Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2012

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 June 30, 2012 and December 31, 2011:

(in millions)	June 30,2012		December 31, 2011
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 June 30, 2012 and December 31, 2011:

(at June 30, 2012, in millions)	Gross Carrying Amount		Accumulated Amortization		Net
Intangibles subject to amortization
Customer-related (1)	$	455	$	368	$	87
Fair value adjustment on claims and claim adjustment expense reserves and reinsurance recoverables (2)	191		89		102
Total intangible assets subject to amortization	646		457		189
Intangible assets not subject to amortization	216		—		216
Total other intangible assets	$	862	$	457	$	405

(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 (2)	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

(1)	Certain intangible assets related to renewal rights became fully amortized during the first quarter of 2012.
(2)	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 June 30,				Six Months Ended June 30,
(in millions)	2012		2011		2012		2011
Customer-related	$	7	$	11	$	18	$	25
Fair value adjustment on claims and claim adjustment expense reserves and reinsurance recoverables	5		6		10		12
Total amortization expense	$	12	$	17	$	28	$	37

Intangible asset amortization expense is estimated to be $24 million for the remainder of 2012, $45 million in 2013, $43 million in 2014, $23 million in 2015 and $9 million in 2016.