Document and Entity Information
Document and Entity Information - shares shares in Millions | 6 Months Ended | |
Jun. 30, 2015 | Aug. 07, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | PHOENIX COMPANIES INC/DE | |
Entity Central Index Key | 1,129,633 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 5.8 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,015 |
Consolidated Interim Unaudited
Consolidated Interim Unaudited Statements of Income and Comprehensive Income - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
REVENUES: | ||||
Premiums | $ 86.6 | $ 83.2 | $ 165 | $ 162.8 |
Fee income | 135.2 | 134.2 | 269 | 269 |
Net investment income | 202.3 | 191.5 | 411.6 | 403 |
Net realized gains (losses): | ||||
Total other-than-temporary impairment (“OTTI”) losses | (0.9) | (1) | (7.9) | (1) |
Portion of OTTI losses recognized in other comprehensive income (“OCI”) | (0.2) | 0 | (1.6) | (0.2) |
Net OTTI losses recognized in earnings | (1.1) | (1) | (9.5) | (1.2) |
Net realized gains (losses), excluding OTTI losses | (1) | 5.2 | (8.7) | (21.5) |
Net realized gains (losses) | (2.1) | 4.2 | (18.2) | (22.7) |
Total revenues | 422 | 413.1 | 827.4 | 812.1 |
BENEFITS AND EXPENSES: | ||||
Policy benefits | 287.3 | 301.3 | 579.3 | 531.6 |
Policyholder dividends | 55 | 42.6 | 95.1 | 114.8 |
Policy acquisition cost amortization | 24.6 | 19.1 | 41.7 | 43.7 |
Interest expense on indebtedness | 7.1 | 7.1 | 14.2 | 14.2 |
Other operating expenses | 82.8 | 84.4 | 206.6 | 181.6 |
Total benefits and expenses | 456.8 | 454.5 | 936.9 | 885.9 |
Total benefits and expenses | (34.8) | (41.4) | (109.5) | (73.8) |
Income tax expense (benefit) | (13) | (19.6) | (15.2) | (24.4) |
Income (loss) from continuing operations | (21.8) | (21.8) | (94.3) | (49.4) |
Income (loss) from discontinued operations, net of income taxes | (0.6) | (0.6) | (1.1) | (1.2) |
Net income (loss) | (22.4) | (22.4) | (95.4) | (50.6) |
Less: Net income (loss) attributable to noncontrolling interests | 0.2 | 0 | 1.2 | (0.1) |
Net income (loss) attributable to The Phoenix Companies, Inc. | (22.6) | (22.4) | (96.6) | (50.5) |
COMPREHENSIVE INCOME (LOSS): | ||||
Net income (loss) attributable to The Phoenix Companies, Inc. | (22.6) | (22.4) | (96.6) | (50.5) |
Net income (loss) attributable to noncontrolling interests | 0.2 | 0 | 1.2 | (0.1) |
Net income (loss) | (22.4) | (22.4) | (95.4) | (50.6) |
Other comprehensive income (loss) before income taxes: | ||||
Unrealized investment gains (losses), net of related offsets | (54.7) | 51.9 | (51.3) | 75.6 |
Net pension liability adjustment | 1.7 | 1.7 | 3.1 | 3.4 |
Other comprehensive income (loss) before income taxes | (53) | 53.6 | (48.2) | 79 |
Less: Income tax expense (benefit) related to: | ||||
Unrealized investment gains (losses), net of related offsets | (24.4) | 33.4 | (17.4) | 66.1 |
Net pension liability adjustment | 0 | 0 | 0 | 0 |
Total income tax expense (benefit) | (24.4) | 33.4 | (17.4) | 66.1 |
Other comprehensive income (loss), net of income taxes | (28.6) | 20.2 | (30.8) | 12.9 |
Comprehensive income (loss) | (51) | (2.2) | (126.2) | (37.7) |
Less: Comprehensive income (loss) attributable to noncontrolling interests | 0.2 | 0 | 1.2 | (0.1) |
Comprehensive income (loss) attributable to The Phoenix Companies, Inc. | $ (51.2) | $ (2.2) | $ (127.4) | $ (37.6) |
EARNINGS (LOSS) PER SHARE: | ||||
Income (loss) from continuing operations – basic (USD per share) | $ (3.83) | $ (3.80) | $ (16.61) | $ (8.58) |
Income (loss) from continuing operations – diluted (USD per share) | (3.83) | (3.80) | (16.61) | (8.58) |
Income (loss) from discontinued operations – basic (USD per share) | (0.10) | (0.10) | (0.19) | (0.21) |
Income (loss) from discontinued operations – diluted (USD per share) | (0.10) | (0.10) | (0.19) | (0.21) |
Net income (loss) attributable to The Phoenix Companies, Inc.– basic (USD per share) | (3.93) | (3.90) | (16.80) | (8.79) |
Net income (loss) attributable to The Phoenix Companies, Inc. – diluted (USD per share) | $ (3.93) | $ (3.90) | $ (16.80) | $ (8.79) |
Basic weighted-average common shares outstanding (shares) | 5,751 | 5,749 | 5,751 | 5,745 |
Diluted weighted-average common shares outstanding (shares) | 5,751 | 5,749 | 5,751 | 5,745 |
Consolidated Interim Unaudited3
Consolidated Interim Unaudited Balance Sheets - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
ASSETS: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | $ 12,547.1 | $ 12,679.3 |
Available-for-sale equity securities, at fair value (cost of $147.2 and $156.0) | 168.3 | 179.5 |
Short-term investments | 174.6 | 149.7 |
Limited partnerships and other investments | 543.7 | 542.8 |
Policy loans, at unpaid principal balances | 2,360.7 | 2,352.1 |
Derivative instruments | 104.1 | 161.3 |
Fair value investments | 213.9 | 235.4 |
Total investments | 16,112.4 | 16,300.1 |
Cash and cash equivalents | 557.3 | 450 |
Accrued investment income | 194.2 | 176.7 |
Reinsurance recoverable | 550 | 559.1 |
Deferred policy acquisition costs | 893.6 | 848.6 |
Deferred income taxes, net | 51.6 | 34.2 |
Other assets | 336.6 | 311.3 |
Discontinued operations assets | 44.9 | 45.2 |
Separate account assets | 2,855.2 | 3,020.7 |
Total assets | 21,595.8 | 21,745.9 |
LIABILITIES: | ||
Policy liabilities and accruals | 12,387.1 | 12,417.6 |
Policyholder deposit funds | 4,220.8 | 3,955 |
Dividend obligations | 827.2 | 916.8 |
Indebtedness | 378.9 | 378.9 |
Pension and post-employment liabilities | 374.1 | 380 |
Other liabilities | 297.5 | 289.8 |
Discontinued operations liabilities | 39.9 | 40.5 |
Separate account liabilities | 2,855.2 | 3,020.7 |
Total liabilities | $ 21,380.7 | $ 21,399.3 |
CONTINGENCIES AND COMMITMENTS (Notes 19 & 20) | ||
STOCKHOLDERS’ EQUITY: | ||
Common stock, $.01 par value: 5.8 million and 5.8 million shares outstanding | $ 0.1 | $ 0.1 |
Additional paid-in capital | 2,632.8 | 2,632.8 |
Accumulated other comprehensive income (loss) | (265.2) | (234.4) |
Retained earnings (accumulated deficit) | (1,985.6) | (1,889) |
Treasury stock, at cost: 0.7 million and 0.7 million shares | (182.9) | (182.9) |
Total The Phoenix Companies, Inc. stockholders’ equity | 199.2 | 326.6 |
Noncontrolling interests | 15.9 | 20 |
Total stockholders’ equity | 215.1 | 346.6 |
Total liabilities and stockholders’ equity | $ 21,595.8 | $ 21,745.9 |
Consolidated Interim Unaudited4
Consolidated Interim Unaudited Balance Sheets (Parenthetical) - USD ($) shares in Millions, $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Available-for-sale debt securities, amortized cost | $ 12,056 | $ 11,978 |
Available-for-sale equity securities, at cost | $ 147.2 | $ 156 |
Common stock par value (USD per share) | $ 0.01 | $ 0.01 |
Shares outstanding (in shares) | 5.8 | 5.8 |
Treasury stock (in shares) | 0.7 | 0.7 |
Consolidated Interim Unaudited5
Consolidated Interim Unaudited Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
OPERATING ACTIVITIES: | ||
Net income (loss) | $ (96.6) | $ (50.5) |
Net realized gains / losses | (15.7) | (22.7) |
Policy acquisition costs deferred | (47.3) | (33.2) |
Policy acquisition cost amortization | 41.7 | 43.7 |
Amortization and depreciation | 2.8 | 3 |
Interest credited | 75.3 | 70.2 |
Equity in earnings of limited partnerships and other investments | (29.3) | (26.1) |
Change in: | ||
Accrued investment income | (84.5) | (79) |
Deferred income taxes, net | 0 | (25.6) |
Reinsurance recoverable | 10.8 | 5.8 |
Policy liabilities and accruals | (213.7) | (237.5) |
Dividend obligations | 9 | 29.5 |
Pension and post-employment liabilities | (2.8) | (10) |
Impact of operating activities of consolidated investment entities, net | 6.9 | (8.8) |
Other operating activities, net | (3.1) | 14.6 |
Cash provided by (used for) operating activities | (315.1) | (281.2) |
Purchases of: | ||
Available-for-sale debt securities | (1,041.8) | (871.4) |
Available-for-sale equity securities | (12.5) | (2.7) |
Short-term investments | (448.9) | (1,058.9) |
Derivative instruments | (37.8) | (33) |
Fair value and other investments | (0.7) | (0.6) |
Sales, repayments and maturities of: | ||
Available-for-sale debt securities | 1,045.8 | 662.7 |
Available-for-sale equity securities | 17.2 | 4.4 |
Short-term investments | 424.3 | 915.6 |
Derivative instruments | 32.1 | 53.6 |
Fair value and other investments | (12.4) | (14.1) |
Contributions to limited partnerships and limited liability corporations | (55.8) | (34) |
Distributions from limited partnerships and limited liability corporations | 77.7 | 64 |
Policy loans, net | 44.2 | 78 |
Impact of investing activities of consolidated investment entities, net | 0 | 0 |
Other investing activities, net | 0 | (4.4) |
Cash provided by (used for) investing activities | 56.2 | (212.6) |
FINANCING ACTIVITIES: | ||
Policyholder deposits | 769.7 | 713 |
Policyholder withdrawals | (578.3) | (611.9) |
Net transfers (to) from separate accounts | 178.6 | 227.7 |
Impact of financing activities of consolidated investment entities, net | (5.3) | 0.2 |
Cash provided by (used for) financing activities | 364.7 | 329 |
Change in cash and cash equivalents | 105.8 | (164.8) |
Change in cash included in discontinued operations assets | 1.5 | (1.4) |
Cash and cash equivalents, beginning of period | 450 | 496.4 |
Cash and cash equivalents, end of period | 557.3 | 330.2 |
Supplemental Disclosure of Cash Flow Information | ||
Income taxes (paid) refunded | (16.8) | 0 |
Interest expense on indebtedness paid | (13.9) | (13.9) |
Non-Cash Transactions During the Period | ||
Investment exchanges | $ 61.1 | $ 62.4 |
Consolidated Interim Unaudited6
Consolidated Interim Unaudited Statements of Changes in Stockholders' Equity - USD ($) $ in Millions | Total | COMMON STOCK: | ADDITIONAL PAID-IN CAPITAL: | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS): | RETAINED EARNINGS (ACCUMULATED DEFICIT): | TREASURY STOCK, AT COST: | TOTAL STOCKHOLDERS’ EQUITY ATTRIBUTABLE TO THE PHOENIX COMPANIES,INC.: | NONCONTROLLING INTERESTS: |
Balance, beginning of period at Dec. 31, 2013 | $ 601.3 | $ 0.1 | $ 2,633.1 | $ (185) | $ (1,675.8) | $ (182.9) | $ 589.5 | $ 11.8 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of shares and compensation expense on stock compensation awards | (0.4) | |||||||
Other comprehensive income (loss) | 12.9 | 12.9 | ||||||
Net income (loss) | (50.6) | (50.5) | (0.1) | |||||
Change in stockholders’ equity attributable to The Phoenix Companies, Inc. | (38) | (38) | 0.1 | |||||
Balance, end of period at Jun. 30, 2014 | 563.3 | 0.1 | 2,632.7 | (172.1) | (1,726.3) | (182.9) | 551.5 | 11.8 |
Balance, beginning of period at Dec. 31, 2014 | 346.6 | 0.1 | 2,632.8 | (234.4) | (1,889) | (182.9) | 326.6 | 20 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of shares and compensation expense on stock compensation awards | 0 | |||||||
Other comprehensive income (loss) | (30.8) | (30.8) | ||||||
Net income (loss) | (95.4) | (96.6) | 1.2 | |||||
Change in stockholders’ equity attributable to The Phoenix Companies, Inc. | (131.5) | (127.4) | (5.3) | |||||
Balance, end of period at Jun. 30, 2015 | $ 215.1 | $ 0.1 | $ 2,632.8 | $ (265.2) | $ (1,985.6) | $ (182.9) | $ 199.2 | $ 15.9 |
Organization and Description of
Organization and Description of Business | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business The Phoenix Companies, Inc. is a holding company for its insurance and financial services subsidiaries, principally Phoenix Life Insurance Company (“Phoenix Life”) and PHL Variable Insurance Company (“PHL Variable”) that provide life insurance and annuity products to both affluent and middle market consumers. Phoenix Life and PHL Variable, collectively with Phoenix Life and Annuity Company (“PLAC”) and American Phoenix Life and Reassurance (“APLAR”), are our Life Companies (collectively, with the holding company, “we,” “our,” “us,” the “Company,” “PNX” or “Phoenix”). Our products are distributed through independent agents and financial advisors. Most of our life insurance in force is permanent life insurance insuring one or more lives and our annuity products include fixed and variable annuities with a variety of death benefit and guaranteed living benefit options. We operate two businesses segments: Life and Annuity and Saybrus Partners, Inc. (“Saybrus”). The Life and Annuity segment includes individual life insurance and annuity products, including our closed block. Saybrus provides dedicated life insurance and other consulting services to financial advisors in partner companies, as well as support for sales of Phoenix’s product line through independent distribution organizations. As a result of discussions with its regulators related to the execution of an intercompany reinsurance treaty between Phoenix Life and PHL Variable during the second quarter of 2015, Phoenix announced its intention to de-stack its insurance company subsidiaries making PHL Variable, PLAC and APLAR subsidiaries of the holding company. See Note 21 to these consolidated interim unaudited financial statements regarding the de-stacking. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies We have prepared these consolidated interim unaudited financial statements in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”), which differs materially from the accounting practices prescribed by various insurance regulatory authorities. Our consolidated interim unaudited financial statements include the accounts of the Company and its subsidiaries. Intercompany balances and transactions have been eliminated in consolidating these consolidated interim unaudited financial statements. These consolidated interim unaudited financial statements include all adjustments (consisting primarily of accruals) considered necessary for the fair statement of the consolidated balance sheets, consolidated statements of operations and comprehensive income, consolidated statements of cash flows and consolidated statements of changes in stockholders’ equity for the interim periods. Certain financial information that is not required for interim reporting has been omitted. Financial results for the three and six months ended June 30, 2015 are not necessarily indicative of full year results. These consolidated interim unaudited financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2014 contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 (the “ 2014 Form 10-K”). In the 2014 Form 10-K, the Company restated its financial statements for the year ended December 31, 2013, the three-months ended December 31, 2013, and the three-months ended June 30, 2014 and revised its financial statements for all other periods presented. The unaudited financial statements for the three month period ended June 30, 2014 contained in this Form 10-Q are presented on a restated basis, and the unaudited financial statements for the six month period ended June 30, 2014 contained in this Form 10-Q are presented on a revised basis, consistent with the restated and revised financial statements contained in the 2014 Form 10-K. Use of estimates In preparing these consolidated interim unaudited financial statements in conformity with U.S. GAAP, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated interim unaudited financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions are made in the determination of estimated gross profits (“EGPs”) and estimated gross margins (“EGMs”) used in the valuation and amortization of assets and liabilities associated with universal life and annuity contracts; policyholder liabilities and accruals; valuation of investments in debt and equity securities; limited partnerships and other investments; valuation of deferred tax assets; pension and other post-employment benefits liabilities; and accruals for contingent liabilities. Certain of these estimates are particularly sensitive to market conditions and/or volatility in the debt or equity markets which could have a material impact on the consolidated interim unaudited financial statements. Actual results could differ from these estimates. Holding company liquidity The Phoenix Companies, Inc. serves as the holding company for our insurance subsidiaries and does not have any significant operations of its own. As of June 30, 2015 and December 31, 2014 , liquidity (cash, short-term investments, available-for-sale debt securities and other near-cash assets) totaled $64.5 million and $78.3 million , respectively. Of these amounts, $10.8 million is included in the escrow described below. In addition to existing cash and securities, the holding company’s primary source of liquidity consists of dividends from Phoenix Life. Under New York Insurance Law, Phoenix Life is permitted to pay stockholder dividends to the holding company in any calendar year without prior approval from the New York Department of Financial Services (the “NYDFS”) in the amount of the lesser of 10% of Phoenix Life’s surplus to policyholders as of the immediately preceding calendar year or Phoenix Life’s statutory net gain from operations for the immediately preceding calendar year, not including realized capital gains. Based on this calculation, Phoenix Life would be able to pay a dividend of $59.9 million in 2015 . During the six months ended June 30, 2015 , Phoenix Life declared $30.0 million in dividends. As a result of the execution of an intercompany reinsurance treaty between Phoenix Life and PHL Variable during the second quarter of 2015, Phoenix agreed it will not use any future dividends paid by Phoenix Life to meet the operating needs of PHL Variable, including the additional dividends declared subsequent to June 30, 2015 . (See Note 21 to these interim unaudited financial statements for additional information.) The Company believes it has adequate capital resources to meet PHL Variable’s currently anticipated capital needs. Our principal needs at the holding company level are debt service, income taxes and certain operating expenses. • We pay interest on senior unsecured bonds. Interest paid on senior unsecured bonds for the six months ended June 30, 2015 and 2014 was $10.0 million and $10.0 million , respectively. As of June 30, 2015 , future minimum annual principal payments on senior unsecured bonds are $268.6 million in 2032. See Note 8 to these consolidated interim unaudited financial statements for additional information. • The holding company and its subsidiaries have a tax sharing agreement. The subsidiaries compute their provision for federal income taxes as if they were each filing a separate federal income tax return. There are quarterly settlements among the companies representing each of the subsidiaries’ estimated separate company tax liability for the current tax year and any amount that such subsidiary overpaid to the holding company for a taxable year. As part of the intercompany tax sharing agreement, the holding company is required to hold funds in escrow for the benefit of Phoenix Life in the event Phoenix Life incurs future taxable losses. In accordance with its regulatory obligation, in October 2014 the Company funded the escrow with $78.9 million of assets including treasury stock, a surplus note issued by PHL Variable and $10.8 million of cash from the holding company. • The holding company pays operating expenses associated with its operation. It has also paid the majority of the expenses associated with the restatements of our prior period financial statements. Holding company operating expenses for the six months ended June 30, 2015 and 2014 were $17.4 million and $63.4 million , respectively. There are expense sharing arrangements in place among the holding company and its operating subsidiaries. However, given unique circumstances regarding the restatements of prior period financial statements, management determined it was in the best interest of the Company that the majority of these costs be borne by the holding company. The holding company also provides capital support to its operating subsidiaries. Management targets a minimum Company Action Level risk-based capital ratio of 225% (Authorized Control Level ratio of 450% ) at PHL Variable. As of June 30, 2015 , primarily as a result of the execution of the intercompany reinsurance treaty entered into between operating subsidiaries to optimize statutory capital deployment, PHL Variable had an estimated risk-based capital ratio of 201% , compared with 122% as of March 31, 2015 and 218% as of December 31, 2014 . As a result of the de-stacking, an existing commitment by Phoenix Life to keep the PHL Variable’s capital and surplus at Authorized Control Level risk-based capital of 250% ( 125% Company Action Level) will be extinguished. The Phoenix Companies, Inc. made $15.0 million and $45.0 million of capital contributions for the benefit of PHL Variable in 2014 and 2013, respectively, and may need to again in the future. The need for additional capital contributions to operating subsidiaries or an inability to reduce expenses at the holding company could constrain the ability of the holding company to meet its debt obligations. Based on management’s review of the holding company’s liquidity position, we believe it can continue to meet its liquidity obligations in the holding company through 2015 and beyond. Adoption of new accounting standards Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity In April 2014, the Financial Accounting Standards Board (the “FASB”) issued updated guidance that changes the criteria for reporting discontinued operations and introduces new financial statement disclosures. The new guidance is effective prospectively to new disposals and new classifications of disposal groups as held for sale that occur within annual periods beginning on or after December 15, 2014 and interim periods within those annual periods. This new guidance did not have any impact on the Company’s consolidated financial position, results of operations and financial statement disclosures. Accounting for Troubled Debt Restructurings by Creditors In January 2014, the FASB issued updated guidance for troubled debt restructurings clarifying when an in substance repossession or foreclosure occurs, and when a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan. The new guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. This new guidance did not have a material impact on the Company’s consolidated financial position, results of operations and financial statement disclosures. Accounting for Investments in Qualified Affordable Housing Projects In January 2014, the FASB issued updated guidance regarding investments in flow-through limited liability entities that manage or invest in affordable housing projects that qualify for the low-income housing tax credit. Under the guidance, an entity is permitted to make an accounting policy election to amortize the initial cost of its investment in proportion to the tax credits and other tax benefits received and recognize the net investment performance in the statement of operations as a component of income tax expense (benefit) if certain conditions are met. The new guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. This new guidance did not have a material impact on the Company’s consolidated financial position, results of operations and financial statement disclosures. Accounting standards not yet adopted For information regarding additional accounting standards that the Company has not yet adopted, see the “Accounting Standards Not Yet Adopted” section of Note 3 of Notes to the Consolidated Financial Statements in the Company’s 2014 Form 10-K. There have been no changes other than as noted below. Disclosures about Short-Duration Contracts In May 2015, the FASB issued guidance which requires enhanced disclosure requirements for insurers relating to short-duration insurance contracts including claims and the unpaid claims liability rollforward to interim periods. For public business entities, the guidance is effective for annual reporting periods beginning after December 15, 2015 and interim periods within annual periods beginning after December 15, 2016. Early adoption is permitted. The Company is currently assessing the impact of the guidance on its consolidated financial position, results of operations and financial statement disclosures. Fair Value Measurement: Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or its Equivalent) In May 2015, the FASB issued guidance for investments measured at net asset value (“NAV”), as a practical expedient for fair value, to be excluded from the fair value hierarchy. The new guidance requires reporting entities to reconcile the fair value hierarchy disclosure to the balance sheet by disclosing the amount of investments measured using the practical expedient and to make certain disclosures about the nature and risks of those investments. If the NAV is actually at fair value, then a reporting entity would continue to include the investment in the fair value hierarchy and make all required fair value disclosures. For public business entities, the guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The new guidance is retrospective to all periods presented and early adoption is permitted. The Company is currently assessing the impact of the guidance on its consolidated financial position, results of operations and financial statement disclosures. Customer’s Accounting for Fees Paid in a Cloud Computing Agreement In April 2015, the FASB issued new guidance on a customer’s accounting for fees paid in a cloud computing arrangement (“CCA”). Under the new guidance, customers will apply the same criteria as vendors to determine whether a CCA contains a software license or is solely a service contract. The new guidance provides guidance on which existing accounting model should be applied. For public business entities, the guidance is effective for annual reporting periods, including interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. The Company is currently assessing the impact of the guidance on its consolidated financial position, results of operations and financial statement disclosures. Retirement Benefits - Practical Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Assets In April 2015, the FASB issued guidance for a practical expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Assets. For an entity with a fiscal year-end that does not coincide with a month-end, the new guidance provides for a practical expedient that permits the entity to measure defined benefit assets and obligations using the month-end that is closest to the entity’s fiscal year-end and apply that practical expedient consistently from year to year. In addition, for a significant event such as a plan amendment, settlement or curtailment, the new guidance provides for a practical expedient that permits the entity to remeasure the defined benefit plan assets and obligations using the month-end that is closest to the date of the significant event. An entity is required to disclose the accounting policy election and the date used to measure the defined benefit assets and obligations in accordance with this new guidance. For public business entities, the guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted and the new guidance should be applied prospectively. The Company is currently assessing the impact of the guidance on its consolidated financial position, results of operations and financial statement disclosures. Interest - Imputation of Interest (Simplifying the Presentation of Debt Issuance Costs) In April 2015, the FASB issued guidance that changes the presentation of debt issuance costs in financial statements. Under the new guidance, a company would present debt issuance costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. The recognition and measurement of debt issuance costs is not affected by the new guidance. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, and should be applied retrospectively to all periods presented. Early adoption is allowed for all entities for financial statements that have not been previously issued. This guidance will not have any effect on the Company’s consolidated financial position or results of operations. Significant accounting policies Our significant accounting policies are presented in the notes to our consolidated financial statements for the year ended December 31, 2014 contained in the 2014 Form 10-K except for the following update to our expected future interest rate assumption as noted more fully below. Deferred Policy Acquisition Costs (“DAC”) In the first quarter of 2015 , the Company unlocked its assumption for expected future interest rates. This best estimate assumption reflects current yields and expected maturities of our fixed income portfolio combined with expected reinvestment rates. The interest rates begin with prevailing rates but are assumed to revert back to the long-term yield over the mean reversion period. The unlock impacted DAC, certain additional policyholder liabilities for guaranteed benefits on variable annuity and universal life contracts and the universal life profits followed by losses (“PFBL”). The result was a net expense of approximately $0.2 million recorded in the three months ended March 31, 2015. The following table summarizes the current interest rate assumption as updated in the first quarter unlock: Significant Assumption Product Explanation and Derivation Interest rates and default rates Fixed and Indexed Annuities Universal Life Participating Life Investment returns are based on the current yields and maturities of our fixed income portfolio combined with expected reinvestment rates from current market rates. Reinvestment rates are assumed to revert to long-term rates and long-term default rates over the mean reversion period. Contractually permitted future changes in credited rates are assumed to help support investment margins. |
Reinsurance
Reinsurance | 6 Months Ended |
Jun. 30, 2015 | |
Insurance [Abstract] | |
Reinsurance | Reinsurance Reinsurance recoverable includes balances due from reinsurers for paid and unpaid losses and is presented net of an allowance for uncollectable reinsurance. The reinsurance recoverable balance is $550.0 million and $559.1 million as of June 30, 2015 and December 31, 2014 , respectively. Other reinsurance activity is shown below. Direct Business and Reinsurance in Continuing Operations: Three Months Ended Six Months Ended ($ in millions) 2015 2014 2015 2014 Direct premiums $ 115.4 $ 119.1 $ 226.4 $ 234.9 Premiums assumed (0.1 ) 0.6 1.7 2.4 Premiums ceded [1] (28.7 ) (36.5 ) (63.1 ) (74.5 ) Premiums $ 86.6 $ 83.2 $ 165.0 $ 162.8 Percentage of amount assumed to net premiums (0.1)% 0.7% 1.0% 1.5% Direct policy benefits incurred $ 206.6 $ 196.8 $ 533.9 $ 375.3 Policy benefits assumed 4.2 25.8 5.8 38.4 Policy benefits ceded (38.1 ) (64.8 ) (126.6 ) (133.5 ) Premiums paid [2] 16.0 16.0 38.6 38.3 Policy benefits [3] $ 188.7 $ 173.8 $ 451.7 $ 318.5 ——————— [1] Primarily represents premiums ceded to reinsurers related to traditional whole life and term insurance policies. [2] For universal life and variable universal life contracts, premiums paid to reinsurers are reflected within policy benefits. See Note 2 to these consolidated interim unaudited financial statements for additional information regarding significant accounting policies. [3] Policy benefit amounts above exclude changes in reserves, interest credited to policyholders and other items, which total $98.6 million and $127.5 million , net of reinsurance, for the three months ended June 30, 2015 and 2014 , respectively, and $127.6 million and $213.1 million , net of reinsurance, for the six months ended June 30, 2015 and 2014 , respectively. We remain liable to the extent that reinsuring companies may not be able to meet their obligations under reinsurance agreements in effect. Failure of the reinsurers to honor their obligations could result in losses to the Company. Since we bear the risk of nonpayment, on a quarterly basis we evaluate the financial condition of our reinsurers and monitor concentrations of credit risk. Based on our review of their financial statements, reputation in the reinsurance marketplace and other relevant information, we believe that we have no material exposure to uncollectible life reinsurance. At June 30, 2015 , five major reinsurance companies account for approximately 67% of the reinsurance recoverable. |
Demutualization and Closed Bloc
Demutualization and Closed Block | 6 Months Ended |
Jun. 30, 2015 | |
Insurance [Abstract] | |
Demutualization and Closed Block | Demutualization and Closed Block In 1999, we began the process of reorganizing and demutualizing our then principal operating company, Phoenix Home Life. We completed the process in June 2001, when all policyholder membership interests in this mutual company were extinguished and eligible policyholders of the mutual company received shares of PNX common stock, together with cash and policy credits, as compensation. To protect the future dividends of these policyholders, we also established a closed block for their existing policies. Because closed block liabilities exceed closed block assets, we have a net closed block liability at June 30, 2015 and December 31, 2014 , respectively. This net liability represents the maximum future earnings contribution to be recognized from the closed block and the change in this net liability each period is in the earnings contribution recognized from the closed block for the period. To the extent that actual cash flows differ from amounts anticipated, we may adjust policyholder dividends. If the closed block has excess funds, those funds will be available only to the closed block policyholders. However, if the closed block has insufficient funds to make policy benefit payments that are guaranteed, the payments will be made from assets outside of the closed block. Closed Block Assets and Liabilities as of: ($ in millions) June 30, December 31, 2014 Inception Available-for-sale debt securities $ 5,699.6 $ 5,877.0 $ 4,773.1 Available-for-sale equity securities 83.5 91.7 — Short-term investments 59.6 — — Limited partnerships and other investments 355.8 343.4 399.0 Policy loans 1,140.5 1,159.1 1,380.0 Fair value investments 54.1 59.8 — Total closed block investments 7,393.1 7,531.0 6,552.1 Cash and cash equivalents 70.2 89.6 — Accrued investment income 78.0 80.7 106.8 Reinsurance recoverable 23.5 19.1 — Deferred income taxes, net 288.6 290.3 389.4 Other closed block assets 50.0 67.4 41.4 Total closed block assets 7,903.4 8,078.1 7,089.7 Policy liabilities and accruals 7,950.4 8,058.2 8,301.7 Policyholder dividends payable 198.0 201.9 325.1 Policy dividend obligation 629.0 714.8 — Other closed block liabilities 60.7 48.0 12.3 Total closed block liabilities 8,838.1 9,022.9 8,639.1 Excess of closed block liabilities over closed block assets [1] 934.7 944.8 $ 1,549.4 Less: Excess of closed block assets over closed block liabilities attributable to noncontrolling interests (9.7 ) (11.8 ) Excess of closed block liabilities over closed block assets attributable to The Phoenix Companies, Inc. $ 944.4 $ 956.6 ——————— [1] The maximum future earnings summary to inure to the benefit of the stockholders is represented by the excess of closed block liabilities over closed block assets. All unrealized investment gains (losses), net of income tax, have been allocated to the policyholder dividend obligation. Closed Block Revenues and Expenses and Changes in Policyholder Dividend Obligations: Three Months Ended Six Months Ended ($ in millions) 2015 2014 2015 2014 Closed block revenues Premiums $ 78.8 $ 75.8 $ 149.0 $ 148.6 Net investment income 95.0 93.7 195.2 201.0 Net realized gains (losses) 0.6 5.0 (4.0 ) 10.3 Total revenues 174.4 174.5 340.2 359.9 Policy benefits 108.4 122.1 223.9 225.9 Other operating expenses 1.4 0.4 1.5 0.6 Total benefits and expenses 109.8 122.5 225.4 226.5 Closed block contribution to income before dividends and income taxes 64.6 52.0 114.8 133.4 Policyholder dividends (54.9 ) (42.6 ) (95.0 ) (114.8 ) Closed block contribution to income before income taxes 9.7 9.4 19.8 18.6 Applicable income tax expense 3.4 3.3 6.9 6.5 Closed block contribution to income 6.3 6.1 12.9 12.1 Less: Closed block contribution to income attributable to noncontrolling interests 0.1 (0.1 ) 0.6 (0.2 ) Closed block contribution to income attributable to The Phoenix Companies, Inc. $ 6.2 $ 6.2 $ 12.3 $ 12.3 Closed Block Policyholder Dividend Obligation as of: Three Months Ended Six Months Ended ($ in millions) 2015 2014 2015 2014 Policyholder dividend obligation Policyholder dividends recorded through earnings $ 54.9 $ 42.6 $ 95.0 $ 114.8 Policyholder dividends recorded through OCI (161.4 ) 77.6 (98.7 ) 159.2 Additions to (reductions of) policyholder dividend liabilities (106.5 ) 120.2 (3.7 ) 274.0 Policyholder dividends paid (43.5 ) (43.1 ) (86.0 ) (85.0 ) Increase (decrease) in policyholder dividend liabilities (150.0 ) 77.1 (89.7 ) 189.0 Policyholder dividend liabilities, beginning of period 977.0 817.4 916.7 705.5 Policyholder dividend liabilities, end of period 827.0 894.5 827.0 894.5 Policyholder dividends payable, end of period (198.0 ) (207.1 ) (198.0 ) (207.1 ) Policyholder dividend obligation, end of period $ 629.0 $ 687.4 $ 629.0 $ 687.4 The policyholder dividend obligation includes approximately $289.4 million and $277.9 million , respectively, for cumulative closed block earnings in excess of expected amounts calculated at the date of demutualization as of June 30, 2015 and December 31, 2014 , respectively. These closed block earnings will not inure to stockholders, but will result in additional future dividends to closed block policyholders unless otherwise offset by future performance of the closed block that is less favorable than expected. If actual cumulative performance is less favorable than expected, only actual earnings will be recognized in net income. As of June 30, 2015 and December 31, 2014 , the policyholder dividend obligation also includes $339.6 million and $436.9 million , respectively, of net unrealized gains on investments supporting the closed block liabilities. |
Deferred Policy Acquisition Cos
Deferred Policy Acquisition Costs | 6 Months Ended |
Jun. 30, 2015 | |
Deferred Policy Acquisition Costs Disclosures [Abstract] | |
Deferred Policy Acquisition Costs | Deferred Policy Acquisition Costs The balances of and changes in deferred policy acquisition costs (“DAC”) as of and for the periods ended June 30, 2015 and 2014 are as follows: Changes in Deferred Policy Acquisition Costs: Three Months Ended Six Months Ended ($ in millions) 2015 2014 2015 2014 Balance, beginning of period $ 836.5 $ 906.9 $ 848.6 $ 947.8 Policy acquisition costs deferred 25.5 18.6 47.3 33.2 Costs amortized to expenses: Recurring costs (21.4 ) (17.1 ) (36.5 ) (52.8 ) Assumption unlocking — — (6.6 ) — Realized investment gains (losses) (3.2 ) (2.0 ) 1.4 9.1 Offsets to net unrealized investment gains or losses included in AOCI 56.2 (24.6 ) 39.4 (55.5 ) Balance, end of period $ 893.6 $ 881.8 $ 893.6 $ 881.8 |
Sales Inducements
Sales Inducements | 6 Months Ended |
Jun. 30, 2015 | |
Deferred Sales Inducements [Abstract] | |
