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, 2017 and December 31, 2016 is as follows:



June 30, 2017
Type of Investment	Cost or Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Fair Value
HELD-TO-MATURITY
Fixed maturities:
Bonds
Corporate bonds - financial services	$	150	$	—	$	—	$	150
Mortgage-backed securities	42		—		—		42
Total Held-to-Maturity Fixed Maturities	$	192	$	—	$	—	$	192
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	$	22,068	$	56	$	80	$	22,044
U.S. government agency	79,643		1,574		424		80,793
States, municipalities and political subdivisions
General obligations:
Midwest	128,921		2,588		555		130,954
Northeast	54,322		1,348		91		55,579
South	141,845		2,496		1,350		142,991
West	120,651		2,468		1,165		121,954
Special revenue:
Midwest	163,411		3,579		678		166,312
Northeast	80,282		926		1,229		79,979
South	258,666		3,871		3,547		258,990
West	152,224		2,614		2,377		152,461
Foreign bonds	55,503		1,987		—		57,490
Public utilities	207,437		4,474		240		211,671
Corporate bonds
Energy	99,416		2,249		200		101,465
Industrials	214,919		5,726		219		220,426
Consumer goods and services	179,992		4,927		157		184,762
Health care	75,863		2,469		—		78,332
Technology, media and telecommunications	143,209		3,224		175		146,258
Financial services	261,314		6,763		526		267,551
Mortgage-backed securities	15,515		178		195		15,498
Collateralized mortgage obligations
Government national mortgage association	155,129		2,228		1,490		155,867
Federal home loan mortgage corporation	194,556		2,566		2,894		194,228



Federal national mortgage association	103,061		2,367		752		104,676
Asset-backed securities	4,379		419		—		4,798
Total Available-for-Sale Fixed Maturities	$	2,912,326	$	61,097	$	18,344	$	2,955,079
Equity securities:
Common stocks
Public utilities	$	6,394	$	15,062	$	140	$	21,316
Energy	6,514		7,133		121		13,526
Industrials	13,116		44,356		181		57,291
Consumer goods and services	10,070		15,379		118		25,331
Health care	7,763		24,958		—		32,721
Technology, media and telecommunications	6,009		8,837		107		14,739
Financial services	11,630		98,733		51		110,312
Nonredeemable preferred stocks	1,037		33		—		1,070
Total Available-for-Sale Equity Securities	$	62,533	$	214,491	$	718	$	276,306
Total Available-for-Sale Securities	$	2,974,859	$	275,588	$	19,062	$	3,231,385



December 31, 2016
Type of Investment	Cost or Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Fair Value
HELD-TO-MATURITY
Fixed maturities:
Bonds
Corporate bonds - financial services	$	150	$	—	$	—	$	150
Mortgage-backed securities	48		1		—		49
Total Held-to-Maturity Fixed Maturities	$	198	$	1	$	—	$	199
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	$	23,216	$	87	$	108	$	23,195
U.S. government agency	76,692		1,445		540		77,597
States, municipalities and political subdivisions
General obligations:
Midwest	143,747		1,808		1,412		144,143
Northeast	57,731		909		231		58,409
South	129,475		1,249		2,355		128,369
West	114,524		1,380		2,173		113,731
Special revenue:
Midwest	167,430		2,313		1,433		168,310
Northeast	70,202		487		2,624		68,065
South	244,225		1,753		6,791		239,187
West	134,287		1,509		4,052		131,744
Foreign bonds	62,995		2,239		—		65,234
Public utilities	212,360		3,761		447		215,674
Corporate bonds
Energy	107,084		2,195		419		108,860
Industrials	225,526		5,359		982		229,903
Consumer goods and services	178,135		3,847		295		181,687
Health care	81,211		2,063		151		83,123
Technology, media and telecommunications	143,402		2,029		819		144,612
Financial services	269,981		5,328		1,358		273,951
Mortgage-backed securities	17,288		201		241		17,248
Collateralized mortgage obligations
Government national mortgage association	145,947		1,279		2,766		144,460
Federal home loan mortgage corporation	176,226		1,638		3,406		174,458
Federal national mortgage association	101,414		1,816		1,334		101,896
Asset-backed securities	4,407		145		282		4,270
Total Available-for-Sale Fixed Maturities	$	2,887,505	$	44,840	$	34,219	$	2,898,126
Equity securities:
Common stocks



Public utilities	$	6,394	$	13,465	$	188	$	19,671
Energy	6,514		8,555		22		15,047
Industrials	13,252		38,715		173		51,794
Consumer goods and services	10,324		13,851		58		24,117
Health care	7,763		19,657		—		27,420
Technology, media and telecommunications	5,931		9,476		38		15,369
Financial services	17,289		98,728		67		115,950
Nonredeemable preferred stocks	1,037		11		—		1,048
Total Available-for-Sale Equity Securities	$	68,504	$	202,458	$	546	$	270,416
Total Available-for-Sale Securities	$	2,956,009	$	247,298	$	34,765	$	3,168,542

Maturities

The amortized cost and fair value of held-to-maturity, available-for-sale and trading fixed maturity securities at June 30, 2017, 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.



