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Investments
 12 Months Ended
Dec. 31, 2023
Investments, Debt and Equity Securities [Abstract]  
Investments

2. INVESTMENTS

A. FIXED MATURITIES

The amortized cost and fair value of available-for-sale fixed maturities were as follows:

DECEMBER 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortized Cost

 

 

Allowance for Credit Losses

 

 

Amortized Cost, Net of Allowance for Credit Losses

 

 

Gross Unrealized Gains

 

 

Gross Unrealized Losses

 

 

Fair Value

 

U.S. Treasury and government agencies

 

$

512.9

 

 

$

—

 

 

$

512.9

 

 

$

1.4

 

 

$

51.7

 

 

$

462.6

 

Foreign government

 

 

2.2

 

 

 

—

 

 

 

2.2

 

 

 

—

 

 

 

—

 

 

 

2.2

 

Municipal

 

 

1,309.3

 

 

 

—

 

 

 

1,309.3

 

 

 

5.5

 

 

 

129.6

 

 

 

1,185.2

 

Corporate

 

 

4,053.8

 

 

 

(1.9

)

 

 

4,051.9

 

 

 

22.9

 

 

 

225.1

 

 

 

3,849.7

 

Residential mortgage-backed

 

 

1,435.6

 

 

 

—

 

 

 

1,435.6

 

 

 

5.5

 

 

 

130.2

 

 

 

1,310.9

 

Commercial mortgage-backed

 

 

890.3

 

 

 

—

 

 

 

890.3

 

 

 

0.1

 

 

 

72.2

 

 

 

818.2

 

Other asset-backed

 

 

371.7

 

 

 

—

 

 

 

371.7

 

 

 

0.7

 

 

 

15.9

 

 

 

356.5

 

Total fixed maturities

 

$

8,575.8

 

 

$

(1.9

)

 

$

8,573.9

 

 

$

36.1

 

 

$

624.7

 

 

$

7,985.3

 

 

DECEMBER 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortized Cost

 

 

Allowance for Credit Losses

 

 

Amortized Cost, Net of Allowance for Credit Losses

 

 

Gross Unrealized Gains

 

 

Gross Unrealized Losses

 

 

Fair Value

 

U.S. Treasury and government agencies

 

$

478.9

 

 

$

—

 

 

$

478.9

 

 

$

0.2

 

 

$

58.9

 

 

$

420.2

 

Foreign government

 

 

2.3

 

 

 

—

 

 

 

2.3

 

 

 

—

 

 

 

0.1

 

 

 

2.2

 

Municipal

 

 

1,239.5

 

 

 

—

 

 

 

1,239.5

 

 

 

0.8

 

 

 

164.2

 

 

 

1,076.1

 

Corporate

 

 

4,066.4

 

 

 

(2.1

)

 

 

4,064.3

 

 

 

3.3

 

 

 

337.7

 

 

 

3,729.9

 

Residential mortgage-backed

 

 

1,215.3

 

 

 

—

 

 

 

1,215.3

 

 

 

0.6

 

 

 

142.1

 

 

 

1,073.8

 

Commercial mortgage-backed

 

 

924.1

 

 

 

—

 

 

 

924.1

 

 

 

—

 

 

 

87.7

 

 

 

836.4

 

Other asset-backed

 

 

370.1

 

 

 

—

 

 

 

370.1

 

 

 

0.1

 

 

 

27.0

 

 

 

343.2

 

Total fixed maturities

 

$

8,296.6

 

 

$

(2.1

)

 

$

8,294.5

 

 

$

5.0

 

 

$

817.7

 

 

$

7,481.8

 

 

The Company enters into various agreements that may require its fixed maturities to be held as collateral by others. At December 31, 2023 and 2022, fixed maturities with fair values of $153.0 million and $132.5 million, respectively, were held as collateral for the FHLB collateralized borrowing program. See Note 5 — “Debt and Credit Arrangements” for additional information related to the Company’s FHLB program. Additionally, at December 31, 2023 and 2022, fixed maturities with fair values of $301.6 million and $281.7 million, respectively, were on deposit with various state governmental authorities or trustees.

