|
|
|
ý
|
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
¨
|
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
|
|
Ohio
|
|
34-0963169
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
6300 Wilson Mills Road, Mayfield Village, Ohio
|
|
44143
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
Large accelerated filer
|
|
ý
|
|
Accelerated filer
|
|
¨
|
Non-accelerated filer
|
|
¨
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
|
|
¨
|
|
Three Months Ended March 31, 2016
|
2016
|
|
|
2015
|
|
|
%
Change
|
||
(millions—except per share amounts)
|
|
|
|
|
|
||||
Revenues
|
|
|
|
|
|
||||
Net premiums earned
|
$
|
5,317.4
|
|
|
$
|
4,666.3
|
|
|
14
|
Investment income
|
118.8
|
|
|
105.1
|
|
|
13
|
||
Net realized gains (losses) on securities:
|
|
|
|
|
|
||||
Net impairment losses recognized in earnings
|
0
|
|
|
(7.9
|
)
|
|
(100)
|
||
Net realized gains (losses) on securities
|
17.4
|
|
|
40.9
|
|
|
(57)
|
||
Total net realized gains (losses) on securities
|
17.4
|
|
|
33.0
|
|
|
(47)
|
||
Fees and other revenues
|
78.9
|
|
|
73.7
|
|
|
7
|
||
Service revenues
|
25.0
|
|
|
17.2
|
|
|
45
|
||
Total revenues
|
5,557.5
|
|
|
4,895.3
|
|
|
14
|
||
Expenses
|
|
|
|
|
|
||||
Losses and loss adjustment expenses
|
3,913.4
|
|
|
3,368.6
|
|
|
16
|
||
Policy acquisition costs
|
440.3
|
|
|
379.4
|
|
|
16
|
||
Other underwriting expenses
|
755.8
|
|
|
650.4
|
|
|
16
|
||
Investment expenses
|
4.8
|
|
|
5.3
|
|
|
(9)
|
||
Service expenses
|
21.6
|
|
|
15.9
|
|
|
36
|
||
Interest expense
|
34.2
|
|
|
32.5
|
|
|
5
|
||
Total expenses
|
5,170.1
|
|
|
4,452.1
|
|
|
16
|
||
Net Income
|
|
|
|
|
|
||||
Income before income taxes
|
387.4
|
|
|
443.2
|
|
|
(13)
|
||
Provision for income taxes
|
128.7
|
|
|
147.6
|
|
|
(13)
|
||
Net income
|
258.7
|
|
|
295.6
|
|
|
(12)
|
||
Net income attributable to noncontrolling interest (NCI), net of tax
|
0.5
|
|
|
0
|
|
|
NM
|
||
Net income attributable to Progressive
|
$
|
258.2
|
|
|
$
|
295.6
|
|
|
(13)
|
Other Comprehensive Income (Loss), Net of Tax
|
|
|
|
|
|
||||
Changes in:
|
|
|
|
|
|
||||
Total net unrealized gains (losses) on securities
|
$
|
69.5
|
|
|
$
|
35.4
|
|
|
96
|
Net unrealized gains (losses) on forecasted transactions
|
(0.3
|
)
|
|
(8.7
|
)
|
|
(97)
|
||
Foreign currency translation adjustment
|
0.5
|
|
|
(0.5
|
)
|
|
(200)
|
||
Other comprehensive income
|
69.7
|
|
|
26.2
|
|
|
166
|
||
Other comprehensive (income) loss attributable to NCI
|
(2.1
|
)
|
|
0
|
|
|
NM
|
||
Comprehensive income attributable to Progressive
|
$
|
325.8
|
|
|
$
|
321.8
|
|
|
1
|
Computation of Per Share Earnings
|
|
|
|
|
|
||||
Average shares outstanding - Basic
|
583.2
|
|
|
587.6
|
|
|
(1)
|
||
Net effect of dilutive stock-based compensation
|
2.3
|
|
|
3.4
|
|
|
(32)
|
||
Total equivalent shares - Diluted
|
585.5
|
|
|
591.0
|
|
|
(1)
|
||
Basic: Net income per share
|
$
|
0.44
|
|
|
$
|
0.50
|
|
|
(12)
|
Diluted: Net income per share
|
$
|
0.44
|
|
|
$
|
0.50
|
|
|
(12)
|
Dividends declared per share
1
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
March 31,
|
|
December 31,
2015 |
||||||||
(millions)
|
2016
|
|
|
2015
|
|
|
|||||
Assets
|
|
|
|
|
|
||||||
Investments - Available-for-sale, at fair value:
|
|
|
|
|
|
||||||
Fixed maturities (amortized cost: $13,892.3, $13,997.5, and $15,347.9)
|
$
|
13,966.4
|
|
|
$
|
14,219.8
|
|
|
$
|
15,332.2
|
|
Equity securities:
|
|
|
|
|
|
||||||
Nonredeemable preferred stocks (cost: $731.9, $598.3, and $674.2)
|
832.2
|
|
|
828.1
|
|
|
782.6
|
|
|||
Common equities (cost: $1,524.0, $1,295.0, and $1,494.3)
|
2,705.0
|
|
|
2,515.7
|
|
|
2,650.5
|
|
|||
Short-term investments (amortized cost: $3,826.9, $2,267.0, and $2,172.0)
|
3,826.9
|
|
|
2,267.0
|
|
|
2,172.0
|
|
|||
Total investments
|
21,330.5
|
|
|
19,830.6
|
|
|
20,937.3
|
|
|||
Cash
|
209.9
|
|
|
101.5
|
|
|
224.4
|
|
|||
Accrued investment income
|
93.6
|
|
|
84.7
|
|
|
102.2
|
|
|||
Premiums receivable, net of allowance for doubtful accounts of $157.6, $138.7, and $164.8
|
4,378.9
|
|
|
3,777.0
|
|
|
3,987.7
|
|
|||
Reinsurance recoverables, including $59.5, $50.8, and $46.1 on paid losses and loss adjustment expenses
|
1,568.2
|
|
|
1,257.2
|
|
|
1,488.8
|
|
|||
Prepaid reinsurance premiums
|
216.7
|
|
|
99.3
|
|
|
199.3
|
|
|||
Deferred acquisition costs
|
600.0
|
|
|
484.0
|
|
|
564.1
|
|
|||
Property and equipment, net of accumulated depreciation of $799.6, $742.7, and $778.3
|
1,061.9
|
|
|
957.5
|
|
|
1,037.2
|
|
|||
Goodwill
|
447.6
|
|
|
1.6
|
|
|
447.6
|
|
|||
Intangible assets, net of accumulated amortization of $62.9, $0.6, and $47.4
|
479.4
|
|
|
11.3
|
|
|
494.9
|
|
|||
Other assets
|
334.9
|
|
|
276.0
|
|
|
335.8
|
|
|||
Total assets
|
$
|
30,721.6
|
|
|
$
|
26,880.7
|
|
|
$
|
29,819.3
|
|
Liabilities
|
|
|
|
|
|
||||||
Unearned premiums
|
$
|
7,140.7
|
|
|
$
|
5,854.0
|
|
|
$
|
6,621.8
|
|
Loss and loss adjustment expense reserves
|
10,286.7
|
|
|
9,001.6
|
|
|
10,039.0
|
|
|||
Net deferred income taxes
|
113.9
|
|
|
97.2
|
|
|
109.3
|
|
|||
Dividends payable
|
0
|
|
|
0
|
|
|
519.2
|
|
|||
Accounts payable, accrued expenses, and other liabilities
|
2,451.4
|
|
|
2,165.9
|
|
|
2,067.8
|
|
|||
Debt
1
|
2,701.6
|
|
|
2,560.1
|
|
|
2,707.9
|
|
|||
Total liabilities
|
22,694.3
|
|
|
19,678.8
|
|
|
22,065.0
|
|
|||
Redeemable noncontrolling interest (NCI)
2
|
467.4
|
|
|
0
|
|
|
464.9
|
|
|||
Shareholders' Equity
|
|
|
|
|
|
||||||
Common shares, $1.00 par value (authorized 900.0; issued 797.6, including treasury shares of 214.6, 210.3, and 214.0)
|
583.0
|
|
|
587.3
|
|
|
583.6
|
|
|||
Paid-in capital
|
1,231.3
|
|
|
1,196.7
|
|
|
1,218.8
|
|
|||
Retained earnings
|
4,877.6
|
|
|
4,368.6
|
|
|
4,686.6
|
|
|||
Accumulated other comprehensive income, net of tax:
|
|
|
|
|
|
||||||
Net unrealized gains (losses) on securities
|
878.5
|
|
|
1,057.3
|
|
|
809.0
|
|
|||
Net unrealized gains (losses) on forecasted transactions
|
(8.5
|
)
|
|
(7.2
|
)
|
|
(8.2
|
)
|
|||
Foreign currency translation adjustment
|
(1.0
|
)
|
|
(0.8
|
)
|
|
(1.5
|
)
|
|||
Accumulated other comprehensive (income) loss attributable to noncontrolling interest
|
(1.0
|
)
|
|
0
|
|
|
1.1
|
|
|||
Total accumulated other comprehensive income
|
868.0
|
|
|
1,049.3
|
|
|
800.4
|
|
|||
Total shareholders’ equity
|
7,559.9
|
|
|
7,201.9
|
|
|
7,289.4
|
|
|||
Total liabilities, redeemable NCI, and shareholders’ equity
|
$
|
30,721.6
|
|
|
$
|
26,880.7
|
|
|
$
|
29,819.3
|
|
Three months ended March 31,
|
|
|
|
||||
(millions — except per share amounts)
|
2016
|
|
|
2015
|
|
||
Common Shares, $1.00 Par Value
|
|
|
|
||||
Balance, Beginning of period
|
$
|
583.6
|
|
|
$
|
587.8
|
|
Treasury shares purchased
|
(2.3
|
)
|
|
(2.5
|
)
|
||
Net restricted equity awards issued/vested/(forfeited)
|
1.7
|
|
|
2.0
|
|
||
Balance, End of period
|
$
|
583.0
|
|
|
$
|
587.3
|
|
Paid-In Capital
|
|
|
|
||||
Balance, Beginning of period
|
$
|
1,218.8
|
|
|
$
|
1,184.3
|
|
Tax benefit from vesting of equity-based compensation
|
6.6
|
|
|
6.3
|
|
||
Treasury shares purchased
|
(4.8
|
)
|
|
(5.0
|
)
|
||
Net restricted equity awards (issued)/(vested)/forfeited
|
(1.7
|
)
|
|
(2.0
|
)
|
||
Amortization of equity-based compensation
|
12.8
|
|
|
13.1
|
|
||
Reinvested dividends on restricted stock units
|
(0.3
|
)
|
|
0
|
|
||
Adjustment to carrying amount of redeemable noncontrolling interest
|
(0.1
|
)
|
|
0
|
|
||
Balance, End of period
|
$
|
1,231.3
|
|
|
$
|
1,196.7
|
|
Retained Earnings
|
|
|
|
||||
Balance, Beginning of period
|
$
|
4,686.6
|
|
|
$
|
4,133.4
|
|
Net income attributable to Progressive
|
258.2
|
|
|
295.6
|
|
||
Treasury shares purchased
|
(63.2
|
)
|
|
(58.4
|
)
|
||
Cash dividends declared on common shares
|
0.2
|
|
|
0
|
|
||
Reinvested dividends on restricted stock units
|
0.3
|
|
|
0
|
|
||
Other, net
|
(4.5
|
)
|
|
(2.0
|
)
|
||
Balance, End of period
|
$
|
4,877.6
|
|
|
$
|
4,368.6
|
|
Accumulated Other Comprehensive Income, Net of Tax
|
|
|
|
||||
Balance, Beginning of period
|
$
|
800.4
|
|
|
$
|
1,023.1
|
|
Attributable to noncontrolling interest
|
(2.1
|
)
|
|
0
|
|
||
Other comprehensive income
|
69.7
|
|
|
26.2
|
|
||
Balance, End of period
|
$
|
868.0
|
|
|
$
|
1,049.3
|
|
Total Shareholders’ Equity
|
$
|
7,559.9
|
|
|
$
|
7,201.9
|
|
Three months ended March 31,
|
2016
|
|
|
2015
|
|
||
Cash Flows From Operating Activities
|
|
|
|
||||
Net income
|
$
|
258.7
|
|
|
$
|
295.6
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation
|
27.5
|
|
|
23.8
|
|
||
Amortization of intangible assets
|
15.5
|
|
|
0
|
|
||
Amortization of fixed-income securities
|
20.5
|
|
|
17.3
|
|
||
Amortization of equity-based compensation
|
12.8
|
|
|
13.1
|
