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Investments (Tables)
 12 Months Ended
Dec. 31, 2018
Investments Schedule [Abstract]  
Investment Portfolio by Major Security Type
The following tables present the composition of our investment portfolio by major security type, consistent with our classification of how we manage, monitor, and measure the portfolio. Our securities are reported in our Consolidated Balance Sheets at fair value. The changes in fair value for our fixed-maturity securities (other than hybrid securities) are reported as a component of accumulated other comprehensive income, net of deferred income taxes, in our Consolidated Balance Sheets.
The net holding period gains (losses) reported below represent the inception-to-date changes in fair value. The changes in the net holding period gains (losses) between periods for the hybrid securities and, beginning in 2018, equity securities are recorded as a component of net realized gains (losses) on securities in our Consolidated Statements of Comprehensive Income. Prior to 2018, the change in fair value of our equity securities was part of accumulated other comprehensive income (see Note 1 – Reporting and Accounting Policies for further discussion). For comparative purposes, the change in fair value of the hybrid securities that was recognized in 2017 and 2016 was reclassified out of "net realized gains (losses) on security sales" and into "net holding period gains (losses) on securities" to conform to the current year presentation.

($ in millions)
Cost

Gross Unrealized Gains

Gross Unrealized Losses

Net Holding Period Gains (Losses)

Fair Value

% of Total Fair Value

December 31, 2018
 
 
 
 
 
 
Available-for-sale securities:
 
 
 
 
 
 
Fixed maturities:
 
 
 
 
 
 
U.S. government obligations
$
9,897.4

$
71.2

$
(52.1
)
$
0

$
9,916.5

29.5
%
State and local government obligations
1,654.6

7.3

(12.8
)
0

1,649.1

4.9

Corporate debt securities
8,808.5

13.6

(125.3
)
(2.5
)
8,694.3

25.9

Residential mortgage-backed securities
733.5

6.0

(5.1
)
0

734.4

2.2

Commercial mortgage-backed securities
3,332.8

7.8

(39.0
)
0

3,301.6

9.8

Other asset-backed securities
3,585.4

3.6

(11.8
)
0.1

3,577.3

10.7

Redeemable preferred stocks
243.7

5.9

(3.5
)
(7.8
)
238.3

0.7

Total fixed maturities
28,255.9

115.4

(249.6
)
(10.2
)
28,111.5

83.7

Short-term investments
1,795.9

0

0

0

1,795.9

5.4

    Total available-for-sale securities
30,051.8

115.4

(249.6
)
(10.2
)
29,907.4

89.1

Equity securities:
 
 
 
 
 
 
Nonredeemable preferred stocks
1,002.6

0

0

31.3

1,033.9

3.1

Common equities
1,148.9

0

0

1,477.2

2,626.1

7.8

    Total equity securities
2,151.5

0

0

1,508.5

3,660.0

10.9

Total portfolio1,2
$
32,203.3

$
115.4

$
(249.6
)
$
1,498.3

$
33,567.4

100.0
%
($ in millions)
Cost

Gross Unrealized Gains

Gross Unrealized Losses

Net Holding Period Gains (Losses)

Fair Value

% of Total Fair Value

December 31, 2017
 
 
 
 
 
 
Fixed maturities:
 
 
 
 
 
 
U.S. government obligations
$
6,688.8

$
1.1

$
(44.0
)
$
0

$
6,645.9

24.4
%
State and local government obligations
2,285.6

20.7

(9.3
)
0.1

2,297.1

8.4

Corporate debt securities
4,997.2

14.8

(14.4
)
0.1

4,997.7

18.3

Residential mortgage-backed securities
828.8

11.3

(3.4
)
0

836.7

3.1

Commercial mortgage-backed securities
2,760.1

11.8

(13.3
)
0

2,758.6

10.1

Other asset-backed securities
2,454.5

4.5

(4.5
)
0.2

2,454.7

9.0

Redeemable preferred stocks
194.9

17.8

(1.5
)
(0.2
)
211.0

0.8

Total fixed maturities
20,209.9

82.0

(90.4
)
0.2

20,201.7

74.1

Short-term investments
2,869.4

0

0

0

2,869.4

10.5

    Total fixed maturities and short-term
23,079.3

82.0

(90.4
)
0.2

23,071.1

84.6

Equity securities:
 
 
 
 
 
