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ý
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Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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¨
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Ohio
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34-0963169
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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6300 Wilson Mills Road, Mayfield Village, Ohio
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44143
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
|
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¨
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Three months ended March 31,
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2015
|
|
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2014
|
|
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%
Change |
||
(millions—except per share amounts)
|
|
|
|
|
|
||||
Revenues
|
|
|
|
|
|
||||
Net premiums earned
|
$
|
4,666.3
|
|
|
$
|
4,402.3
|
|
|
6
|
Investment income
|
105.1
|
|
|
103.3
|
|
|
2
|
||
Net realized gains (losses) on securities:
|
|
|
|
|
|
||||
Other-than-temporary impairment (OTTI) losses:
|
|
|
|
|
|
||||
Total OTTI losses
|
(7.9
|
)
|
|
0
|
|
|
NM
|
||
Non-credit losses, net of credit losses recognized on previously recorded non-credit OTTI losses
|
0
|
|
|
0
|
|
|
NM
|
||
Net impairment losses recognized in earnings
|
(7.9
|
)
|
|
0
|
|
|
NM
|
||
Net realized gains (losses) on securities
|
40.9
|
|
|
119.4
|
|
|
(66)
|
||
Total net realized gains (losses) on securities
|
33.0
|
|
|
119.4
|
|
|
(72)
|
||
Fees and other revenues
|
73.7
|
|
|
72.8
|
|
|
1
|
||
Service revenues
|
17.2
|
|
|
9.8
|
|
|
76
|
||
Total revenues
|
4,895.3
|
|
|
4,707.6
|
|
|
4
|
||
Expenses
|
|
|
|
|
|
||||
Losses and loss adjustment expenses
|
3,368.6
|
|
|
3,205.9
|
|
|
5
|
||
Policy acquisition costs
|
379.4
|
|
|
369.0
|
|
|
3
|
||
Other underwriting expenses
|
650.4
|
|
|
610.4
|
|
|
7
|
||
Investment expenses
|
5.3
|
|
|
4.1
|
|
|
29
|
||
Service expenses
|
15.9
|
|
|
9.7
|
|
|
64
|
||
Interest expense
|
32.5
|
|
|
26.7
|
|
|
22
|
||
Total expenses
|
4,452.1
|
|
|
4,225.8
|
|
|
5
|
||
Net Income
|
|
|
|
|
|
||||
Income before income taxes
|
443.2
|
|
|
481.8
|
|
|
(8)
|
||
Provision for income taxes
|
147.6
|
|
|
160.5
|
|
|
(8)
|
||
Net income
|
$
|
295.6
|
|
|
$
|
321.3
|
|
|
(8)
|
Other Comprehensive Income (Loss), Net of Tax
|
|
|
|
|
|
||||
Changes in:
|
|
|
|
|
|
||||
Net unrealized gains (losses) on securities:
|
|
|
|
|
|
||||
Net non-credit related OTTI losses, adjusted for valuation changes
|
$
|
0
|
|
|
$
|
0
|
|
|
NM
|
Other net unrealized gains (losses) on securities
|
35.4
|
|
|
(0.1
|
)
|
|
NM
|
||
Total net unrealized gains (losses) on securities
|
35.4
|
|
|
(0.1
|
)
|
|
NM
|
||
Net unrealized gains (losses) on forecasted transactions
|
(8.7
|
)
|
|
(0.3
|
)
|
|
NM
|
||
Foreign currency translation adjustment
|
(0.5
|
)
|
|
0
|
|
|
NM
|
||
Other comprehensive income (loss)
|
26.2
|
|
|
(0.4
|
)
|
|
NM
|
||
Comprehensive income
|
$
|
321.8
|
|
|
$
|
320.9
|
|
|
0
|
Computation of Net Income Per Share
|
|
|
|
|
|
||||
Average shares outstanding - Basic
|
587.6
|
|
|
593.9
|
|
|
(1)
|
||
Net effect of dilutive stock-based compensation
|
3.4
|
|
|
3.8
|
|
|
(11)
|
||
Total equivalent shares - Diluted
|
591.0
|
|
|
597.7
|
|
|
(1)
|
||
Basic: Net income per share
|
$
|
0.50
|
|
|
$
|
0.54
|
|
|
(7)
|
Diluted: Net income per share
|
$
|
0.50
|
|
|
$
|
0.54
|
|
|
(7)
|
Dividends declared per share
1
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
March 31,
|
|
December 31,
2014 |
||||||||
(millions)
|
2015
|
|
|
2014
|
|
|
|||||
Assets
|
|
|
|
|
|
||||||
Investments - Available-for-sale, at fair value:
|
|
|
|
|
|
||||||
Fixed maturities (amortized cost: $13,997.5, $12,335.8, and $13,374.2)
|
$
|
14,219.8
|
|
|
$
|
12,506.2
|
|
|
$
|
13,549.2
|
|
Equity securities:
|
|
|
|
|
|
||||||
Nonredeemable preferred stocks (cost: $598.3, $460.7, and $590.4)
|
828.1
|
|
|
737.9
|
|
|
827.5
|
|
|||
Common equities (cost: $1,295.0, $1,252.7, and $1,289.2)
|
2,515.7
|
|
|
2,278.7
|
|
|
2,492.3
|
|
|||
Short-term investments (amortized cost: $2,267.0, $1,872.9, and $2,149.0)
|
2,267.0
|
|
|
1,872.9
|
|
|
2,149.0
|
|
|||
Total investments
|
19,830.6
|
|
|
17,395.7
|
|
|
19,018.0
|
|
|||
Cash
|
101.5
|
|
|
96.7
|
|
|
108.4
|
|
|||
Accrued investment income
|
84.7
|
|
|
82.3
|
|
|
87.3
|
|
|||
Premiums receivable, net of allowance for doubtful accounts of $138.7, $131.9, and $152.2
|
3,777.0
|
|
|
3,515.9
|
|
|
3,537.5
|
|
|||
Reinsurance recoverables, including $50.8, $34.5, and $46.0 on paid losses and loss adjustment expenses
|
1,257.2
|
|
|
1,111.5
|
|
|
1,231.9
|
|
|||
Prepaid reinsurance premiums
|
99.3
|
|
|
81.8
|
|
|
85.3
|
|
|||
Deferred acquisition costs
|
484.0
|
|
|
466.9
|
|
|
457.2
|
|
|||
Property and equipment, net of accumulated depreciation of $742.7, $687.1, and $731.0
|
957.5
|
|
|
950.0
|
|
|
960.6
|
|
|||
Other assets
|
288.9
|
|
|
614.6
|
|
|
301.4
|
|
|||
Total assets
|
$
|
26,880.7
|
|
|
$
|
24,315.4
|
|
|
$
|
25,787.6
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
||||||
Unearned premiums
|
$
|
5,854.0
|
|
|
$
|
5,460.1
|
|
|
$
|
5,440.1
|
|
Loss and loss adjustment expense reserves
|
9,001.6
|
|
|
8,592.6
|
|
|
8,857.4
|
|
|||
Net deferred income taxes
|
97.2
|
|
|
51.1
|
|
|
98.9
|
|
|||
Dividends payable
|
0
|
|
|
0
|
|
|
404.1
|
|
|||
Accounts payable, accrued expenses, and other liabilities
|
2,165.9
|
|
|
1,911.7
|
|
|
1,893.8
|
|
|||
Debt
1
|
2,560.1
|
|
|
1,861.3
|
|
|
2,164.7
|
|
|||
Total liabilities
|
19,678.8
|
|
|
17,876.8
|
|
|
18,859.0
|
|
|||
Common Shares, $1.00 par value (authorized 900.0; issued 797.6, including treasury shares of 210.3, 204.5, and 209.8)
|
587.3
|
|
|
593.1
|
|
|
587.8
|
|
|||
Paid-in capital
|
1,196.7
|
|
|
1,159.0
|
|
|
1,184.3
|
|
|||
Retained earnings
|
4,368.6
|
|
|
3,735.2
|
|
|
4,133.4
|
|
|||
Accumulated other comprehensive income, net of tax:
|
|
|
|
|
|
||||||
Net non-credit related OTTI losses, adjusted for valuation changes
|
0
|
|
|
0
|
|
|
0
|
|
|||
Other net unrealized gains (losses) on securities
|
1,057.3
|
|
|
946.9
|
|
|
1,021.9
|
|
|||
Total net unrealized gains (losses) on securities
|
1,057.3
|
|
|
946.9
|
|
|
1,021.9
|
|
|||
Net unrealized gains (losses) on forecasted transactions
|
(7.2
|
)
|
|
3.8
|
|
|
1.5
|
|
|||
Foreign currency translation adjustment
|
(0.8
|
)
|
|
0.6
|
|
|
(0.3
|
)
|
|||
Total accumulated other comprehensive income
|
1,049.3
|
|
|
951.3
|
|
|
1,023.1
|
|
|||
Total shareholders’ equity
|
7,201.9
|
|
|
6,438.6
|
|
|
6,928.6
|
|
|||
Total liabilities and shareholders’ equity
|
$
|
26,880.7
|
|
|
$
|
24,315.4
|
|
|
$
|
25,787.6
|
|
Three months ended March 31,
|
|
|
||||
(millions — except per share amounts)
|
2015
|
|
2014
|
|
||
Common Shares, $1.00 Par Value
|
|
|
||||
Balance, Beginning of period
|
$
|
587.8
|
|
$
|
595.8
|
|
Treasury shares purchased
|
(2.5
|
)
|
(3.9
|
)
|
||
Net restricted equity awards issued/vested/(forfeited)
|
2.0
|
|
1.2
|
|
||
Balance, End of period
|
$
|
587.3
|
|
$
|
593.1
|
|
Paid-In Capital
|
|
|
||||
Balance, Beginning of period
|
$
|
1,184.3
|
|
$
|
1,142.0
|
|
Tax benefit from vesting of equity-based compensation
|
6.3
|
|
10.7
|
|
||
Treasury shares purchased
|
(5.0
|
)
|
(7.5
|
)
|
||
Net restricted equity awards (issued)/(vested)/forfeited
|
(2.0
|
)
|
(1.2
|
)
|
||
Amortization of equity-based compensation
|
13.1
|
|
15.2
|
|
||
Reinvested dividends on restricted stock units
|
0
|
|
(0.2
|
)
|
||
Balance, End of period
|
$
|
1,196.7
|
|
$
|
1,159.0
|
|
Retained Earnings
|
|
|
||||
Balance, Beginning of period
|
$
|
4,133.4
|
|
$
|
3,500.0
|
|
Net income
|
295.6
|
|
321.3
|
|
||
Treasury shares purchased
|
(58.4
|
)
|
(83.3
|
)
|
||
Cash dividends declared on common shares
|
0
|
|
1.1
|
|
||
Other, net
|
(2.0
|
)
|
(3.9
|
)
|
||
Balance, End of period
|
$
|
4,368.6
|
|
$
|
3,735.2
|
|
Accumulated Other Comprehensive Income, Net of Tax
|
|
|
||||
Balance, Beginning of period
|
$
|
1,023.1
|
|
$
|
951.7
|
|
Other comprehensive income (loss)
|
26.2
|
|
(0.4
|
)
|
||
Balance, End of period
|
$
|
1,049.3
|
|
$
|
951.3
|
|
Total Shareholders’ Equity
|
$
|
7,201.9
|
|
$
|
6,438.6
|
|
Three months ended March 31,
|
2015
|
|
|
2014
|
|
||
(millions)
|
|
|
|
||||
Cash Flows From Operating Activities
|
|
|
|
||||
Net income
|
$
|
295.6
|
|
|
$
|
321.3
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation
|
23.8
|
|
|
22.8
|
|
||
Amortization of fixed-income securities
|
17.3
|
|
|
19.0
|
|
||
Amortization of equity-based compensation
|
13.1
|
|
|
15.2
|
|
||
Net realized (gains) losses on securities
|
(33.0
|
)
|
|
(119.4
|
)
|
||
Net (gains) losses on disposition of property and equipment
|
0.1
|
|
|
2.1
|
|
||
Changes in:
|
|
|
|
||||
Premiums receivable
|
(239.6
|
)
|
|
(205.2
|
)
|
||
Reinsurance recoverables
|
(25.3
|
)
|
|
(21.3
|
)
|
||
Prepaid reinsurance premiums
|
(14.0
|
)
|
|
(6.9
|
)
|
||
Deferred acquisition costs
|
(26.8
|
)
|
|
(19.3
|
)
|
||
Income taxes
|
80.6
|
|
|
149.6
|
|
||
Unearned premiums
|
414.4
|
|
|
285.6
|
|
||
Loss and loss adjustment expense reserves
|
144.4
|
|
|
112.9
|
|
||
Accounts payable, accrued expenses, and other liabilities
|
106.9
|
|
|
77.0
|
|
||
Other, net
|
13.6
|
|
|
27.2
|
|
||
Net cash provided by operating activities
|
771.1
|
|
|
660.6
|
|
||
Cash Flows From Investing Activities
|
|
|
|
||||
Purchases:
|
|
|
|
||||
Fixed maturities
|
(3,023.8
|
)
|
|
(1,731.6
|
)
|
||
Equity securities
|
(77.2
|
)
|
|
(86.6
|
)
|
||
Sales:
|
|
|
|
||||
Fixed maturities
|
1,534.6
|
|
|
2,107.1
|
|
||
Equity securities
|
88.9
|
|
|
362.5
|
|
||
Maturities, paydowns, calls, and other:
|
|
|
|
||||
Fixed maturities
|
855.1
|
|
|
697.0
|
|
||
Equity securities
|
0
|
|
|
14.3
|
|
||
Net sales (purchases) of short-term investments
|
(117.7
|
)
|
|
(600.4
|
)
|
||
Net unsettled security transactions
|
64.5
|
|
|
(411.3
|
)
|
||
Purchases of property and equipment
|
(22.2
|
)
|
|
(16.2
|
)
|
||
Sales of property and equipment
|
1.4
|
|
|
2.2
|
|
||
Net cash provided by (used in) investing activities
|
(696.4
|
)
|
|
337.0
|
|
||
Cash Flows From Financing Activities
|
|
|
|
||||
Tax benefit from vesting of equity-based compensation
|
6.3
|
|
|
10.7
|
|
||
Proceeds from debt issuance
|
382.0
|
|
|
0
|
|
||
Dividends paid to shareholders
1
|
(403.6
|
)
|
|
(892.6
|
)
|
||
Acquisition of treasury shares
|
(65.9
|
)
|
|
(94.7
|
)
|
||
Net cash used in financing activities
|
(81.2
|
)
|
|
(976.6
|
)
|
||
Effect of exchange rate changes on cash
|
(0.4
|
)
|
|
0.6
|
|
||
Increase (decrease) in cash
|
(6.9
|
)
|
|
21.6
|
|
||
Cash, January 1
|
108.4
|
|
|
75.1
|
|
||
Cash, March 31
|
$
|
101.5
|
|
|
$
|
96.7
|
|
($ in millions)
|
Cost
|
|
|
Gross
Unrealized Gains
|
|
|
Gross
Unrealized
Losses
|
|
|
Net
Realized Gains
(Losses)
1
|
|
|
Fair
Value
|
|
|
% of
Total Fair
Value
|
|
|||||
March 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
U.S. government obligations
|
$
|
2,678.1
|
|
|
$
|
30.1
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
2,708.2
|
|
|
13.7
|
%
|
State and local government obligations
|
2,224.8
|
|
|
50.0
|
|
|
(1.0
|
)
|
|
0
|
|
|
2,273.8
|
|
|
11.5
|
|
|||||
Foreign government obligations
|
20.0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
20.0
|
|
|
0.1
|
|
|||||
Corporate debt securities
|
2,851.6
|
|
|
54.4
|
|
|
(3.8
|
)
|
|
1.8
|
|
|
2,904.0
|
|
|
14.6
|
|
|||||
Residential mortgage-backed securities
|
1,629.2
|
|
|
32.4
|
|
|
(13.1
|
)
|
|
(0.3
|
)
|
|
1,648.2
|
|
|
8.3
|
|
|||||
Commercial mortgage-backed securities
|
2,437.4
|
|
|
50.1
|
|
|
(1.1
|
)
|
|
0.7
|
|
|
2,487.1
|
|
|
12.5
|
|
|||||
Other asset-backed securities
|
1,896.1
|
|
|
4.9
|
|
|
(0.3
|
)
|
|
0.8
|
|
|
1,901.5
|
|
|
9.6
|
|
|||||
Redeemable preferred stocks
|
260.3
|
|
|
23.3
|
|
|
(6.6
|
)
|
|
0
|
|
|
277.0
|
|
|
1.4
|
|
|||||
Total fixed maturities
|
13,997.5
|
|
|
245.2
|
|
|
(25.9
|
)
|
|
3.0
|
|
|
14,219.8
|
|
|
71.7
|
|
|||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Nonredeemable preferred stocks
|
598.3
|
|
|
192.5
|
|
|
(5.9
|
)
|
|
43.2
|
|
|
828.1
|
|
|
4.2
|
|
|||||
Common equities
|
1,295.0
|
|
|
1,226.7
|
|
|
(6.0
|
)
|
|
0
|
|
|
2,515.7
|
|
|
12.7
|
|
|||||
Short-term investments
|
2,267.0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
2,267.0
|
|
|
11.4
|
|
|||||
Total portfolio
2,3
|
$
|
18,157.8
|
|
|
$
|
1,664.4
|
|
|
$
|
(37.8
|
)
|
|
$
|
46.2
|
|
|
$
|
19,830.6
|
|
|
