(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
☑ | Accelerated filer | ☐ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company |
Page | ||||||||
Item 1. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
/s/ KPMG LLP | |||||
KPMG LLP | |||||
Chicago, Illinois | |||||
May 7, 2021 |
Horace Mann Educators Corporation | 1 | Quarterly Report on Form 10-Q |
March 31, 2021 | December 31, 2020 | |||||||||||||
(Unaudited) | ||||||||||||||
ASSETS | ||||||||||||||
Investments | ||||||||||||||
Fixed maturity securities, available for sale, at fair value (amortized cost, net 2021, $ | $ | $ | ||||||||||||
Equity securities at fair value | ||||||||||||||
Limited partnership interests | ||||||||||||||
Short-term and other investments | ||||||||||||||
Total investments | ||||||||||||||
Cash | ||||||||||||||
Deferred policy acquisition costs | ||||||||||||||
Deposit asset on reinsurance | ||||||||||||||
Intangible assets | ||||||||||||||
Goodwill | ||||||||||||||
Other assets | ||||||||||||||
Separate Account (variable annuity) assets | ||||||||||||||
Total assets | $ | $ | ||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||
Policy liabilities | ||||||||||||||
Investment contract and policy reserves | $ | $ | ||||||||||||
Unpaid claims and claim expenses | ||||||||||||||
Unearned premiums | ||||||||||||||
Total policy liabilities | ||||||||||||||
Other policyholder funds | ||||||||||||||
Other liabilities | ||||||||||||||
Short-term debt | ||||||||||||||
Long-term debt | ||||||||||||||
Separate Account (variable annuity) liabilities | ||||||||||||||
Total liabilities | ||||||||||||||
Preferred stock, $ | ||||||||||||||
Common stock, $ issued, 2021, | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Retained earnings | ||||||||||||||
Accumulated other comprehensive income (loss), net of tax: | ||||||||||||||
Net unrealized investment gains on fixed maturity securities | ||||||||||||||
Net funded status of benefit plans | ( | ( | ||||||||||||
Treasury stock, at cost, 2021, 2020, | ( | ( | ||||||||||||
Total shareholders’ equity | ||||||||||||||
Total liabilities and shareholders’ equity | $ | $ |
Horace Mann Educators Corporation | 2 | Quarterly Report on Form 10-Q |
Three Months Ended March 31, | ||||||||||||||
2021 | 2020 | |||||||||||||
Statements of Operations | ||||||||||||||
Revenues | ||||||||||||||
Premiums and contract charges earned | $ | $ | ||||||||||||
Net investment income | ||||||||||||||
Net investment losses | ( | ( | ||||||||||||
Other income | ||||||||||||||
Total revenues | ||||||||||||||
Benefits, losses and expenses | ||||||||||||||
Benefits, claims and settlement expenses | ||||||||||||||
Interest credited | ||||||||||||||
Operating expenses | ||||||||||||||
DAC unlocking and amortization expense | ||||||||||||||
Intangible asset amortization expense | ||||||||||||||
Interest expense | ||||||||||||||
Total benefits, losses and expenses | ||||||||||||||
Income before income taxes | ||||||||||||||
Income tax expense | ||||||||||||||
Net income | $ | $ | ||||||||||||
Net income per share | ||||||||||||||
Basic | $ | $ | ||||||||||||
Diluted | $ | $ | ||||||||||||
Weighted average number of shares and equivalent shares | ||||||||||||||
Basic | ||||||||||||||
Diluted | ||||||||||||||
Statements of Comprehensive Income (Loss) | ||||||||||||||
Net income | $ | $ | ||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||
Change in net unrealized investment gains (losses) on fixed maturity securities | ( | ( | ||||||||||||
Change in net funded status of benefit plans | ||||||||||||||
Other comprehensive income (loss) | ( | ( | ||||||||||||
Comprehensive income (loss) | $ | ( | $ | ( |
Horace Mann Educators Corporation | 3 | Quarterly Report on Form 10-Q |
Three Months Ended March 31, | ||||||||||||||
2021 | 2020 | |||||||||||||
Common stock, $ | ||||||||||||||
Beginning balance | $ | $ | ||||||||||||
Options exercised | — | — | ||||||||||||
Conversion of common stock units | — | — | ||||||||||||
Conversion of restricted stock units | — | — | ||||||||||||
Ending balance | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Beginning balance | ||||||||||||||
Options exercised and conversion of common stock units and restricted stock units | ( | ( | ||||||||||||
Share-based compensation expense | ||||||||||||||
Ending balance | ||||||||||||||
Retained earnings | ||||||||||||||
Beginning balance | ||||||||||||||
Net income | ||||||||||||||
Dividends, 2021, $ | ( | ( | ||||||||||||
Cumulative effect of change in accounting principle | — | ( | ||||||||||||
Ending balance | ||||||||||||||
Accumulated other comprehensive income (loss), net of tax: | ||||||||||||||
Beginning balance | ||||||||||||||
Change in net unrealized investment gains (losses) on fixed maturity securities | ( | ( | ||||||||||||
Change in net funded status of benefit plans | — | — | ||||||||||||
Ending balance | ||||||||||||||
Treasury stock, at cost | ||||||||||||||
Beginning balance | ( | ( | ||||||||||||
Acquisition of shares | ( | ( | ||||||||||||
Ending balance | ( | ( | ||||||||||||
Shareholders' equity at end of period | $ | $ |
Horace Mann Educators Corporation | 4 | Quarterly Report on Form 10-Q |
Three Months Ended March 31, | ||||||||||||||
2021 | 2020 | |||||||||||||
Cash flows - operating activities | ||||||||||||||
Net income | $ | $ | ||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities | ||||||||||||||
Net investment losses | ||||||||||||||
Amortization of premiums and accretion of discounts on fixed maturity securities, net | ||||||||||||||
Depreciation and intangible asset amortization | ||||||||||||||
Share-based compensation expense | ||||||||||||||
Changes in: | ||||||||||||||
Accrued investment income | ( | ( | ||||||||||||
Insurance liabilities | ||||||||||||||
Premium receivables | ||||||||||||||
Deferred policy acquisitions | ( | |||||||||||||
Reinsurance recoverables | ( | |||||||||||||
Income tax liabilities | ||||||||||||||
Other operating assets and liabilities | ( | |||||||||||||
Other | ( | |||||||||||||
Net cash provided by operating activities | ||||||||||||||
Cash flows - investing activities | ||||||||||||||
Fixed maturity securities | ||||||||||||||
Purchases | ( | ( | ||||||||||||
Sales | ||||||||||||||
Maturities, paydowns, calls and redemptions | ||||||||||||||
Equity securities | ||||||||||||||
Purchases | ( | ( | ||||||||||||
Sales and repayments | ||||||||||||||
Limited partnership interests | ||||||||||||||
Purchases | ( | ( | ||||||||||||
Sales | ||||||||||||||
Change in short-term and other investments, net | ||||||||||||||
Net cash used in investing activities | ( | ( | ||||||||||||
Cash flows - financing activities | ||||||||||||||
Dividends paid to shareholders | ( | ( | ||||||||||||
Acquisition of treasury stock | ( | ( | ||||||||||||
Proceeds from exercise of stock options | ||||||||||||||
Withholding tax payments on RSUs tendered | ( | ( | ||||||||||||
Annuity contracts: variable, fixed and FHLB funding agreements | ||||||||||||||
Deposits | ||||||||||||||
Benefits, withdrawals and net transfers to Separate Account (variable annuity) assets | ( | ( | ||||||||||||
Life policy accounts | ||||||||||||||
Deposits | ||||||||||||||
Withdrawals and surrenders | ( | ( | ||||||||||||
Change in deposit asset on reinsurance | ( | ( | ||||||||||||
Change in book overdrafts | ( | |||||||||||||
Net cash provided by financing activities | ||||||||||||||
Net increase in cash | ||||||||||||||
Cash at beginning of period | ||||||||||||||
Cash at end of period | $ | $ |
Horace Mann Educators Corporation | 5 | Quarterly Report on Form 10-Q |
Horace Mann Educators Corporation | 6 | Quarterly Report on Form 10-Q |
($ in millions) | Three Months Ended March 31, | |||||||||||||
2021 | 2020 | |||||||||||||
Fixed maturity securities | $ | $ | ||||||||||||
Equity securities | ||||||||||||||
Limited partnership interests | ( | |||||||||||||
Short-term and other investments | ||||||||||||||
Investment expenses | ( | ( | ||||||||||||
Net investment income - investment portfolio | ||||||||||||||
Investment income - deposit asset on reinsurance | ||||||||||||||
Total net investment income | $ | $ |
($ in millions) | Three Months Ended March 31, | |||||||||||||
2021 | 2020 | |||||||||||||
Fixed maturity securities | $ | ( | $ | |||||||||||
Equity securities | ( | ( | ||||||||||||
Short-term investments and other | ( | ( | ||||||||||||
Net investment losses | $ | ( | $ | ( |
Horace Mann Educators Corporation | 7 | Quarterly Report on Form 10-Q |
($ in millions) | Three Months Ended March 31, | |||||||||||||
2021 | 2020 | |||||||||||||
Credit loss impairments(1) | $ | ( | $ | |||||||||||
Intent-to-sell impairments | ( | ( | ||||||||||||
Total impairments on investments recognized in net income | ( | ( | ||||||||||||
Sales and other, net | ( | |||||||||||||
Change in fair value - equity securities | ( | ( | ||||||||||||
Change in fair value and gains (losses) realized on settlements - derivatives | ( | ( | ||||||||||||
Net investment losses | $ | ( | $ | ( |
($ in millions) | Amortized Cost, net | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||||
March 31, 2021 | ||||||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||||||
U.S. Government and federally sponsored agency obligations:(1) | ||||||||||||||||||||||||||
Mortgage-backed securities | $ | $ | $ | $ | ||||||||||||||||||||||
Other, including U.S. Treasury securities | ||||||||||||||||||||||||||
Municipal bonds | ||||||||||||||||||||||||||
Foreign government bonds | ||||||||||||||||||||||||||
Corporate bonds | ||||||||||||||||||||||||||
Other asset-backed securities | ||||||||||||||||||||||||||
Totals | $ | $ | $ | $ | ||||||||||||||||||||||
December 31, 2020 | ||||||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||||||
U.S. Government and federally sponsored agency obligations:(1) | ||||||||||||||||||||||||||
Mortgage-backed securities | $ | $ | $ | $ | ||||||||||||||||||||||
Other, including U.S. Treasury securities | ||||||||||||||||||||||||||
Municipal bonds | ||||||||||||||||||||||||||
Foreign government bonds | ||||||||||||||||||||||||||
Corporate bonds | ||||||||||||||||||||||||||
Other asset-backed securities | ||||||||||||||||||||||||||
Totals | $ | $ | $ | $ |
Horace Mann Educators Corporation | 8 | Quarterly Report on Form 10-Q |
($ in millions) | 12 Months or Less | More than 12 Months | Total | |||||||||||||||||||||||||||||||||||
Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | |||||||||||||||||||||||||||||||||
March 31, 2021 | ||||||||||||||||||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||||||||||||||||||
U.S. Government and federally sponsored agency obligations: | ||||||||||||||||||||||||||||||||||||||
Mortgage-backed securities | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||||||||
Municipal bonds | ||||||||||||||||||||||||||||||||||||||
Foreign government bonds | ||||||||||||||||||||||||||||||||||||||
Corporate bonds | ||||||||||||||||||||||||||||||||||||||
Other asset-backed securities | ||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Number of positions with a gross unrealized loss | ||||||||||||||||||||||||||||||||||||||
Fair value as a percentage of total fixed maturity securities at fair value | % | % | % | |||||||||||||||||||||||||||||||||||
December 31, 2020 | ||||||||||||||||||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||||||||||||||||||
U.S. Government and federally sponsored agency obligations: | ||||||||||||||||||||||||||||||||||||||
Mortgage-backed securities | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||||||||
Municipal bonds | ||||||||||||||||||||||||||||||||||||||
Foreign government bonds | ||||||||||||||||||||||||||||||||||||||
Corporate bonds | ||||||||||||||||||||||||||||||||||||||
Other asset-backed securities | ||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Number of positions with a gross unrealized loss | ||||||||||||||||||||||||||||||||||||||
Fair value as a percentage of total fixed maturity securities at fair value | % | % | % |
Horace Mann Educators Corporation | 9 | Quarterly Report on Form 10-Q |
($ in millions) | Percent of Total Fair Value | March 31, 2021 | ||||||||||||||||||||||||
March 31, 2021 | December 31, 2020 | Fair Value | Amortized Cost, net | |||||||||||||||||||||||
Estimated expected maturity: | ||||||||||||||||||||||||||
Due in 1 year or less | % | % | $ | $ | ||||||||||||||||||||||
Due after 1 year through 5 years | % | % | ||||||||||||||||||||||||
Due after 5 years through 10 years | % | % | ||||||||||||||||||||||||
Due after 10 years through 20 years | % | % | ||||||||||||||||||||||||
Due after 20 years | % | % | ||||||||||||||||||||||||
Total | % | % | $ | $ | ||||||||||||||||||||||
Average option-adjusted duration, in years |
($ in millions) | Three Months Ended March 31, | |||||||||||||
2021 | 2020 | |||||||||||||
Fixed maturity securities | ||||||||||||||
