Investments

3 Months Ended

Mar. 31, 2012

Investments [Abstract]

Investments

4. Investments

We evaluate our investment securities for other-than-temporary declines based on qualitative and quantitative factors. Other-than-temporary impairment losses recognized in income totaled $10.9 and $2.4 for the three months ended March 31,2012 and 2011, respectively. There were no individually significant other-than-temporary impairment losses on investments by issuer during the three months ended March 31,2012 and2011. We continue to review our investment portfolios under our impairment review policy. Given the current market conditions and the significant judgments involved, there is a continuing risk that further declines in fair value may occur and additional material other-than-temporary impairment losses on investments may be recorded in future periods.

The changes in the amount of the credit component of other-than-temporary impairment losses on fixed maturity securities recognized in income, for which a portion of the other-than-temporary impairment losses was recognized in other comprehensive income, was not material for thethree months ended March 31, 2012and 2011.

A summary of current and long-term investments, available-for-sale, at March 31, 2012 and December 31, 2011 is as follows:

													Non-Credit
													Component of
													Other-Than-
													Temporary
			Cost or		Gross		Gross Unrealized Losses						Impairments
			Amortized		Unrealized		Less than		Greater than		Estimated		Recognized in
			Cost		Gains		12 Months		12 Months		Fair Value		AOCI
March 31, 2012:
Fixed maturity securities:
	United States Government securities		$	547.7	$	21.8	$	(1.6)	$	-	$	567.9	$	-
	Government sponsored securities			116.4		1.9		(0.1)		-		118.2		-
	States, municipalities and political
		subdivisions - tax-exempt		4,930.1		341.2		(6.3)		(8.4)		5,256.6		-
	Corporate securities			7,082.7		333.8		(31.1)		(7.7)		7,377.7		(1.1)
	Options embedded in convertible debt
		securities		90.0		-		-		-		90.0		-
	Residential mortgage-backed
		securities		2,301.2		105.7		(2.1)		(6.9)		2,397.9		(0.4)
	Commercial mortgage-backed
		securities		364.6		19.0		(1.0)		(2.0)		380.6		-
	Other debt obligations			256.6		3.9		(1.3)		(6.3)		252.9		(1.3)
Total fixed maturity securities				15,689.3		827.3		(43.5)		(31.3)		16,441.8	$	(2.8)
Equity securities				897.8		363.0		(7.1)		-		1,253.7
Total investments, available-for-sale			$	16,587.1	$	1,190.3	$	(50.6)	$	(31.3)	$	17,695.5
December 31, 2011:
Fixed maturity securities:
	United States Government securities		$	564.9	$	39.9	$	(0.1)	$	-	$	604.7	$	-
	Government sponsored securities			173.1		2.5		-		-		175.6		-
	States, municipalities and political
		subdivisions - tax-exempt		4,994.2		352.3		(3.9)		(15.0)		5,327.6		(0.5)
	Corporate securities			6,588.0		305.3		(88.4)		(6.9)		6,798.0		(0.4)
	Options embedded in convertible debt
		securities		79.7		-		-		-		79.7		-
	Residential mortgage-backed
		securities		2,471.4		112.1		(7.6)		(10.9)		2,565.0		(6.2)
	Commercial mortgage-backed
		securities		363.2		14.9		(1.0)		(1.7)		375.4		-
	Other debt obligations			239.9		3.1		(2.0)		(7.1)		233.9		(3.2)
Total fixed maturity securities				15,474.4		830.1		(103.0)		(41.6)		16,159.9	$	(10.3)
Equity securities				966.1		277.0		(26.2)		-		1,216.9
Total investments, available-for-sale			$	16,440.5	$	1,107.1	$	(129.2)	$	(41.6)	$	17,376.8

At March 31, 2012, we owned $2,778.5 of mortgage-backed securities and $252.9 of asset-backed securities out of a total available-for-sale investment portfolio of $17,695.5. These securities included sub-prime and Alt-A securities with fair values of $54.0 and $157.5, respectively. These sub-prime and Alt-A securities had accumulated net unrealized lossesof $5.5 and $2.0, respectively. The average credit rating of the sub-prime and Alt-A securities was “BB” and “CCC”, respectively.

The following tables summarize for fixed maturity securities and equity securities in an unrealized loss position at March 31, 2012 and December 31, 2011, the aggregate fair value and gross unrealized loss by length of time those securities have been continuously in an unrealized loss position.

			12 Months or Less						Greater than 12 Months
							Gross						Gross
			Number of		Estimated		Unrealized		Number of		Estimated		Unrealized
			Securities		Fair Value		Loss		Securities		Fair Value		Loss
(Securities are whole amounts)
March 31, 2012:
Fixed maturity securities:
	United States Government securities			22	$	216.8	$	(1.6)		-	$	-	$	-
	Government sponsored securities			3		37.8		(0.1)		-		-		-
	States, municipalities and political
		subdivisions - tax-exempt		92		265.4		(6.3)		58		106.7		(8.4)
	Corporate securities			708		1,301.1		(31.1)		76		47.2		(7.7)
	Residential mortgage-backed securities			115		217.9		(2.1)		64		83.8		(6.9)
	Commercial mortgage-backed securities			15		23.2		(1.0)		7		13.6		(2.0)
	Other debt obligations			38		85.3		(1.3)		28		30.9		(6.3)
Total fixed maturity securities				993		2,147.5		(43.5)		233		282.2		(31.3)
Equity securities				794		87.6		(7.1)		-		-		-
Total fixed maturity and equity security				1,787	$	2,235.1	$	(50.6)		233	$	282.2	$	(31.3)
December 31, 2011:
Fixed maturity securities:
	United States Government securities			3	$	7.1	$	(0.1)		-	$	-	$	-
	States, municipalities and political
		subdivisions - tax-exempt		19		86.6		(3.9)		84		195.2		(15.0)
	Corporate securities			1,047		1,798.1		(88.4)		36		35.4		(6.9)
	Residential mortgage-backed securities			91		170.4		(7.6)		65		78.0		(10.9)
	Commercial mortgage-backed securities			14		27.7		(1.0)		5		15.6		(1.7)
	Other debt obligations			41		118.5		(2.0)		31		32.7		(7.1)
Total fixed maturity securities				1,215		2,208.4		(103.0)		221		356.9		(41.6)
Equity securities				1,137		271.6		(26.2)		-		-		-
Total fixed maturity and equity security				2,352	$	2,480.0	$	(129.2)		221	$	356.9	$	(41.6)

The amortized cost and fair value of fixed maturity securities at March 31, 2012, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties.

	Amortized		Estimated
	Cost		Fair Value
Due in one year or less	$	732.1	$	754.1
Due after one year through five years		4,617.5		4,821.3
Due after five years through ten years		4,447.9		4,712.8
Due after ten years		3,226.0		3,375.1
Mortgage-backed securities		2,665.8		2,778.5
Total available-for-sale fixed maturity securities	$	15,689.3	$	16,441.8

During the three months ended March 31, 2012, we sold $2,894.5 of fixed maturity and equity securities, which resulted in gross realized gains of $156.2 and gross realized losses of $49.3. In the ordinary course of business, we may sell securities at a loss for a number of reasons, including, but not limited to: (i) changes in the investment environment; (ii) expectation that the fair value could deteriorate further; (iii) desire to reduce exposure to an issuer or an industry; (iv) changes in credit quality; or (v) changes in expected cash flow.

All securities sold resulting in investment gains and losses are recorded on the trade date. Realized gains and losses are determined on the basis of the cost or amortized cost of the specific securities sold.