	Held-To-Maturity				Available-For-Sale				Trading
June 30, 2017	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	150	$	150	$	141,196	$	142,309	$	2,958	$	3,300
Due after one year through five years	—		—		787,370		808,996		7,532		8,733
Due after five years through 10 years	—		—		769,568		788,131		1,302		1,379
Due after 10 years	—		—		741,552		740,576		2,153		2,416
Asset-backed securities	—		—		4,379		4,798		—		—
Mortgage-backed securities	42		42		15,515		15,498		—		—
Collateralized mortgage obligations	—		—		452,746		454,771		—		—
	$	192	$	192	$	2,912,326	$	2,955,079	$	13,945	$	15,828

Net Realized Investment Gains and Losses

Net realized gains on disposition of investments are computed using the specific identification method and are included in the computation of net income. A summary of the components of net realized investment gains (losses) is as follows:



	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017		2016
Net realized investment gains (losses)
Fixed maturities:
Available-for-sale	$	676		$	846		$	2,671	$	1,362
Trading securities
Change in fair value	176			98			547		371
Sales	(11		)	461			46		461
Equity securities:
Available-for-sale	1,299			—			2,709		984
Trading securities
Change in fair value	245			237			356		330
Sales	6			(26		)	16		(26		)
Short-term investments	—			(43		)	—		—
Cash equivalents	—			23			—		169
Real estate	289			—			289		—
Total net realized investment gains	$	2,680		$	1,596		$	6,634	$	3,651

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



	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017			2016
Proceeds from sales	$	—	$	1,074	$	5,059		$	3,042
Gross realized gains	—		54		2,300			975
Gross realized losses	—		—		(78		)	—

There were no sales of held-to-maturity securities during the three- and six-month periods ended June 30, 2017 and 2016.

Our investment portfolio includes trading securities with embedded derivatives. These securities are primarily convertible securities which 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. Our portfolio of trading securities had a fair value of $22,440 and $20,034 at June 30, 2017 and December 31, 2016, respectively.

Funding Commitment

Pursuant to an agreement with one of our limited liability partnership investments, we are contractually committed through December 31, 2023 to make capital contributions upon request of the partnership. Our remaining potential contractual obligation was $5,576 at June 30, 2017.

Unrealized Appreciation

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



	Six Months Ended June 30,
	2017			2016
Change in net unrealized investment appreciation
Available-for-sale fixed maturities	$	32,132		$	98,381
Available-for-sale equity securities	11,861			12,700
Deferred policy acquisition costs	(3,753		)	(20,220		)
Income tax effect	(14,084		)	(31,802		)
Total change in net unrealized investment appreciation, net of tax	$	26,156		$	59,059

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 or based on the value calculated using a discounted cash flow model. Credit-related impairments on fixed maturity securities that we do not plan to sell, and for which we are not more likely than not to be required to sell, are recognized in net income. Any non-credit related impairment is recognized as a component of other comprehensive income. 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, 2017 and December 31, 2016. 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, 2017, if future events or information cause us to determine that a decline in fair value is other-than-temporary.

We have evaluated the near-term prospects of the issuers of our fixed maturity securities in relation to the severity and duration of the unrealized loss and determined that these losses did not warrant the recognition of an OTTI charge at June 30, 2017 or at June 30, 2016. We have no intent to sell, and it is more likely than not that we will not be required to sell, these securities until the fair value recovers to at least equal our cost basis or the securities mature.

We have evaluated the near-term prospects of the issuers of our equity securities in relation to the severity and duration of the unrealized loss and determined that these losses did not warrant the recognition of an OTTI charge at June 30, 2017 or at June 30, 2016. Our largest unrealized loss greater than 12 months on an individual equity security at June 30, 2017 was $173. 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.




