Business Segments (Tables)

12 Months Ended

Dec. 31, 2018

The Company's results of operations and selected balance sheet items by segment are presented in the following tables.



Year ended December 31, 2018	Specialty			Commercial			International			Life & Group			Corporate & Other
(In millions)	Specialty			Commercial			International			Life & Group			Corporate & Other			Eliminations			Total
Net written premiums	$	2,744		$	3,060		$	1,018		$	524		$	—		$	(1	)	$	7,345
Operating revenues
Net earned premiums	$	2,732		$	3,050		$	1,001		$	530		$	—		$	(1	)	$	7,312
Net investment income	439			500			57			801			20			—			1,817
Non-insurance warranty revenue	1,007			—			—			—			—			—			1,007
Other revenues	2			28			1			2			19			(2		)	50
Total operating revenues	4,180			3,578			1,059			1,333			39			(3		)	10,186
Claims, benefits and expenses
Net incurred claims and benefits	1,526			2,053			699			1,218			51			—			5,547
Policyholders’ dividends	5			20			—			—			—			—			25
Amortization of deferred acquisition costs	599			505			231			—			—			—			1,335
Non-insurance warranty expense	923			—			—			—			—			—			923
Other insurance related expenses	279			505			135			122			(1		)	(1		)	1,039
Other expenses	46			43			14			7			193			(2		)	301
Total claims, benefits and expenses	3,378			3,126			1,079			1,347			243			(3		)	9,170
Core income (loss) before income tax	802			452			(20		)	(14		)	(204		)	—			1,016
Income tax (expense) benefit on core income (loss)	(173		)	(95		)	1			57			39			—			(171		)
Core income (loss)	$	629		$	357		$	(19	)	$	43		$	(165	)	$	—		845
Net realized investment gains (losses)																			(52		)
Income tax (expense) benefit on net realized investment gains (losses)																			14
Net realized investment gains (losses), after tax																			(38		)
Net deferred tax asset remeasurement																			6
Net income																			$	813



December 31, 2018
(In millions)
Reinsurance receivables	$	649	$	795	$	250	$	414	$	2,347		$	—	$	4,455
Insurance receivables	947		1,277		284		9		(152		)	—		2,365
Deferred acquisition costs	308		230		95		—		—			—		633
Goodwill	117		—		29		—		—			—		146
Deferred non-insurance warranty acquisition expense	2,513		—		—		—		—			—		2,513
Insurance reserves
Claim and claim adjustment expenses	5,465		8,743		1,750		3,601		2,425			—		21,984
Unearned premiums	2,132		1,454		475		122		—			—		4,183
Future policy benefits	—		—		—		10,597		—			—		10,597
Deferred non-insurance warranty revenue	3,402		—		—		—		—			—		3,402



Year ended December 31, 2017	Specialty			Commercial			International			Life & Group			Corporate & Other
(In millions)	Specialty			Commercial			International			Life & Group			Corporate & Other			Eliminations			Total
Net written premiums	$	2,731		$	2,922		$	881		$	536		$	—		$	(1	)	$	7,069
Operating revenues
Net earned premiums	$	2,712		$	2,881		$	857		$	539		$	—		$	(1	)	$	6,988
Net investment income	522			658			52			782			20			—			2,034
Non-insurance warranty revenue	390			—			—			—			—			—			390
Other revenues	1			32			—			2			2			—			37
Total operating revenues	3,625			3,571			909			1,323			22			(1		)	9,449
Claims, benefits and expenses
Net incurred claims and benefits	1,533			1,930			575			1,269			(19		)	—			5,288
Policyholders’ dividends	4			18			—			—			—			—			22
Amortization of deferred acquisition costs	590			481			162			—			—			—			1,233
Non-insurance warranty expense	299			—			—			—			—			—			299
Other insurance related expenses	279			530			162			129			(1		)	(1		)	1,098
Other expenses	43			57			(7		)	7			192			—			292
Total claims, benefits and expenses	2,748			3,016			892			1,405			172			(1		)	8,232
Core income (loss) before income tax	877			555			17			(82		)	(150		)	—			1,217
Income tax (expense) benefit on core income (loss)	(295		)	(186		)	(9		)	132			60			—			(298		)
Core income (loss)	$	582		$	369		$	8		$	50		$	(90	)	$	—		919
Net realized investment gains (losses)																			93
Income tax (expense) benefit on net realized investment gains (losses)																			(30		)
Net realized investment gains (losses), after tax																			63
Net deferred tax asset remeasurement																			(83		)
Net income																			$	899



