ý
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ANNUAL 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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Delaware
|
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95-4255452
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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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One East Wacker Drive, Chicago, Illinois
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60601
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
|
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Name of each exchange on which registered
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Common Stock, $0.10 par value per share
|
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New York Stock Exchange
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7.375% Subordinated Debentures due 2054
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New York Stock Exchange
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Caution Regarding Forward-Looking Statements
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||
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Part I
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Item 1.
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Business
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Item 1A.
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Risk Factors
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
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Part II
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Item 6.
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Selected Financial Data
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Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Item 7A.
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Quantitative and Qualitative Disclosures About Market Risk
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Item 8.
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Financial Statements and Supplementary Data
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Item 9.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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Item 9A.
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Controls and Procedures
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Item 9B.
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Other Information
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Part III
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Item 10.
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Directors, Executive Officers and Corporate Governance
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Item 11.
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Executive Compensation
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence
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Item 14.
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Principal Accounting Fees and Services
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Part IV
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Item 15.
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Exhibits, Financial Statement Schedules
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Power of Attorney
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||
Signatures
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Financial Statement Schedules:
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Schedule 1 - Investments Other than Investments in Related Parties
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Schedule 2 - Parent Company Financial Statements
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Schedule 3 - Supplementary Insurance Information
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Schedule 4 - Reinsurance Schedule
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Exhibit Index
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•
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Outcomes of state initiatives that could result in significant changes to, or interpretations of, unclaimed property laws or significant changes in claims handling practices with respect to life insurance policies, particularly any that involve retroactive application of new requirements to existing life insurance policy contracts;
|
•
|
Adverse outcomes in litigation or other legal or regulatory proceedings involving Kemper or its subsidiaries or affiliates;
|
•
|
Governmental actions, including, but not limited to, implementation of new federal and state laws and regulations, and court decisions interpreting existing laws and regulations or policy provisions;
|
•
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Uncertainties related to regulatory approval of insurance rates, policy forms, insurance products, license applications, dividends from insurance subsidiaries, acquisitions of businesses and other matters within the purview of state insurance regulators;
|
•
|
The incidence, frequency and severity of catastrophes occurring in any particular reporting period or geographic area, including natural disasters, pandemics and terrorist attacks or other man-made events;
|
•
|
The number and severity of insurance claims (including those associated with catastrophe losses);
|
•
|
Changes in facts and circumstances affecting assumptions used in determining loss and loss adjustment expenses (“LAE”) reserves, including, but not limited to, the number and severity of insurance claims and development patterns;
|
•
|
The impact of inflation on insurance claims, including, but not limited to, the effects on personal injury claims of increasing medical costs and the effects on property claims attributed to scarcity of resources available to rebuild damaged structures, including labor and materials and the amount of salvage value recovered for damaged property;
|
•
|
Developments related to insurance policy claims and coverage issues, including, but not limited to, interpretations or decisions by courts or regulators that may govern or influence losses incurred in connection with hurricanes and other catastrophes;
|
•
|
Orders, interpretations or other actions by regulators that impact the reporting, adjustment and payment of claims;
|
•
|
Changes in the pricing or availability of reinsurance, or in the financial condition of reinsurers and amounts recoverable therefrom;
|
•
|
Changes in the ratings by rating agencies of Kemper and/or its insurance company subsidiaries with regard to credit, financial strength, claims paying ability and other areas on which the Company is rated;
|
•
|
The level of success and costs incurred in realizing or maintaining economies of scale, implementing significant business consolidations, reorganizations and technology initiatives and integrating acquired businesses;
|
•
|
Absolute and relative performance of the Company’s products or services, including, but not limited to, the level of success achieved in designing and introducing new insurance products;
|
•
|
The ability of the Company to maintain the availability of critical systems and manage technology initiatives cost-effectively to address insurance industry developments and regulatory requirements;
|
•
|
Heightened competition, including, with respect to pricing, entry of new competitors and alternate distribution channels, introduction of new technologies, emergence of telematics, refinements of existing products and development of new products by current or future competitors;
|
•
|
Changes in general economic conditions, including, but not limited to, performance of financial markets, interest rates, inflation, unemployment rates and fluctuating values of particular investments held by the Company;
|
•
|
Absolute and relative performance of investments held by the Company;
|
•
|
Changes in insurance industry trends and significant industry developments;
|
•
|
Changes in consumer trends and significant consumer or product developments;
|
•
|
Changes in capital requirements, including the calculations thereof, used by regulators and rating agencies;
|
•
|
Regulatory, accounting or tax changes that may affect the cost of, or demand for, the Company’s products or services or after-tax returns from the Company’s investments;
|
•
|
The impact of required participation in windpools and joint underwriting associations, residual market assessments and assessments for insurance industry insolvencies;
|
•
|
Changes in distribution channels, methods or costs resulting from changes in laws or regulations, lawsuits or market forces;
|
•
|
Increased costs and risks related to cybersecurity and information technology, including, but not limited to, identity theft, data breaches and system disruptions affecting services and actions taken to minimize the risks thereof; and
|
State
|
|
Percentage of Total Premiums
|
|
California
|
|
39
|
%
|
Texas
|
|
12
|
|
New York
|
|
11
|
|
North Carolina
|
|
6
|
|
Oregon
|
|
3
|
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
||||
Business Segments:
|
|
|
|
|
||||
Property & Casualty Insurance
|
|
$
|
800.5
|
|
|
$
|
651.1
|
|
Life & Health Insurance
|
|
5.2
|
|
|
4.5
|
|
||
Total Business Segments
|
|
805.7
|
|
|
655.6
|
|
||
Discontinued Operations
|
|
51.0
|
|
|
70.2
|
|
||
Unallocated Reserves
|
|
6.1
|
|
|
8.1
|
|
||
Total Property and Casualty Insurance Reserves
|
|
$
|
862.8
|
|
|
$
|
733.9
|
|
DOLLARS IN MILLIONS
|
|
Favorable (Adverse) Development
|
||||||||||
2015
|
|
2014
|
|
2013
|
||||||||
Continuing Operations:
|
|
|
|
|
|
|
||||||
Property & Casualty Insurance
|
|
$
|
12.9
|
|
|
$
|
54.4
|
|
|
$
|
58.0
|
|
Life & Health Insurance
|
|
(1.4
|
)
|
|
(0.9
|
)
|
|
1.8
|
|
|||
Total Favorable Development from Continuing Operations, Net
|
|
11.5
|
|
|
53.5
|
|
|
59.8
|
|
|||
Discontinued Operations
|
|
8.6
|
|
|
3.6
|
|
|
4.8
|
|
|||
Total Favorable Development, Net
|
|
$
|
20.1
|
|
|
$
|
57.1
|
|
|
$
|
64.6
|
|
|
|
Catastrophe Losses
and LAE |
|
Percentage
of Coverage
|
|||||||
DOLLARS IN MILLIONS
|
|
In Excess of
|
|
Up to
|
|
||||||
Retained
|
|
$
|
—
|
|
|
$
|
50.0
|
|
|
—
|
%
|
1st Layer of Coverage
|
|
50.0
|
|
|
150.0
|
|
|
95.0
|
|
||
2nd Layer of Coverage
|
|
150.0
|
|
|
350.0
|
|
|
95.0
|
|
State
|
|
Percentage of Total Premiums
|
|
Texas
|
|
21
|
%
|
Louisiana
|
|
12
|
|
Alabama
|
|
7
|
|
Mississippi
|
|
6
|
|
Florida
|
|
5
|
|
|
|
Ordinal
|
|
Percentile
|
|
Measurement
|
|
Rank
|
|
Rank
|
|
Net Admitted Assets
|
|
87
|
|
81
|
%
|
Net Written Premiums
|
|
93
|
|
80
|
|
Capital and Surplus
|
|
91
|
|
80
|
|
•
|
Competitiveness of prices charged for insurance policies;
|
•
|
Sophistication of pricing segmentation;
|
•
|
Design and introduction of insurance products to meet emerging consumer trends;
|
•
|
Selection of agents and other business partners;
|
•
|
Compensation paid to agents;
|
•
|
Underwriting discipline;
|
•
|
Selectiveness of sales markets;
|
•
|
Effectiveness of marketing materials and name recognition;
|
•
|
Product and technological innovation;
|
•
|
Ability to settle claims timely and efficiently;
|
•
|
Ability to detect and prevent fraudulent insurance claims;
|
•
|
Effectiveness deployment and use of information technology across all aspects of operations;
|
•
|
Ability to control operating expenses;
|
•
|
Financial strength ratings; and
|
•
|
Quality of services provided to, and ease of doing business with, independent agents and brokers or policyholders.
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
|
DOLLARS PER SHARE
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||||||
Mar 31,
2015 |
|
Jun 30,
2015 |
|
Sep 30,
2015 |
|
Dec 31,
2015 |
|
Dec 31,
2015 |
||||||||||||
Common Stock Market Prices:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
High
|
|
$
|
40.13
|
|
|
$
|
40.12
|
|
|
$
|
40.28
|
|
|
$
|
41.65
|
|
|
$
|
41.65
|
|
Low
|
|
34.31
|
|
|
35.06
|
|
|
34.08
|
|
|
34.43
|
|
|
34.08
|
|
|||||
Close
|
|
38.96
|
|
|
38.55
|
|
|
35.37
|
|
|
37.25
|
|
|
37.25
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
DOLLARS PER SHARE
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||||||
Mar 31,
2014 |
|
Jun 30,
2014 |
|
Sep 30,
2014 |
|
Dec 31,
2014 |
|
Dec 31,
2014 |
||||||||||||
Common Stock Market Prices:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
High
|
|
$
|
40.99
|
|
|
$
|
40.51
|
|
|
$
|
37.57
|
|
|
$
|
37.63
|
|
|
$
|
40.99
|
|
Low
|
|
35.63
|
|
|
33.64
|
|
|
31.82
|
|
|
32.66
|
|
|
31.82
|
|
|||||
Close
|
|
39.17
|
|
|
36.86
|
|
|
34.15
|
|
|
36.11
|
|
|
36.11
|
|
DOLLARS PER SHARE
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||||||
Mar 31,
2015 |
|
Jun 30,
2015 |
|
Sep 30,
2015 |
|
Dec 31,
2015 |
|
Dec 31,
2015 |
||||||||||||
Cash Dividends Paid to Shareholders (per share)
|
|
$
|
0.24
|
|
|
$
|
0.24
|
|
|
$
|
0.24
|
|
|
$
|
0.24
|
|
|
$
|
0.96
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||||||
DOLLARS PER SHARE
|
|
Mar 31,
2014 |
|
Jun 30,
2014 |
|
Sep 30,
2014 |
|
Dec 31,
2014 |
|
Dec 31,
2014 |
||||||||||
Cash Dividends Paid to Shareholders (per share)
|
|
$
|
0.24
|
|
|
$
|
0.24
|
|
|
$
|
0.24
|
|
|
$
|
0.24
|
|
|
$
|
0.96
|
|
|
|
|
|
|
|
Total
|
|
Maximum
|
||||||
|
|
|
|
|
|
Number of Shares
|
|
Dollar Value of Shares
|
||||||
|
|
|
|
Average
|
|
Purchased as Part
|
|
that May Yet Be
|
||||||
|
|
Total
|
|
Price
|
|
of Publicly
|
|
Purchased Under
|
||||||
|
|
Number of Shares
|
|
Paid per
|
|
Announced Plans
|
|
the Plans or Programs
|
||||||
Period
|
|
Purchased (1)
|
|
Share
|
|
or Programs (1)
|
|
(Dollars in Millions)
|
||||||
October 1 - October 31
|
|
63,998
|
|
|
$
|
35.07
|
|
|
63,998
|
|
|
$
|
247.5
|
|
November 1 - November 30
|
|
—
|
|
|
N/A
|
|
|
—
|
|
|
$
|
247.5
|
|
|
December 1 - December 31
|
|
—
|
|
|
N/A
|
|
|
—
|
|
|
$
|
247.5
|
|
Company / Index
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
||||||||||||
Kemper Corporation
|
|
$
|
100.00
|
|
|
$
|
123.17
|
|
|
$
|
128.49
|
|
|
$
|
183.10
|
|
|
$
|
166.06
|
|
|
$
|
175.77
|
|
S&P MidCap 400 Index
|
|
100.00
|
|
|
98.27
|
|
|
115.83
|
|
|
154.64
|
|
|
169.74
|
|
|
166.05
|
|
||||||
S&P Supercomposite Insurance Index
|
|
100.00
|
|
|
93.09
|
|
|
110.89
|
|
|
161.61
|
|
|
175.70
|
|
|
182.09
|
|
DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
FOR THE YEAR
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earned Premiums
|
|
$
|
2,009.6
|
|
|
$
|
1,862.2
|
|
|
$
|
2,025.8
|
|
|
$
|
2,107.1
|
|
|
$
|
2,173.6
|
|
Net Investment Income
|
|
302.6
|
|
|
309.1
|
|
|
314.7
|
|
|
295.9
|
|
|
298.0
|
|
|||||
Other Income
|
|
3.7
|
|
|
1.4
|
|
|
0.8
|
|
|
0.8
|
|
|
1.0
|
|
|||||
Net Realized Gains on Sales of Investments
|
|
52.1
|
|
|
39.1
|
|
|
99.1
|
|
|
65.4
|
|
|
33.7
|
|
|||||
Net Impairment Losses Recognized in Earnings
|
|
(27.2
|
)
|
|
(15.2
|
)
|
|
(13.9
|
)
|
|
(6.9
|
)
|
|
(11.3
|
)
|
|||||
Total Revenues
|
|
$
|
2,340.8
|
|
|
$
|
2,196.6
|
|
|
$
|
2,426.5
|
|
|
$
|
2,462.3
|
|
|
$
|
2,495.0
|
|
Income from Continuing Operations
|
|
$
|
80.2
|
|
|
$
|
112.6
|
|
|
$
|
214.5
|
|
|
$
|
91.8
|
|
|
$
|
61.7
|
|
Income from Discontinued Operations
|
|
5.5
|
|
|
1.9
|
|
|
3.2
|
|
|
11.6
|
|
|
12.8
|
|
|||||
Net Income
|
|
$
|
85.7
|
|
|
$
|
114.5
|
|
|
$
|
217.7
|
|
|
$
|
103.4
|
|
|
$
|
74.5
|
|
Per Unrestricted Share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from Continuing Operations
|
|
$
|
1.55
|
|
|
$
|
2.08
|
|
|
$
|
3.75
|
|
|
$
|
1.55
|
|
|
$
|
1.02
|
|
Income from Discontinued Operations
|
|
0.10
|
|
|
0.04
|
|
|
0.06
|
|
|
0.20
|
|
|
0.21
|
|
|||||
Net Income
|
|
$
|
1.65
|
|
|
$
|
2.12
|
|
|
$
|
3.81
|
|
|
$
|
1.75
|
|
|
$
|
1.23
|
|
Per Unrestricted Share Assuming Dilution:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from Continuing Operations
|
|
$
|
1.55
|
|
|
$
|
2.08
|
|
|
$
|
3.74
|
|
|
$
|
1.54
|
|
|
$
|
1.02
|
|
Income from Discontinued Operations
|
|
0.10
|
|
|
0.04
|
|
|
0.06
|
|
|
0.20
|
|
|
0.21
|
|
|||||
Net Income
|
|
$
|
1.65
|
|
|
$
|
2.12
|
|
|
$
|
3.80
|
|
|
$
|
1.74
|
|
|
$
|
1.23
|
|
Dividends Paid to Shareholders Per Share
|
|
$
|
0.96
|
|
|
$
|
0.96
|
|
|
$
|
0.96
|
|
|
$
|
0.96
|
|
|
$
|
0.96
|
|
AT YEAR END
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Assets
|
|
$
|
8,036.1
|
|
|
$
|
7,833.4
|
|
|
$
|
7,656.4
|
|
|
$
|
8,009.1
|
|
|
$
|
7,934.7
|
|
Insurance Reserves
|
|
$
|
4,203.8
|
|
|
$
|
4,007.6
|
|
|
$
|
4,061.0
|
|
|
$
|
4,132.2
|
|
|
$
|
4,131.8
|
|
Unearned Premiums
|
|
613.1
|
|
|
536.9
|
|
|
598.9
|
|
|
650.9
|
|
|
666.2
|
|
|||||
Debt
|
|
750.6
|
|
|
752.1
|
|
|
606.9
|
|
|
611.4
|
|
|
610.6
|
|
|||||
All Other Liabilities
|
|
476.2
|
|
|
446.1
|
|
|
338.1
|
|
|
452.9
|
|
|
409.5
|
|
|||||
Total Liabilities
|
|
6,043.7
|
|
|
5,742.7
|
|
|
5,604.9
|
|
|
5,847.4
|
|
|
5,818.1
|
|
|||||
Shareholders’ Equity
|
|
1,992.4
|
|
|
2,090.7
|
|
|
2,051.5
|
|
|
2,161.7
|
|
|
2,116.6
|
|
|||||
Total Liabilities and Shareholders’ Equity
|
|
$
|
8,036.1
|
|
|
$
|
7,833.4
|
|
|
$
|
7,656.4
|
|
|
$
|
8,009.1
|
|
|
$
|
7,934.7
|
|
Book Value Per Share
|
|
$
|
38.82
|
|
|
$
|
39.88
|
|
|
$
|
36.86
|
|
|
$
|
36.98
|
|
|
$
|
35.13
|
|
|
|
Summary of Results
|
|
Catastrophes
|
|
Loss and LAE Reserve Development
|
|
Non-GAAP Financial Measures
|
|
Property & Casualty Insurance
|
|
Life & Health Insurance
|
|
Investment Results
|
|
Investment Quality and Concentrations
|
|
Investments in Limited Liability Companies and Limited Partnerships
|
|
Write-offs of Long-lived Assets
|
|
Interest and Other Expenses
|
|
Income Taxes
|
|
Liquidity and Capital Resources
|
|
Off-Balance Sheet Arrangements
|
|
Contractual Obligations
|
|
Critical Accounting Estimates
|
|
Recently Issued Accounting Pronouncements
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
Increase
(Decrease) from 2014 to 2015 |
|
2013
|
|
Increase
(Decrease) from 2013 to 2014 |
||||||||||
Segment Net Operating Income:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Property & Casualty Insurance
|
|
$
|
26.7
|
|
|
$
|
24.9
|
|
|
$
|
1.8
|
|
|
$
|
100.6
|
|
|
$
|
(75.7
|
)
|
Life & Health Insurance
|
|
71.7
|
|
|
91.8
|
|
|
(20.1
|
)
|
|
89.3
|
|
|
2.5
|
|
|||||
Total Segment Net Operating Income
|
|
98.4
|
|
|
116.7
|
|
|
(18.3
|
)
|
|
189.9
|
|
|
(73.2
|
)
|
|||||
Unallocated Net Operating Loss
|
|
(28.5
|
)
|
|
(19.6
|
)
|
|
(8.9
|
)
|
|
(30.7
|
)
|
|
11.1
|
|
|||||
Consolidated Net Operating Income
|
|
69.9
|
|
|
97.1
|
|
|
(27.2
|
)
|
|
159.2
|
|
|
(62.1
|
)
|
|||||
Net Income (Loss) From:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Realized Gains on Sales of Investments
|
|
33.9
|
|
|
25.4
|
|
|
8.5
|
|
|
64.4
|
|
|
(39.0
|
)
|
|||||
Net Impairment Losses Recognized in Earnings
|
|
(17.7
|
)
|
|
(9.9
|
)
|
|
(7.8
|
)
|
|
(9.1
|
)
|
|
(0.8
|
)
|
|||||
Loss from Early Extinguishment of Debt
|
|
(5.9
|
)
|
|
—
|
|
|
(5.9
|
)
|
|
—
|
|
|
—
|
|
|||||
Income from Continuing Operations
|
|
80.2
|
|
|
112.6
|
|
|
(32.4
|
)
|
|
214.5
|
|
|
(101.9
|
)
|
|||||
Income from Discontinued Operations
|
|
5.5
|
|
|
1.9
|
|
|
3.6
|
|
|
3.2
|
|
|
(1.3
|
)
|
|||||
Net Income
|
|
$
|
85.7
|
|
|
$
|
114.5
|
|
|
$
|
(28.8
|
)
|
|
$
|
217.7
|
|
|
$
|
(103.2
|
)
|
|
|
Year Ended
|
|||||||||||||||||||
|
|
Dec 31, 2015
|
|
Dec 31, 2014
|
|
Dec 31, 2013
|
|||||||||||||||
DOLLARS IN MILLIONS
|
|
Number of Events
|
|
Losses and LAE
|
|
Number of Events
|
|
Losses and LAE
|
|
Number of Events
|
|
Losses and LAE
|
|||||||||
Range of Losses and LAE Per Event:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Below $5
|
|
37
|
|
|
$
|
43.6
|
|
|
27
|
|
|
$
|
31.1
|
|
|
27
|
|
|
$
|
44.3
|
|
$5 - $10
|
|
3
|
|
|
24.7
|
|
|
3
|
|
|
20.4
|
|
|
1
|
|
|
6.4
|
|
|||
$10 - $15
|
|
—
|
|
|
—
|
|
|
1
|
|
|
13.1
|
|
|
—
|
|
|
—
|
|
|||
$15 - $20
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
$20 - $25
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Greater Than $25
|
|
—
|
|
|
—
|
|
|
1
|
|
|
33.9
|
|
|
—
|
|
|
—
|
|
|||
Total
|
|
40
|
|
|
$
|
68.3
|
|
|
32
|
|
|
$
|
98.5
|
|
|
28
|
|
|
$
|
50.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Property & Casualty Insurance
|
|
|
|
$
|
64.5
|
|
|
|
|
$
|
96.5
|
|
|
|
|
$
|
47.1
|
|
|||
Life & Health Insurance
|
|
|
|
3.8
|
|
|
|
|
2.0
|
|
|
|
|
3.6
|
|
||||||
Total Catastrophe Losses and LAE
|
|
|
|
$
|
68.3
|
|
|
|
|
$
|
98.5
|
|
|
|
|
$
|
50.7
|
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Property & Casualty Insurance:
|
|
|
|
|
|
|
||||||
