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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 2020
or
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from              to             
Commission file number: 1-15259
ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
(Exact name of registrant as specified in its charter)
 
Bermuda 98-0214719
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification Number)
110 Pitts Bay Road P.O. Box HM 1282
PembrokeHM08HamiltonHM FX
BermudaBermuda
(Address of principal executive offices) (Mailing address)
(441) 296-5858
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value of $1.00 per shareARGONew York Stock Exchange
Guarantee of Argo Group U.S., Inc.  6.500% Senior Notes due 2042ARGDNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filerAccelerated filerNon-accelerated filer

Smaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark whether the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
Indicate the number of shares outstanding (net of treasury shares) of each of the issuer’s classes of common shares as of May 6, 2020.
TitleOutstanding
Common Shares, par value $1.00 per share34,634,776



Table of Contents
ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
INDEX
 
  Page
Item 1.
 
 
 
 
 
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
 

2

Table of Contents
PART I. FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements
ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except number of shares and per share amounts)
 
March 31,
2020
December 31,
2019 *
 (Unaudited) 
Assets  
Investments:
  
Fixed maturities available-for-sale, at fair value (cost: 2020 - $3,634.4, 2019 - $3,605.0;
allowance for expected credit losses: 2020 - $31.6)
$3,523.5  $3,633.5  
Equity securities, at fair value (cost: 2020 - $170.6; 2019 - $122.8)
132.9  124.4  
Other investments (cost: 2020 - $422.5; 2019 - $482.5)
422.4  496.5  
Short-term investments, at fair value (cost: 2020 - $732.7; 2019 - $844.8)
732.6  845.0  
Total investments4,811.4  5,099.4  
Cash158.7  137.8  
Accrued investment income23.2  25.7  
Premiums receivable739.1  688.2  
Reinsurance recoverables2,820.9  3,104.6  
Goodwill 161.4  161.4  
Intangible assets, net of accumulated amortization91.5  91.8  
Deferred tax asset, net44.5  6.1  
Deferred acquisition costs, net158.0  160.2  
Ceded unearned premiums652.9  545.0  
Operating lease right-of-use assets89.1  91.8  
Other assets435.4  387.1  
Assets held for sale15.2  15.4  
Total assets
$10,201.3  $10,514.5  
Liabilities and Shareholders' Equity
Reserves for losses and loss adjustment expenses$5,067.6  $5,157.6  
Unearned premiums1,460.0  1,410.9  
Accrued underwriting expenses and other liabilities185.3  226.0  
Ceded reinsurance payable, net1,094.8  1,203.1  
Funds held60.0  50.6  
Senior unsecured fixed rate notes140.0  140.0  
Other indebtedness180.0  181.3  
Junior subordinated debentures257.5  257.4  
Current income taxes payable, net17.7  0.8  
Operating lease liabilities101.6  105.7  
Total liabilities
8,564.5  8,733.4  
Commitments and contingencies (Note 14)

Shareholders' equity:
Common shares - $1.00 par, 500,000,000 shares authorized; 45,867,812 and 45,698,470 shares issued at March 31, 2020 and December 31, 2019, respectively
45.9  45.7  
Additional paid-in capital1,374.2  1,376.6  
Treasury shares (11,315,889 shares at March 31, 2020 and December 31, 2019, respectively)
(455.1) (455.1) 
Retained earnings773.7  811.1  
Accumulated other comprehensive (loss) income, net of taxes(101.9) 2.8  
Total shareholders' equity
1,636.8  1,781.1  
Total liabilities and shareholders' equity$10,201.3  $10,514.5  
Derived from audited consolidated financial statements. 
See accompanying notes.
3

Table of Contents
ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME
(in millions, except number of shares and per share amounts)
(Unaudited)
 
 
 For the Three Months Ended
March 31,
 20202019
Premiums and other revenue:  
Earned premiums$435.0  $420.5  
Net investment income35.5  33.9  
Fee and other income2.1  2.3  
Net realized investment (losses) gains:
Net realized investment gains (losses) 27.9  (1.7) 
Change in fair value of equity securities(39.3) 54.2  
Credit losses on fixed maturity securities(24.7)   
Net realized investment (losses) gains (36.1) 52.5  
Total revenue436.5  509.2  
Expenses:
Losses and loss adjustment expenses280.9  237.9  
Underwriting, acquisition and insurance expenses168.0  160.2  
Other corporate expenses3.3  0.5  
Interest expense7.7  8.5  
Fee and other expense1.2  1.3  
Foreign currency exchange (gains) loss(3.0) 0.7  
Total expenses458.1  409.1  
(Loss) income before income taxes(21.6) 100.1  
Income tax (benefit) provision (2.8) 8.9  
Net (loss) income$(18.8) $91.2  
Net (loss) income per common share:
Basic$(0.55) $2.68  
Diluted$(0.55) $2.63  
Dividend declared per common share$0.31  $0.31  
Weighted average common shares:
Basic34,469,516  33,984,329  
Diluted34,469,516  34,737,939  
 
