Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2023 | Apr. 25, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-31792 | |
Entity Registrant Name | CNO Financial Group, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 75-3108137 | |
Entity Address, Address Line One | 11825 N. Pennsylvania Street | |
Entity Address, City or Town | Carmel, | |
Entity Address, State or Province | IN | |
Entity Address, Postal Zip Code | 46032 | |
City Area Code | (317) | |
Local Phone Number | 817-6100 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 114,553,509 | |
Entity Central Index Key | 0001224608 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Common Stock, par value $0.01 per share | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | CNO | |
Security Exchange Name | NYSE | |
Rights to purchase Series E Junior Participating Preferred Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Rights to purchase Series E Junior Participating Preferred Stock | |
Security Exchange Name | NYSE | |
No Trading Symbol Flag | true | |
5.125% Subordinated Debentures due 2060 | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 5.125% Subordinated Debentures due 2060 | |
Trading Symbol | CNOpA | |
Security Exchange Name | NYSE |
CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Investments: | ||
Fixed maturities, available for sale, at fair value (net of allowance for credit losses: March 31, 2023 - $59.1 and December 31, 2022 - $56.0; amortized cost: March 31, 2023 - $23,517.9 and December 31, 2022 - $23,384.2) | $ 21,107.1 | $ 20,353.4 |
Equity securities at fair value | 106.1 | 135.3 |
Mortgage loans (net of allowance for credit losses: March 31, 2023 - $8.4 and December 31, 2022 - $8.0) | 1,676.1 | 1,411.9 |
Policy loans | 123 | 121.6 |
Trading securities | 208.1 | 207.9 |
Investments held by variable interest entities (net of allowance for credit losses: March 31, 2023 - $3.5 and December 31, 2022 - $5.5; amortized cost: March 31, 2023 - $1,060.3 and December 31, 2022 - $1,134.2) | 1,017.9 | 1,077.6 |
Other invested assets | 1,097.1 | 1,034.7 |
Total investments | 25,335.4 | 24,342.4 |
Cash and cash equivalents - unrestricted | 425 | 575.7 |
Cash and cash equivalents held by variable interest entities | 97.1 | 69.2 |
Accrued investment income | 241.3 | 235.6 |
Present value of future profits | 197.6 | 203.7 |
Deferred acquisition costs | 1,811.3 | 1,770.9 |
Reinsurance receivables (net of allowance for credit losses: March 31, 2023 - $2.0 and December 31, 2022 - $2.0) | 4,189.6 | 4,223.4 |
Market risk benefit asset | 57.8 | 65.3 |
Income tax assets, net | 988.1 | 1,063.4 |
Assets held in separate accounts | 2.8 | 2.7 |
Other assets | 669 | 580.8 |
Total assets | 34,015 | 33,133.1 |
Liabilities for insurance products: | ||
Policyholder account balances | 15,302.9 | 15,234.2 |
Future policy benefits | 11,623.3 | 11,240.2 |
Market risk benefit liability | 17.6 | 11.3 |
Liability for life insurance policy claims | 67.6 | 64.1 |
Unearned and advanced premiums | 243.5 | 235 |
Liabilities related to separate accounts | 2.8 | 2.7 |
Other liabilities | 681.3 | 693.9 |
Investment borrowings | 1,839.6 | 1,639.5 |
Borrowings related to variable interest entities | 1,065.4 | 1,104.6 |
Notes payable – direct corporate obligations | 1,139.2 | 1,138.8 |
Total liabilities | 31,983.2 | 31,364.3 |
Commitments and Contingencies | ||
Shareholders' equity: | ||
Common stock ($0.01 par value, 8,000,000,000 shares authorized, shares issued and outstanding: March 31, 2023 – 114,905,172; December 31, 2022 – 114,343,070) | 1.1 | 1.1 |
Additional paid-in capital | 2,021.1 | 2,033.8 |
Accumulated other comprehensive loss | (1,664.4) | (1,957.3) |
Retained earnings | 1,674 | 1,691.2 |
Total shareholders' equity | 2,031.8 | 1,768.8 |
Total liabilities and shareholders' equity | $ 34,015 | $ 33,133.1 |
CONSOLIDATED BALANCE SHEET (Par
CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Investments: | ||
Fixed maturities, available for sale, allowance for credit losses | $ 59.1 | $ 56 |
Fixed maturities, available for sale, amortized cost | 23,517.9 | 23,384.2 |
Mortgage loans, allowance for credit losses | 8.4 | 8 |
Investments held by variable interest entities, allowance for credit losses | 3.5 | 5.5 |
Investments held by variable interest entities, amortized cost | 1,060.3 | 1,134.2 |
Reinsurance receivables, allowance for current expected credit losses | $ 2 | $ 2 |
Shareholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 8,000,000,000 | 8,000,000,000 |
Common stock, shares issued (in shares) | 114,905,172 | 114,343,070 |
Common stock, shares outstanding (in shares) | 114,905,172 | 114,343,070 |
CONSOLIDATED STATEMENT OF OPERA
CONSOLIDATED STATEMENT OF OPERATIONS - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenues: | ||
Insurance policy income | $ 625.5 | $ 625 |
Net investment income: | ||
General account assets | 292.2 | 277.5 |
Policyholder and other special-purpose portfolios | 50.8 | (69.3) |
Investment gains (losses): | ||
Realized investment gains (losses) | (14.6) | 18.8 |
Other investment losses | 0 | (51.5) |
Total investment losses | (14.6) | (32.7) |
Fee revenue and other income | 52.1 | 42.4 |
Total revenues | 1,006 | 842.9 |
Benefits and expenses: | ||
Insurance policy benefits | 609.7 | 333.9 |
Liability for future policy benefits remeasurement loss | 0.6 | 7 |
Change in fair value of market risk benefits | 14.8 | (32.7) |
Interest expense | 54.7 | 23.8 |
Amortization | 55.5 | 52.3 |
Other operating costs and expenses | 271.7 | 218.3 |
Total benefits and expenses | 1,007 | 602.6 |
Income (loss) before income taxes | (1) | 240.3 |
Income tax expense (benefit) on period income (loss) | (0.2) | 56.9 |
Net income (loss) | $ (0.8) | $ 183.4 |
Basic: | ||
Weighted average shares outstanding (in shares) | 114,545 | 118,622 |
Net income (loss) (in dollars per share) | $ (0.01) | $ 1.55 |
Diluted: | ||
Weighted average shares outstanding (in shares) | 114,545 | 121,002 |
Net income (loss) (in dollars per share) | $ (0.01) | $ 1.52 |
CONSOLIDATED STATEMENT OF COMPR
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ (0.8) | $ 183.4 |
Other comprehensive loss, before tax: | ||
Unrealized gains (losses) on investments | 626.1 | (2,435.1) |
Adjustment to discount rate for liability for future policy benefits | (263.3) | 1,220.4 |
Adjustment to instrument-specific credit risk for market risk benefits | 0.9 | 6.6 |
Reclassification adjustments: | ||
For net realized investment (gains) losses included in net income | 10.9 | 7.8 |
Other comprehensive income (loss) before tax | 374.6 | (1,200.3) |
Income tax (expense) benefit related to items of accumulated other comprehensive income (loss) | (81.7) | 265.1 |
Other comprehensive income (loss), net of tax | 292.9 | (935.2) |
Comprehensive income (loss) | $ 292.1 | $ (751.8) |
CONSOLIDATED STATEMENT OF SHARE
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY - USD ($) $ in Millions | Total | Common stock | Additional paid-in capital | Accumulated other comprehensive income (loss) | Retained earnings |
Balance, beginning of period (in shares) at Dec. 31, 2021 | 120,377,000 | ||||
Balance, beginning of period at Dec. 31, 2021 | $ 3,684.7 | $ 1.2 | $ 2,184.2 | $ 373.7 | $ 1,125.6 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 183.4 | 183.4 | |||
Change in unrealized appreciation (depreciation) of investments (net of applicable income tax benefit (expense) | (935.2) | (935.2) | |||
Common stock repurchased (in shares) | (4,057,000) | ||||
Common stock repurchased | (100) | (100) | |||
Dividends on common stock | (16) | (16) | |||
Employee benefit plans, net of shares used to pay tax withholdings (in shares) | 921,000 | ||||
Employee benefit plans, net of shares used to pay tax withholdings | 1.5 | 1.5 | |||
Balance, end of period (in shares) at Mar. 31, 2022 | 117,241,000 | ||||
Balance, end of period at Mar. 31, 2022 | $ 2,818.4 | $ 1.2 | 2,085.7 | (561.5) | 1,293 |
Balance, beginning of period (in shares) at Dec. 31, 2022 | 114,343,070 | 114,343,000 | |||
Balance, beginning of period at Dec. 31, 2022 | $ 1,768.8 | $ 1.1 | 2,033.8 | (1,957.3) | 1,691.2 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (0.8) | (0.8) | |||
Change in unrealized appreciation (depreciation) of investments (net of applicable income tax benefit (expense) | 292.9 | 292.9 | |||
Common stock repurchased (in shares) | (633,000) | ||||
Common stock repurchased | (15.1) | (15.1) | |||
Dividends on common stock | (16.4) | (16.4) | |||
Employee benefit plans, net of shares used to pay tax withholdings (in shares) | 1,195,000 | ||||
Employee benefit plans, net of shares used to pay tax withholdings | $ 2.4 | 2.4 | |||
Balance, end of period (in shares) at Mar. 31, 2023 | 114,905,172 | 114,905,000 | |||
Balance, end of period at Mar. 31, 2023 | $ 2,031.8 | $ 1.1 | $ 2,021.1 | $ (1,664.4) | $ 1,674 |
CONSOLIDATED STATEMENT OF SHA_2
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||
Change in unrealized appreciation (depreciation) of investments, applicable income tax benefit | $ (81.7) | $ 265.1 |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities: | ||
Insurance policy income | $ 582.2 | $ 580.8 |
Net investment income | 315 | 260.5 |
Fee revenue and other income | 50.4 | 49.8 |
Insurance policy benefits | (410.9) | (416.8) |
Interest expense | (38.6) | (9.7) |
Deferrable policy acquisition costs | (89.8) | (83.7) |
Other operating costs | (320.2) | (309.9) |
Income taxes | (6.2) | (14.6) |
Net cash from operating activities | 81.9 | 56.4 |
Cash flows from investing activities: | ||
Sales of investments | 486.5 | 1,520.6 |
Maturities and redemptions of investments | 276.8 | 494.9 |
Purchases of investments | (1,147.7) | (2,995.2) |
Net purchases of trading securities | (8.4) | (17.3) |
Other | (13.9) | (13.3) |
Net cash used by investing activities | (406.7) | (1,010.3) |
Cash flows from financing activities: | ||
Issuance of common stock | 8.1 | 4 |
Payments to repurchase common stock | (25.8) | (109.8) |
Common stock dividends paid | (17.1) | (16.1) |
Amounts received for deposit products | 498.3 | 1,392.6 |
Withdrawals from deposit products | (422.1) | (364.2) |
Issuance of investment borrowings: | ||
Federal Home Loan Bank | 620.5 | 0 |
Payments on investment borrowings: | ||
Federal Home Loan Bank | (420.4) | (75.3) |
Related to variable interest entities | (39.5) | (15) |
Net cash provided by financing activities | 202 | 816.2 |
Net decrease in cash and cash equivalents | (122.8) | (137.7) |
Cash and cash equivalents - unrestricted and held by variable interest entities, beginning of period | 644.9 | 731.7 |
Cash and cash equivalents - unrestricted and held by variable interest entities, end of period | $ 522.1 | $ 594 |
BUSINESS AND BASIS OF PRESENTAT
BUSINESS AND BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS AND BASIS OF PRESENTATION | BUSINESS AND BASIS OF PRESENTATION CNO Financial Group, Inc., a Delaware corporation ("CNO"), is a holding company for a group of insurance companies operating throughout the United States that develop, market and administer health insurance, annuity, individual life insurance and other insurance products. The terms "CNO Financial Group, Inc.", "CNO", the "Company", "we", "us", and "our" as used in these financial statements refer to CNO and its subsidiaries. Such terms, when used to describe insurance business and products, refer to the insurance business and products of CNO's insurance subsidiaries. We focus on serving middle-income pre-retiree and retired Americans, which we believe are attractive, underserved, high growth markets. We sell our products through exclusive agents, independent producers (some of whom sell one or more of our product lines exclusively) and direct marketing. Our unaudited consolidated financial statements reflect normal recurring adjustments that, in the opinion of management, are necessary for a fair statement of our financial position, results of operations and cash flows for the periods presented. As permitted by rules and regulations of the Securities and Exchange Commission (the "SEC") applicable to quarterly reports on Form 10-Q, we have condensed or omitted certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Results for interim periods are not necessarily indicative of the results that may be expected for a full year. Effective January 1, 2023, we adopted Accounting Standards Update 2018-12 ("ASU 2018-12") related to targeted improvements to the accounting for long-duration insurance contracts, with a transition date of January 1, 2021 (the "Transition Date"). The adoption of ASU 2018-12 impacted accounting and presentation related to long-duration insurance contracts and certain related balances for the years ended December 31, 2022 and 2021. Amounts within these interim financial statements, which were previously presented, have been recast to conform with the current accounting and presentation under ASU 2018-12. Disclosures of the impacts of ASU 2018-12 as of the Transition Date are included within the tables in the note to the consolidated financial statements entitled "Recently Adopted Accounting Standards." Except for balances affected by the adoption of ASU 2018-12, the December 31, 2022 consolidated balance sheet data was derived from the audited consolidated financial statements included in our 2022 Annual Report on Form 10-K. Accordingly, these interim consolidated financial statements should be read together with the consolidated financial statements included in our 2022 Annual Report on Form 10-K. When we prepare financial statements in conformity with GAAP, we are required to make estimates and assumptions that significantly affect reported amounts of various assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting periods. For example, we use significant estimates and assumptions to calculate values for deferred acquisition costs, the present value of future profits, fair value measurements of certain investments (including derivatives), allowance for credit losses and other-than-temporary impairments of investments, assets and liabilities related to income taxes, liabilities for insurance products, liabilities related to litigation and guaranty fund assessment accruals. If our future experience differs from these estimates and assumptions, our financial statements could be materially affected. The accompanying financial statements are unaudited and include the accounts of the Company and its subsidiaries. Our consolidated financial statements exclude transactions between us and our consolidated affiliates, or among our consolidated affiliates. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The following summarizes the significant accounting policies that have been added or updated as a result of the adoption of ASU 2018-12: Deferred acquisition costs, present value of future profits and sales inducements Deferred acquisition costs represent policy acquisition costs that have been capitalized and are subject to amortization. Capitalized costs are incremental costs directly related to the successful acquisition of new or renewal insurance contracts. Such costs consist primarily of commissions, underwriting, sales and contract issuance and processing expenses. Contracts are grouped by contract type and issue year into cohorts consistent with the grouping used in estimating the associated liability. Deferred acquisition costs are amortized on a constant level basis for the grouped contracts over the expected term of the related contracts to approximate straight-line amortization. For life and health insurance products, the constant level basis used is policy counts. For all annuity products, the constant level basis used is the initial deposit in force. The constant level bases used for amortization are projected using mortality and lapse assumptions that are based on our experience, industry data, and other factors and are consistent with those used for the liability for future policy benefits. If those projected assumptions change in future periods, they will be reflected in the cohort level amortization basis at the time. Unexpected lapses, due to higher mortality and lapse experience than expected, are recognized in the current period as a reduction of the capitalized balances. Changes in future estimates are recognized prospectively over the remaining expected contract term. The carrying amount of deferred acquisition costs is not subject to recovery testing upon the adoption of ASU 2018-12. The present value of future profits is the value assigned to the right to receive future cash flows from policyholder insurance contracts existing at September 10, 2003 (the effective date of the bankruptcy reorganization of our Predecessor). The present value of future profits is amortized in the same manner as described above for deferred acquisition costs, although such balances are subject to periodic recovery testing. Certain of our annuity products offer sales inducements to contract holders in the form of enhanced crediting rates or bonus payments in the initial period of the contract. Certain of our life insurance products offer persistency bonuses credited to the contract holder's balance after the policy has been outstanding for a specified period of time. These enhanced rates and persistency bonuses are considered sales inducements in accordance with GAAP. Such amounts are deferred and amortized in the same manner as deferred acquisition costs (and are classified as deferred acquisition costs in the consolidated balance sheet). Unlike deferred acquisition costs, such amounts are considered contractual cash flows and, as a result, are subject to periodic recovery testing. Market risk benefits Market risk benefits ("MRBs") are contracts or contract features that both provide protection to the contract holder from other-than-nominal capital market risk and expose the Company to other-than-nominal capital market risk. Many of our fixed indexed annuity products include a guaranteed living withdrawal benefit ("GLWB") that is considered a MRB. MRBs are measured at fair value using an option-based valuation model based on amount of exposure, market data, Company experience and other factors. Changes in fair value are recognized in earnings each period with the exception of the portion of the change in fair value due to a change in the instrument-specific credit risk, which is recognized in accumulated other comprehensive income (loss). MRBs in an asset position are presented separately from those in a liability position as there is no legal right of offset between contracts. Policyholder account balances Policyholder account balances represent the contract value that has accrued to the benefit of the policyholder as of the balance sheet date. It includes the accumulated account deposits, plus interest credited, less policyholder withdrawals and, if applicable, charges assessed. This balance also includes liabilities for the funding agreement-backed notes ("FABN"). Liability for future policy benefits The liability for future policy benefits is the present value of estimated future policy benefits to be paid to or on behalf of policyholders and certain related expenses (where the timing and amount of payment depends on policyholder mortality or morbidity), less the present value of estimated future net premiums to be collected from policyholders (where net premiums are gross premiums multiplied by the net-to-gross ratio discussed below). The liability for future policy benefits is accrued over time as premium revenue is recognized. The liability is estimated using current assumptions that include discount rates, mortality, morbidity, lapse/withdrawal rates and expenses. Such assumptions are based on our historical experience, industry data, and other factors that are inherently uncertain. This liability also includes the amount of total reserves above (below) policyholder account balances for our fixed indexed annuity products due to the valuation of the related embedded derivative. The liability for future policy benefits is established using a net premium ratio approach where net premiums (the portion of gross premiums required to fund expected insurance benefits and claims settlement expenses) under the contract are accrued each period as the liability for future policy benefits. The net premium ratio used to accrue the liability for future policy benefits in each period is determined by using the historical and present value of expected future benefits and claim adjustment expenses for the cohort divided by the historical and present value of expected future gross premiums for the cohort. Our long duration insurance contracts are grouped into annual calendar-year cohorts primarily based on the contractual issue date, marketing distribution channel, legal entity and product type. Single premium contracts are grouped into separate cohorts from other traditional products. Riders are generally combined with the base policy. Insurance contracts which were issued prior to September 10, 2003 (the effective date of the bankruptcy reorganization of Conseco, Inc. (the "Predecessor")) are grouped by marketing distribution channel, legal entity and product type in a single issue year cohort. The liability is adjusted for differences between actual and expected experience. We review our historical and future cash flow assumptions quarterly and update the net premium ratio used to calculate the liability each time the assumptions are changed. Each quarter, we update our estimates of cash flows expected over the entire life of a group of contracts using actual historical experience and current future cash flow assumptions. These updated cash flows are used to calculate the revised net premiums and net premium ratio, which are used to derive an updated liability for future policy benefits as of the beginning of the current reporting period, discounted at the original contract issuance discount rate. This amount is then compared to the carrying amount of the liability as of that same date, before the updating of cash flow assumptions, to determine the current period change in liability estimate. This current period change in the liability is the liability remeasurement gain or loss and is presented as a separate component of benefit expense in the consolidated statement of operations. In subsequent periods, the revised net premiums are used to measure the liability for future policy benefits, subject to future revisions. If a cohort is in a loss position where the liability for future policy benefits plus the present value of expected future gross premiums is determined to be insufficient to provide for expected future policy benefits and claim settlement costs, the net to gross ratio is capped at 100 percent. When this occurs, all changes in expected benefits resulting from both actual experience deviations and changes in future assumptions are recognized immediately. The locked-in discount rate is generally based on expected investment returns at contract inception for contracts issued prior to January 1, 2021 and the upper medium grade fixed income corporate instrument yield ("A" credit rated corporate bond yield) at contract inception for contracts issued after January 1, 2021. The contract inception date for contracts issued by the Predecessor is September 10, 2003. The discount rate in effect at contract inception is locked-in for the calculation of the net to gross ratio and accretion of interest cost on the liability is recorded through net income. However, for balance sheet remeasurement purposes, the discount rate is updated using the current rate at each reporting period with the impact resulting from such updates recorded in other comprehensive income. We develop discount rate curves for discounting cash flows to calculate the liability for future policy benefits based on the duration characteristics of the underlying liabilities. For liability cash flows that are projected beyond the duration of market-observable A-credit-rated fixed-income instruments, we use the last market-observable yield level and use linear interpolation to determine yield assumptions for durations that do not have market-observable yields. Liability for life insurance policy claims The liability for life insurance policy claims include life policy and contract claims, including incurred but not reported claims. The liability for these claims is based on our estimated ultimate cost to settle all claims that have been incurred as of the reporting date. Such amounts are estimated based on an analysis of historical patterns of claims, which are continually reviewed and updated. Adjustments resulting from differences between our estimates and actual payments are recognized in the period the estimates are made or claims are paid. Deferred profit liability For limited-payment products, gross premiums received in excess of net premiums are deferred at initial recognition as a deferred profit liability ("DPL"). Gross premiums are measured using assumptions consistent with those used in the measurement of the liability for future policy benefits, including discount rate, mortality, lapses and expenses. The DPL is amortized and recognized in insurance policy benefits in proportion to insurance in force for life insurance contracts and expected future benefit payments for annuity contracts. Interest is accreted on the balance of the DPL using the discount rate determined at contract issuance. We review and update the estimate of cash flows for the DPL at the same time as the estimate of cash flows for the liability for future policy benefits. When cash flows are updated, the updated estimates are used to recalculate the DPL at contract issuance. The recalculated DPL as of the beginning of the current reporting period is compared to the carrying amount of the DPL as of the beginning of the current reporting period and any difference is recognized as either a charge or credit to insurance policy benefits. On the balance sheet, the DPL is recorded as a component of the liability for future policy benefits and was $57.7 million at March 31, 2023. Reinsurance We have determined that each of our reinsurance agreements provide indemnification against loss or liability relating to insurance risk in accordance with applicable accounting standards. Such reinsurance permits recovery of the reinsured losses from reinsurers, although it does not discharge our primary liability as the direct insurer of the risks reinsured. The reinsurance recoverable for traditional and limited-payment contracts is generally measured using a net premium ratio approach to accrue the projected net gain or loss on reinsurance in proportion to the gross premiums of the underlying reinsured cohorts. Such amount is adjusted on a quarterly basis for actual experience and at least once a year for any changes in cash flow assumptions. |
RECENTLY ADOPTED ACCOUNTING STA
RECENTLY ADOPTED ACCOUNTING STANDARDS | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Changes and Error Corrections [Abstract] | |