|
||
Net realized (gains) losses on securities
|
(17.4
|
)
|
|
(33.0
|
)
|
||
Net (gains) losses on disposition of property and equipment
|
0.1
|
|
|
0.1
|
|
||
Changes in:
|
|
|
|
||||
Premiums receivable
|
(391.1
|
)
|
|
(239.6
|
)
|
||
Reinsurance recoverables
|
(79.4
|
)
|
|
(25.3
|
)
|
||
Prepaid reinsurance premiums
|
(17.4
|
)
|
|
(14.0
|
)
|
||
Deferred acquisition costs
|
(35.9
|
)
|
|
(26.8
|
)
|
||
Income taxes
|
91.8
|
|
|
80.6
|
|
||
Unearned premiums
|
518.6
|
|
|
414.4
|
|
||
Loss and loss adjustment expense reserves
|
247.6
|
|
|
144.4
|
|
||
Accounts payable, accrued expenses, and other liabilities
|
200.1
|
|
|
106.9
|
|
||
Other, net
|
(27.5
|
)
|
|
13.6
|
|
||
Net cash provided by operating activities
|
824.5
|
|
|
771.1
|
|
||
Cash Flows From Investing Activities
|
|
|
|
||||
Purchases:
|
|
|
|
||||
Fixed maturities
|
(2,468.2
|
)
|
|
(3,023.8
|
)
|
||
Equity securities
|
(180.1
|
)
|
|
(77.2
|
)
|
||
Sales:
|
|
|
|
||||
Fixed maturities
|
2,105.9
|
|
|
1,534.6
|
|
||
Equity securities
|
97.9
|
|
|
88.9
|
|
||
Maturities, paydowns, calls, and other:
|
|
|
|
||||
Fixed maturities
|
1,829.8
|
|
|
855.1
|
|
||
Net sales (purchases) of short-term investments
|
(1,653.0
|
)
|
|
(117.7
|
)
|
||
Net unsettled security transactions
|
70.4
|
|
|
64.5
|
|
||
Purchases of property and equipment
|
(54.3
|
)
|
|
(22.2
|
)
|
||
Sales of property and equipment
|
2.0
|
|
|
1.4
|
|
||
Net cash used in investing activities
|
(249.6
|
)
|
|
(696.4
|
)
|
||
Cash Flows From Financing Activities
|
|
|
|
||||
Tax benefit from vesting of equity-based compensation
|
6.6
|
|
|
6.3
|
|
||
Proceeds from debt issuance
|
0
|
|
|
382.0
|
|
||
Payment of debt
|
(6.8
|
)
|
|
0
|
|
||
Dividends paid to shareholders
1
|
(519.0
|
)
|
|
(403.6
|
)
|
||
Acquisition of treasury shares
|
(70.3
|
)
|
|
(65.9
|
)
|
||
Net cash used in financing activities
|
(589.5
|
)
|
|
(81.2
|
)
|
||
Effect of exchange rate changes on cash
|
0.1
|
|
|
(0.4
|
)
|
||
Decrease in cash
|
(14.5
|
)
|
|
(6.9
|
)
|
||
Cash, January 1
|
224.4
|
|
|
108.4
|
|
||
Cash, March 31
|
$
|
209.9
|
|
|
$
|
101.5
|
|
($ in millions)
|
Cost
|
|
|
Gross
Unrealized Gains
|
|
|
Gross
Unrealized
Losses
|
|
|
Net
Holding Period Gains
(Losses)
1
|
|
|
Fair
Value
|
|
|
% of
Total Fair
Value
|
|
|||||
March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
U.S. government obligations
|
$
|
1,375.8
|
|
|
$
|
12.2
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
1,388.0
|
|
|
6.5
|
%
|
State and local government obligations
|
2,452.0
|
|
|
57.4
|
|
|
(1.2
|
)
|
|
0
|
|
|
2,508.2
|
|
|
11.8
|
|
|||||
Foreign government obligations
|
21.9
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
21.9
|
|
|
0.1
|
|
|||||
Corporate debt securities
|
3,795.2
|
|
|
50.6
|
|
|
(6.2
|
)
|
|
0.4
|
|
|
3,840.0
|
|
|
18.0
|
|
|||||
Residential mortgage-backed securities
|
1,810.9
|
|
|
19.5
|
|
|
(28.5
|
)
|
|
(0.4
|
)
|
|
1,801.5
|
|
|
8.4
|
|
|||||
Agency residential pass-through obligations
|
46.5
|
|
|
0.2
|
|
|
(0.1
|
)
|
|
0
|
|
|
46.6
|
|
|
0.2
|
|
|||||
Commercial mortgage-backed securities
|
2,418.7
|
|
|
26.4
|
|
|
(18.9
|
)
|
|
0
|
|
|
2,426.2
|
|
|
11.4
|
|
|||||
Other asset-backed securities
|
1,706.3
|
|
|
1.3
|
|
|
(4.2
|
)
|
|
0.3
|
|
|
1,703.7
|
|
|
8.0
|
|
|||||
Redeemable preferred stocks
|
265.0
|
|
|
14.2
|
|
|
(48.9
|
)
|
|
0
|
|
|
230.3
|
|
|
1.1
|
|
|||||
Total fixed maturities
|
13,892.3
|
|
|
181.8
|
|
|
(108.0
|
)
|
|
0.3
|
|
|
13,966.4
|
|
|
65.5
|
|
|||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Nonredeemable preferred stocks
|
731.9
|
|
|
124.7
|
|
|
(24.4
|
)
|
|
0
|
|
|
832.2
|
|
|
3.9
|
|
|||||
Common equities
|
1,524.0
|
|
|
1,186.7
|
|
|
(5.7
|
)
|
|
0
|
|
|
2,705.0
|
|
|
12.7
|
|
|||||
Short-term investments
|
3,826.9
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
3,826.9
|
|
|
17.9
|
|
|||||
Total portfolio
2,3
|
$
|
19,975.1
|
|
|
$
|
1,493.2
|
|
|
$
|
(138.1
|
)
|
|
$
|
0.3
|
|
|
$
|
21,330.5
|
|
|
100.0
|
%
|
($ in millions)
|
Cost
|
|
|
Gross
Unrealized Gains
|
|
|
Gross
Unrealized
Losses
|
|
|
Net
Holding Period 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
|
|
|||||
Agency residential pass-through obligations
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
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
Holding Period Gains
(Losses)
1
|
|
|
Fair
Value
|
|
|
% of
Total Fair
Value
|
|
|||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
U.S. government obligations
|
$
|
2,425.4
|
|
|
$
|
4.4
|
|
|
$
|
(0.6
|
)
|
|
$
|
0
|
|
|
$
|
2,429.2
|
|
|
11.6
|
%
|
State and local government obligations
|
2,677.6
|
|
|
47.5
|
|
|
(3.7
|
)
|
|
0
|
|
|
2,721.4
|
|
|
13.0
|
|
|||||
Foreign government obligations
|
18.6
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
18.6
|
|
|
0.1
|
|
|||||
Corporate debt securities
|
3,713.2
|
|
|
11.3
|
|
|
(33.0
|
)
|
|
0.1
|
|
|
3,691.6
|
|
|
17.6
|
|
|||||
Residential mortgage-backed securities
|
1,726.0
|
|
|
22.1
|
|
|
(20.6
|
)
|
|
(0.8
|
)
|
|
1,726.7
|
|
|
8.3
|
|
|||||
Agency residential pass-through obligations
|
90.3
|
|
|
0.1
|
|
|
(1.1
|
)
|
|
0
|
|
|
89.3
|
|
|
0.4
|
|
|||||
Commercial mortgage-backed securities
|
2,665.7
|
|
|
16.9
|
|
|
(29.4
|
)
|
|
0
|
|
|
2,653.2
|
|
|
12.7
|
|
|||||
Other asset-backed securities
|
1,771.1
|
|
|
1.4
|
|
|
(5.1
|
)
|
|
0.5
|
|
|
1,767.9
|
|
|
8.4
|
|
|||||
Redeemable preferred stocks
|
260.0
|
|
|
17.6
|
|
|
(43.3
|
)
|
|
0
|
|
|
234.3
|
|
|
1.1
|
|
|||||
Total fixed maturities
|
15,347.9
|
|
|
121.3
|
|
|
(136.8
|
)
|
|
(0.2
|
)
|
|
15,332.2
|
|
|
73.2
|
|
|||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Nonredeemable preferred stocks
|
674.2
|
|
|
122.8
|
|
|
(15.7
|
)
|
|
1.3
|
|
|
782.6
|
|
|
3.7
|
|
|||||
Common equities
|
1,494.3
|
|
|
1,170.4
|
|
|
(14.2
|
)
|
|
0
|
|
|
2,650.5
|
|
|
12.7
|
|
|||||
Short-term investments
|
2,172.0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
2,172.0
|
|
|
10.4
|
|
|||||
Total portfolio
2,3
|
$
|
19,688.4
|
|
|
$
|
1,414.5
|
|
|
$
|
(166.7
|
)
|
|
$
|
1.1
|
|
|
$
|
20,937.3
|
|
|
100.0
|
%
|
|
March 31,
|
|
December 31,
2015 |
|
|||||||
(millions)
|
2016
|
|
|
2015
|
|
|
|||||
Fixed maturities:
|
|
|
|
|
|
||||||
Corporate debt securities
|
$
|
39.2
|
|
|
$
|
132.9
|
|
|
$
|
49.1
|
|
Residential mortgage-backed securities
|
174.4
|
|
|
111.7
|
|
|
144.3
|
|
|||
Commercial mortgage-backed securities
|
0
|
|
|
18.0
|
|
|
17.3
|
|
|||
Other asset-backed securities
|
10.6
|
|
|
13.1
|
|
|
11.3
|
|
|||
Total fixed maturities
|
224.2
|
|
|
275.7
|
|
|
222.0
|
|
|||
Equity securities:
|
|
|
|
|
|
||||||
Nonredeemable preferred stocks
|
49.5
|
|
|
137.2
|
|
|
50.7
|
|
|||
Total hybrid securities
|
$
|
273.7
|
|
|
$
|
412.9
|
|
|
$
|
272.7
|
|
(millions)
|
Cost
|
|
|
Fair Value
|
|
||
Less than one year
|
$
|
3,604.9
|
|
|
$
|
3,596.3
|
|
One to five years
|
7,016.5
|
|
|
7,030.3
|
|
||
Five to ten years
|
3,195.6
|
|
|
3,259.6
|
|
||
Ten years or greater
|
75.3
|
|
|
80.2
|
|
||
Total
|
$
|
13,892.3
|
|
|
$
|
13,966.4
|
|
|
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
|
|
||||||||||||
March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
U.S. government obligations
|
5
|
|
$
|
74.9
|
|
$
|
0
|
|
5
|
|
$
|
74.9
|
|
$
|
0
|
|
|
0
|
|
$
|
0
|
|
$
|
0
|
|
State and local government obligations
|
112
|
|
267.8
|
|
(1.2
|
)
|
63
|
|
132.8
|
|
(0.3
|
)
|
|
49
|
|
135.0
|
|
(0.9
|
)
|
||||||
Corporate debt securities
|
60
|
|
672.3
|
|
(6.2
|
)
|
21
|
|
169.2
|
|
(0.4
|
)
|
|
39
|
|
503.1
|
|
(5.8
|
)
|
||||||
Residential mortgage-backed securities
|
157
|
|
1,345.1
|
|
(28.5
|
)
|
52
|
|
426.9
|
|
(3.9
|
)
|
|
105
|
|
918.2
|
|
(24.6
|
)
|
||||||
Agency residential pass-through obligations
|
25
|
|
9.1
|
|
(0.1
|
)
|
3
|
|
0.4
|
|
0
|
|
|
22
|
|
8.7
|
|
(0.1
|
)
|
||||||
Commercial mortgage-backed securities
|
130
|
|
1,185.4
|
|
(18.9
|
)
|
49
|
|
395.4
|
|
(2.2
|
)
|
|
81
|
|
790.0
|
|
(16.7
|
)
|
||||||
Other asset-backed securities
|
86
|
|
1,175.2
|
|
(4.2
|
)
|
70
|
|
999.3
|
|
(3.2
|
)
|
|
16
|
|
175.9
|
|
(1.0
|
)
|
||||||
Redeemable preferred stocks
|
9
|
|
198.8
|
|
(48.9
|
)
|
4
|
|
88.0
|
|
(16.1
|
)
|
|
5
|
|
110.8
|
|
(32.8
|
)
|
||||||
Total fixed maturities
|
584
|
|
4,928.6
|
|
(108.0
|
)
|
267
|
|
2,286.9
|
|
(26.1
|
)
|
|
317
|
|
2,641.7
|
|
(81.9
|
)
|
||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Nonredeemable preferred stocks
|
13
|
|
344.4
|
|
(24.4
|
)
|
4
|
|
79.0
|
|
(2.6
|
)
|
|
9
|
|
265.4
|
|
(21.8
|
)
|
||||||
Common equities
|
73
|
|
87.4
|
|
(5.7
|
)
|
67
|
|
84.3
|
|
(5.5
|
)
|
|
6
|
|
3.1
|
|
(0.2
|
)
|
||||||
Total equity securities
|
86
|
|
431.8
|
|
(30.1
|
)
|
71
|
|
163.3
|
|
(8.1
|
