SUMMARY OF INVESTMENTS

Fair Value of Investments

A reconciliation of the amortized cost (cost for equity securities) to fair value of investments in held-to-maturity and available-for-sale fixed maturity and equity securities as of September 30, 2011 and December 31, 2010, is as follows:



September 30, 2011	(Dollars in Thousands)
Type of Investment	Cost or Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Fair Value
HELD-TO-MATURITY
Fixed maturities
Bonds
States, municipalities and political subdivisions
General obligations	$	734	$	8	$	—	$	742
Special revenue
Midwest
North central - East	353		16		—		369
North central - West	218		14		—		232
Northeast	230		2		—		232
South	632		2		66		568
West	2,737		36		—		2,773
Collaterialized mortgage obligations	56		2		—		58
Mortgage-backed securities	370		36		—		406
Total Held-to-Maturity Fixed Maturities	$	5,330	$	116	$	66	$	5,380
AVAILABLE-FOR-SALE
Fixed maturities
Bonds
U.S. government and government-sponsored enterprises
U.S. Treasury	$	39,628	$	1,494	$	—	$	41,122
Agency	98,928		585		11		99,502
States, municipalities and political subdivisions
General obligations
Midwest
North central - East	123,825		9,970		11		133,784
North central - West	76,991		6,577		—		83,568
Northeast	37,502		2,982		—		40,484
South	103,670		9,702		—		113,372
West	67,550		5,362		—		72,912
Special revenue
Midwest
North central - East	69,649		4,458		3		74,104
North central - West	50,718		3,795		—		54,513
Northeast	13,844		744		—		14,588
South	97,058		6,534		—		103,592
West	53,824		4,209		—		58,033
Foreign bonds
Canadian	69,233		3,577		171		72,639
Other foreign	138,084		5,465		668		142,881
Public utilities
Electric	226,302		13,043		313		239,032
Gas distribution	17,606		1,538		58		19,086
Other	10,115		820		—		10,935
Corporate bonds
Oil and gas	194,730		7,625		440		201,915
Chemicals	55,333		2,980		—		58,313
Basic resources	24,485		244		645		24,084
Construction and materials	20,381		405		172		20,614
Industrial goods and services	173,176		7,824		186		180,814



Auto and parts	16,640		790		345		17,085
Food and beverage	64,834		2,664		177		67,321
Personal and household goods	67,130		2,987		302		69,815
Health care	101,002		7,038		—		108,040
Retail	51,865		2,571		—		54,436
Media	40,430		1,636		214		41,852
Travel and leisure	2,859		—		87		2,772
Telecommunications	45,562		1,890		—		47,452
Banks	130,510		4,254		1,367		133,397
Insurance	28,902		794		10		29,686
Real estate	20,848		2,468		224		23,092
Financial services	97,909		2,790		1,054		99,645
Technology	29,811		1,499		55		31,255
Collaterialized mortgage obligations
Government	36,791		3,028		22		39,797
Other	278		—		36		242
Mortgage-backed securities	36,973		1,046		12		38,007
Asset-backed securities	6,355		528		286		6,597
Redeemable preferred stocks	405		1		—		406
Total Available-For-Sale Fixed Maturities	$	2,541,736	$	135,917	$	6,869	$	2,670,784
Equity securities
Common stocks
Public utilities
Electric	$	6,229	$	4,981	$	86	$	11,124
Gas distribution	90		632		—		722
Other	76		9		—		85
Corporate
Oil and gas	5,932		6,563		14		12,481
Chemicals	2,734		1,184		—		3,918
Industrial good and services	9,427		10,570		454		19,543
Auto and parts	269		310		4		575
Food and beverage	2,124		3,579		15		5,688
Personal and household goods	6,030		3,011		—		9,041
Health care	8,212		6,708		322		14,598
Retail	2,836		356		292		2,900
Media	147		—		37		110
Telecommunications	2,399		3,364		14		5,749
Banks	12,970		25,967		388		38,549
Insurance	3,209		8,452		136		11,525
Real estate	393		646		70		969
Financial services	300		131		45		386
Technology	2,822		692		184		3,330
Nonredeemable preferred stocks	3,634		32		476		3,190
Total Available-for-Sale Equity Securities	$	69,833	$	77,187	$	2,537	$	144,483
Total Available-for-Sale Securities	$	2,611,569	$	213,104	$	9,406	$	2,815,267