RECENTLY ADOPTED ACCOUNTING STANDARDS | RECENTLY ADOPTED ACCOUNTING STANDARDS We adopted ASU 2018-12 effective January 1, 2023. The new guidance: (i) improves the timeliness of recognizing changes in the liability for future benefits and modifies the rate used to discount future cash flows; (ii) simplifies and improves the accounting for certain market-based options or guarantees associated with deposit (or account balance) contracts; (iii) simplifies the amortization of deferred acquisition costs; and (iv) requires enhanced disclosures, including disaggregated rollforwards of the liability for future policy benefits, policyholder account liabilities, market risk benefits and deferred acquisition costs. Additionally, qualitative and quantitative information about expected cash flows, estimates and assumptions is required. The new measurement guidance for traditional and limited-payment contract liabilities and the new guidance for the amortization of deferred acquisition costs was adopted on a modified retrospective transition approach. For contracts in-force at the transition date, we continue to use the existing locked-in investment yield interest rate assumption to calculate the net premium ratio, rather than the upper-medium grade fixed-income corporate instrument yield. However, for balance sheet remeasurement purposes, the current upper-medium grade fixed-income corporate instrument yield is used at transition through accumulated other comprehensive income (loss) and subsequently through other comprehensive income. For market risk benefits, we use the required retrospective application and were able to use hindsight to measure fair value components to the extent assumptions in a prior period are unobservable or otherwise unavailable. We selected the modified retrospective transition method, except for market risk benefits where we are required to use the full retrospective approach. Pursuant to ASU 2018-12, the account balances subject to the guidance were recast on the Transition Date. The following summarizes the impact of adoption on the Transition Date (dollars in millions): January 1, 2021 Amounts prior to adoption of Effect of ASU 2018-12 adoption As recast Present value of future profits $ 249.4 $ 10.2 $ 259.6 Deferred acquisition costs 1,027.8 458.0 1,485.8 Reinsurance receivables 4,584.3 144.1 4,728.4 Market risk benefit asset — 2.5 2.5 Income tax assets, net 199.4 607.0 806.4 Total assets 35,339.9 1,221.8 36,561.7 Policyholder account balances 12,540.6 (172.9) 12,367.7 Future policy benefits 11,744.2 3,960.7 15,704.9 Market risk benefit liability — 114.8 114.8 Liability for policy and contract claims 561.8 (470.1) 91.7 Total liabilities 29,855.7 3,432.5 33,288.2 Retained earnings 752.3 (130.9) (a) 621.4 Accumulated other comprehensive income 2,186.1 (2,079.8) 106.3 Total shareholders' equity 5,484.2 (2,210.7) 3,273.5 _____________________ (a) The impact to retained earnings was primarily related to certain long-term care product cohorts where the present value of expected benefits exceeded the reserve at the Transition Date plus the present value of future gross premiums. As a result, the net premium ratio was capped at 100 percent with an immediate increase in the reserve for such cohorts. The following summarizes the impact of adoption on previously reported balances as of December 31, 2022 and as of and for the three months ended March 31, 2022 (dollars in millions): December 31, 2022 As previously Effect of reported adoption As recast Present value of future profits $ 212.2 $ (8.5) $ 203.7 Deferred acquisition costs 1,913.4 (142.5) 1,770.9 Reinsurance receivables 4,241.7 (18.3) 4,223.4 Market risk benefit asset — 65.3 65.3 Income tax assets, net 1,165.5 (102.1) 1,063.4 Total assets 33,339.2 (206.1) 33,133.1 Policyholder account balances 14,858.3 375.9 15,234.2 Future policy benefits 11,809.1 (568.9) 11,240.2 Market risk benefit liability — 11.3 11.3 Liability for policy and contract claims 456.5 (392.4) 64.1 Total liabilities 31,938.4 (574.1) 31,364.3 Retained earnings 1,459.0 232.2 1,691.2 Accumulated other comprehensive income (loss) (2,093.1) 135.8 (1,957.3) Total shareholders' equity 1,400.8 368.0 1,768.8 Three months ended March 31, 2022 As previously Effect of reported adoption As recast Insurance policy benefits $ 346.7 $ (12.8) $ 333.9 Liability for future policy benefits remeasurement loss — 7.0 7.0 Change in fair value of market risk benefits — (32.7) (32.7) Amortization 103.9 (51.6) 52.3 Other operating costs and expenses 219.2 (.9) 218.3 Total benefits and expenses 693.6 (91.0) 602.6 Income before income taxes 149.3 91.0 240.3 Income tax expense 37.0 19.9 56.9 Net income 112.3 71.1 183.4 As of March 31, 2022 As previously Effect of reported adoption As recast Retained earnings $ 1,223.5 $ 69.5 1,293.0 Accumulated other comprehensive income (loss) 380.5 (942.0) (561.5) Total shareholders' equity 3,690.9 (872.5) 2,818.4 The following tables detail the January 1, 2021 transition adjustments by providing a rollforward of the ending reported balances as of December 31, 2020 to the opening balances as of January 1, 2021 for retained earnings, accumulated other comprehensive income and the impacted insurance related balances (dollars in millions): January 1, 2021 Asset accounts Present value of future profits Deferred acquisition costs Reinsurance receivables Market risk benefit asset Income tax assets, net Amounts prior to adoption of ASU 2018-12 $ 249.4 $ 1,027.8 $ 4,584.3 $ — $ 199.4 Unwinding amounts related to unrealized gains (losses) 10.2 458.0 — — — Changes in measurement of assets — — (81.6) — — Change in discount rates — — 225.7 — — Changes in market benefit reserve basis — — — 2.5 — Tax impacts of changes recognized in accumulated other comprehensive income — — — — 570.3 Tax impacts of changes recognized in retained earnings — — — — 36.7 Amounts, as recast $ 259.6 $ 1,485.8 $ 4,728.4 $ 2.5 $ 806.4 January 1, 2021 Liability accounts Policyholder account balances Future policy benefits Market risk benefit liability Liability for policy and contract claims Amounts prior to adoption of ASU 2018-12 $ 12,540.6 $ 11,744.2 $ — $ 561.8 Unwinding amounts related to unrealized gains (losses) — (197.5) — — Changes in remeasurement of future policy benefits — 31.1 — — Changes in classification of liabilities (1) (172.9) 643.0 — (470.1) Reclass to market risk benefit liability — (66.6) 66.6 — Changes in market risk benefit reserve basis — — 48.2 — Change in discount rates — 3,550.7 — — Amounts, as recast $ 12,367.7 $ 15,704.9 $ 114.8 $ 91.7 _____________________ (1) Amount includes certain reclassifications to conform with the revised presentation of ASU 2018-12, such as reclassifying claims and benefits payable on long-duration health contracts to the liability for future policy benefits. January 1, 2021 Shareholders' equity accounts Accumulated other comprehensive income Retained earnings Amounts prior to adoption of ASU 2018-12 $ 2,186.1 $ 752.3 Unwinding amounts related to unrealized gains (losses) 665.7 — Changes in measurement of assets and liabilities — (112.7) Change in market risk benefit reserve basis 9.2 (54.9) Tax impacts of changes recognized in retained earnings — 36.7 Change in discount rates (3,325.0) — Tax impacts of changes recognized in accumulated other comprehensive income 570.3 — Amounts, as recast $ 106.3 $ 621.4 |
INVESTMENTS
INVESTMENTS | 3 Months Ended |
Mar. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | INVESTMENTS We classify our fixed maturity securities into one of two categories: (i) "available for sale" (which we carry at estimated fair value with any unrealized gain or loss, net of tax and related adjustments, recorded as a component of shareholders' equity); or (ii) "trading" (which we carry at estimated fair value with changes in such value recognized as either net investment income (classified as investment income from policyholder and other special-purpose portfolios) or investment gains (losses)). Trading securities include: (i) investments purchased with the intent of selling in the near term to generate income; and (ii) certain fixed maturity securities containing embedded derivatives for which we have elected the fair value option. The change in fair value of the income generating investments is recognized in income from policyholder and other special-purpose portfolios (a component of net investment income). The change in fair value of securities with embedded derivatives is recognized in other investment gains (losses). We review our available for sale fixed maturity securities with unrealized losses to determine whether such impairments are the result of credit losses. We analyze various factors to make such determinations including, but not limited to: (i) actions taken by rating agencies; (ii) default by the issuer; (iii) the significance of the decline; (iv) an assessment of our intent to sell the security before recovering the security's amortized cost; (v) an economic analysis of the issuer's industry; and (vi) the financial strength, liquidity, and recoverability of the issuer. We perform a security by security review each quarter to evaluate whether a credit loss has occurred. In determining the credit loss component, we discount the estimated cash flows on a security by security basis. We consider the impact of macroeconomic conditions on inputs used to measure the amount of credit loss. For most structured securities, cash flow estimates are based on bond-specific facts and circumstances that may include collateral characteristics, expectations of delinquency and default rates, loss severity, prepayment speeds and structural support, including overcollateralization, excess spread, subordination and guarantees. For corporate bonds, cash flow estimates are derived by considering asset type, rating, time to maturity, and applying an expected loss rate. If a portion of the decline is due to credit-related factors, we separate the credit loss component of the impairment from the amount related to all other factors. The credit loss component is recorded as an allowance and reported in other investment gains (losses) (limited to the difference between estimated fair value and amortized cost). The impairment related to all other factors (non-credit factors) is reported in accumulated other comprehensive income (loss) along with unrealized gains (losses) related to fixed maturity investments, available for sale, net of tax and related adjustments. The allowance is adjusted for any additional credit losses and subsequent recoveries. When recognizing an allowance associated with a credit loss, the cost basis is not adjusted. When we determine a security is uncollectable, the remaining amortized cost will be written off. If we intend to sell an impaired fixed maturity security, available for sale, or identify an impaired fixed maturity security, available for sale, for which it is more likely than not we will be required to sell before anticipated recovery, the difference between the fair value and the amortized cost is included in other investment gains (losses) and the fair value becomes the new amortized cost. The new cost basis is not adjusted for any subsequent recoveries in fair value. The Company reports accrued investment income separately from fixed maturities, available for sale, and has elected not to measure an allowance for credit losses for accrued investment income. Accrued investment income is written off through net investment income at the time the issuer of the bond defaults or is expected to default on payments. Accumulated other comprehensive income (loss), included in shareholders' equity as of March 31, 2023 and December 31, 2022, is comprised of the following (dollars in millions): March 31, December 31, Net unrealized losses on investments having no allowance for credit losses $ (937.1) $ (1,247.0) Unrealized losses on investments with an allowance for credit losses (1,453.6) (1,780.7) Change in discount rates for liability for future policy benefits 237.4 500.7 Change in instrument-specific credit risk for market risk benefits 13.1 12.2 Deferred income tax assets 475.8 557.5 Accumulated other comprehensive loss $ (1,664.4) $ (1,957.3) At March 31, 2023, the amortized cost, gross unrealized gains, gross unrealized losses, allowance for credit losses and estimated fair value of fixed maturities, available for sale, were as follows (dollars in millions): Amortized cost Gross unrealized gains Gross unrealized losses Allowance for credit losses Estimated fair value Corporate securities $ 13,497.0 $ 66.3 $ (1,529.7) $ (57.2) $ 11,976.4 United States Treasury securities and obligations of United States government corporations and agencies 174.7 .1 (4.7) — 170.1 States and political subdivisions 2,789.4 34.1 (360.1) (.8) 2,462.6 Foreign governments 88.8 .2 (9.9) (.5) 78.6 Asset-backed securities 1,458.6 2.4 (120.2) (.6) 1,340.2 Agency residential mortgage-backed securities 213.3 2.8 (.2) — 215.9 Non-agency residential mortgage-backed securities 1,778.2 37.2 (174.9) — 1,640.5 Collateralized loan obligations 954.3 .5 (35.9) — 918.9 Commercial mortgage-backed securities 2,563.6 .1 (259.8) — 2,303.9 Total fixed maturities, available for sale $ 23,517.9 $ 143.7 $ (2,495.4) $ (59.1) $ 21,107.1 At December 31, 2022, the amortized cost, gross unrealized gains, gross unrealized losses, allowance for credit losses and estimated fair value of fixed maturities, available for sale, were as follows (dollars in millions): Amortized cost Gross unrealized gains Gross unrealized losses Allowance for credit losses Estimated fair value Corporate securities $ 13,649.1 $ 29.9 $ (1,911.9) $ (54.4) $ 11,712.7 United States Treasury securities and obligations of United States government corporations and agencies 171.7 — (13.0) — 158.7 States and political subdivisions 2,846.9 19.3 (476.8) (.9) 2,388.5 Foreign governments 86.3 .1 (11.3) (.4) 74.7 Asset-backed securities 1,435.7 1.0 (149.4) (.3) 1,287.0 Agency residential mortgage-backed securities 174.3 1.4 (.7) — 175.0 Non-agency residential mortgage-backed securities 1,700.4 40.0 (191.9) — 1,548.5 Collateralized loan obligations 825.2 .3 (39.6) — 785.9 Commercial mortgage-backed securities 2,494.6 .1 (272.3) — 2,222.4 Total fixed maturities, available for sale $ 23,384.2 $ 92.1 $ (3,066.9) $ (56.0) $ 20,353.4 The following table sets forth the amortized cost and estimated fair value of fixed maturities, available for sale, at March 31, 2023, by contractual maturity. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties. Structured securities (such as asset-backed securities, agency residential mortgage-backed securities, non-agency residential mortgage-backed securities, collateralized loan obligations and commercial mortgage-backed securities, collectively referred to as "structured securities") frequently include provisions for periodic principal payments and permit periodic unscheduled payments. Amortized Estimated (Dollars in millions) Due in one year or less $ 140.1 $ 138.7 Due after one year through five years 2,209.3 2,080.0 Due after five years through ten years 1,871.8 1,742.8 Due after ten years 12,328.7 10,726.2 Subtotal 16,549.9 14,687.7 Structured securities 6,968.0 6,419.4 Total fixed maturities, available for sale $ 23,517.9 $ 21,107.1 The following table sets forth the amortized cost and estimated fair value of fixed maturities, available for sale, at December 31, 2022, by contractual maturity. Amortized Estimated (Dollars in millions) Due in one year or less $ 112.0 $ 110.8 Due after one year through five years 1,913.7 1,790.2 Due after five years through ten years 2,098.9 1,910.4 Due after ten years 12,629.4 10,523.2 Subtotal 16,754.0 14,334.6 Structured securities 6,630.2 6,018.8 Total fixed maturities, available for sale $ 23,384.2 $ 20,353.4 Gross Unrealized Investment Losses Our investment strategy is to maximize, over a sustained period and within acceptable parameters of quality and risk, investment income and total investment return through active strategic asset allocation and investment management. Accordingly, we may sell securities at a gain or a loss to enhance the projected total return of the portfolio as market opportunities change, to reflect changing perceptions of risk, or to better match certain characteristics of our investment portfolio with the corresponding characteristics of our insurance liabilities. The following table summarizes the gross unrealized losses and fair values of our investments with unrealized losses for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that such securities have been in a continuous unrealized loss position, at March 31, 2023 (dollars in millions): Less than 12 months 12 months or greater Total Description of securities Fair Unrealized Fair Unrealized Fair Unrealized Corporate securities $ 973.1 $ (35.5) $ 1,979.4 $ (322.6) $ 2,952.5 $ (358.1) United States Treasury securities and obligations of United States government corporations and agencies 106.8 (1.2) 33.7 (3.5) 140.5 (4.7) States and political subdivisions 207.5 (11.2) 397.4 (97.1) 604.9 (108.3) Foreign governments 15.2 (.3) 13.3 (1.2) 28.5 (1.5) Asset-backed securities 388.9 (12.9) 775.0 (103.2) 1,163.9 (116.1) Agency residential mortgage-backed securities 33.4 (.2) .6 — 34.0 (.2) Non-agency residential mortgage-backed securities 560.9 (27.1) 718.0 (147.8) 1,278.9 (174.9) Collateralized loan obligations 282.6 (6.5) 551.7 (29.4) 834.3 (35.9) Commercial mortgage-backed securities 520.3 (13.7) 1,738.3 (246.1) 2,258.6 (259.8) Total fixed maturities, available for sale $ 3,088.7 $ (108.6) $ 6,207.4 $ (950.9) $ 9,296.1 $ (1,059.5) The following table summarizes the gross unrealized losses and fair values of our investments with unrealized losses for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that such securities have been in a continuous unrealized loss position, at December 31, 2022 (dollars in millions): Less than 12 months 12 months or greater Total Description of securities Fair Unrealized Fair Unrealized Fair Unrealized Corporate securities $ 2,830.8 $ (329.4) $ 370.4 $ (129.3) $ 3,201.2 $ (458.7) United States Treasury securities and obligations of United States government corporations and agencies 134.4 (9.6) 21.9 (3.4) 156.3 (13.0) States and political subdivisions 667.0 (124.8) 132.1 (58.5) 799.1 (183.3) Foreign governments 35.0 (3.5) 2.1 (.3) 37.1 (3.8) Asset-backed securities 914.0 (90.1) 258.1 (53.4) 1,172.1 (143.5) Agency residential mortgage-backed securities 59.7 (.7) — — 59.7 (.7) Non-agency residential mortgage-backed securities 861.6 (89.7) 335.4 (102.2) 1,197.0 (191.9) Collateralized loan obligations 553.0 (27.4) 184.2 (12.2) 737.2 (39.6) Commercial mortgage-backed securities 1,581.4 (160.0) 593.3 (112.3) 2,174.7 (272.3) Total fixed maturities, available for sale $ 7,636.9 $ (835.2) $ 1,897.5 $ (471.6) $ 9,534.4 $ (1,306.8) Based on management's current assessment of investments with unrealized losses at March 31, 2023, the Company believes the issuers of the securities will continue to meet their obligations. While we do not have the intent to sell securities with unrealized losses and it is not more likely than not that we will be required to sell securities with unrealized losses prior to their anticipated recovery, our intent on an individual security may change, based upon market or other unforeseen developments. In such instances, if a loss is recognized from a sale subsequent to a balance sheet date due to these unexpected developments, the loss is recognized in the period in which we had the intent to sell the security before its anticipated recovery. The following table summarizes changes in the allowance for credit losses related to fixed maturities, available for sale, for the three months ended March 31, 2023 (dollars in millions): Corporate securities States and political subdivisions Foreign governments Asset-backed securities Total Allowance at December 31, 2022 $ 54.4 $ .9 $ .4 $ .3 $ 56.0 Additions for securities for which credit losses were not previously recorded 3.0 — — — 3.0 Additions for purchased securities with deteriorated credit — — — — — Additions (reductions) for securities where an allowance was previously recorded .5 (.1) .1 .3 .8 Reduction for securities sold during the period (.7) — — — (.7) Reduction for securities for which the Company made the decision to sell where an allowance was previously recorded — — — — — Write-offs — — — — — Recoveries of previously written-off amount — — — — — Allowance at March 31, 2023 $ 57.2 $ .8 $ .5 $ .6 $ 59.1 The following table summarizes changes in the allowance for credit losses related to fixed maturities, available for sale, for the three months ended March 31, 2022 (dollars in millions): Corporate securities States and political subdivisions Foreign governments Asset-backed securities Total Allowance at December 31, 2021 $ 7.4 $ — $ .2 $ — $ 7.6 Additions for securities for which credit losses were not previously recorded 14.0 .3 .1 — 14.4 Additions for purchased securities with deteriorated credit — — — — — Additions (reductions) for securities where an allowance was previously recorded 14.6 .5 (.2) .1 15.0 Reduction for securities sold during the period (.4) — — — (.4) Reduction for securities for which the Company made the decision to sell where an allowance was previously recorded — — — — — Write-offs — — — — — Recoveries of previously written-off amount — — — — — Allowance at March 31, 2022 $ 35.6 $ .8 $ .1 $ .1 $ 36.6 Mortgage Loans Mortgage loans are carried at amortized unpaid balance, net of allowance for estimated credit losses. Interest income is accrued on the principal amount of the loan based on the loan's contractual interest rate. Payment terms specified for mortgage loans may include a prepayment penalty for unscheduled payoff of the investment. Prepayment penalties are recognized as investment income when received. The allowance for estimated credit losses is measured using a loss-rate method on an individual asset basis. Inputs used include asset-specific characteristics, current economic conditions, historical loss information and reasonable and supportable forecasts about future economic conditions. At March 31, 2023, the mortgage loan balance was primarily comprised of commercial mortgage loans and there were no commercial mortgage loans in process of foreclosure. At March 31, 2023, we held residential mortgage loan investments with an amortized cost and fair value of $409.4 million and $407.2 million, respectively. At March 31, 2023, there were four residential mortgage loans that were noncurrent with a carrying value of $1.1 million (of which, two loans with a carrying value of $0.5 million were in foreclosure). The following table provides the amortized cost by year of origination and estimated fair value of our outstanding commercial mortgage loans and the underlying collateral as of March 31, 2023 (dollars in millions): Estimated fair Loan-to-value ratio (a) 2023 2022 2021 2020 2019 Prior Total amortized cost Mortgage loans Collateral Less than 60% $ 73.6 $ 178.7 $ 114.4 $ 37.4 $ 75.1 $ 494.2 $ 973.4 $ 884.3 $ 3,553.3 60% to less than 70% — 87.3 26.2 5.7 — 56.8 176.0 159.7 269.3 70% to less than 80% — 47.8 10.1 — — 43.2 101.1 86.8 138.4 80% to less than 90% — — — — — — — — — 90% or greater — — — — — 24.6 24.6 19.5 26.1 Total $ 73.6 $ 313.8 $ 150.7 $ 43.1 $ 75.1 $ 618.8 $ 1,275.1 $ 1,150.3 $ 3,987.1 ________________ (a) Loan-to-value ratios are calculated as the ratio of: (i) the amortized cost of the commercial mortgage loans; to (ii) the estimated fair value of the underlying collateral. The following table summarizes changes in the allowance for credit losses related to mortgage loans for the three months ended March 31, 2023 and 2022 (dollars in millions): Three months ended March 31, 2023 2022 Allowance at the beginning of the period $ 8.0 $ 5.6 Current period provision for expected credit losses .4 (.5) Initial allowance recognized for purchased financial assets with credit deterioration — — Write-offs charged against the allowance — — Recoveries of amounts previously written off — — Allowance at the end of the period $ 8.4 $ 5.1 Total Investment Gains (Losses) The following table sets forth the total investment gains (losses) for the periods indicated (dollars in millions): Three months ended March 31, 2023 2022 Realized investment gains (losses): Gross realized gains on sales of fixed maturities, available for sale $ 7.3 $ 54.8 Gross realized losses on sales of fixed maturities, available for sale (14.4) (30.6) Equity securities, net (.2) (4.7) Other, net (7.3) (.7) Total realized investment gains (losses) (14.6) 18.8 Change in allowance for credit losses (a) (1.5) (30.7) Change in fair value of equity securities (b) .4 (1.2) Other changes in fair value (c) 1.1 (19.6) Other investment losses — (51.5) Total investment losses $ (14.6) $ (32.7) _________________ (a) Changes in the allowance for credit losses includes $2.0 million and $(2.2) million in the three months ended March 31, 2023 and 2022, respectively, related to investments held by variable interest entities ("VIEs"). (b) Changes in the estimated fair value of equity securities (that are still held as of the end of the respective periods) were $0.3 million and $(5.2) million for the three months ended March 31, 2023 and 2022, respectively. (c) Changes in the estimated fair value of trading securities that we have elected the fair value option (that are still held as of the end of the respective periods) were $(2.5) million and $(12.8) million in the three months ended March 31, 2023 and 2022, respectively. During the first three months of 2023, we recognized net investment losses of $14.6 million, which were comprised of: (i) $10.8 million of net losses from the sales of investments; (ii) $0.3 million of gains related to equity securities, including the change in fair value; (iii) $4.0 million of losses related to certain fixed maturity investments with embedded derivatives, including the change in fair value; (iv) the increase in fair value of embedded derivatives related to a modified coinsurance agreement of $1.4 million; and (v) an increase in the allowance for credit losses of $1.5 million. During the first three months of 2022, we recognized net investment losses of $32.7 million, which were comprised of: (i) $23.5 million of net gains from the sales of investments; (ii) $5.9 million of losses related to equity securities, including the change in fair value; (iii) the decrease in fair value of certain fixed maturity investments with embedded derivatives of $13.1 million; (iv) the decrease in fair value of embedded derivatives related to a modified coinsurance agreement of $6.5 million; and (v) an increase in the allowance for credit losses of $30.7 million. Our fixed maturity investments are generally purchased in the context of various long-term strategies, including funding insurance liabilities, so we do not generally seek to generate short-term realized gains through the purchase and sale of such securities. In certain circumstances, including those in which securities are selling at prices which exceed our view of their underlying economic value, or when it is possible to reinvest the proceeds to better meet our long-term asset-liability objectives, we may sell certain securities. At March 31, 2023, there were no fixed maturity investments in default. During the first three months of 2023, the $14.4 million of gross realized losses on sales of $288.5 million of fixed maturity securities, available for sale, included: (i) $11.1 million related to various corporate securities; (ii) $2.2 million related to commercial mortgage-backed securities; and (iii) $1.1 million related to various other investments. Securities are generally sold at a loss following unforeseen issuer-specific events or conditions or shifts in perceived relative values. These reasons include but are not limited to: (i) changes in the investment environment; (ii) expectation that the market value could deteriorate; (iii) our desire to reduce our exposure to an asset class, an issuer or an industry; (iv) prospective or actual changes in credit quality; (v) better match certain characteristics of our investment portfolio with the corresponding characteristics of our insurance liabilities; or (vi) changes in expected portfolio cash flows. During the first three months of 2022, the $30.6 million of gross realized losses on sales of $786.6 million of fixed maturity securities, available for sale, included: (i) $14.6 million related to various corporate securities; (ii) $9.8 million related to non-agency residential mortgage-backed securities; (iii) $4.2 million related to states and political subdivisions; and (iv) $2.0 million related to various other investments. Future events may occur, or additional information may become available, which may necessitate future realized losses in our portfolio. Significant losses could have a material adverse effect on our consolidated financial statements in future periods. |
LIABILITIES FOR INSURANCE PRODU
LIABILITIES FOR INSURANCE PRODUCTS | 3 Months Ended |
Mar. 31, 2023 | |
Insurance [Abstract] | |
