ý | Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
¨ | Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Ohio | 31-1324304 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
518 East Broad Street, Columbus, Ohio | 43215-3976 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer ¨ | Accelerated filer ý | |
Non-accelerated filer ¨ | (Do not check if a smaller reporting company) | Smaller reporting company ¨ |
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
($ and shares in millions, except per share amounts) | September 30, 2016 | December 31, 2015 | |||||
(unaudited) | |||||||
Assets | |||||||
Fixed maturities, available-for-sale, at fair value (amortized cost $2,061.0 and $1,972.9, respectively) | $ | $ | |||||
Equity securities, available-for-sale, at fair value (cost $246.1 and $265.2, respectively) | |||||||
Other invested assets, available-for-sale, at fair value (cost $57.1 and $56.9, respectively) | |||||||
Other invested assets | |||||||
Notes receivable from affiliate | |||||||
Total investments | |||||||
Cash and cash equivalents | |||||||
Accrued investment income and other assets | |||||||
Deferred policy acquisition costs (affiliated net assumed $52.8 and $49.3, respectively) | |||||||
Reinsurance recoverable on losses and loss expenses payable | |||||||
Prepaid reinsurance premiums | |||||||
Due from affiliate | |||||||
Current federal income taxes | |||||||
Net deferred federal income taxes | |||||||
Property and equipment, at cost | |||||||
Total assets | $ | $ | |||||
Liabilities and Stockholders’ Equity | |||||||
Losses and loss expenses payable (affiliated net assumed $606.7 and $532.4, respectively) | $ | $ | |||||
Unearned premiums (affiliated net assumed $227.0 and $214.2, respectively) | |||||||
Notes payable (affiliates $15.2 and $15.2, respectively) | |||||||
Postretirement and pension benefits (affiliated net ceded $38.4 and $56.0, respectively) | |||||||
Other liabilities (affiliated net assumed $10.5 and affiliated net ceded $8.4, respectively) | |||||||
Total liabilities | |||||||
Stockholders’ equity: | |||||||
Class A Preferred stock (nonvoting), without par value. Authorized 2.5 shares; none issued | |||||||
Class B Preferred stock, without par value. Authorized 2.5 shares; none issued | |||||||
Common stock, without par value. Authorized 100.0 shares; 48.4 and 48.1 shares issued, respectively, at stated value of $2.50 per share | |||||||
Treasury stock, 6.8 and 6.8 shares, respectively, at cost | ( | ) | ( | ) | |||
Additional paid-in capital | |||||||
Accumulated other comprehensive income (affiliated net ceded $53.3 and $56.7, respectively) | |||||||
Retained earnings | |||||||
Total stockholders’ equity | |||||||
Total liabilities and stockholders’ equity | $ | $ | |||||
($ in millions, except per share amounts) | Three months ended September 30 | ||||||
(unaudited) | 2016 | 2015 | |||||
Earned premiums (affiliated net assumed $121.4 and $112.2, respectively) | $ | $ | |||||
Net investment income (affiliates $1.3 and $1.3, respectively) | |||||||
Net realized gains on investments: | |||||||
Total other-than-temporary impairment losses | ( | ) | ( | ) | |||
Portion of loss recognized in other comprehensive income | |||||||
Other net realized investment gains | |||||||
Total net realized gains on investments | |||||||
Other income from affiliates | |||||||
Total revenues | |||||||
Losses and loss expenses (affiliated net assumed $100.9 and $67.4, respectively) | |||||||
Acquisition and operating expenses (affiliated net assumed $73.9 and $52.8, respectively) | |||||||
Interest expense (affiliates $0.2 and $0.1, respectively) | |||||||
Other expenses | |||||||
Total expenses | |||||||
Income before federal income taxes | |||||||
Federal income tax (benefit) expense: | |||||||
Current | ( | ) | |||||
Deferred | ( | ) | |||||
Total federal income tax (benefit) expense | ( | ) | |||||
Net income | $ | $ | |||||
Earnings per common share: | |||||||
Basic | $ | $ | |||||
Diluted | $ | $ | |||||
Dividends paid per common share | $ | $ | |||||
($ in millions, except per share amounts) | Nine months ended September 30 | ||||||
(unaudited) | 2016 | 2015 | |||||
Earned premiums (affiliated net assumed $352.4 and $320.5, respectively) | $ | $ | |||||
Net investment income (affiliates $3.7 and $3.7, respectively) | |||||||
Net realized gains on investments: | |||||||
Total other-than-temporary impairment losses | ( | ) | ( | ) | |||
Portion of loss recognized in other comprehensive income | |||||||
Other net realized investment gains | |||||||
Total net realized gains on investments | |||||||
Other income from affiliates | |||||||
Total revenues | |||||||
Losses and loss expenses (affiliated net assumed $281.4 and $200.9, respectively) | |||||||
Acquisition and operating expenses (affiliated net assumed $217.0 and $188.9, respectively) | |||||||
Interest expense (affiliates $0.6 and $0.5, respectively) | |||||||
Other expenses | |||||||
Total expenses | |||||||
(Loss) income before federal income taxes | ( | ) | |||||
Federal income tax (benefit) expense: | |||||||
Current | ( | ) | |||||
Deferred | ( | ) | |||||
Total federal income tax (benefit) expense | ( | ) | |||||
Net (loss) income | $ | ( | ) | $ | |||
(Loss) earnings per common share: | |||||||
Basic | $ | ( | ) | $ | |||
Diluted | $ | ( | ) | $ | |||
Dividends paid per common share | $ | $ | |||||
($ in millions, except per share amounts) | Three months ended September 30 | ||||||
(unaudited) | 2016 | 2015 | |||||
Net income | $ | $ | |||||
Other comprehensive loss, net of tax: | |||||||
Net unrealized holding gains (losses) on investments: | |||||||
Unrealized holding gains (losses) | ( | ) | |||||
Reclassification adjustments for gains realized in net income | ( | ) | ( | ) | |||
Income tax benefit | |||||||
Total net unrealized holding losses on investments | ( | ) | ( | ) | |||
Net unrecognized benefit plan obligations: | |||||||
Reclassification adjustments for amortization to statements of income: | |||||||
Negative prior service cost | ( | ) | ( | ) | |||
Net actuarial loss | |||||||
Income tax expense | ( | ) | ( | ) | |||
Total net unrecognized benefit plan obligations | |||||||
Other comprehensive loss | ( | ) | ( | ) | |||
Comprehensive income (loss) | $ | $ | ( | ) | |||
($ in millions, except per share amounts) | Nine months ended September 30 | ||||||
(unaudited) | 2016 | 2015 | |||||
Net (loss) income | $ | ( | ) | $ | |||
Other comprehensive income (loss), net of tax: | |||||||
Net unrealized holding gains (losses) on investments: | |||||||
Unrealized holding gains (losses) | ( | ) | |||||
Reclassification adjustments for gains realized in net income | ( | ) | ( | ) | |||
Income tax (expense) benefit | ( | ) | |||||
Total net unrealized holding gains (losses) on investments | ( | ) | |||||
Net unrecognized benefit plan obligations: | |||||||
Reclassification adjustments for amortization to statements of income: | |||||||
Negative prior service cost | ( | ) | ( | ) | |||
Net actuarial loss | |||||||
Income tax expense | ( | ) | ( | ) | |||
Total net unrecognized benefit plan obligations | |||||||
Other comprehensive income (loss) | ( | ) | |||||
Comprehensive income | $ | $ | |||||
($ in millions) | Nine months ended September 30 | ||||||
(unaudited) | 2016 | 2015 | |||||
Cash flows from operating activities: | |||||||
Net (loss) income | $ | ( | ) | $ | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization, net | |||||||
Share-based compensation | |||||||
Net realized gains on investments | ( | ) | ( | ) | |||
Changes in operating assets and liabilities: | |||||||
Deferred policy acquisition benefits | ( | ) | ( | ) | |||
Accrued investment income and other assets | ( | ) | ( | ) | |||
Postretirement and pension benefits | ( | ) | ( | ) | |||
Other liabilities and due to/from affiliates, net | ( | ) | ( | ) | |||
Reinsurance recoverable on losses and loss expenses payable and prepaid reinsurance premiums | |||||||
Losses and loss expenses payable | |||||||
Unearned premiums | |||||||
Excess tax benefits on share-based awards | ( | ) | |||||
Federal income taxes | ( | ) | |||||
Cash provided from December 31, 2014 unearned premium transfer related to the homeowners quota share arrangement | |||||||
Net cash provided by operating activities | |||||||
Cash flows from investing activities: | |||||||
Purchases of fixed maturities available-for-sale | ( | ) | ( | ) | |||
Purchases of equity securities available-for-sale | ( | ) | ( | ) | |||
Purchases of other invested assets | ( | ) | ( | ) | |||
Maturities, calls and pay downs of fixed maturities available-for-sale | |||||||
Sales of fixed maturities available-for-sale | |||||||
Sales of equity securities available-for-sale | |||||||
Sales of other invested assets available-for-sale | |||||||
Net additions of property and equipment | ( | ) | |||||
Net cash used in investing activities | ( | ) | ( | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from issuance of common stock | |||||||
Payments to acquire treasury stock | ( | ) | ( | ) | |||
Payment of dividends | ( | ) | ( | ) | |||
Excess tax benefits on share-based awards | |||||||
Proceeds from long-term debt | |||||||
Net cash provided by (used in) financing activities | ( | ) | |||||
Net increase (decrease) in cash and cash equivalents | ( | ) | |||||
Cash and cash equivalents at beginning of period | |||||||
Cash and cash equivalents at end of period | $ | $ | |||||
Supplemental disclosures: | |||||||
Interest paid (affiliates $0.6 and $0.5, respectively) | $ | $ | |||||
Federal income taxes paid | $ | $ | |||||
($ millions) | Cost or amortized cost | Gross unrealized holding gains | Gross unrealized holding losses | Fair value | |||||||||||
September 30, 2016 | |||||||||||||||
Fixed maturities: | |||||||||||||||
U.S. treasury securities and obligations of U.S. government agencies | $ | $ | $ | ( | ) | $ | |||||||||
Obligations of states and political subdivisions | |||||||||||||||
Corporate securities | ( | ) | |||||||||||||
U.S. government agencies mortgage-backed securities | ( | ) | |||||||||||||
Total fixed maturities | ( | ) | |||||||||||||
Equity securities: | |||||||||||||||
Large-cap securities | ( | ) | |||||||||||||
Small-cap securities | |||||||||||||||
Total equity securities | ( | ) | |||||||||||||
Other invested assets | |||||||||||||||
Total available-for-sale securities | $ | $ | $ | ( | ) | $ | |||||||||
($ millions) | Cost or amortized cost | Gross unrealized holding gains | Gross unrealized holding losses | Fair value | |||||||||||
December 31, 2015 | |||||||||||||||
Fixed maturities: | |||||||||||||||
U.S. treasury securities and obligations of U.S. government agencies | $ | $ | $ | ( | ) | $ | |||||||||
Obligations of states and political subdivisions | ( | ) | |||||||||||||
Corporate securities | ( | ) | |||||||||||||
U.S. government agencies mortgage-backed securities | ( | ) | |||||||||||||
Total fixed maturities | ( | ) | |||||||||||||
Equity securities: | |||||||||||||||
Large-cap securities | ( | ) | |||||||||||||
Small-cap securities | ( | ) | |||||||||||||
Total equity securities | ( | ) | |||||||||||||
Other invested assets | ( | ) | |||||||||||||
Total available-for-sale securities | $ | $ | $ | ( | ) | $ | |||||||||
($ millions, except # of positions) | Less than 12 months | 12 months or more | Total | |||||||||||||||||||||||||||||
