Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 02, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | HANOVER INSURANCE GROUP, INC. | |
Entity Central Index Key | 944,695 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 42,538,764 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenues | ||
Premiums | $ 1,181.3 | $ 1,151.3 |
Net investment income | 71.1 | 68.3 |
Net realized investment gains (losses): | ||
Net realized gains from sales and other | 3.3 | 22.4 |
Net other-than-temporary impairment losses on investments recognized in earnings | (1.4) | (20.9) |
Total net realized investment gains | 1.9 | 1.5 |
Fees and other income | 6.6 | 6.5 |
Total revenues | 1,260.9 | 1,227.6 |
Losses and expenses | ||
Losses and loss adjustment expenses | 766.5 | 699.6 |
Amortization of deferred acquisition costs | 266.4 | 259.1 |
Interest expense | 12 | 14.7 |
Other operating expenses | 157 | 146.1 |
Total losses and expenses | 1,201.9 | 1,119.5 |
Income before income taxes | 59 | 108.1 |
Income tax expense (benefit): | ||
Current | 33.9 | 33.4 |
Deferred | (20.1) | (3.4) |
Total income tax expense | 13.8 | 30 |
Income from continuing operations | 45.2 | 78.1 |
Net gain from discontinued operations (net of tax benefit of $0.5 for the three months ended March 31, 2016) | 0.1 | |
Net income | $ 45.2 | $ 78.2 |
Basic: | ||
Income from continuing operations | $ 1.06 | $ 1.82 |
Net gain from discontinued operations | ||
Net income per share | $ 1.06 | $ 1.82 |
Weighted average shares outstanding | 42.5 | 42.9 |
Diluted: | ||
Income from continuing operations | $ 1.05 | $ 1.79 |
Net gain from discontinued operations | 0.01 | |
Net income per share | $ 1.05 | $ 1.80 |
Weighted average shares outstanding | 42.9 | 43.5 |
Consolidated Statements of Inc3
Consolidated Statements of Income (Parenthetical) $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Consolidated Statements of Income [Abstract] | |
Net gain from discontinued operations, income tax benefit (expense) | $ 0.5 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Consolidated Statements of Comprehensive Income [Abstract] | ||
Net income | $ 45.2 | $ 78.2 |
Available-for-sale securities: | ||
Net appreciation during the period | 18.9 | 93.6 |
Change in other-than-temporary impairment losses recognized in other comprehensive income | 0.1 | 2.9 |
Total available-for-sale securities | 19 | 96.5 |
Pension and postretirement benefits: | ||
Amortization recognized as net periodic benefit and postretirement cost | 2.3 | 1.6 |
Cumulative foreign currency translation adjustment: | ||
Amount recognized as cumulative foreign currency translation during the period | 5.1 | (0.6) |
Total other comprehensive income, net of tax | 26.4 | 97.5 |
Comprehensive income | $ 71.6 | $ 175.7 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Assets | ||
Fixed maturities, at fair value (amortized cost of $7,232.6 and $7,235.1) | $ 7,340.8 | $ 7,331.3 |
Equity securities, at fair value (cost of $493.0 and $498.4) | 600.5 | 584.4 |
Other investments | 588.8 | 533.8 |
Total investments | 8,530.1 | 8,449.5 |
Cash and cash equivalents | 257 | 282.6 |
Accrued investment income | 62.2 | 61.7 |
Premiums and accounts receivable, net | 1,522.2 | 1,438.1 |
Reinsurance recoverable on paid and unpaid losses and unearned premiums | 2,726.1 | 2,611.8 |
Deferred acquisition costs | 525.9 | 517.5 |
Deferred income taxes | 116.3 | 115.1 |
Goodwill | 184.9 | 184.8 |
Other assets | 485.9 | 479.8 |
Assets of discontinued operations | 80.2 | 79.5 |
Total assets | 14,490.8 | 14,220.4 |
Liabilities | ||
Loss and loss adjustment expense reserves | 7,103 | 6,949.4 |
Unearned premiums | 2,657.4 | 2,561 |
Expenses and taxes payable | 599.1 | 728 |
Reinsurance premiums payable | 341.8 | 251.9 |
Debt | 786.6 | 786.4 |
Liabilities of discontinued operations | 89.4 | 86.2 |
Total liabilities | 11,577.3 | 11,362.9 |
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 | 1,847.2 | 1,846.7 |
Accumulated other comprehensive income | 89.2 | 62.8 |
Retained earnings | 1,899.4 | 1,875.6 |
Treasury stock at cost (17.9 and 18.1 million shares) | (922.9) | (928.2) |
Total shareholders' equity | 2,913.5 | 2,857.5 |
Total liabilities and shareholders' equity | $ 14,490.8 | $ 14,220.4 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Consolidated Balance Sheets [Abstract] | ||
Fixed maturities, amortized cost | $ 7,232.6 | $ 7,235.1 |
Equity securities, cost | $ 493 | $ 498.4 |
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 | 17,900,000 | 18,100,000 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Millions | Preferred Stock [Member] | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss), net of tax | Net Unrealized Appreciation on Investments: | Defined Benefit Pension and Postretirement Plans: | Cumulative Foreign Currency Translation Adjustment: | Retained Earnings | Treasury Stock | Total |
Balance at beginning of period at Dec. 31, 2015 | $ 0.6 | $ 1,833.5 | $ 149.9 | $ (78.6) | $ (17.4) | $ 1,803.5 | $ (847.1) | |||
Net income | 78.2 | $ 78.2 | ||||||||
Shares purchased at cost | (48.4) | |||||||||
Employee and director stock-based awards and other | (3.8) | |||||||||
Net appreciation on available-for-sale securities | 96.5 | 96.5 | ||||||||
Net amount recognized as net periodic benefit cost | 1.6 | |||||||||
Amount recognized as cumulative foreign currency translation during the period | (0.6) | (0.6) | ||||||||
Dividends to shareholders | (19.8) | |||||||||
Total accumulated other comprehensive income | 97.5 | |||||||||
Net shares reissued at cost under employee stock-based compensation plans | 10.4 | |||||||||
Stock-based compensation | (1.5) | |||||||||
Balance at end of period at Mar. 31, 2016 | 0.6 | 1,829.7 | $ 151.4 | 246.4 | (77) | (18) | 1,860.4 | (885.1) | 2,957 | |
Balance at beginning of period at Dec. 31, 2016 | 0.6 | 1,846.7 | 186 | (102.5) | (20.7) | 1,875.6 | (928.2) | 2,857.5 | ||
Net income | 45.2 | 45.2 | ||||||||
Shares purchased at cost | (4.6) | |||||||||
Employee and director stock-based awards and other | 0.5 | |||||||||
Net appreciation on available-for-sale securities | 19 | 19 | ||||||||
Net amount recognized as net periodic benefit cost | 2.3 | |||||||||
Amount recognized as cumulative foreign currency translation during the period | 5.1 | 5.1 | ||||||||
Dividends to shareholders | (21.4) | |||||||||
Total accumulated other comprehensive income | 26.4 | |||||||||
Net shares reissued at cost under employee stock-based compensation plans | 9.9 | |||||||||
Stock-based compensation | ||||||||||
Balance at end of period at Mar. 31, 2017 | $ 0.6 | $ 1,847.2 | $ 89.2 | $ 205 | $ (100.2) | $ (15.6) | $ 1,899.4 | $ (922.9) | $ 2,913.5 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash Flows From Operating Activities | ||
Net income | $ 45.2 | $ 78.2 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Net realized investment gains | (1.9) | (1.5) |
Net amortization and depreciation | 7.6 | 8.4 |
Stock-based compensation expense | 3.2 | 2.8 |
Amortization of defined benefit plan costs | 3.5 | 2.5 |
Deferred income tax expense | (20.1) | (2.9) |
Change in deferred acquisition costs | (8.4) | (4.6) |
Change in premiums receivable, net of reinsurance premiums payable | 6.8 | 41 |
Change in loss, loss adjustment expense and unearned premium reserves | 237.1 | 195 |
Change in reinsurance recoverable | (109.4) | (105.9) |
Change in expenses and taxes payable | (107.4) | (93.9) |
Other, net | (2) | (37.1) |
Net cash provided by operating activities | 54.2 | 82 |
Cash Flows From Investing Activities | ||
Proceeds from disposals and maturities of fixed maturities | 289.5 | 382.8 |
Proceeds from disposals of equity securities and other investments | 20.4 | 97.3 |
Purchase of fixed maturities | (288.3) | (373.1) |
Purchase of equity securities and other investments | (65.1) | (39.6) |
Capital expenditures | (4.3) | (6.4) |
Net cash (used in) provided by investing activities | (47.8) | 61 |
Cash Flows From Financing Activities | ||
Proceeds from exercise of employee stock options | 8.6 | 6.5 |
Change in cash collateral related to securities lending program | (12) | (5.3) |
Dividends paid to shareholders | (21.4) | (19.8) |
Repurchases of common stock | (4.6) | (48.4) |
Other financing activities | (2.7) | (8) |
Net cash used in financing activities | (32.1) | (75) |
Effect of exchange rate changes on cash | 0.1 | (0.1) |
Net change in cash and cash equivalents | (25.6) | 67.9 |
Cash and cash equivalents, beginning of period | 282.6 | 338.8 |
Cash and cash equivalents, end of period | $ 257 | $ 406.7 |
Basis of Presentation and Princ
Basis of Presentation and Principles of Consolidation | 3 Months Ended |
Mar. 31, 2017 | |
Basis of Presentation and Principles of Consolidation [Abstract] | |
Basis of Presentation and Principles of Consolidation | 1. Basis of Presentation and Principles of Consolidation The accompanying unaudited consolidated financial statements of The Hanover Insurance Group, Inc. and subsidiaries (“THG” or the “Company”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and with the requirements of Form 10-Q. Certain financial information that is provided in annual financial statements, but is not required in int erim reports, has been omitted. The interim consolidated financial statements of THG include the accounts of The Hanover Insurance Company (“Hanover Insurance”) and Citizens Insurance Company o f America, THG’s principal U.S.- domiciled property and casualty companies; Chaucer Holdings Limited (“Chaucer”), a specialist insurance underwriting group which operates through the Society and Corporation of Lloyd’s (“Lloyd’s”) and certain other insurance and non-insurance subsidiaries. These legal entities conduct their operations through several business segments discussed in Note 8 – “Segment Information”. Additionally, the interim consolidated financial statements include the Company’s discontinued operations, consisting primarily of the Company’s former life insurance businesses and its accident and health business. All intercompany accounts and tra nsactions have been eliminated. The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. In the opinion of the Company’s management, the accompanying interim consolidated financial statements reflect all adjustments, consisting of normal recurring items, necessary for a fair presentation of the financial position and results of operations. The results of operations for the three months ended March 31, 2017 are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in con junction with the Company’s 2016 Annual Report on Form 10-K filed with the Securities and Exchange C ommission (“SEC”) on February 22, 2017 . |
New Accounting Pronouncements
New Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2017 | |
New Accounting Pronouncements [Abstract] | |
New Accounting Pronouncements | 2. New Accounting Pronouncements Recently Implemented Standards In March 2016, the Financial Accounting Standards Board (“ FASB ”) issued Accounting Standards Codification (“ASC”) Update No. 2016-09, (Topic 718) Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting (“ASC Update No. 2016-09”) . 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 discret e 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 the y occur. The updated guidance wa s effective for interim and annual periods beginning after December 15, 2016. The Company implemented this guidance 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. Prior period cash flow statements have been retrospectively adjusted to present excess tax benefits and cash paid by an employer when withholding shares for tax withholding purposes in accordance with the updated guidance. The adoption of this guidance did not result in any cumulative effect adjustments. The effect this guidance will have on the Company’s results of operations in future periods 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. Recently Issued Standards In March 2017, the FASB issued ASC Update No. 2017-08, (Subtopic 310-20) Receivables – Nonrefundable Fees and Other Costs: Premium Amortization on Purchased Callable Debt Securities . This guidance shortens the amortization period of premiums on certain purchased callable debt securities to the earliest call date. The updated guidance is effective for annual and interim periods beginning after December 15, 2018, and should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Early adoption is permitted, including adoption in an interim period. The Company does not expect the adoption of ASC Update No. 2017-08 to have a material impact on its financial position or results of operations. In March 2017, the FASB issued ASC Update No. 2017-07, (Topic 715) Compensation – Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost . This guidance requires that an employer report in its income statement the service cost component of both net periodic pension and net periodic postretirement benefit cost in the same line item or items as other compensation costs arising from services rendered by pertinent employees during the period, and present in the income statement separately from the other components of benefit cost, if appropriate under the company’s current presentation of its income statement. Additionally, the guidance allows only the service cost component to be eligible for capitalization when applicable. The updated guidance is effective for annual and interim periods beginning after December 15, 2017, and should be applied retrospectively for the presentation of the service cost component and other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement, and prospectively for the capitalization of the service cost component of net periodic cost in assets. Early adoption is permitted as of the beginning of an annual period for which financial statements have not been issued. The Company had an insignificant amount of service cost expense for both its pension and postretirement benefit plans in 2016. The Company is not expecting to have any service cost remaining related to its pension and postretirement plans upon this guidance becoming effective, therefore the adoption of ASC Update No. 2017-07 will not have a material impact on its financial position or results of operations. 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 unit’s 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 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, (To pic 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. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Taxes [Abstract] | |
