Investments (Tables)

12 Months Ended

Dec. 31, 2011

Available-for-Sale Securities

Available-for-sale securities as of December 31, 2011 and 2010 are summarized as follows (in millions):

	Amortized Cost or Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
2011
Consolidated
Equity securities:
Common stock(1)	$	775.8	$	121.4	$	(26.2	)	$	871.0
Preferred stock		—		—		—			—
Debt securities:
U.S. Government obligations		260.6		7.2		—			267.8
Mortgage and asset-backed securities(2)		816.5		47.3		(3.3	)		860.5
States, municipalities and political subdivision bonds		1,038.2		75.7		(0.3	)		1,113.6
Foreign bonds		81.8		2.2		(0.5	)		83.5
Corporate bonds and other		341.8		14.4		(2.1	)		354.1
		2,538.9		146.8		(6.2	)		2,679.5
Short-term investments		1,096.5		—		—			1,096.5
	$	4,411.2	$	268.2	$	(32.4	)	$	4,647.0
Industry Segment
AIHL insurance group	$	3,918.8	$	228.7	$	(32.4	)	$	4,115.1
Corporate activities		492.4		39.5		—			531.9
	$	4,411.2	$	268.2	$	(32.4	)	$	4,647.0
	Amortized Cost or Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
2010
Consolidated
Equity securities:
Common stock(1)	$	1,310.0	$	196.3	$	(5.6	)	$	1,500.7
Preferred stock		—		—		—			—
Debt securities:
U.S. Government obligations		334.4		4.6		(1.2	)		337.8
Mortgage and asset-backed securities(2)		841.0		31.8		(6.3	)		866.5
States, municipalities and political subdivision bonds		1,058.1		25.4		(15.0	)		1,068.5
Foreign bonds		112.7		2.4		(0.9	)		114.2
Corporate bonds and other		431.9		14.9		(1.4	)		445.4
		2,778.1		79.1		(24.8	)		2,832.4
Short-term investments		264.8		—		—			264.8
	$	4,352.9	$	275.4	$	(30.4	)	$	4,597.9
Industry Segment
AIHL insurance group	$	3,760.3	$	232.7	$	(30.4	)	$	3,962.6
Corporate activities		592.6		42.7		—			635.3
	$	4,352.9	$	275.4	$	(30.4	)	$	4,597.9

(1) Of the $871.0 million of fair value as of December 31, 2011, $573.3 million related to certain energy sector businesses. Of the $1,500.7 million of fair value as of December 31, 2010, $1,004.8 million related to certain energy sector businesses.

(2) Of the $860.5 million of fair value as of December 31, 2011, $497.3 million related to residential mortgage-backed securities, or “RMBS,” $144.7 million related to commercial mortgage-backed securities, or “CMBS” and $218.5 million related to other asset-backed securities. Of the $866.5 million of fair value as of December 31, 2010, $499.9 million related to RMBS, $173.4 million related to CMBS and $193.2 million related to other asset-backed securities.

Amortized Cost and Estimated Fair Value of Debt Securities by Contractual Maturity

The amortized cost and estimated fair value of debt securities as of December 31, 2011 by contractual maturity are shown below (in millions). Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized Cost		Fair Value
Short-term investments due in one year or less	$	1,096.5	$	1,096.5
Mortgage and asset-backed securities		816.5		860.5
Debt securities
One year or less		91.9		93.2
Over one through five years		591.9		612.9
Over five through ten years		624.2		674.9
Over ten years		414.4		438.0
Equity securities		775.8		871.0
	$	4,411.2	$	4,647.0

Amount of Gross Realized Capital Gains and Gross Realized Capital Losses of Available-for-Sale Securities (Primarily, Equity Securities)

The amount of gross realized capital gains and gross realized capital losses of available-for-sale securities (primarily equity securities) for 2011, 2010 and 2009 were (in millions):

	2011			2010			2009
Gross realized gains	$	161.1		$	105.0		$	338.5
Gross realized losses		(34.0	)		(7.6	)		(5.8	)
Net realized gains	$	127.1		$	97.4		$	332.7

Gross Unrealized Investment Losses and Related Fair Value for Debt Securities and Equity Securities

Such gross unrealized investment losses and related fair value for debt securities and equity securities as of December 31, 2011, as well as for December 31, 2010, were as follows (in millions):

	2011				2010
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Debt securities:
U.S. Government obligations
Less than 12 months	$	—	$	—	$	49.7	$	1.2
More than 12 months		—		—		—		—
Mortgage and asset-backed securities
Less than 12 months		33.4		0.5		170.8		2.8
More than 12 months		27.7		2.8		39.5		3.5
States, municipalities and political subdivision bonds
Less than 12 months		—		—		349.1		14.4
More than 12 months		6.8		0.3		7.7		0.6
Foreign bonds
Less than 12 months		7.6		0.3		45.2		0.9
More than 12 months		6.1		0.2		—		—
Corporate bonds and other
Less than 12 months		47.4		1.8		63.1		1.4
More than 12 months		5.1		0.3		—		—
Total debt securities
Less than 12 months		88.4		2.6		677.9		20.7
More than 12 months		45.7		3.6		47.2		4.1
Equity securities — Common Stock
Less than 12 months		275.5		26.2		139.5		5.6
More than 12 months		—		—		—		—
Equity securities — Preferred Stock
Less than 12 months		—		—		—		—
More than 12 months		—		—		—		—
Total temporarily impaired securities
Less than 12 months		363.9		28.8		817.4		26.3
More than 12 months		45.7		3.6		47.2		4.1
Total	$	409.6	$	32.4	$	864.6	$	30.4

Net Investment Income

Net investment income was as follows (in millions):

	2011			2010			2009
Interest income	$	100.0		$	108.6		$	113.7
Dividend income		37.8			23.2			15.2
Investment expenses		(6.8	)		(5.5	)		(7.2	)
Equity in losses of Homesite		(20.2	)		(3.2	)		(1.1	)
Equity in losses of ORX		(1.6	)		(2.0	)		(21.9	)
Other investment (loss) income		(0.3	)		3.9			3.2
	$	108.9		$	125.0		$	101.9