Debt and Equity Securities | NOTE 3. Debt and Equity Securities: Investments in debt securities, classified as available-for-sale, are as follows: Amortized Gross unrealized Estimated (in thousands) gains losses December 31, 2015 U.S. Treasury bonds $ 130,252 $ 421 $ (1,301 ) $ 129,372 Municipal bonds 692,000 12,640 (845 ) 703,795 Foreign government bonds 129,984 1,132 (1,015 ) 130,101 Governmental agency bonds 419,869 1,023 (2,801 ) 418,091 Governmental agency mortgage-backed securities 2,065,728 4,984 (15,039 ) 2,055,673 U.S. corporate debt securities 642,869 4,297 (12,483 ) 634,683 Foreign corporate debt securities 210,162 1,248 (3,778 ) 207,632 $ 4,290,864 $ 25,745 $ (37,262 ) $ 4,279,347 December 31, 2014 U.S. Treasury bonds $ 64,195 $ 968 $ (181 ) $ 64,982 Municipal bonds 577,703 10,981 (1,007 ) 587,677 Foreign government bonds 133,365 1,604 (31 ) 134,938 Governmental agency bonds 198,330 1,562 (2,018 ) 197,874 Governmental agency mortgage-backed securities 1,812,766 8,491 (9,095 ) 1,812,162 Non-agency mortgage-backed securities 15,949 1,306 (717 ) 16,538 U.S. corporate debt securities 446,630 7,483 (1,984 ) 452,129 Foreign corporate debt securities 183,528 1,681 (1,257 ) 183,952 $ 3,432,466 $ 34,076 $ (16,290 ) $ 3,450,252 Investments in equity securities, classified as available-for-sale, are as follows: Cost Gross unrealized Estimated (in thousands) gains losses December 31, 2015 Preferred stocks $ 18,305 $ 420 $ (3,258 ) $ 15,467 Common stocks 307,429 13,103 (14,714 ) 305,818 $ 325,734 $ 13,523 $ (17,972 ) $ 321,285 December 31, 2014 Preferred stocks $ 14,976 $ 596 $ (47 ) $ 15,525 Common stocks 378,938 16,680 (8,731 ) 386,887 $ 393,914 $ 17,276 $ (8,778 ) $ 402,412 Sales of debt and equity securities resulted in realized gains of $8.7 million, $34.1 million and $17.2 million and realized losses of $10.0 million, $9.1 million and $15.5 million for the years ended December 31, 2015, 2014 and 2013, respectively. Gross unrealized losses on investments in debt and equity securities are as follows: Less than 12 months 12 months or longer Total (in thousands) Estimated Unrealized Estimated Unrealized Estimated Unrealized December 31, 2015 Debt securities: U.S. Treasury bonds $ 105,701 $ (1,285 ) $ 1,654 $ (16 ) $ 107,355 $ (1,301 ) Municipal bonds 133,465 (733 ) 13,190 (112 ) 146,655 (845 ) Foreign government bonds 13,601 (890 ) 267 (125 ) 13,868 (1,015 ) Governmental agency bonds 191,035 (2,497 ) 18,237 (304 ) 209,272 (2,801 ) Governmental agency mortgage-backed securities 1,096,301 (9,424 ) 213,020 (5,615 ) 1,309,321 (15,039 ) U.S. corporate debt securities 361,842 (11,272 ) 13,511 (1,211 ) 375,353 (12,483 ) Foreign corporate debt securities 102,801 (2,725 ) 11,246 (1,053 ) 114,047 (3,778 ) Total debt securities 2,004,746 (28,826 ) 271,125 (8,436 ) 2,275,871 (37,262 ) Equity securities 191,248 (12,068 ) 31,974 (5,904 ) 223,222 (17,972 ) Total $ 2,195,994 $ (40,894 ) $ 303,099 $ (14,340 ) $ 2,499,093 $ (55,234 ) December 31, 2014 Debt securities: U.S. Treasury bonds $ 8,122 $ (27 ) $ 15,124 $ (154 ) $ 23,246 $ (181 ) Municipal bonds 137,755 (689 ) 19,625 (318 ) 157,380 (1,007 ) Foreign government bonds 5,653 (31 ) — — 5,653 (31 ) Governmental agency bonds 27,479 (88 ) 127,936 (1,930 ) 155,415 (2,018 ) Governmental agency mortgage-backed securities 383,717 (1,612 ) 300,918 (7,483 ) 684,635 (9,095 ) Non-agency mortgage-backed securities — — 5,611 (717 ) 5,611 (717 ) U.S. corporate debt securities 141,636 (1,881 ) 8,191 (103 ) 149,827 (1,984 ) Foreign corporate debt securities 57,005 (1,247 ) 1,492 (10 ) 58,497 (1,257 ) Total debt securities 761,367 (5,575 ) 478,897 (10,715 ) 1,240,264 (16,290 ) Equity securities 208,922 (8,587 ) 2,340 (191 ) 211,262 (8,778 ) Total $ 970,289 $ (14,162 ) $ 481,237 $ (10,906 ) $ 1,451,526 $ (25,068 ) Investments in debt securities at December 31, 2015, by contractual maturities, are as follows: (in thousands) Due in one Due after Due after Due after Total U.S. Treasury bonds Amortized cost $ 25,982 $ 76,874 $ 11,875 $ 15,521 $ 130,252 Estimated fair value $ 25,959 $ 76,462 $ 11,765 $ 15,186 $ 129,372 Municipal bonds Amortized cost $ 47,506 $ 298,071 $ 208,057 $ 138,366 $ 692,000 Estimated fair value $ 47,580 $ 300,859 $ 213,119 $ 142,237 $ 703,795 Foreign government bonds Amortized cost $ 6,169 $ 110,707 $ 5,461 $ 7,647 $ 129,984 Estimated fair value $ 6,199 $ 111,643 $ 5,464 $ 6,795 $ 130,101 Governmental agency bonds Amortized cost $ 31,778 $ 331,052 $ 28,156 $ 28,883 $ 419,869 Estimated fair value $ 31,768 $ 329,700 $ 28,443 $ 28,180 $ 418,091 U.S. corporate debt securities Amortized cost $ 16,569 $ 298,860 $ 264,527 $ 62,913 $ 642,869 Estimated fair value $ 16,711 $ 297,838 $ 259,775 $ 60,359 $ 634,683 Foreign corporate debt securities Amortized cost $ 13,340 $ 92,104 $ 90,555 $ 14,163 $ 210,162 