Income Taxes | 3. Income Taxes Income tax expense for the three months ended March 31, 2017 and 2016 has been computed using estimated annual effective tax rates. These rates are revised, if necessary, at the end of each successive interim period to reflect current estimates of the annual effective tax rates. For the three months ended March 31, 2017 , the tax provision is comprised of a $12.3 million U.S. federal income tax expense and a $1.5 million foreign income tax expense. For the three months ended March 31, 2016 , the tax provision was comprised of a $22.8 million U.S. federal income tax expense and a $7.2 million foreign income tax expense. M ost of the Company’s non–U.S. income is subject to U.S. federal income tax, although a portion of its non–U.S. income is not subject to U.S. federal income tax until repatriated. Foreign taxes attributable to this non–U.S. income are accrue d at the local foreign tax rate rather than at the higher U.S. statutory rate, since these earnings currently are expected to be indefinitely reinvested overseas. This assumption could change as a result of a sale of the subsidiaries, the receipt of dividends from the subsidiaries, a change in management’s intentions, or as a result of various other events. The Company has not made a provision for U.S. taxes on $2.4 million and $5.3 million of non-U.S. income for the three months ended March 31, 2017 and 2016 , respectively. However, in the future, if such earnings were distributed to the Company, taxes of $45.1 million would be payable on the accumulated undistributed earnings and would be reflected in the tax provision for the year in which these earnings are no longer intended to be indefinitely reinvested overseas, assuming all foreign tax credits are realized. The Company or its subsidiaries files income tax returns in the U.S. federal jurisdiction and various state jurisdictions, as well as foreign jurisdictions. The Company and its subsidiaries are subject to U.S. federal and state income tax examinations by tax authorities for years after 201 2 a nd foreign examinations for years after 201 2 . |
Investments
Investments | 3 Months Ended |
Mar. 31, 2017 | |
Investments [Abstract] | |
Investments | 4 . 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: March 31, 2017 Amortized Gross Gross OTTI Cost or Unrealized Unrealized Unrealized (in millions) Cost Gains Losses Fair Value Losses Fixed maturities: U.S. Treasury and government agencies $ 338.9 $ 3.7 $ 4.5 $ 338.1 $ - Foreign government 242.9 5.4 0.3 248.0 - Municipal 1,048.4 38.5 7.2 1,079.7 - Corporate 4,019.8 117.5 43.2 4,094.1 15.6 Residential mortgage-backed 967.5 9.5 13.6 963.4 0.4 Commercial mortgage-backed 556.6 6.6 4.3 558.9 - Asset-backed 58.5 0.2 0.1 58.6 - Total fixed maturities $ 7,232.6 $ 181.4 $ 73.2 $ 7,340.8 $ 16.0 Equity securities $ 493.0 $ 108.6 $ 1.1 $ 600.5 $ - December 31, 2016 Amortized Gross Gross OTTI Cost or Unrealized Unrealized Unrealized (in millions) Cost Gains Losses Fair Value Losses Fixed maturities: U.S. Treasury and government agencies $ 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 $ - Other-than-temporary impairments (“OTTI”) unrealized losses in the tables above represent OTTI recognized in accumulated other comprehensive income. This amount excludes net unrealized gains on impaired securities relating to changes in the value of such securities subsequent to the impairment measurement dat e of $23.1 milli on and $21.4 million as of March 31, 2017 and December 31, 2016 , respectively. The amortized cost and fair value by maturity periods for fixed maturities are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties, or the Company may have the right to put or sell the obligations back to the issuers. March 31, 2017 Amortized Fair (in millions) Cost Value Due in one year or less $ 333.3 $ 336.5 Due after one year through five years 2,623.7 2,701.5 Due after five years through ten years 2,292.3 2,307.7 Due after ten years 400.7 414.2 5,650.0 5,759.9 Mortgage-backed and asset-backed securities 1,582.6 1,580.9 Total fixed maturities $ 7,232.6 $ 7,340.8 B . Securities in an unrealized loss position The following tables provide information about the Company’s fixed maturities and equity securities that were in an unrea lized loss position at March 31, 2017 and December 31, 2016 including the length of time the securities have been in an unrealized loss position: March 31, 2017 12 months or less Greater than 12 months Total Gross Gross Gross Unrealized Fair Unrealized Fair Unrealized Fair (in millions) Losses Value Losses Value Losses Value Fixed maturities: Investment grade: U.S. Treasury and government agencies $ 4.5 $ 176.9 $ - $ - $ 4.5 $ 176.9 Foreign governments 0.3 39.4 - - 0.3 39.4 Municipal 5.6 244.2 1.6 29.3 7.2 273.5 Corporate 25.9 966.3 4.6 54.7 30.5 1,021.0 Residential mortgage-backed 12.1 551.8 1.5 31.1 13.6 582.9 Commercial mortgage-backed 4.3 201.4 - 5.2 4.3 206.6 Asset-backed 0.1 26.3 - - 0.1 26.3 Total investment grade 52.8 2,206.3 7.7 120.3 60.5 2,326.6 Below investment grade: Municipal - 4.1 - - - 4.1 Corporate 0.8 31.5 11.9 72.3 12.7 103.8 Residential mortgage-backed - 0.3 - - - 0.3 Total below investment grade 0.8 35.9 11.9 72.3 12.7 108.2 Total fixed maturities 53.6 2,242.2 19.6 192.6 73.2 2,434.8 Equity securities 1.1 12.9 - - 1.1 12.9 Total $ 54.7 $ 2,255.1 $ 19.6 $ 192.6 $ 74.3 $ 2,447.7 December 31, 2016 12 months or less Greater than 12 months Total Gross Gross Gross Unrealized Fair Unrealized Fair Unrealized Fair (in millions) Losses Value Losses Value Losses Value Fixed maturities: Investment grade: U.S. Treasury and government agencies $ 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 The Company views gross unrealized losses on fixed maturities and equity securities as being temporary since it is its assessment that these securities will recover in the near term, allowing the Company to realize the anticipated long-term economic value. The Company employs a systematic methodology to evaluate declines in fair value below amortized cost for fixed maturity securities or cost for equity securities. In determining OTTI of fixed maturity and equity securities, the Company evaluates several factors and circumstances, including the issuer’s overall financial condition; the issuer’s credit and financial strength ratings; the issuer’s financial performance, including earnings trends, dividend payments and asset quality; any specific events which may influence the operations of the issuer; the general outlook for market conditions in the industry or geographic region in which the issuer operates; and the length of time and the degree to which the fair value of an issuer’s securities remains below the Company’s cost. With respect to fixed maturity investments, the Company considers any factors that might raise doubt about the issuer’s ability to make contractual payments as they come due and whether the Company expects to recover the entire amortized cost basis of the security. With respect to equity securities, the Company considers its ability and intent to hold the investment for a period of time to allow for a recovery in value. C. Other investments In accordance with Lloyd’s operating guidelines, the Company deposits funds at Lloyd’s to support underwriting operations. These funds are available only to fund claim obligations. These assets consisted of approximat ely $497 million o f fixed maturities and $10 million of cash and cash equivalents as of March 31, 2017 . The Company also deposits funds with various state and governmental authorities in the U.S. For a discussion of the Company’s deposits with state and governmental authorities, see also Note 3 – “Investments” of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 201 6 . D. Proceeds from sales The proceeds from sales of available-for-sale securities and gross realized gains and losses on those sales, were as follows: Three Months Ended March 31, 2017 2016 Proceeds from Gross Gross Proceeds from Gross Gross (in millions) Sales Gains Losses Sales Gains Losses Fixed maturities $ 97.6 $ 2.1 $ 1.0 $ 162.5 $ 2.4 $ 3.3 Equity securities $ 13.6 $ 2.4 $ - $ 88.9 $ 24.7 $ 0.9 E. Other-than-temporary impairments For the three months ended March 31, 2 017, total OTTI was $1.4 mil lion, which was recognize d in earnings . This was primarily related to other investments. For the three months ended March 31, 2016 , total OTTI of fixed maturities was $16.4 million. Of this amount, $20.9 millio n was recognized in earnings including $4.5 million which was transf erred from unrealized losses in accumulated other comprehensive income . There were no credit impairments for the three months ended March 31, 2017. The methodology and significant inputs used to measure the amount of credit lo sses on fixed maturities in 2016 were as follows: Corporate bonds – the Company utilized a financial model that derives expected cash flows based on probability-of-default factors by credit rating, loss-given-default factors based on security type and position in the capital structure and asset duration. These factors are based on historical data provided by an independent third-party rating agency. The following table provides rollforwards of the cumulative amounts related to the Company’s credit loss portion of the OTTI losses on fixed maturity securities for which the non-credit portion of the loss is included in other comprehensive income. Three Months Ended March 31, (in millions) 2017 2016 Credit losses at beginning of period $ 10.0 $ 18.0 Credit losses for which an OTTI was not previously recognized - 4.5 Additional credit losses on securities for which an OTTI was previously recognized - 1.7 Reductions for securities sold, matured or called (0.1) - Reductions for securities reclassified as intended to sell - (10.8) Credit losses at end of period $ 9.9 $ 13.4 |
Fair Value
Fair Value | 3 Months Ended |
Mar. 31, 2017 | |
