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v3.23.3

Investments | 9 Months Ended
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Sep. 30, 2023
Investments, Debt and Equity Securities [Abstract] |
Investments | INVESTMENTS The following tables present the composition of our investment portfolio by major security type. 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 (loss), 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 for the hybrid and equity securities. The changes in the net holding period gains (losses) between periods are recorded as a component of net realized gains (losses) on securities in our consolidated statements of comprehensive income.
($ in millions) | Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Net Holding Period Gains (Losses) |  | Fair Value |  | % of Total Fair Value
September 30, 2023 |  |  |  |  |  |  |  |  |  |  |
Available-for-sale securities: |  |  |  |  |  |  |  |  |  |  |
Fixed maturities: |  |  |  |  |  |  |  |  |  |  |
U.S. government obligations | $ | 36,392.2 |  |  | $ | 0 |  |  | $ | (2,098.4) |  |  | $ | 0 |  |  | $ | 34,293.8 |  |  | 55.4 | %
State and local government obligations | 2,257.6 |  |  | 0 |  |  | (203.3) |  |  | 0 |  |  | 2,054.3 |  |  | 3.3 |
Foreign government obligations | 16.9 |  |  | 0 |  |  | (1.5) |  |  | 0 |  |  | 15.4 |  |  | 0.1 |
Corporate debt securities | 10,880.8 |  |  | 1.3 |  |  | (591.8) |  |  | (36.1) |  |  | 10,254.2 |  |  | 16.6 |
Residential mortgage-backed securities | 530.4 |  |  | 0.2 |  |  | (13.0) |  |  | (1.8) |  |  | 515.8 |  |  | 0.8 |
Commercial mortgage-backed securities | 4,699.5 |  |  | 2.1 |  |  | (723.9) |  |  | 0 |  |  | 3,977.7 |  |  | 6.4 |
Other asset-backed securities | 5,524.2 |  |  | 0.1 |  |  | (210.1) |  |  | (0.6) |  |  | 5,313.6 |  |  | 8.6 |
Redeemable preferred stocks | 189.0 |  |  | 0 |  |  | (4.3) |  |  | (17.6) |  |  | 167.1 |  |  | 0.3 |
Total fixed maturities | 60,490.6 |  |  | 3.7 |  |  | (3,846.3) |  |  | (56.1) |  |  | 56,591.9 |  |  | 91.5 |
Short-term investments | 1,795.2 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 1,795.2 |  |  | 2.9 |
Total available-for-sale securities | 62,285.8 |  |  | 3.7 |  |  | (3,846.3) |  |  | (56.1) |  |  | 58,387.1 |  |  | 94.4 |
Equity securities: |  |  |  |  |  |  |  |  |  |  |
Nonredeemable preferred stocks | 976.9 |  |  | 0 |  |  | 0 |  |  | (108.0) |  |  | 868.9 |  |  | 1.4 |
Common equities | 662.6 |  |  | 0 |  |  | 0 |  |  | 1,951.9 |  |  | 2,614.5 |  |  | 4.2 |
Total equity securities | 1,639.5 |  |  | 0 |  |  | 0 |  |  | 1,843.9 |  |  | 3,483.4 |  |  | 5.6 |
Total portfolio 1 | $ | 63,925.3 |  |  | $ | 3.7 |  |  | $ | (3,846.3) |  |  | $ | 1,787.8 |  |  | $ | 61,870.5 |  |  | 100.0 | %
($ in millions) | Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Net Holding Period Gains (Losses) |  | Fair Value |  | % of Total Fair Value
September 30, 2022 |  |  |  |  |  |  |  |  |  |  |
Available-for-sale securities: |  |  |  |  |  |  |  |  |  |  |
Fixed maturities: |  |  |  |  |  |  |  |  |  |  |
U.S. government obligations | $ | 24,260.9 |  |  | $ | 0 |  |  | $ | (1,855.4) |  |  | $ | 0 |  |  | $ | 22,405.5 |  |  | 42.8 | %
State and local government obligations | 2,140.9 |  |  | 0 |  |  | (215.4) |  |  | 0 |  |  | 1,925.5 |  |  | 3.7 |
Foreign government obligations | 16.7 |  |  | 0 |  |  | (1.4) |  |  | 0 |  |  | 15.3 |  |  | 0.1 |