 For the Three Months Ended
March 31,
 20202019
Net realized investment (losses) gains before other-than-temporary impairment losses$(36.1) $56.8  
Other-than-temporary impairment losses recognized in earnings:
Other-than-temporary impairment losses on fixed maturities  (4.3) 
Impairment losses recognized in earnings  (4.3) 
Net realized investment (losses) gains $(36.1) $52.5  
 
See accompanying notes.
4

Table of Contents
ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(in millions)
(Unaudited)
 
 For the Three Months Ended
March 31,
 20202019
Net (loss) income$(18.8) $91.2  
Other comprehensive income (loss):
Foreign currency translation adjustments(3.4) 0.2  
Unrealized (losses) gains on securities:
(Losses) gains arising during the year(122.8) 56.8  
Reclassification adjustment for (gains) losses included in net income(3.4) 3.1  
Other comprehensive (loss) income before tax(129.6) 60.1  
Income tax provision related to other comprehensive income:
Unrealized gain (losses) on securities:
(Losses) gain arising during the year(21.1) 9.1  
Reclassification adjustment for losses (gains) included in net income1.9  0.5  
Income tax (benefit) provision related to other comprehensive income(19.2) 9.6  
Other comprehensive (loss) income, net of tax (110.4) 50.5  
Comprehensive (loss) income $(129.2) $141.7  
 
See accompanying notes.

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ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(in millions, except number of shares and per share amounts)
(Unaudited)
 
 Common
Shares
Additional
Paid-In
Capital
Treasury
Shares
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Shareholders'
Equity
Balance, December 31, 2018$45.3  $1,372.0  $(455.1) $862.6  $(78.1) $1,746.7  
Net income—  —  —  91.2  —  91.2  
Other comprehensive income - Change in fair value of fixed maturities, net of tax
—  —  —  —  50.3  50.3  
Other comprehensive income, net - Other
—  —  —  —  0.2  0.2  
Activity under stock incentive plans
0.1  4.1  —  —  —  4.2  
Retirement of common shares (tax payments on equity compensation)
  (1.6) —  —  —  (1.6) 
Employee stock purchase plan
—  0.4  —  —  —  0.4  
Cash dividend declared - common shares ($0.31/share)
—  —  —  (10.8) —  (10.8) 
Balance, March 31, 2019$45.4  $1,374.9  $(455.1) $943.0  $(27.6) $1,880.6  
Balance, December 31, 2019$45.7  $1,376.6  $(455.1) $811.1  $2.8  $1,781.1  
Net loss—  —  —  (18.8) —  (18.8) 
Other comprehensive loss - Change in fair value of fixed maturities, net of taxes
—  —  —  —  (107.0) (107.0) 
Other comprehensive loss, net - Other
—  —  —  —  (3.4) (3.4) 
Activity under stock incentive plans
0.3  2.8  —  —  —  3.1  
Retirement of common shares (tax payments on equity compensation)
(0.1) (5.7) —  —  —  (5.8) 
Employee stock purchase plan
—  0.5  —  —  —  0.5  
Cash dividend declared - common shares ($0.31/share)
—  —  —  (10.7) —  (10.7) 
Cumulative effect of adoption of ASU 2016-13, net of taxes
—  —  —  (7.9) 5.7  (2.2) 
Balance, March 31, 2020$45.9  $1,374.2  $(455.1) $773.7  $(101.9) $1,636.8  

See accompanying notes.

