Segment Information

12 Months Ended

Dec. 31, 2011

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

NOTE 10. SEGMENT INFORMATION

We have two reportable business segments in our operations: property and casualty insurance and life insurance. The property and casualty insurance segment has six domestic locations from which it conducts its business. The life insurance segment operates from our home office. The accounting policies of the segments are the same as those described in Note 1 to our Consolidated Financial Statements. We analyze results based on profitability (i.e., loss ratios), expenses and return on equity. Because all of our insurance is sold domestically, we have no revenues allocable to foreign operations.

Property and Casualty Insurance Segment

We write both commercial and personal lines of property and casualty insurance. We focus on our commercial lines, which represented 89.6 percent of our property and casualty insurance premiums earned for 2011. Our personal lines represented 10.4 percent of our property and casualty insurance premiums earned for 2011.

Products

Our primary commercial policies are tailored business packages that include the following coverages: fire and allied lines, other liability, automobile, workers’ compensation and surety. Our personal lines consist primarily of automobile and fire and allied lines coverage, including homeowners.

Pricing

Pricing levels for our property and casualty insurance products are influenced by many factors, including an estimation of expected losses, the expenses of producing, issuing and servicing business and managing claims, the time value of money associated with such loss and expense cash flows, and a reasonable allowance for profit. We have a disciplined approach to underwriting and risk management that emphasizes profitable growth rather than premium volume or market share. Our insurance subsidiaries are subject to state laws and regulations regarding rate and policy form approvals. The applicable state laws and regulations establish standards in certain lines of business to ensure that rates are not excessive, inadequate, unfairly discriminatory, or used to engage in unfair price competition. Our ability to increase rates and the relative timing of the process are dependent upon each respective state's requirements, as well as the competitive market environment.

Seasonality

Our property and casualty insurance segment experiences some seasonality with regard to premiums written, which are generally highest in January and July and lowest during the fourth quarter. Although we experience some seasonality in our premiums written, premiums are earned ratably over the period of coverage. Losses and loss settlement expenses incurred tend to remain consistent throughout the year, with the exception of catastrophe losses. Catastrophes inherently are unpredictable and can occur at any time during the year from man-made or natural disaster events that include, but which are not limited to, hail, tornadoes, hurricanes and windstorms.

Life Insurance Segment

Products

United Life Insurance Company underwrites all of our life insurance business and sells annuities. Our principal products are single premium annuities, universal life products and traditional life (primarily single premium whole life insurance) products. We also underwrite and market other traditional products, including term life insurance and whole life insurance. We do not write variable annuities or variable insurance products.

Life insurance in force, before ceded reinsurance, totaled $4,916,875,000 and $4,804,167,000 as of December 31, 2011 and 2010, respectively. Traditional life insurance products represented 65.5 percent and 64.1 percent of our insurance in-force at December 31, 2011 and 2010, respectively. Universal life insurance represented 31.8 percent and 33.2 percent of insurance in force at December 31, 2011 and 2010, respectively.

Pricing

Premiums for our life and health insurance products are based on assumptions with respect to mortality, morbidity, investment yields, expenses, and lapses and are also affected by state laws and regulations, as well as competition. Pricing assumptions are based on our experience, as well as the industry in general, depending upon the factor being considered. The actual profit or loss produced by a product will vary from the anticipated profit if the actual experience differs from the assumptions used in pricing the product.

Premiums Earned by Segment

The following table sets forth our net premiums earned by segment before intersegment eliminations:

(In Thousands)
Years Ended December 31	2011		2010		2009
Property and Casualty Insurance Segment
Net premiums earned
Fire and allied lines	$	153,839	$	123,341	$	124,582
Other liability	159,977		113,555		119,587
Automobile	133,974		107,776		111,001
Workers’ compensation	54,404		45,174		51,992
Fidelity and surety	16,665		19,113		21,354
Reinsurance assumed	13,261		10,163		5,942
Other	1,651		1,251		1,219
Total net premiums earned	$	533,771	$	420,373	$	435,677
Life Insurance Segment
Net premiums earned
Ordinary life (excluding Universal life)	$	30,374	$	28,463	$	23,842
Universal life policy fees	10,995		10,774		10,554
Accident and health	1,472		1,538		1,634
Immediate annuities with life contingencies	10,276		8,354		6,755
Credit life	46		76		140
Group life	216		210		206
Total net premiums earned	$	53,379	$	49,415	$	43,131

Total revenue by segment includes sales to external customers and intersegment sales that are eliminated to arrive at the total revenues as reported in the accompanying Consolidated Statements of Income. We account for intersegment sales on the same basis as sales to external customers.

The following table sets forth certain data for each of our business segments and is reconciled to our Consolidated Financial Statements. Depreciation expense and property and equipment acquisitions for 2011, 2010 and 2009, are reported in the property and casualty insurance segment.

(In Thousands)
Years Ended December 31	2011			2010			2009
Property and Casualty Insurance Segment
Revenues
Net premiums earned	$	533,771		$	420,373		$	435,677
Investment income, net of investment expenses	35,690			34,968			31,715
Realized investment gains (losses)	3,066			3,402			(6,815		)
Other income	1,592			147			194
Total reportable segment	$	574,119		$	458,890		$	460,771
Intersegment eliminations	(162		)	10			(173		)
Total revenues	$	573,957		$	458,900		$	460,598
Net income (loss) before income taxes
Revenues	$	574,119		$	458,890		$	460,771
Benefits, losses and expenses	598,684			420,374			500,855
Total reportable segment	$	(24,565	)	$	38,516		$	(40,084	)
Intersegment eliminations	335			324			137
Income (loss) before income taxes	$	(24,230	)	$	38,840		$	(39,947	)
Income tax expense (benefit)	(16,591		)	4,114			(22,270		)
Net income (loss)	$	(7,639	)	$	34,726		$	(17,677	)
Assets
Total reportable segment	$	2,117,352		$	1,591,392		$	1,561,474
Intersegment eliminations	(252,205		)	(245,419		)	(237,165		)
Total assets	$	1,865,147		$	1,345,973		$	1,324,309
Life Insurance Segment
Revenues
Net premiums earned	$	53,379		$	49,415		$	43,131
Investment income, net of investment expenses	73,977			76,898			74,533
Realized investment gains (losses)	3,647			4,896			(6,364		)
Other income	699			1,278			605
Total reportable segment	$	131,702		$	132,487		$	111,905
Intersegment eliminations	(651		)	(315		)	(310		)
Total revenues	$	131,051		$	132,172		$	111,595
Net income before income taxes
Revenues	$	131,702		$	132,487		$	111,905
Benefits, losses and expenses	119,712			112,810			100,528
Total reportable segment	$	11,990		$	19,677		$	11,377
Intersegment eliminations	(475		)	(134		)	(136		)
Income before income taxes	$	11,515		$	19,543		$	11,241
Income tax expense	3,865			6,756			4,005
Net income	$	7,650		$	12,787		$	7,236
Assets	$	1,753,777		$	1,661,466		$	1,578,235
Consolidated Totals
Total consolidated revenues	$	705,008		$	591,072		$	572,193
Total consolidated net income (loss)	$	11		$	47,513		$	(10,441	)
Total consolidated assets	$	3,618,924		$	3,007,439		$	2,902,544