Proceeds received | $ | $ | ||||||||||||
Gross gains realized | ||||||||||||||
Gross losses realized | ( | ( | ||||||||||||
Equity securities | ||||||||||||||
Proceeds received | $ | $ | ||||||||||||
Gross gains realized | ||||||||||||||
Gross losses realized | ( |
($ in millions) | Three Months Ended March 31, | |||||||||||||
2021 | 2020 | |||||||||||||
Net unrealized investment gains (losses) on fixed maturity securities, net of tax | ||||||||||||||
Beginning of period | $ | $ | ||||||||||||
Change in net unrealized investment gains (losses) on fixed maturity securities | ( | ( | ||||||||||||
Reclassification of net investment (gains) losses on securities to net income | ( | |||||||||||||
End of period | $ | $ |
Horace Mann Educators Corporation | 10 | Quarterly Report on Form 10-Q |
($ in millions) | March 31, | December 31, | ||||||||||||
2021 | 2020 | |||||||||||||
Senior commercial mortgage loan funds | $ | $ | ||||||||||||
Hedge funds | ||||||||||||||
Infrastructure debt funds | ||||||||||||||
Infrastructure equity funds | ||||||||||||||
Other(1) | ||||||||||||||
Total | $ | $ |
($ in millions) | Gross Amounts Offset in the Consolidated Balance Sheets | Net Amounts of Assets/ Liabilities Presented in the Consolidated Balance Sheets | Gross Amounts Not Offset in the Consolidated Balance Sheets | |||||||||||||||||||||||||||||||||||
Gross Amounts | Financial Instruments | Cash Collateral Received | Net Amount | |||||||||||||||||||||||||||||||||||
March 31, 2021 | ||||||||||||||||||||||||||||||||||||||
Asset derivatives: | ||||||||||||||||||||||||||||||||||||||
Free-standing derivatives | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
December 31, 2020 | ||||||||||||||||||||||||||||||||||||||
Asset derivatives: | ||||||||||||||||||||||||||||||||||||||
Free-standing derivatives | $ | $ | $ | $ | $ | $ |
Horace Mann Educators Corporation | 11 | Quarterly Report on Form 10-Q |
Horace Mann Educators Corporation | 12 | Quarterly Report on Form 10-Q |
($ in millions) | Fair Value Measurements at | |||||||||||||||||||||||||||||||
Carrying | Fair | Reporting Date Using | ||||||||||||||||||||||||||||||
Amount | Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||
March 31, 2021 | ||||||||||||||||||||||||||||||||
Financial Assets | ||||||||||||||||||||||||||||||||
Investments | ||||||||||||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||||||||||||
U.S. Government and federally sponsored agency obligations: | ||||||||||||||||||||||||||||||||
Mortgage-backed securities | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Other, including U.S. Treasury securities | ||||||||||||||||||||||||||||||||
Municipal bonds | ||||||||||||||||||||||||||||||||
Foreign government bonds | ||||||||||||||||||||||||||||||||
Corporate bonds | ||||||||||||||||||||||||||||||||
Other asset-backed securities | ||||||||||||||||||||||||||||||||
Total fixed maturity securities | ||||||||||||||||||||||||||||||||
Equity securities | ||||||||||||||||||||||||||||||||
Short-term investments | ||||||||||||||||||||||||||||||||
Other investments | ||||||||||||||||||||||||||||||||
Totals | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Separate Account (variable annuity) assets(1) | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Financial Liabilities | ||||||||||||||||||||||||||||||||
Investment contract and policy reserves, embedded derivatives | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Other policyholder funds, embedded derivatives | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
December 31, 2020 | ||||||||||||||||||||||||||||||||
Financial Assets | ||||||||||||||||||||||||||||||||
Investments | ||||||||||||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||||||||||||
U.S. Government and federally sponsored agency obligations: | ||||||||||||||||||||||||||||||||
Mortgage-backed securities | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Other, including U.S. Treasury securities | ||||||||||||||||||||||||||||||||
Municipal bonds | ||||||||||||||||||||||||||||||||
Foreign government bonds | ||||||||||||||||||||||||||||||||
Corporate bonds | ||||||||||||||||||||||||||||||||
Other asset-backed securities | ||||||||||||||||||||||||||||||||
Total fixed maturity securities | ||||||||||||||||||||||||||||||||
Equity securities | ||||||||||||||||||||||||||||||||
Short-term investments | ||||||||||||||||||||||||||||||||
Other investments | ||||||||||||||||||||||||||||||||
Totals | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Separate Account (variable annuity) assets(1) | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Financial Liabilities | ||||||||||||||||||||||||||||||||
Investment contract and policy reserves, embedded derivatives | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Other policyholder funds, embedded derivatives | $ | $ | $ | $ | $ |
Horace Mann Educators Corporation | 13 | Quarterly Report on Form 10-Q |
($ in millions) | Financial Assets | Financial Liabilities(1) | ||||||||||||||||||||||||||||||||||||||||||
Municipal Bonds | Corporate Bonds | Mortgage-Backed and Other Asset- Backed Securities(2) | Total Fixed Maturity Securities | Equity Securities | Total | |||||||||||||||||||||||||||||||||||||||
Beginning balance, January 1, 2021 | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Transfers into Level 3(3) | ||||||||||||||||||||||||||||||||||||||||||||
Transfers out of Level 3(3) | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Total gains or losses | ||||||||||||||||||||||||||||||||||||||||||||
Net investment gains (losses) included in net income related to financial assets | — | |||||||||||||||||||||||||||||||||||||||||||
Net investment (gains) losses included in net income related to financial liabilities | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Net unrealized investment gains (losses) included in OCI | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||
Purchases | ||||||||||||||||||||||||||||||||||||||||||||
Issuances | ||||||||||||||||||||||||||||||||||||||||||||
Sales | ||||||||||||||||||||||||||||||||||||||||||||
Settlements | ||||||||||||||||||||||||||||||||||||||||||||
Paydowns, maturities and distributions | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||
Ending balance, March 31, 2021 | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Beginning balance, January 1, 2020 | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Transfers into Level 3(3) | ||||||||||||||||||||||||||||||||||||||||||||
Transfers out of Level 3(3) | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Total gains or losses | ||||||||||||||||||||||||||||||||||||||||||||
Net investment gains (losses) included in net income related to financial assets | — | |||||||||||||||||||||||||||||||||||||||||||
Net investment (gains) losses included in net income related to financial liabilities | — | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||
Net unrealized investment gains (losses) included in OCI | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||
Purchases | ||||||||||||||||||||||||||||||||||||||||||||
Issuances | ||||||||||||||||||||||||||||||||||||||||||||
Sales | ||||||||||||||||||||||||||||||||||||||||||||
Settlements | ||||||||||||||||||||||||||||||||||||||||||||
Paydowns, maturities and distributions | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||
Ending balance, March 31, 2020 | $ | $ | $ | $ | $ | $ | $ |
Horace Mann Educators Corporation | 14 | Quarterly Report on Form 10-Q |
($ in millions) | ||||||||||||||||||||||||||
Financial Assets | Fair Value at March 31, 2021 | Valuation Technique(s) | Unobservable Inputs | Range (Weighted Average) and Single Point Best Estimate(1) | ||||||||||||||||||||||
Municipal bonds | $ | discounted cash flow | I spread(2) | |||||||||||||||||||||||
Corporate bonds | discounted cash flow | N spread(3) | ||||||||||||||||||||||||
market comparable | option adjusted spread | |||||||||||||||||||||||||
Other asset-backed securities | vendor price | haircut | ||||||||||||||||||||||||
discounted cash flow | constant prepayment rate | |||||||||||||||||||||||||
discounted cash flow | T spread(4) | |||||||||||||||||||||||||
discounted cash flow | PDI interest margin(5) | |||||||||||||||||||||||||
discounted cash flow | SBL interest margin(6) | |||||||||||||||||||||||||
Government mortgage-backed securities | vendor price | haircut | ||||||||||||||||||||||||
Equity securities | Black Scholes | equity value | low - |
($ in millions) | ||||||||||||||||||||||||||
Financial Liabilities | Fair Value at March 31, 2021 | Valuation Technique(s) | Unobservable Inputs | Range (Weighted Average) and Single Point Best Estimate(1) | ||||||||||||||||||||||
Derivatives embedded in fixed indexed annuity products | $ | discounted cash flow | lapse rate | |||||||||||||||||||||||
mortality multiplier(7) | ||||||||||||||||||||||||||
option budget | ||||||||||||||||||||||||||
non-performance adjustment(8) |
Horace Mann Educators Corporation | 15 | Quarterly Report on Form 10-Q |
($ in millions) | Fair Value Measurements at | |||||||||||||||||||||||||||||||
Carrying | Fair | Reporting Date Using | ||||||||||||||||||||||||||||||
Amount | Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||
March 31, 2021 | ||||||||||||||||||||||||||||||||
Financial Assets | ||||||||||||||||||||||||||||||||
Other investments | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Deposit asset on reinsurance | ||||||||||||||||||||||||||||||||
Financial Liabilities | ||||||||||||||||||||||||||||||||
Investment contract and policy reserves, fixed annuity contracts | ||||||||||||||||||||||||||||||||
Investment contract and policy reserves, account values on life contracts | ||||||||||||||||||||||||||||||||
Other policyholder funds | ||||||||||||||||||||||||||||||||
Short-term debt | ||||||||||||||||||||||||||||||||
Long-term debt | ||||||||||||||||||||||||||||||||
December 31, 2020 | ||||||||||||||||||||||||||||||||
Financial Assets | ||||||||||||||||||||||||||||||||
Other investments | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Deposit asset on reinsurance | ||||||||||||||||||||||||||||||||
Financial Liabilities | ||||||||||||||||||||||||||||||||
Investment contract and policy reserves, fixed annuity contracts | ||||||||||||||||||||||||||||||||
Investment contract and policy reserves, account values on life contracts | ||||||||||||||||||||||||||||||||
Other policyholder funds | ||||||||||||||||||||||||||||||||
Short-term debt | ||||||||||||||||||||||||||||||||
Long-term debt |
Horace Mann Educators Corporation | 16 | Quarterly Report on Form 10-Q |
($ in millions) | March 31, 2021 | |||||||
Property and Casualty | $ | |||||||
Supplemental | ||||||||
Retirement | ||||||||
Life | ||||||||
Total | $ |
Horace Mann Educators Corporation | 17 | Quarterly Report on Form 10-Q |
($ in millions) | Weighted Average | |||||||||||||
Useful Life (in Years) | ||||||||||||||
At inception: | ||||||||||||||
Value of business acquired | $ | |||||||||||||
Value of distribution acquired | ||||||||||||||
Value of agency relationships | ||||||||||||||
Value of customer relationships | ||||||||||||||
Total | ||||||||||||||
Accumulated amortization and impairments: | ||||||||||||||
Value of business acquired | ( | |||||||||||||
Value of distribution acquired | ( | |||||||||||||
Value of agency relationships | ( | |||||||||||||
Value of customer relationships | ( | |||||||||||||
Total | ( | |||||||||||||
Net intangible assets subject to amortization: | $ |
($ in millions) | ||||||||
Year Ending December 31, | ||||||||
2021 (excluding the three months ended March 31, 2021) | $ | |||||||
2022 | ||||||||
2023 | ||||||||
2024 | ||||||||
2025 | ||||||||
Thereafter | ||||||||
Total | $ |
($ in millions) | ||||||||
Trade names | $ | |||||||
State licenses | ||||||||
Total | $ |
Horace Mann Educators Corporation | 18 | Quarterly Report on Form 10-Q |
($ in millions) | Three Months Ended March 31, | |||||||||||||
2021 | 2020 | |||||||||||||
Property and Casualty | ||||||||||||||
Beginning gross reserves(1) | $ | $ | ||||||||||||
Less: reinsurance recoverables | ||||||||||||||
Net reserves, beginning of period(2) | ||||||||||||||
Incurred claims and claim expenses: | ||||||||||||||
Claims occurring in the current period | ||||||||||||||
Decrease in estimated reserves for claims occurring in prior periods(3) | ( | |||||||||||||
Total claims and claim expenses incurred(4) | ||||||||||||||
Claims and claim expense payments for claims occurring during: | ||||||||||||||
Current period | ||||||||||||||
Prior periods | ||||||||||||||
Total claims and claim expense payments | ||||||||||||||
Net reserves, end of period(2) | ||||||||||||||
Plus: reinsurance recoverables | ||||||||||||||
Ending gross reserves(1) | $ | $ |
Horace Mann Educators Corporation | 19 | Quarterly Report on Form 10-Q |