LIABILITIES FOR INSURANCE PRODUCTS | LIABILITIES FOR INSURANCE PRODUCTS The liability for future policy benefits is determined based on numerous assumptions. The most significant assumptions for our life and annuity business are mortality and lapse/withdrawal rates which are based on our experience and, in cases of limited experience, industry experience. Mortality and lapse/withdrawal rates also take into consideration future expectations in policyholder behavior that may vary from past experience. For our health business, mortality rates, lapse rates, morbidity assumptions and future rate increases are based on our experience and, in cases of limited experience, industry experience. Such assumptions also consider future expectations in policyholder behavior that may vary from past experience. In the first quarter of 2023, we reviewed the actual mortality, lapse, and morbidity experience for the quarter and determined that no changes to assumptions for future cash flows were necessary. This is consistent with the impact in the "Effect of actual variances from expected experience" line items in the tables below, which indicate our actual experience did not deviate significantly from our expectations. The following tables summarize balances and changes in the liability for future policy benefits for traditional and limited-payment contracts for the three months ended March 31, 2023 (dollars in millions): Three months ended March 31, 2023 Supplemental health Medicare supplement Long-term care Traditional life Other annuities Present value of expected net premiums ("PVENP"), beginning of period $ 2,781.3 $ 2,800.6 $ 1,034.1 $ 2,175.0 $ — Effect of changes in discount rate assumptions, beginning of period 188.4 196.4 23.2 137.1 — Beginning PVENP at original discount rate 2,969.7 2,997.0 1,057.3 2,312.1 — Effect of changes in cash flow assumptions — — — — — Effect of actual variances from expected experience (17.2) 27.0 (3.4) (14.1) — Adjusted beginning of period PVENP 2,952.5 3,024.0 1,053.9 2,298.0 — Issuances 63.7 101.6 15.7 108.3 1.1 Interest accrual 32.0 30.5 12.3 23.0 — Net premiums collected (90.3) (113.4) (40.6) (101.4) (1.1) Ending PVENP at original discount rate 2,957.9 3,042.7 1,041.3 2,327.9 — Effect of changes in discount rate assumptions, end of period (120.4) (139.2) (4.6) (92.5) — PVENP, end of period $ 2,837.5 $ 2,903.5 $ 1,036.7 $ 2,235.4 $ — Present value of expected future policy benefits ("PVEFPB"), beginning of period $ 5,886.8 $ 3,033.1 $ 4,158.1 $ 4,417.9 $ 310.9 Effect of changes in discount rate assumptions, beginning of period 483.3 212.0 28.5 336.6 15.4 Beginning PVEFPB at original discount rate 6,370.1 3,245.1 4,186.6 4,754.5 326.3 Effect of changes in cash flow assumptions — — — — — Effect of actual variances from expected experience (20.5) 32.2 (6.3) (15.2) .7 Adjusted beginning of period PVEFPB 6,349.6 3,277.3 4,180.3 4,739.3 327.0 Issuances 63.7 101.6 15.7 108.3 1.1 Interest accrual 73.8 33.2 55.5 51.0 3.7 Benefit payments (99.5) (125.6) (71.3) (115.0) (8.6) Ending PVEFPB at original discount rate 6,387.6 3,286.5 4,180.2 4,783.6 323.2 Effect of changes in discount rate assumptions, end of period (306.8) (150.0) 86.4 (223.0) (6.9) PVEFPB, end of period $ 6,080.8 $ 3,136.5 $ 4,266.6 $ 4,560.6 $ 316.3 Net liability for future policy benefits $ 3,243.3 $ 233.0 $ 3,229.9 $ 2,325.2 $ 316.3 Flooring impact — .4 — — — Adjusted net liability for future policy benefits 3,243.3 233.4 3,229.9 2,325.2 316.3 Related reinsurance recoverable (2.4) — (357.5) (201.1) — Net liability for future policy benefits, net of reinsurance recoverable $ 3,240.9 $ 233.4 $ 2,872.4 $ 2,124.1 $ 316.3 The following tables summarize balances and changes in the liability for future policy benefits for traditional and limited-payment contracts for the three months ended March 31, 2022 (dollars in millions): Three months ended March 31, 2022 Supplemental health Medicare supplement Long-term care Traditional life Other annuities PVENP, beginning of period $ 3,496.8 $ 3,454.0 $ 1,313.4 $ 2,483.7 $ — Effect of changes in discount rate assumptions, beginning of period (525.6) (341.8) (183.2) (239.4) — Beginning PVENP at original discount rate 2,971.2 3,112.2 1,130.2 2,244.3 — Effect of changes in cash flow assumptions — — — — — Effect of actual variances from expected experience 6.3 21.2 (8.9) (11.8) — Adjusted beginning of period PVENP 2,977.5 3,133.4 1,121.3 2,232.5 — Issuances 80.6 68.0 25.7 149.3 1.6 Interest accrual 31.3 30.4 13.1 20.9 — Net premiums collected (89.5) (119.0) (42.7) (99.9) (1.6) Ending PVENP at original discount rate 2,999.9 3,112.8 1,117.4 2,302.8 — Effect of changes in discount rate assumptions, end of period 213.4 112.1 94.2 72.5 — PVENP, end of period $ 3,213.3 $ 3,224.9 $ 1,211.6 $ 2,375.3 $ — PVEFPB, beginning of period $ 7,688.0 $ 3,750.5 $ 5,501.6 $ 5,395.7 $ 431.9 Effect of changes in discount rate assumptions, beginning of period (1,414.8) (373.8) (1,291.2) (767.3) (88.4) Beginning PVEFPB at original discount rate 6,273.2 3,376.7 4,210.4 4,628.4 343.5 Effect of changes in cash flow assumptions — — — — — Effect of actual variances from expected experience 5.6 21.5 (9.2) (8.5) (1.3) Adjusted beginning of period PVEFPB 6,278.8 3,398.2 4,201.2 4,619.9 342.2 Issuances 80.8 67.3 25.7 149.4 1.9 Interest accrual 72.5 33.2 56.1 48.8 3.9 Benefit payments (99.5) (123.3) (64.2) (128.8) (9.3) Ending PVEFPB at original discount rate 6,332.6 3,375.4 4,218.8 4,689.3 338.7 Effect of changes in discount rate assumptions, end of period 622.3 123.9 747.4 296.2 44.6 PVEFPB, end of period $ 6,954.9 $ 3,499.3 $ 4,966.2 $ 4,985.5 $ 383.3 Net liability for future policy benefits $ 3,741.6 $ 274.4 $ 3,754.6 $ 2,610.2 $ 383.3 Flooring impact 1.5 .2 .6 .4 — Adjusted net liability for future policy benefits 3,743.1 274.6 3,755.2 2,610.6 383.3 Related reinsurance recoverable (3.2) — (407.0) (242.1) — Net liability for future policy benefits, net of reinsurance recoverable $ 3,739.9 $ 274.6 $ 3,348.2 $ 2,368.5 $ 383.3 The following table reconciles the net liability for future policy benefits to the amount presented in the consolidated balance sheet (dollars in millions): March 31, 2023 March 31, 2022 Balances included in the future policy benefits rollforwards: Supplemental health $ 3,243.3 $ 3,743.1 Medicare supplement 233.4 274.6 Long-term care 3,229.9 3,755.2 Traditional life 2,325.2 2,610.6 Other annuities 316.3 383.3 Reserves excluded from rollforward (1) 2,593.3 2,626.5 Deferred profit liability 57.7 51.3 Amount of reserves above (below) policyholder account balances (2) (410.5) (273.1) Future loss reserves (3) 34.7 34.6 Future policy benefits $ 11,623.3 $ 13,206.1 _______________ (1) Primarily comprised of blocks of business that are 100% ceded. (2) Such amount represents the difference between: (i) the total insurance liabilities for our fixed indexed annuities (including the host contract and the related embedded derivative); and (ii) the policyholder account balances for these products. The accounting requirement to bifurcate the embedded derivative and value it at the current estimated fair value results in this amount. (3) In certain instances, the total insurance liabilities for a particular line of business may not be deficient in the aggregate to trigger loss recognition, but the pattern of earnings may be such that profits are expected to be recognized in earlier years followed by losses in later years. In these situations, accounting standards require that an additional liability (the "future loss reserve") be recognized by an amount necessary to sufficiently offset the losses that would be recognized in later years. Many of our fixed indexed annuity products include a GLWB that is considered a MRB. The calculation of MRBs includes market assumptions (interest rate, equity returns, volatility and dividend yields) and nonmarket assumptions (mortality rates, surrender and withdrawal rates, GLWB utilization and spreads). Market assumptions are updated quarterly to reflect current market conditions. During the first quarter of 2023, we reviewed the nonmarket assumptions used to calculate MRBs and determined that such assumptions were appropriate. The following table presents the balance of and changes in market risk benefits associated with our fixed indexed annuities (dollars in millions): March 31, 2023 March 31, 2022 Net liability (asset), beginning of period $ (54.0) $ 86.2 Effect of changes in the instrument-specific credit risk, beginning of period 12.2 12.1 Balance, beginning of period, before effect of changes in the instrument-specific credit risk (41.8) 98.3 Issuances .1 (.8) Interest accrual 5.2 3.4 Attributed fees collected — — Benefit payments — — Effect of changes in interest rates 12.3 (35.3) Effect of changes in equity markets 5.3 (6.8) Effect of changes in equity index volatility (7.4) 4.4 Actual policyholder behavior different from expected behavior .6 .3 Effect of changes in future expected policyholder behavior - other — — Effect of changes in future expected policyholder behavior - risk margin — — Effect of changes in assumptions (1.4) 2.1 Net liability (asset), end of period, before effect of changes in the instrument-specific credit risk (27.1) 65.6 Effect of changes in the instrument-specific credit risk, end of period (13.1) (18.7) Net liability (asset), end of period (40.2) 46.9 Reinsurance recoverable, end of period — — Net liability (asset), end of period, net of reinsurance $ (40.2) $ 46.9 Balance reported as an asset $ 57.8 $ 16.9 Balance reported as a liability 17.6 63.8 Net liability (asset) $ (40.2) $ 46.9 Net amount at risk $ 58.9 $ 107.4 Weighted average attained age of contract holders 68 68 The following table summarizes the amount of revenue and interest related to traditional and limited-payment contracts recognized in the consolidated statement of operations (dollars in millions): Gross premiums (a) Interest accretion (b) Three months ended Three months ended March 31, March 31, 2023 2022 2023 2022 Other annuity $ 1.3 $ 2.2 $ 3.7 $ 3.9 Supplemental health 179.4 175.7 41.8 41.2 Medicare supplement 159.2 167.6 2.7 2.8 Long-term care 82.7 82.4 43.2 43.0 Traditional life 178.8 172.4 28.0 27.9 Total $ 601.4 $ 600.3 $ 119.4 $ 118.8 _____________________ (a) Such amounts are included in insurance policy income in the consolidated statement of operations. (b) Such amounts are included in insurance policy benefits in the consolidated statement of operations. The following table provides the amount of undiscounted and discounted expected gross premiums and expected future benefits and expenses for traditional and limited-payment contracts (dollars in millions): March 31, 2023 March 31, 2022 Undiscounted Discounted (a) Undiscounted Discounted (a) Other annuity Expected future gross premiums $ — $ — $ — $ — Expected future benefits and expenses 396.9 316.3 426.0 383.3 Supplemental health Expected future gross premiums 8,964.4 5,605.7 8,862.2 6,222.2 Expected future benefits and expenses 11,040.9 6,080.8 10,940.4 6,954.9 Medicare supplement Expected future gross premiums 5,645.2 4,031.9 5,680.8 4,490.0 Expected future benefits and expenses 4,417.8 3,136.5 4,446.9 3,499.3 Long-term care Expected future gross premiums 2,954.3 2,152.7 3,012.5 2,389.4 Expected future benefits and expenses 7,445.7 4,266.6 7,606.7 4,966.2 Traditional life Expected future gross premiums 5,435.0 3,953.3 5,384.4 4,260.8 Expected future benefits and expenses 7,382.8 4,560.6 7,180.2 4,985.5 _____________________ (a) Calculated at the discount rates at period end. Loss expense as a result of net premium ratio capping was not material in both the three months ended March 31, 2023 and 2022. The following table provides the weighted average durations (under locked-in rates) of the liability for future policy benefits in years: March 31, March 31, Other annuity 9.7 9.7 Supplemental health 11.8 12.0 Medicare supplement 6.1 5.9 Long-term care 10.5 10.8 Traditional life 10.1 10.4 The following table provides the weighted average interest rates for the liability for future policy benefits: March 31, March 31, Other annuity Interest accretion rate 4.76 % 4.72 % Current discount rate 5.17 % 3.68 % Supplemental health Interest accretion rate 5.04 % 5.09 % Current discount rate 5.14 % 3.66 % Medicare supplement Interest accretion rate 4.26 % 4.23 % Current discount rate 4.94 % 3.41 % Long-term care Interest accretion rate 5.67 % 5.71 % Current discount rate 5.18 % 3.71 % Traditional life Interest accretion rate 4.77 % 4.82 % Current discount rate 5.15 % 3.66 % The following tables present the balances of and changes in the liability for policyholder account balances (dollars in millions): March 31, 2023 Fixed indexed annuities Fixed interest annuities Other annuities Interest-sensitive life Funding agreements Other (a) Balance, beginning of period excluding contracts 100% ceded $ 9,490.4 $ 1,663.1 $ 127.1 $ 1,209.6 $ 1,410.8 $ 395.5 Issuances 323.3 45.3 — 9.5 — — Premiums received .4 .7 7.5 50.3 — 63.0 Policy charges (4.0) (.2) — (46.1) — — Surrenders and withdrawals (178.2) (43.3) (10.5) (8.2) (9.9) (72.6) Benefit payments (59.2) (27.7) (1.7) (6.0) — — Interest credited 6.1 11.3 .6 8.1 7.2 .7 Other 5.5 .1 (.2) — — — Balance, end of period excluding contracts 100% ceded 9,584.3 1,649.3 122.8 1,217.2 1,408.1 386.6 Balance, end of period for contracts 100% ceded 154.4 632.6 26.3 110.7 — 10.6 Balance, end of period $ 9,738.7 $ 2,281.9 $ 149.1 $ 1,327.9 $ 1,408.1 $ 397.2 Balance, end of period, reinsurance ceded (154.4) (632.6) (26.3) (130.5) — (24.8) Balance, end of period, net of reinsurance $ 9,584.3 $ 1,649.3 $ 122.8 $ 1,197.4 $ 1,408.1 $ 372.4 Weighted average crediting rate 1.6 % 2.7 % 1.9 % 3.1 % 2.0 % 0.6 % Net amount at risk (b) $ — $ — $ — $ 26,865.3 $ — $ — Cash surrender value, net of reinsurance $ 8,932.4 $ 1,631.5 $ 122.8 $ 977.1 $ — $ 372.4 _________________ (a) Predominantly consists of retained asset accounts associated with our traditional life and supplemental health blocks. (b) Represents the amount of insurance policy benefit expense that we would incur if death claims were filed on all annuity and interest-sensitive life contracts at the balance sheet date. March 31, 2022 Fixed indexed annuities Fixed interest annuities Other annuities Interest-sensitive life Funding agreements Other (a) Balance, beginning of period excluding contracts 100% ceded $ 8,681.0 $ 1,806.1 $ 131.2 $ 1,163.9 $ 502.0 $ 368.0 Issuances 354.6 10.5 — 10.6 899.0 — Premiums received .1 1.1 9.1 47.6 — 61.7 Policy charges (3.0) (.1) — (44.5) — — Surrenders and withdrawals (133.7) (37.9) (10.2) (5.7) — (56.8) Benefit payments (67.3) (39.6) (1.4) (7.8) — (.1) Interest credited 65.7 11.5 .6 15.7 7.0 .7 Other 4.6 .2 — — — — Balance, end of period excluding contracts 100% ceded 8,902.0 1,751.8 129.3 1,179.8 1,408.0 373.5 Balance, end of period for contracts 100% ceded 166.6 658.8 28.2 115.7 — 11.9 Balance, end of period $ 9,068.6 $ 2,410.6 $ 157.5 $ 1,295.5 $ 1,408.0 $ 385.4 Balance, end of period, reinsurance ceded (166.6) (658.8) (28.2) (136.5) — (26.7) Balance, end of period, net of reinsurance $ 8,902.0 $ 1,751.8 $ 129.3 $ 1,159.0 $ 1,408.0 $ 358.7 Weighted average crediting rate 1.4 % 2.6 % 1.8 % 5.9 % 2.0 % 0.7 % Net amount at risk (b) $ — $ — $ — $ 26,436.6 $ — $ — Cash surrender value, net of reinsurance $ 8,295.5 $ 1,743.3 $ 129.3 $ 938.6 $ — $ 358.7 _________________ (a) Predominantly consists of retained asset accounts associated with our traditional life and supplemental health blocks. (b) Represents the amount of insurance policy benefit expense that we would incur if death claims were filed on all annuity and interest-sensitive life contracts at the balance sheet date. The following table reconciles the liability for policyholder account balances to the amount presented in the consolidated balance sheet (dollars in millions): March 31, 2023 March 31, 2022 Amounts included in the liability for policyholder account balances rollforwards: Fixed indexed annuities $ 9,738.7 $ 9,068.6 Fixed interest annuities 2,281.9 2,410.6 Other annuities 149.1 157.5 Interest-sensitive life 1,327.9 1,295.5 Funding agreements 1,408.1 1,408.0 Other 397.2 385.4 Total $ 15,302.9 $ 14,725.6 The following tables present the account values by range of guaranteed minimum crediting rates and the related range of difference, in basis points, between rates being credited to policyholders and the respective guaranteed minimums (dollars in millions): March 31, 2023 Range of guaranteed minimum crediting rates (a) At guaranteed minimum 1-50 basis points above 51-150 basis points above Greater than 150 basis points above Total Fixed interest annuity 0.00%-2.99% $ 144.9 $ 291.7 $ 78.3 $ 76.9 $ 591.8 3.00%-4.99% 1,572.0 27.7 .1 — 1,599.8 5.00% and greater 90.3 — — — 90.3 Subtotal 1,807.2 319.4 78.4 76.9 2,281.9 Other annuity 0.00%-2.99% 43.6 29.5 — — 73.1 3.00%-4.99% 65.3 — — — 65.3 5.00% and greater 10.7 — — — 10.7 Subtotal 119.6 29.5 — — 149.1 Interest-sensitive life 0.00%-2.99% 66.5 225.8 225.4 — 517.7 3.00%-4.99% 461.5 51.7 146.6 125.0 784.8 5.00% and greater 21.9 .5 2.7 .3 25.4 Subtotal 549.9 278.0 374.7 125.3 1,327.9 Funding agreements 0.00%-2.99% 1,408.1 — — — 1,408.1 3.00%-4.99% — — — — — 5.00% and greater — — — — — Subtotal 1,408.1 — — — 1,408.1 Other 0.00%-2.99% 17.8 355.4 — — 373.2 3.00%-4.99% 23.6 — — — 23.6 5.00% and greater .4 — — — .4 Subtotal 41.8 355.4 — — 397.2 Total 0.00%-2.99% 1,680.9 902.4 303.7 76.9 2,963.9 3.00%-4.99% 2,122.4 79.4 146.7 125.0 2,473.5 5.00% and greater 123.3 .5 2.7 .3 126.8 Total policyholder account balances, excluding fixed indexed annuities $ 3,926.6 $ 982.3 $ 453.1 $ 202.2 5,564.2 Fixed indexed annuity account balances 9,738.7 Total policyholder account balances $ 15,302.9 ____________________ (a) Excludes the account balances related to our fixed indexed annuity contracts which do not have a minimum crediting rate since returns are based on an index. March 31, 2022 Range of guaranteed minimum crediting rates (a) At guaranteed minimum 1-50 basis points above 51-150 basis points above Greater than 150 basis points above Total Fixed interest annuity 0.00%-2.99% $ 171.7 $ 332.2 $ 42.9 $ 11.5 $ 558.3 3.00%-4.99% 1,734.3 23.5 0.1 — 1,757.9 5.00% and greater 94.4 — — — 94.4 Subtotal 2,000.4 355.7 43.0 11.5 2,410.6 Other annuity 0.00%-2.99% 53.1 30.3 — — 83.4 3.00%-4.99% 62.4 — — — 62.4 5.00% and greater 11.7 — — — 11.7 Subtotal 127.2 30.3 — — 157.5 Interest-sensitive life 0.00%-2.99% 7.5 — — — 7.5 3.00%-4.99% 409.3 56.5 178.0 146.4 790.2 5.00% and greater 22.7 0.4 — 474.7 497.8 Subtotal 439.5 56.9 178.0 621.1 1,295.5 Funding agreements 0.00%-2.99% 1,408.0 — — — 1,408.0 3.00%-4.99% — — — — — 5.00% and greater — — — — — Subtotal 1,408.0 — — — 1,408.0 Other 0.00%-2.99% 18.5 341.1 — — 359.6 3.00%-4.99% 24.8 — — — 24.8 5.00% and greater 1.0 — — — 1.0 Subtotal 44.3 341.1 — — 385.4 Total 0.00%-2.99% 1,658.8 703.6 42.9 11.5 2,416.8 3.00%-4.99% 2,230.8 80.0 178.1 146.4 2,635.3 5.00% and greater 129.8 0.4 — 474.7 604.9 Total policyholder account balances, excluding fixed indexed annuities $ 4,019.4 $ 784.0 $ 221.0 $ 632.6 5,657.0 Fixed indexed annuity account balances 9,068.6 Total policyholder account balances $ 14,725.6 ____________________ |
DEFERRED ACQUISITION COSTS, PRE
DEFERRED ACQUISITION COSTS, PRESENT VALUE OF FUTURE PROFITS AND SALES INDUCEMENTS | 3 Months Ended |
Mar. 31, 2023 | |
Deferred Charges, Insurers [Abstract] | |
DEFERRED ACQUISITION COSTS, PRESENT VALUE OF FUTURE PROFITS AND SALES INDUCEMENTS | DEFERRED ACQUISITION COSTS, PRESENT VALUE OF FUTURE PROFITS AND SALES INDUCEMENTS Changes in deferred acquisition costs were as follows (dollars in millions): March 31, 2023 Fixed indexed annuities Fixed interest annuities Supplemental health Medicare supplement Long-term care Interest-sensitive life Traditional life Funding agreements Total Beginning of period $ 365.6 $ 19.6 $ 378.8 $ 161.2 $ 137.9 $ 212.2 $ 409.1 $ 6.0 $ 1,690.4 Capitalizations 21.6 2.5 14.4 5.8 3.4 8.3 28.2 — 84.2 Amortization expense (11.1) (.9) (7.6) (7.2) (3.8) (3.5) (12.2) (.3) (46.6) End of period $ 376.1 $ 21.2 $ 385.6 $ 159.8 $ 137.5 $ 217.0 $ 425.1 $ 5.7 $ 1,728.0 March 31, 2022 Fixed indexed annuities Fixed interest annuities Supplemental health Medicare supplement Long-term care Interest-sensitive life Traditional life Funding agreements Total Beginning of period $ 313.0 $ 19.0 $ 357.5 $ 170.2 $ 136.4 $ 196.3 $ 357.6 $ 3.3 $ 1,553.3 Capitalizations 22.5 .5 12.0 5.5 4.8 7.8 21.7 4.2 79.0 Amortization expense (9.7) (.9) (7.0) (7.6) (3.9) (3.4) (10.2) (.3) (43.0) End of period $ 325.8 $ 18.6 $ 362.5 $ 168.1 $ 137.3 $ 200.7 $ 369.1 $ 7.2 $ 1,589.3 Changes in the present value of future profits were as follows (dollars in millions): March 31, 2023 Supplemental health Medicare supplement Long-term care Traditional life Fixed indexed annuities Fixed interest annuities Total Beginning of period $ 154.0 $ 27.5 $ 6.2 $ 14.8 $ .8 $ .4 $ 203.7 Amortization expense (3.3) (1.9) (.3) (.5) (.1) — (6.1) End of period $ 150.7 $ 25.6 $ 5.9 $ 14.3 $ .7 $ .4 $ 197.6 March 31, 2022 Supplemental health Medicare supplement Long-term care Traditional life Fixed indexed annuities Fixed interest annuities Total Beginning of period $ 168.1 $ 36.5 $ 7.3 $ 16.9 $ .9 $ .4 $ 230.1 Amortization expense (3.6) (2.5) (.3) (.5) — — (6.9) End of period $ 164.5 $ 34.0 $ 7.0 $ 16.4 $ .9 $ .4 $ 223.2 Changes in sales inducements were as follows (dollars in millions): March 31, 2023 Fixed indexed annuities Fixed interest annuities Total Beginning of period $ 76.0 $ 4.5 $ 80.5 Capitalizations 5.4 .2 5.6 Amortization expense (2.6) (.2) (2.8) End of period $ 78.8 $ 4.5 $ 83.3 March 31, 2022 Fixed indexed annuities Fixed interest annuities Total Beginning of period $ 63.0 $ 5.0 $ 68.0 Capitalizations 4.6 .1 4.7 Amortization expense (2.1) (.3) (2.4) End of period $ 65.5 $ 4.8 $ 70.3 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE A reconciliation of net income (loss) and shares used to calculate basic and diluted earnings per share is as follows (dollars in millions and shares in thousands): Three months ended March 31, 2023 2022 Net income (loss) for basic and diluted earnings per share $ (.8) $ 183.4 Shares: Weighted average shares outstanding for basic earnings per share 114,545 118,622 Effect of dilutive securities on weighted average shares: Amounts related to employee benefit plans — 2,380 Weighted average shares outstanding for diluted earnings per share 114,545 121,002 In the three months ended March 31, 2023, the equivalent of 2,182 thousand common shares (related to shares issuable pursuant to employee benefit plans) were not included in the diluted weighted average shares outstanding because their inclusion would have been anti-dilutive due to the net loss recognized by the Company in such period. |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENTS | BUSINESS SEGMENTS We view our operations as three insurance product lines (annuity, health and life) and the investment and fee income segments. Our segments are aligned based on their common characteristics, comparability of profit margins and the way management makes operating decisions and assesses the performance of the business. Our insurance product line segments (annuity, health and life) include marketing, underwriting and administration of the policies our insurance subsidiaries sell. The business written in each of the three product categories through all of our insurance subsidiaries is aggregated allowing management and investors to assess the performance of each product category. When analyzing profitability of these segments, we use insurance product margin as the measure of profitability, which is: (i) insurance policy income; and (ii) net investment income allocated to the insurance product lines; less (i) insurance policy benefits and interest credited to policyholders; and (ii) amortization, non-deferred commissions and advertising expense. Net investment income is allocated to the product lines using the book yield of investments backing the block of business, which is applied to the average net insurance liabilities for the block in each period. Net insurance liabilities for the purpose of allocating investment income to product lines are equal to: (i) policyholder account balances for annuity products; (ii) total reserves before the fair value adjustments reflected in accumulated other comprehensive income (loss), if applicable, for all other products; less (iii) amounts related to reinsurance business; (iv) deferred acquisition costs; (v) the present value of future profits; and (vi) the value of unexpired options credited to insurance liabilities. Income from insurance products is the sum of the insurance product margins of the annuity, health and life product lines, less expenses allocated to the insurance lines. It excludes the income from our fee income business, investment income not allocated to product lines, net expenses not allocated to product lines (primarily holding company expenses) and income taxes. Management believes insurance product margin and income from insurance products help provide a better understanding of the business and a more meaningful analysis of the results of our insurance product lines. We market our products through the Consumer and Worksite Divisions that reflect the customers served by the Company. The Consumer Division serves individual consumers, engaging with them on the phone, virtually, online, face-to-face with agents, or through a combination of sales channels. This structure unifies consumer capabilities into a single division and integrates the strength of our agent sales forces with one of the largest direct-to-consumer insurance businesses with proven experience in advertising, web/digital and call center support. The Worksite Division focuses on worksite and group sales for businesses, associations, and other membership groups, interacting with customers at their place of employment and virtually. With a separate Worksite Division, we are bringing a sharper focus to this high-growth business while further capitalizing on the strength of our wholly-owned subsidiary, Optavise, LLC ("Optavise"), a national provider of year-round technology-driven employee benefits management services. The Consumer and Worksite Divisions are primarily focused on marketing insurance products, several types of which are sold in both divisions and underwritten in the same manner. Sales of group underwritten policies are currently not significant, but are expected to increase within the Worksite Division. The investment segment involves the management of our capital resources, including investments and the management of corporate debt and liquidity. Our measure of profitability of this segment is the total net investment income not allocated to the insurance products. Investment income not allocated to product lines represents net investment income less: (i) equity returns credited to policyholder account balances; (ii) the investment income allocated to our product lines; (iii) interest expense on notes payable and investment borrowings; (iv) expenses related to the FABN program; and (v) certain expenses related to benefit plans that are offset by special-purpose investment income; plus (vi) the impact of annual option forfeitures related to fixed indexed annuity surrenders. Investment income not allocated to product lines includes investment income on investments in excess of amounts allocated to product lines, investments held by our holding companies, the spread we earn from our Federal Home Loan Bank ("FHLB") investment borrowing and FABN programs and variable components of investment income (including call and prepayment income, adjustments to returns on structured securities due to cash flow changes, income (loss) from company-owned life insurance ("COLI") and alternative investments income not allocated to product lines), net of interest expense on corporate debt. The spread earned from our FHLB investment borrowing and FABN programs includes the investment income on the matched assets less: (i) interest on investment borrowings related to the FHLB investment borrowing program; (ii) interest credited on funding agreements; and (iii) amortization of deferred acquisition costs related to the FABN program. Our fee income segment includes the earnings generated from sales of third-party insurance products, services provided by Optavise and the operations of our broker/dealer and registered investment advisor. Expenses not allocated to product lines include the expenses of our corporate operations, excluding interest expense on debt. We measure segment performance by excluding total investment gains (losses), changes in fair value of embedded derivative liabilities and market risk benefits, fair value changes related to the agent deferred compensation plan, income taxes and other non-operating items consisting primarily of earnings attributable to VIEs ("pre-tax operating earnings") because we believe that this performance measure is a better indicator of the ongoing business and trends in our business. Our primary investment focus is on investment income to support our liabilities for insurance products as opposed to the generation of investment gains (losses), and a long-term focus is necessary to maintain profitability over the life of the business. Investment gains (losses), changes in fair value of embedded derivative liabilities and market risk benefits, fair value changes related to the agent deferred compensation plan and other non-operating items consisting primarily of earnings attributable to VIEs depend on market conditions or represent unusual items that do not necessarily relate to the underlying business of our segments. Investment gains (losses) and changes in fair value of embedded derivative liabilities and market risk benefits may affect future earnings levels since our underlying business is long-term in nature and changes in our investment portfolio may impact our ability to earn the assumed interest rates needed to maintain the profitability of our business. Operating information by segment is as follows (dollars in millions): Three months ended March 31, 2023 2022 Revenues: Annuity: Insurance policy income $ 5.1 $ 5.0 Net investment income 125.4 117.5 Total annuity revenues 130.5 122.5 Health: Insurance policy income 401.4 406.7 Net investment income 74.0 73.3 Total health revenues 475.4 480.0 Life: Insurance policy income 219.0 213.3 Net investment income 36.3 35.5 Total life revenues 255.3 248.8 Change in market values of the underlying options supporting the fixed indexed annuity and life products (offset by market value changes credited to policyholder balances) 18.6 (71.9) Investment income not allocated to product lines 67.8 46.6 Fee revenue and other income: Fee income 51.3 40.3 Amounts netted in expenses not allocated to product lines 1.6 2.8 Total segment revenues $ 1,000.5 $ 869.1 (continued on next page) (continued from previous page) Three months ended March 31, 2023 2022 Expenses: Annuity: Insurance policy benefits $ 8.7 $ 9.5 Interest credited 48.1 42.5 Amortization and non-deferred commissions 16.4 14.6 Total annuity expenses 73.2 66.6 Health: Insurance policy benefits 318.1 323.1 Amortization and non-deferred commissions 40.8 41.6 Total health expenses 358.9 364.7 Life: Insurance policy benefits 147.2 153.1 Interest credited 12.1 12.0 Amortization, non-deferred commissions and advertising expense 48.6 47.7 Total life expenses 207.9 212.8 Allocated expenses 157.5 144.8 Expenses not allocated to product lines 19.9 17.6 Market value changes of options credited to fixed indexed annuity and life policyholders 18.6 (71.9) Amounts netted in investment income not allocated to product lines: Interest expense 37.4 18.1 Interest credited 7.2 6.9 Impact of annual option forfeitures related to fixed indexed annuity surrenders — (1.6) Amortization .4 .4 Other expenses 7.3 (4.2) Expenses netted in fee revenue: Commissions and other operating expenses 35.8 30.4 Total segment expenses 924.1 784.6 Pre-tax measure of profitability: Annuity margin 57.3 55.9 Health margin 116.5 115.3 Life margin 47.4 36.0 Total insurance product margin 221.2 207.2 Allocated expenses (157.5) (144.8) Income from insurance products 63.7 62.4 Fee income 15.5 9.9 Investment income not allocated to product lines 15.5 27.0 Expenses not allocated to product lines (18.3) (14.8) Operating earnings before taxes 76.4 84.5 Income tax expense on operating income 17.8 20.0 Net operating income $ 58.6 $ 64.5 A reconciliation of segment revenues and expenses to consolidated revenues and expenses and net income is as follows (dollars in millions): Three months ended March 31, 2023 2022 Total segment revenues $ 1,000.5 $ 869.1 Total investment losses (14.6) (32.7) Revenues related to earnings attributable to VIEs 20.1 6.5 Consolidated revenues 1,006.0 842.9 Total segment expenses 924.1 784.6 Insurance policy benefits - changes in fair value of embedded derivative liabilities and market risk benefits 65.1 (165.4) Expenses attributable to VIEs 17.8 6.1 Fair value changes related to agent deferred compensation plan — (22.7) Consolidated expenses 1,007.0 602.6 Income (loss) before tax (1.0) 240.3 Income tax expense (benefit) on period income (loss) (.2) 56.9 Net income (loss) (.8) $ 183.4 |
ACCOUNTING FOR DERIVATIVES
ACCOUNTING FOR DERIVATIVES | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
