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Investments (Tables)

3 Months Ended

Mar. 31, 2019

Investments, Debt and Equity Securities [Abstract]

Amortized Cost and Fair Values of Securities by Security Type

At March 31, 2019 and December 31, 2018, all fixed maturity securities were classified as available-for-sale. The amortized cost and fair values of securities by security type are shown as follows:



	March 31, 2019
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss		Fair Value
	(in millions of dollars)
United States Government and Government Agencies and Authorities	$	1,714.2	$	135.6	$	4.0	$	1,845.8
States, Municipalities, and Political Subdivisions	2,151.0		389.7		0.3		2,540.4
Foreign Governments	822.1		188.6		3.0		1,007.7
Public Utilities	6,451.6		1,027.4		24.5		7,454.5
Mortgage/Asset-Backed Securities	1,473.6		84.5		2.0		1,556.1
All Other Corporate Bonds	27,822.7		2,753.2		238.0		30,337.9
Redeemable Preferred Stocks	39.0		1.2		—		40.2
Total Fixed Maturity Securities	$	40,474.2	$	4,580.2	$	271.8	$	44,782.6



	December 31, 2018
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss		Fair Value
	(in millions of dollars)
United States Government and Government Agencies and Authorities	$	1,702.1	$	123.2	$	10.9	$	1,814.4
States, Municipalities, and Political Subdivisions	2,121.5		307.1		4.4		2,424.2
Foreign Governments	825.8		162.7		4.8		983.7
Public Utilities	6,626.2		850.0		63.4		7,412.8
Mortgage/Asset-Backed Securities	1,523.8		67.2		8.3		1,582.7
All Other Corporate Bonds	27,436.8		1,981.6		664.4		28,754.0
Redeemable Preferred Stocks	39.0		1.1		0.2		39.9
Total Fixed Maturity Securities	$	40,275.2	$	3,492.9	$	756.4	$	43,011.7

Length of Time Fixed Maturity Securities had been in a Gross Unrealized Loss Position

The following charts indicate the length of time our fixed maturity securities have been in a gross unrealized loss position.



	March 31, 2019
	Less Than 12 Months				12 Months or Greater
	Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss
	(in millions of dollars)
United States Government and Government Agencies and Authorities	$	0.1	$	—	$	217.6	$	4.0
States, Municipalities, and Political Subdivisions	9.6		0.2		9.6		0.1
Foreign Governments	54.7		3.0		—		—
Public Utilities	101.0		1.9		400.1		22.6
Mortgage/Asset-Backed Securities	35.2		0.1		150.2		1.9
All Other Corporate Bonds	1,254.2		42.4		3,830.8		195.6
Total Fixed Maturity Securities	$	1,454.8	$	47.6	$	4,608.3	$	224.2



	December 31, 2018
	Less Than 12 Months				12 Months or Greater
	Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss
	(in millions of dollars)
United States Government and Government Agencies and Authorities	$	68.8	$	1.7	$	212.5	$	9.2
States, Municipalities, and Political Subdivisions	183.2		2.1		65.0		2.3
Foreign Governments	58.4		3.8		12.0		1.0
Public Utilities	740.1		31.3		325.7		32.1
Mortgage/Asset-Backed Securities	81.5		1.2		201.6		7.1
All Other Corporate Bonds	9,240.2		462.2		1,704.9		202.2
Redeemable Preferred Stocks	18.8		0.2		—		—
Total Fixed Maturity Securities	$	10,391.0	$	502.5	$	2,521.7	$	253.9

Distribution of the Maturity Dates for Fixed Maturity Securities

The following is a distribution of the maturity dates for fixed maturity securities. The maturity dates have not been adjusted for possible calls or prepayments.



	March 31, 2019
	Total Amortized Cost		Unrealized Gain Position				Unrealized Loss Position
	Total Amortized Cost		Gross Gain		Fair Value		Gross Loss		Fair Value
	(in millions of dollars)
1 year or less	$	1,039.7	$	15.1	$	972.8	$	9.1	$	72.9
Over 1 year through 5 years	6,433.0		387.7		6,244.3		49.6		526.8
Over 5 years through 10 years	12,907.5		1,095.3		11,243.1		80.8		2,678.9
Over 10 years	18,620.4		2,997.6		18,888.6		130.3		2,599.1
	39,000.6		4,495.7		37,348.8		269.8		5,877.7
Mortgage/Asset-Backed Securities	1,473.6		84.5		1,370.7		2.0		185.4
Total Fixed Maturity Securities	$	40,474.2	$	4,580.2	$	38,719.5	$	271.8	$	6,063.1



