Investments

6 Months Ended

Jun. 30, 2015

(4) Investments

The cost or amortized cost, gross unrealized gain or loss, and fair value of our fixed maturity and equity securities, all of which are classified as available for sale, were as follows:

		Cost or		Gross		Gross
		amortized		unrealized		unrealized
		cost		gain		loss		Fair value
June 30, 2015

U.S. government and government agency securities		$	73,501	$	697	$	(60)	$	74,138
Fixed maturity securities of states, municipalities
	and political subdivisions		775,017		42,911		(2,173)		815,755
Special purpose revenue bonds of states, municipalities
	and political subdivisions		2,240,251		106,213		(7,518)		2,338,946
Corporate securities			771,109		17,648		(6,441)		782,316
Residential mortgage-backed securities			784,457		14,943		(7,363)		792,037
Commercial mortgage-backed securities			521,110		13,853		(2,274)		532,689
Asset-backed securities			373,117		530		(856)		372,791
Foreign government securities			145,905		830		(1,484)		145,251
Foreign corporate securities			447,779		7,140		(12,586)		442,333
	Total fixed maturity securities	$	6,132,246	$	204,765	$	(40,755)	$	6,296,256

Equity securities		$	382,550	$	29,918	$	(22,391)	$	390,077

December 31, 2014

U.S. government and government agency securities		$	70,279	$	827	$	(137)	$	70,969
Fixed maturity securities of states, municipalities
	and political subdivisions		896,130		58,738		(160)		954,708
Special purpose revenue bonds of states, municipalities
	and political subdivisions		2,246,707		143,291		(986)		2,389,012
Corporate securities			777,242		25,983		(4,656)		798,569
Residential mortgage-backed securities			805,458		20,215		(3,979)		821,694
Commercial mortgage-backed securities			593,956		19,707		(2,032)		611,631
Asset-backed securities			369,103		316		(2,592)		366,827
Foreign government securities			119,479		767		(1,554)		118,692
Foreign corporate securities			474,383		10,776		(6,893)		478,266
	Total fixed maturity securities	$	6,352,737	$	280,620	$	(22,989)	$	6,610,368

Equity securities		$	291,070	$	24,069	$	(18,787)	$	296,352

Substantially all of our fixed maturity securities are investment grade. The following tables display the gross unrealized losses and fair value of all available for sale securities that were in a continuous unrealized loss position for the periods indicated.

				Less than 12 months				12 months or more				Total
						Unrealized				Unrealized				Unrealized
				Fair value		losses		Fair value		losses		Fair value		losses
June 30, 2015

Fixed maturity securities
	U.S. government and government agency
		securities		$	9,018	$	(53)	$	3,985	$	(7)	$	13,003	$	(60)
	Fixed maturity securities of states,
		municipalities and political subdivisions			119,543		(2,173)		-		-		119,543		(2,173)
	Special purpose revenue bonds of states,
		municipalities and political subdivisions			437,071		(6,738)		18,348		(780)		455,419		(7,518)
	Corporate securities				258,668		(4,594)		40,654		(1,847)		299,322		(6,441)
	Residential mortgage-backed securities				271,212		(4,160)		98,727		(3,203)		369,939		(7,363)
	Commercial mortgage-backed securities				107,636		(1,338)		24,216		(936)		131,852		(2,274)
	Asset-backed securities				150,415		(269)		72,839		(587)		223,254		(856)
	Foreign government securities				30,582		(1,052)		12,893		(432)		43,475		(1,484)
	Foreign corporate securities				171,921		(7,203)		42,054		(5,383)		213,975		(12,586)
Equity securities					169,836		(16,423)		23,288		(5,968)		193,124		(22,391)
			Total	$	1,725,902	$	(44,003)	$	337,004	$	(19,143)	$	2,062,906	$	(63,146)

December 31, 2014

Fixed maturity securities
	U.S. government and government agency
		securities		$	14,813	$	(8)	$	11,236	$	(129)	$	26,049	$	(137)
	Fixed maturity securities of states,
		municipalities and political subdivisions			3,857		(21)		19,337		(139)		23,194		(160)
	Special purpose revenue bonds of states,
		municipalities and political subdivisions			4,041		(19)		100,947		(967)		104,988		(986)
	Corporate securities				211,111		(2,498)		48,091		(2,158)		259,202		(4,656)
	Residential mortgage-backed securities				37,434		(100)		226,256		(3,879)		263,690		(3,979)
	Commercial mortgage-backed securities				5,228		(26)		99,868		(2,006)		105,096		(2,032)
	Asset-backed securities				181,579		(1,245)		78,797		(1,347)		260,376		(2,592)
	Foreign government securities				55,280		(1,498)		7,187		(56)		62,467		(1,554)
	Foreign corporate securities				182,163		(4,587)		21,571		(2,306)		203,734		(6,893)
Equity securities					111,251		(17,839)		3,934		(948)		115,185		(18,787)
			Total	$	806,757	$	(27,841)	$	617,224	$	(13,935)	$	1,423,981	$	(41,776)

At June 30, 2015, we held approximately 2,960 fixed maturity and equity securities, of which 36% included at least one lot in an unrealized loss position. A security has an impairment loss when its fair value is less than its cost or amortized cost at the balance sheet date. We evaluate our securities for possible other-than-temporary impairment losses at each quarter end. Our reviews cover all impaired securities where the loss exceeds $1.0 million and the loss either exceeds 10% of cost or the security had been in a loss position for longer than twelve consecutive months. We do not consider the $63.1 million of gross unrealized losses in our portfolio at June 30, 2015 to be other-than-temporary impairments as these losses relate to non-credit factors, such as interest rate changes, fluctuations in exchange rates and market conditions. We recognized no other-than-temporary impairment losses in the first six months of 2015 and 2014.

The amortized cost and fair value of our fixed maturity securities at June 30, 2015, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The weighted-average life of our mortgage-backed and asset-backed securities was 5.3 years at June 30, 2015.

		Cost or amortized cost		Fair value

Due in 1 year or less		$	164,158	$	160,738
Due after 1 year through 5 years			1,133,253		1,158,235
Due after 5 years through 10 years			1,223,353		1,277,278
Due after 10 years through 15 years			874,072		914,971
Due after 15 years			1,058,726		1,087,517
	Securities with contractual maturities		4,453,562		4,598,739
Mortgage-backed and asset-backed securities			1,678,684		1,697,517
	Total fixed maturity securities	$	6,132,246	$	6,296,256

Other investments primarily includes an investment in a fund that is carried at the net asset value of the fund. Changes in the net asset value are included in net investment income in our consolidated statements of earnings.

Realized pretax gains (losses) on the sale of investments included the following:

			Six months ended June 30,				Three months ended June 30,
			2015		2014		2015		2014
Gains
	Fixed maturity securities		$	18,505	$	6,150	$	4,629	$	5,018
	Equity securities			10,748		25,863		437		1,425
		Total gains		29,253		32,013		5,066		6,443

Losses
	Fixed maturity securities			(1,934)		(3,688)		(462)		(1,533)
	Equity securities			(13,560)		(3,174)		(4,031)		(5)
		Total losses		(15,494)		(6,862)		(4,493)		(1,538)

Net
	Fixed maturity securities			16,571		2,462		4,167		3,485
	Equity securities			(2,812)		22,689		(3,594)		1,420
		Net realized investment gain	$	13,759	$	25,151	$	573	$	4,905

- Definition

The entire disclosure for investments in certain debt and equity securities.

+ References + Details