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 June 30, 2012 and December 31, 2011, is as follows:



June 30, 2012	(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	$	3,556	$	44	$	—	$	3,600
Mortgage-backed securities	280		18		—		298
Collateralized mortgage obligations	28		1		—		29
Total Held-to-Maturity Fixed Maturities	$	3,864	$	63	$	—	$	3,927
AVAILABLE-FOR-SALE
Fixed maturities
Bonds
U.S. Treasury	$	42,364	$	1,140	$	—	$	43,504
U.S. government agency	39,722		490		—		40,212
States, municipalities and political subdivisions	699,803		58,080		269		757,614
Foreign bonds	226,172		10,089		627		235,634
Public utilities	241,811		15,203		55		256,959
Corporate bonds
Energy	178,831		7,718		1		186,548
Industrials	307,282		12,987		484		319,785
Consumer goods and services	209,643		9,232		271		218,604
Health care	120,500		7,130		7		127,623
Technology, media and telecommunications	123,527		5,910		106		129,331
Financial services	299,318		10,538		1,746		308,110
Mortgage-backed securities	33,884		1,130		22		34,992
Collateralized mortgage obligations	129,515		6,644		301		135,858
Asset-backed securities	5,188		432		151		5,469
Redeemable preferred stocks	378		3		—		381
Total Available-For-Sale Fixed Maturities	$	2,657,938	$	146,726	$	4,040	$	2,800,624
Equity securities
Common stocks
Public utilities	$	7,231	$	7,952	$	172	$	15,011
Energy	5,094		6,679		—		11,773
Industrials	13,032		18,206		240		30,998
Consumer goods and services	10,394		7,701		134		17,961
Health care	8,212		10,018		187		18,043
Technology, media and telecommunications	5,367		5,822		134		11,055
Financial services	15,699		50,549		342		65,906
Nonredeemable preferred stocks	3,634		119		141		3,612
Total Available-for-Sale Equity Securities	$	68,663	$	107,046	$	1,350	$	174,359
Total Available-for-Sale Securities	$	2,726,601	$	253,772	$	5,390	$	2,974,983



December 31, 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	$	3,739	$	52	$	61	$	3,730
Mortgage-backed securities	356		25		—		381
Collateralized mortgage obligations	48		2		—		50
Total Held-to-Maturity Fixed Maturities	$	4,143	$	79	$	61	$	4,161
AVAILABLE-FOR-SALE
Fixed maturities
Bonds
U.S. Treasury	$	42,530	$	1,421	$	—	$	43,951
U.S. government agency	95,813		582		—		96,395
States, municipalities and political subdivisions	687,039		61,076		8		748,107
Foreign bonds	206,872		8,766		823		214,815
Public utilities	254,822		15,562		313		270,071
Corporate bonds
Energy	189,902		7,567		277		197,192
Industrials	285,696		10,631		650		295,677
Consumer goods and services	203,948		8,872		646		212,174
Health care	109,219		6,497		45		115,671
Technology, media and telecommunications	108,315		4,951		318		112,948
Financial services	258,526		9,075		2,300		265,301
Mortgage-backed securities	34,353		1,041		4		35,390
Collateralized mortgage obligations	79,545		3,490		184		82,851
Asset-backed securities	5,801		495		—		6,296
Redeemable preferred stocks	405		4		—		409
Total Available-For-Sale Fixed Maturities	$	2,562,786	$	140,030	$	5,568	$	2,697,248
Equity securities
Common stocks
Public utilities	$	7,231	$	7,602	$	98	$	14,735
Energy	5,094		7,116		—		12,210
Industrials	12,678		16,153		275		28,556
Consumer goods and services	10,750		7,982		168		18,564
Health care	8,212		8,008		232		15,988
Technology, media and telecommunications	5,368		4,796		146		10,018
Financial services	15,592		41,041		543		56,090
Nonredeemable preferred stocks	3,634		40		384		3,290
Total Available-for-Sale Equity Securities	$	68,559	$	92,738	$	1,846	$	159,451
Total Available-for-Sale Securities	$	2,631,345	$	232,768	$	7,414	$	2,856,699

Maturities

The amortized cost and fair value of held-to-maturity, available-for-sale and trading securities at June 30, 2012, 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
June 30, 2012	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	406	$	416	$	241,061	$	245,155	$	490	$	520
Due after one year through five years	3,150		3,184		1,051,843		1,107,127		7,376		7,171
Due after five years through 10 years	—		—		1,054,621		1,123,705		1,844		1,776
Due after 10 years	—		—		141,826		148,318		4,553		4,782
Asset-backed securities	—		—		5,188		5,469		—		—
Mortgage-backed securities	280		298		33,884		34,992		—		—
Collateralized mortgage obligations	28		29		129,515		135,858		—		—
	$	3,864	$	3,927	$	2,657,938	$	2,800,624	$	14,263	$	14,249

Net Realized Investment Gains and Losses

Net realized gains (losses) on disposition of investments are computed using the specific identification method and recognized as a component of earnings for the current period. A summary of net realized investment gains (losses) resulting from investment sales and calls is as follows:



	Three Months Ended June 30,						Six Months Ended June 30,
(In Thousands)	2012			2011			2012		2011
Net realized investment gains (losses)
Fixed maturities	$	792		$	1,048		$	2,323	$	2,434
Equity securities	(4		)	218			697		1,334
Trading securities	(224		)	(38		)	338		278
Other long-term investments	—			(104		)	—		(269		)
Total net realized investment gains	$	564		$	1,124		$	3,358	$	3,777

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



	Three Months Ended June 30,				Six Months Ended June 30,
(In Thousands)	2012		2011		2012		2011
Proceeds from sales	$	10,412	$	16,520	$	13,412	$	21,367
Gross realized gains	8		261		478		351
Gross realized losses	—		172		25		688

There were no sales of held-to-maturity securities during the six-month periods ended June 30, 2012 and 2011.

