Fair Value (Tables)

3 Months Ended

Mar. 31, 2013

Fair Value of Financial Instruments

The estimated fair value of the financial instruments were as follows:

(in millions)	March 31, 2013				December 31, 2012
	Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value
Financial Assets
Cash and cash equivalents	$	691.0	$	691.0	$	564.8	$	564.8
Fixed maturities		6,723.5		6,723.5		6,952.2		6,952.2
Equity securities		435.0		435.0		315.8		315.8
Other investments		186.5		186.8		188.9		189.4
Total financial assets	$	8,036.0	$	8,036.3	$	8,021.7	$	8,022.2
Financial Liabilities
Debt	$	978.1	$	1,116.7	$	849.4	$	995.2

Fair Value, Assets Measured on Recurring Basis

The following tables provide, for each hierarchy level, the Company’s assets at March 31, 2013 and December 31, 2012 that are measured at fair value on a recurring basis.

	March 31, 2013
(in millions)	Total		Level 1		Level 2		Level 3
Fixed maturities:
U.S. Treasury and government agencies	$	321.5	$	142.3	$	179.2	$	—
Foreign government		305.6		48.5		257.1		—
Municipal		1,076.1		—		1,047.3		28.8
Corporate		3,698.8		—		3,676.0		22.8
Residential mortgage-backed, U.S. agency backed		568.2		—		568.2		—
Residential mortgage-backed, non-agency		186.1		—		185.5		0.6
Commercial mortgage-backed		358.8		—		334.0		24.8
Asset-backed		208.4		—		208.4		—
Total fixed maturities		6,723.5		190.8		6,455.7		77.0
Equity securities		425.7		365.5		35.2		25.0
Other investments		172.1		—		168.5		3.6
Total investment assets at fair value	$	7,321.3	$	556.3	$	6,659.4	$	105.6

	December 31, 2012
(in millions)	Total		Level 1		Level 2		Level 3
Fixed maturities:
U.S. Treasury and government agencies	$	325.6	$	144.2	$	181.4	$	—
Foreign government		352.9		60.9		292.0		—
Municipal		1,096.3		—		1,076.9		19.4
Corporate		3,773.4		—		3,747.0		26.4
Residential mortgage-backed, U.S. agency backed		610.8		—		610.8		—
Residential mortgage-backed, non-agency		194.4		—		193.7		0.7
Commercial mortgage-backed		396.2		—		369.5		26.7
Asset-backed		202.6		—		201.1		1.5
Total fixed maturities		6,952.2		205.1		6,672.4		74.7
Equity securities		306.1		226.9		54.8		24.4
Other investments		172.8		—		169.2		3.6
Total investment assets at fair value	$	7,431.1	$	432.0	$	6,896.4	$	102.7

Estimated Fair Values of Financial Instruments Not Carried at Fair Value

The following table provides, for each hierarchy level, the Company’s estimated fair values of financial instruments that are not carried at fair value:

	March 31, 2013
(in millions)	Total		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	691.0	$	691.0	$	—	$	—
Equity securities		9.3		—		9.3		—
Other investments		14.7		—		4.0		10.7
Liabilities:
Debt	$	1,116.7	$	—	$	1,116.7	$	—

	December 31, 2012
(in millions)	Total		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	564.8	$	564.8	$	—	$	—
Equity securities		9.7		—		9.7		—
Other investments		16.6		—		4.8		11.8
Liabilities:
Debt	$	995.2	$	—	$	995.2	$	—

Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)

The tables below provide a reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3).

