Investments (Tables)

12 Months Ended

Dec. 31, 2013

Investments Debt And Equity Securities [Abstract]

Schedule of Amortized Cost, Gross Unrealized Gains, Gross Unrealized Losses and Fair Value of Investments

The amortized cost, gross unrealized gains, gross unrealized losses and fair value of investments as of December 31 were as follows:


December 31, 2013			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(in millions)	Cost		Gains		Losses		Value
Fixed maturities
USD denominated:
U.S. Governments	$	273.4	$	2.4	$	0.5	$	275.3
Non-U.S. Governments		60.9		0.3		1.0		60.2
Obligations of states and political subdivisions		563.7		22.9		8.8		577.8
Credit-Financial		426.3		15.4		1.8		439.9
Credit-Industrial		385.5		13.8		2.2		397.1
Credit-Utility		162.0		5.4		0.8		166.6
Structured securities:
CMO/MBS-agency ⁽¹⁾		219.4		9.2		1.7		226.9
CMO/MBS-non agency		19.4		0.8		0.0		20.2
CMBS ⁽²⁾		162.7		3.1		1.0		164.8
ABS-residential ⁽³⁾		6.8		0.3		0.5		6.6
ABS-non residential		116.8		0.5		0.1		117.2
Foreign denominated:
Governments		207.7		4.9		5.9		206.7
Credit		155.5		4.4		4.8		155.1

Total fixed maturities		2,760.1		83.4		29.1		2,814.4
Equity securities		346.9		188.6		1.2		534.3
Other investments		377.4		2.8		1.3		378.9
Short-term investments		351.6		0.0		0.0		351.6

Total investments	$	3,836.0	$	274.8	$	31.6	$	4,079.2


December 31, 2012			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(in millions)	Cost		Gains		Losses		Value
Fixed maturities
USD denominated:
U.S. Governments	$	401.1	$	9.3	$	0.0	$	410.4
Non-U.S. Governments		53.1		3.6		0.1		56.6
Obligations of states and political subdivisions		551.7		44.9		0.5		596.1
Credit-Financial		382.4		25.7		0.7		407.4
Credit-Industrial		428.4		31.1		0.7		458.8
Credit-Utility		189.9		12.6		0.4		202.1
Structured securities:
CMO/MBS-agency ⁽¹⁾		375.1		20.2		0.2		395.1
CMO/MBS-non agency		12.5		1.0		0.2		13.3
CMBS ⁽²⁾		109.5		5.7		0.2		115.0
ABS-residential ⁽³⁾		10.1		0.2		0.8		9.5
ABS-non residential		81.3		1.2		0.0		82.5
Foreign denominated:
Governments		262.1		9.2		4.3		267.0
Credit		135.9		6.1		1.8		140.2

Total fixed maturities		2,993.1		170.8		9.9		3,154.0
Equity securities		373.5		153.0		5.1		521.4
Other investments		294.8		1.2		5.0		291.0
Short-term investments		234.3		0.1		0.1		234.3

Total investments	$	3,895.7	$	325.1	$	20.1	$	4,200.7

⁽¹⁾	Collateralized mortgage obligations/mortgage-backed securities (“CMO/MBS”).

⁽²⁾	Commercial mortgage-backed securities (“CMBS”).

⁽³⁾	Asset-backed securities (“ABS”).

Schedule of Amortized Cost and Fair Values of Fixed Maturity Investments, by Contractual Maturity

The amortized cost and fair values of fixed maturity investments as of December 31, 2013, by contractual maturity, were as follows:


	Amortized		Fair
(in millions)	Cost		Value
Due in one year or less	$	223.7	$	225.5
Due after one year through five years		1,245.7		1,268.7
Due after five years through ten years		549.1		570.3
Thereafter		216.5		214.2
Structured securities		525.1		535.7

Total	$	2,760.1	$	2,814.4

Schedule of Aging of Unrealized Losses on Company's Investments in Fixed Maturities, Equity Securities and Other Investments