December 31, 2010	(Dollars in Thousands)
Type of Investment	Cost or Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Fair Value
HELD-TO-MATURITY
Fixed maturities
Bonds
States, municipalities and political subdivisions
General obligations	731		10		—		741
Special revenue
Midwest
North central - East	364		27		—		391
North central - West	488		23		—		511
Northeast	230		12		—		242
South	1,067		4		108		963
West	2,957		36		—		2,993
Collateralized mortgage obligations	83		4		—		87
Mortgage-backed securities	444		50		—		494
Total Held-to-Maturity Fixed Maturities	$	6,364	$	166	$	108	$	6,422
AVAILABLE-FOR-SALE
Fixed maturities
Bonds
U.S. government and government-sponsored enterprises
U.S. Treasury	38,133		943		—		39,076
Agency	104,049		96		1,014		103,131
States, municipalities and political subdivisions
General obligations
Midwest
North central - East	121,273		6,634		137		127,770
North central - West	76,699		4,491		58		81,132
Northeast	27,861		1,664		—		29,525
South	92,795		6,555		53		99,297
West	53,160		2,983		90		56,053
Special revenue
Midwest
North central - East	59,063		2,205		175		61,093
North central - West	38,827		1,744		266		40,305
Northeast	4,505		247		9		4,743
South	71,486		3,405		144		74,747
West	42,363		2,182		—		44,545
Foreign bonds
Canadian	69,209		3,908		194		72,923
Other foreign	85,434		4,588		268		89,754
Public utilities
Electric	213,636		12,207		519		225,324
Gas distribution	21,131		1,124		70		22,185
Other	21,029		551		—		21,580
Corporate bonds
Oil and gas	177,973		7,890		427		185,436
Chemicals	52,561		2,445		35		54,971
Basic resources	6,971		456		—		7,427
Construction and materials	19,385		873		—		20,258
Industrial goods and services	148,212		7,208		362		155,058



Auto and parts	17,500		1,003		119		18,384
Food and beverage	70,613		3,531		111		74,033
Personal and household goods	66,597		3,079		289		69,387
Health care	78,595		4,933		186		83,342
Retail	42,150		2,139		329		43,960
Media	31,702		1,552		—		33,254
Travel and leisure	5,882		61		77		5,866
Telecommunications	34,706		2,329		51		36,984
Banks	117,506		5,817		1,689		121,634
Insurance	25,682		799		14		26,467
Real estate	20,903		1,101		267		21,737
Financial services	80,803		3,635		983		83,455
Technology	15,952		1,070		334		16,688
Collateralized mortgage obligations	17,564		2,013		—		19,577
Mortgage-backed securities	2		—		—		2
Asset-backed securities	6,754		572		—		7,326
Total Available-For-Sale Fixed Maturities	$	2,178,666	$	108,033	$	8,270	$	2,278,429
Equity securities
Common stocks
Public utilities
Electric	$	6,229	$	4,164	$	3	$	10,390
Gas distribution	90		586		—		676
Corporate
Oil and gas	5,740		7,394		—		13,134
Chemicals	2,734		3,345		—		6,079
Industrial goods and services	8,112		15,185		—		23,297
Auto and parts	257		537		—		794
Food and beverage	682		3,792		—		4,474
Personal and household goods	5,233		3,370		—		8,603
Health care	6,367		6,367		186		12,548
Retail	380		348		—		728
Travel and leisure	1		—		—		1
Telecommunications	2,376		3,438		—		5,814
Banks	9,498		34,363		101		43,760
Insurance	3,129		11,320		41		14,408
Real estate	393		667		40		1,020
Financial services	300		274		15		559
Technology	1,157		874		—		2,031
Nonredeemable preferred stocks	1,461		3		74		1,390
Total Available-for-Sale Equity Securities	$	54,139	$	96,027	$	460	$	149,706
Total Available-for-Sale Securities	$	2,232,805	$	204,060	$	8,730	$	2,428,135

Maturities

The amortized cost and fair value of held-to-maturity, available-for-sale and trading securities at September 30, 2011, by contractual maturity, are shown in the following table. 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. Asset-backed securities, mortgage-backed securities and collateralized mortgage obligations may be subject to prepayment risk and are therefore not categorized by contractual maturity.



