Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 17, 2017 | Jun. 30, 2016 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | HANOVER INSURANCE GROUP, INC. | ||
Entity Central Index Key | 944,695 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Current Reporting Status | Yes | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 3,607,314,213 | ||
Entity Common Stock, Shares Outstanding | 42,501,269 |
Consolidated Statements Of Inco
Consolidated Statements Of Income - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues | |||
Premiums | $ 4,628.1 | $ 4,704.8 | $ 4,710.3 |
Net investment income | 279.4 | 279.1 | 270.3 |
Net realized investment gains (losses): | |||
Net realized gains from sales and other | 36.5 | 46.3 | 55.6 |
Net other-than-temporary impairment losses on investments recognized in earnings | (27.9) | (26.8) | (5.5) |
Total net realized investment gains | 8.6 | 19.5 | 50.1 |
Fees and other income | 29.7 | 30.6 | 36.9 |
Total revenues | 4,945.8 | 5,034 | 5,067.6 |
Losses and expenses | |||
Losses and loss adjustment expenses | 2,964.7 | 2,884.1 | 2,927.5 |
Amortization of deferred acquisition costs | 1,035.2 | 1,033.2 | 1,040 |
Interest expense | 54.9 | 60.6 | 65.8 |
Gain on disposal of U.K. motor business | (1.1) | (38.4) | |
Net loss from repayment of debt | 88.3 | 24.1 | 0.1 |
Other operating expenses | 611.5 | 631 | 656.2 |
Total losses and expenses | 4,753.5 | 4,594.6 | 4,689.6 |
Income before income taxes | 192.3 | 439.4 | 378 |
Income tax expense: | |||
Current | 52.1 | 55.8 | 27.1 |
Deferred | (15.9) | 52.8 | 68.6 |
Total income tax expense | 36.2 | 108.6 | 95.7 |
Income from continuing operations | 156.1 | 330.8 | 282.3 |
Net (loss) gain from discontinued operations (net of income tax benefit of $2.8, $0.5 and $0.1 in 2016, 2015 and 2014) | (1) | 0.7 | (0.3) |
Net income | $ 155.1 | $ 331.5 | $ 282 |
Basic: | |||
Income from continuing operations | $ 3.65 | $ 7.53 | $ 6.41 |
Net (loss) gain from discontinued operations | (0.02) | 0.02 | |
Net income per share | $ 3.63 | $ 7.55 | $ 6.41 |
Weighted average shares outstanding | 42.8 | 43.9 | 44 |
Diluted: | |||
Income from continuing operations | $ 3.61 | $ 7.39 | $ 6.29 |
Net (loss) gain from discontinued operations | (0.02) | 0.01 | (0.01) |
Net income per share | $ 3.59 | $ 7.40 | $ 6.28 |
Weighted average shares outstanding | 43.2 | 44.8 | 44.9 |
Consolidated Statements Of Inc3
Consolidated Statements Of Income (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | |||
Net (loss) gain from discontinued operations, income tax benefit (expense) | $ 2.8 | $ 0.5 | $ 0.1 |
Consolidated Statements Of Comp
Consolidated Statements Of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Consolidated Statements Of Comprehensive Income [Abstract] | |||
Net income | $ 155.1 | $ 331.5 | $ 282 |
Available-for-sale securities: | |||
Net appreciation (depreciation) during the period | 28.8 | (138) | 40 |
Change in other-than-temporary impairment losses recognized in other comprehensive income (loss) | 7.3 | (13) | 1.6 |
Total available-for-sale securities | 36.1 | (151) | 41.6 |
Pension and postretirement benefits: | |||
Net actuarial losses and prior service costs arising in the period | (30.3) | (2.8) | (22.6) |
Amortization recognized as net periodic benefit and postretirement cost | 6.4 | 8.5 | 14.4 |
Total pension and postretirement benefits | (23.9) | 5.7 | (8.2) |
Cumulative foreign currency translation adjustment: | |||
Amount recognized as cumulative foreign currency translation during the year | (3.3) | (7.2) | (4.6) |
Total other comprehensive income (loss), net of tax | 8.9 | (152.5) | 28.8 |
Comprehensive income | $ 164 | $ 179 | $ 310.8 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | ||
Fixed maturities, at fair value (amortized cost of $7,235.1 and $6,934.0) | $ 7,331.3 | $ 6,983.4 |
Equity securities, at fair value (cost of $498.4 and $528.5) | 584.4 | 576.6 |
Other investments | 533.8 | 393.4 |
Total investments | 8,449.5 | 7,953.4 |
Cash and cash equivalents | 282.6 | 338.8 |
Accrued investment income | 61.7 | 62.9 |
Premiums and accounts receivable, net | 1,438.1 | 1,391.7 |
Reinsurance recoverable on paid and unpaid losses and unearned premiums | 2,611.8 | 2,635 |
Deferred acquisition costs | 517.5 | 508.8 |
Deferred income taxes | 115.1 | 137.9 |
Goodwill | 184.8 | 186 |
Other assets | 479.8 | 483.7 |
Assets of discontinued operations | 79.5 | 83 |
Total assets | 14,220.4 | 13,781.2 |
Liabilities | ||
Loss and loss adjustment expense reserves | 6,949.4 | 6,574.4 |
Unearned premiums | 2,561 | 2,540.8 |
Expenses and taxes payable | 728 | 724.9 |
Reinsurance premiums payable | 251.9 | 205.2 |
Debt | 786.4 | 803.1 |
Liabilities of discontinued operations | 86.2 | 88.4 |
Total liabilities | 11,362.9 | 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 | 1,846.7 | 1,833.5 |
Accumulated other comprehensive income | 62.8 | 53.9 |
Retained earnings | 1,875.6 | 1,803.5 |
Treasury stock at cost (18.1 and 17.5 million shares) | (928.2) | (847.1) |
Total shareholders' equity | 2,857.5 | 2,844.4 |
Total liabilities and shareholders' equity | $ 14,220.4 | $ 13,781.2 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Consolidated Balance Sheets [Abstract] | ||
Fixed maturities, amortized cost | $ 7,235.1 | $ 6,934 |
Equity securities, cost | $ 498.4 | $ 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 | 18,100,000 | 17,500,000 |
Consolidated Statements Of Shar
Consolidated Statements Of Shareholders' Equity - USD ($) $ in Millions | Common Stock | Additional Paid-in Capital | 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 year at Dec. 31, 2013 | $ 0.6 | $ 1,830.1 | $ 259.3 | $ (76.1) | $ (5.6) | $ 1,349.1 | $ (762.9) | |
Net income | 282 | $ 282 | ||||||
Shares purchased at cost | (20.4) | |||||||
Employee and director stock-based awards and other | 0.6 | |||||||
Net appreciation (depreciation) on available-for-sale securities | 41.6 | 41.6 | ||||||
Net amount arising in the period | (22.6) | (22.6) | ||||||
Net amount recognized as net periodic benefit cost | 14.4 | (14.4) | ||||||
Amount recognized as cumulative foreign currency translation during the year | (4.6) | (4.6) | ||||||
Dividends to shareholders | (67) | |||||||
Total accumulated other comprehensive income | 206.4 | 28.8 | ||||||
Net shares reissued at cost under employee stock-based compensation plans | 30.9 | |||||||
Stock-based compensation | (5.4) | |||||||
Balance at end of year at Dec. 31, 2014 | 0.6 | 1,830.7 | 300.9 | (84.3) | (10.2) | 1,558.7 | (752.4) | 2,844 |
Net income | 331.5 | 331.5 | ||||||
Shares purchased at cost | (127.3) | |||||||
Employee and director stock-based awards and other | 2.8 | |||||||
Net appreciation (depreciation) on available-for-sale securities | (151) | (151) | ||||||
Net amount arising in the period | (2.8) | (2.8) | ||||||
Net amount recognized as net periodic benefit cost | 8.5 | (8.5) | ||||||
Amount recognized as cumulative foreign currency translation during the year | (7.2) | (7.2) | ||||||
Dividends to shareholders | (74.2) | |||||||
Total accumulated other comprehensive income | 53.9 | (152.5) | ||||||
Net shares reissued at cost under employee stock-based compensation plans | 32.6 | |||||||
Stock-based compensation | (12.5) | |||||||
Balance at end of year 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 | 155.1 | 155.1 | ||||||
Shares purchased at cost | (105.6) | |||||||
Employee and director stock-based awards and other | 13.2 | |||||||
Net appreciation (depreciation) on available-for-sale securities | 36.1 | 36.1 | ||||||
Net amount arising in the period | (30.3) | (30.3) | ||||||
Net amount recognized as net periodic benefit cost | 6.4 | (6.4) | ||||||
Amount recognized as cumulative foreign currency translation during the year | (3.3) | (3.3) | ||||||
Dividends to shareholders | (80.4) | |||||||
Total accumulated other comprehensive income | 62.8 | 8.9 | ||||||
Net shares reissued at cost under employee stock-based compensation plans | 24.5 | |||||||
Stock-based compensation | (2.6) | |||||||
Balance at end of year at Dec. 31, 2016 | $ 1,846.7 | $ 186 | $ (102.5) | $ (20.7) | $ 1,875.6 | $ (928.2) | $ 2,857.5 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash Flows From Operating Activities | |||
Net income | $ 155.1 | $ 331.5 | $ 282 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Gain on disposal of U.K. motor business | (1.1) | (38.4) | |
Net loss from repayment of debt | 88.3 | 24.1 | 0.1 |
Net realized investment gains | (8.6) | (19.1) | (50.2) |
Net amortization and depreciation | 30.7 | 30.2 | 33.5 |
Stock-based compensation expense | 12 | 12.3 | 15.1 |
Amortization of defined benefit plan costs | 9.9 | 12.7 | 22.1 |
Deferred income tax expense | (13.2) | 53.1 | 68.6 |
Change in deferred acquisition costs | (7.8) | 6.9 | (19.6) |
Change in premiums receivable, net of reinsurance premiums payable | (28.2) | (52.5) | (184.1) |
Change in loss, loss adjustment expense and unearned premium reserves | 527.8 | 121 | 256.3 |
Change in reinsurance recoverable | (35.8) | (27) | 115.9 |
Change in expenses and taxes payable | 6.9 | (1) | 12.5 |
Other, net | 1.6 | (15.4) | 12.5 |
Net cash provided by operating activities | 737.6 | 438.4 | 564.7 |
Cash Flows From Investing Activities | |||
Proceeds from disposals and maturities of fixed maturities | 1,602.3 | 1,696.4 | 1,323.1 |
Proceeds from disposals of equity securities and other investments | 271.1 | 329.4 | 175.2 |
Purchase of fixed maturities | (2,020.9) | (1,792.2) | (1,710.1) |
Purchase of equity securities and other investments | (351.2) | (428.8) | (379.7) |
Cash received from disposal of U.K. motor business, net of cash transferred | 6.9 | 44.3 | |
Capital expenditures | (15.7) | (19.5) | (11.2) |
Other investing activities | 12.1 | (1.1) | 2 |
Net cash used in investing activities | (495.4) | (171.5) | (600.7) |
Cash Flows From Financing Activities | |||
Proceeds from exercise of employee stock options | 16.2 | 16.6 | 12.6 |
Proceeds from debt borrowings, net | 370.7 | ||
Change in cash collateral related to securities lending program | (6.4) | 15.7 | 7.4 |
Dividends paid to shareholders | (80.4) | (74.2) | (67) |
Repayment of debt | (475.4) | (114.3) | (0.7) |
Repurchases of common stock | (105.6) | (127.3) | (20.4) |
Other financing activities | (14.1) | (11.2) | (3.6) |
Net cash used in financing activities | (295) | (294.7) | (71.7) |
Effect of exchange rate changes on cash | (3.4) | (6.7) | (5.2) |
Net change in cash and cash equivalents | (56.2) | (34.5) | (112.9) |
Cash and cash equivalents, beginning of year | 338.8 | 373.3 | 486.2 |
Cash and cash equivalents, end of year | 282.6 | 338.8 | 373.3 |
Supplemental Cash Flow Information | |||
Interest payments | 53.1 | 60.8 | 64.1 |
Income tax net payments | $ 29.7 | $ 56.9 | $ 8.4 |
Summary Of Significant Accounti
Summary Of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Summary Of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Basis of Presentation and Principles of Consolidation The consolidated financial statements of The Hanover Insurance Group, Inc. (“THG” or the “Company”), include the accounts of The Hanover Insurance Company (“Hanover Insurance”) and Citizens Insurance Company of America (“Citizens”), 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 14 – “Segment Information”. The consolidated financial statements also 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 generally accepted accounting principles in the United States of America (“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 these financial statements reflect all adjustments, consisting of normal recurring items necessary for a fair presentation of the financial position and results of operations. B. Investments Fixed maturities and equity securities are classified as available-for-sale and are carried at fair value, with unrealized gains and losses, net of taxes, reported in accumulated other comprehensive income, a separate component of shareholders’ equity. The amortized cost of fixed maturities is adjusted for amortization of premiums and accretion of discounts to maturity. Other investments consist primarily of mortgage participations, limited partnerships and overseas deposits. Mortgage participations represent interests in commercial mortgage loans ori ginated and serviced by a third- party of which the Company shares, on a pro-rata basis, in all related cash flows of the underlying mortgage loans. Due to certain reacquisiti on rights retained by the third- party in the loan participation, these investments are accounted for as secured borrowings under Accounting Standards Codification (“ASC”) 860, Transfers and Servicing (“ASC 860”) . Mortgage participations are stated at unpaid principal balances adjusted for deferred fees or expenses, net of reserves. Reserves on mortgages are established and are collectively evaluated based on losses expected by the Company for loans that may not be collectible in full. In establishing reserves, the Company considers, among other things, the estimated fair value of the underlying collateral. Investments in limited partnership interests include interests in private equity funds. Where the Company’s interest is so minor that it exercises virtually no influence over operating and financial policies, investments in limited partnership interests are accounted for in accordance with the cost method of accounting; all other investments in limited partnership interests are accounted for in accordance with the equity method of accounting. Overseas deposits are investments maintained in overseas funds and managed exclusively by Lloyd’s. These funds are required in order to protect policyholders in overseas markets and enable the Company to operate in those markets. Overseas deposits are carried at fair value. Realized and unrealized gains and losses on overseas deposits, including the impact of foreign currency movements, are reflected in the income statement in the period the gain or loss was generated. Net investment income includes interest, dividends and income from limited partnership interests and overseas deposits. Interest income is recognized based on the effective yield method which includes the amortization of premiums and accretion of discounts. The effective yield used to determine the amortization for fixed maturities subject to prepayment risk, such as mortgage-backed and asset-backed securities, is recalculated and adjusted periodically based upon actual historical and projected future cash flows. The adjustment to yields for highly rated prepayable fixed maturities are accounted for using the retrospective method. The adjustment to yields for all other prepayable fixed maturities are accounted for using the prospective method. Fixed maturities and mortgage participations that are delinquent are placed on non-accrual status, and thereafter interest income is recognized only when cash payments are received. Realized investment gains and losses are reported as a component of revenues based upon specific identification of the investment assets sold. When an other-than-temporary decline in value of a specific investment is deemed to have occurred, and a charge to earnings is required, the Company recognizes a realized investment loss. The Company reviews investments in an unrealized loss position to identify other-than-temporary declines in value. When it is determined that a decline in value of an equity security is other-than-temporary, the Company reduces the cost basis of the security to fair value with a corresponding charge to earnings. When an other-than-temporary decline in value of a debt security is deemed to have occurred, the Company must assess whether it intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis. If the debt security meets either of these two criteria, an other-than-temporary impairment (“OTTI”) is recognized in earnings equal to the entire difference between the security’s amortized cost basis and its fair value at the impairment measurement date. If the Company does not intend to sell the debt security and it is not more likely than not the Company will be required to sell the security before recovery of its amortized cost basis, the credit loss portion of an OTTI is recorded through earnings while the portion attributable to all other factors is recorded separately as a component of other comprehensive income. The amount of the OTTI that relates to credit is estimated by comparing the amortized cost of the fixed maturity security with the net present value of the security’s projected future cash flows, discounted at the effective interest rate implicit in the investment prior to impairment. The non-credit portion of the impairment is equal to the difference between the fair value and the net present value of the security’s cash flows at the impairment measurement date. Once an OTTI has been recognized, the new amortized cost basis of the security is equal to the previous amortized cost less the amount of OTTI recognized in earnings. For equity method investments, an impairment is recognized when evidence demonstrates that an other-than-temporary loss in value has occurred, including the absence of the ability to recover the carrying amount of the investment or the inability of the investee to sustain a level of earnings that would justify the carrying amount of the investment. C. Financial Instruments In the normal course of business, the Company may enter into transactions involving various types of financial instruments, including debt, investments such as fixed maturities, equity securities and mortgage loans, investment and loan commitments, swap contracts, option contracts, forward contracts and futures contracts. These instruments involve credit risk and could also be subject to risk of loss due to interest rate and foreign currency fluctuation. The Company evaluates and monitors each financial instrument individually and, w hen appropriate, obtains collateral or other security to minimize losses. D . Cash and Cash Equivalents Cash and cash equivalents includes cash on hand, amounts due from banks and highly liquid debt instruments purchased with an original maturity of three months or less. E. Deferred Acquisition Costs Acquisition costs consist of commissions, underwriting costs and other costs, which vary with, and are primarily related to, the successful production of premiums. Acquisition costs are deferred and amortized over the terms of the insurance policies. Deferred acquisition costs (“DAC”) for each operating segment are reviewed to determine if the costs are recoverable from future income, including investment income. If such costs are determined to be unrecoverable, they are expensed at the time of determination. Although recoverability of DAC is not assured, the Company believes it is more likely than not that all of these costs will be recovered. The amount of DAC considered recoverable, however, could be reduced in the near term if the estimates of total revenues discussed above are reduced or permanently impaired as a result of a disposition of a line of business. The amount of amortization of DAC could be revised in the near term if any of the estimates discussed above are revised. F. Reinsurance Recoverables The Company shares certain insurance risks it has underwritten, through the use of reinsurance contracts, with various insurance entities. Reinsurance accounting is followed for ceded transactions when the risk transfer provisions of ASC 944, Financial Services – Insurance (“ASC 944”), have been met. As a result, when the Company experiences loss or claims events that are subject to a reinsurance contract, reinsurance recoverables are recorded. The amount of the reinsurance recoverable can vary based on the terms of the reinsurance contract, the size of the individual loss or claim, or the aggregate amount of all losses or claims in a particular line or book of business or an aggregate amount associated with a particular accident year. The valuation of losses or claims recoverable depends on whether the underlying loss or claim is a reported loss or claim, or an incurred but not reported loss. For reported losses and claims, the Company values reinsurance recoverables at the time the underlying loss or claim is recognized, in accordance with contract terms. For incurred but not reported losses, the Company estimates the amount of reinsurance recoverables based on the terms of the reinsurance contracts and historical reinsurance recovery information and applies that information to the gross loss reserve. Amounts recoverable from reinsurers are estimated in a manner consistent with the claim liability associated with the reinsured business and the balance is disclosed separately in the financial statements. However, the ultimate amount of the reinsurance recoverable is not known until all losses and claims are settled. Allowances are established for amounts deemed uncollectible and reinsurance recoverables are recorded net of these allowances. The Company evaluates the financial condition of its reinsurers and monitors concentration risk to minimize its exposure to significant credit losses from individual reinsurers . G. Property, Equipment and Capitalized Software Property, equipment, leasehold improvements and capitalized software are recorded at cost, less accumulated depreciation and amortization. Depreciation is generally provided using the straight-line method over the estimated useful lives of the related assets, which generally range from 3 to 30 years. The estimated useful life for capitalized software is generally 5 to 7 years. Amortization of leasehold improvements is provided using the straight-line method over the lesser of the term of the leases or the estimated useful life of the improvements. The Company tests for the recoverability of long-lived assets whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. The Company recognizes impairment losses only to the extent that the carrying amounts of long-lived assets exceed the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the assets. When an impairment loss occurs, the Company reduces the carrying value of the asset to fair value and no longer depreciates the asset. Fair values are estimated using discounted cash flow analysis. H. GOODWILL AND INTANGIBLE ASSETS In accordance with the provisions of ASC 350, Intangibles- Goodwill and Other , the Company carries its goodwill at cost, net of amortization accumulated prior to January 1, 2002, and net of impairments. Increases to goodwill are generated through acquisition and represent the excess of the cost of an acquisition over the fair value of net assets acquired, including any intangibles acquired. Since January 1, 2002, goodwill is no longer amortized but rather, is reviewed for impairment. Additionally, acquisitions can also produce intangible assets, which have either a definite or indefinite life. Intangible assets with definite lives are amortized over that life, whereas those intangible assets determined to have an indefinite life are reviewed at least annually for impairment. The Company tests for the recoverability of goodwill and intangible assets with indefinite lives annually or whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. The Company recognizes impairment losses only to the extent that the carrying amounts of reporting units with goodwill exceed the fair value. The amount of the impairment loss that is recognized is determined based upon the excess of the carrying value of goodwill compared to the implied fair value of the goodwill, as determined with respect to all assets and liabilities of the reporting unit. The Company has performed its annual review of goodwill and intangible assets with indefinite lives for impairment in the fourth quarters of 2016 and 2015 with no impairments recognized. At December 31, 2016 and 2015, Chaucer held intangible assets with indefinite lives of $47.0 million and $56.2 million, respectively, which represents approximately 76% and 74% of the Company’s balance, respectively. In addition, at December 31, 2016 and 2015, goodwill held by Chaucer was $6.0 million and $7.2 million, respectively. The remaining balance relates to the U.S. Companies. The changes in the value of intangible assets with indefinite lives from December 31, 2015 represent foreign exchange differences arising during 2016 whereas the changes in the value of intangible assets with indefinite lives during 2015 were primarily related to the disposition of the U.K. mot or business on June 30, 2015. S ee Note 2 – “Dispositions of Businesses” . I. LIABILITIES FOR LOSSES, LAE, AND UNEARNED PREMIUMS Liabilities for outstanding claims, losses and loss adjustment expenses (“LAE”) are estimates of payments to be made for reported losses and LAE and estimates of losses and LAE incurred but not reported. These liabilities are determined using case basis evaluations and statistical analyses of historical loss patterns and represent estimates of the ultimate cost of all losses incurred but not paid. These estimates are continually reviewed and adjusted as necessary; adjustments are reflected in current operations. Estimated amounts of salvage and subrogation on unpaid losses are deducted from the liability for unpaid claims. Premiums for direct and assumed business are reported as earned on a pro-rata basis over the contract period. The unexpired portion of these premiums is recorded as unearned premiums. All losses, LAE and unearned premium liabilities are based on the various estimates discussed above. Although the adequacy of these amounts cannot be assured, the Company believes that it is more likely than not that these liabilities and accruals will be sufficient to meet future obligations of policies in force. The amount of liabilities and accruals, however, could be revised in the near-term if the estimates discussed above are revised. J. Debt The Company’s debt at December 31, 2016 includes senior debentures, subordinated debentures, and collateralized borrowings with the Federal Home Loan Bank of Boston (“FHLBB”). Debt instruments are carried at principal amount borrowed, net of any applicable unamortize d discounts and issuance costs. See Note 6 – “Debt and Credit Arrangements” . K. Premium, Premium Receivable, Fee Revenue and Related Expenses Insurance premiums written are generally recorded at the policy inception and are primarily earned on a pro - rata basis over the terms of the policies for all products. Premiums written include estimates, primarily in the Chaucer segment, that are derived from multiple sources, which include the historical experience of the underlying business, similar businesses and available industry information. These estimates are regularly reviewed and updated, and any resulting adjustments are included in the current year’s results. Unearned premium reserves represent the portion of premiums written that relates to the unexpired terms of the underlying in-force insurance policies and reinsurance contracts. Premium receivables reflect the unpaid balance of premium written as of the balance sheet date. Premium receivables are generally short-term in nature and are reported net of an allowance for estimated uncollectible premium accounts. The Company reviews its receivables for collectability at the balance sheet date. The allowance for uncollectible accounts was not material as of December 31, 2016 and 2015. Ceded premiums are charged to income over the applicable term of the various r einsurance contracts with third- party reinsurers. Reinsurance reinstatement premiums, when required, are recognized in the same period as the loss event that gave rise to the reinstatement premiums. Losses and related expenses are matched with premiums, resulting in their recognition over the lives of the contracts. This matching is accomplished through estimated and unpaid losses and amortization of deferred acquisition costs. L. Income Taxes The Company is subject to the tax laws and regulations of the U.S. and foreign countries in which it operates. The Company files a consolidated U.S. federal income tax return that includes the holding company and its U.S. subsidiaries. Generally, taxes are accrued at the U.S. statutory tax rate of 35% for income from the U.S. operations. The Company’s primary non-U.S. jurisdiction is the United Kingdom (“U.K.”). In July 2013, the U.K. statutory rate decreased from 23% to 21% effective April 1, 2014 and from 21% to 20% effective April 1, 2015. In November 2015, the U.K. statutory tax rate decreased from 20% to 19% effective April 1, 2017 and from 19% to 18% effective April 1, 2020. A further decrease was enacted in September 2016 to reduce the U.K. statutory rate from 19% to 17% , instead of the 18% , effective April 1, 2020. The Company accrues taxes on certain non-U.S. income that is subject to U.S. tax at the U.S. tax rate. Foreign tax credits, where available, are utilized to offset U.S. tax as permitted. Certain non-U.S. income of the Company is not subject to U.S. tax until repatriated. Foreign taxes on this non-U.S. income are accrued at the local foreign rate and do not have an accrual for U.S. deferred taxes since these earnings are intended to be indefinitely reinvested overseas. The Company’s accounting for income taxes represents its best estimate of various events and transactions. Deferred income taxes are generally recognized when assets and liabilities have different values for financial statement and tax reporting purposes, and for other temporary taxable and deductible differences as defined by ASC 740, Income Taxes (“ASC 740”). These temporary differences are measured at the balance sheet date using enacted tax rates expected to apply to taxable income in the years the temporary differences are expected to reverse. These differences result primarily from insurance reserves, deferred acquisition costs, tax credit carryforwards, employee benefit plans and deferred Lloyd’s underwriting income. The realization of deferred tax assets depends upon the existence of sufficient taxable income within the carryback or carryforward periods under the tax law in the applicable tax jurisdiction. Consideration is given to all available positive and negative evidence, including reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. Valuation allowances are established if, based on available information, it is determined that it is more likely than not that all or some portion of the deferred tax assets will not be realized. Changes in valuation allowances are generally reflected in income tax expense or as an adjustment to other comprehensive income (loss) depending on the nature of the item for which the valuation allowance is being recorded. M. Stock-Based Compensation The Company recognizes the fair value of compensation costs for all share-based payments, including employee stock options, in the financial statements. Unvested awards are generally expensed on a straight line basis, by tranche, over the vesting period of the award. The Company’s stock-based compensation plans are discussed further in Note 11 – “Stock-Based Compensation Plans”. N. Earnings Per Share Earnings per share (“EPS”) for the years ended December 31, 2016, 2015 and 2014 is based on a weighted average of the number of shares outstanding during each year. Basic and diluted EPS is computed by dividing income available to common stockholders by the weighted average number of shares outstanding for the period. The weighted average shares outstanding used to calculate basic EPS differ from the weighted average shares outstanding used in the calculation of diluted EPS due to the effect of dilutive employee stock options, nonvested stock grants and other contingently issuable shares. If the effect of such items is antidilutive, the weighted average shares outstanding used to calculate diluted EPS are equal to those used to calculate basic EPS. Options to purchase shares of common stock whose exercise prices are greater than the average market price of the common shares are not included in the computation of diluted earnings per share because the effect would be antidilutive. O. Foreign Currency The Company’s reporting currency is the U.S. dollar. The functional currencies of the Company’s foreign operations are the U.K. pound sterling (“GBP”), U.S. dollar, and Canadian dollar. Assets and liabilities of foreign operations are translated into the U.S. dollar using the exchange rates in effect at the balance sheet date. Revenues and expenses of foreign operations are translated using the average exchange rate for the period. Gains or losses from translating the financial statements of foreign operations are recorded in the cumulative translation adjustment, as a separate component of accumulated other comprehensive income. Gains and losses arising from transactions denominated in a foreign currency, other than the Company’s functional currencies, are included in net income (loss), except for the Company’s foreign currency denominated available-for-sale investments. The Company’s foreign currency denominated available-for-sale investments’ change in exchange rates between the local currency and the functional currency at each balance sheet date represents an unrealized appreciation or depreciation in value of these securities, and is included as a component of accumulated other comprehensive income. The Company manages its exposure to foreign currency risk primarily by matching assets and liabilities denominated in the same currency. To the extent that assets and liabilities in foreign currencies are not matched, the Company is exposed to foreign currency risk. For functional currencies, the related exchange rate fluctuations are reflected in other comprehensive income (loss). The Company translated Chaucer’s balance sheet at December 31, 2016 and 2015 from GBP to U.S. dollars using a conversion rate of 1.23 and 1.47 , respectively. The Company recognized $22.3 million in foreign currency transaction losses in the Consolidated Statements of Income during the year ended December 31, 2016, and $8.5 million and $3.3 million in foreign currency transaction gains for the years ended December 31, 2015 and 2014, respectively. These amounts include realized losses of Euro denominated securities of $0.7 million, $3.4 million, and $1.3 million in 2016, 2015, and 2014, respectively. P. New Accounting Pronouncements Recently Implemented Standards In May 2015, the Financial Accounting Standards Board (“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 implemented this guidance beginning with its disclosures for the year ended December 31, 2016. The effect of implementing this guidance was not material to the Company’s financial position or results of operations, as the update is disclosure related. In April 2015, the FASB issued 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. In August 2014, the FASB issued ASC Update No. 2014-15, (Subtopic 205-40) Presentation of Financial Statements– 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 implemented this guidance beginning with the year-ended December 31, 2016. The effect of implementing this guidance was not material to the Company’s financial position or results of operations. In April 2014, the FASB issued ASC Update No. 2014-08, (Topic 205 and Topic 360) Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This ASC update modifies the definition of discontinued operations by limiting discontinued operations reporting to disposals of components of an entity that represent strategic shifts that have (or will have) a major effect on an entity’s operations and financial results. Also, this update requires additional financial statement disclosures about discontinued operations, as well as disposals of an individually significant component of an entity that do not qualify for discontinued operations presentation. This ASC update was effective for all disposals (or classifications as held for sale) of components of an entity that occurred within annual and interim periods beginning on or after December 15, 2014 and for all businesses that, on acquisition, were classified as held for sale that also occurred within interim and annual periods beginning on or after December 15, 2014. The Company implemented this guidance effective January 1, 2015. The effect of implementing this guidance was not material to the Company’s financial position or results of operations. Recently Issued Standards In January 2017, the FASB issued ASC Update No. 2017-04, (Topic 350) Intangibles – Goodwill and Other: Simplifying the Test for Goodwill Impairment . This guidance eliminates step 2 from the goodwill impairment test. Instead, an entity should perform its goodwill impairment test by comparing the fair value of the reporting unit with its carrying amount, including any applicable income tax effects, and recognize an impairment for the amount by which the carrying amount exceeds the reporting units fair value. However, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The updated guidance is effective for annual or interim goodwill impairment tests performed in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not expect the adoption of ASC Update No. 2017-04 to have a material impact on its financial position or results of operations. In January 2017, the FASB issued ASC Update No. 2017-01, (Topic 805) Business Combinations – Clarifying the Definition of a Business . The amendments in this update provide a more robust framework to use in determining when a set of assets and activities constitute a business. This guidance narrows the definition of a business by providing specific requirements that contribute to the creation of outputs that must be present to be considered a business. The guidance further clarifies the appropriate accounting when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets is that of an acquisition (disposition) of assets, not a business. This framework will reduce the number of transactions that an entity must further evaluate to determine whether transactions are business combinations or asset acquisitions. The updated guidance is effective for interim and annual periods beginning after December 15, 2017, and should be applied on a prospective basis. Early adoption is permitted only for transactions that have not been reported in financial statements that have been issued. The Company does not expect the adoption of ASC Update No. 2017-01 to have a material impact on its financial position or results of operations. In November 2016, the FASB issued ASC Update No. 2016-18 (Topic 230) Statement of Cash Flows – Restricted Cash (a consensus of the FASB Emerging Issues Task Force) . The amendments in this update require that restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Current GAAP does not include specific guidance on the cash flow classification and presentation of changes in restricted cash. The updated guidance is effective for interim and annual periods beginning aft |
Dispositions Of Businesses
Dispositions Of Businesses | 12 Months Ended |
Dec. 31, 2016 | |
Dispositions Of Businesses [Abstract] | |
Dispositions Of Businesses | 2. DISPOSITIONS OF BUSINESSES Disposal of U.K. Motor Business Effective June 30, 2015, the Company transferred its U.K. motor business to an unaffiliated U.K.-based insurance provider. The transaction was executed through a 100 percent reinsurance arrangement for prior claim liabilities and in-force policies written by this division and the sale of two entities associated with this business. Total consideration from the sale of the Chaucer subsidiaries was $64.9 million and the transaction resulted in a net gain of $40.6 million. The components of the gain are as follows: (in millions) Total consideration $ 64.9 Less: Carrying value of subsidiaries (7.6) Intangibles and goodwill disposed (1) (17.7) Transaction expenses and employee-related and other costs (2) (7.7) Realized gain on investments transferred as part of reinsurance agreement (3) 5.8 Other items 0.7 Pre-tax gain 38.4 Income tax benefit 2.2 Net gain $ 40.6 (1) Reflects $17.2 million of indefinite-lived intangible assets associated with the U.K. motor business upon THG’s purchase of Chaucer in July 2011 and $0.5 million of goodwill. (2) Transaction costs include legal, actuarial and other professional fees. (3) As part of the reinsurance agreement, investments were transferred, resulting in the recognition of net realized investment gains that were previously reflected in accumulated other comprehensive income. In connection with the reinsurance arrangement, insurance liabilities of approximately $443 million were ceded, including $137.4 million of written premiums, and approximately $419 million of investments, cash, and premiums receivable were transferred. The $25 million difference between assets and liabilities approximates the DAC balance associated with this business. Discontinued Operations Discontinued operations primarily consist of the Company’s former life insurance businesses, which were sold prior to 2009, and its discontinued accident and health business. The Company’s former life insurance businesses include in demnity obligations for which it established reserves. During 1999, the Company exited its accident and health insurance business, consisting of its Employee Benefit Services business, its Affinity Group Underwriters business and its accident and health assumed reinsurance pool business. Prior to 1999, these businesses comprised substantially all of the former Corporate Risk Management Services segment. Accordingly, the operating results of the discontinued segment have been reported in accordance with Accounting Principles Board Opinion No. 30, Reporting the Results of Operations—Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions (“APB Opinion No. 30”). On January 2, 2009, Hanover Insurance directly assumed a portion of the accident and health business; and therefore continues to apply APB Opinion No. 30 to this business. In addition, the remainder of the Discontinued First Allmerica Financial Life Insurance Company (“FAFLIC”) accident and health business was reinsured by Hanover Insurance in connection with the sale of FAFLIC to Commonwealth Annuity, and has been reported in accordance with ASC 205 , Presentation of Financial Statements . At December 31, 2016 and 2015, the portion of the discontinued accident and health business that was directly assumed had assets of $57.6 million and $54.5 million, respectively, consisting primarily of invested assets, and liabilities of $49.3 million and $46.5 million, respectively, consisting primarily of policy liabilities. At December 31, 2016 and 2015, the assets and liabilities of this business, as well as those of the reinsured portion of the accident and health business are classified as assets and liabilities of discontinued operations in the Consolidated Balance Sheets. Discontinued operations for the years ended December 31, 2016, 2015 and 2014 resulted in losses of $1.0 million, gains of $0.7 million and losses of $0.3 million, respectively, net of tax. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2016 | |
Investments [Abstract] | |
Investments | 3. 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: DECEMBER 31, 2016 (in millions) Amortized Gross Gross OTTI Cost or Unrealized Unrealized Unrealized Cost Gains Losses Fair Value Losses Fixed maturities: U.S. Treasury and government agencies $ 342.5 $ 3.7 $ 5.1 $ 341.1 $ - Foreign government 235.8 5.4 0.5 240.7 - Municipal 1,065.8 38.8 9.2 1,095.4 - Corporate 3,989.8 113.0 49.0 4,053.8 15.8 Residential mortgage-backed 978.2 9.6 13.6 974.2 0.4 Commercial mortgage-backed 550.6 7.8 4.1 554.3 - Asset-backed 72.4 0.2 0.8 71.8 - Total fixed maturities $ 7,235.1 $ 178.5 $ 82.3 $ 7,331.3 $ 16.2 Equity securities $ 498.4 $ 86.7 $ 0.7 $ 584.4 $ - DECEMBER 31, 2015 (in millions) Amortized Gross Gross OTTI Cost or Unrealized Unrealized Unrealized 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 $ - 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 $21.4 million and $1.1 million as of December 31, 2016 and 2015, respectively. The Company participates in a security lending program for the purpose of enhancing income. Securities on loan to various counterparties had a fair value of $29.9 million and $36.2 million at December 31, 2016 and 2015, respectively, and were fully collateralized by cash. The fair value of the loaned securities is monitored on a daily basis, and the collateral is maintained at a level of at least 102% of the fair value of the loaned securities. Securities lending collateral is recorded by the Company in cash and cash equivalents, with an offsetting liability included in expenses and taxes payable. At December 31, 2016 and 2015, fixed maturities with fair values of $251.6 million and $217.4 million, respectively, and amortized cost of $238.5 million and $206.5 million, respectively, were on deposit with various state and governmental authorities. 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. At December 31, 2016 and 2015, fixed maturities with a fair value of $491.2 million and $440.6 million, respectively, and cash of $6.3 million and $7.0 million, respectively, were on deposit with Lloyd’s. The Company enters into various agreements that may require its fixed maturities to be held as collateral by others. At December 31, 2016 and 2015, fixed maturities with a fair value of $217.9 million and $188.1 million, respectively, were held as collateral for collateralized borrowings and other arrangements. Of these amounts, $201.8 million and $176.0 million related to the FHLBB collateralized borrowing program at December 31, 2016 and 2015, respectively. See Note 6—“Debt and Credit Arrangements” for additional information related to the Company’s FHLBB program. 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. DECEMBER 31 2016 (in millions) Amortized Cost Fair Value Due in one year or less $ 373.3 $ 376.9 Due after one year through five years 3,132.1 3,217.4 Due after five years through ten years 1,806.1 1,802.1 Due after ten years 322.4 334.6 5,633.9 5,731.0 Mortgage-backed and asset-backed securities 1,601.2 1,600.3 Total fixed maturities $ 7,235.1 $ 7,331.3 B . UNREALIZED GAINS AND LOSSES Unrealized gains and losses on available-for-sale and other securities are summarized in the following table. YEARS ENDED DECEMBER 31 (in millions) Equity Fixed Securities and 2016 Maturities Other Total Net appreciation, beginning of year $ 116.5 $ 33.4 $ 149.9 Net appreciation on available-for-sale securities 36.9 39.2 76.1 Change in OTTI losses recognized in other comprehensive income 11.2 - 11.2 Provision for deferred income taxes (37.5) (13.7) (51.2) 10.6 25.5 36.1 Net appreciation, end of year $ 127.1 $ 58.9 $ 186.0 2015 Net appreciation, beginning of year $ 250.0 $ 50.9 $ 300.9 Net depreciation on available-for-sale securities (164.9) (26.8) (191.7) Change in OTTI losses recognized in other comprehensive income (20.0) - (20.0) Provision for deferred income taxes 51.4 9.3 60.7 (133.5) (17.5) (151.0) Net appreciation, end of year $ 116.5 $ 33.4 $ 149.9 2014 Net appreciation, beginning of year $ 212.1 $ 47.2 $ 259.3 Net appreciation on available-for-sale securities 76.3 10.2 86.5 Change in OTTI losses recognized in other comprehensive income 2.4 - 2.4 Provision for deferred income taxes (40.8) (6.5) (47.3) 37.9 3.7 41.6 Net appreciation, end of year $ 250.0 $ 50.9 $ 300.9 Equity securities and other balances at December 31, 2016, 2015 and 2014 include after-tax net appreciation on other invested assets of $2.5 million, $2.2 million and $2.6 million, respectively. C . 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 December 31, 2016 and 2015 including the length of time the securities have been in an unrealized loss position: DECEMBER 31, 2016 12 months or less Greater than 12 months Total (in millions) Gross Gross Gross Unrealized Fair Unrealized Fair Unrealized Fair Losses Value Losses Value Losses Value Fixed maturities: Investment grade: U.S. Treasury and government agencies $ 5.1 $ 165.9 $ - $ - $ 5.1 $ 165.9 Foreign governments 0.5 55.0 - 1.8 0.5 56.8 Municipal 7.2 268.4 2.0 29.3 9.2 297.7 Corporate 30.6 1,081.0 5.0 64.2 35.6 1,145.2 Residential mortgage-backed 12.1 570.0 1.5 29.0 13.6 599.0 Commercial mortgage-backed 4.1 187.5 - 6.3 4.1 193.8 Asset-backed 0.6 29.1 0.2 3.5 0.8 32.6 Total investment grade 60.2 2,356.9 8.7 134.1 68.9 2,491.0 Below investment grade: Corporate 1.2 45.9 12.2 81.8 13.4 127.7 Residential mortgage-backed - 0.1 - - - 0.1 Total below investment grade 1.2 46.0 12.2 81.8 13.4 127.8 Total fixed maturities 61.4 2,402.9 20.9 215.9 82.3 2,618.8 Equity securities 0.7 16.3 - - 0.7 16.3 Total $ 62.1 $ 2,419.2 $ 20.9 $ 215.9 $ 83.0 $ 2,635.1 DECEMBER 31, 2015 12 months or less Greater than 12 months Total (in millions) Gross Gross Gross Unrealized Fair Unrealized Fair Unrealized Fair Losses Value Losses Value Losses Value 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. D . OTHER INVESTMENTS The Company’s mortgage participations were $297.6 million and $200.9 million at December 31, 2016 and 2015, respectively. Participating interests in commercial mortgage loans are ori ginated and serviced by a third- party. For these investments, the Company shares, on a pro-rata basis, in all related cash flows of the underlying mortgages. Mortgage participations were comprised of the following property types and geographic locations. DECEMBER 31 2016 2015 (in millions) Property Type: Office $ 109.8 $ 75.0 Retail 64.7 58.8 Hotel 40.4 19.2 Apartments 38.4 33.4 Industrial 30.0 15.0 Mixed use 15.0 - Valuation allowance (0.7) (0.5) Total $ 297.6 $ 200.9 DECEMBER 31 2016 2015 (in millions) Geographic Region: South Atlantic $ 72.0 $ 47.0 Pacific 65.0 50.0 Mid-Atlantic 53.5 23.6 West South Central 51.3 35.0 New England 21.1 10.0 East North Central 10.4 10.8 West North Central 10.0 10.0 Other 15.0 15.0 Valuation allowance (0.7) (0.5) Total $ 297.6 $ 200.9 At December 31, 2016, scheduled maturities of mortgage participations were as follows: due in 2017 - $0.5 million; 2020 - $10.0 million; 2021 – $50.0 million and thereafter - $237.1 million. There were no scheduled loan maturities in 2018 or 2019 . Actual maturities could differ from contractual maturities because borrowers may have the right to pre pay obligations with or without prepayment penalties and loans may be refinanced. During 2016, the Company did not refinance any loans based on terms that differed from current market rates. Other investments also include interests in limited partnerships and overseas deposits of $121.3 million and $102.2 million , respectively, at December 31, 2016 , and $79.9 million and $100.9 million, respectively, at December 31, 2015. E . OTHER At December 31, 2016, t he Company had no concentration of investments in a single investee that exceeded 10% of shareholders’ equity except for fixed maturities invested in Federal Home Loan Mortgage Corp. (“FHLMC”) and mortgage participations with a highly rated single third-party. At December 31, 2016, the Company held FHLMC with fair value of $542.2 million and mortgage participations with a carrying value of $295.9 million. At December 31, 2015, the Company had no concentration of investments in a single investee that exceeds 10% of shareholders’ equity except for fixed maturities invested in FHLMC and Federal National Mortgage Association (“FNMA”). At December 31, 2015, the Company held FHLMC and FNMA with fair values of $467.9 million and $298.1 million, respectively. At December 31, 201 6 , there were contractual investment commitments of up to $128.8 million. |
Investment Income and Gains and
Investment Income and Gains and Losses | 12 Months Ended |
Dec. 31, 2016 | |
Investments [Abstract] | |
