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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

or

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 1-13754

 

THE HANOVER INSURANCE GROUP, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

04-3263626

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

440 Lincoln Street, Worcester, Massachusetts 01653

(Address of principal executive offices) (Zip Code)

(508) 855-1000

(Registrant’s telephone number, including area code)

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbols

 

Name of each exchange on which registered

Common Stock, $.01 par value

 

THG

 

New York Stock Exchange

7 5/8% Senior Debentures due 2025

 

THG

 

New York Stock Exchange

 

 

 

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

 

 

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

The number of shares outstanding of the registrant’s common stock was 35,942,946 as of April 30, 2024.

 

 


 

TABLE OF CONTENTS

 

PART I.

FINANCIAL INFORMATION

2

 

 

Item 1.

Financial Statements

2

 

Consolidated Statements of Income (Loss)

2

 

Consolidated Statements of Comprehensive Income

3

 

Consolidated Balance Sheets

4

 

Consolidated Statements of Shareholders’ Equity

5

 

Consolidated Statements of Cash Flows

6

 

Notes to Interim Consolidated Financial Statements

7

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

22

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

36

 

 

Item 4.

Controls and Procedures

37

 

 

PART II.

OTHER INFORMATION

38

 

 

Item 1.

Legal Proceedings

38

 

 

Item 1A.

Risk Factors

38

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

40

 

 

 

 

Item 5.

Other Information

 

40

 

 

Item 6.

Exhibits

41

 

 

SIGNATURES

42

 

 


PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

THE HANOVER INSURANCE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED)

 

 

 

Three Months Ended

 

 

 

March 31,

 

(In millions, except per share data)

 

2024

 

 

2023

 

Revenues

 

 

 

 

 

 

Premiums

 

$

1,448.6

 

 

$

1,380.0

 

Net investment income

 

 

89.7

 

 

 

78.7

 

Net realized and unrealized investment gains (losses):

 

 

 

 

 

 

Net realized losses from sales and other

 

 

(1.3

)

 

 

(1.1

)

Net change in fair value of equity securities

 

 

6.5

 

 

 

(7.1

)

Recoveries (impairments) on investments:

 

 

 

 

 

 

Credit-related recoveries (impairments)

 

 

0.3

 

 

 

(4.5

)

Losses on intent to sell securities

 

 

 

 

 

(10.3

)

 

 

 

0.3

 

 

 

(14.8

)

Total net realized and unrealized investment gains (losses)

 

 

5.5

 

 

 

(23.0

)

Fees and other income

 

 

7.3

 

 

 

8.0

 

Total revenues

 

 

1,551.1

 

 

 

1,443.7

 

Losses and expenses

 

 

 

 

 

 

Losses and loss adjustment expenses

 

 

935.2

 

 

 

1,017.4

 

Amortization of deferred acquisition costs

 

 

299.0

 

 

 

288.8

 

Interest expense

 

 

8.5

 

 

 

8.5

 

Other operating expenses

 

 

163.1

 

 

 

146.5

 

Total losses and expenses

 

 

1,405.8

 

 

 

1,461.2

 

Income (loss) before income taxes

 

 

145.3

 

 

 

(17.5

)

Income tax expense (benefit):

 

 

 

 

 

 

Current

 

 

28.7

 

 

 

2.2

 

Deferred

 

 

1.1

 

 

 

(7.7

)

Total income tax expense (benefit)

 

 

29.8

 

 

 

(5.5

)

Net income (loss)

 

 

115.5

 

 

 

(12.0

)

Earnings per common share:

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

Net income (loss) per share

 

$

3.22

 

 

$

(0.34

)

Weighted average shares outstanding

 

 

35.8

 

 

 

35.6

 

Diluted:

 

 

 

 

 

 

Net income (loss) per share

 

$

3.18

 

 

$

(0.34

)

Weighted average shares outstanding

 

 

36.3

 

 

 

35.6

 

 

The accompanying notes are an integral part of these interim consolidated financial statements.