Non-catastrophe
|
|
$
|
(5.0
|
)
|
|
$
|
(38.6
|
)
|
|
$
|
(45.5
|
)
|
Catastrophe
|
|
(7.9
|
)
|
|
(15.8
|
)
|
|
(12.5
|
)
|
|||
Total
|
|
(12.9
|
)
|
|
(54.4
|
)
|
|
(58.0
|
)
|
|||
Life & Health Insurance:
|
|
|
|
|
|
|
||||||
Non-catastrophe
|
|
1.3
|
|
|
(0.2
|
)
|
|
0.2
|
|
|||
Catastrophe
|
|
0.1
|
|
|
1.1
|
|
|
(2.0
|
)
|
|||
Total
|
|
1.4
|
|
|
0.9
|
|
|
(1.8
|
)
|
|||
Decrease in Total Loss and LAE Reserves Related to Prior Years:
|
|
|
|
|
|
|
||||||
Non-catastrophe
|
|
(3.7
|
)
|
|
(38.8
|
)
|
|
(45.3
|
)
|
|||
Catastrophe
|
|
(7.8
|
)
|
|
(14.7
|
)
|
|
(14.5
|
)
|
|||
Decrease in Total Loss and LAE Reserves Related to Prior Years
|
|
$
|
(11.5
|
)
|
|
$
|
(53.5
|
)
|
|
$
|
(59.8
|
)
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Net Premiums Written
|
|
$
|
1,406.2
|
|
|
$
|
1,189.1
|
|
|
$
|
1,342.2
|
|
Earned Premiums
|
|
$
|
1,415.2
|
|
|
$
|
1,249.5
|
|
|
$
|
1,392.9
|
|
Net Investment Income
|
|
73.3
|
|
|
72.7
|
|
|
90.9
|
|
|||
Other Income
|
|
0.6
|
|
|
0.5
|
|
|
0.5
|
|
|||
Total Revenues
|
|
1,489.1
|
|
|
1,322.7
|
|
|
1,484.3
|
|
|||
Incurred Losses and LAE related to:
|
|
|
|
|
|
|
||||||
Current Year:
|
|
|
|
|
|
|
||||||
Non-catastrophe Losses and LAE
|
|
1,034.6
|
|
|
845.2
|
|
|
980.2
|
|
|||
Catastrophe Losses and LAE
|
|
64.5
|
|
|
96.5
|
|
|
47.1
|
|
|||
Prior Years:
|
|
|
|
|
|
|
||||||
Non-catastrophe Losses and LAE
|
|
(5.0
|
)
|
|
(38.6
|
)
|
|
(45.5
|
)
|
|||
Catastrophe Losses and LAE
|
|
(7.9
|
)
|
|
(15.8
|
)
|
|
(12.5
|
)
|
|||
Total Incurred Losses and LAE
|
|
1,086.2
|
|
|
887.3
|
|
|
969.3
|
|
|||
Insurance Expenses, Excluding Write-offs of Long-lived Assets
|
|
368.1
|
|
|
353.7
|
|
|
375.4
|
|
|||
Write-offs of Long-lived Assets
|
|
11.1
|
|
|
54.6
|
|
|
—
|
|
|||
Operating Profit
|
|
23.7
|
|
|
27.1
|
|
|
139.6
|
|
|||
Income Tax Benefit (Expense)
|
|
3.0
|
|
|
(2.2
|
)
|
|
(39.0
|
)
|
|||
Segment Net Operating Income
|
|
$
|
26.7
|
|
|
$
|
24.9
|
|
|
$
|
100.6
|
|
|
|
|
|
|
|
|
||||||
Ratios Based On Earned Premiums
|
|
|
|
|
|
|
||||||
Current Year Non-catastrophe Losses and LAE Ratio
|
|
73.2
|
%
|
|
67.7
|
%
|
|
70.4
|
%
|
|||
Current Year Catastrophe Losses and LAE Ratio
|
|
4.6
|
|
|
7.7
|
|
|
3.4
|
|
|||
Prior Years Non-catastrophe Losses and LAE Ratio
|
|
(0.4
|
)
|
|
(3.1
|
)
|
|
(3.3
|
)
|
|||
Prior Years Catastrophe Losses and LAE Ratio
|
|
(0.6
|
)
|
|
(1.3
|
)
|
|
(0.9
|
)
|
|||
Total Incurred Loss and LAE Ratio
|
|
76.8
|
|
|
71.0
|
|
|
69.6
|
|
|||
Insurance Expense Ratio, Excluding Write-offs of Long-lived Assets
|
|
26.0
|
|
|
28.3
|
|
|
27.0
|
|
|||
Impact on Ratio from Write-offs of Long-lived Assets
|
|
0.8
|
|
|
4.4
|
|
|
—
|
|
|||
Combined Ratio
|
|
103.6
|
%
|
|
103.7
|
%
|
|
96.6
|
%
|
|||
Underlying Combined Ratio
|
|
|
|
|
|
|
||||||
Current Year Non-catastrophe Losses and LAE Ratio
|
|
73.2
|
%
|
|
67.7
|
%
|
|
70.4
|
%
|
|||
Insurance Expense Ratio, Excluding Write-offs of Long-lived Assets
|
|
26.0
|
|
|
28.3
|
|
|
27.0
|
|
|||
Impact on Ratio from Write-offs of Long-lived Assets
|
|
0.8
|
|
|
4.4
|
|
|
—
|
|
|||
Underlying Combined Ratio
|
|
100.0
|
%
|
|
100.4
|
%
|
|
97.4
|
%
|
|||
Non-GAAP Measure Reconciliation
|
|
|
|
|
|
|
||||||
Underlying Combined Ratio
|
|
100.0
|
%
|
|
100.4
|
%
|
|
97.4
|
%
|
|||
Current Year Catastrophe Losses and LAE Ratio
|
|
4.6
|
|
|
7.7
|
|
|
3.4
|
|
|||
Prior Years Non-catastrophe Losses and LAE Ratio
|
|
(0.4
|
)
|
|
(3.1
|
)
|
|
(3.3
|
)
|
|||
Prior Years Catastrophe Losses and LAE Ratio
|
|
(0.6
|
)
|
|
(1.3
|
)
|
|
(0.9
|
)
|
|||
Combined Ratio as Reported
|
|
103.6
|
%
|
|
103.7
|
%
|
|
96.6
|
%
|
|
|
Dec 31, 2015
|
|
Dec 31, 2014
|
||||||||||
DOLLARS IN MILLIONS
|
|
Number of Events
|
|
Losses and LAE
|
|
Number of Events
|
|
Losses and LAE
|
||||||
Range of Losses and LAE Per Event:
|
|
|
|
|
|
|
|
|
||||||
Below $5
|
|
37
|
|
|
$
|
40.9
|
|
|
27
|
|
|
$
|
30.1
|
|
$5 - $10
|
|
3
|
|
|
23.6
|
|
|
3
|
|
|
19.8
|
|
||
$10 - $15
|
|
—
|
|
|
—
|
|
|
1
|
|
|
12.8
|
|
||
$15 - $20
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
$20 - $25
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Greater Than $25
|
|
—
|
|
|
—
|
|
|
1
|
|
|
33.8
|
|
||
Total
|
|
40
|
|
|
$
|
64.5
|
|
|
32
|
|
|
$
|
96.5
|
|
DOLLARS IN MILLIONS
|
|
Dec 31,
2015 |
|
Dec 31,
2014 |
||||
Insurance Reserves:
|
|
|
|
|
||||
Automobile
|
|
$
|
656.3
|
|
|
$
|
501.4
|
|
Homeowners
|
|
98.9
|
|
|
102.4
|
|
||
Other
|
|
45.3
|
|
|
47.3
|
|
||
Insurance Reserves
|
|
$
|
800.5
|
|
|
$
|
651.1
|
|
Insurance Reserves:
|
|
|
|
|
||||
Loss Reserves:
|
|
|
|
|
||||
Case
|
|
$
|
537.1
|
|
|
$
|
423.6
|
|
Incurred But Not Reported
|
|
147.6
|
|
|
135.8
|
|
||
Total Loss Reserves
|
|
684.7
|
|
|
559.4
|
|
||
LAE Reserves
|
|
115.8
|
|
|
91.7
|
|
||
Insurance Reserves
|
|
$
|
800.5
|
|
|
$
|
651.1
|
|
|
|
From Date of Acquisition to
|
||
DOLLARS IN MILLIONS
|
|
Dec 31,
2015 |
||
Net Premiums Written
|
|
$
|
285.1
|
|
|
|
|
||
Earned Premiums
|
|
$
|
272.9
|
|
|
|
|
||
Incurred Losses and LAE related to:
|
|
|
||
Current Year:
|
|
|
||
Non-catastrophe Losses and LAE
|
|
$
|
253.3
|
|
Pre-acquisition Periods:
|
|
|
||
Non-catastrophe Losses and LAE
|
|
7.7
|
|
|
Total Incurred Losses and LAE
|
|
$
|
261.0
|
|
|
|
|
||
Insurance Expenses
|
|
$
|
38.6
|
|
|
|
|
||
Ratios Based On Earned Premiums
|
|
|
||
Current Year Non-catastrophe Losses and LAE Ratio
|
|
92.8
|
%
|
|
Pre-acquisition Periods Non-catastrophe Losses and LAE Ratio
|
|
2.8
|
|
|
Total Incurred Loss and LAE Ratio
|
|
95.6
|
%
|
|
Insurance Expense Ratio
|
|
14.1
|
|
|
Combined Ratio
|
|
109.7
|
%
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Net Premiums Written
|
|
$
|
1,030.5
|
|
|
$
|
789.0
|
|
|
$
|
914.2
|
|
Earned Premiums
|
|
$
|
1,027.7
|
|
|
$
|
831.4
|
|
|
$
|
959.1
|
|
Incurred Losses and LAE related to:
|
|
|
|
|
|
|
||||||
Current Year:
|
|
|
|
|
|
|
||||||
Non-catastrophe Losses and LAE
|
|
$
|
820.4
|
|
|
$
|
616.0
|
|
|
$
|
741.7
|
|
Catastrophe Losses and LAE
|
|
6.7
|
|
|
12.7
|
|
|
7.6
|
|
|||
Prior Years:
|
|
|
|
|
|
|
||||||
Non-catastrophe Losses and LAE
|
|
(1.5
|
)
|
|
(31.0
|
)
|
|
(29.9
|
)
|
|||
Catastrophe Losses and LAE
|
|
(0.3
|
)
|
|
(0.6
|
)
|
|
(0.2
|
)
|
|||
Total Incurred Losses and LAE
|
|
$
|
825.3
|
|
|
$
|
597.1
|
|
|
$
|
719.2
|
|
Ratios Based On Earned Premiums
|
|
|
|
|
|
|
||||||
Current Year Non-catastrophe Losses and LAE Ratio
|
|
79.7
|
%
|
|
74.1
|
%
|
|
77.3
|
%
|
|||
Current Year Catastrophe Losses and LAE Ratio
|
|
0.7
|
|
|
1.5
|
|
|
0.8
|
|
|||
Prior Years Non-catastrophe Losses and LAE Ratio
|
|
(0.1
|
)
|
|
(3.7
|
)
|
|
(3.1
|
)
|
|||
Prior Years Catastrophe Losses and LAE Ratio
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|||
Total Incurred Loss and LAE Ratio
|
|
80.3
|
%
|
|
71.8
|
%
|
|
75.0
|
%
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Net Premiums Written
|
|
$
|
276.0
|
|
|
$
|
296.5
|
|
|
$
|
320.9
|
|
Earned Premiums
|
|
$
|
286.3
|
|
|
$
|
312.4
|
|
|
$
|
326.2
|
|
Incurred Losses and LAE related to:
|
|
|
|
|
|
|
||||||
Current Year:
|
|
|
|
|
|
|
||||||
Non-catastrophe Losses and LAE
|
|
$
|
145.1
|
|
|
$
|
156.5
|
|
|
$
|
170.4
|
|
Catastrophe Losses and LAE
|
|
55.4
|
|
|
80.8
|
|
|
38.2
|
|
|||
Prior Years:
|
|
|
|
|
|
|
||||||
Non-catastrophe Losses and LAE
|
|
(3.3
|
)
|
|
(1.5
|
)
|
|
(8.9
|
)
|
|||
Catastrophe Losses and LAE
|
|
(7.5
|
)
|
|
(13.3
|
)
|
|
(11.2
|
)
|
|||
Total Incurred Losses and LAE
|
|
$
|
189.7
|
|
|
$
|
222.5
|
|
|
$
|
188.5
|
|
Ratios Based On Earned Premiums
|
|
|
|
|
|
|
||||||
Current Year Non-catastrophe Losses and LAE Ratio
|
|
50.7
|
%
|
|
50.1
|
%
|
|
52.2
|
%
|
|||
Current Year Catastrophe Losses and LAE Ratio
|
|
19.4
|
|
|
25.9
|
|
|
11.7
|
|
|||
Prior Years Non-catastrophe Losses and LAE Ratio
|
|
(1.2
|
)
|
|
(0.5
|
)
|
|
(2.7
|
)
|
|||
Prior Years Catastrophe Losses and LAE Ratio
|
|
(2.6
|
)
|
|
(4.3
|
)
|
|
(3.4
|
)
|
|||
Total Incurred Loss and LAE Ratio
|
|
66.3
|
%
|
|
71.2
|
%
|
|
57.8
|
%
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Net Premiums Written
|
|
$
|
54.1
|
|
|
$
|
55.6
|
|
|
$
|
53.7
|
|
Earned Premiums
|
|
$
|
54.5
|
|
|
$
|
54.8
|
|
|
$
|
52.3
|
|
Incurred Losses and LAE related to:
|
|
|
|
|
|
|
||||||
Current Year:
|
|
|
|
|
|
|
||||||
Non-catastrophe Losses and LAE
|
|
$
|
45.7
|
|
|
$
|
44.6
|
|
|
$
|
43.7
|
|
Catastrophe Losses and LAE
|
|
0.2
|
|
|
0.2
|
|
|
0.1
|
|
|||
Prior Years:
|
|
|
|
|
|
|
||||||
Non-catastrophe Losses and LAE
|
|
1.8
|
|
|
(2.6
|
)
|
|
(3.0
|
)
|
|||
Catastrophe Losses and LAE
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total Incurred Losses and LAE
|
|
$
|
47.7
|
|
|
$
|
42.2
|
|
|
$
|
40.8
|
|
Ratios Based On Earned Premiums
|
|
|
|
|
|
|
||||||
Current Year Non-catastrophe Losses and LAE Ratio
|
|
83.8
|
%
|
|
81.3
|
%
|
|
83.5
|
%
|
|||
Current Year Catastrophe Losses and LAE Ratio
|
|
0.4
|
|
|
0.4
|
|
|
0.2
|
|
|||
Prior Years Non-catastrophe Losses and LAE Ratio
|
|
3.3
|
|
|
(4.7
|
)
|
|
(5.7
|
)
|
|||
Prior Years Catastrophe Losses and LAE Ratio
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total Incurred Loss and LAE Ratio
|
|
87.5
|
%
|
|
77.0
|
%
|
|
78.0
|
%
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Earned Premiums:
|
|
|
|
|
|
|
||||||
Life
|
|
$
|
374.1
|
|
|
$
|
387.6
|
|
|
$
|
392.7
|
|
Accident and Health
|
|
144.9
|
|
|
148.6
|
|
|
161.4
|
|
|||
Property
|
|
75.4
|
|
|
76.5
|
|
|
78.8
|
|
|||
Total Earned Premiums
|
|
594.4
|
|
|
612.7
|
|
|
632.9
|
|
|||
Net Investment Income
|
|
214.2
|
|
|
218.7
|
|
|
209.9
|
|
|||
Other Income
|
|
2.4
|
|
|
0.9
|
|
|
0.2
|
|
|||
Total Revenues
|
|
811.0
|
|
|
832.3
|
|
|
843.0
|
|
|||
Policyholders’ Benefits and Incurred Losses and LAE
|
|
381.3
|
|
|
374.4
|
|
|
387.9
|
|
|||
Insurance Expenses
|
|
320.0
|
|
|
316.0
|
|
|
318.2
|
|
|||
Operating Profit
|
|
109.7
|
|
|
141.9
|
|
|
136.9
|
|
|||
Income Tax Expense
|
|
(38.0
|
)
|
|
(50.1
|
)
|
|
(47.6
|
)
|
|||
Segment Net Operating Income
|
|
$
|
71.7
|
|
|
$
|
91.8
|
|
|
$
|
89.3
|
|
DOLLARS IN MILLIONS
|
|
Dec 31,
2015 |
|
Dec 31,
2014 |
||||
Insurance Reserves:
|
|
|
|
|
||||
Future Policyholder Benefits
|
|
$
|
3,278.4
|
|
|
$
|
3,214.7
|
|
Incurred Losses and LAE Reserves:
|
|
|
|
|
||||
Life
|
|
41.2
|
|
|
38.8
|
|
||
Accident and Health
|
|
21.4
|
|
|
20.2
|
|
||
Property
|
|
5.2
|
|
|
4.5
|
|
||
Total Incurred Losses and LAE Reserves
|
|
67.8
|
|
|
63.5
|
|
||
Insurance Reserves
|
|
$
|
3,346.2
|
|
|
$
|
3,278.2
|
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Investment Income (Loss):
|
|
|
|
|
|
|
||||||
Interest and Dividends on Fixed Maturities
|
|
$
|
236.2
|
|
|
$
|
227.4
|
|
|
$
|
235.5
|
|
Dividends on Equity Securities
|
|
32.4
|
|
|
59.9
|
|
|
38.0
|
|
|||
Equity Method Limited Liability Investments
|
|
19.0
|
|
|
9.0
|
|
|
26.4
|
|
|||
Fair Value Option Investments
|
|
0.2
|
|
|
(0.7
|
)
|
|
—
|
|
|||
Short-term Investments
|
|
0.4
|
|
|
0.6
|
|
|
0.1
|
|
|||
Loans to Policyholders
|
|
21.1
|
|
|
20.5
|
|
|
19.8
|
|
|||
Real Estate
|
|
11.9
|
|
|
12.1
|
|
|
20.8
|
|
|||
Other
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|||
Total Investment Income
|
|
321.2
|
|
|
328.9
|
|
|
340.6
|
|
|||
Investment Expenses:
|
|
|
|
|
|
|
||||||
Real Estate
|
|
11.3
|
|
|
11.3
|
|
|
18.3
|
|
|||
Other Investment Expenses
|
|
7.3
|
|
|
8.5
|
|
|
7.6
|
|
|||
Total Investment Expenses
|
|
18.6
|
|
|
19.8
|
|
|
25.9
|
|
|||
Net Investment Income
|
|
$
|
302.6
|
|
|
$
|
309.1
|
|
|
$
|
314.7
|
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Fixed Maturities:
|
|
|
|
|
|
|
||||||
Gains on Sales
|
|
$
|
16.1
|
|
|
$
|
7.0
|
|
|
$
|
30.9
|
|
Losses on Sales
|
|
(1.1
|
)
|
|
(0.2
|
)
|
|
(0.4
|
)
|
|||
Equity Securities:
|
|
|
|
|
|
|
||||||
Gains on Sales
|
|
39.2
|
|
|
33.1
|
|
|
21.8
|
|
|||
Losses on Sales
|
|
(1.6
|
)
|
|
(2.0
|
)
|
|
(0.5
|
)
|
|||
Equity Method Limited Liability Investments:
|
|
|
|
|
|
|
||||||
Gains on Sales
|
|
—
|
|
|
—
|
|
|
2.5
|
|
|||
Real Estate:
|
|
|
|
|
|
|
||||||
Gains on Sales
|
|
—
|
|
|
—
|
|
|
44.2
|
|
|||
Losses on Sales
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|
—
|
|
|||
Other Investments:
|
|
|
|
|
|
|
||||||
Gain on Sale of Subsidiary
|
|
—
|
|
|
1.6
|
|
|
—
|
|
|||
Gains on Sales
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|||
Losses on Sales
|
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|||
Trading Securities Net Gains (Losses)
|
|
(0.3
|
)
|
|
(0.1
|
)
|
|
0.6
|
|
|||
Net Realized Gains on Sales of Investments
|
|
$
|
52.1
|
|
|
$
|
39.1
|
|
|
$
|
99.1
|
|
Gross Gains on Sales
|
|
$
|
55.3
|
|
|
$
|
41.7
|
|
|
$
|
99.5
|
|
Gross Losses on Sales
|
|
(2.9
|
)
|
|
(2.5
|
)
|
|
(1.0
|
)
|
|||
Net Gains (Losses) on Trading Securities
|
|
(0.3
|
)
|
|
(0.1
|
)
|
|
0.6
|
|
|||
Net Realized Gains on Sales of Investments
|
|
$
|
52.1
|
|
|
$
|
39.1
|
|
|
$
|
99.1
|
|
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||||
DOLLARS IN MILLIONS
|
|
Amount
|
|
Number of Issuers/
Properties
|
|
Amount
|
|
Number of Issuers/
Properties
|
|
Amount
|
|
Number of Issuers/
Properties
|
||||||||
Fixed Maturities
|
|
$
|
(11.5
|
)
|
|
9
|
|
$
|
(5.7
|
)
|
|
21
|
|
$
|
(10.3
|
)
|
|
5
|
||
Equity Securities
|
|
(15.7
|
)
|
|
25
|
|
(7.1
|
)
|
|
22
|
|
(3.6
|
)
|
|
11
|
|||||
Real Estate
|
|
—
|
|
|
—
|
|
|
(2.4
|
)
|
|
1
|
|
—
|
|
|
—
|
|
|||
Net Impairment Losses Recognized in Earnings
|
|
$
|
(27.2
|
)
|
|
|
|
|
$
|
(15.2
|
)
|
|
|
|
$
|
(13.9
|
)
|
|
|
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Recognized in Consolidated Statements of Income:
|
|
|
|
|
|
|
||||||
Gains on Sales
|
|
$
|
55.3
|
|
|
$
|
40.1
|
|
|
$
|
99.5
|
|
Losses on Sales
|
|
(2.9
|
)
|
|
(2.5
|
)
|
|
(1.0
|
)
|
|||
Net Impairment Losses Recognized in Earnings
|
|
(27.2
|
)
|
|
(15.2
|
)
|
|
(13.9
|
)
|
|||
Gain on Sale of Subsidiary
|
|
—
|
|
|
1.6
|
|
|
—
|
|
|||
Net Gains (Losses) on Trading Securities
|
|
(0.3
|
)
|
|
(0.1
|
)
|
|
0.6
|
|
|||
Net Gain Recognized in Consolidated Statements of Income
|
|
24.9
|
|
|
23.9
|
|
|
85.2
|
|
|||
Recognized in Other Comprehensive Income (Loss)
|
|
(178.7
|
)
|
|
233.6
|
|
|
(362.6
|
)
|
|||
Total Comprehensive Investment Gains (Losses)
|
|
$
|
(153.8
|
)
|
|
$
|
257.5
|
|
|
$
|
(277.4
|
)
|
|
|
Dec 31, 2015
|
|
Dec 31, 2014
|
||||||||||
DOLLARS IN MILLIONS
|
|
Fair Value
|
|
Percentage
of Total
Investments
|
|
Fair Value
|
|
Percentage
of Total
Investments
|
||||||
U.S. Government and Government Agencies and Authorities
|
|
$
|
320.6
|
|
|
5.0
|
%
|
|
$
|
345.5
|
|
|
5.4
|
%
|
States and Political Subdivisions:
|
|
|
|
|
|
|
|
|
||||||
Pre-refunded with U.S. Government and Government Agencies and Authorities Held in Trust
|
|
93.7
|
|
|
1.5
|
|
|
85.4
|
|
|
1.3
|
|
||
States
|
|
605.0
|
|
|
9.4
|
|
|
644.6
|
|
|
10.0
|
|
||
Political Subdivisions
|
|
172.1
|
|
|
2.7
|
|
|
141.1
|
|
|
2.2
|
|
||
Revenue Bonds
|
|
751.8
|
|
|
11.7
|
|
|
606.0
|
|
|
9.4
|
|
||
Total Investments in Governmental Fixed Maturities
|
|
$
|
1,943.2
|
|
|
30.3
|
%
|
|
$
|
1,822.6
|
|
|
28.3
|
%
|
|
|
Dec 31, 2015
|
|
Dec 31, 2014
|
||||||||||
DOLLARS IN MILLIONS
|
|
Fair Value
|
|
Percentage
of Total
Investments
|
|
Fair Value
|
|
Percentage
of Total
Investments
|
||||||
Manufacturing
|
|
$
|
1,160.4
|
|
|
18.0
|
%
|
|
$
|
1,247.4
|
|
|
19.4
|
%
|
Finance, Insurance and Real Estate
|
|
707.4
|
|
|
11.0
|
|
|
785.6
|
|
|
12.2
|
|
||
Services
|
|
374.4
|
|
|
5.8
|
|
|
305.0
|
|
|
4.7
|
|
||
Transportation, Communication and Utilities
|
|
334.4
|
|
|
5.2
|
|
|
312.9
|
|
|
4.9
|
|
||
Mining
|
|
139.7
|
|
|
2.2
|
|
|
139.7
|
|
|
2.2
|
|
||
Retail Trade
|
|
91.1
|
|
|
1.4
|
|
|
74.5
|
|
|
1.2
|
|
||
Wholesale Trade
|
|
80.6
|
|
|
1.3
|
|
|
69.7
|
|
|
1.1
|
|
||
Agriculture, Forestry and Fishing
|
|
20.6
|
|
|
0.3
|
|
|
15.3
|
|
|
0.2
|
|
||
Other
|
|
0.5
|
|
|
—
|
|
|
4.9
|
|
|
0.1
|
|
||
Total Investments in Non-governmental Fixed Maturities
|
|
$
|
2,909.1
|
|
|
45.2
|
%
|
|
$
|
2,955.0
|
|
|
46.0
|
%
|
DOLLARS IN MILLIONS
|
|
Number of Issuers
|
|
Aggregate Fair Value
|
|||
Below $5
|
|
389
|
|
|
$
|
884.7
|
|
$5 -$10
|
|
108
|
|
|
766.0
|
|
|
$10 - $20
|
|
66
|
|
|
920.9
|
|
|
$20 - $30
|
|
11
|
|
|
271.3
|
|
|
Greater Than $30
|
|
2
|
|
|
66.2
|
|
|
Total
|
|
576
|
|
|
$
|
2,909.1
|
|
DOLLARS IN MILLIONS
|
|
Fair
Value
|
|
Percentage
of Total
Investments
|
|||||
Fixed Maturities:
|
|
|
|
|
|||||
States including their Political Subdivisions:
|
|
|
|
|
|||||
Texas
|
|
$
|
109.8
|
|
|
1.7
|
%
|
||
Georgia
|
|
79.2
|
|
|
1.2
|
|
|||
Ohio
|
|
78.0
|
|
|
1.2
|
|
|||
Michigan
|
|
76.9
|
|
|
1.2
|
|
|||
Florida
|
|
66.5
|
|
|
1.0
|
|
|||
Colorado
|
|
66.3
|
|
|
1.0
|
|
|||
Wisconsin
|
|
59.3
|
|
|
0.9
|
|
|||
Louisiana
|
|
54.5
|
|
|
0.8
|
|
|||
Equity Securities—Other Equity Interests:
|
|
|
|
|
|||||
Vanguard Total Stock Market ETF
|
|
77.8
|
|
|
1.2
|
|
|||
Equity Method Limited Liability Investments:
|
|
|
|
|
|||||
Tennenbaum Opportunities Fund V, LLC
|
|
58.7
|
|
|
0.9
|
|
|||
Total
|
|
$
|
727.0
|
|
|
11.1
|
%
|
|
|
Unfunded
Commitment
|
|
Reported Value in Millions
|
||||||||
Asset Class
|
|
Dec 31,
2015 |
|
Dec 31,
2015 |
|
Dec 31,
2014 |
||||||
Reported as Equity Method Limited Liability Investments at Cost Plus Cumulative Undistributed Earnings:
|
|
|
|
|
|
|
||||||
Distressed Debt
|
|
$
|
—
|
|
|
$
|
90.5
|
|
|
$
|
93.0
|
|
Secondary Transactions
|
|
20.2
|
|
|
38.5
|
|
|
48.9
|
|
|||
Mezzanine Debt
|
|
37.8
|
|
|
38.8
|
|
|
27.0
|
|
|||
Growth Equity
|
|
—
|
|
|
4.8
|
|
|
5.3
|
|
|||
Senior Debt
|
|
0.7
|
|
|
10.8
|
|
|
5.0
|
|
|||
Leveraged Buyout
|
|
0.1
|
|
|
2.8
|
|
|
3.9
|
|
|||
Other
|
|
—
|
|
|
4.4
|
|
|
1.7
|
|
|||
Total Equity Method Limited Liability Investments
|
|
58.8
|
|
|
190.6
|
|
|
184.8
|
|
|||
Reported as Other Equity Interests at Fair Value:
|
|
|
|
|
|
|
||||||
Mezzanine Debt
|
|
65.8
|
|
|
83.8
|
|
|
69.7
|
|
|||
Senior Debt
|
|
17.0
|
|
|
37.9
|
|
|
21.4
|
|
|||
Distressed Debt
|
|
12.3
|
|
|
18.9
|
|
|
18.2
|
|
|||
Secondary Transactions
|
|
10.0
|
|
|
14.2
|
|
|
15.6
|
|
|||
Hedge Fund
|
|
—
|
|
|
—
|
|
|
9.1
|
|
|||
Leveraged Buyout
|
|
1.6
|
|
|
5.9
|
|
|
8.0
|
|
|||
Other
|
|
0.9
|
|
|
44.8
|
|
|
44.2
|
|
|||
Total Reported as Other Equity Interests at Fair Value
|
|
107.6
|
|
|
205.5
|
|
|
186.2
|
|
|||
Reported as Fair Value Option Investments:
|
|
|
|
|
|
|
||||||
Hedge Fund
|
|
—
|
|
|
164.5
|
|
|
53.3
|
|
|||
Total Investments in Limited Liability Companies and Limited Partnerships
|
|
$
|
166.4
|
|
|
$
|
560.6
|
|
|
$
|
424.3
|
|
DOLLARS IN MILLIONS
|
|
Jan 1, 2016
To
Dec 31, 2016
|
|
Jan 1, 2017
To
Dec 31, 2018
|
|
Jan 1, 2019
To
Dec 31, 2020
|
|
After
Dec 31, 2020
|
|
Total
|
||||||||||
Long Term Debt Obligations
|
|
$
|
—
|
|
|
$
|
360.0
|
|
|
$
|
—
|
|
|
$
|
400.0
|
|
|
$
|
760.0
|
|
Capital Lease Obligations
|
|
2.4
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
|
3.2
|
|
|||||
Operating Lease Obligations
|
|
17.8
|
|
|
28.4
|
|
|
14.9
|
|
|
14.2
|
|
|
75.3
|
|
|||||
Purchase Obligations
|
|
20.6
|
|
|
23.3
|
|
|
7.9
|
|
|
—
|
|
|
51.8
|
|
|||||
Life and Health Insurance Policy Benefits
|
|
270.7
|
|
|
450.2
|
|
|
428.8
|
|
|
6,751.1
|
|
|
7,900.8
|
|
|||||
Property and Casualty Insurance Reserves
|
|
508.0
|
|
|
261.1
|
|
|
49.4
|
|
|
44.3
|
|
|
862.8
|
|
|||||
Other Contractual Obligations Reflected in Long Term Liabilities on the Consolidated Balance Sheet under GAAP
|
|
44.1
|
|
|
53.0
|
|
|
44.7
|
|
|
419.7
|
|
|
561.5
|
|
|||||
Total Contractual Obligations
|
|
$
|
863.6
|
|
|
$
|
1,176.8
|
|
|
$
|
545.7
|
|
|
$
|
7,629.3
|
|
|
$
|
10,215.4
|
|
•
|
The financial condition, credit rating and prospects of the issuer;
|
•
|
The length of time and magnitude of the unrealized loss;
|
•
|
The ability of the issuer to make scheduled principal and interest payments;
|
•
|
The volatility of the investment;
|
•
|
Opinions of the Company’s external investment managers;
|
•
|
The Company’s intentions to sell or not to sell the investment; and
|
•
|
The Company’s determination of whether it will be required to sell the investment before a full recovery in value.
|
•
|
The financial condition and prospects of the issuer;
|
•
|
The length of time and magnitude of the unrealized loss;
|
•
|
The volatility of the investment;
|
•
|
Analyst recommendations and near term price targets;
|
•
|
Opinions of the Company’s external investment managers;
|
•
|
Market liquidity;
|
•
|
Debt-like characteristics of perpetual preferred stocks and issuer ratings; and
|
•
|
The Company’s intentions to sell or ability to hold the investments until recovery.