Investment Income and Gains and Losses | 4. INVESTMENT INCOME AND GAINS AND LOSSES A. NET INVESTMENT INCOME The components of net investment income were as follows: YEARS ENDED DECEMBER 31 2016 2015 2014 (in millions) Fixed maturities $ 245.1 $ 253.8 $ 255.8 Equity securities 18.6 17.5 16.5 Other investments 26.7 18.1 9.0 Gross investment income 290.4 289.4 281.3 Less investment expenses (11.0) (10.3) (11.0) Net investment income $ 279.4 $ 279.1 $ 270.3 The carrying values of fixed maturity securities on non-accrual status at December 31, 2016 and 2015 were not material. The effects of non-accruals for the years ended December 31, 2016, 2015 and 2014, compared with amounts of net investment income that would have been recognized in accordance with the original terms of the fixed maturities, were reductions of $1.1 million, $0.8 million and $2.1 million, respectively. B. NET REALIZED INVESTMENT GAINS AND LOSSES Net realized gains (losses) on investments were as follows: YEARS ENDED DECEMBER 31 2016 2015 2014 (in millions) Equity securities $ 25.4 $ 29.4 $ 45.8 Fixed maturities (16.6) (13.9) 4.5 Other investments (0.2) 4.0 (0.2) Net realized investment gains $ 8.6 $ 19.5 $ 50.1 Included in the net realized investment gains (losses) were OTTI of investment securities recognized in earnings totaling $27.9 million, $26.8 million and $5.5 million in 2016, 2015 and 2014, respectively. Other-than-temporary-impairments For 2016, total OTTI was $21.2 million. Of this amount, $27.9 million was recognized in earnings including $6.7 million which was transferred from unrealized losses in accumulated other comprehensive income (“AOCI”). The $27.9 million of OTTI recognized in earnings relates primarily to $16.1 million of fixed maturity securities that the Company intended to sell, $8.8 million of credit impairments and $2.7 million of equities. For 2015, total OTTI was $49.5 million. Of this amount, $ 26.8 million was recognized in earnings and the remaining $22.7 million was recorded as unrealized losses in AOCI. The $26.8 million of OTTI recognized in earnings relates to $16.0 million of credit impairments, $4.0 million of fixed maturity securities that the Company intended to sell and $6.8 million of equities. For 2014, total OTTI was $ 5.4 million. Of this amount, $5.5 million was recognized in earnings including $0.1 million which was transferred from unrealized losses in AOCI. The $5.5 million of OTTI recognized in earnings was related to fixed maturity securities that the Company intended to sell. 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 and asset duration and loss-given-default factors based on security type. These factors are based on historical data provided by an independent third-party rating agency. In addition, other market data relevant to the realizability of contractual cash flows may be considered. There were no credit impairments in 2014. 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. YEARS ENDED DECEMBER 31 2016 2015 2014 (in millions) Credit losses as of the beginning of the year $ 18.0 $ 4.2 $ 7.8 Credit losses on securities for which an OTTI was not previously recognized 6.4 8.3 - Additional credit losses on securities for which an OTTI was previously recognized 2.4 7.7 - Reductions for securities sold, matured or called (4.6) (1.8) (3.2) Reductions for securities reclassified as intend to sell (12.2) (0.4) (0.4) Credit losses as of the end of the year $ 10.0 $ 18.0 $ 4.2 The proceeds from sales of available-for-sale securities and the gross realized gains and gross realized losses on those sales, were as follows: YEARS ENDED DECEMBER 31 (in millions) Proceeds Gross Gross 2016 from Sales Gains Losses Fixed maturities $ 563.8 $ 11.7 $ 7.0 Equity securities $ 245.0 $ 31.1 $ 3.0 2015 Fixed maturities $ 1,167.6 $ 15.0 $ 9.3 Equity securities $ 270.0 $ 36.9 $ 4.2 2014 Fixed maturities $ 349.5 $ 5.8 $ 2.6 Equity securities $ 156.1 $ 46.2 $ 0.8 Proceeds from sales of fixed maturities in 2015 included proceeds of $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. |
Fair Value
Fair Value | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value [Abstract] | |
Fair Value | 5. 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 u tilizes 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 tha t 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 the Company’s 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: DECEMBER 31 2016 2015 (in millions) Carrying Fair Carrying Fair Value Value Value Value Financial Assets Cash and cash equivalents $ 282.6 $ 282.6 $ 338.8 $ 338.8 Fixed maturities 7,331.3 7,331.3 6,983.4 6,983.4 Equity securities 584.4 584.4 576.6 576.6 Other investments 497.8 497.6 365.4 367.9 Total financial assets $ 8,696.1 $ 8,695.9 $ 8,264.2 $ 8,266.7 Financial Liabilities Debt $ 786.4 $ 841.9 $ 803.1 $ 927.8 The Company has processes designed to ensure that the va lues 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 discusse d, 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. DECEMBER 31, 2016 (in millions) Total Level 1 Level 2 Level 3 Fixed maturities: U.S. Treasury and government agencies $ 341.1 $ 209.5 $ 131.6 $ - Foreign government 240.7 47.3 193.4 - Municipal 1,095.4 - 1,064.4 31.0 Corporate 4,053.8 - 4,049.6 4.2 Residential mortgage-backed, U.S. agency backed 924.4 - 924.4 - Residential mortgage-backed, non-agency 49.8 - 49.8 - Commercial mortgage-backed 554.3 - 539.3 15.0 Asset backed 71.8 - 71.8 - Total fixed maturities 7,331.3 256.8 7,024.3 50.2 Equity securities 574.6 573.1 - 1.5 Other investments 106.3 - 102.2 4.1 Total investment assets at fair value $ 8,012.2 $ 829.9 $ 7,126.5 $ 55.8 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. DECEMBER 31, 2016 (in millions) Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 282.6 $ 282.6 $ - $ - Equity securities 9.8 - 9.8 - Other investments 297.2 - - 297.2 Liabilities: Debt $ 841.9 $ - $ 841.9 $ - 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 tables above. The fair values of these investments were $94.1 million and $59.9 million as of December 31, 2016 and 2015, respectively, which were approximately 1% of total investment assets. The following tables provide a reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3). YEAR ENDED DECEMBER 31, 2016 Fixed Maturities (in millions) Municipal Corporate Commercial mortgage-backed Asset-backed Total Equity and Other Total Assets Balance at beginning of year $ 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 (losses) 0.1 (0.2) - - (0.1) - (0.1) Included in other comprehensive income - net appreciation (depreciation) on available-for-sale securities 0.6 0.6 (0.2) - 1.0 0.7 1.7 Purchases and sales: Purchases - 0.3 - - 0.3 - 0.3 Sales (2.9) (0.2) (1.8) (0.5) (5.4) - (5.4) Balance at end of year $ 31.0 $ 4.2 $ 15.0 $ - $ 50.2 $ 5.6 $ 55.8 YEAR ENDED DECEMBER 31, 2015 Fixed Maturities (in millions) Municipal Corporate Commercial mortgage-backed Asset-backed Total Equity and Other Total Assets Balance at beginning of year $ 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 losses: Included in other comprehensive income - net depreciation on available-for-sale securities (0.5) (0.8) (1.0) (0.1) (2.4) (0.1) (2.5) Purchases and sales: Purchases 11.2 - - - 11.2 - 11.2 Sales (2.0) (0.5) (3.4) (0.7) (6.6) - (6.6) Balance at end of year $ 34.4 $ 3.7 $ 17.0 $ 0.5 $ 55.6 $ 4.9 $ 60.5 During the years en ded December 31, 2016 and 2015, the Company transferred fixed maturities 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 2016 or 2015. There were no Level 3 liabilities held by the Company for years ended December 31, 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 of $0.6 million for securities based on broker quotes for which there was a lack of transparency as to inputs used to develop the valuations have been excluded. DECEMBER 31, 2016 2015 Valuation Significant Fair Range Fair Range (in millions) Technique Unobservable Inputs Value (Wtd Average) Value (Wtd Average) Fixed maturities: Municipal Discounted Discount for: $ 31.0 $ 34.4 cash flow Small issue size 0.7 - 6.8% ( 3.3% ) 0.6 - 6.8% ( 3.2% ) Credit stress 0.9 - 1.5% ( 1.2% ) 0.9 - 1.5% ( 1.2% ) Above-market coupon 0.3 - 0.5% ( 0.4% ) 0.3 - 1.0% ( 0.4% ) Corporate Discounted Discount for: 4.0 3.7 cash flow Small issue size 2.0 - 2.5% ( 2.1% ) 1.0% ( 1.0% ) Credit stress 1.0% ( 1.0% ) 10.0% ( 10.0% ) Above-market coupon 0.3 - 0.8% ( 0.6% ) 0.3 - 0.8% ( 0.6% ) Commercial Discounted Discount for: 15.0 17.0 mortgage-backed cash flow Small issue size 1.9 - 3.1% ( 2.6% ) 0.5 - 1.0% ( 0.5% ) Above-market coupon 0.5% ( 0.5% ) 0.5% ( 0.5% ) Lease structure 0.3% ( 0.3% ) 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 4.1 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. |
Debt and Credit Arrangements
Debt and Credit Arrangements | 12 Months Ended |
Dec. 31, 2016 | |
Debt and Credit Arrangements [Abstract] | |
Debt and Credit Arrangements | 6. DEBT AND CREDIT ARRANGEMENTS Debt consists of the following: DECEMBER 31 2016 2015 (in millions) Senior debentures maturing April 15, 2026 $ 375.0 $ - Senior debentures maturing October 15, 2025 62.6 74.6 Senior debentures maturing June 15, 2021 - 300.0 Senior debentures maturing March 1, 2020 - 80.0 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 797.3 814.3 Unamortized debt issuance costs (10.9) (11.2) Total $ 786.4 $ 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 . Net proceeds from the issuance were $370.7 million. On May 21, 2016, the proceeds, together with cash on hand, were used to redeem the outstanding 7.50% senior notes due March 1, 2020 and the 6.375% senior notes due June 15, 2021 . The redemption of these notes resulted in a pre-tax loss of $86.1 million. The Compa ny also held 7.625% senior uns ecured debentures that were issued on October 16, 1995 with a par value of $200.0 million. As of December 31, 2016 and 2015, the remaining 7.625% senior debentures have a par value of $62.6 million and $74.6 million, respectively, and mature on October 15, 2025 . Both of the Company’s outstanding senior debentures are subject to certain restrictive covenants, including limitations on the issuance or disposition of stock of restricted subsidiaries and limitations on liens , and pay interest semi-annually. The Company also held $175.0 milli on aggregate principal amount of 6.35% subordinated unsecured debentures due March 30, 2053 . These debentures pay interest quarterly. The Company may redeem these debentures in whole at any time, or in part from time to time, on or after March 30, 2018 , at a redemption price equal to their principal amount plus accrued and unpaid interest. In addition, the Company’s subordinated debentures maturing February 3, 2027 have a par value of $59.7 million as of December 31, 2016 and 2015 and pay cumulative dividends semi-annually at 8.207% . In 2016, in addition to the redemption of the senior debentures maturing June 15, 2021 and March 1, 2020, the Company repurchased senior debentures maturing October 15, 2025, with a carrying value of $11.9 million at a cost of $14.1 million, resulting in a pre-tax loss of $2.2 million. In 2015, the Company repurchased senior debentures maturing March 1, 2020 , with a carrying value of $83.7 million at a cost of $106.0 million, resulting in a pre-tax loss of $22.3 million, and senior debentures maturing October 15, 2025 , with a carrying value of $6.5 million at a cost of $8.3 million, resulting in a pre-tax loss of $1.8 million. In 2009, Hanover Insurance received a $125.0 million FHLBB advance through its membership in the FHLBB. This collateralized advance bears interest at a fixed rate of 5.50% per annum over a twenty -year term. As collateral to FHLBB, the Company pledged government agency securities with a fair value of $201.8 million and $176.0 million, for the aggregate borrowings of $125.0 million as of December 31, 2016 and December 31, 2015, respectively. The fair value of the collateral pledged must be maintained at certain specified levels of the borrowed amount, which can vary depending on the type of assets pledged. If the fair value of this collateral declines below these specified levels, the Company would be required to pledge additional collateral or repay outstanding borrowings. The Company is permitted to voluntarily repay the outstanding borrowings at any time, subject to a repayment fee. As a requirement of membership in the FHLBB, the Company maintains a certain level of investment in FHLBB stock. Total holdings of FHLBB stock were $9.8 million and $8.9 million at December 31, 2016 and 2015, respectively. At December 31, 2016, the Company had a $200.0 million credit agreement which expires in November 2018 . The Company had no borrowings under this agreement. Additionally, the Company had a Standby Letter of Credit Facility not to exceed £170.0 million (or $209.6 million). This Letter of Credit Facility provides regulatory capital supporting Chaucer’s underwriting activities for the 2015, 2016 and 2017 years of account and each prior open year of account. Simultaneous with this agreement, THG entered into a Guaranty Agreement with Lloyds Bank plc, as Facility Agent and Se curity Agent, pursuant to which THG unconditionally guarantees the obligations of Chaucer under the Letter of Credit Facility. Interest expense was $54.9 million, $60.6 million, and $65.8 million in 2016, 2015 and 2014, respectively. At December 31, 2016, the Company was in compliance with the covenants associated with all of its debt indentures and credit arrangements. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes [Abstract] | |
Income Taxes | 7. INCOME TAXES Provisions for income taxes have been calculated in accordance with the provisions of ASC 740. A summary of the components of income before income taxes and income tax expense in the Consolidated Statements of Income are shown below: YEARS ENDED DECEMBER 31 2016 2015 2014 (in millions) Income before income taxes: U.S. $ 70.8 $ 220.9 $ 185.6 Non-U.S. 121.5 218.5 192.4 $ 192.3 $ 439.4 $ 378.0 Income tax expense includes the following components: YEARS ENDED DECEMBER 31 2016 2015 2014 (in millions) Current: U.S. $ 16.8 $ 32.7 $ 4.5 Non-U.S. 35.3 23.1 22.6 Total current 52.1 55.8 27.1 Deferred: U.S. (20.4) 44.0 51.1 Non-U.S. 4.5 8.8 17.5 Total deferred (15.9) 52.8 68.6 Total income tax expense $ 36.2 $ 108.6 $ 95.7 The income tax expense attributable to the consolidated results of continuing operations is different from the amount determined by multiplying income from continuing operations before income taxes by the U.S. statutory federal income tax rate of 35% . The sources of the difference and the tax effects of each were as follows: YEARS ENDED DECEMBER 31 2016 2015 2014 (in millions) Expected income tax expense $ 67.3 $ 153.7 $ 132.3 Tax difference related to investment disposals and maturities (20.7) (13.3) (16.2) Effect of foreign operations (6.6) (7.8) (8.1) Dividend received deduction (3.3) (3.1) (2.6) Tax-exempt interest (1.1) (1.4) (1.7) Foreign tax credits (0.6) (5.6) - Gain on disposal of U.K. motor business exempt from tax - (17.3) - Foreign exchange losses - - (6.9) Change in valuation allowance - - (2.9) Nondeductible expenses 1.4 1.6 1.8 Change in liability for uncertain tax positions - 1.7 - Other, net (0.2) 0.1 - Income tax expense $ 36.2 $ 108.6 $ 95.7 Effective tax rate 18.8 % 24.7 % 25.3 % The following are the components of the Company’s deferred tax assets and liabilities (excluding those associated with its discontinued operations). DECEMBER 31 2016 2015 (in millions) Deferred tax assets: Loss, LAE and unearned premium reserves, net $ 183.9 $ 179.0 Tax credit carryforwards 94.6 70.5 Employee benefit plans 44.4 39.6 Investments, net - 12.4 Other 54.9 53.6 377.8 355.1 Less: Valuation allowance - - 377.8 355.1 Deferred tax liabilities: Deferred acquisition costs 141.0 134.9 Deferred Lloyd's underwriting income 32.7 22.4 Software capitalization 28.9 26.9 Investments, net 27.9 - Other 32.2 33.0 262.7 217.2 Net deferred tax asset $ 115.1 $ 137.9 Deferred tax assets are reduced by a valuation allowance if it is more likely than not that all or some portion of the deferred tax assets will not be realized. The Company’s deferred tax asset as of December 31, 2016 included assets of $72.3 million re lated to alternative minimum tax credit carryforwards and $22.3 million related to foreign tax credit carryforwards. The alternative minimum tax credit carryforwards have no expiration date, and the foreign tax credit carryforwards will expire beginning in 2026 . The Company has utilized in 2016 and may continue to utilize the credits to offset regular federal income taxes due from future income, and although the Company believes that these assets are fully recoverable, there can be no certainty that future events will not affect their recoverability. The Company believes, based on objective evidence, it is more likely than not that the remaining deferred tax assets will be realized. In prior years, the Company completed several transactions which resulted in the realization, for tax purposes only, of unrealized gains in its investment portfolio. As a result of these transactions, the Company was able to realize capital losses carried forward and to release the valuation allowance recorded against the deferred tax asset related to these losses. The releases of valuation allowances were recorded as a benefit in accumulated other comprehensive income. Previously unrealized benefits of $20.7 million, $13.3 million and $16.2 million attributable to non-operating income, are recognized as part of income from continuing operations during 2016, 2015 and 2014, respectively. The remaining amount of $57.5 million in accumulated other comprehensive income will be released into income from continuing operations in future years, as the investment securities subject to these transactions are sold or mature. 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 tax 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 $23.5 million, $69.8 million and $23.3 million of non-U.S. income for 2016, 2015 and 2014, respectively. However, in the future, if such earnings were distributed to the Company, taxes of $43.4 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 table below provides a reconciliation of the beginning and ending liability for uncertain tax positions as follows: YEARS ENDED DECEMBER 31 2016 2015 2014 (in millions) Liability at beginning of year, net $ 3.0 $ 1.3 $ 1.4 Additions for tax positions of prior years 0.4 1.7 (0.1) Settlements/subtractions for tax positions of prior years (0.7) - (4.8) Deferred deductions - - 4.8 Liability at end of year, net $ 2.7 $ 3.0 $ 1.3 In 2014, the IRS audits of the years 2007 through 2010 were settled with no material impact to the Company’s financial position or results of operations. There are no tax positions at December 31, 2016, 2015 and 2014 for which the ultimate deductibility is highly certain, but for which there is uncertainty about the timing of such deductibility. Because of the impact of deferred tax accounting, other than interest and penalties, a change in the timing of deductions would not impact the annual effective tax rate. The Company recognizes interest and penalties related to unrecognized tax benefits in federal income tax expense. The Company had accrued interest of $0.2 milli on and $0.6 million as of December 31, 2016 and 2015, respectively. For the years ended December 31, 2016, 2015 and 2014 the Company recognized a release of interest of $0.4 million , and expense of $0.1 million a nd $0.5 million, respectively. The Company has not recognized any penalties associated with unrecognized tax benefits. In 2017, the Company is expecting to release $0.6 million of liability due to the expiration of a statute of limitations. The C ompany or its subsidiaries file 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 2012 , U.S. state income tax examinations for years after 201 2 and foreign examinations for years after 201 2 . |
Pension Plans
Pension Plans | 12 Months Ended |
Dec. 31, 2016 | |
Pension Plans [Abstract] | |
Pension Plans | 8. PENSION PLANS DEFINED BENEFIT PLANS The Company recognizes the funded status of its defined benefit plans in its Consolidated Balance Sheets. The funded status is measured as the difference between the fair value of plan assets and the projected benefit obligation of the Company’s defined benefit plans. The Company is required to aggregate separately all overfunded plans from all underfunded plans. U.S. Defined Benefit Plans Prior to 2005, THG provided retirement benefits to substantially all of its employees under defined benefit pension plans. These plans were based on a defined benefit cash balance formula, whereby the Company annually provided an allocation to each covered employee based on a percentage of that employee’s eligible salary, similar to a defined contribution plan arrangement. In addition to the cash balance allocation, certain transition group employees who had met specified age and service requirements as of December 31, 1994 were eligible for a grandfathered benefit based primarily on the employees’ years of service and compensation during their highest five consecutive plan years of employment. The Company’s policy for the plans is to fund at least the minimum amount required by the Employee Retirement Income Security Act of 1974 (“ERISA”). As of January 1, 2005, the defined benefit pension plans were frozen and since that date, no further cash balance allocations have been credited to participants. Participants’ accounts are credited with interest daily, based upon the General Agreement of Trades and Tariffs rate (the 30-year Treasury Bond interest rate). In addition, the grandfathered benefits for the transition group were also frozen at January 1, 2005 levels with an annual transition pension adjustment calculated at an interest rate equal to 5% per year up to 35 years of completed service, and 3% thereafter. As of December 31, 2016, based on current estimates of plan liabilities and other assumptions, the projected benefit obligation of the qualified defined benefit pension plan exceeds plan assets by approximately $54 million. Chaucer Pension Plan Prior to 2002, the Chaucer segment provided defined benefit pension retirement benefits to certain of its employees. As of December 31, 2001, the defined benefit pension plan was closed to new members , and as of December 31, 2016 the plan is no longer accruing for future salary increases . The defined benefit obligation for this plan is based on the employees’ years of service and final pensionable salary. Contributions are made at least annually to this plan by both the Company and by employees. As of December 31, 2016, based on current estimates of plan liabilities and other assumptions, the projected benefit obligation of the qualified defined benefit pension plan exceeds plan assets by approximately $16 million. Assumptions In order to measure the expense associated with these plans, management must make various estimates and assumptions, including discount rates used to value liabilities, assumed rates of return on plan assets, employee turnover rates and anticipated mortality rates, for example. The estimates used by management are based on the Company’s historical experience, as well as current facts and circumstances. In addition, the Company uses outside actuaries to assist in measuring the expense and liability associated with these plans. The Company measures the funded status of its plans as of the date of its year-end statement of financial position. The Company utilizes a measurement date of December 31 st to determine its benefit obligations, consistent with the date of its Consolidated Balance Sheets. Weighted average assumptions used to determine pension benefit obligations are as follows: DECEMBER 31 2016 2015 2014 U.S. Discount rate - qualified plan 4.25% 4.88% 4.38% Discount rate - non-qualified plan 4.25% 4.75% 4.25% Cash balance interest crediting rate 3.50% 3.50% 3.50% Chaucer Discount rate 2.85% 3.85% 3.75% Rate of increase in future compensation (1) 3.15% 3.10% 3.00% (1) The salary increase assumption as of December 31, 2016 is used to calculate the curtailment gain that resulted from the cessation of future salary increases. The Company utilizes a measurement date of January 1 st to determine its periodic pension costs. Weighted average assumptions used to determine net periodic pension costs for the defined benefit plans are as follows: YEARS ENDED DECEMBER 31 2016 2015 2014 U.S. Qualified plan Discount rate 4.88% 4.38% 5.00% Expected return on plan assets 5.25% 5.00% 5.50% Cash balance interest crediting rate 3.50% 3.50% 3.50% Non-qualified plan Discount rate 4.75% 4.25% 5.00% Chaucer Discount rate 3.85% 3.75% 4.50% Rate of increase in future compensation 3.10% 3.00% 3.15% Expected return on plan assets 5.45% 5.45% 6.55% The expected rates of return were determined by using historical mean returns for each asset class, adjusted for certain factors believed to have an impact on future returns. These returns are generally weighted to the plan’s actual asset allocation. For the U.S. defined benefit plans, an in crease in the expected return on plan assets for 2016 to 5.25% reflects long-term expectations for improvements, including increased inter est rates, in the fixed maturities market in general. For the Chaucer plan , the expected rate of return on plan assets was 5.45% , f or both the years ended December 31, 2016 and 2015 . The Company reviews and updates, at least annually, its expected return on plan assets based on changes in the actual assets held by the plans and market conditions. Plan Assets U.S. Qualified Defined Benefit Plan The Company utilizes a target allocation strategy, which focuses on creating a mix of assets that will generate modest growth from equity securities while minimizing volatility in the Company’s earnings from changes in the markets and economic environment. Various factors are taken into consideration in determining the appropriate asset mix, such as census data, actuarial valuation information and capital market assumptions. The Company reviews and updates, at least annually, the target allocation and makes changes periodically. The following table provides 2016 target allocations and actual invested asset allocations for 2016 and 2015. DECEMBER 31 2016 TARGET LEVELS 2016 2015 Fixed income securities: Fixed maturities 83% 83% 84% Money market funds 2% 2% 1% Total fixed income securities 85% 85% 85% Equity securities: Domestic 12% 12% 12% International 3% 3% 3% Total equity securities 15% 15% 15% Total plan assets 100% 100% 100% The following tables present , for each hierarchy level , the U.S. qualified defined benefit plan’s investment assets that are measured at fair value at December 31, 2016 and 2015. Refer to Note 5 – “Fair Value” for a description of the different levels in the Fair Value Hierarchy . DECEMBER 31 2016 2015 (in millions) Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Fixed income securities: Fixed maturities $ 53.7 $ 23.0 $ - $ 30.7 $ 42.0 $ 10.3 $ - $ 31.7 Money market funds 7.1 7.1 - - 4.7 4.7 - - Total investments at fair value $ 60.8 $ 30.1 $ - $ 30.7 $ 46.7 $ 15.0 $ - $ 31.7 Fixed Income Securities Securities classified as Level 1 at December 31, 2016 and 2015 include actively traded mutual funds and publicly traded securities, which are valued at quoted market prices. Securities classified as Level 3 at December 31, 2016 and 2015 include assets held in a fixed account of an insurance company. The fair value of the investment is estimated using a comparable public market financial institution derived fair value curve that uses non-observable inputs for market liquidity and unique credit characteristics of its underlying securities. The Plan also holds investments measured at fair value using NAV based on the value of the underlying investments, which is determined independently by the investment manager and have not been included in the table above. These include investments in commingled pools and investment-grade fixed income securities, held in a custom fund, and commingled pools that primarily invest in publicly traded common stocks and international equity securities. The daily NAV, which is not published as a quoted market price for these investments, is used as the basis for transactions. Redemption of these funds is not subject to restriction. The fair values of these investments are as follows: DECEMBER 31 2016 2015 Fixed maturities $ 322.4 $ 355.6 Equity securities: Domestic 53.9 54.6 International 16.2 15.9 Total equity 70.1 70.5 Total investments carried at NAV $ 392.5 $ 426.1 The table below provides a reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3). YEAR ENDED DECEMBER 31 2016 (in millions) Balance at beginning of period $ 31.7 Actual return on plan assets related to assets still held (1.0) Balance at end of year $ 30.7 Chaucer Pension Plan The investment strategy of the Chaucer defined benefit pension plan is to invest primarily in growth assets in the form of equity funds that are expected to provide a positive return exceed ing inflation over the longer term in order to protect the existing and future liabilities of the pension plan. In order to reduce volatility and diversify the portfolio, the target allocation includes an exposure to corporate bond and commercial property funds. This allocation plan is reviewed annually , and target allocation changes are made as appropriate. The following table provides 2016 target allocations and actual invested asset allocations for 2016 and 2015. DECEMBER 31 2016 TARGET LEVELS 2016 2015 Fixed income securities: Fixed maturities 30% 34% 32% Equity securities: Domestic (United Kingdom) 15% 14% 14% International 45% 41% 42% Total equity securities 60% 55% 56% Real estate funds 10% 11% 12% Total plan assets 100% 100% 100% The Chaucer plan only holds cash and equivalents and investments measured at fair value using NAV. These investments include pooled funds that are valued at the close of business using a third- party pricing service. These values are adjusted by the fund manager to reflect outstanding dividends, taxes and investment fees and other expenses to calculate the NAV. R eal estate fund investments are also valued based upon the values of the net assets of the fund. Although the NAV is calculated daily, transactions also consider cash inflows and outflows of the fund. The price where units are transacted includes the NAV, which is adjusted for investment charges and other estimated acquisition costs such as legal fees, taxes, planning and architect fees, survey and agent fees, among others. T he following table presents the Chaucer defined benefit plan’s investment assets at December 31, 2016 and 2015. DECEMBER 31 2016 2015 (in millions) Cash and equivalents $ 0.3 $ 0.6 Fixed income securities: Fixed maturities 39.4 38.7 Equity securities: Domestic (United Kingdom) 16.0 17.0 International 48.0 52.4 Total equity securities 64.0 69.4 Real estate funds 12.8 14.8 Total investments carried at NAV $ 116.5 $ 123.5 Obligations and Funded Status The Company recognizes the current net underfunded status of its plans in its Consolidated Balance Sheets. Changes in the funded status of the plans are reflected as components of either net income or accumulated other comprehensive loss or income. The components of accumulated other comprehensive loss or income are reflected as either a net actuarial gain or loss or a net prior service cost. The following table reflects the benefit obligations, fair value of plan assets and funded status of the plans at December 31, 2016 and 2015. DECEMBER 31 U.S. Qualified Pension Plan U.S. Non-Qualified Pension Plan Chaucer Pension Plan (in millions) 2016 2015 2016 2015 2016 2015 Accumulated benefit obligation $ 506.8 $ 500.5 $ 38.0 $ 37.8 $ 132.2 $ 126.0 Change in benefit obligation: Projected benefit obligation, beginning of period 500.5 538.5 37.8 40.6 128.3 137.5 Employee contributions - - - - 0.2 0.3 Service cost - benefits earned during the period - - - - 0.8 1.1 Interest cost 23.2 22.5 1.7 1.7 4.5 5.1 Actuarial losses (gains) 29.4 (23.3) 1.7 (1.3) 25.9 (0.7) Benefits paid (46.3) (37.2) (3.2) (3.2) (1.8) (5.8) Curtailment gain - - - - (2.4) (1.8) Foreign currency translation - - - - (23.3) (7.4) Projected benefit obligation, end of year 506.8 500.5 38.0 37.8 132.2 128.3 Change in plan assets: Fair value of plan assets, beginning of period 472.8 513.4 - - 123.5 131.8 Actual return on plan assets 26.8 (3.4) - - 15.4 3.3 Contributions - - 3.2 3.2 0.8 1.3 Benefits paid (46.3) (37.2) (3.2) (3.2) (1.8) (5.8) Foreign currency translation - - - - (21.4) (7.1) Fair value of plan assets, end of year 453.3 472.8 - - 116.5 123.5 Funded status of the plans $ (53.5) $ (27.7) $ (38.0) $ (37.8) $ (15.7) $ (4.8) Contributions inc lude $0.2 and $0.3 million of Chaucer employee contributions during 2016 and 2015, respectively. All other contributions for all plans were made by the Company. Components of Net Periodic Pension Cost The components of total net periodic pension cost are as follows: YEARS ENDED DECEMBER 31 2016 2015 2014 (in millions) Service cost - benefits earned during the period $ 0.7 $ 1.1 $ 1.5 Interest cost 29.5 29.3 33.7 Expected return on plan assets (29.6) (31.6) (36.6) Recognized net actuarial loss 13.5 13.9 11.7 Amortization of prior service cost - - 0.1 Settlement loss - - 12.1 Curtailment gain (2.4) (1.8) - Net periodic pension cost $ 11.7 $ 10.9 $ 22.5 During 2016, the Chaucer plan was closed to future salary accruals, which eliminated any remaining benefits to be accumulated in future periods, and resulted in a $2.4 million curtailment gain. An equal and offsetting expense was included in recognized net actuarial losses in the above table. During 2015, the Company transferred its U.K. motor business (See also “Disposal of U.K. Motor Business” in Note 2 – “ Dispositions of Businesses” ). As a result of this transaction , participants of the Chaucer plan who worked in this line also transferred to the unaffiliated U.K.-based insurance provider. Accordingly, they no longer are active participants of this plan and the liability was reduced resulting in a $1.8 million curtailment gain. An equal and offsetting expense was included in recognized net actuarial losses in the above table. During 2014, the Company announced a program to offer voluntary lump-sum pension payout options to eligible former employees that, if accepted, would settle the Company’s obligation to them. The program provided participants with a one-time choice of electing to receive a lump-sum settlement of their remaining pension benefit. As part of this voluntary lump-sum program, the Company settled $55.1 million of its pension obligations with an equal amount paid from plan assets. As a result, the Company recorded settlement losses of $10.8 million, reflecting the accelerated recognition of unamortized losses in the plan proportionate to the obligation that was settled. These settlement charges were recorded in other operating expenses with a corresponding balance sheet reduction in accumulated other comprehensive income. Additionally, the Company terminated another of its small qualified plans, accelerating the recognition of unamortized losses of $1.3 million. The following table reflects the total amounts recognized in accumulated other comprehensive income relating to both the U.S. defined benefit pension plans and the Chaucer pension plan as of December 31, 2016 and 2015. DECEMBER 31 2016 2015 (in millions) Net actuarial loss $ 150.4 $ 119.4 The unrecognized net actuarial gains (losses) which exceed 10% of the greater of the projected benefit obligation or the fair value of plan assets are amortized as a component of net periodic pension cost over the next five years. The following table reflects the total estimated amount of actuarial losses that will be amortized from accumulated other comprehensive income into net periodic pension cost in 2017 (the estimated expense related to the Chaucer plan was converted to U.S. dollars at an exchange rate of 1.23) : ESTIMATED AMORTIZATION IN 2017 Expense (in millions) Net actuarial loss $ 15.8 Contributions In accordance with ERISA guidelines, the Company is not required to fund its U.S. qualified benefit plan in 2017. The Company expects to contribute $3.2 million to its U.S. non-qualified pension plan to fund 2017 benefit payments and at a minimum, $7.4 million to the Chaucer pension plan; although additional contributions may be made into the Chaucer plan. (Estimated contributions related to the Chaucer plan were converted to U.S. dollars at an exchange rate of 1.23). At this time, no additional discretionary contributions are expected to be made in to the U.S. plans during 2017 , and the Company does not expect that any funds will be returned from the plans to the Company during 2017. Benefit Payments The Company estimates that benefit payments over the next 10 years will be as follows: YEARS ENDED DECEMBER 31 2017 2018 2019 2020 2021 2022-2026 (in millions) U.S. qualified pension plan $ 38.8 $ 37.7 $ 37.6 $ 37.4 $ 37.5 $ 174.9 U.S. non-qualified pension plan $ 3.2 $ 3.1 $ 3.0 $ 3.1 $ 2.9 $ 13.5 Chaucer pension plan $ 1.6 $ 1.7 $ 1.8 $ 1.8 $ 1.9 $ 10.8 The benefit payments are based on the same assumptions used to measure the Company’s benefit obligations at the end of 2016. Benefit payments related to the U.S. qualified plan and the Chaucer plan will be made from plan assets held in trusts and not included with Company assets, whereas those payments related to the non-qualified plan will be provided for by the Company. Expected benefits related to the Chaucer pension plan were converted to U.S. dollars at an exchange rate of 1.23 . DEFINED CONTRIBUTION PLAN In addition to the defined benefit plans, THG provides a defined contribution 401(k) plan for its U.S. employees, whereby the Company matches employee elective 401(k) contributions, up to a maximum of 6% of eligible compensation in 2016, 2015, and 2014. The Company’s expense for this matching provision was $21.4 million, $20.1 million and $19.9 million for 2016, 2015 and 2014, respectively. In addition to this matching provision, the Company can elect to make an annual contribution to employees’ accounts. Additional contributions amounted to $2.0 million and $2.1 million for the 2015 and 2014 plan years, respectively. Chaucer also provides a defined contribution plan for its employees that provides for employer provided contributions. The Company’s expense for 2016, 2015 and 2014 was $3.9 million, $4.8 million and $6.1 million, respectively. |
Other Postretirement Benefit Pl
Other Postretirement Benefit Plans | 12 Months Ended |
Dec. 31, 2016 | |
Other Postretirement Benefit Plans [Abstract] | |
Other Postretirement Benefit Plans | 9. OTHER POSTRETIREMENT BENEFIT PLANS In addition to the Company’s pension plans, the Company also has postretirement medical benefits that it provides to former agents and retirees and their dependents, and a limited number of full-time employees. The plans, which are funded by the Company through either a Health Reimbursement Arrangement (“HRA”) or directly, provide access to benefits including hospital and major medical, with certain limits, and have varying co-payments and deductibles, depending on the plan. Generally, employees who were actively employed on December 31, 1995 became eligible with at least 15 years of service after the age of 40 . Effective January 1, 1996, the Company revised these benefits so as to establish limits on future benefit payments to beneficiaries of retired participants and to restrict eligibility to then current employees. In 2009, the Company changed the postretirement medical benefits, only as they relate to current employees who still qualified for participation in the plan under the above formula. For these participants, the plan provided for only post age 65 benefits. In 2015, the Company amended the plan to only provide this benefit to those participants who retire before January 1, 2018, further limiting the number of current employees who are eligible to participate in this plan. The population of agents receiving postretirement benefits was frozen as of December 31, 2002, when the Company ceased its distribution of proprietary life and annuity products. This plan is unfunded. The Company has recognized the funded status of its postretirement benefit plans in its Consolidated Balance Sheets. Since the plans are unfunded, the amount recognized in the Consolidated Balance Sheets is equal to the accumulated benefit obligation of the plans. The components of accumulated other comprehensive income or loss are reflected as either a net actuarial gain or loss or a net prior service cost. Obligation and Funded Status The following table reflects the funded status of these plans: DECEMBER 31 2016 2015 (in millions) Change in benefit obligation: Accumulated postretirement benefit obligation, beginning of year $ 12.1 $ 17.0 Interest cost 0.5 0.5 Net actuarial loss 1.0 0.1 Benefits paid (2.0) (2.5) Plan amendment - (3.0) Accumulated postretirement benefit obligation, end of year 11.6 12.1 Fair value of plan assets, end of year - - Funded status of plans $ (11.6) $ (12.1) Benefit Payments The Company estimates that benefit payments over the next 10 years will be as follows: YEARS ENDING DECEMBER 31 (in millions) 2017 $ 1.4 2018 1.3 2019 1.2 2020 1.1 2021 1.0 2022 - 2026 4.1 The benefit payments are based on the same assumptions used to measure the Company’s benefit obligation at the end of 2016 and reflect benefits attributable to estimated future service. Components of Net Periodic Postretirement Expense (Benefit) The components of net periodic postretirement expense (benefit) were as follows: YEARS ENDED DECEMBER 31 2016 2015 2014 (in millions) Service cost $ - $ - $ 0.1 Interest cost 0.5 0.5 0.8 Recognized net actuarial loss 0.2 0.2 0.1 Amortization of prior service cost (benefit) (1.4) (1.4) (1.9) Net periodic postretirement benefit $ (0.7) $ (0.7) $ (0.9) The following table reflects the balances in accumulated other comprehensive income relating to the Company’s postretirement benefit plans: DECEMBER 31 2016 2015 (in millions) Net actuarial loss $ 4.1 $ 3.3 Net prior service cost (1.8) (3.3) $ 2.3 $ - The following table reflects the estimated amortization to be recognized in net periodic benefit cost in 2017: Estimated Amortization in 2017 Expense (Benefit) (in millions) Net actuarial loss $ 0.2 Net prior service cost (1.4) $ (1.2) Assumptions Employers are required to measure the funded status of their plans as of the date of their year-end statement of financial position. As such, the Company has utilized a measurement date of December 31, 2016 and 2015, to determine its postretirement benefit obligations, consistent with the date of its Consolidated Balance Sheets. Weighted average discount rate assumptions used to determine postretirement benefit obligations and periodic postretirement costs are as follows: YEARS ENDED DECEMBER 31 2016 2015 Postretirement benefit obligations discount rate 4.13% 4.63% Postretirement benefit cost discount rate 4.63% 4.38% Assumed health care cost trend rates are as follows: DECEMBER 31 2016 2015 Health care cost trend rate assumed for next year 6.50% 7.00% Rate to which the cost trend is assumed to decline (ultimate trend rate) 4.50% 5.00% Year the rate reaches the ultimate trend rate 2024 2020 A one-percentage point change in assumed health care cost trend rates in each year would have an immaterial effect on net periodic benefit cos t during 2016 and accumulated postretirement benefit obligation at December 31, 201 6 . |
Other Comprehensive Income
Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Other Comprehensive Income | 10. OTHER COMPREHENSIVE INCOME The following table provides changes in other comprehensive income. YEARS ENDED DECEMBER 31 2016 2015 2014 Tax Tax Tax Benefit Net of Benefit Net of Benefit Net of (in millions) Pre-Tax (Expense) Tax Pre-Tax (Expense) Tax Pre-Tax (Expense) Tax Unrealized gains (losses) on available-for-sale securities: Unrealized gains (losses) arising during period (net of pre-tax, ceded unrealized gains of $0.8 million for the year ended December 31, 2014) $ 95.9 $ (33.4) $ 62.5 $ (199.3) $ 69.5 $ (129.8) $ 138.7 $ (45.7) $ 93.0 Amount of realized gains from sales and other (36.5) (8.0) (44.5) (39.6) 0.7 (38.9) (55.3) 0.3 (55.0) Portion of other-than- temporary impairment losses recognized in earnings 27.9 (9.8) 18.1 27.2 (9.5) 17.7 5.5 (1.9) 3.6 Net unrealized gains (losses) 87.3 (51.2) 36.1 (211.7) 60.7 (151.0) 88.9 (47.3) 41.6 Pension and postretirement benefits: Net (loss) gain arising in the period from net actuarial (losses) gains and prior service costs (43.1) 12.8 (30.3) (3.5) 0.7 (2.8) (33.6) 11.0 (22.6) Loss on settlement of pension obligation - - - - - - 12.1 (4.2) 7.9 Amortization of net actuarial loss and prior service cost recognized as net periodic benefit cost 9.9 (3.5) 6.4 12.7 (4.2) 8.5 10.0 (3.5) 6.5 Cumulative foreign currency translation adjustment: Foreign currency translation recognized during the period (5.1) 1.8 (3.3) (11.1) 3.9 (7.2) (7.1) 2.5 (4.6) Other comprehensive income (loss) $ 49.0 $ (40.1) $ 8.9 $ (213.6) $ 61.1 $ (152.5) $ 70.3 $ (41.5) $ 28.8 Reclassifications out of accumulated other comprehensive income were as follows: YEARS ENDED DECEMBER 31 2016 2015 2014 (in millions) Amount Reclassified from Details about Accumulated Other Accumulated Affected Line Item in the Statement Comprehensive Income Components Other Comprehensive Income Where Net Income is Presented Unrealized gains (losses) on available-for- sale securities $ 36.4 $ 39.9 $ 55.2 Net realized gains from sales and other Net other-than-temporary impairment losses (27.9) (26.8) (5.5) on investments recognized in earnings 8.5 13.1 49.7 Total before tax 17.8 8.7 1.6 Tax benefit 26.3 21.8 51.3 (0.1) (0.6) 0.1 Other, net of tax 26.2 21.2 51.4 Net of tax Amortization of defined benefit pension Loss adjustment expenses and other and postretirement plans (9.9) (12.7) (22.1) operating expenses 3.5 4.2 7.7 Tax benefit (6.4) (8.5) (14.4) Net of tax Total reclassifications for the period $ 19.8 $ 12.7 $ 37.0 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 each of the years ended December 31, 2016, 2015 and 2014. In 2014, $12.1 million of this amount represented the accelerated recognition of unamortized losses due to the settlement of pension plan obligations. |
Stock-based Compensation Plans
Stock-based Compensation Plans | 12 Months Ended |
Dec. 31, 2016 | |
Stock-based Compensation Plans [Abstract] | |
