Fair Value (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Composition of Investment Portfolio by Major Security Type

The composition of the investment portfolio by major security type and our outstanding debt was:

	Fair Value
(millions)	Level 1		Level 2		Level 3		Total		Cost
September 30, 2019
Fixed maturities:
U.S. government obligations	$	13,678.7	$	0	$	0	$	13,678.7	$	13,387.6
State and local government obligations	0		1,683.7		0		1,683.7		1,652.2
Corporate debt securities	0		7,281.1		0		7,281.1		7,048.9
Subtotal	13,678.7		8,964.8		0		22,643.5		22,088.7
Asset-backed securities:
Residential mortgage-backed	0		681.5		0		681.5		677.5
Commercial mortgage-backed	0		4,639.0		0		4,639.0		4,547.9
Other asset-backed	0		4,621.9		0		4,621.9		4,601.0
Subtotal asset-backed securities	0		9,942.4		0		9,942.4		9,826.4
Redeemable preferred stocks:
Financials	0		51.7		0		51.7		51.7
Utilities	0		10.9		0		10.9		10.0
Industrials	11.2		153.0		0		164.2		158.1
Subtotal redeemable preferred stocks	11.2		215.6		0		226.8		219.8
Total fixed maturities	13,689.9		19,122.8		0		32,812.7		32,134.9
Short-term investments	1,464.9		2.5		0		1,467.4		1,467.4
Total available-for-sale securities	15,154.8		19,125.3		0		34,280.1		33,602.3
Equity securities:
Nonredeemable preferred stocks:
Financials	82.2		967.1		27.1		1,076.4		1,004.3
Utilities	0		42.1		0		42.1		39.9
Industrials	0		5.0		5.0		10.0		10.0
Subtotal nonredeemable preferred stocks	82.2		1,014.2		32.1		1,128.5		1,054.2
Common equities:
Common stocks	3,164.8		0		0		3,164.8		1,210.0
Other risk investments	0		0		0.3		0.3		0.3
Subtotal common equities	3,164.8		0		0.3		3,165.1		1,210.3
Total equity securities	3,247.0		1,014.2		32.4		4,293.6		2,264.5
Total portfolio	$	18,401.8	$	20,139.5	$	32.4	$	38,573.7	$	35,866.8
Debt	$	0	$	5,113.3	$	0	$	5,113.3	$	4,406.5

	Fair Value
(millions)	Level 1		Level 2		Level 3		Total		Cost
September 30, 2018
Fixed maturities:
U.S. government obligations	$	9,752.5	$	0	$	0	$	9,752.5	$	9,942.0
State and local government obligations	0		1,588.8		0		1,588.8		1,610.1
Corporate debt securities	0		7,146.8		0		7,146.8		7,229.1
Subtotal	9,752.5		8,735.6		0		18,488.1		18,781.2
Asset-backed securities:
Residential mortgage-backed	0		769.8		0		769.8		767.8
Commercial mortgage-backed	0		2,959.3		0		2,959.3		2,986.5
Other asset-backed	0		3,192.9		0		3,192.9		3,205.0
Subtotal asset-backed securities	0		6,922.0		0		6,922.0		6,959.3
Redeemable preferred stocks:
Financials	0		67.8		0		67.8		65.2
Utilities	0		4.7		0		4.7		4.8
Industrials	10.1		150.0		0		160.1		152.9
Subtotal redeemable preferred stocks	10.1		222.5		0		232.6		222.9
Total fixed maturities	9,762.6		15,880.1		0		25,642.7		25,963.4
Short-term investments	2,573.4		236.3		0		2,809.7		2,809.7
Total available-for-sale securities	12,336.0		16,116.4		0		28,452.4		28,773.1
Equity securities:
Nonredeemable preferred stocks:
Financials	76.3		724.0		0		800.3		718.9
Utilities	0		35.6		0		35.6		35.0
Industrials	0		0		5.0		5.0		5.0
Subtotal nonredeemable preferred stocks	76.3		759.6		5.0		840.9		758.9
Common equities:
Common stocks	3,057.0		0		0		3,057.0		1,134.7
Other risk investments	0		0		0.3		0.3		0.3
Subtotal common equities	3,057.0		0		0.3		3,057.3		1,135.0
Total equity securities	3,133.3		759.6		5.3		3,898.2		1,893.9
Total portfolio	$	15,469.3	$	16,876.0	$	5.3	$	32,350.6	$	30,667.0
Debt	$	0	$	3,926.9	$	0	$	3,926.9	$	3,859.9

	Fair Value
(millions)	Level 1		Level 2		Level 3		Total		Cost
December 31, 2018
Fixed maturities:
U.S. government obligations	$	9,916.5	$	0	$	0	$	9,916.5	$	9,897.4
State and local government obligations	0		1,649.1		0		1,649.1		1,654.6
Corporate debt securities	0		8,694.3		0		8,694.3		8,808.5
Subtotal	9,916.5		10,343.4		0		20,259.9		20,360.5
Asset-backed securities:
Residential mortgage-backed	0		734.4		0		734.4		733.5
Commercial mortgage-backed	0		3,301.6		0		3,301.6		3,332.8
Other asset-backed	0		3,577.3		0		3,577.3		3,585.4
Subtotal asset-backed securities	0		7,613.3		0		7,613.3		7,651.7
Redeemable preferred stocks:
Financials	0		78.2		0		78.2		79.3
Utilities	0		0		0		0		0
Industrials	9.5		150.6		0		160.1		164.4
Subtotal redeemable preferred stocks	9.5		228.8		0		238.3		243.7
Total fixed maturities	9,926.0		18,185.5		0		28,111.5		28,255.9
Short-term investments	1,722.1		73.8		0		1,795.9		1,795.9
Total available-for-sale securities	11,648.1		18,259.3		0		29,907.4		30,051.8
Equity securities:
Nonredeemable preferred stocks:
Financials	71.9		887.1		25.1		984.1		951.6
Utilities	0		44.8		0		44.8		46.0
Industrials	0		0		5.0		5.0		5.0
Subtotal nonredeemable preferred stocks	71.9		931.9		30.1		1,033.9		1,002.6
Common equities:
Common stocks	2,625.8		0		0		2,625.8		1,148.6
Other risk investments	0		0		0.3		0.3		0.3
Subtotal common equities	2,625.8		0		0.3		2,626.1		1,148.9
Total equity securities	2,697.7		931.9		30.4		3,660.0		2,151.5
Total portfolio	$	14,345.8	$	19,191.2	$	30.4	$	33,567.4	$	32,203.3
Debt	$	0	$	4,532.3	$	0	$	4,532.3	$	4,404.9