Sales Inducements | Sales Inducements The balances of and changes in sales inducements as of and for the periods ended June 30, 2015 and 2014 are as follows: Changes in Deferred Sales Inducement Activity: Three Months Ended Six Months Ended ($ in millions) 2015 2014 2015 2014 Balance, beginning of period $ 79.2 $ 76.1 $ 79.4 $ 77.4 Sales inducements deferred 4.3 5.4 9.6 7.5 Amortization charged to income (2.9 ) (2.6 ) (4.8 ) (2.8 ) Offsets to net unrealized investment gains or losses included in AOCI 7.3 (2.9 ) 3.7 (6.1 ) Balance, end of period $ 87.9 $ 76.0 $ 87.9 $ 76.0 Separate Accounts, Death Benefits and Other Insurance Benefit Features and Embedded Product Derivatives Separate accounts Separate account products are those for which a separate investment and liability account is maintained on behalf of the policyholder. Investment objectives for these separate accounts vary by fund account type, as outlined in the applicable fund prospectus or separate account plan of operations. We have variable annuity and variable life insurance contracts that are classified as separate account products. The assets supporting these contracts are carried at fair value and are reported as separate account assets with an equivalent amount reported as separate account liabilities. Amounts assessed against the policyholder for mortality, administration and other services are included within revenue in fee income. Assets with fair value and carrying value of $2.8 billion and $2.6 billion at June 30, 2015 and December 31, 2014 , respectively, supporting fixed indexed annuities are maintained in accounts that are legally segregated from the other assets of the Company, but policyholders do not direct the investment of those assets and the investment performance does not pass through to the policyholders. These assets supporting fixed indexed annuity contracts are reported within the respective investment line items on the consolidated balance sheets. Separate Account Investments of Account Balances of Variable Annuity Contracts with Insurance Guarantees: June 30, December 31, 2014 ($ in millions) Debt securities $ 346.1 $ 375.9 Equity funds 1,522.9 1,638.6 Other 46.1 49.9 Total $ 1,915.1 $ 2,064.4 Death benefits and other insurance benefit features Variable annuity guaranteed benefits We establish policy benefit liabilities for minimum death and income benefit guarantees relating to certain annuity policies as follows: • Liabilities associated with the guaranteed minimum death benefit (“GMDB”) are determined by estimating the expected value of death benefits in excess of the projected account balance and recognizing the excess ratably over the expected life of the contract based on total expected assessments. The assumptions used for calculating the liabilities are generally consistent with those used for amortizing DAC. • Liabilities associated with the guaranteed minimum income benefit (“GMIB”) are determined by estimating the expected value of the income benefits in excess of the projected account balance at the date of annuitization and recognizing the excess ratably over the accumulation period based on total expected assessments. The assumptions used for calculating such guaranteed income benefit liabilities are generally consistent with those used for amortizing DAC. For variable annuities with GMDB and GMIB, reserves for these guarantees are calculated and recorded in policy liabilities and accruals on our consolidated balance sheets. Changes in the liability are recorded in policy benefits on our consolidated statements of operations and comprehensive income. We regularly evaluate estimates used and adjust the additional liability balances, with a related charge or credit to benefit expense if actual experience or other evidence suggests that earlier assumptions should be revised. Changes in Guaranteed Insurance Benefit Liability Balances: Three Months Ended Six Months Ended ($ in millions) Annuity GMDB Annuity GMIB Annuity GMDB Annuity GMIB Balance, beginning of period $ 20.7 $ 14.6 $ 21.4 $ 17.1 Incurred 0.5 0.3 (0.1 ) (2.2 ) Paid (0.9 ) (0.2 ) (1.5 ) (0.2 ) Assumption unlocking — — 0.4 — Change due to net unrealized gains or losses included in AOCI (0.2 ) — (0.1 ) — Balance, end of period $ 20.1 $ 14.7 $ 20.1 $ 14.7 Changes in Guaranteed Insurance Benefit Liability Balances: Three Months Ended Six Months Ended ($ in millions) Annuity GMDB Annuity GMIB Annuity GMDB Annuity GMIB Balance, beginning of period $ 22.1 $ 9.6 $ 22.7 $ 9.8 Incurred 0.1 (0.7 ) — (0.8 ) Paid (0.8 ) — (1.4 ) — Assumption unlocking — — — — Change due to net unrealized gains or losses included in AOCI (0.1 ) — — (0.1 ) Balance, end of period $ 21.3 $ 8.9 $ 21.3 $ 8.9 For those guarantees of benefits that are payable in the event of death, the net amount at risk (“NAR”) is generally defined as the benefit payable in excess of the current account balance at our balance sheet date. We have entered into reinsurance agreements to reduce the net amount of risk on certain death benefits. Following are the major types of death benefits currently in force as defined in Note 11 to our consolidated financial statements in the 2014 Form 10-K: GMDB and GMIB Benefits by Type: June 30, 2015 ($ in millions) Account Value NAR before Reinsurance NAR after Reinsurance Average Attained Age of Annuitant GMDB return of premium $ 606.9 $ 1.5 $ 1.5 64 GMDB step up 1,619.3 111.4 17.6 65 GMDB earnings enhancement benefit (“EEB”) 27.2 3.2 3.2 65 GMDB greater of annual step up and roll up 21.9 5.1 5.1 69 Total GMDB at June 30, 2015 2,275.3 $ 121.2 $ 27.4 Less: General account value with GMDB 366.5 Subtotal separate account liabilities with GMDB 1,908.8 Separate account liabilities without GMDB 946.4 Total separate account liabilities $ 2,855.2 GMIB [1] at June 30, 2015 $ 292.4 66 GMDB and GMIB Benefits by Type: December 31, 2014 ($ in millions) Account Value NAR before Reinsurance NAR after Reinsurance Average Attained Age of Annuitant GMDB return of premium $ 661.5 $ 1.6 $ 1.6 63 GMDB step up 1,723.2 112.2 13.4 64 GMDB earnings enhancement benefit (“EEB”) 29.1 — — 65 GMDB greater of annual step up and roll up 22.7 4.8 4.8 69 Total GMDB at December 31, 2014 2,436.5 $ 118.6 $ 19.8 Less: General account value with GMDB 378.6 Subtotal separate account liabilities with GMDB 2,057.9 Separate account liabilities without GMDB 962.8 Total separate account liabilities $ 3,020.7 GMIB [1] at December 31, 2014 $ 319.6 65 ——————— [1] Policies with a GMIB also have a GMDB, however these benefits are not additive. When a policy terminates due to death, any NAR related to GMIB is released. Similarly, when a policy goes into benefit status on a GMIB, its GMDB NAR is released. Fixed indexed annuity guaranteed benefits Many of our fixed indexed annuities contain guaranteed benefits. We establish policy benefit liabilities for minimum death and minimum withdrawal benefit guarantees relating to these policies as follows: • Liabilities associated with the guaranteed minimum withdrawal benefit (“GMWB”) and Chronic Care guarantees are determined by estimating the value of the withdrawal benefits expected to be paid after the projected account value depletes and recognizing the value ratably over the accumulation period based on total expected assessments. Liabilities associated with the GMWB for the fixed indexed annuities differ from those contained on variable annuities in that the GMWB feature and the underlying contract, exclusive of the equity index crediting option, are fixed income instruments. • Liabilities associated with the GMDB are determined by estimating the expected value of death benefits in excess of the projected account balance and recognizing the excess ratably over the expected life of the contract based on total expected assessments. The assumptions used for calculating GMWB, GMDB and Chronic Care guarantees are generally consistent with those used for amortizing DAC. We regularly evaluate estimates used and adjust the additional liability balances, with a related charge or credit to benefit expense if actual experience or other evidence suggests that earlier assumptions should be revised. The GMWB, GMDB and Chronic Care guarantees on fixed indexed annuities are recorded in policy liabilities and accruals on our consolidated balance sheets. Changes in Guaranteed Liability Balances: Fixed Indexed Annuity GMWB and GMDB ($ in millions) Three Months Ended Six Months Ended 2015 2014 2015 2014 Balance, beginning of period $ 171.3 $ 104.1 $ 147.0 $ 85.4 Incurred 16.0 14.5 26.5 14.8 Paid (0.1 ) (0.1 ) (0.2 ) (0.2 ) Assumption unlocking — — — — Change due to net unrealized gains or losses included in AOCI (33.8 ) 16.7 (19.9 ) 35.2 Balance, end of period $ 153.4 $ 135.2 $ 153.4 $ 135.2 Universal life Liabilities for universal life contracts in excess of the account balance, some of which contain secondary guarantees, are generally determined by estimating the expected value of benefits and expenses when claims are triggered and recognizing those benefits and expenses over the accumulation period based on total expected assessments. The assumptions used in estimating these liabilities are generally consistent with those used for amortizing DAC. Changes in Guaranteed Liability Balances: Universal Life ($ in millions) Three Months Ended Six Months Ended 2015 2014 2015 2014 Balance, beginning of period $ 200.9 $ 178.0 $ 195.8 $ 170.6 Incurred 10.7 9.5 20.8 17.9 Paid (4.8 ) (1.3 ) (11.2 ) (3.2 ) Assumption unlocking — — — — Change due to net unrealized gains or losses included in AOCI (3.0 ) 0.9 (1.6 ) 1.8 Balance, end of period $ 203.8 $ 187.1 $ 203.8 $ 187.1 In addition, the universal life block of business has experience which produces profits in earlier periods followed by losses in later periods for which additional reserves are required to be held above the account value liability. These reserves are accrued ratably over historical and anticipated positive income to offset the future anticipated losses. The assumptions used in estimating these liabilities are generally consistent with those used for amortizing DAC. Changes in Additional Liability Balances: Universal Life ($ in millions) Three Months Ended Six Months Ended 2015 2014 2015 2014 Balance, beginning of period $ 387.7 $ 279.9 $ 351.5 $ 249.1 Incurred (8.3 ) 23.3 8.4 39.4 Assumption unlocking — — (6.8 ) — Change due to net unrealized gains or losses included in AOCI (28.2 ) (9.0 ) (1.9 ) 5.7 Balance, end of period $ 351.2 $ 294.2 $ 351.2 $ 294.2 Embedded derivatives Variable annuity embedded derivatives Certain separate account variable products may contain a GMWB, guaranteed minimum accumulation benefit (“GMAB”) and/or combination (“COMBO”) rider as defined in Note 11 to our consolidated financial statements in the 2014 Form 10-K. These features are accounted for as embedded derivatives as described below. Embedded Derivatives Non-Insurance Guaranteed Product Features: June 30, 2015 ($ in millions) Account Value Average Attained Age of Annuitant GMWB $ 450.2 65 GMAB 275.5 59 COMBO 5.3 65 Balance, end of period $ 731.0 Embedded Derivatives Non-Insurance Guaranteed Product Features: December 31, 2014 ($ in millions) Account Value Average Attained Age of Annuitant GMWB $ 496.8 65 GMAB 315.6 59 COMBO 7.1 65 Balance, end of period $ 819.5 The GMWB, GMAB and COMBO features represent embedded derivative liabilities in the variable annuity contracts that are required to be reported separately from the host variable annuity contract. These liabilities are recorded at fair value within policyholder deposit funds on the consolidated balance sheets with changes in fair value recorded in realized investment gains on the consolidated statements of operations and comprehensive income. The fair value of the GMWB, GMAB and COMBO obligation is calculated based on actuarial and capital market assumptions related to the projected cash flows, including benefits and related contract charges, over the lives of the contracts, incorporating expectations concerning policyholder behavior. As markets change, contracts mature and actual policyholder behavior emerges, these assumptions are continually evaluated and may from time to time be adjusted. Embedded derivative liabilities for GMWB, GMAB and COMBO are shown in the table below. Embedded Derivative Liabilities: ($ in millions) June 30, December 31, 2014 GMWB $ 4.5 $ 7.3 GMAB (0.9 ) (0.3 ) COMBO (0.2 ) (0.2 ) Total variable annuity embedded derivative liabilities $ 3.4 $ 6.8 There were no benefit payments made for the GMWB and GMAB in the three months ended June 30, 2015 and 2014 . We have established a risk management strategy under which we hedge our GMAB, GMWB and COMBO exposure using equity index options, equity index futures, equity index variance swaps, interest rate swaps and swaptions. Fixed indexed annuity embedded derivatives Fixed indexed annuities may also contain a variety of index-crediting options: policy credits that are calculated based on the performance of an outside equity market or other index over a specified term. These index options are embedded derivative liabilities that are required to be reported separately from the host contract. These index options are accounted for at fair value and recorded in policyholder deposit funds within the consolidated balance sheets with changes in fair value recorded in realized investment gains, in the consolidated statements of operations and comprehensive income. The fair value of these index options is calculated using the budget method. See Note 12 to these consolidated interim unaudited financial statements for additional information. Several additional inputs reflect our internally developed assumptions related to lapse rates and other policyholder behavior. The fair value of these embedded derivatives was $172.3 million and $153.9 million as of June 30, 2015 and December 31, 2014 , respectively. In order to manage the risk associated with these equity indexed-crediting features, we hedge using equity index options. See Note 11 to these consolidated interim unaudited financial statements for additional information. Embedded derivatives realized gains and losses Changes in the fair value of embedded derivatives associated with variable annuity and fixed indexed annuity contracts are recorded as realized investment gains and losses within the consolidated statements of operations and comprehensive income. Embedded derivatives gains and (losses) recognized in earnings for the three and six months ended June 30, 2015 are $4.4 million and $(5.9) million , respectively. Embedded derivatives gains and (losses) recognized in earnings for the three and six months ended June 30, 2014 are $(2.2) million and $(15.1) million , respectively. |
Investing Activities
Investing Activities | 6 Months Ended |
Jun. 30, 2015 | |
Investments [Abstract] | |
Investing Activities | Investing Activities Debt and equity securities The following tables present the debt and equity securities available-for-sale by sector held at June 30, 2015 and December 31, 2014 , respectively. The unrealized loss amounts presented below include the non-credit loss component of OTTI losses. We classify these investments into various sectors in line with industry conventions. Fair Value and Cost of Securities: June 30, 2015 ($ in millions) Amortized Cost Gross Unrealized Gains [1] Gross Unrealized Losses [1] Fair Value OTTI Recognized in AOCI [2] U.S. government and agency $ 388.1 $ 46.2 $ (0.1 ) $ 434.2 $ — State and political subdivision 541.2 32.6 (4.6 ) 569.2 (1.1 ) Foreign government 215.5 23.7 (0.8 ) 238.4 — Corporate 8,234.3 420.8 (120.2 ) 8,534.9 (6.8 ) Commercial mortgage-backed (“CMBS”) 590.3 40.8 (0.4 ) 630.7 — Residential mortgage-backed (“RMBS”) 1,574.8 62.2 (14.1 ) 1,622.9 (25.4 ) Collateralized debt obligations (“CDO”) / 260.9 1.9 (2.9 ) 259.9 (5.8 ) Other asset-backed (“ABS”) 250.9 10.8 (4.8 ) 256.9 (0.6 ) Available-for-sale debt securities $ 12,056.0 $ 639.0 $ (147.9 ) $ 12,547.1 $ (39.7 ) Amounts applicable to the closed block $ 5,369.8 $ 375.0 $ (45.2 ) $ 5,699.6 $ (9.6 ) Available-for-sale equity securities $ 147.2 $ 22.8 $ (1.7 ) $ 168.3 $ — Amounts applicable to the closed block $ 73.7 $ 11.0 $ (1.2 ) $ 83.5 $ — ——————— [1] Net unrealized investment gains and losses on securities classified as available-for-sale and certain other assets are included in our consolidated balance sheets as a component of AOCI. [2] Represents the amount of non-credit OTTI losses recognized in AOCI excluding net unrealized gains or losses subsequent to the date of impairment. The table above presents the special category of AOCI for debt securities that are other-than-temporarily impaired when the impairment loss has been split between the credit loss component (in earnings) and the non-credit component (separate category of AOCI). Fair Value and Cost of Securities: December 31, 2014 ($ in millions) Amortized Cost Gross Unrealized Gains [1] Gross Unrealized Losses [1] Fair Value OTTI Recognized in AOCI [2] U.S. government and agency $ 388.3 $ 55.2 $ (0.1 ) $ 443.4 $ — State and political subdivision 518.3 42.1 (2.5 ) 557.9 (1.1 ) Foreign government 205.8 26.5 (1.4 ) 230.9 — Corporate 7,942.7 530.0 (74.6 ) 8,398.1 (8.3 ) CMBS 602.9 48.4 (0.1 ) 651.2 (1.2 ) RMBS 1,862.5 81.6 (11.9 ) 1,932.2 (25.5 ) CDO/CLO 197.5 2.7 (3.3 ) 196.9 (13.9 ) Other ABS 260.0 13.4 (4.7 ) 268.7 (1.8 ) Available-for-sale debt securities $ 11,978.0 $ 799.9 $ (98.6 ) $ 12,679.3 $ (51.8 ) Amounts applicable to the closed block $ 5,451.3 $ 458.1 $ (32.4 ) $ 5,877.0 $ (14.7 ) Available-for-sale equity securities $ 156.0 $ 25.1 $ (1.6 ) $ 179.5 $ — Amounts applicable to the closed block $ 80.5 $ 12.3 $ (1.1 ) $ 91.7 $ — ——————— [1] Net unrealized investment gains and losses on securities classified as available-for-sale and certain other assets are included in our consolidated balance sheets as a component of AOCI. [2] Represents the amount of non-credit OTTI losses recognized in AOCI excluding net unrealized gains or losses subsequent to the date of impairment. The table above presents the special category of AOCI for debt securities that are other-than-temporarily impaired when the impairment loss has been split between the credit loss component (in earnings) and the non-credit component (separate category of AOCI). Maturities of Debt Securities: June 30, 2015 ($ in millions) Amortized Cost Fair Value Due in one year or less $ 198.2 $ 200.1 Due after one year through five years 1,944.0 2,053.5 Due after five years through ten years 3,483.2 3,588.0 Due after ten years 3,753.7 3,935.1 CMBS/RMBS/ABS/CDO/CLO [1] 2,676.9 2,770.4 Total $ 12,056.0 $ 12,547.1 ——————— [1] CMBS, RMBS, ABS, CDO and CLO are not listed separately in the table as each security does not have a single fixed maturity. The maturities of debt securities, as of June 30, 2015 , are summarized in the table above by contractual maturity. Actual maturities may differ from contractual maturities as certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties, and we have the right to put or sell certain obligations back to the issuers. The following table depicts the sources of available-for-sale investment proceeds and related investment gains (losses). Sales of Available-for-Sale Securities: ($ in millions) Six Months Ended 2015 2014 Debt securities, available-for-sale Proceeds from sales $ 476.8 $ 70.4 Proceeds from maturities/repayments 556.0 605.2 Gross investment gains from sales, prepayments and maturities 20.8 20.1 Gross investment losses from sales and maturities (1.9 ) (4.2 ) Equity securities, available-for-sale Proceeds from sales $ 14.3 $ 4.4 Gross investment gains from sales — 1.9 Gross investment losses from sales — (1.5 ) Aging of Temporarily Impaired Securities: June 30, 2015 ($ in millions) Less than 12 months Greater than 12 months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Debt Securities U.S. government and agency $ 2.9 $ (0.1 ) $ 1.7 $ — $ 4.6 $ (0.1 ) State and political subdivision 81.6 (1.6 ) 26.7 (3.0 ) 108.3 (4.6 ) Foreign government 28.0 (0.8 ) — — 28.0 (0.8 ) Corporate 1,972.3 (69.4 ) 442.1 (50.8 ) 2,414.4 (120.2 ) CMBS 36.5 (0.4 ) — — 36.5 (0.4 ) RMBS 99.3 (1.4 ) 187.4 (12.7 ) 286.7 (14.1 ) CDO/CLO 94.1 (0.7 ) 88.6 (2.2 ) 182.7 (2.9 ) Other ABS 7.7 — 14.6 (4.8 ) 22.3 (4.8 ) Debt securities 2,322.4 (74.4 ) 761.1 (73.5 ) 3,083.5 (147.9 ) Equity securities 6.6 (1.0 ) 18.0 (0.7 ) 24.6 (1.7 ) Total temporarily impaired securities $ 2,329.0 $ (75.4 ) $ 779.1 $ (74.2 ) $ 3,108.1 $ (149.6 ) Amounts inside the closed block $ 728.1 $ (25.3 ) $ 303.1 $ (21.1 ) $ 1,031.2 $ (46.4 ) Amounts outside the closed block $ 1,600.9 $ (50.1 ) $ 476.0 $ (53.1 ) $ 2,076.9 $ (103.2 ) Debt Securities outside the closed block that are below investment grade $ 96.3 $ (4.4 ) $ 61.6 $ (7.9 ) $ 157.9 $ (12.3 ) Number of securities 411 159 570 Aging of Temporarily Impaired Securities: December 31, 2014 ($ in millions) Less than 12 months Greater than 12 months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Debt Securities U.S. government and agency $ — $ — $ 2.7 $ (0.1 ) $ 2.7 $ (0.1 ) State and political subdivision 11.6 (0.6 ) 31.1 (1.9 ) 42.7 (2.5 ) Foreign government 15.7 (1.4 ) — — 15.7 (1.4 ) Corporate 643.0 (23.5 ) 654.3 (51.1 ) 1,297.3 (74.6 ) CMBS 12.6 — 10.9 (0.1 ) 23.5 (0.1 ) RMBS 8.4 (0.2 ) 226.7 (11.7 ) 235.1 (11.9 ) CDO/CLO 57.9 (0.5 ) 96.3 (2.8 ) 154.2 (3.3 ) Other ABS 13.8 (0.1 ) 16.0 (4.6 ) 29.8 (4.7 ) Debt securities 763.0 (26.3 ) 1,038.0 (72.3 ) 1,801.0 (98.6 ) Equity securities 5.6 (0.7 ) 15.2 (0.9 ) 20.8 (1.6 ) Total temporarily impaired securities $ 768.6 $ (27.0 ) $ 1,053.2 $ (73.2 ) $ 1,821.8 $ (100.2 ) Amounts inside the closed block $ 266.8 $ (11.7 ) $ 387.8 $ (21.8 ) $ 654.6 $ (33.5 ) Amounts outside the closed block $ 501.8 $ (15.3 ) $ 665.4 $ (51.4 ) $ 1,167.2 $ (66.7 ) Debt Securities outside the closed block that are below investment grade $ 84.2 $ (4.1 ) $ 50.4 $ (6.6 ) $ 134.6 $ (10.7 ) Number of securities 158 211 369 Unrealized losses on below-investment-grade debt securities outside the closed block and inside the closed block with a fair value depressed by more than 20% of amortized cost totaled $3.9 million and $0 , respectively, at June 30, 2015 , of which $2.4 million and $0 , respectively, were depressed by more than 20% of amortized cost for more than 12 months. As of June 30, 2015 , available-for-sale securities in an unrealized loss position for over 12 months consisted of 149 debt securities and 10 equity securities. These debt securities primarily relate to corporate securities, RMBS and other ABS, which have depressed values due primarily to an increase in interest rates since the purchase of these securities. Unrealized losses were not recognized in earnings on these debt securities since the Company neither intends to sell the securities nor do we believe that it is more likely than not that it will be required to sell these securities before recovery of their amortized cost basis. Additionally, based on a security-by-security analysis, we expect to recover the entire amortized cost basis of these securities. In our evaluation of each security, management considers the actual recovery periods for these securities in previous periods of broad market declines. For securities with significant declines, individual security level analysis was performed, which considered any credit enhancements, expectations of defaults on underlying collateral and other available market data, including industry analyst reports and forecasts. Similarly, for equity securities in an unrealized loss position for greater than 12 months, management performed an analysis on a security-by-security basis. Although there may be sustained losses for greater than 12 months on these securities, additional information was obtained related to company performance which did not indicate that the additional losses were other-than-temporary. Evaluating temporarily impaired available-for-sale securities In management’s evaluation of temporarily impaired securities, many factors about individual issuers of securities, as well as our best judgment in determining the cause of a decline in the estimated fair value, are considered in the assessment of potential near-term recovery in the security’s value. Some of those considerations include, but are not limited to: (i) duration of time and extent to which the estimated fair value has been below cost or amortized cost; (ii) for debt securities, if the Company has the intent to sell or will more likely than not be required to sell a particular security before the decline in estimated fair value below amortized cost recovers; (iii) whether the issuer is experiencing significant financial difficulties and the potential for impairments of that issuer’s securities; (iv) pervasive issues across an entire industry sector/sub-sector; and (v) for structured securities, assessing any changes in the forecasted cash flows, the quality of underlying collateral, expectations of prepayment speeds, loss severity and payment priority of tranches held. Other-than-temporary impairments Management assessed all securities in an unrealized loss position in determining whether impairments were temporary or other-than-temporary. In reaching its conclusions, management exercised significant judgment and used a number of issuer-specific quantitative indicators and qualitative judgments to assess the probability of receiving a given security’s contractual cash flows. This included the issue’s implied yield to maturity, cumulative default rate based on rating, comparisons of issue-specific spreads to industry or sector spreads, specific trading activity in the issue and other market data such as recent debt tenders and upcoming refinancing requirements. Management also reviewed fundamentals such as issuer credit and liquidity metrics, business outlook and industry conditions. Management maintains a watch list of securities that is reviewed for impairments. Each security on the watch list was evaluated, analyzed and discussed, with the positive and negative factors weighed, in the ultimate determination of whether or not the security was other-than-temporarily impaired. For securities for which no OTTI was ultimately indicated at June 30, 2015 , management does not have the intention to sell, nor does it expect to be required to sell, these securities prior to their recovery. OTTIs recorded for available-for-sale debt and equity securities for the three months ended June 30, 2015 and 2014 totaled $1.1 million and $1.0 million , respectively. OTTIs recorded for available-for-sale debt and equity securities for the six months ended June 30, 2015 and 2014 totaled $9.5 million and $1.2 million , respectively. For the three months ended June 30, 2015 , debt impairments of $1.1 million related primarily to continued deterioration of a previously impaired security. The following table presents a roll-forward of pre-tax credit losses recognized in earnings related to available-for-sale debt securities for which a portion of the OTTI was recognized in OCI. Credit Losses Recognized in Earnings on Available-for-Sale Debt Securities for which a Portion of the OTTI Loss was Recognized in OCI: Three Months Ended Six Months Ended ($ in millions) 2015 2014 2015 2014 Balance, beginning of period $ (49.2 ) $ (63.1 ) $ (52.4 ) $ (71.4 ) Add: Credit losses on securities not previously impaired [1] — — — — Add: Credit losses on securities previously impaired [1] — — — — Less: Credit losses on securities impaired due to intent to sell — — — — Less: Credit losses on securities sold 6.4 0.5 9.6 8.8 Less: Increases in cash flows expected on previously impaired securities — — — — Balance, end of period $ (42.8 ) $ (62.6 ) $ (42.8 ) $ (62.6 ) ——————— [1] Additional credit losses on securities for which a portion of the OTTI loss was recognized in AOCI are included within net OTTI losses recognized in earnings on the consolidated statements of operations and comprehensive income. Limited partnerships and other investments Limited Partnerships and Other Investments: ($ in millions) June 30, December 31, 2014 Limited partnerships Private equity funds $ 259.6 $ 241.1 Mezzanine funds 165.4 162.4 Infrastructure funds 32.5 38.9 Hedge funds 10.7 10.7 Mortgage and real estate funds 4.3 3.7 Leveraged leases 10.3 11.8 Direct equity investments 40.7 49.6 Life settlements 18.0 22.4 Other alternative assets 2.2 2.2 Limited partnerships and other investments $ 543.7 $ 542.8 Amounts applicable to the closed block $ 355.8 $ 343.4 Net investment income Net investment income is comprised primarily of interest income, including amortization of premiums and accretion of discounts, based on yields which are changed due to expectations in projected cash flows, dividend income from common and preferred stock, gains and losses on securities measured at fair value and earnings from investments accounted for under equity method accounting. Sources of Net Investment Income: Three Months Ended Six Months Ended ($ in millions) 2015 2014 2015 2014 Debt securities [1] $ 150.7 $ 144.0 $ 299.5 $ 287.8 Equity securities 1.7 3.0 3.6 5.1 Limited partnerships and other investments 15.7 6.3 28.9 32.8 Policy loans 41.8 41.3 83.5 82.5 Fair value investments (0.9 ) 1.5 10.2 3.6 Total investment income 209.0 196.1 425.7 411.8 Less: Discontinued operations 0.3 0.3 0.6 0.6 Less: Investment expenses 6.4 4.3 13.5 8.2 Net investment income $ 202.3 $ 191.5 $ 411.6 $ 403.0 Amounts applicable to the closed block $ 95.0 $ 93.7 $ 195.2 $ 201.0 ——————— [1] Includes net investment income on short-term investments. Net realized gains (losses) Sources and Types of Net Realized Gains (Losses): Three Months Ended Six Months Ended ($ in millions) 2015 2014 2015 2014 Total other-than-temporary debt impairments $ (0.9 ) $ — $ (1.0 ) $ 0.2 Portion of losses recognized in OCI (0.2 ) — (1.6 ) (0.2 ) Net debt impairments recognized in earnings $ (1.1 ) $ — $ (2.6 ) $ — Debt security impairments: U.S. government and agency $ — $ — $ — $ — State and political subdivision — — — — Foreign government — — — — Corporate (1.1 ) — (2.4 ) CMBS — — — — RMBS — — (0.2 ) — CDO/CLO — — — — Other ABS — — — — Net debt security impairments (1.1 ) — (2.6 ) — Equity security impairments — (1.0 ) (6.9 ) (1.2 ) Limited partnerships and other investment impairments — — — — Impairment losses (1.1 ) (1.0 ) (9.5 ) (1.2 ) Debt security transaction gains 12.3 8.7 20.8 20.3 Debt security transaction losses (1.1 ) (0.4 ) (2.0 ) (4.3 ) Equity security transaction gains — — — 1.9 Equity security transaction losses — (1.5 ) — (1.5 ) Limited partnerships and other investment transaction gains — — — — Limited partnerships and other investment transaction losses — — — — Net transaction gains (losses) 11.2 6.8 18.8 16.4 Derivative instruments (11.9 ) (0.1 ) (14.2 ) (23.9 ) Embedded derivatives [1] 4.4 (2.2 ) (5.9 ) (15.1 ) Assets valued at fair value (4.7 ) 0.7 (7.4 ) 1.1 Net realized gains (losses), excluding impairment losses (1.0 ) 5.2 (8.7 ) (21.5 ) Net realized gains (losses), including impairment losses $ (2.1 ) $ 4.2 $ (18.2 ) $ (22.7 ) ——————— [1] Includes the change in fair value of embedded derivatives associated with fixed index annuity indexed crediting feature and variable annuity riders. See Note 10 to these consolidated interim unaudited financial statements for additional disclosures. Unrealized gains (losses) Sources of Changes in Net Unrealized Gains (Losses): Three Months Ended Six Months Ended ($ in millions) 2015 2014 2015 2014 Debt securities $ (354.1 ) $ 163.4 $ (210.2 ) $ 329.4 Equity securities 0.1 5.3 (2.4 ) 7.5 Other investments (2.2 ) (0.1 ) (2.4 ) 0.2 Net unrealized investment gains (losses) $ (356.2 ) $ 168.6 $ (215.0 ) $ 337.1 Net unrealized investment gains (losses) $ (356.2 ) $ 168.6 $ (215.0 ) $ 337.1 Applicable to closed block policyholder dividend obligation (161.4 ) 77.6 (98.7 ) 159.2 Applicable to DAC (56.2 ) 24.6 (39.4 ) 55.5 Applicable to other actuarial offsets (83.9 ) 14.5 (25.6 ) 46.8 Applicable to deferred income tax expense (benefit) (24.4 ) 33.4 (17.4 ) 66.1 Offsets to net unrealized investment gains (losses) (325.9 ) 150.1 (181.1 ) 327.6 Net unrealized gains (losses) included in OCI $ (30.3 ) $ 18.5 $ (33.9 ) $ 9.5 Consolidated variable interest entities The Company regularly invests in private equity type fund structures which are variable interest entities (“VIEs”). Entities which do not have sufficient equity at risk to allow the entity to finance its activities without additional financial support or in which the equity investors, as a group, do not have the characteristic of a controlling financial interest are referred to as VIEs. We perform ongoing assessments of our investments in VIEs to determine if we are the primary beneficiary. When we are the primary beneficiary of the entity we consolidate the VIE. The consolidated entities are all investment company-like structures which follow specialized investment company accounting and record underlying investments at fair value. The nature of the consolidated VIEs’ operations and purpose are private equity limited partnerships, single asset limited liability companies (“LLCs”) and a fund of fund investment structure and have investments in homogeneous types of assets. We consolidate these VIEs using the most recent financial information received from the partnerships. Recognition of operating results is generally on a three-month delay due to the timing of the related financial statements. The following table presents the total assets and total liabilities relating to consolidated VIEs at June 30, 2015 and December 31, 2014 . Carrying Value of Assets and Liabilities for Consolidated Variable Interest Entities: June 30, 2015 December 31, 2014 ($ in millions) Assets Liabilities Maximum Exposure to Loss [ 1] Assets Liabilities Maximum Exposure to Loss [ 1] Debt securities, at fair value [2] $ 14.9 $ — $ 9.9 $ 5.5 $ — $ 5.1 Equity securities, at fair value [2] 44.8 — 39.5 35.0 — 30.0 Cash and cash equivalents 6.2 — 5.7 9.4 — 9.3 Investment in partnership interests [2] 1.4 — 1.4 — — — Investment in single asset LLCs [2] 23.4 — 18.9 50.6 — 36.6 Other assets 5.4 — 4.2 0.6 — 0.5 Total assets of consolidated VIEs $ 96.1 $ — $ 79.6 $ 101.1 $ — $ 81.5 Total liabilities of consolidated VIEs $ — $ 0.6 $ 0.4 $ — $ 0.6 $ 0.5 ——————— [1] Creditors or beneficial interest holders of the consolidated VIEs have no recourse to our general credit. Our obligation to the VIEs is limited to the amount of our committed investment. We have not provided material financial or other support that was not contractually required to these VIEs. The maximum exposure to loss above at June 30, 2015 and December 31, 2014 excludes unfunded commitments of $7.7 million and $11.9 million , respectively. [2] Included in fair value investments on the consolidated balance sheets. Non-consolidated variable interest entities The carrying value of our investments in non-consolidated VIEs (based upon sponsor values and financial statements of the individual entities) for which we are not the primary beneficiary was $126.3 million and $151.5 million as of June 30, 2015 and December 31, 2014 , respectively. The maximum exposure to loss is equal to the carrying amounts plus any unfunded commitments of the Company. Such a maximum loss would be expected to occur only upon bankruptcy of the issuer or investee. The Company has not provided nor intends to provide material financial support to these entities unless contractually required. We do not have the contractual option to redeem these limited partnership interests but receive distributions based on the liquidation of the underlying assets. The Company must generally request general partner consent to transfer or sell its fund interests. The Company performs ongoing qualitative analysis of its involvement with VIEs to determine if consolidation is required. Carrying Value of Assets and Liabilities and Maximum Exposure Loss Relating to Variable Interest Entities: June 30, 2015 December 31, 2014 ($ in millions) Assets Liabilities Maximum Exposure to Loss [ 1] Assets Liabilities Maximum Exposure to Loss [ 1] Limited partnerships $ 84.9 $ — $ 131.9 $ 106.0 $ — $ 157.8 LLCs 41.4 — 41.4 45.5 — 45.5 Total $ 126.3 $ — $ 173.3 $ 151.5 $ — $ 203.3 ——————— [1] Creditors or beneficial interest holders of the VIEs have no recourse to our general credit. Our obligation to the VIEs is limited to the amount of our committed investment. We have not provided material financial or other support that was not contractually required to these VIEs. In addition, the Company makes passive investments in structured securities issued by VIEs, for which the Company is not the manager, which are included in CMBS, RMBS, CDO/CLO and other ABS within available-for-sale debt securities, and in fair value investments, in the consolidated balance sheets. The Company has not provided financial or other support with respect to these investments other than its original investment. For these investments, the Company determined it is not the primary beneficiary due to the size of our investment relative to the structured securities issued by the VIE, the level of credit subordination which reduces the Company’s obligation to absorb losses or right to receive benefits, and the Company’s lack of power over the activities that most significantly impact the economic performance of the VIEs. The Company’s maximum exposure to loss on these investments is limited to the amount of our investment. Issuer and counterparty credit exposure Credit exposure related to issuers and derivatives counterparties is inherent in investments and derivative contracts with positive fair value or asset balances. We manage credit risk through the analysis of the underlying obligors, issuers and transaction structures. We review our debt security portfolio regularly to monitor the performance of obligors and assess the stability of their credit ratings. We also manage credit risk through industry and issuer diversification and asset allocation. Included in fixed maturities are below-investment-grade assets totaling $902.4 million and $848.8 million at June 30, 2015 and December 31, 2014 , respectively. Maximum exposure to an issuer or derivative counterparty is defined by quality ratings, with higher quality issuers having larger exposure limits. As of June 30, 2015 , we were exposed to the credit concentration risk of 75 issuers each representing exposure greater than 10% of stockholders’ equity other than U.S. government and government agencies backed by the faith and credit of the U.S. government. The top five largest exposures were Bank of America Corp, Deutsche Bank AG, General Electric Company, Berkshire Hathaway Inc. and The Bank of New York Mellon Corp. We monitor credit exposures by actively monitoring dollar limits on transactions with specific counterparties. We have an overall limit on below-investment-grade rated issuer exposure. Additionally, the creditworthiness of counterparties is reviewed periodically. We generally use ISDA Master Agreements which include Credit Support Annexes which include collateral provisions to reduce counterparty credit exposures. To further mitigate the risk of loss on derivatives, we only enter into contracts in which the counterparty is a financial institution with a rating of A or higher from at least one Nationally Recognized Statistical Rating Organization. As of June 30, 2015 , we held derivative assets, net of liabilities, with a fair value of $49.8 million . Derivative credit exposure was diversified with 11 different counterparties. We also had investments of these issuers with a fair value of $289.6 million as of June 30, 2015 . Our maximum amount of loss due to credit risk with these issuers was $339.4 million as of June 30, 2015 . See Note 11 to these consolidated interim unaudited financial statements for additional information regarding derivatives. |
Financing Activities
Financing Activities | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Financing Activities | Financing Activities Indebtedness The carrying value of our debt was as follows: Indebtedness at Carrying Value: ($ in millions) June 30, December 31, 2014 7.15% surplus notes, due 2034 $ 126.2 $ 126.2 7.45% senior unsecured bonds, due 2032 252.7 252.7 Total indebtedness $ 378.9 $ 378.9 We incurred interest expense of $7.1 million and $7.1 million for the three months ended June 30, 2015 and 2014 , respectively, and $14.2 million and $14.2 million for the six months ended June 30, 2015 and 2014 , respectively. 7.15% surplus notes Our 7.15% surplus notes are an obligation of Phoenix Life. Interest payments are at an annual rate of 7.15% , require the prior approval of the NYDFS and may be made only out of surplus funds which the NYDFS determines to be available for such payments under New York Insurance Law. New York Insurance Law provides that the notes are not part of the legal liabilities of Phoenix Life. 7.45% senior unsecured bonds The indenture governing our 7.45% senior unsecured bonds requires us to file with U.S. Bank, National Association, as trustee, within 15 days after we are required to file with the Securities and Exchange Commission (“SEC”), copies of the annual reports and of the information, documents and other reports that we are required to file with the SEC pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (“Exchange Act”). In connection with a restatement of our prior period financial statements, we were unable to file with the SEC certain of our periodic SEC reports and meet the requirement to timely deliver a copy of such reports to the trustee. On February 21, 2014, we executed a supplemental indenture that provided a waiver to extend the date for providing the trustee with the Company’s Quarterly Report on Form 10-Q for the third quarter of 2012, the 2012 Form 10-K, our Quarterly Reports on Form 10-Q for the first, second and third quarters of 2013, the 2013 Form 10-K and our Quarterly Reports on Form 10-Q for the first, second and third quarters of 2014 to March 16, 2015. As a result, any and all defaults and events of default, including the delayed filing of such reports, occurring under the indenture prior to the supplemental indenture were waived. We completed the filing of these reports on November 21, 2014. |
