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Investments
 3 Months Ended
Mar. 31, 2020
Investments, Debt and Equity Securities [Abstract]  
Investments Investments
Fixed Maturities
The amortized cost and estimated fair values of the Company’s Investments in Fixed Maturities at March 31, 2020 were:
 
 
Amortized
Cost
 
Gross Unrealized
 
Allowance for Expected Credit Losses
 
Fair Value
(Dollars in Millions)
 
Gains
 
Losses
U.S. Government and Government Agencies and Authorities
 
$
700.3

 
$
60.3

 
$
—

 
$
—

 
$
760.6

States and Political Subdivisions
 
1,400.1

 
133.0

 
(4.1
)
 
—

 
1,529.0

Foreign Governments
 
7.3

 
—

 
(1.2
)
 
(1.1
)
 
5.0

Corporate Securities:
 
 
 
 
 
 
 
 
 

Bonds and Notes
 
3,697.7

 
314.4

 
(74.6
)
 
(3.5
)
 
3,934.0

Redeemable Preferred Stocks
 
6.8

 
—

 
(0.1
)
 
—

 
6.7

Collateralized Loan Obligations
 
684.5

 
0.8

 
(91.8
)
 
—

 
593.5

Other Mortgage- and Asset-backed
 
170.6

 
7.2

 
(8.1
)
 
—

 
169.7

Investments in Fixed Maturities
 
$
6,667.3

 
$
515.7

 
$
(179.9
)
 
$
(4.6
)
 
$
6,998.5

The amortized cost and estimated fair values of the Company’s Investments in Fixed Maturities at December 31, 2019 were:
 
 
Amortized
Cost
 
Gross Unrealized
 
Fair Value
(Dollars in Millions)
 
Gains
 
Losses
 
U.S. Government and Government Agencies and Authorities
 
$
784.7

 
$
32.5

 
$
(1.3
)
 
$
815.9

States and Political Subdivisions
 
1,386.4

 
130.5

 
(1.1
)
 
1,515.8

Foreign Governments
 
17.2

 
1.2

 
(1.6
)
 
16.8

Corporate Securities:
 
 
 
 
 
 
 
 
Bonds and Notes
 
3,465.0

 
401.8

 
(7.1
)
 
3,859.7

Redeemable Preferred Stocks
 
6.8

 
—

 
(0.1
)
 
6.7

Collateralized Loan Obligations
 
624.6

 
2.1

 
(8.5
)
 
618.2

Other Mortgage- and Asset-backed
 
88.0

 
2.1

 
(1.1
)
 
89.0

Investments in Fixed Maturities
 
$
6,372.7

 
$
570.2

 
$
(20.8
)
 
$
6,922.1


Other Receivables included $7.7 million and $1.0 million of unsettled sales of Investments in Fixed Maturities at March 31, 2020 and December 31, 2019, respectively. Accrued Expenses and Other Liabilities included unsettled purchases of Investments in Fixed Maturities of $76.2 million and $19.5 million at March 31, 2020 and December 31, 2019, respectively.
The amortized cost and estimated fair values of the Company’s Investments in Fixed Maturities at March 31, 2020 by contractual maturity were:
(Dollars in Millions)
 
Amortized Cost
 
Fair Value
Due in One Year or Less
 
$
100.3

 
$
98.8

Due after One Year to Five Years
 
1,059.5

 
1,050.5

Due after Five Years to Ten Years
 
1,515.1

 
1,586.7

Due after Ten Years
 
2,592.0

 
2,919.2

Mortgage- and Asset-backed Securities Not Due at a Single Maturity Date
 
1,400.4

 
1,343.3

Investments in Fixed Maturities
 
$
6,667.3

 
$
6,998.5


The expected maturities of the Company’s Investments in Fixed Maturities may differ from the contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.
Note 2 - Investments (continued)
Investments in Mortgage- and Asset-backed Securities Not Due at a Single Maturity Date at March 31, 2020 consisted of securities issued by the Government National Mortgage Association with a fair value of $561.4 million, securities issued by the Federal National Mortgage Association with a fair value of $6.8 million, securities issued by the Federal Home Loan Mortgage Corporation with a fair value of $13.3 million and securities of other non-governmental issuers with a fair value of $761.8 million.
An aging of unrealized losses on the Company’s Investments in Fixed Maturities at March 31, 2020 is presented below.
 