The amortized cost and fair value by maturity periods for fixed maturities are shown in the following table. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties, or the Company may have the right to put or sell the obligations back to the issuers.

DECEMBER 31

 

2023

 

(in millions)

 

Amortized
Cost, net of Allowance for Credit Losses

 

 

Fair Value

 

Due in one year or less

 

$

473.1

 

 

$

468.6

 

Due after one year through five years

 

 

2,670.4

 

 

 

2,582.8

 

Due after five years through ten years

 

 

2,433.1

 

 

 

2,177.3

 

Due after ten years

 

 

299.7

 

 

 

271.0

 

 

 

5,876.3

 

 

 

5,499.7

 

Mortgage-backed and other asset-backed securities

 

 

2,697.6

 

 

 

2,485.6

 

Total fixed maturities

 

$

8,573.9

 

 

$

7,985.3

 

B. UNREALIZED GAINS AND LOSSES

Unrealized gains and losses on available-for-sale fixed maturities are summarized in the following table.

YEARS ENDED DECEMBER 31

 

 

 

 

 

 

 

 

 

(in millions)

 

 

 

 

 

 

 

 

 

 

 

2023

 

 

2022

 

 

2021

 

Net appreciation (depreciation), beginning of year

 

$

(641.4

)

 

$

184.9

 

 

$

428.1

 

Net appreciation (depreciation) on available-for-sale fixed maturities

 

 

227.6

 

 

 

(1,044.2

)

 

 

(302.1

)

Benefit (provision) for deferred income taxes

 

 

(49.0

)

 

 

217.9

 

 

 

58.9

 

 

 

178.6

 

 

 

(826.3

)

 

 

(243.2

)

Net appreciation (depreciation), end of year

 

$

(462.8

)

 

$

(641.4

)

 

$

184.9

 

C. FIXED MATURITY SECURITIES IN AN UNREALIZED LOSS POSITION

The following tables provide information about the Company’s available-for-sale fixed maturity securities that were in an unrealized loss position at December 31, 2023 and 2022, including the length of time the securities have been in an unrealized loss position:

 

DECEMBER 31, 2023

 

12 months or less

 

 

Greater than 12 months

 

 

Total

 

(in millions)

 

Gross

 

 

 

 

 

Gross

 

 

 

 

 

Gross

 

 

 

 

 

 

Unrealized

 

 

Fair

 

 

Unrealized

 

 

Fair

 

 

Unrealized

 

 

Fair

 

 

 

Losses

 

 

Value

 

 

Losses

 

 

Value

 

 

Losses

 

 

Value

 

Investment grade:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and government agencies

 

$

0.6

 

 

$

62.2

 

 

$

51.1

 

 

$

331.0

 

 

$

51.7

 

 

$

393.2

 

Foreign governments

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2.0

 

 

 

—

 

 

 

2.0

 

Municipal

 

 

2.5

 

 

 

72.5

 

 

 

127.1

 

 

 

935.2

 

 

 

129.6

 

 

 

1,007.7

 

Corporate

 

 

1.3

 

 

 

159.9

 

 

 

214.9

 

 

 

2,870.2

 

 

 

216.2

 

 

 

3,030.1

 

Residential mortgage-backed

 

 

1.2

 

 

 

139.3

 

 

 

129.0

 

 

 

865.4

 

 

 

130.2

 

 

 

1,004.7

 

Commercial mortgage-backed

 

 

0.2

 

 

 

14.0

 

 

 

72.0

 

 

 

770.0

 

 

 

72.2

 

 

 

784.0

 

Other asset-backed

 

 

0.1

 

 

 

28.1

 

 

 

15.8

 

 

 

260.2

 

 

 

15.9

 

 

 

288.3

 

Total investment grade

 

 

5.9

 

 

 

