Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 02, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | HANOVER INSURANCE GROUP, INC. | |
Entity Central Index Key | 944,695 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 42,543,286 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenues | ||||
Premiums | $ 1,160.9 | $ 1,150.1 | $ 3,457.7 | $ 3,566.9 |
Net investment income | 67.8 | 68.3 | 205.2 | 209.1 |
Net realized investment gains (losses): | ||||
Net realized gains from sales and other | 4.3 | 12.2 | 31 | 38.8 |
Net other-than-temporary impairment losses on investments recognized in earnings | (0.1) | (4.2) | (26) | (8.8) |
Total net realized investment gains | 4.2 | 8 | 5 | 30 |
Fees and other income | 8.3 | 7.1 | 22.9 | 23.3 |
Total revenues | 1,241.2 | 1,233.5 | 3,690.8 | 3,829.3 |
Losses and expenses | ||||
Losses and loss adjustment expenses | 692 | 690.7 | 2,121.3 | 2,208.7 |
Amortization of deferred acquisition costs | 257.9 | 259 | 771.4 | 781.6 |
Interest expense | 12.5 | 14.8 | 42.8 | 45.9 |
Gain on disposal of U.K. motor business | (0.1) | (1.3) | (37.7) | |
Net loss from repayment of debt | 5.6 | 86.1 | 24.1 | |
Other operating expenses | 154.8 | 153 | 445.4 | 466.7 |
Total losses and expenses | 1,117.1 | 1,123.1 | 3,465.7 | 3,489.3 |
Income before income taxes | 124.1 | 110.4 | 225.1 | 340 |
Income tax expense (benefit): | ||||
Current | 8 | 11.8 | 47.9 | 46.7 |
Deferred | 27.8 | 21.4 | 8.9 | 40.3 |
Total income tax expense | 35.8 | 33.2 | 56.8 | 87 |
Income from continuing operations | 88.3 | 77.2 | 168.3 | 253 |
Net gain from discontinued operations (net of tax (expense) benefit of $(0.1) and $0.3 for the three months ended September 30, 2016 and September 30, 2015 and $2.1 and $0.5 for the nine months ended September 30, 2016 and September 30, 2015, respectively) | 0.1 | 1.1 | 0.3 | 0.9 |
Net income | $ 88.4 | $ 78.3 | $ 168.6 | $ 253.9 |
Basic: | ||||
Income from continuing operations | $ 2.07 | $ 1.75 | $ 3.93 | $ 5.73 |
Net gain from discontinued operations | 0.03 | 0.01 | 0.02 | |
Net income per share | $ 2.07 | $ 1.78 | $ 3.94 | $ 5.75 |
Weighted average shares outstanding | 42.7 | 44 | 42.8 | 44.1 |
Diluted: | ||||
Income from continuing operations | $ 2.06 | $ 1.72 | $ 3.89 | $ 5.62 |
Net gain from discontinued operations | 0.02 | 0.02 | ||
Net income per share | $ 2.06 | $ 1.74 | $ 3.89 | $ 5.64 |
Weighted average shares outstanding | 43 | 44.9 | 43.3 | 45 |
Consolidated Statements of Inc3
Consolidated Statements of Income (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement [Abstract] | ||||
Net gain from discontinued operations, income tax benefit (expense) | $ (0.1) | $ 0.3 | $ 2.1 | $ 0.5 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income | $ 88.4 | $ 78.3 | $ 168.6 | $ 253.9 |
Available-for-sale securities: | ||||
Net (depreciation) appreciation during the period | (3.6) | (31.2) | 164.2 | (94.7) |
Change in other-than-temporary impairment losses recognized in other comprehensive income | 1.6 | (3.9) | 7.3 | (8.3) |
Total available-for-sale securities | (2) | (35.1) | 171.5 | (103) |
Pension and postretirement benefits: | ||||
Net actuarial losses and prior service costs arising in the period | (1.4) | |||
Amortization recognized as net periodic benefit and postretirement cost | 1.5 | 1.7 | 4.8 | 6.8 |
Total pension and postretirement benefits | 1.5 | 1.7 | 4.8 | 5.4 |
Cumulative foreign currency translation adjustment: | ||||
Amount recognized as cumulative foreign currency translation during the period | (1.9) | (2.6) | (3.2) | (4.8) |
Total other comprehensive (loss) income, net of tax | (2.4) | (36) | 173.1 | (102.4) |
Comprehensive income | $ 86 | $ 42.3 | $ 341.7 | $ 151.5 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Assets | ||
Fixed maturities, at fair value (amortized cost of $7,100.4 and $6,934.0) | $ 7,400.2 | $ 6,983.4 |
Equity securities, at fair value (cost of $533.6 and $528.5) | 612.5 | 576.6 |
Other investments | 483.4 | 393.4 |
Total investments | 8,496.1 | 7,953.4 |
Cash and cash equivalents | 315.9 | 338.8 |
Accrued investment income | 62.5 | 62.9 |
Premiums and accounts receivable, net | 1,534.9 | 1,391.7 |
Reinsurance recoverable on paid and unpaid losses and unearned premiums | 2,655.1 | 2,635 |
Deferred acquisition costs | 537.4 | 508.8 |
Deferred income taxes | 16.2 | 137.9 |
Goodwill | 185.1 | 186 |
Other assets | 476.5 | 483.7 |
Assets of discontinued operations | 84 | 83 |
Total assets | 14,363.7 | 13,781.2 |
Liabilities | ||
Loss and loss adjustment expense reserves | 6,802.3 | 6,574.4 |
Unearned premiums | 2,684.8 | 2,540.8 |
Expenses and taxes payable | 662.3 | 724.9 |
Reinsurance premiums payable | 283.7 | 205.2 |
Debt | 797.9 | 803.1 |
Liabilities of discontinued operations | 87 | 88.4 |
Total liabilities | 11,318 | 10,936.8 |
Commitments and contingencies | ||
Shareholders' Equity | ||
Preferred stock, par value $0.01 per share; 20.0 million shares authorized; none issued | ||
Common stock, par value $0.01 per share; 300.0 million shares authorized; 60.5 million shares issued | 0.6 | 0.6 |
Additional paid-in capital | 1,838.9 | 1,833.5 |
Accumulated other comprehensive income | 227 | 53.9 |
Retained earnings | 1,910.4 | 1,803.5 |
Treasury stock at cost (18.2 and 17.5 million shares) | (931.2) | (847.1) |
Total shareholders' equity | 3,045.7 | 2,844.4 |
Total liabilities and shareholders' equity | $ 14,363.7 | $ 13,781.2 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Statement Of Financial Position [Abstract] | ||
Fixed maturities, amortized cost | $ 7,100.4 | $ 6,934 |
Equity securities, cost | $ 533.6 | $ 528.5 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, issued | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 60,500,000 | 60,500,000 |
Treasury stock, shares | 18,200,000 | 17,500,000 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Millions | Preferred Stock [Member] | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss), net of tax | Net Unrealized Appreciation (Depreciation) on Investments: | Defined Benefit Pension and Postretirement Plans: | Cumulative Foreign Currency Translation Adjustment: | Retained Earnings | Treasury Stock | Total |
Balance at beginning of period at Dec. 31, 2014 | $ 0.6 | $ 1,830.7 | $ 300.9 | $ (84.3) | $ (10.2) | $ 1,558.7 | $ (752.4) | |||
Net income | 253.9 | $ 253.9 | ||||||||
Shares purchased at cost | (85.3) | |||||||||
Employee and director stock-based awards and other | 2.8 | |||||||||
Net appreciation (depreciation) on available-for-sale securities | (103) | (103) | ||||||||
Net amount arising in the period | (1.4) | (1.4) | ||||||||
Net amount recognized as net periodic benefit cost | 6.8 | 5.4 | ||||||||
Amount recognized as cumulative foreign currency translation during the period | (4.8) | (4.8) | ||||||||
Dividends to shareholders | (54.3) | |||||||||
Total accumulated other comprehensive income | (102.4) | |||||||||
Net shares reissued at cost under employee stock-based compensation plans | 27.3 | |||||||||
Stock-based compensation | (8.5) | |||||||||
Balance at end of period at Sep. 30, 2015 | 0.6 | 1,833.5 | $ 104 | 197.9 | (78.9) | (15) | 1,749.8 | (810.4) | 2,877.5 | |
Balance at beginning of period at Dec. 31, 2015 | 0.6 | 1,833.5 | 149.9 | (78.6) | (17.4) | 1,803.5 | (847.1) | 2,844.4 | ||
Net income | 168.6 | 168.6 | ||||||||
Shares purchased at cost | (105.2) | |||||||||
Employee and director stock-based awards and other | 5.4 | |||||||||
Net appreciation (depreciation) on available-for-sale securities | 171.5 | 171.5 | ||||||||
Net amount arising in the period | ||||||||||
Net amount recognized as net periodic benefit cost | 4.8 | 4.8 | ||||||||
Amount recognized as cumulative foreign currency translation during the period | (3.2) | (3.2) | ||||||||
Dividends to shareholders | (59.2) | |||||||||
Total accumulated other comprehensive income | 173.1 | |||||||||
Net shares reissued at cost under employee stock-based compensation plans | 21.1 | |||||||||
Stock-based compensation | (2.5) | |||||||||
Balance at end of period at Sep. 30, 2016 | $ 0.6 | $ 1,838.9 | $ 227 | $ 321.4 | $ (73.8) | $ (20.6) | $ 1,910.4 | $ (931.2) | $ 3,045.7 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash Flows From Operating Activities | ||
Net income | $ 168.6 | $ 253.9 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Gain on disposal of U.K. motor business | (1.3) | (37.7) |
Net loss from repayment of debt | 86.1 | 24.1 |
Net realized investment gains | (5.1) | (29.6) |
Net amortization and depreciation | 24.6 | 22.8 |
Stock-based compensation expense | 8.5 | 9.4 |
Amortization of defined benefit plan costs | 7.5 | 10 |
Deferred income tax expense | 10.1 | 40.3 |
Change in deferred acquisition costs | (27.8) | (21.6) |
Change in premiums receivable, net of reinsurance premiums payable | (84.7) | (114.6) |
Change in loss, loss adjustment expense and unearned premium reserves | 512.5 | 323.8 |
Change in reinsurance recoverable | (102.9) | (123) |
Change in expenses and taxes payable | (31.2) | (5.1) |
Other, net | (6.8) | 1.7 |
Net cash provided by operating activities | 558.1 | 354.4 |
Cash Flows From Investing Activities | ||
Proceeds from disposals and maturities of fixed maturities | 1,190.3 | 1,272.9 |
Proceeds from disposals of equity securities and other investments | 226.1 | 243.1 |
Purchase of fixed maturities | (1,443.1) | (1,376.3) |
Purchase of equity securities and other investments | (292.2) | (285.8) |
Cash received from disposal of U.K. motor business, net of cash transferred | 44.3 | |
Capital expenditures | (12.2) | (14.5) |
Other investing activities | 12.1 | 4.5 |
Net cash used in investing activities | (319) | (111.8) |
Cash Flows From Financing Activities | ||
Proceeds from exercise of employee stock options | 14.8 | 14.3 |
Proceeds from debt borrowings, net | 370.5 | |
Change in cash collateral related to securities lending program | (9.6) | 14.1 |
Dividends paid to shareholders | (59.2) | (54.3) |
Repayment of debt | (461.3) | (114.3) |
Repurchases of common stock | (105.2) | (85.3) |
Other financing activities | (9.8) | (3.7) |
Net cash used in financing activities | (259.8) | (229.2) |
Effect of exchange rate changes on cash | (2.2) | (1.6) |
Net change in cash and cash equivalents | (22.9) | 11.8 |
Cash and cash equivalents, beginning of period | 338.8 | 373.3 |
Cash and cash equivalents, end of period | $ 315.9 | $ 385.1 |
Basis of Presentation and Princ
Basis of Presentation and Principles of Consolidation | 9 Months Ended |
Sep. 30, 2016 | |
Basis of Presentation and Principles of Consolidation [Abstract] | |
Basis of Presentation and Principles of Consolidation | 1. Basis of Presentation and Principles of Consolidation The accompanying unaudited consolidated financial statements of The Hanover Insurance Group, Inc. and subsidiaries (“THG” or the “Company”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and with the requirements of Form 10-Q. Certain financial information that is provided in annual financial statements, but is not required in interim reports, has been omitted. The interim consolidated financial statements of THG include the accounts of The Hanover Insurance Company (“Hanover Insurance”) and Citizens Insurance Company of America, THG’s principal U.S. domiciled property and casualty companies; Chaucer Holdings Limited (“Chaucer”), a specialist insurance underwriting group which operates through the Society and Corporation of Lloyd’s (“Lloyd’s”) and certain other insurance and non-insurance subsidiaries. These legal entities conduct their operations through several business segments discussed in Note 9 – “Segment Information”. Additionally, the interim consolidated financial statements include the Company’s discontinued operations, consisting primarily of the Company’s former life insurance businesses and its accident and health business. All intercompany accounts and transactions have been eliminated. The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. In the opinion of the Company’s management, the accompanying interim consolidated financial statements reflect all adjustments, consisting of normal recurring items, necessary for a fair presentation of the financial position and results of operations. The results of operations for the three and nine months ended September 30, 2016 are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with the Company’s 2015 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 25, 2016. |
New Accounting Pronouncements
New Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2016 | |
New Accounting Pronouncements [Abstract] | |
New Accounting Pronouncements | 2. New Accounting Pronouncements Recently Implemented Standards In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) Update No. 2015-03, (Subtopic 835-30) Interest-Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs. This ASC update requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of a debt liability, consistent with debt discounts or premiums, and amortization of debt issuance cost shall be reported as interest expense. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASC update. The updated guidance is to be applied on a retrospective basis and early adoption is permitted. The update is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The Company implemented this guidance effective January 1, 2016. The effect of implementing this guidance was not material to the Company’s financial position or results of operations. Recently Issued Standards In October 2016, the FASB issued ASC Update No. 2016-16, (Topic 740) Income Taxes – Intra-Entity Transfers of Assets Other Than Inventory . Under current GAAP, the tax effects of intra-entity transfers of assets (intercompany sales) are deferred until the assets are sold to an outside party or otherwise recovered through use. This ASC update eliminates this deferral of taxes for assets other than inventory and requires the recognition of taxes when the transfer occurs. The updated guidance is effective for interim and annual periods beginning after December 15, 2017, and should be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings. Early adoption is permitted, but this election must be made in the first interim period of the adoption year. The Company is currently evaluating the impact of the adoption of ASC Update No. 2016-16. In August 2016, the FASB issued ASC Update No. 2016-15, (Topic 230) Classification of Certain Cash Receipts and Cash Payments . This ASC update provides specific guidance on the presentation of certain cash flow items where there is currently diversity in practice, including, but not limited to, debt prepayment or debt extinguishment costs, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, and distributions received from equity method investees. The updated guidance is effective for interim and annual periods beginning after December 15, 2017, and should be applied retrospectively unless impracticable. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASC U pdate No. 2016- 15 . In June 2016, the FASB issued ASC Update No. 2016-13, (Topic 326) Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments . This ASC update introduces new guidance for the accounting for credit losses on financial instruments within its scope. A new model, referred to as the current expected credit losses model, requires an entity to determine credit-related impairment losses for financial instruments held at amortized cost and to estimate these expected credit losses over the life of an exposure (or pool of exposures). The estimate of expected credit losses should consider both historical and current information, reasonable and supportable forecasts, as well as estimates of prepayments. The estimated credit losses and subsequent adjustment to such loss estimates, will be recorded through an allowance account which is deducted from the amortized cost of the financial instrument, with the offset recorded in current earnings. ASC Update No. 2016-13 also modifies the impairment model for available-for-sale debt securities. The new model will require an estimate of expected credit losses only when the fair value is below the amortized cost of the asset, thus the length of time the fair value of an available-for-sale debt security has been below the amortized cost will no longer affect the determination of whether a credit loss exists. In addition, credit losses on available-for-sale debt securities will be limited to the difference between the security’s amortized cost basis and its fair value. The updated guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for periods beginning after December 15, 2018. The Company is evaluating the impact of the adoption of ASC Update No. 2016-13 on its financial position and results of operations. In March 2016, the FASB issued ASC Update No. 2016-09, (Topic 718) Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting . This ASC update requires all excess tax benefits and tax deficiencies to be recognized as income tax expense or benefit in the income statement, and be treated as discreet items in the reporting period in which they occur. Additionally, excess tax benefits will be classified with other income tax cash flows as an operating activity and cash paid by an employer when directly withholding shares for tax withholding purposes will be classified as a financing activity. Awards that are used to settle employee tax liabilities will be allowed to qualify for equity classification for withholdings up to the maximum statutory tax rates in applicable jurisdictions. Regarding forfeitures, a company can make an entity-wide accounting policy election to either continue estimating the number of awards that are expected to vest or account for forfeitures when they occur. The updated guidance is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Early adoption is permitted. The Company does not expect that adoption of ASC Update No. 2016-09 will have a material effect on its financial