Common Stock and Stock Repurcha
Common Stock and Stock Repurchase Program | 6 Months Ended |
Jun. 30, 2015 | |
Equity [Abstract] | |
Common Stock and Stock Repurchase Program | Common Stock and Stock Repurchase Program We have authorization for the issuance of 50 million shares of our common stock. Through June 30, 2015 , we have issued 6.4 million common shares ( 2.8 million shares to our policyholders in exchange for their interests in the mutual company and 3.6 million shares in sales to the public and to settle share-based compensation awards). As of June 30, 2015 , shares issued and outstanding include 0.1 million shares held in a Rabbi Trust to fund equity awards on which recipients are allowed to vote their shares. As of June 30, 2015 , we also had 0.3 million shares reserved for issuance under our stock option plans and 0.1 million shares reserved for issuance under our restricted stock unit (“RSU”) plans. The Company is authorized to repurchase up to an aggregate amount of $25.0 million (not including fees and expenses) of the Company’s outstanding shares of common stock. Under the stock repurchase program, purchases may be made from time to time in the open market, in accelerated stock buyback arrangements, in privately negotiated transactions or otherwise, subject to market prices and other conditions. There is no time limit placed on the duration of the program, which may be modified, extended or terminated by the Board of Directors (the “Board”) at any time. There were no shares repurchased under this authorization. State Farm Mutual Automobile Insurance Company (“State Farm”) currently owns of record approximately 5.2% of our outstanding common stock. In the six months ended June 30, 2015 and 2014 , we incurred $1.5 million and $1.3 million , respectively, as compensation costs for the sale of our insurance and annuity products by entities that were either subsidiaries of State Farm or owned by State Farm agents. Morgan Stanley currently owns of record approximately 5.1% of our outstanding common stock. In the six months ended June 30, 2015 and 2014 , we incurred $0 and $1.1 million , respectively, for fees associated with a bondholder solicitation seeking consent to amend the indenture governing our 7.45% senior unsecured bonds. See Note 8 to these consolidated interim unaudited financial statements for additional information. |
Separate Accounts, Death Benefi
Separate Accounts, Death Benefits and Other Insurance Benefit Features and Embedded Product Derivatives | 6 Months Ended |
Jun. 30, 2015 | |
Separate Accounts Disclosure [Abstract] | |
Separate Accounts, Death Benefits and Other Insurance Benefit Features and Embedded Product Derivatives | Sales Inducements The balances of and changes in sales inducements as of and for the periods ended June 30, 2015 and 2014 are as follows: Changes in Deferred Sales Inducement Activity: Three Months Ended Six Months Ended ($ in millions) 2015 2014 2015 2014 Balance, beginning of period $ 79.2 $ 76.1 $ 79.4 $ 77.4 Sales inducements deferred 4.3 5.4 9.6 7.5 Amortization charged to income (2.9 ) (2.6 ) (4.8 ) (2.8 ) Offsets to net unrealized investment gains or losses included in AOCI 7.3 (2.9 ) 3.7 (6.1 ) Balance, end of period $ 87.9 $ 76.0 $ 87.9 $ 76.0 Separate Accounts, Death Benefits and Other Insurance Benefit Features and Embedded Product Derivatives Separate accounts Separate account products are those for which a separate investment and liability account is maintained on behalf of the policyholder. Investment objectives for these separate accounts vary by fund account type, as outlined in the applicable fund prospectus or separate account plan of operations. We have variable annuity and variable life insurance contracts that are classified as separate account products. The assets supporting these contracts are carried at fair value and are reported as separate account assets with an equivalent amount reported as separate account liabilities. Amounts assessed against the policyholder for mortality, administration and other services are included within revenue in fee income. Assets with fair value and carrying value of $2.8 billion and $2.6 billion at June 30, 2015 and December 31, 2014 , respectively, supporting fixed indexed annuities are maintained in accounts that are legally segregated from the other assets of the Company, but policyholders do not direct the investment of those assets and the investment performance does not pass through to the policyholders. These assets supporting fixed indexed annuity contracts are reported within the respective investment line items on the consolidated balance sheets. Separate Account Investments of Account Balances of Variable Annuity Contracts with Insurance Guarantees: June 30, December 31, 2014 ($ in millions) Debt securities $ 346.1 $ 375.9 Equity funds 1,522.9 1,638.6 Other 46.1 49.9 Total $ 1,915.1 $ 2,064.4 Death benefits and other insurance benefit features Variable annuity guaranteed benefits We establish policy benefit liabilities for minimum death and income benefit guarantees relating to certain annuity policies as follows: • Liabilities associated with the guaranteed minimum death benefit (“GMDB”) are determined by estimating the expected value of death benefits in excess of the projected account balance and recognizing the excess ratably over the expected life of the contract based on total expected assessments. The assumptions used for calculating the liabilities are generally consistent with those used for amortizing DAC. • Liabilities associated with the guaranteed minimum income benefit (“GMIB”) are determined by estimating the expected value of the income benefits in excess of the projected account balance at the date of annuitization and recognizing the excess ratably over the accumulation period based on total expected assessments. The assumptions used for calculating such guaranteed income benefit liabilities are generally consistent with those used for amortizing DAC. For variable annuities with GMDB and GMIB, reserves for these guarantees are calculated and recorded in policy liabilities and accruals on our consolidated balance sheets. Changes in the liability are recorded in policy benefits on our consolidated statements of operations and comprehensive income. We regularly evaluate estimates used and adjust the additional liability balances, with a related charge or credit to benefit expense if actual experience or other evidence suggests that earlier assumptions should be revised. Changes in Guaranteed Insurance Benefit Liability Balances: Three Months Ended Six Months Ended ($ in millions) Annuity GMDB Annuity GMIB Annuity GMDB Annuity GMIB Balance, beginning of period $ 20.7 $ 14.6 $ 21.4 $ 17.1 Incurred 0.5 0.3 (0.1 ) (2.2 ) Paid (0.9 ) (0.2 ) (1.5 ) (0.2 ) Assumption unlocking — — 0.4 — Change due to net unrealized gains or losses included in AOCI (0.2 ) — (0.1 ) — Balance, end of period $ 20.1 $ 14.7 $ 20.1 $ 14.7 Changes in Guaranteed Insurance Benefit Liability Balances: Three Months Ended Six Months Ended ($ in millions) Annuity GMDB Annuity GMIB Annuity GMDB Annuity GMIB Balance, beginning of period $ 22.1 $ 9.6 $ 22.7 $ 9.8 Incurred 0.1 (0.7 ) — (0.8 ) Paid (0.8 ) — (1.4 ) — Assumption unlocking — — — — Change due to net unrealized gains or losses included in AOCI (0.1 ) — — (0.1 ) Balance, end of period $ 21.3 $ 8.9 $ 21.3 $ 8.9 For those guarantees of benefits that are payable in the event of death, the net amount at risk (“NAR”) is generally defined as the benefit payable in excess of the current account balance at our balance sheet date. We have entered into reinsurance agreements to reduce the net amount of risk on certain death benefits. Following are the major types of death benefits currently in force as defined in Note 11 to our consolidated financial statements in the 2014 Form 10-K: GMDB and GMIB Benefits by Type: June 30, 2015 ($ in millions) Account Value NAR before Reinsurance NAR after Reinsurance Average Attained Age of Annuitant GMDB return of premium $ 606.9 $ 1.5 $ 1.5 64 GMDB step up 1,619.3 111.4 17.6 65 GMDB earnings enhancement benefit (“EEB”) 27.2 3.2 3.2 65 GMDB greater of annual step up and roll up 21.9 5.1 5.1 69 Total GMDB at June 30, 2015 2,275.3 $ 121.2 $ 27.4 Less: General account value with GMDB 366.5 Subtotal separate account liabilities with GMDB 1,908.8 Separate account liabilities without GMDB 946.4 Total separate account liabilities $ 2,855.2 GMIB [1] at June 30, 2015 $ 292.4 66 GMDB and GMIB Benefits by Type: December 31, 2014 ($ in millions) Account Value NAR before Reinsurance NAR after Reinsurance Average Attained Age of Annuitant GMDB return of premium $ 661.5 $ 1.6 $ 1.6 63 GMDB step up 1,723.2 112.2 13.4 64 GMDB earnings enhancement benefit (“EEB”) 29.1 — — 65 GMDB greater of annual step up and roll up 22.7 4.8 4.8 69 Total GMDB at December 31, 2014 2,436.5 $ 118.6 $ 19.8 Less: General account value with GMDB 378.6 Subtotal separate account liabilities with GMDB 2,057.9 Separate account liabilities without GMDB 962.8 Total separate account liabilities $ 3,020.7 GMIB [1] at December 31, 2014 $ 319.6 65 ——————— [1] Policies with a GMIB also have a GMDB, however these benefits are not additive. When a policy terminates due to death, any NAR related to GMIB is released. Similarly, when a policy goes into benefit status on a GMIB, its GMDB NAR is released. Fixed indexed annuity guaranteed benefits Many of our fixed indexed annuities contain guaranteed benefits. We establish policy benefit liabilities for minimum death and minimum withdrawal benefit guarantees relating to these policies as follows: • Liabilities associated with the guaranteed minimum withdrawal benefit (“GMWB”) and Chronic Care guarantees are determined by estimating the value of the withdrawal benefits expected to be paid after the projected account value depletes and recognizing the value ratably over the accumulation period based on total expected assessments. Liabilities associated with the GMWB for the fixed indexed annuities differ from those contained on variable annuities in that the GMWB feature and the underlying contract, exclusive of the equity index crediting option, are fixed income instruments. • Liabilities associated with the GMDB are determined by estimating the expected value of death benefits in excess of the projected account balance and recognizing the excess ratably over the expected life of the contract based on total expected assessments. The assumptions used for calculating GMWB, GMDB and Chronic Care guarantees are generally consistent with those used for amortizing DAC. We regularly evaluate estimates used and adjust the additional liability balances, with a related charge or credit to benefit expense if actual experience or other evidence suggests that earlier assumptions should be revised. The GMWB, GMDB and Chronic Care guarantees on fixed indexed annuities are recorded in policy liabilities and accruals on our consolidated balance sheets. Changes in Guaranteed Liability Balances: Fixed Indexed Annuity GMWB and GMDB ($ in millions) Three Months Ended Six Months Ended 2015 2014 2015 2014 Balance, beginning of period $ 171.3 $ 104.1 $ 147.0 $ 85.4 Incurred 16.0 14.5 26.5 14.8 Paid (0.1 ) (0.1 ) (0.2 ) (0.2 ) Assumption unlocking — — — — Change due to net unrealized gains or losses included in AOCI (33.8 ) 16.7 (19.9 ) 35.2 Balance, end of period $ 153.4 $ 135.2 $ 153.4 $ 135.2 Universal life Liabilities for universal life contracts in excess of the account balance, some of which contain secondary guarantees, are generally determined by estimating the expected value of benefits and expenses when claims are triggered and recognizing those benefits and expenses over the accumulation period based on total expected assessments. The assumptions used in estimating these liabilities are generally consistent with those used for amortizing DAC. Changes in Guaranteed Liability Balances: Universal Life ($ in millions) Three Months Ended Six Months Ended 2015 2014 2015 2014 Balance, beginning of period $ 200.9 $ 178.0 $ 195.8 $ 170.6 Incurred 10.7 9.5 20.8 17.9 Paid (4.8 ) (1.3 ) (11.2 ) (3.2 ) Assumption unlocking — — — — Change due to net unrealized gains or losses included in AOCI (3.0 ) 0.9 (1.6 ) 1.8 Balance, end of period $ 203.8 $ 187.1 $ 203.8 $ 187.1 In addition, the universal life block of business has experience which produces profits in earlier periods followed by losses in later periods for which additional reserves are required to be held above the account value liability. These reserves are accrued ratably over historical and anticipated positive income to offset the future anticipated losses. The assumptions used in estimating these liabilities are generally consistent with those used for amortizing DAC. Changes in Additional Liability Balances: Universal Life ($ in millions) Three Months Ended Six Months Ended 2015 2014 2015 2014 Balance, beginning of period $ 387.7 $ 279.9 $ 351.5 $ 249.1 Incurred (8.3 ) 23.3 8.4 39.4 Assumption unlocking — — (6.8 ) — Change due to net unrealized gains or losses included in AOCI (28.2 ) (9.0 ) (1.9 ) 5.7 Balance, end of period $ 351.2 $ 294.2 $ 351.2 $ 294.2 Embedded derivatives Variable annuity embedded derivatives Certain separate account variable products may contain a GMWB, guaranteed minimum accumulation benefit (“GMAB”) and/or combination (“COMBO”) rider as defined in Note 11 to our consolidated financial statements in the 2014 Form 10-K. These features are accounted for as embedded derivatives as described below. Embedded Derivatives Non-Insurance Guaranteed Product Features: June 30, 2015 ($ in millions) Account Value Average Attained Age of Annuitant GMWB $ 450.2 65 GMAB 275.5 59 COMBO 5.3 65 Balance, end of period $ 731.0 Embedded Derivatives Non-Insurance Guaranteed Product Features: December 31, 2014 ($ in millions) Account Value Average Attained Age of Annuitant GMWB $ 496.8 65 GMAB 315.6 59 COMBO 7.1 65 Balance, end of period $ 819.5 The GMWB, GMAB and COMBO features represent embedded derivative liabilities in the variable annuity contracts that are required to be reported separately from the host variable annuity contract. These liabilities are recorded at fair value within policyholder deposit funds on the consolidated balance sheets with changes in fair value recorded in realized investment gains on the consolidated statements of operations and comprehensive income. The fair value of the GMWB, GMAB and COMBO obligation is calculated based on actuarial and capital market assumptions related to the projected cash flows, including benefits and related contract charges, over the lives of the contracts, incorporating expectations concerning policyholder behavior. As markets change, contracts mature and actual policyholder behavior emerges, these assumptions are continually evaluated and may from time to time be adjusted. Embedded derivative liabilities for GMWB, GMAB and COMBO are shown in the table below. Embedded Derivative Liabilities: ($ in millions) June 30, December 31, 2014 GMWB $ 4.5 $ 7.3 GMAB (0.9 ) (0.3 ) COMBO (0.2 ) (0.2 ) Total variable annuity embedded derivative liabilities $ 3.4 $ 6.8 There were no benefit payments made for the GMWB and GMAB in the three months ended June 30, 2015 and 2014 . We have established a risk management strategy under which we hedge our GMAB, GMWB and COMBO exposure using equity index options, equity index futures, equity index variance swaps, interest rate swaps and swaptions. Fixed indexed annuity embedded derivatives Fixed indexed annuities may also contain a variety of index-crediting options: policy credits that are calculated based on the performance of an outside equity market or other index over a specified term. These index options are embedded derivative liabilities that are required to be reported separately from the host contract. These index options are accounted for at fair value and recorded in policyholder deposit funds within the consolidated balance sheets with changes in fair value recorded in realized investment gains, in the consolidated statements of operations and comprehensive income. The fair value of these index options is calculated using the budget method. See Note 12 to these consolidated interim unaudited financial statements for additional information. Several additional inputs reflect our internally developed assumptions related to lapse rates and other policyholder behavior. The fair value of these embedded derivatives was $172.3 million and $153.9 million as of June 30, 2015 and December 31, 2014 , respectively. In order to manage the risk associated with these equity indexed-crediting features, we hedge using equity index options. See Note 11 to these consolidated interim unaudited financial statements for additional information. Embedded derivatives realized gains and losses Changes in the fair value of embedded derivatives associated with variable annuity and fixed indexed annuity contracts are recorded as realized investment gains and losses within the consolidated statements of operations and comprehensive income. Embedded derivatives gains and (losses) recognized in earnings for the three and six months ended June 30, 2015 are $4.4 million and $(5.9) million , respectively. Embedded derivatives gains and (losses) recognized in earnings for the three and six months ended June 30, 2014 are $(2.2) million and $(15.1) million , respectively. |
Derivative Instruments
Derivative Instruments | 6 Months Ended |
Jun. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments We use derivative financial instruments, including options, futures and swaps as a means of hedging exposure to interest rate, equity price change, equity volatility and foreign currency risk. This includes surplus hedging as well as hedging of our fixed indexed annuity (“FIA”) exposure. From time to time, the Company uses forward starting swaps to lock-in interest rates on future bond purchases. We also use derivative instruments to economically hedge our exposure on living benefits offered on certain of our variable annuity products as well as index credits on our FIA products. The Company seeks to enter into derivative transactions pursuant to master agreements that provide for a netting of payments and receipts by counterparty. Counterparties or central clearinghouses may require cash to be posted as collateral or margin. As of June 30, 2015 and December 31, 2014 , $33.9 million and $18.6 million , respectively, of cash and cash equivalents were held as collateral or margin by a third party related to our derivative transactions. Our derivatives are not designated as hedges for accounting purposes. Derivative Instruments: Maturity Notional Fair Value as of ($ in millions) Assets Liabilities [1] Interest rate swaps 2018 - 2035 $ 239.5 $ 1.8 $ 2.9 Variance swaps 2015 - 2017 0.9 — 9.4 Put options 2015 - 2022 692.5 22.7 — Call options [2] 2015 - 2020 2,285.3 78.0 42.0 Cross currency swaps 2016 10.0 1.4 — Equity futures 2015 10.6 0.2 — Total derivative instruments $ 3,238.8 $ 104.1 $ 54.3 ——————— [1] Derivative liabilities are included in other liabilities on the consolidated balance sheets. [2] Includes a contingent receivable of $1.5 million . Derivative Instruments: Maturity Notional Fair Value as of ($ in millions) Assets Liabilities [1] Interest rate swaps 2016 - 2029 $ 114.0 $ 9.7 $ 1.9 Variance swaps 2015 - 2017 0.9 — 8.6 Swaptions 2024 - 2025 777.0 0.1 — Put options 2015 - 2022 692.5 31.1 — Call options [2] 2015 - 2019 2,019.2 119.8 74.6 Cross currency swaps 2016 10.0 0.6 — Equity futures 2015 4.1 — 0.5 Total derivative instruments $ 3,617.7 $ 161.3 $ 85.6 ——————— [1] Derivative liabilities are included in other liabilities on the consolidated balance sheets. [2] Includes a contingent receivable of $1.5 million . Derivative Instrument Gains (Losses) Recognized in Realized Investment Gains (Losses): Three Months Ended Six Months Ended ($ in millions) 2015 2014 2015 2014 Interest rate swaps $ (4.3 ) $ 1.8 $ (1.6 ) $ 6.8 Variance swaps (0.4 ) (0.4 ) (0.8 ) (1.0 ) Swaptions — (7.6 ) (0.1 ) (25.9 ) Put options (4.1 ) (4.3 ) (8.3 ) (8.5 ) Call options (2.8 ) 17.2 (4.3 ) 14.2 Cross currency swaps (0.3 ) 0.1 0.7 — Equity futures — (6.9 ) 0.2 (9.5 ) Embedded derivatives 4.4 (2.2 ) (5.9 ) (15.1 ) Total derivative instrument gains (losses) recognized in realized investment gains (losses) $ (7.5 ) $ (2.3 ) $ (20.1 ) $ (39.0 ) Offsetting of Derivative Assets/Liabilities The Company may enter into netting agreements with counterparties that permit the Company to offset receivables and payables with such counterparties. The following tables present the gross fair value amounts, the amounts offset and net position of derivative instruments eligible for offset in the Company’s consolidated balance sheets that are subject to an enforceable master netting arrangement upon certain termination events, irrespective of whether they are offset in the balance sheet. Offsetting of June 30, 2015 ($ in millions) Gross Gross Net amounts Gross amounts not offset Net amount Financial Cash collateral Total derivative assets $ 104.1 $ — $ 104.1 $ (49.6 ) $ — $ 54.5 Total derivative liabilities $ (54.3 ) $ — $ (54.3 ) $ 49.6 $ 4.7 $ — Offsetting of December 31, 2014 ($ in millions) Gross Gross Net amounts Gross amounts not offset Net amount Financial Cash collateral Total derivative assets $ 161.3 $ — $ 161.3 $ (82.5 ) $ — $ 78.8 Total derivative liabilities $ (85.6 ) $ — $ (85.6 ) $ 82.5 $ 3.1 $ — ——————— [1] Amounts include all derivative instruments, irrespective of whether there is a legally enforceable master netting arrangement in place. [2] Cash collateral pledged with derivative counterparties is recorded within other assets on the consolidated balance sheets. The Company pledges cash collateral to offset certain individual derivative liability positions with certain counterparties. Cash collateral of $29.2 million and $15.5 million as of June 30, 2015 and December 31, 2014 , respectively, that exceeds the net liability resulting from the aggregate derivative positions with a corresponding counterparty is excluded. Contingent features Derivative counterparty agreements may contain certain provisions that require our insurance companies’ financial strength rating to be above a certain threshold. If our financial strength ratings were to fall below a specified rating threshold, certain derivative counterparties could request immediate payment or demand immediate and ongoing full collateralization on derivative instruments in net liability positions, or trigger a termination of existing derivatives and/or future derivative transactions. In certain derivative counterparty agreements, our financial strength ratings are below the specified threshold levels. However, the Company held no derivative instruments as of June 30, 2015 in a net aggregate liability position payable to any counterparty (i.e., such derivative instruments have fair values in a net asset position payable to the Company if such holdings were liquidated). |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments ASC 820-10 defines and establishes the framework for measuring fair value. The framework is based on inputs that are used in the valuation and a fair value hierarchy based on the quality of those inputs. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The input levels are defined as follows: • Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 1 securities include highly liquid government bonds and exchange-traded equities. • Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Examples of such instruments include government-backed mortgage products, certain collateralized mortgage and debt obligations and certain high-yield debt securities. • Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement. Unobservable inputs reflect management’s own assumptions about inputs in which market participants would use in pricing these types of assets or liabilities. Level 3 financial instruments include values which are determined using pricing models and third-party evaluation. Additionally, the determination of some fair value estimates utilizes significant management judgments or best estimates. The following tables present the financial instruments carried at fair value on a recurring basis by ASC 820-10 valuation hierarchy (as described above). Fair Values of Financial Instruments by Level: June 30, 2015 ($ in millions) Level 1 Level 2 Level 3 Total Assets Available-for-sale debt securities U.S. government and agency [1] $ — $ 76.6 $ 357.6 $ 434.2 State and political subdivision — 166.3 402.9 569.2 Foreign government — 205.8 32.6 238.4 Corporate — 4,263.9 4,271.0 8,534.9 CMBS — 601.0 29.7 630.7 RMBS — 1,206.4 416.5 1,622.9 CDO/CLO — — 259.9 259.9 Other ABS — 63.9 193.0 256.9 Total available-for-sale debt securities — 6,583.9 5,963.2 12,547.1 Available-for-sale equity securities — — 168.3 168.3 Short-term investments 174.6 — — 174.6 Derivative assets 0.2 103.9 — 104.1 Fair value investments [2] 26.1 8.8 179.0 213.9 Separate account assets 2,855.2 — — 2,855.2 Total assets $ 3,056.1 $ 6,696.6 $ 6,310.5 $ 16,063.2 Liabilities Derivative liabilities $ — $ 54.3 $ — $ 54.3 Embedded derivatives — — 175.7 175.7 Total liabilities $ — $ 54.3 $ 175.7 $ 230.0 ——————— [1] Level 3 includes securities whose underlying collateral is an obligation of a U.S. government entity. [2] Fair value investments at June 30, 2015 include $103.3 million of debt securities recorded at fair value. In addition, we have also elected the fair value option for equity securities backing our deferred compensation liabilities at $21.1 million as of June 30, 2015 . Changes in the fair value of these assets are recorded through net investment income. Additionally, $89.5 million of assets relate to investment holdings of consolidated VIEs held at fair value, $5.0 million of which are Level 1 securities. There were no transfers of assets between Level 1 and Level 2 during the six months ended June 30, 2015 . Fair Values of Financial Instruments by Level: December 31, 2014 ($ in millions) Level 1 Level 2 Level 3 Total Assets Available-for-sale debt securities U.S. government and agency [1] $ — $ 81.2 $ 362.2 $ 443.4 State and political subdivision — 157.7 400.2 557.9 Foreign government — 177.3 53.6 230.9 Corporate — 3,994.2 4,403.9 8,398.1 CMBS — 498.4 152.8 651.2 RMBS — 1,461.9 470.3 1,932.2 CDO/CLO — — 196.9 196.9 Other ABS — 23.6 245.1 268.7 Total available-for-sale debt securities — 6,394.3 6,285.0 12,679.3 Available-for-sale equity securities — — 179.5 179.5 Short-term investments 149.7 — — 149.7 Derivative assets — 161.3 — 161.3 Fair value investments [2] 32.4 13.0 190.0 235.4 Separate account assets 3,020.7 — — 3,020.7 Total assets $ 3,202.8 $ 6,568.6 $ 6,654.5 $ 16,425.9 Liabilities Derivative liabilities $ 0.5 $ 85.1 $ — $ 85.6 Embedded derivatives — — 160.7 160.7 Total liabilities $ 0.5 $ 85.1 $ 160.7 $ 246.3 ——————— [1] Level 3 includes securities whose underlying collateral is an obligation of a U.S. government entity. [2] Fair value investments at December 31, 2014 include $111.9 million of debt securities recorded at fair value. In addition, we have also elected the fair value option for equity securities backing our deferred compensation liabilities at $23.5 million as of December 31, 2014 . Changes in the fair value of these assets are recorded through net investment income. Additionally, $100.0 million of assets relate to investment holdings of consolidated VIEs held at fair value, $8.8 million of which are Level 1 securities. There were no transfers of assets between Level 1 and Level 2 during the six months ended June 30, 2014 . Available-for-sale debt securities as of June 30, 2015 and December 31, 2014 , respectively, are reported net of $26.4 million and $27.8 million of Level 2 investments included in discontinued operations assets on the consolidated balance sheets related to discontinued reinsurance operations. The following tables present corporates carried at fair value and on a recurring basis by sector. Fair Values of Corporates by Level and Sector: June 30, 2015 ($ in millions) Level 1 Level 2 Level 3 Total Corporates Consumer $ — $ 625.5 $ 1,204.8 $ 1,830.3 Energy — 615.5 432.3 1,047.8 Financial services — 1,716.0 910.4 2,626.4 Capital goods — 420.2 357.4 777.6 Transportation — 114.4 304.3 418.7 Utilities — 355.3 719.6 1,074.9 Other — 417.0 342.2 759.2 Total corporates $ — $ 4,263.9 $ 4,271.0 $ 8,534.9 Fair Values of Corporates by Level and Sector: December 31, 2014 ($ in millions) Level 1 Level 2 Level 3 Total Corporates Consumer $ — $ 593.0 $ 1,266.6 $ 1,859.6 Energy — 534.6 472.8 1,007.4 Financial services — 1,617.3 967.9 2,585.2 Capital goods — 398.1 384.8 782.9 Transportation — 104.7 305.8 410.5 Utilities — 348.1 683.4 1,031.5 Other — 398.4 322.6 721.0 Total corporates $ — $ 3,994.2 $ 4,403.9 $ 8,398.1 As of June 30, 2015 , the only financial instruments carried at fair value on a non-recurring basis were life settlement contracts with a fair value of $18.0 million , which are included in limited partnerships and other investments in the consolidated balance sheets. Since the fair value of these contracts is determined using a discounted cash flow model that includes significant unobservable inputs, these contracts are classified as Level 3. Significant unobservable inputs at June 30, 2015 are the discount rate of 17.00% and mortality assumptions ranging from 90% to 293% of the 2008 valuation basic table. There were no financial instruments carried at fair value on a non-recurring basis as of December 31, 2014 . Level 3 financial assets and liabilities The following tables set forth a summary of changes in the fair value of our Level 3 financial assets and liabilities. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Transfers in and out of Level 3 occur at the beginning of each period. The securities which were transferred into Level 3 were due to decreased market observability of similar assets and/or changes to significant inputs, such as downgrades or price declines. Transfers out of Level 3 were due to increased market activity on comparable assets or observability of inputs. Level 3 Financial Assets: Three Months Ended June 30, 2015 ($ in millions) Balance, beginning of period Purchases Sales Transfers into Level 3 Transfers out of Level 3 Realized and unrealized gains (losses) included in income [1] Unrealized gains (losses) included in OCI Total Assets Available-for-sale debt securities U.S. government and agency [2] $ 366.4 $ — $ (4.3 ) $ — $ — $ — $ (4.5 ) $ 357.6 State and political subdivision 405.4 15.3 (3.4 ) — — — (14.4 ) 402.9 Foreign government 32.4 1.0 (1.0 ) — — — 0.2 32.6 Corporate 4,354.1 196.3 (161.9 ) 59.0 (40.1 ) (3.1 ) (133.3 ) 4,271.0 CMBS 35.2 10.3 (5.2 ) — (10.1 ) (0.1 ) (0.4 ) 29.7 RMBS 481.6 0.2 (32.3 ) — (29.7 ) — (3.3 ) 416.5 CDO/CLO 205.5 71.3 (16.0 ) — — 1.2 (2.1 ) 259.9 Other ABS 208.9 4.5 (14.1 ) — (3.3 ) 0.2 (3.2 ) 193.0 Total available-for-sale debt securities 6,089.5 298.9 (238.2 ) 59.0 (83.2 ) (1.8 ) (161.0 ) 5,963.2 Available-for-sale equity securities 175.5 13.8 (18.0 ) — — (6.9 ) 3.9 168.3 Short-term investments — — — — — — — — Fair value investments 204.9 — (6.6 ) — — (19.3 ) — 179.0 Total assets $ 6,469.9 $ 312.7 $ (262.8 ) $ 59.0 $ (83.2 ) $ (28.0 ) $ (157.1 ) $ 6,310.5 ——————— [1] Reflected in realized investment gains and losses for all assets except fair value investments which are included in net investment income. [2] Includes securities whose underlying collateral is an obligation of a U.S. government entity. Level 3 Financial Assets: Three Months Ended June 30, 2014 ($ in millions) Balance, beginning of period Purchases Sales Transfers into Level 3 Transfers out of Level 3 Realized Unrealized gains (losses) included in OCI Total Assets Available-for-sale debt securities U.S. government and agency [2] $ 340.4 $ — $ (23.1 ) $ — $ — $ — $ 56.1 $ 373.4 State and political subdivision 276.8 6.6 (2.7 ) — — — 4.7 285.4 Foreign government 16.1 — — — — — 0.4 16.5 Corporate 3,940.3 70.5 (137.0 ) 25.6 (4.6 ) 2.5 (25.8 ) 3,871.5 CMBS 52.1 — (20.8 ) — (0.2 ) — 0.5 31.6 RMBS 535.2 0.7 (19.3 ) — (4.5 ) (0.3 ) (0.5 ) 511.3 CDO/CLO 236.1 22.0 (20.8 ) — — 0.1 1.6 239.0 Other ABS 229.4 — (8.9 ) — — 1.2 1.5 223.2 Total available-for-sale 5,626.4 99.8 (232.6 ) 25.6 (9.3 ) 3.5 38.5 5,551.9 Available-for-sale equity securities 63.0 6.0 — — — (0.5 ) 79.6 148.1 Short-term investments — — — — — — — — Fair value investments 170.3 — (11.5 ) — — 3.6 — 162.4 Total assets $ 5,859.7 $ 105.8 $ (244.1 ) $ 25.6 $ (9.3 ) $ 6.6 $ 118.1 $ 5,862.4 ——————— [1] Reflected in realized investment gains and losses for all assets except fair value investments which are included in net investment income. [2] Includes securities whose underlying collateral is an obligation of a U.S. government entity. Level 3 Financial Assets: Six Months Ended June 30, 2015 ($ in millions) Balance, beginning of period Purchases Sales Transfers into Level 3 Transfers out of Level 3 Realized Unrealized gains (losses) included in OCI Total Assets Available-for-sale debt securities U.S. government and agency [2] $ 362.2 $ 9.9 $ (6.4 ) $ — $ — $ — $ (8.1 ) $ 357.6 State and political subdivision 400.2 28.9 (5.6 ) — (14.0 ) — (6.6 ) 402.9 Foreign government 53.6 — — 4.2 (26.7 ) — 1.5 32.6 Corporate 4,403.9 362.0 (221.8 ) 74.5 (302.1 ) (1.0 ) (44.5 ) 4,271.0 CMBS 152.8 10.3 (5.3 ) 8.5 (132.5 ) (0.1 ) (4.0 ) 29.7 RMBS 470.3 0.6 (49.9 ) — — (0.2 ) (4.3 ) 416.5 CDO/CLO 196.9 90.4 (29.0 ) — — 1.7 (0.1 ) 259.9 Other ABS 245.1 4.5 (21.1 ) — (31.9 ) (0.2 ) (3.4 ) 193.0 Total available-for-sale 6,285.0 506.6 (339.1 ) 87.2 (507.2 ) 0.2 (69.5 ) 5,963.2 Available-for-sale equity securities 179.5 10.6 (14.2 ) — — (6.2 ) (1.4 ) 168.3 Short-term investments — — — — — — — — Fair value investments 190.0 0.4 (8.4 ) — — (3.0 ) — 179.0 Total assets $ 6,654.5 $ 517.6 $ (361.7 ) $ 87.2 $ (507.2 ) $ (9.0 ) $ (70.9 ) $ 6,310.5 ——————— [1] Reflected in realized investment gains and losses for all assets except fair value investments which are included in net investment income. [2] Includes securities whose underlying collateral is an obligation of a U.S. government entity. Level 3 Financial Assets: Six Months Ended June 30, 2014 ($ in millions) Balance, beginning of period Purchases Sales Transfers into Level 3 Transfers out of Level 3 Realized Unrealized gains (losses) included in OCI Total Assets Available-for-sale debt securities U.S. government and agency [2] $ 327.2 $ 62.8 $ (28.3 ) $ — $ — $ — $ 11.7 $ 373.4 State and political subdivision 269.1 9.5 (3.3 ) — — — 10.1 285.4 Foreign government 15.9 — — — — — 0.6 16.5 Corporate 3,893.8 235.8 (218.4 ) 15.8 (131.4 ) 4.3 71.6 3,871.5 CMBS 113.7 — (21.8 ) — (60.3 ) (0.1 ) 0.1 31.6 RMBS 552.7 1.3 (37.2 ) — (4.3 ) 1.6 (2.8 ) 511.3 CDO/CLO 224.1 39.9 (33.8 ) — — 1.8 7.0 239.0 Other ABS 247.7 — (21.7 ) — (1.7 ) 1.8 (2.9 ) 223.2 Total available-for-sale 5,644.2 349.3 (364.5 ) 15.8 (197.7 ) 9.4 95.4 5,551.9 Available-for-sale equity securities 135.2 12.8 (1.4 ) — — — 1.5 148.1 Short-term investments 0.9 — — — — — (0.9 ) — Fair value investments 169.9 — (3.8 ) — — (3.7 ) — 162.4 Total assets $ 5,950.2 $ 362.1 $ (369.7 ) $ 15.8 $ (197.7 ) $ 5.7 $ 96.0 $ 5,862.4 ——————— [1] Reflected in realized investment gains and losses for all assets except fair value investments which are included in net investment income. [2] Includes securities whose underlying collateral is an obligation of a U.S. government entity. Level 3 Financial Liabilities: Embedded Derivative Liabilities ($ in millions) Three Months Ended Six Months Ended 2015 2014 2015 2014 Balance, beginning of period $ 175.6 $ 109.0 $ 160.7 $ 87.8 Net purchases / settlements 4.5 6.9 9.1 15.2 Transfers into Level 3 — — — — Transfers out of Level 3 — — — — Realized (gains) losses (4.4 ) 2.2 5.9 15.1 Balance, end of period $ 175.7 $ 118.1 $ 175.7 $ 118.1 Significant unobservable inputs used in the fair value measurement of Level 3 assets are yield, prepayment rate, default rate and recovery rate. Keeping other inputs unchanged, an increase in yield, default rate or prepayment rate would decrease the fair value of the asset while an increase in recovery rate would result in an increase to the fair value of the asset. Yields are a function of the underlying U.S. Treasury rates and asset spreads, and changes in default and recovery rates are dependent on overall market conditions. The following tables present quantitative estimates about unobservable inputs used in the fair value measurement of significant categories of internally priced assets. Level 3 Assets: [1] June 30, 2015 ($ in millions) Fair Value Valuation Technique(s) Unobservable Input Range (Weighted Average) U.S. government and agency $ 357.6 Discounted cash flow Yield 0.92% - 4.65% (3.33%) State and political subdivision $ 212.4 Discounted cash flow Yield 1.98% - 4.75% (3.42%) Corporate $ 3,238.1 Discounted cash flow Yield 0.92% - 7.31% (3.37%) Other ABS $ 36.6 Discounted cash flow Yield 0.50% - 3.05% (1.76%) Fair value investments $ 6.5 Discounted cash flow Default rate 0.16% Recovery rate 44.00% ——————— [1] Excludes Level 3 assets which are valued based upon non-binding independent third-party valuations or third-party price information for which unobservable inputs are not reasonably available to us. Level 3 Assets: [1] December 31, 2014 ($ in millions) Fair Value Valuation Technique(s) Unobservable Input Range (Weighted Average) U.S. government and agency $ 362.2 Discounted cash flow Yield 0.99% - 4.27% (3.17%) State and political subdivision $ 159.1 Discounted cash flow Yield 2.15% - 4.50% (3.22%) Corporate $ 3,116.6 Discounted cash flow Yield 0.93% - 6.88% (3.24%) Other ABS $ 39.3 Discounted cash flow Yield 0.60% - 4.00% (1.92%) Fair value investments $ 6.3 Discounted cash flow Default rate 0.17% Recovery rate 44.00% ——————— [1] Excludes Level 3 assets which are valued based upon non-binding independent third-party valuations or third-party price information for which unobservable inputs are not reasonably available to us. Significant unobservable inputs used in the fair value measurement of variable annuity (“VA”) GMAB and GMWB type liabilities are equity volatility, swap curve, mortality and lapse rates and an adjustment for non-performance risk. Keeping other inputs unchanged, an increase in the equity volatility would increase the fair value of the liability while an increase in the swap curve or credit standing adjustment (“CSA”) would result in a decrease to the fair value of the liability. The impact of changes in mortality and lapse rates are dependent on overall market conditions. The fair value of fixed indexed annuity and indexed universal life embedded derivative related to index credits is calculated using the swap curve, future option budget, mortality and lapse rates, as well as an adjustment for non-performance risk. Keeping other inputs unchanged, an increase in any of these significant unobservable inputs would result in a decrease of the fixed indexed annuity embedded derivative liability. The following tables present quantitative estimates about unobservable inputs used in the fair value measurement of internally priced liabilities. Level 3 Liabilities: June 30, 2015 ($ in millions) Fair Value Valuation Technique(s) Unobservable Input Range Embedded derivatives (FIA) $ 172.3 Budget method Swap curve 0.31% - 2.80% Mortality rate 105% or 97 % 2012 IAM basic table Lapse rate 0.04% - 46.44% CSA 3.32% Embedded derivatives (GMAB / GMWB / COMBO) $ 3.4 Risk neutral stochastic Volatility surface 8.16% - 61.32% Swap curve 0.25% - 3.02% Mortality rate 105% 2012 IAM basic table Lapse rate 