Investments

3 Months Ended

Mar. 31, 2025

Investments, Debt and Equity Securities [Abstract]

Fixed Maturities

The amortized cost and fair values of the Company’s Investments in Fixed Maturities at March 31, 2025 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	$	601.0	$	1.7	$	(90.9)	$	—	$	511.8
States and Political Subdivisions	1,447.4		2.1		(217.1)		(0.2)		1,232.2
Foreign Governments	6.6		0.2		(0.2)		—		6.6
Corporate Securities:
Bonds and Notes	4,087.4		11.0		(476.0)		(7.1)		3,615.3
Redeemable Preferred Stocks	9.8		0.1		(0.9)		—		9.0
Collateralized Loan Obligations	796.3		1.8		(6.8)		(2.0)		789.3
Other Mortgage- and Asset-backed	423.7		0.5		(29.8)		—		394.4
Investments in Fixed Maturities	$	7,372.2	$	17.4	$	(821.7)	$	(9.3)	$	6,558.6

The amortized cost and fair values of the Company’s Investments in Fixed Maturities at December 31, 2024 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	$	588.6	$	0.6	$	(102.4)	$	—	$	486.8
States and Political Subdivisions	1,457.3		1.6		(225.4)		(0.3)		1,233.2
Foreign Governments	6.5		0.3		(0.2)		—		6.6
Corporate Securities:
Bonds and Notes	4,038.3		8.9		(518.8)		(8.8)		3,519.6
Redeemable Preferred Stocks	9.8		0.1		(1.0)		—		8.9
Collateralized Loan Obligations	747.8		2.5		(7.2)		(1.6)		741.5
Other Mortgage- and Asset-backed	446.7		0.8		(34.5)		—		413.0
Investments in Fixed Maturities	$	7,295.0	$	14.8	$	(889.5)	$	(10.7)	$	6,409.6

Other Receivables included $3.9 million and $1.8 million of unsettled sales of Investments in Fixed Maturities at March 31, 2025 and December 31, 2024, respectively. There were $60.0 million and $11.6 million of unsettled purchases of Investments in Fixed Maturities included in Accrued Expenses and Other Liabilities as of March 31, 2025 and December 31, 2024, respectively.

The amortized cost and estimated fair values of the Company’s Investments in Fixed Maturities at March 31, 2025 by contractual maturity were:


(Dollars in Millions)	Amortized Cost		Fair Value
Due in One Year or Less	$	333.0	$	327.5
Due after One Year to Five Years	873.4		848.1
Due after Five Years to Ten Years	1,003.8		893.9
Due after Ten Years	3,474.0		2,915.8
Mortgage- and Asset-backed Securities Not Due at a Single Maturity Date	1,688.0		1,573.3
Investments in Fixed Maturities	$	7,372.2	$	6,558.6

Note 6 - Investments (Continued)

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.

Investments in Mortgage- and Asset-backed Securities Not Due at a Single Maturity Date at March 31, 2025 consisted of securities issued by the Government National Mortgage Association with a fair value of $217.9 million, securities issued by the Federal National Mortgage Association with a fair value of $99.5 million, securities issued by the Federal Home Loan Mortgage Corporation with a fair value of $76.0 million and securities of other non-governmental issuers with a fair value of $1,179.9 million.

An aging of unrealized losses on the Company’s Investments in Fixed Maturities at March 31, 2025 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	$	17.5	$	(0.1)	$	390.1	$	(90.8)	$	407.6	$	(90.9)
States and Political Subdivisions	200.1		(7.6)		966.6		(209.5)		1,166.7		(217.1)
Foreign Governments	0.3		—		1.4		(0.2)		1.7		(0.2)
Corporate Securities:
Bonds and Notes	684.3		(30.1)		2,790.4		(445.9)		3,474.7		(476.0)
Redeemable Preferred Stocks	—		—		6.6		(0.9)		6.6		(0.9)
Collateralized Loan Obligations	175.9		(0.7)		92.2		(6.1)		268.1		(6.8)
Other Mortgage- and Asset-backed	44.0		(0.2)		268.4		(29.6)		312.4		(29.8)
Total Fixed Maturities	$	1,122.1	$	(38.7)	$	4,515.7	$	(783.0)	$	5,637.8	$	(821.7)

Investment-grade fixed maturity investments comprised $807.7 million and below-investment-grade fixed maturity investments comprised $14.0 million of the unrealized losses on investments in fixed maturities at March 31, 2025. For below-investment-grade fixed maturity investments in an unrealized loss position, the unrealized loss amount, on average, was approximately 3.7% of the amortized cost basis of the investment.

