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Investments (Tables)

9 Months Ended

Sep. 30, 2020

Investments, Debt and Equity Securities [Abstract]

Schedule of Debt and Equity Securities Reconciliation

The following tables present the composition of our investment portfolio by major security type, consistent with our classification of how we manage, monitor, and measure the portfolio. Our securities are reported in our consolidated balance sheets at fair value. The changes in fair value for our fixed-maturity securities (other than hybrid securities) are reported as a component of accumulated other comprehensive income, net of deferred income taxes, in our consolidated balance sheets. The net holding period gains (losses) reported below represent the inception-to-date changes in fair value of the securities. The changes in the net holding period gains (losses) between periods for the hybrid securities and equity securities are recorded as a component of net realized gains (losses) on securities in our consolidated statements of comprehensive income. During the third quarter 2020, the portfolio’s valuation rose as markets continued to recover from their first quarter declines.

($ in millions)			Cost						Gross Unrealized Gains						Gross Unrealized Losses						Net Holding Period Gains (Losses)						Fair Value						% of Total Fair Value
September 30, 2020
Available-for-sale securities:
Fixed maturities:
U.S. government obligations			$	9,835.1					$	370.3					$	(1.6)					$	0					$	10,203.8					22.3		%
State and local government obligations			4,382.1						148.2						(0.5)						0						4,529.8						9.9
Corporate debt securities			10,038.7						574.7						(3.6)						2.2						10,612.0						23.2
Residential mortgage-backed securities			525.4						7.0						(1.4)						0						531.0						1.2
Commercial mortgage-backed securities			5,964.4						117.1						(27.9)						0						6,053.6						13.2
Other asset-backed securities			4,155.8						46.8						(2.3)						0						4,200.3						9.2
Redeemable preferred stocks			181.3						2.5						(3.2)						2.4						183.0						0.4
Total fixed maturities			35,082.8						1,266.6						(40.5)						4.6						36,313.5						79.4
Short-term investments			4,667.8						0						0						0						4,667.8						10.2
Total available-for-sale securities			39,750.6						1,266.6						(40.5)						4.6						40,981.3						89.6
Equity securities:
Nonredeemable preferred stocks			1,302.7						0						0						20.5						1,323.2						2.9
Common equities			1,130.0						0						0						2,329.8						3,459.8						7.5
Total equity securities			2,432.7						0						0						2,350.3						4,783.0						10.4
Total portfolio1,2			$	42,183.3					$	1,266.6					$	(40.5)					$	2,354.9					$	45,764.3					100.0		%

($ in millions)			Cost						Gross Unrealized Gains						Gross Unrealized Losses						Net Holding Period Gains (Losses)						Fair Value						% of Total Fair Value
September 30, 2019
Available-for-sale securities:
Fixed maturities:
U.S. government obligations			$	13,387.6					$	300.3					$	(9.2)					$	0					$	13,678.7					35.4		%
State and local government obligations			1,652.2						32.6						(1.1)						0						1,683.7						4.4
Corporate debt securities			7,048.9						231.6						(0.4)						1.0						7,281.1						18.9
Residential mortgage-backed securities			677.5						5.5						(1.5)						0						681.5						1.8
Commercial mortgage-backed securities			4,547.9						93.0						(1.9)						0						4,639.0						12.0
Other asset-backed securities			4,601.0						21.5						(0.6)						0						4,621.9						12.0
Redeemable preferred stocks			219.8						4.4						(2.5)						5.1						226.8						0.6
Total fixed maturities			32,134.9						688.9						(17.2)						6.1						32,812.7						85.1
Short-term investments			1,467.4						0						0						0						1,467.4						3.8
Total available-for-sale securities			33,602.3						688.9						(17.2)						6.1						34,280.1						88.9
Equity securities:
Nonredeemable preferred stocks			1,054.2						0						0						74.3						1,128.5						2.9
Common equities			1,210.3						0						0						1,954.8						3,165.1						8.2
Total equity securities			2,264.5						0						0						2,029.1						4,293.6						11.1
Total portfolio1,2			$	35,866.8					$	688.9					$	(17.2)					$	2,035.2					$	38,573.7					100.0		%

