SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2016

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 92.5% of our property and casualty insurance premiums earned for 2016. Our personal lines represented 7.5% of our property and casualty insurance premiums earned for 2016.

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 which generally are highest in the second and third quarters. 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 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 $5,314,548 and $5,491,932 as of December 31, 2016 and 2015, respectively. Traditional life insurance products represented 73.0 percent and 68.5 percent of our insurance in-force at December 31, 2016 and 2015, respectively. Universal life insurance represented 26.6 percent and 26.3 percent of insurance in force at December 31, 2016 and 2015, 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,	2016		2015		2014
Property and casualty insurance segment
Net premiums earned
Other liability	$	289,982	$	261,303	$	228,426
Fire and allied lines	265,221		246,450		226,086
Automobile	239,216		210,090		187,813
Workers' compensation	103,605		95,672		88,522
Fidelity and surety	22,507		21,362		19,212
Reinsurance assumed	12,765		13,639		13,145
Other	2,835		3,179		3,735
Total net premiums earned	$	936,131	$	851,695	$	766,939
Life insurance segment
Net premiums earned
Ordinary life (excluding universal life)	$	63,668	$	53,114	$	35,557
Universal life policy fees	11,577		12,834		13,190
Immediate annuities with life contingencies	10,533		12,223		11,639
Accident and health	1,434		1,425		1,274
Other	58		388		261
Total net premiums earned	$	87,270	$	79,984	$	61,921

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 2016, 2015 and 2014 are reported in the property and casualty insurance segment.

	2016			2015			2014
Property and casualty insurance:
Revenues:
Net premiums earned	$	936,131		$	851,695		$	766,939
Investment income, net of investment expenses	55,441			46,606			44,219
Net realized investment gains	4,947			1,124			4,177
Other income (loss)	—			(107		)	910
Total revenues before eliminations	$	996,519		$	899,318		$	816,245
Intersegment eliminations	(157		)	(47		)	18
Total revenues	$	996,362		$	899,271		$	816,263
Net income before income taxes:
Revenues	$	996,519		$	899,318		$	816,245
Benefit, losses and expenses	938,864			784,691			750,768
Total net income before eliminations	$	57,655		$	114,627		$	65,477
Intersegment eliminations	(158		)	743			548
Income before income taxes	$	57,497		$	115,370		$	66,025
Income tax expense	8,379			30,050			13,649
Net income	$	49,118		$	85,320		$	52,376
Assets
Total segment	$	2,662,272		$	2,490,138		$	2,360,764
Intersegment eliminations	(213,132		)	(209,464		)	(233,141		)
Total assets	$	2,449,140		$	2,280,674		$	2,127,623
Life insurance:
Revenues:
Net premiums earned	$	87,270		$	79,984		$	61,921
Investment income, net of investment expenses	51,538			54,222			60,373
Net realized investment gains	1,156			1,722			3,093
Other income	621			508			774
Total revenues before eliminations	$	140,585		$	136,436		$	126,161
Intersegment eliminations	—			(789		)	(530		)
Total revenues	$	140,585		$	135,647		$	125,631
Net income before income taxes:
Revenues	$	140,585		$	136,436		$	126,161
Benefit, losses and expenses	139,671			129,771			115,361
Total net income before eliminations	$	914		$	6,665		$	10,800
Intersegment eliminations	256			(584		)	(362		)
Income before income taxes	$	1,170		$	6,081		$	10,438
Income tax expense	384			2,275			3,677
Net income	$	786		$	3,806		$	6,761
Assets	$	1,605,618		$	1,609,702		$	1,729,066
Consolidated totals:
Total revenues	$	1,136,947		$	1,034,918		$	941,894
Total net income	$	49,904		$	89,126		$	59,137
Total assets	$	4,054,758		$	3,890,376		$	3,856,689