December 31, 2017
(In millions)
Reinsurance receivables	$	671	$	654	$	212	$	438	$	2,315	$	—	$	4,290
Insurance receivables	969		1,103		254		8		2		—		2,336
Deferred acquisition costs	318		223		93		—		—		—		634
Goodwill	117		—		31		—		—		—		148
Deferred non-insurance warranty acquisition expense	212		—		—		—		—		—		212
Insurance reserves
Claim and claim adjustment expenses	5,669		8,764		1,636		3,499		2,436		—		22,004
Unearned premiums	2,020		1,409		472		128		—		—		4,029
Future policy benefits	—		—		—		11,179		—		—		11,179
Deferred non-insurance warranty revenue	972		—		—		—		—		—		972



Year ended December 31, 2016	Specialty			Commercial						Life & Group			Corporate & Other
(In millions)	Specialty			Commercial			International			Life & Group			Corporate & Other			Eliminations			Total
Net written premiums	$	2,738		$	2,883		$	821		$	547		$	—		$	(1	)	$	6,988
Operating revenues
Net earned premiums	$	2,743		$	2,840		$	806		$	536		$	—		$	(1	)	$	6,924
Net investment income	497			657			51			767			16			—			1,988
Non-insurance warranty revenue	361			—			—			—			—			—			361
Other revenues	1			32			—			(2		)	12			—			43
Total operating revenues	3,602			3,529			857			1,301			28			(1		)	9,316
Claims, benefits and expenses
Net incurred claims and benefits	1,489			1,905			492			1,286			98			—			5,270
Policyholders’ dividends	4			9			—			—			—			—			13
Amortization of deferred acquisition costs	586			475			174			—			—			—			1,235
Non-insurance warranty expense	271			—			—			—			—			—			271
Other insurance related expenses	295			566			133			132			(3		)	(1		)	1,122
Other expenses	41			36			24			8			209			—			318
Total claims, benefits and expenses	2,686			2,991			823			1,426			304			(1		)	8,229
Core income (loss) before income tax	916			538			34			(125		)	(276		)	—			1,087
Income tax (expense) benefit on core income (loss)	(310		)	(183		)	(13		)	145			98			—			(263		)
Core income (loss)	$	606		$	355		$	21		$	20		$	(178	)	$	—		824
Net realized investment gains (losses)																			50
Income tax (expense) benefit on net realized investment gains (losses)																			(15		)
Net realized investment gains (losses), after tax																			35
Net income																			$	859

The following table presents operating revenue by line of business for each reportable segment.



Years ended December 31
(In millions)	2018			2017			2016
Specialty
Management & Professional Liability	$	2,440		$	2,533		$	2,562
Surety	571			541			529
Warranty & Alternative Risks⁽¹⁾	1,169			551			511
Specialty revenues	4,180			3,625			3,602
Commercial
Middle Market	2,045			1,965			1,823
Small Business	472			480			582
Other Commercial Insurance	1,061			1,126			1,124
Commercial revenues	3,578			3,571			3,529
International
Canada	255			224			203
Europe	363			326			314
Hardy	441			359			340
International revenues	1,059			909			857
Life & Group revenues	1,333			1,323			1,301
Corporate & Other revenues	39			22			28
Eliminations	(3		)	(1		)	(1		)
Total operating revenues	10,186			9,449			9,316
Net realized investment gains (losses)	(52		)	93			50
Total revenues	$	10,134		$	9,542		$	9,366


(1)	As of January 1, 2018, the Company adopted ASU 2014-09 Revenue Recognition (Topic 606): Revenue from Contracts with Customers. See Note A to the Consolidated Financial Statements for additional information.