 
Less Than 12 Months
 
12 Months or Longer
 
Total
(Dollars in Millions)
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
Fixed Maturities:
 
 
 
 
 
 
 
 
 
 
 
 
States and Political Subdivisions
 
66.0

 
(3.9
)
 
1.6

 
(0.2
)
 
67.6

 
(4.1
)
Foreign Governments
 
2.9

 
(0.5
)
 
2.1

 
(0.7
)
 
5.0

 
(1.2
)
Corporate Securities:
 
 
 
 
 
 
 
 
 
 
 
 
Bonds and Notes
 
888.0

 
(68.7
)
 
30.5

 
(5.9
)
 
918.5

 
(74.6
)
Redeemable Preferred Stocks
 
6.7

 
(0.1
)
 
—

 
—

 
6.7

 
(0.1
)
Collateralized Loan Obligations
 
308.6

 
(51.0
)
 
253.3

 
(40.8
)
 
561.9

 
(91.8
)
Other Mortgage- and Asset-backed
 
76.8

 
(8.1
)
 
—

 
—

 
76.8

 
(8.1
)
Total Fixed Maturities
 
$
1,349.0

 
$
(132.3
)
 
$
287.5

 
$
(47.6
)
 
$
1,636.5

 
$
(179.9
)

At March 31, 2020, the Company did not have the intent to sell these investments, and it was not more likely than not that the Company would be required to sell these investments before an anticipated recovery of value. The Company considers many factors in evaluating whether the unrealized losses were credit related including, but not limited to, the extent to which the fair value has been less than amortized cost, conditions related to the security, industry, or geographic area, payment structure of the investment and the likelihood of the issuer’s ability to make contractual cashflows, defaults or other collectability concerns related to the issuer, changes in the ratings assigned by a rating agency, and other credit enhancements that affect the investment’s expected performance. The Company determined that the unrealized losses on these securities were due to non-credit related factors.
Investment-grade fixed maturity investments comprised $110.7 million and below-investment-grade fixed maturity investments comprised $69.2 million of the unrealized losses on investments in fixed maturities at March 31, 2020. For below-investment-grade fixed maturity investments in an unrealized loss position, the unrealized loss amount, on average, was approximately 17% of the amortized cost basis of the investment.
An aging of unrealized losses on the Company’s Investments in Fixed Maturities at December 31, 2019 is presented below.
 
 
Less Than 12 Months
 
12 Months or Longer
 
Total
(Dollars in Millions)
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
Fixed Maturities:
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Government and Government Agencies and Authorities
 
$
118.5

 
$
(1.3
)
 
$
5.1

 
$
—

 
$
123.6

 
$
(1.3
)
States and Political Subdivisions
 
63.0

 
(0.7
)
 
5.4

 
(0.4
)
 
68.4

 
(1.1
)
Foreign Governments
 
1.0

 
(0.3
)
 
3.1

 
(1.3
)
 
4.1

 
(1.6
)
Corporate Securities:
 
 
 
 
 
 
 
 
 
 
 
 
Bonds and Notes
 
160.0

 
(2.1
)
 
70.7

 
(5.0
)
 
230.7

 
(7.1
)
Redeemable Preferred Stocks
 
5.5

 
(0.1
)
 
—

 
—

 
5.5

 
(0.1
)
Collateralized Loan Obligations
 
95.5

 
(1.9
)
 
355.6

 
(6.6
)
 
451.1

 
(8.5
)
Other Mortgage- and Asset-backed
 
72.8

 
(1.1
)
 
—

 
—

 
72.8

 
(1.1
)
Total Fixed Maturities
 
$
516.3

 
$
(7.5
)
 
$
439.9

 
$
(13.3
)
 
$
956.2

 
$
(20.8
)

Note 2 - Investments (continued)
Unrealized losses on fixed maturities, which the Company determined to be temporary at December 31, 2019, were $20.8 million, of which $13.3 million was related to fixed maturities that were in an unrealized loss position for 12 months or longer. There were $0.3 million unrealized losses at December 31, 2019 related to securities for which the Company has recognized credit losses in earnings in the preceding table under the heading “Less Than 12 Months.” There were no unrealized losses at December 31, 2019 related to securities for which the Company has recognized credit losses in earnings in the preceding table under the heading “12 Months or Longer.” Investment-grade fixed maturity investments comprised $9.1 million and below-investment-grade fixed maturity investments comprised $11.7 million of the unrealized losses on investments in fixed maturities at December 31, 2019. For below-investment-grade fixed maturity investments in an unrealized loss position, the unrealized loss amount, on average, was approximately 5% of the amortized cost basis of the investment. At December 31, 2019, the Company did not have the intent to sell these investments, and it was not more likely than not that the Company would be required to sell these investments before recovery of its amortized cost basis, which may be at maturity. Based on the Company’s evaluation at December 31, 2019 of the prospects of the issuers, including, but not limited to, the credit ratings of the issuers of the investments in the fixed maturities, and the Company’s intention to not sell and its determination that it would not be required to sell before recovery of the amortized cost of such investments, the Company concluded that the declines in the fair values of the Company’s investments in fixed maturities presented in the preceding table were temporary at the evaluation date.
Fixed Maturities - Impairment Losses
The following table sets forth the change in allowance for credit losses on fixed maturities available-for-sale by major security type for three months ended March 31, 2020.
 
