Goodwill and Other Intangible Assets (tables)

12 Months Ended

Dec. 31, 2011

Goodwill and Other Intangible Assets disclosure

Goodwill by segment [Table Text Block]

(in millions)	2011		2010
Business Insurance	$	2,168	$	2,168
Financial, Professional & International Insurance		557		557
Personal Insurance		613		613
Other		27		27
Total	$	3,365	$	3,365

Other intangible assets by major asset class [Table Text Block]

(at December 31, 2011, in millions)	Gross Carrying Amount		Accumulated Amortization		Net
Intangibles subject to amortization
Customer-related	$	935	$	830	$	105
Fair value adjustment on claims and claim adjustment expense reserves and reinsurance recoverables(1)		191		79		112
Total intangible assets subject to amortization		1,126		909		217
Intangible assets not subject to amortization		216		—		216
Total other intangible assets	$	1,342	$	909	$	433

(at December 31, 2010, in millions)	Gross Carrying Amount		Accumulated Amortization		Net
Intangibles subject to amortization
Customer-related	$	935	$	783	$	152
Fair value adjustment on claims and claim adjustment expense reserves and reinsurance recoverables(1)		191		57		134
Total intangible assets subject to amortization		1,126		840		286
Intangible assets not subject to amortization		216		—		216
Total other intangible assets	$	1,342	$	840	$	502

(1)

The fair value adjustment of $191 million was recorded in connection with the merger of The St. Paul Companies, Inc. and Travelers Property Casualty Corp. in 2004 and was based on management's estimate of nominal claims and claim adjustment expense reserves and reinsurance recoverables (after adjusting for conformity with the acquirer's accounting policy on discounting of workers' compensation reserves), expected payment patterns, the April 1, 2004 U.S. Treasury spot rate yield curve, a leverage ratio assumption (reserves to statutory surplus), and a cost of capital expressed as a spread over risk-free rates. The method used calculates a risk adjustment to a risk-free discounted reserve that will, if reserves run off as expected, produce results that yield the assumed cost-of-capital on the capital supporting the loss reserves. The fair value adjustment is reported as an other intangible asset on the consolidated balance sheet, and the amounts measured in accordance with the acquirer's accounting policies for insurance contracts are reported as part of the claims and claim adjustment expense reserves and reinsurance recoverables. The intangible asset will be 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 asset 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.

Amortization expense for other intangible assets by major asset class [Table Text Block]

(for the year ended December 31, in millions)	2011		2010		2009
Customer-related	$	47	$	61	$	72
Fair value adjustment on claims and claim adjustment expense reserves and reinsurance recoverables		22		25		28
Total amortization expense	$	69	$	86	$	100