0.00% - 40.00% CSA 3.32% Level 3 Liabilities: December 31, 2014 ($ in millions) Fair Value Valuation Technique(s) Unobservable Input Range Embedded derivatives (FIA) $ 153.9 Budget method Swap curve 0.24% - 2.55% Mortality rate 105% or 97% 2012 IAM basic table Lapse rate 0.04% - 46.44% CSA 3.08% Embedded derivatives (GMAB / GMWB / COMBO) $ 6.8 Risk neutral stochastic Volatility surface 9.89% - 67.34% Swap curve 0.21% - 2.76% Mortality rate 105% 2012 IAM basic table Lapse rate 0.00% - 40.00% CSA 3.08% Level 3 Assets and Liabilities by Pricing Source: June 30, 2015 ($ in millions) Internal [1] External [2] Total Assets Available-for-sale debt securities U.S. government and agency [3] $ 357.6 $ — $ 357.6 State and political subdivision 212.4 190.5 402.9 Foreign government — 32.6 32.6 Corporate 3,238.1 1,032.9 4,271.0 CMBS — 29.7 29.7 RMBS — 416.5 416.5 CDO/CLO — 259.9 259.9 Other ABS 36.6 156.4 193.0 Total available-for-sale debt securities 3,844.7 2,118.5 5,963.2 Available-for-sale equity securities — 168.3 168.3 Fair value investments 6.5 172.5 179.0 Total assets $ 3,851.2 $ 2,459.3 $ 6,310.5 Liabilities Embedded derivatives $ 175.7 $ — $ 175.7 Total liabilities $ 175.7 $ — $ 175.7 ——————— [1] Represents valuations reflecting both internally-derived and market inputs, as well as third-party information or quotes. [2] Represents unadjusted prices from independent pricing services, third-party financial statements and independent indicative broker quotes where pricing inputs are not readily available. [3] Includes securities whose underlying collateral is an obligation of a U.S. government entity. Level 3 Assets and Liabilities by Pricing Source: December 31, 2014 ($ in millions) Internal [1] External [2] Total Assets Available-for-sale debt securities U.S. government and agency [3] $ 362.2 $ — $ 362.2 State and political subdivision 159.1 241.1 400.2 Foreign government — 53.6 53.6 Corporate 3,116.6 1,287.3 4,403.9 CMBS — 152.8 152.8 RMBS — 470.3 470.3 CDO/CLO — 196.9 196.9 Other ABS 39.3 205.8 245.1 Total available-for-sale debt securities 3,677.2 2,607.8 6,285.0 Available-for-sale equity securities — 179.5 179.5 Fair value investments 6.3 183.7 190.0 Total assets $ 3,683.5 $ 2,971.0 $ 6,654.5 Liabilities Embedded derivatives $ 160.7 $ — $ 160.7 Total liabilities $ 160.7 $ — $ 160.7 ——————— [1] Represents valuations reflecting both internally-derived and market inputs, as well as third-party information or quotes. [2] Represents unadjusted prices from independent pricing services, third-party financial statements and independent indicative broker quotes where pricing inputs are not readily available. [3] Includes securities whose underlying collateral is an obligation of a U.S. government entity. Financial instruments not carried at fair value The Company is required by U.S. GAAP to disclose the fair value of certain financial instruments including those that are not carried at fair value. The following table discloses the Company’s financial instruments where the carrying amounts and fair values differ: Carrying Amounts and Fair Values Fair Value June 30, 2015 December 31, 2014 ($ in millions) Carrying Fair Carrying Fair Financial assets: Policy loans Level 3 $ 2,360.7 $ 2,347.4 $ 2,352.1 $ 2,339.2 Life settlements Level 3 $ 18.0 $ 18.0 $ 22.4 $ 17.4 Financial liabilities: Investment contracts Level 3 $ 4,220.8 $ 4,222.2 $ 3,955.0 $ 3,957.3 7.15 % Surplus notes Level 3 $ 126.2 $ 91.2 $ 126.2 $ 95.8 7.45% Senior unsecured bonds Level 2 $ 252.7 $ 205.6 $ 252.7 $ 248.0 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes It is our general policy to estimate taxes for interim periods based on estimated annual effective tax rates which are derived, in part, from expected annual pre-tax income. However, the change in the deferred income tax asset balances, income tax benefit and expense and related valuation allowance for the three and six months ended June 30, 2015 have been computed based on the first six months of 2015 as a discrete period. The tax benefit of $13.0 million for the three months ended June 30, 2015 is comprised of a $14.5 million current tax benefit and a $1.5 million deferred tax expense. The tax benefit of $15.2 million for the six months ended June 30, 2015 is attributable to current tax benefits. Of the current tax benefit, $2.0 million is a result of the conclusion of the 2011 and 2012 IRS audit. The remaining $13.2 million current tax benefit represents a benefit on our six month ended taxable loss. We recorded a deferred tax asset, net of deferred tax liabilities and valuation allowances, of $51.6 million as of June 30, 2015 . Consistent with prior periods, we have recorded a full valuation allowance against all categories of net deferred tax assets other than gross unrealized losses on available-for-sale debt securities, due to the significant negative evidence of historical cumulative U.S. GAAP losses and the uncertainty of consistent future U.S. GAAP earnings. We have concluded that a valuation allowance on the deferred tax assets attributable to available-for-sale debt securities with gross unrealized losses was not required due to our ability and intent to hold these securities until recovery of fair value or contractual maturity, thereby avoiding realization of taxable capital losses. This conclusion is also consistent with prior periods. Consistent with the above, for the three months ended June 30, 2015 , we recognized a net decrease in the valuation allowance of $6.0 million . For the six months ended June 30, 2015 , we recognized a net increase in the valuation allowance of $25.0 million . In accordance with the intraperiod tax allocation rules, the change in the valuation allowance has been allocated to various financial statement components of income or loss. The net deferred tax assets increased by $22.9 million for the three months ended June 30, 2015 , which was attributable to available-for-sale debt securities with gross unrealized losses. The net deferred tax assets increased by $17.4 million for the six months ended June 30, 2015 , which also was attributable to available-for-sale debt securities with gross unrealized losses. The Company and its subsidiaries file consolidated, combined, unitary or separate income tax returns in the U.S. federal, various state and foreign jurisdictions. In the second quarter of 2015, the IRS concluded their IRS audit of tax years 2011 and 2012, resulting in a benefit of $2.0 million . The Company is no longer subject to U.S. federal income tax examinations by tax authorities for years before 2013. Based upon the timing and status of our current examinations by taxing authorities, we do not believe that it is reasonably possible that any changes to the balance of unrecognized tax benefits occurring within the next 12 months will result in a significant change to the results of operations, financial condition or liquidity. In addition, we do not anticipate that there will be additional payments made or refunds received within the next 12 months with respect to the years under audit. We do not anticipate any increases to the existing unrecognized tax benefits that would have a significant impact on the financial position of the Company. As part of the intercompany tax sharing agreement, the holding company is required to hold funds in escrow for the benefit of Phoenix Life in the event Phoenix Life incurs future taxable losses. In accordance with its regulatory obligation, the holding company funded the escrow with $78.9 million of assets including treasury stock, a surplus note issued by PHL Variable and $10.8 million of cash from the holding company in the fourth quarter of 2014. The escrow amount is primarily attributable to cash due to the holding company for losses utilized and benefited in the 2013 tax return. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2015 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) Changes in each component of AOCI attributable to the Company for the periods ended June 30, 2015 and 2014 are as follows below (net of tax): Accumulated Other Comprehensive Income (Loss) Attributable to The Phoenix Companies, Inc.: ($ in millions) Net Unrealized Gains / (Losses) on Investments where Credit-related OTTI was Recognized [1] Net Unrealized Gains / (Losses) on All Other Investments [1] Net Pension Liability Adjustments Total Balance as of March 31, 2015 $ 8.2 $ 52.9 $ (297.7 ) $ (236.6 ) Change in component during the period before reclassifications (1.7 ) (22.1 ) 0.1 (23.7 ) Amounts reclassified from AOCI (0.3 ) (6.2 ) 1.6 (4.9 ) Balance as of June 30, 2015 $ 6.2 $ 24.6 $ (296.0 ) $ (265.2 ) Balance as of March 31, 2014 $ 10.2 $ 14.7 $ (217.2 ) $ (192.3 ) Change in component during the period before reclassifications 3.1 19.2 0.7 23.0 Amounts reclassified from AOCI 0.4 (4.2 ) 1.0 (2.8 ) Balance as of June 30, 2014 $ 13.7 $ 29.7 $ (215.5 ) $ (172.1 ) Balance as of December 31, 2014 $ 9.9 $ 54.8 $ (299.1 ) $ (234.4 ) Change in component during the period before reclassifications (2.2 ) (25.7 ) 0.1 (27.8 ) Amounts reclassified from AOCI (1.5 ) (4.5 ) 3.0 (3.0 ) Balance as of June 30, 2015 $ 6.2 $ 24.6 $ (296.0 ) $ (265.2 ) Balance as of December 31, 2013 $ 7.0 $ 26.9 $ (218.9 ) $ (185.0 ) Change in component during the period before reclassifications 9.3 10.2 1.4 20.9 Amounts reclassified from AOCI (2.6 ) (7.4 ) 2.0 (8.0 ) Balance as of June 30, 2014 $ 13.7 $ 29.7 $ (215.5 ) $ (172.1 ) ——————— [1] See Note 7 to these consolidated interim unaudited financial statements for additional information regarding offsets to net unrealized investment gains and losses which include policyholder dividend obligation, DAC and other actuarial offsets, and deferred income tax expense (benefit). Reclassifications from AOCI consist of the following: AOCI Amounts Reclassified from AOCI Affected Line Item in the Consolidated Statements of Operations and Comprehensive Income ($ in millions) Three Months Ended Six Months Ended 2015 2014 2015 2014 Net unrealized gains / (losses) on investments where credit-related OTTI was recognized: Available-for-sale securities $ 0.5 $ (0.6 ) $ 2.4 $ 4.0 Net realized capital gains (losses) 0.5 (0.6 ) 2.4 4.0 Total before income taxes 0.2 (0.2 ) 0.9 1.4 Income tax expense (benefit) $ 0.3 $ (0.4 ) $ 1.5 $ 2.6 Net income (loss) Net unrealized gains / (losses) on all other investments: Available-for-sale securities $ 9.6 $ 6.4 $ 6.9 $ 11.2 Net realized capital gains (losses) 9.6 6.4 6.9 11.2 Total before income taxes 3.4 2.2 2.4 3.8 Income tax expense (benefit) $ 6.2 $ 4.2 $ 4.5 $ 7.4 Net income (loss) Net pension liability adjustments: Amortization of actuarial gains (losses) $ (2.7 ) $ (1.9 ) $ (5.1 ) $ (3.8 ) Other operating expense Amortization of prior service costs 0.3 0.3 0.6 0.6 Other operating expense (2.4 ) (1.6 ) (4.5 ) (3.2 ) Total before income taxes (0.8 ) (0.6 ) (1.5 ) (1.2 ) Income tax expense (benefit) $ (1.6 ) $ (1.0 ) $ (3.0 ) $ (2.0 ) Net income (loss) Total amounts reclassified from AOCI $ 4.9 $ 2.8 $ 3.0 $ 8.0 Net income (loss) |
Employee Benefit Plans and Empl
Employee Benefit Plans and Employment Agreements | 6 Months Ended |
Jun. 30, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plans and Employment Agreements | Employee Benefit Plans and Employment Agreements Pension and other post-employment benefits We provide our employees with post-employment benefits that include retirement benefits, through pension and savings plans, and other benefits, including health care and life insurance. The components of pension and post-employment benefit costs follow: Components of Pension Benefit Costs: Three Months Ended Six Months Ended ($ in millions) 2015 2014 2015 2014 Service cost $ 0.8 $ 0.6 $ 1.6 $ 1.2 Interest cost 8.6 9.1 17.2 18.2 Expected return on plan assets (9.8 ) (9.5 ) (19.8 ) (19.0 ) Net loss amortization 2.7 2.0 5.2 4.0 Pension benefit cost $ 2.3 $ 2.2 $ 4.2 $ 4.4 Components of Other Post-Employment Benefit Costs: Three Months Ended Six Months Ended ($ in millions) 2015 2014 2015 2014 Service cost $ — $ — $ — $ — Interest cost 0.3 0.4 0.7 0.8 Net gain amortization — (0.1 ) (0.1 ) (0.2 ) Prior service cost amortization (0.3 ) (0.3 ) (0.6 ) (0.6 ) Other post-employment benefit cost $ — $ — $ — $ — For the three months ended June 30, 2015 , other comprehensive loss included unrealized gains of $1.1 million , net of taxes, relating to the amortization of net prior service costs and net gains/losses. For the six months ended June 30, 2015 , other comprehensive loss included unrealized gains of $2.0 million , net of taxes, relating to the amortization of net prior service costs and net gains/losses. Effective March 31, 2010, all benefit accruals under all of our funded and unfunded defined benefit plans were frozen. On August 8, 2014, the Highway and Transportation Funding Act of 2014 was enacted into law. The law extended certain pension funding provisions originally included in the Moving Ahead for Progress in the 21st Century Act (MAP-21). The Company took advantage of this in the first and second quarters of 2015 and does not expect to make any contributions for the remainder of the year. Savings plans During the three months ended June 30, 2015 and 2014 , we incurred costs of $0.9 million and $1.1 million , respectively, for contributions to our savings plans. During the six months ended June 30, 2015 and 2014 , we incurred costs of $2.4 million and $2.5 million , respectively, for contributions to our savings plans. Effective April 1, 2010, employees of the Company (except Saybrus employees) are eligible to receive an annual employer discretionary contribution according to the 401(k) plan terms. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following table presents a reconciliation of shares used in calculating basic earnings (loss) per common share to those used in calculating diluted earnings (loss) per common share. Shares Used in Calculation of Earnings Per Share: Three Months Ended Six Months Ended (shares in thousands) 2015 2014 2015 2014 Weighted-average common shares outstanding 5,751 5,749 5,751 5,745 Weighted-average effect of dilutive potential common shares: Restricted stock units 24 3 12 10 Employee stock options — 2 — 2 Potential common shares 24 5 12 12 Less: Potential common shares excluded from calculation due to net losses 24 5 12 12 Dilutive potential common shares — — — — Weighted-average common shares outstanding, including dilutive potential common shares 5,751 5,749 5,751 5,745 As a result of the net loss from continuing operations for the three and six months ended June 30, 2015 and 2014 , we are required to use basic weighted-average common shares outstanding in the calculation of diluted earnings per share for those periods, since the inclusion of shares of restricted stock units and options would have been anti-dilutive to the earnings per share calculation. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Life and Annuity derives revenue from premiums, fee income and cost of insurance (“COI”) charges, net investment income and realized gains (losses). Saybrus derives revenue primarily from fees collected for advisory and distribution services. Segment Information on Revenues: Three Months Ended Six Months Ended ($ in millions) 2015 2014 2015 2014 Life and Annuity $ 414.7 $ 406.5 $ 814.5 $ 800.8 Saybrus Partners [1] 11.1 9.6 20.1 16.9 Less: Intercompany revenues [2] 3.8 3.0 7.2 5.6 Total revenues $ 422.0 $ 413.1 $ 827.4 $ 812.1 ——————— [1] Includes intercompany commission revenue of $3.8 million and $3.0 million for the three months ended June 30, 2015 and 2014 , respectively, and $7.2 million and $5.7 million for the six months ended June 30, 2015 and 2014 , respectively. [2] All intercompany balances are eliminated in consolidating the financial statements. Operating income is a non-U.S. GAAP financial measure. Management believes that these measures provide additional insight into the underlying trends in our operations however, our non-U.S. GAAP financial measures should not be considered as substitutes for net income or measures that are derived from or incorporate net income and may be different from similarly titled measures of other companies. Investors should evaluate both U.S. GAAP and non-U.S. GAAP financial measures when reviewing our performance. Operating income is calculated by excluding realized investment gains (losses) as their amount and timing may be subject to management’s investment decisions. Results of Operations by Segment as Reconciled to Consolidated Net Income (Loss): Three Months Ended Six Months Ended ($ in millions) 2015 2014 2015 2014 Life and Annuity operating income (loss) $ (35.4 ) $ (47.5 ) $ (94.8 ) $ (53.3 ) Saybrus Partners operating income (loss) 2.7 1.9 3.5 2.2 Less: Applicable income tax expense (benefit) (13.0 ) (19.6 ) (15.2 ) (24.4 ) Income (loss) from discontinued operations, net of income taxes (0.6 ) (0.6 ) (1.1 ) (1.2 ) Net realized gains (losses) (2.1 ) 4.2 (18.2 ) (22.7 ) Less: Net income (loss) attributable to noncontrolling interests 0.2 — 1.2 (0.1 ) Net income (loss) $ (22.6 ) $ (22.4 ) $ (96.6 ) $ (50.5 ) We have not provided asset information for the segments. The assets attributable to Saybrus are not significant relative to the assets of our consolidated balance sheets and are not utilized by the chief operating decision maker. All third-party interest revenue and interest expense of the Company reside within the Life and Annuity segment. |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Jun. 30, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations Discontinued Reinsurance Operations In 1999, we discontinued our reinsurance operations through a combination of sale, reinsurance and placement of certain retained group accident and health reinsurance business into run-off. We adopted a formal plan to stop writing new contracts covering these risks and to end the existing contracts as soon as those contracts would permit. However, we remain liable for claims under contracts which have not been commuted. We have established reserves for claims and related expenses that we expect to pay on our discontinued group accident and health reinsurance business. These reserves are based on currently known facts and estimates about, among other things, the amount of insured losses and expenses that we believe we will pay, the period over which they will be paid, the amount of reinsurance we believe we will collect from our retrocessionaires and the likely legal and administrative costs of winding down the business. Our total policy liabilities and accruals were $38.4 million and $39.3 million as of June 30, 2015 and December 31, 2014 , respectively. Our total amounts recoverable from retrocessionaires related to paid losses were $0.7 million and $0.1 million as of June 30, 2015 and December 31, 2014 , respectively. Losses of $0.5 million and $1.0 million were recognized during the three and six months ended June 30, 2015 , respectively, primarily due to normal run-off activity. Losses of $0.5 million and $1.1 million were recognized during the three and six months ended June 30, 2014 , respectively, primarily due to normal run-off activity. |
Contingent Liabilities
Contingent Liabilities | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingent Liabilities | Contingent Liabilities Litigation and arbitration The Company is regularly involved in litigation and arbitration, both as a defendant and as a plaintiff. The litigation and arbitration naming the Company as a defendant ordinarily involves our activities as an insurer, employer, investor, investment advisor or taxpayer. It is not feasible to predict or determine the ultimate outcome of all legal or arbitration proceedings or to provide reasonable ranges of potential losses. Management of the Company believes that the ultimate outcome of our litigation and arbitration matters are not likely, either individually or in the aggregate, to have a material adverse effect on the financial condition of the Company beyond the amounts already reported in these financial statements. However, given the large or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation and arbitration, it is possible that an adverse outcome in certain matters could, from time to time, have a material adverse effect on the results of operations or cash flows in particular quarterly or annual periods. SEC Cease-and-Desist Order Phoenix and PHL Variable are subject to an SEC Order Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order which was approved by the SEC in March 2014 (the “March 2014 Order”) and was subsequently amended by an amended SEC administrative order approved by the SEC in August 2014 (the March 2014 Order, as amended, the “Amended Order”). The Amended Order and the March 2014 Order (collectively, the “Orders”), directed Phoenix and PHL Variable to cease and desist from committing or causing any violations and any future violations of Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13 thereunder and Section 15(d) of the Exchange Act and Rules 15d-1 and 15d-13 thereunder. Phoenix and PHL Variable remain subject to these obligations. Pursuant to the Orders, Phoenix and PHL Variable were required to file certain periodic SEC reports in accordance with the timetables set forth in the Orders. All of such filings have been made. Phoenix and PHL Variable paid civil monetary penalties to the SEC in the aggregate amount of $1.1 million pursuant to the terms of the Orders in 2014. Cases Brought by Policy Investors On August 2, 2012, Lima LS PLC filed a complaint against Phoenix, Phoenix Life, PHL Variable, James D. Wehr, Philip K. Polkinghorn, Edward W. Cassidy, Dona D. Young and other unnamed defendants in the United States District Court for the District of Connecticut (Case No. CV12-01122). On July 1, 2013, the defendants’ motion to dismiss the complaint was granted in part and denied in part. Thereafter, on July 31, 2013, the plaintiff served an amended complaint against the same defendants, with the exception that Mr. Cassidy was dropped as a defendant. The plaintiffs allege that Phoenix Life and PHL Variable promoted certain policy sales knowing that the policies would ultimately be owned by investors and then challenging the validity of these policies or denying claims submitted on these policies. Plaintiffs are seeking damages, including punitive and treble damages, attorneys’ fees and a declaratory judgment. We believe we have meritorious defenses against this lawsuit and we intend to vigorously defend against these claims. The outcome of this litigation and any potential losses are uncertain. Cost of Insurance Cases On November 18, 2011, Martin Fleisher and another plaintiff (the “Fleisher Litigation”), on behalf of themselves and others similarly situated, filed suit against Phoenix Life in the United States District Court for the Southern District of New York (C.A. No. 1:11-cv-08405-CM-JCF (U.S. Dist. Ct; S.D.N.Y.)) challenging cost of insurance (“COI”) rate adjustments implemented by Phoenix Life in 2010 and 2011 in certain universal life insurance policies. The complaint seeks damages for breach of contract. The class certified by the court is limited to holders of Phoenix Life policies issued in New York subject to New York law and subject to Phoenix Life’s 2011 COI rate adjustment. PHL Variable has been named as a defendant in six actions challenging its COI rate adjustments in certain universal life insurance policies implemented concurrently with the Phoenix Life adjustments. Phoenix Life and PHL Variable are referred to as the “Phoenix Life Companies.” Five cases have been brought against PHL Variable, while one case has been brought against PHL Variable and Phoenix Life. These six cases, only one of which is styled as a class action, have been brought by (1) Tiger Capital LLC (C.A. No. 1:12-cv- 02939-CM-JCF; U.S. Dist. Ct; S.D.N.Y., complaint filed on March 14, 2012; the “Tiger Capital Litigation”); (2-5) U.S. Bank National Association, as securities intermediary for Lima Acquisition LP ((2: C.A. No. 1:12-cv-06811-CM-JCF; U.S. Dist. Ct; S.D.N.Y., complaint filed on November 16, 2011; 3: C.A. No. 1:13-cv-01580-CM-JCF; U.S. Dist. Ct; S.D.N.Y., complaint filed on March 8, 2013; collectively, the “U.S. Bank N.Y. Litigations”); (4: C.A. No. 3:14-cv-00555-WWE; U.S. Dist. Ct; D. Conn., complaint originally filed on March 6, 2013, in the District of Delaware and transferred by order dated April 22, 2014, to the District of Connecticut; and 5: C.A. No. 3:14-cv-01398-WWE, U.S. Dist. Ct; D. Conn., complaint filed on September 23, 2014, and amended on October 16, 2014, to add Phoenix Life as a defendant, and consolidated with No. 3:14-cv-00555-WWE (collectively the “U.S. Bank Conn. Litigations”)); and (6) SPRR LLC (C.A. No. 1:14-cv-8714-CM; U.S. Dist. Ct.; S.D.N.Y., complaint filed on October 31, 2014; the “SPRR Litigation”). SPRR LLC filed suit against PHL Variable, on behalf of itself and others similarly situated, challenging COI rate adjustments implemented by PHL Variable in 2011. The Tiger Capital Litigation and the two U.S. Bank N.Y. Litigations were assigned to the same judge as the Fleisher Litigation. Plaintiff in the Tiger Capital Litigation seeks damages for breach of contract. Plaintiff in the U.S. Bank N.Y. Litigations and the U.S. Bank Conn. Litigations seeks damages and attorneys’ fees for breach of contract and other common law and statutory claims. The plaintiff in the SPRR Litigation, which has been reassigned to the same judge as the Fleisher Litigation, Tiger Capital Litigation and the two U.S. Bank N.Y. Litigations, seeks damages for breach of contract for a nationwide class of policyholders. The Phoenix Life Companies reached a definitive agreement to settle a COI case, the Tiger Capital Litigation (Tiger Capital LLC (C.A. No. 1:12-cv-02939-CM-JCF; U.S. Dist. Ct; S.D.N.Y.)) on a basis that will not have a material impact on the Company’s financial statements. On June 3, 2015, the parties to the Tiger Capital Litigation advised the court of the settlement, which includes Tiger Capital, LLC’s participation in the class Settlement described below. The Phoenix Life Companies reached an agreement as of April 30, 2015, memorialized in a formal settlement agreement executed on May 29, 2015, with SPRR, LLC, Martin Fleisher, as trustee of the Michael Moss Irrevocable Life Insurance Trust II, and Jonathan Berck, as trustee of the John L. Loeb, Jr. Insurance Trust (collectively, the SPRR Litigation and the Fleisher Litigation plaintiffs referred to as the “Plaintiffs”), to resolve the Fleisher Litigation and SPRR Litigation (the “Settlement”). A motion for preliminary approval of the Settlement was filed with the United States District Court for the Southern District of New York on May 29, 2015. On June 3, 2015, the court granted preliminary approval of the Settlement, ordered notice be given to class members, and set a hearing on September 9, 2015 to address, among other things, final approval of the Settlement. The proposed Settlement class consists of all policyholders that were subject to the 2010 or 2011 COI rate adjustments (collectively, the “Settlement Class”), including the policies within the above-named COI cases, and will be structured to allow members of the Settlement Class to opt out of the Settlement. The Phoenix Life Companies will establish a Settlement fund, which may be reduced proportionally for any opt-outs, and will pay a class counsel fee if the Settlement is approved. The Phoenix Life Companies will be released by all participating members of the Settlement Class, and the COI rate adjustment for policies participating in the Settlement Class will remain in effect. The Phoenix Life Companies agreed to pay a total of $48.5 million , as reduced for any opt-outs, in connection with the Settlement. The Phoenix Life Companies agreed not to impose additional increases to COI rates on policies participating in the Settlement Class through the end of 2020, and not to challenge the validity of policies participating in the Settlement Class for lack of insurable interest or misrepresentations in the policy applications. The Settlement is subject to certain conditions and final court approval is intended to resolve all pending COI cases, other than for policyholders who opt-out of the Settlement. Under the Settlement, policyholders who are members of the Settlement Class, including those which have filed individual actions relating to COI rate adjustments, may opt out of the Settlement and separately litigate their claims. The opt-out period expired on July 17, 2015. Opt-out notices have been received by the Phoenix Life Companies, including from U.S. Bank, a party to four COI cases. The Phoenix Life Companies are currently unable to estimate the damages that policyholders who opt out of the Settlement may or may not collect in litigation against the Phoenix Life Companies. There can be no assurance that the ultimate cost to Phoenix will not be higher or lower than $48.5 million . Complaints to state insurance departments regarding PHL Variable’s COI rate adjustments have also prompted regulatory inquiries or investigations in several states, with two of such states (California and Wisconsin) issuing letters directing PHL Variable to take remedial action in response to complaints by a single policyholder. PHL Variable disagrees with both states’ positions. On March 23, 2015, an Administrative Law Judge (“ALJ”) in Wisconsin ordered PHL Variable to pay restitution to current and former owners of seven policies and imposed a fine on PHL Variable which, in a total amount, does not have a material impact on PHL Variable’s financial position (Office of the Commissioner of Insurance Case No. 13- C35362). PHL Variable disagrees with the ALJ’s determination and has appealed the order. For any cases or regulatory directives not resolved by the Settlement, Phoenix Life and PHL Variable believe that they have meritorious defenses against all of these lawsuits and regulatory directives and intend to vigorously defend against them, including by appeal if necessary. For any matters not resolved by the Settlement, the outcome is uncertain and any potential losses cannot be reasonably estimated. Regulatory matters State regulatory bodies, the SEC, the Financial Industry Regulatory Authority (“FINRA”), the Internal Revenue Service (“IRS”) and other regulatory bodies regularly make inquiries of us and, from time to time, conduct examinations or investigations concerning our compliance with laws and regulations related to, among other things, our insurance and broker-dealer subsidiaries, securities offerings and registered products. We endeavor to respond to such inquiries in an appropriate way and to take corrective action if warranted. Further, the Company is providing to the SEC certain information and documentation regarding the restatements of its prior period financial statements and the staff of the SEC has indicated to the Company that the matter remains subject to further investigation and potential further regulatory action. We cannot predict the outcome of any of such investigations or actions related to these or other matters. Regulatory actions may be difficult to assess or quantify. The nature and magnitude of their outcomes may remain unknown for substantial periods of time. It is not feasible to predict or determine the ultimate outcome of all pending inquiries, investigations, legal proceedings and other regulatory actions, or to provide reasonable ranges of potential losses. Based on current information, we believe that the outcomes of our regulatory matters are not likely, either individually or in the aggregate, to have a material adverse effect on our consolidated financial condition. However, given the inherent unpredictability of regulatory matters, it is possible that an adverse outcome in certain matters could, from time to time, have a material adverse effect on our consolidated financial statements in particular quarterly or annual periods. |
Other Commitments
Other Commitments | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Other Commitments | Other Commitments We have an agreement with HP Enterprise Services related to the management of our infrastructure services which expires in 2015. The remaining commitments total $7.0 million through 2015. As part of its normal investment activities, the Company enters into agreements to fund limited partnerships and other investments that make debt and equity investments. As of June 30, 2015 , the Company had unfunded commitments of $242.7 million under such agreements, of which $54.2 million is expected to be funded by December 31, 2015 . See Note 7 to these consolidated interim unaudited financial statements for additional information on VIEs. On January 5, 2015, the Company committed to purchase $100.0 million in investment grade rated infrastructure bonds through an outside investment advisor. These purchases are expected to be made over 24 months and no more than $50.0 million of the committed amount may be called in the first 12 month period. The arrangement may be terminated prior to funding the committed amount at the discretion of the Company subject to certain standard provisions for notice and immaterial fees. The debt will be held as available-for-sale debt securities on the consolidated balance sheets. As of June 30, 2015 , $8.0 million has been funded. In addition, the Company enters into agreements to purchase private placement investments. At June 30, 2015 , the Company had open commitments of $145.7 million under such agreements which are expected to be funded by July 15, 2016 . |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events De-stacking of Life Companies On July 28, 2015, the Company completed the de-stacking of its life subsidiaries through an extraordinary dividend of PHL Variable, American Phoenix Life and Reassurance and Phoenix Life and Annuity Company from Phoenix Life to Phoenix, effective July 1, 2015 and based on the June 30, 2015 statutory carrying value of the three subsidiaries. The Company believes it has adequate capital resources to meet PHL Variable’s currently anticipated capital needs. Dividends On July 16, 2015, Phoenix Life declared a dividend of $29.9 million to be paid to Phoenix on or after July 16, 2015. This dividend was paid on July 17, 2015. This dividend cannot be used to meet the operating needs of PHL Variable. Rating Agency Actions On July 9, 2015, Standard & Poor's Ratings Services placed its ‘B-’long-term counterparty credit rating on Phoenix and its ‘B+’ long-term counterparty credit and financial strength ratings on PHL Variable on CreditWatch with negative implications. They also placed its ‘B+’ long-term counterparty credit and financial strength ratings on Phoenix Life on CreditWatch with developing implications. We expect them to resolve all ratings by the end of the third quarter. Management and Organizational Changes On July 6, 2015, we announced the resignation of Peter A. Hofmann as Executive Vice President, Strategy and Business Development of the Company effective as of July 15, 2015. |
Basis of Presentation and Sig28
Basis of Presentation and Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of presentation | We have prepared these consolidated interim unaudited financial statements in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”), which differs materially from the accounting practices prescribed by various insurance regulatory authorities. Our consolidated interim unaudited financial statements include the accounts of the Company and its subsidiaries. Intercompany balances and transactions have been eliminated in consolidating these consolidated interim unaudited financial statements. |
Reclassification | These consolidated interim unaudited financial statements include all adjustments (consisting primarily of accruals) considered necessary for the fair statement of the consolidated balance sheets, consolidated statements of operations and comprehensive income, consolidated statements of cash flows and consolidated statements of changes in stockholders’ equity for the interim periods. Certain financial information that is not required for interim reporting has been omitted. Financial results for the three and six months ended June 30, 2015 are not necessarily indicative of full year results. These consolidated interim unaudited financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2014 contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 (the “ 2014 Form 10-K”). In the 2014 Form 10-K, the Company restated its financial statements for the year ended December 31, 2013, the three-months ended December 31, 2013, and the three-months ended June 30, 2014 and revised its financial statements for all other periods presented. The unaudited financial statements for the three month period ended June 30, 2014 contained in this Form 10-Q are presented on a restated basis, and the unaudited financial statements for the six month period ended June 30, 2014 contained in this Form 10-Q are presented on a revised basis, consistent with the restated and revised financial statements contained in the 2014 Form 10-K. |
Use of Estimates | Use of estimates In preparing these consolidated interim unaudited financial statements in conformity with U.S. GAAP, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated interim unaudited financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions are made in the determination of estimated gross profits (“EGPs”) and estimated gross margins (“EGMs”) used in the valuation and amortization of assets and liabilities associated with universal life and annuity contracts; policyholder liabilities and accruals; valuation of investments in debt and equity securities; limited partnerships and other investments; valuation of deferred tax assets; pension and other post-employment benefits liabilities; and accruals for contingent liabilities. Certain of these estimates are particularly sensitive to market conditions and/or volatility in the debt or equity markets which could have a material impact on the consolidated interim unaudited financial statements. Actual results could differ from these estimates. |
