x
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Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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¨
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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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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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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(Do not check if a smaller reporting company)
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Smaller Reporting Company
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¨
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Emerging Growth Company
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¨
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Page
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PART I.
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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PART II.
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Item 1.
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Item 1A.
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Item 2.
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Item 6.
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•
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Evolving practices and interpretations by regulators and courts that increase operating costs and potential liabilities, particularly any that involve retroactive application of new requirements, including, but not limited to, state initiatives related to unclaimed property laws or claims handling practices with respect to life insurance policies and the proactive use of death verification databases;
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•
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Adverse outcomes in litigation or other legal or regulatory proceedings involving Kemper or its subsidiaries or affiliates;
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•
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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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•
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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;
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•
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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;
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•
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The number and severity of insurance claims (including those associated with catastrophe losses);
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•
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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, changes in claims handling procedures and closure patterns and development patterns;
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•
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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;
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•
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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;
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•
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Orders, interpretations or other actions by regulators that impact the reporting, adjustment and payment of claims;
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•
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Changes in the pricing or availability of reinsurance, or in the financial condition of reinsurers and amounts recoverable therefrom;
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•
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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;
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•
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The level of success and costs incurred in realizing or maintaining economies of scale, integrating acquired businesses and implementing significant business initiatives, including, but not limited to, those related to expense and claims savings, consolidations, reorganizations and technology;
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•
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Absolute and relative performance of the Company’s products and services, including, but not limited to, the level of success achieved in designing and introducing new insurance products;
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•
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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;
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•
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Heightened competition, including, with respect to pricing, consolidations of existing competitors or 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;
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•
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Expected benefits and synergies from mergers, acquisitions and/or divestitures that may not be realized to the extent anticipated, within expected time frames or at all, due to a number of factors including, but not limited to, the loss of key agents/brokers, customers or employees, increased costs, fees, expenses and related charges and delays caused by factors outside of the Company’s control;
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•
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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;
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Absolute and relative performance of investments held by the Company;
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•
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Changes in insurance industry trends and significant industry developments;
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•
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Changes in consumer trends and significant consumer or product developments;
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•
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Changes in capital requirements, including the calculations thereof, used by regulators and rating agencies;
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•
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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;
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•
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The impact of required participation in windpools and joint underwriting associations, residual market assessments and assessments for insurance industry insolvencies;
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•
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Changes in distribution channels, methods or costs resulting from changes in laws or regulations, lawsuits or market forces;
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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
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Six Months Ended
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Three Months Ended
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Jun 30,
2018 |
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Jun 30,
2017 |
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Jun 30,
2018 |
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Jun 30,
2017 |
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Revenues:
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Earned Premiums
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$
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1,267.9
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$
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1,145.9
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$
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658.1
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$
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582.5
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Net Investment Income
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157.6
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158.7
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78.4
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77.1
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Other Income
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2.4
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1.9
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1.2
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1.0
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Income from Change in Fair Value of Equity Securities
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1.1
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—
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0.4
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—
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Net Realized Gains on Sales of Investments
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6.4
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36.9
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3.8
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26.4
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Other-than-temporary Impairment Losses:
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Total Other-than-temporary Impairment Losses
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(0.5
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(7.8
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—
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(2.6
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)
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Portion of Losses Recognized in Other Comprehensive Income
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—
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0.2
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—
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—
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Net Impairment Losses Recognized in Earnings
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(0.5
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)
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(7.6
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)
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—
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(2.6
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)
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Total Revenues
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1,434.9
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1,335.8
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741.9
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684.4
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Expenses:
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Policyholders’ Benefits and Incurred Losses and Loss Adjustment Expenses
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936.4
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924.8
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499.5
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447.4
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Insurance Expenses
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331.3
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321.5
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171.2
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163.5
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Interest and Other Expenses
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54.7
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40.9
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25.7
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21.4
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Total Expenses
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1,322.4
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1,287.2
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696.4
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632.3
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Income from Continuing Operations before Income Taxes
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112.5
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48.6
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45.5
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52.1
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Income Tax Expense
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(21.4
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(12.4
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(8.0
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(15.5
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Income from Continuing Operations
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91.1
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36.2