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ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(Unaudited)
  
 For the Three Months Ended March 31,
 20202019
Cash flows from operating activities:  
Net (loss) income$(18.8) $91.2  
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Amortization and depreciation5.0  6.7  
Share-based payments expense2.9  4.6  
Deferred income tax (benefit) provision, net(19.8) 5.3  
Net realized investment loss (gains)36.1  (52.5) 
Undistributed earnings from alternative investment portfolio(2.5) (1.9) 
Loss on disposals of long-lived assets, net0.2    
Change in:
Accrued investment income2.5  (0.3) 
Receivables217.6  1.8  
Deferred acquisition costs1.1  (0.5) 
Ceded unearned premiums(111.5) (104.9) 
Reserves for losses and loss adjustment expenses(78.8) 15.2  
Unearned premiums59.2  43.9  
Ceded reinsurance payable and funds held(96.0) 75.8  
Income taxes 16.3  3.2  
Accrued underwriting expenses and other liabilities(30.2) 6.7  
Other, net(14.7) (38.7) 
Cash (used in) provided by operating activities(31.4) 55.6  
Cash flows from investing activities:
Sales of fixed maturity investments594.1  235.5  
Maturities and mandatory calls of fixed maturity investments158.2  65.8  
Sales of equity securities24.8  15.0  
Sales of other investments19.2  22.0  
Purchases of fixed maturity investments(831.1) (358.9) 
Purchases of equity securities(12.2) (12.1) 
Purchases of other investments(5.9) (13.2) 
Change in foreign regulatory deposits and voluntary pools3.9  (0.3) 
Change in short-term investments112.3  38.3  
Settlements of foreign currency exchange forward contracts3.1  3.6  
Purchases of fixed assets(2.3) (7.3) 
Other, net(2.8) (20.1) 
Cash provided by (used in) investing activities61.3  (31.7) 
Cash flows from financing activities:
Activity under stock incentive plans 0.3  0.3  
Payment of cash dividends to common shareholders(10.7) (10.8) 
Cash used in financing activities(10.4) (10.5) 
Effect of exchange rate changes on cash1.4  0.1  
Change in cash 20.9  13.5  
Cash, beginning of year137.8  139.2  
Cash, end of period$158.7  $152.7  
 