($ in millions) | Gross Amount | Ceded to Other Companies(1) | Assumed from Other Companies | Net Amount | ||||||||||||||||||||||
Three months ended March 31, 2021 | ||||||||||||||||||||||||||
Premiums written and contract deposits(2) | $ | $ | $ | $ | ||||||||||||||||||||||
Premiums and contract charges earned | ||||||||||||||||||||||||||
Benefits, claims and settlement expenses | ||||||||||||||||||||||||||
Three months ended March 31, 2020 | ||||||||||||||||||||||||||
Premiums written and contract deposits(2) | $ | $ | $ | $ | ||||||||||||||||||||||
Premiums and contract charges earned | ||||||||||||||||||||||||||
Benefits, claims and settlement expenses |
Horace Mann Educators Corporation | 20 | Quarterly Report on Form 10-Q |
($ in millions) | Three Months Ended March 31, | |||||||||||||
2021 | 2020 | |||||||||||||
Insurance premiums and contract charges earned | ||||||||||||||
Property and Casualty | $ | $ | ||||||||||||
Supplemental | ||||||||||||||
Retirement | ||||||||||||||
Life | ||||||||||||||
Total | $ | $ | ||||||||||||
Net investment income | ||||||||||||||
Property and Casualty | $ | $ | ||||||||||||
Supplemental | ||||||||||||||
Retirement | ||||||||||||||
Life | ||||||||||||||
Corporate and Other | ( | |||||||||||||
Intersegment eliminations | ( | ( | ||||||||||||
Total | $ | $ | ||||||||||||
Net income (loss) | ||||||||||||||
Property and Casualty | $ | $ | ||||||||||||
Supplemental | ||||||||||||||
Retirement | ( | |||||||||||||
Life | ||||||||||||||
Corporate and Other | ( | ( | ||||||||||||
Total | $ | $ |
($ in millions) | March 31, 2021 | December 31, 2020 | ||||||||||||
Assets | ||||||||||||||
Property and Casualty | $ | $ | ||||||||||||
Supplemental | ||||||||||||||
Retirement | ||||||||||||||
Life | ||||||||||||||
Corporate and Other | ||||||||||||||
Intersegment eliminations | ( | ( | ||||||||||||
Total | $ | $ |
Horace Mann Educators Corporation | 21 | Quarterly Report on Form 10-Q |
($ in millions) | Net Unrealized Investment Gains (Losses) on Securities(1)(2) | Net Funded Status of Benefit Plans(1) | Total(1) | |||||||||||||||||
Beginning balance, January 1, 2021 | $ | $ | ( | $ | ||||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | ( | ||||||||||||||||||
Amounts reclassified from AOCI | ||||||||||||||||||||
Net current period other comprehensive income (loss) | ( | ( | ||||||||||||||||||
Ending balance, March 31, 2021 | $ | $ | ( | $ | ||||||||||||||||
Beginning balance, January 1, 2020 | $ | $ | ( | $ | ||||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | ( | ||||||||||||||||||
Amounts reclassified from AOCI | ||||||||||||||||||||
Net current period other comprehensive income (loss) | ( | ( | ||||||||||||||||||
Ending balance, March 31, 2020 | $ | $ | ( | $ |
($ in millions) | March 31, | December 31, | ||||||||||||
2021 | 2020 | |||||||||||||
Cash | $ | $ | ||||||||||||
Restricted cash | ||||||||||||||
Total cash and restricted cash reported in the Consolidated Balance Sheets | $ | $ |
($ in millions) | Three Months Ended March 31, | |||||||||||||
2021 | 2020 | |||||||||||||
Cash paid (recovered) during the three months for: | ||||||||||||||
Interest | $ | $ | ||||||||||||
Income taxes | ( | ( |
Horace Mann Educators Corporation | 22 | Quarterly Report on Form 10-Q |
Horace Mann Educators Corporation | 23 | Quarterly Report on Form 10-Q |
($ in millions) | Three Months Ended March 31, | 2021-2020 | ||||||||||||||||||
2021 | 2020 | Change % | ||||||||||||||||||
Total revenues | $ | 322.0 | $ | 307.3 | 4.8 | % | ||||||||||||||
Net income | 39.3 | 18.5 | 112.4 | % | ||||||||||||||||
Per diluted share: | ||||||||||||||||||||
Net income | 0.93 | 0.44 | 111.4 | % | ||||||||||||||||
Net investment losses, after tax | (0.17) | (0.34) | N.M. | |||||||||||||||||
Book value per share | $ | 40.83 | $ | 35.80 | 14.1 | % | ||||||||||||||
Net income return on equity - last twelve months | 9.3 | % | 11.3 | % | ||||||||||||||||
Net income return on equity - annualized | 9.0 | % | 4.9 | % |
Horace Mann Educators Corporation | 24 | Quarterly Report on Form 10-Q |
($ in millions) | Three Months Ended March 31, | 2021-2020 | ||||||||||||||||||
2021 | 2020 | Change % | ||||||||||||||||||
Premiums and contract charges earned | $ | 227.6 | $ | 236.3 | -3.7 | % | ||||||||||||||
Net investment income | 95.5 | 82.3 | 16.0 | % | ||||||||||||||||
Net investment losses | (9.0) | (18.5) | N.M. | |||||||||||||||||
Other income | 7.9 | 7.2 | 9.7 | % | ||||||||||||||||
Total revenues | 322.0 | 307.3 | 4.8 | % | ||||||||||||||||
Benefits, claims and settlement expenses | 134.3 | 138.7 | -3.2 | % | ||||||||||||||||
Interest credited | 50.6 | 51.5 | -1.7 | % | ||||||||||||||||
Operating expenses | 58.0 | 60.7 | -4.4 | % | ||||||||||||||||
DAC unlocking and amortization expense | 24.1 | 30.0 | -19.7 | % | ||||||||||||||||
Intangible asset amortization expense | 3.3 | 3.7 | -10.8 | % | ||||||||||||||||
Interest expense | 3.5 | 4.2 | -16.7 | % | ||||||||||||||||
Total benefits, losses and expenses | 273.8 | 288.8 | -5.2 | % | ||||||||||||||||
Income before income taxes | 48.2 | 18.5 | 160.5 | % | ||||||||||||||||
Income tax expense | 8.9 | — | N.M. | |||||||||||||||||
Net income | $ | 39.3 | $ | 18.5 | 112.4 | % |
Three Months Ended March 31, | ||||||||||||||
2021 | 2020 | |||||||||||||
Investment yield, excluding limited partnership interests, pretax - annualized* | 4.2% | 4.5% | ||||||||||||
Investment yield, excluding limited partnership interests, after tax - annualized* | 3.4% | 3.6% |
Horace Mann Educators Corporation | 25 | Quarterly Report on Form 10-Q |
($ in millions) | Three Months Ended March 31, | |||||||||||||
2021 | 2020 | |||||||||||||
Impairments on investments recognized in net income | $ | (3.2) | $ | (3.7) | ||||||||||
Sales and other, net | (2.1) | 4.5 | ||||||||||||
Change in fair value - equity securities | (2.8) | (14.5) | ||||||||||||
Change in fair value and losses realized on settlements - derivatives | (0.9) | (4.8) | ||||||||||||
Net investment losses | $ | (9.0) | $ | (18.5) |
Horace Mann Educators Corporation | 26 | Quarterly Report on Form 10-Q |
Horace Mann Educators Corporation | 27 | Quarterly Report on Form 10-Q |
Horace Mann Educators Corporation | 28 | Quarterly Report on Form 10-Q |
Horace Mann Educators Corporation | 29 | Quarterly Report on Form 10-Q |
($ in millions, unless otherwise indicated) | Three Months Ended March 31, | 2021-2020 | ||||||||||||||||||
2021 | 2020 | Change | ||||||||||||||||||
Financial Data: | ||||||||||||||||||||
Premiums written*: | ||||||||||||||||||||
Automobile | $ | 99.2 | $ | 109.4 | -9.3 | % | ||||||||||||||
Property and other | 42.6 | 44.2 | -3.6 | % | ||||||||||||||||
Total premiums written | 141.8 | 153.6 | -7.7 | % | ||||||||||||||||
Change in unearned premiums | 14.0 | 12.9 | 8.5 | % | ||||||||||||||||
Total premiums earned | 155.8 | 166.5 | -6.4 | % | ||||||||||||||||
Incurred claims and claims expenses: | ||||||||||||||||||||
Claims occurring in the current year | 94.7 | 105.4 | -10.2 | % | ||||||||||||||||
Prior years' reserve development | — | 1.0 | -100.0 | % | ||||||||||||||||
Total claims and claim expenses incurred | 94.7 | 104.4 | -9.3 | % | ||||||||||||||||
Operating expenses, including DAC amortization | 39.5 | 43.2 | -8.6 | % | ||||||||||||||||
Underwriting gain | 21.6 | 18.9 | 14.3 | % | ||||||||||||||||
Net investment income | 10.8 | 10.3 | 4.9 | % | ||||||||||||||||
Income before income taxes | 34.4 | 29.8 | 15.4 | % | ||||||||||||||||
Net income / core earnings* | 27.9 | 26.6 | 4.9 | % | ||||||||||||||||
Operating Statistics: | ||||||||||||||||||||
Automobile | ||||||||||||||||||||
Loss and loss adjustment expense ratio | 59.1 | % | 65.8 | % | -6.7 | pts | ||||||||||||||
Expense ratio | 25.1 | % | 25.9 | % | -0.8 | pts | ||||||||||||||
Combined ratio: | 84.2 | % | 91.7 | % | -7.5 | pts | ||||||||||||||
Prior years' reserve development | — | % | -0.9 | % | 0.9 | pts | ||||||||||||||
Catastrophe losses | 0.3 | % | 0.2 | % | 0.1 | pts | ||||||||||||||
Underlying combined ratio* | 83.9 | % | 92.4 | % | -8.5 | pts | ||||||||||||||
Property | ||||||||||||||||||||
Loss and loss adjustment expense ratio | 64.1 | % | 56.5 | % | 7.6 | pts | ||||||||||||||
Expense ratio | 26.0 | % | 26.2 | % | -0.2 | pts | ||||||||||||||
Combined ratio: | 90.1 | % | 82.7 | % | 7.4 | pts | ||||||||||||||
Prior years' reserve development | — | % | — | % | — | pts | ||||||||||||||
Catastrophe losses | 20.1 | % | 15.8 | % | 4.3 | pts | ||||||||||||||
Underlying combined ratio* | 70.0 | % | 66.9 | % | 3.1 | pts | ||||||||||||||
Risks in force (in thousands) | ||||||||||||||||||||
Automobile(1) | 393 | 424 | -7.3 | % | ||||||||||||||||
Property | 182 | 192 | -5.2 | % | ||||||||||||||||
Total | 575 | 616 | -6.7 | % |
Horace Mann Educators Corporation | 30 | Quarterly Report on Form 10-Q |
Horace Mann Educators Corporation | 31 | Quarterly Report on Form 10-Q |
($ in millions, unless otherwise indicated) | Three Months Ended March 31, | 2021-2020 | ||||||||||||||||||
2021 | 2020 | Change | ||||||||||||||||||
Financial Data: | ||||||||||||||||||||
Premiums written and contract deposits* | $ | 31.6 | $ | 32.6 | -3.1 | % | ||||||||||||||
Premiums and contract charges earned | 31.7 | 33.0 | -3.9 | % | ||||||||||||||||
Net investment income | 5.3 | 3.5 | 51.4 | % | ||||||||||||||||
Benefits and settlement expenses | 9.7 | 10.5 | -7.6 | % | ||||||||||||||||
Operating expenses (includes DAC unlocking and amortization expense) | 10.4 | 10.1 | 3.0 | % | ||||||||||||||||
Intangible asset amortization expense | 2.9 | 3.2 | -9.4 | % | ||||||||||||||||
Income before income taxes | 14.6 | 13.4 | 9.0 | % | ||||||||||||||||
Net income / core earnings* | 11.4 | 10.5 | 8.6 | % | ||||||||||||||||
Operating Statistics: | ||||||||||||||||||||
Supplemental insurance in force (thousands) | 284 | 297 | -4.4 | % | ||||||||||||||||
Benefits ratio(1) | 30.6 | % | 31.8 | % | -1.2 | pts | ||||||||||||||
Operating expense ratio(2) | 27.6 | % | 27.1 | % | 0.5 | pts | ||||||||||||||
Pretax profit margin(2) | 38.7 | % | 36.0 | % | 2.7 | pts | ||||||||||||||
Persistency | 91.5 | % | 89.2 | % | 2.3 | pts |
Horace Mann Educators Corporation | 32 | Quarterly Report on Form 10-Q |
Horace Mann Educators Corporation | 33 | Quarterly Report on Form 10-Q |
($ in millions, unless otherwise indicated) | Three Months Ended March 31, | 2021-2020 | ||||||||||||||||||
2021 | 2020 | Change | ||||||||||||||||||
Financial Data: | ||||||||||||||||||||
Contract charges earned | $ | 8.6 | $ | 7.4 | 16.2 | % | ||||||||||||||
Net investment income | 60.4 | 53.5 | 12.9 | % | ||||||||||||||||
Interest credited | 39.3 | 40.3 | -2.5 | % | ||||||||||||||||
Net interest margin without net investment gains (losses) | 22.2 | 14.1 | 57.4 | % | ||||||||||||||||
Net interest margin - reinsured block | (1.1) | (0.9) | -22.2 | % | ||||||||||||||||
Mortality loss and other reserve charges | 1.1 | 1.6 | -31.3 | % | ||||||||||||||||
Operating expenses | 16.0 | 16.2 | -1.2 | % | ||||||||||||||||
DAC and intangible asset amortization expense, excluding DAC unlocking | 5.5 | 5.2 | 5.8 | % | ||||||||||||||||
DAC unlocking | (0.8) | 4.0 | -120.0 | % | ||||||||||||||||
Income (loss) before income taxes | 12.6 | (1.1) | N.M. | |||||||||||||||||
Net income (loss) | 10.6 | (0.9) | N.M. | |||||||||||||||||
Core earnings | 10.6 | (0.9) | N.M. | |||||||||||||||||
Operating Statistics: | ||||||||||||||||||||
Annuity contract deposits, net* | ||||||||||||||||||||
Variable | $ | 61.6 | $ | 57.8 | 6.6 | % | ||||||||||||||
Fixed | 44.2 | 48.0 | -7.9 | % | ||||||||||||||||
Total | 105.8 | 105.8 | — | % | ||||||||||||||||
Single | 57.2 | 53.3 | 7.3 | % | ||||||||||||||||
Recurring | 48.6 | 52.5 | -7.4 | % | ||||||||||||||||
Total | 105.8 | 105.8 | — | % | ||||||||||||||||
Assets under administration (AUA) | ||||||||||||||||||||
Annuity assets under management(1) | 4,991.7 | 4,026.6 | 24.0 | % | ||||||||||||||||
Broker and advisory assets under administration | 2,388.1 | 2,093.9 | 14.1 | % | ||||||||||||||||
Recordkeeping assets under administration | 1,546.3 | 1,260.8 | 22.6 | % | ||||||||||||||||
Total | 8,926.1 | 7,381.3 | 20.9 | % | ||||||||||||||||
Persistency | ||||||||||||||||||||
Variable annuities | 95.1 | % | 94.5 | % | 0.6 | pts | ||||||||||||||
Fixed annuities | 95.0 | % | 94.0 | % | 1.0 | pts | ||||||||||||||
Total | 95.0 | % | 94.1 | % | 0.9 | pts | ||||||||||||||
Annuity contracts in force (thousands) | 230 | 229 | 0.4 | % | ||||||||||||||||
Fixed spread - YTD annualized (basis points) | 253 | 151 | 102 | bps |
Horace Mann Educators Corporation | 34 | Quarterly Report on Form 10-Q |
($ in millions) | March 31, 2021 | |||||||||||||||||||||||||||||||
Deferred Annuities at | ||||||||||||||||||||||||||||||||
Total Deferred Annuities | Minimum Guaranteed Rate | |||||||||||||||||||||||||||||||
Percent of Total | Accumulated Value (AV) | Percent of Total Deferred Annuities AV | Percent of Total | Accumulated Value | ||||||||||||||||||||||||||||