Fair value | Unrealized losses | Number of positions | Fair value | Unrealized losses | Number of positions | Fair value | Unrealized losses | Number of positions | ||||||||||||||||||||||||
September 30, 2016 | ||||||||||||||||||||||||||||||||
Fixed maturities: | ||||||||||||||||||||||||||||||||
U.S. treasury securities and obligations of U.S. government agencies | $ | $ | ( | ) | $ | $ | $ | $ | ( | ) | ||||||||||||||||||||||
Corporate securities | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
U.S. government agencies mortgage-backed securities | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
Total fixed maturities | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
Equity securities: | ||||||||||||||||||||||||||||||||
Large-cap equity securities | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
Total temporarily impaired securities | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||
($ millions, except # of positions) | Less than 12 months | 12 months or more | Total | |||||||||||||||||||||||||||||
Fair value | Unrealized losses | Number of positions | Fair value | Unrealized losses | Number of positions | Fair value | Unrealized losses | Number of positions | ||||||||||||||||||||||||
December 31, 2015 | ||||||||||||||||||||||||||||||||
Fixed maturities: | ||||||||||||||||||||||||||||||||
U.S. treasury securities and obligations of U.S. government agencies | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||
Obligations of states and political subdivisions | ( | ) | ( | ) | ||||||||||||||||||||||||||||
Corporate securities | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
U.S. government agencies mortgage-backed securities | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
Total fixed maturities | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
Equity securities: | ||||||||||||||||||||||||||||||||
Large-cap equity securities | ( | ) | ( | ) | ||||||||||||||||||||||||||||
Small-cap equity securities | ( | ) | ( | ) | ||||||||||||||||||||||||||||
Total equity securities | ( | ) | ( | ) | ||||||||||||||||||||||||||||
Other invested assets | ( | ) | ( | ) | ||||||||||||||||||||||||||||
Total temporarily impaired securities | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||
($ millions) | Three months ended September 30 | Nine months ended September 30 | |||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Equity securities: | |||||||||||||||
Large-cap securities | $ | $ | $ | ( | ) | $ | |||||||||
Small-cap securities | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Fixed maturities: | ( | ) | |||||||||||||
Total other-than-temporary impairments | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
($ millions) | Amortized cost | Fair value | |||||
Due in 1 year or less | $ | $ | |||||
Due after 1 year through 5 years | |||||||
Due after 5 years through 10 years | |||||||
Due after 10 years | |||||||
U.S. government agencies mortgage-backed securities | |||||||
Total | $ | $ | |||||
($ millions) | Three months ended September 30 | Nine months ended September 30 | |||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Fixed maturities | $ | $ | $ | $ | |||||||||||
Equity securities | |||||||||||||||
Cash and cash equivalents, and other | |||||||||||||||
Investment income | |||||||||||||||
Investment expenses | |||||||||||||||
Net investment income | $ | $ | $ | $ | |||||||||||
($ millions) | Three months ended September 30 | Nine months ended September 30 | |||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Realized gains: | |||||||||||||||
Fixed maturities | $ | $ | $ | $ | |||||||||||
Equity securities | |||||||||||||||
Other invested assets | |||||||||||||||
Total realized gains | |||||||||||||||
Realized losses: | |||||||||||||||
Equity securities: | |||||||||||||||
Sales | ( | ) | ( | ) | ( | ) | |||||||||
OTTI | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Fixed maturities: | |||||||||||||||
OTTI | ( | ) | |||||||||||||
Total realized losses | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Net realized gains on investments | $ | $ | $ | $ | |||||||||||
Change in unrealized holding (losses) gains, net of tax: | |||||||||||||||
Fixed maturities | $ | ( | ) | $ | $ | $ | ( | ) | |||||||
Equity securities | ( | ) | ( | ) | |||||||||||
Other invested assets | ( | ) | ( | ) | |||||||||||
Deferred federal income tax liability | ( | ) | |||||||||||||
Change in net unrealized holding (losses) gains, net of tax | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | |||||
• | Level 1 includes observable inputs which reflect quoted prices for identical assets or liabilities in active markets at the measurement date. |
• | Level 2 includes observable inputs for assets or liabilities other than quoted prices included in Level 1, and it includes valuation techniques which use prices for similar assets and liabilities. |
• | Level 3 includes unobservable inputs which reflect the reporting entity’s estimates of the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). |
($ millions) | Total | Level 1 | Level 2 | Level 3 | |||||||||||
September 30, 2016 | |||||||||||||||
Fixed maturities: | |||||||||||||||
U.S. treasury securities and obligations of U.S. government agencies | $ | $ | $ | $ | |||||||||||
Obligations of states and political subdivisions | |||||||||||||||
Corporate securities | |||||||||||||||
U.S. government agencies mortgage-backed securities | |||||||||||||||
Total fixed maturities | |||||||||||||||
Equity securities: | |||||||||||||||
Large-cap securities | |||||||||||||||
Small-cap securities | |||||||||||||||
Total equity securities | |||||||||||||||
Other invested assets | |||||||||||||||
Total available-for-sale investments | $ | $ | $ | $ | |||||||||||
($ millions) | Total | Level 1 | Level 2 | Level 3 | |||||||||||
December 31, 2015 | |||||||||||||||
Fixed maturities: | |||||||||||||||
U.S. treasury securities and obligations of U.S. government agencies | $ | $ | $ | $ | |||||||||||
Obligations of states and political subdivisions | |||||||||||||||
Corporate securities | |||||||||||||||
U.S. government agencies mortgage-backed securities | |||||||||||||||
Total fixed maturities | |||||||||||||||
Equity securities: | |||||||||||||||
Large-cap securities | |||||||||||||||
Small-cap securities | |||||||||||||||
Total equity securities | |||||||||||||||
Other invested assets | |||||||||||||||
Total available-for-sale investments | $ | $ | $ | $ | |||||||||||
($ millions) | Fixed maturities | ||
Balance at January 1, 2016 | $ | ||
Total realized gains – included in earnings | |||
Total unrealized losses – included in other comprehensive income | |||
Purchases | |||
Sales | |||
Transfers into Level 3 | |||
Transfers out of Level 3 | |||
Balance at March 31, 2016 | $ | ||
Total realized gains – included in earnings | |||
Total unrealized losses – included in other comprehensive income | |||
Purchases | |||
Sales | |||
Transfers into Level 3 | |||
Transfers out of Level 3 | |||
Balance at June 30, 2016 | $ | ||
Total realized gains – included in earnings | |||
Total unrealized gains – included in other comprehensive income | |||
Purchases | |||
Sales | |||
Transfers into Level 3 | |||
Transfers out of Level 3 | |||
Balance at September 30, 2016 | $ | ||
($ millions) | Fixed maturities | ||
Balance at January 1, 2015 | $ | ||
Total realized gains – included in earnings | |||
Total unrealized gains – included in other comprehensive income | ( | ) | |
Purchases | |||
Sales | ( | ) | |
Transfers into Level 3 | |||
Transfers out of Level 3 | |||
Balance at December 31, 2015 | $ | ||
($ millions, except interest rates) | September 30, 2016 | December 31, 2015 | |||||||||||||||||||
Carrying value | Fair value | Interest rate | Carrying value | Fair value | Interest rate | ||||||||||||||||
Notes receivable from affiliate | $ | $ | % | $ | $ | % | |||||||||||||||
($ millions, except interest rates) | September 30, 2016 | December 31, 2015 | |||||||||||||||||||
Carrying value | Fair Value | Interest rate | Carrying value | Fair value | Interest rate | ||||||||||||||||
FHLB Loan due 2021: issued $21.5, September 2016 with fixed interest | $ | $ | % | $ | $ | % | |||||||||||||||
FHLB Loan due 2033: issued $85.0, July 2013 with fixed interest | % | % | |||||||||||||||||||
Affiliate Subordinated Debentures due 2033: issued $15.5, May 2003 with variable interest | % | % | |||||||||||||||||||
Total notes payable | $ | $ | $ | $ | |||||||||||||||||
($ millions) | Three months ended September 30 | Nine months ended September 30 | |||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Premiums earned: | |||||||||||||||
Assumed from external insurers and reinsurers | $ | $ | $ | $ | |||||||||||
Assumed under Pooling Arrangement | |||||||||||||||
Ceded to external insurers and reinsurers | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Ceded under Pooling Arrangement | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Net assumed premiums earned | $ | $ | $ | $ | |||||||||||
Losses and loss expenses incurred: | |||||||||||||||
Assumed from external insurers and reinsurers | $ | $ | $ | $ | |||||||||||
Assumed under Pooling Arrangement | |||||||||||||||
Ceded to external insurers and reinsurers | ( | ) | ( | ) | ( | ) | |||||||||
Ceded under Pooling Arrangement | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Net assumed losses and loss expenses incurred | $ | $ | $ | $ | |||||||||||
($ millions) | Three months ended September 30 | Nine months ended September 30 | |||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||||||
Amount at statutory rate | $ | % | $ | % | $ | ( | ) | % | $ | % | |||||||||||||||||
Tax-exempt interest and dividends received deduction | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||
Other, net | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Federal income tax (benefit) expense and effective rate | $ | ( | ) | ( | )% | $ | % | $ | ( | ) | % | $ | % | ||||||||||||||
($ millions) | Pension | Postretirement | Pension | Postretirement | |||||||||||||||||||||||||||
Three months ended September 30 | Nine months ended September 30 | ||||||||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||||||
Service cost | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Interest cost | |||||||||||||||||||||||||||||||
Expected return on plan assets | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||
Amortization of: | |||||||||||||||||||||||||||||||
Negative prior service cost | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||
Net actuarial loss | |||||||||||||||||||||||||||||||
Net periodic cost (benefit) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
($ millions) | Unrealized Gains and Losses on Available-for-Sale Securities | Benefit Plan Items | Total | |||||||||
Beginning balance at July 1, 2016 | $ | $ | ( | ) | $ | |||||||
Other comprehensive income before reclassifications | ||||||||||||
Amounts reclassified from AOCI (a) | ( | ) | ( | ) | ||||||||
Net current period other comprehensive (loss) income | ( | ) | ( | ) | ||||||||
Ending balance at September 30, 2016 | $ | $ | ( | ) | $ | |||||||
Beginning balance at July 1, 2015 | $ | $ | ( | ) | $ | |||||||
Other comprehensive loss before reclassifications | ( | ) | ( | ) | ||||||||
Amounts reclassified from AOCI (a) | ( | ) | ( | ) | ||||||||