See accompanying notes.
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ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
The accompanying consolidated financial statements of Argo Group International Holdings, Ltd. (“Argo Group,” “we” or the “Company”) and its subsidiaries have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Argo Group is an underwriter of specialty insurance and reinsurance products in the property and casualty market.
The preparation of interim financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. The major estimates reflected in our consolidated financial statements include, but are not limited to, reserves for losses and loss adjustment expenses; reinsurance recoverables, including the reinsurance recoverables allowance for expected credit losses; estimates of written and earned premiums; reinsurance premium receivable; fair value of investments and assessment of potential impairment, including the allowance for credit losses on fixed maturity securities; valuation of goodwill and intangibles and our deferred tax asset valuation allowance. Actual results could differ from those estimates. Certain financial information that normally is included in annual financial statements, including certain financial statement footnotes, prepared in accordance with GAAP, is not required for interim reporting purposes and has been condensed or omitted. These statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission ("SEC") on February 28, 2020.
The interim financial information as of, and for the three months ended, March 31, 2020 and 2019 is unaudited. However, in the opinion of management, the interim information includes all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the results presented for the interim periods. The operating results for the interim periods are not necessarily indicative of the results to be expected for the full year. All significant intercompany amounts have been eliminated in consolidation. Certain reclassifications have been made to financial information presented for prior years to conform to the current year’s presentation.
During the first quarters of 2020 and 2019, we incurred non-recurring costs associated with a number of activities that began with proxy solicitation efforts and shareholder engagement. For the three months ended March 31, 2019, these costs were $0.5 million and were previously included in the line item "Underwriting, Acquisition and Insurance Expenses" in the Consolidated Statements of Income in our Quarterly Report on Form 10-Q for the three-month period ended March 31, 2019. To conform to the current year's presentation, these amounts have been reclassified out of "Underwriting, Acquisition and Insurance Expenses" and into "Other Corporate Expenses" in the Consolidated Statements of (Loss) Income herein. Please see Note 12, "Underwriting, Acquisition and Insurance Expenses & Other Corporate Expenses" for further discussion.
Risks and Uncertainties
Certain risks and uncertainties are inherent to our day-to-day operations. Adverse changes in the economy could lower demand for our insurance products or negatively impact our investment results, both of which could have an adverse effect on the revenue and profitability of our operations. The global COVID-19 pandemic has resulted in and is expected to continue to result in significant disruptions in economic activity and financial markets. The cumulative effects of COVID-19 on the Company, and the effect of any other public health outbreak, cannot be predicted at this time, but could reduce demand for our insurance policies, result in increased level of losses, settlement expenses or other operating costs, reduce the market value of invested assets held by the Company or negatively impact the fair value of our goodwill.
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2. Recently Issued Accounting Pronouncements & Updates to Accounting Policies
Recently Issued Accounting Pronouncements
In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, “Measurement of Credit Losses on Financial Instruments” (Topic 326), commonly referred to as current expected credit losses or "CECL." ASU 2016-13 requires organizations to estimate credit losses on certain types of financial instruments, including receivables and available-for-sale debt securities, by introducing an approach based on expected losses. The expected loss approach will require entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. The updated guidance also amends the previous other-than-temporary impairment model for available-for-sale debt securities by requiring the recognition of impairments relating to credit losses through an allowance account and limits the amount of credit loss to the difference between a security’s amortized cost basis and its fair value. In addition, the length of time a security has been in an unrealized loss position will no longer impact the determination of whether a credit loss exists. The guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within the year of adoption. The guidance requires a modified retrospective transition method.
We adopted the updated guidance effective January 1, 2020 using the modified retrospective approach, which resulted in a $7.9 million net of tax reduction to retained earnings. Partially offsetting this reduction of retained earnings was a $5.7 million net of tax increase in other comprehensive income representing the reclassification of unrealized investment losses to credit losses under this accounting update. The cumulative effect adjustment decreased shareholders’ equity $2.2 million.
In January 2020, the FASB issued ASU 2020-01, "Investments — Equity Securities" (Topic 321), "Investments — Equity Method and Joint Ventures" (Topic 323), and "Derivatives and Hedging" (Topic 815). ASU 2020-01 clarifies that entities that apply the measurement alternative in ASC 321 should consider observable transactions that result in entities initially applying or discontinuing the use of the equity method of accounting under ASC 323. The guidance also says that certain forward contracts and purchased options on equity securities that are not deemed to be in-substance common stock under ASC 323 or accounted for as derivatives under ASC 815 are in the scope of ASC 321. The guidance is effective for public business entities ("PBEs") for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, with early adoption is permitted. The guidance should be applied prospectively. We are currently in the process of evaluating the impact that the adoption of the ASU will have on our financial results and disclosures, but it is not expected to have a material impact upon adoption.
In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform" (Topic 848). ASU 2020-04 provides temporary optional expedients and exceptions to the US GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate. Entities can elect not to apply certain modification accounting requirements to contracts affected by what the guidance calls reference rate reform, if certain criteria are met. An entity that makes this election would not have to remeasure the contracts at the modification date or reassess a previous accounting determination. Entities can elect various optional expedients for hedging relationships affected by reference rate reform, if certain criteria are met. The guidance is effective upon issuance and generally can be applied through December 31, 2022. We have certain debt agreements for which the interest rate is based on LIBOR rates. We are currently investigating the impacts of the transition from LIBOR to other rates on these contracts and the resulting accounting requirements, but do not expect the change in rates to have a material impact on our financial statements.
