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ý
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Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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¨
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Ohio
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34-0963169
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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|
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6300 Wilson Mills Road, Mayfield Village, Ohio
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44143
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Three Months
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Six Months
|
||||||||||||||||
Periods Ended June 30,
|
2017
|
|
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2016
|
|
|
%
Change |
|
2017
|
|
|
2016
|
|
|
%
Change |
||||
(millions—except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net premiums earned
|
$
|
6,313.3
|
|
|
$
|
5,561.8
|
|
|
14
|
|
$
|
12,340.0
|
|
|
$
|
10,879.2
|
|
|
13
|
Investment income
|
138.8
|
|
|
114.6
|
|
|
21
|
|
268.0
|
|
|
233.4
|
|
|
15
|
||||
Net realized gains (losses) on securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net impairment losses recognized in earnings
|
(13.8
|
)
|
|
(0.2
|
)
|
|
NM
|
|
(14.8
|
)
|
|
(0.2
|
)
|
|
NM
|
||||
Net realized gains (losses) on securities
|
45.9
|
|
|
32.5
|
|
|
41
|
|
98.8
|
|
|
49.9
|
|
|
98
|
||||
Total net realized gains (losses) on securities
|
32.1
|
|
|
32.3
|
|
|
(1)
|
|
84.0
|
|
|
49.7
|
|
|
69
|
||||
Fees and other revenues
|
88.8
|
|
|
82.5
|
|
|
8
|
|
174.0
|
|
|
161.4
|
|
|
8
|
||||
Service revenues
|
32.7
|
|
|
26.5
|
|
|
23
|
|
61.2
|
|
|
51.5
|
|
|
19
|
||||
Gains on extinguishment of debt
|
0
|
|
|
1.6
|
|
|
(100)
|
|
0.2
|
|
|
1.6
|
|
|
(88)
|
||||
Total revenues
|
6,605.7
|
|
|
5,819.3
|
|
|
14
|
|
12,927.4
|
|
|
11,376.8
|
|
|
14
|
||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Losses and loss adjustment expenses
|
4,614.9
|
|
|
4,243.0
|
|
|
9
|
|
8,878.3
|
|
|
8,156.4
|
|
|
9
|
||||
Policy acquisition costs
|
514.2
|
|
|
458.9
|
|
|
12
|
|
1,017.1
|
|
|
899.2
|
|
|
13
|
||||
Other underwriting expenses
|
845.0
|
|
|
766.8
|
|
|
10
|
|
1,690.6
|
|
|
1,522.6
|
|
|
11
|
||||
Investment expenses
|
6.6
|
|
|
5.3
|
|
|
25
|
|
12.2
|
|
|
10.1
|
|
|
21
|
||||
Service expenses
|
27.0
|
|
|
23.7
|
|
|
14
|
|
52.9
|
|
|
45.3
|
|
|
17
|
||||
Interest expense
|
43.4
|
|
|
34.3
|
|
|
27
|
|
80.2
|
|
|
68.5
|
|
|
17
|
||||
Total expenses
|
6,051.1
|
|
|
5,532.0
|
|
|
9
|
|
11,731.3
|
|
|
10,702.1
|
|
|
10
|
||||
Net Income
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income before income taxes
|
554.6
|
|
|
287.3
|
|
|
93
|
|
1,196.1
|
|
|
674.7
|
|
|
77
|
||||
Provision for income taxes
|
181.9
|
|
|
92.4
|
|
|
97
|
|
393.1
|
|
|
221.1
|
|
|
78
|
||||
Net income
|
372.7
|
|
|
194.9
|
|
|
91
|
|
803.0
|
|
|
453.6
|
|
|
77
|
||||
Net (income) loss attributable to noncontrolling interest (NCI)
|
(5.1
|
)
|
|
(4.0
|
)
|
|
28
|
|
(11.1
|
)
|
|
(4.5
|
)
|
|
147
|
||||
Net income attributable to Progressive
|
$
|
367.6
|
|
|
$
|
190.9
|
|
|
93
|
|
$
|
791.9
|
|
|
$
|
449.1
|
|
|
76
|
Other Comprehensive Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Changes in:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total net unrealized gains (losses) on securities
|
$
|
92.6
|
|
|
$
|
91.6
|
|
|
1
|
|
$
|
225.0
|
|
|
$
|
161.1
|
|
|
40
|
Net unrealized losses on forecasted transactions
|
(8.0
|
)
|
|
(0.3
|
)
|
|
NM
|
|
(5.7
|
)
|
|
(0.6
|
)
|
|
NM
|
||||
Foreign currency translation adjustment
|
(0.1
|
)
|
|
(0.1
|
)
|
|
0
|
|
0.2
|
|
|
0.4
|
|
|
(50)
|
||||
Other comprehensive income
|
84.5
|
|
|
91.2
|
|
|
(7)
|
|
219.5
|
|
|
160.9
|
|
|
36
|
||||
Other comprehensive (income) loss attributable to NCI
|
(1.3
|
)
|
|
(1.4
|
)
|
|
(7)
|
|
(2.2
|
)
|
|
(3.5
|
)
|
|
(37)
|
||||
Comprehensive income attributable to Progressive
|
$
|
450.8
|
|
|
$
|
280.7
|
|
|
61
|
|
$
|
1,009.2
|
|
|
$
|
606.5
|
|
|
66
|
Computation of Per Share Earnings Attributable to Progressive
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Average shares outstanding - Basic
|
580.5
|
|
|
582.4
|
|
|
0
|
|
580.4
|
|
|
582.8
|
|
|
0
|
||||
Net effect of dilutive stock-based compensation
|
3.3
|
|
|
2.7
|
|
|
22
|
|
3.1
|
|
|
2.5
|
|
|
24
|
||||
Total average equivalent shares - Diluted
|
583.8
|
|
|
585.1
|
|
|
0
|
|
583.5
|
|
|
585.3
|
|
|
0
|
||||
Basic: Earnings per share
|
$
|
0.63
|
|
|
$
|
0.33
|
|
|
93
|
|
$
|
1.36
|
|
|
$
|
0.77
|
|
|
77
|
Diluted: Earnings per share
|
$
|
0.63
|
|
|
$
|
0.33
|
|
|
93
|
|
$
|
1.36
|
|
|
$
|
0.77
|
|
|
77
|
Dividends declared per share
1
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
June 30,
|
|
December 31,
2016 |
||||||||
(millions)
|
2017
|
|
|
2016
|
|
|
|||||
Assets
|
|
|
|
|
|
||||||
Investments - Available-for-sale, at fair value:
|
|
|
|
|
|
||||||
Fixed maturities (amortized cost: $18,311.7, $13,409.6, and $16,287.1)
|
$
|
18,388.1
|
|
|
$
|
13,589.5
|
|
|
$
|
16,243.8
|
|
Equity securities:
|
|
|
|
|
|
||||||
Nonredeemable preferred stocks (cost: $666.0, $745.5, and $734.2)
|
783.1
|
|
|
858.5
|
|
|
853.5
|
|
|||
Common equities (cost: $1,472.3, $1,558.6, and $1,437.5)
|
3,077.5
|
|
|
2,765.4
|
|
|
2,812.4
|
|
|||
Short-term investments (amortized cost: $3,729.7, $5,166.4, and $3,572.9)
|
3,729.7
|
|
|
5,166.4
|
|
|
3,572.9
|
|
|||
Total investments
|
25,978.4
|
|
|
22,379.8
|
|
|
23,482.6
|
|
|||
Cash
|
161.0
|
|
|
134.7
|
|
|
211.5
|
|
|||
Restricted cash
1
|
0.8
|
|
|
0
|
|
|
14.9
|
|
|||
Accrued investment income
|
112.1
|
|
|
93.9
|
|
|
103.9
|
|
|||
Premiums receivable, net of allowance for doubtful accounts of $175.8, $159.1, and $186.8
|
5,091.3
|
|
|
4,522.2
|
|
|
4,509.2
|
|
|||
Reinsurance recoverables, including $79.2, $73.8, and $83.8 on paid losses and loss adjustment expenses
|
2,027.1
|
|
|
1,669.7
|
|
|
1,884.8
|
|
|||
Prepaid reinsurance premiums
|
212.6
|
|
|
178.0
|
|
|
170.5
|
|
|||
Deferred acquisition costs
|
727.2
|
|
|
645.2
|
|
|
651.2
|
|
|||
Property and equipment, net of accumulated depreciation of $894.7, $824.0, and $845.8
|
1,152.1
|
|
|
1,083.7
|
|
|
1,177.1
|
|
|||
Goodwill
|
452.7
|
|
|
449.4
|
|
|
449.4
|
|
|||
Intangible assets, net of accumulated amortization of $140.5, $78.5, and $109.5
|
401.8
|
|
|
463.8
|
|
|
432.8
|
|
|||
Other assets
|
372.7
|
|
|
337.8
|
|
|
339.6
|
|
|||
Total assets
|
$
|
36,689.8
|
|
|
$
|
31,958.2
|
|
|
$
|
33,427.5
|
|
Liabilities
|
|
|
|
|
|
||||||
Unearned premiums
|
$
|
8,407.7
|
|
|
$
|
7,470.1
|
|
|
$
|
7,468.3
|
|
Loss and loss adjustment expense reserves
|
12,060.4
|
|
|
10,674.8
|
|
|
11,368.0
|
|
|||
Net deferred income taxes
|
191.8
|
|
|
140.7
|
|
|
111.3
|
|
|||
Dividends payable
|
0
|
|
|
0
|
|
|
395.4
|
|
|||
Accounts payable, accrued expenses, and other liabilities
|
3,153.2
|
|
|
2,706.2
|
|
|
2,495.5
|
|
|||
Debt
2
|
3,383.4
|
|
|
2,664.1
|
|
|
3,148.2
|
|
|||
Total liabilities
|
27,196.5
|
|
|
23,655.9
|
|
|
24,986.7
|
|
|||
Redeemable noncontrolling interest (NCI)
3
|
501.8
|
|
|
466.8
|
|
|
483.7
|
|
|||
Shareholders
’
Equity
|
|
|
|
|
|
||||||
Common shares, $1.00 par value (authorized 900.0; issued 797.5, including treasury shares of 216.5, 215.6, and 217.6)
|
581.0
|
|
|
581.9
|
|
|
579.9
|
|
|||
Paid-in capital
|
1,351.0
|
|
|
1,264.6
|
|
|
1,303.4
|
|
|||
Retained earnings
|
5,908.8
|
|
|
5,031.2
|
|
|
5,140.4
|
|
|||
Accumulated other comprehensive income:
|
|
|
|
|
|
||||||
Net unrealized gains (losses) on securities
|
1,164.6
|
|
|
970.1
|
|
|
939.6
|
|
|||
Net unrealized losses on forecasted transactions
|
(15.1
|
)
|
|
(8.8
|
)
|
|
(9.4
|
)
|
|||
Foreign currency translation adjustment
|
(0.9
|
)
|
|
(1.1
|
)
|
|
(1.1
|
)
|
|||
Accumulated other comprehensive (income) loss attributable to NCI
|
2.1
|
|
|
(2.4
|
)
|
|
4.3
|
|
|||
Total accumulated other comprehensive income attributable to Progressive
|
1,150.7
|
|
|
957.8
|
|
|
933.4
|
|
|||
Total shareholders’ equity
|
8,991.5
|
|
|
7,835.5
|
|
|
7,957.1
|
|
|||
Total liabilities, redeemable NCI, and shareholders’ equity
|
$
|
36,689.8
|
|
|
$
|
31,958.2
|
|
|
$
|
33,427.5
|
|
Six Months Ended June 30,
|
|
|
|
||||
(millions — except per share amounts)
|
2017
|
|
|
2016
|
|
||
Common Shares, $1.00 Par Value
|
|
|
|
||||
Balance, Beginning of period
|
$
|
579.9
|
|
|
$
|
583.6
|
|
Treasury shares purchased
|
(0.7
|
)
|
|
(3.6
|
)
|
||
Net restricted equity awards issued/vested
|
1.8
|
|
|
1.9
|
|
||
Balance, End of period
|
$
|
581.0
|
|
|
$
|
581.9
|
|
Paid-In Capital
|
|
|
|
||||
Balance, Beginning of period
|
$
|
1,303.4
|
|
|
$
|
1,218.8
|
|
Tax benefit from vesting of equity-based compensation
|
0
|
|
|
6.7
|
|
||
Treasury shares purchased
|
(1.5
|
)
|
|
(7.7
|
)
|
||
Net restricted equity awards issued/vested
|
(1.8
|
)
|
|
(1.9
|
)
|
||
Amortization of equity-based compensation
|
52.2
|
|
|
42.1
|
|
||
Reinvested dividends on restricted stock units
|
0.1
|
|
|
0.5
|
|
||
Adjustment to carrying amount of redeemable noncontrolling interest
|
(1.4
|
)
|
|
6.1
|
|
||
Balance, End of period
|
$
|
1,351.0
|
|
|
$
|
1,264.6
|
|
Retained Earnings
|
|
|
|
||||
Balance, Beginning of period
|
$
|
5,140.4
|
|
|
$
|
4,686.6
|
|
Net income attributable to Progressive
|
791.9
|
|
|
449.1
|
|
||
Treasury shares purchased
|
(21.9
|
)
|
|
(100.8
|
)
|
||
Cash dividends declared on common shares
|
0
|
|
|
0.2
|
|
||
Reinvested dividends on restricted stock units
|
(0.1
|
)
|
|
(0.5
|
)
|
||
Other, net
|
(1.5
|
)
|
|
(3.4
|
)
|
||
Balance, End of period
|
$
|
5,908.8
|
|
|
$
|
5,031.2
|
|
Accumulated Other Comprehensive Income Attributable to Progressive
|
|
|
|
||||
Balance, Beginning of period
|
$
|
933.4
|
|
|
$
|
800.4
|
|
Attributable to noncontrolling interest
|
(2.2
|
)
|
|
(3.5
|
)
|
||
Other comprehensive income
|
219.5
|
|
|
160.9
|
|
||
Balance, End of period
|
$
|
1,150.7
|
|
|
$
|
957.8
|
|
Total Shareholders’ Equity
|
$
|
8,991.5
|
|
|
$
|
7,835.5
|
|
Six Months Ended June 30,
|
2017
|
|
|
2016
|
|
||
Cash Flows From Operating Activities
|
|
|
|
||||
Net income
|
$
|
803.0
|
|
|
$
|
453.6
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation
|
84.0
|
|
|
58.1
|
|
||
Amortization of intangible assets
|
31.0
|
|
|
31.1
|
|
||
Net amortization of fixed-income securities
|
44.1
|
|
|
42.1
|
|
||
Amortization of equity-based compensation
|
53.9
|
|
|
42.1
|
|
||
Net realized (gains) losses on securities
|
(84.0
|
)
|
|
(49.7
|
)
|
||
Net (gains) losses on disposition of property and equipment
|
3.2
|
|
|
1.2
|
|
||
(Gains) losses on extinguishment of debt
|
(0.2
|
)
|
|
(1.6
|
)
|
||
Net loss on exchange transaction
|
0
|
|
|
4.5
|
|
||
Changes in:
|
|
|
|
||||
Premiums receivable
|
(582.0
|
)
|
|
(531.5
|
)
|
||
Reinsurance recoverables
|
(142.4
|
)
|
|
(173.1
|
)
|
||