Corporate debt securities | 10,119.8 |  |  | 0 |  |  | (832.5) |  |  | (58.9) |  |  | 9,228.4 |  |  | 17.6 |
Residential mortgage-backed securities | 754.2 |  |  | 0.4 |  |  | (16.5) |  |  | (15.1) |  |  | 723.0 |  |  | 1.4 |
Commercial mortgage-backed securities | 5,833.9 |  |  | 1.4 |  |  | (747.4) |  |  | 0 |  |  | 5,087.9 |  |  | 9.7 |
Other asset-backed securities | 4,876.7 |  |  | 0 |  |  | (268.9) |  |  | (1.9) |  |  | 4,605.9 |  |  | 8.8 |
Redeemable preferred stocks | 202.6 |  |  | 0 |  |  | (5.6) |  |  | (15.4) |  |  | 181.6 |  |  | 0.3 |
Total fixed maturities | 48,205.7 |  |  | 1.8 |  |  | (3,943.1) |  |  | (91.3) |  |  | 44,173.1 |  |  | 84.4 |
Short-term investments | 4,237.6 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 4,237.6 |  |  | 8.1 |
Total available-for-sale securities | 52,443.3 |  |  | 1.8 |  |  | (3,943.1) |  |  | (91.3) |  |  | 48,410.7 |  |  | 92.5 |
Equity securities: |  |  |  |  |  |  |  |  |  |  |
Nonredeemable preferred stocks | 1,417.6 |  |  | 0 |  |  | 0 |  |  | (163.2) |  |  | 1,254.4 |  |  | 2.4 |
Common equities | 803.7 |  |  | 0 |  |  | 0 |  |  | 1,861.6 |  |  | 2,665.3 |  |  | 5.1 |
Total equity securities | 2,221.3 |  |  | 0 |  |  | 0 |  |  | 1,698.4 |  |  | 3,919.7 |  |  | 7.5 |
Total portfolio 1 | $ | 54,664.6 |  |  | $ | 1.8 |  |  | $ | (3,943.1) |  |  | $ | 1,607.1 |  |  | $ | 52,330.4 |  |  | 100.0 | %
($ in millions) | Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Net Holding Period Gains (Losses) |  | Fair Value |  | % of Total Fair Value
December 31, 2022 |  |  |  |  |  |  |  |  |  |  |
Available-for-sale securities: |  |  |  |  |  |  |  |  |  |  |
Fixed maturities: |  |  |  |  |  |  |  |  |  |  |
U.S. government obligations | $ | 26,770.7 |  |  | $ | 1.4 |  |  | $ | (1,604.7) |  |  | $ | 0 |  |  | $ | 25,167.4 |  |  | 47.0 | %
State and local government obligations | 2,180.0 |  |  | 0 |  |  | (202.9) |  |  | 0 |  |  | 1,977.1 |  |  | 3.7 |
Foreign government obligations | 16.8 |  |  | 0 |  |  | (1.3) |  |  | 0 |  |  | 15.5 |  |  | 0.1 |
Corporate debt securities | 10,125.8 |  |  | 9.8 |  |  | (676.1) |  |  | (46.8) |  |  | 9,412.7 |  |  | 17.6 |
Residential mortgage-backed securities | 696.1 |  |  | 0.3 |  |  | (17.5) |  |  | (12.1) |  |  | 666.8 |  |  | 1.2 |
Commercial mortgage-backed securities | 5,446.0 |  |  | 1.5 |  |  | (784.0) |  |  | 0 |  |  | 4,663.5 |  |  | 8.7 |
Other asset-backed securities | 4,826.0 |  |  | 0.9 |  |  | (260.5) |  |  | (1.8) |  |  | 4,564.6 |  |  | 8.5 |
Redeemable preferred stocks | 202.6 |  |  | 0 |  |  | (4.5) |  |  | (13.8) |  |  | 184.3 |  |  | 0.3 |
Total fixed maturities | 50,264.0 |  |  | 13.9 |  |  | (3,551.5) |  |  | (74.5) |  |  | 46,651.9 |  |  | 87.1 |
Short-term investments | 2,861.7 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 2,861.7 |  |  | 5.4 |
Total available-for-sale securities | 53,125.7 |  |  | 13.9 |  |  | (3,551.5) |  |  | (74.5) |  |  | 49,513.6 |  |  | 92.5 |
Equity securities: |  |  |  |  |  |  |  |  |  |  |
Nonredeemable preferred stocks | 1,364.2 |  |  | 0 |  |  | 0 |  |  | (151.0) |  |  | 1,213.2 |  |  | 2.3 |
Common equities | 826.1 |  |  | 0 |  |  | 0 |  |  | 1,995.4 |  |  | 2,821.5 |  |  | 5.2 |
Total equity securities | 2,190.3 |  |  | 0 |  |  | 0 |  |  | 1,844.4 |  |  | 4,034.7 |  |  | 7.5 |