Estimated fair value $ 13,376 $ 91,836 $ 88,310 $ 14,110 $ 207,632 Total debt securities excluding mortgage-backed securities Amortized cost $ 141,344 $ 1,207,668 $ 608,631 $ 267,493 $ 2,225,136 Estimated fair value $ 141,593 $ 1,208,338 $ 606,876 $ 266,867 $ 2,223,674 Total mortgage-backed securities Amortized cost $ 2,065,728 Estimated fair value $ 2,055,673 Total debt securities Amortized cost $ 4,290,864 Estimated fair value $ 4,279,347 Mortgage-backed securities, which include contractual terms to maturity, are not categorized by contractual maturity because borrowers may have the right to call or prepay obligations with, or without, call or prepayment penalties. The table below outlines the composition of the investment portfolio, by credit rating, as of December 31, 2015: A- Ratings or higher BBB+ to BBB- Ratings Non-Investment Grade Total (in thousands, except percentages) Estimated fair value Percentage Estimated fair value Percentage Estimated fair value Percentage Estimated fair value Percentage December 31, 2015 Debt securities: U.S. Treasury bonds $ 129,372 100.0 $ — — $ — — $ 129,372 100.0 Municipal bonds 675,257 95.9 23,188 3.3 5,350 0.8 703,795 100.0 Foreign government bonds 121,975 93.8 7,187 5.5 939 0.7 130,101 100.0 Governmental agency bonds 418,091 100.0 — — — — 418,091 100.0 Governmental agency mortgage-backed securities 2,055,673 100.0 — — — — 2,055,673 100.0 U.S. corporate debt securities 293,413 46.2 167,292 26.4 173,978 27.4 634,683 100.0 Foreign corporate debt securities 113,182 54.5 52,912 25.5 41,538 20.0 207,632 100.0 Total debt securities 3,806,963 88.9 250,579 5.9 221,805 5.2 4,279,347 100.0 Preferred stocks — — 8,850 57.2 6,617 42.8 15,467 100.0 Total $ 3,806,963 88.7 $ 259,429 6.0 $ 228,422 5.3 $ 4,294,814 100.0 The credit ratings in the above table reflect published ratings obtained from Standard & Poor’s Rating Services, DBRS, Inc., Fitch Ratings, Inc. and Moody’s Investor Services, Inc. If a security was rated differently among the rating agencies, the lowest rating was selected. Governmental agency mortgage-backed securities are not rated by any of the ratings agencies; however, these securities have been included in the above table in the A- Ratings or higher category because the payments of principal and interest are guaranteed by the governmental agency that issued the security. As of December 31, 2015, the estimated fair value of total debt securities included $117.8 million of bank loans, of which $111.4 million was non-investment grade; $99.0 million of high yield corporate debt securities, all of which was non-investment grade; and $44.3 million of emerging market debt securities, of which $6.1 million was non-investment grade. The table below outlines the composition of the investment portfolio in an unrealized loss position, by credit rating, as of December 31, 2015: A- Ratings or higher BBB+ to BBB- Ratings Non-Investment Grade Total (in thousands, except percentages) Estimated fair value Percentage Estimated fair value Percentage Estimated fair value Percentage Estimated fair value Percentage December 31, 2015 Debt securities: U.S. Treasury bonds $ 107,355 100.0 $ — — $ — — $ 107,355 100.0 Municipal bonds 136,568 93.2 5,040 3.4 5,047 3.4 146,655 100.0 Foreign government bonds 5,824 42.0 7,105 51.2 939 6.8 13,868 100.0 Governmental agency bonds 209,272 100.0 — — — — 209,272 100.0 Governmental agency mortgage-backed securities 1,309,321 100.0 — — — — 1,309,321 100.0 U.S. corporate debt securities 134,224 35.8 112,373 29.9 128,756 34.3 375,353 100.0 Foreign corporate debt securities 40,094 35.2 38,891 34.1 35,062 30.7 114,047 100.0 Total debt securities 1,942,658 85.3 163,409 7.2 169,804 7.5 2,275,871 100.0 Preferred stocks — — 8,850 58.9 6,164 41.1 15,014 100.0 Total $ 1,942,658 84.8 $ 172,259 7.5 $ 175,968 7.7 $ 2,290,885 100.0 The credit ratings in the above table reflect published ratings obtained from Standard & Poor’s Rating Services, DBRS, Inc., Fitch Ratings, Inc. and Moody’s Investor Services, Inc. If a security was rated differently among the rating agencies, the lowest rating was selected. Governmental agency mortgage-backed securities are not rated by any of the ratings agencies; however, these securities have been included in the above table in the A- Ratings or higher category because the payments of principal and interest are guaranteed by the governmental agency that issued the security. As of December 31, 2015, the estimated fair value of total debt securities in an unrealized loss position included $87.3 million of bank loans, of which $82.9 million was non-investment grade; $75.8 million of high yield corporate debt securities, all of which was non-investment grade; and $39.1 million of emerging market debt securities, of which $6.1 million was non-investment grade. |