position. The effect this guidance will have on the Company’s results of operations is dependent on the future tax benefits or deficiencies that are recognized related to stock-based compensations awards, and could be material in any one quarterly or annual period. In February 2016, the FASB issued ASC Update No. 2016-02, (Topic 842) Leases . This ASC update requires a lessee to recognize a right-of-use asset, which represents the lessee’s right to use a specified asset for the lease term, and a corresponding lease liability, which represents a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, for all leases that extend beyond 12 months. For finance or capital leases, interest on the lease liability will be recognized separately from amortization of the right-of-use asset in the statements of income and comprehensive income. In addition, the repayment of the principal portion of the lease liability will be classified as a financing activity while the interest component will be included in the operating section of the statement of cash flows. For operating leases, the asset and liability will be amortized as a single lease cost, such that the cost of the lease is allocated over the lease term, on a generally straight-line basis, with all cash flows included within operating activities in the statement of cash flows. The updated guidance is effective for interim and annual periods beg inning after December 15, 2018 , and is required to be implemented by applying a modified retrospective transition approach. The Company is evaluating the impact of the adoption of ASC U pdate No. 2016-02 on its financial position and results of operations. In January 2016, the FASB issued ASC Update No. 2016-01, (Subtopic 825-10) Financial Instruments- Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. This ASC update requires unconsolidated equity investments to be measured at fair value with changes in the fair value recognized in net income, except for those accounted for under the equity method. This update eliminates the cost method for equity investments without readily determinable fair values and replaces with other methods, including the use of Net Asset Value. Additionally, when a public entity is required to measure fair value for disclosure purposes and holds financial instruments measured at amortized cost, the updated guidance requires these instruments to be measured using exit price. It also requires financial assets and financial liabilities to be presented separately in the notes to the financial statements, grouped by measurement category and form of financial asset. The updated guidance is effective for annual periods beginning after December 15, 2017. The Company is evaluating the impact of the adoption of ASC U pdate No. 2016-01 on its financial position and results of operations. In May 2015, the FASB issued ASC Update No. 2015-09, (Topic 944) Financial Services- Insurance: Disclosures about Short-Duration Contracts. This ASC update requires several additional disclosures regarding short-duration insurance contracts, including; disaggregated incurred and paid claims development information, quantitative and qualitative information about claim frequency and duration, and the sum of incurred but not reported liabilities plus expected development on reported claims included in the liability for unpaid claims and claim adjustment expenses along with a description of reserving methodologies. This information is required to be presented by accident year, for the number of years for which claims typically remain outstanding, but need not exceed 10 years. A reconciliation of the claims development disclosures to the aggregate carrying amount of the liability for unpaid claims and claim adjustment expenses, including a separate disclosure for reinsurance recoverables is also required for each period presented in the statement of financial position. In addition, this ASC update requires insurance entities to disclose information about significant changes in methodologies and assumptions used to calculate the liability for unpaid claims and claim adjustment expenses, including reasons for the change and the effects on the financial statements. The updated guidance is effective for annual periods beginning after December 15, 2015, and interim periods within annual periods beginning after December 15, 2016. Early adoption is permitted. The Company does not expect the adoption of ASC Update No. 2015-09 to have a material impact on its financial position or results of operations, as the update is disclosure related. In May 2014, the FASB issued ASC Update No. 2014-09, (Topic 606) Revenue from Contracts with Customers . This ASC update was issued to clarify the principles for recognizing revenue. Insurance contracts and financial instrument transactions are not within the scope of this updated guidance, and; therefore, only an insignificant amount of the Company’s revenue is subject to this updated guidance. In August 2015, the FASB issued ASC Update No. 2015-14, (Topic 606) Revenue from Contracts with Customers , which deferred the effective date of ASC Update No. 2014-09 by one year. Accordingly, the updated guidance is effective for periods beginning after December 15, 2017 and is not expected to have a material effect on the Company’s financial position or results of operations. In Au gust 2014, the FASB issued ASC U pdate No. 2014-15, (Subtopic 205-40) Presentation of Financial Statement- Going Concern. This ASC update provides guidance on determining when and how to disclose going concern uncertainties in the financial statements, and requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. The updated guidance is effective for annual periods ending after December 15, 2016 and interim periods thereafter. Early adoption is permitted. The Company does not expect the adoption of ASC U pdate No. 2014-15 to have a material impact on its financial position or results of operations. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Taxes [Abstract] | |
Income Taxes | 3. Income Taxes Income tax expense for the nine months ended September 30, 2016 and 2015 has been computed using estimated annual effective tax rates. These rates are revised, if necessary, at the end of each successive interim period to reflect current estimates of the annual effective tax rates. For the nine months ended September 30, 2016, the tax provision is comprised of a $28.9 million U.S. federal income tax expense and a $27.9 million foreign income tax expense. For the nine months ended September 30, 2015, the tax provision was comprised of a $62.2 million U.S. federal income tax expense and a $24.8 million foreign income tax expense. Although most of the Company’s non–U.S. income is subject to U.S. federal income tax, certain of its non–U.S. income is not subject to U.S. federal income tax until repatriated. Foreign taxes on this non–U.S. income are accrued at the local foreign tax rate, as opposed to the higher U.S. statutory rate, since these earnings currently are expected to be indefinitely reinvested overseas. This assumption could change as a result of a sale of the subsidiaries, the receipt of dividends from the subsidiaries, a change in management’s intentions, or as a result of various other events. The Company has not made a provision for U.S. taxes on $18.7 million and $65.2 million of non-U.S. income for the nine months ended September 30, 2016 and 2015, respectively. However, in the future, if such earnings were distributed to the Company, taxes of $51.9 million would be payable on the accumulated undistributed earnings and would be reflected in the tax provision for the year in which these earnings are no longer intended to be indefinitely reinvested overseas, assuming all foreign tax credits are realized. The Company or its subsidiaries files income tax returns in the U.S. federal jurisdiction and various state jurisdictions, as well as foreign jurisdictions. The Company and its subsidiaries are subject to U.S. federal income tax examinations by tax authorities for years after 201 2 , U.S. state income tax examinations for years after 201 2 and foreign examinations for years after 201 2 . |
Debt
Debt | 9 Months Ended |
Sep. 30, 2016 | |
Debt [Abstract] | |
Debt | 4. Debt Debt consists of the following: (in millions) September 30, 2016 December 31, 2015 Senior debentures maturing April 15, 2026 $ 375.0 $ - Senior debentures maturing June 15, 2021 - 300.0 Senior debentures maturing March 1, 2020 - 80.0 Senior debentures maturing October 15, 2025 74.6 74.6 Subordinated debentures maturing March 30, 2053 175.0 175.0 Subordinated debentures maturing February 3, 2027 59.7 59.7 FHLBB borrowings (secured) 125.0 125.0 Total principal debt $ 809.3 $ 814.3 Unamortized debt issuance costs (11.4) (11.2) Total $ 797.9 $ 803.1 On April 8, 2016 , the Company issued $375.0 million aggregate principal amount of 4.50% senior unsecured debentures due April 15, 2026. The senior debentures are subject to certain restrictive covenants, including limitations on the issuance or disposition of stock of restricted subsidiaries and limitations on liens. These debentures pay interest semi-annually. Net proceeds from the issuance of the aforementioned debentures were $370.5 million. On May 21, 2016, the proceeds, together with cash on hand, were used to redeem the outstanding 7.50% notes due March 1, 2020 and 6.375% notes due June 15, 2021. The redemption of these notes resulted in a pre-tax loss of $86.1 million. At September 30, 2016, the Company was in compliance with the covenants associated with its debt indentures and credit arrangements. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2016 | |
Investments [Abstract] | |
Investments | 5. Investments A. Fixed maturities and equity securities The amortized cost and fair value of available-for-sale fixed maturities and the cost and fair value of equity securities were as follows: September 30, 2016 Amortized Gross Gross OTTI Cost or Unrealized Unrealized Unrealized (in millions) Cost Gains Losses Fair Value Losses Fixed maturities: U.S. Treasury and government agencies $ 311.1 $ 9.4 $ 0.1 $ 320.4 $ - Foreign government 234.5 8.2 - 242.7 - Municipal 1,071.8 65.7 1.1 1,136.4 - Corporate 3,937.4 190.5 19.7 4,108.2 15.8 Residential mortgage-backed 921.8 23.5 1.0 944.3 0.3 Commercial mortgage-backed 546.5 23.7 0.4 569.8 - Asset-backed 77.3 1.4 0.3 78.4 - Total fixed maturities $ 7,100.4 $ 322.4 $ 22.6 $ 7,400.2 $ 16.1 Equity securities $ 533.6 $ 79.8 $ 0.9 $ 612.5 $ - December 31, 2015 Amortized Gross Gross OTTI Cost or Unrealized Unrealized Unrealized (in millions) Cost Gains Losses Fair Value Losses Fixed maturities: U.S. Treasury and government agencies $ 447.1 $ 5.5 $ 3.5 $ 449.1 $ - Foreign government 244.7 2.6 1.5 245.8 - Municipal 1,074.5 50.0 4.2 1,120.3 - Corporate 3,699.9 86.8 95.7 3,691.0 27.5 Residential mortgage-backed 887.6 13.4 4.9 896.1 0.3 Commercial mortgage-backed 499.6 5.8 4.3 501.1 - Asset-backed 80.6 0.2 0.8 80.0 - Total fixed maturities $ 6,934.0 $ 164.3 $ 114.9 $ 6,983.4 $ 27.8 Equity securities $ 528.5 $ 55.7 $ 7.6 $ 576.6 $ - Other-than-temporary impairments (“OTTI”) unrealized losses in the tables above represent OTTI recognized in accumulated other comprehensive income. This amount excludes net unrealized gains on impaired securities relating to changes in the value of such securities subsequent to the impairment measurement date of $21.1 million and $1.1 million as of September 30, 2016 and December 31, 2015, respectively. The amortized cost and fair value by maturity periods for fixed maturities are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties, or the Company may have the right to put or sell the obligations back to the issuers. September 30, 2016 Amortized Fair (in millions) Cost Value Due in one year or less $ 375.0 $ 378.2 Due after one year through five years 2,575.9 2,692.0 Due after five years through ten years 2,120.6 2,220.4 Due after ten years 483.3 517.1 5,554.8 5,807.7 Mortgage-backed and asset-backed securities 1,545.6 1,592.5 Total fixed maturities $ 7,100.4 $ 7,400.2 B . Securities in an unrealized loss position The following tables provide information about the Company’s fixed maturities and equity securities that were in an unrealized loss position at September 30, 2016 and December 31, 2015 including the length of time the securities have been in an unrealized loss position: September 30, 2016 12 months or less Greater than 12 months Total Gross Gross Gross Unrealized Fair Unrealized Fair Unrealized Fair (in millions) Losses Value Losses Value Losses Value Fixed maturities: Investment grade: U.S. Treasury and government agencies $ 0.1 $ 37.8 $ - $ - $ 0.1 $ 37.8 Foreign governments - 11.5 - 1.5 - 13.0 Municipal 0.2 43.7 0.9 31.7 1.1 75.4 Corporate 1.3 209.7 4.3 55.5 5.6 265.2 Residential mortgage-backed 0.2 122.3 0.8 40.1 1.0 162.4 Commercial mortgage-backed 0.4 56.8 - 7.1 0.4 63.9 Asset-backed 0.1 3.7 0.2 6.2 0.3 9.9 Total investment grade 2.3 485.5 6.2 142.1 8.5 627.6 Below investment grade: Corporate 0.9 30.1 13.2 105.2 14.1 135.3 Total fixed maturities 3.2 515.6 19.4 247.3 22.6 762.9 Equity securities 0.9 18.7 - - 0.9 18.7 Total $ 4.1 $ 534.3 $ 19.4 $ 247.3 $ 23.5 $ 781.6 December 31, 2015 12 months or less Greater than 12 months Total Gross Gross Gross Unrealized Fair Unrealized Fair Unrealized Fair (in millions) Losses Value Losses Value Losses Value Fixed maturities: Investment grade: U.S. Treasury and government agencies $ 1.5 $ 139.0 $ 2.0 $ 77.2 $ 3.5 $ 216.2 Foreign governments 0.8 63.6 0.7 8.4 1.5 72.0 Municipal 2.3 143.0 1.9 57.4 4.2 200.4 Corporate 30.7 1,138.3 18.9 122.3 49.6 1,260.6 Residential mortgage-backed 3.0 334.5 1.9 47.0 4.9 381.5 Commercial mortgage-backed 4.2 293.8 0.1 9.7 4.3 303.5 Asset-backed 0.8 56.6 - 1.4 0.8 58.0 Total investment grade 43.3 2,168.8 25.5 323.4 68.8 2,492.2 Below investment grade: Corporate 19.6 165.5 26.5 63.2 46.1 228.7 Total fixed maturities 62.9 2,334.3 52.0 386.6 114.9 2,720.9 Equity securities 7.6 166.8 - - 7.6 166.8 Total $ 70.5 $ 2,501.1 $ 52.0 $ 386.6 $ 122.5 $ 2,887.7 The Company views gross unrealized losses on fixed maturities and equity securities as being temporary since it is its assessment that these securities will recover in the near term, allowing the Company to realize the anticipated long-term economic value. The Company employs a systematic methodology to evaluate declines in fair value below amortized cost for fixed maturity securities or cost for equity securities. In determining OTTI of fixed maturity and equity securities, the Company evaluates several factors and circumstances, including the issuer’s overall financial condition; the issuer’s credit and financial strength ratings; the issuer’s financial performance, including earnings trends, dividend payments and asset quality; any specific events which may influence the operations of the issuer; the general outlook for market conditions in the industry or geographic region in which the issuer operates; and the length of time and the degree to which the fair value of an issuer’s securities remains below the Company’s cost. With respect to fixed maturity investments, the Company considers any factors that might raise doubt about the issuer’s ability to make contractual payments as they come due and whether the Company expects to recover the entire amortized cost basis of the security. With respect to equity securities, the Company considers its ability and intent to hold the investment for a period of time to allow for a recovery in value. C. Other investments In accordance with Lloyd’s operating guidelines, the Company deposits funds at Lloyd’s to support underwriting operations. These funds are available only to fund claim obligations. These assets consisted of approximately $507 million of fixed maturities and $4 million of cash and cash equivalents as of September 30, 2016. The Company also deposits funds with various state and governmental authorities in the U.S. For a discussion of the Company’s deposits with state and governmental authorities, see also Note 3 – “Investments” of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2015. D. Proceeds from sales The proceeds from sales of available-for-sale securities and gross realized gains and losses on those sales, were as follows: Three Months Ended September 30, 2016 2015 Proceeds from Gross Gross Proceeds from Gross Gross (in millions) Sales Gains Losses Sales Gains Losses Fixed maturities $ 94.2 $ 3.6 $ 0.3 $ 145.2 $ 0.7 $ 0.6 Equity securities $ 20.7 $ - $ 1.2 $ 17.4 $ 4.1 $ 0.1 Nine Months Ended September 30, 2016 2015 Proceeds from Gross Gross Proceeds from Gross Gross (in millions) Sales Gains Losses Sales Gains Losses Fixed maturities $ 402.1 $ 9.5 $ 4.5 $ 969.9 $ 13.6 $ 5.3 Equity securities $ 194.1 $ 26.4 $ 2.9 $ 185.2 $ 24.2 $ 0.1 Proceeds from sales of fixed maturities for the nine months ended September 30, 2015 included $379.6 million from the transfer of fixed maturity investments in connection with the disposal of the U.K. motor business and related gross gains of $6.4 million and gross losses of $0.6 million. E. Other-than-temporary impairments For the three months ended September 30, 2016, $0.1 million of OTTI on fixed maturities was transferred from unrealized losses in accumulative other comprehensive income (“AOCI”) and recognized in earnings, with no impact on total OTTI. For the nine months ended September 30, 2016, total OTTI was $19.2 million, consisting primarily of fixed maturities and, to a lesser extent, equity securities. Of this amount, $26.0 million was recognized in earnings, including $6.8 million which was transferred from unrealized losses in AOCI. For the three months ended September 30, 2015, total OTTI of fixed maturities was $9.5 million. Of this amount, $4.2 million was recognized in earnings and the remaining $5.3 million was recorded as unrealized losses in AOCI. For the nine months ended September 30, 2015, total OTTI of fixed maturities and equity securities was $20.9 million. Of this amount, $8.8 million was recognized in earnings and the remaining $12.1 million was recorded as unrealized losses in AOCI. The methodology and significant inputs used to measure the amount of credit losses on fixed maturities in 2016 and 2015 were as follows: Corporate bonds – the Company utilized a financial model that derives expected cash flows based on probability-of-default factors by credit rating, loss-given-default factors based on security type and position in the capital structure and asset duration. These factors are based on historical data provided by an independent third-party rating agency. The following table provides rollforwards of the cumulative amounts related to the Company’s credit loss portion of the OTTI losses on fixed maturity securities for which the non-credit portion of the loss is included in other comprehensive income. Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2016 2015 2016 2015 Credit losses at beginning of period $ 11.7 $ 6.1 $ 18.0 $ 4.2 Credit losses for which an OTTI was not previously recognized - 2.5 5.2 5.2 Additional credit losses on securities for which an OTTI was previously recognized 0.1 1.0 2.2 1.0 Reductions for securities sold, matured or called (2.3) - (3.9) (0.8) Reductions for securities reclassified as intended to sell - - (12.0) - Credit losses at end of period $ 9.5 $ 9.6 $ 9.5 $ 9.6 |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value [Abstract] | |