476.0

 

 

 

609.9

 

 

 

6,034.0

 

 

 

615.8

 

 

 

6,510.0

 

Below investment grade:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate

 

 

2.5

 

 

 

33.8

 

 

 

6.4

 

 

 

66.2

 

 

 

8.9

 

 

 

100.0

 

Commercial mortgage-backed

 

 

—

 

 

 

—

 

 

 

—

 

 

 

0.9

 

 

 

—

 

 

 

0.9

 

Total below investment grade

 

 

2.5

 

 

 

33.8

 

 

 

6.4

 

 

 

67.1

 

 

 

8.9

 

 

 

100.9

 

Total fixed maturities

 

$

8.4

 

 

$

509.8

 

 

$

616.3

 

 

$

6,101.1

 

 

$

624.7

 

 

$

6,610.9

 

 

DECEMBER 31, 2022

 

12 months or less

 

 

Greater than 12 months

 

 

Total

 

(in millions)

 

Gross

 

 

 

 

 

Gross

 

 

 

 

 

Gross

 

 

 

 

 

 

Unrealized

 

 

Fair

 

 

Unrealized

 

 

Fair

 

 

Unrealized

 

 

Fair

 

 

 

Losses

 

 

Value

 

 

Losses

 

 

Value

 

 

Losses

 

 

Value

 

Investment grade:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and government agencies

 

$

15.8

 

 

$

237.3

 

 

$

43.1

 

 

$

160.7

 

 

$

58.9

 

 

$

398.0

 

Foreign governments

 

 

0.1

 

 

 

1.9

 

 

 

—

 

 

 

—

 

 

 

0.1

 

 

 

1.9

 

Municipal

 

 

64.9

 

 

 

595.5

 

 

 

99.3

 

 

 

386.6

 

 

 

164.2

 

 

 

982.1

 

Corporate

 

 

202.2

 

 

 

2,786.2

 

 

 

118.2

 

 

 

489.8

 

 

 

320.4

 

 

 

3,276.0

 

Residential mortgage-backed

 

 

51.6

 

 

 

642.0

 

 

 

90.5

 

 

 

387.6

 

 

 

142.1

 

 

 

1,029.6

 

Commercial mortgage-backed

 

 

48.7

 

 

 

663.2

 

 

 

39.0

 

 

 

164.4

 

 

 

87.7

 

 

 

827.6

 

Other asset-backed

 

 

11.0

 

 

 

234.8

 

 

 

16.0

 

 

 

75.1

 

 

 

27.0

 

 

 

309.9

 

Total investment grade

 

 

394.3

 

 

 

5,160.9

 

 

 

406.1

 

 

 

1,664.2

 

 

 

800.4

 

 

 

6,825.1

 

Below investment grade:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate

 

 

13.5

 

 

 

253.2

 

 

 

3.8

 

 

 

17.3

 

 

 

17.3

 

 

 

270.5

 

Total fixed maturities

 

$

407.8

 

 

$

5,414.1

 

 

$

409.9

 

 

$

1,681.5

 

 

$

817.7

 

 

$

7,095.6

 

The Company views gross unrealized losses on fixed maturities as non-credit related and through its assessment of unrealized losses has determined that these securities will recover, allowing the Company to realize the anticipated long-term economic value. The Company currently does not intend to sell, nor does it expect to be required to sell these securities before recovery of their amortized cost. The Company employs a systematic methodology to evaluate declines in fair value below amortized cost for fixed maturity securities. In determining impairments, the Company evaluates several factors and circumstances, including the issuer’s overall financial condition; the issuer’s credit and financial strength ratings; the issuer’s financial performance, including earnings trends and asset quality; any specific events which may influence the operations of the issuer; the general outlook for market conditions in the industry or geographic region in which the issuer operates; and the degree to which the fair value of an issuer’s securities is below the Company’s amortized cost. The Company also considers any factors that might raise doubt about the issuer’s ability to make contractual payments as they come due and whether the Company expects to recover the entire amortized cost basis of the security.

