SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

SEGMENT INFORMATION

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 seven domestic locations from which it conducts its business. The life insurance segment operates from our home office. Because all of our insurance is sold domestically, we have no revenues allocable to foreign operations. 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.

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 91.0 percent of our property and casualty insurance premiums earned for 2014. Our personal lines represented 9.0 percent of our property and casualty insurance premiums earned for 2014.

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 company 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 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 $5,366,061 and $5,300,209 as of December 31, 2014 and 2013, respectively. Traditional life insurance products represented 67.7 percent and 66.7 percent of our insurance in-force at December 31, 2014 and 2013, respectively. Universal life insurance represented 27.3 percent and 28.4 percent of insurance in force at December 31, 2014 and 2013, 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:

Years Ended December 31,	2014		2013		2012
Property and Casualty Insurance Segment
Net premiums earned
Other liability	$	228,426	$	199,548	$	197,842
Fire and allied lines	226,086		208,030		173,249
Automobile	187,813		169,211		155,572
Workers' compensation	88,522		81,616		68,643
Fidelity and surety	19,212		18,746		17,713
Reinsurance assumed	13,145		14,406		14,473
Other	3,735		2,635		1,919
Total net premiums earned	$	766,939	$	694,192	$	629,411
Life Insurance Segment
Net premiums earned
Ordinary life (excluding universal life)	$	35,557	$	38,875	$	44,468
Universal life policy fees	13,190		11,871		11,768
Immediate annuities with life contingencies	11,639		8,837		8,158
Accident and health	1,274		1,302		1,363
Other	261		261		274
Total net premiums earned	$	61,921	$	61,146	$	66,031

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 and Comprehensive 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 and amortization expense and property and equipment acquisitions for 2014, 2013 and 2012 are reported in the property and casualty insurance segment.

	2014			2013			2012
Property and Casualty Insurance:
Revenues:
Net premiums earned	$	766,939		$	694,192		$	629,411
Investment income, net of investment expenses	44,219			46,279			40,305
Net realized investment gains	4,177			6,260			3,896
Other income	910			88			316
Total revenues before eliminations	$	816,245		$	746,819		$	673,928
Intersegment eliminations	18			53			(646		)
Total revenues	$	816,263		$	746,872		$	673,282
Net income before income taxes:
Revenues	$	816,245		$	746,819		$	673,928
Benefit, losses and expenses	750,768			658,645			637,648
Total net income before eliminations	$	65,477		$	88,174		$	36,280
Intersegment eliminations	548			545			(199		)
Income before income taxes	$	66,025		$	88,719		$	36,081
Income tax expense	13,649			21,263			2,569
Net income	$	52,376		$	67,456		$	33,512
Assets
Total segment	$	2,360,764		$	2,218,464		$	2,149,356
Intersegment eliminations	(233,141		)	(223,395		)	(244,041		)
Total assets	$	2,127,623		$	1,995,069		$	1,905,315
Life Insurance:
Revenues:
Net premiums earned	$	61,921		$	61,146		$	66,031
Investment income, net of investment expenses	60,373			66,467			70,026
Net realized investment gains	3,093			2,434			3,777
Other income	774			614			575
Total revenues before eliminations	$	126,161		$	130,661		$	140,409
Intersegment eliminations	(530		)	(491		)	(448		)
Total revenues	$	125,631		$	130,170		$	139,961
Net income before income taxes:
Revenues	$	126,161		$	130,661		$	140,409
Benefit, losses and expenses	115,361			117,159			130,135
Total net income before eliminations	$	10,800		$	13,502		$	10,274
Intersegment eliminations	(362		)	(319		)	(281		)
Income before income taxes	$	10,438		$	13,183		$	9,993
Income tax expense	3,677			4,499			3,293
Net income	$	6,761		$	8,684		$	6,700
Assets	$	1,729,066		$	1,725,603		$	1,789,338
Consolidated Totals:
Total revenues	$	941,894		$	877,042		$	813,243
Total net income	$	59,137		$	76,140		$	40,212
Total assets	$	3,856,689		$	3,720,672		$	3,694,653