Segment Information

6 Months Ended

Jun. 30, 2011

Segment Information

Segment Information

10. Segment Information

The Company's primary business operations include insurance products and services provided through three property and casualty operating segments. These segments are Commercial Lines, Personal Lines, and Other Property and Casualty. Commercial Lines includes commercial multiple peril, commercial automobile, workers' compensation, and other commercial coverages, such as specialty program business, inland marine, bond, professional liability and management liability. Personal Lines includes personal automobile, homeowners and other personal coverages. The Other Property and Casualty segment consists of: Opus Investment Management, Inc., which markets investment management services to institutions, pension funds and other organizations; earnings on holding company assets; as well as voluntary pools business which is in run-off. The segment financial information is presented consistent with the way results are regularly evaluated by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

The Company's consolidated net (loss) income includes the results of its three operating segments (segment (loss) income), which we evaluate on a pre-tax basis, and our interest expense on debt. Segment (loss) income excludes certain items which are included in net (loss) income, such as federal income taxes and net realized investment gains and losses, because fluctuations in these gains and losses are determined by interest rates, financial markets and timing of sales. Also, segment (loss) income excludes net gains and losses on

disposals of businesses, discontinued operations, net gains and losses on derivative transactions, costs to acquire businesses, restructuring costs, extraordinary items, the cumulative effect of accounting changes and certain other items. Although the items excluded from segment (loss) income may be significant components in understanding and assessing the Company's financial performance, management believes that the presentation of segment income enhances an investor's understanding of the Company's results of operations by highlighting net income attributable to the core operations of the business. However, segment (loss) income should not be construed as a substitute for net (loss) income determined in accordance with generally accepted accounting principles.

Summarized below is financial information with respect to business segments:

	Quarter Ended June 30,						Six Months Ended June 30,
(In millions)	2011			2010			2011			2010
Segment revenues:
Commercial Lines	$	447.9		$	365.9		$	887.2		$	702.1
Personal Lines		388.2			397.9			774.9			793.2
Other Property and Casualty		5.6			5.5			11.4			10.8
Total		841.7			769.3			1,673.5			1,506.1
Intersegment revenues		(1.2	)		(1.2	)		(2.5	)		(2.3	)
Total segment revenues		840.5			768.1			1,671.0			1,503.8
Net realized investment gains		13.4			0.2			16.7			11.1
Total revenues	$	853.9		$	768.3		$	1,687.7		$	1,514.9
Segment (loss) income before federal income taxes:
Commercial Lines:
GAAP underwriting loss	$	(59.5	)	$	(16.0	)	$	(75.3	)	$	(24.8	)
Net investment income		34.0			32.3			67.6			64.3
Other income		0.8			0.6			1.4			0.2
Commercial Lines segment (loss) income		(24.7	)		16.9			(6.3	)		39.7
Personal Lines:
GAAP underwriting loss		(47.1	)		(30.6	)		(40.9	)		(23.9	)
Net investment income		23.1			25.6			45.8			51.2
Other income		1.1			1.5			2.3			3.7
Personal Lines segment (loss) income		(22.9	)		(3.5	)		7.2			31.0
Other Property and Casualty:
GAAP underwriting income		—			—			0.1			0.3
Net investment income		3.9			3.9			8.0			7.4
Other net expenses		(3.1	)		(2.7	)		(6.0	)		(6.1	)
Other Property and Casualty segment income		0.8			1.2			2.1			1.6
Total		(46.8	)		14.6			3.0			72.3
Interest expense on debt		(10.8	)		(11.7	)		(21.2	)		(21.0	)
Segment (loss) income before federal income taxes		(57.6	)		2.9			(18.2	)		51.3
Adjustments to segment income:
Net realized investment gains		13.4			0.2			16.7			11.1
Costs related to acquired businesses		(11.1	)		—			(13.8	)		—
Loss on derivative instruments		(4.7	)		—			(4.7	)		—
Gain (loss) from retirement of debt		0.3			—			(2.2	)		—
(Loss) income before federal income taxes	$	(59.7	)	$	3.1		$	(22.2	)	$	62.4

The following table provides identifiable assets for the Company's business segments and discontinued operations:

(In millions)	June 30, 2011		December 31, 2010
Property and Casualty	$	8,852.9	$	8,436.3
Discontinued operations		128.4		133.6
Total	$	8,981.3	$	8,569.9

The Company does not allocate assets between the Commercial Lines, Personal Lines and Other Property and Casualty segments.