Debt Securities

12 Months Ended

Dec. 31, 2024

Debt Securities, Available-for-Sale [Abstract]

NOTE 3. Debt Securities:

Investments in debt securities, classified as available-for-sale, are as follows:


	Amortized		Gross unrealized					Estimated
(in millions)	cost		gains		losses			fair value
December 31, 2024
U.S. Treasury bonds	$	180.7	$	0.1	$	(5.2	)	$	175.6
Municipal bonds		844.9		5.3		(73.7	)		776.5
Foreign government bonds		217.1		1.6		(7.1	)		211.6
Governmental agency bonds		203.8		—		(14.0	)		189.8
Governmental agency mortgage-backed securities		4,844.4		1.7		(343.8	)		4,502.3
U.S. corporate debt securities		948.4		5.6		(28.4	)		925.6
Foreign corporate debt securities		491.6		5.3		(12.4	)		484.5
	$	7,730.9	$	19.6	$	(484.6	)	$	7,265.9
December 31, 2023
U.S. Treasury bonds	$	203.3	$	0.5	$	(4.5	)	$	199.3
Municipal bonds		1,373.7		8.8		(136.7	)		1,245.8
Foreign government bonds		228.4		1.4		(10.5	)		219.3
Governmental agency bonds		207.7		0.2		(12.5	)		195.4
Governmental agency mortgage-backed securities		4,396.2		6.3		(526.8	)		3,875.7
U.S. corporate debt securities		1,007.0		6.6		(55.2	)		958.4
Foreign corporate debt securities		478.9		5.8		(21.1	)		463.6
	$	7,895.2	$	29.6	$	(767.3	)	$	7,157.5

Sales of debt securities resulted in realized gains of $22.2 million, $7.2 million and $4.9 million, realized losses of $357.3 million, $88.1 million and $141.4 million, and proceeds of $5.5 billion, $1.7 billion and $1.8 billion for the years ended December 31, 2024, 2023 and 2022, respectively.

In 2024, the Company initiated a strategic investment portfolio rebalancing project. In connection with its rebalancing project, the Company sold certain debt securities in an unrealized loss position, which resulted in realized losses of $345.4 million and proceeds of $2.8 billion.

Investments in debt securities in an unrealized loss position, and their respective length of time in such position, are as follows:


	Less than 12 months					12 months or longer					Total
(in millions)	Estimated fair value		Unrealized losses			Estimated fair value		Unrealized losses			Estimated fair value		Unrealized losses
December 31, 2024
U.S. Treasury bonds	$	81.8	$	(1.8	)	$	52.9	$	(3.4	)	$	134.7	$	(5.2	)
Municipal bonds		248.3		(4.4	)		417.0		(69.3	)		665.3		(73.7	)
Foreign government bonds		29.8		(0.2	)		72.7		(6.9	)		102.5		(7.1	)
Governmental agency bonds		144.4		(5.3	)		37.9		(8.7	)		182.3		(14.0	)
Governmental agency mortgage-backed securities		2,977.2		(98.4	)		1,290.4		(245.4	)		4,267.6		(343.8	)
U.S. corporate debt securities		435.2		(9.6	)		117.5		(18.8	)		552.7		(28.4	)
Foreign corporate debt securities		159.4		(3.2	)		110.5		(9.2	)		269.9		(12.4	)
	$	4,076.1	$	(122.9	)	$	2,098.9	$	(361.7	)	$	6,175.0	$	(484.6	)
December 31, 2023
U.S. Treasury bonds	$	8.2	$	(0.1	)	$	55.4	$	(4.4	)	$	63.6	$	(4.5	)
Municipal bonds		107.4		(0.9	)		956.8		(135.8	)		1,064.2		(136.7	)
Foreign government bonds		33.3		(0.1	)		101.4		(10.4	)		134.7		(10.5	)
Governmental agency bonds		0.4		—			118.9		(12.5	)		119.3		(12.5	)
Governmental agency mortgage-backed securities		338.3		(6.6	)		3,225.3		(520.2	)		3,563.6		(526.8	)
U.S. corporate debt securities		45.1		(0.4	)		602.5		(54.8	)		647.6		(55.2	)
Foreign corporate debt securities		19.3		(0.1	)		267.3		(21.0	)		286.6		(21.1	)
	$	552.0	$	(8.2	)	$	5,327.6	$	(759.1	)	$	5,879.6	$	(767.3	)

Based on the Company’s review of its debt securities in an unrealized loss position it determined that the losses were due to non-credit factors and, therefore, it does not consider these securities to be credit impaired at December 31, 2024. As of December 31, 2024, the Company did not intend to sell any debt securities in an unrealized loss position and it is not more likely than not that the Company will be required to sell any debt securities before recovery of their amortized cost basis.

In determining credit losses on its debt securities in an unrealized loss position, the Company considers certain factors that may include, among others, severity of the unrealized loss, security type, industry sector, credit rating, yield to maturity, profitability and stock performance.

In the normal course of operations, the Company may seek to optimize its investment portfolio and prospective investment returns by selling certain debt securities in an unrealized loss (or gain) position for which such unrealized loss or gain has been deferred in other comprehensive income. Sales of such debt securities could result in the realization of material gains or losses recorded in net income in the period the debt securities are sold.