 
Nonredeemable preferred stocks
698.6

114.0

(8.8
)
0

803.8

2.9

Common equities
1,499.0

1,901.0

(0.2
)
0

3,399.8

12.5

    Total equity securities
2,197.6

2,015.0

(9.0
)
0

4,203.6

15.4

Total available-for-sale portfolio1,2
$
25,276.9

$
2,097.0

$
(99.4
)
$
0.2

$
27,274.7

100.0
%


1 Our portfolio reflects the effect of unsettled security transactions; at December 31, 2018, $5.9 million was included in “other liabilities,” compared to $5.8 million in “other assets” at December 31, 2017.
2 The total fair value of the portfolio at December 31, 2018 and 2017 included $2.9 billion and $1.6 billion, respectively, of securities held in a consolidated, non-insurance subsidiary of the holding company, net of any unsettled security transactions.
Hybrid Securities
Included in our fixed maturities are hybrid securities, which are reported at fair value at December 31:
 
(millions)
2018

 
2017

Fixed Maturities:
 
 
 
State and local government obligations
$
3.6

 
$
6.1

Corporate debt securities
158.9

 
99.8

Other asset-backed securities
4.5

 
6.7

Redeemable preferred stocks
77.7

 
30.3

Total hybrid securities
$
244.7

 
$
142.9
Composition of Fixed Maturities by Maturity
 The composition of fixed maturities by maturity at December 31, 2018, was:
 
(millions)
Cost

 
Fair Value

Less than one year
$
4,880.1

 
$
4,867.0

One to five years
17,719.4

 
17,652.0

Five to ten years
5,581.3

 
5,517.5

Ten years or greater
75.1

 
75.0

Total
$
28,255.9

 
$
28,111.5
Gross Unrealized Losses by Major Security
The following tables show the composition of gross unrealized losses by major security type and by the length of time that individual securities have been in a continuous unrealized loss position:

 
Total No. of Sec.

Total
Fair
Value
Gross Unrealized Losses

Less than 12 Months
 
12 Months or Greater
($ in millions)
No. of Sec.

Fair
Value

Unrealized Losses

 
No. of Sec.

Fair
 Value

Unrealized Losses

December 31, 2018
 
 
 
 
 
 
 
 
 
 
Fixed maturities:
 
 
 
 
 
 
 
 
 
 
U.S. government obligations
51

$
4,438.0

$
(52.1
)
2

$
126.6

$
(0.1
)
 
49

$
4,311.4

$
(52.0
)
State and local government obligations
299

972.4

(12.8
)
49

192.7

(0.3
)
 
250

779.7

(12.5
)
Corporate debt securities
368

6,723.3

(125.3
)
133

2,613.3

(33.4
)
 
235

4,110.0

(91.9
)
Residential mortgage-backed securities
228

450.2

(5.1
)
32

248.8

(0.8
)
 
196

201.4

(4.3
)
Commercial mortgage-backed securities
140

2,328.5

(39.0
)
48

741.2

(8.9
)
 
92

1,587.3

(30.1
)
Other asset-backed securities
203

2,691.3

(11.8
)
84

1,551.7

(3.2
)
 
119

1,139.6

(8.6
)
Redeemable preferred stocks
3

48.5

(3.5
)
1

18.9

(0.6
)
 
2

29.6

(2.9
)
Total fixed maturities
1,292

$
17,652.2

$
(249.6
)
349

$
5,493.2

$
(47.3
)
 
943

$
12,159.0

$
(202.3
)
 
 
Total No. of Sec.

Total
Fair
Value

Gross
Unrealized
Losses

Less than 12 Months
 
12 Months or Greater
($ in millions)
No. of Sec.

Fair
Value

Unrealized
Losses

 
No. of Sec.

Fair
Value

Unrealized
Losses

December 31, 2017
 
 
 
 
 
 
 
 
 
 
Fixed maturities:
 
 
 
 
 
 
 
 
 
 
U.S. government obligations
58

$
5,817.0

$
(44.0
)
41

$
4,869.3

$
(34.6
)
 
17

$
947.7

$
(9.4
)
State and local government obligations
358

1,200.3

(9.3
)
230

737.6

(4.4
)
 
128

462.7

(4.9
)
Corporate debt securities
222

2,979.4

(14.4
)
171

2,072.9

(9.1
)
 
51

906.5

(5.3
)
Residential mortgage-backed securities
201

300.9

(3.4
)
30

75.1

(0.2
)
 
171

225.8

(3.2
)
Commercial mortgage-backed securities
105

1,682.3

(13.3
)
63

1,221.2

(5.9
)
 
42

461.1

(7.4
)
Other asset-backed securities
197

1,837.3

(4.5
)
134

1,377.8

(3.3
)
 