	Fixed Maturities
(in millions)	Municipal			Corporate			Residential mortgage- backed, non- agency			Commercial mortgage- backed			Asset-backed			Total			Equity and Other			Total Assets
Three Months Ended
March 31, 2013
Balance January 1, 2013	$	19.4		$	26.4		$	0.7		$	26.7		$	1.5		$	74.7		$	28.0		$	102.7
Transfers into Level 3		9.7			0.2			—			—			—			9.9			—			9.9
Transfers out of Level 3		—			—			—			—			(1.5	)		(1.5	)		(0.9	)		(2.4	)
Total gains (losses):
Included in earnings		—			0.4			—			—			—			0.4			—			0.4
Included in other comprehensive income-net appreciation (depreciation) on available-for-sale securities		0.1			(0.1	)		—			(0.5	)		—			(0.5	)		1.5			1.0
Purchases and sales:
Purchases		—			—			—			—			—			—			—			—
Sales		(0.4	)		(4.1	)		(0.1	)		(1.4	)		—			(6.0	)		—			(6.0	)
Balance March 31, 2013	$	28.8		$	22.8		$	0.6		$	24.8		$	—		$	77.0		$	28.6		$	105.6
Three Months Ended
March 31, 2012
Balance January 1, 2012	$	13.6		$	23.8		$	5.2		$	23.7		$	9.2		$	75.5		$	27.0		$	102.5
Transfers into Level 3		—			4.3			—			—			—			4.3			0.1			4.4
Transfers out of Level 3		—			—			—			—			(7.7	)		(7.7	)		—			(7.7	)
Total gains (losses):
Included in earnings		—			0.1			—			—			(0.1	)		—			(0.2	)		(0.2	)
Included in other comprehensive income-net appreciation (depreciation) on available-for-sale securities		0.6			0.8			0.1			(1.0	)		—			0.5			(1.2	)		(0.7	)
Purchases and sales:
Purchases		3.0			—			—			5.2			—			8.2			—			8.2
Sales		(0.2	)		(0.3	)		(4.6	)		(0.4	)		(0.1	)		(5.6	)		(0.7	)		(6.3	)
Balance March 31, 2012	$	17.0		$	28.7		$	0.7		$	27.5		$	1.3		$	75.2		$	25.0		$	100.2

Schedule of Gain And Losses Due to Change in Fair Value Level 3 Assets

The following table summarizes gains and losses due to changes in fair value that are recorded in net income for Level 3 assets.

	Three Months Ended March 31,
	2013		2012
(in millions)	Net realized investment gains		Other-than- temporary impairments			Net realized investment gains (losses)			Total
Level 3 Assets:
Fixed maturities:
Corporate	$	0.4	$	—		$	0.1		$	0.1
Asset-backed		—		(0.1	)		—			(0.1	)
Total fixed maturities		0.4		(0.1	)		0.1			—
Equity securities		—		—			(0.2	)		(0.2	)
Total assets	$	0.4	$	(0.1	)	$	(0.1	)	$	(0.2	)

Schedule of Additional Information about Significant Unobservable Inputs Used in Fair Valuations of Level 3

The following table provides quantitative information about the significant unobservable inputs used by the Company in the fair value measurements of Level 3 assets as of March 31, 2013. Where discounted cash flows are used in the valuation of fixed maturities, the internally-developed discount rate is adjusted by the significant unobservable inputs shown in the table. Valuations for securities based on broker quotes for which there is a lack of transparency as to inputs used to develop the valuations have been excluded.

			March 31, 2013			December 31, 2012
	Valuation	Significant	Fair		Range	Fair		Range
(in millions)	Technique	Unobservable Inputs	Value		(Wtd Average)	Value		(Wtd Average)
Fixed maturities:
Municipal	Discounted	Discount for:	$	28.8		$	19.4
	cash flow	Small issue size			1.0-4.0% (2.4%)			1.0-4.0% (3.1%)
		Above-market coupon			0.3-1.0% (0.5%)			0.3-1.0% (0.5%)
		Long maturity			0.1-0.6% (0.3%)			0.5% (0.5%)
Corporate	Discounted	Discount for:		22.6			26.4
	cash flow	Credit stress			3.0% (3.0%)			1.0-3.0% (1.1%)
		Above-market coupon			0.3-1.0% (0.7%)			0.3-1.0% (0.7%)
		Small issue size			0.3-3.0% (0.6%)			0.3-3.0% (0.5%)
		Long maturity			0.1% (0.1%)			0.5% (0.5%)
Residential mortgage-backed, non-agency	Discounted	Discount for:		0.6			0.7
	cash flow	Small issue size			0.5% (0.5%)			0.5% (0.5%)
Commercial mortgage-backed	Discounted	Discount for:		24.8			26.7
	cash flow	Credit stress			1.0% (1.0%)			1.0% (1.0%)
		Small issue size			0.5% (0.5%)			0.5% (0.5%)
		Above-market coupon			0.3-0.8% (0.4%)			0.3-0.8% (0.4%)
		Long maturity			0.2-0.5% (0.4%)			0.5-0.8% (0.7%)
		Lease structure			0.3% (0.3%)			0.3% (0.3%)
Asset backed	Discounted	Discount for:		—			1.5
	cash flow	Small issue size			NA			0.7-2.0% (1.6%)
Equity securities	Market	Net tangible asset		24.9			24.3
	comparables	market multiples			1.0X (1.0X)			0.9X (0.9X)
Other	Discounted	Discount rate		3.6	18.0% (18.0%)		3.6	18.0% (18.0%)
	cash flow