Investments in debt securities at December 31, 2024, by contractual maturities, are as follows:


(in millions)	Due in one year or less		Due after one through five years		Due after five through ten years		Due after ten years		Total
U.S. Treasury bonds
Amortized cost	$	32.9	$	117.6	$	4.7	$	25.5	$	180.7
Estimated fair value	$	32.8	$	114.7	$	4.6	$	23.5	$	175.6
Municipal bonds
Amortized cost		7.1		83.0		283.1		471.7		844.9
Estimated fair value		7.1		80.5		247.6		441.3		776.5
Foreign government bonds
Amortized cost		13.0		123.7		73.7		6.7		217.1
Estimated fair value		13.0		125.1		67.9		5.6		211.6
Governmental agency bonds
Amortized cost		8.6		1.4		149.5		44.3		203.8
Estimated fair value		8.6		1.4		144.2		35.6		189.8
U.S. corporate debt securities
Amortized cost		12.4		545.2		295.6		95.2		948.4
Estimated fair value		12.5		539.0		290.5		83.6		925.6
Foreign corporate debt securities
Amortized cost		22.1		309.9		128.4		31.2		491.6
Estimated fair value		22.0		308.4		126.1		28.0		484.5
Total debt securities, excluding mortgage-backed securities
Amortized cost	$	96.1	$	1,180.8	$	935.0	$	674.6	$	2,886.5
Estimated fair value	$	96.0	$	1,169.1	$	880.9	$	617.6	$	2,763.6
Total mortgage-backed securities
Amortized cost										4,844.4
Estimated fair value										4,502.3
Total debt securities
Amortized cost									$	7,730.9
Estimated fair value									$	7,265.9

Mortgage-backed securities, which include contractual terms to maturity, are not categorized by contractual maturity as borrowers may have the right to call or prepay obligations with, or without, call or prepayment penalties.

The composition of the debt securities portfolio at December 31, 2024, by credit rating, is as follows:


	A- or higher					BBB+ to BBB-					Non-Investment Grade					Total
(dollars in millions)	Estimated fair value		Percentage			Estimated fair value		Percentage			Estimated fair value		Percentage			Estimated fair value
U.S. Treasury bonds	$	175.6		100.0	%	$	—		—	%	$	—		—	%	$	175.6
Municipal bonds		755.1		97.3			21.1		2.7			0.3		—			776.5
Foreign government bonds		206.5		97.6			4.4		2.1			0.7		0.3			211.6
Governmental agency bonds		189.8		100.0			—		—			—		—			189.8
Governmental agency mortgage-backed securities		4,502.3		100.0			—		—			—		—			4,502.3
U.S. corporate debt securities		444.1		48.0			314.5		34.0			167.0		18.0			925.6
Foreign corporate debt securities		259.2		53.5			181.0		37.4			44.3		9.1			484.5
	$	6,532.6		89.9	%	$	521.0		7.2	%	$	212.3		2.9	%	$	7,265.9

Included in debt securities at December 31, 2024, were bank loans totaling $139.7 million, of which $128.4 million were non-investment grade; high yield corporate debt securities totaling $75.4 million, all of which were non-investment grade; and emerging market debt securities totaling $32.6 million, of which $8.2 million were non-investment grade.

The composition of the debt securities portfolio in an unrealized loss position at December 31, 2024, by credit rating, is as follows:


	A- or higher					BBB+ to BBB-					Non-Investment Grade					Total
(dollars in millions)	Estimated fair value		Percentage			Estimated fair value		Percentage			Estimated fair value		Percentage			Estimated fair value
U.S. Treasury bonds	$	134.7		100.0	%	$	—		—	%	$	—		—	%	$	134.7
Municipal bonds		649.2		97.6			15.8		2.4			0.3		—			665.3
Foreign government bonds		97.4		95.0			4.4		4.3			0.7		0.7			102.5
Governmental agency bonds		182.3		100.0			—		—			—		—			182.3
Governmental agency mortgage-backed securities		4,267.6		100.0			—		—			—		—			4,267.6
U.S. corporate debt securities		317.2		57.4			202.4		36.6			33.1		6.0			552.7
Foreign corporate debt securities		165.1		61.2			89.9		33.3			14.9		5.5			269.9
	$	5,813.5		94.1	%	$	312.5		5.1	%	$	49.0		0.8	%	$	6,175.0

Debt securities in an unrealized loss position at December 31, 2024, included bank loans totaling $17.3 million, of which $17.0 million were non-investment grade; high yield corporate debt securities totaling $27.5 million, all of which were non-investment grade; and emerging market debt securities totaling $24.0 million, of which $4.2 million were non-investment grade.

The credit ratings in the above tables reflect published ratings obtained from globally recognized securities rating agencies. If a security was rated differently among the rating agencies, the lowest rating was selected. Governmental agency mortgage-backed securities are not rated by any of the rating agencies; however, these securities have been included in the above table in the “A- or higher” rating category because the payments of principal and interest are guaranteed by the governmental agency that issued the security.