100.0
|
%
|
($ in millions)
|
Cost
|
|
|
Gross
Unrealized Gains
|
|
|
Gross
Unrealized
Losses
|
|
|
Net
Realized Gains
(Losses)
1
|
|
|
Fair
Value
|
|
|
% of
Total Fair
Value
|
|
|||||
March 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
U.S. government obligations
|
$
|
3,197.8
|
|
|
$
|
39.0
|
|
|
$
|
(6.8
|
)
|
|
$
|
0
|
|
|
$
|
3,230.0
|
|
|
18.5
|
%
|
State and local government obligations
|
2,131.0
|
|
|
33.1
|
|
|
(9.2
|
)
|
|
0
|
|
|
2,154.9
|
|
|
12.4
|
|
|||||
Foreign government obligations
|
17.9
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
17.9
|
|
|
0.1
|
|
|||||
Corporate debt securities
|
2,461.6
|
|
|
45.4
|
|
|
(7.2
|
)
|
|
1.8
|
|
|
2,501.6
|
|
|
14.4
|
|
|||||
Residential mortgage-backed securities
|
1,286.7
|
|
|
32.6
|
|
|
(11.9
|
)
|
|
0
|
|
|
1,307.4
|
|
|
7.5
|
|
|||||
Commercial mortgage-backed securities
|
2,037.7
|
|
|
41.5
|
|
|
(17.6
|
)
|
|
0
|
|
|
2,061.6
|
|
|
11.9
|
|
|||||
Other asset-backed securities
|
936.2
|
|
|
6.6
|
|
|
(0.6
|
)
|
|
0.3
|
|
|
942.5
|
|
|
5.4
|
|
|||||
Redeemable preferred stocks
|
266.9
|
|
|
29.6
|
|
|
(6.2
|
)
|
|
0
|
|
|
290.3
|
|
|
1.7
|
|
|||||
Total fixed maturities
|
12,335.8
|
|
|
227.8
|
|
|
(59.5
|
)
|
|
2.1
|
|
|
12,506.2
|
|
|
71.9
|
|
|||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Nonredeemable preferred stocks
|
460.7
|
|
|
263.7
|
|
|
(1.2
|
)
|
|
14.7
|
|
|
737.9
|
|
|
4.2
|
|
|||||
Common equities
|
1,252.7
|
|
|
1,028.8
|
|
|
(2.8
|
)
|
|
0
|
|
|
2,278.7
|
|
|
13.1
|
|
|||||
Short-term investments
|
1,872.9
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
1,872.9
|
|
|
10.8
|
|
|||||
Total portfolio
2,3
|
$
|
15,922.1
|
|
|
$
|
1,520.3
|
|
|
$
|
(63.5
|
)
|
|
$
|
16.8
|
|
|
$
|
17,395.7
|
|
|
100.0
|
%
|
($ in millions)
|
Cost
|
|
|
Gross
Unrealized Gains
|
|
|
Gross
Unrealized
Losses
|
|
|
Net
Realized Gains
(Losses)
1
|
|
|
Fair
Value
|
|
|
% of
Total Fair
Value
|
|
|||||
December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
U.S. government obligations
|
$
|
2,641.1
|
|
|
$
|
27.3
|
|
|
$
|
(1.3
|
)
|
|
$
|
0
|
|
|
$
|
2,667.1
|
|
|
14.0
|
%
|
State and local government obligations
|
2,095.7
|
|
|
44.6
|
|
|
(1.1
|
)
|
|
0
|
|
|
2,139.2
|
|
|
11.2
|
|
|||||
Foreign government obligations
|
14.2
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
14.2
|
|
|
0.1
|
|
|||||
Corporate debt securities
|
2,813.9
|
|
|
32.9
|
|
|
(10.4
|
)
|
|
0.3
|
|
|
2,836.7
|
|
|
14.9
|
|
|||||
Residential mortgage-backed securities
|
1,635.5
|
|
|
34.5
|
|
|
(10.8
|
)
|
|
(0.7
|
)
|
|
1,658.5
|
|
|
8.7
|
|
|||||
Commercial mortgage-backed securities
|
2,278.7
|
|
|
39.3
|
|
|
(2.6
|
)
|
|
0.2
|
|
|
2,315.6
|
|
|
12.2
|
|
|||||
Other asset-backed securities
|
1,634.9
|
|
|
3.8
|
|
|
(0.8
|
)
|
|
0.8
|
|
|
1,638.7
|
|
|
8.6
|
|
|||||
Redeemable preferred stocks
|
260.2
|
|
|
24.7
|
|
|
(5.7
|
)
|
|
0
|
|
|
279.2
|
|
|
1.5
|
|
|||||
Total fixed maturities
|
13,374.2
|
|
|
207.1
|
|
|
(32.7
|
)
|
|
0.6
|
|
|
13,549.2
|
|
|
71.2
|
|
|||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Nonredeemable preferred stocks
|
590.4
|
|
|
201.1
|
|
|
(6.4
|
)
|
|
42.4
|
|
|
827.5
|
|
|
4.4
|
|
|||||
Common equities
|
1,289.2
|
|
|
1,213.2
|
|
|
(10.1
|
)
|
|
0
|
|
|
2,492.3
|
|
|
13.1
|
|
|||||
Short-term investments
|
2,149.0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
2,149.0
|
|
|
11.3
|
|
|||||
Total portfolio
2,3
|
$
|
17,402.8
|
|
|
$
|
1,621.4
|
|
|
$
|
(49.2
|
)
|
|
$
|
43.0
|
|
|
$
|
19,018.0
|
|
|
100.0
|
%
|
|
March 31,
|
|
December 31,
2014 |
|
|||||||
(millions)
|
2015
|
|
|
2014
|
|
|
|||||
Fixed maturities:
|
|
|
|
|
|
||||||
Corporate debt securities
|
$
|
132.9
|
|
|
$
|
145.7
|
|
|
$
|
139.8
|
|
Residential mortgage-backed securities
|
111.7
|
|
|
0
|
|
|
120.7
|
|
|||
Commercial mortgage-backed securities
|
18.0
|
|
|
0
|
|
|
31.2
|
|
|||
Other asset-backed securities
|
13.1
|
|
|
13.9
|
|
|
13.7
|
|
|||
Total fixed maturities
|
275.7
|
|
|
159.6
|
|
|
305.4
|
|
|||
Equity securities:
|
|
|
|
|
|
||||||
Nonredeemable preferred stocks
|
137.2
|
|
|
63.8
|
|
|
122.3
|
|
|||
Total hybrid securities
|
$
|
412.9
|
|
|
$
|
223.4
|
|
|
$
|
427.7
|
|
(millions)
|
Cost
|
|
|
Fair Value
|
|
||
Less than one year
|
$
|
3,839.1
|
|
|
$
|
3,878.2
|
|
One to five years
|
6,771.6
|
|
|
6,848.9
|
|
||
Five to ten years
|
3,318.8
|
|
|
3,413.5
|
|
||
Ten years or greater
|
67.9
|
|
|
79.1
|
|
||
Total
1
|
$
|
13,997.4
|
|
|
$
|
14,219.7
|
|
|
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
|
|
||||||||||||
March 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
U.S. government obligations
|
1
|
|
$
|
7.2
|
|
$
|
0
|
|
1
|
|
$
|
7.2
|
|
$
|
0
|
|
|
0
|
|
$
|
0
|
|
$
|
0
|
|
State and local government obligations
|
57
|
|
270.3
|
|
(1.0
|
)
|
42
|
|
231.8
|
|
(0.5
|
)
|
|
15
|
|
38.5
|
|
(0.5
|
)
|
||||||
Corporate debt securities
|
25
|
|
390.3
|
|
(3.8
|
)
|
17
|
|
242.4
|
|
(2.3
|
)
|
|
8
|
|
147.9
|
|
(1.5
|
)
|
||||||
Residential mortgage-backed securities
|
80
|
|
1,013.9
|
|
(13.1
|
)
|
34
|
|
540.6
|
|
(3.1
|
)
|
|
46
|
|
473.3
|
|
(10.0
|
)
|
||||||
Commercial mortgage-backed securities
|
59
|
|
564.2
|
|
(1.1
|
)
|
53
|
|
560.8
|
|
(1.0
|
)
|
|
6
|
|
3.4
|
|
(0.1
|
)
|
||||||
Other asset-backed securities
|
30
|
|
490.9
|
|
(0.3
|
)
|
29
|
|
472.4
|
|
(0.1
|
)
|
|
1
|
|
18.5
|
|
(0.2
|
)
|
||||||
Redeemable preferred stocks
|
3
|
|
102.1
|
|
(6.6
|
)
|
1
|
|
33.0
|
|
(1.0
|
)
|
|
2
|
|
69.1
|
|
(5.6
|
)
|
||||||
Total fixed maturities
|
255
|
|
2,838.9
|
|
(25.9
|
)
|
177
|
|
2,088.2
|
|
(8.0
|
)
|
|
78
|
|
750.7
|
|
(17.9
|
)
|
||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Nonredeemable preferred stocks
|
5
|
|
183.1
|
|
(5.9
|
)
|
2
|
|
74.5
|
|
(2.2
|
)
|
|
3
|
|
108.6
|
|
(3.7
|
)
|
||||||
Common equities
|
40
|
|
58.3
|
|
(6.0
|
)
|
40
|
|
58.3
|
|
(6.0
|
)
|
|
0
|
|
0
|
|
0
|
|
||||||
Total equity securities
|
45
|
|
241.4
|
|
(11.9
|
)
|
42
|
|
132.8
|
|
(8.2
|
)
|
|
3
|
|
108.6
|
|
(3.7
|
)
|
||||||
Total portfolio
|
300
|
|
$
|
3,080.3
|
|
$
|
(37.8
|
)
|
219
|
|
$
|
2,221.0
|
|
$
|
(16.2
|
)
|
|
81
|
|
$
|
859.3
|
|
$
|
(21.6
|
)
|
|
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
|
|
||||||||||||
March 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
U.S. government obligations
|
18
|
|
$
|
930.4
|
|
$
|
(6.8
|
)
|
5
|
|
$
|
163.1
|
|
$
|
(0.3
|
)
|
|
13
|
|
$
|
767.3
|
|
$
|
(6.5
|
)
|
State and local government obligations
|
106
|
|
603.0
|
|
(9.2
|
)
|
28
|
|
76.8
|
|
(0.6
|
)
|
|
78
|
|
526.2
|
|
(8.6
|
)
|
||||||
Corporate debt securities
|
31
|
|
594.3
|
|
(7.2
|
)
|
7
|
|
101.6
|
|
(0.4
|
)
|
|
24
|
|
492.7
|
|
(6.8
|
)
|
||||||
Residential mortgage-backed securities
|
66
|
|
812.6
|
|
(11.9
|
)
|
24
|
|
359.7
|
|
(1.9
|
)
|
|
42
|
|
452.9
|
|
(10.0
|
)
|
||||||
Commercial mortgage-backed securities
|
59
|
|
783.7
|
|
(17.6
|
)
|
19
|
|
116.7
|
|
(0.2
|
)
|
|
40
|
|
667.0
|
|
(17.4
|
)
|
||||||
Other asset-backed securities
|
8
|
|
112.7
|
|
(0.6
|
)
|
4
|
|
36.8
|
|
(0.1
|
)
|
|
4
|
|
75.9
|
|
(0.5
|
)
|
||||||
Redeemable preferred stocks
|
3
|
|
93.5
|
|
(6.2
|
)
|
0
|
|
0
|
|
0
|
|
|
3
|
|
93.5
|
|
(6.2
|
)
|
||||||
Total fixed maturities
|
291
|
|
3,930.2
|
|
(59.5
|
)
|
87
|
|
854.7
|
|
(3.5
|
)
|
|
204
|
|
3,075.5
|
|
(56.0
|
)
|
||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Nonredeemable preferred stocks
|
3
|
|
84.3
|
|
(1.2
|
)
|
0
|
|
0
|
|
0
|
|
|
3
|
|
84.3
|
|
(1.2
|
)
|
||||||
Common equities
|
9
|
|
34.0
|
|
(2.8
|
)
|
7
|
|
23.1
|
|
(1.6
|
)
|
|
2
|
|
10.9
|
|
(1.2
|
)
|
||||||
Total equity securities
|
12
|
|
118.3
|
|
(4.0
|
)
|
7
|
|
23.1
|
|
(1.6
|
)
|
|
5
|
|
95.2
|
|
(2.4
|
)
|
||||||
Total portfolio
|
303
|
|
$
|
4,048.5
|
|
$
|
(63.5
|
)
|
94
|
|
$
|
877.8
|
|
$
|
(5.1
|
)
|
|
209
|
|
$
|
3,170.7
|
|
$
|
(58.4
|
)
|
|
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
|
|
||||||||||||
December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
U.S. government obligations
|
11
|
|
$
|
428.2
|
|
$
|
(1.3
|
)
|
5
|
|
$
|
150.7
|
|
$
|
(0.3
|
)
|
|
6
|
|
$
|
277.5
|
|
$
|
(1.0
|
)
|
State and local government obligations
|
46
|
|
234.2
|
|
(1.1
|
)
|
28
|
|
177.9
|
|
(0.4
|
)
|
|
18
|
|
56.3
|
|
(0.7
|
)
|
||||||
Corporate debt securities
|
53
|
|
843.2
|
|
(10.4
|
)
|
43
|
|
647.5
|
|
(6.1
|
)
|
|
10
|
|
195.7
|
|
(4.3
|
)
|
||||||
Residential mortgage-backed securities
|
70
|
|
844.2
|
|
(10.8
|
)
|
33
|
|
465.2
|
|
(3.1
|
)
|
|
37
|
|
379.0
|
|
(7.7
|
)
|
||||||
Commercial mortgage-backed securities
|
63
|
|
723.4
|
|
(2.6
|
)
|
54
|
|
667.5
|
|
(1.4
|
)
|
|
9
|
|
55.9
|
|
(1.2
|
)
|
||||||
Other asset-backed securities
|
44
|
|
741.8
|
|
(0.8
|
)
|
42
|
|
715.7
|
|
(0.7
|
)
|
|
2
|
|
26.1
|
|
(0.1
|
)
|
||||||
Redeemable preferred stocks
|
3
|
|
103.0
|
|
(5.7
|
)
|
1
|
|
33.0
|
|
(1.0
|
)
|
|
2
|
|
70.0
|
|
(4.7
|
)
|
||||||
Total fixed maturities
|
290
|
|
3,918.0
|
|
(32.7
|
)
|
206
|
|
2,857.5
|
|
(13.0
|
)
|
|
84
|
|
1,060.5
|
|
(19.7
|
)
|
||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Nonredeemable preferred stocks
|
8
|
|
231.4
|
|
(6.4
|
)
|
5
|
|
143.2
|
|
(3.6
|
)
|
|
3
|
|
88.2
|
|
(2.8
|
)
|
||||||
Common equities
|
20
|
|
68.4
|
|
(10.1
|
)
|
19
|
|
61.8
|
|
(9.6
|
)
|
|
1
|
|
6.6
|
|
(0.5
|
)
|
||||||
Total equity securities
|
28
|
|
299.8
|
|
(16.5
|
)
|
24
|
|
205.0
|
|
(13.2
|
)
|
|
4
|
|
94.8
|
|
(3.3
|
)
|
||||||
Total portfolio
|
318
|
|
$
|
4,217.8
|
|
$
|
(49.2
|
)
|
230
|
|
$
|
3,062.5
|
|
$
|
(26.2
|
)
|
|
88
|
|
$
|
1,155.3
|
|
$
|
(23.0
|
)
|
|
March 31,
|
|
December 31,
2014 |
|
|||||||
(millions)
|
2015
|
|
|
2014
|
|
|
|||||
Fixed maturities:
|
|
|
|
|
|
||||||
Residential mortgage-backed securities
|
$
|
(44.1
|
)
|
|
$
|
(44.1
|
)
|
|
$
|
(44.1
|
)
|
Commercial mortgage-backed securities
|
(0.6
|
)
|
|
(0.9
|
)
|
|
(0.6
|
)
|
|||
Total fixed maturities
|
$
|
(44.7
|
)
|
|
$
|
(45.0
|
)
|
|
$
|
(44.7
|
)
|
|
Three Months Ended March 31, 2015
|
||||||||||
|
Mortgage-Backed
|
|
|
||||||||
(millions)
|
Residential
|
|
|
Commercial
|
|
|
Total
|
|
|||
Balance at December 31, 2014
|
$
|
12.7
|
|
|
$
|
0.4
|
|
|
$
|
13.1
|
|
Change in recoveries of future cash flows expected to be collected
1
|
(0.5
|
)
|
|
0
|
|
|
(0.5
|
)
|
|||
Balance at March 31, 2015
|
$
|
12.2
|
|
|
$
|
0.4
|
|
|
$
|
12.6
|
|
|
Three Months Ended March 31, 2014
|
||||||||||
|
Mortgage-Backed
|
|
|
||||||||
(millions)
|
Residential
|
|
|
Commercial
|
|
|
Total
|
|
|||
Balance at December 31, 2013
|
$
|
19.2
|
|
|
$
|
0.4
|
|
|
$
|
19.6
|
|
Change in recoveries of future cash flows expected to be collected
1
|
(0.1
|
)
|
|
0
|
|
|
(0.1
|
)
|
|||
Balance at March 31, 2014
|
$
|
19.1
|
|
|
$
|
0.4
|
|
|
$
|
19.5
|
|
(millions)
|
2015
|
|
|
2014
|
|
||
Gross realized gains on security sales
|
|
|
|
||||
Fixed maturities:
|
|
|
|
||||
U.S. government obligations
|
$
|
4.9
|
|
|
$
|
6.5
|
|
State and local government obligations
|
0
|
|
|
4.4
|
|
||
Corporate and other debt securities
|
9.1
|
|
|
23.1
|
|
||
Residential mortgage-backed securities
|
0.1
|
|
|
1.0
|
|
||
Commercial mortgage-backed securities
|
10.8
|
|
|
6.1
|
|
||
Total fixed maturities
|
24.9
|
|
|
41.1
|
|
||
Equity securities:
|
|
|
|
||||
Nonredeemable preferred stocks
|
15.8
|
|
|
25.9
|
|
||
Common equities
|
17.8
|
|
|
83.0
|
|
||
Subtotal gross realized gains on security sales
|
58.5
|
|
|
150.0
|
|
||
Gross realized losses on security sales
|
|
|
|
||||
Fixed maturities:
|
|
|
|
||||
U.S. government obligations
|
(0.8
|
)
|
|
(4.7
|
)
|
||
State and local government obligations
|
0
|
|
|
(0.1
|
)
|
||
Corporate and other debt securities
|
(0.8
|
)
|
|
(2.2
|
)
|
||
Commercial mortgage-backed securities
|
(0.2
|
)
|
|
(2.7
|
)
|
||
Redeemable preferred stocks
|
0
|
|
|
(3.2
|
)
|
||
Total fixed maturities
|
(1.8
|
)
|
|
(12.9
|
)
|
||
Equity securities:
|
|
|
|
||||
Common equities
|
(0.4
|
)
|
|
(3.4
|
)
|
||
Subtotal gross realized losses on security sales
|
(2.2
|
)
|
|
(16.3
|
)
|
||
Net realized gains (losses) on security sales
|
|
|
|
||||
Fixed maturities:
|
|
|
|
||||
U.S. government obligations
|
4.1
|
|
|
1.8
|
|
||
State and local government obligations
|
0
|
|
|
4.3
|
|
||
Corporate and other debt securities
|
8.3
|
|
|
20.9
|
|
||
Residential mortgage-backed securities
|
0.1
|
|
|
1.0
|
|
||
Commercial mortgage-backed securities
|
10.6
|
|
|
3.4
|
|
||
Redeemable preferred stocks
|
0
|
|
|
(3.2
|
)
|
||
Total fixed maturities
|
23.1
|
|
|
28.2
|
|
||
Equity securities:
|
|
|
|
||||
Nonredeemable preferred stocks
|
15.8
|
|
|
25.9
|
|
||
Common equities
|
17.4
|
|
|
79.6
|
|
||
Subtotal net realized gains (losses) on security sales
