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Segment Information
 6 Months Ended
Jun. 30, 2017
Segment Reporting [Abstract]  
Segment Information Segment Information
The Company has four reportable segments: personal insurance, commercial insurance, specialty insurance and investment operations. The reportable insurance segments are business units managed separately because of the differences in the type of customers they serve, the products they provide or services they offer. The insurance segments market a broad line of property and casualty insurance products throughout the United States through independent insurance agencies, which include retail agents and wholesale brokers. The investment operations segment, managed by Stateco, provides investment services.
Effective January 1, 2017, the Company completed the transition of its internal decision-making process to a product management structure. Under this structure, the Company’s principal operating decision makers assess performance based on the underwriting results of individual products. The products within each insurance segment, are as follows:
•Personal Insurance Segment - personal auto, homeowners, farm & ranch and other personal
•
Commercial Insurance Segment - commercial auto, small commercial package, middle market commercial, workers’ compensation and other commercial
•Specialty Insurance Segment - E&S property, E&S casualty and programs
Certain amounts previously reported within the commercial insurance segment due to immateriality are now reported in the personal insurance segment. Prior reporting periods have been restated to conform to the new presentation.
The Company evaluates the performance of its insurance segments using industry financial measurements based on Statutory Accounting Practices (“SAP”), which include loss and loss adjustment expense ratios, underwriting expense ratios, combined ratios, statutory underwriting gain (loss), net premiums earned and net written premiums. One of the most significant differences between SAP and GAAP is that SAP requires all underwriting expenses to be expensed immediately and not deferred and amortized over the same period the premium is earned.
The investment operations segment is evaluated based on investment returns of assets managed by Stateco. Asset information by segment is not reported for the insurance segments because the Company does not produce such information internally.
The following table sets forth financial information regarding the Company’s reportable segments for the three and six months ended June 30, 2017 and 2016:
($ millions)
Three months ended June 30
 
Six months ended June 30
 
2017
 
2016
 
2017
 
2016
Revenue from external sources:
 
 
 
 
 
 
 
Insurance segments
 
 
 
 
 
 
 
Personal insurance
$
152.5

 
$
153.1

 
$
305.2

 
$
306.6

Commercial insurance
104.9

 
111.6

 
208.5

 
223.0

Specialty insurance
62.7

 
57.7

 
123.7

 
112.7

Total insurance segments
320.1

 
322.4

 
637.4

 
642.3

Investment operations segment
 
 
 
 
 
 
 
Net investment income
19.1

 
19.1

 
37.8

 
36.5

Net realized capital gains
15.8

 
6.5

 
23.6

 
7.8

Total investment operations segment
34.9

 
25.6

 
61.4

 
44.3

All other
0.7

 
0.5

 
1.2

 
1.1

Total revenue from external sources
355.7

 
348.5

 
700.0

 
687.7

Intersegment revenue
1.6

 
1.5

 
3.0

 
2.9

Total revenue
357.3

 
350.0

 
703.0

 
690.6

Reconciling items:
 
 
 
 
 
 
 
Eliminate intersegment revenue
(1.6
)
 
(1.5
)
 
(3.0
)
 
(2.9
)
Total consolidated revenues
$
355.7

 
$
348.5

 
$
700.0

 
$
687.7

Segment income (loss) before federal income tax:
 
 
 
 
 
 
 
Insurance segments SAP underwriting (loss) gain
 
 
 
 
 
 
 
Personal insurance
$
(17.9
)
 
$
(24.9
)
 
$
(28.5
)
 
$
(20.5
)
Commercial insurance
0.8

 
(11.8
)
 
(4.1
)
 
(19.2
)
Specialty insurance
(4.8
)
 
(16.3
)
 
(13.4
)
 
(25.0
)
Total insurance segments (loss) gain
(21.9
)
 
(53.0
)
 
(46.0
)
 
(64.7
)
Investment operations segment
 
 
 
 
 
 
 
Net investment income
19.1

 
19.1

 
37.8

 
36.5

Net realized capital gains
15.8

 
6.5

 
23.6

 
7.8

Total investment operations segment
34.9

 
25.6

 
61.4

 
44.3

All other
0.1

 
0.1

 
0.2

 
0.2

Total segment income (loss) before tax expense
13.1

 
(27.3
)
 
15.6

 
(20.2
)
Reconciling items:
 
 
 
 
 
 
 
GAAP expense adjustments
1.4

 
4.6

 
(4.0
)
 
3.4

Interest expense on corporate debt
(1.5
)
 
(1.4
)
 
(2.9
)
 
(2.7
)
Corporate expenses
(1.1
)
 
(1.0
)
 
(2.0
)
 
(1.8
)
Total reconciling items
(1.2
)
 
2.2

 
(8.9
)
 
(1.1
)
Total consolidated income (loss) before federal income tax expense
$
11.9

 
$
(25.1
)
 
$
6.7

 
$
(21.3
)
 
 
 
 
 
 
 
 

Investable assets attributable to the Company’s investment operations segment totaled $2,733.5 million and $2,663.7 million at June 30, 2017, and December 31, 2016, respectively.