Segments Information

12 Months Ended

Dec. 31, 2013

Segment Reporting [Abstract]

Segments Information

(13)  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 has been in runoff since the transfer of the ongoing reinsurance assumed 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, certain 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
	2013			2012			2011
	(in millions)
Revenues
Property and casualty insurance
Premiums earned
Personal insurance	$	4,214		$	4,024		$	3,917
Commercial insurance		5,237			5,144			4,945
Specialty insurance		2,618			2,666			2,769
Total insurance		12,069			11,834			11,631
Reinsurance assumed		(3	)		4			13
		12,066			11,838			11,644
Investment income		1,436			1,518			1,598
Total property and casualty insurance		13,502			13,356			13,242
Corporate and other		43			46			55
Realized investment gains, net		402			193			288
Total revenues	$	13,947		$	13,595		$	13,585
Income (loss) before income tax
Property and casualty insurance
Underwriting
Personal insurance	$	509		$	192		$	47
Commercial insurance		692			44			1
Specialty insurance		406			262			427
Total insurance		1,607			498			475
Reinsurance assumed		9			47			36
		1,616			545			511
Increase in deferred policy acquisition costs		59			3			63
Underwriting income		1,675			548			574
Investment income		1,391			1,482			1,562
Other income		6			10			21
Total property and casualty insurance		3,072			2,040			2,157
Corporate and other		(237	)		(237	)		(246	)
Realized investment gains, net		402			193			288
Total income before income tax	$	3,237		$	1,996		$	2,199

	December 31
	2013			2012			2011
	(in millions)
Assets
Property and casualty insurance	$	48,278		$	49,441		$	48,017
Corporate and other		2,248			2,830			2,513
Adjustments and eliminations		(93	)		(87	)		(85	)
Total assets	$	50,433		$	52,184		$	50,445

The international business of the property and casualty insurance segments 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 a U.S. subsidiary.

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

	Years Ended December 31
	2013		2012		2011
	(in millions)
Revenues
United States	$	10,205	$	9,996	$	9,831
International		3,297		3,360		3,411
Total	$	13,502	$	13,356	$	13,242