Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2022

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 Sheets at March 31, 2022 is summarized below. The Company has no material liabilities that are measured and reported at fair value.

	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	$	127.3	$	503.1	$	—	$	—	$	630.4
States and Political Subdivisions	—		1,770.2		—		—		1,770.2
Foreign Governments	—		5.0		—		—		5.0
Corporate Securities:
Bonds and Notes	—		3,950.5		205.6		—		4,156.1
Redeemable Preferred Stock	—		1.2		5.6		—		6.8
Collateralized Loan Obligations	—		897.9		—		—		897.9
Other Mortgage and Asset-backed	—		311.3		6.2		—		317.5
Total Investments in Fixed Maturities	127.3		7,439.2		217.4		—		7,783.9
Equity Securities at Fair Value:
Preferred Stocks:
Finance, Insurance and Real Estate	—		33.0		—		—		33.0
Other Industries	—		14.9		1.5		—		16.4
Common Stocks:
Finance, Insurance and Real Estate	0.9		—		—		—		0.9
Other Industries	1.4		0.4				—		1.8
Other Equity Interests:
Exchange Traded Funds	201.6		—		—		—		201.6
Limited Liability Companies and Limited Partnerships	—		—		—		317.8		317.8
Total Investments in Equity Securities at Fair Value	203.9		48.3		1.5		317.8		571.5
Convertible Securities at Fair Value	—		46.1		—		—		46.1
Total	$	331.2	$	7,533.6	$	218.9	$	317.8	$	8,401.5

The valuation of assets measured at fair value in the Company’s Consolidated Balance Sheets at December 31, 2021 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	$	132.8	$	504.6	$	—	$	—	$	637.4
States and Political Subdivisions	—		1,890.1		—		—		1,890.1
Foreign Governments	—		5.5		—		—		5.5
Corporate Securities:
Bonds and Notes	—		4,150.1		236.8		—		4,386.9
Redeemable Preferred Stocks	—		1.3		6.1		—		7.4
Collateralized Loan Obligations	—		752.1		—		—		752.1
Other Mortgage and Asset-backed	—		300.5		7.0		—		307.5
Total Investments in Fixed Maturities	132.8		7,604.2		249.9		—		7,986.9
Equity Securities at Fair Value:
Preferred Stocks:
Finance, Insurance and Real Estate	—		34.2		—		—		34.2
Other Industries	—		16.1		1.5		—		17.6
Common Stocks:
Finance, Insurance and Real Estate	18.9		—		—		—		18.9
Other Industries	2.9		—		—		—		2.9
Other Equity Interests:
Exchange Traded Funds	432.0		—		—		—		432.0
Limited Liability Companies and Limited Partnerships	—		—		—		325.0		325.0
Total Investments in Equity Securities at Fair Value	453.8		50.3		1.5		325.0		830.6
Other Investments:
Convertible Securities at Fair Value	—		46.4		—		—		46.4
Total	$	586.6	$	7,700.9	$	251.4	$	325.0	$	8,863.9

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 March 31, 2022.

(Dollars in Millions)	Unobservable Input	Total Fair Value		Range of Unobservable Inputs					Weighted-average Yield
Investment-grade	Market Yield	$	98.5	3.5	%	-	11.0	%	6.7	%
Non-investment-grade:
Senior Debt	Market Yield	40.1		5.9		-	26.0		10.1
Junior Debt	Market Yield	51.6		6.0		-	28.5		16.0
Other	Various	27.2
Total Level 3 Fixed Maturity Investments		$	217.4

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, 2021.

(Dollars in Millions)	Unobservable Input	Total Fair Value		Range of Unobservable Inputs					Weighted-average Yield
Investment-grade	Market Yield	$	87.9	2.3	%	-	10.3	%	5.4	%
Non-investment-grade:
Senior Debt	Market Yield	76.1		5.1		-	20.2		8.5
Junior Debt	Market Yield	53.9		6.0		-	27.5		15.0
Other	Various	32.0
Total Level 3 Fixed Maturity Investments		$	249.9

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 March 31, 2022 is presented below.

	Fixed Maturities								Equity Securities
(Dollars in Millions)	Corporate Bonds and Notes		Redeemable Preferred Stocks		Collateralized Loan Obligations		Other Mortgage- and Asset- backed		Preferred and  Common Stocks		Total
Balance at Beginning of Period	$	236.8	$	6.1	$	—	$	7.0	$	1.5	$	251.4
Total Gains (Losses):
Included in Condensed Consolidated Statement of Income	(5.7)		—		—		—		—		(5.7)
Included in Other Comprehensive Income (Loss)	(1.7)		(0.5)		—		(0.8)		—		(3.0)
Purchases	13.7		—		—		—		—		13.7
Settlements	—		—		—		—		—		—
Sales	(42.8)		—		—		—		—		(42.8)
Transfers into Level 3	5.3		—		—		—		—		5.3
Transfers out of Level 3	—		—		—		—		—		—
Balance at End of Period	$	205.6	$	5.6	$	—	$	6.2	$	1.5	$	218.9

The transfers into and out of Level 3 were due primarily to changes in the availability of market observable inputs.

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 March 31, 2021 is presented below.

	Fixed Maturities
(Dollars in Millions)	Corporate Bonds and Notes		States and Political Sub- divisions		Redeemable Preferred Stocks		Collateralized Loan Obligations		Other Mortgage- and Asset- backed		Total
Balance at Beginning of Year	$	433.0	$	—	$	6.2	$	—	$	10.0	$	449.2
Total Gains (Losses):
Included in Condensed Consolidated Statement of Income	(1.1)		—		—		—		—		(1.1)
Included in Other Comprehensive Income (Loss)	(3.7)		—		(0.5)		—		(0.8)		(5.0)
Purchases	17.8		—		—		—		—		17.8
Settlements	—		—		—		—		—		—
Sales	(30.9)		—		—		—		(0.2)		(31.1)
Transfers into Level 3	—		—		—		—		—		—
Transfers out of Level 3	(0.6)		—		—		—		—		(0.6)
Balance at End of Period	$	414.5	$	—	$	5.7	$	—	$	9.0	$	429.2

The transfers into and out of Level 3 were due to changes in the availability of market observable inputs.

Note 7 - Fair Value Measurements (Continued)

Fair Value, by Balance Sheet Grouping

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

	March 31, 2022				December 31, 2021
(Dollars in Millions)	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial Assets:
Loans to Policyholders	$	284.7	$	284.7	$	286.2	$	286.2
Short-term Investments	243.8		243.8		284.1		284.1
Mortgage Loans	99.8		99.8		96.8		96.8
Company-Owned Life Insurance	556.4		556.4		$	448.1	$	448.1
Equity Securities at Modified Cost	35.2		35.2		32.3		32.3
Financial Liabilities:
Long-term Debt	$	1,385.2	$	1,343.9	$	1,121.9	$	1,152.1
Policyholder Obligations	553.1		553.1		401.9		401.9