Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2026

Schedule of Company's Fair Value Hierarchy Measured at Recurring Basis

The following table presents the Company's fair value hierarchy for financial assets and financial liabilities measured and carried at fair value on a recurring basis. During the three months ended March 31, 2026 and 2025, there were no transfers between Level 1 and Level 2. As of March 31, 2026, Level 3 invested assets comprised 7.9% of the Company’s total investment portfolio at fair value.


($ in millions)	Carrying Amount		Fair Value		Fair Value Measurements at Reporting Date Using
					Level 1		Level 2		Level 3
March 31, 2026
Financial Assets
Investments
Fixed maturity securities
U.S. Government and federally sponsored agency obligations:
Mortgage-backed securities	$	669.1	$	669.1	$	—	$	669.1	$	—
Other, including U.S. Treasury securities	312.9		312.9		38.2		274.7		—
Municipal bonds	1,171.2		1,171.2		—		1,086.0		85.2
Foreign government bonds	7.9		7.9		—		7.9		—
Corporate bonds	1,953.5		1,953.5		5.4		1,611.5		336.6
Other asset-backed securities	1,665.5		1,665.5		—		1,623.8		41.7
Total fixed maturity securities	5,780.1		5,780.1		43.6		5,273.0		463.5
Equity securities	40.6		40.6		1.3		35.7		3.6

Short-term investments	77.2		77.2		77.2		—		—
Other investments	16.7		16.7		—		16.7		—
Totals	$	5,914.6	$	5,914.6	$	122.1	$	5,325.4	$	467.1
Separate Account variable annuity assets(1)	$	3,959.1	$	3,959.1	$	3,959.1	$	—	$	—

Financial Liabilities(2)	$	77.1	$	77.1	$	—	$	5.1	$	72.0

December 31, 2025
Financial Assets
Investments
Fixed maturity securities
U.S. Government and federally sponsored agency obligations:
Mortgage-backed securities	$	689.0	$	689.0	$	—	$	689.0	$	—
Other, including U.S. Treasury securities	325.8		325.8		40.8		285.0		—
Municipal bonds	1,177.1		1,177.1		—		1,098.7		78.4
Foreign government bonds	10.0		10.0		—		10.0		—
Corporate bonds	1,910.3		1,910.3		4.9		1,562.8		342.6
Other asset-backed securities	1,602.4		1,602.4		—		1,558.1		44.3
Total fixed maturity securities	5,714.6		5,714.6		45.7		5,203.6		465.3
Equity securities	41.9		41.9		1.3		36.8		3.8

Short-term investments	210.5		210.5		210.5		—		—
Other investments	21.6		21.6		—		21.6		—
Totals	$	5,988.6	$	5,988.6	$	257.5	$	5,262.0	$	469.1
Separate Account (variable annuity) assets(1)	$	4,157.4	$	4,157.4	$	4,157.4	$	—	$	—

Financial Liabilities(2)	$	78.9	$	78.9	$	—	$	5.8	$	73.1

(1) Separate Account variable annuity assets represent contractholder funds invested in various actively traded mutual funds that have daily quoted net asset values that are readily determinable for identical assets that the Company can access. Separate Account variable annuity liabilities are equal to the estimated fair value of the Separate Account variable annuity assets.

(2) Represents embedded derivatives related to fixed indexed annuity and indexed universal life products reported in Future policy benefit reserves and Other policyholder funds as well as net MRBs reported in Policyholders' account balances in the Company's Consolidated Balance Sheets.

Schedule of Table for Reconciliations for All Level 3 Assets Measured at Fair Value on a Recurring Basis

The reconciliation for all financial assets and financial liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) were as follows:


($ in millions)	Financial Assets												Financial Liabilities(1)
	Municipal Bonds		Corporate Bonds		Mortgage-Backed and Other Asset- Backed Securities(2)		Total Fixed Maturity Securities		Equity Securities & Limited Partnership Interests		Total
Beginning balance, January 1, 2026	$	78.4	$	342.6	$	44.3	$	465.3	$	3.8	$	469.1	$	73.1
Transfers into Level 3(3)	—		—		—		—		—		—		—
Transfers out of Level 3(3)	—		—		—		—		—		—		—
Total gains or losses
Net investment gains (losses) included in net income	—		—		0.5		0.5		(0.2)		0.3		—
Net investment (gains) losses included in net income related to financial liabilities	—		—		—		—		—		—		1.2
Net unrealized gains (losses) included in OCI	(0.2)		(2.1)		1.5		(0.8)				(0.8)		0.1
Purchases	9.1		10.2		—		19.3		—		19.3		—
Issuances	—		—		—		—		—		—		0.7
Sales	—		(9.8)		(0.8)		(10.6)		—		(10.6)		—
Settlements	—		—		—		—		—		—		—
Paydowns, maturities and distributions	(2.1)		(4.3)		(3.8)		(10.2)		—		(10.2)		(3.1)
Ending balance, March 31, 2026	$	85.2	$	336.6	$	41.7	$	463.5	$	3.6	$	467.1	$	72.0

Beginning balance, January 1, 2025	$	74.9	$	351.3	$	73.7	$	499.9	$	33.1	$	533.0	$	75.5
Transfers into Level 3(3)	—		—		—		—		—		—		—
Transfers out of Level 3(3)	—		—		—		—		—		—		—
Total gains or losses
Net investment gains (losses) included in net income	—		—		—		—		5.8		5.8		—
Net investment (gains) losses included in net income related to financial liabilities	—		—		—		—		—		—		1.9
Net unrealized gains (losses) included in OCI	1.3		(0.6)		(0.6)		0.1		—		0.1		0.2
Purchases	—		13.4		—		13.4		—		13.4		—
Issuances	—		—		—		—		—		—		1.4
Sales	—		(22.4)		(0.2)		(22.6)		—		(22.6)		—
Settlements	—		—		—		—		—		—		—
Paydowns, maturities and distributions	(0.1)		(0.8)		(5.8)		(6.7)		—		(6.7)		(4.7)
Ending balance, March 31, 2025	$	76.1	$	340.9	$	67.1	$	484.1	$	38.9	$	523.0	$	74.3

(1)Represents embedded derivatives related to fixed indexed annuity and indexed universal life products reported in Future policy benefit reserves and Other policyholder funds as well as net MRBs reported in Policyholders' account balances in the Company's Consolidated Balance Sheets.

(2)Includes U.S. Government and federally sponsored agency obligations for mortgage-backed securities and other asset-backed securities.

(3)Transfers into and out of Level 3 during the three months ended March 31, 2026 and 2025 were related to changes in the primary pricing source or changes in observability of external information used in determining fair value. The Company's policy is to recognize transfers into and out of the levels as having occurred at the end of the reporting period in which the transfers were determined.

Schedule of Fair Value Measurement Inputs and Valuation Techniques

The table below presents the balances of Level 3 assets and liabilities measured at fair value with their corresponding pricing sources:


($ in millions)
	Total		Internal		External
March 31, 2026
Financial Assets
Fixed maturity securities
U.S. Government and federally sponsored agency obligations:
Mortgage-backed securities	$	—	$	—	$	—
Municipal bonds	85.2		—		85.2
Corporate bonds	336.6		6.9		329.7
Other asset-backed securities	41.7		—		41.7
Total fixed maturity securities	463.5		6.9		456.6
Equity securities	3.6		2.6		1.0

Totals	467.1		9.5		457.6

Financial Liabilities(1)	72.0		72.0		—

December 31, 2025
Financial Assets
Fixed maturity securities
U.S. Government and federally sponsored agency obligations:
Mortgage-backed securities	—		—		—
Municipal bonds	78.4		—		78.4
Corporate bonds	342.6		6.7		335.9
Other asset-backed securities	44.3		—		44.3
Total fixed maturity securities	465.3		6.7		458.6
Equity securities	3.8		2.6		1.2

Totals	469.1		9.3		459.8

Financial Liabilities(1)	$	73.1	$	73.1	$	—

(1) Represents embedded derivatives related to fixed indexed annuity and indexed universal life products reported in Future policy benefit reserves and Other policyholder funds as well as net MRBs reported in Policyholders' account balances in the Company's Consolidated Balance Sheets.

The following table provides quantitative information about the significant unobservable inputs for recurring fair value measurements categorized with Level 3.