Prepaid reinsurance premiums
|
(42.1
|
)
|
|
41.3
|
|
||
Deferred acquisition costs
|
(76.0
|
)
|
|
(97.8
|
)
|
||
Income taxes
|
(64.3
|
)
|
|
(69.3
|
)
|
||
Unearned premiums
|
939.0
|
|
|
832.6
|
|
||
Loss and loss adjustment expense reserves
|
692.3
|
|
|
630.0
|
|
||
Accounts payable, accrued expenses, and other liabilities
|
430.2
|
|
|
376.6
|
|
||
Restricted cash
|
14.1
|
|
|
0.3
|
|
||
Other, net
|
(67.1
|
)
|
|
(19.2
|
)
|
||
Net cash provided by operating activities
|
2,036.7
|
|
|
1,571.3
|
|
||
Cash Flows From Investing Activities
|
|
|
|
||||
Purchases:
|
|
|
|
||||
Fixed maturities
|
(6,803.3
|
)
|
|
(4,489.6
|
)
|
||
Equity securities
|
(89.5
|
)
|
|
(290.5
|
)
|
||
Sales:
|
|
|
|
||||
Fixed maturities
|
2,359.9
|
|
|
3,361.7
|
|
||
Equity securities
|
133.3
|
|
|
182.9
|
|
||
Maturities, paydowns, calls, and other:
|
|
|
|
||||
Fixed maturities
|
2,413.5
|
|
|
3,032.8
|
|
||
Equity securities
|
50.0
|
|
|
0
|
|
||
Net sales (purchases) of short-term investments
|
(146.8
|
)
|
|
(2,959.1
|
)
|
||
Net unsettled security transactions
|
259.3
|
|
|
270.0
|
|
||
Purchases of property and equipment
|
(73.2
|
)
|
|
(109.1
|
)
|
||
Sales of property and equipment
|
12.5
|
|
|
3.3
|
|
||
Net cash disposed in exchange transaction
1
|
0
|
|
|
(7.7
|
)
|
||
Acquisition of an insurance company, net of cash acquired
|
(18.1
|
)
|
|
0
|
|
||
Net cash used in investing activities
|
(1,902.4
|
)
|
|
(1,005.3
|
)
|
||
Cash Flows From Financing Activities
|
|
|
|
||||
Proceeds from exercise of equity options
|
0.5
|
|
|
0
|
|
||
Tax benefit from vesting of equity-based compensation
|
0
|
|
|
6.7
|
|
||
Net proceeds from debt issuance
|
841.1
|
|
|
0
|
|
||
Payments of debt
|
(12.5
|
)
|
|
(13.0
|
)
|
||
Redemption/reacquisition of subordinated debt
|
(594.4
|
)
|
|
(18.2
|
)
|
||
Dividends paid to shareholders
|
(395.4
|
)
|
|
(519.0
|
)
|
||
Acquisition of treasury shares for restricted stock tax liabilities
|
(24.1
|
)
|
|
(20.6
|
)
|
||
Acquisition of treasury shares acquired in open market
|
0
|
|
|
(91.5
|
)
|
||
Net cash used in financing activities
|
(184.8
|
)
|
|
(655.6
|
)
|
||
Effect of exchange rate changes on cash
|
0
|
|
|
0.2
|
|
||
Decrease in cash
|
(50.5
|
)
|
|
(89.4
|
)
|
||
Cash, January 1
|
211.5
|
|
|
224.1
|
|
||
Cash, June 30
|
$
|
161.0
|
|
|
$
|
134.7
|
|
($ in millions)
|
Cost
|
|
|
Gross
Unrealized Gains
|
|
|
Gross
Unrealized
Losses
|
|
|
Net
Holding Period Gains
(Losses)
|
|
|
Fair
Value
|
|
|
% of
Total Fair
Value
|
|
|||||
June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
U.S. government obligations
|
$
|
4,166.4
|
|
|
$
|
4.4
|
|
|
$
|
(15.8
|
)
|
|
$
|
0
|
|
|
$
|
4,155.0
|
|
|
16.0
|
%
|
State and local government obligations
|
2,473.3
|
|
|
32.5
|
|
|
(5.9
|
)
|
|
0.2
|
|
|
2,500.1
|
|
|
9.7
|
|
|||||
Foreign government obligations
|
22.5
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
22.5
|
|
|
0.1
|
|
|||||
Corporate debt securities
|
4,991.6
|
|
|
29.4
|
|
|
(7.6
|
)
|
|
0.4
|
|
|
5,013.8
|
|
|
19.3
|
|
|||||
Residential mortgage-backed securities
|
1,222.8
|
|
|
10.9
|
|
|
(5.4
|
)
|
|
2.3
|
|
|
1,230.6
|
|
|
4.7
|
|
|||||
Agency residential pass-through obligations
|
37.5
|
|
|
0
|
|
|
(0.5
|
)
|
|
0
|
|
|
37.0
|
|
|
0.1
|
|
|||||
Commercial mortgage-backed securities
|
2,364.9
|
|
|
19.8
|
|
|
(9.7
|
)
|
|
0
|
|
|
2,375.0
|
|
|
9.1
|
|
|||||
Other asset-backed securities
|
2,843.3
|
|
|
6.4
|
|
|
(2.5
|
)
|
|
0.2
|
|
|
2,847.4
|
|
|
11.0
|
|
|||||
Redeemable preferred stocks
|
189.4
|
|
|
19.0
|
|
|
(1.7
|
)
|
|
0
|
|
|
206.7
|
|
|
0.8
|
|
|||||
Total fixed maturities
|
18,311.7
|
|
|
122.4
|
|
|
(49.1
|
)
|
|
3.1
|
|
|
18,388.1
|
|
|
70.8
|
|
|||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Nonredeemable preferred stocks
|
666.0
|
|
|
123.6
|
|
|
(6.5
|
)
|
|
0
|
|
|
783.1
|
|
|
3.0
|
|
|||||
Common equities
|
1,472.3
|
|
|
1,611.7
|
|
|
(6.5
|
)
|
|
0
|
|
|
3,077.5
|
|
|
11.8
|
|
|||||
Short-term investments
|
3,729.7
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
3,729.7
|
|
|
14.4
|
|
|||||
Total portfolio
1,2
|
$
|
24,179.7
|
|
|
$
|
1,857.7
|
|
|
$
|
(62.1
|
)
|
|
$
|
3.1
|
|
|
$
|
25,978.4
|
|
|
100.0
|
%
|
($ in millions)
|
Cost
|
|
|
Gross
Unrealized Gains
|
|
|
Gross
Unrealized
Losses
|
|
|
Net
Holding Period Gains
(Losses)
|
|
|
Fair
Value
|
|
|
% of
Total Fair
Value
|
|
|||||
June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
U.S. government obligations
|
$
|
1,276.0
|
|
|
$
|
20.0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
1,296.0
|
|
|
5.8
|
%
|
State and local government obligations
|
2,545.5
|
|
|
72.7
|
|
|
(0.6
|
)
|
|
0
|
|
|
2,617.6
|
|
|
11.7
|
|
|||||
Foreign government obligations
|
24.9
|
|
|
0.1
|
|
|
0
|
|
|
0
|
|
|
25.0
|
|
|
0.1
|
|
|||||
Corporate debt securities
|
3,833.9
|
|
|
80.2
|
|
|
(3.7
|
)
|
|
0.6
|
|
|
3,911.0
|
|
|
17.5
|
|
|||||
Residential mortgage-backed securities
|
1,672.8
|
|
|
22.7
|
|
|
(21.8
|
)
|
|
1.2
|
|
|
1,674.9
|
|
|
7.5
|
|
|||||
Agency residential pass-through obligations
|
46.4
|
|
|
0.5
|
|
|
0
|
|
|
0
|
|
|
46.9
|
|
|
0.2
|
|
|||||
Commercial mortgage-backed securities
|
2,177.3
|
|
|
38.8
|
|
|
(5.7
|
)
|
|
0
|
|
|
2,210.4
|
|
|
9.9
|
|
|||||
Other asset-backed securities
|
1,567.7
|
|
|
4.5
|
|
|
(1.0
|
)
|
|
0.4
|
|
|
1,571.6
|
|
|
7.0
|
|
|||||
Redeemable preferred stocks
|
265.1
|
|
|
17.2
|
|
|
(46.2
|
)
|
|
0
|
|
|
236.1
|
|
|
1.0
|
|
|||||
Total fixed maturities
|
13,409.6
|
|
|
256.7
|
|
|
(79.0
|
)
|
|
2.2
|
|
|
13,589.5
|
|
|
60.7
|
|
|||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Nonredeemable preferred stocks
|
745.5
|
|
|
130.2
|
|
|
(18.4
|
)
|
|
1.2
|
|
|
858.5
|
|
|
3.8
|
|
|||||
Common equities
|
1,558.6
|
|
|
1,215.1
|
|
|
(8.3
|
)
|
|
0
|
|
|
2,765.4
|
|
|
12.4
|
|
|||||
Short-term investments
|
5,166.4
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
5,166.4
|
|
|
23.1
|
|
|||||
Total portfolio
1,2
|
$
|
20,880.1
|
|
|
$
|
1,602.0
|
|
|
$
|
(105.7
|
)
|
|
$
|
3.4
|
|
|
$
|
22,379.8
|
|
|
100.0
|
%
|
($ in millions)
|
Cost
|
|
|
Gross
Unrealized Gains
|
|
|
Gross
Unrealized
Losses
|
|
|
Net
Holding Period Gains
(Losses)
|
|
|
Fair
Value
|
|
|
% of
Total Fair
Value
|
|
|||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
U.S. government obligations
|
$
|
2,899.2
|
|
|
$
|
0
|
|
|
$
|
(29.1
|
)
|
|
$
|
0
|
|
|
$
|
2,870.1
|
|
|
12.2
|
%
|
State and local government obligations
|
2,509.5
|
|
|
13.8
|
|
|
(20.7
|
)
|
|
0
|
|
|
2,502.6
|
|
|
10.7
|
|
|||||
Foreign government obligations
|
24.5
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
24.5
|
|
|
0.1
|
|
|||||
Corporate debt securities
|
4,557.8
|
|
|
17.3
|
|
|
(24.3
|
)
|
|
0.1
|
|
|
4,550.9
|
|
|
19.4
|
|
|||||
Residential mortgage-backed securities
|
1,448.5
|
|
|
23.7
|
|
|
(15.0
|
)
|
|
1.5
|
|
|
1,458.7
|
|
|
6.2
|
|
|||||
Agency residential pass-through obligations
|
41.2
|
|
|
0
|
|
|
(0.6
|
)
|
|
0
|
|
|
40.6
|
|
|
0.2
|
|
|||||
Commercial mortgage-backed securities
|
2,266.9
|
|
|
12.0
|
|
|
(25.5
|
)
|
|
0
|
|
|
2,253.4
|
|
|
9.6
|
|
|||||
Other asset-backed securities
|
2,350.7
|
|
|
4.6
|
|
|
(4.4
|
)
|
|
0.2
|
|
|
2,351.1
|
|
|
10.0
|
|
|||||
Redeemable preferred stocks
|
188.8
|
|
|
5.1
|
|
|
(2.0
|
)
|
|
0
|
|
|
191.9
|
|
|
0.8
|
|
|||||
Total fixed maturities
|
16,287.1
|
|
|
76.5
|
|
|
(121.6
|
)
|
|
1.8
|
|
|
16,243.8
|
|
|
69.2
|
|
|||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Nonredeemable preferred stocks
|
734.2
|
|
|
135.4
|
|
|
(16.1
|
)
|
|
0
|
|
|
853.5
|
|
|
3.6
|
|
|||||
Common equities
|
1,437.5
|
|
|
1,377.0
|
|
|
(2.1
|
)
|
|
0
|
|
|
2,812.4
|
|
|
12.0
|
|
|||||
Short-term investments
|
3,572.9
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
3,572.9
|
|
|
15.2
|
|
|||||
Total portfolio
1,2
|
$
|
22,031.7
|
|
|
$
|
1,588.9
|
|
|
$
|
(139.8
|
)
|
|
$
|
1.8
|
|
|
$
|
23,482.6
|
|
|
100.0
|
%
|
|
June 30,
|
|
December 31,
2016 |
|
|||||||
(millions)
|
2017
|
|
|
2016
|
|
|
|||||
Fixed maturities:
|
|
|
|
|
|
||||||
State and local government obligations
|
$
|
6.6
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Corporate debt securities
|
61.3
|
|
|
31.3
|
|
|
40.1
|
|
|||
Residential mortgage-backed securities
|
189.7
|
|
|
173.3
|
|
|
170.5
|
|
|||
Other asset-backed securities
|
7.7
|
|
|
10.2
|
|
|
8.9
|
|
|||
Total fixed maturities
|
265.3
|
|
|
214.8
|
|
|
219.5
|
|
|||
Equity securities:
|
|
|
|
|
|
||||||
Nonredeemable preferred stocks
|
0
|
|
|
45.5
|
|
|
0
|
|
|||
Total hybrid securities
|
$
|
265.3
|
|
|
$
|
260.3
|
|
|
$
|
219.5
|
|
(millions)
|
Cost
|
|
|
Fair Value
|
|
||
Less than one year
|
$
|
4,514.4
|
|
|
$
|
4,531.7
|
|
One to five years
|
10,871.3
|
|
|
10,902.4
|
|
||
Five to ten years
|
2,849.6
|
|
|
2,876.1
|
|
||
Ten years or greater
|
76.4
|
|
|
77.9
|
|
||
Total
|
$
|
18,311.7
|
|
|
$
|
18,388.1
|
|
|
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
|
|
||||||||||||
June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
U.S. government obligations
|
41
|
|
$
|
2,781.8
|
|
$
|
(15.8
|
)
|
39
|
|
$
|
2,725.1
|
|
$
|
(15.1
|
)
|
|
2
|
|
$
|
56.7
|
|
$
|
(0.7
|
)
|
State and local government obligations
|
222
|
|
818.7
|
|
(5.9
|
)
|
138
|
|
479.8
|
|
(3.3
|
)
|
|
84
|
|
338.9
|
|
(2.6
|
)
|
||||||
Corporate debt securities
|
143
|
|
1,905.2
|
|
(7.6
|
)
|
122
|
|
1,599.6
|
|
(5.3
|
)
|
|
21
|
|
305.6
|
|
(2.3
|
)
|
||||||
Residential mortgage-backed securities
|
153
|
|
501.1
|
|
(5.4
|
)
|
69
|
|
166.2
|
|
(0.7
|
)
|
|
84
|
|
334.9
|
|
(4.7
|
)
|
||||||
Agency residential pass-through obligations
|
67
|
|
34.6
|
|
(0.5
|
)
|
57
|
|
31.6
|
|
(0.4
|
)
|
|
10
|
|
3.0
|
|
(0.1
|
)
|
||||||
Commercial mortgage-backed securities
|
74
|
|
905.6
|
|
(9.7
|
)
|
52
|
|
679.5
|
|
(5.7
|
)
|
|
22
|
|
226.1
|
|
(4.0
|
)
|
||||||
Other asset-backed securities
|
160
|
|
2,077.8
|
|
(2.5
|
)
|
145
|
|
1,823.8
|
|
(1.9
|
)
|
|
15
|
|
254.0
|
|
(0.6
|
)
|
||||||
Redeemable preferred stocks
|
1
|
|
10.8
|
|
(1.7
|
)
|
0
|
|
0
|
|
0
|
|
|
1
|
|
10.8
|
|
(1.7
|
)
|
||||||
Total fixed maturities
|
861
|
|
9,035.6
|
|
(49.1
|
)
|
622
|
|
7,505.6
|
|
(32.4
|
)
|
|
239
|
|
1,530.0
|
|
(16.7
|
)
|
||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Nonredeemable preferred stocks
|
3
|
|
73.1
|
|
(6.5
|
)
|
0
|
|
0
|
|
0
|
|
|
3
|
|
73.1
|
|
(6.5
|
)
|
||||||
Common equities
|
80
|
|
73.1
|
|
(6.5
|
)
|
74
|
|
72.3
|
|
(6.5
|
)
|
|
6
|
|
0.8
|
|
0
|
|
||||||
Total equity securities
|
83
|
|
146.2
|
|
(13.0
|
)
|
74
|
|
72.3
|
|
(6.5
|
)
|
|
9
|
|
73.9
|
|
(6.5
|
)
|
||||||
Total portfolio
|
944
|
|
$
|
9,181.8
|
|
$
|
(62.1
|
)
|
696
|
|
$
|
7,577.9
|
|
$
|
(38.9
|
)
|
|
248
|
|
$
|
1,603.9
|
|
$
|
(23.2
|
)
|
|
Total No. of Sec.
|
|
Total
Fair Value |
|
Gross Unrealized Losses
|
|
Less than 12 Months
|
|
12 Months or Greater
|
||||||||||||||||
($ in millions)
|
No. of Sec.
|
|
Fair
Value |
|
Unrealized Losses
|
|
|
No. of Sec.