Total portfolio 1 | $ | 55,316.0 |  |  | $ | 13.9 |  |  | $ | (3,551.5) |  |  | $ | 1,769.9 |  |  | $ | 53,548.3 |  |  | 100.0 | %
1 At September 30, 2023 and 2022, we had $167.3 million and $74.7 million, respectively, of net unsettled security purchase transactions included in other liabilities, compared to $34.4 million included in other assets at December 31, 2022. The total fair value of the portfolio at September 30, 2023 and 2022, and December 31, 2022, included $4.1 billion, $4.2 billion, and $4.4 billion, respectively, of securities held in a consolidated, non-insurance subsidiary of the holding company, net of unsettled security transactions. At September 30, 2023, bonds and certificates of deposit in the principal amount of $612.4 million were on deposit to meet state insurance regulatory requirements. We did not hold any securities of any one issuer, excluding U.S. government obligations, with an aggregate cost or fair value exceeding 10% of total shareholders’ equity at September 30, 2023 or 2022, or December 31, 2022. At September 30, 2023, we did not hold any debt securities that were non-income producing during the preceding 12 months. Short-Term Investments Our short-term investments may include commercial paper and other investments that are expected to mature or are redeemable within one year. We did not have any open repurchase or reverse repurchase transactions positions at September 30, 2023 and 2022, or December 31, 2022, and did not enter into any such transactions during the first nine months of 2023. During 2022, however, we did invest in repurchase transactions that had an immaterial impact on our results of operations and cash flows. To the extent we enter into repurchase or reverse repurchase transactions, consistent with past practice, we would elect not to offset these transactions and would report them on a gross basis in our consolidated balance sheets, despite the option to elect to offset these transactions as long as they were with the same counterparty and subject to an enforceable master netting arrangement. Hybrid Securities Certain securities in our fixed-maturity portfolio are accounted for as hybrid securities because they contain embedded derivatives that are not deemed to be clearly and closely related to the host investments. These securities are reported at fair value:
| September 30, |  |
(millions) | 2023 |  | 2022 |  | Dec. 31, 2022
Fixed Maturities: |  |  |  |  |
Corporate debt securities | $ | 511.1 |  |  | $ | 500.4 |  |  | $ | 535.4 |
Residential mortgage-backed securities | 410.8 |  |  | 550.8 |  |  | 509.6 |
Other asset-backed securities | 19.4 |  |  | 51.4 |  |  | 42.0 |
Redeemable preferred stocks | 136.4 |  |  | 133.0 |  |  | 134.7 |
Total hybrid securities | $ | 1,077.7 |  |  | $ | 1,235.6 |  |  | $ | 1,221.7 |
Since the embedded derivatives (e.g., change-in-control put option, debt-to-equity conversion, or any other feature unrelated to the credit quality or risk of default of the issuer that could impact the amount or timing of our expected future cash flows) do not have observable intrinsic values, we use the fair value option to record the changes in fair value of these securities through income as a component of net realized gains or losses. Fixed Maturities The composition of fixed maturities by maturity at September 30, 2023, was:
(millions) | Cost |  | Fair Value
Less than one year | $ | 9,639.9 |  |  | $ | 9,387.8 |
One to five years | 37,572.4 |  |  | 35,419.0 |
Five to ten years | 13,197.7 |  |  | 11,710.3 |
Ten years or greater | 80.6 |  |  | 74.8 |
Total | $ | 60,490.6 |  |  | $ | 56,591.9 |
Asset-backed securities are classified in the maturity distribution table based upon their projected cash flows. All other securities that do not have a single maturity date are reported based upon expected average maturity. Contractual maturities may differ from expected maturities because the issuers of the securities may have the right to call or prepay obligations. Gross Unrealized Losses 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, 2023 |  |  |  |  |  |  |  |  |  |  |
U.S. government obligations | 173 |  | $ | 34,293.8 |  | $ | (2,098.4) |  | 37 |  | $ | 16,686.2 |  | $ | (557.6) |  |  |  | 136 |  | $ | 17,607.6 |  | $ | (1,540.8) |
State and local government obligations | 356 |  | 2,033.9 |  | (203.3) |  | 46 |  | 359.6 |  | (7.6) |  |  |  | 310 |  | 1,674.3 |  | (195.7) |
Foreign government obligations | 1 |  | 15.4 |  | (1.5) |  | 0 |  | 0 |  | 0 |  |  |  | 1 |  | 15.4 |  | (1.5) |
Corporate debt securities | 467 |  | 9,490.0 |  | (591.8) |  | 164 |  | 3,380.4 |  | (94.1) |  |  |  | 303 |  | 6,109.6 |  | (497.7) |
Residential mortgage-backed securities | 40 |  | 99.9 |  | (13.0) |  | 2 |  | 0.4 |  | 0 |  |  |  | 38 |  | 99.5 |  | (13.0) |
Commercial mortgage-backed securities | 196 |  | 3,960.8 |  | (723.9) |  | 0 |  | 0 |  | 0 |  |  |  | 196 |  | 3,960.8 |  | (723.9) |
Other asset-backed securities | 295 |  | 5,001.8 |  | (210.1) |  | 104 |  | 2,056.9 |  | (8.8) |  |  |  | 191 |  | 2,944.9 |  | (201.3) |
Redeemable preferred stocks | 3 |  | 30.6 |  | (4.3) |  | 0 |  | 0 |  | 0 |  |  |  | 3 |  | 30.6 |  | (4.3) |
Total fixed maturities | 1,531 |  | $ | 54,926.2 |  | $ | (3,846.3) |  | 353 |  | $ | 22,483.5 |  | $ | (668.1) |  |  |  | 1,178 |  | $ | 32,442.7 |  | $ | (3,178.2) |
| 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, 2022 |  |  |  |  |  |  |  |  |  |
U.S. government obligations | 157 |  | $ | 22,385.4 |  | $ | (1,855.4) |  | 103 |  | $ | 16,085.8 |  | $ | (1,095.6) |  |  | 54 |  | $ | 6,299.6 |  | $ | (759.8) |
State and local government obligations | 353 |  | 1,911.0 |  | (215.4) |  | 292 |  | 1,363.1 |  | (129.8) |  |  | 61 |  | 547.9 |  | (85.6) |
Foreign government obligations | 1 |  | 15.3 |  | (1.4) |  | 1 |  | 15.3 |  | (1.4) |  |  | 0 |  | 0 |  | 0 |
Corporate debt securities | 452 |  | 8,885.6 |  | (832.5) |  | 391 |  | 7,875.5 |  | (699.0) |  |  | 61 |  | 1,010.1 |  | (133.5) |
Residential mortgage-backed securities | 44 |  | 165.1 |  | (16.5) |  | 34 |  | 126.0 |  | (11.8) |  |  | 10 |  | 39.1 |  | (4.7) |
Commercial mortgage-backed securities | 234 |  | 5,074.3 |  | (747.4) |  | 182 |  | 3,856.0 |  | (425.4) |  |  | 52 |  | 1,218.3 |  | (322.0) |
Other asset-backed securities | 277 |  | 4,544.8 |  | (268.9) |  | 217 |  | 3,597.1 |  | (183.4) |  |  | 60 |  | 947.7 |  | (85.5) |
Redeemable preferred stocks | 4 |  | 48.6 |  | (5.6) |  | 3 |  | 37.7 |  | (4.0) |  |  | 1 |  | 10.9 |  | (1.6) |
Total fixed maturities | 1,522 |  | $ | 43,030.1 |  | $ | (3,943.1) |  | 1,223 |  | $ | 32,956.5 |  | $ | (2,550.4) |  |  | 299 |  | $ | 10,073.6 |  | $ | (1,392.7) |