Stock-based Compensation Plans | 11. STOCK-BASED COMPENSATION PLANS On May 20, 2014 , shareholders approved The Hanover Insurance Group 2014 Long-Term Incentive Plan (the “2014 Stock Plan”). With respect to new share-based award issuances, the 2014 Stock Plan replaced The Hanover Insurance Group, Inc. 2006 Long-Term Incentive Plan (the “2006 Stock Plan”) and authorized the issuance of 6,100,000 shares in a new share pool plus any shares subject to outstanding awards under the 2006 Stock Plan that may become available for reissuance as a result of the cash settlement, forfeiture, expiration or cancellation of such awards. The 2014 Stock Plan provides for the granting of the same types of awards as the 2006 Stock Plan, including stock options and stock appreciation rights (“SARS”), restricted and unrestricted stock, stock units, performance and market-based stock awards, and cash awards. In accordance with the 2014 Stock Plan, the issuance of one share of common stock in the form of an option or SAR will reduce the share pool by one share, whereas the issuance of one share of common stock for the other types of stock awards provided by the plan will reduce the pool by 3.8 shares. As of December 31, 2016, there were 5,3 32,623 shares available for grants under the 2014 Stock Plan. Additionally, on May 20, 2014, shareholders approved The Hanover Insurance Group 2014 Employee Stock Purchase Plan (the “ESPP Plan”) and the Chaucer Share Incentive Plan (the “SIP Plan”), authorizing the issuance of 2,500,000 and 750,000 shares, respectively, under such plans. As of December 31, 2016, 2,411, 811 shares and 699, 018 shares were available for grant under the ESPP Plan and the SIP Plan, respectively. Co mpensation cost for the years ended December 31, 2016, 2015, and 2014 totaled $12. 0 million, $12.3 million and $15.1 million, respectively. Related tax benefits were $4. 2 million, $4.3 million and $5.3 million, respectively. STOCK OPTIONS Under the 2014 Stock Plan, options may be granted to eligible employees, directors or consultants at an exercise price equal to the market price of the Company’s common stock on the date of grant. Option shares may be exercised subject to the terms prescribed by the Compensation Committee of the Board of Directors (the “Committee”) at the time of grant . Options granted in 2016, 2015 and 2014 generally vest over 3 years with 33 1/3% vesting in each year. Options must be exercised not later than ten years from the date of grant. Information on the Company’s stock options is summarized below. YEARS ENDED DECEMBER 31 2016 2015 2014 (in whole shares and dollars) Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Outstanding, beginning of year 1,619,948 $ 56.57 2,236,620 $ 46.61 2,049,173 $ 41.18 Granted 587,340 82.17 663,900 70.34 687,700 58.06 Exercised (589,666) 48.99 (1,051,664) 44.47 (444,200) 39.33 Forfeited or cancelled (1) (221,470) 68.61 (228,908) 54.78 (56,053) 45.99 Outstanding, end of year (1) 1,396,152 $ 68.63 1,619,948 $ 56.57 2,236,620 $ 46.61 Exercisable, end of year 441,256 $ 53.59 360,585 $ 46.10 726,321 $ 43.55 (1) Included in outstanding shares at the end of 2015 in this table and in subsequent metrics were 128,334 options that were previously granted to the Company’s former CEO. These options were subs equently forfeited in 2016 and are included in the table in the amounts forfeited or cancelled in 2016. Cash received for options exercised for the years ended December 31, 2016, 2015 and 2014 was $15.8 million, $15.9 million and $10.9 million, respectively. The intrinsic value of options exercised for the years ended December 31, 2016, 2015 and 2014 was $21.1 million, $38.7 million and $10.6 million, respectively. The excess tax expense realized from options exercised for the year s ended December 31, 2016, 2015 and 2014 was $5.6 million, $9.7 million, and $5.9 million, respectively. The aggregate intrinsic value at December 31, 2016 for shares outstanding and shares exercisable was $31.2 million and $16.5 million, respectively. At December 31, 2016, the weighted average remaining contractual life for shares outstanding and shares exercisable was 8.1 years and 6.5 years, respectively. Additional information about employee options outstanding and exercisable at December 31, 2016 is included in the following table: Options Outstanding Options Currently Exercisable Range of Exercise Prices Number Weighted Average Remaining Contractual Lives Weighted Average Exercise Price Number Weighted Average Exercise Price $ 34.19 to $46.47 188,603 5.15 $ 40.64 188,603 $ 40.64 $ 57.99 to $62.57 269,907 7.15 58.05 145,994 58.06 $ 69.09 to $73.30 381,182 8.17 70.30 105,910 70.30 $ 74.88 to $90.42 556,460 9.38 82.11 749 79.54 The fair value of each option is estimated on the date of grant using the Black-Scholes option pricing model. For all options granted through December 31, 2016, the exercise price equaled the market price on the grant date. Compensation cost related to options is based upon the grant date fair value and expensed on a straight-line basis over the service period for each separately vesting portion of the option as if the option was, in substance, multiple awards. The weighted average grant date fair value of options granted during the years ended December 31, 2016, 2015 and 2014 was $10.83 , $9.72 and $8.96 , respectively. The following significant assumptions were used to determine the fair value for options granted in the years indicated. 2016 2015 2014 Dividend yield 2.04% to 2.46 % 2.03% to 2.37 % 2.07% to 2.55 % Expected volatility 18.08% to 21.31 % 17.63% to 22.24 % 18.07% to 24.38 % Weighted average expected volatility 19.57 % 20.19 % 23.00 % Risk-free interest rate 0.77% to 1.97 % 0.70% to 1.75 % 0.53% - 1.92 % Expected term, in years 2.5 to 5.5 2.5 to 5.5 2.5 to 5.5 The expected dividend yield is based on the Company’s dividend payout rate(s), in the year noted. Expected volatility is based generally on the Company’s historical daily stock price volatilit y. The risk-free rate for period s within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The expected term of options granted represents the period of time that options are expected to be outstanding and is derived primarily using historical exercise, forfeit and cancellation behavior, along with certain other factors expected to differ from historical data. The fair value of shares that vested during the years ended December 31, 2016 and 2015 was $26.8 million and $20.4 million, respectively. As of December 31, 2016, the Company had unrecognized compensation expense of $5.0 million related to unvested stock options that is expected to be recognized over a weighted average period of 1.6 years. RESTRICTED STOCK UNITS Stock grants may be awarded to eligible employees at a price established by the Committee (which may be zero). Under the 2014 Stock Plan, the Company may award shares of restricted stock, restricted stock units, as well as shares of unrestricted stock. Restricted stock grants may vest based upon performance criteria, market criteria or continued employment and be in the form of shares or units. Vesting periods are established by the Committee. The Company granted market-based restricted share units in 2016 , 2015 and 2014. These units generally vest after 3 years of continued employment and after the achievement of certain stock performance targets . The Company also granted restricted stock units to eligible employees in 2016, 2015 and 2014 that generally vest after 3 years of continued employment. The following table summarizes information about employee restricted stock units: YEARS ENDED DECEMBER 31 2016 2015 2014 Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Time-based restricted stock units: Outstanding, beginning of year 301,897 $ 54.54 384,923 $ 45.63 525,980 $ 41.20 Granted 143,107 83.43 93,631 70.75 102,131 58.78 Vested (139,183) 42.97 (138,307) 41.22 (231,078) 41.45 Forfeited (36,758) 69.07 (38,350) 52.75 (12,110) 43.67 Outstanding, end of year 269,063 $ 73.91 301,897 $ 54.54 384,923 $ 45.63 Performance and market-based restricted stock units: Outstanding, beginning of year 196,142 $ 47.89 218,338 $ 44.24 184,626 $ 40.42 Granted 126,796 73.42 82,025 48.55 60,338 55.73 Vested (144,141) 40.95 (82,748) 38.99 (22,826) 44.78 Forfeited (1) (63,740) 58.54 (21,473) 47.53 (3,800) 37.90 Outstanding, end of year (1) 115,057 $ 78.82 196,142 $ 47.89 218,338 $ 44.24 (1) Included in outstanding shares at the end of 2015 were 56,500 market-based restricted stock units that were previously granted to the Company’s former CEO. These units were subsequently forfeited in 2016 and are included above in the amounts forfeited in 2016. In 2016, 2015 and 2014, the Company granted market-based awards totaling 87,213 , 80,738 , and 56,625 , 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 group of Property and Casualty peer 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 were 30,453 shares related to market-based awards that achieved a payout in excess of 100% . Also included in the amounts granted above for the performance-based restricted stock units were 1,949 shares related to awards that a performance metric in excess of 100% was achieved. All of these awards vested in 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. In 2016, performance and market-based stock units of 2,268 and 30,134 were included as granted due to completion levels in excess of 100% for units granted in 2014 and 2013 , respectively. The weighted average grant date fa ir value of these awards was $57.00 and $41.77 , respectively. In 2015, performance and market-based stock units of 3,125 and 36,875 were included as granted due to completion levels in excess of 100% for units granted in 2013 and 2012, respectively. The weighted average grant date fair value of these awards was $42.44 and $36.47 , respectively. In 2014, performance and market-based stock units of 2,888 were included as granted due to completion levels in excess of 100% for units granted in 2012. The weighted average grant date fair value of these awards was $43.31 . The intrinsic value of restricted stock and restricted stock units that vested during the years ended December 31, 2016, 2015 and 2014 was $5.4 million, $4.4 million and $4.2 million, respectively. The intrinsic value for performance and market -based restricted stock units that vested in 2016, 2015 and 2014 was $5.8 million, $2.6 million and $0.3 million, respectively. Forfeitures in cluded in the table above for 2016, 2015 and 2014 related entirely to market-based restricted stock units. At December 31, 2016, the aggregate intrinsic value of restricted stock units was $24.5 million and the weighted average remaining contractual life was 1.4 years. The aggregate intrinsic value of performance and market-based restricted stock units was $10.5 million and the weighted average remaining contractual life was 2.1 years. As of December 31, 2016, there was $17.4 million of total unrecognized compensation cost related to unvested restricted stock units and performance and market-based restricted stock units, assuming performance and market-based restricted stock units are achieved at 100% of the performance metric. The cost is expected to be recognized over a weighted average period of 2.4 years. Compensation cost associated with restricted stock, restricted stock units and performance and market-based restricted stock units is generally calculated based upon grant date fair value, which is determined using current market prices. |
Earnings Per Share and Sharehol
Earnings Per Share and Shareholders' Equity Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share and Shareholders’ Equity Transactions [Abstract] | |
Earnings Per Share and Shareholders' Equity Transactions | 12. 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: DECEMBER 31 2016 2015 2014 (in millions, except per share data) Basic shares used in the calculation of earnings per share 42.8 43.9 44.0 Dilutive effect of securities: Employee stock options 0.2 0.5 0.5 Non-vested stock grants 0.2 0.4 0.4 Diluted shares used in the calculation of earnings per share 43.2 44.8 44.9 Per share effect of dilutive securities on income from continuing operations $ (0.04) $ (0.14) $ (0.12) Per share effect of dilutive securities on net income $ (0.04) $ (0.15) $ (0.13) Diluted earnings per share during 2016, 2015 and 2014 excludes 0.6 million, 0.6 million and 0.7 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. As of December 31, 201 6, the Company has $183.6 million available for repurchases under these repurchase authorizations. During 2016, the Company purchased 1.3 million shares of the Company’s common stock at a cost of $105.6 million. |
Dividend Restrictions
Dividend Restrictions | 12 Months Ended |
Dec. 31, 2016 | |
Dividend Restrictions [Abstract] | |
Dividend Restrictions | 13. DIVIDEND RESTRICTIONS U.S. INSURANCE SUBSIDIARIES The individual law of all states, including New Hampshire and Michigan, where Hanover Insurance and Citizens are domiciled, respectively, restrict the payment of dividends to stockholders by insurers. These laws affect the dividend paying ability of Hanover Insurance and Citizens. Pursuant to New Hampshire’s statute, the maximum divid ends and other distributions that an insurer may pay in any twelve month period, without prior approval of the New Hampshire Insurance Commissioner, is limited to 10% of such insurer’s statutory policyholder surplus as of the preceding December 31. Hanover Insurance declared dividends to its parent totaling $218.8 million in 2016. No dividends were declared by Hanover Insurance in 2015 or 2014. Hanover Insurance cannot declare a further dividend to its parent without prior approval until April 2017, at which time the maximum dividend payable without prior approval would be $216.8 million. Pursuant to Michigan’s statute, the maximum dividends and other distributions that an insurer may pay in any twelve month period, without prior approval of the Michigan Insurance Commissioner, is limited to the greater of 10% of policyholders’ surplus as of December 31 of the immediately preceding year or the statutory net income less net realized gains, for the immediately preceding calendar year. Citizens declared dividends to its parent, Hanover Insurance, totaling $70.0 million, $63.0 million and $66.0 million in 2016, 2015 and 2014, respectively. At December 31, 2016 , the maximum dividend payable without prior approval wa s $30.0 million. In December 2017, the maximum dividend declared payable without prior approval will increase by $70.0 million to a total amount of $100.0 million. The statutes in both New Hampshire and Michigan require that prior notice to the respective Insurance Commissioner of any proposed di vidend be provided and such Commissioner may, in certain circumstances, prohibit the payment of the proposed dividend. CHAUCER Dividend payments from Chaucer to its parent are regulated by U.K. law. Dividends from Chaucer are dependent on dividends from its s ubsidiaries. Annual dividend payments from Chaucer are limited to retained earnings that are not restricted by capital and other requirements for business at Lloyd’s. Also, Chaucer must provide advance notice to the U.K.’s Prudential Regulation Authority (“PRA”) of certain proposed dividends or other payments from PRA regulated entities. Dividend payments to THG from Chaucer entities totaled $79.5 million, $61.3 million and $68.7 million in 2016, 2015 and 2014, respectively. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2016 | |
Segment Information [Abstract] | |
Segment Information | 14. 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 it 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 , excluding 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 businesses, 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. YEARS ENDED DECEMBER 31 2016 2015 2014 (in millions) Operating revenues: Commercial Lines $ 2,485.0 $ 2,391.7 $ 2,239.0 Personal Lines 1,552.4 1,511.3 1,491.0 Chaucer 891.4 1,104.1 1,279.7 Other 8.4 7.4 7.8 Total 4,937.2 5,014.5 5,017.5 Net realized investment gains 8.6 19.5 50.1 Total revenues $ 4,945.8 $ 5,034.0 $ 5,067.6 Operating income (loss) before interest expense and income taxes: Commercial Lines: Underwriting loss $ (122.0) $ (12.7) $ (8.3) Net investment income 158.5 156.3 149.4 Other expense (0.6) (0.3) (1.2) Commercial Lines operating income 35.9 143.3 139.9 Personal Lines: Underwriting income 103.8 72.0 22.1 Net investment income 69.5 72.5 71.9 Other income 5.1 4.8 5.0 Personal Lines operating income 178.4 149.3 99.0 Chaucer: Underwriting income 80.3 131.5 122.5 Net investment income 45.7 45.9 44.2 Other income 0.8 6.3 10.9 Chaucer operating income 126.8 183.7 177.6 Other: Underwriting loss (10.8) (1.9) (3.1) Net investment income 5.7 4.4 4.8 Other expense (13.2) (12.7) (11.4) Other operating loss (18.3) (10.2) (9.7) Operating income before interest expense and income taxes 322.8 466.1 406.8 Interest on debt (54.9) (60.6) (65.8) Operating income before income taxes 267.9 405.5 341.0 Non-operating income items: Net realized investment gains 8.6 19.5 50.1 Net loss from repayment of debt (88.3) (24.1) (0.1) Net gain on disposal of U.K. motor business 1.1 38.4 - Loss from settlement of pension obligation - - (12.1) Other non-operating items 3.0 0.1 (0.9) Income before income taxes $ 192.3 $ 439.4 $ 378.0 The following table provides identifiable assets for the Company’s business segments and discontinued operations: DECEMBER 31 2016 2015 (in millions) Identifiable Assets U.S. Companies $ 10,225.4 $ 9,616.0 Chaucer 3,915.5 4,082.2 Discontinued operations 79.5 83.0 Total $ 14,220.4 $ 13,781.2 The Company reviews the assets of its U.S. Companies collectively and does not allocate them among the Commercial Lines, Personal Lines and Other segments. GEOGRAPHIC CONCENTRATIONS The following table presents the Company’s gross premiums written (“GPW”) based on the location of the risk: YEARS ENDED DECEMBER 31 2016 2015 2014 % of Total GPW United States 85% 81% 78% United Kingdom - 4% 6% Worldwide and other 15% 15% 16% Total 100% 100% 100% The worldwide and other category includes insured risks that move across multiple geographic areas, including the U.S. and U.K., due to their mobile nature or insured risks that are fixed in locations that span more than one geographic area, and risks located in a single country outside the U.S. and U.K. These contracts include, for example, marine and aviation, hull, satellite, offshore energy exploration and production risks that can move across multiple geographic areas and assumed risks where the cedant insures risks in two or more geographic zones. These risks may include U.S. and U.K. insured risks. Long-lived assets located outside the U.S. were not material for the years ended December 31, 2016 or 2015. The Company does not have revenue from transactions with a single agent or broker amounting to 10 percent or more of its consolidated revenue. |
Lease Commitments
Lease Commitments | 12 Months Ended |
Dec. 31, 2016 | |
Lease Commitments [Abstract] | |
Lease Commitments | 15. LEASE COMMITMENTS Rental expenses for operating leases amounted to $18.5 million, $17.4 million and $20.4 million in 2016, 2015 and 2014, respectively. These expenses relate primarily to building leases of the Company. At December 31, 2016, future minimum rental payments under non-cancelable operating leases were $61.7 million, payable as follows: 2017 - $16.7 million; 2018 - $15.1 million; 2019 - $12.2 million; 2020 - $9.6 million and 2021 and thereafter - $8.1 million. It is expected that in the normal course of business, leases that expire may be renewed or replaced by leases on other property and equipment. |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2016 | |
Reinsurance [Abstract] | |
Reinsurance | 16. REINSURANCE In the normal course of business, the Company seeks to reduce the losses that may arise from catastrophes or other events that cause unfavorable underwriting results by reinsuring certain levels of risk in various areas of exposure with other insurance enterprises or reinsurers. Reinsurance transactions are accounted for in accordance with the provisions of ASC 944. Amounts recoverable from reinsurers are estimated in a manner consistent with the claim liability associated with the reinsured policy. Reinsurance contracts do not relieve the Company from its obligations to policyholders. Failure of reinsurers to honor their obligations could result in losses to the Company; consequently, allowances are established for amounts deemed uncollectible. The Company determines the appropriate amount of reinsurance based on evaluations of the risks accepted and analyses prepared by consultants and on market conditions (including the availability and pricing of reinsurance). The Company also believes that the terms of its reinsurance contracts are consistent with industry practice in that they contain standard terms with respect to lines of business covered, limit and retention, arbitration and occurrence. The Company believes that its reinsurers are financially sound. This belief is based upon an ongoing review of its reinsurers’ financial statements, reported financial strength ratings from rating agencies, reputations in the marketplace, and the analysis and guidance of THG’s reinsurance advisors. As a condition to conduct certain business in various states, the Company is required to participate in residual market mechanisms, facilities and pooling arrangements such as the Michigan Catastrophic Claims Association (“MCCA”). The Company is subject to concentration of risk with respect to reinsurance ceded to the MCCA. Funding for MCCA comes from assessments against automobile insurers based upon their share of insured automobiles in the state. Insurers are allowed to pass along this cost to Michigan automobile policyholders. The Company ceded to the MCCA premiums earned and losses and LAE incurred of $58.6 million and $75.0 million in 2016, $67.7 million and $78.8 million in 2015 and $73.4 million and $99.2 million in 2014 . The MCCA represented 34.9% of the total reinsurance receivable balance at December 31, 2016. Reinsurance recoverables related to MCCA were $911.2 million and $906.5 million at December 31, 2016 and 2015, respectively. Because the MCCA is supported by assessments permitted by statute, and there have been no significant uncollectible balances from MCCA identified during the three years ending December 31, 2016, the Company believes that it has no significant exposure to uncollectible reinsurance balances from this entity. The Lloyd’s Syndicates total reinsurance receivable balance was $506.8 million as of December 31, 2016, as compared to $606.5 million as of December 31, 2015. The Lloyd’s receivable represented 19.4% of the total reinsurance receivable balance at December 31, 2016 . The following table provides the effects of reinsurance. YEARS ENDED DECEMBER 31 2016 2015 2014 (in millions) Premiums written: Direct $ 4,826.0 $ 4,811.3 $ 4,777.3 Assumed (1) 571.4 633.2 688.1 Ceded (2) (3) (698.6) (827.7) (655.3) Net premiums written $ 4,698.8 $ 4,616.8 $ 4,810.1 Premiums earned: Direct $ 4,746.6 $ 4,814.4 $ 4,679.8 Assumed (1) 601.7 655.6 696.4 Ceded (2) (3) (720.2) (765.2) (665.9) Net premiums earned $ 4,628.1 $ 4,704.8 $ 4,710.3 Percentage of assumed to net premiums earned 13.00 % 13.93 % 14.78 % Losses and LAE: Direct $ 3,188.2 $ 3,008.5 $ 3,019.4 Assumed (1) 289.4 312.4 266.1 Ceded (2) (4) (512.9) (436.8) (358.0) Net losses and LAE $ 2,964.7 $ 2,884.1 $ 2,927.5 (1) Assumed reinsurance activity primarily relates to the Chaucer segment. (2) Effective June 30, 2015, the Company transferred its U.K. motor business through a 100% reinsurance arrangement. This transaction resulted in the increase of approximately $196 million, $133 million and $90 million for ceded premiums written, premiums earned and losses and LAE , respectively, for the year ended December 31, 2015. See also “Disposal of U.K. Motor Business” in Note 2 – “ Dispositions of Businesses” . (3) The decrease in ceded reinsurance premiums from 2015 to 2016 is primarily due to the above mentioned non-recurring U.K. motor activity in 2015, partially offset by a planned increase in Chaucer’s ceded reinsurance premiums as the Company continues to manage its overall underwriting risk. (4) The increase in ceded losses and LAE from 2015 to 2016 is primarily due to the aforementioned increase in Chaucer’s reinsurance purchases in 2016 and due to a higher level of ceded large loss activity in certain Chaucer and domestic lines in 2016. These increases in ceded losses and LAE were partially offset by the above mentioned non-recurring U.K. motor activity in 2015. |
Liabilities For Outstanding Cla
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses | 12 Months Ended |
Dec. 31, 2016 | |
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Abstract] | |
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses | 17. LIABILITIES FOR OUTSTANDING CLAIMS, LOSSES AND LOSS ADJUSTMENT EXPENSES Reserving Process Overview Management’s process for establishing loss reserves is a comprehensive process that involves input from multiple functions throughout the organization, including actuarial, finance, claims, legal, underwriting, distribution and business operations management. A review of loss reserves for each of the classes of business which the Company writes is conducted regularly, generally quarterly. This review process takes into consideration a variety of trends that impact the ultimate settlement of claims. Where appropriate, the review includes a review of overall payment patterns and the emergence of paid and reported losses relative to expectations. The loss reserve estimation process relies on the basic assumption that past experience, adjusted for the effects of current developments and likely trends, is an appropriate basis for predicting future outcomes. As part of this process, the Company uses a variety of analytical methods that consider experience, trends and other relevant factors. Incurred but not reported (“ IBNR ”) reserves are generally calculated by first projecting the ultimate cost of all claims that have been reported or expected to be reported in the future and then subtracting reported losses and loss adjustment expenses. IBNR reserves include both incurred-but-not-reported liabilities plus expected development on reported claims included in the liability for unpaid claims and claim adjustment expenses. Reported losses include cumulative paid losses and loss adjustment expenses plus outstanding case reserves. The Company’s ultimate IBNR reserves are estimated by management and reserving actuaries on an aggregate basis for each line of business or coverage for loss and loss expense liabilities not reflected within the case reserves. Case reserves are established by claim personnel individually on a claim by claim basis and based on information specific to the occurrence and terms of the underlying policy. Case reserves are periodically reviewed and modified based on new or additional information pertaining to the claim. For events designated as catastrophes which affect the Commercial and Personal Lines business segments, the Company generally calculates IBNR reserves directly as a result of an estimated IBNR claim count and an estimated average claim amount for each event. Such an assessment involves a comprehensive analysis of the nature of the event, of policyholder exposures within the affected geographic area and of available claims intelligence. For events designated as catastrophes that affect the Chaucer business segment, the Company initially calculates IBNR reserves using a ground up exposure by exposure analysis based on each cedant or insured. These are supported by broker supplied information, catastrophe modeling and industry event estimates. C arried reserves for each line of business and coverage are determined based on this quarterly loss reserving process. In making the determination, the Company considers numerous quantitative and qualitative factors. Quantitative factors include changes in reserve estimates in the period, the maturity of the accident year, trends observed over the recent past, the level of volatility within a particular class of business, the estimated effects of reinsurance, including reinstatement premiums, general economic trends, and other factors. Qualitative factors may include legal and regulatory developments, changes in claim handling and case reserving practices , recent entry into new markets or products, changes in underwriting practices, concerns that the Company does not have sufficient or quality historical reported and paid loss and LAE information with respect to a pa rticular line or segment of business, effects of the economy and political outlook, perceived anomalies in the historical results, evolving trends or other factors. Reserve Rollforward and Prior Year Development The Company regularly updates its reserve estimates as new information becomes available and further events occur which may impact the resolution of unsettled claims. Reserve adjustments are reflected in results of operations as adjustments to losses and LAE. Often these adjustments are recognized in periods subsequent to the period in which the underlying policy was written and loss event occurred. These types of subsequent adjustments are described as “prior years’ loss reserves”. Such development can be either favorable or unfavorable to the Company’s financial results and may vary by line of business. In this section, all amounts presented include catastrophe losses and LAE, unless otherwise indicated. The table below provides a reconciliation of the gross beginning and ending reserve for unpaid losses and loss adjustment expenses. YEARS ENDED DECEMBER 31 2016 2015 2014 (in millions) Gross loss and LAE reserves, beginning of year $ 6,574.4 $ 6,391.7 $ 6,231.5 Reinsurance recoverable on unpaid losses 2,280.8 1,983.0 2,030.4 Net loss and LAE reserves, beginning of year 4,293.6 4,408.7 4,201.1 Net incurred losses and LAE in respect of losses occurring in: Current year 2,859.3 3,000.2 3,044.9 Prior years 105.4 (116.1) (117.4) Total incurred losses and LAE 2,964.7 2,884.1 2,927.5 Net payments of losses and LAE in respect of losses occurring in: Current year 1,142.7 1,245.6 1,328.7 Prior years 1,367.2 1,418.4 1,398.9 Total payments 2,509.9 2,664.0 2,727.6 Commutation of Chaucer Flagstone reinsurance agreement - - 85.7 Transfer of U.K. motor business - (300.6) - Effect of foreign exchange rate changes (73.8) (34.6) (78.0) Net reserve for losses and LAE, end of year 4,674.6 4,293.6 4,408.7 Reinsurance recoverable on unpaid losses 2,274.8 2,280.8 1,983.0 Gross reserve for losses and LAE, end of year $ 6,949.4 $ 6,574.4 $ 6,391.7 The following table provides a summary of (favorable)/unfavorable loss and LAE reserve development. YEARS ENDED DECEMBER 31 2016 2015 2014 (in millions) Commercial multiple peril $ 68.8 $ 11.6 $ (2.5) Workers’ compensation (46.7) (46.9) (5.6) Commercial automobile 27.5 23.3 15.1 Other commercial lines: AIX program business 75.1 74.7 10.9 General liability 56.0 14.3 2.3 Surety 35.3 1.5 (5.2) Umbrella (8.9) (17.8) (1.4) Other lines 12.2 (13.5) 0.5 Total other commercial lines 169.7 59.2 7.1 Total Commercial Lines Segment 219.3 47.2 14.1 Personal automobile 4.8 (7.2) (5.9) Homeowners and other personal lines 5.8 (3.4) 0.8 Total Personal Lines Segment 10.6 (10.6) (5.1) Total Chaucer Segment (132.8) (153.0) (127.8) Total Other Segment 8.3 0.3 1.4 Total loss and LAE reserve development, including catastrophes $ 105.4 $ (116.1) $ (117.4) Within other commercial lines, general liability is comprised of both monoline general liability and certain management and professional liability coverages and other lines is primarily comprised of lawyers professional liability, fidelity, marine, miscellaneous property, and healthcare lines. Loss and LAE reserve development in the Other segment is related to run-off voluntary assumed reinsurance pools business. As a result of continuing trends in the Company’s business, reserves including catastrophes have been re-estimated for all prior accident years and were increased by $105.4 million in 2016 in comparison to decreases of $116.1 million and $117.4 million in 2015 and 2014, respectively . As a result of the Company’s 2016 fourth quarter reserve review of domestic lines of business, as discussed further below, carried reserves for prior accident years for domestic lines excluding catastrophes were increased by $174.1 million in the fourth quarter, of which $161.5 million related to Commercial Lines. The majority of this adjustment is attributed to long-tailed commercial liability coverages, including AIX program business. In general, higher than expected loss and LAE emergence in 2016 led the Company to adjust its reserve assumptions in its year-end reserve review and place greater weight on the adverse large loss and severity trends experienced in the most recent calendar years. 2016 In 2016, net unfavorable loss and LAE development was $105.4 million, primarily as a result of net unfavorable development of $219.3 million for Commercial Lines, partially offset by favorable development of $132.8 million for Chaucer. The net unfavorable Commercial Lines development primarily resulted from higher than expected losses in other commercial lines of $169.7 million, which includes the AIX program business. This was primarily driven by AIX programs and business classes which have since been terminated or substantially revised, general liability coverages in accident years 2012 through 2015, and surety bonds in accident years 2012 through 2015. The Company also experienced higher than expected losses within the commercial multiple peril lines of $68.8 million for accident years 2012 through 2015 and commercial automobile of $27.5 million in accident years 2012 through 2014, both primarily within liability coverages. Partially offsetting the unfavorable development was lower than expected losses of $46.7 million within the workers’ compensation line, primarily related to accident years 2013 through 2015, and, to a lesser extent, the commercial umbrella line primarily related to the 2015 accident year. Chaucer’s favorable development during 2016 was primarily the result of lower than expected losses in the property line of $45.6 million, primarily in the 2013 through 2015 accident years, the energy line of $31.9 million, primarily in the 2013 through 2015 accident years, and in the marine and aviation lines of $27.4 million, primarily in the 2008, 2009, 2014 and 2015 accident years. Additionally, Chaucer experienced lower than expected losses within casualty and other lines, specifically the specialist and international liability lines, of $15.3 million, primarily in the 2014 and prior accident years. Partially offsetting Chaucer’s favorable development was the unfavorable impact of foreign exchange rate movements on prior years’ loss reserves. 2015 In 2015, net favorable loss and LAE development was $116.1 million, primarily as a result of favorable development of $153.0 million for Chaucer, partially offset by net unfavorable development of $47.2 million for Commercial Lines. As a result of the Company’s year-end 2015 reserve review of domestic commercial and personal lines of business, carried reserves were adjusted among several of these lines of business, impacting the prior year development by line, although these adjustments had no impact on aggregate domestic carried reserves. Chaucer’s favorable development was primarily the result of lower than expected losses in the property line of $43.8 million, primarily in the 2011 through 2014 accident years, the energy line of $ 42.1 million, primarily in the 2012 through 2014 accident years, and in the marine and aviation lines of $34.2 million, primarily in the 2010, 2012 and 2013 accident years. Additionally, Chaucer experienced lower than expected losses within casualty and other lines, specifically the specialist and international liability lines, of $ 22.7 million primarily in the 2008, 2011 and 2013 accident years. Chaucer’s favorable development was also partially attributable to the favorable impact of foreign exchange rate movements on prior years’ loss reserves. The net unfavorable Commercial Lines development primarily resulted from higher than expected losses in other commercial lines of $59.2 million. This was primarily driven by AIX programs and business classes which have since been terminated and general liability lines in accident years 2009 through 2012, partially offset by lower than expected losses in the commercial umbrella line in accident years 2012 through 2014 and in the healthcare line in accident years 2010 through 2014. The Company also experienced higher than expected losses within the commercial automobile line of $23. 3 million, primarily related to liability coverage in accident years 2011 through 2013, and in the commercial multiple peril lines, primarily in accident years 2008, 2009 and 2011. Partially offsetting the unfavorable development was lower than expected losses of $46.9 million within the workers’ compensation line, primarily related to accident years 2005 through 2014, and, to a lesser extent, the commercial umbrella line related to accident years 2012 through 2014. 2014 In 2014, net favorable loss and LAE development was $117.4 million, primarily as a result of favorable development of $127.8 million for Chaucer, partially offset by net unfavorable development of $14.1 million for Commercial Lines. Chaucer’s favorable development was primarily the result of lower than expected losses in the marine and aviation lines of $4 7.4 million, primarily in the 2011 through 2013 accident years. Additionally, Chaucer experienced lower than expected losses within the prope rty line of $30.6 m illion, primarily in the 2010 through 2013 accident years, and in casualty and other lines, specifically the specialty liability line of $21.4 million, primarily in the 2010 and 2013 accident years. Chaucer’s favorable development was also partially attributable to the favorable impact of foreign exchange rate movements on prior years’ loss reserves. The net unfavorable Commercial Lines development primarily resulted from higher than expected large losses within the commercial automobile coverages of $23.1 million, which includes the AIX program business, primarily related to liability coverage in the 2009 through 2012 accident years. Partially offsetting the unfavorable development was lower than expected losses within the workers’ compensation line, primarily related to the 2007 through 2012 accident years, and the surety line, primarily related to the 2013 accident year. 2016 Fourth Quarter Domestic Business Loss and LAE Reserve Increase The table below provides a summary of (favorable)/unfavorable loss and LAE reserve development excluding catastrophes for the three months ended December 31, 2016: (in millions) Commercial multiple peril $ 43.7 Workers’ compensation (32.0) Commercial automobile 18.4 Other commercial lines: AIX program business 49.6 General liability 45.2 Surety 37.9 Umbrella (9.4) Other lines 8.1 Total other commercial lines 131.4 Total Commercial Lines Segment 161.5 Personal automobile 8.2 Homeowners and other personal lines (3.0) Total Personal Lines Segment 5.2 Total Other Segment 7.4 Total domestic business loss and LAE reserve development, excluding catastrophes (1) $ 174.1 (1) For the three months ended Decembe r 31, 2016, prior year reserve development for catastrophes was favorable of $2.0 million for the domestic business . Through the first nine months of 2016, the Company recorded $61.5 million of unfavorable loss and LAE reserve development for the domestic business, excluding catastrophes, driven by higher than expected large losses in commercial liability coverages, primarily in the commercial multiple peril line and both the AIX program business and general liability coverages that are within other commercial lines. Additionally, the Company incurred higher than expected legal defense costs, a component of LAE expenses, during the first nine months of 2016. Other product lines also reported increased claim activity, including commercial automobile and surety. There was an increased level of loss and LAE activity recorded in certain lines in 2015 that continued throughout 2016, and in some cases intensified into the fourth quarter, and appears to represent longer-term trends that management concluded required recognition. As a result of these trends, during the fourth quarter of 2016, the Company performed a more in-depth actuarial reserve review in several areas. The Company assessed the recent large loss activity in the monoline and multiple peril general liability and surety lines and the emergence of such relative to the timing and amounts of expected large losses. For surety, the recent large loss activity emerged throughout 2016 and intensified during the fourth quarter. The Company also conducted additional analyses of general liability coverages and AIX program business within other commercial lines. The results of these analyses indicated that the assumed tail risk included in the loss development patterns needed to be increased. Claims and actuarial staff also conducted a review of legal defense costs and other claim-specific adjusting expenses as a result of an emerging trend of increased expenses in these areas over recent quarters. This review concluded that the ultimate costs of these loss adjustment expenses were higher than previously estimated, causing management to record an increase in estimated LAE, primarily in the commercial multiple peril and general liability product lines. As a result of the fourth quarter reserve review, the Company recognized unfavorable prior year reserve development of $174.1 million for the domestic business, excluding catastrophes, largely driven by adverse emergence in most Commercial Lines liability coverages reflecting worsening trends in the number and nature of high severity losses and higher than anticipated legal defense costs. The Company reacted to this adverse emergence by updating assumptions about loss severity, loss development patterns, expected loss ratios and loss adjustment expenses for the most recent accident years, placing greater weight on the adverse severity trends experienced in the most recent calendar years. The adverse development in the AIX program business was primarily due to the general liability and commercial automobile liability coverages in the 2011 through 2014 accident years. Additionally, the Company recognized adverse development in general liability and commercial multiple peril coverages primarily in accident years 2012 through 2015, contract surety business primarily related to the 2012 through 2015 accident years, and the commercial automobile line, primarily related to liability coverages for accident years 2012 through 2014. These increases in Commercial Lines reserves were partially offset by favorable development in the workers’ compensation line, primarily in the 2013 through 2015 accident years and, to a lesser extent, commercial umbrella coverage in the 2015 accident year. The adverse prior year reserve development for Personal Lines was primarily due to higher than expected losses in bodily injury coverage in accident years 2013 through 2015. The adverse prior year development for the Other segment was due to run-off voluntary assumed reinsurance pools business. The reserve increase was based on an updated third-party actuarial study received in the fourth quarter for a pool that primarily consists of asbestos and environmental exposures. Carried Reserves The table below summarizes the gross, ceded and n et reserve for losses and LAE and reconciles to the incurred claims development in the following section. Accordingly, the commercial multiple peril, workers’ compensation and commercial automobile liability lines presentation includes AIX program business. Chaucer is presented in two components, its ongoing core l ines and it’s reinsured and run- off lines. YEAR ENDED DECEMBER 31, 2016 2015 (in millions) Gross Ceded Net Gross Ceded Net Commercial multiple peril $ 978.0 $ (82.1) $ 895.9 $ 813.1 $ (59.2) $ 753.9 Workers’ compensation 715.5 (171.4) 544.1 713.1 (178.0) 535.1 Commercial automobile liability 431.7 (27.2) 404.5 390.3 (28.4) 361.9 Other lines 980.8 (195.6) 785.2 757.7 (159.2) 598.5 Total Commercial Lines and other 3,106.0 (476.3) 2,629.7 2,674.2 (424.8) 2,249.4 Personal automobile liability 1,416.8 (865.6) 551.2 1,395.0 (863.5) 531.5 Homeowners and other personal lines 137.2 (7.3) 129.9 132.7 (7.0) 125.7 Total Personal Lines 1,554.0 (872.9) 681.1 1,527.7 (870.5) 657.2 Chaucer core lines 1,832.4 (552.5) 1,279.9 1,767.6 (508.5) 1,259.1 Chaucer reinsured and run-off lines 457.0 (373.1) 83.9 604.9 (477.0) 127.9 Total Chaucer 2,289.4 (925.6) 1,363.8 2,372.5 (985.5) 1,387.0 Total loss and LAE reserves $ 6,949.4 $ (2,274.8) $ 4,674.6 $ 6,574.4 $ (2,280.8) $ 4,293.6 Within total C ommercial Lines and other , other lines is primarily comprised of general liability, including voluntary pools, umbrella, professional and management liability, marine, surety, and healthcare lines. Chaucer core lines includes marine and aviation, energy, property and casualty lines, primarily consisting of international liability and specialist liability coverages. Chaucer reinsured and run - off lines include financial and professional liability lines written in 2008 and prior and U.K. motor business, which was transferred through a 100 percent reinsurance contract as of June 30, 2015. Included in the above table, primarily in other lines, are $61.0 million and $57.7 million of gross asbestos and environmental reserves as of December 31, 2016 and 2015, respectively. Incurred claims development tables For the following net reserve components, commercial multiple peril, workers’ compensation, commercial automobile liability, personal automobile liability and Chaucer core lines, the Company is presenting incurred claims development tables by accident year. The commercial multiple peril, workers’ compensation and commercial automobile liability lines presentation includes AIX program business. In each of these tables, the Company is presenting the number of years for which claims are typically outstanding, which is consistent with the period at which substantially all of the reserve development has emerged based on past history. The tables presented below include cumulative incurred loss and allocated loss adjustment expenses (“ ALAE ”) , cumulative paid loss and ALAE and IBNR balances at December 31, 2016. IBNR includes both incurred but not reported liabilities and expected development on reported claims. In addition, cumulative incurred claim counts are presented as of December 31, 2016 and claim duration is presented in a separate table disclosing the average annual percentage payout of incurred claims by age, net of reinsurance . Claim duration is calculated as an average of paid loss and ALAE divided by incurred loss and ALAE by elapsed year. The incurred claims development tables presented are reconciled to the net carried reserves in the preceding table as of December 31, 2016. For the domestic lines, incurred claim count information presented represents claim frequency by individual claimant and measures the frequency of direct claim settlements that have resulted in or are expected to result in claim payments. Claim count information is presented in a manner consistent with that used in the quarterly loss reserving process. A single claim event, particularly in automobile lines, may result in multiple individual claimants and, therefore, multiple claim counts. Incurred claim counts are comprised of outstanding claims and those that are closed with a loss payment and exclude those that are closed without a loss payment. A single claim event may result in multiple claims closed with a payment when a claim is subsequently reopened with further payment. In this case, a reopened claim payment is counted as an incremental claim settlement. Claim count information is not available for direct and assumed participations in various involuntary pools and residual market mechanisms , which represent approximately 5% or less of the total gross earned premium and gross incurred claims for the lines presented . Incurred claim counts are also not adjusted for the effect of claims ceded as part of reinsurance programs, although the incurred losses and cumulative paid losses presented in the following tables are presented net of reinsurance ceded. For Chaucer core lines, the incurred claim count information presented represents claim frequency by individual claimant and measures the frequency of expected claim settlements that have resulted in or are expected to result in claim payments. While claim count information is only utilized in a limited portion of Chaucer’s quarterly loss reserving process, the counts in the following Chaucer table are presented in a manner consistent with those used by the actuaries. A single claim event may result in multiple individual claimants, and therefore, multiple claim counts. Incurred claim counts are comprised of outstanding claims and those that are closed with a loss payment and exclude those that are closed without payment. A single claim event may result in multiple claims closed with a payment when payments are made in multiple currencies. In this case, the payment in each currency is counted as an incremental claim count. A portion of the coverholder and assumed reinsurance business is reported as block claims, which represent multiple underlying individual claims for a particular loss event or for multiple loss events. Claim count information is not available for the underlying claims related to block claims , and block claims represent approximately 10% of gross incurre d losses for Chaucer core lines. T herefore , these block claims are not included in the claim count information presented. Incurred claim counts are also not adjusted for the effects of claims ceded as part of reinsurance programs, although the incurred losses and cumulative paid losses presented in the following tables are presented net of reinsurance ceded. Commercial multiple peril (in millions) As of Incurred Losses and ALAE, Net of Reinsurance December 31, 2016 YEARS ENDED DECEMBER 31, Cumulative Incurred Accident 2011 2012 2013 2014 2015 Claim Year Unaudited Unaudited Unaudited Unaudited Unaudited 2016 IBNR Count 2011 $ 455.4 $ 453.3 $ 469.1 $ 478.8 $ 494.7 $ 505.4 $ 17.2 19,163 2012 480.0 462.8 456.2 459.7 475.6 20.5 17,054 2013 380.0 362.5 367.9 391.8 33.9 14,911 2014 443.9 439.6 464.8 62.9 16,102 2015 446.0 456.3 100.1 15,810 2016 447.1 181.7 15,512 Total $ 2,741.0 Cumulative Paid Losses and ALAE, Net of Reinsurance YEARS ENDED DECEMBER 31, Accident 2011 2012 2013 2014 2015 Year Unaudited Unaudited Unaudited Unaudited Unaudited 2016 2011 $ 217.8 $ 328.5 $ 381.5 $ 418.6 $ 454.0 $ 471.5 2012 175.8 307.5 350.8 389.3 424.2 2013 137.6 221.5 262.3 306.4 2014 171.7 267.8 316.0 2015 161.9 260.1 2016 140.3 Total $ 1,918.5 Total reserves for 2011 – 2016 accident years (incurred - paid) 822.5 Total reserves for 2010 and prior accident years 55.7 Unallocated loss adjustment expense 17.7 Net reserves at December 31, 2016 $ 895.9 Workers' compensation (in millions) As of Incurred Losses and ALAE, Net of Reinsurance December 31, 2016 YEARS ENDED DECEMBER 31, Cumulative Incurred Accident 2007 2008 2009 2010 2011 2012 2013 2014 2015 Claim Year Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited 2016 IBNR Count 2007 (1) $ 79.2 $ 82.2 $ 80.5 $ 78.6 $ 77.3 $ 76.5 $ 75.6 $ 75.8 $ 75.1 $ 74.9 $ 1.3 7,591 2008 (1) 88.9 93.9 88.0 81.5 81.5 80.6 79.8 80.5 80.4 1.6 8,930 2009 93.8 87.6 82.5 80.3 79.4 79.2 77.5 77.5 1.2 8,014 2010 115.5 116.9 115.8 115.9 116.3 114.9 114.7 2.6 10,152 2011 141.4 144.2 144.3 145.5 143.8 146.7 7.5 12,428 2012 176.3 171.1 165.2 157.2 162.9 12.6 12,983 2013 179.3 167.4 160.1 154.4 15.6 11,612 2014 182.1 172.9 154.7 22.3 10,748 2015 189.6 164.2 38.2 11,158 2016 189.6 75.1 14,103 Total $ 1,320.0 Cumulative Paid Losses and ALAE, Net of Reinsurance YEARS ENDED DECEMBER 31, Accident 2007 2008 2009 2010 2011 2012 2013 2014 2015 Year Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited 2016 2007 (1) $ 15.1 $ 34.9 $ 46.5 $ 54.4 $ 59.6 $ 62.0 $ 63.9 $ 65.5 $ 66.5 $ 67.3 2008 (1) 17.9 40.2 52.9 60.8 64.8 67.1 69.8 71.0 72.4 2009 19.2 41.2 54.6 61.6 65.4 68.6 69.8 70.8 2010 22.1 57.2 76.9 89.5 96.5 101.0 104.2 2011 30.0 71.3 97.3 114.0 122.9 128.0 2012 30.4 74.8 102.6 120.1 130.7 2013 30.9 74.6 101.2 114.0 2014 30.6 70.5 92.3 2015 28.0 65.7 2016 33.9 Total $ 879.3 Total reserves for 2007 – 2016 accident years (incurred - paid) 440.7 Total reserves for 2006 and prior accident years 87.5 Unallocated loss adjustment expense and other 15.9 Net reserves at December 31, 2016 $ 544.1 (1) The incurred and cumulative paid losses and ALAE, IBNR and incurred claim counts retroactively include AIX business for all periods presented, including those periods that pre-date the acquisition of AIX on November 30, 2008. Commercial automobile liability (in millions) As of Incurred Losses and ALAE, Net of Reinsurance December 31, 2016 YEARS ENDED DECEMBER 31, Cumulative Incurred Accident 2011 2012 2013 2014 2015 Claim Year Unaudited Unaudited Unaudited Unaudited Unaudited 2016 IBNR Count 2011 $ 120.4 $ 142.1 $ 148.0 $ 162.8 $ 177.0 $ 179.6 $ 2.4 15,457 2012 166.8 167.5 173.7 189.9 198.0 5.7 14,786 2013 177.7 179.4 205.3 227.5 16.7 15,309 2014 168.5 163.3 177.3 28.7 13,464 2015 163.4 168.3 51.0 12,723 2016 157.0 87.6 10,748 Total $ 1,107.7 Cumulative Paid Losses and ALAE, Net of Reinsurance YEARS ENDED DECEMBER 31, Accident 2011 2012 2013 2014 2015 Year Unaudited Unaudited Unaudited Unaudited Unaudited 2016 2011 $ 27.7 $ 64.7 $ 102.4 $ 135.5 $ 160.5 $ 170.2 2012 33.3 77.0 117.0 156.9 176.3 2013 35.9 89.6 137.6 176.3 2014 33.1 70.8 102.7 2015 32.2 63.8 2016 27.8 Total $ 717.1 Total reserves for 2011 – 2016 accident years (incurred - paid) 390.6 Total reserves for 2010 and prior accident years 9.6 Unallocated loss adjustment expense 4.3 Net reserves at December 31, 2016 $ 404.5 Personal automobile liability (in millions) As of Incurred Losses and ALAE, Net of Reinsurance December 31, 2016 YEARS ENDED DECEMBER 31, Cumulative Incurred Accident 2012 2013 2014 2015 Claim Year Unaudited Unaudited Unaudited Unaudited 2016 IBNR Count 2012 $ 358.4 $ 366.9 $ 366.3 $ 376.5 $ 379.8 $ 5.7 51,700 2013 348.2 339.6 338.3 343.0 6.5 49,278 2014 323.1 304.1 308.8 15.1 43,268 2015 327.4 334.1 40.5 41,989 2016 337.9 109.7 39,477 Total $ 1,703.6 Cumulative Paid Losses and ALAE, Net of Reinsurance YEARS ENDED DECEMBER 31, Accident 2012 2013 2014 2015 Year Unaudited Unaudited Unaudited Unaudited 2016 2012 $ 126.6 $ 234.6 $ 305.1 $ 342.2 $ 361.8 2013 115.3 210.5 273.3 310.1 2014 107.2 188.6 241.1 2015 112.9 205.4 2016 112.8 Total $ 1,231.2 Total reserves for 2012 – 2016 accident years (incurred - paid) 472.4 Total reserves for 2011 and prior accident years 66.5 Unallocated loss adjustment expense 12.3 Net reserves at December 31, 2016 $ 551.2 Chaucer core lines (in millions) As of Incurred Losses and ALAE, Net of Reinsurance (1) December 31, 2016 YEARS ENDED DECEMBER 31, Cumulative Incurred Accident 2011 2012 2013 2014 2015 Claim Year Unaudited Unaudited Unaudited Unaudited Unaudited 2016 IBNR Count 2011 (2) $ 640.9 $ 597.7 $ 605.3 $ 586.0 $ 586.2 $ 575.7 $ 33.4 6,940 2012 420.5 337.2 342.4 325.0 318.0 31.5 5,690 2013 418.2 381.8 369.4 360.1 54.0 5,618 2014 457.7 391.6 397.1 80.4 6,934 2015 488.4 410.5 136.8 7,216 2016 505.2 329.9 4,404 Total $ 2,566.6 Cumulative Paid Losses and ALAE, Net of Reinsurance (1) YEARS ENDED DECEMBER 31, Accident 2011 2012 2013 2014 2015 Year Unaudited Unaudited Unaudited Unaudited Unaudited 2016 2011 (2) $ 134.2 $ 296.3 $ 391.0 $ 438.6 $ 489.3 $ 513.2 2012 55.4 144.7 200.0 228.7 246.7 2013 58.2 158.4 228.4 257.5 2014 52.0 162.2 227.8 2015 52.5 146.8 2016 79.1 Total $ 1,471.1 Total reserves for 2011 – 2016 accident years (incurred - paid) 1,095.5 Total reserves for 2010 and prior accident years 129.5 Reserves for nuclear energy classes 31.8 Unallocated loss adjustment expense and other 23.1 Net reserves at December 31, 2016 $ 1,279.9 (1) Chaucer incurred losses and ALAE and paid losses and ALAE that are denominated in foreign currencies are converted to U.S. dollars as of December 31, 2016, the most recent balance sheet date, for all years presented. (2) The incurred and cumulative paid losses and ALAE, IBNR and reported claim counts retroactively includes the 6 month period that pre-dates the acquisition of Chaucer on July 1, 2011. Additionally, during 2011 Chaucer experienced an elevated level of high severity catastrophe events. For example, three such events, the February |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 18. 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 pla intiff, a former employee of the Company’s 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. |
Statutory Financial Information
Statutory Financial Information | 12 Months Ended |
Dec. 31, 2016 | |