Fair Value | 6. Fair Value Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability, i.e., exit price, in an orderly transaction between market participants. The Company emphasizes the use of observable market data whenever available in determining fair value. Fair values presented for certain financial instruments are estimates which, in many cases, may differ significantly from the amounts that could be realized upon immediate liquidation. A hierarchy of the three broad levels of fair value are as follows, with the highest priority given to Level 1 as these are the most observable, and the lowest priority given to Level 3: Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 – Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data, including model-derived valuations. Level 3 – Unobservable inputs that are supported by little or no market activity. When more than one level of input is used to determine fair value, the financial instrument is classified as Level 2 or 3 according to the lowest level input that has a significant impact on the fair value measurement. The following methods and assumptions were used to estimate the fair value of each class of financial instruments and have not changed since last year. Cash and Cash Equivalents The carrying amount approximates fair value. Cash equivalents primarily consist of money market instruments, which are generally valued using unadjusted quoted prices in active markets that are accessible for identical assets and are classified as Level 1. Fixed Maturities Level 1 securities generally include U.S. Treasury issues and other securities that are highly liquid and for which quoted market prices are available. Level 2 securities are valued using pricing for similar securities and pricing models that incorporate observable inputs including, but not limited to yield curves and issuer spreads. Level 3 securities include issues for which little observable data can be obtained, primarily due to the illiquid nature of the securities, and for which significant inputs used to determine fair value are based on the Company’s own assumptions. Non-binding broker quotes are also included in Level 3. The Company utilizes a third party pricing service for the valuation of the majority of its fixed maturity securities and receives one quote per security. When quoted market prices in an active market are available, they are provided by the pricing service as the fair value and such values are classified as Level 1. Since fixed maturities other than U.S. Treasury securities generally do not trade on a daily basis, the pricing service prepares estimates of fair value for those securities using pricing applications based on a market approach. Inputs into the fair value pricing common to all asset classes include: benchmark U.S. Treasury security yield curves; reported trades of identical or similar fixed maturity securities; broker/dealer quotes of identical or similar fixed maturity securities and structural characteristics such as maturity date, coupon, mandatory principal payment dates, frequency of interest and principal payments, and optional redemption features. Inputs into the fair value applications that are unique by asset class include, but are not limited to: · U.S. government agencies – determination of direct versus indirect government support and whether any contingencies exist with respect to the timely payment of principal and interest. · Foreign government – estimates of appropriate market spread versus underlying related sovereign treasury curve(s) dependent on liquidity and direct or contingent support. · Municipals – overall credit quality, including assessments of the level and variability of: sources of payment such as income, sales or property taxes, levies or user fees; credit support such as insurance; state or local economic and political base; natural resource availability; and susceptibility to natural or man-made catastrophic events such as hurricanes, earthquakes or acts of terrorism. · Corporate fixed maturities – overall credit quality, including assessments of the level and variability of: economic sensitivity; liquidity; corporate financial policies; management quality; regulatory environment; competitive position; ownership; restrictive covenants; and security or collateral. · Residential mortgage-backed securities – estimates of prepayment speeds based upon: historical prepayment rate trends; underlying collateral interest rates; geographic concentration; vintage year; borrower credit quality characteristics; interest rate and yield curve forecasts; government or monetary authority support programs; tax policies; delinquency/default trends; and, in the case of non-agency collateralized mortgage obligations, severity of loss upon default and length of time to recover proceeds following default. · Commercial mortgage-backed securities – overall credit quality, including assessments of the value and supply/demand characteristics of: collateral type such as office, retail, residential, lodging, or other; geographic concentration by region, state, metropolitan statistical area and locale; vintage year; historical collateral performance including defeasance, delinquency, default and special servicer trends; and capital structure support features. · Asset-backed securities – overall credit quality, including assessments of the underlying collateral type such as credit card receivables, auto loan receivables and equipment lease receivables; geographic diversification; vintage year; historical collateral performance including delinquency, default and casualty trends; economic conditions influencing use rates and resale values; and contract structural support features. Generally, all prices provided by the pricing service, except actively traded securities with quoted market prices, are reported as Level 2. The Company holds privately placed fixed maturity securities and certain other fixed maturity securities that do not have an active market and for which the pricing service cannot provide fair values. The Company determines fair values for these securities using either matrix pricing utilizing the market approach or broker quotes. The Company will use observable market data as inputs into the fair value applications, as discussed in the determination of Level 2 fair values, to the extent it is available, but is also required to use a certain amount of unobservable judgment due to the illiquid nature of the securities involved. Unobservable judgment reflected in the Company’s matrix model accounts for estimates of additional spread required by market participants for factors such as issue size, structural complexity, high bond coupon or other unique features. These matrix-priced securities are reported as Level 2 or Level 3, depending on the significance of the impact of unobservable judgment on the security’s value. Additionally, the Company may obtain non-binding broker quotes which are reported as Level 3. Equity Securities Level 1 consists of publicly traded securities, including exchange traded funds, valued at quoted market prices. Level 2 includes securities that are valued using pricing for similar securities and pricing models that incorporate observable inputs. Level 3 consists of common or preferred stock of private companies for which observable inputs are not available. The Company utilizes a third party pricing service for the valuation of the majority of its equity securities and receives one quote for each equity security. When quoted market prices in an active market are available, they are provided by the pricing service as the fair value and such values are classified as Level 1. The Company holds certain equity securities that have been issued by privately-held entities that do not have an active market and for which the pricing service cannot provide fair values. Generally, the Company estimates fair value for these securities based on the issuer’s book value and market multiples. These securities are reported as Level 2 or Level 3 depending on the significance of the impact of unobservable judgment on the security’s value. Additionally, the Company may obtain non-binding broker quotes which are reported as Level 3. Other Investments Other investments primarily include mortgage participations, overseas trust funds required in connection with our Lloyd’s business and cost basis limited partnerships. Fair values of mortgage participations and other mortgage loans are estimated by discounting the contractual cash flows using the rates at which similar loans would be made to borrowers with comparable credit ratings and are reported as Level 3. Fair values of overseas trust funds are provided by the investment manager based on quoted prices for similar instruments in active markets and are reported as Level 2. The fair values of cost basis limited partnerships are based on the net asset value provided by the general partner and recent financial information and are excluded from the fair value hierarchy. Debt The fair value of debt is estimated based on quoted market prices for identical or similar issuances. If a quoted market price is not available, fair values are estimated using discounted cash flows that are based on current interest rates and yield curves for debt issuances with maturities and credit risks consistent with the debt being valued. Debt is reported as Level 2. The estimated fair value of the financial instruments were as follows: September 30, 2016 December 31, 2015 Carrying Fair Carrying Fair (in millions) Value Value Value Value Financial Assets Cash and cash equivalents $ 315.9 $ 315.9 $ 338.8 $ 338.8 Fixed maturities 7,400.2 7,400.2 6,983.4 6,983.4 Equity securities 612.5 612.5 576.6 576.6 Other investments 448.3 463.5 365.4 367.9 Total financial assets $ 8,776.9 $ 8,792.1 $ 8,264.2 $ 8,266.7 Financial Liabilities Debt $ 797.9 $ 895.9 $ 803.1 $ 927.8 The Company has processes designed to ensure that the values received from its third party pricing service are accurately recorded, that the data inputs and valuation techniques utilized are appropriate and consistently applied, and that the assumptions are reasonable and consistent with the objective of determining fair value. The Company performs a review of the fair value hierarchy classifications and of prices received from its pricing service on a quarterly basis. The Company reviews the pricing services’ policies describing its methodology, processes, practices and inputs, including various financial models used to value securities. Also, the Company reviews the portfolio pricing, including a process for which securities with changes in prices that exceed a defined threshold are verified to independent sources, if available. If upon review, the Company is not satisfied with the validity of a given price, a pricing challenge would be submitted to the pricing service along with supporting documentation for its review. The Company does not adjust quotes or prices obtained from the pricing service unless the pricing service agrees with the Company’s challenge. During 2016 and 2015, the Company did not adjust any prices received from its pricing service. Changes in the observability of valuation inputs may result in a reclassification of certain financial assets or liabilities within the fair value hierarchy. Reclassifications between levels of the fair value hierarchy are reported as of the beginning of the period in which the reclassification occurs. As previously discussed, the Company utilizes a third party pricing service for the valuation of the majority of its fixed maturities and equity securities. The pricing service has indicated that it will only produce an estimate of fair value if there is objectively verifiable information to produce a valuation. If the pricing service discontinues pricing an investment, the Company will use observable market data to the extent it is available, but may also be required to make assumptions for market based inputs that are unavailable due to market conditions. The following tables provide, for each hierarchy level, the Company’s assets that were measured at fair value on a recurring basis. September 30, 2016 (in millions) Total Level 1 Level 2 Level 3 Fixed maturities: U.S. Treasury and government agencies $ 320.4 $ 174.2 $ 146.2 $ - Foreign government 242.7 48.3 194.4 - Municipal 1,136.4 - 1,104.1 32.3 Corporate 4,108.2 - 4,103.9 4.3 Residential mortgage-backed, U.S. agency backed 889.8 - 889.8 - Residential mortgage-backed, non-agency 54.5 - 54.5 - Commercial mortgage-backed 569.8 - 553.6 16.2 Asset-backed 78.4 - 78.4 - Total fixed maturities 7,400.2 222.5 7,124.9 52.8 Equity securities 603.8 602.4 - 1.4 Other investments 99.5 - 95.9 3.6 Total investment assets at fair value $ 8,103.5 $ 824.9 $ 7,220.8 $ 57.8 December 31, 2015 (in millions) Total Level 1 Level 2 Level 3 Fixed maturities: U.S. Treasury and government agencies $ 449.1 $ 193.6 $ 255.5 $ - Foreign government 245.8 52.5 193.3 - Municipal 1,120.3 - 1,085.9 34.4 Corporate 3,691.0 - 3,687.3 3.7 Residential mortgage-backed, U.S. agency backed 824.5 - 824.5 - Residential mortgage-backed, non-agency 71.6 - 71.6 - Commercial mortgage-backed 501.1 - 484.1 17.0 Asset-backed 80.0 - 79.5 0.5 Total fixed maturities 6,983.4 246.1 6,681.7 55.6 Equity securities 567.7 566.4 - 1.3 Other investments 104.5 - 100.9 3.6 Total investment assets at fair value $ 7,655.6 $ 812.5 $ 6,782.6 $ 60.5 The following tables provide, for each hierarchy level, the Company’s estimated fair values of financial instruments that were not carried at fair value: September 30, 2016 (in millions) Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 315.9 $ 315.9 $ - $ - Equity securities 8.7 - 8.7 - Other investments 290.7 - - 290.7 Liabilities: Debt $ 895.9 $ - $ 895.9 $ - December 31, 2015 (in millions) Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 338.8 $ 338.8 $ - $ - Equity securities 8.9 - 8.9 - Other investments 203.5 - - 203.5 Liabilities: Debt $ 927.8 $ - $ 927.8 $ - Investments measured at fair value using net asset value based on an ownership interest in partners’ capital have not been included in the table above. The fair values of these investments were $73.3 million and $59.9 million as of September 30, 2016 and December 31, 2015, respectively, which are less than 1% of total investment assets. The tables below provide a reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3). Fixed Maturities (in millions) Municipal Corporate Commercial mortgage-backed Asset-backed Total Equity and Other Total Assets Three Months Ended September 30, 2016 Balance July 1, 2016 $ 34.4 $ 4.4 $ 16.7 $ 0.4 $ 55.9 $ 4.9 $ 60.8 Transfers out of Level 3 (1.2) - - - (1.2) - (1.2) Total (losses) gains: Included in other comprehensive income - net (depreciation) appreciation on available-for-sale securities (0.1) (0.1) (0.1) - (0.3) 0.1 (0.2) Sales (0.8) - (0.4) (0.4) (1.6) - (1.6) Balance September 30, 2016 $ 32.3 $ 4.3 $ 16.2 $ - $ 52.8 $ 5.0 $ 57.8 Three Months Ended September 30, 2015 Balance July 1, 2015 $ 27.0 $ 9.4 $ 18.0 $ 1.3 $ 55.7 $ 5.1 $ 60.8 Transfers out of Level 3 - (4.6) - - (4.6) - (4.6) Total gains (losses): Included in total net realized investment gains - - 0.1 - 0.1 - 0.1 Included in other comprehensive income - net appreciation (depreciation) on available-for-sale securities 0.4 - (0.1) (0.1) 0.2 - 0.2 Purchases and sales: Purchases 3.1 - - - 3.1 - 3.1 Sales (0.5) (0.1) (0.3) - (0.9) - (0.9) Balance September 30, 2015 $ 30.0 $ 4.7 $ 17.7 $ 1.2 $ 53.6 $ 5.1 $ 58.7 Fixed Maturities (in millions) Municipal Corporate Commercial mortgage-backed Asset-backed Total Equity and Other Total Assets Nine Months Ended September 30, 2016 Balance January 1, 2016 $ 34.4 $ 3.7 $ 17.0 $ 0.5 $ 55.6 $ 4.9 $ 60.5 Transfers out of Level 3 (1.2) - - - (1.2) - (1.2) Total gains (losses): Included in total net realized investment gains 0.1 (0.2) - - (0.1) - (0.1) Included in other comprehensive income-net appreciation on available-for-sale securities 1.5 0.6 0.6 - 2.7 0.1 2.8 Purchases and sales: Purchases - 0.3 - - 0.3 - 0.3 Sales (2.5) (0.1) (1.4) (0.5) (4.5) - (4.5) Balance September 30, 2016 $ 32.3 $ 4.3 $ 16.2 $ - $ 52.8 $ 5.0 $ 57.8 Nine Months Ended September 30, 2015 Balance January 1, 2015 $ 25.7 $ 9.6 $ 21.4 $ - $ 56.7 $ 5.0 $ 61.7 Transfers into Level 3 - - - 1.3 1.3 - 1.3 Transfers out of Level 3 - (4.6) - - (4.6) - (4.6) Total gains (losses): Included in total net realized investment gains - 0.1 0.1 - 0.2 - 0.2 Included in other comprehensive income-net (depreciation) appreciation on available-for-sale securities (0.4) (0.2) (0.7) (0.1) (1.4) 0.1 (1.3) Purchases and sales: Purchases 6.2 - - - 6.2 - 6.2 Sales (1.5) (0.2) (3.1) - (4.8) - (4.8) Balance September 30, 2015 $ 30.0 $ 4.7 $ 17.7 $ 1.2 $ 53.6 $ 5.1 $ 58.7 During the three and nine months ended September 30, 2016 and 2015 , the Company transfer red ass ets between Level 2 and Level 3 primarily as a result of assessing the significance of unobservable inputs on the fair value measurement. There were no transfers between Level 1 and Level 2 during the three months or nine months ended September 30, 2016 or 2015. There were no Level 3 liabilities held by the Company for the nine months ended September 30, 2016 and 2015. The following table provides quantitative information about the significant unobservable inputs used by the Company in the fair value measurements of Level 3 assets. Where discounted cash flows were used in the valuation of fixed maturities, the internally-developed discount rate was adjusted by the significant unobservable inputs shown in the table. Valuations for securities based on broker quotes for which there was a lack of transparency as to inputs used to develop the valuations of $0.5 million have been excluded. September 30, 2016 December 31, 2015 Valuation Significant Fair Range Fair Range (in millions) Technique Unobservable Inputs Value (Wtd Average) Value (Wtd Average) Fixed maturities: Municipal Discounted Discount for: $ 32.3 $ 34.4 cash flow Small issue size Credit stress Above-market coupon 0.7 -6.8% ( 3.3% ) 0.9 - 1.5% ( 1.2% ) 0.3 - 1.0% ( 0.4% ) 0.6 - 6.8% ( 3.2% ) 0.9 - 1.5% ( 1.2% ) 0.3 - 1.0% ( 0.4% ) Corporate Discounted Discount for: 4.1 3.7 cash flow Small issue size Credit stress Above-market coupon 2.0 - 2.5% ( 2.1% ) 1.0% ( 1.0% ) 0.3 - 0.8% ( 0.6% ) 1.0% ( 1.0% ) 10.0% ( 10.0% ) 0.3 - 0.8% ( 0.6% ) Commercial mortgage-backed Discounted Discount for: 16.2 17.0 cash flow Small issue size Above-market coupon Lease structure 1.5 - 3.1% ( 2.6% ) 0.5% ( 0.5% ) 0.3% ( 0.3% ) 0.5 - 1.0% ( 0.5% ) 0.5% ( 0.5% ) 0.3% ( 0.3% ) Asset-backed Discounted Discount for: - 0.5 cash flow Small issue size N/A 0.7% ( 0.7% ) Equity securities Market Net tangible asset 1.1 1.1 comparables market multiples 1.0X ( 1.0X ) 1.0X ( 1.0X ) Other Discounted Discount rate 3.6 18.0% ( 18.0% ) 3.6 18.0% ( 18.0% ) cash flow Significant increases (decreases) in any of the above inputs in isolation would result in a significantly lower (higher) fair value measurement. There were no interrelationships between these inputs which might magnify or mitigate the effect of changes in unobservable inputs on the fair value measurement. |
Pension and Other Postretiremen
Pension and Other Postretirement Benefit Plans | 9 Months Ended |
Sep. 30, 2016 | |
Pension and Other Postretirement Benefit Plans [Abstract] | |
Pension and Other Postretirement Benefit Plans | 7. Pension and Other Postretirement Benefit Plans The components of net periodic pension cost for defined benefit pension and other postretirement benefit plans included in the Company’s results of operations are as follows: Three Months Ended September 30, 2016 2015 2016 2015 (in millions) Pension Plans Postretirement Plans Service cost - benefits earned during the period $ 0.2 $ 0.2 $ - $ - Interest cost 7.4 7.4 0.2 0.1 Expected return on plan assets (7.4) (8.0) - - Recognized net actuarial loss 2.8 3.1 - - Amortization of prior service cost - - (0.3) (0.3) Net periodic pension cost (benefit) $ 3.0 $ 2.7 $ (0.1) $ (0.2) Nine Months Ended September 30, 2016 2015 2016 2015 (in millions) Pension Plans Postretirement Plans Service cost - benefits earned during the period $ 0.6 $ 0.9 $ - $ - Interest cost 22.2 22.0 0.4 0.4 Expected return on plan assets (22.4) (23.7) - - Recognized net actuarial loss 8.4 10.9 0.1 0.1 Amortization of prior service cost - - (1.0) (1.0) Curtailment gain - (1.8) - - Net periodic pension cost (benefit) $ 8.8 $ 8.3 $ (0.5) $ (0.5) In the second quarter of 2015, the Company recognized a $1.8 million curtailment gain due to the disposal of the U.K. motor business. Included in the table above in recognized net actuarial loss was an equal and offsetting expense. |
Other Comprehensive Income
Other Comprehensive Income | 9 Months Ended |
Sep. 30, 2016 | |
Other Comprehensive Income [Abstract] | |
Other Comprehensive Income | 8. Other Comprehensive Income The following table provides changes in other comprehensive income. Three Months Ended September 30, 2016 2015 Tax Tax Benefit Net of Benefit Net of (in millions) Pre-Tax (Expense) Tax Pre-Tax (Expense) Tax Unrealized gains (losses) on available-for-sale securities: Unrealized gains (losses) arising during period $ 8.1 $ (2.9) $ 5.2 $ (47.0) $ 16.5 $ (30.5) Amount of realized gains from sales and other (3.4) (3.9) (7.3) (5.9) (1.4) (7.3) Portion of other-than-temporary impairment losses recognized in earnings 0.1 - 0.1 4.2 (1.5) 2.7 Net unrealized gains (losses) 4.8 (6.8) (2.0) (48.7) 13.6 (35.1) Pension and postretirement benefits: Amortization of net actuarial loss and prior service cost recognized as net periodic benefit cost 2.5 (1.0) 1.5 2.7 (1.0) 1.7 Cumulative foreign currency translation adjustment: Foreign currency translation recognized during the period (2.9) 1.0 (1.9) (4.0) 1.4 (2.6) Other comprehensive income (loss) $ 4.4 $ (6.8) $ (2.4) $ (50.0) $ 14.0 $ (36.0) Nine Months Ended September 30, 2016 2015 Tax Tax Benefit Net of Benefit Net of (in millions) Pre-Tax (Expense) Tax Pre-Tax (Expense) Tax Unrealized gains (losses) on available-for-sale securities: Unrealized gains (losses) arising during period $ 290.1 $ (101.5) $ 188.6 $ (120.5) $ 42.2 $ (78.3) Amount of realized gains from sales and other (30.7) (3.3) (34.0) (32.3) 1.9 (30.4) Portion of other-than-temporary impairment losses recognized in earnings 26.0 (9.1) 16.9 8.8 (3.1) 5.7 Net unrealized gains (losses) 285.4 (113.9) 171.5 (144.0) 41.0 (103.0) Pension and postretirement benefits: Net actuarial losses and prior service cost arising in the period - - - (1.2) (0.2) (1.4) Amortization of net actuarial loss and prior service cost recognized as net periodic benefit cost 7.5 (2.7) 4.8 10.0 (3.2) 6.8 Net pension and postretirement benefits 7.5 (2.7) 4.8 8.8 (3.4) 5.4 Cumulative foreign currency translation adjustment: Foreign currency translation recognized during the period (4.9) 1.7 (3.2) (7.4) 2.6 (4.8) Other comprehensive income (loss) $ 288.0 $ (114.9) $ 173.1 $ (142.6) $ 40.2 $ (102.4) Reclassifications out of accumulated other comprehensive income were as follows: Three Months Ended Nine Months Ended September 30, September 30, (in millions) 2016 2015 2016 2015 Amount Reclassified from Details about Accumulated Other Accumulated Other Affected Line Item in the Statement Comprehensive Income Components Comprehensive Income Where Net Income is Presented Unrealized gains on available-for-sale securities $ 3.4 $ 5.9 $ 30.7 $ 32.3 Net realized gains from sales and other Net other-than-temporary impairment (0.1) (4.2) (26.0) (8.8) losses on investments recognized in earnings 3.3 1.7 4.7 23.5 Total before tax 3.9 2.9 12.4 1.2 Tax benefit 7.2 4.6 17.1 24.7 Net of tax Amortization of defined benefit Loss adjustment expenses and other pension and postretirement plans (2.5) (2.7) (7.5) (10.0) operating expenses 1.0 1.0 2.7 3.2 Tax benefit (1.5) (1.7) (4.8) (6.8) Net of tax Total reclassifications for the period $ 5.7 $ 2.9 $ 12.3 $ 17.9 Benefit to income, net of tax The amount reclassified from accumulated other comprehensive income for the pension and postretirement benefits was allocated approximately 40% to loss adjustment expenses and 60% to other operating expenses for the nine months ended September 30, 201 6 and 2015. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2016 | |
Segment Information [Abstract] | |
Segment Information | 9. Segment Information The Company’s primary business operations include insurance products and services provided through four operating segments. The domestic operating segments are Commercial Lines, Personal Lines and Other, and the Company’s international operating segment is Chaucer. Commercial Lines includes commercial multiple peril, commercial automobile, workers’ compensation, and other commercial coverages, such as inland marine, specialty program business, management and professional liability and surety. Personal Lines includes personal automobile, homeowners and other personal coverages. Chaucer includes marine and aviation, property, energy, casualty and other coverages (which includes international liability, specialist coverages, and syndicate participations), and U.K. motor business prior to June 30, 2015 . Effective June 30, 2015, the Company transferred its U.K. motor business to an unaffiliated party. Included in Other are Opus Investment Management, Inc., which markets investment management services to institutions, pension funds and other organizations; earnings on holding company assets; and, a discontinued voluntary pools business. The separate financial information is presented consistent with the way results are regularly evaluated by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company reports interest expense related to debt separately from the earnings of its operating segments. This consists of interest on the Company’s senior debentures, subordinated debentures, collateralized borrowings with the Federal Home Loan Bank of Boston, and letter of credit facility. Management evaluates the results of the aforementioned segments based on operating income before taxes, which also excludes interest expense on debt. Operating income before taxes excludes certain items which are included in net income, such as net realized investment gains and losses. Such gains and losses are excluded since they are determined by interest rates, financial markets and the timing of sales. Also, operating income before taxes excludes net gains and losses on disposals of business assets, gains and losses related to the repayment of debt, discontinued operations, costs to acquire businesses, restructuring costs, the cumulative effect of accounting changes and certain other items. Although the items excluded from operating income before taxes may be important components in understanding and assessing the Company’s overall financial performance, management believes that the presentation of operating income before taxes enhances an investor’s understanding of the Company’s results of operations by highlighting net income attributable to the core operations of the business. However, operating income before taxes should not be construed as a substitute for income before income taxes and operating income should not be construed as a substitute for net income. Summarized below is financial information with respect to the Company’s business segments. Three Months Ended Nine Months Ended September 30, September 30, (in millions) 2016 2015 2016 2015 Operating revenues: Commercial Lines $ 628.4 $ 601.2 $ 1,857.2 $ 1,786.7 Personal Lines 391.5 379.7 1,154.8 1,131.4 Chaucer 215.0 242.7 667.9 875.5 Other 2.1 1.9 5.9 5.7 Total 1,237.0 1,225.5 3,685.8 3,799.3 Net realized investment gains 4.2 8.0 5.0 30.0 Total revenues $ 1,241.2 $ 1,233.5 $ 3,690.8 $ 3,829.3 Operating income (loss) before interest expense and income taxes: Commercial Lines: Underwriting income $ 3.6 $ 8.3 $ 12.4 $ 10.9 Net investment income 39.0 38.7 117.5 116.7 Other (expenses) income (0.1) 0.1 (0.7) (1.1) Commercial Lines operating income 42.5 47.1 129.2 126.5 Personal Lines: Underwriting income 23.3 17.9 81.2 34.3 Net investment income 17.1 18.0 51.6 54.2 Other income 1.3 1.3 3.4 3.1 Personal Lines operating income 41.7 37.2 136.2 91.6 Chaucer: Underwriting income 37.8 29.6 53.8 92.7 Net investment income 10.3 10.5 32.3 34.8 Other income 0.3 1.1 1.5 4.9 Chaucer operating income 48.4 41.2 87.6 132.4 Other: Underwriting loss (0.8) (0.9) (2.1) (2.3) Net investment income 1.4 1.1 3.8 3.4 Other net expenses (3.4) (3.1) (9.8) (9.1) Other operating loss (2.8) (2.9) (8.1) (8.0) Operating income before interest expense and income taxes 129.8 122.6 344.9 342.5 Interest on debt (12.5) (14.8) (42.8) (45.9) Operating income before income taxes 117.3 107.8 302.1 296.6 Non-operating income items: Net realized investment gains 4.2 8.0 5.0 30.0 Net gain on disposal of U.K. motor business 0.1 - 1.3 37.7 Net loss from repayment of debt - (5.6) (86.1) (24.1) Other non-operating items 2.5 0.2 2.8 (0.2) Income before income taxes $ 124.1 $ 110.4 $ 225.1 $ 340.0 The Company recognized approximately $7 million and $3 million in net foreign currency transaction losses in the Statements of Income during the three months ended September 30, 2016 and 2015, respectively. The Company recognized approximately $28 million in net foreign currency transaction losses and approximately $12 million in net foreign currency transaction gains in the Statements of Income during the nine months ended September 30, 2016 and 2015, respectively. The following table provides identifiable assets for the Company’s business segments and discontinued operations: September 30, 2016 December 31, 2015 (in millions) Identifiable Assets U.S. Companies $ 10,124.7 $ 9,616.0 Chaucer 4,155.0 4,082.2 Discontinued operations 84.0 83.0 Total $ 14,363.7 $ 13,781.2 The Company reviews the assets of its U.S. Companies collectively and does not allocate them between the Commercial Lines, Personal Lines and Other segments. |
Stock-based Compensation
Stock-based Compensation | 9 Months Ended |
Sep. 30, 2016 | |
Stock-based Compensation [Abstract] | |
Stock-based Compensation | 10. Stock-based Compensation As of September 30, 2016, there wer e 5,047, 892 sh ares, 2,420,768 shares and 702,191 shares available for grant under The Hanover Insurance Group 2014 Long-Term Incentive Plan, The Hanover Insurance Group 2014 Employee Stock Purchase Plan and the Chaucer Share Incentive Plan, respectively. Compensation cost for the Company’s stock-based awards and the related tax benefits were as follows: Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2016 2015 2016 2015 Stock-based compensation expense $ 3.0 $ 1.9 $ 8.5 $ 9.4 Tax benefit (1.1) (0.7) (3.0) (3.3) Stock-based compensation expense, net of taxes $ 1.9 $ 1.2 $ 5.5 $ 6.1 Stock Options Information on the Company’s stock option plans is summarized below. Nine Months Ended September 30, 2016 2015 (in whole shares and dollars) Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Outstanding, beginning of period 1,619,948 $ 56.57 2,236,620 $ 46.61 Granted 524,940 82.74 663,900 70.34 Exercised (564,389) 48.80 (377,188) 45.66 Forfeited or cancelled (207,203) 68.23 (117,640) 53.39 Outstanding, end of period (1) 1,373,296 68.01 2,405,692 52.98 (1) Included in the table above in outstanding shares for the nine months ended September 30, 2015 were 128,334 options that were previously granted to the Company’s former CEO. These options subsequently forfeited in 2016 and are included above in the amounts forfeited or cancelled for the nine months ended September 30, 2016. Restricted Stock Units The following tables summarize activity information about employee restricted stock units: Nine Months Ended September 30, 2016 2015 (in whole shares and dollars) Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Time-based restricted stock units: Outstanding, beginning of period 301,897 $ 54.54 384,923 $ 45.63 Granted 143,107 83.43 92,409 70.61 Vested (136,398) 42.49 (119,117) 40.94 Forfeited (27,411) 68.07 (31,573) 51.10 Outstanding, end of period 281,195 73.77 326,642 53.88 Performance-based and market-based restricted stock units: Outstanding, beginning of period 196,142 $ 47.89 218,338 $ 44.24 Granted 118,736 73.14 82,025 48.55 Vested (144,141) 41.11 (77,854) 38.82 Forfeited (63,740) 64.13 (14,451) 44.68 Outstanding, end of period (1) 106,997 75.38 208,058 47.93 (1) Included in the table above in outstanding shares for the nine months ended September 30, 2015 were 56,500 market-based restricted stock units that were previously granted to the Company’s former CEO. These units subsequently forfeited in 2016 and are included above in the amounts forfeited for the nine months ended September 30, 2016. In the first nine months of 2016 and 2015, the Company granted market-based awards totaling 79,153 and 80,738 , respectively, to certain members of senior management, which are included in the table above as performance and market-based restricted stock activity. The vesting of these stock units is based on the relative total shareholder return (“TSR”) of the Company. This metric is generally based on relative TSR for a three -year period as compared to a pre-selected group of property and casualty companies. The fair value of market-based awards was estimated at the date of grant using a valuation model. These units have the potential to range from 0% to 150% of the shares disclosed. Included in the amount granted above in 2016 are 30,453 shares related to market-based awards that achieved a payout in excess of 100%. These awards vested in the first nine months of 2016. Performance-based restricted stock units are based upon the achievement of the performance metric at 100% . These units have the potential to range from 0% to 200% of the shares disclosed, which varies based on grant year and individual participation level. Increases above the 100% target level are reflected as granted in the period in which performance-based stock unit goals are achieved. Decreases below the 100% target level are reflected as forfeited. Included in the amounts granted above in 2016 for the performance-based restricted stock units are 1,949 shares related to awards that a performance metric in excess of 100% was achieved. These awards vested in the first nine months of 2016. |
Earnings Per Share and Sharehol
Earnings Per Share and Shareholders' Equity Transactions | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share and Shareholders’ Equity Transactions [Abstract] | |
