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Fair Value Measurements | 9 Months Ended
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Sep. 30, 2011
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Note 12 - Fair Value Measurements The Company classifies its Investments in Fixed Maturities and Equity Securities as available for sale and reports these investments at fair value. The Company classifies certain investments in mutual funds included in Other Investments as trading securities and reports these investments at fair value. The Company has no material liabilities that are measured and reported at fair value. The valuation of assets measured at fair value in the Company’s Condensed Consolidated Balance Sheet at September 30, 2011 is summarized below:
|  | Fair Value Measurements |  |
(Dollars in Millions) |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Total Fair Value
Fixed Maturities: |  |  |  |  |  |  |  |
U.S. Government and Government Agencies and Authorities |  | $ | 153.4 |  |  | $ | 363.3 |  |  | $ | — |  |  | $ | 516.7 |
States and Political Subdivisions |  | — |  |  | 1,903.3 |  |  | — |  |  | 1,903.3 |
Corporate Securities: |  |  |  |  |  |  |  |
Bonds and Notes |  | — |  |  | 2,088.6 |  |  | 186.6 |  |  | 2,275.2 |
Redeemable Preferred Stocks |  | — |  |  | 77.0 |  |  | 4.5 |  |  | 81.5 |
Mortgage and Asset-backed |  | — |  |  | 5.4 |  |  | 0.3 |  |  | 5.7 |
Total Investments in Fixed Maturities |  | 153.4 |  |  | 4,437.6 |  |  | 191.4 |  |  | 4,782.4 |
Equity Securities: |  |  |  |  |  |  |  |
Preferred Stocks: |  |  |  |  |  |  |  |
Finance, Insurance and Real Estate |  | — |  |  | 88.9 |  |  | — |  |  | 88.9 |
Other Industries |  | — |  |  | 16.6 |  |  | 3.6 |  |  | 20.2 |
Common Stocks: |  |  |  |  |  |  |  |
Manufacturing |  | 65.7 |  |  | 4.5 |  |  | 2.1 |  |  | 72.3 |
Other Industries |  | 38.0 |  |  | — |  |  | 3.5 |  |  | 41.5 |
Other Equity Interests: |  |  |  |  |  |  |  |
Exchange Traded Funds |  | 65.7 |  |  | — |  |  | — |  |  | 65.7 |
Limited Liability Companies and Limited Partnerships |  | — |  |  | — |  |  | 72.2 |  |  | 72.2 |
Total Investments in Equity Securities |  | 169.4 |  |  | 110.0 |  |  | 81.4 |  |  | 360.8 |
Other Investments: |  |  |  |  |  |  |  |
Trading Securities |  | 4.2 |  |  | — |  |  | — |  |  | 4.2 |
Total |  | $ | 327.0 |  |  | $ | 4,547.6 |  |  | $ | 272.8 |  |  | $ | 5,147.4 |
Note 12 - Fair Value Measurements (continued) The valuation of assets measured at fair value in the Company’s Condensed Consolidated Balance Sheet at December 31, 2010 is summarized below:
|  | Fair Value Measurements |  |
(Dollars in Millions) |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Total Fair Value
Fixed Maturities: |  |  |  |  |  |  |  |
U.S. Government and Government Agencies and Authorities |  | $ | 281.0 |  |  | $ | 255.9 |  |  | $ | — |  |  | $ | 536.9 |
States and Political Subdivisions |  | — |  |  | 1,792.8 |  |  | — |  |  | 1,792.8 |
Corporate Securities: |  |  |  |  |  |  |  |
Bonds and Notes |  | — |  |  | 1,902.8 |  |  | 146.2 |  |  | 2,049.0 |
Redeemable Preferred Stocks |  | — |  |  | 83.8 |  |  | 4.5 |  |  | 88.3 |
Mortgage and Asset-backed |  | — |  |  | 7.9 |  |  | 0.4 |  |  | 8.3 |
Total Investments in Fixed Maturities |  | 281.0 |  |  | 4,043.2 |  |  | 151.1 |  |  | 4,475.3 |
Equity Securities: |  |  |  |  |  |  |  |
Preferred Stocks: |  |  |  |  |  |  |  |
Finance, Insurance and Real Estate |  | — |  |  | 97.7 |  |  | — |  |  | 97.7 |
Other Industries |  | — |  |  | 17.0 |  |  | 10.4 |  |  | 27.4 |
Common Stocks: |  |  |  |  |  |  |  |
Intermec |  | 137.5 |  |  | — |  |  | — |  |  | 137.5 |
Manufacturing |  | 82.9 |  |  | 4.7 |  |  | 2.0 |  |  | 89.6 |
Other Industries |  | 41.5 |  |  | — |  |  | 2.3 |  |  | 43.8 |
Other Equity Interests: |  |  |  |  |  |  |  |
Exchange Traded Funds |  | 79.2 |  |  | — |  |  | — |  |  | 79.2 |
Limited Liability Companies and Limited Partnerships |  | — |  |  | — |  |  | 75.2 |  |  | 75.2 |
Total Investments in Equity Securities |  | 341.1 |  |  | 119.4 |  |  | 89.9 |  |  | 550.4 |
Other Investments: |  |  |  |  |  |  |  |