|
56.3
|
|
|
133.7
|
|
||
Other-than-temporary impairment losses
|
|
|
|
||||
Equity securities:
|
|
|
|
||||
Common equities
|
(7.9
|
)
|
|
0
|
|
||
Subtotal other-than-temporary impairment losses
|
(7.9
|
)
|
|
0
|
|
||
Other gains (losses)
|
|
|
|
||||
Hybrid securities
|
3.3
|
|
|
3.8
|
|
||
Derivative instruments
|
(18.8
|
)
|
|
(19.3
|
)
|
||
Litigation settlements
|
0.1
|
|
|
1.2
|
|
||
Subtotal other gains (losses)
|
(15.4
|
)
|
|
(14.3
|
)
|
||
Total net realized gains (losses) on securities
|
$
|
33.0
|
|
|
$
|
119.4
|
|
(millions)
|
2015
|
|
2014
|
|
||
Fixed maturities:
|
|
|
||||
U.S. government obligations
|
$
|
9.1
|
|
$
|
13.0
|
|
State and local government obligations
|
11.9
|
|
12.8
|
|
||
Foreign government obligations
|
0.1
|
|
0.1
|
|
||
Corporate debt securities
|
22.9
|
|
22.0
|
|
||
Residential mortgage-backed securities
|
12.8
|
|
9.9
|
|
||
Commercial mortgage-backed securities
|
16.9
|
|
16.7
|
|
||
Other asset-backed securities
|
5.0
|
|
4.2
|
|
||
Redeemable preferred stocks
|
3.8
|
|
4.1
|
|
||
Total fixed maturities
|
82.5
|
|
82.8
|
|
||
Equity securities:
|
|
|
||||
Nonredeemable preferred stocks
|
10.5
|
|
9.9
|
|
||
Common equities
|
11.7
|
|
10.4
|
|
||
Short-term investments
|
0.4
|
|
0.2
|
|
||
Investment income
|
105.1
|
|
103.3
|
|
||
Investment expenses
|
(5.3
|
)
|
(4.1
|
)
|
||
Net investment income
|
$
|
99.8
|
|
$
|
99.2
|
|
(millions)
|
|
|
|
|
Balance Sheet
2
|
|
Comprehensive Income Statement
|
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
Assets (Liabilities)
Fair Value |
|
Pretax Net Realized
Gains (Losses)
|
||||||||||||||||||||||||||
|
Notional Value
1
|
|
|
|
|
|
|
|
Three Months Ended
|
||||||||||||||||||||||||||
|
March 31,
|
|
Dec. 31,
|
|
|
|
|
|
March 31,
|
|
Dec. 31,
|
|
March 31,
|
||||||||||||||||||||||
Derivatives designated as:
|
2015
|
|
|
2014
|
|
|
2014
|
|
|
Purpose
|
|
Classification
|
|
2015
|
|
|
2014
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
||||||||
Hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Closed:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Ineffective cash flow hedge
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
44
|
|
|
Manage interest
rate risk
|
|
NA
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Non-hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate swaps
|
750
|
|
|
750
|
|
|
750
|
|
|
Manage portfolio
duration
|
|
Investments—
fixed maturities
|
|
0.1
|
|
|
51.9
|
|
|
15.8
|
|
|
(18.8
|
)
|
|
(19.3
|
)
|
||||||||
Total
|
NA
|
|
|
NA
|
|
|
NA
|
|
|
|
|
|
|
$
|
0.1
|
|
|
$
|
51.9
|
|
|
$
|
15.8
|
|
|
$
|
(18.8
|
)
|
|
$
|
(19.3
|
)
|
•
|
Level 1
: Inputs are unadjusted quoted prices in active markets for identical instruments at the measurement date (e.g., U.S. government obligations, active exchange-traded equity securities, and certain short-term securities).
|
•
|
Level 2
: Inputs (other than quoted prices included within Level 1) that are observable for the instrument either directly or indirectly (e.g., certain corporate and municipal bonds and certain preferred stocks). This includes: (i) quoted prices for similar instruments in active markets, (ii) quoted prices for identical or similar instruments in markets that are not active, (iii) inputs other than quoted prices that are observable for the instruments, and (iv) inputs that are derived principally from or corroborated by observable market data by correlation or other means.
|
•
|
Level 3
: Inputs that are unobservable. Unobservable inputs reflect our subjective evaluation about the assumptions market participants would use in pricing the financial instrument (e.g., certain structured securities and privately held investments).
|
|
Fair Value
|
|
|
||||||||||||||||
(millions)
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
Cost
|
|
|||||
March 31, 2015
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government obligations
|
$
|
2,708.2
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
2,708.2
|
|
|
$
|
2,678.1
|
|
State and local government obligations
|
0
|
|
|
2,273.8
|
|
|
0
|
|
|
2,273.8
|
|
|
2,224.8
|
|
|||||
Foreign government obligations
|
20.0
|
|
|
0
|
|
|
0
|
|
|
20.0
|
|
|
20.0
|
|
|||||
Corporate debt securities
|
0
|
|
|
2,904.0
|
|
|
0
|
|
|
2,904.0
|
|
|
2,851.6
|
|
|||||
Subtotal
|
2,728.2
|
|
|
5,177.8
|
|
|
0
|
|
|
7,906.0
|
|
|
7,774.5
|
|
|||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential mortgage-backed
|
0
|
|
|
1,648.2
|
|
|
0
|
|
|
1,648.2
|
|
|
1,629.2
|
|
|||||
Commercial mortgage-backed
|
0
|
|
|
2,475.7
|
|
|
11.4
|
|
|
2,487.1
|
|
|
2,437.4
|
|
|||||
Other asset-backed
|
0
|
|
|
1,901.5
|
|
|
0
|
|
|
1,901.5
|
|
|
1,896.1
|
|
|||||
Subtotal asset-backed securities
|
0
|
|
|
6,025.4
|
|
|
11.4
|
|
|
6,036.8
|
|
|
5,962.7
|
|
|||||
Redeemable preferred stocks:
|
|
|
|
|
|
|
|
|
|
||||||||||
Financials
|
0
|
|
|
98.2
|
|
|
0
|
|
|
98.2
|
|
|
77.3
|
|
|||||
Utilities
|
0
|
|
|
64.4
|
|
|
0
|
|
|
64.4
|
|
|
65.0
|
|
|||||
Industrials
|
0
|
|
|
114.4
|
|
|
0
|
|
|
114.4
|
|
|
118.0
|
|
|||||
Subtotal redeemable preferred stocks
|
0
|
|
|
277.0
|
|
|
0
|
|
|
277.0
|
|
|
260.3
|
|
|||||
Total fixed maturities
|
2,728.2
|
|
|
11,480.2
|
|
|
11.4
|
|
|
14,219.8
|
|
|
13,997.5
|
|
|||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Nonredeemable preferred stocks:
|
|
|
|
|
|
|
|
|
|
||||||||||
Financials
|
181.7
|
|
|
576.5
|
|
|
69.9
|
|
|
828.1
|
|
|
598.3
|
|
|||||
Subtotal nonredeemable preferred stocks
|
181.7
|
|
|
576.5
|
|
|
69.9
|
|
|
828.1
|
|
|
598.3
|
|
|||||
Common equities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stocks
|
2,515.4
|
|
|
0
|
|
|
0
|
|
|
2,515.4
|
|
|
1,294.7
|
|
|||||
Other risk investments
|
0
|
|
|
0
|
|
|
0.3
|
|
|
0.3
|
|
|
0.3
|
|
|||||
Subtotal common equities
|
2,515.4
|
|
|
0
|
|
|
0.3
|
|
|
2,515.7
|
|
|
1,295.0
|
|
|||||
Total fixed maturities and equity securities
|
5,425.3
|
|
|
12,056.7
|
|
|
81.6
|
|
|
17,563.6
|
|
|
15,890.8
|
|
|||||
Short-term investments
|
2,267.0
|
|
|
0
|
|
|
0
|
|
|
2,267.0
|
|
|
2,267.0
|
|
|||||
Total portfolio
|
$
|
7,692.3
|
|
|
$
|
12,056.7
|
|
|
$
|
81.6
|
|
|
$
|
19,830.6
|
|
|
$
|
18,157.8
|
|
Debt
|
$
|
0
|
|
|
$
|
2,910.9
|
|
|
$
|
0
|
|
|
$
|
2,910.9
|
|
|
$
|
2,560.1
|
|
|
Fair Value
|
|
|
||||||||||||||||
(millions)
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
Cost
|
|
|||||
March 31, 2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government obligations
|
$
|
3,230.0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
3,230.0
|
|
|
$
|
3,197.8
|
|
State and local government obligations
|
0
|
|
|
2,154.9
|
|
|
0
|
|
|
2,154.9
|
|
|
2,131.0
|
|
|||||
Foreign government obligations
|
17.9
|
|
|
0
|
|
|
0
|
|
|
17.9
|
|
|
17.9
|
|
|||||
Corporate debt securities
|
0
|
|
|
2,501.6
|
|
|
0
|
|
|
2,501.6
|
|
|
2,461.6
|
|
|||||
Subtotal
|
3,247.9
|
|
|
4,656.5
|
|
|
0
|
|
|
7,904.4
|
|
|
7,808.3
|
|
|||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential mortgage-backed
|
0
|
|
|
1,307.4
|
|
|
0
|
|
|
1,307.4
|
|
|
1,286.7
|
|
|||||
Commercial mortgage-backed
|
0
|
|
|
2,033.0
|
|
|
28.6
|
|
|
2,061.6
|
|
|
2,037.7
|
|
|||||
Other asset-backed
|
0
|
|
|
942.5
|
|
|
0
|
|
|
942.5
|
|
|
936.2
|
|
|||||
Subtotal asset-backed securities
|
0
|
|
|
4,282.9
|
|
|
28.6
|
|
|
4,311.5
|
|
|
4,260.6
|
|
|||||
Redeemable preferred stocks:
|
|
|
|
|
|
|
|
|
|
||||||||||
Financials
|
0
|
|
|
107.4
|
|
|
0
|
|
|
107.4
|
|
|
84.2
|
|
|||||
Utilities
|
0
|
|
|
65.2
|
|
|
0
|
|
|
65.2
|
|
|
64.9
|
|
|||||
Industrials
|
0
|
|
|
117.7
|
|
|
0
|
|
|
117.7
|
|
|
117.8
|
|
|||||
Subtotal redeemable preferred stocks
|
0
|
|
|
290.3
|
|
|
0
|
|
|
290.3
|
|
|
266.9
|
|
|||||
Total fixed maturities
|
3,247.9
|
|
|
9,229.7
|
|
|
28.6
|
|
|
12,506.2
|
|
|
12,335.8
|
|
|||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Nonredeemable preferred stocks:
|
|
|
|
|
|
|
|
|
|
||||||||||
Financials
|
284.0
|
|
|
411.8
|
|
|
42.1
|
|
|
737.9
|
|
|
460.7
|
|
|||||
Subtotal nonredeemable preferred stocks
|
284.0
|
|
|
411.8
|
|
|
42.1
|
|
|
737.9
|
|
|
460.7
|
|
|||||
Common equities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stocks
|
2,278.3
|
|
|
0
|
|
|
0
|
|
|
2,278.3
|
|
|
1,252.3
|
|
|||||
Other risk investments
|
0
|
|
|
0
|
|
|
0.4
|
|
|
0.4
|
|
|
0.4
|
|
|||||
Subtotal common equities
|
2,278.3
|
|
|
0
|
|
|
0.4
|
|
|
2,278.7
|
|
|
1,252.7
|
|
|||||
Total fixed maturities and equity securities
|
5,810.2
|
|
|
9,641.5
|
|
|
71.1
|
|
|
15,522.8
|
|
|
14,049.2
|
|
|||||
Short-term investments
|
1,611.7
|
|
|
261.2
|
|
|
0
|
|
|
1,872.9
|
|
|
1,872.9
|
|
|||||
Total portfolio
|
$
|
7,421.9
|
|
|
$
|
9,902.7
|
|
|
$
|
71.1
|
|
|
$
|
17,395.7
|
|
|
$
|
15,922.1
|
|
Debt
|
$
|
0
|
|
|
$
|
2,152.5
|
|
|
$
|
0
|
|
|
$
|
2,152.5
|
|
|
$
|
1,861.3
|
|
|
Fair Value
|
|
|
||||||||||||||||
(millions)
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
Cost
|
|
|||||
December 31, 2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government obligations
|
$
|
2,667.1
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
2,667.1
|
|
|
$
|
2,641.1
|
|
State and local government obligations
|
0
|
|
|
2,139.2
|
|
|
0
|
|
|
2,139.2
|
|
|
2,095.7
|
|
|||||
Foreign government obligations
|
14.2
|
|
|
0
|
|
|
0
|
|
|
14.2
|
|
|
14.2
|
|
|||||
Corporate debt securities
|
0
|
|
|
2,836.7
|
|
|
0
|
|
|
2,836.7
|
|
|
2,813.9
|
|
|||||
Subtotal
|
2,681.3
|
|
|
4,975.9
|
|
|
0
|
|
|
7,657.2
|
|
|
7,564.9
|
|
|||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential mortgage-backed
|
0
|
|
|
1,658.5
|
|
|
0
|
|
|
1,658.5
|
|
|
1,635.5
|
|
|||||
Commercial mortgage-backed
|
0
|
|
|
2,304.0
|
|
|
11.6
|
|
|
2,315.6
|
|
|
2,278.7
|
|
|||||
Other asset-backed
|
0
|
|
|
1,638.7
|
|
|
0
|
|
|
1,638.7
|
|
|
1,634.9
|
|
|||||
Subtotal asset-backed securities
|
0
|
|
|
5,601.2
|
|
|
11.6
|
|
|
5,612.8
|
|
|
5,549.1
|
|
|||||
Redeemable preferred stocks:
|
|
|
|
|
|
|
|
|
|
||||||||||
Financials
|
0
|
|
|
97.9
|
|
|
0
|
|
|
97.9
|
|
|
77.3
|
|
|||||
Utilities
|
0
|
|
|
65.3
|
|
|
0
|
|
|
65.3
|
|
|
65.0
|
|
|||||
Industrials
|
0
|
|
|
116.0
|
|
|
0
|
|
|
116.0
|
|
|
117.9
|
|
|||||
Subtotal redeemable preferred stocks
|
0
|
|
|
279.2
|
|
|
0
|
|
|
279.2
|
|
|
260.2
|
|
|||||
Total fixed maturities
|
2,681.3
|
|
|
10,856.3
|
|
|
11.6
|
|
|
13,549.2
|
|
|
13,374.2
|
|
|||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Nonredeemable preferred stocks:
|
|
|
|
|
|
|
|
|
|
||||||||||
Financials
|
204.1
|
|
|
554.1
|
|
|
69.3
|
|
|
827.5
|
|
|
590.4
|
|
|||||
Subtotal nonredeemable preferred stocks
|
204.1
|
|
|
554.1
|
|
|
69.3
|
|
|
827.5
|
|
|
590.4
|
|
|||||
Common equities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stocks
|
2,491.9
|
|
|
0
|
|
|
0
|
|
|
2,491.9
|
|
|
1,288.8
|
|
|||||
Other risk investments
|
0
|
|
|
0
|
|
|
0.4
|
|
|
0.4
|
|
|
0.4
|
|
|||||
Subtotal common equities
|
2,491.9
|
|
|
0
|
|
|
0.4
|
|
|
2,492.3
|
|
|
1,289.2
|
|
|||||
Total fixed maturities and equity securities
|
5,377.3
|
|
|
11,410.4
|
|
|
81.3
|
|
|
16,869.0
|
|
|
15,253.8
|
|
|||||
Short-term investments
|
1,937.0
|
|
|
212.0
|
|
|
0
|
|
|
2,149.0
|
|
|
2,149.0
|
|
|||||
Total portfolio
|
$
|
7,314.3
|
|
|
$
|
11,622.4
|
|
|
$
|
81.3
|
|
|
$
|
19,018.0
|
|
|
$
|
17,402.8
|
|
Debt
|
$
|
0
|
|
|
$
|
2,527.5
|
|
|
$
|
0
|
|
|
$
|
2,527.5
|
|
|
$
|
2,164.7
|
|
|
Level 3 Fair Value
|
||||||||||||||||||||||||||||||
|
Three Months Ended March 31, 2015
|
||||||||||||||||||||||||||||||
(millions)
|
Fair Value at December 31, 2014
|
|
|
Calls/
Maturities/
Paydowns
|
|
|
Purchases
|
|
|
Sales
|
|
|
Net Realized (Gain) Loss on Sales
|
|
|
Change in Valuation
|
|
|
Net
Transfers
In (Out)
|
|
|
Fair Value at March 31, 2015
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Residential mortgage-backed
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Commercial mortgage-backed
|
11.6
|
|
|
(0.2
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
11.4
|
|
||||||||
Total fixed maturities
|
11.6
|
|
|
(0.2
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
11.4
|
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Nonredeemable preferred stocks:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Financials
1
|
69.3
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0.6
|
|
|
0
|
|
|
69.9
|
|
||||||||
Common equities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other risk investments
|
0.4
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(0.1
|
)
|
|
0
|
|
|
0.3
|
|
||||||||
Total Level 3 securities
|
$
|
81.3
|
|
|
$
|
(0.2
|
)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0.5
