Segment Information

9 Months Ended

Sep. 30, 2011

Segment Information [Abstract]

Segment Information

10. Segment Information

The Company's primary business operations include insurance products and services provided through four operating segments. These operating segments are Commercial Lines, Personal Lines, Other Property and Casualty and, with the acquisition on July 1, 2011, the Chaucer segment. Commercial Lines includes commercial multiple peril, commercial automobile, workers' compensation, and other commercial coverages, such as specialty program business, inland marine, surety and other bonds, professional liability and management liability. Personal Lines includes personal automobile, homeowners and other personal coverages. Chaucer includes property, marine and aviation, energy, U.K. motor, and casualty and other coverages (which includes international liability, specialist coverages, and syndicate participations). 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; and, a 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 income (loss) includes the results of its four operating segments (segment income (loss)), which management evaluates on a pre-tax basis, and interest expense on debt. Segment income (loss) excludes certain items which are included in net income (loss), such as income taxes and net realized investment gains and losses, including gains and losses from certain derivative instruments because fluctuations in these gains and losses are determined by interest rates, financial markets and timing of sales. Also, segment income (loss) excludes net gains and losses on disposals of businesses, discontinued operations, costs to acquire businesses, restructuring costs, extraordinary items, the cumulative effect of accounting changes and certain other items. Although the items excluded from segment income (loss) 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 income (loss) should not be construed as a substitute for net income (loss) determined in accordance with generally accepted accounting principles.

Summarized below is financial information with respect to business segments:

	Three Months Ended September 30,						Nine Months Ended September 30,
(in millions)	2011			2010			2011			2010
Segment revenues:
Commercial Lines	$	449.4		$	397.2		$	1,336.6		$	1,099.3
Personal Lines		389.9			397.1			1,164.8			1,190.3
Chaucer		257.5			—			257.5			—
Other Property and Casualty		4.2			5.1			15.6			15.9
Total		1,101.0			799.4			2,774.5			2,305.5
Intersegment revenues		(1.2	)		(1.1	)		(3.7	)		(3.4	)
Total segment revenues		1,099.8			798.3			2,770.8			2,302.1
Net realized investment gains		8.2			5.7			24.9			16.8
Total revenues	$	1,108.0		$	804.0		$	2,795.7		$	2,318.9
Segment income (loss) before income taxes:
Commercial Lines:
GAAP underwriting income (loss)	$	(56.7	)	$	2.3		$	(132.0	)	$	(22.5	)
Net investment income		34.0			32.3			101.6			96.6
Other income		0.6			0.5			2.0			0.7
Commercial Lines segment income (loss)		(22.1	)		35.1			(28.4	)		74.8
Personal Lines:
GAAP underwriting income (loss)		(28.9	)		15.2			(69.8	)		(8.7	)
Net investment income		22.7			25.4			68.5			76.6
Other income		1.4			2.4			3.7			6.1
Personal Lines segment income (loss)		(4.8	)		43.0			2.4			74.0
Chaucer:
GAAP underwriting income (loss)		12.1			—			12.1			—
Net investment income		8.6			—			8.6			—
Other net expenses		(0.8	)		—			(0.8	)		—
Chaucer segment income (loss)		19.9			—			19.9			—
Other Property and Casualty:
GAAP underwriting income (loss)		—			0.4			0.1			0.7
Net investment income		2.5			3.6			10.5			11.0
Other net expenses		(3.1	)		(2.9	)		(9.1	)		(9.0	)
Other Property and Casualty segment income (loss)		(0.6	)		1.1			1.5			2.7
Total		(7.6	)		79.2			(4.6	)		151.5
Interest expense on debt		(17.4	)		(11.8	)		(38.6	)		(32.8	)
Segment income (loss) before income taxes		(25.0	)		67.4			(43.2	)		118.7
Adjustments to segment income (loss):
Net realized investment gains		8.2			5.7			24.9			16.8
Net loss from retirement of debt		(0.1	)		—			(2.3	)		—
Costs related to acquired businesses		(1.9	)		—			(15.7	)		—
Loss on derivative instruments		(6.6	)		—			(11.3	)		—
Net foreign exchange gains		6.7			—			6.7			—
Income (loss) before income taxes	$	(18.7	)	$	73.1		$	(40.9	)	$	135.5

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

(in millions)	September 30, 2011		December 31, 2010
U.S. Companies	$	8,468.4	$	8,436.3
Chaucer		4,088.8		—
Discontinued operations		127.3		133.6
Total	$	12,684.5	$	8,569.9

The Company does not allocate assets of its U.S. Companies between the Commercial Lines, Personal Lines, and Other Property and Casualty segments.