)
|
|
15
|
|
268.5
|
|
(22.0
|
)
|
||||||
Total portfolio
|
670
|
|
$
|
5,360.4
|
|
$
|
(138.1
|
)
|
338
|
|
$
|
2,450.2
|
|
$
|
(34.2
|
)
|
|
332
|
|
$
|
2,910.2
|
|
$
|
(103.9
|
)
|
|
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
|
)
|
||||||
Agency residential pass-through obligations
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
|
0
|
|
0
|
|
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
|
|
||||||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
U.S. government obligations
|
22
|
|
$
|
897.1
|
|
$
|
(0.6
|
)
|
22
|
|
$
|
897.1
|
|
$
|
(0.6
|
)
|
|
0
|
|
$
|
0
|
|
$
|
0
|
|
State and local government obligations
|
290
|
|
606.7
|
|
(3.7
|
)
|
264
|
|
500.7
|
|
(2.6
|
)
|
|
26
|
|
106.0
|
|
(1.1
|
)
|
||||||
Corporate debt securities
|
215
|
|
2,580.6
|
|
(33.0
|
)
|
197
|
|
2,294.6
|
|
(25.2
|
)
|
|
18
|
|
286.0
|
|
(7.8
|
)
|
||||||
Residential mortgage-backed securities
|
188
|
|
1,294.7
|
|
(20.6
|
)
|
115
|
|
493.4
|
|
(3.7
|
)
|
|
73
|
|
801.3
|
|
(16.9
|
)
|
||||||
Agency residential pass-through obligations
|
61
|
|
84.9
|
|
(1.1
|
)
|
61
|
|
84.9
|
|
(1.1
|
)
|
|
0
|
|
0
|
|
0
|
|
||||||
Commercial mortgage-backed securities
|
207
|
|
2,046.5
|
|
(29.4
|
)
|
171
|
|
1,694.6
|
|
(25.8
|
)
|
|
36
|
|
351.9
|
|
(3.6
|
)
|
||||||
Other asset-backed securities
|
101
|
|
1,548.6
|
|
(5.1
|
)
|
92
|
|
1,472.0
|
|
(4.5
|
)
|
|
9
|
|
76.6
|
|
(0.6
|
)
|
||||||
Redeemable preferred stocks
|
9
|
|
199.4
|
|
(43.3
|
)
|
6
|
|
119.4
|
|
(14.5
|
)
|
|
3
|
|
80.0
|
|
(28.8
|
)
|
||||||
Total fixed maturities
|
1,093
|
|
9,258.5
|
|
(136.8
|
)
|
928
|
|
7,556.7
|
|
(78.0
|
)
|
|
165
|
|
1,701.8
|
|
(58.8
|
)
|
||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Nonredeemable preferred stocks
|
10
|
|
301.8
|
|
(15.7
|
)
|
5
|
|
124.2
|
|
(1.7
|
)
|
|
5
|
|
177.6
|
|
(14.0
|
)
|
||||||
Common equities
|
64
|
|
164.8
|
|
(14.2
|
)
|
60
|
|
161.4
|
|
(14.2
|
)
|
|
4
|
|
3.4
|
|
0
|
|
||||||
Total equity securities
|
74
|
|
466.6
|
|
(29.9
|
)
|
65
|
|
285.6
|
|
(15.9
|
)
|
|
9
|
|
181.0
|
|
(14.0
|
)
|
||||||
Total portfolio
|
1,167
|
|
$
|
9,725.1
|
|
$
|
(166.7
|
)
|
993
|
|
$
|
7,842.3
|
|
$
|
(93.9
|
)
|
|
174
|
|
$
|
1,882.8
|
|
$
|
(72.8
|
)
|
|
March 31,
|
|
December 31,
2015 |
|
|||||||
(millions)
|
2016
|
|
|
2015
|
|
|
|||||
Fixed maturities:
|
|
|
|
|
|
||||||
Residential mortgage-backed securities
|
$
|
(43.3
|
)
|
|
$
|
(44.1
|
)
|
|
$
|
(43.3
|
)
|
Commercial mortgage-backed securities
|
(0.6
|
)
|
|
(0.6
|
)
|
|
(0.6
|
)
|
|||
Total fixed maturities
|
$
|
(43.9
|
)
|
|
$
|
(44.7
|
)
|
|
$
|
(43.9
|
)
|
|
Three Months Ended March 31, 2016
|
||||||||||
|
Mortgage-Backed
|
|
|
||||||||
(millions)
|
Residential
|
|
|
Commercial
|
|
|
Total
|
|
|||
Balance at December 31, 2015
|
$
|
12.4
|
|
|
$
|
0.4
|
|
|
$
|
12.8
|
|
Change in recoveries of future cash flows expected to be collected
1
|
(0.3
|
)
|
|
0
|
|
|
(0.3
|
)
|
|||
Balance at March 31, 2016
|
$
|
12.1
|
|
|
$
|
0.4
|
|
|
$
|
12.5
|
|
|
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
|
||||||
(millions)
|
2016
|
|
|
2015
|
|
||
Gross realized gains on security sales
|
|
|
|
||||
Fixed maturities:
|
|
|
|
||||
U.S. government obligations
|
$
|
14.3
|
|
|
$
|
4.9
|
|
State and local government obligations
|
10.9
|
|
|
0
|
|
||
Corporate and other debt securities
|
12.5
|
|
|
9.1
|
|
||
Residential mortgage-backed securities
|
0.9
|
|
|
0.1
|
|
||
Commercial mortgage-backed securities
|
3.6
|
|
|
10.8
|
|
||
Total fixed maturities
|
42.2
|
|
|
24.9
|
|
||
Equity securities:
|
|
|
|
||||
Nonredeemable preferred stocks
|
1.6
|
|
|
15.8
|
|
||
Common equities
|
9.5
|
|
|
17.8
|
|
||
Subtotal gross realized gains on security sales
|
53.3
|
|
|
58.5
|
|
||
Gross realized losses on security sales
|
|
|
|
||||
Fixed maturities:
|
|
|
|
||||
U.S. government obligations
|
(0.4
|
)
|
|
(0.8
|
)
|
||
State and local government obligations
|
(0.1
|
)
|
|
0
|
|
||
Corporate and other debt securities
|
(0.4
|
)
|
|
(0.8
|
)
|
||
Commercial mortgage-backed securities
|
(2.7
|
)
|
|
(0.2
|
)
|
||
Total fixed maturities
|
(3.6
|
)
|
|
(1.8
|
)
|
||
Equity securities:
|
|
|
|
||||
Nonredeemable preferred stocks
|
(1.0
|
)
|
|
0
|
|
||
Common equities
|
(4.9
|
)
|
|
(0.4
|
)
|
||
Subtotal gross realized losses on security sales
|
(9.5
|
)
|
|
(2.2
|
)
|
||
Net realized gains (losses) on security sales
|
|
|
|
||||
Fixed maturities:
|
|
|
|
||||
U.S. government obligations
|
13.9
|
|
|
4.1
|
|
||
State and local government obligations
|
10.8
|
|
|
0
|
|
||
Corporate and other debt securities
|
12.1
|
|
|
8.3
|
|
||
Residential mortgage-backed securities
|
0.9
|
|
|
0.1
|
|
||
Commercial mortgage-backed securities
|
0.9
|
|
|
10.6
|
|
||
Total fixed maturities
|
38.6
|
|
|
23.1
|
|
||
Equity securities:
|
|
|
|
||||
Nonredeemable preferred stocks
|
0.6
|
|
|
15.8
|
|
||
Common equities
|
4.6
|
|
|
17.4
|
|
||
Subtotal net realized gains (losses) on security sales
|
43.8
|
|
|
56.3
|
|
||
Other-than-temporary impairment losses
|
|
|
|
||||
Equity securities:
|
|
|
|
||||
Common equities
|
0
|
|
|
(7.9
|
)
|
||
Subtotal other-than-temporary impairment losses
|
0
|
|
|
(7.9
|
)
|
||
Other gains (losses)
|
|
|
|
||||
Hybrid securities
|
(0.7
|
)
|
|
3.3
|
|
||
Derivative instruments
|
(25.7
|
)
|
|
(18.8
|
)
|
||
Litigation settlements
|
0
|
|
|
0.1
|
|
||
Subtotal other gains (losses)
|
(26.4
|
)
|
|
(15.4
|
)
|
||
Total net realized gains (losses) on securities
|
$
|
17.4
|
|
|
$
|
33.0
|
|
|
Three Months
|
|||||
(millions)
|
2016
|
|
2015
|
|
||
Fixed maturities:
|
|
|
||||
U.S. government obligations
|
$
|
4.8
|
|
$
|
9.1
|
|
State and local government obligations
|
13.5
|
|
11.9
|
|
||
Foreign government obligations
|
0.1
|
|
0.1
|
|
||
Corporate debt securities
|
28.2
|
|
22.9
|
|
||
Residential mortgage-backed securities
|
12.2
|
|
12.8
|
|
||
Agency residential pass-through obligations
|
0.4
|
|
0
|
|
||
Commercial mortgage-backed securities
|
20.9
|
|
16.9
|
|
||
Other asset-backed securities
|
6.0
|
|
5.0
|
|
||
Redeemable preferred stocks
|
3.8
|
|
3.8
|
|
||
Total fixed maturities
|
89.9
|
|
82.5
|
|
||
Equity securities:
|
|
|
||||
Nonredeemable preferred stocks
|
11.8
|
|
10.5
|
|
||
Common equities
|
14.5
|
|
11.7
|
|
||
Short-term investments
|
2.6
|
|
0.4
|
|
||
Investment income
|
118.8
|
|
105.1
|
|
||
Investment expenses
|
(4.8
|
)
|
(5.3
|
)
|
||
Net investment income
|
$
|
114.0
|
|
$
|
99.8
|
|
(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:
|
2016
|
|
|
2015
|
|
|
2015
|
|
|
Purpose
|
|
Classification
|
|
2016
|
|
|
2015
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||||||
Hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Closed:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Ineffective cash flow hedge
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
18
|
|
|
Manage
interest
rate risk
|
|
NA
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Non-hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate swaps
|
0
|
|
|
750
|
|
|
750
|
|
|
Manage
portfolio
duration
|
|
Investments—
fixed
maturities
|
|
0
|
|
|
0.1
|
|
|
4.4
|
|
|
0
|
|
|
(18.8
|
)
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate swaps
|
565
|
|
|
0
|
|
|
0
|
|
|
Manage
portfolio
duration
|
|
Other liabilities
|
|
(18.7
|
)
|
|
0
|
|
|
0
|
|
|
(24.0
|
)
|
|
0
|
|
||||||||
Closed:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate swaps
|
185
|
|
|
0
|
|
|
0
|
|
|
Manage
portfolio
duration
|
|
NA
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(1.9
|
)
|
|
0
|
|
||||||||
U.S. Treasury Note futures
|
55
|
|
|
0
|
|
|
691
|
|
|
Manage
portfolio duration |
|
NA
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0.2
|
|
|
0
|
|
||||||||
Total
|
NA
|
|
|
NA
|
|
|
NA
|
|
|
|
|
|
|
$
|
(18.7
|
)
|
|
$
|
0.1
|
|
|
$
|
4.4
|
|
|
$
|
(25.7
|
)
|
|
$
|
(18.8
|
)
|
•
|
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, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government obligations
|
$
|
1,388.0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
1,388.0
|
|
|
$
|
1,375.8
|
|
State and local government obligations
|
0
|
|
|
2,508.2
|
|
|
0
|
|
|
2,508.2
|
|
|
2,452.0
|
|
|||||
Foreign government obligations
|
21.9
|
|
|
0
|
|
|
0
|
|
|
21.9
|
|
|
21.9
|
|
|||||
Corporate debt securities
|
0
|
|
|
3,840.0
|
|
|
0
|
|
|
3,840.0
|
|
|
3,795.2
|
|
|||||
Subtotal
|
1,409.9
|
|
|
6,348.2
|
|
|
0
|
|
|
7,758.1
|
|
|
7,644.9
|
|
|||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential mortgage-backed
|
0
|
|
|
1,801.5
|
|
|
0
|
|
|
1,801.5
|
|
|
1,810.9
|
|
|||||
Agency residential pass-through obligations
|
0
|
|
|
46.6
|
|
|
0
|
|
|
46.6
|
|
|
46.5
|
|
|||||