|
|
|
$
|
0
|
|
|
$
|
81.6
|
|
|
Level 3 Fair Value
|
||||||||||||||||||||||||||||||
|
Three Months Ended March 31, 2014
|
||||||||||||||||||||||||||||||
(millions)
|
Fair Value at December 31, 2013
|
|
|
Calls/
Maturities/
Paydowns
|
|
|
Purchases
|
|
|
Sales
|
|
|
Net Realized (Gain) Loss on Sales
|
|
|
Change in
Valuation
|
|
|
Net
Transfers
In (Out)
|
|
|
Fair Value at March 31, 2014
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Residential mortgage-backed
|
$
|
0.2
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
(0.2
|
)
|
|
$
|
0
|
|
|
$
|
0
|
|
Commercial mortgage-backed
|
29.0
|
|
|
(0.5
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0.1
|
|
|
0
|
|
|
28.6
|
|
||||||||
Total fixed maturities
|
29.2
|
|
|
(0.5
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(0.1
|
)
|
|
0
|
|
|
28.6
|
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Nonredeemable preferred stocks:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Financials
1
|
39.0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
3.1
|
|
|
0
|
|
|
42.1
|
|
||||||||
Common equities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other risk investments
|
0.5
|
|
|
(0.1
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0.4
|
|
||||||||
Total Level 3 securities
|
$
|
68.7
|
|
|
$
|
(0.6
|
)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
3.0
|
|
|
$
|
0
|
|
|
$
|
71.1
|
|
|
Quantitative Information about Level 3 Fair Value Measurements
|
|||||||||
($ in millions)
|
Fair Value at March 31, 2015
|
|
|
Valuation Technique
|
|
Unobservable Input
|
|
Unobservable
Input Assumption |
|
|
Fixed maturities:
|
|
|
|
|
|
|
|
|||
Asset-backed securities:
|
|
|
|
|
|
|
|
|||
Commercial mortgage-backed
|
$
|
11.4
|
|
|
External vendor
|
|
Prepayment rate
1
|
|
0
|
|
Total fixed maturities
|
11.4
|
|
|
|
|
|
|
|
||
Equity securities:
|
|
|
|
|
|
|
|
|||
Nonredeemable preferred stocks:
|
|
|
|
|
|
|
|
|||
Financials
|
69.9
|
|
|
Multiple of tangible net book value
|
|
Price to book ratio multiple
|
|
2.6
|
|
|
Subtotal Level 3 securities
|
81.3
|
|
|
|
|
|
|
|
||
Pricing exemption securities
2
|
0.3
|
|
|
|
|
|
|
|
||
Total Level 3 securities
|
$
|
81.6
|
|
|
|
|
|
|
|
|
Quantitative Information about Level 3 Fair Value Measurements
|
|||||||||
($ in millions)
|
Fair Value at March 31, 2014
|
|
|
Valuation Technique
|
|
Unobservable Input
|
|
Unobservable
Input Assumption |
|
|
Fixed maturities:
|
|
|
|
|
|
|
|
|||
Asset-backed securities:
|
|
|
|
|
|
|
|
|||
Commercial mortgage-backed
|
$
|
28.6
|
|
|
External vendor
|
|
Prepayment rate
1
|
|
0
|
|
Total fixed maturities
|
28.6
|
|
|
|
|
|
|
|
||
Equity securities:
|
|
|
|
|
|
|
|
|||
Nonredeemable preferred stocks:
|
|
|
|
|
|
|
|
|||
Financials
|
42.1
|
|
|
Multiple of tangible net book value
|
|
Price to book ratio multiple
|
|
1.9
|
|
|
Subtotal Level 3 securities
|
70.7
|
|
|
|
|
|
|
|
||
Pricing exemption securities
2
|
0.4
|
|
|
|
|
|
|
|
||
Total Level 3 securities
|
$
|
71.1
|
|
|
|
|
|
|
|
|
Quantitative Information about Level 3 Fair Value Measurements
|
|||||||||
($ in millions)
|
Fair Value at Dec. 31, 2014
|
|
|
Valuation Technique
|
|
Unobservable Input
|
|
Unobservable
Input Assumption |
|
|
Fixed maturities:
|
|
|
|
|
|
|
|
|||
Asset-backed securities:
|
|
|
|
|
|
|
|
|||
Commercial mortgage-backed
|
$
|
11.6
|
|
|
External vendor
|
|
Prepayment rate
1
|
|
0
|
|
Total fixed maturities
|
11.6
|
|
|
|
|
|
|
|
||
Equity securities:
|
|
|
|
|
|
|
|
|||
Nonredeemable preferred stocks:
|
|
|
|
|
|
|
|
|||
Financials
|
69.3
|
|
|
Multiple of tangible net book value
|
|
Price to book ratio multiple
|
|
2.6
|
|
|
Subtotal Level 3 securities
|
80.9
|
|
|
|
|
|
|
|
||
Pricing exemption securities
2
|
0.4
|
|
|
|
|
|
|
|
||
Total Level 3 securities
|
$
|
81.3
|
|
|
|
|
|
|
|
|
March 31, 2015
|
|
March 31, 2014
|
|
December 31, 2014
|
||||||||||||||||||
(millions)
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
||||||||||||
3.75% Senior Notes due 2021
|
$
|
497.9
|
|
|
$
|
542.6
|
|
|
$
|
497.6
|
|
|
$
|
524.5
|
|
|
$
|
497.8
|
|
|
$
|
535.6
|
|
6 5/8% Senior Notes due 2029
|
295.6
|
|
|
393.6
|
|
|
295.4
|
|
|
381.8
|
|
|
295.5
|
|
|
400.6
|
|
||||||
6.25% Senior Notes due 2032
|
394.9
|
|
|
525.6
|
|
|
394.7
|
|
|
501.4
|
|
|
394.8
|
|
|
527.9
|
|
||||||
4.35% Senior Notes due 2044
|
346.3
|
|
|
387.1
|
|
|
0
|
|
|
0
|
|
|
346.3
|
|
|
378.9
|
|
||||||
3.70% Senior Notes due 2045
|
394.9
|
|
|
394.8
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
6.70% Fixed-to-Floating Rate Junior Subordinated Debentures due 2067
|
630.5
|
|
|
667.2
|
|
|
673.6
|
|
|
744.8
|
|
|
630.3
|
|
|
684.5
|
|
||||||
Total
|
$
|
2,560.1
|
|
|
$
|
2,910.9
|
|
|
$
|
1,861.3
|
|
|
$
|
2,152.5
|
|
|
$
|
2,164.7
|
|
|
$
|
2,527.5
|
|
|
Three Months Ended March 31,
|
||||||||||||||
|
2015
|
|
2014
|
||||||||||||
(millions)
|
Revenues
|
|
Pretax
Profit
(Loss)
|
|
Revenues
|
|
Pretax
Profit
(Loss)
|
||||||||
Personal Lines
|
|
|
|
|
|
|
|
||||||||
Agency
|
$
|
2,244.5
|
|
|
$
|
194.5
|
|
|
$
|
2,203.2
|
|
|
$
|
178.6
|
|
Direct
|
1,955.4
|
|
|
68.2
|
|
|
1,762.2
|
|
|
71.0
|
|
||||
Total Personal Lines
1
|
4,199.9
|
|
|
262.7
|
|
|
3,965.4
|
|
|
249.6
|
|
||||
Commercial Lines
|
466.4
|
|
|
78.5
|
|
|
436.9
|
|
|
40.9
|
|
||||
Other indemnity
|
0
|
|
|
0.4
|
|
|
0
|
|
|
(0.7
|
)
|
||||
Total underwriting operations
|
4,666.3
|
|
|
341.6
|
|
|
4,402.3
|
|
|
289.8
|
|
||||
Fees and other revenues
2
|
73.7
|
|
|
NA
|
|
|
72.8
|
|
|
NA
|
|
||||
Service businesses
|
17.2
|
|
|
1.3
|
|
|
9.8
|
|
|
0.1
|
|
||||
Investments
3
|
138.1
|
|
|
132.8
|
|
|
222.7
|
|
|
218.6
|
|
||||
Interest expense
|
NA
|
|
|
(32.5
|
)
|
|
NA
|
|
|
(26.7
|
)
|
||||
Consolidated total
|
$
|
4,895.3
|
|
|
$
|
443.2
|
|
|
$
|
4,707.6
|
|
|
$
|
481.8
|
|
|
Three Months Ended March 31,
|
||||||||
|
2015
|
|
2014
|
||||||
|
Under-writing
Margin
|
|
Combined
Ratio
|
|
Under-writing
Margin
|
|
Combined
Ratio
|
||
Personal Lines
|
|
|
|
|
|
|
|
||
Agency
|
8.7
|
%
|
|
91.3
|
|
8.1
|
%
|
|
91.9
|
Direct
|
3.5
|
|
|
96.5
|
|
4.0
|
|
|
96.0
|
Total Personal Lines
|
6.3
|
|
|
93.7
|
|
6.3
|
|
|
93.7
|
Commercial Lines
|
16.8
|
|
|
83.2
|
|
9.4
|
|
|
90.6
|
Other indemnity
1
|
NM
|
|
|
NM
|
|
NM
|
|
|
NM
|
Total underwriting operations
|
7.3
|
|
|
92.7
|
|
6.6
|
|
|
93.4
|
(millions, except per share amounts)
|
|
Amount
|
||||||
Dividend Type
|
Declared
|
Paid
|
Per Share
|
|
Total
|
|
||
Annual – Variable
|
December 2014
|
February 2015
|
$
|
0.6862
|
|
$
|
404.1
|
|
Annual – Variable
|
December 2013
|
February 2014
|
0.4929
|
|
293.9
|
|
||
Special
|
December 2013
|
February 2014
|
1.0000
|
|
596.3
|
|
|
|
|
|
|
|
|
Components of Changes in
Accumulated Other
Comprehensive Income (after tax)
|
||||||||||||||||
(millions)
|
Pretax total
accumulated
other
comprehensive
income
|
|
|
Total tax
(provision)
benefit
|
|
|
After tax total
accumulated
other
comprehensive
income
|
|
|
Total net
unrealized
gains (losses)
on securities
|
|
|
Net
unrealized
gains on
forecasted
transactions
|
|
|
Foreign
currency
translation
adjustment
|
|
||||||
Balance at December 31, 2014
|
$
|
1,574.0
|
|
|
$
|
(550.9
|
)
|
|
$
|
1,023.1
|
|
|
$
|
1,021.9
|
|
|
$
|
1.5
|
|
|
$
|
(0.3
|
)
|
Other comprehensive income (loss) before reclassifications:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment securities
|
99.3
|
|
|
(34.7
|
)
|
|
64.6
|
|
|
64.6
|
|
|
0
|
|
|
0
|
|
||||||
Net non-credit related OTTI losses, adjusted for
valuation changes
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
Forecasted transactions
|
(12.8
|
)
|
|
4.4
|
|
|
(8.4
|
)
|
|
0
|
|
|
(8.4
|
)
|
|
0
|
|
||||||
Foreign currency translation adjustment
|
(0.9
|
)
|
|
0.4
|
|
|
(0.5
|
)
|
|
0
|
|
|
0
|
|
|
(0.5
|
)
|
||||||
Total other comprehensive income (loss) before reclassifications
|
85.6
|
|
|
(29.9
|
)
|
|
55.7
|
|
|
64.6
|
|
|
(8.4
|
)
|
|
(0.5
|
)
|
||||||
Less: Reclassification adjustment for amounts realized in net income by income statement line item:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net impairment losses recognized in earnings
|
(7.9
|
)
|
|
2.8
|
|
|
(5.1
|
)
|
|
(5.1
|
)
|
|
0
|
|
|
0
|
|
||||||
Net realized gains (losses) on securities
|
52.8
|
|
|
(18.5
|
)
|
|
34.3
|
|
|
34.3
|
|
|
0
|
|
|
0
|
|
||||||
Interest expense
|
0.5
|
|
|
(0.2
|
)
|
|
0.3
|
|
|
0
|
|
|
0.3
|
|
|
0
|
|
||||||
Total reclassification adjustment for amounts realized in net income
|
45.4
|
|
|
(15.9
|
)
|
|
29.5
|
|
|
29.2
|
|
|
0.3
|
|
|
0
|
|
||||||
Total other comprehensive income (loss)
|
40.2
|
|
|
(14.0
|
)
|
|
26.2
|
|
|
35.4
|
|
|
(8.7
|
)
|
|
(0.5
|
)
|
||||||
Balance at March 31, 2015
|
$
|
1,614.2
|
|
|
$
|
(564.9
|
)
|
|
$
|
1,049.3
|
|
|
$
|
1,057.3
|
|
|
$
|
(7.2
|
)
|
|
$
|
(0.8
|
)
|
|
|
|
|
|
|
|
Components of Changes in
Accumulated Other
Comprehensive Income (after tax)
|
||||||||||||||||
(millions)
|
Pretax total
accumulated
other
comprehensive
income
|
|
|
Total tax
(provision)
benefit
|
|
|
After tax total
accumulated
other
comprehensive
income
|
|
|
Total net
unrealized
gains (losses)
on securities
|
|
|
Net
unrealized
gains on
forecasted
transactions
|
|
|
Foreign
currency
translation
adjustment
|
|
||||||
Balance at December 31, 2013
|
$
|
1,464.1
|
|
|
$
|
(512.4
|
)
|
|
$
|
951.7
|
|
|
$
|
947.0
|
|
|
$
|
4.1
|
|
|
$
|
0.6
|
|
Other comprehensive income (loss) before reclassifications:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment securities
|
131.8
|
|
|
(46.1
|
)
|
|
85.7
|
|
|
85.7
|
|
|
0
|
|
|
0
|
|
||||||
Net non-credit related OTTI losses, adjusted for
valuation changes
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
Forecasted transactions
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
Foreign currency translation adjustment
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
Total other comprehensive income (loss) before reclassifications
|
131.8
|
|
|
(46.1
|
)
|
|
85.7
|
|
|
85.7
|
|
|
0
|
|
|
0
|
|
||||||
Less: Reclassification adjustment for amounts realized in net income by income statement line item:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net impairment losses recognized in earnings
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
Net realized gains (losses) on securities
|
131.9
|
|
|
(46.1
|
)
|
|
85.8
|
|
|
85.8
|
|
|
0
|
|
|
0
|
|
||||||
Interest expense
|
0.5
|
|
|
(0.2
|
)
|
|
0.3
|
|
|
0
|
|
|
0.3
|
|
|
0
|
|
||||||
Total reclassification adjustment for amounts realized in net income
|
132.4
|
|
|
(46.3
|
)
|
|
86.1
|
|
|
85.8
|
|
|
0.3
|
|
|
0
|
|
||||||
Total other comprehensive income (loss)
|
(0.6
|
)
|
|
0.2
|
|
|
(0.4
|
)
|
|
(0.1
|
)
|
|
(0.3
|
)
|
|
0
|
|
||||||
Balance at March 31, 2014
|
$
|
1,463.5
|
|
|
$
|
(512.2
|
)
|
|
$
|
951.3
|
|
|
$
|
946.9
|
|
|
$
|
3.8
|
|
|
$
|
0.6
|
|
•
|
We are continuing to roll out a new program in Snapshot
®
, our usage-based insurance product, which affords more customers discounts for their good driving behavior, while increasing rates at renewal for a small number of drivers based on their driving behavior. We are also offering a Snapshot enrollment discount that varies at the customer-segment level, such as a higher discount for more preferred drivers.
|
•
|
Our efforts to provide additional insurance products through our strategy of "bundling" our auto coverages with other coverages, such as home, renters, and umbrella insurance, continue to be an important part of our strategy. On April 1, 2015, we acquired a controlling interest in the parent company of American Strategic Insurance (ASI), our current homeowners insurance provider in the Agency channel. Through this acquisition, we hope to solidify our auto-homeowners insurance package offered through this channel. In the Direct channel, we continue to work with our current unaffiliated providers, as well as ASI, for these products.
|
•
|
We expanded our renters insurance product in the Agency channel, allowing agents the option to bundle renters and auto insurance, thereby increasing the propensity of our customers to stay with us.
|
•
|
common equities
|
•
|
nonredeemable preferred stocks
|
•
|
redeemable preferred stocks, except for 50% of investment-grade redeemable preferred stocks with cumulative dividends, which are included in Group II, and
|
•
|
all other non-investment-grade fixed-maturity securities.
|
•
|
short-term securities, and
|
•
|
all other fixed-maturity securities, including 50% of the investment-grade redeemable preferred stocks with cumulative dividends.
|
•
|
Repurchases of our outstanding debt securities.