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37.5
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36.6
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Income from Discontinued Operations
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0.3
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0.1
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0.1
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—
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Net Income
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$
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91.4
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$
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36.3
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$
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37.6
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$
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36.6
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Income from Continuing Operations Per Unrestricted Share:
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Basic
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$
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1.76
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$
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0.70
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$
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0.73
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$
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0.71
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Diluted
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$
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1.75
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$
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0.70
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$
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0.73
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$
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0.71
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Net Income Per Unrestricted Share:
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Basic
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$
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1.77
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$
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0.71
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$
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0.73
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$
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0.71
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Diluted
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$
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1.76
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$
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0.70
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$
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0.73
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$
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0.71
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Dividends Paid to Shareholders Per Share
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$
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0.48
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$
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0.48
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$
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0.24
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$
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0.24
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Six Months Ended
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Three Months Ended
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||||||||||||
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Jun 30,
2018 |
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Jun 30,
2017 |
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Jun 30,
2018 |
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Jun 30,
2017 |
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Net Income
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$
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91.4
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$
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36.3
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$
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37.6
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$
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36.6
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Other Comprehensive Income (Loss) Before Income Taxes:
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Unrealized Holding Gains (Losses)
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(182.2
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)
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67.2
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(60.8
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)
|
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38.7
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Foreign Currency Translation Adjustments
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0.3
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0.8
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1.2
|
|
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0.7
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Decrease (Increase) in Net Unrecognized Postretirement Benefit Costs
|
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0.6
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(0.3
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)
|
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0.3
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(0.2
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)
|
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Gain (Loss) on Cash Flow Hedges
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0.2
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(6.5
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)
|
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(0.7
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)
|
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(4.5
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)
|
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Other Comprehensive Income (Loss) Before Income Taxes
|
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(181.1
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)
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61.2
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(60.0
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)
|
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34.7
|
|
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Other Comprehensive Income Tax Benefit (Expense)
|
|
38.1
|
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(21.6
|
)
|
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12.7
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|
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(12.2
|
)
|
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Other Comprehensive Income (Loss)
|
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(143.0
|
)
|
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39.6
|
|
|
(47.3
|
)
|
|
22.5
|
|
||||
Total Comprehensive Income (Loss)
|
|
$
|
(51.6
|
)
|
|
$
|
75.9
|
|
|
$
|
(9.7
|
)
|
|
$
|
59.1
|
|
|
Jun 30,
2018 |
|
Dec 31,
2017 |
||||
Assets:
|
|
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|
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Investments:
|
|
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|
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Fixed Maturities at Fair Value (Amortized Cost: 2018 - $5,076.0; 2017 - $5,021.6)
|
$
|
5,260.3
|
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$
|
5,382.7
|
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Equity Securities at Fair Value
|
514.9
|
|
|
526.0
|
|
||
Equity Securities at Modified Cost
|
54.1
|
|
|
—
|
|
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Equity Method Limited Liability Investments at Cost Plus Cumulative Undistributed Earnings
|
170.9
|
|
|
161.0
|
|
||
Fair Value Option Investments
|
—
|
|
|
77.5
|
|
||
Short-term Investments at Cost which Approximates Fair Value
|
169.0
|
|
|
235.5
|
|
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Other Investments
|
411.7
|
|
|
422.2
|
|
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Total Investments
|
6,580.9
|
|
|
6,804.9
|
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Cash
|
649.9
|
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|
45.7
|
|
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Receivables from Policyholders
|
407.5
|
|
|
366.0
|
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Other Receivables
|
189.2
|
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|
194.3
|
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Deferred Policy Acquisition Costs
|
388.9
|
|
|
365.3
|
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Goodwill
|
323.0
|
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323.0
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Current Income Tax Assets
|
0.9
|
|
|
6.1
|
|
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Deferred Income Tax Assets
|
10.6
|
|
|
—
|
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Other Assets
|
289.6
|
|
|
270.9
|
|
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Total Assets
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$
|
8,840.5
|
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$
|
8,376.2
|
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Liabilities and Shareholders’ Equity:
|
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Insurance Reserves:
|
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Life and Health
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$
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3,543.5
|
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$
|
3,521.0
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Property and Casualty
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1,059.7
|
|
|
1,016.8
|
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Total Insurance Reserves
|
4,603.2
|
|
|
4,537.8
|
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Unearned Premiums
|
723.8
|
|
|
653.9
|
|
||
Deferred Income Tax Liabilities
|
—
|
|
|
14.8
|
|
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Liabilities for Unrecognized Tax Benefits
|
9.2
|
|
|
8.1
|
|
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Debt, Current and Non-current, at Amortized Cost (Fair Value: 2018 - $963.7; 2017 - $614.6)
|
951.8
|
|
|
592.3
|
|
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Accrued Expenses and Other Liabilities
|
506.8
|
|
|
453.7
|
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Total Liabilities
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6,794.8
|
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|
6,260.6
|
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Shareholders’ Equity:
|
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Common Stock, $0.10 Par Value, 100 Million Shares Authorized; 51,558,608 Shares Issued and Outstanding at June 30, 2018 and 51,462,405 Shares Issued and Outstanding at December 31, 2017
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5.2
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|
|
5.1
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Paid-in Capital
|
681.5
|
|
|
673.1
|
|
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Retained Earnings
|
1,289.4
|
|
|
1,243.0
|
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Accumulated Other Comprehensive Income
|
69.6
|
|
|
194.4
|
|
||
Total Shareholders’ Equity
|
2,045.7
|
|
|
2,115.6
|
|
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Total Liabilities and Shareholders’ Equity
|
$
|
8,840.5
|
|
|
$
|
8,376.2
|
|
|
Six Months Ended
|
||||||
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Jun 30,
2018 |
|
Jun 30,
2017 |
||||
Operating Activities:
|
|
|
|
||||
Net Income
|
$
|
91.4
|
|
|
$
|
36.3
|
|
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
|
|
|
|
||||
Amortization of Intangible Assets Acquired
|
1.8
|
|
|
2.6
|
|
||
Equity in Earnings of Equity Method Limited Liability Investments
|
(8.5
|
)
|
|
(10.8
|
)
|
||
Distribution of Accumulated Earnings of Equity Method Limited Liability Investments
|
5.0
|
|
|
11.1
|
|
||
Decrease (Increase) in Value of Fair Value Option Investments Reported in Investment Income
|
—
|
|
|
(0.5
|
)
|
||
Decrease (Increase) in Value of Equity Securities at Fair Value
|
(1.1
|
)
|
|
—
|
|
||
Amortization of Investment Securities and Depreciation of Investment Real Estate
|
2.9
|
|
|
8.7
|
|
||
Net Realized Gains on Sales of Investments
|
(6.4
|
)
|
|
(36.9
|
)
|
||
Net Impairment Losses Recognized in Earnings
|
0.5
|
|
|
7.6
|
|
||
Depreciation of Property and Equipment
