Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Feb. 16, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 1-10890 | ||
Entity Registrant Name | HORACE MANN EDUCATORS CORPORATION | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 37-0911756 | ||
Entity Address, Address Line One | 1 Horace Mann Plaza | ||
Entity Address, City or Town | Springfield | ||
Entity Address, State or Province | IL | ||
Entity Address, Postal Zip Code | 62715-0001 | ||
City Area Code | 217 | ||
Local Phone Number | 789-2500 | ||
Title of 12(b) Security | Common Stock, par value $0.001 per share | ||
Trading Symbol | HMN | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,511.2 | ||
Entity Common Stock, Shares Outstanding | 41,351,438 | ||
Documents Incorporated by Reference | Certain portions of the registrant's Proxy Statement for the 2022 Annual Meeting of Shareholders are incorporated by reference into Part III Items 10, 11, 12, 13 and 14 of this Form 10-K as specified in those Items and will be filed with the Securities and Exchange Commission within 120 days after December 31, 2021. | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0000850141 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Name | KPMG LLP |
Auditor Firm ID | 185 |
Auditor Location | Chicago, Illinois |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Investments | ||
Fixed maturity securities, available for sale, at fair value (amortized cost, net 2021, $5,797.7; 2020, $5,788.6) | $ 6,239.3 | $ 6,345.3 |
Equity securities at fair value | 147.2 | 121.6 |
Limited partnership interests | 712.8 | 449 |
Short-term and other investments | 350.2 | 346.3 |
Total investments | 7,449.5 | 7,262.2 |
Cash | 133.7 | 22.3 |
Deferred policy acquisition costs | 248 | 229.8 |
Deposit asset on reinsurance | 2,481.5 | 2,420.9 |
Intangible assets | 145.4 | 158.5 |
Goodwill | 43.5 | 43.5 |
Other assets | 441.3 | 443.2 |
Separate Account (variable annuity) assets | 3,441 | 2,891.4 |
Total assets | 14,383.9 | 13,471.8 |
Policy liabilities | ||
Investment contract and policy reserves | 6,577.8 | 6,445.3 |
Unpaid claims and claim expenses | 425.9 | 438.8 |
Unearned premiums | 255.1 | 264.5 |
Total policy liabilities | 7,258.8 | 7,148.6 |
Other policyholder funds | 945.9 | 751.3 |
Other liabilities | 428.2 | 453.1 |
Short-term debt | 249 | 135 |
Long-term debt | 253.6 | 302.3 |
Separate Account (variable annuity) liabilities | 3,441 | 2,891.4 |
Total liabilities | 12,576.5 | 11,681.7 |
Preferred stock, $0.001 par value, authorized 1,000,000 shares; none issued | 0 | 0 |
Common stock, $0.001 par value, authorized 75,000,000 shares; issued, 2021, 66,436,821; 2020, 66,316,797 | 0.1 | 0.1 |
Additional paid-in capital | 495.3 | 488.4 |
Retained earnings | 1,524.9 | 1,434.6 |
Accumulated other comprehensive income (loss), net of tax: | ||
Net unrealized investment gains on fixed maturity securities | 290.7 | 366.3 |
Net funded status of benefit plans | (10.2) | (11.2) |
Treasury stock, at cost, 2021, 25,043,337 shares; 2020, 24,902,579 shares | (493.4) | (488.1) |
Total shareholders' equity | 1,807.4 | 1,790.1 |
Total liabilities and shareholders' equity | $ 14,383.9 | $ 13,471.8 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | |||
Fixed maturities, available for sale, amortized cost | $ 5,797.7 | $ 5,788.6 | |
Preferred stock, par value (in usd per share) | $ 0.001 | $ 0.001 | |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 | |
Preferred stock, shares issued (in shares) | 0 | 0 | |
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 75,000,000 | 75,000,000 | |
Common stock, shares issued (in shares) | 66,436,821 | 66,316,797 | |
Treasury stock (in shares) | 25,043,337 | 24,902,579 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues | |||
Premiums and contract charges earned | $ 889.6 | $ 930.7 | $ 898 |
Net investment income | 422.5 | 357.6 | 365.1 |
Net investment (losses) gains | (11) | (2.3) | 153.3 |
Other income | 29 | 24.4 | 14.1 |
Total revenues | 1,330.1 | 1,310.4 | 1,430.5 |
Benefits, losses and expenses | |||
Benefits, claims and settlement expenses | 617.7 | 568.9 | 585.1 |
Interest credited | 164.4 | 204.6 | 212.8 |
Operating expenses | 251.5 | 237.8 | 234.6 |
DAC unlocking and amortization expense | 94.7 | 99.9 | 109.2 |
Intangible asset amortization expense | 13 | 14.4 | 8.8 |
Interest expense | 13.9 | 15.2 | 15.6 |
Other expense - goodwill and intangible asset impairments | 0 | 10 | 28 |
Total benefits, losses and expenses | 1,155.2 | 1,150.8 | 1,194.1 |
Income before income taxes | 174.9 | 159.6 | 236.4 |
Income tax expense | 32.1 | 26.3 | 52 |
Net income | $ 142.8 | $ 133.3 | $ 184.4 |
Net income per share | |||
Basic (in usd per share) | $ 3.40 | $ 3.18 | $ 4.42 |
Diluted (in usd per share) | $ 3.39 | $ 3.17 | $ 4.40 |
Weighted average number of shares and equivalent shares | |||
Basic (in shares) | 42 | 41.9 | 41.7 |
Diluted (in shares) | 42.2 | 42 | 41.9 |
Net income | $ 142.8 | $ 133.3 | $ 184.4 |
Other comprehensive income (loss), net of tax: | |||
Change in net unrealized investment gains (losses) on fixed maturity securities | (75.6) | 135.9 | 133.5 |
Change in net funded status of benefit plans | 1 | (0.4) | 1.4 |
Other comprehensive income (loss) | (74.6) | 135.5 | 134.9 |
Comprehensive income | $ 68.2 | $ 268.8 | $ 319.3 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Millions | Total | Common stock | Additional paid-in capital | Retained earnings | Retained earningsCumulative effect of change in accounting principle | Accumulated other comprehensive income (loss), net of tax: | Treasury stock, at cost |
Beginning balance at Dec. 31, 2018 | $ 0.1 | $ 475.1 | $ 1,216.6 | $ 84.7 | $ (485.9) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | $ 184.4 | 184.4 | |||||
Options exercised and conversion of common stock units and restricted stock units | (0.5) | ||||||
Share-based compensation expense | 6.4 | ||||||
Dividends, 2021, $1.24 per share; 2020, $1.20 per share; 2019, $1.15 per share | (48.5) | ||||||
Change in net unrealized investment gains (losses) on fixed maturity securities | 133.5 | 133.5 | |||||
Change in net funded status of benefit plans | 1.4 | 1.4 | |||||
Acquisition of shares | 0 | ||||||
Ending balance at Dec. 31, 2019 | 1,567.3 | 0.1 | 481 | 1,352.5 | $ (0.5) | 219.6 | (485.9) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 133.3 | 133.3 | |||||
Options exercised and conversion of common stock units and restricted stock units | 1.5 | ||||||
Share-based compensation expense | 5.9 | ||||||
Dividends, 2021, $1.24 per share; 2020, $1.20 per share; 2019, $1.15 per share | (50.7) | ||||||
Change in net unrealized investment gains (losses) on fixed maturity securities | 135.9 | 135.9 | |||||
Change in net funded status of benefit plans | (0.4) | (0.4) | |||||
Acquisition of shares | (2.2) | ||||||
Ending balance at Dec. 31, 2020 | 1,790.1 | 0.1 | 488.4 | 1,434.6 | 355.1 | (488.1) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 142.8 | 142.8 | |||||
Options exercised and conversion of common stock units and restricted stock units | (0.8) | ||||||
Share-based compensation expense | 7.7 | ||||||
Dividends, 2021, $1.24 per share; 2020, $1.20 per share; 2019, $1.15 per share | (52.5) | ||||||
Change in net unrealized investment gains (losses) on fixed maturity securities | (75.6) | (75.6) | |||||
Change in net funded status of benefit plans | 1 | 1 | |||||
Acquisition of shares | (5.3) | ||||||
Ending balance at Dec. 31, 2021 | $ 1,807.4 | $ 0.1 | $ 495.3 | $ 1,524.9 | $ 280.5 | $ (493.4) |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | |||
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Cash dividends (in usd per share) | $ 1.24 | $ 1.20 | $ 1.15 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows - operating activities | |||
Net income | $ 142.8 | $ 133.3 | $ 184.4 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Net investment (gains) losses | 11 | 2.3 | (153.3) |
Depreciation and intangible asset amortization | 18.4 | 23.4 | 15.6 |
Share-based compensation expense | 8.4 | 6.7 | 7.3 |
Other expense - goodwill and intangible asset impairments | 0 | 10 | 28 |
Income from equity method investments, net of dividends or distributions | (41.5) | (2.7) | (9.1) |
Changes in: | |||
Accrued investment income | 0.8 | (1.6) | 46.9 |
Insurance liabilities | 46.9 | 69.9 | (96.8) |
Reinsurance recoverables | (1.5) | 1.6 | 22 |
Income tax liabilities | 8.5 | 8.3 | 28.8 |
Other operating assets and liabilities | 8.1 | 0.6 | 47.4 |
Other | 3 | 8 | 6.4 |
Net cash provided by operating activities | 204.9 | 259.8 | 127.6 |
Fixed maturity securities | |||
Purchases | (1,459) | (1,439.7) | (1,058.7) |
Sales | 578.2 | 472.9 | 805.9 |
Maturities, paydowns, calls and redemptions | 873.3 | 640.3 | 799.5 |
Equity securities | |||
Purchases | (46.1) | (37.4) | (15.6) |
Sales and repayments | 4.7 | 12.7 | 33.5 |
Limited partnership interests | |||
Purchases | (320.6) | (98.6) | (129.4) |
Sales | 86.5 | 30.9 | 91.5 |
Change in short-term and other investments, net | (19) | 12.1 | (49.3) |
Acquisition of businesses, net of cash acquired | 0 | 0 | (421.5) |
Net cash (used in) provided by investing activities | (302) | (406.8) | 55.9 |
Cash flows - financing activities | |||
Dividends paid to shareholders | (51.4) | (49.6) | (47.3) |
Principal borrowings on Bank Credit Facility | 114 | 0 | 135 |
FHLB borrowings | 5 | 4 | 0 |
Principal repayment on FHLB borrowings | (54) | 0 | 0 |
Acquisition of treasury stock | (5.3) | (2.2) | 0 |
Proceeds from exercise of stock options | 0.3 | 2.4 | 1.7 |
Withholding tax payments on RSUs tendered | (2) | (2.3) | (3.7) |
Annuity contracts: variable, fixed and FHLB funding agreements | |||
Deposits | 1,060.4 | 578.9 | 637.5 |
Benefits, withdrawals and net transfers to Separate Account (variable annuity) assets | (462.7) | (378.6) | (419) |
Principal repayment on FHLB funding agreements | (362) | 0 | (305) |
Life policy accounts | |||
Deposits | 8.9 | 9 | 9.4 |
Withdrawals and surrenders | (3.8) | (3.9) | (3.5) |
Change in deposit asset on reinsurance | (39.2) | (21.2) | (150.4) |
Change in book overdrafts | 0.3 | 7.3 | (24.6) |
Net cash provided by (used in) financing activities | 208.5 | 143.8 | (169.9) |
Net increase (decrease) in cash | 111.4 | (3.2) | 13.6 |
Cash at beginning of year | 22.3 | 25.5 | 11.9 |
Cash at end of year | $ 133.7 | $ 22.3 | $ 25.5 |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies Business Horace Mann Educators Corporation is a holding company for insurance subsidiaries that market and underwrite personal lines of property and casualty insurance products (primarily personal lines auto and property insurance), supplemental insurance products (primarily cancer, heart, hospital, supplemental disability and accident coverages), retirement products (primarily tax-qualified fixed and variable annuities) and life insurance products, primarily to K-12 teachers, administrators and other employees of public schools and their families (collectively, HMEC, the Company or Horace Mann). Basis of Presentation The accompanying audited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and with the rules and regulations of the Securities and Exchange Commission (SEC). The Company has reclassified the presentation of certain prior period information to conform to the current year's presentation. Consolidation All intercompany transactions and balances between HMEC and its subsidiaries and affiliates have been eliminated. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. The most significant critical accounting estimates include valuation of hard-to-value fixed maturity securities, evaluation of credit loss impairments for fixed maturity securities, evaluation of goodwill and intangible assets for impairment, valuation of annuity and life deferred policy acquisition costs, valuation of liabilities for property and casualty unpaid claims and claim expenses and valuation of certain investment contracts and policy reserves. Investments Fixed Maturity Securities The Company invests predominantly in fixed maturity securities. Fixed maturity securities include bonds, asset-backed securities (ABS), mortgage-backed securities (MBS), other structured securities and redeemable preferred stocks. MBS includes residential and commercial mortgage-backed securities. Fixed maturity securities, which may be sold prior to their contractual maturity, are designated as available for sale (AFS) and are carried at fair value of which a portion represent securities that are hard-to-value. See Note 4 – Fair Value of Financial Instruments – Investments for a detailed description of how the Company estimates fair value for its fixed maturity securities portfolio including hard-to-value securities. An adjustment for net unrealized investment gains (losses) on all fixed maturity securities available for sale and carried at fair value, is recognized as a separate component of accumulated other comprehensive income (AOCI) within shareholders’ equity, net of applicable deferred taxes and the related impact on deferred policy acquisition costs (DAC) associated with annuity contracts and life insurance products with account values that would have occurred if the securities had been sold at their aggregate fair value and the proceeds reinvested at current yields. The Company excludes accrued interest receivable from the amortized cost basis of its AFS fixed maturity securities. Equity Securities Equity securities primarily include common stocks, exchange traded and mutual funds and non-redeemable preferred stocks. Certain exchange traded and mutual funds have fixed maturity securities as their underlying investments. Equity securities are carried at fair value and have readily determinable fair values. Limited Partnership Interests Investments in limited partnership interests are accounted for using the equity method of accounting (EMA) and include interests in commercial mortgage funds, private equity funds, infrastructure debt funds, infrastructure equity funds and other funds. Short-Term and Other Investments Short-term investments, including money market funds, commercial paper, U.S. Treasury bills and other short-term investments, are carried at fair value. Other investments primarily consist of policy loans, Federal Home Loan Bank of Chicago (FHLB) common stock, mortgage loans and derivatives. Policy loans are carried at unpaid principal balances. FHLB common stock is carried at cost. Mortgage loans are carried at amortized cost, net, which represent the amount expected to be collected. Derivatives are carried at fair value. Variable Interest Entities (VIEs) The Company invests in fixed maturity securities and alternative investment funds that could qualify as variable interests in VIEs, including corporate securities, mortgage-backed securities and asset-backed securities. Such variable interests in VIEs have been reviewed and the Company determined that those VIEs are not subject to consolidation as the Company is not the primary beneficiary because it does not have the power to direct the activities that most significantly impact those VIEs' economic performance. Net Investment Income Net investment income primarily consists of interest, dividends and income from limited partnership interests. Interest is recognized on an accrual basis using the effective yield method and dividends are recorded at the ex-dividend date. ABS and MBS interest income is determined considering estimated pay-downs, including prepayments, obtained from third-party data sources and internal estimates. Actual prepayment experience is periodically reviewed, and effective yields are recalculated when differences arise between the prepayments originally anticipated and the actual prepayments received and currently anticipated. For ABS and MBS of high credit quality with fixed interest rates, the effective yield is recalculated on a retrospective basis. For all others, the effective yield is generally recalculated on a prospective basis. Net investment income for AFS fixed maturity securities includes the impact of accreting the credit loss allowance for the time value of money. Accrual of income is suspended for fixed maturity securities when the timing and amount of cash flows expected to be received is not reasonably estimable. Accrual of income is suspended for commercial mortgage loans that are in default or when full and timely collection of principal and interest payments is not probable. Accrued investment income receivable is monitored for recoverability and when not expected to be collected is written off through net investment income. Cash receipts on investments on non-accrual status are generally recorded as a reduction of amortized cost or principal. Income from limited partnership interests is recognized based upon the changes in fair value of the investee’s equity primarily determined using its net asset value and is generally recognized on a three month delay due to the availability of the related financial statements from investees. The Company reports accrued investment income separately from AFS fixed maturity securities and has elected not to measure an allowance for credit losses for accrued investment income. Accrued investment income is written-off and recognized as a net investment loss at the time the issuer of the security defaults or is expected to default on payments. Net Investment Gains (Losses) Net investment gains (losses) include gains and losses on investment sales, changes in the credit loss allowances related to fixed maturity securities and mortgage loans, impairments, valuation changes of equity securities and periodic changes in fair value and settlements of derivatives. Net investment gains (losses) on investment sales are determined on a specific identification basis and are net of credit losses already recognized through an allowance. Credit Loss Impairments for Fixed Maturity Securities For AFS fixed maturity securities, the difference between amortized cost, net of a credit loss allowance (i.e., amortized cost, net) and fair value, net of certain other items and deferred income taxes is reported as a component of AOCI on the Consolidated Balance Sheets and is not reflected in the operating results of any period until reclassified to net income upon the consummation of a transaction with an unrelated third party or when a credit loss allowance is recorded. The Company has a comprehensive portfolio monitoring process to evaluate fixed maturity securities (at the cusip/issuer level) on a quarterly basis that may require a credit loss allowance. These reviews, in conjunction with our investment managers’ monthly credit reports and relevant factors such as (1) the financial condition and near-term prospects of the issuer; (2) the Company’s intent to sell a security or whether it is more likely than not that the Company will be required to sell a security before the anticipated recovery in value; (3) the market leadership of the issuer; (4) the debt ratings of the issuer; and (5) the cash flows and liquidity of the issuer or the underlying cash flows for asset-backed securities , are all considered in the impairment assessment. For each fixed maturity security in an unrealized loss position, the Company assesses whether management with the appropriate authority has made the decision to sell or whether it is more likely than not that the Company will be required to sell the security before the anticipated recovery of the amortized cost basis for reasons such as liquidity, contractual or regulatory purposes. If a security meets either of these criteria, any existing credit loss allowance would be written-off against the amortized cost basis of the asset along with any remaining unrealized losses, with the incremental losses recorded as a net investment loss. If the Company has not made the decision to sell the fixed maturity security and it is not more likely than not that the Company will be required to sell the fixed maturity security before the anticipated recovery of its amortized cost basis, the Company evaluates whether it expects to receive cash flows sufficient to recover the entire amortized cost basis of the security. The Company estimates the anticipated recovery value based on the best estimate of future cash flows considering past events, current conditions and reasonable and supportable forecasts. The estimated future cash flows are discounted at the security’s current effective rate and are compared to the amortized cost basis of the security. The determination of cash flow estimates is inherently subjective, and methodologies may vary depending on facts and circumstances specific to the security. All reasonably available information relevant to the collectability of the security are considered when developing the estimate of cash flows expected to be collected. That information generally includes, but is not limited to, the remaining payment terms of the security, prepayment speeds, the financial condition and future earnings potential of the issue or issuer, expected defaults, expected recoveries, the value of underlying collateral, origination vintage year, geographic concentration of underlying collateral, available reserves or escrows, current subordination levels, third-party guarantees and other credit enhancements. Other information, such as industry analyst reports and forecasts, sector credit ratings, financial condition of the bond insurer for insured fixed maturity securities, and other market data relevant to the realizability of contractual cash flows, may also be considered. The estimated fair value of collateral will be used to estimate the anticipated recovery value if the Company determines that the security is dependent on the liquidation of collateral for ultimate settlement. If the Company does not expect to receive cash flows sufficient to recover the entire amortized cost basis of the fixed maturity security, a credit loss allowance is recorded as a net investment loss for the shortfall in expected cash flows; however, the amortized cost basis, net of the credit loss allowance, may not be lower than the fair value of the security. The portion of the unrealized loss related to factors other than credit remains classified in AOCI. If the Company determines that the fixed maturity security does not have sufficient cash flows or other information to estimate a recovery value for the security, the Company may conclude that the entire decline in fair value is deemed to be credit related and the loss is recorded as a net investment loss. When a security is sold or otherwise disposed or the security is deemed uncollectible and written off, the Company removes amounts previously recognized in the credit loss allowance. Recoveries after write-offs are recognized when received. Prior to the adoption of ASU 2016-13, Measurement of Credit Losses on Financial Instruments on January 1, 2020, when other-than-temporary impairment was deemed to have occurred, the investment in the fixed maturity security would be written-down to fair value which became the new cost basis for the security. Deferred Policy Acquisition Costs The Company's deferred policy acquisition costs (DAC) by reporting segment were as follows: ($ in millions) December 31, 2021 2020 Property & Casualty $ 24.4 $ 26.1 Supplemental 4.2 4.3 Retirement 153.8 137.7 Life 65.6 61.7 Total $ 248.0 $ 229.8 DAC consists of commissions, policy issuance and other costs which are incremental and directly related to the successful acquisition of new or renewal business, which are deferred and amortized on a basis consistent with the type of insurance coverage. For property and casualty risks, DAC is amortized over the terms of the insurance policies (6 or 12 months). For supplemental policies, DAC is amortized in proportion to anticipated premiums over the terms of the insurance policies (approximately 7 years, based on an estimated average duration across all supplemental products). For all annuity contracts, DAC is amortized over 20 years in proportion to estimated gross profits. DAC is amortized in proportion to estimated gross profits over 20 years for certain life insurance products with account values and over 30 years for indexed universal life (IUL) products. For other individual life contracts, DAC is amortized in proportion to anticipated premiums over the terms of the insurance policies (10, 15, 20, 30 years). The Company periodically reviews the assumptions and estimates used in DAC and also periodically reviews its estimations of gross profits, a process sometimes referred to as "unlocking". The most significant assumptions that are involved in the estimation of annuity gross profits include interest rate spreads, future financial market performance, business surrender/lapse rates, expenses and the impact of net investment gains (losses) on fixed maturity and equity securities. For the variable deposit portion of Retirement, the Company amortizes DAC utilizing a future financial market performance assumption of an 8% reversion to the mean approach with a 200 basis point corridor around the mean during the reversion period, representing a cap and a floor on the Company's long-term assumption. The Company's practice with regard to future financial market performance assumes that long-term appreciation in the financial markets is not changed by short-term market fluctuations, but is only changed when sustained deviations are experienced. The Company monitors these fluctuations and only changes the assumption when long-term expectations change. The most significant assumptions that are involved in the estimation of life insurance gross profits include interest rates expected to be received on investments, business persistency, and mortality. Conversions from term to permanent insurance cause an immediate write down of the associated DAC. The most significant assumptions that are involved in the estimation of supplemental gross profits include morbidity, persistency, expenses and interest rates expected to be received on investments. When a supplemental policy lapses, there is an immediate write down of the associated DAC. Annually, the Company performs a gross premium valuation (GPV) on life insurance policies to assess whether a loss recognition event has occurred. This involves discounting expected future benefits and expenses less expected future premiums. To the extent that this amount is greater than the liability for future benefits less the DAC asset, in aggregate for the life insurance block, a loss would be recognized by first writing off the DAC asset and then increasing the liability. In the event actual experience differs significantly from assumptions or assumptions are significantly revised, the Company may be required to recognize a material charge or credit to current period DAC amortization expense for the period in which the adjustment is made. The Company recognized the following adjustments to DAC amortization expense as a result of evaluating actual experience and prospective assumptions (i.e., the impact of unlocking): ($ in millions) Year Ended December 31, 2021 2020 2019 (Decrease) increase to DAC amortization expense: Retirement $ (1.3) $ (1.8) $ 3.5 Life (0.2) (0.3) (0.3) Total $ (1.5) $ (2.1) $ 3.2 DAC for annuity contracts and life insurance products with account values are adjusted for the impact on estimated future gross profits as if net unrealized investment gains (losses) on fixed maturity securities had been realized at the reporting date. This adjustment reduced DAC by $71.9 million, $90.5 million and $41.2 million at December 31, 2021, 2020 and 2019, respectively. The after tax impact of this adjustment is included in AOCI (along with net unrealized investment gains (losses) on fixed maturity securities) within shareholders' equity. DAC is reviewed for recoverability from future income, including net investment income, and costs that are deemed unrecoverable are expensed in the period in which the determination is made. No such costs were deemed unrecoverable during the years ended December 31, 2021, 2020 and 2019. Intangible Assets The value of business acquired (VOBA) represents the difference between the fair value of insurance contracts and insurance policy reserves measured in accordance with the Company's accounting policy for insurance contracts acquired. VOBA was based on an actuarial estimate of the present value of future distributable earnings for insurance in force on the acquisition date. VOBA was $76.9 million as of December 31, 2021 and is being amortized by product based on the present value of future premiums to be received. The Company estimates that it will recognize VOBA amortization of $6.2 million in 2022, $5.8 million in 2023, $5.4 million in 2024, $5.1 million in 2025 and $4.7 million in 2026. The Company accounts for the value of distribution acquired (VODA) associated with the acquisition of NTA Life Enterprises, LLC (NTA) based on an actuarial estimate of the present value of future business to be written by the existing distribution channel. VODA was $41.8 million as of December 31, 2021 and is being amortized on a straight-line basis. The Company estimates that it will recognize VODA amortization of $2.9 million in each of the years 2022 through 2026, respectively. The Company accounts for VODA associated with the acquisition of Benefit Consultants Group, Inc. (BCG) based on management's estimate of the present value of future business to be written by the existing distribution channel. VODA was $0.6 million as of December 31, 2021 and is being amortized based on the present value of future profits to be received. The Company estimates that it will recognize cumulative VODA amortization of $0.3 million for the years 2022 through 2026. The Company accounts for the value of agency relationships based on the present value of commission overrides retained by NTA. Agency relationships was $10.7 million as of December 31, 2021 and is being amortized based on the present value of future premiums to be received. The Company estimates that it will recognize agency relationships amortization of $1.9 million in 2022, $1.6 million in 2023, $1.4 million in 2024, $1.2 million in 2025 and $1.0 million in 2026. The Company accounts for the value of customer relationships based on the present value of expected profits from existing BCG customers in force at the date of acquisition. Customer relationships was $4.6 million as of December 31, 2021 and is being amortized based on the present value of future profits to be received. The Company estimates that it will recognize customer relationships amortization of $1.1 million in 2022, $0.9 million in 2023, $0.7 million in 2024, $0.6 million in 2025 and $0.5 million in 2026. Trade names represents the present value of future savings accruing to NTA and BCG by virtue of not having to pay royalties for the use of the trade names, valued using the relief from royalty method. State licenses represents the regulatory licenses held by NTA that were valued using the cost approach. Both trade names and state licenses are indefinite-lived intangible assets that are not subject to amortization. Annually, the Company performs a VOBA analysis on supplemental insurance policies to assess whether a loss recognition event has occurred. This initially involves comparing the historical and expected future experience on the block to the assumptions embedded in the original VOBA intangible asset. If both the experience to date and current expected experience are consistently better than the initial VOBA assumptions, the remaining value in the block is sufficient to support the VOBA intangible asset and no loss recognition is necessary. If the historical and current expected assumptions are not uniformly better than the initial VOBA assumptions, a GPV is performed to assess whether a loss recognition event has occurred. This involves discounting expected future benefits and expenses less expected future premiums. To the extent that this amount is greater than the liability for future benefits less the VOBA intangible asset, in aggregate for the supplemental insurance block, a loss would be recognized by first writing off the VOBA and then increasing the liability. Currently, a GPV is not required for the acquired supplemental block. No such costs were deemed unrecoverable during the year ended December 31, 2021. Amortizing intangible assets (i.e., VODA, agency relationships and customer relationships) are tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. The carrying amount of an amortizing intangible asset is not recoverable if it exceeds the sum of undiscounted cash flows expected to result from the use and eventual disposition of the asset. If the carrying amount is not recoverable from undiscounted cash flows, the impairment is measured as the difference between the carrying amount and fair value. Intangible assets that are not subject to amortization (i.e., trade names and state licenses) are tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test consists of a comparison of the fair value of an intangible asset with its carrying amount. If the carrying amount of an intangible asset that is not subject to amortization exceeds its fair value, an impairment loss is recognized in an amount equal to the excess. At October 1, 2021, the Company performed both qualitative assessments and quantitative impairment tests for intangible assets and concluded that no impairments were warranted. At October 1, 2020, the Company performed qualitative assessments to determine whether it was necessary to perform quantitative intangible asset impairment tests. Based on the assessments of qualitative factors, there were no events or circumstances that led to a determination that it is more likely than not that the fair value of an intangible asset was less than its carrying amount with exception to VODA and trade names intangible assets assigned to BCG, for which quantitative intangible asset impairment tests were performed that resulted in intangible asset impairment charges of $4.4 million in aggregate. Goodwill When the Company was acquired from CIGNA Corporation by HME Holdings, Inc. in 1989, intangible assets were recognized as goodwill in the application of purchase accounting. In addition, goodwill was recognized in 1994 related to the acquisition of Horace Mann Property & Casualty Insurance Company and in 2019 related to the acquisitions of BCG and NTA. Goodwill represents the excess of the amounts paid to acquire a business over the fair value of its net assets at the date of acquisition. Goodwill is not amortized, but is tested for impairment at the reporting unit level at least annually or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. A reporting unit is defined as an operating segment or a business unit one level below an operating segment, if separate financial information is prepared and regularly reviewed by management at that level. The Company's reporting units, for which goodwill has been allocated, are equivalent to the Company's operating segments. Refer to Note 7 for the allocation of goodwill by reporting unit as of December 31, 2021. The goodwill impairment test, as defined in GAAP, allows an entity the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If an entity determines it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the entity performs a quantitative goodwill impairment test by comparing the fair value of a reporting unit to its carrying amount for purposes of confirming and measuring an impairment. In 2019, the Company adopted guidance to eliminate Step 2 of the goodwill impairment test. Goodwill impairment is now the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of goodwill. Any amount of goodwill determined to be impaired is recognized as an expense in the period in which the impairment determination is made. At October 1, 2021, the Company performed a quantitative goodwill impairment test. Based on the results of the test, there were no events or circumstances that led to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. At October 1, 2020, the Company performed a quantitative goodwill impairment test. Based on the results of the test, there were no events or circumstances that led to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount with exception to lower than anticipated BCG wealth management sales outside of the education markets which triggered an impairment of the goodwill associated with the BCG business of the Retirement reporting unit. For the evaluation, the fair value of BCG was measured using a discounted cash flow method. The carrying amount exceeded the fair value, resulting in a $5.6 million goodwill impairment charge. During each year from 2019 through 2021, the Company completed the required annual goodwill impairment testing. With exception to the goodwill impairment charges described in Note 7, no other goodwill impairment charges were necessary as a result of such assessments. The assessment of goodwill recoverability requires significant judgment and is subject to inherent uncertainty. The use of different assumptions, within a reasonable range, could cause the fair value of a reporting unit to fall below its carrying amount. Subsequent goodwill assessments could result in impairment, particularly for any reporting unit with at-risk goodwill, due to the impact of a volatile financial market on earnings, discount rate assumptions, liquidity and market capitalization. Property and Equipment Property and equipment is carried at cost less accumulated depreciation, which is calculated using the straight-line method and based on the estimated useful lives of the assets. The estimated life for real estate is identified by specific property and range from 20 to 45 years. The estimated useful lives of leasehold improvements and other property and equipment, including capitalized software, generally range from 3 to 10 years. The following amounts are included in Other assets in the Consolidated Balance Sheets: ($ in millions) December 31, 2021 2020 Property and equipment $ 136.4 $ 131.3 Less: accumulated depreciation 70.4 66.6 Total $ 66.0 $ 64.7 Separate Account (Variable Annuity) Assets and Liabilities Separate Account assets represent variable annuity contractholder funds invested in various mutual funds. The Separate Account assets comprise actively traded mutual funds that have daily quoted net asset values that are readily determinable for identical assets that the Company can access. Net asset values for the actively traded mutual funds in which the Separate Account assets are invested are obtained daily from the fund managers. Separate Account liabilities are equal to the estimated fair value of Separate Account assets. The investment income, gains and losses of these accounts accrue directly to the contractholders and are not included in the results of operations of the Company. The activity of the Separate Accounts is not reflected in the Consolidated Statements of Operations except for (1) contract charges earned, (2) the activity related to contract guarantees, which are benefits on existing variable annuity contracts, and (3) the impact of financial market performance on the amortization of DAC. The Company's contract charges earned include fees charged to the Separate Accounts, including mortality charges, risk charges, policy administration fees, investment management fees and surrender charges. Investment Contract and Policy Reserves This table summarizes the Company's investment contract and policy reserves. ($ in millions) December 31, 2021 2020 Investment contract reserves $ 4,941.3 $ 4,847.6 Policy reserves 1,636.5 1,597.7 Total $ 6,577.8 $ 6,445.3 Liabilities for future benefits on supplemental, life and annuity policies are established in amounts adequate to meet the estimated future obligations on policies in force. Liabilities for future policy benefits on certain supplemental and life insurance policies are computed using the net level premium method including assumptions as to investment yields, mortality, morbidity, persistency, expenses and other assumptions based on the Company's experience, including a provision for adverse deviation. These assumptions are established at the time the policy is issued and are intended to estimate the experience for the period the policy benefits are payable. If experience is less favorable than the assumptions, additional liabilities may be established, resulting in recognition of a loss for that period. Liabilities for future benefits on annuity contracts and certain long-duration life insurance contracts are carried at accumulated policyholder values without reduction for potential surrender or withdrawal charges. The liability also includes provisions for the unearned portion of certain policy charges. A guaranteed minimum death benefit (GMDB) generally provides an additional benefit if the contractholder dies and the variable annuity contract value is less than a contractually defined amount. The Company has estimated and recorded a GMDB reserve on variable annuity contracts in accordance with GAAP. Contractually defined amounts vary from contract to contract based on the date the contract was entered into as well as the GMDB feature elected by the contractholder. The Company regularly monitors the GMDB reserve considering fluctuations in financial markets. The Company has relatively low exposure to GMDB risk as shown below. ($ in millions) December 31, 2021 2020 GMDB reserve $ 0.1 $ 0.1 Aggregate in-the-money death benefits under the GMDB provision 22.3 26.7 Variable annuity contract value distribution based on GMDB feature: No guarantee 24 % 26 % Return of premium guarantee 71 % 69 % Guarantee of premium roll-up at an annual rate of 3% |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On July 14, 2021, the Company announced that it entered into a Stock Purchase Agreement (Agreement), by and among the Company and Independence Capital Corp. and Independence Holding Company (Seller) to acquire all the equity interests in Madison National Life Insurance Company, Inc., an insurance company organized under the laws of the State of Wisconsin (Madison National). Founded in 1961 and headquartered in Madison, Wisconsin, Madison National offers short- and long-term group disability, group term, and worksite solutions products, including accident, critical illness and fixed indemnity. The Agreement provided, among other things, that, upon the terms and subject to the conditions set forth in the Agreement, the Company would acquire all the equity interests in Madison National for $172.5 million. The Seller will have a potential earn-out of up to $12.5 million payable in cash, if specified financial targets are achieved by the end of 2023 and as such, the final purchase price is subject to adjustment. Effective January 1, 2022, the Company completed its acquisition of Madison National. As a result of the acquisition, Madison National became a wholly owned subsidiary of the Company. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments The components of net investment income for the following periods were as follows: ($ in millions) Year Ended December 31, 2021 2020 2019 Fixed maturity securities $ 235.6 $ 232.9 $ 283.2 Equity securities 5.3 4.7 4.9 Limited partnership interests 79.0 20.9 25.7 Short-term and other investments 11.6 11.4 (10.1) Investment expenses (10.1) (9.6) (9.4) Net investment income - investment portfolio 321.4 260.3 294.3 Investment income - deposit asset on reinsurance 101.1 97.3 70.8 Total net investment income $ 422.5 $ 357.6 $ 365.1 Net Investment Gains (Losses) Net investment gains (losses) for the following periods were as follows: ($ in millions) Year Ended December 31, 2021 2020 2019 Fixed maturity securities (1) $ (7.7) $ 9.4 $ 141.4 Equity securities (0.8) 1.8 16.0 Short-term investments and other (2.5) (13.5) (4.1) Net investment gains (losses) $ (11.0) $ (2.3) $ 153.3 (1) Net investment gains on fixed maturity securities include a $135.3 million realized investment gain associated with a transfer of investments to a reinsurer as consideration paid in connection with a reinsurance transaction of a $2.9 billion block of in force fixed and variable annuity business in 2019. See Notes 6 and 18 for further information. The Company, from time to time, sells fixed maturity securities subsequent to the reporting date that were considered temporarily impaired at such reporting date. Such sales are due to issuer specific events occurring subsequent to the reporting date that result in a change in the Company's intent or ability to hold a fixed maturity security. The types of events that may result in a sale include significant changes in the economic facts and circumstances related to the invested asset, significant unforeseen changes in liquidity needs, or changes in the Company's investment strategy. Net Investment Gains (Losses) by Transaction Type The following table reconciles net investment gains (losses) pretax by transaction type: ($ in millions) Year Ended December 31, 2021 2020 2019 Credit loss impairments (1) $ (8.1) $ — $ (1.1) Intent-to-sell impairments (2.3) (5.3) (0.3) Total impairments on investments recognized in net income (10.4) (5.3) (1.4) Sales and other, net 4.3 15.0 151.5 Change in fair value - equity securities (2.3) (0.2) 7.3 Change in fair value and losses realized on settlements - derivatives (2.6) (11.8) (4.1) Net investment (losses) gains $ (11.0) $ (2.3) $ 153.3 (1) Due to the adoption of the measurement of credit losses on financial instruments accounting standard in 2020, other-than-temporary write-downs reported in 2019 are now presented as credit losses, Allowance for Credit Loss Impairments on Fixed Maturity Securities The following table presents changes in the allowance for credit loss impairments on fixed maturity securities classified as available for sale for the category of other asset-backed securities (no other categories of fixed maturity securities have an allowance for credit loss impairments): ($ in millions) Year Ended December 31, 2021 2020 Beginning balance $ — $ — Credit losses on fixed maturity securities for which credit losses were not previously reported (1) 8.1 — Net (increases) decreases related to credit losses previously reported — — Reduction of credit allowances related to sales — — Write-offs (0.4) — Ending balance $ 7.7 $ — (1) Because the standard for the measurement of credit losses on financial instruments became effective January 1, 2020, there are no allowances for credit loss impairments to report for the year ended December 31, 2019. Fixed Maturity Securities The Company's investment portfolio is comprised primarily of fixed maturity securities. Amortized cost, net, unrealized investment gains (losses) and fair values of all fixed maturity securities in the portfolio were as follows: ($ in millions) Amortized Gross Gross Fair December 31, 2021 Fixed maturity securities U.S. Government and federally sponsored agency obligations: (1) Mortgage-backed securities $ 612.1 $ 51.9 $ 1.5 $ 662.5 Other, including U.S. Treasury securities 342.5 27.7 4.3 365.9 Municipal bonds 1,519.7 184.4 0.7 1,703.4 Foreign government bonds 40.2 3.4 — 43.6 Corporate bonds 2,217.7 176.2 5.2 2,388.7 Other asset-backed securities 1,065.5 16.6 6.9 1,075.2 Totals $ 5,797.7 $ 460.2 $ 18.6 $ 6,239.3 December 31, 2020 Fixed maturity securities U.S. Government and federally sponsored agency obligations: (1) Mortgage-backed securities $ 605.5 $ 79.6 $ 0.3 $ 684.8 Other, including U.S. Treasury securities 395.0 39.2 1.0 433.2 Municipal bonds 1,612.3 215.7 0.5 1,827.5 Foreign government bonds 40.2 4.9 — 45.1 Corporate bonds 1,905.2 221.6 3.9 2,122.9 Other asset-backed securities 1,230.4 24.1 22.7 1,231.8 Totals $ 5,788.6 $ 585.1 $ 28.4 $ 6,345.3 (1) Fair value includes securities issued by Federal National Mortgage Association (FNMA) of $376.7 million and $387.1 million; Federal Home Loan Mortgage Corporation (FHLMC) of $326.5 million and $344.3 million; and Government National Mortgage Association (GNMA) of $112.1 million and $132.3 million as of December 31, 2021 and 2020, respectively. The following table presents the fair value and gross unrealized losses for fixed maturity securities in an unrealized loss position at December 31, 2021 and 2020, respectively. The Company views the decrease in fair value of all fixed maturity securities with unrealized losses at December 31, 2021 — which was driven largely by increasing interest rates, spread widening, financial market illiquidity and/or market volatility from the date of acquisition — as temporary. As of December 31, 2021, the Company has not made the decision to sell and it is not more likely than not the Company will be required to sell the fixed maturity securities with unrealized losses before anticipated recovery in value. Therefore, it was determined that the unrealized losses on the fixed maturity securities presented in the table below were not indicative of any impairments as of December 31, 2021. ($ in millions) 12 months or less More than 12 months Total Fair Value Gross Fair Value Gross Fair Value Gross December 31, 2021 Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 67.4 $ 1.3 $ 3.9 $ 0.2 $ 71.3 $ 1.5 Other 59.5 1.7 35.1 2.6 94.6 4.3 Municipal bonds 56.8 0.7 0.6 — 57.4 0.7 Foreign government bonds — — — — — — Corporate bonds 220.7 3.8 44.1 1.4 264.8 5.2 Other asset-backed securities 379.0 3.8 128.2 3.1 507.2 6.9 Total $ 783.4 $ 11.3 $ 211.9 $ 7.3 $ 995.3 $ 18.6 Number of positions with a gross unrealized loss 516 122 638 Fair value as a percentage of total fixed maturities securities fair value 12.6 % 3.4 % 16.0 % December 31, 2020 Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 4.9 $ 0.1 $ 2.6 $ 0.2 $ 7.5 $ 0.3 Other 95.9 1.0 — — 95.9 1.0 Municipal bonds 18.1 0.5 — — 18.1 0.5 Foreign government bonds — — — — — — Corporate bonds 126.6 3.7 10.9 0.2 137.5 3.9 Other asset-backed securities 316.9 17.2 409.3 5.5 726.2 22.7 Total $ 562.4 $ 22.5 $ 422.8 $ 5.9 $ 985.2 $ 28.4 Number of positions with a gross unrealized loss 308 123 431 Fair value as a percentage of total fixed maturities securities fair value 8.9 % 6.7 % 15.6 % Fixed maturity securities with an investment grade rating represented 69.8% of the gross unrealized losses as of December 31, 2021. With respect to fixed maturity securities involving securitized financial assets, the underlying collateral cash flows were stress tested to determine there was no adverse change in the present value of cash flows below the amortized cost basis. Maturities of Fixed Maturity Securities The following table presents the distribution of the Company's fixed maturity securities portfolio by estimated expected maturity. Estimated expected maturities differ from contractual maturities, reflecting assumptions regarding borrowers' utilization of the right to call or prepay obligations with or without call or prepayment penalties. For structured securities, estimated expected maturities consider broker-dealer survey prepayment assumptions and are verified for consistency with the interest rate and economic environments. ($ in millions) December 31, 2021 Amortized Fair Percent of Estimated expected maturity: Due in 1 year or less $ 245.4 $ 250.8 4.0 % Due after 1 year through 5 years 1,613.8 1,686.2 27.0 % Due after 5 years through 10 years 1,600.5 1,729.5 27.7 % Due after 10 years through 20 years 1,339.9 1,488.2 23.9 % Due after 20 years 998.1 1,084.6 17.4 % Total $ 5,797.7 $ 6,239.3 100.0 % Average option-adjusted duration, in years 6.7 Sales of Fixed Maturity and Equity Securities Proceeds received from sales of fixed maturity and equity securities, each determined using the specific identification method, and gross gains and gross losses realized as a result of those sales for each year were as follows: ($ in millions) Year Ended December 31, 2021 2020 2019 (1) Fixed maturity securities Proceeds received $ 578.2 $ 472.9 $ 805.9 Gross gains realized 10.5 20.5 150.9 Gross losses realized (7.7) (6.1) (7.8) Equity securities Proceeds received $ 4.7 $ 12.7 $ 29.9 Gross gains realized 1.5 2.2 9.2 Gross losses realized (0.1) (1.9) (0.8) (1) Gross gains realized presented above include a $135.3 million realized investment gain associated with a transfer of investments to a reinsurer as consideration paid during the second quarter of 2019 in connection with the reinsurance of a $2.9 billion block of in force fixed and variable annuity business. See Notes 6 and 18 for further information. Net Unrealized Investment Gains (Losses) on Fixed Maturity Securities The following table reconciles the net unrealized investment gains (losses) on fixed maturity securities, net of tax, included in AOCI, before the impact on DAC: ($ in millions) Year Ended December 31, 2021 2020 2019 Net unrealized investment gains (losses) on fixed maturity securities, net of tax Beginning of period $ 439.8 $ 264.4 $ 111.7 Change in net unrealized investment (losses) gains on fixed maturity securities (97.6) 184.2 277.1 Reclassification of net investment losses (gains) on fixed maturity securities to net income 6.7 (8.8) (124.4) End of period $ 348.9 $ 439.8 $ 264.4 Limited Partnership Interests All investments in limited partnership interests are accounted for using EMA and include interests in commercial mortgage loan funds, private equity funds, infrastructure debt funds, infrastructure equity funds and other funds. Principal factors influencing carrying amount appreciation or decline include operating performance, comparable public company earnings multiples, capitalization rates and the economic environment. The Company recognizes an impairment loss for equity method limited partnership interests when evidence demonstrates that the loss is other than temporary. Evidence of a loss in value that is other than temporary may include the absence of an ability to recover the carrying amount of the investment or the inability of the investee to sustain a level of earnings that would justify the carrying amount of the investment. The carrying amounts of equity method limited partnership interests were as follows: ($ in millions) Year Ended December 31, 2021 2020 Commercial mortgage loan funds $ 346.8 $ 149.6 Private equity funds 74.0 39.6 Infrastructure debt funds 62.4 58.3 Infrastructure equity funds 58.3 52.1 Other funds (1) 171.3 149.4 Total $ 712.8 $ 449.0 (1) Other funds consist primarily of limited partnership interests in hedge funds, real estate equity and corporate mezzanine funds. Investment in Entities Exceeding 10% of Shareholders' Equity At December 31, 2021 and 2020, there were no investments which exceeded 10% of total shareholders' equity in entities other than obligations of the U.S. Government and federally sponsored government agencies and authorities. Offsetting of Assets and Liabilities The Company's derivatives are subject to enforceable master netting arrangements. Collateral support agreements associated with each master netting arrangement provide that the Company will receive or pledge financial collateral in the event minimum thresholds have been reached. The following table presents the instruments that were subject to a master netting arrangement for the Company. ($ in millions) Gross Net Amounts Gross Amounts Not Offset Gross Financial Cash Net December 31, 2021 Asset derivatives Free-standing derivatives $ 10.7 $ — $ 10.7 $ 4.5 $ 6.4 $ (0.2) December 31, 2020 Asset derivatives Free-standing derivatives $ 16.8 $ — $ 16.8 $ 13.7 $ 2.6 $ 0.5 Deposits At December 31, 2021 and 2020, fixed maturity securities with a fair value of $26.2 million and $26.9 million, respectively, were on deposit with governmental agencies as required by law in various states for which the insurance subsidiaries of the Company conduct business. In addition, at December 31, 2021 and 2020, fixed maturity securities with a fair value of $870.1 million and $707.3 million, respectively, were on deposit with FHLB as collateral for amounts subject to funding agreements, advances and borrowings which were equal to $787.5 million and $644.5 million at the respective dates. The deposited securities are reported as Fixed maturity securities on the Company's Consolidated Balance Sheets. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | The Company is required to disclose estimated fair values for certain financial and nonfinancial assets and liabilities. Fair values of the Company's insurance contracts other than annuity contracts (which are investment contracts) and equity method limited partnership interests are not required to be disclosed. However, the estimated fair values of liabilities under all insurance contracts are taken into consideration in the Company's overall management of interest rate risk through the matching of investment maturities with amounts due under insurance contracts. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between knowledgeable, unrelated and willing market participants on the measurement date. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The Company categorizes its financial and nonfinancial assets and liabilities into a three-level hierarchy based on the priority of the inputs to the valuation technique. The three levels of inputs that may be used to measure fair value are: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include fixed maturity and equity securities (both common stock and preferred stock) that are traded in an active exchange market, as well as U.S. Treasury securities. Level 2 Unadjusted observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for the assets or liabilities. Level 2 assets and liabilities include fixed maturity securities (1) with quoted prices that are traded less frequently than exchange-traded instruments or (2) values based on discounted cash flows with observable inputs. This category generally includes certain U.S. Government and agency mortgage-backed securities, non-agency structured securities, corporate fixed maturity securities, preferred stocks, derivatives and embedded derivatives. Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, certain discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation and for which the significant inputs are unobservable. This category generally includes certain private debt and equity investments, as well as embedded derivatives. When the inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety. As a result, a Level 3 fair value measurement may include inputs that are observable (Level 1 or Level 2) and unobservable (Level 3). Net transfers into or out of each of the three levels are reported as having occurred at the end of the reporting period in which the transfers were determined. The following discussion describes the valuation methodologies used for financial assets and financial liabilities measured at fair value. The techniques utilized in estimating the fair values are affected by the assumptions used, including discount rates and estimates of the amount and timing of expected future cash flows. The use of different methodologies, assumptions and inputs may have a material effect on the estimated fair values of the Company's investment holdings. Care is exercised in deriving conclusions about the Company's business, its value or financial position based on the fair value information of financial assets and liabilities presented below. Fair value estimates are made at a specific point in time, based on available market information and judgments about the financial asset or financial liability, including estimates of both the timing and amount of expected future cash flows and the credit standing of the issuer. In some cases, fair value estimates cannot be substantiated by comparison to independent markets. In addition, the disclosed fair value may not be realized in the immediate settlement of the financial asset or financial liability. The disclosed fair values do not reflect any premium or discount that could result from offering for sale at one time an entire holding of a particular financial asset or financial liability. In periods of market disruption, the ability to observe prices and inputs may be reduced for many instruments. This condition could cause an instrument to be reclassified from Level 1 to Level 2 or from Level 2 to Level 3. Potential taxes and other expenses that would be incurred in an actual sale or settlement are not reflected in amounts disclosed. Investments The fair value of a fixed maturity security is the estimated amount at which the security could be exchanged in an orderly transaction between knowledgeable, unrelated and willing parties. The Company utilizes ICE Data Pricing, its investment managers and custodian bank to obtain fair value prices from independent third-party valuation service providers, broker quotes, model prices and matrix pricing. Each month, the Company obtains fair value prices from its investment managers and custodian bank, each of which use a variety of independent, nationally recognized pricing sources to determine market valuations for fixed maturity securities. Differences in prices between the sources that the Company considers significant are researched and the Company utilizes the price that it considers most representative of an exit price. Typical inputs used by these pricing sources include, but are not limited to, reported trades, bids, offers, benchmark yield curves, benchmarking of like securities, rating designations, sector groupings, issuer spreads and/or estimated cash flows, prepayment and default speeds, among others. The Company's fixed maturity securities portfolio is primarily publicly traded, which allows for a high percentage of the portfolio to be priced through pricing services. Approximately 90.2% and 91.9% of the portfolio, based on fair value, was priced through pricing services or index priced as of December 31, 2021 and 2020, respectively. The remainder of the portfolio was priced by broker quotes, model prices or matrix pricing. When non-binding broker quotes can be corroborated by comparison to other vendor quotes, pricing models or analyses, the securities are generally classified as Level 2, otherwise they are classified as Level 3. There were no significant changes to the valuation process during 2021. The valuation of hard-to-value fixed maturity securities (generally 150 -200 securities) is more subjective because the markets are less liquid and there is a lack of observable market-based inputs. This may increase the potential that the estimated fair value of an investment is not reflective of the price at which an actual transaction would occur. When the pricing sources cannot provide fair value determinations, the investment managers obtain non-binding price quotes from brokers. For those securities where the investment manager cannot obtain broker quotes, they will model the security, generally using anticipated cash flows of the underlying collateral. Brokers' valuation methodologies as well as investment managers’ modeling methodologies are sometimes matrix-based, using indicative evaluation measures and adjustments for specific security characteristics and market sentiment. The selection of the market inputs and assumptions used to estimate the fair value of hard-to-value fixed maturity securities requires judgment and includes: benchmark yield, liquidity premium, estimated cash flows, prepayment and default speeds, spreads, weighted average life, and credit rating. The extent of the use of each market input depends on the market sector and market conditions. Depending on the security, the priority of the use of inputs may change or some market inputs may not be relevant. For some securities, additional inputs may be necessary. The Company gains assurance that its portfolio of fixed maturity securities including hard-to-value fixed maturity securities is appropriately valued through the execution of various processes and controls designed to ensure the overall reasonableness and consistent application of valuation methodologies, including inputs and assumptions, and compliance with accounting standards. The Company’s processes and controls are designed to ensure (1) the valuation methodologies are appropriate and consistently applied, (2) the inputs and assumptions are reasonable and consistent with the objective of determining fair value, and (3) the fair values are accurately recorded. For example, on a continuing basis, the Company assesses the reasonableness of individual fair values that have stale security prices or that exceed certain thresholds as compared to previous fair values received from valuation service providers. The Company performs procedures to understand and assess the methodologies, processes and controls of valuation service providers. In addition, the Company may validate the reasonableness of fair values by comparing information obtained from valuation service providers or brokers to other third-party valuation sources for selected securities. To determine the fair value of equity securities, the Company utilizes its investment managers and its custodian bank to obtain fair value prices from independent third-party valuation service providers. Each month, the Company obtains fair value prices from its investment managers and custodian bank, each of which use a variety of independent, nationally recognized pricing sources to determine market valuations for equity securities. Policy loans and mortgage loans as well as investments in limited partnership interests which are accounted for using EMA are excluded from the fair value hierarchy. In summary, the following financial assets and financial liabilities are carried at fair value: Financial assets • Fixed maturity securities including hard-to-value fixed maturity securities, as described above. • Equity securities, as described above. • Short-term fixed maturity securities — Because of the nature of these assets, carrying amounts generally approximate fair values. • Derivatives — Fair values are based on the amount of cash expected to be received to settle each derivative on the reporting date. These amounts are obtained from each of the counterparties using industry accepted valuation models and observable inputs. Significant inputs include contractual terms, underlying index prices, market volatilities, interest rates and dividend yields. • FHLB membership and activity stocks — Fair value is based on redemption value, which is equal to par value. Financial liabilities • The fair value of derivatives embedded in IUL contracts is set equal to the fair value of the outstanding call options. • The fair value of derivatives embedded in FIA contracts is determined using the option budget method for each premium received (i.e., the option budget method is used as the future account growth rate). With this method, future excess cash flows (defined as benefits in excess of required non-forfeiture benefits) are discounted at the risk-free rate and adjusted for non-performance, to determine the fair value of the embedded derivatives. Financial Instruments Measured and Carried at Fair Value on a Recurring Basis The following table presents the Company's fair value hierarchy for financial assets and financial liabilities measured and carried at fair value on a recurring basis. At December 31, 2021, Level 3 investments comprised approximately 5.6% of the Company's total investment portfolio at fair value. ($ in millions) Carrying Fair Fair Value Measurements at Level 1 Level 2 Level 3 December 31, 2021 Financial Assets Investments Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 662.5 $ 662.5 $ — $ 662.5 $ — Other, including U.S. Treasury securities 365.9 365.9 17.7 348.2 — Municipal bonds 1,703.4 1,703.4 — 1,642.6 60.8 Foreign government bonds 43.6 43.6 — 43.6 — Corporate bonds 2,388.7 2,388.7 14.9 2,163.5 210.3 Other asset-backed securities 1,075.2 1,075.2 — 976.3 98.9 Total fixed maturity securities 6,239.3 6,239.3 32.6 5,836.7 370.0 Equity securities 147.2 147.2 35.2 110.6 1.4 Short-term investments 157.8 157.8 157.8 — — Other investments 43.6 43.6 — 43.6 — Totals $ 6,587.9 $ 6,587.9 $ 225.6 $ 5,990.9 $ 371.4 Separate Account (variable annuity) assets (1) $ 3,441.0 $ 3,441.0 $ 3,441.0 $ — $ — Financial Liabilities Investment contract and life policy reserves, embedded derivatives $ 2.1 $ 2.1 $ — $ 2.1 $ — Other policyholder funds, embedded derivatives $ 106.6 $ 106.6 $ — $ — $ 106.6 December 31, 2020 Financial Assets Investments Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 684.8 $ 684.8 $ — $ 673.7 $ 11.1 Other, including U.S. Treasury securities 433.2 433.2 18.4 414.8 — Municipal bonds 1,827.5 1,827.5 — 1,767.9 59.6 Foreign government bonds 45.1 45.1 — 45.1 — Corporate bonds 2,122.9 2,122.9 14.9 1,952.2 155.8 Other asset-backed securities 1,231.8 1,231.8 — 1,103.5 128.3 Total fixed maturity securities 6,345.3 6,345.3 33.3 5,957.2 354.8 Equity securities 121.6 121.6 39.2 82.1 0.3 Short-term investments 141.8 141.8 137.7 4.1 — Other investments 36.3 36.3 — 36.3 — Totals $ 6,645.0 $ 6,645.0 $ 210.2 $ 6,079.7 $ 355.1 Separate Account (variable annuity) assets (1) $ 2,891.4 $ 2,891.4 $ 2,891.4 $ — $ — Financial Liabilities Investment contract and life policy reserves, embedded derivatives $ 2.5 $ 2.5 $ — $ 2.5 $ — Other policyholder funds, embedded derivatives $ 104.5 $ 104.5 $ — $ — $ 104.5 (1) Separate Account (variable annuity) assets represent contractholder funds invested in various actively traded mutual funds that have daily quoted net asset values that are readily determinable for identical assets that the Company can access. Separate Account (variable annuity) liabilities are equal to the estimated fair value of Separate Account (variable annuity) assets. Changes in Level 3 Fair Value Measurements The Company did not have any transfers between Levels 1 and 2 during 2021 and 2020. The following tables present reconciliations for the periods indicated for all Level 3 financial assets and financial liabilities measured at fair value on a recurring basis. ($ in millions) Financial Assets Financial Liabilities (1) Municipal Corporate Mortgage-Backed and Other Asset- Backed Securities (2) Total Equity Total Beginning balance, January 1, 2021 $ 59.6 $ 155.8 $ 139.4 $ 354.8 $ 0.3 $ 355.1 $ 104.5 Transfers into Level 3 (3) 18.6 131.7 21.3 171.6 1.0 172.6 — Transfers out of Level 3 (3) — (64.4) (19.2) (83.6) — (83.6) — Total gains or losses Net investment gains (losses) included in net income related to financial assets — — (8.2) (8.2) 0.1 (8.1) — Net investment (gains) losses included in net income related to financial liabilities — — — — — — 10.0 Net unrealized investment gains (losses) included in OCI (2.5) — 8.8 6.3 — 6.3 — Purchases — — — — — — — Issuances — — — — — — 4.9 Sales — — — — — — — Settlements — — — — — — — Paydowns, maturities and distributions (14.9) (12.8) (43.2) (70.9) — (70.9) (12.8) Ending balance, December 31, 2021 $ 60.8 $ 210.3 $ 98.9 $ 370.0 $ 1.4 $ 371.4 $ 106.6 Beginning balance, January 1, 2020 $ 44.3 $ 104.0 $ 146.8 $ 295.1 $ 0.1 $ 295.2 $ 93.7 Transfers into Level 3 (3) 80.7 83.6 104.3 268.6 0.2 268.8 — Transfers out of Level 3 (3) (69.1) (36.6) (84.6) (190.3) — (190.3) — Total gains or losses Net investment gains (losses) included in net income related to financial assets — — (0.3) (0.3) — (0.3) — Net investment (gains) losses included in net income related to financial liabilities — — — — — — 11.5 Net unrealized investment gains (losses) included in OCI 4.3 1.4 (10.5) (4.8) — (4.8) — Purchases — 6.9 1.9 8.8 — 8.8 — Issuances — — — — — — 8.4 Sales — — 1.2 1.2 — 1.2 — Settlements — — — — — — — Paydowns, maturities and distributions (0.6) (3.5) (19.4) (23.5) — (23.5) (9.1) Ending balance, December 31, 2020 $ 59.6 $ 155.8 $ 139.4 $ 354.8 $ 0.3 $ 355.1 $ 104.5 (1) Represents embedded derivatives, all related to the Company's FIA products, reported in Other policyholder funds in the Company's Consolidated Balance Sheets. (2) Includes U.S. Government and federally sponsored agency obligations for mortgage-backed securities and other asset-backed securities. (3) Transfers into and out of Level 3 during the years ended December 31, 2021 and 2020 were attributable to changes in the availability of observable market information for individual fixed maturity securities and short-term investments. The Company's policy is to recognize transfers into and out of the levels as having occurred at the end of the reporting period in which the transfers were determined. At December 31, 2021, the Company had $8.1 million of net investment losses on Level 3 financial assets that were included in net income and were primarily attributable to credit loss impairments. At December 31, 2020 the Company had $0.3 million of net investment losses on Level 3 financial assets that were included in net income. For the years ended December 31, 2021 and 2020, net investment losses of $10.0 million and $11.5 million, respectively, were included in net income that were attributable to changes in the fair value of Level 3 financial liabilities. Quantitative Information about Level 3 Fair Value Measurements The following table provides quantitative information about the significant unobservable inputs for recurring fair value measurements categorized within Level 3. ($ in millions) Financial Fair Value at Valuation Technique(s) Unobservable Inputs Range (Weighted Average) and Single Point Best Estimate (1) Municipal bonds $ 60.8 discounted cash flow I spread (2) 374 - 425 bps Corporate bonds 210.3 discounted cash flow N spread (3) 211 - 531 bps discounted cash flow I spread (2) 333 - 365 bps discounted cash flow T spread (4) 130 - 540 bps discounted cash flow yield 3.4% - 8.8% discounted cash flow discount rate 11.3% - 12.0% market comparable option adjusted spread 12.5% Other asset-backed securities 98.9 vendor price haircut 3.0% - 5.0% discounted cash flow discount margin 14.6% discounted cash flow discount rate 8.5% - 20.0% discounted cash flow median comparable yield 7.3% - 16.1% market comparable median price $54.79 - $97.95 discounted cash flow N spread (3) 341 bps discounted cash flow T spread (4) 196 bps Equity securities 1.4 Black-Scholes volatility low 29.0% - high 34.0% discounted cash flow variable $100.00 - $121.95 ($ in millions) Financial Fair Value at Valuation Technique(s) Unobservable Inputs Range (Weighted Average) and Single Point Best Estimate (1) Derivatives $ 106.6 discounted cash flow lapse rate 5.3% mortality multiplier (5) 66.8% option budget 0.9% - 2.5% non-performance adjustment (6) 5.0% (1) When a range of unobservable inputs is not readily available, the Company uses a single point best estimate. (2) "I spread" is the interpolated weighted average life point on the "on the run" (OTR) point of the curve. (3) "N spread" is the interpolated weighted average life point on the swap curve. (4) "T spread" is a specific point on the OTR curve. (5) Mortality multiplier is applied to the Annuity 2000 table. (6) Determined as a percentage of the risk-free rate. The valuation techniques and significant unobservable inputs used in the fair value measurement for financial assets and financial liabilities classified as Level 3 are subject to the control processes as previously described in this Note. Generally, valuation techniques for fixed maturity securities include spread pricing, matrix pricing and discounted cash flow methodologies; include inputs such as quoted prices for identical or similar securities that are less liquid; and are based on lower levels of trading activity than securities classified as Level 2. The valuation techniques and significant unobservable inputs used in the fair value measurement for equity securities classified as Level 3 use similar valuation techniques and significant unobservable inputs as those used for fixed maturity securities. The sensitivity of the estimated fair values to changes in the significant unobservable inputs for fixed maturity and equity securities included in Level 3 include: benchmark yield, liquidity premium, estimated cash flows, prepayment and default speeds, spreads, weighted average life, and credit rating. Significant spread widening in isolation will adversely impact the overall valuation, while significant tightening will lead to substantial valuation increases. Significant increases (decreases) in illiquidity premiums in isolation will result in substantially lower (higher) valuations. Significant increases (decreases) in expected default rates in isolation will result in substantially lower (higher) valuations. Financial Instruments Not Carried at Fair Value The Company has various other financial assets and financial liabilities used in the normal course of business that are not carried at fair value, but for which fair value disclosure is required. The following table presents the carrying amount, fair value and fair value hierarchy of these financial assets and financial liabilities. ($ in millions) Carrying Fair Fair Value Measurements at Level 1 Level 2 Level 3 December 31, 2021 Financial Assets Other investments $ 148.8 $ 152.4 $ — $ — $ 152.4 Deposit asset on reinsurance 2,481.5 2,935.1 — — 2,935.1 Financial Liabilities Investment contract and policy reserves, fixed annuity contracts 4,941.3 5,004.9 — — 5,004.9 Investment contract and life policy reserves, account values on life contracts 105.4 115.4 — — 115.4 Other policyholder funds 839.3 839.3 — 782.8 56.5 Short-term debt 249.0 249.0 — — 249.0 Long-term debt 253.6 277.4 — 277.4 — December 31, 2020 Financial Assets Other investments $ 168.3 $ 172.1 $ — $ — $ 172.1 Deposit asset on reinsurance 2,420.9 3,030.6 — — 3,030.6 Financial Liabilities Investment contract and policy reserves, fixed annuity contracts 4,847.6 4,963.3 — — 4,963.3 Investment contract and life policy reserves, account values on life contracts 98.7 108.4 — — 108.4 Other policyholder funds 646.8 646.8 — 590.7 56.1 Short-term debt 135.0 135.0 — — 135.0 Long-term debt 302.3 331.1 — 331.1 — Other Investments Other investments includes policy loans and mortgage loans. For policy loans, fair value is based on estimates using discounted cash flow analysis and current interest rates being offered for new loans. For mortgage loans, fair value is estimated by discounting the future cash flows using current rates at which similar loans would be made to borrowers with similar credit ratings and similar remaining maturities. Deposit Asset on Reinsurance The fair value of the deposit asset on reinsurance is estimated by discounting the future cash flows that are expected to arise out of the annuity reinsurance transaction. The treasury yield curve, plus an assumed credit spread, is used to determine the appropriate discount rate. Investment Contract and Policy Reserves The fair values of fixed annuity contract liabilities and policyholder account balances on life contracts are equal to the discounted estimated future cash flows (using the Company's current interest rates for similar products including consideration of minimum guaranteed interest rates). The Company carries these financial liabilities at cost. Also, included in investment contract and policy reserves are embedded derivatives related to the Company's IUL products which are carried at fair value. See Note 5 for further information. Other Policyholder Funds Other policyholder funds are liabilities related to supplementary contracts without life contingencies and dividend accumulations, as well as balances outstanding under funding agreements with the FHLB and embedded derivatives related to the FIA products. Except for embedded derivatives, each of these components is carried at cost, which management believes is a reasonable estimate of fair value due to the relatively short duration of these items, based on the Company's past experience. The fair value of the embedded derivatives related to FIA products is estimated at each reporting date by (1) projecting policy contract values and minimum guaranteed contract values over the expected lives of the contracts and (2) discounting the excess of the projected contract value amounts at the applicable risk free interest rates adjusted for the Company's nonperformance risk related to those liabilities. The projections of policy contract values are based on the Company's best estimate assumptions for future contract growth and decrements. The assumptions for future contract growth include the expected index credits which are derived from the fair values of the underlying call options purchased to fund such index credits and the expected costs of annual call options that will be purchased in the future to fund index credits beyond the next contract anniversary. Projections of minimum guaranteed contract values include the same best estimate assumptions for contract decrements used to project policy contract values. Short-term Debt The Company carries short-term debt at amortized cost which approximates fair value. Long-term Debt The Company carries long-term debt at amortized cost. The fair value of long-term debt is estimated based on unadjusted quoted market prices of the Company's securities or unadjusted market prices based on similar publicly traded issues when trading activity for the Company's securities is not sufficient to provide a market price. |
Derivatives
Derivatives | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | DerivativesThe Company offers FIA products, which are deferred fixed annuities that guarantee the return of principal to the contractholder and credit interest based on a percentage of the gain in a specified market index. The Company also offers IUL products which credit interest based on a percentage of the gain in a specified market index. When deposits are received for FIA and IUL contracts, a portion is used to purchase derivatives consisting of call options on the applicable market indices to fund the index credits due to FIA and IUL policyholders. For the Company, substantially all such call options are one-year options purchased to match the funding requirements of the underlying contracts. The call options are carried at fair value with changes in fair value included in Net investment gains (losses), a component of revenues, in the Consolidated Statements of Operations. The change in fair value of derivatives includes the gains or losses recognized at the expiration of the option term or early termination and the changes in fair value for open positions. Call options are not purchased to fund the index liabilities that may arise after the next deposit anniversary date. On the respective anniversary dates of the indexed deposits, the index used to compute the annual index credit is reset and new one-year call options are purchased to fund the next annual index credit. The cost of these purchases is managed through the terms of the FIA and IUL contracts, which permit changes to index return caps, participation rates and/or asset fees, subject to guaranteed minimums on each contract's anniversary date. By adjusting the index return caps, participation rates or asset fees, crediting rates generally can be managed except in cases where the contractual features would prevent further modifications. The future annual index credits on FIA are accounted for as a "series of embedded derivatives" over the expected life of the applicable contract with a corresponding reserve recognized. For IUL, the embedded derivative represents a single year liability for the index return. The Company carries all derivatives at fair value in the Consolidated Balance Sheets. The Company elected to not use hedge accounting for derivative transactions related to the FIA and IUL products. As a result, the Company recognizes the purchased call options and the embedded derivatives related to the provision of a contingent return at fair value, with changes in the fair value of the derivatives recognized immediately as Net investment gains (losses) in the Consolidated Statements of Operations. The fair values of derivatives, including derivatives embedded in FIA and IUL contracts, are presented in the Consolidated Balance Sheets as follows: ($ in millions) December 31, 2021 2020 Assets Derivatives, reported in Short-term and other investments $ 10.7 $ 16.8 Liabilities FIA - embedded derivatives, reported in Other policyholder funds 106.6 104.5 IUL - embedded derivatives, reported in Investment contract and policy reserves 2.1 2.5 In general, the change in the fair value of the embedded derivatives related to FIA will not correspond to the change in fair value of the purchased call options because the purchased call options are one-year options while the options valued in the embedded derivatives represent the rights of the policyholder to receive index credits over the entire period the FIA contracts are expected to be in force, which typically exceeds 10 years. The changes in fair value of derivatives included in the Consolidated Statements of Operations were as follows: ($ in millions) Years Ended December 31, 2021 2020 2019 Change in fair value of derivatives: (1) Revenues Net investment gains (losses) $ 8.7 $ 0.2 $ 9.5 Change in fair value of embedded derivatives: Revenues Net investment gains (losses) (11.3) (12.1) (13.6) (1) Includes gains or losses recognized at option expiration or early termination and changes in fair value for open positions. The Company's strategy attempts to mitigate potential risk of loss under these agreements through a regular monitoring process, which evaluates the program's effectiveness. The Company is exposed to risk of loss in the event of nonperformance by the counterparties and, accordingly, option contracts are purchased from multiple counterparties, which are evaluated for creditworthiness prior to purchase of the contracts. All of these options have been purchased from nationally recognized financial institutions with a S&P/Moody's Investors Service, Inc. (Moody's) long-term credit rating of "BBB+/A3" or higher at the time of purchase and the maximum credit exposure to any single counterparty is subject to concentration limits. The Company also obtains credit support agreements that allow it to request the counterparty to provide cash collateral when the fair value of the exposure to the counterparty exceeds specified amounts. The notional amount and fair value of call options by counterparty and each counterparty's long-term credit ratings were as follows: ($ in millions) December 31, 2021 December 31, 2020 Credit Rating Notional Amount Fair Notional Amount Fair Counterparty S&P Moody's Bank of America, N.A. A+ Aa2 $ 193.0 $ 6.3 $ 205.2 $ 14.0 Barclays Bank PLC A A1 98.7 4.1 81.9 2.8 Citigroup Inc. BBB+ A3 — — — — Credit Suisse International A+ A1 14.0 0.3 — — Societe Generale A A1 — — — — Total $ 305.7 $ 10.7 $ 287.1 $ 16.8 As of December 31, 2021 and 2020, the Company held $10.9 million and $16.3 million, respectively, of cash and financial instruments received from counterparties for derivative collateral, which is included in Other liabilities on the Consolidated Balance Sheets. This derivative collateral limits the Company's maximum amount of economic loss due to credit risk that would be incurred if parties to the call options failed completely to perform according to the terms of the contracts to $0.3 million per counterparty. |
Deposit Asset on Reinsurance
Deposit Asset on Reinsurance | 12 Months Ended |
Dec. 31, 2021 | |
Reinsurance Disclosures [Abstract] | |
Deposit Asset on Reinsurance | Deposit Asset on Reinsurance The Company reinsures a $3.2 billion block of in force fixed and variable annuity business with a minimum crediting rate of 4.5%. The reinsured fixed business represents approximately 50% of the Company’s in force fixed annuity account balances. The arrangement contains investment guidelines and a trust to help meet the Company’s risk management objectives. Under the annuity reinsurance agreement, approximately $2.4 billion of fixed annuity reserves are reinsured on a coinsurance basis. The separate account assets and liabilities of approximately $0.8 billion are reinsured on a modified coinsurance basis and thus, remain on the Company's consolidated financial statements, but the related results of operations are fully reinsured. The annuity reinsurance agreement does not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk. Therefore, the Company recognizes the annuity reinsurance agreement using the deposit method of accounting. The assets transferred to the reinsurer as consideration paid is reported as a Deposit asset on reinsurance on the Company's Consolidated Balance Sheets. As amounts are received or paid, consistent with the underlying reinsured contracts, the Deposit asset on reinsurance is adjusted. The Deposit asset on reinsurance is accreted to the estimated ultimate cash flows using the interest method and the adjustment is reported as Net investment income. Interest accreted on the Deposit asset on reinsurance was $101.1 million and $97.3 million for the years ended December 31, 2021 and 2020, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | The Company conducts goodwill impairment testing at the reporting unit level at least annually or more frequently if events occur or circumstances change that indicate that the carrying amount may not be recoverable. See Note 1 for further description of impairment testing. At October 1, 2021, the Company performed a quantitative goodwill impairment test. Based on the results of the test, there were no events or circumstances that led to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. At October 1, 2020, the Company performed a quantitative goodwill impairment test. Based on the results of the test, there were no events or circumstances that led to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount with exception to lower than anticipated BCG wealth management sales outside of the education markets which triggered an impairment of the goodwill associated with the BCG business of the Retirement reporting unit. For the evaluation, the fair value of BCG was measured using a discounted cash flow method. The carrying amount exceeded the fair value, resulting in a $5.6 million goodwill impairment charge. In 2019, an annuity reinsurance transaction as described in Note 6 triggered a requirement to evaluate the goodwill associated with the annuity business of the Retirement reporting unit. For the evaluation, the fair value of the Retirement reporting unit was measured using a discounted cash flow method. The carrying amount exceeded the fair value, resulting in a $28.0 million goodwill impairment charge. Goodwill impairment charges are reported as Other expense - goodwill and intangible asset impairments in the Consolidated Statements of Operations. The changes in the carrying amount of goodwill by reportable segment for the year ended December 31, 2021 were as follows: ($ in millions) December 31, Impairments Acquisitions December 31, Property & Casualty $ 9.5 $ — $ — $ 9.5 Supplemental 19.6 — — 19.6 Retirement 4.5 — — 4.5 Life 9.9 — — 9.9 Total $ 43.5 $ — $ — $ 43.5 As of December 31, 2021, the outstanding amounts of definite-lived intangible assets subject to amortization are attributable to the acquisitions of BCG and NTA during 2019. The acquisition of BCG resulted in initial recognition of definite-lived intangible assets subject to amortization in the amount of $14.1 million and the acquisition of NTA resulted in initial recognition of definite-lived intangible assets subject to amortization in the amount of $160.4 million. As of December 31, 2021 the outstanding amounts of definite-lived intangible assets subject to amortization were as follows: ($ in millions) Weighted Average Useful Life (in Years) At inception: Value of business acquired 30 $ 94.4 Value of distribution acquired 17 54.0 Value of agency relationships 14 17.0 Value of customer relationships 10 9.1 Total 23 174.5 Accumulated amortization and impairments: Value of business acquired (17.6) Value of distribution acquired (11.6) Value of agency relationships (6.3) Value of customer relationships (4.4) Total (39.9) Net intangible assets subject to amortization: $ 134.6 Estimated future amortization of the Company's definite-lived intangible assets were as follows: ($ in millions) Year Ending December 31, 2022 $ 12.1 2023 11.2 2024 10.5 2025 9.8 2026 9.2 Thereafter 81.8 Total $ 134.6 Indefinite-lived intangible assets (not subject to amortization) as of December 31, 2021 were as follows: ($ in millions) December 31, Impairments Acquisitions December 31, Trade names $ 7.9 $ — $ — $ 7.9 State licenses 2.9 — — 2.9 Total $ 10.8 $ — $ — $ 10.8 The Company conducts intangible asset impairment testing at least annually, or more often if events, changes or circumstances indicate that the carrying amounts may not be recoverable. See Note 1 for further description of impairment testing. At October 1, 2021, the Company performed a qualitative assessment to determine whether it was necessary to perform quantitative intangible asset impairment tests. Based on the assessment of qualitative factors, there were no events or circumstances that led to a determination that it is more likely than not that the fair value of an intangible asset is less than its carrying amount. At October 1, 2020, the Company performed a qualitative assessment to determine whether it was necessary to perform quantitative intangible asset impairment tests. Based on the assessment of qualitative factors, there were no events or circumstances that led to a determination that it is more likely than not that the fair value of an intangible asset is less than its carrying amount with exception to lower than anticipated BCG wealth management sales outside of the education markets which triggered a requirement to evaluate the intangible assets associated with BCG. For the evaluation, the fair value of BCG's intangible assets were measured using discounted cash flow methods. The carrying amounts for VODA and trade names exceeded the fair values resulting in a $3.6 million intangible asset impairment charge for VODA and a $0.8 million intangible asset impairment charge for trade names. Intangible asset impairment charges are reported as Other expense - goodwill and intangible asset impairments in the Consolidated Statements of Operations. |
Unpaid Claims and Claim Expense
Unpaid Claims and Claim Expenses | 12 Months Ended |
Dec. 31, 2021 | |
Insurance Loss Reserves [Abstract] | |