From time to time, we may elect to repurchase our outstanding debt securities in the open market or in privately negotiated transactions, reducing our future interest expense, when management believes that such securities are attractively priced and capital is available for such a purpose. We did not repurchase any debt securities in the first quarter of 2015 or 2014. During the full year 2014, we repurchased, in the open market, $44.3 million in principal amount of our 6.70% Fixed-to-Floating Rate Junior Subordinated Debentures due 2067 (the "6.70% Debentures"). Since the amounts paid exceeded the carrying value of the debt we repurchased, we recognized losses on these extinguishments of $4.8 million.
|
•
|
Repurchases of our common shares.
In accordance with our financial policies, we continued our practice of repurchasing our common shares. As of
March 31, 2015
, we had 17.5 million shares remaining under our 2011 Board repurchase authorization. The following table shows our share repurchase activity during the respective periods:
|
|
|
Three Months Ended March 31,
|
||||||
(millions, except per share amounts)
|
|
2015
|
|
|
2014
|
|
||
Total number of shares purchased
|
|
2.5
|
|
|
3.9
|
|
||
Total cost
|
|
$
|
65.9
|
|
|
$
|
94.7
|
|
Average price paid per share
|
|
$
|
26.80
|
|
|
$
|
24.37
|
|
•
|
Dividends.
As part of our capital management activities, in February
2015
and
2014
, we paid annual variable dividends of $0.6862 per share and $0.4929 per share, respectively, which were each declared in December of the prior year. In addition to the annual variable dividend, the Board of Directors declared a $1.00 per common share special dividend in December 2013, which was paid in February 2014.
|
|
Three Months Ended March 31,
|
||||||||
($ in millions)
|
2015
|
|
|
2014
|
|
|
%
Change
|
||
NET PREMIUMS WRITTEN
|
|
|
|
|
|
||||
Personal Lines
|
|
|
|
|
|
||||
Agency
|
$
|
2,356.1
|
|
|
$
|
2,292.6
|
|
|
3
|
Direct
|
2,179.6
|
|
|
1,926.6
|
|
|
13
|
||
Total Personal Lines
|
4,535.7
|
|
|
4,219.2
|
|
|
8
|
||
Commercial Lines
|
531.1
|
|
|
461.8
|
|
|
15
|
||
Other indemnity
|
0
|
|
|
0
|
|
|
NM
|
||
Total underwriting operations
|
$
|
5,066.8
|
|
|
$
|
4,681.0
|
|
|
8
|
NET PREMIUMS EARNED
|
|
|
|
|
|
||||
Personal Lines
|
|
|
|
|
|
||||
Agency
|
$
|
2,244.5
|
|
|
$
|
2,203.2
|
|
|
2
|
Direct
|
1,955.4
|
|
|
1,762.2
|
|
|
11
|
||
Total Personal Lines
|
4,199.9
|
|
|
3,965.4
|
|
|
6
|
||
Commercial Lines
|
466.4
|
|
|
436.9
|
|
|
7
|
||
Other indemnity
|
0
|
|
|
0
|
|
|
NM
|
||
Total underwriting operations
|
$
|
4,666.3
|
|
|
$
|
4,402.3
|
|
|
6
|
NM = Not Meaningful
|
|
|
|
|
|
•
|
Obtain a quote for and buy an auto insurance policy on our mobile website in all states and the District of Columbia,
|
•
|
Obtain a quote for at least five drivers and four vehicles and, in most states, quote up to 12 drivers and 12 vehicles,
|
•
|
Use their phone's camera to photograph their driver license and/or current insurance card to provide easy data fill for quotes started from our mobile application in 36 states and the District of Columbia, and
|
•
|
Receive the comparison rate experience in most of the country.
|
•
|
Access their policy documents, make payments directly from their checking account, and view both their payment schedule and billing history,
|
•
|
Add endorsements and make account changes,
|
•
|
Receive text alerts for billing and severe weather,
|
•
|
View, store, and share their digital insurance ID card, which can be used as legal proof of insurance in most of the country, and
|
•
|
Report their claims and submit related photos using the application, as well as use their phone's GPS capabilities to specify the location of the claim.
|
|
Growth Over Prior Year
|
||
|
Quarter
|
||
|
2015
|
|
2014
|
WRITTEN PREMIUM PER POLICY
|
|
|
|
Personal Lines—auto
|
4%
|
|
2%
|
Commercial Lines
|
5%
|
|
4%
|
|
Growth Over Prior Year
|
||
|
2015
|
|
2014
|
RETENTION MEASURES
|
|
|
|
Personal Lines - auto
|
|
|
|
Policy life expectancy
|
|
|
|
Trailing 3-months
|
(7)%
|
|
10%
|
Trailing 12-months
|
(3)%
|
|
0%
|
Renewal ratio
|
(0.3)%
|
|
1.1%
|
Commercial Lines - policy life expectancy (trailing 12-months)
|
4%
|
|
(4)%
|
|
Three Months Ended March 31,
|
||||||||||||
|
2015
|
|
2014
|
||||||||||
|
Underwriting
Profit (Loss)
|
|
Underwriting
Profit (Loss)
|
||||||||||
($ in millions)
|
$
|
|
Margin
|
|
$
|
|
Margin
|
||||||
Personal Lines
|
|
|
|
|
|
|
|
||||||
Agency
|
$
|
194.5
|
|
|
8.7
|
%
|
|
$
|
178.6
|
|
|
8.1
|
%
|
Direct
|
68.2
|
|
|
3.5
|
|
|
71.0
|
|
|
4.0
|
|
||
Total Personal Lines
|
262.7
|
|
|
6.3
|
|
|
249.6
|
|
|
6.3
|
|
||
Commercial Lines
|
78.5
|
|
|
16.8
|
|
|
40.9
|
|
|
9.4
|
|
||
Other indemnity
1
|
0.4
|
|
|
NM
|
|
|
(0.7
|
)
|
|
NM
|
|
||
Total underwriting operations
|
$
|
341.6
|
|
|
7.3
|
%
|
|
$
|
289.8
|
|
|
6.6
|
%
|
|
Three Months Ended March 31,
|
|||||||
Underwriting Performance
1
|
2015
|
|
|
2014
|
|
|
Change
|
|
Personal Lines—Agency
|
|
|
|
|
|
|||
Loss & loss adjustment expense ratio
|
71.8
|
|
|
72.3
|
|
|
(0.5
|
) pts.
|
Underwriting expense ratio
|
19.5
|
|
|
19.6
|
|
|
(0.1
|
) pts.
|
Combined ratio
|
91.3
|
|
|
91.9
|
|
|
(0.6
|
) pts.
|
Personal Lines—Direct
|
|
|
|
|
|
|||
Loss & loss adjustment expense ratio
|
75.3
|
|
|
74.4
|
|
|
0.9
|
pts.
|
Underwriting expense ratio
|
21.2
|
|
|
21.6
|
|
|
(0.4
|
) pts.
|
Combined ratio
|
96.5
|
|
|
96.0
|
|
|
0.5
|
pts.
|
Total Personal Lines
|
|
|
|
|
|
|||
Loss & loss adjustment expense ratio
|
73.4
|
|
|
73.2
|
|
|
0.2
|
pts.
|
Underwriting expense ratio
|
20.3
|
|
|
20.5
|
|
|
(0.2
|
) pts.
|
Combined ratio
|
93.7
|
|
|
93.7
|
|
|
0.0
|
pts.
|
Commercial Lines
|
|
|
|
|
|
|||
Loss & loss adjustment expense ratio
|
61.0
|
|
|
69.3
|
|
|
(8.3
|
) pts.
|
Underwriting expense ratio
|
22.2
|
|
|
21.3
|
|
|
0.9
|
pts.
|
Combined ratio
|
83.2
|
|
|
90.6
|
|
|
(7.4
|
) pts.
|
Total Underwriting Operations
2
|
|
|
|
|
|
|||
Loss & loss adjustment expense ratio
|
72.2
|
|
|
72.8
|
|
|
(0.6
|
) pts.
|
Underwriting expense ratio
|
20.5
|
|
|
20.6
|
|
|
(0.1
|
) pts.
|
Combined ratio
|
92.7
|
|
|
93.4
|
|
|
(0.7
|
) pts.
|
Accident year loss & loss adjustment expense ratio
3
|
74.3
|
|
|
71.4
|
|
|
2.9
|
pts.
|
|
Three Months Ended March 31,
|
||||||
($ in millions)
|
2015
|
|
|
2014
|
|
||
Change in net loss and LAE reserves
|
$
|
123.7
|
|
|
$
|
81.8
|
|
Paid losses and LAE
|
3,244.9
|
|
|
3,124.1
|
|
||
Total incurred losses and LAE
|
$
|
3,368.6
|
|
|
$
|
3,205.9
|
|
•
|
Bodily injury decreased about 1%.
|
•
|
Property coverages increased with property damage and collision up about 5% to 6%.
|
•
|
Personal injury protection (PIP) increased about 1%.
|
•
|
Bodily injury, property damage, and PIP increased 1% to 2%.
|
•
|
Collision decreased around 2%, primarily due to higher levels of weather-related claims in the midwestern and northeastern states during the first quarter 2014.
|
|
Three Months Ended March 31,
|
||||||
($ in millions)
|
2015
|
|
2014
|
||||
Catastrophe losses incurred
|
$
|
9.4
|
|
|
$
|
9.2
|
|
Increase to combined ratio
|
0.2
|
pts.
|
|
0.2
|
pts.
|
|
Three Months Ended March 31,
|
||||||
(millions)
|
2015
|
|
2014
|
||||
ACTUARIAL ADJUSTMENTS
|
|
|
|
||||
Reserve decrease/(increase)
|
|
|
|
||||
Prior accident years
|
$
|
11.1
|
|
|
$
|
19.4
|
|
Current accident year
|
(0.7
|
)
|
|
(13.9
|
)
|
||
Calendar year actuarial adjustment
|
$
|
10.4
|
|
|
$
|
5.5
|
|
PRIOR ACCIDENT YEARS DEVELOPMENT
|
|
|
|
||||
Favorable/(Unfavorable)
|
|
|
|
||||
Actuarial adjustment
|
$
|
11.1
|
|
|
$
|
19.4
|
|
All other development
|
86.8
|
|
|
(82.3
|
)
|
||
Total development
|
$
|
97.9
|
|
|
$
|
(62.9
|
)
|
(Increase) decrease to calendar year combined ratio
|
2.1
|
pts.
|
|
(1.4
|
) pts.
|
•
|
Approximately 75% of the favorable prior year reserve development was attributable to accident year 2014.
|
•
|
The majority of our favorable reserve development was in our personal auto product. Our Direct and Agency auto businesses accounted for approximately 40% and 25%, respectively, of the favorable reserve development, with our Commercial Lines business making up the majority of the remainder.
|
•
|
In our personal auto and Commercial Lines businesses, we incurred favorable case loss reserve development primarily in bodily injury and uninsured motorist bodily injury coverages, due to lower than anticipated severity.
|
•
|
Approximately 90% of the unfavorable prior year reserve development was attributable to accident year 2013 and about 10% was related to accident years 2011 and prior. The aggregate reserve development for accident year 2012 was slightly favorable.
|
•
|
The majority of our unfavorable reserve development was in our personal auto product. Our Agency and Direct auto businesses accounted for approximately 50% and 35%, respectively, of the unfavorable reserve development, with our Commercial Lines business making up the majority of the remainder.
|
•
|
In our personal auto business, we incurred favorable case loss reserve development offset in large part by unfavorable IBNR loss development. In addition, we had unfavorable loss adjustment expense reserve development primarily effecting the 2013 accident year.
|
•
|
In our Commercial Lines business, we experienced unfavorable development in our case and IBNR reserves principally in our higher limit, specialty truck business.
|
|
Growth 2015 vs. 2014 First Quarter
|
Net premiums written
|
8%
|
Net premiums earned
|
6%
|
Policies in force
|
2%
|
|
Growth 2015 vs. 2014 First Quarter
|
Net premiums written
|
3%
|
Net premiums earned
|
2%
|
Auto: policies in force
|
(3)%
|
new applications
|
(4)%
|
renewal applications
|
(1)%
|
written premium per policy
|
4%
|
Auto: retention measures:
|
|
policy life expectancy - trailing 3-months
|
(8)%
|
trailing 12-months
|
(5)%
|
renewal ratio
|
(0.4)%
|
|
Growth 2015 vs. 2014 First Quarter
|
Net premiums written
|
13%
|
Net premiums earned
|
11%
|
Auto: policies in force
|
7%
|
new applications
|
13%
|
renewal applications
|
7%
|
written premium per policy
|
5%
|
Auto: retention measures:
|
|
policy life expectancy - trailing 3-months
|
(6)%
|
trailing 12-months
|
(1)%
|
renewal ratio
|
(0.2)%
|
|
Growth 2015 vs. 2014 First Quarter
|
Net premiums written
|
15%
|
Net premiums earned
|
7%
|
Policies in force
|
3%
|
New applications
|
19%
|
Renewal applications
|
2%
|
Written premium per policy
|
5%
|
Policy life expectancy - trailing 12-months
|
4%
|
•
|
Business auto
- autos, vans, and pick-up trucks used by small businesses, such as retailing, farming, services, and private trucking,
|
•
|
For-hire transportation
- tractors, trailers, and straight trucks primarily used by regional general freight and expeditor-type businesses and non-fleet long-haul operators,
|
•
|
Contractor
- vans, pick-up trucks, and dump trucks used by small businesses, such as artisans, heavy construction, and landscapers/snowplowers,
|
•
|
For-hire specialty
- dump trucks, log trucks, and garbage trucks used by dirt, sand and gravel, logging, and coal-type businesses,
|
•
|
Tow
- tow trucks and wreckers used in towing services and gas/service station businesses, and
|
•
|
For-hire livery
-
non-fleet (i.e., five or fewer vehicles) taxis, black-car services, and airport taxis
.
|
•
|
Commercial Auto Insurance Procedures/Plans (CAIP)
- We are the only servicing carrier on a nationwide basis for CAIP, which are state-supervised plans servicing the involuntary market. As a service provider, we provide policy issuance and claims adjusting services and collect fee revenue that is earned on a pro rata basis over the terms of the related policies.
|
•
|
Commission-Based Businesses
- We have two commission-based service businesses.