Adoption of new accounting standards and Accounting standards not yet adopted | Adoption of new accounting standards Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity In April 2014, the Financial Accounting Standards Board (the “FASB”) issued updated guidance that changes the criteria for reporting discontinued operations and introduces new financial statement disclosures. The new guidance is effective prospectively to new disposals and new classifications of disposal groups as held for sale that occur within annual periods beginning on or after December 15, 2014 and interim periods within those annual periods. This new guidance did not have any impact on the Company’s consolidated financial position, results of operations and financial statement disclosures. Accounting for Troubled Debt Restructurings by Creditors In January 2014, the FASB issued updated guidance for troubled debt restructurings clarifying when an in substance repossession or foreclosure occurs, and when a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan. The new guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. This new guidance did not have a material impact on the Company’s consolidated financial position, results of operations and financial statement disclosures. Accounting for Investments in Qualified Affordable Housing Projects In January 2014, the FASB issued updated guidance regarding investments in flow-through limited liability entities that manage or invest in affordable housing projects that qualify for the low-income housing tax credit. Under the guidance, an entity is permitted to make an accounting policy election to amortize the initial cost of its investment in proportion to the tax credits and other tax benefits received and recognize the net investment performance in the statement of operations as a component of income tax expense (benefit) if certain conditions are met. The new guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. This new guidance did not have a material impact on the Company’s consolidated financial position, results of operations and financial statement disclosures. Accounting standards not yet adopted For information regarding additional accounting standards that the Company has not yet adopted, see the “Accounting Standards Not Yet Adopted” section of Note 3 of Notes to the Consolidated Financial Statements in the Company’s 2014 Form 10-K. There have been no changes other than as noted below. Disclosures about Short-Duration Contracts In May 2015, the FASB issued guidance which requires enhanced disclosure requirements for insurers relating to short-duration insurance contracts including claims and the unpaid claims liability rollforward to interim periods. For public business entities, the guidance is effective for annual reporting periods beginning after December 15, 2015 and interim periods within annual periods beginning after December 15, 2016. Early adoption is permitted. The Company is currently assessing the impact of the guidance on its consolidated financial position, results of operations and financial statement disclosures. Fair Value Measurement: Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or its Equivalent) In May 2015, the FASB issued guidance for investments measured at net asset value (“NAV”), as a practical expedient for fair value, to be excluded from the fair value hierarchy. The new guidance requires reporting entities to reconcile the fair value hierarchy disclosure to the balance sheet by disclosing the amount of investments measured using the practical expedient and to make certain disclosures about the nature and risks of those investments. If the NAV is actually at fair value, then a reporting entity would continue to include the investment in the fair value hierarchy and make all required fair value disclosures. For public business entities, the guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The new guidance is retrospective to all periods presented and early adoption is permitted. The Company is currently assessing the impact of the guidance on its consolidated financial position, results of operations and financial statement disclosures. Customer’s Accounting for Fees Paid in a Cloud Computing Agreement In April 2015, the FASB issued new guidance on a customer’s accounting for fees paid in a cloud computing arrangement (“CCA”). Under the new guidance, customers will apply the same criteria as vendors to determine whether a CCA contains a software license or is solely a service contract. The new guidance provides guidance on which existing accounting model should be applied. For public business entities, the guidance is effective for annual reporting periods, including interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. The Company is currently assessing the impact of the guidance on its consolidated financial position, results of operations and financial statement disclosures. Retirement Benefits - Practical Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Assets In April 2015, the FASB issued guidance for a practical expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Assets. For an entity with a fiscal year-end that does not coincide with a month-end, the new guidance provides for a practical expedient that permits the entity to measure defined benefit assets and obligations using the month-end that is closest to the entity’s fiscal year-end and apply that practical expedient consistently from year to year. In addition, for a significant event such as a plan amendment, settlement or curtailment, the new guidance provides for a practical expedient that permits the entity to remeasure the defined benefit plan assets and obligations using the month-end that is closest to the date of the significant event. An entity is required to disclose the accounting policy election and the date used to measure the defined benefit assets and obligations in accordance with this new guidance. For public business entities, the guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted and the new guidance should be applied prospectively. The Company is currently assessing the impact of the guidance on its consolidated financial position, results of operations and financial statement disclosures. Interest - Imputation of Interest (Simplifying the Presentation of Debt Issuance Costs) In April 2015, the FASB issued guidance that changes the presentation of debt issuance costs in financial statements. Under the new guidance, a company would present debt issuance costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. The recognition and measurement of debt issuance costs is not affected by the new guidance. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, and should be applied retrospectively to all periods presented. Early adoption is allowed for all entities for financial statements that have not been previously issued. This guidance will not have any effect on the Company’s consolidated financial position or results of operations. |
Deferred Policy Acquisition Costs | In the first quarter of 2015 , the Company unlocked its assumption for expected future interest rates. This best estimate assumption reflects current yields and expected maturities of our fixed income portfolio combined with expected reinvestment rates. The interest rates begin with prevailing rates but are assumed to revert back to the long-term yield over the mean reversion period. The unlock impacted DAC, certain additional policyholder liabilities for guaranteed benefits on variable annuity and universal life contracts and the universal life prof |
Reinsurance (Tables)
Reinsurance (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Insurance [Abstract] | |
Summary of Other Reinsurance Activity | Other reinsurance activity is shown below. Direct Business and Reinsurance in Continuing Operations: Three Months Ended Six Months Ended ($ in millions) 2015 2014 2015 2014 Direct premiums $ 115.4 $ 119.1 $ 226.4 $ 234.9 Premiums assumed (0.1 ) 0.6 1.7 2.4 Premiums ceded [1] (28.7 ) (36.5 ) (63.1 ) (74.5 ) Premiums $ 86.6 $ 83.2 $ 165.0 $ 162.8 Percentage of amount assumed to net premiums (0.1)% 0.7% 1.0% 1.5% Direct policy benefits incurred $ 206.6 $ 196.8 $ 533.9 $ 375.3 Policy benefits assumed 4.2 25.8 5.8 38.4 Policy benefits ceded (38.1 ) (64.8 ) (126.6 ) (133.5 ) Premiums paid [2] 16.0 16.0 38.6 38.3 Policy benefits [3] $ 188.7 $ 173.8 $ 451.7 $ 318.5 ——————— [1] Primarily represents premiums ceded to reinsurers related to traditional whole life and term insurance policies. [2] For universal life and variable universal life contracts, premiums paid to reinsurers are reflected within policy benefits. See Note 2 to these consolidated interim unaudited financial statements for additional information regarding significant accounting policies. [3] Policy benefit amounts above exclude changes in reserves, interest credited to policyholders and other items, which total $98.6 million and $127.5 million , net of reinsurance, for the three months ended June 30, 2015 and 2014 , respectively, and $127.6 million and $213.1 million , net of reinsurance, for the six months ended June 30, 2015 and 2014 , respectively. |
Demutualization and Closed Bl30
Demutualization and Closed Block (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Insurance [Abstract] | |
Closed Block Assets And Liabilities | Closed Block Assets and Liabilities as of: ($ in millions) June 30, December 31, 2014 Inception Available-for-sale debt securities $ 5,699.6 $ 5,877.0 $ 4,773.1 Available-for-sale equity securities 83.5 91.7 — Short-term investments 59.6 — — Limited partnerships and other investments 355.8 343.4 399.0 Policy loans 1,140.5 1,159.1 1,380.0 Fair value investments 54.1 59.8 — Total closed block investments 7,393.1 7,531.0 6,552.1 Cash and cash equivalents 70.2 89.6 — Accrued investment income 78.0 80.7 106.8 Reinsurance recoverable 23.5 19.1 — Deferred income taxes, net 288.6 290.3 389.4 Other closed block assets 50.0 67.4 41.4 Total closed block assets 7,903.4 8,078.1 7,089.7 Policy liabilities and accruals 7,950.4 8,058.2 8,301.7 Policyholder dividends payable 198.0 201.9 325.1 Policy dividend obligation 629.0 714.8 — Other closed block liabilities 60.7 48.0 12.3 Total closed block liabilities 8,838.1 9,022.9 8,639.1 Excess of closed block liabilities over closed block assets [1] 934.7 944.8 $ 1,549.4 Less: Excess of closed block assets over closed block liabilities attributable to noncontrolling interests (9.7 ) (11.8 ) Excess of closed block liabilities over closed block assets attributable to The Phoenix Companies, Inc. $ 944.4 $ 956.6 ——————— [1] The maximum future earnings summary to inure to the benefit of the stockholders is represented by the excess of closed block liabilities over closed block assets. All unrealized investment gains (losses), net of income tax, have been allocated to the policyholder dividend obligation. |
Closed Block Revenues and Expenses | Closed Block Revenues and Expenses and Changes in Policyholder Dividend Obligations: Three Months Ended Six Months Ended ($ in millions) 2015 2014 2015 2014 Closed block revenues Premiums $ 78.8 $ 75.8 $ 149.0 $ 148.6 Net investment income 95.0 93.7 195.2 201.0 Net realized gains (losses) 0.6 5.0 (4.0 ) 10.3 Total revenues 174.4 174.5 340.2 359.9 Policy benefits 108.4 122.1 223.9 225.9 Other operating expenses 1.4 0.4 1.5 0.6 Total benefits and expenses 109.8 122.5 225.4 226.5 Closed block contribution to income before dividends and income taxes 64.6 52.0 114.8 133.4 Policyholder dividends (54.9 ) (42.6 ) (95.0 ) (114.8 ) Closed block contribution to income before income taxes 9.7 9.4 19.8 18.6 Applicable income tax expense 3.4 3.3 6.9 6.5 Closed block contribution to income 6.3 6.1 12.9 12.1 Less: Closed block contribution to income attributable to noncontrolling interests 0.1 (0.1 ) 0.6 (0.2 ) Closed block contribution to income attributable to The Phoenix Companies, Inc. $ 6.2 $ 6.2 $ 12.3 $ 12.3 |
Closed Block Policyholder Dividend Obligation | Closed Block Policyholder Dividend Obligation as of: Three Months Ended Six Months Ended ($ in millions) 2015 2014 2015 2014 Policyholder dividend obligation Policyholder dividends recorded through earnings $ 54.9 $ 42.6 $ 95.0 $ 114.8 Policyholder dividends recorded through OCI (161.4 ) 77.6 (98.7 ) 159.2 Additions to (reductions of) policyholder dividend liabilities (106.5 ) 120.2 (3.7 ) 274.0 Policyholder dividends paid (43.5 ) (43.1 ) (86.0 ) (85.0 ) Increase (decrease) in policyholder dividend liabilities (150.0 ) 77.1 (89.7 ) 189.0 Policyholder dividend liabilities, beginning of period 977.0 817.4 916.7 705.5 Policyholder dividend liabilities, end of period 827.0 894.5 827.0 894.5 Policyholder dividends payable, end of period (198.0 ) (207.1 ) (198.0 ) (207.1 ) Policyholder dividend obligation, end of period $ 629.0 $ 687.4 $ 629.0 $ 687.4 |
Deferred Policy Acquisition C31
Deferred Policy Acquisition Costs (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Deferred Policy Acquisition Costs Disclosures [Abstract] | |
Schedule Of Deferred Policy Acquisition Costs | The balances of and changes in deferred policy acquisition costs (“DAC”) as of and for the periods ended June 30, 2015 and 2014 are as follows: Changes in Deferred Policy Acquisition Costs: Three Months Ended Six Months Ended ($ in millions) 2015 2014 2015 2014 Balance, beginning of period $ 836.5 $ 906.9 $ 848.6 $ 947.8 Policy acquisition costs deferred 25.5 18.6 47.3 33.2 Costs amortized to expenses: Recurring costs (21.4 ) (17.1 ) (36.5 ) (52.8 ) Assumption unlocking — — (6.6 ) — Realized investment gains (losses) (3.2 ) (2.0 ) 1.4 9.1 Offsets to net unrealized investment gains or losses included in AOCI 56.2 (24.6 ) 39.4 (55.5 ) Balance, end of period $ 893.6 $ 881.8 $ 893.6 $ 881.8 |
Sales Inducements (Tables)
Sales Inducements (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Deferred Sales Inducements [Abstract] | |
Changes in Deferred Sales Inducement Activity | The balances of and changes in sales inducements as of and for the periods ended June 30, 2015 and 2014 are as follows: Changes in Deferred Sales Inducement Activity: Three Months Ended Six Months Ended ($ in millions) 2015 2014 2015 2014 Balance, beginning of period $ 79.2 $ 76.1 $ 79.4 $ 77.4 Sales inducements deferred 4.3 5.4 9.6 7.5 Amortization charged to income (2.9 ) (2.6 ) (4.8 ) (2.8 ) Offsets to net unrealized investment gains or losses included in AOCI 7.3 (2.9 ) 3.7 (6.1 ) Balance, end of period $ 87.9 $ 76.0 $ 87.9 $ 76.0 |
Investing Activities (Tables)
Investing Activities (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Investments [Abstract] | |
Fair Value and Cost of Securities | The following tables present the debt and equity securities available-for-sale by sector held at June 30, 2015 and December 31, 2014 , respectively. The unrealized loss amounts presented below include the non-credit loss component of OTTI losses. We classify these investments into various sectors in line with industry conventions. Fair Value and Cost of Securities: June 30, 2015 ($ in millions) Amortized Cost Gross Unrealized Gains [1] Gross Unrealized Losses [1] Fair Value OTTI Recognized in AOCI [2] U.S. government and agency $ 388.1 $ 46.2 $ (0.1 ) $ 434.2 $ — State and political subdivision 541.2 32.6 (4.6 ) 569.2 (1.1 ) Foreign government 215.5 23.7 (0.8 ) 238.4 — Corporate 8,234.3 420.8 (120.2 ) 8,534.9 (6.8 ) Commercial mortgage-backed (“CMBS”) 590.3 40.8 (0.4 ) 630.7 — Residential mortgage-backed (“RMBS”) 1,574.8 62.2 (14.1 ) 1,622.9 (25.4 ) Collateralized debt obligations (“CDO”) / 260.9 1.9 (2.9 ) 259.9 (5.8 ) Other asset-backed (“ABS”) 250.9 10.8 (4.8 ) 256.9 (0.6 ) Available-for-sale debt securities $ 12,056.0 $ 639.0 $ (147.9 ) $ 12,547.1 $ (39.7 ) Amounts applicable to the closed block $ 5,369.8 $ 375.0 $ (45.2 ) $ 5,699.6 $ (9.6 ) Available-for-sale equity securities $ 147.2 $ 22.8 $ (1.7 ) $ 168.3 $ — Amounts applicable to the closed block $ 73.7 $ 11.0 $ (1.2 ) $ 83.5 $ — ——————— [1] Net unrealized investment gains and losses on securities classified as available-for-sale and certain other assets are included in our consolidated balance sheets as a component of AOCI. [2] Represents the amount of non-credit OTTI losses recognized in AOCI excluding net unrealized gains or losses subsequent to the date of impairment. The table above presents the special category of AOCI for debt securities that are other-than-temporarily impaired when the impairment loss has been split between the credit loss component (in earnings) and the non-credit component (separate category of AOCI). Fair Value and Cost of Securities: December 31, 2014 ($ in millions) Amortized Cost Gross Unrealized Gains [1] Gross Unrealized Losses [1] Fair Value OTTI Recognized in AOCI [2] U.S. government and agency $ 388.3 $ 55.2 $ (0.1 ) $ 443.4 $ — State and political subdivision 518.3 42.1 (2.5 ) 557.9 (1.1 ) Foreign government 205.8 26.5 (1.4 ) 230.9 — Corporate 7,942.7 530.0 (74.6 ) 8,398.1 (8.3 ) CMBS 602.9 48.4 (0.1 ) 651.2 (1.2 ) RMBS 1,862.5 81.6 (11.9 ) 1,932.2 (25.5 ) CDO/CLO 197.5 2.7 (3.3 ) 196.9 (13.9 ) Other ABS 260.0 13.4 (4.7 ) 268.7 (1.8 ) Available-for-sale debt securities $ 11,978.0 $ 799.9 $ (98.6 ) $ 12,679.3 $ (51.8 ) Amounts applicable to the closed block $ 5,451.3 $ 458.1 $ (32.4 ) $ 5,877.0 $ (14.7 ) Available-for-sale equity securities $ 156.0 $ 25.1 $ (1.6 ) $ 179.5 $ — Amounts applicable to the closed block $ 80.5 $ 12.3 $ (1.1 ) $ 91.7 $ — ——————— [1] Net unrealized investment gains and losses on securities classified as available-for-sale and certain other assets are included in our consolidated balance sheets as a component of AOCI. [2] Represents the amount of non-credit OTTI losses recognized in AOCI excluding net unrealized gains or losses subsequent to the date of impairment. The table above presents the special category of AOCI for debt securities that are other-than-temporarily impaired when the impairment loss has been split between the credit loss component (in earnings) and the non-credit component (separate category of AOCI). |
Maturities of Debt Securities | Maturities of Debt Securities: June 30, 2015 ($ in millions) Amortized Cost Fair Value Due in one year or less $ 198.2 $ 200.1 Due after one year through five years 1,944.0 2,053.5 Due after five years through ten years 3,483.2 3,588.0 Due after ten years 3,753.7 3,935.1 CMBS/RMBS/ABS/CDO/CLO [1] 2,676.9 2,770.4 Total $ 12,056.0 $ 12,547.1 ——————— [1] CMBS, RMBS, ABS, CDO and CLO are not listed separately in the table as each security does not have a single fixed maturity. |
Sale of Available-for-Sale Securities | The following table depicts the sources of available-for-sale investment proceeds and related investment gains (losses). Sales of Available-for-Sale Securities: ($ in millions) Six Months Ended 2015 2014 Debt securities, available-for-sale Proceeds from sales $ 476.8 $ 70.4 Proceeds from maturities/repayments 556.0 605.2 Gross investment gains from sales, prepayments and maturities 20.8 20.1 Gross investment losses from sales and maturities (1.9 ) (4.2 ) Equity securities, available-for-sale Proceeds from sales $ 14.3 $ 4.4 Gross investment gains from sales — 1.9 Gross investment losses from sales — (1.5 ) |
Aging of Temporarily Impaired Securities | Aging of Temporarily Impaired Securities: June 30, 2015 ($ in millions) Less than 12 months Greater than 12 months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Debt Securities U.S. government and agency $ 2.9 $ (0.1 ) $ 1.7 $ — $ 4.6 $ (0.1 ) State and political subdivision 81.6 (1.6 ) 26.7 (3.0 ) 108.3 (4.6 ) Foreign government 28.0 (0.8 ) — — 28.0 (0.8 ) Corporate 1,972.3 (69.4 ) 442.1 (50.8 ) 2,414.4 (120.2 ) CMBS 36.5 (0.4 ) — — 36.5 (0.4 ) RMBS 99.3 (1.4 ) 187.4 (12.7 ) 286.7 (14.1 ) CDO/CLO 94.1 (0.7 ) 88.6 (2.2 ) 182.7 (2.9 ) Other ABS 7.7 — 14.6 (4.8 ) 22.3 (4.8 ) Debt securities 2,322.4 (74.4 ) 761.1 (73.5 ) 3,083.5 (147.9 ) Equity securities 6.6 (1.0 ) 18.0 (0.7 ) 24.6 (1.7 ) Total temporarily impaired securities $ 2,329.0 $ (75.4 ) $ 779.1 $ (74.2 ) $ 3,108.1 $ (149.6 ) Amounts inside the closed block $ 728.1 $ (25.3 ) $ 303.1 $ (21.1 ) $ 1,031.2 $ (46.4 ) Amounts outside the closed block $ 1,600.9 $ (50.1 ) $ 476.0 $ (53.1 ) $ 2,076.9 $ (103.2 ) Debt Securities outside the closed block that are below investment grade $ 96.3 $ (4.4 ) $ 61.6 $ (7.9 ) $ 157.9 $ (12.3 ) Number of securities 411 159 570 Aging of Temporarily Impaired Securities: December 31, 2014 ($ in millions) Less than 12 months Greater than 12 months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Debt Securities U.S. government and agency $ — $ — $ 2.7 $ (0.1 ) $ 2.7 $ (0.1 ) State and political subdivision 11.6 (0.6 ) 31.1 (1.9 ) 42.7 (2.5 ) Foreign government 15.7 (1.4 ) — — 15.7 (1.4 ) Corporate 643.0 (23.5 ) 654.3 (51.1 ) 1,297.3 (74.6 ) CMBS 12.6 — 10.9 (0.1 ) 23.5 (0.1 ) RMBS 8.4 (0.2 ) 226.7 (11.7 ) 235.1 (11.9 ) CDO/CLO 57.9 (0.5 ) 96.3 (2.8 ) 154.2 (3.3 ) Other ABS 13.8 (0.1 ) 16.0 (4.6 ) 29.8 (4.7 ) Debt securities 763.0 (26.3 ) 1,038.0 (72.3 ) 1,801.0 (98.6 ) Equity securities 5.6 (0.7 ) 15.2 (0.9 ) 20.8 (1.6 ) Total temporarily impaired securities $ 768.6 $ (27.0 ) $ 1,053.2 $ (73.2 ) $ 1,821.8 $ (100.2 ) Amounts inside the closed block $ 266.8 $ (11.7 ) $ 387.8 $ (21.8 ) $ 654.6 $ (33.5 ) Amounts outside the closed block $ 501.8 $ (15.3 ) $ 665.4 $ (51.4 ) $ 1,167.2 $ (66.7 ) Debt Securities outside the closed block that are below investment grade $ 84.2 $ (4.1 ) $ 50.4 $ (6.6 ) $ 134.6 $ (10.7 ) Number of securities 158 211 369 |
Credit Losses Recognized in Earnings on Debt Securities for which a Portion of the OTTI Loss was Recognized in OCI | The following table presents a roll-forward of pre-tax credit losses recognized in earnings related to available-for-sale debt securities for which a portion of the OTTI was recognized in OCI. Credit Losses Recognized in Earnings on Available-for-Sale Debt Securities for which a Portion of the OTTI Loss was Recognized in OCI: Three Months Ended Six Months Ended ($ in millions) 2015 2014 2015 2014 Balance, beginning of period $ (49.2 ) $ (63.1 ) $ (52.4 ) $ (71.4 ) Add: Credit losses on securities not previously impaired [1] — — — — Add: Credit losses on securities previously impaired [1] — — — — Less: Credit losses on securities impaired due to intent to sell — — — — Less: Credit losses on securities sold 6.4 0.5 9.6 8.8 Less: Increases in cash flows expected on previously impaired securities — — — — Balance, end of period $ (42.8 ) $ (62.6 ) $ (42.8 ) $ (62.6 ) ——————— [1] Additional credit losses on securities for which a portion of the OTTI loss was recognized in AOCI are included within net OTTI losses recognized in earnings on the consolidated statements of operations and comprehensive income. |
Limited partnerships and other investments | Limited partnerships and other investments Limited Partnerships and Other Investments: ($ in millions) June 30, December 31, 2014 Limited partnerships Private equity funds $ 259.6 $ 241.1 Mezzanine funds 165.4 162.4 Infrastructure funds 32.5 38.9 Hedge funds 10.7 10.7 Mortgage and real estate funds 4.3 3.7 Leveraged leases 10.3 11.8 Direct equity investments 40.7 49.6 Life settlements 18.0 22.4 Other alternative assets 2.2 2.2 Limited partnerships and other investments $ 543.7 $ 542.8 Amounts applicable to the closed block $ 355.8 $ 343.4 |
Sources of Net Investment Income | Sources of Net Investment Income: Three Months Ended Six Months Ended ($ in millions) 2015 2014 2015 2014 Debt securities [1] $ 150.7 $ 144.0 $ 299.5 $ 287.8 Equity securities 1.7 3.0 3.6 5.1 Limited partnerships and other investments 15.7 6.3 28.9 32.8 Policy loans 41.8 41.3 83.5 82.5 Fair value investments (0.9 ) 1.5 10.2 3.6 Total investment income 209.0 196.1 425.7 411.8 Less: Discontinued operations 0.3 0.3 0.6 0.6 Less: Investment expenses 6.4 4.3 13.5 8.2 Net investment income $ 202.3 $ 191.5 $ 411.6 $ 403.0 Amounts applicable to the closed block $ 95.0 $ 93.7 $ 195.2 $ 201.0 ——————— [1] Includes net investment income on short-term investments. |
Sources and Types of Net Realized Investment Gains (Losses) | Sources and Types of Net Realized Gains (Losses): Three Months Ended Six Months Ended ($ in millions) 2015 2014 2015 2014 Total other-than-temporary debt impairments $ (0.9 ) $ — $ (1.0 ) $ 0.2 Portion of losses recognized in OCI (0.2 ) — (1.6 ) (0.2 ) Net debt impairments recognized in earnings $ (1.1 ) $ — $ (2.6 ) $ — Debt security impairments: U.S. government and agency $ — $ — $ — $ — State and political subdivision — — — — Foreign government — — — — Corporate (1.1 ) — (2.4 ) CMBS — — — — RMBS — — (0.2 ) — CDO/CLO — — — — Other ABS — — — — Net debt security impairments (1.1 ) — (2.6 ) — Equity security impairments — (1.0 ) (6.9 ) (1.2 ) Limited partnerships and other investment impairments — — — — Impairment losses (1.1 ) (1.0 ) (9.5 ) (1.2 ) Debt security transaction gains 12.3 8.7 20.8 20.3 Debt security transaction losses (1.1 ) (0.4 ) (2.0 ) (4.3 ) Equity security transaction gains — — — 1.9 Equity security transaction losses — (1.5 ) — (1.5 ) Limited partnerships and other investment transaction gains — — — — Limited partnerships and other investment transaction losses — — — — Net transaction gains (losses) 11.2 6.8 18.8 16.4 Derivative instruments (11.9 ) (0.1 ) (14.2 ) (23.9 ) Embedded derivatives [1] 4.4 (2.2 ) (5.9 ) (15.1 ) Assets valued at fair value (4.7 ) 0.7 (7.4 ) 1.1 Net realized gains (losses), excluding impairment losses (1.0 ) 5.2 (8.7 ) (21.5 ) Net realized gains (losses), including impairment losses $ (2.1 ) $ 4.2 $ (18.2 ) $ (22.7 ) ——————— [1] Includes the change in fair value of embedded derivatives associated with fixed index annuity indexed crediting feature and variable annuity riders. See Note 10 to these consolidated interim unaudited financial statements for additional disclosures. |
Sources of Changes in Net Unrealized Investment Gains (Losses) | Sources of Changes in Net Unrealized Gains (Losses): Three Months Ended Six Months Ended ($ in millions) 2015 2014 2015 2014 Debt securities $ (354.1 ) $ 163.4 $ (210.2 ) $ 329.4 Equity securities 0.1 5.3 (2.4 ) 7.5 Other investments (2.2 ) (0.1 ) (2.4 ) 0.2 Net unrealized investment gains (losses) $ (356.2 ) $ 168.6 $ (215.0 ) $ 337.1 Net unrealized investment gains (losses) $ (356.2 ) $ 168.6 $ (215.0 ) $ 337.1 Applicable to closed block policyholder dividend obligation (161.4 ) 77.6 (98.7 ) 159.2 Applicable to DAC (56.2 ) 24.6 (39.4 ) 55.5 Applicable to other actuarial offsets (83.9 ) 14.5 (25.6 ) 46.8 Applicable to deferred income tax expense (benefit) (24.4 ) 33.4 (17.4 ) 66.1 Offsets to net unrealized investment gains (losses) (325.9 ) 150.1 (181.1 ) 327.6 Net unrealized gains (losses) included in OCI $ (30.3 ) $ 18.5 $ (33.9 ) $ 9.5 |
Carrying Value of Assets and Liabilities for Consolidated Variable Interest Entities | Carrying Value of Assets and Liabilities and Maximum Exposure Loss Relating to Variable Interest Entities: June 30, 2015 December 31, 2014 ($ in millions) Assets Liabilities Maximum Exposure to Loss [ 1] Assets Liabilities Maximum Exposure to Loss [ 1] Limited partnerships $ 84.9 $ — $ 131.9 $ 106.0 $ — $ 157.8 LLCs 41.4 — 41.4 45.5 — 45.5 Total $ 126.3 $ — $ 173.3 $ 151.5 $ — $ 203.3 ——————— [1] Creditors or beneficial interest holders of the VIEs have no recourse to our general credit. Our obligation to the VIEs is limited to the amount of our committed investment. We have not provided material financial or other support that was not contractually required to these VIEs. The following table presents the total assets and total liabilities relating to consolidated VIEs at June 30, 2015 and December 31, 2014 . Carrying Value of Assets and Liabilities for Consolidated Variable Interest Entities: June 30, 2015 December 31, 2014 ($ in millions) Assets Liabilities Maximum Exposure to Loss [ 1] Assets Liabilities Maximum Exposure to Loss [ 1] Debt securities, at fair value [2] $ 14.9 $ — $ 9.9 $ 5.5 $ — $ 5.1 Equity securities, at fair value [2] 44.8 — 39.5 35.0 — 30.0 Cash and cash equivalents 6.2 — 5.7 9.4 — 9.3 Investment in partnership interests [2] 1.4 — 1.4 — — — Investment in single asset LLCs [2] 23.4 — 18.9 50.6 — 36.6 Other assets 5.4 — 4.2 0.6 — 0.5 Total assets of consolidated VIEs $ 96.1 $ — $ 79.6 $ 101.1 $ — $ 81.5 Total liabilities of consolidated VIEs $ — $ 0.6 $ 0.4 $ — $ 0.6 $ 0.5 ——————— [1] Creditors or beneficial interest holders of the consolidated VIEs have no recourse to our general credit. Our obligation to the VIEs is limited to the amount of our committed investment. We have not provided material financial or other support that was not contractually required to these VIEs. The maximum exposure to loss above at June 30, 2015 and December 31, 2014 excludes unfunded commitments of $7.7 million and $11.9 million , respectively. [2] Included in fair value investments on the consolidated balance sheets. |
Financing Activities (Tables)
Financing Activities (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The carrying value of our debt was as follows: Indebtedness at Carrying Value: ($ in millions) June 30, December 31, 2014 7.15% surplus notes, due 2034 $ 126.2 $ 126.2 7.45% senior unsecured bonds, due 2032 252.7 252.7 Total indebtedness $ 378.9 $ 378.9 |
Separate Accounts, Death Bene35
Separate Accounts, Death Benefits and Other Insurance Benefit Features and Embedded Product Derivatives (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Separate Accounts Disclosure [Abstract] | |
Separate Account Investments of Account Balances of Variable Annuity Contracts with Guarantees | Separate Account Investments of Account Balances of Variable Annuity Contracts with Insurance Guarantees: June 30, December 31, 2014 ($ in millions) Debt securities $ 346.1 $ 375.9 Equity funds 1,522.9 1,638.6 Other 46.1 49.9 Total $ 1,915.1 $ 2,064.4 |
Changes in Guaranteed Liability Balances | Changes in Additional Liability Balances: Universal Life ($ in millions) Three Months Ended Six Months Ended 2015 2014 2015 2014 Balance, beginning of period $ 387.7 $ 279.9 $ 351.5 $ 249.1 Incurred (8.3 ) 23.3 8.4 39.4 Assumption unlocking — — (6.8 ) — Change due to net unrealized gains or losses included in AOCI (28.2 ) (9.0 ) (1.9 ) 5.7 Balance, end of period $ 351.2 $ 294.2 $ 351.2 $ 294.2 Changes in Guaranteed Insurance Benefit Liability Balances: Three Months Ended Six Months Ended ($ in millions) Annuity GMDB Annuity GMIB Annuity GMDB Annuity GMIB Balance, beginning of period $ 20.7 $ 14.6 $ 21.4 $ 17.1 Incurred 0.5 0.3 (0.1 ) (2.2 ) Paid (0.9 ) (0.2 ) (1.5 ) (0.2 ) Assumption unlocking — — 0.4 — Change due to net unrealized gains or losses included in AOCI (0.2 ) — (0.1 ) — Balance, end of period $ 20.1 $ 14.7 $ 20.1 $ 14.7 Changes in Guaranteed Insurance Benefit Liability Balances: Three Months Ended Six Months Ended ($ in millions) Annuity GMDB Annuity GMIB Annuity GMDB Annuity GMIB Balance, beginning of period $ 22.1 $ 9.6 $ 22.7 $ 9.8 Incurred 0.1 (0.7 ) — (0.8 ) Paid (0.8 ) — (1.4 ) — Assumption unlocking — — — — Change due to net unrealized gains or losses included in AOCI (0.1 ) — — (0.1 ) Balance, end of period $ 21.3 $ 8.9 $ 21.3 $ 8.9 Changes in Guaranteed Liability Balances: Universal Life ($ in millions) Three Months Ended Six Months Ended 2015 2014 2015 2014 Balance, beginning of period $ 200.9 $ 178.0 $ 195.8 $ 170.6 Incurred 10.7 9.5 20.8 17.9 Paid (4.8 ) (1.3 ) (11.2 ) (3.2 ) Assumption unlocking — — — — Change due to net unrealized gains or losses included in AOCI (3.0 ) 0.9 (1.6 ) 1.8 Balance, end of period $ 203.8 $ 187.1 $ 203.8 $ 187.1 Changes in Guaranteed Liability Balances: Fixed Indexed Annuity GMWB and GMDB ($ in millions) Three Months Ended Six Months Ended 2015 2014 2015 2014 Balance, beginning of period $ 171.3 $ 104.1 $ 147.0 $ 85.4 Incurred 16.0 14.5 26.5 14.8 Paid (0.1 ) (0.1 ) (0.2 ) (0.2 ) Assumption unlocking — — — — Change due to net unrealized gains or losses included in AOCI (33.8 ) 16.7 (19.9 ) 35.2 Balance, end of period $ 153.4 $ 135.2 $ 153.4 $ 135.2 |
Variable Annuity GMDB Benefits by Type | Following are the major types of death benefits currently in force as defined in Note 11 to our consolidated financial statements in the 2014 Form 10-K: GMDB and GMIB Benefits by Type: June 30, 2015 ($ in millions) Account Value NAR before Reinsurance NAR after Reinsurance Average Attained Age of Annuitant GMDB return of premium $ 606.9 $ 1.5 $ 1.5 64 GMDB step up 1,619.3 111.4 17.6 65 GMDB earnings enhancement benefit (“EEB”) 27.2 3.2 3.2 65 GMDB greater of annual step up and roll up 21.9 5.1 5.1 69 Total GMDB at June 30, 2015 2,275.3 $ 121.2 $ 27.4 Less: General account value with GMDB 366.5 Subtotal separate account liabilities with GMDB 1,908.8 Separate account liabilities without GMDB 946.4 Total separate account liabilities $ 2,855.2 GMIB [1] at June 30, 2015 $ 292.4 66 GMDB and GMIB Benefits by Type: December 31, 2014 ($ in millions) Account Value NAR before Reinsurance NAR after Reinsurance Average Attained Age of Annuitant GMDB return of premium $ 661.5 $ 1.6 $ 1.6 63 GMDB step up 1,723.2 112.2 13.4 64 GMDB earnings enhancement benefit (“EEB”) 29.1 — — 65 GMDB greater of annual step up and roll up 22.7 4.8 4.8 69 Total GMDB at December 31, 2014 2,436.5 $ 118.6 $ 19.8 Less: General account value with GMDB 378.6 Subtotal separate account liabilities with GMDB 2,057.9 Separate account liabilities without GMDB 962.8 Total separate account liabilities $ 3,020.7 GMIB [1] at December 31, 2014 $ 319.6 65 ——————— [1] Policies with a GMIB also have a GMDB, however these benefits are not additive. When a policy terminates due to death, any NAR related to GMIB is released. Similarly, when a policy goes into benefit status on a GMIB, its GMDB NAR is released. |
Non-Insurance Guaranteed Product Features | Certain separate account variable products may contain a GMWB, guaranteed minimum accumulation benefit (“GMAB”) and/or combination (“COMBO”) rider as defined in Note 11 to our consolidated financial statements in the 2014 Form 10-K. These features are accounted for as embedded derivatives as described below. Embedded Derivatives Non-Insurance Guaranteed Product Features: June 30, 2015 ($ in millions) Account Value Average Attained Age of Annuitant GMWB $ 450.2 65 GMAB 275.5 59 COMBO 5.3 65 Balance, end of period $ 731.0 Embedded Derivatives Non-Insurance Guaranteed Product Features: December 31, 2014 ($ in millions) Account Value Average Attained Age of Annuitant GMWB $ 496.8 65 GMAB 315.6 59 COMBO 7.1 65 Balance, end of period $ 819.5 Embedded derivative liabilities for GMWB, GMAB and COMBO are shown in the table below. Embedded Derivative Liabilities: ($ in millions) June 30, December 31, 2014 GMWB $ 4.5 $ 7.3 GMAB (0.9 ) (0.3 ) COMBO (0.2 ) (0.2 ) Total variable annuity embedded derivative liabilities $ 3.4 $ 6.8 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments: Maturity Notional Fair Value as of ($ in millions) Assets Liabilities [1] Interest rate swaps 2018 - 2035 $ 239.5 $ 1.8 $ 2.9 Variance swaps 2015 - 2017 0.9 — 9.4 Put options 2015 - 2022 692.5 22.7 — Call options [2] 2015 - 2020 2,285.3 78.0 42.0 Cross currency swaps 2016 10.0 1.4 — Equity futures 2015 10.6 0.2 — Total derivative instruments $ 3,238.8 $ 104.1 $ 54.3 ——————— [1] Derivative liabilities are included in other liabilities on the consolidated balance sheets. [2] Includes a contingent receivable of $1.5 million . Derivative Instruments: Maturity Notional Fair Value as of ($ in millions) Assets Liabilities [1] Interest rate swaps 2016 - 2029 $ 114.0 $ 9.7 $ 1.9 Variance swaps 2015 - 2017 0.9 — 8.6 Swaptions 2024 - 2025 777.0 0.1 — Put options 2015 - 2022 692.5 31.1 — Call options [2] 2015 - 2019 2,019.2 119.8 74.6 Cross currency swaps 2016 10.0 0.6 — Equity futures 2015 4.1 — 0.5 Total derivative instruments $ 3,617.7 $ 161.3 $ 85.6 ——————— [1] Derivative liabilities are included in other liabilities on the consolidated balance sheets. [2] Includes a contingent receivable of $1.5 million . |
Derivative Instrument Gains (Losses) Recognized in Earnings | Derivative Instrument Gains (Losses) Recognized in Realized Investment Gains (Losses): Three Months Ended Six Months Ended ($ in millions) 2015 2014 2015 2014 Interest rate swaps $ (4.3 ) $ 1.8 $ (1.6 ) $ 6.8 Variance swaps (0.4 ) (0.4 ) (0.8 ) (1.0 ) Swaptions — (7.6 ) (0.1 ) (25.9 ) Put options (4.1 ) (4.3 ) (8.3 ) (8.5 ) Call options (2.8 ) 17.2 (4.3 ) 14.2 Cross currency swaps (0.3 ) 0.1 0.7 — Equity futures — (6.9 ) 0.2 (9.5 ) Embedded derivatives 4.4 (2.2 ) (5.9 ) (15.1 ) Total derivative instrument gains (losses) recognized in realized investment gains (losses) $ (7.5 ) $ (2.3 ) $ (20.1 ) $ (39.0 ) |
Offsetting Assets | The following tables present the gross fair value amounts, the amounts offset and net position of derivative instruments eligible for offset in the Company’s consolidated balance sheets that are subject to an enforceable master netting arrangement upon certain termination events, irrespective of whether they are offset in the balance sheet. Offsetting of June 30, 2015 ($ in millions) Gross Gross Net amounts Gross amounts not offset Net amount Financial Cash collateral Total derivative assets $ 104.1 $ — $ 104.1 $ (49.6 ) $ — $ 54.5 Total derivative liabilities $ (54.3 ) $ — $ (54.3 ) $ 49.6 $ 4.7 $ — Offsetting of December 31, 2014 ($ in millions) Gross Gross Net amounts Gross amounts not offset Net amount Financial Cash collateral Total derivative assets $ 161.3 $ — $ 161.3 $ (82.5 ) $ — $ 78.8 Total derivative liabilities $ (85.6 ) $ — $ (85.6 ) $ 82.5 $ 3.1 $ — ——————— [1] Amounts include all derivative instruments, irrespective of whether there is a legally enforceable master netting arrangement in place. [2] Cash collateral pledged with derivative counterparties is recorded within other assets on the consolidated balance sheets. The Company pledges cash collateral to offset certain individual derivative liability positions with certain counterparties. Cash collateral of $29.2 million and $15.5 million as of June 30, 2015 and December 31, 2014 , respectively, that exceeds the net liability resulting from the aggregate derivative positions with a corresponding counterparty is excluded. |
Offsetting Liabilities | Offsetting of June 30, 2015 ($ in millions) Gross Gross Net amounts Gross amounts not offset Net amount Financial Cash collateral Total derivative assets $ 104.1 $ — $ 104.1 $ (49.6 ) $ — $ 54.5 Total derivative liabilities $ (54.3 ) $ — $ (54.3 ) $ 49.6 $ 4.7 $ — Offsetting of December 31, 2014 ($ in millions) Gross Gross Net amounts Gross amounts not offset Net amount Financial Cash collateral Total derivative assets $ 161.3 $ — $ 161.3 $ (82.5 ) $ — $ 78.8 Total derivative liabilities $ (85.6 ) $ — $ (85.6 ) $ 82.5 $ 3.1 $ — ——————— [1] Amounts include all derivative instruments, irrespective of whether there is a legally enforceable master netting arrangement in place. [2] Cash collateral pledged with derivative counterparties is recorded within other assets on the consolidated balance sheets. The Company pledges cash collateral to offset certain individual derivative liability positions with certain counterparties. Cash collateral of $29.2 million and $15.5 million as of June 30, 2015 and December 31, 2014 , respectively, that exceeds the net liability resulting from the aggregate derivative positions with a corresponding counterparty is excluded. |
Fair Value of Financial Instr37
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Financial instruments carried at fair value by ASC 820-10 valuation hierarchy | The following tables present the financial instruments carried at fair value on a recurring basis by ASC 820-10 valuation hierarchy (as described above). Fair Values of Financial Instruments by Level: June 30, 2015 ($ in millions) Level 1 Level 2 Level 3 Total Assets Available-for-sale debt securities U.S. government and agency [1] $ — $ 76.6 $ 357.6 $ 434.2 State and political subdivision — 166.3 402.9 569.2 Foreign government — 205.8 32.6 238.4 Corporate — 4,263.9 4,271.0 8,534.9 CMBS — 601.0 29.7 630.7 RMBS — 1,206.4 416.5 1,622.9 CDO/CLO — — 259.9 259.9 Other ABS — 63.9 193.0 256.9 Total available-for-sale debt securities — 6,583.9 5,963.2 12,547.1 Available-for-sale equity securities — — 168.3 168.3 Short-term investments 174.6 — — 174.6 Derivative assets 0.2 103.9 — 104.1 Fair value investments [2] 26.1 8.8 179.0 213.9 Separate account assets 2,855.2 — — 2,855.2 Total assets $ 3,056.1 $ 6,696.6 $ 6,310.5 $ 16,063.2 Liabilities Derivative liabilities $ — $ 54.3 $ — $ 54.3 Embedded derivatives — — 175.7 175.7 Total liabilities $ — $ 54.3 $ 175.7 $ 230.0 ——————— [1] Level 3 includes securities whose underlying collateral is an obligation of a U.S. government entity. [2] Fair value investments at June 30, 2015 include $103.3 million of debt securities recorded at fair value. In addition, we have also elected the fair value option for equity securities backing our deferred compensation liabilities at $21.1 million as of June 30, 2015 . Changes in the fair value of these assets are recorded through net investment income. Additionally, $89.5 million of assets relate to investment holdings of consolidated VIEs held at fair value, $5.0 million of which are Level 1 securities. There were no transfers of assets between Level 1 and Level 2 during the six months ended June 30, 2015 . Fair Values of Financial Instruments by Level: December 31, 2014 ($ in millions) Level 1 Level 2 Level 3 Total Assets Available-for-sale debt securities U.S. government and agency [1] $ — $ 81.2 $ 362.2 $ 443.4 State and political subdivision — 157.7 400.2 557.9 Foreign government — 177.3 53.6 230.9 Corporate — 3,994.2 4,403.9 8,398.1 CMBS — 498.4 152.8 651.2 RMBS — 1,461.9 470.3 1,932.2 CDO/CLO — — 196.9 196.9 Other ABS — 23.6 245.1 268.7 Total available-for-sale debt securities — 6,394.3 6,285.0 12,679.3 Available-for-sale equity securities — — 179.5 179.5 Short-term investments 149.7 — — 149.7 Derivative assets — 161.3 — 161.3 Fair value investments [2] 32.4 13.0 190.0 235.4 Separate account assets 3,020.7 — — 3,020.7 Total assets $ 3,202.8 $ 6,568.6 $ 6,654.5 $ 16,425.9 Liabilities Derivative liabilities $ 0.5 $ 85.1 $ — $ 85.6 Embedded derivatives — — 160.7 160.7 Total liabilities $ 0.5 $ 85.1 $ 160.7 $ 246.3 ——————— [1] Level 3 includes securities whose underlying collateral is an obligation of a U.S. government entity. [2] Fair value investments at December 31, 2014 include $111.9 million of debt securities recorded at fair value. In addition, we have also elected the fair value option for equity securities backing our deferred compensation liabilities at $23.5 million as of December 31, 2014 . Changes in the fair value of these assets are recorded through net investment income. Additionally, $100.0 million of assets relate to investment holdings of consolidated VIEs held at fair value, $8.8 million of which are Level 1 securities. |
