Operations Summary

We write personal and commercial auto insurance, residential property insurance, and other specialty property-casualty insurance and provide related services throughout the United States. Our Personal Lines segment writes insurance for personal autos and recreational vehicles. Our Commercial Lines segment writes primarily liability and physical damage insurance for automobiles and trucks owned and/or operated predominantly by small businesses. Our Property segment writes insurance for single family homes, condominium units, etc. for homeowners, other property owners, and renters. We distribute our products through both the Agency and Direct channels.

Personal Lines

	Three Months Ended March 31,
		2017		2016	Change
Net premiums written (billions)	$	5.61	$	4.99	13%
Net premiums earned (billions)	$	5.16	$	4.57	13%
Loss and loss adjustment expense ratio		71.7		74.3	(2.6) pts.
Underwriting expense ratio		20.1		20.2	(0.1) pts.
Combined ratio		91.8		94.5	(2.7) pts.
Policies in force (thousands)		15,054.4		14,185.8	6%

Commercial Lines

	Three Months Ended March 31,
		2017		2016	Change
Net premiums written (billions)	$	0.66	$	0.66	0%
Net premiums earned (billions)	$	0.65	$	0.55	18%
Loss and loss adjustment expense ratio		67.6		66.4	1.2 pts.
Underwriting expense ratio		22.0		22.5	(0.5) pts.
Combined ratio		89.6		88.9	0.7 pts.
Policies in force (thousands)		607.5		575.1	6%

Property

	Three Months Ended March 31,
		2017		2016	Change
Net premiums written (billions)	$	0.22	$	0.17	27%
Net premiums earned (billions)	$	0.23	$	0.20	13%
Loss and loss adjustment expense ratio		59.3		77.9	(18.6) pts.
Underwriting expense ratio¹		37.3		34.3	3.0 pts.
Combined ratio¹		96.6		112.2	(15.6) pts.
Policies in force (thousands)		1,265.3		1,078.5	17%

¹Underwriting expense and combined ratios include amortization expense predominately associated with the acquisition of a controlling interest in ARX of 6.9 points and 7.8 points for the three months ended March 31, 2017 and 2016, respectively. Excluding these additional expenses, for the three months ended March 31, 2017 and 2016, the Property business would have reported an expense ratio of 30.4 and 26.5, respectively, and a combined ratio of 89.7 and 104.4, respectively.