2


THE HANOVER INSURANCE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

 

 

Three Months Ended

 

 

 

March 31,

 

(In millions)

 

2024

 

 

2023

 

Net income (loss)

 

$

115.5

 

 

$

(12.0

)

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

Available-for-sale securities:

 

 

 

 

 

 

Changes in net unrealized gains (losses) on investment securities:

 

 

 

 

 

 

Having no credit losses recognized in the
   Consolidated Statements of Income (Loss)

 

 

(33.9

)

 

 

93.3

 

Having credit losses recognized in the
   Consolidated Statements of Income (Loss)

 

 

(0.2

)

 

 

1.0

 

Total available-for-sale securities

 

 

(34.1

)

 

 

94.3

 

Pension and postretirement benefits:

 

 

 

 

 

 

Net change in net actuarial loss

 

 

1.4

 

 

 

1.6

 

Long-duration insurance contracts:

 

 

 

 

 

 

Net change in market risk

 

 

1.0

 

 

 

(2.1

)

Total other comprehensive income (loss), net of tax

 

 

(31.7

)

 

 

93.8

 

Comprehensive income

 

$

83.8

 

 

$

81.8

 

 

The accompanying notes are an integral part of these interim consolidated financial statements.

3


THE HANOVER INSURANCE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 

 

March 31,

 

 

December 31,

 

(In millions, except share data)

 

2024

 

 

2023

 

Assets

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

Fixed maturities, at fair value (amortized cost of $8,645.4 and $8,573.9)

 

$

8,015.4

 

 

$

7,985.3

 

Equity securities, at fair value

 

 

137.4

 

 

 

130.9

 

Other investments

 

 

794.4

 

 

 

796.9

 

Total investments

 

 

8,947.2

 

 

 

8,913.1

 

Cash and cash equivalents

 

 

264.6

 

 

 

316.1

 

Accrued investment income

 

 

57.9

 

 

 

58.2

 

Premiums and accounts receivable, net

 

 

1,739.5

 

 

 

1,705.6

 

Reinsurance recoverable on paid and unpaid losses and unearned premiums

 

 

1,999.8

 

 

 

2,056.1

 

Deferred acquisition costs

 

 

619.3

 

 

 

620.8

 

Deferred income tax asset

 

 

180.2

 

 

 

173.3

 

Goodwill

 

 

178.8

 

 

 

178.8

 

Other assets

 

 

521.4

 

 

 

504.0

 

Assets of discontinued businesses

 

 

85.4

 

 

 

86.6

 

Total assets

 

$

14,594.1

 

 

$

14,612.6

 

Liabilities

 

 

 

 

 

 

Loss and loss adjustment expense reserves

 

$

7,331.1

 

 

$

7,308.1

 

Unearned premiums

 

 

3,104.9

 

 

 

3,102.5

 

Expenses and taxes payable

 

 

679.1

 

 

 

775.9

 

Reinsurance premiums payable

 

 

61.6

 

 

 

64.3

 

Debt

 

 

783.4

 

 

 

783.2

 

Liabilities of discontinued businesses

 

 

111.3

 

 

 

113.0

 

Total liabilities

 

 

12,071.4

 

 

 

12,147.0

 

Commitments and contingencies

 

 

 

 

 

 

Shareholders’ Equity

 

 

 

 

 

 

Preferred stock, par value $0.01 per share; 20.0 million shares authorized; none issued

 

 

 

 

 

 

Common stock, par value $0.01 per share; 300.0 million shares authorized;
   
60.5 million shares issued

 

 

0.6

 

 

 

0.6

 

Additional paid-in capital

 

 

1,941.3

 

 

 

1,939.2

 

Accumulated other comprehensive loss

 

 

(548.9

)

 

 

(517.2

)

Retained earnings

 

 

2,993.9

 

 

 

2,909.4

 

Treasury stock at cost (24.6 million and 24.7 million shares)

 

 

(1,864.2

)

 

 

(1,866.4

)

Total shareholders’ equity

 

 

2,522.7

 

 

 

2,465.6

 

Total liabilities and shareholders’ equity

 

$

14,594.1

 

 

$

14,612.6

 

The accompanying notes are an integral part of these interim consolidated financial statements.