ACCOUNTING FOR DERIVATIVES | ACCOUNTING FOR DERIVATIVES Our freestanding and embedded derivatives, which are not designated as hedging instruments, are held at fair value and are summarized as follows (dollars in millions): Fair value March 31, December 31, 2022 Assets: Other invested assets: Fixed indexed call options $ 108.2 $ 56.7 Reinsurance receivables (16.4) (17.8) Total assets $ 91.8 $ 38.9 Liabilities: Future policy benefits: Fixed indexed products $ 1,347.9 $ 1,297.0 Total liabilities $ 1,347.9 $ 1,297.0 We are required to establish an embedded derivative related to a modified coinsurance agreement pursuant to which we assume the risks of a block of health insurance business. The embedded derivative represents the mark-to-market adjustment for approximately $88 million in underlying investments held by the ceding reinsurer at March 31, 2023. Our fixed indexed annuity products provide a guaranteed minimum rate of return and a higher potential return that is based on a percentage (the "participation rate") of the amount of increase in the value of a particular index, such as the Standard & Poor's 500 Index, over a specified period. We are generally able to change the participation rate at the beginning of each index period (typically on each policy anniversary date), subject to contractual minimums. The Company accounts for the options attributed to the policyholder for the estimated life of the contract as embedded derivatives. These accounting requirements often create volatility in the earnings from these products. We typically buy call options (including call spreads) referenced to the applicable indices in an effort to offset or hedge potential increases to policyholder benefits resulting from increases in the particular index to which the policy's return is linked. The notional amount of these options was $2.7 billion and $2.8 billion at March 31, 2023 and December 31, 2022, respectively. We purchase certain fixed maturity securities that contain embedded derivatives that are required to be held at fair value on the consolidated balance sheet. We have elected the fair value option to carry the entire security at fair value with changes in fair value recognized in net income. The following table provides the pre-tax gains (losses) recognized in revenues for derivative instruments, which are not designated as hedges for the periods indicated (dollars in millions): Three months ended March 31, 2023 2022 Net investment income (loss) from policyholder and other special-purpose portfolios: Fixed indexed call options $ 18.6 $ (72.9) Total investment gains (losses): Embedded derivative related to modified coinsurance agreement 1.4 (6.5) Total revenues from derivative instruments, not designated as hedges $ 20.0 $ (79.4) Derivative Counterparty Risk If the counterparties to the call options fail to meet their obligations, we may recognize a loss. We limit our exposure to such a loss by diversifying among several counterparties believed to be strong and creditworthy. At March 31, 2023, all of our counterparties were rated "A-" or higher by S&P Global Ratings ("S&P"). The Company and its subsidiaries are parties to master netting arrangements with its counterparties related to entering into various derivative contracts. The following table summarizes information related to derivatives with master netting arrangements or collateral as of March 31, 2023 and December 31, 2022 (dollars in millions): Gross amounts not offset in the balance sheet Gross amounts recognized Gross amounts offset in the balance sheet Net amounts of assets presented in the balance sheet Financial instruments Cash collateral received Net amount March 31, 2023: Fixed indexed call options $ 108.2 $ — $ 108.2 $ — $ — $ 108.2 December 31, 2022: Fixed indexed call options 56.7 — 56.7 — — 56.7 |
REINSURANCE
REINSURANCE | 3 Months Ended |
Mar. 31, 2023 | |
Insurance [Abstract] | |
REINSURANCE | REINSURANCE The cost of reinsurance ceded totaled $48.3 million and $52.0 million in the first quarters of 2023 and 2022, respectively. We deduct this cost from insurance policy income. Reinsurance recoveries netted against insurance policy benefits totaled $134.9 million and $93.9 million in the first quarters of 2023 and 2022, respectively. From time to time, we assume insurance from other companies. Any costs associated with the assumption of insurance are amortized consistent with the method used to amortize deferred acquisition costs. Reinsurance premiums assumed totaled $4.1 million and $4.9 million in the first quarters of 2023 and 2022, respectively. Insurance policy benefits related to reinsurance assumed totaled $4.7 million and $6.1 million in the first quarters of 2023 and 2022, respectively. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company's interim tax expense is based upon the estimated annual effective tax rate for the respective period. Under authoritative guidance, certain items are required to be excluded from the estimated annual effective tax rate calculation. Such items include changes in judgment about the realizability of deferred tax assets resulting from changes in projections of income expected to be available in future years, and items deemed to be unusual, infrequent, or that cannot be reliably estimated. In these cases, the actual tax expense or benefit applicable to that item is treated discretely and is reported in the same period as the related item. The components of income tax expense are as follows (dollars in millions): Three months ended March 31, 2023 2022 Current tax expense $ 14.0 $ 4.4 Deferred tax expense (benefit) (14.2) 52.5 Total income tax expense (benefit) $ (.2) $ 56.9 A reconciliation of the U.S. statutory corporate tax rate to the estimated annual effective rate, reflected in the consolidated statement of operations is as follows: Three months ended March 31, 2023 2022 U.S. statutory corporate rate 21.0 % 21.0 % Non-taxable income and nondeductible benefits, net (.4) — State taxes 2.7 2.7 Effective tax rate 23.3 % 23.7 % The components of the Company's income tax assets and liabilities are summarized below (dollars in millions): March 31, December 31, Deferred tax assets: Net federal operating loss carryforwards $ 149.9 $ 166.0 Net state operating loss carryforwards 2.5 2.5 Insurance liabilities 329.4 298.5 Indirect costs allocable to self-constructed real estate assets 224.4 214.8 Accumulated other comprehensive loss 470.1 552.4 Other — 7.3 Gross deferred tax assets 1,176.3 1,241.5 Deferred tax liabilities: Investments (34.8) (37.2) Present value of future profits and deferred acquisition costs (152.1) (148.9) Other (1.5) — Gross deferred tax liabilities (188.4) (186.1) Net deferred tax assets 987.9 1,055.4 Current income taxes prepaid .2 8.0 Income tax assets, net $ 988.1 $ 1,063.4 Our income tax expense includes deferred income taxes arising from temporary differences between the financial reporting and tax bases of assets and liabilities and net operating loss carryforwards ("NOLs"). Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which temporary differences are expected to be recovered or paid. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in earnings in the period when the changes are enacted. A reduction of the net carrying amount of deferred tax assets by establishing a valuation allowance is required if, based on the available evidence, it is more likely than not that such assets will not be realized. In assessing the need for a valuation allowance, all available evidence, both positive and negative, are considered to determine whether, based on the weight of that evidence, a valuation allowance for deferred tax assets is needed. This assessment requires significant judgment and considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of carryforward periods, our experience with operating loss and tax credit carryforwards expiring unused, and tax planning strategies. We evaluate the need to establish a valuation allowance for our deferred income tax assets on an ongoing basis using a deferred tax valuation model. Our model is adjusted to reflect changes in our projections of future taxable income. Our estimates of future taxable income are based on evidence we consider to be objectively verifiable. At March 31, 2023, our projection of future taxable income for purposes of determining the valuation allowance is based on our estimates of such future taxable income through the date our NOLs expire. Such estimates are subject to numerous risks and uncertainties and the extent to which actual impacts differ from the assumptions used in our deferred tax valuation model. Based on our assessment, we have concluded that it is more likely than not that all our deferred tax assets of $987.9 million will be realized through future taxable earnings. Recovery of our deferred tax asset is dependent on achieving the level of future taxable income projected in our deferred tax valuation model and failure to do so could result in an increase in the valuation allowance in a future period. Any future increase in the valuation allowance may result in additional income tax expense and reduce shareholders' equity, and such an increase could have a significant impact upon our earnings in the future. The Internal Revenue Code (the "Code") limits the extent to which losses realized by a non-life entity (or entities) may offset income from a life insurance company (or companies) to the lesser of: (i) 35 percent of the income of the life insurance company; or (ii) 35 percent of the total loss of the non-life entities (including NOLs of the non-life entities). There is no similar limitation on the extent to which losses realized by a life insurance entity (or entities) may offset income from a non-life entity (or entities). Section 382 of the Code imposes limitations on a corporation's ability to use its NOLs when the company undergoes a 50 percent ownership change over a three-year period. Future transactions and the timing of such transactions could cause an ownership change for Section 382 income tax purposes. Such transactions may include, but are not limited to, additional repurchases under our securities repurchase program, issuances of common stock and acquisitions or sales of shares of CNO stock by certain holders of our shares, including persons who have held, currently hold or may accumulate in the future five percent or more of our outstanding common stock for their own account. Many of these transactions are beyond our control. If an additional ownership change were to occur for purposes of Section 382, we would be required to calculate an annual restriction on the use of our NOLs to offset future taxable income. The annual restriction would be calculated based upon the value of CNO's equity at the time of such ownership change, multiplied by a federal long-term tax exempt rate (2.92 percent at March 31, 2023), and the annual restriction could limit our ability to use a substantial portion of our NOLs to offset future taxable income. We regularly monitor ownership change (as calculated for purposes of Section 382) and, as of March 31, 2023, we were below the 50 percent ownership change level that could limit our ability to utilize our NOLs. We have $0.7 billion of federal non-life NOLs as of March 31, 2023, as summarized below (dollars in millions): Net operating loss Year of expiration carryforwards 2023 $ 127.4 2025 85.2 2026 149.9 2027 10.8 2028 80.3 2029 213.2 2030 .3 2031 .2 2032 44.4 2033 .6 2034 .9 2035 .8 Total federal non-life NOLs $ 714.0 Our non-life NOLs can be used to offset 35 percent of life insurance company taxable income and 100 percent of non-life company taxable income until all non-life NOLs are utilized or expire. We also had deferred tax assets related to NOLs for state income taxes of $2.5 million and $2.5 million at March 31, 2023 and December 31, 2022, respectively. The related state NOLs are available to offset future state taxable income in certain states and are expected to be fully utilized prior to expiration. |
NOTES PAYABLE - DIRECT CORPORAT
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS | NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS The following notes payable were direct corporate obligations of the Company as of March 31, 2023 and December 31, 2022 (dollars in millions): March 31, December 31, 5.250% Senior Notes due May 2025 $ 500.0 $ 500.0 5.250% Senior Notes due May 2029 500.0 500.0 5.125% Subordinated Debentures due November 2060 150.0 150.0 Revolving Credit Agreement (as defined below) — — Unamortized debt issue costs (10.8) (11.2) Direct corporate obligations $ 1,139.2 $ 1,138.8 Revolving Credit Agreement The $250.0 million revolving credit agreement (the "Revolving Credit Agreement"), among other things, (i) requires the Company to maintain (each as calculated in accordance with the Revolving Credit Agreement): (i) a debt to total capitalization ratio (excluding hybrid securities, except to the extent that the aggregate amount outstanding of all such hybrid securities exceeds an amount equal to 15 percent of total capitalization) of not more than 35.0 percent (such ratio was 20.9 percent at March 31, 2023); and (ii) a minimum consolidated net worth of not less than the sum of (x) $2,674 million plus (y) 25.0 percent of the net equity proceeds received by the Company from the issuance and sale of equity interests in the Company (the Company's consolidated net worth was $3,696.2 million at March 31, 2023 compared to the minimum requirement of $2,696.2 million). The maturity date of the Revolving Credit Agreement is July 16, 2026. The Revolving Credit Agreement contains certain other restrictive covenants with which the Company must comply. The interest rate applicable to loans under the Revolving Credit Agreement is calculated as the Secured Overnight Financing Rate ("SOFR") (plus a credit spread adjustment of 0.10 percent for all available interest periods) or the base rate, at the Company’s option, plus a margin based on the Company’s unsecured debt rating. The margins under the Revolving Credit Agreement range from 1.375 percent to 2.125 percent, in the case of loans at the SOFR, and 0.375 percent to 1.125 percent, in the case of loans at the base rate. The commitment fee under the Revolving Credit Agreement is based on the Company's unsecured debt rating and the Revolving Credit Agreement includes updated benchmark interest rate replacement provisions. There were no amounts outstanding under the Revolving Credit Agreement during the three months ended March 31, 2023. |
INVESTMENT BORROWINGS
INVESTMENT BORROWINGS | 3 Months Ended |
Mar. 31, 2023 | |
Investment Borrowings [Abstract] | |
INVESTMENT BORROWINGS | INVESTMENT BORROWINGS Three of the Company's insurance subsidiaries (Bankers Life and Casualty Company ("Bankers Life"), Washington National Insurance Company ("Washington National") and Colonial Penn Life Insurance Company ("Colonial Penn")) are members of the FHLB. As members of the FHLB, our insurance subsidiaries have the ability to borrow on a collateralized basis from the FHLB. We are required to hold certain minimum amounts of FHLB common stock as a condition of membership in the FHLB, and additional amounts based on the amount of the borrowings. At March 31, 2023, the carrying value of the FHLB common stock was $79.6 million. As of March 31, 2023, collateralized borrowings from the FHLB totaled $1.8 billion and the proceeds were used to purchase matched variable rate fixed maturity securities. The borrowings are classified as investment borrowings in the accompanying consolidated balance sheet. The borrowings are collateralized by investments with an estimated fair value of $2.4 billion at March 31, 2023, which are maintained in a custodial account for the benefit of the FHLB. Substantially all of such investments are classified as fixed maturities, available for sale, in our consolidated balance sheet. The following summarizes the terms of the borrowings from the FHLB by our insurance subsidiaries (dollars in millions): Amount Maturity Interest rate at borrowed date March 31, 2023 100.0 April 2024 Variable rate – 4.973% 22.0 May 2024 Variable rate – 5.202% 15.5 July 2024 Fixed rate – 1.990% 27.0 August 2024 Fixed rate – .640% 25.0 September 2024 Variable rate – 5.439% 21.7 May 2025 Variable rate – 5.114% 18.4 June 2025 Fixed rate – 2.940% 125.0 September 2025 Variable rate – 5.170% 100.0 October 2025 Variable rate – 5.246% 100.0 October 2025 Variable rate – 5.223% 57.7 October 2025 Variable rate – 5.185% 50.0 November 2025 Variable rate – 5.226% 50.0 January 2026 Variable rate – 5.168% 50.0 January 2026 Variable rate – 5.195% 100.0 January 2026 Variable rate – 5.064% 15.0 January 2026 Variable rate – 5.487% 21.8 May 2026 Variable rate – 4.954% 50.0 May 2026 Variable rate – 5.090% 75.0 December 2026 Variable rate – 5.169% 75.0 January 2027 Variable rate – 5.060% 50.0 January 2027 Variable rate – 5.077% 50.0 January 2027 Variable rate – 5.204% 100.0 February 2027 Variable rate – 5.133% 50.0 April 2027 Variable rate – 5.135% 50.0 May 2027 Variable rate – 5.145% 100.0 June 2027 Variable rate – 5.190% 10.0 June 2027 Variable rate – 5.413% 75.0 January 2028 Variable rate – 5.174% 50.0 January 2028 Variable rate – 5.382% 50.0 January 2028 Variable rate – 5.236% 34.5 February 2028 Variable rate – 5.294% 21.0 February 2028 Variable rate – 5.156% 100.0 February 2028 Variable rate – 5.153% $ 1,839.6 Generally, the variable rate borrowings are pre-payable on each interest reset date without penalty. The fixed rate borrowings are pre-payable subject to payment of a yield maintenance fee based on prevailing market interest rates. At March 31, 2023, the aggregate yield maintenance fee to prepay all fixed rate borrowings was $1.0 million. |
CHANGES IN COMMON STOCK
CHANGES IN COMMON STOCK | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
CHANGES IN COMMON STOCK | CHANGES IN COMMON STOCK In the first three months of 2023, we repurchased 0.6 million shares of common stock for $15.1 million under our securities repurchase program. The Company had remaining repurchase authority of $171.8 million as of March 31, 2023. In May 2023, the Company's Board of Directors approved an additional $500.0 million to repurchase the Company's outstanding shares of common stock. In the first three months of 2023, we issued 1.2 million shares of common stock, net of shares withheld to pay tax withholdings, pursuant to employee benefit plans. In the first three months of 2023, dividends declared on common stock totaled $16.4 million ($0.14 per common share). In May 2023, the Company increased its quarterly common stock dividend to $0.15 per share from $0.14 per share. |
LITIGATION AND OTHER LEGAL PROC
LITIGATION AND OTHER LEGAL PROCEEDINGS | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
LITIGATION AND OTHER LEGAL PROCEEDINGS | LITIGATION AND OTHER LEGAL PROCEEDINGS Legal Proceedings The Company and its subsidiaries are involved in various legal actions in the normal course of business, in which claims for compensatory and punitive damages are asserted, some for substantial amounts. We recognize an estimated loss from these loss contingencies when we believe it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Some of the pending matters have been filed as purported class actions and some actions have been filed in certain jurisdictions that permit punitive damage awards that are disproportionate to the actual damages incurred. The amounts sought in certain of these actions are often large or indeterminate and the ultimate outcome of certain actions is difficult to predict. In the event of an adverse outcome in one or more of these matters, there is a possibility that the ultimate liability may be in excess of the liabilities we have established and could have a material adverse effect on our business, financial condition, results of operations and cash flows. In addition, the resolution of pending or future litigation may involve modifications to the terms of outstanding insurance policies or could impact the timing and amount of rate increases, which could adversely affect the future profitability of the related insurance policies. Based upon information presently available, and in light of legal, factual and other defenses available to the Company and its subsidiaries, the Company does not believe that it is probable that the ultimate liability from either pending or threatened legal actions, after consideration of existing loss provisions, will have a material adverse effect on the Company's consolidated financial condition, operating results or cash flows. However, given the inherent difficulty in predicting the outcome of legal proceedings, there exists the possibility that such legal actions could have a material adverse effect on the Company's consolidated financial condition, operating results or cash flows. In addition to the inherent difficulty of predicting litigation outcomes, particularly those that will be decided by a jury, some matters purport to seek substantial or an unspecified amount of damages for unsubstantiated conduct spanning several years based on complex legal theories and damages models. The alleged damages typically are indeterminate or not factually supported in the complaint, and, in any event, the Company's experience indicates that monetary demands for damages often bear little relation to the ultimate loss. In some cases, plaintiffs are seeking to certify classes in the litigation and class certification either has been denied or is pending and we have filed oppositions to class certification or sought to decertify a prior class certification. In addition, for many of these cases: (i) there is uncertainty as to the outcome of pending appeals or motions; (ii) there are significant factual issues to be resolved; and/or (iii) there are novel legal issues presented. Accordingly, the Company cannot reasonably estimate the possible loss or range of loss in excess of amounts accrued, if any, or predict the timing of the eventual resolution of these matters. The Company reviews these matters on an ongoing basis. When assessing reasonably possible and probable outcomes, the Company bases its assessment on the expected ultimate outcome following all appeals. On April 9, 2019, Bankers Conseco Life Insurance Company ("BCLIC") and Washington National commenced an action entitled Bankers Conseco Life Insurance Company and Washington National Insurance Company v. Wilmington Trust, National Association , in the Supreme Court of the State of New York, County of New York, Commercial Division (the "Wilmington Action"). BCLIC and Washington National seek an unspecified amount of damages, costs, attorney's fees, and other relief as the court deems appropriate. In the Wilmington Action, BCLIC and Washington National assert claims against Wilmington Trust, National Association ("Wilmington") for breaching its express contractual obligations under four trust agreements pursuant to which Wilmington was the trustee in regard to trust assets ceded as part of reinsurance agreements with Beechwood Re Ltd. ("BRe"), as well as for breaching its fiduciary duties to BCLIC and Washington National. The Court granted Wilmington's motion to dismiss this litigation. BCLIC and Washington National appealed the Court's decision. On April 20, 2021, the New York Appellate Division of the Supreme Court, First Judicial Department unanimously reversed the trial court and reinstated breach of contract and breach of fiduciary duty claims against Wilmington. The Wilmington Action is currently pending in the Supreme Court of the State of New York, County of New York, Commercial Division. On June 7, 2019, the Joint Official Liquidators of Platinum Partners Value Arbitrage Fund L.P. (in Official Liquidation) and Principal Growth Strategies, LLC, commenced suit against, among others, CNO Financial Group, Inc., BCLIC, Washington National and 40|86 Advisors, Inc. (collectively, the "CNO Parties") in Delaware Chancery Court. Plaintiffs seek an unspecified amount of damages, costs, attorney's fees, and other relief as the court deems appropriate. Plaintiffs allege that the CNO Parties were unjustly enriched when they terminated BCLIC and Washington National's reinsurance agreements with BRe and recaptured assets from reinsurance trusts, in particular, Agera securities. Plaintiffs contend that the Agera securities were fraudulently transferred to the reinsurance trusts by other Platinum-related entities and they are seeking to claw back those Agera securities, or the value of those assets, from the CNO Parties. The CNO Parties are vigorously contesting the plaintiff's claims. The CNO Parties had removed the case to the United States District Court for the District of Delaware but on April 6, 2020, the District Court granted the plaintiff's motion to remand the case back to the Delaware Chancery Court. Plaintiffs have filed an Amended Complaint and the CNO Parties have moved to dismiss the Amended Complaint. The Delaware Chancery Court denied the CNO Parties’ motions to dismiss the Amended Complaint on the basis of forum non conveniens, but granted the CNO Parties’ motion to stay the case pending the conclusion of a related matter. After the stay is lifted, the court will address the CNO Parties’ and other defendants’ motions to dismiss the Amended Complaint on numerous other grounds. On June 28, 2019, BCLIC and Washington National commenced an action entitled Bankers Conseco Life Insurance Company and Washington National Insurance Company v. KPMG LLP, in the Supreme Court of the State of New York, County of New York, Commercial Division (the "KPMG Action"). BCLIC and Washington National seek an unspecified amount of damages, costs, attorney's fees, and other relief as the court deems appropriate. In the KPMG Action, BCLIC and Washington National assert claims against KPMG LLP ("KPMG") for aiding and abetting fraud, constructive fraud and negligent misrepresentation arising from KPMG's alleged role in the Platinum Partners' scheme to defraud BCLIC and Washington National into reinsuring its long-term care business with BRe. The Court granted KPMG’s motion to dismiss this litigation. BCLIC and Washington National appealed the Court's decision. On December 1, 2020, the New York Appellate Division of the Supreme Court, First Judicial Department unanimously reversed the trial court and reinstated the aiding and abetting claim against KPMG. The KPMG Action is currently pending in the Supreme Court of the State of New York, County of New York, Commercial Division. On October 5, 2012, plaintiffs William Jeffrey Burnett and Joe H. Camp commenced an action entitled Burnett v. Conseco Life Ins. Co. against, among others, CNO Financial Group, Inc. and CNO Services, LLC (collectively, the "CNO Entities") in the United States District Court for the Central District of California on behalf of a putative class of former interest-sensitive whole life insurance policyholders who surrendered their policies or let them lapse. Plaintiffs' first amended complaint alleges that the CNO Entities are liable under an alter ego theory for Conseco Life Insurance Company's purported breach of the optional premium payment provision (the "Optional Premium Payment") of plaintiffs' insurance policies. In January 2018, the case was transferred to the United States District Court for the Southern District of Indiana (the "Court"). On August 17, 2020, the Court denied the CNO Entities' motions to dismiss. On January 13, 2021, the Court granted final approval of a class action settlement between plaintiffs and co-defendant Conseco Life Insurance Company (n/k/a Wilco Life Insurance Company). The case remains pending against the CNO Entities. On March 25, 2022, the Court certified a Rule 23(b)(3) class of under 2,000 policyholders who invoked the policy's Optional Premium Payment prior to October 2008 and who surrendered their policies between October 7, 2008 and September 1, 2011. The Court's certification order acknowledged the existence of individualized issues of causation and damages, which the Court stated could be addressed in individualized proceedings following a class trial on the alter ego allegations and the meaning of the subject insurance policy language. The CNO Entities continue to vigorously defend the case. Regulatory Examinations and Fines Insurance companies face significant risks related to regulatory investigations and actions. Regulatory investigations generally result from matters related to sales or underwriting practices, payment of contingent or other sales commissions, claim payments and procedures, product design, product disclosure, additional premium charges for premiums paid on a periodic basis, denial or delay of benefits, charging excessive or impermissible fees on products, procedures related to canceling policies, changing the way cost of insurance charges are calculated for certain life insurance products or recommending |
CONSOLIDATED STATEMENT OF CAS_2
CONSOLIDATED STATEMENT OF CASH FLOWS | 3 Months Ended |
Mar. 31, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
CONSOLIDATED STATEMENT OF CASH FLOWS | CONSOLIDATED STATEMENT OF CASH FLOWS The following reconciles net income (loss) to net cash from operating activities (dollars in millions): Three months ended March 31, 2023 2022 Cash flows from operating activities: Net income (loss) $ (.8) $ 183.4 Adjustments to reconcile net income (loss) to net cash from operating activities: Amortization and depreciation 65.7 61.1 Income taxes (6.4) 42.3 Insurance liabilities 173.3 (152.4) Accrual, amortization and fair value changes included in investment income (27.9) 52.2 Deferral of policy acquisition costs (89.8) (83.7) Net investment losses 14.6 32.7 Other (a) (46.8) (79.2) Net cash from operating activities $ 81.9 $ 56.4 _____________ (a) Primarily relates to: (i) changes in other assets and liabilities related to the timing of payments and receipts; and (ii) the change in fair value of the deferred compensation plan liability. Other non-cash items not reflected in the investing and financing activities sections of the consolidated statement of cash flows (dollars in millions): Three months ended March 31, 2023 2022 Amounts related to employee benefit plans $ 6.5 $ 7.2 |