|
8.2
|
|
|
6.2
|
|
||
Increase in Receivables
|
(38.7
|
)
|
|
(9.2
|
)
|
||
Increase in Deferred Policy Acquisition Costs
|
(23.5
|
)
|
|
(16.5
|
)
|
||
Increase in Insurance Reserves
|
65.8
|
|
|
59.8
|
|
||
Increase in Unearned Premiums
|
69.9
|
|
|
31.8
|
|
||
Change in Income Taxes
|
18.8
|
|
|
9.4
|
|
||
Change in Accrued Expenses and Other Liabilities
|
0.3
|
|
|
6.5
|
|
||
Other, Net
|
5.0
|
|
|
(2.1
|
)
|
||
Net Cash Provided by Operating Activities
|
191.4
|
|
|
104.0
|
|
||
Investing Activities:
|
|
|
|
||||
Sales, Paydowns and Maturities of Fixed Maturities
|
607.5
|
|
|
205.4
|
|
||
Purchases of Fixed Maturities
|
(633.7
|
)
|
|
(264.4
|
)
|
||
Sales of Equity Securities
|
122.9
|
|
|
191.1
|
|
||
Purchases of Equity Securities
|
(61.9
|
)
|
|
(197.4
|
)
|
||
Return of Investment of Equity Method Limited Liability Investments
|
6.2
|
|
|
32.2
|
|
||
Acquisitions of Equity Method Limited Liability Investments
|
(12.6
|
)
|
|
(9.3
|
)
|
||
Sales of Fair Value Option Investments
|
—
|
|
|
34.9
|
|
||
Decrease (Increase) in Short-term Investments
|
67.6
|
|
|
144.2
|
|
||
Improvements of Investment Real Estate
|
(0.4
|
)
|
|
(1.0
|
)
|
||
Sales of Investment Real Estate
|
—
|
|
|
14.7
|
|
||
Increase (Decrease) in Other Investments
|
2.1
|
|
|
(0.9
|
)
|
||
Acquisition and Development of Software
|
(32.8
|
)
|
|
(21.3
|
)
|
||
Other, Net
|
3.3
|
|
|
(3.6
|
)
|
||
Net Cash Provided by Investing Activities
|
68.2
|
|
|
124.6
|
|
||
Financing Activities:
|
|
|
|
||||
Net Proceeds from Issuance of Long-term Debt
|
249.4
|
|
|
200.2
|
|
||
Repayment of Long-term Debt
|
—
|
|
|
(360.0
|
)
|
||
Dividends and Dividend Equivalents Paid
|
(24.9
|
)
|
|
(24.7
|
)
|
||
Proceeds from Advances from FHLB
|
120.0
|
|
|
—
|
|
||
Cash Exercise of Stock Options
|
0.6
|
|
|
0.9
|
|
||
Other, Net
|
(0.5
|
)
|
|
0.2
|
|
||
Net Cash Provided (Used) by Financing Activities
|
344.6
|
|
|
(183.4
|
)
|
||
Increase in Cash
|
604.2
|
|
|
45.2
|
|
||
Cash, Beginning of Year
|
45.7
|
|
|
115.7
|
|
||
Cash, End of Period
|
$
|
649.9
|
|
|
$
|
160.9
|
|
|
|
Amortized
Cost
|
|
Gross Unrealized
|
|
Fair Value
|
||||||||||
(Dollars in Millions)
|
|
Gains
|
|
Losses
|
|
|||||||||||
U.S. Government and Government Agencies and Authorities
|
|
$
|
656.4
|
|
|
$
|
12.9
|
|
|
$
|
(19.9
|
)
|
|
$
|
649.4
|
|
States and Political Subdivisions
|
|
1,465.2
|
|
|
77.3
|
|
|
(10.1
|
)
|
|
1,532.4
|
|
||||
Foreign Governments
|
|
4.7
|
|
|
—
|
|
|
(0.4
|
)
|
|
4.3
|
|
||||
Corporate Securities:
|
|
|
|
|
|
|
|
|
||||||||
Bonds and Notes
|
|
2,717.7
|
|
|
157.1
|
|
|
(35.4
|
)
|
|
2,839.4
|
|
||||
Collateralized Loan Obligations
|
|
227.0
|
|
|
3.0
|
|
|
(0.8
|
)
|
|
229.2
|
|
||||
Other Mortgage- and Asset-backed
|
|
5.0
|
|
|
0.7
|
|
|
(0.1
|
)
|
|
5.6
|
|
||||
Investments in Fixed Maturities
|
|
$
|
5,076.0
|
|
|
$
|
251.0
|
|
|
$
|
(66.7
|
)
|
|
$
|
5,260.3
|
|
|
|
Amortized
Cost
|
|
Gross Unrealized
|
|
Fair Value
|
||||||||||
(Dollars in Millions)
|
|
Gains
|
|
Losses
|
|
|||||||||||
U.S. Government and Government Agencies and Authorities
|
|
$
|
542.7
|
|
|
$
|
19.6
|
|
|
$
|
(6.2
|
)
|
|
$
|
556.1
|
|
States and Political Subdivisions
|
|
1,595.5
|
|
|
108.6
|
|
|
(2.3
|
)
|
|
1,701.8
|
|
||||
Foreign Governments
|
|
3.0
|
|
|
0.2
|
|
|
—
|
|
|
3.2
|
|
||||
Corporate Securities:
|
|
|
|
|
|
|
|
|
||||||||
Bonds and Notes
|
|
2,745.8
|
|
|
245.8
|
|
|
(11.0
|
)
|
|
2,980.6
|
|
||||
Redeemable Preferred Stocks
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||
Collateralized Loan Obligations
|
|
134.1
|
|
|
5.7
|
|
|
—
|
|
|
139.8
|
|
||||
Other Mortgage- and Asset-backed
|
|
0.4
|
|
|
0.7
|
|
|
—
|
|
|
1.1
|
|
||||
Investments in Fixed Maturities
|
|
$
|
5,021.6
|
|
|
$
|
380.6
|
|
|
$
|
(19.5
|
)
|
|
$
|
5,382.7
|
|
(Dollars in Millions)
|
|
Amortized Cost
|
|
Fair Value
|
||||
Due in One Year or Less
|
|
$
|
147.4
|
|
|
$
|
149.7
|
|
Due after One Year to Five Years
|
|
928.2
|
|
|
935.6
|
|
||
Due after Five Years to Ten Years
|
|
1,380.1
|
|
|
1,408.3
|
|
||
Due after Ten Years
|
|
1,907.7
|
|
|
2,060.1
|
|
||
Mortgage- and Asset-backed Securities Not Due at a Single Maturity Date
|
|
712.6
|
|
|
706.6
|
|
||
Investments in Fixed Maturities
|
|
$
|
5,076.0
|
|
|
$
|
5,260.3
|
|
|
|
Less Than 12 Months
|
|
12 Months or Longer
|
|
Total
|
||||||||||||||||||
(Dollars in Millions)
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
||||||||||||
Fixed Maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Government and Government Agencies and Authorities
|
|
$
|
461.9
|
|
|
$
|
(18.8
|
)
|
|
$
|
39.7
|
|
|
$
|
(1.1
|
)
|
|
$
|
501.6
|
|
|
$
|
(19.9
|
)
|
States and Political Subdivisions
|
|
293.4
|
|
|
(8.4
|
)
|
|
57.1
|
|
|
(1.7
|
)
|
|
350.5
|
|
|
(10.1
|
)
|
||||||
Foreign Governments
|
|
3.6
|
|
|
(0.4
|
)
|
|
0.7
|
|
|
—
|
|
|
4.3
|
|
|
(0.4
|
)
|
||||||
Corporate Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Bonds and Notes
|
|
965.5
|
|
|
(30.6
|
)
|
|
161.2
|
|
|
(4.8
|
)
|
|
1,126.7
|
|
|
(35.4
|
)
|
||||||
Collateralized Loan Obligations
|
|
77.8
|
|
|
(0.7
|
)
|
|
22.1
|
|
|
(0.1
|
)
|
|
99.9
|
|
|
(0.8
|
)
|
||||||
Other Mortgage- and Asset-backed
|
|
4.5
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
4.5
|
|
|
(0.1
|
)
|
||||||
Total Fixed Maturities
|
|
1,806.7
|
|
|
(59.0
|
)
|
|
280.8
|
|
|
(7.7
|
)
|
|
2,087.5
|
|
|
(66.7
|
)
|
|
|
Less Than 12 Months
|
|
12 Months or Longer
|
|
Total
|
||||||||||||||||||
(Dollars in Millions)
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
||||||||||||
Fixed Maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Government and Government Agencies and Authorities
|
|
$
|
140.0
|
|
|
$
|
(1.1
|
)
|
|
$
|
103.4
|
|
|
$
|
(5.1
|
)
|
|
$
|
243.4
|
|
|
$
|
(6.2
|
)
|
States and Political Subdivisions
|
|
57.0
|
|
|
(0.3
|
)
|
|
124.2
|
|
|
(2.0
|
)
|
|
181.2
|
|
|
(2.3
|
)
|
||||||
Corporate Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Bonds and Notes
|
|
283.1
|
|
|
(4.2
|
)
|
|
208.9
|
|
|
(6.8
|
)
|
|
492.0
|
|
|
(11.0
|
)
|
||||||
Collateralized Loan Obligations
|
|
2.8
|
|
|
—
|
|
|
2.4
|
|
|
—
|
|
|
5.2
|
|
|
—
|
|
||||||
Total Fixed Maturities
|
|
482.9
|
|
|
(5.6
|
)
|
|
438.9
|
|
|
(13.9
|
)
|
|
921.8
|
|
|
(19.5
|
)
|
|
|
Six Months Ended
|
|
Three Months Ended
|
||||||||||||
(Dollars in Millions)
|
|
Jun 30,
2018 |
|
Jun 30,
2017 |
|
Jun 30,
2018 |
|
Jun 30,
2017 |
||||||||
Cumulative Balance of Pre-tax Credit Losses Recognized in Retained Earnings at Beginning of Period
|
|
$
|
1.6
|
|
|
$
|
1.4
|
|
|
$
|
1.6
|
|
|
$
|
1.6
|
|
Pre-tax Credit Losses on Fixed Maturities without Pre-tax Credit Losses Included in Cumulative Balance at Beginning of Period
|
|
—
|
|
|
1.2
|
|
|
—
|
|
|
0.8
|
|
||||
Reductions for Change in Impairment Status:
|
|
|
|
|
|
|
|
|
||||||||
From Status of Credit Loss to Status of Intent-to-sell or Required-to-sell
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Reductions for Investments Sold During Period
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
||||
Cumulative Balance of Pre-tax Credit Losses Recognized in Retained Earnings at End of Period
|
|
$
|
1.6
|
|
|
$
|
2.4
|
|
|
$
|
1.6
|
|
|
$
|
2.4
|
|
(Dollars in Millions)
|
|
Jun 30,
2018 |
|
Dec 31,
2017 |
||||
Loans to Policyholders at Unpaid Principal
|
|
$
|
296.5
|
|
|
$
|
298.6
|
|
Real Estate at Depreciated Cost
|
|
115.2
|
|
|
116.8
|
|
||
Trading Securities at Fair Value
|
|
—
|
|
|
6.7
|
|
||
Other
|
|
—
|
|
|
0.1
|
|
||
Total
|
|
$
|
411.7
|
|
|
$
|
422.2
|
|
|
|
Six Months Ended
|
|
Three Months Ended
|
||||||||||||
(Dollars in Millions)
|
|
Jun 30,
2018 |
|
Jun 30,
2017 |
|
Jun 30,
2018 |
|
Jun 30,
2017 |
||||||||
Investment Income:
|
|
|
|
|
|
|
|
|
||||||||
Interest on Fixed Income Securities
|
|
$
|
126.8
|
|
|
$
|
122.2
|
|
|
$
|
64.4
|
|
|
$
|
62.1
|
|
Dividends on Equity Securities Excluding Alternative Investments
|
|
4.5
|
|
|
4.4
|
|
|
2.6
|
|
|
2.3
|
|
||||
Alternative Investments:
|
|
|
|
|
|
|
|
|
||||||||
Equity Method Limited Liability Investments
|
|
8.5
|
|
|
10.8
|
|
|
1.4
|
|
|
4.0
|
|
||||
Fair Value Option Investments
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
(0.6
|
)
|
||||
Limited Liability Investments Included in Equity Securities
|
|
9.1
|
|
|
12.8
|
|
|
5.2
|
|
|
5.4
|
|
||||
Total Alternative Investments
|
|
17.6
|
|
|
24.1
|
|
|
6.6
|
|
|
8.8
|
|
||||
Short-term Investments
|
|
2.0
|
|
|
0.5
|
|
|
1.2
|
|
|
0.2
|
|
||||
Loans to Policyholders
|
|
11.0
|
|
|
10.8
|
|
|
5.5
|
|
|
5.3
|
|
||||
Real Estate
|
|
4.8
|
|
|
5.7
|
|
|
2.4
|
|
|
2.8
|
|
||||
Other
|
|
0.4
|
|
|
0.1
|
|
|
0.4
|
|
|
0.1
|
|
||||
Total Investment Income
|
|
167.1
|
|
|
167.8
|
|
|
83.1
|
|
|
81.6
|
|
||||
Investment Expenses:
|
|
|
|
|
|
|
|
|
||||||||
Real Estate
|
|
4.9
|
|
|
5.1
|
|
|
2.6
|
|
|
2.5
|
|
||||
Other Investment Expenses
|
|
4.6
|
|
|
4.0
|
|
|
2.1
|
|
|
2.0
|
|
||||
Total Investment Expenses
|
|
9.5
|
|
|
9.1
|
|
|
4.7
|
|
|
4.5
|
|
||||
Net Investment Income
|
|
$
|
157.6
|
|
|
$
|
158.7
|
|
|
$
|
78.4
|
|
|
$
|
77.1
|
|
|
|
Six Months Ended
|
|
Three Months Ended
|
||||||||||||
(Dollars in Millions)
|
|
Jun 30,
2018 |
|
Jun 30,
2017 |
|
Jun 30,
2018 |
|
Jun 30,
2017 |
||||||||
Fixed Maturities:
|
|
|
|
|
|
|
|
|
||||||||
Gains on Sales
|
|
$
|
5.3
|
|
|
$
|
4.9
|
|
|
$
|
1.2
|
|
|
$
|
3.5
|
|
Losses on Sales
|
|
(4.0
|
)
|
|
(0.4
|
)
|
|
(1.9
|
)
|
|
(0.2
|
)
|
|
|
Six Months Ended
|
||||||
(Dollars in Millions)
|
|
Jun 30,
2018 |
|
Jun 30,
2017 |
||||
Property and Casualty Insurance Reserves:
|
|
|
|
|
||||
Gross of Reinsurance and Indemnification at Beginning of Year
|
|
$
|
1,016.8
|
|
|
$
|
931.4
|
|
Less Reinsurance and Indemnification Recoverables at Beginning of Year
|
|
53.1
|
|
|
50.2
|
|
||
Property and Casualty Insurance Reserves - Net of Reinsurance and Indemnification at Beginning of Year
|
|
963.7
|
|
|
881.2
|
|
||
Incurred Losses and LAE Related to:
|
|
|
|
|
||||
Current Year:
|
|
|
|
|
||||
Continuing Operations
|
|
742.3
|
|
|
721.9
|
|
||
Prior Years:
|
|
|
|
|
||||
Continuing Operations
|
|
2.0
|
|
|
19.0
|
|
||
Discontinued Operations
|
|
(0.4
|
)
|
|
(0.1
|
)
|
||
Total Incurred Losses and LAE Related to Prior Years
|
|
1.6
|
|
|
18.9
|
|
||
Total Incurred Losses and LAE
|
|
743.9
|
|
|
740.8
|
|
||
Paid Losses and LAE Related to:
|
|
|
|
|
||||
Current Year:
|
|
|
|
|
||||
Continuing Operations
|
|
335.1
|
|
|
355.0
|
|
||
Prior Years:
|
|
|
|
|
||||
Continuing Operations
|
|
361.6
|
|
|
346.3
|
|
||
Discontinued Operations
|
|
1.7
|
|
|
2.0
|
|
||
Total Paid Losses and LAE Related to Prior Years
|
|
363.3
|
|
|
348.3
|
|
||
Total Paid Losses and LAE
|
|
698.4
|
|
|
703.3
|
|
||
Property and Casualty Insurance Reserves - Net of Reinsurance and Indemnification at End of Period
|
|
1,009.2
|
|
|
918.7
|
|
||
Plus Reinsurance and Indemnification Recoverables at End of Period
|
|
50.5
|
|
|
48.3
|
|
||
Property and Casualty Insurance Reserves - Gross of Reinsurance and Indemnification at End of Period
|
|
$
|
1,059.7
|
|
|
$
|
967.0
|
|
(Dollars in Millions)
|
|
Jun 30,
2018 |
|
Dec 31,
2017 |
||||
4.35% Senior Notes due February 15, 2025
|
|
$
|
448.2
|
|
|
$
|
448.1
|
|
7.375% Subordinated Debentures due February 27, 2054
|
|
144.2
|
|
|
144.2
|
|
||
Term Loan due June 29, 2020
|
|
249.4
|
|
|
—
|
|
||
Total Long-term Debt Outstanding
|
|
$
|
841.8
|
|
|
$
|
592.3
|
|
|
|
Six Months Ended
|
|
Three Months Ended
|
||||||||||||
|
|
Jun 30,
2018 |
|
Jun 30,
2017 |
|
Jun 30,
2018 |
|
Jun 30,
2017 |
||||||||
(Dollars in Millions)
|
|
|
|
|
|
|
|
|
||||||||
Income from Continuing Operations
|
|
$
|
91.1
|
|
|
$
|
36.2
|
|
|
$
|
37.5
|
|
|
$
|
36.6
|
|
Less Income from Continuing Operations Attributed to Participating Awards
|
|
0.6
|
|
|
0.2
|
|
|
0.1
|
|
|
0.3
|
|
||||
Income from Continuing Operations Attributed to Unrestricted Shares
|
|
90.5
|
|
|
36.0
|
|
|
37.4
|
|
|
36.3
|
|
||||
Dilutive Effect on Income of Equity-based Compensation Equivalent Shares
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Diluted Income from Continuing Operations Attributed to Unrestricted Shares
|
|
$
|
90.5
|
|
|
$
|
36.0
|
|
|
$
|
37.4
|
|
|
$
|
36.3
|
|
(Number of Shares in Thousands)
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average Unrestricted Shares Outstanding
|
|
51,526.6
|
|
|
51,279.6
|
|
|
51,549.9
|
|
|
51,286.2
|
|
||||
Equity-based Compensation Equivalent Shares
|
|
470.1
|
|
|
157.6
|
|
|
526.5
|
|
|
124.9
|
|
||||
Weighted-average Unrestricted Shares and Equivalent Shares Outstanding Assuming Dilution
|
|
51,996.7
|
|
|
51,437.2
|
|
|
52,076.4
|
|
|
51,411.1
|
|
||||
(Per Unrestricted Share in Whole Dollars)
|
|
|
|
|
|
|
|
|
||||||||
Basic Income from Continuing Operations Per Unrestricted Share
|
|
$
|
1.76
|
|
|
$
|
0.70
|
|
|
$
|
0.73
|
|
|
$
|
0.71
|
|
Diluted Income from Continuing Operations Per Unrestricted Share
|
|
$
|
1.75
|
|
|
$
|
0.70
|
|
|
$
|
0.73
|
|
|
$
|
0.71
|
|
|
|
Six Months Ended
|
|
Three Months Ended
|
||||||||
(Number of Shares in Thousands)
|
|
Jun 30,
2018 |
|
Jun 30,
2017 |
|
Jun 30,
2018 |
|
Jun 30,
2017 |
||||
Equity-based Compensation Equivalent Shares
|
|
416.9
|
|
|
498.5
|
|
|
504.2
|
|
|
584.4
|
|
Weighted-average Unrestricted Shares and Equivalent Shares Outstanding Assuming Dilution
|
|
416.9
|
|
|
498.5
|
|
|
504.2
|
|
|
584.4
|
|
|
|
Six Months Ended
|
|
Three Months Ended
|