4


THE HANOVER INSURANCE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)

 

 

Three Months Ended

 

 

 

 

March 31,

 

 

(In millions)

 

2024

 

 

2023

 

 

Preferred Stock

 

 

 

 

 

 

 

Balance at beginning and end of period

 

$

 

 

$

 

 

Common Stock

 

 

 

 

 

 

 

Balance at beginning and end of period

 

 

0.6

 

 

 

0.6

 

 

Additional Paid-in Capital

 

 

 

 

 

 

 

Balance at beginning of period

 

 

1,939.2

 

 

 

1,913.1

 

 

Employee and director stock-based awards and other

 

 

2.1

 

 

 

0.5

 

 

Balance at end of period

 

 

1,941.3

 

 

 

1,913.6

 

 

Accumulated Other Comprehensive Loss, net of tax

 

 

 

 

 

 

 

Net Unrealized Appreciation (Depreciation) on Investments:

 

 

 

 

 

 

 

Balance at beginning of period

 

 

(462.8

)

 

 

(641.4

)

 

Net appreciation (depreciation) on available-for-sale securities

 

 

(34.1

)

 

 

94.3

 

 

Balance at end of period

 

 

(496.9

)

 

 

(547.1

)

 

Defined Benefit Pension and Postretirement Plans:

 

 

 

 

 

 

 

Balance at beginning of period

 

 

(54.8

)

 

 

(64.1

)

 

Net amount recognized as net periodic benefit cost

 

 

1.4

 

 

 

1.6

 

 

Balance at end of period

 

 

(53.4

)

 

 

(62.5

)

 

Long Duration Insurance Contracts:

 

 

 

 

 

 

 

Balance at beginning of period

 

 

0.4

 

 

 

4.0

 

 

Net change in market risk

 

 

1.0

 

 

 

(2.1

)

 

Balance at end of period

 

 

1.4

 

 

 

1.9

 

 

Total accumulated other comprehensive loss

 

 

(548.9

)

 

 

(607.7

)

 

Retained Earnings

 

 

 

 

 

 

 

Balance at beginning of period

 

 

2,909.4

 

 

 

2,992.9

 

 

Net income (loss)

 

 

115.5

 

 

 

(12.0

)

 

Dividends to shareholders

 

 

(31.0

)

 

 

(29.3

)

 

Balance at end of period

 

 

2,993.9

 

 

 

2,951.6

 

 

Treasury Stock

 

 

 

 

 

 

 

Balance at beginning of period

 

 

(1,866.4

)

 

 

(1,871.4

)

 

Net shares reissued at cost under employee stock-based compensation plans

 

 

2.2

 

 

 

2.3

 

 

Balance at end of period

 

 

(1,864.2

)

 

 

(1,869.1

)

 

Total shareholders’ equity

 

$

2,522.7

 

 

$

2,389.0

 

 

 

The accompanying notes are an integral part of these interim consolidated financial statements.

5


THE HANOVER INSURANCE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 

 

Three Months Ended

 

 

 

March 31,

 

(In millions)

 

2024

 

 

2023

 

Cash Flows From Operating Activities

 

 

 

 

 

 

Net income (loss)

 

$

115.5

 

 

$

(12.0

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

 

 

Net realized and unrealized investment (gains) losses

 

 

(5.5

)

 

 

22.8

 

Net amortization and depreciation

 

 

0.8

 

 

 

2.2

 

Stock-based compensation expense

 

 

6.7

 

 

 

7.1

 

Amortization of defined benefit plan costs

 

 

1.7

 

 

 

2.0

 

Deferred income tax expense (benefit)

 

 

1.1

 

 

 

(7.7

)

Change in deferred acquisition costs

 

 

1.5

 

 

 

7.0

 

Change in premiums receivable, net of reinsurance premiums payable

 

 

(36.6

)

 

 

6.8

 

Change in loss, loss adjustment expense and unearned premium reserves

 