Unpaid Claims and Claim Expenses | Unpaid Claims and Claim Expenses The following table is a summary reconciliation of the beginning and ending Property & Casualty unpaid claims and claim expense reserves for the periods indicated. The table presents reserves on both a gross and net (after reinsurance) basis. The total net Property & Casualty insurance claims and claim expense incurred amounts are reflected in the Consolidated Statements of Operations. The end of the year gross reserve (before reinsurance) balances and the reinsurance recoverable balances are reflected on a gross basis in the Consolidated Balance Sheets. ($ in millions) Years Ended December 31, 2021 2020 2019 Property & Casualty segment Gross reserves, beginning of year (1) $ 372.2 $ 387.0 $ 367.2 Less: reinsurance recoverables 112.9 120.5 89.7 Net reserves, beginning of year (2) 259.3 266.5 277.5 Incurred claims and claim expenses: Claims occurring in the current year 455.1 441.2 483.1 Decrease in estimated reserves for claims occurring in prior years (3) (7.2) (10.2) (7.5) Total claims and claim expenses incurred (4) 447.9 431.0 475.6 Claims and claim expense payments for claims occurring during: Current year 307.1 291.4 329.5 Prior years 148.0 146.8 157.1 Total claims and claim expense payments 455.1 438.2 486.6 Net reserves, end of year (2) 252.1 259.3 266.5 Plus: reinsurance recoverables 110.3 112.9 120.5 Gross reserves, end of year (1) $ 362.4 $ 372.2 $ 387.0 (1) Unpaid claims and claim expenses as reported in the Consolidated Balance Sheets also include reserves for Supplemental, Retirement and Life of $63.5 million, $66.6 million and $55.9 million as of December 31, 2021, 2020 and 2019, respectively, in addition to Property & Casualty reserves. (2) Reserves are net of anticipated reinsurance recoverables. (3) Shows the amounts by which the Company decreased its reserves in each of the periods indicated for claims occurring in previous periods to reflect subsequent information on such claims and changes in their projected final settlement costs. Also refer to the paragraphs below for additional information regarding prior years' reserve development recognized in 2021, 2020 and 2019. (4) Benefits, claims and settlement expenses as reported in the Consolidated Statements of Operations also include amounts for Supplemental, Retirement and Life of $169.8 million, $137.9 million, and $109.5 million for the years ended December 31, 2021, 2020 and 2019, respectively, in addition to Property & Casualty amounts. Underwriting results for Property & Casualty are significantly influenced by estimates of the Company's ultimate liability for insured events. There is a high degree of uncertainty inherent in the estimates of ultimate losses underlying the liability for unpaid claims and claim settlement expenses. This inherent uncertainty is particularly significant for liability-related exposures due to the extended period, often many years, which transpires between a loss event, receipt of related claims data from policyholders and ultimate settlement of the claim. Reserves for Property & Casualty claims include provisions for payments to be made on reported claims (case reserves), IBNR claims and associated settlement expenses (together, loss reserves). The process by which these reserves are established requires reliance upon estimates based on known facts and on interpretations of circumstances, including the Company's experience with similar cases and historical trends involving claim payments and related patterns, pending levels of unpaid claims and product mix, as well as other factors including court decisions, economic conditions, public attitudes and medical costs. The Company believes the Property & Casualty loss reserves are appropriately established based on available facts, laws, and regulations. The Company calculates and recognizes a single best estimate of the reserve (which is equal to the actuarial point estimate) as of each reporting date, for each line of business and its coverages for reported losses and for IBNR losses and as a result, the Company believes no other estimate is better than the recognized amount. Due to uncertainties involved, the ultimate cost of losses may vary materially from recognized amounts. The Company continually updates loss estimates using both quantitative and qualitative information from its reserving actuaries and information derived from other sources. Adjustments may be required as information develops which varies from experience, or, in some cases, augments data which previously was not considered sufficient for use in determining liabilities. The effects of these adjustments may be significant and are charged or credited to income in the period in which the adjustments are made. Numerous risk factors will affect more than one product line. One of these factors is changes in claim department practices, including claim closure rates, number of claims closed without payment, the use of third-party claim adjusters and the level of needed case reserve estimated by the adjuster. Other risk factors include changes in claim frequency, changes in claim severity, regulatory and legislative actions, court actions, changes in economic conditions and trends (e.g., medical costs, labor rates and the cost of materials), the occurrence of unusually large or frequent catastrophic loss events, timeliness of claim reporting, the state in which the claim occurred and degree of claimant fraud. The extent of the impact of a risk factor will also vary by coverages within a product line. Individual risk factors are also subject to interactions with other risk factors within product line coverages. While all product lines are exposed to these risks, there are some loss types or product lines for which the financial effect will be more significant. For instance, given the relatively large proportion (approximately 74.0% as of December 31, 2021) of the Company's reserves that are in the longer-tail auto liability coverages, regulatory and court actions, changes in economic conditions and trends, and medical costs could be expected to impact this product line more extensively than others. Reserves are established for claims as they occur for each line of business based on estimates of the ultimate cost to settle the claims. The actual loss results are compared to prior estimates and differences are recorded as re-estimates. The primary actuarial techniques (development of paid loss dollars, development of reported loss dollars, methods based on expected loss ratios and methods utilizing frequency and severity of claims) used to estimate reserves and provide for losses are applied to actual paid losses and reported losses (paid losses plus individual case reserves set by claim adjusters) for an accident year to create an estimate of how losses are likely to develop over time. An accident year refers to classifying claims based on the year in which the claims occurred. For estimating short-tail coverage reserves (e.g., homeowners and auto physical damage), which comprise approximately 26.0% of the Company's total loss reserves as of December 31, 2021, the primary actuarial technique utilized is the development of paid loss dollars due to the relatively quick claim settlement period. As it relates to estimating long-tail coverage reserves (primarily related to auto liability), which comprise approximately 74.0% of the Company's total loss reserves as of December 31, 2021, the primary actuarial technique utilized is the development of reported loss dollars due to the relatively long claim settlement period. In all of the loss estimation techniques referred to above, a ratio (development factor) is calculated which compares current results to results in the prior period for each accident year. Various development factors, based on historical results, are multiplied by the current experience to estimate the development of losses of each accident year from the current time period into the next time period. The development factors for the next time period for each accident year are compounded over the remaining calendar years to calculate an estimate of ultimate losses for each accident year. Occasionally, unusual aberrations in loss patterns are caused by factors such as changes in claim reporting, settlement patterns, unusually large losses, process changes, legal or regulatory environment changes, and other influences. In these instances, analyses of alternate development factor selections are performed to evaluate the effect of these factors and judgment is applied to make appropriate development factor assumptions needed to develop a best estimate of ultimate losses. Paid losses are then subtracted from estimated ultimate losses to determine the indicated loss reserves. The difference between indicated reserves and recorded reserves is the amount of reserve re-estimate. Reserves are re-estimated quarterly. When new development factors are calculated from actual losses that differ from estimated development factors used in previous reserve estimates, assumptions about losses and required reserves are revised based on the new development factors. Changes to reserves are recognized in the period in which development factor changes result in reserve re-estimates. Claim count estimates are also established for claims as they occur for each line of business based on estimates of the ultimate claim counts. These counts are derived by counting the number of claimants by insurance coverage. The primary actuarial techniques (development of paid claim counts and development of reported claim counts) used to estimate ultimate claim counts are applied to actual paid claim counts and reported claim counts (paid claims plus individual unpaid claims set by claim adjusters) for an accident year to create an estimate of how claims are likely to develop over time. An accident year refers to classifying claims based on the year in which the claim occurred. The ultimate claim count generally gives equal consideration to the results of the two actuarial techniques described. Occasionally, unusual aberrations in claim reporting patterns or claim payment patterns may occur. In these instances, analyses of alternate development factor selections are performed to evaluate the effect of these factors and judgment is applied to make appropriate development factor assumptions needed to develop a best estimate of ultimate claims. See tables on the following pages of Note 8 for details of the average annual percentage payout of incurred claims by age, also referred to as a history of claims duration and tables illustrating the incurred and paid claims development information by accident year on a net basis for the lines of homeowners, auto liability, and auto physical damage, which represents 99.0% of the Company's incurred losses for 2021. Numerous actuarial estimates of the types described above are prepared each quarter to monitor losses for each line of business, including the line's individual coverages, for reported losses and IBNR. Often, several different estimates are prepared for each detailed component, incorporating alternative analyses of changing claim settlement patterns and other influences on losses, from which the Company selects the best estimate for each component, occasionally incorporating additional analyses and judgment, as described above. These estimates also incorporate the historical impact of inflation into reserve estimates, the implicit assumption being that a multi-year average development factor represents an adequate provision. Based on the Company's review of these estimates, as well as the review of independent reserve studies, the best estimate of required reserves for each line of business, including the line's individual coverages, is determined by management and is recognized for each accident year, then the required reserves for each component are summed to create the reserve balances carried on the Company's Consolidated Balance Sheets. Based on the Company's products and coverages, historical experience, and various actuarial methodologies used to develop reserve estimates, the Company estimates that the potential variability of the Property & Casualty loss reserves within a reasonable probability of other possible outcomes may be approximately plus or minus 6.0% of reserves, which equates to plus or minus approximately $12.0 million of net income as of December 31, 2021. Although this evaluation reflects the most likely outcomes, it is possible the final outcome may fall below or above these estimates. Net favorable development of total reserves for Property & Casualty claims occurring in prior years was $7.2 million in 2021, $10.2 million in 2020 and $7.5 million in 2019. In 2021, the favorable development was the result of favorable loss trends in auto and homeowners loss emergence for accident years 2020 and prior. In 2020, the favorable development was predominantly the result of favorable loss trends in property for accident years 2019 and prior including the recognition of $4.8 million of subrogation received on the 2018 Camp Fire event. In 2019, the favorable development was predominantly the result of favorable loss trends in auto for accident years 2018 and prior. The Company completes a detailed study of Property & Casualty reserves based on information available at the end of each quarter and year. Trends of reported losses (paid amounts and case reserves on claims reported to the Company) for each accident year are reviewed and ultimate loss costs for those accident years are estimated. The Company engages an independent property and casualty actuarial consulting firm to prepare an independent study of the Company's Property & Casualty reserves at December 31 st of each year. The result of the independent actuarial study at December 31, 2021 was consistent with management's analysis and selected estimates and did not result in any adjustments to the Company's Property & Casualty reserves recognized. At the time each of the reserve analyses was performed, the Company believed that each estimate was based upon sound methodology and such methodologies were appropriately applied and that there were no trends which indicated the likelihood of future loss reserve development. The financial impact of the net reserve development was therefore accounted for in the period that the development was determined. No other adjustments were made in the determination of the liabilities during the periods covered by these consolidated financial statements. Management believes that, based on data currently available, it has reasonably estimated the Company's ultimate losses. Below is the average annual percentage payout of incurred claims by age, also referred to as a history of claims duration: Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 Homeowners 79.6 % 17.1 % 2.0 % 0.6 % 0.5 % 0.2 % — — — — Auto liability 40.0 % 34.2 % 14.1 % 6.5 % 3.3 % 1.3 % 0.5 % 0.1 % — — Auto physical damage 95.6 % 4.7 % (0.3) % — — — — — — — The following tables illustrate the incurred and paid claims development by accident year on a net basis for the lines of homeowners, auto liability and auto physical damage. Conditions and trends that have affected the development of these reserves in the past will not necessarily reoccur in the future. It may not be appropriate to use this cumulative history in the projection of future performance. The information about incurred and paid claims development for the years ended December 31, 2012 to 2020 is presented as unaudited supplementary information. ($ in millions) Homeowners Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, As of December 31, 2021 Total of Incurred- Cumulative Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012 $ 108.8 $ 109.2 $ 109.4 $ 106.5 $ 106.3 $ 106.3 $ 106.0 $ 106.0 $ 106.0 $ 106.0 $ — 21.6 2013 105.6 107.5 104.0 102.4 102.3 101.8 101.7 101.7 101.7 — 19.2 2014 111.6 113.5 109.1 106.8 106.6 106.6 106.4 106.4 — 20.1 2015 111.7 115.1 114.4 114.1 115.1 114.9 114.9 — 18.7 2016 115.9 118.6 117.0 117.9 117.9 117.9 — 19.9 2017 126.3 129.8 132.7 130.7 130.8 0.3 19.9 2018 166.8 157.4 158.9 158.1 0.4 21.1 2019 130.4 129.9 132.1 2.5 17.5 2020 155.7 151.9 11.1 19.6 2021 150.2 22.6 15.5 Total $ 1,270.0 ($ in millions) Homeowners Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012 $ 84.3 $ 101.6 $ 104.2 $ 105.2 $ 105.6 $ 105.9 $ 106.0 $ 106.0 $ 106.0 $ 106.0 2013 76.9 96.6 99.4 101.0 101.5 101.7 101.7 101.7 101.7 2014 83.3 103.0 105.7 106.1 106.3 106.4 106.4 106.4 2015 90.7 109.3 111.9 113.3 114.6 114.9 114.7 2016 95.8 113.2 115.1 117.5 117.7 117.8 2017 106.8 128.5 129.8 130.0 130.5 2018 130.5 152.4 157.0 157.4 2019 103.8 126.2 129.1 2020 106.8 138.7 2021 114.9 Total 1,217.2 Outstanding prior to 2012 — Prior years paid — Liabilities for claims and claim adjustment expenses, net of reinsurance $ 52.8 ($ in millions) Auto Liability Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, As of December 31, 2021 Total of Incurred- Cumulative Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012 $ 156.4 $ 153.8 $ 150.3 $ 149.3 $ 147.6 $ 145.8 $ 145.6 $ 145.5 $ 145.9 $ 145.8 $ — 18.6 2013 153.9 152.9 150.7 150.7 148.1 148.0 148.1 148.3 147.7 — 19.4 2014 155.1 157.2 158.5 159.9 159.8 159.4 159.3 159.4 0.2 20.3 2015 165.5 172.6 177.0 178.3 178.7 179.2 178.9 0.4 20.8 2016 180.4 184.4 184.6 186.6 188.1 189.2 0.5 21.3 2017 188.0 188.8 188.6 189.1 191.7 1.9 20.1 2018 200.3 195.3 192.9 189.8 3.8 19.5 2019 181.1 180.1 176.7 8.9 18.9 2020 137.0 134.9 20.1 13.1 2021 142.2 55.3 12.8 Total $ 1,656.3 ($ in millions) Auto Liability Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012 $ 61.3 $ 109.6 $ 127.2 $ 138.6 $ 142.9 $ 144.6 $ 145.1 $ 145.2 $ 145.3 $ 145.3 2013 62.2 108.9 131.2 140.0 145.3 146.8 147.4 147.4 147.5 2014 61.3 117.5 139.5 149.1 155.8 157.6 158.6 158.8 2015 70.8 134.5 158.0 170.1 174.5 176.7 177.7 2016 73.1 140.9 166.8 177.8 184.5 188.1 2017 70.7 139.5 166.6 179.8 185.8 2018 77.5 141.5 168.6 180.7 2019 69.7 129.1 155.5 2020 51.5 94.0 2021 52.9 Total 1,486.3 Outstanding prior to 2012 1.5 Prior years paid — Liabilities for claims and claim adjustment expenses, net of reinsurance $ 171.5 ($ in millions) Auto Physical Damage Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, As of December 31, 2021 Total of Incurred- Cumulative Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012 $ 83.8 $ 82.3 $ 83.4 $ 83.4 $ 83.4 $ 83.3 $ 83.3 $ 83.3 $ 83.3 $ 83.3 $ — 78.2 2013 91.4 88.9 88.7 88.6 88.5 88.5 88.5 88.5 88.4 — 80.9 2014 95.6 95.6 95.4 95.2 95.2 95.2 95.2 95.2 — 87.9 2015 99.3 98.0 97.6 97.5 97.6 97.6 97.6 — 87.5 2016 112.4 109.5 109.3 109.6 109.6 109.5 — 93.2 2017 115.5 111.8 110.5 110.6 110.5 — 91.3 2018 109.0 108.9 108.3 108.3 — 94.5 2019 111.6 110.5 110.0 (0.2) 92.2 2020 87.0 86.9 (0.8) 68.8 2021 105.0 (6.7) 69.7 Total $ 994.7 ($ in millions) Auto Physical Damage Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012 $ 80.5 $ 83.4 $ 83.4 $ 83.4 $ 83.3 $ 83.3 $ 83.3 $ 83.3 $ 83.3 $ 83.3 2013 85.1 88.7 88.6 88.5 88.5 88.5 88.5 88.4 88.4 2014 88.9 95.4 95.3 95.3 95.3 95.2 95.2 95.2 2015 92.1 97.9 97.7 97.6 97.6 97.6 97.6 2016 106.5 109.7 109.5 109.6 109.6 109.6 2017 105.2 110.8 110.7 110.6 110.6 2018 103.6 109.1 108.3 108.3 2019 106.2 110.7 110.1 2020 84.1 87.6 2021 97.3 Total 988.0 Outstanding prior to 2012 — Prior years paid — Liabilities for claims and claim adjustment expenses, net of reinsurance $ 6.7 The reconciliation of the net incurred and paid claims development tables to the liability for claims and claim adjustment expenses in the Consolidated Balance Sheet is as follows: ($ in millions) Year Ended December 31, 2021 Property & Casualty segment Net reserves Homeowners $ 52.8 Auto liability 171.5 Auto physical damage 6.7 Other short duration lines 2.8 Total net reserves for unpaid claims and claim adjustment expense, net of reinsurance 233.8 Reinsurance recoverable on unpaid claims Homeowners 1.4 Auto liability 99.9 Other short duration lines 9.0 Total reinsurance recoverable on unpaid claims 110.3 Insurance lines other than short duration (1) 63.5 Unallocated claims adjustment expenses 18.3 Total other than short duration and unallocated claims adjustment expenses 81.8 Gross reserves, end of year (1) $ 425.9 (1) This line includes Supplemental, Retirement and Life reserves included in the Consolidated Balance Sheet. |
Reinsurance and Catastrophes
Reinsurance and Catastrophes | 12 Months Ended |
Dec. 31, 2021 | |
Insurance [Abstract] | |
Reinsurance and Catastrophes | Reinsurance and Catastrophes In the normal course of business, the Company's insurance subsidiaries assume and cede reinsurance with other insurers. Reinsurance is ceded primarily to limit losses from large events and to permit recovery of a portion of direct losses; however, such a transfer does not relieve the originating insurance company of primary liability. The Company is a national underwriter and therefore has exposure to catastrophic losses in certain coastal states and other regions throughout the U.S. Catastrophes can be caused by various events including hurricanes, windstorms, hail, severe winter weather, wildfires and earthquakes, and the frequency and severity of catastrophes are inherently unpredictable. The financial impact from catastrophic losses results from both the total amount of insured exposure in the area affected by the catastrophe as well as the severity of the event. The Company seeks to reduce its exposure to catastrophe losses through the geographic diversification of its insurance coverage, deductibles, maximum coverage limits and the purchase of catastrophe reinsurance. The Company's catastrophe losses incurred of approximately $78.2 million, $84.4 million and $52.0 million for the years ended December 31, 2021, 2020 and 2019, respectively. For 2021, catastrophe losses were impacted by winter storm events, wind/hail/tornado events, as well as wildfires, tropical storms and hurricanes. The total amounts of reinsurance recoverable on unpaid insurance reserves classified as assets and reported in Other assets in the Consolidated Balance Sheets were as follows: ($ in millions) December 31, 2021 2020 Reinsurance recoverables on reserves and unpaid claims Property & Casualty Reinsurance companies $ 10.4 $ 13.2 State insurance facilities 99.9 99.7 Life and health 9.3 9.6 Total $ 119.6 $ 122.5 The Company recognizes the cost of reinsurance premiums over the contract periods for such premiums in proportion to the insurance protection provided. Amounts recoverable from reinsurers for unpaid claims and claim settlement expenses, including estimated amounts for unsettled claims, IBNR claims and policy benefits, are estimated in a manner consistent with the insurance liability associated with the policy. The effects of reinsurance on premiums written and contract deposits; premiums and contract charges earned; and benefits, claims and settlement expenses were as follows: ($ in millions) Gross Ceded to Other Companies (1) Assumed Net Year Ended December 31, 2021 Premiums written and contract deposits (2) $ 1,370.1 $ 23.1 $ 9.4 $ 1,356.4 Premiums and contract charges earned 913.2 33.3 9.7 889.6 Benefits, claims and settlement expenses 619.3 7.8 6.2 617.7 Year Ended December 31, 2020 Premiums written and contract deposits (2) 1,369.9 20.4 9.8 1,359.3 Premiums and contract charges earned 949.6 28.8 9.9 930.7 Benefits, claims and settlement expenses 475.7 (86.2) 7.0 568.9 Year Ended December 31, 2019 Premiums written and contract deposits (2) 1,337.8 23.9 10.6 1,324.5 Premiums and contract charges earned 917.6 30.4 10.8 898.0 Benefits, claims and settlement expenses 633.9 56.3 7.5 585.1 (1) Excludes the annuity reinsurance agreement accounted for using the deposit method that is discussed in Note 6. (2) This measure is not based on accounting principles generally accepted in the U.S. (non-GAAP). An explanation of this non-GAAP measure is contained in the Glossary of Selected Terms included as an exhibit in the Company's reports filed with the SEC. There were no losses from uncollectible reinsurance recoverables in the three years ended December 31, 2021. Past due reinsurance recoverables as of December 31, 2021 were not material. The Company maintains catastrophe excess of loss reinsurance coverage. For 2021, the Company's catastrophe excess of loss coverage consisted of one contract in addition to a minimal amount of coverage by the Florida Hurricane Catastrophe Fund (FHCF). The catastrophe excess of loss contract provided 95% coverage for catastrophe losses above a retention of $25.0 million per occurrence up to $170.0 million per occurrence. This contract consisted of three layers, each of which provided for one mandatory reinstatement. The layers were $25.0 million excess of $25.0 million, $40.0 million excess of $50.0 million and $85.0 million excess of $90.0 million. For liability coverages, in 2021, the Company reinsured each loss above a retention of $1.0 million with coverage up to $5.0 million on a per occurrence basis and $20.0 million in a clash event. A clash cover is a reinsurance casualty excess contract requiring two or more casualty coverages or policies issued by the Company to be involved in the same loss occurrence for coverage to apply. For property coverages, in 2021, the Company reinsured each loss above a retention of $1.0 million up to $5.0 million on a per risk basis, including catastrophe losses. Also, the Company could submit to the reinsurers two per risk losses from the same occurrence for a total of $8.0 million of property recovery in any one event. The maximum individual life insurance risk retained by the Company is $0.5 million on any individual life, while either $0.1 million or $0.125 million is retained on each group life policy depending on the type of coverage. Excess amounts are reinsured. The Company also maintains a life catastrophe reinsurance program. For 2021, the Company reinsured 100% of the catastrophe risk in excess of $1.0 million up to $35.0 million per occurrence, with one reinstatement. The Company's life catastrophe risk reinsurance program covers acts of terrorism and includes nuclear, biological and chemical explosions but excludes other acts of war. The Company retains all of the risk on its supplemental health product lines, including accidental death risk embedded within certain products. However, the Company’s other accidental death and dismemberment risk issued through all other policies and riders are ceded 100%. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt Indebtedness and scheduled maturities consisted of the following: ($ in millions) Interest Final December 31, 2021 2020 Short-term debt Bank Credit Facility Variable 2026 $ 249.0 $ 135.0 Long-term debt (1) 4.50% Senior Notes, Aggregate principal amount of $250.0 less unaccrued discount of $0.3 and $0.4 and unamortized debt issuance costs of $1.1 and $1.3 4.50% 2025 248.6 248.3 Federal Home Loan Bank borrowing 0.00% 2022 5.0 54.0 Total $ 502.6 $ 437.3 (1) The Company designates debt obligations as "long-term" based on maturity date at issuance. Credit Agreement with Financial Institutions (Bank Credit Facility) Effective July 12, 2021, the Company, as borrower, amended its Credit Agreement (Bank Credit Facility). The amended Bank Credit Facility increased the amount available on the senior revolving credit facility from $225.0 million to $325.0 million. PNC Bank, National Association and JPMorgan Chase Bank, N.A. serve as joint lead arrangers under the amended Bank Credit Facility, with The Northern Trust Company, KeyBank National Association, U.S. Bank National Association, Illinois National Bank and Comerica Bank as lenders participating in the syndicate. Terms and conditions of the Bank Credit Facility are substantially consistent with the prior agreement, with an interest rate based on LIBOR plus 115 basis points. As of December 31, 2021, the amount outstanding on the senior revolving credit facility was $249.0 million. The $76.0 million unused portion of the Bank Credit Facility is available for use and subject to a variable commitment fee, which was 0.15% on an annual basis at December 31, 2021. On December 31, 2021, the Company utilized $114.0 million of the senior revolving credit facility to fund a portion of the acquisition of Madison National that occurred effective January 1, 2022, and the Company expects that the unused portion of the senior revolving credit facility will be available for ongoing working capital, capital expenditures and general corporate expenditures. Senior Notes As of December 31, 2021, the Company had outstanding $250.0 million aggregate principal amount of 4.50% Senior Notes (Senior Notes), which will mature on December 1, 2025, issued at a discount of 0.265% resulting in an effective yield of 4.53%. Interest on the Senior Notes is payable semi-annually at a rate of 4.50%. The Senior Notes are redeemable in whole or in part, at any time, at the Company's option, at a redemption price equal to the greater of (1) 100% of the principal amount of the notes being redeemed or (2) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted, on a semi-annual basis, at the Treasury yield (as defined in the indenture) plus 35 basis points, plus, in either of the above cases, accrued interest to the date of redemption. Federal Home Loan Bank Borrowings In 2017, Horace Mann Insurance Company (HMIC) became a member of the FHLB, which provides HMIC with access to collateralized borrowings and other FHLB products. As membership requires the ownership of membership stock, in June 2017, HMIC purchased common stock to meet the membership requirement. Any borrowing from the FHLB requires the purchase of FHLB activity-based common stock in an amount equal to 4.5% of the borrowing, or a lower percentage - such as 2.0% based on the Reduced Capitalization Advance Program. In the fourth quarter of 2017, HMIC purchased common stock to meet the activity-based requirement. In 2021, the Board authorized a maximum amount equal to 15% of net aggregate admitted assets less separate account assets of the insurance subsidiaries for FHLB borrowings. As of December 31, 2021, the Company had $5.0 million of borrowings outstanding with FHLB that mature on May 16, 2022. There is no interest on this borrowing. HMIC's FHLB borrowings of $5.0 million are included in Long-term debt in the Consolidated Balance Sheets. Covenants The Company is in compliance with all of the financial covenants contained in the Senior Notes indenture and the Bank Credit Facility agreement, consisting primarily of relationships of (1) debt to capital, (2) net worth, as defined in the financial covenants, (3) insurance subsidiaries' risk-based capital and (4) securities subject to funding agreements and repurchase agreements. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The income tax assets and liabilities included in Other assets and Other liabilities, respectively, in the Consolidated Balance Sheets were as follows: ($ in millions) December 31, 2021 2020 Income tax (asset) liability Current $ (9.5) $ (12.6) Deferred 190.5 206.7 Deferred tax assets and liabilities are recognized for all future tax consequences attributable to "temporary differences" between the financial statement carrying value of existing assets and liabilities and their respective tax bases. There are no deferred tax liabilities that have not been recognized. The "temporary differences" that gave rise to the deferred tax balances were as follows: ($ in millions) December 31, 2021 2020 Deferred tax assets Unearned premium reserve reduction $ 11.7 $ 11.5 Compensation accruals 9.6 9.5 Impaired securities 2.3 2.1 Other comprehensive income - net funded status of benefit plans 2.7 3.0 Discounting of unpaid claims and claim expense tax reserves 2.5 2.5 Intangibles 0.1 — Postretirement benefits other than pensions 0.3 0.3 Total gross deferred tax assets 29.2 28.9 Deferred tax liabilities Other comprehensive income - net unrealized gains on securities 101.1 124.7 Deferred policy acquisition costs 37.3 36.3 Life insurance future policy benefit reserve 30.7 26.7 Life insurance future policy benefit reserve (transitional rule) 8.5 10.7 Discounting of unpaid claims and claim expense tax reserves (transitional rule) 0.6 0.8 Investment related adjustments 37.3 34.2 Intangibles — 0.2 Other, net 4.2 2.0 Total gross deferred tax liabilities 219.7 235.6 Net deferred tax liability $ 190.5 $ 206.7 The Company evaluated sources and character of income, including historical earnings, loss carryback potential, taxable income from future reversals of existing taxable temporary differences, future taxable income exclusive of reversing temporary differences, and taxable income from prudent and feasible tax planning strategies. Although realization of deferred tax assets is not assured, the Company believes it is more likely than not that gross deferred tax assets will be fully realized and that a valuation allowance with respect to the realization of the total gross deferred tax assets was not necessary as of December 31, 2021 and 2020. The components of the provision for income tax expense were as follows: ($ in millions) Years Ended December 31, 2021 2020 2019 Current $ 27.7 $ 16.9 $ 31.5 Deferred 4.4 9.4 20.5 Total income tax expense $ 32.1 $ 26.3 $ 52.0 Income tax expense for the following periods differed from the expected tax computed by applying the federal corporate tax rate of 21% for 2021, 2020 and 2019 to income before income taxes as follows: ($ in millions) Years Ended December 31, 2021 2020 2019 Expected federal tax on income $ 36.7 $ 33.5 $ 49.6 Add (deduct) tax effects of: Tax-exempt interest (3.9) (4.2) (4.2) Dividend received deduction (2.2) (1.5) (1.4) Goodwill impairment — 0.2 5.9 CARES Act net operating loss carryback — (2.8) — Employee share-based compensation (1.3) (0.5) 0.3 Compensation deduction limitation 1.5 0.7 0.7 Prior year adjustments 0.1 (0.2) (0.7) Other, net 1.2 1.1 1.8 Income tax expense provided on income $ 32.1 $ 26.3 $ 52.0 The Company's federal income tax returns for years prior to 2014 are no longer subject to examination by the Internal Revenue Service (IRS). The Company recognizes tax benefits from tax return positions only if it is more likely than not the position will be sustainable, upon examination, on its technical merits and any relevant administrative practices or precedents. As a result, the Company applies a more likely than not recognition threshold for all tax uncertainties. The Company records liabilities for uncertain tax filing positions where it is more likely than not that the position will not be sustainable upon audit by taxing authorities. These liabilities are reevaluated routinely and are adjusted appropriately based upon changes in facts or law. The Company has no unrecorded liabilities from uncertain tax filing positions. HMEC and its subsidiaries file a consolidated federal income tax return. The federal income tax sharing agreements between HMEC and its subsidiaries, as approved by the Board, provide that tax on income is charged to each subsidiary as if it were filing a separate tax return with the limitation that each subsidiary will receive the benefit of any losses or tax credits to the extent utilized in the consolidated tax return. Intercompany balances are settled quarterly with a final settlement after filing the consolidated federal income tax return with the IRS. National Teachers Associates Life Insurance Company and NTA Life Insurance Company of New York are not included in HMEC's consolidated federal income tax return and will file separate federal income tax returns until they are eligible to participate in HMEC's consolidated federal income tax return. This is expected to occur in 2025. A reconciliation of the beginning and ending amounts of unrecognized tax benefits, excluding interest and penalties, is as follows: ($ in millions) Years Ended December 31, 2021 2020 2019 Balance as of the beginning of the year $ 2.3 $ 2.0 $ 1.8 Increases related to prior year tax positions — 0.2 0.1 Decreases related to prior year tax positions (0.1) — — Increases related to current year tax positions — 0.1 0.1 Settlements — — — Lapse of statute (0.5) — — Balance as of the end of the year $ 1.7 $ 2.3 $ 2.0 The Company's effective tax rate would be affected to the extent there were unrecognized tax benefits that could be recognized. There are no positions for which it is reasonably possible that the total amount of unrecognized tax benefit will significantly change within the next 12 months. The Company classifies all tax related interest and penalties as income tax expense. Interest and penalties were both immaterial in each of the years ended December 31, 2021, 2020 and 2019. |
Operating Leases
Operating Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Operating Leases | Operating Leases The Company has various operating lease agreements, primarily for real estate offices. Such leases have remaining lease terms of 1 year to 4 years, some of which may include options to extend certain leases for up to an additional 25 years. The components of lease expense were as follows: ($ in millions) Years Ended December 31, 2021 2020 Operating lease cost $ 4.3 $ 4.5 Short-term lease cost 0.1 0.1 Total lease cost $ 4.4 $ 4.6 Supplemental cash flow information related to operating leases was as follows: ($ in millions) Years Ended December 31, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities $ 4.3 $ 4.5 Supplemental balance sheet information related to operating leases were as follows: ($ in millions, except lease terms and discount rates) December 31, 2021 2020 Assets: Right of use assets, included in Other assets $ 9.0 $ 12.6 Liabilities: Operating lease liabilities, included in Other liabilities $ 10.0 $ 13.6 Weighted average remaining lease term 3.07 3.63 Weighted average discount rate 3.67 % 3.75 % Future minimum lease payments under non-cancellable operating leases as of December 31, 2021 are as follows: ($ in millions) Year Ending December 31, 2022 $ 4.2 2023 3.5 2024 2.0 2025 0.8 2026 — Thereafter — Total future minimum lease payments 10.5 Less imputed interest (0.5) Total $ 10.0 |
Shareholders' Equity and Share-
Shareholders' Equity and Share-Based Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Shareholders' Equity and Share-Based Compensation | Shareholders' Equity and Share-Based Compensation Share Repurchase Program and Treasury Shares On September 30, 2015, the Board authorized a share repurchase program allowing repurchases of up to $50.0 million of HMEC's common stock, par value $0.001 (Program). The Program authorizes the repurchase of common shares in open market or privately negotiated transactions, from time to time, depending on market conditions. The Program does not have an expiration date and may be limited or terminated at any time without notice. During 2021, the Company repurchased 140,758 shares of its common stock, or 0.3% of the shares outstanding as of December 31, 2020, at an aggregate cost of $5.3 million, or an average price of $37.49 per share. During 2020, the Company repurchased 52,095 shares of its common stock, or 0.1% of the shares outstanding as of December 31, 2019, at an aggregate cost of $2.2 million, or an average price of $41.17 per share. During 2019, the Company did not repurchase any shares of its common stock. In total and through December 31, 2021, 1,040,226 shares were repurchased under the Program at an average price of $33.33 per share. The repurchase of shares was funded through use of cash. As of December 31, 2021, $15.3 million remained authorized for future share repurchases under the Program. At December 31, 2021, the Company held 25,043,337 shares in treasury. Authorization of Preferred Stock In 1996, the shareholders of HMEC approved authorization of 1,000,000 shares of 0.001 par value preferred stock. The Board is authorized to (1) direct the issuance of the preferred stock in one or more series, (2) fix the dividend rate, conversion or exchange rights, redemption price and liquidation preference, of any series of the preferred stock, (3) fix the number of shares for any series and (4) increase or decrease the number of shares of any series. No shares of preferred stock were issued or outstanding at December 31, 2021 and 2020. 2010 Comprehensive Executive Compensation Plan In 2010, the shareholders of HMEC approved the 2010 Comprehensive Executive Compensation Plan (the Comprehensive Plan). The purpose of the Comprehensive Plan is to aid the Company in attracting, retaining, motivating and rewarding employees and non-employee Directors; to provide for equitable and competitive compensation opportunities, including deferral opportunities; to encourage long-term service; to recognize individual contributions and reward achievement of Company goals; and to promote the creation of long-term value for the Company's shareholders by closely aligning the interests of plan participants with those of shareholders. The Comprehensive Plan authorizes share-based and cash-based incentives for plan participants. In 2012, the shareholders of HMEC approved the implementation of a fungible share pool under which grants of full value shares will count against the share limit as two and one half shares for every share subject to a full value award. In May 2021, the shareholders of HMEC approved an amendment and restatement of the Comprehensive Plan which included an increase of 2,500,000 in the number of shares of common stock reserved for issuance under the Comprehensive Plan. As of December 31, 2021, approximately 2,688,416 shares were available for grant under the Comprehensive Plan. Shares of common stock issued under the Comprehensive Plan may be either authorized and unissued shares of HMEC or shares that have been reacquired by HMEC; however, new shares have been issued historically. As further described in the paragraphs below, CSUs, stock options and RSUs under the Comprehensive Plan were as follows: December 31, 2021 2020 2019 CSUs related to deferred compensation for Directors 26,313 23,609 28,526 CSUs related to deferred compensation for employees 16,571 20,467 25,194 Stock options 1,032,128 916,287 908,557 RSUs related to incentive compensation 834,981 823,393 889,438 Total 1,909,993 1,783,756 1,851,715 Director Common Stock Units Deferred compensation for Directors is in the form of CSUs, which represent an equal number of common shares to be issued in the future. The outstanding units of Directors serving on the Board accrue dividends at the same rate as dividends paid to HMEC's shareholders. These dividends are reinvested into additional CSUs. Employee Common Stock Units Deferred compensation for employees is in the form of CSUs, which represent an equal number of common shares to be issued in the future. Distributions of employee deferred compensation are allowed to be either in common shares or cash. Through December 31, 2021, all distributions have been in cash. The outstanding units accrue dividends at the same rate as dividends paid to HMEC's shareholders. These dividends are reinvested into additional CSUs. Stock Options Options to purchase shares of HMEC common stock may be granted to executive officers, other employees and Directors. The options become exercisable in installments based on service generally beginning in the first year from the date of grant and generally become fully vested 4 years from the date of grant. The options generally expire 7 to 10 years from the date of grant. The exercise price of the option is equal to the market price of HMEC's common stock on the date of grant resulting in a grant date intrinsic value of $0. Changes in outstanding options were as follows: Weighted Average Range of Options Outstanding Vested and December 31, 2020 $38.99 $28.88-$42.95 916,287 437,197 Granted $40.10 $40.10-$40.10 183,272 — Vested $41.27 $28.88-$42.95 — 163,519 Exercised $31.35 $31.01-$32.35 (8,015) (8,015) Forfeited $41.39 $41.10-$42.73 (49,411) — Expired $42.23 $41.83-$42.73 (10,005) — December 31, 2021 $39.10 $28.88-$42.95 1,032,128 592,701 Option information segregated by ranges of exercise prices were as follows: December 31, 2021 Total Outstanding Options Vested and Exercisable Options Range of Options Weighted Weighted Options Weighted Weighted $28.88-$33.41 195,192 $30.81 3.59 195,192 $30.81 3.59 $36.04-$41.95 687,556 $40.61 7.52 285,474 $40.84 6.35 $42.73-$42.73 149,380 $42.95 6.18 112,035 $42.95 6.18 Total 1,032,128 $39.10 6.58 592,701 $37.94 5.41 The weighted average exercise prices of vested and exercisable options as of December 31, 2020 and 2019 were $36.59 and $34.81, respectively. As of December 31, 2021, based on a closing stock price of $38.70 per share, the aggregate intrinsic (in-the-money) values of vested options and all options outstanding were $1.5 million and $1.5 million, respectively. Restricted Stock Units RSUs may be granted to executive officers, other employees and Directors and represent an equal number of common shares to be issued in the future. The RSUs vest in installments based on service or attainment of performance criteria generally beginning in the first year from the date of grant and generally become fully vested 1 to 4 years from the date of grant. The outstanding units accrue dividends at the same rate as dividends paid to HMEC's shareholders. These dividends are reinvested into additional RSUs. Changes in outstanding RSUs were as follows: Total Outstanding Units Vested Units Units Weighted Average Units Weighted Average December 31, 2020 823,393 $33.88 484,984 $27.48 Granted (1) 205,474 $41.29 — — Adjustment for performance achievement 14,272 $45.01 — — Vested — — 145,319 $42.15 Forfeited (47,214) $43.08 — — Distributed (2) (160,944) $38.43 (160,944) — December 31, 2021 834,981 $34.50 469,359 $28.27 (1) Includes dividends reinvested into additional RSUs. (2) Includes distributed units which were utilized to satisfy withholding taxes due on the distribution. |
Statutory Information and Divid
Statutory Information and Dividend Restrictions | 12 Months Ended |
Dec. 31, 2021 | |
Insurance [Abstract] | |
Statutory Information and Dividend Restrictions | The insurance departments of various states in which the insurance subsidiaries of HMEC are domiciled recognize as net income and surplus those amounts determined in conformity with statutory accounting principles prescribed or permitted by the insurance departments, which differ in certain respects from GAAP. HMEC has principal insurance subsidiaries domiciled in Illinois, New York and Texas. The statutory financial statements of these subsidiaries are prepared in accordance with accounting principles prescribed or permitted by the Illinois Department of Insurance, the New York Department of Insurance and the Texas Department of Insurance, as applicable. Prescribed statutory accounting principles include a variety of publications of the National Association of Insurance Commissioners (NAIC), as well as state laws, regulations and general administrative rules. In converting from statutory to GAAP, typical adjustments include DAC, certain reinsurance transactions, the inclusion of statutory non-admitted assets and the inclusion of net unrealized investment gains or losses in shareholders' equity relating to fixed maturity securities. The following table includes selected information for HMEC's insurance subsidiaries: ($ in millions) Year Ended December 31, 2021 2020 2019 Consolidated net income, statutory basis $ 117.2 $ 141.9 $ 62.3 Consolidated capital and surplus, statutory basis (1) $ 1,017.4 $ 937.3 $ 868.8 (1) Subject to regulatory restrictions. The NAIC has risk-based capital guidelines to evaluate the adequacy of statutory capital and surplus in relation to risks assumed in investments, reserving policies, and volume and types of insurance business written. At December 31, 2021 and 2020, the minimum statutory-basis capital and surplus required to be maintained by HMEC's insurance subsidiaries was $123.0 million and $113.2 million, respectively. At December 31, 2021 and 2020, statutory capital and surplus of each of the Company's insurance subsidiaries was above required levels. The restricted net assets of HMEC's insurance subsidiaries were $26.2 million and $26.9 million as of December 31, 2021 and 2020, respectively. The minimum statutory basis capital and surplus amount at each date is the total estimated authorized control level risk-based capital for all of HMEC's insurance subsidiaries combined. Authorized control level risk-based capital represents the minimum level of statutory basis capital and surplus necessary before the insurance commissioner in the respective state of domicile is authorized to take whatever regulatory actions considered necessary to protect the best interests of the policyholders and creditors of the insurer. The amount of restricted net assets represents the combined fair value of securities on deposit with governmental agencies for the insurance subsidiaries as required by law in various states in which the insurance subsidiaries of HMEC conduct business. HMEC relies largely on dividends from its insurance subsidiaries to meet its obligations for payment of principal and interest on debt, dividends to shareholders and parent company operating expenses, including tax payments pursuant to tax sharing agreements. Payments for share repurchase programs also have this dependency. HMEC's insurance subsidiaries are subject to various regulatory restrictions which limit the amount of annual dividends or other distributions, including loans or cash advances, available to HMEC without prior approval of the insurance regulatory authorities. As a result, HMEC may not be able to receive dividends from such subsidiaries at times and in amounts necessary to pay desired dividends to shareholders. |
Retirement Plans and Other Post
Retirement Plans and Other Postretirement Benefits | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
Retirement Plans and Other Postretirement Benefits | Retirement Plans and Other Postretirement BenefitsThe Company sponsors two qualified and three non-qualified retirement plans. Substantially all employees participate in the 401(k) plan. Both the qualified defined benefit plan and the two non-qualified supplemental defined benefit plans have been frozen since 2002. All participants in the frozen plans are 100% vested in their accrued benefit and all non-qualified supplemental defined benefit plan participants are receiving payments. Certain employees participate in a non-qualified defined contribution plan. Qualified Plans All employees participate in the 401(k) plan and receive a 100% vested 3% "safe harbor" company contribution based on employees' eligible earnings. The Company matches each dollar of employee contributions up to a 5% maximum — in addition to maintaining the automatic 3% "safe harbor" contribution. The matching company contribution vests after 5 years of service. The 401(k) plan is fully funded. The Company's policy for the frozen defined benefit plan is to contribute to the plan amounts which are actuarially determined to provide sufficient funding to meet future benefit payments as defined by federal laws and regulations. For the two qualified plans, all assets are held in their respective plan trusts. Non-qualified Plans The non-qualified plans were established for specific employees whose otherwise eligible earnings exceeded the statutory limits under the qualified plans. Benefit accruals under the non-qualified supplemental defined benefit plans were frozen in 2002 and all participants are currently in payment status. Both the non-qualified frozen supplemental defined benefit plans and the non-qualified contribution plan are unfunded plans with the Company's contributions made at the time payments are made to participants. Total Expense and Contribution Plans' Information Total expense recognized for the non-qualified defined contribution, 401(k), defined benefit and supplemental retirement plans was $9.2 million, $10.0 million and $9.3 million for the years ended December 31, 2021, 2020 and 2019, respectively. Contributions to employees' accounts under the 401(k) plan and the non-qualified defined contribution plan, as well as total assets of the plans, were as follows: ($ in millions) Year Ended December 31, 2021 2020 2019 401(k) plan Contributions to employees' accounts $ 8.2 $ 8.2 $ 8.2 Total assets at the end of the year 246.9 228.4 206.2 Non-qualified defined contribution plan Contributions to employees' accounts 0.1 0.1 0.1 Total assets at the end of the year — — — Defined Benefit Plan and Supplemental Retirement Plans The following tables summarize the funded status of the defined benefit and supplemental retirement pension plans as of December 31, 2021, 2020 and 2019 (the measurement dates) and identify (1) the assumptions used to determine the projected benefit obligation and (2) the components of net pension cost for the defined benefit plan and supplemental retirement plans for the following periods: ($ in millions) Defined Benefit Plan Supplemental December 31, December 31, 2021 2020 2019 2021 2020 2019 Change in benefit obligation: Projected benefit obligation at beginning of year $ 24.3 $ 24.8 $ 25.1 $ 15.7 $ 15.2 $ 15.4 Service cost 0.6 0.7 0.7 — — — Interest cost 0.5 0.7 1.0 0.3 0.5 0.6 Actuarial loss (gain) (0.6) 1.0 — (0.2) 1.3 0.5 Benefits paid (2.6) (1.5) (2.0) (1.3) (1.3) (1.3) Settlements — (1.4) — — — — Projected benefit obligation at end of year $ 22.2 $ 24.3 $ 24.8 $ 14.5 $ 15.7 $ 15.2 Change in plan assets: Fair value of plan assets at beginning of year $ 22.0 $ 23.2 $ 22.1 $ — $ — $ — Actual return on plan assets 1.0 2.3 3.5 — — — Employer contributions — — — 1.3 1.3 1.3 Benefits paid (2.6) (1.5) (2.0) (1.3) (1.3) (1.3) Expenses paid (0.6) (0.6) (0.4) — — — Settlements — (1.4) — — — — Fair value of plan assets at end of year $ 19.8 $ 22.0 $ 23.2 $ — $ — $ — Funded status $ (2.4) $ (2.3) $ (1.6) $ (14.5) $ (15.7) $ (15.2) Prepaid (accrued) benefit expense $ 4.9 $ 5.5 $ 6.7 $ 8.7 $ (9.3) $ (9.9) Total amount recognized in Consolidated Balance Sheets, all in Other liabilities $ (2.4) $ (2.3) $ (1.7) $ (14.5) $ (15.7) $ (15.2) Amounts recognized in accumulated other comprehensive income (loss) (AOCI): Prior service cost $ — $ — $ — $ — $ — $ — Net actuarial loss (7.3) (7.8) (8.3) (6.5) (6.4) (5.3) Total amount recognized in AOCI $ (7.3) $ (7.8) $ (8.3) $ (6.5) $ (6.4) $ (5.3) Information for pension plans with an accumulated benefit obligation greater than plan assets: Projected benefit obligation $ 22.2 $ 24.3 $ 24.8 $ 14.5 $ 15.7 $ 15.2 Accumulated benefit obligation 22.2 24.3 24.8 14.5 15.7 15.2 Fair value of plan assets 19.8 22.0 23.2 — — — The change in the Company's AOCI for the defined benefit plans for the year ended December 31, 2021 was primarily attributable to an increase in the discount rate and better than expected asset returns partially offset by updates to mortality assumptions, updated census dates and an updated mortality projection scale. The change in the Company's AOCI for the defined benefit plans for the year ended December 31, 2020 was primarily attributable to better than expected asset returns, updates to mortality assumptions and updated census dates partially offset by a decrease in the discount rate and an updated mortality projection scale. The change in the Company's AOCI for the defined benefit plans for the year ended December 31, 2019 was primarily attributable to better than expected asset returns, updates to mortality assumptions and updated census dates offset by a decrease in the discount rate. ($ in millions) Defined Benefit Plan Supplemental Year Ended December 31, Year Ended December 31, 2021 2020 2019 2021 2020 2019 Components of net periodic pension (income) expense: Service cost: Benefit accrual $ — $ — $ — $ — $ — $ — Other expenses 0.6 0.7 0.7 — — — Interest cost 0.5 0.7 1.0 0.3 0.5 0.6 Expected return on plan assets (0.9) (1.0) (1.3) — — — Settlement loss — 0.5 — — — — Amortization of: Prior service cost — — — — — — Actuarial loss 0.4 0.3 0.3 0.4 0.3 0.3 Net periodic pension expense $ 0.6 $ 1.2 $ 0.7 $ 0.7 $ 0.8 $ 0.9 Changes in plan assets and benefit obligations included in other comprehensive income (loss): Prior service cost $ — $ — $ — $ — $ — $ — Net actuarial loss (gain) (0.2) 0.3 (1.8) (0.2) 1.3 0.5 Amortization of: Prior service cost — — — — — — Actuarial loss (0.4) (0.8) (0.3) (0.4) (0.3) (0.2) Total recognized in other $ (0.6) $ (0.5) $ (2.1) $ (0.6) $ 1.0 $ 0.3 Weighted average assumptions used to determine expense: Discount rate 2.08 % 3.10 % 4.20 % 2.08 % 3.10 % 4.20 % Expected return on plan assets 4.74 % 4.80 % 5.75 % * * * Annual rate of salary increase * * * * * * Weighted average assumptions used to determine benefit obligations as of December 31: Discount rate 2.57 % 2.08 % 3.10 % 2.57 % 2.08 % 3.10 % Expected return on plan assets 4.74 % 4.80 % 5.75 % * * * Annual rate of salary increase * * * * * * * Not applicable. The discount rates at December 31, 2021 were based on the average yield for long-term, high-grade securities available during the benefit payout period. To set its discount rate, the Company looks to leading indicators, including the Mercer Above Mean Yield Curve. The assumption for the long-term rate of return on plan assets was determined by considering actual investment experience during the lifetime of the plan, balanced with reasonable expectations of future growth considering the various classes of assets and percentage allocation for each asset class. The Company has an investment policy for the defined benefit pension plan that aligns the assets within the plan's trust to an approximate allocation of 35% equity and 65% fixed income funds. Management believes this allocation will produce the targeted long-term rate of return on assets necessary for payment of future benefit obligations, while providing adequate liquidity for payments to current beneficiaries. Assets are reviewed against the defined benefit pension plan's investment policy and the trustee has been directed to adjust invested assets at least quarterly to maintain the target allocation percentages. Fair values of the equity security funds and fixed income funds have been determined from public quotations. The following table presents the fair value hierarchy for the Company's defined benefit pension plan assets, excluding cash held. ($ in millions) Fair Value Measurements at Total Level 1 Level 2 Level 3 December 31, 2021 Asset category Equity security funds (1) United States $ 3.8 $ — $ 3.8 $ — International 3.3 — 3.3 — Fixed income funds 12.4 — 12.4 — Short-term investment funds 0.3 0.3 — — Total $ 19.8 $ 0.3 $ 19.5 $ — December 31, 2020 Asset category Equity security funds (1) United States $ 4.4 $ — $ 4.3 $ — International 4.3 — 4.3 — Fixed income funds 13.1 — 13.1 — Short-term investments funds 0.2 0.2 — — Total $ 22.0 $ 0.2 $ 21.7 $ — (1) None of the trust fund assets for the defined benefit pension plan have been invested in shares of HMEC's common stock. There were no Level 3 assets held during the years ended December 31, 2021 and 2020. In 2022, the Company expects amortization of net losses of $0.3 million and $0.4 million for the defined benefit plan and the supplemental retirement plans, respectively, and expects no amortization of prior service cost for the supplemental retirement plans to be included in net periodic pension expense. Postretirement Benefits Other than Pensions As of December 31, 2006, upon discontinuation of retiree medical benefits, Health Reimbursement Accounts (HRAs) were established for eligible participants and totaled $7.3 million. As of December 31, 2021, the balance of the previously established HRAs was $1.2 million. Funding of HRAs was $0.0 million, $0.1 million and $0.1 million for the years ended December 31, 2021, 2020 and 2019, respectively. 2022 Contributions In 2022, there is no minimum funding requirement for the Company's defined benefit plan. The following table discloses that minimum funding requirement and the expected full year contributions for the Company's plans. ($ in millions) Defined Benefit Pension Plans Defined Supplemental Minimum funding requirement for 2021 $ — $ — Expected contributions (approximations) for the year ended December 31, 2022 at the time of issuance of this Form 10-K (1) $ — $ 1.3 (1) HMEC's Annual Report on Form 10-K for the year ended December 31, 2021. Estimated Future Benefit Payments The Company's defined benefit plan may be subject to settlement accounting. Assumptions for both the number of individuals retiring in a calendar year and their elections regarding lump sum distributions are significant factors impacting the payout patterns for each of the plans below. Therefore, actual results could vary from the estimates shown. Estimated future benefit payments as of December 31, 2021 were as follows: ($ in millions) 2022 2023 2024 2025 2026 2027-2031 Pension plans Defined benefit plan $ 2.3 $ 2.1 $ 2.1 $ 2.0 $ 1.8 $ 6.8 Supplemental retirement plans 1.3 1.3 1.2 1.2 1.2 5.1 |