An aging of unrealized losses on our investments in fixed maturities, equity securities, other investments and short-term investments as of December 31 is presented below:


December 31, 2013	Less Than One Year					One Year or Greater				Total
	Fair			Unrealized		Fair		Unrealized		Fair			Unrealized
(in millions)	Value			Losses		Value		Losses		Value			Losses
Fixed maturities
USD denominated:
U.S. Governments	$	55.3		$	0.5	$	0.0	$	0.0	$	55.3		$	0.5
Non-U.S. Governments		36.3			1.0		0.0		0.0		36.3			1.0
Obligations of states and political subdivisions⁽²⁾		154.6			8.8		3.1		0.0		157.7			8.8
Credit-Financial		88.7			1.7		2.4		0.1		91.1			1.8
Credit-Industrial		85.7			2.0		2.9		0.2		88.6			2.2
Credit-Utility		21.2			0.7		1.9		0.1		23.1			0.8
Structured securities:
CMO/MBS-agency		58.4			1.2		5.6		0.5		64.0			1.7
CMBS⁽²⁾		24.2			1.0		1.1		0.0		25.3			1.0
ABS-residential		0.0			0.0		3.6		0.5		3.6			0.5
ABS-non residential⁽²⁾		59.1			0.1		2.0		0.0		61.1			0.1
Foreign denominated:
Governments		170.5			5.9		0.0		0.0		170.5			5.9
Credit		125.3			4.8		0.0		0.0		125.3			4.8

Total fixed maturities		879.3			27.7		22.6		1.4		901.9			29.1
Equity securities		25.5			1.2		0.0		0.0		25.5			1.2
Other investments		(1.4	)		1.3		0.0		0.0		(1.4	)		1.3
Short-term investments⁽¹⁾		4.5			0.0		0.0		0.0		4.5			0.0

Total		$907.9			$30.2		$22.6		$1.4		$930.5			$31.6

⁽¹⁾	Unrealized losses less than one year are less than $0.1 million.

⁽²⁾	Unrealized losses one year or greater are less than $0.1 million


December 31, 2012	Less Than One Year				One Year or Greater				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(in millions)	Value		Losses		Value		Losses		Value		Losses
Fixed maturities
USD denominated:
U.S. Governments⁽¹⁾	$	11.9	$	0.0	$	0.0	$	0.0	$	11.9	$	0.0
Non-U.S. Governments ⁽²⁾		8.5		0.1		0.5		0.0		9.0		0.1
Obligations of states and political subdivisions		28.2		0.3		0.8		0.2		29.0		0.5
Credit-Financial		25.0		0.2		8.6		0.5		33.6		0.7
Credit-Industrial		32.2		0.4		3.0		0.3		35.2		0.7
Credit-Utility		8.4		0.2		0.8		0.2		9.2		0.4
Structured securities:
CMO/MBS-agency⁽²⁾		26.4		0.2		0.3		0.0		26.7		0.2
CMO/MBS-non agency		1.7		0.2		0.0		0.0		1.7		0.2
CMBS⁽¹⁾		5.7		0.0		3.5		0.2		9.2		0.2
ABS-residential		0.0		0.0		3.9		0.8		3.9		0.8
ABS-non residential ^{(1) (2)}		13.7		0.0		0.2		0.0		13.9		0.0
Foreign denominated:
Governments ⁽²⁾		180.5		4.3		0.3		0.0		180.8		4.3
Credit		76.3		1.8		0.0		0.0		76.3		1.8

Total fixed maturities		418.5		7.7		21.9		2.2		440.4		9.9
Equity securities		60.2		4.2		6.3		0.9		66.5		5.1
Other investments		11.6		5.0		0.0		0.0		11.6		5.0
Short-term investments		0.0		0.1		0.0		0.0		0.0		0.1

Total	$	490.3	$	17.0	$	28.2	$	3.1	$	518.5	$	20.1

⁽¹⁾	Unrealized losses less than one year are less than $0.1 million.

⁽²⁾	Unrealized losses one year or greater are less than $0.1 million.

