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Goodwill and Other Intangible Assets
9 Months Ended
Sep. 30, 2011
Goodwill and Other Intangible Assets disclosure 
Goodwill and Other Intangible Assets disclosure [Text Block]

5.                       GOODWILL AND OTHER INTANGIBLE ASSETS

 

Goodwill

 

The following table presents the carrying amount of the Company’s goodwill by segment at September 30, 2011 and December 31, 2010:

 

(in millions)

 

September 30,
2011

 

December 31,
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

 

The following presents a summary of the Company’s other intangible assets by major asset class at September 30, 2011 and December 31, 2010:

 

(at September 30, 2011, in millions)

 

Gross
Carrying
Amount

 

Accumulated
Amortization

 

Net

 

Intangibles subject to amortization

 

 

 

 

 

 

 

Customer-related

 

$

935

 

$

819

 

$

116

 

Fair value adjustment on claims and claim adjustment expense reserves and reinsurance recoverables (1)

 

191

 

74

 

117

 

 

 

 

 

 

 

 

 

Total intangible assets subject to amortization

 

1,126

 

893

 

233

 

Intangible assets not subject to amortization

 

216

 

 

216

 

 

 

 

 

 

 

 

 

Total other intangible assets

 

$

1,342

 

$

893

 

$

449

 

 

(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 time value of money and the risk margin (cost of capital) components of the intangible asset run off at different rates, and, as such, the amount recognized in income may be a net benefit in some periods and a net expense in other periods.

 

The following presents a summary of the Company’s amortization expense for other intangible assets by major asset class:

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

(in millions)

 

2011

 

2010

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

Customer-related

 

$

11

 

$

14

 

$

36

 

$

46

 

Fair value adjustment on claims and claim adjustment expense reserves and reinsurance recoverables

 

5

 

7

 

17

 

20

 

 

 

 

 

 

 

 

 

 

 

Total amortization expense

 

$

16

 

$

21

 

$

53

 

$

66

 

 

Intangible asset amortization expense is estimated to be $16 million for the remainder of 2011, $52 million in 2012, $45 million in 2013, $43 million in 2014 and $23 million in 2015.