 

24.9

 

 

 

145.6

 

Change in reinsurance recoverable

 

 

56.3

 

 

 

(8.2

)

Change in expenses and taxes payable

 

 

(89.6

)

 

 

(114.0

)

Other, net

 

 

(18.1

)

 

 

(33.5

)

Net cash provided by operating activities

 

 

58.7

 

 

 

18.1

 

Cash Flows From Investing Activities

 

 

 

 

 

 

Proceeds from disposals and maturities of fixed maturities

 

 

213.8

 

 

 

171.7

 

Proceeds from disposals of equity securities and other investments

 

 

17.9

 

 

 

7.8

 

Purchase of fixed maturities

 

 

(289.5

)

 

 

(259.2

)

Purchase of equity securities and other investments

 

 

(14.4

)

 

 

(23.3

)

Capital expenditures

 

 

(2.6

)

 

 

(3.5

)

Net cash used in investing activities

 

 

(74.8

)

 

 

(106.5

)

Cash Flows From Financing Activities

 

 

 

 

 

 

Proceeds from exercise of employee stock options

 

 

4.2

 

 

 

3.0

 

Dividends paid to shareholders

 

 

(30.5

)

 

 

(28.9

)

Other financing activities

 

 

(9.1

)

 

 

(9.2

)

Net cash used in financing activities

 

 

(35.4

)

 

 

(35.1

)

Net change in cash and cash equivalents

 

 

(51.5

)

 

 

(123.5

)

Cash and cash equivalents, beginning of period

 

 

316.1

 

 

 

305.0

 

Cash and cash equivalents, end of period

 

$

264.6

 

 

$

181.5

 

 

The accompanying notes are an integral part of these interim consolidated financial statements.

6


 

THE HANOVER INSURANCE GROUP, INC. AND SUBSIDIARIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Basis of Presentation and Principles of Consolidation

The accompanying unaudited consolidated financial statements of The Hanover Insurance Group, Inc. and its subsidiaries (“THG” or the “Company”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and with the requirements of Form 10-Q. Certain financial information that is provided in annual financial statements, but is not required in interim reports, has been omitted.

The interim consolidated financial statements of THG include the accounts of The Hanover Insurance Company (“Hanover Insurance”) and Citizens Insurance Company of America (“Citizens”), THG’s principal property and casualty companies; and other insurance and non-insurance subsidiaries. These legal entities conduct their operations through several business segments discussed in Note 8 – “Segment Information.” All intercompany accounts and transactions have been eliminated.

The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

In the opinion of the Company’s management, the accompanying interim consolidated financial statements reflect all adjustments, consisting of normal recurring items, necessary for a fair presentation of the financial position and results of operations. The results of operations for the three months ended March 31, 2024, are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with the Company’s 2023 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 22, 2024.

2. New Accounting Pronouncements

Recently Issued Standards

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This Update requires entities to disclose an annual tabular rate reconciliation, using both percentages and currency amounts, broken out into specific categories, to the extent those items exceed a specified threshold. In addition, all entities are required to disclose annual income taxes paid, net of refunds received, disaggregated by federal, state, and foreign jurisdictions, and for individual jurisdictions when the amount is at least five percent of total income tax payments, net of refunds received. This Update is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted. This guidance may be implemented either on a prospective or retrospective basis. The Company does not expect implementation of this guidance to have a material effect on its financial position or results of operations, as the Update is disclosure related.

In November 2023, the FASB issued ASC Update No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This Update requires entities to disclose significant segment expenses and other segment items on an annual and interim basis, and to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Additionally, it requires entities to disclose the title and position of the Chief Operating Decision Maker (“CODM”), and an explanation of how the CODM uses the reported measures of segment profit or loss. The Update does not change how entities identify operating segments, aggregate them, or apply the quantitative thresholds to determine reportable segments. This Update is effective for annual reporting periods beginning after December 15, 2023, and interim reporting periods beginning after December 15, 2024, with early adoption permitted. The guidance should be applied retrospectively to all prior periods presented in the financial statements. The Company does not expect implementation of this guidance to have a material effect on its financial position or results of operations, as the Update is disclosure related.