63

459.5

(1.2
)
Redeemable preferred stocks
2

21.8

(1.5
)
1

10.8

(0.1
)
 
1

11.0

(1.4
)
Total fixed maturities
1,143

13,839.0

(90.4
)
670

10,364.7

(57.6
)
 
473

3,474.3

(32.8
)
Equity securities:
 
 
 
 
 
 
 
 
 
 
Nonredeemable preferred stocks
4

127.8

(8.8
)
1

56.5

(0.5
)
 
3

71.3

(8.3
)
Common equities
19

13.4

(0.2
)
18

13.4

(0.2
)
 
1

0

0

Total equity securities
23

141.2

(9.0
)
19

69.9

(0.7
)
 
4

71.3

(8.3
)
Total portfolio
1,166

$
13,980.2

$
(99.4
)
689

$
10,434.6

$
(58.3
)
 
477

$
3,545.6

$
(41.1
)
Total Non-Credit Portion of Other-Than-Temporary Impairment Recorded in Accumulated Other Comprehensive Income, Reflecting Original Non-Credit Loss at the Time Credit Impairment
The following table shows the total non-credit portion of the OTTI recorded in accumulated other comprehensive income, reflecting the original non-credit loss at the time the credit impairment was determined (i.e., unadjusted for valuation changes subsequent to the original write-down):
 
 
December 31,
(millions)
2018

2017

Fixed maturities:
 
 
Residential mortgage-backed securities
$
(19.7
)
$
(19.7
)
Commercial mortgage-backed securities
(0.1
)
(0.3
)
Total fixed maturities
$
(19.8
)
$
(20.0
)
OTTI Credit Losses Recognized in Earnings
The following tables provide rollforwards of the amounts related to credit losses recognized in earnings for the periods ended December 31, 2018, 2017, and 2016, for which a portion of the OTTI losses were also recognized in accumulated other comprehensive income at the time the credit impairments were determined and recognized:
 
(millions)
Residential
Mortgage-
Backed

Commercial
Mortgage-
Backed

Total

Total at December 31, 2017
$
0

$
0.5

$
0.5

Credit losses for which an OTTI was not previously recognized
0

0

0

Reductions for securities sold/matured
0

0

0

Change in recoveries of future cash flows expected to be collected1
0

0

0

Total at December 31, 2018
$
0

$
0.5

$
0.5

(millions)
Residential
Mortgage-
Backed

Commercial
Mortgage-
Backed

Total

Total at December 31, 2016
$
11.1

$
0.4

$
11.5

Credit losses for which an OTTI was not previously recognized
0

0.4

0.4

Reductions for securities sold/matured
(10.9
)
(0.3
)
(11.2
)
Change in recoveries of future cash flows expected to be collected1
(0.2
)
0

(0.2
)
Total at December 31, 2017
$
0

$
0.5

$
0.5


(millions)
Residential
Mortgage-
Backed

Commercial
Mortgage-
Backed

Total

Total at December 31, 2015
$
12.4

$
0.4

$
12.8

Credit losses for which an OTTI was not previously recognized
0

0

0

Reductions for securities sold/matured
0

0

0

Change in recoveries of future cash flows expected to be collected1
(1.3
)
0

(1.3
)
Total at December 31, 2016
$
11.1

$
0.4

$
11.5

1 Reflects expected recovery of prior period impairments that will be accreted into income over the remaining life of the security.
Components of Net Realized Gains (Losses)
The components of net realized gains (losses) for the years ended December 31, were:

 
(millions)
2018

2017

2016

Gross realized gains on security sales
 
 
 
Available-for-sale securities:
 
 
 
U.S. government obligations
$
6.7

$
6.2

$
24.6

State and local government obligations
9.5

10.5

16.0

Corporate and other debt securities
2.4

20.3

43.3

Residential mortgage-backed securities
0

23.8

2.5

Commercial mortgage-backed securities
2.0

4.9

13.3

Other asset-backed securities
0.1

0.3

0

Redeemable preferred stocks
4.5

8.5

20.9

                  Short-term investments
0

0

0.1

Total available-for-sale securities
25.2

74.5

120.7

Equity securities:
 
 
 
Nonredeemable preferred stocks
4.1

58.4

11.9

Common equities
286.6

43.0

61.3

Total equity securities
290.7

101.4

73.2

Subtotal gross realized gains on security sales
315.9

175.9

193.9

Gross realized losses on security sales
 
 
 
Available-for-sale securities:
 
 
 