($ in millions)			Cost						Gross Unrealized Gains						Gross Unrealized Losses						Net Holding Period Gains (Losses)						Fair Value						% of Total Fair Value
December 31, 2019
Available-for-sale securities:
Fixed maturities:
U.S. government obligations			$	13,100.7					$	194.1					$	(43.7)					$	0					$	13,251.1					33.7		%
State and local government obligations			1,686.0						30.0						(2.7)						0						1,713.3						4.4
Corporate debt securities			6,860.3						206.6						(0.5)						1.3						7,067.7						18.0
Residential mortgage-backed securities			625.0						4.5						(2.0)						0						627.5						1.6
Commercial mortgage-backed securities			5,020.7						61.5						(6.0)						0						5,076.2						12.9
Other asset-backed securities			5,164.7						16.2						(1.4)						0						5,179.5						13.2
Redeemable preferred stocks			185.7						4.1						(1.3)						6.5						195.0						0.5
Total fixed maturities			32,643.1						517.0						(57.6)						7.8						33,110.3						84.3
Short-term investments			1,798.8						0						0						0						1,798.8						4.6
Total available-for-sale securities			34,441.9						517.0						(57.6)						7.8						34,909.1						88.9
Equity securities:
Nonredeemable preferred stocks			971.3						0						0						67.6						1,038.9						2.7
Common equities			1,125.5						0						0						2,180.8						3,306.3						8.4
Total equity securities			2,096.8						0						0						2,248.4						4,345.2						11.1
Total portfolio1,2			$	36,538.7					$	517.0					$	(57.6)					$	2,256.2					$	39,254.3					100.0		%

1Our portfolio reflects the effect of net unsettled security transactions; at September 30, 2020, we had $469.2 million in other liabilities, compared to $286.5 million and $11.9 million at September 30, 2019 and December 31, 2019, respectively.

2The total fair value of the portfolio at September 30, 2020 and 2019, and December 31, 2019, included $2.8 billion, $1.5 billion, and $3.2 billion, respectively, of securities held in a consolidated, non-insurance subsidiary of the holding company, net of any unsettled security transactions.

Hybrid Instruments Table

Included in our fixed-maturity securities are hybrid securities, which are reported at fair value:

			September 30,
(millions)			2020						2019						December 31, 2019
Fixed maturities:
State and local government obligations			$	0					$	3.5					$	3.5
Corporate debt securities			101.0						91.3						91.2
Other asset-backed securities			18.7						3.0						2.6
Redeemable preferred stocks			122.5						90.7						92.1
Total hybrid securities			$	242.2					$	188.5					$	189.4

Investments Classified by Contractual Maturity Date

The composition of fixed maturities by maturity at September 30, 2020, was:

(millions)			Cost						Fair Value
Less than one year			$	5,794.9					$	5,827.6
One to five years			19,507.0						20,100.9
Five to ten years			9,319.7						9,900.1
Ten years or greater			461.2						484.9
Total			$	35,082.8					$	36,313.5

Schedule of Unrealized Loss on Investments

The following tables show the composition of gross unrealized losses by major security type and by the length of time that individual securities have been in a continuous unrealized loss position:

			Total No. of Sec.			Total Fair Value			Gross Unrealized Losses			Less than 12 Months												12 Months or Greater
($ in millions)												No. of Sec.			Fair Value			Unrealized Losses						No. of Sec.			Fair Value			Unrealized Losses
September 30, 2020
Fixed maturities:
U.S. government obligations			13			$	1,993.8		$	(1.6)		13			$	1,993.8		$	(1.6)					0			$	0		$	0
State and local government obligations			45			320.1			(0.5)			45			320.1			(0.5)						0			0			0
Corporate debt securities			28			537.8			(3.6)			28			537.8			(3.6)						0			0			0
Residential mortgage-backed securities			28			86.7			(1.4)			9			38.7			(1.0)						19			48.0			(0.4)
Commercial mortgage-backed securities			77			1,794.8			(27.9)			46			1,170.4			(17.3)						31			624.4			(10.6)
Other asset-backed securities			22			191.5			(2.3)			11			146.5			(2.1)						11			45.0			(0.2)
Redeemable preferred stocks			1			9.3			(3.2)			0			0			0						1			9.3			(3.2)
Total fixed maturities			214			$	4,934.0		$	(40.5)		152			$	4,207.3		$	(26.1)					62			$	726.7		$	(14.4)