Contingencies and Commitments
Contingencies and Commitments | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Commitments | Contingencies and Commitments Lawsuits and Legal Proceedings Companies in the insurance industry have been subject to substantial litigation resulting from claims, disputes and other matters. For instance, they have faced expensive claims, including class action lawsuits, alleging, among other things, improper sales practices and improper claims settlement procedures. Negotiated settlements of certain such actions have had a material adverse effect on many insurance companies. At the time of issuance of this Annual Report on Form 10-K, the Company does not have pending litigation from which there is a reasonable possibility of material loss. Assessments for Insolvencies of Unaffiliated Insurance Companies The Company is contingently liable for possible assessments under regulatory requirements pertaining to potential insolvencies of unaffiliated insurance companies. Liabilities, which are established based upon regulatory guidance, have generally been insignificant. Investment Commitments The Company has outstanding commitments to fund investments primarily in limited partnership interests. Such unfunded commitments were $858.1 million and $571.9 million for the years ended December 31, 2021 and 2020, respectively. |
Comprehensive Income (Loss) and
Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss) | Comprehensive income (loss) represents the change in shareholders' equity during a reporting period from transactions and other events and circumstances from non-shareholder sources. For the Company, comprehensive income (loss) is equal to net income plus or minus the after tax change in net unrealized investment gains (losses) on fixed maturity securities and the after tax change in net funded status of benefit plans for the periods as shown in the Consolidated Statements of Changes in Shareholders' Equity. AOCI represents the accumulated change in shareholders' equity from these transactions and other events and circumstances from non-shareholder sources as shown in the Consolidated Balance Sheets. In the Consolidated Balance Sheets, the Company recognizes the net funded status of benefit plans as a component of AOCI, net of tax. Comprehensive Income (Loss) The components of comprehensive income (loss) were as follows: ($ in millions) Year Ended December 31, 2021 2020 2019 Net income $ 142.8 $ 133.3 $ 184.4 Other comprehensive income (loss): Change in net unrealized investment gains (losses) on fixed maturity securities: Net unrealized investment gains (losses) on securities arising during the period (104.9) 184.0 327.3 Less: reclassification adjustment for net investment gains (losses) included in income before income tax (8.5) 11.2 157.4 Total, before tax (96.4) 172.8 169.9 Income tax expense (benefit) (20.8) 36.9 36.4 Total, net of tax (75.6) 135.9 133.5 Change in net funded status of benefit plans: Before tax 1.2 (0.5) 1.8 Income tax expense (benefit) 0.2 (0.1) 0.4 Total, net of tax 1.0 (0.4) 1.4 Total comprehensive income $ 68.2 $ 268.8 $ 319.3 Accumulated Other Comprehensive Income (Loss) The following table reconciles the components of AOCI for the periods indicated. ($ in millions) Net Unrealized Investment Gains (Losses) on Securities (1)(2) Net Funded Status of Benefit Plans (1) Total (1) Beginning balance, January 1, 2021 $ 366.3 $ (11.2) $ 355.1 Other comprehensive income (loss) before reclassifications (82.3) 1.0 (81.3) Amounts reclassified from AOCI 6.7 — 6.7 Net current period other comprehensive income (loss) (75.6) 1.0 (74.6) Ending balance, December 31, 2021 $ 290.7 $ (10.2) $ 280.5 Beginning balance, January 1, 2020 $ 230.4 $ (10.8) $ 219.6 Other comprehensive income (loss) before reclassifications 144.7 (0.4) 144.3 Amounts reclassified from AOCI (8.8) — (8.8) Net current period other comprehensive income (loss) 135.9 (0.4) 135.5 Ending balance, December 31, 2020 $ 366.3 $ (11.2) $ 355.1 Beginning balance, January 1, 2019 $ 96.9 $ (12.2) $ 84.7 Other comprehensive income (loss) before reclassifications 257.9 1.4 259.3 Amounts reclassified from AOCI (124.4) — (124.4) Net current period other comprehensive income (loss) 133.5 1.4 134.9 Ending balance, December 31, 2019 $ 230.4 $ (10.8) $ 219.6 (1) All amounts are net of tax. (2) The pretax amounts reclassified from AOCI, $(8.5) million, $11.2 million and $157.4 million, are included in net investment gains (losses) and the related tax expenses, $(1.8) million, $2.4 million and $33.0 million, are included in income tax expense in the Consolidated Statements of Operations for the years ended December 31, 2021, 2020 and 2019, respectively. Comparative information for elements that are not required to be reclassified in their entirety to net income in the same reporting period is located in Note 3. |
Supplemental Consolidated Cash
Supplemental Consolidated Cash and Cash Flow Information | 12 Months Ended |
Dec. 31, 2021 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Consolidated Cash and Cash Flow Information | ($ in millions) Years Ended December 31, 2021 2020 2019 Cash $ 133.0 $ 21.8 $ 25.2 Restricted cash 0.7 0.5 0.3 Total cash and restricted cash shown in the Consolidated Statements of Cash Flows $ 133.7 $ 22.3 $ 25.5 Cash paid during the year for: Interest $ 13.5 $ 15.5 $ 14.1 Income taxes 23.7 17.3 22.9 Non-cash investing activities include $2.1 billion of investments transferred to a reinsurer as consideration paid in connection with a reinsurance transaction of a $2.9 billion block of in force fixed and variable annuity business in 2019. See Note 6 for further information. Non-cash investing activities with respect to modifications or exchanges of fixed maturity securities as well as paid-in-kind activity for policy loans were insignificant for the years ended December 31, 2021, 2020 and 2019, respectively. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company conducts and manages its business through five reporting segments. The four operating segments, representing the major lines of business, are: Property & Casualty (primarily personal lines of auto and property insurance products), Supplemental (primarily cancer, heart, hospital, supplemental disability and accident coverages), Retirement (primarily tax-qualified fixed and variable annuities) and Life (life insurance). The Company does not allocate the impact of corporate-level transactions to these operating segments, consistent with the basis for management's evaluation of the results of those segments, but classifies those items in the fifth reporting segment, Corporate & Other. In addition to ongoing transactions such as corporate debt service, net investment gains (losses) and certain public company expenses, such items also have included corporate debt retirement costs, when applicable. The accounting policies of the segments are the same as those described in Note 1. The Company accounts for intersegment transactions, primarily the allocation of operating and agency costs from Corporate & Other to Property & Casualty, Supplemental, Retirement and Life, on a direct cost basis. Summarized financial information for these segments is as follows: ($ in millions) Years Ended December 31, 2021 2020 2019 Premiums and contract charges earned Property & Casualty $ 617.4 $ 650.1 $ 683.5 Supplemental (1) 125.3 130.7 65.8 Retirement 38.5 29.7 29.1 Life 108.4 120.2 119.6 Total $ 889.6 $ 930.7 $ 898.0 Net investment income Property & Casualty $ 61.1 $ 42.6 $ 41.7 Supplemental (1) 24.8 17.8 7.5 Retirement 255.9 229.8 245.5 Life 83.1 69.8 72.0 Corporate & Other (0.1) (0.2) (0.1) Intersegment eliminations (2.3) (2.2) (1.5) Total $ 422.5 $ 357.6 $ 365.1 Net income (loss) Property & Casualty $ 57.0 $ 76.5 $ 54.3 Supplemental (1) 46.3 43.1 18.0 Retirement 52.0 20.1 (4.8) Life 16.1 10.4 17.6 Corporate & Other (28.6) (16.8) 99.3 Total $ 142.8 $ 133.3 $ 184.4 ($ in millions) December 31, 2021 2020 2019 Assets Property & Casualty $ 1,243.4 $ 1,324.9 $ 1,327.1 Supplemental 854.9 811.5 747.6 Retirement 9,939.1 9,198.7 8,330.1 Life 2,129.5 2,044.5 1,965.0 Corporate & Other 281.8 182.3 173.0 Intersegment eliminations (64.8) (90.1) (64.1) Total $ 14,383.9 $ 13,471.8 $ 12,478.7 (1) Acquired on July 1, 2019. The twelve month comparison is not meaningful. Additional significant financial information for these segments is as follows: ($ in millions) Years Ended December 31, 2021 2020 2019 DAC amortization expense Property & Casualty $ 67.7 $ 74.4 $ 79.5 Supplemental (1) 1.2 1.3 0.4 Retirement 18.5 16.7 21.5 Life 7.3 7.5 7.8 Total $ 94.7 $ 99.9 $ 109.2 Income tax expense (benefit) Property & Casualty $ 13.2 $ 15.4 $ 14.0 Supplemental (1) 12.7 12.0 5.1 Retirement 9.9 2.1 33.8 Life 3.6 2.4 4.9 Corporate & Other (7.3) (5.6) (5.8) Total $ 32.1 $ 26.3 $ 52.0 (1) Acquired on July 1, 2019. The twelve month comparison is not meaningful. |
Schedule I Summary of Investmen
Schedule I Summary of Investments-Other Than Investments in Related Parties | 12 Months Ended |
Dec. 31, 2021 | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Abstract] | |
Summary of Investments-Other Than Investments in Related Parties | HORACE MANN EDUCATORS CORPORATION SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES December 31, 2021 ($ in millions) Type of Investments Cost (1) Fair Amount Fixed maturity securities U.S. Government and federally sponsored agency obligations $ 776.4 $ 828.4 $ 828.4 States, municipalities and political subdivisions 1,519.7 1,703.4 1,703.4 Foreign government bonds 40.2 43.6 43.6 Public utilities 91.8 100.4 100.4 All other corporate bonds 2,091.6 2,251.0 2,251.0 Asset-backed securities 935.4 943.2 943.2 Residential mortgage-backed securities (non-agency) 21.5 21.6 21.6 Commercial mortgage-backed securities 286.7 310.3 310.3 Redeemable preferred stocks 34.4 37.4 37.4 Total fixed maturity securities 5,797.7 6,239.3 6,239.3 Equity securities Industrial, miscellaneous and all other 4.7 4.7 4.7 Banking & finance and insurance companies 1.4 1.4 1.4 Public utilities 0.2 0.2 0.2 Non-redeemable preferred stocks 119.4 119.4 119.4 Closed-end fund 21.5 21.5 21.5 Total equity securities 147.2 147.2 147.2 Limited partnership interests 712.8 XXX 712.8 Short-term investments 157.8 XXX 157.8 Policy loans 142.1 XXX 142.1 Derivatives 7.8 $ 10.7 10.7 Mortgage loans 6.7 XXX 6.7 Other 32.9 XXX 32.9 Total investments $ 7,005.0 XXX $ 7,449.5 (1) Bonds at original cost reduced by repayments and adjusted for amortization of premiums or accretion of discounts and impairment in value of specifically identified investments. See accompanying Report of Independent Registered Public Accounting Firm. |
Schedule II Condensed Financial
Schedule II Condensed Financial Information of Registrant | 12 Months Ended |
Dec. 31, 2021 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule II Condensed Financial Information of Registrant | HORACE MANN EDUCATORS CORPORATION (Parent Company Only) CONDENSED FINANCIAL INFORMATION OF REGISTRANT BALANCE SHEETS As of December 31, 2021 and 2020 ($ in millions, except share data) December 31, 2021 2020 ASSETS Investments and cash $ 115.3 $ 4.1 Investments in subsidiaries 2,191.3 2,121.0 Other assets 11.3 58.9 Total assets $ 2,317.9 $ 2,184.0 LIABILITIES AND SHAREHOLDERS' EQUITY Short-term debt $ 249.0 $ 135.0 Long-term debt 248.6 248.3 Other liabilities 12.9 10.6 Total liabilities 510.5 393.9 Preferred stock, $0.001 par value, authorized 1,000,000 shares; none issued — — Common stock, $1,000 par value, authorized 75,000,000 shares; issued, 2021, 66,436,821; 2020, 66,316,797 0.1 0.1 Additional paid-in capital 495.3 488.4 Retained earnings 1,524.9 1,434.6 Accumulated other comprehensive income (loss), net of taxes: Net unrealized investment gains on fixed maturity securities 290.7 366.3 Net funded status of benefit plans (10.2) (11.2) Treasury stock, at cost, 2021, 25,043,337 shares; 2020, 24,902,579 shares (493.4) (488.1) Total shareholders' equity 1,807.4 1,790.1 Total liabilities and shareholders' equity $ 2,317.9 $ 2,184.0 See accompanying Note to Condensed Financial Statements. See accompanying Report of Independent Registered Public Accounting Firm. SCHEDULE II (continued) HORACE MANN EDUCATORS CORPORATION (Parent Company Only) CONDENSED FINANCIAL INFORMATION OF REGISTRANT STATEMENTS OF OPERATIONS ($ in millions) Year Ended December 31, 2021 2020 2019 Revenues Net investment income $ (0.1) $ (0.2) $ (0.1) Net investment gains — — — Total revenues (0.1) (0.2) (0.1) Expenses Interest expense 13.8 14.8 14.3 Other 11.2 5.7 12.6 Total expenses 25.0 20.5 26.9 Loss before income tax benefit and equity in net earnings of subsidiaries (25.1) (20.7) (27.0) Income tax benefit (5.4) (5.3) (6.0) Loss before equity in net earnings of subsidiaries (19.7) (15.4) (21.0) Equity in net earnings of subsidiaries 162.5 148.7 205.4 Net income $ 142.8 $ 133.3 $ 184.4 See accompanying Note to Condensed Financial Statements. See accompanying Report of Independent Registered Public Accounting Firm. SCHEDULE II (continued) HORACE MANN EDUCATORS CORPORATION (Parent Company Only) CONDENSED FINANCIAL INFORMATION OF REGISTRANT STATEMENTS OF CASH FLOWS ($ in millions) Year Ended December 31, 2021 2020 2019 Cash flows from operating activities Net Income $ 142.8 $ 133.3 $ 184.4 Equity in net income of subsidiaries (162.5) (148.7) (205.4) Dividends received from subsidiaries 66.0 167.0 363.2 Changes in: Income taxes 1.8 2.0 3.4 Operating assets and liabilities 8.4 (5.9) 8.3 Other 4.1 1.7 0.7 Net cash provided by operating activities 60.6 149.4 354.6 Cash flows from investing activities Purchase of equity securities — 1.0 — Net increase (decrease) in short-term investments 2.7 (1.5) 3.3 Capital contributions to subsidiaries (5.0) (97.0) — Acquisition of businesses — — (444.1) Net cash provided by (used in) investing activities (2.3) (97.5) (440.8) Cash flows from financing activities Dividends paid to shareholders (51.4) (49.6) (47.3) Principal borrowings on senior revolving credit facility 114.0 — 135.0 Acquisition of treasury stock (5.3) (2.2) — Proceeds from exercise of stock options 0.3 2.4 1.7 Withholding tax payments on RSUs tendered (2.0) (2.3) (3.7) Net cash (used in) provided by financing activities 55.6 (51.7) 85.7 Net increase (decrease) in cash 113.9 0.2 (0.5) Cash at beginning of period 0.3 0.1 0.6 Cash at end of period $ 114.2 $ 0.3 $ 0.1 See accompanying Note to Condensed Financial Statements. See accompanying Report of Independent Registered Public Accounting Firm. SCHEDULE II (continued) HORACE MANN EDUCATORS CORPORATION (Parent Company Only) CONDENSED FINANCIAL INFORMATION OF REGISTRANT NOTE TO CONDENSED FINANCIAL STATEMENTS The accompanying condensed financial statements should be read in conjunction with the Consolidated Financial Statements and the accompanying notes thereto. |
Schedule III and VI Supplementa
Schedule III and VI Supplementary Insurance Information Supplemental Information Concerning Property and Casualty Insurance Operations | 12 Months Ended |
Dec. 31, 2021 | |
SEC Schedule, 12-18, Supplemental Information, Property-Casualty Insurance Underwriters [Abstract] | |
Schedule III and VI Supplementary Insurance Information Supplemental Information Concerning Property and Casualty Insurance Operations | HORACE MANN EDUCATORS CORPORATION SCHEDULE III: SUPPLEMENTARY INSURANCE INFORMATION SCHEDULE VI: SUPPLEMENTAL INFORMATION CONCERNING PROPERTY & CASUALTY INSURANCE OPERATIONS ($ in millions) Column Schedule B C D E F G H I J K Schedule B C D E F G H I J K Deferred Future policy Discount, Unearned Other Premium Net investment Benefits, Claims and claim Amortization Other Paid claims and claim adjustment expenses Premiums written Segment Current Prior Year Ended December 31, 2021 Property & Casualty $ 24.4 $ 362.4 $ — $ 249.8 $ — $ 617.4 $ 61.1 $ 447.9 $ 455.1 $ (7.2) $ 67.7 $ 97.2 $ 455.1 $ 607.8 Supplemental 4.2 393.9 xxx 3.1 72.5 125.3 24.8 40.0 xxx xxx 1.1 52.5 xxx xxx Retirement 153.8 4,967.7 xxx 0.7 869.8 38.5 255.9 166.3 xxx xxx 18.5 67.5 xxx xxx Life 65.6 1,279.7 xxx 1.5 3.6 108.4 83.1 127.9 xxx xxx 7.4 36.8 xxx xxx Other, including consolidating eliminations N/A N/A xxx N/A N/A N/A (2.4) N/A xxx xxx N/A 24.4 xxx xxx Total $ 248.0 $ 7,003.7 xxx $ 255.1 $ 945.9 $ 889.6 $ 422.5 $ 782.1 xxx xxx $ 94.7 $ 278.4 xxx xxx Year Ended December 31, 2020 Property & Casualty $ 26.1 $ 372.1 $ — $ 259.4 $ — $ 650.1 $ 42.6 $ 431.0 $ 441.2 $ (10.2) $ 74.4 $ 97.7 $ 438.2 $ 635.5 Supplemental 4.3 392.4 xxx 3.1 41.5 130.7 17.8 43.1 xxx xxx 1.3 51.7 xxx xxx Retirement 137.7 4,874.2 xxx 0.7 706.3 29.7 229.8 164.8 xxx xxx 16.8 72.0 xxx xxx Life 61.7 1,245.4 xxx 1.3 3.5 120.2 69.8 134.6 xxx xxx 7.4 35.3 xxx xxx Other, including consolidating eliminations N/A N/A xxx N/A N/A N/A (2.4) N/A xxx xxx N/A 20.7 xxx xxx Total $ 229.8 $ 6,884.1 xxx $ 264.5 $ 751.3 $ 930.7 $ 357.6 $ 773.5 xxx xxx $ 99.9 $ 277.4 xxx xxx Year Ended December 31, 2019 Property & Casualty $ 28.6 $ 387.0 $ — $ 274.0 $ — $ 683.5 $ 41.7 $ 475.6 $ 483.1 $ (7.5) $ 79.4 $ 105.5 $ 486.6 $ 683.1 Supplemental 2.0 390.3 xxx 3.2 — 65.8 7.5 24.7 xxx xxx 0.5 26.5 xxx xxx Retirement 185.3 4,698.4 xxx 0.8 643.8 29.1 245.5 173.1 xxx xxx 21.5 90.7 xxx xxx Life 60.8 1,201.6 xxx 1.2 3.5 119.6 72.0 124.5 xxx xxx 7.8 37.9 xxx xxx Other, including consolidating eliminations N/A N/A xxx N/A N/A N/A (1.6) N/A xxx xxx N/A 26.4 xxx xxx Total $ 276.7 $ 6,677.3 xxx $ 279.2 $ 647.3 $ 898.0 $ 365.1 $ 797.9 xxx xxx $ 109.2 $ 287.0 xxx xxx N/A - Not applicable. See accompanying Report of Independent Registered Public Accounting Firm. |
Schedule IV Reinsurance
Schedule IV Reinsurance | 12 Months Ended |
Dec. 31, 2021 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Abstract] | |
Schedule IV Reinsurance | HORACE MANN EDUCATORS CORPORATION REINSURANCE ($ in millions) Column A Column B Column C Column D Column E Column F Gross Ceded to Assumed Net Percentage Year Ended December 31, 2021 Life insurance in force $ 20,440.3 $ 4,533.6 $ — $ 15,906.7 — Premiums Property & Casualty $ 623.0 $ 15.3 $ 9.7 $ 617.4 1.6 % Supplemental 125.6 0.3 — 125.3 — Retirement 48.7 10.2 — 38.5 — Life 115.9 7.5 — 108.4 — Total premiums $ 913.2 $ 33.3 $ 9.7 $ 889.6 1.1 % Year Ended December 31, 2020 Life insurance in force $ 19,821.2 $ 4,619.1 $ — $ 15,202.1 — Premiums Property & Casualty $ 652.9 $ 12.7 $ 9.9 $ 650.1 1.5 % Supplemental 130.9 0.2 — 130.7 — Retirement 38.0 8.3 — 29.7 — Life 127.7 7.5 — 120.2 — Total premiums $ 949.5 $ 28.7 $ 9.9 $ 930.7 1.1 % Year Ended December 31, 2019 Life insurance in force $ 19,179.8 $ 4,813.2 $ — $ 14,366.6 — Premiums Property & Casualty $ 689.2 $ 16.5 $ 10.8 $ 683.5 1.6 % Supplemental 65.9 0.1 — 65.8 — Retirement 35.6 6.5 — 29.1 — Life 126.9 7.3 — 119.6 — Total premiums $ 917.6 $ 30.4 $ 10.8 $ 898.0 1.2 % Note: Premiums above include insurance premiums earned and contract charges earned. See accompanying Report of Independent Registered Public Accounting Firm. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying audited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and with the rules and regulations of the Securities and Exchange Commission (SEC). The Company has reclassified the presentation of certain prior period information to conform to the current year's presentation. |
Consolidation | Consolidation All intercompany transactions and balances between HMEC and its subsidiaries and affiliates have been eliminated. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. The most significant critical accounting estimates include valuation of hard-to-value fixed maturity securities, evaluation of credit loss impairments for fixed maturity securities, evaluation of goodwill and intangible assets for impairment, valuation of annuity and life deferred policy acquisition costs, valuation of liabilities for property and casualty unpaid claims and claim expenses and valuation of certain investment contracts and policy reserves. |
Investments | Investments Fixed Maturity Securities The Company invests predominantly in fixed maturity securities. Fixed maturity securities include bonds, asset-backed securities (ABS), mortgage-backed securities (MBS), other structured securities and redeemable preferred stocks. MBS includes residential and commercial mortgage-backed securities. Fixed maturity securities, which may be sold prior to their contractual maturity, are designated as available for sale (AFS) and are carried at fair value of which a portion represent securities that are hard-to-value. See Note 4 – Fair Value of Financial Instruments – Investments for a detailed description of how the Company estimates fair value for its fixed maturity securities portfolio including hard-to-value securities. An adjustment for net unrealized investment gains (losses) on all fixed maturity securities available for sale and carried at fair value, is recognized as a separate component of accumulated other comprehensive income (AOCI) within shareholders’ equity, net of applicable deferred taxes and the related impact on deferred policy acquisition costs (DAC) associated with annuity contracts and life insurance products with account values that would have occurred if the securities had been sold at their aggregate fair value and the proceeds reinvested at current yields. The Company excludes accrued interest receivable from the amortized cost basis of its AFS fixed maturity securities. Equity Securities Equity securities primarily include common stocks, exchange traded and mutual funds and non-redeemable preferred stocks. Certain exchange traded and mutual funds have fixed maturity securities as their underlying investments. Equity securities are carried at fair value and have readily determinable fair values. Limited Partnership Interests Investments in limited partnership interests are accounted for using the equity method of accounting (EMA) and include interests in commercial mortgage funds, private equity funds, infrastructure debt funds, infrastructure equity funds and other funds. Short-Term and Other Investments Short-term investments, including money market funds, commercial paper, U.S. Treasury bills and other short-term investments, are carried at fair value. Other investments primarily consist of policy loans, Federal Home Loan Bank of Chicago (FHLB) common stock, mortgage loans and derivatives. Policy loans are carried at unpaid principal balances. FHLB common stock is carried at cost. Mortgage loans are carried at amortized cost, net, which represent the amount expected to be collected. Derivatives are carried at fair value. Variable Interest Entities (VIEs) The Company invests in fixed maturity securities and alternative investment funds that could qualify as variable interests in VIEs, including corporate securities, mortgage-backed securities and asset-backed securities. Such variable interests in VIEs have been reviewed and the Company determined that those VIEs are not subject to consolidation as the Company is not the primary beneficiary because it does not have the power to direct the activities that most significantly impact those VIEs' economic performance. Net Investment Income Net investment income primarily consists of interest, dividends and income from limited partnership interests. Interest is recognized on an accrual basis using the effective yield method and dividends are recorded at the ex-dividend date. ABS and MBS interest income is determined considering estimated pay-downs, including prepayments, obtained from third-party data sources and internal estimates. Actual prepayment experience is periodically reviewed, and effective yields are recalculated when differences arise between the prepayments originally anticipated and the actual prepayments received and currently anticipated. For ABS and MBS of high credit quality with fixed interest rates, the effective yield is recalculated on a retrospective basis. For all others, the effective yield is generally recalculated on a prospective basis. Net investment income for AFS fixed maturity securities includes the impact of accreting the credit loss allowance for the time value of money. Accrual of income is suspended for fixed maturity securities when the timing and amount of cash flows expected to be received is not reasonably estimable. Accrual of income is suspended for commercial mortgage loans that are in default or when full and timely collection of principal and interest payments is not probable. Accrued investment income receivable is monitored for recoverability and when not expected to be collected is written off through net investment income. Cash receipts on investments on non-accrual status are generally recorded as a reduction of amortized cost or principal. Income from limited partnership interests is recognized based upon the changes in fair value of the investee’s equity primarily determined using its net asset value and is generally recognized on a three month delay due to the availability of the related financial statements from investees. The Company reports accrued investment income separately from AFS fixed maturity securities and has elected not to measure an allowance for credit losses for accrued investment income. Accrued investment income is written-off and recognized as a net investment loss at the time the issuer of the security defaults or is expected to default on payments. Net Investment Gains (Losses) Net investment gains (losses) include gains and losses on investment sales, changes in the credit loss allowances related to fixed maturity securities and mortgage loans, impairments, valuation changes of equity securities and periodic changes in fair value and settlements of derivatives. Net investment gains (losses) on investment sales are determined on a specific identification basis and are net of credit losses already recognized through an allowance. Credit Loss Impairments for Fixed Maturity Securities For AFS fixed maturity securities, the difference between amortized cost, net of a credit loss allowance (i.e., amortized cost, net) and fair value, net of certain other items and deferred income taxes is reported as a component of AOCI on the Consolidated Balance Sheets and is not reflected in the operating results of any period until reclassified to net income upon the consummation of a transaction with an unrelated third party or when a credit loss allowance is recorded. The Company has a comprehensive portfolio monitoring process to evaluate fixed maturity securities (at the cusip/issuer level) on a quarterly basis that may require a credit loss allowance. These reviews, in conjunction with our investment managers’ monthly credit reports and relevant factors such as (1) the financial condition and near-term prospects of the issuer; (2) the Company’s intent to sell a security or whether it is more likely than not that the Company will be required to sell a security before the anticipated recovery in value; (3) the market leadership of the issuer; (4) the debt ratings of the issuer; and (5) the cash flows and liquidity of the issuer or the underlying cash flows for asset-backed securities , are all considered in the impairment assessment. For each fixed maturity security in an unrealized loss position, the Company assesses whether management with the appropriate authority has made the decision to sell or whether it is more likely than not that the Company will be required to sell the security before the anticipated recovery of the amortized cost basis for reasons such as liquidity, contractual or regulatory purposes. If a security meets either of these criteria, any existing credit loss allowance would be written-off against the amortized cost basis of the asset along with any remaining unrealized losses, with the incremental losses recorded as a net investment loss. If the Company has not made the decision to sell the fixed maturity security and it is not more likely than not that the Company will be required to sell the fixed maturity security before the anticipated recovery of its amortized cost basis, the Company evaluates whether it expects to receive cash flows sufficient to recover the entire amortized cost basis of the security. The Company estimates the anticipated recovery value based on the best estimate of future cash flows considering past events, current conditions and reasonable and supportable forecasts. The estimated future cash flows are discounted at the security’s current effective rate and are compared to the amortized cost basis of the security. The determination of cash flow estimates is inherently subjective, and methodologies may vary depending on facts and circumstances specific to the security. All reasonably available information relevant to the collectability of the security are considered when developing the estimate of cash flows expected to be collected. That information generally includes, but is not limited to, the remaining payment terms of the security, prepayment speeds, the financial condition and future earnings potential of the issue or issuer, expected defaults, expected recoveries, the value of underlying collateral, origination vintage year, geographic concentration of underlying collateral, available reserves or escrows, current subordination levels, third-party guarantees and other credit enhancements. Other information, such as industry analyst reports and forecasts, sector credit ratings, financial condition of the bond insurer for insured fixed maturity securities, and other market data relevant to the realizability of contractual cash flows, may also be considered. The estimated fair value of collateral will be used to estimate the anticipated recovery value if the Company determines that the security is dependent on the liquidation of collateral for ultimate settlement. If the Company does not expect to receive cash flows sufficient to recover the entire amortized cost basis of the fixed maturity security, a credit loss allowance is recorded as a net investment loss for the shortfall in expected cash flows; however, the amortized cost basis, net of the credit loss allowance, may not be lower than the fair value of the security. The portion of the unrealized loss related to factors other than credit remains classified in AOCI. If the Company determines that the fixed maturity security does not have sufficient cash flows or other information to estimate a recovery value for the security, the Company may conclude that the entire decline in fair value is deemed to be credit related and the loss is recorded as a net investment loss. When a security is sold or otherwise disposed or the security is deemed uncollectible and written off, the Company removes amounts previously recognized in the credit loss allowance. Recoveries after write-offs are recognized when received. Prior to the adoption of ASU 2016-13, Measurement of Credit Losses on Financial Instruments on January 1, 2020, when other-than-temporary impairment was deemed to have occurred, the investment in the fixed maturity security would be written-down to fair value which became the new cost basis for the security. |
Deferred Policy Acquisition Costs | DAC consists of commissions, policy issuance and other costs which are incremental and directly related to the successful acquisition of new or renewal business, which are deferred and amortized on a basis consistent with the type of insurance coverage. For property and casualty risks, DAC is amortized over the terms of the insurance policies (6 or 12 months). For supplemental policies, DAC is amortized in proportion to anticipated premiums over the terms of the insurance policies (approximately 7 years, based on an estimated average duration across all supplemental products). For all annuity contracts, DAC is amortized over 20 years in proportion to estimated gross profits. DAC is amortized in proportion to estimated gross profits over 20 years for certain life insurance products with account values and over 30 years for indexed universal life (IUL) products. For other individual life contracts, DAC is amortized in proportion to anticipated premiums over the terms of the insurance policies (10, 15, 20, 30 years). The Company periodically reviews the assumptions and estimates used in DAC and also periodically reviews its estimations of gross profits, a process sometimes referred to as "unlocking". The most significant assumptions that are involved in the estimation of annuity gross profits include interest rate spreads, future financial market performance, business surrender/lapse rates, expenses and the impact of net investment gains (losses) on fixed maturity and equity securities. For the variable deposit portion of Retirement, the Company amortizes DAC utilizing a future financial market performance assumption of an 8% reversion to the mean approach with a 200 basis point corridor around the mean during the reversion period, representing a cap and a floor on the Company's long-term assumption. The Company's practice with regard to future financial market performance assumes that long-term appreciation in the financial markets is not changed by short-term market fluctuations, but is only changed when sustained deviations are experienced. The Company monitors these fluctuations and only changes the assumption when long-term expectations change. The most significant assumptions that are involved in the estimation of life insurance gross profits include interest rates expected to be received on investments, business persistency, and mortality. Conversions from term to permanent insurance cause an immediate write down of the associated DAC. The most significant assumptions that are involved in the estimation of supplemental gross profits include morbidity, persistency, expenses and interest rates expected to be received on investments. When a supplemental policy lapses, there is an immediate write down of the associated DAC. Annually, the Company performs a gross premium valuation (GPV) on life insurance policies to assess whether a loss recognition event has occurred. This involves discounting expected future benefits and expenses less expected future premiums. To the extent that this amount is greater than the liability for future benefits less the DAC asset, in aggregate for the life insurance block, a loss would be recognized by first writing off the DAC asset and then increasing the liability. In the event actual experience differs significantly from assumptions or assumptions are significantly revised, the Company may be required to recognize a material charge or credit to current period DAC amortization expense for the period in which the adjustment is made. The Company recognized the following adjustments to DAC amortization expense as a result of evaluating actual experience and prospective assumptions (i.e., the impact of unlocking): ($ in millions) Year Ended December 31, 2021 2020 2019 (Decrease) increase to DAC amortization expense: Retirement $ (1.3) $ (1.8) $ 3.5 Life (0.2) (0.3) (0.3) Total $ (1.5) $ (2.1) $ 3.2 DAC for annuity contracts and life insurance products with account values are adjusted for the impact on estimated future gross profits as if net unrealized investment gains (losses) on fixed maturity securities had been realized at the reporting date. This adjustment reduced DAC by $71.9 million, $90.5 million and $41.2 million at December 31, 2021, 2020 and 2019, respectively. The after tax impact of this adjustment is included in AOCI (along with net unrealized investment gains (losses) on fixed maturity securities) within shareholders' equity. |
Goodwill | Goodwill When the Company was acquired from CIGNA Corporation by HME Holdings, Inc. in 1989, intangible assets were recognized as goodwill in the application of purchase accounting. In addition, goodwill was recognized in 1994 related to the acquisition of Horace Mann Property & Casualty Insurance Company and in 2019 related to the acquisitions of BCG and NTA. Goodwill represents the excess of the amounts paid to acquire a business over the fair value of its net assets at the date of acquisition. Goodwill is not amortized, but is tested for impairment at the reporting unit level at least annually or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. A reporting unit is defined as an operating segment or a business unit one level below an operating segment, if separate financial information is prepared and regularly reviewed by management at that level. The Company's reporting units, for which goodwill has been allocated, are equivalent to the Company's operating segments. Refer to Note 7 for the allocation of goodwill by reporting unit as of December 31, 2021. The goodwill impairment test, as defined in GAAP, allows an entity the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If an entity determines it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the entity performs a quantitative goodwill impairment test by comparing the fair value of a reporting unit to its carrying amount for purposes of confirming and measuring an impairment. In 2019, the Company adopted guidance to eliminate Step 2 of the goodwill impairment test. Goodwill impairment is now the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of goodwill. Any amount of goodwill determined to be impaired is recognized as an expense in the period in which the impairment determination is made. |
Separate Account (Variable Annuity) Assets and Liabilities | Separate Account (Variable Annuity) Assets and Liabilities Separate Account assets represent variable annuity contractholder funds invested in various mutual funds. The Separate Account assets comprise actively traded mutual funds that have daily quoted net asset values that are readily determinable for identical assets that the Company can access. Net asset values for the actively traded mutual funds in which the Separate Account assets are invested are obtained daily from the fund managers. Separate Account liabilities are equal to the estimated fair value of Separate Account assets. The investment income, gains and losses of these accounts accrue directly to the contractholders and are not included in the results of operations of the Company. The activity of the Separate Accounts is not reflected in the Consolidated Statements of Operations except for (1) contract charges earned, (2) the activity related to contract guarantees, which are benefits on existing variable annuity contracts, and (3) the impact of financial market performance on the amortization of DAC. The Company's contract charges earned include fees charged to the Separate Accounts, including mortality charges, risk charges, policy administration fees, investment management fees and surrender charges. |
Investment Contract and Life Policy Reserves | Liabilities for future benefits on supplemental, life and annuity policies are established in amounts adequate to meet the estimated future obligations on policies in force. Liabilities for future policy benefits on certain supplemental and life insurance policies are computed using the net level premium method including assumptions as to investment yields, mortality, morbidity, persistency, expenses and other assumptions based on the Company's experience, including a provision for adverse deviation. These assumptions are established at the time the policy is issued and are intended to estimate the experience for the period the policy benefits are payable. If experience is less favorable than the assumptions, additional liabilities may be established, resulting in recognition of a loss for that period. Liabilities for future benefits on annuity contracts and certain long-duration life insurance contracts are carried at accumulated policyholder values without reduction for potential surrender or withdrawal charges. The liability also includes provisions for the unearned portion of certain policy charges. |
Reserves for Fixed Indexed Annuities and Indexed Universal Life Products | Reserves for Fixed Indexed Annuities and Indexed Universal Life Products The Company offers fixed indexed annuity (FIA) products with interest crediting strategies linked to the Standard & Poor's (S&P) 500 Index and the Dow Jones Industrial Average (DJIA). The Company purchases call options on the applicable indices as an investment to provide the income needed to fund the annual index credits on the indexed products. These products are deferred fixed annuities with a guaranteed minimum interest rate plus a contingent return based on equity market performance and are considered hybrid financial instruments under GAAP. The Company elected to not use hedge accounting for derivative transactions related to FIA products. As a result, the Company accounts for the purchased call options and the embedded derivative related to the provision of a contingent return at fair value, with changes in fair value recognized as Net investment gains (losses) in the Consolidated Statements of Operations. The embedded derivative is bifurcated from the host contract and included in Other policyholder funds in the Consolidated Balance Sheets. The host contract is accounted for as a debt instrument in accordance with GAAP and is included in Investment contract and life policy reserves in the Consolidated Balance Sheets with any discount to the minimum account value being accreted using the effective yield method. In the Consolidated Statements of Operations, accreted interest for FIA products and benefit claims on these products incurred during the reporting period are included in Benefits, claims and settlement expenses. The Company offers indexed universal life (IUL) products as part of its product portfolio with interest crediting strategies linked to the S&P 500 Index and the DJIA as well as a fixed option. The Company purchases call options monthly to economically hedge the potential liabilities arising in IUL accounts. The Company elected to not use hedge accounting for derivative transactions related to the IUL products. As a result, the Company records the purchased call options and the embedded derivative related to the provision of a contingent return at fair value, with changes in fair value reported in Net investment gains (losses) in the Consolidated Statements of Operations. IUL policies with a balance in one or more indexed accounts are considered to have an embedded derivative. The benefit reserve for the host contract is measured using the retrospective deposit method, which for Horace Mann's IUL product is equal to the account balance. The embedded derivative is bifurcated from the host contract, carried at fair value, and included in Investment contract and life policy reserves in the Consolidated Balance Sheets. See Note 4 for more information regarding the determination of fair value for derivatives embedded in FIA and IUL and purchased call options. |
Unpaid Claims and Claim Expenses | Unpaid Claims and Claim Expenses Liabilities for Property & Casualty unpaid claims and claim expenses include provisions for payments to be made on reported claims, claims incurred but not yet reported (IBNR) and associated settlement expenses. All of the Company's reserves for Property & Casualty unpaid claims and claim expenses are carried at the full value of estimated liabilities and are not discounted for interest expected to be earned on the reserves. Estimated amounts of salvage and subrogation on unpaid Property & Casualty claims are deducted from the liability for unpaid claims. Due to the nature of the Company's personal lines business, the Company has no exposure to losses related to claims for toxic waste cleanup, other environmental remediation or asbestos-related illnesses other than claims under property insurance policies for environmentally related items such as mold. |
Other Policyholder Funds | Other Policyholder Funds Other policyholder funds includes payout annuity contracts without life contingencies and dividend accumulations, as well as balances outstanding under funding agreements with the Federal Home Loan Bank of Chicago (FHLB) and embedded derivatives related to FIA products. Except for embedded derivatives, each of these components is carried at cost. Embedded derivatives are carried at fair value. Amounts received and repaid under FHLB funding agreements are classified as financing activities in the Company's Consolidated Statements of Cash Flows. |
Reinsurance | Reinsurance The Company enters into reinsurance arrangements pursuant to which it cedes certain insurance risks to unaffiliated reinsurers. Cessions under reinsurance agreements do not discharge the Company's obligations as the primary insurer. The accounting for reinsurance arrangements depends on whether the arrangement provides indemnification against loss or liability relating to insurance risk in accordance with GAAP. If the Company determines that a reinsurance agreement exposes the reinsurer to a reasonable possibility of a significant loss from insurance risk, the ceded unearned premiums and reinsurance balances recoverable on paid and unpaid losses and settlement expenses are reported separately as assets, instead of being netted with the related liabilities, since reinsurance does not relieve the Company of its legal liability to its policyholders. See Note 9 for further details. |
Insurance Premiums and Contract Charges Earned | Insurance Premiums and Contract Charges Earned Property & Casualty insurance premiums are recognized as revenue ratably over the related contract periods in proportion to the risks insured. The unexpired portions of these Property & Casualty premiums are recorded as unearned premiums, using the monthly pro rata method. Premiums and contract charges for life insurance contracts with account values and annuity contracts consist of charges for the cost of insurance, policy administration and withdrawals. Premiums for long-term traditional life and supplemental policies are recognized as revenues when due over the premium-paying period. Contract deposits to annuity contracts and life insurance contracts with account values represent funds deposited by policyholders and are not included in the Company's premiums or contract charges earned. |