An aging of unrealized losses on the Company’s Investments in Fixed Maturities at December 31, 2024 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	$	41.7	$	(0.5)	$	383.6	$	(101.9)	$	425.3	$	(102.4)
States and Political Subdivisions	242.7		(10.3)		933.4		(215.1)		1,176.1		(225.4)
Foreign Governments	—		—		1.4		(0.2)		1.4		(0.2)
Corporate Securities:
Bonds and Notes	674.3		(40.9)		2,605.7		(477.9)		3,280.0		(518.8)
Redeemable Preferred Stocks	2.0		—		6.6		(1.0)		8.6		(1.0)
Collateralized Loan Obligations	34.2		(0.1)		89.5		(7.1)		123.7		(7.2)
Other Mortgage- and Asset-backed	12.0		(0.1)		261.7		(34.4)		273.7		(34.5)
Total Fixed Maturities	$	1,006.9	$	(51.9)	$	4,281.9	$	(837.6)	$	5,288.8	$	(889.5)

Note 6 - Investments (Continued)

Investment-grade fixed maturity investments comprised $875.3 million and below-investment-grade fixed maturity investments comprised $14.2 million of the unrealized losses on investments in fixed maturities at December 31, 2024. For below-investment-grade fixed maturity investments in an unrealized loss position, the unrealized loss amount, on average, was approximately 4.9% of the amortized cost basis of the investment.

Fixed Maturities - Expected Credit 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, 2025. Accrued interest excluded from the amortized cost of fixed income securities total $68.6 million and $70.9 million as of March 31, 2025 and December 31, 2024, respectively, and is reported within the Other Receivables line of the Condensed Consolidated Balance Sheets. The Company monitors accrued interest and writes off amounts when they are not expected to be received.


	States and Political Subdivisions		Corporate Bonds and Notes		Total
(Dollars in Millions)
Balance, Beginning of Year	$	0.3	$	10.4	$	10.7

Reductions Due to Sales	—		(0.5)		(0.5)
Net (Decrease) Increase in Allowance on Securities for which Expected Credit Losses were Previously Recognized	(0.1)		0.3		0.2
Write-Offs Charged Against Allowance	—		(1.1)		(1.1)
Balance, End of Period	$	0.2	$	9.1	$	9.3

The following table sets forth the change in allowance for credit losses on fixed maturities available-for-sale by major security type for the three months ended March 31, 2024.


	States and Political Subdivisions		Corporate Bonds and Notes		Total
(Dollars in Millions)
Balance, Beginning of Year	$	0.5	$	7.7	$	8.2

Reductions Due to Sales	—		(0.2)		(0.2)
Net Decrease in Allowance on Securities for which Expected Credit Losses were Previously Recognized	—		(0.3)		(0.3)

Balance, End of Period	$	0.5	$	7.2	$	7.7

Equity Securities

Investments in Equity Securities at Fair Value were $232.3 million and $218.5 million at March 31, 2025 and December 31, 2024, respectively. Net unrealized (losses) gains arising during the three months ended March 31, 2025 and 2024 and recognized in earnings, related to such investments still held as of March 31, 2025 and March 31, 2024, were $(0.5) million and $3.9 million, respectively.

There were no unsettled purchases of Investments in Equity Securities at Fair Value at March 31, 2025 or December 31, 2024. There were $0.1 million and $0.3 million in unsettled sales of Investments in Equity Securities at Fair Value at March 31, 2025 and December 31, 2024, respectively.

Equity Method Limited Liability Investments

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.

Note 6 - Investments (Continued)

The Company’s maximum exposure to loss at March 31, 2025 is limited to the total carrying value of $185.1 million. In addition, the Company had outstanding commitments totaling approximately $91.8 million to fund Equity Method Limited Liability Investments at March 31, 2025. At March 31, 2025, 2.9% of Equity Method Limited Liability Investments were reported without a reporting lag, 3.7% of the total carrying value were reported with a one-month lag, and the remainder were reported with a greater than one-month but less than or equal to three-month lag.

There were no unsettled purchases or sales of Equity Method Limited Liability Investments as of March 31, 2025 or December 31, 2024. Unsettled purchases and sales of Equity Method Limited Liability Investments are carried within Accrued Expenses and Other Liabilities and Other Receivables, respectively, on the Condensed Consolidated Balance Sheets.