	December 31, 2018
	Total Amortized Cost		Unrealized Gain Position				Unrealized Loss Position
	Total Amortized Cost		Gross Gain		Fair Value		Gross Loss		Fair Value
	(in millions of dollars)
1 year or less	$	1,073.3	$	14.5	$	1,020.1	$	8.4	$	59.3
Over 1 year through 5 years	6,267.5		300.6		5,186.9		80.2		1,301.0
Over 5 years through 10 years	12,573.4		795.0		6,812.7		303.9		6,251.8
Over 10 years	18,837.2		2,315.6		15,779.7		355.6		5,017.5
	38,751.4		3,425.7		28,799.4		748.1		12,629.6
Mortgage/Asset-Backed Securities	1,523.8		67.2		1,299.6		8.3		283.1
Total Fixed Maturity Securities	$	40,275.2	$	3,492.9	$	30,099.0	$	756.4	$	12,912.7

Available for Sale Debt Securities by External Credit Rating

The following chart depicts an analysis of our fixed maturity security portfolio between investment-grade and below-investment-grade categories as of March 31, 2019:



					Gross Unrealized Loss
	Fair Value		Gross Unrealized Gain		Amount		Percent of Total Gross Unrealized Loss
	(in millions of dollars)
Investment-Grade	$	41,548.7	$	4,497.1	$	175.3	64.5	%
Below-Investment-Grade	3,233.9		83.1		96.5		35.5
Total Fixed Maturity Securities	$	44,782.6	$	4,580.2	$	271.8	100.0	%

Low Income Housing Tax Credits

The Company invests in tax credit partnerships primarily for the receipt of income tax credits and tax benefits derived from passive losses on the investments. Amounts recognized in the consolidated statements of income are as follows:



	Three Months Ended March 31
	2019			2018
	(in millions of dollars)
Income Tax Credits	$	9.4		$	10.4
Amortization, net of tax	(6.8		)	(7.0		)
Income Tax Benefit	$	2.6		$	3.4

Mortgage Loans by Property Type and Geographic Region

Mortgage loans by property type and geographic region are presented below.



	March 31, 2019				December 31, 2018
	(in millions of dollars)
	Carrying		Percent of		Carrying		Percent of
	Amount		Total		Amount		Total
Property Type
Apartment	$	471.4	21.4	%	$	491.0	21.4	%
Industrial	588.0		26.6		635.6		27.7
Office	585.0		26.5		604.2		26.3
Retail	517.8		23.5		519.5		22.6
Other	44.4		2.0		44.7		2.0
Total	$	2,206.6	100.0	%	$	2,295.0	100.0	%



Region
New England	$	45.0	2.0	%	$	45.9	2.0	%
Mid-Atlantic	159.4		7.2		160.6		7.0
East North Central	311.7		14.1		354.4		15.4
West North Central	188.7		8.6		190.3		8.3
South Atlantic	481.2		21.8		485.2		21.1
East South Central	100.5		4.6		105.5		4.6
West South Central	213.0		9.7		240.6		10.5
Mountain	254.1		11.5		242.7		10.6
Pacific	453.0		20.5		469.8		20.5
Total	$	2,206.6	100.0	%	$	2,295.0	100.0	%

Mortgage Loans by Credit Quality Indicators

Mortgage loans, sorted by the applicable credit quality indicators, are as follows:



	March 31, 2019		December 31, 2018
	(in millions of dollars)
Internal Rating
A	$	394.8	$	477.5
Baa	1,811.8		1,814.1
Ba	—		3.4
Total	$	2,206.6	$	2,295.0



Loan-to-Value Ratio
<= 65%	$	1,167.4	$	1,204.8
> 65% <= 75%	1,013.4		1,049.1
> 75% <= 85%	—		11.8
> 85%	25.8		29.3
Total	$	2,206.6	$	2,295.0

Allowance for Credit Losses on Financing Receivables

The activity in the allowance for credit losses is as follows:



	Three Months Ended March 31
	2019			2018
	(in millions of dollars)
Balance at Beginning of Year	$	0.2		$	—
Provision	0.1			—
Charge-offs, Net of Recoveries	(0.3		)	—
Balance at End of Period	$	—		$	—

Remaining Contractual Maturity of Securities Lending Agreements

The remaining contractual maturities of our securities lending agreements disaggregated by class of collateral pledged are as follows:



	March 31, 2019		December 31, 2018
	Overnight and Continuous
	(in millions of dollars)
All Other Corporate Bonds	$	—	$	0.1
Gross Amount of Recognized Liability for Securities Lending Transactions	—		0.1
Amounts Related to Agreements Not Included in Offsetting Disclosure Contained Herein	$	—	$	—

Federal Home Loan Bank Common Stock Carrying Amounts, Amounts Posted, and Advances Received