||||||||||||
(Dollars in Millions)
|
|
Jun 30,
2018 |
|
Jun 30,
2017 |
|
Jun 30,
2018 |
|
Jun 30,
2017 |
||||||||
Other Comprehensive Income (Loss) Before Income Taxes:
|
|
|
|
|
|
|
|
|
||||||||
Unrealized Holding Gains (Losses) Arising During the Period Before Reclassification Adjustment
|
|
$
|
(181.0
|
)
|
|
$
|
91.3
|
|
|
$
|
(61.5
|
)
|
|
$
|
57.7
|
|
Reclassification Adjustment for Amounts Included in Net Income
|
|
(1.2
|
)
|
|
(24.1
|
)
|
|
0.7
|
|
|
(19.0
|
)
|
||||
Unrealized Holding Gains (Losses)
|
|
(182.2
|
)
|
|
67.2
|
|
|
(60.8
|
)
|
|
38.7
|
|
||||
Foreign Currency Translation Adjustments
|
|
0.3
|
|
|
0.8
|
|
|
1.2
|
|
|
0.7
|
|
||||
Net Unrecognized Postretirement Benefit Costs
|
|
0.6
|
|
|
(0.3
|
)
|
|
0.3
|
|
|
(0.2
|
)
|
||||
Gain (Loss) on Cash Flow Hedges During the Period Before Reclassification Adjustment
|
|
(0.1
|
)
|
|
(7.6
|
)
|
|
(0.7
|
)
|
|
(5.6
|
)
|
||||
Reclassification Adjustment for Amounts Included in Net Income
|
|
0.3
|
|
|
1.1
|
|
|
—
|
|
|
1.1
|
|
||||
Gain (Loss) on Cash Flow Hedges
|
|
0.2
|
|
|
(6.5
|
)
|
|
(0.7
|
)
|
|
(4.5
|
)
|
||||
Other Comprehensive Income (Loss) Before Income Taxes
|
|
$
|
(181.1
|
)
|
|
$
|
61.2
|
|
|
$
|
(60.0
|
)
|
|
$
|
34.7
|
|
|
|
Six Months Ended
|
|
Three Months Ended
|
||||||||||||
(Dollars in Millions)
|
|
Jun 30,
2018 |
|
Jun 30,
2017 |
|
Jun 30,
2018 |
|
Jun 30,
2017 |
||||||||
Other Comprehensive Income Tax Benefit (Expense):
|
|
|
|
|
|
|
|
|
||||||||
Unrealized Holding Gains and Losses Arising During the Period Before Reclassification Adjustment
|
|
$
|
38.0
|
|
|
$
|
(32.1
|
)
|
|
$
|
13.0
|
|
|
$
|
(20.2
|
)
|
Reclassification Adjustment for Amounts Included in Net Income
|
|
0.3
|
|
|
8.4
|
|
|
(0.1
|
)
|
|
6.6
|
|
||||
Unrealized Holding Gains
|
|
38.3
|
|
|
(23.7
|
)
|
|
12.9
|
|
|
(13.6
|
)
|
||||
Foreign Currency Translation Adjustments
|
|
(0.1
|
)
|
|
(0.3
|
)
|
|
(0.3
|
)
|
|
(0.3
|
)
|
||||
Net Unrecognized Postretirement Benefit Costs
|
|
(0.1
|
)
|
|
0.1
|
|
|
(0.1
|
)
|
|
0.1
|
|
||||
Gain and Loss on Cash Flow Hedges During the Period Before Reclassification Adjustment
|
|
—
|
|
|
2.7
|
|
|
0.1
|
|
|
2.0
|
|
||||
Reclassification Adjustment for Amounts Included in Net Income
|
|
—
|
|
|
(0.4
|
)
|
|
0.1
|
|
|
(0.4
|
)
|
||||
Gain and Loss on Cash Flow Hedges
|
|
—
|
|
|
2.3
|
|
|
0.2
|
|
|
1.6
|
|
||||
Other Comprehensive Income Tax Benefit (Expense)
|
|
$
|
38.1
|
|
|
$
|
(21.6
|
)
|
|
$
|
12.7
|
|
|
$
|
(12.2
|
)
|
(Dollars in Millions)
|
|
Jun 30,
2018 |
|
Dec 31,
2017 |
||||
Net Unrealized Gains on Investments, Net of Income Taxes:
|
|
|
|
|
||||
Available for Sale Fixed Maturities with Portion of OTTI Recognized in Earnings
|
|
$
|
—
|
|
|
$
|
0.2
|
|
Other Net Unrealized Gains on Investments
|
|
161.7
|
|
|
269.5
|
|
||
Foreign Currency Translation Adjustments, Net of Income Taxes
|
|
0.4
|
|
|
0.2
|
|
||
Net Unrecognized Postretirement Benefit Costs, Net of Income Taxes
|
|
(88.7
|
)
|
|
(72.2
|
)
|
||
Loss on Cash Flow Hedges, Net of Income Taxes
|
|
(3.8
|
)
|
|
(3.3
|
)
|
||
Accumulated Other Comprehensive Income
|
|
$
|
69.6
|
|
|
$
|
194.4
|
|
|
|
Six Months Ended
|
|
Three Months Ended
|
||||||||||||
(Dollars in Millions)
|
|
Jun 30,
2018 |
|
Jun 30,
2017 |
|
Jun 30,
2018 |
|
Jun 30,
2017 |
||||||||
Reclassification of AOCI from Net Unrealized Gains on Investments to:
|
|
|
|
|
|
|
|
|
||||||||
Net Realized Gains on Sales of Investments
|
|
$
|
1.7
|
|
|
$
|
31.7
|
|
|
$
|
(0.7
|
)
|
|
$
|
21.6
|
|
Net Impairment Losses Recognized in Earnings
|
|
(0.5
|
)
|
|
(7.6
|
)
|
|
—
|
|
|
(2.6
|
)
|
||||
Total Before Income Taxes
|
|
1.2
|
|
|
24.1
|
|
|
(0.7
|
)
|
|
19.0
|
|
||||
Income Tax Expense
|
|
(0.3
|
)
|
|
(8.4
|
)
|
|
0.1
|
|
|
(6.6
|
)
|
||||
Reclassification from AOCI, Net of Income Taxes
|
|
0.9
|
|
|
15.7
|
|
|
(0.6
|
)
|
|
12.4
|
|
||||
Reclassification of AOCI from Unrecognized Postretirement Benefit Costs to:
|
|
|
|
|
|
|
|
|
||||||||
Interest and Other Expenses
|
|
(0.6
|
)
|
|
0.3
|
|
|
(0.3
|
)
|
|
0.2
|
|
||||
Income Tax Benefit
|
|
0.1
|
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
||||
Reclassification from AOCI, Net of Income Taxes
|
|
(0.5
|
)
|
|
0.2
|
|
|
(0.3
|
)
|
|
0.1
|
|
||||
Reclassification of AOCI from Loss on Cash Flow Hedges to:
|
|
|
|
|
|
|
|
|
||||||||
Interest and Other Expenses
|
|
(0.1
|
)
|
|
(1.1
|
)
|
|
—
|
|
|
(1.1
|
)
|
||||
Income Tax Benefit
|
|
—
|
|
|
0.4
|
|
|
(0.1
|
)
|
|
0.4
|
|
||||
Reclassification from AOCI, Net of Income Taxes
|
|
(0.1
|
)
|
|
(0.7
|
)
|
|
(0.1
|
)
|
|
(0.7
|
)
|
||||
Total Reclassification from AOCI to Net Income (Loss)
|
|
$
|
0.3
|
|
|
$
|
15.2
|
|
|
$
|
(1.0
|
)
|
|
$
|
11.8
|
|
(Dollars in Millions, Except Per Share Amounts)
|
|
Total
Shareholders’ Equity |
||
Shareholders’ Equity at Beginning of Year
|
|
$
|
2,115.6
|
|
Net Income
|
|
91.4
|
|
|
Other Comprehensive Income (Loss)
|
|
(143.0
|
)
|
|
Total Comprehensive Income (Loss)
|
|
(51.6
|
)
|
|
Cash Dividends and Dividend Equivalents to Shareholders ($0.24 per share)
|
|
(24.9
|
)
|
|
Equity-based Compensation Cost
|
|
8.1
|
|
|
Equity-based Awards, Net of Shares Exchanged
|
|
(1.5
|
)
|
|
Shareholders’ Equity at End of Period
|
|
$
|
2,045.7
|
|
|
|
Six Months Ended
|
|
Three Months Ended
|
||||||||||||
(Dollars in Millions)
|
|
Jun 30,
2018 |
|
Jun 30,
2017 |
|
Jun 30,
2018 |
|
Jun 30,
2017 |
||||||||
Service Cost
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest Cost on Projected Benefit Obligation
|
|
10.2
|
|
|
10.3
|
|
|
5.1
|
|
|
5.2
|
|
||||
Expected Return on Plan Assets
|
|
(14.4
|
)
|
|
(15.5
|
)
|
|
(7.2
|
)
|
|
(7.8
|
)
|
||||
Amortization of Accumulated Net Unrecognized Pension Costs
|
|
2.1
|
|
|
1.3
|
|
|
1.1
|
|
|
0.7
|
|
||||
Total Pension Benefit Recognized
|
|
$
|
(2.1
|
)
|
|
$
|
(3.9
|
)
|
|
$
|
(1.0
|
)
|
|
$
|
(1.9
|
)
|
|
|
Six Months Ended
|
|
Three Months Ended
|
||||||||||||
(Dollars in Millions)
|
|
Jun 30,
2018 |
|
Jun 30,
2017 |
|
Jun 30,
2018 |
|
Jun 30,
2017 |
||||||||
Service Cost
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
||
Interest Cost on Accumulated Postretirement Benefit Obligation
|
|
0.2
|
|
|
0.2
|
|
|
0.1
|
|
|
0.1
|
|
||||
Amortization of Prior Service Credit
|
|
(0.9
|
)
|
|
(0.7
|
)
|
|
(0.6
|
)
|
|
(0.4
|
)
|
||||
Amortization of Accumulated Net Unrecognized Gain
|
|
(0.7
|
)
|
|
(0.9
|
)
|
|
(0.3
|
)
|
|
(0.5
|
)
|
||||
Total OPEB Benefit Recognized
|
|
$
|
(1.3
|
)
|
|
$
|
(1.3
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
(0.7
|
)
|
|
|
Six Months Ended
|
|
Three Months Ended
|
||||||||||||
(Dollars in Millions)
|
|
Jun 30,
2018 |
|
Jun 30,
2017 |
|
Jun 30,
2018 |
|
Jun 30,
2017 |
||||||||
Personal Automobile
|
|
$
|
787.3
|
|
|
$
|
659.8
|
|
|
$
|
416.2
|
|
|
$
|
339.1
|
|
Homeowners
|
|
124.0
|
|
|
132.9
|
|
|
62.2
|
|
|
66.6
|
|
||||
Other Personal Property and Casualty Insurance
|
|
55.7
|
|
|
58.1
|
|
|
28.0
|
|
|
29.2
|
|
||||
Commercial Automobile
|
|
24.7
|
|
|
25.4
|
|
|
12.5
|
|
|
12.7
|
|
||||
Life
|
|
189.1
|
|
|
191.1
|
|
|
95.4
|
|
|
95.4
|
|
||||
Accident and Health
|
|
87.1
|
|
|
78.6
|
|
|
43.8
|
|
|
39.5
|
|
||||
Total Earned Premiums
|
|
$
|
1,267.9
|
|
|
$
|
1,145.9
|
|
|
$
|
658.1
|
|
|
$
|
582.5
|
|
|
|
Six Months Ended
|
|
Three Months Ended
|
||||||||||||
(Dollars in Millions)
|
|
Jun 30,
2018 |
|
Jun 30,
2017 |
|
Jun 30,
2018 |
|
Jun 30,
2017 |
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Property & Casualty Insurance:
|
|
|
|
|
|
|
|
|
||||||||
Earned Premiums
|
|
$
|
956.3
|
|
|
$
|
839.6
|
|
|
$
|
501.1
|
|
|
$
|
429.2
|
|
Net Investment Income
|
|
45.4
|
|
|
44.7
|
|
|
22.9
|
|
|
20.6
|
|
||||
Other Income
|
|
0.7
|
|
|
0.5
|
|
|
0.4
|
|
|
0.3
|
|
||||
Total Property & Casualty Insurance
|
|
1,002.4
|
|
|
884.8
|
|
|
524.4
|
|
|
450.1
|
|
||||
Life & Health Insurance:
|
|
|
|
|
|
|
|
|
||||||||
Earned Premiums
|
|
311.6
|
|
|
306.3
|
|
|
157.0
|
|
|
153.3
|
|
||||
Net Investment Income
|
|
107.4
|
|
|
107.9
|
|
|
54.1
|
|
|
54.9
|
|
||||
Other Income
|
|
1.7
|
|
|
1.2
|
|
|
0.9
|
|
|
0.6
|
|
||||
Total Life & Health Insurance
|
|
420.7
|
|
|
415.4
|
|
|
212.0
|
|
|
208.8
|
|
||||
Total Segment Revenues
|
|
1,423.1
|
|
|
1,300.2
|
|
|
736.4
|
|
|
658.9
|
|
||||
Income from Change in Fair Value of Equity Securities
|
|
1.1
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
||||
Net Realized Gains on Sales of Investments
|
|
6.4
|
|
|
36.9
|
|
|
3.8
|
|
|
26.4
|
|
||||
Net Impairment Losses Recognized in Earnings
|
|
(0.5
|
)
|
|
(7.6
|
)
|
|
—
|
|
|
(2.6
|
)
|
||||
Other
|
|
4.8
|
|
|
6.3
|
|
|
1.3
|
|
|
1.7
|
|
||||
Total Revenues
|
|
$
|
1,434.9
|
|
|
$
|
1,335.8
|
|
|
$
|
741.9
|
|
|
$
|
684.4
|
|
|
|
Six Months Ended
|
|
Three Months Ended
|
||||||||||||
(Dollars in Millions)
|
|
Jun 30,
2018 |
|
Jun 30,
2017 |
|
Jun 30,
2018 |
|
Jun 30,
2017 |
||||||||
Segment Operating Profit (Loss):
|
|
|
|
|
|
|
|
|
||||||||
Property & Casualty Insurance
|
|
$
|
62.7
|
|
|
$
|
(33.0
|
)
|
|
$
|
18.2
|
|
|
$
|
4.2
|
|
Life & Health Insurance
|
|
63.3
|
|
|
63.8
|
|
|
33.4
|
|
|
31.2
|
|
||||
Total Segment Operating Profit (Loss)
|
|
126.0
|
|
|
30.8
|
|
|
51.6
|
|
|
35.4
|
|
||||
Corporate and Other Operating Loss
|
|
(10.7
|
)
|
|
(11.5
|
)
|
|
(6.7
|
)
|
|
(7.1
|
)
|
||||
Income from Change in Fair Value of Equity Securities
|
|
1.1
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
||||
Net Realized Gains on Sales of Investments
|
|
6.4
|
|
|
36.9
|
|
|
3.8
|
|
|
26.4
|
|
||||
Net Impairment Losses Recognized in Earnings
|
|
(0.5
|
)
|
|
(7.6
|
)
|
|
—
|
|
|
(2.6
|
)
|
||||
Acquisition Related Transaction and Integration Costs
|
|
(9.8
|
)
|
|
—
|
|
|
(3.6
|
)
|
|
—
|
|
||||
Income from Continuing Operations before Income Taxes
|
|
$
|
112.5
|
|
|
$
|
48.6
|
|
|
$
|
45.5
|
|
|
$
|
52.1
|
|
|
|
Six Months Ended
|
|
Three Months Ended
|
||||||||||||
(Dollars in Millions and Net of Income Taxes)
|
|
Jun 30,
2018 |
|
Jun 30,
2017 |
|
Jun 30,
2018 |
|
Jun 30,
2017 |
||||||||
Segment Net Operating Income (Loss):
|
|
|
|
|
|
|
|
|
||||||||
Property & Casualty Insurance
|
|
$
|
51.2
|
|
|
$
|
(17.2
|
)
|
|
$
|
15.2
|
|
|
$
|
4.9
|
|
Life & Health Insurance
|
|
50.2
|
|
|
42.0
|
|
|
26.4
|
|
|
20.5
|
|
||||
Total Segment Net Operating Income (Loss)
|
|
101.4
|
|
|
24.8
|
|
|
41.6
|
|
|
25.4
|
|
||||
Corporate and Other Net Operating Loss
|
|
(7.4
|
)
|
|
(7.7
|
)
|
|
(5.1
|
)
|
|
(4.4
|
)
|
||||
Income from Change in Fair Value of Equity Securities
|
|
0.9
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
||||
Net Realized Gains on Sales of Investments
|
|
5.1
|
|
|
24.0
|
|
|
3.0
|
|
|
17.2
|
|
||||
Net Impairment Losses Recognized in Earnings
|
|
(0.4
|
)
|
|
(4.9
|
)
|
|
—
|
|
|
(1.6
|
)
|
||||
Acquisition Related Transaction and Integration Costs
|
|
(8.5
|
)
|
|
—
|
|
|
(2.3
|
)
|
|
—
|
|
||||
Income from Continuing Operations
|
|
$
|
91.1
|
|
|
$
|
36.2
|
|
|
$
|
37.5
|
|
|
$
|
36.6
|
|
|
|
Fair Value Measurements
|
|
|
||||||||||||||||
(Dollars in Millions)
|
|
Quoted Prices
in Active Markets
for Identical Assets
(Level 1)
|
|
Significant Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Measured at Net Asset Value
|
|
Total Fair Value
|
||||||||||
Fixed Maturities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Government and Government Agencies and Authorities
|
|
$
|
108.7
|
|
|
$
|
540.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
649.4
|
|
States and Political Subdivisions
|
|
—
|
|
|
1,532.4
|
|
|
—
|
|
|
—
|
|
|
1,532.4
|
|
|||||
Foreign Governments
|
|
—
|
|
|
4.3
|
|
|
—
|
|
|
—
|
|
|
4.3
|
|
|||||
Corporate Securities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Bonds and Notes
|
|
—
|
|
|
2,453.9
|
|
|
385.5
|
|
|
—
|
|
|
2,839.4
|
|
|||||
Collateralized Loan Obligations
|
|
—
|
|
|
133.3
|
|
|
95.9
|
|
|
—
|
|
|
229.2
|
|
|||||
Other Mortgage- and Asset-backed
|
|
—
|
|
|
5.6
|
|
|
—
|
|
|
—
|
|
|
5.6
|
|
|||||
Total Investments in Fixed Maturities
|
|
108.7
|
|
|
4,670.2
|
|
|
481.4
|
|
|
—
|
|
|
5,260.3
|
|
|||||
Equity Securities at Fair Value:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Preferred Stocks:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Finance, Insurance and Real Estate
|
|
—
|
|
|
44.7
|
|
|
—
|
|
|
—
|
|
|
44.7
|
|
|||||
Other Industries
|
|
—
|
|
|
11.8
|
|
|
—
|
|
|
—
|
|
|
11.8
|
|
|||||
Common Stocks:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Finance, Insurance and Real Estate
|
|
1.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.9
|
|
|||||
Other Industries
|
|
12.2
|
|
|
0.6
|
|
|
—
|
|
|
—
|
|
|
12.8
|
|
|||||
Other Equity Interests:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Exchange Traded Funds
|
|
214.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
214.6
|
|
|||||
Limited Liability Companies and Limited Partnerships
|
|
—
|
|
|
—
|
|
|
—
|
|
|
229.1
|
|
|
229.1
|
|
|||||
Total Investments in Equity Securities at Fair Value
|
|
228.7
|
|
|
57.1
|
|
|
—
|
|
|
229.1
|
|
|
514.9
|
|
|||||
Total
|
|
$
|
337.4
|
|
|
$
|
4,727.3
|
|
|
$
|
481.4
|
|
|
$
|
229.1
|
|
|
$
|
5,775.2
|
|
|
|
Fair Value Measurements
|
|
|
||||||||||||||||
(Dollars in Millions)
|
|
Quoted Prices
in Active Markets
for Identical Assets
(Level 1)
|
|
Significant Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Measured at Net Asset Value
|
|
Total Fair Value
|
||||||||||