Minimum guaranteed interest rates: | ||||||||||||||||||||||||||||||||
Less than 2% | 54.8 | % | $ | 1,369.2 | 59.1 | % | 42.8 | % | $ | 809.7 | ||||||||||||||||||||||
Equal to 2% but less than 3% | 11.5 | % | 287.5 | 83.3 | % | 12.7 | % | 239.6 | ||||||||||||||||||||||||
Equal to 3% but less than 4% | 24.9 | % | 622.9 | 99.9 | % | 32.9 | % | 622.4 | ||||||||||||||||||||||||
Equal to 4% but less than 5% | 6.8 | % | 170.5 | 100.0 | % | 9.0 | % | 170.5 | ||||||||||||||||||||||||
5% or higher | 2.0 | % | 49.9 | 100.0 | % | 2.6 | % | 49.9 | ||||||||||||||||||||||||
Total | 100.0 | % | $ | 2,500.0 | 75.7 | % | 100.0 | % | $ | 1,892.1 |
Horace Mann Educators Corporation | 35 | Quarterly Report on Form 10-Q |
($ in millions, unless otherwise indicated) | Three Months Ended March 31, | 2021-2020 | ||||||||||||||||||
2021 | 2020 | Change | ||||||||||||||||||
Financial Data: | ||||||||||||||||||||
Premiums written and contract deposits* | $ | 25.2 | $ | 24.8 | 1.6 | % | ||||||||||||||
Premiums and contract charges earned | 31.5 | 29.4 | 7.1 | % | ||||||||||||||||
Net investment income | 19.6 | 15.6 | 25.6 | % | ||||||||||||||||
Benefits and settlement expenses | 28.8 | 22.2 | 29.7 | % | ||||||||||||||||
Interest credited | 11.2 | 11.2 | — | % | ||||||||||||||||
Operating expenses | 8.3 | 9.1 | -8.8 | % | ||||||||||||||||
DAC amortization expense, excluding unlocking | 1.8 | 1.9 | -5.3 | % | ||||||||||||||||
DAC unlocking | 0.2 | (0.1) | 300.0 | % | ||||||||||||||||
Income before income taxes | 0.9 | 0.7 | 28.6 | % | ||||||||||||||||
Net income / core earnings* | 0.7 | 0.6 | 16.7 | % | ||||||||||||||||
Operating Statistics: | ||||||||||||||||||||
Life insurance in force | $ | 19,936 | $ | 19,295 | 3.3 | % | ||||||||||||||
Number of policies in force (thousands) | 201 | 201 | — | % | ||||||||||||||||
Average face amount in force (in dollars) | $ | 99,368 | $ | 96,225 | 3.3 | % | ||||||||||||||
Lapse ratio (ordinary life insurance in force) | 3.9 | % | 4.7 | % | -0.8 | pts | ||||||||||||||
Mortality costs | $ | 14.6 | $ | 10.1 | 44.6 | % |
Horace Mann Educators Corporation | 36 | Quarterly Report on Form 10-Q |
($ in millions) | Three Months Ended March 31, | 2021-2020 | ||||||||||||||||||
2021 | 2020 | Change % | ||||||||||||||||||
Interest expense | $ | 3.4 | $ | 4.0 | -15.0 | % | ||||||||||||||
Net investment losses pretax | (9.0) | (18.5) | N.M. | |||||||||||||||||
Tax on net investment losses | (1.9) | (4.0) | N.M. | |||||||||||||||||
Net investment losses after tax | (7.1) | (14.5) | N.M. | |||||||||||||||||
Net loss | (11.3) | (18.3) | 38.3 | % | ||||||||||||||||
Core earnings (loss)* | (4.2) | (3.8) | -10.5 | % |
($ in millions) | Three Months Ended March 31, | 2021-2020 | ||||||||||||||||||
2021 | 2020 | Change % | ||||||||||||||||||
Net investment income - Investment portfolio | $ | 71.1 | $ | 58.6 | 21.3 | % | ||||||||||||||
Investment income - Deposit asset on reinsurance | 24.4 | 23.7 | 3.0 | % | ||||||||||||||||
Total net investment income | 95.5 | 82.3 | 16.0 | % | ||||||||||||||||
Pretax net investment gains (losses) | (9.0) | (18.5) | N.M. | |||||||||||||||||
Pretax net unrealized investment gains on fixed maturity securities | 363.6 | 189.7 | 91.7 | % |
Horace Mann Educators Corporation | 37 | Quarterly Report on Form 10-Q |
($ in millions) | March 31, 2021 | |||||||||||||||||||||||||
Number of Issuers | Fair Value | Amortized Cost, net | Pretax Net Unrealized Gain (Loss) | |||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||||||
Corporate bonds | ||||||||||||||||||||||||||
Banking & Finance | 145 | $ | 492.0 | $ | 460.9 | $ | 31.1 | |||||||||||||||||||
Insurance | 50 | 185.0 | 168.2 | 16.8 | ||||||||||||||||||||||
Energy(1) | 77 | 175.5 | 164.7 | 10.8 | ||||||||||||||||||||||
Healthcare, Pharmacy | 82 | 161.2 | 152.7 | 8.5 | ||||||||||||||||||||||
Real Estate | 43 | 125.4 | 119.5 | 5.9 | ||||||||||||||||||||||
Utilities | 68 | 115.9 | 109.5 | 6.4 | ||||||||||||||||||||||
Misc. | 29 | 110.3 | 109.9 | 0.4 | ||||||||||||||||||||||
Transportation | 47 | 101.4 | 95.5 | 5.9 | ||||||||||||||||||||||
Technology | 44 | 98.9 | 94.4 | 4.5 | ||||||||||||||||||||||
Food and Beverage | 35 | 79.1 | 70.6 | 8.5 | ||||||||||||||||||||||
All other corporates(2) | 356 | 549.5 | 517.6 | 31.9 | ||||||||||||||||||||||
Total corporate bonds | 976 | 2,194.2 | 2,063.5 | 130.7 | ||||||||||||||||||||||
Mortgage-backed securities | ||||||||||||||||||||||||||
U.S. Government and federally sponsored agencies | 266 | 475.1 | 441.2 | 33.9 | ||||||||||||||||||||||
Commercial(3) | 130 | 329.5 | 310.0 | 19.5 | ||||||||||||||||||||||
Other | 40 | 49.3 | 49.7 | (0.4) | ||||||||||||||||||||||
Municipal bonds(4) | 602 | 1,768.1 | 1,609.9 | 158.2 | ||||||||||||||||||||||
Government bonds | ||||||||||||||||||||||||||
U.S. | 40 | 458.3 | 444.3 | 14.0 | ||||||||||||||||||||||
Foreign | 7 | 44.5 | 40.2 | 4.3 | ||||||||||||||||||||||
Collateralized loan obligations(5) | 173 | 675.0 | 673.1 | 1.9 | ||||||||||||||||||||||
Asset-backed securities | 113 | 362.3 | 360.8 | 1.5 | ||||||||||||||||||||||
Total fixed maturity securities | 2,347 | $ | 6,356.3 | $ | 5,992.7 | $ | 363.6 | |||||||||||||||||||
Equity securities | ||||||||||||||||||||||||||
Non-redeemable preferred stocks | 25 | $ | 110.2 | |||||||||||||||||||||||
Common stocks | 93 | 8.6 | ||||||||||||||||||||||||
Closed-end fund | 1 | 21.2 | ||||||||||||||||||||||||
Total equity securities | 119 | $ | 140.0 | |||||||||||||||||||||||
Total | 2,466 | $ | 6,496.3 |
Horace Mann Educators Corporation | 38 | Quarterly Report on Form 10-Q |
($ in millions) | Percent of Portfolio | |||||||||||||||||||||||||
Fair Value | March 31, 2021 | |||||||||||||||||||||||||
December 31, 2020 | March 31, 2021 | Fair Value | Amortized Cost, net | |||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||||||
AAA | 11.6 | % | 11.4 | % | $ | 722.2 | $ | 705.7 | ||||||||||||||||||
AA(2) | 40.0 | 38.7 | 2,458.2 | 2,304.0 | ||||||||||||||||||||||
A | 18.7 | 17.8 | 1,133.6 | 1,049.0 | ||||||||||||||||||||||
BBB | 21.2 | 21.5 | 1,368.2 | 1,276.5 | ||||||||||||||||||||||
BB | 2.4 | 2.6 | 168.3 | 161.1 | ||||||||||||||||||||||
B | 1.1 | 1.2 | 75.2 | 73.7 | ||||||||||||||||||||||
CCC or lower | 0.1 | 0.1 | 4.8 | 4.7 | ||||||||||||||||||||||
Not rated(3) | 4.9 | 6.7 | 425.8 | 418.0 | ||||||||||||||||||||||
Total fixed maturity securities | 100.0 | % | 100.0 | % | $ | 6,356.3 | $ | 5,992.7 | ||||||||||||||||||
Equity securities | ||||||||||||||||||||||||||
AAA | — | % | — | % | $ | — | ||||||||||||||||||||
AA | — | — | — | |||||||||||||||||||||||
A | 0.7 | 0.6 | 0.8 | |||||||||||||||||||||||
BBB | 62.2 | 59.8 | 83.7 | |||||||||||||||||||||||
BB | 10.9 | 9.2 | 12.9 | |||||||||||||||||||||||
B | — | — | — | |||||||||||||||||||||||
CCC or lower | — | — | — | |||||||||||||||||||||||
Not rated | 26.2 | 30.4 | 42.6 | |||||||||||||||||||||||
Total equity securities | 100.0 | % | 100.0 | % | $ | 140.0 | ||||||||||||||||||||
Total | $ | 6,496.3 |
Horace Mann Educators Corporation | 39 | Quarterly Report on Form 10-Q |
($ in millions) | Three Months Ended March 31, | 2021-2020 | ||||||||||||||||||
2021 | 2020 | Change % | ||||||||||||||||||
Net cash provided by operating activities | $ | 142.0 | $ | 87.4 | 62.5 | % | ||||||||||||||
Net cash used in investing activities | (239.5) | (140.0) | -71.1 | % | ||||||||||||||||
Net cash provided by financing activities | 114.6 | 68.3 | 67.8 | % | ||||||||||||||||
Net increase in cash | 17.1 | 15.7 | 8.9 | % | ||||||||||||||||
Cash at beginning of period | 22.3 | 25.5 | -12.5 | % | ||||||||||||||||
Cash at end of period | $ | 39.4 | $ | 41.2 | -4.4 | % |
Horace Mann Educators Corporation | 40 | Quarterly Report on Form 10-Q |
($ in millions) | Three Months Ended March 31, | |||||||||||||||||||||||||
2021 | 2020 | Change $ | Change % | |||||||||||||||||||||||
Balance at beginning of the period | $ | 590.5 | $ | 495.0 | ||||||||||||||||||||||
Advances received from FHLB funding agreements | 130.0 | 75.0 | $ | 55.0 | 73.3 | % | ||||||||||||||||||||
Principal repayment on FHLB funding agreements | — | — | ||||||||||||||||||||||||
Balance at end of the period | $ | 720.5 | $ | 570.0 |
Horace Mann Educators Corporation | 41 | Quarterly Report on Form 10-Q |
Property and Casualty | Supplemental | Retirement | Life | Corporate and Other | ||||||||||||||||||||||||||||
Activities for potential sources of funds | ||||||||||||||||||||||||||||||||
Receipt of insurance premiums, contractholder charges and fees | ☑ | ☑ | ☑ | ☑ | ||||||||||||||||||||||||||||
Recurring service fees, commissions and overrides | ☑ | ☑ | ☑ | ☑ | ☑ | |||||||||||||||||||||||||||
Contractholder fund deposits | ☑ | ☑ | ☑ | |||||||||||||||||||||||||||||
Reinsurance and indemnification program recoveries | ☑ | ☑ | ☑ | ☑ | ||||||||||||||||||||||||||||
Receipts of principal, interest and dividends on investments | ☑ | ☑ | ☑ | ☑ | ☑ | |||||||||||||||||||||||||||
Sales of investments | ☑ | ☑ | ☑ | ☑ | ☑ | |||||||||||||||||||||||||||
Funds from FHLB and line of credit agreements | ☑ | ☑ | ☑ | ☑ | ☑ | |||||||||||||||||||||||||||
Intercompany loans | ☑ | ☑ | ☑ | ☑ | ☑ | |||||||||||||||||||||||||||
Capital contributions from parent | ☑ | ☑ | ☑ | ☑ | ||||||||||||||||||||||||||||
Dividends or return of capital from subsidiaries | ☑ | |||||||||||||||||||||||||||||||
Tax refunds/settlements | ☑ | ☑ | ☑ | ☑ | ☑ | |||||||||||||||||||||||||||
Funds from periodic issuance of additional securities | ☑ | |||||||||||||||||||||||||||||||
Proceeds from debt issuances | ☑ | |||||||||||||||||||||||||||||||
Receipt of intercompany settlements related to employee benefit plans | ☑ | |||||||||||||||||||||||||||||||
Activities for potential uses of funds | ||||||||||||||||||||||||||||||||
Payment of claims and related expenses | ☑ | ☑ | ☑ | ☑ | ||||||||||||||||||||||||||||
Payment of contract benefits, surrenders and withdrawals | ☑ | ☑ | ☑ | |||||||||||||||||||||||||||||
Reinsurance cessions and indemnification program payments | ☑ | ☑ | ☑ | ☑ | ||||||||||||||||||||||||||||
Operating costs and expenses | ☑ | ☑ | ☑ | ☑ | ☑ | |||||||||||||||||||||||||||
Purchase of investments | ☑ | ☑ | ☑ | ☑ | ☑ | |||||||||||||||||||||||||||
Repayment of FHLB and line of credit agreements | ☑ | ☑ | ☑ | ☑ | ☑ | |||||||||||||||||||||||||||
Payment or repayment of intercompany loans | ☑ | ☑ | ☑ | ☑ | ☑ | |||||||||||||||||||||||||||
Capital contributions to subsidiaries | ☑ | |||||||||||||||||||||||||||||||
Dividends or return of capital to shareholders/parent company | ☑ | ☑ | ☑ | ☑ | ☑ | |||||||||||||||||||||||||||
Tax payments/settlements | ☑ | ☑ | ☑ | ☑ | ☑ | |||||||||||||||||||||||||||
Common share repurchases | ☑ | |||||||||||||||||||||||||||||||
Debt service expenses and repayment | ☑ | |||||||||||||||||||||||||||||||
Payments related to employee benefit plans | ☑ | |||||||||||||||||||||||||||||||
Payments for acquisitions | ☑ |
Horace Mann Educators Corporation | 42 | Quarterly Report on Form 10-Q |
Horace Mann Educators Corporation | 43 | Quarterly Report on Form 10-Q |
($ in millions) | Interest Rates | Final Maturity | March 31, 2021 | December 31, 2020 | ||||||||||||||||||||||
Short-term debt | ||||||||||||||||||||||||||
Bank Credit Facility | Variable | 2024 | $ | 135.0 | $ | 135.0 | ||||||||||||||||||||
Long-term debt(1) | ||||||||||||||||||||||||||
4.50% Senior Notes, Aggregate principal amount of $250.0 less unaccrued discount of $0.3 and $0.4 and unamortized debt issuance costs of $1.3 and $1.3 | 4.50% | 2025 | 248.4 | 248.3 | ||||||||||||||||||||||
Federal Home Loan Bank borrowing | 0.41% | 2022 | 54.0 | 54.0 | ||||||||||||||||||||||
Total | $ | 437.4 | $ | 437.3 |
Horace Mann Educators Corporation | 44 | Quarterly Report on Form 10-Q |
Insurance Financial | Affirmed/ | |||||||||||||||||||||||||||||||
Strength Ratings (Outlook) | Debt Ratings (Outlook) | Reviewed | ||||||||||||||||||||||||||||||
A.M. Best | 7/2/2020 | |||||||||||||||||||||||||||||||
HMEC (parent company) | N.A. | bbb | (stable) | |||||||||||||||||||||||||||||
HMEC's Life subsidiary | A | (stable) | N.A. | |||||||||||||||||||||||||||||
HMEC's Property and Casualty subsidiaries | A | (stable) | N.A. | |||||||||||||||||||||||||||||
HMEC's Supplemental subsidiaries | A- | (stable) | N.A. | |||||||||||||||||||||||||||||
Fitch | A | (stable) | BBB | (stable) | 9/22/2020 | |||||||||||||||||||||||||||
Moody's | A2 | (stable) | Baa2 | (stable) | 10/8/2020 | |||||||||||||||||||||||||||
S&P | A | (stable) | BBB | (stable) | 2/18/2021 |
Horace Mann Educators Corporation | 45 | Quarterly Report on Form 10-Q |
Horace Mann Educators Corporation | 46 | Quarterly Report on Form 10-Q |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased under the Program | Approximate Dollar Value of Shares that may yet be Purchased under the Program | ||||||||||||||||||||||
