XML 53 R32.htm IDEA: XBRL DOCUMENT v2.4.1.9
Investing Activities (Tables)
 12 Months Ended
Dec. 31, 2014
Investments, Debt and Equity Securities [Abstract]  
Available-for-sale Securities
Fair Value and Cost of Securities:
As of December 31, 2014
($ in millions)
Amortized
Cost
 
Gross
Unrealized
Gains [1]
 
Gross
Unrealized
Losses [1]
 
Fair
Value
 
OTTI
Recognized
in AOCI [2]
 
 
 
 
 
 
 
 
 
 
U.S. government and agency
$
82.4

 
$
6.9

 
$
—

 
$
89.3

 
$
—

State and political subdivision
217.2

 
13.6

 
(1.6
)
 
229.2

 
(0.2
)
Foreign government
69.2

 
5.4

 
(0.8
)
 
73.8

 
—

Corporate
2,730.7

 
128.4

 
(27.2
)
 
2,831.9

 
(1.5
)
Commercial mortgage-backed (“CMBS”)
236.2

 
19.4

 
—

 
255.6

 
—

Residential mortgage-backed (“RMBS”)
558.9

 
20.9

 
(3.4
)
 
576.4

 
(8.6
)
Collateralized debt obligation (“CDO”) /
  collateralized loan obligation (“CLO”)
84.2

 
0.4

 
(1.1
)
 
83.5

 
(2.7
)
Other asset-backed (“ABS”)
82.1

 
3.8

 
(3.8
)
 
82.1

 
—

Available-for-sale debt securities
$
4,060.9

 
$
198.8

 
$
(37.9
)
 
$
4,221.8

 
$
(13.0
)
Available-for-sale equity securities
$
28.4

 
$
0.6

 
$
(0.3
)
 
$
28.7

 
$
—

———————
[1]
Net unrealized investment gains and losses on securities classified as available-for-sale and certain other assets are included in our balance sheets as a component of AOCI.
[2]
Represents the amount of non-credit OTTI losses recognized in AOCI excluding net unrealized gains or losses subsequent to the date of impairment. The table above presents the special category of AOCI for debt securities that are other-than-temporarily impaired when the impairment loss has been split between the credit loss component (in earnings) and the non-credit component (separate category of AOCI).

Fair Value and Cost of Securities:
As of December 31, 2013
($ in millions)
Amortized
Cost
 
Gross
Unrealized
Gains [1]
 
Gross
Unrealized
Losses [1]
 
Fair
Value
 
OTTI
Recognized
in AOCI [2]
 
 
 
 
 
 
 
 
 
 
U.S. government and agency
$
66.1

 
$
3.3

 
$
(0.8
)
 
$
68.6

 
$
—

State and political subdivision
156.2

 
3.8

 
(5.4
)
 
154.6

 
(0.2
)
Foreign government
63.1

 
2.7

 
(0.3
)
 
65.5

 
—

Corporate
2,182.9

 
69.6

 
(55.6
)
 
2,196.9

 
(1.5
)
CMBS
241.9

 
13.0

 
(1.2
)
 
253.7

 
(0.4
)
RMBS
513.7

 
8.1

 
(11.8
)
 
510.0

 
(8.6
)
CDO/CLO
70.6

 
1.7

 
(1.4
)
 
70.9

 
(3.0
)
Other ABS
96.1

 
3.7

 
(3.9
)
 
95.9

 
—

Available-for-sale debt securities
$
3,390.6

 
$
105.9

 
$
(80.4
)
 
$
3,416.1

 
$
(13.7
)
Available-for-sale equity securities
$
12.1

 
$
—

 
$
(0.9
)
 
$
11.2

 
$
—

———————
[1]
Net unrealized investment gains and losses on securities classified as available-for-sale and certain other assets are included in our balance sheets as a component of AOCI.
[2]
Represents the amount of non-credit OTTI losses recognized in AOCI excluding net unrealized gains or losses subsequent to the date of impairment. The table above presents the special category of AOCI for debt securities that are other-than-temporarily impaired when the impairment loss has been split between the credit loss component (in earnings) and the non-credit component (separate category of AOCI).
Investments Classified by Contractual Maturity Date
Maturities of Debt Securities:
As of December 31, 2014
($ in millions)
Amortized
Cost
 
Fair
Value
 
 
 
 
Due in one year or less
$
67.3

 
$
68.4

Due after one year through five years
455.1

 
475.3

Due after five years through ten years
1,547.4

 
1,596.9

Due after ten years
1,029.7

 
1,083.6

CMBS/RMBS/ABS/CDO/CLO [1]
961.4

 
997.6

Total
$
4,060.9

 
$
4,221.8

———————
[1]
CMBS, RMBS, ABS, CDO and CLO are not listed separately in the table as each security does not have a single fixed maturity.
Schedule of Available-for-sale Securities Reconciliation
The following table depicts the sources of available-for-sale investment proceeds and related investment gains (losses).