Earnings Per Share and Shareholders' Equity Transactions | 11. Earnings Per Share and Shareholders’ Equity Transactions The following table provides weighted average share information used in the calculation of the Company’s basic and diluted earnings per share: Three Months Ended Nine Months Ended September 30, September 30, (in millions, except per share data) 2016 2015 2016 2015 Basic shares used in the calculation of earnings per share 42.7 44.0 42.8 44.1 Dilutive effect of securities: Employee stock options 0.2 0.5 0.3 0.5 Non-vested stock grants 0.1 0.4 0.2 0.4 Diluted shares used in the calculation of earnings per share 43.0 44.9 43.3 45.0 Per share effect of dilutive securities on income from continuing operations $ (0.01) $ (0.03) $ (0.04) $ (0.11) Per share effect of dilutive securities on net income $ (0.01) $ (0.04) $ (0.05) $ (0.11) Diluted earnings per share for the three months ended September 30, 2016 exclude 0.6 million of common shares issuable under the Company’s stock compensation plans because their effect would be antidilutive. All of the common shares issuable under the Company’s stock compensation plans were included in the diluted earnings per share for the three months ended September 30, 2015. Diluted earnings per share for the nine months ended Sept ember 30, 2016 and 2015 exclude 0.5 million and 0.6 million, respectively, of common shares issuable under the Company’s stock compensation plans because their effect would be antidilutive. The Company’s Board of Directors has authorized aggregate repurchases of the Company’s common stock of up to $900 million. Under the repurchase authorizations, the Company may repurchase, from time to time, common shares in amounts, at prices and at such times as the Company deems appropriate, subject to market conditions and other considerations. Repurchases may be executed using open market purchases, privately negotiated transactions, accelerated repurchase programs or other transactions. The Company is not required to purchase any specific number of shares or to make purchases by any certain date under this program. During the first nine months of 2016 , the Company purchased 1.3 million shares of the Company’s common stock at a cost of $105.2 million. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies Legal Proceedings Durand Litigation On March 12, 2007, a putative class action suit captioned Jennifer A. Durand v. The Hanover Insurance Group, Inc., and The Allmerica Financial Cash Balance Pension Plan , was filed in the United States District Court for the Western District of Kentucky. The named plaintiff, a former employee of our former life insurance and annuity business who received a lump sum distribution from the Company’s Cash Balance Plan (the “Plan”) at or about the time of her separation from the company, claims that she and others similarly situated did not receive the appropriate lump sum distribution because in computing the lump sum, the Company and the Plan understated the accrued benefit in the calculation. The plaintiff claims that the Plan underpaid her distributions and those of similarly situated participants by failing to pay an additional so-called “whipsaw” amount reflecting the present value of an estimate of future interest credits from the date of the lump sum distribution to each participant’s retirement age of 65 (“whipsaw claim”). The plaintiff filed an Amended Complaint adding two new named plaintiffs and additional claims on December 11, 2009 . Two of the three new claims set forth in the Amended Complaint were dismissed by the District Court, which action was upheld in November 2015 by the U.S. Court of Appeals, Sixth Circuit. The District Court, however, did allow to stand the portion of the Amended Complaint which set forth claims against the Company for breach of fiduciary duty and failure to meet notice requirements arising under the Employee Retirement Income Security Act of 1974 (“ERISA”) from the various interest crediting and lump sum distribution matters of which plaintiffs complain, but only as to plaintiffs’ “whipsaw” claim that remained in the case. On December 17, 2013, the Court entered an order certifying a class to bring “whipsaw” and related breach of fiduciary duty claims consisting of all persons who received a lump sum distribution between March 1, 1997 and December 31, 2003. The Company filed a summary judgment motion, prior to the decision on the appeal, that was based on the statute of limitations and seeks to dismiss the subclass of plaintiffs who received lump sum distributions prior to March 13, 2002. This summary judgment motion has been stayed pending additional discovery. At this time, the Company is unable to provide a reasonable estimate of the potential range of ultimate liability if the outcome of the suit is unfavorable. The statute of limitations applicable to the sub-class consisting of all persons who received lump sum distributions between March 1, 1997 and March 12, 2002 has not yet been finally determined, and the extent of potential liability, if any, will depend on this determination. In addition, assuming for these purposes that the plaintiffs prevail with respect to claims that benefits accrued or payable under the Plan were understated, then there are numerous possible theories and other variables upon which any revised calculation of benefits as requested under plaintiffs’ claims could be based. Any adverse judgment in this case against the Plan would be expected to create a liability for the Plan, with resulting effects on the Plan’s assets available to pay benefits. The Company’s future required funding of the Plan could also be impacted by such a liability. Other Matters The Company has been named a defendant in various other legal proceedings arising in the normal course of business. In addition, the Company is involved, from time to time, in examinations, investigations and proceedings by governmental and self-regulatory agencies. The potential outcome of any such action or regulatory proceedings in which the Company has been named a defendant or the subject of an inquiry or investigation, and its ultimate liability, if any, from such action or regulatory proceedings, is difficult to predict at this time. The ultimate resolutions of such proceedings are not expected to have a material effect on its financial position, although they could have a material effect on the results of operations for a particular quarter or annual period. Residual Markets The Company is required to participate in residual markets in various states, which generally pertain to high risk insureds, disrupted markets or lines of business or geographic areas where rates are regarded as excessive. The results of the residual markets are not subject to the predictability associated with the Company’s own managed business, and are significant to both the personal and commercial automobile lines of business and the workers’ compensation line of business. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. Subsequent Events There were no subsequent events requiring adjustment to the financial statements and no additional disclosures required in the notes to the interim consolidated financial statements. |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Debt [Abstract] | |
Schedule of Long-Term Debt | (in millions) September 30, 2016 December 31, 2015 Senior debentures maturing April 15, 2026 $ 375.0 $ - Senior debentures maturing June 15, 2021 - 300.0 Senior debentures maturing March 1, 2020 - 80.0 Senior debentures maturing October 15, 2025 74.6 74.6 Subordinated debentures maturing March 30, 2053 175.0 175.0 Subordinated debentures maturing February 3, 2027 59.7 59.7 FHLBB borrowings (secured) 125.0 125.0 Total principal debt $ 809.3 $ 814.3 Unamortized debt issuance costs (11.4) (11.2) Total $ 797.9 $ 803.1 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Investments [Abstract] | |
Schedule of Available-for-sale Securities Reconciliation | September 30, 2016 Amortized Gross Gross OTTI Cost or Unrealized Unrealized Unrealized (in millions) Cost Gains Losses Fair Value Losses Fixed maturities: U.S. Treasury and government agencies $ 311.1 $ 9.4 $ 0.1 $ 320.4 $ - Foreign government 234.5 8.2 - 242.7 - Municipal 1,071.8 65.7 1.1 1,136.4 - Corporate 3,937.4 190.5 19.7 4,108.2 15.8 Residential mortgage-backed 921.8 23.5 1.0 944.3 0.3 Commercial mortgage-backed 546.5 23.7 0.4 569.8 - Asset-backed 77.3 1.4 0.3 78.4 - Total fixed maturities $ 7,100.4 $ 322.4 $ 22.6 $ 7,400.2 $ 16.1 Equity securities $ 533.6 $ 79.8 $ 0.9 $ 612.5 $ - December 31, 2015 Amortized Gross Gross OTTI Cost or Unrealized Unrealized Unrealized (in millions) Cost Gains Losses Fair Value Losses Fixed maturities: U.S. Treasury and government agencies $ 447.1 $ 5.5 $ 3.5 $ 449.1 $ - Foreign government 244.7 2.6 1.5 245.8 - Municipal 1,074.5 50.0 4.2 1,120.3 - Corporate 3,699.9 86.8 95.7 3,691.0 27.5 Residential mortgage-backed 887.6 13.4 4.9 896.1 0.3 Commercial mortgage-backed 499.6 5.8 4.3 501.1 - Asset-backed 80.6 0.2 0.8 80.0 - Total fixed maturities $ 6,934.0 $ 164.3 $ 114.9 $ 6,983.4 $ 27.8 Equity securities $ 528.5 $ 55.7 $ 7.6 $ 576.6 $ - |
Investments Classified by Contractual Maturity Date | September 30, 2016 Amortized Fair (in millions) Cost Value Due in one year or less $ 375.0 $ 378.2 Due after one year through five years 2,575.9 2,692.0 Due after five years through ten years 2,120.6 2,220.4 Due after ten years 483.3 517.1 5,554.8 5,807.7 Mortgage-backed and asset-backed securities 1,545.6 1,592.5 Total fixed maturities $ 7,100.4 $ 7,400.2 |
Schedule of Unrealized Loss on Investments | September 30, 2016 12 months or less Greater than 12 months Total Gross Gross Gross Unrealized Fair Unrealized Fair Unrealized Fair (in millions) Losses Value Losses Value Losses Value Fixed maturities: Investment grade: U.S. Treasury and government agencies $ 0.1 $ 37.8 $ - $ - $ 0.1 $ 37.8 Foreign governments - 11.5 - 1.5 - 13.0 Municipal 0.2 43.7 0.9 31.7 1.1 75.4 Corporate 1.3 209.7 4.3 55.5 5.6 265.2 Residential mortgage-backed 0.2 122.3 0.8 40.1 1.0 162.4 Commercial mortgage-backed 0.4 56.8 - 7.1 0.4 63.9 Asset-backed 0.1 3.7 0.2 6.2 0.3 9.9 Total investment grade 2.3 485.5 6.2 142.1 8.5 627.6 Below investment grade: Corporate 0.9 30.1 13.2 105.2 14.1 135.3 Total fixed maturities 3.2 515.6 19.4 247.3 22.6 762.9 Equity securities 0.9 18.7 - - 0.9 18.7 Total $ 4.1 $ 534.3 $ 19.4 $ 247.3 $ 23.5 $ 781.6 December 31, 2015 12 months or less Greater than 12 months Total Gross Gross Gross Unrealized Fair Unrealized Fair Unrealized Fair (in millions) Losses Value Losses Value Losses Value Fixed maturities: Investment grade: U.S. Treasury and government agencies $ 1.5 $ 139.0 $ 2.0 $ 77.2 $ 3.5 $ 216.2 Foreign governments 0.8 63.6 0.7 8.4 1.5 72.0 Municipal 2.3 143.0 1.9 57.4 4.2 200.4 Corporate 30.7 1,138.3 18.9 122.3 49.6 1,260.6 Residential mortgage-backed 3.0 334.5 1.9 47.0 4.9 381.5 Commercial mortgage-backed 4.2 293.8 0.1 9.7 4.3 303.5 Asset-backed 0.8 56.6 - 1.4 0.8 58.0 Total investment grade 43.3 2,168.8 25.5 323.4 68.8 2,492.2 Below investment grade: Corporate 19.6 165.5 26.5 63.2 46.1 228.7 Total fixed maturities 62.9 2,334.3 52.0 386.6 114.9 2,720.9 Equity securities 7.6 166.8 - - 7.6 166.8 Total $ 70.5 $ 2,501.1 $ 52.0 $ 386.6 $ 122.5 $ 2,887.7 |
Schedule of Realized Gain (Loss) | Three Months Ended September 30, 2016 2015 Proceeds from Gross Gross Proceeds from Gross Gross (in millions) Sales Gains Losses Sales Gains Losses Fixed maturities $ 94.2 $ 3.6 $ 0.3 $ 145.2 $ 0.7 $ 0.6 Equity securities $ 20.7 $ - $ 1.2 $ 17.4 $ 4.1 $ 0.1 Nine Months Ended September 30, 2016 2015 Proceeds from Gross Gross Proceeds from Gross Gross (in millions) Sales Gains Losses Sales Gains Losses Fixed maturities $ 402.1 $ 9.5 $ 4.5 $ 969.9 $ 13.6 $ 5.3 Equity securities $ 194.1 $ 26.4 $ 2.9 $ 185.2 $ 24.2 $ 0.1 |
Rollforward of Cumulative Amounts Related to Credit Loss Portion of OTTI Losses | Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2016 2015 2016 2015 Credit losses at beginning of period $ 11.7 $ 6.1 $ 18.0 $ 4.2 Credit losses for which an OTTI was not previously recognized - 2.5 5.2 5.2 Additional credit losses on securities for which an OTTI was previously recognized 0.1 1.0 2.2 1.0 Reductions for securities sold, matured or called (2.3) - (3.9) (0.8) Reductions for securities reclassified as intended to sell - - (12.0) - Credit losses at end of period $ 9.5 $ 9.6 $ 9.5 $ 9.6 |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value [Abstract] | |
Fair Value of Financial Instruments | September 30, 2016 December 31, 2015 Carrying Fair Carrying Fair (in millions) Value Value Value Value Financial Assets Cash and cash equivalents $ 315.9 $ 315.9 $ 338.8 $ 338.8 Fixed maturities 7,400.2 7,400.2 6,983.4 6,983.4 Equity securities 612.5 612.5 576.6 576.6 Other investments 448.3 463.5 365.4 367.9 Total financial assets $ 8,776.9 $ 8,792.1 $ 8,264.2 $ 8,266.7 Financial Liabilities Debt $ 797.9 $ 895.9 $ 803.1 $ 927.8 |
Fair Value, Assets Measured on Recurring Basis | September 30, 2016 (in millions) Total Level 1 Level 2 Level 3 Fixed maturities: U.S. Treasury and government agencies $ 320.4 $ 174.2 $ 146.2 $ - Foreign government 242.7 48.3 194.4 - Municipal 1,136.4 - 1,104.1 32.3 Corporate 4,108.2 - 4,103.9 4.3 Residential mortgage-backed, U.S. agency backed 889.8 - 889.8 - Residential mortgage-backed, non-agency 54.5 - 54.5 - Commercial mortgage-backed 569.8 - 553.6 16.2 Asset-backed 78.4 - 78.4 - Total fixed maturities 7,400.2 222.5 7,124.9 52.8 Equity securities 603.8 602.4 - 1.4 Other investments 99.5 - 95.9 3.6 Total investment assets at fair value $ 8,103.5 $ 824.9 $ 7,220.8 $ 57.8 December 31, 2015 (in millions) Total Level 1 Level 2 Level 3 Fixed maturities: U.S. Treasury and government agencies $ 449.1 $ 193.6 $ 255.5 $ - Foreign government 245.8 52.5 193.3 - Municipal 1,120.3 - 1,085.9 34.4 Corporate 3,691.0 - 3,687.3 3.7 Residential mortgage-backed, U.S. agency backed 824.5 - 824.5 - Residential mortgage-backed, non-agency 71.6 - 71.6 - Commercial mortgage-backed 501.1 - 484.1 17.0 Asset-backed 80.0 - 79.5 0.5 Total fixed maturities 6,983.4 246.1 6,681.7 55.6 Equity securities 567.7 566.4 - 1.3 Other investments 104.5 - 100.9 3.6 Total investment assets at fair value $ 7,655.6 $ 812.5 $ 6,782.6 $ 60.5 |
Estimated Fair Values of Financial Instruments Not Carried at Fair Value | September 30, 2016 (in millions) Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 315.9 $ 315.9 $ - $ - Equity securities 8.7 - 8.7 - Other investments 290.7 - - 290.7 Liabilities: Debt $ 895.9 $ - $ 895.9 $ - December 31, 2015 (in millions) Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 338.8 $ 338.8 $ - $ - Equity securities 8.9 - 8.9 - Other investments 203.5 - - 203.5 Liabilities: Debt $ 927.8 $ - $ 927.8 $ - |
Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3) | Fixed Maturities (in millions) Municipal Corporate Commercial mortgage-backed Asset-backed Total Equity and Other Total Assets Three Months Ended September 30, 2016 Balance July 1, 2016 $ 34.4 $ 4.4 $ 16.7 $ 0.4 $ 55.9 $ 4.9 $ 60.8 Transfers out of Level 3 (1.2) - - - (1.2) - (1.2) Total (losses) gains: Included in other comprehensive income - net (depreciation) appreciation on available-for-sale securities (0.1) (0.1) (0.1) - (0.3) 0.1 (0.2) Sales (0.8) - (0.4) (0.4) (1.6) - (1.6) Balance September 30, 2016 $ 32.3 $ 4.3 $ 16.2 $ - $ 52.8 $ 5.0 $ 57.8 Three Months Ended September 30, 2015 Balance July 1, 2015 $ 27.0 $ 9.4 $ 18.0 $ 1.3 $ 55.7 $ 5.1 $ 60.8 Transfers out of Level 3 - (4.6) - - (4.6) - (4.6) Total gains (losses): Included in total net realized investment gains - - 0.1 - 0.1 - 0.1 Included in other comprehensive income - net appreciation (depreciation) on available-for-sale securities 0.4 - (0.1) (0.1) 0.2 - 0.2 Purchases and sales: Purchases 3.1 - - - 3.1 - 3.1 Sales (0.5) (0.1) (0.3) - (0.9) - (0.9) Balance September 30, 2015 $ 30.0 $ 4.7 $ 17.7 $ 1.2 $ 53.6 $ 5.1 $ 58.7 Fixed Maturities (in millions) Municipal Corporate Commercial mortgage-backed Asset-backed Total Equity and Other Total Assets Nine Months Ended September 30, 2016 Balance January 1, 2016 $ 34.4 $ 3.7 $ 17.0 $ 0.5 $ 55.6 $ 4.9 $ 60.5 Transfers out of Level 3 (1.2) - - - (1.2) - (1.2) Total gains (losses): Included in total net realized investment gains 0.1 (0.2) - - (0.1) - (0.1) Included in other comprehensive income-net appreciation on available-for-sale securities 1.5 0.6 0.6 - 2.7 0.1 2.8 Purchases and sales: Purchases - 0.3 - - 0.3 - 0.3 Sales (2.5) (0.1) (1.4) (0.5) (4.5) - (4.5) Balance September 30, 2016 $ 32.3 $ 4.3 $ 16.2 $ - $ 52.8 $ 5.0 $ 57.8 Nine Months Ended September 30, 2015 Balance January 1, 2015 $ 25.7 $ 9.6 $ 21.4 $ - $ 56.7 $ 5.0 $ 61.7 Transfers into Level 3 - - - 1.3 1.3 - 1.3 Transfers out of Level 3 - (4.6) - - (4.6) - (4.6) Total gains (losses): Included in total net realized investment gains - 0.1 0.1 - 0.2 - 0.2 Included in other comprehensive income-net (depreciation) appreciation on available-for-sale securities (0.4) (0.2) (0.7) (0.1) (1.4) 0.1 (1.3) Purchases and sales: Purchases 6.2 - - - 6.2 - 6.2 Sales (1.5) (0.2) (3.1) - (4.8) - (4.8) Balance September 30, 2015 $ 30.0 $ 4.7 $ 17.7 $ 1.2 $ 53.6 $ 5.1 $ 58.7 |
Schedule of Additional Information About Significant Unobservable Inputs Used in Fair Valuations of Level 3 | September 30, 2016 December 31, 2015 Valuation Significant Fair Range Fair Range (in millions) Technique Unobservable Inputs Value (Wtd Average) Value (Wtd Average) Fixed maturities: Municipal Discounted Discount for: $ 32.3 $ 34.4 cash flow Small issue size Credit stress Above-market coupon 0.7 -6.8% ( 3.3% ) 0.9 - 1.5% ( 1.2% ) 0.3 - 1.0% ( 0.4% ) 0.6 - 6.8% ( 3.2% ) 0.9 - 1.5% ( 1.2% ) 0.3 - 1.0% ( 0.4% ) Corporate Discounted Discount for: 4.1 3.7 cash flow Small issue size Credit stress Above-market coupon 2.0 - 2.5% ( 2.1% ) 1.0% ( 1.0% ) 0.3 - 0.8% ( 0.6% ) 1.0% ( 1.0% ) 10.0% ( 10.0% ) 0.3 - 0.8% ( 0.6% ) Commercial mortgage-backed Discounted Discount for: 16.2 17.0 cash flow Small issue size Above-market coupon Lease structure 1.5 - 3.1% ( 2.6% ) 0.5% ( 0.5% ) 0.3% ( 0.3% ) 0.5 - 1.0% ( 0.5% ) 0.5% ( 0.5% ) 0.3% ( 0.3% ) Asset-backed Discounted Discount for: - 0.5 cash flow Small issue size N/A 0.7% ( 0.7% ) Equity securities Market Net tangible asset 1.1 1.1 comparables market multiples 1.0X ( 1.0X ) 1.0X ( 1.0X ) Other Discounted Discount rate 3.6 18.0% ( 18.0% ) 3.6 18.0% ( 18.0% ) cash flow |