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

The following tables provide a summary of changes in fair value associated with Level 3 assets for the three and nine months ended September 30, 2019 and 2018:

	Level 3 Fair Value
(millions)	Fair Value at June 30, 2019		Calls/ Maturities/ Paydowns		Purchases		Sales		Net Realized (Gain)/Loss on Sales		Change in Valuation		Net Transfers In (Out)		Fair Value at September 30, 2019
Equity securities:
Nonredeemable preferred stocks:
Financials	$	27.1	$	0	$	0	$	0	$	0	$	0	$	0	$	27.1
Industrials	5.0		0		0		0		0		0		0		5.0
Common equities:
Other risk investments	0.3		0		0		0		0		0		0		0.3
Total Level 3 securities	$	32.4	$	0	$	0	$	0	$	0	$	0	$	0	$	32.4

	Level 3 Fair Value
(millions)	Fair Value at June 30, 2018		Calls/ Maturities/ Paydowns		Purchases		Sales		Net Realized (Gain)/Loss on Sales		Change in Valuation		Net Transfers In (Out)		Fair Value at September 30, 2018
Equity securities:
Nonredeemable preferred stocks:
Financials	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Industrials	5.0		0		0		0		0		0		0		5.0
Common equities:
Other risk investments	0.3		0		0		0		0		0		0		0.3
Total Level 3 securities	$	5.3	$	0	$	0	$	0	$	0	$	0	$	0	$	5.3

	Level 3 Fair Value
(millions)	Fair Value at December 31, 2018		Calls/ Maturities/ Paydowns		Purchases		Sales		Net Realized (Gain)/Loss on Sales		Change in Valuation		Net Transfers In (Out)		Fair Value at September 30, 2019
Equity securities:
Nonredeemable preferred stocks:
Financials	$	25.1	$	0	$	2.0	$	0	$	0	$	0	$	0	$	27.1
Industrials	5.0		0		0		0		0		0		0		5.0
Common equities:
Other risk investments	0.3		0		0		0		0		0		0		0.3
Total Level 3 securities	$	30.4	$	0	$	2.0	$	0	$	0	$	0	$	0	$	32.4

Fair Value Measurement Inputs and Valuation Techniques

The following tables provide a summary of the quantitative information about Level 3 fair value measurements for our applicable securities at September 30, 2019 and 2018, and December 31, 2018:

	Quantitative Information about Level 3 Fair Value Measurements
($ in millions)	Fair Value at September 30, 2019		Valuation Technique	Unobservable Input	Unobservable Input Assumption
Equity securities:
Nonredeemable preferred stocks:
Financials1	$	27.1	internal price	unadjusted purchase price per share	9.0
Industrials2	5.0		internal price	price-to-sales ratio	5.5
Subtotal Level 3 securities	32.1
Pricing exemption securities3	0.3
Total Level 3 securities	$	32.4

¹The security was internally priced since it is a private equity. The security was initially purchased during December 2018 and additional shares were purchased during second quarter 2019. The value at September 30, 2019 reflects the unadjusted purchase price per share (all purchases were at the same price).

² The security was internally priced since it is a private equity. The price at September 30, 2019, was calculated using a price-to-sales ratio.

³The unobservable input is not reasonably available to us.

	Quantitative Information about Level 3 Fair Value Measurements
($ in millions)	Fair Value at September 30, 2018		Valuation Technique	Unobservable Input	Unobservable Input Assumption
Equity securities:
Nonredeemable preferred stocks:
Financials	$	0	NA	NA	NA
Industrials1	5.0		internal price	unadjusted purchase price per share	3.9
Subtotal Level 3 securities	5.0
Pricing exemption securities2	0.3
Total Level 3 securities	$	5.3

NA= Not applicable

¹The security was internally priced since it is a private equity. The value at September 30, 2018 reflects the unadjusted purchase price per share.

²The unobservable input is not reasonably available to us.

	Quantitative Information about Level 3 Fair Value Measurements
($ in millions)	Fair Value at December 31, 2018		Valuation Technique	Unobservable Input	Unobservable Input Assumption
Equity securities:
Nonredeemable preferred stocks:
Financials1	$	25.1	internal price	unadjusted purchase price per share	9.0
Industrials2	5.0		internal price	price-to-sales ratio	5.5
Subtotal Level 3 securities	30.1
Pricing exemption securities3	0.3
Total Level 3 securities	$	30.4

¹The security was internally priced since it is a private equity. The security was purchased during December 2018 and the value at December 31, 2018 reflects the unadjusted purchase price per share.

² The security was internally priced since it is a private equity. The price at December 31, 2018, was calculated using a price-to-sales ratio.

³The unobservable input is not reasonably available to us.