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 utilizes a third party pricing service for the valuation of the majority of its fixed maturity securities and receives one quote per security. When quoted market prices in an active market are available, they are provided by the pricing service as the fair value and such values are classified as Level 1. Since fixed maturities other than U.S. Treasury securities generally do not trade on a daily basis, the pricing service prepares estimates of fair value for those secur ities using pricing techniques 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 techniques , as discussed in the determination of Level 2 fair values, to the extent it is available, but is also required to use a certain amount of unobservable judgment due to the illiquid nature of the securities involved. Unobservable judgment reflected in the Company’s matrix model accounts for estimates of additional spread required by market participants for factors such as issue size, structural complexity, high bond coupon or other unique features. These matrix-priced securities are reported as Level 2 or Level 3, depending on the significance of the impact of unobservable judgment on the security’s value. Additionally, the Company may obtain non-binding broker quotes which are reported as Level 3. Equity Securities Level 1 consists of publicly traded securities, including exchange traded funds, valued at quoted market prices. Level 2 includes securities that are valued using pricing for similar securities and pricing models that incorporate observable inputs. Level 3 consists of common or preferred stock of private companies for which observable inputs are not available. The Company utilizes a third party pricing service for the valuation of the majority of its equity securities and receives one quote for each equity security. When quoted market prices in an active market are available, they are provided by the pricing service as the fair value and such values are classified as Level 1. The Company holds certain equity securities that have been issued by privately-held entities that do not have an active market and for which the pricing service cannot provide fair values. Generally, the Company estimates fair value for these securities based on the issuer’s book value and market multiples. These securities are reported as Level 2 or Level 3 depending on the significance of the impact of unobservable judgment on the security’s value. Additionally, the Company may obtain non-binding broker quotes which are reported as Level 3. Other Investments Other investments primarily include mortgage participations, cost basis limited partnerships , and overseas trust funds required in connection wi th the Company’s Lloyd’s business . Fair va lues of mortgage participations 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. F air 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. The f air 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. 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: March 31, 2017 December 31, 2016 Carrying Fair Carrying Fair (in millions) Value Value Value Value Financial Assets Cash and cash equivalents $ 257.0 $ 257.0 $ 282.6 $ 282.6 Fixed maturities 7,340.8 7,340.8 7,331.3 7,331.3 Equity securities 600.5 600.5 584.4 584.4 Other investments 552.9 556.6 497.8 497.6 Total financial assets $ 8,751.2 $ 8,754.9 $ 8,696.1 $ 8,695.9 Financial Liabilities Debt $ 786.6 $ 865.1 $ 786.4 $ 841.9 The Company has processes designed to ensure that the values received from its third party pricing service are accurately recorded, that the data inputs and valuation approaches and 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 2017 and 2016 , the Company did not adjust any prices received from its pricing service. Changes in the observability of valuation inputs may result in a reclassification of certain financial assets or liabilities within the fair value hierarchy. Reclassifications between levels of the fair value hierarchy are reported as of the beginning of the period in which the reclassification occurs. As previously discussed, the Company utilizes a third party pricing service for the valuation of the majority of its fixed maturities and equity securities. The pricing service has indicated that it will only produce an estimate of fair value if there is objectively verifiable information to produce a valuation. If the pricing service discontinues pricing an investment, the Company will use observable market data to the extent it is available, but may also be required to make assumptions for market based inputs that are unavailable due to market conditions. The following tables provide, for each hierarchy level, the Company’s assets that were measured at fair value on a recurring basis. March 31, 2017 (in millions) Total Level 1 Level 2 Level 3 Fixed maturities: U.S. Treasury and government agencies $ 338.1 $ 207.6 $ 130.5 $ - Foreign government 248.0 52.2 195.8 - Municipal 1,079.7 - 1,048.9 30.8 Corporate 4,094.1 - 4,090.2 3.9 Residential mortgage-backed, U.S. agency backed 918.6 - 918.6 - Residential mortgage-backed, non-agency 44.8 - 44.8 - Commercial mortgage-backed 558.9 - 544.3 14.6 Asset-backed 58.6 - 58.6 - Total fixed maturities 7,340.8 259.8 7,031.7 49.3 Equity securities 591.7 590.2 - 1.5 Other investments 117.5 - 113.4 4.1 Total investment assets at fair value $ 8,050.0 $ 850.0 $ 7,145.1 $ 54.9 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 The following tables provide, for each hierarchy level, the Company’s estimated fair values of financial instruments that were not carried at fair value: March 31, 2017 (in millions) Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 257.0 $ 257.0 $ - $ - Equity securities 8.8 - 8.8 - Other investments 315.1 - - 315.1 Liabilities: Debt $ 865.1 $ - $ 865.1 $ - 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 $ - 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 $124.0 million and $94.1 million as of March 31, 2017 and December 31, 2016, respectively, which are approximately 1% of total investment assets. The tables below provide a reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3). Fixed Maturities (in millions) Municipal Corporate Commercial mortgage-backed Asset-backed Total Equity and Other Total Assets Three Months Ended March 31, 2017 Balance January 1, 2017 $ 31.0 $ 4.2 $ 15.0 $ - $ 50.2 $ 5.6 $ 55.8 Total gains: Included in other comprehensive income - net appreciation on available-for-sale securities 0.2 - - - 0.2 - 0.2 Sales (0.4) (0.3) (0.4) - (1.1) - (1.1) Balance March 31, 2017 $ 30.8 $ 3.9 $ 14.6 $ - $ 49.3 $ 5.6 $ 54.9 Three Months Ended March 31, 2016 Balance January 1, 2016 $ 34.4 $ 3.7 $ 17.0 $ 0.5 $ 55.6 $ 4.9 $ 60.5 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 on available-for-sale securities 1.0 - 0.5 - 1.5 - 1.5 Purchases and sales: Purchases - 0.3 - - 0.3 - 0.3 Sales (0.8) - (0.7) - (1.5) - (1.5) Balance March 31, 2016 $ 34.7 $ 3.8 $ 16.8 $ 0.5 $ 55.8 $ 4.9 $ 60.7 During the three months ended March 31, 2017 and March 31, 2016, the Company did not transfer ass ets between Level 2 and Level 3 or between Level 1 and Level 2 . There were no Level 3 liabilities held by the Company for the three months ended March 31, 2017 and 2016 . 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 $0.4 million and $0.6 million at March 31, 2017 and December 31, 2016, respectively, 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. March 31, 2017 December 31, 2016 Valuation Significant Fair Range Fair Range (in millions) Technique Unobservable Inputs Value (Wtd Average) Value (Wtd Average) Fixed maturities: Municipal Discounted Discount for: $ 30.8 $ 31.0 cash flow Small issue size Credit stress Above-market coupon 0.7 -6.8% ( 3.3% ) 0.9 - 1.5% ( 1.2% ) 0.3 - 0.5% ( 0.4% ) 0.7 - 6.8% ( 3.3% ) 0.9 - 1.5% ( 1.2% ) 0.3 - 0.5% ( 0.4% ) Corporate Discounted Discount for: 3.9 4.0 cash flow Small issue size Credit stress Above-market coupon 2.0 - 2.5% ( 2.1% ) 1.0% ( 1.0% ) 0.3 - 0.8% ( 0.6% ) 2.0 - 2.5% ( 2.1% ) 1.0% ( 1.0% ) 0.3 - 0.8% ( 0.6% ) Commercial mortgage-backed Discounted Discount for: 14.6 15.0 cash flow Small issue size Above-market coupon Lease structure 1.9 - 3.1% ( 2.6% ) 0.5% ( 0.5% ) 0.3% ( 0.3% ) 1.9 - 3.1% ( 2.6% ) 0.5% ( 0.5% ) 0.3% ( 0.3% ) 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% ) 4.1 18.0% ( 18.0% ) cash flow Significant increases (decreases) in any of the above inputs in isolation would result in a significantly lower (higher) fair value measurement. There were no interrelationships between these inputs which might magnify or mitigate the effect of changes in unobservable inputs on the fair value measurement. |
Pension and Other Postretiremen
Pension and Other Postretirement Benefit Plans | 3 Months Ended |
Mar. 31, 2017 | |
Pension and Other Postretirement Benefit Plans [Abstract] | |
Pension and Other Postretirement Benefit Plans | 6 . Pension and Other Postretirement Benefit Plans The components of net periodic pension cost for defined benefit pension and other postretirement benefit plans included in the Company’s results of operations are as follows: Three Months Ended March 31, 2017 2016 2017 2016 (in millions) Pension Plans Postretirement Plans Service cost - benefits earned during the period $ - $ 0.2 $ - $ - Interest cost 6.4 7.4 0.1 0.1 Expected return on plan assets (6.8) (7.5) - - Recognized net actuarial loss 3.8 2.8 - 0.1 Amortization of prior service cost - - (0.3) (0.4) Net periodic pension cost (benefit) $ 3.4 $ 2.9 $ (0.2) $ (0.2) |
Other Comprehensive Income
Other Comprehensive Income | 3 Months Ended |
Mar. 31, 2017 | |
Other Comprehensive Income [Abstract] | |
Other Comprehensive Income | 7 . Other Comprehensive Income The following table provides changes in other comprehensive income. Three Months Ended March 31, 2017 2016 Tax Tax Benefit Net of Benefit Net of (in millions) Pre-Tax (Expense) Tax Pre-Tax (Expense) Tax Unrealized gains (losses) on available-for-sale securities: Unrealized gains arising during period $ 38.0 $ (13.3) $ 24.7 $ 157.9 $ (55.3) $ 102.6 Amount of realized gains from sales and other (4.1) (1.7) (5.8) (22.8) 3.1 (19.7) Portion of other-than-temporary impairment losses recognized in earnings 0.2 (0.1) 0.1 20.9 (7.3) 13.6 Net unrealized gains 34.1 (15.1) 19.0 156.0 (59.5) 96.5 Pension and postretirement benefits: Amortization of net actuarial loss and prior service cost recognized as net periodic benefit cost 3.5 (1.2) 2.3 2.5 (0.9) 1.6 Cumulative foreign currency translation adjustment: Foreign currency translation recognized during the period 7.8 (2.7) 5.1 (0.9) 0.3 (0.6) Other comprehensive income $ 45.4 $ (19.0) $ 26.4 $ 157.6 $ (60.1) $ 97.5 Reclassifications out of accumulated other comprehensive income were as follows: Three Months Ended March 31, (in millions) 2017 2016 Amount Reclassified from Details about Accumulated Other Accumulated Other Affected Line Item in the Statement Comprehensive Income Components Comprehensive Income Where Net Income is Presented Unrealized gains on available-for-sale securities $ 4.1 $ 22.8 Net realized gains from sales and other Net other-than-temporary impairment (0.2) (20.9) losses on investments recognized in earnings 3.9 1.9 Total before tax 1.8 4.2 Tax benefit 5.7 6.1 Net of tax Amortization of defined benefit Loss adjustment expenses and other pension and postretirement plans (3.5) (2.5) operating expenses 1.2 0.9 Tax benefit (2.3) (1.6) Net of tax Total reclassifications for the period $ 3.4 $ 4.5 Benefit to income, net of tax The amount reclassified from accumulated other comprehensive income for the pension and postretirement benefits was allocated approximately 40% to loss adjustment expenses and 60% to other operating expenses for the three months ended March 31 , 201 7 and 2016 . |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2017 | |
Segment Information [Abstract] | |
Segment Information | 8 . 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 , surety and specialty property . Personal Lines includes personal automobile, homeowners and other personal cov erages. Chaucer includes marine, aviation and political , casualty (which includes international liability, specialist coverages, and syndi cate participations), energy, prop erty, and assumed reinsurance treaty business (“treaty”). Prior to January 1, 2017, treaty was reflected in the casualty, property, and marine, aviation and political lines. 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, exclud ing 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. Three Months Ended March 31, (in millions) 2017 2016 Operating revenues: Commercial Lines $ 630.5 $ 612.7 Personal Lines 401.8 378.8 Chaucer 224.7 233.1 Other 2.0 1.5 Total 1,259.0 1,226.1 Net realized investment gains 1.9 1.5 Total revenues $ 1,260.9 $ 1,227.6 Operating income (loss) before interest expense and income taxes: Commercial Lines: Underwriting (loss) income $ (2.7) $ 3.7 Net investment income 40.3 39.4 Other expense (0.2) (0.4) Commercial Lines operating income 37.4 42.7 Personal Lines: Underwriting (loss) income (8.4) 28.6 Net investment income 17.1 17.4 Other income 1.2 1.1 Personal Lines operating income 9.9 47.1 Chaucer: Underwriting income 13.8 22.5 Net investment income 12.4 10.7 Other (expense) income (1.3) 0.5 Chaucer operating income 24.9 33.7 Other: Underwriting loss (0.9) (0.7) Net investment income 1.3 0.8 Other expense (3.5) (3.2) Other operating loss (3.1) (3.1) Operating income before interest expense and income taxes 69.1 120.4 Interest on debt (12.0) (14.7) Operating income before income taxes 57.1 105.7 Non-operating income items: Net realized investment gains 1.9 1.5 Other non-operating items - 0.9 Income before income taxes $ 59.0 $ 108.1 The Company recognized approximately $1 million and $12 million in net foreign currency transaction losses in the Statements of Income during the three months ended March 31, 2017 and 2016 , respectively. The following table provides identifiable assets for the Company’s business segments and discontinued operations: March 31, 2017 December 31, 2016 (in millions) Identifiable Assets U.S. Companies $ 10,240.6 $ 10,225.4 Chaucer 4,170.0 3,915.5 Discontinued operations 80.2 79.5 Total $ 14,490.8 $ 14,220.4 The Company reviews the assets of its U.S. Companies collectively and does not allocate them between the Commercial Lines, Personal Lines and Other segments. |
Stock-based Compensation
Stock-based Compensation | 3 Months Ended |
Mar. 31, 2017 | |
Stock-based Compensation [Abstract] | |