Commercial mortgage-backed
|
0
|
|
|
2,416.7
|
|
|
9.5
|
|
|
2,426.2
|
|
|
2,418.7
|
|
|||||
Other asset-backed
|
0
|
|
|
1,703.7
|
|
|
0
|
|
|
1,703.7
|
|
|
1,706.3
|
|
|||||
Subtotal asset-backed securities
|
0
|
|
|
5,968.5
|
|
|
9.5
|
|
|
5,978.0
|
|
|
5,982.4
|
|
|||||
Redeemable preferred stocks:
|
|
|
|
|
|
|
|
|
|
||||||||||
Financials
|
0
|
|
|
91.7
|
|
|
0
|
|
|
91.7
|
|
|
81.8
|
|
|||||
Utilities
|
0
|
|
|
51.6
|
|
|
0
|
|
|
51.6
|
|
|
65.1
|
|
|||||
Industrials
|
0
|
|
|
87.0
|
|
|
0
|
|
|
87.0
|
|
|
118.1
|
|
|||||
Subtotal redeemable preferred stocks
|
0
|
|
|
230.3
|
|
|
0
|
|
|
230.3
|
|
|
265.0
|
|
|||||
Total fixed maturities
|
1,409.9
|
|
|
12,547.0
|
|
|
9.5
|
|
|
13,966.4
|
|
|
13,892.3
|
|
|||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Nonredeemable preferred stocks:
|
|
|
|
|
|
|
|
|
|
||||||||||
Financials
|
153.8
|
|
|
678.4
|
|
|
0
|
|
|
832.2
|
|
|
731.9
|
|
|||||
Subtotal nonredeemable preferred stocks
|
153.8
|
|
|
678.4
|
|
|
0
|
|
|
832.2
|
|
|
731.9
|
|
|||||
Common equities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stocks
|
2,704.7
|
|
|
0
|
|
|
0
|
|
|
2,704.7
|
|
|
1,523.7
|
|
|||||
Other risk investments
|
0
|
|
|
0
|
|
|
0.3
|
|
|
0.3
|
|
|
0.3
|
|
|||||
Subtotal common equities
|
2,704.7
|
|
|
0
|
|
|
0.3
|
|
|
2,705.0
|
|
|
1,524.0
|
|
|||||
Total fixed maturities and equity securities
|
4,268.4
|
|
|
13,225.4
|
|
|
9.8
|
|
|
17,503.6
|
|
|
16,148.2
|
|
|||||
Short-term investments
|
3,730.0
|
|
|
96.9
|
|
|
0
|
|
|
3,826.9
|
|
|
3,826.9
|
|
|||||
Total portfolio
|
$
|
7,998.4
|
|
|
$
|
13,322.3
|
|
|
$
|
9.8
|
|
|
$
|
21,330.5
|
|
|
$
|
19,975.1
|
|
Debt
|
$
|
0
|
|
|
$
|
2,789.2
|
|
|
$
|
158.1
|
|
|
$
|
2,947.3
|
|
|
$
|
2,701.6
|
|
|
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
|
|
|||||
Agency residential pass-through obligations
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
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
|
|
|||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government obligations
|
$
|
2,429.2
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
2,429.2
|
|
|
$
|
2,425.4
|
|
State and local government obligations
|
0
|
|
|
2,721.4
|
|
|
0
|
|
|
2,721.4
|
|
|
2,677.6
|
|
|||||
Foreign government obligations
|
18.6
|
|
|
0
|
|
|
0
|
|
|
18.6
|
|
|
18.6
|
|
|||||
Corporate debt securities
|
0
|
|
|
3,691.6
|
|
|
0
|
|
|
3,691.6
|
|
|
3,713.2
|
|
|||||
Subtotal
|
2,447.8
|
|
|
6,413.0
|
|
|
0
|
|
|
8,860.8
|
|
|
8,834.8
|
|
|||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential mortgage-backed
|
0
|
|
|
1,726.7
|
|
|
0
|
|
|
1,726.7
|
|
|
1,726.0
|
|
|||||
Agency residential pass-through obligations
|
0
|
|
|
89.3
|
|
|
0
|
|
|
89.3
|
|
|
90.3
|
|
|||||
Commercial mortgage-backed
|
0
|
|
|
2,643.3
|
|
|
9.9
|
|
|
2,653.2
|
|
|
2,665.7
|
|
|||||
Other asset-backed
|
0
|
|
|
1,767.9
|
|
|
0
|
|
|
1,767.9
|
|
|
1,771.1
|
|
|||||
Subtotal asset-backed securities
|
0
|
|
|
6,227.2
|
|
|
9.9
|
|
|
6,237.1
|
|
|
6,253.1
|
|
|||||
Redeemable preferred stocks:
|
|
|
|
|
|
|
|
|
|
||||||||||
Financials
|
0
|
|
|
92.0
|
|
|
0
|
|
|
92.0
|
|
|
76.8
|
|
|||||
Utilities
|
0
|
|
|
51.2
|
|
|
0
|
|
|
51.2
|
|
|
65.1
|
|
|||||
Industrials
|
0
|
|
|
91.1
|
|
|
0
|
|
|
91.1
|
|
|
118.1
|
|
|||||
Subtotal redeemable preferred stocks
|
0
|
|
|
234.3
|
|
|
0
|
|
|
234.3
|
|
|
260.0
|
|
|||||
Total fixed maturities
|
2,447.8
|
|
|
12,874.5
|
|
|
9.9
|
|
|
15,332.2
|
|
|
15,347.9
|
|
|||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Nonredeemable preferred stocks:
|
|
|
|
|
|
|
|
|
|
||||||||||
Financials
|
154.9
|
|
|
627.7
|
|
|
0
|
|
|
782.6
|
|
|
674.2
|
|
|||||
Subtotal nonredeemable preferred stocks
|
154.9
|
|
|
627.7
|
|
|
0
|
|
|
782.6
|
|
|
674.2
|
|
|||||
Common equities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stocks
|
2,650.2
|
|
|
0
|
|
|
0
|
|
|
2,650.2
|
|
|
1,494.0
|
|
|||||
Other risk investments
|
0
|
|
|
0
|
|
|
0.3
|
|
|
0.3
|
|
|
0.3
|
|
|||||
Subtotal common equities
|
2,650.2
|
|
|
0
|
|
|
0.3
|
|
|
2,650.5
|
|
|
1,494.3
|
|
|||||
Total fixed maturities and equity securities
|
5,252.9
|
|
|
13,502.2
|
|
|
10.2
|
|
|
18,765.3
|
|
|
17,516.4
|
|
|||||
Short-term investments
|
2,056.3
|
|
|
115.7
|
|
|
0
|
|
|
2,172.0
|
|
|
2,172.0
|
|
|||||
Total portfolio
|
$
|
7,309.2
|
|
|
$
|
13,617.9
|
|
|
$
|
10.2
|
|
|
$
|
20,937.3
|
|
|
$
|
19,688.4
|
|
Debt
|
$
|
0
|
|
|
$
|
2,722.9
|
|
|
$
|
164.9
|
|
|
$
|
2,887.8
|
|
|
$
|
2,707.9
|
|
|
Level 3 Fair Value
|
||||||||||||||||||||||||||||||
|
Three Months Ended March 31, 2016
|
||||||||||||||||||||||||||||||
(millions)
|
Fair Value at December 31, 2015
|
|
|
Calls/
Maturities/
Paydowns
|
|
|
Purchases
|
|
|
Sales
|
|
|
Net Realized (Gain) Loss on Sales
|
|
|
Change in Valuation
|
|
|
Net
Transfers
In (Out)
|
|
|
Fair Value at March 31, 2016
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial mortgage-backed
|
$
|
9.9
|
|
|
$
|
(0.3
|
)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
(0.1
|
)
|
|
$
|
0
|
|
|
$
|
9.5
|
|
Total fixed maturities
|
9.9
|
|
|
(0.3
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(0.1
|
)
|
|
0
|
|
|
9.5
|
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Nonredeemable preferred stocks:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Financials
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||||
Common equities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other risk investments
|
0.3
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0.3
|
|
||||||||
Total Level 3 securities
|
$
|
10.2
|
|
|
$
|
(0.3
|
)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
(0.1
|
)
|
|
$
|
0
|
|
|
$
|
9.8
|
|
|
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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
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
|
|
|
Quantitative Information about Level 3 Fair Value Measurements
|
|||||||||
($ in millions)
|
Fair Value at March 31, 2016
|
|
|
Valuation Technique
|
|
Unobservable Input
|
|
Unobservable
Input Assumption |
|
|
Fixed maturities:
|
|
|
|
|
|
|
|
|||
Asset-backed securities:
|
|
|
|
|
|
|
|
|||
Commercial mortgage-backed
|
$
|
9.5
|
|
|
External vendor
|
|
Prepayment rate
1
|
|
0
|
%
|
Total fixed maturities
|
9.5
|
|
|
|
|
|
|
|
||
Equity securities:
|
|
|
|
|
|
|
|
|||
Nonredeemable preferred stocks:
|
|
|
|
|
|
|
|
|||
Financials
|
0
|
|
|
NA
|
|
NA
|
|
NA
|
|
|
Subtotal Level 3 securities
|
9.5
|
|
|
|
|
|
|
|
||
Pricing exemption securities
2
|
0.3
|
|
|
|
|
|
|
|
||
Total Level 3 securities
|
$
|
9.8
|
|
|
|
|
|
|
|
|
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 Dec. 31, 2015
|
|
|
Valuation Technique
|
|
Unobservable Input
|
|
Unobservable
Input Assumption |
|
Fixed maturities:
|
|
|
|
|
|
|
|
||
Asset-backed securities:
|
|
|
|
|
|
|
|
||
Commercial mortgage-backed
|
$
|
9.9
|
|
|
External vendor
|
|
Prepayment rate
1
|
|
0
|
Total fixed maturities
|
9.9
|
|
|
|
|
|
|
|
|
Equity securities:
|
|
|
|
|
|
|
|
||
Nonredeemable preferred stocks:
|
|
|
|
|
|
|
|
||
Financials
|
0
|
|
|
NA
|
|
NA
|
|
NA
|
|
Subtotal Level 3 securities
|
9.9
|
|
|
|
|
|
|
|
|
Pricing exemption securities
2
|
0.3
|
|
|
|
|
|
|
|
|
Total Level 3 securities
|
$
|
10.2
|
|
|
|
|
|
|
|
|
March 31, 2016
|
|
March 31, 2015
|
|
December 31, 2015
|
||||||||||||||||||
(millions)
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
||||||||||||
3.75% Senior Notes due 2021
|
$
|
498.2
|
|
|
$
|
538.4
|
|
|
$
|
497.9
|
|
|
$
|
542.6
|
|
|
$
|
498.1
|
|
|
$
|
528.7
|
|
6 5/8% Senior Notes due 2029
|
295.8
|
|
|
388.7
|
|
|
295.6
|
|
|
393.6
|
|
|
295.7
|
|
|
376.0
|
|
||||||
6.25% Senior Notes due 2032
|
395.0
|
|
|
509.7
|
|
|
394.9
|
|
|
525.6
|
|
|
395.0
|
|
|
490.6
|
|
||||||
4.35% Senior Notes due 2044
|
346.4
|
|
|
377.9
|
|
|
346.3
|
|
|
387.1
|
|
|
346.4
|
|
|
352.8
|
|
||||||
3.70% Senior Notes due 2045
|
395.0
|
|
|
388.6
|
|
|
394.9
|
|
|
394.8
|
|
|
395.0
|
|
|
362.0
|
|
||||||
6.70% Fixed-to-Floating Rate Junior Subordinated Debentures due 2067
|
613.1
|
|
|
585.9
|
|
|
630.5
|
|
|
667.2
|
|
|
612.8
|
|
|
612.8
|
|
||||||
Other debt instruments
|
158.1
|
|
|
158.1
|
|
|
0
|
|
|
0
|
|
|
164.9
|
|
|
164.9
|
|
||||||
Total
|
$
|
2,701.6
|
|
|
$
|
2,947.3
|
|
|
$
|
2,560.1
|
|
|
$
|
2,910.9
|
|
|
$
|
2,707.9
|
|
|
$
|
2,887.8
|
|
|
March 31, 2016
|
|
December 31, 2015
|
|
||||||||||
Type of debt instrument
|
Number of Instruments
|
|
|
Carrying
Value
|
|
|
Number of Instruments
|
|
|
Carrying
Value |
|
Stated Maturity Date(s)
|
||
Term loans
|
2
|
|
|
$
|
80.8
|
|
|
2
|
|
|
$
|
87.1
|
|
December 2018 and 2019
|
Junior subordinated notes
1
|
2
|
|
|
41.2
|
|
|
2
|
|
|
41.2
|
|
June 2036 and 2037
|
||