Fixed Maturities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Government and Government Agencies and Authorities
|
|
$
|
115.8
|
|
|
$
|
440.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
556.1
|
|
States and Political Subdivisions
|
|
—
|
|
|
1,701.8
|
|
|
—
|
|
|
—
|
|
|
1,701.8
|
|
|||||
Foreign Governments
|
|
—
|
|
|
3.2
|
|
|
—
|
|
|
—
|
|
|
3.2
|
|
|||||
Corporate Securities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Bonds and Notes
|
|
—
|
|
|
2,579.1
|
|
|
401.5
|
|
|
—
|
|
|
2,980.6
|
|
|||||
Redeemable Preferred Stocks
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||||
Collateralized Loan Obligations
|
|
—
|
|
|
46.6
|
|
|
93.2
|
|
|
—
|
|
|
139.8
|
|
|||||
Other Mortgage- and Asset-backed
|
|
—
|
|
|
1.1
|
|
|
—
|
|
|
—
|
|
|
1.1
|
|
|||||
Total Investments in Fixed Maturities
|
|
115.8
|
|
|
4,772.1
|
|
|
494.8
|
|
|
—
|
|
|
5,382.7
|
|
|||||
Equity Securities at Fair Value:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Preferred Stocks:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Finance, Insurance and Real Estate
|
|
—
|
|
|
55.7
|
|
|
—
|
|
|
—
|
|
|
55.7
|
|
|||||
Other Industries
|
|
—
|
|
|
12.3
|
|
|
10.8
|
|
|
—
|
|
|
23.1
|
|
|||||
Common Stocks:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Finance, Insurance and Real Estate
|
|
7.0
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
7.1
|
|
|||||
Other Industries
|
|
0.7
|
|
|
0.4
|
|
|
16.6
|
|
|
—
|
|
|
17.7
|
|
|||||
Other Equity Interests:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Exchange Traded Funds
|
|
219.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
219.5
|
|
|||||
Limited Liability Companies and Limited Partnerships
|
|
—
|
|
|
—
|
|
|
34.4
|
|
|
168.5
|
|
|
202.9
|
|
|||||
Total Investments in Equity Securities at Fair Value
|
|
227.2
|
|
|
68.5
|
|
|
61.8
|
|
|
168.5
|
|
|
526.0
|
|
|||||
Fair Value Option Investments:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Limited Liability Companies and Limited Partnership Hedge Funds
|
|
—
|
|
|
—
|
|
|
—
|
|
|
77.5
|
|
|
77.5
|
|
|||||
Other Investments:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Trading Securities
|
|
6.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.7
|
|
|||||
Other Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative Instrument Classified as Cash Flow Hedge
|
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
|||||
Total
|
|
$
|
349.7
|
|
|
$
|
4,839.8
|
|
|
$
|
556.6
|
|
|
$
|
246.0
|
|
|
$
|
5,992.1
|
|
(Dollars in Millions)
|
|
Unobservable Input
|
|
Total Fair Value
|
|
Range of Unobservable Inputs
|
|
Weighted-average Yield
|
|||||||
Investment-grade
|
|
Market Yield
|
|
$
|
117.4
|
|
|
2.9
|
%
|
-
|
8.9
|
%
|
|
4.6
|
%
|
Non-investment-grade:
|
|
|
|
|
|
|
|
|
|
|
|||||
Senior Debt
|
|
Market Yield
|
|
148.3
|
|
|
4.8
|
|
-
|
19.5
|
|
|
9.9
|
|
|
Junior Debt
|
|
Market Yield
|
|
103.4
|
|
|
10.3
|
|
-
|
24.8
|
|
|
12.7
|
|
|
Collateralized Loan Obligations
|
|
Market Yield
|
|
95.9
|
|
|
4.0
|
|
-
|
10.4
|
|
|
8.1
|
|
|
Other
|
|
Various
|
|
16.4
|
|
|
|
|
|
|
|
||||
Total Level 3 Fixed Maturity Investments in Corporate Securities
|
|
|
|
$
|
481.4
|
|
|
|
|
|
|
|
(Dollars in Millions)
|
|
Unobservable Input
|
|
Total Fair Value
|
|
Range of Unobservable Inputs
|
|
Weighted-average Yield
|
|||||||
Investment-grade
|
|
Market Yield
|
|
$
|
96.2
|
|
|
3.0
|
%
|
-
|
6.7
|
%
|
|
3.8
|
%
|
Non-investment-grade:
|
|
|
|
|
|
|
|
|
|
|
|||||
Senior Debt
|
|
Market Yield
|
|
138.1
|
|
|
4.5
|
|
-
|
15.7
|
|
|
10.0
|
|
|
Junior Debt
|
|
Market Yield
|
|
154.1
|
|
|
9.6
|
|
-
|
24.3
|
|
|
12.9
|
|
|
Collateralized Loan Obligations
|
|
Market Yield
|
|
93.2
|
|
|
4.3
|
|
-
|
10.6
|
|
|
7.8
|
|
|
Other Debt
|
|
Various
|
|
13.2
|
|
|
|
|
|
|
|
||||
Total Level 3 Fixed Maturity Investments in Corporate Securities
|
|
|
|
$
|
494.8
|
|
|
|
|
|
|
|
|
|
Fixed Maturities
|
|
Equity Securities
|
|
|
||||||||||||||||||
(Dollars in Millions)
|
|
Corporate
Bonds
and Notes
|
|
Redeemable
Preferred
Stocks
|
|
Collateralized Loan Obligations
|
|
Preferred
and
Common
Stocks
|
|
Other
Equity
Interests
|
|
Total
|
||||||||||||
Balance at Beginning of Period
|
|
401.5
|
|
|
0.1
|
|
|
93.2
|
|
|
27.4
|
|
|
34.4
|
|
|
556.6
|
|
||||||
Total Gains (Losses):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Included in Condensed Consolidated Statement of Income
|
|
1.4
|
|
|
(0.1
|
)
|
|
1.9
|
|
|
—
|
|
|
—
|
|
|
3.2
|
|
||||||
Included in Other Comprehensive Income (Loss)
|
|
0.1
|
|
|
—
|
|
|
(2.0
|
)
|
|
—
|
|
|
—
|
|
|
(1.9
|
)
|
||||||
Purchases
|
|
93.7
|
|
|
—
|
|
|
37.6
|
|
|
—
|
|
|
—
|
|
|
131.3
|
|
||||||
Settlements
|
|
(65.6
|
)
|
|
—
|
|
|
(34.8
|
)
|
|
—
|
|
|
—
|
|
|
(100.4
|
)
|
||||||
Sales
|
|
(40.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40.9
|
)
|
||||||
Transfers into Level 3
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
||||||
Transfers out of Level 3
|
|
(5.0
|
)
|
|
—
|
|
|
—
|
|
|
(27.4
|
)
|
|
(34.4
|
)
|
|
(66.8
|
)
|
||||||
Balance at End of Period
|
|
$
|
385.5
|
|
|
$
|
—
|
|
|
$
|
95.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
481.4
|
|
|
|
Fixed Maturities
|
|
|||||||||
(Dollars in Millions)
|
|
Corporate
Bonds
and Notes
|
|
Collateralized Loan Obligations
|
|
Total
|
||||||
Balance at Beginning of Period
|
|
391.3
|
|
|
128.1
|
|
|
$
|
519.4
|
|
||
Total Gains (Losses):
|
|
|
|
|
|
|
||||||
Included in Condensed Consolidated Statement of Income
|
|
(0.4
|
)
|
|
1.4
|
|
|
1.0
|
|
|||
Included in Other Comprehensive Income (Loss)
|
|
1.7
|
|
|
(1.5
|
)
|
|
0.2
|
|
|||
Purchases
|
|
67.9
|
|
|
(11.3
|
)
|
|
56.6
|
|
|||
Settlements
|
|
(47.5
|
)
|
|
(20.8
|
)
|
|
(68.3
|
)
|
|||
Sales
|
|
(27.5
|
)
|
|
—
|
|
|
(27.5
|
)
|
|||
Transfers into Level 3
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Transfers out of Level 3
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance at End of Period
|
|
$
|
385.5
|
|
|
$
|
95.9
|
|
|
$
|
481.4
|
|
|
|
Fixed Maturities
|
|
Equity Securities
|
|
|
||||||||||||||||||||||
(Dollars in Millions)
|
|
Corporate
Bonds
and Notes
|
|
States and Political Sub- divisions
|
|
Redeemable
Preferred
Stocks
|
|
Collateralized Loan Obligations
|
|
Preferred
and
Common
Stocks
|
|
Other
Equity
Interests
|
|
Total
|
||||||||||||||
Balance at Beginning of Period
|
|
403.2
|
|
|
3.8
|
|
|
0.6
|
|
|
103.5
|
|
|
29.7
|
|
|
40.9
|
|
|
$
|
581.7
|
|
||||||
Total Gains (Losses):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Included in Condensed Consolidated Statement of Income
|
|
(3.9
|
)
|
|
(1.2
|
)
|
|
0.1
|
|
|
0.9
|
|
|
1.3
|
|
|
3.4
|
|
|
0.6
|
|
|||||||
Included in Other Comprehensive Income (Loss)
|
|
2.8
|
|
|
—
|
|
|
(0.1
|
)
|
|
1.7
|
|
|
(1.5
|
)
|
|
(6.7
|
)
|
|
(3.8
|
)
|
|||||||
Purchases
|
|
80.0
|
|
|
—
|
|
|
—
|
|
|
16.4
|
|
|
3.2
|
|
|
1.4
|
|
|
101.0
|
|
|||||||
Settlements
|
|
(44.3
|
)
|
|
(2.6
|
)
|
|
(0.5
|
)
|
|
(12.5
|
)
|
|
—
|
|
|
—
|
|
|
(59.9
|
)
|
|||||||
Sales
|
|
(28.3
|
)
|
|
—
|
|
|
—
|
|
|
(6.7
|
)
|
|
(6.4
|
)
|
|
(6.8
|
)
|
|
(48.2
|
)
|
|||||||
Transfers into Level 3
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Transfers out of Level 3
|
|
(13.4
|
)
|
|
—
|
|
|
—
|
|
|
(7.9
|
)
|
|
(3.5
|
)
|
|
—
|
|
|
(24.8
|
)
|
|||||||
Balance at End of Period
|
|
$
|
396.1
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
95.4
|
|
|
$
|
22.8
|
|
|
$
|
32.2
|
|
|
$
|
546.6
|
|
|
|
Fixed Maturities
|
|
Equity Securities
|
|
|
||||||||||||||||||||||
(Dollars in Millions)
|
|
Corporate
Bonds
and Notes
|
|
States and Political Sub- divisions
|
|
Redeemable
Preferred
Stocks
|
|
Collateralized Loan Obligations
|
|
Preferred
and
Common
Stocks
|
|
Other
Equity
Interests
|
|
Total
|
||||||||||||||
Balance at Beginning of Period
|
|
391.2
|
|
|
2.6
|
|
|
0.2
|
|
|
95.8
|
|
|
29.1
|
|
|
32.4
|
|
|
$
|
551.3
|
|
||||||
Total Gains (Losses):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Included in Condensed Consolidated Statement of Income
|
|
(0.6
|
)
|
|
—
|
|
|
0.1
|
|
|
0.7
|
|
|
1.5
|
|
|
3.4
|
|
|
5.1
|
|
|||||||
Included in Other Comprehensive Income (Loss)
|
|
1.4
|
|
|
—
|
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|
(2.2
|
)
|
|
(0.1
|
)
|
|
(1.3
|
)
|
|||||||
Purchases
|
|
50.2
|
|
|
—
|
|
|
—
|
|
|
7.2
|
|
|
2.9
|
|
|
0.6
|
|
|
60.9
|
|
|||||||
Settlements
|
|
(29.3
|
)
|
|
(2.6
|
)
|
|
—
|
|
|
(5.2
|
)
|
|
—
|
|
|
—
|
|
|
(37.1
|
)
|
|||||||
Sales
|
|
(6.3
|
)
|
|
—
|
|
|
—
|
|
|
(2.9
|
)
|
|
(5.0
|
)
|
|
(4.1
|
)
|
|
(18.3
|
)
|
|||||||
Transfers into Level 3
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Transfers out of Level 3
|
|
(10.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.5
|
)
|
|
—
|
|
|
(14.0
|
)
|
|||||||
Balance at End of Period
|
|
$
|
396.1
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
95.4
|
|
|
$
|
22.8
|
|
|
$
|
32.2
|
|
|
$
|
546.6
|
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||
(Dollars in Millions)
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
Financial Assets:
|
|
|
|
|
|
|
|
|
||||||||
Loans to Policyholders
|
|
$
|
296.5
|
|
|
$
|
533.7
|
|
|
$
|
298.6
|
|
|
$
|
560.3
|
|
Short-term Investments
|
|
169.0
|
|
|
169.0
|
|
|
235.5
|
|
|
235.5
|
|
||||
Financial Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Debt
|
|
$
|
951.8
|
|
|
$
|
963.7
|
|
|
$
|
592.3
|
|
|
$
|
614.6
|
|
Collateralized Borrowings (Included in Other Liabilities)
|
|
10.0
|
|
|
10.0
|
|
|
—
|
|
|
—
|
|
|
|
Six Months Ended
|
|
Three Months Ended
|
||||||||||||||||||||
(Dollars in Millions and Net of Income Taxes)
|
|
Jun 30,
2018 |
|
Jun 30,
2017 |
|
Increase
(Decrease)
|
|
Jun 30,
2018 |
|
Jun 30,
2017 |
|
Increase
(Decrease)
|
||||||||||||
Net Income
|
|
$
|
91.4
|
|
|
$
|
36.3
|
|
|
$
|
55.1
|
|
|
$
|
37.6
|
|
|
$
|
36.6
|
|
|
$
|
1.0
|
|
Income from Discontinued Operations
|
|
0.3
|
|
|
0.1
|
|
|
0.2
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||||
Income from Continuing Operations
|
|
91.1
|
|
|
36.2
|
|
|
54.9
|
|
|
37.5
|
|
|
36.6
|
|
|
0.9
|
|
||||||
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income from Change in Fair Value of Equity Securities
|
|
0.9
|
|
|
—
|
|
|
0.9
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
||||||
Net Realized Gains on Sales of Investments
|
|
5.1
|
|
|
24.0
|
|
|
(18.9
|
)
|
|
3.0
|
|
|
17.2
|
|
|
(14.2
|
)
|
||||||
Net Impairment Losses Recognized in Earnings
|
|
(0.4
|
)
|
|
(4.9
|
)
|
|
4.5
|
|
|
—
|
|
|
(1.6
|
)
|
|
1.6
|
|
||||||
Acquisition Related Transaction and Integration Costs
|
|
(8.5
|
)
|
|
—
|
|
|
(8.5
|
)
|
|
(2.3
|
)
|
|
—
|
|
|
(2.3
|
)
|
||||||
Adjusted Consolidated Net Operating Income
|
|
$
|
94.0
|
|
|
$
|
17.1
|
|
|
$
|
76.9
|
|
|
$
|
36.5
|
|
|
$
|
21.0
|
|
|
$
|
15.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Components of Adjusted Consolidated Net Operating Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Segment Net Operating Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Property & Casualty Insurance
|
|
51.2
|
|
|
(17.2
|
)
|
|
68.4
|
|
|
15.2
|
|
|
4.9
|
|
|
10.3
|
|
||||||
Life & Health Insurance
|
|
50.2
|
|
|
42.0
|
|
|
8.2
|
|
|
26.4
|
|
|
20.5
|
|
|
5.9
|
|
||||||
Corporate and Other Net Operating Loss
|
|
(7.4
|
)
|
|
(7.7
|
)
|
|
0.3
|
|
|
(5.1
|
)
|
|
(4.4
|
)
|
|
(0.7
|
)
|
||||||
Adjusted Consolidated Net Operating Income
|
|
$
|
94.0
|
|
|
$
|
17.1
|
|
|
$
|
76.9
|
|
|
$
|
36.5
|
|
|
$
|
21.0
|
|
|
$
|
15.5
|
|
(i)
|
Income (Loss) from Change in Fair Value of Equity Securities;
|
(ii)
|
Net Realized Gains on Sales of Investments;
|
(iii)
|
Net Impairment Losses Recognized in Earnings related to investments;
|
(iv)
|
Acquisition Related Transaction and Integration Costs;
|
(v)
|
Loss from Early Extinguishment of Debt; and
|
(vi)
|
Significant non-recurring or infrequent items that may not be indicative of ongoing operations.
|
|
|
Six Months Ended
|
|
Three Months Ended
|
||||||||||||
(Dollars in Millions)
|
|
Jun 30,
2018 |
|
Jun 30,
2017 |
|
Jun 30,
2018 |
|
Jun 30,
2017 |
||||||||
Net Premiums Written
|
|
$
|
1,025.8
|
|
|
$
|
869.6
|
|
|
$
|
536.9
|
|
|
$
|
440.7
|
|
Earned Premiums
|
|
$
|
956.3
|
|
|
$
|
839.6
|
|
|
$
|
501.1
|
|
|
$
|
429.2
|
|
Net Investment Income
|
|
45.4
|
|
|
44.7
|
|
|
22.9
|
|
|
20.6
|
|
||||
Other Income
|
|
0.7
|
|
|
0.5
|
|
|
0.4
|
|
|
0.3
|
|
||||
Total Revenues
|
|
1,002.4
|
|
|
884.8
|
|
|
524.4
|
|
|
450.1
|
|
||||
Incurred Losses and LAE related to:
|
|
|
|
|
|
|
|
|
||||||||
Current Year:
|
|
|
|
|
|
|
|
|
||||||||
Non-catastrophe Losses and LAE
|
|
681.5
|
|
|
611.4
|
|
|
355.0
|
|
|
308.8
|
|
||||
Catastrophe Losses and LAE
|
|
49.9
|
|
|
98.4
|
|
|
42.4
|
|
|
34.5
|
|
||||
Prior Years:
|
|
|
|
|
|
|
|
|
||||||||
Non-catastrophe Losses and LAE
|
|
8.4
|
|
|
21.4
|
|
|
4.7
|
|
|
9.6
|
|
||||
Catastrophe Losses and LAE
|
|
(7.5
|
)
|
|
(3.2
|
)
|
|
(1.8
|
)
|
|
(2.0
|
)
|
||||
Total Incurred Losses and LAE
|
|
732.3
|
|
|
728.0
|
|
|
400.3
|
|
|
350.9
|
|
||||
Insurance Expenses
|
|
207.4
|
|
|
189.8
|
|
|
105.9
|
|
|
95.0
|
|
||||
Operating Profit (Loss)
|
|
62.7
|
|
|
(33.0
|
)
|
|
18.2
|
|
|
4.2
|
|
||||
Income Tax Benefit (Expense)
|
|
(11.5
|
)
|
|
15.8
|
|
|
(3.0
|
)
|
|
0.7
|
|
||||
Segment Net Operating Income (Loss)
|
|
$
|
51.2
|
|
|
$
|
(17.2
|
)
|
|
$
|
15.2
|
|
|
$
|
4.9
|
|
|
|
|
|
|
|
|
|
|
||||||||
Ratios Based On Earned Premiums
|
|
|
|
|
|
|
|
|
||||||||
Current Year Non-catastrophe Losses and LAE Ratio