|
|
Fair
Value |
|
Unrealized Losses
|
|
||||||||||||
June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
U.S. government obligations
|
0
|
|
$
|
0
|
|
$
|
0
|
|
0
|
|
$
|
0
|
|
$
|
0
|
|
|
0
|
|
$
|
0
|
|
$
|
0
|
|
State and local government obligations
|
47
|
|
131.9
|
|
(0.6
|
)
|
19
|
|
38.6
|
|
(0.2
|
)
|
|
28
|
|
93.3
|
|
(0.4
|
)
|
||||||
Corporate debt securities
|
37
|
|
269.0
|
|
(3.7
|
)
|
23
|
|
147.1
|
|
(0.6
|
)
|
|
14
|
|
121.9
|
|
(3.1
|
)
|
||||||
Residential mortgage-backed securities
|
137
|
|
1,154.4
|
|
(21.8
|
)
|
29
|
|
267.6
|
|
(1.3
|
)
|
|
108
|
|
886.8
|
|
(20.5
|
)
|
||||||
Agency residential pass-through obligations
|
18
|
|
5.4
|
|
0
|
|
6
|
|
1.6
|
|
0
|
|
|
12
|
|
3.8
|
|
0
|
|
||||||
Commercial mortgage-backed securities
|
55
|
|
530.3
|
|
(5.7
|
)
|
9
|
|
70.8
|
|
(0.4
|
)
|
|
46
|
|
459.5
|
|
(5.3
|
)
|
||||||
Other asset-backed securities
|
53
|
|
502.1
|
|
(1.0
|
)
|
22
|
|
194.6
|
|
(0.3
|
)
|
|
31
|
|
307.5
|
|
(0.7
|
)
|
||||||
Redeemable preferred stocks
|
8
|
|
181.6
|
|
(46.2
|
)
|
0
|
|
0
|
|
0
|
|
|
8
|
|
181.6
|
|
(46.2
|
)
|
||||||
Total fixed maturities
|
355
|
|
2,774.7
|
|
(79.0
|
)
|
108
|
|
720.3
|
|
(2.8
|
)
|
|
247
|
|
2,054.4
|
|
(76.2
|
)
|
||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Nonredeemable preferred stocks
|
11
|
|
294.9
|
|
(18.4
|
)
|
2
|
|
31.2
|
|
(0.7
|
)
|
|
9
|
|
263.7
|
|
(17.7
|
)
|
||||||
Common equities
|
113
|
|
107.0
|
|
(8.3
|
)
|
108
|
|
100.7
|
|
(8.1
|
)
|
|
5
|
|
6.3
|
|
(0.2
|
)
|
||||||
Total equity securities
|
124
|
|
401.9
|
|
(26.7
|
)
|
110
|
|
131.9
|
|
(8.8
|
)
|
|
14
|
|
270.0
|
|
(17.9
|
)
|
||||||
Total portfolio
|
479
|
|
$
|
3,176.6
|
|
$
|
(105.7
|
)
|
218
|
|
$
|
852.2
|
|
$
|
(11.6
|
)
|
|
261
|
|
$
|
2,324.4
|
|
$
|
(94.1
|
)
|
|
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, 2016
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
U.S. government obligations
|
30
|
|
$
|
2,774.0
|
|
$
|
(29.1
|
)
|
30
|
|
$
|
2,774.0
|
|
$
|
(29.1
|
)
|
|
0
|
|
$
|
0
|
|
$
|
0
|
|
State and local government obligations
|
618
|
|
1,497.9
|
|
(20.7
|
)
|
584
|
|
1,404.3
|
|
(19.6
|
)
|
|
34
|
|
93.6
|
|
(1.1
|
)
|
||||||
Corporate debt securities
|
184
|
|
2,615.1
|
|
(24.3
|
)
|
175
|
|
2,559.9
|
|
(24.0
|
)
|
|
9
|
|
55.2
|
|
(0.3
|
)
|
||||||
Residential mortgage-backed securities
|
178
|
|
917.7
|
|
(15.0
|
)
|
69
|
|
175.8
|
|
(1.1
|
)
|
|
109
|
|
741.9
|
|
(13.9
|
)
|
||||||
Agency residential pass-through obligations
|
55
|
|
36.0
|
|
(0.6
|
)
|
48
|
|
33.9
|
|
(0.6
|
)
|
|
7
|
|
2.1
|
|
0
|
|
||||||
Commercial mortgage-backed securities
|
111
|
|
1,347.3
|
|
(25.5
|
)
|
85
|
|
1,061.2
|
|
(22.9
|
)
|
|
26
|
|
286.1
|
|
(2.6
|
)
|
||||||
Other asset-backed securities
|
103
|
|
1,605.2
|
|
(4.4
|
)
|
89
|
|
1,423.3
|
|
(3.9
|
)
|
|
14
|
|
181.9
|
|
(0.5
|
)
|
||||||
Redeemable preferred stocks
|
2
|
|
31.0
|
|
(2.0
|
)
|
0
|
|
0
|
|
0
|
|
|
2
|
|
31.0
|
|
(2.0
|
)
|
||||||
Total fixed maturities
|
1,281
|
|
10,824.2
|
|
(121.6
|
)
|
1,080
|
|
9,432.4
|
|
(101.2
|
)
|
|
201
|
|
1,391.8
|
|
(20.4
|
)
|
||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Nonredeemable preferred stocks
|
13
|
|
329.6
|
|
(16.1
|
)
|
8
|
|
175.2
|
|
(3.8
|
)
|
|
5
|
|
154.4
|
|
(12.3
|
)
|
||||||
Common equities
|
75
|
|
22.1
|
|
(2.1
|
)
|
69
|
|
19.7
|
|
(1.7
|
)
|
|
6
|
|
2.4
|
|
(0.4
|
)
|
||||||
Total equity securities
|
88
|
|
351.7
|
|
(18.2
|
)
|
77
|
|
194.9
|
|
(5.5
|
)
|
|
11
|
|
156.8
|
|
(12.7
|
)
|
||||||
Total portfolio
|
1,369
|
|
$
|
11,175.9
|
|
$
|
(139.8
|
)
|
1,157
|
|
$
|
9,627.3
|
|
$
|
(106.7
|
)
|
|
212
|
|
$
|
1,548.6
|
|
$
|
(33.1
|
)
|
|
June 30,
|
|
December 31,
2016 |
|
|||||||
(millions)
|
2017
|
|
|
2016
|
|
|
|||||
Fixed maturities:
|
|
|
|
|
|
||||||
Residential mortgage-backed securities
|
$
|
(19.7
|
)
|
|
$
|
(43.3
|
)
|
|
$
|
(43.3
|
)
|
Commercial mortgage-backed securities
|
(0.5
|
)
|
|
(0.6
|
)
|
|
(0.6
|
)
|
|||
Total fixed maturities
|
$
|
(20.2
|
)
|
|
$
|
(43.9
|
)
|
|
$
|
(43.9
|
)
|
|
Three Months Ended June 30, 2017
|
||||||||||
|
Mortgage-Backed
|
|
|
||||||||
(millions)
|
Residential
|
|
|
Commercial
|
|
|
Total
|
|
|||
Balance at March 31, 2017
|
$
|
11.4
|
|
|
$
|
0.1
|
|
|
$
|
11.5
|
|
Reductions for securities sold/matured
|
(11.4
|
)
|
|
0
|
|
|
(11.4
|
)
|
|||
Change in recoveries of future cash flows expected to be collected
1
|
0.2
|
|
|
0
|
|
|
0.2
|
|
|||
Balance at June 30, 2017
|
$
|
0.2
|
|
|
$
|
0.1
|
|
|
$
|
0.3
|
|
|
|
|
|
|
|
||||||
|
Six Months Ended June 30, 2017
|
||||||||||
|
Mortgage-Backed
|
|
|
||||||||
(millions)
|
Residential
|
|
|
Commercial
|
|
|
Total
|
|
|||
Balance at December 31, 2016
|
$
|
11.1
|
|
|
$
|
0.4
|
|
|
$
|
11.5
|
|
Reductions for securities sold/matured
|
(10.9
|
)
|
|
(0.3
|
)
|
|
(11.2
|
)
|
|||
Change in recoveries of future cash flows expected to be collected
1
|
0
|
|
|
0
|
|
|
0
|
|
|||
Balance at June 30, 2017
|
$
|
0.2
|
|
|
$
|
0.1
|
|
|
$
|
0.3
|
|
|
Three Months Ended June 30, 2016
|
||||||||||
|
Mortgage-Backed
|
|
|
||||||||
(millions)
|
Residential
|
|
|
Commercial
|
|
|
Total
|
|
|||
Balance at March 31, 2016
|
$
|
12.1
|
|
|
$
|
0.4
|
|
|
$
|
12.5
|
|
Reductions for securities sold/matured
|
0
|
|
|
0
|
|
|
0
|
|
|||
Change in recoveries of future cash flows expected to be collected
1
|
(0.3
|
)
|
|
0
|
|
|
(0.3
|
)
|
|||
Balance at June 30, 2016
|
$
|
11.8
|
|
|
$
|
0.4
|
|
|
$
|
12.2
|
|
|
|
|
|
|
|
||||||
|
Six Months Ended June 30, 2016
|
||||||||||
|
Mortgage-Backed
|
|
|
||||||||
(millions)
|
Residential
|
|
|
Commercial
|
|
|
Total
|
|
|||
Balance at December 31, 2015
|
$
|
12.4
|
|
|
$
|
0.4
|
|
|
$
|
12.8
|
|
Reductions for securities sold/matured
|
0
|
|
|
0
|
|
|
0
|
|
|||
Change in recoveries of future cash flows expected to be collected
1
|
(0.6
|
)
|
|
0
|
|
|
(0.6
|
)
|
|||
Balance at June 30, 2016
|
$
|
11.8
|
|
|
$
|
0.4
|
|
|
$
|
12.2
|
|
|
Three Months
|
|
Six Months
|
||||||||||||
(millions)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Gross realized gains on security sales
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
U.S. government obligations
|
$
|
4.5
|
|
|
$
|
3.4
|
|
|
$
|
4.9
|
|
|
$
|
17.7
|
|
State and local government obligations
|
2.6
|
|
|
4.5
|
|
|
3.1
|
|
|
15.4
|
|
||||
Corporate and other debt securities
|
7.3
|
|
|
10.0
|
|
|
11.4
|
|
|
22.5
|
|
||||
Residential mortgage-backed securities
|
20.9
|
|
|
0.8
|
|
|
21.0
|
|
|
1.7
|
|
||||
Agency residential pass-through obligations
|
0
|
|
|
0.1
|
|
|
0
|
|
|
0.1
|
|
||||
Commercial mortgage-backed securities
|
1.2
|
|
|
2.9
|
|
|
2.4
|
|
|
6.5
|
|
||||
Other asset-backed securities
|
0
|
|
|
0
|
|
|
0.3
|
|
|
0
|
|
||||
Redeemable preferred stocks
|
0
|
|
|
0
|
|
|
0.3
|
|
|
0
|
|
||||
Total fixed maturities
|
36.5
|
|
|
21.7
|
|
|
43.4
|
|
|
63.9
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Nonredeemable preferred stocks
|
6.2
|
|
|
5.4
|
|
|
51.6
|
|
|
7.0
|
|
||||
Common equities
|
9.9
|
|
|
19.4
|
|
|
17.3
|
|
|
28.9
|
|
||||
Subtotal gross realized gains on security sales
|
52.6
|
|
|
46.5
|
|
|
112.3
|
|
|
99.8
|
|
||||
Gross realized losses on security sales
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
U.S. government obligations
|
(0.4
|
)
|
|
0
|
|
|
(3.6
|
)
|
|
(0.4
|
)
|
||||
State and local government obligations
|
0
|
|
|
(1.5
|
)
|
|
(0.1
|
)
|
|
(1.6
|
)
|
||||
Corporate and other debt securities
|
(1.9
|
)
|
|
(1.3
|
)
|
|
(2.8
|
)
|
|
(1.7
|
)
|
||||
Residential mortgage-backed securities
|
(0.3
|
)
|
|
0
|
|
|
(0.3
|
)
|
|
0
|
|
||||
Agency residential pass-through obligations
|
0
|
|
|
(0.2
|
)
|
|
0
|
|
|
(0.2
|
)
|
||||
Commercial mortgage-backed securities
|
(0.7
|
)
|
|
(1.4
|
)
|
|
(3.1
|
)
|
|
(4.1
|
)
|
||||
Total fixed maturities
|
(3.3
|
)
|
|
(4.4
|
)
|
|
(9.9
|
)
|
|
(8.0
|
)
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Nonredeemable preferred stocks
|
(4.6
|
)
|
|
(1.7
|
)
|
|
(5.8
|
)
|
|
(2.7
|
)
|
||||
Common equities
|
0
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(5.0
|
)
|
||||
Subtotal gross realized losses on security sales
|
(7.9
|
)
|
|
(6.2
|
)
|
|
(15.8
|
)
|
|
(15.7
|
)
|
||||
Net realized gains (losses) on security sales
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
U.S. government obligations
|
4.1
|
|
|
3.4
|
|
|
1.3
|
|
|
17.3
|
|
||||
State and local government obligations
|
2.6
|
|
|
3.0
|
|
|
3.0
|
|
|
13.8
|
|
||||
Corporate and other debt securities
|
5.4
|
|
|
8.7
|
|
|
8.6
|
|
|
20.8
|
|
||||
Residential mortgage-backed securities
|
20.6
|
|
|
0.8
|
|
|
20.7
|
|
|
1.7
|
|
||||
Agency residential pass-through obligations
|
0
|
|
|
(0.1
|
)
|
|
0
|
|
|
(0.1
|
)
|
||||
Commercial mortgage-backed securities
|
0.5
|
|
|
1.5
|
|
|
(0.7
|
)
|
|
2.4
|
|
||||
Other asset-backed securities
|
0
|
|
|
0
|
|
|
0.3
|
|
|
0
|
|
||||
Redeemable preferred stocks
|
0
|
|
|
0
|
|
|
0.3
|
|
|
0
|
|
||||
Total fixed maturities
|
33.2
|
|
|
17.3
|
|
|
33.5
|
|
|
55.9
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Nonredeemable preferred stocks
|
1.6
|
|
|
3.7
|
|
|
45.8
|
|
|
4.3
|
|
||||
Common equities
|
9.9
|
|
|
19.3
|
|
|
17.2
|
|
|
23.9
|
|
||||
Subtotal net realized gains (losses) on security sales
|
44.7
|
|
|
40.3
|
|
|
96.5
|
|
|
84.1
|
|
||||
Other-than-temporary impairment losses
|
|
|
|
|
|
|
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Common equities
|
(2.6
|
)
|
|
(0.2
|
)
|
|
(3.6
|
)
|
|
(0.2
|
)
|
||||
Subtotal investment other-than-temporary impairment losses
|
(2.6
|
)
|
|
(0.2
|
)
|
|
(3.6
|
)
|
|
(0.2
|
)
|
||||
Other asset impairment
|
(11.2
|
)
|
|
0
|
|
|
(11.2
|
)
|
|
0
|
|
||||
Subtotal other-than-temporary impairment losses
|
(13.8
|
)
|
|
(0.2
|
)
|
|
(14.8
|
)
|
|
(0.2
|
)
|
||||
Other gains (losses)
|
|
|
|
|
|
|
|
||||||||
Hybrid securities
|
0.4
|
|
|
3.0
|
|
|
1.2
|
|
|
2.3
|
|
||||
Derivative instruments
|
0
|
|
|
(10.8
|
)
|
|
0
|
|
|
(36.5
|
)
|
||||
Litigation settlements
|
0.8
|
|
|
0
|
|
|
1.1
|
|
|
0
|
|
||||
Subtotal other gains (losses)
|
1.2
|
|
|
(7.8
|
)
|
|
2.3
|
|
|
(34.2
|
)
|
||||
Total net realized gains (losses) on securities
|
$
|
32.1
|
|
|
$
|
32.3
|
|
|
$
|
84.0
|
|
|
$
|
49.7
|
|
|
Three Months
|
|
Six Months
|
||||||||||
(millions)
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
||||
Fixed maturities:
|
|
|
|
|
|
||||||||
U.S. government obligations
|
$
|
17.0
|
|
$
|
4.3
|
|
|
$
|
29.7
|
|
$
|
9.1
|
|
State and local government obligations
|
13.1
|
|
13.2
|
|
|
26.4
|
|
26.7
|
|
||||
Foreign government obligations
|
0.1
|
|
0.1
|
|
|
0.2
|
|
0.2
|
|
||||
Corporate debt securities
|
31.3
|
|
26.4
|
|
|
60.9
|
|
54.6
|
|
||||
Residential mortgage-backed securities
|
10.1
|
|
11.6
|
|
|
19.5
|
|
23.8
|
|
||||
Agency residential pass-through obligations
|
0.2
|
|
0.2
|
|
|
0.4
|
|
0.6
|
|
||||
Commercial mortgage-backed securities
|
18.3
|
|
19.3
|
|
|
37.1
|
|
40.2
|
|
||||
Other asset-backed securities
|
11.8
|
|
5.9
|
|
|
21.7
|
|
11.9
|
|
||||
Redeemable preferred stocks
|
2.9
|
|
3.9
|
|
|
6.3
|
|
7.7
|
|
||||
Total fixed maturities
|
104.8
|
|
84.9
|
|
|
202.2
|
|
174.8
|
|
||||
Equity securities:
|
|
|
|
|
|
||||||||
Nonredeemable preferred stocks
|
10.6
|
|
12.6
|
|
|
22.1
|
|
24.4
|
|
||||
Common equities
|
14.6
|
|
13.6
|
|
|
27.9
|
|
28.1
|
|
||||
Short-term investments
|
8.8
|
|
3.5
|
|
|
15.8
|
|
6.1
|
|
||||
Investment income
|
138.8
|
|
114.6
|
|
|
268.0
|
|
233.4
|
|
||||
Investment expenses
|
(6.6
|
)
|
(5.3
|
)
|
|
(12.2
|
)
|
(10.1
|
)
|
||||
Net investment income
|
$
|
132.2
|
|
$
|
109.3
|
|
|
$
|
255.8
|
|
$
|
223.3
|
|
(millions)
|
|
|
|
|
Balance Sheet
2
|
|
Comprehensive Income Statement
|
||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
Assets (Liabilities)
Fair Value |
|
Pretax Net Realized
Gains (Losses)
|
||||||||||||||||||||||||||||||||||
|
Notional Value
1
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||||||||
|
June 30,
|
|
Dec. 31,
|
|
|
|
|
|
June 30,
|
|
Dec. 31,
|
|
June 30,
|
|
June 30,
|
||||||||||||||||||||||||||||
Derivatives designated as:
|
2017
|
|
|
2016
|
|
|
2016
|
|
|
Purpose
|
|
Classification
|
|
2017
|
|
|
2016
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||||||||
Hedging instrument
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Closed:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Ineffective cash flow hedge
|
$
|
31
|
|
|
$
|
20
|
|
|
$
|
370
|
|
|
Manage
interest
rate risk
|
|
NA
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0.1
|
|
|
$
|
0
|
|
|
$
|
0.1
|
|
Non-hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Interest rate swaps
|
0
|
|
|
565
|
|
|
0
|
|
|
Manage
portfolio
duration
|
|
Other liabilities
|
|
0
|
|
|
(27.9
|
)
|
|
0
|
|
|
0
|
|
|
(10.9
|
)
|
|
0
|
|
|
(34.9
|
)
|
||||||||||
Closed:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Interest rate swaps
|
0
|
|
|
185
|
|
|
750
|
|
|
Manage
portfolio
duration
|
|
NA
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(1.9
|
)
|
||||||||||
U.S. Treasury Note futures
|
0
|
|
|
55
|
|
|
135
|
|
|
Manage
portfolio duration |
|
NA
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0.2
|
|
||||||||||
Total
|
NA
|
|
|
NA
|
|
|
NA
|
|
|
|
|
|
|
$
|
0
|
|
|
$
|
(27.9
|
)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
(10.8
|
)
|
|
$
|
0
|
|
|
$
|
(36.5
|
)
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
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
|
|
|||||
June 30, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government obligations
|
$
|
4,155.0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
4,155.0
|
|
|
$
|
4,166.4
|
|
State and local government obligations
|
0
|
|
|
2,500.1
|
|
|
0
|
|
|
2,500.1
|
|
|
2,473.3
|
|
|||||
Foreign government obligations
|
22.5
|
|
|
0
|
|
|
0
|
|
|
22.5
|
|
|
22.5
|
|
|||||
Corporate debt securities
|
0
|
|
|
5,013.8
|
|
|
0
|
|
|
5,013.8
|
|
|
4,991.6
|
|
|||||
Subtotal
|
4,177.5
|
|
|
7,513.9
|
|
|
0
|
|
|
11,691.4
|
|
|
11,653.8
|
|
|||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential mortgage-backed
|
0
|
|
|
1,230.6
|
|
|
0
|
|
|
1,230.6
|
|
|
1,222.8
|
|
|||||
Agency residential pass-through obligations
|
0
|
|
|
37.0
|
|
|
0
|
|
|
37.0
|
|
|
37.5
|
|
|||||
Commercial mortgage-backed
|
0
|
|
|
2,375.0
|
|
|
0
|
|
|
2,375.0
|
|
|
2,364.9
|
|
|||||
Other asset-backed
|
0
|
|
|
2,847.4
|
|
|
0
|
|
|
2,847.4
|
|
|
2,843.3
|
|
|||||
Subtotal asset-backed securities
|
0
|
|
|
6,490.0
|
|
|
0
|
|
|
6,490.0
|
|
|
6,468.5
|
|
|||||
Redeemable preferred stocks:
|
|
|
|
|
|
|
|
|
|
||||||||||
Financials
|
0
|
|
|
64.1
|
|
|
0
|
|
|
64.1
|
|
|
60.4
|
|
|||||
Utilities
|
0
|
|
|
32.2
|
|
|
0
|
|
|
32.2
|
|
|
30.5
|
|
|||||
Industrials
|
0
|
|
|
110.4
|
|
|
0
|
|
|
110.4
|
|
|
98.5
|
|
|||||
Subtotal redeemable preferred stocks
|
0
|
|
|
206.7