January 1 - 31 | — | — | — | $ | 20.6 | million | ||||||||||||||||||||
February 1 - 28 | 39,485 | $ | 38.44 | 39,485 | $ | 19.1 | million | |||||||||||||||||||
March 1 - 31 | — | — | — | $ | 19.1 | million | ||||||||||||||||||||
Total | 39,485 | $ | 38.44 | 39,485 | $ | 19.1 | million |
Exhibit | ||||||||
No. | Description | |||||||
(3) Articles of incorporation and bylaws: | ||||||||
3.1 | ||||||||
3.2 |
Horace Mann Educators Corporation | 47 | Quarterly Report on Form 10-Q |
(4) Instruments defining the rights of security holders, including indentures: | ||||||||
4.1 | ||||||||
4.1(a) | ||||||||
4.2 | ||||||||
4.3 | ||||||||
(10) Material contracts: | ||||||||
10.1 | ||||||||
10.1(a) | ||||||||
10.2* | ||||||||
10.2(a)* | ||||||||
10.2(b)* | ||||||||
10.2(c)* | ||||||||
10.2(d)* | ||||||||
10.2(e)* |
Horace Mann Educators Corporation | 48 | Quarterly Report on Form 10-Q |
10.3* | ||||||||
10.3(a)* | ||||||||
10.3(b)* | ||||||||
10.3(c)* | ||||||||
10.3(d)* | ||||||||
10.3(e)* | ||||||||
10.3(f)* | ||||||||
10.3(g)* | ||||||||
10.4* | ||||||||
10.5* | ||||||||
10.6* | ||||||||
10.7* | ||||||||
Horace Mann Educators Corporation | 49 | Quarterly Report on Form 10-Q |
10.8* | ||||||||
10.9* | ||||||||
10.10* | ||||||||
10.10(a)* | ||||||||
10.11* | ||||||||
10.11(a)* | ||||||||
10.11(b)* | ||||||||
10.12 | ||||||||
10.13 | ||||||||
10.14 | ||||||||
(31) Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002: | ||||||||
31.1 | ||||||||
31.2 | ||||||||
(32) Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002: | ||||||||
32.1 | ||||||||
32.2 | ||||||||
(99) Additional exhibits: | ||||||||
99.1 |
Horace Mann Educators Corporation | 50 | Quarterly Report on Form 10-Q |
(101) Interactive Data File: | ||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||||||
101.SCH | XBRL Taxonomy Extension Schema | |||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | |||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase | |||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase | |||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase |
Horace Mann Educators Corporation | 51 | Quarterly Report on Form 10-Q |
HORACE MANN EDUCATORS CORPORATION | |||||||||||
(Registrant) | |||||||||||
Date | May 7, 2021 | /s/ Marita Zuraitis | |||||||||
Marita Zuraitis | |||||||||||
President and Chief Executive Officer | |||||||||||
Date | May 7, 2021 | /s/ Bret A. Conklin | |||||||||
Bret A. Conklin | |||||||||||
Executive Vice President and | |||||||||||
Chief Financial Officer | |||||||||||
Date | May 7, 2021 | /s/ Kimberly A. Johnson | |||||||||
Kimberly A. Johnson | |||||||||||
Senior Vice President, Controller and | |||||||||||
Principal Accounting Officer |
Horace Mann Educators Corporation | 52 | Quarterly Report on Form 10-Q |
Named Executive Officer | Annualized Salary | |||||||
Marita Zuraitis President and Chief Executive Officer | $1,000,000 | |||||||
Bret A. Conklin Executive Vice President and Chief Financial Officer | $500,000 | |||||||
Matthew P. Sharpe Executive Vice President, Distribution & Business Strategy | $470,000 | |||||||
Wade A. Rugenstein Executive Vice President, Supplemental & Operations (1) | $470,000 | |||||||
Don M. Carley Executive Vice President and General Counsel | $390,000 |
Note: The effective date of entry shall be subject to Section 4.2(a) | ||||||||
NAME OR TITLE | EFFECTIVE DATE OF | |||||||
PARTICIPATION* | ||||||||
TIER I PARTICIPANTS | ||||||||
President and CEO | May 16, 2013 | |||||||
TIER II PARTICIPANTS | ||||||||
EVP and CFO | May 23, 2017 | |||||||
EVP, Distribution & Business Strategy | February 15, 2012 | |||||||
EVP, Supplemental & Operations (1) | August 15, 2019 | |||||||
EVP and General Counsel | December 3, 2019 | |||||||
TIER III PARTICIPANTS | ||||||||
*Subject to acceptance within 30 days of effective date of participation. |
NAME OR TITLE | EFFECTIVE DATE OF | |||||||
PARTICIPATION* | ||||||||
TIER I PARTICIPANTS | ||||||||
President and CEO | May 16, 2013 | |||||||
TIER II PARTICIPANTS | ||||||||
EVP and CFO | May 23, 2017 | |||||||
EVP, Distribution & Business Strategy | February 15, 2012 | |||||||
EVP, Supplemental & Operations (1) | August 15, 2019 | |||||||
EVP and General Counsel | December 3, 2019 | |||||||
TIER III PARTICIPANTS | ||||||||
*Subject to acceptance within 30 days of effective date of participation. |
Three Months Ended March 31, | ||||||||||||||
2021 | 2020 | |||||||||||||
Basic: | ||||||||||||||
Net income | $ | 39.3 | $ | 18.5 | ||||||||||
Weighted average number of common shares during the period | 41.9 | 41.8 | ||||||||||||
Net income per share – basic | $ | 0.94 | $ | 0.44 | ||||||||||
Diluted: | ||||||||||||||
Net income | $ | 39.3 | $ | 18.5 | ||||||||||
Weighted average number of common shares during the period | 41.9 | 41.8 | ||||||||||||
Weighted average number of common equivalent shares to reflect the dilutive effect of common stock equivalent securities: | ||||||||||||||
Stock options | 0.1 | 0.1 | ||||||||||||
Common stock units related to deferred compensation for employees | — | — | ||||||||||||
Restricted common stock units related to incentive compensation | 0.1 | 0.1 | ||||||||||||
Total common and common equivalent shares adjusted to calculate diluted earnings per share | 42.1 | 42.0 | ||||||||||||
Net income per share – diluted | $ | 0.93 | $ | 0.44 |
/s/ KPMG LLP | |||||
KPMG LLP | |||||
Chicago, Illinois |
/s/ Marita Zuraitis | ||||||||
Marita Zuraitis, Chief Executive Officer | ||||||||
Horace Mann Educators Corporation | ||||||||
Date: | May 7, 2021 |
/s/ Bret A. Conklin | ||||||||
Bret A. Conklin, Chief Financial Officer | ||||||||
Horace Mann Educators Corporation | ||||||||
Date: | May 7, 2021 |
/s/ Marita Zuraitis | ||||||||
Marita Zuraitis | ||||||||
Chief Executive Officer | ||||||||
Date: | May 7, 2021 |
/s/ Bret A. Conklin | ||||||||
Bret A. Conklin | ||||||||
Chief Financial Officer | ||||||||
Date: | May 7, 2021 |
/E<$@@ V_P#@O=^W1^SW^U?:_#[X+_LW>-(O&%SI.JW5YJ=[
MI,$C0K)(B10P1L5'G.V7)V9 PHR22!^@_P"TI_P2._81_:H\87/Q$^(_P@-G
MXAOGWW^M>'=1EL9;I^[RHA\J1SW=D+GN33?V;/\ @D5^PA^RSXQM?B+\.OA"
MU[XAL9 ^GZSXBU&6^DM''1XD<^4CCJ'"!QV(KU?K>#]O]8L^;MI:]K'S_P#9
M^9?5?J=X\G?6]KWV/BC_ (++_#/7?@U_P29_9W^%?BF PZKH%WI5EJD).?*N
M4T>82I[[7W#\*^NO Z)_PXZMDV#!_9BDR,= '_$-_]DMX[B'2EN)Q%?"4W MDED=Y5,P^7Y
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end
._CG:366WQEXNRHM;E;47,21A7C)$5N5D,AE4+@@*2,GN_V:/^"+
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MHA2.;?;L_P T,IC5C%Y@(*)A^#NJ.+P]-TU?:][)JU^QG++L9559\K7-RM
M^6HV]FQT.*\7_P"#;G_DPG7/^RGZA_Z0Z?7(:-_P0B_:+\<^ W^$_P"T?_P4
M4\1ZYX4TO3Y(?"OARVANI[.TN!&4MIY(IKD*4AR"(5QP-H=!D'ZO_P"";G["
MW_#O?X"7WP0_X6E_PEWVWQ/<:Q_:G]B?8-GFP6\7E>7Y\V<>1G=N&=V,#&3R
MSE0IX1THSYG>^S.ZE3Q5;,8UYT^5*+6Z?Y'-?\%J;[Q3I_\ P3)^*,WA%I5G
M:RL(KIH<[A:OJ-JEQT[&(N&_V2U<-_P;Y:5X%LO^"=&E:CX5AMAJ=YXFU-O$
MTD0'F&[6
=KY RF..]>W_ + ?_!,O]M;X
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MLO\ P6C^&?PU_P""=_[(/AW]E[]D_P /WOAKP_\ $[Q7
M]=V,[MNX9Z9'6@#XR_:BT31/$G_!.C]GSQGX@T2RO=7N-0\&VL^J7-HCW$D!
MMF+1-(1N*$DDJ3@DDGDUV7_!33X3>&-=U_X!_"+0+&+0M*UCXFBQN8M$C%KY
M<$ZJL_E^6 $9D9QD=VS7J7Q._8=A^(_[('A/]EU/BC-IU[X.@THZ5XIATA7Q
M*?%-B?&/B"2_M;I8;.)F1[BV=+I'7,;,=KQLW"_(#P?UGHK3ZY4?/=)
M\V__ #'^S:*]ERR:=/9W6WGH?E7^W/^PQ_P40^'7_!3Z?\ ;^_8[^&6G>+T
MN)+:[T])+VWQ:RKIR6$T%Q!+-$[JRJY#1DC#CY@PKN/V\O\ @GA^U[^U=X3^
M$W[;/P]LM,\/_'_PAH=A)XB\.1W,<$4EU#+]IC%M([O$LD,[28$DA5U8 O\
M( WZ.44+'55RNRO%6]5V8GE>'?.FW:;O:^S[K3<_+_Q=\0_^#@G]K&RL/@M!
M\$=*^$<7VN+^V_&^EW?V*0*I&6$INI7V9Y*VZLS=,[2PKLO^"NO_ 3]_:F^
M/G[*WPF^#?P-L=3^).N>$+YSXAUO6=>M;>ZO";8(US(]Y.@8O)N.U6;:"!T
MK]#J*%C)1G&4(I6\OSZC>6PG2G"I.4N;2[>R7;2WX'SQ\5O@9\4_$O\ P2YO
M_P!G31?"_G>,IO@U%H46C_;H%SJ TY(3#YK.(A^\!7?OV=]V.:\T_P""'/[)
MG[0/['O[,OB?X>_M&> /^$=UC4?'
:,AAD'T_XO_\ !/'Q;X@^(/PX\9?L_?M#0_#^T^%WAEM)\+:7<^"H
MM96W9PR27.9[A%\QH_+4DH6S'NW9/'U!15
DVFI03:IHR_"#3[8W]LLBM);^
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Fixed maturities, available for sale, amortized cost | $ 5,992.7 | $ 5,788.6 |
Preferred stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 75,000,000 | 75,000,000 |
Common stock, shares issued (in shares) | 66,408,710 | 66,316,797 |
Treasury stock (in shares) | 24,942,064 | 24,902,579 |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Statement of Stockholders' Equity [Abstract] | ||
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Cash dividends (in usd per share) | $ 0.31 | $ 0.30 |
Basis of Presentation and Significant Accounting Policies |
3 Months Ended |
---|---|
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Business Horace Mann Educators Corporation is a holding company for insurance subsidiaries that market and underwrite personal lines of property and casualty insurance products (primarily personal lines of automobile and property insurance), supplemental insurance products (primarily cancer, heart, hospital, supplemental disability and accident coverages), retirement products (primarily tax-qualified fixed and variable annuities) and life insurance products, primarily to K-12 teachers, administrators and other employees of public schools and their families (collectively, HMEC, the Company or Horace Mann). Basis of Presentation The accompanying Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) and with the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and disclosures normally included in annual financial statements prepared in conformity with GAAP, but are not required for interim reporting purposes, have been omitted. These Consolidated Financial Statements and Notes thereto should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in Part II - Item 8 of the Company's Annual Report on Form 10-K for the year ended December 31, 2020. The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the full year. The accompanying Consolidated Financial Statements and Notes thereto are unaudited. These financial statements reflect all adjustments (generally consisting only of normal recurring accruals) which are, in the opinion of management, necessary for the fair presentation of the consolidated financial position, results of operations and cash flows for the interim periods. The Company's significant accounting policies are summarized in Part II - Item 8, Note 1 of the Company's Annual Report on Form 10-K for the year ended December 31, 2020. Consolidation All intercompany transactions and balances between HMEC and its subsidiaries and affiliates have been eliminated. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. The most significant critical accounting estimates include valuation of hard-to-value fixed maturity securities (including evaluation of impairments), evaluation of goodwill and intangible assets for impairment, valuation of annuity and life deferred policy acquisition costs, valuation of liabilities for property and casualty unpaid claims and claim expenses and valuation of certain investment contracts and policy reserves. Future Adoption of New Accounting Standards Accounting for Long-Duration Insurance Contracts In August 2018, the FASB issued accounting and disclosure guidance that contains targeted improvements to the accounting for long-duration insurance contracts. Under the new guidance, the cash flow assumptions used to measure the liability for future policy benefits for traditional insurance contracts will be required to be updated at least annually with changes recognized as a benefit expense (i.e., assumptions will no longer be locked-in). Insurance entities will be required to use a standard discount rate to measure the liabilities that will be equivalent to the yield from a high-quality bond. The new guidance also changes the amortization of deferred acquisition costs (DAC) to be on a constant-level basis over the expected term of the related contracts with no interest accruing on the DAC balance. The new guidance also introduces a new category of contract features associated with deposit type contracts referred to as market risk benefits (MRBs). Contract features meeting the definition of a MRB will be measured at fair value. New disclosures will be required for long-duration insurance contracts in order to provide better transparency into the exposure of insurance entities and the drivers of their results. For public business entities, the guidance is effective for annual reporting periods beginning after December 15, 2022, including interim periods within those years. With regards to the liability for future policy benefits and DAC, the guidance applies to contracts in force as of the beginning of the earliest period presented and may be applied retrospectively. With regards to MRBs, the guidance is to be applied retrospectively at the beginning of the earliest period presented. Early adoption is permitted. Management is currently evaluating the impact this guidance will have on the results of operations and financial position of the Company.