The carrying value of common stock owned, collateral posted, and advances received are as follows:



	March 31, 2019		December 31, 2018
	(in millions of dollars)
Carrying Value of FHLB Common Stock	$	19.1	$	24.1
Advances from FHLB	$	—	$	104.0
Carrying Value of Collateral Posted to FHLB
Fixed Maturity Securities	$	223.2	$	219.8
Commercial Mortgage Loans	178.4		179.9
Total Carrying Value of Collateral Posted to FHLB	$	401.6	$	399.7

Schedule of Financial Instrument and Derivative Offsetting

Shown below are our financial instruments that either meet the accounting requirements that allow them to be offset in our balance sheets or that are subject to an enforceable master netting arrangement or similar agreement. Our accounting policy is to not offset these financial instruments in our balance sheets. Net amounts disclosed below have been reduced by the amount of collateral pledged to or received from our counterparties.



	March 31, 2019
	Gross Amount						Gross Amount Not
	of Recognized		Gross Amount		Net Amount		Offset in Balance Sheet
	Financial		Offset in		Presented in		Financial			Cash			Net
	Instruments		Balance Sheet		Balance Sheet		Instruments			Collateral			Amount
	(in millions of dollars)
Financial Assets:
Derivatives	$	24.6	$	—	$	24.6	$	(4.8	)	$	(19.8	)	$	—
Securities Lending	137.6		—		137.6		(137.6		)	—			—
Total	$	162.2	$	—	$	162.2	$	(142.4	)	$	(19.8	)	$	—

Financial Liabilities:
Derivatives	$	35.7	$	—	$	35.7	$	(28.6	)	$	—		$	7.1
Total	$	35.7	$	—	$	35.7	$	(28.6	)	$	—		$	7.1



	December 31, 2018
	Gross Amount						Gross Amount Not
	of Recognized		Gross Amount		Net Amount		Offset in Balance Sheet
	Financial		Offset in		Presented in		Financial			Cash			Net
	Instruments		Balance Sheet		Balance Sheet		Instruments			Collateral			Amount
	(in millions of dollars)
Financial Assets:
Derivatives	$	30.9	$	—	$	30.9	$	(6.9	)	$	(24.0	)	$	—
Securities Lending	164.1		—		164.1		(164.0		)	(0.1		)	—
Total	$	195.0	$	—	$	195.0	$	(170.9	)	$	(24.1	)	$	—

Financial Liabilities:
Derivatives	$	38.0	$	—	$	38.0	$	(33.2	)	$	—		$	4.8
Securities Lending	0.1		—		0.1		(0.1		)	—			—
Total	$	38.1	$	—	$	38.1	$	(33.3	)	$	—		$	4.8

Net Investment Income

Net investment income reported in our consolidated statements of income is as follows:



	Three Months Ended March 31
	2019			2018
	(in millions of dollars)
Fixed Maturity Securities	$	544.9		$	557.1
Derivatives	17.9			15.4
Mortgage Loans	26.7			27.3
Policy Loans	4.7			4.4
Other Long-term Investments
Equity Securities¹	4.1			(0.2		)
Private Equity Partnerships²	2.2			5.6
Other	(0.5		)	2.1
Short-term Investments	7.0			3.6
Gross Investment Income	607.0			615.3
Less Investment Expenses	9.0			9.6
Less Investment Income on Participation Fund Account Assets	3.3			3.4
Net Investment Income	$	594.7		$	602.3

¹ The net unrealized gain (loss) recognized in net investment income for the first three months of 2019 and 2018 related to equity securities still held at the end of reporting period was $3.1 million and ($2.0) million, respectively.

² The net unrealized loss recognized in net investment income for the first three months of 2019 and 2018 related to private equity partnerships still held at the end of reporting period was $2.7 million and $1.6 million, respectively.

Realized Investment Gains and Losses Reported in Consolidated Statements of Income

Realized Investment Gain and Loss

Realized investment gains and losses are as follows:



	Three Months Ended March 31
	2019			2018
	(in millions of dollars)
Fixed Maturity Securities
Gross Gains on Sales	$	3.3		$	2.0
Gross Losses on Sales	(7.9		)	(1.4		)
Other-Than-Temporary Impairment Loss	—			(1.0		)
Mortgage Loans and Other Invested Assets
Gross Gains on Sales	0.9			—
Gross Losses on Sales	(0.1		)	—
Embedded Derivative in Modified Coinsurance Arrangement	5.5			(1.7		)
All Other Derivatives	0.3			0.7
Foreign Currency Transactions	(0.9		)	(0.8		)
Net Realized Investment Gain (Loss)	$	1.1		$	(2.2	)