June 30, 2017	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
U.S. Treasury	4	$	10,159	$	78	2	$	1,604	$	2	$	11,763	$	80
U.S. government agency	8	33,669		424		—	—		—		33,669		424
States, municipalities and political subdivisions
General obligations
Midwest	5	17,233		381		1	5,254		174		22,487		555
Northeast	1	3,574		91		—	—		—		3,574		91
South	15	36,447		839		2	9,271		511		45,718		1,350
West	9	29,069		1,061		1	2,029		104		31,098		1,165
Special revenue
Midwest	12	28,702		678		—	—		—		28,702		678
Northeast	16	48,096		1,229		—	—		—		48,096		1,229
South	33	82,121		2,461		4	15,640		1,086		97,761		3,547
West	27	69,324		2,377		—	—		—		69,324		2,377
Public utilities	8	16,557		235		1	92		5		16,649		240
Corporate bonds
Energy	5	12,755		200		—	—		—		12,755		200
Industrials	5	9,004		75		2	4,803		144		13,807		219
Consumer goods and services	8	13,832		157		—	—		—		13,832		157
Technology, media and telecommunications	7	20,121		62		2	10,584		113		30,705		175
Financial services	15	36,947		526		—	—		—		36,947		526
Mortgage-backed securities	14	8,927		152		2	996		43		9,923		195
Collateralized mortgage obligations
Government national mortgage association	18	56,024		945		8	18,631		545		74,655		1,490
Federal home loan mortgage corporation	26	107,586		2,693		3	4,814		201		112,400		2,894
Federal national mortgage association	12	33,550		480		5	8,327		272		41,877		752
Total Available-for-Sale Fixed Maturities	248	$	673,697	$	15,144	33	$	82,045	$	3,200	$	755,742	$	18,344
Equity securities:
Common stocks
Public utilities	—	$	—	$	—	1	$	168	$	140	$	168	$	140
Energy	2	553		95		1	160		26		713		121
Industrials	—	—		—		6	231		181		231		181
Consumer goods and services	1	22		1		4	215		117		237		118
Technology, media and telecommunications	3	544		55		1	14		52		558		107
Financial services	1	52		3		2	166		48		218		51
Total Available-for-Sale Equity Securities	7	$	1,171	$	154	15	$	954	$	564	$	2,125	$	718
Total Available-for-Sale Securities	255	$	674,868	$	15,298	48	$	82,999	$	3,764	$	757,867	$	19,062




December 31, 2016	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
U.S. Treasury	9	$	10,800	$	108	—	$	—	$	—	$	10,800	$	108
U.S. government agency	10	36,593		540		—	—		—		36,593		540
States, municipalities and political subdivisions
General obligations
Midwest	27	40,545		1,412		—	—		—		40,545		1,412
Northeast	9	9,874		231		—	—		—		9,874		231
South	37	53,699		2,355		—	—		—		53,699		2,355
West	30	55,265		2,173		—	—		—		55,265		2,173
Special revenue
Midwest	41	62,937		1,433		—	—		—		62,937		1,433
Northeast	22	54,993		2,624		—	—		—		54,993		2,624
South	79	152,979		6,791		—	—		—		152,979		6,791
West	44	81,676		4,052		—	—		—		81,676		4,052
Public utilities	20	38,511		423		2	2,122		24		40,633		447
Corporate bonds
Energy	8	15,938		313		3	8,232		106		24,170		419
Industrials	24	42,854		596		3	5,641		386		48,495		982
Consumer goods and services	11	21,059		295		—	—		—		21,059		295
Health care	9	20,918		151		—	—		—		20,918		151
Technology, media and telecommunications	16	41,230		516		3	10,241		303		51,471		819
Financial services	37	75,286		1,358		—	—		—		75,286		1,358
Mortgage-backed securities	16	9,611		187		5	1,198		54		10,809		241
Collateralized mortgage obligations
Government national mortgage association	36	82,430		2,261		9	13,603		505		96,033		2,766
Federal home loan mortgage corporation	41	105,775		3,165		3	5,141		241		110,916		3,406
Federal national mortgage association	27	46,633		1,091		4	4,341		243		50,974		1,334
Asset-backed securities	1	971		29		1	2,559		253		3,530		282
Total Available-for-Sale Fixed Maturities	554	$	1,060,577	$	32,104	33	$	53,078	$	2,115	$	1,113,655	$	34,219
Equity securities:
Common stocks
Public utilities	—	$	—	$	—	3	$	120	$	188	$	120	$	188
Energy	—	—		—		1	163		22		163		22
Industrials	—	—		—		6	239		173		239		173
Consumer goods and services	3	282		55		2	15		3		297		58
Technology, media and telecommunications	7	26		5		8	33		33		59		38
Financial services	3	53		3		2	150		64		203		67
Total Available-for-Sale Equity Securities	13	$	361	$	63	22	$	720	$	483	$	1,081	$	546
Total Available-for-Sale Securities	567	$	1,060,938	$	32,167	55	$	53,798	$	2,598	$	1,114,736	$	34,765