8. Segment Information

The Company’s primary business operations include insurance products and services provided through four operating segments. The domestic operating segments are Commercial Lines, Personal Lines and Other, and the Company’s international operating segment is Chaucer. Commercial Lines includes commercial multiple peril, commercial automobile, workers’ compensation, and other commercial coverages, such as inland marine, specialty program business, management and professional liability, surety and specialty property. Personal Lines includes personal automobile, homeowners and other personal coverages. Chaucer includes marine, aviation and political, casualty (which includes international liability, specialist coverages, and run-off syndicate participations), energy, property, and assumed reinsurance treaty business (“treaty”). Included in the Other segment are Opus Investment Management, Inc., which markets investment management services to institutions, pension funds and other organizations; earnings on holding company assets; holding company and other expenses, including certain costs associated with retirement benefits due to the Company’s former life insurance employees and agents; and, a run-off voluntary pools business. The separate 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 reports interest expense related to debt separately from the earnings of its operating segments. This consists of interest on the Company’s senior debentures, subordinated debentures, collateralized borrowings with the Federal Home Loan Bank of Boston, and letter of credit facility. Management evaluates the results of the aforementioned segments based on operating income before taxes, excluding interest expense on debt. Operating income before taxes excludes certain items which are included in net income, such as net realized and unrealized investment gains and losses. Such gains and losses are excluded since they are determined by interest rates, financial markets and the timing of sales. Also, operating income before taxes excludes net gains and losses on disposals of businesses, gains and losses related to the repayment of debt, discontinued operations, costs to acquire businesses, restructuring costs, the cumulative effect of accounting changes and certain other items. Although the items excluded from operating income before taxes may be important components in understanding and assessing the Company’s overall financial performance, management believes that the presentation of operating income before taxes 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, operating income before taxes should not be construed as a substitute for income before income taxes and operating income should not be construed as a substitute for net income.

Summarized below is financial information with respect to the Company’s business segments.

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in millions)	2018			2017			2018			2017
Operating revenues:
Commercial Lines	$	681.7		$	634.5		$	1,358.3		$	1,265.0
Personal Lines		444.5			411.5			879.4			813.3
Chaucer		228.8			211.2			468.2			435.9
Other		4.1			3.0			7.5			5.0
Total		1,359.1			1,260.2			2,713.4			2,519.2
Net realized and unrealized investment gains (losses)		3.7			5.9			(19.7	)		7.8
Total revenues	$	1,362.8		$	1,266.1		$	2,693.7		$	2,527.0
Operating income (loss) before interest expense and income taxes:
Commercial Lines:
Underwriting income (loss)	$	37.7		$	2.3		$	54.1		$	(0.4	)
Net investment income		44.8			41.3			90.1			81.6
Other expense		(0.5	)		(0.4	)		(0.7	)		(0.6	)
Commercial Lines operating income		82.0			43.2			143.5			80.6
Personal Lines:
Underwriting income		8.0			29.5			22.7			21.1
Net investment income		18.1			17.4			36.5			34.5
Other income		1.2			1.0			2.5			2.2
Personal Lines operating income		27.3			47.9			61.7			57.8
Chaucer:
Underwriting income		9.3			18.0			15.5			31.8
Net investment income		12.5			11.3			28.9			23.7
Other income (expense)		0.1			0.4			0.4			(0.9	)
Chaucer operating income		21.9			29.7			44.8			54.6
Other:
Underwriting loss		(1.4	)		(0.9	)		(2.7	)		(1.8	)
Net investment income		3.3			2.3			6.1			3.6
Other expense		(3.3	)		(3.3	)		(7.0	)		(6.8	)
Other operating (loss) gain		(1.4	)		(1.9	)		(3.6	)		5.0
Operating income before interest expense and income taxes		129.8			118.9			246.4			188.0
Interest on debt		(11.6	)		(12.2	)		(24.0	)		(24.2	)
Operating income before income taxes		118.2			106.7			222.4			163.8
Non-operating income items:
Net realized and unrealized investment gains (losses)		3.7			5.9			(19.7	)		7.8
Other non-operating items		(2.0	)		(1.6	)		(2.2	)		(1.6	)
Income before income taxes	$	119.9		$	111.0		$	200.5		$	170.0

The Company recognized approximately $2 million in net foreign exchange gains and $3 million in net foreign exchange losses in the Statements of Income during the three months ended June 30, 2018 and 2017, respectively. The Company recognized approximately $1 million in net foreign exchange gains and $4 million in net foreign exchange losses in the Statements of Income during the six months ended June 30, 2018 and 2017, respectively.

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

	June 30, 2018		December 31, 2017
(in millions)	Identifiable Assets
U.S. Companies	$	11,049.8	$	10,909.2
Chaucer		4,251.2		4,472.4
Discontinued operations		102.6		88.0
Total	$	15,403.6	$	15,469.6

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