Trading Securities |  | 5.1 |  |  | — |  |  | — |  |  | 5.1 |
Total |  | $ | 627.2 |  |  | $ | 4,162.6 |  |  | $ | 241.0 |  |  | $ | 5,030.8 |
The Company’s investments in Fixed Maturities that are classified as Level 1 in the two preceding tables primarily consist of U.S. Treasury Bonds and Notes. The Company’s investments in Equity Securities that are classified as Level 1 in the two preceding tables consist of either investments in publicly-traded common stocks, or exchange traded funds. The Company’s investments in Fixed Maturities that are classified as Level 2 in the two preceding tables primarily consist of investments in corporate bonds and redeemable preferred stocks, states and political subdivisions, and bonds and mortgage-backed securities of U.S. government agencies. The Company’s investments in Equity Securities that are classified as Level 2 in the two preceding tables primarily consist of investments in preferred stocks. The Company uses a leading, nationally recognized provider of market data and analytics to price the vast majority of the Company’s Level 2 measurements. The provider utilizes evaluated pricing models that vary by asset class and incorporate available trade, bid and other market information. Because many fixed maturity securities do not trade on a daily basis, the provider’s evaluated pricing applications apply available information through processes such as benchmark curves, benchmarking of like securities, sector groupings, and matrix pricing to prepare evaluations. In addition, the provider uses model processes to develop prepayment and interest rate scenarios. The Note 12 - Fair Value Measurements (continued) pricing provider’s models and processes also take into account market convention. For each asset class, teams of its evaluators gather information from market sources and integrate relevant credit information, perceived market movements and sector news into the evaluated pricing applications and models. The Company generally validates the measurements obtained from its primary pricing provider by comparing them with measurements obtained from one additional pricing provider that provides either prices from recent market transactions or quotes in inactive markets or evaluations based on its own proprietary models. The Company investigates significant differences related to the values provided. On completion of its investigation, management exercises judgment to determine the price selected and whether adjustments, if any, to the price obtained from the Company’s primary pricing provider would warrant classification of the price as Level 3. In instances where a measurement cannot be obtained from either pricing provider, the Company generally will evaluate bid prices from one or more binding quotes obtained from market makers to value investments in inactive markets and classified by the Company as Level 2. The Company generally classifies securities when it receives non-binding quotes or indications as Level 3 securities unless the Company can validate the quote or indication against recent transactions in the market. For securities classified as Level 3, the Company either uses valuations provided by third party fund managers, third party appraisers or the Company’s own internal valuations. These valuations typically employ valuation techniques, including earnings multiples based on comparable public securities, industry specific non-earnings based multiples or discounted cash flow models. Valuations classified as Level 3 by the Company generally consist of investments in various private placement securities of non-rated entities. In rare cases, if the private placement security has only been outstanding for a short amount of time, the Company, after considering the initial assumptions used in acquiring an investment, considers the original purchase price as representative of the fair value. At September 30, 2011, the Company had unfunded commitments to invest an additional $67.9 million in certain private equity and mezzanine debt funds that will be included in Other Equity Interests. Information by security type pertaining to the changes in the fair value of the Company’s investments classified as Level 3 for the nine months ended September 30, 2011 is presented below:
