Note B. Hardy

On July 2, 2012, the Company completed the acquisition of all outstanding shares of Hardy, a specialized Lloyd's underwriter. Through Lloyd's Syndicate 382, Hardy underwrites primarily short-tail exposures in marine and aviation, non-marine property, specialty lines and property treaty reinsurance. The acquisition of Hardy aligns with the Company's specialized underwriting focus and will be a key platform for expanding the Company's global business through the Lloyd's marketplace. The results of Hardy for the period from July 2, 2012 to December 31, 2012 are included in the results of our core property and casualty insurance operations as a separate segment.

For the year ended December 31, 2011, Hardy reported gross written premiums of $430 million and recorded a loss of $55 million in its group consolidated financial statements prepared in accordance with International Financial Reporting Standards.

The purchase price for Hardy was $231 million. Acquisition related expenses of $4 million were incurred during the year ended December 31, 2012, including investment advisory, legal and other expenses, and were recorded in the Corporate and Other Non-Core segment.

The fair value of the assets acquired and the liabilities assumed as a result of the acquisition of Hardy were as follows:



(In millions)	Acquisition Date
(In millions)	July 2, 2012
Investments:
Fixed maturity securities	$	117
Other invested assets	68
Short term investments	187
Total investments	372
Cash	34
Reinsurance receivables	252
Insurance receivables	222
Accrued investment income	2
Property and equipment	4
Goodwill	35
Other assets	245
Total assets acquired	$	1,166

Claim and claim adjustment expenses	$	500
Unearned premiums	249
Long term debt	30
Other liabilities	156
Total liabilities assumed	$	935

The recognized goodwill is based on the Company's expected growth and profitability of Hardy. The goodwill is not deductible for tax purposes.

The intangible assets acquired are included in Other assets and are presented in the following table.



(In millions)	Economic Useful Life	Amount at Acquisition		Accumulated Amortization
Syndicate capacity	Indefinite	$	55
Total indefinite-lived intangible assets		55

Value of business acquired	1 - 4 years	60		$	43
Trade name	8 years	8		—
Distribution channel	15 years	13		—
Total finite-lived intangible assets		81		43
Total intangible assets		$	136	$	43

For 2012, amortization expense of $33 million was included in Amortization of deferred acquisition costs and $10 million was included in Other operating expenses in the Statement of Operations for the Hardy segment. Estimated future amortization expense for these intangible assets is $21 million in 2013, $4 million in 2014, $1 million in 2015 and $2 million in both 2016 and 2017.