INVESTMENTS IN VARIABLE INTERES
INVESTMENTS IN VARIABLE INTEREST ENTITIES | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
INVESTMENTS IN VARIABLE INTEREST ENTITIES | INVESTMENTS IN VARIABLE INTEREST ENTITIES We have concluded that we are the primary beneficiary with respect to certain VIEs, which are consolidated in our financial statements. In consolidating the VIEs, we consistently use the financial information most recently distributed to investors in the VIE. All of the VIEs are collateralized loan trusts that were established to issue securities to finance the purchase of corporate loans and other permitted investments. The assets held by the trusts are legally isolated and not available to the Company. The liabilities of the VIEs are expected to be satisfied from the cash flows generated by the underlying loans held by the trusts, not from the assets of the Company. The Company has no financial obligation to the VIEs beyond its investment in each VIE. Certain of our subsidiaries are noteholders of the VIEs. Another subsidiary of the Company is the investment manager for the VIEs. As such, it has the power to direct the most significant activities of the VIEs which materially impacts the economic performance of the VIEs. The following tables provide supplemental information about the assets and liabilities of the VIEs which have been consolidated in accordance with authoritative guidance (dollars in millions): March 31, 2023 VIEs Eliminations Net effect on Assets: Investments held by variable interest entities $ 1,017.9 $ — $ 1,017.9 Notes receivable of VIEs held by subsidiaries — (113.8) (113.8) Cash and cash equivalents held by variable interest entities 97.1 — 97.1 Accrued investment income 4.0 — 4.0 Income tax assets, net 16.6 — 16.6 Other assets 4.5 (.8) 3.7 Total assets $ 1,140.1 $ (114.6) $ 1,025.5 Liabilities: Other liabilities $ 26.8 $ (3.9) $ 22.9 Borrowings related to variable interest entities 1,065.4 — 1,065.4 Notes payable of VIEs held by subsidiaries 126.1 (126.1) — Total liabilities $ 1,218.3 $ (130.0) $ 1,088.3 December 31, 2022 VIEs Eliminations Net effect on Assets: Investments held by variable interest entities $ 1,077.6 $ — $ 1,077.6 Notes receivable of VIEs held by subsidiaries — (113.8) (113.8) Cash and cash equivalents held by variable interest entities 69.2 — 69.2 Accrued investment income 3.5 — 3.5 Income tax assets, net 19.6 — 19.6 Other assets 2.5 (.8) 1.7 Total assets $ 1,172.4 $ (114.6) $ 1,057.8 Liabilities: Other liabilities $ 29.3 $ (2.4) $ 26.9 Borrowings related to variable interest entities 1,104.6 — 1,104.6 Notes payable of VIEs held by subsidiaries 126.1 (126.1) — Total liabilities $ 1,260.0 $ (128.5) $ 1,131.5 The investment portfolios held by the VIEs are primarily comprised of commercial bank loans to corporate obligors which are almost entirely rated below-investment grade. At March 31, 2023, such loans had an amortized cost of $1,060.3 million; gross unrealized gains of $1.4 million; gross unrealized losses of $40.3 million; allowance for credit losses of $3.5 million; and an estimated fair value of $1,017.9 million. The following table summarizes changes in the allowance for credit losses related to corporate securities held by VIEs for the three months ended March 31, 2023 and 2022 (dollars in millions): Three months ended March 31, 2023 2022 Allowance at the beginning of the period $ 5.5 $ 3.7 Additions for securities for which credit losses were not previously recorded .3 1.5 Additions for purchased securities with deteriorated credit — — Additions (reductions) for securities where an allowance was previously recorded (.7) 1.3 Reduction for securities sold during the period (1.6) (.6) Reduction for securities for which the Company made the decision to sell where an allowance was previously recorded — — Write-offs — — Recoveries of previously written-off amount — — Allowance at the end of the period $ 3.5 $ 5.9 The following table sets forth the amortized cost and estimated fair value of the investments held by the VIEs at March 31, 2023, by contractual maturity. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties. Amortized Estimated (Dollars in millions) Due in one year or less $ 5.4 $ 4.7 Due after one year through five years 782.3 752.8 Due after five years through ten years 272.6 260.4 Total $ 1,060.3 $ 1,017.9 During the first three months of 2023, the VIEs recognized investment losses of $0.6 million which were comprised of: (i) $2.6 million of net losses from the sales of fixed maturities; and (ii) a decrease in the allowance for credit losses of $2.0 million. Such net realized losses included gross realized losses of $2.6 million from the sale of $5.6 million of investments. During the first three months of 2022, the VIEs recognized net investment losses of $3.2 million which were comprised of: (i) $0.8 million of net losses from the sales of fixed maturities; (ii) the change in market value of other investments of $(0.2) million; and (iii) an increase in the allowance for credit losses of $2.2 million. Such net realized losses included gross realized losses of $0.8 million from the sale of $11.7 million of investments. At March 31, 2023, there were no fixed maturity investments held by the VIEs in default. At March 31, 2023, the VIEs held: (i) investments (for which an allowance for credit losses has not been recorded) with a fair value of $214.9 million and gross unrealized losses not deemed to have credit losses of $3.3 million that had been in an unrealized loss position for less than twelve months; and (ii) investments (for which an allowance for credit losses has not been recorded) with a fair value of $571.3 million and gross unrealized losses not deemed to have credit losses of $19.4 million that had been in an unrealized loss position for twelve months or greater. At December 31, 2022, the VIEs held: (i) investments (for which an allowance for credit losses has not been recorded) with a fair value of $392.2 million and gross unrealized losses of $14.2 million that had been in an unrealized loss position for less than twelve months; and (ii) investments (for which an allowance for credit losses has not been recorded) with a fair value of $477.9 million and gross unrealized losses of $17.3 million that had been in an unrealized loss position for twelve months or greater. The investments held by the VIEs are evaluated for impairment in a manner that is consistent with the Company's fixed maturities, available for sale. In addition, the Company, in the normal course of business, makes passive investments in structured securities issued by VIEs for which the Company is not the investment manager. These structured securities include asset-backed securities, collateralized loan obligations, commercial mortgage-backed securities, agency residential mortgage-backed securities and non-agency residential mortgage-backed securities. Our maximum exposure to loss on these securities is limited to our cost basis in the investment. We have determined that we are not the primary beneficiary of these structured securities due to the relative size of our investment in comparison to the total principal amount of the individual structured securities and the level of credit subordination which reduces our obligation to absorb gains or losses. At March 31, 2023, we held investments in various limited partnerships and hedge funds, in which we are not the primary beneficiary, totaling $578.5 million (classified as other invested assets). At March 31, 2023, we had unfunded commitments to these partnerships totaling $431.0 million. Our maximum exposure to loss on these investments is limited to the amount of our investment. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and, therefore, represents an exit price, not an entry price. We carry certain assets and liabilities at fair value on a recurring basis, including fixed maturities, equity securities, trading securities, investments held by VIEs, derivatives, separate account assets and embedded derivatives. We carry our COLI, which is invested in a series of mutual funds, at its cash surrender value which approximates fair value. In addition, we disclose fair value for certain financial instruments, including mortgage loans, policy loans, cash and cash equivalents, insurance liabilities for interest-sensitive products and funding agreements, investment borrowings, notes payable and borrowings related to VIEs. The degree of judgment utilized in measuring the fair value of financial instruments is largely dependent on the level to which pricing is based on observable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our view of market assumptions in the absence of observable market information. Financial instruments with readily available active quoted prices would be considered to have fair values based on the highest level of observable inputs, and little judgment would be utilized in measuring fair value. Financial instruments that rarely trade would often have fair value based on a lower level of observable inputs, and more judgment would be utilized in measuring fair value. Valuation Hierarchy There is a three-level hierarchy for valuing assets or liabilities at fair value based on whether inputs are observable or unobservable. • Level 1 – includes assets and liabilities valued using inputs that are unadjusted quoted prices in active markets for identical assets or liabilities. Our Level 1 assets primarily include cash and cash equivalents and exchange-traded securities. • Level 2 – includes assets and liabilities valued using inputs that are quoted prices for similar assets in an active market, quoted prices for identical or similar assets in a market that is not active, observable inputs, or observable inputs that can be corroborated by market data. Level 2 assets and liabilities include those financial instruments that are valued by independent pricing services using models or other valuation methodologies. These models consider various inputs such as credit rating, maturity, corporate credit spreads, reported trades and other inputs that are observable or derived from observable information in the marketplace or are supported by transactions executed in the marketplace. Financial assets in this category primarily include: certain publicly registered and privately placed corporate fixed maturity securities; certain government or agency securities; certain mortgage and asset-backed securities; certain equity securities; most investments held by our consolidated VIEs; and derivatives such as call options. Financial liabilities in this category include investment borrowings, notes payable and borrowings related to VIEs. • Level 3 – includes assets and liabilities valued using unobservable inputs that are used in model-based valuations that contain management assumptions. Level 3 assets and liabilities include those financial instruments whose fair value is estimated based on broker/dealer quotes, pricing services or internally developed models or methodologies utilizing significant inputs not based on, or corroborated by, readily available market information. Financial assets in this category include certain corporate securities, certain structured securities, mortgage loans, and other less liquid securities. Financial liabilities in this category include our insurance liabilities for interest-sensitive products, which includes embedded derivatives (including embedded derivatives related to our fixed indexed annuity products and to a modified coinsurance arrangement), and funding agreements since their values include significant unobservable inputs including actuarial assumptions. At each reporting date, we classify assets and liabilities into the three input levels based on the lowest level of input that is significant to the measurement of fair value for each asset and liability reported at fair value. This classification is impacted by a number of factors, including the type of financial instrument, whether the financial instrument is new to the market and not yet established, the characteristics specific to the transaction and overall market conditions. Our assessment of the significance of a particular input to the fair value measurement and the ultimate classification of each asset and liability requires judgment and is subject to change from period to period based on the observability of the valuation inputs. The vast majority of our assets carried at fair value use Level 2 inputs for the determination of fair value. These fair values are obtained primarily from independent pricing services, which use Level 2 inputs for the determination of fair value. Our Level 2 assets are valued as follows: • Fixed maturities available for sale, equity securities and trading securities Corporate securities are generally priced using market and income approaches using independent pricing services. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, issuer rating, benchmark yields, maturity and credit spreads. U.S. Treasuries and obligations of U.S. Government corporations and agencies are generally priced using the market approach. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets and maturity. States and political subdivisions are generally priced using the market approach using independent pricing services. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, new issuances and credit spreads. Foreign governments are generally priced using the market approach using independent pricing services. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, new issuances, benchmark yields, credit spreads and issuer rating. Asset-backed securities, agency and non-agency residential mortgage-backed securities, collateralized loan obligations and commercial mortgage-backed securities are generally priced using market and income approaches using independent pricing services. Inputs generally consist of quoted prices in inactive markets, spreads on actively traded securities, expected prepayments, expected default rates, expected recovery rates and issue specific information including, but not limited to, collateral type, seniority and vintage. Equity securities are generally priced using the market approach. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, issuer rating, benchmark yields, maturity and credit spreads. • Investments held by VIEs Corporate securities are generally priced using market and income approaches using pricing vendors. Inputs generally consist of issuer rating, benchmark yields, maturity, and credit spreads. • Other invested assets - derivatives The fair value measurements for derivative instruments, including embedded derivatives requiring bifurcation, are determined based on the consideration of several inputs including closing exchange or over-the-counter market price quotes, time value and volatility factors underlying options, market interest rates and non-performance risk. Third-party pricing services normally derive security prices through recently reported trades for identical or similar securities making adjustments through the reporting date based upon available market observable information. If there are no recently reported trades, the third-party pricing services may use matrix or model processes to develop a security price where future cash flow expectations are discounted at an estimated risk-adjusted market rate. The number of prices obtained for a given security is dependent on the Company's analysis of such prices as further described below. As the Company is responsible for the determination of fair value, we have control processes designed to ensure that the fair values received from third-party pricing sources are reasonable and the valuation techniques and assumptions used appear reasonable and consistent with prevailing market conditions. Additionally, when inputs are provided by third-party pricing sources, we have controls in place to review those inputs for reasonableness. As part of these controls, we perform monthly quantitative and qualitative analysis on the prices received from third parties to determine whether the prices are reasonable estimates of fair value. The Company's analysis includes: (i) a review of the methodology used by third-party pricing services; (ii) where available, a comparison of multiple pricing services' valuations for the same security; (iii) a review of month to month price fluctuations; (iv) a review to ensure valuations are not unreasonably dated; and (v) back testing to compare actual purchase and sale transactions with valuations received from third parties. As a result of such procedures, the Company may conclude a particular price received from a third party is not reflective of current market conditions. In those instances, we may request additional pricing quotes or apply internally developed valuations. However, the number of such instances is insignificant and the aggregate change in value of such investments is not materially different from the original prices received. The categorization of the fair value measurements of our investments priced by independent pricing services was based upon the Company's judgment of the inputs or methodologies used by the independent pricing services to value different asset classes. Such inputs typically include: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers and other relevant data. The Company categorizes such fair value measurements based upon asset classes and the underlying observable or unobservable inputs used to value such investments. For securities that are not priced by pricing services and may not be reliably priced using pricing models, we obtain broker quotes. These broker quotes are non-binding and represent an exit price, but assumptions used to establish the fair value may not be observable and therefore represent Level 3 inputs. Approximately 86 percent of our Level 3 fixed maturity securities and trading securities were valued using unadjusted broker quotes or broker-provided valuation inputs. The remaining Level 3 fixed maturity investments do not have readily determinable market prices and/or observable inputs. For these securities, we use internally developed valuations. Key assumptions used to determine fair value for these securities may include risk premiums, projected performance of underlying collateral and other factors involving significant assumptions which may not be reflective of an active market. For certain investments, we use a matrix or model process to develop a security price where future cash flow expectations are discounted at an estimated market rate. The pricing matrix incorporates term interest rates as well as a spread level based on the issuer's credit rating, other factors relating to the issuer, and the security's maturity. In some instances issuer-specific spread adjustments, which can be positive or negative, are made based upon internal analysis of security specifics such as liquidity, deal size, and time to maturity. The categorization of fair value measurements, by input level, for our financial instruments carried at fair value on a recurring basis at March 31, 2023 is as follows (dollars in millions): Quoted prices in active markets Significant other observable inputs Significant unobservable inputs Total Assets: Fixed maturities, available for sale: Corporate securities $ — $ 11,848.6 $ 127.8 $ 11,976.4 United States Treasury securities and obligations of United States government corporations and agencies — 170.1 — 170.1 States and political subdivisions — 2,462.6 — 2,462.6 Foreign governments — 78.6 — 78.6 Asset-backed securities — 1,299.1 41.1 1,340.2 Agency residential mortgage-backed securities — 215.9 — 215.9 Non-agency residential mortgage-backed securities — 1,606.7 33.8 1,640.5 Collateralized loan obligations — 918.9 — 918.9 Commercial mortgage-backed securities — 2,290.1 13.8 2,303.9 Total fixed maturities, available for sale — 20,890.6 216.5 21,107.1 Equity securities - corporate securities 31.1 — 75.0 106.1 Trading securities: Asset-backed securities — 25.5 — 25.5 Agency residential mortgage-backed securities — .3 — .3 Non-agency residential mortgage-backed securities — 58.3 .5 58.8 Commercial mortgage-backed securities — 123.5 — 123.5 Total trading securities — 207.6 .5 208.1 Investments held by variable interest entities - corporate securities — 1,017.9 — 1,017.9 Other invested assets: Derivatives — 108.2 — 108.2 Residual tranches — .9 19.2 20.1 Total other invested assets — 109.1 19.2 128.3 Market risk benefit asset — — 57.8 57.8 Assets held in separate accounts — 2.8 — 2.8 Total assets carried at fair value by category $ 31.1 $ 22,228.0 $ 369.0 $ 22,628.1 Liabilities: Market risk benefit liability $ — $ — $ 17.6 $ 17.6 Embedded derivatives associated with fixed indexed annuity products (classified as policyholder account liabilities) — — 1,347.9 1,347.9 Total liabilities carried at fair value by category $ — $ — $ 1,365.5 $ 1,365.5 The categorization of fair value measurements, by input level, for our financial instruments carried at fair value on a recurring basis at December 31, 2022 is as follows (dollars in millions): Quoted prices in active markets Significant other observable inputs Significant unobservable inputs Total Assets: Fixed maturities, available for sale: Corporate securities $ — $ 11,584.9 $ 127.8 $ 11,712.7 United States Treasury securities and obligations of United States government corporations and agencies — 158.7 — 158.7 States and political subdivisions — 2,388.5 — 2,388.5 Foreign governments — 74.7 — 74.7 Asset-backed securities — 1,230.0 57.0 1,287.0 Agency residential mortgage-backed securities — 175.0 — 175.0 Non-agency residential mortgage-backed securities — 1,492.3 56.2 1,548.5 Collateralized loan obligations — 782.5 3.4 785.9 Commercial mortgage-backed securities — 2,207.9 14.5 2,222.4 Total fixed maturities, available for sale — 20,094.5 258.9 20,353.4 Equity securities - corporate securities 59.6 — 75.7 135.3 Trading securities: Asset-backed securities — 15.1 — 15.1 Agency residential mortgage-backed securities — .3 — .3 Non-agency residential mortgage-backed securities — 60.2 .5 60.7 Commercial mortgage-backed securities — 131.8 — 131.8 Total trading securities — 207.4 .5 207.9 Investments held by variable interest entities - corporate securities — 1,077.6 — 1,077.6 Other invested assets: Derivatives — 56.7 — 56.7 Residual tranches — — 18.3 18.3 Total other invested assets — 56.7 18.3 75.0 Market risk benefit asset — — 65.3 65.3 Assets held in separate accounts — 2.7 — 2.7 Total assets carried at fair value by category $ 59.6 $ 21,438.9 $ 418.7 $ 21,917.2 Liabilities: Market risk benefit liability $ — $ — $ 11.3 $ 11.3 Embedded derivatives associated with fixed indexed annuity products (classified as policyholder account liabilities) — — 1,297.0 1,297.0 Total liabilities carried at fair value by category $ — $ — $ 1,308.3 $ 1,308.3 The fair value of our financial instruments disclosed at fair value on a recurring basis are as follows (dollars in millions): March 31, 2023 Quoted prices in active markets for identical assets or liabilities Significant other observable inputs Significant unobservable inputs Total estimated fair value Total carrying amount Assets: Mortgage loans $ — $ — $ 1,557.5 $ 1,557.5 $ 1,676.1 Policy loans — — 123.0 123.0 123.0 Other invested assets: Company-owned life insurance — 201.3 — 201.3 201.3 Cash and cash equivalents: Unrestricted 425.0 — — 425.0 425.0 Held by variable interest entities 97.1 — — 97.1 97.1 Liabilities: Policyholder account liabilities — — 15,302.9 15,302.9 15,302.9 Investment borrowings — 1,840.6 — 1,840.6 1,839.6 Borrowings related to variable interest entities — 1,034.8 — 1,034.8 1,065.4 Notes payable – direct corporate obligations — 1,079.5 — 1,079.5 1,139.2 December 31, 2022 Quoted prices in active markets for identical assets or liabilities Significant other observable inputs Significant unobservable inputs Total estimated fair value Total carrying amount Assets: Mortgage loans $ — $ — $ 1,273.6 $ 1,273.6 $ 1,411.9 Policy loans — — 121.6 121.6 121.6 Other invested assets: Company-owned life insurance — 199.1 — 199.1 199.1 Cash and cash equivalents: Unrestricted 575.7 — — 575.7 575.7 Held by variable interest entities 69.2 — — 69.2 69.2 Liabilities: Policyholder account liabilities — — 15,234.2 15,234.2 15,234.2 Investment borrowings — 1,640.5 — 1,640.5 1,639.5 Borrowings related to variable interest entities — 1,066.3 — 1,066.3 1,104.6 Notes payable – direct corporate obligations — 1,077.0 — 1,077.0 1,138.8 The following table presents additional information about assets measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the three months ended March 31, 2023 (dollars in millions): March 31, 2023 Beginning balance as of December 31, 2022 Purchases, sales, issuances and settlements, net (b) Total realized and unrealized gains (losses) included in net income Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) Transfers into Level 3 (a) Transfers out of Ending balance as of March 31, 2023 Amount of total gains (losses) for the three months ended March 31, 2023 included in our net income relating to assets still held as of the reporting date Amount of total gains (losses) for the three months ended March 31, 2023 included in accumulated other comprehensive income (loss) relating to assets still held as of the reporting date Assets: Fixed maturities, available for sale: Corporate securities $ 127.8 $ (.5) $ .1 $ .9 $ 5.9 $ (6.4) $ 127.8 $ .1 $ .1 Asset-backed securities 57.0 (5.1) (.2) (.2) — (10.4) 41.1 — (.5) Non-agency residential mortgage-backed securities 56.2 (.2) — 2.3 — (24.5) 33.8 — 2.4 Collateralized loan obligations 3.4 — — — — (3.4) — — — Commercial mortgage-backed securities 14.5 — — (.7) — — 13.8 — (.7) Total fixed maturities, available for sale 258.9 (5.8) (.1) 2.3 5.9 (44.7) 216.5 .1 1.3 Equity securities - corporate securities 75.7 — (.7) — — — 75.0 (.7) — Trading securities - non-agency residential mortgage-backed securities .5 — — — — — .5 — — Other invested assets - residual tranches 18.3 .5 .4 — — — 19.2 .4 — _________ (a) Transfers into Level 3 are the result of unobservable inputs utilized within valuation methodologies for assets that were previously valued using observable inputs. Transfers out of Level 3 are due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company is able to validate. (b) Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset but does not represent changes in fair value for the instruments held at the beginning of the period. Such activity primarily consists of purchases and sales of fixed maturity and equity securities. The following summarizes such activity for the three months ended March 31, 2023 (dollars in millions): Purchases Sales Issuances Settlements Purchases, sales, issuances and settlements, net Assets: Fixed maturities, available for sale: Corporate securities $ .9 $ (1.4) $ — $ — $ (.5) Asset-backed securities 2.3 (7.4) — — (5.1) Non-agency residential mortgage-backed securities — (.2) — — (.2) Total fixed maturities, available for sale 3.2 (9.0) — — (5.8) Other invested assets - residual tranches .7 (.2) — — .5 The following table presents additional information about assets measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the three months ended March 31, 2022 (dollars in millions): March 31, 2022 Beginning balance as of December 31, 2021 Purchases, sales, issuances and settlements, net (b) Total realized and unrealized gains (losses) included in net income Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) Transfers into Level 3 (a) Transfers out of Level 3 (a) Ending balance as of March 31, 2022 Amount of total gains (losses) for the three months ended March 31, 2022 included in our net income relating to assets still held as of the reporting date Amount of total gains (losses) for the three months ended March 31, 2022 included in accumulated other comprehensive income (loss) relating to assets still held as of the reporting date Assets: Fixed maturities, available for sale: Corporate securities $ 89.7 $ — $ (1.4) $ (6.5) $ 36.2 $ — $ 118.0 $ (2.1) $ (6.5) Asset-backed securities 26.6 15.9 — (1.3) — — 41.2 — (1.3) Non-agency residential mortgage-backed securities — — — (.6) 5.0 — 4.4 — (.6) Collateralized loan obligations 5.0 10.0 — (.2) — (5.0) 9.8 — (.2) Commercial mortgage-backed securities 19.0 — — (1.5) — — 17.5 — (1.5) Total fixed maturities, available for sale 140.3 25.9 (1.4) (10.1) 41.2 (5.0) 190.9 (2.1) (10.1) Equity securities - corporate securities 11.5 (2.9) (.2) — — — 8.4 (.2) — Trading securities: Non-agency residential mortgage-backed securities 3.5 — — — — (3.5) — — — Commercial mortgage-backed securities 12.9 — (.4) .2 — — 12.7 (.4) — Total trading securities 16.4 — (.4) .2 — (3.5) 12.7 (.4) — Investments held by variable interest entities - corporate securities 2.2 (2.1) (.1) — — — — — — ____________ (a) Transfers into Level 3 are the result of unobservable inputs utilized within valuation methodologies for assets that were previously valued using observable inputs. Transfers out of Level 3 are due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company is able to validate. (b) Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset but does not represent changes in fair value for the instruments held at the beginning of the period. Such activity primarily consists of purchases and sales of fixed maturity and equity securities. The following summarizes such activity for the three months ended March 31, 2022 (dollars in millions): Purchases Sales Issuances Settlements Purchases, sales, issuances and settlements, net Assets: Fixed maturities, available for sale: Corporate securities $ 9.4 $ (9.4) $ — $ — $ — Asset-backed securities 16.0 (.1) — — 15.9 Collateralized loan obligations 10.0 — — — 10.0 Total fixed maturities, available for sale 35.4 (9.5) — — 25.9 Equity securities - corporate securities .3 (3.2) — — (2.9) Investments held by variable interest entities - corporate securities — (2.1) — — (2.1) Realized and unrealized investment gains and losses presented in the preceding tables represent gains and losses during the time the applicable financial instruments were classified as Level 3. Realized and unrealized gains (losses) on Level 3 assets are primarily reported in either net investment income for policyholder and other special-purpose portfolios or investment gains (losses) within the consolidated statement of operations; or accumulated other comprehensive income (loss) within shareholders' equity based on the appropriate accounting treatment for the instrument. The amount presented for gains (losses) included in our net income for assets still held as of the reporting date primarily represents: (i) the change in allowance for credit losses for fixed maturities, available for sale; and (ii) changes in fair value of equity securities and trading securities that are held as of the reporting date. The amount presented for gains (losses) included in accumulated other comprehensive income (loss) for assets still held as of the reporting date primarily represents changes in the fair value of fixed maturities, available for sale, that are held as of the reporting date. At March 31, 2023, 87 percent of our Level 3 fixed maturities, available for sale, were investment grade and 59 percent of our Level 3 fixed maturities, available for sale, consisted of corporate securities. The following table summarizes changes in the value of our embedded derivatives associated with fixed indexed annuity products (classified as policyholder account liabilities) which are measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value (dollars in millions): Three months ended March 31, 2023 2022 Balance at beginning of the period $ 1,297.0 $ 1,724.1 Premiums less benefits (14.0) 21.1 Change in fair value, net 64.9 (201.7) Balance at end of the period $ 1,347.9 $ 1,543.5 The change in fair value, net for each period in our embedded derivatives is included in the consolidated statement of operations. The following table provides additional information about the significant unobservable (Level 3) inputs developed internally by the Company to determine fair value for certain assets and liabilities carried at fair value at March 31, 2023 (dollars in millions): Fair value at March 31, 2023 Valuation techniques Unobservable inputs Range (weighted average) (a) Assets: Corporate securities (b) $ 2.9 Discounted cash flow analysis Discount margins 2.41% Corporate securities (c) 3.5 Recovery method Percent of recovery expected 0.00% - 35.00% (35.00%) Corporate securities (d) .5 Unadjusted purchase price Not applicable Not applicable Asset-backed securities (e) 23.1 Discounted cash flow analysis Discount margins 1.99% - 4.02% (3.20%) Equity securities (f) 63.6 Market comparables EBITDA multiples 8.8X Equity securities (g) .1 Recovery method Percent of recovery expected 0.00% - 100.00% (100.00%) Equity securities (h) 11.4 Unadjusted purchase price Not applicable Not applicable Other assets categorized as Level 3 (i) 206.1 Unadjusted third-party price source Not applicable Not applicable Market risk benefit asset (k) 57.8 Discounted cash flow analysis Surrender rates 1.28% - 11.05% (3.45%) Utilization rates 5.92% - 47.62% (22.54%) Total 369.0 Liabilities: Market risk benefit liability (k) 17.6 Discounted cash flow analysis Surrender rates 1.28% - 11.05% (3.45%) Utilization rates 5.92% - 47.62% (22.54%) Embedded derivatives related to fixed indexed annuity products (classified as policyholder account liabilities) (j) 1,347.9 Discounted projected embedded derivatives Projected portfolio yields 4.30% - 4.63% (4.31%) Discount rates 3.47% - 5.33% (4.13%) Surrender rates 1.90% - 27.70% (9.20%) ________________________________ (a) The weighted average is based on the relative fair value of the related assets or liabilities. (b) Corporate securities - The significant unobservable input used in the fair value measurement of our corporate securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would have resulted in a significantly lower (higher) fair value measurement. (c) Corporate securities - The significant unobservable input used in the fair value measurement of these corporate securities is percentage of recovery expected. Significant increases (decreases) in percentage of recovery expected in isolation would have resulted in a significantly higher (lower) fair value measurement. (d) Corporate securities - For these assets, there were no adjustments to the purchase price. (e) Asset-backed securities - The significant unobservable input used in the fair value measurement of these asset-backed securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would have resulted in a significantly lower (higher) fair value measurement. (f) Equity securities - The significant unobservable input used in the fair value measurement of these equity securities is multiples of earnings before interest, taxes, depreciation and amortization ("EBITDA"). Generally, increases (decreases) in the EBITDA multiples would result in higher (lower) fair value measurements. (g) Equity securities - The significant unobservable input used in the fair value measurement of these equity securities is percentage of recovery expected. Significant increases (decreases) in percentage of recovery expected in isolation would have resulted in a significantly higher (lower) fair value measurement. (h) Equity securities - For these assets, there were no adjustments to the purchase price. (i) Other assets categorized as Level 3 - For these assets, there were no adjustments to non-binding quoted market prices obtained from third-party pricing sources. (j) Embedded derivatives related to fixed indexed annuity products (classified as policyholder account liabilities) - The significant unobservable inputs used in the fair value measurement of our embedded derivatives associated with fixed indexed annuity products are projected portfolio yields, discount rates and surrender rates. Increases (decreases) in projected portfolio yields in isolation would have resulted in a higher (lower) fair value measurement. The discount rate is based on risk free rates (U.S. Treasury rates for similar durations) adjusted for our non-performance risk and risk margins for non-capital market inputs. Increases (decreases) in the discount rates would have resulted in a lower (higher) fair value measurement. Assumed surrender rates are used to project how long the contracts remain in force. Generally, the longer the contracts are assumed to be in force the higher the fair value of the embedded derivative. (k) Market risk benefits – Many of our fixed indexed annuity products include a GLWB that is considered a MRB. The calculation of the value of MRBs are based on significant unobservable inputs including assumptions related to surrenders and utilization of policy benefits. These assumptions are based on actuarial estimates and past experience. Increases in assumed surrender rates would generally increase the value of a MRB asset or decrease the value of a MRB liability (with decreases in assumed surrender rates having the opposite impacts). Increases in utilization rates would generally decrease the value of a MRB asset or increase the value of a MRB liability (with decreases in utilization rates having the opposite impacts). The following table provides additional information about the significant unobservable (Level 3) inputs developed internally by the Company to determine fair value for certain assets and liabilities carried at fair value at December 31, 2022 (dollars in millions): Fair value at December 31, 2022 Valuation techniques Unobservable inputs Range (weighted average) (a) Assets: Corporate securities (b) $ 2.9 Discounted cash flow analysis Discount margins 2.23% - 3.94% (2.25%) Corporate securities (c) 3.5 Recovery method Percent of recovery expected 0.00% - 35.00% (35.00%) Corporate securities (d) .5 Unadjusted purchase price Not applicable Not applicable Asset-backed securities (e) 21.8 Discounted cash flow analysis Discount margins 2.50% - 3.86% (3.30%) Equity securities (f) 63.9 Market comparables EBITDA multiples 8.5X Equity securities (g) .1 Recovery method Percent of recovery expected 0.00% - 100.00% (100.00%) Equity securities (h) 11.7 Unadjusted purchase price Not applicable Not applicable Other assets categorized as Level 3 (i) 249.0 Unadjusted third-party price source Not applicable Not applicable Market risk benefit asset (k) 65.3 Discounted cash flow analysis Surrender rates 1.28% - 11.05% (3.68%) Utilization rates 6.78% - 63.16% (20.09%) Total 418.7 Liabilities: Market risk benefit liability (k) 11.3 Discounted cash flow analysis Surrender rates 1.28% - 11.05% (3.68%) Utilization rates 6.78% - 63.16% (20.09%) Embedded derivatives related to fixed indexed annuity products (classified as policyholder account liabilities) (j) 1,297.0 Discount |
BUSINESS AND BASIS OF PRESENT_2
BUSINESS AND BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting | When we prepare financial statements in conformity with GAAP, we are required to make estimates and assumptions that significantly affect reported amounts of various assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting periods. For example, we use significant estimates and assumptions to calculate values for deferred acquisition costs, the present value of future profits, fair value measurements of certain investments (including derivatives), allowance for credit losses and other-than-temporary impairments of investments, assets and liabilities related to income taxes, liabilities for insurance products, liabilities related to litigation and guaranty fund assessment accruals. If our future experience differs from these estimates and assumptions, our financial statements could be materially affected. |
Consolidation | The accompanying financial statements are unaudited and include the accounts of the Company and its subsidiaries. Our consolidated financial statements exclude transactions between us and our consolidated affiliates, or among our consolidated affiliates. |
Deferred acquisition costs, present value of future profits and sales inducements | Deferred acquisition costs, present value of future profits and sales inducements Deferred acquisition costs represent policy acquisition costs that have been capitalized and are subject to amortization. Capitalized costs are incremental costs directly related to the successful acquisition of new or renewal insurance contracts. Such costs consist primarily of commissions, underwriting, sales and contract issuance and processing expenses. Contracts are grouped by contract type and issue year into cohorts consistent with the grouping used in estimating the associated liability. Deferred acquisition costs are amortized on a constant level basis for the grouped contracts over the expected term of the related contracts to approximate straight-line amortization. For life and health insurance products, the constant level basis used is policy counts. For all annuity products, the constant level basis used is the initial deposit in force. The constant level bases used for amortization are projected using mortality and lapse assumptions that are based on our experience, industry data, and other factors and are consistent with those used for the liability for future policy benefits. If those projected assumptions change in future periods, they will be reflected in the cohort level amortization basis at the time. Unexpected lapses, due to higher mortality and lapse experience than expected, are recognized in the current period as a reduction of the capitalized balances. Changes in future estimates are recognized prospectively over the remaining expected contract term. The carrying amount of deferred acquisition costs is not subject to recovery testing upon the adoption of ASU 2018-12. The present value of future profits is the value assigned to the right to receive future cash flows from policyholder insurance contracts existing at September 10, 2003 (the effective date of the bankruptcy reorganization of our Predecessor). The present value of future profits is amortized in the same manner as described above for deferred acquisition costs, although such balances are subject to periodic recovery testing. |
Market risk benefits | Market risk benefits Market risk benefits ("MRBs") are contracts or contract features that both provide protection to the contract holder from other-than-nominal capital market risk and expose the Company to other-than-nominal capital market risk. Many of our fixed indexed annuity products include a guaranteed living withdrawal benefit ("GLWB") that is considered a MRB. MRBs are measured at fair value using an option-based valuation model based on amount of exposure, market data, Company experience and other factors. Changes in fair value are recognized in earnings each period with the exception of the portion of the change in fair value due to a change in the instrument-specific credit risk, which is recognized in accumulated other comprehensive income (loss). MRBs in an asset position are presented separately from those in a liability position as there is no legal right of offset between contracts. |
Policyholder account balances | Policyholder account balances Policyholder account balances represent the contract value that has accrued to the benefit of the policyholder as of the balance sheet date. It includes the accumulated account deposits, plus interest credited, less policyholder withdrawals and, if applicable, charges assessed. This balance also includes liabilities for the funding agreement-backed notes ("FABN"). |
Liability for future policy benefits | Liability for future policy benefits The liability for future policy benefits is the present value of estimated future policy benefits to be paid to or on behalf of policyholders and certain related expenses (where the timing and amount of payment depends on policyholder mortality or morbidity), less the present value of estimated future net premiums to be collected from policyholders (where net premiums are gross premiums multiplied by the net-to-gross ratio discussed below). The liability for future policy benefits is accrued over time as premium revenue is recognized. The liability is estimated using current assumptions that include discount rates, mortality, morbidity, lapse/withdrawal rates and expenses. Such assumptions are based on our historical experience, industry data, and other factors that are inherently uncertain. This liability also includes the amount of total reserves above (below) policyholder account balances for our fixed indexed annuity products due to the valuation of the related embedded derivative. The liability for future policy benefits is established using a net premium ratio approach where net premiums (the portion of gross premiums required to fund expected insurance benefits and claims settlement expenses) under the contract are accrued each period as the liability for future policy benefits. The net premium ratio used to accrue the liability for future policy benefits in each period is determined by using the historical and present value of expected future benefits and claim adjustment expenses for the cohort divided by the historical and present value of expected future gross premiums for the cohort. Our long duration insurance contracts are grouped into annual calendar-year cohorts primarily based on the contractual issue date, marketing distribution channel, legal entity and product type. Single premium contracts are grouped into separate cohorts from other traditional products. Riders are generally combined with the base policy. Insurance contracts which were issued prior to September 10, 2003 (the effective date of the bankruptcy reorganization of Conseco, Inc. (the "Predecessor")) are grouped by marketing distribution channel, legal entity and product type in a single issue year cohort. The liability is adjusted for differences between actual and expected experience. We review our historical and future cash flow assumptions quarterly and update the net premium ratio used to calculate the liability each time the assumptions are changed. Each quarter, we update our estimates of cash flows expected over the entire life of a group of contracts using actual historical experience and current future cash flow assumptions. These updated cash flows are used to calculate the revised net premiums and net premium ratio, which are used to derive an updated liability for future policy benefits as of the beginning of the current reporting period, discounted at the original contract issuance discount rate. This amount is then compared to the carrying amount of the liability as of that same date, before the updating of cash flow assumptions, to determine the current period change in liability estimate. This current period change in the liability is the liability remeasurement gain or loss and is presented as a separate component of benefit expense in the consolidated statement of operations. In subsequent periods, the revised net premiums are used to measure the liability for future policy benefits, subject to future revisions. If a cohort is in a loss position where the liability for future policy benefits plus the present value of expected future gross premiums is determined to be insufficient to provide for expected future policy benefits and claim settlement costs, the net to gross ratio is capped at 100 percent. When this occurs, all changes in expected benefits resulting from both actual experience deviations and changes in future assumptions are recognized immediately. The locked-in discount rate is generally based on expected investment returns at contract inception for contracts issued prior to January 1, 2021 and the upper medium grade fixed income corporate instrument yield ("A" credit rated corporate bond yield) at contract inception for contracts issued after January 1, 2021. The contract inception date for contracts issued by the Predecessor is September 10, 2003. The discount rate in effect at contract inception is locked-in for the calculation of the net to gross ratio and accretion of interest cost on the liability is recorded through net income. However, for balance sheet remeasurement purposes, the discount rate is updated using the current rate at each reporting period with the impact resulting from such updates recorded in other comprehensive income. We develop discount rate curves for discounting cash flows to calculate the liability for future policy benefits based on the duration characteristics of the underlying liabilities. For liability cash flows that are projected beyond the duration of market-observable A-credit-rated fixed-income instruments, we use the last market-observable yield level and use linear interpolation to determine yield assumptions for durations that do not have market-observable yields. |
Liability for life insurance policy claims | Liability for life insurance policy claims The liability for life insurance policy claims include life policy and contract claims, including incurred but not reported claims. The liability for these claims is based on our estimated ultimate cost to settle all claims that have been incurred as of the reporting date. Such amounts are estimated based on an analysis of historical patterns of claims, which are continually reviewed and updated. Adjustments resulting from differences between our estimates and actual payments are recognized in the period the estimates are made or claims are paid. |
Deferred profit liability | Deferred profit liability For limited-payment products, gross premiums received in excess of net premiums are deferred at initial recognition as a deferred profit liability ("DPL"). Gross premiums are measured using assumptions consistent with those used in the measurement of the liability for future policy benefits, including discount rate, mortality, lapses and expenses. The DPL is amortized and recognized in insurance policy benefits in proportion to insurance in force for life insurance contracts and expected future benefit payments for annuity contracts. Interest is accreted on the balance of the DPL using the discount rate determined at contract issuance. We review and update the estimate of cash flows for the DPL at the same time as the estimate of cash flows for the liability for future policy benefits. When cash flows are updated, the updated estimates are used to recalculate the DPL at contract issuance. The recalculated DPL as of the beginning of the current reporting period is compared to the carrying amount of the DPL as of the beginning of the current reporting period and any difference is recognized as either a charge or credit to insurance policy benefits. On the balance sheet, the DPL is recorded as a component of the liability for future policy benefits and was $57.7 million at March 31, 2023. |
Reinsurance | Reinsurance We have determined that each of our reinsurance agreements provide indemnification against loss or liability relating to insurance risk in accordance with applicable accounting standards. Such reinsurance permits recovery of the reinsured losses from reinsurers, although it does not discharge our primary liability as the direct insurer of the risks reinsured. The reinsurance recoverable for traditional and limited-payment contracts is generally measured using a net premium ratio approach to accrue the projected net gain or loss on reinsurance in proportion to the gross premiums of the underlying reinsured cohorts. Such amount is adjusted on a quarterly basis for actual experience and at least once a year for any changes in cash flow assumptions. |
Recently Adopted Accounting Standards and Adopted Accounting Standards | RECENTLY ADOPTED ACCOUNTING STANDARDS We adopted ASU 2018-12 effective January 1, 2023. The new guidance: (i) improves the timeliness of recognizing changes in the liability for future benefits and modifies the rate used to discount future cash flows; (ii) simplifies and improves the accounting for certain market-based options or guarantees associated with deposit (or account balance) contracts; (iii) simplifies the amortization of deferred acquisition costs; and (iv) requires enhanced disclosures, including disaggregated rollforwards of the liability for future policy benefits, policyholder account liabilities, market risk benefits and deferred acquisition costs. Additionally, qualitative and quantitative information about expected cash flows, estimates and assumptions is required. The new measurement guidance for traditional and limited-payment contract liabilities and the new guidance for the amortization of deferred acquisition costs was adopted on a modified retrospective transition approach. For contracts in-force at the transition date, we continue to use the existing locked-in investment yield interest rate assumption to calculate the net premium ratio, rather than the upper-medium grade fixed-income corporate instrument yield. However, for balance sheet remeasurement purposes, the current upper-medium grade fixed-income corporate instrument yield is used at transition through accumulated other comprehensive income (loss) and subsequently through other comprehensive income. For market risk benefits, we use the required retrospective application and were able to use hindsight to measure fair value components to the extent assumptions in a prior period are unobservable or otherwise unavailable. |
Investments | We classify our fixed maturity securities into one of two categories: (i) "available for sale" (which we carry at estimated fair value with any unrealized gain or loss, net of tax and related adjustments, recorded as a component of shareholders' equity); or (ii) "trading" (which we carry at estimated fair value with changes in such value recognized as either net investment income (classified as investment income from policyholder and other special-purpose portfolios) or investment gains (losses)). Trading securities include: (i) investments purchased with the intent of selling in the near term to generate income; and (ii) certain fixed maturity securities containing embedded derivatives for which we have elected the fair value option. The change in fair value of the income generating investments is recognized in income from policyholder and other special-purpose portfolios (a component of net investment income). The change in fair value of securities with embedded derivatives is recognized in other investment gains (losses). We review our available for sale fixed maturity securities with unrealized losses to determine whether such impairments are the result of credit losses. We analyze various factors to make such determinations including, but not limited to: (i) actions taken by rating agencies; (ii) default by the issuer; (iii) the significance of the decline; (iv) an assessment of our intent to sell the security before recovering the security's amortized cost; (v) an economic analysis of the issuer's industry; and (vi) the financial strength, liquidity, and recoverability of the issuer. We perform a security by security review each quarter to evaluate whether a credit loss has occurred. In determining the credit loss component, we discount the estimated cash flows on a security by security basis. We consider the impact of macroeconomic conditions on inputs used to measure the amount of credit loss. For most structured securities, cash flow estimates are based on bond-specific facts and circumstances that may include collateral characteristics, expectations of delinquency and default rates, loss severity, prepayment speeds and structural support, including overcollateralization, excess spread, subordination and guarantees. For corporate bonds, cash flow estimates are derived by considering asset type, rating, time to maturity, and applying an expected loss rate. If a portion of the decline is due to credit-related factors, we separate the credit loss component of the impairment from the amount related to all other factors. The credit loss component is recorded as an allowance and reported in other investment gains (losses) (limited to the difference between estimated fair value and amortized cost). The impairment related to all other factors (non-credit factors) is reported in accumulated other comprehensive income (loss) along with unrealized gains (losses) related to fixed maturity investments, available for sale, net of tax and related adjustments. The allowance is adjusted for any additional credit losses and subsequent recoveries. When recognizing an allowance associated with a credit loss, the cost basis is not adjusted. When we determine a security is uncollectable, the remaining amortized cost will be written off. If we intend to sell an impaired fixed maturity security, available for sale, or identify an impaired fixed maturity security, available for sale, for which it is more likely than not we will be required to sell before anticipated recovery, the difference between the fair value and the amortized cost is included in other investment gains (losses) and the fair value becomes the new amortized cost. The new cost basis is not adjusted for any subsequent recoveries in fair value. The Company reports accrued investment income separately from fixed maturities, available for sale, and has elected not to measure an allowance for credit losses for accrued investment income. Accrued investment income is written off through net investment income at the time the issuer of the bond defaults or is expected to default on payments. |
Earnings Per Share | Basic earnings per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Restricted shares (including our performance units) are not included in basic earnings per share until vested. Diluted earnings per share reflect the potential dilution that could occur if outstanding stock options were exercised and restricted stock was vested. The dilution from options and restricted shares is calculated using the treasury stock method. Under this method, we assume the proceeds from the exercise of the options (or the unrecognized compensation expense with respect to restricted stock and performance units) will be used to purchase shares of our common stock at the average market price during the period, reducing the dilutive effect of the exercise of the options (or the vesting of the restricted stock and performance units). |