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
||||
Business Segments:
|
|
|
|
|
||||
Property & Casualty Insurance
|
|
800.5
|
|
|
651.1
|
|
||
Life & Health Insurance
|
|
5.2
|
|
|
4.5
|
|
||
Total Business Segments
|
|
805.7
|
|
|
655.6
|
|
||
Discontinued Operations
|
|
51.0
|
|
|
70.2
|
|
||
Unallocated Reserves
|
|
6.1
|
|
|
8.1
|
|
||
Total Property and Casualty Insurance Reserves
|
|
$
|
862.8
|
|
|
$
|
733.9
|
|
•
|
Incurred Loss Development Methodology;
|
•
|
Paid Loss Development Methodology;
|
•
|
Bornhuetter-Ferguson Incurred Loss Methodology;
|
•
|
Bornhuetter-Ferguson Paid Loss Methodology; and
|
•
|
Frequency and Severity Methodology.
|
•
|
Changes in the level of minimum case reserves, and the automatic aging of those minimum case reserves;
|
•
|
Changes to claims practices, including, but not limited to, changes in the reporting and impact of large losses, timing of reported claims, changes in claims closing and re-opening patterns, adequacy of case reserves, implementation of new systems for handling claims, turnover of claims department staffs, timing and depth of the audit review of claims handling procedures;
|
•
|
Changes in underwriting practices;
|
•
|
Changes in the mix of business by state, class and policy limit within product line;
|
•
|
Growth in new lines of business;
|
•
|
Changes in the attachment points of the Company’s reinsurance programs;
|
•
|
Medical costs, including, but not limited to, the ability to assess the extent of injuries and the impact of inflation;
|
•
|
Repair costs, including, but not limited to, the impact of inflation and the availability of labor and materials;
|
•
|
Changes in the judicial environment, including, but not limited to, the interpretation of policy provisions, the impact of jury awards and changes in case law; and
|
•
|
Changes in state regulatory requirements.
|
DOLLARS IN MILLIONS
|
|
Favorable (Adverse) Development
|
||||||||||
2015
|
|
2014
|
|
2013
|
||||||||
Continuing Operations:
|
|
|
|
|
|
|
||||||
Property & Casualty Insurance:
|
|
|
|
|
|
|
||||||
Personal Automobile Insurance
|
|
$
|
1.8
|
|
|
$
|
31.6
|
|
|
$
|
30.1
|
|
Homeowners Insurance
|
|
10.8
|
|
|
14.8
|
|
|
20.1
|
|
|||
Commercial Automobile Insurance
|
|
(1.8
|
)
|
|
2.6
|
|
|
3.0
|
|
|||
Other Personal Lines
|
|
2.1
|
|
|
5.4
|
|
|
4.8
|
|
|||
Life & Health Insurance:
|
|
|
|
|
|
|
||||||
Property
|
|
(1.4
|
)
|
|
(0.9
|
)
|
|
1.8
|
|
|||
Total Favorable Development from Continuing Operations, Net
|
|
11.5
|
|
|
53.5
|
|
|
59.8
|
|
|||
Discontinued Operations
|
|
8.6
|
|
|
3.6
|
|
|
4.8
|
|
|||
Total Favorable Development, Net
|
|
$
|
20.1
|
|
|
$
|
57.1
|
|
|
$
|
64.6
|
|
•
|
Estimated mortality of the participants and beneficiaries eligible for benefits;
|
•
|
Estimated expected long-term rates of returns on investments;
|
•
|
Estimated compensation increases;
|
•
|
Estimated employee turnover; and
|
•
|
Estimated rate used to discount the expected benefit payment to a present value.
|
1.
|
Investments in Fixed Maturities;
|
2.
|
Investments in Equity Securities;
|
3.
|
Fair Value Option Investments; and
|
4.
|
Debt.
|
DOLLARS IN MILLIONS
|
|
Fair Value
|
|
Pro Forma Increase (Decrease)
|
||||||||||||
Interest
Rate Risk
|
|
Equity
Price Risk
|
|
Total
Market Risk
|
||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
||||||||
Investments in Fixed Maturities
|
|
$
|
4,852.3
|
|
|
$
|
(307.6
|
)
|
|
$
|
—
|
|
|
$
|
(307.6
|
)
|
Investments in Equity Securities
|
|
523.2
|
|
|
(7.2
|
)
|
|
(126.0
|
)
|
|
(133.2
|
)
|
||||
Fair Value Option Investments
|
|
164.5
|
|
|
—
|
|
|
(6.7
|
)
|
|
(6.7
|
)
|
||||
LIABILITIES
|
|
|
|
|
|
|
|
|
||||||||
Debt
|
|
$
|
781.3
|
|
|
$
|
33.0
|
|
|
$
|
—
|
|
|
$
|
33.0
|
|
DOLLARS IN MILLIONS
|
|
Fair Value
|
|
Pro Forma Increase (Decrease)
|
||||||||||||
Interest
Rate Risk
|
|
Equity
Price Risk
|
|
Total
Market Risk
|
||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
||||||||
Investments in Fixed Maturities
|
|
$
|
4,777.6
|
|
|
$
|
(317.5
|
)
|
|
$
|
—
|
|
|
$
|
(317.5
|
)
|
Investments in Equity Securities
|
|
632.2
|
|
|
(9.1
|
)
|
|
(153.4
|
)
|
|
(162.5
|
)
|
||||
Fair Value Option Investments
|
|
53.3
|
|
|
—
|
|
|
(2.6
|
)
|
|
(2.6
|
)
|
||||
LIABILITIES
|
|
|
|
|
|
|
|
|
||||||||
Debt
|
|
$
|
804.4
|
|
|
$
|
22.8
|
|
|
$
|
—
|
|
|
$
|
22.8
|
|
|
December 31,
|
||||||
DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS
|
2015
|
|
2014
|
||||
Assets:
|
|
|
|
||||
Investments:
|
|
|
|
||||
Fixed Maturities at Fair Value (Amortized Cost: 2015 - $4,560.7; 2014 - $4,341.7)
|
$
|
4,852.3
|
|
|
$
|
4,777.6
|
|
Equity Securities at Fair Value (Cost: 2015 - $486.9; 2014 - $561.5)
|
523.2
|
|
|
632.2
|
|
||
Equity Method Limited Liability Investments at Cost Plus Cumulative Undistributed Earnings
|
190.6
|
|
|
184.8
|
|
||
Fair Value Option Investments
|
164.5
|
|
|
53.3
|
|
||
Short-term Investments at Cost which Approximates Fair Value
|
255.7
|
|
|
342.2
|
|
||
Other Investments
|
443.2
|
|
|
449.6
|
|
||
Total Investments
|
6,429.5
|
|
|
6,439.7
|
|
||
Cash
|
161.7
|
|
|
76.1
|
|
||
Receivables from Policyholders
|
332.4
|
|
|
295.3
|
|
||
Other Receivables
|
193.2
|
|
|
187.0
|
|
||
Deferred Policy Acquisition Costs
|
316.4
|
|
|
303.3
|
|
||
Goodwill
|
323.0
|
|
|
311.8
|
|
||
Current and Deferred Income Tax Assets
|
41.4
|
|
|
—
|
|
||
Other Assets
|
238.5
|
|
|
220.2
|
|
||
Total Assets
|
$
|
8,036.1
|
|
|
$
|
7,833.4
|
|
Liabilities and Shareholders’ Equity:
|
|
|
|
||||
Insurance Reserves:
|
|
|
|
||||
Life and Health
|
$
|
3,341.0
|
|
|
$
|
3,273.7
|
|
Property and Casualty
|
862.8
|
|
|
733.9
|
|
||
Total Insurance Reserves
|
4,203.8
|
|
|
4,007.6
|
|
||
Unearned Premiums
|
613.1
|
|
|
536.9
|
|
||
Liabilities for Income Taxes
|
3.8
|
|
|
36.5
|
|
||
Debt at Amortized Cost (Fair Value: 2015 - $781.3; 2014 - $804.4)
|
750.6
|
|
|
752.1
|
|
||
Accrued Expenses and Other Liabilities
|
472.4
|
|
|
409.6
|
|
||
Total Liabilities
|
6,043.7
|
|
|
5,742.7
|
|
||
Shareholders’ Equity:
|
|
|
|
||||
Common Stock, $0.10 Par Value Per Share, 100 Million Shares Authorized; 51,326,751 Shares Issued and Outstanding at December 31, 2015 and 52,418,246 Shares Issued and Outstanding at December 31, 2014
|
5.1
|
|
|
5.2
|
|
||
Paid-in Capital
|
654.0
|
|
|
660.1
|
|
||
Retained Earnings
|
1,209.0
|
|
|
1,202.7
|
|
||
Accumulated Other Comprehensive Income
|
124.3
|
|
|
222.7
|
|
||
Total Shareholders’ Equity
|
1,992.4
|
|
|
2,090.7
|
|
||
Total Liabilities and Shareholders’ Equity
|
$
|
8,036.1
|
|
|
$
|
7,833.4
|
|
|
|
For The Years Ended December 31,
|
||||||||||
DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Revenues:
|
|
|
|
|
|
|
||||||
Earned Premiums
|
|
$
|
2,009.6
|
|
|
$
|
1,862.2
|
|
|
$
|
2,025.8
|
|
Net Investment Income
|
|
302.6
|
|
|
309.1
|
|
|
314.7
|
|
|||
Other Income
|
|
3.7
|
|
|
1.4
|
|
|
0.8
|
|
|||
Net Realized Gains on Sales of Investments
|
|
52.1
|
|
|
39.1
|
|
|
99.1
|
|
|||
Other-than-temporary Impairment Losses:
|
|
|
|
|
|
|
||||||
Total Other-than-temporary Impairment Losses
|
|
(27.4
|
)
|
|
(15.2
|
)
|
|
(15.8
|
)
|
|||
Portion of Losses Recognized in Other Comprehensive Income
|
|
0.2
|
|
|
—
|
|
|
1.9
|
|
|||
Net Impairment Losses Recognized in Earnings
|
|
(27.2
|
)
|
|
(15.2
|
)
|
|
(13.9
|
)
|
|||
Total Revenues
|
|
2,340.8
|
|
|
2,196.6
|
|
|
2,426.5
|
|
|||
Expenses:
|
|
|
|
|
|
|
||||||
Policyholders’ Benefits and Incurred Losses and Loss Adjustment Expenses
|
|
1,467.6
|
|
|
1,261.7
|
|
|
1,357.2
|
|
|||
Insurance Expenses
|
|
645.1
|
|
|
628.4
|
|
|
654.4
|
|
|||
Write-off of Long-lived Assets
|
|
11.1
|
|
|
54.6
|
|
|
—
|
|
|||
Loss from Early Extinguishment of Debt
|
|
9.1
|
|
|
—
|
|
|
—
|
|
|||
Interest and Other Expenses
|
|
107.6
|
|
|
91.7
|
|
|
100.5
|
|
|||
Total Expenses
|
|
2,240.5
|
|
|
2,036.4
|
|
|
2,112.1
|
|
|||
Income from Continuing Operations before Income Taxes
|
|
100.3
|
|
|
160.2
|
|
|
314.4
|
|
|||
Income Tax Expense
|
|
(20.1
|
)
|
|
(47.6
|
)
|
|
(99.9
|
)
|
|||
Income from Continuing Operations
|
|
80.2
|
|
|
112.6
|
|
|
214.5
|
|
|||
Income from Discontinued Operations
|
|
5.5
|
|
|
1.9
|
|
|
3.2
|
|
|||
Net Income
|
|
$
|
85.7
|
|
|
$
|
114.5
|
|
|
$
|
217.7
|
|
Income from Continuing Operations Per Unrestricted Share:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
1.55
|
|
|
$
|
2.08
|
|
|
$
|
3.75
|
|
Diluted
|
|
$
|
1.55
|
|
|
$
|
2.08
|
|
|
$
|
3.74
|
|
Net Income Per Unrestricted Share:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
1.65
|
|
|
$
|
2.12
|
|
|
$
|
3.81
|
|
Diluted
|
|
$
|
1.65
|
|
|
$
|
2.12
|
|
|
$
|
3.80
|
|
Dividends Paid to Shareholders Per Share
|
|
$
|
0.96
|
|
|
$
|
0.96
|
|
|
$
|
0.96
|
|
|
|
For The Years Ended December 31,
|
||||||||||
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Net Income
|
|
$
|
85.7
|
|
|
$
|
114.5
|
|
|
$
|
217.7
|
|
|
|
|
|
|
|
|
||||||
Other Comprehensive Income (Loss) Before Income Taxes:
|
|
|
|
|
|
|
||||||
Unrealized Holding Gains (Losses)
|
|
(177.3
|
)
|
|
234.6
|
|
|
(362.8
|
)
|
|||
Foreign Currency Translation Adjustments
|
|
(1.4
|
)
|
|
(1.0
|
)
|
|
0.2
|
|
|||
Decrease (Increase) in Net Unrecognized Postretirement Benefit Costs
|
|
26.1
|
|
|
(98.5
|
)
|
|
86.6
|
|
|||
Other Comprehensive Income (Loss) Before Income Taxes
|
|
(152.6
|
)
|
|
135.1
|
|
|
(276.0
|
)
|
|||
Other Comprehensive Income Tax Benefit (Expense)
|
|
54.2
|
|
|
(47.7
|
)
|
|
98.6
|
|
|||
Other Comprehensive Income (Loss)
|
|
(98.4
|
)
|
|
87.4
|
|
|
(177.4
|
)
|
|||
Total Comprehensive Income (Loss)
|
|
$
|
(12.7
|
)
|
|
$
|
201.9
|
|
|
$
|
40.3
|
|
|
For The Years Ended December 31,
|
||||||||||
DOLLARS IN MILLIONS
|
2015
|
|
2014
|
|
2013
|
||||||
Operating Activities:
|
|
|
|
|
|
||||||
Net Income
|
$
|
85.7
|
|
|
$
|
114.5
|
|
|
$
|
217.7
|
|
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
|
|
|
|
|
|
||||||
Decrease (Increase) in Deferred Policy Acquisition Costs
|
(13.1
|
)
|
|
(0.4
|
)
|
|
0.5
|
|
|||
Amortization of Intangible Assets Acquired
|
15.4
|
|
|
7.2
|
|
|
8.3
|
|
|||
Equity in Earnings of Equity Method Limited Liability Investments
|
(19.0
|
)
|
|
(9.0
|
)
|
|
(26.4
|
)
|
|||
Distribution of Accumulated Earnings of Equity Method Limited Liability Investments
|
8.6
|
|
|
21.7
|
|
|
15.4
|
|
|||
Decrease (Increase) in Value of Fair Value Option Investments reported in Investment Income
|
(0.3
|
)
|
|
0.7
|
|
|
—
|
|
|||
Amortization of Investment Securities and Depreciation of Investment Real Estate
|
16.1
|
|
|
15.4
|
|
|
16.2
|
|
|||
Net Realized Gains on Sales of Investments
|
(52.1
|
)
|
|
(39.1
|
)
|
|
(99.1
|
)
|
|||
Net Impairment Losses Recognized in Earnings
|
27.2
|
|
|
15.2
|
|
|
13.9
|
|
|||
Loss from Early Extinguishment of Debt
|
9.1
|
|
|
—
|
|
|
—
|
|
|||
Depreciation of Property and Equipment
|
13.5
|
|
|
16.0
|
|
|
17.4
|
|
|||
Write-offs of Long-lived Assets
|
11.1
|
|
|
54.6
|
|
|
—
|
|
|||
Decrease in Other Receivables
|
49.6
|
|
|
46.2
|
|
|
43.5
|
|
|||
Increase (Decrease) in Insurance Reserves
|
39.6
|
|
|
(54.7
|
)
|
|
(72.5
|
)
|
|||
Decrease in Unearned Premiums
|
(9.4
|
)
|
|
(62.0
|
)
|
|
(52.0
|
)
|
|||
Change in Income Taxes
|
(21.8
|
)
|
|
11.2
|
|
|
57.9
|
|
|||
Increase (Decrease) in Accrued Expenses and Other Liabilities
|
22.6
|
|
|
(20.3
|
)
|
|
(54.8
|
)
|
|||
Other, Net
|
32.2
|
|
|
16.4
|
|
|
36.1
|
|
|||
Net Cash Provided by Operating Activities
|
215.0
|
|
|
133.6
|
|
|
122.1
|
|
|||
Investing Activities:
|
|
|
|
|
|
||||||
Sales, Paydowns and Maturities of Fixed Maturities
|
627.8
|
|
|
573.7
|
|
|
664.4
|
|
|||
Purchases of Fixed Maturities
|
(681.3
|
)
|
|
(553.0
|
)
|
|
(744.5
|
)
|
|||
Sales of Equity Securities
|
238.4
|
|
|
245.3
|
|
|
182.1
|
|
|||
Purchases of Equity Securities
|
(134.0
|
)
|
|
(235.2
|
)
|
|
(213.4
|
)
|
|||
Acquisition and Improvements of Investment Real Estate
|
(1.8
|
)
|
|
(2.1
|
)
|
|
(5.4
|
)
|
|||
Sales of Investment Real Estate
|
7.7
|
|
|
0.9
|
|
|
102.7
|
|
|||
Sales of and Return of Investment of Equity Method Limited Liability Investments
|
32.9
|
|
|
55.2
|
|
|
31.3
|
|
|||
Acquisitions of Equity Method Limited Liability Investments
|
(32.4
|
)
|
|
(21.4
|
)
|
|
(20.5
|
)
|
|||
Sales of Fair Value Option Investments
|
—
|
|
|
6.9
|
|
|
—
|
|
|||
Purchases of Fair Value Option Investments
|
(111.0
|
)
|
|
(60.9
|
)
|
|
—
|
|
|||
Decrease (Increase) in Short-term Investments
|
104.9
|
|
|
(63.9
|
)
|
|
41.8
|
|
|||
Acquisition of Businesses, Net of Cash Acquired
|
(57.6
|
)
|
|
—
|
|
|
—
|
|
|||
Disposition of Business, Net of Cash Disposed
|
—
|
|
|
8.9
|
|
|
3.8
|
|
|||
Increase in Other Investments
|
(3.2
|
)
|
|
(8.0
|
)
|
|
(9.1
|
)
|
|||
Purchase of Corporate-owned Life Insurance
|
(7.5
|
)
|
|
(33.5
|
)
|
|
—
|
|
|||
Acquisition of Software
|
(8.9
|
)
|
|
(11.3
|
)
|
|
(15.2
|
)
|
|||
Other, Net
|
(2.6
|
)
|
|
(5.9
|
)
|
|
(13.2
|
)
|
|||
Net Cash Provided (Used) by Investing Activities
|
(28.6
|
)
|
|
(104.3
|
)
|
|
4.8
|
|
|||
Financing Activities:
|
|
|
|
|
|
||||||
Net Proceeds from Issuances of Debt
|
345.8
|
|
|
144.0
|
|
|
—
|
|
|||
Repayments of Debt
|
(357.3
|
)
|
|
—
|
|
|
(5.5
|
)
|
|||
Common Stock Repurchases
|
(45.0
|
)
|
|
(114.0
|
)
|
|
(100.4
|
)
|
|||
Dividends and Dividend Equivalents Paid
|
(49.7
|
)
|
|
(51.8
|
)
|
|
(54.9
|
)
|
|||
Cash Exercise of Stock Options
|
3.9
|
|
|
0.5
|
|
|
1.7
|
|
|||
Other, Net
|
1.5
|
|
|
1.6
|
|
|
2.4
|
|
|||
Net Cash Used by Financing Activities
|
(100.8
|
)
|
|
(19.7
|
)
|
|
(156.7
|
)
|
|||
Increase (Decrease) in Cash
|
85.6
|
|
|
9.6
|
|
|
(29.8
|
)
|
|||
Cash, Beginning of Year
|
76.1
|
|
|
66.5
|
|
|
96.3
|
|
|||
Cash, End of Year
|
$
|
161.7
|
|
|
$
|
76.1
|
|
|
$
|
66.5
|
|
DOLLARS AND SHARES IN MILLIONS,
EXCEPT PER SHARE AMOUNTS
|
|
For The Years Ended December 31, 2015, 2014 and 2013
|
|||||||||||||||||||||
Number of
Shares
|
|
Common
Stock
|
|
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income
|
|
Total
Shareholders’
Equity
|
|||||||||||||
BALANCE, DECEMBER 31, 2012
|
|
58.5
|
|
|
$
|
5.8
|
|
|
$
|
725.0
|
|
|
$
|
1,118.2
|
|
|
$
|
312.7
|
|
|
$
|
2,161.7
|
|
Net Income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
217.7
|
|
|
—
|
|
|
217.7
|
|
|||||
Other Comprehensive Loss (Note 12)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(177.4
|
)
|
|
(177.4
|
)
|
|||||
Cash Dividends to Shareholders ($0.96 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(54.9
|
)
|
|
—
|
|
|
(54.9
|
)
|
|||||
Repurchases of Common Stock
|
|
(3.0
|
)
|
|
(0.2
|
)
|
|
(36.8
|
)
|
|
(63.4
|
)
|
|
—
|
|
|
(100.4
|
)
|
|||||
Equity-based Compensation Cost (Note 10)
|
|
—
|
|
|
—
|
|
|
5.5
|
|
|
—
|
|
|
—
|
|
|
5.5
|
|
|||||
Equity-based Awards, Net of Shares Exchanged (Note 10)
|
|
0.2
|
|
|
—
|
|
|
1.1
|
|
|
(1.8
|
)
|
|
—
|
|
|
(0.7
|
)
|
|||||
BALANCE, DECEMBER 31, 2013
|
|
55.7
|
|
|
$
|
5.6
|
|
|
$
|
694.8
|
|
|
$
|
1,215.8
|
|
|
$
|
135.3
|
|
|
$
|
2,051.5
|
|
Net Income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
114.5
|
|
|
—
|
|
|
114.5
|
|
|||||
Other Comprehensive Income (Note 12)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
87.4
|
|
|
87.4
|
|
|||||
Cash Dividends to Shareholders ($0.96 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(51.8
|
)
|
|
—
|
|
|
(51.8
|
)
|
|||||
Repurchases of Common Stock
|
|
(3.2
|
)
|
|
(0.4
|
)
|
|
(40.2
|
)
|
|
(74.9
|
)
|
|
—
|
|
|
(115.5
|
)
|
|||||
Equity-based Compensation Cost (Note 10)
|
|
—
|
|
|
—
|
|
|
6.4
|
|
|
—
|
|
|
—
|
|
|
6.4
|
|
|||||
Equity-based Awards, Net of Shares Exchanged (Note 10)
|
|
(0.1
|
)
|
|
—
|
|
|
(0.9
|
)
|
|
(0.9
|
)
|
|
—
|
|
|
(1.8
|
)
|
|||||
BALANCE, DECEMBER 31, 2014
|
|
52.4
|
|
|
$
|
5.2
|
|
|
$
|
660.1
|
|
|
$
|
1,202.7
|
|
|
$
|
222.7
|
|
|
$
|
2,090.7
|
|
Net Income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
85.7
|
|
|
—
|
|
|
85.7
|
|
|||||
Other Comprehensive Loss (Note 12)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(98.4
|
)
|
|
(98.4
|
)
|
|||||
Cash Dividends and Dividend Equivalents to Shareholders ($0.96 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(49.7
|
)
|
|
—
|
|
|
(49.7
|
)
|
|||||
Repurchases of Common Stock
|
|
(1.2
|
)
|
|
(0.1
|
)
|
|
(15.5
|
)
|
|
(27.9
|
)
|
|
—
|
|
|
(43.5
|
)
|
|||||
Equity-based Compensation Cost (Note 10)
|
|
—
|
|
|
—
|
|
|
6.5
|
|
|
—
|
|
|
—
|
|
|
6.5
|
|
|||||
Equity-based Awards, Net of Shares Exchanged (Note 10)
|
|
0.1
|
|
|
—
|
|
|
2.9
|
|
|
(1.8
|
)
|
|
—
|
|
|
1.1
|
|
|||||
BALANCE, DECEMBER 31, 2015
|
|
51.3
|
|
|
$
|
5.1
|
|
|
$
|
654.0
|
|
|
$
|
1,209.0
|
|
|
$
|
124.3
|
|
|
$
|
1,992.4
|
|
•
|
Level 1 — Quoted prices in an active market for identical assets or liabilities;
|
•
|
Level 2 — Observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and
|
•
|
Level 3 — Unobservable inputs for the asset or liability being measured.
