Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

Goodwill

During 2016, the carrying amount of goodwill increased $1.8 million as a result of an exchange transaction ARX entered into with a third party. Pursuant to the exchange, ARX acquired 100% of the equity interest in an insurance subsidiary (and an affiliated company) that writes residential property insurance and disposed of 100% of the equity interest in an insurance subsidiary (and an affiliated company) that writes commercial property insurance. The book values of the entities that were acquired and disposed of were approximately equal at the time of the exchange.

There were no goodwill impairment charges recognized during the years ended December 31, 2016 and 2015. Goodwill recorded at December 31, 2016 and 2015 was $449.4 million and $447.6 million, respectively.

Intangible Assets

The following table is a summary of the net carrying amount of other intangible assets as of December 31, 2016 and 2015:



(millions)	December 31, 2016		December 31, 2015
Intangible assets subject to amortization	$	420.4	$	482.5
Indefinite-lived intangible assets¹	12.4		12.4
Total	$	432.8	$	494.9

¹Indefinite-lived intangible assets are comprised of state insurance and agent licenses.

Intangible assets subject to amortization consisted of the following:



(millions)	December 31, 2016						December 31, 2015
Category	Gross Carrying Amount		Accumulated Amortization¹		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization¹		Net Carrying Amount
Policies in force	$	256.2	$	64.1	$	192.1	$	256.2	$	27.5	$	228.7
Agency relationships	159.2		19.9		139.3		159.2		8.5		150.7
Software rights	79.1		18.8		60.3		79.1		8.2		70.9
Trade name	34.8		6.1		28.7		34.8		2.6		32.2
Total	$	529.3	$	108.9	$	420.4	$	529.3	$	46.8	$	482.5

¹ Total does not include $0.6 million of accumulated amortization related to state insurance licenses previously subject to amortization.

Amortization expense was $62.1 million and $46.8 million for the years ended December 31, 2016 and 2015, respectively. No amortization expense was incurred on intangible assets subject to amortization prior to the ARX acquisition on April 1, 2015.

The estimated aggregate amortization on these intangible assets for each of the next five years as of December 31, 2016, is as follows:



(millions)
Year	Amortization Expense
2017	$	62.1
2018	62.1
2019	62.1
2020	60.4
2021	60.1

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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