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 $14.2 million and $13.5 million at June 30, 2012 and December 31, 2011, respectively.

Off-Balance Sheet Arrangements

Pursuant to an agreement with one of our limited liability partnership investments, 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 $7.4 million at June 30, 2012.

Unrealized Appreciation and Depreciation

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



	Six Months Ended June 30,
(In Thousands)	2012			2011
Change in net unrealized investment appreciation
Available-for-sale fixed maturities and equity securities	$	23,028		$	19,419
Deferred policy acquisition costs	(4,116		)	(257		)
Income tax effect	(6,620		)	(6,707		)
Total change in net unrealized investment appreciation, net of tax	$	12,292		$	12,455

In the above table, the amount reported as changes in deferred policy acquisition costs pertains to our life insurance segment and represents the impact of fluctuations that 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 other-than-temporary impairment ("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 June 30, 2012 and December 31, 2011. 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 June 30, 2012, 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 June 30, 2012, and have concluded that the duration and severity of these losses do not warrant the recognition of an OTTI charge at June 30, 2012. Our largest unrealized loss greater than 12 months on an individual equity security at June 30, 2012 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)
June 30, 2012	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
AVAILABLE-FOR-SALE
Fixed maturities
Bonds
States, municipalities and political subdivisions	36	$	21,466	$	269	—	$	—	$	—	$	21,466	$	269
Foreign bonds	14	23,083		488		2	3,982		139		27,065		627
Public utilities	1	989		11		1	1,117		44		2,106		55
Corporate bonds
Energy	1	2,526		1		—	—		—		2,526		1
Industrials	9	27,584		381		1	2,897		103		30,481		484
Consumer goods and services	12	17,088		252		1	1,379		19		18,467		271
Health care	1	1,715		7		—	—		—		1,715		7
Technology, media and telecommunications	3	10,589		47		1	2,135		59		12,724		106
Financial services	16	24,317		340		22	22,061		1,406		46,378		1,746
Mortgage-backed securities	6	5,034		22		—	—		—		5,034		22
Collateralized mortgage obligations	5	18,857		117		7	303		184		19,160		301
Asset-backed securities	1	96		151		—	—		—		96		151
Total Available-For-Sale Fixed Maturities	105	$	153,344	$	2,086	35	$	33,874	$	1,954	$	187,218	$	4,040
Equity securities
Common stocks
Public utilities	4	$	462	$	172	—	$	—	$	—	$	462	$	172
Industrials	9	876		123		6	504		117		1,380		240
Consumer goods and services	5	94		16		6	345		118		439		134
Health care	3	446		18		5	789		169		1,235		187
Technology, media and telecommunications	10	200		16		4	528		118		728		134
Financial services	4	663		125		7	1,018		217		1,681		342
Nonredeemable preferred stocks	—	—		—		3	1,135		141		1,135		141
Total Available-for-Sale Equity Securities	35	$	2,741	$	470	31	$	4,319	$	880	$	7,060	$	1,350
Total Available-for-Sale Securities	140	$	156,085	$	2,556	66	$	38,193	$	2,834	$	194,278	$	5,390



(In Thousands)
December 31, 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	—	$	—	$	—	1	$	473	$	61	$	473	$	61
Total Held-to-Maturity Fixed Maturities	—	$	—	$	—	1	$	473	$	61	$	473	$	61
AVAILABLE-FOR-SALE
Fixed maturities
Bonds
States, municipalities and political subdivisions	6	$	3,555	$	6	1	$	619	$	2	$	4,174	$	8
Foreign bonds	13	18,001		488		6	14,123		335		32,124		823
Public utilities	6	9,579		160		1	1,068		153		10,647		313
Corporate bonds
Energy	2	5,436		53		1	5,223		224		10,659		277
Industrials	9	25,664		359		3	8,135		291		33,799		650
Consumer goods and services	5	5,360		514		5	3,932		132		9,292		646
Health care	2	5,027		45		—	—		—		5,027		45
Technology, media and telecommunications	13	14,148		318		—	—		—		14,148		318
Financial services	23	20,073		292		26	28,892		2,008		48,965		2,300
Mortgage-backed securities	5	684		4		—	—		—		684		4
Collateralized mortgage obligations	7	4,466		141		3	5,209		43		9,675		184
Total Available-For-Sale Fixed Maturities	91	$	111,993	$	2,380	46	$	67,201	$	3,188	$	179,194	$	5,568
Equity securities
Common stocks
Public utilities	3	$	210	$	98	—	$	—	$	—	$	210	$	98
Industrials	7	975		155		8	577		120		1,552		275
Consumer goods and services	12	625		150		3	431		18		1,056		168
Health care	5	768		94		4	455		138		1,223		232
Technology, media and telecommunications	7	571		124		2	144		22		715		146
Financial services	16	1,876		319		6	746		224		2,622		543
Nonredeemable preferred stocks	3	1,171		31		2	878		353		2,049		384
Total Available-for-Sale Equity Securities	53	$	6,196	$	971	25	$	3,231	$	875	$	9,427	$	1,846
Total Available-for-Sale Securities	144	$	118,189	$	3,351	71	$	70,432	$	4,063	$	188,621	$	7,414
Total	144	$	118,189	$	3,351	72	$	70,905	$	4,124	$	189,094	$	7,475