Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

The valuation of assets measured at fair value in Company’s Condensed Consolidated Balance Sheet at September 30, 2019 is summarized below.

	Fair Value Measurements
(Dollars in Millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Measured at Net Asset Value		Total Fair Value
Fixed Maturities:
U.S. Government and Government Agencies and Authorities	$	149.4	$	689.5	$	—	$	—	$	838.9
States and Political Subdivisions	—		1,543.2		1.9		—		1,545.1
Foreign Governments	—		14.4		—		—		14.4
Corporate Securities:
Bonds and Notes	—		3,481.9		425.2		—		3,907.1
Collateralized Loan Obligations	—		—		536.5		—		536.5
Other Mortgage- and Asset-backed	—		10.4		31.2		—		41.6
Total Investments in Fixed Maturities	149.4		5,739.4		994.8		—		6,883.6
Equity Securities at Fair Value:
Preferred Stocks:
Finance, Insurance and Real Estate	—		43.7		—		—		43.7
Other Industries	0.9		13.6		—		—		14.5
Common Stocks:
Finance, Insurance and Real Estate	12.3		—		—		—		12.3
Other Industries	0.3		0.3		—		—		0.6
Other Equity Interests:
Exchange Traded Funds	659.3		—		—		—		659.3
Limited Liability Companies and Limited Partnerships	—		—		—		198.3		198.3
Total Investments in Equity Securities at Fair Value	672.8		57.6		—		198.3		928.7
Convertible Securities at Fair Value	—		35.6		—		—		35.6
Total	$	822.2	$	5,832.6	$	994.8	$	198.3	$	7,847.9

The valuation of assets measured at fair value in the Company’s Consolidated Balance Sheet at December 31, 2018 is summarized below.

	Fair Value Measurements
(Dollars in Millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Measured at Net Asset Value		Total Fair Value
Fixed Maturities:
U.S. Government and Government Agencies and Authorities	$	156.5	$	709.2	$	—	$	—	$	865.7
States and Political Subdivisions	—		1,619.1		—		—		1,619.1
Foreign Governments	—		5.9		—		—		5.9
Corporate Securities:
Bonds and Notes	—		3,011.2		382.6		—		3,393.8
Collateralized Loan Obligations	—		19.1		504.9		—		524.0
Other Mortgage- and Asset-backed	—		5.8		9.9		—		15.7
Total Investments in Fixed Maturities	156.5		5,370.3		897.4		—		6,424.2
Equity Securities at Fair Value:
Preferred Stocks:
Finance, Insurance and Real Estate	—		41.2		—		—		41.2
Other Industries	—		13.0		—		—		13.0
Common Stocks:
Finance, Insurance and Real Estate	10.2		—		—		—		10.2
Other Industries	0.2		0.5		—		—		0.7
Other Equity Interests:
Exchange Traded Funds	427.3		—		—		—		427.3
Limited Liability Companies and Limited Partnerships	—		—		—		192.0		192.0
Total Investments in Equity Securities at Fair Value	437.7		54.7		—		192.0		684.4
Convertible Securities at Fair Value	—		31.5		—		—		31.5
Total	$	594.2	$	5,456.5	$	897.4	$	192.0	$	7,140.1

Fair Value Measurement Inputs and Valuation Techniques

The table below presents quantitative information about the significant unobservable inputs utilized by the Company in determining fair values for fixed maturity investments in corporate securities classified as Level 3 at September 30, 2019.

(Dollars in Millions)	Unobservable Input	Total Fair Value		Range of Unobservable Inputs					Weighted-average Yield
Investment-grade	Market Yield	$	249.8	2.5	%	-	10.2	%	4.3	%
Non-investment-grade:
Senior Debt	Market Yield	117.5		2.7		-	19.9		9.8
Junior Debt	Market Yield	82.4		9.9		-	18.0		13.1
Collateralized Loan Obligations (investment grade and non-investment grade)	Market Yield	536.5		3.7		-	12.6		5.4
Other	Various	8.6
Total Level 3 Fixed Maturity Investments in Corporate Securities		$	994.8

The table below presents quantitative information about the significant unobservable inputs utilized by the Company in determining fair values for fixed maturity investments in corporate securities classified as Level 3 at December 31, 2018.

(Dollars in Millions)	Unobservable Input	Total Fair Value		Range of Unobservable Inputs					Weighted-average Yield
Investment-grade	Market Yield	$	146.7	3.7	%	-	10.9	%	5.2	%
Non-investment-grade:
Senior Debt	Market Yield	142.3		4.8		-	30.0		11.5
Junior Debt	Market Yield	87.6		11.0		-	28.5		14.2
Collateralized Loan Obligations (investment grade and non-investment grade)	Market Yield	504.9		4.1		-	13.4		6.1
Other	Various	15.9
Total Level 3 Fixed Maturity Investments in Corporate Securities		$	897.4

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

Information by security type pertaining to the changes in the fair value of the Company’s investments classified as Level 3 for the three months ended September 30, 2018 is presented below.