Net current period other comprehensive (loss) income | ( | ) | ( | ) | ||||||||
Ending balance at September 30, 2015 | $ | $ | ( | ) | $ | |||||||
(a) | See separate table below for details about these reclassifications | |||||||||||
($ millions) | Unrealized Gains and Losses on Available-for-Sale Securities | Benefit Plan Items | Total | |||||||||
Beginning balance at January 1, 2016 | $ | $ | ( | ) | $ | |||||||
Other comprehensive income before reclassifications | ||||||||||||
Amounts reclassified from AOCI (a) | ( | ) | ( | ) | ||||||||
Net current period other comprehensive income | ||||||||||||
Ending balance at September 30, 2016 | $ | $ | ( | ) | $ | |||||||
Beginning balance at January 1, 2015 | $ | $ | ( | ) | $ | |||||||
Other comprehensive loss before reclassifications | ( | ) | ( | ) | ||||||||
Amounts reclassified from AOCI (a) | ( | ) | ( | ) | ||||||||
Net current period other comprehensive (loss) income | ( | ) | ( | ) | ||||||||
Ending balance at September 30, 2015 | $ | $ | ( | ) | $ | |||||||
(a) | See separate table below for details about these reclassifications |
($ millions) | |||||||||||
Details about Accumulated Other | Three months ended | Affected line item in the Condensed | |||||||||
Comprehensive Income Components | September 30 | Consolidated Statements of Income | |||||||||
2016 | 2015 | ||||||||||
Unrealized gains on available for sale securities | $ | $ | Realized gain on sale of securities | ||||||||
Total before tax | |||||||||||
( | ) | ( | ) | Tax expense | |||||||
Net of tax | |||||||||||
Amortization of benefit plan items | |||||||||||
Negative prior service cost | (b) | ||||||||||
Net actuarial loss | ( | ) | ( | ) | (b) | ||||||
( | ) | ( | ) | Total before tax | |||||||
Tax benefit | |||||||||||
( | ) | ( | ) | Net of tax | |||||||
Total reclassifications for the period | $ | $ | |||||||||
(b) | These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see pension and postretirement benefit plans footnote for additional details). | ||||||||||
($ millions) | |||||||||||
Details about Accumulated Other | Nine months ended | Affected line item in the Condensed | |||||||||
Comprehensive Income Components | September 30 | Consolidated Statements of Income | |||||||||
2016 | 2015 | ||||||||||
Unrealized gains on available for sale securities | $ | $ | Realized gain on sale of securities | ||||||||
Total before tax | |||||||||||
( | ) | ( | ) | Tax expense | |||||||
Net of tax | |||||||||||
Amortization of benefit plan items | |||||||||||
Negative prior service cost | (b) | ||||||||||
Net actuarial loss | ( | ) | ( | ) | (b) | ||||||
( | ) | ( | ) | Total before tax | |||||||
Tax benefit | |||||||||||
( | ) | Net of tax | |||||||||
Total reclassifications for the period | $ | $ | |||||||||
(b) | These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see pension and postretirement benefit plans footnote for additional details). |
($ and shares in millions, except per share amounts) | Three months ended September 30 | Nine months ended September 30 | |||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Numerator: | |||||||||||||||
Net income (loss) for basic earnings (loss) per common share | $ | $ | $ | ( | ) | $ | |||||||||
Denominator: | |||||||||||||||
Weighted average shares for basic net earnings (loss) per common share | |||||||||||||||
Effect of dilutive share-based awards | |||||||||||||||
Adjusted weighted average shares for diluted net earnings (loss) per common share | |||||||||||||||
Basic net earnings (loss) per common share | $ | $ | $ | ( | ) | $ | |||||||||
Diluted net earnings (loss) per common share | $ | $ | $ | ( | ) | $ | |||||||||
(shares in millions) | Three months ended September 30 | Nine months ended September 30 | |||||||||
2016 | 2015 | 2016 | 2015 | ||||||||
Total number of antidilutive options and awards | |||||||||||
($ millions) | Three months ended September 30 | Nine months ended September 30 | |||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenue from external sources: | |||||||||||||||
Insurance segments | |||||||||||||||
Personal insurance | $ | $ | $ | $ | |||||||||||
Business insurance | |||||||||||||||
Specialty insurance | |||||||||||||||
Total insurance segments | |||||||||||||||
Investment operations segment | |||||||||||||||
Net investment income | |||||||||||||||
Net realized capital gains | |||||||||||||||
Total investment operations segment | |||||||||||||||
All other | |||||||||||||||
Total revenue from external sources | |||||||||||||||
Intersegment revenue | |||||||||||||||
Total revenue | |||||||||||||||
Reconciling items: | |||||||||||||||
Eliminate intersegment revenues | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Total consolidated revenues | $ | $ | $ | $ | |||||||||||
Segment income before federal income tax: | |||||||||||||||
Insurance segments SAP underwriting income (loss) | |||||||||||||||
Personal insurance | $ | $ | $ | ( | ) | $ | |||||||||
Business insurance | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Specialty insurance | ( | ) | ( | ) | ( | ) | |||||||||
Total insurance segments | ( | ) | ( | ) | ( | ) | |||||||||
Investment operations segment | |||||||||||||||
Net investment income | |||||||||||||||
Net realized capital gains | |||||||||||||||
Total investment operations segment | |||||||||||||||
All other | ( | ) | |||||||||||||
Total segment income (loss) before tax expense | ( | ) | |||||||||||||
Reconciling items: | |||||||||||||||
GAAP expense adjustments | |||||||||||||||
Interest expense on corporate debt | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Corporate expenses | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Total reconciling items | ( | ) | ( | ) | ( | ) | |||||||||
Total consolidated income (loss) before federal income tax expense | $ | $ | $ | ( | ) | $ | |||||||||
STFC Pooled Companies: | |||
State Auto P&C | 51.0 | % | |
Milbank | 14.0 | ||
SA Ohio | — | ||
Total STFC Pooled Companies | 65.0 | % | |
State Auto Mutual Pooled Companies: | |||
State Auto Mutual | 34.5 | % | |
SA Wisconsin | — | ||
Meridian Security | — | ||
Patrons Mutual | 0.5 | ||
RIC | — | ||
Plaza | — | ||
American Compensation | — | ||
Bloomington Compensation | — | ||
Total State Auto Mutual Pooled Companies | 35.0 | % | |
($ millions, except per share amounts) | Three months ended September 30 | Nine months ended September 30 | |||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
GAAP Basis: | |||||||||||||||
Total revenues | $ | 352.8 | $ | 349.7 | $ | 1,040.5 | $ | 1,022.0 | |||||||
Income (loss) before federal income taxes | $ | 7.4 | $ | 29.9 | $ | (13.9 | ) | $ | 66.5 | ||||||
Net income (loss) | $ | 10.1 | $ | 20.7 | $ | (11.5 | ) | $ | 48.1 | ||||||
Basic earnings (loss) per share | $ | 0.24 | $ | 0.50 | $ | (0.28 | ) | $ | 1.17 | ||||||
Diluted earnings (loss) per share | $ | 0.24 | $ | 0.50 | $ | (0.28 | ) | $ | 1.16 | ||||||
Stockholders’ equity | $ | 907.8 | $ | 875.3 | |||||||||||
Return on average equity (LTM) | (0.9 | )% | 13.3 | % | |||||||||||
Book value per share | $ | 21.82 | $ | 21.28 | |||||||||||
Debt to capital ratio | 11.9 | % | 10.3 | % | |||||||||||
Cat loss and ALAE ratio | 2.5 | % | 2.1 | % | 6.8 | % | 4.9 | % | |||||||
Non-cat loss and LAE ratio | 68.8 | % | 62.8 | % | 67.6 | % | 61.4 | % | |||||||
Loss and LAE ratio | 71.3 | % | 64.9 | % | 74.4 | % | 66.3 | % | |||||||
Expense ratio | 33.7 | % | 34.2 | % | 33.5 | % | 33.7 | % | |||||||
Combined ratio | 105.0 | % | 99.1 | % | 107.9 | % | 100.0 | % | |||||||
Premium written growth | 3.5 | % | 17.1 | % | 1.6 | % | 15.9 | % | |||||||
Investment yield | 2.9 | % | 3.2 | % | 3.0 | % | 3.2 | % | |||||||
SAP Basis: | |||||||||||||||
Cat loss and ALAE ratio | 2.5 | % | 2.1 | % | 6.8 | % | 4.9 | % | |||||||
Non-cat loss and ALAE ratio | 63.7 | % | 56.8 | % | 61.7 | % | 55.1 | % | |||||||
ULAE ratio | 5.3 | % | 6.1 | % | 6.0 | % | 6.4 | % | |||||||
Loss and LAE ratio | 71.5 | % | 65.0 | % | 74.5 | % | 66.4 | % | |||||||
Expense ratio | 33.4 | % | 34.1 | % | 33.5 | % | 33.8 | % | |||||||
Combined ratio | 104.9 | % | 99.1 | % | 108.0 | % | 100.2 | % |
($ millions) | Twelve months ended September 30 | ||||
2016 | 2015 | ||||
Net premiums written to surplus | 1.6 | 1.7 |
($ millions) | Three months ended | ||||||||||||||||||||||
September 30, 2016 | |||||||||||||||||||||||
Personal | % Ratio | Business | % Ratio | Specialty | % Ratio | Total | % Ratio | ||||||||||||||||
Net written premiums | $ | 154.6 | $ | 114.5 | $ | 66.7 | $ | 335.8 | |||||||||||||||
Earned premiums | 145.5 | 115.0 | 65.3 | 325.8 | |||||||||||||||||||
Cat loss and ALAE | 4.7 | 3.2 | 3.3 | 2.9 | 0.1 | 0.2 | 8.1 | 2.5 | |||||||||||||||
Non-cat loss and ALAE | 89.5 | 61.6 | 76.8 | 66.8 | 41.3 | 63.2 | 207.6 | 63.7 | |||||||||||||||
ULAE | 7.5 | 5.1 | 7.0 | 6.1 | 2.5 | 3.9 | 17.0 | 5.3 | |||||||||||||||
Underwriting expenses | 41.2 | 26.6 | 45.4 | 39.7 | 25.5 | 38.3 | 112.1 | 33.4 | |||||||||||||||
SAP underwriting gain (loss) and SAP combined ratio | $ | 2.6 | 96.5 | $ | (17.5 | ) | 115.5 | $ | (4.1 | ) | 105.6 | $ | (19.0 | ) | 104.9 | ||||||||
($ millions) | Three months ended | ||||||||||||||||||||||
September 30, 2015 | |||||||||||||||||||||||
Personal | % Ratio | Business | % Ratio | Specialty | % Ratio | Total | % Ratio | ||||||||||||||||
Net written premiums | $ | 152.4 | $ | 122.1 | $ | 50.0 | $ | 324.5 | |||||||||||||||
Earned premiums | 147.2 | 119.2 | 53.3 | $ | 319.7 | ||||||||||||||||||
Cat loss and ALAE | 5.7 | 3.9 | 1.1 | 0.9 | — | 0.1 | 6.8 | 2.1 | |||||||||||||||
Non-cat loss and ALAE | 78.7 | 53.5 | 70.5 | 59.1 | 32.2 | 60.2 | 181.4 | 56.8 | |||||||||||||||
ULAE | 10.7 | 7.2 | 7.1 | 6.0 | 1.8 | 3.4 | 19.6 | 6.1 | |||||||||||||||
Underwriting expenses | 45.2 | 29.7 | 46.7 | 38.2 | 18.7 | 37.4 | 110.6 | 34.1 | |||||||||||||||
SAP underwriting gain (loss) and SAP combined ratio | $ | 6.9 | 94.3 | $ | (6.2 | ) | 104.2 | $ | 0.6 | 101.1 | $ | 1.3 | 99.1 |
($ millions) | Nine months ended | ||||||||||||||||||||||
September 30, 2016 | |||||||||||||||||||||||
Personal | % Ratio | Business | % Ratio | Specialty | % Ratio | Total | % Ratio | ||||||||||||||||
Net written premiums | $ | 444.8 | $ | 345.2 | $ | 196.2 | $ | 986.2 | |||||||||||||||
Earned premiums | 436.3 | 353.8 | 178.0 | 968.1 | |||||||||||||||||||
Cat loss and ALAE | 47.2 | 10.8 | 17.6 | 5.0 | 0.6 | 0.3 | 65.4 | 6.8 | |||||||||||||||
Non-cat loss and ALAE | 252.9 | 58.0 | 219.0 | 61.9 | 125.9 | 70.7 | 597.8 | 61.7 | |||||||||||||||
ULAE | 27.2 | 6.2 | 22.8 | 6.4 | 8.3 | 4.7 | 58.3 | 6.0 | |||||||||||||||
Underwriting expenses | 127.6 | 28.7 | 131.2 | 38.0 | 71.5 | 36.4 | 330.3 | 33.5 | |||||||||||||||
SAP underwriting loss and SAP combined ratio | $ | (18.6 | ) | 103.7 | $ | (36.8 | ) | 111.3 | $ | (28.3 | ) | 112.1 | $ | (83.7 | ) | 108.0 | |||||||
($ millions) | Nine months ended | ||||||||||||||||||||||
September 30, 2015 | |||||||||||||||||||||||
Personal | % Ratio | Business | % Ratio | Specialty | % Ratio | Total | % Ratio | ||||||||||||||||
Net written premiums | $ | 445.4 | $ | 368.5 | $ | 156.9 | $ | 970.8 | |||||||||||||||
Earned premiums | 445.4 | 355.3 | 145.8 | 946.5 | |||||||||||||||||||
Cat loss and ALAE | 33.2 | 7.5 | 13.4 | 3.8 | 0.2 | 0.1 | 46.8 | 4.9 | |||||||||||||||
Non-cat loss and ALAE | 233.8 | 52.5 | 204.2 | 57.4 | 83.3 | 57.2 | 521.3 | 55.1 | |||||||||||||||