Statutory Financial Information [Abstract] | |
Statutory Financial Information | 19. STATUTORY FINANCIAL INFORMATION The Company’s U.S. insurance subsidiaries are required to file annual statements with state regulatory authorities prepared on an accounting basis prescribed or permitted by such authorities (statutory basis), as codified by the National Association of Insurance Commissioners. Permitted statutory accounting practices encompass all accounting practices that are not prescribed; such practices differ from state to state, may differ from company to company within a state, and may change in the future. The Company’s U.S. insurance subsidiaries did not have any permitted practices as of or for the years ended December 31, 2016, 2015 and 2014. Statutory capital and surplus differs from shareholders’ equity reported in accordance with generally accepted accounting principles primarily because under the statutory basis of accounting, deferred acquisition costs are expensed when incurred and the recognition of deferred tax assets is based on different recoverability assumptions. The following table provides statutory net income for the year ended December 31 and statutory capital and surplus as of December 31 for the periods indicated: (in millions) 2016 2015 2014 Statutory Net Income U.S. Insurance Subsidiaries $ 158.0 $ 175.9 $ 204.3 Statutory Capital and Surplus U.S. Insurance Subsidiaries $ 2,173.4 $ 2,192.8 $ 2,057.1 The minimum statutory capital and surplus necessary to satisfy the Company’s regulatory requirements was $442.0 million, $378.5 million and $374.6 million, which equals the Authorized Control Level at December 31, 2016, 2015 and 2014, respectively. |
Quarterly Results of Operations
Quarterly Results of Operations | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Results of Operations [Abstract] | |
Quarterly Results of Operations | 20. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) The quarterly results of operations for 2016 and 2015 are summarized below. THREE MONTHS ENDED (in millions, except per share data) 2016 March 31 June 30 Sept. 30 Dec. 31 Total revenues $ 1,227.6 $ 1,222.0 $ 1,241.2 $ 1,255.0 Income (loss) from continuing operations $ 78.1 $ 1.9 $ 88.3 $ (12.2) Net income (loss) $ 78.2 $ 2.0 $ 88.4 $ (13.5) Income (loss) from continuing operations per share: Basic $ 1.82 $ 0.04 $ 2.07 $ (0.29) Diluted (1) $ 1.79 $ 0.04 $ 2.06 $ (0.29) Net income (loss) per share: Basic $ 1.82 $ 0.05 $ 2.07 $ (0.32) Diluted (1) $ 1.80 $ 0.05 $ 2.06 $ (0.32) Dividends declared per share $ 0.46 $ 0.46 $ 0.46 $ 0.50 (1) Per diluted share amounts in the fourth quarter exclude commons stock equivalents since the impact of these instruments was antidilutive. In the second quarter of 2016, the Company issued $375 million aggregate principal amount of 4.5% senior unsecured debentures. The net proceeds were used, together with cash on hand, to redeem outstanding senior notes, resulting in a pre-tax loss of $86.1 million. The after-tax effect of this loss was to decrease diluted earnings per share from income from continuing operations in the quarter by $1.29 . See also Note 6 - "Debt and Credit Arrangements" for further information In the fourth quarter of 2016, the Company recorded an adjustment to increase carried reserves for prior accident years by $174.1 million. The after-tax effect of this charge was to decrease diluted earnings per share from income from continuing operations in the quarter by $2.66 . See also "2016 Fourth Quarter Domestic Business Loss and LAE Reserve Increase" in Note 17 - "Liabilities for Outstanding Claims, Losses and Loss Adjustment Expenses" for further information. THREE MONTHS ENDED (in millions, except per share data) 2015 March 31 June 30 Sept. 30 Dec. 31 Total revenues $ 1,298.7 $ 1,297.1 $ 1,233.5 $ 1,204.7 Income from continuing operations $ 54.9 $ 120.9 $ 77.2 $ 77.8 Net income $ 54.9 $ 120.7 $ 78.3 $ 77.6 Income from continuing operations per share: Basic $ 1.24 $ 2.74 $ 1.75 $ 1.80 Diluted $ 1.22 $ 2.69 $ 1.72 $ 1.76 Net income per share: Basic $ 1.24 $ 2.73 $ 1.78 $ 1.79 Diluted $ 1.22 $ 2.68 $ 1.74 $ 1.76 Dividends declared per share $ 0.41 $ 0.41 $ 0.41 $ 0.46 Due to the use of weighted average shares outstanding when calculating earnings per common share, the sum of the quarterly per common share data may not equal the per common share data for the year. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 21. SUBSEQUENT EVENTS There were no subsequent events requiring adjustment to the financial statements and no additional disclosures required in the notes to the consolidated financial statements. |
SCHEDULE I SUMMARY OF INVESTMEN
SCHEDULE I SUMMARY OF INVESTMENTS - OTHER THAN INVESTMENTS IN RELATED PARTIES | 12 Months Ended |
Dec. 31, 2016 | |
SCHEDULE I SUMMARY OF INVESTMENTS - OTHER THAN INVESTMENTS IN RELATED PARTIES [Abstract] | |
SCHEDULE I SUMMARY OF INVESTMENTS - OTHER THAN INVESTMENTS IN RELATED PARTIES | SCHEDULE I THE HANOVER INSURANCE GROUP, INC. SUMMARY OF INVESTMENTS – OTHER THAN INVESTMENTS IN RELATED PARTIES DECEMBER 31, 2016 (in millions) Type of investment Cost (1) Value Amount at which shown in the balance sheet Fixed maturities: Bonds: United States Government and government agencies and authorities $ 1,272.6 $ 1,265.5 $ 1,265.5 States, municipalities and political subdivisions 1,065.4 1,095.0 1,095.0 Foreign governments 235.8 240.7 240.7 Public utilities 454.1 461.9 461.9 All other corporate bonds 4,204.2 4,265.2 4,265.2 Total fixed maturities 7,232.1 7,328.3 7,328.3 Equity securities: Common stocks: Public utilities 96.3 120.6 120.6 Banks, trusts and insurance companies 21.7 25.9 25.9 Industrial, miscellaneous and all other 376.8 426.9 426.9 Nonredeemable preferred stocks 3.6 11.0 11.0 Total equity securities 498.4 584.4 584.4 Mortgage loans on real estate (2) 297.6 297.2 297.6 Real estate 8.6 8.6 8.6 Other long-term investments (3) 223.7 227.8 227.6 Short-term investments 3.0 3.0 3.0 Total investments $ 8,263.4 $ 8,449.3 $ 8,449.5 (1) For equity securities, represents original cost, and for fixed maturities, original cost reduced by repayments and adjusted for amortization of premiums and accretion of discounts. (2) Includes $296.6 million of participating interests in commercial mortgage loans ori ginated and serviced by a third- party. The Company shares, on a pro - rata basis, in all related cash flows of the underlying mortgages. Due to certain reacquisiti on rights retained by the third- party in the loan participation arrangement, the Company accounted for its participatory interest in mortgage loans as secured borrowings. (3) The cost of other long-term investments differs from the carrying value due to market value changes in the Company's equity ownership of limited partnership investments. The value of other long-term investments differs from the carrying value due to cost basis partnership investments. The condensed financial information should be read in conjunction with the consolidated financial statements and notes thereto. |
SCHEDULE II CONDENSED FINANCIAL
SCHEDULE II CONDENSED FINANCIAL INFORMATION OF REGISTRANT PARENT COMPANY ONLY | 12 Months Ended |
Dec. 31, 2016 | |
SCHEDULE II CONDENSED FINANCIAL INFORMATION OF REGISTRANT PARENT COMPANY ONLY [Abstract] | |
SCHEDULE II CONDENSED FINANCIAL INFORMATION OF REGISTRANT PARENT COMPANY ONLY STATEMENTS OF INCOME | SCHEDULE II THE HANOVER INSURANCE GROUP, INC. CONDENSED FINANCIAL INFORMATION OF REGISTRANT PARENT COMPANY ONLY STATEMENTS OF INCOME YEARS ENDED DECEMBER 31 2016 2015 2014 (in millions) Revenues Net investment income $ 4.9 $ 4.1 $ 3.9 Net realized gains from sales and other - 1.0 - Interest income from loan to subsidiary 22.4 22.5 22.5 Other income 0.5 0.1 0.1 Total revenues 27.8 27.7 26.5 Expenses Interest expense 46.1 53.9 54.7 Loss from repayment of debt 88.3 24.1 0.1 Employee benefit related expenses 7.0 7.0 11.1 Interest expense on loan from subsidiary 6.3 - - Benefit related to acquired businesses - (0.7) - Other operating expenses 8.6 7.6 7.5 Total expenses 156.3 91.9 73.4 Net loss before income taxes and equity in income of subsidiaries (128.5) (64.2) (46.9) Income tax benefit 75.6 49.5 52.1 Equity in income of subsidiaries 207.0 345.2 277.4 Income from continuing operations 154.1 330.5 282.6 Income (loss) from discontinued operations (net of income tax benefit of $1.7 , $0.4 and $0.2 in 2016, 2015 and 2014) 1.0 1.0 (0.6) Net income 155.1 331.5 282.0 Other comprehensive income (loss), net of tax 8.9 (152.5) 28.8 Comprehensive income $ 164.0 $ 179.0 $ 310.8 The condensed financial information should be read in conjunction with the consolidated financial statements and notes thereto. SCHEDULE II (CONTINUED) THE HANOVER INSURANCE GROUP, INC. CONDENSED FINANCIAL INFORMATION OF REGISTRANT PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31 2016 2015 (in millions, except per share data) Assets Fixed maturities - at fair value (amortized cost of $116.5 and $121.1 ) $ 116.4 $ 121.3 Equity securities - at fair value (cost of $1.0 ) 1.1 1.1 Cash and cash equivalents 10.1 8.6 Investments in subsidiaries 3,513.8 3,262.5 Net receivable from subsidiaries (1) 16.6 222.8 Deferred income tax receivable 31.7 7.4 Current income tax receivable - 1.1 Other assets 1.1 2.5 Total assets $ 3,690.8 $ 3,627.3 Liabilities Expenses and state taxes payable $ 8.0 $ 18.1 Current income tax payable 30.5 - Interest payable 8.2 7.9 Debt 786.6 756.9 Total liabilities 833.3 782.9 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 1,846.7 1,833.5 Accumulated other comprehensive income 62.8 53.9 Retained earnings 1,875.6 1,803.5 Treasury stock at cost ( 18.1 and 17.5 million) (928.2) (847.1) Total shareholders' equity 2,857.5 2,844.4 Total liabilities and shareholders' equity $ 3,690.8 $ 3,627.3 (1) Net receivable from subsidiaries in 2015 includes a $300.0 million note receivable from The Hanover Insurance Holdings, Ltd., parent company of Chaucer Holdings, Ltd. In 2016, this note receivable was contributed to The Hanover (Barbados) Capital, SRL, a wholly-owned subsidiary of THG. The condensed financial information should be read in conjunction with the consolidated financial statements and notes thereto. SCHEDULE II (CONTINUED) THE HANOVER INSURANCE GROUP, INC. CONDENSED FINANCIAL INFORMATION OF REGISTRANT PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31 2016 2015 2014 (in millions) Cash flows from operating activities Net income $ 155.1 $ 331.5 $ 282.0 Adjustments to reconcile net income to net cash provided by operating activities: (Gain) loss from discontinued operations (1.0) (1.0) 0.6 Net realized investment gains - (1.0) - Loss from retirement of debt 88.3 24.1 0.1 Equity in net income of subsidiaries (207.0) (345.2) (277.4) Dividends received from subsidiaries 228.1 5.1 70.2 Deferred income tax (benefit) expense (39.0) 35.7 (29.9) Change in expenses and taxes payable 20.7 (2.6) 11.4 Change in net receivable from subsidiaries 30.6 (5.9) 16.9 Other, net 8.3 6.1 4.3 Net cash provided by operating activities 284.1 46.8 78.2 Cash flows from investing activities Proceeds from disposals and maturities of fixed maturities 82.4 70.0 25.6 Purchase of fixed maturities - (11.9) (28.6) Net cash used for business acquisitions (2.2) (2.3) (2.3) Net cash provided by (used in) investing activities 80.2 55.8 (5.3) Cash flows from financing activities Proceeds from debt borrowings 370.7 - - Proceeds from long-term intercompany borrowings 125.0 - - (Repayments) proceeds from short-term intercompany borrowings (102.7) 102.7 - Repurchases of debt (571.9) (15.1) (0.7) Repurchase of common stock (105.6) (127.3) (20.4) Dividends paid to shareholders (80.4) (74.2) (67.0) Proceeds from exercise of employee stock options 16.2 16.6 12.6 Other financing activities (14.1) (11.2) (3.6) Net cash used in financing activities (362.8) (108.5) (79.1) Net change in cash and cash equivalents 1.5 (5.9) (6.2) Cash and cash equivalents, beginning of year 8.6 14.5 20.7 Cash and cash equivalents, end of year $ 10.1 $ 8.6 $ 14.5 Included in other operating cash flows was the cash portion of dividends received from unconsolidated subsidiaries. Additionally, investment assets of $ 78.5 million , $76.9 million and $1.0 million were transferred to the parent company in 2016, 2015 and 2014, respectively, to settle dividend obligations and other intercompany balances. The condensed financial information should be read in conjunction with the consolidated financial statements and notes thereto. |
SCHEDULE III SUPPLEMENTARY INSU
SCHEDULE III SUPPLEMENTARY INSURANCE INFORMATION | 12 Months Ended |
Dec. 31, 2016 | |
SCHEDULE III SUPPLEMENTARY INSURANCE INFORMATION [Abstract] | |
SCHEDULE III SUPPLEMENTARY INSURANCE INFORMATION | SCHEDULE III THE HANOVER INSURANCE GROUP, INC. SUPPLEMENTARY INSURANCE INFORMATION DECEMBER 31, 2016 (in millions) Segments Deferred acquisition costs Future policy benefits, losses, claims and loss expenses Unearned premiums Other policy claims and benefits payable Premium revenue Net investment income Benefits, claims, losses and settlement expenses Amortization of deferred acquisition costs Other operating expenses Premiums written Commercial, Personal and Other $ 402.8 $ 4,663.8 $ 1,995.1 $ 6.4 $ 3,789.5 $ 233.7 $ 2,545.4 $ 803.6 $ 593.7 $ 3,882.7 Chaucer 114.7 2,289.4 569.0 - 838.6 45.7 419.3 231.6 113.7 816.1 Interest on Debt - - - - - - - - 54.9 - Eliminations - (10.2) (3.1) - - - - - (7.6) - Total $ 517.5 $ 6,943.0 $ 2,561.0 $ 6.4 $ 4,628.1 $ 279.4 $ 2,964.7 $ 1,035.2 $ 754.7 $ 4,698.8 DECEMBER 31, 2015 (in millions) Segments Deferred acquisition costs Future policy benefits, losses, claims and loss expenses Unearned premiums Other policy claims and benefits payable Premium revenue Net investment income Benefits, claims, losses and settlement expenses Amortization of deferred acquisition costs Other operating expenses Premiums written Commercial, Personal and Other $ 385.5 $ 4,204.6 $ 1,892.3 $ 5.6 $ 3,653.6 $ 233.2 $ 2,367.4 $ 778.0 $ 508.0 $ 3,727.5 Chaucer 123.3 2,372.5 651.7 - 1,051.2 45.9 516.7 255.2 154.5 889.3 Interest on Debt - - - - - - - - 60.6 - Eliminations - (8.3) (3.2) - - - - - (7.4) - Total $ 508.8 $ 6,568.8 $ 2,540.8 $ 5.6 $ 4,704.8 $ 279.1 $ 2,884.1 $ 1,033.2 $ 715.7 $ 4,616.8 DECEMBER 31, 2014 (in millions) Segments Deferred acquisition costs Future policy benefits, losses, claims and loss expenses Unearned premiums Other policy claims and benefits payable Premium revenue Net investment income Benefits, claims, losses and settlement expenses Amortization of deferred acquisition costs Other operating expenses Premiums written Commercial, Personal and Other $ 370.3 $ 3,966.3 $ 1,819.1 $ 5.1 $ 3,488.5 $ 226.1 $ 2,293.8 $ 748.5 $ 480.4 $ 3,578.7 Chaucer 155.4 2,425.8 768.1 - 1,221.8 44.2 633.7 291.5 182.9 1,231.4 Interest on Debt - - - - - - - - 65.8 - Eliminations - (5.5) (3.3) - - - - - (7.0) - Total $ 525.7 $ 6,386.6 $ 2,583.9 $ 5.1 $ 4,710.3 $ 270.3 $ 2,927.5 $ 1,040.0 $ 722.1 $ 4,810.1 |
SCHEDULE IV REINSURANCE
SCHEDULE IV REINSURANCE | 12 Months Ended |
Dec. 31, 2016 | |
SCHEDULE IV REINSURANCE [Abstract] | |
SCHEDULE IV REINSURANCE | SCHEDULE IV THE HANOVER INSURANCE GROUP, INC. REINSURANCE Incorporated herein by reference to Note 16 —“Reinsurance” in the Notes of the Consolidated Financial Statements included in Financial Statements and Supplemental Data of this Form 10-K. |
SCHEDULE V VALUATION AND QUALIF
SCHEDULE V VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2016 | |
SCHEDULE V VALUATION AND QUALIFYING ACCOUNTS [Abstract] | |
SCHEDULE V VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE V THE HANOVER INSURANCE GROUP, INC. VALUATION AND QUALIFYING ACCOUNTS DECEMBER 31 Additions (in millions) Description Balance at beginning of period Charged to costs and expenses Charged to other accounts (1) Deductions Balance at end of period 2016 Allowance for doubtful accounts $ 3.2 $ 8.7 $ - $ (8.2) $ 3.7 Allowance for uncollectible reinsurance recoverables (2) 9.7 3.4 0.1 (0.1) 13.1 $ 12.9 $ 12.1 $ 0.1 $ (8.3) $ 16.8 2015 Allowance for doubtful accounts $ 3.2 $ 9.7 $ - $ (9.7) $ 3.2 Allowance for uncollectible reinsurance recoverables (3) 15.9 - 0.2 (6.4) 9.7 $ 19.1 $ 9.7 $ 0.2 $ (16.1) $ 12.9 2014 Allowance for doubtful accounts $ 3.1 $ 9.4 $ - $ (9.3) $ 3.2 Allowance for uncollectible reinsurance recoverables 20.7 0.9 (0.3) (5.4) 15.9 $ 23.8 $ 10.3 $ (0.3) $ (14.7) $ 19.1 (1) Amounts charged to other accounts include foreign exchange gains and losses . (2) 2016 activity primarily relates to the impairment of a receivable that is associated with a single reinsurance counterparty that was placed into conservation by the state of California in July 2016. This counterparty is not involved in the Company’s ongoing reinsurance program and the entire receivable related to this counterparty resulted from to a one-time block reinsurance transaction that occurred in 2012 as part of the Company’s exposure management actions. (3) Includes a deduction of $5.4 million related to the transfer of the U.K. motor business on June 30, 2015. |
SCHEDULE VI SUPPLEMENTAL INFORM
SCHEDULE VI SUPPLEMENTAL INFORMATION CONCERNING PROPERTY AND CASUALTY INSURANCE OPERATIONS | 12 Months Ended |
Dec. 31, 2016 | |
SCHEDULE VI SUPPLEMENTAL INFORMATION CONCERNING PROPERTY AND CASUALTY INSURANCE OPERATIONS [Abstract] | |
SCHEDULE VI SUPPLEMENTAL INFORMATION CONCERNING PROPERTY AND CASUALTY INSURANCE OPERATIONS | SCHEDULE VI THE HANOVER INSURANCE GROUP, INC. SUPPLEMENTAL INFORMATION CONCERNING PROPERTY AND CASUALTY INSURANCE OPERATIONS YEARS ENDED DECEMBER 31 (in millions) Affiliation with Registrant Deferred acquisition costs Reserves for unpaid claims and claim adjustment expenses (1) Discount, if any, deducted from previous column (2) Unearned premiums (1) Earned premiums Net investment income Consolidated Property and Casualty Subsidiaries 2016 $ 517.5 $ 6,949.4 $ - $ 2,561.0 $ 4,628.1 $ 279.4 2015 $ 508.8 $ 6,574.4 $ - $ 2,540.8 $ 4,704.8 $ 279.1 2014 $ 525.7 $ 6,391.7 $ - $ 2,583.9 $ 4,710.3 $ 270.3 Claims and claim adjustment expenses incurred related to Current year Prior years Amortization of deferred acquisition costs Paid claims and claim adjustment expenses Premiums written 2016 $ 2,859.3 $ 105.4 $ 1,035.2 $ 2,509.9 $ 4,698.8 2015 $ 3,000.2 $ (116.1) $ 1,033.2 $ 2,664.0 $ 4,616.8 2014 $ 3,044.9 $ (117.4) $ 1,040.0 $ 2,727.6 $ 4,810.1 (1) Reserves for unpaid claims and claim adjustment expenses are shown gross of $2,274.8 million, $2,280.8 million and $1,983.0 million of reinsurance recoverable on unpaid losses in 2016, 2015 and 2014, respectively. Unearned premiums are shown gross of prepaid premiums of $222.4 million, $256.2 million and $197.8 million in 2016, 2015 and 2014, respectively. Reserves for unpaid claims and claims adjustment expense also include policyholder dividends. (2) The Company does not use discounting techniques . |
Summary of Significant Accoun36
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Summary Of Significant Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION | A. Basis of Presentation and Principles of Consolidation The consolidated financial statements of The Hanover Insurance Group, Inc. (“THG” or the “Company”), include the accounts of The Hanover Insurance Company (“Hanover Insurance”) and Citizens Insurance Company of America (“Citizens”), 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 14 – “Segment Information”. The consolidated financial statements also 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 generally accepted accounting principles in the United States of America (“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 these financial statements reflect all adjustments, consisting of normal recurring items necessary for a fair presentation of the financial position and results of operations. |
INVESTMENTS | B. Investments Fixed maturities and equity securities are classified as available-for-sale and are carried at fair value, with unrealized gains and losses, net of taxes, reported in accumulated other comprehensive income, a separate component of shareholders’ equity. The amortized cost of fixed maturities is adjusted for amortization of premiums and accretion of discounts to maturity. Other investments consist primarily of mortgage participations, limited partnerships and overseas deposits. Mortgage participations represent interests in commercial mortgage loans ori ginated and serviced by a third- party of which the Company shares, on a pro-rata basis, in all related cash flows of the underlying mortgage loans. Due to certain reacquisiti on rights retained by the third- party in the loan participation, these investments are accounted for as secured borrowings under Accounting Standards Codification (“ASC”) 860, Transfers and Servicing (“ASC 860”) . Mortgage participations are stated at unpaid principal balances adjusted for deferred fees or expenses, net of reserves. Reserves on mortgages are established and are collectively evaluated based on losses expected by the Company for loans that may not be collectible in full. In establishing reserves, the Company considers, among other things, the estimated fair value of the underlying collateral. Investments in limited partnership interests include interests in private equity funds. Where the Company’s interest is so minor that it exercises virtually no influence over operating and financial policies, investments in limited partnership interests are accounted for in accordance with the cost method of accounting; all other investments in limited partnership interests are accounted for in accordance with the equity method of accounting. Overseas deposits are investments maintained in overseas funds and managed exclusively by Lloyd’s. These funds are required in order to protect policyholders in overseas markets and enable the Company to operate in those markets. Overseas deposits are carried at fair value. Realized and unrealized gains and losses on overseas deposits, including the impact of foreign currency movements, are reflected in the income statement in the period the gain or loss was generated. Net investment income includes interest, dividends and income from limited partnership interests and overseas deposits. Interest income is recognized based on the effective yield method which includes the amortization of premiums and accretion of discounts. The effective yield used to determine the amortization for fixed maturities subject to prepayment risk, such as mortgage-backed and asset-backed securities, is recalculated and adjusted periodically based upon actual historical and projected future cash flows. The adjustment to yields for highly rated prepayable fixed maturities are accounted for using the retrospective method. The adjustment to yields for all other prepayable fixed maturities are accounted for using the prospective method. Fixed maturities and mortgage participations that are delinquent are placed on non-accrual status, and thereafter interest income is recognized only when cash payments are received. Realized investment gains and losses are reported as a component of revenues based upon specific identification of the investment assets sold. When an other-than-temporary decline in value of a specific investment is deemed to have occurred, and a charge to earnings is required, the Company recognizes a realized investment loss. The Company reviews investments in an unrealized loss position to identify other-than-temporary declines in value. When it is determined that a decline in value of an equity security is other-than-temporary, the Company reduces the cost basis of the security to fair value with a corresponding charge to earnings. When an other-than-temporary decline in value of a debt security is deemed to have occurred, the Company must assess whether it intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis. If the debt security meets either of these two criteria, an other-than-temporary impairment (“OTTI”) is recognized in earnings equal to the entire difference between the security’s amortized cost basis and its fair value at the impairment measurement date. If the Company does not intend to sell the debt security and it is not more likely than not the Company will be required to sell the security before recovery of its amortized cost basis, the credit loss portion of an OTTI is recorded through earnings while the portion attributable to all other factors is recorded separately as a component of other comprehensive income. The amount of the OTTI that relates to credit is estimated by comparing the amortized cost of the fixed maturity security with the net present value of the security’s projected future cash flows, discounted at the effective interest rate implicit in the investment prior to impairment. The non-credit portion of the impairment is equal to the difference between the fair value and the net present value of the security’s cash flows at the impairment measurement date. Once an OTTI has been recognized, the new amortized cost basis of the security is equal to the previous amortized cost less the amount of OTTI recognized in earnings. For equity method investments, an impairment is recognized when evidence demonstrates that an other-than-temporary loss in value has occurred, including the absence of the ability to recover the carrying amount of the investment or the inability of the investee to sustain a level of earnings that would justify the carrying amount of the investment. |
FINANCIAL INSTRUMENTS | C. Financial Instruments In the normal course of business, the Company may enter into transactions involving various types of financial instruments, including debt, investments such as fixed maturities, equity securities and mortgage loans, investment and loan commitments, swap contracts, option contracts, forward contracts and futures contracts. These instruments involve credit risk and could also be subject to risk of loss due to interest rate and foreign currency fluctuation. The Company evaluates and monitors each financial instrument individually and, w hen appropriate, obtains collateral or other security to minimize losses. |
CASH AND CASH EQUIVALENTS | D . Cash and Cash Equivalents Cash and cash equivalents includes cash on hand, amounts due from banks and highly liquid debt instruments purchased with an original maturity of three months or less. |
DEFERRED ACQUISITION COSTS | E. Deferred Acquisition Costs Acquisition costs consist of commissions, underwriting costs and other costs, which vary with, and are primarily related to, the successful production of premiums. Acquisition costs are deferred and amortized over the terms of the insurance policies. Deferred acquisition costs (“DAC”) for each operating segment are reviewed to determine if the costs are recoverable from future income, including investment income. If such costs are determined to be unrecoverable, they are expensed at the time of determination. Although recoverability of DAC is not assured, the Company believes it is more likely than not that all of these costs will be recovered. The amount of DAC considered recoverable, however, could be reduced in the near term if the estimates of total revenues discussed above are reduced or permanently impaired as a result of a disposition of a line of business. The amount of amortization of DAC could be revised in the near term if any of the estimates discussed above are revised. |
REINSURANCE RECOVERABLES | F. Reinsurance Recoverables The Company shares certain insurance risks it has underwritten, through the use of reinsurance contracts, with various insurance entities. Reinsurance accounting is followed for ceded transactions when the risk transfer provisions of ASC 944, Financial Services – Insurance (“ASC 944”), have been met. As a result, when the Company experiences loss or claims events that are subject to a reinsurance contract, reinsurance recoverables are recorded. The amount of the reinsurance recoverable can vary based on the terms of the reinsurance contract, the size of the individual loss or claim, or the aggregate amount of all losses or claims in a particular line or book of business or an aggregate amount associated with a particular accident year. The valuation of losses or claims recoverable depends on whether the underlying loss or claim is a reported loss or claim, or an incurred but not reported loss. For reported losses and claims, the Company values reinsurance recoverables at the time the underlying loss or claim is recognized, in accordance with contract terms. For incurred but not reported losses, the Company estimates the amount of reinsurance recoverables based on the terms of the reinsurance contracts and historical reinsurance recovery information and applies that information to the gross loss reserve. Amounts recoverable from reinsurers are estimated in a manner consistent with the claim liability associated with the reinsured business and the balance is disclosed separately in the financial statements. However, the ultimate amount of the reinsurance recoverable is not known until all losses and claims are settled. Allowances are established for amounts deemed uncollectible and reinsurance recoverables are recorded net of these allowances. The Company evaluates the financial condition of its reinsurers and monitors concentration risk to minimize its exposure to significant credit losses from individual reinsurers . |
PROPERTY, EQUIPMENT AND CAPITALIZED SOFTWARE | G. Property, Equipment and Capitalized Software Property, equipment, leasehold improvements and capitalized software are recorded at cost, less accumulated depreciation and amortization. Depreciation is generally provided using the straight-line method over the estimated useful lives of the related assets, which generally range from 3 to 30 years. The estimated useful life for capitalized software is generally 5 to 7 years. Amortization of leasehold improvements is provided using the straight-line method over the lesser of the term of the leases or the estimated useful life of the improvements. The Company tests for the recoverability of long-lived assets whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. The Company recognizes impairment losses only to the extent that the carrying amounts of long-lived assets exceed the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the assets. When an impairment loss occurs, the Company reduces the carrying value of the asset to fair value and no longer depreciates the asset. Fair values are estimated using discounted cash flow analysis. |
GOODWILL AND INTANGIBLE ASSETS | H. GOODWILL AND INTANGIBLE ASSETS In accordance with the provisions of ASC 350, Intangibles- Goodwill and Other , the Company carries its goodwill at cost, net of amortization accumulated prior to January 1, 2002, and net of impairments. Increases to goodwill are generated through acquisition and represent the excess of the cost of an acquisition over the fair value of net assets acquired, including any intangibles acquired. Since January 1, 2002, goodwill is no longer amortized but rather, is reviewed for impairment. Additionally, acquisitions can also produce intangible assets, which have either a definite or indefinite life. Intangible assets with definite lives are amortized over that life, whereas those intangible assets determined to have an indefinite life are reviewed at least annually for impairment. The Company tests for the recoverability of goodwill and intangible assets with indefinite lives annually or whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. The Company recognizes impairment losses only to the extent that the carrying amounts of reporting units with goodwill exceed the fair value. The amount of the impairment loss that is recognized is determined based upon the excess of the carrying value of goodwill compared to the implied fair value of the goodwill, as determined with respect to all assets and liabilities of the reporting unit. The Company has performed its annual review of goodwill and intangible assets with indefinite lives for impairment in the fourth quarters of 2016 and 2015 with no impairments recognized. At December 31, 2016 and 2015, Chaucer held intangible assets with indefinite lives of $47.0 million and $56.2 million, respectively, which represents approximately 76% and 74% of the Company’s balance, respectively. In addition, at December 31, 2016 and 2015, goodwill held by Chaucer was $6.0 million and $7.2 million, respectively. The remaining balance relates to the U.S. Companies. The changes in the value of intangible assets with indefinite lives from December 31, 2015 represent foreign exchange differences arising during 2016 whereas the changes in the value of intangible assets with indefinite lives during 2015 were primarily related to the disposition of the U.K. mot or business on June 30, 2015. S ee Note 2 – “Dispositions of Businesses” . |
LIABILITIES FOR LOSSES, LAE, AND UNEARNED PREMIUMS | I. LIABILITIES FOR LOSSES, LAE, AND UNEARNED PREMIUMS Liabilities for outstanding claims, losses and loss adjustment expenses (“LAE”) are estimates of payments to be made for reported losses and LAE and estimates of losses and LAE incurred but not reported. These liabilities are determined using case basis evaluations and statistical analyses of historical loss patterns and represent estimates of the ultimate cost of all losses incurred but not paid. These estimates are continually reviewed and adjusted as necessary; adjustments are reflected in current operations. Estimated amounts of salvage and subrogation on unpaid losses are deducted from the liability for unpaid claims. Premiums for direct and assumed business are reported as earned on a pro-rata basis over the contract period. The unexpired portion of these premiums is recorded as unearned premiums. All losses, LAE and unearned premium liabilities are based on the various estimates discussed above. Although the adequacy of these amounts cannot be assured, the Company believes that it is more likely than not that these liabilities and accruals will be sufficient to meet future obligations of policies in force. The amount of liabilities and accruals, however, could be revised in the near-term if the estimates discussed above are revised. |
DEBT | J. Debt The Company’s debt at December 31, 2016 includes senior debentures, subordinated debentures, and collateralized borrowings with the Federal Home Loan Bank of Boston (“FHLBB”). Debt instruments are carried at principal amount borrowed, net of any applicable unamortize d discounts and issuance costs. See Note 6 – “Debt and Credit Arrangements” . |
PREMIUM, PREMIUM RECEIVABLE, FEE REVENUE AND RELATED EXPENSES | K. Premium, Premium Receivable, Fee Revenue and Related Expenses Insurance premiums written are generally recorded at the policy inception and are primarily earned on a pro - rata basis over the terms of the policies for all products. Premiums written include estimates, primarily in the Chaucer segment, that are derived from multiple sources, which include the historical experience of the underlying business, similar businesses and available industry information. These estimates are regularly reviewed and updated, and any resulting adjustments are included in the current year’s results. Unearned premium reserves represent the portion of premiums written that relates to the unexpired terms of the underlying in-force insurance policies and reinsurance contracts. Premium receivables reflect the unpaid balance of premium written as of the balance sheet date. Premium receivables are generally short-term in nature and are reported net of an allowance for estimated uncollectible premium accounts. The Company reviews its receivables for collectability at the balance sheet date. The allowance for uncollectible accounts was not material as of December 31, 2016 and 2015. Ceded premiums are charged to income over the applicable term of the various r einsurance contracts with third- party reinsurers. Reinsurance reinstatement premiums, when required, are recognized in the same period as the loss event that gave rise to the reinstatement premiums. Losses and related expenses are matched with premiums, resulting in their recognition over the lives of the contracts. This matching is accomplished through estimated and unpaid losses and amortization of deferred acquisition costs. |
INCOME TAXES | L. Income Taxes The Company is subject to the tax laws and regulations of the U.S. and foreign countries in which it operates. The Company files a consolidated U.S. federal income tax return that includes the holding company and its U.S. subsidiaries. Generally, taxes are accrued at the U.S. statutory tax rate of 35% for income from the U.S. operations. The Company’s primary non-U.S. jurisdiction is the United Kingdom (“U.K.”). In July 2013, the U.K. statutory rate decreased from 23% to 21% effective April 1, 2014 and from 21% to 20% effective April 1, 2015. In November 2015, the U.K. statutory tax rate decreased from 20% to 19% effective April 1, 2017 and from 19% to 18% effective April 1, 2020. A further decrease was enacted in September 2016 to reduce the U.K. statutory rate from 19% to 17% , instead of the 18% , effective April 1, 2020. The Company accrues taxes on certain non-U.S. income that is subject to U.S. tax at the U.S. tax rate. Foreign tax credits, where available, are utilized to offset U.S. tax as permitted. Certain non-U.S. income of the Company is not subject to U.S. tax until repatriated. Foreign taxes on this non-U.S. income are accrued at the local foreign rate and do not have an accrual for U.S. deferred taxes since these earnings are intended to be indefinitely reinvested overseas. The Company’s accounting for income taxes represents its best estimate of various events and transactions. Deferred income taxes are generally recognized when assets and liabilities have different values for financial statement and tax reporting purposes, and for other temporary taxable and deductible differences as defined by ASC 740, Income Taxes (“ASC 740”). These temporary differences are measured at the balance sheet date using enacted tax rates expected to apply to taxable income in the years the temporary differences are expected to reverse. These differences result primarily from insurance reserves, deferred acquisition costs, tax credit carryforwards, employee benefit plans and deferred Lloyd’s underwriting income. The realization of deferred tax assets depends upon the existence of sufficient taxable income within the carryback or carryforward periods under the tax law in the applicable tax jurisdiction. Consideration is given to all available positive and negative evidence, including reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. Valuation allowances are established if, based on available information, it is determined that it is more likely than not that all or some portion of the deferred tax assets will not be realized. Changes in valuation allowances are generally reflected in income tax expense or as an adjustment to other comprehensive income (loss) depending on the nature of the item for which the valuation allowance is being recorded. |
STOCK-BASED COMPENSATION | M. Stock-Based Compensation The Company recognizes the fair value of compensation costs for all share-based payments, including employee stock options, in the financial statements. Unvested awards are generally expensed on a straight line basis, by tranche, over the vesting period of the award. The Company’s stock-based compensation plans are discussed further in Note 11 – “Stock-Based Compensation Plans”. |
EARNINGS PER SHARE | N. Earnings Per Share Earnings per share (“EPS”) for the years ended December 31, 2016, 2015 and 2014 is based on a weighted average of the number of shares outstanding during each year. Basic and diluted EPS is computed by dividing income available to common stockholders by the weighted average number of shares outstanding for the period. The weighted average shares outstanding used to calculate basic EPS differ from the weighted average shares outstanding used in the calculation of diluted EPS due to the effect of dilutive employee stock options, nonvested stock grants and other contingently issuable shares. If the effect of such items is antidilutive, the weighted average shares outstanding used to calculate diluted EPS are equal to those used to calculate basic EPS. Options to purchase shares of common stock whose exercise prices are greater than the average market price of the common shares are not included in the computation of diluted earnings per share because the effect would be antidilutive. |
FOREIGN CURRENCY | O. Foreign Currency The Company’s reporting currency is the U.S. dollar. The functional currencies of the Company’s foreign operations are the U.K. pound sterling (“GBP”), U.S. dollar, and Canadian dollar. Assets and liabilities of foreign operations are translated into the U.S. dollar using the exchange rates in effect at the balance sheet date. Revenues and expenses of foreign operations are translated using the average exchange rate for the period. Gains or losses from translating the financial statements of foreign operations are recorded in the cumulative translation adjustment, as a separate component of accumulated other comprehensive income. Gains and losses arising from transactions denominated in a foreign currency, other than the Company’s functional currencies, are included in net income (loss), except for the Company’s foreign currency denominated available-for-sale investments. The Company’s foreign currency denominated available-for-sale investments’ change in exchange rates between the local currency and the functional currency at each balance sheet date represents an unrealized appreciation or depreciation in value of these securities, and is included as a component of accumulated other comprehensive income. The Company manages its exposure to foreign currency risk primarily by matching assets and liabilities denominated in the same currency. To the extent that assets and liabilities in foreign currencies are not matched, the Company is exposed to foreign currency risk. For functional currencies, the related exchange rate fluctuations are reflected in other comprehensive income (loss). The Company translated Chaucer’s balance sheet at December 31, 2016 and 2015 from GBP to U.S. dollars using a conversion rate of 1.23 and 1.47 , respectively. The Company recognized $22.3 million in foreign currency transaction losses in the Consolidated Statements of Income during the year ended December 31, 2016, and $8.5 million and $3.3 million in foreign currency transaction gains for the years ended December 31, 2015 and 2014, respectively. These amounts include realized losses of Euro denominated securities of $0.7 million, $3.4 million, and $1.3 million in 2016, 2015, and 2014, respectively. |
NEW ACCOUNTING PRONOUNCEMENTS | P. New Accounting Pronouncements Recently Implemented Standards In May 2015, the Financial Accounting Standards Board (“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 implemented this guidance beginning with its disclosures for the year ended December 31, 2016. The effect of implementing this guidance was not material to the Company’s financial position or results of operations, as the update is disclosure related. In April 2015, the FASB issued 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. In August 2014, the FASB issued ASC Update No. 2014-15, (Subtopic 205-40) Presentation of Financial Statements– 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 implemented this guidance beginning with the year-ended December 31, 2016. The effect of implementing this guidance was not material to the Company’s financial position or results of operations. In April 2014, the FASB issued ASC Update No. 2014-08, (Topic 205 and Topic 360) Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This ASC update modifies the definition of discontinued operations by limiting discontinued operations reporting to disposals of components of an entity that represent strategic shifts that have (or will have) a major effect on an entity’s operations and financial results. Also, this update requires additional financial statement disclosures about discontinued operations, as well as disposals of an individually significant component of an entity that do not qualify for discontinued operations presentation. This ASC update was effective for all disposals (or classifications as held for sale) of components of an entity that occurred within annual and interim periods beginning on or after December 15, 2014 and for all businesses that, on acquisition, were classified as held for sale that also occurred within interim and annual periods beginning on or after December 15, 2014. The Company implemented this guidance effective January 1, 2015. The effect of implementing this guidance was not material to the Company’s financial position or results of operations. Recently Issued Standards In January 2017, the FASB issued ASC Update No. 2017-04, (Topic 350) Intangibles – Goodwill and Other: Simplifying the Test for Goodwill Impairment . This guidance eliminates step 2 from the goodwill impairment test. Instead, an entity should perform its goodwill impairment test by comparing the fair value of the reporting unit with its carrying amount, including any applicable income tax effects, and recognize an impairment for the amount by which the carrying amount exceeds the reporting units fair value. However, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The updated guidance is effective for annual or interim goodwill impairment tests performed in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not expect the adoption of ASC Update No. 2017-04 to have a material impact on its financial position or results of operations. In January 2017, the FASB issued ASC Update No. 2017-01, (Topic 805) Business Combinations – Clarifying the Definition of a Business . The amendments in this update provide a more robust framework to use in determining when a set of assets and activities constitute a business. This guidance narrows the definition of a business by providing specific requirements that contribute to the creation of outputs that must be present to be considered a business. The guidance further clarifies the appropriate accounting when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets is that of an acquisition (disposition) of assets, not a business. This framework will reduce the number of transactions that an entity must further evaluate to determine whether transactions are business combinations or asset acquisitions. The updated guidance is effective for interim and annual periods beginning after December 15, 2017, and should be applied on a prospective basis. Early adoption is permitted only for transactions that have not been reported in financial statements that have been issued. The Company does not expect the adoption of ASC Update No. 2017-01 to have a material impact on its financial position or results of operations. In November 2016, the FASB issued ASC Update No. 2016-18 (Topic 230) Statement of Cash Flows – Restricted Cash (a consensus of the FASB Emerging Issues Task Force) . The amendments in this update require that restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Current GAAP does not include specific guidance on the cash flow classification and presentation of changes in restricted cash. The updated guidance is effective for interim and annual periods beginning after December 15, 2017 and is required to be applied using a retrospective transition method to each period presented. Early adoption is permitted, including adoption in an interim period. However, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. Implementing this guidance is not expected to have a significant impact on the Company’s statement of cash flows, as restricted cash, if any, is currently included in total cash and cash equivalents. 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 adoption of ASC Update No. 2016-16 is not expected to have any net impact on the Company’s financial position or results of operations . 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 Update 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 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 interim and annual periods beginning after December 15, 2019. 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 interim and annual periods beginning after December 15, 2016. The Company will adopt this standard effective January 1, 2017 and will retain its current forfeiture policy of accruing the compensation cost based on the number of awards that are expected to vest. 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. The adoption of this guidance is not expected to result in any cumulative effect adjustments and will not have a material impact on the liquidity of the Company. 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 beginning after December 15, 2018 and is required to be implemented by applying a modified retrospective transition approach. The Company is continuing to evaluate the impact of the adoption of ASC Update No. 2016-02 on its results of operations. It is expected that assets and liabilities will increase based on the present value of remaining lease payments for leases in place at the adoption date; however, the impact is not expected to be significant to the Company’s financial position. 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 (“NAV”). 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 will adopt the guidance effective January 1, 2018 through a cumulative effect adjustment to retained earnings. The adoption is not expected to have a material impact on the Company’s financial position. The impact to the Company is expected to be increased volatility in net income beginning in 2018; the magnitude of such volatility will depend on the composition of the Company’s investment portfolio in the future and changes in the fair value of the Company’s investments. In May 2014, the FASB issued ASC Update No. 2014-09, (Topic 606) Revenue from Contracts with Customers . This ASC 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. |
RECLASSIFICATIONS | Q. Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. |
Dispositions Of Businesses (Tab
Dispositions Of Businesses (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Dispositions Of Businesses [Abstract] | |
Components of Gain From Disposal of U.K. Motor Business | The components of the gain are as follows: (in millions) Total consideration $ 64.9 Less: Carrying value of subsidiaries (7.6) Intangibles and goodwill disposed (1) (17.7) Transaction expenses and employee-related and other costs (2) (7.7) Realized gain on investments transferred as part of reinsurance agreement (3) 5.8 Other items 0.7 Pre-tax gain 38.4 Income tax benefit 2.2 Net gain $ 40.6 (1) Reflects $17.2 million of indefinite-lived intangible assets associated with the U.K. motor business upon THG’s purchase of Chaucer in July 2011 and $0.5 million of goodwill. (2) Transaction costs include legal, actuarial and other professional fees. (3) As part of the reinsurance agreement, investments were transferred, resulting in the recognition of net realized investment gains that were previously reflected in accumulated other comprehensive income. |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Investments [Abstract] | |