| 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, 2022 |  |  |  |  |  |  |  |  |  |
U.S. government obligations | 160 |  | $ | 24,802.5 |  | $ | (1,604.7) |  | 90 |  | $ | 17,327.2 |  | $ | (699.2) |  |  | 70 |  | $ | 7,475.3 |  | $ | (905.5) |
State and local government obligations | 348 |  | 1,948.8 |  | (202.9) |  | 239 |  | 1,124.2 |  | (76.8) |  |  | 109 |  | 824.6 |  | (126.1) |
Foreign government obligations | 1 |  | 15.5 |  | (1.3) |  | 0 |  | 0 |  | 0 |  |  | 1 |  | 15.5 |  | (1.3) |
Corporate debt securities | 422 |  | 8,449.6 |  | (676.1) |  | 285 |  | 5,717.6 |  | (426.1) |  |  | 137 |  | 2,732.0 |  | (250.0) |
Residential mortgage-backed securities | 45 |  | 151.0 |  | (17.5) |  | 27 |  | 65.1 |  | (6.8) |  |  | 18 |  | 85.9 |  | (10.7) |
Commercial mortgage-backed securities | 226 |  | 4,651.1 |  | (784.0) |  | 99 |  | 1,702.0 |  | (192.1) |  |  | 127 |  | 2,949.1 |  | (591.9) |
Other asset-backed securities | 262 |  | 4,247.8 |  | (260.5) |  | 130 |  | 2,144.8 |  | (100.9) |  |  | 132 |  | 2,103.0 |  | (159.6) |
Redeemable preferred stocks | 4 |  | 49.6 |  | (4.5) |  | 3 |  | 38.5 |  | (3.1) |  |  | 1 |  | 11.1 |  | (1.4) |
Total fixed maturities | 1,468 |  | $ | 44,315.9 |  | $ | (3,551.5) |  | 873 |  | $ | 28,119.4 |  | $ | (1,505.0) |  |  | 595 |  | $ | 16,196.5 |  | $ | (2,046.5) |
During the third quarter 2023, the credit ratings of our U.S. government obligations went down due to two major credit rating agencies rating U.S. government debt at AA+ instead of AAA. Additionally, we had 14 securities in other fixed-maturity sectors that had their credit ratings downgraded, with a combined fair value of $144.2 million and an unrealized loss of $7.1 million as of September 30, 2023. A review of the securities in an unrealized loss position indicated that the issuers were current with respect to their interest obligations and that there was no evidence of deterioration of the current cash flow projections that would indicate we would not receive the remaining principal at maturity. Allowance For Credit and Uncollectible Losses We are required to measure the amount of potential credit losses for all fixed-maturity securities in an unrealized loss position. We did not record any allowances for credit losses or any write-offs for amounts deemed to be uncollectible during the first nine months of 2023 or 2022, and did not have a material credit loss allowance balance as of September 30, 2023 and 2022, or December 31, 2022. We considered several factors and inputs related to the individual securities as part of our analysis. The methodology and significant inputs used to measure the amount of credit losses in our portfolio included: •current performance indicators on the business model or underlying assets (e.g., delinquency rates, foreclosure rates, and default rates); •credit support (via current levels of subordination); •historical credit ratings; and •updated cash flow expectations based upon these performance indicators. In order to determine the amount of credit loss, if any, we initially reviewed securities in a loss position to determine whether it was likely that we would be required, or intended, to sell any of the securities prior to the recovery of their respective cost bases (which could be maturity). If we were likely to, or