ULAE | 34.7 | 7.7 | 19.5 | 5.5 | 5.8 | 4.1 | 60.0 | 6.4 | |||||||||||||||
Underwriting expenses | 129.6 | 29.1 | 137.5 | 37.3 | 60.8 | 38.8 | 327.9 | 33.8 | |||||||||||||||
SAP underwriting gain (loss) and SAP combined ratio | $ | 14.1 | 96.8 | $ | (19.3 | ) | 104.0 | $ | (4.3 | ) | 100.2 | $ | (9.5 | ) | 100.2 | ||||||||
($ millions) | Net Written Premiums | ||||||||||||||||||||
Three months ended September 30 | Nine months ended September 30 | ||||||||||||||||||||
Personal insurance segment: | 2016 | 2015 | % Change | 2016 | 2015 | % Change | |||||||||||||||
Personal auto | $ | 86.9 | $ | 85.4 | 1.8 | $ | 253.1 | $ | 254.1 | (0.4 | ) | ||||||||||
Homeowners | 59.3 | 59.3 | — | 165.5 | 166.6 | (0.7 | ) | ||||||||||||||
Other personal | 8.4 | 7.7 | 9.1 | 26.2 | 24.7 | 6.1 | |||||||||||||||
Total personal | $ | 154.6 | $ | 152.4 | 1.4 | $ | 444.8 | $ | 445.4 | (0.1 | ) | ||||||||||
Statutory Loss and LAE Ratios | ($ millions) | % | ||||||||||||||||||
Three months ended September 30 | Earned Premium | Cat Loss & ALAE | Non-Cat Loss & ALAE | Statutory Loss & LAE | Cat loss Ratio | Non-Cat Loss & ALAE Ratio | Total Loss and LAE Ratio | |||||||||||||
2016 | ||||||||||||||||||||
Personal insurance segment: | ||||||||||||||||||||
Personal auto | $ | 82.6 | $ | 1.5 | $ | 62.9 | $ | 64.4 | 1.8 | 76.2 | 78.0 | |||||||||
Homeowners | 54.3 | 2.0 | 22.7 | 24.7 | 3.8 | 41.6 | 45.4 | |||||||||||||
Other personal | 8.6 | 1.2 | 3.9 | 5.1 | 13.6 | 45.9 | 59.5 | |||||||||||||
Total personal | 145.5 | 4.7 | 89.5 | 94.2 | 3.2 | 61.6 | 64.8 | |||||||||||||
ULAE | — | — | — | 7.5 | — | — | 5.1 | |||||||||||||
Total Loss and LAE | $ | 145.5 | $ | 4.7 | $ | 89.5 | $ | 101.7 | 3.2 | 61.6 | 69.9 | |||||||||
2015 | ||||||||||||||||||||
Personal insurance segment: | ||||||||||||||||||||
Personal auto | $ | 84.2 | $ | 0.7 | $ | 55.2 | $ | 55.9 | 0.9 | 65.5 | 66.4 | |||||||||
Homeowners | 55.0 | 4.5 | 19.4 | 23.9 | 8.3 | 35.3 | 43.6 | |||||||||||||
Other personal | 8.0 | 0.5 | 4.1 | 4.6 | 5.4 | 52.1 | 57.5 | |||||||||||||
Total personal | 147.2 | 5.7 | 78.7 | 84.4 | 3.9 | 53.5 | 57.4 | |||||||||||||
ULAE | — | — | — | 10.7 | — | — | 7.2 | |||||||||||||
Total Loss and LAE | $ | 147.2 | $ | 5.7 | $ | 78.7 | $ | 95.1 | 3.9 | 53.5 | 64.6 |
Statutory Loss and LAE Ratios | ($ millions) | % | ||||||||||||||||||
Nine months ended September 30 | Earned Premium | Cat Loss & ALAE | Non-Cat Loss & ALAE | Statutory Loss & LAE | Cat loss Ratio | Non-Cat Loss & ALAE Ratio | Total Loss and LAE Ratio | |||||||||||||
2016 | ||||||||||||||||||||
Personal insurance segment: | ||||||||||||||||||||
Personal auto | $ | 247.3 | $ | 7.1 | $ | 180.7 | $ | 187.8 | 2.9 | 73.0 | 75.9 | |||||||||
Homeowners | 163.8 | 36.4 | 65.2 | 101.6 | 22.2 | 39.8 | 62.0 | |||||||||||||
Other personal | 25.2 | 3.7 | 7.0 | 10.7 | 14.6 | 28.0 | 42.6 | |||||||||||||
Total personal | 436.3 | 47.2 | 252.9 | 300.1 | 10.8 | 58.0 | 68.8 | |||||||||||||
ULAE | — | — | — | 27.2 | — | — | 6.2 | |||||||||||||
Total Loss and LAE | $ | 436.3 | $ | 47.2 | $ | 252.9 | $ | 327.3 | 10.8 | 58.0 | 75.0 | |||||||||
2015 | ||||||||||||||||||||
Personal insurance segment: | ||||||||||||||||||||
Personal auto | $ | 255.2 | $ | 4.4 | $ | 166.7 | $ | 171.1 | 1.7 | 65.3 | 67.0 | |||||||||
Homeowners | 166.1 | 26.9 | 59.5 | 86.4 | 16.2 | 35.8 | 52.0 | |||||||||||||
Other personal | 24.1 | 1.9 | 7.6 | 9.5 | 7.8 | 31.8 | 39.6 | |||||||||||||
Total personal | 445.4 | 33.2 | 233.8 | 267.0 | 7.5 | 52.5 | 60.0 | |||||||||||||
ULAE | — | — | — | 34.7 | — | — | 7.7 | |||||||||||||
Total Loss and LAE | $ | 445.4 | $ | 33.2 | $ | 233.8 | $ | 301.7 | 7.5 | 52.5 | 67.7 | |||||||||
($ millions) | Net Written Premiums | |||||||||||||||||||||
Three months ended September 30 | Nine months ended September 30 | |||||||||||||||||||||
Business insurance segment: | 2016 | 2015 | % Change | 2016 | 2015 | % Change | ||||||||||||||||
Commercial auto | $ | 20.6 | $ | 26.6 | (22.6 | ) | $ | 65.9 | $ | 79.5 | (17.1 | ) | ||||||||||
Commercial multi-peril | 29.5 | 30.4 | (3.0 | ) | 88.6 | 91.4 | (3.1 | ) | ||||||||||||||
Fire & allied lines | 19.0 | 19.0 | — | 54.6 | 56.1 | (2.7 | ) | |||||||||||||||
Other & product liability | 17.2 | 17.2 | — | 53.3 | 57.7 | (7.6 | ) | |||||||||||||||
Workers’ compensation | 24.0 | 24.7 | (2.8 | ) | 70.2 | 70.8 | (0.8 | ) | ||||||||||||||
Other commercial | 4.2 | 4.2 | — | 12.6 | 13.0 | (3.1 | ) | |||||||||||||||
Total business | $ | 114.5 | $ | 122.1 | (6.2 | ) | $ | 345.2 | $ | 368.5 | (6.3 | ) | ||||||||||
Statutory Loss and LAE Ratios | ($ millions) | % | ||||||||||||||||||||
Three months ended September 30 | Earned Premium | Cat Loss & ALAE | Non-Cat Loss & ALAE | Statutory Loss & LAE | Cat loss Ratio | Non-Cat Loss & ALAE Ratio | Total Loss and LAE Ratio | |||||||||||||||
2016 | ||||||||||||||||||||||
Business insurance segment: | ||||||||||||||||||||||
Commercial auto | $ | 23.1 | $ | 0.1 | $ | 19.0 | $ | 19.1 | 0.2 | 82.9 | 83.1 | |||||||||||
Commercial multi-peril | 29.7 | 2.2 | 16.6 | 18.8 | 7.6 | 55.5 | 63.1 | |||||||||||||||
Fire & allied lines | 18.2 | 0.9 | 13.1 | 14.0 | 4.9 | 72.3 | 77.2 | |||||||||||||||
Other & product liability | 17.6 | — | 11.6 | 11.6 | — | 66.0 | 66.0 | |||||||||||||||
Workers’ compensation | 22.3 | — | 14.6 | 14.6 | — | 65.4 | 65.4 | |||||||||||||||
Other commercial | 4.1 | 0.1 | 1.9 | 2.0 | 2.0 | 45.8 | 47.8 | |||||||||||||||
Total business | 115.0 | 3.3 | 76.8 | 80.1 | 2.9 | 66.8 | 69.7 | |||||||||||||||
ULAE | — | — | — | 7.0 | — | — | 6.1 | |||||||||||||||
Total Loss and LAE | $ | 115.0 | $ | 3.3 | $ | 76.8 | $ | 87.1 | 2.9 | 66.8 | 75.8 | |||||||||||
2015 | ||||||||||||||||||||||
Business insurance segment: | ||||||||||||||||||||||
Commercial auto | $ | 25.6 | $ | 0.1 | 17.0 | $ | 22.2 | $ | 22.3 | 0.2 | 87.1 | 87.3 | ||||||||||
Commercial multi-peril | 29.9 | 1.4 | 21.3 | 22.7 | 4.7 | 71.3 | 76.0 | |||||||||||||||
Fire & allied lines | 18.7 | (0.4 | ) | 2.2 | 1.8 | (1.8 | ) | 11.2 | 9.4 | |||||||||||||
Other & product liability | 18.4 | — | 9.8 | 9.8 | (0.1 | ) | 53.3 | 53.2 | ||||||||||||||
Workers’ compensation | 22.4 | — | 13.6 | 13.6 | — | 60.6 | 60.6 | |||||||||||||||
Other commercial | 4.2 | — | 1.4 | 1.4 | (0.3 | ) | 32.6 | 32.3 | ||||||||||||||
Total business | 119.2 | 1.1 | 70.5 | 71.6 | 0.9 | 59.1 | 60.0 | |||||||||||||||
ULAE | — | — | — | 7.1 | — | — | 6.0 | |||||||||||||||
Total Loss and LAE | $ | 119.2 | $ | 1.1 | $ | 70.5 | $ | 78.7 | 0.9 | 59.1 | 66.0 |
Statutory Loss and LAE Ratios | ($ millions) | % | ||||||||||||||||||
Nine months ended September 30 | Earned Premium | Cat Loss & ALAE | Non-Cat Loss & ALAE | Statutory Loss & LAE | Cat loss Ratio | Non-Cat Loss & ALAE Ratio | Total Loss and LAE Ratio | |||||||||||||
2016 | ||||||||||||||||||||
Business insurance segment: | ||||||||||||||||||||
Commercial auto | $ | 72.9 | $ | 1.0 | $ | 58.2 | $ | 59.2 | 1.3 | 80.0 | 81.3 | |||||||||
Commercial multi-peril | 89.6 | 8.4 | 49.4 | 57.8 | 9.4 | 55.1 | 64.5 | |||||||||||||
Fire & allied lines | 55.2 | 8.1 | 29.1 | 37.2 | 14.6 | 52.9 | 67.5 | |||||||||||||
Other & product liability | 53.6 | — | 33.7 | 33.7 | — | 62.9 | 62.9 | |||||||||||||
Workers’ compensation | 70.0 | — | 44.4 | 44.4 | — | 63.5 | 63.5 | |||||||||||||
Other commercial | 12.5 | 0.1 | 4.2 | 4.3 | 0.8 | 33.4 | 34.2 | |||||||||||||
Total business | 353.8 | 17.6 | 219.0 | 236.6 | 5.0 | 61.9 | 66.9 | |||||||||||||
ULAE | — | — | — | 22.8 | — | — | 6.4 | |||||||||||||
Total Loss and LAE | $ | 353.8 | $ | 17.6 | $ | 219.0 | $ | 259.4 | 5.0 | 61.9 | 73.3 | |||||||||
2015 | ||||||||||||||||||||
Business insurance segment: | ||||||||||||||||||||
Commercial auto | $ | 76.1 | $ | 0.4 | $ | 56.7 | $ | 57.1 | 0.5 | 74.6 | 75.1 | |||||||||
Commercial multi-peril | 89.8 | 6.6 | 53.7 | 60.3 | 7.3 | 59.9 | 67.2 | |||||||||||||
Fire & allied lines | 56.2 | 6.4 | 20.2 | 26.6 | 11.4 | 35.8 | 47.2 | |||||||||||||
Other & product liability | 54.5 | — | 30.1 | 30.1 | — | 55.2 | 55.2 | |||||||||||||
Workers’ compensation | 65.9 | — | 39.7 | 39.7 | — | 60.2 | 60.2 | |||||||||||||
Other commercial | 12.8 | — | 3.8 | 3.8 | 0.1 | 30.0 | 30.1 | |||||||||||||
Total business | 355.3 | 13.4 | 204.2 | 217.6 | 3.8 | 57.4 | 61.2 | |||||||||||||
ULAE | — | — | — | 19.5 | — | — | 5.5 | |||||||||||||
Total Loss and LAE | $ | 355.3 | $ | 13.4 | $ | 204.2 | $ | 237.1 | 3.8 | 57.4 | 66.7 | |||||||||
($ millions) | Net Written Premiums | ||||||||||||||||||||
Three months ended September 30 | Nine months ended September 30 | ||||||||||||||||||||
Specialty insurance segment: | 2016 | 2015 | % Change | 2016 | 2015 | % Change | |||||||||||||||
E&S property | $ | 7.8 | $ | 7.0 | 11.4 | $ | 31.6 | $ | 36.4 | (13.2 | ) | ||||||||||
E&S casualty | 31.6 | 19.4 | 62.9 | 75.9 | 47.4 | 60.1 | |||||||||||||||
Programs | 27.3 | 23.6 | 15.7 | 88.7 | 73.1 | 21.3 | |||||||||||||||
Total specialty | $ | 66.7 | $ | 50.0 | 33.4 | $ | 196.2 | $ | 156.9 | 25.0 | |||||||||||
Statutory Loss and LAE Ratios | ($ millions) | % | ||||||||||||||||||
Three months ended September 30 | Earned Premium | Cat Loss & ALAE | Non-Cat Loss & ALAE | Statutory Loss & LAE | Cat loss Ratio | Non-Cat Loss & ALAE Ratio | Total Loss and LAE Ratio | |||||||||||||
2016 | ||||||||||||||||||||
Specialty insurance segment: | ||||||||||||||||||||
E&S property | $ | 10.2 | $ | — | $ | 2.6 | $ | 2.6 | — | 25.2 | 25.2 | |||||||||
E&S casualty | 25.6 | — | 17.5 | 17.5 | — | 68.4 | 68.4 | |||||||||||||
Programs | 29.5 | 0.1 | 21.2 | 21.3 | 0.4 | 72.1 | 72.5 | |||||||||||||
Total specialty | 65.3 | 0.1 | 41.3 | 41.4 | 0.2 | 63.2 | 63.4 | |||||||||||||
ULAE | — | — | — | 2.5 | — | — | 3.9 | |||||||||||||
Total Loss and LAE | $ | 65.3 | $ | 0.1 | $ | 41.3 | $ | 43.9 | 0.2 | 63.2 | 67.3 | |||||||||
2015 | ||||||||||||||||||||
Specialty insurance segment: | ||||||||||||||||||||
E&S property | $ | 12.1 | $ | — | $ | 2.5 | $ | 2.5 | 0.3 | 19.9 | 20.2 | |||||||||
E&S casualty | 17.5 | — | 12.3 | 12.3 | — | 70.1 | 70.1 | |||||||||||||
Programs | 23.7 | — | 17.4 | 17.4 | 0.2 | 73.3 | 73.5 | |||||||||||||
Total specialty | 53.3 | — | 32.2 | 32.2 | 0.1 | 60.2 | 60.3 | |||||||||||||
ULAE | — | — | — | 1.8 | — | — | 3.4 | |||||||||||||
Total Loss and LAE | $ | 53.3 | $ | — | $ | 32.2 | $ | 34.0 | 0.1 | 60.2 | 63.7 | |||||||||
Statutory Loss and LAE Ratios | ($ millions) | % | ||||||||||||||||||
Nine months ended September 30 | Earned Premium | Cat Loss & ALAE | Non-Cat Loss & ALAE | Statutory Loss & LAE | Cat loss Ratio | Non-Cat Loss & ALAE Ratio | Total Loss and LAE Ratio | |||||||||||||
2016 | ||||||||||||||||||||
Specialty insurance segment: | ||||||||||||||||||||
E&S property | $ | 29.9 | $ | 0.4 | $ | 9.4 | $ | 9.8 | 1.2 | 31.6 | 32.8 | |||||||||
E&S casualty | 66.7 | — | 44.1 | 44.1 | — | 66.1 | 66.1 | |||||||||||||
Programs | 81.4 | 0.2 | 72.4 | 72.6 | 0.2 | 89.0 | 89.2 | |||||||||||||
Total specialty | 178.0 | 0.6 | 125.9 | 126.5 | 0.3 | 70.7 | 71.0 | |||||||||||||
ULAE | — | — | — | 8.3 | — | — | 4.7 | |||||||||||||
Total Loss and LAE | $ | 178.0 | $ | 0.6 | $ | 125.9 | $ | 134.8 | 0.3 | 70.7 | 75.7 | |||||||||
2015 | ||||||||||||||||||||
Specialty insurance segment: | ||||||||||||||||||||
E&S property | $ | 37.5 | $ | 0.1 | $ | 9.2 | $ | 9.3 | 0.3 | 24.4 | 24.7 | |||||||||
E&S casualty | 43.5 | — | 28.4 | 28.4 | — | 65.2 | 65.2 | |||||||||||||
Programs | 64.8 | 0.1 | 45.7 | 45.8 | 0.2 | 70.5 | 70.7 | |||||||||||||