7


3. Investments

A. Fixed maturities

The amortized cost and fair value of available-for-sale fixed maturities were as follows:

 

 

March 31, 2024

 

 

 

 

 

 

 

 

 

Amortized Cost,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance

 

 

Net of Allowance

 

 

Gross

 

 

Gross

 

 

 

 

 

 

Amortized

 

 

for Credit

 

 

for Credit

 

 

Unrealized

 

 

Unrealized

 

 

 

 

(in millions)

 

Cost

 

 

Losses

 

 

Losses

 

 

Gains

 

 

Losses

 

 

Fair Value

 

U.S. Treasury and government agencies

 

$

520.0

 

 

$

 

 

$

520.0

 

 

$

0.5

 

 

$

58.8

 

 

$

461.7

 

Foreign governments

 

 

3.5

 

 

 

 

 

 

3.5

 

 

 

 

 

 

 

 

 

3.5

 

Municipals

 

 

1,300.7

 

 

 

 

 

 

1,300.7

 

 

 

3.8

 

 

 

131.5

 

 

 

1,173.0

 

Corporate

 

 

4,109.2

 

 

 

(1.6

)

 

 

4,107.6

 

 

 

16.6

 

 

 

235.8

 

 

 

3,888.4

 

Residential mortgage-backed

 

 

1,469.1

 

 

 

 

 

 

1,469.1

 

 

 

2.7

 

 

 

145.7

 

 

 

1,326.1

 

Commercial mortgage-backed

 

 

873.0

 

 

 

 

 

 

873.0

 

 

 

0.1

 

 

 

67.5

 

 

 

805.6

 

Other asset-backed

 

 

371.5

 

 

 

 

 

 

371.5

 

 

 

0.5

 

 

 

14.9

 

 

 

357.1

 

Total fixed maturities

 

$

8,647.0

 

 

$

(1.6

)

 

$

8,645.4

 

 

$

24.2

 

 

$

654.2

 

 

$

8,015.4

 

 

 

 

December 31, 2023

 

 

 

 

 

 

 

 

 

Amortized Cost,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance

 

 

Net of Allowance

 

 

Gross

 

 

Gross

 

 

 

 

 

 

Amortized

 

 

for Credit

 

 

for Credit

 

 

Unrealized

 

 

Unrealized

 

 

 

 

(in millions)

 

Cost

 

 

Losses

 

 

Losses

 

 

Gains

 

 

Losses

 

 

Fair Value

 

U.S. Treasury and government agencies

 

$

512.9

 

 

$

 

 

$

512.9

 

 

$

1.4

 

 

$

51.7

 

 

$

462.6

 

Foreign governments

 

 

2.2

 

 

 

 

 

 

2.2

 

 

 

 

 

 

 

 

 

2.2

 

Municipals

 

 

1,309.3

 

 

 

 

 

 

1,309.3

 

 

 

5.5

 

 

 

129.6

 

 

 

1,185.2

 

Corporate

 

 

4,053.8

 

 

 

(1.9

)

 

 

4,051.9

 

 

 

22.9

 

 

 

225.1

 

 

 

3,849.7

 

Residential mortgage-backed

 

 

1,435.6

 

 

 

 

 

 

1,435.6

 

 

 

5.5

 

 

 

130.2

 

 

 

1,310.9

 

Commercial mortgage-backed

 

 

890.3

 

 

 

 

 

 

890.3

 

 

 

0.1

 

 

 

72.2

 

 

 

818.2

 

Other asset-backed

 

 

371.7

 

 

 

 

 

 

371.7

 

 

 

0.7

 

 

 

15.9

 

 

 

356.5

 

Total fixed maturities

 

$

8,575.8

 

 

$

(1.9

)

 

$

8,573.9

 

 

$

36.1

 

 

$

624.7

 

 

$

7,985.3

 

 

The Company deposits funds with various state and governmental authorities. For a discussion of the Company’s deposits with state and governmental authorities, see also Note 2 – “Investments” in the Notes to Consolidated Financial Statements in the Company’s 2023 Annual Report on Form 10-K.