Share-Based Compensation | Share-Based Compensation The Company grants stock options and both service-based and performance-based restricted common stock units (RSUs) to executive officers, other employees and Directors in an effort to attract and retain individuals while also aligning compensation with the interests of the Company's shareholders. Additional information regarding the Company's share-based compensation plans is contained in Note 13. Stock options are accounted for under the fair value method of accounting using a Black-Scholes valuation model to measure stock option expense at the date of grant. The fair value of RSUs is measured at the market price of the Company's common stock on the date of grant, with the exception of market-based performance awards, for which the Company uses a Monte Carlo simulation model to determine fair value for purposes of measuring RSU expense. For the years ended December 31, 2021, 2020 and 2019, the Company recognized $1.2 million, $1.1 million, and $1.2 million, respectively, of stock option expense as a result of stock options that vested during the respective periods. For the years ended December 31, 2021, 2020 and 2019, the Company recognized $6.6 million, $4.8 million and $5.2 million, respectively, of RSU expense as a result of the performance and/or vesting of RSUs during the respective periods. In 2021, 2020 and 2019, the Company granted stock options as quantified in the table below, which also provides the weighted average grant date fair value for stock options granted in each year. The fair value of stock options granted was estimated on the respective dates of grant using the Black-Scholes option pricing model with the weighted average assumptions shown in the following table. Year Ended December 31, 2021 2020 2019 Number of stock options granted 183,272 234,248 282,040 Weighted average grant date fair value of stock options granted $ 7.73 $ 6.02 $ 6.26 Weighted average assumptions: Risk-free interest rate 0.8 % 0.8 % 2.5 % Expected dividend yield 3.0 % 2.7 % 2.9 % Expected life, in years 5.1 5.1 5.0 Expected volatility (based on historical volatility) 30.1 % 22.8 % 21.9 % The weighted average fair value of nonvested stock options outstanding on December 31, 2021 was $6.80. Total unrecognized compensation expense relating to the nonvested stock options outstanding as of December 31, 2021 was approximately $2.0 million. This amount will be recognized as expense over the remainder of the vesting period, which is scheduled to be 2022 through 2025. Expense is recognized on a straight-line basis over the vesting period for the entire award. Forfeitures of unvested amounts due to terminations and/or early retirements are recognized as a reduction to the related expenses. Total unrecognized compensation expense relating to RSUs outstanding as of December 31, 2021 was approximately $6.6 million. This amount will be recognized as expense over the remainder of the performance and/or vesting period, which is scheduled to be 2022 through 2024. Expense is recognized on a straight-line basis from the date of grant through the end of the performance and/or vesting period for the entire award. Forfeitures of unvested amounts due to terminations are recognized as a reduction to the related expenses. |
Income Taxes | Income Taxes The Company uses the asset and liability method for calculating deferred federal income taxes. Income tax provisions are generally based on income reported for financial statement purposes. The provisions for federal income taxes for the years ended December 31, 2021, 2020 and 2019 included amounts currently payable and deferred income taxes resulting from the cumulative differences in the Company's assets and liabilities, determined on a tax return versus financial statement basis. Deferred tax assets and liabilities include provisions for net unrealized investment gains (losses) on fixed maturity securities as well as the net funded status of benefit plans with the changes for each period included in the respective components of AOCI within shareholders' equity. |
Earnings Per Share | Earnings Per ShareBasic earnings per share is computed based on the weighted average number of common shares outstanding plus the weighted average number of fully vested RSUs and common stock units (CSUs) payable as shares of HMEC common stock. Diluted earnings per share is computed based on the weighted average number of common shares and common stock equivalents outstanding, to the extent dilutive. The Company's common stock equivalents relate to outstanding common stock options, deferred compensation CSUs and incentive compensation RSUs, |
Consolidated Statements of Cash Flows | Consolidated Statements of Cash FlowsFor purposes of the Consolidated Statements of Cash Flows, cash constitutes cash on deposit at banks as well as restricted cash. |
Future Adoption of New Accounting Standards | Future Adoption of New Accounting Standards Accounting for Long-Duration Insurance Contracts In August 2018, the FASB issued accounting and disclosure guidance that contains targeted improvements to the accounting for long-duration insurance contracts. Under the new guidance, the cash flow assumptions used to measure the liability for future policy benefits for traditional insurance contracts will be required to be updated at least annually with changes recognized as a benefit expense (i.e., assumptions will no longer be locked-in). Insurance entities will be required to use a standard discount rate to measure the liabilities that will be equivalent to the yield from a high-quality bond. The new guidance also changes the amortization of DAC to be on a constant-level basis over the expected term of the related contracts with no interest accruing on the DAC balance. The new guidance also introduces a new category of contract features associated with deposit type contracts referred to as market risk benefits (MRBs). Contract features meeting the definition of a MRB will be measured at fair value. New disclosures will be required for long-duration insurance contracts in order to provide better transparency into the exposure of insurance entities and the drivers of their results. For public business entities, the guidance is effective for annual reporting periods beginning after December 15, 2022, including |
Fair Value Measurement | The Company is required to disclose estimated fair values for certain financial and nonfinancial assets and liabilities. Fair values of the Company's insurance contracts other than annuity contracts (which are investment contracts) and equity method limited partnership interests are not required to be disclosed. However, the estimated fair values of liabilities under all insurance contracts are taken into consideration in the Company's overall management of interest rate risk through the matching of investment maturities with amounts due under insurance contracts. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between knowledgeable, unrelated and willing market participants on the measurement date. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The Company categorizes its financial and nonfinancial assets and liabilities into a three-level hierarchy based on the priority of the inputs to the valuation technique. The three levels of inputs that may be used to measure fair value are: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include fixed maturity and equity securities (both common stock and preferred stock) that are traded in an active exchange market, as well as U.S. Treasury securities. Level 2 Unadjusted observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for the assets or liabilities. Level 2 assets and liabilities include fixed maturity securities (1) with quoted prices that are traded less frequently than exchange-traded instruments or (2) values based on discounted cash flows with observable inputs. This category generally includes certain U.S. Government and agency mortgage-backed securities, non-agency structured securities, corporate fixed maturity securities, preferred stocks, derivatives and embedded derivatives. Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, certain discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation and for which the significant inputs are unobservable. This category generally includes certain private debt and equity investments, as well as embedded derivatives. When the inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety. As a result, a Level 3 fair value measurement may include inputs that are observable (Level 1 or Level 2) and unobservable (Level 3). Net transfers into or out of each of the three levels are reported as having occurred at the end of the reporting period in which the transfers were determined. The following discussion describes the valuation methodologies used for financial assets and financial liabilities measured at fair value. The techniques utilized in estimating the fair values are affected by the assumptions used, including discount rates and estimates of the amount and timing of expected future cash flows. The use of different methodologies, assumptions and inputs may have a material effect on the estimated fair values of the Company's investment holdings. Care is exercised in deriving conclusions about the Company's business, its value or financial position based on the fair value information of financial assets and liabilities presented below. Fair value estimates are made at a specific point in time, based on available market information and judgments about the financial asset or financial liability, including estimates of both the timing and amount of expected future cash flows and the credit standing of the issuer. In some cases, fair value estimates cannot be substantiated by comparison to independent markets. In addition, the disclosed fair value may not be realized in the immediate settlement of the financial asset or financial liability. The disclosed fair values do not reflect any premium or discount that could result from offering for sale at one time an entire holding of a particular financial asset or financial liability. In periods of market disruption, the ability to observe prices and inputs may be reduced for many instruments. This condition could cause an instrument to be reclassified from Level 1 to Level 2 or from Level 2 to Level 3. Potential taxes and other expenses that would be incurred in an actual sale or settlement are not reflected in amounts disclosed. Investments The fair value of a fixed maturity security is the estimated amount at which the security could be exchanged in an orderly transaction between knowledgeable, unrelated and willing parties. The Company utilizes ICE Data Pricing, its investment managers and custodian bank to obtain fair value prices from independent third-party valuation service providers, broker quotes, model prices and matrix pricing. Each month, the Company obtains fair value prices from its investment managers and custodian bank, each of which use a variety of independent, nationally recognized pricing sources to determine market valuations for fixed maturity securities. Differences in prices between the sources that the Company considers significant are researched and the Company utilizes the price that it considers most representative of an exit price. Typical inputs used by these pricing sources include, but are not limited to, reported trades, bids, offers, benchmark yield curves, benchmarking of like securities, rating designations, sector groupings, issuer spreads and/or estimated cash flows, prepayment and default speeds, among others. The Company's fixed maturity securities portfolio is primarily publicly traded, which allows for a high percentage of the portfolio to be priced through pricing services. Approximately 90.2% and 91.9% of the portfolio, based on fair value, was priced through pricing services or index priced as of December 31, 2021 and 2020, respectively. The remainder of the portfolio was priced by broker quotes, model prices or matrix pricing. When non-binding broker quotes can be corroborated by comparison to other vendor quotes, pricing models or analyses, the securities are generally classified as Level 2, otherwise they are classified as Level 3. There were no significant changes to the valuation process during 2021. The valuation of hard-to-value fixed maturity securities (generally 150 -200 securities) is more subjective because the markets are less liquid and there is a lack of observable market-based inputs. This may increase the potential that the estimated fair value of an investment is not reflective of the price at which an actual transaction would occur. When the pricing sources cannot provide fair value determinations, the investment managers obtain non-binding price quotes from brokers. For those securities where the investment manager cannot obtain broker quotes, they will model the security, generally using anticipated cash flows of the underlying collateral. Brokers' valuation methodologies as well as investment managers’ modeling methodologies are sometimes matrix-based, using indicative evaluation measures and adjustments for specific security characteristics and market sentiment. The selection of the market inputs and assumptions used to estimate the fair value of hard-to-value fixed maturity securities requires judgment and includes: benchmark yield, liquidity premium, estimated cash flows, prepayment and default speeds, spreads, weighted average life, and credit rating. The extent of the use of each market input depends on the market sector and market conditions. Depending on the security, the priority of the use of inputs may change or some market inputs may not be relevant. For some securities, additional inputs may be necessary. The Company gains assurance that its portfolio of fixed maturity securities including hard-to-value fixed maturity securities is appropriately valued through the execution of various processes and controls designed to ensure the overall reasonableness and consistent application of valuation methodologies, including inputs and assumptions, and compliance with accounting standards. The Company’s processes and controls are designed to ensure (1) the valuation methodologies are appropriate and consistently applied, (2) the inputs and assumptions are reasonable and consistent with the objective of determining fair value, and (3) the fair values are accurately recorded. For example, on a continuing basis, the Company assesses the reasonableness of individual fair values that have stale security prices or that exceed certain thresholds as compared to previous fair values received from valuation service providers. The Company performs procedures to understand and assess the methodologies, processes and controls of valuation service providers. In addition, the Company may validate the reasonableness of fair values by comparing information obtained from valuation service providers or brokers to other third-party valuation sources for selected securities. To determine the fair value of equity securities, the Company utilizes its investment managers and its custodian bank to obtain fair value prices from independent third-party valuation service providers. Each month, the Company obtains fair value prices from its investment managers and custodian bank, each of which use a variety of independent, nationally recognized pricing sources to determine market valuations for equity securities. Policy loans and mortgage loans as well as investments in limited partnership interests which are accounted for using EMA are excluded from the fair value hierarchy. In summary, the following financial assets and financial liabilities are carried at fair value: Financial assets • Fixed maturity securities including hard-to-value fixed maturity securities, as described above. • Equity securities, as described above. • Short-term fixed maturity securities — Because of the nature of these assets, carrying amounts generally approximate fair values. • Derivatives — Fair values are based on the amount of cash expected to be received to settle each derivative on the reporting date. These amounts are obtained from each of the counterparties using industry accepted valuation models and observable inputs. Significant inputs include contractual terms, underlying index prices, market volatilities, interest rates and dividend yields. • FHLB membership and activity stocks — Fair value is based on redemption value, which is equal to par value. Financial liabilities • The fair value of derivatives embedded in IUL contracts is set equal to the fair value of the outstanding call options. • The fair value of derivatives embedded in FIA contracts is determined using the option budget method for each premium received (i.e., the option budget method is used as the future account growth rate). With this method, future excess cash flows (defined as benefits in excess of required non-forfeiture benefits) are discounted at the risk-free rate and adjusted for non-performance, to determine the fair value of the embedded derivatives. |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Deferred policy acquisition costs asset by segment | The Company's deferred policy acquisition costs (DAC) by reporting segment were as follows: ($ in millions) December 31, 2021 2020 Property & Casualty $ 24.4 $ 26.1 Supplemental 4.2 4.3 Retirement 153.8 137.7 Life 65.6 61.7 Total $ 248.0 $ 229.8 |
Adjustment to amortization expenses | The Company recognized the following adjustments to DAC amortization expense as a result of evaluating actual experience and prospective assumptions (i.e., the impact of unlocking): ($ in millions) Year Ended December 31, 2021 2020 2019 (Decrease) increase to DAC amortization expense: Retirement $ (1.3) $ (1.8) $ 3.5 Life (0.2) (0.3) (0.3) Total $ (1.5) $ (2.1) $ 3.2 |
Property and equipment | The following amounts are included in Other assets in the Consolidated Balance Sheets: ($ in millions) December 31, 2021 2020 Property and equipment $ 136.4 $ 131.3 Less: accumulated depreciation 70.4 66.6 Total $ 66.0 $ 64.7 |
Investment contract and life policy reserves | This table summarizes the Company's investment contract and policy reserves. ($ in millions) December 31, 2021 2020 Investment contract reserves $ 4,941.3 $ 4,847.6 Policy reserves 1,636.5 1,597.7 Total $ 6,577.8 $ 6,445.3 |
Summary of guaranteed minimum death benefit | The Company regularly monitors the GMDB reserve considering fluctuations in financial markets. The Company has relatively low exposure to GMDB risk as shown below. ($ in millions) December 31, 2021 2020 GMDB reserve $ 0.1 $ 0.1 Aggregate in-the-money death benefits under the GMDB provision 22.3 26.7 Variable annuity contract value distribution based on GMDB feature: No guarantee 24 % 26 % Return of premium guarantee 71 % 69 % Guarantee of premium roll-up at an annual rate of 3% or 5% 5 % 5 % Total 100 % 100 % |
Schedule of FHLB funding agreements | As of December 31, 2021, scheduled maturity dates for outstanding FHLB funding agreements were as follows: ($ in millions) Amount Interest Rate Maturity Date $10.0 0.000% May 16, 2022 60.0 0.489% January 13, 2023 25.0 0.427% February 10, 2023 20.0 0.446% November 15, 2023 100.0 0.249% December 15, 2023 50.0 0.449% January 12, 2024 25.0 0.374% April 3, 2024 10.0 0.393% May 22, 2024 50.0 0.393% May 22, 2024 10.0 0.530% February 14, 2025 10.0 0.448% February 28, 2025 50.0 0.448% February 28, 2025 12.5 0.670% June 26, 2025 125.0 0.570% September 11, 2025 200.0 0.225% January 16, 2026 25.0 0.298% September 9, 2026 Total $782.5 |
Stock options fair value pricing model weighted-average assumptions | The fair value of stock options granted was estimated on the respective dates of grant using the Black-Scholes option pricing model with the weighted average assumptions shown in the following table. Year Ended December 31, 2021 2020 2019 Number of stock options granted 183,272 234,248 282,040 Weighted average grant date fair value of stock options granted $ 7.73 $ 6.02 $ 6.26 Weighted average assumptions: Risk-free interest rate 0.8 % 0.8 % 2.5 % Expected dividend yield 3.0 % 2.7 % 2.9 % Expected life, in years 5.1 5.1 5.0 Expected volatility (based on historical volatility) 30.1 % 22.8 % 21.9 % |
Computations of net income per share on both basic and diluted bases, including reconciliations of the numerators and denominators | The computations of net income per share on both basic and diluted bases, including reconciliations of the numerators and denominators, were as follows: ($ in millions) Year Ended December 31, 2021 2020 2019 Basic: Net income for the period $ 142.8 $ 133.3 $ 184.4 Weighted average number of common shares during the period (in millions) 42.0 41.9 41.7 Net income per share - basic $ 3.40 $ 3.18 $ 4.42 Diluted: Net income for the period $ 142.8 $ 133.3 $ 184.4 Weighted average number of common shares during the period (in millions) 42.0 41.9 41.7 Weighted average number of common equivalent shares to reflect the dilutive effect of common stock equivalent securities (in millions): Stock options — — 0.1 CSUs related to deferred compensation for employees — — — RSUs related to incentive compensation 0.2 0.1 0.1 Total common and common equivalent shares adjusted to calculate diluted earnings per share (in millions) 42.2 42.0 41.9 Net income per share - diluted $ 3.39 $ 3.17 $ 4.40 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Components of net investment income | The components of net investment income for the following periods were as follows: ($ in millions) Year Ended December 31, 2021 2020 2019 Fixed maturity securities $ 235.6 $ 232.9 $ 283.2 Equity securities 5.3 4.7 4.9 Limited partnership interests 79.0 20.9 25.7 Short-term and other investments 11.6 11.4 (10.1) Investment expenses (10.1) (9.6) (9.4) Net investment income - investment portfolio 321.4 260.3 294.3 Investment income - deposit asset on reinsurance 101.1 97.3 70.8 Total net investment income $ 422.5 $ 357.6 $ 365.1 |
Summary of realized investment gains (losses) | Net investment gains (losses) for the following periods were as follows: ($ in millions) Year Ended December 31, 2021 2020 2019 Fixed maturity securities (1) $ (7.7) $ 9.4 $ 141.4 Equity securities (0.8) 1.8 16.0 Short-term investments and other (2.5) (13.5) (4.1) Net investment gains (losses) $ (11.0) $ (2.3) $ 153.3 (1) Net investment gains on fixed maturity securities include a $135.3 million realized investment gain associated with a transfer of investments to a reinsurer as consideration paid in connection with a reinsurance transaction of a $2.9 billion block of in force fixed and variable annuity business in 2019. See Notes 6 and 18 for further information. The following table reconciles net investment gains (losses) pretax by transaction type: ($ in millions) Year Ended December 31, 2021 2020 2019 Credit loss impairments (1) $ (8.1) $ — $ (1.1) Intent-to-sell impairments (2.3) (5.3) (0.3) Total impairments on investments recognized in net income (10.4) (5.3) (1.4) Sales and other, net 4.3 15.0 151.5 Change in fair value - equity securities (2.3) (0.2) 7.3 Change in fair value and losses realized on settlements - derivatives (2.6) (11.8) (4.1) Net investment (losses) gains $ (11.0) $ (2.3) $ 153.3 (1) Due to the adoption of the measurement of credit losses on financial instruments accounting standard in 2020, other-than-temporary write-downs reported in 2019 are now presented as credit losses, |
Schedule of allowance for credit loss impairments on fixed maturity securities | The following table presents changes in the allowance for credit loss impairments on fixed maturity securities classified as available for sale for the category of other asset-backed securities (no other categories of fixed maturity securities have an allowance for credit loss impairments): ($ in millions) Year Ended December 31, 2021 2020 Beginning balance $ — $ — Credit losses on fixed maturity securities for which credit losses were not previously reported (1) 8.1 — Net (increases) decreases related to credit losses previously reported — — Reduction of credit allowances related to sales — — Write-offs (0.4) — Ending balance $ 7.7 $ — (1) Because the standard for the measurement of credit losses on financial instruments became effective January 1, 2020, there are no allowances for credit loss impairments to report for the year ended December 31, 2019. |
Unrealized gains and losses on fixed maturities and equity securities | Amortized cost, net, unrealized investment gains (losses) and fair values of all fixed maturity securities in the portfolio were as follows: ($ in millions) Amortized Gross Gross Fair December 31, 2021 Fixed maturity securities U.S. Government and federally sponsored agency obligations: (1) Mortgage-backed securities $ 612.1 $ 51.9 $ 1.5 $ 662.5 Other, including U.S. Treasury securities 342.5 27.7 4.3 365.9 Municipal bonds 1,519.7 184.4 0.7 1,703.4 Foreign government bonds 40.2 3.4 — 43.6 Corporate bonds 2,217.7 176.2 5.2 2,388.7 Other asset-backed securities 1,065.5 16.6 6.9 1,075.2 Totals $ 5,797.7 $ 460.2 $ 18.6 $ 6,239.3 December 31, 2020 Fixed maturity securities U.S. Government and federally sponsored agency obligations: (1) Mortgage-backed securities $ 605.5 $ 79.6 $ 0.3 $ 684.8 Other, including U.S. Treasury securities 395.0 39.2 1.0 433.2 Municipal bonds 1,612.3 215.7 0.5 1,827.5 Foreign government bonds 40.2 4.9 — 45.1 Corporate bonds 1,905.2 221.6 3.9 2,122.9 Other asset-backed securities 1,230.4 24.1 22.7 1,231.8 Totals $ 5,788.6 $ 585.1 $ 28.4 $ 6,345.3 (1) Fair value includes securities issued by Federal National Mortgage Association (FNMA) of $376.7 million and $387.1 million; Federal Home Loan Mortgage Corporation (FHLMC) of $326.5 million and $344.3 million; and Government National Mortgage Association (GNMA) of $112.1 million and $132.3 million as of December 31, 2021 and 2020, respectively. |
Summary of fair value and gross unrealized losses of fixed maturity securities and equity securities in an unrealized loss position | Therefore, it was determined that the unrealized losses on the fixed maturity securities presented in the table below were not indicative of any impairments as of December 31, 2021. ($ in millions) 12 months or less More than 12 months Total Fair Value Gross Fair Value Gross Fair Value Gross December 31, 2021 Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 67.4 $ 1.3 $ 3.9 $ 0.2 $ 71.3 $ 1.5 Other 59.5 1.7 35.1 2.6 94.6 4.3 Municipal bonds 56.8 0.7 0.6 — 57.4 0.7 Foreign government bonds — — — — — — Corporate bonds 220.7 3.8 44.1 1.4 264.8 5.2 Other asset-backed securities 379.0 3.8 128.2 3.1 507.2 6.9 Total $ 783.4 $ 11.3 $ 211.9 $ 7.3 $ 995.3 $ 18.6 Number of positions with a gross unrealized loss 516 122 638 Fair value as a percentage of total fixed maturities securities fair value 12.6 % 3.4 % 16.0 % December 31, 2020 Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 4.9 $ 0.1 $ 2.6 $ 0.2 $ 7.5 $ 0.3 Other 95.9 1.0 — — 95.9 1.0 Municipal bonds 18.1 0.5 — — 18.1 0.5 Foreign government bonds — — — — — — Corporate bonds 126.6 3.7 10.9 0.2 137.5 3.9 Other asset-backed securities 316.9 17.2 409.3 5.5 726.2 22.7 Total $ 562.4 $ 22.5 $ 422.8 $ 5.9 $ 985.2 $ 28.4 Number of positions with a gross unrealized loss 308 123 431 Fair value as a percentage of total fixed maturities securities fair value 8.9 % 6.7 % 15.6 % |
Distribution of the company's fixed maturity portfolio by estimated expected maturity | The following table presents the distribution of the Company's fixed maturity securities portfolio by estimated expected maturity. Estimated expected maturities differ from contractual maturities, reflecting assumptions regarding borrowers' utilization of the right to call or prepay obligations with or without call or prepayment penalties. For structured securities, estimated expected maturities consider broker-dealer survey prepayment assumptions and are verified for consistency with the interest rate and economic environments. ($ in millions) December 31, 2021 Amortized Fair Percent of Estimated expected maturity: Due in 1 year or less $ 245.4 $ 250.8 4.0 % Due after 1 year through 5 years 1,613.8 1,686.2 27.0 % Due after 5 years through 10 years 1,600.5 1,729.5 27.7 % Due after 10 years through 20 years 1,339.9 1,488.2 23.9 % Due after 20 years 998.1 1,084.6 17.4 % Total $ 5,797.7 $ 6,239.3 100.0 % Average option-adjusted duration, in years 6.7 |
Proceeds received from sales of fixed maturities and equity securities | Proceeds received from sales of fixed maturity and equity securities, each determined using the specific identification method, and gross gains and gross losses realized as a result of those sales for each year were as follows: ($ in millions) Year Ended December 31, 2021 2020 2019 (1) Fixed maturity securities Proceeds received $ 578.2 $ 472.9 $ 805.9 Gross gains realized 10.5 20.5 150.9 Gross losses realized (7.7) (6.1) (7.8) Equity securities Proceeds received $ 4.7 $ 12.7 $ 29.9 Gross gains realized 1.5 2.2 9.2 Gross losses realized (0.1) (1.9) (0.8) (1) Gross gains realized presented above include a $135.3 million realized investment gain associated with a transfer of investments to a reinsurer as consideration paid during the second quarter of 2019 in connection with the reinsurance of a $2.9 billion block of in force fixed and variable annuity business. See Notes 6 and 18 for further information. |
Reconciliation of net unrealized investment gains (losses) on fixed maturity securities and equity securities | The following table reconciles the net unrealized investment gains (losses) on fixed maturity securities, net of tax, included in AOCI, before the impact on DAC: ($ in millions) Year Ended December 31, 2021 2020 2019 Net unrealized investment gains (losses) on fixed maturity securities, net of tax Beginning of period $ 439.8 $ 264.4 $ 111.7 Change in net unrealized investment (losses) gains on fixed maturity securities (97.6) 184.2 277.1 Reclassification of net investment losses (gains) on fixed maturity securities to net income 6.7 (8.8) (124.4) End of period $ 348.9 $ 439.8 $ 264.4 |
Schedule of carrying amounts of equity method limited partnership interests | ($ in millions) Year Ended December 31, 2021 2020 Commercial mortgage loan funds $ 346.8 $ 149.6 Private equity funds 74.0 39.6 Infrastructure debt funds 62.4 58.3 Infrastructure equity funds 58.3 52.1 Other funds (1) 171.3 149.4 Total $ 712.8 $ 449.0 (1) Other funds consist primarily of limited partnership interests in hedge funds, real estate equity and corporate mezzanine funds. |
Offsetting assets and liability | The following table presents the instruments that were subject to a master netting arrangement for the Company. ($ in millions) Gross Net Amounts Gross Amounts Not Offset Gross Financial Cash Net December 31, 2021 Asset derivatives Free-standing derivatives $ 10.7 $ — $ 10.7 $ 4.5 $ 6.4 $ (0.2) December 31, 2020 Asset derivatives Free-standing derivatives $ 16.8 $ — $ 16.8 $ 13.7 $ 2.6 $ 0.5 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Summary of company's fair value hierarchy measured at recurring basis | The following table presents the Company's fair value hierarchy for financial assets and financial liabilities measured and carried at fair value on a recurring basis. At December 31, 2021, Level 3 investments comprised approximately 5.6% of the Company's total investment portfolio at fair value. ($ in millions) Carrying Fair Fair Value Measurements at Level 1 Level 2 Level 3 December 31, 2021 Financial Assets Investments Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 662.5 $ 662.5 $ — $ 662.5 $ — Other, including U.S. Treasury securities 365.9 365.9 17.7 348.2 — Municipal bonds 1,703.4 1,703.4 — 1,642.6 60.8 Foreign government bonds 43.6 43.6 — 43.6 — Corporate bonds 2,388.7 2,388.7 14.9 2,163.5 210.3 Other asset-backed securities 1,075.2 1,075.2 — 976.3 98.9 Total fixed maturity securities 6,239.3 6,239.3 32.6 5,836.7 370.0 Equity securities 147.2 147.2 35.2 110.6 1.4 Short-term investments 157.8 157.8 157.8 — — Other investments 43.6 43.6 — 43.6 — Totals $ 6,587.9 $ 6,587.9 $ 225.6 $ 5,990.9 $ 371.4 Separate Account (variable annuity) assets (1) $ 3,441.0 $ 3,441.0 $ 3,441.0 $ — $ — Financial Liabilities Investment contract and life policy reserves, embedded derivatives $ 2.1 $ 2.1 $ — $ 2.1 $ — Other policyholder funds, embedded derivatives $ 106.6 $ 106.6 $ — $ — $ 106.6 December 31, 2020 Financial Assets Investments Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 684.8 $ 684.8 $ — $ 673.7 $ 11.1 Other, including U.S. Treasury securities 433.2 433.2 18.4 414.8 — Municipal bonds 1,827.5 1,827.5 — 1,767.9 59.6 Foreign government bonds 45.1 45.1 — 45.1 — Corporate bonds 2,122.9 2,122.9 14.9 1,952.2 155.8 Other asset-backed securities 1,231.8 1,231.8 — 1,103.5 128.3 Total fixed maturity securities 6,345.3 6,345.3 33.3 5,957.2 354.8 Equity securities 121.6 121.6 39.2 82.1 0.3 Short-term investments 141.8 141.8 137.7 4.1 — Other investments 36.3 36.3 — 36.3 — Totals $ 6,645.0 $ 6,645.0 $ 210.2 $ 6,079.7 $ 355.1 Separate Account (variable annuity) assets (1) $ 2,891.4 $ 2,891.4 $ 2,891.4 $ — $ — Financial Liabilities Investment contract and life policy reserves, embedded derivatives $ 2.5 $ 2.5 $ — $ 2.5 $ — Other policyholder funds, embedded derivatives $ 104.5 $ 104.5 $ — $ — $ 104.5 (1) Separate Account (variable annuity) assets represent contractholder funds invested in various actively traded mutual funds that have daily quoted net asset values that are readily determinable for identical assets that the Company can access. Separate Account (variable annuity) liabilities are equal to the estimated fair value of Separate Account (variable annuity) assets. |
Table for reconciliations for all Level 3 assets measured at fair value on a recurring basis | The following tables present reconciliations for the periods indicated for all Level 3 financial assets and financial liabilities measured at fair value on a recurring basis. ($ in millions) Financial Assets Financial Liabilities (1) Municipal Corporate Mortgage-Backed and Other Asset- Backed Securities (2) Total Equity Total Beginning balance, January 1, 2021 $ 59.6 $ 155.8 $ 139.4 $ 354.8 $ 0.3 $ 355.1 $ 104.5 Transfers into Level 3 (3) 18.6 131.7 21.3 171.6 1.0 172.6 — Transfers out of Level 3 (3) — (64.4) (19.2) (83.6) — (83.6) — Total gains or losses Net investment gains (losses) included in net income related to financial assets — — (8.2) (8.2) 0.1 (8.1) — Net investment (gains) losses included in net income related to financial liabilities — — — — — — 10.0 Net unrealized investment gains (losses) included in OCI (2.5) — 8.8 6.3 — 6.3 — Purchases — — — — — — — Issuances — — — — — — 4.9 Sales — — — — — — — Settlements — — — — — — — Paydowns, maturities and distributions (14.9) (12.8) (43.2) (70.9) — (70.9) (12.8) Ending balance, December 31, 2021 $ 60.8 $ 210.3 $ 98.9 $ 370.0 $ 1.4 $ 371.4 $ 106.6 Beginning balance, January 1, 2020 $ 44.3 $ 104.0 $ 146.8 $ 295.1 $ 0.1 $ 295.2 $ 93.7 Transfers into Level 3 (3) 80.7 83.6 104.3 268.6 0.2 268.8 — Transfers out of Level 3 (3) (69.1) (36.6) (84.6) (190.3) — (190.3) — Total gains or losses Net investment gains (losses) included in net income related to financial assets — — (0.3) (0.3) — (0.3) — Net investment (gains) losses included in net income related to financial liabilities — — — — — — 11.5 Net unrealized investment gains (losses) included in OCI 4.3 1.4 (10.5) (4.8) — (4.8) — Purchases — 6.9 1.9 8.8 — 8.8 — Issuances — — — — — — 8.4 Sales — — 1.2 1.2 — 1.2 — Settlements — — — — — — — Paydowns, maturities and distributions (0.6) (3.5) (19.4) (23.5) — (23.5) (9.1) Ending balance, December 31, 2020 $ 59.6 $ 155.8 $ 139.4 $ 354.8 $ 0.3 $ 355.1 $ 104.5 (1) Represents embedded derivatives, all related to the Company's FIA products, reported in Other policyholder funds in the Company's Consolidated Balance Sheets. (2) Includes U.S. Government and federally sponsored agency obligations for mortgage-backed securities and other asset-backed securities. (3) Transfers into and out of Level 3 during the years ended December 31, 2021 and 2020 were attributable to changes in the availability of observable market information for individual fixed maturity securities and short-term investments. The Company's policy is to recognize transfers into and out of the levels as having occurred at the end of the reporting period in which the transfers were determined. |
Fair value measurement inputs and valuation techniques | The following table provides quantitative information about the significant unobservable inputs for recurring fair value measurements categorized within Level 3. ($ in millions) Financial Fair Value at Valuation Technique(s) Unobservable Inputs Range (Weighted Average) and Single Point Best Estimate (1) Municipal bonds $ 60.8 discounted cash flow I spread (2) 374 - 425 bps Corporate bonds 210.3 discounted cash flow N spread (3) 211 - 531 bps discounted cash flow I spread (2) 333 - 365 bps discounted cash flow T spread (4) 130 - 540 bps discounted cash flow yield 3.4% - 8.8% discounted cash flow discount rate 11.3% - 12.0% market comparable option adjusted spread 12.5% Other asset-backed securities 98.9 vendor price haircut 3.0% - 5.0% discounted cash flow discount margin 14.6% discounted cash flow discount rate 8.5% - 20.0% discounted cash flow median comparable yield 7.3% - 16.1% market comparable median price $54.79 - $97.95 discounted cash flow N spread (3) 341 bps discounted cash flow T spread (4) 196 bps Equity securities 1.4 Black-Scholes volatility low 29.0% - high 34.0% discounted cash flow variable $100.00 - $121.95 ($ in millions) Financial Fair Value at Valuation Technique(s) Unobservable Inputs Range (Weighted Average) and Single Point Best Estimate (1) Derivatives $ 106.6 discounted cash flow lapse rate 5.3% mortality multiplier (5) 66.8% option budget 0.9% - 2.5% non-performance adjustment (6) 5.0% (1) When a range of unobservable inputs is not readily available, the Company uses a single point best estimate. (2) "I spread" is the interpolated weighted average life point on the "on the run" (OTR) point of the curve. (3) "N spread" is the interpolated weighted average life point on the swap curve. (4) "T spread" is a specific point on the OTR curve. (5) Mortality multiplier is applied to the Annuity 2000 table. (6) Determined as a percentage of the risk-free rate. |
Summary of fair value assets and liabilities measured on nonrecurring basis | The following table presents the carrying amount, fair value and fair value hierarchy of these financial assets and financial liabilities. ($ in millions) Carrying Fair Fair Value Measurements at Level 1 Level 2 Level 3 December 31, 2021 Financial Assets Other investments $ 148.8 $ 152.4 $ — $ — $ 152.4 Deposit asset on reinsurance 2,481.5 2,935.1 — — 2,935.1 Financial Liabilities Investment contract and policy reserves, fixed annuity contracts 4,941.3 5,004.9 — — 5,004.9 Investment contract and life policy reserves, account values on life contracts 105.4 115.4 — — 115.4 Other policyholder funds 839.3 839.3 — 782.8 56.5 Short-term debt 249.0 249.0 — — 249.0 Long-term debt 253.6 277.4 — 277.4 — December 31, 2020 Financial Assets Other investments $ 168.3 $ 172.1 $ — $ — $ 172.1 Deposit asset on reinsurance 2,420.9 3,030.6 — — 3,030.6 Financial Liabilities Investment contract and policy reserves, fixed annuity contracts 4,847.6 4,963.3 — — 4,963.3 Investment contract and life policy reserves, account values on life contracts 98.7 108.4 — — 108.4 Other policyholder funds 646.8 646.8 — 590.7 56.1 Short-term debt 135.0 135.0 — — 135.0 Long-term debt 302.3 331.1 — 331.1 — |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of derivative instruments in statement of financial position, fair value | The fair values of derivatives, including derivatives embedded in FIA and IUL contracts, are presented in the Consolidated Balance Sheets as follows: ($ in millions) December 31, 2021 2020 Assets Derivatives, reported in Short-term and other investments $ 10.7 $ 16.8 Liabilities FIA - embedded derivatives, reported in Other policyholder funds 106.6 104.5 IUL - embedded derivatives, reported in Investment contract and policy reserves 2.1 2.5 |
Derivative instruments, gain (loss) | The changes in fair value of derivatives included in the Consolidated Statements of Operations were as follows: ($ in millions) Years Ended December 31, 2021 2020 2019 Change in fair value of derivatives: (1) Revenues Net investment gains (losses) $ 8.7 $ 0.2 $ 9.5 Change in fair value of embedded derivatives: Revenues Net investment gains (losses) (11.3) (12.1) (13.6) (1) Includes gains or losses recognized at option expiration or early termination and changes in fair value for open positions. |
Financing receivable credit quality indicators | The notional amount and fair value of call options by counterparty and each counterparty's long-term credit ratings were as follows: ($ in millions) December 31, 2021 December 31, 2020 Credit Rating Notional Amount Fair Notional Amount Fair Counterparty S&P Moody's Bank of America, N.A. A+ Aa2 $ 193.0 $ 6.3 $ 205.2 $ 14.0 Barclays Bank PLC A A1 98.7 4.1 81.9 2.8 Citigroup Inc. BBB+ A3 — — — — Credit Suisse International A+ A1 14.0 0.3 — — Societe Generale A A1 — — — — Total $ 305.7 $ 10.7 $ 287.1 $ 16.8 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | The changes in the carrying amount of goodwill by reportable segment for the year ended December 31, 2021 were as follows: ($ in millions) December 31, Impairments Acquisitions December 31, Property & Casualty $ 9.5 $ — $ — $ 9.5 Supplemental 19.6 — — 19.6 Retirement 4.5 — — 4.5 Life 9.9 — — 9.9 Total $ 43.5 $ — $ — $ 43.5 |
Summary of finite-lived intangible assets | As of December 31, 2021 the outstanding amounts of definite-lived intangible assets subject to amortization were as follows: ($ in millions) Weighted Average Useful Life (in Years) At inception: Value of business acquired 30 $ 94.4 Value of distribution acquired 17 54.0 Value of agency relationships 14 17.0 Value of customer relationships 10 9.1 Total 23 174.5 Accumulated amortization and impairments: Value of business acquired (17.6) Value of distribution acquired (11.6) Value of agency relationships (6.3) Value of customer relationships (4.4) Total (39.9) Net intangible assets subject to amortization: $ 134.6 |
Future amortization expense | Estimated future amortization of the Company's definite-lived intangible assets were as follows: ($ in millions) Year Ending December 31, 2022 $ 12.1 2023 11.2 2024 10.5 2025 9.8 2026 9.2 Thereafter 81.8 Total $ 134.6 |
Summary of indefinite-lived intangible assets | Indefinite-lived intangible assets (not subject to amortization) as of December 31, 2021 were as follows: ($ in millions) December 31, Impairments Acquisitions December 31, Trade names $ 7.9 $ — $ — $ 7.9 State licenses 2.9 — — 2.9 Total $ 10.8 $ — $ — $ 10.8 |
Unpaid Claims and Claim Expen_2
Unpaid Claims and Claim Expenses (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Insurance Loss Reserves [Abstract] | |
Reconciliation of property and casualty unpaid claims and claim expenses | The end of the year gross reserve (before reinsurance) balances and the reinsurance recoverable balances are reflected on a gross basis in the Consolidated Balance Sheets. ($ in millions) Years Ended December 31, 2021 2020 2019 Property & Casualty segment Gross reserves, beginning of year (1) $ 372.2 $ 387.0 $ 367.2 Less: reinsurance recoverables 112.9 120.5 89.7 Net reserves, beginning of year (2) 259.3 266.5 277.5 Incurred claims and claim expenses: Claims occurring in the current year 455.1 441.2 483.1 Decrease in estimated reserves for claims occurring in prior years (3) (7.2) (10.2) (7.5) Total claims and claim expenses incurred (4) 447.9 431.0 475.6 Claims and claim expense payments for claims occurring during: Current year 307.1 291.4 329.5 Prior years 148.0 146.8 157.1 Total claims and claim expense payments 455.1 438.2 486.6 Net reserves, end of year (2) 252.1 259.3 266.5 Plus: reinsurance recoverables 110.3 112.9 120.5 Gross reserves, end of year (1) $ 362.4 $ 372.2 $ 387.0 (1) Unpaid claims and claim expenses as reported in the Consolidated Balance Sheets also include reserves for Supplemental, Retirement and Life of $63.5 million, $66.6 million and $55.9 million as of December 31, 2021, 2020 and 2019, respectively, in addition to Property & Casualty reserves. (2) Reserves are net of anticipated reinsurance recoverables. (3) Shows the amounts by which the Company decreased its reserves in each of the periods indicated for claims occurring in previous periods to reflect subsequent information on such claims and changes in their projected final settlement costs. Also refer to the paragraphs below for additional information regarding prior years' reserve development recognized in 2021, 2020 and 2019. (4) Benefits, claims and settlement expenses as reported in the Consolidated Statements of Operations also include amounts for Supplemental, Retirement and Life of $169.8 million, $137.9 million, and $109.5 million for the years ended December 31, 2021, 2020 and 2019, respectively, in addition to Property & Casualty amounts. |
Schedule of average annual percentage payout of incurred claims by age, also referred to as a history of claims duration | Below is the average annual percentage payout of incurred claims by age, also referred to as a history of claims duration: Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 Homeowners 79.6 % 17.1 % 2.0 % 0.6 % 0.5 % 0.2 % — — — — Auto liability 40.0 % 34.2 % 14.1 % 6.5 % 3.3 % 1.3 % 0.5 % 0.1 % — — Auto physical damage 95.6 % 4.7 % (0.3) % — — — — — — — |
Schedule of short-duration insurance contracts, claims development | The following tables illustrate the incurred and paid claims development by accident year on a net basis for the lines of homeowners, auto liability and auto physical damage. Conditions and trends that have affected the development of these reserves in the past will not necessarily reoccur in the future. It may not be appropriate to use this cumulative history in the projection of future performance. The information about incurred and paid claims development for the years ended December 31, 2012 to 2020 is presented as unaudited supplementary information. ($ in millions) Homeowners Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, As of December 31, 2021 Total of Incurred- Cumulative Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012 $ 108.8 $ 109.2 $ 109.4 $ 106.5 $ 106.3 $ 106.3 $ 106.0 $ 106.0 $ 106.0 $ 106.0 $ — 21.6 2013 105.6 107.5 104.0 102.4 102.3 101.8 101.7 101.7 101.7 — 19.2 2014 111.6 113.5 109.1 106.8 106.6 106.6 106.4 106.4 — 20.1 2015 111.7 115.1 114.4 114.1 115.1 114.9 114.9 — 18.7 2016 115.9 118.6 117.0 117.9 117.9 117.9 — 19.9 2017 126.3 129.8 132.7 130.7 130.8 0.3 19.9 2018 166.8 157.4 158.9 158.1 0.4 21.1 2019 130.4 129.9 132.1 2.5 17.5 2020 155.7 151.9 11.1 19.6 2021 150.2 22.6 15.5 Total $ 1,270.0 ($ in millions) Homeowners Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012 $ 84.3 $ 101.6 $ 104.2 $ 105.2 $ 105.6 $ 105.9 $ 106.0 $ 106.0 $ 106.0 $ 106.0 2013 76.9 96.6 99.4 101.0 101.5 101.7 101.7 101.7 101.7 2014 83.3 103.0 105.7 106.1 106.3 106.4 106.4 106.4 2015 90.7 109.3 111.9 113.3 114.6 114.9 114.7 2016 95.8 113.2 115.1 117.5 117.7 117.8 2017 106.8 128.5 129.8 130.0 130.5 2018 130.5 152.4 157.0 157.4 2019 103.8 126.2 129.1 2020 106.8 138.7 2021 114.9 Total 1,217.2 Outstanding prior to 2012 — Prior years paid — Liabilities for claims and claim adjustment expenses, net of reinsurance $ 52.8 ($ in millions) Auto Liability Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, As of December 31, 2021 Total of Incurred- Cumulative Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012 $ 156.4 $ 153.8 $ 150.3 $ 149.3 $ 147.6 $ 145.8 $ 145.6 $ 145.5 $ 145.9 $ 145.8 $ — 18.6 2013 153.9 152.9 150.7 150.7 148.1 148.0 148.1 148.3 147.7 — 19.4 2014 155.1 157.2 158.5 159.9 159.8 159.4 159.3 159.4 0.2 20.3 2015 165.5 172.6 177.0 178.3 178.7 179.2 178.9 0.4 20.8 2016 180.4 184.4 184.6 186.6 188.1 189.2 0.5 21.3 2017 188.0 188.8 188.6 189.1 191.7 1.9 20.1 2018 200.3 195.3 192.9 189.8 3.8 19.5 2019 181.1 180.1 176.7 8.9 18.9 2020 137.0 134.9 20.1 13.1 2021 142.2 55.3 12.8 Total $ 1,656.3 ($ in millions) Auto Liability Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012 $ 61.3 $ 109.6 $ 127.2 $ 138.6 $ 142.9 $ 144.6 $ 145.1 $ 145.2 $ 145.3 $ 145.3 2013 62.2 108.9 131.2 140.0 145.3 146.8 147.4 147.4 147.5 2014 61.3 117.5 139.5 149.1 155.8 157.6 158.6 158.8 2015 70.8 134.5 158.0 170.1 174.5 176.7 177.7 2016 73.1 140.9 166.8 177.8 184.5 188.1 2017 70.7 139.5 166.6 179.8 185.8 2018 77.5 141.5 168.6 180.7 2019 69.7 129.1 155.5 2020 51.5 94.0 2021 52.9 Total 1,486.3 Outstanding prior to 2012 1.5 Prior years paid — Liabilities for claims and claim adjustment expenses, net of reinsurance $ 171.5 ($ in millions) Auto Physical Damage Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, As of December 31, 2021 Total of Incurred- Cumulative Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012 $ 83.8 $ 82.3 $ 83.4 $ 83.4 $ 83.4 $ 83.3 $ 83.3 $ 83.3 $ 83.3 $ 83.3 $ — 78.2 2013 91.4 88.9 88.7 88.6 88.5 88.5 88.5 88.5 88.4 — 80.9 2014 95.6 95.6 95.4 95.2 95.2 95.2 95.2 95.2 — 87.9 2015 99.3 98.0 97.6 97.5 97.6 97.6 97.6 — 87.5 2016 112.4 109.5 109.3 109.6 109.6 109.5 — 93.2 2017 115.5 111.8 110.5 110.6 110.5 — 91.3 2018 109.0 108.9 108.3 108.3 — 94.5 2019 111.6 110.5 110.0 (0.2) 92.2 2020 87.0 86.9 (0.8) 68.8 2021 105.0 (6.7) 69.7 Total $ 994.7 ($ in millions) Auto Physical Damage Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012 $ 80.5 $ 83.4 $ 83.4 $ 83.4 $ 83.3 $ 83.3 $ 83.3 $ 83.3 $ 83.3 $ 83.3 2013 85.1 88.7 88.6 88.5 88.5 88.5 88.5 88.4 88.4 2014 88.9 95.4 95.3 95.3 95.3 95.2 95.2 95.2 2015 92.1 97.9 97.7 97.6 97.6 97.6 97.6 2016 106.5 109.7 109.5 109.6 109.6 109.6 2017 105.2 110.8 110.7 110.6 110.6 2018 103.6 109.1 108.3 108.3 2019 106.2 110.7 110.1 2020 84.1 87.6 2021 97.3 Total 988.0 Outstanding prior to 2012 — Prior years paid — Liabilities for claims and claim adjustment expenses, net of reinsurance $ 6.7 |