|
($ in millions)
|
Fair
Value
|
|
|
% of
Total
Portfolio
|
|
|
Duration
(years)
|
|
|
Rating
1
|
|
March 31, 2015
|
|
|
|
|
|
|
|
||||
Fixed maturities
|
$
|
14,219.8
|
|
|
71.7
|
%
|
|
2.0
|
|
|
A+
|
Nonredeemable preferred stocks
|
828.1
|
|
|
4.2
|
|
|
2.7
|
|
|
BB+
|
|
Short-term investments
|
2,267.0
|
|
|
11.4
|
|
|
<0.1
|
|
|
AA+
|
|
Total fixed-income securities
|
17,314.9
|
|
|
87.3
|
|
|
1.8
|
|
|
A+
|
|
Common equities
|
2,515.7
|
|
|
12.7
|
|
|
na
|
|
|
na
|
|
Total portfolio
2,3
|
$
|
19,830.6
|
|
|
100.0
|
%
|
|
1.8
|
|
|
A+
|
March 31, 2014
|
|
|
|
|
|
|
|
||||
Fixed maturities
|
$
|
12,506.2
|
|
|
71.9
|
%
|
|
2.0
|
|
|
AA-
|
Nonredeemable preferred stocks
|
737.9
|
|
|
4.2
|
|
|
2.4
|
|
|
BB+
|
|
Short-term investments
|
1,872.9
|
|
|
10.8
|
|
|
<0.1
|
|
|
AA+
|
|
Total fixed-income securities
|
15,117.0
|
|
|
86.9
|
|
|
1.7
|
|
|
AA-
|
|
Common equities
|
2,278.7
|
|
|
13.1
|
|
|
na
|
|
|
na
|
|
Total portfolio
2,3
|
$
|
17,395.7
|
|
|
100.0
|
%
|
|
1.7
|
|
|
AA-
|
December 31, 2014
|
|
|
|
|
|
|
|
||||
Fixed maturities
|
$
|
13,549.2
|
|
|
71.2
|
%
|
|
1.8
|
|
|
A+
|
Nonredeemable preferred stocks
|
827.5
|
|
|
4.4
|
|
|
2.8
|
|
|
BB+
|
|
Short-term investments
|
2,149.0
|
|
|
11.3
|
|
|
<0.1
|
|
|
AA
|
|
Total fixed-income securities
|
16,525.7
|
|
|
86.9
|
|
|
1.6
|
|
|
A+
|
|
Common equities
|
2,492.3
|
|
|
13.1
|
|
|
na
|
|
|
na
|
|
Total portfolio
2,3
|
$
|
19,018.0
|
|
|
100.0
|
%
|
|
1.6
|
|
|
A+
|
na = not applicable
|
|
|
|
|
|
|
|
($ in millions)
|
Fair
Value
|
|
|
% of
Total
Portfolio
|
|
|
March 31, 2015
|
|
|
|
|||
Group I securities:
|
|
|
|
|||
Non-investment-grade fixed maturities
|
$
|
790.6
|
|
|
4.0
|
%
|
Redeemable preferred stocks
1
|
177.2
|
|
|
0.9
|
|
|
Nonredeemable preferred stocks
|
828.1
|
|
|
4.2
|
|
|
Common equities
|
2,515.7
|
|
|
12.7
|
|
|
Total Group I securities
|
4,311.6
|
|
|
21.8
|
|
|
Group II securities:
|
|
|
|
|||
Other fixed maturities
2
|
13,252.0
|
|
|
66.8
|
|
|
Short-term investments
|
2,267.0
|
|
|
11.4
|
|
|
Total Group II securities
|
15,519.0
|
|
|
78.2
|
|
|
Total portfolio
|
$
|
19,830.6
|
|
|
100.0
|
%
|
March 31, 2014
|
|
|
|
|||
Group I securities:
|
|
|
|
|||
Non-investment-grade fixed maturities
|
$
|
563.9
|
|
|
3.2
|
%
|
Redeemable preferred stocks
1
|
184.3
|
|
|
1.1
|
|
|
Nonredeemable preferred stocks
|
737.9
|
|
|
4.2
|
|
|
Common equities
|
2,278.7
|
|
|
13.1
|
|
|
Total Group I securities
|
3,764.8
|
|
|
21.6
|
|
|
Group II securities:
|
|
|
|
|||
Other fixed maturities
2
|
11,758.0
|
|
|
67.6
|
|
|
Short-term investments
|
1,872.9
|
|
|
10.8
|
|
|
Total Group II securities
|
13,630.9
|
|
|
78.4
|
|
|
Total portfolio
|
$
|
17,395.7
|
|
|
100.0
|
%
|
December 31, 2014
|
|
|
|
|||
Group I securities:
|
|
|
|
|||
Non-investment-grade fixed maturities
|
$
|
842.2
|
|
|
4.4
|
%
|
Redeemable preferred stocks
1
|
178.6
|
|
|
0.9
|
|
|
Nonredeemable preferred stocks
|
827.5
|
|
|
4.4
|
|
|
Common equities
|
2,492.3
|
|
|
13.1
|
|
|
Total Group I securities
|
4,340.6
|
|
|
22.8
|
|
|
Group II securities:
|
|
|
|
|||
Other fixed maturities
2
|
12,528.4
|
|
|
65.9
|
|
|
Short-term investments
|
2,149.0
|
|
|
11.3
|
|
|
Total Group II securities
|
14,677.4
|
|
|
77.2
|
|
|
Total portfolio
|
$
|
19,018.0
|
|
|
100.0
|
%
|
|
Three Months Ended March 31,
|
||||||||||
(millions)
|
Total
Write-downs
|
|
|
Write-downs
on Securities
Sold
|
|
|
Write-downs
on Securities
Held at
Period End
|
|
|||
2015
|
|
|
|
|
|
||||||
Common equities
|
$
|
7.9
|
|
|
$
|
0
|
|
|
$
|
7.9
|
|
Total portfolio
|
$
|
7.9
|
|
|
$
|
0
|
|
|
$
|
7.9
|
|
2014
|
|
|
|
|
|
||||||
Common equities
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Total portfolio
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
|
Total Gross
Unrealized
Losses
|
|
|
Decline of Investment Value
|
||||||||||||||||
(millions)
|
Fair
Value
|
|
|
>15%
|
|
|
>25%
|
|
|
>35%
|
|
|
>45%
|
|
|||||||||
Fixed Income:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized loss for less than 12 months
|
$
|
2,162.7
|
|
|
$
|
10.2
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Unrealized loss for 12 months or greater
|
859.3
|
|
|
21.6
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
Total
|
$
|
3,022.0
|
|
|
$
|
31.8
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Common Equity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized loss for less than 12 months
|
$
|
58.3
|
|
|
$
|
6.0
|
|
|
$
|
3.3
|
|
|
$
|
0.1
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Unrealized loss for 12 months or greater
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
Total
|
$
|
58.3
|
|
|
$
|
6.0
|
|
|
$
|
3.3
|
|
|
$
|
0.1
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
March 31, 2015
|
|
March 31, 2014
|
|
December 31, 2014
|
|||||||||||||||
($ in millions)
|
Fair
Value
|
|
|
% of
Total
|
|
|
Fair
Value
|
|
|
% of
Total
|
|
|
Fair
Value
|
|
|
% of
Total
|
|
|||
Investment-grade fixed maturities:
1
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Short/intermediate term
|
$
|
14,817.3
|
|
|
89.9
|
%
|
|
$
|
13,103.7
|
|
|
91.1
|
%
|
|
$
|
14,006.7
|
|
|
89.2
|
%
|
Long term
|
52.1
|
|
|
0.3
|
|
|
35.7
|
|
|
0.3
|
|
|
43.9
|
|
|
0.3
|
|
|||
Non-investment-grade fixed maturities:
1,2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Short/intermediate term
|
1,590.4
|
|
|
9.6
|
|
|
1,210.2
|
|
|
8.4
|
|
|
1,625.6
|
|
|
10.4
|
|
|||
Long term
|
27.0
|
|
|
0.2
|
|
|
29.5
|
|
|
0.2
|
|
|
22.0
|
|
|
0.1
|
|
|||
Total
|
$
|
16,486.8
|
|
|
100.0
|
%
|
|
$
|
14,379.1
|
|
|
100.0
|
%
|
|
$
|
15,698.2
|
|
|
100.0
|
%
|
Duration Distribution
|
March 31, 2015
|
|
|
March 31, 2014
|
|
|
December 31, 2014
|
|
1 year
|
36.1
|
%
|
|
22.5
|
%
|
|
36.1
|
%
|
2 years
|
16.8
|
|
|
28.6
|
|
|
19.4
|
|
3 years
|
14.6
|
|
|
22.7
|
|
|
15.0
|
|
5 years
|
25.5
|
|
|
21.3
|
|
|
23.8
|
|
10 years
|
7.0
|
|
|
4.9
|
|
|
5.7
|
|
Total fixed-income portfolio
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Rating
|
March 31, 2015
|
|
|
March 31, 2014
|
|
|
December 31, 2014
|
|
AAA
|
46.6
|
%
|
|
49.1
|
%
|
|
45.5
|
%
|
AA
|
12.8
|
|
|
13.9
|
|
|
13.2
|
|
A
|
10.5
|
|
|
8.6
|
|
|
10.2
|
|
BBB
|
18.1
|
|
|
17.5
|
|
|
18.4
|
|
Non-investment grade/non-rated
1
|
12.0
|
|
|
10.9
|
|
|
12.7
|
|
Total fixed-income portfolio
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
($ in millions)
|
Fair
Value
|
|
|
Duration
(years)
|
|
|
U.S. Treasury Notes
|
|
|
|
|||
Less than two years
|
$
|
2,137.3
|
|
|
1.1
|
|
Two to five years
|
313.7
|
|
|
4.2
|
|
|
Five to ten years
|
257.1
|
|
|
7.5
|
|
|
Total U.S. Treasury Notes
|
2,708.1
|
|
|
2.0
|
|
|
Interest Rate Swaps
|
|
|
|
|||
Five to ten years ($750 notional value)
|
0.1
|
|
|
(8.1
|
)
|
|
Total U.S. government obligations
|
$
|
2,708.2
|
|
|
(0.2
|
)
|
($ in millions)
|
Fair
Value
|
|
|
Net Unrealized
Gains (Losses)
|
|
|
% of Asset-
Backed
Securities
|
|
|
Duration
(years)
|
|
|
Rating
(at period end)
|
||
March 31, 2015
|
|
|
|
|
|
|
|
|
|
||||||
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||
Prime collateralized mortgage obligations
|
$
|
488.3
|
|
|
$
|
0.1
|
|
|
8.1
|
%
|
|
0.8
|
|
|
A-
|
Alt-A collateralized mortgage obligations
|
214.3
|
|
|
2.0
|
|
|
3.5
|
|
|
0.9
|
|
|
BBB
|
||
Collateralized mortgage obligations
|
702.6
|
|
|
2.1
|
|
|
11.6
|
|
|
0.8
|
|
|
A-
|
||
Home equity (sub-prime bonds)
|
945.6
|
|
|
17.2
|
|
|
15.7
|
|
|
<0.1
|
|
|
BB+
|
||
Residential mortgage-backed securities
|
1,648.2
|
|
|
19.3
|
|
|
27.3
|
|
|
0.3
|
|
|
BBB
|
||
Commercial mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||
Commercial mortgage-backed securities
|
2,301.3
|
|
|
41.1
|
|
|
38.1
|
|
|
3.1
|
|
|
AA-
|
||
Commercial mortgage-backed securities: interest only
|
185.8
|
|
|
7.9
|
|
|
3.1
|
|
|
2.8
|
|
|
AAA-
|
||
Commercial mortgage-backed securities
|
2,487.1
|
|
|
49.0
|
|
|
41.2
|
|
|
3.1
|
|
|
AA-
|
||
Other asset-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||
Automobile
|
930.1
|
|
|
1.6
|
|
|
15.4
|
|
|
1.1
|
|
|
AAA-
|
||
Credit card
|
322.5
|
|
|
0.4
|
|
|
5.3
|
|
|
0.5
|
|
|
AAA
|
||
Other
1
|
648.9
|
|
|
2.6
|
|
|
10.8
|
|
|
1.0
|
|
|
AA+
|
||
Other asset-backed securities
|
1,901.5
|
|
|
4.6
|
|
|
31.5
|
|
|
1.0
|
|
|
AAA-
|
||
Total asset-backed securities
|
$
|
6,036.8
|
|
|
$
|
72.9
|
|
|
100.0
|
%
|
|
1.7
|
|
|
AA-
|
($ in millions)
|
Fair
Value
|
|
|
Net Unrealized
Gains (Losses)
|
|
|
% of Asset-
Backed
Securities
|
|
|
Duration
(years)
|
|
|
Rating
(at period end)
|
||
March 31, 2014
|
|
|
|
|
|
|
|
|
|
||||||
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||
Prime collateralized mortgage obligations
|
$
|
375.0
|
|
|
$
|
5.7
|
|
|
8.7
|
%
|
|
0.7
|
|
|
A-
|
Alt-A collateralized mortgage obligations
|
191.9
|
|
|
3.4
|
|
|
4.5
|
|
|
1.1
|
|
|
BBB+
|
||
Collateralized mortgage obligations
|
566.9
|
|
|
9.1
|
|
|
13.2
|
|
|
0.8
|
|
|
BBB+
|
||
Home equity (sub-prime bonds)
|
740.5
|
|
|
11.6
|
|
|
17.2
|
|
|
<0.1
|
|
|
BBB-
|
||
Residential mortgage-backed securities
|
1,307.4
|
|
|
20.7
|
|
|
30.4
|
|
|
0.2
|
|
|
BBB
|
||
Commercial mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||
Commercial mortgage-backed securities
|
1,910.3
|
|
|
17.3
|
|
|
44.3
|
|
|
3.1
|
|
|
AA
|
||
Commercial mortgage-backed securities: interest only
|
151.3
|
|
|
6.6
|
|
|
3.5
|
|
|
2.7
|
|
|
AAA-
|
||
Commercial mortgage-backed securities
|
2,061.6
|
|
|
23.9
|
|
|
47.8
|
|
|
3.0
|
|
|
AA
|
||
Other asset-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||
Automobile
|
407.2
|
|
|
2.7
|
|
|
9.4
|
|
|
1.2
|
|
|
AAA
|
||
Credit card
|
59.5
|
|
|
1.5
|
|
|
1.4
|
|
|
1.5
|
|
|
AAA
|
||
Other
1
|
475.8
|
|
|
1.8
|
|
|
11.0
|
|
|
1.2
|
|
|
AA+
|
||
Other asset-backed securities
|
942.5
|
|
|
6.0
|
|
|
21.8
|
|
|
1.2
|
|
|
AAA-
|
||
Total asset-backed securities
|
$
|
4,311.5
|
|
|
$
|
50.6
|
|
|
100.0
|
%
|
|
1.8
|
|
|
AA-
|
($ in millions)
|
Fair
Value
|
|
|
Net Unrealized
Gains (Losses)
|
|
|
% of Asset-
Backed
Securities
|
|
|
Duration
(years)
|
|
|
Rating
(at period end)
|
||
December 31, 2014
|
|
|
|
|
|
|
|
|
|
||||||
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||
Prime collateralized mortgage obligations
|
$
|
499.8
|
|
|
$
|
1.3
|
|
|
8.9
|
%
|
|
0.8
|
|
|
A-
|
Alt-A collateralized mortgage obligations
|
224.1
|
|
|
2.4
|
|
|
4.0
|
|
|
1.0
|
|
|
BBB
|
||
Collateralized mortgage obligations
|
723.9
|
|
|
3.7
|
|
|
12.9
|
|
|
0.9
|
|
|
BBB+
|
||
Home equity (sub-prime bonds)
|
934.6
|
|
|
20.0
|
|
|
16.7
|
|
|
<0.1
|
|
|
BBB-
|
||
Residential mortgage-backed securities
|
1,658.5
|
|
|
23.7
|
|
|
29.6
|
|
|
0.3
|
|
|
BBB
|
||
Commercial mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||
Commercial mortgage-backed securities
|
2,139.6
|
|
|
30.3
|
|
|
38.1
|
|
|
3.2
|
|
|
AA-
|
||
Commercial mortgage-backed securities: interest only
|
176.0
|
|
|
6.4
|
|
|
3.1
|
|
|
2.8
|
|
|
AAA-
|
||
Commercial mortgage-backed securities
|
2,315.6
|
|
|
36.7
|
|
|
41.2
|
|
|
3.2
|
|
|
AA-
|
||
Other asset-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||
Automobile
|
815.7
|
|
|
0.6
|
|
|
14.5
|
|
|
0.9
|
|
|
AAA
|
||
Credit card
|
284.2
|
|
|
0.5
|
|
|
5.1
|
|
|
0.8
|
|
|
AAA
|
||
Other
1
|
538.8
|
|
|
1.9
|
|
|
9.6
|
|
|
1.1
|
|
|
AAA-
|
||
Other asset-backed securities
|
1,638.7
|
|
|
3.0
|
|
|
29.2
|
|
|
0.9
|
|
|
AAA-
|
||
Total asset-backed securities
|
$
|
5,612.8
|
|
|
$
|
63.4
|
|
|
100.0
|
%
|
|
1.7
|
|
|
AA-
|
Collateralized Mortgage Obligations (at March 31, 2015)
|
||||||||||||||||||
($ in millions)
Rating 1 |
Non-Agency Prime
|
|
Alt-A
|
|
Government/GSE
2
|
|
|
Total
|
|
% of Total
|
|
|||||||
AAA
|
$
|
61.8
|
|
|
$
|
0
|
|
|
$
|
5.8
|
|
|
$
|
67.6
|
|
|
9.6
|
%
|
AA
|
37.7
|
|
|
26.8
|
|
|
1.5
|
|
|
66.0
|
|
|
9.4
|
|
||||
A
|
232.2
|
|
|
94.7
|
|
|
0
|
|
|
326.9
|
|
|
46.5
|
|
||||
BBB
|
66.9
|
|
|
36.6
|
|
|
0
|
|
|
103.5
|
|
|
14.8
|
|
||||
Non-investment grade
|
82.4
|
|
|
56.2
|
|
|
0
|
|
|
138.6
|
|
|
19.7
|
|
||||
Total
|
$
|
481.0
|
|
|
$
|
214.3
|
|
|
$
|
7.3
|
|
|
$
|
702.6
|
|
|
100.0
|
%
|
Increase (decrease) in value
|
(0.2
|
)%
|
|
0.9
|
%
|
|
8.1
|
%
|
|
0.2
|
%
|
|
|
Commercial Mortgage-Backed Securities (at March 31, 2015)
1
|
||||||||||||||||||||||||||
($ in millions)
Category
|
AAA
|
|
AA
|
|
A
|
|
BBB
|
|
Non-Investment
Grade
|
|
|
Total
|
|
% of Total
|
|
|||||||||||
Multi-borrower
|
$
|
399.3
|
|
|
$
|
49.4
|
|
|
$
|
0
|
|
|
$
|
11.1
|
|
|
$
|
11.3
|
|
|
$
|
471.1
|
|
|
18.9
|
%
|
Single-borrower
|
696.4
|
|
|
306.2
|
|
|
346.3
|
|
|
457.5
|
|
|
23.8
|
|
|
1,830.2
|
|
|
73.6
|
|
||||||
Total CMBS bonds
|
1,095.7
|
|
|
355.6
|
|
|
346.3
|
|
|
468.6
|
|
|
35.1
|
|
|
2,301.3
|
|
|
92.5
|
|
||||||
IO
|
181.8
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
4.0
|
|
|
185.8
|
|
|
7.5
|
|
||||||
Total fair value
|
$
|
1,277.5
|
|
|
$
|
355.6
|
|
|
$
|
346.3
|
|
|
$
|
468.6
|
|
|
$
|
39.1
|
|
|
$
|
2,487.1
|
|
|
100.0
|
%
|
% of Total fair value
|
51.4
|
%
|
|
14.3
|
%
|
|
13.9
|
%
|
|
18.8
|
%
|
|
1.6
|
%
|
|
100.0
|
%
|
|
|
Corporate Securities (at March 31, 2015)
|
|||||||||||||||||||||||
(millions)
Sector
|
AAA
|
|
|
AA
|
|
|
A
|
|
|
BBB
|
|
|
Non-Investment
Grade/Non-Rated
|
|
|
Total
|
|
||||||
Consumer
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
121.2
|
|
|
$
|
590.2
|
|
|
$
|
338.9
|
|
|
$
|
1,050.3
|
|
Industrial
|
0
|
|
|
0
|
|
|
36.9
|
|
|
470.8
|
|
|
216.6
|
|
|
724.3
|
|
||||||
Communications
|
0
|
|
|
0
|
|
|
76.6
|
|
|
194.3
|
|
|
61.1
|
|
|
332.0
|
|
||||||
Financial Services
|
50.9
|
|
|
20.2
|
|
|
113.7
|
|
|
345.8
|
|
|
170.0
|
|
|
700.6
|
|
||||||
Technology
|
0
|
|
|
9.9
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
9.9
|
|
||||||
Basic Materials
|
0
|
|
|
0
|
|
|
0
|
|
|
56.4
|
|
|
0
|
|
|
56.4
|
|
||||||
Energy
|
0
|
|
|
0
|
|
|
30.5
|
|
|
0
|
|
|
0
|
|
|
30.5
|
|
||||||
Total
|
$
|
50.9
|
|
|
$
|
30.1
|
|
|
$
|
378.9
|
|
|
$
|
1,657.5
|
|
|
$
|
786.6
|
|
|
$
|
2,904.0
|
|
($ in millions)
|
March 31, 2015
|
|
March 31, 2014
|
|
December 31, 2014
|
|||||||||||||||
Indexed common stocks
|
$
|
2,229.9
|
|
|
88.6
|
%
|
|
$
|
1,974.8
|
|
|
86.6
|
%
|
|
$
|
2,192.1
|
|
|
87.9
|
%
|
Managed common stocks
|
285.5
|
|
|
11.3
|
|
|
303.5
|
|
|
13.3
|
|
|
299.8
|
|
|
12.0
|
|
|||
Total common stocks
|
2,515.4
|
|
|
99.9
|
|
|
2,278.3
|
|
|
99.9
|
|
|
2,491.9
|
|
|
99.9
|
|
|||
Other risk investments
|
0.3
|
|
|
0.1
|
|
|
0.4
|
|
|
0.1
|
|
|
0.4
|
|
|
0.1
|
|
|||
Total common equities
|
$
|
2,515.7
|
|
|
100.0
|
%
|
|
$
|
2,278.7
|
|
|
100.0
|
%
|
|
$
|
2,492.3
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Realized Gains (Losses)
|
||||||||||
|
|
|
|
|
|
|
