Fair Value (Tables)

12 Months Ended

Dec. 31, 2019

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
December 31, 2019
Fixed maturities:
U.S. government obligations	$	13,251.1	$	0	$	0	$	13,251.1	$	13,100.7
State and local government obligations	0		1,713.3		0		1,713.3		1,686.0
Corporate debt securities	0		7,067.7		0		7,067.7		6,860.3
Subtotal	13,251.1		8,781.0		0		22,032.1		21,647.0
Asset-backed securities:
Residential mortgage-backed	0		627.5		0		627.5		625.0
Commercial mortgage-backed	0		5,076.2		0		5,076.2		5,020.7
Other asset-backed	0		5,179.5		0		5,179.5		5,164.7
Subtotal asset-backed securities	0		10,883.2		0		10,883.2		10,810.4
Redeemable preferred stocks:
Financials	0		51.7		0		51.7		51.5
Utilities	0		11.1		0		11.1		10.0
Industrials	11.1		121.1		0		132.2		124.2
Subtotal redeemable preferred stocks	11.1		183.9		0		195.0		185.7
Total fixed maturities	13,262.2		19,848.1		0		33,110.3		32,643.1
Short-term investments	1,797.4		1.4		0		1,798.8		1,798.8
Total available-for-sale securities	15,059.6		19,849.5		0		34,909.1		34,441.9
Equity securities:
Nonredeemable preferred stocks:
Financials	77.4		850.7		27.1		955.2		891.3
Utilities	0		42.3		0		42.3		39.9
Industrials	0		25.4		16.0		41.4		40.1
Subtotal nonredeemable preferred stocks	77.4		918.4		43.1		1,038.9		971.3
Common equities:
Common stocks	3,306.0		0		0		3,306.0		1,125.2
Other risk investments	0		0		0.3		0.3		0.3
Subtotal common equities	3,306.0		0		0.3		3,306.3		1,125.5
Total equity securities	3,383.4		918.4		43.4		4,345.2		2,096.8
Total portfolio	$	18,443.0	$	20,767.9	$	43.4	$	39,254.3	$	36,538.7
Debt	$	0	$	5,119.6	$	0	$	5,119.6	$	4,407.1



	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 fixed maturities and short-term	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 available-for-sale 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

Summary of Changes in Fair Value Associated With Level 3 Assets

The following tables provide a summary of changes in fair value associated with Level 3 assets for the years ended December 31, 2019 and 2018:



	Level 3 Fair Value
(millions)	Fair Value at Dec. 31, 2018		Calls/ Maturities/ Paydowns		Purchases		Sales		Net Realized (Gain)/Loss on Sales		Change in Valuation		Net Transfers In (Out)		Fair Value at Dec. 31, 2019
Equity securities:
Nonredeemable preferred stocks:
Financials	$	25.1	$	0	$	2.0	$	0	$	0	$	0	$	0	$	27.1
Industrials	5.0		0		10.0		0		0		1.0		0		16.0
Common equities:
Other risk investments	0.3		0		0		0		0		0		0		0.3
Total Level 3 securities	$	30.4	$	0	$	12.0	$	0	$	0	$	1.0	$	0	$	43.4



	Level 3 Fair Value
(millions)	Fair Value at Dec. 31, 2017		Calls/ Maturities/ Paydowns		Purchases		Sales		Net Realized (Gain)/Loss on Sales		Change in Valuation		Net Transfers In (Out)		Fair Value at Dec. 31, 2018
Equity securities:
Nonredeemable preferred stocks:
Financials	$	0	$	0	$	25.1	$	0	$	0	$	0	$	0	$	25.1
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	$	5.3	$	0	$	25.1	$	0	$	0	$	0	$	0	$	30.4

Summary of Quantitative Information about Level 3 Fair Value Measurements

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



	Quantitative Information about Level 3 Fair Value Measurements
($ in millions)	Fair Value at Dec. 31, 2019		Valuation Technique	Unobservable Input	Unobservable Input Assumption
Equity securities:
Nonredeemable preferred stocks:
Financials	$	27.1	Pricing firm	Recent transaction price	9.0
Industrials	6.0		Pricing firm	Performance-based transaction price adjustment	4.8
Industrials¹	10.0		Internal price	Unadjusted purchase price	4.9
Subtotal Level 3 securities	43.1
Pricing exemption securities	0.3
Total Level 3 securities	$	43.4

¹The security was purchased in November 2019.



	Quantitative Information about Level 3 Fair Value Measurements
($ in millions)	Fair Value at Dec. 31, 2018		Valuation Technique	Unobservable Input	Unobservable Input Assumption
Equity securities:
Nonredeemable preferred stocks:
Financials¹	$	25.1	Internal price	Unadjusted purchase price	9.0
Industrials	5.0		Internal price	Price-to-sales ratio	5.5
Subtotal Level 3 securities	30.1
Pricing exemption securities	0.3
Total Level 3 securities	$	30.4

¹The security was purchased in December 2018.