Stock-based Compensation | 9 . Stock-based Compensation As of March 31, 2017 , there wer e 4,368,431 sh ares, 2,407,493 shares and 695,569 shares available for grant under The Hanover Insurance Group 2014 Long-Term Incentive Plan, The Hanover Insurance Group 2014 Employee Stock Purchase Plan and the Chaucer Share Incentive Plan, respectively. Compensation cost for the Company’s stock-based awards and the related tax benefits were as follows: Three Months Ended March 31, (in millions) 2017 2016 Stock-based compensation expense $ 3.2 $ 2.8 Tax benefit (1.1) (1.0) Stock-based compensation expense, net of taxes $ 2.1 $ 1.8 Stock Options Information on the Company’s stock option plans is summarized below. Three Months Ended March 31, 2017 2016 (in whole shares and dollars) Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Outstanding, beginning of period 1,396,152 $ 68.63 1,619,948 $ 56.57 Granted 417,690 91.18 245,000 82.74 Exercised (148,529) 59.71 (131,869) 51.13 Forfeited or cancelled (2,334) 67.62 (14,388) 67.80 Outstanding, end of period 1,662,979 75.10 1,718,691 60.63 Restricted Stock Units The following tables summarize activity information about employee restricted stock units: Three Months Ended March 31, 2017 2016 (in whole shares and dollars) Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Time-based restricted stock units: Outstanding, beginning of period 269,063 $ 73.91 301,897 $ 54.54 Granted 105,410 91.18 128,440 82.75 Vested (69,030) 58.72 (128,525) 41.61 Forfeited (3,005) 82.75 (10,886) 63.18 Outstanding, end of period 302,438 83.31 290,926 72.38 Performance-based and market-based restricted stock units: Outstanding, beginning of period 115,057 $ 78.82 196,142 $ 47.89 Granted 54,751 78.76 42,681 53.31 Vested (17,042) 57.99 (140,165) 40.95 Forfeited (2,180) 95.36 - - Outstanding, end of period 150,586 80.92 98,658 60.11 In the first three months of 2017 and 2016 , the Company granted market-based awards totaling 51,221 and 41,763 , respectively, to certain members of senior management, which are included in the table above as performance and market-based restricted stock activity. The vesting of these stock units is based on the relative total shareholder return (“TSR”) of the Company. This metric is generally based on relative TSR for a three -year period as compared to a pre-selected group of property and casualty companies. The fair value of market-based awards was estimated at the date of grant using a valuation model. These units have the potential to range from 0% to 150% of the shares disclosed. Included in the amount granted above in 201 7 and 2016 are 5,681 shares and 30,453 s hares , respectively, related to market-based awards that achieved a payout in exces s of 100% . These awa rds vested in the first quarter of 2017 and 2016, respectively . 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. There were no awards vested in 2017 at a level greater than 100%. In 2016, 918 shares were included as granted and reflected awards for which a performance metric in excess of 100% was achieved. |
Earnings Per Share and Sharehol
Earnings Per Share and Shareholders' Equity Transactions | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share and Shareholders’ Equity Transactions [Abstract] | |
Earnings Per Share and Shareholders' Equity Transactions | 1 0 . Earnings Per Share and Shareholders’ Equity Transactions The following table provides weighted average share information used in the calculation of the Company’s basic and diluted earnings per share: Three Months Ended March 31, (in millions, except per share data) 2017 2016 Basic shares used in the calculation of earnings per share 42.5 42.9 Dilutive effect of securities: Employee stock options 0.2 0.3 Non-vested stock grants 0.2 0.3 Diluted shares used in the calculation of earnings per share 42.9 43.5 Per share effect of dilutive securities on income from continuing operations $ (0.01) $ (0.03) Per share effect of dilutive securities on net income $ (0.01) $ (0.02) Diluted earnings per share for the three months ended March 31 , 201 7 and 2016 excludes 0.9 million and 0.2 million, respectively, of common shares issuable under the Company’s stock compensation plans because their effect would be antidilutive . The Company’s Board of Directors has authorized aggregate repurchases of the Company’s common stock of up to $900 million. Under the repurchase authorizations, the Company may repurchase, from time to time, common shares in amounts, at prices and at such times as the Company deems appropriate, subject to market conditions and other considerations. Repurchases may be executed using open market purchases, privately negotiated transactions, accelerated repurchase programs or other transactions. The Company is not required to purchase any specific number of shares or to make purchases by any certain date under this program. During the first three months of 201 7 , the Company purchased approximately 51,000 shares of the Company’s common stock at a cost of $4.6 million. |
Liabilities For Outstanding Cla
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses | 3 Months Ended |
Mar. 31, 2017 | |
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Abstract] | |
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses | 11. Liabilities for Outstanding Claims, Losses and Loss Adjustment Expenses 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 type s 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. Three Months Ended March 31, (in millions) 2017 2016 Gross loss and LAE reserves, beginning of period $ 6,949.4 $ 6,574.4 Reinsurance recoverable on unpaid losses 2,274.8 2,280.8 Net loss and LAE reserves, beginning of period 4,674.6 4,293.6 Net incurred losses and LAE in respect of losses occurring in: Current year 773.9 718.3 Prior years (7.4) (18.7) Total incurred losses and LAE 766.5 699.6 Net payments of losses and LAE in respect of losses occurring in: Current year 167.1 157.7 Prior years 452.3 443.4 Total payments 619.4 601.1 Effect of foreign exchange rate changes 7.4 (8.7) Net reserve for losses and LAE, end of period 4,829.1 4,383.4 Reinsurance recoverable on unpaid losses 2,273.9 2,338.9 Gross reserve for losses and LAE, end of period $ 7,103.0 $ 6,722.3 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 de creased by $ 7.4 million in 2017 in comparison to a decrease of $18.7 million in 2016. 2017 For the three months ended March 31, 2017, net favorable loss and LAE development was $ 7.4 million, primarily as a result of net favorable development of $ 7.7 million for Chaucer . Chaucer’s favorable development during the t hree months ended March 31, 2017 was primarily the result of lower loss estimates in the energy line. Partially offsetting Chaucer’s favorable development was the unfavorable impact of foreign exchange rate movements on prior years’ loss reserves. 2016 For the three months ended March 31, 2016, net favorable loss and LAE development was $1 8.7 million, primarily as a result of net favorable development of $ 39.4 million for Chaucer, partially offset by unfavorable development of $19.8 million for Commercial Lines. Chaucer’s favorable development during the three months ended March 31, 2016 was primarily the result of lower than ex pected losses in the treaty business of $ 11.1 million, primarily in the 2014 through 2015 accident years, in the political line primarily in the 2014 and 2015 accident years , the energy line i n the 2015 accident year and in the casualty line in the 2013 through 2015 accident years . Partially offsetting Chaucer’s favorable development was the unfavorable 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 $ 15.5 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 in accident years 2013 and prior. The Company also experienced higher than expected losses within the commercial multiple peril lines in accident years 2011 through 2014. Partially offsetting the unfavorable development was lower than expected losses within the workers’ compensation line, primarily related to accident years 2014 and 2015. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 12 . Commitments and Contingencies Legal Proceedings Durand Litigation On March 12, 2007, a putative class action suit captioned Jennifer A. Durand v. The Hanover Insurance Group, Inc., and The Allmerica Financial Cash Balance Pension Plan , was filed in the United States District Court for the Western District of Kentucky. The named plaintiff, a former employee of our former life insurance and annuity business who received a lump sum distribution from the Company’s Cash Balance Plan (the “Plan”) at or about the time of her separation from the company, claims that she and others similarly situated did not receive the appropriate lump sum distribution because in computing the lump sum, the Company and the Plan understated the accrued benefit in the calculation. The plaintiff claims that the Plan underpaid her distributions and those of similarly situated participants by failing to pay an additional so-called “whipsaw” amount reflecting the present value of an estimate of future interest credits from the date of the lump sum distribution to each participant’s retirement age of 65 (“whipsaw claim”). The plaintiff filed an Amended Complaint adding two new named plaintiffs and additional claims on December 11, 2009 . Two of the three new claims set forth in the Amended Complaint were dismissed by the District Court, which action was upheld in November 2015 by the U.S. Court of Appeals, Sixth Circuit. The District Court, however, did allow to stand the portion of the Amended Complaint which set forth claims against the Company for breach of fiduciary duty and failure to meet notice requirements arising under the Employee Retirement Income Security Act of 1974 (“ERISA”) from the various interest crediting and lump sum distribution matters of which plaintiffs complain, but only as to plaintiffs’ “whipsaw” claim that remained in the case. On December 17, 2013, the Court entered an order certifying a class to bring “whipsaw” and related breach of fiduciary duty claims consisting of all persons who received a lump sum distribution between March 1, 1997 and December 31, 2003. The Company f iled a summary judgment motion that was based on the statute of limitations and seeks to dismiss the subclass of plaintiffs who received lump sum distributions prior to March 13, 2002. This summary judgment motion has been stayed pending additional discovery. At this time, the Company is unable to provide a reasonable estimate of the potential range of ultimate liability if the outcome of the suit is unfavorable. The statute of limitations applicable to the sub-class consisting of all persons who received lump sum distributions between March 1, 1997 and March 12, 2002 has not yet been finally determined, and the extent of potential liability, if any, will depend on this determination. In addition, assuming for these purposes that the plaintiffs prevail with respect to claims that benefits accrued or payable under the Plan were understated, then there are numerous possible theories and other variables upon which any revised calculation of benefits as requested under plaintiffs’ claims could be based. Any adverse judgment in this case against the Plan would be expected to create a liability for the Plan, with resulting effects on the Plan’s assets available to pay benefits. The Company’s future required funding of the Plan could also be impacted by such a liability. Other Matters The Company has been named a defendant in various other legal proceedings arising in the normal course of business. In addition, the Company is involved, from time to time, in examinations, investigations and proceedings by governmental and self-regulatory agencies. The potential outcome of any such action or regulatory proceedings in which the Company has been named a defendant or the subject of an inquiry or investigation, and its ultimate liability, if any, from such action or regulatory proceedings, is difficult to predict at this time. The ultimate resolutions of such proceedings are not expected to have a material effect on its financial position, although they could have a material effect on the results of operations for a particular quarter or annual period. Residual Markets The Company is required to participate in residual markets in various states, which generally pertain to high risk insureds, disrupted markets or lines of business or geographic areas where rates are regarded as excessive. The results of the residual markets are not subject to the predictability associated with the Company’s own managed business, and are significant to both the personal and commercial automobile lines of business and the workers’ compensation line of business. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13 . Subsequent Events There were no subsequent events requiring adjustment to the financial statements and no additional disclosures required in the notes to the interim consolidated financial statements. |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Investments [Abstract] | |