intended to, sell prior to a potential recovery, we would write off the unrealized loss. For those securities that we determined we were not likely to, or did not intend to, sell prior to a potential recovery, we performed additional analysis to determine if the loss was credit related. For securities subject to credit related loss, we calculated the net present value (NPV) of the cash flows expected (i.e., expected recovery value) using the current book yield for each security. The NPV was then compared to the security’s current amortized value to determine if a credit loss existed. In the event that the NPV was below the amortized value, and the amount was determined to be material individually, or in the aggregate, a credit loss would be deemed to exist, and either an allowance for credit losses would be created, or if an allowance currently existed, either a recovery of the previous allowance, or an incremental loss, would be recorded to net realized gains (losses) on securities. As of September 30, 2023 and 2022, and December 31, 2022, we believe none of the unrealized losses were related to material credit losses on any individual security, or in the aggregate. We continue to expect all the securities in our portfolio to pay their principal and interest obligations. In addition, we reviewed our accrued investment income outstanding on those securities in an unrealized loss position at September 30, 2023 and 2022, and December 31, 2022, to determine if the accrued interest amounts were determined to be uncollectible. Based on our analysis, we believe the issuers have sufficient liquidity and capital reserves to meet their current interest, and future principal, obligations and, therefore, did not write off any accrued income as uncollectible at September 30, 2023 and 2022, or December 31, 2022. Realized Gains (Losses) The components of net realized gains (losses) for the three and nine months ended September 30, were:
| Three Months |  | Nine Months
(millions) | 2023 |  | 2022 |  | 2023 |  | 2022
Gross realized gains on security sales |  |  |  |  |  |  |
Available-for-sale securities: |  |  |  |  |  |  |
U.S. government obligations | $ | 0.2 |  |  | $ | 0 |  |  | $ | 4.2 |  |  | $ | 4.6 |
Corporate debt securities | 0.7 |  |  | 0.3 |  |  | 0.8 |  |  | 6.8 |
Residential mortgage-backed securities | 0 |  |  | 0 |  |  | 0 |  |  | 0.7 |
Other asset-backed securities | 0 |  |  | 0 |  |  | 0 |  |  | 0.1 |
Total available-for-sale securities | 0.9 |  |  | 0.3 |  |  | 5.0 |  |  | 12.2 |
Equity securities: |  |  |  |  |  |  |
Nonredeemable preferred stocks | 0 |  |  | 0.1 |  |  | 0.3 |  |  | 17.6 |
Common equities | 0.3 |  |  | 1.4 |  |  | 354.2 |  |  | 832.5 |
Total equity securities | 0.3 |  |  | 1.5 |  |  | 354.5 |  |  | 850.1 |
Subtotal gross realized gains on security sales | 1.2 |  |  | 1.8 |  |  | 359.5 |  |  | 862.3 |
Gross realized losses on security sales |  |  |  |  |  |  |
Available-for-sale securities: |  |  |  |  |  |  |
U.S. government obligations | (14.6) |  |  | 0 |  |  | (27.2) |  |  | (233.5) |
State and local government obligations | 0 |  |  | 0 |  |  | 0 |  |  | (1.0) |
Corporate debt securities | (19.1) |  |  | (14.0) |  |  | (69.3) |  |  | (51.8) |
Commercial mortgage-backed securities | (20.6) |  |  | (44.8) |  |  | (100.6) |  |  | (58.6) |
