Investments (Tables)

3 Months Ended

Mar. 31, 2014

Amortized Cost or Cost and Fair Value of Available For Sale Securities

The amortized cost or cost and the fair value of AFS securities as of March 31, 2014 and December 31, 2013 are summarized as follows:

	Amortized Cost or Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in millions)
As of March 31, 2014
Equity securities:
Common stock	$	2,265.0	$	382.2	$	(9.4)	$	2,637.8
Preferred stock		-		-		-		-
Total equity securities		2,265.0		382.2		(9.4)		2,637.8
Debt securities:
U.S. Government obligations		807.0		22.3		(3.3)		826.0
Municipal bonds		5,583.5		81.5		(54.1)		5,610.9
Foreign government obligations		943.3		8.0		(2.9)		948.4
U.S. corporate bonds		2,366.5		39.0		(13.3)		2,392.2
Foreign corporate bonds		1,699.7		34.0		(1.5)		1,732.2
Mortgage and asset-backed securities:
RMBS		1,354.9		34.7		(36.9)		1,352.7
CMBS		971.2		15.1		(4.4)		981.9
Other asset-backed securities		956.6		2.9		(1.7)		957.8
Total debt securities		14,682.7		237.5		(118.1)		14,802.1
Short-term investments		926.7		-		-		926.7
Total	$	17,874.4	$	619.7	$	(127.5)	$	18,366.6
	Amortized Cost or Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in millions)
As of December 31, 2013
Equity securities:
Common stock	$	1,804.7	$	426.6	$	(1.9)	$	2,229.4
Preferred stock		-		-		-		-
Total equity securities		1,804.7		426.6		(1.9)		2,229.4
Debt securities:
U.S. Government obligations		982.1		3.0		(30.1)		955.0
Municipal bonds		5,650.5		51.7		(112.1)		5,590.1
Foreign government obligations		979.3		4.6		(8.5)		975.4
U.S. corporate bonds		2,307.2		29.4		(23.7)		2,312.9
Foreign corporate bonds		1,810.6		27.0		(5.9)		1,831.7
Mortgage and asset-backed securities:
RMBS		1,559.5		36.1		(47.8)		1,547.8
CMBS		881.6		12.8		(8.8)		885.6
Other asset-backed securities		705.0		1.7		(2.3)		704.4
Total debt securities		14,875.8		166.3		(239.2)		14,802.9
Short-term investments		1,317.9		-		-		1,317.9
Total	$	17,998.4	$	592.9	$	(241.1)	$	18,350.2

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

The amortized cost and estimated fair value of debt securities as of March 31, 2014 by contractual maturity are shown below. 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 or Cost		Fair Value
	(in millions)
Short-term investments due in one year or less	$	926.7	$	926.7
Mortgage and asset-backed securities(1)		3,282.7		3,292.4
Debt securities with maturity dates:
One year or less		568.4		573.0
Over one through five years		3,557.9		3,599.6
Over five through ten years		3,550.3		3,588.6
Over ten years		3,723.4		3,748.5
Total debt securities		14,682.7		14,802.1
Equity securities		2,265.0		2,637.8
Total	$	17,874.4	$	18,366.6

(1) Mortgage and asset-backed securities by their nature do not generally have single maturity dates.

Net Investment Income

Net investment income in the three months ended March 31, 2014 and 2013 was as follows:

	Three Months Ended March 31,
	2014		2013
	(in millions)
Interest income	$	95.3	$	83.5
Dividend income		13.6		15.1
Investment expenses		(7.0)		(5.0)
Equity results of Homesite(1)		-		21.4
Equity results of ORX		0.4		0.7
Equity results of Pillar Investments(2)		3.9		1.6
Investment in Ares(2)		0.1		-
Other investment results		4.3		1.5
Total	$	110.6	$	118.8

(1) Homesite was sold on December 31, 2013.

(2) See Note 3(g) for discussion of the Pillar Investments and the investment in Ares.

Amount of Gross Realized Capital Gains and Gross Realized Capital Losses of Available For Sale Securities

Realized capital gains and losses in the three months ended March 31, 2014 and 2013 arose primarily from the sales of equity securities. The amounts of gross realized capital gains and gross realized capital losses were as follows:

	Three Months Ended March 31,
	2014		2013
	(in millions)
Gross realized capital gains	$	107.7	$	61.7
Gross realized capital losses		(10.9)		(10.8)
Net realized capital gains	$	96.8	$	50.9

Gross Unrealized Losses and Related Fair Values for Debt Securities and Equity Securities Grouped by Duration of Time in Continuous Unrealized Loss Position

As of March 31, 2014 and December 31, 2013, gross unrealized losses and related fair values for equity securities and debt securities, grouped by duration of time in a continuous unrealized loss position, were as follows:

	Less Than 12 Months				12 Months or More				Total
	Fair Value		Gross Unrealized  Losses		Fair Value		Gross Unrealized  Losses		Fair Value		Gross Unrealized  Losses
	(in millions)
As of March 31, 2014
Equity securities:
Common stock	$	256.4	$	9.4	$	-	$	-	$	256.4	$	9.4
Preferred stock		-		-		-		-		-		-
Total equity securities		256.4		9.4		-		-		256.4		9.4
Debt securities:
U.S. Government obligations		145.3		2.9		4.9		0.4		150.2		3.3
Municipal bonds		1,286.4		35.9		253.2		18.2		1,539.6		54.1
Foreign government obligations		285.2		2.6		8.9		0.3		294.1		2.9
U.S. corporate bonds		560.5		11.3		36.6		2.0		597.1		13.3
Foreign corporate bonds		175.3		1.4		1.5		0.1		176.8		1.5
Mortgage and asset-backed securities:
RMBS		538.4		19.4		329.2		17.5		867.6		36.9
CMBS		207.8		4.1		26.4		0.3		234.2		4.4
Other asset-backed securities		453.9		1.7		7.5		-		461.4		1.7
Total debt securities		3,652.8		79.3		668.2		38.8		4,321.0		118.1
Total temporarily impaired securities	$	3,909.2	$	88.7	$	668.2	$	38.8	$	4,577.4	$	127.5

	Less Than 12 Months				12 Months or More				Total
	Fair Value		Gross Unrealized   Losses		Fair Value		Gross Unrealized   Losses		Fair Value		Gross Unrealized   Losses
	(in millions)
As of December 31, 2013
Equity securities:
Common stock	$	148.7	$	1.9	$	-	$	-	$	148.7	$	1.9
Preferred stock		-		-		-		-		-		-
Total equity securities		148.7		1.9		-		-		148.7		1.9
Debt securities:
U.S. Government obligations		698.9		29.6		4.8		0.5		703.7		30.1
Municipal bonds		2,426.2		105.2		117.8		6.9		2,544.0		112.1
Foreign government obligations		625.6		8.2		8.8		0.3		634.4		8.5
U.S. corporate bonds		920.0		21.1		34.2		2.6		954.2		23.7
Foreign corporate bonds		528.3		5.8		4.9		0.1		533.2		5.9
Mortgage and asset-backed securities:
RMBS		779.4		30.7		267.9		17.1		1,047.3		47.8
CMBS		375.2		8.5		16.9		0.3		392.1		8.8
Other asset-backed securities		461.0		2.3		-		-		461.0		2.3
Total debt securities		6,814.6		211.4		455.3		27.8		7,269.9		239.2
Total temporarily impaired securities	$	6,963.3	$	213.3	$	455.3	$	27.8	$	7,418.6	$	241.1