Corporates fair value on a recurring basis | The following tables present corporates carried at fair value and on a recurring basis by sector. Fair Values of Corporates by Level and Sector: June 30, 2015 ($ in millions) Level 1 Level 2 Level 3 Total Corporates Consumer $ — $ 625.5 $ 1,204.8 $ 1,830.3 Energy — 615.5 432.3 1,047.8 Financial services — 1,716.0 910.4 2,626.4 Capital goods — 420.2 357.4 777.6 Transportation — 114.4 304.3 418.7 Utilities — 355.3 719.6 1,074.9 Other — 417.0 342.2 759.2 Total corporates $ — $ 4,263.9 $ 4,271.0 $ 8,534.9 Fair Values of Corporates by Level and Sector: December 31, 2014 ($ in millions) Level 1 Level 2 Level 3 Total Corporates Consumer $ — $ 593.0 $ 1,266.6 $ 1,859.6 Energy — 534.6 472.8 1,007.4 Financial services — 1,617.3 967.9 2,585.2 Capital goods — 398.1 384.8 782.9 Transportation — 104.7 305.8 410.5 Utilities — 348.1 683.4 1,031.5 Other — 398.4 322.6 721.0 Total corporates $ — $ 3,994.2 $ 4,403.9 $ 8,398.1 |
Fair Value Assets Measured on a Recurring Basis, Unobservable Input Reconciliation | The following tables set forth a summary of changes in the fair value of our Level 3 financial assets and liabilities. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Transfers in and out of Level 3 occur at the beginning of each period. The securities which were transferred into Level 3 were due to decreased market observability of similar assets and/or changes to significant inputs, such as downgrades or price declines. Transfers out of Level 3 were due to increased market activity on comparable assets or observability of inputs. Level 3 Financial Assets: Three Months Ended June 30, 2015 ($ in millions) Balance, beginning of period Purchases Sales Transfers into Level 3 Transfers out of Level 3 Realized and unrealized gains (losses) included in income [1] Unrealized gains (losses) included in OCI Total Assets Available-for-sale debt securities U.S. government and agency [2] $ 366.4 $ — $ (4.3 ) $ — $ — $ — $ (4.5 ) $ 357.6 State and political subdivision 405.4 15.3 (3.4 ) — — — (14.4 ) 402.9 Foreign government 32.4 1.0 (1.0 ) — — — 0.2 32.6 Corporate 4,354.1 196.3 (161.9 ) 59.0 (40.1 ) (3.1 ) (133.3 ) 4,271.0 CMBS 35.2 10.3 (5.2 ) — (10.1 ) (0.1 ) (0.4 ) 29.7 RMBS 481.6 0.2 (32.3 ) — (29.7 ) — (3.3 ) 416.5 CDO/CLO 205.5 71.3 (16.0 ) — — 1.2 (2.1 ) 259.9 Other ABS 208.9 4.5 (14.1 ) — (3.3 ) 0.2 (3.2 ) 193.0 Total available-for-sale debt securities 6,089.5 298.9 (238.2 ) 59.0 (83.2 ) (1.8 ) (161.0 ) 5,963.2 Available-for-sale equity securities 175.5 13.8 (18.0 ) — — (6.9 ) 3.9 168.3 Short-term investments — — — — — — — — Fair value investments 204.9 — (6.6 ) — — (19.3 ) — 179.0 Total assets $ 6,469.9 $ 312.7 $ (262.8 ) $ 59.0 $ (83.2 ) $ (28.0 ) $ (157.1 ) $ 6,310.5 ——————— [1] Reflected in realized investment gains and losses for all assets except fair value investments which are included in net investment income. [2] Includes securities whose underlying collateral is an obligation of a U.S. government entity. Level 3 Financial Assets: Three Months Ended June 30, 2014 ($ in millions) Balance, beginning of period Purchases Sales Transfers into Level 3 Transfers out of Level 3 Realized Unrealized gains (losses) included in OCI Total Assets Available-for-sale debt securities U.S. government and agency [2] $ 340.4 $ — $ (23.1 ) $ — $ — $ — $ 56.1 $ 373.4 State and political subdivision 276.8 6.6 (2.7 ) — — — 4.7 285.4 Foreign government 16.1 — — — — — 0.4 16.5 Corporate 3,940.3 70.5 (137.0 ) 25.6 (4.6 ) 2.5 (25.8 ) 3,871.5 CMBS 52.1 — (20.8 ) — (0.2 ) — 0.5 31.6 RMBS 535.2 0.7 (19.3 ) — (4.5 ) (0.3 ) (0.5 ) 511.3 CDO/CLO 236.1 22.0 (20.8 ) — — 0.1 1.6 239.0 Other ABS 229.4 — (8.9 ) — — 1.2 1.5 223.2 Total available-for-sale 5,626.4 99.8 (232.6 ) 25.6 (9.3 ) 3.5 38.5 5,551.9 Available-for-sale equity securities 63.0 6.0 — — — (0.5 ) 79.6 148.1 Short-term investments — — — — — — — — Fair value investments 170.3 — (11.5 ) — — 3.6 — 162.4 Total assets $ 5,859.7 $ 105.8 $ (244.1 ) $ 25.6 $ (9.3 ) $ 6.6 $ 118.1 $ 5,862.4 ——————— [1] Reflected in realized investment gains and losses for all assets except fair value investments which are included in net investment income. [2] Includes securities whose underlying collateral is an obligation of a U.S. government entity. Level 3 Financial Assets: Six Months Ended June 30, 2015 ($ in millions) Balance, beginning of period Purchases Sales Transfers into Level 3 Transfers out of Level 3 Realized Unrealized gains (losses) included in OCI Total Assets Available-for-sale debt securities U.S. government and agency [2] $ 362.2 $ 9.9 $ (6.4 ) $ — $ — $ — $ (8.1 ) $ 357.6 State and political subdivision 400.2 28.9 (5.6 ) — (14.0 ) — (6.6 ) 402.9 Foreign government 53.6 — — 4.2 (26.7 ) — 1.5 32.6 Corporate 4,403.9 362.0 (221.8 ) 74.5 (302.1 ) (1.0 ) (44.5 ) 4,271.0 CMBS 152.8 10.3 (5.3 ) 8.5 (132.5 ) (0.1 ) (4.0 ) 29.7 RMBS 470.3 0.6 (49.9 ) — — (0.2 ) (4.3 ) 416.5 CDO/CLO 196.9 90.4 (29.0 ) — — 1.7 (0.1 ) 259.9 Other ABS 245.1 4.5 (21.1 ) — (31.9 ) (0.2 ) (3.4 ) 193.0 Total available-for-sale 6,285.0 506.6 (339.1 ) 87.2 (507.2 ) 0.2 (69.5 ) 5,963.2 Available-for-sale equity securities 179.5 10.6 (14.2 ) — — (6.2 ) (1.4 ) 168.3 Short-term investments — — — — — — — — Fair value investments 190.0 0.4 (8.4 ) — — (3.0 ) — 179.0 Total assets $ 6,654.5 $ 517.6 $ (361.7 ) $ 87.2 $ (507.2 ) $ (9.0 ) $ (70.9 ) $ 6,310.5 ——————— [1] Reflected in realized investment gains and losses for all assets except fair value investments which are included in net investment income. [2] Includes securities whose underlying collateral is an obligation of a U.S. government entity. Level 3 Financial Assets: Six Months Ended June 30, 2014 ($ in millions) Balance, beginning of period Purchases Sales Transfers into Level 3 Transfers out of Level 3 Realized Unrealized gains (losses) included in OCI Total Assets Available-for-sale debt securities U.S. government and agency [2] $ 327.2 $ 62.8 $ (28.3 ) $ — $ — $ — $ 11.7 $ 373.4 State and political subdivision 269.1 9.5 (3.3 ) — — — 10.1 285.4 Foreign government 15.9 — — — — — 0.6 16.5 Corporate 3,893.8 235.8 (218.4 ) 15.8 (131.4 ) 4.3 71.6 3,871.5 CMBS 113.7 — (21.8 ) — (60.3 ) (0.1 ) 0.1 31.6 RMBS 552.7 1.3 (37.2 ) — (4.3 ) 1.6 (2.8 ) 511.3 CDO/CLO 224.1 39.9 (33.8 ) — — 1.8 7.0 239.0 Other ABS 247.7 — (21.7 ) — (1.7 ) 1.8 (2.9 ) 223.2 Total available-for-sale 5,644.2 349.3 (364.5 ) 15.8 (197.7 ) 9.4 95.4 5,551.9 Available-for-sale equity securities 135.2 12.8 (1.4 ) — — — 1.5 148.1 Short-term investments 0.9 — — — — — (0.9 ) — Fair value investments 169.9 — (3.8 ) — — (3.7 ) — 162.4 Total assets $ 5,950.2 $ 362.1 $ (369.7 ) $ 15.8 $ (197.7 ) $ 5.7 $ 96.0 $ 5,862.4 ——————— [1] Reflected in realized investment gains and losses for all assets except fair value investments which are included in net investment income. [2] Includes securities whose underlying collateral is an obligation of a U.S. government entity. |
Embedded Derivative Liabilities | Level 3 Financial Liabilities: Embedded Derivative Liabilities ($ in millions) Three Months Ended Six Months Ended 2015 2014 2015 2014 Balance, beginning of period $ 175.6 $ 109.0 $ 160.7 $ 87.8 Net purchases / settlements 4.5 6.9 9.1 15.2 Transfers into Level 3 — — — — Transfers out of Level 3 — — — — Realized (gains) losses (4.4 ) 2.2 5.9 15.1 Balance, end of period $ 175.7 $ 118.1 $ 175.7 $ 118.1 |
Fair Value Inputs, Assets, Quantitative Information | Level 3 Assets and Liabilities by Pricing Source: June 30, 2015 ($ in millions) Internal [1] External [2] Total Assets Available-for-sale debt securities U.S. government and agency [3] $ 357.6 $ — $ 357.6 State and political subdivision 212.4 190.5 402.9 Foreign government — 32.6 32.6 Corporate 3,238.1 1,032.9 4,271.0 CMBS — 29.7 29.7 RMBS — 416.5 416.5 CDO/CLO — 259.9 259.9 Other ABS 36.6 156.4 193.0 Total available-for-sale debt securities 3,844.7 2,118.5 5,963.2 Available-for-sale equity securities — 168.3 168.3 Fair value investments 6.5 172.5 179.0 Total assets $ 3,851.2 $ 2,459.3 $ 6,310.5 Liabilities Embedded derivatives $ 175.7 $ — $ 175.7 Total liabilities $ 175.7 $ — $ 175.7 ——————— [1] Represents valuations reflecting both internally-derived and market inputs, as well as third-party information or quotes. [2] Represents unadjusted prices from independent pricing services, third-party financial statements and independent indicative broker quotes where pricing inputs are not readily available. [3] Includes securities whose underlying collateral is an obligation of a U.S. government entity. Level 3 Assets and Liabilities by Pricing Source: December 31, 2014 ($ in millions) Internal [1] External [2] Total Assets Available-for-sale debt securities U.S. government and agency [3] $ 362.2 $ — $ 362.2 State and political subdivision 159.1 241.1 400.2 Foreign government — 53.6 53.6 Corporate 3,116.6 1,287.3 4,403.9 CMBS — 152.8 152.8 RMBS — 470.3 470.3 CDO/CLO — 196.9 196.9 Other ABS 39.3 205.8 245.1 Total available-for-sale debt securities 3,677.2 2,607.8 6,285.0 Available-for-sale equity securities — 179.5 179.5 Fair value investments 6.3 183.7 190.0 Total assets $ 3,683.5 $ 2,971.0 $ 6,654.5 Liabilities Embedded derivatives $ 160.7 $ — $ 160.7 Total liabilities $ 160.7 $ — $ 160.7 ——————— [1] Represents valuations reflecting both internally-derived and market inputs, as well as third-party information or quotes. [2] Represents unadjusted prices from independent pricing services, third-party financial statements and independent indicative broker quotes where pricing inputs are not readily available. [3] Includes securities whose underlying collateral is an obligation of a U.S. government entity. The following tables present quantitative estimates about unobservable inputs used in the fair value measurement of significant categories of internally priced assets. Level 3 Assets: [1] June 30, 2015 ($ in millions) Fair Value Valuation Technique(s) Unobservable Input Range (Weighted Average) U.S. government and agency $ 357.6 Discounted cash flow Yield 0.92% - 4.65% (3.33%) State and political subdivision $ 212.4 Discounted cash flow Yield 1.98% - 4.75% (3.42%) Corporate $ 3,238.1 Discounted cash flow Yield 0.92% - 7.31% (3.37%) Other ABS $ 36.6 Discounted cash flow Yield 0.50% - 3.05% (1.76%) Fair value investments $ 6.5 Discounted cash flow Default rate 0.16% Recovery rate 44.00% ——————— [1] Excludes Level 3 assets which are valued based upon non-binding independent third-party valuations or third-party price information for which unobservable inputs are not reasonably available to us. Level 3 Assets: [1] December 31, 2014 ($ in millions) Fair Value Valuation Technique(s) Unobservable Input Range (Weighted Average) U.S. government and agency $ 362.2 Discounted cash flow Yield 0.99% - 4.27% (3.17%) State and political subdivision $ 159.1 Discounted cash flow Yield 2.15% - 4.50% (3.22%) Corporate $ 3,116.6 Discounted cash flow Yield 0.93% - 6.88% (3.24%) Other ABS $ 39.3 Discounted cash flow Yield 0.60% - 4.00% (1.92%) Fair value investments $ 6.3 Discounted cash flow Default rate 0.17% Recovery rate 44.00% ——————— [1] Excludes Level 3 assets which are valued based upon non-binding independent third-party valuations or third-party price information for which unobservable inputs are not reasonably available to us. |
Fair Value Inputs, Liabilities, Quantitative Information | Level 3 Assets and Liabilities by Pricing Source: June 30, 2015 ($ in millions) Internal [1] External [2] Total Assets Available-for-sale debt securities U.S. government and agency [3] $ 357.6 $ — $ 357.6 State and political subdivision 212.4 190.5 402.9 Foreign government — 32.6 32.6 Corporate 3,238.1 1,032.9 4,271.0 CMBS — 29.7 29.7 RMBS — 416.5 416.5 CDO/CLO — 259.9 259.9 Other ABS 36.6 156.4 193.0 Total available-for-sale debt securities 3,844.7 2,118.5 5,963.2 Available-for-sale equity securities — 168.3 168.3 Fair value investments 6.5 172.5 179.0 Total assets $ 3,851.2 $ 2,459.3 $ 6,310.5 Liabilities Embedded derivatives $ 175.7 $ — $ 175.7 Total liabilities $ 175.7 $ — $ 175.7 ——————— [1] Represents valuations reflecting both internally-derived and market inputs, as well as third-party information or quotes. [2] Represents unadjusted prices from independent pricing services, third-party financial statements and independent indicative broker quotes where pricing inputs are not readily available. [3] Includes securities whose underlying collateral is an obligation of a U.S. government entity. Level 3 Assets and Liabilities by Pricing Source: December 31, 2014 ($ in millions) Internal [1] External [2] Total Assets Available-for-sale debt securities U.S. government and agency [3] $ 362.2 $ — $ 362.2 State and political subdivision 159.1 241.1 400.2 Foreign government — 53.6 53.6 Corporate 3,116.6 1,287.3 4,403.9 CMBS — 152.8 152.8 RMBS — 470.3 470.3 CDO/CLO — 196.9 196.9 Other ABS 39.3 205.8 245.1 Total available-for-sale debt securities 3,677.2 2,607.8 6,285.0 Available-for-sale equity securities — 179.5 179.5 Fair value investments 6.3 183.7 190.0 Total assets $ 3,683.5 $ 2,971.0 $ 6,654.5 Liabilities Embedded derivatives $ 160.7 $ — $ 160.7 Total liabilities $ 160.7 $ — $ 160.7 ——————— [1] Represents valuations reflecting both internally-derived and market inputs, as well as third-party information or quotes. [2] Represents unadjusted prices from independent pricing services, third-party financial statements and independent indicative broker quotes where pricing inputs are not readily available. [3] Includes securities whose underlying collateral is an obligation of a U.S. government entity. The following tables present quantitative estimates about unobservable inputs used in the fair value measurement of internally priced liabilities. Level 3 Liabilities: June 30, 2015 ($ in millions) Fair Value Valuation Technique(s) Unobservable Input Range Embedded derivatives (FIA) $ 172.3 Budget method Swap curve 0.31% - 2.80% Mortality rate 105% or 97 % 2012 IAM basic table Lapse rate 0.04% - 46.44% CSA 3.32% Embedded derivatives (GMAB / GMWB / COMBO) $ 3.4 Risk neutral stochastic Volatility surface 8.16% - 61.32% Swap curve 0.25% - 3.02% Mortality rate 105% 2012 IAM basic table Lapse rate 0.00% - 40.00% CSA 3.32% Level 3 Liabilities: December 31, 2014 ($ in millions) Fair Value Valuation Technique(s) Unobservable Input Range Embedded derivatives (FIA) $ 153.9 Budget method Swap curve 0.24% - 2.55% Mortality rate 105% or 97% 2012 IAM basic table Lapse rate 0.04% - 46.44% CSA 3.08% Embedded derivatives (GMAB / GMWB / COMBO) $ 6.8 Risk neutral stochastic Volatility surface 9.89% - 67.34% Swap curve 0.21% - 2.76% Mortality rate 105% 2012 IAM basic table Lapse rate 0.00% - 40.00% CSA 3.08% |
Company's financial instruments where the carrying amounts and fair values differ: | The Company is required by U.S. GAAP to disclose the fair value of certain financial instruments including those that are not carried at fair value. The following table discloses the Company’s financial instruments where the carrying amounts and fair values differ: Carrying Amounts and Fair Values Fair Value June 30, 2015 December 31, 2014 ($ in millions) Carrying Fair Carrying Fair Financial assets: Policy loans Level 3 $ 2,360.7 $ 2,347.4 $ 2,352.1 $ 2,339.2 Life settlements Level 3 $ 18.0 $ 18.0 $ 22.4 $ 17.4 Financial liabilities: Investment contracts Level 3 $ 4,220.8 $ 4,222.2 $ 3,955.0 $ 3,957.3 7.15 % Surplus notes Level 3 $ 126.2 $ 91.2 $ 126.2 $ 95.8 7.45% Senior unsecured bonds Level 2 $ 252.7 $ 205.6 $ 252.7 $ 248.0 |
Accumulated Other Comprehensi38
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Changes in each component of AOCI attributable to the Company for the periods ended June 30, 2015 and 2014 are as follows below (net of tax): Accumulated Other Comprehensive Income (Loss) Attributable to The Phoenix Companies, Inc.: ($ in millions) Net Unrealized Gains / (Losses) on Investments where Credit-related OTTI was Recognized [1] Net Unrealized Gains / (Losses) on All Other Investments [1] Net Pension Liability Adjustments Total Balance as of March 31, 2015 $ 8.2 $ 52.9 $ (297.7 ) $ (236.6 ) Change in component during the period before reclassifications (1.7 ) (22.1 ) 0.1 (23.7 ) Amounts reclassified from AOCI (0.3 ) (6.2 ) 1.6 (4.9 ) Balance as of June 30, 2015 $ 6.2 $ 24.6 $ (296.0 ) $ (265.2 ) Balance as of March 31, 2014 $ 10.2 $ 14.7 $ (217.2 ) $ (192.3 ) Change in component during the period before reclassifications 3.1 19.2 0.7 23.0 Amounts reclassified from AOCI 0.4 (4.2 ) 1.0 (2.8 ) Balance as of June 30, 2014 $ 13.7 $ 29.7 $ (215.5 ) $ (172.1 ) Balance as of December 31, 2014 $ 9.9 $ 54.8 $ (299.1 ) $ (234.4 ) Change in component during the period before reclassifications (2.2 ) (25.7 ) 0.1 (27.8 ) Amounts reclassified from AOCI (1.5 ) (4.5 ) 3.0 (3.0 ) Balance as of June 30, 2015 $ 6.2 $ 24.6 $ (296.0 ) $ (265.2 ) Balance as of December 31, 2013 $ 7.0 $ 26.9 $ (218.9 ) $ (185.0 ) Change in component during the period before reclassifications 9.3 10.2 1.4 20.9 Amounts reclassified from AOCI (2.6 ) (7.4 ) 2.0 (8.0 ) Balance as of June 30, 2014 $ 13.7 $ 29.7 $ (215.5 ) $ (172.1 ) ——————— [1] See Note 7 to these consolidated interim unaudited financial statements for additional information regarding offsets to net unrealized investment gains and losses which include policyholder dividend obligation, DAC and other actuarial offsets, and deferred income tax expense (benefit). |
Reclassification out of Accumulated Other Comprehensive Income | Reclassifications from AOCI consist of the following: AOCI Amounts Reclassified from AOCI Affected Line Item in the Consolidated Statements of Operations and Comprehensive Income ($ in millions) Three Months Ended Six Months Ended 2015 2014 2015 2014 Net unrealized gains / (losses) on investments where credit-related OTTI was recognized: Available-for-sale securities $ 0.5 $ (0.6 ) $ 2.4 $ 4.0 Net realized capital gains (losses) 0.5 (0.6 ) 2.4 4.0 Total before income taxes 0.2 (0.2 ) 0.9 1.4 Income tax expense (benefit) $ 0.3 $ (0.4 ) $ 1.5 $ 2.6 Net income (loss) Net unrealized gains / (losses) on all other investments: Available-for-sale securities $ 9.6 $ 6.4 $ 6.9 $ 11.2 Net realized capital gains (losses) 9.6 6.4 6.9 11.2 Total before income taxes 3.4 2.2 2.4 3.8 Income tax expense (benefit) $ 6.2 $ 4.2 $ 4.5 $ 7.4 Net income (loss) Net pension liability adjustments: Amortization of actuarial gains (losses) $ (2.7 ) $ (1.9 ) $ (5.1 ) $ (3.8 ) Other operating expense Amortization of prior service costs 0.3 0.3 0.6 0.6 Other operating expense (2.4 ) (1.6 ) (4.5 ) (3.2 ) Total before income taxes (0.8 ) (0.6 ) (1.5 ) (1.2 ) Income tax expense (benefit) $ (1.6 ) $ (1.0 ) $ (3.0 ) $ (2.0 ) Net income (loss) Total amounts reclassified from AOCI $ 4.9 $ 2.8 $ 3.0 $ 8.0 Net income (loss) |
Employee Benefit Plans and Em39
Employee Benefit Plans and Employment Agreements (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Components of Pension Benefit Costs | Components of Other Post-Employment Benefit Costs: Three Months Ended Six Months Ended ($ in millions) 2015 2014 2015 2014 Service cost $ — $ — $ — $ — Interest cost 0.3 0.4 0.7 0.8 Net gain amortization — (0.1 ) (0.1 ) (0.2 ) Prior service cost amortization (0.3 ) (0.3 ) (0.6 ) (0.6 ) Other post-employment benefit cost $ — $ — $ — $ — The components of pension and post-employment benefit costs follow: Components of Pension Benefit Costs: Three Months Ended Six Months Ended ($ in millions) 2015 2014 2015 2014 Service cost $ 0.8 $ 0.6 $ 1.6 $ 1.2 Interest cost 8.6 9.1 17.2 18.2 Expected return on plan assets (9.8 ) (9.5 ) (19.8 ) (19.0 ) Net loss amortization 2.7 2.0 5.2 4.0 Pension benefit cost $ 2.3 $ 2.2 $ 4.2 $ 4.4 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Shares Used in Calculation of Basic and Diluted | The following table presents a reconciliation of shares used in calculating basic earnings (loss) per common share to those used in calculating diluted earnings (loss) per common share. Shares Used in Calculation of Earnings Per Share: Three Months Ended Six Months Ended (shares in thousands) 2015 2014 2015 2014 Weighted-average common shares outstanding 5,751 5,749 5,751 5,745 Weighted-average effect of dilutive potential common shares: Restricted stock units 24 3 12 10 Employee stock options — 2 — 2 Potential common shares 24 5 12 12 Less: Potential common shares excluded from calculation due to net losses 24 5 12 12 Dilutive potential common shares — — — — Weighted-average common shares outstanding, including dilutive potential common shares 5,751 5,749 5,751 5,745 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment Information on Revenues | Segment Information on Revenues: Three Months Ended Six Months Ended ($ in millions) 2015 2014 2015 2014 Life and Annuity $ 414.7 $ 406.5 $ 814.5 $ 800.8 Saybrus Partners [1] 11.1 9.6 20.1 16.9 Less: Intercompany revenues [2] 3.8 3.0 7.2 5.6 Total revenues $ 422.0 $ 413.1 $ 827.4 $ 812.1 ——————— [1] Includes intercompany commission revenue of $3.8 million and $3.0 million for the three months ended June 30, 2015 and 2014 , respectively, and $7.2 million and $5.7 million for the six months ended June 30, 2015 and 2014 , respectively. [2] All intercompany balances are eliminated in consolidating the financial statements. |
Results of Operations by Segment as Reconciled to Consolidated Net Income | Results of Operations by Segment as Reconciled to Consolidated Net Income (Loss): Three Months Ended Six Months Ended ($ in millions) 2015 2014 2015 2014 Life and Annuity operating income (loss) $ (35.4 ) $ (47.5 ) $ (94.8 ) $ (53.3 ) Saybrus Partners operating income (loss) 2.7 1.9 3.5 2.2 Less: Applicable income tax expense (benefit) (13.0 ) (19.6 ) (15.2 ) (24.4 ) Income (loss) from discontinued operations, net of income taxes (0.6 ) (0.6 ) (1.1 ) (1.2 ) Net realized gains (losses) (2.1 ) 4.2 (18.2 ) (22.7 ) Less: Net income (loss) attributable to noncontrolling interests 0.2 — 1.2 (0.1 ) Net income (loss) $ (22.6 ) $ (22.4 ) $ (96.6 ) $ (50.5 ) |
Organization and Description 42
Organization and Description of Business (Details) | 6 Months Ended |
Jun. 30, 2015segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of business segments | 2 |
Basis of Presentation and Sig43
Basis of Presentation and Significant Accounting Policies (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Accounting Policies [Abstract] | |||||
Deferred policy acquisition cost, amortization expense, assumption change | $ 0 | $ 0.2 | $ 0 | $ 6.6 | $ 0 |
Basis of Presentation and Sig44
Basis of Presentation and Significant Accounting Policies - Holding Company Liquidity (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2015 | Oct. 31, 2014 | |
Statutory Accounting Practices [Line Items] | ||||||
Restricted cash and cash equivalents | $ 10.8 | |||||
Interest paid | $ 13.9 | $ 13.9 | ||||
Indebtedness | 378.9 | 378.9 | ||||
Capital contributions to subsidiaries | 15 | $ 45 | ||||
Phoenix Life Insurance Company | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Anticipated dividends paid in next fiscal year | 59.9 | |||||
Dividends | 30 | |||||
Parent Company | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Liquid assets | 64.5 | 78.3 | ||||
Restricted cash and cash equivalents | 10.8 | |||||
Amount of funds in intercompany tax escrow | 78.9 | $ 78.9 | ||||
Increase in restricted cash | $ 10.8 | $ 10.8 | ||||
Operating expenses | $ 17.4 | 63.4 | ||||
PHL Variable Insurance Company | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Statutory Accounting Practices, Authorized Control Level | 450.00% | |||||
Risk based capital, percent | 201.00% | 218.00% | 122.00% | |||
Statutory capital surplus, guaranteed risk based capital, percent | 250.00% | |||||
Statutory capital surplus, guaranteed risk based capital, company action level, percent | 125.00% | |||||
Corporate | 7.45% Senior Unsecured Bonds | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Interest paid | $ 10 | $ 10 | ||||
Indebtedness | $ 268.6 | |||||
Minimum | PHL Variable Insurance Company | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Risk-based capital threshold | 225.00% |
Reinsurance Narrative (Details)
Reinsurance Narrative (Details) $ in Millions | 6 Months Ended | |
Jun. 30, 2015USD ($)reinsurance_company | Dec. 31, 2014USD ($) | |
Insurance [Abstract] | ||
Reinsurance recoverable | $ 550 | $ 559.1 |
Reinsurance Recoverable | ||
Concentration Risk [Line Items] | ||
Number of major reinsurance companies | reinsurance_company | 5 | |
Percentage of reinsurance recoverable account by five major reinsurance companies | 67.00% |
Reinsurance (Details)
Reinsurance (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Insurance [Abstract] | ||||
Direct premiums | $ 115.4 | $ 119.1 | $ 226.4 | $ 234.9 |
Premiums assumed | (0.1) | 0.6 | 1.7 | 2.4 |
Premiums ceded to reinsurers | (28.7) | (36.5) | (63.1) | (74.5) |
Premiums | $ 86.6 | $ 83.2 | $ 165 | $ 162.8 |
Percentage of amount assumed to net premiums | (0.10%) | 0.70% | 1.00% | 1.50% |
Direct policy benefits incurred | $ 206.6 | $ 196.8 | $ 533.9 | $ 375.3 |
Policy benefits assumed | 4.2 | 25.8 | 5.8 | 38.4 |
Policy benefits ceded | (38.1) | (64.8) | (126.6) | (133.5) |
Premiums paid | 16 | 16 | 38.6 | 38.3 |
Policy benefits | 188.7 | 173.8 | 451.7 | 318.5 |
Policyholder benefits and claims incurred, life and annuity, changes in reserves, interest credited, and other adjustments | $ 98.6 | $ 127.5 | $ 127.6 | $ 213.1 |
Demutualization and Closed Bl47
Demutualization and Closed Block Closed Block Assets and Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Jun. 25, 2011 |
Closed Block Assets And Liabilities | ||||
Available-for-sale debt securities | $ 5,699.6 | $ 5,877 | $ 4,773.1 | |
Available-for-sale equity securities | 83.5 | 91.7 | 0 | |
Short-term investments | 59.6 | 0 | 0 | |
Limited partnerships and other investments | 355.8 | 343.4 | 399 | |
Policy loans | 1,140.5 | 1,159.1 | 1,380 | |
Fair value investments | 54.1 | 59.8 | 0 | |
Total closed block investments | 7,393.1 | 7,531 | 6,552.1 | |
Cash and cash equivalents | 70.2 | 89.6 | 0 | |
Accrued investment income | 78 | 80.7 | 106.8 | |
Reinsurance recoverable | 23.5 | 19.1 | 0 | |
Deferred income taxes, net | 288.6 | 290.3 | 389.4 | |
Other closed block assets | 50 | 67.4 | 41.4 | |
Total closed block assets | 7,903.4 | 8,078.1 | 7,089.7 | |
Policy liabilities and accruals | 7,950.4 | 8,058.2 | 8,301.7 | |
Policyholder dividends payable | 198 | 201.9 | $ 207.1 | 325.1 |
Policy dividend obligation | 629 | 714.8 | $ 687.4 | 0 |
Other closed block liabilities | 60.7 | 48 | 12.3 | |
Total closed block liabilities | 8,838.1 | 9,022.9 | 8,639.1 | |
Excess of closed block liabilities over closed block assets | 934.7 | 944.8 | $ 1,549.4 | |
Less: Excess of closed block assets over closed block liabilities attributable to noncontrolling interests | (9.7) | (11.8) | ||
Excess of closed block liabilities over closed block assets attributable to The Phoenix Companies, Inc. | $ 944.4 | $ 956.6 |
Demutualization and Closed Bl48
Demutualization and Closed Block Closed Block Revenue and Expenses (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Closed block revenues | ||||
Premiums | $ 78.8 | $ 75.8 | $ 149 | $ 148.6 |
Net investment income | 95 | 93.7 | 195.2 | 201 |
Net realized gains (losses) | 0.6 | 5 | (4) | 10.3 |
Total revenues | 174.4 | 174.5 | 340.2 | 359.9 |
Policy benefits | 108.4 | 122.1 | 223.9 | 225.9 |
Other operating expenses | 1.4 | 0.4 | 1.5 | 0.6 |
Total benefits and expenses | 109.8 | 122.5 | 225.4 | 226.5 |
Closed block contribution to income before dividends and income taxes | 64.6 | 52 | 114.8 | 133.4 |
Policyholder dividends | (54.9) | (42.6) | (95) | (114.8) |
Closed block contribution to income before income taxes | 9.7 | 9.4 | 19.8 | 18.6 |
Applicable income tax expense | 3.4 | 3.3 | 6.9 | 6.5 |
Closed block contribution to income attributable to The Phoenix Companies, Inc. | 6.3 | 6.1 | 12.9 | 12.1 |
Less: Closed block contribution to income attributable to noncontrolling interests | 0.1 | (0.1) | 0.6 | (0.2) |
Closed block contribution to income attributable to The Phoenix Companies, Inc. | $ 6.2 | $ 6.2 | $ 12.3 | $ 12.3 |
Demutualization and Closed Bl49
Demutualization and Closed Block Closed Block Policyholder Dividend Obligation (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Policyholder dividend obligation | ||||
Policyholder dividends recorded through earnings | $ 54.9 | $ 42.6 | $ 95 | $ 114.8 |
Policyholder dividends recorded through OCI | (161.4) | 77.6 | (98.7) | 159.2 |
Additions to (reductions of) policyholder dividend liabilities | (106.5) | 120.2 | (3.7) | 274 |
Policyholder dividends paid | (43.5) | (43.1) | (86) | (85) |
Increase (decrease) in policyholder dividend liabilities | (150) | 77.1 | (89.7) | 189 |
Policyholder dividend liabilities, beginning of period | 977 | 817.4 | 916.7 | 705.5 |
Policyholder dividend liabilities, end of period | 827 | 894.5 | 827 | 894.5 |
Policyholder dividends payable, end of period | (198) | (207.1) | (198) | (207.1) |
Policyholder dividend obligation, end of period | $ 629 | $ 687.4 | $ 629 | $ 687.4 |
Demutualization and Closed Bl50
Demutualization and Closed Block Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Insurance [Abstract] | ||
Policyholder dividend obligation for cumulative closed block | $ 289.4 | $ 277.9 |
Unrealized gains in investments included in policyholder dividend obligation for cumulative closed block | $ 339.6 | $ 436.9 |
Deferred Policy Acquisition C51
Deferred Policy Acquisition Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Deferred Policy Acquisition Costs: | |||||
Balance, beginning of period | $ 836.5 | $ 848.6 | $ 906.9 | $ 848.6 | $ 947.8 |
Policy acquisition costs deferred | 25.5 | 18.6 | 47.3 | 33.2 | |
Costs amortized to expenses: | |||||
Recurring costs | (21.4) | (17.1) | (36.5) | (52.8) | |
Assumption unlocking | 0 | (0.2) | 0 | (6.6) | 0 |
Realized investment gains (losses) | (3.2) | (2) | 1.4 | 9.1 | |
Offsets to net unrealized investment gains or losses included in AOCI | 56.2 | (24.6) | 39.4 | (55.5) | |
Balance, end of period | $ 893.6 | $ 836.5 | $ 881.8 | $ 893.6 | $ 881.8 |
Sales Inducements (Details)
Sales Inducements (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Movement in Deferred Sales Inducements [Roll Forward] | ||||
Balance, beginning of period | $ 79.2 | $ 76.1 | $ 79.4 | $ 77.4 |
Sales inducements deferred | 4.3 | 5.4 | 9.6 | 7.5 |
Amortization charged to income | (2.9) | (2.6) | (4.8) | (2.8) |
Offsets to net unrealized investment gains or losses included in AOCI | 7.3 | (2.9) | 3.7 | (6.1) |
Balance, end of period | $ 87.9 | $ 76 | $ 87.9 | $ 76 |
Investing Activities Fair Value
Investing Activities Fair Value and Cost of Securities (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 | Jun. 25, 2011 |
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | $ 12,056 | $ 11,978 | |
Gross Unrealized Gains | 639 | 799.9 | |
Gross Unrealized Losses | (147.9) | (98.6) | |
Available-for-sale debt securities, at fair value | 12,547.1 | 12,679.3 | |
Available-for-sale debt securities, OTTI Recognized in AOCI | (39.7) | (51.8) | |
Amortized Cost, amounts applicable to the closed block debt security | 5,369.8 | 5,451.3 | |
Gross unrealized gain, amounts applicable to closed block debt security | 375 | 458.1 | |
Gross unrealized losses, amounts applicable to the closed block debt security | (45.2) | (32.4) | |
Available-for-sale debt securities | 5,699.6 | 5,877 | $ 4,773.1 |
OTTI recognized in AOCI, amounts applicable to the closed block debt security | (9.6) | (14.7) | |
Available-for-sale equity securities, Amortized Cost | 147.2 | 156 | |
Available-for-sale equity securities, Gross Unrealized Gains | 22.8 | 25.1 | |
Available-for-sale equity securities, Gross Unrealized Losses | (1.7) | (1.6) | |
Available-for-sale equity securities, at fair value (cost of $147.2 and $156.0) | 168.3 | 179.5 | |
Amounts applicable to the closed block equity security, Amortized Cost | 73.7 | 80.5 | |
Amounts applicable to the closed block equity security, Gross Unrealized Gains | 11 | 12.3 | |
Amounts applicable to the closed block equity security, Gross Unrealized Losses | (1.2) | (1.1) | |
Amounts applicable to the closed block equity security, Fair Value | 83.5 | 91.7 | |
U.S. government and agency | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 388.1 | 388.3 | |
Gross Unrealized Gains | 46.2 | 55.2 | |
Gross Unrealized Losses | (0.1) | (0.1) | |
Available-for-sale debt securities, at fair value | 434.2 | 443.4 | |
Available-for-sale debt securities, OTTI Recognized in AOCI | 0 | 0 | |
State and political subdivision | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 541.2 | 518.3 | |
Gross Unrealized Gains | 32.6 | 42.1 | |
Gross Unrealized Losses | (4.6) | (2.5) | |
Available-for-sale debt securities, at fair value | 569.2 | 557.9 | |
Available-for-sale debt securities, OTTI Recognized in AOCI | (1.1) | (1.1) | |
Foreign government | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 215.5 | 205.8 | |
Gross Unrealized Gains | 23.7 | 26.5 | |
Gross Unrealized Losses | (0.8) | (1.4) | |
Available-for-sale debt securities, at fair value | 238.4 | 230.9 | |
Available-for-sale debt securities, OTTI Recognized in AOCI | 0 | 0 | |
Corporate | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 8,234.3 | 7,942.7 | |
Gross Unrealized Gains | 420.8 | 530 | |
Gross Unrealized Losses | (120.2) | (74.6) | |
Available-for-sale debt securities, at fair value | 8,534.9 | 8,398.1 | |
Available-for-sale debt securities, OTTI Recognized in AOCI | (6.8) | (8.3) | |
Commercial mortgage-backed (“CMBS”) | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 590.3 | 602.9 | |
Gross Unrealized Gains | 40.8 | 48.4 | |
Gross Unrealized Losses | (0.4) | (0.1) | |
Available-for-sale debt securities, at fair value | 630.7 | 651.2 | |
Available-for-sale debt securities, OTTI Recognized in AOCI | 0 | (1.2) | |
Residential mortgage-backed (“RMBS”) | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 1,574.8 | 1,862.5 | |
Gross Unrealized Gains | 62.2 | 81.6 | |
Gross Unrealized Losses | (14.1) | (11.9) | |
Available-for-sale debt securities, at fair value | 1,622.9 | 1,932.2 | |
Available-for-sale debt securities, OTTI Recognized in AOCI | (25.4) | (25.5) | |
Collateralized debt obligations (“CDO”) / collateralized loan obligations (“CLO”) | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 260.9 | 197.5 | |
Gross Unrealized Gains | 1.9 | 2.7 | |
Gross Unrealized Losses | (2.9) | (3.3) | |
Available-for-sale debt securities, at fair value | 259.9 | 196.9 | |
Available-for-sale debt securities, OTTI Recognized in AOCI | (5.8) | (13.9) | |
Other asset-backed (“ABS”) | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 250.9 | 260 | |
Gross Unrealized Gains | 10.8 | 13.4 | |
Gross Unrealized Losses | (4.8) | (4.7) | |
Available-for-sale debt securities, at fair value | 256.9 | 268.7 | |
Available-for-sale debt securities, OTTI Recognized in AOCI | $ (0.6) | $ (1.8) |
Investing Activities Maturities
Investing Activities Maturities of Debt Securities (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis, Fiscal Year Maturity [Abstract] | ||
Due in one year or less | $ 198.2 | |
Due after one year through five years | 1,944 | |
Due after five years through ten years | 3,483.2 | |
Due after ten years | 3,753.7 | |
CMBS/RMBS/ABS/CDO/CLO | 2,676.9 | |
Amortized Cost | 12,056 | $ 11,978 |
Available-for-sale Securities, Debt Maturities, Fair Value, Fiscal Year Maturity [Abstract] | ||
Due in one year or less | 200.1 | |
Due after one year through five years | 2,053.5 | |
Due after five years through ten years | 3,588 | |
Due after ten years | 3,935.1 | |
CMBS/RMBS/ABS/CDO/CLO | 2,770.4 | |
Fair Value | $ 12,547.1 | $ 12,679.3 |
Investing Activities Sales of A
Investing Activities Sales of Available-for-Sale Securities (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Proceeds from sales | $ 476.8 | $ 70.4 |
Proceeds from maturities/repayments | 556 | 605.2 |
Gross investment gains from sales, prepayments and maturities | 20.8 | 20.1 |
Gross investment losses from sales and maturities | (1.9) | (4.2) |
Equity securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Proceeds from sales | 14.3 | 4.4 |
Gross investment gains from sales, prepayments and maturities | 0 | 1.9 |
Gross investment losses from sales and maturities | $ 0 | $ (1.5) |
Investing Activities Aging of T
Investing Activities Aging of Temporary Impaired Securities (Details) $ in Millions | Jun. 30, 2015USD ($)security | Dec. 31, 2014USD ($)security |
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, continuous unrealized loss position, less than twelve months, fair value | $ 2,329 | $ 768.6 |
Available-for-sale securities, continuous unrealized loss position, less than 12 months, accumulated loss | (75.4) | (27) |
Available-for-sale securities, continuous unrealized loss position,, twelve months or longer, fair value | 779.1 | 1,053.2 |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, accumulated loss | (74.2) | (73.2) |
Available-for-sale securities, continuous unrealized loss position, fair value | 3,108.1 | 1,821.8 |
Available-for-sale securities, continuous unrealized loss position, accumulated loss | (149.6) | (100.2) |
Available-for-sale securities, continuous unrealized loss position, amounts inside closed block, less than twelve months, fair value | 728.1 | 266.8 |
Available-for-sale securities, continuous unrealized loss position, amounts inside closed block, less than 12 months, accumulated loss | (25.3) | (11.7) |
Available-for-sale securities, continuous unrealized loss position, mounts inside closed block, twelve months or longer, fair value | 303.1 | 387.8 |
Available-for-sale securities, continuous unrealized loss position, amounts inside closed block, 12 months or longer, accumulated loss | (21.1) | (21.8) |
Available-for-sale securities, continuous unrealized loss position, amount inside closed block, fair value, total | 1,031.2 | 654.6 |
Amounts inside the closed block | (46.4) | (33.5) |
Available-for-sale securities, continuous unrealized loss position, amounts outside closed block, less than twelve months, fair value | 1,600.9 | 501.8 |
Available-for-sale securities, continuous unrealized loss position, amounts outside closed block, less than 12 months, accumulated loss | (50.1) | (15.3) |
Available-for-sale securities, continuous unrealized loss position, amounts outside closed block, twelve months or longer, fair value | 476 | 665.4 |
Available-for-sale securities, continuous unrealized loss position, amounts outside closed block, 12 months or longer, accumulated loss | (53.1) | (51.4) |
Available-for-sale securities, continuous unrealized loss position, amount outside closed block, fair value, total | 2,076.9 | 1,167.2 |
Amounts outside the closed block | (103.2) | (66.7) |
Available-for-sale securities, continuous unrealized loss position, amounts outside closed block, below investment grade, less than twelve months, fair value | 96.3 | 84.2 |
Available-for-sale securities, continuous unrealized loss position, amounts outside closed block, below investment grade, less than 12 months, accumulated loss | (4.4) | (4.1) |
Available-for-sale securities, continuous unrealized loss position, amounts outside closed block, below investment grade, twelve months or longer, fair value | 61.6 | 50.4 |
Available-for-sale securities, continuous unrealized loss position, amounts outside closed block, below investment Grade, 12 months or longer, accumulated loss | (7.9) | (6.6) |
Available-for-sale securities, continuous unrealized loss position, amount outside closed block, below investment grade, fair value, total | 157.9 | 134.6 |
Debt Securities outside the closed block that are below investment grade | $ (12.3) | $ (10.7) |
Available-for-sale securities, continuous unrealized loss position, less than 12 months, number of securities | security | 411 | 158 |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, number of securities | security | 159 | 211 |