Other asset-backed securities | (5.2) |  |  | 0 |  |  | (5.6) |  |  | (2.1) |
Short-term investments | 0 |  |  | 0 |  |  | (0.4) |  |  | (0.3) |
Total available-for-sale securities | (59.5) |  |  | (58.8) |  |  | (203.1) |  |  | (347.3) |
Equity securities: |  |  |  |  |  |  |
Nonredeemable preferred stocks | (7.4) |  |  | (5.1) |  |  | (117.6) |  |  | (7.0) |
Common equities | (8.9) |  |  | 0 |  |  | (21.8) |  |  | (78.0) |
Total equity securities | (16.3) |  |  | (5.1) |  |  | (139.4) |  |  | (85.0) |
Subtotal gross realized losses on security sales | (75.8) |  |  | (63.9) |  |  | (342.5) |  |  | (432.3) |
Net realized gains (losses) on security sales |  |  |  |  |  |  |
Available-for-sale securities: |  |  |  |  |  |  |
U.S. government obligations | (14.4) |  |  | 0 |  |  | (23.0) |  |  | (228.9) |
State and local government obligations | 0 |  |  | 0 |  |  | 0 |  |  | (1.0) |
Corporate debt securities | (18.4) |  |  | (13.7) |  |  | (68.5) |  |  | (45.0) |
Residential mortgage-backed securities | 0 |  |  | 0 |  |  | 0 |  |  | 0.7 |
Commercial mortgage-backed securities | (20.6) |  |  | (44.8) |  |  | (100.6) |  |  | (58.6) |
Other asset-backed securities | (5.2) |  |  | 0 |  |  | (5.6) |  |  | (2.0) |
Short-term investments | 0 |  |  | 0 |  |  | (0.4) |  |  | (0.3) |
Total available-for-sale securities | (58.6) |  |  | (58.5) |  |  | (198.1) |  |  | (335.1) |
Equity securities: |  |  |  |  |  |  |
Nonredeemable preferred stocks | (7.4) |  |  | (5.0) |  |  | (117.3) |  |  | 10.6 |
Common equities | (8.6) |  |  | 1.4 |  |  | 332.4 |  |  | 754.5 |
Total equity securities | (16.0) |  |  | (3.6) |  |  | 215.1 |  |  | 765.1 |
Subtotal net realized gains (losses) on security sales | (74.6) |  |  | (62.1) |  |  | 17.0 |  |  | 430.0 |
Other assets |  |  |  |  |  |  |
Gain | 8.4 |  |  | 0 |  |  | 21.6 |  |  | 0 |
Impairment | (2.3) |  |  | (2.2) |  |  | (6.8) |  |  | (6.5) |
Subtotal net realized gains (losses) on other assets | 6.1 |  |  | (2.2) |  |  | 14.8 |  |  | (6.5) |
Net holding period gains (losses) |  |  |  |  |  |  |
Hybrid securities | (0.3) |  |  | (11.4) |  |  | 18.4 |  |  | (98.8) |
Equity securities | (80.2) |  |  | (140.7) |  |  | (0.5) |  |  | (2,164.1) |
Subtotal net holding period gains (losses) | (80.5) |  |  | (152.1) |  |  | 17.9 |  |  | (2,262.9) |
Total net realized gains (losses) on securities | $ | (149.0) |  |  | $ | (216.4) |  |  | $ | 49.7 |  |  | $ | (1,839.4) |
Realized gains (losses) on securities sold are computed using the first-in-first-out method. For the first nine months of both 2023 and 2022, the gross gains in common equities reflected sales of securities, as part of our plan to incrementally reduce risk in the portfolio in response to our view of the potential of a more difficult economic environment in both years. The gross loss from the fixed-maturity sales reflected the continued rise in interest rates throughout 2022, which resulted in valuation declines for most of our available-for-sale securities. In addition, during 2023, we selectively sold securities, which were primarily corporate debt securities and commercial mortgage-backed securities. The gross loss incurred in our nonredeemable preferred stocks was primarily related to the sale of certain holdings in U.S. bank preferred stocks. The other asset gain for 2023, related to proceeds