Senior notes
|
4
|
|
|
24.0
|
|
|
4
|
|
|
24.0
|
|
Various
2
|
||
Surplus note
|
1
|
|
|
12.1
|
|
|
1
|
|
|
12.6
|
|
November 2021
|
||
Total
|
|
|
$
|
158.1
|
|
|
|
|
$
|
164.9
|
|
|
|
Three Months Ended March 31,
|
||||||||||||||
|
2016
|
|
2015
|
||||||||||||
(millions)
|
Revenues
|
|
Pretax
Profit
(Loss)
|
|
Revenues
|
|
Pretax
Profit
(Loss)
|
||||||||
Personal Lines
|
|
|
|
|
|
|
|
||||||||
Agency
|
$
|
2,347.9
|
|
|
$
|
171.4
|
|
|
$
|
2,244.5
|
|
|
$
|
194.5
|
|
Direct
|
2,220.7
|
|
|
79.5
|
|
|
1,955.4
|
|
|
68.2
|
|
||||
Total Personal Lines
1
|
4,568.6
|
|
|
250.9
|
|
|
4,199.9
|
|
|
262.7
|
|
||||
Commercial Lines
|
548.8
|
|
|
61.1
|
|
|
466.4
|
|
|
78.5
|
|
||||
Property
2
|
200.0
|
|
|
(24.5
|
)
|
|
NA
|
|
|
NA
|
|
||||
Other indemnity
|
0
|
|
|
(0.7
|
)
|
|
0
|
|
|
0.4
|
|
||||
Total underwriting operations
|
5,317.4
|
|
|
286.8
|
|
|
4,666.3
|
|
|
341.6
|
|
||||
Fees and other revenues
3
|
78.9
|
|
|
NA
|
|
|
73.7
|
|
|
NA
|
|
||||
Service businesses
|
25.0
|
|
|
3.4
|
|
|
17.2
|
|
|
1.3
|
|
||||
Investments
4
|
136.2
|
|
|
131.4
|
|
|
138.1
|
|
|
132.8
|
|
||||
Interest expense
|
NA
|
|
|
(34.2
|
)
|
|
NA
|
|
|
(32.5
|
)
|
||||
Consolidated total
|
$
|
5,557.5
|
|
|
$
|
387.4
|
|
|
$
|
4,895.3
|
|
|
$
|
443.2
|
|
|
Three Months Ended March 31,
|
||||||||
|
2016
|
|
2015
|
||||||
|
Under-writing
Margin
|
|
Combined
Ratio
|
|
Under-writing
Margin
|
|
Combined
Ratio
|
||
Personal Lines
|
|
|
|
|
|
|
|
||
Agency
|
7.3
|
%
|
|
92.7
|
|
8.7
|
%
|
|
91.3
|
Direct
|
3.6
|
|
|
96.4
|
|
3.5
|
|
|
96.5
|
Total Personal Lines
|
5.5
|
|
|
94.5
|
|
6.3
|
|
|
93.7
|
Commercial Lines
|
11.1
|
|
|
88.9
|
|
16.8
|
|
|
83.2
|
Property
1
|
(12.2
|
)
|
|
112.2
|
|
NA
|
|
NA
|
|
Other indemnity
2
|
NM
|
|
|
NM
|
|
NM
|
|
NM
|
|
Total underwriting operations
|
5.4
|
|
|
94.6
|
|
7.3
|
|
|
92.7
|
(millions, except per share amounts)
|
|
Amount
|
||||||
Dividend Type
|
Declared
|
Paid
|
Per Share
|
|
Total
1
|
|
||
Annual – Variable
|
December 2015
|
February 2016
|
$
|
0.8882
|
|
$
|
519.0
|
|
Annual – Variable
|
December 2014
|
February 2015
|
0.6862
|
|
404.1
|
|
|
|
|
|
|
|
|
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
|
|
|
(Income)loss attributable to NCI
|
|
|||||||
Balance at December 31, 2015
|
$
|
1,234.5
|
|
|
$
|
(434.1
|
)
|
|
$
|
800.4
|
|
|
$
|
809.0
|
|
|
$
|
(8.2
|
)
|
|
$
|
(1.5
|
)
|
|
$
|
1.1
|
|
Other comprehensive income (loss) before reclassifications:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Investment securities
|
142.7
|
|
|
(50.3
|
)
|
|
92.4
|
|
|
92.4
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
Net non-credit related OTTI losses, adjusted for valuation changes
|
(0.1
|
)
|
|
0.1
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
Forecasted transactions
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
Foreign currency translation adjustment
|
0.7
|
|
|
(0.2
|
)
|
|
0.5
|
|
|
0
|
|
|
0
|
|
|
0.5
|
|
|
0
|
|
|||||||
Loss attributable to noncontrolling interest (NCI)
|
(3.3
|
)
|
|
1.2
|
|
|
(2.1
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(2.1
|
)
|
|||||||
Total other comprehensive income (loss) before reclassifications
|
140.0
|
|
|
(49.2
|
)
|
|
90.8
|
|
|
92.4
|
|
|
0
|
|
|
0.5
|
|
|
(2.1
|
)
|
|||||||
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
|
|
|
0
|
|
|||||||
Net realized gains (losses) on securities
|
35.3
|
|
|
(12.4
|
)
|
|
22.9
|
|
|
22.9
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
Interest expense
|
0.5
|
|
|
(0.2
|
)
|
|
0.3
|
|
|
0
|
|
|
0.3
|
|
|
0
|
|
|
0
|
|
|||||||
Total reclassification adjustment for amounts realized in net income
|
35.8
|
|
|
(12.6
|
)
|
|
23.2
|
|
|
22.9
|
|
|
0.3
|
|
|
0
|
|
|
0
|
|
|||||||
Total other comprehensive income (loss)
|
104.2
|
|
|
(36.6
|
)
|
|
67.6
|
|
|
69.5
|
|
|
(0.3
|
)
|
|
0.5
|
|
|
(2.1
|
)
|
|||||||
Balance at March 31, 2016
|
$
|
1,338.7
|
|
|
$
|
(470.7
|
)
|
|
$
|
868.0
|
|
|
$
|
878.5
|
|
|
$
|
(8.5
|
)
|
|
$
|
(1.0
|
)
|
|
$
|
(1.0
|
)
|
|
|
|
|
|
|
|
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
|
|
|
(Income)loss attributable to NCI
|
|
|||||||
Balance at December 31, 2014
|
$
|
1,574.0
|
|
|
$
|
(550.9
|
)
|
|
$
|
1,023.1
|
|
|
$
|
1,021.9
|
|
|
$
|
1.5
|
|
|
$
|
(0.3
|
)
|
|
$
|
0
|
|
Other comprehensive income (loss) before reclassifications:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Investment securities
|
99.3
|
|
|
(34.7
|
)
|
|
64.6
|
|
|
64.6
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
Net non-credit related OTTI losses, adjusted for valuation changes
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
Forecasted transactions
|
(12.8
|
)
|
|
4.4
|
|
|
(8.4
|
)
|
|
0
|
|
|
(8.4
|
)
|
|
0
|
|
|
0
|
|
|||||||
Foreign currency translation adjustment
|
(0.9
|
)
|
|
0.4
|
|
|
(0.5
|
)
|
|
0
|
|
|
0
|
|
|
(0.5
|
)
|
|
0
|
|
|||||||
Loss attributable to noncontrolling interest (NCI)
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
Total other comprehensive income (loss) before reclassifications
|
85.6
|
|
|
(29.9
|
)
|
|
55.7
|
|
|
64.6
|
|
|
(8.4
|
)
|
|
(0.5
|
)
|
|
0
|
|
|||||||
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
|
|
|
0
|
|
|||||||
Net realized gains (losses) on securities
|
52.8
|
|
|
(18.5
|
)
|
|
34.3
|
|
|
34.3
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
Interest expense
|
0.5
|
|
|
(0.2
|
)
|
|
0.3
|
|
|
0
|
|
|
0.3
|
|
|
0
|
|
|
0
|
|
|||||||
Total reclassification adjustment for amounts realized in net income
|
45.4
|
|
|
(15.9
|
)
|
|
29.5
|
|
|
29.2
|
|
|
0.3
|
|
|
0
|
|
|
0
|
|
|||||||
Total other comprehensive income (loss)
|
40.2
|
|
|
(14.0
|
)
|
|
26.2
|
|
|
35.4
|
|
|
(8.7
|
)
|
|
(0.5
|
)
|
|
0
|
|
|||||||
Balance at March 31, 2015
|
$
|
1,614.2
|
|
|
$
|
(564.9
|
)
|
|
$
|
1,049.3
|
|
|
$
|
1,057.3
|
|
|
$
|
(7.2
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
0
|
|
($ in millions)
|
Date of Acquisition
|
|
March 31, 2016
|
||||||
Category
|
Value
|
|
Useful Life
|
|
Accumulated Amortization
|
|
Remaining Useful Life
|
||
Policies in force
|
$
|
256.2
|
|
7 years
|
|
$
|
36.6
|
|
6 years
|
Agency relationships
|
159.2
|
|
14 years
|
|
11.4
|
|
13 years
|
||
Software
|
69.1
|
|
8 years
|
|
8.6
|
|
7 years
|
||
Trade name
|
34.8
|
|
10 years
|
|
3.5
|
|
9 years
|
||
Agent licenses
|
1.1
|
|
Indefinite
|
|
0
|
|
Indefinite
|
||
Total
|
$
|
520.4
|
|
|
|
$
|
60.1
|
|
|
•
|
All excess tax benefits and tax deficiencies should be recognized as income tax expense or benefit in the comprehensive income statement (applied prospectively) and classified in the statement of cash flows as an operating activity (applied using either a prospective or retrospective transition method)
|
•
|
Companies are allowed to decide whether or not to record forfeitures of share-based awards when the forfeiture occurs or to record compensation expense over the vesting period net of estimated forfeitures (applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity upon adoption)
|
•
|
Companies are permitted to withhold up to the maximum statutory tax rate and still maintain equity classification of share-based awards (applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity upon adoption)
|
•
|
Companies are required to classify as a financing activity in the statement of cash flows the payment of cash to a taxing authority when the company withholds shares for such purpose (applied retrospectively)
|
•
|
increase brand awareness and balance our marketing activity to execute on our multi-channel strategy and drive new business growth and retention across all of our segments
|
•
|
broaden our offerings to increase multi-product households, through the continued roll out of "Platinum," which provides agents with a single offering that combines home insurance from ASI and auto insurance from Progressive, as well as partnering with unaffiliated insurance providers to offer other insurance products to our customers, such as homeowners, flood, classic car, special event, travel, pet, life, ID protection, and more, and
|
•
|
roll out our most recent auto product design, which introduced improved segmentation and more attractive pricing and features for our "Robinsons" (i.e., bundled auto and homeowners)
|
•
|
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 common shares.
In accordance with our financial policies, we continued our practice of repurchasing our common shares. As of
March 31, 2016
, we had 10.4 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)
|
2016
|
|
|
2015
|
|
||
Total number of shares purchased
|
2.3
|
|
|
2.5
|
|
||
Total cost
|
$
|
70.3
|
|
|
$
|
65.9
|
|
Average price paid per share
|
$
|
30.94
|
|
|
$
|
26.80
|
|
•
|
Dividends.