Available-for-sale, number of securities in unrealized loss position | security | 570 | 369 |
U.S. government and agency | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, continuous unrealized loss position, less than twelve months, fair value | $ 2.9 | $ 0 |
Available-for-sale securities, continuous unrealized loss position, less than 12 months, accumulated loss | (0.1) | 0 |
Available-for-sale securities, continuous unrealized loss position,, twelve months or longer, fair value | 1.7 | 2.7 |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, accumulated loss | 0 | (0.1) |
Available-for-sale securities, continuous unrealized loss position, fair value | 4.6 | 2.7 |
Available-for-sale securities, continuous unrealized loss position, accumulated loss | (0.1) | (0.1) |
State and political subdivision | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, continuous unrealized loss position, less than twelve months, fair value | 81.6 | 11.6 |
Available-for-sale securities, continuous unrealized loss position, less than 12 months, accumulated loss | (1.6) | (0.6) |
Available-for-sale securities, continuous unrealized loss position,, twelve months or longer, fair value | 26.7 | 31.1 |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, accumulated loss | (3) | (1.9) |
Available-for-sale securities, continuous unrealized loss position, fair value | 108.3 | 42.7 |
Available-for-sale securities, continuous unrealized loss position, accumulated loss | (4.6) | (2.5) |
Foreign government | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, continuous unrealized loss position, less than twelve months, fair value | 28 | 15.7 |
Available-for-sale securities, continuous unrealized loss position, less than 12 months, accumulated loss | (0.8) | (1.4) |
Available-for-sale securities, continuous unrealized loss position,, twelve months or longer, fair value | 0 | 0 |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, accumulated loss | 0 | 0 |
Available-for-sale securities, continuous unrealized loss position, fair value | 28 | 15.7 |
Available-for-sale securities, continuous unrealized loss position, accumulated loss | (0.8) | (1.4) |
Corporate | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, continuous unrealized loss position, less than twelve months, fair value | 1,972.3 | 643 |
Available-for-sale securities, continuous unrealized loss position, less than 12 months, accumulated loss | (69.4) | (23.5) |
Available-for-sale securities, continuous unrealized loss position,, twelve months or longer, fair value | 442.1 | 654.3 |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, accumulated loss | (50.8) | (51.1) |
Available-for-sale securities, continuous unrealized loss position, fair value | 2,414.4 | 1,297.3 |
Available-for-sale securities, continuous unrealized loss position, accumulated loss | (120.2) | (74.6) |
Commercial mortgage-backed (“CMBS”) | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, continuous unrealized loss position, less than twelve months, fair value | 36.5 | 12.6 |
Available-for-sale securities, continuous unrealized loss position, less than 12 months, accumulated loss | (0.4) | 0 |
Available-for-sale securities, continuous unrealized loss position,, twelve months or longer, fair value | 0 | 10.9 |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, accumulated loss | 0 | (0.1) |
Available-for-sale securities, continuous unrealized loss position, fair value | 36.5 | 23.5 |
Available-for-sale securities, continuous unrealized loss position, accumulated loss | (0.4) | (0.1) |
Residential mortgage-backed (“RMBS”) | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, continuous unrealized loss position, less than twelve months, fair value | 99.3 | 8.4 |
Available-for-sale securities, continuous unrealized loss position, less than 12 months, accumulated loss | (1.4) | (0.2) |
Available-for-sale securities, continuous unrealized loss position,, twelve months or longer, fair value | 187.4 | 226.7 |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, accumulated loss | (12.7) | (11.7) |
Available-for-sale securities, continuous unrealized loss position, fair value | 286.7 | 235.1 |
Available-for-sale securities, continuous unrealized loss position, accumulated loss | (14.1) | (11.9) |
Collateralized debt obligations (“CDO”) / collateralized loan obligations (“CLO”) | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, continuous unrealized loss position, less than twelve months, fair value | 94.1 | 57.9 |
Available-for-sale securities, continuous unrealized loss position, less than 12 months, accumulated loss | (0.7) | (0.5) |
Available-for-sale securities, continuous unrealized loss position,, twelve months or longer, fair value | 88.6 | 96.3 |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, accumulated loss | (2.2) | (2.8) |
Available-for-sale securities, continuous unrealized loss position, fair value | 182.7 | 154.2 |
Available-for-sale securities, continuous unrealized loss position, accumulated loss | (2.9) | (3.3) |
Other asset-backed (“ABS”) | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, continuous unrealized loss position, less than twelve months, fair value | 7.7 | 13.8 |
Available-for-sale securities, continuous unrealized loss position, less than 12 months, accumulated loss | 0 | (0.1) |
Available-for-sale securities, continuous unrealized loss position,, twelve months or longer, fair value | 14.6 | 16 |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, accumulated loss | (4.8) | (4.6) |
Available-for-sale securities, continuous unrealized loss position, fair value | 22.3 | 29.8 |
Available-for-sale securities, continuous unrealized loss position, accumulated loss | (4.8) | (4.7) |
Debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, continuous unrealized loss position, less than twelve months, fair value | 2,322.4 | 763 |
Available-for-sale securities, continuous unrealized loss position, less than 12 months, accumulated loss | (74.4) | (26.3) |
Available-for-sale securities, continuous unrealized loss position,, twelve months or longer, fair value | 761.1 | 1,038 |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, accumulated loss | (73.5) | (72.3) |
Available-for-sale securities, continuous unrealized loss position, fair value | 3,083.5 | 1,801 |
Available-for-sale securities, continuous unrealized loss position, accumulated loss | $ (147.9) | (98.6) |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, number of securities | security | 149 | |
Equity securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, continuous unrealized loss position, less than twelve months, fair value | $ 6.6 | 5.6 |
Available-for-sale securities, continuous unrealized loss position, less than 12 months, accumulated loss | (1) | (0.7) |
Available-for-sale securities, continuous unrealized loss position,, twelve months or longer, fair value | 18 | 15.2 |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, accumulated loss | (0.7) | (0.9) |
Available-for-sale securities, continuous unrealized loss position, fair value | 24.6 | 20.8 |
Available-for-sale securities, continuous unrealized loss position, accumulated loss | $ (1.7) | $ (1.6) |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, number of securities | security | 10 |
Investing Activities Debt & Equ
Investing Activities Debt & Equity Securities Narrative (Details) $ in Millions | Jun. 30, 2015USD ($)security | Dec. 31, 2014security |
Schedule of Available-for-sale Securities [Line Items] | ||
Unrealized losses on debt securities outside closed block depressed of amortized cost, percentage | 20.00% | |
Unrealized losses on debt securities outside closed block depressed of amortized cost, amount | $ 3.9 | |
Unrealized losses on debt securities held in closed block depressed of amortized cost, amount | 0 | |
Unrealized losses on debt securities outside closed block depressed of amortized cost for more than 12 month, amount | 2.4 | |
Unrealized losses on below-investment-grade debt securities depressed of amortized cost for more than 12 month, amount | $ 0 | |
Unrealized losses on debt securities outside closed block depressed of amortized cost for more than 12 month, percentage | 20.00% | |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, number of securities | security | 159 | 211 |
Debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, number of securities | security | 149 | |
Equity securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, number of securities | security | 10 |
Investing Activities Other-than
Investing Activities Other-than-temporary impairments Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Schedule of Available-for-sale Securities [Line Items] | ||||
Impairment losses | $ (1.1) | $ (1) | $ (9.5) | $ (1.2) |
Other than temporary impairment losses, investments, portion recognized in earnings, net, available-for-sale securities | $ 1.1 | $ 0 | $ 2.6 | $ 0 |
Investing Activities Credit Los
Investing Activities Credit Losses Recognized in Earnings on Debt Securities for which a Portion of the OTTI Loss was Recognized in OCI (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Credit Losses Recognized in Earnings on Debt Securities for which a Portion of the OTTI Loss was Recognized in OCI: ($ in millions) | ||||
Balance, beginning of period | $ (49.2) | $ (63.1) | $ (52.4) | $ (71.4) |
Add: Credit losses on securities not previously impaired | 0 | 0 | 0 | 0 |
Add: Credit losses on securities previously impaired | 0 | 0 | 0 | 0 |
Less: Credit losses on securities impaired due to intent to sell | 0 | 0 | 0 | 0 |
Less: Credit losses on securities sold | 6.4 | 0.5 | 9.6 | 8.8 |
Less: Increases in cash flows expected on previously impaired securities | 0 | 0 | 0 | 0 |
Balance, end of period | $ (42.8) | $ (62.6) | $ (42.8) | $ (62.6) |
Investing Activities Limited Pa
Investing Activities Limited Partnerships and other investments (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Schedule of Equity Method Investments [Line Items] | ||
Leveraged leases | $ 10.3 | $ 11.8 |
Life settlements | 18 | 22.4 |
Other alternative assets | 2.2 | 2.2 |
Limited partnerships and other investments | 543.7 | 542.8 |
Amounts applicable to the closed block | 355.8 | 343.4 |
Private equity funds | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity method investments | 259.6 | 241.1 |
Mezzanine funds | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity method investments | 165.4 | 162.4 |
Infrastructure funds | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity method investments | 32.5 | 38.9 |
Hedge funds | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity method investments | 10.7 | 10.7 |
Mortgage and real estate funds | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity method investments | 4.3 | 3.7 |
Direct equity investments | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity method investments | $ 40.7 | $ 49.6 |
Investing Activities Sources of
Investing Activities Sources of Net Investment Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Net Investment Income [Line Items] | ||||
Investment income | $ 209 | $ 196.1 | $ 425.7 | $ 411.8 |
Less: Discontinued operations | 0.3 | 0.3 | 0.6 | 0.6 |
Less: Investment expenses | 6.4 | 4.3 | 13.5 | 8.2 |
Net investment income | 202.3 | 191.5 | 411.6 | 403 |
Amounts applicable to the closed block | 95 | 93.7 | 195.2 | 201 |
Debt securities | ||||
Net Investment Income [Line Items] | ||||
Investment income | 150.7 | 144 | 299.5 | 287.8 |
Equity securities | ||||
Net Investment Income [Line Items] | ||||
Investment income | 1.7 | 3 | 3.6 | 5.1 |
Limited partnerships and other investments | ||||
Net Investment Income [Line Items] | ||||
Investment income | 15.7 | 6.3 | 28.9 | 32.8 |
Policy loans | ||||
Net Investment Income [Line Items] | ||||
Investment income | 41.8 | 41.3 | 83.5 | 82.5 |
Fair value investments | ||||
Net Investment Income [Line Items] | ||||
Investment income | $ (0.9) | $ 1.5 | $ 10.2 | $ 3.6 |
Investing Activities Sources an
Investing Activities Sources and Types of Net Realized Investment Gains (Losses) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Gain (Loss) on Investments [Line Items] | ||||
Total other-than-temporary debt impairments | $ 0.9 | $ 0 | $ 1 | $ (0.2) |
Portion of losses recognized in OCI | (0.2) | 0 | (1.6) | (0.2) |
Other than temporary impairment losses, investments, portion recognized in earnings, net, available-for-sale securities | (1.1) | 0 | (2.6) | 0 |
Impairment losses | (1.1) | (1) | (9.5) | (1.2) |
Limited partnerships and other investment transaction gains | 0 | 0 | 0 | 0 |
Limited partnerships and other investment transaction losses | 0 | 0 | 0 | 0 |
Net realized capital gains (losses) | 11.2 | 6.8 | 18.8 | 16.4 |
Derivative instruments | (11.9) | (0.1) | (14.2) | (23.9) |
Embedded derivatives | 4.4 | (2.2) | (5.9) | (15.1) |
Assets valued at fair value | (4.7) | 0.7 | (7.4) | 1.1 |
Net realized gains (losses), excluding impairment losses | (1) | 5.2 | (8.7) | (21.5) |
Net realized gains (losses) | (2.1) | 4.2 | (18.2) | (22.7) |
U.S. government and agency | ||||
Gain (Loss) on Investments [Line Items] | ||||
Other than temporary impairment losses, investments, portion recognized in earnings, net, available-for-sale securities | 0 | 0 | 0 | 0 |
State and political subdivision | ||||
Gain (Loss) on Investments [Line Items] | ||||
Other than temporary impairment losses, investments, portion recognized in earnings, net, available-for-sale securities | 0 | 0 | 0 | 0 |
Foreign government | ||||
Gain (Loss) on Investments [Line Items] | ||||
Other than temporary impairment losses, investments, portion recognized in earnings, net, available-for-sale securities | 0 | 0 | 0 | $ 0 |
Corporate | ||||
Gain (Loss) on Investments [Line Items] | ||||
Other than temporary impairment losses, investments, portion recognized in earnings, net, available-for-sale securities | (1.1) | 0 | (2.4) | |
Commercial mortgage-backed (“CMBS”) | ||||
Gain (Loss) on Investments [Line Items] | ||||
Other than temporary impairment losses, investments, portion recognized in earnings, net, available-for-sale securities | 0 | 0 | 0 | $ 0 |
Residential mortgage-backed (“RMBS”) | ||||
Gain (Loss) on Investments [Line Items] | ||||
Other than temporary impairment losses, investments, portion recognized in earnings, net, available-for-sale securities | 0 | 0 | (0.2) | 0 |
Collateralized debt obligations (“CDO”) / collateralized loan obligations (“CLO”) | ||||
Gain (Loss) on Investments [Line Items] | ||||
Other than temporary impairment losses, investments, portion recognized in earnings, net, available-for-sale securities | 0 | 0 | 0 | 0 |
Other asset-backed (“ABS”) | ||||
Gain (Loss) on Investments [Line Items] | ||||
Other than temporary impairment losses, investments, portion recognized in earnings, net, available-for-sale securities | 0 | 0 | 0 | 0 |
Debt securities | ||||
Gain (Loss) on Investments [Line Items] | ||||
Other than temporary impairment losses, investments, portion recognized in earnings, net, available-for-sale securities | (1.1) | 0 | (2.6) | 0 |
Debt and equity security transaction gains | 12.3 | 8.7 | 20.8 | 20.3 |
Debt and equity security transaction losses | (1.1) | (0.4) | (2) | (4.3) |
Equity securities | ||||
Gain (Loss) on Investments [Line Items] | ||||
Other than temporary impairment losses, investments, portion recognized in earnings, net, available-for-sale securities | 0 | (1) | (6.9) | (1.2) |
Debt and equity security transaction gains | 0 | 0 | 0 | 1.9 |
Debt and equity security transaction losses | 0 | (1.5) | 0 | (1.5) |
Limited partnerships and other investments | ||||
Gain (Loss) on Investments [Line Items] | ||||
Limited partnerships and other investment impairments | $ 0 | $ 0 | $ 0 | $ 0 |
Investing Activities Sources 63
Investing Activities Sources of Changes in Net Unrealized Investment Gains (Losses) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Schedule of Available-for-sale Securities [Line Items] | ||||
Other investments | $ (2.2) | $ (0.1) | $ (2.4) | $ 0.2 |
Net unrealized investment gains (losses) | (356.2) | 168.6 | (215) | 337.1 |
Applicable to closed block policyholder dividend obligation | (161.4) | 77.6 | (98.7) | 159.2 |
Applicable to DAC | (56.2) | 24.6 | (39.4) | 55.5 |
Applicable to other actuarial offsets | (83.9) | 14.5 | (25.6) | 46.8 |
Applicable to deferred income tax expense (benefit) | (24.4) | 33.4 | (17.4) | 66.1 |
Offsets to net unrealized investment gains (losses) | (325.9) | 150.1 | (181.1) | 327.6 |
Net unrealized gains (losses) included in OCI | (30.3) | 18.5 | (33.9) | 9.5 |
Debt securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Available-for-sale securities, gross unrealized gain (loss) | (354.1) | 163.4 | (210.2) | 329.4 |
Equity securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Available-for-sale securities, gross unrealized gain (loss) | $ 0.1 | $ 5.3 | $ (2.4) | $ 7.5 |
Investing Activities Carrying V
Investing Activities Carrying Value of Assets and Liabilities for Consolidated Variable Interest Entities (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Variable Interest Entity [Line Items] | ||
Total assets of consolidated VIEs | $ 96.1 | $ 101.1 |
Maximum exposure loss | 173.3 | 203.3 |
Total liabilities of consolidated VIEs | 0.6 | 0.6 |
Unfunded commitments related to VIEs | 7.7 | 11.9 |
Debt securities | ||
Variable Interest Entity [Line Items] | ||
Total assets of consolidated VIEs | 14.9 | 5.5 |
Maximum exposure loss | 9.9 | 5.1 |
Equity securities | ||
Variable Interest Entity [Line Items] | ||
Total assets of consolidated VIEs | 44.8 | 35 |
Maximum exposure loss | 39.5 | 30 |
Cash and cash equivalents | ||
Variable Interest Entity [Line Items] | ||
Total assets of consolidated VIEs | 6.2 | 9.4 |
Maximum exposure loss | 5.7 | 9.3 |
Partnership Interests | ||
Variable Interest Entity [Line Items] | ||
Total assets of consolidated VIEs | 1.4 | 0 |
Maximum exposure loss | 1.4 | 0 |
Single Asset LLC | ||
Variable Interest Entity [Line Items] | ||
Total assets of consolidated VIEs | 23.4 | 50.6 |
Maximum exposure loss | 18.9 | 36.6 |
Other assets | ||
Variable Interest Entity [Line Items] | ||
Total assets of consolidated VIEs | 5.4 | 0.6 |
Maximum exposure loss | 4.2 | 0.5 |
Assets | ||
Variable Interest Entity [Line Items] | ||
Maximum exposure loss | 79.6 | 81.5 |
Liability | ||
Variable Interest Entity [Line Items] | ||
Maximum exposure loss | $ 0.4 | $ 0.5 |
Investing Activities Carrying65
Investing Activities Carrying Value of Assets and Liabilities and Maximum Exposure Loss Relating to Variable Interest Entities (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Variable Interest Entity [Line Items] | ||
Assets | $ 126.3 | $ 151.5 |
Liabilities | 0 | 0 |
Maximum exposure loss | 173.3 | 203.3 |
Limited Partnerships | ||
Variable Interest Entity [Line Items] | ||
Assets | 84.9 | 106 |
Liabilities | 0 | 0 |
Maximum exposure loss | 131.9 | 157.8 |
LLCs | ||
Variable Interest Entity [Line Items] | ||
Assets | 41.4 | 45.5 |
Liabilities | 0 | 0 |
Maximum exposure loss | $ 41.4 | $ 45.5 |
Investing Activities Issuer and
Investing Activities Issuer and Counterparty Credit Exposure (Details) $ in Millions | 6 Months Ended | |
Jun. 30, 2015USD ($)issuercounterparty | Dec. 31, 2014USD ($) | |
Credit Derivatives [Line Items] | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | $ 12,547.1 | $ 12,679.3 |
Credit Concentration Risk | ||
Credit Derivatives [Line Items] | ||
Number of issuers (in issuers) | issuer | 75 | |
Derivative assets, net of liabilities | $ 49.8 | |
Number of counterparties | counterparty | 11 | |
Debt securities, fair value | $ 289.6 | |
Maximum amount of loss due to credit risk | 339.4 | |
External Credit Rating, Non Investment Grade | ||
Credit Derivatives [Line Items] | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | $ 902.4 | $ 848.8 |
Financing Activities Schedule o
Financing Activities Schedule of Long-term Debt Instruments (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Indebtedness | $ 378.9 | $ 378.9 |
7.15% Surplus Notes | Surplus Note | ||
Debt Instrument [Line Items] | ||
Indebtedness | 126.2 | 126.2 |
7.45% Senior Unsecured Bonds | Unsecured Debt | ||
Debt Instrument [Line Items] | ||
Indebtedness | $ 252.7 | $ 252.7 |
Financing Activities Narrative
Financing Activities Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Debt Instrument [Line Items] | ||||
Interest expense on indebtedness | $ 7.1 | $ 7.1 | $ 14.2 | $ 14.2 |
7.15% Surplus Notes | Surplus Note | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate | 7.15% | 7.15% | ||
7.45% Senior Unsecured Bonds | Unsecured Debt | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate | 7.45% | 7.45% | ||
Period to file reports with trustee | 15 days |
Common Stock and Stock Repurc69
Common Stock and Stock Repurchase Program Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Class of Stock [Line Items] | ||
Shares authorized (in shares) | 50,000,000 | |
Shares issued (in shares) | 6,400,000 | |
Shares held in employee trust (in shares) | 100,000 | |
Maximum amount the Company is authorized to repurchase | $ 25 | |
Ownership percentage by shareholder | 5.20% | |
State Farm | ||
Class of Stock [Line Items] | ||
Ownership percentage by shareholder | 5.20% | |
Sales Commissions and Fees | $ 1.5 | $ 1.3 |
Morgan Stanley | ||
Class of Stock [Line Items] | ||
Ownership percentage by shareholder | 5.10% | |
Sales Commissions and Fees | $ 0 | $ 1.1 |
Employee stock options | ||
Class of Stock [Line Items] | ||
Common shares reserved (in shares) | 300,000 | |
Restricted stock units | ||
Class of Stock [Line Items] | ||
Common shares reserved (in shares) | 100,000 | |
Unsecured Debt | 7.45% Senior Unsecured Bonds | ||
Class of Stock [Line Items] | ||
Stated interest rate | 7.45% | |
Policyholders | ||
Class of Stock [Line Items] | ||
Shares issued (in shares) | 2,800,000 | |
Public and Share Based Compensation | ||
Class of Stock [Line Items] | ||
Shares issued (in shares) | 3,600,000 |
Separate Accounts Death Benefit
Separate Accounts Death Benefits, Other Insurance Benefit Features and Embedded Product Derivatives Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | |||||
Assets supporting fixed indexed annuities | $ 2,800 | $ 2,800 | $ 2,600 | ||
Total variable annuity embedded derivative liabilities | 3.4 | 3.4 | 6.8 | ||
Embedded derivative, gain (loss) | 4.4 | $ (2.2) | (5.9) | $ (15.1) | |
Fixed Annuity | |||||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | |||||
Total variable annuity embedded derivative liabilities | $ 172.3 | $ 172.3 | $ 153.9 |
Separate Accounts, Death Bene71
Separate Accounts, Death Benefits and Other Insurance Benefit Features and Embedded Product Derivatives Separate Account Investments of Account Balances of Variable Annuity Contracts with Guarantees (Details) - Variable Annuity - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | ||
Total | $ 1,915.1 | $ 2,064.4 |
Debt securities | ||
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | ||
Total | 346.1 | 375.9 |
Equity securities | ||
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | ||
Total | 1,522.9 | 1,638.6 |
Other | ||
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | ||
Total | $ 46.1 | $ 49.9 |
Separate Accounts, Death Bene72
Separate Accounts, Death Benefits and Other Insurance Benefit Features and Embedded Product Derivatives Changes in Guaranteed Liability Balances (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Dec. 31, 2014 | |
Guaranteed Minimum Income Benefit | Variable Annuity | ||||
Movement in Guaranteed Benefit Liability, Gross [Roll Forward] | ||||
Liability balance, beginning of the period | $ 14.6 | $ 9.6 | $ 17.1 | $ 9.8 |
Incurred | 0.3 | (0.7) | (2.2) | (0.8) |
Paid | (0.2) | 0 | (0.2) | 0 |
Assumption unlocking | 0 | 0 | 0 | 0 |
Change due to net unrealized gains or losses included in AOCI | 0 | 0 | 0 | (0.1) |
Liability balance, end of the period | 14.7 | 8.9 | 14.7 | 17.1 |
Guaranteed Minimum Death Benefit | Variable Annuity | ||||
Movement in Guaranteed Benefit Liability, Gross [Roll Forward] | ||||
Liability balance, beginning of the period | 20.7 | 22.1 | 21.4 | 22.7 |
Incurred | 0.5 | 0.1 | (0.1) | 0 |
Paid | (0.9) | (0.8) | (1.5) | (1.4) |
Assumption unlocking | 0 | 0 | 0.4 | 0 |
Change due to net unrealized gains or losses included in AOCI | (0.2) | (0.1) | (0.1) | 0 |
Liability balance, end of the period | 20.1 | 21.3 | 20.1 | 21.4 |
Guaranteed Minimum Withdrawal Benefit And Guaranteed Minimum Death Benefit | Fixed Annuity | ||||
Movement in Guaranteed Benefit Liability, Gross [Roll Forward] | ||||
Liability balance, beginning of the period | 171.3 | 104.1 | 147 | 85.4 |
Incurred | 16 | 14.5 | 26.5 | 14.8 |
Paid | (0.1) | (0.1) | (0.2) | (0.2) |
Assumption unlocking | 0 | 0 | 0 | 0 |
Change due to net unrealized gains or losses included in AOCI | (33.8) | 16.7 | (19.9) | 35.2 |
Liability balance, end of the period | 153.4 | 135.2 | 153.4 | 147 |
Secondary Guarantee | Universal Life | ||||
Movement in Guaranteed Benefit Liability, Gross [Roll Forward] | ||||
Liability balance, beginning of the period | 200.9 | 178 | 195.8 | 170.6 |
Incurred | 10.7 | 9.5 | 20.8 | 17.9 |
Paid | (4.8) | (1.3) | (11.2) | (3.2) |
Assumption unlocking | 0 | 0 | 0 | 0 |
Change due to net unrealized gains or losses included in AOCI | (3) | 0.9 | (1.6) | 1.8 |
Liability balance, end of the period | $ 203.8 | $ 187.1 | $ 203.8 | $ 195.8 |
Separate Accounts, Death Bene73
Separate Accounts, Death Benefits and Other Insurance Benefit Features and Embedded Product Derivatives Variable Annuity GMDB Benefits by Type (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Net Amount at Risk by Product and Guarantee [Line Items] | ||
Subtotal separate account liabilities with GMDB | $ 731 | $ 819.5 |
Separate account liabilities | 2,855.2 | 3,020.7 |
Guaranteed Minimum Death Benefit | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ||
Net amount at risk by product and guarantee, general and separate account value | 2,275.3 | 2,436.5 |
NAR before Reinsurance | 121.2 | 118.6 |
NAR after Reinsurance | 27.4 | 19.8 |
Less: General account value with GMDB | 366.5 | 378.6 |
Subtotal separate account liabilities with GMDB | 1,908.8 | 2,057.9 |
Without Guaranteed Minimum Death Benefit | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ||
Separate account liabilities | $ 946.4 | $ 962.8 |
Guaranteed Minimum Income Benefit | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ||
Average Attained Age of Annuitant | 66 years | 65 years |
Less: General account value with GMDB | $ 292.4 | $ 319.6 |
Return On Premium | Guaranteed Minimum Death Benefit | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ||
Net amount at risk by product and guarantee, general and separate account value | 606.9 | 661.5 |
NAR before Reinsurance | 1.5 | 1.6 |
NAR after Reinsurance | $ 1.5 | $ 1.6 |
Average Attained Age of Annuitant | 64 years | 63 years |
Step Up | Guaranteed Minimum Death Benefit | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ||
Net amount at risk by product and guarantee, general and separate account value | $ 1,619.3 | $ 1,723.2 |
NAR before Reinsurance | 111.4 | 112.2 |
NAR after Reinsurance | $ 17.6 | $ 13.4 |
Average Attained Age of Annuitant | 65 years | 64 years |
Extend Earnings Enhancement Benefit | Guaranteed Minimum Death Benefit | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ||
Net amount at risk by product and guarantee, general and separate account value | $ 27.2 | $ 29.1 |
NAR before Reinsurance | 3.2 | 0 |
NAR after Reinsurance | $ 3.2 | $ 0 |
Average Attained Age of Annuitant | 65 years | 65 years |
Extend Annual Step Up or Roll Up | Guaranteed Minimum Death Benefit | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ||
Net amount at risk by product and guarantee, general and separate account value | $ 21.9 | $ 22.7 |
NAR before Reinsurance | 5.1 | 4.8 |
NAR after Reinsurance | $ 5.1 | $ 4.8 |
Average Attained Age of Annuitant | 69 years | 69 years |
Separate Accounts, Death Bene74
Separate Accounts, Death Benefits and Other Insurance Benefit Features and Embedded Product Derivatives Changes in Additional Liability Balances (Details) - Universal Life - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Dec. 31, 2014 | |
Supplementary Insurance Information, Liability for Future Policy Benefits, Losses, Claims and Loss Expense Reserves [Roll Forward] | ||||
Balance, beginning of period | $ 387.7 | $ 279.9 | $ 351.5 | $ 249.1 |
Incurred | (8.3) | 23.3 | 8.4 | 39.4 |
Assumption unlocking | 0 | 0 | (6.8) | 0 |
Change due to net unrealized gains or losses included in AOCI | (28.2) | (9) | (1.9) | 5.7 |
Balance, end of period | $ 351.2 | $ 294.2 | $ 351.2 | $ 351.5 |
Separate Accounts, Death Bene75
Separate Accounts, Death Benefits and Other Insurance Benefit Features and Embedded Product Derivatives Non-Insurance Guaranteed Product Features (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Net Amount at Risk by Product and Guarantee [Line Items] | ||
Separate account liabilities | $ 731 | $ 819.5 |
Variable Annuity | GMWB | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ||
Separate account liabilities | $ 450.2 | $ 496.8 |
Average Attained Age of Annuitant | 65 years | 65 years |
Variable Annuity | GMAB | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ||
Separate account liabilities | $ 275.5 | $ 315.6 |
Average Attained Age of Annuitant | 59 years | 59 years |
Variable Annuity | COMBO | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ||
Separate account liabilities | $ 5.3 | $ 7.1 |
Average Attained Age of Annuitant | 65 years | 65 years |
Separate Accounts, Death Bene76
Separate Accounts, Death Benefits and Other Insurance Benefit Features and Embedded Product Derivatives Variable Annuity Embedded Derivative Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ||
Total variable annuity embedded derivative liabilities | $ 3.4 | $ 6.8 |
GMWB | ||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ||
Total variable annuity embedded derivative liabilities | 4.5 | 7.3 |
GMAB | ||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ||
Total variable annuity embedded derivative liabilities | (0.9) | (0.3) |
COMBO | ||
Liabilities for Guarantees on Long-Duration Contracts [Line Items] | ||
Total variable annuity embedded derivative liabilities | $ (0.2) | $ (0.2) |
Derivative Instruments Narrativ
Derivative Instruments Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Cash and cash equivalents held at collateral by a third party related to derivative transactions | $ 33.9 | $ 18.6 |
Derivative Instruments (Details
Derivative Instruments (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Derivative [Line Items] | ||
Notional Amount | $ 3,238.8 | $ 3,617.7 |
Fair value derivative asset | 104.1 | 161.3 |
Derivative liabilities | 54.3 | 85.6 |
Derivative asset, contingent receivable | 1.5 | 1.5 |
Interest rate swaps | ||
Derivative [Line Items] | ||
Notional Amount | 239.5 | 114 |
Fair value derivative asset | 1.8 | 9.7 |
Derivative liabilities | 2.9 | 1.9 |
Variance swaps | ||
Derivative [Line Items] | ||
Notional Amount | 0.9 | 0.9 |
Fair value derivative asset | 0 | 0 |
Derivative liabilities | 9.4 | 8.6 |
Swaptions | ||
Derivative [Line Items] | ||
Notional Amount | 777 | |
Fair value derivative asset | 0.1 | |
Derivative liabilities | 0 | |
Put options | ||
Derivative [Line Items] | ||
Notional Amount | 692.5 | 692.5 |
Fair value derivative asset | 22.7 | 31.1 |
Derivative liabilities | 0 | 0 |
Call options | ||
Derivative [Line Items] | ||
Notional Amount | 2,285.3 | 2,019.2 |
Fair value derivative asset | 78 | 119.8 |
Derivative liabilities | 42 | 74.6 |
Cross currency swaps | ||
Derivative [Line Items] | ||
Notional Amount | 10 | 10 |
Fair value derivative asset | 1.4 | 0.6 |
Derivative liabilities | 0 | 0 |
Equity futures | ||
Derivative [Line Items] | ||
Notional Amount | 10.6 | 4.1 |
Fair value derivative asset | 0.2 | 0 |
Derivative liabilities | $ 0 | $ 0.5 |
Derivative Instrument Gains (Lo
Derivative Instrument Gains (Losses) Recognized in Earnings (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total derivative instrument gains (losses) recognized in realized investment gains (losses) | $ (7.5) | $ (2.3) | $ (20.1) | $ (39) |
Interest rate swaps | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total derivative instrument gains (losses) recognized in realized investment gains (losses) | (4.3) | 1.8 | (1.6) | 6.8 |
Variance swaps | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total derivative instrument gains (losses) recognized in realized investment gains (losses) | (0.4) | (0.4) | (0.8) | (1) |
Swaptions | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total derivative instrument gains (losses) recognized in realized investment gains (losses) | 0 | (7.6) | (0.1) | (25.9) |
Put options | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total derivative instrument gains (losses) recognized in realized investment gains (losses) | (4.1) | (4.3) | (8.3) | (8.5) |
Call options | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total derivative instrument gains (losses) recognized in realized investment gains (losses) | (2.8) | 17.2 | (4.3) | 14.2 |
Cross currency swaps | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total derivative instrument gains (losses) recognized in realized investment gains (losses) | (0.3) | 0.1 | 0.7 | 0 |
Equity futures | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total derivative instrument gains (losses) recognized in realized investment gains (losses) | 0 | (6.9) | 0.2 | (9.5) |
Embedded derivatives | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total derivative instrument gains (losses) recognized in realized investment gains (losses) | $ 4.4 | $ (2.2) | $ (5.9) | $ (15.1) |
Derivative Instruments Offsetti
Derivative Instruments Offsetting Assets and Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Derivative Asset [Abstract] | ||
Gross amounts recognized | $ 104.1 | $ 161.3 |
Gross amounts offset in the balance sheet | 0 | 0 |
Net amount presented in the balance sheet | 104.1 | 161.3 |
Derivative, collateral, obligation to return securities | (49.6) | (82.5) |
Net amount | 54.5 | 78.8 |
Offsetting Derivative Liabilities [Abstract] | ||
Gross amounts recognized | (54.3) | (85.6) |
Gross amounts offset in the balance sheet | 29.2 | 15.5 |
Net amounts presented in the balance sheet | (54.3) | (85.6) |
Derivative, collateral, right to reclaim securities | 49.6 | 82.5 |
Cash collateral pledged | 4.7 | 3.1 |
Net amount | $ 0 | $ 0 |
Fair Value of Financial Instr81
Fair Value of Financial Instruments - Recurring (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
ASSETS: | ||
Available-for-sale debt securities | $ 12,547.1 | $ 12,679.3 |
Available-for-sale equity securities | 168.3 | 179.5 |
Fair value investments | 213.9 | 235.4 |
Separate account assets | 2,855.2 | 3,020.7 |
LIABILITIES: | ||
Derivative liabilities | 54.3 | 85.6 |
U.S. government and agency | ||
ASSETS: | ||
Available-for-sale debt securities | 434.2 | 443.4 |
State and political subdivision | ||
ASSETS: | ||
Available-for-sale debt securities | 569.2 | 557.9 |
Foreign government | ||
ASSETS: | ||
Available-for-sale debt securities | 238.4 | 230.9 |
Corporate | ||
ASSETS: | ||
Available-for-sale debt securities | 8,534.9 | 8,398.1 |
Commercial mortgage-backed (“CMBS”) | ||
ASSETS: | ||
Available-for-sale debt securities | 630.7 | 651.2 |
Residential mortgage-backed (“RMBS”) | ||
ASSETS: | ||
Available-for-sale debt securities | 1,622.9 | 1,932.2 |
Collateralized debt obligations (“CDO”) / collateralized loan obligations (“CLO”) | ||
ASSETS: | ||
Available-for-sale debt securities | 259.9 | 196.9 |
Other asset-backed (“ABS”) | ||
ASSETS: | ||
Available-for-sale debt securities | 256.9 | 268.7 |
Level 3 | ||
ASSETS: | ||
Total assets | 6,310.5 | 6,654.5 |
LIABILITIES: | ||
Total liabilities | 175.7 | 160.7 |
Fair Value, Measurements, Recurring | ||
ASSETS: | ||
Available-for-sale debt securities | 12,547.1 | 12,679.3 |
Available-for-sale equity securities | 168.3 | 179.5 |
Short-term investments | 174.6 | 149.7 |
Derivative assets | 104.1 | 161.3 |
Fair value investments | 213.9 | 235.4 |
Separate account assets | 2,855.2 | 3,020.7 |
Total assets | 16,063.2 | 16,425.9 |
LIABILITIES: | ||
Derivative liabilities | 54.3 | 85.6 |
Total liabilities | 230 | 246.3 |
Deferred compensation liability | 21.1 | 23.5 |
Fair Value, Measurements, Recurring | Debt securities | ||
ASSETS: | ||
Fair value investments | 103.3 | 111.9 |
Fair Value, Measurements, Recurring | Variable Interest Entity, Primary Beneficiary | ||
ASSETS: | ||
Fair value investments | 89.5 | 100 |
Fair Value, Measurements, Recurring | Embedded derivatives | ||
LIABILITIES: | ||
Derivative liabilities | 175.7 | 160.7 |
Fair Value, Measurements, Recurring | U.S. government and agency | ||
ASSETS: | ||
Available-for-sale debt securities | 434.2 | 443.4 |
Fair Value, Measurements, Recurring | State and political subdivision | ||
ASSETS: | ||
Available-for-sale debt securities | 569.2 | 557.9 |
Fair Value, Measurements, Recurring | Foreign government | ||
ASSETS: | ||
Available-for-sale debt securities | 238.4 | 230.9 |
Fair Value, Measurements, Recurring | Corporate | ||
ASSETS: | ||
Available-for-sale debt securities | 8,534.9 | 8,398.1 |
Fair Value, Measurements, Recurring | Commercial mortgage-backed (“CMBS”) | ||
ASSETS: | ||
Available-for-sale debt securities | 630.7 | 651.2 |
Fair Value, Measurements, Recurring | Residential mortgage-backed (“RMBS”) | ||
ASSETS: | ||
Available-for-sale debt securities | 1,622.9 | 1,932.2 |
Fair Value, Measurements, Recurring | Collateralized debt obligations (“CDO”) / collateralized loan obligations (“CLO”) | ||
ASSETS: | ||
Available-for-sale debt securities | 259.9 | 196.9 |
Fair Value, Measurements, Recurring | Other asset-backed (“ABS”) | ||
ASSETS: | ||
Available-for-sale debt securities | 256.9 | 268.7 |
Fair Value, Measurements, Recurring | Level 1 | ||
ASSETS: | ||
Available-for-sale debt securities | 0 | 0 |
Available-for-sale equity securities | 0 | 0 |
Short-term investments | 174.6 | 149.7 |
Derivative assets | 0.2 | 0 |
Fair value investments | 26.1 | 32.4 |
Separate account assets | 2,855.2 | 3,020.7 |
Total assets | 3,056.1 | 3,202.8 |
LIABILITIES: | ||
Derivative liabilities | 0 | 0.5 |
Total liabilities | 0 | 0.5 |
Fair Value, Measurements, Recurring | Level 1 | Variable Interest Entity, Primary Beneficiary | ||
ASSETS: | ||
Fair value investments | 5 | 8.8 |
Fair Value, Measurements, Recurring | Level 1 | Embedded derivatives | ||
LIABILITIES: | ||
Derivative liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | U.S. government and agency | ||
ASSETS: | ||
Available-for-sale debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | State and political subdivision | ||
ASSETS: | ||
Available-for-sale debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Foreign government | ||
ASSETS: | ||
Available-for-sale debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Corporate | ||
ASSETS: | ||
Available-for-sale debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Commercial mortgage-backed (“CMBS”) | ||
ASSETS: | ||
Available-for-sale debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Residential mortgage-backed (“RMBS”) | ||
ASSETS: | ||
Available-for-sale debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Collateralized debt obligations (“CDO”) / collateralized loan obligations (“CLO”) | ||
ASSETS: | ||
Available-for-sale debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Other asset-backed (“ABS”) | ||
ASSETS: | ||
Available-for-sale debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | ||
ASSETS: | ||
Available-for-sale debt securities | 6,583.9 | 6,394.3 |
Available-for-sale equity securities | 0 | 0 |
Short-term investments | 0 | 0 |
Derivative assets | 103.9 | 161.3 |
Fair value investments | 8.8 | 13 |
Separate account assets | 0 | 0 |
Total assets | 6,696.6 | 6,568.6 |
LIABILITIES: | ||
Derivative liabilities | 54.3 | 85.1 |
Total liabilities | 54.3 | 85.1 |
Fair Value, Measurements, Recurring | Level 2 | Embedded derivatives | ||
LIABILITIES: | ||
