BUSINESS SEGMENTS (Tables)

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Schedule of operating information by segment

Operating information by segment is as follows (dollars in millions):

	Three months ended				Nine months ended
	September 30,				September 30,
	2020		2019		2020		2019
Revenues:
Annuity:
Insurance policy income	$	4.3	$	5.1	$	14.4	$	15.9
Net investment income	115.6		116.5		349.6		347.1
Total annuity revenues	119.9		121.6		364.0		363.0
Health:
Insurance policy income	421.4		425.3		1,276.9		1,275.9
Net investment income	70.9		70.1		211.4		209.4
Total health revenues	492.3		495.4		1,488.3		1,485.3
Life:
Insurance policy income	202.6		189.6		591.0		565.8
Net investment income	35.2		34.6		104.2		103.9
Total life revenues	237.8		224.2		695.2		669.7
Investment income (loss) not allocated to product lines:
Related to fixed index products	46.0		3.7		(39.8)		70.3
Other investment income	66.0		61.0		175.5		210.2
Fee revenue and other income:
Fee income	19.9		16.5		69.4		58.1
Amounts netted in expenses not allocated to product lines	1.7		1.6		5.2		6.0
Total segment revenues	$	983.6	$	924.0	$	2,757.8	$	2,862.6

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	Three months ended				Nine months ended
	September 30,				September 30,
	2020		2019		2020		2019
Expenses:
Annuity:
Insurance policy benefits	$	20.1	$	7.3	$	(82.1)	$	20.3
Interest credited	42.4		42.0		128.0		126.8
Amortization and non-deferred commissions	12.1		16.1		89.5		46.3
Total annuity expenses	74.6		65.4		135.4		193.4
Health:
Insurance policy benefits	295.5		360.4		1,008.3		1,069.2
Amortization and non-deferred commissions	44.6		45.7		145.4		146.2
Total health expenses	340.1		406.1		1,153.7		1,215.4
Life:
Insurance policy benefits	143.3		121.4		423.0		378.4
Interest credited	11.4		10.7		32.6		31.5
Amortization, non-deferred commissions and advertising expense	35.8		37.5		111.9		110.4
Total life expenses	190.5		169.6		567.5		520.3
Allocated expenses	130.3		131.3		395.0		402.4
Expenses not allocated to product lines	15.4		19.8		71.2		62.2
Amounts netted in investment income not allocated to product lines:
Market value changes credited to policyholders	46.0		3.8		(39.8)		70.3
Interest expense	17.0		25.3		59.1		74.7
Other expenses	5.3		1.3		7.1		9.6
Expenses netted in fee revenue:
Distribution and commission expenses	19.1		13.5		55.6		46.3
Total segment expenses	838.3		836.1		2,404.8		2,594.6
Pre-tax measure of profitability:
Annuity margin	45.3		56.2		228.6		169.6
Health margin	152.2		89.3		334.6		269.9
Life margin	47.3		54.6		127.7		149.4
Total insurance product margin	244.8		200.1		690.9		588.9
Allocated expenses	(130.3)		(131.3)		(395.0)		(402.4)
Income from insurance products	114.5		68.8		295.9		186.5
Fee income	.8		3.0		13.8		11.8
Investment income not allocated to product lines	43.7		34.3		109.3		125.9
Expenses not allocated to product lines	(13.7)		(18.2)		(66.0)		(56.2)
Operating earnings before taxes	145.3		87.9		353.0		268.0
Income tax expense on operating income	32.7		18.7		76.7		56.6
Net operating income	$	112.6	$	69.2	$	276.3	$	211.4

Reconciliation of segment revenues and expenses to consolidated revenues and expenses and net income

A reconciliation of segment revenues and expenses to consolidated revenues and expenses and net income is as follows (dollars in millions):

	Three months ended				Nine months ended
	September 30,				September 30,
	2020		2019		2020		2019
Total segment revenues	$	983.6	$	924.0	$	2,757.8	$	2,862.6
Net realized investment gains (losses)	16.3		2.3		(55.4)		23.7
Revenues related to VIEs	8.8		12.7		28.2		45.5
Fee revenue related to transition services agreement	4.8		5.0		14.3		15.0
Consolidated revenues	1,013.5		944.0		2,744.9		2,946.8
Total segment expenses	838.3		836.1		2,404.8		2,594.6
Insurance policy benefits - fair value changes in embedded derivative liabilities	2.0		37.2		121.8		120.2
Amortization related to fair value changes in embedded derivative liabilities	(.4)		(7.9)		(26.4)		(25.4)
Amortization related to net realized investment gains (losses)	.1		.2		(3.0)		.6
Expenses related to VIEs	7.0		12.4		27.4		43.8
Fair value changes related to agent deferred compensation plan	—		6.0		13.2		22.9
Loss on extinguishment of debt	—		—		—		7.3
Expenses related to transition services agreement	.1		6.5		6.3		16.0
Consolidated expenses	847.1		890.5		2,544.1		2,780.0
Income before tax	166.4		53.5		200.8		166.8
Income tax expense (benefit):
Tax expense on period income	37.2		11.5		44.8		35.4
Valuation allowance for deferred tax assets and other tax items	—		—		(34.0)		—
Net income	$	129.2	$	42.0	$	190.0	$	131.4