|  | Fixed Maturities |  | Equity Securities |  |
(Dollars in Millions) |  | Corporate Bonds and Notes |  | Redeemable Preferred Stocks |  | Mortgage and Asset- backed |  | Preferred and Common Stocks |  | Other Equity Interests |  | Total
Balance at Beginning of Period |  | $ | 146.2 |  |  | $ | 4.5 |  |  | $ | 0.4 |  |  | $ | 14.7 |  |  | $ | 75.2 |  |  | $ | 241.0 |
Total Gains (Losses): |  |  |  |  |  |  |  |  |  |  |  |
Included in Condensed Consolidated Statement of Income |  | 1.0 |  |  | — |  |  | — |  |  | 4.6 |  |  | 0.3 |  |  | 5.9 |
Included in Other Comprehensive Income |  | 2.5 |  |  | — |  |  | — |  |  | (5.5 | ) |  | (16.6 | ) |  | (19.6 | )
Purchases |  | 76.1 |  |  | — |  |  | — |  |  | 1.5 |  |  | 23.9 |  |  | 101.5 |
Settlements |  | (44.1 | ) |  | — |  |  | (0.1 | ) |  | (0.4 | ) |  | (10.6 | ) |  | (55.2 | )
Sales |  | (0.5 | ) |  | — |  |  | — |  |  | (5.7 | ) |  | — |  |  | (6.2 | )
Transfers Into Level 3 from Level 2 |  | 5.4 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 5.4 |
Balance at End of Period |  | $ | 186.6 |  |  | $ | 4.5 |  |  | $ | 0.3 |  |  | $ | 9.2 |  |  | $ | 72.2 |  |  | $ | 272.8 |
Note 12 - Fair Value Measurements (continued) Information by security type pertaining to the changes in the fair value of the Company’s investments classified as Level 3 for the three months ended September 30, 2011 is presented below:
|  | Fixed Maturities |  | Equity Securities |  |
(Dollars in Millions) |  | Corporate Bonds and Notes |  | Redeemable Preferred Stocks |  | Mortgage and Asset- backed |  | Preferred and Common Stocks |  | Other Equity Interests |  | Total
Balance at Beginning of Period |  | $ | 174.8 |  |  | $ | 6.4 |  |  | $ | 0.3 |  |  | $ | 8.5 |  |  | $ | 80.1 |  |  | $ | 270.1 |
Total Gains (Losses): |  |  |  |  |  |  |  |  |  |  |  |
Included in Condensed Consolidated Statement of Income |  | 0.6 |  |  | — |  |  | — |  |  | (0.1 | ) |  | 0.3 |  |  | 0.8 |
Included in Other Comprehensive Income |  | 1.1 |  |  | (1.9 | ) |  | — |  |  | (0.2 | ) |  | (13.7 | ) |  | (14.7 | )
Purchases |  | 20.1 |  |  | — |  |  | — |  |  | 1.0 |  |  | 8.3 |  |  | 29.4 |
Settlements |  | (15.4 | ) |  | — |  |  | — |  |  | — |  |  | (2.8 | ) |  | (18.2 | )
Transfers Into Level 3 from Level 2 |  | 5.4 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 5.4 |
Balance at End of Period |  | $ | 186.6 |  |  | $ | 4.5 |  |  | $ | 0.3 |  |  | $ | 9.2 |  |  | $ | 72.2 |  |  | $ | 272.8 |
The Company’s policy is to recognize transfers between levels as of the end of the reporting period. There were no significant transfers between Levels 1 and 2 or Levels 1 and 3 for the nine and three months ended September 30, 2011. Information by security type pertaining to the changes in the fair value of the Company’s investments classified as Level 3 for the nine months ended September 30, 2010 is presented below:
|  | Fixed Maturities |  | Equity Securities |  |
(Dollars in Millions) |  | Corporate Bonds and Notes |  | Redeemable Preferred Stocks |  | Mortgage and Asset- backed |  | Preferred and Common Stocks |  | Other Equity Interests |  | Total
Balance at Beginning of Period |  | $ | 124.8 |  |  | $ | 70.1 |  |  | $ | 4.9 |  |  | $ | 14.0 |  |  | $ | 39.1 |  |  | $ | 252.9 |
Total Gains (Losses): |  |  |  |  |  |  |  |  |  |  |  |
Included in Condensed Consolidated Statement of Income |  | (5.5 | ) |  | (5.1 | ) |  | — |  |  | — |  |  | — |  |  | (10.6 | )
Included in Other Comprehensive Income |  | 8.9 |  |  | 2.6 |  |  | (1.1 | ) |  | 3.7 |  |  | 10.5 |  |  | 24.6 |
Purchases |  | 19.2 |  |  | 0.1 |  |  | — |  |  | 0.3 |  |  | 13.3 |  |  | 32.9 |
Settlements |  | (9.8 | ) |  | — |  |  | (0.1 | ) |  | (0.8 | ) |  | (1.2 | ) |  | (11.9 | )
Sales |  | (1.7 | ) |  | (67.7 | ) |  | (0.1 | ) |  | — |  |  | — |  |  | (69.5 | )
Transfers Out of Level 3 to Level 2 |  | — |  |  | — |  |  | (3.1 | ) |  | — |  |  | — |  |  | (3.1 | )
Balance at End of Period |  | $ | 135.9 |  |  | $ | — |  |  | $ | 0.5 |  |  | $ | 17.2 |  |  | $ | 61.7 |  |  | $ | 215.3 |