U.S. government obligations
(98.7
)
(28.7
)
(2.4
)
State and local government obligations
(2.9
)
(0.1
)
(1.6
)
Corporate and other debt securities
(10.4
)
(5.1
)
(2.5
)
Residential mortgage-backed securities
(0.1
)
(0.4
)
(0.2
)
Commercial mortgage-backed securities
(6.3
)
(5.3
)
(5.6
)
Other asset-backed securities
(1.1
)
(0.4
)
0

Redeemable preferred stocks
(0.1
)
(6.4
)
(6.6
)
                  Short-term investments
0

(0.2
)
(0.1
)
Total available-for-sale securities
(119.6
)
(46.6
)
(19.0
)
Equity securities:
 
 
 
Nonredeemable preferred stocks
(3.9
)
(5.9
)
(5.3
)
Common equities
(21.7
)
(12.2
)
(15.7
)
Total equity securities
(25.6
)
(18.1
)
(21.0
)
Subtotal gross realized losses on security sales
(145.2
)
(64.7
)
(40.0
)
Net realized gains (losses) on security sales
 
 
 
Available-for-sale securities:
 
 
 
U.S. government obligations
(92.0
)
(22.5
)
22.2

State and local government obligations
6.6

10.4

14.4

Corporate and other debt securities
(8.0
)
15.2

40.8

Residential mortgage-backed securities
(0.1
)
23.4

2.3

Commercial mortgage-backed securities
(4.3
)
(0.4
)
7.7

Other asset-backed securities
(1.0
)
(0.1
)
0

Redeemable preferred stocks
4.4

2.1

14.3

                  Short-term investments
0

(0.2
)
0

Total available-for-sale securities
(94.4
)
27.9

101.7

Equity securities:
 
 
 
Nonredeemable preferred stocks
0.2

52.5

6.6

Common equities
264.9

30.8

45.6

Total equity securities
265.1

83.3

52.2

Litigation settlements and other gains (losses)
0

1.2

0.4

Subtotal net realized gains (losses) on security sales
170.7

112.4

154.3

Net holding period gains (losses)
 
 
 
Hybrid securities
(10.4
)
(1.6
)
2.1

Equity securities
(497.5
)
0

0

Derivatives
0

0

(20.0
)
Subtotal net holding period gains (losses)
(507.9
)
(1.6
)
(17.9
)
Other-than-temporary impairment losses
 
 
 
Fixed maturities:
 
 
 
Commercial mortgage-backed securities
0

(0.4
)
0

Redeemable preferred stocks
0

0

(25.3
)
Total fixed maturities
0

(0.4
)
(25.3
)
Equity securities:
 
 
 
Common equities
0

(11.2
)
(0.3
)
Subtotal investment other-than-temporary impairment losses
0

(11.6
)
(25.6
)
Other asset impairment
(68.3
)
(49.6
)
(59.7
)
Subtotal other-than-temporary impairment losses
(68.3
)
(61.2
)
(85.3
)
Total net realized gains (losses) on securities
$
(405.5
)
$
49.6

$
51.1
Components of Equity Realized Gains (Losses)
The following table reflects our holding period realized gains (losses) on equity securities recognized for the year ended December 31, 2018 for equity securities held at year end:
(millions)
2018

Total net gains (losses) recognized during the period on equity securities
$
(232.4
)
Less: Net gains (losses) recognized on equity securities sold during the period
265.1

Net holding period gains (losses) recognized during the period on equity securities held at period end
$
(497.5
)
Note: Comparative disclosure for the prior year period is not meaningful.
Components of Net Investment Income
The components of net investment income for the years ended December 31, were:
 
(millions)
2018

2017

2016

Available-for-sale securities:
 
 
 
Fixed maturities:
 
 
 
U.S. government obligations
$
196.8

$
72.7

$
18.2

State and local government obligations
37.7

51.5

52.3

Foreign government obligations
0

0.3

0.4

Corporate debt securities
217.9

125.2

110.7

Residential mortgage-backed securities
27.6

34.7

47.3

Commercial mortgage-backed securities
93.9

79.6

81.6

Other asset-backed securities
75.7

47.1

28.0

Redeemable preferred stocks
12.3

11.8

14.9

Total fixed maturities
661.9

422.9

353.4

Short-term investments
52.9

37.8

19.7

    Total available-for-sale securities
714.8

460.7

373.1

Equity securities:
 
 
 
Nonredeemable preferred stocks
45.9

44.1

48.6

Common equities
59.8

58.3

57.2

    Total equity securities
105.7

102.4

105.8

Investment income
820.5

563.1

478.9

Investment expenses
(24.3
)
(23.9
)
(22.4
)
Net investment income
$
796.2

$
539.2

$
456.5