|
DOLLARS IN MILLIONS
|
|
|
||
Investments
|
|
$
|
187.0
|
|
Cash
|
|
13.4
|
|
|
Receivables from Policyholders
|
|
44.4
|
|
|
Other Receivables
|
|
52.8
|
|
|
Value of Intangible Assets Acquired (Reported in Other Assets)
|
|
32.6
|
|
|
Goodwill
|
|
11.2
|
|
|
Current Income Taxes
|
|
1.4
|
|
|
Other Assets
|
|
5.9
|
|
|
Property and Casualty Insurance Reserves
|
|
(155.8
|
)
|
|
Unearned Premiums
|
|
(85.6
|
)
|
|
Liabilities for Income Taxes
|
|
(1.5
|
)
|
|
Accrued Expenses and Other Liabilities
|
|
(34.8
|
)
|
|
Total Purchase Price
|
|
$
|
71.0
|
|
DOLLARS IN MILLIONS
|
|
Dec 31,
2015 |
|
At Acquisition Date
|
||||
P & C Broker Relationships
|
|
$
|
18.1
|
|
|
$
|
18.9
|
|
Value of In Force Policies
|
|
0.2
|
|
|
9.2
|
|
||
Other
|
|
3.7
|
|
|
4.5
|
|
||
Value of Intangible Assets Acquired
|
|
$
|
22.0
|
|
|
$
|
32.6
|
|
DOLLARS IN MILLIONS
|
|
Amortized
Cost
|
|
Gross Unrealized
|
|
Fair Value
|
||||||||||
Gains
|
|
Losses
|
|
|||||||||||||
U.S. Government and Government Agencies and Authorities
|
|
$
|
298.0
|
|
|
$
|
26.2
|
|
|
$
|
(3.6
|
)
|
|
$
|
320.6
|
|
States and Political Subdivisions
|
|
1,513.7
|
|
|
111.6
|
|
|
(2.7
|
)
|
|
1,622.6
|
|
||||
Corporate Securities:
|
|
|
|
|
|
|
|
|
||||||||
Bonds and Notes
|
|
2,651.5
|
|
|
202.0
|
|
|
(40.7
|
)
|
|
2,812.8
|
|
||||
Redeemable Preferred Stocks
|
|
3.7
|
|
|
0.1
|
|
|
—
|
|
|
3.8
|
|
||||
Collateralized Loan Obligations
|
|
90.0
|
|
|
0.3
|
|
|
(3.0
|
)
|
|
87.3
|
|
||||
Other Mortgage- and Asset-backed
|
|
3.8
|
|
|
1.4
|
|
|
—
|
|
|
5.2
|
|
||||
Investments in Fixed Maturities
|
|
$
|
4,560.7
|
|
|
$
|
341.6
|
|
|
$
|
(50.0
|
)
|
|
$
|
4,852.3
|
|
|
|
Amortized
Cost
|
|
Gross Unrealized
|
|
Fair Value
|
||||||||||
DOLLARS IN MILLIONS
|
|
Gains
|
|
Losses
|
|
|||||||||||
U.S. Government and Government Agencies and Authorities
|
|
$
|
315.2
|
|
|
$
|
32.3
|
|
|
$
|
(2.0
|
)
|
|
$
|
345.5
|
|
States and Political Subdivisions
|
|
1,352.5
|
|
|
126.4
|
|
|
(1.8
|
)
|
|
1,477.1
|
|
||||
Corporate Securities:
|
|
|
|
|
|
|
|
|
||||||||
Bonds and Notes
|
|
2,599.3
|
|
|
294.3
|
|
|
(15.1
|
)
|
|
2,878.5
|
|
||||
Redeemable Preferred Stocks
|
|
5.9
|
|
|
0.8
|
|
|
—
|
|
|
6.7
|
|
||||
Collateralized Loan Obligations
|
|
64.9
|
|
|
0.3
|
|
|
(0.8
|
)
|
|
64.4
|
|
||||
Other Mortgage- and Asset-backed
|
|
3.9
|
|
|
1.5
|
|
|
—
|
|
|
5.4
|
|
||||
Investments in Fixed Maturities
|
|
$
|
4,341.7
|
|
|
$
|
455.6
|
|
|
$
|
(19.7
|
)
|
|
$
|
4,777.6
|
|
DOLLARS IN MILLIONS
|
|
Amortized Cost
|
|
Fair Value
|
||||
Due in One Year or Less
|
|
$
|
52.4
|
|
|
$
|
54.6
|
|
Due after One Year to Five Years
|
|
806.8
|
|
|
840.2
|
|
||
Due after Five Years to Ten Years
|
|
1,475.3
|
|
|
1,507.1
|
|
||
Due after Ten Years
|
|
2,009.5
|
|
|
2,227.9
|
|
||
Mortgage- and Asset-backed Securities Not Due at a Single Maturity Date
|
|
216.7
|
|
|
222.5
|
|
||
Investments in Fixed Maturities
|
|
$
|
4,560.7
|
|
|
$
|
4,852.3
|
|
DOLLARS IN MILLIONS
|
|
Cost
|
|
Gross Unrealized
|
|
Fair Value
|
||||||||||
Gains
|
|
Losses
|
|
|||||||||||||
Preferred Stocks:
|
|
|
|
|
|
|
|
|
||||||||
Finance, Insurance and Real Estate
|
|
$
|
80.8
|
|
|
$
|
4.9
|
|
|
$
|
(0.8
|
)
|
|
$
|
84.9
|
|
Other Industries
|
|
17.1
|
|
|
2.7
|
|
|
(0.8
|
)
|
|
19.0
|
|
||||
Common Stocks:
|
|
|
|
|
|
|
|
|
||||||||
Finance, Insurance and Real Estate
|
|
18.9
|
|
|
5.3
|
|
|
(1.0
|
)
|
|
23.2
|
|
||||
Other Industries
|
|
9.4
|
|
|
4.3
|
|
|
(0.2
|
)
|
|
13.5
|
|
||||
Other Equity Interests:
|
|
|
|
|
|
|
|
|
||||||||
Exchange Traded Funds
|
|
179.7
|
|
|
1.1
|
|
|
(3.7
|
)
|
|
177.1
|
|
||||
Limited Liability Companies and Limited Partnerships
|
|
181.0
|
|
|
25.0
|
|
|
(0.5
|
)
|
|
205.5
|
|
||||
Investments in Equity Securities
|
|
$
|
486.9
|
|
|
$
|
43.3
|
|
|
$
|
(7.0
|
)
|
|
$
|
523.2
|
|
DOLLARS IN MILLIONS
|
|
|
|
Gross Unrealized
|
|
|
||||||||||
|
Cost
|
|
Gains
|
|
Losses
|
|
Fair Value
|
|||||||||
Preferred Stocks:
|
|
|
|
|
|
|
|
|
||||||||
Finance, Insurance and Real Estate
|
|
$
|
85.5
|
|
|
$
|
5.2
|
|
|
$
|
(1.0
|
)
|
|
$
|
89.7
|
|
Other Industries
|
|
16.3
|
|
|
3.5
|
|
|
—
|
|
|
19.8
|
|
||||
Common Stocks:
|
|
|
|
|
|
|
|
|
||||||||
Manufacturing
|
|
43.4
|
|
|
14.9
|
|
|
(1.1
|
)
|
|
57.2
|
|
||||
Finance, Insurance and Real Estate
|
|
34.3
|
|
|
6.2
|
|
|
—
|
|
|
40.5
|
|
||||
Other Industries
|
|
26.5
|
|
|
10.0
|
|
|
(0.4
|
)
|
|
36.1
|
|
||||
Other Equity Interests:
|
|
|
|
|
|
|
|
|
||||||||
Exchange Traded Funds
|
|
195.2
|
|
|
8.2
|
|
|
(0.7
|
)
|
|
202.7
|
|
||||
Limited Liability Companies and Limited Partnerships
|
|
160.3
|
|
|
27.7
|
|
|
(1.8
|
)
|
|
186.2
|
|
||||
Investments in Equity Securities
|
|
$
|
561.5
|
|
|
$
|
75.7
|
|
|
$
|
(5.0
|
)
|
|
$
|
632.2
|
|
DOLLARS IN MILLIONS
|
|
Less Than 12 Months
|
|
12 Months or Longer
|
|
Total
|
||||||||||||||||||
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|||||||||||||
Fixed Maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Government and Government Agencies and Authorities
|
|
$
|
56.6
|
|
|
$
|
(1.6
|
)
|
|
$
|
24.1
|
|
|
$
|
(2.0
|
)
|
|
$
|
80.7
|
|
|
$
|
(3.6
|
)
|
States and Political Subdivisions
|
|
131.0
|
|
|
(2.6
|
)
|
|
0.9
|
|
|
(0.1
|
)
|
|
131.9
|
|
|
(2.7
|
)
|
||||||
Corporate Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Bonds and Notes
|
|
783.8
|
|
|
(26.0
|
)
|
|
133.6
|
|
|
(14.7
|
)
|
|
917.4
|
|
|
(40.7
|
)
|
||||||
Collateralized Loan Obligations
|
|
57.4
|
|
|
(2.9
|
)
|
|
0.8
|
|
|
(0.1
|
)
|
|
58.2
|
|
|
(3.0
|
)
|
||||||
Other Mortgage- and Asset-backed
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
||||||
Total Fixed Maturities
|
|
1,028.8
|
|
|
(33.1
|
)
|
|
159.7
|
|
|
(16.9
|
)
|
|
1,188.5
|
|
|
(50.0
|
)
|
||||||
Equity Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Preferred Stocks:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Finance, Insurance and Real Estate
|
|
2.7
|
|
|
—
|
|
|
12.3
|
|
|
(0.8
|
)
|
|
15.0
|
|
|
(0.8
|
)
|
||||||
Other Industries
|
|
7.3
|
|
|
(0.8
|
)
|
|
—
|
|
|
—
|
|
|
7.3
|
|
|
(0.8
|
)
|
||||||
Common Stocks:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Finance, Insurance and Real Estate
|
|
16.3
|
|
|
(1.0
|
)
|
|
—
|
|
|
—
|
|
|
16.3
|
|
|
(1.0
|
)
|
||||||
Other Industries
|
|
2.8
|
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|
2.8
|
|
|
(0.3
|
)
|
||||||
Other Equity Interests:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Exchange Traded Funds
|
|
135.2
|
|
|
(3.7
|
)
|
|
—
|
|
|
—
|
|
|
135.2
|
|
|
(3.7
|
)
|
||||||
Limited Liability Companies and Limited Partnerships
|
|
2.7
|
|
|
(0.5
|
)
|
|
—
|
|
|
—
|
|
|
2.7
|
|
|
(0.5
|
)
|
||||||
Total Equity Securities
|
|
167.0
|
|
|
(6.3
|
)
|
|
12.3
|
|
|
(0.8
|
)
|
|
179.3
|
|
|
(7.1
|
)
|
||||||
Total
|
|
$
|
1,195.8
|
|
|
$
|
(39.4
|
)
|
|
$
|
172.0
|
|
|
$
|
(17.7
|
)
|
|
$
|
1,367.8
|
|
|
$
|
(57.1
|
)
|
•
|
The financial condition and prospects of the issuer;
|
•
|
The length of time and magnitude of the unrealized loss;
|
•
|
The volatility of the investment;
|
•
|
Analyst recommendations and near term price targets;
|
•
|
Opinions of the Company’s external investment managers;
|
•
|
Market liquidity;
|
•
|
Debt-like characteristics of perpetual preferred stocks and issuer ratings; and
|
•
|
The Company’s intentions to sell or ability to hold the investments until recovery.
|
DOLLARS IN MILLIONS
|
|
Less Than 12 Months
|
|
12 Months or Longer
|
|
Total
|
||||||||||||||||||
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|||||||||||||
Fixed Maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Government and Government Agencies and Authorities
|
|
$
|
24.9
|
|
|
$
|
(0.7
|
)
|
|
$
|
55.5
|
|
|
$
|
(1.3
|
)
|
|
$
|
80.4
|
|
|
$
|
(2.0
|
)
|
States and Political Subdivisions
|
|
1.0
|
|
|
—
|
|
|
126.3
|
|
|
(1.8
|
)
|
|
127.3
|
|
|
(1.8
|
)
|
||||||
Corporate Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Bonds and Notes
|
|
250.4
|
|
|
(5.1
|
)
|
|
360.5
|
|
|
(10.0
|
)
|
|
610.9
|
|
|
(15.1
|
)
|
||||||
Redeemable Preferred Stocks
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Collateralized Loan Obligations
|
|
51.2
|
|
|
(0.7
|
)
|
|
3.4
|
|
|
(0.1
|
)
|
|
54.6
|
|
|
(0.8
|
)
|
||||||
Other Mortgage- and Asset-backed
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
||||||
Total Fixed Maturities
|
|
327.5
|
|
|
(6.5
|
)
|
|
546.1
|
|
|
(13.2
|
)
|
|
873.6
|
|
|
(19.7
|
)
|
||||||
Equity Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Preferred Stocks:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Finance, Insurance and Real Estate
|
|
7.5
|
|
|
(0.1
|
)
|
|
12.1
|
|
|
(0.9
|
)
|
|
19.6
|
|
|
(1.0
|
)
|
||||||
Other Industries
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
||||||
Common Stocks:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Manufacturing
|
|
15.1
|
|
|
(1.1
|
)
|
|
—
|
|
|
—
|
|
|
15.1
|
|
|
(1.1
|
)
|
||||||
Other Industries
|
|
4.2
|
|
|
(0.4
|
)
|
|
1.0
|
|
|
—
|
|
|
5.2
|
|
|
(0.4
|
)
|
||||||
Other Equity Interests:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Exchange Traded Funds
|
|
14.9
|
|
|
(0.1
|
)
|
|
14.4
|
|
|
(0.6
|
)
|
|
29.3
|
|
|
(0.7
|
)
|
||||||
Limited Liability Companies and Limited Partnerships
|
|
54.4
|
|
|
(1.5
|
)
|
|
6.6
|
|
|
(0.3
|
)
|
|
61.0
|
|
|
(1.8
|
)
|
||||||
Total Equity Securities
|
|
96.1
|
|
|
(3.2
|
)
|
|
34.6
|
|
|
(1.8
|
)
|
|
130.7
|
|
|
(5.0
|
)
|
||||||
Total
|
|
$
|
423.6
|
|
|
$
|
(9.7
|
)
|
|
$
|
580.7
|
|
|
$
|
(15.0
|
)
|
|
$
|
1,004.3
|
|
|
$
|
(24.7
|
)
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Cumulative Balance of Pre-tax Credit Losses Recognized in Retained Earnings at Beginning of Year
|
|
$
|
5.3
|
|
|
$
|
9.9
|
|
|
$
|
4.6
|
|
Pre-tax Credit Losses on Fixed Maturities without Pre-tax Credit Losses Included in Cumulative Balance at Beginning of Year
|
|
0.2
|
|
|
2.4
|
|
|
1.8
|
|
|||
Additional Pre-tax Credit Losses on Fixed Maturities with Pre-tax Credit Losses Included in Cumulative Balance at Beginning of Year
|
|
—
|
|
|
0.6
|
|
|
7.3
|
|
|||
Reductions for Change in Impairment Status:
|
|
|
|
|
|
|
||||||
From Status of Credit Loss to Status of Intent-to-sell or Required-to-sell
|
|
(0.4
|
)
|
|
(2.4
|
)
|
|
(3.2
|
)
|
|||
Reductions for Investments Sold During Year
|
|
—
|
|
|
(5.2
|
)
|
|
(0.6
|
)
|
|||
Balance at End of Year
|
|
$
|
5.1
|
|
|
$
|
5.3
|
|
|
$
|
9.9
|
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
||||
Loans to Policyholders at Unpaid Principal
|
|
$
|
288.4
|
|
|
$
|
283.4
|
|
Real Estate at Depreciated Cost
|
|
149.8
|
|
|
160.9
|
|
||
Trading Securities at Fair Value
|
|
4.7
|
|
|
4.9
|
|
||
Other
|
|
0.3
|
|
|
0.4
|
|
||
Total
|
|
$
|
443.2
|
|
|
$
|
449.6
|
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
||||
Property & Casualty Insurance
|
|
103.6
|
|
|
92.4
|
|
||
Life & Health Insurance
|
|
219.4
|
|
|
219.4
|
|
||
Total
|
|
$
|
323.0
|
|
|
$
|
311.8
|
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Beginning Property and Casualty Insurance Reserves:
|
|
|
|
|
|
|
||||||
Gross of Reinsurance at Beginning of Year
|
|
$
|
733.9
|
|
|
$
|
843.5
|
|
|
$
|
970.6
|
|
Less Reinsurance Recoverables at Beginning of Year
|
|
54.9
|
|
|
63.4
|
|
|
66.2
|
|
|||
Property and Casualty Insurance Reserves, Net of Reinsurance at Beginning of Year
|
|
679.0
|
|
|
780.1
|
|
|
904.4
|
|
|||
Property and Casualty Insurance Reserves Acquired, Net of Reinsurance and Indemnification
|
|
125.4
|
|
|
—
|
|
|
—
|
|
|||
Incurred Losses and LAE related to:
|
|
|
|
|
|
|
||||||
Current Year:
|
|
|
|
|
|
|
||||||
Continuing Operations
|
|
1,123.3
|
|
|
965.4
|
|
|
1,056.5
|
|
|||
Prior Years:
|
|
|
|
|
|
|
||||||
Continuing Operations
|
|
(11.5
|
)
|
|
(53.5
|
)
|
|
(59.8
|
)
|
|||
Discontinued Operations
|
|
(8.6
|
)
|
|
(3.6
|
)
|
|
(4.8
|
)
|
|||
Total Incurred Losses and LAE related to Prior Years
|
|
(20.1
|
)
|
|
(57.1
|
)
|
|
(64.6
|
)
|
|||
Total Incurred Losses and LAE
|
|
1,103.2
|
|
|
908.3
|
|
|
991.9
|
|
|||
Paid Losses and LAE related to:
|
|
|
|
|
|
|
||||||
Current Year:
|
|
|
|
|
|
|
||||||
Continuing Operations
|
|
723.2
|
|
|
639.8
|
|
|
682.2
|
|
|||
Prior Years:
|
|
|
|
|
|
|
||||||
Continuing Operations
|
|
366.2
|
|
|
360.4
|
|
|
421.7
|
|
|||
Discontinued Operations
|
|
7.4
|
|
|
9.2
|
|
|
12.3
|
|
|||
Total Paid Losses and LAE related to Prior Years
|
|
373.6
|
|
|
369.6
|
|
|
434.0
|
|
|||
Total Paid Losses and LAE
|
|
1,096.8
|
|
|
1,009.4
|
|
|
1,116.2
|
|
|||
Property and Casualty Insurance Reserves, Net of Reinsurance and Indemnification at End of Year
|
|
810.8
|
|
|
679
|
|
|
780.1
|
|
|||
Plus Reinsurance and Indemnification Recoverables at End of Year
|
|
52.0
|
|
|
54.9
|
|
|
63.4
|
|
|||
Property and Casualty Insurance Reserves, Gross of Reinsurance at End of Year
|
|
$
|
862.8
|
|
|
$
|
733.9
|
|
|
$
|
843.5
|
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
||||
Senior Notes:
|
|
|
|
|
||||
6.00% Senior Notes due November 30, 2015
|
|
$
|
—
|
|
|
$
|
249.5
|
|
6.00% Senior Notes due May 15, 2017
|
|
359.1
|
|
|
358.5
|
|
||
4.35% Senior Notes due February 15, 2025
|
|
247.4
|
|
|
—
|
|
||
7.375% Subordinated Debentures due February 27, 2054
|
|
144.1
|
|
|
144.1
|
|
||
Total Debt Outstanding
|
|
$
|
750.6
|
|
|
$
|
752.1
|
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Notes Payable under Revolving Credit Agreement
|
|
$
|
0.8
|
|
|
$
|
0.8
|
|
|
$
|
1.4
|
|
Federal Home Loan Bank of Dallas
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Federal Home Loan Bank of Chicago
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Senior Notes Payable:
|
|
|
|
|
|
|
||||||
6.00% Senior Notes due November 30, 2015
|
|
3.7
|
|
|
15.5
|
|
|
15.4
|
|
|||
6.00% Senior Notes due May 15, 2017
|
|
22.2
|
|
|
22.2
|
|
|
22.2
|
|
|||
4.35% Senior Notes due February 15, 2025
|
|
9.5
|
|
|
—
|
|
|
—
|
|
|||
7.375% Subordinated Debentures due February 27, 2054
|
|
11.1
|
|
|
9.4
|
|
|
—
|
|
|||
Mortgage Note Payable
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|||
Interest Expense before Capitalization of Interest
|
|
47.3
|
|
|
47.9
|
|
|
39.2
|
|
|||
Capitalization of Interest
|
|
(0.8
|
)
|
|
(1.0
|
)
|
|
(0.9
|
)
|
|||
Total Interest Expense
|
|
$
|
46.5
|
|
|
$
|
46.9
|
|
|
$
|
38.3
|
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Notes Payable under Revolving Credit Agreement
|
|
$
|
1.4
|
|
|
$
|
0.6
|
|
|
$
|
0.8
|
|
Federal Home Loan Bank of Dallas
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Federal Home Loan Bank of Chicago
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Senior Notes Payable:
|
|
|
|
|
|
|
||||||
6.00% Senior Notes due November 30, 2015
|
|
4.8
|
|
|
15.0
|
|
|
15.0
|
|
|||
6.00% Senior Notes due May 15, 2017
|
|
21.6
|
|
|
21.6
|
|
|
21.6
|
|
|||
4.35% Senior Notes due February 15, 2025
|
|
5.2
|
|
|
—
|
|
|
—
|
|
|||
7.375% Subordinated Debentures due February 27, 2054
|
|
11.1
|
|
|
8.5
|
|
|
—
|
|
|||
Mortgage Note Payable
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|||
Total Interest Paid
|
|
$
|
44.1
|
|
|
$
|
45.7
|
|
|
$
|
37.7
|
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Minimum Rental Expense
|
|
$
|
20.7
|
|
|
$
|
21.5
|
|
|
$
|
28.3
|
|
Less Sublease Rental Income
|
|
(1.7
|
)
|
|
(1.3
|
)
|
|
(1.8
|
)
|
|||
Net Rental Expense
|
|
$
|
19.0
|
|
|
$
|
20.2
|
|
|
$
|
26.5
|
|
DOLLARS IN MILLIONS
|
|
Capital
Leases
|
|
Operating
Leases
|
||||
2016
|
|
$
|
2.4
|
|
|
$
|
17.8
|
|
2017
|
|
0.7
|
|
|
16.5
|
|
||
2018
|
|
0.1
|
|
|
11.9
|
|
||
2019
|
|
—
|
|
|
8.6
|
|
||
2020
|
|
—
|
|
|
6.3
|
|
||
2021 and Thereafter
|
|
—
|
|
|
14.2
|
|
||
Total Future Payments
|
|
$
|
3.2
|
|
|
$
|
75.3
|
|
Less Imputed Interest
|
|
(0.2
|
)
|
|
|
|||
Present Value of Minimum Capital Lease Payments
|
|
$
|
3.0
|
|
|
|
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||
RANGE OF VALUATION ASSUMPTIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Expected Volatility
|
|
21.31
|
%
|
-
|
41.65
|
%
|
|
25.76
|
%
|
-
|
44.43
|
%
|
|
39.10
|
%
|
-
|
48.23
|
%
|
Risk-free Interest Rate
|
|
1.08
|
|
-
|
1.96
|
|
|
1.07
|
|
-
|
2.14
|
|
|
0.62
|
|
-
|
1.38
|
|
Expected Dividend Yield
|
|
2.37
|
|
-
|
2.62
|
|
|
2.53
|
|
-
|
2.60
|
|
|
2.83
|
|
-
|
3.00
|
|
WEIGHTED-AVERAGE EXPECTED LIFE IN YEARS
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Employee Grants
|
|
4
|
|
-
|
7
|
|
4
|
|
-
|
7
|
|
4
|
|
-
|
7
|
|||
Director Grants
|
|
5.5
|
|
6
|
|
6
|
|
|
Shares
Subject to
Awards
|
|
Weighted-
average
Exercise Price
Per Share ($)
|
|
Weighted-
average
Remaining
Contractual
Life (in Years)
|
|
Aggregate
Intrinsic
Value
($ In Millions)
|
|||||
Outstanding at Beginning of the Year
|
|
2,265,711
|
|
|
$
|
39.74
|
|
|
|
|
|
||
Granted
|
|
397,532
|
|
|
37.51
|
|
|
|
|
|
|||
Exercised
|
|
(629,625
|
)
|
|
31.84
|
|
|
|
|
|
|||
Forfeited or Expired
|
|
(605,461
|
)
|
|
46.45
|
|
|
|
|
|
|||
Outstanding at December 31, 2015
|
|
1,428,157
|
|
|
39.75
|
|
|
5.4
|
|
$
|
2.1
|
|
|
Vested and Expected to Vest at December 31, 2015
|
|
1,393,530
|
|
|
$
|
39.84
|
|
|
5.3
|
|
$
|
2.0
|
|
Exercisable at December 31, 2015
|
|
978,437
|
|
|
$
|
41.02
|
|
|
3.8
|
|
$
|
1.6
|
|
|
|
|
|
Outstanding
|
|
Exercisable
|
||||||||||||
Range of Exercise Prices ($)
|
|
Shares
Subject to
Awards
|
|
Weighted-
average
Exercise Price
Per Share ($)
|
|
Weighted-
average
Remaining
Contractual
Life (in Years)
|
|
Shares
Subject to
Awards
|
|
Weighted-
average
Exercise Price
Per Share ($)
|
||||||||
15.01
|
|
-
|
20.00
|
|
|
4,000
|
|
|
16.48
|
|
|
3.35
|
|
4,000
|
|
|
16.48
|
|
20.01
|
|
-
|
25.00
|
|
|
14,500
|
|
|
23.47
|
|
|
4.07
|
|
14,500
|
|
|
23.47
|
|
25.01
|
|
-
|
30.00
|
|
|
75,750
|
|
|
28.67
|
|
|
5.46
|
|
75,750
|
|
|
28.67
|
|
30.01
|
|
-
|
35.00
|
|
|
173,625
|
|
|
33.20
|
|
|
7.11
|
|
131,998
|
|
|
33.12
|
|
35.01
|
|
-
|
40.00
|
|
|
600,000
|
|
|
36.55
|
|
|
7.73
|
|
290,187
|
|
|
36.83
|
|
40.01
|
|
-
|
45.00
|
|
|
103,782
|
|
|
40.70
|
|
|
9.89
|
|
5,502
|
|
|
40.70
|
|
45.01
|
|
-
|
50.00
|
|
|
456,500
|
|
|
48.80
|
|
|
0.59
|
|
456,500
|
|
|
48.80
|
|
15.01
|
|
-
|
50.00
|
|
|
1,428,157
|
|
|
39.75
|
|
|
5.36
|
|
978,437
|
|
|
41.02
|
|
|
Time-based Restricted Stock Awards
|
|
Time-based RSU Awards
|
||||||||||
|
Number of Shares
|
|
Weighted-
average
Grant-date
Fair Value
Per Share
|
|
Number of RSUs
|
|
Weighted-
average
Grant-date
Fair Value
Per RSU
|
||||||
Nonvested Balance at Beginning of the Year
|
53,095
|
|
|
$
|
32.42
|
|
|
30,024
|
|
|
$
|
36.60
|
|
Granted
|
—
|
|
|
—
|
|
|
74,375
|
|
|
36.79
|
|
||
Vested
|
(18,733
|
)
|
|
31.09
|
|
|
(16,701
|
)
|
|
36.33
|
|
||
Forfeited
|
(4,914
|
)
|
|
29.48
|
|
|
(2,650
|
)
|
|
36.19
|
|
||
Nonvested Balance at December 31, 2015
|
29,448
|
|
|
$
|
33.77
|
|
|
85,048
|
|
|
$
|
36.84
|
|
•
|
exceeds the “target” performance level, additional shares of stock will be issued to the award recipient;
|
•
|
is below the “target” performance level, but at or above a “minimum” performance level, only a portion of the shares of performance-based restricted stock originally issued to the award recipient will vest; or
|
•
|
is below a “minimum” performance level, none of the shares of performance-based restricted stock originally issued to the award recipient will vest.