(In Thousands)	Held-To-Maturity				Available-For-Sale				Trading
September 30, 2011	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	245	$	247	$	274,007	$	279,734	$	2,626	$	2,905
Due after one year through five years	4,659		4,669		1,119,740		1,176,492		4,563		4,274
Due after five years through 10 years	—		—		971,535		1,030,764		496		452
Due after 10 years	—		—		96,057		99,151		6,394		6,285
Asset-backed securities	—		—		6,355		6,597		—		—
Mortgage-backed securities	370		406		36,973		38,007		—		—
Collateralized mortgage obligations	56		58		37,069		40,039		—		—
	$	5,330	$	5,380	$	2,541,736	$	2,670,784	$	14,079	$	13,916

Net Realized Investment Gains and Losses

Net realized gains (losses) on disposition of investments are computed using the specific identification method and are included in the computation of net income. A summary of net realized investment gains resulting from investment sales, calls and other-than-temporary impairment (“OTTI”) charges is as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
(In Thousands)	2011			2010			2011			2010
Net realized investment gains (losses)
Fixed maturities	$	813		$	897		$	3,247		$	1,759
Equity securities	792			121			2,126			5,030
Trading securities	(457		)	665			(179		)	(19		)
Mortgage loans	—			(361		)	—			(361		)
Other long-term investments	(78		)	—			(347		)	(15		)
Mark-to-market valuation gain for interest rate swaps	149			—			149			—
Total net realized investment gains	$	1,219		$	1,322		$	4,996		$	6,394

The proceeds and gross realized gains and losses on the sale of available-for-sale securities are as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
(In Thousands)	2011		2010		2011		2010
Proceeds from sales	$	830	$	—	$	21,871	$	3,402
Gross realized gains	793		—		1,144		1,915
Gross realized losses	—		—		688		—

There were no sales of held-to-maturity securities during the nine-month periods ended September 30, 2011 and 2010.

Our investment portfolio includes trading securities with embedded derivatives. These securities, which are primarily convertible redeemable preferred debt securities, are recorded at fair value. Income or loss, including the change in the fair value of these trading securities, is recognized currently in earnings as a component of net realized investment gains and losses. Our portfolio of trading securities had a fair value of $13.9 million and $12.9 million at September 30, 2011 and December 31, 2010, respectively.

The realized gains and losses attributable to the change in fair value during the reporting period of trading securities held at September 30, 2011 and 2010 are as follows:



	Three Months Ended September 30,					Nine Months Ended September 30,
(In Thousands)	2011			2010		2011		2010
Trading
Realized gains	$	(3	)	$	681	$	28	$	—
Realized losses	455			—		755		215

Off-Balance Sheet Arrangements

Pursuant to an agreement with one of our limited liability partnership holdings, we are contractually committed to make capital contributions up to $15.0 million, upon request by the partnership, through December 31, 2017. Our remaining potential contractual obligation was $9.6 million at September 30, 2011.

Unrealized Appreciation and Depreciation

A summary of changes in net unrealized investment appreciation during the reporting period is as follows:



	Nine Months Ended September 30,
(In Thousands)	2011			2010
Change in net unrealized investment appreciation
Available-for-sale fixed maturities and equity securities	$	8,368		$	67,113
Deferred policy acquisition costs	2,527			(19,133		)
Income tax effect	(3,687		)	(16,793		)
Total change in net unrealized appreciation, net of tax	$	7,208		$	31,187

In the above table, changes in deferred policy acquisition costs for our life insurance segment are affected by fluctuations that may occur in the interest rate environment from time to time.

We continually monitor the difference between our cost basis and the estimated fair value of our investments. Our accounting policy for impairment recognition requires OTTI charges to be recorded when we determine that it is more likely than not that we will be unable to collect all amounts due according to the contractual terms of the fixed maturity security or that the anticipated recovery in fair value of the equity security will not occur in a reasonable amount of time. Impairment charges on investments are recorded based on the fair value of the investments at the measurement date. Factors considered in evaluating whether a decline in value is other-than-temporary include: the length of time and the extent to which fair value has been less than cost; the financial condition and near-term prospects of the issuer; our intention to hold the investment; and the likelihood that we will be required to sell the investment.