Schedule of Available-for-sale Securities Reconciliation | March 31, 2017 Amortized Gross Gross OTTI Cost or Unrealized Unrealized Unrealized (in millions) Cost Gains Losses Fair Value Losses Fixed maturities: U.S. Treasury and government agencies $ 338.9 $ 3.7 $ 4.5 $ 338.1 $ - Foreign government 242.9 5.4 0.3 248.0 - Municipal 1,048.4 38.5 7.2 1,079.7 - Corporate 4,019.8 117.5 43.2 4,094.1 15.6 Residential mortgage-backed 967.5 9.5 13.6 963.4 0.4 Commercial mortgage-backed 556.6 6.6 4.3 558.9 - Asset-backed 58.5 0.2 0.1 58.6 - Total fixed maturities $ 7,232.6 $ 181.4 $ 73.2 $ 7,340.8 $ 16.0 Equity securities $ 493.0 $ 108.6 $ 1.1 $ 600.5 $ - December 31, 2016 Amortized Gross Gross OTTI Cost or Unrealized Unrealized Unrealized (in millions) Cost Gains Losses Fair Value Losses Fixed maturities: U.S. Treasury and government agencies $ 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 $ - |
Investments Classified by Contractual Maturity Date | March 31, 2017 Amortized Fair (in millions) Cost Value Due in one year or less $ 333.3 $ 336.5 Due after one year through five years 2,623.7 2,701.5 Due after five years through ten years 2,292.3 2,307.7 Due after ten years 400.7 414.2 5,650.0 5,759.9 Mortgage-backed and asset-backed securities 1,582.6 1,580.9 Total fixed maturities $ 7,232.6 $ 7,340.8 |
Schedule of Unrealized Loss on Investments | March 31, 2017 12 months or less Greater than 12 months Total Gross Gross Gross Unrealized Fair Unrealized Fair Unrealized Fair (in millions) Losses Value Losses Value Losses Value Fixed maturities: Investment grade: U.S. Treasury and government agencies $ 4.5 $ 176.9 $ - $ - $ 4.5 $ 176.9 Foreign governments 0.3 39.4 - - 0.3 39.4 Municipal 5.6 244.2 1.6 29.3 7.2 273.5 Corporate 25.9 966.3 4.6 54.7 30.5 1,021.0 Residential mortgage-backed 12.1 551.8 1.5 31.1 13.6 582.9 Commercial mortgage-backed 4.3 201.4 - 5.2 4.3 206.6 Asset-backed 0.1 26.3 - - 0.1 26.3 Total investment grade 52.8 2,206.3 7.7 120.3 60.5 2,326.6 Below investment grade: Municipal - 4.1 - - - 4.1 Corporate 0.8 31.5 11.9 72.3 12.7 103.8 Residential mortgage-backed - 0.3 - - - 0.3 Total below investment grade 0.8 35.9 11.9 72.3 12.7 108.2 Total fixed maturities 53.6 2,242.2 19.6 192.6 73.2 2,434.8 Equity securities 1.1 12.9 - - 1.1 12.9 Total $ 54.7 $ 2,255.1 $ 19.6 $ 192.6 $ 74.3 $ 2,447.7 December 31, 2016 12 months or less Greater than 12 months Total Gross Gross Gross Unrealized Fair Unrealized Fair Unrealized Fair (in millions) Losses Value Losses Value Losses Value Fixed maturities: Investment grade: U.S. Treasury and government agencies $ 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 |
Schedule of Realized Gain (Loss) | Three Months Ended March 31, 2017 2016 Proceeds from Gross Gross Proceeds from Gross Gross (in millions) Sales Gains Losses Sales Gains Losses Fixed maturities $ 97.6 $ 2.1 $ 1.0 $ 162.5 $ 2.4 $ 3.3 Equity securities $ 13.6 $ 2.4 $ - $ 88.9 $ 24.7 $ 0.9 |
Rollforward of Cumulative Amounts Related to Credit Loss Portion of OTTI Losses | Three Months Ended March 31, (in millions) 2017 2016 Credit losses at beginning of period $ 10.0 $ 18.0 Credit losses for which an OTTI was not previously recognized - 4.5 Additional credit losses on securities for which an OTTI was previously recognized - 1.7 Reductions for securities sold, matured or called (0.1) - Reductions for securities reclassified as intended to sell - (10.8) Credit losses at end of period $ 9.9 $ 13.4 |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value [Abstract] | |
Fair Value of Financial Instruments | March 31, 2017 December 31, 2016 Carrying Fair Carrying Fair (in millions) Value Value Value Value Financial Assets Cash and cash equivalents $ 257.0 $ 257.0 $ 282.6 $ 282.6 Fixed maturities 7,340.8 7,340.8 7,331.3 7,331.3 Equity securities 600.5 600.5 584.4 584.4 Other investments 552.9 556.6 497.8 497.6 Total financial assets $ 8,751.2 $ 8,754.9 $ 8,696.1 $ 8,695.9 Financial Liabilities Debt $ 786.6 $ 865.1 $ 786.4 $ 841.9 |
Fair Value, Assets Measured on Recurring Basis | March 31, 2017 (in millions) Total Level 1 Level 2 Level 3 Fixed maturities: U.S. Treasury and government agencies $ 338.1 $ 207.6 $ 130.5 $ - Foreign government 248.0 52.2 195.8 - Municipal 1,079.7 - 1,048.9 30.8 Corporate 4,094.1 - 4,090.2 3.9 Residential mortgage-backed, U.S. agency backed 918.6 - 918.6 - Residential mortgage-backed, non-agency 44.8 - 44.8 - Commercial mortgage-backed 558.9 - 544.3 14.6 Asset-backed 58.6 - 58.6 - Total fixed maturities 7,340.8 259.8 7,031.7 49.3 Equity securities 591.7 590.2 - 1.5 Other investments 117.5 - 113.4 4.1 Total investment assets at fair value $ 8,050.0 $ 850.0 $ 7,145.1 $ 54.9 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 |
Estimated Fair Values of Financial Instruments Not Carried at Fair Value | March 31, 2017 (in millions) Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 257.0 $ 257.0 $ - $ - Equity securities 8.8 - 8.8 - Other investments 315.1 - - 315.1 Liabilities: Debt $ 865.1 $ - $ 865.1 $ - 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 $ - |
Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3) | Fixed Maturities (in millions) Municipal Corporate Commercial mortgage-backed Asset-backed Total Equity and Other Total Assets Three Months Ended March 31, 2017 Balance January 1, 2017 $ 31.0 $ 4.2 $ 15.0 $ - $ 50.2 $ 5.6 $ 55.8 Total gains: Included in other comprehensive income - net appreciation on available-for-sale securities 0.2 - - - 0.2 - 0.2 Sales (0.4) (0.3) (0.4) - (1.1) - (1.1) Balance March 31, 2017 $ 30.8 $ 3.9 $ 14.6 $ - $ 49.3 $ 5.6 $ 54.9 Three Months Ended March 31, 2016 Balance January 1, 2016 $ 34.4 $ 3.7 $ 17.0 $ 0.5 $ 55.6 $ 4.9 $ 60.5 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 on available-for-sale securities 1.0 - 0.5 - 1.5 - 1.5 Purchases and sales: Purchases - 0.3 - - 0.3 - 0.3 Sales (0.8) - (0.7) - (1.5) - (1.5) Balance March 31, 2016 $ 34.7 $ 3.8 $ 16.8 $ 0.5 $ 55.8 $ 4.9 $ 60.7 |
Schedule of Additional Information About Significant Unobservable Inputs Used in Fair Valuations of Level 3 | March 31, 2017 December 31, 2016 Valuation Significant Fair Range Fair Range (in millions) Technique Unobservable Inputs Value (Wtd Average) Value (Wtd Average) Fixed maturities: Municipal Discounted Discount for: $ 30.8 $ 31.0 cash flow Small issue size Credit stress Above-market coupon 0.7 -6.8% ( 3.3% ) 0.9 - 1.5% ( 1.2% ) 0.3 - 0.5% ( 0.4% ) 0.7 - 6.8% ( 3.3% ) 0.9 - 1.5% ( 1.2% ) 0.3 - 0.5% ( 0.4% ) Corporate Discounted Discount for: 3.9 4.0 cash flow Small issue size Credit stress Above-market coupon 2.0 - 2.5% ( 2.1% ) 1.0% ( 1.0% ) 0.3 - 0.8% ( 0.6% ) 2.0 - 2.5% ( 2.1% ) 1.0% ( 1.0% ) 0.3 - 0.8% ( 0.6% ) Commercial mortgage-backed Discounted Discount for: 14.6 15.0 cash flow Small issue size Above-market coupon Lease structure 1.9 - 3.1% ( 2.6% ) 0.5% ( 0.5% ) 0.3% ( 0.3% ) 1.9 - 3.1% ( 2.6% ) 0.5% ( 0.5% ) 0.3% ( 0.3% ) 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% ) 4.1 18.0% ( 18.0% ) cash flow |
Pension and Other Postretirem24
Pension and Other Postretirement Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Pension and Other Postretirement Benefit Plans [Abstract] | |
Components of Net Periodic Pension Cost | Three Months Ended March 31, 2017 2016 2017 2016 (in millions) Pension Plans Postretirement Plans Service cost - benefits earned during the period $ - $ 0.2 $ - $ - Interest cost 6.4 7.4 0.1 0.1 Expected return on plan assets (6.8) (7.5) - - Recognized net actuarial loss 3.8 2.8 - 0.1 Amortization of prior service cost - - (0.3) (0.4) Net periodic pension cost (benefit) $ 3.4 $ 2.9 $ (0.2) $ (0.2) |
Other Comprehensive Income (Tab
Other Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Other Comprehensive Income [Abstract] | |
Changes in Other Comprehensive Income | Three Months Ended March 31, 2017 2016 Tax Tax Benefit Net of Benefit Net of (in millions) Pre-Tax (Expense) Tax Pre-Tax (Expense) Tax Unrealized gains (losses) on available-for-sale securities: Unrealized gains arising during period $ 38.0 $ (13.3) $ 24.7 $ 157.9 $ (55.3) $ 102.6 Amount of realized gains from sales and other (4.1) (1.7) (5.8) (22.8) 3.1 (19.7) Portion of other-than-temporary impairment losses recognized in earnings 0.2 (0.1) 0.1 20.9 (7.3) 13.6 Net unrealized gains 34.1 (15.1) 19.0 156.0 (59.5) 96.5 Pension and postretirement benefits: Amortization of net actuarial loss and prior service cost recognized as net periodic benefit cost 3.5 (1.2) 2.3 2.5 (0.9) 1.6 Cumulative foreign currency translation adjustment: Foreign currency translation recognized during the period 7.8 (2.7) 5.1 (0.9) 0.3 (0.6) Other comprehensive income $ 45.4 $ (19.0) $ 26.4 $ 157.6 $ (60.1) $ 97.5 |
Reclassifications Out of Accumulated Other Comprehensive Income | Three Months Ended March 31, (in millions) 2017 2016 Amount Reclassified from Details about Accumulated Other Accumulated Other Affected Line Item in the Statement Comprehensive Income Components Comprehensive Income Where Net Income is Presented Unrealized gains on available-for-sale securities $ 4.1 $ 22.8 Net realized gains from sales and other Net other-than-temporary impairment (0.2) (20.9) losses on investments recognized in earnings 3.9 1.9 Total before tax 1.8 4.2 Tax benefit 5.7 6.1 Net of tax Amortization of defined benefit Loss adjustment expenses and other pension and postretirement plans (3.5) (2.5) operating expenses 1.2 0.9 Tax benefit (2.3) (1.6) Net of tax Total reclassifications for the period $ 3.4 $ 4.5 Benefit to income, net of tax |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Information [Abstract] | |
Financial Information with Respect to Business Segments | Three Months Ended March 31, (in millions) 2017 2016 Operating revenues: Commercial Lines $ 630.5 $ 612.7 Personal Lines 401.8 378.8 Chaucer 224.7 233.1 Other 2.0 1.5 Total 1,259.0 1,226.1 Net realized investment gains 1.9 1.5 Total revenues $ 1,260.9 $ 1,227.6 Operating income (loss) before interest expense and income taxes: Commercial Lines: Underwriting (loss) income $ (2.7) $ 3.7 Net investment income 40.3 39.4 Other expense (0.2) (0.4) Commercial Lines operating income 37.4 42.7 Personal Lines: Underwriting (loss) income (8.4) 28.6 Net investment income 17.1 17.4 Other income 1.2 1.1 Personal Lines operating income 9.9 47.1 Chaucer: Underwriting income 13.8 22.5 Net investment income 12.4 10.7 Other (expense) income (1.3) 0.5 Chaucer operating income 24.9 33.7 Other: Underwriting loss (0.9) (0.7) Net investment income 1.3 0.8 Other expense (3.5) (3.2) Other operating loss (3.1) (3.1) Operating income before interest expense and income taxes 69.1 120.4 Interest on debt (12.0) (14.7) Operating income before income taxes 57.1 105.7 Non-operating income items: Net realized investment gains 1.9 1.5 Other non-operating items - 0.9 Income before income taxes $ 59.0 $ 108.1 |
Identifiable Assets by Business Segment | March 31, 2017 December 31, 2016 (in millions) Identifiable Assets U.S. Companies $ 10,240.6 $ 10,225.4 Chaucer 4,170.0 3,915.5 Discontinued operations 80.2 79.5 Total $ 14,490.8 $ 14,220.4 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Stock-based Compensation [Abstract] | |
Compensation Cost and Related Tax Benefits | Three Months Ended March 31, (in millions) 2017 2016 Stock-based compensation expense $ 3.2 $ 2.8 Tax benefit (1.1) (1.0) Stock-based compensation expense, net of taxes $ 2.1 $ 1.8 |
Summary of Stock Option Plan Activity | Three Months Ended March 31, 2017 2016 (in whole shares and dollars) Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Outstanding, beginning of period 1,396,152 $ 68.63 1,619,948 $ 56.57 Granted 417,690 91.18 245,000 82.74 Exercised (148,529) 59.71 (131,869) 51.13 Forfeited or cancelled (2,334) 67.62 (14,388) 67.80 Outstanding, end of period 1,662,979 75.10 1,718,691 60.63 |
Earnings Per Share and Shareh28
Earnings Per Share and Shareholders' Equity Transactions (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share and Shareholders’ Equity Transactions [Abstract] | |
Information Regarding Basic and Diluted Earnings Per Share | Three Months Ended March 31, (in millions, except per share data) 2017 2016 Basic shares used in the calculation of earnings per share 42.5 42.9 Dilutive effect of securities: Employee stock options 0.2 0.3 Non-vested stock grants 0.2 0.3 Diluted shares used in the calculation of earnings per share 42.9 43.5 Per share effect of dilutive securities on income from continuing operations $ (0.01) $ (0.03) Per share effect of dilutive securities on net income $ (0.01) $ (0.02) |
Liabilities For Outstanding C29
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Abstract] | |
Schedule of Liability for Unpaid Losses and Loss Adjustment Expenses | Three Months Ended March 31, (in millions) 2017 2016 Gross loss and LAE reserves, beginning of period $ 6,949.4 $ 6,574.4 Reinsurance recoverable on unpaid losses 2,274.8 2,280.8 Net loss and LAE reserves, beginning of period 4,674.6 4,293.6 Net incurred losses and LAE in respect of losses occurring in: Current year 773.9 718.3 Prior years (7.4) (18.7) Total incurred losses and LAE 766.5 699.6 Net payments of losses and LAE in respect of losses occurring in: Current year 167.1 157.7 Prior years 452.3 443.4 Total payments 619.4 601.1 Effect of foreign exchange rate changes 7.4 (8.7) Net reserve for losses and LAE, end of period 4,829.1 4,383.4 Reinsurance recoverable on unpaid losses 2,273.9 2,338.9 Gross reserve for losses and LAE, end of period $ 7,103.0 $ 6,722.3 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Taxes [Abstract] | ||
