance of the underwriting operations. Underwriting income determined in accordance with GAAP is defined as premiums earned less losses and loss expenses incurred and GAAP underwriting expenses incurred. To convert statutory underwriting results to a GAAP basis, policy acquisition expenses are deferred and amortized over the period in which the related premiums are earned.

Investment income performance is measured based on investment income net of investment expenses, excluding realized investment gains and losses.

Distinct investment portfolios are not maintained for each underwriting segment. Property and casualty invested assets are available for payment of losses and expenses for all classes of business. Therefore, such assets and the related investment income are not allocated to underwriting segments.

Revenues, income before income tax and assets of each operating segment were as follows:

	Years Ended December 31
	2011			2010			2009
	(in millions)
Revenues
Property and casualty insurance
Premiums earned
Personal insurance	$	3,917		$	3,768		$	3,692
Commercial insurance		4,945			4,647			4,762
Specialty insurance		2,769			2,787			2,829
Total insurance		11,631			11,202			11,283
Reinsurance assumed		13			13			48
		11,644			11,215			11,331
Investment income		1,598			1,590			1,585
Other revenues		—			—			2
Total property and casualty insurance		13,242			12,805			12,918
Corporate and other		55			88			75
Realized investment gains, net		288			426			23
Total revenues	$	13,585		$	13,319		$	13,016
Income (loss) before income tax
Property and casualty insurance
Underwriting
Personal insurance	$	47		$	303		$	600
Commercial insurance		1			347			510
Specialty insurance		427			512			474
Total insurance		475			1,162			1,584
Reinsurance assumed		36			30			74
		511			1,192			1,658
Increase (decrease) in deferred policy acquisition costs		63			30			(27	)
Underwriting income		574			1,222			1,631
Investment income		1,562			1,558			1,549
Other income (charges)		21			2			(3	)
Total property and casualty insurance		2,157			2,782			3,177
Corporate and other loss		(246	)		(220	)		(238	)
Realized investment gains, net		288			426			23
Total income before income tax	$	2,199		$	2,988		$	2,962

	December 31
	2011			2010			2009
	(in millions)
Assets
Property and casualty insurance	$	48,435		$	47,838		$	47,682
Corporate and other		2,513			2,483			2,876
Adjustments and eliminations		(83	)		(72	)		(109	)
Total assets	$	50,865		$	50,249		$	50,449

The international business of the property and casualty insurance segment is conducted primarily through subsidiaries that operate solely outside of the United States. Their assets and liabilities are located principally in the countries where the insurance risks are written. International business is also written by branch offices of certain domestic subsidiaries.

Revenues of the P&C Group by geographic area were as follows:

	Years Ended December 31
	2011		2010		2009
	(in millions)
Revenues
United States	$	9,729	$	9,642	$	9,991
International		3,513		3,163		2,927
Total	$	13,242	$	12,805	$	12,918