|
|
71.3
|
%
|
|
72.9
|
%
|
|
70.9
|
%
|
|
72.1
|
%
|
||||
Current Year Catastrophe Losses and LAE Ratio
|
|
5.2
|
|
|
11.7
|
|
|
8.5
|
|
|
8.0
|
|
||||
Prior Years Non-catastrophe Losses and LAE Ratio
|
|
0.9
|
|
|
2.5
|
|
|
0.9
|
|
|
2.2
|
|
||||
Prior Years Catastrophe Losses and LAE Ratio
|
|
(0.8
|
)
|
|
(0.4
|
)
|
|
(0.4
|
)
|
|
(0.5
|
)
|
||||
Total Incurred Loss and LAE Ratio
|
|
76.6
|
|
|
86.7
|
|
|
79.9
|
|
|
81.8
|
|
||||
Insurance Expense Ratio
|
|
21.7
|
|
|
22.6
|
|
|
21.1
|
|
|
22.1
|
|
||||
Combined Ratio
|
|
98.3
|
%
|
|
109.3
|
%
|
|
101.0
|
%
|
|
103.9
|
%
|
||||
Underlying Combined Ratio
|
|
|
|
|
|
|
|
|
||||||||
Current Year Non-catastrophe Losses and LAE Ratio
|
|
71.3
|
%
|
|
72.9
|
%
|
|
70.9
|
%
|
|
72.1
|
%
|
||||
Insurance Expense Ratio
|
|
21.7
|
|
|
22.6
|
|
|
21.1
|
|
|
22.1
|
|
||||
Underlying Combined Ratio
|
|
93.0
|
%
|
|
95.5
|
%
|
|
92.0
|
%
|
|
94.2
|
%
|
||||
Reconciliation of Non-GAAP Financial Measure
|
|
|
|
|
|
|
|
|
||||||||
Underlying Combined Ratio
|
|
93.0
|
%
|
|
95.5
|
%
|
|
92.0
|
%
|
|
94.2
|
%
|
||||
Current Year Catastrophe Losses and LAE Ratio
|
|
5.2
|
|
|
11.7
|
|
|
8.5
|
|
|
8.0
|
|
||||
Prior Years Non-catastrophe Losses and LAE Ratio
|
|
0.9
|
|
|
2.5
|
|
|
0.9
|
|
|
2.2
|
|
||||
Prior Years Catastrophe Losses and LAE Ratio
|
|
(0.8
|
)
|
|
(0.4
|
)
|
|
(0.4
|
)
|
|
(0.5
|
)
|
||||
Combined Ratio as Reported
|
|
98.3
|
%
|
|
109.3
|
%
|
|
101.0
|
%
|
|
103.9
|
%
|
|
|
Six Months Ended
|
||||||||||||
|
|
Jun 30, 2018
|
|
Jun 30, 2017
|
||||||||||
(Dollars in Millions)
|
|
Number of Events
|
|
Losses and LAE
|
|
Number of Events
|
|
Losses and LAE
|
||||||
Range of Losses and LAE Per Event:
|
|
|
|
|
|
|
|
|
||||||
Below $5
|
|
24
|
|
|
$
|
25.1
|
|
|
27
|
|
|
$
|
47.3
|
|
$5 - $10
|
|
—
|
|
|
—
|
|
|
1
|
|
|
8.6
|
|
||
$10 - $15
|
|
2
|
|
|
24.8
|
|
|
—
|
|
|
—
|
|
||
$15 - $20
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
$20 - $25
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Greater Than $25
|
|
—
|
|
|
—
|
|
|
1
|
|
|
42.5
|
|
||
Total
|
|
26
|
|
|
$
|
49.9
|
|
|
29
|
|
|
$
|
98.4
|
|
(Dollars in Millions)
|
|
Jun 30,
2018 |
|
Dec 31,
2017 |
||||
Insurance Reserves:
|
|
|
|
|
||||
Automobile
|
|
$
|
845.9
|
|
|
$
|
795.9
|
|
Homeowners
|
|
137.2
|
|
|
139.7
|
|
||
Other
|
|
38.6
|
|
|
40.7
|
|
||
Insurance Reserves
|
|
$
|
1,021.7
|
|
|
$
|
976.3
|
|
Insurance Reserves:
|
|
|
|
|
||||
Loss Reserves:
|
|
|
|
|
||||
Case
|
|
$
|
608.6
|
|
|
$
|
602.4
|
|
Incurred But Not Reported
|
|
267.8
|
|
|
239.3
|
|
||
Total Loss Reserves
|
|
876.4
|
|
|
841.7
|
|
||
LAE Reserves
|
|
145.3
|
|
|
134.6
|
|
||
Insurance Reserves
|
|
$
|
1,021.7
|
|
|
$
|
976.3
|
|
|
|
Six Months Ended
|
|
Three Months Ended
|
||||||||||||
(Dollars in Millions)
|
|
Jun 30,
2018 |
|
Jun 30,
2017 |
|
Jun 30,
2018 |
|
Jun 30,
2017 |
||||||||
Net Premiums Written
|
|
$
|
227.1
|
|
|
$
|
208.8
|
|
|
$
|
120.9
|
|
|
$
|
108.7
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earned Premiums
|
|
$
|
213.6
|
|
|
$
|
209.8
|
|
|
$
|
108.7
|
|
|
$
|
105.5
|
|
|
|
|
|
|
|
|
|
|
||||||||
Incurred Losses and LAE related to:
|
|
|
|
|
|
|
|
|
||||||||
Current Year:
|
|
|
|
|
|
|
|
|
||||||||
Non-catastrophe Losses and LAE
|
|
$
|
148.3
|
|
|
$
|
153.7
|
|
|
$
|
74.7
|
|
|
$
|
76.8
|
|
Catastrophe Losses and LAE
|
|
4.5
|
|
|
8.6
|
|
|
3.9
|
|
|
3.9
|
|
||||
Prior Years:
|
|
|
|
|
|
|
|
|
||||||||
Non-catastrophe Losses and LAE
|
|
(0.9
|
)
|
|
17.4
|
|
|
(1.4
|
)
|
|
6.6
|
|
||||
Catastrophe Losses and LAE
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|
(0.1
|
)
|
|
(0.2
|
)
|
||||
Total Incurred Losses and LAE
|
|
$
|
151.8
|
|
|
$
|
179.5
|
|
|
$
|
77.1
|
|
|
$
|
87.1
|
|
|
|
|
|
|
|
|
|
|
||||||||
Ratios Based On Earned Premiums
|
|
|
|
|
|
|
|
|
||||||||
Current Year Non-catastrophe Losses and LAE Ratio
|
|
69.4
|
%
|
|
73.3
|
%
|
|
68.7
|
%
|
|
72.8
|
%
|
||||
Current Year Catastrophe Losses and LAE Ratio
|
|
2.1
|
|
|
4.1
|
|
|
3.6
|
|
|
3.7
|
|
||||
Prior Years Non-catastrophe Losses and LAE Ratio
|
|
(0.4
|
)
|
|
8.3
|
|
|
(1.3
|
)
|
|
6.3
|
|
||||
Prior Years Catastrophe Losses and LAE Ratio
|
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.2
|
)
|
||||
Total Incurred Loss and LAE Ratio
|
|
71.1
|
%
|
|
85.6
|
%
|
|
70.9
|
%
|
|
82.6
|
%
|
|
|
Six Months Ended
|
|
Three Months Ended
|
||||||||||||
(Dollars in Millions)
|
|
Jun 30,
2018 |
|
Jun 30,
2017 |
|
Jun 30,
2018 |
|
Jun 30,
2017 |
||||||||
Net Premiums Written
|
|
$
|
630.3
|
|
|
$
|
482.7
|
|
|
$
|
325.4
|
|
|
$
|
237.5
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earned Premiums
|
|
$
|
573.7
|
|
|
$
|
450.0
|
|
|
$
|
307.5
|
|
|
$
|
233.6
|
|
|
|
|
|
|
|
|
|
|
||||||||
Incurred Losses and LAE related to:
|
|
|
|
|
|
|
|
|
||||||||
Current Year:
|
|
|
|
|
|
|
|
|
||||||||
Non-catastrophe Losses and LAE
|
|
$
|
440.6
|
|
|
$
|
360.3
|
|
|
$
|
237.8
|
|
|
$
|
183.9
|
|
Catastrophe Losses and LAE
|
|
1.9
|
|
|
4.1
|
|
|
1.7
|
|
|
2.4
|
|
||||
Prior Years:
|
|
|
|
|
|
|
|
|
||||||||
Non-catastrophe Losses and LAE
|
|
4.4
|
|
|
(1.8
|
)
|
|
4.2
|
|
|
(1.0
|
)
|
||||
Catastrophe Losses and LAE
|
|
(0.2
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
||||
Total Incurred Losses and LAE
|
|
$
|
446.7
|
|
|
$
|
362.5
|
|
|
$
|
243.7
|
|
|
$
|
185.3
|
|
|
|
|
|
|
|
|
|
|
||||||||
Ratios Based On Earned Premiums
|
|
|
|
|
|
|
|
|
||||||||
Current Year Non-catastrophe Losses and LAE Ratio
|
|
76.8
|
%
|
|
80.1
|
%
|
|
77.3
|
%
|
|
78.7
|
%
|
||||
Current Year Catastrophe Losses and LAE Ratio
|
|
0.3
|
|
|
0.9
|
|
|
0.6
|
|
|
1.0
|
|
||||
Prior Years Non-catastrophe Losses and LAE Ratio
|
|
0.8
|
|
|
(0.4
|
)
|
|
1.4
|
|
|
(0.4
|
)
|
||||
Prior Years Catastrophe Losses and LAE Ratio
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total Incurred Loss and LAE Ratio
|
|
77.9
|
%
|
|
80.6
|
%
|
|
79.3
|
%
|
|
79.3
|
%
|
|
|
Six Months Ended
|
|
Three Months Ended
|
||||||||||||
(Dollars in Millions)
|
|
Jun 30,
2018 |
|
Jun 30,
2017 |
|
Jun 30,
2018 |
|
Jun 30,
2017 |
||||||||
Net Premiums Written
|
|
$
|
121.7
|
|
|
$
|
129.3
|
|
|
$
|
66.6
|
|
|
$
|
70.1
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earned Premiums
|
|
$
|
124.0
|
|
|
$
|
132.9
|
|
|
$
|
62.2
|
|
|
$
|
66.6
|
|
|
|
|
|
|
|
|
|
|
||||||||
Incurred Losses and LAE related to:
|
|
|
|
|
|
|
|
|
||||||||
Current Year:
|
|
|
|
|
|
|
|
|
||||||||
Non-catastrophe Losses and LAE
|
|
$
|
64.0
|
|
|
$
|
66.3
|
|
|
$
|
28.8
|
|
|
$
|
32.5
|
|
Catastrophe Losses and LAE
|
|
42.4
|
|
|
83.2
|
|
|
35.9
|
|
|
26.7
|
|
||||
Prior Years:
|
|
|
|
|
|
|
|
|
||||||||
Non-catastrophe Losses and LAE
|
|
8.3
|
|
|
2.2
|
|
|
2.7
|
|
|
1.5
|
|
||||
Catastrophe Losses and LAE
|
|
(6.4
|
)
|
|
(2.4
|
)
|
|
(1.3
|
)
|
|
(1.8
|
)
|
||||
Total Incurred Losses and LAE
|
|
$
|
108.3
|
|
|
$
|
149.3
|
|
|
$
|
66.1
|
|
|
$
|
58.9
|
|
|
|
|
|
|
|
|
|
|
||||||||
Ratios Based On Earned Premiums
|
|
|
|
|
|
|
|
|
||||||||
Current Year Non-catastrophe Losses and LAE Ratio
|
|
51.6
|
%
|
|
49.8
|
%
|
|
46.4
|
%
|
|
48.7
|
%
|
||||
Current Year Catastrophe Losses and LAE Ratio
|
|
34.2
|
|
|
62.6
|
|
|
57.7
|
|
|
40.1
|
|
||||
Prior Years Non-catastrophe Losses and LAE Ratio
|
|
6.7
|
|
|
1.7
|
|
|
4.3
|
|
|
2.3
|
|
||||
Prior Years Catastrophe Losses and LAE Ratio
|
|
(5.2
|
)
|
|
(1.8
|
)
|
|
(2.1
|
)
|
|
(2.7
|
)
|
||||
Total Incurred Loss and LAE Ratio
|
|
87.3
|
%
|
|
112.3
|
%
|
|
106.3
|
%
|
|
88.4
|
%
|
|
|
Six Months Ended
|
|
Three Months Ended
|
||||||||||||
(Dollars in Millions)
|
|
Jun 30,
2018 |
|
Jun 30,
2017 |
|
Jun 30,
2018 |
|
Jun 30,
2017 |
||||||||
Net Premiums Written
|
|
$
|
27.0
|
|
|
$
|
28.0
|
|
|
$
|
13.5
|
|
|
$
|
13.3
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earned Premiums
|
|
$
|
24.7
|
|
|
$
|
25.4
|
|
|
$
|
12.5
|
|
|
$
|
12.7
|
|
|
|
|
|
|
|
|
|
|
||||||||
Incurred Losses and LAE related to:
|
|
|
|
|
|
|
|
|
||||||||
Current Year:
|
|
|
|
|
|
|
|
|
||||||||
Non-catastrophe Losses and LAE
|
|
$
|
18.9
|
|
|
$
|
19.5
|
|
|
$
|
9.4
|
|
|
$
|
9.9
|
|
Catastrophe Losses and LAE
|
|
0.4
|
|
|
0.5
|
|
|
0.4
|
|
|
0.4
|
|
||||
Prior Years:
|
|
|
|
|
|
|
|
|
||||||||
Non-catastrophe Losses and LAE
|
|
(0.8
|
)
|
|
3.4
|
|
|
(0.1
|
)
|
|
1.6
|
|
||||
Catastrophe Losses and LAE
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total Incurred Losses and LAE
|
|
$
|
18.4
|
|
|
$
|
23.4
|
|
|
$
|
9.7
|
|
|
$
|
11.9
|
|
|
|
|
|
|
|
|
|
|
||||||||
Ratios Based On Earned Premiums
|
|
|
|
|
|
|
|
|
||||||||
Current Year Non-catastrophe Losses and LAE Ratio
|
|
76.5
|
%
|
|
76.7
|
%
|
|
75.2
|
%
|
|
78.0
|
%
|
||||
Current Year Catastrophe Losses and LAE Ratio
|
|
1.6
|
|
|
2.0
|
|
|
3.2
|
|
|
3.1
|
|
||||
Prior Years Non-catastrophe Losses and LAE Ratio
|
|
(3.2
|
)
|
|
13.4
|
|
|
(0.8
|
)
|
|
12.6
|
|
||||
Prior Years Catastrophe Losses and LAE Ratio
|
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total Incurred Loss and LAE Ratio
|
|
74.5
|
%
|
|
92.1
|
%
|
|
77.6
|
%
|
|
93.7
|
%
|
|
|
Six Months Ended
|
|
Three Months Ended
|
||||||||||||
(Dollars in Millions)
|
|
Jun 30,
2018 |
|
Jun 30,
2017 |
|
Jun 30,
2018 |
|
Jun 30,
2017 |
||||||||
Net Premiums Written
|
|
$
|
19.7
|
|
|
$
|
20.8
|
|
|
$
|
10.5
|
|
|
$
|
11.1
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earned Premiums
|
|
$
|
20.3
|
|
|
$
|
21.5
|
|
|
$
|
10.2
|
|
|
$
|
10.8
|
|
|
|
|
|
|
|
|
|
|
||||||||
Incurred Losses and LAE related to:
|
|
|
|
|
|
|
|
|
||||||||
Current Year:
|
|
|
|
|
|
|
|
|
||||||||
Non-catastrophe Losses and LAE
|
|
$
|
9.7
|
|
|
$
|
11.6
|
|
|
$
|
4.3
|
|
|
$
|
5.7
|
|
Catastrophe Losses and LAE
|
|
0.7
|
|
|
2.0
|
|
|
0.5
|
|
|
1.1
|
|
||||
Prior Years:
|
|
|
|
|
|
|
|
|
||||||||
Non-catastrophe Losses and LAE
|
|
(2.6
|
)
|
|
0.2
|
|
|
(0.7
|
)
|
|
0.9
|
|
||||
Catastrophe Losses and LAE
|
|
(0.7
|
)
|
|
(0.5
|
)
|
|
(0.4
|
)
|
|
—
|
|
||||
Total Incurred Losses and LAE
|
|
$
|
7.1
|
|
|
$
|
13.3
|
|
|
$
|
3.7
|
|
|
$
|
7.7
|
|
|
|
|
|
|
|
|
|
|
||||||||
Ratios Based On Earned Premiums
|
|
|
|
|
|
|
|
|
||||||||
Current Year Non-catastrophe Losses and LAE Ratio
|
|
47.8
|
%
|
|
54.0
|
%
|
|
42.2
|
%
|
|
52.8
|
%
|
||||
Current Year Catastrophe Losses and LAE Ratio
|
|
3.4
|
|
|
9.3
|
|
|
4.9
|
|
|
10.2
|
|
||||
Prior Years Non-catastrophe Losses and LAE Ratio
|
|
(12.8
|
)
|
|
0.9
|
|
|
(6.9
|
)
|
|
8.3
|
|
||||
Prior Years Catastrophe Losses and LAE Ratio
|
|
(3.4
|
)
|
|
(2.3
|
)
|
|
(3.9
|
)
|
|
—
|
|
||||
Total Incurred Loss and LAE Ratio
|
|
35.0
|
%
|
|
61.9
|
%
|
|
36.3
|
%
|
|
71.3
|
%
|
|
|
Six Months Ended
|
|
Three Months Ended
|
||||||||||||
(Dollars in Millions)
|
|
Jun 30,
2018 |
|
Jun 30,
2017 |
|
Jun 30,
2018 |
|
Jun 30,
2017 |
||||||||
Earned Premiums
|
|
$
|
311.6
|
|
|
$
|
306.3
|
|
|
$
|
157.0
|
|
|
$
|
153.3
|
|
Net Investment Income
|
|
107.4
|
|
|
107.9
|
|
|
54.1
|
|
|
54.9
|
|
||||
Other Income
|
|
1.7
|
|
|
1.2
|
|
|
0.9
|
|
|
0.6
|
|
||||
Total Revenues
|
|
420.7
|
|
|
415.4
|
|
|
212.0
|
|
|
208.8
|
|
||||
Policyholders’ Benefits and Incurred Losses and LAE
|
|
204.1
|
|
|
196.8
|
|
|
99.2
|
|
|
96.5
|
|
||||
Insurance Expenses
|
|
153.3
|
|
|
154.8
|
|
|
79.4
|
|
|
81.1
|
|
||||
Operating Profit
|
|
63.3
|
|
|
63.8
|
|
|
33.4
|
|
|
31.2
|
|
||||
Income Tax Expense
|
|
(13.1
|
)
|
|
(21.8
|
)
|
|
(7.0
|
)
|
|
(10.7
|
)
|
||||
Segment Net Operating Income
|
|
$
|
50.2
|
|
|
$
|
42.0
|
|
|
$
|
26.4
|
|
|
$
|
20.5
|
|
(Dollars in Millions)
|
|
Jun 30,
2018 |
|
Dec 31,
2017 |
||||
Insurance Reserves:
|
|
|
|
|
||||
Future Policyholder Benefits
|
|
$
|
3,379.8
|
|
|
$
|
3,357.5
|
|
Incurred Losses and LAE Reserves:
|
|
|
|
|
||||
Life
|
|
137.7
|
|
|
140.0
|
|
||
Accident and Health
|
|
26.0
|
|
|
23.5
|
|
||
Property
|
|
3.8
|
|
|
4.1
|
|
||
Total Incurred Losses and LAE Reserves
|
|
167.5
|
|
|
167.6
|
|
||
Insurance Reserves
|
|
$
|
3,547.3
|
|
|
$
|
3,525.1
|
|
|
|
Six Months Ended
|
|
Three Months Ended
|
||||||||||||
(Dollars in Millions)
|
|
Jun 30,
2018 |
|
Jun 30,
2017 |
|
Jun 30,
2018 |
|
Jun 30,
2017 |
||||||||
Earned Premiums
|
|
$
|
189.1
|
|
|
$
|
191.1
|
|
|
$
|
95.4
|
|
|
$
|
95.4
|
|
Net Investment Income
|
|
103.3
|
|
|
104.3
|
|
|
52.0
|
|
|
52.9
|
|
||||
Other Income
|
|
1.6
|
|
|
1.1
|
|
|
0.9
|
|
|
0.6
|
|
||||
Total Revenues
|
|
294.0
|
|
|
296.5
|
|
|
148.3
|
|
|
148.9
|
|
||||
Policyholders’ Benefits and Incurred Losses and LAE
|
|
142.8
|
|
|
140.9
|
|
|
69.4
|
|
|
68.8
|
|
||||
Insurance Expenses
|
|
98.6
|
|
|
103.2
|
|
|
51.2
|
|
|
54.8
|
|
||||
Operating Profit
|
|
52.6
|
|
|
52.4
|
|
|
27.7
|
|
|
25.3
|
|
||||
Income Tax Expense
|
|
(10.9
|
)
|
|
(17.9
|
)
|
|
(5.9
|
)
|
|
(8.7
|
)
|
||||
Total Product Line Net Operating Income
|
|
$
|
41.7
|
|
|
$
|
34.5
|
|
|
$
|
21.8
|
|
|
$
|
16.6
|
|
|
|
Six Months Ended
|
|
Three Months Ended
|
||||||||||||
(Dollars in Millions)
|
|
Jun 30,
2018 |
|
Jun 30,
2017 |
|
Jun 30,
2018 |
|
Jun 30,
2017 |
||||||||
Earned Premiums
|
|
$
|
87.1
|
|
|
$
|
78.6
|
|
|
$
|
43.8
|
|
|
$
|
39.5
|
|
Net Investment Income
|
|
3.1
|
|
|
2.7
|
|
|
1.6
|
|
|
1.4
|
|
||||
Other Income
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
||||
Total Revenues
|
|
90.3
|
|
|
81.4
|
|
|
45.4
|
|
|
40.9
|
|
||||
Policyholders’ Benefits and Incurred Losses and LAE
|
|
49.3
|
|
|
43.0
|
|
|
24.1
|
|
|
21.8
|
|
||||
Insurance Expenses
|
|
39.2
|
|
|
34.9
|
|
|
19.7
|
|
|
17.6
|
|
||||