Total specialty | 145.8 | 0.2 | 83.3 | 83.5 | 0.1 | 57.2 | 57.3 | |||||||||||||
ULAE | — | — | — | 5.8 | — | — | 4.1 | |||||||||||||
Total Loss and LAE | $ | 145.8 | $ | 0.2 | $ | 83.3 | $ | 89.3 | 0.1 | 57.2 | 61.4 | |||||||||
($ millions) | Three months ended September 30 | Nine months ended September 30 | ||||||||||||||||||||||
2016 | 2015 | $ Change | 2016 | 2015 | $ Change | |||||||||||||||||||
Redundancy /(Deficiency) | Redundancy /(Deficiency) | |||||||||||||||||||||||
Non-cat loss and ALAE: | ||||||||||||||||||||||||
Personal insurance segment: | ||||||||||||||||||||||||
Personal auto | $ | (0.6 | ) | $ | (2.0 | ) | $ | 1.4 | $ | (8.5 | ) | $ | (1.3 | ) | $ | (7.2 | ) | |||||||
Homeowners | (0.2 | ) | 0.3 | (0.5 | ) | — | 1.8 | (1.8 | ) | |||||||||||||||
Other personal | — | (0.1 | ) | 0.1 | 0.1 | 0.3 | (0.2 | ) | ||||||||||||||||
Personal segment | (0.8 | ) | (1.8 | ) | 1.0 | (8.4 | ) | 0.8 | (9.2 | ) | ||||||||||||||
Business insurance segment: | ||||||||||||||||||||||||
Commercial auto | (0.3 | ) | (2.2 | ) | 1.9 | (4.8 | ) | (3.8 | ) | (1.0 | ) | |||||||||||||
Commercial multi-peril | (1.1 | ) | 0.6 | (1.7 | ) | (2.4 | ) | 0.7 | (3.1 | ) | ||||||||||||||
Fire & allied lines | (0.6 | ) | 0.5 | (1.1 | ) | (2.3 | ) | 0.7 | (3.0 | ) | ||||||||||||||
Other & product liability | 0.4 | 3.3 | (2.9 | ) | 2.5 | 6.5 | (4.0 | ) | ||||||||||||||||
Workers' compensation | 1.4 | 1.1 | 0.3 | 2.0 | 3.5 | (1.5 | ) | |||||||||||||||||
Other commercial | — | 0.1 | (0.1 | ) | 0.4 | 0.7 | (0.3 | ) | ||||||||||||||||
Business segment | (0.2 | ) | 3.4 | (3.6 | ) | (4.6 | ) | 8.3 | (12.9 | ) | ||||||||||||||
Specialty insurance segment: | ||||||||||||||||||||||||
E&S property | 0.1 | 1.2 | (1.1 | ) | (1.1 | ) | 1.7 | (2.8 | ) | |||||||||||||||
E&S casualty | (1.1 | ) | (1.8 | ) | 0.7 | (3.4 | ) | (0.2 | ) | (3.2 | ) | |||||||||||||
Programs | (0.8 | ) | (1.9 | ) | 1.1 | (13.4 | ) | (4.5 | ) | (8.9 | ) | |||||||||||||
Specialty segment | (1.8 | ) | (2.5 | ) | 0.7 | (17.9 | ) | (3.0 | ) | (14.9 | ) | |||||||||||||
Cat loss and ALAE | 0.3 | 0.1 | 0.2 | 1.3 | 0.6 | 0.7 | ||||||||||||||||||
ULAE | (0.7 | ) | 1.8 | (2.5 | ) | (3.8 | ) | 5.5 | (9.3 | ) | ||||||||||||||
Total | $ | (3.2 | ) | $ | 1.0 | $ | (4.2 | ) | $ | (33.4 | ) | $ | 12.2 | $ | (45.6 | ) | ||||||||
($ millions) | September 30, 2016 | December 31, 2015 | $ Change | ||||||||
Personal insurance segment: | |||||||||||
Personal auto | $ | 192.1 | $ | 182.1 | $ | 10.0 | |||||
Homeowners | 55.0 | 37.2 | 17.8 | ||||||||
Other personal | 8.6 | 7.7 | 0.9 | ||||||||
Total personal | 255.7 | 227.0 | 28.7 | ||||||||
Business insurance segment: | |||||||||||
Commercial auto | 104.7 | 97.1 | 7.6 | ||||||||
Commercial multi-peril | 119.1 | 109.1 | 10.0 | ||||||||
Fire & allied lines | 26.1 | 17.4 | 8.7 | ||||||||
Other & product liability | 169.9 | 161.2 | 8.7 | ||||||||
Workers’ compensation | 181.8 | 167.3 | 14.5 | ||||||||
Other commercial | 2.3 | 1.5 | 0.8 | ||||||||
Total business | 603.9 | 553.6 | 50.3 | ||||||||
Specialty insurance segment: | |||||||||||
E&S property | 22.8 | 21.4 | 1.4 | ||||||||
E&S casualty | 125.9 | 96.6 | 29.3 | ||||||||
Programs | 153.2 | 148.5 | 4.7 | ||||||||
Total specialty | 301.9 | 266.5 | 35.4 | ||||||||
Total losses and loss expenses payable, net of reinsurance recoverable on losses and loss expenses payable | $ | 1,161.5 | $ | 1,047.1 | $ | 114.4 | |||||
($ millions) | September 30, 2016 | % of Total | December 31, 2015 | % of Total | ||||||||
Cash and cash equivalents | $ | 69.5 | 2.6 | $ | 58.1 | 2.3 | ||||||
Fixed maturities, at fair value: | ||||||||||||
Fixed maturities | 1,996.7 | 74.7 | 1,856.7 | 73.4 | ||||||||
Treasury inflation-protected securities | 146.6 | 5.5 | 144.0 | 5.7 | ||||||||
Total fixed maturities | 2,143.3 | 80.2 | 2,000.7 | 79.1 | ||||||||
Notes receivable from affiliate (a) | 70.0 | 2.6 | 70.0 | 2.8 | ||||||||
Equity securities, at fair value: | ||||||||||||
Large-cap securities | 225.6 | 8.4 | 241.0 | 9.5 | ||||||||
Small-cap securities | 71.9 | 2.7 | 69.6 | 2.8 | ||||||||
Total equity securities | 297.5 | 11.1 | 310.6 | 12.3 | ||||||||
Other invested assets, at fair value: | ||||||||||||
International funds | 80.7 | 3.0 | 77.0 | 3.0 | ||||||||
Other invested assets | 9.0 | 0.3 | 8.1 | 0.3 | ||||||||
Total other invested assets, at fair value | 89.7 | 3.3 | 85.1 | 3.3 | ||||||||
Other invested assets, at cost | 5.4 | 0.2 | 5.3 | 0.2 | ||||||||
Total portfolio | $ | 2,675.4 | 100.0 | $ | 2,529.8 | 100.0 | ||||||
(a) | In May 2009, we entered into two separate Credit Agreements with State Auto Mutual. Under these Credit Agreements, State Auto Mutual borrowed a total of $70.0 million from us on an unsecured basis. Interest is payable semi-annually at a fixed annual interest rate of 7.00%. Principal is payable May 2019. |
($ millions) | Amortized cost | Fair value | |||||
Due in 1 year or less | $ | 67.1 | $ | 68.1 | |||
Due after 1 year through 5 years | 564.0 | 579.4 | |||||
Due after 5 years through 10 years | 275.3 | 286.1 | |||||
Due after 10 years | 584.9 | 618.8 | |||||
U.S. government agencies mortgage-backed securities | 569.7 | 590.9 | |||||
Total | $ | 2,061.0 | $ | 2,143.3 | |||
($ millions) | Three months ended | Nine months ended | |||||||||||||
September 30 | September 30 | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Gross investment income: | |||||||||||||||
Fixed maturities | $ | 15.4 | $ | 16.1 | $ | 47.0 | $ | 46.4 | |||||||
Equity securities | 1.3 | 1.4 | 4.3 | 4.7 | |||||||||||
Other | 1.4 | 1.6 | 4.1 | 4.3 | |||||||||||
Total gross investment income | 18.1 | 19.1 | 55.4 | 55.4 | |||||||||||
Less: Investment expenses | 0.5 | 0.4 | 1.3 | 1.5 | |||||||||||
Net investment income | $ | 17.6 | $ | 18.7 | $ | 54.1 | $ | 53.9 | |||||||
Average invested assets (at cost) | $ | 2,427.3 | $ | 2,311.5 | $ | 2,405.7 | $ | 2,268.7 | |||||||
Annualized investment yield | 2.9 | % | 3.2 | % | 3.0 | % | 3.2 | % | |||||||
Annualized investment yield, after tax | 2.2 | % | 2.5 | % | 2.3 | % | 2.4 | % | |||||||
Net investment income, after tax | $ | 13.1 | $ | 14.3 | $ | 40.7 | $ | 41.6 | |||||||
Effective tax rate | 25.5 | % | 23.7 | % | 24.8 | % | 22.8 | % |
($ in millions) | Three months ended September 30 | Nine months ended September 30 | |||||||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||||||||||
Realized gains (losses) | Proceeds received on sale | Realized gains (losses) | Proceeds received on sale | Realized gains (losses) | Proceeds received on sale | Realized gains (losses) | Proceeds received on sale | ||||||||||||||||||||||||
Realized gains: | |||||||||||||||||||||||||||||||
Fixed maturities | $ | — | $ | 11.6 | $ | 2.9 | $ | 73.8 | $ | 2.1 | $ | 138.0 | $ | 4.4 | $ | 142.7 | |||||||||||||||
Equity securities | 9.9 | 49.0 | 11.8 | 76.2 | 20.6 | 109.5 | 21.8 | 111.3 | |||||||||||||||||||||||
Other invested assets | — | 0.3 | — | 0.2 | 0.1 | 0.7 | 0.1 | 0.5 | |||||||||||||||||||||||
Total realized gains | 9.9 | 60.9 | 14.7 | 150.2 | 22.8 | 248.2 | 26.3 | 254.5 | |||||||||||||||||||||||
Realized losses: | |||||||||||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||||||||
Sales | — | (0.1 | ) | (0.4 | ) | 1.4 | (0.8 | ) | 4.4 | (1.1 | ) | 6.1 | |||||||||||||||||||
OTTI | (1.1 | ) | — | (3.5 | ) | — | (3.1 | ) | — | (4.8 | ) | — | |||||||||||||||||||
Fixed maturities | |||||||||||||||||||||||||||||||
OTTI | — | — | — | — | (2.3 | ) | — | — | — | ||||||||||||||||||||||
Total realized losses | (1.1 | ) | (0.1 | ) | (3.9 | ) | 1.4 | (6.2 | ) | 4.4 | (5.9 | ) | 6.1 | ||||||||||||||||||
Net realized gains on investments | $ | 8.8 | $ | 60.8 | $ | 10.8 | $ | 151.6 | $ | 16.6 | $ | 252.6 | $ | 20.4 | $ | 260.6 | |||||||||||||||
($ millions, except # of positions) | Three months ended September 30 | Nine months ended September 30 | |||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||||||
Number of positions | Total impairment | Number of positions | Total impairment | Number of positions | Total impairment | Number of positions | Total impairment | ||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||||
Large-cap securities | — | $ | — | — | $ | — | 1 | $ | (0.2 | ) | — | $ | — | ||||||||||||||
Small-cap securities | 8 | (1.1 | ) | 22 | (3.5 | ) | 22 | (2.9 | ) | 36 | (4.8 | ) | |||||||||||||||
Fixed maturities | — | — | — | — | 1 | (2.3 | ) | — | — | ||||||||||||||||||
Total other-than-temporary impairments | 8 | $ | (1.1 | ) | 22 | $ | (3.5 | ) | 24 | $ | (5.4 | ) | 36 | $ | (4.8 | ) | |||||||||||
($ millions, except # of positions) | Cost or amortized cost | Gross unrealized holding gains | Number of gain positions | Gross unrealized holding losses | Number of loss positions | Fair value | |||||||||||||||
Fixed maturities: | |||||||||||||||||||||
U.S. treasury securities and obligations of U.S. government agencies | $ | 316.8 | $ | 14.3 | 35 | $ | (0.2 | ) | 8 | $ | 330.9 | ||||||||||
Obligations of states and political subdivisions | 664.1 | 34.5 | 188 | — | — | 698.6 | |||||||||||||||
Corporate securities | 510.4 | 13.1 | 81 | (0.6 | ) | 10 | 522.9 | ||||||||||||||
U.S. government agencies mortgage-backed securities | 569.7 | 22.4 | 75 | (1.2 | ) | 20 | 590.9 | ||||||||||||||
Total fixed maturities | 2,061.0 | 84.3 | 379 | (2.0 | ) | 38 | 2,143.3 | ||||||||||||||
Equity securities: | |||||||||||||||||||||
Large-cap securities | 193.1 | 37.1 | 37 | (4.6 | ) | 16 | 225.6 | ||||||||||||||
Small-cap securities | 53.0 | 18.9 | 67 | — | — | 71.9 | |||||||||||||||
Total equity securities | 246.1 | 56.0 | 104 | (4.6 | ) | 16 | 297.5 | ||||||||||||||
Other invested assets | 57.1 | 32.6 | 2 | — | — | 89.7 | |||||||||||||||
Total available-for-sale investments | $ | 2,364.2 | $ | 172.9 | 485 | $ | (6.6 | ) | 54 | $ | 2,530.5 | ||||||||||
($ millions) | September 30, 2016 | December 31, 2015 | $ Change | ||||||||
Available-for-sale investments: | |||||||||||
Unrealized holding gains: | |||||||||||
Fixed maturities | $ | 82.3 | $ | 27.8 | $ | 54.5 | |||||
Equity securities | 51.4 | 45.4 | 6.0 | ||||||||
Other invested assets | 32.6 | 28.2 | 4.4 | ||||||||
Unrealized gains | 166.3 | 101.4 | 64.9 | ||||||||
Net deferred federal income tax liability | (55.7 | ) | (32.9 | ) | (22.8 | ) | |||||
Unrealized gains, net of tax | $ | 110.6 | $ | 68.5 | $ | 42.1 | |||||
($ millions) | Three months ended September 30 | Nine months ended September 30 | |||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Income (loss) before federal income taxes | $ | 7.4 | $ | 29.9 | $ | (13.9 | ) | $ | 66.5 | ||||||
Current tax (benefit) expense | (1.5 | ) | 2.7 | (1.5 | ) | 3.3 | |||||||||
Deferred tax (benefit) expense | (1.2 | ) | 6.5 | (0.9 | ) | 15.1 | |||||||||
Total federal income tax (benefit) expense | (2.7 | ) | 9.2 | (2.4 | ) | 18.4 | |||||||||
Net income (loss) | $ | 10.1 | $ | 20.7 | $ | (11.5 | ) | $ | 48.1 | ||||||
1. | Information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission; |
2. | Information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure; and |
3. | Our disclosure controls and procedures are effective in timely making known to them material information required to be included in our periodic filings with the Securities and Exchange Commission. |
Exhibit No. | Description of Exhibits | ||