Federal income tax expense | $ 12.3 | $ 22.8 |
Foreign income tax expense | 1.5 | 7.2 |
Foreign income permanently reinvested | 2.4 | $ 5.3 |
Estimated taxes payable on undistributed earnings | $ 45.1 |
Investments (Narrative) (Detail
Investments (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Investments [Line Items] | |||
Net unrealized gains on impaired securities | $ 23.1 | $ 21.4 | |
Restricted assets, fixed maturities | 497 | ||
Restricted assets, cash and cash equivalents | 10 | ||
Other-than-temporary impairments recognized in earnings | 1.4 | $ 20.9 | |
Fixed Maturities [Member] | |||
Investments [Line Items] | |||
Other-than-temporary impairments | 16.4 | ||
Other-than-temporary impairments recognized in earnings | 20.9 | ||
Other-than-temporary impairments recorded in accumulated other comprehensive income | $ 1.4 | ||
Other-than-temporary impairments recorded as unrealized losses in AOCI | $ 4.5 |
Investments (Schedule of Availa
Investments (Schedule of Available-for-sale Securities Reconciliation) (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Debt Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost or Cost | $ 7,232.6 | $ 7,235.1 |
Gross Unrealized Gains | 181.4 | 178.5 |
Gross Unrealized Loss | 73.2 | 82.3 |
Fair Value | 7,340.8 | 7,331.3 |
OTTI Unrealized Losses | 16 | 16.2 |
US Treasury and Government Agencies [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost or Cost | 338.9 | 342.5 |
Gross Unrealized Gains | 3.7 | 3.7 |
Gross Unrealized Loss | 4.5 | 5.1 |
Fair Value | 338.1 | 341.1 |
Foreign Government [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost or Cost | 242.9 | 235.8 |
Gross Unrealized Gains | 5.4 | 5.4 |
Gross Unrealized Loss | 0.3 | 0.5 |
Fair Value | 248 | 240.7 |
Municipal [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost or Cost | 1,048.4 | 1,065.8 |
Gross Unrealized Gains | 38.5 | 38.8 |
Gross Unrealized Loss | 7.2 | 9.2 |
Fair Value | 1,079.7 | 1,095.4 |
Corporate [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost or Cost | 4,019.8 | 3,989.8 |
Gross Unrealized Gains | 117.5 | 113 |
Gross Unrealized Loss | 43.2 | 49 |
Fair Value | 4,094.1 | 4,053.8 |
OTTI Unrealized Losses | 15.6 | 15.8 |
Residential Mortgage Backed [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost or Cost | 967.5 | 978.2 |
Gross Unrealized Gains | 9.5 | 9.6 |
Gross Unrealized Loss | 13.6 | 13.6 |
Fair Value | 963.4 | 974.2 |
OTTI Unrealized Losses | 0.4 | 0.4 |
Commercial Mortgage Backed [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost or Cost | 556.6 | 550.6 |
Gross Unrealized Gains | 6.6 | 7.8 |
Gross Unrealized Loss | 4.3 | 4.1 |
Fair Value | 558.9 | 554.3 |
Asset-backed [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost or Cost | 58.5 | 72.4 |
Gross Unrealized Gains | 0.2 | 0.2 |
Gross Unrealized Loss | 0.1 | 0.8 |
Fair Value | 58.6 | 71.8 |
Equity Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost or Cost | 493 | 498.4 |
Gross Unrealized Gains | 108.6 | 86.7 |
Gross Unrealized Loss | 1.1 | 0.7 |
Fair Value | $ 600.5 | $ 584.4 |
Investments (Investments Classi
Investments (Investments Classified by Contractual Maturity Date) (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Investments [Abstract] | ||
Due in one year or less, Amortized Cost | $ 333.3 | |
Due after one year through five years, Amortized Cost | 2,623.7 | |
Due after five years through ten years, Amortized Cost | 2,292.3 | |
Due after ten years, Amortized Cost | 400.7 | |
Gross fixed maturities, Amortized Cost | 5,650 | |
Mortgage-backed and asset-backed securities, Amortized Cost | 1,582.6 | |
Total fixed maturities, Amortized Cost | 7,232.6 | $ 7,235.1 |
Due in one year or less, Fair Value | 336.5 | |
Due after one year through five years, Fair Value | 2,701.5 | |
Due after five years through ten years, Fair Value | 2,307.7 | |
Due after ten years, Fair Value | 414.2 | |
Gross fixed maturities, Fair Value | 5,759.9 | |
Mortgage-backed and asset-backed securities, Fair Value | 1,580.9 | |
Fixed maturities, Fair Value | $ 7,340.8 | $ 7,331.3 |
Investments (Schedule of Unreal
Investments (Schedule of Unrealized Loss on Investments) (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | $ 54.7 | $ 62.1 |
12 months or less, Fair Value | 2,255.1 | 2,419.2 |
Greater than 12 months, Gross Unrealized Losses | 19.6 | 20.9 |
Greater than 12 months, Fair Value | 192.6 | 215.9 |
Total, Gross Unrealized Losses | 74.3 | 83 |
Total, Fair Value | 2,447.7 | 2,635.1 |
Investment grade [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 52.8 | 60.2 |
12 months or less, Fair Value | 2,206.3 | 2,356.9 |
Greater than 12 months, Gross Unrealized Losses | 7.7 | 8.7 |
Greater than 12 months, Fair Value | 120.3 | 134.1 |
Total, Gross Unrealized Losses | 60.5 | 68.9 |
Total, Fair Value | 2,326.6 | 2,491 |
Below Investment Grade [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 0.8 | 1.2 |
12 months or less, Fair Value | 35.9 | 46 |
Greater than 12 months, Gross Unrealized Losses | 11.9 | 12.2 |
Greater than 12 months, Fair Value | 72.3 | 81.8 |
Total, Gross Unrealized Losses | 12.7 | 13.4 |
Total, Fair Value | 108.2 | 127.8 |
Debt Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 53.6 | 61.4 |
12 months or less, Fair Value | 2,242.2 | 2,402.9 |
Greater than 12 months, Gross Unrealized Losses | 19.6 | 20.9 |
Greater than 12 months, Fair Value | 192.6 | 215.9 |
Total, Gross Unrealized Losses | 73.2 | 82.3 |
Total, Fair Value | 2,434.8 | 2,618.8 |
US Treasury and Government Agencies [Member] | Investment grade [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 4.5 | 5.1 |
12 months or less, Fair Value | 176.9 | 165.9 |
Total, Gross Unrealized Losses | 4.5 | 5.1 |
Total, Fair Value | 176.9 | 165.9 |
Foreign Government [Member] | Investment grade [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 0.3 | 0.5 |
12 months or less, Fair Value | 39.4 | 55 |
Greater than 12 months, Fair Value | 1.8 | |
Total, Gross Unrealized Losses | 0.3 | 0.5 |
Total, Fair Value | 39.4 | 56.8 |
Municipal [Member] | Investment grade [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 5.6 | 7.2 |
12 months or less, Fair Value | 244.2 | 268.4 |
Greater than 12 months, Gross Unrealized Losses | 1.6 | 2 |
Greater than 12 months, Fair Value | 29.3 | 29.3 |
Total, Gross Unrealized Losses | 7.2 | 9.2 |
Total, Fair Value | 273.5 | 297.7 |
Municipal [Member] | Below Investment Grade [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Fair Value | 4.1 | |
Total, Fair Value | 4.1 | |
Corporate [Member] | Investment grade [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 25.9 | 30.6 |
12 months or less, Fair Value | 966.3 | 1,081 |
Greater than 12 months, Gross Unrealized Losses | 4.6 | 5 |
Greater than 12 months, Fair Value | 54.7 | 64.2 |
Total, Gross Unrealized Losses | 30.5 | 35.6 |
Total, Fair Value | 1,021 | 1,145.2 |
Corporate [Member] | Below Investment Grade [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 0.8 | 1.2 |
12 months or less, Fair Value | 31.5 | 45.9 |
Greater than 12 months, Gross Unrealized Losses | 11.9 | 12.2 |
Greater than 12 months, Fair Value | 72.3 | 81.8 |
Total, Gross Unrealized Losses | 12.7 | 13.4 |
Total, Fair Value | 103.8 | 127.7 |
Residential Mortgage Backed [Member] | Investment grade [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 12.1 | 12.1 |
12 months or less, Fair Value | 551.8 | 570 |
Greater than 12 months, Gross Unrealized Losses | 1.5 | 1.5 |
Greater than 12 months, Fair Value | 31.1 | 29 |
Total, Gross Unrealized Losses | 13.6 | 13.6 |
Total, Fair Value | 582.9 | 599 |
Residential Mortgage Backed [Member] | Below Investment Grade [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Fair Value | 0.3 | 0.1 |
Total, Fair Value | 0.3 | 0.1 |
Commercial Mortgage Backed [Member] | Investment grade [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 4.3 | 4.1 |
12 months or less, Fair Value | 201.4 | 187.5 |
Greater than 12 months, Fair Value | 5.2 | 6.3 |
Total, Gross Unrealized Losses | 4.3 | 4.1 |
Total, Fair Value | 206.6 | 193.8 |
Asset-backed [Member] | Investment grade [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 0.1 | 0.6 |
12 months or less, Fair Value | 26.3 | 29.1 |
Greater than 12 months, Gross Unrealized Losses | 0.2 | |
Greater than 12 months, Fair Value | 3.5 | |
Total, Gross Unrealized Losses | 0.1 | 0.8 |
Total, Fair Value | 26.3 | 32.6 |
Equity Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
12 months or less, Gross Unrealized Losses | 1.1 | 0.7 |
12 months or less, Fair Value | 12.9 | 16.3 |
Total, Gross Unrealized Losses | 1.1 | 0.7 |
Total, Fair Value | $ 12.9 | $ 16.3 |
Investments (Schedule of Realiz
Investments (Schedule of Realized Gain (Loss)) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Fixed Maturities [Member] | ||
Gain (Loss) on Investments [Line Items] | ||
Proceeds from Sales | $ 97.6 | $ 162.5 |
Gross Gains | 2.1 | 2.4 |
Gross Losses | 1 | 3.3 |
Equity Securities [Member] | ||
Gain (Loss) on Investments [Line Items] | ||
Proceeds from Sales | 13.6 | 88.9 |
Gross Gains | $ 2.4 | 24.7 |
Gross Losses | $ 0.9 |
Investments (Rollforward of Cum
Investments (Rollforward of Cumulative Amounts Related to Credit Loss Portion of OTTI Losses) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Investments [Abstract] | ||
Credit losses at beginning of period | $ 10 | $ 18 |
Credit losses for which an OTTI was not previously recognized | 4.5 | |
Additional credit losses on securities for which an OTTI was previously recognized | 1.7 | |
Reductions for securities sold, matured or called | (0.1) | |
Reductions for securities reclassified as intended to sell | (10.8) | |
Credit losses at end of period | $ 9.9 | $ 13.4 |
Fair Value (Narrative) (Details
Fair Value (Narrative) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Fair Value Measurements [Line Items] | |||
Fair value of investments | $ 124,000,000 | $ 94,100,000 | |
Investments measured at net asset value based on an ownership interest in partners’ | 1.00% | 1.00% | |
Transfer between Level 2 and Level 3 | $ 0 | $ 0 | |
Transfer between Level 1 and Level 2 | 0 | 0 | |
Level 3 [Member] | |||
Fair Value Measurements [Line Items] | |||
Liabilities held | 0 | $ 0 | |
Valuations excluded | $ 400,000 | $ 600,000 |
Fair Value (Fair Value of Finan
Fair Value (Fair Value of Financial Instruments) (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Carrying Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | $ 257 | $ 282.6 |
Total financial assets | 8,751.2 | 8,696.1 |
Debt | 786.6 | 786.4 |
Carrying Value [Member] | Fixed Maturities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of investments | 7,340.8 | 7,331.3 |
Carrying Value [Member] | Equity Securities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of investments | 600.5 | 584.4 |
Carrying Value [Member] | Other Investments [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of investments | 552.9 | 497.8 |
Estimated Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | 257 | 282.6 |
Total financial assets | 8,754.9 | 8,695.9 |
Debt | 865.1 | 841.9 |
Estimated Fair Value [Member] | Fixed Maturities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of investments | 7,340.8 | 7,331.3 |
Estimated Fair Value [Member] | Equity Securities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of investments | 600.5 | 584.4 |
Estimated Fair Value [Member] | Other Investments [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of investments | $ 556.6 | $ 497.6 |
Fair Value (Fair Value, Assets
Fair Value (Fair Value, Assets Measured on Recurring Basis) (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | $ 7,340.8 | $ 7,331.3 |
Equity securities | 600.5 | 584.4 |
Other investments | 588.8 | 533.8 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 7,340.8 | 7,331.3 |
Equity securities | 591.7 | 574.6 |
Other investments | 117.5 | 106.3 |
Total investment assets at fair value | 8,050 | 8,012.2 |
Fair Value, Measurements, Recurring | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 259.8 | 256.8 |
Equity securities | 590.2 | 573.1 |
Total investment assets at fair value | 850 | 829.9 |
Fair Value, Measurements, Recurring | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 7,031.7 | 7,024.3 |
Other investments | 113.4 | 102.2 |
Total investment assets at fair value | 7,145.1 | 7,126.5 |
Fair Value, Measurements, Recurring | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 49.3 | 50.2 |
Equity securities | 1.5 | 1.5 |
Other investments | 4.1 | 4.1 |
Total investment assets at fair value | 54.9 | 55.8 |
Fair Value, Measurements, Recurring | U.S. Treasury And Government Agencies [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 338.1 | 341.1 |
Fair Value, Measurements, Recurring | U.S. Treasury And Government Agencies [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 207.6 | 209.5 |
Fair Value, Measurements, Recurring | U.S. Treasury And Government Agencies [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 130.5 | 131.6 |
Fair Value, Measurements, Recurring | Foreign Government [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 248 | 240.7 |
Fair Value, Measurements, Recurring | Foreign Government [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 52.2 | 47.3 |