Operating Profit
|
|
1.8
|
|
|
3.5
|
|
|
1.6
|
|
|
1.5
|
|
||||
Income Tax Expense
|
|
(0.4
|
)
|
|
(1.2
|
)
|
|
(0.3
|
)
|
|
(0.5
|
)
|
||||
Total Product Line Net Operating Income
|
|
$
|
1.4
|
|
|
$
|
2.3
|
|
|
$
|
1.3
|
|
|
$
|
1.0
|
|
|
|
Six Months Ended
|
|
Three Months Ended
|
||||||||||||
(Dollars in Millions)
|
|
Jun 30,
2018 |
|
Jun 30,
2017 |
|
Jun 30,
2018 |
|
Jun 30,
2017 |
||||||||
Earned Premiums
|
|
$
|
35.4
|
|
|
$
|
36.6
|
|
|
$
|
17.8
|
|
|
$
|
18.4
|
|
Net Investment Income
|
|
1.0
|
|
|
0.9
|
|
|
0.5
|
|
|
0.6
|
|
||||
Total Revenues
|
|
36.4
|
|
|
37.5
|
|
|
18.3
|
|
|
19.0
|
|
||||
Incurred Losses and LAE related to:
|
|
|
|
|
|
|
|
|
||||||||
Current Year:
|
|
|
|
|
|
|
|
|
||||||||
Non-catastrophe Losses and LAE
|
|
9.6
|
|
|
9.5
|
|
|
4.5
|
|
|
4.8
|
|
||||
Catastrophe Losses and LAE
|
|
1.3
|
|
|
2.6
|
|
|
1.1
|
|
|
0.8
|
|
||||
Prior Years:
|
|
|
|
|
|
|
|
|
||||||||
Non-catastrophe Losses and LAE
|
|
1.0
|
|
|
0.3
|
|
|
0.1
|
|
|
0.1
|
|
||||
Catastrophe Losses and LAE
|
|
0.1
|
|
|
0.5
|
|
|
—
|
|
|
0.2
|
|
||||
Total Incurred Losses and LAE
|
|
12.0
|
|
|
12.9
|
|
|
5.7
|
|
|
5.9
|
|
||||
Insurance Expenses
|
|
15.5
|
|
|
16.7
|
|
|
8.5
|
|
|
8.7
|
|
||||
Operating Profit
|
|
8.9
|
|
|
7.9
|
|
|
4.1
|
|
|
4.4
|
|
||||
Income Tax Expense
|
|
(1.8
|
)
|
|
(2.7
|
)
|
|
(0.8
|
)
|
|
(1.5
|
)
|
||||
Total Product Line Net Operating Income
|
|
$
|
7.1
|
|
|
$
|
5.2
|
|
|
$
|
3.3
|
|
|
$
|
2.9
|
|
Ratios Based On Earned Premiums
|
|
|
|
|
|
|
|
|
||||||||
Current Year Non-catastrophe Losses and LAE Ratio
|
|
27.1
|
%
|
|
25.9
|
%
|
|
25.2
|
%
|
|
26.2
|
%
|
||||
Current Year Catastrophe Losses and LAE Ratio
|
|
3.7
|
|
|
7.1
|
|
|
6.2
|
|
|
4.3
|
|
||||
Prior Years Non-catastrophe Losses and LAE Ratio
|
|
2.8
|
|
|
0.8
|
|
|
0.6
|
|
|
0.5
|
|
||||
Prior Years Catastrophe Losses and LAE Ratio
|
|
0.3
|
|
|
1.4
|
|
|
—
|
|
|
1.1
|
|
||||
Total Incurred Loss and LAE Ratio
|
|
33.9
|
%
|
|
35.2
|
%
|
|
32.0
|
%
|
|
32.1
|
%
|
|
|
Six Months Ended
|
|
Three Months Ended
|
||||||||||||
(Dollars in Millions)
|
|
Jun 30,
2018 |
|
Jun 30,
2017 |
|
Jun 30,
2018 |
|
Jun 30,
2017 |
||||||||
Investment Income:
|
|
|
|
|
|
|
|
|
||||||||
Interest on Fixed Income Securities
|
|
$
|
126.8
|
|
|
$
|
122.2
|
|
|
$
|
64.4
|
|
|
$
|
62.1
|
|
Dividends on Equity Securities Excluding Alternative Investments
|
|
4.5
|
|
|
4.4
|
|
|
2.6
|
|
|
2.3
|
|
||||
Alternative Investments:
|
|
|
|
|
|
|
|
|
||||||||
Equity Method Limited Liability Investments
|
|
8.5
|
|
|
10.8
|
|
|
1.4
|
|
|
4.0
|
|
||||
Fair Value Option Investments
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
(0.6
|
)
|
||||
Limited Liability Investments Included in Equity Securities
|
|
9.1
|
|
|
12.8
|
|
|
5.2
|
|
|
5.4
|
|
||||
Total Alternative Investments
|
|
17.6
|
|
|
24.1
|
|
|
6.6
|
|
|
8.8
|
|
||||
Short-term Investments
|
|
2.0
|
|
|
0.5
|
|
|
1.2
|
|
|
0.2
|
|
||||
Loans to Policyholders
|
|
11.0
|
|
|
10.8
|
|
|
5.5
|
|
|
5.3
|
|
||||
Real Estate
|
|
4.8
|
|
|
5.7
|
|
|
2.4
|
|
|
2.8
|
|
||||
Other
|
|
0.4
|
|
|
0.1
|
|
|
0.4
|
|
|
0.1
|
|
||||
Total Investment Income
|
|
167.1
|
|
|
167.8
|
|
|
83.1
|
|
|
81.6
|
|
||||
Investment Expenses:
|
|
|
|
|
|
|
|
|
||||||||
Real Estate
|
|
4.9
|
|
|
5.1
|
|
|
2.6
|
|
|
2.5
|
|
||||
Other Investment Expenses
|
|
4.6
|
|
|
4.0
|
|
|
2.1
|
|
|
2.0
|
|
||||
Total Investment Expenses
|
|
9.5
|
|
|
9.1
|
|
|
4.7
|
|
|
4.5
|
|
||||
Net Investment Income
|
|
$
|
157.6
|
|
|
$
|
158.7
|
|
|
$
|
78.4
|
|
|
$
|
77.1
|
|
|
|
Six Months Ended
|
|
Three Months Ended
|
||||||||||||
(Dollars in Millions)
|
|
Jun 30,
2018 |
|
Jun 30,
2017 |
|
Jun 30,
2018 |
|
Jun 30,
2017 |
||||||||
Recognized in Condensed Consolidated Statements of Operations:
|
|
|
|
|
|
|
|
|
||||||||
Income from Change in Fair Value of Equity Securities
|
|
$
|
1.1
|
|
|
$
|
—
|
|
|
$
|
0.4
|
|
|
$
|
—
|
|
Gains on Sales
|
|
10.5
|
|
|
36.9
|
|
|
5.8
|
|
|
26.5
|
|
||||
Losses on Sales
|
|
(4.1
|
)
|
|
(0.5
|
)
|
|
(2.0
|
)
|
|
(0.3
|
)
|
||||
Net Impairment Losses Recognized in Earnings
|
|
(0.5
|
)
|
|
(7.6
|
)
|
|
—
|
|
|
(2.6
|
)
|
||||
Net Gains on Trading Securities
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
0.2
|
|
||||
Net Gain Recognized in Condensed Consolidated Statements of Operations
|
|
7.0
|
|
|
29.3
|
|
|
4.2
|
|
|
23.8
|
|
||||
Recognized in Other Comprehensive Income (Loss)
|
|
(181.9
|
)
|
|
67.9
|
|
|
(59.6
|
)
|
|
39.3
|
|
||||
Total Comprehensive Investment Gains (Losses)
|
|
$
|
(174.9
|
)
|
|
$
|
97.2
|
|
|
$
|
(55.4
|
)
|
|
$
|
63.1
|
|
|
|
Six Months Ended
|
|
Three Months Ended
|
|||
(Dollars in Millions)
|
|
Jun 30,
2018 |
|
Jun 30,
2018 |
|||
Preferred Stocks
|
|
$
|
(2.6
|
)
|
|
(1.0
|
)
|
Common Stocks
|
|
0.2
|
|
|
0.2
|
|
|
Other Equity Interests:
|
|
|
|
|
|||
Exchange Traded Funds
|
|
(3.3
|
)
|
|
(1.0
|
)
|
|
Limited Liability Companies and Limited Partnerships
|
|
6.8
|
|
|
2.2
|
|
|
Total Other Equity Interests
|
|
3.5
|
|
|
1.2
|
|
|
Income from Change in Fair Value of Equity Securities
|
|
1.1
|
|
|
0.4
|
|
|
|
Six Months Ended
|
|
Three Months Ended
|
||||||||||||
(Dollars in Millions)
|
|
Jun 30,
2018 |
|
Jun 30,
2017 |
|
Jun 30,
2018 |
|
Jun 30,
2017 |
||||||||
Fixed Maturities:
|
|
|
|
|
|
|
|
|
||||||||
Gains on Sales
|
|
$
|
5.3
|
|
|
$
|
4.9
|
|
|
$
|
1.2
|
|
|
$
|
3.5
|
|
Losses on Sales
|
|
(4.0
|
)
|
|
(0.4
|
)
|
|
(1.9
|
)
|
|
(0.2
|
)
|
||||
Equity Securities:
|
|
|
|
|
|
|
|
|
||||||||
Gains on Sales
|
|
5.2
|
|
|
27.2
|
|
|
4.6
|
|
|
18.3
|
|
||||
Real Estate:
|
|
|
|
|
|
|
|
|
||||||||
Gains on Sales
|
|
—
|
|
|
4.8
|
|
|
—
|
|
|
4.7
|
|
||||
Other:
|
|
|
|
|
|
|
|
|
||||||||
Losses on Sales
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.1
|
)
|
||||
Net Gains on Trading Securities
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
0.2
|
|
||||
Net Realized Gains on Sales of Investments
|
|
$
|
6.4
|
|
|
$
|
36.9
|
|
|
$
|
3.8
|
|
|
$
|
26.4
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gross Gains on Sales
|
|
$
|
10.5
|
|
|
$
|
36.9
|
|
|
$
|
5.8
|
|
|
$
|
26.5
|
|
Gross Losses on Sales
|
|
(4.1
|
)
|
|
(0.5
|
)
|
|
(2.0
|
)
|
|
(0.3
|
)
|
||||
Net Gains on Trading Securities
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
0.2
|
|
||||
Net Realized Gains on Sales of Investments
|
|
$
|
6.4
|
|
|
$
|
36.9
|
|
|
$
|
3.8
|
|
|
$
|
26.4
|
|
|
|
Six Months Ended
|
|
Three Months Ended
|
||||||||||||||||||||||||
|
|
Jun 30, 2018
|
|
Jun 30, 2017
|
|
Jun 30, 2018
|
|
Jun 30, 2017
|
||||||||||||||||||||
(Dollars in Millions)
|
|
Amount
|
|
Number of Issuers
|
|
Amount
|
|
Number of Issuers
|
|
Amount
|
|
Number of Issuers
|
|
Amount
|
|
Number of Issuers
|
||||||||||||
Fixed Maturities
|
|
$
|
(0.3
|
)
|
|
1
|
|
|
$
|
(6.9
|
)
|
|
6
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
(2.2
|
)
|
|
3
|
|
Equity Securities
|
|
(0.2
|
)
|
|
2
|
|
|
(0.7
|
)
|
|
2
|
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|
1
|
|
||||
Net Impairment Losses Recognized in Earnings
|
|
$
|
(0.5
|
)
|
|
|
|
$
|
(7.6
|
)
|
|
|
|
$
|
—
|
|
|
|
|
$
|
(2.6
|
)
|
|
|
|
|
Jun 30, 2018
|
|
Dec 31, 2017
|
||||||||||
(Dollars in Millions)
|
|
Fair Value
|
|
Percentage
of Total
Investments
|
|
Fair Value
|
|
Percentage
of Total
Investments
|
||||||
U.S. Government and Government Agencies and Authorities
|
|
$
|
649.4
|
|
|
9.9
|
%
|
|
$
|
556.1
|
|
|
8.2
|
%
|
States and Political Subdivisions:
|
|
|
|
|
|
|
|
|
||||||
States
|
|
489.8
|
|
|
7.4
|
|
|
594.0
|
|
|
8.7
|
|
||
Political Subdivisions
|
|
133.0
|
|
|
2.0
|
|
|
171.1
|
|
|
2.5
|
|
||
Revenue Bonds
|
|
909.6
|
|
|
13.8
|
|
|
936.7
|
|
|
13.8
|
|
||
Foreign Governments
|
|
4.3
|
|
|
0.1
|
|
|
3.2
|
|
|
—
|
|
||
Total Investments in Governmental Fixed Maturities
|
|
$
|
2,186.1
|
|
|
33.2
|
%
|
|
$
|
2,261.1
|
|
|
33.2
|
%
|
|
|
Jun 30, 2018
|
|
Dec 31, 2017
|
||||||||||
(Dollars in Millions)
|
|
Fair Value
|
|
Percentage
of Total
Investments
|
|
Fair Value
|
|
Percentage
of Total
Investments
|
||||||
Manufacturing
|
|
$
|
1,068.7
|
|
|
16.2
|
%
|
|
$
|
1,168.8
|
|
|
17.2
|
%
|
Finance, Insurance and Real Estate
|
|
853.3
|
|
|
13.0
|
|
|
780.2
|
|
|
11.5
|
|
||
Services
|
|
448.5
|
|
|
6.8
|
|
|
453.3
|
|
|
6.7
|
|
||
Transportation, Communication and Utilities
|
|
337.8
|
|
|
5.1
|
|
|
353.7
|
|
|
5.2
|
|
||
Mining
|
|
148.8
|
|
|
2.3
|
|
|
163.5
|
|
|
2.4
|
|
||
Retail Trade
|
|
123.3
|
|
|
1.9
|
|
|
102.6
|
|
|
1.5
|
|
||
Wholesale Trade
|
|
75.8
|
|
|
1.2
|
|
|
81.3
|
|
|
1.2
|
|
||
Agriculture, Forestry and Fishing
|
|
13.9
|
|
|
0.2
|
|
|
14.5
|
|
|
0.2
|
|
||
Other
|
|
4.1
|
|
|
0.1
|
|
|
3.7
|
|
|
0.1
|
|
||
Total Investments in Non-governmental Fixed Maturities
|
|
$
|
3,074.2
|
|
|
46.8
|
%
|
|
$
|
3,121.6
|
|
|
46.0
|
%
|
(Dollars in Millions)
|
|
Number of Issuers
|
|
Aggregate Fair Value
|
|||
Below $5
|
|
495
|
|
|
$
|
1,089.5
|
|
$5 -$10
|
|
122
|
|
|
856.0
|
|
|
$10 - $20
|
|
62
|
|
|
854.2
|
|
|
$20 - $30
|
|
9
|
|
|
211.2
|
|
|
Greater Than $30
|
|
2
|
|
|
63.3
|
|
|
Total
|
|
690
|
|
|
$
|
3,074.2
|
|
(Dollars in Millions)
|
|
Fair
Value
|
|
Percentage
of Total
Investments
|
|||||
Fixed Maturities:
|
|
|
|
|
|||||
States including their Political Subdivisions:
|
|
|
|
|
|||||
Texas
|
|
$
|
111.7
|
|
|
1.7
|
%
|
||
Georgia
|
|
83.7
|
|
|
1.3
|
|
|||
Michigan
|
|
81.1
|
|
|
1.2
|
|
|||
Colorado
|
|
76.4
|
|
|
1.2
|
|
|||
Louisiana
|
|
68.7
|
|
|
1.0
|
|
|||
Virginia
|
|
62.6
|
|
|
1.0
|
|
|||
Washington
|
|
57.2
|
|
|
0.9
|
|
|||
New York
|
|
54.3
|
|
|
0.8
|
|
|||
Massachusetts
|
|
48.7
|
|
|
0.7
|
|
|||
Ohio
|
|
46.7
|
|
|
0.7
|
|
|||
Total
|
|
$
|
691.1
|
|
|
10.5
|
%
|
|
|
Unfunded
Commitment
|
|
Reported Value
|
|
Reported Value
|
||||||
Asset Class
|
|
Jun 30,
2018 |
|
Jun 30,
2018 |
|
Dec 31,
2017 |
||||||
Reported as Equity Method Limited Liability Investments at Cost Plus Cumulative Undistributed Earnings:
|
|
|
|
|
|
|
||||||
Mezzanine Debt
|
|
$
|
57.4
|
|
|
$
|
82.6
|
|
|
$
|
73.0
|
|
Senior Debt
|
|
21.3
|
|
|
7.0
|
|
|
4.8
|
|
|||
Distressed Debt
|
|
—
|
|
|
43.0
|
|
|
47.5
|
|
|||
Secondary Transactions
|
|
18.8
|
|
|
20.9
|
|
|
20.6
|
|
|||
Leveraged Buyout
|
|
—
|
|
|
4.1
|
|
|
3.3
|
|
|||
Growth Equity
|
|
—
|
|
|
5.4
|
|
|
5.7
|
|
|||
Other
|
|
—
|
|
|
7.9
|
|
|
6.1
|
|
|||
Total Equity Method Limited Liability Investments
|
|
97.5
|
|
|
170.9
|
|
|
161.0
|
|
|||
Reported as Other Equity Interests at Fair Value:
|
|
|
|
|
|
|
||||||
Mezzanine Debt
|
|
85.8
|
|
|
107.6
|
|
|
102.2
|
|
|||
Senior Debt
|
|
32.4
|
|
|
33.0
|
|
|
35.5
|
|
|||
Distressed Debt
|
|
3.4
|
|
|
16.3
|
|
|
16.6
|
|
|||
Secondary Transactions
|
|
10.4
|
|
|
8.1
|
|
|
8.9
|
|
|||
Hedge Fund
|
|
—
|
|
|
55.3
|
|
|
—
|
|
|||
Leveraged Buyout
|
|
3.1
|
|
|
5.4
|
|
|
6.3
|
|
|||
Other
|
|
8.1
|
|
|
3.4
|
|
|
33.4
|
|
|||
Total Reported as Other Equity Interests at Fair Value
|
|
143.2
|
|
|
229.1
|
|
|
202.9
|
|
|||
Reported as Equity Securities at Modified Cost:
|
|
|
|
|
|
|
||||||
Mezzanine Debt
|
|
—
|
|
|
1.5
|
|
|
—
|
|
|||
Other
|
|
0.1
|
|
|
29.5
|
|
|
—
|
|
|||
Total Reported as Equity Securities at Modified Cost
|
|
0.1
|
|
|
31.0
|
|
|
—
|
|
|||
Reported as Fair Value Option Investments:
|
|
|
|
|
|
|
||||||
Hedge Funds
|
|
—
|
|
|
—
|
|
|
77.5
|
|
|||
Total Investments in Limited Liability Companies and Limited Partnerships
|
|
$
|
240.8
|
|
|
$
|
431.0
|
|
|
$
|
441.4
|
|
|
|
Six Months Ended
|
|
Three Months Ended
|
||||||||||||
(Dollars in Millions)
|
|
Jun 30,
2018 |
|
Jun 30,
2017 |
|
Jun 30,
2018 |
|
Jun 30,
2017 |
||||||||
Insurance Expenses:
|
|
|
|
|
|
|
|
|
||||||||
Commissions
|
|
$
|
233.4
|
|
|
$
|
210.9
|
|
|
$
|
123.1
|
|
|
$
|
109.0
|
|
General Expenses
|
|
88.6
|
|
|
97.9
|
|
|
42.9
|
|
|
48.3
|
|
||||
Taxes, Licenses and Fees
|
|
30.6
|
|
|
26.6
|
|
|
16.1
|
|
|
13.4
|
|
||||
Total Costs Incurred
|
|
352.6
|
|
|
335.4
|
|
|
182.1
|
|
|
170.7
|
|
||||
Policy Acquisition Costs:
|
|
|
|
|
|
|
|
|
||||||||
Deferred
|
|
(202.6
|
)
|
|
(170.7
|
)
|
|
(106.1
|
)
|
|
(87.2
|
)
|
||||
Amortized
|
|
179.5
|
|
|
154.2
|
|
|
93.7
|
|
|
78.6
|
|
||||
Net Policy Acquisition Costs Amortized
|
|
(23.1
|
)
|
|
(16.5
|
)
|
|
(12.4
|
)
|
|
(8.6
|
)
|
||||
Amortization of Insurance in Force
|
|
1.8
|
|
|
2.6
|
|
|
1.5
|
|
|
1.4
|
|
||||
Insurance Expenses
|
|
331.3
|
|
|
321.5
|
|
|
171.2
|
|
|
163.5
|
|
||||
Interest Expense
|
|
15.9
|
|
|
19.1
|
|
|
8.0
|
|
|
8.3
|
|
||||
Other Expenses:
|
|
|
|
|
|
|
|
|
||||||||
Loss (Gain) on Cash Flow Hedge
|
|
0.2
|
|
|
1.1
|
|
|
—
|
|
|
1.1
|
|
||||
Acquisition Related Transaction and Integration Costs
|
|
9.8
|
|
|
—
|
|
|
3.6
|
|
|
—
|
|
||||
Other
|
|
28.8
|
|
|
20.7
|
|
|
14.1
|
|
|
12.0
|
|
||||
Other Expenses
|
|
38.8
|
|
|
21.8
|
|
|
17.7
|
|
|
13.1
|
|
||||
Interest and Other Expenses
|
|
54.7
|
|
|
40.9
|
|
|
25.7
|
|
|
21.4
|
|
||||
Total Expenses
|
|
$
|
386.0
|
|
|
$
|
362.4
|
|
|
$
|
196.9
|
|
|
$
|
184.9
|
|
(a)
|
Evaluation of disclosure controls and procedures.
|
(b)
|
Changes in internal controls.
|
|
|
|
|
Incorporated by Reference
|
|
|
|||||||
Exhibit Number
|
|
Exhibit Description
|
|
Form
|
|
File Number
|
|
Exhibit
|
|
Filing Date
|
|
Filed or Furnished Herewith
|
|
|
|
S-3
|
|
333-168605
|
|
4.4
|
|
|
August 6, 2010
|
|
|
||
|
|
8-K
|
|
000-50167
|
|
4.1
|
|
|
September 17, 2012
|
|
|
||
|
|
8-K
|
|
001-18298
|
|
10.1
|
|
|
June 12, 2018
|
|
|
||
|
|
|
|
|
|
|
|
|
|
X
|