The tables on the following pages summarize our fixed maturity and equity securities that were in an unrealized loss position at September 30, 2011 and December 31, 2010. The securities are presented by the length of time they have been continuously in an unrealized loss position. It is possible that we could recognize OTTI charges in future periods on securities held at September 30, 2011, if future events or information cause us to determine that a decline in fair value is other-than-temporary.

We believe the unrealized depreciation in value of securities in our fixed maturity portfolio is primarily attributable to changes in market interest rates and not the credit quality of the issuer. We have no intent to sell and it is more likely than not that we will not be required to sell these securities until such time as the fair value recovers to at least equal our cost basis or the securities mature.

We have evaluated the unrealized losses reported for all of our equity securities at September 30, 2011, and have concluded that the duration and severity of these losses do not warrant the recognition of an OTTI charge at September 30, 2011. Our largest unrealized loss greater than 12 months on an individual equity security at September 30, 2011 was $0.2 million. We have no intention to sell any of these securities prior to a recovery in value, but will continue to monitor the fair value reported for these securities as part of our overall process to evaluate investments for OTTI recognition.



(In Thousands)
September 30, 2011	Less than 12 months					12 months or longer					Total
Type of Investment	Number of Issues	Fair Value		Gross Unrealized Depreciation		Number of Issues	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
HELD-TO-MATURITY
Fixed maturities
Bonds
States, municipalities and political subdivisions
Special revenue
South	1	$	467	$	66	—	$	—	$	—	$	467	$	66
Total Held-to-Maturity Fixed Maturities	1	$	467	$	66	—	$	—	$	—	$	467	$	66
AVAILABLE-FOR-SALE
Fixed maturities
Bonds
U.S. government and government-sponsored enterprises
Agency	1	4,996		4		1	4,993		7		9,989		11
States, municipalities and political subdivisions
General obligations
Midwest	4	2,438		11		—	—		—		2,438		11
Special revenue							—
Midwest	3	1,557		3		—	—		—		1,557		3
Foreign bonds
Canadian	3	8,657		171		—	—		—		8,657		171
Other foreign	19	15,802		358		4	10,749		310		26,551		668
Public utilities
Electric	4	7,413		272		3	7,265		41		14,678		313
Gas distribution	1	1,984		58		—	—		—		1,984		58
Corporate bonds
Oil and gas	7	16,251		440		—	—		—		16,251		440
Basic resources	5	16,008		645		—	—		—		16,008		645
Construction and materials	2	9,900		172		—	—		—		9,900		172
Industrial goods and services	8	19,519		186		—	—		—		19,519		186
Auto and parts	1	2,655		345		—	—		—		2,655		345
Food and beverage	6	4,942		177		—	—		—		4,942		177
Personal and household goods	2	5,061		297		1	2,546		5		7,607		302
Media	1	4,725		190		1	2,186		24		6,911		214
Travel and leisure	3	2,771		87		—	—		—		2,771		87
Banks	27	30,081		1,367		—	—		—		30,081		1,367
Insurance	2	506		10		—	—		—		506		10
Real estate	4	7,084		224		—	—		—		7,084		224
Financial services	21	12,110		1,054		—	—		—		12,110		1,054
Technology	1	2,160		55		—	—		—		2,160		55
Collateralized mortgage obligations
Government	7	1,430		22		—	—		—		1,430		22
Other	1	241		36		—	—		—		241		36
Mortgage-backed securities	7	908		12		—	—		—		908		12
Asset-backed securities	3	585		286		—	—		—		585		286
Total Available-For-Sale Fixed Maturities	143	$	179,784	$	6,482	10	$	27,739	$	387	$	207,523	$	6,869
Equity securities