|
|
Performance-based Restricted Stock Awards
|
|
Performance-based RSU Awards
|
||||||||||
|
Number of Shares
|
|
Weighted-
average
Grant-date
Fair Value
Per Share
|
|
Number of RSUs
|
|
Weighted-
average
Grant-date
Fair Value
Per RSU
|
||||||
Nonvested Balance at Beginning of the Year
|
110,625
|
|
|
$
|
39.28
|
|
|
61,875
|
|
|
$
|
40.50
|
|
Granted
|
—
|
|
|
—
|
|
|
68,825
|
|
|
43.05
|
|
||
Vested
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Forfeited
|
(59,225
|
)
|
|
36.81
|
|
|
(2,600
|
)
|
|
41.68
|
|
||
Nonvested Balance at December 31, 2015
|
51,400
|
|
|
$
|
42.12
|
|
|
128,100
|
|
|
$
|
41.85
|
|
|
|
Number of DSUs
|
|
Weighted-
average
Grant-date
Fair Value
Per DSU
|
|||
Vested Balance at Beginning of the Year
|
|
8,000
|
|
|
$
|
34.52
|
|
Granted and Vested
|
|
3,500
|
|
|
38.38
|
|
|
Reduction for Shares Issued on Conversion
|
|
(4,500
|
)
|
|
34.94
|
|
|
Vested Balance at December 31, 2015
|
|
7,000
|
|
|
$
|
36.17
|
|
SHARES IN THOUSANDS
|
|
2015
|
|
2014
|
|
2013
|
|||
Equity-based Compensation Equivalent Shares
|
|
959.7
|
|
|
1,605.1
|
|
|
2,080.9
|
|
Weighted-average Unrestricted Shares and Equivalent Shares Outstanding Assuming Dilution
|
|
959.7
|
|
|
1,605.1
|
|
|
2,080.9
|
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Other Comprehensive Income (Loss) Before Income Taxes:
|
|
|
|
|
|
|
||||||
Unrealized Holding Gains (Losses) Arising During the Year Before Reclassification Adjustment
|
|
$
|
(151.9
|
)
|
|
$
|
259.7
|
|
|
$
|
(324.9
|
)
|
Reclassification Adjustment for Amounts Included in Net Income
|
|
(25.4
|
)
|
|
(25.1
|
)
|
|
(37.9
|
)
|
|||
Unrealized Holding Gains (Losses)
|
|
(177.3
|
)
|
|
234.6
|
|
|
(362.8
|
)
|
|||
Foreign Currency Translation Adjustments Arising During the Year Before Reclassification Adjustment
|
|
(1.4
|
)
|
|
(1.0
|
)
|
|
0.2
|
|
|||
Reclassification Adjustment for Amounts Included in Net Income
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Foreign Currency Translation Adjustments
|
|
(1.4
|
)
|
|
(1.0
|
)
|
|
0.2
|
|
|||
Net Unrecognized Postretirement Benefit Costs Arising During the Year
|
|
3.0
|
|
|
(106.4
|
)
|
|
61.6
|
|
|||
Amortization of Net Unrecognized Postretirement Benefit Costs
|
|
23.1
|
|
|
7.9
|
|
|
25.0
|
|
|||
Net Unrecognized Postretirement Benefit Costs
|
|
26.1
|
|
|
(98.5
|
)
|
|
86.6
|
|
|||
Other Comprehensive Income (Loss) Before Income Taxes
|
|
$
|
(152.6
|
)
|
|
$
|
135.1
|
|
|
$
|
(276.0
|
)
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Income Tax Benefit (Expense):
|
|
|
|
|
|
|
||||||
Unrealized Holding Gains and Losses Arising During the Year Before Reclassification Adjustment
|
|
$
|
53.9
|
|
|
$
|
(91.6
|
)
|
|
$
|
115.9
|
|
Reclassification Adjustment for Amounts Included in Net Income
|
|
8.9
|
|
|
8.8
|
|
|
13.2
|
|
|||
Unrealized Holding Gains and Losses
|
|
62.8
|
|
|
(82.8
|
)
|
|
129.1
|
|
|||
Foreign Currency Translation Adjustments Arising During the Year Before Reclassification Adjustment
|
|
0.5
|
|
|
0.4
|
|
|
(0.1
|
)
|
|||
Reclassification Adjustment for Amounts Included in Net Income
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Foreign Currency Translation Adjustment
|
|
0.5
|
|
|
0.4
|
|
|
(0.1
|
)
|
|||
Net Unrecognized Postretirement Benefit Costs Arising During the Year
|
|
(1.1
|
)
|
|
37.5
|
|
|
(21.6
|
)
|
|||
Amortization of Net Unrecognized Postretirement Benefit Costs
|
|
(8.0
|
)
|
|
(2.8
|
)
|
|
(8.8
|
)
|
|||
Net Unrecognized Postretirement Benefit Costs
|
|
(9.1
|
)
|
|
34.7
|
|
|
(30.4
|
)
|
|||
Other Comprehensive Income Tax Benefit (Expense)
|
|
$
|
54.2
|
|
|
$
|
(47.7
|
)
|
|
$
|
98.6
|
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
||||
Unrealized Gains on Investments, Net of Income Taxes:
|
|
|
|
|
||||
Available for Sale Fixed Maturities with Portion of OTTI Recognized in Earnings
|
|
$
|
1.4
|
|
|
$
|
2.8
|
|
Other Net Unrealized Gains on Investments
|
|
211.7
|
|
|
324.8
|
|
||
Foreign Currency Translation Adjustments, Net of Income Taxes
|
|
(0.7
|
)
|
|
0.2
|
|
||
Net Unrecognized Postretirement Benefit Costs, Net of Income Taxes
|
|
(88.1
|
)
|
|
(105.1
|
)
|
||
Accumulated Other Comprehensive Income
|
|
$
|
124.3
|
|
|
$
|
222.7
|
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Reclassification of AOCI from Unrealized Gains and Losses on Available For Sale Securities to:
|
|
|
|
|
|
|
||||||
Net Realized Gains on Sales of Investments
|
|
$
|
52.6
|
|
|
$
|
37.9
|
|
|
$
|
51.8
|
|
Net Impairment Losses Recognized in Earnings
|
|
(27.2
|
)
|
|
(12.8
|
)
|
|
(13.9
|
)
|
|||
Total Before Income Taxes
|
|
25.4
|
|
|
25.1
|
|
|
37.9
|
|
|||
Income Tax Expense
|
|
(8.9
|
)
|
|
(8.8
|
)
|
|
(13.2
|
)
|
|||
Reclassification from AOCI, Net of Income Taxes
|
|
16.5
|
|
|
16.3
|
|
|
24.7
|
|
|||
Reclassification of AOCI from Amortization of Net Unrecognized Postretirement Benefit Costs to:
|
|
|
|
|
|
|
||||||
Interest and Other Expenses
|
|
(23.1
|
)
|
|
(7.9
|
)
|
|
(25.0
|
)
|
|||
Income Tax Benefit
|
|
8.0
|
|
|
2.8
|
|
|
8.8
|
|
|||
Reclassification from AOCI, Net of Income Taxes
|
|
(15.1
|
)
|
|
(5.1
|
)
|
|
(16.2
|
)
|
|||
Total Reclassification from AOCI to Net Income
|
|
$
|
1.4
|
|
|
$
|
11.2
|
|
|
$
|
8.5
|
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Investment Income (Loss):
|
|
|
|
|
|
|
||||||
Interest and Dividends on Fixed Maturities
|
|
$
|
236.2
|
|
|
$
|
227.4
|
|
|
$
|
235.5
|
|
Dividends on Equity Securities
|
|
32.4
|
|
|
59.9
|
|
|
38.0
|
|
|||
Equity Method Limited Liability Investments
|
|
19.0
|
|
|
9.0
|
|
|
26.4
|
|
|||
Fair Value Option Investments
|
|
0.2
|
|
|
(0.7
|
)
|
|
—
|
|
|||
Short-term Investments
|
|
0.4
|
|
|
0.6
|
|
|
0.1
|
|
|||
Loans to Policyholders
|
|
21.1
|
|
|
20.5
|
|
|
19.8
|
|
|||
Real Estate
|
|
11.9
|
|
|
12.1
|
|
|
20.8
|
|
|||
Other
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|||
Total Investment Income
|
|
321.2
|
|
|
328.9
|
|
|
340.6
|
|
|||
Investment Expenses:
|
|
|
|
|
|
|
||||||
Real Estate
|
|
11.3
|
|
|
11.3
|
|
|
18.3
|
|
|||
Other Investment Expenses
|
|
7.3
|
|
|
8.5
|
|
|
7.6
|
|
|||
Total Investment Expenses
|
|
18.6
|
|
|
19.8
|
|
|
25.9
|
|
|||
Net Investment Income
|
|
$
|
302.6
|
|
|
$
|
309.1
|
|
|
$
|
314.7
|
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Fixed Maturities:
|
|
|
|
|
|
|
||||||
Gains on Sales
|
|
$
|
16.1
|
|
|
$
|
7.0
|
|
|
$
|
30.9
|
|
Losses on Sales
|
|
(1.1
|
)
|
|
(0.2
|
)
|
|
(0.4
|
)
|
|||
Equity Securities:
|
|
|
|
|
|
|
||||||
Gains on Sales
|
|
39.2
|
|
|
33.1
|
|
|
21.8
|
|
|||
Losses on Sales
|
|
(1.6
|
)
|
|
(2.0
|
)
|
|
(0.5
|
)
|
|||
Equity Method Limited Liability Investments:
|
|
|
|
|
|
|
||||||
Gains on Sales
|
|
—
|
|
|
—
|
|
|
2.5
|
|
|||
Real Estate:
|
|
|
|
|
|
|
||||||
Gains on Sales
|
|
—
|
|
|
—
|
|
|
44.2
|
|
|||
Losses on Sales
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|
—
|
|
|||
Other Investments:
|
|
|
|
|
|
|
||||||
Gain on Sale of Subsidiary
|
|
—
|
|
|
1.6
|
|
|
—
|
|
|||
Gains on Other Sales
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|||
Losses on Sales
|
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|||
Net Gains (Losses) on Trading Securities
|
|
(0.3
|
)
|
|
(0.1
|
)
|
|
0.6
|
|
|||
Net Realized Gains on Sales of Investments
|
|
$
|
52.1
|
|
|
$
|
39.1
|
|
|
$
|
99.1
|
|
Gross Gains on Sales
|
|
$
|
55.3
|
|
|
$
|
41.7
|
|
|
$
|
99.5
|
|
Gross Losses on Sales
|
|
(2.9
|
)
|
|
(2.5
|
)
|
|
(1.0
|
)
|
|||
Net Gains (Losses) on Trading Securities
|
|
(0.3
|
)
|
|
(0.1
|
)
|
|
0.6
|
|
|||
Net Realized Gains on Sales of Investments
|
|
$
|
52.1
|
|
|
$
|
39.1
|
|
|
$
|
99.1
|
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Fixed Maturities
|
|
$
|
(11.5
|
)
|
|
$
|
(5.7
|
)
|
|
$
|
(10.3
|
)
|
Equity Securities
|
|
(15.7
|
)
|
|
(7.1
|
)
|
|
(3.6
|
)
|
|||
Real Estate
|
|
—
|
|
|
(2.4
|
)
|
|
—
|
|
|||
Net Impairment Losses Recognized in Earnings
|
|
$
|
(27.2
|
)
|
|
$
|
(15.2
|
)
|
|
$
|
(13.9
|
)
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Commissions
|
|
$
|
357.6
|
|
|
$
|
324.6
|
|
|
$
|
345.7
|
|
General Expenses
|
|
241.1
|
|
|
258.1
|
|
|
257.1
|
|
|||
Taxes, Licenses and Fees
|
|
44.2
|
|
|
38.9
|
|
|
42.8
|
|
|||
Total Costs Incurred
|
|
642.9
|
|
|
621.6
|
|
|
645.6
|
|
|||
Policy Acquisition Costs:
|
|
|
|
|
|
|
||||||
Deferred
|
|
(270.6
|
)
|
|
(235.8
|
)
|
|
(253.4
|
)
|
|||
Amortized
|
|
257.4
|
|
|
235.4
|
|
|
253.9
|
|
|||
Net Policy Acquisition Costs Amortized (Deferred)
|
|
(13.2
|
)
|
|
(0.4
|
)
|
|
0.5
|
|
|||
Life VIF, P & C VIF and P&C Customer Relationships Amortized
|
|
15.4
|
|
|
7.2
|
|
|
8.3
|
|
|||
Insurance Expenses
|
|
$
|
645.1
|
|
|
$
|
628.4
|
|
|
$
|
654.4
|
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
||||
Current Income Tax Assets
|
|
$
|
9.5
|
|
|
$
|
—
|
|
Deferred Income Tax Assets
|
|
31.9
|
|
|
—
|
|
||
Current and Deferred Income Tax Assets
|
|
$
|
41.4
|
|
|
$
|
—
|
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
||||
Current Income Tax Liabilities
|
|
$
|
—
|
|
|
$
|
7.8
|
|
Deferred Income Tax Liabilities
|
|
—
|
|
|
21.5
|
|
||
Unrecognized Tax Benefits
|
|
3.8
|
|
|
7.2
|
|
||
Liabilities for Income Taxes
|
|
$
|
3.8
|
|
|
$
|
36.5
|
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
||||
Deferred Income Tax Assets:
|
|
|
|
|
||||
Insurance Reserves
|
|
$
|
83.0
|
|
|
$
|
78.7
|
|
Unearned Premium Reserves
|
|
41.7
|
|
|
35.5
|
|
||
Tax Capitalization of Policy Acquisition Costs
|
|
71.5
|
|
|
73.0
|
|
||
Payroll and Employee Benefit Accruals
|
|
72.0
|
|
|
74.0
|
|
||
Net Operating Loss Carryforwards
|
|
30.5
|
|
|
31.7
|
|
||
Other
|
|
15.7
|
|
|
9.8
|
|
||
Total Deferred Income Tax Assets
|
|
314.4
|
|
|
302.7
|
|
||
Deferred Income Tax Liabilities:
|
|
|
|
|
||||
Investments
|
|
109.8
|
|
|
160.1
|
|
||
Deferred Policy Acquisition Costs
|
|
110.7
|
|
|
106.1
|
|
||
Life VIF and P&C Customer Relationships
|
|
15.5
|
|
|
17.7
|
|
||
Goodwill and Other Intangible Assets Acquired
|
|
37.0
|
|
|
28.4
|
|
||
Depreciable Assets
|
|
7.3
|
|
|
7.4
|
|
||
Other
|
|
2.2
|
|
|
4.5
|
|
||
Total Deferred Income Tax Liabilities
|
|
282.5
|
|
|
324.2
|
|
||
Net Deferred Income Tax Assets (Liabilities)
|
|
$
|
31.9
|
|
|
$
|
(21.5
|
)
|
DOLLARS IN MILLIONS
|
|
NOL Carry-forwards
|
|
Deferred Tax Asset
|
||||
Expiring in:
|
|
|
|
|
||||
2020
|
|
$
|
7.8
|
|
|
$
|
2.7
|
|
2021 through 2025
|
|
30.5
|
|
|
10.7
|
|
||
2026 through 2030
|
|
29.9
|
|
|
10.5
|
|
||
2032
|
|
18.9
|
|
|
6.6
|
|
||
Total All Years
|
|
$
|
87.1
|
|
|
$
|
30.5
|
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Current Income Tax Expense
|
|
$
|
(25.7
|
)
|
|
$
|
(41.7
|
)
|
|
$
|
(49.4
|
)
|
Deferred Income Tax Benefit (Expense)
|
|
2.2
|
|
|
(5.5
|
)
|
|
(50.1
|
)
|
|||
(Increase) Decrease Unrecognized Tax Benefits
|
|
3.4
|
|
|
(0.4
|
)
|
|
(0.4
|
)
|
|||
Income Tax Expense
|
|
$
|
(20.1
|
)
|
|
$
|
(47.6
|
)
|
|
$
|
(99.9
|
)
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
Amount
|
|
Rate
|
|
Amount
|
|
Rate
|
|
Amount
|
|
Rate
|
|||||||||||
Statutory Federal Income Tax Expense
|
|
$
|
(35.1
|
)
|
|
35.0
|
%
|
|
$
|
(56.1
|
)
|
|
35.0
|
%
|
|
$
|
(110.0
|
)
|
|
35.0
|
%
|
Tax-exempt Income and Dividends Received Deduction
|
|
9.8
|
|
|
(9.7
|
)
|
|
9.0
|
|
|
(5.6
|
)
|
|
10.6
|
|
|
(3.4
|
)
|
|||
Unrecognized Tax Benefit (Expense)
|
|
2.1
|
|
|
(2.1
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|||
Indemnification Recoveries
|
|
3.7
|
|
|
(3.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
State Income Taxes
|
|
(0.6
|
)
|
|
0.5
|
|
|
(0.6
|
)
|
|
0.4
|
|
|
(0.2
|
)
|
|
0.1
|
|
|||
Other, Net
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
(0.1
|
)
|
|
—
|
|
|
0.1
|
|
|||
Effective Income Tax Expense from Continuing Operations
|
|
$
|
(20.1
|
)
|
|
20.1
|
%
|
|
$
|
(47.6
|
)
|
|
29.7
|
%
|
|
$
|
(99.9
|
)
|
|
31.8
|
%
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Income Tax Expense:
|
|
|
|
|
|
|
||||||
Continuing Operations
|
|
$
|
(20.1
|
)
|
|
$
|
(47.6
|
)
|
|
$
|
(99.9
|
)
|
Discontinued Operations
|
|
(3.1
|
)
|
|
(1.1
|
)
|
|
(1.7
|
)
|
|||
Unrealized Depreciation (Appreciation) on Securities
|
|
62.8
|
|
|
(82.8
|
)
|
|
129.1
|
|
|||
Foreign Currency Translation Adjustments on Investments
|
|
0.5
|
|
|
0.4
|
|
|
(0.1
|
)
|
|||
Tax Effects from Postretirement Benefit Plans
|
|
(9.1
|
)
|
|
34.7
|
|
|
(30.4
|
)
|
|||
Tax Effects from Long-term Equity-based Compensation included in Paid-in Capital
|
|
(1.0
|
)
|
|
(1.0
|
)
|
|
0.2
|
|
|||
Comprehensive Income Tax Benefit (Expense)
|
|
$
|
30.0
|
|
|
$
|
(97.4
|
)
|
|
$
|
(2.8
|
)
|
DOLLARS IN MILLIONS
|
|
|
||||||
2015
|
|
2014
|
||||||
Fair Value of Plan Assets at Beginning of Year
|
|
$
|
543.0
|
|
|
$
|
524.5
|
|
Actual Return on Plan Assets
|
|
(10.6
|
)
|
|
41.7
|
|
||
Benefits Paid
|
|
(24.9
|
)
|
|
(23.2
|
)
|
||
Fair Value of Plan Assets at End of Year
|
|
507.5
|
|
|
543.0
|
|
||
Projected Benefit Obligation at Beginning of Year
|
|
634.0
|
|
|
515.5
|
|
||
Service Cost
|
|
10.5
|
|
|
8.7
|
|
||
Interest Cost
|
|
25.7
|
|
|
24.8
|
|
||
Benefits Paid
|
|
(24.9
|
)
|
|
(23.2
|
)
|
||
Plan Amendments
|
|
—
|
|
|
(0.6
|
)
|
||
Actuarial Losses (Gains)
|
|
(47.5
|
)
|
|
108.8
|
|
||
Projected Benefit Obligation at End of Year
|
|
597.8
|
|
|
634.0
|
|
||
Funded Status—Plan Assets in Excess (Deficit) of Projected Benefit Obligation
|
|
$
|
(90.3
|
)
|
|
$
|
(91.0
|
)
|
Unamortized Amount Reported in AOCI at End of Year:
|
|
|
|
|
||||
Accumulated Actuarial Loss
|
|
$
|
(152.2
|
)
|
|
$
|
(178.6
|
)
|
Prior Service Credit
|
|
0.4
|
|
|
0.5
|
|
||
Unamortized Amount Reported in AOCI at End of Year
|
|
$
|
(151.8
|
)
|
|
$
|
(178.1
|
)
|
Accumulated Benefit Obligation at End of Year
|
|
$
|
573.9
|
|
|
$
|
608.2
|
|
|
|
2015
|
|
2014
|
||
Discount Rate
|
|
4.47
|
%
|
|
4.10
|
%
|
Rate of Increase in Future Compensation Levels
|
|
3.15
|
|
|
3.31
|
|
ASSET CATEGORY
|
|
2015
|
|
2014
|
||
Cash and Short-term Investments
|
|
4
|
%
|
|
4
|
%
|
Corporate Bonds and Notes
|
|
28
|
|
|
29
|
|
Common and Preferred Stocks
|
|
43
|
|
|
43
|
|
Exchange Traded Funds
|
|
9
|
|
|
12
|
|
Other Assets
|
|
16
|
|
|
12
|
|
Total
|
|
100
|
%
|
|
100
|
%
|
DOLLARS IN MILLIONS
|
|
Quoted Prices
in Active Markets
for Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Fair Value
|
||||||||
Fixed Maturities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Government and Government Agencies and Authorities
|
|
$
|
19.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19.2
|
|
States and Political Subdivisions
|
|
—
|
|
|
3.2
|
|
|
—
|
|
|
3.2
|
|
||||
Corporate Bonds and Notes
|
|
—
|
|
|
122.2
|
|
|
—
|
|
|
122.2
|
|
||||
Equity Securities:
|
|
|
|
|
|
|
|
|
||||||||
Preferred Stocks:
|
|
|
|
|
|
|
|
|
||||||||
Finance, Insurance and Real Estate
|
|
—
|
|
|
6.1
|
|
|
—
|
|
|
6.1
|
|
||||
Common Stocks:
|
|
|
|
|
|
|
|
|
||||||||
Manufacturing
|
|
77.9
|
|
|
16.2
|
|
|
—
|
|
|
94.1
|
|
||||
Other Industries
|
|
82.5
|
|
|
1.8
|
|
|
—
|
|
|
84.3
|
|
||||
Other Equity Interests:
|
|
|
|
|
|
|
|
|
||||||||
Collective Investment Funds
|
|
—
|
|
|
31.1
|
|
|
—
|
|
|
31.1
|
|
||||
Exchange Traded Funds
|
|
47.2
|
|
|
—
|
|
|
—
|
|
|
47.2
|
|
||||
Limited Liability Companies and Limited Partnerships
|
|
—
|
|
|
—
|
|
|
78.2
|
|
|
78.2
|
|
||||
Short-term Investments
|
|
20.4
|
|
|
—
|
|
|
—
|
|
|
20.4
|
|
||||
Receivables and Other
|
|
1.1
|
|
|
—
|
|
|
0.4
|
|
|
1.5
|
|
||||
Total
|
|
$
|
248.3
|
|
|
$
|
180.6
|
|
|
$
|
78.6
|
|
|
$
|
507.5
|
|
DOLLARS IN MILLIONS
|
|
Other Equity
Interests
|
|
Receivables
and Other
|
|
Total
|
||||||
Balance at Beginning of Year
|
|
$
|
64.5
|
|
|
$
|
0.4
|
|
|
$
|
64.9
|
|
Return on Plan Assets Held
|
|
(1.5
|
)
|
|
—
|
|
|
(1.5
|
)
|
|||
Purchases, Sales and Settlements, Net
|
|
15.2
|
|
|
—
|
|
|
15.2
|
|
|||
Balance at End of Year
|
|
$
|
78.2
|
|
|
$
|
0.4
|
|
|
$
|
78.6
|
|
DOLLARS IN MILLIONS
|
|
Quoted Prices
in Active Markets
for Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Fair Value
|
||||||||
Fixed Maturities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Government and Government Agencies and Authorities
|
|
$
|
18.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18.4
|
|
States and Political Subdivisions
|
|
—
|
|
|
3.3
|
|
|
—
|
|
|
3.3
|
|
||||
Corporate Bonds and Notes
|
|
—
|
|
|
136.6
|
|
|
—
|
|
|
136.6
|
|
||||
Equity Securities:
|
|
|
|
|
|
|
|
|
||||||||
Preferred Stocks:
|
|
|
|
|
|
|
|
|
||||||||
Finance, Insurance and Real Estate
|
|
—
|
|
|
6.4
|
|
|
—
|
|
|
6.4
|
|
||||
Common Stocks:
|
|
|
|
|
|
|
|
|
||||||||
Manufacturing
|
|
98.8
|
|
|
15.0
|
|
|
—
|
|
|
113.8
|
|
||||
Other Industries
|
|
79.3
|
|
|
2.3
|
|
|
—
|
|
|
81.6
|
|
||||
Other Equity Interests:
|
|
|
|
|
|
|
|
|
||||||||
Collective Investment Funds
|
|
—
|
|
|
30.0
|
|
|
—
|
|
|
30.0
|
|
||||
Exchange Traded Funds
|
|
65.5
|
|
|
—
|
|
|
—
|
|
|
65.5
|
|
||||
Limited Liability Companies and Limited Partnerships
|
|
—
|
|
|
—
|
|
|
64.5
|
|
|
64.5
|
|
||||
Short-term Investments
|
|
21.5
|
|
|
—
|
|
|
—
|
|
|
21.5
|
|
||||
Receivables and Other
|
|
1.0
|
|
|
—
|
|
|
0.4
|
|
|
1.4
|
|
||||
Total
|
|
$
|
284.5
|
|
|
$
|
193.6
|
|
|
$
|
64.9
|
|
|
$
|
543.0
|
|
DOLLARS IN MILLIONS
|
|
Other Equity
Interests
|
|
Receivables
and Other
|
|
Total
|
||||||
Balance at Beginning of Year
|
|
$
|
46.9
|
|
|
$
|
0.5
|
|
|
$
|
47.4
|
|
Return on Plan Assets Held
|
|
3.4
|
|
|
—
|
|
|
3.4
|
|
|||
Purchases, Sales and Settlements, Net
|
|
14.2
|
|
|
(0.1
|
)
|
|
14.1
|
|
|||
Balance at End of Year
|
|
$
|
64.5
|
|
|
$
|
0.4
|
|
|
$
|
64.9
|
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Service Cost Earned During the Year
|
|
$
|
10.5
|
|
|
$
|
8.7
|
|
|
$
|
10.8
|
|
Interest Cost on Projected Benefit Obligation
|
|
25.7
|
|
|
24.8
|
|
|
22.4
|
|
|||
Expected Return on Plan Assets
|
|
(35.0
|
)
|
|
(34.9
|
)
|
|
(29.7
|
)
|
|||
Amortization of Actuarial Loss
|
|
24.4
|
|
|
9.7
|
|
|
26.2
|
|
|||
Pension Expense Recognized in Consolidated Statements of Income
|
|
25.6
|
|
|
8.3
|
|
|
29.7
|
|
|||
Unrecognized Pension Loss (Gain) Arising During the Year
|
|
(1.9
|
)
|
|
102.0
|
|
|
(53.8
|
)
|
|||
Prior Service Credit Arising During the Year
|
|
—
|
|
|
(0.6
|
)
|
|
—
|
|
|||
Amortization of Accumulated Unrecognized Pension Loss
|
|
(24.4
|
)
|
|
(9.7
|
)
|
|
(26.2
|
)
|
|||
Comprehensive Pension Expense (Income)
|
|
$
|
(0.7
|
)
|
|
$
|
100.0
|
|
|
$
|
(50.3
|
)
|
|
|
2015
|
|
2014
|
|
2013
|
|||
Discount Rate
|
|
4.10
|
%
|
|
4.90
|
%
|
|
4.05
|
%
|
Rate of Increase in Future Compensation Levels
|
|
3.31
|
|
|
3.05
|
|
|
3.08
|
|
Expected Long Term Rate of Return on Plan Assets
|
|
6.75
|
|
|
7.00
|
|
|
7.00
|
|
DOLLARS IN MILLIONS
|
|
Years Ending December 31,
|
||||||||||||||||||||||
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021-2025
|
||||||||||||||
Estimated Pension Benefit Payments
|
|
$
|
26.3
|
|
|
$
|
27.7
|
|
|
$
|
29.1
|
|
|
$
|
30.3
|
|
|
$
|
31.5
|
|
|
$
|
174.4
|
|
DOLLARS IN MILLIONS
|
|
|
||||||
2015
|
|
2014
|
||||||