|
|
|
0
|
|
|
206.7
|
|
|
189.4
|
|
|||||
Total fixed maturities
|
4,177.5
|
|
|
14,210.6
|
|
|
0
|
|
|
18,388.1
|
|
|
18,311.7
|
|
|||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Nonredeemable preferred stocks:
|
|
|
|
|
|
|
|
|
|
||||||||||
Financials
|
85.3
|
|
|
697.8
|
|
|
0
|
|
|
783.1
|
|
|
666.0
|
|
|||||
Subtotal nonredeemable preferred stocks
|
85.3
|
|
|
697.8
|
|
|
0
|
|
|
783.1
|
|
|
666.0
|
|
|||||
Common equities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stocks
|
3,077.2
|
|
|
0
|
|
|
0
|
|
|
3,077.2
|
|
|
1,472.0
|
|
|||||
Other risk investments
|
0
|
|
|
0
|
|
|
0.3
|
|
|
0.3
|
|
|
0.3
|
|
|||||
Subtotal common equities
|
3,077.2
|
|
|
0
|
|
|
0.3
|
|
|
3,077.5
|
|
|
1,472.3
|
|
|||||
Total fixed maturities and equity securities
|
7,340.0
|
|
|
14,908.4
|
|
|
0.3
|
|
|
22,248.7
|
|
|
20,450.0
|
|
|||||
Short-term investments
|
2,448.0
|
|
|
1,281.7
|
|
|
0
|
|
|
3,729.7
|
|
|
3,729.7
|
|
|||||
Total portfolio
|
$
|
9,788.0
|
|
|
$
|
16,190.1
|
|
|
$
|
0.3
|
|
|
$
|
25,978.4
|
|
|
$
|
24,179.7
|
|
Debt
|
$
|
0
|
|
|
$
|
3,564.4
|
|
|
$
|
114.8
|
|
|
$
|
3,679.2
|
|
|
$
|
3,383.4
|
|
|
Fair Value
|
|
|
||||||||||||||||
(millions)
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
Cost
|
|
|||||
June 30, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government obligations
|
$
|
1,296.0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
1,296.0
|
|
|
$
|
1,276.0
|
|
State and local government obligations
|
0
|
|
|
2,617.6
|
|
|
0
|
|
|
2,617.6
|
|
|
2,545.5
|
|
|||||
Foreign government obligations
|
25.0
|
|
|
0
|
|
|
0
|
|
|
25.0
|
|
|
24.9
|
|
|||||
Corporate debt securities
|
0
|
|
|
3,911.0
|
|
|
0
|
|
|
3,911.0
|
|
|
3,833.9
|
|
|||||
Subtotal
|
1,321.0
|
|
|
6,528.6
|
|
|
0
|
|
|
7,849.6
|
|
|
7,680.3
|
|
|||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential mortgage-backed
|
0
|
|
|
1,674.9
|
|
|
0
|
|
|
1,674.9
|
|
|
1,672.8
|
|
|||||
Agency residential pass-through obligations
|
0
|
|
|
46.9
|
|
|
0
|
|
|
46.9
|
|
|
46.4
|
|
|||||
Commercial mortgage-backed
|
0
|
|
|
2,201.2
|
|
|
9.2
|
|
|
2,210.4
|
|
|
2,177.3
|
|
|||||
Other asset-backed
|
0
|
|
|
1,571.6
|
|
|
0
|
|
|
1,571.6
|
|
|
1,567.7
|
|
|||||
Subtotal asset-backed securities
|
0
|
|
|
5,494.6
|
|
|
9.2
|
|
|
5,503.8
|
|
|
5,464.2
|
|
|||||
Redeemable preferred stocks:
|
|
|
|
|
|
|
|
|
|
||||||||||
Financials
|
0
|
|
|
93.2
|
|
|
0
|
|
|
93.2
|
|
|
81.7
|
|
|||||
Utilities
|
0
|
|
|
53.8
|
|
|
0
|
|
|
53.8
|
|
|
65.2
|
|
|||||
Industrials
|
0
|
|
|
89.1
|
|
|
0
|
|
|
89.1
|
|
|
118.2
|
|
|||||
Subtotal redeemable preferred stocks
|
0
|
|
|
236.1
|
|
|
0
|
|
|
236.1
|
|
|
265.1
|
|
|||||
Total fixed maturities
|
1,321.0
|
|
|
12,259.3
|
|
|
9.2
|
|
|
13,589.5
|
|
|
13,409.6
|
|
|||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Nonredeemable preferred stocks:
|
|
|
|
|
|
|
|
|
|
||||||||||
Financials
|
156.5
|
|
|
702.0
|
|
|
0
|
|
|
858.5
|
|
|
745.5
|
|
|||||
Subtotal nonredeemable preferred stocks
|
156.5
|
|
|
702.0
|
|
|
0
|
|
|
858.5
|
|
|
745.5
|
|
|||||
Common equities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stocks
|
2,765.1
|
|
|
0
|
|
|
0
|
|
|
2,765.1
|
|
|
1,558.3
|
|
|||||
Other risk investments
|
0
|
|
|
0
|
|
|
0.3
|
|
|
0.3
|
|
|
0.3
|
|
|||||
Subtotal common equities
|
2,765.1
|
|
|
0
|
|
|
0.3
|
|
|
2,765.4
|
|
|
1,558.6
|
|
|||||
Total fixed maturities and equity securities
|
4,242.6
|
|
|
12,961.3
|
|
|
9.5
|
|
|
17,213.4
|
|
|
15,713.7
|
|
|||||
Short-term investments
|
5,041.2
|
|
|
125.2
|
|
|
0
|
|
|
5,166.4
|
|
|
5,166.4
|
|
|||||
Total portfolio
|
$
|
9,283.8
|
|
|
$
|
13,086.5
|
|
|
$
|
9.5
|
|
|
$
|
22,379.8
|
|
|
$
|
20,880.1
|
|
Debt
|
$
|
0
|
|
|
$
|
2,842.3
|
|
|
$
|
139.8
|
|
|
$
|
2,982.1
|
|
|
$
|
2,664.1
|
|
|
Fair Value
|
|
|
||||||||||||||||
(millions)
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
Cost
|
|
|||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government obligations
|
$
|
2,870.1
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
2,870.1
|
|
|
$
|
2,899.2
|
|
State and local government obligations
|
0
|
|
|
2,502.6
|
|
|
0
|
|
|
2,502.6
|
|
|
2,509.5
|
|
|||||
Foreign government obligations
|
24.5
|
|
|
0
|
|
|
0
|
|
|
24.5
|
|
|
24.5
|
|
|||||
Corporate debt securities
|
0
|
|
|
4,550.9
|
|
|
0
|
|
|
4,550.9
|
|
|
4,557.8
|
|
|||||
Subtotal
|
2,894.6
|
|
|
7,053.5
|
|
|
0
|
|
|
9,948.1
|
|
|
9,991.0
|
|
|||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential mortgage-backed
|
0
|
|
|
1,458.7
|
|
|
0
|
|
|
1,458.7
|
|
|
1,448.5
|
|
|||||
Agency residential pass-through obligations
|
0
|
|
|
40.6
|
|
|
0
|
|
|
40.6
|
|
|
41.2
|
|
|||||
Commercial mortgage-backed
|
0
|
|
|
2,253.1
|
|
|
0.3
|
|
|
2,253.4
|
|
|
2,266.9
|
|
|||||
Other asset-backed
|
0
|
|
|
2,351.1
|
|
|
0
|
|
|
2,351.1
|
|
|
2,350.7
|
|
|||||
Subtotal asset-backed securities
|
0
|
|
|
6,103.5
|
|
|
0.3
|
|
|
6,103.8
|
|
|
6,107.3
|
|
|||||
Redeemable preferred stocks:
|
|
|
|
|
|
|
|
|
|
||||||||||
Financials
|
0
|
|
|
59.5
|
|
|
0
|
|
|
59.5
|
|
|
59.8
|
|
|||||
Utilities
|
0
|
|
|
30.9
|
|
|
0
|
|
|
30.9
|
|
|
30.5
|
|
|||||
Industrials
|
0
|
|
|
101.5
|
|
|
0
|
|
|
101.5
|
|
|
98.5
|
|
|||||
Subtotal redeemable preferred stocks
|
0
|
|
|
191.9
|
|
|
0
|
|
|
191.9
|
|
|
188.8
|
|
|||||
Total fixed maturities
|
2,894.6
|
|
|
13,348.9
|
|
|
0.3
|
|
|
16,243.8
|
|
|
16,287.1
|
|
|||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Nonredeemable preferred stocks:
|
|
|
|
|
|
|
|
|
|
||||||||||
Financials
|
138.1
|
|
|
715.4
|
|
|
0
|
|
|
853.5
|
|
|
734.2
|
|
|||||
Subtotal nonredeemable preferred stocks
|
138.1
|
|
|
715.4
|
|
|
0
|
|
|
853.5
|
|
|
734.2
|
|
|||||
Common equities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stocks
|
2,812.0
|
|
|
0
|
|
|
0
|
|
|
2,812.0
|
|
|
1,437.1
|
|
|||||
Other risk investments
|
0
|
|
|
0
|
|
|
0.4
|
|
|
0.4
|
|
|
0.4
|
|
|||||
Subtotal common equities
|
2,812.0
|
|
|
0
|
|
|
0.4
|
|
|
2,812.4
|
|
|
1,437.5
|
|
|||||
Total fixed maturities and equity securities
|
5,844.7
|
|
|
14,064.3
|
|
|
0.7
|
|
|
19,909.7
|
|
|
18,458.8
|
|
|||||
Short-term investments
|
3,009.3
|
|
|
563.6
|
|
|
0
|
|
|
3,572.9
|
|
|
3,572.9
|
|
|||||
Total portfolio
|
$
|
8,854.0
|
|
|
$
|
14,627.9
|
|
|
$
|
0.7
|
|
|
$
|
23,482.6
|
|
|
$
|
22,031.7
|
|
Debt
|
$
|
0
|
|
|
$
|
3,188.5
|
|
|
$
|
127.3
|
|
|
$
|
3,315.8
|
|
|
$
|
3,148.2
|
|
|
Level 3 Fair Value
|
||||||||||||||||||||||||||||||
|
Three Months Ended June 30, 2017
|
||||||||||||||||||||||||||||||
(millions)
|
Fair Value at March 31, 2017
|
|
|
Calls/
Maturities/
Paydowns
|
|
|
Purchases
|
|
|
Sales
|
|
|
Net Realized (Gain) Loss on Sales
|
|
|
Change in Valuation
|
|
|
Net
Transfers
In (Out)
|
|
|
Fair Value at June 30, 2017
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial mortgage-backed
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Total fixed maturities
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Common equities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other risk investments
|
0.3
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0.3
|
|
||||||||
Total Level 3 securities
|
$
|
0.3
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Level 3 Fair Value
|
||||||||||||||||||||||||||||||
|
Six months ended June 30, 2017
|
||||||||||||||||||||||||||||||
(millions)
|
Fair Value at Dec. 31, 2016
|
|
|
Calls/
Maturities/
Paydowns
|
|
|
Purchases
|
|
|
Sales
|
|
|
Net Realized (Gain) Loss on Sales
|
|
|
Change in Valuation
|
|
|
Net
Transfers
In (Out)
|
|
|
Fair Value at June 30, 2017
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial mortgage-backed
|
$
|
0.3
|
|
|
$
|
(0.3
|
)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Total fixed maturities
|
0.3
|
|
|
(0.3
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Common equities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other risk investments
|
0.4
|
|
|
(0.1
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0.3
|
|
||||||||
Total Level 3 securities
|
$
|
0.7
|
|
|
$
|
(0.4
|
)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0.3
|
|
|
Level 3 Fair Value
|
||||||||||||||||||||||||||||||
|
Three Months Ended June 30, 2016
|
||||||||||||||||||||||||||||||
(millions)
|
Fair Value at March 31, 2016
|
|
|
Calls/
Maturities/ Paydowns |
|
|
Purchases
|
|
|
Sales
|
|
|
Net Realized (Gain) Loss on Sales
|
|
|
Change in
Valuation |
|
|
Net
Transfers In (Out) |
|
|
Fair Value at June 30, 2016
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial mortgage-backed
|
$
|
9.5
|
|
|
$
|
(0.3
|
)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
9.2
|
|
Total fixed maturities
|
9.5
|
|
|
(0.3
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
9.2
|
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Common equities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other risk investments
|
0.3
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0.3
|
|
||||||||
Total Level 3 securities
|
$
|
9.8
|
|
|
$
|
(0.3
|
)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
9.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Level 3 Fair Value
|
||||||||||||||||||||||||||||||
|
Six months ended June 30, 2016
|
||||||||||||||||||||||||||||||
(millions)
|
Fair Value at Dec. 31, 2015
|
|
|
Calls/
Maturities/
Paydowns
|
|
|
Purchases
|
|
|
Sales
|
|
|
Net Realized (Gain) Loss on Sales
|
|
|
Change in
Valuation
|
|
|
Net
Transfers
In (Out)
|
|
|
Fair Value at June 30, 2016
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial mortgage-backed
|
$
|
9.9
|
|
|
$
|
(0.6
|
)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
(0.1
|
)
|
|
$
|
0
|
|
|
$
|
9.2
|
|
Total fixed maturities
|
9.9
|
|
|
(0.6
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(0.1
|
)
|
|
0
|
|
|
9.2
|
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Common equities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other risk investments
|
0.3
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0.3
|
|
||||||||
Total Level 3 securities
|
$
|
10.2
|
|
|
$
|
(0.6
|
)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
(0.1
|
)
|
|
$
|
0
|
|
|
$
|
9.5
|
|
|
Quantitative Information about Level 3 Fair Value Measurements
|
||||||||
($ in millions)
|
Fair Value at June 30, 2017
|
|
|
Valuation Technique
|
|
Unobservable Input
|
|
Unobservable
Input Assumption |
|
Fixed maturities:
|
|
|
|
|
|
|
|
||
Asset-backed securities:
|
|
|
|
|
|
|
|
||
Commercial mortgage-backed
|
$
|
0
|
|
|
NA
|
|
NA
|
|
NA
|
Subtotal Level 3 securities
|
0
|
|
|
|
|
|
|
|
|
Pricing exemption securities
1
|
0.3
|
|
|
|
|
|
|
|
|
Total Level 3 securities
|
$
|
0.3
|
|
|
|
|
|
|
|
|
Quantitative Information about Level 3 Fair Value Measurements
|
|||||||||
($ in millions)
|
Fair Value at June 30, 2016
|
|
|
Valuation Technique
|
|
Unobservable Input
|
|
Unobservable
Input Assumption |
|
|
Fixed maturities:
|
|
|
|
|
|
|
|
|||
Asset-backed securities:
|
|
|
|
|
|
|
|
|||
Commercial mortgage-backed
|
$
|
9.2
|
|
|
External vendor
|
|
Prepayment rate
1
|
|
0
|
%
|
Subtotal Level 3 securities
|
9.2
|
|
|
|
|
|
|
|
||
Pricing exemption securities
2
|
0.3
|
|
|
|
|
|
|
|
||
Total Level 3 securities
|
$
|
9.5
|
|
|
|
|
|
|
|
|
Quantitative Information about Level 3 Fair Value Measurements
|
|||||||||
($ in millions)
|
Fair Value at Dec. 31, 2016
|
|
|
Valuation Technique
|
|
Unobservable Input
|
|
Unobservable
Input Assumption |
|
|
Fixed maturities:
|
|
|
|
|
|
|
|
|||
Asset-backed securities:
|
|
|
|
|
|
|
|
|||
Commercial mortgage-backed
|
$
|
0.3
|
|
|
External vendor
|
|
Prepayment rate
1
|
|
0
|
%
|
Subtotal Level 3 securities
|
0.3
|
|
|
|
|
|
|
|
||
Pricing exemption securities
2
|
0.4
|
|
|
|
|
|
|
|
||
Total Level 3 securities
|
$
|
0.7
|
|
|
|
|
|
|
|
|
June 30, 2017
|
|
June 30, 2016
|
|
December 31, 2016
|
||||||||||||||||||
(millions)
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
||||||||||||
3.75% Senior Notes due 2021
|
$
|
498.6
|
|
|
$
|
528.0
|
|
|
$
|
498.3
|
|
|
$
|
547.7
|
|
|
$
|
498.4
|
|
|
$
|
528.8
|
|
2.45% Senior Notes due 2027
|
496.0
|
|
|
474.2
|
|
|
0
|
|
|
0
|
|
|
495.8
|
|
|
464.6
|
|
||||||
6 5/8% Senior Notes due 2029
|
296.0
|
|
|
389.0
|
|
|
295.8
|
|
|
401.8
|
|
|
295.9
|
|
|
380.1
|
|
||||||
6.25% Senior Notes due 2032
|
395.2
|
|
|
522.7
|
|
|
395.1
|
|
|
535.0
|
|
|
395.2
|
|
|
499.0
|
|
||||||
4.35% Senior Notes due 2044
|
346.5
|
|
|
376.5
|
|
|
346.4
|
|
|
400.3
|
|
|
346.4
|
|
|
362.3
|
|
||||||
3.70% Senior Notes due 2045
|
395.2
|
|
|
389.7
|
|
|
395.1
|
|
|
412.0
|
|
|
395.1
|
|
|
372.5
|
|
||||||
4.125% Senior Notes due 2047
|
841.1
|
|
|
884.3
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
6.70% Fixed-to-Floating Rate Junior Subordinated Debentures due 2067
|
0
|
|
|
0
|
|
|
593.6
|
|
|
545.5
|
|
|
594.1
|
|
|
581.2
|
|
||||||
Other debt instruments
|
114.8
|
|
|
114.8
|
|
|
139.8
|
|
|
139.8
|
|
|
127.3
|
|
|
127.3
|
|
||||||
Total
|
$
|
3,383.4
|
|
|
$
|
3,679.2
|
|
|
$
|
2,664.1
|
|
|
$
|
2,982.1
|
|
|
$
|
3,148.2
|
|
|
$
|
3,315.8
|
|
|
June 30, 2017
|
|
June 30, 2016
|
|
December 31, 2016
|
|
|||||||||||||||
($ in millions)
Type of debt instrument
|
Number of Instruments
|
|
|
Carrying
Value
|
|
|
Number of Instruments
|
|
|
Carrying
Value |
|
|
Number of Instruments
|
|
|
Carrying
Value |
|
Stated Maturity Date(s)
|
|||
Term loans
|
2
|
|
|
$
|
49.6
|
|
|
2
|
|
|
$
|
74.6
|
|
|
2
|
|
|
$
|
62.1
|
|
December 2018 and 2019
|
Junior subordinated notes
1
|
2
|
|
|
41.2
|
|
|
2
|
|
|
41.2
|
|
|
2
|
|
|
41.2
|
|
June 2036 and 2037
|
|||
Senior notes
|
4
|
|
|
24.0
|
|
|
4
|
|
|
24.0
|
|
|
4
|
|
|
24.0
|
|
Various
2
|
|||
Total
|
|
|
$
|
114.8
|
|
|
|
|
$
|
139.8
|
|
|
|
|
$
|
127.3
|
|
|
|
June 30,
|
||||||
(millions)
|
2017
|
|
2016
|
||||
Balance, Beginning of period
|
$
|
11,368.0
|
|
|
$
|
10,039.0
|
|
Less reinsurance recoverables on unpaid losses
|
1,801.0
|
|
|
1,442.7
|
|
||
Net balance, Beginning of period
|
9,567.0
|
|
|
8,596.3
|
|
||
Net loss and loss adjustment expense reserves disposed
1
|
—
|
|
|
(2.5
|
)
|
||
Total beginning reserves
|
9,567.0
|
|
|
8,593.8
|
|
||
Incurred related to:
|
|
|
|
||||
Current year
|
8,804.1
|
|
|
8,126.8
|
|
||
Prior years
|
74.2
|
|
|
29.6
|
|
||
Total incurred
|
8,878.3
|
|
|
8,156.4
|
|
||
Paid related to:
|
|
|
|
||||
Current year
|
4,951.0
|
|
|
4,611.5
|
|
||
Prior years
|
3,381.8
|
|
|
3,059.8
|
|
||
Total paid
|
8,332.8
|
|
|
7,671.3
|
|
||
Net balance, End of period
|
10,112.5
|
|
|
9,078.9
|
|
||
Plus reinsurance recoverables on unpaid losses
|
1,947.9
|
|
|
1,595.9
|
|
||
Balance, End of period
|
$
|
12,060.4
|
|
|
$
|
10,674.8
|
|
•
|
Approximately
$56 million
of the unfavorable prior year reserve development was attributable to accident year 2016 with the balance attributable to accident year 2015.
