Segments Information

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

Segments Information

4) 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 property and casualty insurance subsidiaries underwrite 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.

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

	Periods Ended September 30
	Third Quarter						Nine Months
	2014			2013			2014			2013
	(in millions)
Revenues
Property and casualty insurance
Premiums earned
Personal insurance	$	1,118		$	1,060		$	3,296		$	3,141
Commercial insurance		1,338			1,321			3,943			3,928
Specialty insurance		663			648			1,972			1,959
Total insurance		3,119			3,029			9,211			9,028
Reinsurance assumed		—			(2	)		1			(2	)
		3,119			3,027			9,212			9,026
Investment income		338			352			1,034			1,076
Total property and casualty insurance		3,457			3,379			10,246			10,102
Corporate and other		7			6			25			34
Realized investment gains, net		110			18			351			335
Total revenues	$	3,574		$	3,403		$	10,622		$	10,471
Income (loss) before income tax
Property and casualty insurance
Underwriting
Personal insurance	$	141		$	108		$	188		$	333
Commercial insurance		151			215			333			534
Specialty insurance		133			108			355			299
Total insurance		425			431			876			1,166
Reinsurance assumed		—			—			1			10
		425			431			877			1,176
Increase in deferred policy acquisition costs		14			12			48			69
Underwriting income		439			443			925			1,245
Investment income		327			342			1,004			1,042
Other income (charges)		—			(3	)		(4	)		11
Total property and casualty insurance		766			782			1,925			2,298
Corporate and other		(58	)		(61	)		(177	)		(182	)
Realized investment gains, net		110			18			351			335
Total income before income tax	$	818		$	739		$	2,099		$	2,451