Fair Value of Plan Assets at Beginning of Year
|
|
$
|
—
|
|
|
$
|
—
|
|
Employer Contributions
|
|
3.4
|
|
|
3.4
|
|
||
Plan Participants’ Contributions
|
|
1.2
|
|
|
1.2
|
|
||
Benefits Paid
|
|
(4.6
|
)
|
|
(4.6
|
)
|
||
Fair Value of Plan Assets at End of Year
|
|
—
|
|
|
—
|
|
||
Accumulated Postretirement Benefit Obligation at Beginning of Year
|
|
31.1
|
|
|
35.1
|
|
||
Service Cost
|
|
0.2
|
|
|
0.2
|
|
||
Interest Cost
|
|
1.0
|
|
|
1.1
|
|
||
Plan Participants’ Contributions
|
|
1.2
|
|
|
1.2
|
|
||
Benefits Paid
|
|
(4.6
|
)
|
|
(4.6
|
)
|
||
Medicare Part D Subsidy Received
|
|
0.3
|
|
|
0.1
|
|
||
Actuarial Loss (Gain)
|
|
0.4
|
|
|
(2.0
|
)
|
||
Accumulated Postretirement Benefit Obligation at End of Year
|
|
29.6
|
|
|
31.1
|
|
||
Funded Status—Accumulated Postretirement Benefit Obligation in Excess of Plan Assets
|
|
$
|
(29.6
|
)
|
|
$
|
(31.1
|
)
|
Unamortized Actuarial Gain Reported in AOCI at End of Year
|
|
$
|
16.8
|
|
|
$
|
18.6
|
|
|
|
2015
|
|
2014
|
||
Discount Rate
|
|
3.70
|
%
|
|
3.40
|
%
|
Rate of Increase in Future Compensation Levels
|
|
2.64
|
|
|
2.68
|
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Service Cost Earned During the Year
|
|
$
|
0.2
|
|
|
$
|
0.2
|
|
|
$
|
0.2
|
|
Interest Cost on Accumulated Postretirement Benefit Obligation
|
|
1.0
|
|
|
1.1
|
|
|
1.2
|
|
|||
Amortization of Actuarial Gain
|
|
(1.4
|
)
|
|
(1.8
|
)
|
|
(1.2
|
)
|
|||
OPEB Expense (Income) Recognized in Consolidated Statements of Income
|
|
(0.2
|
)
|
|
(0.5
|
)
|
|
0.2
|
|
|||
Unrecognized OPEB Loss (Gain) Arising During the Year
|
|
0.4
|
|
|
(2.0
|
)
|
|
(6.2
|
)
|
|||
Amortization of Accumulated Unrecognized OPEB Gain
|
|
1.4
|
|
|
1.8
|
|
|
1.2
|
|
|||
Comprehensive OPEB Expense (Income)
|
|
$
|
1.6
|
|
|
$
|
(0.7
|
)
|
|
$
|
(4.8
|
)
|
|
|
2015
|
|
2014
|
|
2013
|
|||
Discount Rate
|
|
3.40
|
%
|
|
4.00
|
%
|
|
3.15
|
%
|
Rate of Increase in Future Compensation Levels
|
|
2.68
|
|
|
2.10
|
|
|
2.10
|
|
DOLLARS IN MILLIONS
|
|
Years Ending December 31,
|
||||||||||||||||||||||
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021-2025
|
||||||||||||||
Estimated Benefit Payments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Excluding Medicare Part D Subsidy
|
|
$
|
3.6
|
|
|
$
|
3.6
|
|
|
$
|
3.5
|
|
|
$
|
3.4
|
|
|
$
|
3.2
|
|
|
$
|
13.5
|
|
Expected Medicare Part D Subsidy
|
|
(0.3
|
)
|
|
(0.3
|
)
|
|
(0.3
|
)
|
|
(0.3
|
)
|
|
(0.3
|
)
|
|
(1.5
|
)
|
||||||
Net Estimated Benefit Payments
|
|
$
|
3.3
|
|
|
$
|
3.3
|
|
|
$
|
3.2
|
|
|
$
|
3.1
|
|
|
$
|
2.9
|
|
|
$
|
12.0
|
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
||||
Property & Casualty Insurance
|
|
$
|
2,749.0
|
|
|
$
|
2,486.1
|
|
Life & Health Insurance
|
|
4,733.9
|
|
|
4,810.6
|
|
||
Corporate and Other, Net
|
|
553.2
|
|
|
536.7
|
|
||
Total Assets
|
|
$
|
8,036.1
|
|
|
$
|
7,833.4
|
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Personal Automobile
|
|
$
|
1,027.7
|
|
|
$
|
831.4
|
|
|
$
|
959.1
|
|
Homeowners
|
|
286.3
|
|
|
312.4
|
|
|
326.2
|
|
|||
Other Personal Property and Casualty Insurance
|
|
122.1
|
|
|
127.4
|
|
|
134.1
|
|
|||
Commercial Automobile
|
|
54.5
|
|
|
54.8
|
|
|
52.3
|
|
|||
Life
|
|
374.1
|
|
|
387.6
|
|
|
392.7
|
|
|||
Accident and Health
|
|
144.9
|
|
|
148.6
|
|
|
161.4
|
|
|||
Total Earned Premiums
|
|
$
|
2,009.6
|
|
|
$
|
1,862.2
|
|
|
$
|
2,025.8
|
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Segment Revenues:
|
|
|
|
|
|
|
||||||
Property & Casualty Insurance:
|
|
|
|
|
|
|
||||||
Earned Premiums
|
|
$
|
1,415.2
|
|
|
$
|
1,249.5
|
|
|
$
|
1,392.9
|
|
Net Investment Income
|
|
73.3
|
|
|
72.7
|
|
|
90.9
|
|
|||
Other Income
|
|
0.6
|
|
|
0.5
|
|
|
0.5
|
|
|||
Total Property & Casualty Insurance
|
|
1,489.1
|
|
|
1,322.7
|
|
|
1,484.3
|
|
|||
Life & Health Insurance:
|
|
|
|
|
|
|
||||||
Earned Premiums
|
|
594.4
|
|
|
612.7
|
|
|
632.9
|
|
|||
Net Investment Income
|
|
214.2
|
|
|
218.7
|
|
|
209.9
|
|
|||
Other Income
|
|
2.4
|
|
|
0.9
|
|
|
0.2
|
|
|||
Total Life & Health Insurance
|
|
811.0
|
|
|
832.3
|
|
|
843.0
|
|
|||
Total Segment Revenues
|
|
2,300.1
|
|
|
2,155.0
|
|
|
2,327.3
|
|
|||
Net Realized Gains on the Sales of Investments
|
|
52.1
|
|
|
39.1
|
|
|
99.1
|
|
|||
Net Impairment Losses Recognized in Earnings
|
|
(27.2
|
)
|
|
(15.2
|
)
|
|
(13.9
|
)
|
|||
Other
|
|
15.8
|
|
|
17.7
|
|
|
14.0
|
|
|||
Total Revenues
|
|
$
|
2,340.8
|
|
|
$
|
2,196.6
|
|
|
$
|
2,426.5
|
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Segment Operating Profit:
|
|
|
|
|
|
|
||||||
Property & Casualty Insurance
|
|
$
|
23.7
|
|
|
$
|
27.1
|
|
|
$
|
139.6
|
|
Life & Health Insurance
|
|
109.7
|
|
|
141.9
|
|
|
136.9
|
|
|||
Total Segment Operating Profit
|
|
133.4
|
|
|
169.0
|
|
|
276.5
|
|
|||
Corporate and Other Operating Loss
|
|
(48.9
|
)
|
|
(32.7
|
)
|
|
(47.3
|
)
|
|||
Total Operating Profit
|
|
84.5
|
|
|
136.3
|
|
|
229.2
|
|
|||
Net Realized Gains on Sales of Investments
|
|
52.1
|
|
|
39.1
|
|
|
99.1
|
|
|||
Net Impairment Losses Recognized in Earnings
|
|
(27.2
|
)
|
|
(15.2
|
)
|
|
(13.9
|
)
|
|||
Loss from Early Extinguishment of Debt
|
|
(9.1
|
)
|
|
—
|
|
|
—
|
|
|||
Income from Continuing Operations before Income Taxes
|
|
$
|
100.3
|
|
|
$
|
160.2
|
|
|
$
|
314.4
|
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Property & Casualty Insurance
|
|
$
|
213.1
|
|
|
$
|
187.5
|
|
|
$
|
207.2
|
|
Life & Health Insurance
|
|
44.3
|
|
|
47.9
|
|
|
46.7
|
|
|||
Total Amortization
|
|
$
|
257.4
|
|
|
$
|
235.4
|
|
|
$
|
253.9
|
|
DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Income from Discontinued Operations before Income Taxes:
|
|
|
|
|
|
|
||||||
Change in Estimate of Retained Liabilities Arising from Discontinued Operations
|
|
8.6
|
|
|
3.0
|
|
|
4.9
|
|
|||
Income Tax Expense
|
|
(3.1
|
)
|
|
(1.1
|
)
|
|
(1.7
|
)
|
|||
Income from Discontinued Operations
|
|
$
|
5.5
|
|
|
$
|
1.9
|
|
|
$
|
3.2
|
|
|
|
|
|
|
|
|
||||||
Income from Discontinued Operations Per Unrestricted Share:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
0.10
|
|
|
$
|
0.04
|
|
|
$
|
0.06
|
|
Diluted
|
|
$
|
0.10
|
|
|
$
|
0.04
|
|
|
$
|
0.06
|
|
DOLLARS IN MILLIONS
|
|
Catastrophe Losses and
LAE
|
|
Percentage
of Coverage
|
|||||||
In Excess of
|
|
Up to
|
|
||||||||
Property & Casualty Insurance Segment:
|
|
|
|
|
|
|
|||||
Retained
|
|
$
|
—
|
|
|
$
|
50.0
|
|
|
—
|
%
|
1st Layer of Coverage
|
|
50.0
|
|
|
150.0
|
|
|
95.0
|
|
||
2nd Layer of Coverage
|
|
150.0
|
|
|
350.0
|
|
|
95.0
|
|
DOLLARS IN MILLIONS
|
|
Catastrophe Losses and
LAE
|
|
Percentage
of Coverage
|
|||||||
In Excess of
|
|
Up to
|
|
||||||||
Retained
|
|
$
|
—
|
|
|
$
|
50.0
|
|
|
—
|
%
|
1st Layer of Coverage
|
|
50.0
|
|
|
100.0
|
|
|
95.0
|
|
||
2nd Layer of Coverage
|
|
100.0
|
|
|
200.0
|
|
|
95.0
|
|
||
3rd Layer of Coverage
|
|
200.0
|
|
|
400.0
|
|
|
95.0
|
|
DOLLARS IN MILLIONS
|
|
Catastrophe Losses and
LAE
|
|
Percentage
of Coverage
|
|||||||
In Excess of
|
|
Up to
|
|
||||||||
Property & Casualty Insurance Segment:
|
|
|
|
|
|
|
|||||
Retained
|
|
$
|
—
|
|
|
$
|
50.0
|
|
|
—
|
%
|
1st Layer of Coverage
|
|
50.0
|
|
|
100.0
|
|
|
65.0
|
|
||
2nd Layer of Coverage
|
|
100.0
|
|
|
200.0
|
|
|
95.0
|
|
||
3rd Layer of Coverage
|
|
200.0
|
|
|
350.0
|
|
|
90.0
|
|
||
4th Layer of Coverage
|
|
350.0
|
|
|
450.0
|
|
|
50.0
|
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Property & Casualty Insurance
|
|
$
|
12.8
|
|
|
$
|
17.6
|
|
|
$
|
23.6
|
|
Life & Health Insurance
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|||
Total Ceded Catastrophe Reinsurance Premiums
|
|
$
|
12.9
|
|
|
$
|
17.7
|
|
|
$
|
23.6
|
|
DOLLARS IN MILLIONS
|
|
2015
|
|
2014
|
|
2013
|
||||||
Property & Casualty Insurance
|
|
$
|
56.6
|
|
|
$
|
80.7
|
|
|
$
|
34.6
|
|
Life & Health Insurance
|
|
3.9
|
|
|
3.1
|
|
|
1.6
|
|
|||
Total Catastrophe Losses and LAE
|
|
$
|
60.5
|
|
|
$
|
83.8
|
|
|
$
|
36.2
|
|
DOLLARS IN MILLIONS
|
|
Fair Value Measurements
|
|
Fair Value
|
||||||||||||
Quoted Prices
in Active Markets
for Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
|||||||||||
Fixed Maturities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Government and Government Agencies and Authorities
|
|
$
|
124.9
|
|
|
$
|
195.7
|
|
|
$
|
—
|
|
|
$
|
320.6
|
|
States and Political Subdivisions
|
|
—
|
|
|
1,622.6
|
|
|
—
|
|
|
1,622.6
|
|
||||
Corporate Securities:
|
|
|
|
|
|
|
|
|
||||||||
Bonds and Notes
|
|
—
|
|
|
2,376.5
|
|
|
436.3
|
|
|
2,812.8
|
|
||||
Redeemable Preferred Stocks
|
|
—
|
|
|
—
|
|
|
3.8
|
|
|
3.8
|
|
||||
Collateralized Loan Obligations
|
|
—
|
|
|
—
|
|
|
87.3
|
|
|
87.3
|
|
||||
Other Mortgage- and Asset-backed
|
|
—
|
|
|
1.4
|
|
|
3.8
|
|
|
5.2
|
|
||||
Total Investments in Fixed Maturities
|
|
124.9
|
|
|
4,196.2
|
|
|
531.2
|
|
|
4,852.3
|
|
||||
Equity Securities:
|
|
|
|
|
|
|
|
|
||||||||
Preferred Stocks:
|
|
|
|
|
|
|
|
|
||||||||
Finance, Insurance and Real Estate
|
|
—
|
|
|
79.8
|
|
|
5.1
|
|
|
84.9
|
|
||||
Other Industries
|
|
—
|
|
|
6.2
|
|
|
12.8
|
|
|
19.0
|
|
||||
Common Stocks:
|
|
|
|
|
|
|
|
|
||||||||
Finance, Insurance and Real Estate
|
|
16.6
|
|
|
6.6
|
|
|
—
|
|
|
23.2
|
|
||||
Other Industries
|
|
0.6
|
|
|
0.8
|
|
|
12.1
|
|
|
13.5
|
|
||||
Other Equity Interests:
|
|
|
|
|
|
|
|
|
||||||||
Exchange Traded Funds
|
|
177.1
|
|
|
—
|
|
|
—
|
|
|
177.1
|
|
||||
Limited Liability Companies and Limited Partnerships
|
|
—
|
|
|
—
|
|
|
205.5
|
|
|
205.5
|
|
||||
Total Investments in Equity Securities
|
|
194.3
|
|
|
93.4
|
|
|
235.5
|
|
|
523.2
|
|
||||
Fair Value Option Investments:
|
|
|
|
|
|
|
|
|
||||||||
Limited Liability Companies and Limited Partnerships Hedge Funds
|
|
—
|
|
|
—
|
|
|
164.5
|
|
|
164.5
|
|
||||
Other Investments:
|
|
|
|
|
|
|
|
|
||||||||
Trading Securities
|
|
4.7
|
|
|
—
|
|
|
—
|
|
|
4.7
|
|
||||
Total
|
|
$
|
323.9
|
|
|
$
|
4,289.6
|
|
|
$
|
931.2
|
|
|
$
|
5,544.7
|
|
DOLLARS IN MILLIONS
|
|
Fair Value Measurements
|
|
Fair Value
|
||||||||||||
Quoted Prices
in Active Markets
for Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
|||||||||||
Fixed Maturities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Government and Government Agencies and Authorities
|
|
$
|
129.2
|
|
|
$
|
216.3
|
|
|
$
|
—
|
|
|
$
|
345.5
|
|
States and Political Subdivisions
|
|
—
|
|
|
1,477.1
|
|
|
—
|
|
|
1,477.1
|
|
||||
Corporate Securities:
|
|
|
|
|
|
|
|
|
||||||||
Bonds and Notes
|
|
—
|
|
|
2,517.9
|
|
|
360.6
|
|
|
2,878.5
|
|
||||
Redeemable Preferred Stocks
|
|
—
|
|
|
—
|
|
|
6.7
|
|
|
6.7
|
|
||||
Collateralized Loan Obligations
|
|
—
|
|
|
—
|
|
|
64.4
|
|
|
64.4
|
|
||||
Other Mortgage- and Asset-backed
|
|
—
|
|
|
1.5
|
|
|
3.9
|
|
|
5.4
|
|
||||
Total Investments in Fixed Maturities
|
|
129.2
|
|
|
4,212.8
|
|
|
435.6
|
|
|
4,777.6
|
|
||||
Equity Securities:
|
|
|
|
|
|
|
|
|
||||||||
Preferred Stocks:
|
|
|
|
|
|
|
|
|
||||||||
Finance, Insurance and Real Estate
|
|
—
|
|
|
84.7
|
|
|
5.0
|
|
|
89.7
|
|
||||
Other Industries
|
|
—
|
|
|
3.4
|
|
|
16.4
|
|
|
19.8
|
|
||||
Common Stocks:
|
|
|
|
|
|
|
|
|
||||||||
Manufacturing
|
|
50.9
|
|
|
5.7
|
|
|
0.6
|
|
|
57.2
|
|
||||
Finance, Insurance and Real Estate
|
|
34.8
|
|
|
0.1
|
|
|
5.6
|
|
|
40.5
|
|
||||
Other Industries
|
|
24.2
|
|
|
0.7
|
|
|
11.2
|
|
|
36.1
|
|
||||
Other Equity Interests:
|
|
|
|
|
|
|
|
|
||||||||
Exchange Traded Funds
|
|
202.7
|
|
|
—
|
|
|
—
|
|
|
202.7
|
|
||||
Limited Liability Companies and Limited Partnerships
|
|
—
|
|
|
—
|
|
|
186.2
|
|
|
186.2
|
|
||||
Total Investments in Equity Securities
|
|
312.6
|
|
|
94.6
|
|
|
225.0
|
|
|
632.2
|
|
||||
Fair Value Option Investments:
|
|
|
|
|
|
|
|
|
||||||||
Limited Liability Companies and Limited Partnerships Hedge Funds
|
|
—
|
|
|
—
|
|
|
53.3
|
|
|
53.3
|
|
||||
Other Investments:
|
|
|
|
|
|
|
|
|
||||||||
Trading Securities
|
|
4.9
|
|
|
—
|
|
|
—
|
|
|
4.9
|
|
||||
Total
|
|
$
|
446.7
|
|
|
$
|
4,307.4
|
|
|
$
|
713.9
|
|
|
$
|
5,468.0
|
|
DOLLARS IN MILLIONS
|
|
Unobservable Input
|
|
Total Fair Value
|
|
Range of Unobservable Inputs
|
|
Weighted Average Yield
|
|||||||
Investment-grade
|
|
Market Yield
|
|
$
|
98.7
|
|
|
2.6
|
%
|
-
|
6.9
|
%
|
|
4.4
|
%
|
Non-investment-grade:
|
|
|
|
|
|
|
|
|
|
|
|||||
Senior Debt
|
|
Market Yield
|
|
114.2
|
|
|
5.9
|
|
-
|
15.3
|
|
|
10.4
|
|
|
Junior Debt
|
|
Market Yield
|
|
216.3
|
|
|
8.2
|
|
-
|
26.2
|
|
|
13.6
|
|
|
Collateralized Loan Obligations
|
|
Market Yield
|
|
87.3
|
|
|
3.1
|
|
-
|
10.8
|
|
|
6.1
|
|
|
Other
|
|
Various
|
|
14.7
|
|
|
|
|
|
|
|
||||
Total Fixed Maturity Investments in Corporate Securities
|
|
|
|
$
|
531.2
|
|
|
|
|
|
|
|
DOLLARS IN MILLIONS
|
|
Unobservable Input
|
|
Total Fair Value
|
|
Range of Unobservable Inputs
|
|
Weighted Average Yield
|
|||||||
Investment-grade
|
|
Market Yield
|
|
$
|
107.0
|
|
|
2.8
|
%
|
-
|
6.9
|
%
|
|
3.9
|
%
|
Non-investment-grade:
|
|
|
|
|
|
|
|
|
|
|
|||||
Senior Debt
|
|
Market Yield
|
|
92.7
|
|
|
3.8
|
|
-
|
14.5
|
|
|
10.6
|
|
|
Junior Debt
|
|
Market Yield
|
|
149.9
|
|
|
8.2
|
|
-
|
21.0
|
|
|
13.4
|
|
|
Collateralized Loan Obligations
|
|
Market Yield
|
|
64.4
|
|
|
2.7
|
|
-
|
8.1
|
|
|
5.2
|
|
|
Other
|
|
Various
|
|
21.6
|
|
|
|
|
|
|
|
||||
Total Fixed Maturity Investments in Corporate Securities
|
|
|
|
$
|
435.6
|
|
|
|
|
|
|
|
DOLLARS IN MILLIONS
|
|
Fixed Maturities
|
|
Equity Securities
|
|
|
|
|
||||||||||||||||||||||||
|
Corporate
Bonds and Notes |
|
Redeemable
Preferred
Stocks
|
|
Collateralized Loan Obligations
|
|
Other Mortgage-
and Asset-
backed
|
|
Preferred
and Common Stocks |
|
Other
Equity
Interests
|
|
Fair Value Option
|
|
Total
|
|||||||||||||||||
Balance at Beginning of Year
|
|
$
|
360.6
|
|
|
$
|
6.7
|
|
|
$
|
64.4
|
|
|
$
|
3.9
|
|
|
$
|
38.8
|
|
|
$
|
186.2
|
|
|
$
|
53.3
|
|
|
$
|
713.9
|
|
Total Gains (Losses):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Included in Consolidated Statements of Income
|
|
(9.4
|
)
|
|
(1.6
|
)
|
|
0.6
|
|
|
—
|
|
|
(2.6
|
)
|
|
(5.1
|
)
|
|
0.2
|
|
|
(17.9
|
)
|
||||||||
Included in Other Comprehensive Income
|
|
(7.4
|
)
|
|
(0.7
|
)
|
|
(2.2
|
)
|
|
(0.1
|
)
|
|
1.4
|
|
|
0.3
|
|
|
—
|
|
|
(8.7
|
)
|
||||||||
Purchases
|
|
241.5
|
|
|
—
|
|
|
39.5
|
|
|
1.3
|
|
|
8.1
|
|
|
60.0
|
|
|
111.0
|
|
|
461.4
|
|
||||||||
Settlements
|
|
(65.5
|
)
|
|
(0.6
|
)
|
|
(7.5
|
)
|
|
(0.1
|
)
|
|
(0.7
|
)
|
|
(40.0
|
)
|
|
—
|
|
|
(114.4
|
)
|
||||||||
Sales
|
|
(73.6
|
)
|
|
—
|
|
|
(7.5
|
)
|
|
(1.2
|
)
|
|
(5.0
|
)
|
|
—
|
|
|
—
|
|
|
(87.3
|
)
|
||||||||
Transfers into Level 3
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.1
|
|
|
—
|
|
|
4.1
|
|
||||||||
Transfers out of Level 3
|
|
(10.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9.9
|
)
|
|
—
|
|
|
—
|
|
|
(19.9
|
)
|
||||||||
Balance at End of Year
|
|
$
|
436.2
|
|
|
$
|
3.8
|
|
|
$
|
87.3
|
|
|
$
|
3.8
|
|
|
$
|
30.1
|
|
|
$
|
205.5
|
|
|
$
|
164.5
|
|
|
$
|
931.2
|
|
DOLLARS IN MILLIONS
|
|
Fixed Maturities
|
|
Equity Securities
|
|
|
|
Total
|
||||||||||||||||||||||||
Corporate
Bonds
and
Notes
|
|
Redeemable
Preferred
Stocks
|
|
Collateralized Loan Obligations
|
|
Other Mortgage-
and Asset- backed |
|
Preferred
and
Common
Stocks
|
|
Other
Equity
Interests
|
|
Fair Value Option
|
|
|||||||||||||||||||
Balance at Beginning of Year
|
|
$
|
364.1
|
|
|
$
|
7.4
|
|
|
$
|
44.7
|
|
|
$
|
4.5
|
|
|
$
|
32.1
|
|
|
$
|
173.9
|
|
|
$
|
—
|
|
|
$
|
626.7
|
|
Total Gains (Losses):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Included in Consolidated Statement of Income
|
|
(3.4
|
)
|
|
—
|
|
|
0.2
|
|
|
0.1
|
|
|
1.1
|
|
|
2.7
|
|
|
(0.7
|
)
|
|
—
|
|
||||||||
Included in Other Comprehensive Income
|
|
5.1
|
|
|
(0.1
|
)
|
|
(1.0
|
)
|
|
0.1
|
|
|
0.5
|
|
|
2.2
|
|
|
—
|
|
|
6.8
|
|
||||||||
Purchases
|
|
201.4
|
|
|
—
|
|
|
26.1
|
|
|
—
|
|
|
8.9
|
|
|
53.0
|
|
|
58.0
|
|
|
347.4
|
|
||||||||
Settlements
|
|
(126.4
|
)
|
|
(0.6
|
)
|
|
—
|
|
|
(0.8
|
)
|
|
(4.5
|
)
|
|
(39.8
|
)
|
|
—
|
|
|
(172.1
|
)
|
||||||||
Sales
|
|
(79.0
|
)
|
|
—
|
|
|
(5.6
|
)
|
|
—
|
|
|
(2.2
|
)
|
|
(5.8
|
)
|
|
(4.0
|
)
|
|
(96.6
|
)
|
||||||||
Transfers into Level 3
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.6
|
|
|
—
|
|
|
—
|
|
|
3.6
|
|
||||||||
Transfers out of Level 3
|
|
(1.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
|
—
|
|
|
—
|
|
|
(1.9
|
)
|
||||||||
Balance at End of Year
|
|
$
|
360.6
|
|
|
$
|
6.7
|
|
|
$
|
64.4
|
|
|
$
|
3.9
|
|
|
$
|
38.8
|
|
|
$
|
186.2
|
|
|
$
|
53.3
|
|
|
$
|
713.9
|
|
•
|
In November 2012, certain of the Life Companies filed an action in Kentucky state court, asking the court to construe the Kentucky DMF Statute to apply only prospectively, i.e., only to life insurance policies issued in Kentucky on or after the effective date of the Kentucky DMF Statute, consistent with what the Life Companies believe are the requirements of applicable Kentucky statutory law, the Kentucky Constitution and the Contract Clause of the United States Constitution. In April 2013, the trial court held that the Kentucky DMF Statute does apply to life insurance policies issued before the statute’s January 1, 2013 effective date. The subject Life Companies appealed and in August 2014, in a unanimous opinion, the Kentucky Court of Appeals reversed the trial court and held that the Kentucky DMF statute fell within Kentucky’s statutory presumption against retroactive laws. Therefore, the Court ruled, the Kentucky DMF Statute can only apply to policies issued on or after January 1, 2013. The Kentucky Department of Insurance sought review of this ruling by the Supreme Court of Kentucky, which granted discretionary review in August 2015. In February 2016, the Department of Insurance requested that its appeal be dismissed and this request was granted, thus concluding the litigation. Consequently, the Kentucky DMF Statute is deemed to apply to policies issued on or after January 1, 2013.
|
•
|
In July 2013, certain of the Life Companies filed an action in state court in Maryland, asking the court to construe the Maryland DMF Statute to apply only prospectively, consistent with what the Life Companies believe are the requirements of Maryland’s common law presumption against retroactive application of new laws, the Maryland Constitution and the Contract Clause of the United States Constitution. The Maryland Insurance Administration (the “MIA”) filed a motion to dismiss, contending that the subject Life Companies were required to exhaust their administrative remedies before filing an action in court. In March 2014, the trial court granted the MIA’s motion and the Life Companies appealed that ruling. The Maryland appellate courts declined to stay enforcement of the Maryland DMF Statute pending the appeal and the Life Companies are complying with that statute while they pursue an appeal. The Life Companies’ appeal was denied by the Maryland Court of Special Appeals in October 2015 and the Life Companies have requested review by Maryland’s highest court, the Court of Appeals.