|
Investments |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | Net Investment Income The components of net investment income for the following periods were as follows:
Net Investment Gains (Losses) Net investment gains (losses) for the following periods were as follows:
The Company, from time to time, sells invested assets subsequent to the reporting date that were considered temporarily impaired at such reporting date. Such sales are due to issuer specific events occurring subsequent to the reporting date that result in a change in the Company's intent or ability to hold an invested asset. The types of events that may result in a sale include significant changes in the economic facts and circumstances related to the invested asset, significant unforeseen changes in liquidity needs, or changes in the Company's investment strategy. Net Investment Gains (Losses) by Transaction Type The following table reconciles net investment gains (losses) by transaction type:
(1) For the three months ended March 31, 2021, the Company recognized a valuation allowance of $1.1 million for credit loss impairments with respect to fixed maturity securities available for sale. Fixed Maturity Securities The Company's investment portfolio is comprised primarily of fixed maturity securities. Amortized cost, net, gross unrealized investment gains (losses) and fair values of all fixed maturity securities in the portfolio were as follows:
(1) Fair value includes securities issued by Federal National Mortgage Association (FNMA) of $373.3 million and $387.1 million; Federal Home Loan Mortgage Corporation (FHLMC) of $333.6 million and $344.3 million; and Government National Mortgage Association (GNMA) of $125.7 million and $132.3 million as of March 31, 2021 and December 31, 2020, respectively. The following table presents the fair value and gross unrealized losses for fixed maturity securities in an unrealized loss position at March 31, 2021 and December 31, 2020, respectively. The Company views the decrease in fair value of all of the fixed maturity securities with unrealized losses at March 31, 2021 — which was driven largely by increasing interest rates, spread widening, financial market illiquidity and/or market volatility from the date of acquisition — as temporary. As of March 31, 2021, the Company has not made the decision to sell and it is not more likely than not the Company will be required to sell the fixed maturity securities with unrealized losses before an anticipated recovery in value. Therefore, it was determined that the unrealized losses on the fixed maturity securities presented in the table below were not indicative of any impairments as of March 31, 2021.
Fixed maturity securities with an investment grade rating represented 91.8% of the gross unrealized losses as of March 31, 2021. With respect to fixed maturity securities involving securitized financial assets, the underlying collateral cash flows were stress tested to determine there was no adverse change in the present value of cash flows below the amortized cost basis. Maturities of Fixed Maturity Securities The following table presents the distribution of the Company’s fixed maturity securities portfolio by estimated expected maturity. Estimated expected maturities differ from contractual maturities, reflecting assumptions regarding borrowers' utilization of the right to call or prepay obligations with or without call or prepayment penalties. For structured securities, estimated expected maturities consider broker-dealer survey prepayment assumptions and are verified for consistency with the interest rate and economic environments.
Sales of Fixed Maturity and Equity Securities Proceeds received from sales of fixed maturity and equity securities, each determined using the specific identification method, and gross gains and gross losses realized as a result of those sales for each period were as follows:
Net Unrealized Investment Gains (Losses) on Fixed Maturity Securities The following table reconciles net unrealized investment gains (losses) on fixed maturity securities, net of tax, included in accumulated other comprehensive income (AOCI), before the impact of DAC:
Limited Partnership Interests Investments in limited partnership interests are accounted for using the equity method of accounting and include interests in senior commercial mortgage loan funds, hedge funds, infrastructure debt funds, infrastructure equity funds and other funds. Principal factors influencing carrying amount appreciation or decline include operating performance, comparable public company earnings multiples, capitalization rates and the economic environment. The Company recognizes an impairment loss for equity method limited partnership interests when evidence demonstrates that the loss is other than temporary. Evidence of a loss in value that is other than temporary may include the absence of an ability to recover the carrying amount of the investment or the inability of the investee to sustain a level of earnings that would justify the carrying amount of the investment. The carrying amounts of equity method limited partnership interests were as follows:
(1)Other consists primarily of limited partnership interests in real estate equity funds, private equity funds and corporate mezzanine funds. Offsetting of Assets and Liabilities The Company's derivatives are subject to enforceable master netting arrangements. Collateral support agreements associated with each master netting arrangement provide that the Company will receive or pledge financial collateral in the event minimum thresholds have been reached. The following table presents instruments that were subject to a master netting arrangement for the Company.
Deposits At March 31, 2021 and December 31, 2020, fixed maturity securities with a fair value of $26.6 million and $26.9 million, respectively, were on deposit with governmental agencies as required by law in various states for which the insurance subsidiaries of HMEC conduct business. In addition, at March 31, 2021 and December 31, 2020, fixed maturity securities with a fair value of $844.1 million and $707.3 million, respectively, were on deposit with the Federal Home Loan Bank of Chicago (FHLB) as collateral for amounts subject to funding agreements, advances and borrowings which were equal to $774.5 million at March 31, 2021 and $644.5 million at December 31, 2020. The deposited securities are reported as Fixed maturity securities on the Company’s Consolidated Balance Sheets.
|
Fair Value of Financial Instruments |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | The Company is required to disclose estimated fair values for certain financial and nonfinancial assets and liabilities. Fair values of the Company’s insurance contracts other than annuity contracts (which are investment contracts) are not required to be disclosed. However, the estimated fair values of liabilities under all insurance contracts are taken into consideration in the Company’s overall management of interest rate risk through the matching of investment maturities with amounts due under insurance contracts. Information regarding the three-level hierarchy presented below and the valuation methodologies utilized by the Company to estimate fair values at each reporting date is included in Part II - Item 8, Note 3 of the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Financial Instruments Measured and Carried at Fair Value on a Recurring Basis The following table presents the Company's fair value hierarchy for those financial assets and financial liabilities measured and carried at fair value on a recurring basis. During the three months ended March 31, 2021 and 2020, there were no transfers between Level 1 and Level 2. At March 31, 2021, Level 3 invested assets comprised 5.1% of the Company’s total investment portfolio at fair value.
(1) Separate Account (variable annuity) liabilities are equal to the estimated fair value of the Separate Account (variable annuity) assets. Changes in Level 3 Fair Value Measurements The reconciliation for all financial assets and financial liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) was as follows:
(1)Represents embedded derivatives, all related to the Company's fixed indexed annuity products, reported in Other policyholder funds in the Company's Consolidated Balance Sheets. (2)Includes U.S. Government and federally sponsored agency obligations for mortgage-backed securities and other asset-backed securities. (3)Transfers into and out of Level 3 during the three months ended March 31, 2021 and 2020 were attributable to changes in the availability of observable market information for individual fixed maturity securities. The Company's policy is to recognize transfers into and out of the levels as having occurred at the end of the reporting period in which the transfers were determined. For the three months ended March 31, 2021 and March 31, 2020, the Company had no net investment gains or losses on Level 3 financial assets. For the three months ended March 31, 2021, the Company had $4.3 million of net investment losses that were included in net income and were attributable to changes in the fair value of Level 3 financial liabilities; for the three months ended March 31, 2020, the respective net investment gains were $5.0 million. Quantitative Information about Level 3 Fair Value Measurements The following table provides quantitative information about the significant unobservable inputs for recurring fair value measurements categorized within Level 3.
(1) When a range of unobservable inputs is not readily available, the Company uses a single point best estimate. (2) "I spread" is the interpolated weighted average life point on the "on the run" (OTR) point of the curve. (3) "N spread" is the interpolated weighted average life point on the swap curve. (4) "T spread" is a specific point on the OTR curve. (5) "PDI" stands for private debt investment. (6) "SBL" stands for broadly syndicated loans. (7) Mortality multiplier is applied to the Annuity 2000 table. (8) Determined as a percentage of a risk-free rate. The valuation techniques and significant unobservable inputs used in the fair value measurement for financial assets and financial liabilities classified as Level 3 are subject to the control processes as described in Part II - Item 8, Note 3 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Generally, valuation techniques for fixed maturity securities include spread pricing, matrix pricing and discounted cash flow methodologies; include inputs such as quoted prices for identical or similar securities that are less liquid; and are based on lower levels of trading activity than securities classified as Level 2. The valuation techniques and significant unobservable inputs used in the fair value measurement for equity securities classified as Level 3 use similar valuation techniques and significant unobservable inputs as those used for fixed maturity securities. The sensitivity of the estimated fair values to changes in the significant unobservable inputs for fixed maturity and equity securities included in Level 3 include: benchmark yield, liquidity premium, estimated cash flows, prepayment and default speeds, spreads, weighted average life, and credit rating. Significant spread widening in isolation will adversely impact the overall valuation, while significant tightening will lead to substantial valuation increases. Significant increases (decreases) in illiquidity premiums in isolation will result in substantially lower (higher) valuations. Significant increases (decreases) in expected default rates in isolation will result in substantially lower (higher) valuations. Financial Instruments Not Carried at Fair Value; Disclosure Required The Company has various other financial assets and financial liabilities used in the normal course of business that are not carried at fair value, but for which fair value disclosure is required. These financial assets and financial liabilities are further described in Part II - Item 8, Note 3 in the Company's Annual Report on Form 10-K for the year ended December 31, 2020. The following table presents the carrying amount, fair value and fair value hierarchy of these financial assets and financial liabilities.
|
Deposit Asset on Reinsurance |
3 Months Ended |
---|---|
Mar. 31, 2021 | |
Reinsurance Disclosures [Abstract] | |
Deposit Asset on Reinsurance | In the second quarter of 2019, the Company reinsured a $2.9 billion block of in force fixed and variable annuity business with a minimum crediting rate of 4.5%. This represented approximately 50% of the Company’s in force fixed annuity account balances. The arrangement contains investment guidelines and a trust to help meet the Company’s risk management objectives. The annuity reinsurance transaction was effective April 1, 2019. Under the agreement, approximately $2.2 billion of fixed annuity reserves were reinsured on a coinsurance basis. The separate account assets and liabilities of approximately $0.7 billion were reinsured on a modified coinsurance basis and thus, remain on the Company's consolidated financial statements, but the related results of operations are fully reinsured. The Company determined that the reinsurance agreement does not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk. Therefore, the Company recognizes the reinsurance agreement using the deposit method of accounting. The assets transferred to the reinsurer as consideration paid is reported as a Deposit asset on reinsurance on the Company's Consolidated Balance Sheets. As amounts are received or paid, consistent with the underlying reinsured contracts, the Deposit asset on reinsurance is adjusted. The Deposit asset on reinsurance is accreted to the estimated ultimate cash flows using the interest method and the adjustment is reported as Net investment income. Interest accreted on the Deposit asset on reinsurance was $24.4 million and $23.7 million for the three months ended March 31, 2021 and 2020, respectively.
|
Goodwill and Intangible Assets |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | The Company conducts impairment testing for goodwill and intangible assets at least annually, or more often if events, changes or circumstances indicate that the carrying amount may not be recoverable. See Part II - Item 8, Note 1 in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 for further description of impairment testing. There were no changes in the carrying amount of goodwill by reporting unit for the three months ended March 31, 2021. The carrying amount of goodwill by reporting unit as of March 31, 2021 was as follows:
As of March 31, 2021, the outstanding amounts of definite-lived intangible assets subject to amortization are attributable to the acquisitions of Benefit Consultants Group, Inc. (BCG) and NTA Life Enterprises, LLC (NTA) during 2019. The acquisition of BCG resulted in initial recognition of definite-lived intangible assets subject to amortization in the amount of $14.1 million and the acquisition of NTA resulted in initial recognition of definite-lived intangible assets subject to amortization in the amount of $160.4 million. As of March 31, 2021 the outstanding amounts of definite-lived intangible assets subject to amortization were as follows:
With regards to the definite-lived intangible assets in the table above, the value of business acquired intangible asset represents the present value of the expected underwriting profit within policies that were in force on the date of acquisition. The value of distribution acquired intangible asset represents the present value of future business to be written by the existing agency force. The value of agency relationships intangible asset represents the present value of the commission overrides retained by NTA. The value of customer relationships intangible asset represents the present value of the expected profits from existing BCG customers in force at the date of acquisition. All of the aforementioned definite-lived intangible assets were valued using the income approach. Estimated future amortization of the Company's definite-lived intangible assets were as follows:
The value of business acquired intangible asset is being amortized by product based on the present value of future premiums to be received. The value of distribution acquired intangible asset is being amortized on a straight-line basis. The value of agency relationships intangible asset is being amortized based on the present value of future premiums to be received. The value of customer relationships intangible asset is being amortized based on the present value of future profits to be received. Indefinite-lived intangible assets (not subject to amortization) as of March 31, 2021 were as follows:
The trade names intangible asset represents the present value of future savings accruing to NTA and BCG by virtue of not having to pay royalties for the use of the trade names, valued using the relief from royalty method. The state licenses intangible asset represents the regulatory licenses held by NTA that were valued using the cost approach.
|
Unpaid Claims and Claim Expenses |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Insurance Loss Reserves [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unpaid Claims and Claim Expenses | The following table is a summary reconciliation of the beginning and ending Property and Casualty unpaid claims and claim expense reserves for the periods indicated. The table presents reserves on both a gross and net (after reinsurance) basis. The total net Property and Casualty insurance claims and claim expense incurred amounts are reflected in the Consolidated Statements of Operations. The end of the period gross reserve (before reinsurance) balances and the reinsurance recoverable balances are reflected on a gross basis in the Consolidated Balance Sheets.