Loans to Policyholders

Loans to Policyholders represents funds loaned to policyholders up to the cash surrender value of the associated insurance policies and are carried at the unpaid principal balances due to the Company from the policyholders. Interest income on policy loans is recognized in Net Investment Income at the contract interest rate when earned. Policy loans are fully collateralized by the cash surrender value of the associated insurance policies.

The carrying values of the Company’s Loans to Policyholders at Unpaid Principal investment at March 31, 2025 and December 31, 2024 were $279.8 million and $280.7 million, respectively.

Other Investments

The carrying values of the Company’s Other Investments at March 31, 2025 and December 31, 2024 were:


(Dollars in Millions)	Mar 31, 2025		Dec 31, 2024
Equity Securities at Modified Cost	$	21.7	$	22.5
Real Estate at Depreciated Cost	99.7		99.5
Mortgage Loans	103.1		75.3
Alternative Energy Partnership Investments	17.3		17.6
Other	2.7		2.2
Total Other Investments	$	244.5	$	217.1

Investments in Equity Securities at Modified Cost were $21.7 million and $22.5 million at March 31, 2025 and December 31, 2024, respectively. 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 Statements 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 changes in carrying value due to observable transactions for the three months ended March 31, 2025 and 2024. The Company did not recognize any impairment on Equity Securities at Modified Cost for the three months ended March 31, 2025 as a result of the Company’s impairment analysis. The Company recognized an impairment of $0.4 million on Equity Securities at Modified Cost for three months ended March 31, 2024 as a result of the Company’s impairment analysis. The Company recognized no cumulative increases or decreases in the carrying value due to observable transactions and $3.2 million of cumulative impairments on Equity Securities at Modified Cost held as of March 31, 2025. The Company recognized no cumulative increases or decreases in the carrying value due to observable transactions and $3.2 million of cumulative impairments on Equity Securities at Modified Cost held as of December 31, 2024.

Note 6 - Investments (Continued)

Alternative Energy Partnership Investments include partnerships formed to invest in newly installed residential solar leases and power purchase agreements. As a result of this investment, the Company has the right to certain investment tax credits and tax depreciation benefits, and to a lesser extent, cash flows generated from the installed solar systems leased to individual consumers for a fixed period of time. The Hypothetical Liquidation Book Value (“HLBV”) equity method of accounting is used for the Company’s investments in Alternative Energy Partnership Investments. The Company’s maximum exposure to loss at March 31, 2025 is limited to the total carrying value of $17.3 million. The Company has no outstanding commitments to fund Alternative Energy Partnership Investments as of March 31, 2025. Alternative Energy Partnership Investments are reported on a three-month lag.

Net Investment Income

Net Investment Income for the three months ended March 31, 2025 and 2024 was:


	Three Months Ended
(Dollars in Millions)	Mar 31, 2025		Mar 31, 2024
Investment Income:
Interest on Fixed Income Securities1	$	76.4	$	79.8
Dividends on Equity Securities Excluding Alternative Investments	0.8		2.8
Alternative Investments:
Equity Method Limited Liability Investments	(0.7)		(2.1)
Limited Liability Investments Included in Equity Securities	3.7		3.4
Total Alternative Investments	3.0		1.3
Short-term Investments	8.6		7.3
Loans to Policyholders	5.3		5.2
Real Estate	2.2		2.3
Company-Owned Life Insurance	10.2		7.1
Other	2.0		2.5
Total Investment Income	108.5		108.3
Investment Expenses:
Real Estate	2.1		2.2
Other Investment Expenses	5.2		5.7
Total Investment Expenses	7.3		7.9
Net Investment Income	$	101.2	$	100.4

1Reduced by interest expense incurred on FHLB borrowings used for spread lending purposes of $4.8 million and $5.2 million for the three months ended March 31, 2025 and 2024, respectively.

Gross gains and losses on sales of investments in fixed maturities and gains and losses associated with Ultra-Long Treasury Futures for the three months ended March 31, 2025 and 2024 were:


	Three Months Ended
(Dollars in Millions)	Mar 31, 2025		Mar 31, 2024
Fixed Maturities:
Gains on Sales	$	1.3	$	12.8
Losses on Sales	(0.5)		(2.3)
Gains (Losses) on Hedging Activity	—		(7.9)