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Investments
 12 Months Ended
Dec. 31, 2011
Investment [Abstract]  
Investments

(3) Investments

Substantially all of our fixed income securities are investment grade. The cost or amortized cost, gross unrealized gain or loss, and fair value of our fixed income securities were as follows:

  Available for sale 
  Cost or Gross Gross    
  amortized unrealized unrealized    
  cost gain loss Fair value 
December 31, 2011            
              
U.S. government and government agency securities $285,166 $10,523 $(10) $295,679 
Fixed income securities of states, municipalities and political            
 subdivisions 999,940  85,528  (127)  1,085,341 
Special purpose revenue bonds of states, municipalities and            
 political subdivisions 1,741,297  122,746  (155)  1,863,888 
Corporate fixed income securities  817,886  35,221  (6,774)  846,333 
Residential mortgage-backed securities  1,036,436  65,771  (2,121)  1,100,086 
Commercial mortgage-backed securities  244,535  15,162  (3,573)  256,124 
Asset-backed securities  34,655  147  (56)  34,746 
Foreign government securities  225,517  11,203  (83)  236,637 
 Total fixed income securities - available for sale $5,385,432 $346,301 $(12,899) $5,718,834 

  Available for sale 
  Cost or Gross Gross    
  amortized unrealized unrealized    
  cost gain loss Fair value 
December 31, 2010            
              
U.S. government and government agency securities $315,339 $9,097 $(169) $324,267 
Fixed income securities of states, municipalities and political            
 subdivisions 1,050,969  38,825  (7,737)  1,082,057 
Special purpose revenue bonds of states, municipalities and            
 political subdivisions 1,614,554  34,764  (21,259)  1,628,059 
Corporate fixed income securities  545,883  26,436  (1,925)  570,394 
Residential mortgage-backed securities  958,404  40,949  (4,245)  995,108 
Commercial mortgage-backed securities  136,746  8,518  (36)  145,228 
Asset-backed securities  12,563  78  (75)  12,566 
Foreign government securities  230,348  11,537  (124)  241,761 
 Total fixed income securities - available for sale $4,864,806 $170,204 $(35,570) $4,999,440 

  Held to maturity 
  Cost or Gross Gross    
  amortized unrealized unrealized    
  cost gain loss Fair value 
December 31, 2011            
              
U.S. government securities $6,998 $69 $ - $7,067 
Corporate fixed income securities  110,284  1,814   (455)  111,643 
Foreign government securities  43,820  746   (140)  44,426 
 Total fixed income securities - held to maturity $161,102 $2,629 $(595) $163,136 

December 31, 2010            
              
U.S. government securities $12,993 $ 264 $ - $13,257 
Corporate fixed income securities  113,296   1,205   (277)  114,224 
Foreign government securities  67,379   995   (44)  68,330 
 Total fixed income securities - held to maturity $193,668 $2,464 $(321) $195,811 

All fixed income securities were income producing in 2011. The following table displays the gross unrealized losses and fair value of all available for sale fixed income securities that were in a continuous unrealized loss position for the periods indicated.

  Less than 12 months  12 months or more  Total  
    Unrealized   Unrealized   Unrealized 
   Fair value  losses Fair value  losses  Fair value  losses 
December 31, 2011                  
                    
U.S. government and government agency                   
 securities$13,984 $(10) $0 $0 $13,984 $(10) 
Fixed income securities of states,                   
 municipalities and political subdivisions  10,256  (107)  899  (20)  11,155  (127) 
Special purpose revenue bonds of states,                   
 municipalities and political subdivisions  21,856  (67)  6,796  (88)  28,652  (155) 
Corporate fixed income securities  154,856  (6,391)  18,005  (383)  172,861  (6,774) 
Residential mortgage-backed securities  32,430  (1,364)  7,582  (757)  40,012  (2,121) 
Commercial mortgage-backed securities  39,075  (3,573)  0  0  39,075  (3,573) 
Asset-backed securities  19,648  (56)  0  0  19,648  (56) 
Foreign government securities  4,198  (83)  0  0  4,198  (83) 
 Total $296,303 $(11,651) $33,282 $(1,248) $329,585 $(12,899) 

December 31, 2010                  
                    
U.S. government and government agency                   
 securities$20,976 $(169) $0 $0 $20,976 $(169) 
Fixed income securities of states,                   
 municipalities and political subdivisions  228,228  (7,621)  2,279  (116)  230,507  (7,737) 
Special purpose revenue bonds of states,                   
 municipalities and political subdivisions  689,190  (21,156)  6,344  (103)  695,534  (21,259) 
Corporate fixed income securities  66,029  (1,925)  0  0  66,029  (1,925) 
Residential mortgage-backed securities  123,782  (3,081)  22,152  (1,164)  145,934  (4,245) 
Commercial mortgage-backed securities  0  0  3,084  (36)  3,084  (36) 
Asset-backed securities  9,174  (75)  0  0  9,174  (75) 
Foreign government securities  10,699  (124)  0  0  10,699  (124) 
 Total $1,148,078 $(34,151) $33,859 $(1,419) $1,181,937 $(35,570) 

A security has an impairment loss when its fair value is less than its cost or amortized cost at the balance sheet date. We evaluate our securities for possible other-than-temporary impairment losses at each quarter end. During the past three years, our reviews covered all impaired securities where the loss exceeded $0.5 million and the loss either exceeded 10% of cost or the security had been in a loss position for longer than twelve consecutive months. Our reviews considered the factors described in the “Other-than-temporary Impairments” section in Note 1.