Business Segments | We view our operations as three insurance product lines (annuity, health and life) and the investment and fee income segments. Our segments are aligned based on their common characteristics, comparability of profit margins and the way management makes operating decisions and assesses the performance of the business. Our insurance product line segments (annuity, health and life) include marketing, underwriting and administration of the policies our insurance subsidiaries sell. The business written in each of the three product categories through all of our insurance subsidiaries is aggregated allowing management and investors to assess the performance of each product category. When analyzing profitability of these segments, we use insurance product margin as the measure of profitability, which is: (i) insurance policy income; and (ii) net investment income allocated to the insurance product lines; less (i) insurance policy benefits and interest credited to policyholders; and (ii) amortization, non-deferred commissions and advertising expense. Net investment income is allocated to the product lines using the book yield of investments backing the block of business, which is applied to the average net insurance liabilities for the block in each period. Net insurance liabilities for the purpose of allocating investment income to product lines are equal to: (i) policyholder account balances for annuity products; (ii) total reserves before the fair value adjustments reflected in accumulated other comprehensive income (loss), if applicable, for all other products; less (iii) amounts related to reinsurance business; (iv) deferred acquisition costs; (v) the present value of future profits; and (vi) the value of unexpired options credited to insurance liabilities. Income from insurance products is the sum of the insurance product margins of the annuity, health and life product lines, less expenses allocated to the insurance lines. It excludes the income from our fee income business, investment income not allocated to product lines, net expenses not allocated to product lines (primarily holding company expenses) and income taxes. Management believes insurance product margin and income from insurance products help provide a better understanding of the business and a more meaningful analysis of the results of our insurance product lines. We market our products through the Consumer and Worksite Divisions that reflect the customers served by the Company. The Consumer Division serves individual consumers, engaging with them on the phone, virtually, online, face-to-face with agents, or through a combination of sales channels. This structure unifies consumer capabilities into a single division and integrates the strength of our agent sales forces with one of the largest direct-to-consumer insurance businesses with proven experience in advertising, web/digital and call center support. The Worksite Division focuses on worksite and group sales for businesses, associations, and other membership groups, interacting with customers at their place of employment and virtually. With a separate Worksite Division, we are bringing a sharper focus to this high-growth business while further capitalizing on the strength of our wholly-owned subsidiary, Optavise, LLC ("Optavise"), a national provider of year-round technology-driven employee benefits management services. The Consumer and Worksite Divisions are primarily focused on marketing insurance products, several types of which are sold in both divisions and underwritten in the same manner. Sales of group underwritten policies are currently not significant, but are expected to increase within the Worksite Division. The investment segment involves the management of our capital resources, including investments and the management of corporate debt and liquidity. Our measure of profitability of this segment is the total net investment income not allocated to the insurance products. Investment income not allocated to product lines represents net investment income less: (i) equity returns credited to policyholder account balances; (ii) the investment income allocated to our product lines; (iii) interest expense on notes payable and investment borrowings; (iv) expenses related to the FABN program; and (v) certain expenses related to benefit plans that are offset by special-purpose investment income; plus (vi) the impact of annual option forfeitures related to fixed indexed annuity surrenders. Investment income not allocated to product lines includes investment income on investments in excess of amounts allocated to product lines, investments held by our holding companies, the spread we earn from our Federal Home Loan Bank ("FHLB") investment borrowing and FABN programs and variable components of investment income (including call and prepayment income, adjustments to returns on structured securities due to cash flow changes, income (loss) from company-owned life insurance ("COLI") and alternative investments income not allocated to product lines), net of interest expense on corporate debt. The spread earned from our FHLB investment borrowing and FABN programs includes the investment income on the matched assets less: (i) interest on investment borrowings related to the FHLB investment borrowing program; (ii) interest credited on funding agreements; and (iii) amortization of deferred acquisition costs related to the FABN program. Our fee income segment includes the earnings generated from sales of third-party insurance products, services provided by Optavise and the operations of our broker/dealer and registered investment advisor. Expenses not allocated to product lines include the expenses of our corporate operations, excluding interest expense on debt. We measure segment performance by excluding total investment gains (losses), changes in fair value of embedded derivative liabilities and market risk benefits, fair value changes related to the agent deferred compensation plan, income taxes and other non-operating items consisting primarily of earnings attributable to VIEs ("pre-tax operating earnings") because we believe that this performance measure is a better indicator of the ongoing business and trends in our business. Our primary investment focus is on investment income to support our liabilities for insurance products as opposed to the generation of investment gains (losses), and a long-term focus is necessary to maintain profitability over the life of the business. Investment gains (losses), changes in fair value of embedded derivative liabilities and market risk benefits, fair value changes related to the agent deferred compensation plan and other non-operating items consisting primarily of earnings attributable to VIEs depend on market conditions or represent unusual items that do not necessarily relate to the underlying business of our segments. Investment gains (losses) and changes in fair value of embedded derivative liabilities and market risk benefits may affect future earnings levels since our underlying business is long-term in nature and changes in our investment portfolio may impact our ability to earn the assumed interest rates needed to maintain the profitability of our business. |
Fair Value Measurements | Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and, therefore, represents an exit price, not an entry price. We carry certain assets and liabilities at fair value on a recurring basis, including fixed maturities, equity securities, trading securities, investments held by VIEs, derivatives, separate account assets and embedded derivatives. We carry our COLI, which is invested in a series of mutual funds, at its cash surrender value which approximates fair value. In addition, we disclose fair value for certain financial instruments, including mortgage loans, policy loans, cash and cash equivalents, insurance liabilities for interest-sensitive products and funding agreements, investment borrowings, notes payable and borrowings related to VIEs. The degree of judgment utilized in measuring the fair value of financial instruments is largely dependent on the level to which pricing is based on observable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our view of market assumptions in the absence of observable market information. Financial instruments with readily available active quoted prices would be considered to have fair values based on the highest level of observable inputs, and little judgment would be utilized in measuring fair value. Financial instruments that rarely trade would often have fair value based on a lower level of observable inputs, and more judgment would be utilized in measuring fair value. Valuation Hierarchy There is a three-level hierarchy for valuing assets or liabilities at fair value based on whether inputs are observable or unobservable. • Level 1 – includes assets and liabilities valued using inputs that are unadjusted quoted prices in active markets for identical assets or liabilities. Our Level 1 assets primarily include cash and cash equivalents and exchange-traded securities. • Level 2 – includes assets and liabilities valued using inputs that are quoted prices for similar assets in an active market, quoted prices for identical or similar assets in a market that is not active, observable inputs, or observable inputs that can be corroborated by market data. Level 2 assets and liabilities include those financial instruments that are valued by independent pricing services using models or other valuation methodologies. These models consider various inputs such as credit rating, maturity, corporate credit spreads, reported trades and other inputs that are observable or derived from observable information in the marketplace or are supported by transactions executed in the marketplace. Financial assets in this category primarily include: certain publicly registered and privately placed corporate fixed maturity securities; certain government or agency securities; certain mortgage and asset-backed securities; certain equity securities; most investments held by our consolidated VIEs; and derivatives such as call options. Financial liabilities in this category include investment borrowings, notes payable and borrowings related to VIEs. • Level 3 – includes assets and liabilities valued using unobservable inputs that are used in model-based valuations that contain management assumptions. Level 3 assets and liabilities include those financial instruments whose fair value is estimated based on broker/dealer quotes, pricing services or internally developed models or methodologies utilizing significant inputs not based on, or corroborated by, readily available market information. Financial assets in this category include certain corporate securities, certain structured securities, mortgage loans, and other less liquid securities. Financial liabilities in this category include our insurance liabilities for interest-sensitive products, which includes embedded derivatives (including embedded derivatives related to our fixed indexed annuity products and to a modified coinsurance arrangement), and funding agreements since their values include significant unobservable inputs including actuarial assumptions. At each reporting date, we classify assets and liabilities into the three input levels based on the lowest level of input that is significant to the measurement of fair value for each asset and liability reported at fair value. This classification is impacted by a number of factors, including the type of financial instrument, whether the financial instrument is new to the market and not yet established, the characteristics specific to the transaction and overall market conditions. Our assessment of the significance of a particular input to the fair value measurement and the ultimate classification of each asset and liability requires judgment and is subject to change from period to period based on the observability of the valuation inputs. The vast majority of our assets carried at fair value use Level 2 inputs for the determination of fair value. These fair values are obtained primarily from independent pricing services, which use Level 2 inputs for the determination of fair value. Our Level 2 assets are valued as follows: • Fixed maturities available for sale, equity securities and trading securities Corporate securities are generally priced using market and income approaches using independent pricing services. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, issuer rating, benchmark yields, maturity and credit spreads. U.S. Treasuries and obligations of U.S. Government corporations and agencies are generally priced using the market approach. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets and maturity. States and political subdivisions are generally priced using the market approach using independent pricing services. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, new issuances and credit spreads. Foreign governments are generally priced using the market approach using independent pricing services. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, new issuances, benchmark yields, credit spreads and issuer rating. Asset-backed securities, agency and non-agency residential mortgage-backed securities, collateralized loan obligations and commercial mortgage-backed securities are generally priced using market and income approaches using independent pricing services. Inputs generally consist of quoted prices in inactive markets, spreads on actively traded securities, expected prepayments, expected default rates, expected recovery rates and issue specific information including, but not limited to, collateral type, seniority and vintage. Equity securities are generally priced using the market approach. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, issuer rating, benchmark yields, maturity and credit spreads. • Investments held by VIEs Corporate securities are generally priced using market and income approaches using pricing vendors. Inputs generally consist of issuer rating, benchmark yields, maturity, and credit spreads. • Other invested assets - derivatives The fair value measurements for derivative instruments, including embedded derivatives requiring bifurcation, are determined based on the consideration of several inputs including closing exchange or over-the-counter market price quotes, time value and volatility factors underlying options, market interest rates and non-performance risk. Third-party pricing services normally derive security prices through recently reported trades for identical or similar securities making adjustments through the reporting date based upon available market observable information. If there are no recently reported trades, the third-party pricing services may use matrix or model processes to develop a security price where future cash flow expectations are discounted at an estimated risk-adjusted market rate. The number of prices obtained for a given security is dependent on the Company's analysis of such prices as further described below. As the Company is responsible for the determination of fair value, we have control processes designed to ensure that the fair values received from third-party pricing sources are reasonable and the valuation techniques and assumptions used appear reasonable and consistent with prevailing market conditions. Additionally, when inputs are provided by third-party pricing sources, we have controls in place to review those inputs for reasonableness. As part of these controls, we perform monthly quantitative and qualitative analysis on the prices received from third parties to determine whether the prices are reasonable estimates of fair value. The Company's analysis includes: (i) a review of the methodology used by third-party pricing services; (ii) where available, a comparison of multiple pricing services' valuations for the same security; (iii) a review of month to month price fluctuations; (iv) a review to ensure valuations are not unreasonably dated; and (v) back testing to compare actual purchase and sale transactions with valuations received from third parties. As a result of such procedures, the Company may conclude a particular price received from a third party is not reflective of current market conditions. In those instances, we may request additional pricing quotes or apply internally developed valuations. However, the number of such instances is insignificant and the aggregate change in value of such investments is not materially different from the original prices received. The categorization of the fair value measurements of our investments priced by independent pricing services was based upon the Company's judgment of the inputs or methodologies used by the independent pricing services to value different asset classes. Such inputs typically include: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers and other relevant data. The Company categorizes such fair value measurements based upon asset classes and the underlying observable or unobservable inputs used to value such investments. For securities that are not priced by pricing services and may not be reliably priced using pricing models, we obtain broker quotes. These broker quotes are non-binding and represent an exit price, but assumptions used to establish the fair value may not be observable and therefore represent Level 3 inputs. Approximately 86 percent of our Level 3 fixed maturity securities and trading securities were valued using unadjusted broker quotes or broker-provided valuation inputs. The remaining Level 3 fixed maturity investments do not have readily determinable market prices and/or observable inputs. For these securities, we use internally developed valuations. Key assumptions used to determine fair value for these securities may include risk premiums, projected performance of underlying collateral and other factors involving significant assumptions which may not be reflective of an active market. For certain investments, we use a matrix or model process to develop a security price where future cash flow expectations are discounted at an estimated market rate. The pricing matrix incorporates term interest rates as well as a spread level based on the issuer's credit rating, other factors relating to the issuer, and the security's maturity. In some instances issuer-specific spread adjustments, which can be positive or negative, are made based upon internal analysis of security specifics such as liquidity, deal size, and time to maturity. |
RECENTLY ADOPTED ACCOUNTING S_2
RECENTLY ADOPTED ACCOUNTING STANDARDS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Changes and Error Corrections [Abstract] | |
Impact of Adoption | The following summarizes the impact of adoption on the Transition Date (dollars in millions): January 1, 2021 Amounts prior to adoption of Effect of ASU 2018-12 adoption As recast Present value of future profits $ 249.4 $ 10.2 $ 259.6 Deferred acquisition costs 1,027.8 458.0 1,485.8 Reinsurance receivables 4,584.3 144.1 4,728.4 Market risk benefit asset — 2.5 2.5 Income tax assets, net 199.4 607.0 806.4 Total assets 35,339.9 1,221.8 36,561.7 Policyholder account balances 12,540.6 (172.9) 12,367.7 Future policy benefits 11,744.2 3,960.7 15,704.9 Market risk benefit liability — 114.8 114.8 Liability for policy and contract claims 561.8 (470.1) 91.7 Total liabilities 29,855.7 3,432.5 33,288.2 Retained earnings 752.3 (130.9) (a) 621.4 Accumulated other comprehensive income 2,186.1 (2,079.8) 106.3 Total shareholders' equity 5,484.2 (2,210.7) 3,273.5 _____________________ (a) The impact to retained earnings was primarily related to certain long-term care product cohorts where the present value of expected benefits exceeded the reserve at the Transition Date plus the present value of future gross premiums. As a result, the net premium ratio was capped at 100 percent with an immediate increase in the reserve for such cohorts. The following summarizes the impact of adoption on previously reported balances as of December 31, 2022 and as of and for the three months ended March 31, 2022 (dollars in millions): December 31, 2022 As previously Effect of reported adoption As recast Present value of future profits $ 212.2 $ (8.5) $ 203.7 Deferred acquisition costs 1,913.4 (142.5) 1,770.9 Reinsurance receivables 4,241.7 (18.3) 4,223.4 Market risk benefit asset — 65.3 65.3 Income tax assets, net 1,165.5 (102.1) 1,063.4 Total assets 33,339.2 (206.1) 33,133.1 Policyholder account balances 14,858.3 375.9 15,234.2 Future policy benefits 11,809.1 (568.9) 11,240.2 Market risk benefit liability — 11.3 11.3 Liability for policy and contract claims 456.5 (392.4) 64.1 Total liabilities 31,938.4 (574.1) 31,364.3 Retained earnings 1,459.0 232.2 1,691.2 Accumulated other comprehensive income (loss) (2,093.1) 135.8 (1,957.3) Total shareholders' equity 1,400.8 368.0 1,768.8 Three months ended March 31, 2022 As previously Effect of reported adoption As recast Insurance policy benefits $ 346.7 $ (12.8) $ 333.9 Liability for future policy benefits remeasurement loss — 7.0 7.0 Change in fair value of market risk benefits — (32.7) (32.7) Amortization 103.9 (51.6) 52.3 Other operating costs and expenses 219.2 (.9) 218.3 Total benefits and expenses 693.6 (91.0) 602.6 Income before income taxes 149.3 91.0 240.3 Income tax expense 37.0 19.9 56.9 Net income 112.3 71.1 183.4 As of March 31, 2022 As previously Effect of reported adoption As recast Retained earnings $ 1,223.5 $ 69.5 1,293.0 Accumulated other comprehensive income (loss) 380.5 (942.0) (561.5) Total shareholders' equity 3,690.9 (872.5) 2,818.4 The following tables detail the January 1, 2021 transition adjustments by providing a rollforward of the ending reported balances as of December 31, 2020 to the opening balances as of January 1, 2021 for retained earnings, accumulated other comprehensive income and the impacted insurance related balances (dollars in millions): January 1, 2021 Asset accounts Present value of future profits Deferred acquisition costs Reinsurance receivables Market risk benefit asset Income tax assets, net Amounts prior to adoption of ASU 2018-12 $ 249.4 $ 1,027.8 $ 4,584.3 $ — $ 199.4 Unwinding amounts related to unrealized gains (losses) 10.2 458.0 — — — Changes in measurement of assets — — (81.6) — — Change in discount rates — — 225.7 — — Changes in market benefit reserve basis — — — 2.5 — Tax impacts of changes recognized in accumulated other comprehensive income — — — — 570.3 Tax impacts of changes recognized in retained earnings — — — — 36.7 Amounts, as recast $ 259.6 $ 1,485.8 $ 4,728.4 $ 2.5 $ 806.4 January 1, 2021 Liability accounts Policyholder account balances Future policy benefits Market risk benefit liability Liability for policy and contract claims Amounts prior to adoption of ASU 2018-12 $ 12,540.6 $ 11,744.2 $ — $ 561.8 Unwinding amounts related to unrealized gains (losses) — (197.5) — — Changes in remeasurement of future policy benefits — 31.1 — — Changes in classification of liabilities (1) (172.9) 643.0 — (470.1) Reclass to market risk benefit liability — (66.6) 66.6 — Changes in market risk benefit reserve basis — — 48.2 — Change in discount rates — 3,550.7 — — Amounts, as recast $ 12,367.7 $ 15,704.9 $ 114.8 $ 91.7 _____________________ (1) Amount includes certain reclassifications to conform with the revised presentation of ASU 2018-12, such as reclassifying claims and benefits payable on long-duration health contracts to the liability for future policy benefits. January 1, 2021 Shareholders' equity accounts Accumulated other comprehensive income Retained earnings Amounts prior to adoption of ASU 2018-12 $ 2,186.1 $ 752.3 Unwinding amounts related to unrealized gains (losses) 665.7 — Changes in measurement of assets and liabilities — (112.7) Change in market risk benefit reserve basis 9.2 (54.9) Tax impacts of changes recognized in retained earnings — 36.7 Change in discount rates (3,325.0) — Tax impacts of changes recognized in accumulated other comprehensive income 570.3 — Amounts, as recast $ 106.3 $ 621.4 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Accumulated other comprehensive income (loss), included in shareholders' equity as of March 31, 2023 and December 31, 2022, is comprised of the following (dollars in millions): March 31, December 31, Net unrealized losses on investments having no allowance for credit losses $ (937.1) $ (1,247.0) Unrealized losses on investments with an allowance for credit losses (1,453.6) (1,780.7) Change in discount rates for liability for future policy benefits 237.4 500.7 Change in instrument-specific credit risk for market risk benefits 13.1 12.2 Deferred income tax assets 475.8 557.5 Accumulated other comprehensive loss $ (1,664.4) $ (1,957.3) |
Schedule of Fixed Maturities for Available for Sale Securities | At March 31, 2023, the amortized cost, gross unrealized gains, gross unrealized losses, allowance for credit losses and estimated fair value of fixed maturities, available for sale, were as follows (dollars in millions): Amortized cost Gross unrealized gains Gross unrealized losses Allowance for credit losses Estimated fair value Corporate securities $ 13,497.0 $ 66.3 $ (1,529.7) $ (57.2) $ 11,976.4 United States Treasury securities and obligations of United States government corporations and agencies 174.7 .1 (4.7) — 170.1 States and political subdivisions 2,789.4 34.1 (360.1) (.8) 2,462.6 Foreign governments 88.8 .2 (9.9) (.5) 78.6 Asset-backed securities 1,458.6 2.4 (120.2) (.6) 1,340.2 Agency residential mortgage-backed securities 213.3 2.8 (.2) — 215.9 Non-agency residential mortgage-backed securities 1,778.2 37.2 (174.9) — 1,640.5 Collateralized loan obligations 954.3 .5 (35.9) — 918.9 Commercial mortgage-backed securities 2,563.6 .1 (259.8) — 2,303.9 Total fixed maturities, available for sale $ 23,517.9 $ 143.7 $ (2,495.4) $ (59.1) $ 21,107.1 At December 31, 2022, the amortized cost, gross unrealized gains, gross unrealized losses, allowance for credit losses and estimated fair value of fixed maturities, available for sale, were as follows (dollars in millions): Amortized cost Gross unrealized gains Gross unrealized losses Allowance for credit losses Estimated fair value Corporate securities $ 13,649.1 $ 29.9 $ (1,911.9) $ (54.4) $ 11,712.7 United States Treasury securities and obligations of United States government corporations and agencies 171.7 — (13.0) — 158.7 States and political subdivisions 2,846.9 19.3 (476.8) (.9) 2,388.5 Foreign governments 86.3 .1 (11.3) (.4) 74.7 Asset-backed securities 1,435.7 1.0 (149.4) (.3) 1,287.0 Agency residential mortgage-backed securities 174.3 1.4 (.7) — 175.0 Non-agency residential mortgage-backed securities 1,700.4 40.0 (191.9) — 1,548.5 Collateralized loan obligations 825.2 .3 (39.6) — 785.9 Commercial mortgage-backed securities 2,494.6 .1 (272.3) — 2,222.4 Total fixed maturities, available for sale $ 23,384.2 $ 92.1 $ (3,066.9) $ (56.0) $ 20,353.4 |
Schedule of Investments Classified by Contractual Maturity Date | The following table sets forth the amortized cost and estimated fair value of fixed maturities, available for sale, at March 31, 2023, by contractual maturity. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties. Structured securities (such as asset-backed securities, agency residential mortgage-backed securities, non-agency residential mortgage-backed securities, collateralized loan obligations and commercial mortgage-backed securities, collectively referred to as "structured securities") frequently include provisions for periodic principal payments and permit periodic unscheduled payments. Amortized Estimated (Dollars in millions) Due in one year or less $ 140.1 $ 138.7 Due after one year through five years 2,209.3 2,080.0 Due after five years through ten years 1,871.8 1,742.8 Due after ten years 12,328.7 10,726.2 Subtotal 16,549.9 14,687.7 Structured securities 6,968.0 6,419.4 Total fixed maturities, available for sale $ 23,517.9 $ 21,107.1 The following table sets forth the amortized cost and estimated fair value of fixed maturities, available for sale, at December 31, 2022, by contractual maturity. Amortized Estimated (Dollars in millions) Due in one year or less $ 112.0 $ 110.8 Due after one year through five years 1,913.7 1,790.2 Due after five years through ten years 2,098.9 1,910.4 Due after ten years 12,629.4 10,523.2 Subtotal 16,754.0 14,334.6 Structured securities 6,630.2 6,018.8 Total fixed maturities, available for sale $ 23,384.2 $ 20,353.4 |
Schedule of Unrealized Loss on Investments | The following table summarizes the gross unrealized losses and fair values of our investments with unrealized losses for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that such securities have been in a continuous unrealized loss position, at March 31, 2023 (dollars in millions): Less than 12 months 12 months or greater Total Description of securities Fair Unrealized Fair Unrealized Fair Unrealized Corporate securities $ 973.1 $ (35.5) $ 1,979.4 $ (322.6) $ 2,952.5 $ (358.1) United States Treasury securities and obligations of United States government corporations and agencies 106.8 (1.2) 33.7 (3.5) 140.5 (4.7) States and political subdivisions 207.5 (11.2) 397.4 (97.1) 604.9 (108.3) Foreign governments 15.2 (.3) 13.3 (1.2) 28.5 (1.5) Asset-backed securities 388.9 (12.9) 775.0 (103.2) 1,163.9 (116.1) Agency residential mortgage-backed securities 33.4 (.2) .6 — 34.0 (.2) Non-agency residential mortgage-backed securities 560.9 (27.1) 718.0 (147.8) 1,278.9 (174.9) Collateralized loan obligations 282.6 (6.5) 551.7 (29.4) 834.3 (35.9) Commercial mortgage-backed securities 520.3 (13.7) 1,738.3 (246.1) 2,258.6 (259.8) Total fixed maturities, available for sale $ 3,088.7 $ (108.6) $ 6,207.4 $ (950.9) $ 9,296.1 $ (1,059.5) The following table summarizes the gross unrealized losses and fair values of our investments with unrealized losses for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that such securities have been in a continuous unrealized loss position, at December 31, 2022 (dollars in millions): Less than 12 months 12 months or greater Total Description of securities Fair Unrealized Fair Unrealized Fair Unrealized Corporate securities $ 2,830.8 $ (329.4) $ 370.4 $ (129.3) $ 3,201.2 $ (458.7) United States Treasury securities and obligations of United States government corporations and agencies 134.4 (9.6) 21.9 (3.4) 156.3 (13.0) States and political subdivisions 667.0 (124.8) 132.1 (58.5) 799.1 (183.3) Foreign governments 35.0 (3.5) 2.1 (.3) 37.1 (3.8) Asset-backed securities 914.0 (90.1) 258.1 (53.4) 1,172.1 (143.5) Agency residential mortgage-backed securities 59.7 (.7) — — 59.7 (.7) Non-agency residential mortgage-backed securities 861.6 (89.7) 335.4 (102.2) 1,197.0 (191.9) Collateralized loan obligations 553.0 (27.4) 184.2 (12.2) 737.2 (39.6) Commercial mortgage-backed securities 1,581.4 (160.0) 593.3 (112.3) 2,174.7 (272.3) Total fixed maturities, available for sale $ 7,636.9 $ (835.2) $ 1,897.5 $ (471.6) $ 9,534.4 $ (1,306.8) |