As part of our capital management activities, in February
2016
and
2015
, we paid annual variable dividends of $0.8882 per share and $0.6862 per share, respectively, which were each declared in December of the prior year.
|
|
Three Months Ended March 31,
|
||||||||
($ in millions)
|
2016
|
|
|
2015
|
|
|
%
Change
|
||
NET PREMIUMS WRITTEN
|
|
|
|
|
|
||||
Personal Lines
|
|
|
|
|
|
||||
Agency
|
$
|
2,495.6
|
|
|
$
|
2,356.1
|
|
|
6
|
Direct
|
2,490.2
|
|
|
2,179.6
|
|
|
14
|
||
Total Personal Lines
|
4,985.8
|
|
|
4,535.7
|
|
|
10
|
||
Commercial Lines
|
661.5
|
|
|
531.1
|
|
|
25
|
||
Property
|
171.1
|
|
|
NA
|
|
|
NA
|
||
Other indemnity
|
0
|
|
|
0
|
|
|
NM
|
||
Total underwriting operations
|
$
|
5,818.4
|
|
|
$
|
5,066.8
|
|
|
15
|
NET PREMIUMS EARNED
|
|
|
|
|
|
||||
Personal Lines
|
|
|
|
|
|
||||
Agency
|
$
|
2,347.9
|
|
|
$
|
2,244.5
|
|
|
5
|
Direct
|
2,220.7
|
|
|
1,955.4
|
|
|
14
|
||
Total Personal Lines
|
4,568.6
|
|
|
4,199.9
|
|
|
9
|
||
Commercial Lines
|
548.8
|
|
|
466.4
|
|
|
18
|
||
Property
|
200.0
|
|
|
NA
|
|
|
NA
|
||
Other indemnity
|
0
|
|
|
0
|
|
|
NM
|
||
Total underwriting operations
|
$
|
5,317.4
|
|
|
$
|
4,666.3
|
|
|
14
|
NA = We began reporting our Property business as a segment on April 1, 2015, upon acquisition of a controlling interest in ARX.
|
|||||||||
NM = Not Meaningful
|
(thousands)
|
2016
|
|
|
2015
|
|
|
%
Change
|
POLICIES IN FORCE
|
|
|
|
|
|
||
Vehicle businesses:
|
|
|
|
|
|
||
Agency auto
|
4,865.4
|
|
|
4,765.6
|
|
|
2
|
Direct auto
|
5,175.4
|
|
|
4,679.8
|
|
|
11
|
Total auto
|
10,040.8
|
|
|
9,445.4
|
|
|
6
|
Special lines
1
|
4,145.0
|
|
|
4,046.9
|
|
|
2
|
Total Personal Lines
|
14,185.8
|
|
|
13,492.3
|
|
|
5
|
Commercial Lines
|
575.1
|
|
|
522.6
|
|
|
10
|
Property
|
1,078.5
|
|
|
NA
|
|
|
NA
|
|
Growth Over Prior Year
|
||
|
Quarter
|
||
|
2016
|
|
2015
|
WRITTEN PREMIUM PER POLICY
|
|
|
|
Personal Lines—auto
|
4%
|
|
4%
|
Commercial Lines
|
12%
|
|
5%
|
|
Growth Over Prior Year
|
||
|
2016
|
|
2015
|
RETENTION MEASURES
|
|
|
|
Personal Lines - auto
|
|
|
|
Policy life expectancy
|
|
|
|
Trailing 3-months
|
5%
|
|
(7)%
|
Trailing 12-months
|
2%
|
|
(3)%
|
Renewal ratio
|
0.1%
|
|
(0.3)%
|
Commercial Lines - policy life expectancy (trailing 12-months)
|
11%
|
|
4%
|
|
Three Months Ended March 31,
|
||||||||||||
|
2016
|
|
2015
|
||||||||||
|
Underwriting
Profit (Loss)
|
|
Underwriting
Profit (Loss)
|
||||||||||
($ in millions)
|
$
|
|
Margin
|
|
$
|
|
Margin
|
||||||
Personal Lines
|
|
|
|
|
|
|
|
||||||
Agency
|
$
|
171.4
|
|
|
7.3
|
%
|
|
$
|
194.5
|
|
|
8.7
|
%
|
Direct
|
79.5
|
|
|
3.6
|
|
|
68.2
|
|
|
3.5
|
|
||
Total Personal Lines
|
250.9
|
|
|
5.5
|
|
|
262.7
|
|
|
6.3
|
|
||
Commercial Lines
|
61.1
|
|
|
11.1
|
|
|
78.5
|
|
|
16.8
|
|
||
Property
1
|
(24.5
|
)
|
|
(12.2
|
)
|
|
NA
|
|
|
NA
|
|
||
Other indemnity
2
|
(0.7
|
)
|
|
NM
|
|
|
0.4
|
|
|
NM
|
|
||
Total underwriting operations
|
$
|
286.8
|
|
|
5.4
|
%
|
|
$
|
341.6
|
|
|
7.3
|
%
|
|
Three Months Ended March 31,
|
|||||||
Underwriting Performance
1
|
2016
|
|
|
2015
|
|
|
Change
|
|
Personal Lines—Agency
|
|
|
|
|
|
|||
Loss & loss adjustment expense ratio
|
73.2
|
|
|
71.8
|
|
|
1.4
|
pts.
|
Underwriting expense ratio
|
19.5
|
|
|
19.5
|
|
|
0 pts.
|
|
Combined ratio
|
92.7
|
|
|
91.3
|
|
|
1.4
|
pts.
|
Personal Lines—Direct
|
|
|
|
|
|
|||
Loss & loss adjustment expense ratio
|
75.4
|
|
|
75.3
|
|
|
0.1
|
pts.
|
Underwriting expense ratio
|
21.0
|
|
|
21.2
|
|
|
(0.2
|
) pts.
|
Combined ratio
|
96.4
|
|
|
96.5
|
|
|
(0.1
|
) pts.
|
Total Personal Lines
|
|
|
|
|
|
|||
Loss & loss adjustment expense ratio
|
74.3
|
|
|
73.4
|
|
|
0.9
|
pts.
|
Underwriting expense ratio
|
20.2
|
|
|
20.3
|
|
|
(0.1
|
) pts.
|
Combined ratio
|
94.5
|
|
|
93.7
|
|
|
0.8
|
pts.
|
Commercial Lines
|
|
|
|
|
|
|||
Loss & loss adjustment expense ratio
|
66.4
|
|
|
61.0
|
|
|
5.4
|
pts.
|
Underwriting expense ratio
|
22.5
|
|
|
22.2
|
|
|
0.3
|
pts.
|
Combined ratio
|
88.9
|
|
|
83.2
|
|
|
5.7
|
pts.
|
Property
|
|
|
|
|
|
|||
Loss & loss adjustment expense ratio
|
77.9
|
|
|
NA
|
|
|
NA
|
|
Underwriting expense ratio
2
|
34.3
|
|
|
NA
|
|
|
NA
|
|
Combined ratio
2
|
112.2
|
|
|
NA
|
|
|
NA
|
|
Total Underwriting Operations
3
|
|
|
|
|
|
|||
Loss & loss adjustment expense ratio
|
73.6
|
|
|
72.2
|
|
|
1.4
|
pts.
|
Underwriting expense ratio
|
21.0
|
|
|
20.5
|
|
|
0.5
|
pts.
|
Combined ratio
|
94.6
|
|
|
92.7
|
|
|
1.9
|
pts.
|
Accident year loss & loss adjustment expense ratio
4
|
72.5
|
|
|
74.3
|
|
|
(1.8
|
) pts.
|
|
Three Months Ended March 31,
|
||||||
($ in millions)
|
2016
|
|
|
2015
|
|
||
Change in net loss and LAE reserves
|
$
|
181.7
|
|
|
$
|
123.7
|
|
Paid losses and LAE
|
3,731.7
|
|
|
3,244.9
|
|
||
Total incurred losses and LAE
|
$
|
3,913.4
|
|
|
$
|
3,368.6
|
|
|
Three Months Ended March 31,
|
||||||
($ in millions)
|
2016
|
|
2015
|
||||
Catastrophe losses incurred
|
$
|
102.4
|
|
|
$
|
9.4
|
|
Increase to combined ratio
|
1.9
|
pts.
|
|
0.2
|
pts.
|
•
|
Bodily injury decreased about 2%
|
•
|
Auto property coverages increased, with property damage up about 2% and collision up about 7%
|
•
|
Personal injury protection (PIP) increased about 12%. The increase is primarily due to increased severity in Michigan, Florida, and New Jersey
|
•
|
Bodily injury and PIP increased around 1%
|
•
|
Auto property coverages decreased, with property damage down 5% and collision down 7%, primarily due to lower levels of weather-related claims in the midwestern and northeastern states during the first quarter 2016
|
|
Three Months Ended
March 31, |
||||||
(millions)
|
2016
|
|
2015
|
||||
ACTUARIAL ADJUSTMENTS
|
|
|
|
||||
Reserve decrease/(increase)
|
|
|
|
||||
Prior accident years
|
$
|
23.8
|
|
|
$
|
11.1
|
|
Current accident year
|
1.9
|
|
|
(0.7
|
)
|
||
Calendar year actuarial adjustment
|
$
|
25.7
|
|
|
$
|
10.4
|
|
PRIOR ACCIDENT YEARS DEVELOPMENT
|
|
|
|
||||
Favorable/(Unfavorable)
|
|
|
|
||||
Actuarial adjustment
|
$
|
23.8
|
|
|
$
|
11.1
|
|
All other development
|
(84.2
|
)
|
|
86.8
|
|
||
Total development
|
$
|
(60.4
|
)
|
|
$
|
97.9
|
|
(Increase)/decrease to calendar year combined ratio
|
(1.1
|
) pts.
|
|
2.1
|
pts.
|
•
|
Approximately 77% of the unfavorable prior year reserve development was attributable to accident year 2015
|
•
|
Nearly three-fourths of our unfavorable reserve development was in our personal auto product. Our Agency and Direct auto businesses accounted for almost 55% and 20%, respectively, of the total unfavorable reserve development
|
•
|
Our Commercial Lines business made up about 25% of the unfavorable development
|
•
|
In our personal auto and Commercial Lines businesses, we incurred unfavorable IBNR loss reserve development, primarily due to a higher severity and frequency of late reported claims than anticipated for accident year 2015, driven in part by storms in late December 2015, resulting in a greater number of claims being reported in January 2016 than anticipated
|
•
|
The development during the quarter for our Property business was minimal
|
•
|
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
|
|
Growth 2016 vs. 2015 First Quarter
|
|
Net premiums written
|
6
|
%
|
Net premiums earned
|
5
|
%
|
Auto: policies in force
|
2
|
%
|
new applications
|
15
|
%
|
renewal applications
|
(2
|
)%
|
written premium per policy
|
4
|
%
|
Auto: retention measures:
|
|
|
policy life expectancy - trailing 3-months
|
5
|
%
|
trailing 12-months
|
2
|
%
|
renewal ratio
|
0.1
|
%
|
|
Growth 2016 vs. 2015 First Quarter
|
|
Net premiums written
|
14
|
%
|
Net premiums earned
|
14
|
%
|
Auto: policies in force
|
11
|
%
|
new applications
|
17
|
%
|
renewal applications
|
7
|
%
|
written premium per policy
|
4
|
%
|
Auto: retention measures:
|
|
|
policy life expectancy - trailing 3-months
|
6
|
%
|
trailing 12-months
|
3
|
%
|
renewal ratio
|
0.1
|
%
|
|
Growth 2016 vs. 2015 First Quarter
|
|
Net premiums written
|
25
|
%
|
Net premiums earned
|
18
|
%
|
Policies in force
|
10
|
%
|
New applications
|
23
|
%
|
Renewal applications
|
3
|
%
|
Written premium per policy
|
12
|
%
|
Policy life expectancy - trailing 12-months
|
11
|
%
|
|
Three Months
|
||||
|
2016
|
|
|
2015
|
|
Pretax recurring investment book yield (annualized)
|
2.4
|
%
|
|
2.4
|
%
|
Weighted average FTE book yield (annualized)
|
2.7
|
%
|
|
2.6
|
%
|
FTE total return:
|
|
|
|
||
Fixed-income securities
|
1.2
|
%
|
|
1.0
|
%
|
Common stocks
|
1.7
|
%
|
|
1.7
|
%
|
Total portfolio
|
1.2
|
%
|
|
1.1
|
%
|
|
Three Months
|
||||
|
2016
|
|
|
2015
|
|
Fixed-income securities:
|
|
|
|
||
U.S. Treasury Notes
|
0.2
|
%
|
|
(0.1
|
)%
|
Municipal bonds
|
1.8
|
%
|
|
1.2
|
%
|
Corporate bonds
|
2.8
|
%
|
|
2.1
|
%
|
Commercial mortgage-backed securities
|
1.7
|
%
|
|
1.7
|
%
|
Collateralized mortgage obligations
|
0.3
|
%
|
|
0.6
|
%
|
Asset-backed securities
|
0.3
|
%
|
|
0.4
|
%
|
Agency residential pass-through obligations
|
1.9
|
%
|
|
NA
|
|
Agency debt
|
0.6
|
%
|
|
NA
|
|
Preferred stocks
|
0.2
|
%
|
|
2.2
|
%
|
Common stock portfolios:
|
|
|
|
||
Indexed
|
1.3
|
%
|
|
1.9
|
%
|
Actively managed
|
8.9
|
%
|
|
0.5
|
%
|
($ in millions)
|
Fair
Value
|
|
|
% of
Total
Portfolio
|
|
|
Duration
(years)
|
|
|
Rating
1
|
|
March 31, 2016
|
|
|
|
|
|
|
|
||||
Fixed maturities