10.01 | Application for Callable Advance signed September 2, 2016 by State Auto Property & Casualty Insurance Company with respect to the Blanket Security Agreement effective February 15, 2013 between State Auto Property & Casualty Insurance Company and the Federal Home Loan Bank of Cincinnati | ||
31.01 | CEO certification required by Section 302 of Sarbanes Oxley Act of 2002 | ||
31.02 | CFO certification required by Section 302 of Sarbanes Oxley Act of 2002 | ||
32.01 | CEO certification required by Section 906 of Sarbanes Oxley Act of 2002 | ||
32.02 | CFO certification required by Section 906 of Sarbanes Oxley Act of 2002 | ||
101.INS | 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 Document | ||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | ||
101.DEF | XBRL Taxonomy Definition Linkbase Document | ||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | ||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
State Auto Financial Corporation | |
Date: November 7, 2016 | /s/ Steven E. English |
Steven E. English | |
Chief Financial Officer | |
(Duly Authorized Officer and | |
Principal Financial Officer) |
APPLICATION FOR CALLABLE ADVANCE | |||||
For FHLB use only | |||||
FEDERAL HOME LOAN BANK OF CINCINNATI | Commitment # | ||||
P. O. BOX 598 | Commencement | ||||
CINCINNATI, OHIO 45201 | Expiration | ||||
Credit Operations fax: 513-852-5747 | Rate | ||||
ý | SAME DAY FUNDING ¨ NEXT DAY FUNDING ¨ SKIP DAY FUNDING |
¨ | COMMITMENT OPTION 1: GUARANTEE FUNDS ONLY, OPTIONAL TAKEDOWN: No fee charged for a 90 day commitment. The Bank will offer extended commitment periods from 91 days to 365 days for a flat fee of 10 basis points based on the commitment amount and payable on the date of commitment. |
¨ | COMMITMENT OPTION 2: GUARANTEE FUNDS AND RATE, MANDATORY TAKEDOWN (FORMULA BASED FEE): The fee is payable at the time of commitment and is non-refundable if the funds are drawn down prior to the expiration of the commitment. Funds will be automatically credited to the member's DDA on the last day of the commitment if not drawn prior to that date. The fee is calculated using the following: Fee = Advance Amount * (Advance rate for term closest to, but greater than, or equal to, the advance term plus commitment period - FHLB Deposit Rate for Term of Commitment) * (Commitment Term/365) ***Minimum Fee of $25.00*** Commitment Expiration Date_____________________________ |
¨ | COMMITMENT OPTION 3: GUARANTEE FUNDS AND RATE, MANDATORY TAKEDOWN (MARKET FEE): The fees charged for the commitments are based upon the cost in the open market of an option of similar term and strike price of an instrument of similar maturity. Commitments are available for any period up to 365 days. The fee is payable at the time of commitment and is non-refundable if the funds are drawn down prior to the expiration of the commitment. To receive funding prior to commitment expiration date, member must provide the Bank with notification by 10:00 A.M., Eastern Standard Time, two London and New York business days prior to the desired disbursement date. Commitment Expiration Date___________________. |
¨ | COMMITMENT OPTION 4: GUARANTEE FUNDS AND RATE, OPTIONAL TAKEDOWN: The fees charged for the commitments are based upon the cost in the open market of an option of similar term and strike price of an instrument of similar maturity. Commitments are available for any period up to 365 days with no takedown restrictions. The non-refundable fee is payable at the time of commitment. To receive funding prior to commitment expiration date, member must provide the Bank with notification by 10:00 A.M., Eastern Standard Time, two London and New York business days prior to the desired disbursement date. Commitment Expiration Date___________________. |
1. | The maturity term of the callable advance is 5 years. |
2. | The advance may be "called" (prepaid) by the association without a prepayment fee on the 3rd anniversary date of the advance, and each of the succeeding six (6) month anniversary dates thereafter. THE MEMBER MUST GIVE THE BANK NOTICE OF THE INTENT TO "CALL" (PREPAY) THE ADVANCE WITHOUT A PREPAYMENT FEE AT LEAST TWENTY (20) DAYS PRIOR TO ANY ANNIVERSARY DATE AS DESCRIBED ABOVE. If the anniversary date falls on a Saturday, Sunday, or holiday, the anniversary date will be considered to be the business day prior to the actual anniversary date. |
3. | Callable advances are prepayable at any time. If a callable advance is prepaid on any date other than a "call" date as outlined above, the fee will be 100% of the lesser of the following two values: |
a. | The present value of the lost cash flow to the Bank based on the difference between the contract rate on the advance and the current yield for a noncallable Federal Home Loan Bank security with the same final maturity as that of the original advance (the discount rate for calculating the present value will be the current yield for such a noncallable Federal Home Loan Bank security) or |
b. | The present value of the lost cash flow to the Bank based on the difference between the contract rate on the advance and the current yield for a noncallable Federa1 Home Loan Bank security with a final maturity equal to the call date of the original advance (the discount rate for calculating the present value will be the current yield for such a noncallable Federal Home Loan Bank security). |
4. | Interest Calculation: The interest on the advance is calculated on the opening balance on an actual/actual basis, using the effective rate at the time of disbursement. |
5. | This loan is subject to the Bank's current Credit Policy, in effect at the time of issuance of the commitment, and which the Borrower acknowledges he is fully familiar with, as well as any subsequent amendments of such Credit Policy. |
State Auto Property & Casualty Insurance Co. | Columbus, Ohio | |
(Name of FHLB Bank member) | (City, State) | |
/s/ Matthew R. Pollak | /s/ Larry Adeleye | |
(Authorized Signature) | (Authorized Signature) | |
Matthew R. Pollak | Lawrence A. Adeleye | |
(Typed Name of Authorized Signature) | (Typed Name of Authorized Signature) |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors: |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 7, 2016 | /s/ Michael E. LaRocco |
Michael E. LaRocco, Chief Executive Officer | |
(Principal executive officer) |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors: |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 7, 2016 | /s/ Steven E. English |
Steven E. English, Chief Financial Officer | |
(Principal financial officer) |
/s/ Michael E. LaRocco | |
Michael E. LaRocco | |
Chief Executive Officer | |
November 7, 2016 |
/s/ Steven E. English | |
Steven E. English | |
Chief Financial Officer | |
November 7, 2016 |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Oct. 28, 2016 |
|
Document Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | State Auto Financial CORP | |
Entity Central Index Key | 0000874977 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding (shares) | 41,742,438 |
Condensed Consolidated Statements of Income (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
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Income Statement [Abstract] | ||||
Earned premiums, from affiliates | $ 121.4 | $ 112.2 | $ 352.4 | $ 320.5 |
Net investment income, from affiliate | 1.3 | 1.3 | 3.7 | 3.7 |
Losses and loss expenses, from affiliates | 100.9 | 67.4 | 281.4 | 200.9 |
Net Acquisition and Operating Expenses, from affiliates | 73.9 | 52.8 | 217.0 | 188.9 |
Interest Expense Debt To Affiliates | $ 0.6 | $ 0.5 | ||
Interest Paid To Affiliates | $ 0.2 | $ 0.1 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
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Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ 10.1 | $ 20.7 | $ (11.5) | $ 48.1 |
Net unrealized holding gains (losses) on investments: | ||||
Unrealized holding gains (losses) | 6.3 | (24.5) | 81.5 | (46.1) |
Reclassification adjustments for gains realized in net income | (8.8) | (10.8) | (16.6) | (20.4) |
Income tax (expense) benefit | 0.8 | 12.4 | (22.8) | 23.3 |
Total net unrealized holding gains (losses) on investments | (1.7) | (22.9) | 42.1 | (43.2) |
Reclassification adjustments for amortization to statements of income: | ||||
Negative prior service cost | (1.3) | (1.3) | (4.1) | (4.1) |
Net actuarial loss | 2.4 | 2.8 | 7.1 | 8.6 |
Income tax expense | (0.4) | (0.6) | (1.0) | (1.6) |
Total net unrecognized benefit plan obligations | 0.7 | 0.9 | 2.0 | 2.9 |
Other comprehensive income (loss) | (1.0) | (22.0) | 44.1 | (40.3) |
Comprehensive income | $ 9.1 | $ (1.3) | $ 32.6 | $ 7.8 |
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Statement of Cash Flows [Abstract] | ||
Interest Expense Debt To Affiliates | $ 0.6 | $ 0.5 |
Basis of Presentation |
9 Months Ended |
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Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of State Auto Financial Corporation and Subsidiaries (“State Auto Financial” or the “Company”) have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements. In the opinion of the Company, all adjustments (consisting of normal, recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine month period ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. The balance sheet at December 31, 2015 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2015 (the “2015 Form 10-K”). Capitalized terms used herein and not otherwise defined shall have the meaning ascribed to them in the 2015 Form 10-K. Adoption of Recent Accounting Pronouncements Simplifying the Presentation of Debt Issuance Costs The amendments in this guidance simplify the presentation of debt issuance costs by requiring them to be presented in the balance sheet as a direct deduction from the carrying amount of the related recognized debt liability, consistent with debt discounts. The Company adopted this guidance at January 1, 2016 on a retrospective basis and it resulted in a $0.3 million decrease to notes payable and accrued investment income and other assets at December 31, 2015. Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) The amendments in this guidance remove the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The amendments also remove the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. Rather, those disclosures are limited to investments for which the entity has elected to measure the fair value using that practical expedient. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years and should be applied retrospectively to all periods presented. The Company adopted this guidance at January 1, 2016 and it did not have a material impact on the condensed consolidated financial statements. Pending Adoption of Recent Accounting Pronouncements Improvements to Employee Share-Based Payment Accounting The amendments in this guidance simplify the accounting for share-based payment award transactions including: income tax consequences, classification of awards as either equity or liabilities, classification of excess tax benefits, and classification on the statement of cash flows. The guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years, and early adoption is permitted. The Company is currently evaluating the requirements of the guidance and has not yet determined its effect on the Company’s results of operations, financial position or liquidity.