The amortized cost and fair value by maturity periods for fixed maturities are shown in the following table. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties, or the Company may have the right to put or sell the obligations back to the issuers.

 

 

 

March 31, 2024

 

 

 

Amortized Cost, Net

 

 

 

 

 

 

of Allowance for

 

 

Fair

 

(in millions)

 

Credit Losses

 

 

Value

 

Due in one year or less

 

$

481.3

 

 

$

476.7

 

Due after one year through five years

 

 

2,744.1

 

 

 

2,641.8

 

Due after five years through ten years

 

 

2,403.5

 

 

 

2,136.9

 

Due after ten years

 

 

302.9

 

 

 

271.2

 

 

 

5,931.8

 

 

 

5,526.6

 

Mortgage-backed and other asset-backed securities

 

 

2,713.6

 

 

 

2,488.8

 

Total fixed maturities

 

$

8,645.4

 

 

$

8,015.4

 

 

8


B. Fixed maturity securities in an unrealized loss position

The following tables provide information about the Company’s available-for-sale fixed maturity securities that were in an unrealized loss position at March 31, 2024 and December 31, 2023, including the length of time the securities have been in an unrealized loss position:

 

 

 

March 31, 2024

 

 

 

12 months or less

 

 

Greater than 12 months

 

 

Total

 

 

 

Gross

 

 

 

 

 

Gross

 

 

 

 

 

Gross

 

 

 

 

 

 

Unrealized

 

 

Fair

 

 

Unrealized

 

 

Fair

 

 

Unrealized

 

 

Fair

 

(in millions)

 

Losses

 

 

Value

 

 

Losses

 

 

Value

 

 

Losses

 

 

Value

 

Investment grade:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and government agencies

 

$

1.6

 

 

$

98.3

 

 

$

57.2

 

 

$

323.1

 

 

$

58.8

 

 

$

421.4

 

Foreign governments

 

 

 

 

 

 

 

 

 

 

 

1.9

 

 

 

 

 

 

1.9

 

Municipals

 

 

1.1

 

 

 

85.3

 

 

 

130.4

 

 

 

943.8

 

 

 

131.5

 

 

 

1,029.1

 

Corporate

 

 

2.3

 

 

 

260.7

 

 

 

223.9

 

 

 

2,779.6

 

 

 

226.2

 

 

 

3,040.3

 

Residential mortgage-backed

 

 

3.5

 

 

 

286.9

 

 

 

142.2

 

 

 

859.1

 

 

 

145.7

 

 

 

1,146.0

 

Commercial mortgage-backed

 

 

0.1

 

 

 

8.4

 

 

 

67.4

 

 

 

763.8

 

 

 

67.5

 

 

 

772.2

 

Other asset-backed

 

 

0.2

 

 

 

41.4

 

 

 

14.7

 

 

 

252.4

 

 

 

14.9

 

 

 

293.8

 

Total investment grade

 

 

8.8

 

 

 

781.0

 

 

 

635.8

 

 

 

5,923.7

 

 

 

644.6

 

 

 

6,704.7

 

Below investment grade:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate

 

 

1.2

 

 

 

34.0

 

 

 

8.4

 

 

 

67.9

 

 

 

9.6

 

 

 

101.9

 

Total fixed maturities

 

$

10.0

 

 

$

815.0

 

 

$

644.2

 

 

$

5,991.6

 

 

$

654.2

 

 

$

6,806.6

 

 

 

 

December 31, 2023

 

 

 

12 months or less

 

 

Greater than 12 months

 

 

Total

 

 

 

Gross

 

 

 

 

 

Gross

 

 

 

 

 

Gross

 

 

 

 

 

 

Unrealized

 

 

Fair

 

 

Unrealized

 

 

Fair

 

 

Unrealized

 

 

Fair

 

(in millions)

 

Losses

 

 

Value

 

 

Losses