|
Notional Value
|
|
Three Months Ended March 31,
|
||||||||||||
(millions)
|
|
Date
|
|
|
|
March 31,
|
|
|||||||||||||||
Term
|
|
Effective
|
|
Maturity
|
|
Coupon
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
||||
10-year
|
|
04/2013
|
|
04/2023
|
|
Receive variable
|
|
$
|
150
|
|
|
$
|
150
|
|
|
$
|
(3.8
|
)
|
|
$
|
(3.9
|
)
|
10-year
|
|
04/2013
|
|
04/2023
|
|
Receive variable
|
|
185
|
|
|
185
|
|
|
(4.6
|
)
|
|
(4.7
|
)
|
||||
10-year
|
|
04/2013
|
|
04/2023
|
|
Receive variable
|
|
415
|
|
|
415
|
|
|
(10.4
|
)
|
|
(10.7
|
)
|
||||
Total interest rate swaps
|
|
|
|
$
|
750
|
|
|
$
|
750
|
|
|
$
|
(18.8
|
)
|
|
$
|
(19.3
|
)
|
|
Three Months
|
||||
|
2015
|
|
|
2014
|
|
Pretax recurring investment book yield (annualized)
|
2.4
|
%
|
|
2.5
|
%
|
Weighted average FTE book yield (annualized)
|
2.6
|
%
|
|
2.8
|
%
|
FTE total return:
|
|
|
|
||
Fixed-income securities
|
1.0
|
%
|
|
1.3
|
%
|
Common stocks
|
1.7
|
%
|
|
2.1
|
%
|
Total portfolio
|
1.1
|
%
|
|
1.4
|
%
|
|
Three Months
|
||||
|
2015
|
|
|
2014
|
|
Fixed-income securities:
|
|
|
|
||
U.S. Treasury Notes
|
(0.1
|
)%
|
|
(0.1
|
)%
|
Municipal bonds
|
1.2
|
%
|
|
1.9
|
%
|
Corporate bonds
|
2.1
|
%
|
|
1.5
|
%
|
Commercial mortgage-backed securities
|
1.7
|
%
|
|
1.8
|
%
|
Collateralized mortgage obligations
|
0.6
|
%
|
|
1.2
|
%
|
Asset-backed securities
|
0.4
|
%
|
|
0.8
|
%
|
Preferred stocks
|
2.2
|
%
|
|
6.0
|
%
|
Common stock portfolios:
|
|
|
|
||
Indexed
|
1.9
|
%
|
|
2.2
|
%
|
Actively managed
|
0.5
|
%
|
|
1.9
|
%
|
ISSUER PURCHASES OF EQUITY SECURITIES
|
||||||||||||
2015
Calendar
Month
|
Total
Number of
Shares
Purchased
|
|
|
Average
Price
Paid
Per Share
|
|
|
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs
|
|
|
Maximum Number of
Shares That May Yet be
Purchased Under the
Plans or Programs
|
|
|
January
|
675,212
|
|
|
$
|
27.01
|
|
|
55,677,184
|
|
|
19,322,816
|
|
February
|
928,290
|
|
|
26.59
|
|
|
56,605,474
|
|
|
18,394,526
|
|
|
March
|
855,951
|
|
|
26.86
|
|
|
57,461,425
|
|
|
17,538,575
|
|
|
Total
|
2,459,453
|
|
|
$
|
26.80
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Time-Based Award
|
|
Performance-Based Award
3
|
||||||
Name and Principal Position
1
|
Units
|
Value
2
|
|
Units
|
Value
2
|
||||
Glenn M. Renwick
|
—
|
|
$
|
—
|
|
|
272,431
4
|
7,500,025
|
|
Chairman, President, and Chief Executive Officer
|
|
|
|
|
|
||||
Brian C. Domeck
|
—
|
|
—
|
|
|
18,163
|
500,027
|
|
|
Vice President and Chief Financial Officer
|
|
|
|
|
|
||||
Susan Patricia Griffith
|
18,891
|
|
520,069
|
|
|
37,777
|
1,040,001
|
|
|
President Customer Operations
|
|
|
|
|
|
||||
John P. Sauerland
|
18,891
|
|
520,069
|
|
|
37,777
4
|
1,040,001
|
|
|
Personal Lines Group President
|
|
|
|
|
|
||||
Charles E. Jarrett
|
17,436
|
|
480,013
|
|
|
20,923
|
576,010
|
|
|
Vice President, Secretary, and Chief Legal Officer
|
|
|
|
|
|
|
|
|
THE PROGRESSIVE CORPORATION
|
|
|
|
(Registrant)
|
|
|
|
|
Date: May 11, 2015
|
|
|
By: /s/ Glenn M. Renwick
|
|
|
|
Glenn M. Renwick
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
|
By: /s/ John P. Sauerland
|
|
|
|
John P. Sauerland
|
|
|
|
Chief Financial Officer
|
Exhibit No.
Under
Reg. S-K,
Item 601
|
|
Form 10-Q
Exhibit
Number
|
|
Description of Exhibit
|
|
If Incorporated by Reference,
Documents with Which Exhibit was
Previously Filed with SEC
|
4
|
|
4.1
|
|
Form of Confirmation Letter - Discretionary Line of Credit
|
|
Filed herewith
|
|
|
|
|
|
|
|
4
|
|
4.2
|
|
Form of Discretionary Line of Credit Note
|
|
Filed herewith
|
|
|
|
|
|
|
|
10(iii)
|
|
10.1
|
|
Form of Restricted Stock Unit Award Agreement for Time-Based Awards under the Progressive Corporation 2010 Equity Incentive Plan
|
|
Filed herewith
|
|
|
|
|
|
|
|
10(iii)
|
|
10.2
|
|
Form of Restricted Stock Unit Award Agreement for Performance-Based Awards (Insurance Performance) under The Progressive Corporation 2010 Equity Incentive Plan
|
|
Filed herewith
|
|
|
|
|
|
|
|
10(iii)
|
|
10.3
|
|
Form of Restricted Stock Unit Award Agreement for Performance-Based Awards (Investment Performance) under The Progressive Corporation 2010 Equity Incentive Plan
|
|
Filed herewith
|
|
|
|
|
|
|
|
10(iii)
|
|
10.4
|
|
The Progressive Corporation 2015 Equity Incentive Plan
|
|
Current Report on Form 8-K (filed on February 4, 2015; Exhibit 10.1 therein)
|
|
|
|
|
|
|
|
10(iii)
|
|
10.5
|
|
Ninth Amendment to The Progressive Corporation Executive Deferred Compensation Trust
|
|
Filed herewith
|
|
|
|
|
|
|
|
10(iii)
|
|
10.6
|
|
Tenth Amendment to The Progressive Corporation Executive Deferred Compensation Trust
|
|
Filed herewith
|
|
|
|
|
|
|
|
10(iii)
|
|
10.7
|
|
Form of Progressive Capital Management Bonus Plan
|
|
Filed herewith
|
|
|
|
|
|
|
|
31
|
|
31.1
|
|
Rule 13a-14(a)/15d-14(a) Certification of the Principal Executive Officer, Glenn M. Renwick
|
|
Filed herewith
|
|
|
|
|
|
|
|
31
|
|
31.2
|
|
Rule 13a-14(a)/15d-14(a) Certification of the Principal Financial Officer, John P. Sauerland
|
|
Filed herewith
|
|
|
|
|
|
|
|
32
|
|
32.1
|
|
Section 1350 Certification of the Principal Executive Officer, Glenn M. Renwick
|
|
Furnished herewith
|
|
|
|
|
|
|
|
32
|
|
32.2
|
|
Section 1350 Certification of the Principal Financial Officer, John P. Sauerland
|
|
Furnished herewith
|
|
|
|
|
|
|
|
99
|
|
99
|
|
Letter to Shareholders from Glenn M. Renwick, President and Chief Executive Officer (Regulation FD Disclosure)
|
|
Furnished herewith
|
|
|
|
|
|
|
|
101
|
|
101.INS
|
|
XBRL Instance Document
|
|
Filed herewith
|
|
|
|
|
|
|
|
101
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
Filed herewith
|
|
|
|
|
|
|
|
Exhibit No.
Under
Reg. S-K,
Item 601
|
|
Form 10-Q
Exhibit
Number
|
|
Description of Exhibit
|
|
If Incorporated by Reference,
Documents with Which Exhibit was
Previously Filed with SEC
|
101
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
Filed herewith
|
|
|
|
|
|
|
|
101
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
Filed herewith
|
|
|
|
|
|
|
|
101
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
Filed herewith
|
|
|
|
|
|
|
|
101
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
Filed herewith
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Re:
|
$100,000,000 Discretionary Line of Credit
|
(a)
|
Subject to the terms and conditions of the Plan and this Agreement, Participant’s rights in and to the Units shall vest, if at all, according to the following schedule:
|
(b)
|
Notwithstanding Paragraph 4(a) above, but subject to Paragraph 4(c) below:
|
i.
|
If Participant’s Qualified Retirement Eligibility Date occurred prior to the Grant Date specified above, then fifty percent (50%) of each Award Installment shall vest on the Specified Date (defined below) and the remaining fifty percent (50%) of each Award Installment shall remain unvested and subject to the terms of this Agreement;
|
ii.
|
If Participant’s Qualified Retirement Eligibility Date occurs after the Grant Date but prior to the Specified Date:
|
A.
|
If Participant’s employment terminates in a Qualified Retirement prior to the Specified Date, the provisions of Section 10 of the Plan will continue to govern the Award; and
|
B.
|
If Participant’s employment does not terminate in a Qualified Retirement prior to the Specified Date, then fifty percent (50%) of each Award Installment shall vest on the Specified Date and the remaining fifty percent (50%) of each Award Installment shall remain unvested and subject to the terms of this Agreement; and
|
iii.
|
If Participant’s Qualified Retirement Eligibility Date occurs on or after the Specified Date but prior to any vesting date specified in Paragraph 4(a) above, then fifty percent (50%) of each unvested Award Installment shall vest on the Participant’s Qualified Retirement Eligibility Date and the remaining fifty percent (50%) of each unvested Award Installment shall remain unvested and subject to the terms of this Agreement.
|
iv.
|
For purposes of this Paragraph 4(b), Specified Date shall mean: May 1, 20__ if the Grant Date is in March 20__; August 1, 20__ if the Grant Date is in July 20__; November 1, 20__ if the Grant Date is in October 20__; and February 1, 20__ if the Grant Date is in January 20__; provided, however, in each case, that if no such sale of Stock occurs on the New York Stock Exchange (the “NYSE”) on such date, then the next succeeding day on which the Stock is traded on the NYSE shall be the Specified Date.
|
(c)
|
Notwithstanding Paragraphs 4(a) and 4(b) above, if the Committee determines that on or before the Specified Date or any subsequent vesting date described in Paragraph 4(a) or 4(b) above, the Participant engaged or was engaging in any Disqualifying Activity, then:
|
i.
|
To the extent that the Award has not yet vested pursuant to Paragraph 4(b) prior to the Committee’s determination, the Award shall terminate immediately and all related Units shall be forfeited automatically at that time; and
|
ii.
|
To the extent that the Award has vested pursuant to Paragraph 4(b) prior to the Committee’s determination, the Award shall be deemed to have automatically terminated and forfeited as of the Disqualification Date. Accordingly, promptly upon the Company’s demand, the Participant shall transfer or pay to the Company all shares of Stock (or, if such Stock has been sold or otherwise transferred by the Participant, an equivalent number of shares of Stock or, at the Company’s election, the value thereof as of the applicable vesting date) or other proceeds received or deferred by the Participant in connection with such vesting pursuant to Paragraph 4(b), and the Participant will be entitled to no consideration in connection therewith. If such shares of Stock or other proceeds are not transferred or paid to the Company promptly upon such demand, then the Company will have the right to recover from the Participant all such shares or other proceeds, plus the costs and expenses incurred by the Company in recovering such shares or other proceeds from the Participant and enforcing its rights hereunder, including, without limitation, reasonable attorneys’ fees and court costs, plus interest at the rate of eight percent (8%) per annum or, if lower, the highest rate permitted by law, calculated from the applicable vesting date.
|
Performance vs. Market
|
Determination of the Number of Units Vesting
|
If the Company Growth Rate exceeds the Market Growth Rate by 3.5 percentage points or more
|
Initial Award Value x 2.50 (i.e., the Maximum Award Value)
|
If the Company Growth Rate exceeds the Market Growth Rate by more than 2 but less than 3.5 percentage points
|
Initial Award Value x (1.00 + (Company Growth Rate – Market Growth Rate – 2.00))
Example
:
Company Growth Rate = 2.50%; Market Growth Rate = 0.10%; Number of Units vesting will equal Initial Award Value x (1.00 + (2.50 - 0.10 - 2.00)) = Initial Award Value x 1.40
|
If the Company Growth Rate exceeds the Market Growth Rate by exactly 2 percentage points
|
Initial Award Value
|
If the Company Growth Rate exceeds the Market Growth Rate by less than 2 percentage points
|
Initial Award Value x ((Company Growth Rate – Market Growth Rate) / 2.00)
Example
:
Company Growth Rate = 2.50%; Market Growth Rate = 1.10%; Number of Units vesting will equal Initial Award Value x ((2.50 – 1.10) / 2.00) = Initial Award Value x 0.70
|
a.
|
if the termination is a result of Participant’s death before his or her Qualified Eligibility Retirement Date, the provisions of Section 6(b)(v) of the Plan will continue to apply to the Award;
|
b.
|
if Participant has not satisfied the requirements for a Qualified Retirement at the time of termination, Participant shall be eligible to participate in the vesting of Restricted Stock Units under this Agreement only to the extent certified by the Committee at the time of such first opportunity to certify results, but if certification does not occur upon such first opportunity to certify results, the Award shall be forfeited automatically; or
|
c.
|
if Participant has satisfied the requirements for a Qualified Retirement at the time of termination (including a termination resulting from death on or after the Participant’s Qualified Eligibility Retirement Date), Participant shall be eligible to participate in the vesting of Restricted Stock Units under this Agreement only to the extent certified by the Committee at the time of such first opportunity to certify results, but if certification does not occur upon such first opportunity to certify results, then pursuant to Section 10 of the Plan, fifty percent (50%) of such Award shall remain in effect and fifty percent (50%) of the Award shall be forfeited (or in certain cases, if the applicable requirements are satisfied, all of such Award shall remain in effect), and the portion that remains in effect shall thereafter vest, if at all, in accordance with this Agreement, but subject at all times to Section 10 of the Plan;
|
Score = 0.00
Rank at or below
|
Score = 1.00
Rank equal to
|
Score = 2.00
Rank at or above
|
25
th
Percentile
|
50
th
Percentile
|
75
th
Percentile
|
1.
|
The firm has provided monthly data regarding its holdings and investment return, as necessary to determine or calculate such firm’s monthly total return, and to evaluate such firm’s compliance with each of the criteria set forth below, for the entire Evaluation Period; and
|
2.
|
At all times during the Evaluation Period, the information provided by the firm shows, or Rogers Casey is able to calculate, that such firm’s investment portfolio satisfies each of the following criteria:
|
3.
|
The Company will have no discretion to alter the Investment Benchmark list after it is finalized by Rogers Casey.
|
Firm
|
Performance score
|
Total return
|
Firm above PCM
|
.90
|
13.61
|
PCM
|
|
13.39
|
Firm below PCM
|
.89
|
13.34
|
(1)
|
Effective January 16, 2015, deleting the third sentence of
Section 5(c),
Investment Directions
, and inserting in lieu thereof the following:
|
(2)
|
Effective January 16, 2015, restating
Section 5(e),
Company Stock
, in its entirety as follows:
|
(i)
|
Acquisition Limit
.
|
(ii)
|
Duty
.
|
(iii)
|
Purchases and Sales of Company Stock for Batch Activity
.
|
(1)
|
If the Trustee is unable to purchase or sell the total
|
(2)
|
If the Trustee is prohibited by the SEC, the NYSE or
|
(iv)
|
Purchases and Sales of Company Stock for Participant-Initiated
|
(v)
|
Use of an Affiliated Broker
.
|
(2)
|
The Trustee and FBSLLC shall continue to rely on this
|
(vi)
|
Securities Law Reports
.