|
•
|
How many states eventually enact laws, interpret existing laws or take other action to require the use of a DMF or may exact such usage through regulation, examinations or audits;
|
•
|
The matching criteria to be used in comparing records of the Life Companies against a DMF;
|
•
|
The universe of policies affected;
|
•
|
Whether and to what extent any such laws would be applied retroactively; and
|
•
|
The results of unclaimed property audits, examinations and other actions by state insurance regulators and litigation, including challenges to the constitutionality of laws purporting to have retroactive application.
|
|
|
Three Months Ended (Unaudited)
|
|
Year Ended
|
||||||||||||||||
DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS
|
|
Mar 31,
2015 |
|
Jun 30,
2015 |
|
Sep 30,
2015 |
|
Dec 31,
2015 |
|
Dec 31,
2015 |
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earned Premiums
|
|
$
|
431.3
|
|
|
$
|
500.1
|
|
|
$
|
536.7
|
|
|
$
|
541.5
|
|
|
$
|
2,009.6
|
|
Net Investment Income
|
|
70.6
|
|
|
76.7
|
|
|
75.9
|
|
|
79.4
|
|
|
302.6
|
|
|||||
Other Income
|
|
0.9
|
|
|
0.6
|
|
|
0.8
|
|
|
1.4
|
|
|
3.7
|
|
|||||
Net Realized Gains on Sales of Investments
|
|
3.4
|
|
|
34.0
|
|
|
5.3
|
|
|
9.4
|
|
|
52.1
|
|
|||||
Other-than-temporary Impairment Losses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Other-than-temporary Impairment Losses
|
|
(7.0
|
)
|
|
(2.2
|
)
|
|
(3.3
|
)
|
|
(14.9
|
)
|
|
(27.4
|
)
|
|||||
Portion of Losses Recognized in Other Comprehensive Income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
0.2
|
|
|||||
Net Impairment Losses Recognized in Earnings
|
|
(7.0
|
)
|
|
(2.2
|
)
|
|
(3.3
|
)
|
|
(14.7
|
)
|
|
(27.2
|
)
|
|||||
Total Revenues
|
|
499.2
|
|
|
609.2
|
|
|
615.4
|
|
|
617.0
|
|
|
2,340.8
|
|
|||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Policyholders’ Benefits and Incurred Losses and Loss Adjustment Expenses
|
|
297.7
|
|
|
375.1
|
|
|
378.8
|
|
|
416.0
|
|
|
1,467.6
|
|
|||||
Insurance Expenses
|
|
144.9
|
|
|
162.1
|
|
|
161.1
|
|
|
177.0
|
|
|
645.1
|
|
|||||
Write-off of Long-lived Asset
|
|
—
|
|
|
11.1
|
|
|
—
|
|
|
—
|
|
|
11.1
|
|
|||||
Loss from Early Extinguishment of Debt
|
|
9.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.1
|
|
|||||
Interest and Other Expenses
|
|
29.7
|
|
|
26.6
|
|
|
25.7
|
|
|
25.6
|
|
|
107.6
|
|
|||||
Total Expenses
|
|
481.4
|
|
|
574.9
|
|
|
565.6
|
|
|
618.6
|
|
|
2,240.5
|
|
|||||
Income (Loss) from Continuing Operations before Income Taxes
|
|
17.8
|
|
|
34.3
|
|
|
49.8
|
|
|
(1.6
|
)
|
|
100.3
|
|
|||||
Income Tax Benefit (Expense)
|
|
(4.3
|
)
|
|
(6.9
|
)
|
|
(11.8
|
)
|
|
2.9
|
|
|
(20.1
|
)
|
|||||
Income from Continuing Operations
|
|
13.5
|
|
|
27.4
|
|
|
38.0
|
|
|
1.3
|
|
|
80.2
|
|
|||||
Income (Loss) from Discontinued Operations
|
|
—
|
|
|
2.3
|
|
|
(0.1
|
)
|
|
3.3
|
|
|
5.5
|
|
|||||
Net Income
|
|
$
|
13.5
|
|
|
$
|
29.7
|
|
|
$
|
37.9
|
|
|
$
|
4.6
|
|
|
$
|
85.7
|
|
Income from Continuing Operations Per Unrestricted Share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
0.26
|
|
|
$
|
0.53
|
|
|
$
|
0.73
|
|
|
$
|
0.03
|
|
|
$
|
1.55
|
|
Diluted
|
|
$
|
0.26
|
|
|
$
|
0.53
|
|
|
$
|
0.73
|
|
|
$
|
0.03
|
|
|
$
|
1.55
|
|
Net Income Per Unrestricted Share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
0.26
|
|
|
$
|
0.57
|
|
|
$
|
0.73
|
|
|
$
|
0.09
|
|
|
$
|
1.65
|
|
Diluted
|
|
$
|
0.26
|
|
|
$
|
0.57
|
|
|
$
|
0.73
|
|
|
$
|
0.09
|
|
|
$
|
1.65
|
|
Dividends Paid to Shareholders Per Share
|
|
$
|
0.24
|
|
|
$
|
0.24
|
|
|
$
|
0.24
|
|
|
$
|
0.24
|
|
|
$
|
0.96
|
|
|
|
Three Months Ended (Unaudited)
|
|
Year Ended
|
||||||||||||||||
DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS
|
|
Mar 31,
2014 |
|
Jun 30,
2014 |
|
Sep 30,
2014 |
|
Dec 31,
2014 |
|
Dec 31,
2014 |
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earned Premiums
|
|
$
|
477.6
|
|
|
$
|
470.3
|
|
|
$
|
462.8
|
|
|
$
|
451.5
|
|
|
$
|
1,862.2
|
|
Net Investment Income
|
|
71.1
|
|
|
72.6
|
|
|
72.3
|
|
|
93.1
|
|
|
309.1
|
|
|||||
Other Income
|
|
0.1
|
|
|
0.2
|
|
|
0.5
|
|
|
0.6
|
|
|
1.4
|
|
|||||
Net Realized Gains on Sales of Investments
|
|
6.6
|
|
|
3.5
|
|
|
8.0
|
|
|
21.0
|
|
|
39.1
|
|
|||||
Other-than-temporary Impairment Losses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Other-than-temporary Impairment Losses
|
|
(0.8
|
)
|
|
(4.1
|
)
|
|
(3.8
|
)
|
|
(6.5
|
)
|
|
(15.2
|
)
|
|||||
Portion of Losses Recognized in Other Comprehensive Income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net Impairment Losses Recognized in Earnings
|
|
(0.8
|
)
|
|
(4.1
|
)
|
|
(3.8
|
)
|
|
(6.5
|
)
|
|
(15.2
|
)
|
|||||
Total Revenues
|
|
554.6
|
|
|
542.5
|
|
|
539.8
|
|
|
559.7
|
|
|
2,196.6
|
|
|||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Policyholders’ Benefits and Incurred Losses and Loss Adjustment Expenses
|
|
327.9
|
|
|
347.5
|
|
|
300.5
|
|
|
285.8
|
|
|
1,261.7
|
|
|||||
Insurance Expenses
|
|
152.1
|
|
|
161.3
|
|
|
158.6
|
|
|
156.4
|
|
|
628.4
|
|
|||||
Write-off Long-lived Asset
|
|
—
|
|
|
—
|
|
|
54.6
|
|
|
—
|
|
|
54.6
|
|
|||||
Interest and Other Expenses
|
|
22.7
|
|
|
22.5
|
|
|
22.1
|
|
|
24.4
|
|
|
91.7
|
|
|||||
Total Expenses
|
|
502.7
|
|
|
531.3
|
|
|
535.8
|
|
|
466.6
|
|
|
2,036.4
|
|
|||||
Income from Continuing Operations before Income Taxes
|
|
51.9
|
|
|
11.2
|
|
|
4.0
|
|
|
93.1
|
|
|
160.2
|
|
|||||
Income Tax Benefit (Expense)
|
|
(16.7
|
)
|
|
(1.9
|
)
|
|
0.8
|
|
|
(29.8
|
)
|
|
(47.6
|
)
|
|||||
Income from Continuing Operations
|
|
35.2
|
|
|
9.3
|
|
|
4.8
|
|
|
63.3
|
|
|
112.6
|
|
|||||
Income (Loss) from Discontinued Operations
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
2.1
|
|
|
1.9
|
|
|||||
Net Income
|
|
$
|
35.1
|
|
|
$
|
9.3
|
|
|
$
|
4.7
|
|
|
$
|
65.4
|
|
|
$
|
114.5
|
|
Income from Continuing Operations Per Unrestricted Share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
0.63
|
|
|
$
|
0.17
|
|
|
$
|
0.09
|
|
|
$
|
1.20
|
|
|
$
|
2.08
|
|
Diluted
|
|
$
|
0.63
|
|
|
$
|
0.17
|
|
|
$
|
0.09
|
|
|
$
|
1.20
|
|
|
$
|
2.08
|
|
Net Income Per Unrestricted Share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
0.63
|
|
|
$
|
0.17
|
|
|
$
|
0.09
|
|
|
$
|
1.24
|
|
|
$
|
2.12
|
|
Diluted
|
|
$
|
0.63
|
|
|
$
|
0.17
|
|
|
$
|
0.09
|
|
|
$
|
1.24
|
|
|
$
|
2.12
|
|
Dividends Paid to Shareholders Per Share
|
|
$
|
0.24
|
|
|
$
|
0.24
|
|
|
$
|
0.24
|
|
|
$
|
0.24
|
|
|
$
|
0.96
|
|
•
|
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
|
•
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
|
•
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.
|
|
|
|
||
/S/ JOSEPH P. LACHER, JR.
|
|
|
|
/S/ FRANK J. SODARO
|
Joseph P. Lacher, Jr.
|
|
|
|
Frank J. Sodaro
|
President and Chief Executive Officer
|
|
|
|
Senior Vice President and Chief Financial Officer
|
Kemper Corporation
|
|
|
|
Kemper Corporation
|
Plan Category
|
|
Number of Securities
to be Issued Upon
Exercise of
Outstanding Options,
Warrants and Rights
|
|
Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights
|
|
Number of Securities
Remaining Available
for Future Issuance
Under Equity
Compensation Plans
or Programs (1)
|
||||
Equity Compensation Plans Approved by Security Holders
|
|
1,428,157
|
|
|
$
|
39.75
|
|
|
7,636,921
|
|
Equity Compensation Plans Not Approved by Security Holders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
1,428,157
|
|
|
$
|
39.75
|
|
|
7,636,921
|
|
1.
|
Financial Statements. The consolidated balance sheets of Kemper and subsidiaries as of
December 31, 2015
and
2014
, and the consolidated statements of income, comprehensive income, cash flows and shareholders’ equity for the years ended
December 31, 2015
,
2014
and
2013
, together with the notes thereto and the report of Deloitte & Touche LLP thereon appearing in Item 8 are included in this
2015
Annual Report.
|
2.
|
Financial Statement Schedules. The following four financial statement schedules are included on the pages immediately following the signature pages hereof. Schedules not listed here have been omitted because they are not applicable or not material or the required information is included in the Consolidated Financial Statements.
|
3.
|
Exhibits. An Exhibit Index has been filed as part of this report on pages E-1 through E-4.
|
(b)
|
Exhibits. Included in Item 15(a)3 above
|
(c)
|
Financial Statement Schedules. Included in Item 15(a)2 above
|
|
|
|
KEMPER CORPORATION
(Registrant)
|
||
|
|
|
By:
|
|
/S/ JOSEPH P. LACHER, JR.
|
|
|
Joseph P. Lacher, Jr.
|
|
|
President, Chief Executive Officer and Director
|
|
|
|
Signature
|
|
Title
|
/S/ ROBERT J. JOYCE
|
|
Chairman of the Board and Director
|
Robert J. Joyce
|
|
|
|
|
|
/S/ JOSEPH P. LACHER, JR.
|
|
President, Chief Executive Officer and Director (principal executive officer)
|
Joseph P. Lacher, Jr.
|
|
|
|
|
|
/S/ FRANK J. SODARO
|
|
Senior Vice President and Chief Financial Officer (principal financial officer)
|
Frank J. Sodaro
|
|
|
|
|
|
/S/ RICHARD ROESKE
|
|
Vice President and Chief Accounting Officer (principal accounting officer)
|
Richard Roeske
|
|
|
|
|
|
/S/ GEORGE N. COCHRAN
|
|
Director
|
George N. Cochran
|
|
|
|
|
|
/S/ KATHLEEN M. CRONIN
|
|
Director
|
Kathleen M. Cronin
|
|
|
|
|
|
/S/ DOUGLAS G. GEOGA
|
|
Director
|
Douglas G. Geoga
|
|
|
|
|
|
/S/ CHRISTOPHER B. SAROFIM
|
|
Director
|
Christopher B. Sarofim
|
|
|
|
|
|
/S/ DAVID P. STORCH
|
|
Director
|
David P. Storch
|
|
|
|
|
|
|
|
Amortized
Cost
|
|
Fair Value
|
|
Amount
Carried in
Balance Sheet
|
||||||
Fixed Maturities:
|
|
|
|
|
|
|
||||||
Bonds and Notes:
|
|
|
|
|
|
|
||||||
United States Government and Government Agencies and Authorities
|
|
$
|
298.0
|
|
|
$
|
320.6
|
|
|
$
|
320.6
|
|
States and Political Subdivisions
|
|
1,513.7
|
|
|
1,622.6
|
|
|
1,622.6
|
|
|||
Corporate Securities:
|
|
|
|
|
|
|
||||||
Other Bonds and Notes
|
|
2,651.5
|
|
|
2,812.8
|
|
|
2,812.8
|
|
|||
Redeemable Preferred Stocks
|
|
3.7
|
|
|
3.8
|
|
|
3.8
|
|
|||
Collateralized Loan Obligations
|
|
90.0
|
|
|
87.3
|
|
|
87.3
|
|
|||
Other Mortgage- and Asset-backed
|
|
3.8
|
|
|
5.2
|
|
|
5.2
|
|
|||
Total Investments in Fixed Maturities
|
|
4,560.7
|
|
|
4,852.3
|
|
|
4,852.3
|
|
|||
Equity Securities:
|
|
|
|
|
|
|
||||||
Preferred Stocks
|
|
97.9
|
|
|
103.9
|
|
|
103.9
|
|
|||
Common Stocks
|
|
28.3
|
|
|
36.7
|
|
|
36.7
|
|
|||
Other Equity Interests
|
|
360.7
|
|
|
382.6
|
|
|
382.6
|
|
|||
Total Investments in Equity Securities
|
|
486.9
|
|
|
523.2
|
|
|
523.2
|
|
|||
Fair Value Option Investments
|
|
164.5
|
|
|
164.5
|
|
|
164.5
|
|
|||
Equity Method Limited Liability Investments at Cost Plus Cumulative Undistributed Earnings
|
|
190.6
|
|
|
XXX.X
|
|
|
190.6
|
|
|||
Loans, Real Estate and Other Investments
|
|
443.2
|
|
|
XXX.X
|
|
|
443.2
|
|
|||
Short-term Investments
|
|
255.7
|
|
|
XXX.X
|
|
|
255.7
|
|
|||
Total Investments
|
|
$
|
6,101.6
|
|
|
|
|
$
|
6,429.5
|
|
|
|
December 31,
|
||||||
|
|
2015
|
|
2014
|
||||
ASSETS
|
|
|
|
|
||||
Investments in Subsidiaries
|
|
$
|
2,586.6
|
|
|
$
|
2,677.5
|
|
Fixed Maturities at Fair Value (Amortized Cost: 2015 – $15.1; 2014 – $12.2)
|
|
15.1
|
|
|
12.2
|
|
||
Equity Securities at Fair Value (Cost: 2015 – $11.1; 2014 – $21.9)
|
|
10.9
|
|
|
21.8
|
|
||
Fair Value Option Investments
|
|
164.5
|
|
|
53.3
|
|
||
Short-term Investments
|
|
134.8
|
|
|
225.1
|
|
||
Cash
|
|
15.9
|
|
|
17.9
|
|
||
Other Receivables
|
|
5.7
|
|
|
6.9
|
|
||
Current and Deferred Income Taxes
|
|
—
|
|
|
4.7
|
|
||
Other Assets
|
|
6.1
|
|
|
5.6
|
|
||
Total Assets
|
|
$
|
2,939.6
|
|
|
$
|
3,025.0
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
||||
Senior Notes Payable, 6.00% due 2017 (Fair Value: 2015 – $374.0; 2014 – $390.2)
|
|
$
|
359.1
|
|
|
$
|
358.5
|
|
Senior Notes Payable, 6.00% due 2015 (Fair Value: 2014 – $260.2)
|
|
—
|
|
|
249.5
|
|
||
Senior Notes Payable, 4.35% due 2025 (Fair Value: 2015 – $248.3)
|
|
247.4
|
|
|
—
|
|
||
Subordinated Debentures due 2054 (Fair Value: 2015 – $159.0; 2014 – $154.0)
|
|
144.1
|
|
|
144.1
|
|
||
Liabilities for Income Taxes
|
|
33.3
|
|
|
14.5
|
|
||
Liabilities for Benefit Plans
|
|
154.8
|
|
|
160.2
|
|
||
Accrued Expenses and Other Liabilities
|
|
8.5
|
|
|
7.5
|
|
||
Total Liabilities
|
|
947.2
|
|
|
934.3
|
|
||
Shareholders’ Equity:
|
|
|
|
|
||||
Common Stock
|
|
5.1
|
|
|
5.2
|
|
||
Additional Paid-in Capital
|
|
654.0
|
|
|
660.1
|
|
||
Retained Earnings
|
|
1,209.0
|
|
|
1,202.7
|
|
||
Accumulated Other Comprehensive Income
|
|
124.3
|
|
|
222.7
|
|
||
Total Shareholders’ Equity
|
|
1,992.4
|
|
|
2,090.7
|
|
||
Total Liabilities and Shareholders’ Equity
|
|
$
|
2,939.6
|
|
|
$
|
3,025.0
|
|
|
|
For The Years Ended December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Net Investment Income
|
|
$
|
1.7
|
|
|
$
|
0.9
|
|
|
$
|
0.2
|
|
Net Realized Gains (Losses) on Sales of Investments
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|
0.6
|
|
|||
Net Impairment Losses Recognized in Earnings
|
|
(1.6
|
)
|
|
(1.7
|
)
|
|
—
|
|
|||
Total Revenues
|
|
—
|
|
|
(1.0
|
)
|
|
0.8
|
|
|||
Interest Expense
|
|
47.3
|
|
|
47.9
|
|
|
39.0
|
|
|||
Loss from Early Extinguishment of Debt
|
|
9.1
|
|
|
—
|
|
|
—
|
|
|||
Other Operating Expenses
|
|
17.6
|
|
|
2.7
|
|
|
21.6
|
|
|||
Total Operating Expenses
|
|
74.0
|
|
|
50.6
|
|
|
60.6
|
|
|||
Loss before Income Taxes and Equity in Net Income of Subsidiaries
|
|
(74.0
|
)
|
|
(51.6
|
)
|
|
(59.8
|
)
|
|||
Income Tax Benefit
|
|
26.5
|
|
|
18.9
|
|
|
20.8
|
|
|||
Loss before Equity in Net Income of Subsidiaries
|
|
(47.5
|
)
|
|
(32.7
|
)
|
|
(39.0
|
)
|
|||
Equity in Net Income of Subsidiaries
|
|
133.2
|
|
|
147.2
|
|
|
256.7
|
|
|||
Net Income
|
|
$
|
85.7
|
|
|
$
|
114.5
|
|
|
$
|
217.7
|
|
|
|
For The Years Ended December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Net Income
|
|
$
|
85.7
|
|
|
$
|
114.5
|
|
|
$
|
217.7
|
|
Other Comprehensive Income (Loss):
|
|
|
|
|
|
|
||||||
Unrealized Holding Gains (Losses) Arising During the Year:
|
|
|
|
|
|
|
||||||
Securities Held by Subsidiaries
|
|
(150.4
|
)
|
|
261.7
|
|
|
(324.9
|
)
|
|||
Securities Held by Parent
|
|
(1.5
|
)
|
|
(2.0
|
)
|
|
—
|
|
|||
Reclassification Adjustment for Amounts Included in Net Income:
|
|
|
|
|
|
|
||||||
Securities Held by Subsidiaries
|
|
(26.9
|
)
|
|
(26.8
|
)
|
|
(37.9
|
)
|
|||
Securities Held by Parent
|
|
1.5
|
|
|
1.7
|
|
|
—
|
|
|||
Unrealized Holding Gains (Losses)
|
|
(177.3
|
)
|
|
234.6
|
|
|
(362.8
|
)
|
|||
Unrecognized Postretirement Benefit Costs Arising During the Year
|
|
3.0
|
|
|
(106.4
|
)
|
|
61.6
|
|
|||
Amortization of Unrecognized Postretirement Benefit Costs
|
|
23.1
|
|
|
7.9
|
|
|
25.0
|
|
|||
Net Unrecognized Postretirement Benefit Costs
|
|
26.1
|
|
|
(98.5
|
)
|
|
86.6
|
|
|||
Foreign Currency Translation Adjustments
|
|
(1.4
|
)
|
|
(1.0
|
)
|
|
0.2
|
|
|||
Reclassification Adjustment for Amounts Included in Net Income
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Foreign Currency Translation Adjustments
|
|
(1.4
|
)
|
|
(1.0
|
)
|
|
0.2
|
|
|||
Other Comprehensive Income (Loss) before Income Taxes
|
|
(152.6
|
)
|
|
135.1
|
|
|
(276.0
|
)
|
|||
Income Tax Benefit (Expense):
|
|
|
|
|
|
|
||||||
Unrealized Holding Gains and Losses Arising During the Year:
|
|
|
|
|
|
|
||||||
Securities Held by Subsidiaries
|
|
53.4
|
|
|
(92.3
|
)
|
|
115.9
|
|
|||
Securities Held by Parent
|
|
0.5
|
|
|
0.7
|
|
|
—
|
|
|||
Reclassification Adjustment for Amounts Included in Net Income:
|
|
|
|
|
|
|
||||||
Securities Held by Subsidiaries
|
|
9.4
|
|
|
9.4
|
|
|
13.2
|
|
|||
Securities Held by Parent
|
|
(0.5
|
)
|
|
(0.6
|
)
|
|
—
|
|
|||
Unrealized Holding Gains and Losses
|
|
62.8
|
|
|
(82.8
|
)
|
|
129.1
|
|
|||
Unrecognized Postretirement Benefit Costs Arising During the Year
|
|
(1.1
|
)
|
|
37.5
|
|
|
(21.6
|
)
|
|||
Amortization of Unrecognized Postretirement Benefit Costs
|
|
(8.0
|
)
|
|
(2.8
|
)
|
|
(8.8
|
)
|
|||
Net Unrecognized Postretirement Benefit Costs
|
|
(9.1
|
)
|
|
34.7
|
|
|
(30.4
|
)
|
|||
Foreign Currency Translation Adjustments
|
|
0.5
|
|
|
0.4
|
|
|
(0.1
|
)
|
|||
Reclassification Adjustment for Amounts Included in Net Income
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Foreign Currency Translation Adjustments
|
|
0.5
|
|
|
0.4
|
|
|
(0.1
|
)
|
|||
Income Tax Benefit (Expense)
|
|
54.2
|
|
|
(47.7
|
)
|
|
98.6
|
|
|||
Other Comprehensive Income (Loss)
|
|
(98.4
|
)
|
|
87.4
|
|
|
(177.4
|
)
|
|||
Total Comprehensive Income (Loss)
|
|
$
|
(12.7
|
)
|
|
$
|
201.9
|
|
|
$
|
40.3
|
|
|
|
For The Years Ended December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Operating Activities:
|
|
|
|
|
|
|
||||||
Net Income
|
|
$
|
85.7
|
|
|
$
|
114.5
|
|
|
$
|
217.7
|
|
Adjustment Required to Reconcile Net Income to Net Cash Provided by Operations:
|
|
|
|
|
|
|
||||||
Equity in Net Income of Subsidiaries
|
|
(133.2
|
)
|
|
(147.2
|
)
|
|
(256.7
|
)
|
|||
Cash Dividends from Subsidiaries
|
|
285.0
|
|
|
159.1
|
|
|
95.0
|
|
|||
Cash Contribution to Defined Benefit Plan
|
|
—
|
|
|
—
|
|
|
(55.0
|
)
|
|||
Net Realized (Gains) Losses on Sales of Investments
|
|
0.1
|
|
|
0.2
|
|
|
(0.6
|
)
|
|||
Net Impairment Losses Recognized in Earnings
|
|
1.6
|
|
|
1.7
|
|
|
—
|
|
|||
Loss from Early Extinguishment of Debt
|
|
9.1
|
|
|
—
|
|
|
—
|
|
|||
Other, Net
|
|
41.6
|
|
|
10.5
|
|
|
67.3
|
|
|||
Net Cash Provided by Operating Activities
|
|
289.9
|
|
|
138.8
|
|
|
67.7
|
|
|||
Investing Activities:
|
|
|
|
|
|
|
||||||
Capital Contributed to Subsidiary
|
|
(105.0
|
)
|
|
—
|
|
|
—
|
|
|||
Capital Distribution from Subsidiary
|
|
—
|
|
|
1.1
|
|
|
50.5
|
|
|||
Sales, Paydowns and Maturities of Fixed Maturities
|
|
11.8
|
|
|
11.5
|
|
|
—
|
|
|||
Purchases of Fixed Maturities
|
|
(14.8
|
)
|
|
—
|
|
|
—
|
|
|||
Sales of Equity Securities
|
|
9.4
|
|
|
15.1
|
|
|
—
|
|
|||
Sales of Fair Value Option Investments
|
|
—
|
|
|
6.9
|
|
|
—
|
|
|||
Purchases of Fair Value Option Investments
|
|
(111.0
|
)
|
|
(60.9
|
)
|
|
—
|
|
|||
Acquisition of Business
|
|
(71.0
|
)
|
|
—
|
|
|
—
|
|
|||
Change in Short-term Investments
|
|
90.3
|
|
|
(94.3
|
)
|
|
52.7
|
|
|||
Net Cash Provided (Used) by Investing Activities
|
|
(190.3
|
)
|
|
(120.6
|
)
|
|
103.2
|
|
|||
Financing Activities:
|
|
|
|
|
|
|
||||||
Net Proceeds from Issuance of Debt
|
|
247.3
|
|
|
144.0
|
|
|
—
|
|
|||
Repayments of Debt
|
|
(258.8
|
)
|
|
—
|
|
|
—
|
|
|||
Cash Dividends Paid
|
|
(49.7
|
)
|
|
(51.8
|
)
|
|
(54.9
|
)
|
|||
Common Stock Repurchases
|
|
(45.0
|
)
|
|
(114.0
|
)
|
|
(100.4
|
)
|
|||
Cash Exercise of Stock Options
|
|
3.9
|
|
|
0.5
|
|
|
1.7
|
|
|||
Excess Tax Benefits on Share Based Awards
|
|
0.7
|
|
|
0.2
|
|
|
1.3
|
|
|||
Net Cash Used by Financing Activities
|
|
(101.6
|
)
|
|
(21.1
|
)
|
|
(152.3
|
)
|
|||
Increase (Decrease) in Cash
|
|
(2.0
|
)
|
|
(2.9
|
)
|
|
18.6
|
|
|||
Cash, Beginning of Year
|
|
17.9
|
|
|
20.8
|
|
|
2.2
|
|
|||
Cash, End of Year
|
|
$
|
15.9
|
|
|
$
|
17.9
|
|
|
$
|
20.8
|
|
|
|
Year Ended December 31,
|
|
At December 31
|
||||||||||||||||||||||||||||||||||||
Earned Premiums
|
|
Premiums
Written
|
|
Other
Income
|
|
Net
Investment
Income
|
|
Insurance
Claims
and
Policy-
holders’
Benefits
|
|
Amortization
Of Deferred
Policy
Acquisition
Costs
|
|
Other
Insurance
Expenses
|
|
Deferred
Policy
Acquisition
Costs
|
|
Insurance
Reserves
|
|
Unearned
Premiums
|
||||||||||||||||||||||
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Property & Casualty Insurance
|
|
$
|
1,415.2
|
|
|
$
|
1,406.2
|
|
|
$
|
0.6
|
|
|
$
|
73.3
|
|
|
$
|
1,086.2
|
|
|
$
|
213.1
|
|
|
$
|
155.0
|
|
|
$
|
80.7
|
|
|
$
|
800.5
|
|
|
$
|
586.1
|
|
Life & Health Insurance (1)
|
|
594.4
|
|
|
N/A
|
|
|
2.4
|
|
|
214.2
|
|
|
381.3
|
|
|
44.3
|
|
|
275.7
|
|
|
235.7
|
|
|
3,346.2
|
|
|
27.0
|
|
||||||||||
Other
|
|
—
|
|
|
N/A
|
|
|
0.7
|
|
|
15.1
|
|
|
—
|
|
|
—
|
|
|
(42.9
|
)
|
|
—
|
|
|
57.1
|
|
|
—
|
|
||||||||||
Total
|
|
$
|
2,009.6
|
|
|
N/A
|
|
|
$
|
3.7
|
|
|
$
|
302.6
|
|
|
$
|
1,467.5
|
|
|
$
|
257.4
|
|
|
$
|
387.8
|
|
|
$
|
316.4
|
|
|
$
|
4,203.8
|
|
|
$
|
613.1
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Property & Casualty Insurance
|
|
$
|
1,249.5
|
|
|
$
|
1,189.1
|
|
|
$
|
0.5
|
|
|
$
|
72.7
|
|
|
$
|
887.3
|
|
|
$
|
187.5
|
|
|
$
|
166.2
|
|
|
$
|
78.2
|
|
|
$
|
651.1
|
|
|
$
|
509.7
|
|
Life & Health Insurance (1)
|
|
612.7
|
|
|
N/A
|
|
|
0.9
|
|
|
218.7
|
|
|
374.4
|
|
|
47.9
|
|
|
268.1
|
|
|
225.1
|
|
|
3,278.2
|
|
|
27.2
|
|
||||||||||
Other
|
|
—
|
|
|
N/A
|
|
|
—
|
|
|
17.7
|
|
|
—
|
|
|
—
|
|
|
(41.3
|
)
|
|
—
|
|
|
78.3
|
|
|
—
|
|
||||||||||
Total
|
|
$
|
1,862.2
|
|
|
N/A
|
|
|
$
|
1.4
|
|
|
$
|
309.1
|
|
|
$
|
1,261.7
|
|
|
$
|
235.4
|
|
|
$
|
393.0
|
|
|
$
|
303.3
|
|
|
$
|
4,007.6
|
|
|
$
|
536.9
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Property & Casualty Insurance
|
|
$
|
1,392.9
|
|
|
$
|
1,342.2
|
|
|
$
|
0.5
|
|
|
$
|
90.9
|
|
|
$
|
969.3
|
|
|
$
|
207.2
|
|
|
$
|
168.2
|
|
|
|
|
|
|
|
||||||
Life & Health Insurance (1)
|
|
632.9
|
|
|
N/A
|
|
|
0.2
|
|
|
209.9
|
|
|
387.9
|
|
|
46.7
|
|
|
271.5
|
|
|
|
|
|
|
|
|||||||||||||
Other
|
|
—
|
|
|
N/A
|
|
|
0.1
|
|
|
13.9
|
|
|
—
|
|
|
—
|
|
|
(39.2
|
)
|
|
|
|
|
|
|
|||||||||||||
Total
|
|
$
|
2,025.8
|
|
|
N/A
|
|
|
$
|
0.8
|
|
|
$
|
314.7
|
|
|
$
|
1,357.2
|
|
|
$
|
253.9
|
|
|
$
|
400.5
|
|
|
|
|
|
|
|
(1)
|
The Company’s Life & Health Insurance employee-agents also market certain property and casualty insurance products under common management. Accordingly, the Company includes the results of these property and casualty insurance products in its Life & Health Insurance segment.