Pension and Other Postretirem25
Pension and Other Postretirement Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Pension and Other Postretirement Benefit Plans [Abstract] | |
Components of Net Periodic Pension Cost | Three Months Ended September 30, 2016 2015 2016 2015 (in millions) Pension Plans Postretirement Plans Service cost - benefits earned during the period $ 0.2 $ 0.2 $ - $ - Interest cost 7.4 7.4 0.2 0.1 Expected return on plan assets (7.4) (8.0) - - Recognized net actuarial loss 2.8 3.1 - - Amortization of prior service cost - - (0.3) (0.3) Net periodic pension cost (benefit) $ 3.0 $ 2.7 $ (0.1) $ (0.2) Nine Months Ended September 30, 2016 2015 2016 2015 (in millions) Pension Plans Postretirement Plans Service cost - benefits earned during the period $ 0.6 $ 0.9 $ - $ - Interest cost 22.2 22.0 0.4 0.4 Expected return on plan assets (22.4) (23.7) - - Recognized net actuarial loss 8.4 10.9 0.1 0.1 Amortization of prior service cost - - (1.0) (1.0) Curtailment gain - (1.8) - - Net periodic pension cost (benefit) $ 8.8 $ 8.3 $ (0.5) $ (0.5) |
Other Comprehensive Income (Tab
Other Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Other Comprehensive Income [Abstract] | |
Changes in Other Comprehensive Income | Three Months Ended September 30, 2016 2015 Tax Tax Benefit Net of Benefit Net of (in millions) Pre-Tax (Expense) Tax Pre-Tax (Expense) Tax Unrealized gains (losses) on available-for-sale securities: Unrealized gains (losses) arising during period $ 8.1 $ (2.9) $ 5.2 $ (47.0) $ 16.5 $ (30.5) Amount of realized gains from sales and other (3.4) (3.9) (7.3) (5.9) (1.4) (7.3) Portion of other-than-temporary impairment losses recognized in earnings 0.1 - 0.1 4.2 (1.5) 2.7 Net unrealized gains (losses) 4.8 (6.8) (2.0) (48.7) 13.6 (35.1) Pension and postretirement benefits: Amortization of net actuarial loss and prior service cost recognized as net periodic benefit cost 2.5 (1.0) 1.5 2.7 (1.0) 1.7 Cumulative foreign currency translation adjustment: Foreign currency translation recognized during the period (2.9) 1.0 (1.9) (4.0) 1.4 (2.6) Other comprehensive income (loss) $ 4.4 $ (6.8) $ (2.4) $ (50.0) $ 14.0 $ (36.0) Nine Months Ended September 30, 2016 2015 Tax Tax Benefit Net of Benefit Net of (in millions) Pre-Tax (Expense) Tax Pre-Tax (Expense) Tax Unrealized gains (losses) on available-for-sale securities: Unrealized gains (losses) arising during period $ 290.1 $ (101.5) $ 188.6 $ (120.5) $ 42.2 $ (78.3) Amount of realized gains from sales and other (30.7) (3.3) (34.0) (32.3) 1.9 (30.4) Portion of other-than-temporary impairment losses recognized in earnings 26.0 (9.1) 16.9 8.8 (3.1) 5.7 Net unrealized gains (losses) 285.4 (113.9) 171.5 (144.0) 41.0 (103.0) Pension and postretirement benefits: Net actuarial losses and prior service cost arising in the period - - - (1.2) (0.2) (1.4) Amortization of net actuarial loss and prior service cost recognized as net periodic benefit cost 7.5 (2.7) 4.8 10.0 (3.2) 6.8 Net pension and postretirement benefits 7.5 (2.7) 4.8 8.8 (3.4) 5.4 Cumulative foreign currency translation adjustment: Foreign currency translation recognized during the period (4.9) 1.7 (3.2) (7.4) 2.6 (4.8) Other comprehensive income (loss) $ 288.0 $ (114.9) $ 173.1 $ (142.6) $ 40.2 $ (102.4) |
Reclassifications Out of Accumulated Other Comprehensive Income | Three Months Ended Nine Months Ended September 30, September 30, (in millions) 2016 2015 2016 2015 Amount Reclassified from Details about Accumulated Other Accumulated Other Affected Line Item in the Statement Comprehensive Income Components Comprehensive Income Where Net Income is Presented Unrealized gains on available-for-sale securities $ 3.4 $ 5.9 $ 30.7 $ 32.3 Net realized gains from sales and other Net other-than-temporary impairment (0.1) (4.2) (26.0) (8.8) losses on investments recognized in earnings 3.3 1.7 4.7 23.5 Total before tax 3.9 2.9 12.4 1.2 Tax benefit 7.2 4.6 17.1 24.7 Net of tax Amortization of defined benefit Loss adjustment expenses and other pension and postretirement plans (2.5) (2.7) (7.5) (10.0) operating expenses 1.0 1.0 2.7 3.2 Tax benefit (1.5) (1.7) (4.8) (6.8) Net of tax Total reclassifications for the period $ 5.7 $ 2.9 $ 12.3 $ 17.9 Benefit to income, net of tax |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Information [Abstract] | |
Financial Information with Respect to Business Segments | Three Months Ended Nine Months Ended September 30, September 30, (in millions) 2016 2015 2016 2015 Operating revenues: Commercial Lines $ 628.4 $ 601.2 $ 1,857.2 $ 1,786.7 Personal Lines 391.5 379.7 1,154.8 1,131.4 Chaucer 215.0 242.7 667.9 875.5 Other 2.1 1.9 5.9 5.7 Total 1,237.0 1,225.5 3,685.8 3,799.3 Net realized investment gains 4.2 8.0 5.0 30.0 Total revenues $ 1,241.2 $ 1,233.5 $ 3,690.8 $ 3,829.3 Operating income (loss) before interest expense and income taxes: Commercial Lines: Underwriting income $ 3.6 $ 8.3 $ 12.4 $ 10.9 Net investment income 39.0 38.7 117.5 116.7 Other (expenses) income (0.1) 0.1 (0.7) (1.1) Commercial Lines operating income 42.5 47.1 129.2 126.5 Personal Lines: Underwriting income 23.3 17.9 81.2 34.3 Net investment income 17.1 18.0 51.6 54.2 Other income 1.3 1.3 3.4 3.1 Personal Lines operating income 41.7 37.2 136.2 91.6 Chaucer: Underwriting income 37.8 29.6 53.8 92.7 Net investment income 10.3 10.5 32.3 34.8 Other income 0.3 1.1 1.5 4.9 Chaucer operating income 48.4 41.2 87.6 132.4 Other: Underwriting loss (0.8) (0.9) (2.1) (2.3) Net investment income 1.4 1.1 3.8 3.4 Other net expenses (3.4) (3.1) (9.8) (9.1) Other operating loss (2.8) (2.9) (8.1) (8.0) Operating income before interest expense and income taxes 129.8 122.6 344.9 342.5 Interest on debt (12.5) (14.8) (42.8) (45.9) Operating income before income taxes 117.3 107.8 302.1 296.6 Non-operating income items: Net realized investment gains 4.2 8.0 5.0 30.0 Net gain on disposal of U.K. motor business 0.1 - 1.3 37.7 Net loss from repayment of debt - (5.6) (86.1) (24.1) Other non-operating items 2.5 0.2 2.8 (0.2) Income before income taxes $ 124.1 $ 110.4 $ 225.1 $ 340.0 |
Identifiable Assets by Business Segment | September 30, 2016 December 31, 2015 (in millions) Identifiable Assets U.S. Companies $ 10,124.7 $ 9,616.0 Chaucer 4,155.0 4,082.2 Discontinued operations 84.0 83.0 Total $ 14,363.7 $ 13,781.2 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Stock-based Compensation [Abstract] | |
Compensation Cost and Related Tax Benefits | Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2016 2015 2016 2015 Stock-based compensation expense $ 3.0 $ 1.9 $ 8.5 $ 9.4 Tax benefit (1.1) (0.7) (3.0) (3.3) Stock-based compensation expense, net of taxes $ 1.9 $ 1.2 $ 5.5 $ 6.1 |
Summary of Stock Option Plan Activity | Nine Months Ended September 30, 2016 2015 (in whole shares and dollars) Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Outstanding, beginning of period 1,619,948 $ 56.57 2,236,620 $ 46.61 Granted 524,940 82.74 663,900 70.34 Exercised (564,389) 48.80 (377,188) 45.66 Forfeited or cancelled (207,203) 68.23 (117,640) 53.39 Outstanding, end of period (1) 1,373,296 68.01 2,405,692 52.98 (1) Included in the table above in outstanding shares for the nine months ended September 30, 2015 were 128,334 options that were previously granted to the Company’s former CEO. These options subsequently forfeited in 2016 and are included above in the amounts forfeited or cancelled for the nine months ended September 30, 2016. |
Summary of Restricted Stock Activity | Nine Months Ended September 30, 2016 2015 (in whole shares and dollars) Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Time-based restricted stock units: Outstanding, beginning of period 301,897 $ 54.54 384,923 $ 45.63 Granted 143,107 83.43 92,409 70.61 Vested (136,398) 42.49 (119,117) 40.94 Forfeited (27,411) 68.07 (31,573) 51.10 Outstanding, end of period 281,195 73.77 326,642 53.88 Performance-based and market-based restricted stock units: Outstanding, beginning of period 196,142 $ 47.89 218,338 $ 44.24 Granted 118,736 73.14 82,025 48.55 Vested (144,141) 41.11 (77,854) 38.82 Forfeited (63,740) 64.13 (14,451) 44.68 Outstanding, end of period (1) 106,997 75.38 208,058 47.93 (1) Included in the table above in outstanding shares for the nine months ended September 30, 2015 were 56,500 market-based restricted stock units that were previously granted to the Company’s former CEO. These units subsequently forfeited in 2016 and are included above in the amounts forfeited for the nine months ended September 30, 2016. |
Earnings Per Share and Shareh29
Earnings Per Share and Shareholders' Equity Transactions (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share and Shareholders’ Equity Transactions [Abstract] | |
Information Regarding Basic and Diluted Earnings Per Share | Three Months Ended Nine Months Ended September 30, September 30, (in millions, except per share data) 2016 2015 2016 2015 Basic shares used in the calculation of earnings per share 42.7 44.0 42.8 44.1 Dilutive effect of securities: Employee stock options 0.2 0.5 0.3 0.5 Non-vested stock grants 0.1 0.4 0.2 0.4 Diluted shares used in the calculation of earnings per share 43.0 44.9 43.3 45.0 Per share effect of dilutive securities on income from continuing operations $ (0.01) $ (0.03) $ (0.04) $ (0.11) Per share effect of dilutive securities on net income $ (0.01) $ (0.04) $ (0.05) $ (0.11) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Income Taxes [Abstract] | ||
Federal income tax expense | $ 28.9 | $ 62.2 |
Foreign income tax expense | 27.9 | 24.8 |
Foreign income permanently reinvested | 18.7 | $ 65.2 |
Estimated taxes payable on undistributed earnings | $ 51.9 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) - USD ($) | May 21, 2016 | Apr. 08, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 |
Debt Instrument [Line Items] | |||||
Gain (loss) on the redemption of debt | $ (86,100,000) | $ (5,600,000) | $ (86,100,000) | $ (24,100,000) | |
Senior debentures maturing April 15, 2026 [Member] | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 375,000,000 | ||||
Debt instrument interest rate | 4.50% | ||||
Proceeds from Issuance of Debt | $ 370,500,000 | ||||
Senior debentures maturing March 1, 2020 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument interest rate | 7.50% | ||||
Senior debentures maturing June 15, 2021 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument interest rate | 6.375% |
Debt (Schedule of Long-Term Deb
Debt (Schedule of Long-Term Debt) (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Total principal debt | $ 809.3 | $ 814.3 |
Unamortized debt issuance costs | (11.4) | (11.2) |
Total | 797.9 | 803.1 |
Federal Home Loan Bank of Boston [Member] | ||
Debt Instrument [Line Items] | ||
Total principal debt | 125 | 125 |
Senior debentures maturing April 15, 2026 [Member] | ||
Debt Instrument [Line Items] | ||
Total principal debt | 375 | |
Senior debentures maturing June 15, 2021 [Member] | ||
Debt Instrument [Line Items] | ||
Total principal debt | 300 | |
Senior debentures maturing March 1, 2020 [Member] | ||
Debt Instrument [Line Items] | ||
Total principal debt | 80 | |
Senior debentures maturing October 15, 2025 [Member] | ||
Debt Instrument [Line Items] | ||
Total principal debt | 74.6 | 74.6 |
Subordinated debentures maturing March 30, 2053 [Member] | ||
Debt Instrument [Line Items] | ||
Total principal debt | 175 | 175 |
Subordinated debentures maturing February 3, 2027 [Member] | ||
Debt Instrument [Line Items] | ||
Total principal debt | $ 59.7 | $ 59.7 |
Investments (Narrative) (Detail
Investments (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Investments [Line Items] | |||||
Net unrealized gains on impaired securities | $ 21.1 | $ 21.1 | $ 1.1 | ||
Restricted assets, fixed maturities | 507 | 507 | |||
Restricted assets, cash and cash equivalents | 4 | 4 | |||
Other-than-temporary impairments recognized in earnings | 0.1 | $ 4.2 | 26 | $ 8.8 | |
Fixed Maturities And Equity Securities [Member] | |||||
Investments [Line Items] | |||||
Other-than-temporary impairments | 19.2 | 20.9 | |||
Other-than-temporary impairments recognized in earnings | 26 | 8.8 | |||
Other-than-temporary impairments recorded in accumulated other comprehensive income | $ 6.8 | ||||
Other-than-temporary impairments recorded as unrealized losses in AOCI | 12.1 | ||||
Fixed Maturities [Member] | |||||
Investments [Line Items] | |||||
Other-than-temporary impairments | 9.5 | ||||
Other-than-temporary impairments recognized in earnings | 4.2 | ||||
Other-than-temporary impairments recorded in accumulated other comprehensive income | $ 0.1 | ||||
Other-than-temporary impairments recorded as unrealized losses in AOCI | $ 5.3 | ||||
Fixed Maturities [Member] | U.K. Motor Business [Member] | |||||
Investments [Line Items] | |||||
Proceeds from Sales | 379.6 | ||||
Gross Gains | 6.4 | ||||
Gross Losses | $ 0.6 |
Investments (Schedule of Availa
Investments (Schedule of Available-for-sale Securities Reconciliation) (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Debt Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost or Cost | $ 7,100.4 | $ 6,934 |
Gross Unrealized Gains | 322.4 | 164.3 |
Gross Unrealized Loss | 22.6 | 114.9 |
Fair Value | 7,400.2 | 6,983.4 |
OTTI Unrealized Losses | 16.1 | 27.8 |
US Treasury and Government Agencies [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost or Cost | 311.1 | 447.1 |
Gross Unrealized Gains | 9.4 | 5.5 |
Gross Unrealized Loss | 0.1 | 3.5 |
Fair Value | 320.4 | 449.1 |
Foreign Government [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost or Cost | 234.5 | 244.7 |
Gross Unrealized Gains | 8.2 | 2.6 |
Gross Unrealized Loss | 1.5 | |
Fair Value | 242.7 | 245.8 |
Municipal [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost or Cost | 1,071.8 | 1,074.5 |
Gross Unrealized Gains | 65.7 | 50 |
Gross Unrealized Loss | 1.1 | 4.2 |
Fair Value | 1,136.4 | 1,120.3 |
Corporate [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost or Cost | 3,937.4 | 3,699.9 |
Gross Unrealized Gains | 190.5 | 86.8 |
Gross Unrealized Loss | 19.7 | 95.7 |
Fair Value | 4,108.2 | 3,691 |
OTTI Unrealized Losses | 15.8 | 27.5 |
Residential Mortgage Backed [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost or Cost | 921.8 | 887.6 |
Gross Unrealized Gains | 23.5 | 13.4 |
Gross Unrealized Loss | 1 | 4.9 |
Fair Value | 944.3 | 896.1 |
OTTI Unrealized Losses | 0.3 | 0.3 |
Commercial Mortgage Backed [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost or Cost | 546.5 | 499.6 |
Gross Unrealized Gains | 23.7 | 5.8 |
Gross Unrealized Loss | 0.4 | 4.3 |
Fair Value | 569.8 | 501.1 |
Asset-backed [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost or Cost | 77.3 | 80.6 |
Gross Unrealized Gains | 1.4 | 0.2 |
Gross Unrealized Loss | 0.3 | 0.8 |
Fair Value | 78.4 | 80 |
Equity Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost or Cost | 533.6 | 528.5 |
Gross Unrealized Gains | 79.8 | 55.7 |
Gross Unrealized Loss | 0.9 | 7.6 |
Fair Value | $ 612.5 | $ 576.6 |
Investments (Investments Classi
Investments (Investments Classified by Contractual Maturity Date) (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Investments [Abstract] | ||
Due in one year or less, Amortized Cost | $ 375 | |
Due after one year through five years, Amortized Cost | 2,575.9 | |
Due after five years through ten years, Amortized Cost | 2,120.6 | |
Due after ten years, Amortized Cost | 483.3 | |
Gross fixed maturities, Amortized Cost | 5,554.8 | |
Mortgage-backed and asset-backed securities, Amortized Cost | 1,545.6 | |
Total fixed maturities, Amortized Cost | 7,100.4 | $ 6,934 |
Due in one year or less, Fair Value | 378.2 | |
Due after one year through five years, Fair Value | 2,692 | |
Due after five years through ten years, Fair Value | 2,220.4 | |
Due after ten years, Fair Value | 517.1 | |
Gross fixed maturities, Fair Value | 5,807.7 | |
Mortgage-backed and asset-backed securities, Fair Value | 1,592.5 | |
Fixed maturities, Fair Value | $ 7,400.2 | $ 6,983.4 |
Investments (Schedule of Unreal
Investments (Schedule of Unrealized Loss on Investments) (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | $ 4.1 | $ 70.5 |
12 months or less, Fair Value | 534.3 | 2,501.1 |
Greater than 12 months, Gross Unrealized Losses | 19.4 | 52 |
Greater than 12 months, Fair Value | 247.3 | 386.6 |
Total, Gross Unrealized Losses | 23.5 | 122.5 |
Total, Fair Value | 781.6 | 2,887.7 |
Investment grade [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 2.3 | 43.3 |
12 months or less, Fair Value | 485.5 | 2,168.8 |
Greater than 12 months, Gross Unrealized Losses | 6.2 | 25.5 |
Greater than 12 months, Fair Value | 142.1 | 323.4 |
Total, Gross Unrealized Losses | 8.5 | 68.8 |
Total, Fair Value | 627.6 | 2,492.2 |
Debt Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 3.2 | 62.9 |
12 months or less, Fair Value | 515.6 | 2,334.3 |
Greater than 12 months, Gross Unrealized Losses | 19.4 | 52 |
Greater than 12 months, Fair Value | 247.3 | 386.6 |
Total, Gross Unrealized Losses | 22.6 | 114.9 |
Total, Fair Value | 762.9 | 2,720.9 |
US Treasury and Government Agencies [Member] | Investment grade [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 0.1 | 1.5 |
12 months or less, Fair Value | 37.8 | 139 |
Greater than 12 months, Gross Unrealized Losses | 2 | |
Greater than 12 months, Fair Value | 77.2 | |
Total, Gross Unrealized Losses | 0.1 | 3.5 |
Total, Fair Value | 37.8 | 216.2 |