 
Foreign Governments
 
Corporate Bonds and Notes
 
Total
(Dollars in Millions)
Allowance for Credit Losses at Beginning of the Year
 
$
—

 
$
—

 
$
—

Impact of Adopting ASU 2016-13
 
—

 
—

 
—

Additions for Securities for which No Previous Expected Credit Losses were
   Recognized
 
1.1

 
3.5

 
4.6

Allowance for Credit Losses at End of Period
 
$
1.1

 
$
3.5

 
$
4.6


The credit loss impairment charges included in Impairment Losses in the Condensed Consolidated Statement of Income were $4.6 million for the three months ended March 31, 2020.
Equity Securities
Investments in Equity Securities at Fair Value were $709.8 million and $907.3 million at March 31, 2020 and December 31, 2019, respectively. Net unrealized losses arising during the three months ended March 31, 2020 and recognized in earnings, related to such investments still held as of March 31, 2020, were $112.8 million, primarily related to the recent disruption in global financial markets associated with COVID-19.
For Equity Securities at Modified Cost, the Company performs a qualitative impairment analysis on a quarterly basis consisting of various factors such as earnings performance, current market conditions, changes in credit ratings, changes in the regulatory environment and other factors. If the qualitative analysis identifies the presence of impairment indicators, the Company estimates the fair value of the investment. If the estimated fair value is below the carrying value, the Company records an impairment in the Condensed Consolidated Statement of Income to reduce the carrying value to the estimated fair value. When the Company identifies observable transactions of the same or similar securities to those held by the Company, the Company increases or decreases the carrying value to the observable transaction price. The Company did not recognize any increases in the carrying value due to observable transactions. The Company recognized an impairment of $2.0 million on Equity Securities at Modified Cost for the three months ended March 31, 2020 as a result of the Company’s qualitative impairment analysis. The Company has recognized $0.5 million cumulative decreases in the carrying value due to observable transactions, no cumulative increases in the carrying value due to observable transactions and $5.0 million of cumulative impairments on Equity Securities at Modified Cost held as of March 31, 2020.

Note 2 - Investments (continued)
There were no unsettled sales of Investments in Equity Securities at March 31, 2020 and December 31, 2019. There were no unsettled purchases of Investments in Equity Securities at March 31, 2020 and December 31, 2019.
Equity Method Limited Liability Investments at Cost Plus Cumulative Undistributed Earnings
Equity Method Limited Liability Investments include investments in limited liability investment companies and limited partnerships in which the Company’s interests are not deemed minor and are accounted for under the equity method of accounting. The Company’s investments in Equity Method Limited Liability Investments are generally of a passive nature in that the Company does not take an active role in the management of the investment entity. The Company’s maximum exposure to loss at March 31, 2020 is limited to the total carrying value of $226.3 million. In addition, the Company had outstanding commitments totaling approximately $89.5 million to fund Equity Method Limited Liability Investments at March 31, 2020. At March 31, 2020, no Equity Method Limited Liability Investments were reported without a reporting lag. 8.6% of the total carrying value were reported with a one month lag and the remainder were reported with more than a one month lag.
Other Investments
The carrying values of the Company’s Other Investments at March 31, 2020 and December 31, 2019 were:
(Dollars in Millions)
 
Mar 31,
2020
 
Dec 31,
2019
Company-Owned Life Insurance
 
$
320.4

 
$
217.0

Loans to Policyholders at Unpaid Principal
 
307.1

 
305.6

Real Estate at Depreciated Cost
 
108.6

 
111.4

Mortgage Loans and Other
 
24.1

 
27.5

Total
 
$
760.2

 
$
661.5


Net Investment Income
Net Investment Income for the three months ended March 31, 2020 and 2019 was:
 
 
Three Months Ended
(Dollars in Millions)
 
Mar 31,
2020
 
Mar 31,
2019
Investment Income:
 
 
 
 
Interest on Fixed Income Securities
 
$
71.0

 
$
76.4

Dividends on Equity Securities Excluding Alternative Investments
 
4.3

 
2.5

Alternative Investments:
 
 
 
 
Equity Method Limited Liability Investments
 
1.8

 
(3.6
)
Limited Liability Investments Included in Equity Securities
 
3.8

 
2.6

Total Alternative Investments
 
5.6

 
(1.0
)
Short-term Investments
 
1.6

 
1.8

Loans to Policyholders
 
5.6

 
5.3

Real Estate
 
2.5

 
2.5

Other
 
4.2

 
—

Total Investment Income
 
94.8

 
87.5

Investment Expenses:
 
 
 
 
Real Estate
 
2.6

 
2.4

Other Investment Expenses
 
6.6

 
2.4

Total Investment Expenses
 
9.2

 
4.8

Net Investment Income
 
$
85.6

 
$
82.7



Note 2 - Investments (continued)
Gross gains and losses on sales of investments in fixed maturities for the three months ended March 31, 2020 and 2019 were:
 
 
Three Months Ended
(Dollars in Millions)
 
Mar 31,
2020
 
Mar 31,
2019
Fixed Maturities:
 
 
 
 
Gains on Sales
 
$
15.9

 
$
15.1

Losses on Sales
 
(1.1
)
 
(2.6
)