|
$
|
13,966.4
|
|
|
65.5
|
%
|
|
2.2
|
|
|
A+
|
Nonredeemable preferred stocks
|
832.2
|
|
|
3.9
|
|
|
2.4
|
|
|
BBB-
|
|
Short-term investments
|
3,826.9
|
|
|
17.9
|
|
|
0.1
|
|
|
AA+
|
|
Total fixed-income securities
|
18,625.5
|
|
|
87.3
|
|
|
1.8
|
|
|
A+
|
|
Common equities
|
2,705.0
|
|
|
12.7
|
|
|
na
|
|
|
na
|
|
Total portfolio
2,3
|
$
|
21,330.5
|
|
|
100.0
|
%
|
|
1.8
|
|
|
A+
|
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+
|
December 31, 2015
|
|
|
|
|
|
|
|
||||
Fixed maturities
|
$
|
15,332.2
|
|
|
73.2
|
%
|
|
2.1
|
|
|
A+
|
Nonredeemable preferred stocks
|
782.6
|
|
|
3.7
|
|
|
2.6
|
|
|
BBB-
|
|
Short-term investments
|
2,172.0
|
|
|
10.4
|
|
|
<0.1
|
|
|
A+
|
|
Total fixed-income securities
|
18,286.8
|
|
|
87.3
|
|
|
1.9
|
|
|
A+
|
|
Common equities
|
2,650.5
|
|
|
12.7
|
|
|
na
|
|
|
na
|
|
Total portfolio
2,3
|
$
|
20,937.3
|
|
|
100.0
|
%
|
|
1.9
|
|
|
A+
|
na = not applicable
|
|
|
|
|
|
|
|
($ in millions)
|
Fair
Value
|
|
|
% of
Total
Portfolio
|
|
|
March 31, 2016
|
|
|
|
|||
Group I securities:
|
|
|
|
|||
Non-investment-grade fixed maturities
|
$
|
472.6
|
|
|
2.2
|
%
|
Redeemable preferred stocks
1
|
153.1
|
|
|
0.7
|
|
|
Nonredeemable preferred stocks
|
832.2
|
|
|
3.9
|
|
|
Common equities
|
2,705.0
|
|
|
12.7
|
|
|
Total Group I securities
|
4,162.9
|
|
|
19.5
|
|
|
Group II securities:
|
|
|
|
|||
Other fixed maturities
2
|
13,340.7
|
|
|
62.6
|
|
|
Short-term investments
|
3,826.9
|
|
|
17.9
|
|
|
Total Group II securities
|
17,167.6
|
|
|
80.5
|
|
|
Total portfolio
|
$
|
21,330.5
|
|
|
100.0
|
%
|
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
|
%
|
December 31, 2015
|
|
|
|
|||
Group I securities:
|
|
|
|
|||
Non-investment-grade fixed maturities
|
$
|
611.7
|
|
|
2.9
|
%
|
Redeemable preferred stocks
1
|
155.1
|
|
|
0.7
|
|
|
Nonredeemable preferred stocks
|
782.6
|
|
|
3.7
|
|
|
Common equities
|
2,650.5
|
|
|
12.7
|
|
|
Total Group I securities
|
4,199.9
|
|
|
20.0
|
|
|
Group II securities:
|
|
|
|
|||
Other fixed maturities
2
|
14,565.4
|
|
|
69.6
|
|
|
Short-term investments
|
2,172.0
|
|
|
10.4
|
|
|
Total Group II securities
|
16,737.4
|
|
|
80.0
|
|
|
Total portfolio
|
$
|
20,937.3
|
|
|
100.0
|
%
|
|
|
|
|
Total Gross
Unrealized
Losses
|
|
|
Decline of Investment Value
|
||||||||||||||||
(millions)
|
Fair
Value
|
|
|
>15%
|
|
|
>25%
|
|
|
>35%
|
|
|
>45%
|
|
|||||||||
Fixed Income:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized loss for less than 12 months
|
$
|
2,365.9
|
|
|
$
|
28.7
|
|
|
$
|
10.7
|
|
|
$
|
10.7
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Unrealized loss for 12 months or greater
|
2,907.1
|
|
|
103.7
|
|
|
32.6
|
|
|
19.9
|
|
|
0
|
|
|
0
|
|
||||||
Total
|
$
|
5,273.0
|
|
|
$
|
132.4
|
|
|
$
|
43.3
|
|
|
$
|
30.6
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Common Equity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized loss for less than 12 months
|
$
|
84.3
|
|
|
$
|
5.5
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Unrealized loss for 12 months or greater
|
3.1
|
|
|
0.2
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
Total
|
$
|
87.4
|
|
|
$
|
5.7
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
March 31, 2016
|
|
March 31, 2015
|
|
December 31, 2015
|
|||||||||||||||
($ in millions)
|
Fair
Value
|
|
|
% of
Total
|
|
|
Fair
Value
|
|
|
% of
Total
|
|
|
Fair
Value
|
|
|
% of
Total
|
|
|||
Investment-grade fixed maturities:
1
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Short/intermediate term
|
$
|
16,651.1
|
|
|
93.6
|
%
|
|
$
|
14,817.3
|
|
|
89.9
|
%
|
|
$
|
16,136.0
|
|
|
92.2
|
%
|
Long term
|
49.3
|
|
|
0.3
|
|
|
52.1
|
|
|
0.3
|
|
|
109.3
|
|
|
0.6
|
|
|||
Non-investment-grade fixed maturities:
1,2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Short/intermediate term
|
1,062.0
|
|
|
5.9
|
|
|
1,590.4
|
|
|
9.6
|
|
|
1,246.3
|
|
|
7.1
|
|
|||
Long term
|
30.9
|
|
|
0.2
|
|
|
27.0
|
|
|
0.2
|
|
|
12.6
|
|
|
0.1
|
|
|||
Total
|
$
|
17,793.3
|
|
|
100.0
|
%
|
|
$
|
16,486.8
|
|
|
100.0
|
%
|
|
$
|
17,504.2
|
|
|
100.0
|
%
|
Duration Distribution
|
March 31, 2016
|
|
|
March 31, 2015
|
|
|
December 31, 2015
|
|
1 year
|
24.7
|
%
|
|
36.1
|
%
|
|
28.4
|
%
|
2 years
|
15.9
|
|
|
16.8
|
|
|
15.6
|
|
3 years
|
21.5
|
|
|
14.6
|
|
|
18.1
|
|
5 years
|
30.8
|
|
|
25.5
|
|
|
27.7
|
|
10 years
|
7.5
|
|
|
7.0
|
|
|
10.4
|
|
20 years
|
(0.1
|
)
|
|
NA
|
|
|
0.1
|
|
30 years
|
(0.3
|
)
|
|
NA
|
|
|
(0.3
|
)
|
Total fixed-income portfolio
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Rating
|
March 31, 2016
|
|
|
March 31, 2015
|
|
|
December 31, 2015
|
|
AAA
|
39.6
|
%
|
|
46.6
|
%
|
|
37.2
|
%
|
AA
|
17.3
|
|
|
12.8
|
|
|
14.2
|
|
A
|
13.1
|
|
|
10.5
|
|
|
15.3
|
|
BBB
|
22.4
|
|
|
18.1
|
|
|
24.7
|
|
Non-investment grade/non-rated
1
|
7.6
|
|
|
12.0
|
|
|
8.6
|
|
Total fixed-income portfolio
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
($ in millions)
|
Fair
Value
|
|
|
Duration
(years)
|
|
|
U.S. Treasury Notes
|
|
|
|
|||
Less than two years
|
$
|
712.7
|
|
|
0.4
|
|
Two to five years
|
374.5
|
|
|
4.7
|
|
|
Five to ten years
|
300.8
|
|
|
7.1
|
|
|
Total U.S. Treasury Notes
|
1,388.0
|
|
|
3.0
|
|
|
Interest Rate Swaps
|
|
|
|
|||
Five to ten years ($750 notional value)
|
0
|
|
|
(7.3
|
)
|
|
Total U.S. government obligations
|
$
|
1,388.0
|
|
|
<0.1
|
|
($ in millions)
|
Fair
Value
|
|
|
Net Unrealized
Gains (Losses)
|
|
|
% of Asset-
Backed
Securities
|
|
|
Duration
(years)
|
|
|
Rating
(at period end)
|
||
March 31, 2016
|
|
|
|
|
|
|
|
|
|
||||||
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||
Prime collateralized mortgage obligations
|
$
|
722.3
|
|
|
$
|
(4.7
|
)
|
|
12.1
|
%
|
|
0.8
|
|
|
A
|
Alt-A collateralized mortgage obligations
1
|
240.8
|
|
|
(1.9
|
)
|
|
4.0
|
|
|
1.1
|
|
|
BBB
|
||
Collateralized mortgage obligations
|
963.1
|
|
|
(6.6
|
)
|
|
16.1
|
|
|
0.9
|
|
|
A-
|
||
Home equity (sub-prime bonds)
|
838.4
|
|
|
(2.4
|
)
|
|
14.0
|
|
|
<0.1
|
|
|
BBB-
|
||
Residential mortgage-backed securities
|
1,801.5
|
|
|
(9.0
|
)
|
|
30.1
|
|
|
0.4
|
|
|
BBB+
|
||
Agency residential pass-through obligations
|
46.6
|
|
|
0.1
|
|
|
0.8
|
|
|
3.8
|
|
|
AAA
|
||
Commercial mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||
Commercial mortgage-backed securities
|
2,258.6
|
|
|
5.6
|
|
|
37.8
|
|
|
3.1
|
|
|
A
|
||
Commercial mortgage-backed securities: interest only
|
167.6
|
|
|
1.9
|
|
|
2.8
|
|
|
2.5
|
|
|
AAA-
|
||
Commercial mortgage-backed securities
|
2,426.2
|
|
|
7.5
|
|
|
40.6
|
|
|
3.1
|
|
|
A+
|
||
Other asset-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||
Automobile
|
938.9
|
|
|
0.1
|
|
|
15.7
|
|
|
1.0
|
|
|
AAA-
|
||
Credit card
|
86.0
|
|
|
(0.1
|
)
|
|
1.4
|
|
|
0.5
|
|
|
AAA
|
||
Other
2
|
678.8
|
|
|
(2.9
|
)
|
|
11.4
|
|
|
0.7
|
|
|
AA
|
||
Other asset-backed securities
|
1,703.7
|
|
|
(2.9
|
)
|
|
28.5
|
|
|
0.8
|
|
|
AAA-
|
||
Total asset-backed securities
|
$
|
5,978.0
|
|
|
$
|
(4.3
|
)
|
|
100.0
|
%
|
|
1.6
|
|
|
A+
|
($ 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
1
|
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
2
|
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)
|
||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
||||||
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||
Prime collateralized mortgage obligations
|
$
|
583.2
|
|
|
$
|
(3.1
|
)
|
|
9.4
|
%
|
|
0.9
|
|
|
A-
|
Alt-A collateralized mortgage obligations
1
|
269.2
|
|
|
0.2
|
|
|
4.3
|
|
|
1.2
|
|
|
BBB
|
||
Collateralized mortgage obligations
|
852.4
|
|
|
(2.9
|
)
|
|
13.7
|
|
|
1.0
|
|
|
A-
|
||
Home equity (sub-prime bonds)
|
874.3
|
|
|
4.4
|
|
|
14.0
|
|
|
<0.1
|
|
|
BBB-
|
||
Residential mortgage-backed securities
|
1,726.7
|
|
|
1.5
|
|
|
27.7
|
|
|
0.4
|
|
|
BBB
|
||
Agency residential pass-through obligations
|
89.3
|
|
|
(1.0
|
)
|
|
1.4
|
|
|
4.8
|
|
|
AAA
|
||
Commercial mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||
Commercial mortgage-backed securities
|
2,476.7
|
|
|
(13.8
|
)
|
|
39.7
|
|
|
3.4
|
|
|
A+
|
||
Commercial mortgage-backed securities: interest only
|
176.5
|
|
|
1.3
|
|
|
2.9
|
|
|
2.6
|
|
|
AAA-
|
||
Commercial mortgage-backed securities
|
2,653.2
|
|
|
(12.5
|
)
|
|
42.6
|
|
|
3.3
|
|
|
A+
|
||
Other asset-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||
Automobile
|
925.4
|
|
|
(2.2
|
)
|
|
14.8
|
|
|
1.0
|
|
|
AAA-
|
||
Credit card
|
140.0
|
|
|
(0.2
|
)
|
|
2.2
|
|
|
0.5
|
|
|
AAA
|
||
Other
2
|
702.5
|
|
|
(1.3
|
)
|
|
11.3
|
|
|
0.7
|
|
|
AA+
|
||
Other asset-backed securities
|
1,767.9
|
|
|
(3.7
|
)
|
|
28.3
|
|
|
0.8
|
|
|
AAA-
|
||
Total asset-backed securities
|
$
|
6,237.1
|
|
|
$
|
(15.7
|
)
|
|
100.0
|
%
|
|
1.8
|
|
|
A+
|
Collateralized Mortgage Obligations (at March 31, 2016)
|
||||||||||||||||||
($ in millions)
Rating 1 |
Non-Agency Prime
|
|
Alt-A
|
|
Government/GSE
2
|
|
|
Total
|
|
% of Total
|
|
|||||||
AAA
|
$
|
73.6
|
|
|
$
|
22.7
|
|
|
$
|
102.4
|
|
|
$
|
198.7
|
|
|
20.6
|
%
|
AA
|
162.0
|
|
|
43.4
|
|
|
1.4
|
|
|
206.8
|
|
|
21.5
|
|
||||
A
|
84.0
|
|
|
13.9
|
|
|
38.7
|
|
|
136.6
|
|
|
14.2
|
|
||||
BBB
|
42.4
|
|
|
76.8
|
|
|
135.7
|
|
|
254.9
|
|
|
26.5
|
|
||||
Non-investment grade
|
82.1
|
|
|
84.0
|
|
|
0
|
|
|
166.1
|
|
|
17.2
|
|
||||
Total
|
$
|
444.1
|
|
|
$
|
240.8
|
|
|
$
|
