Segment Information

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

Segment Information

Segment Information

We evaluate the results of our four reportable segments as follows:

•Our Standard Commercial Lines, Standard Personal Lines, and E&S Lines are evaluated based on before and after-tax underwriting results (net premiums earned, incurred loss and loss expense, policyholder dividends, policy acquisition costs, and other underwriting expenses), return on equity ("ROE") contribution, and combined ratios.

•Our Investments segment is primarily evaluated on after-tax net investment income and its ROE contribution. After-tax net realized and unrealized gains and losses, which are not included in non-GAAP operating income, are also included in our Investments segment results.

In computing each segment's results, we do not make adjustments for interest expense or corporate expenses. No segment has a separate investment portfolio or allocated assets.

The following summaries present revenues (net investment income and net realized and unrealized gains and losses on investments in the case of the Investments segment) and pre-tax income for the individual segments:

Revenue by Segment	Quarter ended June 30,			Six Months ended June 30,
($ in thousands)	2022		2021	2022		2021
Standard Commercial Lines:
Net premiums earned:
General liability	$	226,285	197,293	$	442,610	390,813
Commercial automobile	198,381		178,028	392,211		349,909
Commercial property	123,562		106,113	243,624		208,923
Workers compensation	83,502		74,337	168,182		152,527
Businessowners' policies	31,508		29,311	61,552		57,938
Bonds	10,682		8,993	21,042		17,586
Other	6,317		5,679	12,485		11,199
Miscellaneous income	2,596		5,795	3,697		9,502
Total Standard Commercial Lines revenue	682,833		605,549	1,345,403		1,198,397
Standard Personal Lines:
Net premiums earned:
Personal automobile	39,952		41,009	79,668		82,402
Homeowners	31,630		30,570	62,817		61,168
Other	1,756		1,714	3,495		3,544
Miscellaneous income	441		417	869		822
Total Standard Personal Lines revenue	73,779		73,710	146,849		147,936
E&S Lines:
Net premiums earned:
Casualty lines	56,041		47,642	110,665		91,475
Property lines	24,823		19,829	48,371		37,994
Total E&S Lines revenue	80,864		67,471	159,036		129,469
Investments:
Net investment income	70,222		83,731	142,824		153,447
Net realized and unrealized investment (losses) gains	(42,880)		10,057	(83,232)		15,176
Total Investments revenue	27,342		93,788	59,592		168,623
Total revenues	$	864,818	840,518	$	1,710,880	1,644,425

Income Before and After Federal Income Tax	Quarter ended June 30,				Six Months ended June 30,
($ in thousands)	2022			2021	2022		2021
Standard Commercial Lines:
Underwriting income, before federal income tax	$	46,708		67,938	$	89,092	137,437
Underwriting income, after federal income tax	36,899			53,671	70,383		108,575
Combined ratio	93.1		%	88.7	93.4		88.4
ROE contribution	6.0			8.2	5.5		8.3
Standard Personal Lines:
Underwriting (loss) income, before federal income tax	$	(12,367)		5,644	$	(5,847)	13,339
Underwriting (loss) income, after federal income tax	(9,770)			4,459	(4,619)		10,538
Combined ratio	116.9		%	92.3	104.0		90.9
ROE contribution	(1.6)			0.7	(0.4)		0.8
E&S Lines:
Underwriting income, before federal income tax	$	3,372		2,306	$	10,297	2,822
Underwriting income, after federal income tax	2,664			1,822	8,135		2,229
Combined ratio	95.8		%	96.6	93.5		97.8
ROE contribution	0.4			0.3	0.6		0.2
Investments:
Net investment income earned	$	70,222		83,731	$	142,824	153,447
Net realized and unrealized investment (losses) gains	(42,880)			10,057	(83,232)		15,176
Total investments segment income, before federal income tax	27,342			93,788	59,592		168,623
Tax on investments segment income	4,559			18,402	10,172		32,850
Total investments segment income, after federal income tax	$	22,783		75,386	$	49,420	135,773
ROE contribution of after-tax net investment income earned	9.1			10.3	8.9		9.5

Reconciliation of Segment Results to Income Before Federal Income Tax	Quarter ended June 30,			Six Months ended June 30,
($ in thousands)	2022		2021	2022		2021
Underwriting income (loss)
Standard Commercial Lines	$	46,708	67,938	$	89,092	137,437
Standard Personal Lines	(12,367)		5,644	(5,847)		13,339
E&S Lines	3,372		2,306	10,297		2,822
Investment income	27,342		93,788	59,592		168,623
Total all segments	65,055		169,676	153,134		322,221
Interest expense	(7,252)		(7,366)	(14,420)		(14,725)
Corporate expenses	(7,899)		(9,112)	(18,920)		(18,666)
Income, before federal income tax	$	49,904	153,198	$	119,794	288,830
Preferred stock dividends	(2,300)		(2,300)	(4,600)		(4,753)
Income available to common stockholders, before federal income tax	$	47,604	150,898	$	115,194	284,077