Common stocks
Public utilities	7	$	223	$	86	—	$	—	$	—	$	223	$	86
Corporate
Oil and gas	1	177		14		—	—		—		177		14
Industrial goods and services	14	1,618		454		—	—		—		1,618		454
Autos and parts	3	8		4		—	—		—		8		4
Food and beverage	3	509		15		—	—		—		509		15
Health care	8	961		160		1	332		162		1,293		322
Retail	11	1,189		292		—	—		—		1,189		292
Media	1	111		37		—	—		—		111		37
Telecommunications	4	61		7		1	12		7		73		14
Banks	10	975		212		1	380		176		1,355		388
Insurance	8	1,198		127		1	48		9		1,246		136
Real estate	—	—		—		3	207		70		207		70
Financial services	1	237		45		—	—		—		237		45
Technology	4	628		184		—	—		—		628		184
Nonredeemable preferred stocks	6	2,380		476		—	—		—		2,380		476
Total Available-for-Sale Equity Securities	81	$	10,275	$	2,113	7	$	979	$	424	$	11,254	$	2,537
Total Available-for-Sale Securities	224	$	190,059	$	8,595	17	$	28,718	$	811	$	218,777	$	9,406
Total	225	$	190,526	$	8,661	17	$	28,718	$	811	$	219,244	$	9,472



(In Thousands)
December 31, 2010	Less than 12 months					12 months or longer					Total
Type of Investment	Number of Issues	Fair Value		Gross Unrealized Depreciation		Number of Issues	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
HELD-TO-MATURITY
Fixed maturities
Bonds
States, municipalities and political subdivisions
Special revenue	—	$	—	$	—	2	$	590	$	108	$	590	$	108
Total Held-to-Maturity Fixed Maturities	—	$	—	$	—	2	$	590	$	108	$	590	$	108
AVAILABLE-FOR-SALE
Fixed maturities
Bonds
U.S. government and government-sponsored enterprises
Agency	12	$	41,374	$	626	7	$	30,661	$	388	$	72,035	$	1,014
States, municipalities and political subdivisions
General obligations
Midwest
North central - East	3	2,346		105		1	497		32		2,843		137
North central - West	1	860		58		—	—		—		860		58
South	2	947		53		—	—		—		947		53
West	3	2,723		90		—	—		—		2,723		90
Special revenue
Midwest
North central - East	7	8,275		96		2	2,553		79		10,828		175
North central - West	2	3,092		102		2	2,555		164		5,647		266
Northeast	—	—		—		1	771		9		771		9
South	3	3,964		144		—	—		—		3,964		144
Foreign bonds
Canadian	1	5,687		194		—	—		—		5,687		194
Other foreign	2	6,634		235		2	2,873		33		9,507		268
Public utilities
Electric	3	4,490		100		3	10,003		419		14,493		519
Gas distribution	—	—		—		1	1,420		70		1,420		70
Corporate bonds
Oil and gas	—	—		—		4	10,168		427		10,168		427
Chemicals	3	3,366		19		1	4,939		16		8,305		35
Industrial goods and services	5	13,642		171		2	5,821		191		19,463		362
Auto and parts	—	—		—		1	3,928		119		3,928		119
Food and beverage	1	2,006		12		2	4,491		99		6,497		111
Personal and household goods	3	9,233		241		2	3,039		48		12,272		289
Health care	4	14,416		186		—	—		—		14,416		186
Retail	4	9,370		321		1	2,308		8		11,678		329
Travel and leisure	1	2,013		69		2	792		8		2,805		77
Telecommunications	2	2,696		51		—	—		—		2,696		51
Banks	1	2,920		18		15	28,887		1,671		31,807		1,689
Insurance	1	2,169		14		—	—		—		2,169		14
Real estate	1	4,539		177		1	2,256		90		6,795		267
Financial services	3	11,660		236		15	5,270		747		16,930		983
Technology	—	—		—		3	8,628		334		8,628		334



Total Available-For-Sale Fixed Maturities	68	$	158,422	$	3,318	68	$	131,860	$	4,952	$	290,282	$	8,270
Equity securities
Common stocks
Public utilities	3	$	306	$	2	4	$	—	$	1	$	306	$	3
Corporate
Health care	2	1,437		62		1	371		124		1,808		186
Banks	2	614		33		1	488		68		1,102		101
Insurance	1	260		28		1	43		13		303		41
Real estate	1	79		10		2	158		30		237		40
Financial services	1	267		15		—	—		—		267		15
Nonredeemable preferred stocks	—	—		—		2	1,158		74		1,158		74
Total Available-for-Sale Equity Securities	10	$	2,963	$	150	11	$	2,218	$	310	$	5,181	$	460
Total Available-for-Sale Securities	78	$	161,385	$	3,468	79	$	134,078	$	5,262	$	295,463	$	8,730
Total	78	$	161,385	$	3,468	81	$	134,668	$	5,370	$	296,053	$	8,838