Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill by segment [Table Text Block]

The following table presents the carrying amount of the Company’s goodwill by segment.  Each reportable segment includes goodwill associated with the Company’s international business which is subject to the impact of changes in foreign currency exchange rates.

(in millions)	June 30, 2023		December 31, 2022
Business Insurance	$	2,584	$	2,565
Bond & Specialty Insurance	550		550
Personal Insurance	815		811
Other	26		26
Total	$	3,975	$	3,952

Other intangible assets subject to amortization [Table Text Block]

The following tables present a summary of the Company’s other intangible assets by major asset class.

(at June 30, 2023, in millions)	Gross Carrying Amount		Accumulated Amortization		Net
Subject to amortization
Customer-related	$	99	$	54	$	45
Contract-based (1)	205		193		12
Total subject to amortization	304		247		57
Not subject to amortization	226		—		226
Total	$	530	$	247	$	283

 

(at December 31, 2022, in millions)	Gross Carrying Amount		Accumulated Amortization		Net
Subject to amortization
Customer-related	$	96	$	48	$	48
Contract-based (1)	204		191		13
Total subject to amortization	300		239		61
Not subject to amortization	226		—		226
Total	$	526	$	239	$	287

 _________________________________________________________

(1)Contract-based intangible assets subject to amortization are comprised of fair value adjustments on claims and claim adjustment expense reserves, reinsurance recoverables and other contract-related intangible assets. Fair value adjustments recorded in connection with insurance acquisitions were based on management’s estimate of nominal claims and claim adjustment expense reserves and reinsurance recoverables. The method used calculated a risk adjustment to a risk-free discounted reserve that would, if reserves ran off as expected, produce results that yielded the assumed cost-of-capital on the capital supporting the loss reserves.  The fair value adjustments are reported as other intangible assets on the consolidated balance sheet, and the amounts measured in accordance with the acquirer’s accounting policies for insurance contracts have been reported as part of the claims and claim adjustment expense reserves and reinsurance recoverables. The intangible assets are being recognized into income over the expected payment pattern. Because the time value of money and the risk adjustment (cost of capital) components of the intangible assets run off at different rates, the amount recognized in income may be a net benefit in some periods and a net expense in other periods.

Other intangible assets not subject to amortization [Table Text Block]

The following tables present a summary of the Company’s other intangible assets by major asset class.

(at June 30, 2023, in millions)	Gross Carrying Amount		Accumulated Amortization		Net
Subject to amortization
Customer-related	$	99	$	54	$	45
Contract-based (1)	205		193		12
Total subject to amortization	304		247		57
Not subject to amortization	226		—		226
Total	$	530	$	247	$	283

 

(at December 31, 2022, in millions)	Gross Carrying Amount		Accumulated Amortization		Net
Subject to amortization
Customer-related	$	96	$	48	$	48
Contract-based (1)	204		191		13
Total subject to amortization	300		239		61
Not subject to amortization	226		—		226
Total	$	526	$	239	$	287

 _________________________________________________________

(1)Contract-based intangible assets subject to amortization are comprised of fair value adjustments on claims and claim adjustment expense reserves, reinsurance recoverables and other contract-related intangible assets. Fair value adjustments recorded in connection with insurance acquisitions were based on management’s estimate of nominal claims and claim adjustment expense reserves and reinsurance recoverables. The method used calculated a risk adjustment to a risk-free discounted reserve that would, if reserves ran off as expected, produce results that yielded the assumed cost-of-capital on the capital supporting the loss reserves.  The fair value adjustments are reported as other intangible assets on the consolidated balance sheet, and the amounts measured in accordance with the acquirer’s accounting policies for insurance contracts have been reported as part of the claims and claim adjustment expense reserves and reinsurance recoverables. The intangible assets are being recognized into income over the expected payment pattern. Because the time value of money and the risk adjustment (cost of capital) components of the intangible assets run off at different rates, the amount recognized in income may be a net benefit in some periods and a net expense in other periods.