Schedule of Available-for-sale Securities Reconciliation | DECEMBER 31, 2016 (in millions) Amortized Gross Gross OTTI Cost or Unrealized Unrealized Unrealized Cost Gains Losses Fair Value Losses Fixed maturities: U.S. Treasury and government agencies $ 342.5 $ 3.7 $ 5.1 $ 341.1 $ - Foreign government 235.8 5.4 0.5 240.7 - Municipal 1,065.8 38.8 9.2 1,095.4 - Corporate 3,989.8 113.0 49.0 4,053.8 15.8 Residential mortgage-backed 978.2 9.6 13.6 974.2 0.4 Commercial mortgage-backed 550.6 7.8 4.1 554.3 - Asset-backed 72.4 0.2 0.8 71.8 - Total fixed maturities $ 7,235.1 $ 178.5 $ 82.3 $ 7,331.3 $ 16.2 Equity securities $ 498.4 $ 86.7 $ 0.7 $ 584.4 $ - DECEMBER 31, 2015 (in millions) Amortized Gross Gross OTTI Cost or Unrealized Unrealized Unrealized 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 | DECEMBER 31 2016 (in millions) Amortized Cost Fair Value Due in one year or less $ 373.3 $ 376.9 Due after one year through five years 3,132.1 3,217.4 Due after five years through ten years 1,806.1 1,802.1 Due after ten years 322.4 334.6 5,633.9 5,731.0 Mortgage-backed and asset-backed securities 1,601.2 1,600.3 Total fixed maturities $ 7,235.1 $ 7,331.3 |
Unrealized Gains and Losses on Available-For-Sale and Other Securities | YEARS ENDED DECEMBER 31 (in millions) Equity Fixed Securities and 2016 Maturities Other Total Net appreciation, beginning of year $ 116.5 $ 33.4 $ 149.9 Net appreciation on available-for-sale securities 36.9 39.2 76.1 Change in OTTI losses recognized in other comprehensive income 11.2 - 11.2 Provision for deferred income taxes (37.5) (13.7) (51.2) 10.6 25.5 36.1 Net appreciation, end of year $ 127.1 $ 58.9 $ 186.0 2015 Net appreciation, beginning of year $ 250.0 $ 50.9 $ 300.9 Net depreciation on available-for-sale securities (164.9) (26.8) (191.7) Change in OTTI losses recognized in other comprehensive income (20.0) - (20.0) Provision for deferred income taxes 51.4 9.3 60.7 (133.5) (17.5) (151.0) Net appreciation, end of year $ 116.5 $ 33.4 $ 149.9 2014 Net appreciation, beginning of year $ 212.1 $ 47.2 $ 259.3 Net appreciation on available-for-sale securities 76.3 10.2 86.5 Change in OTTI losses recognized in other comprehensive income 2.4 - 2.4 Provision for deferred income taxes (40.8) (6.5) (47.3) 37.9 3.7 41.6 Net appreciation, end of year $ 250.0 $ 50.9 $ 300.9 |
Schedule of Unrealized Loss on Investments | DECEMBER 31, 2016 12 months or less Greater than 12 months Total (in millions) Gross Gross Gross Unrealized Fair Unrealized Fair Unrealized Fair Losses Value Losses Value Losses Value Fixed maturities: Investment grade: U.S. Treasury and government agencies $ 5.1 $ 165.9 $ - $ - $ 5.1 $ 165.9 Foreign governments 0.5 55.0 - 1.8 0.5 56.8 Municipal 7.2 268.4 2.0 29.3 9.2 297.7 Corporate 30.6 1,081.0 5.0 64.2 35.6 1,145.2 Residential mortgage-backed 12.1 570.0 1.5 29.0 13.6 599.0 Commercial mortgage-backed 4.1 187.5 - 6.3 4.1 193.8 Asset-backed 0.6 29.1 0.2 3.5 0.8 32.6 Total investment grade 60.2 2,356.9 8.7 134.1 68.9 2,491.0 Below investment grade: Corporate 1.2 45.9 12.2 81.8 13.4 127.7 Residential mortgage-backed - 0.1 - - - 0.1 Total below investment grade 1.2 46.0 12.2 81.8 13.4 127.8 Total fixed maturities 61.4 2,402.9 20.9 215.9 82.3 2,618.8 Equity securities 0.7 16.3 - - 0.7 16.3 Total $ 62.1 $ 2,419.2 $ 20.9 $ 215.9 $ 83.0 $ 2,635.1 DECEMBER 31, 2015 12 months or less Greater than 12 months Total (in millions) Gross Gross Gross Unrealized Fair Unrealized Fair Unrealized Fair Losses Value Losses Value Losses Value 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 Other Investments | DECEMBER 31 2016 2015 (in millions) Property Type: Office $ 109.8 $ 75.0 Retail 64.7 58.8 Hotel 40.4 19.2 Apartments 38.4 33.4 Industrial 30.0 15.0 Mixed use 15.0 - Valuation allowance (0.7) (0.5) Total $ 297.6 $ 200.9 DECEMBER 31 2016 2015 (in millions) Geographic Region: South Atlantic $ 72.0 $ 47.0 Pacific 65.0 50.0 Mid-Atlantic 53.5 23.6 West South Central 51.3 35.0 New England 21.1 10.0 East North Central 10.4 10.8 West North Central 10.0 10.0 Other 15.0 15.0 Valuation allowance (0.7) (0.5) Total $ 297.6 $ 200.9 |
Investment Income and Gains a39
Investment Income and Gains and Losses (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Investments [Abstract] | |
Components of Net Investment Income | YEARS ENDED DECEMBER 31 2016 2015 2014 (in millions) Fixed maturities $ 245.1 $ 253.8 $ 255.8 Equity securities 18.6 17.5 16.5 Other investments 26.7 18.1 9.0 Gross investment income 290.4 289.4 281.3 Less investment expenses (11.0) (10.3) (11.0) Net investment income $ 279.4 $ 279.1 $ 270.3 |
Schedule of Net Realized Gains (Losses) on Investments | YEARS ENDED DECEMBER 31 2016 2015 2014 (in millions) Equity securities $ 25.4 $ 29.4 $ 45.8 Fixed maturities (16.6) (13.9) 4.5 Other investments (0.2) 4.0 (0.2) Net realized investment gains $ 8.6 $ 19.5 $ 50.1 |
Rollforward of Cumulative Amounts Related to Credit Loss Portion of OTTI Losses | YEARS ENDED DECEMBER 31 2016 2015 2014 (in millions) Credit losses as of the beginning of the year $ 18.0 $ 4.2 $ 7.8 Credit losses on securities for which an OTTI was not previously recognized 6.4 8.3 - Additional credit losses on securities for which an OTTI was previously recognized 2.4 7.7 - Reductions for securities sold, matured or called (4.6) (1.8) (3.2) Reductions for securities reclassified as intend to sell (12.2) (0.4) (0.4) Credit losses as of the end of the year $ 10.0 $ 18.0 $ 4.2 |
Schedule of Realized Gain (Loss) | YEARS ENDED DECEMBER 31 (in millions) Proceeds Gross Gross 2016 from Sales Gains Losses Fixed maturities $ 563.8 $ 11.7 $ 7.0 Equity securities $ 245.0 $ 31.1 $ 3.0 2015 Fixed maturities $ 1,167.6 $ 15.0 $ 9.3 Equity securities $ 270.0 $ 36.9 $ 4.2 2014 Fixed maturities $ 349.5 $ 5.8 $ 2.6 Equity securities $ 156.1 $ 46.2 $ 0.8 |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value [Abstract] | |
Fair Value of Financial Instruments | DECEMBER 31 2016 2015 (in millions) Carrying Fair Carrying Fair Value Value Value Value Financial Assets Cash and cash equivalents $ 282.6 $ 282.6 $ 338.8 $ 338.8 Fixed maturities 7,331.3 7,331.3 6,983.4 6,983.4 Equity securities 584.4 584.4 576.6 576.6 Other investments 497.8 497.6 365.4 367.9 Total financial assets $ 8,696.1 $ 8,695.9 $ 8,264.2 $ 8,266.7 Financial Liabilities Debt $ 786.4 $ 841.9 $ 803.1 $ 927.8 |
Fair Value, Assets Measured on Recurring Basis | DECEMBER 31, 2016 (in millions) Total Level 1 Level 2 Level 3 Fixed maturities: U.S. Treasury and government agencies $ 341.1 $ 209.5 $ 131.6 $ - Foreign government 240.7 47.3 193.4 - Municipal 1,095.4 - 1,064.4 31.0 Corporate 4,053.8 - 4,049.6 4.2 Residential mortgage-backed, U.S. agency backed 924.4 - 924.4 - Residential mortgage-backed, non-agency 49.8 - 49.8 - Commercial mortgage-backed 554.3 - 539.3 15.0 Asset backed 71.8 - 71.8 - Total fixed maturities 7,331.3 256.8 7,024.3 50.2 Equity securities 574.6 573.1 - 1.5 Other investments 106.3 - 102.2 4.1 Total investment assets at fair value $ 8,012.2 $ 829.9 $ 7,126.5 $ 55.8 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 | DECEMBER 31, 2016 (in millions) Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 282.6 $ 282.6 $ - $ - Equity securities 9.8 - 9.8 - Other investments 297.2 - - 297.2 Liabilities: Debt $ 841.9 $ - $ 841.9 $ - 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) | YEAR ENDED DECEMBER 31, 2016 Fixed Maturities (in millions) Municipal Corporate Commercial mortgage-backed Asset-backed Total Equity and Other Total Assets Balance at beginning of year $ 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 (losses) 0.1 (0.2) - - (0.1) - (0.1) Included in other comprehensive income - net appreciation (depreciation) on available-for-sale securities 0.6 0.6 (0.2) - 1.0 0.7 1.7 Purchases and sales: Purchases - 0.3 - - 0.3 - 0.3 Sales (2.9) (0.2) (1.8) (0.5) (5.4) - (5.4) Balance at end of year $ 31.0 $ 4.2 $ 15.0 $ - $ 50.2 $ 5.6 $ 55.8 YEAR ENDED DECEMBER 31, 2015 Fixed Maturities (in millions) Municipal Corporate Commercial mortgage-backed Asset-backed Total Equity and Other Total Assets Balance at beginning of year $ 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 losses: Included in other comprehensive income - net depreciation on available-for-sale securities (0.5) (0.8) (1.0) (0.1) (2.4) (0.1) (2.5) Purchases and sales: Purchases 11.2 - - - 11.2 - 11.2 Sales (2.0) (0.5) (3.4) (0.7) (6.6) - (6.6) Balance at end of year $ 34.4 $ 3.7 $ 17.0 $ 0.5 $ 55.6 $ 4.9 $ 60.5 |
Schedule of Additional Information About Significant Unobservable Inputs Used in Fair Valuations of Level 3 | DECEMBER 31, 2016 2015 Valuation Significant Fair Range Fair Range (in millions) Technique Unobservable Inputs Value (Wtd Average) Value (Wtd Average) Fixed maturities: Municipal Discounted Discount for: $ 31.0 $ 34.4 cash flow Small issue size 0.7 - 6.8% ( 3.3% ) 0.6 - 6.8% ( 3.2% ) Credit stress 0.9 - 1.5% ( 1.2% ) 0.9 - 1.5% ( 1.2% ) Above-market coupon 0.3 - 0.5% ( 0.4% ) 0.3 - 1.0% ( 0.4% ) Corporate Discounted Discount for: 4.0 3.7 cash flow Small issue size 2.0 - 2.5% ( 2.1% ) 1.0% ( 1.0% ) Credit stress 1.0% ( 1.0% ) 10.0% ( 10.0% ) Above-market coupon 0.3 - 0.8% ( 0.6% ) 0.3 - 0.8% ( 0.6% ) Commercial Discounted Discount for: 15.0 17.0 mortgage-backed cash flow Small issue size 1.9 - 3.1% ( 2.6% ) 0.5 - 1.0% ( 0.5% ) Above-market coupon 0.5% ( 0.5% ) 0.5% ( 0.5% ) Lease structure 0.3% ( 0.3% ) 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 4.1 18.0% ( 18.0% ) 3.6 18.0% ( 18.0% ) cash flow |
Debt and Credit Arrangements (T
Debt and Credit Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt and Credit Arrangements [Abstract] | |
Schedule of Long-Term Debt | DECEMBER 31 2016 2015 (in millions) Senior debentures maturing April 15, 2026 $ 375.0 $ - Senior debentures maturing October 15, 2025 62.6 74.6 Senior debentures maturing June 15, 2021 - 300.0 Senior debentures maturing March 1, 2020 - 80.0 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 797.3 814.3 Unamortized debt issuance costs (10.9) (11.2) Total $ 786.4 $ 803.1 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes [Abstract] | |
Components of Income Before Income Taxes | YEARS ENDED DECEMBER 31 2016 2015 2014 (in millions) Income before income taxes: U.S. $ 70.8 $ 220.9 $ 185.6 Non-U.S. 121.5 218.5 192.4 $ 192.3 $ 439.4 $ 378.0 |
Components of Income Tax Expense (Benefit) | YEARS ENDED DECEMBER 31 2016 2015 2014 (in millions) Current: U.S. $ 16.8 $ 32.7 $ 4.5 Non-U.S. 35.3 23.1 22.6 Total current 52.1 55.8 27.1 Deferred: U.S. (20.4) 44.0 51.1 Non-U.S. 4.5 8.8 17.5 Total deferred (15.9) 52.8 68.6 Total income tax expense $ 36.2 $ 108.6 $ 95.7 |
Schedule of Effective Income Tax Rate Reconciliation | YEARS ENDED DECEMBER 31 2016 2015 2014 (in millions) Expected income tax expense $ 67.3 $ 153.7 $ 132.3 Tax difference related to investment disposals and maturities (20.7) (13.3) (16.2) Effect of foreign operations (6.6) (7.8) (8.1) Dividend received deduction (3.3) (3.1) (2.6) Tax-exempt interest (1.1) (1.4) (1.7) Foreign tax credits (0.6) (5.6) - Gain on disposal of U.K. motor business exempt from tax - (17.3) - Foreign exchange losses - - (6.9) Change in valuation allowance - - (2.9) Nondeductible expenses 1.4 1.6 1.8 Change in liability for uncertain tax positions - 1.7 - Other, net (0.2) 0.1 - Income tax expense $ 36.2 $ 108.6 $ 95.7 Effective tax rate 18.8 % 24.7 % 25.3 % |
Schedule of Deferred Tax Assets and Liabilities | DECEMBER 31 2016 2015 (in millions) Deferred tax assets: Loss, LAE and unearned premium reserves, net $ 183.9 $ 179.0 Tax credit carryforwards 94.6 70.5 Employee benefit plans 44.4 39.6 Investments, net - 12.4 Other 54.9 53.6 377.8 355.1 Less: Valuation allowance - - 377.8 355.1 Deferred tax liabilities: Deferred acquisition costs 141.0 134.9 Deferred Lloyd's underwriting income 32.7 22.4 Software capitalization 28.9 26.9 Investments, net 27.9 - Other 32.2 33.0 262.7 217.2 Net deferred tax asset $ 115.1 $ 137.9 |
Summary of Income Tax Uncertainties | YEARS ENDED DECEMBER 31 2016 2015 2014 (in millions) Liability at beginning of year, net $ 3.0 $ 1.3 $ 1.4 Additions for tax positions of prior years 0.4 1.7 (0.1) Settlements/subtractions for tax positions of prior years (0.7) - (4.8) Deferred deductions - - 4.8 Liability at end of year, net $ 2.7 $ 3.0 $ 1.3 |
Pension Plans (Tables)
Pension Plans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Retirement Plans [Line Items] | |
Schedule of Weighted Average Assumptions | Weighted average assumptions used to determine pension benefit obligations are as follows: DECEMBER 31 2016 2015 2014 U.S. Discount rate - qualified plan 4.25% 4.88% 4.38% Discount rate - non-qualified plan 4.25% 4.75% 4.25% Cash balance interest crediting rate 3.50% 3.50% 3.50% Chaucer Discount rate 2.85% 3.85% 3.75% Rate of increase in future compensation (1) 3.15% 3.10% 3.00% (1) The salary increase assumption as of December 31, 2016 is used to calculate the curtailment gain that resulted from the cessation of future salary increases. The Company utilizes a measurement date of January 1 st to determine its periodic pension costs. Weighted average assumptions used to determine net periodic pension costs for the defined benefit plans are as follows: YEARS ENDED DECEMBER 31 2016 2015 2014 U.S. Qualified plan Discount rate 4.88% 4.38% 5.00% Expected return on plan assets 5.25% 5.00% 5.50% Cash balance interest crediting rate 3.50% 3.50% 3.50% Non-qualified plan Discount rate 4.75% 4.25% 5.00% Chaucer Discount rate 3.85% 3.75% 4.50% Rate of increase in future compensation 3.10% 3.00% 3.15% Expected return on plan assets 5.45% 5.45% 6.55% |
Summary of Plan Assets Investment Measured at Fair Value | DECEMBER 31 2016 2015 (in millions) Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Fixed income securities: Fixed maturities $ 53.7 $ 23.0 $ - $ 30.7 $ 42.0 $ 10.3 $ - $ 31.7 Money market funds 7.1 7.1 - - 4.7 4.7 - - Total investments at fair value $ 60.8 $ 30.1 $ - $ 30.7 $ 46.7 $ 15.0 $ - $ 31.7 |
Schedule of Benefit Obligations, Plan Assets and Funded Status of Plans | DECEMBER 31 U.S. Qualified Pension Plan U.S. Non-Qualified Pension Plan Chaucer Pension Plan (in millions) 2016 2015 2016 2015 2016 2015 Accumulated benefit obligation $ 506.8 $ 500.5 $ 38.0 $ 37.8 $ 132.2 $ 126.0 Change in benefit obligation: Projected benefit obligation, beginning of period 500.5 538.5 37.8 40.6 128.3 137.5 Employee contributions - - - - 0.2 0.3 Service cost - benefits earned during the period - - - - 0.8 1.1 Interest cost 23.2 22.5 1.7 1.7 4.5 5.1 Actuarial losses (gains) 29.4 (23.3) 1.7 (1.3) 25.9 (0.7) Benefits paid (46.3) (37.2) (3.2) (3.2) (1.8) (5.8) Curtailment gain - - - - (2.4) (1.8) Foreign currency translation - - - - (23.3) (7.4) Projected benefit obligation, end of year 506.8 500.5 38.0 37.8 132.2 128.3 Change in plan assets: Fair value of plan assets, beginning of period 472.8 513.4 - - 123.5 131.8 Actual return on plan assets 26.8 (3.4) - - 15.4 3.3 Contributions - - 3.2 3.2 0.8 1.3 Benefits paid (46.3) (37.2) (3.2) (3.2) (1.8) (5.8) Foreign currency translation - - - - (21.4) (7.1) Fair value of plan assets, end of year 453.3 472.8 - - 116.5 123.5 Funded status of the plans $ (53.5) $ (27.7) $ (38.0) $ (37.8) $ (15.7) $ (4.8) |
Components of Net Periodic Pension Cost | YEARS ENDED DECEMBER 31 2016 2015 2014 (in millions) Service cost - benefits earned during the period $ 0.7 $ 1.1 $ 1.5 Interest cost 29.5 29.3 33.7 Expected return on plan assets (29.6) (31.6) (36.6) Recognized net actuarial loss 13.5 13.9 11.7 Amortization of prior service cost - - 0.1 Settlement loss - - 12.1 Curtailment gain (2.4) (1.8) - Net periodic pension cost $ 11.7 $ 10.9 $ 22.5 |
Accumulated Other Comprehensive (Income) Loss Related to Postretirement Benefit Plans | DECEMBER 31 2016 2015 (in millions) Net actuarial loss $ 150.4 $ 119.4 |
Summary of Estimated Amount Amortized From Accumulated Other Comprehensive Income (Loss) Into Net Periodic Pension Cost | ESTIMATED AMORTIZATION IN 2017 Expense (in millions) Net actuarial loss $ 15.8 |
Schedule of Expected Benefit Payments | YEARS ENDED DECEMBER 31 2017 2018 2019 2020 2021 2022-2026 (in millions) U.S. qualified pension plan $ 38.8 $ 37.7 $ 37.6 $ 37.4 $ 37.5 $ 174.9 U.S. non-qualified pension plan $ 3.2 $ 3.1 $ 3.0 $ 3.1 $ 2.9 $ 13.5 Chaucer pension plan $ 1.6 $ 1.7 $ 1.8 $ 1.8 $ 1.9 $ 10.8 |
U.S. Qualified Defined Benefit Plans [Member] | |
Retirement Plans [Line Items] | |
Summary of Target Allocations and Invested Asset Allocations | DECEMBER 31 2016 TARGET LEVELS 2016 2015 Fixed income securities: Fixed maturities 83% 83% 84% Money market funds 2% 2% 1% Total fixed income securities 85% 85% 85% Equity securities: Domestic 12% 12% 12% International 3% 3% 3% Total equity securities 15% 15% 15% Total plan assets 100% 100% 100% |
Summary of Assets Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs | YEAR ENDED DECEMBER 31 2016 (in millions) Balance at beginning of period $ 31.7 Actual return on plan assets related to assets still held (1.0) Balance at end of year $ 30.7 |
Chaucer Pension Plan [Member] | |
Retirement Plans [Line Items] | |
Summary of Target Allocations and Invested Asset Allocations | DECEMBER 31 2016 TARGET LEVELS 2016 2015 Fixed income securities: Fixed maturities 30% 34% 32% Equity securities: Domestic (United Kingdom) 15% 14% 14% International 45% 41% 42% Total equity securities 60% 55% 56% Real estate funds 10% 11% 12% Total plan assets 100% 100% 100% |
Schedule of Fair Values of Investments | DECEMBER 31 2016 2015 (in millions) Cash and equivalents $ 0.3 $ 0.6 Fixed income securities: Fixed maturities 39.4 38.7 Equity securities: Domestic (United Kingdom) 16.0 17.0 International 48.0 52.4 Total equity securities 64.0 69.4 Real estate funds 12.8 14.8 Total investments carried at NAV $ 116.5 $ 123.5 |
Investments Net Asset Value [Member] | |
Retirement Plans [Line Items] | |
Schedule of Fair Values of Investments | DECEMBER 31 2016 2015 Fixed maturities $ 322.4 $ 355.6 Equity securities: Domestic 53.9 54.6 International 16.2 15.9 Total equity 70.1 70.5 Total investments carried at NAV $ 392.5 $ 426.1 |
Other Postretirement Benefit 44
Other Postretirement Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Schedule of Benefit Obligations, Plan Assets and Funded Status of Plans | DECEMBER 31 U.S. Qualified Pension Plan U.S. Non-Qualified Pension Plan Chaucer Pension Plan (in millions) 2016 2015 2016 2015 2016 2015 Accumulated benefit obligation $ 506.8 $ 500.5 $ 38.0 $ 37.8 $ 132.2 $ 126.0 Change in benefit obligation: Projected benefit obligation, beginning of period 500.5 538.5 37.8 40.6 128.3 137.5 Employee contributions - - - - 0.2 0.3 Service cost - benefits earned during the period - - - - 0.8 1.1 Interest cost 23.2 22.5 1.7 1.7 4.5 5.1 Actuarial losses (gains) 29.4 (23.3) 1.7 (1.3) 25.9 (0.7) Benefits paid (46.3) (37.2) (3.2) (3.2) (1.8) (5.8) Curtailment gain - - - - (2.4) (1.8) Foreign currency translation - - - - (23.3) (7.4) Projected benefit obligation, end of year 506.8 500.5 38.0 37.8 132.2 128.3 Change in plan assets: Fair value of plan assets, beginning of period 472.8 513.4 - - 123.5 131.8 Actual return on plan assets 26.8 (3.4) - - 15.4 3.3 Contributions - - 3.2 3.2 0.8 1.3 Benefits paid (46.3) (37.2) (3.2) (3.2) (1.8) (5.8) Foreign currency translation - - - - (21.4) (7.1) Fair value of plan assets, end of year 453.3 472.8 - - 116.5 123.5 Funded status of the plans $ (53.5) $ (27.7) $ (38.0) $ (37.8) $ (15.7) $ (4.8) |
Schedule of Expected Benefit Payments | YEARS ENDED DECEMBER 31 2017 2018 2019 2020 2021 2022-2026 (in millions) U.S. qualified pension plan $ 38.8 $ 37.7 $ 37.6 $ 37.4 $ 37.5 $ 174.9 U.S. non-qualified pension plan $ 3.2 $ 3.1 $ 3.0 $ 3.1 $ 2.9 $ 13.5 Chaucer pension plan $ 1.6 $ 1.7 $ 1.8 $ 1.8 $ 1.9 $ 10.8 |
Components of Net Periodic Pension Cost | YEARS ENDED DECEMBER 31 2016 2015 2014 (in millions) Service cost - benefits earned during the period $ 0.7 $ 1.1 $ 1.5 Interest cost 29.5 29.3 33.7 Expected return on plan assets (29.6) (31.6) (36.6) Recognized net actuarial loss 13.5 13.9 11.7 Amortization of prior service cost - - 0.1 Settlement loss - - 12.1 Curtailment gain (2.4) (1.8) - Net periodic pension cost $ 11.7 $ 10.9 $ 22.5 |
Accumulated Other Comprehensive (Income) Loss Related to Postretirement Benefit Plans | DECEMBER 31 2016 2015 (in millions) Net actuarial loss $ 150.4 $ 119.4 |
Summary of Estimated Amount Amortized From Accumulated Other Comprehensive Income (Loss) Into Net Periodic Pension Cost | ESTIMATED AMORTIZATION IN 2017 Expense (in millions) Net actuarial loss $ 15.8 |
Postretirement Plans | |
Schedule of Benefit Obligations, Plan Assets and Funded Status of Plans | DECEMBER 31 2016 2015 (in millions) Change in benefit obligation: Accumulated postretirement benefit obligation, beginning of year $ 12.1 $ 17.0 Interest cost 0.5 0.5 Net actuarial loss 1.0 0.1 Benefits paid (2.0) (2.5) Plan amendment - (3.0) Accumulated postretirement benefit obligation, end of year 11.6 12.1 Fair value of plan assets, end of year - - Funded status of plans $ (11.6) $ (12.1) |
Schedule of Expected Benefit Payments | YEARS ENDING DECEMBER 31 (in millions) 2017 $ 1.4 2018 1.3 2019 1.2 2020 1.1 2021 1.0 2022 - 2026 4.1 |
Components of Net Periodic Pension Cost | YEARS ENDED DECEMBER 31 2016 2015 2014 (in millions) Service cost $ - $ - $ 0.1 Interest cost 0.5 0.5 0.8 Recognized net actuarial loss 0.2 0.2 0.1 Amortization of prior service cost (benefit) (1.4) (1.4) (1.9) Net periodic postretirement benefit $ (0.7) $ (0.7) $ (0.9) |
Accumulated Other Comprehensive (Income) Loss Related to Postretirement Benefit Plans | DECEMBER 31 2016 2015 (in millions) Net actuarial loss $ 4.1 $ 3.3 Net prior service cost (1.8) (3.3) $ 2.3 $ - |
Summary of Estimated Amount Amortized From Accumulated Other Comprehensive Income (Loss) Into Net Periodic Pension Cost | Estimated Amortization in 2017 Expense (Benefit) (in millions) Net actuarial loss $ 0.2 Net prior service cost (1.4) $ (1.2) |
Summary of Weighted-Average Assumptions Used to Determine Pension Benefit Obligations | YEARS ENDED DECEMBER 31 2016 2015 Postretirement benefit obligations discount rate 4.13% 4.63% Postretirement benefit cost discount rate 4.63% 4.38% |
Assumed Health Care Cost Trend Rates | DECEMBER 31 2016 2015 Health care cost trend rate assumed for next year 6.50% 7.00% Rate to which the cost trend is assumed to decline (ultimate trend rate) 4.50% 5.00% Year the rate reaches the ultimate trend rate 2024 2020 |
Other Comprehensive Income (Tab
Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Changes in Other Comprehensive Income | YEARS ENDED DECEMBER 31 2016 2015 2014 Tax Tax Tax Benefit Net of Benefit Net of Benefit Net of (in millions) Pre-Tax (Expense) Tax Pre-Tax (Expense) Tax Pre-Tax (Expense) Tax Unrealized gains (losses) on available-for-sale securities: Unrealized gains (losses) arising during period (net of pre-tax, ceded unrealized gains of $0.8 million for the year ended December 31, 2014) $ 95.9 $ (33.4) $ 62.5 $ (199.3) $ 69.5 $ (129.8) $ 138.7 $ (45.7) $ 93.0 Amount of realized gains from sales and other (36.5) (8.0) (44.5) (39.6) 0.7 (38.9) (55.3) 0.3 (55.0) Portion of other-than- temporary impairment losses recognized in earnings 27.9 (9.8) 18.1 27.2 (9.5) 17.7 5.5 (1.9) 3.6 Net unrealized gains (losses) 87.3 (51.2) 36.1 (211.7) 60.7 (151.0) 88.9 (47.3) 41.6 Pension and postretirement benefits: Net (loss) gain arising in the period from net actuarial (losses) gains and prior service costs (43.1) 12.8 (30.3) (3.5) 0.7 (2.8) (33.6) 11.0 (22.6) Loss on settlement of pension obligation - - - - - - 12.1 (4.2) 7.9 Amortization of net actuarial loss and prior service cost recognized as net periodic benefit cost 9.9 (3.5) 6.4 12.7 (4.2) 8.5 10.0 (3.5) 6.5 Cumulative foreign currency translation adjustment: Foreign currency translation recognized during the period (5.1) 1.8 (3.3) (11.1) 3.9 (7.2) (7.1) 2.5 (4.6) Other comprehensive income (loss) $ 49.0 $ (40.1) $ 8.9 $ (213.6) $ 61.1 $ (152.5) $ 70.3 $ (41.5) $ 28.8 |
Reclassifications Out of Accumulated Other Comprehensive Income | YEARS ENDED DECEMBER 31 2016 2015 2014 (in millions) Amount Reclassified from Details about Accumulated Other Accumulated Affected Line Item in the Statement Comprehensive Income Components Other Comprehensive Income Where Net Income is Presented Unrealized gains (losses) on available-for- sale securities $ 36.4 $ 39.9 $ 55.2 Net realized gains from sales and other Net other-than-temporary impairment losses (27.9) (26.8) (5.5) on investments recognized in earnings 8.5 13.1 49.7 Total before tax 17.8 8.7 1.6 Tax benefit 26.3 21.8 51.3 (0.1) (0.6) 0.1 Other, net of tax 26.2 21.2 51.4 Net of tax Amortization of defined benefit pension Loss adjustment expenses and other and postretirement plans (9.9) (12.7) (22.1) operating expenses 3.5 4.2 7.7 Tax benefit (6.4) (8.5) (14.4) Net of tax Total reclassifications for the period $ 19.8 $ 12.7 $ 37.0 Net of tax |
Stock-based Compensation Plans
Stock-based Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Stock-based Compensation Plans [Abstract] | |
Summary of Stock Option Plan Activity | YEARS ENDED DECEMBER 31 2016 2015 2014 (in whole shares and dollars) Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Outstanding, beginning of year 1,619,948 $ 56.57 2,236,620 $ 46.61 2,049,173 $ 41.18 Granted 587,340 82.17 663,900 70.34 687,700 58.06 Exercised (589,666) 48.99 (1,051,664) 44.47 (444,200) 39.33 Forfeited or cancelled (1) (221,470) 68.61 (228,908) 54.78 (56,053) 45.99 Outstanding, end of year (1) 1,396,152 $ 68.63 1,619,948 $ 56.57 2,236,620 $ 46.61 Exercisable, end of year 441,256 $ 53.59 360,585 $ 46.10 726,321 $ 43.55 Included in outstanding shares at the end of 2015 in this table and in subsequent metrics were 128,334 options that were previously granted to the Company’s former CEO. These options were subsequently forfeited in 2016 and are included in the table in the amounts forfeited or cancelled in 2016. |
Schedule of Stock Options by Exercise Price Range | Options Outstanding Options Currently Exercisable Range of Exercise Prices Number Weighted Average Remaining Contractual Lives Weighted Average Exercise Price Number Weighted Average Exercise Price $ 34.19 to $46.47 188,603 5.15 $ 40.64 188,603 $ 40.64 $ 57.99 to $62.57 269,907 7.15 58.05 145,994 58.06 $ 69.09 to $73.30 381,182 8.17 70.30 105,910 70.30 $ 74.88 to $90.42 556,460 9.38 82.11 749 79.54 |
Schedule of Stock Option Valuation Assumptions | 2016 2015 2014 Dividend yield 2.04% to 2.46 % 2.03% to 2.37 % 2.07% to 2.55 % Expected volatility 18.08% to 21.31 % 17.63% to 22.24 % 18.07% to 24.38 % Weighted average expected volatility 19.57 % 20.19 % 23.00 % Risk-free interest rate 0.77% to 1.97 % 0.70% to 1.75 % 0.53% - 1.92 % Expected term, in years 2.5 to 5.5 2.5 to 5.5 2.5 to 5.5 |
Summary of Restricted Stock Activity | YEARS ENDED DECEMBER 31 2016 2015 2014 Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Time-based restricted stock units: Outstanding, beginning of year 301,897 $ 54.54 384,923 $ 45.63 525,980 $ 41.20 Granted 143,107 83.43 93,631 70.75 102,131 58.78 Vested (139,183) 42.97 (138,307) 41.22 (231,078) 41.45 Forfeited (36,758) 69.07 (38,350) 52.75 (12,110) 43.67 Outstanding, end of year 269,063 $ 73.91 301,897 $ 54.54 384,923 $ 45.63 Performance and market-based restricted stock units: Outstanding, beginning of year 196,142 $ 47.89 218,338 $ 44.24 184,626 $ 40.42 Granted 126,796 73.42 82,025 48.55 60,338 55.73 Vested (144,141) 40.95 (82,748) 38.99 (22,826) 44.78 Forfeited (1) (63,740) 58.54 (21,473) 47.53 (3,800) 37.90 Outstanding, end of year (1) 115,057 $ 78.82 196,142 $ 47.89 218,338 $ 44.24 Included in outstanding shares at the end of 2015 were 56,500 market-based restricted stock units that were previously granted to the Company’s former CEO. These units were subsequently forfeited in 2016 and are included above in the amounts forfeited in 2016. |
Earnings Per Share and Shareh47
Earnings Per Share and Shareholders' Equity Transactions (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share and Shareholders’ Equity Transactions [Abstract] | |
Information Regarding Basic and Diluted Earnings Per Share | DECEMBER 31 2016 2015 2014 (in millions, except per share data) Basic shares used in the calculation of earnings per share 42.8 43.9 44.0 Dilutive effect of securities: Employee stock options 0.2 0.5 0.5 Non-vested stock grants 0.2 0.4 0.4 Diluted shares used in the calculation of earnings per share 43.2 44.8 44.9 Per share effect of dilutive securities on income from continuing operations $ (0.04) $ (0.14) $ (0.12) Per share effect of dilutive securities on net income $ (0.04) $ (0.15) $ (0.13) |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Information [Abstract] | |
Financial Information with Respect to Business Segments | YEARS ENDED DECEMBER 31 2016 2015 2014 (in millions) Operating revenues: Commercial Lines $ 2,485.0 $ 2,391.7 $ 2,239.0 Personal Lines 1,552.4 1,511.3 1,491.0 Chaucer 891.4 1,104.1 1,279.7 Other 8.4 7.4 7.8 Total 4,937.2 5,014.5 5,017.5 Net realized investment gains 8.6 19.5 50.1 Total revenues $ 4,945.8 $ 5,034.0 $ 5,067.6 Operating income (loss) before interest expense and income taxes: Commercial Lines: Underwriting loss $ (122.0) $ (12.7) $ (8.3) Net investment income 158.5 156.3 149.4 Other expense (0.6) (0.3) (1.2) Commercial Lines operating income 35.9 143.3 139.9 Personal Lines: Underwriting income 103.8 72.0 22.1 Net investment income 69.5 72.5 71.9 Other income 5.1 4.8 5.0 Personal Lines operating income 178.4 149.3 99.0 Chaucer: Underwriting income 80.3 131.5 122.5 Net investment income 45.7 45.9 44.2 Other income 0.8 6.3 10.9 Chaucer operating income 126.8 183.7 177.6 Other: Underwriting loss (10.8) (1.9) (3.1) Net investment income 5.7 4.4 4.8 Other expense (13.2) (12.7) (11.4) Other operating loss (18.3) (10.2) (9.7) Operating income before interest expense and income taxes 322.8 466.1 406.8 Interest on debt (54.9) (60.6) (65.8) Operating income before income taxes 267.9 405.5 341.0 Non-operating income items: Net realized investment gains 8.6 19.5 50.1 Net loss from repayment of debt (88.3) (24.1) (0.1) Net gain on disposal of U.K. motor business 1.1 38.4 - Loss from settlement of pension obligation - - (12.1) Other non-operating items 3.0 0.1 (0.9) Income before income taxes $ 192.3 $ 439.4 $ 378.0 |
Identifiable Assets by Business Segment | DECEMBER 31 2016 2015 (in millions) Identifiable Assets U.S. Companies $ 10,225.4 $ 9,616.0 Chaucer 3,915.5 4,082.2 Discontinued operations 79.5 83.0 Total $ 14,220.4 $ 13,781.2 |
Gross Written Premium by Geographical Area | YEARS ENDED DECEMBER 31 2016 2015 2014 % of Total GPW United States 85% 81% 78% United Kingdom - 4% 6% Worldwide and other 15% 15% 16% Total 100% 100% 100% |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Reinsurance [Abstract] | |
Schedule of Effects of Reinsurance | YEARS ENDED DECEMBER 31 2016 2015 2014 (in millions) Premiums written: Direct $ 4,826.0 $ 4,811.3 $ 4,777.3 Assumed (1) 571.4 633.2 688.1 Ceded (2) (3) (698.6) (827.7) (655.3) Net premiums written $ 4,698.8 $ 4,616.8 $ 4,810.1 Premiums earned: Direct $ 4,746.6 $ 4,814.4 $ 4,679.8 Assumed (1) 601.7 655.6 696.4 Ceded (2) (3) (720.2) (765.2) (665.9) Net premiums earned $ 4,628.1 $ 4,704.8 $ 4,710.3 Percentage of assumed to net premiums earned 13.00 % 13.93 % 14.78 % Losses and LAE: Direct $ 3,188.2 $ 3,008.5 $ 3,019.4 Assumed (1) 289.4 312.4 266.1 Ceded (2) (4) (512.9) (436.8) (358.0) Net losses and LAE $ 2,964.7 $ 2,884.1 $ 2,927.5 (1) Assumed reinsurance activity primarily relates to the Chaucer segment. (2) Effective June 30, 2015, the Company transferred its U.K. motor business through a 100% reinsurance arrangement. This transaction resulted in the increase of approximately $196 million, $133 million and $90 million for ceded premiums written, premiums earned and losses and LAE , respectively, for the year ended December 31, 2015. See also “Disposal of U.K. Motor Business” in Note 2 – “ Dispositions of Businesses” . (3) The decrease in ceded reinsurance premiums from 2015 to 2016 is primarily due to the above mentioned non-recurring U.K. motor activity in 2015, partially offset by a planned increase in Chaucer’s ceded reinsurance premiums as the Company continues to manage its overall underwriting risk. The increase in ceded losses and LAE from 2015 to 2016 is primarily due to the aforementioned increase in Chaucer’s reinsurance purchases in 2016 and due to a higher level of ceded large loss activity in certain Chaucer and domestic lines in 2016. These increases in ceded losses and LAE were partially offset by the above mentioned non-recurring U.K. motor activity in 2015. |
Liabilities For Outstanding C50
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Schedule of Liability for Unpaid Losses and Loss Adjustment Expenses | YEARS ENDED DECEMBER 31 2016 2015 2014 (in millions) Gross loss and LAE reserves, beginning of year $ 6,574.4 $ 6,391.7 $ 6,231.5 Reinsurance recoverable on unpaid losses 2,280.8 1,983.0 2,030.4 Net loss and LAE reserves, beginning of year 4,293.6 4,408.7 4,201.1 Net incurred losses and LAE in respect of losses occurring in: Current year 2,859.3 3,000.2 3,044.9 Prior years 105.4 (116.1) (117.4) Total incurred losses and LAE 2,964.7 2,884.1 2,927.5 Net payments of losses and LAE in respect of losses occurring in: Current year 1,142.7 1,245.6 1,328.7 Prior years 1,367.2 1,418.4 1,398.9 Total payments 2,509.9 2,664.0 2,727.6 Commutation of Chaucer Flagstone reinsurance agreement - - 85.7 Transfer of U.K. motor business - (300.6) - Effect of foreign exchange rate changes (73.8) (34.6) (78.0) Net reserve for losses and LAE, end of year 4,674.6 4,293.6 4,408.7 Reinsurance recoverable on unpaid losses 2,274.8 2,280.8 1,983.0 Gross reserve for losses and LAE, end of year $ 6,949.4 $ 6,574.4 $ 6,391.7 |
Schedule of (Favorable)/Unfavorable Loss and LAE Reserve Development | YEARS ENDED DECEMBER 31 2016 2015 2014 (in millions) Commercial multiple peril $ 68.8 $ 11.6 $ (2.5) Workers’ compensation (46.7) (46.9) (5.6) Commercial automobile 27.5 23.3 15.1 Other commercial lines: AIX program business 75.1 74.7 10.9 General liability 56.0 14.3 2.3 Surety 35.3 1.5 (5.2) Umbrella (8.9) (17.8) (1.4) Other lines 12.2 (13.5) 0.5 Total other commercial lines 169.7 59.2 7.1 Total Commercial Lines Segment 219.3 47.2 14.1 Personal automobile 4.8 (7.2) (5.9) Homeowners and other personal lines 5.8 (3.4) 0.8 Total Personal Lines Segment 10.6 (10.6) (5.1) Total Chaucer Segment (132.8) (153.0) (127.8) Total Other Segment 8.3 0.3 1.4 Total loss and LAE reserve development, including catastrophes $ 105.4 $ (116.1) $ (117.4) |
Schedule of Carried Reserves | YEAR ENDED DECEMBER 31, 2016 2015 (in millions) Gross Ceded Net Gross Ceded Net Commercial multiple peril $ 978.0 $ (82.1) $ 895.9 $ 813.1 $ (59.2) $ 753.9 Workers’ compensation 715.5 (171.4) 544.1 713.1 (178.0) 535.1 Commercial automobile liability 431.7 (27.2) 404.5 390.3 (28.4) 361.9 Other lines 980.8 (195.6) 785.2 757.7 (159.2) 598.5 Total Commercial Lines and other 3,106.0 (476.3) 2,629.7 2,674.2 (424.8) 2,249.4 Personal automobile liability 1,416.8 (865.6) 551.2 1,395.0 (863.5) 531.5 Homeowners and other personal lines 137.2 (7.3) 129.9 132.7 (7.0) 125.7 Total Personal Lines 1,554.0 (872.9) 681.1 1,527.7 (870.5) 657.2 Chaucer core lines 1,832.4 (552.5) 1,279.9 1,767.6 (508.5) 1,259.1 Chaucer reinsured and run-off lines 457.0 (373.1) 83.9 604.9 (477.0) 127.9 Total Chaucer 2,289.4 (925.6) 1,363.8 2,372.5 (985.5) 1,387.0 Total loss and LAE reserves $ 6,949.4 $ (2,274.8) $ 4,674.6 $ 6,574.4 $ (2,280.8) $ 4,293.6 |
Schedule of Incurred Claims Development | Commercial multiple peril (in millions) As of Incurred Losses and ALAE, Net of Reinsurance December 31, 2016 YEARS ENDED DECEMBER 31, Cumulative Incurred Accident 2011 2012 2013 2014 2015 Claim Year Unaudited Unaudited Unaudited Unaudited Unaudited 2016 IBNR Count 2011 $ 455.4 $ 453.3 $ 469.1 $ 478.8 $ 494.7 $ 505.4 $ 17.2 19,163 2012 480.0 462.8 456.2 459.7 475.6 20.5 17,054 2013 380.0 362.5 367.9 391.8 33.9 14,911 2014 443.9 439.6 464.8 62.9 16,102 2015 446.0 456.3 100.1 15,810 2016 447.1 181.7 15,512 Total $ 2,741.0 Cumulative Paid Losses and ALAE, Net of Reinsurance YEARS ENDED DECEMBER 31, Accident 2011 2012 2013 2014 2015 Year Unaudited Unaudited Unaudited Unaudited Unaudited 2016 2011 $ 217.8 $ 328.5 $ 381.5 $ 418.6 $ 454.0 $ 471.5 2012 175.8 307.5 350.8 389.3 424.2 2013 137.6 221.5 262.3 306.4 2014 171.7 267.8 316.0 2015 161.9 260.1 2016 140.3 Total $ 1,918.5 Total reserves for 2011 – 2016 accident years (incurred - paid) 822.5 Total reserves for 2010 and prior accident years 55.7 Unallocated loss adjustment expense 17.7 Net reserves at December 31, 2016 $ 895.9 Workers' compensation (in millions) As of Incurred Losses and ALAE, Net of Reinsurance December 31, 2016 YEARS ENDED DECEMBER 31, Cumulative Incurred Accident 2007 2008 2009 2010 2011 2012 2013 2014 2015 Claim Year Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited 2016 IBNR Count 2007 (1) $ 79.2 $ 82.2 $ 80.5 $ 78.6 $ 77.3 $ 76.5 $ 75.6 $ 75.8 $ 75.1 $ 74.9 $ 1.3 7,591 2008 (1) 88.9 93.9 88.0 81.5 81.5 80.6 79.8 80.5 80.4 1.6 8,930 2009 93.8 87.6 82.5 80.3 79.4 79.2 77.5 77.5 1.2 8,014 2010 115.5 116.9 115.8 115.9 116.3 114.9 114.7 2.6 10,152 2011 141.4 144.2 144.3 145.5 143.8 146.7 7.5 12,428 2012 176.3 171.1 165.2 157.2 162.9 12.6 12,983 2013 179.3 167.4 160.1 154.4 15.6 11,612 2014 182.1 172.9 154.7 22.3 10,748 2015 189.6 164.2 38.2 11,158 2016 189.6 75.1 14,103 Total $ 1,320.0 Cumulative Paid Losses and ALAE, Net of Reinsurance YEARS ENDED DECEMBER 31, Accident 2007 2008 2009 2010 2011 2012 2013 2014 2015 Year Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited 2016 2007 (1) $ 15.1 $ 34.9 $ 46.5 $ 54.4 $ 59.6 $ 62.0 $ 63.9 $ 65.5 $ 66.5 $ 67.3 2008 (1) 17.9 40.2 52.9 60.8 64.8 67.1 69.8 71.0 72.4 2009 19.2 41.2 54.6 61.6 65.4 68.6 69.8 70.8 2010 22.1 57.2 76.9 89.5 96.5 101.0 104.2 2011 30.0 71.3 97.3 114.0 122.9 128.0 2012 30.4 74.8 102.6 120.1 130.7 2013 30.9 74.6 101.2 114.0 2014 30.6 70.5 92.3 2015 28.0 65.7 2016 33.9 Total $ 879.3 Total reserves for 2007 – 2016 accident years (incurred - paid) 440.7 Total reserves for 2006 and prior accident years 87.5 Unallocated loss adjustment expense and other 15.9 Net reserves at December 31, 2016 $ 544.1 (1) The incurred and cumulative paid losses and ALAE, IBNR and incurred claim counts retroactively include AIX business for all periods presented, including those periods that pre-date the acquisition of AIX on November 30, 2008. Commercial automobile liability (in millions) As of Incurred Losses and ALAE, Net of Reinsurance December 31, 2016 YEARS ENDED DECEMBER 31, Cumulative Incurred Accident 2011 2012 2013 2014 2015 Claim Year Unaudited Unaudited Unaudited Unaudited Unaudited 2016 IBNR Count 2011 $ 120.4 $ 142.1 $ 148.0 $ 162.8 $ 177.0 $ 179.6 $ 2.4 15,457 2012 166.8 167.5 173.7 189.9 198.0 5.7 14,786 2013 177.7 179.4 205.3 227.5 16.7 15,309 2014 168.5 163.3 177.3 28.7 13,464 2015 163.4 168.3 51.0 12,723 2016 157.0 87.6 10,748 Total $ 1,107.7 Cumulative Paid Losses and ALAE, Net of Reinsurance YEARS ENDED DECEMBER 31, Accident 2011 2012 2013 2014 2015 Year Unaudited Unaudited Unaudited Unaudited Unaudited 2016 2011 $ 27.7 $ 64.7 $ 102.4 $ 135.5 $ 160.5 $ 170.2 2012 33.3 77.0 117.0 156.9 176.3 2013 35.9 89.6 137.6 176.3 2014 33.1 70.8 102.7 2015 32.2 63.8 2016 27.8 Total $ 717.1 Total reserves for 2011 – 2016 accident years (incurred - paid) 390.6 Total reserves for 2010 and prior accident years 9.6 Unallocated loss adjustment expense 4.3 Net reserves at December 31, 2016 $ 404.5 Personal automobile liability (in millions) As of Incurred Losses and ALAE, Net of Reinsurance December 31, 2016 YEARS ENDED DECEMBER 31, Cumulative Incurred Accident 2012 2013 2014 2015 Claim Year Unaudited Unaudited Unaudited Unaudited 2016 IBNR Count 2012 $ 358.4 $ 366.9 $ 366.3 $ 376.5 $ 379.8 $ 5.7 51,700 2013 348.2 339.6 338.3 343.0 6.5 49,278 2014 323.1 304.1 308.8 15.1 43,268 2015 327.4 334.1 40.5 41,989 2016 337.9 109.7 39,477 Total $ 1,703.6 Cumulative Paid Losses and ALAE, Net of Reinsurance YEARS ENDED DECEMBER 31, Accident 2012 2013 2014 2015 Year Unaudited Unaudited Unaudited Unaudited 2016 2012 $ 126.6 $ 234.6 $ 305.1 $ 342.2 $ 361.8 2013 115.3 210.5 273.3 310.1 2014 107.2 188.6 241.1 2015 112.9 205.4 2016 112.8 Total $ 1,231.2 Total reserves for 2012 – 2016 accident years (incurred - paid) 472.4 Total reserves for 2011 and prior accident years 66.5 Unallocated loss adjustment expense 12.3 Net reserves at December 31, 2016 $ 551.2 Chaucer core lines (in millions) As of Incurred Losses and ALAE, Net of Reinsurance (1) December 31, 2016 YEARS ENDED DECEMBER 31, Cumulative Incurred Accident 2011 2012 2013 2014 2015 Claim Year Unaudited Unaudited Unaudited Unaudited Unaudited 2016 IBNR Count 2011 (2) $ 640.9 $ 597.7 $ 605.3 $ 586.0 $ 586.2 $ 575.7 $ 33.4 6,940 2012 420.5 337.2 342.4 325.0 318.0 31.5 5,690 2013 418.2 381.8 369.4 360.1 54.0 5,618 2014 457.7 391.6 397.1 80.4 6,934 2015 488.4 410.5 136.8 7,216 2016 505.2 329.9 4,404 Total $ 2,566.6 Cumulative Paid Losses and ALAE, Net of Reinsurance (1) YEARS ENDED DECEMBER 31, Accident 2011 2012 2013 2014 2015 Year Unaudited Unaudited Unaudited Unaudited Unaudited 2016 2011 (2) $ 134.2 $ 296.3 $ 391.0 $ 438.6 $ 489.3 $ 513.2 2012 55.4 144.7 200.0 228.7 246.7 2013 58.2 158.4 228.4 257.5 2014 52.0 162.2 227.8 2015 52.5 146.8 2016 79.1 Total $ 1,471.1 Total reserves for 2011 – 2016 accident years (incurred - paid) 1,095.5 Total reserves for 2010 and prior accident years 129.5 Reserves for nuclear energy classes 31.8 Unallocated loss adjustment expense and other 23.1 Net reserves at December 31, 2016 $ 1,279.9 (1) Chaucer incurred losses and ALAE and paid losses and ALAE that are denominated in foreign currencies are converted to U.S. dollars as of December 31, 2016, the most recent balance sheet date, for all years presented. (2) The incurred and cumulative paid losses and ALAE, IBNR and reported claim counts retroactively includes the 6 month period that pre-dates the acquisition of Chaucer on July 1, 2011. Additionally, during 2011 Chaucer experienced an elevated level of high severity catastrophe events. For example, three such events, the February 2011 New Zealand earthquake, March 2011 Japanese tsunami and October 2011 Thailand floods totaled approximately $125 million of incurred losses , and each event was in excess of $30 million. Chaucer experienced no catastrophe events in excess of $30 million from 2012 through 2016. |
Computation of Historical Claims on Paid and Incurred Claims Data, Net of Reinsurance | Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance: Unaudited 1 2 3 4 5 6 7 8 9 10 Commercial multiple peril 36.5% 22.6% 10.1% 8.9% 7.2% 3.5% Workers' compensation 20.0% 27.3% 16.5% 10.1% 5.9% 3.5% 2.6% 1.6% 1.6% 1.0% Commercial automobile liability 17.3% 21.3% 20.1% 18.5% 11.9% 5.4% Personal automobile liability 33.8% 27.6% 17.9% 10.3% 5.2% Chaucer core lines 16.4% 27.0% 17.5% 8.4% 7.2% 4.1% |
U.S. Companies | |
Schedule of (Favorable)/Unfavorable Loss and LAE Reserve Development | (in millions) Commercial multiple peril $ 43.7 Workers’ compensation (32.0) Commercial automobile 18.4 Other commercial lines: AIX program business 49.6 General liability 45.2 Surety 37.9 Umbrella (9.4) Other lines 8.1 Total other commercial lines 131.4 Total Commercial Lines Segment 161.5 Personal automobile 8.2 Homeowners and other personal lines (3.0) Total Personal Lines Segment 5.2 Total Other Segment 7.4 Total domestic business loss and LAE reserve development, excluding catastrophes (1) $ 174.1 For the three months ended Decembe r 31, 2016, prior year reserve development for catastrophes was favorable of $2.0 million for the domestic business . |
Statutory Financial Informati51
Statutory Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Statutory Financial Information [Abstract] | |
Statutory Accounting Practices Disclosure | (in millions) 2016 2015 2014 Statutory Net Income U.S. Insurance Subsidiaries $ 158.0 $ 175.9 $ 204.3 Statutory Capital and Surplus U.S. Insurance Subsidiaries $ 2,173.4 $ 2,192.8 $ 2,057.1 |
Quarterly Results of Operatio52
Quarterly Results of Operations (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Results of Operations [Abstract] | |
Schedule of Quarterly Financial Information | THREE MONTHS ENDED (in millions, except per share data) 2016 March 31 June 30 Sept. 30 Dec. 31 Total revenues $ 1,227.6 $ 1,222.0 $ 1,241.2 $ 1,255.0 Income (loss) from continuing operations $ 78.1 $ 1.9 $ 88.3 $ (12.2) Net income (loss) $ 78.2 $ 2.0 $ 88.4 $ (13.5) Income (loss) from continuing operations per share: Basic $ 1.82 $ 0.04 $ 2.07 $ (0.29) Diluted (1) $ 1.79 $ 0.04 $ 2.06 $ (0.29) Net income (loss) per share: Basic $ 1.82 $ 0.05 $ 2.07 $ (0.32) Diluted (1) $ 1.80 $ 0.05 $ 2.06 $ (0.32) Dividends declared per share $ 0.46 $ 0.46 $ 0.46 $ 0.50 (1) Per diluted share amounts in the fourth quarter exclude commons stock equivalents since the impact of these instruments was antidilutive. In the second quarter of 2016, the Company issued $375 million aggregate principal amount of 4.5% senior unsecured debentures. The net proceeds were used, together with cash on hand, to redeem outstanding senior notes, resulting in a pre-tax loss of $86.1 million. The after-tax effect of this loss was to decrease diluted earnings per share from income from continuing operations in the quarter by $1.29 . See also Note 6 - "Debt and Credit Arrangements" for further information In the fourth quarter of 2016, the Company recorded an adjustment to increase carried reserves for prior accident years by $174.1 million. The after-tax effect of this charge was to decrease diluted earnings per share from income from continuing operations in the quarter by $2.66 . See also "2016 Fourth Quarter Domestic Business Loss and LAE Reserve Increase" in Note 17 - "Liabilities for Outstanding Claims, Losses and Loss Adjustment Expenses" for further information. THREE MONTHS ENDED (in millions, except per share data) 2015 March 31 June 30 Sept. 30 Dec. 31 Total revenues $ 1,298.7 $ 1,297.1 $ 1,233.5 $ 1,204.7 Income from continuing operations $ 54.9 $ 120.9 $ 77.2 $ 77.8 Net income $ 54.9 $ 120.7 $ 78.3 $ 77.6 Income from continuing operations per share: Basic $ 1.24 $ 2.74 $ 1.75 $ 1.80 Diluted $ 1.22 $ 2.69 $ 1.72 $ 1.76 Net income per share: Basic $ 1.24 $ 2.73 $ 1.78 $ 1.79 Diluted $ 1.22 $ 2.68 $ 1.74 $ 1.76 Dividends declared per share $ 0.41 $ 0.41 $ 0.41 $ 0.46 |
Summary Of Significant Accoun53
Summary Of Significant Accounting Policies (Details) - USD ($) | Apr. 01, 2020 | Mar. 31, 2020 | Apr. 01, 2017 | Mar. 31, 2017 | Apr. 01, 2015 | Mar. 31, 2015 | Apr. 01, 2014 | Mar. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Goodwill | $ 184,800,000 | $ 186,000,000 | |||||||||
Impairment recognized | $ 0 | $ 0 | |||||||||
U.S. federal income tax rate | 35.00% | ||||||||||
Current exchange rate between GBP and US dollars | 1.23 | 1.47 | |||||||||
Net foreign currency transaction gains | $ 22,300,000 | $ 8,500,000 | $ 3,300,000 | ||||||||
Euro Denominated Securities [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Net foreign currency transaction gains | 700,000 | 3,400,000 | $ 1,300,000 | ||||||||
Chaucer [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Goodwill | 6,000,000 | 7,200,000 | |||||||||
Intangible assets | $ 47,000,000 | $ 56,200,000 | |||||||||
Company's balance of intangible assets | 76.00% | 74.00% | |||||||||
U.K. [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Non-U.S. jurisdiction income tax rate | 20.00% | 21.00% | 21.00% | 23.00% | |||||||
U.K. [Member] | Scenario, Forecast [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Non-U.S. jurisdiction income tax rate | 19.00% | 20.00% | |||||||||
Minimum [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Property, equipment and leasehold improvements, estimated useful lives | 3 years | ||||||||||
Minimum [Member] | U.K. [Member] | Scenario, Forecast [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Non-U.S. jurisdiction income tax rate | 17.00% | 19.00% | |||||||||
Minimum [Member] | Software [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Property, equipment and leasehold improvements, estimated useful lives | 5 years | ||||||||||
Maximum [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Property, equipment and leasehold improvements, estimated useful lives | 30 years | ||||||||||
Maximum [Member] | U.K. [Member] | Scenario, Forecast [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Non-U.S. jurisdiction income tax rate | 18.00% | 19.00% | |||||||||
Maximum [Member] | Software [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Property, equipment and leasehold improvements, estimated useful lives | 7 years |
Dispositions Of Businesses (Nar
Dispositions Of Businesses (Narrative) (Details) $ in Millions | 6 Months Ended | 12 Months Ended | |||||
Jun. 30, 2015USD ($)entity | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | ||||
Significant Acquisitions and Disposals [Line Items] | |||||||
Reinsurance arrangement | 100.00% | ||||||
Entites sold | entity | 2 | ||||||
Proceeds | $ 64.9 | ||||||
Net gain | 40.6 | ||||||
Insurance liabilities ceded | 443 | ||||||
Written premiums ceded | 137.4 | $ 698.6 | [1],[2] | $ 827.7 | [1],[2] | $ 655.3 | [1],[2] |
Investments, cash, and premiums receivable transferred | 419 | ||||||
DAC balance written off | $ 25 | ||||||
Assets of discontinued operations | 79.5 | 83 | |||||
Liabilities of discontinued operations | 86.2 | 88.4 | |||||
Net (loss) gain from discontinued operations (net of income tax (benefit) expense | (1) | 0.7 | $ (0.3) | ||||
Discontinued Accident And Health Insurance Business [Member] | |||||||
Significant Acquisitions and Disposals [Line Items] | |||||||
Assets of discontinued operations | 57.6 | 54.5 | |||||
Liabilities of discontinued operations | $ 49.3 | $ 46.5 | |||||
[1] | Effective June 30, 2015, the Company transferred its U.K. motor business through a 100% reinsurance arrangement. This transaction resulted in the increase of approximately $196 million, $133 million and $90 million for ceded premiums written, premiums earned and losses and LAE, respectively, for the year ended December 31, 2015. See also "Disposal of U.K. Motor Business" in Note 2 - "Dispositions of Businesses". | ||||||
[2] | The decrease in ceded reinsurance premiums from 2015 to 2016 is primarily due to the above mentioned non-recurring U.K. motor activity in 2015, partially offset by a planned increase in Chaucer's ceded reinsurance premiums as the Company continues to manage its overall underwriting risk. |
Dispositions Of Businesses (Com
Dispositions Of Businesses (Components of Gain From Disposal of U.K. Motor Business) (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Significant Acquisitions and Disposals [Line Items] | ||||
Total consideration | $ 64.9 | |||
Pre-tax gain | $ (1.1) | $ (38.4) | ||
Net gain | 40.6 | |||
Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | ||||
Significant Acquisitions and Disposals [Line Items] | ||||
Total consideration | 64.9 | |||
Carrying value of subsidiaries | (7.6) | |||
Intangibles and goodwill disposed | [1] | (17.7) | ||
Transaction expenses and employee-related and other costs | [2] | (7.7) | ||
Realized gain on investments transferred as part of reinsurance agreement | [3] | 5.8 | ||
Other items | 0.7 | |||
Pre-tax gain | 38.4 | |||
Income tax benefit | 2.2 | |||
Net gain | 40.6 | |||
Indefinite-lived intangible assets | 17.2 | |||
Goodwill | $ 0.5 | |||
[1] | Reflects $17.2 million of indefinite-lived intangible assets associated with the U.K. motor business upon THG's purchase of Chaucer in July 2011 and $0.5 million of goodwill. | |||
[2] | Transaction costs include legal, actuarial and other professional fees. | |||
[3] | As part of the reinsurance agreement, investments were transferred, resulting in the recognition of net realized investment gains that were previously reflected in accumulated other comprehensive income. |
Investments (Narrative) (Detail
Investments (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule of Investments [Line Items] | |||
Net unrealized gains on impaired securities | $ 21,400,000 | $ 1,100,000 | |
Cash collateral maintained | 102.00% | ||
Restricted assets, fixed maturities | $ 491,200,000 | 440,600,000 | |
Restricted assets, cash and cash equivalents | 6,300,000 | 7,000,000 | |