|
•
|
Our commercial and personal auto businesses incurred about
$102 million
of unfavorable loss and loss adjustment expense (LAE) reserve development for the first six months of 2017, partially offset by the favorable loss and LAE reserve development of about
$28 million
in our special lines and Property businesses.
|
•
|
Our Agency and Direct auto businesses incurred about
$65 million
and
$29 million
, respectively, of the total unfavorable reserve development, primarily due to an increase in costs related to property damage, more late reported bodily injury claims than anticipated, and higher LAE costs.
|
•
|
Our Property business experienced about
$20 million
in favorable development primarily due to the identification of prior year losses eligible to be ceded under our catastrophe bond reinsurance program.
|
•
|
Approximately
$16 million
of the unfavorable prior year reserve development was attributable to accident year 2015 and
$23 million
of the unfavorable development was attributable to accident year 2014; we had favorable development for accident year 2013 and prior accident years.
|
•
|
Our commercial and personal auto businesses incurred unfavorable loss and LAE reserve development for the first six months of 2016, partially offset by the favorable loss and LAE reserve development in our Property business of
$22 million
. In our Property business, both the severity and frequency of late reported claims was less than anticipated.
|
•
|
Our personal auto product developed unfavorably
$29 million
primarily from our Agency auto businesses.
|
•
|
Our Commercial Lines business made up about
$22 million
of the unfavorable development.
|
•
|
Our personal auto and Commercial Lines businesses 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.
|
•
|
In addition, our Commercial Lines business experienced unfavorable case reserve development for accident year 2014 primarily due to a higher severity than anticipated on our largest limits.
|
|
Six Months Ended June 30,
|
||||||
(millions)
|
2017
|
|
|
2016
|
|
||
Income taxes
|
$
|
494.2
|
|
|
$
|
275.4
|
|
Interest
|
73.3
|
|
|
70.1
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||||||||||
(millions)
|
Revenues
|
|
Pretax
Profit
(Loss)
|
|
Revenues
|
|
Pretax
Profit
(Loss)
|
|
Revenues
|
|
Pretax
Profit
(Loss)
|
|
Revenues
|
|
Pretax
Profit
(Loss)
|
||||||||||||||||
Personal Lines
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Agency
|
$
|
2,752.5
|
|
|
$
|
205.5
|
|
|
$
|
2,423.3
|
|
|
$
|
84.5
|
|
|
$
|
5,384.0
|
|
|
$
|
455.2
|
|
|
$
|
4,771.2
|
|
|
$
|
255.9
|
|
Direct
|
2,650.0
|
|
|
162.7
|
|
|
2,334.8
|
|
|
73.6
|
|
|
5,173.7
|
|
|
338.0
|
|
|
4,555.5
|
|
|
153.1
|
|
||||||||
Total Personal Lines
1
|
5,402.5
|
|
|
368.2
|
|
|
4,758.1
|
|
|
158.1
|
|
|
10,557.7
|
|
|
793.2
|
|
|
9,326.7
|
|
|
409.0
|
|
||||||||
Commercial Lines
|
671.7
|
|
|
56.2
|
|
|
593.4
|
|
|
31.2
|
|
|
1,317.2
|
|
|
123.6
|
|
|
1,142.2
|
|
|
92.3
|
|
||||||||
Property
2
|
239.1
|
|
|
3.7
|
|
|
210.3
|
|
|
(13.6
|
)
|
|
465.1
|
|
|
11.5
|
|
|
410.3
|
|
|
(38.1
|
)
|
||||||||
Other indemnity
|
0
|
|
|
(0.1
|
)
|
|
0
|
|
|
(0.1
|
)
|
|
0
|
|
|
(0.3
|
)
|
|
0
|
|
|
(0.8
|
)
|
||||||||
Total underwriting operations
|
6,313.3
|
|
|
428.0
|
|
|
5,561.8
|
|
|
175.6
|
|
|
12,340.0
|
|
|
928.0
|
|
|
10,879.2
|
|
|
462.4
|
|
||||||||
Fees and other revenues
3
|
88.8
|
|
|
NA
|
|
|
82.5
|
|
|
NA
|
|
|
174.0
|
|
|
NA
|
|
|
161.4
|
|
|
NA
|
|
||||||||
Service businesses
|
32.7
|
|
|
5.7
|
|
|
26.5
|
|
|
2.8
|
|
|
61.2
|
|
|
8.3
|
|
|
51.5
|
|
|
6.2
|
|
||||||||
Investments
4
|
170.9
|
|
|
164.3
|
|
|
146.9
|
|
|
141.6
|
|
|
352.0
|
|
|
339.8
|
|
|
283.1
|
|
|
273.0
|
|
||||||||
Gains on extinguishment of debt
|
0
|
|
|
0
|
|
|
1.6
|
|
|
1.6
|
|
|
0.2
|
|
|
0.2
|
|
|
1.6
|
|
|
1.6
|
|
||||||||
Interest expense
|
NA
|
|
|
(43.4
|
)
|
|
NA
|
|
|
(34.3
|
)
|
|
NA
|
|
|
(80.2
|
)
|
|
NA
|
|
|
(68.5
|
)
|
||||||||
Consolidated total
|
$
|
6,605.7
|
|
|
$
|
554.6
|
|
|
$
|
5,819.3
|
|
|
$
|
287.3
|
|
|
$
|
12,927.4
|
|
|
$
|
1,196.1
|
|
|
$
|
11,376.8
|
|
|
$
|
674.7
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||
|
Under-writing
Margin |
|
Combined
Ratio
|
|
Under-writing
Margin |
|
Combined
Ratio
|
|
Under-writing
Margin
|
|
Combined
Ratio
|
|
Under-writing
Margin
|
|
Combined
Ratio
|
||||
Personal Lines
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Agency
|
7.5
|
%
|
|
92.5
|
|
3.5
|
%
|
|
96.5
|
|
8.5
|
%
|
|
91.5
|
|
5.4
|
%
|
|
94.6
|
Direct
|
6.1
|
|
|
93.9
|
|
3.2
|
|
|
96.8
|
|
6.5
|
|
|
93.5
|
|
3.4
|
|
|
96.6
|
Total Personal Lines
|
6.8
|
|
|
93.2
|
|
3.3
|
|
|
96.7
|
|
7.5
|
|
|
92.5
|
|
4.4
|
|
|
95.6
|
Commercial Lines
|
8.4
|
|
|
91.6
|
|
5.3
|
|
|
94.7
|
|
9.4
|
|
|
90.6
|
|
8.1
|
|
|
91.9
|
Property
1
|
1.5
|
|
|
98.5
|
|
(6.5)
|
|
|
106.5
|
|
2.5
|
|
|
97.5
|
|
(9.3)
|
|
|
109.3
|
Other indemnity
2
|
NM
|
|
|
NM
|
|
NM
|
|
|
NM
|
|
NM
|
|
|
NM
|
|
NM
|
|
NM
|
|
Total underwriting operations
|
6.8
|
|
|
93.2
|
|
3.2
|
|
|
96.8
|
|
7.5
|
|
|
92.5
|
|
4.3
|
|
|
95.7
|
(millions, except per share amounts)
|
|
Amount
|
||||||
Dividend Type
|
Declared
|
Paid
|
Per Share
|
|
Total
1
|
|
||
Annual – Variable
|
December 2016
|
February 2017
|
$
|
0.6808
|
|
$
|
395.4
|
|
Annual – Variable
|
December 2015
|
February 2016
|
$
|
0.8882
|
|
$
|
519.2
|
|
|
|
|
|
|
|
|
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 March 31, 2017
|
$
|
1,645.9
|
|
|
$
|
(578.4
|
)
|
|
$
|
1,067.5
|
|
|
$
|
1,072.0
|
|
|
$
|
(7.1
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
3.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Other comprehensive income (loss) before reclassifications:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Investment securities
|
177.2
|
|
|
(62.1
|
)
|
|
115.1
|
|
|
115.1
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
Net non-credit related OTTI losses, adjusted for valuation changes
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
Forecasted transactions
|
(12.0
|
)
|
|
4.2
|
|
|
(7.8
|
)
|
|
0
|
|
|
(7.8
|
)
|
|
0
|
|
|
0
|
|
|||||||
Foreign currency translation adjustment
|
(0.2
|
)
|
|
0.1
|
|
|
(0.1
|
)
|
|
0
|
|
|
0
|
|
|
(0.1
|
)
|
|
0
|
|
|||||||
Loss attributable to noncontrolling interest (NCI)
|
(1.9
|
)
|
|
0.6
|
|
|
(1.3
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(1.3
|
)
|
|||||||
Total other comprehensive income (loss) before reclassifications
|
163.1
|
|
|
(57.2
|
)
|
|
105.9
|
|
|
115.1
|
|
|
(7.8
|
)
|
|
(0.1
|
)
|
|
(1.3
|
)
|
|||||||
Less: Reclassification adjustment for amounts realized in net income by income statement line item:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net impairment losses recognized in earnings
|
(2.6
|
)
|
|
0.9
|
|
|
(1.7
|
)
|
|
(1.7
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
Net realized gains (losses) on securities
|
37.2
|
|
|
(13.0
|
)
|
|
24.2
|
|
|
24.2
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
Interest expense
|
0.3
|
|
|
(0.1
|
)
|
|
0.2
|
|
|
0
|
|
|
0.2
|
|
|
0
|
|
|
0
|
|
|||||||
Total reclassification adjustment for amounts realized in net income
|
34.9
|
|
|
(12.2
|
)
|
|
22.7
|
|
|
22.5
|
|
|
0.2
|
|
|
0
|
|
|
0
|
|
|||||||
Total other comprehensive income (loss)
|
128.2
|
|
|
(45.0
|
)
|
|
83.2
|
|
|
92.6
|
|
|
(8.0
|
)
|
|
(0.1
|
)
|
|
(1.3
|
)
|
|||||||
Balance at June 30, 2017
|
$
|
1,774.1
|
|
|
$
|
(623.4
|
)
|
|
$
|
1,150.7
|
|
|
$
|
1,164.6
|
|
|
$
|
(15.1
|
)
|
|
$
|
(0.9
|
)
|
|
$
|
2.1
|
|
|
|
|
|
|
|
|
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, 2016
|
$
|
1,439.5
|
|
|
$
|
(506.1
|
)
|
|
$
|
933.4
|
|
|
$
|
939.6
|
|
|
$
|
(9.4
|
)
|
|
$
|
(1.1
|
)
|
|
$
|
4.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Other comprehensive income (loss) before reclassifications:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Investment securities
|
431.7
|
|
|
(151.3
|
)
|
|
280.4
|
|
|
280.4
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
Net non-credit related OTTI losses, adjusted for valuation changes
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
Forecasted transactions
|
(8.0
|
)
|
|
2.8
|
|
|
(5.2
|
)
|
|
0
|
|
|
(5.2
|
)
|
|
0
|
|
|
0
|
|
|||||||
Foreign currency translation adjustment
|
0.3
|
|
|
(0.1
|
)
|
|
0.2
|
|
|
0
|
|
|
0
|
|
|
0.2
|
|
|
0
|
|
|||||||
Loss attributable to noncontrolling interest (NCI)
|
(3.4
|
)
|
|
1.2
|
|
|
(2.2
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(2.2
|
)
|
|||||||
Total other comprehensive income (loss) before reclassifications
|
420.6
|
|
|
(147.4
|
)
|
|
273.2
|
|
|
280.4
|
|
|
(5.2
|
)
|
|
0.2
|
|
|
(2.2
|
)
|
|||||||
Less: Reclassification adjustment for amounts realized in net income by income statement line item:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net impairment losses recognized in earnings
|
(3.6
|
)
|
|
1.3
|
|
|
(2.3
|
)
|
|
(2.3
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
Net realized gains (losses) on securities
|
88.8
|
|
|
(31.1
|
)
|
|
57.7
|
|
|
57.7
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
Interest expense
|
0.8
|
|
|
(0.3
|
)
|
|
0.5
|
|
|
0
|
|
|
0.5
|
|
|
0
|
|
|
0
|
|
|||||||
Total reclassification adjustment for amounts realized in net income
|
86.0
|
|
|
(30.1
|
)
|
|
55.9
|
|
|
55.4
|
|
|
0.5
|
|
|
0
|
|
|
0
|
|
|||||||
Total other comprehensive income (loss)
|
334.6
|
|
|
(117.3
|
)
|
|
217.3
|
|
|
225.0
|
|
|
(5.7
|
)
|
|
0.2
|
|
|
(2.2
|
)
|
|||||||
Balance at June 30, 2017
|
$
|
1,774.1
|
|
|
$
|
(623.4
|
)
|
|
$
|
1,150.7
|
|
|
$
|
1,164.6
|
|
|
$
|
(15.1
|
)
|
|
$
|
(0.9
|
)
|
|
$
|
2.1
|
|
|
|
|
|
|
|
|
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 March 31, 2016
|
$
|
1,338.7
|
|
|
$
|
(470.7
|
)
|
|
$
|
868.0
|
|
|
$
|
878.5
|
|
|
$
|
(8.5
|
)
|
|
$
|
(1.0
|
)
|
|
$
|
(1.0
|
)
|
Other comprehensive income (loss) before reclassifications:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Investment securities
|
180.9
|
|
|
(63.5
|
)
|
|
117.4
|
|
|
117.4
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
Net non-credit related OTTI losses, adjusted for valuation changes
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
Forecasted transactions
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
Foreign currency translation adjustment
|
(0.1
|
)
|
|
0
|
|
|
(0.1
|
)
|
|
0
|
|
|
0
|
|
|
(0.1
|
)
|
|
0
|
|
|||||||
Loss attributable to noncontrolling interest (NCI)
|
(2.2
|
)
|
|
0.8
|
|
|
(1.4
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(1.4
|
)
|
|||||||
Total other comprehensive income (loss) before reclassifications
|
178.6
|
|
|
(62.7
|
)
|
|
115.9
|
|
|
117.4
|
|
|
0
|
|
|
(0.1
|
)
|
|
(1.4
|
)
|
|||||||
Less: Reclassification adjustment for amounts realized in net income by income statement line item:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net impairment losses recognized in earnings