($ in millions)

Fair Value at

March 31, 2026

Valuation Technique(s)

Unobservable Inputs

Range

(Weighted Average)

and Single Point Best

Estimate(1)

Impact of Increase in Input on Fair Value

Financial Liabilities

Derivatives embedded in fixed indexed annuity products

78.2

discounted cash flow

lapse rate

7.5%

decrease

mortality multiplier(2)

71.0%

decrease

option budget

0.9% - 3.9%

increase

non-performance adjustment(3)

5.0%

decrease

Net MRBs

(6.2)

discounted cash flow

lapse rate

7.5%

decrease

mortality multiplier(2)

71.0%

increase

(1) When a range of unobservable inputs is not readily available, the Company uses a single point best estimate.

(2) Mortality multiplier is applied to the Annuity 2000 table.

(3) Determined as a percentage of the risk-free rate.

($ in millions)

Fair Value at
December 31, 2025

Valuation Techniques

Unobservable Inputs

Range

(Weighted Average)

and Single Point Best Estimate(1)

Impact of Increase in Input on Fair Value

Financial Liabilities

Derivatives embedded in fixed indexed annuity products

82.1

discounted cash flow

lapse rate

7.5%

decrease

mortality multiplier(2)

71.0%

decrease

option budget

0.9% - 3.9%

increase

non-performance adjustment(3)

5.0%

decrease

Net MRBs

(9.0)

discounted cash flow

lapse rate

7.5%

decrease

mortality multiplier(2)

71.0%

increase

(1) When a range of unobservable inputs is not readily available, the Company uses a single point best estimate.

(2) Mortality multiplier is applied to the Annuity 2000 table.

(3) Determined as a percentage of the risk-free rate.

The following table summarizes the ranges of actual experience and expected experience for mortality and lapses of LFPB:


	March 31, 2026
	Whole Life		Term Life	Experience Life		Limited-Pay Whole Life		Supplemental Health		SPIA (life contingent)
Mortality / Morbidity
Actual experience	0.8	%	0.1% - 0.4%	1.9	%	0.1	%	31.6	%	N.M.
Expected experience	0.8	%	0.1% - 0.5%	2.0	%	0.3	%	27.6	%	N.M.
Lapses
Actual experience	3.6	%	1.7% - 4.1%	4.1	%	4.8	%	10.6	%	N.M.
Expected experience	3.3	%	4.7% - 4.8%	3.2	%	3.6	%	10.3	%	N.M.

	March 31, 2025
	Whole Life		Term Life	Experience Life		Limited-Pay Whole Life		Supplemental Health		SPIA (life contingent)
Mortality / Morbidity
Actual experience	1.0	%	0.1% - 0.1%	2.3	%	0.4	%	41.9	%	N.M.
Expected experience	0.8	%	0.1% - 0.5%	1.9	%	0.3	%	26.8	%	N.M.
Lapses
Actual experience	3.1	%	2.6% - 3.8%	3.3	%	3.8	%	13.9	%	N.M.
Expected experience	3.7	%	5.0% - 5.1%	3.0	%	4.0	%	14.0	%	N.M.

Schedule of Fair Value Assets and Liabilities Measured on Nonrecurring Basis

The following table presents the carrying amount and fair value of the Company’s financial assets and financial liabilities not carried at fair value and the level within the fair value hierarchy at which such financial assets and liabilities are categorized.


($ in millions)	Carrying Amount		Fair Value		Fair Value Measurements at Reporting Date Using
					Level 1		Level 2		Level 3
March 31, 2026
Financial Assets
Other investments	$	227.8	$	230.9	$	—	$	38.2	$	192.7
Deposit asset on reinsurance	2,361.8		2,094.9		—		—		2,094.9
Financial Liabilities
Policyholders' account balances	4,978.5		4,640.3		—		—		4,640.3
Other policyholder funds	1,061.1		1,061.1		—		1,058.1		3.0
Long-term debt	593.8		619.8		—		619.8		—

December 31, 2025
Financial Assets
Other investments	$	215.5	$	218.7	$	—	$	39.3	$	179.4
Deposit asset on reinsurance	2,369.6		2,143.1		—		—		2,143.1
Financial Liabilities
Policyholders' account balances	4,984.9		4,791.1		—		—		4,791.1

Other policyholder funds	1,046.2		1,046.2		—		1,043.2		3.0
Long-term debt	593.4		629.1		—		629.1		—

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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