Net appreciation on other invested assets | $ 2,500,000 | 2,200,000 | $ 2,600,000 |
Concentration of investment in a iingle investee, maximum | 10.00% | ||
Contractual investment commitments | $ 128,800,000 | ||
Other investments | 533,800,000 | 393,400,000 | |
Due in one year or less, Amortized Cost | 373,300,000 | ||
Due in year four, Amortized Cost | 3,132,100,000 | ||
Overseas Deposit [Member] | |||
Schedule of Investments [Line Items] | |||
Other investments | 102,200,000 | 100,900,000 | |
Federal Home Loan Mortgage Corp. | |||
Schedule of Investments [Line Items] | |||
Marketable securities, fixed maturities | 542,200,000 | 467,900,000 | |
Federal National Mortgage Association [Member] | |||
Schedule of Investments [Line Items] | |||
Marketable securities, fixed maturities | 298,100,000 | ||
Mortgage Participations [Member] | |||
Schedule of Investments [Line Items] | |||
Restricted assets, fixed maturities at carrying value | 295,900,000 | ||
Security Lending Program | |||
Schedule of Investments [Line Items] | |||
Securities on loan, fair value | 29,900,000 | 36,200,000 | |
U.S. Treasury and government agencies | |||
Schedule of Investments [Line Items] | |||
Securities on loan, fair value | 251,600,000 | 217,400,000 | |
Fixed maturities deposit, amortized cost | 238,500,000 | 206,500,000 | |
Collateralized Borrowings And Other Arrangements | |||
Schedule of Investments [Line Items] | |||
Securities on loan, fair value | 217,900,000 | 188,100,000 | |
Federal Home Loan Bank of Boston | |||
Schedule of Investments [Line Items] | |||
Securities on loan, fair value | 201,800,000 | 176,000,000 | |
Mortgage loans on real estate | |||
Schedule of Investments [Line Items] | |||
Other investments | 297,600,000 | 200,900,000 | |
Due in one year or less, Amortized Cost | 500,000 | ||
Due in year two, Amortized Cost | 0 | ||
Due in year three, Amortized Cost | 0 | ||
Due in year four, Amortized Cost | 10,000,000 | ||
Due in year five, Amortized Cost | 50,000,000 | ||
Due in year six and thereafter, Amortized Cost | 237,100,000 | ||
Limited Partnership [Member] | |||
Schedule of Investments [Line Items] | |||
Other investments | $ 121,300,000 | $ 79,900,000 |
Investments (Schedule of Availa
Investments (Schedule of Available-for-sale Securities Reconciliation) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost or Cost | $ 7,235.1 | $ 6,934 |
Gross Unrealized Gains | 178.5 | 164.3 |
Gross Unrealized Losses | 82.3 | 114.9 |
Fair Value | 7,331.3 | 6,983.4 |
OTTI Unrealized Losses | 16.2 | 27.8 |
U.S. Treasury and government agencies | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost or Cost | 342.5 | 447.1 |
Gross Unrealized Gains | 3.7 | 5.5 |
Gross Unrealized Losses | 5.1 | 3.5 |
Fair Value | 341.1 | 449.1 |
Foreign government | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost or Cost | 235.8 | 244.7 |
Gross Unrealized Gains | 5.4 | 2.6 |
Gross Unrealized Losses | 0.5 | 1.5 |
Fair Value | 240.7 | 245.8 |
Municipal | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost or Cost | 1,065.8 | 1,074.5 |
Gross Unrealized Gains | 38.8 | 50 |
Gross Unrealized Losses | 9.2 | 4.2 |
Fair Value | 1,095.4 | 1,120.3 |
Corporate | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost or Cost | 3,989.8 | 3,699.9 |
Gross Unrealized Gains | 113 | 86.8 |
Gross Unrealized Losses | 49 | 95.7 |
Fair Value | 4,053.8 | 3,691 |
OTTI Unrealized Losses | 15.8 | 27.5 |
Residential mortgage-backed, non-agency | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost or Cost | 978.2 | 887.6 |
Gross Unrealized Gains | 9.6 | 13.4 |
Gross Unrealized Losses | 13.6 | 4.9 |
Fair Value | 974.2 | 896.1 |
OTTI Unrealized Losses | 0.4 | 0.3 |
Commercial mortgage-backed | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost or Cost | 550.6 | 499.6 |
Gross Unrealized Gains | 7.8 | 5.8 |
Gross Unrealized Losses | 4.1 | 4.3 |
Fair Value | 554.3 | 501.1 |
Asset backed | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost or Cost | 72.4 | 80.6 |
Gross Unrealized Gains | 0.2 | 0.2 |
Gross Unrealized Losses | 0.8 | 0.8 |
Fair Value | 71.8 | 80 |
Equity Securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost or Cost | 498.4 | 528.5 |
Gross Unrealized Gains | 86.7 | 55.7 |
Gross Unrealized Losses | 0.7 | 7.6 |
Fair Value | $ 584.4 | $ 576.6 |
Investments (Investments Classi
Investments (Investments Classified by Contractual Maturity Date) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Investments [Abstract] | ||
Due in one year or less, Amortized Cost | $ 373.3 | |
Due after one year through five years, Amortized Cost | 3,132.1 | |
Due after five years through ten years, Amortized Cost | 1,806.1 | |
Due after ten years, Amortized Cost | 322.4 | |
Gross fixed maturities, Amortized Cost | 5,633.9 | |
Mortgage-backed and asset-backed securities, Amortized Cost | 1,601.2 | |
Total fixed maturities, Amortized Cost | 7,235.1 | $ 6,934 |
Due in one year or less, Fair Value | 376.9 | |
Due after one year through five years, Fair Value | 3,217.4 | |
Due after five years through ten years, Fair Value | 1,802.1 | |
Due after ten years, Fair Value | 334.6 | |
Gross fixed maturities, Fair Value | 5,731 | |
Mortgage-backed and asset-backed securities, Fair Value | 1,600.3 | |
Fixed maturities, Fair Value | $ 7,331.3 | $ 6,983.4 |
Investments (Unrealized Gains a
Investments (Unrealized Gains and Losses on Available-For-Sale and Other Securities) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule of Available-for-sale Securities [Line Items] | |||
Net appreciation, beginning of year | $ 2.2 | $ 2.6 | |
Net appreciation, beginning of year | 2.5 | 2.2 | $ 2.6 |
Net Unrealized Appreciation (Depreciation) on Investments: | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Net appreciation, beginning of year | 149.9 | 300.9 | 259.3 |
Net (depreciation) appreciation on available-for-sale securities | 76.1 | (191.7) | 86.5 |
Change in OTTI losses recognized in other comprehensive income | 11.2 | (20) | 2.4 |
Provision for deferred income taxes | (51.2) | 60.7 | (47.3) |
Total adjustment | 36.1 | (151) | 41.6 |
Net appreciation, beginning of year | 186 | 149.9 | 300.9 |
Fixed Maturities | Net Unrealized Appreciation (Depreciation) on Investments: | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Net appreciation, beginning of year | 116.5 | 250 | 212.1 |
Net (depreciation) appreciation on available-for-sale securities | 36.9 | (164.9) | 76.3 |
Change in OTTI losses recognized in other comprehensive income | 11.2 | (20) | 2.4 |
Provision for deferred income taxes | (37.5) | 51.4 | (40.8) |
Total adjustment | 10.6 | (133.5) | 37.9 |
Net appreciation, beginning of year | 127.1 | 116.5 | 250 |
Equity Securities And Other | Net Unrealized Appreciation (Depreciation) on Investments: | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Net appreciation, beginning of year | 33.4 | 50.9 | 47.2 |
Net (depreciation) appreciation on available-for-sale securities | 39.2 | (26.8) | 10.2 |
Provision for deferred income taxes | (13.7) | 9.3 | (6.5) |
Total adjustment | 25.5 | (17.5) | 3.7 |
Net appreciation, beginning of year | $ 58.9 | $ 33.4 | $ 50.9 |
Investments (Schedule of Unreal
Investments (Schedule of Unrealized Loss on Investments) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | $ 62.1 | $ 70.5 |
12 months or less, Fair Value | 2,419.2 | 2,501.1 |
Greater than 12 months, Gross Unrealized Losses | 20.9 | 52 |
Greater than 12 months, Fair Value | 215.9 | 386.6 |
Total, Gross Unrealized Losses | 83 | 122.5 |
Total, Fair Value | 2,635.1 | 2,887.7 |
Investment grade | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 60.2 | 43.3 |
12 months or less, Fair Value | 2,356.9 | 2,168.8 |
Greater than 12 months, Gross Unrealized Losses | 8.7 | 25.5 |
Greater than 12 months, Fair Value | 134.1 | 323.4 |
Total, Gross Unrealized Losses | 68.9 | 68.8 |
Total, Fair Value | 2,491 | 2,492.2 |
Below Investment Grade | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 1.2 | |
12 months or less, Fair Value | 46 | |
Greater than 12 months, Gross Unrealized Losses | 12.2 | |
Greater than 12 months, Fair Value | 81.8 | |
Total, Gross Unrealized Losses | 13.4 | |
Total, Fair Value | 127.8 | |
Debt Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 61.4 | 62.9 |
12 months or less, Fair Value | 2,402.9 | 2,334.3 |
Greater than 12 months, Gross Unrealized Losses | 20.9 | 52 |
Greater than 12 months, Fair Value | 215.9 | 386.6 |
Total, Gross Unrealized Losses | 82.3 | 114.9 |
Total, Fair Value | 2,618.8 | 2,720.9 |
U.S. Treasury and government agencies | Investment grade | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 5.1 | 1.5 |
12 months or less, Fair Value | 165.9 | 139 |
Greater than 12 months, Gross Unrealized Losses | 2 | |
Greater than 12 months, Fair Value | 77.2 | |
Total, Gross Unrealized Losses | 5.1 | 3.5 |
Total, Fair Value | 165.9 | 216.2 |
Foreign government | Investment grade | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 0.5 | 0.8 |
12 months or less, Fair Value | 55 | 63.6 |
Greater than 12 months, Gross Unrealized Losses | 0.7 | |
Greater than 12 months, Fair Value | 1.8 | 8.4 |
Total, Gross Unrealized Losses | 0.5 | 1.5 |
Total, Fair Value | 56.8 | 72 |
Municipal | Investment grade | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 7.2 | 2.3 |
12 months or less, Fair Value | 268.4 | 143 |
Greater than 12 months, Gross Unrealized Losses | 2 | 1.9 |
Greater than 12 months, Fair Value | 29.3 | 57.4 |
Total, Gross Unrealized Losses | 9.2 | 4.2 |
Total, Fair Value | 297.7 | 200.4 |
Corporate | Investment grade | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 30.6 | 30.7 |
12 months or less, Fair Value | 1,081 | 1,138.3 |
Greater than 12 months, Gross Unrealized Losses | 5 | 18.9 |
Greater than 12 months, Fair Value | 64.2 | 122.3 |
Total, Gross Unrealized Losses | 35.6 | 49.6 |
Total, Fair Value | 1,145.2 | 1,260.6 |
Corporate | Below Investment Grade | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 1.2 | 19.6 |
12 months or less, Fair Value | 45.9 | 165.5 |
Greater than 12 months, Gross Unrealized Losses | 12.2 | 26.5 |
Greater than 12 months, Fair Value | 81.8 | 63.2 |
Total, Gross Unrealized Losses | 13.4 | 46.1 |
Total, Fair Value | 127.7 | 228.7 |
Residential mortgage-backed, non-agency | Investment grade | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 12.1 | 3 |
12 months or less, Fair Value | 570 | 334.5 |
Greater than 12 months, Gross Unrealized Losses | 1.5 | 1.9 |
Greater than 12 months, Fair Value | 29 | 47 |
Total, Gross Unrealized Losses | 13.6 | 4.9 |
Total, Fair Value | 599 | 381.5 |
Residential mortgage-backed, non-agency | Below Investment Grade | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Fair Value | 0.1 | |
Total, Fair Value | 0.1 | |
Commercial mortgage-backed | Investment grade | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 4.1 | 4.2 |
12 months or less, Fair Value | 187.5 | 293.8 |
Greater than 12 months, Gross Unrealized Losses | 0.1 | |
Greater than 12 months, Fair Value | 6.3 | 9.7 |
Total, Gross Unrealized Losses | 4.1 | 4.3 |
Total, Fair Value | 193.8 | 303.5 |
Asset backed | Investment grade | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 0.6 | 0.8 |
12 months or less, Fair Value | 29.1 | 56.6 |
Greater than 12 months, Gross Unrealized Losses | 0.2 | |
Greater than 12 months, Fair Value | 3.5 | 1.4 |
Total, Gross Unrealized Losses | 0.8 | 0.8 |
Total, Fair Value | 32.6 | 58 |
Equity Securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 0.7 | 7.6 |
12 months or less, Fair Value | 16.3 | 166.8 |
Total, Gross Unrealized Losses | 0.7 | 7.6 |
Total, Fair Value | $ 16.3 | $ 166.8 |
Investments (Schedule of Other
Investments (Schedule of Other Investments) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule of Investments [Line Items] | ||
Other investments | $ 533.8 | $ 393.4 |
Mortgage loans on real estate | ||
Schedule of Investments [Line Items] | ||
Other investments | 297.6 | 200.9 |
Mortgage loans on real estate | Office [Member] | ||
Schedule of Investments [Line Items] | ||
Other investments | 109.8 | 75 |
Mortgage loans on real estate | Retail [Member] | ||
Schedule of Investments [Line Items] | ||
Other investments | 64.7 | 58.8 |
Mortgage loans on real estate | Hotel [Member] | ||
Schedule of Investments [Line Items] | ||
Other investments | 40.4 | 19.2 |
Mortgage loans on real estate | Apartments [Member] | ||
Schedule of Investments [Line Items] | ||
Other investments | 38.4 | 33.4 |
Mortgage loans on real estate | Industrial [Member] | ||
Schedule of Investments [Line Items] | ||
Other investments | 30 | 15 |
Mortgage loans on real estate | Mixed Use [Member] | ||
Schedule of Investments [Line Items] | ||
Other investments | 15 | |
Mortgage loans on real estate | Valuation Allowance [Member] | ||
Schedule of Investments [Line Items] | ||
Other investments | (0.7) | (0.5) |
Mortgage loans on real estate | South Atlantic [Member] | ||
Schedule of Investments [Line Items] | ||
Other investments | 72 | 47 |
Mortgage loans on real estate | Pacific [Member] | ||
Schedule of Investments [Line Items] | ||
Other investments | 65 | 50 |
Mortgage loans on real estate | Mid-Atlantic [Member] | ||
Schedule of Investments [Line Items] | ||
Other investments | 53.5 | 23.6 |
Mortgage loans on real estate | West South Central [Member] | ||
Schedule of Investments [Line Items] | ||
Other investments | 51.3 | 35 |
Mortgage loans on real estate | New England [Member] | ||
Schedule of Investments [Line Items] | ||
Other investments | 21.1 | 10 |
Mortgage loans on real estate | East North Central [Member] | ||
Schedule of Investments [Line Items] | ||
Other investments | 10.4 | 10.8 |
Mortgage loans on real estate | West North Central [Member] | ||
Schedule of Investments [Line Items] | ||
Other investments | 10 | 10 |
Mortgage loans on real estate | Other Locations [Member] | ||
Schedule of Investments [Line Items] | ||
Other investments | $ 15 | $ 15 |
Investment Income and Gains a62
Investment Income and Gains and Losses (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Gain (Loss) on Investments [Line Items] | |||
Non-accruals of fixed maturity securities | $ 1,100,000 | $ 800,000 | $ 2,100,000 |
Net other-than-temporary impairment losses on securities recognized in earnings | 27,900,000 | 26,800,000 | 5,500,000 |
Net other-than-temporary impairment losses recorded in accumulated other comprehensive income | 6,700,000 | (22,700,000) | 100,000 |
Other-than-temporary impairments | 21,200,000 | 49,500,000 | 5,400,000 |
Credit impairments | 6,400,000 | 8,300,000 | |
Credit Impairments | |||
Gain (Loss) on Investments [Line Items] | |||
Credit impairments | 8,800,000 | 16,000,000 | 0 |
Fixed Maturities Held-for-Sale | |||
Gain (Loss) on Investments [Line Items] | |||
Net other-than-temporary impairment losses on securities recognized in earnings | 16,100,000 | 4,000,000 | $ 5,500,000 |
Equity Securities | |||
Gain (Loss) on Investments [Line Items] | |||
Net other-than-temporary impairment losses on securities recognized in earnings | $ 2,700,000 | 6,800,000 | |
Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | |||
Gain (Loss) on Investments [Line Items] | |||
Gross gains | 6,400,000 | ||
Gross losses | 600,000 | ||
Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | Fixed Maturities | |||
Gain (Loss) on Investments [Line Items] | |||
Proceeds from sale of investments | $ 379,600,000 |
Investment Income and Gains a63
Investment Income and Gains and Losses (Components of Net Investment Income) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Gain (Loss) on Investments [Line Items] | |||
Gross investment income | $ 290.4 | $ 289.4 | $ 281.3 |
Less investment expenses | (11) | (10.3) | (11) |
Net investment income | 279.4 | 279.1 | 270.3 |
Fixed Maturities | |||
Gain (Loss) on Investments [Line Items] | |||
Gross investment income | 245.1 | 253.8 | 255.8 |
Equity Securities | |||
Gain (Loss) on Investments [Line Items] | |||
Gross investment income | 18.6 | 17.5 | 16.5 |
Other Investments [Member] | |||
Gain (Loss) on Investments [Line Items] | |||
Gross investment income | $ 26.7 | $ 18.1 | $ 9 |
Investment Income and Gains a64
Investment Income and Gains and Losses (Schedule of Net Realized Gains Losses on Investments) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Gain (Loss) on Investments [Line Items] | |||
Net realized investment gains | $ 8.6 | $ 19.5 | $ 50.1 |
Equity Securities | |||
Gain (Loss) on Investments [Line Items] | |||
Net realized investment gains | 25.4 | 29.4 | 45.8 |
Fixed Maturities | |||
Gain (Loss) on Investments [Line Items] | |||
Net realized investment gains | (16.6) | (13.9) | 4.5 |
Other Investments [Member] | |||
Gain (Loss) on Investments [Line Items] | |||
Net realized investment gains | $ (0.2) | $ 4 | $ (0.2) |
Investment Income and Gains a65
Investment Income and Gains and Losses (Rollforward of Cumulative Amounts Related to Credit Loss Portion of OTTI Losses) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Investments [Abstract] | |||
Credit losses at beginning of period | $ 18 | $ 4.2 | $ 7.8 |
Credit losses on securities for which an OTTI was not previously recognized | 6.4 | 8.3 | |
Additional credit losses on securities for which an OTTI was previously recognized | 2.4 | 7.7 | |
Reductions for securities sold, matured or called | (4.6) | (1.8) | (3.2) |
Reductions for securities reclassified as intended to sell | (12.2) | (0.4) | (0.4) |
Credit losses at the end of the year | $ 10 | $ 18 | $ 4.2 |
Investment Income and Gains a66
Investment Income and Gains and Losses (Proceeds from Sale of Available for Sale Securities) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Fixed Maturities | |||
Gain (Loss) on Investments [Line Items] | |||
Proceeds from Sales | $ 563.8 | $ 1,167.6 | $ 349.5 |
Gross Gains | 11.7 | 15 | 5.8 |
Gross Losses | 7 | 9.3 | 2.6 |
Equity Securities | |||
Gain (Loss) on Investments [Line Items] | |||
Proceeds from Sales | 245 | 270 | 156.1 |
Gross Gains | 31.1 | 36.9 | 46.2 |
Gross Losses | $ 3 | $ 4.2 | $ 0.8 |
Fair Value (Narrative) (Details
Fair Value (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value Measurements [Line Items] | ||
Transfer between Level 1 and Level 2 | $ 0 | $ 0 |
Fair value of liabilities held | 0 | 0 |
Fair value of investments | $ 94,100,000 | $ 59,900,000 |
Percent of total investment assets | 1.00% | 1.00% |
Level 3 | ||
Fair Value Measurements [Line Items] | ||
Valuations excluded | $ 600,000 |
Fair Value (Fair Value of Finan
Fair Value (Fair Value of Financial Instruments) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | $ 282.6 | $ 338.8 |
Total financial assets | 8,696.1 | 8,264.2 |
Debt | 786.4 | 803.1 |
Carrying Value | Fixed Maturities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
investments | 7,331.3 | 6,983.4 |
Carrying Value | Equity Securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
investments | 584.4 | 576.6 |
Carrying Value | Other Investments [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
investments | 497.8 | 365.4 |
Estimate of Fair Value, Fair Value Disclosure | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | 282.6 | 338.8 |
Total financial assets | 8,695.9 | 8,266.7 |
Debt | 841.9 | 927.8 |
Estimate of Fair Value, Fair Value Disclosure | Fixed Maturities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
investments | 7,331.3 | 6,983.4 |
Estimate of Fair Value, Fair Value Disclosure | Equity Securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
investments | 584.4 | 576.6 |
Estimate of Fair Value, Fair Value Disclosure | Other Investments [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
investments | $ 497.6 | $ 367.9 |
Fair Value (Assets and Liabilit
Fair Value (Assets and Liabilities Measured at Fair Value on Recurring Basis) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | $ 7,331.3 | $ 6,983.4 |
Equity securities | 584.4 | 576.6 |
Other investments | 533.8 | 393.4 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investment assets at fair value | 8,012.2 | 7,655.6 |
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 | 341.1 | 449.1 |
Fair Value, Measurements, Recurring | Foreign government | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 240.7 | 245.8 |
Fair Value, Measurements, Recurring | Municipal | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 1,095.4 | 1,120.3 |
Fair Value, Measurements, Recurring | Corporate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 4,053.8 | 3,691 |
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 | 924.4 | 824.5 |
Fair Value, Measurements, Recurring | Residential mortgage-backed, non-agency | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 49.8 | 71.6 |
Fair Value, Measurements, Recurring | Commercial mortgage-backed | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 554.3 | 501.1 |
Fair Value, Measurements, Recurring | Asset-backed | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 71.8 | 80 |
Fair Value, Measurements, Recurring | Fixed Maturities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 7,331.3 | 6,983.4 |
Fair Value, Measurements, Recurring | Equity Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 574.6 | 567.7 |
Fair Value, Measurements, Recurring | Other Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other investments | 106.3 | 104.5 |
Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investment assets at fair value | 829.9 | 812.5 |
Fair Value, Measurements, Recurring | Level 1 | U.S. Treasury and government agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 209.5 | 193.6 |
Fair Value, Measurements, Recurring | Level 1 | Foreign government | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 47.3 | 52.5 |
Fair Value, Measurements, Recurring | Level 1 | Fixed Maturities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 256.8 | 246.1 |
Fair Value, Measurements, Recurring | Level 1 | Equity Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 573.1 | 566.4 |
Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investment assets at fair value | 7,126.5 | 6,782.6 |
Fair Value, Measurements, Recurring | Level 2 | U.S. Treasury and government agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 131.6 | 255.5 |
Fair Value, Measurements, Recurring | Level 2 | Foreign government | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 193.4 | 193.3 |
Fair Value, Measurements, Recurring | Level 2 | Municipal | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 1,064.4 | 1,085.9 |
Fair Value, Measurements, Recurring | Level 2 | Corporate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 4,049.6 | 3,687.3 |
Fair Value, Measurements, Recurring | Level 2 | Residential Mortgage Backed Securities U S Agency Backed | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 924.4 | 824.5 |
Fair Value, Measurements, Recurring | Level 2 | Residential mortgage-backed, non-agency | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 49.8 | 71.6 |
Fair Value, Measurements, Recurring | Level 2 | Commercial mortgage-backed | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 539.3 | 484.1 |
Fair Value, Measurements, Recurring | Level 2 | Asset-backed | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 71.8 | 79.5 |
Fair Value, Measurements, Recurring | Level 2 | Fixed Maturities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 7,024.3 | 6,681.7 |
Fair Value, Measurements, Recurring | Level 2 | Other Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other investments | 102.2 | 100.9 |
Fair Value, Measurements, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investment assets at fair value | 55.8 | 60.5 |
Fair Value, Measurements, Recurring | Level 3 | Municipal | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 31 | 34.4 |
Fair Value, Measurements, Recurring | Level 3 | Corporate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 4.2 | 3.7 |
Fair Value, Measurements, Recurring | Level 3 | Commercial mortgage-backed | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 15 | 17 |
Fair Value, Measurements, Recurring | Level 3 | Asset-backed | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 0.5 | |
Fair Value, Measurements, Recurring | Level 3 | Fixed Maturities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 50.2 | 55.6 |
Fair Value, Measurements, Recurring | Level 3 | Equity Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 1.5 | 1.3 |
Fair Value, Measurements, Recurring | Level 3 | Other Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other investments | $ 4.1 | $ 3.6 |
Fair Value (Estimated Fair Valu
Fair Value (Estimated Fair Values of Financial Instruments Not Carried at Fair Value) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Equity securities | $ 584.4 | $ 576.6 |
Other investments | 94.1 | 59.9 |
Estimate of Fair Value, Fair Value Disclosure | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | 282.6 | 338.8 |
Equity securities | 9.8 | 8.9 |
Other investments | 297.2 | 203.5 |
Debt | 841.9 | 927.8 |
Estimate of Fair Value, Fair Value Disclosure | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | 282.6 | 338.8 |
Estimate of Fair Value, Fair Value Disclosure | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Equity securities | 9.8 | 8.9 |
Debt | 841.9 | 927.8 |
Estimate of Fair Value, Fair Value Disclosure | Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other investments | $ 297.2 | $ 203.5 |
Fair Value (Fair Value on Recur
Fair Value (Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Balance at beginning of year | $ 60.5 | $ 61.7 |
Transfers into Level 3 | 1.3 | |
Transfers out of Level 3 | (1.2) | (4.6) |
Included in total net realized investment gains (losses) | (0.1) | |
Included in other comprehensive income - net appreciation (depreciation) on available-for-sale securities | 1.7 | (2.5) |
Purchases | 0.3 | 11.2 |
Sales | (5.4) | (6.6) |
Balance at end of year | 55.8 | 60.5 |
Fixed Maturities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Balance at beginning of year | 55.6 | 56.7 |
Transfers into Level 3 | 1.3 | |
Transfers out of Level 3 | (1.2) | (4.6) |
Included in total net realized investment gains (losses) | (0.1) | |
Included in other comprehensive income - net appreciation (depreciation) on available-for-sale securities | 1 | (2.4) |
Purchases | 0.3 | 11.2 |
Sales | (5.4) | (6.6) |
Balance at end of year | 50.2 | 55.6 |
Fixed Maturities | Municipal | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Balance at beginning of year | 34.4 | 25.7 |
Transfers out of Level 3 | (1.2) | |
Included in total net realized investment gains (losses) | 0.1 | |
Included in other comprehensive income - net appreciation (depreciation) on available-for-sale securities | 0.6 | (0.5) |
Purchases | 11.2 | |
Sales | (2.9) | (2) |
Balance at end of year | 31 | 34.4 |
Fixed Maturities | Corporate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Balance at beginning of year | 3.7 | 9.6 |
Transfers out of Level 3 | (4.6) | |
Included in total net realized investment gains (losses) | (0.2) | |
Included in other comprehensive income - net appreciation (depreciation) on available-for-sale securities | 0.6 | (0.8) |
Purchases | 0.3 | |
Sales | (0.2) | (0.5) |
Balance at end of year | 4.2 | 3.7 |
Fixed Maturities | Commercial mortgage-backed | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Balance at beginning of year | 17 | 21.4 |
Included in other comprehensive income - net appreciation (depreciation) on available-for-sale securities | (0.2) | (1) |
Sales | (1.8) | (3.4) |
Balance at end of year | 15 | 17 |
Fixed Maturities | Asset-backed | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Balance at beginning of year | 0.5 | |
Transfers into Level 3 | 1.3 | |
Included in other comprehensive income - net appreciation (depreciation) on available-for-sale securities | (0.1) | |
Sales | (0.5) | (0.7) |
Balance at end of year | 0.5 | |
Equity Securities and Other Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Balance at beginning of year | 4.9 | 5 |
Included in other comprehensive income - net appreciation (depreciation) on available-for-sale securities | 0.7 | (0.1) |
Balance at end of year | $ 5.6 | $ 4.9 |
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 | 12 Months Ended | ||
Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Fair Value [Line Items] | |||
Fair Value | $ 55.8 | $ 60.5 | $ 61.7 |
Income Approach Valuation Technique | Level 3 | Municipal | |||
Fair Value [Line Items] | |||
Fair Value | 31 | 34.4 | |
Income Approach Valuation Technique | Level 3 | Corporate | |||
Fair Value [Line Items] | |||
Fair Value | 4 | 3.7 | |
Income Approach Valuation Technique | Level 3 | Commercial mortgage-backed | |||
Fair Value [Line Items] | |||
Fair Value | 15 | 17 | |
Income Approach Valuation Technique | Level 3 | Asset-backed | |||
Fair Value [Line Items] | |||
Fair Value | 0.5 | ||
Income Approach Valuation Technique | Level 3 | Other securities | |||
Fair Value [Line Items] | |||
Fair Value | $ 4.1 | $ 3.6 | |
Discount For Small Issue Size | Income Approach Valuation Technique | Level 3 | Corporate | |||
Fair Value [Line Items] | |||
Range (Weighted Average) | 1.00% | ||
Discount For Small Issue Size | Income Approach Valuation Technique | Level 3 | Asset-backed | |||
Fair Value [Line Items] | |||
Range (Weighted Average) | 0.70% | ||
Discount For Small Issue Size | Income Approach Valuation Technique | Level 3 | Minimum [Member] | Municipal | |||
Fair Value [Line Items] | |||
Range (Weighted Average) | 0.70% | 0.60% | |
Discount For Small Issue Size | Income Approach Valuation Technique | Level 3 | Minimum [Member] | Corporate | |||
Fair Value [Line Items] | |||
Range (Weighted Average) | 2.00% | ||
Discount For Small Issue Size | Income Approach Valuation Technique | Level 3 | Minimum [Member] | Commercial mortgage-backed | |||
Fair Value [Line Items] | |||
Range (Weighted Average) | 1.90% | 0.50% | |
Discount For Small Issue Size | Income Approach Valuation Technique | Level 3 | Maximum [Member] | Municipal | |||
Fair Value [Line Items] | |||
Range (Weighted Average) | 6.80% | 6.80% | |
Discount For Small Issue Size | Income Approach Valuation Technique | Level 3 | Maximum [Member] | Corporate | |||
Fair Value [Line Items] | |||
Range (Weighted Average) | 2.50% | ||
Discount For Small Issue Size | Income Approach Valuation Technique | Level 3 | Maximum [Member] | Commercial mortgage-backed | |||
Fair Value [Line Items] | |||
Range (Weighted Average) | 3.10% | 1.00% | |
Discount For Small Issue Size | Income Approach Valuation Technique | Level 3 | Weighted Average [Member] | Municipal | |||
Fair Value [Line Items] | |||
Range (Weighted Average) | 3.30% | 3.20% | |
Discount For Small Issue Size | Income Approach Valuation Technique | Level 3 | Weighted Average [Member] | Corporate | |||
Fair Value [Line Items] | |||
Range (Weighted Average) | 2.10% | 1.00% | |
Discount For Small Issue Size | Income Approach Valuation Technique | Level 3 | Weighted Average [Member] | Commercial mortgage-backed | |||
Fair Value [Line Items] | |||
Range (Weighted Average) | 2.60% | 0.50% | |
Discount For Small Issue Size | Income Approach Valuation Technique | Level 3 | Weighted Average [Member] | Asset-backed | |||
Fair Value [Line Items] | |||
Range (Weighted Average) | 0.70% | ||
Discount For Above Market Coupon | Income Approach Valuation Technique | Level 3 | Commercial mortgage-backed | |||
Fair Value [Line Items] | |||
Range (Weighted Average) | 0.50% | 0.50% | |
Discount For Above Market Coupon | Income Approach Valuation Technique | Level 3 | Minimum [Member] | Municipal | |||
Fair Value [Line Items] | |||
Range (Weighted Average) | 0.30% | 0.30% | |
Discount For Above Market Coupon | Income Approach Valuation Technique | Level 3 | Minimum [Member] | Corporate | |||
Fair Value [Line Items] | |||
Range (Weighted Average) | 0.30% | 0.30% | |
Discount For Above Market Coupon | Income Approach Valuation Technique | Level 3 | Maximum [Member] | Municipal | |||
Fair Value [Line Items] | |||
Range (Weighted Average) | 0.50% | 1.00% | |
Discount For Above Market Coupon | Income Approach Valuation Technique | Level 3 | Maximum [Member] | Corporate | |||
Fair Value [Line Items] | |||
Range (Weighted Average) | 0.80% | 0.80% | |
Discount For Above Market Coupon | Income Approach Valuation Technique | Level 3 | Weighted Average [Member] | Municipal | |||
Fair Value [Line Items] | |||
Range (Weighted Average) | 0.40% | 0.40% | |
Discount For Above Market Coupon | Income Approach Valuation Technique | Level 3 | Weighted Average [Member] | Corporate | |||
Fair Value [Line Items] | |||
Range (Weighted Average) | 0.60% | 0.60% | |
Discount For Above Market Coupon | Income Approach Valuation Technique | Level 3 | Weighted Average [Member] | Commercial mortgage-backed | |||
Fair Value [Line Items] | |||
Range (Weighted Average) | 0.50% | 0.50% | |
Discount For Credit Stress | Income Approach Valuation Technique | Level 3 | Corporate | |||
Fair Value [Line Items] | |||
Range (Weighted Average) | 1.00% | 10.00% | |
Discount For Credit Stress | Income Approach Valuation Technique | Level 3 | Minimum [Member] | Municipal | |||
Fair Value [Line Items] | |||
Range (Weighted Average) | 0.90% | 0.90% | |
Discount For Credit Stress | Income Approach Valuation Technique | Level 3 | Maximum [Member] | Municipal | |||
Fair Value [Line Items] | |||
Range (Weighted Average) | 1.50% | 1.50% | |
Discount For Credit Stress | Income Approach Valuation Technique | Level 3 | Weighted Average [Member] | Municipal | |||
Fair Value [Line Items] | |||
Range (Weighted Average) | 1.20% | 1.20% | |
Discount For Credit Stress | Income Approach Valuation Technique | Level 3 | Weighted Average [Member] | Corporate | |||
Fair Value [Line Items] | |||
Range (Weighted Average) | 1.00% | 10.00% | |
Discount For Lease Structure | Income Approach Valuation Technique | Level 3 | Commercial mortgage-backed | |||
Fair Value [Line Items] | |||
Range (Weighted Average) | 0.30% | 0.30% | |
Discount For Lease Structure | Income Approach Valuation Technique | Level 3 | Weighted Average [Member] | Commercial mortgage-backed | |||
Fair Value [Line Items] | |||
Range (Weighted Average) | 0.30% | 0.30% | |
Net Tangible Asset Market Multiples | Market comparables [Member] | Level 3 | Equity Securities | |||
Fair Value [Line Items] | |||
Fair Value | $ 1.1 | $ 1.1 | |
Fair value measurement market multiples | 1 | 1 | |
Net Tangible Asset Market Multiples | Market comparables [Member] | Level 3 | Weighted Average [Member] | Equity Securities | |||
Fair Value [Line Items] | |||
Fair value measurement market multiples | 1 | 1 | |
Discount Rate [Member] | Income Approach Valuation Technique | Level 3 | Other securities | |||
Fair Value [Line Items] | |||
Range (Weighted Average) | 18.00% | 18.00% | |
Discount Rate [Member] | Income Approach Valuation Technique | Level 3 | Weighted Average [Member] | Other securities | |||
Fair Value [Line Items] | |||
Range (Weighted Average) | 18.00% | 18.00% |
Debt and Credit Arrangements (S
Debt and Credit Arrangements (Schedule of Long Term Debt) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Total principal debt | $ 797.3 | $ 814.3 |
Unamortized debt discount | (10.9) | (11.2) |
Total | 786.4 | 803.1 |
Senior debentures maturing April 15, 2026 [Member] | ||
Debt Instrument [Line Items] | ||
Total principal debt | 375 | |
Senior debentures maturing October 15, 2025 [Member] | ||
Debt Instrument [Line Items] | ||
Total principal debt | 62.6 | 74.6 |
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 | |
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 |
FHLBB borrowings (secured) [Member] | ||
Debt Instrument [Line Items] | ||
Total principal debt | $ 125 | $ 125 |
Debt and Credit Arrangements (N
Debt and Credit Arrangements (Narrative) (Details) £ in Millions | May 21, 2016USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2009USD ($) | Dec. 31, 2016GBP (£) | Dec. 31, 2016USD ($) | Jun. 30, 2016USD ($) |
Debt Instrument [Line Items] | ||||||||
Gain (loss) on the repurchase of debt | $ (88,300,000) | $ (24,100,000) | $ (100,000) | |||||
Federal Home Loan Bank Stock | 8,900,000 | $ 9,800,000 | ||||||
Long-term Debt, Gross | $ 814,300,000 | 797,300,000 | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 200,000,000 | |||||||
Line Of Credit Facility Maturity Month And Year | 2018-11 | |||||||
Foreign Currency Exchange Rate Translation 1 | 1.47 | 1.23 | 1.23 | |||||
Interest Expense Debt | $ 54,900,000 | $ 60,600,000 | 65,800,000 | |||||
Standby Letters of Credit [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity | £ 170 | $ 209,600,000 | ||||||
Federal Home Loan Bank of Boston | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument interest rate | 5.50% | |||||||
Advance received | $ 125,000,000 | |||||||
Length of debt instrument | 20 years | |||||||
Collateralized Borrowing Program [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Advance received | 125,000,000 | 125,000,000 | ||||||
Securities Held As Collateral At Fair Value | 176,000,000 | 201,800,000 | ||||||
Senior debentures maturing April 15, 2026 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt issuance date | Apr. 8, 2016 | |||||||
Aggregate principal amount | $ 375,000,000 | $ 375,000,000 | ||||||
Debt instrument interest rate | 4.50% | 4.50% | 4.50% | |||||
Maturity date | Apr. 15, 2026 | |||||||
Proceeds from issuance | $ 370,700,000 | |||||||
Long-term Debt, Gross | $ 375,000,000 | |||||||
Subordinated debentures maturing March 30, 2053 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate principal amount | $ 175,000,000 | |||||||
Debt instrument interest rate | 6.35% | 6.35% | ||||||
Maturity date | Mar. 30, 2053 | |||||||
Debt Instrument Redemption Date | Mar. 30, 2018 | |||||||
Long-term Debt, Gross | 175,000,000 | $ 175,000,000 | ||||||
Senior Unsecured Notes Issued On October 16, 1995 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt issuance date | Oct. 16, 1995 | |||||||
Aggregate principal amount | $ 200,000,000 | |||||||
Debt instrument interest rate | 7.625% | 7.625% | ||||||
Maturity date | Oct. 15, 2025 | |||||||
Long-term Debt, Gross | 74,600,000 | $ 62,600,000 | ||||||
8.207% Subordinated Debentures [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate principal amount | $ 59,700,000 | 59,700,000 | ||||||
Maturity date | Feb. 3, 2027 | |||||||
Interest rate of Series B Subordinated Deferrable Interest Debentures | 8.207% | 8.207% | ||||||
Senior debentures maturing October 15, 2025 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maturity date | Oct. 15, 2025 | |||||||
Repurchase of senior debentures | $ 6,500,000 | 11,900,000 | ||||||
Repurchase of senior debentures at cost | 8,300,000 | 14,100,000 | ||||||
Gain (loss) on the repurchase of debt | $ 2,200,000 | 1,800,000 | ||||||
Long-term Debt, Gross | $ 74,600,000 | $ 62,600,000 | ||||||
Senior debentures maturing March 1, 2020 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument interest rate | 7.50% | 7.50% | ||||||
Maturity date | Mar. 1, 2020 | Mar. 1, 2020 | ||||||
Repurchase of senior debentures | $ 83,700,000 | |||||||
Repurchase of senior debentures at cost | 106,000,000 | |||||||
Gain (loss) on the repurchase of debt | 22,300,000 | |||||||
Long-term Debt, Gross | 80,000,000 | |||||||
Senior debentures maturing June 15, 2021 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument interest rate | 6.375% | 6.375% | ||||||
Maturity date | Jun. 15, 2021 | |||||||
Long-term Debt, Gross | 300,000,000 | |||||||
Senior debentures maturing March 1, 2020 And June 15, 2021 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Gain (loss) on the repurchase of debt | $ 86,100,000 | |||||||
The Hanover Insurance Group [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Gain (loss) on the repurchase of debt | $ (88,300,000) | (24,100,000) | (100,000) | |||||
Interest Expense Debt | $ 46,100,000 | $ 53,900,000 | $ 54,700,000 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2017 | |
Income Taxes [Line Items] | ||||
U.S. statutory federal income tax rate | 35.00% | |||
Deferred tax asset, alternative minimum tax carryforward | $ 72,300,000 | |||
Deferred tax assets, Foreign tax credit carryforwards | $ 22,300,000 | |||
Foreign tax credit carryforwards expiration date | 2,026 | |||
Net realized investment gains | $ 8,600,000 | $ 19,500,000 | $ 50,100,000 | |
Foreign income permanently reinvested | 23,500,000 | 69,800,000 | 23,300,000 | |
Estimated taxes payable on undistributed earnings | 43,400,000 | |||
Deferred deductions | 700,000 | 4,800,000 | ||
Liability for uncertain tax positions | 0 | 0 | 0 | |
Accrued interest | 200,000 | 600,000 | ||
Unrecognized Tax Benefits, Interest on Income Taxes Expense | 400,000 | 100,000 | 500,000 | |
Accumulated Other Comprehensive Incoome [Member] | ||||
Income Taxes [Line Items] | ||||
Realized Gains In Accumulated Other Comprehensive Income To Be Released Into Income From Continuing Operations In Future | 57,500,000 | |||
Non-Operating Income [Member] | ||||
Income Taxes [Line Items] | ||||
Income recognized in continuing operations related to non-segment income | $ 20,700,000 | $ 13,300,000 | $ 16,200,000 | |
Scenario, Forecast [Member] | ||||
Income Taxes [Line Items] | ||||
Liability due to the expiration of statute of limitations | $ 600,000 |
Income Taxes (Components of Inc
Income Taxes (Components of Income Before Income Taxes) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Taxes [Abstract] | |||
U.S. | $ 70.8 | $ 220.9 | $ 185.6 |
Non-U.S. | 121.5 | 218.5 | 192.4 |
Income before income taxes | $ 192.3 | $ 439.4 | $ 378 |
Income Taxes (Components of I77
Income Taxes (Components of Income Tax Expense (Benefit)) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Taxes [Abstract] | |||
Current income taxes, U.S. | $ 16.8 | $ 32.7 | $ 4.5 |
Current income taxes, Non-U.S. | 35.3 | 23.1 | 22.6 |
Total current | 52.1 | 55.8 | 27.1 |
Deferred income taxes, U.S. | (20.4) | 44 | 51.1 |
Deferred income taxes, Non-U.S. | 4.5 | 8.8 | 17.5 |
Total deferred | (15.9) | 52.8 | 68.6 |
Total income tax expense | $ 36.2 | $ 108.6 | $ 95.7 |
Income Taxes (Schedule of Effec
Income Taxes (Schedule of Effective Income Tax Rate Reconciliation) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Taxes [Abstract] | |||
Expected income tax expense | $ 67.3 | $ 153.7 | $ 132.3 |
Tax difference related to investment disposals and maturities | (20.7) | (13.3) | (16.2) |
Effect of foreign operations | (6.6) | (7.8) | (8.1) |
Dividend received deduction | (3.3) | (3.1) | (2.6) |
Tax-exempt interest | (1.1) | (1.4) | (1.7) |
Foreign tax credits | (0.6) | (5.6) | |
Gain on disposal of U.K. motor business exempt from tax | (17.3) | ||
Foreign exchange losses | (6.9) | ||
Change in valuation allowance | (2.9) | ||
Nondeductible expenses | 1.4 | 1.6 | 1.8 |
Change in liability for uncertain tax positions | 1.7 | ||
Other, net | (0.2) | 0.1 | |
Total income tax expense | $ 36.2 | $ 108.6 | $ 95.7 |
Effective tax rate | 18.80% | 24.70% | 25.30% |
Income Taxes (Schedule of Defer
Income Taxes (Schedule of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Income Taxes [Abstract] | ||
Loss, LAE and unearned premium reserves, net | $ 183.9 | $ 179 |
Tax credit carryforwards | 94.6 | 70.5 |
Employee benefit plans | 44.4 | 39.6 |
Investments, net | 12.4 | |
Other | 54.9 | 53.6 |
Deferred tax assets, gross | 377.8 | 355.1 |
Deferred tax assets, total | 377.8 | 355.1 |
Deferred acquisition costs | 141 | 134.9 |
Deferred Lloyd's underwriting income | 32.7 | 22.4 |
Software capitalization | 28.9 | 26.9 |
Investments, net | 27.9 | |
Other | 32.2 | 33 |
Deferred tax liabilities, total | 262.7 | 217.2 |
Net deferred tax asset | $ 115.1 | $ 137.9 |
Income Taxes (Summary of Income
Income Taxes (Summary of Income Tax Uncertainties) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Taxes [Abstract] | |||
Liability at beginning of year, net | $ 3 | $ 1.3 | $ 1.4 |
Additions for tax positions of prior years | 0.4 | 1.7 | (0.1) |
Settlements/subtractions for tax positions of prior years | (0.7) | (4.8) | |
Deferred deductions | 4.8 | ||
Liability at end of year, net | $ 2.7 | $ 3 | $ 1.3 |
Pension Plan (Narrative) (Detai
Pension Plan (Narrative) (Details) | Jan. 01, 2005 | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Retirement Plans [Line Items] | ||||
Interest rate used calculating annual transition pension adjustment for specified completed period of service | 5.00% | |||
Defined benefit plan, maximum number of years of completed service used in calculating the annual transition pension adjustment | 35 years | |||
Interest rate used calculating annual transition pension adjustment, thereafter | 3.00% | |||
Projected benefit obligation, defined benefit pension plans exceeds plan assets | $ 54,000,000 | |||
Employee contributions | 200,000 | $ 300,000 | ||
Curtailment gain | 2,400,000 | $ 1,800,000 | ||
Lump-sum settlements | $ 55,100,000 | |||
Settlement loss | (12,100,000) | |||
Accelerated recognition of gains (losses) | $ 1,300,000 | |||
Estimated future contributions in next fiscal year | $ 0 | |||
Maximum percentage contributed by employer | 6.00% | 6.00% | 6.00% | |
Defined contribution plan expense | $ 21,400,000 | $ 20,100,000 | $ 19,900,000 | |
Additional cost contribution | 2,000,000 | 2,100,000 | ||
Additional cost contribution | $ 3,900,000 | $ 4,800,000 | $ 6,100,000 | |
Defined Benefit Plan Foreign Currency Exchange Rate | 1.23 | |||
Minimum [Member] | ||||
Retirement Plans [Line Items] | ||||
Percentage of unrecognized net actuarial gains (losses) as projected benefit obligation, amortized as component of net periodic pension cost | 10.00% | |||
Chaucer Pension Plan [Member] | ||||
Retirement Plans [Line Items] | ||||
Projected benefit obligation, defined benefit pension plans exceeds plan assets | $ 16,000,000 | |||
Expected rate of return on plan assets | 5.45% | 5.45% | 6.55% | |
Estimated future contributions in next fiscal year | $ 7,400,000 | |||
U.S. Qualified Defined Benefit Plans [Member] | ||||
Retirement Plans [Line Items] | ||||
Expected rate of return on plan assets | 5.25% | |||
Settlement loss | $ 10,800,000 | |||
Estimated future contributions in next fiscal year | $ 3,200,000 |
Pension Plans (Schedule of Weig
Pension Plans (Schedule of Weighted Average Assumptions Used to Determine Pension Benefit Obligations) (Details) | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Qualified Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Discount rate | 4.25% | 4.88% | 4.38% | |
Nonqualified Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Discount rate | 4.25% | 4.75% | 4.25% | |
Chaucer Pension Plan [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Discount rate | 2.85% | 3.85% | 3.75% | |
Rate of increase in future compensation | [1] | 3.15% | 3.10% | 3.00% |
[1] | The salary increase assumption as of December 31, 2016 is used to calculate the curtailment gain that resulted from the cessation of future salary increases. |
Pension Plans (Schedule of We83
Pension Plans (Schedule of Weighted Average Assumptions Used to Determine Net Periodic Pension Costs) (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
U.S. Qualified Defined Benefit Plans [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Expected return on plan assets | 5.25% | ||
Cash balance interest crediting rate | 3.50% | 3.50% | 3.50% |
Qualified Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 4.88% | 4.38% | 5.00% |
Expected return on plan assets | 5.25% | 5.00% | 5.50% |
Cash balance interest crediting rate | 3.50% | 3.50% | 3.50% |
Nonqualified Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 4.75% | 4.25% | 5.00% |
Chaucer Pension Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 3.85% | 3.75% | 4.50% |
Expected return on plan assets | 5.45% | 5.45% | 6.55% |
Rate of increase in future compensation | 3.10% | 3.00% | 3.15% |
Pension Plans (Summary of Targe
Pension Plans (Summary of Target Allocations and Invested Asset Allocations) (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
U.S. Qualified Defined Benefit Plans [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total Fixed Income and Equity Securities, TARGET LEVELS | 100.00% | |
Total Fixed Income and Equity Securities | 100.00% | 100.00% |
U.S. Qualified Defined Benefit Plans [Member] | Fixed Maturities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total Fixed Income and Equity Securities, TARGET LEVELS | 83.00% | |
Total Fixed Income and Equity Securities | 83.00% | 84.00% |
U.S. Qualified Defined Benefit Plans [Member] | Money Market Funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total Fixed Income and Equity Securities, TARGET LEVELS | 2.00% | |
Total Fixed Income and Equity Securities | 2.00% | 1.00% |
U.S. Qualified Defined Benefit Plans [Member] | Fixed Income Securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total Fixed Income and Equity Securities, TARGET LEVELS | 85.00% | |
Total Fixed Income and Equity Securities | 85.00% | 85.00% |
U.S. Qualified Defined Benefit Plans [Member] | Domestic | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total Fixed Income and Equity Securities, TARGET LEVELS | 12.00% | |
Total Fixed Income and Equity Securities | 12.00% | 12.00% |
U.S. Qualified Defined Benefit Plans [Member] | International | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total Fixed Income and Equity Securities, TARGET LEVELS | 3.00% | |
Total Fixed Income and Equity Securities | 3.00% | 3.00% |
U.S. Qualified Defined Benefit Plans [Member] | Equity Securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total Fixed Income and Equity Securities, TARGET LEVELS | 15.00% | |
Total Fixed Income and Equity Securities | 15.00% | 15.00% |
Chaucer Pension Plan [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total Fixed Income and Equity Securities, TARGET LEVELS | 100.00% | |
Total Fixed Income and Equity Securities | 100.00% | 100.00% |
Chaucer Pension Plan [Member] | Fixed Maturities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total Fixed Income and Equity Securities, TARGET LEVELS | 30.00% | |
Total Fixed Income and Equity Securities | 34.00% | 32.00% |
Chaucer Pension Plan [Member] | Domestic | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total Fixed Income and Equity Securities, TARGET LEVELS | 15.00% | |
Total Fixed Income and Equity Securities | 14.00% | 14.00% |
Chaucer Pension Plan [Member] | International | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total Fixed Income and Equity Securities, TARGET LEVELS | 45.00% | |
Total Fixed Income and Equity Securities | 41.00% | 42.00% |
Chaucer Pension Plan [Member] | Equity Securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total Fixed Income and Equity Securities, TARGET LEVELS | 60.00% | |
Total Fixed Income and Equity Securities | 55.00% | 56.00% |
Chaucer Pension Plan [Member] | Real Estate Funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total Fixed Income and Equity Securities, TARGET LEVELS | 10.00% | |
Total Fixed Income and Equity Securities | 11.00% | 12.00% |
Pension Plans (Summary of Plan
Pension Plans (Summary of Plan Assets Investment Measured At Fair Value) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
U.S. Qualified Defined Benefit Plans [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Invested assets, fair value | $ 453.3 | $ 472.8 | $ 513.4 |
Chaucer Pension Plan [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Invested assets, fair value | 116.5 | 123.5 | $ 131.8 |
Chaucer Pension Plan [Member] | Cash and Cash Equivalents [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Invested assets, fair value | 0.3 | 0.6 | |
Chaucer Pension Plan [Member] | Fixed Maturities | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Invested assets, fair value | 39.4 | 38.7 | |
Chaucer Pension Plan [Member] | Domestic | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Invested assets, fair value | 16 | 17 | |