(1)Unpaid claims and claim expenses as reported in the Consolidated Balance Sheets also include reserves for Supplemental, Retirement and Life of $78.4 million and $56.2 million as of March 31, 2021 and 2020, respectively, in addition to Property and Casualty reserves. (2)Reserves net of anticipated reinsurance recoverables. (3)Shows the amounts by which the Company decreased its reserves in each of the periods indicated for claims occurring in previous periods to reflect subsequent information on such claims and changes in their projected final settlement costs. (4)Benefits, claims and settlement expenses as reported in the Consolidated Statements of Operations also include amounts for Supplemental, Retirement and Life of $39.5 million and $34.2 million for the three months ended March 31, 2021 and 2020, respectively, in addition to Property and Casualty amounts. Net favorable development of total reserves for Property and Casualty claims occurring in prior years was $0.0 million and $1.0 million for the three months ended March 31, 2021 and 2020, respectively. The favorable development for the three months ended March 31, 2020 was the result of favorable loss trends in automobile for accident years 2019 and prior.
|
Reinsurance |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Insurance [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reinsurance | The Company recognizes the cost of reinsurance premiums over the contract periods for such premiums in proportion to the insurance protection provided. Amounts recoverable from reinsurers for unpaid claims and claim settlement expenses, including estimated amounts for unsettled claims, claims incurred but not yet reported and policy benefits, are estimated in a manner consistent with the insurance liability associated with the policy. The effects of reinsurance on premiums written and contract deposits; premiums and contract charges earned; and benefits, claims and settlement expenses were as follows:
(1) Excludes the annuity reinsurance transaction accounted for using the deposit method that is discussed in Note 4. (2) This measure is not based on accounting principles generally accepted in the United States of America (non-GAAP). An explanation of this non-GAAP measure is contained in the Glossary of Selected Terms included as Exhibit 99.1 in the Company's reports filed with the SEC.
|
Commitments |
3 Months Ended |
---|---|
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Investment Commitments The Company has outstanding commitments to fund investments primarily in limited partnership interests. Such unfunded commitments were $752.3 million and $571.9 million as of March 31, 2021 and December 31, 2020, respectively.
|
Segment Information |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | The Company conducts and manages its business through five segments. The four operating segments, representing the major lines of business, are: Property and Casualty (primarily personal lines automobile and property insurance products), Supplemental (primarily cancer, heart, hospital, supplemental disability and accident coverages), Retirement (primarily tax-qualified fixed and variable annuities) and Life (life insurance products). The Company does not allocate the impact of corporate-level transactions to these operating segments, consistent with the basis for management's evaluation of the results of those segments, but classifies those items in the fifth segment, Corporate and Other. In addition to ongoing transactions such as corporate debt service, net investment gains (losses) and certain public company expenses, such items also have included corporate debt retirement costs, when applicable. Summarized financial information for these segments is as follows:
|
Accumulated Other Comprehensive Income (Loss) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | AOCI represents the accumulated change in shareholders’ equity from transactions and other events and circumstances from non-shareholder sources. For the Company, AOCI includes the after tax change in net unrealized investment gains (losses) on fixed maturity securities and the after tax change in net funded status of benefit plans for the periods as shown in the Consolidated Statements of Changes in Shareholders’ Equity. The following table reconciles these components.
(1) All amounts are net of tax. (2) The pretax amounts reclassified from AOCI, $(8.1) million and $(13.6) million, are included in Net investment losses and the related income tax expenses, $(1.7) million and $(2.9) million, are included in Income tax expense in the Consolidated Statements of Operations for the three month periods ended March 31, 2021 and 2020 respectively. Comparative information for elements that are not required to be reclassified in their entirety to net income in the same reporting period is disclosed in Note 2.
|
Supplemental Consolidated Cash and Cash Flow Information |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Consolidated Cash and Cash Flow Information |
Non-cash investing activities with respect to modifications or exchanges of fixed maturity securities as well as paid-in-kind activity for policy loans were insignificant for the three months ended March 31, 2021 and 2020, respectively.
|
Basis of Presentation and Significant Accounting Policies (Policies) |
3 Months Ended |
---|---|
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) and with the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and disclosures normally included in annual financial statements prepared in conformity with GAAP, but are not required for interim reporting purposes, have been omitted. These Consolidated Financial Statements and Notes thereto should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in Part II - Item 8 of the Company's Annual Report on Form 10-K for the year ended December 31, 2020. The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the full year. The accompanying Consolidated Financial Statements and Notes thereto are unaudited. These financial statements reflect all adjustments (generally consisting only of normal recurring accruals) which are, in the opinion of management, necessary for the fair presentation of the consolidated financial position, results of operations and cash flows for the interim periods. The Company's significant accounting policies are summarized in Part II - Item 8, Note 1 of the Company's Annual Report on Form 10-K for the year ended December 31, 2020.
|
Consolidation | Consolidation All intercompany transactions and balances between HMEC and its subsidiaries and affiliates have been eliminated.
|
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. The most significant critical accounting estimates include valuation of hard-to-value fixed maturity securities (including evaluation of impairments), evaluation of goodwill and intangible assets for impairment, valuation of annuity and life deferred policy acquisition costs, valuation of liabilities for property and casualty unpaid claims and claim expenses and valuation of certain investment contracts and policy reserves.
|
Future Adoption of New Accounting Standards | Future Adoption of New Accounting Standards Accounting for Long-Duration Insurance Contracts In August 2018, the FASB issued accounting and disclosure guidance that contains targeted improvements to the accounting for long-duration insurance contracts. Under the new guidance, the cash flow assumptions used to measure the liability for future policy benefits for traditional insurance contracts will be required to be updated at least annually with changes recognized as a benefit expense (i.e., assumptions will no longer be locked-in). Insurance entities will be required to use a standard discount rate to measure the liabilities that will be equivalent to the yield from a high-quality bond. The new guidance also changes the amortization of deferred acquisition costs (DAC) to be on a constant-level basis over the expected term of the related contracts with no interest accruing on the DAC balance. The new guidance also introduces a new category of contract features associated with deposit type contracts referred to as market risk benefits (MRBs). Contract features meeting the definition of a MRB will be measured at fair value. New disclosures will be required for long-duration insurance contracts in order to provide better transparency into the exposure of insurance entities and the drivers of their results. For public business entities, the guidance is effective for annual reporting periods beginning after December 15, 2022, including interim periods within those years. With regards to the liability for future policy benefits and DAC, the guidance applies to contracts in force as of the beginning of the earliest period presented and may be applied retrospectively. With regards to MRBs, the guidance is to be applied retrospectively at the beginning of the earliest period presented. Early adoption is permitted. Management is currently evaluating the impact this guidance will have on the results of operations and financial position of the Company.
|
Investments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of net investment income | The components of net investment income for the following periods were as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of net investment gains (losses) | Net investment gains (losses) for the following periods were as follows:
The following table reconciles net investment gains (losses) by transaction type:
(1) For the three months ended March 31, 2021, the Company recognized a valuation allowance of $1.1 million for credit loss impairments with respect to fixed maturity securities available for sale.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized gains and losses on fixed maturities and equity securities | Amortized cost, net, gross unrealized investment gains (losses) and fair values of all fixed maturity securities in the portfolio were as follows:
(1) Fair value includes securities issued by Federal National Mortgage Association (FNMA) of $373.3 million and $387.1 million; Federal Home Loan Mortgage Corporation (FHLMC) of $333.6 million and $344.3 million; and Government National Mortgage Association (GNMA) of $125.7 million and $132.3 million as of March 31, 2021 and December 31, 2020, respectively.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of fair value and gross unrealized losses of fixed maturity securities and equity securities in an unrealized loss position | The following table presents the fair value and gross unrealized losses for fixed maturity securities in an unrealized loss position at March 31, 2021 and December 31, 2020, respectively. The Company views the decrease in fair value of all of the fixed maturity securities with unrealized losses at March 31, 2021 — which was driven largely by increasing interest rates, spread widening, financial market illiquidity and/or market volatility from the date of acquisition — as temporary. As of March 31, 2021, the Company has not made the decision to sell and it is not more likely than not the Company will be required to sell the fixed maturity securities with unrealized losses before an anticipated recovery in value. Therefore, it was determined that the unrealized losses on the fixed maturity securities presented in the table below were not indicative of any impairments as of March 31, 2021.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distribution of the company's fixed maturity portfolio by estimated expected maturity | The following table presents the distribution of the Company’s fixed maturity securities portfolio by estimated expected maturity. Estimated expected maturities differ from contractual maturities, reflecting assumptions regarding borrowers' utilization of the right to call or prepay obligations with or without call or prepayment penalties. For structured securities, estimated expected maturities consider broker-dealer survey prepayment assumptions and are verified for consistency with the interest rate and economic environments.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds received from sales of fixed maturities and equity securities | Proceeds received from sales of fixed maturity and equity securities, each determined using the specific identification method, and gross gains and gross losses realized as a result of those sales for each period were as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of net unrealized investment gains (losses) on fixed maturity securities and equity securities | The following table reconciles net unrealized investment gains (losses) on fixed maturity securities, net of tax, included in accumulated other comprehensive income (AOCI), before the impact of DAC:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of carrying amounts of equity method limited partnership interests | The carrying amounts of equity method limited partnership interests were as follows:
(1)Other consists primarily of limited partnership interests in real estate equity funds, private equity funds and corporate mezzanine funds.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Offsetting assets and liability | The following table presents instruments that were subject to a master netting arrangement for the Company.
|
Fair Value of Financial Instruments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Company's fair value hierarchy measured at recurring basis | The following table presents the Company's fair value hierarchy for those financial assets and financial liabilities measured and carried at fair value on a recurring basis. During the three months ended March 31, 2021 and 2020, there were no transfers between Level 1 and Level 2. At March 31, 2021, Level 3 invested assets comprised 5.1% of the Company’s total investment portfolio at fair value.
(1) Separate Account (variable annuity) liabilities are equal to the estimated fair value of the Separate Account (variable annuity) assets.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of reconciliations for all Level 3 financial assets and financial liabilities measured at fair value on a recurring basis | The reconciliation for all financial assets and financial liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) was as follows:
(1)Represents embedded derivatives, all related to the Company's fixed indexed annuity products, reported in Other policyholder funds in the Company's Consolidated Balance Sheets. (2)Includes U.S. Government and federally sponsored agency obligations for mortgage-backed securities and other asset-backed securities. (3)Transfers into and out of Level 3 during the three months ended March 31, 2021 and 2020 were attributable to changes in the availability of observable market information for individual fixed maturity securities. The Company's policy is to recognize transfers into and out of the levels as having occurred at the end of the reporting period in which the transfers were determined.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quantitative Information about Level 3 Fair Value Measurements | The following table provides quantitative information about the significant unobservable inputs for recurring fair value measurements categorized within Level 3.
(1) When a range of unobservable inputs is not readily available, the Company uses a single point best estimate. (2) "I spread" is the interpolated weighted average life point on the "on the run" (OTR) point of the curve. (3) "N spread" is the interpolated weighted average life point on the swap curve. (4) "T spread" is a specific point on the OTR curve. (5) "PDI" stands for private debt investment. (6) "SBL" stands for broadly syndicated loans. (7) Mortality multiplier is applied to the Annuity 2000 table. (8) Determined as a percentage of a risk-free rate.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of fair value assets and liabilities measured on nonrecurring basis | The following table presents the carrying amount, fair value and fair value hierarchy of these financial assets and financial liabilities.
|
Goodwill and Intangible Assets (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of goodwill | The carrying amount of goodwill by reporting unit as of March 31, 2021 was as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of finite-lived intangible assets | As of March 31, 2021 the outstanding amounts of definite-lived intangible assets subject to amortization were as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Future amortization expense | Estimated future amortization of the Company's definite-lived intangible assets were as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of indefinite-lived intangible assets | Indefinite-lived intangible assets (not subject to amortization) as of March 31, 2021 were as follows:
|
Unpaid Claims and Claim Expenses (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Insurance Loss Reserves [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of property and casualty unpaid claims and claim expense | The following table is a summary reconciliation of the beginning and ending Property and Casualty unpaid claims and claim expense reserves for the periods indicated. The table presents reserves on both a gross and net (after reinsurance) basis. The total net Property and Casualty insurance claims and claim expense incurred amounts are reflected in the Consolidated Statements of Operations. The end of the period gross reserve (before reinsurance) balances and the reinsurance recoverable balances are reflected on a gross basis in the Consolidated Balance Sheets.
(1)Unpaid claims and claim expenses as reported in the Consolidated Balance Sheets also include reserves for Supplemental, Retirement and Life of $78.4 million and $56.2 million as of March 31, 2021 and 2020, respectively, in addition to Property and Casualty reserves. (2)Reserves net of anticipated reinsurance recoverables. (3)Shows the amounts by which the Company decreased its reserves in each of the periods indicated for claims occurring in previous periods to reflect subsequent information on such claims and changes in their projected final settlement costs. (4)Benefits, claims and settlement expenses as reported in the Consolidated Statements of Operations also include amounts for Supplemental, Retirement and Life of $39.5 million and $34.2 million for the three months ended March 31, 2021 and 2020, respectively, in addition to Property and Casualty amounts.
|
Reinsurance (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Insurance [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effects of reinsurance on premiums and benefits | The effects of reinsurance on premiums written and contract deposits; premiums and contract charges earned; and benefits, claims and settlement expenses were as follows:
(1) Excludes the annuity reinsurance transaction accounted for using the deposit method that is discussed in Note 4. (2) This measure is not based on accounting principles generally accepted in the United States of America (non-GAAP). An explanation of this non-GAAP measure is contained in the Glossary of Selected Terms included as Exhibit 99.1 in the Company's reports filed with the SEC.
|
Segment Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized financial information for these segments | Summarized financial information for these segments is as follows:
|
Accumulated Other Comprehensive Income (Loss) (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of accumulated other comprehensive income (loss) | The following table reconciles these components.