Schedule of reconciliation of the net incurred and paid claims development tables to the liability for claims and claim adjustment expenses | The reconciliation of the net incurred and paid claims development tables to the liability for claims and claim adjustment expenses in the Consolidated Balance Sheet is as follows: ($ in millions) Year Ended December 31, 2021 Property & Casualty segment Net reserves Homeowners $ 52.8 Auto liability 171.5 Auto physical damage 6.7 Other short duration lines 2.8 Total net reserves for unpaid claims and claim adjustment expense, net of reinsurance 233.8 Reinsurance recoverable on unpaid claims Homeowners 1.4 Auto liability 99.9 Other short duration lines 9.0 Total reinsurance recoverable on unpaid claims 110.3 Insurance lines other than short duration (1) 63.5 Unallocated claims adjustment expenses 18.3 Total other than short duration and unallocated claims adjustment expenses 81.8 Gross reserves, end of year (1) $ 425.9 (1) This line includes Supplemental, Retirement and Life reserves included in the Consolidated Balance Sheet. |
Reinsurance and Catastrophes (T
Reinsurance and Catastrophes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Insurance [Abstract] | |
Summary of reinsurance recoverable on unpaid insurance reserves | The total amounts of reinsurance recoverable on unpaid insurance reserves classified as assets and reported in Other assets in the Consolidated Balance Sheets were as follows: ($ in millions) December 31, 2021 2020 Reinsurance recoverables on reserves and unpaid claims Property & Casualty Reinsurance companies $ 10.4 $ 13.2 State insurance facilities 99.9 99.7 Life and health 9.3 9.6 Total $ 119.6 $ 122.5 |
Effects of reinsurance on premiums and benefits | The effects of reinsurance on premiums written and contract deposits; premiums and contract charges earned; and benefits, claims and settlement expenses were as follows: ($ in millions) Gross Ceded to Other Companies (1) Assumed Net Year Ended December 31, 2021 Premiums written and contract deposits (2) $ 1,370.1 $ 23.1 $ 9.4 $ 1,356.4 Premiums and contract charges earned 913.2 33.3 9.7 889.6 Benefits, claims and settlement expenses 619.3 7.8 6.2 617.7 Year Ended December 31, 2020 Premiums written and contract deposits (2) 1,369.9 20.4 9.8 1,359.3 Premiums and contract charges earned 949.6 28.8 9.9 930.7 Benefits, claims and settlement expenses 475.7 (86.2) 7.0 568.9 Year Ended December 31, 2019 Premiums written and contract deposits (2) 1,337.8 23.9 10.6 1,324.5 Premiums and contract charges earned 917.6 30.4 10.8 898.0 Benefits, claims and settlement expenses 633.9 56.3 7.5 585.1 (1) Excludes the annuity reinsurance agreement accounted for using the deposit method that is discussed in Note 6. (2) This measure is not based on accounting principles generally accepted in the U.S. (non-GAAP). An explanation of this non-GAAP measure is contained in the Glossary of Selected Terms included as an exhibit in the Company's reports filed with the SEC. |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Summary of indebtedness outstanding | Indebtedness and scheduled maturities consisted of the following: ($ in millions) Interest Final December 31, 2021 2020 Short-term debt Bank Credit Facility Variable 2026 $ 249.0 $ 135.0 Long-term debt (1) 4.50% Senior Notes, Aggregate principal amount of $250.0 less unaccrued discount of $0.3 and $0.4 and unamortized debt issuance costs of $1.1 and $1.3 4.50% 2025 248.6 248.3 Federal Home Loan Bank borrowing 0.00% 2022 5.0 54.0 Total $ 502.6 $ 437.3 (1) The Company designates debt obligations as "long-term" based on maturity date at issuance. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Summary of income tax assets and liabilities | The income tax assets and liabilities included in Other assets and Other liabilities, respectively, in the Consolidated Balance Sheets were as follows: ($ in millions) December 31, 2021 2020 Income tax (asset) liability Current $ (9.5) $ (12.6) Deferred 190.5 206.7 |
Summary of deferred tax assets and liabilities | The "temporary differences" that gave rise to the deferred tax balances were as follows: ($ in millions) December 31, 2021 2020 Deferred tax assets Unearned premium reserve reduction $ 11.7 $ 11.5 Compensation accruals 9.6 9.5 Impaired securities 2.3 2.1 Other comprehensive income - net funded status of benefit plans 2.7 3.0 Discounting of unpaid claims and claim expense tax reserves 2.5 2.5 Intangibles 0.1 — Postretirement benefits other than pensions 0.3 0.3 Total gross deferred tax assets 29.2 28.9 Deferred tax liabilities Other comprehensive income - net unrealized gains on securities 101.1 124.7 Deferred policy acquisition costs 37.3 36.3 Life insurance future policy benefit reserve 30.7 26.7 Life insurance future policy benefit reserve (transitional rule) 8.5 10.7 Discounting of unpaid claims and claim expense tax reserves (transitional rule) 0.6 0.8 Investment related adjustments 37.3 34.2 Intangibles — 0.2 Other, net 4.2 2.0 Total gross deferred tax liabilities 219.7 235.6 Net deferred tax liability $ 190.5 $ 206.7 |
Income taxes expenses | The components of the provision for income tax expense were as follows: ($ in millions) Years Ended December 31, 2021 2020 2019 Current $ 27.7 $ 16.9 $ 31.5 Deferred 4.4 9.4 20.5 Total income tax expense $ 32.1 $ 26.3 $ 52.0 |
Income taxes expenses reconciliation | Income tax expense for the following periods differed from the expected tax computed by applying the federal corporate tax rate of 21% for 2021, 2020 and 2019 to income before income taxes as follows: ($ in millions) Years Ended December 31, 2021 2020 2019 Expected federal tax on income $ 36.7 $ 33.5 $ 49.6 Add (deduct) tax effects of: Tax-exempt interest (3.9) (4.2) (4.2) Dividend received deduction (2.2) (1.5) (1.4) Goodwill impairment — 0.2 5.9 CARES Act net operating loss carryback — (2.8) — Employee share-based compensation (1.3) (0.5) 0.3 Compensation deduction limitation 1.5 0.7 0.7 Prior year adjustments 0.1 (0.2) (0.7) Other, net 1.2 1.1 1.8 Income tax expense provided on income $ 32.1 $ 26.3 $ 52.0 |
Unrecognized tax benefits, excluding interest and penalties | A reconciliation of the beginning and ending amounts of unrecognized tax benefits, excluding interest and penalties, is as follows: ($ in millions) Years Ended December 31, 2021 2020 2019 Balance as of the beginning of the year $ 2.3 $ 2.0 $ 1.8 Increases related to prior year tax positions — 0.2 0.1 Decreases related to prior year tax positions (0.1) — — Increases related to current year tax positions — 0.1 0.1 Settlements — — — Lapse of statute (0.5) — — Balance as of the end of the year $ 1.7 $ 2.3 $ 2.0 |
Operating Leases (Tables)
Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Schedule of components lease expense | The components of lease expense were as follows: ($ in millions) Years Ended December 31, 2021 2020 Operating lease cost $ 4.3 $ 4.5 Short-term lease cost 0.1 0.1 Total lease cost $ 4.4 $ 4.6 |
Schedule of supplemental cash flow information related to operating leases | Supplemental cash flow information related to operating leases was as follows: ($ in millions) Years Ended December 31, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities $ 4.3 $ 4.5 ($ in millions) Years Ended December 31, 2021 2020 2019 Cash $ 133.0 $ 21.8 $ 25.2 Restricted cash 0.7 0.5 0.3 Total cash and restricted cash shown in the Consolidated Statements of Cash Flows $ 133.7 $ 22.3 $ 25.5 Cash paid during the year for: Interest $ 13.5 $ 15.5 $ 14.1 Income taxes 23.7 17.3 22.9 |
Supplemental balance sheet information related to operating leases | Supplemental balance sheet information related to operating leases were as follows: ($ in millions, except lease terms and discount rates) December 31, 2021 2020 Assets: Right of use assets, included in Other assets $ 9.0 $ 12.6 Liabilities: Operating lease liabilities, included in Other liabilities $ 10.0 $ 13.6 Weighted average remaining lease term 3.07 3.63 Weighted average discount rate 3.67 % 3.75 % |
Schedule of future minimum lease payments under non-cancellable operating leases | Future minimum lease payments under non-cancellable operating leases as of December 31, 2021 are as follows: ($ in millions) Year Ending December 31, 2022 $ 4.2 2023 3.5 2024 2.0 2025 0.8 2026 — Thereafter — Total future minimum lease payments 10.5 Less imputed interest (0.5) Total $ 10.0 |
Shareholders' Equity and Shar_2
Shareholders' Equity and Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Summary of stock units and stock options outstanding under the comprehensive Plan | As further described in the paragraphs below, CSUs, stock options and RSUs under the Comprehensive Plan were as follows: December 31, 2021 2020 2019 CSUs related to deferred compensation for Directors 26,313 23,609 28,526 CSUs related to deferred compensation for employees 16,571 20,467 25,194 Stock options 1,032,128 916,287 908,557 RSUs related to incentive compensation 834,981 823,393 889,438 Total 1,909,993 1,783,756 1,851,715 |
Summary of changes in outstanding options | Changes in outstanding options were as follows: Weighted Average Range of Options Outstanding Vested and December 31, 2020 $38.99 $28.88-$42.95 916,287 437,197 Granted $40.10 $40.10-$40.10 183,272 — Vested $41.27 $28.88-$42.95 — 163,519 Exercised $31.35 $31.01-$32.35 (8,015) (8,015) Forfeited $41.39 $41.10-$42.73 (49,411) — Expired $42.23 $41.83-$42.73 (10,005) — December 31, 2021 $39.10 $28.88-$42.95 1,032,128 592,701 |
Summary of options outstanding segregated by ranges of exercise prices | Option information segregated by ranges of exercise prices were as follows: December 31, 2021 Total Outstanding Options Vested and Exercisable Options Range of Options Weighted Weighted Options Weighted Weighted $28.88-$33.41 195,192 $30.81 3.59 195,192 $30.81 3.59 $36.04-$41.95 687,556 $40.61 7.52 285,474 $40.84 6.35 $42.73-$42.73 149,380 $42.95 6.18 112,035 $42.95 6.18 Total 1,032,128 $39.10 6.58 592,701 $37.94 5.41 |
Summary of changes in outstanding restricted common stock units | Changes in outstanding RSUs were as follows: Total Outstanding Units Vested Units Units Weighted Average Units Weighted Average December 31, 2020 823,393 $33.88 484,984 $27.48 Granted (1) 205,474 $41.29 — — Adjustment for performance achievement 14,272 $45.01 — — Vested — — 145,319 $42.15 Forfeited (47,214) $43.08 — — Distributed (2) (160,944) $38.43 (160,944) — December 31, 2021 834,981 $34.50 469,359 $28.27 (1) Includes dividends reinvested into additional RSUs. (2) Includes distributed units which were utilized to satisfy withholding taxes due on the distribution. |
Statutory Information and Div_2
Statutory Information and Dividend Restrictions (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Insurance [Abstract] | |
Statutory surplus and subsidiary dividend restrictions | The following table includes selected information for HMEC's insurance subsidiaries: ($ in millions) Year Ended December 31, 2021 2020 2019 Consolidated net income, statutory basis $ 117.2 $ 141.9 $ 62.3 Consolidated capital and surplus, statutory basis (1) $ 1,017.4 $ 937.3 $ 868.8 (1) Subject to regulatory restrictions. |
Retirement Plans and Other Po_2
Retirement Plans and Other Postretirement Benefits (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
Summary of contributions to qualified defined contribution plan, 401(k), non-qualified defined contribution plan and total assets of the plans | Contributions to employees' accounts under the 401(k) plan and the non-qualified defined contribution plan, as well as total assets of the plans, were as follows: ($ in millions) Year Ended December 31, 2021 2020 2019 401(k) plan Contributions to employees' accounts $ 8.2 $ 8.2 $ 8.2 Total assets at the end of the year 246.9 228.4 206.2 Non-qualified defined contribution plan Contributions to employees' accounts 0.1 0.1 0.1 Total assets at the end of the year — — — |
Funded status of the defined benefit, supplemental retirement pension plans and postretirement benefits other than pensions | The following tables summarize the funded status of the defined benefit and supplemental retirement pension plans as of December 31, 2021, 2020 and 2019 (the measurement dates) and identify (1) the assumptions used to determine the projected benefit obligation and (2) the components of net pension cost for the defined benefit plan and supplemental retirement plans for the following periods: ($ in millions) Defined Benefit Plan Supplemental December 31, December 31, 2021 2020 2019 2021 2020 2019 Change in benefit obligation: Projected benefit obligation at beginning of year $ 24.3 $ 24.8 $ 25.1 $ 15.7 $ 15.2 $ 15.4 Service cost 0.6 0.7 0.7 — — — Interest cost 0.5 0.7 1.0 0.3 0.5 0.6 Actuarial loss (gain) (0.6) 1.0 — (0.2) 1.3 0.5 Benefits paid (2.6) (1.5) (2.0) (1.3) (1.3) (1.3) Settlements — (1.4) — — — — Projected benefit obligation at end of year $ 22.2 $ 24.3 $ 24.8 $ 14.5 $ 15.7 $ 15.2 Change in plan assets: Fair value of plan assets at beginning of year $ 22.0 $ 23.2 $ 22.1 $ — $ — $ — Actual return on plan assets 1.0 2.3 3.5 — — — Employer contributions — — — 1.3 1.3 1.3 Benefits paid (2.6) (1.5) (2.0) (1.3) (1.3) (1.3) Expenses paid (0.6) (0.6) (0.4) — — — Settlements — (1.4) — — — — Fair value of plan assets at end of year $ 19.8 $ 22.0 $ 23.2 $ — $ — $ — Funded status $ (2.4) $ (2.3) $ (1.6) $ (14.5) $ (15.7) $ (15.2) Prepaid (accrued) benefit expense $ 4.9 $ 5.5 $ 6.7 $ 8.7 $ (9.3) $ (9.9) Total amount recognized in Consolidated Balance Sheets, all in Other liabilities $ (2.4) $ (2.3) $ (1.7) $ (14.5) $ (15.7) $ (15.2) Amounts recognized in accumulated other comprehensive income (loss) (AOCI): Prior service cost $ — $ — $ — $ — $ — $ — Net actuarial loss (7.3) (7.8) (8.3) (6.5) (6.4) (5.3) Total amount recognized in AOCI $ (7.3) $ (7.8) $ (8.3) $ (6.5) $ (6.4) $ (5.3) Information for pension plans with an accumulated benefit obligation greater than plan assets: Projected benefit obligation $ 22.2 $ 24.3 $ 24.8 $ 14.5 $ 15.7 $ 15.2 Accumulated benefit obligation 22.2 24.3 24.8 14.5 15.7 15.2 Fair value of plan assets 19.8 22.0 23.2 — — — |
Defined benefit plan and the supplemental defined benefit plans | ($ in millions) Defined Benefit Plan Supplemental Year Ended December 31, Year Ended December 31, 2021 2020 2019 2021 2020 2019 Components of net periodic pension (income) expense: Service cost: Benefit accrual $ — $ — $ — $ — $ — $ — Other expenses 0.6 0.7 0.7 — — — Interest cost 0.5 0.7 1.0 0.3 0.5 0.6 Expected return on plan assets (0.9) (1.0) (1.3) — — — Settlement loss — 0.5 — — — — Amortization of: Prior service cost — — — — — — Actuarial loss 0.4 0.3 0.3 0.4 0.3 0.3 Net periodic pension expense $ 0.6 $ 1.2 $ 0.7 $ 0.7 $ 0.8 $ 0.9 Changes in plan assets and benefit obligations included in other comprehensive income (loss): Prior service cost $ — $ — $ — $ — $ — $ — Net actuarial loss (gain) (0.2) 0.3 (1.8) (0.2) 1.3 0.5 Amortization of: Prior service cost — — — — — — Actuarial loss (0.4) (0.8) (0.3) (0.4) (0.3) (0.2) Total recognized in other $ (0.6) $ (0.5) $ (2.1) $ (0.6) $ 1.0 $ 0.3 Weighted average assumptions used to determine expense: Discount rate 2.08 % 3.10 % 4.20 % 2.08 % 3.10 % 4.20 % Expected return on plan assets 4.74 % 4.80 % 5.75 % * * * Annual rate of salary increase * * * * * * Weighted average assumptions used to determine benefit obligations as of December 31: Discount rate 2.57 % 2.08 % 3.10 % 2.57 % 2.08 % 3.10 % Expected return on plan assets 4.74 % 4.80 % 5.75 % * * * Annual rate of salary increase * * * * * * * Not applicable. |
Fair value hierarchy for the Company's defined benefit pension plan assets | Fair values of the equity security funds and fixed income funds have been determined from public quotations. The following table presents the fair value hierarchy for the Company's defined benefit pension plan assets, excluding cash held. ($ in millions) Fair Value Measurements at Total Level 1 Level 2 Level 3 December 31, 2021 Asset category Equity security funds (1) United States $ 3.8 $ — $ 3.8 $ — International 3.3 — 3.3 — Fixed income funds 12.4 — 12.4 — Short-term investment funds 0.3 0.3 — — Total $ 19.8 $ 0.3 $ 19.5 $ — December 31, 2020 Asset category Equity security funds (1) United States $ 4.4 $ — $ 4.3 $ — International 4.3 — 4.3 — Fixed income funds 13.1 — 13.1 — Short-term investments funds 0.2 0.2 — — Total $ 22.0 $ 0.2 $ 21.7 $ — (1) None of the trust fund assets for the defined benefit pension plan have been invested in shares of HMEC's common stock. |
Summary of minimum funding requirement and the expected full year contributions for the Company's plans | The following table discloses that minimum funding requirement and the expected full year contributions for the Company's plans. ($ in millions) Defined Benefit Pension Plans Defined Supplemental Minimum funding requirement for 2021 $ — $ — Expected contributions (approximations) for the year ended December 31, 2022 at the time of issuance of this Form 10-K (1) $ — $ 1.3 (1) HMEC's Annual Report on Form 10-K for the year ended December 31, 2021. |
Estimated future benefit payments | Estimated future benefit payments as of December 31, 2021 were as follows: ($ in millions) 2022 2023 2024 2025 2026 2027-2031 Pension plans Defined benefit plan $ 2.3 $ 2.1 $ 2.1 $ 2.0 $ 1.8 $ 6.8 Supplemental retirement plans 1.3 1.3 1.2 1.2 1.2 5.1 |
Comprehensive Income (Loss) a_2
Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Components of comprehensive income | The components of comprehensive income (loss) were as follows: ($ in millions) Year Ended December 31, 2021 2020 2019 Net income $ 142.8 $ 133.3 $ 184.4 Other comprehensive income (loss): Change in net unrealized investment gains (losses) on fixed maturity securities: Net unrealized investment gains (losses) on securities arising during the period (104.9) 184.0 327.3 Less: reclassification adjustment for net investment gains (losses) included in income before income tax (8.5) 11.2 157.4 Total, before tax (96.4) 172.8 169.9 Income tax expense (benefit) (20.8) 36.9 36.4 Total, net of tax (75.6) 135.9 133.5 Change in net funded status of benefit plans: Before tax 1.2 (0.5) 1.8 Income tax expense (benefit) 0.2 (0.1) 0.4 Total, net of tax 1.0 (0.4) 1.4 Total comprehensive income $ 68.2 $ 268.8 $ 319.3 |
Accumulated other comprehensive income (loss) | The following table reconciles the components of AOCI for the periods indicated. ($ in millions) Net Unrealized Investment Gains (Losses) on Securities (1)(2) Net Funded Status of Benefit Plans (1) Total (1) Beginning balance, January 1, 2021 $ 366.3 $ (11.2) $ 355.1 Other comprehensive income (loss) before reclassifications (82.3) 1.0 (81.3) Amounts reclassified from AOCI 6.7 — 6.7 Net current period other comprehensive income (loss) (75.6) 1.0 (74.6) Ending balance, December 31, 2021 $ 290.7 $ (10.2) $ 280.5 Beginning balance, January 1, 2020 $ 230.4 $ (10.8) $ 219.6 Other comprehensive income (loss) before reclassifications 144.7 (0.4) 144.3 Amounts reclassified from AOCI (8.8) — (8.8) Net current period other comprehensive income (loss) 135.9 (0.4) 135.5 Ending balance, December 31, 2020 $ 366.3 $ (11.2) $ 355.1 Beginning balance, January 1, 2019 $ 96.9 $ (12.2) $ 84.7 Other comprehensive income (loss) before reclassifications 257.9 1.4 259.3 Amounts reclassified from AOCI (124.4) — (124.4) Net current period other comprehensive income (loss) 133.5 1.4 134.9 Ending balance, December 31, 2019 $ 230.4 $ (10.8) $ 219.6 (1) All amounts are net of tax. (2) The pretax amounts reclassified from AOCI, $(8.5) million, $11.2 million and $157.4 million, are included in net investment gains (losses) and the related tax expenses, $(1.8) million, $2.4 million and $33.0 million, are included in income tax expense in the Consolidated Statements of Operations for the years ended December 31, 2021, 2020 and 2019, respectively. |
Supplemental Consolidated Cas_2
Supplemental Consolidated Cash and Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Supplemental Cash Flow Elements [Abstract] | |
Reconciliation of net income to net cash provided by operating activities | Supplemental cash flow information related to operating leases was as follows: ($ in millions) Years Ended December 31, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities $ 4.3 $ 4.5 ($ in millions) Years Ended December 31, 2021 2020 2019 Cash $ 133.0 $ 21.8 $ 25.2 Restricted cash 0.7 0.5 0.3 Total cash and restricted cash shown in the Consolidated Statements of Cash Flows $ 133.7 $ 22.3 $ 25.5 Cash paid during the year for: Interest $ 13.5 $ 15.5 $ 14.1 Income taxes 23.7 17.3 22.9 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Summarized financial information for these segments | Summarized financial information for these segments is as follows: ($ in millions) Years Ended December 31, 2021 2020 2019 Premiums and contract charges earned Property & Casualty $ 617.4 $ 650.1 $ 683.5 Supplemental (1) 125.3 130.7 65.8 Retirement 38.5 29.7 29.1 Life 108.4 120.2 119.6 Total $ 889.6 $ 930.7 $ 898.0 Net investment income Property & Casualty $ 61.1 $ 42.6 $ 41.7 Supplemental (1) 24.8 17.8 7.5 Retirement 255.9 229.8 245.5 Life 83.1 69.8 72.0 Corporate & Other (0.1) (0.2) (0.1) Intersegment eliminations (2.3) (2.2) (1.5) Total $ 422.5 $ 357.6 $ 365.1 Net income (loss) Property & Casualty $ 57.0 $ 76.5 $ 54.3 Supplemental (1) 46.3 43.1 18.0 Retirement 52.0 20.1 (4.8) Life 16.1 10.4 17.6 Corporate & Other (28.6) (16.8) 99.3 Total $ 142.8 $ 133.3 $ 184.4 |
Additional significant financial information for these segments | ($ in millions) December 31, 2021 2020 2019 Assets Property & Casualty $ 1,243.4 $ 1,324.9 $ 1,327.1 Supplemental 854.9 811.5 747.6 Retirement 9,939.1 9,198.7 8,330.1 Life 2,129.5 2,044.5 1,965.0 Corporate & Other 281.8 182.3 173.0 Intersegment eliminations (64.8) (90.1) (64.1) Total $ 14,383.9 $ 13,471.8 $ 12,478.7 (1) Acquired on July 1, 2019. The twelve month comparison is not meaningful. Additional significant financial information for these segments is as follows: ($ in millions) Years Ended December 31, 2021 2020 2019 DAC amortization expense Property & Casualty $ 67.7 $ 74.4 $ 79.5 Supplemental (1) 1.2 1.3 0.4 Retirement 18.5 16.7 21.5 Life 7.3 7.5 7.8 Total $ 94.7 $ 99.9 $ 109.2 Income tax expense (benefit) Property & Casualty $ 13.2 $ 15.4 $ 14.0 Supplemental (1) 12.7 12.0 5.1 Retirement 9.9 2.1 33.8 Life 3.6 2.4 4.9 Corporate & Other (7.3) (5.6) (5.8) Total $ 32.1 $ 26.3 $ 52.0 (1) Acquired on July 1, 2019. The twelve month comparison is not meaningful. |
Basis of Presentation and Sig_4
Basis of Presentation and Significant Accounting Policies - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Oct. 01, 2020 | Oct. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Collaborative Arrangement and Arrangement Other than Collaborative | ||||||
Amortization of acquisition costs for property and casualty contracts, first term | 6 months | |||||
Amortization of acquisition costs for property and casualty contracts, second term | 12 months | |||||
Amortization of acquisition costs for supplemental policies | 7 years | |||||
Amortization term for acquisition costs of annuity contracts | 20 years | |||||
Amortization period of acquisition costs of interest sensitive life contracts | 20 years | |||||
Amortization term for acquisition costs of indexed universal life contracts | 30 years | |||||
Amortization of acquisition costs for individual life contracts, first term | 10 years | |||||
Amortization of acquisition costs for individual life contracts, second term | 15 years | |||||
Amortization of acquisition costs for individual life contracts, third term | 20 years | |||||
Amortization of acquisition costs for individual life contracts, fourth term | 30 years | |||||
Percentage of reversion to mean approach utilized to amortized policy acquisition costs | 8.00% | |||||
Deferred policy acquisition costs, corridor around the mean | 2.00% | |||||
Amortization in 2022 | $ 12.1 | |||||
Amortization in 2023 | 11.2 | |||||
Amortization in 2024 | 10.5 | |||||
Amortization in 2025 | 9.8 | |||||
Amortization in 2026 | 9.2 | |||||
Finite lived intangible asset | 134.6 | |||||
Goodwill impairment | $ 0 | |||||
Purchase of FHLB activity-based common stock as percentage of borrowing, required | 4.50% | |||||
Principal Repayment On Federal Home Loan Bank Funding Agreements | $ 362 | $ 0 | $ 305 | |||
FHLB advances | $ 782.5 | |||||
Weighted average fair value of nonvested options outstanding (in usd per share) | $ 6.80 | |||||
Unrecognized share-based compensation expense, nonvested options | $ 2 | |||||
Antidilutive securities exclude from EPS computation (in shares) | 734,018 | 734,018 | 734,018 | 734,018 | ||
Minimum exercise price (in usd per share) | $ 38.05 | $ 38.05 | $ 38.05 | $ 38.05 | ||
Maximum exercise price (in usd per share) | $ 42.95 | $ 42.95 | $ 42.95 | $ 42.95 | ||
Employee stock option | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative | ||||||
Share-based compensation expense | $ 1.2 | $ 1.1 | $ 1.2 | |||
Restricted stock units | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative | ||||||
Share-based compensation expense | 6.6 | 4.8 | 5.2 | |||
Unrecognized share-based compensation expense, equity instruments other than options | 6.6 | |||||
HMLIC and NTA | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative | ||||||
Proceeds from FHLB funding agreements | 554 | |||||
Principal Repayment On Federal Home Loan Bank Funding Agreements | $ 362 | |||||
HMIC | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative | ||||||
Purchase of FHLB activity-based common stock as percentage of borrowing, percentage, authorized | 15.00% | |||||
Minimum | HMIC | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative | ||||||
Purchase of FHLB activity-based common stock as percentage of borrowing, required | 2.00% | |||||
Real estate property | Minimum | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative | ||||||
Property, plant and equipment, useful life | 20 years | |||||
Real estate property | Maximum | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative | ||||||
Property, plant and equipment, useful life | 45 years | |||||
Lease hold improvements and other property and equipment | Minimum | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative | ||||||
Property, plant and equipment, useful life | 3 years | |||||
Lease hold improvements and other property and equipment | Maximum | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative | ||||||
Property, plant and equipment, useful life | 10 years | |||||
BCG | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative | ||||||
Impairment charges of intangible assets | $ 4.4 | |||||
Goodwill impairment | $ 5.6 | $ 5.6 | ||||
Value of business acquired | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative | ||||||
Consideration to acquire business | $ 76.9 | |||||
Amortization in 2022 | 6.2 | |||||
Amortization in 2023 | 5.8 | |||||
Amortization in 2024 | 5.4 | |||||
Amortization in 2025 | 5.1 | |||||
Amortization in 2026 | 4.7 | |||||
Value of distribution acquired | NTA | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative | ||||||
Amortization in 2022 | 2.9 | |||||
Amortization in 2023 | 2.9 | |||||
Amortization in 2024 | 2.9 | |||||
Amortization in 2025 | 2.9 | |||||
Amortization in 2026 | 2.9 | |||||
Finite lived intangible asset | 41.8 | |||||
Value of distribution acquired | BCG | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative | ||||||
Amortization in 2022 | 0.3 | |||||
Amortization in 2023 | 0.3 | |||||
Amortization in 2024 | 0.3 | |||||
Amortization in 2025 | 0.3 | |||||
Amortization in 2026 | 0.3 | |||||
Finite lived intangible asset | 0.6 | |||||
Value of agency relationships | NTA | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative | ||||||
Amortization in 2022 | 1.9 | |||||
Amortization in 2023 | 1.6 | |||||
Amortization in 2024 | 1.4 | |||||
Amortization in 2025 | 1.2 | |||||
Amortization in 2026 | 1 | |||||
Value of agency relationship | 10.7 | |||||
Value of customer relationships | BCG | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative | ||||||
Amortization in 2022 | 1.1 | |||||
Amortization in 2023 | 0.9 | |||||
Amortization in 2024 | 0.7 | |||||
Amortization in 2025 | 0.6 | |||||
Amortization in 2026 | 0.5 | |||||
Value of customer relationship | 4.6 | |||||
Interest sensitive life contracts | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative | ||||||
Deferred policy acquisition costs, impact of unrealized investment gains (losses) | $ 71.9 | $ 90.5 | $ 41.2 |
Basis of Presentation and Sig_5
Basis of Presentation and Significant Accounting Policies - Deferred Policy Acquisition Costs (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Segment Reporting Information | ||
Deferred policy acquisition costs | $ 248 | $ 229.8 |
Property & Casualty | ||
Segment Reporting Information | ||
Deferred policy acquisition costs | 24.4 | 26.1 |
Supplemental | ||
Segment Reporting Information | ||
Deferred policy acquisition costs | 4.2 | 4.3 |
Retirement | ||
Segment Reporting Information | ||
Deferred policy acquisition costs | 153.8 | 137.7 |
Life | ||
Segment Reporting Information | ||
Deferred policy acquisition costs | $ 65.6 | $ 61.7 |
Basis of Presentation and Sig_6
Basis of Presentation and Significant Accounting Policies - Adjustments to Amortization Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
(Decrease) increase to DAC amortization expense: | |||
Total | $ (1.5) | $ (2.1) | $ 3.2 |
Retirement | |||
(Decrease) increase to DAC amortization expense: | |||
Total | (1.3) | (1.8) | 3.5 |
Life | |||
(Decrease) increase to DAC amortization expense: | |||
Total | $ (0.2) | $ (0.3) | $ (0.3) |
Basis of Presentation and Sig_7
Basis of Presentation and Significant Accounting Policies - Property and Equipment Included in Other Assets (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Property and Equipment | ||
Property and equipment | $ 136.4 | $ 131.3 |
Less: accumulated depreciation | 70.4 | 66.6 |
Total | $ 66 | $ 64.7 |
Basis of Presentation and Sig_8
Basis of Presentation and Significant Accounting Policies - Investment Contract and Life Policy Reserves (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Investment contract reserves | $ 4,941.3 | $ 4,847.6 |
Policy reserves | 1,636.5 | 1,597.7 |
Total | $ 6,577.8 | $ 6,445.3 |
Basis of Presentation and Sig_9
Basis of Presentation and Significant Accounting Policies - Guaranteed Minimum Death Benefit (Details) - Guarantee Minimum Death Benefit - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Net Amount at Risk by Product and Guarantee | ||
GMDB reserve | $ 0.1 | $ 0.1 |
Aggregate in-the-money death benefits under the GMDB provision | $ 22.3 | $ 26.7 |
Variable annuity contract value distribution based on GMDB feature: | ||
No guarantee | 24.00% | 26.00% |
Return of premium guarantee | 71.00% | 69.00% |
Guarantee of premium roll-up at an annual rate of 3% or 5% | 5.00% | 5.00% |
Total | 100.00% | 100.00% |
Minimum | ||
Variable annuity contract value distribution based on GMDB feature: | ||
Guarantee of premium roll-up at an annual rate of 3% or 5% | 3.00% | |
Maximum | ||
Variable annuity contract value distribution based on GMDB feature: | ||
Guarantee of premium roll-up at an annual rate of 3% or 5% | 5.00% |
Basis of Presentation and Si_10
Basis of Presentation and Significant Accounting Policies - Schedule of Maturity Dates For FHLB Funding Agreements (Details) $ in Millions | Dec. 31, 2021USD ($) |
Collaborative Arrangement and Arrangement Other than Collaborative | |
FHLB advances | $ 782.5 |
Maturing On May 16,2022 | |
Collaborative Arrangement and Arrangement Other than Collaborative | |
FHLB advances | $ 10 |
FHLB interest rate | 0.00% |
Maturing On January 13 2023 | |
Collaborative Arrangement and Arrangement Other than Collaborative | |
FHLB advances | $ 60 |
FHLB interest rate | 0.489% |
Maturing On February 10 2023 | |
Collaborative Arrangement and Arrangement Other than Collaborative | |
FHLB advances | $ 25 |
FHLB interest rate | 0.427% |
Maturing On November 15 2023 | |
Collaborative Arrangement and Arrangement Other than Collaborative | |
FHLB advances | $ 20 |
FHLB interest rate | 0.446% |
Maturing On December 15, 2023 | |
Collaborative Arrangement and Arrangement Other than Collaborative | |
FHLB advances | $ 100 |
FHLB interest rate | 0.249% |
Maturing On January 12, 2024 | |
Collaborative Arrangement and Arrangement Other than Collaborative | |
FHLB advances | $ 50 |
FHLB interest rate | 0.449% |
Maturing On April 03 2024 | |
Collaborative Arrangement and Arrangement Other than Collaborative | |
FHLB advances | $ 25 |
FHLB interest rate | 0.374% |
Maturing On May 22 2024 | |
Collaborative Arrangement and Arrangement Other than Collaborative | |
FHLB advances | $ 10 |
FHLB interest rate | 0.393% |
Maturing On May 22 2024 | |
Collaborative Arrangement and Arrangement Other than Collaborative | |
FHLB advances | $ 50 |
FHLB interest rate | 0.393% |
Maturing On February 14 2025 | |
Collaborative Arrangement and Arrangement Other than Collaborative | |
FHLB advances | $ 10 |
FHLB interest rate | 0.53% |
Maturing On February 28 2025 | |
Collaborative Arrangement and Arrangement Other than Collaborative | |
FHLB advances | $ 10 |
FHLB interest rate | 0.448% |
Maturing On February 28 2025 | |
Collaborative Arrangement and Arrangement Other than Collaborative | |
FHLB advances | $ 50 |
FHLB interest rate | 0.448% |
Maturing On June 26 2025 | |
Collaborative Arrangement and Arrangement Other than Collaborative | |
FHLB advances | $ 12.5 |
FHLB interest rate | 0.67% |
Maturing On September 11 2025 | |
Collaborative Arrangement and Arrangement Other than Collaborative | |
FHLB advances | $ 125 |
FHLB interest rate | 0.57% |
Maturing On January 16, 2026 | |
Collaborative Arrangement and Arrangement Other than Collaborative | |
FHLB advances | $ 200 |
FHLB interest rate | 0.225% |
Maturing On September 09,2026 | |
Collaborative Arrangement and Arrangement Other than Collaborative | |
FHLB advances | $ 25 |
FHLB interest rate | 0.298% |
Basis of Presentation and Si_11
Basis of Presentation and Significant Accounting Policies - Fair Value Assumptions for Stock Option Pricing (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Number of stock options granted (in shares) | 183,272 | 234,248 | 282,040 |
Weighted average grant date fair value of stock options granted (in usd per share) | $ 7.73 | $ 6.02 | $ 6.26 |
Weighted average assumptions: | |||
Risk-free interest rate | 0.80% | 0.80% | 2.50% |
Expected dividend yield | 3.00% | 2.70% | 2.90% |
Expected life, in years | 5 years 1 month 6 days | 5 years 1 month 6 days | 5 years |
Expected volatility (based on historical volatility) | 30.10% | 22.80% | 21.90% |
Basis of Presentation and Si_12
Basis of Presentation and Significant Accounting Policies - Calculation of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Basic: | |||
Net income for the period | $ 142.8 | $ 133.3 | $ 184.4 |
Weighted average number of common shares during the period (in shares) | 42 | 41.9 | 41.7 |
Net income per share - basic (in usd per share) | $ 3.40 | $ 3.18 | $ 4.42 |
Diluted: | |||
Net income for the period | $ 142.8 | $ 133.3 | $ 184.4 |
Weighted average number of common shares during the period (in shares) | 42 | 41.9 | 41.7 |
Weighted average number of common equivalent shares to reflect the dilutive effect of common stock equivalent securities (in millions): | |||
Stock options (in shares) | 0 | 0 | 0.1 |
CSUs related to deferred compensation for employees (in shares) | 0 | 0 | 0 |
RSUs related to incentive compensation (in shares) | 0.2 | 0.1 | 0.1 |
Total common and common equivalent shares adjusted to calculate diluted earnings per share (in shares) | 42.2 | 42 | 41.9 |
Net income per share - diluted (in usd per share) | $ 3.39 | $ 3.17 | $ 4.40 |
Subsequent Events (Details)
Subsequent Events (Details) - Madison National - Subsequent Event | Jan. 03, 2022USD ($) |
Business Acquisition | |
Consideration to acquire business | $ 172,500,000 |
Business acquisition, contingent consideration, liability (up to) | $ 12,500,000 |
Investments - Net Investment In
Investments - Net Investment Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Net Investment Income | |||
Total net investment income | $ 422.5 | $ 357.6 | $ 365.1 |
Investment Portfolio | |||
Net Investment Income | |||
Investment expenses | (10.1) | (9.6) | (9.4) |
Total net investment income | 321.4 | 260.3 | 294.3 |
Deposit Asset On Reinsurance | |||
Net Investment Income | |||
Total net investment income | 101.1 | 97.3 | 70.8 |
Fixed maturity securities | Investment Portfolio | |||
Net Investment Income | |||
Investment income | 235.6 | 232.9 | 283.2 |
Equity securities | Investment Portfolio | |||
Net Investment Income | |||
Investment income | 5.3 | 4.7 | 4.9 |
Limited partnership interests | Investment Portfolio | |||
Net Investment Income | |||
Investment income | 79 | 20.9 | 25.7 |
Short-term and other investments | Investment Portfolio | |||
Net Investment Income | |||
Investment income | $ 11.6 | $ 11.4 | $ (10.1) |
Investments - Realized Investme
Investments - Realized Investment Gains (Losses) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | |
Gain (Loss) on Securities | |||||
Net investment gains (losses) | $ (11) | $ (2.3) | $ 153.3 | ||
Investment gain realized on transfer | $ 135.3 | ||||
Reinsurance block of in-force fixed and variable annuity business | 3,200 | 2,900 | $ 2,900 | ||
Fixed maturity securities | |||||
Gain (Loss) on Securities | |||||
Net investment gains (losses) | (7.7) | 9.4 | 141.4 | ||
Equity securities | |||||
Gain (Loss) on Securities | |||||
Net investment gains (losses) | (0.8) | 1.8 | 16 | ||
Short-term and other investments | |||||
Gain (Loss) on Securities | |||||
Net investment gains (losses) | $ (2.5) | $ (13.5) | $ (4.1) |
Investments - Net Investment Ga
Investments - Net Investment Gains (Losses) By Transaction Type (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |||
Credit loss impairments | $ (8.1) | $ 0 | $ (1.1) |
Intent-to-sell impairments | (2.3) | (5.3) | (0.3) |
Total impairments on investments recognized in net income | (10.4) | (5.3) | (1.4) |
Sales and other, net | 4.3 | 15 | 151.5 |
Change in fair value - equity securities | (2.3) | (0.2) | 7.3 |
Change in fair value and losses realized on settlements - derivatives | (2.6) | (11.8) | (4.1) |
Net investment (losses) gains | $ (11) | $ (2.3) | $ 153.3 |
Investment - Allowance for Cred
Investment - Allowance for Credit Loss Impairments on Fixed Maturity Securities (Details) - Fixed maturity securities - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Securities, Available-for-sale, Allowance for Credit Loss | |||
Beginning balance | $ 7.7 | $ 0 | $ 0 |
Credit losses on fixed maturity securities for which credit losses were not previously reported(1) | 8.1 | 0 | |
Net (increases) decreases related to credit losses previously reported | 0 | 0 | |
Reduction of credit allowances related to sales | 0 | 0 | |
Write-offs | (0.4) | 0 | |
Ending balance | $ 7.7 | $ 0 |
Investments - Fixed Maturities
Investments - Fixed Maturities and Equity Securities (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale | ||
Amortized Cost, net | $ 5,797.7 | $ 5,788.6 |
Fair Value | 6,239.3 | 6,345.3 |
FNMA | ||
Debt Securities, Available-for-sale | ||
Fair Value | 376.7 | 387.1 |
FHLMC | ||
Debt Securities, Available-for-sale | ||
Fair Value | 326.5 | 344.3 |
GNMA | ||
Debt Securities, Available-for-sale | ||
Fair Value | 112.1 | 132.3 |
Fixed maturity securities | ||
Debt Securities, Available-for-sale | ||
Amortized Cost, net | 5,797.7 | 5,788.6 |
Gross Unrealized Gains | 460.2 | 585.1 |
Gross Unrealized Losses | 18.6 | 28.4 |
Fair Value | 6,239.3 | 6,345.3 |
Mortgage-backed securities | ||
Debt Securities, Available-for-sale | ||
Amortized Cost, net | 612.1 | 605.5 |
Gross Unrealized Gains | 51.9 | 79.6 |
Gross Unrealized Losses | 1.5 | 0.3 |
Fair Value | 662.5 | 684.8 |
Other, including U.S. Treasury securities | ||
Debt Securities, Available-for-sale | ||
Amortized Cost, net | 342.5 | 395 |
Gross Unrealized Gains | 27.7 | 39.2 |
Gross Unrealized Losses | 4.3 | 1 |
Fair Value | 365.9 | 433.2 |
Municipal bonds | ||
Debt Securities, Available-for-sale | ||
Amortized Cost, net | 1,519.7 | 1,612.3 |
Gross Unrealized Gains | 184.4 | 215.7 |
Gross Unrealized Losses | 0.7 | 0.5 |
Fair Value | 1,703.4 | 1,827.5 |
Foreign government bonds | ||
Debt Securities, Available-for-sale | ||
Amortized Cost, net | 40.2 | 40.2 |
Gross Unrealized Gains | 3.4 | 4.9 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 43.6 | 45.1 |
Corporate bonds | ||
Debt Securities, Available-for-sale | ||
Amortized Cost, net | 2,217.7 | 1,905.2 |
Gross Unrealized Gains | 176.2 | 221.6 |
Gross Unrealized Losses | 5.2 | 3.9 |
Fair Value | 2,388.7 | 2,122.9 |
Other asset-backed securities | ||
Debt Securities, Available-for-sale | ||
Amortized Cost, net | 1,065.5 | 1,230.4 |
Gross Unrealized Gains | 16.6 | 24.1 |
Gross Unrealized Losses | 6.9 | 22.7 |
Fair Value | $ 1,075.2 | $ 1,231.8 |
Investments - Gross Unrealized
Investments - Gross Unrealized Losses of Fixed Maturities and Equity Securities in Unrealized Loss Position (Details) $ in Millions | Dec. 31, 2021USD ($)security | Dec. 31, 2020USD ($)security |
Fixed maturity securities, Gross Unrealized Losses | ||
Number of positions with a gross unrealized loss, 12 Months or Less | security | 516 | 308 |
Number of position with a gross unrealized loss, more than 12 months | security | 122 | 123 |
Number of position with a gross unrealized loss, Total | security | 638 | 431 |
Fair value as a percentage of total fixed maturities and equity securities fair value, 12 Months or Less | 12.60% | 8.90% |
Fair value as a percentage of total fixed maturities and equity securities fair value, more than 12 months | 3.40% | 6.70% |
Fair value as a percentage of total fixed maturities and equity securities fair value, Total | 16.00% | 15.60% |
Total | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | $ 783.4 | $ 562.4 |
Fixed maturity securities, Fair Value, More than 12 Months | 211.9 | 422.8 |
Fixed maturity securities, Fair Value, Total | 995.3 | 985.2 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 11.3 | 22.5 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 7.3 | 5.9 |
Fixed maturity securities, Gross Unrealized Losses, Total | 18.6 | 28.4 |
Mortgage-backed securities | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | 67.4 | 4.9 |
Fixed maturity securities, Fair Value, More than 12 Months | 3.9 | 2.6 |
Fixed maturity securities, Fair Value, Total | 71.3 | 7.5 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 1.3 | 0.1 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 0.2 | 0.2 |
Fixed maturity securities, Gross Unrealized Losses, Total | 1.5 | 0.3 |
Other | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | 59.5 | 95.9 |
Fixed maturity securities, Fair Value, More than 12 Months | 35.1 | 0 |
Fixed maturity securities, Fair Value, Total | 94.6 | 95.9 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 1.7 | 1 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 2.6 | 0 |
Fixed maturity securities, Gross Unrealized Losses, Total | 4.3 | 1 |
Municipal bonds | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | 56.8 | 18.1 |
Fixed maturity securities, Fair Value, More than 12 Months | 0.6 | 0 |
Fixed maturity securities, Fair Value, Total | 57.4 | 18.1 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 0.7 | 0.5 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 0 | 0 |
Fixed maturity securities, Gross Unrealized Losses, Total | 0.7 | 0.5 |
Foreign government bonds | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | 0 | 0 |
Fixed maturity securities, Fair Value, More than 12 Months | 0 | 0 |
Fixed maturity securities, Fair Value, Total | 0 | 0 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 0 | 0 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 0 | 0 |
Fixed maturity securities, Gross Unrealized Losses, Total | 0 | 0 |
Corporate bonds | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | 220.7 | 126.6 |
Fixed maturity securities, Fair Value, More than 12 Months | 44.1 | 10.9 |
Fixed maturity securities, Fair Value, Total | 264.8 | 137.5 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 3.8 | 3.7 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 1.4 | 0.2 |
Fixed maturity securities, Gross Unrealized Losses, Total | 5.2 | 3.9 |
Other asset-backed securities | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | 379 | 316.9 |
Fixed maturity securities, Fair Value, More than 12 Months | 128.2 | 409.3 |
Fixed maturity securities, Fair Value, Total | 507.2 | 726.2 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 3.8 | 17.2 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 3.1 | 5.5 |
Fixed maturity securities, Gross Unrealized Losses, Total | $ 6.9 | $ 22.7 |
Investments - Maturities of Fix
Investments - Maturities of Fixed Maturities (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Amortized Cost, net | ||
Due in 1 year or less | $ 245.4 | |
Due after 1 year through 5 years | 1,613.8 | |
Due after 5 years through 10 years | 1,600.5 | |
Due after 10 years through 20 years | 1,339.9 | |
Due after 20 years | 998.1 | |
Amortized Cost, net | 5,797.7 | $ 5,788.6 |
Fair Value | ||
Due in 1 year or less | 250.8 | |
Due after 1 year through 5 years | 1,686.2 | |
Due after 5 years through 10 years | 1,729.5 | |
Due after 10 years through 20 years | 1,488.2 | |
Due after 20 years | 1,084.6 | |
Total | $ 6,239.3 | $ 6,345.3 |
Percent of Total Fair Value | ||
Due in 1 year or less | 4.00% | |
Due after 1 year through 5 years | 27.00% | |
Due after 5 years through 10 years | 27.70% | |
Due after 10 years through 20 years | 23.90% | |
Due after 20 years | 17.40% | |
Total | 100.00% | |
Average option-adjusted duration, in years | 6 years 8 months 12 days |
Investments - Sales of Fixed Ma
Investments - Sales of Fixed Maturities and Equity Securities (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | |
Fixed maturity securities | |||||
Proceeds received | $ 578.2 | $ 472.9 | $ 805.9 | ||
Gross gains realized | 10.5 | 20.5 | 150.9 | ||
Gross losses realized | (7.7) | (6.1) | (7.8) | ||
Equity securities | |||||
Proceeds received | 4.7 | 12.7 | 29.9 | ||
Gross gains realized | 1.5 | 2.2 | 9.2 | ||
Gross losses realized | (0.1) | $ (1.9) | (0.8) | ||
Investment gain realized on transfer | $ 135.3 | ||||
Reinsurance block of in-force fixed and variable annuity business | $ 3,200 | $ 2,900 | $ 2,900 |
Investments - Net Unrealized In
Investments - Net Unrealized Investment Gains and Losses on Fixed Maturities and Equity Securities (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
AOCI Attributable to Parent, Net of Tax | |||
Beginning balance | $ 1,790.1 | $ 1,567.3 | |
Ending balance | 1,807.4 | 1,790.1 | $ 1,567.3 |
Net unrealized investment gains (losses) on securities | |||
AOCI Attributable to Parent, Net of Tax | |||
Beginning balance | 366.3 | 230.4 | 96.9 |
Ending balance | 290.7 | 366.3 | 230.4 |
Net unrealized investment gains (losses) on securities | Fixed maturity securities | |||
AOCI Attributable to Parent, Net of Tax | |||
Beginning balance | 439.8 | 264.4 | 111.7 |
Change in net unrealized investment (losses) gains on fixed maturity securities | (97.6) | 184.2 | 277.1 |
Reclassification of net investment losses (gains) on fixed maturity securities to net income | 6.7 | (8.8) | (124.4) |
Ending balance | $ 348.9 | $ 439.8 | $ 264.4 |
Investments- Carrying Amounts O
Investments- Carrying Amounts Of Equity Method Limited Partnership Interest (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Net Investment Income | ||
Limited partnership interests | $ 712.8 | $ 449 |
Commercial mortgage loan funds | ||
Net Investment Income | ||
Limited partnership interests | 346.8 | 149.6 |
Private equity funds | ||
Net Investment Income | ||
Limited partnership interests | 74 | 39.6 |
Infrastructure debt funds | ||
Net Investment Income | ||
Limited partnership interests | 62.4 | 58.3 |
Infrastructure equity funds | ||
Net Investment Income | ||
Limited partnership interests | 58.3 | 52.1 |
Other funds | ||
Net Investment Income | ||
Limited partnership interests | $ 171.3 | $ 149.4 |
Investments - Narrative (Detail
Investments - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Investment Holdings [Line Items] | ||
Investment grade rating | 69.80% | |
Fair value of issued securities | $ 6,239.3 | $ 6,345.3 |
FHLB funding agreements | 787.5 | 644.5 |
FHLB of Chicago | ||
Investment Holdings [Line Items] | ||
Fair value of issued securities | 870.1 | 707.3 |
Governmental agencies as required by law in various states | ||
Investment Holdings [Line Items] | ||
Fair value of issued securities | $ 26.2 | $ 26.9 |
Investments - Offsetting of Ass
Investments - Offsetting of Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Asset derivatives | ||
Net Amounts of Assets/ Liabilities Presented in the Consolidated Balance Sheets | $ 10.7 | $ 16.8 |
Free-standing derivatives | ||
Asset derivatives | ||
Gross Amounts | 10.7 | 16.8 |
Gross Amounts Offset in the Consolidated Balance Sheets | 0 | 0 |
Net Amounts of Assets/ Liabilities Presented in the Consolidated Balance Sheets | 10.7 | 16.8 |
Gross Amounts Not Offset in the Consolidated Balance Sheets, Financial Instruments | 4.5 | 13.7 |
Gross Amounts Not Offset in the Consolidated Balance Sheets, Cash Collateral Received | 6.4 | 2.6 |
Net Amount | $ (0.2) | $ 0.5 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Narrative (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2021USD ($)security | Dec. 31, 2020USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Percentage of investment portfolio fair value pricing services or index price | 90.20% | 91.90% |
Percentage of invested assets in total investment portfolio Level 3 recurring | 5.60% | |
Net investment losses included in net income related to financial assets | $ | $ (8.1) | $ (0.3) |
Net investment (gains) losses included in net income related to financial liabilities | $ | $ 10 | $ 11.5 |
Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Number of hard-to-value fixed maturity securities | security | 150 | |
Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Number of hard-to-value fixed maturity securities | security | 200 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Financial Instruments Measured and Carried at Fair Value (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Financial Assets | ||
Fair value of issued securities | $ 6,239.3 | $ 6,345.3 |
Equity securities at fair value | 147.2 | 121.6 |
Mortgage-backed securities | ||
Financial Assets | ||
Fair value of issued securities | 662.5 | 684.8 |
Other, including U.S. Treasury securities | ||
Financial Assets | ||
