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 portfolio1	$	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 portfolio1	$	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 portfolio1	$	55,316.0	$	13.9	$	(3,551.5)	$	1,769.9	$	53,548.3	100.0	%

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.


	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.

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) 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.


	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)


	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.