Investments:

The Company may classify its invested assets in terms of those assets relative to which it either (1) has the positive intent and ability to hold until maturity, (2) has available for sale or (3) has the intention of trading. As of June 30, 2012 and December 31, 2011, substantially all the Company's invested assets were classified as "available for sale."

Fixed maturity securities classified as "available for sale" and other preferred and common stocks (equity securities) are included at fair value with changes in such values, net of deferred income taxes, reflected directly in shareholders' equity. Fair values for fixed maturity securities and equity securities are based on quoted market prices or estimates using values obtained from independent pricing services as applicable.

The Company reviews the status and fair value changes of each of its investments on at least a quarterly basis during the year, and estimates of other-than-temporary impairments ("OTTI") in the portfolio's value are evaluated and established at each quarterly balance sheet date. In reviewing investments for OTTI, the Company, in addition to a security's market price history, considers the totality of such factors as the issuer's operating results, financial condition and liquidity, its ability to access capital markets, credit rating trends, most current audit opinion, industry and securities markets conditions, and analyst expectations to reach its conclusions. Sudden fair value declines caused by such adverse developments as newly emerged or imminent bankruptcy filings, issuer default on significant obligations, or reports of financial accounting developments that bring into question the validity of previously reported earnings or financial condition, are recognized as realized losses as soon as credible publicly available information emerges to confirm such developments. Absent issuer-specific circumstances that would result in a contrary conclusion, any equity security with an unrealized investment loss amounting to a 20% or greater decline for a six month period is considered OTTI. In the event the Company's estimate of OTTI is insufficient at any point in time, future periods' net income (loss) would be adversely affected by the recognition of additional realized or impairment losses, but its financial position would not necessarily be affected adversely inasmuch as such losses, or a portion of them, could have been recognized previously as unrealized losses in shareholders' equity. The Company recognized no OTTI adjustments for the quarter and six months ended June 30, 2012, whereas, $8.0 was recognized in the quarter and six months ended June 30, 2011.

The amortized cost and estimated fair values by type and contractual maturity of fixed maturity securities are shown in the following tables. Expected maturities will differ from contractual maturities since borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Fixed Maturity Securities by Type:
June 30, 2012:
U.S. & Canadian Governments	$	1,042.0	$	72.2	$	.1	$	1,114.1
Tax-exempt	498.9		17.6		—		516.5
Corporate	6,296.8		463.4		3.8		6,756.4
	$	7,837.8	$	553.4	$	4.0	$	8,387.1
December 31, 2011:
U.S. & Canadian Governments	$	1,104.0	$	78.3	$	.1	$	1,182.1
Tax-exempt	597.1		23.4		—		620.5
Corporate	6,183.5		414.1		7.0		6,590.5
	$	7,884.6	$	515.9	$	7.2	$	8,393.2



	Amortized Cost		Estimated Fair Value
Fixed Maturity Securities Stratified by Contractual Maturity at June 30, 2012:
Due in one year or less	$	1,030.0	$	1,046.9
Due after one year through five years	3,405.9		3,599.4
Due after five years through ten years	3,169.2		3,492.3
Due after ten years	232.5		248.5
	$	7,837.8	$	8,387.1

A summary of the Company's equity securities reflecting reported adjusted cost, net of OTTI adjustments totaling $138.5 at June 30, 2012 and December 31, 2011 follows:



	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Equity Securities:
June 30, 2012	$	341.4	$	286.2	$	—	$	627.7
December 31, 2011	$	341.9	$	243.5	$	4.6	$	580.8

The following table reflects the Company's gross unrealized losses and fair value, aggregated by category and length of time that individual securities have been in an unrealized loss position. Fair value and issuer's cost comparisons follow:



	12 Months or Less				Greater than 12 Months				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
June 30, 2012:
Fixed Maturity Securities:
U.S. & Canadian Governments	$	32.4	$	.1	$	—	$	—	$	32.4	$	.1
Tax-exempt	2.4		—		—		—		2.4		—
Corporate	269.4		2.5		12.3		1.3		281.8		3.8
Subtotal	304.3		2.6		12.3		1.3		316.7		4.0
Equity Securities	4.5		—		—		—		4.5		—
Total	$	308.9	$	2.7	$	12.3	$	1.3	$	321.2	$	4.0

December 31, 2011:
Fixed Maturity Securities:
U.S. & Canadian Governments	$	35.5	$	.1	$	—	$	—	$	35.5	$	.1
Tax-exempt	2.1		—		.6		—		2.7		—
Corporate	402.9		6.7		1.7		.2		404.7		7.0
Subtotal	440.6		7.0		2.3		.2		443.0		7.2
Equity Securities	98.4		4.5		—		—		98.5		4.6
Total	$	539.1	$	11.5	$	2.4	$	.3	$	541.5	$	11.9

At June 30, 2012, the Company held 95 fixed maturity and 3 equity securities in an unrealized loss position, representing 5.2% as to fixed maturities and 7.1% as to equity securities of the total number of such issues it held. At December 31, 2011, the Company held 131 fixed maturity and 6 equity securities in an unrealized loss position, representing 7.1% as to fixed maturities and 14.3% as to equity securities of the total number of such issues it held. Of the securities in an unrealized loss position, 5 and 4 fixed maturity securities and 1 and 1 equity securities, had been in a continuous unrealized loss position for more than 12 months as of June 30, 2012 and December 31, 2011, respectively. The unrealized losses on these securities are primarily attributable to a post-purchase rising interest rate environment and/or a decline in the credit quality of some issuers. As part of its assessment of other-than-temporary impairments, the Company considers its intent to continue to hold and the likelihood that it will not be required to sell investment securities in an unrealized loss position until cost recovery, principally on the basis of its asset and liability maturity matching procedures.