278.2
|
|
|
$
|
963.1
|
|
|
100.0
|
%
|
Increase (decrease) in value
|
(1.2
|
)%
|
|
(0.8
|
)%
|
|
0.1
|
%
|
|
(0.7
|
)%
|
|
|
Commercial Mortgage-Backed Securities (at March 31, 2016)
1
|
||||||||||||||||||||||||||
($ in millions)
Category
|
AAA
|
|
AA
|
|
A
|
|
BBB
|
|
Non-Investment
Grade
|
|
|
Total
|
|
% of Total
|
|
|||||||||||
Multi-borrower
|
$
|
272.1
|
|
|
$
|
23.9
|
|
|
$
|
14.3
|
|
|
$
|
11.0
|
|
|
$
|
9.5
|
|
|
$
|
330.8
|
|
|
13.6
|
%
|
Single-borrower
|
356.1
|
|
|
374.0
|
|
|
405.1
|
|
|
749.6
|
|
|
43.0
|
|
|
1,927.8
|
|
|
79.5
|
|
||||||
Total CMBS bonds
|
628.2
|
|
|
397.9
|
|
|
419.4
|
|
|
760.6
|
|
|
52.5
|
|
|
2,258.6
|
|
|
93.1
|
|
||||||
IO
|
165.5
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
2.1
|
|
|
167.6
|
|
|
6.9
|
|
||||||
Total fair value
|
$
|
793.7
|
|
|
$
|
397.9
|
|
|
$
|
419.4
|
|
|
$
|
760.6
|
|
|
$
|
54.6
|
|
|
$
|
2,426.2
|
|
|
100.0
|
%
|
% of Total fair value
|
32.7
|
%
|
|
16.4
|
%
|
|
17.3
|
%
|
|
31.3
|
%
|
|
2.3
|
%
|
|
100.0
|
%
|
|
|
Corporate Securities (at March 31, 2016)
|
|||||||||||||||||||||||
(millions)
Sector
|
AAA
|
|
|
AA
|
|
|
A
|
|
|
BBB
|
|
|
Non-Investment
Grade/Non-Rated
|
|
|
Total
|
|
||||||
Consumer
|
$
|
0
|
|
|
$
|
0.8
|
|
|
$
|
318.1
|
|
|
$
|
896.1
|
|
|
$
|
111.1
|
|
|
$
|
1,326.1
|
|
Industrial
|
0
|
|
|
0
|
|
|
92.0
|
|
|
623.9
|
|
|
103.9
|
|
|
819.8
|
|
||||||
Communications
|
0
|
|
|
0
|
|
|
49.9
|
|
|
343.8
|
|
|
68.8
|
|
|
462.5
|
|
||||||
Financial Services
|
51.1
|
|
|
67.9
|
|
|
279.4
|
|
|
344.6
|
|
|
106.7
|
|
|
849.7
|
|
||||||
Agency
|
0.8
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0.8
|
|
||||||
Technology
|
5.6
|
|
|
13.4
|
|
|
32.6
|
|
|
42.4
|
|
|
0
|
|
|
94.0
|
|
||||||
Basic Materials
|
0
|
|
|
0
|
|
|
0
|
|
|
48.6
|
|
|
0
|
|
|
48.6
|
|
||||||
Energy
|
34.0
|
|
|
39.4
|
|
|
107.3
|
|
|
57.8
|
|
|
0
|
|
|
238.5
|
|
||||||
Total
|
$
|
91.5
|
|
|
$
|
121.5
|
|
|
$
|
879.3
|
|
|
$
|
2,357.2
|
|
|
$
|
390.5
|
|
|
$
|
3,840.0
|
|
($ in millions)
|
March 31, 2016
|
|
March 31, 2015
|
|
December 31, 2015
|
|||||||||||||||
Indexed common stocks
|
$
|
2,579.2
|
|
|
95.3
|
%
|
|
$
|
2,229.9
|
|
|
88.6
|
%
|
|
$
|
2,532.3
|
|
|
95.5
|
%
|
Managed common stocks
|
125.5
|
|
|
4.6
|
|
|
285.5
|
|
|
11.3
|
|
|
117.9
|
|
|
4.4
|
|
|||
Total common stocks
|
2,704.7
|
|
|
99.9
|
|
|
2,515.4
|
|
|
99.9
|
|
|
2,650.2
|
|
|
99.9
|
|
|||
Other risk investments
|
0.3
|
|
|
0.1
|
|
|
0.3
|
|
|
0.1
|
|
|
0.3
|
|
|
0.1
|
|
|||
Total common equities
|
$
|
2,705.0
|
|
|
100.0
|
%
|
|
$
|
2,515.7
|
|
|
100.0
|
%
|
|
$
|
2,650.5
|
|
|
100.0
|
%
|
ISSUER PURCHASES OF EQUITY SECURITIES
|
||||||||||||
2016
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
|
798,675
|
|
|
$
|
30.97
|
|
|
63,141,277
|
|
|
11,858,723
|
|
February
|
1,422,277
|
|
|
30.87
|
|
|
64,563,554
|
|
|
10,436,446
|
|
|
March
|
51,968
|
|
|
32.51
|
|
|
64,615,522
|
|
|
10,384,478
|
|
|
Total
|
2,272,920
|
|
|
$
|
30.94
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Time-Based Award
|
|
Performance-Based Award
2
|
|||||||
Name and Principal Position
|
Units
|
Value
1
|
|
Units
|
Value
1
|
|||||
Glenn M. Renwick
|
—
|
|
$
|
—
|
|
|
217,644
3
|
|
7,500,012
|
|
Chairman, President, and Chief Executive Officer
|
|
|
|
|
|
|||||
John P. Sauerland
|
15,963
|
|
550,085
|
|
|
31,922
3
|
|
1,100,032
|
|
|
Vice President and Chief Financial Officer
|
|
|
|
|
|
|||||
Susan Patricia Griffith
|
15,963
|
|
550,085
|
|
|
31,922
|
1,100,032
|
|
||
Vice President and Personal Lines Chief Operating Officer
|
|
|
|
|
|
|||||
William M. Cody
|
13,494
|
|
465,003
|
|
|
16,868
3
|
581,271
|
|
||
Chief Investment Officer
|
|
|
|
|
|
|||||
John F. Auer
4
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
President, Chief Executive Officer, and Treasurer of ARX Holding Corp.
|
|
|
|
|
|
|
|
|
|
THE PROGRESSIVE CORPORATION
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
Date:
|
May 5, 2016
|
|
|
By: /s/ John P. Sauerland
|
|
|
|
|
John P. Sauerland
|
|
|
|
|
Vice President and 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
|
|
|
|
|
|
|
|
10
|
|
10.1
|
|
Form of Restricted Stock Unit Award Agreement for Time-Based Awards under The Progressive Corporation 2015 Equity Incentive Plan (for 2016)
|
|
Filed herewith
|
|
|
|
|
|
|
|
10
|
|
10.2
|
|
Form of Restricted Stock Unit Award Agreement for Performance-Based Awards (Performance versus Market) under The Progressive Corporation 2015 Equity Incentive Plan (for 2016)
|
|
Filed herewith
|
|
|
|
|
|
|
|
10
|
|
10.3
|
|
Form of Restricted Stock Unit Award Agreement for Performance-Based Awards (Investment Results) under The Progressive Corporation 2015 Equity Incentive Plan (for 2016)
|
|
Filed herewith
|
|
|
|
|
|
|
|
10
|
|
10.4
|
|
Form of Restricted Stock Unit Award Agreement for Performance-Based Awards (Robinsons) under The Progressive Corporation 2015 Equity Incentive Plan (for 2016)
|
|
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
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
(a)
|
Subject to the terms and conditions of the Plan and this Agreement, including the provisions of Paragraph 8 below, Participant’s rights in and to the Units shall vest, if at all, according to the following schedule:
|
(b)
|
Notwithstanding Paragraph 4(a) above:
|
i.
|
If Participant’s Qualified Retirement Eligibility Date occurred prior to the Grant Date, 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 as a result of a Qualified Retirement prior to the Specified Date, then on Participant’s Qualified Retirement Date, fifty (50%) of each Award Installment shall vest and the remaining fifty percent (50%) of each Award Installment shall terminate automatically;
|
B.
|
If Participant’s employment terminates for any reason other than a Qualified Retirement prior to the Specified Date, the provisions of Section 8 below shall apply to such termination; or
|
C.
|
If Participant’s employment does not terminate 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, 2016 if the Grant Date is in March 2016; August 1, 2016 if the Grant Date is in July 2016; November 1, 2016 if the Grant Date is in October 2016; and February 1, 2017 if the Grant Date is in January 2017; provided, however, in each case, that if no 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.
|
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
|
i.
|
The number of personal auto policies in force included in the Company’s Agency auto and Direct auto businesses that are a part of the Company’s Personal Lines segment (“Personal Lines Auto”) and that are combined (or “bundled”) with at least one other Progressive Personal Property Insurance Product (as defined below) in force (whether issued at the same time or at different times) will be determined on the last business day of the Performance Period (the “Robinsons Bundled Policies”). For purposes of determining the Robinsons Bundled Policies:
|
1.
|
if a policyholder has more than one personal auto policy in force, then all Progressive Personal Property Insurance Products attributable to that policyholder shall be deemed to be combined with only one of such personal auto policies in force;
|
2.
|
all personal auto policies in force held by a policyholder and/or a policyholder’s spouse (including any policy on which any child(ren) of the policyholder and/or spouse is included) shall be treated as one policy in force; and
|
3.
|
“Progressive Personal Property Insurance Product” shall mean any of the following personal insurance products: any personal homeowners, condominium owners or manufactured home owners insurance policy obtained by a policyholder and either underwritten by a Subsidiary or Affiliate of the Company or underwritten by an unaffiliated third party through a bundling program offered by the Company to its customers.
|
i.
|
If the number of Robinsons Bundled Policies is at least seven hundred fifty thousand (750,000), then the applicable calculation required by the following table will determine the number of Restricted Stock Units vesting:
|
Number of Robinsons Bundled Policies
|
Determination of the Number of Units Vesting
|
If at least 1,250,000
|
Target Award Units x 1.5 (i.e., the Maximum Award Units)
|
If more than 1,000,000 but less than 1,250,000
|
Target Award Units x (1 + ((Number of Robinsons Bundled Policies - 1,000,000) x (0.5/250,000)))
For example, if the number of Robinsons Bundled Policies is 1,100,000, then the Number of Units that will vest will be:
Target Award Units x (1+((1,100,000 - 1,000,000) x (0.5/250,000))) or 1.2
Target Award Units x 1.2
|
If exactly 1,000,000
|
Target Award Units
|
If more than 750,000 but less than 1,000,000
|
Target Award Units x (0.85 + ((Number of Robinsons Bundled Policies - 750,000) x (0.15/250,000)))
For example, if the number of Robinsons Bundled Policies is 800,000, then the Number of Units that will vest will be:
Target Award Units x (0.85 + ((800,000 - 750,000) x (0.15/250,000))) or
Target Award Units x 0.88
|
If exactly 750,000
|
Target Award Units x 0.85
|
iii.
|
If the number of Robinsons Bundled Policies is not at least seven hundred fifty thousand (750,000), none of the Award shall vest, and the Award shall be forfeited in its entirety.
|
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.
|