Sales of Available-for-Sale Securities:
As of December 31,
($ in millions)
2014
 
2013
 
2012
Debt securities, available-for-sale
 
 
 
 
 
Proceeds from sales
$
141.0

 
$
90.0

 
$
160.0

Proceeds from maturities/repayments
250.5

 
286.1

 
285.3

Gross investment gains from sales, prepayments and maturities
6.1

 
11.3

 
22.8

Gross investment losses from sales and maturities
(2.4
)
 
(0.4
)
 
(0.7
)
Equity securities, available-for-sale
 
 
 
 
 
Proceeds from sales
$
1.0

 
$
—

 
$
—

Gross investment gains from sales
—

 
—

 
—

Gross investment losses from sales
(0.1
)
 
—

 
—
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
Aging of Temporarily Impaired Securities:
As of December 31, 2013
($ in millions)
Less than 12 months
 
Greater than 12 months
 
Total
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
Debt Securities
 
 
 
 
 
 
 
 
 
 
 
U.S. government and agency
$
14.5

 
$
(0.8
)
 
$
—

 
$
—

 
$
14.5

 
$
(0.8
)
State and political subdivision
65.3

 
(4.4
)
 
4.0

 
(1.0
)
 
69.3

 
(5.4
)
Foreign government
17.0

 
(0.3
)
 
—

 
—

 
17.0

 
(0.3
)
Corporate
786.0

 
(36.8
)
 
120.5

 
(18.8
)
 
906.5

 
(55.6
)
CMBS
39.4

 
(1.1
)
 
3.0

 
(0.1
)
 
42.4

 
(1.2
)
RMBS
243.5

 
(8.5
)
 
40.3

 
(3.3
)
 
283.8

 
(11.8
)
CDO/CLO
30.5

 
(0.3
)
 
24.1

 
(1.1
)
 
54.6

 
(1.4
)
Other ABS
7.9

 
(0.1
)
 
8.0

 
(3.8
)
 
15.9

 
(3.9
)
Debt securities
1,204.1

 
(52.3
)
 
199.9

 
(28.1
)
 
1,404.0

 
(80.4
)
Equity securities
9.1

 
(0.9
)
 
—

 
—

 
9.1

 
(0.9
)
Total temporarily impaired securities
$
1,213.2

 
$
(53.2
)
 
$
199.9

 
$
(28.1
)
 
$
1,413.1

 
$
(81.3
)
Below investment grade
$
33.7

 
$
(1.9
)
 
$
12.1

 
$
(1.7
)
 
$
45.8

 
$
(3.6
)
Number of securities
 
 
326

 
 
 
79

 
 
 
405

Aging of Temporarily Impaired Securities:
As of December 31, 2014
($ in millions)
Less than 12 months
 
Greater than 12 months
 
Total
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
Debt Securities
 
 
 
 
 
 
 
 
 
 
 
U.S. government and agency
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

State and political subdivision
7.0

 
(0.4
)
 
18.7

 
(1.2
)
 
25.7

 
(1.6
)
Foreign government
11.3

 
(0.8
)
 
—

 
—

 
11.3

 
(0.8
)
Corporate
265.4

 
(8.8
)
 
273.1

 
(18.4
)
 
538.5

 
(27.2
)
CMBS
6.3

 
—

 
5.5

 
—

 
11.8

 
—

RMBS
4.6

 
(0.1
)
 
86.7

 
(3.3
)
 
91.3

 
(3.4
)
CDO/CLO
42.3

 
(0.4
)
 
30.2

 
(0.7
)
 
72.5

 
(1.1
)
Other ABS
5.8

 
—

 
7.5

 
(3.8
)
 
13.3

 
(3.8
)
Debt securities
342.7

 
(10.5
)
 
421.7

 
(27.4
)
 
764.4

 
(37.9
)
Equity securities
—

 
—

 
4.2

 
(0.3
)
 
4.2

 
(0.3
)
Total temporarily impaired securities
$
342.7

 
$
(10.5
)
 
$
425.9

 
$
(27.7
)
 
$
768.6

 
$
(38.2
)
Below investment grade
$
42.4

 
$
(2.4
)
 
$
17.1

 
$
(2.7
)
 
$
59.5

 
$
(5.1
)
Number of securities
 
 
121

 
 
 
127

 
 
 
248
Other than Temporary Impairment, Credit Losses Recognized in Earnings
The following table presents a roll-forward of pre-tax credit losses recognized in earnings related to available-for-sale debt securities for which a portion of the OTTI was recognized in OCI.