Fair value of issued securities | 365.9 | 433.2 |
Municipal bonds | ||
Financial Assets | ||
Fair value of issued securities | 1,703.4 | 1,827.5 |
Foreign government bonds | ||
Financial Assets | ||
Fair value of issued securities | 43.6 | 45.1 |
Corporate bonds | ||
Financial Assets | ||
Fair value of issued securities | 2,388.7 | 2,122.9 |
Other asset-backed securities | ||
Financial Assets | ||
Fair value of issued securities | 1,075.2 | 1,231.8 |
Carrying Value | ||
Financial Assets | ||
Equity securities at fair value | 147.2 | 121.6 |
Short-term investments | 157.8 | 141.8 |
Other investments | 43.6 | 36.3 |
Totals | 6,587.9 | 6,645 |
Separate account (variable annuity) assets | 3,441 | 2,891.4 |
Financial Liabilities | ||
Investment contract and life policy reserves, embedded derivatives | 2.1 | 2.5 |
Other policyholder funds, embedded derivatives | 106.6 | 104.5 |
Carrying Value | Recurring | ||
Financial Assets | ||
Fair value of issued securities | 6,239.3 | 6,345.3 |
Carrying Value | Mortgage-backed securities | ||
Financial Assets | ||
Fair value of issued securities | 662.5 | 684.8 |
Carrying Value | Other, including U.S. Treasury securities | ||
Financial Assets | ||
Fair value of issued securities | 365.9 | 433.2 |
Carrying Value | Municipal bonds | ||
Financial Assets | ||
Fair value of issued securities | 1,703.4 | 1,827.5 |
Carrying Value | Foreign government bonds | ||
Financial Assets | ||
Fair value of issued securities | 43.6 | 45.1 |
Carrying Value | Corporate bonds | ||
Financial Assets | ||
Fair value of issued securities | 2,388.7 | 2,122.9 |
Carrying Value | Other asset-backed securities | ||
Financial Assets | ||
Fair value of issued securities | 1,075.2 | 1,231.8 |
Fair Value | ||
Financial Assets | ||
Equity securities at fair value | 147.2 | 121.6 |
Short-term investments | 157.8 | 141.8 |
Other investments | 43.6 | 36.3 |
Totals | 6,587.9 | 6,645 |
Separate account (variable annuity) assets | 3,441 | 2,891.4 |
Financial Liabilities | ||
Investment contract and life policy reserves, embedded derivatives | 2.1 | 2.5 |
Other policyholder funds, embedded derivatives | 106.6 | 104.5 |
Fair Value | Recurring | ||
Financial Assets | ||
Fair value of issued securities | 6,239.3 | 6,345.3 |
Fair Value | Mortgage-backed securities | ||
Financial Assets | ||
Fair value of issued securities | 662.5 | 684.8 |
Fair Value | Other, including U.S. Treasury securities | ||
Financial Assets | ||
Fair value of issued securities | 365.9 | 433.2 |
Fair Value | Municipal bonds | ||
Financial Assets | ||
Fair value of issued securities | 1,703.4 | 1,827.5 |
Fair Value | Foreign government bonds | ||
Financial Assets | ||
Fair value of issued securities | 43.6 | 45.1 |
Fair Value | Corporate bonds | ||
Financial Assets | ||
Fair value of issued securities | 2,388.7 | 2,122.9 |
Fair Value | Other asset-backed securities | ||
Financial Assets | ||
Fair value of issued securities | 1,075.2 | 1,231.8 |
Fair Value | Level 1 | ||
Financial Assets | ||
Equity securities at fair value | 35.2 | 39.2 |
Short-term investments | 157.8 | 137.7 |
Other investments | 0 | 0 |
Totals | 225.6 | 210.2 |
Separate account (variable annuity) assets | 3,441 | 2,891.4 |
Financial Liabilities | ||
Investment contract and life policy reserves, embedded derivatives | 0 | 0 |
Other policyholder funds, embedded derivatives | 0 | 0 |
Fair Value | Level 1 | Recurring | ||
Financial Assets | ||
Fair value of issued securities | 32.6 | 33.3 |
Fair Value | Level 1 | Mortgage-backed securities | ||
Financial Assets | ||
Fair value of issued securities | 0 | 0 |
Fair Value | Level 1 | Other, including U.S. Treasury securities | ||
Financial Assets | ||
Fair value of issued securities | 17.7 | 18.4 |
Fair Value | Level 1 | Municipal bonds | ||
Financial Assets | ||
Fair value of issued securities | 0 | 0 |
Fair Value | Level 1 | Foreign government bonds | ||
Financial Assets | ||
Fair value of issued securities | 0 | 0 |
Fair Value | Level 1 | Corporate bonds | ||
Financial Assets | ||
Fair value of issued securities | 14.9 | 14.9 |
Fair Value | Level 1 | Other asset-backed securities | ||
Financial Assets | ||
Fair value of issued securities | 0 | 0 |
Fair Value | Level 2 | ||
Financial Assets | ||
Equity securities at fair value | 110.6 | 82.1 |
Short-term investments | 0 | 4.1 |
Other investments | 43.6 | 36.3 |
Totals | 5,990.9 | 6,079.7 |
Separate account (variable annuity) assets | 0 | 0 |
Financial Liabilities | ||
Investment contract and life policy reserves, embedded derivatives | 2.1 | 2.5 |
Other policyholder funds, embedded derivatives | 0 | 0 |
Fair Value | Level 2 | Recurring | ||
Financial Assets | ||
Fair value of issued securities | 5,836.7 | 5,957.2 |
Fair Value | Level 2 | Mortgage-backed securities | ||
Financial Assets | ||
Fair value of issued securities | 662.5 | 673.7 |
Fair Value | Level 2 | Other, including U.S. Treasury securities | ||
Financial Assets | ||
Fair value of issued securities | 348.2 | 414.8 |
Fair Value | Level 2 | Municipal bonds | ||
Financial Assets | ||
Fair value of issued securities | 1,642.6 | 1,767.9 |
Fair Value | Level 2 | Foreign government bonds | ||
Financial Assets | ||
Fair value of issued securities | 43.6 | 45.1 |
Fair Value | Level 2 | Corporate bonds | ||
Financial Assets | ||
Fair value of issued securities | 2,163.5 | 1,952.2 |
Fair Value | Level 2 | Other asset-backed securities | ||
Financial Assets | ||
Fair value of issued securities | 976.3 | 1,103.5 |
Fair Value | Level 3 | ||
Financial Assets | ||
Equity securities at fair value | 1.4 | 0.3 |
Short-term investments | 0 | 0 |
Other investments | 0 | 0 |
Totals | 371.4 | 355.1 |
Separate account (variable annuity) assets | 0 | 0 |
Financial Liabilities | ||
Investment contract and life policy reserves, embedded derivatives | 0 | 0 |
Other policyholder funds, embedded derivatives | 106.6 | 104.5 |
Fair Value | Level 3 | Recurring | ||
Financial Assets | ||
Fair value of issued securities | 370 | 354.8 |
Fair Value | Level 3 | Mortgage-backed securities | ||
Financial Assets | ||
Fair value of issued securities | 0 | 11.1 |
Fair Value | Level 3 | Other, including U.S. Treasury securities | ||
Financial Assets | ||
Fair value of issued securities | 0 | 0 |
Fair Value | Level 3 | Municipal bonds | ||
Financial Assets | ||
Fair value of issued securities | 60.8 | 59.6 |
Fair Value | Level 3 | Foreign government bonds | ||
Financial Assets | ||
Fair value of issued securities | 0 | 0 |
Fair Value | Level 3 | Corporate bonds | ||
Financial Assets | ||
Fair value of issued securities | 210.3 | 155.8 |
Fair Value | Level 3 | Other asset-backed securities | ||
Financial Assets | ||
Fair value of issued securities | $ 98.9 | $ 128.3 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Transfers Between Different Fair Value Levels (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Financial Assets | ||
Beginning balance | $ 355.1 | $ 295.2 |
Transfers into Level 3 | 172.6 | 268.8 |
Transfers out of Level 3 | (83.6) | (190.3) |
Total gains or losses | ||
Net investment gains (losses) included in net income related to financial assets | 8.1 | 0.3 |
Net unrealized investment gains (losses) included in OCI | 6.3 | (4.8) |
Purchases | 0 | 8.8 |
Issuances | 0 | 0 |
Sales | 0 | 1.2 |
Settlements | 0 | 0 |
Paydowns, maturities and distributions | (70.9) | (23.5) |
Ending balance | 371.4 | 355.1 |
Financial Liabilities | ||
Beginning balance | 104.5 | 93.7 |
Transfers into Level 3 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 |
Total gains or losses | ||
Net investment (gains) losses included in net income related to financial liabilities | 10 | 11.5 |
Net unrealized investment gains (losses) included in OCI | 0 | 0 |
Purchases | 0 | 0 |
Issuances | 4.9 | 8.4 |
Sales | 0 | 0 |
Settlements | 0 | 0 |
Paydowns, maturities and distributions | (12.8) | (9.1) |
Ending balance | 106.6 | 104.5 |
Total | ||
Financial Assets | ||
Beginning balance | 354.8 | 295.1 |
Transfers into Level 3 | 171.6 | 268.6 |
Transfers out of Level 3 | (83.6) | (190.3) |
Total gains or losses | ||
Net investment gains (losses) included in net income related to financial assets | (8.2) | (0.3) |
Net unrealized investment gains (losses) included in OCI | 6.3 | (4.8) |
Purchases | 0 | 8.8 |
Issuances | 0 | 0 |
Sales | 0 | 1.2 |
Settlements | 0 | 0 |
Paydowns, maturities and distributions | (70.9) | (23.5) |
Ending balance | 370 | 354.8 |
Municipal bonds | ||
Financial Assets | ||
Beginning balance | 59.6 | 44.3 |
Transfers into Level 3 | 18.6 | 80.7 |
Transfers out of Level 3 | 0 | (69.1) |
Total gains or losses | ||
Net investment gains (losses) included in net income related to financial assets | 0 | 0 |
Net unrealized investment gains (losses) included in OCI | (2.5) | 4.3 |
Purchases | 0 | 0 |
Issuances | 0 | 0 |
Sales | 0 | 0 |
Settlements | 0 | 0 |
Paydowns, maturities and distributions | (14.9) | (0.6) |
Ending balance | 60.8 | 59.6 |
Corporate bonds | ||
Financial Assets | ||
Beginning balance | 155.8 | 104 |
Transfers into Level 3 | 131.7 | 83.6 |
Transfers out of Level 3 | (64.4) | (36.6) |
Total gains or losses | ||
Net investment gains (losses) included in net income related to financial assets | 0 | 0 |
Net unrealized investment gains (losses) included in OCI | 0 | 1.4 |
Purchases | 0 | 6.9 |
Issuances | 0 | 0 |
Sales | 0 | 0 |
Settlements | 0 | 0 |
Paydowns, maturities and distributions | (12.8) | (3.5) |
Ending balance | 210.3 | 155.8 |
Mortgage-Backed and Other Asset -Backed Securities | ||
Financial Assets | ||
Beginning balance | 139.4 | 146.8 |
Transfers into Level 3 | 21.3 | 104.3 |
Transfers out of Level 3 | (19.2) | (84.6) |
Total gains or losses | ||
Net investment gains (losses) included in net income related to financial assets | (8.2) | (0.3) |
Net unrealized investment gains (losses) included in OCI | 8.8 | (10.5) |
Purchases | 0 | 1.9 |
Issuances | 0 | 0 |
Sales | 0 | 1.2 |
Settlements | 0 | 0 |
Paydowns, maturities and distributions | (43.2) | (19.4) |
Ending balance | 98.9 | 139.4 |
Equity securities | ||
Financial Assets | ||
Beginning balance | 0.3 | 0.1 |
Transfers into Level 3 | 1 | 0.2 |
Transfers out of Level 3 | 0 | 0 |
Total gains or losses | ||
Net investment gains (losses) included in net income related to financial assets | 0.1 | 0 |
Net unrealized investment gains (losses) included in OCI | 0 | 0 |
Purchases | 0 | 0 |
Issuances | 0 | 0 |
Sales | 0 | 0 |
Settlements | 0 | 0 |
Paydowns, maturities and distributions | 0 | 0 |
Ending balance | $ 1.4 | $ 0.3 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Quantitative Information about Level 3 Fair Value Measurements (Details) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) |
Fair Value Measurement Inputs and Valuation Techniques | ||
Fair Value | $ 6,239,300,000 | $ 6,345,300,000 |
Equity securities at fair value | $ 147,200,000 | 121,600,000 |
Minimum | discounted cash flow | Fair Value, Inputs, Level 3 | volatility | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Equity securities, measurement input | 100 | |
Minimum | discounted cash flow | Fair Value, Inputs, Level 3 | option budget | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Derivatives embedded in fixed indexed annuity products, measurement input | 0.009 | |
Maximum | discounted cash flow | Fair Value, Inputs, Level 3 | volatility | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Equity securities, measurement input | 121.95 | |
Maximum | discounted cash flow | Fair Value, Inputs, Level 3 | option budget | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Derivatives embedded in fixed indexed annuity products, measurement input | 0.025 | |
Weighted Average | discounted cash flow | Fair Value, Inputs, Level 3 | lapse rate | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Derivatives embedded in fixed indexed annuity products, measurement input | 0.053 | |
Weighted Average | discounted cash flow | Fair Value, Inputs, Level 3 | Mortality multiplier | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Derivatives embedded in fixed indexed annuity products, measurement input | 0.668 | |
Weighted Average | discounted cash flow | Fair Value, Inputs, Level 3 | Non-performance adjustment | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Derivatives embedded in fixed indexed annuity products, measurement input | 0.050 | |
Municipal bonds | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Fair Value | $ 1,703,400,000 | 1,827,500,000 |
Municipal bonds | Minimum | discounted cash flow | Fair Value, Inputs, Level 3 | I spread | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Debt securities, measurement input | 0.0374 | |
Municipal bonds | Maximum | discounted cash flow | Fair Value, Inputs, Level 3 | I spread | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Debt securities, measurement input | 0.0425 | |
Corporate bonds | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Fair Value | $ 2,388,700,000 | 2,122,900,000 |
Corporate bonds | Minimum | discounted cash flow | Fair Value, Inputs, Level 3 | I spread | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Debt securities, measurement input | 333 | |
Corporate bonds | Minimum | discounted cash flow | Fair Value, Inputs, Level 3 | N spread | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Debt securities, measurement input | 0.0211 | |
Corporate bonds | Minimum | discounted cash flow | Fair Value, Inputs, Level 3 | T spread | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Debt securities, measurement input | 130 | |
Corporate bonds | Minimum | discounted cash flow | Fair Value, Inputs, Level 3 | yield | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Debt securities, measurement input | 0.034 | |
Corporate bonds | Minimum | discounted cash flow | Fair Value, Inputs, Level 3 | discount rate | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Debt securities, measurement input | 0.113 | |
Corporate bonds | Maximum | discounted cash flow | Fair Value, Inputs, Level 3 | I spread | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Debt securities, measurement input | 365 | |
Corporate bonds | Maximum | discounted cash flow | Fair Value, Inputs, Level 3 | N spread | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Debt securities, measurement input | 0.0531 | |
Corporate bonds | Maximum | discounted cash flow | Fair Value, Inputs, Level 3 | T spread | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Debt securities, measurement input | 540 | |
Corporate bonds | Maximum | discounted cash flow | Fair Value, Inputs, Level 3 | yield | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Debt securities, measurement input | 0.088 | |
Corporate bonds | Maximum | discounted cash flow | Fair Value, Inputs, Level 3 | discount rate | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Debt securities, measurement input | 0.120 | |
Corporate bonds | Weighted Average | market comparable | Fair Value, Inputs, Level 3 | option adjusted spread | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Debt securities, measurement input | 0.125 | |
Other asset-backed securities | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Fair Value | $ 1,075,200,000 | $ 1,231,800,000 |
Other asset-backed securities | discounted cash flow | Fair Value, Inputs, Level 3 | N spread | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Debt securities, measurement input | 0.0341 | |
Other asset-backed securities | discounted cash flow | Fair Value, Inputs, Level 3 | T spread | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Debt securities, measurement input | 0.0196 | |
Other asset-backed securities | Minimum | discounted cash flow | Fair Value, Inputs, Level 3 | discount rate | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Debt securities, measurement input | 0.085 | |
Other asset-backed securities | Minimum | discounted cash flow | Fair Value, Inputs, Level 3 | median comparable yield | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Debt securities, measurement input | 0.073 | |
Other asset-backed securities | Minimum | market comparable | Fair Value, Inputs, Level 3 | median price | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Debt securities, measurement input | 54.79 | |
Other asset-backed securities | Minimum | vendor price | Fair Value, Inputs, Level 3 | haircut | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Debt securities, measurement input | 0.030 | |
Other asset-backed securities | Maximum | discounted cash flow | Fair Value, Inputs, Level 3 | discount rate | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Debt securities, measurement input | 0.200 | |
Other asset-backed securities | Maximum | discounted cash flow | Fair Value, Inputs, Level 3 | median comparable yield | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Debt securities, measurement input | 0.161 | |
Other asset-backed securities | Maximum | market comparable | Fair Value, Inputs, Level 3 | median price | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Debt securities, measurement input | 97.95 | |
Other asset-backed securities | Maximum | vendor price | Fair Value, Inputs, Level 3 | haircut | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Debt securities, measurement input | 0.050 | |
Other asset-backed securities | Weighted Average | discounted cash flow | Fair Value, Inputs, Level 3 | discount margin | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Debt securities, measurement input | 0.146 |
Fair Value of Financial Instr_7
Fair Value of Financial Instruments - Financial Instruments Not Carried at Fair Value (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Level 1 | ||
Financial Assets | ||
Other investments | $ 0 | $ 0 |
Deposit asset on reinsurance | 0 | 0 |
Financial Liabilities | ||
Investment contract and policy reserves, fixed annuity contracts | 0 | 0 |
Investment contract and life policy reserves, account values on life contracts | 0 | 0 |
Other policyholder funds | 0 | 0 |
Short-term debt | 0 | 0 |
Long-term debt | 0 | 0 |
Level 2 | ||
Financial Assets | ||
Other investments | 0 | 0 |
Deposit asset on reinsurance | 0 | 0 |
Financial Liabilities | ||
Investment contract and policy reserves, fixed annuity contracts | 0 | 0 |
Investment contract and life policy reserves, account values on life contracts | 0 | 0 |
Other policyholder funds | 782.8 | 590.7 |
Short-term debt | 0 | 0 |
Long-term debt | 277.4 | 331.1 |
Level 3 | ||
Financial Assets | ||
Other investments | 152.4 | 172.1 |
Deposit asset on reinsurance | 2,935.1 | 3,030.6 |
Financial Liabilities | ||
Investment contract and policy reserves, fixed annuity contracts | 5,004.9 | 4,963.3 |
Investment contract and life policy reserves, account values on life contracts | 115.4 | 108.4 |
Other policyholder funds | 56.5 | 56.1 |
Short-term debt | 249 | 135 |
Long-term debt | 0 | 0 |
Carrying Value | ||
Financial Assets | ||
Other investments | 148.8 | 168.3 |
Deposit asset on reinsurance | 2,481.5 | 2,420.9 |
Financial Liabilities | ||
Investment contract and policy reserves, fixed annuity contracts | 4,941.3 | 4,847.6 |
Investment contract and life policy reserves, account values on life contracts | 105.4 | 98.7 |
Other policyholder funds | 839.3 | 646.8 |
Short-term debt | 249 | 135 |
Long-term debt | 253.6 | 302.3 |
Fair Value | ||
Financial Assets | ||
Other investments | 152.4 | 172.1 |
Deposit asset on reinsurance | 2,935.1 | 3,030.6 |
Financial Liabilities | ||
Investment contract and policy reserves, fixed annuity contracts | 5,004.9 | 4,963.3 |
Investment contract and life policy reserves, account values on life contracts | 115.4 | 108.4 |
Other policyholder funds | 839.3 | 646.8 |
Short-term debt | 249 | 135 |
Long-term debt | $ 277.4 | $ 331.1 |
Derivatives - Narrative (Detail
Derivatives - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Derivatives, Fair Value | ||
Expected contract term | 10 years | |
Fair value of collateral | $ 10.9 | $ 16.3 |
Maximum exposure | $ 0.3 | |
Call option | ||
Derivatives, Fair Value | ||
Derivative term of contract | 1 year |
Derivatives - Fair Value of Der
Derivatives - Fair Value of Derivatives in Consolidated Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Derivatives, reported in Short-term and other investments | $ 10.7 | $ 16.8 |
Derivatives, reported in Short-term and other investments | ||
Assets | ||
Derivatives, reported in Short-term and other investments | 10.7 | 16.8 |
FIA - embedded derivatives, reported in Other policyholder funds | ||
Liabilities | ||
Derivative liability | 106.6 | 104.5 |
IUL - embedded derivatives, reported in Investment contract and policy reserves | ||
Liabilities | ||
Derivative liability | $ 2.1 | $ 2.5 |
Derivatives - Fair Value of D_2
Derivatives - Fair Value of Derivatives Included in Consolidated Statements of Operations (Details) - Sales - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Change in fair value of derivatives: | |||
Net investment gains (losses) | $ 8.7 | $ 0.2 | $ 9.5 |
Change in fair value of embedded derivatives: | |||
Net investment gains (losses) | $ (11.3) | $ (12.1) | $ (13.6) |
Derivatives - Notional and Fair
Derivatives - Notional and Fair Value Amounts of Derivative Instruments (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Derivative | ||
Notional Amount | $ 305.7 | $ 287.1 |
Fair Value | 10.7 | 16.8 |
Bank of America, N.A. | ||
Derivative | ||
Notional Amount | 193 | 205.2 |
Fair Value | 6.3 | 14 |
Barclays Bank PLC | ||
Derivative | ||
Notional Amount | 98.7 | 81.9 |
Fair Value | 4.1 | 2.8 |
Citigroup Inc. | ||
Derivative | ||
Notional Amount | 0 | 0 |
Fair Value | 0 | 0 |
Credit Suisse International | ||
Derivative | ||
Notional Amount | 14 | 0 |
Fair Value | 0.3 | 0 |
Societe Generale | ||
Derivative | ||
Notional Amount | 0 | 0 |
Fair Value | $ 0 | $ 0 |
Deposit Asset on Reinsurance -
Deposit Asset on Reinsurance - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | |
Effects of Reinsurance | ||||
Reinsurance block of in-force fixed and variable annuity business | $ 3,200 | $ 2,900 | $ 2,900 | |
Percentage of forced fixed annuities (percent) | 50.00% | |||
Fixed annuity reserves reinsured on a coinsurance basis | $ 2,400 | |||
Separate account asset | 3,441 | $ 2,891.4 | ||
Separate account liability | 3,441 | 2,891.4 | ||
Net Investment Income | 422.5 | 357.6 | 365.1 | |
Reinsurance Contract Modified Coinsurance Basis | ||||
Effects of Reinsurance | ||||
Separate account asset | 800 | |||
Separate account liability | $ 800 | |||
Minimum | ||||
Effects of Reinsurance | ||||
Minimum crediting rating | 4.50% | |||
Deposit Asset On Reinsurance | ||||
Effects of Reinsurance | ||||
Net Investment Income | $ 101.1 | $ 97.3 | $ 70.8 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Millions | Oct. 01, 2020 | Oct. 31, 2021 | Jun. 30, 2019 | Dec. 31, 2021 | Dec. 31, 2019 |
Goodwill | |||||
Goodwill impairment | $ 0 | ||||
Impairment of infinite lived intangible assets | 0 | ||||
Trade names | |||||
Goodwill | |||||
Impairment of infinite lived intangible assets | 0 | ||||
BCG | |||||
Goodwill | |||||
Goodwill impairment | $ 5.6 | $ 5.6 | |||
Acquired finite-lived intangible assets | $ 14.1 | ||||
Impairment of finite lived intangible assets | 3.6 | ||||
BCG | Trade names | |||||
Goodwill | |||||
Impairment of infinite lived intangible assets | $ 0.8 | ||||
NTA | |||||
Goodwill | |||||
Acquired finite-lived intangible assets | $ 160.4 | ||||
Retirement | |||||
Goodwill | |||||
Goodwill impairment | $ 28 | $ 0 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Goodwill Rollforward (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2021 | |
Goodwill | ||
Beginning balance | $ 43.5 | |
Impairments | 0 | |
Acquisitions | 0 | |
Ending balance | 43.5 | |
Property & Casualty | ||
Goodwill | ||
Beginning balance | 9.5 | |
Impairments | 0 | |
Acquisitions | 0 | |
Ending balance | 9.5 | |
Supplemental | ||
Goodwill | ||
Beginning balance | 19.6 | |
Impairments | 0 | |
Acquisitions | 0 | |
Ending balance | 19.6 | |
Retirement | ||
Goodwill | ||
Beginning balance | 4.5 | |
Impairments | $ (28) | 0 |
Acquisitions | 0 | |
Ending balance | 4.5 | |
Life | ||
Goodwill | ||
Beginning balance | 9.9 | |
Impairments | 0 | |
Acquisitions | 0 | |
Ending balance | $ 9.9 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Summary of Finite-Lived Intangible Assets (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Finite-Lived Intangible Assets | |
Weighted Average Useful Life (in Years) | 23 years |
At inception: | $ 174.5 |
Accumulated amortization and impairments: | (39.9) |
Total | $ 134.6 |
Value of business acquired | |
Finite-Lived Intangible Assets | |
Weighted Average Useful Life (in Years) | 30 years |
At inception: | $ 94.4 |
Accumulated amortization and impairments: | $ (17.6) |
Value of distribution acquired | |
Finite-Lived Intangible Assets | |
Weighted Average Useful Life (in Years) | 17 years |
At inception: | $ 54 |
Accumulated amortization and impairments: | $ (11.6) |
Value of agency relationships | |
Finite-Lived Intangible Assets | |
Weighted Average Useful Life (in Years) | 14 years |
At inception: | $ 17 |
Accumulated amortization and impairments: | $ (6.3) |
Value of customer relationships | |
Finite-Lived Intangible Assets | |
Weighted Average Useful Life (in Years) | 10 years |
At inception: | $ 9.1 |
Accumulated amortization and impairments: | $ (4.4) |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Estimated Future Amortization (Details) $ in Millions | Dec. 31, 2021USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity | |
2022 | $ 12.1 |
2023 | 11.2 |
2024 | 10.5 |
2025 | 9.8 |
2026 | 9.2 |
Thereafter | 81.8 |
Total | $ 134.6 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets - Summary of Indefinite-Lived Intangibles (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Indefinite-lived Intangible Assets | |
Beginning balance | $ 10.8 |
Impairments | 0 |
Acquisitions | 0 |
Ending balance | 10.8 |
Trade names | |
Indefinite-lived Intangible Assets | |
Beginning balance | 7.9 |
Impairments | 0 |
Acquisitions | 0 |
Ending balance | 7.9 |
State licenses | |
Indefinite-lived Intangible Assets | |
Beginning balance | 2.9 |
Impairments | 0 |
Acquisitions | 0 |
Ending balance | $ 2.9 |
Unpaid Claims and Claim Expen_3
Unpaid Claims and Claim Expenses - Summary of Reinsurance Reserve Balances (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Liability for Unpaid Claims and Claims Adjustment Expense | |||
Gross reserves, beginning of year | $ 438,800 | ||
Less: reinsurance recoverables | 122,500 | ||
Claims and claim expense payments for claims occurring during: | |||
Plus: reinsurance recoverables | 119,600 | $ 122,500 | |
Gross reserves, end of year | 425,900 | 438,800 | |
Benefits, claims and settlement expenses | 617,700 | 568,900 | $ 585,100 |
Property & Casualty segment | |||
Liability for Unpaid Claims and Claims Adjustment Expense | |||
Gross reserves, beginning of year | 372,200 | 387,000 | 367,200 |
Less: reinsurance recoverables | 112,900 | 120,500 | 89,700 |
Net reserves, beginning of year | 259,300 | 266,500 | 277,500 |
Incurred claims and claim expenses: | |||
Claims occurring in the current year | 455,100 | 441,200 | 483,100 |
Decrease in estimated reserves for claims occurring in prior years | (7,200) | (10,200) | (7,500) |
Total claims and claim expenses incurred | 447,900 | 431,000 | 475,600 |
Claims and claim expense payments for claims occurring during: | |||
Current year | 307,100 | 291,400 | 329,500 |
Prior years | 148,000 | 146,800 | 157,100 |
Total claims and claim expense payments | 455,100 | 438,200 | 486,600 |
Net reserves, end of year | 252,100 | 259,300 | 266,500 |
Plus: reinsurance recoverables | 110,300 | 112,900 | 120,500 |
Gross reserves, end of year | 362,400 | 372,200 | 387,000 |
Life and Annuity segments | |||
Liability for Unpaid Claims and Claims Adjustment Expense | |||
Net reserves, beginning of year | 66,600 | 55,900 | |
Claims and claim expense payments for claims occurring during: | |||
Net reserves, end of year | 63,500 | 66,600 | 55,900 |
Benefits, claims and settlement expenses | $ 169,800 | $ 137,900 | $ 109,500 |
Unpaid Claims and Claim Expen_4
Unpaid Claims and Claim Expenses - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting Information | |||
Automobile liability coverage percent reserves | 74.00% | ||
Short tail coverage reserves as a percentage of total reserves | 26.00% | ||
Long tail coverage reserves as percentage of reserves | 74.00% | ||
Percentage of losses incurred | 99.00% | ||
Potential variability of property and casualty loss reserves | 6.00% | ||
Probability of other possible outcomes possible impact on net income | $ 12 | ||
Favorable development of total reserves for property and casualty claims occurring in prior years | 7.2 | $ 10.2 | $ 7.5 |
2018 Camp Fire In California | |||
Segment Reporting Information | |||
Favorable development of total reserves for property and casualty claims occurring in prior years | $ 4.8 |
Unpaid Claims and Claim Expen_5
Unpaid Claims and Claim Expenses - Average Annual Percentage Payout Of Incurred Claims by Age (Details) | Dec. 31, 2021 |
Homeowners | |
Short-duration Insurance Contracts, Historical Claims Duration | |
Year One | 79.60% |
Year Two | 17.10% |
Year Three | 2.00% |
Year Four | 0.60% |
Year Five | 0.50% |
Year Six | 0.20% |
Year Seven | 0.00% |
Year Eight | 0.00% |
Year Nine | 0.00% |
Year Ten | 0.00% |
Auto liability | |
Short-duration Insurance Contracts, Historical Claims Duration | |
Year One | 40.00% |
Year Two | 34.20% |
Year Three | 14.10% |
Year Four | 6.50% |
Year Five | 3.30% |
Year Six | 1.30% |
Year Seven | 0.50% |
Year Eight | 0.10% |
Year Nine | 0.00% |
Year Ten | 0.00% |
Auto physical damage | |
Short-duration Insurance Contracts, Historical Claims Duration | |
Year One | 95.60% |
Year Two | 4.70% |
Year Three | (0.30%) |
Year Four | 0.00% |
Year Five | 0.00% |
Year Six | 0.00% |
Year Seven | 0.00% |
Year Eight | 0.00% |
Year Nine | 0.00% |
Year Ten | 0.00% |
Unpaid Claims and Claim Expen_6
Unpaid Claims and Claim Expenses - Incurred and Paid Claims by Accident Year on a Net Basis (Details) $ in Millions | Dec. 31, 2021USD ($)claim | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) |
Homeowners | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 1,270 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 1,217.2 | |||||||||
Outstanding prior to 2012 | 0 | |||||||||
Prior years paid | 0 | |||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance | 52.8 | |||||||||
Homeowners | 2012 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 106 | $ 106 | $ 106 | $ 106 | $ 106.3 | $ 106.3 | $ 106.5 | $ 109.4 | $ 109.2 | $ 108.8 |
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 21,600,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 106 | 106 | 106 | 106 | 105.9 | 105.6 | 105.2 | 104.2 | 101.6 | 84.3 |
Homeowners | 2013 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 101.7 | 101.7 | 101.7 | 101.8 | 102.3 | 102.4 | 104 | 107.5 | 105.6 | |
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 19,200,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 101.7 | 101.7 | 101.7 | 101.7 | 101.5 | 101 | 99.4 | 96.6 | 76.9 | |
Homeowners | 2014 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 106.4 | 106.4 | 106.6 | 106.6 | 106.8 | 109.1 | 113.5 | 111.6 | ||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 20,100,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 106.4 | 106.4 | 106.4 | 106.3 | 106.1 | 105.7 | 103 | 83.3 | ||
Homeowners | 2015 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 114.9 | 114.9 | 115.1 | 114.1 | 114.4 | 115.1 | 111.7 | |||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 18,700,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 114.7 | 114.9 | 114.6 | 113.3 | 111.9 | 109.3 | 90.7 | |||
Homeowners | 2016 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 117.9 | 117.9 | 117.9 | 117 | 118.6 | 115.9 | ||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 19,900,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 117.8 | 117.7 | 117.5 | 115.1 | 113.2 | 95.8 | ||||
Homeowners | 2017 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 130.8 | 130.7 | 132.7 | 129.8 | 126.3 | |||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 0.3 | |||||||||
Cumulative Number of Reported Claims | claim | 19,900,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 130.5 | 130 | 129.8 | 128.5 | 106.8 | |||||
Homeowners | 2018 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 158.1 | 158.9 | 157.4 | 166.8 | ||||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 0.4 | |||||||||
Cumulative Number of Reported Claims | claim | 21,100,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 157.4 | 157 | 152.4 | 130.5 | ||||||
Homeowners | 2019 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 132.1 | 129.9 | 130.4 | |||||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 2.5 | |||||||||
Cumulative Number of Reported Claims | claim | 17,500,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 129.1 | 126.2 | 103.8 | |||||||
Homeowners | 2020 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 151.9 | 155.7 | ||||||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 11.1 | |||||||||
Cumulative Number of Reported Claims | claim | 19,600,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 138.7 | 106.8 | ||||||||
Homeowners | 2021 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 150.2 | |||||||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 22.6 | |||||||||
Cumulative Number of Reported Claims | claim | 15,500,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 114.9 | |||||||||
Auto liability | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 1,656.3 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 1,486.3 | |||||||||
Outstanding prior to 2012 | 1.5 | |||||||||
Prior years paid | 0 | |||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance | 171.5 | |||||||||
Auto liability | 2012 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 145.8 | 145.9 | 145.5 | 145.6 | 145.8 | 147.6 | 149.3 | 150.3 | 153.8 | 156.4 |
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 18,600,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 145.3 | 145.3 | 145.2 | 145.1 | 144.6 | 142.9 | 138.6 | 127.2 | 109.6 | 61.3 |
Auto liability | 2013 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 147.7 | 148.3 | 148.1 | 148 | 148.1 | 150.7 | 150.7 | 152.9 | 153.9 | |
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 19,400,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 147.5 | 147.4 | 147.4 | 146.8 | 145.3 | 140 | 131.2 | 108.9 | 62.2 | |
Auto liability | 2014 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 159.4 | 159.3 | 159.4 | 159.8 | 159.9 | 158.5 | 157.2 | 155.1 | ||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 0.2 | |||||||||
Cumulative Number of Reported Claims | claim | 20,300,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 158.8 | 158.6 | 157.6 | 155.8 | 149.1 | 139.5 | 117.5 | 61.3 | ||
Auto liability | 2015 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 178.9 | 179.2 | 178.7 | 178.3 | 177 | 172.6 | 165.5 | |||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 0.4 | |||||||||
Cumulative Number of Reported Claims | claim | 20,800,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 177.7 | 176.7 | 174.5 | 170.1 | 158 | 134.5 | 70.8 | |||
Auto liability | 2016 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 189.2 | 188.1 | 186.6 | 184.6 | 184.4 | 180.4 | ||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 0.5 | |||||||||
Cumulative Number of Reported Claims | claim | 21,300,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 188.1 | 184.5 | 177.8 | 166.8 | 140.9 | 73.1 | ||||
Auto liability | 2017 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 191.7 | 189.1 | 188.6 | 188.8 | 188 | |||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 1.9 | |||||||||
Cumulative Number of Reported Claims | claim | 20,100,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 185.8 | 179.8 | 166.6 | 139.5 | 70.7 | |||||
Auto liability | 2018 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 189.8 | 192.9 | 195.3 | 200.3 | ||||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 3.8 | |||||||||
Cumulative Number of Reported Claims | claim | 19,500,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 180.7 | 168.6 | 141.5 | 77.5 | ||||||
Auto liability | 2019 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 176.7 | 180.1 | 181.1 | |||||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 8.9 | |||||||||
Cumulative Number of Reported Claims | claim | 18,900,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 155.5 | 129.1 | 69.7 | |||||||
Auto liability | 2020 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 134.9 | 137 | ||||||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 20.1 | |||||||||
Cumulative Number of Reported Claims | claim | 13,100,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 94 | 51.5 | ||||||||
Auto liability | 2021 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 142.2 | |||||||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 55.3 | |||||||||
Cumulative Number of Reported Claims | claim | 12,800,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 52.9 | |||||||||
Auto physical damage | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 994.7 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 988 | |||||||||
Outstanding prior to 2012 | 0 | |||||||||
Prior years paid | 0 | |||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance | 6.7 | |||||||||
Auto physical damage | 2012 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 83.3 | 83.3 | 83.3 | 83.3 | 83.3 | 83.4 | 83.4 | 83.4 | 82.3 | 83.8 |
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 78,200,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 83.3 | 83.3 | 83.3 | 83.3 | 83.3 | 83.3 | 83.4 | 83.4 | 83.4 | $ 80.5 |
Auto physical damage | 2013 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 88.4 | 88.5 | 88.5 | 88.5 | 88.5 | 88.6 | 88.7 | 88.9 | 91.4 | |
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 80,900,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 88.4 | 88.4 | 88.5 | 88.5 | 88.5 | 88.5 | 88.6 | 88.7 | $ 85.1 | |
Auto physical damage | 2014 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 95.2 | 95.2 | 95.2 | 95.2 | 95.2 | 95.4 | 95.6 | 95.6 | ||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 87,900,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 95.2 | 95.2 | 95.2 | 95.3 | 95.3 | 95.3 | 95.4 | $ 88.9 | ||
Auto physical damage | 2015 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 97.6 | 97.6 | 97.6 | 97.5 | 97.6 | 98 | 99.3 | |||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 87,500,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 97.6 | 97.6 | 97.6 | 97.6 | 97.7 | 97.9 | $ 92.1 | |||
Auto physical damage | 2016 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 109.5 | 109.6 | 109.6 | 109.3 | 109.5 | 112.4 | ||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 93,200,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 109.6 | 109.6 | 109.6 | 109.5 | 109.7 | $ 106.5 | ||||
Auto physical damage | 2017 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 110.5 | 110.6 | 110.5 | 111.8 | 115.5 | |||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 91,300,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 110.6 | 110.6 | 110.7 | 110.8 | $ 105.2 | |||||
Auto physical damage | 2018 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 108.3 | 108.3 | 108.9 | 109 | ||||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 94,500,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 108.3 | 108.3 | 109.1 | $ 103.6 | ||||||
Auto physical damage | 2019 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 110 | 110.5 | 111.6 | |||||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ (0.2) | |||||||||
Cumulative Number of Reported Claims | claim | 92,200,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 110.1 | 110.7 | $ 106.2 | |||||||
Auto physical damage | 2020 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 86.9 | 87 | ||||||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ (0.8) | |||||||||
Cumulative Number of Reported Claims | claim | 68,800,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 87.6 | $ 84.1 | ||||||||
Auto physical damage | 2021 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 105 | |||||||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ (6.7) | |||||||||
Cumulative Number of Reported Claims | claim | 69,700,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 97.3 |
Unpaid Claims and Claim Expen_7
Unpaid Claims and Claim Expenses - Reconciliation of Net Incurred and Paid Claims (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Short-duration Insurance Contracts, Historical Claims Duration | ||
Gross reserves, end of year | $ 425.9 | $ 438.8 |
Property & Casualty segment | ||
Short-duration Insurance Contracts, Historical Claims Duration | ||
Liabilities for claims and claim adjustment expenses, net of reinsurance | 233.8 | |
Reinsurance recoverables, including reinsurance premium paid | 110.3 | |
Unallocated claims adjustment expenses | 18.3 | |
Total other than short duration and unallocated claims adjustment expenses | 81.8 | |
Property & Casualty segment | Homeowners | ||
Short-duration Insurance Contracts, Historical Claims Duration | ||
Liabilities for claims and claim adjustment expenses, net of reinsurance | 52.8 | |
Reinsurance recoverables, including reinsurance premium paid | 1.4 | |
Property & Casualty segment | Auto liability | ||
Short-duration Insurance Contracts, Historical Claims Duration | ||
Liabilities for claims and claim adjustment expenses, net of reinsurance | 171.5 | |
Reinsurance recoverables, including reinsurance premium paid | 99.9 | |
Property & Casualty segment | Auto physical damage | ||
Short-duration Insurance Contracts, Historical Claims Duration | ||
Liabilities for claims and claim adjustment expenses, net of reinsurance | 6.7 | |
Property & Casualty segment | Other short duration lines | ||
Short-duration Insurance Contracts, Historical Claims Duration | ||
Liabilities for claims and claim adjustment expenses, net of reinsurance | 2.8 | |
Reinsurance recoverables, including reinsurance premium paid | 9 | |
Property & Casualty segment | Insurance lines other than short duration | ||
Short-duration Insurance Contracts, Historical Claims Duration | ||
Insurance lines other than short duration | $ 63.5 |
Reinsurance and Catastrophes -
Reinsurance and Catastrophes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Reinsurance Recoverable on Unpaid Insurance Reserves | |||
Losses incurred for catastrophe claims, carrying amount | $ 78,200 | $ 84,400 | $ 52,000 |
Percentage of coverage for catastrophe losses above retention amount, layer one | 95.00% | ||
Coverage above retention per occurrence under layer one catastrophe reinsurance | $ 25,000 | ||
Retention base amount per occurrence under layer one | 25,000 | ||
Coverage above retention per occurrence under layer two catastrophe reinsurance | 40,000 | ||
Retention base amount per occurrence under layer two | 50,000 | ||
Coverage above retention per occurrence under layer three catastrophe reinsurance | 85,000 | ||
Retention base amount per occurrence under layer three | 90,000 | ||
Reinsured amount of each loss above retention in clash event | 20,000 | ||
Amount of property recovery related to risk losses | 8,000 | ||
Amount of maximum individual life insurance risk retained | $ 500 | ||
Percentage of life reinsured catastrophe risk in excess specified retention per occurrence amount | 100.00% | ||
Minimum | |||
Reinsurance Recoverable on Unpaid Insurance Reserves | |||
Retention amount per occurrence related to catastrophe losses, layer one | $ 25,000 | ||
Liability coverages, Company reinsured each loss above a retention per occurrence | 1,000 | ||
Amount of group life policy insurance risk retained | 100 | ||
Amount life catastrophe risk retention per occurrence | 1,000 | ||
Minimum | Property & Casualty segment | |||
Reinsurance Recoverable on Unpaid Insurance Reserves | |||
Retention amount of each property loss per occurrence | 1,000 | ||
Maximum | |||
Reinsurance Recoverable on Unpaid Insurance Reserves | |||
Retention amount per occurrence related to catastrophe losses, layer one | 170,000 | ||
Liability coverages, Company reinsured each loss above a retention per occurrence | 5,000 | ||
Amount of group life policy insurance risk retained | 125 | ||
Amount life catastrophe risk retention per occurrence | 35,000 | ||
Maximum | Property & Casualty segment | |||
Reinsurance Recoverable on Unpaid Insurance Reserves | |||
Retention amount of each property loss per occurrence | $ 5,000 |
Reinsurance and Catastrophes _2
Reinsurance and Catastrophes - Total Amounts of Reinsurance Recoverables On Unpaid Insurance Reserves (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Summary of reinsurance recoverable on unpaid insurance reserves | ||||
Reinsurance recoverables | $ 119.6 | $ 122.5 | ||
Property & Casualty | ||||
Summary of reinsurance recoverable on unpaid insurance reserves | ||||
Reinsurance recoverables | 110.3 | 112.9 | $ 120.5 | $ 89.7 |
Property & Casualty | Reinsurance companies | ||||
Summary of reinsurance recoverable on unpaid insurance reserves | ||||
Reinsurance recoverables | 10.4 | 13.2 | ||
Property & Casualty | State insurance facilities | ||||
Summary of reinsurance recoverable on unpaid insurance reserves | ||||
Reinsurance recoverables | 99.9 | 99.7 | ||
Life | ||||
Summary of reinsurance recoverable on unpaid insurance reserves | ||||
Reinsurance recoverables | $ 9.3 | $ 9.6 |
Reinsurance and Catastrophes _3
Reinsurance and Catastrophes - Effects of Reinsurance (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Gross Amount | |||
Premiums written and contract deposits, Gross Amount | $ 1,370.1 | $ 1,369.9 | $ 1,337.8 |
Premiums and contract charges earned, Gross Amount | 913.2 | 949.6 | 917.6 |
Benefits, claims and settlement expenses, Gross Amount | 619.3 | 475.7 | 633.9 |
Ceded to Other Companies | |||
Premiums written and contract deposits, Ceded to Other Companies | 23.1 | 20.4 | 23.9 |
Premiums and contract charges earned, Ceded to Other Companies | 33.3 | 28.8 | 30.4 |
Benefits, claims and settlement expenses, Ceded to Other Companies | 7.8 | (86.2) | 56.3 |
Assumed from Other Companies | |||
Premiums written and contract deposits, Assumed from Other Companies | 9.4 | 9.8 | 10.6 |
Premiums and contract charges earned, Assumed from Other Companies | 9.7 | 9.9 | 10.8 |
Benefits, claims and settlement expenses, Assumed from Other Companies | 6.2 | 7 | 7.5 |
Net Amount | |||
Premiums written and contract deposits, Net Amount | 1,356.4 | 1,359.3 | 1,324.5 |
Premiums and contract charges earned, Net Amount | 889.6 | 930.7 | 898 |
Benefits, claims and settlement expenses | $ 617.7 | $ 568.9 | $ 585.1 |
Debt - Summary of Debt (Details
Debt - Summary of Debt (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | Nov. 23, 2015 |
Long-term debt | |||
Long-term debt | $ 253,600,000 | $ 302,300,000 | |
Total | $ 502,600,000 | 437,300,000 | |
FHLB advances interest rate | 0.00% | ||
Bank Credit Facility | |||
Short-term debt | |||
Bank Credit Facility | $ 249,000,000 | 135,000,000 | |
4.50% Senior Notes | |||
Long-term debt | |||
Long-term debt | $ 248,600,000 | 248,300,000 | |
Interest Rates | 4.50% | 4.50% | |
Principal amount | $ 250,000,000 | $ 250,000,000 | |
Unamortized discount | 300,000 | 400,000 | |
Unamortized debt issuance costs | 1,100,000 | 1,300,000 | |
Federal Home Loan Bank borrowing | |||
Long-term debt | |||
Long-term debt | $ 5,000,000 | $ 54,000,000 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | Dec. 31, 2021 | Nov. 23, 2015 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Jul. 12, 2021 | Jul. 11, 2021 |
Debt Instrument | |||||||
Principal borrowings on Bank Credit Facility | $ 114,000,000 | $ 0 | $ 135,000,000 | ||||
Purchase of FHLB activity-based common stock as percentage of borrowing, required | 4.50% | ||||||
FHLB, current | $ 5,000,000 | $ 5,000,000 | |||||
HMIC | |||||||
Debt Instrument | |||||||
Purchase of FHLB activity-based common stock as percentage of borrowing, percentage, authorized | 15.00% | ||||||
FHLB, non current | 5,000,000 | $ 5,000,000 | |||||
HMIC | Minimum | |||||||
Debt Instrument | |||||||
Purchase of FHLB activity-based common stock as percentage of borrowing, required | 2.00% | ||||||
4.50% Senior Notes | |||||||
Debt Instrument | |||||||
Principal amount | $ 250,000,000 | $ 250,000,000 | $ 250,000,000 | ||||
Stated rate | 4.50% | 4.50% | 4.50% | ||||
Discount percent on issuance | 0.265% | ||||||
Effective interest percentage | 4.53% | ||||||
Debt redemption price, percentage | 100.00% | ||||||
Treasury yield | 4.50% Senior Notes | |||||||
Debt Instrument | |||||||
Basis spread on variable rate | 0.35% | ||||||
Bank Credit Facility | |||||||
Debt Instrument | |||||||
Borrowing capacity | $ 325,000,000 | $ 225,000,000 | |||||
Bank Credit Facility | $ 249,000,000 | $ 249,000,000 | $ 135,000,000 | ||||
Unused portion of the Bank Credit Facility | 76,000,000 | $ 76,000,000 | |||||
Commitment fee percent | 0.15% | ||||||
Principal borrowings on Bank Credit Facility | $ 114,000,000 | ||||||
Bank Credit Facility | London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument | |||||||
Basis spread on variable rate | 1.15% |
Income Taxes - Income Tax Asset
Income Taxes - Income Tax Assets and Liabilities Included in Other Assets and Other Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Income tax (asset) liability | ||
Current | $ (9.5) | $ (12.6) |
Deferred | $ 190.5 | $ 206.7 |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets | ||
Unearned premium reserve reduction | $ 11.7 | $ 11.5 |
Compensation accruals | 9.6 | 9.5 |
Impaired securities | 2.3 | 2.1 |
Other comprehensive income - net funded status of benefit plans | 2.7 | 3 |
Discounting of unpaid claims and claim expense tax reserves | 2.5 | 2.5 |
Intangibles | 0.1 | 0 |
Postretirement benefits other than pensions | 0.3 | 0.3 |
Total gross deferred tax assets | 29.2 | 28.9 |
Deferred tax liabilities | ||
Other comprehensive income - net unrealized gains on securities | 101.1 | 124.7 |
Deferred policy acquisition costs | 37.3 | 36.3 |
Life insurance future policy benefit reserve | 30.7 | 26.7 |
Life insurance future policy benefit reserve (transitional rule) | 8.5 | 10.7 |
Discounting of unpaid claims and claim expense tax reserves (transitional rule) | 0.6 | 0.8 |