Chaucer Pension Plan [Member] | International | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Invested assets, fair value | 48 | 52.4 | |
Chaucer Pension Plan [Member] | Equity Securities | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Invested assets, fair value | 64 | 69.4 | |
Chaucer Pension Plan [Member] | Real Estate Funds | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Invested assets, fair value | 12.8 | 14.8 | |
Estimate of Fair Value, Fair Value Disclosure | U.S. Qualified Defined Benefit Plans [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Invested assets, fair value | 60.8 | 46.7 | |
Estimate of Fair Value, Fair Value Disclosure | U.S. Qualified Defined Benefit Plans [Member] | Fixed Maturities | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Invested assets, fair value | 53.7 | 42 | |
Estimate of Fair Value, Fair Value Disclosure | U.S. Qualified Defined Benefit Plans [Member] | Money Market Funds | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Invested assets, fair value | 7.1 | 4.7 | |
Estimate of Fair Value, Fair Value Disclosure | Chaucer Pension Plan [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Invested assets, fair value | 116.5 | 123.5 | |
Estimate of Fair Value, Fair Value Disclosure | Level 1 | U.S. Qualified Defined Benefit Plans [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Invested assets, fair value | 30.1 | 15 | |
Estimate of Fair Value, Fair Value Disclosure | Level 1 | U.S. Qualified Defined Benefit Plans [Member] | Fixed Maturities | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Invested assets, fair value | 23 | 10.3 | |
Estimate of Fair Value, Fair Value Disclosure | Level 1 | U.S. Qualified Defined Benefit Plans [Member] | Money Market Funds | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Invested assets, fair value | 7.1 | 4.7 | |
Estimate of Fair Value, Fair Value Disclosure | Level 3 | U.S. Qualified Defined Benefit Plans [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Invested assets, fair value | 30.7 | 31.7 | |
Estimate of Fair Value, Fair Value Disclosure | Level 3 | U.S. Qualified Defined Benefit Plans [Member] | Fixed Maturities | |||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Invested assets, fair value | $ 30.7 | $ 31.7 |
Pension Plans (Schedule of Fair
Pension Plans (Schedule of Fair Values of Investments) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Fixed maturities | $ 7,331.3 | $ 6,983.4 | |
Equity securities | 584.4 | 576.6 | |
Investments Net Asset Value [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Fixed maturities | $ 322.4 | 355.6 | |
Equity securities | 70.1 | 70.5 | |
Total investments carried at NAV | 392.5 | 426.1 | |
Investments Net Asset Value [Member] | Domestic | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Equity securities | 53.9 | 54.6 | |
Investments Net Asset Value [Member] | International | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Equity securities | $ 16.2 | 15.9 | |
The Hanover Insurance Group [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Fixed maturities | 116.4 | 121.3 | |
Equity securities | $ 1.1 | $ 1.1 |
Pension Plans (Summary for Asse
Pension Plans (Summary for Assets Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs) (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Balance at beginning of year | $ 60.5 | $ 61.7 |
Purchases | 1.3 | |
Balance at end of year | 55.8 | 60.5 |
U.S. Qualified Defined Benefit Plans [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Balance at beginning of year | 31.7 | |
Actual return on plan assets related to assets still held | (1) | |
Balance at end of year | 30.7 | 31.7 |
Chaucer Pension Plan [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currency translation | $ (21.4) | $ (7.1) |
Pension Plans (Fair Value of Pl
Pension Plans (Fair Value of Plan Assets and Funded Status of Plans) (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost - benefits earned during the period | $ 0.7 | $ 1.1 | $ 1.5 |
Interest cost | 29.5 | 29.3 | 33.7 |
Settlements | 55.1 | ||
U.S. Qualified Defined Benefit Plans [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Accumulated benefit obligation | 506.8 | 500.5 | |
Projected benefit obligation, beginning of period | 500.5 | 538.5 | |
Interest cost | 23.2 | 22.5 | |
Actuarial losses (gains) | 29.4 | (23.3) | |
Benefits paid | (46.3) | (37.2) | |
Projected benefit obligation, end of year | 506.8 | 500.5 | 538.5 |
Fair value of plan assets, beginning of period | 472.8 | 513.4 | |
Actual return on plan assets | 26.8 | (3.4) | |
Benefits paid | (46.3) | (37.2) | |
Fair value of plan assets, end of year | 453.3 | 472.8 | 513.4 |
Funded status of the plans | (53.5) | (27.7) | |
U.S. Non Qualified Pension Plans [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Accumulated benefit obligation | 38 | 37.8 | |
Projected benefit obligation, beginning of period | 37.8 | 40.6 | |
Interest cost | 1.7 | 1.7 | |
Actuarial losses (gains) | 1.7 | (1.3) | |
Benefits paid | (3.2) | (3.2) | |
Projected benefit obligation, end of year | 38 | 37.8 | 40.6 |
Contributions | 3.2 | 3.2 | |
Benefits paid | (3.2) | (3.2) | |
Funded status of the plans | (38) | (37.8) | |
Chaucer Pension Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Accumulated benefit obligation | 132.2 | 126 | |
Projected benefit obligation, beginning of period | 128.3 | 137.5 | |
Employee contributions | 0.2 | 0.3 | |
Service cost - benefits earned during the period | 0.8 | 1.1 | |
Interest cost | 4.5 | 5.1 | |
Actuarial losses (gains) | 25.9 | (0.7) | |
Benefits paid | (1.8) | (5.8) | |
Curtailment gain | (2.4) | (1.8) | |
Foreign currency translation | (23.3) | (7.4) | |
Projected benefit obligation, end of year | 132.2 | 128.3 | 137.5 |
Fair value of plan assets, beginning of period | 123.5 | 131.8 | |
Actual return on plan assets | 15.4 | 3.3 | |
Contributions | 0.8 | 1.3 | |
Benefits paid | (1.8) | (5.8) | |
Foreign currency translation | (21.4) | (7.1) | |
Fair value of plan assets, end of year | 116.5 | 123.5 | $ 131.8 |
Funded status of the plans | $ (15.7) | $ (4.8) |
Pension Plans (Components of Ne
Pension Plans (Components of Net Periodic Benefit Cost) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Pension Plans [Abstract] | |||
Service cost - benefits earned during the period | $ 0.7 | $ 1.1 | $ 1.5 |
Interest cost | 29.5 | 29.3 | 33.7 |
Expected return on plan assets | (29.6) | (31.6) | (36.6) |
Recognized net actuarial loss | 13.5 | 13.9 | 11.7 |
Amortization of prior service cost (benefit) | 0.1 | ||
Settlement loss | 12.1 | ||
Curtailment gain | (2.4) | (1.8) | |
Net periodic pension cost | $ 11.7 | $ 10.9 | $ 22.5 |
Pension Plans (Summary of Amoun
Pension Plans (Summary of Amounts Recognized in Accumulated Other Comprehensive Income Loss) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Pension Plans [Abstract] | ||
Net actuarial loss | $ 150.4 | $ 119.4 |
Pension Plans (Summary of Estim
Pension Plans (Summary of Estimated Amount Amortized from Accumulated Other Comprehensive Income Loss into Net Periodic Pension Cost) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Pension Plans [Abstract] | |
Net actuarial loss | $ 15.8 |
Pension Plans (Summary of Est92
Pension Plans (Summary of Estimated Benefit Payments) (Details) $ in Millions | Dec. 31, 2016USD ($) |
U.S. Qualified Defined Benefit Plans [Member] | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
2,017 | $ 38.8 |
2,018 | 37.7 |
2,019 | 37.6 |
2,020 | 37.4 |
2,021 | 37.5 |
2022-2026 | 174.9 |
U.S. Non Qualified Pension Plans [Member] | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
2,017 | 3.2 |
2,018 | 3.1 |
2,019 | 3 |
2,020 | 3.1 |
2,021 | 2.9 |
2022-2026 | 13.5 |
Chaucer Pension Plan [Member] | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
2,017 | 1.6 |
2,018 | 1.7 |
2,019 | 1.8 |
2,020 | 1.8 |
2,021 | 1.9 |
2022-2026 | $ 10.8 |
Other Postretirement Benefit 93
Other Postretirement Benefit Plans (Narrative) (Details) - Postretirement Plans | 12 Months Ended |
Dec. 31, 2016 | |
1995 Postretirement Health Coverage [Member] | |
Retirement Plans [Line Items] | |
Eligibility age | 40 years |
2009 Postretirement Health Coverage [Member] | |
Retirement Plans [Line Items] | |
Eligibility age | 65 years |
Minimum [Member] | 1995 Postretirement Health Coverage [Member] | |
Retirement Plans [Line Items] | |
Service period required to avail postretirement benefits (in years) | 15 years |
Other Postretirement Benefit 94
Other Postretirement Benefit Plans (Fair Value of Plan Assets and Funded Status of Plans) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | $ 0.7 | $ 1.1 | $ 1.5 |
Interest cost | 29.5 | 29.3 | 33.7 |
Postretirement Plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Accumulated benefit obligation, beginning of year | 12.1 | 17 | |
Service cost | 0.1 | ||
Interest cost | 0.5 | 0.5 | 0.8 |
Net actuarial loss | 1 | 0.1 | |
Benefits paid | (2) | (2.5) | |
Plan amendment | (3) | ||
Accumulated benefit obligation, end of year | 11.6 | 12.1 | $ 17 |
Fair value of plan assets, end of year | |||
Funded status of plans | $ (11.6) | $ (12.1) |
Other Postretirement Benefit 95
Other Postretirement Benefit Plans (Schedule of Expected Benefit Payments) (Details) - Postretirement Plans $ in Millions | Dec. 31, 2016USD ($) |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
2,017 | $ 1.4 |
2,018 | 1.3 |
2,019 | 1.2 |
2,020 | 1.1 |
2,021 | 1 |
2022-2026 | $ 4.1 |
Other Postretirement Benefit 96
Other Postretirement Benefit Plans (Components of Net Periodic Pension Cost) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Service cost | $ 0.7 | $ 1.1 | $ 1.5 |
Interest cost | 29.5 | 29.3 | 33.7 |
Recognized net actuarial loss | 13.5 | 13.9 | 11.7 |
Amortization of prior service cost (benefit) | 0.1 | ||
Settlement loss | 12.1 | ||
Net periodic pension cost | 11.7 | 10.9 | 22.5 |
Postretirement Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Service cost | 0.1 | ||
Interest cost | 0.5 | 0.5 | 0.8 |
Recognized net actuarial loss | 0.2 | 0.2 | 0.1 |
Amortization of prior service cost (benefit) | (1.4) | (1.4) | (1.9) |
Net periodic pension cost | $ (0.7) | $ (0.7) | $ (0.9) |
Other Postretirement Benefit 97
Other Postretirement Benefit Plans (Accumulated Other Comprehensive (Income) Loss Related to Postretirement Benefit Plans) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Net actuarial loss | $ 150.4 | $ 119.4 |
Postretirement Plans | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Net actuarial loss | 4.1 | 3.3 |
Net prior service cost | (1.8) | (3.3) |
Amounts recognized in accumulated other comprehensive income | $ 2.3 |
Other Postretirement Benefit 98
Other Postretirement Benefit Plans (Summary of Estimated Amount Amortized From Accumulated Other Comprehensive Income (Loss) Into Net Periodic Pension Cost) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |
Net actuarial loss | $ 15.8 |
Postretirement Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Net actuarial loss | 0.2 |
Net prior service cost | (1.4) |
Estimated amount of actuarial losses that will be amortized | $ (1.2) |
Other Postretirement Benefit 99
Other Postretirement Benefit Plans (Summary of Weighted-Average Assumptions Used to Determine Pension Benefit Obligations) (Details) - Postretirement Plans | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Postretirement benefit obligations discount rate | 4.13% | 4.63% |
Postretirement benefit cost discount rate | 4.63% | 4.38% |
Other Postretirement Benefit100
Other Postretirement Benefit Plans (Assumed Health Care Cost Trend Rates) (Details) - Postretirement Plans | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Health care cost trend rate assumed for next year | 6.50% | 7.00% |
Rate to which the cost trend is assumed to decline (ultimate trend rate) | 4.50% | 5.00% |
Year the rate reaches the ultimate trend rate | 2,024 | 2,020 |
Other Comprehensive Income (Nar
Other Comprehensive Income (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Equity [Abstract] | |||
Loss Adjustment Expense | 40.00% | 40.00% | 40.00% |
Percentage Of Other Operating Expenses | 60.00% | 60.00% | 60.00% |
Accelerated recognition of unamortized losses | $ 12.1 |
Other Comprehensive Income (Cha
Other Comprehensive Income (Changes in Other Comprehensive Income) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Unrealized gains (losses) arising during period, Pre-Tax | $ 95.9 | $ (199.3) | $ 138.7 |
Amount of realized gains from sales and other, Pre-tax | 36.5 | 39.6 | 55.3 |
Portion of other-than-temporary impairment losses recognized in earnings, Pre-tax | 27.9 | 27.2 | 5.5 |
Net unrealized gains (losses), Pre-tax | 87.3 | (211.7) | 88.9 |
Net actuarial gain (loss) arising during the period, Pre-Tax | (43.1) | (3.5) | (33.6) |
Loss on settlement of pension obligation, Pre-Tax | 12.1 | ||
Amortization of net actuarial loss and prior service cost recognized as net periodic benefit cost, Pre-tax | 9.9 | 12.7 | 10 |
Foreign currency translation recognized during the period, Pre-tax | (5.1) | (11.1) | (7.1) |
Other comprehensive income (loss), Pre-tax | 49 | (213.6) | 70.3 |
Unrealized gains (losses) arising during period, Tax Benefit (Expense) | (33.4) | 69.5 | (45.7) |
Amount of realized gains from sales and other, Tax Benefit (Expense) | (8) | 0.7 | 0.3 |
Portion of other-than-temporary impairment losses recognized in earnings, Tax Benefit (Expense) | (9.8) | (9.5) | (1.9) |
Net unrealized gains (losses), Tax Benefit (Expense) | (51.2) | 60.7 | (47.3) |
Net actuarial gain (loss) arising during the period, Tax Benefit (Expense) | 12.8 | 0.7 | 11 |
Loss on settlement of pension obligation, Tax Benefit (Expense) | (4.2) | ||
Amortization of net actuarial loss and prior service cost recognized as net periodic benefit cost, Tax Benefit (Expense) | (3.5) | (4.2) | (3.5) |
Foreign currency translation recognized during the period, Tax Benefit (Expense) | 1.8 | 3.9 | 2.5 |
Other comprehensive income (loss), Tax Benefit (Expense) | (40.1) | 61.1 | (41.5) |
Unrealized gains (losses) arising during period, Net of Tax | 62.5 | (129.8) | 93 |
Amount of realized gains from sales and other, Net of Tax | (44.5) | (38.9) | (55) |
Portion of other-than-temporary impairment losses recognized in earnings, Net of Tax | 18.1 | 17.7 | 3.6 |
Total available-for-sale securities | 36.1 | (151) | 41.6 |
Net actuarial gain (loss) arising in the period, Net of Tax | (30.3) | (2.8) | (22.6) |
Loss on settlement of pension obligation, Net of Tax | 7.9 | ||
Amortization of net actuarial loss and prior service cost recognized as net periodic benefit cost, Net of Tax | 6.4 | 8.5 | 6.5 |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Total | (3.3) | (7.2) | (4.6) |
Total other comprehensive income (loss), net of tax | 8.9 | (152.5) | 28.8 |
Net of pre-tax, ceded unrealized gains (losses) | 0.8 | ||
The Hanover Insurance Group [Member] | |||
Total other comprehensive income (loss), net of tax | $ 8.9 | $ (152.5) | $ 28.8 |
Other Comprehensive Income (Rec
Other Comprehensive Income (Reclassifications out of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Net realized gains from sales and other | $ 36.5 | $ 46.3 | $ 55.6 | ||||||||
Total losses and expenses | (4,753.5) | (4,594.6) | (4,689.6) | ||||||||
Net other-than-temporary impairment losses on investments recognized in earnings | (27.9) | (26.8) | (5.5) | ||||||||
Total before tax | 192.3 | 439.4 | 378 | ||||||||
Tax benefit (expense) | (36.2) | (108.6) | (95.7) | ||||||||
Income from continuing operations | $ (12.2) | $ 88.3 | $ 1.9 | $ 78.1 | $ 77.8 | $ 77.2 | $ 120.9 | $ 54.9 | 156.1 | 330.8 | 282.3 |
Other, net of tax | (1) | 0.7 | (0.3) | ||||||||
Net of tax | $ (13.5) | $ 88.4 | $ 2 | $ 78.2 | $ 77.6 | $ 78.3 | $ 120.7 | $ 54.9 | 155.1 | 331.5 | 282 |
Reclassification out of Accumulated Other Comprehensive Income | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Net of tax | 19.8 | 12.7 | 37 | ||||||||
Reclassification out of Accumulated Other Comprehensive Income | Net Unrealized Appreciation (Depreciation) on Investments: | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Net realized gains from sales and other | 36.4 | 39.9 | 55.2 | ||||||||
Net other-than-temporary impairment losses on investments recognized in earnings | (27.9) | (26.8) | (5.5) | ||||||||
Total before tax | 8.5 | 13.1 | 49.7 | ||||||||
Tax benefit (expense) | 17.8 | 8.7 | 1.6 | ||||||||
Income from continuing operations | 26.3 | 21.8 | 51.3 | ||||||||
Other, net of tax | (0.1) | (0.6) | 0.1 | ||||||||
Net of tax | 26.2 | 21.2 | 51.4 | ||||||||
Reclassification out of Accumulated Other Comprehensive Income | Defined Benefit Pension and Postretirement Plans | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Total losses and expenses | (9.9) | (12.7) | (22.1) | ||||||||
Tax benefit (expense) | 3.5 | 4.2 | 7.7 | ||||||||
Net of tax | $ (6.4) | $ (8.5) | $ (14.4) |
Stock-based Compensation Pla104
Stock-based Compensation Plans (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | May 20, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 12 | $ 12.3 | $ 15.1 | ||
Tax benefit from compensation expense | $ 4.2 | 4.3 | 5.3 | ||
Vesting period | 3 years | ||||
Award expiration Period | 10 years | ||||
Cash received for options exercised | $ 15.8 | 15.9 | 10.9 | ||
Intrinsic value of options exercised | 21.1 | $ 38.7 | $ 10.6 | ||
Aggregate intrinsic value, outstanding | 31.2 | ||||
Aggregate intrinsic value, exercisable | $ 16.5 | ||||
Weighted average remaining contractual life, outstanding (in years) | 8 years 1 month 6 days | ||||
Weighted average remaining contractual life, exercisable (in years) | 6 years 6 months | ||||
Weighted average grant date fair value of options granted | $ 10.83 | $ 9.72 | $ 8.96 | ||
Fair value of vested shares | $ 26.8 | $ 20.4 | |||
Share-based Compensation Arrangement by Share-Based Payment Award, Options, Tax Expense Realized from Options Exercised | $ 5.6 | $ 9.7 | $ 5.9 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Reduction in Shares Available for Grant per Share Issued | 3.8 | ||||
Vesting Each Year [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting rate | 33.33% | 33.33% | 33.33% | 33.33% | |
2014 Stock Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares authorized under plan | 6,100,000 | ||||
Number of shares available for grant | 5,332,623 | ||||
ESPP Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares authorized under plan | 2,500,000 | ||||
Number of shares available for grant | 2,411,811 | ||||
SIP Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares authorized under plan | 750,000 | ||||
Number of shares available for grant | 699,018 | ||||
Employee Stock Option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation expense | $ 5 | ||||
Unrecognized compensation expense, weighted average period of recognition | 1 year 7 months 6 days | ||||
Performance-based restricted stock units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
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% | ||||
Granted, Shares | 1,949 | ||||
Increase as grant in period, percentage | 100.00% | ||||
Decrease as forfeited, percentage | 100.00% | ||||
Intrinsic value of awards vested | $ 5.8 | $ 2.6 | $ 0.3 | ||
Performance metric achieved | 100.00% | ||||
Performance And Market-Based Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation expense | $ 17.4 | ||||
Unrecognized compensation expense, weighted average period of recognition | 2 years 4 months 24 days | ||||
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 | 150.00% | ||||
Aggregate instrinsic value | $ 10.5 | ||||
Weighted average remaining contractual life | 2 years 1 month 6 days | ||||
Performance And Market-Based Restricted Stock Units | 2013 Grants [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 3 years | ||||
Granted, Shares | 2,268 | 3,125 | |||
Granted, Weighted Average Grant Date Fair Value | $ 41.77 | $ 42.44 | |||
Performance And Market-Based Restricted Stock Units | 2013 Grants [Member] | Vesting Rate After Three Years [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 3 years | ||||
Performance And Market-Based Restricted Stock Units | 2014 Grants [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted, Weighted Average Grant Date Fair Value | $ 57 | ||||
Performance And Market-Based Restricted Stock Units | 2012 Grants [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted, Shares | 30,134 | 36,875 | 2,888 | ||
Granted, Weighted Average Grant Date Fair Value | $ 36.47 | $ 43.31 | |||
Increase as grant in period, percentage | 100.00% | ||||
Performance And Market-Based Restricted Stock Units | 2012 and 2013 Grants [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Increase as grant in period, percentage | 100.00% | 100.00% | |||
Market-based awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted, Shares | 87,213 | 80,738 | 56,625 | ||
Restricted Stock and Restricted Stock Units [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Intrinsic value of awards vested | $ 5.4 | $ 4.4 | $ 4.2 | ||
Aggregate instrinsic value | $ 24.5 | ||||
Weighted average remaining contractual life | 1 year 4 months 24 days | ||||
Market-Based Awards That Achieved Payout In Excess Of 100% [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted, Shares | 30,453 |
Stock-based Compensation Pla105
Stock-based Compensation Plans (Summary of Stock Option Plan Activity) (Details) - $ / shares | 12 Months Ended | |||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||||
Shares | ||||||
Outstanding, beginning of period, Shares | 1,619,948 | [1] | 2,236,620 | [1] | 2,049,173 | |
Granted, Shares | 587,340 | 663,900 | 687,700 | |||
Exercised, Shares | (589,666) | (1,051,664) | (444,200) | |||
Forfeited or cancelled, Shares | [1] | (221,470) | (228,908) | (56,053) | ||
Outstanding, end of period, Shares | [1] | 1,396,152 | 1,619,948 | 2,236,620 | ||
Weighted Average Exercise Price | ||||||
Outstanding, beginning of period, Weighted Average Exercise Price | $ 56.57 | [1] | $ 46.61 | [1] | $ 41.18 | |
Granted, Weighted Average Exercise Price | 82.17 | 70.34 | 58.06 | |||
Exercised, Weighted Average Exercise Price | 48.99 | 44.47 | 39.33 | |||
Forfeited or cancelled, Weighted Average Exercise Price | [1] | 68.61 | 54.78 | 45.99 | ||
Outstanding, end of period, Weighted Average Exercise Price | [1] | $ 68.63 | $ 56.57 | $ 46.61 | ||
Additional Disclosures | ||||||
Exercisable, end of year (Shares) | 441,256 | 360,585 | 726,321 | |||
Exercisable, end of year (Weighted Average Exercise Price) | $ 53.59 | $ 46.10 | $ 43.55 | |||
Chief Executive Officer [Member] | ||||||
Additional Disclosures | ||||||
Shares forfeited or cancelled that are no longer expected to vest | 128,334 | |||||
[1] | Included in outstanding shares at the end of 2015 in this table and in subsequent metrics were 128,334 options that were previously granted to the Company's former CEO. These options were subsequently forfeited in 2016 and are included in the table in the amounts forfeited or cancelled in 2016. |
Stock-based Compensation Pla106
Stock-based Compensation Plans (Schedule of Stock Options by Exercise Price Range) (Details) | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Exercise Price Range One [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices, Lower Range Limit | $ 34.19 |
Range of Exercise Prices, Upper Range Limit | $ 46.47 |
Options Outstanding, Number | shares | 188,603 |
Options Outstanding, Weighted Average Remaining Contractual Lives | 5 years 1 month 24 days |
Options Outstanding, Weighted Average Exercise Price | $ 40.64 |
Options Currently Exercisable, Number | shares | 188,603 |
Options Currently Exercisable, Weighted Average Exercise Price | $ 40.64 |
Exercise Price Range Two [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices, Lower Range Limit | 57.99 |
Range of Exercise Prices, Upper Range Limit | $ 62.57 |
Options Outstanding, Number | shares | 269,907 |
Options Outstanding, Weighted Average Remaining Contractual Lives | 7 years 1 month 24 days |
Options Outstanding, Weighted Average Exercise Price | $ 58.05 |
Options Currently Exercisable, Number | shares | 145,994 |
Options Currently Exercisable, Weighted Average Exercise Price | $ 58.06 |
Exercise Price Range Three [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices, Lower Range Limit | 69.09 |
Range of Exercise Prices, Upper Range Limit | $ 73.30 |
Options Outstanding, Number | shares | 381,182 |
Options Outstanding, Weighted Average Remaining Contractual Lives | 8 years 2 months 1 day |
Options Outstanding, Weighted Average Exercise Price | $ 70.30 |
Options Currently Exercisable, Number | shares | 105,910 |
Options Currently Exercisable, Weighted Average Exercise Price | $ 70.30 |
Exercise Price Range Four [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices, Lower Range Limit | 74.88 |
Range of Exercise Prices, Upper Range Limit | $ 90.42 |
Options Outstanding, Number | shares | 556,460 |
Options Outstanding, Weighted Average Remaining Contractual Lives | 9 years 4 months 17 days |
Options Outstanding, Weighted Average Exercise Price | $ 82.11 |
Options Currently Exercisable, Number | shares | 749 |
Options Currently Exercisable, Weighted Average Exercise Price | $ 79.54 |
Stock-based Compensation Pla107
Stock-based Compensation Plans (Schedule of Stock Option Valuation Assumptions) (Details) - Employee Stock Option | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Expected volatility, minimum | 18.08% | 17.63% | 18.07% |
Expected volatility, maximum | 21.31% | 22.24% | 24.38% |
Weighted average expected volatility | 19.57% | 20.19% | 23.00% |
Risk-free interest rate, minimum | 0.77% | 0.70% | 0.53% |
Risk-free interest rate, maximum | 1.97% | 1.75% | 1.92% |
Minimum [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Dividend yield | 2.04% | 2.03% | 2.07% |
Expected term, in years | 2 years 6 months | 2 years 6 months | 2 years 6 months |
Maximum [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Dividend yield | 2.46% | 2.37% | 2.55% |
Expected term, in years | 5 years 6 months | 5 years 6 months | 5 years 6 months |
Stock-based Compensation Pla108
Stock-based Compensation Plans (Summary of Restricted Stock Activity) (Details) - $ / shares | 12 Months Ended | |||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||||
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 | 525,980 | |||
Granted, Shares | 143,107 | 93,631 | 102,131 | |||
Vested, Shares | (139,183) | (138,307) | (231,078) | |||
Forfeited, Shares | (36,758) | (38,350) | (12,110) | |||
Outstanding, end of period, Shares | 269,063 | 301,897 | 384,923 | |||
Outstanding, beginning of period, Weighted Average Grant Date Fair Value | $ 54.54 | $ 45.63 | $ 41.20 | |||
Granted, Weighted Average Grant Date Fair Value | 83.43 | 70.75 | 58.78 | |||
Vested, Weighted Average Grant Date Fair Value | 42.97 | 41.22 | 41.45 | |||
Forfeited, Weighted Average Grant Date Fair Value | 69.07 | 52.75 | 43.67 | |||
Outstanding, end of period, Weighted Average Grant Date Fair Value | $ 73.91 | $ 54.54 | $ 45.63 | |||
Performance Shares [Member] | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Outstanding, beginning of period, Shares | 196,142 | [1] | 218,338 | [1] | 184,626 | |
Granted, Shares | 126,796 | 82,025 | 60,338 | |||
Vested, Shares | (144,141) | (82,748) | (22,826) | |||
Forfeited, Shares | [1] | (63,740) | (21,473) | (3,800) | ||
Outstanding, end of period, Shares | [1] | 115,057 | 196,142 | 218,338 | ||
Outstanding, beginning of period, Weighted Average Grant Date Fair Value | $ 47.89 | [1] | $ 44.24 | [1] | $ 40.42 | |
Granted, Weighted Average Grant Date Fair Value | 73.42 | 48.55 | 55.73 | |||
Vested, Weighted Average Grant Date Fair Value | 40.95 | 38.99 | 44.78 | |||
Forfeited, Weighted Average Grant Date Fair Value | [1] | 58.54 | 47.53 | 37.90 | ||
Outstanding, end of period, Weighted Average Grant Date Fair Value | [1] | $ 78.82 | $ 47.89 | $ 44.24 | ||
Chief Executive Officer [Member] | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Shares forfeited or cancelled that are no longer expected to vest | 128,334 | |||||
Chief Executive Officer [Member] | Market-Based Restricted Stock Units [Member] | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Shares forfeited or cancelled that are no longer expected to vest | 56,500 | |||||
[1] | Included in outstanding shares at the end of 2015 were 56,500 market-based restricted stock units that were previously granted to the Company's former CEO. These units were subsequently forfeited in 2016 and are included above in the amounts forfeited in 2016. |
Earnings Per Share and Share109
Earnings Per Share and Shareholders Equity Transactions (Narrative) (Details) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Earnings Per Share and Shareholders’ Equity Transactions [Abstract] | |||
Antidilutive securities excluded from calculation of earnings per share | 0.6 | 0.6 | 0.7 |
Repurchases common stock, authorized | $ 900 | ||
Repurchases common stock, available for repurchases | $ 183.6 | ||
Repurchases common stock, shares | 1.3 | ||
Repurchases common stock, value | $ 105.6 |
Earnings Per Share and Share110
Earnings Per Share and Shareholders’ Equity Transactions (Information Regarding Basic and Diluted Earnings Per Share) (Details) - $ / shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Basic shares used in the calculation of earnings per share | 42.8 | 43.9 | 44 |
Diluted shares used in the calculation of earnings per share | 43.2 | 44.8 | 44.9 |
Per share effect of dilutive securities on income from continuing operations | $ (0.04) | $ (0.14) | $ (0.12) |
Per share effect of dilutive securities on income from net income | $ (0.04) | $ (0.15) | $ (0.13) |
Employee Stock Option | |||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Dilutive effect of securities | 0.2 | 0.5 | 0.5 |
Non-Vested Stock Grants | |||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Dilutive effect of securities | 0.2 | 0.4 | 0.4 |
Dividend Restrictions (Details)
Dividend Restrictions (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
NEW HAMPSHIRE | ||||
Statutory Accounting Practices [Line Items] | ||||
Percentage of policyholder's surplus distributes as dividends and other distributions | 10.00% | |||
Dividends declared | $ 0 | $ 0 | $ 0 | |
MICHIGAN | ||||
Statutory Accounting Practices [Line Items] | ||||
Percentage of policyholder's surplus distributes as dividends and other distributions | 10.00% | |||
Dividends declared | $ 70,000,000 | 63,000,000 | 66,000,000 | |
U.K. [Member] | ||||
Statutory Accounting Practices [Line Items] | ||||
Dividends declared | 79,500,000 | $ 61,300,000 | $ 68,700,000 | |
Maximum [Member] | MICHIGAN | ||||
Statutory Accounting Practices [Line Items] | ||||
Maximum dividends payable without prior approval of state regulators | $ 30,000,000 | |||
Scenario, Forecast [Member] | NEW HAMPSHIRE | ||||
Statutory Accounting Practices [Line Items] | ||||
Maximum dividends payable without prior approval of state regulators | $ 216,800,000 | |||
Scenario, Forecast [Member] | MICHIGAN | ||||
Statutory Accounting Practices [Line Items] | ||||
Maximum dividends payable without prior approval of state regulators | 100,000,000 | |||
Increase in maximum dividends payable without prior approval of state regulators | $ 70,000,000 |
Segment Information (Narrative)
Segment Information (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2016segment | |
Segment Information [Abstract] | |
Operating segments | 4 |
Segment Information (Financial
Segment Information (Financial Information with Respect to Business Segments) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | |||||||||||
Operating revenues | $ 4,937.2 | $ 5,014.5 | $ 5,017.5 | ||||||||
Net realized investment gains | 8.6 | 19.5 | 50.1 | ||||||||
Total revenues | $ 1,255 | $ 1,241.2 | $ 1,222 | $ 1,227.6 | $ 1,204.7 | $ 1,233.5 | $ 1,297.1 | $ 1,298.7 | 4,945.8 | 5,034 | 5,067.6 |
Net investment income | 279.4 | 279.1 | 270.3 | ||||||||
Interest on debt | (54.9) | (60.6) | (65.8) | ||||||||
Operating income before income taxes | 267.9 | 405.5 | 341 | ||||||||
Gain on disposal of U.K. motor business | 1.1 | 38.4 | |||||||||
Loss from settlement of pension obligation | (12.1) | ||||||||||
Net loss from repayment of debt | (88.3) | (24.1) | (0.1) | ||||||||
Other non-operating items | 3 | 0.1 | (0.9) | ||||||||
Income before income taxes | 192.3 | 439.4 | 378 | ||||||||
Operating Segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating income (loss) before interest expense and income taxes | 322.8 | 466.1 | 406.8 | ||||||||
Commercial Lines [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating revenues | 2,485 | 2,391.7 | 2,239 | ||||||||
Underwriting income (loss) | (122) | (12.7) | (8.3) | ||||||||
Net investment income | 158.5 | 156.3 | 149.4 | ||||||||
Other income (expense) | (0.6) | (0.3) | (1.2) | ||||||||
Operating income (loss) before interest expense and income taxes | 35.9 | 143.3 | 139.9 | ||||||||
Personal Lines [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating revenues | 1,552.4 | 1,511.3 | 1,491 | ||||||||
Underwriting income (loss) | 103.8 | 72 | 22.1 | ||||||||
Net investment income | 69.5 | 72.5 | 71.9 | ||||||||
Other income (expense) | 5.1 | 4.8 | 5 | ||||||||
Operating income (loss) before interest expense and income taxes | 178.4 | 149.3 | 99 | ||||||||
Chaucer [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating revenues | 891.4 | 1,104.1 | 1,279.7 | ||||||||
Underwriting income (loss) | 80.3 | 131.5 | 122.5 | ||||||||
Net investment income | 45.7 | 45.9 | 44.2 | ||||||||
Other income (expense) | 0.8 | 6.3 | 10.9 | ||||||||
Operating income (loss) before interest expense and income taxes | 126.8 | 183.7 | 177.6 | ||||||||
Other [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating revenues | 8.4 | 7.4 | 7.8 | ||||||||
Underwriting income (loss) | (10.8) | (1.9) | (3.1) | ||||||||
Net investment income | 5.7 | 4.4 | 4.8 | ||||||||
Other expense | (13.2) | (12.7) | (11.4) | ||||||||
Operating income (loss) before interest expense and income taxes | $ (18.3) | $ (10.2) | $ (9.7) |
Segment Information (Identifiab
Segment Information (Identifiable Assets by Business Segment) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Segment Reporting Information [Line Items] | ||
Discontinued operations | $ 79.5 | $ 83 |
Identifiable assets | 14,220.4 | 13,781.2 |
U.S. Companies | ||
Segment Reporting Information [Line Items] | ||
Identifiable assets | 10,225.4 | 9,616 |
Chaucer | ||
Segment Reporting Information [Line Items] | ||
Identifiable assets | $ 3,915.5 | $ 4,082.2 |
Segment Information (Gross Writ
Segment Information (Gross Written Premium by Geographical Area) (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | |||
Gross written premium, percentage | 100.00% | 100.00% | 100.00% |
UNITED STATES | |||
Segment Reporting Information [Line Items] | |||
Gross written premium, percentage | 85.00% | 81.00% | 78.00% |
U.K. [Member] | |||
Segment Reporting Information [Line Items] | |||
Gross written premium, percentage | 4.00% | 6.00% | |
Worldwide And Other | |||
Segment Reporting Information [Line Items] | |||
Gross written premium, percentage | 15.00% | 15.00% | 16.00% |
Lease Commitments (Details)
Lease Commitments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Lease Commitments [Abstract] | |||
Rental expenses for operating leases | $ 18.5 | $ 17.4 | $ 20.4 |
Future minimum rental payments | 61.7 | ||
Future minimum rental payments, 2017 | 16.7 | ||
Future minimum rental payments, 2018 | 15.1 | ||
Future minimum rental payments, 2019 | 12.2 | ||
Future minimum rental payments, 2020 | 9.6 | ||
Future minimum rental payments, 2021 and thereafter | $ 8.1 |
Reinsurance (Narrative) (Detail
Reinsurance (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Effects of Reinsurance [Line Items] | ||||
Property and casualty premiums earned, Ceded | [1],[2] | $ 720.2 | $ 765.2 | $ 665.9 |
Property and casualty losses and LAE, Ceded | [1],[3] | 512.9 | 436.8 | 358 |
Reinsurance recoverable on paid and unpaid losses and unearned premiums | 2,611.8 | 2,635 | ||
MCCA [Member] | ||||
Effects of Reinsurance [Line Items] | ||||
Property and casualty premiums earned, Ceded | 58.6 | 67.7 | 73.4 | |
Property and casualty losses and LAE, Ceded | 75 | 78.8 | $ 99.2 | |
Reinsurance recoverable on paid and unpaid losses and unearned premiums | $ 911.2 | 906.5 | ||
MCCA [Member] | Reinsurance Receivable [Member] | ||||
Effects of Reinsurance [Line Items] | ||||
Percentage of reinsurance receivable represented by segment | 34.90% | |||
Lloyd’s Syndicates [Member] | ||||
Effects of Reinsurance [Line Items] | ||||
Reinsurance recoverable on paid and unpaid losses and unearned premiums | $ 506.8 | $ 606.5 | ||
Lloyd’s Syndicates [Member] | Reinsurance Receivable [Member] | ||||
Effects of Reinsurance [Line Items] | ||||
Percentage of reinsurance receivable represented by segment | 19.40% | |||
[1] | Effective June 30, 2015, the Company transferred its U.K. motor business through a 100% reinsurance arrangement. This transaction resulted in the increase of approximately $196 million, $133 million and $90 million for ceded premiums written, premiums earned and losses and LAE, respectively, for the year ended December 31, 2015. See also "Disposal of U.K. Motor Business" in Note 2 - "Dispositions of Businesses". | |||
[2] | The decrease in ceded reinsurance premiums from 2015 to 2016 is primarily due to the above mentioned non-recurring U.K. motor activity in 2015, partially offset by a planned increase in Chaucer's ceded reinsurance premiums as the Company continues to manage its overall underwriting risk. | |||
[3] | The increase in ceded losses and LAE from 2015 to 2016 is primarily due to the aforementioned increase in Chaucer's reinsurance purchases in 2016 and due to a higher level of ceded large loss activity in certain Chaucer and domestic lines in 2016. These increases in ceded losses and LAE were partially offset by the above mentioned non-recurring U.K. motor activity in 2015. |
Reinsurance (Schedule of Effect
Reinsurance (Schedule of Effects of Reinsurance) (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |||||
Effects Of Reinsurance [Line Items] | ||||||||
Property and casualty premiums written, Direct | $ 4,826 | $ 4,811.3 | $ 4,777.3 | |||||
Property and casualty premiums written, Assumed | [1] | 571.4 | 633.2 | 688.1 | ||||
Property and casualty premiums written, Ceded | $ (137.4) | (698.6) | [2],[3] | (827.7) | [2],[3] | (655.3) | [2],[3] | |
Property and casualty premiums written, Net | 4,698.8 | 4,616.8 | 4,810.1 | |||||
Property and casualty premiums earned, Direct | 4,746.6 | 4,814.4 | 4,679.8 | |||||
Property and casualty premiums earned, Assumed | [1] | 601.7 | 655.6 | 696.4 | ||||
Property and casualty premiums earned, Ceded | [2],[3] | (720.2) | (765.2) | (665.9) | ||||
Premiums Earned, Net, Total | $ 4,628.1 | $ 4,704.8 | $ 4,710.3 | |||||
Percentage of assumed to net premiums earned | 13.00% | 13.93% | 14.78% | |||||
Property and casualty losses and LAE, Direct | $ 3,188.2 | $ 3,008.5 | $ 3,019.4 | |||||
Property and casualty losses and LAE, Assumed | [1] | 289.4 | 312.4 | 266.1 | ||||
Property and casualty losses and LAE, Ceded | [2],[4] | (512.9) | (436.8) | (358) | ||||
Policyholder Benefits and Claims Incurred, Net, Total | $ 2,964.7 | 2,884.1 | 2,927.5 | |||||
reinsurance arrangement | 100.00% | |||||||
Written premiums ceded | $ 137.4 | $ 698.6 | [2],[3] | 827.7 | [2],[3] | 655.3 | [2],[3] | |
Premiums | [2],[3] | $ 720.2 | 765.2 | $ 665.9 | ||||
U.K. Motor Business [Member] | ||||||||
Effects Of Reinsurance [Line Items] | ||||||||
Property and casualty premiums written, Ceded | (196) | |||||||
Property and casualty premiums earned, Ceded | (133) | |||||||
Written premiums ceded | 196 | |||||||
Premiums | 133 | |||||||
Loss and loss adjustment expense | $ 90 | |||||||
[1] | Assumed reinsurance activity primarily relates to the Chaucer segment. | |||||||
[2] | Effective June 30, 2015, the Company transferred its U.K. motor business through a 100% reinsurance arrangement. This transaction resulted in the increase of approximately $196 million, $133 million and $90 million for ceded premiums written, premiums earned and losses and LAE, respectively, for the year ended December 31, 2015. See also "Disposal of U.K. Motor Business" in Note 2 - "Dispositions of Businesses". | |||||||
[3] | The decrease in ceded reinsurance premiums from 2015 to 2016 is primarily due to the above mentioned non-recurring U.K. motor activity in 2015, partially offset by a planned increase in Chaucer's ceded reinsurance premiums as the Company continues to manage its overall underwriting risk. | |||||||
[4] | The increase in ceded losses and LAE from 2015 to 2016 is primarily due to the aforementioned increase in Chaucer's reinsurance purchases in 2016 and due to a higher level of ceded large loss activity in certain Chaucer and domestic lines in 2016. These increases in ceded losses and LAE were partially offset by the above mentioned non-recurring U.K. motor activity in 2015. |
Liabilities For Outstanding 119
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2009 | Dec. 31, 2008 | Dec. 31, 2007 | ||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Favorable unfavorable loss and LAE development | $ 105.4 | $ (116.1) | $ (117.4) | ||||||||||
Percent reinsured | 100.00% | ||||||||||||
Net reserves | $ 6,949.4 | $ 6,949.4 | 6,574.4 | 6,391.7 | $ 6,231.5 | ||||||||
Commercial Lines [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Favorable unfavorable loss and LAE development | 161.5 | 219.3 | 47.2 | 14.1 | |||||||||
Other Commercial Lines [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Favorable unfavorable loss and LAE development | 169.7 | 59.2 | 7.1 | ||||||||||
Commercial Automobile Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Carried reserves for prior accident years | 1,107.7 | 1,107.7 | |||||||||||
Favorable unfavorable loss and LAE development | 27.5 | 23.3 | 15.1 | ||||||||||
Workers’ Compensation Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Carried reserves for prior accident years | 1,320 | 1,320 | |||||||||||
Favorable unfavorable loss and LAE development | (46.7) | (46.9) | (5.6) | ||||||||||
AIX Program Business [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Favorable unfavorable loss and LAE development | 75.1 | 74.7 | 10.9 | ||||||||||
Commercial Multiple Peril Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Carried reserves for prior accident years | 2,741 | 2,741 | |||||||||||
Favorable unfavorable loss and LAE development | 68.8 | 11.6 | (2.5) | ||||||||||
Chaucer [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Favorable unfavorable loss and LAE development | (132.8) | (153) | (127.8) | ||||||||||
Net reserves | 2,289.4 | 2,289.4 | 2,372.5 | ||||||||||
U.S. Companies | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Favorable unfavorable loss and LAE development | [1] | 174.1 | |||||||||||
U.S. Companies | Commercial Lines [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Favorable unfavorable loss and LAE development | 161.5 | ||||||||||||
U.S. Companies | Other Commercial Lines [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Favorable unfavorable loss and LAE development | 131.4 | ||||||||||||
U.S. Companies | Commercial Automobile Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Favorable unfavorable loss and LAE development | 18.4 | ||||||||||||
U.S. Companies | Workers’ Compensation Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Favorable unfavorable loss and LAE development | (32) | ||||||||||||
U.S. Companies | AIX Program Business [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Favorable unfavorable loss and LAE development | 49.6 | ||||||||||||
U.S. Companies | Commercial Multiple Peril Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Favorable unfavorable loss and LAE development | 43.7 | ||||||||||||
U.K. Motor Business [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Loss and LAE development trend | 90 | ||||||||||||
Year 2007 [Member] | Workers’ Compensation Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Carried reserves for prior accident years | [2] | 74.9 | 74.9 | 75.1 | 75.8 | 75.6 | $ 76.5 | $ 77.3 | $ 78.6 | $ 80.5 | $ 82.2 | $ 79.2 | |
Year 2008 [Member] | Workers’ Compensation Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Carried reserves for prior accident years | [2] | 80.4 | 80.4 | 80.5 | 79.8 | 80.6 | 81.5 | 81.5 | 88 | 93.9 | $ 88.9 | ||
Year 2009 [Member] | Workers’ Compensation Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Carried reserves for prior accident years | 77.5 | 77.5 | 77.5 | 79.2 | 79.4 | 80.3 | 82.5 | 87.6 | $ 93.8 | ||||
Year 2010 [Member] | Workers’ Compensation Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Carried reserves for prior accident years | 114.7 | 114.7 | 114.9 | 116.3 | 115.9 | 115.8 | 116.9 | $ 115.5 | |||||
Year 2011 [Member] | Commercial Automobile Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Carried reserves for prior accident years | 179.6 | 179.6 | 177 | 162.8 | 148 | 142.1 | 120.4 | ||||||
Year 2011 [Member] | Workers’ Compensation Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Carried reserves for prior accident years | 146.7 | 146.7 | 143.8 | 145.5 | 144.3 | 144.2 | 141.4 | ||||||
Year 2011 [Member] | Commercial Multiple Peril Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Carried reserves for prior accident years | 505.4 | 505.4 | 494.7 | 478.8 | 469.1 | 453.3 | $ 455.4 | ||||||
Year 2012 [Member] | Commercial Automobile Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Carried reserves for prior accident years | 198 | 198 | 189.9 | 173.7 | 167.5 | 166.8 | |||||||
Year 2012 [Member] | Workers’ Compensation Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Carried reserves for prior accident years | 162.9 | 162.9 | 157.2 | 165.2 | 171.1 | 176.3 | |||||||
Year 2012 [Member] | Commercial Multiple Peril Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Carried reserves for prior accident years | 475.6 | 475.6 | 459.7 | 456.2 | 462.8 | $ 480 | |||||||
Year 2013 [Member] | Commercial Automobile Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Carried reserves for prior accident years | 227.5 | 227.5 | 205.3 | 179.4 | 177.7 | ||||||||
Year 2013 [Member] | Workers’ Compensation Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Carried reserves for prior accident years | 154.4 | 154.4 | 160.1 | 167.4 | 179.3 | ||||||||
Year 2013 [Member] | Commercial Multiple Peril Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Carried reserves for prior accident years | 391.8 | 391.8 | 367.9 | 362.5 | $ 380 | ||||||||
Year 2014 [Member] | Commercial Automobile Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Carried reserves for prior accident years | 177.3 | 177.3 | 163.3 | 168.5 | |||||||||
Year 2014 [Member] | Workers’ Compensation Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Carried reserves for prior accident years | 154.7 | 154.7 | 172.9 | 182.1 | |||||||||
Year 2014 [Member] | Commercial Multiple Peril Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Carried reserves for prior accident years | 464.8 | 464.8 | 439.6 | 443.9 | |||||||||
Year 2015 [Member] | Commercial Automobile Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Carried reserves for prior accident years | 168.3 | 168.3 | 163.4 | ||||||||||
Year 2015 [Member] | Workers’ Compensation Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Carried reserves for prior accident years | 164.2 | 164.2 | 189.6 | ||||||||||
Year 2015 [Member] | Commercial Multiple Peril Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Carried reserves for prior accident years | 456.3 | 456.3 | 446 | ||||||||||
Year 2016 [Member] | Commercial Automobile Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Carried reserves for prior accident years | 157 | 157 | |||||||||||
Year 2016 [Member] | Workers’ Compensation Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Carried reserves for prior accident years | 189.6 | 189.6 | |||||||||||
Year 2016 [Member] | Commercial Multiple Peril Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Carried reserves for prior accident years | 447.1 | 447.1 | |||||||||||
Years 2005 To 2014 [Member] | Workers’ Compensation Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Favorable unfavorable loss and LAE development | 46.9 | ||||||||||||
Years 2011 To 2013 [Member] | Commercial Automobile Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Favorable unfavorable loss and LAE development | 23 | 23.3 | |||||||||||
Years 2011 To 2013 [Member] | Chaucer [Member] | Marine And Aviation Lines [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Favorable unfavorable loss and LAE development | (47.4) | ||||||||||||
Years 2011 To 2013 [Member] | Chaucer [Member] | Aviation Lines [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Favorable unfavorable loss and LAE development | 4 | ||||||||||||
Years 2011 To 2014 [Member] | Chaucer [Member] | Property Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Favorable unfavorable loss and LAE development | (43.8) | ||||||||||||
Years 2014 And Prior [Member] | Chaucer [Member] | Specialty Liability Lines [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Favorable unfavorable loss and LAE development | 15.3 | ||||||||||||
Years 2012 To 2014 [Member] | Commercial Automobile Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Favorable unfavorable loss and LAE development | 27.5 | ||||||||||||
Years 2012 To 2014 [Member] | Chaucer [Member] | Energy Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Favorable unfavorable loss and LAE development | (42.1) | ||||||||||||
Years 2012 To 2015 [Member] | Commercial Multiple Peril Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Favorable unfavorable loss and LAE development | 68.8 | ||||||||||||
Years 2013 To 2015 [Member] | Workers’ Compensation Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Favorable unfavorable loss and LAE development | 46.7 | ||||||||||||
Years 2013 To 2015 [Member] | Chaucer [Member] | Property Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Favorable unfavorable loss and LAE development | (45.6) | ||||||||||||
Years 2013 To 2015 [Member] | Chaucer [Member] | Energy Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Favorable unfavorable loss and LAE development | (31.9) | ||||||||||||
Years 2010, 2012 and 2013 [Member] | Chaucer [Member] | Marine And Aviation Lines [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Favorable unfavorable loss and LAE development | (34.2) | ||||||||||||
Years 2008, 2011 and 2013 [Member] | Chaucer [Member] | Specialty Liability Lines [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Favorable unfavorable loss and LAE development | (22.7) | ||||||||||||
Years 2008, 2009, 2017, and 2015 [Member] | Chaucer [Member] | Marine And Aviation Lines [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Favorable unfavorable loss and LAE development | (27.4) | ||||||||||||
Years 2010 and 2013 [Member] | Chaucer [Member] | Property Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Favorable unfavorable loss and LAE development | (30.6) | ||||||||||||
Years 2010 and 2013 [Member] | Chaucer [Member] | Specialty Liability Lines [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Favorable unfavorable loss and LAE development | (21.4) | ||||||||||||
Years 2009 To 2012 [Member] | Commercial Automobile Line [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Favorable unfavorable loss and LAE development | $ 23.1 | ||||||||||||
Asbestos Issue [Member] | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Net reserves | 61 | $ 61 | $ 57.7 | ||||||||||
Excluding Catastrophes [Member] | U.S. Companies | |||||||||||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | |||||||||||||
Favorable unfavorable loss and LAE development | $ 174.1 | $ 61.5 | |||||||||||