|
|
|
Gross
Amount
|
|
Ceded to
Other
Companies
|
|
Assumed
from Other
Companies
|
|
Net
Amount
|
|
Percentage
of Amount
Assumed to
Net
|
|||||||||
Year Ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Life Insurance in Force
|
|
$
|
20,209.8
|
|
|
$
|
514.2
|
|
|
$
|
205.7
|
|
|
$
|
19,901.3
|
|
|
1.0
|
%
|
Premiums:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Life Insurance
|
|
$
|
374.1
|
|
|
$
|
1.4
|
|
|
$
|
1.4
|
|
|
$
|
374.1
|
|
|
0.4
|
%
|
Accident and Health Insurance
|
|
139.8
|
|
|
0.5
|
|
|
5.6
|
|
|
144.9
|
|
|
3.9
|
%
|
||||
Property and Liability Insurance
|
|
1,456.2
|
|
|
18.7
|
|
|
53.1
|
|
|
1,490.6
|
|
|
3.6
|
%
|
||||
Total Premiums
|
|
$
|
1,970.1
|
|
|
$
|
20.6
|
|
|
$
|
60.1
|
|
|
$
|
2,009.6
|
|
|
3.0
|
%
|
Year Ended December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Life Insurance in Force
|
|
$
|
20,565.9
|
|
|
$
|
541.5
|
|
|
$
|
217.8
|
|
|
$
|
20,242.2
|
|
|
1.1
|
%
|
Premiums:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Life Insurance
|
|
$
|
387.5
|
|
|
$
|
1.5
|
|
|
$
|
1.6
|
|
|
$
|
387.6
|
|
|
0.4
|
%
|
Accident and Health Insurance
|
|
146.3
|
|
|
0.5
|
|
|
2.8
|
|
|
148.6
|
|
|
1.9
|
%
|
||||
Property and Liability Insurance
|
|
1,297.3
|
|
|
24.0
|
|
|
52.7
|
|
|
1,326.0
|
|
|
4.0
|
%
|
||||
Total Premiums
|
|
$
|
1,831.1
|
|
|
$
|
26.0
|
|
|
$
|
57.1
|
|
|
$
|
1,862.2
|
|
|
3.1
|
%
|
Year Ended December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Life Insurance in Force
|
|
$
|
21,006.0
|
|
|
$
|
576.4
|
|
|
$
|
229.5
|
|
|
$
|
20,659.1
|
|
|
1.1
|
%
|
Premiums:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Life Insurance
|
|
$
|
392.4
|
|
|
$
|
1.5
|
|
|
$
|
1.8
|
|
|
$
|
392.7
|
|
|
0.5
|
%
|
Accident and Health Insurance
|
|
161.9
|
|
|
0.6
|
|
|
0.1
|
|
|
161.4
|
|
|
0.1
|
%
|
||||
Property and Liability Insurance
|
|
1,452.7
|
|
|
31.8
|
|
|
50.8
|
|
|
1,471.7
|
|
|
3.5
|
%
|
||||
Total Premiums
|
|
$
|
2,007.0
|
|
|
$
|
33.9
|
|
|
$
|
52.7
|
|
|
$
|
2,025.8
|
|
|
2.6
|
%
|
|
|
|
|
Incorporated by Reference
|
|
|
||||||
Exhibit Number
|
|
Exhibit Description
|
|
Form
|
|
File Number
|
|
Exhibit
|
|
Filing Date
|
|
Filed or Furnished Herewith
|
3.1
|
|
Restated Certificate of Incorporation
|
|
8-K
|
|
001-18298
|
|
3.2
|
|
August 8, 2014
|
|
|
3.2
|
|
Amended and Restated Bylaws of Kemper Corporation
|
|
8-K
|
|
001-18298
|
|
3.3
|
|
August 8, 2014
|
|
|
4.1
|
|
Indenture dated as of June 26, 2002, by and between Kemper and The Bank of New York Trust Company, N.A., as successor trustee to BNY Midwest Trust Company, as Trustee
|
|
8-K
|
|
001-18298
|
|
4.1
|
|
May 14, 2012
|
|
|
4.2
|
|
Officers’ Certificate, including form of Senior Note with respect to Kemper’s 6.00% Senior Notes due May 15, 2017
|
|
10-Q
|
|
001-18298
|
|
4.3
|
|
May 7, 2012
|
|
|
4.3
|
|
Indenture, dated as of February 27, 2014, by and between Kemper Corporation and The Bank of New York Mellon Trust Company, N.A., as Trustee
|
|
8-K
|
|
001-18298
|
|
4.1
|
|
February 27, 2014
|
|
|
4.4
|
|
First Supplemental Indenture dated as of February 27, 2014, to the Indenture dated as of February 27, 2014, by and between Kemper and The Bank of New York Mellon Trust Company, N.A., as Trustee (including the form of 7.375% Subordinated Debentures due 2054).
|
|
8-K
|
|
001-18298
|
|
4.2
|
|
February 27, 2014
|
|
|
4.5
|
|
Second Supplemental Indenture, dated as of February 24, 2015, to the Indenture, dated as of February 27, 2014, between Kemper Corporation and The Bank of New York Mellon Trust Company, N.A., as Trustee (including the form of 4.350% Senior Notes due 2025)
|
|
8-K
|
|
001-18298
|
|
4.2
|
|
February 24, 2015
|
|
|
4.6
|
|
Form of Certificate Representing Shares of Kemper Corporation Common Stock
|
|
|
|
|
|
|
|
|
|
X
|
10.1
|
|
Amended and Restated Credit Agreement, dated as of June 2, 2015, by and among Kemper, the lenders party thereto, JP Morgan Chase Bank, N.A., as administrative agent, swing line lender and issuing bank, and Wells Fargo Bank, National Association and Fifth Third Bank, as co-syndication agents
|
|
8-K
|
|
001-18298
|
|
10.1
|
|
June 8, 2015
|
|
|
10.2
|
|
Advances and Security Agreement and Addendum to Advances and Security Agreement, effective as of December 31, 2013, between Trinity Universal Insurance Company and the Federal Home Loan Bank of Dallas
|
|
10-K
|
|
001-18298
|
|
10.2
|
|
February 14, 2014
|
|
|
10.3
|
|
Advances, Collateral Pledge, and Security Agreement, dated as of March 18, 2014, between United Insurance Company of America and the Federal Home Loan Bank of Chicago
|
|
8-K
|
|
001-18298
|
|
10.1
|
|
March 21, 2014
|
|
|
10.4*
|
|
Kemper Pension Equalization Plan, as amended and restated effective August 25, 2011, as amended by Amendment No. 2 effective September 16, 2013
|
|
10-K
|
|
001-18298
|
|
10.3
|
|
February 14, 2014
|
|
|
10.5*
|
|
Kemper Defined Contribution Supplemental Retirement Plan, as amended and restated effective August 25, 2011
|
|
10-Q
|
|
001-18298
|
|
10.15
|
|
November 2, 2011
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||||
Exhibit Number
|
|
Exhibit Description
|
|
Form
|
|
File Number
|
|
Exhibit
|
|
Filing Date
|
|
Filed or Furnished Herewith
|
10.6*
|
|
Kemper Non-Qualified Deferred Compensation Plan, as amended and restated effective January 1, 2014, as further amended by Amendment No. 1, effective October 5, 2015
|
|
|
|
|
|
|
|
|
|
X
|
10.7*
|
|
Kemper Severance Plan, as amended and restated effective August 25, 2011
|
|
10-Q
|
|
001-18298
|
|
10.18
|
|
November 2, 2011
|
|
|
10.8*
|
|
Kemper 1995 Non-employee Director Stock Option Plan, as amended and restated effective February 3, 2009
|
|
10-K
|
|
001-18298
|
|
10.2
|
|
February 4, 2009
|
|
|
10.9*
|
|
Form of Stock Option Agreement under the Kemper 1995 Non-employee Director Stock Option Plan, as of February 1, 2006
|
|
10-Q
|
|
001-18298
|
|
10.6
|
|
May 4, 2011
|
|
|
10.10*
|
|
Form of Stock Option Agreement under the Kemper 1995 Non-employee Director Stock Option Plan, as of February 3, 2009
|
|
10-K
|
|
001-18298
|
|
10.7
|
|
February 4, 2009
|
|
|
10.11*
|
|
Kemper 1997 Stock Option Plan, as amended and restated effective February 1, 2006
|
|
10-Q
|
|
001-18298
|
|
10.2
|
|
May 4, 2011
|
|
|
10.12*
|
|
Form of Stock Option and SAR Agreement under the Kemper 1997 Stock Option Plan, as of February 1, 2006
|
|
10-Q
|
|
001-18298
|
|
10.8
|
|
May 4, 2011
|
|
|
10.13*
|
|
Kemper 2002 Stock Option Plan, as amended and restated effective February 3, 2009
|
|
10-K
|
|
001-18298
|
|
10.4
|
|
February 4, 2009
|
|
|
10.14*
|
|
Form of Stock Option and SAR Agreement under the Kemper 2002 Stock Option Plan, as of February 1, 2006
|
|
10-Q
|
|
001-18298
|
|
10.9
|
|
May 4, 2011
|
|
|
10.15*
|
|
Form of Stock Option Agreement (including stock appreciation rights) under the Kemper 2002 Stock Option Plan, as of February 1, 2011
|
|
10-K
|
|
001-18298
|
|
10.9
|
|
February 3, 2011
|
|
|
10.16*
|
|
Kemper 2011 Omnibus Equity Plan, as amended and restated effective October 30, 2013
|
|
10-Q
|
|
001-18298
|
|
10.1
|
|
October 31, 2013
|
|
|
10.17*
|
|
Form of Stock Option and SAR Agreement for Non-employee Directors under the Kemper 2011 Omnibus Equity Plan, as of August 25, 2011
|
|
10-K
|
|
001-18298
|
|
10.13
|
|
February 17, 2012
|
|
|
10.18*
|
|
Form of Time-Vested Restricted Stock Award Agreement under the Kemper 2011 Omnibus Equity Plan, as of February 4, 2013
|
|
10-K
|
|
001-18298
|
|
10.24
|
|
February 15, 2013
|
|
|
10.19*
|
|
Form of Performance-Based Restricted Stock Award Agreement under the Kemper 2011 Omnibus Equity Plan, as of February 4, 2013
|
|
10-K
|
|
001-18298
|
|
10.25
|
|
February 15, 2013
|
|
|
10.20*
|
|
Form of Stock Option and SAR Agreement for Non-employee Directors under the Kemper 2011 Omnibus Equity Plan, as of May 1, 2013
|
|
10-Q
|
|
001-18298
|
|
10.1
|
|
May 2, 2013
|
|
|
10.21*
|
|
Form of Deferred Stock Unit Agreement for Non-employee Directors under the Kemper 2011 Omnibus Equity Plan, as of May 1, 2013
|
|
10-Q
|
|
001-18298
|
|
10.2
|
|
May 2, 2013
|
|
|
10.22*
|
|
Form of Stock Option and SAR Agreement - Installment-Vesting form under the Kemper 2011 Omnibus Equity Plan, as of February 4, 2014
|
|
10-K
|
|
001-18298
|
|
10.24
|
|
February 14, 2014
|
|
|
10.23*
|
|
Form of Stock Option and SAR Agreement - Cliff-Vesting Form under the Kemper 2011 Omnibus Equity Plan, as of February 4, 2014
|
|
10-K
|
|
001-18298
|
|
10.25
|
|
February 14, 2014
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||||
Exhibit Number
|
|
Exhibit Description
|
|
Form
|
|
File Number
|
|
Exhibit
|
|
Filing Date
|
|
Filed or Furnished Herewith
|
10.24*
|
|
Form of Time-Vested Restricted Stock Unit Award Agreement - Installment-Vesting Form under the Kemper 2011 Omnibus Equity Plan, as of February 4, 2014
|
|
10-K
|
|
001-18298
|
|
10.26
|
|
February 14, 2014
|
|
|
10.25*
|
|
Form of Time-Vested Restricted Stock Unit Award Agreement - Cliff- Vesting Form under the Kemper 2011 Omnibus Equity Plan, as of February 4, 2014
|
|
10-K
|
|
001-18298
|
|
10.27
|
|
February 14, 2014
|
|
|
10.26*
|
|
Form of Performance-Based Restricted Stock Unit Award Agreement under the Kemper 2011 Omnibus Equity Plan, as of February 4, 2014
|
|
10-K
|
|
001-18298
|
|
10.28
|
|
February 14, 2014
|
|
|
10.27*
|
|
Kemper 2009 Performance Incentive Plan, as amended and restated effective October 29, 2013 (for awards through February 3, 2014)
|
|
10-Q
|
|
001-18298
|
|
10.2
|
|
October 31, 2013
|
|
|
10.28*
|
|
Form of Multi-Year Incentive Award Agreement under the Kemper 2009 Performance Incentive Plan, as of February 4, 2013
|
|
10-K
|
|
001-18298
|
|
10.21
|
|
February 15, 2013
|
|
|
10.29*
|
|
Kemper 2009 Performance Incentive Plan, as amended and restated effective February 4, 2014
|
|
10-K
|
|
001-18298
|
|
10.32
|
|
February 14, 2014
|
|
|
10.30*
|
|
Form of Annual Incentive Award Agreement under the Kemper 2009 Performance Incentive Plan, as of February 4, 2014
|
|
10-K
|
|
001-18298
|
|
10.33
|
|
February 14, 2014
|
|
|
10.31*
|
|
Form of Multi-Year Incentive Award Agreement under the Kemper 2009 Performance Incentive Plan, as of February 4, 2014
|
|
10-K
|
|
001-18298
|
|
10.34
|
|
February 14, 2014
|
|
|
10.32*
|
|
Kemper Executive Performance Plan, effective February 4, 2014
|
|
10-K
|
|
001-18298
|
|
10.35
|
|
February 14, 2014
|
|
|
10.33*
|
|
Kemper is a party to individual Indemnification and Expense Advancement Agreements with each of its directors, as amended and restated effective February 1, 2012
|
|
8-K
|
|
001-18298
|
|
10.25
|
|
February 6, 2012
|
|
|
10.34*
|
|
Kemper is a party to individual severance agreements with the following employees:
|
|
10-Q
|
|
001-18298
|
|
10.17
|
|
November 2, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joseph P. Lacher, Jr. (President and Chief Executive Officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
Donald G. Southwell (Former Chairman, President and Chief Executive Officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
John M. Boschelli (Senior Vice President and Chief Investment Officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
C. Thomas Evans, Jr. (Vice President, Secretary & General Counsel)
|
|
|
|
|
|
|
|
|
|
|
|
|
Diana J. Hickert-Hill (Vice President, Investor Relations and Corporate Identity)
|
|
|
|
|
|
|
|
|
|
|
|
|
Shekar G. Jannah (Vice President, Chief Risk Officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
Lisa M. King (Vice President, Human Resources)
|
|
|
|
|
|
|
|
|
|
|
|
|
Christopher L. Moses (Vice President and Treasurer)
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard Roeske (Vice President and Chief Accounting Officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||||
Exhibit Number
|
|
Exhibit Description
|
|
Form
|
|
File Number
|
|
Exhibit
|
|
Filing Date
|
|
Filed or Furnished Herewith
|
|
|
Dennis J. Sandelski (Vice President, Tax and Corporate Development)
|
|
|
|
|
|
|
|
|
|
|
|
|
Frank J. Sodaro (Senior Vice President and Chief Financial Officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
Each of the foregoing agreements is identical except that the severance compensation multiple is 3.0 for Messrs. Lacher and Southwell and 2.0 for the other officers.
|
|
|
|
|
|
|
|
|
|
|
10.35*
|
|
Joseph P. Lacher, Jr. Offer Letter dated November 19, 2015
|
|
8-K
|
|
001-18298
|
|
10.1
|
|
November 20, 2015
|
|
|
12
|
|
Ratios of Earnings to Fixed Charges
|
|
|
|
|
|
|
|
|
|
X
|
21
|
|
Subsidiaries of Kemper Corporation
|
|
|
|
|
|
|
|
|
|
X
|
23
|
|
Consent of Deloitte & Touche LLP
|
|
|
|
|
|
|
|
|
|
X
|
24
|
|
Power of Attorney (included on the signature page hereof)
|
|
|
|
|
|
|
|
|
|
X
|
31.1
|
|
Certification of Chief Executive Officer Pursuant to SEC Rule 13a-14(a)
|
|
|
|
|
|
|
|
|
|
X
|
31.2
|
|
Certification of Chief Financial Officer Pursuant to SEC Rule 13a-14(a)
|
|
|
|
|
|
|
|
|
|
X
|
32.1
|
|
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished pursuant to Item 601(b)(32) of Regulation S-K)
|
|
|
|
|
|
|
|
|
|
X
|
32.2
|
|
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished pursuant to Item 601(b)(32) of Regulation S-K)
|
|
|
|
|
|
|
|
|
|
X
|
101.1
|
|
XBRL Instance
|
|
|
|
|
|
|
|
|
|
X
|
101.2
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
|
|
|
X
|
101.3
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.4
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.5
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.6
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
|
|
Page
|
|
ARTICLE I
|
DEFINITIONS
|
1
|
|
ARTICLE II
|
ELIGIBILITY
|
5
|
|
ARTICLE III
|
DEFERRALS
|
5
|
|
ARTICLE IV
|
FUNDING
|
7
|
|
ARTICLE V
|
INVESTMENT OF FUNDS, ACCOUNT MAINTENANCE AND VESTING
|
9
|
|
ARTICLE VI
|
PAYMENT OF BENEFITS
|
10
|
|
ARTICLE VII
|
PAYMENTS UPON DEATH
|
12
|
|
ARTICLE VIII
|
ADMINISTRATION OF THE PLAN
|
12
|
|
ARTICLE IX
|
AMENDMENT OR TERMINATION
|
14
|
|
ARTICLE X
|
GENERAL PROVISIONS
|
15
|
|
(i)
|
any “Person” (defined below) is or becomes the “Beneficial Owner,” (defined below) directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its “Affiliate” (defined below)) representing 25% or more of the combined voting power of the Company’s then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (1) of subparagraph (iii) below; or
|
(ii)
|
the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on
|
(iii)
|
there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation, other than (1) a merger or consolidation which results in the directors of the Company immediately prior to such merger or consolidation continuing to constitute at least a majority of the board of directors of the surviving entity or any parent thereof, or (2) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliate) representing 25% or more of the combined voting power of the Company’s then outstanding securities; or
|
(iv)
|
the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition by the Company of all or substantially all of the Company’s assets immediately following which the individuals who comprise the Board of Directors immediately prior thereto constitute at least a majority of the board of directors of the entity to which such assets are sold or disposed or any parent thereof.
|
(i)
|
“Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”);
|
(ii)
|
“Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Exchange Act; and
|
(iii)
|
“Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified in Sections 13(d)(3) and 14(d)(2) thereof,
|
KEMPER CORPORATION
|
By:
/s/ Lisa King
Lisa King
Its: Vice President
|
|
|
Years Ended December 31,
|
||||||||||||||||||
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Income from Continuing Operations before Income Taxes
|
|
$
|
100.3
|
|
|
$
|
160.2
|
|
|
$
|
314.4
|
|
|
$
|
122.4
|
|
|
$
|
68.3
|
|
Less Equity in Earnings of Equity Method Limited Liability Investments
|
|
(19.0
|
)
|
|
(9.0
|
)
|
|
(26.4
|
)
|
|
(9.3
|
)
|
|
(9.6
|
)
|
|||||
Plus Distribution of Accumulated Earnings in Equity Method Limited Liability Investments
|
|
8.6
|
|
|
21.7
|
|
|
15.4
|
|
|
15.4
|
|
|
—
|
|
|||||
Plus Fixed Charges
|
|
52.3
|
|
|
52.9
|
|
|
44.3
|
|
|
45.1
|
|
|
45.1
|
|
|||||
Less Capitalized Interest
|
|
(0.8
|
)
|
|
(1.0
|
)
|
|
(0.9
|
)
|
|
(1.8
|
)
|
|
(2.6
|
)
|
|||||
Total Earnings
|
|
$
|
141.4
|
|
|
$
|
224.8
|
|
|
$
|
346.8
|
|
|
$
|
171.8
|
|
|
$
|
101.2
|
|
Interest
|
|
$
|
50.0
|
|
|
$
|
50.3
|
|
|
$
|
41.7
|
|
|
$
|
41.4
|
|
|
$
|
40.6
|
|
Rental Factor
|
|
1.5
|
|
|
1.6
|
|
|
1.7
|
|
|
1.9
|
|
|
1.9
|
|
|||||
Capitalized Interest
|
|
0.8
|
|
|
1.0
|
|
|
0.9
|
|
|
1.8
|
|
|
2.6
|
|
|||||
Total Fixed Charges
|
|
$
|
52.3
|
|
|
$
|
52.9
|
|
|
$
|
44.3
|
|
|
$
|
45.1
|
|
|
$
|
45.1
|
|
Ratio of Earnings to Fixed Charges (a)
|
|
2.7 x
|
|
|
4.2 x
|
|
|
7.8 x
|
|
|
3.8 x
|
|
|
2.2 x
|
|
(a)
|
The ratios of earnings to fixed charges have been computed on a consolidated basis by dividing (a) Income from Continuing Operations before Income Taxes less Equity in Earnings of Equity Method Limited Liability Investments, plus Distribution of Accumulated Earnings of Equity Method Limited Liability Investments, plus fixed charges, and less capitalized interest, by (b) fixed charges. Fixed charges consist of interest on debt and a factor for interest included in rent expense. Income from Continuing Operations before Income Taxes has the meaning as set forth in the Consolidated Statements of Income included in our Annual Report on Form 10-K for the year ended
December 31, 2015
. Equity in Earnings of Equity Method Limited Liability Investments and Distribution of Accumulated Earnings of Equity Method Limited Liability Investments have the meanings as set forth in the Consolidated Statements of Cash Flows included in our Annual Report on Form 10-K for the year ended
December 31, 2015
.
|
|
|
/S/ JOSEPH P. LACHER, JR.
|
|
Joseph P. Lacher, Jr.
|
|
President and Chief Executive Officer
|
|
|
|
/S/ FRANK J. SODARO
|
|
Frank J. Sodaro
|
|
Senior Vice President and Chief Financial Officer
|
|
|
|
|
|
|
|
/S/ JOSEPH P. LACHER, JR.
|
|
Name:
|
|
Joseph P. Lacher, Jr.
|
|
Title:
|
|
President and Chief Executive Officer
|
|
Date:
|
|
February 12, 2016
|
|
|
|
|
|
|
|
/S/ FRANK J. SODARO
|
|
Name:
|
|
Frank J. Sodaro
|
|
Title:
|
|
Senior Vice President and Chief Financial Officer
|
|
Date:
|
|
February 12, 2016
|
|