Fair Value, Measurements, Recurring | Foreign Government [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 195.8 | 193.4 |
Fair Value, Measurements, Recurring | Municipal [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 1,079.7 | 1,095.4 |
Fair Value, Measurements, Recurring | Municipal [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 1,048.9 | 1,064.4 |
Fair Value, Measurements, Recurring | Municipal [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 30.8 | 31 |
Fair Value, Measurements, Recurring | Corporate [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 4,094.1 | 4,053.8 |
Fair Value, Measurements, Recurring | Corporate [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 4,090.2 | 4,049.6 |
Fair Value, Measurements, Recurring | Corporate [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 3.9 | 4.2 |
Fair Value, Measurements, Recurring | Residential Mortgage Backed Securities U S Agency Backed [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 918.6 | 924.4 |
Fair Value, Measurements, Recurring | Residential Mortgage Backed Securities U S Agency Backed [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 918.6 | 924.4 |
Fair Value, Measurements, Recurring | Residential Mortgage Backed [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 44.8 | 49.8 |
Fair Value, Measurements, Recurring | Residential Mortgage Backed [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 44.8 | 49.8 |
Fair Value, Measurements, Recurring | Commercial Mortgage Backed [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 558.9 | 554.3 |
Fair Value, Measurements, Recurring | Commercial Mortgage Backed [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 544.3 | 539.3 |
Fair Value, Measurements, Recurring | Commercial Mortgage Backed [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 14.6 | 15 |
Fair Value, Measurements, Recurring | Asset-backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | 58.6 | 71.8 |
Fair Value, Measurements, Recurring | Asset-backed Securities [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities | $ 58.6 | $ 71.8 |
Fair Value (Estimated Fair Valu
Fair Value (Estimated Fair Values of Financial Instruments Not Carried at Fair Value) (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Equity securities | $ 600.5 | $ 584.4 |
Other investments | 124 | 94.1 |
Carrying Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | 257 | 282.6 |
Estimated Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | 257 | 282.6 |
Equity securities | 8.8 | 9.8 |
Other investments | 315.1 | 297.2 |
Debt | 865.1 | 841.9 |
Estimated Fair Value [Member] | Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | 257 | 282.6 |
Estimated Fair Value [Member] | Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Equity securities | 8.8 | 9.8 |
Debt | 865.1 | 841.9 |
Estimated Fair Value [Member] | Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other investments | $ 315.1 | $ 297.2 |
Fair Value (Fair Value on Recur
Fair Value (Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Beginning Balance | $ 55.8 | $ 60.5 |
Included in total net realized investment gains | (0.1) | |
Included in other comprehensive income - net appreciation (depreciation) on available-for-sale securities | 0.2 | 1.5 |
Purchases | 0.3 | |
Sales | (1.1) | (1.5) |
Ending Balance | 54.9 | 60.7 |
Fixed Maturities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Beginning Balance | 50.2 | 55.6 |
Included in total net realized investment gains | (0.1) | |
Included in other comprehensive income - net appreciation (depreciation) on available-for-sale securities | 0.2 | 1.5 |
Purchases | 0.3 | |
Sales | (1.1) | (1.5) |
Ending Balance | 49.3 | 55.8 |
Fixed Maturities [Member] | Municipal [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Beginning Balance | 31 | 34.4 |
Included in total net realized investment gains | 0.1 | |
Included in other comprehensive income - net appreciation (depreciation) on available-for-sale securities | 0.2 | 1 |
Purchases | ||
Sales | (0.4) | (0.8) |
Ending Balance | 30.8 | 34.7 |
Fixed Maturities [Member] | Corporate [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Beginning Balance | 4.2 | 3.7 |
Included in total net realized investment gains | (0.2) | |
Included in other comprehensive income - net appreciation (depreciation) on available-for-sale securities | ||
Purchases | 0.3 | |
Sales | (0.3) | |
Ending Balance | 3.9 | 3.8 |
Fixed Maturities [Member] | Commercial Mortgage Backed [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Beginning Balance | 15 | 17 |
Included in total net realized investment gains | ||
Included in other comprehensive income - net appreciation (depreciation) on available-for-sale securities | 0.5 | |
Purchases | ||
Sales | (0.4) | (0.7) |
Ending Balance | 14.6 | 16.8 |
Fixed Maturities [Member] | Asset-backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Beginning Balance | 0.5 | |
Included in total net realized investment gains | ||
Included in other comprehensive income - net appreciation (depreciation) on available-for-sale securities | ||
Purchases | ||
Sales | ||
Ending Balance | 0.5 | |
Equity Securities and Other Investments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Beginning Balance | 5.6 | 4.9 |
Included in total net realized investment gains | ||
Included in other comprehensive income - net appreciation (depreciation) on available-for-sale securities | ||
Purchases | ||
Sales | ||
Ending Balance | $ 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 | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Fair Value [Line Items] | ||||
Fair Value | $ 54.9 | $ 55.8 | $ 60.7 | $ 60.5 |
Municipal [Member] | Discounted cash flow [Member] | Level 3 [Member] | ||||
Fair Value [Line Items] | ||||
Fair Value | $ 30.8 | $ 31 | ||
Municipal [Member] | Discount For Small Issue Size | Discounted cash flow [Member] | Level 3 [Member] | Minimum | ||||
Fair Value [Line Items] | ||||
Range | 0.70% | 0.70% | ||
Municipal [Member] | Discount For Small Issue Size | Discounted cash flow [Member] | Level 3 [Member] | Maximum | ||||
Fair Value [Line Items] | ||||
Range | 6.80% | 6.80% | ||
Municipal [Member] | Discount For Small Issue Size | Discounted cash flow [Member] | Level 3 [Member] | Weighted Average | ||||
Fair Value [Line Items] | ||||
Range | 3.30% | 3.30% | ||
Municipal [Member] | Discount For Above Market Coupon | Discounted cash flow [Member] | Level 3 [Member] | Minimum | ||||
Fair Value [Line Items] | ||||
Range | 0.30% | 0.30% | ||
Municipal [Member] | Discount For Above Market Coupon | Discounted cash flow [Member] | Level 3 [Member] | Maximum | ||||
Fair Value [Line Items] | ||||
Range | 0.50% | 0.50% | ||
Municipal [Member] | Discount For Above Market Coupon | Discounted cash flow [Member] | Level 3 [Member] | Weighted Average | ||||
Fair Value [Line Items] | ||||
Range | 0.40% | 0.40% | ||
Municipal [Member] | Discount For Credit Stress | Discounted cash flow [Member] | Level 3 [Member] | Minimum | ||||
Fair Value [Line Items] | ||||
Range | 0.90% | 0.90% | ||
Municipal [Member] | Discount For Credit Stress | Discounted cash flow [Member] | Level 3 [Member] | Maximum | ||||
Fair Value [Line Items] | ||||
Range | 1.50% | 1.50% | ||
Municipal [Member] | Discount For Credit Stress | Discounted cash flow [Member] | Level 3 [Member] | Weighted Average | ||||
Fair Value [Line Items] | ||||
Range | 1.20% | 1.20% | ||
Corporate [Member] | Discounted cash flow [Member] | Level 3 [Member] | ||||
Fair Value [Line Items] | ||||
Fair Value | $ 3.9 | $ 4 | ||
Corporate [Member] | Discount For Small Issue Size | Discounted cash flow [Member] | Level 3 [Member] | Minimum | ||||
Fair Value [Line Items] | ||||
Range | 2.00% | 2.00% | ||
Corporate [Member] | Discount For Small Issue Size | Discounted cash flow [Member] | Level 3 [Member] | Maximum | ||||
Fair Value [Line Items] | ||||
Range | 2.50% | 2.50% | ||
Corporate [Member] | Discount For Small Issue Size | Discounted cash flow [Member] | Level 3 [Member] | Weighted Average | ||||
Fair Value [Line Items] | ||||
Range | 2.10% | 2.10% | ||
Corporate [Member] | Discount For Above Market Coupon | Discounted cash flow [Member] | Level 3 [Member] | Minimum | ||||
Fair Value [Line Items] | ||||
Range | 0.30% | 0.30% | ||
Corporate [Member] | Discount For Above Market Coupon | Discounted cash flow [Member] | Level 3 [Member] | Maximum | ||||
Fair Value [Line Items] | ||||
Range | 0.80% | 0.80% | ||
Corporate [Member] | Discount For Above Market Coupon | Discounted cash flow [Member] | Level 3 [Member] | Weighted Average | ||||
Fair Value [Line Items] | ||||
Range | 0.60% | 0.60% | ||
Corporate [Member] | Discount For Credit Stress | Discounted cash flow [Member] | Level 3 [Member] | ||||
Fair Value [Line Items] | ||||
Range | 1.00% | 1.00% | ||
Corporate [Member] | Discount For Credit Stress | Discounted cash flow [Member] | Level 3 [Member] | Weighted Average | ||||
Fair Value [Line Items] | ||||
Range | 1.00% | 1.00% | ||
Commercial Mortgage Backed [Member] | Discounted cash flow [Member] | Level 3 [Member] | ||||
Fair Value [Line Items] | ||||
Fair Value | $ 14.6 | $ 15 | ||
Commercial Mortgage Backed [Member] | Discount For Small Issue Size | Discounted cash flow [Member] | Level 3 [Member] | Minimum | ||||
Fair Value [Line Items] | ||||
Range | 1.90% | 1.90% | ||
Commercial Mortgage Backed [Member] | Discount For Small Issue Size | Discounted cash flow [Member] | Level 3 [Member] | Maximum | ||||
Fair Value [Line Items] | ||||
Range | 3.10% | 3.10% | ||
Commercial Mortgage Backed [Member] | Discount For Small Issue Size | Discounted cash flow [Member] | Level 3 [Member] | Weighted Average | ||||
Fair Value [Line Items] | ||||
Range | 2.60% | 2.60% | ||
Commercial Mortgage Backed [Member] | Discount For Above Market Coupon | Discounted cash flow [Member] | Level 3 [Member] | ||||
Fair Value [Line Items] | ||||
Range | 0.50% | 0.50% | ||
Commercial Mortgage Backed [Member] | Discount For Above Market Coupon | Discounted cash flow [Member] | Level 3 [Member] | Weighted Average | ||||
Fair Value [Line Items] | ||||
Range | 0.50% | 0.50% | ||
Commercial Mortgage Backed [Member] | Discount For Lease Structure | Discounted cash flow [Member] | Level 3 [Member] | ||||
Fair Value [Line Items] | ||||
Range | 0.30% | 0.30% | ||
Commercial Mortgage Backed [Member] | Discount For Lease Structure | Discounted cash flow [Member] | Level 3 [Member] | Weighted Average | ||||
Fair Value [Line Items] | ||||
Range | 0.30% | 0.30% | ||
Equity Securities [Member] | Market comparables [Member] | Level 3 [Member] | ||||
Fair Value [Line Items] | ||||
Fair Value | $ 1.1 | $ 1.1 | ||
Equity Securities [Member] | Net Tangible Asset Market Multiples | Market comparables [Member] | Level 3 [Member] | ||||
Fair Value [Line Items] | ||||
Fair value measurement market multiples | 1 | 1 | ||
Equity Securities [Member] | Net Tangible Asset Market Multiples | Market comparables [Member] | Level 3 [Member] | Weighted Average | ||||
Fair Value [Line Items] | ||||
Fair value measurement market multiples | 1 | 1 | ||
Other securities | Discounted cash flow [Member] | Level 3 [Member] | ||||
Fair Value [Line Items] | ||||
Fair Value | $ 4.1 | $ 4.1 | ||
Other securities | Discount Rate [Member] | Discounted cash flow [Member] | Level 3 [Member] | ||||
Fair Value [Line Items] | ||||
Range | 18.00% | 18.00% | ||
Other securities | Discount Rate [Member] | Discounted cash flow [Member] | Level 3 [Member] | Weighted Average | ||||
Fair Value [Line Items] | ||||
Range | 18.00% | 18.00% |
Pension and Other Postretirem43
Pension and Other Postretirement Benefit Plans (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Pension Plans [Member] | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Service cost - benefits earned during the period | $ 0.2 | |
Interest cost | $ 6.4 | 7.4 |
Expected return on plan assets | (6.8) | (7.5) |
Recognized net actuarial loss | 3.8 | 2.8 |
Net periodic pension cost (benefit) | 3.4 | 2.9 |
Postretirement Plans [Member] | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Interest cost | 0.1 | 0.1 |
Recognized net actuarial loss | 0.1 | |
Amortization of prior service cost | (0.3) | (0.4) |
Net periodic pension cost (benefit) | $ (0.2) | $ (0.2) |
Other Comprehensive Income (Nar
Other Comprehensive Income (Narrative) (Details) - Defined Benefit Pension and Postretirement Plans: | 3 Months Ended |
Mar. 31, 2017 | |
Comprehensive Income (Loss) [Line Items] | |
Loss Adjustment Expense | 40.00% |
Percentage Of Other Operating Expenses | 60.00% |
Other Comprehensive Income (Cha
Other Comprehensive Income (Changes in Other Comprehensive Income) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Other Comprehensive Income [Abstract] | ||
Unrealized gains arising during period , Pre-Tax | $ 38 | $ 157.9 |
Amount of realized gains from sales and other, Pre-tax | (4.1) | (22.8) |
Portion of other-than-temporary impairment losses recognized in earnings, Pre-tax | 0.2 | 20.9 |
Net unrealized gains, Pre-tax | 34.1 | 156 |