Credit Losses Recognized in Earnings on Available-for-Sale Debt Securities
for which a Portion of the OTTI Loss was Recognized in OCI:
As of December 31,
($ in millions)
2014
 
2013
 
2012
 
 
 
 
 
 
Balance, beginning of period
$
(18.5
)
 
$
(17.8
)
 
$
(21.3
)
Add: Credit losses on securities not previously impaired [1]
—

 
(0.3
)
 
(1.4
)
Add: Credit losses on securities previously impaired [1]


 
(0.7
)
 
(1.2
)
Less: Credit losses on securities impaired due to intent to sell
—

 
—

 
—

Less: Credit losses on securities sold
1.4

 
0.3

 
6.1

Less: Increases in cash flows expected on previously impaired securities
—

 
—

 
—

Balance, end of period
$
(17.1
)
 
$
(18.5
)
 
$
(17.8
)
———————
[1]
Additional credit losses on securities for which a portion of the OTTI loss was recognized in AOCI are included within net OTTI losses recognized in earnings on the statements of income and comprehensive income.
Investment Income
Sources of Net Investment Income:
For the years ended December 31,
($ in millions)
2014
 
2013
 
2012
 
 
 
 
 
 
Debt securities [1]
$
162.5

 
$
134.4

 
$
122.2

Equity securities
1.2

 
0.4

 
0.3

Policy loans
3.2

 
2.9

 
3.1

Limited partnerships and other investments
4.5

 
1.8

 
2.2

Fair value investments
2.1

 
2.9

 
4.0

Total investment income
173.5

 
142.4

 
131.8

Less: Investment expenses
1.5

 
1.5

 
0.9

Net investment income
$
172.0

 
$
140.9

 
$
130.9

———————
[1]
Includes net investment income on short-term investments.
Gain (Loss) on Investments
Sources and Types of Net Realized Investment Gains (Losses):
For the years ended December 31,
($ in millions)
2014
 
2013
 
2012
 
 
 
 
 
 
Total other-than-temporary debt impairments
$
(1.3
)
 
$
(0.9
)
 
$
(5.0
)
Portion of losses recognized in OCI
—

 
(0.9
)
 
2.2

Net debt impairments recognized in earnings
$
(1.3
)
 
$
(1.8
)
 
$
(2.8
)
Debt security impairments:
 
 
 
 
 
U.S. government and agency
$
—

 
$
—

 
$
—

State and political subdivision
—

 
—

 
(0.1
)
Foreign government
—

 
—

 
—

Corporate
(1.3
)
 
—

 
—

CMBS
—

 
(0.3
)
 
(0.1
)
RMBS
—

 
(1.3
)
 
(1.9
)
CDO/CLO
—

 
(0.2
)
 
(0.4
)
Other ABS
—

 
—

 
(0.3
)
Net debt security impairments
(1.3
)
 
(1.8
)
 
(2.8
)
Equity security impairments
—

 
—

 
—

Impairment losses
(1.3
)
 
(1.8
)
 
(2.8
)
Debt security transaction gains
6.1

 
11.3

 
22.8

Debt security transaction losses
(2.4
)
 
(0.4
)
 
(0.7
)
Equity security transaction gains
—

 
—

 
—

Equity security transaction losses
(0.1
)
 
—

 
—

Limited partnerships and other investment transaction gains
—

 
—

 
—

Limited partnerships and other investment transaction losses
—

 
—

 
(0.3
)
Net transaction gains (losses)
3.6

 
10.9

 
21.8

Derivative instruments
(21.9
)
 
(23.1
)
 
(49.0
)
Embedded derivatives [1]
(45.4
)
 
11.0

 
4.0

Related party reinsurance derivatives
—

 
—

 
(8.0
)
Net realized investment gains (losses), excluding impairment losses
(63.7
)
 
(1.2
)
 
(31.2
)
Net realized investment gains (losses), including impairment losses
$
(65.0
)
 
$
(3.0
)
 
$
(34.0
)
———————
[1]
Includes the change in fair value of embedded derivatives associated with fixed index annuity indexed crediting feature and variable annuity riders. See Note 8 to these financial statements for additional disclosures.
Schedule of Unrealized Loss on Investments
Sources of Changes in Net Unrealized Investment Gains (Losses):
For the years ended December 31,
($ in millions)
2014
 
2013
 
2012
 
 
 
 
 
 
Debt securities
$
135.4

 
$
(149.4
)
 
$
123.1

Equity securities
1.2

 
(0.9
)
 
—

Other investments
0.3

 
(0.8
)
 
—

Net unrealized investment gains (losses)
$
136.9

 
$
(151.1
)
 
$
123.1

 
 
 
 
 
 
Net unrealized investment gains (losses)
$
136.9

 
$
(151.1
)
 
$
123.1

Applicable to DAC
38.0

 
(61.3
)
 
32.0

Applicable to other actuarial offsets
50.3

 
(56.7
)
 
59.2

Applicable to deferred income tax expense (benefit)
31.9

 
(11.6
)
 
24.3

Offsets to net unrealized investment gains (losses)
120.2

 
(129.6
)
 
115.5

Net unrealized investment gains (losses) included in OCI
$
16.7

 
$
(21.5
)
 
$
7.6