Foreign Government [Member] | Investment grade [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 0.8 | |
12 months or less, Fair Value | 11.5 | 63.6 |
Greater than 12 months, Gross Unrealized Losses | 0.7 | |
Greater than 12 months, Fair Value | 1.5 | 8.4 |
Total, Gross Unrealized Losses | 1.5 | |
Total, Fair Value | 13 | 72 |
Municipal [Member] | Investment grade [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 0.2 | 2.3 |
12 months or less, Fair Value | 43.7 | 143 |
Greater than 12 months, Gross Unrealized Losses | 0.9 | 1.9 |
Greater than 12 months, Fair Value | 31.7 | 57.4 |
Total, Gross Unrealized Losses | 1.1 | 4.2 |
Total, Fair Value | 75.4 | 200.4 |
Corporate [Member] | Investment grade [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 1.3 | 30.7 |
12 months or less, Fair Value | 209.7 | 1,138.3 |
Greater than 12 months, Gross Unrealized Losses | 4.3 | 18.9 |
Greater than 12 months, Fair Value | 55.5 | 122.3 |
Total, Gross Unrealized Losses | 5.6 | 49.6 |
Total, Fair Value | 265.2 | 1,260.6 |
Corporate [Member] | Below Investment Grade [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 0.9 | 19.6 |
12 months or less, Fair Value | 30.1 | 165.5 |
Greater than 12 months, Gross Unrealized Losses | 13.2 | 26.5 |
Greater than 12 months, Fair Value | 105.2 | 63.2 |
Total, Gross Unrealized Losses | 14.1 | 46.1 |
Total, Fair Value | 135.3 | 228.7 |
Residential Mortgage Backed [Member] | Investment grade [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 0.2 | 3 |
12 months or less, Fair Value | 122.3 | 334.5 |
Greater than 12 months, Gross Unrealized Losses | 0.8 | 1.9 |
Greater than 12 months, Fair Value | 40.1 | 47 |
Total, Gross Unrealized Losses | 1 | 4.9 |
Total, Fair Value | 162.4 | 381.5 |
Commercial Mortgage Backed [Member] | Investment grade [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 0.4 | 4.2 |
12 months or less, Fair Value | 56.8 | 293.8 |
Greater than 12 months, Gross Unrealized Losses | 0.1 | |
Greater than 12 months, Fair Value | 7.1 | 9.7 |
Total, Gross Unrealized Losses | 0.4 | 4.3 |
Total, Fair Value | 63.9 | 303.5 |
Asset-backed [Member] | Investment grade [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 0.1 | 0.8 |
12 months or less, Fair Value | 3.7 | 56.6 |
Greater than 12 months, Gross Unrealized Losses | 0.2 | |
Greater than 12 months, Fair Value | 6.2 | 1.4 |
Total, Gross Unrealized Losses | 0.3 | 0.8 |
Total, Fair Value | 9.9 | 58 |
Equity Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 0.9 | 7.6 |
12 months or less, Fair Value | 18.7 | 166.8 |
Total, Gross Unrealized Losses | 0.9 | 7.6 |
Total, Fair Value | $ 18.7 | $ 166.8 |
Investments (Schedule of Realiz
Investments (Schedule of Realized Gain (Loss)) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Fixed Maturities [Member] | ||||
Gain (Loss) on Investments [Line Items] | ||||
Proceeds from Sales | $ 94.2 | $ 145.2 | $ 402.1 | $ 969.9 |
Gross Gains | 3.6 | 0.7 | 9.5 | 13.6 |
Gross Losses | 0.3 | 0.6 | 4.5 | 5.3 |
Equity Securities [Member] | ||||
Gain (Loss) on Investments [Line Items] | ||||
Proceeds from Sales | 20.7 | 17.4 | 194.1 | 185.2 |
Gross Gains | 4.1 | 26.4 | 24.2 | |
Gross Losses | $ 1.2 | $ 0.1 | $ 2.9 | $ 0.1 |
Investments (Rollforward of Cum
Investments (Rollforward of Cumulative Amounts Related to Credit Loss Portion of OTTI Losses) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Investments [Abstract] | ||||
Credit losses at beginning of period | $ 11.7 | $ 6.1 | $ 18 | $ 4.2 |
Credit losses for which an OTTI was not previously recognized | 2.5 | 5.2 | 5.2 | |
Additional credit losses on securities for which an OTTI was previously recognized | 0.1 | 1 | 2.2 | 1 |
Reductions for securities sold, matured or called | (2.3) | (3.9) | (0.8) | |
Reductions for securities reclassified as intended to sell | (12) | |||
Credit losses at end of period | $ 9.5 | $ 9.6 | $ 9.5 | $ 9.6 |
Fair Value (Narrative) (Details
Fair Value (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Fair Value Measurements [Line Items] | ||||
Transfer between Level 1 and Level 2 | $ 0 | $ 0 | $ 0 | $ 0 |
Level 3 | ||||
Fair Value Measurements [Line Items] | ||||
Liabilities held | 0 | $ 0 | 0 | $ 0 |
Securities excluded due to lack of transparency | $ 500,000 | $ 500,000 |
Fair Value (Fair Value of Finan
Fair Value (Fair Value of Financial Instruments) (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | $ 315.9 | $ 338.8 |
Fixed maturities | 7,400.2 | 6,983.4 |
Equity securities | 612.5 | 576.6 |
Debt | 797.9 | 803.1 |
Carrying Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | 315.9 | 338.8 |
Fixed maturities | 7,400.2 | 6,983.4 |
Equity securities | 612.5 | 576.6 |
Other investments | 448.3 | 365.4 |
Total financial assets | 8,776.9 | 8,264.2 |
Debt | 797.9 | 803.1 |
Estimated Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | 315.9 | 338.8 |
Fixed maturities | 7,400.2 | 6,983.4 |
Equity securities | 612.5 | 576.6 |
Other investments | 463.5 | 367.9 |
Total financial assets | 8,792.1 | 8,266.7 |
Debt | $ 895.9 | $ 927.8 |
Fair Value (Assets and Liabilit
Fair Value (Assets and Liabilities Measured at Fair Value on Recurring Basis) (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | $ 7,400.2 | $ 6,983.4 |
Equity securities | 612.5 | 576.6 |
Other investments | 483.4 | 393.4 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 7,400.2 | 6,983.4 |
Equity securities | 603.8 | 567.7 |
Other investments | 99.5 | 104.5 |
Total investment assets at fair value | 8,103.5 | 7,655.6 |
Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 222.5 | 246.1 |
Equity securities | 602.4 | 566.4 |
Total investment assets at fair value | 824.9 | 812.5 |
Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 7,124.9 | 6,681.7 |
Other investments | 95.9 | 100.9 |
Total investment assets at fair value | 7,220.8 | 6,782.6 |
Fair Value, Measurements, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 52.8 | 55.6 |
Equity securities | 1.4 | 1.3 |
Other investments | 3.6 | 3.6 |
Total investment assets at fair value | 57.8 | 60.5 |
Fair Value, Measurements, Recurring | U.S. Treasury And Government Agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 320.4 | 449.1 |
Fair Value, Measurements, Recurring | U.S. Treasury And Government Agencies | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 174.2 | 193.6 |
Fair Value, Measurements, Recurring | U.S. Treasury And Government Agencies | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 146.2 | 255.5 |
Fair Value, Measurements, Recurring | Foreign Government [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 242.7 | 245.8 |
Fair Value, Measurements, Recurring | Foreign Government [Member] | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 48.3 | 52.5 |
Fair Value, Measurements, Recurring | Foreign Government [Member] | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 194.4 | 193.3 |
Fair Value, Measurements, Recurring | Municipal [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 1,136.4 | 1,120.3 |
Fair Value, Measurements, Recurring | Municipal [Member] | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 1,104.1 | 1,085.9 |
Fair Value, Measurements, Recurring | Municipal [Member] | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 32.3 | 34.4 |
Fair Value, Measurements, Recurring | Corporate [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 4,108.2 | 3,691 |
Fair Value, Measurements, Recurring | Corporate [Member] | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 4,103.9 | 3,687.3 |
Fair Value, Measurements, Recurring | Corporate [Member] | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 4.3 | 3.7 |
Fair Value, Measurements, Recurring | Residential Mortgage Backed Securities U S Agency Backed | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 889.8 | 824.5 |
Fair Value, Measurements, Recurring | Residential Mortgage Backed Securities U S Agency Backed | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 889.8 | 824.5 |
Fair Value, Measurements, Recurring | Residential Mortgage Backed [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 54.5 | 71.6 |
Fair Value, Measurements, Recurring | Residential Mortgage Backed [Member] | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 54.5 | 71.6 |
Fair Value, Measurements, Recurring | Commercial Mortgage Backed [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 569.8 | 501.1 |
Fair Value, Measurements, Recurring | Commercial Mortgage Backed [Member] | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 553.6 | 484.1 |
Fair Value, Measurements, Recurring | Commercial Mortgage Backed [Member] | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 16.2 | 17 |
Fair Value, Measurements, Recurring | Asset-backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 78.4 | 80 |
Fair Value, Measurements, Recurring | Asset-backed Securities [Member] | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | $ 78.4 | 79.5 |
Fair Value, Measurements, Recurring | Asset-backed Securities [Member] | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | $ 0.5 |
Fair Value (Estimated Fair Valu
Fair Value (Estimated Fair Values of Financial Instruments Not Carried at Fair Value) (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | $ 315.9 | $ 338.8 |
Equity securities | 8.7 | 8.9 |
Other investments | 290.7 | 203.5 |
Debt | 895.9 | 927.8 |
Net Asset Value Based On An Ownership Interest In Partners’ Capital [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of investments | $ 73.3 | $ 59.9 |
Investments measured at net asset value based on an ownership interest in partners’ | 1.00% | 1.00% |
Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | $ 315.9 | $ 338.8 |
Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Equity securities | 8.7 | 8.9 |
Debt | 895.9 | 927.8 |
Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other investments | 290.7 | 203.5 |
Carrying Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | 315.9 | 338.8 |
Estimated Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | $ 315.9 | $ 338.8 |
Fair Value (Fair Value on Recur
Fair Value (Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Beginning Balance | $ 60.8 | $ 60.8 | $ 60.5 | $ 61.7 |
Transfers into Level 3 | 1.3 | |||
Transfers out of Level 3 | (1.2) | (4.6) | (1.2) | (4.6) |
Included in total net realized investment gains | 0.1 | (0.1) | 0.2 | |
Included in other comprehensive income - net appreciation (depreciation) on available-for-sale securities | (0.2) | 0.2 | 2.8 | (1.3) |
Purchases | 3.1 | 0.3 | 6.2 | |
Sales | (1.6) | (0.9) | (4.5) | (4.8) |
Ending Balance | 57.8 | 58.7 | 57.8 | 58.7 |
Fixed Maturities [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Beginning Balance | 55.9 | 55.7 | 55.6 | 56.7 |
Transfers into Level 3 | 1.3 | |||
Transfers out of Level 3 | (1.2) | (4.6) | (1.2) | (4.6) |
Included in total net realized investment gains | 0.1 | (0.1) | 0.2 | |
Included in other comprehensive income - net appreciation (depreciation) on available-for-sale securities | (0.3) | 0.2 | 2.7 | (1.4) |
Purchases | 3.1 | 0.3 | 6.2 | |
Sales | (1.6) | (0.9) | (4.5) | (4.8) |
Ending Balance | 52.8 | 53.6 | 52.8 | 53.6 |
Fixed Maturities [Member] | Municipal [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Beginning Balance | 34.4 | 27 | 34.4 | 25.7 |
Transfers out of Level 3 | (1.2) | (1.2) | ||
Included in total net realized investment gains | 0.1 | |||
Included in other comprehensive income - net appreciation (depreciation) on available-for-sale securities | (0.1) | 0.4 | 1.5 | (0.4) |
Purchases | 3.1 | 6.2 | ||
Sales | (0.8) | (0.5) | (2.5) | (1.5) |
Ending Balance | 32.3 | 30 | 32.3 | 30 |
Fixed Maturities [Member] | Corporate [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Beginning Balance | 4.4 | 9.4 | 3.7 | 9.6 |
Transfers out of Level 3 | (4.6) | (4.6) | ||
Included in total net realized investment gains | (0.2) | 0.1 | ||
Included in other comprehensive income - net appreciation (depreciation) on available-for-sale securities | (0.1) | 0.6 | (0.2) | |
Purchases | 0.3 | |||
Sales | (0.1) | (0.1) | (0.2) | |
Ending Balance | 4.3 | 4.7 | 4.3 | 4.7 |
Fixed Maturities [Member] | Commercial Mortgage Backed [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Beginning Balance | 16.7 | 18 | 17 | 21.4 |
Included in total net realized investment gains | 0.1 | 0.1 | ||
Included in other comprehensive income - net appreciation (depreciation) on available-for-sale securities | (0.1) | (0.1) | 0.6 | (0.7) |
Sales | (0.4) | (0.3) | (1.4) | (3.1) |
Ending Balance | 16.2 | 17.7 | 16.2 | 17.7 |
Fixed Maturities [Member] | Asset-backed Securities [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Beginning Balance | 0.4 | 1.3 | 0.5 | |
Transfers into Level 3 | 1.3 | |||
Included in other comprehensive income - net appreciation (depreciation) on available-for-sale securities | (0.1) | (0.1) | ||
Sales | (0.4) | (0.5) | ||
Ending Balance | 1.2 | 1.2 | ||
Equity Securities and Other Investments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Beginning Balance | 4.9 | 5.1 | 4.9 | 5 |
Included in other comprehensive income - net appreciation (depreciation) on available-for-sale securities | 0.1 | 0.1 | 0.1 | |
Ending Balance | $ 5 | $ 5.1 | $ 5 | $ 5.1 |
Fair Value (Schedule of Additio
Fair Value (Schedule of Additional Information About Significant Unobservable Inputs Used in Fair Valuations of Level 3) (Details) $ in Millions | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2016USD ($) | Dec. 31, 2015USD ($) | Jun. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2014USD ($) | |
Fair Value [Line Items] | ||||||
Fair Value | $ 57.8 | $ 60.5 | $ 60.8 | $ 58.7 | $ 60.8 | $ 61.7 |
Municipal [Member] | Discounted cash flow [Member] | Level 3 | ||||||
Fair Value [Line Items] | ||||||
Fair Value | $ 32.3 | $ 34.4 | ||||
Municipal [Member] | Discount For Small Issue Size | Discounted cash flow [Member] | Level 3 | Minimum | ||||||
Fair Value [Line Items] | ||||||
Range | 0.70% | 0.60% | ||||
Municipal [Member] | Discount For Small Issue Size | Discounted cash flow [Member] | Level 3 | Maximum | ||||||
Fair Value [Line Items] | ||||||
Range | 6.80% | 6.80% | ||||
Municipal [Member] | Discount For Small Issue Size | Discounted cash flow [Member] | Level 3 | Weighted Average | ||||||
Fair Value [Line Items] | ||||||
Range | 3.30% | 3.20% | ||||
Municipal [Member] | Discount For Above Market Coupon | Discounted cash flow [Member] | Level 3 | Minimum | ||||||
Fair Value [Line Items] | ||||||
Range | 0.30% | 0.30% | ||||
Municipal [Member] | Discount For Above Market Coupon | Discounted cash flow [Member] | Level 3 | Maximum | ||||||
Fair Value [Line Items] | ||||||
Range | 1.00% | 1.00% | ||||
Municipal [Member] | Discount For Above Market Coupon | Discounted cash flow [Member] | Level 3 | Weighted Average | ||||||
Fair Value [Line Items] | ||||||
Range | 0.40% | 0.40% | ||||
Municipal [Member] | Discount For Credit Stress | Discounted cash flow [Member] | Level 3 | Minimum | ||||||
Fair Value [Line Items] | ||||||
Range | 0.90% | 0.90% | ||||
Municipal [Member] | Discount For Credit Stress | Discounted cash flow [Member] | Level 3 | Maximum | ||||||
Fair Value [Line Items] | ||||||
Range | 1.50% | 1.50% | ||||
Municipal [Member] | Discount For Credit Stress | Discounted cash flow [Member] | Level 3 | Weighted Average | ||||||
Fair Value [Line Items] | ||||||
Range | 1.20% | 1.20% | ||||
Corporate [Member] | Discounted cash flow [Member] | Level 3 | ||||||
Fair Value [Line Items] | ||||||
Fair Value | $ 4.1 | $ 3.7 | ||||
Corporate [Member] | Discount For Small Issue Size | Discounted cash flow [Member] | Level 3 | ||||||
Fair Value [Line Items] | ||||||
Range | 1.00% | |||||
Corporate [Member] | Discount For Small Issue Size | Discounted cash flow [Member] | Level 3 | Minimum | ||||||
Fair Value [Line Items] | ||||||
Range | 2.00% | |||||
Corporate [Member] | Discount For Small Issue Size | Discounted cash flow [Member] | Level 3 | Maximum | ||||||
Fair Value [Line Items] | ||||||
Range | 2.50% | |||||
Corporate [Member] | Discount For Small Issue Size | Discounted cash flow [Member] | Level 3 | Weighted Average | ||||||
Fair Value [Line Items] | ||||||
Range | 2.10% | 1.00% | ||||
Corporate [Member] | Discount For Above Market Coupon | Discounted cash flow [Member] | Level 3 | Minimum | ||||||
Fair Value [Line Items] | ||||||
Range | 0.30% | 0.30% | ||||
Corporate [Member] | Discount For Above Market Coupon | Discounted cash flow [Member] | Level 3 | Maximum | ||||||
Fair Value [Line Items] | ||||||
Range | 0.80% | 0.80% | ||||
Corporate [Member] | Discount For Above Market Coupon | Discounted cash flow [Member] | Level 3 | Weighted Average | ||||||
Fair Value [Line Items] | ||||||
Range | 0.60% | 0.60% | ||||
Corporate [Member] | Discount For Credit Stress | Discounted cash flow [Member] | Level 3 | ||||||
Fair Value [Line Items] | ||||||
Range | 1.00% | 10.00% | ||||
Corporate [Member] | Discount For Credit Stress | Discounted cash flow [Member] | Level 3 | Weighted Average | ||||||
Fair Value [Line Items] | ||||||
Range | 1.00% | 10.00% | ||||
Commercial Mortgage Backed [Member] | Discounted cash flow [Member] | Level 3 | ||||||
Fair Value [Line Items] | ||||||
Fair Value | $ 16.2 | $ 17 | ||||
Commercial Mortgage Backed [Member] | Discount For Small Issue Size | Discounted cash flow [Member] | Level 3 | Minimum | ||||||
Fair Value [Line Items] | ||||||
Range | 1.50% | 0.50% | ||||
Commercial Mortgage Backed [Member] | Discount For Small Issue Size | Discounted cash flow [Member] | Level 3 | Maximum | ||||||
Fair Value [Line Items] | ||||||
Range | 3.10% | 1.00% | ||||
Commercial Mortgage Backed [Member] | Discount For Small Issue Size | Discounted cash flow [Member] | Level 3 | Weighted Average | ||||||
Fair Value [Line Items] | ||||||
Range | 2.60% | 0.50% | ||||
Commercial Mortgage Backed [Member] | Discount For Above Market Coupon | Discounted cash flow [Member] | Level 3 | ||||||
Fair Value [Line Items] | ||||||
Range | 0.50% | 0.50% | ||||
Commercial Mortgage Backed [Member] | Discount For Above Market Coupon | Discounted cash flow [Member] | Level 3 | Weighted Average | ||||||