Note 12 - Fair Value Measurements (continued) Information by security type pertaining to the changes in the fair value of the Company’s investments classified as Level 3 for the three months ended September 30, 2010 is presented below:
|  | Fixed Maturities |  | Equity Securities |  |
(Dollars in Millions) |  | Corporate Bonds and Notes |  | Redeemable Preferred Stocks |  | Mortgage and Asset- backed |  | Preferred and Common Stocks |  | Other Equity Interests |  | Total
Balance at Beginning of Period |  | $ | 121.6 |  |  | $ | 66.8 |  |  | $ | 0.5 |  |  | $ | 15.4 |  |  | $ | 51.5 |  |  | $ | 255.8 |
Total Gains (Losses): |  |  |  |  |  |  |  |  |  |  |  |
Included in Condensed Consolidated Statement of Income |  | (1.6 | ) |  | (2.7 | ) |  | — |  |  | — |  |  | — |  |  | (4.3 | )
Included in Other Comprehensive Income |  | 2.1 |  |  | 3.7 |  |  | — |  |  | 1.6 |  |  | 6.3 |  |  | 13.7 |
Purchases |  | 15.0 |  |  | (0.1 | ) |  | — |  |  | 0.2 |  |  | 4.2 |  |  | 19.3 |
Settlements |  | (0.9 | ) |  | — |  |  | 0.1 |  |  | — |  |  | (0.3 | ) |  | (1.1 | )
Sales |  | (0.3 | ) |  | (67.7 | ) |  | (0.1 | ) |  | — |  |  | — |  |  | (68.1 | )
Balance at End of Period |  | $ | 135.9 |  |  | $ | — |  |  | $ | 0.5 |  |  | $ | 17.2 |  |  | $ | 61.7 |  |  | $ | 215.3 |
There were no significant transfers between Levels 1 and 2 or Levels 1 and 3 for the nine and three months ended September 30, 2010.

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- Definition Tabular disclosure of the fair value measurement of assets and liabilities which includes [financial] instruments measured at fair value that are classified in stockholders' equity. Such assets and liabilities may be measured on a recurring or nonrecurring basis. The disclosures which may be required or desired include: (1) for assets and liabilities measured on a recurring basis, disclosure may include: (a) the fair value measurements at the reporting date; (b) the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3); (c) for fair value measurements using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (i) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (ii) purchases, sales, issuances, and settlements (net); (iii) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs); (d) the amount of the total gains or losses for the period in subparagraph (c) (i) above included in earnings (or changes in net assets) that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date and a description of where those unrealized gains or losses are reported in the statement of income (or activities); (e) the valuation technique(s) used to measure fair value and a discussion of changes in valuation techniques, if any, during the period and (2) for assets and liabilities that are measured at fair value on a nonrecurring basis (for example, impaired assets) disclosure may include, in addition to (a) above: (a) the reasons for the fair value measurements recorded; (b) the same as (b) above; (c) for fair value measurements using significant unobservable inputs (Level 3), a description of the inputs and the information used to develop the inputs; and (d) the valuation technique(s) used to measure fair value and a discussion of changes, if any, in the valuation technique(s) used to measure similar assets and/or liabilities in prior periods. Where the quoted price in an active market for the identical liability is not available, the Level 1 input is the quoted price of an identical liability when traded as an asset. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19279-110258 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 157 -Paragraph 32 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 157 -Paragraph 33 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 107 -Paragraph 10 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19296-110258 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19207-110258 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 157 -Paragraph 6 -Footnote 4 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19190-110258 + Details
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