Segment Information

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Segment Information

Segment Information

We operate primarily in two industries, property casualty insurance and life insurance. We regularly review our reporting segments to make decisions about allocating resources and assessing performance. Our reporting segments are:

• Commercial lines insurance

• Personal lines insurance

• Excess and surplus lines insurance

• Life insurance

• Investments

We report as Other the noninvestment operations of the parent company and its noninsurer subsidiary, CFC Investment Company.

Revenues come primarily from unaffiliated customers:

• All four insurance segments record revenues from insurance premiums earned. Life insurance segment revenues also include separate account investment management fees.

• Fee revenues for the commercial and personal insurance segments primarily represent installment fees. Fee revenues for the life insurance segment represent separate account investment management fees.

• Our investments’ revenues consist of pretax net investment income and realized investment gains and losses.

• Other revenues are primarily finance income.

Income or loss before income taxes for each segment is reported based on the nature of that business area’s operations:

• Income before income taxes for the insurance segments is defined as underwriting profit or loss.

◦ For commercial lines, personal lines and excess and surplus lines insurance segments, we calculate underwriting profit or loss as premiums earned and fee revenue minus loss and loss expenses and underwriting expenses incurred.

◦ For the life insurance segment, we calculate underwriting profit or loss as premiums earned and separate account investment management fees, minus contract holders’ benefits and expenses incurred, plus investment interest credited to contract holders.

• Income before income taxes for the investments segment is net investment income plus realized investment gains and losses for investments of the entire company, minus investment interest credited to contract holders of the life insurance segment.

• Loss before income taxes for the Other category is primarily due to interest expense from debt of the parent company and operating expenses of our headquarters.

Identifiable assets are used by each segment in its operations. We do not separately report the identifiable assets for the commercial, personal or excess and surplus lines segments because we do not use that measure to analyze the segments. We include all investment assets, regardless of ownership, in the investments segment.

This table summarizes segment information:

(Dollars in millions)	Years ended December 31,
	2014			2013			2012
Revenues:
Commercial lines insurance
Commercial casualty	$	938		$	856		$	767
Commercial property	728			623			545
Commercial auto	528			479			426
Workers' compensation	370			365			344
Other commercial lines	292			313			301
Commercial lines insurance premiums	2,856			2,636			2,383
Fee revenues	4			3			4
Total commercial lines insurance	2,860			2,639			2,387
Personal lines insurance
Personal auto	476			443			404
Homeowner	443			403			353
Other personal lines	122			115			111
Personal lines insurance premiums	1,041			961			868
Fee revenues	2			1			2
Total personal lines insurance	1,043			962			870
Excess and surplus lines insurance	148			116			93
Life insurance premiums	198			189			178
Separate account investment management fees	6			4			1
Total life insurance	204			193			179
Investments
Investment income, net of expenses	549			529			531
Realized investment gains, net	133			83			42
Total investment revenue	682			612			573
Other	8			9			9
Total revenues	$	4,945		$	4,531		$	4,111
Income (loss) before income taxes:
Insurance underwriting results:
Commercial lines insurance	$	146		$	186		$	181
Personal lines insurance	10			33			(43		)
Excess and surplus lines insurance	30			14			(1		)
Life insurance	(5		)	9			(3		)
Investments	599			532			491
Other	(59		)	(60		)	(59		)
Total income before income taxes	$	721		$	714		$	566
	December 31,			December 31,
Identifiable assets:	2014			2013
Property casualty insurance	$	2,656		$	2,455
Life insurance	1,316			1,225
Investments	14,441			13,618
Other	340			364
Total	$	18,753		$	17,662