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | Investments The following tables set forth the cost or amortized cost and fair value of available-for-sale securities by lot at September 30, 2016 and December 31, 2015:
The following tables set forth the Company’s gross unrealized losses and fair value on its investments by lot, aggregated by investment category and length of time for individual securities that have been in a continuous unrealized loss position at September 30, 2016 and December 31, 2015:
The Company reviewed its investments at September 30, 2016, and determined that no additional other-than-temporary impairment existed in the gross unrealized holding losses other than those listed in the table below. The following table sets forth the realized losses related to other-than-temporary impairments on the Company’s investment portfolio recognized for the three and nine months ended September 30, 2016 and 2015:
The Company regularly monitors its investments that have fair values less than cost or amortized cost for signs of other-than-temporary impairment, an assessment that requires significant management judgment regarding the evidence known. Such judgments could change in the future as more information becomes known, which could negatively impact the amounts reported. Among the factors that management considers for fixed maturity securities are the financial condition of the issuer including receipt of scheduled principal and interest cash flows, and intent to sell, including if it is more likely than not that the Company will be required to sell the investments before recovery. When a fixed maturity has been determined to have an other-than-temporary impairment, the impairment charge is separated into an amount representing the credit loss, which is recognized in earnings as a realized loss, and the amount related to non-credit factors, which is recognized in accumulated other comprehensive income. Future increases or decreases in fair value, if not other-than-temporary, are included in accumulated other comprehensive income. Among the factors that management considers for equity securities and other invested assets are the length of time and/or the significance of decline below cost, the Company’s ability and intent to hold these securities through their recovery periods, the current financial condition of the issuer and its future business prospects, and the ability of the market value to recover to cost in the near term. When an equity security or other invested asset has been determined to have a decline in fair value that is other-than-temporary, the cost basis of the security is adjusted to fair value. This results in a charge to earnings as a realized loss, which is not reversed for subsequent recoveries in fair value. Future increases or decreases in fair value, if not other-than-temporary, are included in accumulated other comprehensive income. The following table sets forth the amortized cost and fair value of available-for-sale fixed maturities by contractual maturity at September 30, 2016:
Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay the obligations with or without call or prepayment penalties. At September 30, 2016, State Auto P&C had U.S. government agencies mortgage-backed fixed maturity securities, with a carrying value of approximately $106.5 million, that were pledged as collateral for the FHLB Loans (as defined in Note 3). In accordance with the terms of the FHLB Loans, State Auto P&C retains all rights regarding these pledged securities. Fixed maturities with fair values of $9.2 million and $8.8 million were on deposit with insurance regulators as required by law at September 30, 2016 and December 31, 2015, respectively. The Company retains all rights regarding these securities. The following table sets forth the components of net investment income for the three and nine months ended September 30, 2016 and 2015:
The Company’s current investment strategy does not rely on the use of derivative financial instruments. Proceeds on sales of available-for-sale securities were $252.6 million and $260.6 million for the nine months ended September 30, 2016 and 2015, respectively. The following table sets forth the realized and unrealized holding gains (losses) on the Company’s investment portfolio for the three and nine months ended September 30, 2016 and 2015:
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Fair Value of Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments Below is the fair value hierarchy that categorizes into three levels the inputs to valuation techniques that are used to measure fair value:
The Company utilizes one nationally recognized pricing service to estimate the majority of its available-for-sale investment portfolio’s fair value. The Company obtains one price per security and the processes and control procedures employed by the Company are designed to ensure the value is accurately recorded on an unadjusted basis. Through discussions with the pricing service, the Company gains an understanding of the methodologies used to price the different types of securities, that the data and the valuation methods utilized are appropriate and consistently applied, and that the assumptions are reasonable and representative of fair value. To validate the reasonableness of the valuations obtained from the pricing service, the Company compares to other fair value pricing information gathered from other independent pricing sources. At September 30, 2016 and December 31, 2015, the Company did not adjust any of the prices received from the pricing service. Transfers between level categorizations may occur due to changes in the availability of market observable inputs. Transfers in and out of level categorizations are reported as having occurred at the beginning of the quarter in which the transfer occurred. There were no transfers between level categorizations during the three and nine months ended September 30, 2016 and 2015. The following sections describe the valuation methods used by the Company for each type of financial instrument it holds that are carried at fair value. Fixed Maturities The Company utilizes a third party pricing service to estimate fair value measurements for the majority of its fixed maturities. The fair value estimate of the Company’s fixed maturity investments are determined by evaluations that are based on observable market information rather than market quotes. Inputs to the evaluations include, but are not limited to, market prices from recently completed transactions and transactions of comparable securities, interest rate yield curves, credit spreads, and other market-observable information. The fixed maturity portfolio pricing obtained from the pricing service is reviewed for reasonableness. The Company regularly selects a random sample of security prices which are compared to one or more alternative pricing sources for reasonableness. Any discrepancies with the pricing are returned to the pricing service for further explanation and, if necessary, adjustments are made. To date, the Company has not identified any significant discrepancies in the pricing provided by its third party pricing service. Investments valued using these inputs include U.S. treasury securities and obligations of U.S. government agencies, obligations of states and political subdivisions, corporate securities (except for a security discussed below), and U.S. government agencies mortgage-backed securities. All unadjusted estimates of fair value for fixed maturities priced by the pricing service are included in the amounts disclosed in Level 2 of the hierarchy. If market inputs are unavailable, then no fair value is provided by the pricing service. For these securities, fair value is determined either by requesting brokers who are knowledgeable about these securities to provide a quote; or the Company internally determines the fair values by employing widely accepted pricing valuation models, and depending on the level of observable market inputs, renders the fair value estimate as Level 2 or Level 3. The Company holds one corporate fixed maturity security included in Level 3 and estimates its fair value using the present value of the future cash flows. Due to the limited amount of observable market information for this security, the Company includes the fair value estimate in Level 3. Equities The fair value of each equity security is based on an observable market price for an identical asset in an active market and is priced by the same pricing service discussed above. All equity securities are recorded using unadjusted market prices and have been disclosed in Level 1. Other Invested Assets Included in other invested assets are two international funds (“the funds”) that invest in equity securities of foreign issuers and are managed by third party investment managers. The funds had a fair value of $80.7 million and $77.0 million at September 30, 2016 and December 31, 2015, respectively, which was determined using each fund’s net asset value. The Company employs procedures to assess the reasonableness of the fair value of the funds including obtaining and reviewing each fund’s audited financial statements. There are no unfunded commitments related to the funds. The Company may not sell its investment in the funds; however, the Company may redeem all or a portion of its investment in the funds at net asset value per share with the appropriate prior written notice. In accordance with Accounting Standard Codification 820-10, these investments that are measured at fair value using the net asset value per share practical expedient have not been classified in the fair value hierarchy. Fair values presented here are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the condensed consolidated balance sheets. The remainder of the Company’s other invested assets consist primarily of holdings in publicly-traded mutual funds. The Company believes that its prices for these publicly-traded mutual funds based on an observable market price for an identical asset in an active market reflect their fair values and consequently these securities have been disclosed in Level 1. The following tables set forth the Company’s available-for-sale investments within the fair value hierarchy at September 30, 2016 and December 31, 2015:
For assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3), the following tables set forth a reconciliation of the beginning and ending balances for the three and nine months ended September 30, 2016 and the year ended December 31, 2015, separately for each major category of assets:
The following sections describe the valuation methods used by the Company for each type of financial instrument it holds that is not measured at fair value but for which fair value is disclosed: Financial Instruments Disclosed, But Not Carried, At Fair Value Other Invested Assets Included in other invested assets are common stock of the Federal Home Loan Bank of Cincinnati (the "FHLB") and the Trust Securities. The Trust Securities and FHLB common stock are carried at cost, which approximates fair value. The fair value of the FHLB common stock at September 30, 2016 was $4.9 million and the fair value of the Trust Securities was $0.5 million. The investments have been placed in Level 3 of the fair value hierarchy. Notes Receivable from Affiliate In May 2009, the Company entered into two separate credit agreements with State Automobile Mutual Insurance Company (“State Auto Mutual") pursuant to which it loaned State Auto Mutual a total of $70.0 million. The Company estimates the fair value of the notes receivable from affiliate using market quotations for U.S. treasury securities with similar maturity dates and applies an appropriate credit spread. Consequently this has been placed in Level 2 of the fair value hierarchy.
Notes Payable Included in notes payable are the FHLB Loans, consisting of the 2013 FHLB Loan and the 2016 FHLB Loan (as defined in Note 5), and Subordinated Debentures. The Company estimates the fair value of the FHLB Loans by discounting cash flows using a borrowing rate currently available to the Company for loans with similar terms. The FHLB Loans have been placed in Level 3 of the fair value hierarchy. The carrying amount of the Subordinated Debentures approximates its fair value as the interest rate adjusts quarterly and has been disclosed in Level 3.
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Reinsurance |
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Insurance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reinsurance | Reinsurance The insurance subsidiaries of State Auto Financial, including State Auto P&C, Milbank and SA Ohio (collectively referred to as the “STFC Pooled Companies”) participate in a quota share reinsurance pooling arrangement (“the Pooling Arrangement”) with State Auto Mutual and its subsidiaries and affiliates (collectively referred to as the “Mutual Pooled Companies”). The following table sets forth a summary of the Company’s external reinsurance transactions, as well as reinsurance transactions with State Auto Mutual under the Pooling Arrangement, for the three and nine months ended September 30, 2016 and 2015:
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Notes Payable (Notes) |
9 Months Ended |
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Sep. 30, 2016 | |
Notes Payable [Abstract] | |
Debt Disclosure [Text Block] | 5. Notes Payable FHLB Loan State Auto Financial’s subsidiary, State Auto P&C, is a member of the FHLB, and in September 2016 entered into a new term loan with the FHLB in the principal amount of $21.5 million (the “2016 FHLB Loan”). The 2016 FHLB Loan is a five-year term loan and may be called (prepaid) after three years with no prepayment penalty. The 2016 FHLB Loan provides for interest-only payments during its term, with principal due in full at maturity. The interest rate is fixed over the term of the loan at 1.73%. The 2016 FHLB Loan is fully secured by a pledge of specific investment securities of State Auto P&C.
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | . Income Taxes The following table sets forth the reconciliation between actual federal income tax expense and the amount computed at the indicated statutory rate for the three and nine months ended September 30, 2016 and 2015:
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Pension and Postretirement Benefit Plans |
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Postretirement Benefit Plans | Pension and Postretirement Benefit Plans The following table sets forth the components of net periodic cost for the Company’s pension and postretirement benefit plans for the three and nine months ended September 30, 2016 and 2015:
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Other Comprehensive Income and Accumulated Other Comprehensive Income |
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Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Comprehensive Income and Accumulated Other Comprehensive Income | Other Comprehensive Income and Accumulated Other Comprehensive Income The following table sets forth the changes in the Company’s accumulated other comprehensive income component (AOCI), net of tax, for the three and nine months ended September 30, 2016 and 2015:
The following table sets forth the reclassifications out of accumulated other comprehensive income, by component, to the Company’s condensed consolidated statement of income for the three and nine months ended September 30, 2016 and 2015:
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Earnings per Common Share |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings (Loss) per Common Share | Net Earnings (Loss) per Common Share The following table sets forth the compilation of basic and diluted earnings per common share for the three and nine months ended September 30, 2016 and 2015:
The following table sets forth common stock options and restricted share units ("RSU award") provided to each outside director of the Company that were not included in the computation of diluted earnings per common share because the exercise price of the options, or awards, was greater than the average market price or their inclusion would have been antidilutive for the three and nine months ended September 30, 2016 and 2015.
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Segment Information |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information The Company has four reportable segments: personal insurance, business insurance, specialty insurance and investment operations. The reportable insurance segments are business units managed separately because of the differences in the type of customers they serve, the products they provide or services they offer. The insurance segments market a broad line of property and casualty insurance products throughout the United States through independent insurance agencies, which include retail agents and wholesale brokers. The personal insurance segment provides primarily personal automobile and homeowners to the personal insurance market. The business insurance segment provides primarily commercial automobile, commercial multi-peril, fire & allied, general liability, and workers' compensation insurance covering small-to-medium sized commercial exposures. The specialty insurance segment provides commercial coverages that require specialized product underwriting, claims handling or risk management services through a distribution channel of retail agents and wholesale brokers, which may include program administrators and other specialty sources. The investment operations segment, managed by Stateco, provides investment services. The Company evaluates the performance of its insurance segments using industry financial measurements based on Statutory Accounting Practices (“SAP”), which include loss and loss adjustment expense ratios, underwriting expense ratios, combined ratios, statutory underwriting gain (loss), net premiums earned and net written premiums. One of the most significant differences between SAP and GAAP is that SAP requires all underwriting expenses to be expensed immediately and not deferred and amortized over the same period the premium is earned. The investment operations segment is evaluated based on investment returns of assets managed by Stateco. Asset information by segment is not reported for the insurance segments because the Company does not produce such information internally. The following table sets forth financial information regarding the Company’s reportable segments for the three and nine months ended September 30, 2016 and 2015:
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Contingencies and Litigation |
9 Months Ended |
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Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Litigation | Contingencies and Litigation In accordance with the Contingencies Topic of the Financial Accounting Standards Board's Accounting Standards Codification, the Company accrues for a litigation-related liability when it is probable that such a liability has been incurred and the amount can be reasonably estimated. The Company reviews all litigation on an ongoing basis when making accrual and disclosure decisions. For certain legal proceedings, the Company cannot reasonably estimate losses or a range of loss, if any, particularly for proceedings that are in their early stages of development or where the plaintiffs seek indeterminate damages. Various factors, including, but not limited to, the outcome of potentially lengthy discovery and the resolution of important factual questions, may need to be determined before probability can be established or before a loss or range of loss can be reasonably estimated. If the loss contingency in question is not both probable and reasonably estimable, the Company does not establish an accrual and the matter will continue to be monitored for any developments that would make the loss contingency both probable and reasonably estimable. Based on currently available information known to the Company, it believes that its reserves for litigation-related liabilities are reasonable. However, in the event that a legal proceeding results in a substantial judgment against, or settlement by, the Company, there can be no assurance that any resulting liability or financial commitment would not have a material adverse effect on the financial condition, results of operations or cash flows of the consolidated financial statements of the Company. The Company is involved in lawsuits in the ordinary course of its business arising out of or otherwise related to its insurance policies. Additionally, from time to time the Company may be involved in lawsuits, including class actions, in the ordinary course of business but not arising out of or otherwise related to its insurance policies. These lawsuits are in various stages of development. The Company generally will contest these matters vigorously but may pursue settlement if appropriate. Based on currently available information, the Company does not believe it is reasonably possible that any such lawsuit or related lawsuits will be material to its results of operations or have a material adverse effect on its consolidated financial position, results of operations or cash flows. Additionally, the Company may be impacted by adverse regulatory actions and adverse court decisions where insurance coverages are expanded beyond the scope originally contemplated in its insurance policies. The Company believes that the effects, if any, of such regulatory actions and published court decisions are not likely to have a material adverse effect on its consolidated financial position, results of operations or cash flows.
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Investments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost or Amortized Cost and Fair Value of Available-for-Sale Securities | The following tables set forth the cost or amortized cost and fair value of available-for-sale securities by lot at September 30, 2016 and December 31, 2015:
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Gross Unrealized Losses and Fair Value on its Investments | The following tables set forth the Company’s gross unrealized losses and fair value on its investments by lot, aggregated by investment category and length of time for individual securities that have been in a continuous unrealized loss position at September 30, 2016 and December 31, 2015:
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Realized Losses Related to Other-than-Temporary Impairments | The following table sets forth the realized losses related to other-than-temporary impairments on the Company’s investment portfolio recognized for the three and nine months ended September 30, 2016 and 2015:
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Amortized Cost and Fair Value of Available-for-Sale Fixed Maturities by Contractual Maturity | The following table sets forth the amortized cost and fair value of available-for-sale fixed maturities by contractual maturity at September 30, 2016:
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Components of Net Investment Income | The following table sets forth the components of net investment income for the three and nine months ended September 30, 2016 and 2015:
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Realized and Unrealized Holding Gains (Losses) | The following table sets forth the realized and unrealized holding gains (losses) on the Company’s investment portfolio for the three and nine months ended September 30, 2016 and 2015:
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Fair Value of Financial Instruments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company's Available-for-Sale Investments within Fair Value Hierarchy | The following tables set forth the Company’s available-for-sale investments within the fair value hierarchy at September 30, 2016 and December 31, 2015:
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Assets Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3) | For assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3), the following tables set forth a reconciliation of the beginning and ending balances for the three and nine months ended September 30, 2016 and the year ended December 31, 2015, separately for each major category of assets:
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Company Estimates Receivable from Affiliate using Market Quotations for U.S. Treasury Securities | Consequently this has been placed in Level 2 of the fair value hierarchy.