Fair Value Measurements - Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants (an exit price) at the measurement date. A fair value hierarchy is established that prioritizes the sources ("inputs") used to measure fair value into three broad levels: inputs based on quoted market prices in active markets (Level 1); observable inputs based on corroboration with available market data (Level 2); and unobservable inputs based on uncorroborated market data or a reporting entity's own assumptions (Level 3). Following is a description of the valuation methodologies and general classification used for financial instruments measured at fair value.

The Company uses quoted values and other data provided by a nationally recognized independent pricing source as inputs into its quarterly process for determining fair values of its fixed maturity and equity securities. To validate the techniques or models used by pricing sources, the Company's review process includes, but is not limited to: (i) initial and ongoing evaluation of methodologies used by outside parties to calculate fair value; and (ii) comparing the fair value estimates to its knowledge of the current market and to independent fair value estimates provided by the investment custodian. The independent pricing source obtains market quotations and actual transaction prices for securities that have quoted prices in active markets and uses its own proprietary method for determining the fair value of securities that are not actively traded. In general, these methods involve the use of "matrix pricing" in which the independent pricing source uses observable market inputs including, but not limited to, investment yields, credit risks and spreads, benchmarking of like securities, broker-dealer quotes, reported trades and sector groupings to determine a reasonable fair value.

Level 1 securities include U.S. and Canadian Treasury notes, publicly traded common stocks, the quoted net asset value ("NAV") mutual funds, and most short-term investments in highly liquid money market instruments. Level 2 securities generally include corporate bonds, municipal bonds, and certain U.S. and Canadian government agency securities. Securities classified within Level 3 include non-publicly traded bonds, short-term investments, and common stocks. There were no significant changes in the fair value of assets measured with the use of significant unobservable inputs as of June 30, 2012 and December 31, 2011.

The following tables show a summary of assets measured at fair value segregated among the various input levels described above:



Fair value measurements as of June 30, 2012:	Level 1		Level 2		Level 3		Total
Available for sale:
Fixed maturity securities:
U.S. & Canadian Governments	$	393.2	$	720.8	$	—	$	1,114.1
Tax-exempt	—		516.5		—		516.5
Corporate	—		6,725.8		30.6		6,756.4
Equity securities	624.8		—		2.8		627.7
Short-term investments	$	1,203.5	$	—	$	5.0	$	1,208.5

Fair value measurements as of December 31, 2011:
Available for sale:
Fixed maturity securities:
U.S. & Canadian Governments	$	389.8	$	792.2	$	—	$	1,182.1
Tax-exempt	—		620.5		—		620.5
Corporate	—		6,560.0		30.5		6,590.5
Equity securities	579.0		—		1.8		580.8
Short-term investments	$	1,471.1	$	—	$	5.0	$	1,476.2

There were no transfers between Levels 1, 2 or 3 during the quarter ended June 30, 2012.

Investment income is reported net of allocated expenses and includes appropriate adjustments for amortization of premium and accretion of discount on fixed maturity securities acquired at other than par value. Dividends on equity securities are credited to income on the ex-dividend date. Realized investment gains and losses, which result from sales or write-downs of securities, are reflected as revenues in the income statement and are determined on the basis of amortized value at date of sale for fixed maturity securities, and cost in regard to equity securities; such bases apply to the specific securities sold. Unrealized investment gains and losses, net of any deferred income taxes, are recorded directly as a component of accumulated other comprehensive income in shareholders' equity. At June 30, 2012, the Company and its subsidiaries had no non-income producing fixed maturity securities.

The following table reflects the composition of net investment income, net realized gains or losses, and the net change in unrealized investment gains or losses for each of the periods shown.



	Quarters Ended						Six Months Ended
	June 30,						June 30,
	2012			2011			2012		2011
Investment income from:
Fixed maturity securities	$	81.9		$	90.6		$	164.8	$	179.7
Equity securities	2.6			2.5			5.1		4.9
Short-term investments	.4			.3			1.0		.8
Other sources	1.3			1.3			2.4		2.4
Gross investment income	86.4			94.9			173.4		188.0
Investment expenses (a)	1.3			1.7			2.5		3.3
Net investment income	$	85.0		$	93.1		$	170.9	$	184.6

Realized gains (losses) on:
Fixed maturity securities:
Gains	$	16.9		$	3.9		$	18.6	$	11.6
Losses	—			(.3		)	—		(1.4		)
Net	16.9			3.6			18.6		10.1

Equity securities & other long-term investments	5.0			(6.6		)	6.3		(6.6		)
Total	22.0			(2.9		)	24.9		3.5
Income taxes (credits)(b)	7.7			(1.0		)	8.7		1.2
Net realized gains (losses)	$	14.3		$	(1.9	)	$	16.2	$	2.2
Changes in unrealized investment gains (losses) on:
Fixed maturity securities	$	45.7		$	88.0		$	41.1	$	57.7
Less: Deferred income taxes (credits)	15.9			30.7			14.3		20.2
Net changes in unrealized investment gains (losses)	$	29.8		$	57.2		$	26.8	$	37.5

Equity securities & other long-term investments	$	(17.1	)	$	(38.5	)	$	44.9	$	(43.6	)
Less: Deferred income taxes (credits)	(5.9		)	(13.4		)	15.6		(15.3		)
Net changes in unrealized investment gains (losses)	$	(11.1	)	$	(25.0	)	$	29.2	$	(28.2	)

__________


(a)	Investment expenses consist of personnel costs and investment management and custody service fees, as well as interest incurred on funds held of $.5 for both quarters ended June 30, 2012 and 2011, and $1.0 and $.9 for the six months ended June 30, 2012 and 2011, respectively.


(b)	Reflects primarily the combination of fully taxable realized investment gains or losses and judgments about the recoverability of deferred tax assets.