|
(0.2
|
)
|
|
0.1
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
Net realized gains (losses) on securities
|
40.0
|
|
|
(14.1
|
)
|
|
25.9
|
|
|
25.9
|
|
|
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
|
40.3
|
|
|
(14.2
|
)
|
|
26.1
|
|
|
25.8
|
|
|
0.3
|
|
|
0
|
|
|
0
|
|
|||||||
Total other comprehensive income (loss)
|
138.3
|
|
|
(48.5
|
)
|
|
89.8
|
|
|
91.6
|
|
|
(0.3
|
)
|
|
(0.1
|
)
|
|
(1.4
|
)
|
|||||||
Balance at June 30, 2016
|
$
|
1,477.0
|
|
|
$
|
(519.2
|
)
|
|
$
|
957.8
|
|
|
$
|
970.1
|
|
|
$
|
(8.8
|
)
|
|
$
|
(1.1
|
)
|
|
$
|
(2.4
|
)
|
|
|
|
|
|
|
|
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
|
323.6
|
|
|
(113.8
|
)
|
|
209.8
|
|
|
209.8
|
|
|
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
|
0.6
|
|
|
(0.2
|
)
|
|
0.4
|
|
|
0
|
|
|
0
|
|
|
0.4
|
|
|
0
|
|
|||||||
Loss attributable to noncontrolling interest (NCI)
|
(5.5
|
)
|
|
2.0
|
|
|
(3.5
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(3.5
|
)
|
|||||||
Total other comprehensive income (loss) before reclassifications
|
318.6
|
|
|
(111.9
|
)
|
|
206.7
|
|
|
209.8
|
|
|
0
|
|
|
0.4
|
|
|
(3.5
|
)
|
|||||||
Less: Reclassification adjustment for amounts realized in net income by income statement line item:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net impairment losses recognized in earnings
|
(0.2
|
)
|
|
0.1
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
Net realized gains (losses) on securities
|
75.3
|
|
|
(26.5
|
)
|
|
48.8
|
|
|
48.8
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
Interest expense
|
1.0
|
|
|
(0.4
|
)
|
|
0.6
|
|
|
0
|
|
|
0.6
|
|
|
0
|
|
|
0
|
|
|||||||
Total reclassification adjustment for amounts realized in net income
|
76.1
|
|
|
(26.8
|
)
|
|
49.3
|
|
|
48.7
|
|
|
0.6
|
|
|
0
|
|
|
0
|
|
|||||||
Total other comprehensive income (loss)
|
242.5
|
|
|
(85.1
|
)
|
|
157.4
|
|
|
161.1
|
|
|
(0.6
|
)
|
|
0.4
|
|
|
(3.5
|
)
|
|||||||
Balance at June 30, 2016
|
$
|
1,477.0
|
|
|
$
|
(519.2
|
)
|
|
$
|
957.8
|
|
|
$
|
970.1
|
|
|
$
|
(8.8
|
)
|
|
$
|
(1.1
|
)
|
|
$
|
(2.4
|
)
|
(millions)
|
June 30, 2017
|
|
|
June 30, 2016
|
|
|
December 31, 2016
|
|
|||
Balance, Beginning of period
|
$
|
483.7
|
|
|
$
|
464.9
|
|
|
$
|
464.9
|
|
Net income attributable to NCI
|
11.1
|
|
|
4.5
|
|
|
26.2
|
|
|||
Other comprehensive income (loss) attributable to NCI
|
2.2
|
|
|
3.5
|
|
|
(3.2
|
)
|
|||
Exercise of employee stock options
|
3.4
|
|
|
0
|
|
|
0
|
|
|||
Change in redemption value of NCI
|
1.4
|
|
|
(6.1
|
)
|
|
(4.2
|
)
|
|||
Balance, End of period
|
$
|
501.8
|
|
|
$
|
466.8
|
|
|
$
|
483.7
|
|
(millions)
|
June 30, 2017
|
|
|
June 30, 2016
|
|
|
December 31, 2016
|
|
|||
Intangible assets subject to amortization
|
$
|
389.4
|
|
|
$
|
451.4
|
|
|
$
|
420.4
|
|
Indefinite-lived intangible assets
1
|
12.4
|
|
|
12.4
|
|
|
12.4
|
|
|||
Total
|
$
|
401.8
|
|
|
$
|
463.8
|
|
|
$
|
432.8
|
|
(millions)
|
June 30, 2017
|
|
June 30, 2016
|
|
December 31, 2016
|
||||||||||||||||||||||||
Category
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
|||||||||
Policies in force
|
$
|
256.2
|
|
$
|
82.4
|
|
$
|
173.8
|
|
|
$
|
256.2
|
|
$
|
45.9
|
|
$
|
210.3
|
|
|
$
|
256.2
|
|
$
|
64.1
|
|
$
|
192.1
|
|
Agency relationships
|
159.2
|
|
25.6
|
|
133.6
|
|
|
159.2
|
|
14.2
|
|
145.0
|
|
|
159.2
|
|
19.9
|
|
139.3
|
|
|||||||||
Software rights
|
79.1
|
|
24.1
|
|
55.0
|
|
|
79.1
|
|
13.4
|
|
65.7
|
|
|
79.1
|
|
18.8
|
|
60.3
|
|
|||||||||
Trade name
|
34.8
|
|
7.8
|
|
27.0
|
|
|
34.8
|
|
4.4
|
|
30.4
|
|
|
34.8
|
|
6.1
|
|
28.7
|
|
|||||||||
Total
|
$
|
529.3
|
|
$
|
139.9
|
|
$
|
389.4
|
|
|
$
|
529.3
|
|
$
|
77.9
|
|
$
|
451.4
|
|
|
$
|
529.3
|
|
$
|
108.9
|
|
$
|
420.4
|
|
•
|
Repurchases of our common shares.
In accordance with our financial policies, we will repurchase our common shares when it is prudent to do so. We had no open market repurchases of our common shares during the first six months of 2017. We did, however, repurchase shares in conjunction with our incentive compensation plans during 2017. In the second quarter of 2017, the Board of Directors approved a new authorization to repurchase up to 25 million common shares. This authorization canceled and replaced the shares that remained under the Board’s June 2011 authorization. As of
June 30, 2017
, we had 25.0 million shares remaining under our 2017 Board repurchase authorization. The following table shows our share repurchase activity during the respective periods:
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(millions, except per share amounts)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Total number of shares purchased
|
0.1
|
|
|
1.3
|
|
|
0.7
|
|
|
3.6
|
|
||||
Total cost
|
$
|
2.7
|
|
|
$
|
41.8
|
|
|
$
|
24.1
|
|
|
$
|
112.1
|
|
Average price paid per share
|
$
|
40.47
|
|
|
$
|
32.57
|
|
|
$
|
36.32
|
|
|
$
|
31.53
|
|
•
|
Dividends.
As part of our capital management activities, in February
2017
and
2016
, we paid annual variable dividends of $0.6808 per share and $0.8882 per share, respectively, which were each declared in December of the prior year.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||||||
|
Underwriting
Profit (Loss)
|
|
Underwriting
Profit (Loss)
|
|
Underwriting
Profit (Loss) |
|
Underwriting
Profit (Loss) |
||||||||||||||||||||
($ in millions)
|
$
|
|
Margin
|
|
$
|
|
Margin
|
|
$
|
|
Margin
|
|
$
|
|
Margin
|
||||||||||||
Personal Lines
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agency
|
$
|
205.5
|
|
|
7.5
|
%
|
|
$
|
84.5
|
|
|
3.5
|
%
|
|
$
|
455.2
|
|
|
8.5
|
%
|
|
$
|
255.9
|
|
|
5.4
|
%
|
Direct
|
162.7
|
|
|
6.1
|
|
|
73.6
|
|
|
3.2
|
|
|
338.0
|
|
|
6.5
|
|
|
153.1
|
|
|
3.4
|
|
||||
Total Personal Lines
|
368.2
|
|
|
6.8
|
|
|
158.1
|
|
|
3.3
|
|
|
793.2
|
|
|
7.5
|
|
|
409.0
|
|
|
4.4
|
|
||||
Commercial Lines
|
56.2
|
|
|
8.4
|
|
|
31.2
|
|
|
5.3
|
|
|
123.6
|
|
|
9.4
|
|
|
92.3
|
|
|
8.1
|
|
||||
Property
1
|
3.7
|
|
|
1.5
|
|
|
(13.6
|
)
|
|
(6.5
|
)
|
|
11.5
|
|
|
2.5
|
|
|
(38.1
|
)
|
|
(9.3
|
)
|
||||
Other indemnity
2
|
(0.1
|
)
|
|
NM
|
|
|
(0.1
|
)
|
|
NM
|
|
|
(0.3
|
)
|
|
NM
|
|
|
(0.8
|
)
|
|
NM
|
|
||||
Total underwriting operations
|
$
|
428.0
|
|
|
6.8
|
%
|
|
$
|
175.6
|
|
|
3.2
|
%
|
|
$
|
928.0
|
|
|
7.5
|
%
|
|
$
|
462.4
|
|
|
4.3
|
%
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
Underwriting Performance
1
|
2017
|
|
|
2016
|
|
|
Change
|
|
2017
|
|
|
2016
|
|
|
Change
|
|
Personal Lines—Agency
|
|
|
|
|
|
|
|
|
|
|
||||||
Loss & loss adjustment expense ratio
|
73.0
|
|
|
76.8
|
|
|
(3.8
|
) pts.
|
71.9
|
|
|
75.0
|
|
|
(3.1
|
) pts.
|
Underwriting expense ratio
|
19.5
|
|
|
19.7
|
|
|
(0.2
|
) pts.
|
19.6
|
|
|
19.6
|
|
|
0 pts.
|
|
Combined ratio
|
92.5
|
|
|
96.5
|
|
|
(4.0
|
) pts.
|
91.5
|
|
|
94.6
|
|
|
(3.1
|
) pts.
|
Personal Lines—Direct
|
|
|
|
|
|
|
|
|
|
|
||||||
Loss & loss adjustment expense ratio
|
75.0
|
|
|
77.3
|
|
|
(2.3
|
) pts.
|
73.8
|
|
|
76.4
|
|
|
(2.6
|
) pts.
|
Underwriting expense ratio
|
18.9
|
|
|
19.5
|
|
|
(0.6
|
) pts.
|
19.7
|
|
|
20.2
|
|
|
(0.5
|
) pts.
|
Combined ratio
|
93.9
|
|
|
96.8
|
|
|
(2.9
|
) pts.
|
93.5
|
|
|
96.6
|
|
|
(3.1
|
) pts.
|
Total Personal Lines
|
|
|
|
|
|
|
|
|
|
|
||||||
Loss & loss adjustment expense ratio
|
74.0
|
|
|
77.1
|
|
|
(3.1
|
) pts.
|
72.8
|
|
|
75.7
|
|
|
(2.9
|
) pts.
|
Underwriting expense ratio
|
19.2
|
|
|
19.6
|
|
|
(0.4
|
) pts.
|
19.7
|
|
|
19.9
|
|
|
(0.2
|
) pts.
|
Combined ratio
|
93.2
|
|
|
96.7
|
|
|
(3.5
|
) pts.
|
92.5
|
|
|
95.6
|
|
|
(3.1
|
) pts.
|
Commercial Lines
|
|
|
|
|
|
|
|
|
|
|
||||||
Loss & loss adjustment expense ratio
|
69.4
|
|
|
71.8
|
|
|
(2.4
|
) pts.
|
68.5
|
|
|
69.2
|
|
|
(0.7
|
) pts.
|
Underwriting expense ratio
|
22.2
|
|
|
22.9
|
|
|
(0.7
|
) pts.
|
22.1
|
|
|
22.7
|
|
|
(0.6
|
) pts.
|
Combined ratio
|
91.6
|
|
|
94.7
|
|
|
(3.1
|
) pts.
|
90.6
|
|
|
91.9
|
|
|
(1.3
|
) pts.
|
Property
|
|
|
|
|
|
|
|
|
|
|
||||||
Loss & loss adjustment expense ratio
|
63.6
|
|
|
71.3
|
|
|
(7.7
|
) pts.
|
61.5
|
|
|
74.5
|
|
|
(13.0
|
) pts.
|
Underwriting expense ratio
2
|
34.9
|
|
|
35.2
|
|
|
(0.3
|
) pts.
|
36.0
|
|
|
34.8
|
|
|
1.2
|
pts.
|
Combined ratio
2
|
98.5
|
|
|
106.5
|
|
|
(8.0
|
) pts.
|
97.5
|
|
|
109.3
|
|
|
(11.8
|
) pts.
|
Total Underwriting Operations
3
|
|
|
|
|
|
|
|
|
|
|
||||||
Loss & loss adjustment expense ratio
|
73.1
|
|
|
76.3
|
|
|
(3.2
|
) pts.
|
72.0
|
|
|
74.9
|
|
|
(2.9
|
) pts.
|
Underwriting expense ratio
|
20.1
|
|
|
20.5
|
|
|
(0.4
|
) pts.
|
20.5
|
|
|
20.8
|
|
|
(0.3
|
) pts.
|
Combined ratio
|
93.2
|
|
|
96.8
|
|
|
(3.6
|
) pts.
|
92.5
|
|
|
95.7
|
|
|
(3.2
|
) pts.
|
Accident year loss & loss adjustment expense ratio
4
|
73.7
|
|
|
76.9
|
|
|
(3.2
|
) pts.
|
71.4
|
|
|
74.6
|
|
|
(3.2
|
) pts.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(millions)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Change in net loss and LAE reserves
|
$
|
334.0
|
|
|
$
|
303.4
|
|
|
$
|
545.5
|
|
|
$
|
485.1
|
|
Paid losses and LAE
|
4,280.9
|
|
|
3,939.6
|
|
|
8,332.8
|
|
|
7,671.3
|
|
||||
Total incurred losses and LAE
|
$
|
4,614.9
|
|
|
$
|
4,243.0
|
|
|
$
|
8,878.3
|
|
|
$
|
8,156.4
|
|
•
|
Bodily injury increased about 2% for the second quarter and 4% for the first six months of 2017.
|
•
|
Auto property damage increased about 6% for both periods, in part reflecting closures of claims inventory at a pace in excess of historical norms.
|
•
|
Collision decreased about 2% for both periods.
|
•
|
Personal injury protection (PIP) increased about 13% for the second quarter and 10% year to date, primarily in Michigan.
|
•
|
Bodily injury and property damage decreased about 1% for the second quarter and 2% for the first six months of 2017.
|
•
|
Collision decreased about 3% for the second quarter and 4% year to date.
|
•
|
PIP decreased about 6% for both periods.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
($ in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
ACTUARIAL ADJUSTMENTS
|
|
|
|
|
|
|
|
||||||||
Reserve decrease (increase)
|
|
|
|
|
|
|
|
||||||||
Prior accident years
|
$
|
45.5
|
|
|
$
|
23.9
|
|
|
$
|
70.9
|
|
|
$
|
47.7
|
|
Current accident year
|
(2.9
|
)
|
|
(4.6
|
)
|
|
(16.4
|
)
|
|
(2.7
|
)
|
||||
Calendar year actuarial adjustment
|
$
|
42.6
|
|
|
$
|
19.3
|
|
|
$
|
54.5
|
|
|
$
|
45.0
|
|
PRIOR ACCIDENT YEARS DEVELOPMENT
|
|
|
|
|
|
|
|
||||||||
Favorable (unfavorable)
|
|
|
|
|
|
|
|
||||||||
Actuarial adjustment
|
$
|
45.5
|
|
|
$
|
23.9
|
|
|
$
|
70.9
|
|
|
$
|
47.7
|
|
All other development
|
(8.5
|
)
|
|
6.9
|
|
|
(145.1
|
)
|
|
(77.3
|
)
|
||||
Total development
|
$
|
37.0
|
|
|
$
|
30.8
|
|
|
$
|
(74.2
|
)
|
|
$
|
(29.6
|
)
|
(Increase) decrease to calendar year combined ratio
|
0.6
|
pts.
|
|
0.6
|
pts.
|
|
(0.6
|
) pts.