			Total No. of Sec.			Total Fair Value			Gross Unrealized Losses			Less than 12 Months												12 Months or Greater
($ in millions)												No. of Sec.			Fair Value			Unrealized Losses						No. of Sec.			Fair Value			Unrealized Losses
September 30, 2019
Fixed maturities:
U.S. government obligations			14			$	2,708.0		$	(9.2)		7			$	2,534.4		$	(8.9)					7			$	173.6		$	(0.3)
State and local government obligations			60			228.3			(1.1)			25			100.4			(0.7)						35			127.9			(0.4)
Corporate debt securities			24			245.5			(0.4)			5			77.2			(0.1)						19			168.3			(0.3)
Residential mortgage-backed securities			39			301.0			(1.5)			5			138.7			(0.1)						34			162.3			(1.4)
Commercial mortgage-backed securities			48			743.3			(1.9)			26			361.9			(0.8)						22			381.4			(1.1)
Other asset-backed securities			55			529.4			(0.6)			20			359.1			(0.2)						35			170.3			(0.4)
Redeemable preferred stocks			3			57.2			(2.5)			2			45.9			(1.3)						1			11.3			(1.2)
Total fixed maturities			243			$	4,812.7		$	(17.2)		90			$	3,617.6		$	(12.1)					153			$	1,195.1		$	(5.1)

			Total No. of Sec.			Total Fair Value			Gross Unrealized Losses			Less than 12 Months												12 Months or Greater
($ in millions)												No. of Sec.			Fair Value			Unrealized Losses						No. of Sec.			Fair Value			Unrealized Losses
December 31, 2019
Fixed maturities:
U.S. government obligations			23			$	5,152.4		$	(43.7)		19			$	5,057.2		$	(43.6)					4			$	95.2		$	(0.1)
State and local government obligations			67			314.3			(2.7)			52			287.5			(2.6)						15			26.8			(0.1)
Corporate debt securities			16			247.6			(0.5)			12			191.4			(0.5)						4			56.2			0
Residential mortgage-backed securities			41			292.8			(2.0)			12			163.7			(0.9)						29			129.1			(1.1)
Commercial mortgage-backed securities			98			1,742.4			(6.0)			79			1,400.0			(5.3)						19			342.4			(0.7)
Other asset-backed securities			61			1,000.6			(1.4)			43			938.5			(0.9)						18			62.1			(0.5)
Redeemable preferred stocks			1			11.2			(1.3)			0			0			0						1			11.2			(1.3)
Total fixed maturities			307			$	8,761.3		$	(57.6)		217			$	8,038.3		$	(53.8)					90			$	723.0		$	(3.8)

Realized Gain (Loss) on Investments

The components of net realized gains (losses) for the three and nine months ended September 30, were:

			Three Months												Nine Months
(millions)			2020						2019						2020						2019
Gross realized gains on security sales
Available-for-sale securities:
U.S. government obligations			$	90.2					$	41.5					$	565.8					$	113.0
State and local government obligations			43.9						1.8						58.9						4.0
Corporate and other debt securities			58.8						21.3						125.5						68.5
Residential mortgage-backed securities			0						0						0						0.2
Commercial mortgage-backed securities			5.0						2.6						15.4						6.2
Other asset-backed securities			0.2						0.1						0.2						0.8
Total available-for-sale securities			198.1						67.3						765.8						192.7
Equity securities:
Nonredeemable preferred stocks			0.3						3.6						20.0						20.2
Common equities			2.0						4.7						77.1						9.4
Total equity securities			2.3						8.3						97.1						29.6
Subtotal gross realized gains on security sales			200.4						75.6						862.9						222.3
Gross realized losses on security sales
Available-for-sale securities:
U.S. government obligations			(1.5)						(1.5)						(4.8)						(13.9)
State and local government obligations			0						0						0						(0.7)
Corporate and other debt securities			0						(0.2)						(6.5)						(7.7)
Residential mortgage-backed securities			0						0						0						(2.3)
Commercial mortgage-backed securities			(2.9)						0						(12.7)						(2.1)
Other asset-backed securities			0						0						0						(0.1)
Redeemable preferred stocks			0						(0.2)						0						(0.3)
Total available-for-sale securities			(4.4)						(1.9)						(24.0)						(27.1)
Equity securities:
Nonredeemable preferred stocks			(0.1)						(2.0)						(7.5)						(2.0)
Common equities			0						0						(60.3)						(7.9)
Total equity securities			(0.1)						(2.0)						(67.8)						(9.9)
Subtotal gross realized losses on security sales			(4.5)						(3.9)						(91.8)						(37.0)
Net realized gains (losses) on security sales
Available-for-sale securities:
U.S. government obligations			88.7						40.0						561.0						99.1
State and local government obligations			43.9						1.8						58.9						3.3
Corporate and other debt securities			58.8						21.1						119.0						60.8
Residential mortgage-backed securities			0						0						0						(2.1)
Commercial mortgage-backed securities			2.1						2.6						2.7						4.1
Other asset-backed securities			0.2						0.1						0.2						0.7
Redeemable preferred stocks			0						(0.2)						0						(0.3)
Total available-for-sale securities			193.7						65.4						741.8						165.6
Equity securities:
Nonredeemable preferred stocks			0.2						1.6						12.5						18.2
Common equities			2.0						4.7						16.8						1.5
Total equity securities			2.2						6.3						29.3						19.7
Subtotal net realized gains (losses) on security sales			195.9						71.7						771.1						185.3
Net holding period gains (losses)
Hybrid securities			3.2						4.2						(3.2)						16.3
Equity securities			333.5						27.6						101.9						520.6
Subtotal net holding period gains (losses)			336.7						31.8						98.7						536.9
Impairment losses
Other asset impairment			0						(38.1)						0						(62.4)
Subtotal impairment losses			0						(38.1)						0						(62.4)
Total net realized gains (losses) on securities			$	532.6					$	65.4					$	869.8					$	659.8

Components of Equity Realized Gains (Losses)

The following table reflects our holding period realized gains (losses) on equity securities recognized for the three and nine months ended September 30, 2020 and 2019, for equity securities held at the respective quarter end:

			Three Months									Nine Months
(millions)			2020			2019						2020			2019
Total net gains (losses) recognized during the period on equity securities			$	335.7		$	33.9					$	131.2		$	540.3
Less: Net gains (losses) recognized on equity securities sold during the period			2.2			6.3						29.3			19.7
Net holding period gains (losses) recognized during the period on equity securities held at period end			$	333.5		$	27.6					$	101.9		$	520.6

Components of Net Investment Income

The components of net investment income for the three and nine months ended September 30, were: 

			Three Months									Nine Months
(millions)			2020			2019						2020			2019
Available-for-sale securities:
Fixed maturities:
U.S. government obligations			$	36.7		$	75.8					$	135.0		$	198.7
State and local government obligations			18.5			8.7						44.2			26.9
Corporate debt securities			76.6			65.1						211.2			209.8
Residential mortgage-backed securities			0.8			5.4						8.8			16.6
Commercial mortgage-backed securities			37.3			35.6						114.2			100.7
Other asset-backed securities			22.6			31.4						76.6			85.5
Redeemable preferred stocks			2.5			3.9						12.5			16.1
Total fixed maturities			195.0			225.9						602.5			654.3
Short-term investments			6.2			7.1						26.9			34.3
Total available-for-sale securities			201.2			233.0						629.4			688.6
Equity securities:
Nonredeemable preferred stocks			15.8			15.9						44.3			47.3
Common equities			13.5			14.1						41.8			41.3
Total equity securities			29.3			30.0						86.1			88.6
Investment income			230.5			263.0						715.5			777.2
Investment expenses			(4.7)			(5.9)						(14.5)			(18.3)
Net investment income			$	225.8		$	257.1					$	701.0		$	758.9

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