|
(vii)
|
Voting and Tender Offers
.
|
(viii)
|
General.
|
(ix)
|
Conversion.
|
(3)
|
Effective at Market Close on January 16, 2015, amending the “investment options” section of Schedule “A” to add the following:
|
(4)
|
Effective at Market Close on January 16, 2015, amending the “investment options” section of Schedule “A” to delete the following:
|
(5)
|
Effective January 16, 2015, removing Schedule “E”,
Exchange Guidelines
, in its entirety.
|
THE PROGRESSIVE CORPORATION
|
FIDELITY MANAGEMENT TRUST
|
(1)
|
Effective January 1, 2015, restating Section 9,
Compensation and Expenses of Trustee
, as follows:
|
(2)
|
Effective January 1, 2015, adding a new section, Section 16,
Use of Omnibus Accounts
, as follows:
|
•
|
If contributions and instructions to purchase investment options are received by the Trustee In Good Order before the close of trading, the Trustee executes transactions in the investment options as of that day’s closing price (the “transaction date” or “T”). Contributions are held in the omnibus account until the following business day (“T+1”) for the vast majority of investment options. For share accounted company stock transactions, contributions may be held in the omnibus account until T+3.
|
•
|
Instructions to exchange investment options received by the Trustee In Good Order before the close of trading are processed in that day's nightly cycle. For the vast majority of investment options, exchanges generate no overnight balances, as money is received from one investment option and conveyed to another investment option on the same business day. The limited exceptions to this would occur if investment options have different settlement rules and Fidelity Management Trust Company serves as trustee of the Plan, in which case balances attributable to the exchange may remain in an omnibus account for a few days.
|
•
|
Instructions to make disbursements received In Good Order before the close of trading are processed in that day's nightly cycle and reflected as debits from the Trust as of that date ("T"). Proceeds attributable to the disbursement are received into the omnibus account based on the settlement period for the investment options, which in the substantial majority of investment options is T+1. After the deduction of tax withholding, if applicable, disbursements are typically made on T+2 or T+3 either through electronic funds transfers or by mailing a check. Disbursement proceeds distributed by check, net of any tax withholdings, remain in the omnibus account until the check is presented for payment.
|
(3)
|
Effective January 1, 2015, adding a new section, Section 17,
Inspection and Audit
, as follows:
|
(4)
|
Effective January 1, 2015, adding a new section, Section 18,
Assignment
, as follows:
|
(5)
|
Effective January 1, 2015, adding a new section, Section 19,
Resolution of Disputes
, as follows:
|
(a)
|
Informal Dispute Resolution.
|
(b)
|
Non-Binding Mediation.
|
(c)
|
Exceptions to Dispute Resolution Procedure.
|
(6)
|
Effective January 1, 2015, amending
Other
, of Schedule “A”,
Recordkeeping And
Administrative Services
, to add a new item as follows:
|
•
|
additional feeds, custom service features and special processing.
|
•
|
Plan and program changes.
|
•
|
Change in scope of existing services as documented in directions documents describing the services.
|
•
|
Client specific processing requested as an alternative to Fidelity’s standard solution including any additional resources to support said non-standard solution. Examples include change to data feeds, special offering windows and procedural changes.
|
•
|
Support of Corporate Actions. Examples include reorganization, layoff, mergers, acquisitions and divestitures.
|
(7)
|
Effective January 1, 2015, amending the investment options section of Schedule A,
Recordkeeping And Administrative Services
, to add the following:
|
(8)
|
Effective January 1, 2015, amending Schedule B,
Fee Schedule
, to add a new item, as follows:
|
(9)
|
Effective January 1, 2015, amending Schedule B,
Fee Schedule
, to delete the following:
|
1.
|
Credits attributable to Fidelity investment products
:
|
(a)
|
Actively managed (non Class K) Fidelity equity Mutual Funds: 35 basis points per annum;
|
(b)
|
Actively managed (non Class K) Fidelity Freedom
®
Funds: 35 basis points per annum;
|
(c)
|
Actively managed (Class K) Fidelity equity Mutual Funds: 20 basis points per annum;
|
(f)
|
Actively managed Fidelity fixed income and money market Mutual Funds, except for certain Fidelity institutional money market Mutual Funds (e.g. FIMM Funds): 20 basis points per annum;
|
(g)
|
Actively managed Fidelity and Pyramis commingled pools (excluding all stable value commingled pools): 10 basis points per annum;
|
1.
|
Crediting Date
: Participant Revenue Credits shall be allocated to the accounts of Eligible Participants as soon as administratively feasible (generally within 15 business days) after a quarterly recordkeeping invoice has been prepared and sent.
|
2.
|
Eligible Participants
. For the quarterly allocation attributable to any investment product listed in (A), an Eligible Participant shall be any participant or beneficiary with a balance greater than zero in such deemed investment product on the Crediting Date.
|
3.
|
Allocation Method
: Allocations shall be made to Eligible Participants pro rata based on the ratio of each Participant’s balance in the deemed investment fund on the Crediting Date to the total balances for all Eligible Participants in such deemed investment fund on the Crediting Date. The Allocations will be used to purchase whole and fractional shares of the deemed investments in the Eligible Participant Accounts. In the event a residual amount is insufficient to purchase a fractional share it will not be funded.
|
4.
|
Directions
: In allocating to Eligible Participants, the Trustee shall follow directions attached as Schedule B-2.
|
1.
|
The obligation to make 12b-1 Payments shall continue in effect for one year from the Effective Date of this amendment, and shall continue for successive annual periods only upon at least annual approval by a vote of the majority of the Trustees for each of those Fidelity Mutual Funds that have adopted such plans, including a majority of those Trustees that are not "interested persons" (as defined in the 1940 Act) of such Mutual Funds and who have no direct or indirect financial interest in the operation of the plan or any agreement related thereto ("Qualified Trustees").
|
2.
|
Notwithstanding any provision hereof to the contrary, the obligation to make these 12b-1 Payments with respect to any plan may be terminated without penalty at any time, upon either a vote of a majority of the Qualified Trustees, or upon a vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the applicable Fidelity Mutual Fund to terminate or not continue the plan for the applicable Fidelity Mutual Fund.
|
3.
|
Upon assignment of this Agreement, the obligation to make 12b-1 Payments shall automatically terminate.
|
(10)
|
Effective January 1, 2015, amending to add Schedules B-1 and B-2 in their entirety as attached hereto.
|
THE PROGRESSIVE CORPORATION
|
FIDELITY MANAGEMENT TRUST
|
1.
|
Participant Revenue Credits allocated to Eligible Participant accounts shall be deemed to be invested: (Choose one option listed below)
|
2.
|
Deposits in the Revenue Credit Account will be invested in the first available source in the Plan’s source hierarchy, which can be viewed on Fidelity Plan Sponsor Webstation®, unless the box is checked below and another source is specified. Please note that the source used will not impact testing and reporting.
|
1.
|
The Plan
.
The Progressive Corporation and its subsidiaries (collectively "Progressive" or the “Company”) have adopted the 20__ Progressive Capital Management Bonus Plan (the “Plan”) as part of their compensation program for the Company’s investment professionals for the Company’s 20__ fiscal year (the “Plan year”). The Plan is performance-based and is administered under the direction of the Compensation Committee of the Board of Directors of The Progressive Corporation (the “Compensation Committee” or “Committee”). References in this Plan to the Company’s portfolio mean the respective portfolios of the Company’s subsidiaries and mutual insurance company affiliate that are actively managed by Progressive Capital Management Corp., and references in this Plan to the Company’s investment results mean the investment results of those portfolios only.
|
2.
|
Participants.
Progressive employees who are assigned primarily to the Company’s capital management function, including the Company’s Chief Investment Officer (“CIO”), are eligible to be selected for participation in the Plan. Eligible employees in addition to the CIO will be selected by the CIO in consultation with the Chief Executive Officer (“CEO”) and Chief Human Resource Officer (“CHRO”) (the “Designated Executives”) to participate in the Plan. Participants may also participate in other Gainsharing, bonus or incentive compensation plans maintained by Progressive, if so determined by the Designated Executives (or in the case of the CIO or any other executive officer, by the Compensation Committee). Other eligible employees of the Company may be selected for participation in the Plan for or at any time during the Plan year by the Designated Executives. In such cases, the Designated Executives will determine the new participant’s Target Percentage (described below) and other terms of participation (except with respect to the CIO or any other executive officer, as to whom all determinations must be made by the Committee). Throughout this Plan, references to “executive officers” refer to executive officers within the meaning of any Securities and Exchange Commission (“SEC”) or New York Stock Exchange rule applicable to the Company.
|
A.
|
Annual Bonus.
Each participant may earn an annual cash bonus (the “Annual Bonus”), subject to the terms of this Plan. The amount of the Annual Bonus earned by any participant will be determined by application of the following formula:
|
B.
|
Paid Eligible Earnings.
Paid Eligible Earnings for the Plan year shall mean and include the following: regular, Earned Time Benefit pay (excluding the payout of unused Earned Time
|
Comparison
Period
|
Score = 0
Rank at or below
|
Score = 1.0
Rank equal to
|
Score = 2.0
Rank at or above
|
One year
|
15
th
Percentile
|
50
th
Percentile
|
85
th
Percentile
|
Three year
|
25
th
Percentile
|
50
th
Percentile
|
75
th
Percentile
|
•
|
the primary investment factors that are responsible for favorable or unfavorable results relative to the peer group, such as the Company’s duration and yield curve position and the extent of its exposure to sectors of the fixed-income markets, including corporate bonds, residential mortgage-backed securities, commercial mortgage-backed securities, other asset-backed securities, government bonds, preferred stocks and non-investment-grade bonds;
|
•
|
the Company’s holdings within each sector relative to the general market composition of each sector;
|
•
|
the extent to which material investment decisions may have been driven by Company strategic or capital considerations; and
|
•
|
the impact on investment results of significant portfolio cash flows driven by Company operations, strategic decisions or capital transactions.
|
4.
|
Payment Procedures; Deferral
. The Annual Bonuses will be determined and paid to Plan participants as soon as practicable after the Performance Factor has been determined by the Committee, but no later than March 15th following the Plan year.
|
5.
|
Qualification Date; Leave of Absence; Withholding
. Unless otherwise determined by the Committee, and except as otherwise provided herein, in order to be entitled to receive an Annual Bonus for the Plan year, the participant must be an active regular employee of Progressive on November 30 of the Plan year (“Qualification Date”). Individuals who are hired on or after December 1 of any Plan year are not entitled to an Annual Bonus for that Plan year. Any participant who is on a leave of absence covered by the Family and Medical Leave Act of 1993, as amended (or equivalent state or local law), the American with Disabilities Act of 1991, as amended (or equivalent state or local law), personal leave approved by the Company, military leave or short- or long-term disability (provided that, in the case of a long-term disability, the participant is still an employee of the Company) on the Qualification Date relating to the Plan year will be entitled to receive an Annual Bonus for the Plan year based on the Paid Eligible Earnings received by the participant during the Plan year. Annual Bonus payments made to participants will be net of any legally required deductions and/or withholdings for federal, state and local taxes and other items.
|
6.
|
Other Plans
. Participants may be selected to participate in this Plan and in one or more other incentive plans offered by the Company. In the case of the CIO or any other executive officer, all determinations with respect to such incentive plans and the executive’s participation therein shall be made by the Compensation Committee. In all other cases, the Designated Executives shall have full authority to determine the incentive plan or plans in which any employee shall participate during the Plan year and the weighting factor (if any) that will apply to each such plan.
|
7.
|
Non-Transferability.
The right to any Annual Bonuses hereunder may not be sold, transferred, assigned or encumbered by any participant. Nothing herein shall prevent any participant's interest hereunder from being subject to involuntary attachment, levy or other legal process.
|
8.
|
Administration.
The Plan will be administered by or under the direction of the Committee. The Committee will have the authority to adopt, alter, amend, modify and repeal such rules, guidelines, procedures and practices governing the Plan as it, from time to time, in its sole discretion deems advisable.
|
9.
|
Miscellaneous.
|
A.
|
Recoupment.
Progressive shall have the right to recoup any Annual Bonus (or an appropriate portion thereof, as hereinafter provided) with respect to any Plan year paid to a participant hereunder who was an executive officer of Progressive at any time during such Plan year, if: (i) the Annual Bonus payment was predicated upon the achievement during such Plan year of certain financial or operating results (which includes, for purposes hereof, the performance of the Fixed-Income Portfolio); (ii) such financial or operating results were incorrect and were subsequently the subject of a restatement by Progressive within three (3) years after the date on which such Annual Bonus was paid to the participant; and (iii) a lower payment would have been made to the participant if the restated financial or operating results had been known at the time the payment was made. Such recoupment right shall be available to Progressive whether or not the participant in question was at fault or responsible in any way in causing such restatement. In such circumstances, Progressive will have the right to recover from each participant for such Plan year, and each such participant will refund to Progressive, the amount by which the Annual Bonus paid to such participant for the Plan year in question exceeded the lower payment that would have been made based on the restated results, without interest; provided, however, that Progressive will not seek to recover such amounts unless the amount due would exceed the lesser of five percent (5%) of the Annual Bonus previously paid or twenty-thousand dollars ($20,000). Such recovery, at the Committee’s discretion, may be made by lump sum payment, installment payments, credits against future bonus payments, or other appropriate mechanism.
|
B.
|
Further Rights.
Notwithstanding the foregoing subsection A., if any participant that was an executive officer at any time during such Plan year engaged in fraud or other misconduct (as determined by the Committee or the Board, in their respective sole discretion) resulting, in whole or in part, in a restatement of the financial or operating results used hereunder to determine the Annual Bonuses for a specific Plan year, Progressive will further have the right to recover from such participant, and the participant will refund to Progressive upon demand, an amount equal to the entire Annual Bonus paid to such participant for such Plan year plus interest at the rate of eight percent (8%) per annum or, if lower, the highest rate permitted by law, calculated from the date that such bonus was paid to the participant. Progressive shall further have the right to recover from such participant Progressive’s costs and expenses incurred in connection with recovering such Annual Bonus from the participant, including, without limitation, reasonable attorneys’ fees. There shall be no time limit on the Company’s right to recover such amounts under this subsection B., except as otherwise provided by applicable law.
|
C.
|
Rights Not Exclusive.
The rights contained in the foregoing subsections A. and B. shall be in addition to, and shall not limit, any other rights or remedies that the Company may have under any applicable law or regulation.
|
D.
|
Compliance with Law.
The Annual Bonuses determined and paid pursuant to the Plan shall be subject to all applicable laws and regulations. Without limiting the foregoing, and notwithstanding anything to the contrary contained in this Plan, if the SEC promulgates rules under Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act that require, as a condition to the Company’s continued listing on a national securities exchange, that the Company develop and implement a policy requiring the recovery of erroneously awarded compensation, and such regulations are applicable to the Annual Bonuses awarded pursuant to the Plan, then the following shall apply:
|
10.
|
Termination; Amendments.
The Plan may be terminated, amended or revised, in whole or in part, at any time and from time to time by the Committee, in its sole discretion.
|
11.
|
Unfunded Obligations
. The Plan will be unfunded and all payments due under the Plan will be made from Progressive's general assets.
|
12.
|
No Employment Rights
. Nothing in the Plan shall be construed as conferring upon any person the right to remain a participant in the Plan or to remain employed by Progressive, nor shall the Plan limit Progressive's right to discipline or discharge any of its officers or employees or change any of their job titles, duties or compensation.
|
13.
|
Misconduct; Set-off Rights
. No Participant shall have the right to receive any Annual Bonus if, prior to such payment being made, Participant’s employment is terminated as a result of any action or inaction that, under Progressive’s employment practices or policies as then in effect, constitutes grounds for immediate termination of employment, as determined by Progressive (or, in the case of an executive officer, the Committee) in its sole discretion. Progressive shall have the unrestricted right to set off against or recover out of any bonuses or other sums owed to any participant under the Plan any amounts owed by such participant to Progressive.
|
14.
|
Prior Plans.
This Plan supersedes all prior plans, agreements, understandings and arrangements regarding bonuses or other cash incentive compensation payable or due to any participant from Progressive with respect to the performance of Progressive’s investment portfolio. Without limiting the generality of the foregoing, this Plan supersedes and replaces the 20__ Progressive Capital Management Bonus Plan (the "Prior Plan”), which is and shall be deemed to have terminated on the last day of the Company’s 20__ fiscal year (the "Prior Plan Termination Date"); provided, however, that any bonuses or other sums earned and payable under the Prior Plan with respect to any Plan year ended on or prior to the Prior Plan Termination Date shall be unaffected by such termination and shall be paid to the appropriate participants when and as provided thereunder.
|
15.
|
Effective Date.
This Plan is adopted, and is effective, as of the first day of the Company’s 20__ fiscal year and will be effective for the 20__ Plan year (which coincides with Progressive’s 20__ fiscal year, except that investment returns are calculated on a calendar year basis).
|
16.
|
Governing Law.
This Plan shall be interpreted and construed in accordance with the laws of the State of Ohio.
|
1.
|
The firm has provided monthly data regarding its holdings and investment return, as necessary to determine or calculate such firm’s monthly total return, and to evaluate such firm’s compliance with each of the criteria set forth below, for the entire three-year period ending on December 31 of the Plan year; and
|
2.
|
At all times during the three-year period ending on December 31 of the Plan year, the information provided by the firm shows, or Rogers Casey is able to calculate, that such firm’s investment portfolio satisfies each of the following criteria:
|
3.
|
The Company will have no discretion to alter the Investment Benchmark list after it is finalized by Rogers Casey.
|
Firm
|
Performance score
|
Total return
|
Firm above PCM
|
.90
|
13.61
|
PCM
|
|
13.39
|
Firm below PCM
|
.89
|
13.34
|
1.
|
I have reviewed this quarterly report on Form 10-Q of The Progressive Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of The Progressive Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|