|||
|
|
|
|
|
|
|
|
|
|
X
|
|||
|
|
|
|
|
|
|
|
|
|
X
|
|||
|
|
|
|
|
|
|
|
|
|
X
|
|||
|
|
|
|
|
|
|
|
|
|
X
|
|||
101.1
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
|
|
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
|
|
|
Kemper Corporation
|
|
|
|
Date:
|
July 30, 2018
|
/S/ JOSEPH P. LACHER, JR.
|
|
|
Joseph P. Lacher, Jr.
|
|
|
President and Chief Executive Officer
(Principal Executive Officer) |
|
|
|
Date:
|
July 30, 2018
|
/S/ JAMES J. MCKINNEY
|
|
|
James J. McKinney
|
|
|
Senior Vice President and Chief Financial Officer (Principal Financial Officer)
|
|
|
|
Date:
|
July 30, 2018
|
/S/ RICHARD ROESKE
|
|
|
Richard Roeske
|
|
|
Vice President and Chief Accounting Officer
(Principal Accounting Officer)
|
1.
|
Purpose.
The Kemper Corporation Executive Performance Plan (the “Plan”) is designed to attract and retain the services of selected employees of Kemper Corporation (the “Company”) and its Affiliates who are in a position to make a material contribution to the success of the enterprise.
|
2.
|
Definitions.
The following definitions shall apply for purposes of the Plan:
|
2.1
|
“Affiliate” means any person or entity controlled directly or indirectly by the Company, whether by equity ownership, contract or otherwise and shall include direct or indirect subsidiaries of the Company and mutual companies the management of which is controlled by the Company and its subsidiaries.
|
2.2
|
“Award” means an amount payable to a Participant pursuant to Section 4 of the Plan.
|
2.3
|
“Annual Award” means an Award that is earned over one Plan Year, based on the Performance Formula that the Committee establishes for that Plan Year payable to a Participant pursuant to Section 4 of the Plan.
|
2.4
|
“Board of Directors” means the Board of Directors of the Company.
|
2.5
|
“Compensation Committee” or “Committee” means the Compensation Committee of the Board of Directors.
|
2.6
|
“Corporate Performance Measures” means the corporate performance goals upon which the payment of an Award may be conditioned. Any Corporate Performance Measure(s) may be defined in accordance with generally acceptable accounting principles or otherwise, and may be used to measure the performance of the Company and its Affiliates on a consolidated basis, or any Affiliate or business unit or segment of the Company individually, or any combination thereof, as the Committee may deem appropriate. Any Corporate Performance Measure may also be compared against similar measures for a group of comparator or peer companies, or against a published or special index, or against any goal or benchmark, as the Committee, in its sole discretion, deems appropriate. The Committee may define or make adjustments to any Corporate Performance Measure as it deems appropriate in its discretion, including, for example, to provide that a measure that refers to “income” may include or exclude all or a portion of catastrophe losses, catastrophe loss adjustment expenses, and/or gains or losses on investments or be subject to other adjustments.
|
2.7
|
“Maximum Award Payout” means the actual share of the Bonus Pool designated to a Participant by the Committee for any Performance Period under any Annual Award.
|
2.8
|
“Participant” means, for each Performance Period, each employee of the Company or an Affiliate who is an executive officer on the last day of the Performance Period
|
2.9
|
“Performance Formula” shall mean, for a Performance Period, the one or more objective, performance-based formulas approved by the Committee under Section 3, which shall be applied against the relevant performance results for the Performance Period to determine, with regard to the Award of each Participant, whether all, some portion, or none of the Award has been earned for the Performance Period.
|
2.10
|
“Performance Period” consists of one or more Plan Years applicable to an Award.
|
2.11
|
“Plan Year” means a calendar year.
|
3.
|
Determination of Bonus Pool.
|
3.1
|
The Committee shall approve in writing one or more Performance Formulas that the Committee expects to create one or more pools of funds (the “Bonus Pool(s)”) that will apply to Awards granted under the Plan.. Any Performance Formulas so established by the Committee shall be based on one or more Corporate Performance Measures, and shall generally be approved within the first calendar quarter of the Plan Year.
|
3.2
|
The Committee may, in its sole discretion, at the time that it determines any Performance Formulas or any time thereafter, adjust any Corporate Performance Measures to exclude the impact of any unusual or non-recurring item the Committee deems not reflective of the Company’s core operating performance, which occurs during a Performance Period including, but not limited to: (a) asset write-downs; (b) litigation or claim judgments or settlements; (c) the effect of changes in tax laws, accounting or tax principles, or other laws or provisions affecting reported results; (d) any reorganization, restructuring or discontinued operations; (e) extraordinary nonrecurring items as determined by reference to accounting principles generally accepted in the United States and/or as described in the Company’s reports filed with the Securities and Exchange Commission for periods within the applicable Performance Period; (f) acquisitions or divestitures; (g) catastrophic losses; (h) foreign exchange gains or losses; (i) extraordinary events; (j) financing activities; and (k) recapitalizations (including stock splits and dividends). In addition, the Committee may, in its discretion, make adjustments to the established performance metrics applicable to such Award to reflect changes to the job responsibilities of the Participant or the structure of the Company or its Affiliates that relate directly to such established performance metrics for all or a portion of the applicable Performance Period.
|
4.
|
Awards.
|
4.1
|
When the Committee approves the Performance Formulas under which a Bonus Pool will be created for a Plan Year or other Performance Period, the Committee, in its sole discretion, shall assign shares of the Bonus Pool for that Performance Period to those individuals whom the Committee designates as Participants for that Plan Year or other Performance Period; provided that such shares shall not exceed, in the aggregate, one hundred percent (100%) of the Bonus Pool. The actual share of the Bonus Pool designated to a Participant by the Committee for any Performance Period shall be the Participant’s Maximum Award Payout. The Committee’s designation of shares of the Bonus Pool need not be uniform among Participant’s or Plan Years. The Maximum Award Payout to a Participant in any one Plan Year under an Annual Award may not exceed $6,000,000.
|
4.2
|
Notwithstanding the provisions of Section 4.1, in determining the actual amount payable to a Participant for a Performance Period the Committee may, in its sole discretion, reduce or eliminate the amount indicated by the Participant’s Maximum Award Payout at any time prior to the payment of an Award to a Participant
;
provided, however, that in no event shall the exercise of such negative discretion with respect to a Participant result in an increase in the amount payable to another Participant.
|
4.3
|
The Committee shall not have the discretion to (a) provide payment or delivery in respect of any Awards for a Performance Period in excess of the Bonus Pool or any Participant’s Maximum Performance Award for such Performance Period, or (b) increase a Participant’s Maximum Award Payout above the limitations set forth in Section 4.1 above.
|
5.
|
Eligibility for Payment of Awards.
No Participant shall be entitled to payment of an Award hereunder until the Committee certifies in writing the total amount in the Bonus Pool created by achievement of the Performance Formulas for that Performance Period, the Maximum Award Payout for each Participant for the Performance Period, and any other material terms of the Plan have in fact been satisfied. (Such written certification may take the form of minutes of a meeting of the Committee.)
|
6.1
|
Award payouts shall be made in cash and may be subject to such additional restrictions as the Committee, in its sole discretion, shall impose.
|
6.2
|
Subject to Sections 4 and 5, Awards shall be paid at such time as the Committee may determine, but no later than two and one-half (2½) months after the end of the last Plan Year of the Performance Period.
|
7.
|
Administration.
|
7.1
|
The Plan shall be administered by the Compensation Committee.
|
7.2
|
Subject to the provisions of the Plan, the Committee shall have exclusive power to determine the amounts that shall be available for Awards each Plan Year and to establish the guidelines under which the Awards payable to each Participant shall be determined.
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7.3
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The Committee’s interpretation of the Plan, grant of any Award pursuant to the Plan, and all actions taken within the scope of its authority under the Plan, shall be final and binding on all Participants (or former Participants) and their executors.
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7.4
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The Committee shall have the authority to establish, adopt or revise such rules or regulations relating to the Plan as it may deem necessary or advisable for the administration of the Plan.
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8.
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Amendment and Termination.
The Committee may amend any provision of the Plan at any time; provided that no amendment that requires shareholder approval in order for Award payouts made pursuant to the Plan to be deductible under the Code, as amended, may be made without the approval of the shareholders of the Company. The Committee shall also have the right to terminate the Plan at any time.
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9.
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Miscellaneous.
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9.1
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The fact that an employee has been designated a Participant shall not confer on the Participant any right to be retained in the employ of the Company or one or more of its Affiliates, or to be designated a Participant in any subsequent Plan Year.
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9.2
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The Plan shall not be deemed the exclusive method of providing incentive compensation for an employee of the Company and its Affiliates, nor shall it preclude the Committee or the Board of Directors from authorizing or approving other forms of incentive compensation.
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9.3
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All expenses and costs in connection with the operation of the Plan shall be borne by the Company and its subsidiaries.
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9.4
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The Company or Affiliate making a payment under the Plan shall withhold therefrom such amounts as may be required by federal, state or local law, and the amount payable under the Plan to the person entitled thereto shall be reduced by the amount so withheld.
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9.5
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The Plan and the rights of all persons under the Plan shall be construed and administered in accordance with the laws of the State of Illinois to the extent not superseded by federal law.
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/S/ JOSEPH P. LACHER, JR.
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Joseph P. Lacher, Jr.
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President and Chief Executive Officer
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/S/ JAMES J. MCKINNEY
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James J. McKinney
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Senior Vice President and Chief Financial Officer
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/S/ JOSEPH P. LACHER, JR.
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Name:
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Joseph P. Lacher, Jr.
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Title:
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President and Chief Executive Officer
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Date:
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July 30, 2018
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/S/ JAMES J. MCKINNEY
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Name:
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James J. McKinney
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Title:
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Senior Vice President and Chief Financial Officer
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Date:
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July 30, 2018
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