Amortization of net actuarial loss and prior service cost recognized as net periodic benefit cost, Pre-tax | 3.5 | 2.5 |
Foreign currency translation recognized during the period, Pre-tax | 7.8 | (0.9) |
Other comprehensive income, Pre-tax | 45.4 | 157.6 |
Unrealized gains arising during period , Tax Benefit (Expense) | (13.3) | (55.3) |
Amount of realized gains from sales and other, Tax Benefit (Expense) | (1.7) | 3.1 |
Portion of other-than-temporary impairment losses recognized in earnings, Tax Benefit (Expense) | (0.1) | (7.3) |
Net unrealized gains, Tax Benefit (Expense) | (15.1) | (59.5) |
Amortization of net actuarial loss and prior service cost recognized as net periodic benefit cost, Tax Benefit (Expense) | (1.2) | (0.9) |
Foreign currency translation recognized during the period, Tax Benefit (Expense) | (2.7) | 0.3 |
Other comprehensive income, Tax Benefit (Expense) | (19) | (60.1) |
Unrealized gains arising during period , Net of Tax | 24.7 | 102.6 |
Amount of realized gains from sales and other, Net of Tax | (5.8) | (19.7) |
Portion of other-than-temporary impairment losses recognized in earnings, Net of Tax | 0.1 | 13.6 |
Net unrealized gains, Net of Tax | 19 | 96.5 |
Amortization of net actuarial loss and prior service cost recognized as net periodic benefit cost, Net of Tax | 2.3 | 1.6 |
Foreign currency translation recognized during the period, Net of Tax | 5.1 | (0.6) |
Other comprehensive income, Net of Tax | $ 26.4 | $ 97.5 |
Other Comprehensive Income (Rec
Other Comprehensive Income (Reclassifications out of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Net realized gains from sales and other | $ 3.3 | $ 22.4 |
Loss adjustment expenses and other operating expenses | (1,201.9) | (1,119.5) |
Net other-than-temporary impairment losses on investments recognized in earnings | (1.4) | (20.9) |
Total before tax | 59 | 108.1 |
Tax benefit | (13.8) | (30) |
Net of tax | 45.2 | 78.2 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Net of tax | 3.4 | 4.5 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Net Unrealized Appreciation on Investments: | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Net realized gains from sales and other | 4.1 | 22.8 |
Net other-than-temporary impairment losses on investments recognized in earnings | (0.2) | (20.9) |
Total before tax | 3.9 | 1.9 |
Tax benefit | 1.8 | 4.2 |
Net of tax | 5.7 | 6.1 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Defined Benefit Pension and Postretirement Plans: | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Loss adjustment expenses and other operating expenses | (3.5) | (2.5) |
Tax benefit | 1.2 | 0.9 |
Net of tax | $ (2.3) | $ (1.6) |
Segment Information (Narrative)
Segment Information (Narrative) (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2017USD ($)segment | Mar. 31, 2016USD ($) | |
Segment Information [Abstract] | ||
Operating segments | segment | 4 | |
Net foreign currency transaction losses | $ | $ 1 | $ 12 |
Segment Information (Financial
Segment Information (Financial Information with Respect to Business Segments) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Segment Reporting Information [Line Items] | ||
Operating revenues | $ 1,259 | $ 1,226.1 |
Net investment income | 71.1 | 68.3 |
Total revenues | 1,260.9 | 1,227.6 |
Operating income (loss) before interest expense and income taxes | 69.1 | 120.4 |
Interest on debt | (12) | (14.7) |
Operating income before income taxes | 57.1 | 105.7 |
Net realized investment gains | 1.9 | 1.5 |
Other expense | 0.9 | |
Income before income taxes | 59 | 108.1 |
Commercial Lines [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 630.5 | 612.7 |
Underwriting (loss) income | (2.7) | 3.7 |
Net investment income | 40.3 | 39.4 |
Other (expense) income | (0.2) | (0.4) |
Operating income (loss) before interest expense and income taxes | 37.4 | 42.7 |
Personal Lines | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 401.8 | 378.8 |
Underwriting (loss) income | (8.4) | 28.6 |
Other (expense) income | 1.2 | 1.1 |
Operating income (loss) before interest expense and income taxes | 9.9 | 47.1 |
Net realized investment gains | 17.1 | 17.4 |
Chaucer | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 224.7 | 233.1 |
Underwriting (loss) income | 13.8 | 22.5 |
Net investment income | 12.4 | 10.7 |
Other (expense) income | (1.3) | 0.5 |
Operating income (loss) before interest expense and income taxes | 24.9 | 33.7 |
Other (including eliminations) | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 2 | 1.5 |
Underwriting (loss) income | (0.9) | (0.7) |
Net investment income | 1.3 | 0.8 |
Other expense | (3.5) | (3.2) |
Operating income (loss) before interest expense and income taxes | $ (3.1) | $ (3.1) |
Segment Information (Identifiab
Segment Information (Identifiable Assets by Business Segment) (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Segment Reporting Information [Line Items] | ||
Discontinued operations | $ 80.2 | $ 79.5 |
Identifiable assets | 14,490.8 | 14,220.4 |
U.S. Companies | ||
Segment Reporting Information [Line Items] | ||
Identifiable assets | 10,240.6 | 10,225.4 |
Chaucer | ||
Segment Reporting Information [Line Items] | ||
Identifiable assets | $ 4,170 | $ 3,915.5 |
Stock-based Compensation (Narra
Stock-based Compensation (Narrative) (Details) - shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
2014 Stock Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares available for grant | 4,368,431 | |
ESPP Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares available for grant | 2,407,493 | |
SIP Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares available for grant | 695,569 | |
Performance-based restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted, Shares | 0 | 918 |
Performance metric achieved | 100.00% | |
Performance-based restricted stock units | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance metric, potential range | 0.00% | |
Performance-based restricted stock units | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance metric, potential range | 200.00% | |
Performance And Market-Based Restricted Stock Units | Minimum | Senior management | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance metric, potential range | 0.00% | |
Performance And Market-Based Restricted Stock Units | Maximum | Senior management | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance metric, potential range | 150.00% | |
Market-based awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted, Shares | 51,221 | 41,763 |
Average period based on relative TSR | 3 years | |
Market-based awards | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance metric achieved | 100.00% | |
Market Based Awards That Achieved Payout In Excess Of 1[Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted, Shares | 5,681 | 30,453 |
Stock-based Compensation (Compe
Stock-based Compensation (Compensation Cost and Related Tax Benefits) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Stock-based Compensation [Abstract] | ||
Stock-based compensation expense | $ 3.2 | $ 2.8 |
Tax benefit | (1.1) | (1) |
Stock-based compensation expense, net of taxes | $ 2.1 | $ 1.8 |
Stock-based Compensation (Summa
Stock-based Compensation (Summary of Stock Option Plan Activity) (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Stock-based Compensation [Abstract] | ||
Outstanding, beginning of period, Shares | 1,396,152 | 1,619,948 |
Granted, Shares | 417,690 | 245,000 |
Exercised, Shares | (148,529) | (131,869) |
Forfeited or cancelled, Shares | (2,334) | (14,388) |
Outstanding, end of period, Shares | 1,662,979 | 1,718,691 |
Outstanding, beginning of period, Weighted Average Exercise Price | $ 68.63 | $ 56.57 |
Granted, Weighted Average Exercise Price | 91.18 | 82.74 |
Exercised, Weighted Average Exercise Price | 59.71 | 51.13 |
Forfeited or cancelled, Weighted Average Exercise Price | 67.62 | 67.80 |
Outstanding, end of period, Weighted Average Exercise Price | $ 75.10 | $ 60.63 |
Stock-based Compensation (Sum53
Stock-based Compensation (Summary of Restricted Stock Activity) (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Restricted Stock Units (RSUs) [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Outstanding, beginning of period, Shares | 269,063 | 301,897 |
Granted, Shares | 105,410 | 128,440 |
Vested, Shares | (69,030) | (128,525) |
Forfeited, Shares | (3,005) | (10,886) |
Outstanding, end of period, Shares | 302,438 | 290,926 |
Outstanding, beginning of period, Weighted Average Grant Date Fair Value | $ 73.91 | $ 54.54 |
Granted, Weighted Average Grant Date Fair Value | 91.18 | 82.75 |
Vested, Weighted Average Grant Date Fair Value | 58.72 | 41.61 |
Forfeited, Weighted Average Grant Date Fair Value | 82.75 | 63.18 |
Outstanding, end of period, Weighted Average Grant Date Fair Value | $ 83.31 | $ 72.38 |
Performance Shares [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Outstanding, beginning of period, Shares | 115,057 | 196,142 |
Granted, Shares | 54,751 | 42,681 |
Vested, Shares | (17,042) | (140,165) |
Forfeited, Shares | (2,180) | |
Outstanding, end of period, Shares | 150,586 | 98,658 |
Outstanding, beginning of period, Weighted Average Grant Date Fair Value | $ 78.82 | $ 47.89 |
Granted, Weighted Average Grant Date Fair Value | 78.76 | 53.31 |
Vested, Weighted Average Grant Date Fair Value | 57.99 | 40.95 |
Forfeited, Weighted Average Grant Date Fair Value | 95.36 | |
Outstanding, end of period, Weighted Average Grant Date Fair Value | $ 80.92 | $ 60.11 |
Earnings Per Share and Shareh54
Earnings Per Share and Shareholders' Equity Transactions (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Earnings Per Share and Shareholders’ Equity Transactions [Abstract] | ||
Antidilutive securities excluded from calculation of earnings per share | 900,000 | 200,000 |
Repurchases common stock, authorized | $ 900 | |
Repurchases common stock, shares | 51,000 | |
Repurchases common stock, value | $ 4.6 |
Earnings Per Share and Shareh55
Earnings Per Share and Shareholders’ Equity Transactions (Information Regarding Basic and Diluted Earnings Per Share) (Details) - $ / shares shares in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Basic shares used in the calculation of earnings per share | 42.5 | 42.9 |
Diluted shares used in the calculation of earnings per share | 42.9 | 43.5 |
Per share effect of dilutive securities on income from continuing operations | $ (0.01) | $ (0.03) |
Per share effect of dilutive securities on net income | $ (0.01) | $ (0.02) |
Employee Stock Option [Member] | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Dilutive effect of securities | 0.2 | 0.3 |
Non-Vested Stock Grants [Member] | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Dilutive effect of securities | 0.2 | 0.3 |
Liabilities For Outstanding C56
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | ||||
(Favorable) unfavorable loss and LAE development | $ (7.4) | $ (18.7) | ||
Net reserves | 7,103 | 6,722.3 | $ 6,949.4 | $ 6,574.4 |
Commercial Lines [Member] | ||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | ||||
(Favorable) unfavorable loss and LAE development | 19.8 | |||
Other Commercial Lines [Member] | ||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | ||||
(Favorable) unfavorable loss and LAE development | 15.5 | |||
Chaucer | ||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | ||||
(Favorable) unfavorable loss and LAE development | $ (7.7) | (39.4) | ||
Year 2014 to 2015 [Member] | Chaucer | Treaty Line [Member] | ||||
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Line Items] | ||||
(Favorable) unfavorable loss and LAE development | $ (11.1) |
Liabilities For Outstanding C57
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses (Schedule of Liability for Unpaid Losses and Loss Adjustment Expenses) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Liabilities For Outstanding Claims, Losses And Loss Adjustment Expenses [Abstract] | ||
Gross loss and LAE reserves, beginning of period | $ 6,949.4 | $ 6,574.4 |
Reinsurance recoverable on unpaid losses, beginning of period | 2,274.8 | 2,280.8 |
Net loss and LAE reserves, beginning of period | 4,674.6 | 4,293.6 |
Net incurred losses and LAE in respect of losses occurring in current year | 773.9 | 718.3 |
Net incurred losses and LAE in respect of losses occurring in prior years | (7.4) | (18.7) |
Total incurred losses and LAE | 766.5 | 699.6 |
Net payments of losses and LAE in respect of losses occurring in Current year | 167.1 | 157.7 |
Net payments of losses and LAE in respect of losses occurring in Prior years | 452.3 | 443.4 |
Total payments | 619.4 | 601.1 |
Effect of foreign exchange rate changes | 7.4 | (8.7) |
Net reserve for losses and LAE, end of period | 4,829.1 | 4,383.4 |
Reinsurance recoverable on unpaid losses, end of Period | 2,273.9 | 2,338.9 |
Gross reserve for losses and LAE, end of period | $ 7,103 | $ 6,722.3 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Dec. 11, 2009plaintiffclaim | Nov. 30, 2015claim | Mar. 31, 2017 |
Commitments and Contingencies [Abstract] | |||
Participant's retirement age | 65 years | ||
Number of plantiffs | plaintiff | 2 | ||
New claims | 2 | 3 | |
Claims Dismissed | 2 |