D. OTHER INVESTMENTS

The Company’s mortgage participations and other mortgage loans were $371.4 million and $388.6 million at December 31, 2023 and 2022, respectively. Participating interests in commercial mortgage loans are originated and serviced by a third-party. For these investments, the Company shares, on a pro-rata basis, in all related cash flows of the underlying mortgages. Mortgage participations and other mortgage loans were comprised of the following property types and geographic locations.

DECEMBER 31

 

2023

 

 

2022

 

(in millions)

 

 

 

 

 

 

Property Type:

 

 

 

 

 

 

Office

 

$

141.9

 

 

$

149.3

 

Apartments

 

 

104.3

 

 

 

103.9

 

Retail

 

 

50.8

 

 

 

52.7

 

Hotel

 

 

48.0

 

 

 

48.9

 

Industrial

 

 

36.4

 

 

 

37.0

 

Allowance for credit losses

 

 

(10.0

)

 

 

(3.2

)

Total

 

$

371.4

 

 

$

388.6

 

 

DECEMBER 31

 

2023

 

 

2022

 

(in millions)

 

 

 

 

 

 

Geographic Region:

 

 

 

 

 

 

South Atlantic

 

$

102.4

 

 

$

103.2

 

Pacific

 

 

92.0

 

 

 

92.5

 

Mid-Atlantic

 

 

57.0

 

 

 

58.1

 

New England

 

 

41.0

 

 

 

47.8

 

West South Central

 

 

32.4

 

 

 

33.0

 

East North Central

 

 

19.8

 

 

 

21.0

 

Mountain

 

 

14.6

 

 

 

13.6

 

Other

 

 

22.2

 

 

 

22.6

 

Allowance for credit losses

 

 

(10.0

)

 

 

(3.2

)

Total

 

$

371.4

 

 

$

388.6

 

At December 31, 2023, scheduled maturities of mortgage participations and other loans were as follows: due in 2024 - $42.8 million; in 2025 - $90.5 million; 2026 - $51.9 million; 2027 - $30.1 million and thereafter - $156.1 million. Actual maturities could differ from contractual maturities because borrowers may have the right to prepay obligations with or without prepayment penalties, and loans may be refinanced. During 2023, the Company did not refinance any loans based on terms that differed from current market rates.

In determining estimated credit losses on mortgage participations and other loans, the Company evaluates several factors, including credit risk. The amortized cost of mortgage participations and other loans by credit ratings and year of origination was as follows:

DECEMBER 31, 2023

 

 

 

(in millions)

 

Prior to 2019

 

 

2019

 

 

2020

 

 

2021

 

 

2022

 

 

2023

 

 

Total

 

Credit Quality

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aaa/Aa/A

 

$

140.2

 

 

$

34.8

 

 

$

9.7

 

 

$

62.2

 

 

$

10.0

 

 

$

—

 

 

$

256.9

 

Baa

 

 

41.3

 

 

 

12.4

 

 

 

17.5

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

71.2

 

Ba and lower

 

 

47.4

 

 

 

—

 

 

 

5.9

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

53.3

 

Amortized cost

 

$

228.9

 

 

$

47.2

 

 

$

33.1

 

 

$

62.2

 

 

$

10.0

 

 

$

—

 

 

$

381.4

 

Allowance for credit losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10.0

)

Amortized cost, net of
  allowance for credit losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

371.4

 

Other investments also include interests in limited partnerships of $415.6 million and $387.9 million at December 31, 2023 and December 31, 2022, respectively.

E. OTHER

At December 31, 2023 and 2022, the Company’s exposure to concentration of investments in a single investee that exceeded 10% of shareholders’ equity included securities of the U.S. government and U.S. government-sponsored agencies, as well as mortgage participations with a highly rated single third-party of $371.4 million and $388.6 million, respectively.

At December 31, 2023, there were contractual investment commitments of up to $199.4 million.