Goodwill and Other Intangible Assets (tables)

12 Months Ended

Dec. 31, 2014

Goodwill and Other Intangible Assets disclosure

Goodwill by segment [Table Text Block]

(in millions)	2014		2013
Business and International Insurance(1)	$	2,476	$	2,499
Bond & Specialty Insurance		495		495
Personal Insurance		613		613
Other		27		27
Total	$	3,611	$	3,634

(1)

Includes goodwill associated with the Company's acquisition of Dominion in 2013, which is subject to the impact of changes in foreign currency exchange rates.

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

(at December 31, 2014, in millions)	Gross Carrying Amount		Accumulated Amortization		Net
Intangibles subject to amortization
Customer-related	$	460	$	446	$	14
Fair value adjustment on claims and claim adjustment expense reserves, reinsurance recoverables and other contract-related intangibles(1)		209		136		73
Total intangible assets subject to amortization		669		582		87
Intangible assets not subject to amortization		217		—		217
Total other intangible assets	$	886	$	582	$	304

(at December 31, 2013, in millions)	Gross Carrying Amount		Accumulated Amortization		Net
Intangibles subject to amortization
Customer-related	$	460	$	414	$	46
Fair value adjustment on claims and claim adjustment expense reserves, reinsurance recoverables and other contract-related intangibles(1)		201		113		88
Total intangible assets subject to amortization		661		527		134
Intangible assets not subject to amortization		217		—		217
Total other intangible assets	$	878	$	527	$	351

(1)

Fair value adjustments of $5 million and $191 million were recorded in connection with the acquisition of Dominion in 2013 and in connection with the merger of The St. Paul Companies, Inc. and Travelers Property Casualty Corp. in 2004, respectively, and 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. Additionally, $5 million of contract-related intangibles were recorded related to operating leases in connection with the acquisition of Dominion in 2013.

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

(for the year ended December 31, in millions)	2014		2013		2012
Customer-related	$	32	$	31	$	33
Fair value adjustment on claims and claim adjustment expense reserves, reinsurance recoverables and other contract-related intangibles		14		15		19
Total amortization expense	$	46	$	46	$	52