For other-than-temporary impairment losses, we recognize an other-than-temporary impairment loss in earnings in the period that we determine: 1) we intend to sell the security, 2) it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis or 3) the security has a credit loss. Any non-credit portion of the other-than-temporary impairment loss is recognized in shareholders' equity. Our other-than-temporary impairment losses were as follows:

 

   2011 2010 2009
Total other-than-temporary impairment loss $(6,922) $(378) $(6,443)
Portion recognized in other comprehensive income  2,243  (47)  1,014
 Net other-than-temporary impairment loss          
  recognized in earnings $(4,679) $(425) $(5,429)

We have recognized credit losses on certain impaired fixed income securities, for which each security also had an impairment loss recorded in other comprehensive income. The rollforward of these credit losses was as follows:

 2011 2010
Balance at beginning of year$4,273 $3,848
Credit losses recognized in earnings     
Securities previously impaired 2,447  425
Securities previously not impaired 2,232  0
Securities sold (3,905)  0
Balance at December 31$5,047 $4,273

We had $0.9 million after-tax of other-than-temporary impairment losses, related to mortgage-backed securities, included in accumulated other comprehensive income within shareholders' equity at December 31, 2011. This amount includes the after-tax unrealized gains and losses on these impaired securities resulting from changes in their fair value subsequent to their initial other-than-temporary impairment measurement dates.

 

We do not consider the $12.9 million of gross unrealized losses in our fixed income securities portfolio at December 31, 2011 to be other-than-temporary impairments because: 1) we received substantially all contractual interest and principal payments on these securities in 2011, 2) we do not intend to sell the securities, 3) it is more likely than not that we will not be required to sell the securities before recovery of their amortized cost bases and 4) the unrealized loss relates to non-credit factors, such as interest rate changes and market conditions.

 

The change in our unrealized pretax net gains (losses) on investments during each year was as follows:

  2011 2010 2009
         
Available for sale fixed income securities$198,768 $(21,677) $141,685
Other investments (2,351)  20  (2)
 Change in net unrealized investment gains (losses)$196,417 $(21,657) $141,683

The amortized cost and fair value of our fixed income securities at December 31, 2011, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The weighted-average life of our mortgage-backed and asset-backed securities was 4.3 years at December 31, 2011.

 

   Available for sale  Held to maturity  
   Cost or amortized cost Fair value  Amortized cost Fair value  
Due in 1 year or less  $259,072 $264,361 $63,127 $63,340 
Due after 1 year through 5 years   1,086,817  1,133,474  97,137  98,874 
Due after 5 years through 10 years   1,093,709  1,189,777  838  922 
Due after 10 years through 15 years   753,856  818,232  0  0 
Due after 15 years   876,352  922,034  0  0 
 Securities with fixed maturities   4,069,806  4,327,878  161,102  163,136 
Mortgage-backed and asset-backed securities   1,315,626  1,390,956  0  0 
 Total fixed income securities  $5,385,432 $5,718,834 $161,102 $163,136 

At December 31, 2011, our domestic insurance companies had deposited fixed income securities of $42.3 million (amortized cost of $40.1 million) to meet the deposit requirements of various state insurance departments. There are withdrawal and other restrictions on these deposits, but we direct how the deposits are invested and we earn interest on the funds.

 

The sources of net investment income were as follows:

  2011 2010 2009
Fixed income securities $212,022 $202,814 $189,450
Short-term investments  537  900  1,978
Other 4,486  4,344  4,338
 Total investment income  217,045  208,058  195,766
Investment expense  (4,774)  (4,239)  (3,801)
 Net investment income $212,271 $203,819 $191,965

Realized pretax gains (losses) on the sale of investments, which exclude other-than-temporary impairment credit losses, were:

  2011 2010 2009
Fixed income securities         
 Gains$10,045 $14,207 $13,969
 Losses (6,388)  (1,995)  (2,451)
  Net fixed income securities 3,657  12,212  11,518
          
Other investments        
 Gains 6  52  719
 Losses (10)  (160)  (161)
  Net other investments (4)  (108)  558
          
Total        
 Gains 10,051  14,259  14,688
 Losses (6,398)  (2,155)  (2,612)
  Net realized investment gain $3,653 $12,104 $12,076