Fair Value [Line Items] | ||||||
Range | 0.50% | 0.50% | ||||
Commercial Mortgage Backed [Member] | Discount For Lease Structure | Discounted cash flow [Member] | Level 3 | ||||||
Fair Value [Line Items] | ||||||
Range | 0.30% | 0.30% | ||||
Commercial Mortgage Backed [Member] | Discount For Lease Structure | Discounted cash flow [Member] | Level 3 | Weighted Average | ||||||
Fair Value [Line Items] | ||||||
Range | 0.30% | 0.30% | ||||
Asset-backed Securities [Member] | Discounted cash flow [Member] | Level 3 | ||||||
Fair Value [Line Items] | ||||||
Fair Value | $ 0.5 | |||||
Asset-backed Securities [Member] | Discount For Small Issue Size | Discounted cash flow [Member] | Level 3 | ||||||
Fair Value [Line Items] | ||||||
Range | 0.70% | |||||
Asset-backed Securities [Member] | Discount For Small Issue Size | Discounted cash flow [Member] | Level 3 | Weighted Average | ||||||
Fair Value [Line Items] | ||||||
Range | 0.70% | |||||
Equity Securities [Member] | Market comparables [Member] | Level 3 | ||||||
Fair Value [Line Items] | ||||||
Fair Value | $ 1.1 | $ 1.1 | ||||
Equity Securities [Member] | Net Tangible Asset Market Multiples | Market comparables [Member] | Level 3 | ||||||
Fair Value [Line Items] | ||||||
Fair value measurement market multiples | 1 | 1 | ||||
Equity Securities [Member] | Net Tangible Asset Market Multiples | Market comparables [Member] | Level 3 | Weighted Average | ||||||
Fair Value [Line Items] | ||||||
Fair value measurement market multiples | 1 | 1 | ||||
Other securities | Discounted cash flow [Member] | Level 3 | ||||||
Fair Value [Line Items] | ||||||
Fair Value | $ 3.6 | $ 3.6 | ||||
Other securities | Discount Rate [Member] | Discounted cash flow [Member] | Level 3 | ||||||
Fair Value [Line Items] | ||||||
Range | 18.00% | 18.00% | ||||
Other securities | Discount Rate [Member] | Discounted cash flow [Member] | Level 3 | Weighted Average | ||||||
Fair Value [Line Items] | ||||||
Range | 18.00% | 18.00% |
Pension and Other Postretirem45
Pension and Other Postretirement Benefit Plans (Narrative) (Details) $ in Millions | 3 Months Ended |
Jun. 30, 2015USD ($) | |
Pension and Other Postretirement Benefit Plans [Abstract] | |
Benefit due to the disposal of U.K. motor business | $ 1.8 |
Pension and Other Postretirem46
Pension and Other Postretirement Benefit Plans (Components of Net Periodic Benefit Cost) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Jun. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Curtailment gain | $ (1.8) | ||||
Pension Plans | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Service cost - benefits earned during the period | $ 0.2 | $ 0.2 | $ 0.6 | $ 0.9 | |
Interest cost | 7.4 | 7.4 | 22.2 | 22 | |
Expected return on plan assets | (7.4) | (8) | (22.4) | (23.7) | |
Recognized net actuarial loss | 2.8 | 3.1 | 8.4 | 10.9 | |
Curtailment gain | (1.8) | ||||
Net periodic pension cost (benefit) | 3 | 2.7 | 8.8 | 8.3 | |
Postretirement Plans | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Interest cost | 0.2 | 0.1 | 0.4 | 0.4 | |
Recognized net actuarial loss | 0.1 | 0.1 | |||
Amortization of prior service cost | (0.3) | (0.3) | (1) | (1) | |
Net periodic pension cost (benefit) | $ (0.1) | $ (0.2) | $ (0.5) | $ (0.5) |
Other Comprehensive Income (Nar
Other Comprehensive Income (Narrative) (Details) - Defined Benefit Pension and Postretirement Plans: | 9 Months Ended |
Sep. 30, 2016 | |
Comprehensive Income (Loss) [Line Items] | |
Loss Adjustment Expense | 40.00% |
Percentage Of Other Operating Expenses | 60.00% |
Other Comprehensive Income (Cha
Other Comprehensive Income (Changes in Other Comprehensive Income) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Other Comprehensive Income [Abstract] | ||||
Unrealized gains (losses) arising during period , Pre-Tax | $ 8.1 | $ (47) | $ 290.1 | $ (120.5) |
Amount of realized gains from sales and other, Pre-tax | (3.4) | (5.9) | (30.7) | (32.3) |
Portion of other-than-temporary impairment losses recognized in earnings, Pre-tax | 0.1 | 4.2 | 26 | 8.8 |
Net unrealized gains (losses), Pre-tax | 4.8 | (48.7) | 285.4 | (144) |
Net actuarial losses and prior service cost arising in the period, Pre-tax | (1.2) | |||
Amortization of net actuarial loss and prior service cost recognized as net periodic benefit cost, Pre-tax | 2.5 | 2.7 | 7.5 | 10 |
Net pension and postretirement benefits, Pre-tax | 7.5 | 8.8 | ||
Foreign currency translation recognized during the period, Pre-tax | (2.9) | (4) | (4.9) | (7.4) |
Other comprehensive income (loss), Pre-tax | 4.4 | (50) | 288 | (142.6) |
Unrealized gains (losses) arising during period , Tax Benefit (Expense) | (2.9) | 16.5 | (101.5) | 42.2 |
Amount of realized gains from sales and other, Tax Benefit (Expense) | (3.9) | (1.4) | (3.3) | 1.9 |
Portion of other-than-temporary impairment losses recognized in earnings, Tax Benefit (Expense) | (1.5) | (9.1) | (3.1) | |
Net unrealized gains (losses), Tax Benefit (Expense) | (6.8) | 13.6 | (113.9) | 41 |
Net actuarial losses and prior service cost arising in the period, Tax Benefit (Expense) | (0.2) | |||
Amortization of net actuarial loss and prior service cost recognized as net periodic benefit cost, Tax Benefit (Expense) | (1) | (1) | (2.7) | (3.2) |
Net pension and postretirement benefits, Tax | (2.7) | (3.4) | ||
Foreign currency translation recognized during the period, Tax Benefit (Expense) | 1 | 1.4 | 1.7 | 2.6 |
Other comprehensive income (loss), Tax Benefit (Expense) | (6.8) | 14 | (114.9) | 40.2 |
Unrealized gains (losses) arising during period , Net of Tax | 5.2 | (30.5) | 188.6 | (78.3) |
Amount of realized gains from sales and other, Net of Tax | (7.3) | (7.3) | (34) | (30.4) |
Portion of other-than-temporary impairment losses recognized in earnings, Net of Tax | 0.1 | 2.7 | 16.9 | 5.7 |
Net unrealized gains (losses), Net of Tax | (2) | (35.1) | 171.5 | (103) |
Net actuarial losses and prior service costs arising in the period | (1.4) | |||
Amortization of net actuarial loss and prior service cost recognized as net periodic benefit cost, Net of Tax | 1.5 | 1.7 | 4.8 | 6.8 |
Net pension and postretirement benefits, Net of Tax | 1.5 | 1.7 | 4.8 | 5.4 |
Foreign currency translation recognized during the period, Net of Tax | (1.9) | (2.6) | (3.2) | (4.8) |
Other comprehensive income (loss), Net of Tax | $ (2.4) | $ (36) | $ 173.1 | $ (102.4) |
Other Comprehensive Income (Rec
Other Comprehensive Income (Reclassifications out of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net realized gains from sales and other | $ 4.3 | $ 12.2 | $ 31 | $ 38.8 |
Loss adjustment expenses and other operating expenses | (1,117.1) | (1,123.1) | (3,465.7) | (3,489.3) |
Net other-than-temporary impairment losses on investments recognized in earnings | (0.1) | (4.2) | (26) | (8.8) |
Total before tax | 124.1 | 110.4 | 225.1 | 340 |
Tax benefit (expense) | (35.8) | (33.2) | (56.8) | (87) |
Net of tax | 88.4 | 78.3 | 168.6 | 253.9 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net of tax | 5.7 | 2.9 | 12.3 | 17.9 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Net Unrealized Appreciation (Depreciation) on Investments: | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net realized gains from sales and other | 3.4 | 5.9 | 30.7 | 32.3 |
Net other-than-temporary impairment losses on investments recognized in earnings | (0.1) | (4.2) | (26) | (8.8) |
Total before tax | 3.3 | 1.7 | 4.7 | 23.5 |
Tax benefit (expense) | 3.9 | 2.9 | 12.4 | 1.2 |
Net of tax | 7.2 | 4.6 | 17.1 | 24.7 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Defined Benefit Pension and Postretirement Plans: | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Loss adjustment expenses and other operating expenses | (2.5) | (2.7) | (7.5) | (10) |
Tax benefit (expense) | 1 | 1 | 2.7 | 3.2 |
Net of tax | $ (1.5) | $ (1.7) | $ (4.8) | $ (6.8) |
Segment Information (Narrative)
Segment Information (Narrative) (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)segment | Sep. 30, 2015USD ($) | |
Segment Information [Abstract] | ||||
Operating segments | segment | 4 | |||
Net foreign currency transaction losses | $ 7 | $ 3 | $ 28 | |
Net foreign currency transaction gains | $ 12 |
Segment Information (Financial
Segment Information (Financial Information with Respect to Business Segments) (Details) - USD ($) $ in Millions | May 21, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 |
Segment Reporting Information [Line Items] | |||||
Operating revenues | $ 1,237 | $ 1,225.5 | $ 3,685.8 | $ 3,799.3 | |
Net investment income | 67.8 | 68.3 | 205.2 | 209.1 | |
Total revenues | 1,241.2 | 1,233.5 | 3,690.8 | 3,829.3 | |
Operating income (loss) before interest expense and income taxes | 129.8 | 122.6 | 344.9 | 342.5 | |
Interest on debt | (12.5) | (14.8) | (42.8) | (45.9) | |
Operating income before income taxes | 117.3 | 107.8 | 302.1 | 296.6 | |
Net realized investment gains | 4.2 | 8 | 5 | 30 | |
Net gain on disposal of U.K. motor business | 0.1 | 1.3 | 37.7 | ||
Net loss from repayment of debt | $ (86.1) | (5.6) | (86.1) | (24.1) | |
Other non-operating items | 2.5 | 0.2 | 2.8 | (0.2) | |
Income before income taxes | 124.1 | 110.4 | 225.1 | 340 | |
Commercial Lines | |||||
Segment Reporting Information [Line Items] | |||||
Operating revenues | 628.4 | 601.2 | 1,857.2 | 1,786.7 | |
Underwriting (loss) income | 3.6 | 8.3 | 12.4 | 10.9 | |
Net investment income | 39 | 38.7 | 117.5 | 116.7 | |
Other (expense) income | (0.1) | 0.1 | (0.7) | (1.1) | |
Operating income (loss) before interest expense and income taxes | 42.5 | 47.1 | 129.2 | 126.5 | |
Personal Lines | |||||
Segment Reporting Information [Line Items] | |||||
Operating revenues | 391.5 | 379.7 | 1,154.8 | 1,131.4 | |
Underwriting (loss) income | 23.3 | 17.9 | 81.2 | 34.3 | |
Other (expense) income | 1.3 | 1.3 | 3.4 | 3.1 | |
Operating income (loss) before interest expense and income taxes | 41.7 | 37.2 | 136.2 | 91.6 | |
Net realized investment gains | 17.1 | 18 | 51.6 | 54.2 | |
Chaucer | |||||
Segment Reporting Information [Line Items] | |||||
Operating revenues | 215 | 242.7 | 667.9 | 875.5 | |
Underwriting (loss) income | 37.8 | 29.6 | 53.8 | 92.7 | |
Net investment income | 10.3 | 10.5 | 32.3 | 34.8 | |
Other (expense) income | 0.3 | 1.1 | 1.5 | 4.9 | |
Operating income (loss) before interest expense and income taxes | 48.4 | 41.2 | 87.6 | 132.4 | |
Other (including eliminations) | |||||
Segment Reporting Information [Line Items] | |||||
Operating revenues | 2.1 | 1.9 | 5.9 | 5.7 | |
Underwriting (loss) income | (0.8) | (0.9) | (2.1) | (2.3) | |
Net investment income | 1.4 | 1.1 | 3.8 | 3.4 | |
Other net expenses | (3.4) | (3.1) | (9.8) | (9.1) | |
Operating income (loss) before interest expense and income taxes | $ (2.8) | $ (2.9) | $ (8.1) | $ (8) |
Segment Information (Identifiab
Segment Information (Identifiable Assets by Business Segment) (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Segment Reporting Information [Line Items] | ||
Discontinued operations | $ 84 | $ 83 |
Identifiable assets | 14,363.7 | 13,781.2 |
U.S. Companies | ||
Segment Reporting Information [Line Items] | ||
Identifiable assets | 10,124.7 | 9,616 |
Chaucer | ||
Segment Reporting Information [Line Items] | ||
Identifiable assets | $ 4,155 | $ 4,082.2 |
Stock Based Compensation (Narra
Stock Based Compensation (Narrative) (Details) - shares | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares forfeited or cancelled that are no longer expected to vest | 128,334 | 56,500 |
Performance metric for performance based restricted stock units | 100.00% | |
Performance metric for performance based restricted stock units minimum potential range | 0.00% | |
Performance metric for performance based restricted stock units maximum potential range | 200.00% | |
2014 Stock Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares available for grant | 5,047,892 | |
ESPP Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares available for grant | 2,420,768 | |
SIP Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares available for grant | 702,191 | |
Performance-based restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted, Shares | 1,949 | |
Performance And Market-Based Restricted Stock Units | Senior management | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance metric, minimum | 0.00% | |
Performance metric, maximum | 150.00% | |
Market-based awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted, Shares | 79,153 | 80,738 |
Average period based on relative TSR | 3 years | |
Market-based awards | Payout in excess of 100% [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted, Shares | 30,453 | |
Market-based awards | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance metric achieved | 100.00% |
Stock-based Compensation (Compe
Stock-based Compensation (Compensation Cost and Related Tax Benefits) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Stock-based Compensation [Abstract] | ||||
Stock-based compensation expense | $ 3 | $ 1.9 | $ 8.5 | $ 9.4 |
Tax benefit | (1.1) | (0.7) | (3) | (3.3) |
Stock-based compensation expense, net of taxes | $ 1.9 | $ 1.2 | $ 5.5 | $ 6.1 |
Stock-based Compensation (Summa
Stock-based Compensation (Summary of Stock Option Plan Activity) (Details) - $ / shares | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | ||
Stock-based Compensation [Abstract] | |||
Outstanding, beginning of period, Shares | 1,619,948 | 2,236,620 | |
Granted, Shares | 524,940 | 663,900 | |
Exercised, Shares | (564,389) | (377,188) | |
Forfeited or cancelled, Shares | (207,203) | (117,640) | |
Outstanding, end of period, Shares | [1] | 1,373,296 | 2,405,692 |
Outstanding, beginning of period, Weighted Average Exercise Price | $ 56.57 | $ 46.61 | |
Granted, Weighted Average Exercise Price | 82.74 | 70.34 | |
Exercised, Weighted Average Exercise Price | 48.80 | 45.66 | |
Forfeited or cancelled, Weighted Average Exercise Price | 68.23 | 53.39 | |
Outstanding, end of period, Weighted Average Exercise Price | [1] | $ 68.01 | $ 52.98 |
[1] | Included in the table above in outstanding shares for the nine months ended September 30, 2015 were 128,334 options that were previously granted to the Company's former CEO. These options subsequently forfeited in 2016 and are included above in the amounts forfeited or cancelled for the nine months ended September 30, 2016. |
Stock-based Compensation (Sum56
Stock-based Compensation (Summary of Restricted Stock Activity) (Details) - $ / shares | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | ||
Restricted Stock Units (RSUs) [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Outstanding, beginning of period, Shares | 301,897 | 384,923 | |
Granted, Shares | 143,107 | 92,409 | |
Vested, Shares | (136,398) | (119,117) | |
Forfeited, Shares | (27,411) | (31,573) | |
Outstanding, end of period, Shares | 281,195 | 326,642 | |
Outstanding, beginning of period, Weighted Average Grant Date Fair Value | $ 54.54 | $ 45.63 | |
Granted, Weighted Average Grant Date Fair Value | 83.43 | 70.61 | |
Vested, Weighted Average Grant Date Fair Value | 42.49 | 40.94 | |
Forfeited, Weighted Average Grant Date Fair Value | 68.07 | 51.10 | |
Outstanding, end of period, Weighted Average Grant Date Fair Value | $ 73.77 | $ 53.88 | |
Performance Shares [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Outstanding, beginning of period, Shares | 196,142 | 218,338 | |
Granted, Shares | 118,736 | 82,025 | |
Vested, Shares | (144,141) | (77,854) | |
Forfeited, Shares | (63,740) | (14,451) | |
Outstanding, end of period, Shares | [1] | 106,997 | 208,058 |
Outstanding, beginning of period, Weighted Average Grant Date Fair Value | $ 47.89 | $ 44.24 | |
Granted, Weighted Average Grant Date Fair Value | 73.14 | 48.55 | |
Vested, Weighted Average Grant Date Fair Value | 41.11 | 38.82 | |
Forfeited, Weighted Average Grant Date Fair Value | 64.13 | 44.68 | |
Outstanding, end of period, Weighted Average Grant Date Fair Value | [1] | $ 75.38 | $ 47.93 |
[1] | Included in the table above in outstanding shares for the nine months ended September 30, 2015 were 56,500 market-based restricted stock units that were previously granted to the Company's former CEO. These units subsequently forfeited in 2016 and are included above in the amounts forfeited for the nine months ended September 30, 2016. |
Earnings Per Share and Shareh57
Earnings Per Share and Shareholders Equity Transactions (Narrative) (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | |
Earnings Per Share and Shareholders’ Equity Transactions [Abstract] | |||
Antidilutive securities excluded from calculation of earnings per share | 0.6 | 0.5 | 0.6 |
Repurchases common stock, authorized | $ 900 | $ 900 | |
Repurchases common stock, shares | 1.3 | ||
Repurchases common stock, value | $ 105.2 |
Earnings Per Share and Shareh58
Earnings Per Share and Shareholders’ Equity Transactions (Information Regarding Basic and Diluted Earnings Per Share) (Details) - $ / shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Basic shares used in the calculation of earnings per share | 42.7 | 44 | 42.8 | 44.1 |
Diluted shares used in the calculation of earnings per share | 43 | 44.9 | 43.3 | 45 |
Per share effect of dilutive securities on income from continuing operations | $ (0.01) | $ (0.03) | $ (0.04) | $ (0.11) |
Per share effect of dilutive securities on net income | $ (0.01) | $ (0.04) | $ (0.05) | $ (0.11) |
Employee Stock Option | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Dilutive effect of securities | 0.2 | 0.5 | 0.3 | 0.5 |
Non-Vested Stock Grants | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Dilutive effect of securities | 0.1 | 0.4 | 0.2 | 0.4 |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) | Dec. 11, 2009plaintiffclaim | Nov. 30, 2015claim | Sep. 30, 2016 |
Commitments and Contingencies [Abstract] | |||
Participant's retirement age | 65 years | ||
Number of plantiffs | plaintiff | 2 | ||
New claims | 2 | 3 | |
Claims Dismissed | 2 |