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Included in Notes Payable are Senior Notes and Subordinated Debentures | The carrying amount of the Subordinated Debentures approximates its fair value as the interest rate adjusts quarterly and has been disclosed in Level 3.
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Reinsurance (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Insurance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of External Reinsurance Transactions with State Auto Mutual Under Pooling Arrangement | The following table sets forth a summary of the Company’s external reinsurance transactions, as well as reinsurance transactions with State Auto Mutual under the Pooling Arrangement, for the three and nine months ended September 30, 2016 and 2015:
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Income Taxes (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation Between Actual Federal Income Tax Benefit and Amount Computed at Indicated Statutory Rate | The following table sets forth the reconciliation between actual federal income tax expense and the amount computed at the indicated statutory rate for the three and nine months ended September 30, 2016 and 2015:
|
Pension and Postretirement Benefit Plans (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company's Share of Net Periodic Cost Components | The following table sets forth the components of net periodic cost for the Company’s pension and postretirement benefit plans for the three and nine months ended September 30, 2016 and 2015:
|
Other Comprehensive Income and Accumulated Other Comprehensive Income (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Accumulated Other Comprehensive Income by Component, Net of Tax | The following table sets forth the changes in the Company’s accumulated other comprehensive income component (AOCI), net of tax, for the three and nine months ended September 30, 2016 and 2015:
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Schedule of Reclassifications Out of Accumulated Other Comprehensive Income by Component | The following table sets forth the reclassifications out of accumulated other comprehensive income, by component, to the Company’s condensed consolidated statement of income for the three and nine months ended September 30, 2016 and 2015:
|
Earnings per Common Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compilation of Basic and Diluted Earnings Per Common Share | The following table sets forth the compilation of basic and diluted earnings per common share for the three and nine months ended September 30, 2016 and 2015:
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Options to Purchase Shares of Common Stock | The following table sets forth common stock options and restricted share units ("RSU award") provided to each outside director of the Company that were not included in the computation of diluted earnings per common share because the exercise price of the options, or awards, was greater than the average market price or their inclusion would have been antidilutive for the three and nine months ended September 30, 2016 and 2015.
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Segment Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Information Regarding Company's Reportable Segments | The following table sets forth financial information regarding the Company’s reportable segments for the three and nine months ended September 30, 2016 and 2015:
|
Basis of Presentation Adoption of Recent Accounting Pronouncements (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2016
USD ($)
| |
Accounting Changes and Error Corrections [Abstract] | |
Debt Issuance Cost | $ 0.3 |
Investments - Realized Losses Related to Other-than-Temporary Impairments (Detail) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Schedule of Available-for-sale Securities [Line Items] | ||||
Other-than-temporary impairments | $ (1.1) | $ (3.5) | $ (5.4) | $ (4.8) |
Fixed Maturities [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Other-than-temporary impairments | (2.3) | 0.0 | ||
Large-Cap Equity Securities [Member] | Equity Securities [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Other-than-temporary impairments | 0.0 | 0.0 | (0.2) | 0.0 |
Small-Cap Securities [Member] | Equity Securities [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Other-than-temporary impairments | (1.1) | (3.5) | $ (2.9) | $ (4.8) |
Fixed Maturities [Member] | Fixed Maturities [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Other-than-temporary impairments | $ 0.0 | $ 0.0 |
Investments - Amortized Cost and Fair Value of Available-for-Sale Fixed Maturities by Contractual Maturity (Detail) - USD ($) $ in Millions |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Amortized cost | ||
Due in 1 year or less, Amortized cost | $ 67.1 | |
Due after 1 year through 5 years, Amortized cost | 564.0 | |
Due after 5 years through 10 years, Amortized cost | 275.3 | |
Due after 10 years, Amortized cost | 584.9 | |
U.S. government agencies mortgage-backed securities, Amortized cost | 569.7 | |
Total, Amortized cost | 2,061.0 | $ 1,972.9 |
Fair value | ||
Due in 1 year or less, Fair value | 68.1 | |
Due after 1 year through 5 years, Fair value | 579.4 | |
Due after 5 years through 10 years, Fair value | 286.1 | |
Due after 10 years, Fair value | 618.8 | |
U.S. government agencies mortgage-backed securities, Fair value | 590.9 | |
Total, Fair value | $ 2,143.3 | $ 2,000.7 |
Investments - Components of Net Investment Income (Detail) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Net Investment Income [Line Items] | ||||
Investment income | $ 18.1 | $ 19.1 | $ 55.4 | $ 55.4 |
Investment expenses | 0.5 | 0.4 | 1.3 | 1.5 |
Net investment income | 17.6 | 18.7 | 54.1 | 53.9 |
Fixed Maturities [Member] | ||||
Net Investment Income [Line Items] | ||||
Investment income | 15.4 | 16.1 | 47.0 | 46.4 |
Equity Securities [Member] | ||||
Net Investment Income [Line Items] | ||||
Investment income | 1.3 | 1.4 | 4.3 | 4.7 |
Cash and Cash Equivalents, and Other [Member] | ||||
Net Investment Income [Line Items] | ||||
Investment income | $ 1.4 | $ 1.6 | $ 4.1 | $ 4.3 |
Investments - Additional Information (Detail) - USD ($) $ in Millions |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Dec. 31, 2015 |
|
Schedule of Available-for-sale Securities [Line Items] | |||
Fixed maturities fair value of deposit with insurance regulators | $ 9.2 | $ 8.8 | |
Proceeds on sale of available-for-sale securities | 252.6 | $ 260.6 | |
Federal Home Loan Bank of Cincinnati [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Collateral Pledged | $ 106.5 |
Fair Value of Financial Instruments - Assets Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3) (Detail) - Available-for-Sale Securities [Member] - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
|
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning Balance | $ 3.4 | $ 3.4 | $ 3.3 | $ 9.4 |
Total realized gains (losses) - included in earnings | 0.0 | 0.0 | 0.0 | 0.0 |
Total unrealized gains (losses) - included in other comprehensive income | 0.0 | 0.0 | 0.0 | (0.2) |
Purchases | 0.1 | 0.0 | 0.1 | 0.0 |
Sales | 0.0 | 0.0 | 0.0 | (5.9) |
Transfers into Level 3 | 0.0 | 0.0 | 0.0 | 0.0 |
Transfers out of Level 3 | 0.0 | 0.0 | 0.0 | 0.0 |
Ending Balance | $ 3.5 | $ 3.4 | $ 3.4 | $ 3.3 |
Fair Value of Financial Instruments - Company Estimates Receivable from Affiliate using Market Quotations for U.S. Treasury Securities (Detail) - Affiliated Entity [Member] - Level 2 [Member] - USD ($) $ in Millions |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2016 |
Dec. 31, 2015 |
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable interest rate (percent) | 7.00% | 7.00% |
Reported Value Measurement [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable from affiliate | $ 70.0 | $ 70.0 |
Estimate of Fair Value Measurement [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable from affiliate | $ 76.2 | $ 74.1 |
Reinsurance - Summary of External Reinsurance Transactions, as well as reinsurance transactions with State Auto Mutual Under the Pooling Arrangement (Detail) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Premiums earned: | ||||
Assumed from external insurers and reinsurers | $ 1.2 | $ 1.1 | $ 3.6 | $ 3.2 |
Assumed under Pooling Arrangement | 325.8 | 319.7 | 968.1 | 946.5 |
Ceded to external insurers and reinsurers | (6.0) | (8.7) | (19.3) | (26.1) |
Ceded under Pooling Arrangement | (204.4) | (207.5) | (615.7) | (626.0) |
Net assumed premiums earned | 116.6 | 104.6 | 336.7 | 297.6 |
Losses and loss expenses incurred: | ||||
Assumed from external insurers and reinsurers | 0.9 | 0.8 | 2.8 | 2.2 |
Assumed under Pooling Arrangement | 232.8 | 207.8 | 721.5 | 628.1 |
Ceded to external insurers and reinsurers | 0.3 | (1.2) | (2.1) | (3.6) |
Ceded under Pooling Arrangement | (131.9) | (140.4) | (440.1) | (427.2) |
Net assumed losses and loss expenses incurred | $ 102.1 | $ 67.0 | $ 282.1 | $ 199.5 |
Notes Payable (Details) - USD ($) |
Sep. 03, 2016 |
Sep. 02, 2016 |
---|---|---|
Notes Payable [Abstract] | ||
Long-term Federal Home Loan Bank Advances | $ 21,500,000 | |
Long-term Purchase Commitment, Period | 5 years | |
Debt Instrument, Term | 3 years | |
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Repayment and Penalties | $ 0 | |
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Interest Rate | 1.73% |
Income Taxes - Reconciliation Between Actual Federal Income Tax Expense (Benefit) and Amount Computed at Indicated Statutory Rate (Detail) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Effective Income Tax Rate Reconciliation, Amount [Abstract] | ||||
Amount at statutory rate | $ 2.6 | $ 10.5 | $ (4.8) | $ 23.3 |
Tax-exempt interest and dividends received deduction | (1.6) | (2.1) | (5.5) | (6.6) |
Other, net | (3.7) | 0.8 | 7.9 | 1.7 |
Federal income tax expense and effective rate | $ (2.7) | $ 9.2 | $ (2.4) | $ 18.4 |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | ||||
Amount at statutory rate (percent) | 35.00% | 35.00% | 35.00% | 35.00% |
Tax-exempt interest and dividends received deduction (percent) | (22.60%) | (7.00%) | 40.00% | (9.90%) |
Other, net (percent) | (48.60%) | 2.80% | (58.00%) | 2.60% |
Federal income tax expense (benefit) and effective rate (percent) | (36.20%) | 30.80% | 17.00% | 27.70% |
Income Taxes Income Taxes (Additional Information) (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2016
USD ($)
| |
Income Tax Disclosure [Abstract] | |
Tax Adjustments, Settlements, and Unusual Provisions | $ 1.6 |
Deferred Tax Assets, Tax Deferred Expense, Compensation and Benefits | $ 1.6 |
Pension and Postretirement Benefit Plans - Company's Share of Net Periodic Cost Components (Detail) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Pension [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Service cost | $ 1.6 | $ 2.0 | $ 4.7 | $ 5.9 |
Interest cost | 3.0 | 2.8 | 8.9 | 8.5 |
Expected return on plan assets | (3.9) | (3.5) | (11.3) | (10.4) |
Amortization of: | ||||
Negative prior service cost | 0.0 | 0.0 | 0.0 | 0.0 |
Net actuarial loss | 2.3 | 2.7 | 6.9 | 8.2 |
Net periodic cost (benefit) | 3.0 | 4.0 | 9.2 | 12.2 |
Postretirement [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Service cost | 0.0 | 0.0 | 0.0 | 0.0 |
Interest cost | 0.2 | 0.3 | 0.6 | 0.7 |
Expected return on plan assets | 0.0 | 0.0 | 0.0 | 0.0 |
Amortization of: | ||||
Negative prior service cost | (1.3) | (1.3) | (4.1) | (4.1) |
Net actuarial loss | 0.1 | 0.1 | 0.2 | 0.4 |
Net periodic cost (benefit) | $ (1.0) | $ (0.9) | $ (3.3) | $ (3.0) |
Pension and Postretirement Benefit Plans - Additional Information (Detail) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2016
USD ($)
| |
Compensation and Retirement Disclosure [Abstract] | |
Contributions by employer | $ 34.5 |
Earnings Per Common Share - Compilation of Basic and Diluted Earnings (Loss) Per Common Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Numerator: | ||||
Net (loss) income basic earnings per common share | $ 10.1 | $ 20.7 | $ (11.5) | $ 48.1 |
Denominator: | ||||
Weighted average shares for basic net earnings per common share (shares) | 41.6 | 41.1 | 41.5 | 41.1 |
Effect of dilutive share-based awards (shares) | 0.5 | 0.8 | 0.0 | 0.4 |
Adjusted weighted average shares for diluted net earnings per common share (shares) | 42.1 | 41.9 | 41.5 | 41.5 |
Basic net (loss) earnings per common share (usd per share) | $ 0.24 | $ 0.50 | $ (0.28) | $ 1.17 |
Diluted net (loss) earnings per common share (usd per share) | $ 0.24 | $ 0.50 | $ (0.28) | $ 1.16 |
Earnings Per Common Share - Options to Purchase Shares of Common Stock (Detail) - shares shares in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Earnings Per Share [Abstract] | ||||
Number of antidilutive options and awards | 1.1 | 1.1 | 1.4 | 1.7 |
Segment Information - Additional Information (Detail) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2015
USD ($)
|
Sep. 30, 2016
USD ($)
Segment
|
Sep. 30, 2015
USD ($)
|
Dec. 31, 2015
USD ($)
|
|
Segment Reporting Information [Line Items] | |||||
Acquisition And Operating Expenses | $ 109.9 | $ 109.4 | $ 324.6 | $ 318.7 | |
Number of reportable segments (segments) | Segment | 4 | ||||
Investable assets | $ 2,675.4 | $ 2,675.4 | $ 2,529.8 |
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