Schedule of Investment Income and Expenses

Investment income and expenses for the years ended December 31 were as follows:


(in millions)	2013			2012			2011
Investment income:
Interest and dividends on fixed maturities	$	87.7		$	105.9		$	121.4
Dividends on equity securities		17.7			15.2			9.6
Interest on short-term and other investments		5.0			7.3			4.7
Other		(1.0	)		(0.4	)		(0.5	)

		109.4			128.0			135.2
Investment expenses		(9.4	)		(9.2	)		(9.4	)

Net investment income	$	100.0		$	118.8		$	125.8

Schedule of Company's Gross Realized Investment Gains (Losses)

The following table presents our gross realized investment and other gains (losses) for the years ended December 31:


(in millions)	2013			2012			2011
Realized gains
Fixed maturities	$	33.5		$	27.2		$	30.5
Equity securities		59.1			0.4			26.6
Other investments		38.9			21.5			16.1
Short-term investments		0.1			0.5			1.0
Gain on sale of affiliate		0.0			4.8			0.0

Gross realized investment and other gains		131.6			54.4			74.2
Realized losses
Fixed maturities		(19.6	)		(9.1	)		(11.6	)
Equity securities		(1.4	)		(0.5	)		(0.7	)
Other investments		(30.8	)		(15.1	)		(10.5	)
Short-term investments		(0.7	)		(0.3	)		(1.0	)
Other-than-temporary impairment losses on fixed maturities		(6.0	)		(1.5	)		(0.1	)
Other-than-temporary impairment losses on equity securities		(1.8	)		(2.2	)		(1.1	)

Gross realized investment and other losses		(60.3)			(28.7)			(25.0)

Net realized investment and other gains		$71.3			$25.7			$49.2

Securities and Letters of Credit Pledged to Lloyd's as Company's Corporate Member's Capital

At December 31, our Corporate member’s capital supporting our Lloyd’s business consisted of the following:


(in millions)	2013		2012
Fixed maturities, at fair value	$	250.7	$	200.3
Short-term investments, at fair value		0.1		3.6
Letters of credit		0.0		124.9

Total securities and letters of credit pledged to Lloyd’s	$	250.8	$	328.8

Financial Assets Measured at Fair Value on Recurring Basis

Based on an analysis of the inputs, our financial assets measured at fair value on a recurring basis at December 31, 2013 and 2012 have been categorized as follows:


			Fair Value Measurements at Reporting Date Using
(in millions)	December 31, 2013		Level 1 ^(a)		Level 2 ^(b)		Level 3 ^(c)
Fixed maturities
USD denominated:
U.S. Governments	$	275.3	$	143.8	$	131.5	$	0.0
Non-U.S. Governments		60.2		0.0		60.2		0.0
Obligations of states and political subdivisions		577.8		0.0		577.8		0.0
Credit-Financial		439.9		0.0		439.9		0.0
Credit-Industrial		397.1		0.0		397.1		0.0
Credit-Utility		166.6		0.0		166.6		0.0
Structured securities:
CMO/MBS-agency		226.9		0.0		226.9		0.0
CMO/MBS-non agency		20.2		0.0		20.2		0.0
CMBS		164.8		0.0		164.8		0.0
ABS-residential		6.6		0.0		6.6		0.0
ABS-non residential		117.2		0.0		117.2		0.0
Foreign denominated:
Governments		206.7		0.0		206.7		0.0
Credit		155.1		0.0		155.1		0.0

Total fixed maturities		2,814.4		143.8		2,670.6		0.0
Equity securities		534.3		476.7		56.3		1.3
Other investments		117.8		0.0		117.8		0.0
Short-term investments		351.6		347.0		4.6		0.0
Other assets		2.6		0.0		0.0		2.6