	Fixed Maturities
(Dollars in Millions)	Corporate Bonds and Notes			States and Political Sub- divisions		Collateralized Loan Obligations			Other Mortgage- and Asset- backed		Total
Balance at Beginning of Period	$	385.5		$	—	$	95.9		$	—	$	481.4
Total Gains (Losses):
Included in Condensed Consolidated Statement of Income	0.9			—		0.5			—		1.4
Included in Other Comprehensive Income (Loss)	—			—		(1.3		)	0.2		(1.1		)
Purchases	54.9			1.8		354.2			10.0		420.9
Settlements	(11.5		)	—		(16.5		)	—		(28.0		)
Sales	(47.8		)	—		—			—		(47.8		)
Transfers into Level 3	2.0			—		33.9			—		35.9
Transfers out of Level 3	(2.7		)	—		—			—		(2.7		)
Balance at End of Period	$	381.3		$	1.8	$	466.7		$	10.2	$	860.0

Information by security type pertaining to the changes in the fair value of the Company’s investments classified as Level 3 for the three months ended September 30, 2019 is presented below.

	Fixed Maturities
(Dollars in Millions)	Corporate Bonds and Notes			States and Political Sub- divisions		Collateralized Loan Obligations			Other Mortgage- and Asset- backed			Total
Balance at Beginning of Period	$	415.6		$	—	$	539.0		$	10.4		$	965.0
Total Gains (Losses):
Included in Condensed Consolidated Statement of Income	1.7			—		0.4			—			2.1
Included in Other Comprehensive Income (Loss)	(0.8		)	—		(3.5		)	0.4			(3.9		)
Purchases	35.1			1.9		8.2			20.6			65.8
Settlements	(7.4		)	—		(7.6		)	(0.2		)	(15.2		)
Sales	(19.0		)	—		—			—			(19.0		)
Transfers into Level 3	—			—		—			—			—
Transfers out of Level 3	—			—		—			—			—
Balance at End of Period	$	425.2		$	1.9	$	536.5		$	31.2		$	994.8

Information by security type pertaining to the changes in the fair value of the Company’s investments classified as Level 3 for the nine months ended September 30, 2019 is presented below.

	Fixed Maturities
(Dollars in Millions)	Corporate Bonds and Notes			States and Political Sub- divisions		Collateralized Loan Obligations			Other Mortgage- and Asset- backed			Total
Balance at Beginning of Period	$	382.6		$	—	$	504.9		$	9.9		$	897.4
Total Gains (Losses):
Included in Condensed Consolidated Statement of Income	(6.0		)	—		0.5			—			(5.5		)
Included in Other Comprehensive Income (Loss)	9.4			—		4.2			1.2			14.8
Purchases	196.5			1.9		32.4			20.6			251.4
Settlements	(23.5		)	—		(19.6		)	(0.5		)	(43.6		)
Sales	(134.7		)	—		(2.9		)	—			(137.6		)
Transfers into Level 3	2.5			—		17.0			—			19.5
Transfers out of Level 3	(1.6		)	—		—			—			(1.6		)
Balance at End of Period	$	425.2		$	1.9	$	536.5		$	31.2		$	994.8

Information by security type pertaining to the changes in the fair value of the Company’s investments classified as Level 3 for the nine months ended September 30, 2018 is presented below.

	Fixed Maturities													Equity Securities
(Dollars in Millions)	Corporate Bonds and Notes			States and Political Sub- divisions		Redeemable Preferred Stocks			Collateralized Loan Obligations			Other Mortgage- and Asset- backed		Preferred and  Common Stocks			Other Equity Interests			Total
Balance at Beginning of Period	$	401.5		$	—	$	0.1		$	93.2		$	—	$	27.4		$	34.4		$	556.6
Total Gains (Losses):
Included in Condensed Consolidated Statement of Income	2.3			—		(0.1		)	2.4			—		—			—			4.6
Included in Other Comprehensive Income (Loss)	0.1			—		—			(3.3		)	0.2		—			—			(3.0		)
Purchases	148.6			1.8		—			391.8			10.0		—			—			552.2
Settlements	(77.1		)	—		—			(51.3		)	—		—			—			(128.4		)
Sales	(88.7		)	—		—			—			—		—			—			(88.7		)
Transfers into Level 3	2.3			—		—			33.9			—		—			—			36.2
Transfers out of Level 3	(7.7		)	—		—			—			—		(27.4		)	(34.4		)	(69.5		)
Balance at End of Period	$	381.3		$	1.8	$	—		$	466.7		$	10.2	$	—		$	—		$	860.0

Fair Value, by Balance Sheet Grouping

Presented below are the carrying values and fair value estimates of financial instruments not carried at fair value.

	September 30, 2019				December 31, 2018
(Dollars in Millions)	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial Assets:
Loans to Policyholders	$	302.7	$	636.8	$	300.6	$	542.6
Short-term Investments	424.2		424.2		286.1		286.1
Mortgage Loans	32.4		32.4		—		—
Financial Liabilities:
Debt	$	778.7	$	817.0	$	909.0	$	911.2
Collateralized Investment Borrowings	137.6		137.6		10.0		10.0