received as the result of litigation in conjunction with three renewable energy investments we made from 2016 through 2018 (the original investments were previously written down in full). The other asset impairment loss was recorded as a result of our investment in a federal new markets tax credit fund, which was entered into during the second quarter 2021, and is reported in other assets in our consolidated balance sheets. The following table reflects our holding period realized gains (losses) recognized on equity securities held at the respective periods ended September 30:
| Three Months |  | Nine Months
(millions) | 2023 | 2022 |  | 2023 | 2022
Total net gains (losses) recognized during the period on equity securities | $ | (96.2) |  | $ | (144.3) |  |  | $ | 214.6 |  | $ | (1,399.0) |
Less: Net gains (losses) recognized on equity securities sold during the period | (16.0) |  | (3.6) |  |  | 215.1 |  | 765.1 |
Net holding period gains (losses) recognized during the period on equity securities held at period end | $ | (80.2) |  | $ | (140.7) |  |  | $ | (0.5) |  | $ | (2,164.1) |
Net Investment Income The components of net investment income for the three and nine months ended September 30, were:
| Three Months |  | Nine Months
(millions) | 2023 | 2022 |  | 2023 | 2022
Available-for-sale securities: |  |  |  |  |
Fixed maturities: |  |  |  |  |
U.S. government obligations | $ | 237.0 |  | $ | 86.1 |  |  | $ | 591.7 |  | $ | 205.4 |
State and local government obligations | 12.3 |  | 9.8 |  |  | 34.5 |  | 29.3 |
Foreign government obligations | 0.1 |  | 0.1 |  |  | 0.2 |  | 0.2 |
Corporate debt securities | 94.8 |  | 71.8 |  |  | 261.9 |  | 215.4 |
Residential mortgage-backed securities | 7.6 |  | 8.8 |  |  | 22.6 |  | 23.2 |
Commercial mortgage-backed securities | 48.7 |  | 48.3 |  |  | 147.9 |  | 138.1 |
Other asset-backed securities | 62.9 |  | 52.1 |  |  | 173.0 |  | 116.5 |
Redeemable preferred stocks | 2.6 |  | 3.0 |  |  | 8.2 |  | 8.5 |
Total fixed maturities | 466.0 |  | 280.0 |  |  | 1,240.0 |  | 736.6 |
Short-term investments | 21.6 |  | 24.8 |  |  | 71.1 |  | 29.6 |
Total available-for-sale securities | 487.6 |  | 304.8 |  |  | 1,311.1 |  | 766.2 |
Equity securities: |  |  |  |  |
Nonredeemable preferred stocks | 11.9 |  | 17.3 |  |  | 40.3 |  | 53.6 |
Common equities | 10.7 |  | 11.5 |  |  | 32.9 |  | 48.4 |
Total equity securities | 22.6 |  | 28.8 |  |  | 73.2 |  | 102.0 |
Investment income | 510.2 |  | 333.6 |  |  | 1,384.3 |  | 868.2 |
Investment expenses | (7.2) |  | (5.8) |  |  | (18.8) |  | (17.4) |
Net investment income | $ | 503.0 |  | $ | 327.8 |  |  | $ | 1,365.5 |  | $ | 850.8 |
On a year-over-year basis, investment income (interest and dividends) increased 53% and 59% for the three and nine months ended September 30, 2023, respectively, and the recurring investment book yield increased 32% and 39% for the three and nine months ended September 30, 2023, respectively, compared to the same periods last year. The increases are primarily due to an increase in interest rates on floating-rate securities in our portfolio, an increase in average assets resulting from premium growth, and investing new cash and cash from maturities in higher interest rate securities given the rising interest rate environment.

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