Investment related adjustments | 37.3 | 34.2 |
Intangibles | 0 | 0.2 |
Other, net | 4.2 | 2 |
Total gross deferred tax liabilities | 219.7 | 235.6 |
Net deferred tax liability | $ 190.5 | $ 206.7 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Current | $ 27.7 | $ 16.9 | $ 31.5 |
Deferred | 4.4 | 9.4 | 20.5 |
Total income tax expense | $ 32.1 | $ 26.3 | $ 52 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Effective Tax Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Expected federal tax on income | $ 36.7 | $ 33.5 | $ 49.6 |
Add (deduct) tax effects of: | |||
Tax-exempt interest | (3.9) | (4.2) | (4.2) |
Dividend received deduction | (2.2) | (1.5) | (1.4) |
Goodwill impairment | 0 | 0.2 | 5.9 |
CARES Act net operating loss carryback | 0 | (2.8) | 0 |
Employee share-based compensation | (1.3) | (0.5) | 0.3 |
Compensation deduction limitation | 1.5 | 0.7 | 0.7 |
Prior year adjustments | 0.1 | (0.2) | (0.7) |
Other, net | 1.2 | 1.1 | 1.8 |
Total income tax expense | $ 32.1 | $ 26.3 | $ 52 |
Income Taxes - Reconciliation_2
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns | |||
Balance as of the beginning of the year | $ 2.3 | $ 2 | $ 1.8 |
Increases related to prior year tax positions | 0 | 0.2 | 0.1 |
Decreases related to prior year tax positions | (0.1) | 0 | 0 |
Increases related to current year tax positions | 0 | 0.1 | 0.1 |
Settlements | 0 | 0 | 0 |
Lapse of statute | (0.5) | 0 | 0 |
Balance as of the end of the year | $ 1.7 | $ 2.3 | $ 2 |
Operating Leases - Narrative (D
Operating Leases - Narrative (Details) | Dec. 31, 2021 |
Lessee, Lease, Description | |
Renewal term | 25 years |
Minimum | |
Lessee, Lease, Description | |
Remaining lease term | 1 year |
Maximum | |
Lessee, Lease, Description | |
Remaining lease term | 4 years |
Operating Leases - Components o
Operating Leases - Components of Lease Cost (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | ||
Operating lease cost | $ 4.3 | $ 4.5 |
Short-term lease cost | 0.1 | 0.1 |
Total lease cost | $ 4.4 | $ 4.6 |
Operating Leases - Supplemental
Operating Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of lease liabilities | $ 4.3 | $ 4.5 |
Operating Leases - Balance Shee
Operating Leases - Balance Sheet Information (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Right of use assets, included in Other assets | $ 9 | $ 12.6 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets | Other Assets |
Operating lease liabilities, included in Other liabilities | $ 10 | $ 13.6 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Other liabilities | Other liabilities |
Weighted average remaining lease term | 3 years 25 days | 3 years 7 months 17 days |
Weighted average discount rate | 3.67% | 3.75% |
Operating Leases - Future Minim
Operating Leases - Future Minimum Operating Lease Payments (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Year Ending December 31, | ||
2022 | $ 4.2 | |
2023 | 3.5 | |
2024 | 2 | |
2025 | 0.8 | |
2026 | 0 | |
Thereafter | 0 | |
Total future minimum lease payments | 10.5 | |
Less imputed interest | (0.5) | |
Total | $ 10 | $ 13.6 |
Shareholders' Equity and Shar_3
Shareholders' Equity and Share-Based Compensation - Narrative (Details) | 12 Months Ended | |||||
Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2015shares | Dec. 31, 2013 | Dec. 31, 2019$ / shares | Sep. 30, 2015USD ($)$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Common stock, par value (in usd per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||
Shares reacquired during period (in shares) | shares | 140,758 | 52,095 | ||||
Percentage of outstanding shares reacquired | 0.30% | 0.10% | ||||
Shares reacquired during period, value | $ | $ 5,300,000 | $ 2,200,000 | ||||
Share price of treasury stock acquired during period (in usd per share) | $ / shares | $ 37.49 | $ 41.17 | ||||
Accumulated shares repurchased (shares) | shares | 1,040,226 | |||||
Accumulated average cost of share repurchase (in usd per share) | $ / shares | $ 33.33 | |||||
Remaining authorized repurchase amount | $ | $ 15,300,000 | |||||
Treasury stock (in shares) | shares | 25,043,337 | 24,902,579 | ||||
Preferred stock, shares authorized (in shares) | shares | 1,000,000 | 1,000,000 | ||||
Preferred stock, par value (in usd per share) | $ / shares | $ 0.001 | $ 0.001 | ||||
Preferred stock, shares issued (in shares) | shares | 0 | 0 | ||||
Preferred stock shares outstanding | shares | 0 | 0 | ||||
Fungible share pool, grant of full value share conversion ratio | 2.5 | |||||
Intrinsic value | $ / shares | $ 0 | |||||
Weighted average exercise prices of vested and exercisable options (in usd per share) | $ / shares | 37.94 | $ 36.59 | $ 34.81 | |||
Share price (in usd per share) | $ / shares | $ 38.70 | |||||
Aggregate intrinsic value of vested options | $ | $ 1,500,000 | |||||
Aggregate intrinsic value of options | $ | $ 1,500,000 | |||||
Minimum | Employee stock option | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Vesting period | 4 years | |||||
Expiration period | 7 years | |||||
Minimum | Restricted stock units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Vesting period | 1 year | |||||
Maximum | Employee stock option | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Expiration period | 10 years | |||||
Maximum | Restricted stock units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Vesting period | 4 years | |||||
2015 Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Authorized repurchase amount | $ | $ 50,000,000 | |||||
Common stock, par value (in usd per share) | $ / shares | $ 0.001 | |||||
Comprehensive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Amended increase in shares reserved for issuance (in shares) | shares | 2,500,000 | |||||
Shares available for grant (in shares) | shares | 2,688,416 |
Shareholders' Equity and Shar_4
Shareholders' Equity and Share-Based Compensation - Outstanding Stock Units and Stock Options under Comprehensive Plan (Details) - shares | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Stock options (in shares) | 1,032,128 | 916,287 | 908,557 |
RSUs related to incentive compensation (in shares) | 834,981 | 823,393 | |
Total (in shares) | 1,909,993 | 1,783,756 | 1,851,715 |
Director | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Common stock units related to deferred compensation (in shares) | 26,313 | 23,609 | 28,526 |
Employee | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Common stock units related to deferred compensation (in shares) | 16,571 | 20,467 | 25,194 |
Restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
RSUs related to incentive compensation (in shares) | 834,981 | 823,393 | 889,438 |
Shareholders' Equity and Shar_5
Shareholders' Equity and Share-Based Compensation - Stock Option Activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Weighted Average Option Price per Share | |||
Weighted Average Option Price per Share, Beginning Balance (in usd per share) | $ 38.99 | ||
Weighted Average Option Price per Share, Options Granted (in usd per share) | 40.10 | ||
Weighted Average Option Price per Share, Options Vested (in usd per share) | 41.27 | ||
Weighted Average Option Price per Share, Options Exercised (in usd per share) | 31.35 | ||
Weighted Average Option Price per Share, Options Forfeited (in usd per share) | 41.39 | ||
Weighted Average Option Price per Share, Options Expired (in usd per share) | 42.23 | ||
Weighted Average Option Price per Share, Ending Balance (in usd per share) | $ 39.10 | $ 38.99 | |
Outstanding | |||
Options Outstanding, Beginning Balance (in shares) | 916,287 | 908,557 | |
Options Outstanding, Granted (in shares) | 183,272 | 234,248 | 282,040 |
Options Outstanding, Vested (in shares) | 0 | ||
Options Outstanding, Exercised (in shares) | (8,015) | ||
Options Outstanding, Forfeited (in shares) | (49,411) | ||
Options Outstanding, Expired (in shares) | (10,005) | ||
Options Outstanding, Ending Balance (in shares) | 1,032,128 | 916,287 | 908,557 |
Vested and Exercisable | |||
Options Vested and Exercisable, Beginning Balance (in shares) | 437,197 | ||
Options Vested and Exercisable, Granted (in shares) | 0 | ||
Options Vested and Exercisable, Vested (in shares) | 163,519 | ||
Options Vested and Exercisable, Exercisable (in shares) | (8,015) | ||
Options Vested and Exercisable, Forfeited (in shares) | 0 | ||
Options Vested and Exercisable, Expired (in shares) | 0 | ||
Options Vested and Exercisable, Ending Balance (in shares) | 592,701 | 437,197 | |
Minimum | |||
Weighted Average Option Price per Share | |||
Weighted Average Option Price per Share, Beginning Balance (in usd per share) | $ 28.88 | ||
Weighted Average Option Price per Share, Options Granted (in usd per share) | 40.1 | ||
Weighted Average Option Price per Share, Options Vested (in usd per share) | 28.88 | ||
Weighted Average Option Price per Share, Options Exercised (in usd per share) | 31.01 | ||
Weighted Average Option Price per Share, Options Forfeited (in usd per share) | 41.1 | ||
Weighted Average Option Price per Share, Options Expired (in usd per share) | 41.83 | ||
Weighted Average Option Price per Share, Ending Balance (in usd per share) | 28.88 | $ 28.88 | |
Maximum | |||
Weighted Average Option Price per Share | |||
Weighted Average Option Price per Share, Beginning Balance (in usd per share) | 42.95 | ||
Weighted Average Option Price per Share, Options Granted (in usd per share) | 40.1 | ||
Weighted Average Option Price per Share, Options Vested (in usd per share) | 42.95 | ||
Weighted Average Option Price per Share, Options Exercised (in usd per share) | 32.35 | ||
Weighted Average Option Price per Share, Options Forfeited (in usd per share) | 42.73 | ||
Weighted Average Option Price per Share, Options Expired (in usd per share) | 42.73 | ||
Weighted Average Option Price per Share, Ending Balance (in usd per share) | $ 42.95 | $ 42.95 |
Shareholders' Equity and Shar_6
Shareholders' Equity and Share-Based Compensation - Stock Option Information by Ranges of Exercise Prices (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Options (in shares) | 1,032,128 | 916,287 | 908,557 |
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 39.10 | $ 38.99 | |
Total Outstanding Options, Weighted Average Remaining Term | 6 years 6 months 29 days | ||
Vested and Exercisable Options (in shares) | 592,701 | 437,197 | |
Vested and Exercisable Options, Weighted Average Option Price per Share (in usd per share) | $ 37.94 | $ 36.59 | $ 34.81 |
Vested and Exercisable Options, Weighted Average Remaining Term | 5 years 4 months 28 days | ||
Minimum | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 28.88 | 28.88 | |
Maximum | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 42.95 | $ 42.95 | |
Range One | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Options (in shares) | 195,192 | ||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 30.81 | ||
Total Outstanding Options, Weighted Average Remaining Term | 3 years 7 months 2 days | ||
Vested and Exercisable Options (in shares) | 195,192 | ||
Vested and Exercisable Options, Weighted Average Option Price per Share (in usd per share) | $ 30.81 | ||
Vested and Exercisable Options, Weighted Average Remaining Term | 3 years 7 months 2 days | ||
Range One | Minimum | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 28.88 | ||
Range One | Maximum | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 33.41 | ||
Range Two | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Options (in shares) | 687,556 | ||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 40.61 | ||
Total Outstanding Options, Weighted Average Remaining Term | 7 years 6 months 7 days | ||
Vested and Exercisable Options (in shares) | 285,474 | ||
Vested and Exercisable Options, Weighted Average Option Price per Share (in usd per share) | $ 40.84 | ||
Vested and Exercisable Options, Weighted Average Remaining Term | 6 years 4 months 6 days | ||
Range Two | Minimum | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 36.04 | ||
Range Two | Maximum | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 41.95 | ||
Range Three | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Options (in shares) | 149,380 | ||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 42.95 | ||
Total Outstanding Options, Weighted Average Remaining Term | 6 years 2 months 4 days | ||
Vested and Exercisable Options (in shares) | 112,035 | ||
Vested and Exercisable Options, Weighted Average Option Price per Share (in usd per share) | $ 42.95 | ||
Vested and Exercisable Options, Weighted Average Remaining Term | 6 years 2 months 4 days | ||
Range Three | Minimum | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 42.73 | ||
Range Three | Maximum | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 42.73 |
Shareholders' Equity and Shar_7
Shareholders' Equity and Share-Based Compensation - Restricted Stock Activity (Details) | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Units | |
Beginning balance (in shares) | shares | 823,393 |
Granted (in shares) | shares | 205,474 |
Adjustment for performance achievement (in shares) | shares | 14,272 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | (47,214) |
Distributed (in shares) | shares | (160,944) |
Ending balance (in shares) | shares | 834,981 |
Weighted Average Grant Date Fair Value per Unit | |
Beginning balance (in usd per share) | $ / shares | $ 33.88 |
Granted (in usd per share) | $ / shares | 41.29 |
Adjustment for performance achievement (in usd per share) | $ / shares | 45.01 |
Vested (in usd per share) | $ / shares | 0 |
Forfeited (in usd per share) | $ / shares | 43.08 |
Distributed (in usd per share) | $ / shares | 38.43 |
Ending balance (in usd per share) | $ / shares | $ 34.50 |
Units | |
Beginning balance (in shares) | shares | 484,984 |
Granted (in shares) | shares | 0 |
Adjustment for performance achievement (in shares) | shares | 0 |
Vested (in shares) | shares | 145,319 |
Forfeited (in shares) | shares | 0 |
Distributed (in shares) | shares | (160,944) |
Ending balance (in shares) | shares | 469,359 |
Weighted Average Grant Date Fair Value per Unit | |
Beginning balance (in usd per share) | $ / shares | $ 27.48 |
Granted (in usd per share) | $ / shares | 0 |
Adjustment for performance achievement (in usd per share) | $ / shares | 0 |
Vested (in usd per share) | $ / shares | 42.15 |
Forfeited (in usd per share) | $ / shares | 0 |
Distributed (in usd per share) | $ / shares | 0 |
Ending balance (in usd per share) | $ / shares | $ 28.27 |
Statutory Information and Div_3
Statutory Information and Dividend Restrictions -Reconciliations of Statutory Capital, Surplus and Net Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Insurance [Abstract] | |||
Consolidated net income, statutory basis | $ 117.2 | $ 141.9 | $ 62.3 |
Consolidated capital and surplus, statutory basis | $ 1,017.4 | $ 937.3 | $ 868.8 |
Statutory Information and Div_4
Statutory Information and Dividend Restrictions - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Insurance [Abstract] | ||
Minimum statutory-basis capital and surplus | $ 123 | $ 113.2 |
Schedule of Insured Financial Obligations | ||
Fair Value | 6,239.3 | 6,345.3 |
Governmental agencies as required by law in various states | ||
Schedule of Insured Financial Obligations | ||
Fair Value | $ 26.2 | $ 26.9 |
Retirement Plans and Other Po_3
Retirement Plans and Other Postretirement Benefits - Narrative (Details) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2022USD ($) | Dec. 31, 2021USD ($)plan | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2006USD ($) | |
Defined Benefit Plan Disclosure | |||||
Number of supplemental defined benefit plans frozen | plan | 2 | ||||
Pension cost (credit) | $ 9.2 | $ 10 | $ 9.3 | ||
Health reimbursement account, amount | 1.2 | $ 7.3 | |||
Health reimbursement accounts funding | $ 0 | 0.1 | 0.1 | ||
Equity securities | |||||
Defined Benefit Plan Disclosure | |||||
Defined benefit pension plan to approximate allocation | 35.00% | ||||
Fixed income funds | |||||
Defined Benefit Plan Disclosure | |||||
Defined benefit pension plan to approximate allocation | 65.00% | ||||
Defined Benefit Plan | |||||
Defined Benefit Plan Disclosure | |||||
Expected amortization of gain (loss) next year | $ (0.4) | (0.3) | (0.3) | ||
Defined Benefit Plan | Scenario, Plan | Subsequent Event | |||||
Defined Benefit Plan Disclosure | |||||
Expected amortization of gain (loss) next year | $ 0.3 | ||||
Supplemental Defined Benefit Plans | |||||
Defined Benefit Plan Disclosure | |||||
Expected amortization of gain (loss) next year | $ (0.4) | $ (0.3) | $ (0.3) | ||
Supplemental Defined Benefit Plans | Scenario, Plan | Subsequent Event | |||||
Defined Benefit Plan Disclosure | |||||
Expected amortization of gain (loss) next year | $ 0.4 | ||||
Qualified Plan | |||||
Defined Benefit Plan Disclosure | |||||
Number of retirement plans | plan | 2 | ||||
Qualified Plan | 401(k) plan | Defined Benefit Plan | |||||
Defined Benefit Plan Disclosure | |||||
Frozen supplemental defined benefit plans, vesting percentage | 100.00% | ||||
Employer matching contribution as percent of employees' gross pay | 3.00% | ||||
Percentage of employer match | 5.00% | ||||
Vesting period for Company contributions | 5 years | ||||
Nonqualified Plan | |||||
Defined Benefit Plan Disclosure | |||||
Number of retirement plans | plan | 3 |
Retirement Plans and Other Po_4
Retirement Plans and Other Postretirement Benefits - Contributions and Plan Assets (Details) - Pension Plan - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Defined Benefit Plan Disclosure | ||||
Contributions to employees' accounts | $ 0 | $ 0 | $ 0 | |
Total assets at the end of the year | 19.8 | 22 | 23.2 | $ 22.1 |
Qualified Plan | 401(k) plan | ||||
Defined Benefit Plan Disclosure | ||||
Contributions to employees' accounts | 8.2 | 8.2 | 8.2 | |
Total assets at the end of the year | 246.9 | 228.4 | 206.2 | |
Nonqualified Plan | ||||
Defined Benefit Plan Disclosure | ||||
Total assets at the end of the year | 0 | 0 | 0 | |
Contributions to employees' accounts | $ 0.1 | $ 0.1 | $ 0.1 |
Retirement Plans and Other Po_5
Retirement Plans and Other Postretirement Benefits - Defined Benefit Plan and Supplemental Retirement Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Defined Benefit Plan | |||
Change in benefit obligation: | |||
Projected benefit obligation at beginning of year | $ 24.3 | $ 24.8 | $ 25.1 |
Service cost | 0.6 | 0.7 | 0.7 |
Interest cost | 0.5 | 0.7 | 1 |
Actuarial loss (gain) | (0.6) | 1 | 0 |
Benefits paid | (2.6) | (1.5) | (2) |
Settlements | 0 | (1.4) | 0 |
Projected benefit obligation at end of year | 22.2 | 24.3 | 24.8 |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 22 | 23.2 | 22.1 |
Actual return on plan assets | 1 | 2.3 | 3.5 |
Employer contributions | 0 | 0 | 0 |
Benefits paid | (2.6) | (1.5) | (2) |
Expenses paid | (0.6) | (0.6) | (0.4) |
Settlements | 0 | (1.4) | 0 |
Fair value of plan assets at end of year | 19.8 | 22 | 23.2 |
Funded status | (2.4) | (2.3) | (1.6) |
Prepaid (accrued) benefit expense | 4.9 | 5.5 | 6.7 |
Total amount recognized in Consolidated Balance Sheets, all in Other liabilities | (2.4) | (2.3) | (1.7) |
Amounts recognized in accumulated other comprehensive income (loss) (AOCI): | |||
Prior service cost | 0 | 0 | 0 |
Net actuarial loss | (7.3) | (7.8) | (8.3) |
Total amount recognized in AOCI | (7.3) | (7.8) | (8.3) |
Information for pension plans with an accumulated benefit obligation greater than plan assets: | |||
Projected benefit obligation | 22.2 | 24.3 | 24.8 |
Accumulated benefit obligation | 22.2 | 24.3 | 24.8 |
Fair value of plan assets | 19.8 | 22 | 23.2 |
Supplemental Defined Benefit Plans | |||
Change in benefit obligation: | |||
Projected benefit obligation at beginning of year | 15.7 | 15.2 | 15.4 |
Service cost | 0 | 0 | 0 |
Interest cost | 0.3 | 0.5 | 0.6 |
Actuarial loss (gain) | (0.2) | 1.3 | 0.5 |
Benefits paid | (1.3) | (1.3) | (1.3) |
Settlements | 0 | 0 | 0 |
Projected benefit obligation at end of year | 14.5 | 15.7 | 15.2 |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 0 | 0 | 0 |
Actual return on plan assets | 0 | 0 | 0 |
Employer contributions | 1.3 | 1.3 | 1.3 |
Benefits paid | (1.3) | (1.3) | (1.3) |
Expenses paid | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 |
Fair value of plan assets at end of year | 0 | 0 | 0 |
Funded status | (14.5) | (15.7) | (15.2) |
Prepaid (accrued) benefit expense | 8.7 | (9.3) | (9.9) |
Total amount recognized in Consolidated Balance Sheets, all in Other liabilities | (14.5) | (15.7) | (15.2) |
Amounts recognized in accumulated other comprehensive income (loss) (AOCI): | |||
Prior service cost | 0 | 0 | 0 |
Net actuarial loss | (6.5) | (6.4) | (5.3) |
Total amount recognized in AOCI | (6.5) | (6.4) | (5.3) |
Information for pension plans with an accumulated benefit obligation greater than plan assets: | |||
Projected benefit obligation | 14.5 | 15.7 | 15.2 |
Accumulated benefit obligation | 14.5 | 15.7 | 15.2 |
Fair value of plan assets | $ 0 | $ 0 | $ 0 |
Retirement Plans and Other Po_6
Retirement Plans and Other Postretirement Benefits - Components of Net Periodic Cost, Changes in Plan Assets and Benefit Obligations, and AOCI Impacts (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Defined Benefit Plan | |||
Service cost: | |||
Benefit accrual | $ 0 | $ 0 | $ 0 |
Other expenses | 0.6 | 0.7 | 0.7 |
Interest cost | 0.5 | 0.7 | 1 |
Expected return on plan assets | (0.9) | (1) | (1.3) |
Settlement loss | 0 | 0.5 | 0 |
Amortization of: | |||
Prior service cost | 0 | 0 | 0 |
Actuarial loss | 0.4 | 0.3 | 0.3 |
Net periodic pension expense | 0.6 | 1.2 | 0.7 |
Changes in plan assets and benefit obligations included in other comprehensive income (loss): | |||
Prior service cost | 0 | 0 | 0 |
Net actuarial loss (gain) | (0.2) | 0.3 | (1.8) |
Amortization of: | |||
Prior service cost | 0 | 0 | 0 |
Actuarial loss | (0.4) | (0.8) | (0.3) |
Total recognized in other comprehensive income (loss) | $ (0.6) | $ (0.5) | $ (2.1) |
Weighted average assumptions used to determine expense: | |||
Discount rate | 2.08% | 3.10% | 4.20% |
Expected return on plan assets | 4.74% | 4.80% | 5.75% |
Weighted average assumptions used to determine benefit obligations as of December 31: | |||
Discount rate | 2.57% | 2.08% | 3.10% |
Expected return on plan assets | 4.74% | 4.80% | 5.75% |
Supplemental Defined Benefit Plans | |||
Service cost: | |||
Benefit accrual | $ 0 | $ 0 | $ 0 |
Other expenses | 0 | 0 | 0 |
Interest cost | 0.3 | 0.5 | 0.6 |
Expected return on plan assets | 0 | 0 | 0 |
Settlement loss | 0 | 0 | 0 |
Amortization of: | |||
Prior service cost | 0 | 0 | 0 |
Actuarial loss | 0.4 | 0.3 | 0.3 |
Net periodic pension expense | 0.7 | 0.8 | 0.9 |
Changes in plan assets and benefit obligations included in other comprehensive income (loss): | |||
Prior service cost | 0 | 0 | 0 |
Net actuarial loss (gain) | (0.2) | 1.3 | 0.5 |
Amortization of: | |||
Prior service cost | 0 | 0 | 0 |
Actuarial loss | (0.4) | (0.3) | (0.2) |
Total recognized in other comprehensive income (loss) | $ (0.6) | $ 1 | $ 0.3 |
Weighted average assumptions used to determine expense: | |||
Discount rate | 2.08% | 3.10% | 4.20% |
Weighted average assumptions used to determine benefit obligations as of December 31: | |||
Discount rate | 2.57% | 2.08% | 3.10% |
Retirement Plans and Other Po_7
Retirement Plans and Other Postretirement Benefits - Fair Value of Plan Assets (Details) - Defined Benefit Plan - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Defined Benefit Plan Disclosure | ||||
Plan assets amount | $ 19.8 | $ 22 | $ 23.2 | $ 22.1 |
Equity security funds, United States | ||||
Defined Benefit Plan Disclosure | ||||
Plan assets amount | 3.8 | 4.4 | ||
Equity security funds, International | ||||
Defined Benefit Plan Disclosure | ||||
Plan assets amount | 3.3 | 4.3 | ||
Fixed income funds | ||||
Defined Benefit Plan Disclosure | ||||
Plan assets amount | 12.4 | 13.1 | ||
Short-term investment funds | ||||
Defined Benefit Plan Disclosure | ||||
Plan assets amount | 0.3 | 0.2 | ||
Level 1 | ||||
Defined Benefit Plan Disclosure | ||||
Plan assets amount | 0.3 | 0.2 | ||
Level 1 | Equity security funds, United States | ||||
Defined Benefit Plan Disclosure | ||||
Plan assets amount | 0 | 0 | ||
Level 1 | Equity security funds, International | ||||
Defined Benefit Plan Disclosure | ||||
Plan assets amount | 0 | 0 | ||
Level 1 | Fixed income funds | ||||
Defined Benefit Plan Disclosure | ||||
Plan assets amount | 0 | 0 | ||
Level 1 | Short-term investment funds | ||||
Defined Benefit Plan Disclosure | ||||
Plan assets amount | 0.3 | 0.2 | ||
Level 2 | ||||
Defined Benefit Plan Disclosure | ||||
Plan assets amount | 19.5 | 21.7 | ||
Level 2 | Equity security funds, United States | ||||
Defined Benefit Plan Disclosure | ||||
Plan assets amount | 3.8 | 4.3 | ||
Level 2 | Equity security funds, International | ||||
Defined Benefit Plan Disclosure | ||||
Plan assets amount | 3.3 | 4.3 | ||
Level 2 | Fixed income funds | ||||
Defined Benefit Plan Disclosure | ||||
Plan assets amount | 12.4 | 13.1 | ||
Level 2 | Short-term investment funds | ||||
Defined Benefit Plan Disclosure | ||||
Plan assets amount | 0 | 0 | ||
Level 3 | ||||
Defined Benefit Plan Disclosure | ||||
Plan assets amount | 0 | 0 | ||
Level 3 | Equity security funds, United States | ||||
Defined Benefit Plan Disclosure | ||||
Plan assets amount | 0 | 0 | ||
Level 3 | Equity security funds, International | ||||
Defined Benefit Plan Disclosure | ||||
Plan assets amount | 0 | 0 | ||
Level 3 | Fixed income funds | ||||
Defined Benefit Plan Disclosure | ||||
Plan assets amount | 0 | 0 | ||
Level 3 | Short-term investment funds | ||||
Defined Benefit Plan Disclosure | ||||
Plan assets amount | $ 0 | $ 0 |
Retirement Plans and Other Po_8
Retirement Plans and Other Postretirement Benefits - Contributions (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Defined Benefit Plan | |
Defined Benefit Plan Disclosure | |
Minimum funding requirement | $ 0 |
Expected contributions (approximations) | 0 |
Supplemental Defined Benefit Plans | |
Defined Benefit Plan Disclosure | |
Minimum funding requirement | 0 |
Expected contributions (approximations) | $ 1.3 |
Retirement Plans and Other Po_9
Retirement Plans and Other Postretirement Benefits - Estimated Future Benefit Payments (Details) $ in Millions | Dec. 31, 2021USD ($) |
Defined Benefit Plan | |
Defined Benefit Plan, Expected Future Benefit Payment | |
2022 | $ 2.3 |
2023 | 2.1 |
2024 | 2.1 |
2025 | 2 |
2026 | 1.8 |
2027-2031 | 6.8 |
Supplemental Defined Benefit Plans | |
Defined Benefit Plan, Expected Future Benefit Payment | |
2022 | 1.3 |
2023 | 1.3 |
2024 | 1.2 |
2025 | 1.2 |
2026 | 1.2 |
2027-2031 | $ 5.1 |
Contingencies and Commitments (
Contingencies and Commitments (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Commitments and Contingencies Disclosure [Abstract] | ||
Remaining minimum amount committed | $ 858.1 | $ 571.9 |
Comprehensive Income (Loss) a_3
Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss) - Components of Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Equity [Abstract] | |||
Net income | $ 142.8 | $ 133.3 | $ 184.4 |
Change in net unrealized investment gains (losses) on fixed maturity securities: | |||
Net unrealized investment gains (losses) on securities arising during the period | (104.9) | 184 | 327.3 |
Less: reclassification adjustment for net investment gains (losses) included in income before income tax | (8.5) | 11.2 | 157.4 |
Total, before tax | (96.4) | 172.8 | 169.9 |
Income tax expense (benefit) | (20.8) | 36.9 | 36.4 |
Total, net of tax | (75.6) | 135.9 | 133.5 |
Change in net funded status of benefit plans: | |||
Before tax | 1.2 | (0.5) | 1.8 |
Income tax expense (benefit) | 0.2 | (0.1) | 0.4 |
Total, net of tax | 1 | (0.4) | 1.4 |
Comprehensive income | $ 68.2 | $ 268.8 | $ 319.3 |
Comprehensive Income (Loss) a_4
Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss) - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
AOCI Attributable to Parent, Net of Tax | |||
Beginning balance | $ 1,790.1 | $ 1,567.3 | |
Other comprehensive income (loss) before reclassifications | (81.3) | 144.3 | $ 259.3 |
Amounts reclassified from AOCI | 6.7 | (8.8) | (124.4) |
Net current period other comprehensive income (loss) | (74.6) | 135.5 | 134.9 |
Ending balance | 1,807.4 | 1,790.1 | 1,567.3 |
Reclassification adjustment for net investment gains (losses) included in income before income tax | (8.5) | 11.2 | 157.4 |
Other tax expense (benefit) | (1.8) | 2.4 | 33 |
Total | |||
AOCI Attributable to Parent, Net of Tax | |||
Beginning balance | 355.1 | 219.6 | 84.7 |
Ending balance | 280.5 | 355.1 | 219.6 |
Net unrealized investment gains (losses) on securities | |||
AOCI Attributable to Parent, Net of Tax | |||
Beginning balance | 366.3 | 230.4 | 96.9 |
Other comprehensive income (loss) before reclassifications | (82.3) | 144.7 | 257.9 |
Amounts reclassified from AOCI | 6.7 | (8.8) | (124.4) |
Net current period other comprehensive income (loss) | (75.6) | 135.9 | 133.5 |
Ending balance | 290.7 | 366.3 | 230.4 |
Net Funded Status of Benefit Plans | |||
AOCI Attributable to Parent, Net of Tax | |||
Beginning balance | (11.2) | (10.8) | (12.2) |
Other comprehensive income (loss) before reclassifications | 1 | (0.4) | 1.4 |
Amounts reclassified from AOCI | 0 | 0 | 0 |
Net current period other comprehensive income (loss) | 1 | (0.4) | 1.4 |
Ending balance | $ (10.2) | $ (11.2) | $ (10.8) |
Supplemental Consolidated Cas_3
Supplemental Consolidated Cash and Cash Flow Information - Summary of Cash and Restricted Cash (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | ||||
Cash | $ 133 | $ 21.8 | $ 25.2 | |
Restricted cash | 0.7 | 0.5 | 0.3 | |
Total cash and restricted cash shown in the Consolidated Statements of Cash Flows | 133.7 | 22.3 | 25.5 | $ 11.9 |
Interest | 13.5 | 15.5 | 14.1 | |
Income taxes | $ 23.7 | $ 17.3 | $ 22.9 |
Supplemental Consolidated Cas_4
Supplemental Consolidated Cash and Cash Flow Information - Narrative (Details) - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2021 | Jun. 30, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |||
Transfer of investments and policy loans | $ 2.1 | ||
Reinsurance block of in-force fixed and variable annuity business | $ 2.9 | $ 3.2 | $ 2.9 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 12 Months Ended |
Dec. 31, 2021segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 5 |
Number of operating segments | 4 |
Segment Information - Summarize
Segment Information - Summarized Financial Information by Segment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Summarized financial information for these segments | |||
Premiums and contract charges earned | $ 889.6 | $ 930.7 | $ 898 |
Net investment income | 422.5 | 357.6 | 365.1 |
Net income | 142.8 | 133.3 | 184.4 |
Assets | 14,383.9 | 13,471.8 | 12,478.7 |
Intersegment eliminations | |||
Summarized financial information for these segments | |||
Net investment income | (2.3) | (2.2) | (1.5) |
Assets | (64.8) | (90.1) | (64.1) |
Property & Casualty | Operating Segments | |||
Summarized financial information for these segments | |||
Premiums and contract charges earned | 617.4 | 650.1 | 683.5 |
Net investment income | 61.1 | 42.6 | 41.7 |
Net income | 57 | 76.5 | 54.3 |
Assets | 1,243.4 | 1,324.9 | 1,327.1 |
Supplemental | Operating Segments | |||
Summarized financial information for these segments | |||
Premiums and contract charges earned | 125.3 | 130.7 | 65.8 |
Net investment income | 24.8 | 17.8 | 7.5 |
Net income | 46.3 | 43.1 | 18 |
Assets | 854.9 | 811.5 | 747.6 |
Retirement | Operating Segments | |||
Summarized financial information for these segments | |||
Premiums and contract charges earned | 38.5 | 29.7 | 29.1 |
Net investment income | 255.9 | 229.8 | 245.5 |
Net income | 52 | 20.1 | (4.8) |
Assets | 9,939.1 | 9,198.7 | 8,330.1 |
Life | Operating Segments | |||
Summarized financial information for these segments | |||
Premiums and contract charges earned | 108.4 | 120.2 | 119.6 |
Net investment income | 83.1 | 69.8 | 72 |
Net income | 16.1 | 10.4 | 17.6 |
Assets | 2,129.5 | 2,044.5 | 1,965 |
Corporate & Other | |||
Summarized financial information for these segments | |||
Net investment income | (0.1) | (0.2) | (0.1) |
Net income | (28.6) | (16.8) | 99.3 |
Assets | $ 281.8 | $ 182.3 | $ 173 |
Segment Information - Additiona
Segment Information - Additional Significant Financial Information by Segment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting Information | |||
DAC unlocking and amortization expense | $ 94.7 | $ 99.9 | $ 109.2 |
Income tax expense (benefit) | 32.1 | 26.3 | 52 |
Property & Casualty | Operating Segments | |||
Segment Reporting Information | |||
DAC unlocking and amortization expense | 67.7 | 74.4 | 79.5 |
Income tax expense (benefit) | 13.2 | 15.4 | 14 |
Supplemental | Operating Segments | |||
Segment Reporting Information | |||
DAC unlocking and amortization expense | 1.2 | 1.3 | 0.4 |
Income tax expense (benefit) | 12.7 | 12 | 5.1 |
Retirement | Operating Segments | |||
Segment Reporting Information | |||
DAC unlocking and amortization expense | 18.5 | 16.7 | 21.5 |
Income tax expense (benefit) | 9.9 | 2.1 | 33.8 |
Life | Operating Segments | |||
Segment Reporting Information | |||
DAC unlocking and amortization expense | 7.3 | 7.5 | 7.8 |
Income tax expense (benefit) | 3.6 | 2.4 | 4.9 |
Corporate & Other | Corporate and Other | |||
Segment Reporting Information | |||
Income tax expense (benefit) | $ (7.3) | $ (5.6) | $ (5.8) |
Schedule I Summary of Investm_2
Schedule I Summary of Investments-Other Than Investments in Related Parties (Details) $ in Millions | Dec. 31, 2021USD ($) |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties | |
Cost | $ 7,005 |
Amount Shown in Balance Sheet | 7,449.5 |
Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties | |
Cost | 5,797.7 |
Fair Value | 6,239.3 |
Amount Shown in Balance Sheet | 6,239.3 |
Equity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties | |
Cost | 147.2 |
Fair Value | 147.2 |
Amount Shown in Balance Sheet | 147.2 |
U.S. Government and federally sponsored agency obligations | Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties | |
Cost | 776.4 |
Fair Value | 828.4 |
Amount Shown in Balance Sheet | 828.4 |
States, municipalities and political subdivisions | Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties | |
Cost | 1,519.7 |
Fair Value | 1,703.4 |
Amount Shown in Balance Sheet | 1,703.4 |
Foreign government bonds | Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties | |
Cost | 40.2 |
Fair Value | 43.6 |
Amount Shown in Balance Sheet | 43.6 |
Public utilities | Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties | |
Cost | 91.8 |
Fair Value | 100.4 |
Amount Shown in Balance Sheet | 100.4 |
All other corporate bonds | Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties | |
Cost | 2,091.6 |
Fair Value | 2,251 |
Amount Shown in Balance Sheet | 2,251 |
Asset-backed securities | Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties | |
Cost | 935.4 |
Fair Value | 943.2 |
Amount Shown in Balance Sheet | 943.2 |
Residential mortgage-backed securities (non-agency) | Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties | |
Cost | 21.5 |
Fair Value | 21.6 |
Amount Shown in Balance Sheet | 21.6 |
Commercial mortgage-backed securities | Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties | |
Cost | 286.7 |
Fair Value | 310.3 |
Amount Shown in Balance Sheet | 310.3 |
Redeemable preferred stocks | Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties | |
Cost | 34.4 |
Fair Value | 37.4 |
Amount Shown in Balance Sheet | 37.4 |
Industrial, miscellaneous and all other | Equity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties | |
Cost | 4.7 |
Fair Value | 4.7 |
Amount Shown in Balance Sheet | 4.7 |
Banking & finance and insurance companies | Equity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties | |
Cost | 1.4 |
Fair Value | 1.4 |
Amount Shown in Balance Sheet | 1.4 |
Public utilities | Equity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties | |
Cost | 0.2 |
Fair Value | 0.2 |
Amount Shown in Balance Sheet | 0.2 |
Non-redeemable preferred stocks | Equity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties | |
Cost | 119.4 |
Fair Value | 119.4 |
Amount Shown in Balance Sheet | 119.4 |
Closed-end fund | Equity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties | |
Cost | 21.5 |
Fair Value | 21.5 |
Amount Shown in Balance Sheet | 21.5 |
Limited partnership interests | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties | |
Cost | 712.8 |
Amount Shown in Balance Sheet | 712.8 |
Short-term Investments | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties | |
Cost | 157.8 |
Amount Shown in Balance Sheet | 157.8 |
Policy loans | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties | |
Cost | 142.1 |
Amount Shown in Balance Sheet | 142.1 |
Derivatives | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties | |
Cost | 7.8 |
Fair Value | 10.7 |
Amount Shown in Balance Sheet | 10.7 |
Mortgage loans | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties | |
Cost | 6.7 |
Amount Shown in Balance Sheet | 6.7 |
Other | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties | |
Cost | 32.9 |
Amount Shown in Balance Sheet | $ 32.9 |
Schedule II Condensed Financi_2
Schedule II Condensed Financial Information of Registrant - Condensed Balance Sheet (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
ASSETS | |||
Investments in subsidiaries | $ 712.8 | $ 449 | |
Other assets | 441.3 | 443.2 | |
Total assets | 14,383.9 | 13,471.8 | $ 12,478.7 |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Short-term debt | 249 | 135 | |
Long-term debt | 253.6 | 302.3 | |
Other liabilities | 428.2 | 453.1 | |
Total liabilities | 12,576.5 | 11,681.7 | |
Preferred stock, $0.001 par value, authorized 1,000,000 shares; none issued | 0 | 0 | |
Common stock, $1,000 par value, authorized 75,000,000 shares; issued, 2021, 66,436,821; 2020, 66,316,797 | 0.1 | 0.1 | |
Additional paid-in capital | 495.3 | 488.4 | |
Retained earnings | 1,524.9 | 1,434.6 | |
Accumulated other comprehensive income (loss), net of taxes: | |||
Net unrealized investment gains on fixed maturity securities | 290.7 | 366.3 | |
Net funded status of benefit plans | (10.2) | (11.2) | |
Treasury stock, at cost, 2021, 25,043,337 shares; 2020, 24,902,579 shares | (493.4) | (488.1) | |
Total shareholders' equity | 1,807.4 | 1,790.1 | $ 1,567.3 |
Total liabilities and shareholders' equity | 14,383.9 | 13,471.8 | |
Parent company | |||
ASSETS | |||
Investments and cash | 115.3 | 4.1 | |
Investments in subsidiaries | 2,191.3 | 2,121 | |
Other assets | 11.3 | 58.9 | |
Total assets | 2,317.9 | 2,184 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Short-term debt | 249 | 135 | |
Long-term debt | 248.6 | 248.3 | |
Other liabilities | 12.9 | 10.6 | |
Total liabilities | 510.5 | 393.9 | |
Preferred stock, $0.001 par value, authorized 1,000,000 shares; none issued | 0 | 0 | |
Common stock, $1,000 par value, authorized 75,000,000 shares; issued, 2021, 66,436,821; 2020, 66,316,797 | 0.1 | 0.1 | |
Additional paid-in capital | 495.3 | 488.4 | |
Retained earnings | 1,524.9 | 1,434.6 | |
Accumulated other comprehensive income (loss), net of taxes: | |||
Net unrealized investment gains on fixed maturity securities | 290.7 | 366.3 | |
Net funded status of benefit plans | (10.2) | (11.2) | |
Treasury stock, at cost, 2021, 25,043,337 shares; 2020, 24,902,579 shares | (493.4) | (488.1) | |
Total shareholders' equity | 1,807.4 | 1,790.1 | |
Total liabilities and shareholders' equity | $ 2,317.9 | $ 2,184 |
Schedule II Condensed Financi_3
Schedule II Condensed Financial Information of Registrant - Condensed Balance Sheet (Additional Information) (Details) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Condensed Financial Statements, Captions [Line Items] | |||
Preferred stock, par value (in usd per share) | $ 0.001 | $ 0.001 | |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 | |
Preferred stock, shares issued (in shares) | 0 | 0 | |
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 75,000,000 | 75,000,000 | |
Common stock, shares issued (in shares) | 66,436,821 | 66,316,797 | |
Treasury stock (in shares) | 25,043,337 | 24,902,579 | |
Parent company | |||
Condensed Financial Statements, Captions [Line Items] | |||
Preferred stock, par value (in usd per share) | $ 1,000 | $ 1,000 | |
Preferred stock, shares authorized (in shares) | 1,000,000,000,000 | 1,000,000,000,000 | |
Preferred stock, shares issued (in shares) | 0 | 0 | |
Common stock, par value (in usd per share) | $ 1,000 | $ 1,000 | |
Common stock, shares authorized (in shares) | 75,000,000,000,000 | 75,000,000,000,000 | |
Common stock, shares issued (in shares) | 66,436,821,000,000 | 66,316,797,000,000 | |
Treasury stock (in shares) | 25,043,337,000,000 | 24,902,579,000,000 |
Schedule II Condensed Financi_4
Schedule II Condensed Financial Information of Registrant - Condensed Statements of Operations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues | |||
Net investment income | $ 422.5 | $ 357.6 | $ 365.1 |
Net investment gains (losses) | (11) | (2.3) | 153.3 |
Total revenues | 1,330.1 | 1,310.4 | 1,430.5 |
Expenses | |||
Interest expense | 13.9 | 15.2 | 15.6 |
Total benefits, losses and expenses | 1,155.2 | 1,150.8 | 1,194.1 |
Income tax expense (benefit) | 32.1 | 26.3 | 52 |
Net income | 142.8 | 133.3 | 184.4 |
Parent company | |||
Revenues | |||
Net investment income | (0.1) | (0.2) | (0.1) |
Net investment gains (losses) | 0 | 0 | 0 |
Total revenues | (0.1) | (0.2) | (0.1) |
Expenses | |||
Interest expense | 13.8 | 14.8 | 14.3 |
Other | 11.2 | 5.7 | 12.6 |
Total benefits, losses and expenses | 25 | 20.5 | 26.9 |
Loss before income tax benefit and equity in net earnings of subsidiaries | (25.1) | (20.7) | (27) |
Income tax expense (benefit) | (5.4) | (5.3) | (6) |
Loss before equity in net earnings of subsidiaries | (19.7) | (15.4) | (21) |
Equity in net earnings of subsidiaries | 162.5 | 148.7 | 205.4 |
Net income | $ 142.8 | $ 133.3 | $ 184.4 |
Schedule II Condensed Financi_5
Schedule II Condensed Financial Information of Registrant - Condensed Statements of Cash Flows (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities | |||
Net income | $ 142.8 | $ 133.3 | $ 184.4 |
Changes in: | |||
Other operating assets and liabilities | 8.1 | 0.6 | 47.4 |
Other | 3 | 8 | 6.4 |
Net cash provided by operating activities | 204.9 | 259.8 | 127.6 |
Cash flows from investing activities | |||
Purchase of equity securities | (46.1) | (37.4) | (15.6) |
Change in short-term and other investments, net | (19) | 12.1 | (49.3) |
Acquisition of businesses | 0 | 0 | (421.5) |
Net cash (used in) provided by investing activities | (302) | (406.8) | 55.9 |
Cash flows from financing activities | |||
Dividends paid to shareholders | (51.4) | (49.6) | (47.3) |
Proceeds from exercise of stock options | 0.3 | 2.4 | 1.7 |
Withholding tax payments on RSUs tendered | (2) | (2.3) | (3.7) |
Net cash provided by (used in) financing activities | 208.5 | 143.8 | (169.9) |
Net increase (decrease) in cash | 111.4 | (3.2) | 13.6 |
Cash at beginning of year | 22.3 | 25.5 | 11.9 |
Cash at end of year | 133.7 | 22.3 | 25.5 |
Parent company | |||
Cash flows from operating activities | |||
Net income | 142.8 | 133.3 | 184.4 |
Equity in net earnings of subsidiaries | (162.5) | (148.7) | (205.4) |
Dividends received from subsidiaries | 66 | 167 | 363.2 |
Changes in: | |||
Income taxes | 1.8 | 2 | 3.4 |
Other operating assets and liabilities | 8.4 | (5.9) | 8.3 |
Other | 4.1 | 1.7 | 0.7 |
Net cash provided by operating activities | 60.6 | 149.4 | 354.6 |
Cash flows from investing activities | |||
Purchase of equity securities | 0 | 1 | 0 |
Change in short-term and other investments, net | 2.7 | (1.5) | 3.3 |
Capital contributions to subsidiaries | (5) | (97) | 0 |
Acquisition of businesses | 0 | 0 | (444.1) |
Net cash (used in) provided by investing activities | (2.3) | (97.5) | (440.8) |
Cash flows from financing activities | |||
Dividends paid to shareholders | (51.4) | (49.6) | (47.3) |
Principal borrowings on Bank Credit Facility | 114 | 0 | 135 |
Acquisition of treasury stock | (5.3) | (2.2) | 0 |
Proceeds from exercise of stock options | 0.3 | 2.4 | 1.7 |
Withholding tax payments on RSUs tendered | (2) | (2.3) | (3.7) |
Net cash provided by (used in) financing activities | 55.6 | (51.7) | 85.7 |
Net increase (decrease) in cash | 113.9 | 0.2 | (0.5) |
Cash at beginning of year | 0.3 | 0.1 | 0.6 |
Cash at end of year | $ 114.2 | $ 0.3 | $ 0.1 |
Schedule III and VI Supplemen_2
Schedule III and VI Supplementary Insurance Information Supplemental Information Concerning Property and Casualty Insurance Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information | |||
Deferred policy acquisition costs | $ 248,000 | $ 229,800 | $ 276,700 |
Future policy benefits, claims and claim expenses | 7,003,700 | 6,884,100 | 6,677,300 |
Unearned premiums | 255,100 | 264,500 | 279,200 |
Other policy claims and benefits payable | 945,900 | 751,300 | 647,300 |
Premium revenue/ premium earned | 889,600 | 930,700 | 898,000 |
Net investment income | 422,500 | 357,600 | 365,100 |
Benefits, claims and settlement expenses | 782,100 | 773,500 | 797,900 |
Amortization of deferred policy acquisition costs | 94,700 | 99,900 | 109,200 |
Other operating expenses | 278,400 | 277,400 | 287,000 |
Eliminations | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information | |||
Net investment income | (2,400) | (2,400) | (1,600) |
Other operating expenses | 24,400 | 20,700 | 26,400 |
Property & Casualty | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information | |||
Deferred policy acquisition costs | 24,400 | 26,100 | 28,600 |
Future policy benefits, claims and claim expenses | 362,400 | 372,100 | 387,000 |
Discount, if any, deducted in previous column | 0 | 0 | 0 |
Unearned premiums | 249,800 | 259,400 | 274,000 |
Other policy claims and benefits payable | 0 | 0 | 0 |
Premium revenue/ premium earned | 617,400 | 650,100 | 683,500 |
Net investment income | 61,100 | 42,600 | 41,700 |
Benefits, claims and settlement expenses | 447,900 | 431,000 | 475,600 |
Claims and claims adjustment expense incurred related to current year | 455,100 | 441,200 | 483,100 |
Claims and claims adjustment expense incurred related to prior years | (7,200) | (10,200) | (7,500) |
Amortization of deferred policy acquisition costs | 67,700 | 74,400 | 79,400 |
Other operating expenses | 97,200 | 97,700 | 105,500 |
Paid claims and claim adjustment expenses | 455,100 | 438,200 | 486,600 |
Premiums written | 607,800 | 635,500 | 683,100 |
Supplemental | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information | |||
Deferred policy acquisition costs | 4,200 | 4,300 | |
Future policy benefits, claims and claim expenses | 393,900 | 392,400 | |
Unearned premiums | 3,100 | 3,100 | |
Other policy claims and benefits payable | 72,500 | 41,500 | |
Premium revenue/ premium earned | 125,300 | 130,700 | |
Net investment income | 24,800 | 17,800 | |
Benefits, claims and settlement expenses | 40,000 | 43,100 | |
Amortization of deferred policy acquisition costs | 1,100 | 1,300 | |
Other operating expenses | 52,500 | 51,700 | |
Retirement | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information | |||
Deferred policy acquisition costs | 153,800 | 137,700 | 185,300 |
Future policy benefits, claims and claim expenses | 4,967,700 | 4,874,200 | 4,698,400 |
Unearned premiums | 700 | 700 | 800 |
Other policy claims and benefits payable | 869,800 | 706,300 | 643,800 |
Premium revenue/ premium earned | 38,500 | 29,700 | 29,100 |
Net investment income | 255,900 | 229,800 | 245,500 |
Benefits, claims and settlement expenses | 166,300 | 164,800 | 173,100 |
Amortization of deferred policy acquisition costs | 18,500 | 16,800 | 21,500 |
Other operating expenses | 67,500 | 72,000 | |
Life | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information | |||
Deferred policy acquisition costs | 65,600 | 61,700 | 60,800 |
Future policy benefits, claims and claim expenses | 1,279,700 | 1,245,400 | 1,201,600 |
Unearned premiums | 1,500 | 1,300 | 1,200 |
Other policy claims and benefits payable | 3,600 | 3,500 | 3,500 |
Premium revenue/ premium earned | 108,400 | 120,200 | 119,600 |
Net investment income | 83,100 | 69,800 | 72,000 |
Benefits, claims and settlement expenses | 127,900 | 134,600 | 124,500 |
Amortization of deferred policy acquisition costs | 7,400 | 7,400 | 7,800 |
Other operating expenses | $ 36,800 | $ 35,300 | $ 37,900 |
Schedule IV Reinsurance (Detail
Schedule IV Reinsurance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Life insurance in force | |||
Gross Amount | $ 20,440,300 | $ 19,821,200 | $ 19,179,800 |
Ceded to Other Companies | 4,533,600 | 4,619,100 | 4,813,200 |
Assumed from Other Companies | 0 | 0 | 0 |
Net Amount | $ 15,906,700 | $ 15,202,100 | $ 14,366,600 |
Percentage of Amount Assumed to Net | 0.00% | 0.00% | 0.00% |
Premiums | |||
Gross Amount | $ 913,200 | $ 949,500 | $ 917,600 |
Ceded to Other Companies | 33,300 | 28,700 | 30,400 |
Assumed from Other Companies | 9,700 | 9,900 | 10,800 |
Net Amount | $ 889,600 | $ 930,700 | $ 898,000 |
Percentage of Amount Assumed to Net | 1.10% | 1.10% | 1.20% |
Property & Casualty | |||
Premiums | |||
Gross Amount | $ 623,000 | $ 652,900 | $ 689,200 |
Ceded to Other Companies | 15,300 | 12,700 | 16,500 |
Assumed from Other Companies | 9,700 | 9,900 | 10,800 |
Net Amount | $ 617,400 | $ 650,100 | $ 683,500 |
Percentage of Amount Assumed to Net | 1.60% | 1.50% | 1.60% |
Supplemental | |||
Premiums | |||
Gross Amount | $ 125,600 | $ 130,900 | $ 65,900 |
Ceded to Other Companies | 300 | 200 | 100 |
Assumed from Other Companies | 0 | 0 | 0 |
Net Amount | $ 125,300 | $ 130,700 | $ 65,800 |
Percentage of Amount Assumed to Net | 0.00% | 0.00% | 0.00% |
Retirement | |||
Premiums | |||
Gross Amount | $ 48,700 | $ 38,000 | $ 35,600 |
Ceded to Other Companies | 10,200 | 8,300 | 6,500 |
Assumed from Other Companies | 0 | 0 | 0 |
Net Amount | $ 38,500 | $ 29,700 | $ 29,100 |
Percentage of Amount Assumed to Net | 0.00% | 0.00% | 0.00% |
Life | |||
Premiums | |||
Gross Amount | $ 115,900 | $ 127,700 | $ 126,900 |
Ceded to Other Companies | 7,500 | 7,500 | 7,300 |
Assumed from Other Companies | 0 | 0 | 0 |
Net Amount | $ 108,400 | $ 120,200 | $ 119,600 |
Percentage of Amount Assumed to Net | 0.00% | 0.00% | 0.00% |