|
|
(0.3
|
) pts.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||
($ in millions)
|
2017
|
|
2016
|
|
% Growth
|
|
2017
|
|
2016
|
|
% Growth
|
||||||||||
NET PREMIUMS WRITTEN
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Personal Lines
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Agency
|
$
|
2,916.4
|
|
|
$
|
2,542.5
|
|
|
15
|
%
|
|
$
|
5,737.1
|
|
|
$
|
5,038.1
|
|
|
14
|
%
|
Direct
|
2,681.7
|
|
|
2,365.6
|
|
|
13
|
|
|
5,474.3
|
|
|
4,855.8
|
|
|
13
|
|
||||
Total Personal Lines
|
5,598.1
|
|
|
4,908.1
|
|
|
14
|
|
|
11,211.4
|
|
|
9,893.9
|
|
|
13
|
|
||||
Commercial Lines
|
857.1
|
|
|
724.1
|
|
|
18
|
|
|
1,518.0
|
|
|
1,385.6
|
|
|
10
|
|
||||
Property
1
|
290.9
|
|
|
302.4
|
|
|
(4
|
)
|
|
507.7
|
|
|
473.5
|
|
|
7
|
|
||||
Total underwriting operations
|
$
|
6,746.1
|
|
|
$
|
5,934.6
|
|
|
14
|
%
|
|
$
|
13,237.1
|
|
|
$
|
11,753.0
|
|
|
13
|
%
|
NET PREMIUMS EARNED
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Personal Lines
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Agency
|
$
|
2,752.5
|
|
|
$
|
2,423.3
|
|
|
14
|
%
|
|
$
|
5,384.0
|
|
|
$
|
4,771.2
|
|
|
13
|
%
|
Direct
|
2,650.0
|
|
|
2,334.8
|
|
|
14
|
|
|
5,173.7
|
|
|
4,555.5
|
|
|
14
|
|
||||
Total Personal Lines
|
5,402.5
|
|
|
4,758.1
|
|
|
14
|
|
|
10,557.7
|
|
|
9,326.7
|
|
|
13
|
|
||||
Commercial Lines
|
671.7
|
|
|
593.4
|
|
|
13
|
|
|
1,317.2
|
|
|
1,142.2
|
|
|
15
|
|
||||
Property
|
239.1
|
|
|
210.3
|
|
|
14
|
|
|
465.1
|
|
|
410.3
|
|
|
13
|
|
||||
Total underwriting operations
|
$
|
6,313.3
|
|
|
$
|
5,561.8
|
|
|
14
|
%
|
|
$
|
12,340.0
|
|
|
$
|
10,879.2
|
|
|
13
|
%
|
1
Adjusting for the termination of a 10% quota share reinsurance contract in June 2016, net premiums written growth would have been 25% and 26% for the three and six months ended June 30, 2017, respectively, compared to the same periods last year.
|
|||||||||||||||||||||
|
|
|
|
|
|
|
June 30,
|
||||||||||||||
(thousands)
|
|
|
|
|
|
|
2017
|
|
2016
|
|
% Growth
|
||||||||||
POLICIES IN FORCE
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Agency auto
|
|
|
|
|
|
|
5,350.3
|
|
|
4,937.6
|
|
|
8
|
%
|
|||||||
Direct auto
|
|
|
|
|
|
|
5,692.6
|
|
|
5,284.4
|
|
|
8
|
|
|||||||
Total auto
|
|
|
|
|
|
|
11,042.9
|
|
|
10,222.0
|
|
|
8
|
|
|||||||
Special lines
1
|
|
|
|
|
|
|
4,356.3
|
|
|
4,257.3
|
|
|
2
|
|
|||||||
Personal Lines - total
|
|
|
|
|
|
|
15,399.2
|
|
|
14,479.3
|
|
|
6
|
%
|
|||||||
Commercial Lines
|
|
|
|
|
|
|
625.7
|
|
|
600.3
|
|
|
4
|
%
|
|||||||
Property
|
|
|
|
|
|
|
1,311.1
|
|
|
1,177.0
|
|
|
11
|
%
|
|
Growth Over Prior Year
|
||||||||
|
Quarter
|
|
Year-to-date
|
||||||
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
APPLICATIONS
|
|
|
|
|
|
||||
New
|
9
|
%
|
15
|
%
|
|
7
|
%
|
15
|
%
|
Renewal
|
6
|
%
|
4
|
%
|
|
6
|
%
|
3
|
%
|
WRITTEN PREMIUM PER POLICY - AUTO
|
6
|
%
|
4
|
%
|
|
6
|
%
|
4
|
%
|
RETENTION MEASURES - AUTO
|
|
|
|
|
|
||||
Policy life expectancy
|
|
|
|
|
|
||||
Trailing 3-months
|
4
|
%
|
6
|
%
|
|
|
|
||
Trailing 12-months
|
5
|
%
|
4
|
%
|
|
|
|
||
Renewal ratio
|
(0.1
|
)%
|
0.1
|
%
|
|
|
|
|
Growth Over Prior Year
|
||||||||
|
Quarter
|
|
Year-to-date
|
||||||
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
Auto: new applications
|
17
|
%
|
20
|
%
|
|
16
|
%
|
18
|
%
|
renewal applications
|
7
|
%
|
2
|
%
|
|
6
|
%
|
0
|
%
|
written premium per policy
|
6
|
%
|
4
|
%
|
|
6
|
%
|
4
|
%
|
Auto retention measures:
|
|
|
|
|
|
||||
policy life expectancy - trailing 3-months
|
6
|
%
|
8
|
%
|
|
|
|
||
trailing 12-months
|
6
|
%
|
5
|
%
|
|
|
|
||
renewal ratio
|
(0.1
|
)%
|
0.1
|
%
|
|
|
|
|
Growth Over Prior Year
|
||||||||
|
Quarter
|
|
Year-to-date
|
||||||
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
Auto: new applications
|
8
|
%
|
17
|
%
|
|
3
|
%
|
17
|
%
|
renewal applications
|
8
|
%
|
10
|
%
|
|
9
|
%
|
9
|
%
|
written premium per policy
|
5
|
%
|
4
|
%
|
|
6
|
%
|
4
|
%
|
Auto retention measures:
|
|
|
|
|
|
||||
policy life expectancy - trailing 3-months
|
1
|
%
|
6
|
%
|
|
|
|
||
trailing 12-months
|
2
|
%
|
4
|
%
|
|
|
|
||
renewal ratio
|
(0.2
|
)%
|
0
|
%
|
|
|
|
|
Growth Over Prior Year
|
||||||||
|
Quarter
|
|
Year-to-date
|
||||||
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
New applications
|
(4
|
)%
|
21
|
%
|
|
(12
|
)%
|
22
|
%
|
Renewal applications
|
10
|
%
|
7
|
%
|
|
10
|
%
|
5
|
%
|
Written premium per policy
|
11
|
%
|
13
|
%
|
|
8
|
%
|
12
|
%
|
Policy life expectancy - trailing 12-months
|
0
|
%
|
10
|
%
|
|
|
|
|
Growth Over Prior Year
|
||||||
|
Quarter
|
|
Year-to-date
1
|
||||
|
2017
|
|
2016
|
|
|
2017
|
|
New applications
|
35
|
%
|
11
|
%
|
|
33
|
%
|
Renewal applications
|
19
|
%
|
1
|
%
|
|
20
|
%
|
Written premium per policy
|
(7
|
)%
|
(7
|
)%
|
|
(8
|
)%
|
|
Three Months
|
|
Six Months
|
||||||||
|
2017
|
|
|
2016
|
|
|
2017
|
|
2016
|
||
Pretax recurring investment book yield (annualized)
|
2.3
|
%
|
|
2.3
|
%
|
|
2.3
|
%
|
|
2.3
|
%
|
Weighted average FTE book yield (annualized)
|
2.5
|
%
|
|
2.5
|
%
|
|
2.6
|
%
|
|
2.6
|
%
|
FTE total return:
|
|
|
|
|
|
|
|
||||
Fixed-income securities
|
1.1
|
%
|
|
1.3
|
%
|
|
2.2
|
%
|
|
2.5
|
%
|
Common stocks
|
3.5
|
%
|
|
2.3
|
%
|
|
9.8
|
%
|
|
4.1
|
%
|
Total portfolio
|
1.3
|
%
|
|
1.4
|
%
|
|
3.1
|
%
|
|
2.7
|
%
|
|
Three Months
|
|
Six Months
|
||||||||
|
2017
|
|
|
2016
|
|
|
2017
|
|
2016
|
||
Fixed-income securities:
|
|
|
|
|
|
|
|
||||
U.S. Treasury Notes
|
0.8
|
%
|
|
0.4
|
%
|
|
1.4
|
%
|
|
0.6
|
%
|
Municipal bonds
|
1.6
|
%
|
|
1.7
|
%
|
|
3.4
|
%
|
|
3.5
|
%
|
Corporate bonds
|
1.0
|
%
|
|
1.8
|
%
|
|
2.0
|
%
|
|
4.6
|
%
|
Commercial mortgage-backed securities
|
1.5
|
%
|
|
2.1
|
%
|
|
2.8
|
%
|
|
3.8
|
%
|
Collateralized mortgage obligations
|
1.3
|
%
|
|
1.0
|
%
|
|
2.4
|
%
|
|
1.3
|
%
|
Other asset-backed securities and home-equity bonds
|
0.8
|
%
|
|
1.1
|
%
|
|
1.4
|
%
|
|
1.4
|
%
|
Agency residential pass-through obligations
|
0.8
|
%
|
|
1.1
|
%
|
|
1.3
|
%
|
|
3.0
|
%
|
Agency debt
|
0.7
|
%
|
|
(0.7
|
)%
|
|
1.1
|
%
|
|
0
|
%
|
Preferred stocks
|
4.2
|
%
|
|
3.9
|
%
|
|
9.6
|
%
|
|
4.1
|
%
|
Common stock portfolios:
|
|
|
|
|
|
|
|
||||
Indexed
|
3.4
|
%
|
|
2.4
|
%
|
|
10.0
|
%
|
|
3.8
|
%
|
Actively managed
|
5.3
|
%
|
|
0.9
|
%
|
|
7.5
|
%
|
|
9.8
|
%
|
($ in millions)
|
Fair
Value
|
|
|
% of
Total
Portfolio
|
|
|
Duration
(years)
|
|
|
Rating
1
|
|
June 30, 2017
|
|
|
|
|
|
|
|
||||
Fixed maturities
|
$
|
18,388.1
|
|
|
70.8
|
%
|
|
2.6
|
|
|
A+
|
Nonredeemable preferred stocks
|
783.1
|
|
|
3.0
|
|
|
3.6
|
|
|
BBB-
|
|
Short-term investments
|
3,729.7
|
|
|
14.4
|
|
|
<0.1
|
|
|
AA
|
|
Total fixed-income securities
|
22,900.9
|
|
|
88.2
|
|
|
2.3
|
|
|
A+
|
|
Common equities
|
3,077.5
|
|
|
11.8
|
|
|
na
|
|
|
na
|
|
Total portfolio
2,3
|
$
|
25,978.4
|
|
|
100.0
|
%
|
|
2.3
|
|
|
A+
|
June 30, 2016
|
|
|
|
|
|
|
|
||||
Fixed maturities
|
$
|
13,589.5
|
|
|
60.7
|
%
|
|
2.3
|
|
|
A
|
Nonredeemable preferred stocks
|
858.5
|
|
|
3.8
|
|
|
3.0
|
|
|
BBB-
|
|
Short-term investments
|
5,166.4
|
|
|
23.1
|
|
|
<0.1
|
|
|
AA+
|
|
Total fixed-income securities
|
19,614.4
|
|
|
87.6
|
|
|
1.8
|
|
|
A+
|
|
Common equities
|
2,765.4
|
|
|
12.4
|
|
|
na
|
|
|
na
|
|
Total portfolio
2,3
|
$
|
22,379.8
|
|
|
100.0
|
%
|
|
1.8
|
|
|
A+
|
December 31, 2016
|
|
|
|
|
|
|
|
||||
Fixed maturities
|
$
|
16,243.8
|
|
|
69.2
|
%
|
|
2.6
|
|
|
A+
|
Nonredeemable preferred stocks
|
853.5
|
|
|
3.6
|
|
|
3.1
|
|
|
BBB-
|
|
Short-term investments
|
3,572.9
|
|
|
15.2
|
|
|
0.2
|
|
|
AA-
|
|
Total fixed-income securities
|
20,670.2
|
|
|
88.0
|
|
|
2.2
|
|
|
A+
|
|
Common equities
|
2,812.4
|
|
|
12.0
|
|
|
na
|
|
|
na
|
|
Total portfolio
2,3
|
$
|
23,482.6
|
|
|
100.0
|
%
|
|
2.2
|
|
|
A+
|
na = not applicable
|
|
|
|
|
|
|
|
•
|
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.
|
($ in millions)
|
Fair
Value
|
|
|
% of
Total
Portfolio
|
|
|
June 30, 2017
|
|
|
|
|||
Group I securities:
|
|
|
|
|||
Non-investment-grade fixed maturities
|
$
|
387.6
|
|
|
1.5
|
%
|
Redeemable preferred stocks
1
|
144.5
|
|
|
0.6
|
|
|
Nonredeemable preferred stocks
|
783.1
|
|
|
3.0
|
|
|
Common equities
|
3,077.5
|
|
|
11.8
|
|
|
Total Group I securities
|
4,392.7
|
|
|
16.9
|
|
|
Group II securities:
|
|
|
|
|||
Other fixed maturities
2
|
17,856.0
|
|
|
68.7
|
|
|
Short-term investments
|
3,729.7
|
|
|
14.4
|
|
|
Total Group II securities
|
21,585.7
|
|
|
83.1
|
|
|
Total portfolio
|
$
|
25,978.4
|
|
|
100.0
|
%
|
June 30, 2016
|
|
|
|
|||
Group I securities:
|
|
|
|
|||
Non-investment-grade fixed maturities
|
$
|
510.6
|
|
|
2.3
|
%
|
Redeemable preferred stocks
1
|
154.4
|
|
|
0.7
|
|
|
Nonredeemable preferred stocks
|
858.5
|
|
|
3.8
|
|
|
Common equities
|
2,765.4
|
|
|
12.4
|
|
|
Total Group I securities
|
4,288.9
|
|
|
19.2
|
|
|
Group II securities:
|
|
|
|
|||
Other fixed maturities
2
|
12,924.5
|
|
|
57.7
|
|
|
Short-term investments
|
5,166.4
|
|
|
23.1
|
|
|
Total Group II securities
|
18,090.9
|
|
|
80.8
|
|
|
Total portfolio
|
$
|
22,379.8
|
|
|
100.0
|
%
|
December 31, 2016
|
|
|
|
|||
Group I securities:
|
|
|
|
|||
Non-investment-grade fixed maturities
|
$
|
356.2
|
|
|
1.5
|
%
|
Redeemable preferred stocks
1
|
135.3
|
|
|
0.6
|
|
|
Nonredeemable preferred stocks
|
853.5
|
|
|
3.6
|
|
|
Common equities
|
2,812.4
|
|
|
12.0
|
|
|
Total Group I securities
|
4,157.4
|
|
|
17.7
|
|
|
Group II securities:
|
|
|
|
|||
Other fixed maturities
2
|
15,752.3
|
|
|
67.1
|
|
|
Short-term investments
|
3,572.9
|
|
|
15.2
|
|
|
Total Group II securities
|
19,325.2
|
|
|
82.3
|
|
|
Total portfolio
|
$
|
23,482.6
|
|
|
100.0
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
(millions)
|
Total
Write-downs
|
|
|
Write-downs
on Securities
Sold
|
|
|
Write-downs
on Securities
Held at
Period End
|
|
|
Total
Write-downs
|
|
|
Write-downs
on Securities
Sold
|
|
|
Write-downs
on Securities
Held at
Period End
|
|
||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Common equities
|
$
|
2.6
|
|
|
$
|
0
|
|
|
$
|
2.6
|
|
|
$
|
3.6
|
|
|
$
|
0
|
|
|
$
|
3.6
|
|
Total investment portfolio
|
2.6
|
|
|
0
|
|
|
2.6
|
|
|
3.6
|
|
|
0
|
|
|
3.6
|
|
||||||
Other assets
1
|
11.2
|
|
|
0
|
|
|
11.2
|
|
|
11.2
|
|
|
0
|
|
|
11.2
|
|
||||||
Total write-downs
|
$
|
13.8
|
|
|
$
|
0
|
|
|
$
|
13.8
|
|
|
$
|
14.8
|
|
|
$
|
0
|
|
|
$
|
14.8
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Common equities
|
$
|
0.2
|
|
|
$
|
0
|
|
|
$
|
0.2
|
|
|
$
|
0.2
|
|
|
$
|
0
|
|
|
$
|
0.2
|
|
Total investment portfolio
|
0.2
|
|
|
0
|
|
|
0.2
|
|
|
0.2
|
|
|
0
|
|
|
0.2
|
|
||||||
Other assets
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
Total write-downs
|
$
|
0.2
|
|
|
$
|
0
|
|
|
$
|
0.2
|
|
|
$
|
0.2
|
|
|
$
|
0
|
|
|
$
|
0.2
|
|
|
|
|
|
Total Gross
Unrealized
Losses
|
|
|
Decline of Investment Value
|
||||||||||||||||
(millions)
|
Fair
Value
|
|
|
>15%
|
|
|
>25%
|
|
|
>35%
|
|
|
>45%
|
|
|||||||||
Fixed Income:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized loss for less than 12 months
|
$
|
7,505.6
|
|
|
$
|
32.4
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Unrealized loss for 12 months or greater
|
1,603.1
|
|
|
23.2
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
Total
|
$
|
9,108.7
|
|
|
$
|
55.6
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Common Equity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized loss for less than 12 months