Derivative liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | U.S. government and agency | ||
ASSETS: | ||
Available-for-sale debt securities | 76.6 | 81.2 |
Fair Value, Measurements, Recurring | Level 2 | State and political subdivision | ||
ASSETS: | ||
Available-for-sale debt securities | 166.3 | 157.7 |
Fair Value, Measurements, Recurring | Level 2 | Foreign government | ||
ASSETS: | ||
Available-for-sale debt securities | 205.8 | 177.3 |
Fair Value, Measurements, Recurring | Level 2 | Corporate | ||
ASSETS: | ||
Available-for-sale debt securities | 4,263.9 | 3,994.2 |
Fair Value, Measurements, Recurring | Level 2 | Commercial mortgage-backed (“CMBS”) | ||
ASSETS: | ||
Available-for-sale debt securities | 601 | 498.4 |
Fair Value, Measurements, Recurring | Level 2 | Residential mortgage-backed (“RMBS”) | ||
ASSETS: | ||
Available-for-sale debt securities | 1,206.4 | 1,461.9 |
Fair Value, Measurements, Recurring | Level 2 | Collateralized debt obligations (“CDO”) / collateralized loan obligations (“CLO”) | ||
ASSETS: | ||
Available-for-sale debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | Other asset-backed (“ABS”) | ||
ASSETS: | ||
Available-for-sale debt securities | 63.9 | 23.6 |
Fair Value, Measurements, Recurring | Level 3 | ||
ASSETS: | ||
Available-for-sale debt securities | 5,963.2 | 6,285 |
Available-for-sale equity securities | 168.3 | 179.5 |
Short-term investments | 0 | 0 |
Derivative assets | 0 | 0 |
Fair value investments | 179 | 190 |
Separate account assets | 0 | 0 |
Total assets | 6,310.5 | 6,654.5 |
LIABILITIES: | ||
Derivative liabilities | 0 | 0 |
Total liabilities | 175.7 | 160.7 |
Fair Value, Measurements, Recurring | Level 3 | Embedded derivatives | ||
LIABILITIES: | ||
Derivative liabilities | 175.7 | 160.7 |
Fair Value, Measurements, Recurring | Level 3 | U.S. government and agency | ||
ASSETS: | ||
Available-for-sale debt securities | 357.6 | 362.2 |
Fair Value, Measurements, Recurring | Level 3 | State and political subdivision | ||
ASSETS: | ||
Available-for-sale debt securities | 402.9 | 400.2 |
Fair Value, Measurements, Recurring | Level 3 | Foreign government | ||
ASSETS: | ||
Available-for-sale debt securities | 32.6 | 53.6 |
Fair Value, Measurements, Recurring | Level 3 | Corporate | ||
ASSETS: | ||
Available-for-sale debt securities | 4,271 | 4,403.9 |
Fair Value, Measurements, Recurring | Level 3 | Commercial mortgage-backed (“CMBS”) | ||
ASSETS: | ||
Available-for-sale debt securities | 29.7 | 152.8 |
Fair Value, Measurements, Recurring | Level 3 | Residential mortgage-backed (“RMBS”) | ||
ASSETS: | ||
Available-for-sale debt securities | 416.5 | 470.3 |
Fair Value, Measurements, Recurring | Level 3 | Collateralized debt obligations (“CDO”) / collateralized loan obligations (“CLO”) | ||
ASSETS: | ||
Available-for-sale debt securities | 259.9 | 196.9 |
Fair Value, Measurements, Recurring | Level 3 | Other asset-backed (“ABS”) | ||
ASSETS: | ||
Available-for-sale debt securities | $ 193 | $ 245.1 |
Fair Value of Financial Instr82
Fair Value of Financial Instruments Fair Value of Financial Instruments - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2015 | Dec. 31, 2014 | |
Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Disposal group, including discontinued operation, available-for-sale securities, debt securities | $ 26.4 | $ 27.8 |
Level 3 | Fair Value, Measurements, Nonrecurring | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Life settlements | $ 18 | |
Discount rate | 17.00% | |
Level 3 | Fair Value, Measurements, Nonrecurring | Minimum | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortality rate | 90.00% | |
Level 3 | Fair Value, Measurements, Nonrecurring | Maximum | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortality rate | 293.00% |
Fair Value of Financial Instr83
Fair Value of Financial Instruments - Corporates Carried on a Recurring Basis (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | $ 12,547.1 | $ 12,679.3 |
Corporate | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 8,534.9 | 8,398.1 |
Fair Value, Measurements, Recurring | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 12,547.1 | 12,679.3 |
Fair Value, Measurements, Recurring | Level 1 | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 6,583.9 | 6,394.3 |
Fair Value, Measurements, Recurring | Level 3 | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 5,963.2 | 6,285 |
Fair Value, Measurements, Recurring | Corporate | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 8,534.9 | 8,398.1 |
Fair Value, Measurements, Recurring | Corporate | Consumer | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 1,830.3 | 1,859.6 |
Fair Value, Measurements, Recurring | Corporate | Energy | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 1,047.8 | 1,007.4 |
Fair Value, Measurements, Recurring | Corporate | Financial services | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 2,626.4 | 2,585.2 |
Fair Value, Measurements, Recurring | Corporate | Capital goods | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 777.6 | 782.9 |
Fair Value, Measurements, Recurring | Corporate | Transportation | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 418.7 | 410.5 |
Fair Value, Measurements, Recurring | Corporate | Utilities | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 1,074.9 | 1,031.5 |
Fair Value, Measurements, Recurring | Corporate | Other | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 759.2 | 721 |
Fair Value, Measurements, Recurring | Corporate | Level 1 | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 0 | 0 |
Fair Value, Measurements, Recurring | Corporate | Level 1 | Consumer | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 0 | 0 |
Fair Value, Measurements, Recurring | Corporate | Level 1 | Energy | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 0 | 0 |
Fair Value, Measurements, Recurring | Corporate | Level 1 | Financial services | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 0 | 0 |
Fair Value, Measurements, Recurring | Corporate | Level 1 | Capital goods | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 0 | 0 |
Fair Value, Measurements, Recurring | Corporate | Level 1 | Transportation | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 0 | 0 |
Fair Value, Measurements, Recurring | Corporate | Level 1 | Utilities | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 0 | 0 |
Fair Value, Measurements, Recurring | Corporate | Level 1 | Other | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 0 | 0 |
Fair Value, Measurements, Recurring | Corporate | Level 2 | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 4,263.9 | 3,994.2 |
Fair Value, Measurements, Recurring | Corporate | Level 2 | Consumer | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 625.5 | 593 |
Fair Value, Measurements, Recurring | Corporate | Level 2 | Energy | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 615.5 | 534.6 |
Fair Value, Measurements, Recurring | Corporate | Level 2 | Financial services | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 1,716 | 1,617.3 |
Fair Value, Measurements, Recurring | Corporate | Level 2 | Capital goods | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 420.2 | 398.1 |
Fair Value, Measurements, Recurring | Corporate | Level 2 | Transportation | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 114.4 | 104.7 |
Fair Value, Measurements, Recurring | Corporate | Level 2 | Utilities | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 355.3 | 348.1 |
Fair Value, Measurements, Recurring | Corporate | Level 2 | Other | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 417 | 398.4 |
Fair Value, Measurements, Recurring | Corporate | Level 3 | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 4,271 | 4,403.9 |
Fair Value, Measurements, Recurring | Corporate | Level 3 | Consumer | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 1,204.8 | 1,266.6 |
Fair Value, Measurements, Recurring | Corporate | Level 3 | Energy | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 432.3 | 472.8 |
Fair Value, Measurements, Recurring | Corporate | Level 3 | Financial services | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 910.4 | 967.9 |
Fair Value, Measurements, Recurring | Corporate | Level 3 | Capital goods | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 357.4 | 384.8 |
Fair Value, Measurements, Recurring | Corporate | Level 3 | Transportation | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 304.3 | 305.8 |
Fair Value, Measurements, Recurring | Corporate | Level 3 | Utilities | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | 719.6 | 683.4 |
Fair Value, Measurements, Recurring | Corporate | Level 3 | Other | ||
Fair Values of Corporates by Level and Sector: | ||
Available-for-sale debt securities, at fair value (cost of $12,056.0 and $11,978.0) | $ 342.2 | $ 322.6 |
Fair Value of Financial Instr84
Fair Value of Financial Instruments - Changes in Fair Value of Level 3 Financial Assets (Details) - Level 3 - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, beginning of period | $ 6,469.9 | $ 5,859.7 | $ 6,654.5 | $ 5,950.2 |
Purchases | 312.7 | 105.8 | 517.6 | 362.1 |
Sales | (262.8) | (244.1) | (361.7) | (369.7) |
Transfers into Level 3 | 59 | 25.6 | 87.2 | 15.8 |
Transfers out of Level 3 | (83.2) | (9.3) | (507.2) | (197.7) |
Realized & unrealized gains (losses) included in income | (28) | 6.6 | (9) | 5.7 |
Unrealized gains (losses) included in OCI | (157.1) | 118.1 | (70.9) | 96 |
Balance, end of period | 6,310.5 | 5,862.4 | 6,310.5 | 5,862.4 |
U.S. government and agency | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, beginning of period | 366.4 | 340.4 | 362.2 | 327.2 |
Purchases | 0 | 0 | 9.9 | 62.8 |
Sales | (4.3) | (23.1) | (6.4) | (28.3) |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Realized & unrealized gains (losses) included in income | 0 | 0 | 0 | 0 |
Unrealized gains (losses) included in OCI | (4.5) | 56.1 | (8.1) | 11.7 |
Balance, end of period | 357.6 | 373.4 | 357.6 | 373.4 |
State and political subdivision | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, beginning of period | 405.4 | 276.8 | 400.2 | 269.1 |
Purchases | 15.3 | 6.6 | 28.9 | 9.5 |
Sales | (3.4) | (2.7) | (5.6) | (3.3) |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | (14) | 0 |
Realized & unrealized gains (losses) included in income | 0 | 0 | 0 | 0 |
Unrealized gains (losses) included in OCI | (14.4) | 4.7 | (6.6) | 10.1 |
Balance, end of period | 402.9 | 285.4 | 402.9 | 285.4 |
Foreign government | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, beginning of period | 32.4 | 16.1 | 53.6 | 15.9 |
Purchases | 1 | 0 | 0 | 0 |
Sales | (1) | 0 | 0 | 0 |
Transfers into Level 3 | 0 | 0 | 4.2 | 0 |
Transfers out of Level 3 | 0 | 0 | (26.7) | 0 |
Realized & unrealized gains (losses) included in income | 0 | 0 | 0 | 0 |
Unrealized gains (losses) included in OCI | 0.2 | 0.4 | 1.5 | 0.6 |
Balance, end of period | 32.6 | 16.5 | 32.6 | 16.5 |
Corporate | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, beginning of period | 4,354.1 | 3,940.3 | 4,403.9 | 3,893.8 |
Purchases | 196.3 | 70.5 | 362 | 235.8 |
Sales | (161.9) | (137) | (221.8) | (218.4) |
Transfers into Level 3 | 59 | 25.6 | 74.5 | 15.8 |
Transfers out of Level 3 | (40.1) | (4.6) | (302.1) | (131.4) |
Realized & unrealized gains (losses) included in income | (3.1) | 2.5 | (1) | 4.3 |
Unrealized gains (losses) included in OCI | (133.3) | (25.8) | (44.5) | 71.6 |
Balance, end of period | 4,271 | 3,871.5 | 4,271 | 3,871.5 |
Commercial mortgage-backed (“CMBS”) | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, beginning of period | 35.2 | 52.1 | 152.8 | 113.7 |
Purchases | 10.3 | 0 | 10.3 | 0 |
Sales | (5.2) | (20.8) | (5.3) | (21.8) |
Transfers into Level 3 | 0 | 0 | 8.5 | 0 |
Transfers out of Level 3 | (10.1) | (0.2) | (132.5) | (60.3) |
Realized & unrealized gains (losses) included in income | (0.1) | 0 | (0.1) | (0.1) |
Unrealized gains (losses) included in OCI | (0.4) | 0.5 | (4) | 0.1 |
Balance, end of period | 29.7 | 31.6 | 29.7 | 31.6 |
Residential mortgage-backed (“RMBS”) | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, beginning of period | 481.6 | 535.2 | 470.3 | 552.7 |
Purchases | 0.2 | 0.7 | 0.6 | 1.3 |
Sales | (32.3) | (19.3) | (49.9) | (37.2) |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | (29.7) | (4.5) | 0 | (4.3) |
Realized & unrealized gains (losses) included in income | 0 | (0.3) | (0.2) | 1.6 |
Unrealized gains (losses) included in OCI | (3.3) | (0.5) | (4.3) | (2.8) |
Balance, end of period | 416.5 | 511.3 | 416.5 | 511.3 |
Collateralized debt obligations (“CDO”) / collateralized loan obligations (“CLO”) | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, beginning of period | 205.5 | 236.1 | 196.9 | 224.1 |
Purchases | 71.3 | 22 | 90.4 | 39.9 |
Sales | (16) | (20.8) | (29) | (33.8) |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Realized & unrealized gains (losses) included in income | 1.2 | 0.1 | 1.7 | 1.8 |
Unrealized gains (losses) included in OCI | (2.1) | 1.6 | (0.1) | 7 |
Balance, end of period | 259.9 | 239 | 259.9 | 239 |
Other asset-backed (“ABS”) | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, beginning of period | 208.9 | 229.4 | 245.1 | 247.7 |
Purchases | 4.5 | 0 | 4.5 | 0 |
Sales | (14.1) | (8.9) | (21.1) | (21.7) |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | (3.3) | 0 | (31.9) | (1.7) |
Realized & unrealized gains (losses) included in income | 0.2 | 1.2 | (0.2) | 1.8 |
Unrealized gains (losses) included in OCI | (3.2) | 1.5 | (3.4) | (2.9) |
Balance, end of period | 193 | 223.2 | 193 | 223.2 |
Debt securities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, beginning of period | 6,089.5 | 5,626.4 | 6,285 | 5,644.2 |
Purchases | 298.9 | 99.8 | 506.6 | 349.3 |
Sales | (238.2) | (232.6) | (339.1) | (364.5) |
Transfers into Level 3 | 59 | 25.6 | 87.2 | 15.8 |
Transfers out of Level 3 | (83.2) | (9.3) | (507.2) | (197.7) |
Realized & unrealized gains (losses) included in income | (1.8) | 3.5 | 0.2 | 9.4 |
Unrealized gains (losses) included in OCI | (161) | 38.5 | (69.5) | 95.4 |
Balance, end of period | 5,963.2 | 5,551.9 | 5,963.2 | 5,551.9 |
Equity securities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, beginning of period | 175.5 | 63 | 179.5 | 135.2 |
Purchases | 13.8 | 6 | 10.6 | 12.8 |
Sales | (18) | 0 | (14.2) | (1.4) |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Realized & unrealized gains (losses) included in income | (6.9) | (0.5) | (6.2) | 0 |
Unrealized gains (losses) included in OCI | 3.9 | 79.6 | (1.4) | 1.5 |
Balance, end of period | 168.3 | 148.1 | 168.3 | 148.1 |
Short-term investments | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, beginning of period | 0 | 0 | 0 | 0.9 |
Purchases | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Realized & unrealized gains (losses) included in income | 0 | 0 | 0 | 0 |
Unrealized gains (losses) included in OCI | 0 | 0 | 0 | (0.9) |
Balance, end of period | 0 | 0 | 0 | 0 |
Fair value investments | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, beginning of period | 204.9 | 170.3 | 190 | 169.9 |
Purchases | 0 | 0 | 0.4 | 0 |
Sales | (6.6) | (11.5) | (8.4) | (3.8) |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Realized & unrealized gains (losses) included in income | (19.3) | 3.6 | (3) | (3.7) |
Unrealized gains (losses) included in OCI | 0 | 0 | 0 | 0 |
Balance, end of period | $ 179 | $ 162.4 | $ 179 | $ 162.4 |
Fair Value of Financial Instr85
Fair Value of Financial Instruments - Changes in Fair Value of Level 3 Financial Liabilities (Details) - Embedded derivatives - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Balance, beginning of period | $ 175.6 | $ 109 | $ 160.7 | $ 87.8 |
Net purchases / settlements | 4.5 | 6.9 | 9.1 | 15.2 |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Realized (gains) losses | (4.4) | 2.2 | 5.9 | 15.1 |
Balance, end of period | $ 175.7 | $ 118.1 | $ 175.7 | $ 118.1 |
Fair Value of Financial Instr86
Fair Value of Financial Instruments - Quantitative Estimates for Level 3 Assets (Details) - Level 3 - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Total assets | $ 6,310.5 | $ 6,654.5 |
U.S. government and agency | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Total assets | 357.6 | 362.2 |
State and political subdivision | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Total assets | 402.9 | 400.2 |
Corporate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Total assets | 4,271 | 4,403.9 |
Other asset-backed (“ABS”) | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Total assets | 193 | 245.1 |
Fair value investments | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Total assets | 179 | 190 |
Discounted cash flow | U.S. government and agency | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Total assets | $ 357.6 | $ 362.2 |
Discounted cash flow | U.S. government and agency | Minimum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield rate | 0.92% | 0.99% |
Discounted cash flow | U.S. government and agency | Maximum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield rate | 4.65% | 4.27% |
Discounted cash flow | U.S. government and agency | Weighted Average | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield rate | 3.33% | 3.17% |
Discounted cash flow | State and political subdivision | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Total assets | $ 212.4 | $ 159.1 |
Discounted cash flow | State and political subdivision | Minimum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield rate | 1.98% | 2.15% |
Discounted cash flow | State and political subdivision | Maximum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield rate | 4.75% | 4.50% |
Discounted cash flow | State and political subdivision | Weighted Average | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield rate | 3.42% | 3.22% |
Discounted cash flow | Corporate | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Total assets | $ 3,238.1 | $ 3,116.6 |
Discounted cash flow | Corporate | Minimum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield rate | 0.92% | 0.93% |
Discounted cash flow | Corporate | Maximum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield rate | 7.31% | 6.88% |
Discounted cash flow | Corporate | Weighted Average | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield rate | 3.37% | 3.24% |
Discounted cash flow | Other asset-backed (“ABS”) | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Total assets | $ 36.6 | $ 39.3 |
Discounted cash flow | Other asset-backed (“ABS”) | Minimum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield rate | 0.50% | 0.60% |
Discounted cash flow | Other asset-backed (“ABS”) | Maximum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield rate | 3.05% | 4.00% |
Discounted cash flow | Other asset-backed (“ABS”) | Weighted Average | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield rate | 1.76% | 1.92% |
Discounted cash flow | Fair value investments | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Total assets | $ 6.5 | $ 6.3 |
Probability of default | 0.16% | 0.17% |
Recovery rate | 44.00% | 44.00% |
Fair Value of Financial Instr87
Fair Value of Financial Instruments - Quantitative Estimates for Level 3 Liabilities (Details) - Level 3 - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Fair Value, Balance | $ 175.7 | $ 160.7 |
Embedded derivatives | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Fair Value, Balance | 175.7 | 160.7 |
Budget method | Embedded derivatives | Fixed Annuity | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Fair Value, Balance | $ 172.3 | $ 153.9 |
CSA | 3.32% | 3.08% |
Budget method | Embedded derivatives | Fixed Annuity | Minimum | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Swap curve | 0.31% | 0.24% |
Mortality rate | 97.00% | 97.00% |
Lapse rate | 0.04% | 0.04% |
Budget method | Embedded derivatives | Fixed Annuity | Maximum | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Swap curve | 2.80% | 2.55% |
Mortality rate | 105.00% | 105.00% |
Lapse rate | 46.44% | 46.44% |
Risk neutral stochastic valuation methodology | Embedded derivatives | Guaranteed Minimum Accumulation Benefit, Guaranteed Minimum Withdrawal Benefit, and Combination Rider | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Fair Value, Balance | $ 3.4 | $ 6.8 |
Mortality rate | 105.00% | 105.00% |
CSA | 3.32% | 3.08% |
Risk neutral stochastic valuation methodology | Embedded derivatives | Guaranteed Minimum Accumulation Benefit, Guaranteed Minimum Withdrawal Benefit, and Combination Rider | Minimum | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Swap curve | 0.25% | 0.21% |
Lapse rate | 0.00% | 0.00% |
Volatility surface | 8.16% | 9.89% |
Risk neutral stochastic valuation methodology | Embedded derivatives | Guaranteed Minimum Accumulation Benefit, Guaranteed Minimum Withdrawal Benefit, and Combination Rider | Maximum | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Swap curve | 3.02% | 2.76% |
Lapse rate | 40.00% | 40.00% |
Volatility surface | 61.32% | 67.34% |
Fair Value of Financial Instr88
Fair Value of Financial Instruments - Level 3 Assets and Liabilities by Pricing Source (Details) - Level 3 - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | $ 6,310.5 | $ 6,654.5 |
Total liabilities | 175.7 | 160.7 |
Embedded derivatives | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | 175.7 | 160.7 |
U.S. government and agency | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 357.6 | 362.2 |
State and political subdivision | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 402.9 | 400.2 |
Foreign government | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 32.6 | 53.6 |
Corporate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 4,271 | 4,403.9 |
Commercial mortgage-backed (“CMBS”) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 29.7 | 152.8 |
Residential mortgage-backed (“RMBS”) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 416.5 | 470.3 |
Collateralized debt obligations (“CDO”) / collateralized loan obligations (“CLO”) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 259.9 | 196.9 |
Other asset-backed (“ABS”) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 193 | 245.1 |
Debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 5,963.2 | 6,285 |
Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 168.3 | 179.5 |
Fair value investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 179 | 190 |
Internal Pricing Source | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 3,851.2 | 3,683.5 |
Total liabilities | 175.7 | 160.7 |
Internal Pricing Source | Embedded derivatives | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | 175.7 | 160.7 |
Internal Pricing Source | U.S. government and agency | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 357.6 | 362.2 |
Internal Pricing Source | State and political subdivision | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 212.4 | 159.1 |
Internal Pricing Source | Foreign government | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | 0 |
Internal Pricing Source | Corporate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 3,238.1 | 3,116.6 |
Internal Pricing Source | Commercial mortgage-backed (“CMBS”) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | 0 |
Internal Pricing Source | Residential mortgage-backed (“RMBS”) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | 0 |
Internal Pricing Source | Collateralized debt obligations (“CDO”) / collateralized loan obligations (“CLO”) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | 0 |
Internal Pricing Source | Other asset-backed (“ABS”) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 36.6 | 39.3 |
Internal Pricing Source | Debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 3,844.7 | 3,677.2 |
Internal Pricing Source | Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | 0 |
Internal Pricing Source | Fair value investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 6.5 | 6.3 |
External Pricing Source | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 2,459.3 | 2,971 |
Total liabilities | 0 | 0 |
External Pricing Source | Embedded derivatives | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | 0 | 0 |
External Pricing Source | U.S. government and agency | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | 0 |
External Pricing Source | State and political subdivision | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 190.5 | 241.1 |
External Pricing Source | Foreign government | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 32.6 | 53.6 |
External Pricing Source | Corporate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 1,032.9 | 1,287.3 |
External Pricing Source | Commercial mortgage-backed (“CMBS”) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 29.7 | 152.8 |
External Pricing Source | Residential mortgage-backed (“RMBS”) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 416.5 | 470.3 |
External Pricing Source | Collateralized debt obligations (“CDO”) / collateralized loan obligations (“CLO”) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 259.9 | 196.9 |
External Pricing Source | Other asset-backed (“ABS”) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 156.4 | 205.8 |
External Pricing Source | Debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 2,118.5 | 2,607.8 |
External Pricing Source | Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 168.3 | 179.5 |
External Pricing Source | Fair value investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | $ 172.5 | $ 183.7 |
Fair Value of Financial Instr89
Fair Value of Financial Instruments - Financial Instruments Not Carried at Fair Value (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Level 3 | Reported Value Measurement [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Policy loans | $ 2,360.7 | $ 2,352.1 |
Life settlements | 18 | 22.4 |
Investment contracts | 4,220.8 | 3,955 |
Level 3 | Reported Value Measurement [Member] | 7.15% Surplus Notes | Surplus Note | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 126.2 | 126.2 |
Level 3 | Estimate of Fair Value Measurement [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Policy loans | 2,347.4 | 2,339.2 |
Life settlements | 18 | 17.4 |
Investment contracts | 4,222.2 | 3,957.3 |
Level 3 | Estimate of Fair Value Measurement [Member] | 7.15% Surplus Notes | Surplus Note | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 91.2 | 95.8 |
Level 2 | Reported Value Measurement [Member] | 7.45% Senior Unsecured Bonds | Unsecured Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 252.7 | 252.7 |
Level 2 | Estimate of Fair Value Measurement [Member] | 7.45% Senior Unsecured Bonds | Unsecured Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 205.6 | $ 248 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Oct. 31, 2014 | |
Operating Loss Carryforwards [Line Items] | ||||||
Income tax expense | $ 13 | $ 19.6 | $ 15.2 | $ 24.4 | ||
Current income tax benefit | 14.5 | 13.2 | ||||
Deferred income tax expense (benefit) | 1.5 | |||||
Deferred income taxes, net | 51.6 | 51.6 | $ 34.2 | |||
Net increase in the deferred tax asset valuation allowance recognized | 6 | (25) | ||||
Decrease in deferred tax assets | 22.9 | 17.4 | ||||
Parent Company | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Amount of funds in intercompany tax escrow | 78.9 | $ 78.9 | ||||
Increase in restricted cash | $ 10.8 | $ 10.8 | ||||
Domestic Tax Authority | Internal Revenue Service (IRS) | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Income tax expense | $ 2 | $ 2 |
Accumulated Other Comprehensi91
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Accumulated other comprehensive income (loss), beginning balance | $ 326.6 | |||
Accumulated other comprehensive income (loss), beginning balance | $ 199.2 | 199.2 | ||
Net Unrealized Gains / (Losses) on Investments where Credit-related OTTI was Recognized | Available-for-sale Securities | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Accumulated other comprehensive income (loss), beginning balance | 8.2 | $ 10.2 | 9.9 | $ 7 |
Change in component during the period before reclassifications | (1.7) | 3.1 | (2.2) | 9.3 |
Amounts reclassified from AOCI | (0.3) | 0.4 | (1.5) | (2.6) |
Accumulated other comprehensive income (loss), beginning balance | 6.2 | 13.7 | 6.2 | 13.7 |
Net Unrealized Gains / (Losses) on Investments where Credit-related OTTI was Recognized | Other Investments | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Accumulated other comprehensive income (loss), beginning balance | 52.9 | 14.7 | 54.8 | 26.9 |
Change in component during the period before reclassifications | (22.1) | 19.2 | (25.7) | 10.2 |
Amounts reclassified from AOCI | (6.2) | (4.2) | (4.5) | (7.4) |
Accumulated other comprehensive income (loss), beginning balance | 24.6 | 29.7 | 24.6 | 29.7 |
Net Pension Liability Adjustments | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Accumulated other comprehensive income (loss), beginning balance | (297.7) | (217.2) | (299.1) | (218.9) |
Change in component during the period before reclassifications | 0.1 | 0.7 | 0.1 | 1.4 |
Amounts reclassified from AOCI | 1.6 | 1 | 3 | 2 |
Accumulated other comprehensive income (loss), beginning balance | (296) | (215.5) | (296) | (215.5) |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS): | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Accumulated other comprehensive income (loss), beginning balance | (236.6) | (192.3) | (234.4) | (185) |
Change in component during the period before reclassifications | (23.7) | 23 | (27.8) | 20.9 |
Amounts reclassified from AOCI | (4.9) | (2.8) | (3) | (8) |
Accumulated other comprehensive income (loss), beginning balance | $ (265.2) | $ (172.1) | $ (265.2) | $ (172.1) |
Accumulated Other Comprehensi92
Accumulated Other Comprehensive Income (Loss) Reclassification Out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Net realized capital gains (losses) | $ (2.1) | $ 4.2 | $ (18.2) | $ (22.7) |
Total before income taxes | (34.8) | (41.4) | (109.5) | (73.8) |
Income tax expense (benefit) | (13) | (19.6) | (15.2) | (24.4) |
Net income (loss) | (22.4) | (22.4) | (95.4) | (50.6) |
Reclassification out of Accumulated Other Comprehensive Income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Net income (loss) | 4.9 | 2.8 | 3 | 8 |
Net Unrealized Gains / (Losses) on Investments where Credit-related OTTI was Recognized | Reclassification out of Accumulated Other Comprehensive Income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Net realized capital gains (losses) | 0.5 | (0.6) | 2.4 | 4 |
Total before income taxes | 0.5 | (0.6) | 2.4 | 4 |
Income tax expense (benefit) | 0.2 | (0.2) | 0.9 | 1.4 |
Net income (loss) | 0.3 | (0.4) | 1.5 | 2.6 |
Net-Unrealized Gains / (Losses) on All Other Investments | Reclassification out of Accumulated Other Comprehensive Income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Net realized capital gains (losses) | 9.6 | 6.4 | 6.9 | 11.2 |
Total before income taxes | 9.6 | 6.4 | 6.9 | 11.2 |
Income tax expense (benefit) | 3.4 | 2.2 | 2.4 | 3.8 |
Net income (loss) | 6.2 | 4.2 | 4.5 | 7.4 |
Amortization of actuarial gains (losses) | Reclassification out of Accumulated Other Comprehensive Income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Reclassification from accumulated other comprehensive income, current period, before tax | 2.7 | 1.9 | 5.1 | 3.8 |
Amortization of prior service costs | Reclassification out of Accumulated Other Comprehensive Income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Reclassification from accumulated other comprehensive income, current period, before tax | 0.3 | 0.3 | 0.6 | 0.6 |
Net Pension Liability Adjustments | Reclassification out of Accumulated Other Comprehensive Income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Reclassification from accumulated other comprehensive income, current period, before tax | (2.4) | (1.6) | (4.5) | (3.2) |
Income tax expense (benefit) | (0.8) | (0.6) | (1.5) | (1.2) |
Net income (loss) | $ (1.6) | $ (1) | $ (3) | $ (2) |
Employee Benefit Plans and Em93
Employee Benefit Plans and Employment Agreements Components of Pension Benefit Costs (Details) - Pension Plan - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 0.8 | $ 0.6 | $ 1.6 | $ 1.2 |
Interest cost | 8.6 | 9.1 | 17.2 | 18.2 |
Expected return on plan assets | (9.8) | (9.5) | (19.8) | (19) |
Net loss amortization | 2.7 | 2 | 5.2 | 4 |
Pension benefit cost | $ 2.3 | $ 2.2 | $ 4.2 | $ 4.4 |
Employee Benefit Plans and Em94
Employee Benefit Plans and Employment Agreements Components of Other Postretirement Benefit Costs (Details) - Other Postretirement Benefit Plan - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 0 | $ 0 | $ 0 | $ 0 |
Interest cost | 0.3 | 0.4 | 0.7 | 0.8 |
Net loss amortization | 0 | (0.1) | (0.1) | (0.2) |
Prior service cost amortization | (0.3) | (0.3) | (0.6) | (0.6) |
Pension benefit cost | $ 0 | $ 0 | $ 0 | $ 0 |
Employee Benefit Plans and Em95
Employee Benefit Plans and Employment Agreements - Narrative (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Compensation and Retirement Disclosure [Abstract] | ||||
Amortization of prior service costs included in OCI | $ 1.1 | $ 2 | ||
Savings plan cost incurred | $ 0.9 | $ 1.1 | $ 2.4 | $ 2.5 |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Weighted-average common shares outstanding | 5,751 | 5,749 | 5,751 | 5,745 |
Weighted-average effect of dilutive potential common shares: | ||||
Incremental common shares attributable to share based payment arrangements including antidilutive securities excluded from computation of earnings per share | 24 | 5 | 12 | 12 |
Less: Potential common shares excluded from calculation due to net losses | 24 | 5 | 12 | 12 |
Dilutive potential common shares | 0 | 0 | 0 | 0 |
Weighted-average common shares outstanding, including dilutive potential common shares | 5,751 | 5,749 | 5,751 | 5,745 |
Restricted stock units | ||||
Weighted-average effect of dilutive potential common shares: | ||||
Incremental common shares attributable to share based payment arrangements including antidilutive securities excluded from computation of earnings per share | 24 | 3 | 12 | 10 |
Employee stock options | ||||
Weighted-average effect of dilutive potential common shares: | ||||
Incremental common shares attributable to share based payment arrangements including antidilutive securities excluded from computation of earnings per share | 0 | 2 | 0 | 2 |
Segment Information on Revenues
Segment Information on Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | $ 422 | $ 413.1 | $ 827.4 | $ 812.1 |
Fee income | 135.2 | 134.2 | 269 | 269 |
Operating Segments | Life and Annuity | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 414.7 | 406.5 | 814.5 | 800.8 |
Operating Segments | Saybrus Partners | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 11.1 | 9.6 | 20.1 | 16.9 |
Fee income | 3.8 | 3 | 7.2 | 5.7 |
Intersegment Eliminations | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | $ 3.8 | $ 3 | $ 7.2 | $ 5.6 |
Results of Operations by Segmen
Results of Operations by Segment as Reconciled to Consolidated Net Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Segment Reporting Information [Line Items] | ||||
Total before income taxes | $ (34.8) | $ (41.4) | $ (109.5) | $ (73.8) |
Less: Applicable income tax expense (benefit) | 13 | 19.6 | 15.2 | 24.4 |
Income (loss) from discontinued operations, net of income taxes | (0.6) | (0.6) | (1.1) | (1.2) |
Net realized gains (losses) | (2.1) | 4.2 | (18.2) | (22.7) |
Less: Net income (loss) attributable to noncontrolling interests | 0.2 | 0 | 1.2 | (0.1) |
Net income (loss) | (22.6) | (22.4) | (96.6) | (50.5) |
Operating Segments | Life and Annuity | ||||
Segment Reporting Information [Line Items] | ||||
Total before income taxes | (35.4) | (47.5) | (94.8) | (53.3) |
Operating Segments | Saybrus Partners | ||||
Segment Reporting Information [Line Items] | ||||
Total before income taxes | 2.7 | 1.9 | 3.5 | 2.2 |
Segment Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Less: Applicable income tax expense (benefit) | 13 | 19.6 | 15.2 | 24.4 |
Income (loss) from discontinued operations, net of income taxes | (0.6) | (0.6) | (1.1) | (1.2) |
Net realized gains (losses) | (2.1) | 4.2 | (18.2) | (22.7) |
Less: Net income (loss) attributable to noncontrolling interests | $ 0.2 | $ 0 | $ 1.2 | $ (0.1) |
Discontinued Operations (Detail
Discontinued Operations (Details Narrative) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Discontinued operations liabilities | $ 39.9 | $ 39.9 | $ 40.5 | ||
(Loss) from discontinued operations | 0.6 | $ 0.6 | 1.1 | $ 1.2 | |
Reinsurance Operations | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Discontinued operations liabilities | 38.4 | 38.4 | 39.3 | ||
Discontinued operations, reinsurance recoverable | 0.7 | 0.7 | |||
Amount recoverable from retrocessionaires related to paid losses | $ 0.1 | ||||
(Loss) from discontinued operations | $ 0.5 | $ 0.5 | $ 1 | $ 1.1 |
Contingent Liabilities (Details
Contingent Liabilities (Details Narrative) | Apr. 30, 2015USD ($) | Mar. 23, 2015policy | Mar. 31, 2014USD ($) | Jun. 30, 2015caseclaimstate |
COI Rate Adjustments | ||||
Loss Contingencies [Line Items] | ||||
Number of policies due restitution | policy | 7 | |||
SEC Cease-and-Desist Order | Settled Litigation | Payments for Legal Matters | ||||
Loss Contingencies [Line Items] | ||||
Litigation settlement, amount | $ | $ 1,100,000 | |||
United States District Court for the Southern District of New York | Settled Litigation | COI Rate Adjustments | ||||
Loss Contingencies [Line Items] | ||||
Litigation settlement, amount | $ | $ 48,500,000 | |||
Number of pending claims | 4 | |||
United States District Court for the Southern District of New York | Pending Litigation | ||||
Loss Contingencies [Line Items] | ||||
Number of new claims filed | 6 | |||
United States District Court for the Southern District of New York | Pending Litigation | PHL Variable Insurance Company | ||||
Loss Contingencies [Line Items] | ||||
Number of new claims filed | 5 | |||
United States District Court for the Southern District of New York | Pending Litigation | PHL Variable and Phoenix Life | ||||
Loss Contingencies [Line Items] | ||||
Number of new claims filed | 1 | |||
United States District Court for the Southern District of New York | Pending Litigation | COI Rate Adjustments | ||||
Loss Contingencies [Line Items] | ||||
Number of pending claims | claim | 2 | |||
Number of states issuing letters directing to take remedial action | state | 2 |
Other Commitments Narrative (De
Other Commitments Narrative (Details) - USD ($) | Jan. 05, 2015 | Jun. 30, 2015 | Jun. 30, 2014 |
Long-term Purchase Commitment [Line Items] | |||
Purchase of available-for-sale debt securities | $ 1,041,800,000 | $ 871,400,000 | |
Management of Infrastructure | HP Enterprise Services | |||
Long-term Purchase Commitment [Line Items] | |||
Remaining commitments through 2015 | 7,000,000 | ||
Purchase Commitment | |||
Long-term Purchase Commitment [Line Items] | |||
Amount of unfunded commitments expected to be funded | 54,200,000 | ||
Purchase Commitment, Remaining Minimum Amount Committed | 242,700,000 | ||
Commitments to Extend Credit | |||
Long-term Purchase Commitment [Line Items] | |||
Purchase commitment maximum amount | $ 50,000,000 | ||
Commitments to Extend Credit | Investment Grade Bonds | |||
Long-term Purchase Commitment [Line Items] | |||
Purchase of available-for-sale debt securities | 8,000,000 | ||
Commitments to Extend Credit | Investment Grade Bonds | |||
Long-term Purchase Commitment [Line Items] | |||
Purchase Commitment, Remaining Minimum Amount Committed | $ 100,000,000 | ||
Purchase commitments | 24 months | ||
Private Placement | |||
Long-term Purchase Commitment [Line Items] | |||
Purchase Commitment, Remaining Minimum Amount Committed | $ 145,700,000 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | Jul. 16, 2015USD ($) | Jun. 30, 2015USD ($)subsidiary |
Subsequent Event [Line Items] | ||
Number of subsidiaries (subsidiaries) | subsidiary | 3 | |
Phoenix Life Insurance Company | ||
Subsequent Event [Line Items] | ||
Dividends declared to Phoenix | $ 30 | |
Subsequent Event | Phoenix Life Insurance Company | ||
Subsequent Event [Line Items] | ||
Dividends declared to Phoenix | $ 29.9 |