Securities in an Unrealized Loss Position

The following table summarizes all securities in an unrealized loss position at June 30, 2013 and December 31, 2012 by the length of time those securities have been continuously in an unrealized loss position:



	Less Than 12 Months				12 Months or Greater				Total
(In thousands)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
June 30, 2013
U.S. government and agency	$	109,891	$	2,131	$	—	$	—	$	109,891	$	2,131
State and municipal	528,045		14,077		67,266		3,185		595,311		17,262
Mortgage-backed securities	612,369		16,308		54,843		3,764		667,212		20,072
Corporate	1,166,097		13,102		67,142		9,911		1,233,239		23,013
Foreign	249,199		6,853		—		—		249,199		6,853
Fixed maturity securities	2,665,601		52,471		189,251		16,860		2,854,852		69,331
Common stocks	77,610		5,360		—		—		77,610		5,360
Preferred stocks	17,702		346		21,636		4,038		39,338		4,384
Equity securities	95,312		5,706		21,636		4,038		116,948		9,744
Total	$	2,760,913	$	58,177	$	210,887	$	20,898	$	2,971,800	$	79,075

December 31, 2012
U.S. government and agency	$	69,551	$	1,660	$	—	$	—	$	69,551	$	1,660
State and municipal	152,694		1,639		135,967		8,054		288,661		9,693
Mortgage-backed securities	484,731		3,629		58,292		4,571		543,023		8,200
Corporate	371,781		2,964		70,537		9,119		442,318		12,083
Foreign	95,623		996		11,210		28		106,833		1,024
Fixed maturity securities	1,174,380		10,888		276,006		21,772		1,450,386		32,660
Common stocks	46,725		707		—		—		46,725		707
Preferred stocks	—		—		39,812		1,651		39,812		1,651
Equity securities	46,725		707		39,812		1,651		86,537		2,358
Total	$	1,221,105	$	11,595	$	315,818	$	23,423	$	1,536,923	$	35,018

Fixed Maturity Securities – A summary of the Company’s non-investment grade fixed maturity securities that were in an unrealized loss position at June 30, 2013 is presented in the table below.



($ in thousands)	Number of Securities	Aggregate Fair Value		Gross Unrealized Loss
Mortgage-backed securities	18	$	106,405	$	5,246
Corporate	9	26,685		4,067
State and municipal	2	18,361		47
Foreign	2	19,337		240
Total	31	$	170,788	$	9,600

For OTTI of fixed maturity securities that management does not intend to sell or, more likely than not, would not be required to sell, the portion of the decline in value considered to be due to credit factors is recognized in earnings and the portion of the decline in value considered to be due to non-credit factors is recognized in other comprehensive income. For the six months ended June 30, 2013 and 2012, there were no changes in the portion of impairments recognized in earnings for those securities that have been impaired due to both credit factors and non-credit factors.

The Company has evaluated its fixed maturity securities in an unrealized loss position and believes the unrealized losses are due primarily to temporary market and sector-related factors rather than to issuer-specific factors. None of these securities are delinquent or in default under financial covenants. Based on its assessment of these issuers, the Company expects them to continue to meet their contractual payment obligations as they become due and does not consider any of these securities to be OTTI.

Preferred Stocks – At June 30, 2013, there were three preferred stocks in an unrealized loss position, with an aggregate fair value of $39 million and a gross unrealized loss of $4 million. Based upon management’s view of the underlying value of these securities, the Company does not consider these preferred stocks to be OTTI.

Common Stocks – At June 30, 2013, the Company owned six common stocks in an unrealized loss position with an aggregate fair value of $78 million and an aggregate unrealized loss of $5 million. The Company does not consider these common stocks to be OTTI.