(1) All amounts are net of tax. (2) The pretax amounts reclassified from AOCI, $(8.1) million and $(13.6) million, are included in Net investment losses and the related income tax expenses, $(1.7) million and $(2.9) million, are included in Income tax expense in the Consolidated Statements of Operations for the three month periods ended March 31, 2021 and 2020 respectively.
|
Supplemental Consolidated Cash and Cash Flow Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of cash and restricted cash |
|
Investments - Net Investment Income (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Net Investment Income [Line Items] | ||
Investment expenses | $ (2.1) | $ (2.2) |
Total net investment income | 95.5 | 82.3 |
Investment Portfolio | ||
Net Investment Income [Line Items] | ||
Total net investment income | 71.1 | 58.6 |
Deposit asset on reinsurance | ||
Net Investment Income [Line Items] | ||
Total net investment income | 24.4 | 23.7 |
Fixed maturity securities | ||
Net Investment Income [Line Items] | ||
Net investment income - investment portfolio | 58.0 | 59.4 |
Equity securities | ||
Net Investment Income [Line Items] | ||
Net investment income - investment portfolio | 1.1 | 1.2 |
Limited partnership interests | ||
Net Investment Income [Line Items] | ||
Net investment income - investment portfolio | 11.3 | (2.7) |
Short-term and other investments | ||
Net Investment Income [Line Items] | ||
Net investment income - investment portfolio | $ 2.8 | $ 2.9 |
Investments - Realized Investment Gains (Losses) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Gain (Loss) on Securities [Line Items] | ||
Net investment losses | $ (9.0) | $ (18.5) |
Fixed maturity securities | ||
Gain (Loss) on Securities [Line Items] | ||
Net investment losses | (5.4) | 1.1 |
Equity securities | ||
Gain (Loss) on Securities [Line Items] | ||
Net investment losses | (2.7) | (14.7) |
Short-term investments and other | ||
Gain (Loss) on Securities [Line Items] | ||
Net investment losses | $ (0.9) | $ (4.9) |
Investments - Net Investment Gains (Losses) By Transaction Type (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Investments, Debt and Equity Securities [Abstract] | ||
Credit loss impairments | $ (1.1) | $ 0.0 |
Intent-to-sell impairments | (2.1) | (3.7) |
Total impairments on investments recognized in net income | (3.2) | (3.7) |
Sales and other, net | (2.1) | 4.5 |
Change in fair value - equity securities | (2.8) | (14.5) |
Change in fair value and gains (losses) realized on settlements - derivatives | (0.9) | (4.8) |
Net investment losses | (9.0) | $ (18.5) |
Available-for-sale securities, allowance for credit losses | $ 1.1 |
Investments - Distribution of Fixed Maturity Securities by Expected Maturity (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2021 |
Dec. 31, 2020 |
|
Percent of Total Fair Value | ||
Due in 1 year or less | 4.10% | 4.00% |
Due after 1 year through 5 years | 28.20% | 28.30% |
Due after 5 years through 10 years | 28.30% | 28.00% |
Due after 10 years through 20 years | 24.00% | 24.60% |
Due after 20 years | 15.40% | 15.10% |
Total | 100.00% | 100.00% |
Fair Value | ||
Due in 1 year or less | $ 261.3 | |
Due after 1 year through 5 years | 1,789.8 | |
Due after 5 years through 10 years | 1,799.7 | |
Due after 10 years through 20 years | 1,523.5 | |
Due after 20 years | 982.0 | |
Total | 6,356.3 | $ 6,345.3 |
Amortized Cost, net | ||
Due in 1 year or less | 255.5 | |
Due after 1 year through 5 years | 1,713.5 | |
Due after 5 years through 10 years | 1,669.5 | |
Due after 10 years through 20 years | 1,412.2 | |
Due after 20 years | 942.0 | |
Amortized Cost, net | $ 5,992.7 | $ 5,788.6 |
Average option-adjusted duration, in years | 6 years 7 months 6 days | 6 years 4 months 24 days |
Investments - Summary of Proceeds and Gains (Losses) Realized on Securities (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Fixed maturity securities | ||
Proceeds received | $ 95.5 | $ 98.2 |
Gross gains realized | 1.2 | 4.8 |
Gross losses realized | (3.4) | (0.3) |
Equity Securities, FV-NI, Realized Gain (Loss) [Abstract] | ||
Proceeds received | 0.4 | 1.5 |
Gross gains realized | 0.1 | 0.3 |
Gross losses realized | $ 0.0 | $ (0.6) |
Investments - Reconciliation of Net Unrealized Investment Gains (Losses) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | $ 1,790.1 | |
Ending balance | 1,692.9 | $ 1,477.6 |
Net unrealized investment gains (losses) on securities | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | 366.3 | 230.4 |
Ending balance | 243.6 | 136.6 |
Net unrealized investment gains (losses) on securities | Fixed maturity securities | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | 439.8 | 264.4 |
Change in net unrealized investment gains (losses) on fixed maturity securities | (159.0) | (103.8) |
Reclassification of net investment (gains) losses on securities to net income | 6.4 | (10.7) |
Ending balance | $ 287.2 | $ 149.9 |
Investments - Carrying Amount of Equity Method Limited Partnership Interests (Details) - USD ($) $ in Millions |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Schedule of Equity Method Investments [Line Items] | ||
Limited partnership interests | $ 505.2 | $ 449.0 |
Senior commercial mortgage loan funds | ||
Schedule of Equity Method Investments [Line Items] | ||
Limited partnership interests | 197.3 | 149.6 |
Hedge funds | ||
Schedule of Equity Method Investments [Line Items] | ||
Limited partnership interests | 62.6 | 63.2 |
Infrastructure debt funds | ||
Schedule of Equity Method Investments [Line Items] | ||
Limited partnership interests | 58.4 | 58.3 |
Infrastructure equity funds | ||
Schedule of Equity Method Investments [Line Items] | ||
Limited partnership interests | 56.2 | 52.1 |
Other | ||
Schedule of Equity Method Investments [Line Items] | ||
Limited partnership interests | $ 130.7 | $ 125.8 |
Investments - Offsetting of Assets and Liabilities (Details) - Free-standing derivatives - USD ($) $ in Millions |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Asset derivatives: | ||
Gross Amounts | $ 17.5 | $ 16.8 |
Gross Amounts Offset in the Consolidated Balance Sheets | 0.0 | 0.0 |
Net Amounts of Assets/ Liabilities Presented in the Consolidated Balance Sheets | 17.5 | 16.8 |
Gross Amounts Not Offset in the Consolidated Balance Sheets, Financial Instruments | 14.2 | 13.7 |
Gross Amounts Not Offset in the Consolidated Balance Sheets, Cash Collateral Received | 3.3 | 2.6 |
Net Amount | $ 0.0 | $ 0.5 |
Investments - Narrative (Details) - USD ($) $ in Millions |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Investment Holdings [Line Items] | ||
Investment grade rating | 91.80% | |
Debt securities, available-for-sale | $ 6,356.3 | $ 6,345.3 |
FHLB funding agreements | 774.5 | 644.5 |
FHLB of Chicago | ||
Investment Holdings [Line Items] | ||
Debt securities, available-for-sale | 844.1 | 707.3 |
Governmental Agencies as Required by Law in Various States | ||
Investment Holdings [Line Items] | ||
Debt securities, available-for-sale | $ 26.6 | $ 26.9 |
Fair Value of Financial Instruments - Narrative (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Percentage of level 3 invested assets in total investment portfolio | 5.10% | |
Net investment gains (losses) included in net income related to financial assets | $ 0 | $ 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net investment gains (losses) included in net income related to financial assets | $ 0 | 0 |
Net realized investment losses | $ 5,000,000.0 |
Deposit Asset on Reinsurance - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Jun. 30, 2019 |
Dec. 31, 2020 |
Apr. 01, 2019 |
|
Effects of Reinsurance [Line Items] | |||||
Reinsurance block of in-force fixed and variable annuity business | $ 2,900.0 | ||||
Fixed annuity reserves reinsured on a coinsurance basis | $ 2,200.0 | ||||
Separate account asset | $ 3,052.9 | $ 2,891.4 | |||
Separate account liability | 3,052.9 | $ 2,891.4 | |||
Interest accrued on reinsurance deposit | 24.4 | $ 23.7 | |||
Reinsurance Contract Modified Coinsurance Basis | |||||
Effects of Reinsurance [Line Items] | |||||
Separate account asset | 700.0 | ||||
Separate account liability | $ 700.0 | ||||
Reinsurance Deposit Receivable | Third Party Reinsurer Risk | |||||
Effects of Reinsurance [Line Items] | |||||
Concentration risk, percent | 50.00% | ||||
Minimum | |||||
Effects of Reinsurance [Line Items] | |||||
Minimum crediting rating | 4.50% |
Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Millions |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Goodwill [Line Items] | ||
Goodwill | $ 43.5 | $ 43.5 |
Property and Casualty | ||
Goodwill [Line Items] | ||
Goodwill | 9.5 | |
Supplemental | ||
Goodwill [Line Items] | ||
Goodwill | 19.6 | |
Retirement | ||
Goodwill [Line Items] | ||
Goodwill | 4.5 | |
Life | ||
Goodwill [Line Items] | ||
Goodwill | $ 9.9 |
Goodwill and Intangible Assets - Narrative (Details) $ in Millions |
Mar. 31, 2021
USD ($)
|
---|---|
Benefit Consultants Group Inc. | |
Goodwill [Line Items] | |
Acquired finite-lived intangible assets | $ 14.1 |
NTA | |
Goodwill [Line Items] | |
Acquired finite-lived intangible assets | $ 160.4 |
Goodwill and Intangible Assets - Summary of Finite-Lived Intangible Assets (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2021
USD ($)
| |
Finite-Lived Intangible Assets [Line Items] | |
At inception | $ 174.5 |
Accumulated amortization | (30.1) |
Total | $ 144.4 |
Weighted Average useful Life (in Years) | 23 years |
Value of business acquired | |
Finite-Lived Intangible Assets [Line Items] | |
At inception | $ 94.4 |
Accumulated amortization | $ (12.6) |
Weighted Average useful Life (in Years) | 30 years |
Value of distribution acquired | |
Finite-Lived Intangible Assets [Line Items] | |
At inception | $ 54.0 |
Accumulated amortization | $ (9.4) |
Weighted Average useful Life (in Years) | 17 years |
Value of agency relationships | |
Finite-Lived Intangible Assets [Line Items] | |
At inception | $ 17.0 |
Accumulated amortization | $ (4.6) |
Weighted Average useful Life (in Years) | 14 years |
Value of customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
At inception | $ 9.1 |
Accumulated amortization | $ (3.5) |
Weighted Average useful Life (in Years) | 10 years |
Goodwill and Intangible Assets - Estimated Future Amortization (Details) $ in Millions |
Mar. 31, 2021
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
2021 (excluding the three months ended March 31, 2021) | $ 9.8 |
2022 | 12.1 |
2023 | 11.2 |
2024 | 10.5 |
2025 | 9.8 |
Thereafter | 91.0 |
Total | $ 144.4 |
Goodwill and Intangible Assets - Summary of Indefinite-Lived Intangibles (Details) $ in Millions |
Mar. 31, 2021
USD ($)
|
---|---|
Indefinite-lived Intangible Assets [Line Items] | |
Indefinite-lived intangible assets | $ 10.8 |
Trade names | |
Indefinite-lived Intangible Assets [Line Items] | |
Indefinite-lived intangible assets | 7.9 |
State licenses | |
Indefinite-lived Intangible Assets [Line Items] | |
Indefinite-lived intangible assets | $ 2.9 |
Unpaid Claims and Claim Expenses - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Insurance Loss Reserves [Abstract] | ||
Favorable development of total reserves for property and casualty claims occurring in prior years | $ 0.0 | $ 1.0 |
Commitments (Details) - USD ($) $ in Millions |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Unfunded commitments to purchase investments | $ 752.3 | $ 571.9 |
Supplemental Consolidated Cash and Cash Flow Information (Details) - USD ($) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Supplemental Cash Flow Elements [Abstract] | ||||
Cash | $ 38.3 | $ 21.8 | ||
Restricted cash | 1.1 | 0.5 | ||
Total cash and restricted cash reported in the Consolidated Balance Sheets | 39.4 | $ 41.2 | $ 22.3 | $ 25.5 |
Cash paid (recovered) during the three months for interest | 0.6 | 1.4 | ||
Cash paid (recovered) during the three months for income taxes | $ (0.1) | $ (0.7) |
-,:SL+V4T]\ER!3V25\_8:Q>?/L_V/9&4)8(U*P%3"''*W
M,+.3-GY K23#%6O(2L=GC1S?SH^@HH.=KI6N'/DU.K=AVS-A:]
M#D\5HPD9"R33.,;B_8HPONY:KO6Q\$07D=(+=J^SQ LR(>IE.18PLXLH,QJ3
M1%*>($'F7:OO7@Y<1SL8BQ^4K&5IC+24*>>O>G([ZUJ.)B*,A$J'P/!8D0%A
M3$<"CC]Y4*O(J1W+XX_HUT8\B)EB20:<_:0S%76MEH5F9(Y3II[X^H;D@IHZ
M7LB9-/]HG=GZ8!RF4O$X=P:"F";9$[_EA2@YN(T=#E[NX!WK4,\=ZD9H1F9D
M#;'"O8[@:R2T-433 U,;XPUJ:*(_XT0)>$O!3_4&CP^3Q[O;8?]Y-$17_;O^
MPV"$)C>CT?,$G8VQ((F*B*(A9N?H.WJ9#-'9MW/T#=$$W5/&X$O(CJT 1(>S
MPSSI59;4VY'T'HL:JKL7R',\M\)]L-]]2,+"W=ETMT%^40.OJ(%GXM5WQ)LH
MK BTID)\CJYI@I.08H;&7%+3:K_Z4ZD$--SO/
;
MO
=3_X0IBO^L)$:(ZC*?/W7/&T^GCPWGPRVKYLO+Z&S%>7J1"XQ
M%;'E'YA>K[[1^88_(%SD6N ,LO$XRNB_GR01N:6+T2A*VCX\00]LD%Y'(4$EG)-;F0N><0XPG48$__UW
MDS1)?^CD965J2OO(@F+?6E/!\OIJ!>-HV)GPF1.DI"VGOTT+^5A6:TDUE&(@X:9^Z[ QHV
M=$*/2>[[MS'.YM_&8=YU@&[C-<"(C&,%^\0:7A_?"\+9 CV&0JUF*B$,@Z_H
M6TDY"(GH05G-=3/G=MLJT%)>\3G:^>GL0O0=7@5OY SH/ZW+
M@P7IMJXJ%%[2? 63S?W"F(K,]LLI4+5Q+=-OF/M:E65:5Z-?2^-*WB?Y78;
M5.)@FO _\-1U%$KM_ >RG^;)5O^_*"Z/;+5
MW%%=:I$[4X)U5-<\K3MSZ= DPT_"!.490< C"0"X9 W _>U *#34*H172G
ME+\>0(DQO4>*BGR00KOK=%/'[=;S4,*U*O38/EV?#'3S;JOY?Y1XQAT6!Y5]
M/4ZPQD&$#!J1(""@X+79(,5634
MK&."#_96N1;36:(^L^*7":4!=TCZL?,>9HC
MF([8&B[WF0GQMJ:_;:IW4J=TG@.@X( U8E,X;^,P!7E)H3L&*]*: RQ#FX\O
MYI3ND&D>BM51&ZNCYWYHT ELG:W"O1N$T"R,^AG;E@S4DM=8N1/S#N D?P=[?JP5IPPCG6 RR!4+E6^LOX:,$CPWB=)BY(@J;:^^NR]
MH!$*W5[P@"8-O
_/6)G=Z2@;
M/4Q