|
$
|
72.3
|
|
|
$
|
6.5
|
|
|
$
|
1.3
|
|
|
$
|
0.3
|
|
|
$
|
0.2
|
|
|
$
|
0.2
|
|
Unrealized loss for 12 months or greater
|
0.8
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
Total
|
$
|
73.1
|
|
|
$
|
6.5
|
|
|
$
|
1.3
|
|
|
$
|
0.3
|
|
|
$
|
0.2
|
|
|
$
|
0.2
|
|
|
June 30, 2017
|
|
June 30, 2016
|
|
December 31, 2016
|
|||||||||||||||
($ in millions)
|
Fair
Value
|
|
|
% of
Total
|
|
|
Fair
Value
|
|
|
% of
Total
|
|
|
Fair
Value
|
|
|
% of
Total
|
|
|||
Investment-grade fixed maturities:
1
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Short/intermediate term
|
$
|
21,215.7
|
|
|
95.9
|
%
|
|
$
|
17,524.2
|
|
|
93.4
|
%
|
|
$
|
18,883.7
|
|
|
95.3
|
%
|
Long term
|
71.6
|
|
|
0.3
|
|
|
138.8
|
|
|
0.7
|
|
|
49.6
|
|
|
0.2
|
|
|||
Non-investment-grade fixed maturities:
1,2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Short/intermediate term
|
824.2
|
|
|
3.8
|
|
|
1,082.6
|
|
|
5.8
|
|
|
866.8
|
|
|
4.4
|
|
|||
Long term
|
6.3
|
|
|
0
|
|
|
10.3
|
|
|
0.1
|
|
|
16.6
|
|
|
0.1
|
|
|||
Total
|
$
|
22,117.8
|
|
|
100.0
|
%
|
|
$
|
18,755.9
|
|
|
100.0
|
%
|
|
$
|
19,816.7
|
|
|
100.0
|
%
|
Duration Distribution
|
June 30, 2017
|
|
|
June 30, 2016
|
|
|
December 31, 2016
|
|
1 year
|
24.1
|
%
|
|
28.3
|
%
|
|
25.9
|
%
|
2 years
|
14.5
|
|
|
14.5
|
|
|
13.4
|
|
3 years
|
25.9
|
|
|
22.0
|
|
|
24.2
|
|
5 years
|
27.4
|
|
|
26.3
|
|
|
25.8
|
|
10 years
|
8.2
|
|
|
9.1
|
|
|
10.9
|
|
20 years
|
(0.1
|
)
|
|
(0.4
|
)
|
|
(0.2
|
)
|
30 years
|
0
|
|
|
0.2
|
|
|
0
|
|
Total fixed-income portfolio
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Rating
|
June 30, 2017
|
|
|
June 30, 2016
|
|
|
December 31, 2016
|
|
AAA
|
40.8
|
%
|
|
40.3
|
%
|
|
35.7
|
%
|
AA
|
17.7
|
|
|
16.8
|
|
|
19.1
|
|
A
|
12.1
|
|
|
13.6
|
|
|
15.3
|
|
BBB
|
24.6
|
|
|
22.1
|
|
|
24.3
|
|
Non-investment grade/non-rated
1
|
4.8
|
|
|
7.2
|
|
|
5.6
|
|
Total fixed-income portfolio
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
($ in millions)
|
Fair
Value
|
|
|
Duration
(years)
|
|
|
U.S. Treasury Notes
|
|
|
|
|||
Less than two years
|
$
|
217.4
|
|
|
1.4
|
|
Two to five years
|
3,376.6
|
|
|
3.7
|
|
|
Five to ten years
|
561.0
|
|
|
6.2
|
|
|
Total U.S. Treasury Notes
|
$
|
4,155.0
|
|
|
3.9
|
|
($ in millions)
|
Fair
Value
|
|
|
Net Unrealized
Gains (Losses)
|
|
|
% of Asset-
Backed
Securities
|
|
|
Duration
(years)
|
|
|
Rating
(at period end)
|
||
June 30, 2017
|
|
|
|
|
|
|
|
|
|
||||||
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||
Prime collateralized mortgage obligations
|
$
|
544.6
|
|
|
$
|
(1.5
|
)
|
|
8.4
|
%
|
|
0.6
|
|
|
A+
|
Alt-A collateralized mortgage obligations
1
|
133.8
|
|
|
0.4
|
|
|
2.0
|
|
|
0.8
|
|
|
BBB-
|
||
Collateralized mortgage obligations
|
678.4
|
|
|
(1.1
|
)
|
|
10.4
|
|
|
0.7
|
|
|
A
|
||
Home equity (sub-prime bonds)
|
552.2
|
|
|
6.6
|
|
|
8.5
|
|
|
0.3
|
|
|
BBB
|
||
Residential mortgage-backed securities
|
1,230.6
|
|
|
5.5
|
|
|
18.9
|
|
|
0.5
|
|
|
A-
|
||
Agency residential pass-through obligations
|
37.0
|
|
|
(0.5
|
)
|
|
0.6
|
|
|
3.5
|
|
|
AAA
|
||
Commercial mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||
Commercial mortgage-backed securities
|
2,249.0
|
|
|
8.5
|
|
|
34.7
|
|
|
3.6
|
|
|
A-
|
||
Commercial mortgage-backed securities: interest only
|
126.0
|
|
|
1.6
|
|
|
1.9
|
|
|
2.2
|
|
|
AAA-
|
||
Commercial mortgage-backed securities
|
2,375.0
|
|
|
10.1
|
|
|
36.6
|
|
|
3.6
|
|
|
A
|
||
Other asset-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||
Automobile
|
1,288.7
|
|
|
(0.5
|
)
|
|
19.9
|
|
|
0.6
|
|
|
AAA-
|
||
Credit card
|
366.4
|
|
|
(0.1
|
)
|
|
5.6
|
|
|
0.4
|
|
|
AAA
|
||
Student loan
|
609.4
|
|
|
4.7
|
|
|
9.4
|
|
|
1.2
|
|
|
AA-
|
||
Other
2
|
582.9
|
|
|
(0.2
|
)
|
|
9.0
|
|
|
2.2
|
|
|
AA-
|
||
Other asset-backed securities
|
2,847.4
|
|
|
3.9
|
|
|
43.9
|
|
|
1.0
|
|
|
AA+
|
||
Total asset-backed securities
|
$
|
6,490.0
|
|
|
$
|
19.0
|
|
|
100.0
|
%
|
|
1.9
|
|
|
A+
|
($ in millions)
|
Fair
Value
|
|
|
Net Unrealized
Gains (Losses)
|
|
|
% of Asset-
Backed
Securities
|
|
|
Duration
(years)
|
|
|
Rating
(at period end)
|
||
June 30, 2016
|
|
|
|
|
|
|
|
|
|
||||||
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||
Prime collateralized mortgage obligations
|
$
|
672.3
|
|
|
$
|
(3.0
|
)
|
|
12.2
|
%
|
|
0.7
|
|
|
A
|
Alt-A collateralized mortgage obligations
1
|
213.8
|
|
|
(1.3
|
)
|
|
3.9
|
|
|
1.2
|
|
|
BBB
|
||
Collateralized mortgage obligations
|
886.1
|
|
|
(4.3
|
)
|
|
16.1
|
|
|
0.8
|
|
|
A-
|
||
Home equity (sub-prime bonds)
|
788.8
|
|
|
5.2
|
|
|
14.3
|
|
|
<0.1
|
|
|
BBB-
|
||
Residential mortgage-backed securities
|
1,674.9
|
|
|
0.9
|
|
|
30.4
|
|
|
0.4
|
|
|
BBB+
|
||
Agency residential pass-through obligations
|
46.9
|
|
|
0.5
|
|
|
0.8
|
|
|
3.0
|
|
|
AAA
|
||
Commercial mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||
Commercial mortgage-backed securities
|
2,051.5
|
|
|
30.7
|
|
|
37.3
|
|
|
3.5
|
|
|
A
|
||
Commercial mortgage-backed securities: interest only
|
158.9
|
|
|
2.4
|
|
|
2.9
|
|
|
2.6
|
|
|
AAA-
|
||
Commercial mortgage-backed securities
|
2,210.4
|
|
|
33.1
|
|
|
40.2
|
|
|
3.5
|
|
|
A
|
||
Other asset-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||
Automobile
|
831.3
|
|
|
2.1
|
|
|
15.1
|
|
|
1.0
|
|
|
AAA-
|
||
Credit card
|
86.0
|
|
|
0
|
|
|
1.6
|
|
|
0.4
|
|
|
AAA
|
||
Student loan
|
407.7
|
|
|
1.3
|
|
|
7.4
|
|
|
1.1
|
|
|
AA-
|
||
Other
2
|
246.6
|
|
|
0.1
|
|
|
4.5
|
|
|
0.6
|
|
|
AAA-
|
||
Other asset-backed securities
|
1,571.6
|
|
|
3.5
|
|
|
28.6
|
|
|
0.9
|
|
|
AAA-
|
||
Total asset-backed securities
|
$
|
5,503.8
|
|
|
$
|
38.0
|
|
|
100.0
|
%
|
|
1.8
|
|
|
A+
|
($ in millions)
|
Fair
Value
|
|
|
Net Unrealized
Gains (Losses)
|
|
|
% of Asset-
Backed
Securities
|
|
|
Duration
(years)
|
|
|
Rating
(at period end)
|
||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
||||||
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||
Prime collateralized mortgage obligations
|
$
|
609.9
|
|
|
$
|
(3.9
|
)
|
|
10.0
|
%
|
|
0.9
|
|
|
A
|
Alt-A collateralized mortgage obligations
1
|
170.8
|
|
|
(0.4
|
)
|
|
2.8
|
|
|
1.0
|
|
|
BBB-
|
||
Collateralized mortgage obligations
|
780.7
|
|
|
(4.3
|
)
|
|
12.8
|
|
|
0.9
|
|
|
A-
|
||
Home equity (sub-prime bonds)
|
678.0
|
|
|
13.0
|
|
|
11.1
|
|
|
<0.1
|
|
|
BBB
|
||
Residential mortgage-backed securities
|
1,458.7
|
|
|
8.7
|
|
|
23.9
|
|
|
0.4
|
|
|
BBB+
|
||
Agency residential pass-through obligations
|
40.6
|
|
|
(0.6
|
)
|
|
0.7
|
|
|
4.1
|
|
|
AAA
|
||
Commercial mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||
Commercial mortgage-backed securities
|
2,115.2
|
|
|
(13.7
|
)
|
|
34.6
|
|
|
3.7
|
|
|
A-
|
||
Commercial mortgage-backed securities: interest only
|
138.2
|
|
|
0.2
|
|
|
2.3
|
|
|
2.4
|
|
|
AAA-
|
||
Commercial mortgage-backed securities
|
2,253.4
|
|
|
(13.5
|
)
|
|
36.9
|
|
|
3.7
|
|
|
A
|
||
Other asset-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||
Automobile
|
1,074.9
|
|
|
(0.4
|
)
|
|
17.6
|
|
|
0.8
|
|
|
AAA-
|
||
Credit card
|
435.3
|
|
|
(0.4
|
)
|
|
7.1
|
|
|
0.5
|
|
|
AAA
|
||
Student loan
|
526.4
|
|
|
2.4
|
|
|
8.6
|
|
|
1.0
|
|
|
AA-
|
||
Other
2
|
314.5
|
|
|
(1.4
|
)
|
|
5.2
|
|
|
1.5
|
|
|
AA+
|
||
Other asset-backed securities
|
2,351.1
|
|
|
0.2
|
|
|
38.5
|
|
|
0.9
|
|
|
AAA-
|
||
Total asset-backed securities
|
$
|
6,103.8
|
|
|
$
|
(5.2
|
)
|
|
100.0
|
%
|
|
1.8
|
|
|
A+
|
Collateralized Mortgage Obligations (at June 30, 2017)
|
||||||||||||||||||
($ in millions)
Rating 1 |
Non-Agency Prime
|
|
Alt-A
|
|
Government/GSE
2
|
|
|
Total
|
|
% of Total
|
|
|||||||
AAA
|
$
|
154.2
|
|
|
$
|
10.5
|
|
|
$
|
65.9
|
|
|
$
|
230.6
|
|
|
34.0
|
%
|
AA
|
49.9
|
|
|
24.1
|
|
|
1.1
|
|
|
75.1
|
|
|
11.1
|
|
||||
A
|
24.2
|
|
|
22.0
|
|
|
42.1
|
|
|
88.3
|
|
|
13.0
|
|
||||
BBB
|
17.8
|
|
|
8.8
|
|
|
147.6
|
|
|
174.2
|
|
|
25.7
|
|
||||
Non-investment grade
|
41.8
|
|
|
68.4
|
|
|
0
|
|
|
110.2
|
|
|
16.2
|
|
||||
Total
|
$
|
287.9
|
|
|
$
|
133.8
|
|
|
$
|
256.7
|
|
|
$
|
678.4
|
|
|
100.0
|
%
|
Increase (decrease) in value
3
|
(0.4
|
)%
|
|
0.3
|
%
|
|
0.7
|
%
|
|
0.2
|
%
|
|
|
Commercial Mortgage-Backed Securities (at June 30, 2017)
1
|
||||||||||||||||||||||||||
($ in millions)
Category
|
AAA
|
|
AA
|
|
A
|
|
BBB
|
|
Non-Investment
Grade
|
|
|
Total
|
|
% of Total
|
|
|||||||||||
Multi-borrower
|
$
|
101.5
|
|
|
$
|
8.7
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
10.4
|
|
|
$
|
120.6
|
|
|
5.1
|
%
|
Single-borrower
|
270.3
|
|
|
392.3
|
|
|
581.9
|
|
|
770.4
|
|
|
113.5
|
|
|
2,128.4
|
|
|
89.6
|
|
||||||
Total CMBS bonds
|
371.8
|
|
|
401.0
|
|
|
581.9
|
|
|
770.4
|
|
|
123.9
|
|
|
2,249.0
|
|
|
94.7
|
|
||||||
IO
|
123.7
|
|
|
1.1
|
|
|
0
|
|
|
0
|
|
|
1.2
|
|
|
126.0
|
|
|
5.3
|
|
||||||
Total fair value
|
$
|
495.5
|
|
|
$
|
402.1
|
|
|
$
|
581.9
|
|
|
$
|
770.4
|
|
|
$
|
125.1
|
|
|
$
|
2,375.0
|
|
|
100.0
|
%
|
% of Total fair value
|
20.9
|
%
|
|
16.9
|
%
|
|
24.5
|
%
|
|
32.4
|
%
|
|
5.3
|
%
|
|
100.0
|
%
|
|
|
Corporate Securities (at June 30, 2017)
|
|||||||||||||||||||||||
(millions)
Sector
|
AAA
|
|
|
AA
|
|
|
A
|
|
|
BBB
|
|
|
Non-Investment
Grade/Non-Rated
|
|
|
Total
|
|
||||||
Consumer
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
348.7
|
|
|
$
|
1,713.7
|
|
|
$
|
84.4
|
|
|
$
|
2,146.8
|
|
Industrial
|
0
|
|
|
0
|
|
|
138.2
|
|
|
947.1
|
|
|
51.3
|
|
|
1,136.6
|
|
||||||
Communications
|
0
|
|
|
0
|
|
|
46.3
|
|
|
242.2
|
|
|
59.0
|
|
|
347.5
|
|
||||||
Financial Services
|
57.6
|
|
|
75.3
|
|
|
312.8
|
|
|
384.0
|
|
|
36.8
|
|
|
866.5
|
|
||||||
Agency
|
0.5
|
|
|
1.7
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
2.2
|
|
||||||
Technology
|
0
|
|
|
0.1
|
|
|
5.2
|
|
|
166.7
|
|
|
0.9
|
|
|
172.9
|
|
||||||
Basic Materials
|
0
|
|
|
0
|
|
|
21.6
|
|
|
106.8
|
|
|
9.7
|
|
|
138.1
|
|
||||||
Energy
|
0
|
|
|
33.0
|
|
|
43.2
|
|
|
127.0
|
|
|
0
|
|
|
203.2
|
|
||||||
Total
|
$
|
58.1
|
|
|
$
|
110.1
|
|
|
$
|
916.0
|
|
|
$
|
3,687.5
|
|
|
$
|
242.1
|
|
|
$
|
5,013.8
|
|
($ in millions)
|
June 30, 2017
|
|
June 30, 2016
|
|
December 31, 2016
|
|||||||||||||||
Indexed common stocks
|
$
|
2,931.5
|
|
|
95.2
|
%
|
|
$
|
2,631.3
|
|
|
95.1
|
%
|
|
$
|
2,676.2
|
|
|
95.1
|
%
|
Managed common stocks
|
145.7
|
|
|
4.7
|
|
|
133.8
|
|
|
4.8
|
|
|
135.8
|
|
|
4.8
|
|
|||
Total common stocks
|
3,077.2
|
|
|
99.9
|
|
|
2,765.1
|
|
|
99.9
|
|
|
2,812.0
|
|
|
99.9
|
|
|||
Other risk investments
|
0.3
|
|
|
0.1
|
|
|
0.3
|
|
|
0.1
|
|
|
0.4
|
|
|
0.1
|
|
|||
Total common equities
|
$
|
3,077.5
|
|
|
100.0
|
%
|
|
$
|
2,765.4
|
|
|
100.0
|
%
|
|
$
|
2,812.4
|
|
|
100.0
|
%
|
ISSUER PURCHASES OF EQUITY SECURITIES
|
||||||||||||
2017
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
|
|
|
April
|
2,358
|
|
|
$
|
39.15
|
|
|
69,036,912
|
|
|
5,963,088
|
|
May - prior authorization
|
45,511
|
|
|
39.74
|
|
|
69,082,423
|
|
|
—
|
|
|
May - current authorization
|
487
|
|
|
41.52
|
|
|
487
|
|
|
24,999,513
|
|
|
June
|
17,457
|
|
|
42.54
|
|
|
17,944
|
|
|
24,982,056
|
|
|
Total
|
65,813
|
|
|
$
|
40.47
|
|
|
|
|
|
|
|
|
|
THE PROGRESSIVE CORPORATION
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
Date:
|
August 2, 2017
|
|
|
By: /s/ John P. Sauerland
|
|
|
|
|
John P. Sauerland
|
|
|
|
|
Vice President and Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
|