	$	3,820.7	$	967.5	$	2,849.3	$	3.9

^(a)	Quoted prices in active markets for identical assets

^(b)	Significant other observable inputs

^(c)	Significant unobservable inputs


			Fair Value Measurements at Reporting Date Using
(in millions)	December 31, 2012		Level 1 ^(a)		Level 2 ^(b)		Level 3 ^(c)
Fixed maturities
USD denominated:
U.S. Governments	$	410.4	$	219.5	$	190.9	$	0.0
Non-U.S. Governments		56.6		0.0		56.6		0.0
Obligations of states and political subdivisions		596.1		0.0		596.1		0.0
Credit-Financial		407.4		0.0		407.4		0.0
Credit-Industrial		458.8		0.0		458.8		0.0
Credit-Utility		202.1		0.0		202.1		0.0
Structured securities:
CMO/MBS-agency		395.1		0.0		395.1		0.0
CMO/MBS-non agency		13.3		0.0		13.3		0.0
CMBS		115.0		0.0		115.0		0.0
ABS-residential		9.5		0.0		9.5		0.0
ABS-non residential		82.5		0.0		82.5		0.0
Foreign denominated:
Governments		267.0		0.0		267.0		0.0
Credit		140.2		0.0		140.2		0.0

Total fixed maturities		3,154.0		219.5		2,934.5		0.0
Equity securities		521.4		469.0		50.6		1.8
Other investments		132.0		0.0		132.0		0.0
Short-term investments		234.3		201.1		33.2		0.0
Other assets		6.9		0.0		0.0		6.9

	$	4,048.6	$	889.6	$	3,150.3	$	8.7

^(a)	Quoted prices in active markets for identical assets

^(b)	Significant other observable inputs

^(c)	Significant unobservable inputs

Schedule of Reconciliation of Beginning and Ending Balances for Investments Categorized as Level 3

A reconciliation of the beginning and ending balances for the investments categorized as Level 3 at December 31, 2013 and 2012 are as follows:


(in millions)	Equity Securities			Other Assets			Total
Beginning balance, January 1, 2013	$	1.8		$	6.9		$	8.7
Transfers into Level 3		0.0			0.0			0.0
Transfers out of Level 3		0.0			0.0			0.0
Total gains or losses (realized/unrealized):
Included in net income (loss)		0.1			0.0			0.1
Included in other comprehensive income (loss)		0.0			0.0			0.0
Purchases, issuances, sales, and settlements
Purchases		0.0			0.0			0.0
Issuances		0.0			0.0			0.0
Sales		(0.6	)		0.0			(0.6	)
Settlements		0.0			(4.3	)		(4.3	)

Ending balance, December 31, 2013	$	1.3		$	2.6		$	3.9

Amount of total gains or losses for the year included in net income (loss) attributable to the change in unrealized gains or losses relating to assets still held at December 31, 2013	$	0.0		$	0.0		$	0.0

Fair Value Measurements Using Unobservable Inputs (Level 3)


(in millions)	Credit Financial			Equity Securities			Other Assets			Total
Beginning balance, January 1, 2012	$	0.7		$	2.4		$	9.0		$	12.1
Transfers into Level 3		0.0			0.0			0.0			0.0
Transfers out of Level 3		0.0			0.0			0.0			0.0
Total gains or losses (realized/unrealized):
Included in net income (loss)		0.1			0.0			0.0			0.1
Included in other comprehensive income (loss)		0.0			0.0			0.0			0.0
Purchases, issuances, sales, and settlements
Purchases		0.0			0.0			0.0			0.0
Issuances		0.0			0.0			0.0			0.0
Sales		(0.8	)		(0.6	)		0.0			(1.4	)
Settlements		0.0			0.0			(2.1	)		(2.1	)

Ending balance, December 31, 2012	$	0.0		$	1.8		$	6.9		$	8.7

Amount of total gains or losses for the year included in net income (loss) attributable to the change in unrealized gains or losses relating to assets still held at December 31, 2012	$	0.0		$	0.0		$	0.0		$	0.0

- Definition

Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

+ References+ Details

- Definition

Tabular disclosure of investment income, including, but not limited to, interest and dividend income and amortization of discount (premium) derived from debt and equity securities. Excludes realized and unrealized gain (loss) on investments.

+ References+ Details