[1] | (in millions)Commercial multiple peril$ 43.7Workers' compensation (32.0)Commercial automobile 18.4Other commercial lines:AIX program business 49.6General liability 45.2Surety 37.9Umbrella (9.4)Other lines 8.1Total other commercial lines 131.4 Total Commercial Lines Segment 161.5Personal automobile 8.2Homeowners and other personal lines (3.0) Total Personal Lines Segment 5.2 Total Other Segment 7.4Total domestic business loss and LAE reserve development, excluding catastrophes(1)$ 174.1For the three months ended December 31, 2016, prior year reserve development for catastrophes was favorable of $2.0 million for the domestic business. | ||||||||||||
[2] | The incurred and cumulative paid losses and ALAE, IBNR and incurred claim counts retroactively include AIX business for all periods presented, including those periods that pre-date the acquisition of AIX on November 30, 2008. |
Liabilities For Outstanding 120
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses (Schedule of Liability for Unpaid Losses and Loss Adjustment Expenses) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Abstract] | |||
Gross loss and LAE reserves, beginning of year | $ 6,574.4 | $ 6,391.7 | $ 6,231.5 |
Reinsurance recoverable on unpaid losses, beginning of year | 2,280.8 | 1,983 | 2,030.4 |
Net loss and LAE reserves, beginning of year | 4,293.6 | 4,408.7 | 4,201.1 |
Net incurred losses and LAE in respect of losses occurring in current year | 2,859.3 | 3,000.2 | 3,044.9 |
Net incurred losses and LAE in respect of losses occurring in prior years | 105.4 | (116.1) | (117.4) |
Total incurred losses and LAE | 2,964.7 | 2,884.1 | 2,927.5 |
Net payments of losses and LAE in respect of losses occurring in Current year | 1,142.7 | 1,245.6 | 1,328.7 |
Net payments of losses and LAE in respect of losses occurring in Prior years | 1,367.2 | 1,418.4 | 1,398.9 |
Total payments | 2,509.9 | 2,664 | 2,727.6 |
Commutation of Chaucer Flagstone reinsurance agreement | 85.7 | ||
Transfer of U.K. motor business | (300.6) | ||
Effect of foreign exchange rate changes | (73.8) | (34.6) | (78) |
Net reserve for losses and LAE, end of year | 4,674.6 | 4,293.6 | 4,408.7 |
Reinsurance recoverable on unpaid losses, end of year | 2,274.8 | 2,280.8 | 1,983 |
Gross reserve for losses and LAE, end of year | $ 6,949.4 | $ 6,574.4 | $ 6,391.7 |
Liabilities For Outstanding 121
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses (Schedule of (Favorable)/Unfavorable Loss and LAE Reserve Development) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | |||||
Loss and LAE reserve development, including catastrophes | $ 105.4 | $ (116.1) | $ (117.4) | ||
U.S. Companies | |||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | |||||
Loss and LAE reserve development, including catastrophes | [1] | $ 174.1 | |||
Commercial Multiple Peril Line [Member] | |||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | |||||
Loss and LAE reserve development, including catastrophes | 68.8 | 11.6 | (2.5) | ||
Commercial Multiple Peril Line [Member] | U.S. Companies | |||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | |||||
Loss and LAE reserve development, including catastrophes | 43.7 | ||||
Workers’ Compensation Line [Member] | |||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | |||||
Loss and LAE reserve development, including catastrophes | (46.7) | (46.9) | (5.6) | ||
Workers’ Compensation Line [Member] | U.S. Companies | |||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | |||||
Loss and LAE reserve development, including catastrophes | (32) | ||||
Commercial Automobile Line [Member] | |||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | |||||
Loss and LAE reserve development, including catastrophes | 27.5 | 23.3 | 15.1 | ||
Commercial Automobile Line [Member] | U.S. Companies | |||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | |||||
Loss and LAE reserve development, including catastrophes | 18.4 | ||||
AIX Program Business [Member] | |||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | |||||
Loss and LAE reserve development, including catastrophes | 75.1 | 74.7 | 10.9 | ||
AIX Program Business [Member] | U.S. Companies | |||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | |||||
Loss and LAE reserve development, including catastrophes | 49.6 | ||||
General Liability [Member] | |||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | |||||
Loss and LAE reserve development, including catastrophes | 56 | 14.3 | 2.3 | ||
General Liability [Member] | U.S. Companies | |||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | |||||
Loss and LAE reserve development, including catastrophes | 45.2 | ||||
Surety Product Line [Member] | |||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | |||||
Loss and LAE reserve development, including catastrophes | 35.3 | 1.5 | (5.2) | ||
Surety Product Line [Member] | U.S. Companies | |||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | |||||
Loss and LAE reserve development, including catastrophes | 37.9 | ||||
Umbrella Line [Member] | |||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | |||||
Loss and LAE reserve development, including catastrophes | (8.9) | (17.8) | (1.4) | ||
Umbrella Line [Member] | U.S. Companies | |||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | |||||
Loss and LAE reserve development, including catastrophes | (9.4) | ||||
Other Lines [Member] | |||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | |||||
Loss and LAE reserve development, including catastrophes | 12.2 | (13.5) | 0.5 | ||
Other Lines [Member] | U.S. Companies | |||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | |||||
Loss and LAE reserve development, including catastrophes | 8.1 | ||||
Other Commercial Lines [Member] | |||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | |||||
Loss and LAE reserve development, including catastrophes | 169.7 | 59.2 | 7.1 | ||
Other Commercial Lines [Member] | U.S. Companies | |||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | |||||
Loss and LAE reserve development, including catastrophes | 131.4 | ||||
Commercial Lines [Member] | |||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | |||||
Loss and LAE reserve development, including catastrophes | 161.5 | 219.3 | 47.2 | 14.1 | |
Commercial Lines [Member] | U.S. Companies | |||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | |||||
Loss and LAE reserve development, including catastrophes | 161.5 | ||||
Personal Automobile Lines [Member] | |||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | |||||
Loss and LAE reserve development, including catastrophes | 4.8 | (7.2) | (5.9) | ||
Personal Automobile Lines [Member] | U.S. Companies | |||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | |||||
Loss and LAE reserve development, including catastrophes | 8.2 | ||||
Homeowners And Other Personal Lines [Member] | |||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | |||||
Loss and LAE reserve development, including catastrophes | 5.8 | (3.4) | 0.8 | ||
Homeowners And Other Personal Lines [Member] | U.S. Companies | |||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | |||||
Loss and LAE reserve development, including catastrophes | (3) | ||||
Personal Lines [Member] | |||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | |||||
Loss and LAE reserve development, including catastrophes | 10.6 | (10.6) | (5.1) | ||
Personal Lines [Member] | U.S. Companies | |||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | |||||
Loss and LAE reserve development, including catastrophes | 5.2 | ||||
Chaucer [Member] | |||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | |||||
Loss and LAE reserve development, including catastrophes | (132.8) | (153) | (127.8) | ||
Other Segment [Member] | |||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | |||||
Loss and LAE reserve development, including catastrophes | $ 8.3 | $ 0.3 | $ 1.4 | ||
Other Segment [Member] | U.S. Companies | |||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | |||||
Loss and LAE reserve development, including catastrophes | 7.4 | ||||
Catastrophes [Member] | U.S. Companies | |||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | |||||
Loss and LAE reserve development, including catastrophes | $ 2 | ||||
[1] | (in millions)Commercial multiple peril$ 43.7Workers' compensation (32.0)Commercial automobile 18.4Other commercial lines:AIX program business 49.6General liability 45.2Surety 37.9Umbrella (9.4)Other lines 8.1Total other commercial lines 131.4 Total Commercial Lines Segment 161.5Personal automobile 8.2Homeowners and other personal lines (3.0) Total Personal Lines Segment 5.2 Total Other Segment 7.4Total domestic business loss and LAE reserve development, excluding catastrophes(1)$ 174.1For the three months ended December 31, 2016, prior year reserve development for catastrophes was favorable of $2.0 million for the domestic business. |
Liabilities For Outstanding 122
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses (Schedule of Carried Reserves) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Gross | $ 6,949.4 | $ 6,574.4 | $ 6,391.7 | $ 6,231.5 |
Ceded | (2,274.8) | (2,280.8) | ||
Net | 4,674.6 | 4,293.6 | $ 4,408.7 | $ 4,201.1 |
Commercial And Other Line [Member] | ||||
Gross | 3,106 | 2,674.2 | ||
Ceded | (476.3) | (424.8) | ||
Net | 2,629.7 | 2,249.4 | ||
Personal Lines [Member] | ||||
Gross | 1,554 | 1,527.7 | ||
Ceded | (872.9) | (870.5) | ||
Net | 681.1 | 657.2 | ||
Chaucer [Member] | ||||
Gross | 2,289.4 | 2,372.5 | ||
Ceded | (925.6) | (985.5) | ||
Net | 1,363.8 | 1,387 | ||
Commercial Multiple Peril Line [Member] | Commercial And Other Line [Member] | ||||
Gross | 978 | 813.1 | ||
Ceded | (82.1) | (59.2) | ||
Net | 895.9 | 753.9 | ||
Workers’ Compensation Line [Member] | Commercial And Other Line [Member] | ||||
Gross | 715.5 | 713.1 | ||
Ceded | (171.4) | (178) | ||
Net | 544.1 | 535.1 | ||
Commercial Automobile Line [Member] | Commercial And Other Line [Member] | ||||
Gross | 431.7 | 390.3 | ||
Ceded | (27.2) | (28.4) | ||
Net | 404.5 | 361.9 | ||
Other Commercial Lines [Member] | Commercial And Other Line [Member] | ||||
Gross | 980.8 | 757.7 | ||
Ceded | (195.6) | (159.2) | ||
Net | 785.2 | 598.5 | ||
Personal Automobile Lines [Member] | Personal Lines [Member] | ||||
Gross | 1,416.8 | 1,395 | ||
Ceded | (865.6) | (863.5) | ||
Net | 551.2 | 531.5 | ||
Homeowners And Other Personal Lines [Member] | Personal Lines [Member] | ||||
Gross | 137.2 | 132.7 | ||
Ceded | (7.3) | (7) | ||
Net | 129.9 | 125.7 | ||
Core Lines [Member] | Chaucer [Member] | ||||
Gross | 1,832.4 | 1,767.6 | ||
Ceded | (552.5) | (508.5) | ||
Net | 1,279.9 | 1,259.1 | ||
Reinsured And Run-Off Lines [Member] | Chaucer [Member] | ||||
Gross | 457 | 604.9 | ||
Ceded | (373.1) | (477) | ||
Net | $ 83.9 | $ 127.9 |
Liabilities For Outstanding 123
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses (Schedule of Incurred Claims Development) (Details) $ in Millions | 12 Months Ended | 60 Months Ended | |||||||||
Dec. 31, 2011USD ($)item | Dec. 31, 2016USD ($)claim | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2010USD ($) | Dec. 31, 2009USD ($) | Dec. 31, 2008USD ($) | Dec. 31, 2007USD ($) | ||
Commercial Multiple Peril Line [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | $ 2,741 | ||||||||||
Cumulative Paid Losses and ALAE | 1,918.5 | ||||||||||
Unallocated loss adjustment expense | 17.7 | ||||||||||
Net reserves | 895.9 | ||||||||||
Commercial Multiple Peril Line [Member] | Year 2011 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | $ 455.4 | 505.4 | $ 494.7 | $ 478.8 | $ 469.1 | $ 453.3 | |||||
IBNR | $ 17.2 | ||||||||||
Cumulative Incurred Claim Count | claim | 19,163 | ||||||||||
Cumulative Paid Losses and ALAE | 217.8 | $ 471.5 | 454 | 418.6 | 381.5 | 328.5 | |||||
Commercial Multiple Peril Line [Member] | Year 2012 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | 475.6 | 459.7 | 456.2 | 462.8 | 480 | ||||||
IBNR | $ 20.5 | ||||||||||
Cumulative Incurred Claim Count | claim | 17,054 | ||||||||||
Cumulative Paid Losses and ALAE | $ 424.2 | 389.3 | 350.8 | 307.5 | 175.8 | ||||||
Commercial Multiple Peril Line [Member] | Year 2013 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | 391.8 | 367.9 | 362.5 | 380 | |||||||
IBNR | $ 33.9 | ||||||||||
Cumulative Incurred Claim Count | claim | 14,911 | ||||||||||
Cumulative Paid Losses and ALAE | $ 306.4 | 262.3 | 221.5 | 137.6 | |||||||
Commercial Multiple Peril Line [Member] | Year 2014 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | 464.8 | 439.6 | 443.9 | ||||||||
IBNR | $ 62.9 | ||||||||||
Cumulative Incurred Claim Count | claim | 16,102 | ||||||||||
Cumulative Paid Losses and ALAE | $ 316 | 267.8 | 171.7 | ||||||||
Commercial Multiple Peril Line [Member] | Year 2015 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | 456.3 | 446 | |||||||||
IBNR | $ 100.1 | ||||||||||
Cumulative Incurred Claim Count | claim | 15,810 | ||||||||||
Cumulative Paid Losses and ALAE | $ 260.1 | 161.9 | |||||||||
Commercial Multiple Peril Line [Member] | Year 2016 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | 447.1 | ||||||||||
IBNR | $ 181.7 | ||||||||||
Cumulative Incurred Claim Count | claim | 15,512 | ||||||||||
Cumulative Paid Losses and ALAE | $ 140.3 | ||||||||||
Commercial Multiple Peril Line [Member] | Years 2011 To 2016 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Total reserves for accident years | 822.5 | ||||||||||
Commercial Multiple Peril Line [Member] | Years 2010 And Prior [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Total reserves for accident years | 55.7 | ||||||||||
Workers’ Compensation Line [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | 1,320 | ||||||||||
Cumulative Paid Losses and ALAE | 879.3 | ||||||||||
Unallocated loss adjustment expense | 15.9 | ||||||||||
Net reserves | 544.1 | ||||||||||
Workers’ Compensation Line [Member] | Year 2007 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | [1] | 77.3 | 74.9 | 75.1 | 75.8 | 75.6 | 76.5 | $ 78.6 | $ 80.5 | $ 82.2 | $ 79.2 |
IBNR | [1] | $ 1.3 | |||||||||
Cumulative Incurred Claim Count | claim | [1] | 7,591 | |||||||||
Cumulative Paid Losses and ALAE | [1] | 59.6 | $ 67.3 | 66.5 | 65.5 | 63.9 | 62 | 54.4 | 46.5 | 34.9 | $ 15.1 |
Workers’ Compensation Line [Member] | Year 2008 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | [1] | 81.5 | 80.4 | 80.5 | 79.8 | 80.6 | 81.5 | 88 | 93.9 | 88.9 | |
IBNR | [1] | $ 1.6 | |||||||||
Cumulative Incurred Claim Count | claim | [1] | 8,930 | |||||||||
Cumulative Paid Losses and ALAE | [1] | 60.8 | $ 72.4 | 71 | 69.8 | 67.1 | 64.8 | 52.9 | 40.2 | $ 17.9 | |
Workers’ Compensation Line [Member] | Year 2009 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | 82.5 | 77.5 | 77.5 | 79.2 | 79.4 | 80.3 | 87.6 | 93.8 | |||
IBNR | $ 1.2 | ||||||||||
Cumulative Incurred Claim Count | claim | 8,014 | ||||||||||
Cumulative Paid Losses and ALAE | 54.6 | $ 70.8 | 69.8 | 68.6 | 65.4 | 61.6 | 41.2 | $ 19.2 | |||
Workers’ Compensation Line [Member] | Year 2010 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | 116.9 | 114.7 | 114.9 | 116.3 | 115.9 | 115.8 | 115.5 | ||||
IBNR | $ 2.6 | ||||||||||
Cumulative Incurred Claim Count | claim | 10,152 | ||||||||||
Cumulative Paid Losses and ALAE | 57.2 | $ 104.2 | 101 | 96.5 | 89.5 | 76.9 | $ 22.1 | ||||
Workers’ Compensation Line [Member] | Year 2011 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | 141.4 | 146.7 | 143.8 | 145.5 | 144.3 | 144.2 | |||||
IBNR | $ 7.5 | ||||||||||
Cumulative Incurred Claim Count | claim | 12,428 | ||||||||||
Cumulative Paid Losses and ALAE | 30 | $ 128 | 122.9 | 114 | 97.3 | 71.3 | |||||
Workers’ Compensation Line [Member] | Year 2012 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | 162.9 | 157.2 | 165.2 | 171.1 | 176.3 | ||||||
IBNR | $ 12.6 | ||||||||||
Cumulative Incurred Claim Count | claim | 12,983 | ||||||||||
Cumulative Paid Losses and ALAE | $ 130.7 | 120.1 | 102.6 | 74.8 | 30.4 | ||||||
Workers’ Compensation Line [Member] | Year 2013 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | 154.4 | 160.1 | 167.4 | 179.3 | |||||||
IBNR | $ 15.6 | ||||||||||
Cumulative Incurred Claim Count | claim | 11,612 | ||||||||||
Cumulative Paid Losses and ALAE | $ 114 | 101.2 | 74.6 | 30.9 | |||||||
Workers’ Compensation Line [Member] | Year 2014 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | 154.7 | 172.9 | 182.1 | ||||||||
IBNR | $ 22.3 | ||||||||||
Cumulative Incurred Claim Count | claim | 10,748 | ||||||||||
Cumulative Paid Losses and ALAE | $ 92.3 | 70.5 | 30.6 | ||||||||
Workers’ Compensation Line [Member] | Year 2015 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | 164.2 | 189.6 | |||||||||
IBNR | $ 38.2 | ||||||||||
Cumulative Incurred Claim Count | claim | 11,158 | ||||||||||
Cumulative Paid Losses and ALAE | $ 65.7 | 28 | |||||||||
Workers’ Compensation Line [Member] | Year 2016 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | 189.6 | ||||||||||
IBNR | $ 75.1 | ||||||||||
Cumulative Incurred Claim Count | claim | 14,103 | ||||||||||
Cumulative Paid Losses and ALAE | $ 33.9 | ||||||||||
Workers’ Compensation Line [Member] | Years 2007 To 2016 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Total reserves for accident years | 440.7 | ||||||||||
Workers’ Compensation Line [Member] | Years 2006 And Prior [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Total reserves for accident years | 87.5 | ||||||||||
Commercial Automobile Line [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | 1,107.7 | ||||||||||
Cumulative Paid Losses and ALAE | 717.1 | ||||||||||
Unallocated loss adjustment expense | 4.3 | ||||||||||
Net reserves | 404.5 | ||||||||||
Commercial Automobile Line [Member] | Year 2011 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | 120.4 | 179.6 | 177 | 162.8 | 148 | 142.1 | |||||
IBNR | $ 2.4 | ||||||||||
Cumulative Incurred Claim Count | claim | 15,457 | ||||||||||
Cumulative Paid Losses and ALAE | 27.7 | $ 170.2 | 160.5 | 135.5 | 102.4 | 64.7 | |||||
Commercial Automobile Line [Member] | Year 2012 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | 198 | 189.9 | 173.7 | 167.5 | 166.8 | ||||||
IBNR | $ 5.7 | ||||||||||
Cumulative Incurred Claim Count | claim | 14,786 | ||||||||||
Cumulative Paid Losses and ALAE | $ 176.3 | 156.9 | 117 | 77 | 33.3 | ||||||
Commercial Automobile Line [Member] | Year 2013 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | 227.5 | 205.3 | 179.4 | 177.7 | |||||||
IBNR | $ 16.7 | ||||||||||
Cumulative Incurred Claim Count | claim | 15,309 | ||||||||||
Cumulative Paid Losses and ALAE | $ 176.3 | 137.6 | 89.6 | 35.9 | |||||||
Commercial Automobile Line [Member] | Year 2014 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | 177.3 | 163.3 | 168.5 | ||||||||
IBNR | $ 28.7 | ||||||||||
Cumulative Incurred Claim Count | claim | 13,464 | ||||||||||
Cumulative Paid Losses and ALAE | $ 102.7 | 70.8 | 33.1 | ||||||||
Commercial Automobile Line [Member] | Year 2015 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | 168.3 | 163.4 | |||||||||
IBNR | $ 51 | ||||||||||
Cumulative Incurred Claim Count | claim | 12,723 | ||||||||||
Cumulative Paid Losses and ALAE | $ 63.8 | 32.2 | |||||||||
Commercial Automobile Line [Member] | Year 2016 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | 157 | ||||||||||
IBNR | $ 87.6 | ||||||||||
Cumulative Incurred Claim Count | claim | 10,748 | ||||||||||
Cumulative Paid Losses and ALAE | $ 27.8 | ||||||||||
Commercial Automobile Line [Member] | Years 2011 To 2016 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Total reserves for accident years | 390.6 | ||||||||||
Commercial Automobile Line [Member] | Years 2010 And Prior [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Total reserves for accident years | 9.6 | ||||||||||
Personal Automobile Lines [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | 1,703.6 | ||||||||||
Cumulative Paid Losses and ALAE | 1,231.2 | ||||||||||
Unallocated loss adjustment expense | 12.3 | ||||||||||
Net reserves | 551.2 | ||||||||||
Personal Automobile Lines [Member] | Year 2012 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | 379.8 | 376.5 | 366.3 | 366.9 | 358.4 | ||||||
IBNR | $ 5.7 | ||||||||||
Cumulative Incurred Claim Count | claim | 51,700 | ||||||||||
Cumulative Paid Losses and ALAE | $ 361.8 | 342.2 | 305.1 | 234.6 | 126.6 | ||||||
Personal Automobile Lines [Member] | Year 2013 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | 343 | 338.3 | 339.6 | 348.2 | |||||||
IBNR | $ 6.5 | ||||||||||
Cumulative Incurred Claim Count | claim | 49,278 | ||||||||||
Cumulative Paid Losses and ALAE | $ 310.1 | 273.3 | 210.5 | 115.3 | |||||||
Personal Automobile Lines [Member] | Year 2014 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | 308.8 | 304.1 | 323.1 | ||||||||
IBNR | $ 15.1 | ||||||||||
Cumulative Incurred Claim Count | claim | 43,268 | ||||||||||
Cumulative Paid Losses and ALAE | $ 241.1 | 188.6 | 107.2 | ||||||||
Personal Automobile Lines [Member] | Year 2015 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | 334.1 | 327.4 | |||||||||
IBNR | $ 40.5 | ||||||||||
Cumulative Incurred Claim Count | claim | 41,989 | ||||||||||
Cumulative Paid Losses and ALAE | $ 205.4 | 112.9 | |||||||||
Personal Automobile Lines [Member] | Year 2016 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | 337.9 | ||||||||||
IBNR | $ 109.7 | ||||||||||
Cumulative Incurred Claim Count | claim | 39,477 | ||||||||||
Cumulative Paid Losses and ALAE | $ 112.8 | ||||||||||
Personal Automobile Lines [Member] | Years 2012 To 2016 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Total reserves for accident years | 472.4 | ||||||||||
Personal Automobile Lines [Member] | Years 2011 And Prior [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Total reserves for accident years | 66.5 | ||||||||||
Chaucer [Member] | Core Lines [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | [2] | 2,566.6 | |||||||||
Cumulative Paid Losses and ALAE | [2] | 1,471.1 | |||||||||
Nuclear Energy | [2] | 31.8 | |||||||||
Unallocated loss adjustment expense | [2] | 23.1 | |||||||||
Net reserves | [2] | 1,279.9 | |||||||||
Chaucer [Member] | Core Lines [Member] | Year 2011 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | [2],[3] | 640.9 | 575.7 | 586.2 | 586 | 605.3 | 597.7 | ||||
IBNR | [2],[3] | $ 33.4 | |||||||||
Cumulative Incurred Claim Count | claim | [2],[3] | 6,940 | |||||||||
Cumulative Paid Losses and ALAE | [2],[3] | $ 134.2 | $ 513.2 | 489.3 | 438.6 | 391 | 296.3 | ||||
Number of catastrophic events | item | 3 | ||||||||||
Incurred losses | $ 125 | ||||||||||
Chaucer [Member] | Core Lines [Member] | Year 2011 [Member] | Earthquake [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Excess of incurred losses | 30 | ||||||||||
Chaucer [Member] | Core Lines [Member] | Year 2011 [Member] | Flood [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Excess of incurred losses | $ 30 | ||||||||||
Chaucer [Member] | Core Lines [Member] | Year 2012 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | [2] | 318 | 325 | 342.4 | 337.2 | 420.5 | |||||
IBNR | [2] | $ 31.5 | |||||||||
Cumulative Incurred Claim Count | claim | [2] | 5,690 | |||||||||
Cumulative Paid Losses and ALAE | [2] | $ 246.7 | 228.7 | 200 | 144.7 | $ 55.4 | |||||
Chaucer [Member] | Core Lines [Member] | Year 2013 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | [2] | 360.1 | 369.4 | 381.8 | 418.2 | ||||||
IBNR | [2] | $ 54 | |||||||||
Cumulative Incurred Claim Count | claim | [2] | 5,618 | |||||||||
Cumulative Paid Losses and ALAE | [2] | $ 257.5 | 228.4 | 158.4 | $ 58.2 | ||||||
Chaucer [Member] | Core Lines [Member] | Year 2014 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | [2] | 397.1 | 391.6 | 457.7 | |||||||
IBNR | [2] | $ 80.4 | |||||||||
Cumulative Incurred Claim Count | claim | [2] | 6,934 | |||||||||
Cumulative Paid Losses and ALAE | [2] | $ 227.8 | 162.2 | $ 52 | |||||||
Chaucer [Member] | Core Lines [Member] | Year 2015 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | [2] | 410.5 | 488.4 | ||||||||
IBNR | [2] | $ 136.8 | |||||||||
Cumulative Incurred Claim Count | claim | [2] | 7,216 | |||||||||
Cumulative Paid Losses and ALAE | [2] | $ 146.8 | $ 52.5 | ||||||||
Chaucer [Member] | Core Lines [Member] | Year 2016 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Losses and ALAE, Net of Reinsurance | [2] | 505.2 | |||||||||
IBNR | [2] | $ 329.9 | |||||||||
Cumulative Incurred Claim Count | claim | [2] | 4,404 | |||||||||
Cumulative Paid Losses and ALAE | [2] | $ 79.1 | |||||||||
Chaucer [Member] | Core Lines [Member] | Years 2011 To 2016 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Total reserves for accident years | [2] | 1,095.5 | |||||||||
Chaucer [Member] | Core Lines [Member] | Years 2010 And Prior [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Total reserves for accident years | [2] | 129.5 | |||||||||
Chaucer [Member] | Core Lines [Member] | Years 2012 To 2016 [Member] | |||||||||||
Claims Development [Line Items] | |||||||||||
Excess of incurred losses | $ 30 | ||||||||||
[1] | The incurred and cumulative paid losses and ALAE, IBNR and incurred claim counts retroactively include AIX business for all periods presented, including those periods that pre-date the acquisition of AIX on November 30, 2008. | ||||||||||
[2] | Total reserves for 2011 - 2016 accident years (incurred - paid) 1,095.5Total reserves for 2010 and prior accident years 129.5Reserves for nuclear energy classes 31.8Unallocated loss adjustment expense and other 23.1Net reserves at December 31, 2016$ 1,279.9Chaucer incurred losses and ALAE and paid losses and ALAE that are denominated in foreign currencies are converted to U.S. dollars as of December 31, 2016, the most recent balance sheet date, for all years presented. | ||||||||||
[3] | The incurred and cumulative paid losses and ALAE, IBNR and reported claim counts retroactively includes the 6 month period that pre-dates the acquisition of Chaucer on July 1, 2011. Additionally, during 2011 Chaucer experienced an elevated level of high severity catastrophe events. For example, three such events, the February 2011 New Zealand earthquake, March 2011 Japanese tsunami and October 2011 Thailand floods totaled approximately $125 million of incurred losses, and each event was in excess of $30 million. Chaucer experienced no catastrophe events in excess of $30 million from 2012 through 2016. |
Liabilities For Outstanding 124
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses (Computation of Historical Claims on Paid and Incurred Claims Data, Net of Reinsurance) (Details) | Dec. 31, 2016 |
Commercial Multiple Peril Line [Member] | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
1 | 36.50% |
2 | 22.60% |
3 | 10.10% |
4 | 8.90% |
5 | 7.20% |
6 | 3.50% |
Workers’ Compensation Line [Member] | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
1 | 20.00% |
2 | 27.30% |
3 | 16.50% |
4 | 10.10% |
5 | 5.90% |
6 | 3.50% |
7 | 2.60% |
8 | 1.60% |
9 | 1.60% |
10 | 1.00% |
Commercial Automobile Line [Member] | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
1 | 17.30% |
2 | 21.30% |
3 | 20.10% |
4 | 18.50% |
5 | 11.90% |
6 | 5.40% |
Personal Automobile Lines [Member] | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
1 | 33.80% |
2 | 27.60% |
3 | 17.90% |
4 | 10.30% |
5 | 5.20% |
Chaucer [Member] | Core Lines [Member] | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
1 | 16.40% |
2 | 27.00% |
3 | 17.50% |
4 | 8.40% |
5 | 7.20% |
6 | 4.10% |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) | Dec. 11, 2009plaintiffclaim | Mar. 12, 2007 |
Commitments and Contingencies [Abstract] | ||
Participant's retirement age | 65 years | |
Named plaintiffs | plaintiff | 2 | |
Claims dismissed | 2 | |
New claims | 3 |
Statutory Financial Informat126
Statutory Financial Information (Narrative) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Statutory Financial Information [Abstract] | |||
Minimum staturtory capital and surplus required | $ 442 | $ 378.5 | $ 374.6 |
Statutory Financial Informat127
Statutory Financial Information (Statutory Accounting Practices Disclosure) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statutory Financial Information [Abstract] | |||
Statutory Net Income | $ 158 | $ 175.9 | $ 204.3 |
Statutory Capital and Surplus | $ 2,173.4 | $ 2,192.8 | $ 2,057.1 |
Quarterly Results of Operati128
Quarterly Results of Operations (Narrative) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | [1] | Jun. 30, 2016 | Mar. 31, 2016 | [1] | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |||
Quarterly Financial Data [Line Items] | |||||||||||||||
Gain (loss) on the repurchase of debt | $ (88,300,000) | $ (24,100,000) | $ (100,000) | ||||||||||||
Prior accident years | $ 1,367,200,000 | $ 1,418,400,000 | $ 1,398,900,000 | ||||||||||||
Net income per share, Diluted | $ (0.32) | [1] | $ 2.06 | $ 0.05 | [1] | $ 1.80 | $ 1.76 | $ 1.74 | $ 2.68 | $ 1.22 | $ 3.59 | $ 7.40 | $ 6.28 | ||
Senior debentures maturing April 15, 2026 [Member] | |||||||||||||||
Quarterly Financial Data [Line Items] | |||||||||||||||
Aggregate principal amount | $ 375,000,000 | $ 375,000,000 | $ 375,000,000 | ||||||||||||
Debt instrument interest rate | 4.50% | 4.50% | 4.50% | ||||||||||||
Senior Notes [Member] | |||||||||||||||
Quarterly Financial Data [Line Items] | |||||||||||||||
Gain (loss) on the repurchase of debt | $ (86,100,000) | ||||||||||||||
After-tax effect on diluted earnings per share | $ 1.29 | ||||||||||||||
Restatement Adjustment [Member] | |||||||||||||||
Quarterly Financial Data [Line Items] | |||||||||||||||
Prior accident years | $ 174,100,000 | ||||||||||||||
Net income per share, Diluted | $ 2.66 | ||||||||||||||
[1] | Per diluted share amounts in the fourth quarter exclude commons stock equivalents since the impact of these instruments was antidilutive. |
Quarterly Results of Operati129
Quarterly Results of Operations (Schedule of Quarterly Financial Information) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |||||
Quarterly Results of Operations [Abstract] | |||||||||||||||
Total revenues | $ 1,255 | $ 1,241.2 | $ 1,222 | $ 1,227.6 | $ 1,204.7 | $ 1,233.5 | $ 1,297.1 | $ 1,298.7 | $ 4,945.8 | $ 5,034 | $ 5,067.6 | ||||
Income (loss) from continuing operations | (12.2) | 88.3 | 1.9 | 78.1 | 77.8 | 77.2 | 120.9 | 54.9 | 156.1 | 330.8 | 282.3 | ||||
Net income (loss) | $ (13.5) | $ 88.4 | $ 2 | $ 78.2 | $ 77.6 | $ 78.3 | $ 120.7 | $ 54.9 | $ 155.1 | $ 331.5 | $ 282 | ||||
Income from (loss) continuing operations, Basic | $ (0.29) | $ 2.07 | $ 0.04 | $ 1.82 | $ 1.80 | $ 1.75 | $ 2.74 | $ 1.24 | $ 3.65 | $ 7.53 | $ 6.41 | ||||
Income from (loss) continuing operations, Diluted | (0.29) | [1] | 2.06 | [1] | 0.04 | [1] | 1.79 | [1] | 1.76 | 1.72 | 2.69 | 1.22 | 3.61 | 7.39 | 6.29 |
Net income (loss) per share, Basic | (0.32) | 2.07 | 0.05 | 1.82 | 1.79 | 1.78 | 2.73 | 1.24 | 3.63 | 7.55 | 6.41 | ||||
Net income (loss) per share, Diluted | (0.32) | [1] | 2.06 | [1] | 0.05 | [1] | 1.80 | [1] | 1.76 | 1.74 | 2.68 | 1.22 | $ 3.59 | $ 7.40 | $ 6.28 |
Dividends declared per share | $ 0.50 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.41 | $ 0.41 | $ 0.41 | |||||||
[1] | Per diluted share amounts in the fourth quarter exclude commons stock equivalents since the impact of these instruments was antidilutive. |
SCHEDULE I SUMMARY OF INVEST130
SCHEDULE I SUMMARY OF INVESTMENTS - OTHER THAN INVESTMENTS IN RELATED PARTIES (Details) $ in Millions | Dec. 31, 2016USD ($) | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Cost | $ 8,263.4 | [1] |
Value | 8,449.3 | |
Amount at which shown in the balance sheet | 8,449.5 | |
U.S. Treasury and government agencies | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Cost | 1,272.6 | [1] |
Value | 1,265.5 | |
Amount at which shown in the balance sheet | 1,265.5 | |
States, municipalities and political subdivisions | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Cost | 1,065.4 | [1] |
Value | 1,095 | |
Amount at which shown in the balance sheet | 1,095 | |
Foreign governments | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Cost | 235.8 | [1] |
Value | 240.7 | |
Amount at which shown in the balance sheet | 240.7 | |
Public Utilities Bonds | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Cost | 454.1 | [1] |
Value | 461.9 | |
Amount at which shown in the balance sheet | 461.9 | |
All other corporate bonds | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Cost | 4,204.2 | [1] |
Value | 4,265.2 | |
Amount at which shown in the balance sheet | 4,265.2 | |
Fixed Maturities | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Cost | 7,232.1 | [1] |
Value | 7,328.3 | |
Amount at which shown in the balance sheet | 7,328.3 | |
Public utilities | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Cost | 96.3 | [1] |
Value | 120.6 | |
Amount at which shown in the balance sheet | 120.6 | |
Banks, trust and insurance companies | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Cost | 21.7 | [1] |
Value | 25.9 | |
Amount at which shown in the balance sheet | 25.9 | |
Industrial, miscellaneous and all other | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Cost | 376.8 | [1] |
Value | 426.9 | |
Amount at which shown in the balance sheet | 426.9 | |
Nonredeemable preferred stocks | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Cost | 3.6 | [1] |
Value | 11 | |
Amount at which shown in the balance sheet | 11 | |
Equity Securities Investment Summary [Member] | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Cost | 498.4 | [1] |
Value | 584.4 | |
Amount at which shown in the balance sheet | 584.4 | |
Mortgage loans on real estate | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Cost | 297.6 | [1],[2] |
Value | 297.2 | [2] |
Amount at which shown in the balance sheet | 297.6 | [2] |
Real estate | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Cost | 8.6 | [1] |
Value | 8.6 | |
Amount at which shown in the balance sheet | 8.6 | |
Other Investments | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Cost | 223.7 | [1],[3] |
Value | 227.8 | [3] |
Amount at which shown in the balance sheet | 227.6 | [3] |
Short-term Investments | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Cost | 3 | [1] |
Value | 3 | |
Amount at which shown in the balance sheet | 3 | |
Loan Participations and Assignments [Member] | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Cost | $ 296.6 | |
[1] | For equity securities, represents original cost, and for fixed maturities, original cost reduced by repayments and adjusted for amortization of premiums and accretion of discounts. | |
[2] | Includes $296.6 million of participating interests in commercial mortgage loans originated and serviced by a third-party. The Company shares, on a pro-rata basis, in all related cash flows of the underlying mortgages. Due to certain reacquisition rights retained by the third-party in the loan participation arrangement, the Company accounted for its participatory interest in mortgage loans as secured borrowings. | |
[3] | The cost of other long-term investments differs from the carrying value due to market value changes in the Company's equity ownership of limited partnership investments. The value of other long-term investments differs from the carrying value due to cost basis partnership investments. |
SCHEDULE II CONDENSED FINANC131
SCHEDULE II CONDENSED FINANCIAL INFORMATION OF REGISTRANT PARENT COMPANY ONLY (STATEMENTS OF INCOME) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net investment income | $ 279.4 | $ 279.1 | $ 270.3 | ||||||||
Net realized gains from sales and other | 36.5 | 46.3 | 55.6 | ||||||||
Total revenues | $ 1,255 | $ 1,241.2 | $ 1,222 | $ 1,227.6 | $ 1,204.7 | $ 1,233.5 | $ 1,297.1 | $ 1,298.7 | 4,945.8 | 5,034 | 5,067.6 |
Interest expense | 54.9 | 60.6 | 65.8 | ||||||||
Loss from repayment of debt | 88.3 | 24.1 | 0.1 | ||||||||
Other operating expenses | 611.5 | 631 | 656.2 | ||||||||
Total losses and expenses | 4,753.5 | 4,594.6 | 4,689.6 | ||||||||
Income tax benefit | (16.8) | (32.7) | (4.5) | ||||||||
Income from continuing operations | (12.2) | 88.3 | 1.9 | 78.1 | 77.8 | 77.2 | 120.9 | 54.9 | 156.1 | 330.8 | 282.3 |
Net income | $ (13.5) | $ 88.4 | $ 2 | $ 78.2 | $ 77.6 | $ 78.3 | $ 120.7 | $ 54.9 | 155.1 | 331.5 | 282 |
Net loss from discontinued operations, income tax benefit (expense) | 2.8 | 0.5 | 0.1 | ||||||||
Other comprehensive income (loss), Net of Tax | 8.9 | (152.5) | 28.8 | ||||||||
Comprehensive income | 164 | 179 | 310.8 | ||||||||
The Hanover Insurance Group [Member] | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net investment income | 4.9 | 4.1 | 3.9 | ||||||||
Net realized gains from sales and other | 1 | ||||||||||
Interest income from loan to subsidiary | 22.4 | 22.5 | 22.5 | ||||||||
Other income | 0.5 | 0.1 | 0.1 | ||||||||
Total revenues | 27.8 | 27.7 | 26.5 | ||||||||
Interest expense | 46.1 | 53.9 | 54.7 | ||||||||
Loss from repayment of debt | 88.3 | 24.1 | 0.1 | ||||||||
Employee benefit related expenses | 7 | 7 | 11.1 | ||||||||
Benefit related to acquired businesses | (0.7) | ||||||||||
Interest expense on loan from subsidiary | 6.3 | ||||||||||
Other operating expenses | 8.6 | 7.6 | 7.5 | ||||||||
Total losses and expenses | 156.3 | 91.9 | 73.4 | ||||||||
Net loss before income taxes and equity in income of subsidiaries | (128.5) | (64.2) | (46.9) | ||||||||
Income tax benefit | 75.6 | 49.5 | 52.1 | ||||||||
Equity in income of subsidiaries | 207 | 345.2 | 277.4 | ||||||||
Income from continuing operations | 154.1 | 330.5 | 282.6 | ||||||||
Income (loss) from discontinued operations (net of income tax benefit Income (loss) from discontinued operations (net of income tax benefit | 1 | 1 | (0.6) | ||||||||
Net income | 155.1 | 331.5 | 282 | ||||||||
Net loss from discontinued operations, income tax benefit (expense) | 1.7 | 0.4 | 0.2 | ||||||||
Other comprehensive income (loss), Net of Tax | 8.9 | (152.5) | 28.8 | ||||||||
Comprehensive income | $ 164 | $ 179 | $ 310.8 |
SCHEDULE II CONDENSED FINANC132
SCHEDULE II CONDENSED FINANCIAL INFORMATION OF REGISTRANT PARENT COMPANY ONLY (BALANCE SHEETS) (Details) - USD ($) $ / shares in Units, $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Assets | |||||
Fixed maturities - at fair value (amortized cost of $116.5 and $121.1) | $ 7,331.3 | $ 6,983.4 | |||
Equity securities - at fair value (cost of $1.0) | 584.4 | 576.6 | |||
Cash and cash equivalents | 282.6 | 338.8 | $ 373.3 | $ 486.2 | |
Deferred income tax receivable | 377.8 | 355.1 | |||
Deferred income tax receivable | 115.1 | 137.9 | |||
Other assets | 479.8 | 483.7 | |||
Total assets | 14,220.4 | 13,781.2 | |||
Liabilities | |||||
Debt | 786.4 | 803.1 | |||
Total liabilities | 11,362.9 | 10,936.8 | |||
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 | 1,846.7 | 1,833.5 | |||
Accumulated other comprehensive income | 62.8 | 53.9 | |||
Retained earnings | 1,875.6 | 1,803.5 | |||
Treasury stock at cost (18.1 and 17.5 million) | (928.2) | (847.1) | |||
Total shareholders' equity | 2,857.5 | 2,844.4 | 2,844 | ||
Total liabilities and shareholders' equity | 14,220.4 | 13,781.2 | |||
Fixed maturities, amortized cost | 7,235.1 | 6,934 | |||
Equity securities, cost | $ 498.4 | $ 528.5 | |||
Preferred stock, par value | $ 0.01 | $ 0.01 | |||
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | |||
Preferred stock, shares 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 | 18,100,000 | 17,500,000 | |||
Loan receivable from subsidiary | $ 300 | $ 300 | |||
The Hanover Insurance Group [Member] | |||||
Assets | |||||
Fixed maturities - at fair value (amortized cost of $116.5 and $121.1) | 116.4 | 121.3 | |||
Equity securities - at fair value (cost of $1.0) | 1.1 | 1.1 | |||
Cash and cash equivalents | 10.1 | 8.6 | $ 14.5 | $ 20.7 | |
Investments in subsidiaries | 3,513.8 | 3,262.5 | |||
Net receivable from subsidiaries | [1] | 16.6 | 222.8 | ||
Deferred income tax receivable | 31.7 | 7.4 | |||
Current income taxes receivable | 1.1 | ||||
Other assets | 1.1 | 2.5 | |||
Total assets | 3,690.8 | 3,627.3 | |||
Liabilities | |||||
Expenses and state taxes payable | 8 | 18.1 | |||
Current income tax payable | 30.5 | ||||
Interest payable | 8.2 | 7.9 | |||
Debt | 786.6 | 756.9 | |||
Total liabilities | 833.3 | 782.9 | |||
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 | 1,846.7 | 1,833.5 | |||
Accumulated other comprehensive income | 62.8 | 53.9 | |||
Retained earnings | 1,875.6 | 1,803.5 | |||
Treasury stock at cost (18.1 and 17.5 million) | (928.2) | (847.1) | |||
Total shareholders' equity | 2,857.5 | 2,844.4 | |||
Total liabilities and shareholders' equity | 3,690.8 | 3,627.3 | |||
Fixed maturities, amortized cost | 116.5 | 121.1 | |||
Equity securities, cost | $ 1 | $ 1 | |||
Preferred stock, par value | $ 0.01 | $ 0.01 | |||
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | |||
Preferred stock, shares 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 | 18,100,000 | 17,500,000 | |||
[1] | Net receivable from subsidiaries in 2015 includes a $300.0 million note receivable from The Hanover Insurance Holdings, Ltd., parent company of Chaucer Holdings, Ltd. In 2016, this note receivable was contributed to The Hanover (Barbados) Capital, SRL, a wholly-owned subsidiary of THG. |
SCHEDULE II CONDENSED FINANC133
SCHEDULE II CONDENSED FINANCIAL INFORMATION OF REGISTRANT PARENT COMPANY ONLY (STATEMENTS OF CASH FLOWS) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash Flows From Operating Activities | |||||||||||
Net income | $ (13.5) | $ 88.4 | $ 2 | $ 78.2 | $ 77.6 | $ 78.3 | $ 120.7 | $ 54.9 | $ 155.1 | $ 331.5 | $ 282 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Net realized investment gains | (8.6) | (19.1) | (50.2) | ||||||||
Loss from retirement of debt | 88.3 | 24.1 | 0.1 | ||||||||
Deferred income tax (benefit) expense | (13.2) | 53.1 | 68.6 | ||||||||
Change in expenses and taxes payable | 6.9 | (1) | 12.5 | ||||||||
Net cash provided by operating activities | 737.6 | 438.4 | 564.7 | ||||||||
Cash Flows From Investing Activities | |||||||||||
Proceeds from disposals and maturities of fixed maturities | 1,602.3 | 1,696.4 | 1,323.1 | ||||||||
Purchase of fixed maturities | (2,020.9) | (1,792.2) | (1,710.1) | ||||||||
Net cash used in investing activities | (495.4) | (171.5) | (600.7) | ||||||||
Cash Flows From Financing Activities | |||||||||||
Proceeds from debt borrowings | 370.7 | ||||||||||
Repurchases of debt | (475.4) | (114.3) | (0.7) | ||||||||
Repurchase of common stock | (105.6) | (127.3) | (20.4) | ||||||||
Dividends paid to shareholders | (80.4) | (74.2) | (67) | ||||||||
Proceeds from exercise of employee stock options | 16.2 | 16.6 | 12.6 | ||||||||
Other financing activities | (14.1) | (11.2) | (3.6) | ||||||||
Net cash used in financing activities | (295) | (294.7) | (71.7) | ||||||||
Net change in cash and cash equivalents | (56.2) | (34.5) | (112.9) | ||||||||
Cash and cash equivalents, beginning of year | 338.8 | 373.3 | 338.8 | 373.3 | 486.2 | ||||||
Cash and cash equivalents, end of year | 282.6 | 338.8 | 282.6 | 338.8 | 373.3 | ||||||
The Hanover Insurance Group [Member] | |||||||||||
Cash Flows From Operating Activities | |||||||||||
Net income | 155.1 | 331.5 | 282 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
(Gain) loss from discontinued operations | (1) | (1) | 0.6 | ||||||||
Net realized investment gains | (1) | ||||||||||
Loss from retirement of debt | 88.3 | 24.1 | 0.1 | ||||||||
Equity in net income of subsidiaries | (207) | (345.2) | (277.4) | ||||||||
Dividends received from subsidiaries | 228.1 | 5.1 | 70.2 | ||||||||
Deferred income tax (benefit) expense | (39) | 35.7 | (29.9) | ||||||||
Change in expenses and taxes payable | 20.7 | (2.6) | 11.4 | ||||||||
Change in net receivable from subsidiaries | 30.6 | (5.9) | 16.9 | ||||||||
Other, net | 8.3 | 6.1 | 4.3 | ||||||||
Net cash provided by operating activities | 284.1 | 46.8 | 78.2 | ||||||||
Cash Flows From Investing Activities | |||||||||||
Proceeds from disposals and maturities of fixed maturities | 82.4 | 70 | 25.6 | ||||||||
Purchase of fixed maturities | (11.9) | (28.6) | |||||||||
Net cash used for business acquisitions | (2.2) | (2.3) | (2.3) | ||||||||
Net cash used in investing activities | 80.2 | 55.8 | (5.3) | ||||||||
Cash Flows From Financing Activities | |||||||||||
Proceeds from debt borrowings | 370.7 | ||||||||||
Proceeds from long-term intercompany borrowings | 125 | ||||||||||
(Repayments) Proceeds from short-term intercompany borrowings | 102.7 | (102.7) | |||||||||
Repurchases of debt | (571.9) | (15.1) | (0.7) | ||||||||
Repurchase of common stock | (105.6) | (127.3) | (20.4) | ||||||||
Dividends paid to shareholders | (80.4) | (74.2) | (67) | ||||||||
Proceeds from exercise of employee stock options | 16.2 | 16.6 | 12.6 | ||||||||
Other financing activities | (14.1) | (11.2) | (3.6) | ||||||||
Net cash used in financing activities | (362.8) | (108.5) | (79.1) | ||||||||
Net change in cash and cash equivalents | 1.5 | (5.9) | (6.2) | ||||||||
Cash and cash equivalents, beginning of year | $ 8.6 | $ 14.5 | 8.6 | 14.5 | 20.7 | ||||||
Cash and cash equivalents, end of year | $ 10.1 | $ 8.6 | $ 10.1 | $ 8.6 | $ 14.5 |
SCHEDULE II CONDENSED FINANC134
SCHEDULE II CONDENSED FINANCIAL INFORMATION OF REGISTRANT PARENT COMPANY ONLY (Narrative) (Details) - The Hanover Insurance Group [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Supplementary Insurance Information, by Segment [Line Items] | |||
Cash portion of dividends received from unconsolidated subsidiaries | $ 228.1 | $ 5.1 | $ 70.2 |
Investment assets transferred to the parent company to settle dividend balances | $ 78.5 | $ 76.9 | $ 1 |
SCHEDULE III SUPPLEMENTARY I135
SCHEDULE III SUPPLEMENTARY INSURANCE INFORMATION (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Supplementary Insurance Information, by Segment [Line Items] | |||
Deferred acquisition costs | $ 517.5 | $ 508.8 | $ 525.7 |
Future policy benefits, losses, claims and loss expenses | 6,943 | 6,568.8 | 6,386.6 |
Unearned premiums | 2,561 | 2,540.8 | 2,583.9 |
Other policy claims and benefits payable | 6.4 | 5.6 | 5.1 |
Premium revenue | 4,628.1 | 4,704.8 | 4,710.3 |
Net investment income | 279.4 | 279.1 | 270.3 |
Benefits, claims, losses and settlement expenses | 2,964.7 | 2,884.1 | 2,927.5 |
Amortization of deferred acquisition costs | 1,035.2 | 1,033.2 | 1,040 |
Other operating expenses | 754.7 | 715.7 | 722.1 |
Premiums written | 4,698.8 | 4,616.8 | 4,810.1 |
Eliminations | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Future policy benefits, losses, claims and loss expenses | (10.2) | (8.3) | (5.5) |
Unearned premiums | (3.1) | (3.2) | (3.3) |
Other operating expenses | (7.6) | (7.4) | (7) |
Commercial, Personal and Other | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Deferred acquisition costs | 402.8 | 385.5 | 370.3 |
Future policy benefits, losses, claims and loss expenses | 4,663.8 | 4,204.6 | 3,966.3 |
Unearned premiums | 1,995.1 | 1,892.3 | 1,819.1 |
Other policy claims and benefits payable | 6.4 | 5.6 | 5.1 |
Premium revenue | 3,789.5 | 3,653.6 | 3,488.5 |
Net investment income | 233.7 | 233.2 | 226.1 |
Benefits, claims, losses and settlement expenses | 2,545.4 | 2,367.4 | 2,293.8 |
Amortization of deferred acquisition costs | 803.6 | 778 | 748.5 |
Other operating expenses | 593.7 | 508 | 480.4 |
Premiums written | 3,882.7 | 3,727.5 | 3,578.7 |
Chaucer [Member] | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Deferred acquisition costs | 114.7 | 123.3 | 155.4 |
Future policy benefits, losses, claims and loss expenses | 2,289.4 | 2,372.5 | 2,425.8 |
Unearned premiums | 569 | 651.7 | 768.1 |
Premium revenue | 838.6 | 1,051.2 | 1,221.8 |
Net investment income | 45.7 | 45.9 | 44.2 |
Benefits, claims, losses and settlement expenses | 419.3 | 516.7 | 633.7 |
Amortization of deferred acquisition costs | 231.6 | 255.2 | 291.5 |
Other operating expenses | 113.7 | 154.5 | 182.9 |
Premiums written | 816.1 | 889.3 | 1,231.4 |
Interest On Debt | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Other operating expenses | $ 54.9 | $ 60.6 | $ 65.8 |
SCHEDULE V VALUATION AND QUA136
SCHEDULE V VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||||||
Balance at beginning of period | $ 12.9 | $ 19.1 | $ 23.8 | |||||
Charged to costs and expenses | [1] | 12.1 | 9.7 | 10.3 | ||||
Charged to other accounts | [2] | 0.1 | 0.2 | (0.3) | ||||
Deductions | (8.3) | (16.1) | (14.7) | |||||
Balance at end of period | 16.8 | 12.9 | 19.1 | |||||
Allowance for doubtful accounts | ||||||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||||||
Balance at beginning of period | 3.2 | 3.2 | 3.1 | |||||
Charged to costs and expenses | [1] | 8.7 | 9.7 | 9.4 | ||||
Deductions | (8.2) | (9.7) | (9.3) | |||||
Balance at end of period | 3.7 | 3.2 | 3.2 | |||||
Allowance for uncollectible reinsurance recoverables | ||||||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||||||
Balance at beginning of period | 9.7 | [1],[3] | 15.9 | [3] | 20.7 | |||
Charged to costs and expenses | [1] | 3.4 | 0.9 | |||||
Charged to other accounts | [2] | 0.1 | [1] | 0.2 | [3] | (0.3) | ||
Deductions | (0.1) | [1] | (6.4) | [3] | (5.4) | |||
Balance at end of period | $ 13.1 | [1] | $ 9.7 | [1],[3] | $ 15.9 | [3] | ||
Allowance for uncollectible reinsurance recoverables | U.K. Motor Business [Member] | ||||||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||||||
Deductions | $ 5.4 | |||||||
[1] | 2016 activity primarily relates to the impairment of a receivable that is associated with a single reinsurance counterparty that was placed into conservation by the state of California in July 2016. This counterparty is not involved in the Company's ongoing reinsurance program and the entire receivable related to this counterparty resulted from to a one-time block reinsurance transaction that occurred in 2012 as part of the Company's exposure management actions. | |||||||
[2] | Amounts charged to other accounts include foreign exchange gains and losses. | |||||||
[3] | Includes a deduction of $5.4 million related to the transfer of the U.K. motor business on June 30, 2015. |
SCHEDULE VI SUPPLEMENTAL INF137
SCHEDULE VI SUPPLEMENTAL INFORMATION CONCERNING PROPERTY AND CASUALTY INSURANCE OPERATIONS (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Net incurred losses and LAE in respect of losses occurring in current year | $ 2,859.3 | $ 3,000.2 | $ 3,044.9 | ||
Net incurred losses and LAE in respect of losses occurring in prior years | (105.4) | 116.1 | 117.4 | ||
Reinsurance Recoverables On Unpaid Losses Property Casualty Liability | 2,274.8 | 2,280.8 | 1,983 | $ 2,030.4 | |
Prepaid premiums, gross | 222.4 | 256.2 | 197.8 | ||
Consolidated Property and Casualty Insurance Entity [Member] | |||||
Deferred acquisition costs | 517.5 | 508.8 | 525.7 | ||
Reserves for unpaid claims and claim adjustment expenses | [1] | 6,949.4 | 6,574.4 | 6,391.7 | |
Discount, if any, deducted from previous column | [2] | ||||
Unearned premiums | [1] | 2,561 | 2,540.8 | 2,583.9 | |
Earned premiums | 4,628.1 | 4,704.8 | 4,710.3 | ||
Net investment income | 279.4 | 279.1 | 270.3 | ||
Net incurred losses and LAE in respect of losses occurring in current year | [1] | 2,859.3 | 3,000.2 | 3,044.9 | |
Net incurred losses and LAE in respect of losses occurring in prior years | [2] | 105.4 | (116.1) | (117.4) | |
Amortization of deferred acquisition costs | [1] | 1,035.2 | 1,033.2 | 1,040 | |
Paid claims and claim adjustment expenses | 2,509.9 | 2,664 | 2,727.6 | ||
Premiums written | $ 4,698.8 | $ 4,616.8 | $ 4,810.1 | ||
[1] | Reserves for unpaid claims and claim adjustment expenses are shown gross of $2,274.8 million, $2,280.8 million and $1,983.0 million of reinsurance recoverable on unpaid losses in 2016, 2015 and 2014, respectively. Unearned premiums are shown gross of prepaid premiums of $222.4 million, $256.2 million and $197.8 million in 2016, 2015 and 2014, respectively. Reserves for unpaid claims and claims adjustment expense also include policyholder dividends. | ||||
[2] | The Company does not use discounting techniques |