Updates to Accounting Policies
The following accounting policies have been updated to reflect the adoption of ASU 2016-13, as described above.
Investment Impairments of Available for Sale Fixed Maturities
We regularly review our investments to identify and evaluate those that may have credit impairments. For fixed maturity securities, the evaluation for credit losses is generally based on the present value of expected cash flows of the security as compared to the amortized book value, the financial condition, near-term and long-term prospects for the issuer, including industry conditions, implications of rating agency actions, the likelihood of principal and interest recoverability and whether it is more likely than not we will be required to sell the investment prior to the anticipated recovery in value.
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Effective January 1, 2020 with the adoption of ASU 2016-13 Financial Instruments-Credit Losses, we recognize credit losses on fixed maturities through an allowance account. For fixed maturities that we do not intend to sell or for which it is more likely than not we will not be required to sell prior to the anticipated recovery in value, we separate the credit component of the impairment from the component related to all other market factors and report the credit loss component to net realized investment gains (losses) in the Consolidated Statement of Income. The impairment related to all other market factors is reported as a separate component of shareholder’s equity in other comprehensive income (loss). The credit loss allowance account is adjusted for any additional credit losses or subsequent recoveries and the cost basis of the fixed maturity security is not adjusted.
For fixed maturity securities that we intend to sell or for which it is more likely that not that we will be required to sell before an anticipated recovery in value, the full amount of the impairment is recognized in net realized investment gains (losses) in the Consolidated Statement of Income and the cost basis of the fixed maturity security is adjusted to reflect the recognized realized loss. The new cost basis is not adjusted for any recoveries in fair value.
We report accrued investment income separately from fixed maturity securities and have elected to not measure an allowance for credit losses for accrued investment income. The write-off of investment income accrued for fixed maturities that have defaulted on interest payments is recognized as a loss in net realized investment gains (losses), in the period of the default, in the Consolidated Statement of Income.
Reinsurance Recoverables
Amounts recoverable from reinsurers are estimated in a manner consistent with the associated claim liability. We report our reinsurance recoverables net of an allowance for estimated uncollectible reinsurance. The allowance is based upon our ongoing review of amounts outstanding, length of collection periods, changes in reinsurer credit standing, disputes, applicable coverage defenses and other relevant factors. We use the rating-based method to estimate the uncollectible reinsurance reserves due to credit losses. Under this method, reinsurance credit risk is estimated by considering the reinsurers probability of default. Reinsurance recoverables are forecasted out of the assumed billing periods and a liquidation factor is applied based on the rating of the reinsurer and adjusted as needed based on our historical experience with the reinsurers. Additionally, reinsurance receivable balances are evaluated to identify any dispute risk and when required, an additional reserve is recorded. Amounts deemed to be uncollectible, including amounts due from known insolvent reinsurers, are written off against the allowance. Changes in the allowance, as well as any subsequent collections of amounts previously written off, are reported as part of underwriting expense. We evaluate and monitor the financial condition of its reinsurers under voluntary reinsurance arrangements to minimize its exposure to significant losses from reinsurer insolvencies.
Premiums and Unearned Premium Reserves
Premiums are recognized as revenues pro rata over the policy period. Unearned premium reserves represent the unexpired portion of policy premiums. Accrued retrospective premiums are included in premium balances receivable. Premiums receivable balances are reported net of an allowance for expected losses, both dispute and credit related. The allowance is based upon our ongoing review of amounts outstanding, historical loss data, including delinquencies and write-offs, current and forecasted economic conditions and other relevant factors. Credit risk is partially mitigated by our ability to cancel the policy if the policyholder does not pay the premium.
3. Investments
Included in “Total investments” in our Consolidated Balance Sheets at March 31, 2020 and December 31, 2019 is $120.9 million and $158.6 million, respectively, of assets managed on behalf of the trade capital providers, who are third-party participants that provide underwriting capital to the operations of Syndicates 1200 and 1910.
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Fixed Maturities
The amortized cost, gross unrealized gains, gross unrealized losses, allowance for credit losses, and fair value of fixed maturity investments were as follows:
March 31, 2020
(in millions)Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Allowance for Credit Losses(1)
Fair
Value
Fixed maturities
U.S. Governments$320.2  $18.5  $  $  $338.7  
Foreign Governments245.9  4.6  10.4  0.4  239.7  
Obligations of states and political subdivisions143.8  5.4  0.7    148.5  
Corporate bonds1,705.4  17.8  98.3  31.1  1,593.8  
Commercial mortgage-backed securities242.9  2.4  3.5    241.8  
Residential mortgage-backed securities534.0  18.8  6.4    546.4  
Asset-backed securities166.9  1.1  6.2  0.1  161.7  
Collateralized loan obligations275.3  0.4  22.8    252.9  
Total fixed maturities$3,634.4  $69.0  $148.3  $31.6  $3,523.5  
(1) Effective January 1, 2020 we adopted ASC-326 and as a result any credit impairment losses on our available-for-sale fixed maturities are recorded as an allowance, subject to reversal. Prior periods have not been restated to conform with the current year presentation. See Note 1.
December 31, 2019
(in millions)Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
Fixed maturities
U.S. Governments$353.5  $2.3  $1.2  $354.6  
Foreign Governments244.8  4.6  0.7  248.7  
Obligations of states and political subdivisions145.8  6.9  0.1  152.6  
Corporate bonds1,777.4  37.7  34.7  1,780.4  
Commercial mortgage-backed securities213.5  4.6  1.1  217.0  
Residential mortgage-backed securities479.1  10.4  0.6  488.9  
Asset-backed securities164.2  1.5  0.2  165.5  
Collateralized loan obligations226.7  0.5  1.4  225.8  
Total fixed maturities$3,605.0  $68.5  $40.0  $3,633.5  
Contractual Maturity
The amortized cost and fair values of fixed maturity investments as of March 31, 2020, by contractual maturity, were as follows:
(in millions)Amortized
Cost
Fair
Value
Due in one year or less$306.6  $301.6  
Due after one year through five years1,489.7  1,419.3  
Due after five years through ten years554.2  536.8  
Thereafter64.8  63.0  
Structured securities1,219.1  1,202.8  
Total$3,634.4  $3,523.5  
The expected maturities may differ from the contractual maturities because debtors may have the right to call or prepay obligations.
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Other Investments
Details regarding the carrying value and unfunded investment commitments of other investments as of March 31, 2020 and December 31, 2019 were as follows:
March 31, 2020
(in millions)Carrying
Value
Unfunded
Commitments
Investment Type