Schedule of Changes in the Allowance for Current Expected Credit Losses | The following table summarizes changes in the allowance for credit losses related to fixed maturities, available for sale, for the three months ended March 31, 2023 (dollars in millions): Corporate securities States and political subdivisions Foreign governments Asset-backed securities Total Allowance at December 31, 2022 $ 54.4 $ .9 $ .4 $ .3 $ 56.0 Additions for securities for which credit losses were not previously recorded 3.0 — — — 3.0 Additions for purchased securities with deteriorated credit — — — — — Additions (reductions) for securities where an allowance was previously recorded .5 (.1) .1 .3 .8 Reduction for securities sold during the period (.7) — — — (.7) Reduction for securities for which the Company made the decision to sell where an allowance was previously recorded — — — — — Write-offs — — — — — Recoveries of previously written-off amount — — — — — Allowance at March 31, 2023 $ 57.2 $ .8 $ .5 $ .6 $ 59.1 The following table summarizes changes in the allowance for credit losses related to fixed maturities, available for sale, for the three months ended March 31, 2022 (dollars in millions): Corporate securities States and political subdivisions Foreign governments Asset-backed securities Total Allowance at December 31, 2021 $ 7.4 $ — $ .2 $ — $ 7.6 Additions for securities for which credit losses were not previously recorded 14.0 .3 .1 — 14.4 Additions for purchased securities with deteriorated credit — — — — — Additions (reductions) for securities where an allowance was previously recorded 14.6 .5 (.2) .1 15.0 Reduction for securities sold during the period (.4) — — — (.4) Reduction for securities for which the Company made the decision to sell where an allowance was previously recorded — — — — — Write-offs — — — — — Recoveries of previously written-off amount — — — — — Allowance at March 31, 2022 $ 35.6 $ .8 $ .1 $ .1 $ 36.6 The following table summarizes changes in the allowance for credit losses related to corporate securities held by VIEs for the three months ended March 31, 2023 and 2022 (dollars in millions): Three months ended March 31, 2023 2022 Allowance at the beginning of the period $ 5.5 $ 3.7 Additions for securities for which credit losses were not previously recorded .3 1.5 Additions for purchased securities with deteriorated credit — — Additions (reductions) for securities where an allowance was previously recorded (.7) 1.3 Reduction for securities sold during the period (1.6) (.6) Reduction for securities for which the Company made the decision to sell where an allowance was previously recorded — — Write-offs — — Recoveries of previously written-off amount — — Allowance at the end of the period $ 3.5 $ 5.9 |
Schedule of Carrying Value and Estimated Fair Value of Outstanding Commercial Mortgage Loans and Underlying Collateral | The following table provides the amortized cost by year of origination and estimated fair value of our outstanding commercial mortgage loans and the underlying collateral as of March 31, 2023 (dollars in millions): Estimated fair Loan-to-value ratio (a) 2023 2022 2021 2020 2019 Prior Total amortized cost Mortgage loans Collateral Less than 60% $ 73.6 $ 178.7 $ 114.4 $ 37.4 $ 75.1 $ 494.2 $ 973.4 $ 884.3 $ 3,553.3 60% to less than 70% — 87.3 26.2 5.7 — 56.8 176.0 159.7 269.3 70% to less than 80% — 47.8 10.1 — — 43.2 101.1 86.8 138.4 80% to less than 90% — — — — — — — — — 90% or greater — — — — — 24.6 24.6 19.5 26.1 Total $ 73.6 $ 313.8 $ 150.7 $ 43.1 $ 75.1 $ 618.8 $ 1,275.1 $ 1,150.3 $ 3,987.1 ________________ |
Schedule of Changes in the Allowance for Current Expected Credit Losses Related to Mortgage Loans | The following table summarizes changes in the allowance for credit losses related to mortgage loans for the three months ended March 31, 2023 and 2022 (dollars in millions): Three months ended March 31, 2023 2022 Allowance at the beginning of the period $ 8.0 $ 5.6 Current period provision for expected credit losses .4 (.5) Initial allowance recognized for purchased financial assets with credit deterioration — — Write-offs charged against the allowance — — Recoveries of amounts previously written off — — Allowance at the end of the period $ 8.4 $ 5.1 |
Schedule of Realized Gain (Loss) on Investments | The following table sets forth the total investment gains (losses) for the periods indicated (dollars in millions): Three months ended March 31, 2023 2022 Realized investment gains (losses): Gross realized gains on sales of fixed maturities, available for sale $ 7.3 $ 54.8 Gross realized losses on sales of fixed maturities, available for sale (14.4) (30.6) Equity securities, net (.2) (4.7) Other, net (7.3) (.7) Total realized investment gains (losses) (14.6) 18.8 Change in allowance for credit losses (a) (1.5) (30.7) Change in fair value of equity securities (b) .4 (1.2) Other changes in fair value (c) 1.1 (19.6) Other investment losses — (51.5) Total investment losses $ (14.6) $ (32.7) _________________ (a) Changes in the allowance for credit losses includes $2.0 million and $(2.2) million in the three months ended March 31, 2023 and 2022, respectively, related to investments held by variable interest entities ("VIEs"). (b) Changes in the estimated fair value of equity securities (that are still held as of the end of the respective periods) were $0.3 million and $(5.2) million for the three months ended March 31, 2023 and 2022, respectively. |
LIABILITIES FOR INSURANCE PRO_2
LIABILITIES FOR INSURANCE PRODUCTS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Insurance [Abstract] | |
Schedule of Balances and Changes in the Liability for Future Policy Benefits | The following tables summarize balances and changes in the liability for future policy benefits for traditional and limited-payment contracts for the three months ended March 31, 2023 (dollars in millions): Three months ended March 31, 2023 Supplemental health Medicare supplement Long-term care Traditional life Other annuities Present value of expected net premiums ("PVENP"), beginning of period $ 2,781.3 $ 2,800.6 $ 1,034.1 $ 2,175.0 $ — Effect of changes in discount rate assumptions, beginning of period 188.4 196.4 23.2 137.1 — Beginning PVENP at original discount rate 2,969.7 2,997.0 1,057.3 2,312.1 — Effect of changes in cash flow assumptions — — — — — Effect of actual variances from expected experience (17.2) 27.0 (3.4) (14.1) — Adjusted beginning of period PVENP 2,952.5 3,024.0 1,053.9 2,298.0 — Issuances 63.7 101.6 15.7 108.3 1.1 Interest accrual 32.0 30.5 12.3 23.0 — Net premiums collected (90.3) (113.4) (40.6) (101.4) (1.1) Ending PVENP at original discount rate 2,957.9 3,042.7 1,041.3 2,327.9 — Effect of changes in discount rate assumptions, end of period (120.4) (139.2) (4.6) (92.5) — PVENP, end of period $ 2,837.5 $ 2,903.5 $ 1,036.7 $ 2,235.4 $ — Present value of expected future policy benefits ("PVEFPB"), beginning of period $ 5,886.8 $ 3,033.1 $ 4,158.1 $ 4,417.9 $ 310.9 Effect of changes in discount rate assumptions, beginning of period 483.3 212.0 28.5 336.6 15.4 Beginning PVEFPB at original discount rate 6,370.1 3,245.1 4,186.6 4,754.5 326.3 Effect of changes in cash flow assumptions — — — — — Effect of actual variances from expected experience (20.5) 32.2 (6.3) (15.2) .7 Adjusted beginning of period PVEFPB 6,349.6 3,277.3 4,180.3 4,739.3 327.0 Issuances 63.7 101.6 15.7 108.3 1.1 Interest accrual 73.8 33.2 55.5 51.0 3.7 Benefit payments (99.5) (125.6) (71.3) (115.0) (8.6) Ending PVEFPB at original discount rate 6,387.6 3,286.5 4,180.2 4,783.6 323.2 Effect of changes in discount rate assumptions, end of period (306.8) (150.0) 86.4 (223.0) (6.9) PVEFPB, end of period $ 6,080.8 $ 3,136.5 $ 4,266.6 $ 4,560.6 $ 316.3 Net liability for future policy benefits $ 3,243.3 $ 233.0 $ 3,229.9 $ 2,325.2 $ 316.3 Flooring impact — .4 — — — Adjusted net liability for future policy benefits 3,243.3 233.4 3,229.9 2,325.2 316.3 Related reinsurance recoverable (2.4) — (357.5) (201.1) — Net liability for future policy benefits, net of reinsurance recoverable $ 3,240.9 $ 233.4 $ 2,872.4 $ 2,124.1 $ 316.3 The following tables summarize balances and changes in the liability for future policy benefits for traditional and limited-payment contracts for the three months ended March 31, 2022 (dollars in millions): Three months ended March 31, 2022 Supplemental health Medicare supplement Long-term care Traditional life Other annuities PVENP, beginning of period $ 3,496.8 $ 3,454.0 $ 1,313.4 $ 2,483.7 $ — Effect of changes in discount rate assumptions, beginning of period (525.6) (341.8) (183.2) (239.4) — Beginning PVENP at original discount rate 2,971.2 3,112.2 1,130.2 2,244.3 — Effect of changes in cash flow assumptions — — — — — Effect of actual variances from expected experience 6.3 21.2 (8.9) (11.8) — Adjusted beginning of period PVENP 2,977.5 3,133.4 1,121.3 2,232.5 — Issuances 80.6 68.0 25.7 149.3 1.6 Interest accrual 31.3 30.4 13.1 20.9 — Net premiums collected (89.5) (119.0) (42.7) (99.9) (1.6) Ending PVENP at original discount rate 2,999.9 3,112.8 1,117.4 2,302.8 — Effect of changes in discount rate assumptions, end of period 213.4 112.1 94.2 72.5 — PVENP, end of period $ 3,213.3 $ 3,224.9 $ 1,211.6 $ 2,375.3 $ — PVEFPB, beginning of period $ 7,688.0 $ 3,750.5 $ 5,501.6 $ 5,395.7 $ 431.9 Effect of changes in discount rate assumptions, beginning of period (1,414.8) (373.8) (1,291.2) (767.3) (88.4) Beginning PVEFPB at original discount rate 6,273.2 3,376.7 4,210.4 4,628.4 343.5 Effect of changes in cash flow assumptions — — — — — Effect of actual variances from expected experience 5.6 21.5 (9.2) (8.5) (1.3) Adjusted beginning of period PVEFPB 6,278.8 3,398.2 4,201.2 4,619.9 342.2 Issuances 80.8 67.3 25.7 149.4 1.9 Interest accrual 72.5 33.2 56.1 48.8 3.9 Benefit payments (99.5) (123.3) (64.2) (128.8) (9.3) Ending PVEFPB at original discount rate 6,332.6 3,375.4 4,218.8 4,689.3 338.7 Effect of changes in discount rate assumptions, end of period 622.3 123.9 747.4 296.2 44.6 PVEFPB, end of period $ 6,954.9 $ 3,499.3 $ 4,966.2 $ 4,985.5 $ 383.3 Net liability for future policy benefits $ 3,741.6 $ 274.4 $ 3,754.6 $ 2,610.2 $ 383.3 Flooring impact 1.5 .2 .6 .4 — Adjusted net liability for future policy benefits 3,743.1 274.6 3,755.2 2,610.6 383.3 Related reinsurance recoverable (3.2) — (407.0) (242.1) — Net liability for future policy benefits, net of reinsurance recoverable $ 3,739.9 $ 274.6 $ 3,348.2 $ 2,368.5 $ 383.3 The following table reconciles the net liability for future policy benefits to the amount presented in the consolidated balance sheet (dollars in millions): March 31, 2023 March 31, 2022 Balances included in the future policy benefits rollforwards: Supplemental health $ 3,243.3 $ 3,743.1 Medicare supplement 233.4 274.6 Long-term care 3,229.9 3,755.2 Traditional life 2,325.2 2,610.6 Other annuities 316.3 383.3 Reserves excluded from rollforward (1) 2,593.3 2,626.5 Deferred profit liability 57.7 51.3 Amount of reserves above (below) policyholder account balances (2) (410.5) (273.1) Future loss reserves (3) 34.7 34.6 Future policy benefits $ 11,623.3 $ 13,206.1 _______________ (1) Primarily comprised of blocks of business that are 100% ceded. (2) Such amount represents the difference between: (i) the total insurance liabilities for our fixed indexed annuities (including the host contract and the related embedded derivative); and (ii) the policyholder account balances for these products. The accounting requirement to bifurcate the embedded derivative and value it at the current estimated fair value results in this amount. (3) In certain instances, the total insurance liabilities for a particular line of business may not be deficient in the aggregate to trigger loss recognition, but the pattern of earnings may be such that profits are expected to be recognized in earlier years followed by losses in later years. In these situations, accounting standards require that an additional liability (the "future loss reserve") be recognized by an amount necessary to sufficiently offset the losses that would be recognized in later years. The following table summarizes the amount of revenue and interest related to traditional and limited-payment contracts recognized in the consolidated statement of operations (dollars in millions): Gross premiums (a) Interest accretion (b) Three months ended Three months ended March 31, March 31, 2023 2022 2023 2022 Other annuity $ 1.3 $ 2.2 $ 3.7 $ 3.9 Supplemental health 179.4 175.7 41.8 41.2 Medicare supplement 159.2 167.6 2.7 2.8 Long-term care 82.7 82.4 43.2 43.0 Traditional life 178.8 172.4 28.0 27.9 Total $ 601.4 $ 600.3 $ 119.4 $ 118.8 _____________________ (a) Such amounts are included in insurance policy income in the consolidated statement of operations. (b) Such amounts are included in insurance policy benefits in the consolidated statement of operations. The following table provides the amount of undiscounted and discounted expected gross premiums and expected future benefits and expenses for traditional and limited-payment contracts (dollars in millions): March 31, 2023 March 31, 2022 Undiscounted Discounted (a) Undiscounted Discounted (a) Other annuity Expected future gross premiums $ — $ — $ — $ — Expected future benefits and expenses 396.9 316.3 426.0 383.3 Supplemental health Expected future gross premiums 8,964.4 5,605.7 8,862.2 6,222.2 Expected future benefits and expenses 11,040.9 6,080.8 10,940.4 6,954.9 Medicare supplement Expected future gross premiums 5,645.2 4,031.9 5,680.8 4,490.0 Expected future benefits and expenses 4,417.8 3,136.5 4,446.9 3,499.3 Long-term care Expected future gross premiums 2,954.3 2,152.7 3,012.5 2,389.4 Expected future benefits and expenses 7,445.7 4,266.6 7,606.7 4,966.2 Traditional life Expected future gross premiums 5,435.0 3,953.3 5,384.4 4,260.8 Expected future benefits and expenses 7,382.8 4,560.6 7,180.2 4,985.5 _____________________ (a) Calculated at the discount rates at period end. The following table provides the weighted average durations (under locked-in rates) of the liability for future policy benefits in years: March 31, March 31, Other annuity 9.7 9.7 Supplemental health 11.8 12.0 Medicare supplement 6.1 5.9 Long-term care 10.5 10.8 Traditional life 10.1 10.4 The following table provides the weighted average interest rates for the liability for future policy benefits: March 31, March 31, Other annuity Interest accretion rate 4.76 % 4.72 % Current discount rate 5.17 % 3.68 % Supplemental health Interest accretion rate 5.04 % 5.09 % Current discount rate 5.14 % 3.66 % Medicare supplement Interest accretion rate 4.26 % 4.23 % Current discount rate 4.94 % 3.41 % Long-term care Interest accretion rate 5.67 % 5.71 % Current discount rate 5.18 % 3.71 % Traditional life Interest accretion rate 4.77 % 4.82 % Current discount rate 5.15 % 3.66 % |
Schedule of Policyholder Account Balance | The following tables present the balances of and changes in the liability for policyholder account balances (dollars in millions): March 31, 2023 Fixed indexed annuities Fixed interest annuities Other annuities Interest-sensitive life Funding agreements Other (a) Balance, beginning of period excluding contracts 100% ceded $ 9,490.4 $ 1,663.1 $ 127.1 $ 1,209.6 $ 1,410.8 $ 395.5 Issuances 323.3 45.3 — 9.5 — — Premiums received .4 .7 7.5 50.3 — 63.0 Policy charges (4.0) (.2) — (46.1) — — Surrenders and withdrawals (178.2) (43.3) (10.5) (8.2) (9.9) (72.6) Benefit payments (59.2) (27.7) (1.7) (6.0) — — Interest credited 6.1 11.3 .6 8.1 7.2 .7 Other 5.5 .1 (.2) — — — Balance, end of period excluding contracts 100% ceded 9,584.3 1,649.3 122.8 1,217.2 1,408.1 386.6 Balance, end of period for contracts 100% ceded 154.4 632.6 26.3 110.7 — 10.6 Balance, end of period $ 9,738.7 $ 2,281.9 $ 149.1 $ 1,327.9 $ 1,408.1 $ 397.2 Balance, end of period, reinsurance ceded (154.4) (632.6) (26.3) (130.5) — (24.8) Balance, end of period, net of reinsurance $ 9,584.3 $ 1,649.3 $ 122.8 $ 1,197.4 $ 1,408.1 $ 372.4 Weighted average crediting rate 1.6 % 2.7 % 1.9 % 3.1 % 2.0 % 0.6 % Net amount at risk (b) $ — $ — $ — $ 26,865.3 $ — $ — Cash surrender value, net of reinsurance $ 8,932.4 $ 1,631.5 $ 122.8 $ 977.1 $ — $ 372.4 _________________ (a) Predominantly consists of retained asset accounts associated with our traditional life and supplemental health blocks. (b) Represents the amount of insurance policy benefit expense that we would incur if death claims were filed on all annuity and interest-sensitive life contracts at the balance sheet date. March 31, 2022 Fixed indexed annuities Fixed interest annuities Other annuities Interest-sensitive life Funding agreements Other (a) Balance, beginning of period excluding contracts 100% ceded $ 8,681.0 $ 1,806.1 $ 131.2 $ 1,163.9 $ 502.0 $ 368.0 Issuances 354.6 10.5 — 10.6 899.0 — Premiums received .1 1.1 9.1 47.6 — 61.7 Policy charges (3.0) (.1) — (44.5) — — Surrenders and withdrawals (133.7) (37.9) (10.2) (5.7) — (56.8) Benefit payments (67.3) (39.6) (1.4) (7.8) — (.1) Interest credited 65.7 11.5 .6 15.7 7.0 .7 Other 4.6 .2 — — — — Balance, end of period excluding contracts 100% ceded 8,902.0 1,751.8 129.3 1,179.8 1,408.0 373.5 Balance, end of period for contracts 100% ceded 166.6 658.8 28.2 115.7 — 11.9 Balance, end of period $ 9,068.6 $ 2,410.6 $ 157.5 $ 1,295.5 $ 1,408.0 $ 385.4 Balance, end of period, reinsurance ceded (166.6) (658.8) (28.2) (136.5) — (26.7) Balance, end of period, net of reinsurance $ 8,902.0 $ 1,751.8 $ 129.3 $ 1,159.0 $ 1,408.0 $ 358.7 Weighted average crediting rate 1.4 % 2.6 % 1.8 % 5.9 % 2.0 % 0.7 % Net amount at risk (b) $ — $ — $ — $ 26,436.6 $ — $ — Cash surrender value, net of reinsurance $ 8,295.5 $ 1,743.3 $ 129.3 $ 938.6 $ — $ 358.7 _________________ (a) Predominantly consists of retained asset accounts associated with our traditional life and supplemental health blocks. (b) Represents the amount of insurance policy benefit expense that we would incur if death claims were filed on all annuity and interest-sensitive life contracts at the balance sheet date. The following table reconciles the liability for policyholder account balances to the amount presented in the consolidated balance sheet (dollars in millions): March 31, 2023 March 31, 2022 Amounts included in the liability for policyholder account balances rollforwards: Fixed indexed annuities $ 9,738.7 $ 9,068.6 Fixed interest annuities 2,281.9 2,410.6 Other annuities 149.1 157.5 Interest-sensitive life 1,327.9 1,295.5 Funding agreements 1,408.1 1,408.0 Other 397.2 385.4 Total $ 15,302.9 $ 14,725.6 |
Schedule of Changes in Market Risk Benefits | The following table presents the balance of and changes in market risk benefits associated with our fixed indexed annuities (dollars in millions): March 31, 2023 March 31, 2022 Net liability (asset), beginning of period $ (54.0) $ 86.2 Effect of changes in the instrument-specific credit risk, beginning of period 12.2 12.1 Balance, beginning of period, before effect of changes in the instrument-specific credit risk (41.8) 98.3 Issuances .1 (.8) Interest accrual 5.2 3.4 Attributed fees collected — — Benefit payments — — Effect of changes in interest rates 12.3 (35.3) Effect of changes in equity markets 5.3 (6.8) Effect of changes in equity index volatility (7.4) 4.4 Actual policyholder behavior different from expected behavior .6 .3 Effect of changes in future expected policyholder behavior - other — — Effect of changes in future expected policyholder behavior - risk margin — — Effect of changes in assumptions (1.4) 2.1 Net liability (asset), end of period, before effect of changes in the instrument-specific credit risk (27.1) 65.6 Effect of changes in the instrument-specific credit risk, end of period (13.1) (18.7) Net liability (asset), end of period (40.2) 46.9 Reinsurance recoverable, end of period — — Net liability (asset), end of period, net of reinsurance $ (40.2) $ 46.9 Balance reported as an asset $ 57.8 $ 16.9 Balance reported as a liability 17.6 63.8 Net liability (asset) $ (40.2) $ 46.9 Net amount at risk $ 58.9 $ 107.4 Weighted average attained age of contract holders 68 68 |
Schedule of Policyholder Account Balance, Guaranteed Minimum Crediting Rate | The following tables present the account values by range of guaranteed minimum crediting rates and the related range of difference, in basis points, between rates being credited to policyholders and the respective guaranteed minimums (dollars in millions): March 31, 2023 Range of guaranteed minimum crediting rates (a) At guaranteed minimum 1-50 basis points above 51-150 basis points above Greater than 150 basis points above Total Fixed interest annuity 0.00%-2.99% $ 144.9 $ 291.7 $ 78.3 $ 76.9 $ 591.8 3.00%-4.99% 1,572.0 27.7 .1 — 1,599.8 5.00% and greater 90.3 — — — 90.3 Subtotal 1,807.2 319.4 78.4 76.9 2,281.9 Other annuity 0.00%-2.99% 43.6 29.5 — — 73.1 3.00%-4.99% 65.3 — — — 65.3 5.00% and greater 10.7 — — — 10.7 Subtotal 119.6 29.5 — — 149.1 Interest-sensitive life 0.00%-2.99% 66.5 225.8 225.4 — 517.7 3.00%-4.99% 461.5 51.7 146.6 125.0 784.8 5.00% and greater 21.9 .5 2.7 .3 25.4 Subtotal 549.9 278.0 374.7 125.3 1,327.9 Funding agreements 0.00%-2.99% 1,408.1 — — — 1,408.1 3.00%-4.99% — — — — — 5.00% and greater — — — — — Subtotal 1,408.1 — — — 1,408.1 Other 0.00%-2.99% 17.8 355.4 — — 373.2 3.00%-4.99% 23.6 — — — 23.6 5.00% and greater .4 — — — .4 Subtotal 41.8 355.4 — — 397.2 Total 0.00%-2.99% 1,680.9 902.4 303.7 76.9 2,963.9 3.00%-4.99% 2,122.4 79.4 146.7 125.0 2,473.5 5.00% and greater 123.3 .5 2.7 .3 126.8 Total policyholder account balances, excluding fixed indexed annuities $ 3,926.6 $ 982.3 $ 453.1 $ 202.2 5,564.2 Fixed indexed annuity account balances 9,738.7 Total policyholder account balances $ 15,302.9 ____________________ (a) Excludes the account balances related to our fixed indexed annuity contracts which do not have a minimum crediting rate since returns are based on an index. March 31, 2022 Range of guaranteed minimum crediting rates (a) At guaranteed minimum 1-50 basis points above 51-150 basis points above Greater than 150 basis points above Total Fixed interest annuity 0.00%-2.99% $ 171.7 $ 332.2 $ 42.9 $ 11.5 $ 558.3 3.00%-4.99% 1,734.3 23.5 0.1 — 1,757.9 5.00% and greater 94.4 — — — 94.4 Subtotal 2,000.4 355.7 43.0 11.5 2,410.6 Other annuity 0.00%-2.99% 53.1 30.3 — — 83.4 3.00%-4.99% 62.4 — — — 62.4 5.00% and greater 11.7 — — — 11.7 Subtotal 127.2 30.3 — — 157.5 Interest-sensitive life 0.00%-2.99% 7.5 — — — 7.5 3.00%-4.99% 409.3 56.5 178.0 146.4 790.2 5.00% and greater 22.7 0.4 — 474.7 497.8 Subtotal 439.5 56.9 178.0 621.1 1,295.5 Funding agreements 0.00%-2.99% 1,408.0 — — — 1,408.0 3.00%-4.99% — — — — — 5.00% and greater — — — — — Subtotal 1,408.0 — — — 1,408.0 Other 0.00%-2.99% 18.5 341.1 — — 359.6 3.00%-4.99% 24.8 — — — 24.8 5.00% and greater 1.0 — — — 1.0 Subtotal 44.3 341.1 — — 385.4 Total 0.00%-2.99% 1,658.8 703.6 42.9 11.5 2,416.8 3.00%-4.99% 2,230.8 80.0 178.1 146.4 2,635.3 5.00% and greater 129.8 0.4 — 474.7 604.9 Total policyholder account balances, excluding fixed indexed annuities $ 4,019.4 $ 784.0 $ 221.0 $ 632.6 5,657.0 Fixed indexed annuity account balances 9,068.6 Total policyholder account balances $ 14,725.6 ____________________ (a) Excludes the account balances related to our fixed indexed annuity contracts which do not have a minimum crediting rate since returns are based on an index. |
DEFERRED ACQUISITION COSTS, P_2
DEFERRED ACQUISITION COSTS, PRESENT VALUE OF FUTURE PROFITS AND SALES INDUCEMENTS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Deferred Charges, Insurers [Abstract] | |
Schedule of Deferred Policy Acquisition Costs | Changes in deferred acquisition costs were as follows (dollars in millions): March 31, 2023 Fixed indexed annuities Fixed interest annuities Supplemental health Medicare supplement Long-term care Interest-sensitive life Traditional life Funding agreements Total Beginning of period $ 365.6 $ 19.6 $ 378.8 $ 161.2 $ 137.9 $ 212.2 $ 409.1 $ 6.0 $ 1,690.4 Capitalizations 21.6 2.5 14.4 5.8 3.4 8.3 28.2 — 84.2 Amortization expense (11.1) (.9) (7.6) (7.2) (3.8) (3.5) (12.2) (.3) (46.6) End of period $ 376.1 $ 21.2 $ 385.6 $ 159.8 $ 137.5 $ 217.0 $ 425.1 $ 5.7 $ 1,728.0 March 31, 2022 Fixed indexed annuities Fixed interest annuities Supplemental health Medicare supplement Long-term care Interest-sensitive life Traditional life Funding agreements Total Beginning of period $ 313.0 $ 19.0 $ 357.5 $ 170.2 $ 136.4 $ 196.3 $ 357.6 $ 3.3 $ 1,553.3 Capitalizations 22.5 .5 12.0 5.5 4.8 7.8 21.7 4.2 79.0 Amortization expense (9.7) (.9) (7.0) (7.6) (3.9) (3.4) (10.2) (.3) (43.0) End of period $ 325.8 $ 18.6 $ 362.5 $ 168.1 $ 137.3 $ 200.7 $ 369.1 $ 7.2 $ 1,589.3 |
Schedule of Present Value of Future Insurance Profits | Changes in the present value of future profits were as follows (dollars in millions): March 31, 2023 Supplemental health Medicare supplement Long-term care Traditional life Fixed indexed annuities Fixed interest annuities Total Beginning of period $ 154.0 $ 27.5 $ 6.2 $ 14.8 $ .8 $ .4 $ 203.7 Amortization expense (3.3) (1.9) (.3) (.5) (.1) — (6.1) End of period $ 150.7 $ 25.6 $ 5.9 $ 14.3 $ .7 $ .4 $ 197.6 March 31, 2022 Supplemental health Medicare supplement Long-term care Traditional life Fixed indexed annuities Fixed interest annuities Total Beginning of period $ 168.1 $ 36.5 $ 7.3 $ 16.9 $ .9 $ .4 $ 230.1 Amortization expense (3.6) (2.5) (.3) (.5) — — (6.9) End of period $ 164.5 $ 34.0 $ 7.0 $ 16.4 $ .9 $ .4 $ 223.2 |
Schedule of Deferred Sale Inducement Cost | Changes in sales inducements were as follows (dollars in millions): March 31, 2023 Fixed indexed annuities Fixed interest annuities Total Beginning of period $ 76.0 $ 4.5 $ 80.5 Capitalizations 5.4 .2 5.6 Amortization expense (2.6) (.2) (2.8) End of period $ 78.8 $ 4.5 $ 83.3 March 31, 2022 Fixed indexed annuities Fixed interest annuities Total Beginning of period $ 63.0 $ 5.0 $ 68.0 Capitalizations 4.6 .1 4.7 Amortization expense (2.1) (.3) (2.4) End of period $ 65.5 $ 4.8 $ 70.3 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share Reconciliation | A reconciliation of net income (loss) and shares used to calculate basic and diluted earnings per share is as follows (dollars in millions and shares in thousands): Three months ended March 31, 2023 2022 Net income (loss) for basic and diluted earnings per share $ (.8) $ 183.4 Shares: Weighted average shares outstanding for basic earnings per share 114,545 118,622 Effect of dilutive securities on weighted average shares: Amounts related to employee benefit plans — 2,380 Weighted average shares outstanding for diluted earnings per share 114,545 121,002 |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Operating Information by Segment | Operating information by segment is as follows (dollars in millions): Three months ended March 31, 2023 2022 Revenues: Annuity: Insurance policy income $ 5.1 $ 5.0 Net investment income 125.4 117.5 Total annuity revenues 130.5 122.5 Health: Insurance policy income 401.4 406.7 Net investment income 74.0 73.3 Total health revenues 475.4 480.0 Life: Insurance policy income 219.0 213.3 Net investment income 36.3 35.5 Total life revenues 255.3 248.8 Change in market values of the underlying options supporting the fixed indexed annuity and life products (offset by market value changes credited to policyholder balances) 18.6 (71.9) Investment income not allocated to product lines 67.8 46.6 Fee revenue and other income: Fee income 51.3 40.3 Amounts netted in expenses not allocated to product lines 1.6 2.8 Total segment revenues $ 1,000.5 $ 869.1 (continued on next page) (continued from previous page) Three months ended March 31, 2023 2022 Expenses: Annuity: Insurance policy benefits $ 8.7 $ 9.5 Interest credited 48.1 42.5 Amortization and non-deferred commissions 16.4 14.6 Total annuity expenses 73.2 66.6 Health: Insurance policy benefits 318.1 323.1 Amortization and non-deferred commissions 40.8 41.6 Total health expenses 358.9 364.7 Life: Insurance policy benefits 147.2 153.1 Interest credited 12.1 12.0 Amortization, non-deferred commissions and advertising expense 48.6 47.7 Total life expenses 207.9 212.8 Allocated expenses 157.5 144.8 Expenses not allocated to product lines 19.9 17.6 Market value changes of options credited to fixed indexed annuity and life policyholders 18.6 (71.9) Amounts netted in investment income not allocated to product lines: Interest expense 37.4 18.1 Interest credited 7.2 6.9 Impact of annual option forfeitures related to fixed indexed annuity surrenders — (1.6) Amortization .4 .4 Other expenses 7.3 (4.2) Expenses netted in fee revenue: Commissions and other operating expenses 35.8 30.4 Total segment expenses 924.1 784.6 Pre-tax measure of profitability: Annuity margin 57.3 55.9 Health margin 116.5 115.3 Life margin 47.4 36.0 Total insurance product margin 221.2 207.2 Allocated expenses (157.5) (144.8) Income from insurance products 63.7 62.4 Fee income 15.5 9.9 Investment income not allocated to product lines 15.5 27.0 Expenses not allocated to product lines (18.3) (14.8) Operating earnings before taxes 76.4 84.5 Income tax expense on operating income 17.8 20.0 Net operating income $ 58.6 $ 64.5 |
Schedule of Reconciliation of Segment Revenues and Expenses to Consolidated Revenues and Expenses and Net Income | A reconciliation of segment revenues and expenses to consolidated revenues and expenses and net income is as follows (dollars in millions): Three months ended March 31, 2023 2022 Total segment revenues $ 1,000.5 $ 869.1 Total investment losses (14.6) (32.7) Revenues related to earnings attributable to VIEs 20.1 6.5 Consolidated revenues 1,006.0 842.9 Total segment expenses 924.1 784.6 Insurance policy benefits - changes in fair value of embedded derivative liabilities and market risk benefits 65.1 (165.4) Expenses attributable to VIEs 17.8 6.1 Fair value changes related to agent deferred compensation plan — (22.7) Consolidated expenses 1,007.0 602.6 Income (loss) before tax (1.0) 240.3 Income tax expense (benefit) on period income (loss) (.2) 56.9 Net income (loss) (.8) $ 183.4 |
ACCOUNTING FOR DERIVATIVES (Tab
ACCOUNTING FOR DERIVATIVES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Value by Balance Sheet Location | Our freestanding and embedded derivatives, which are not designated as hedging instruments, are held at fair value and are summarized as follows (dollars in millions): Fair value March 31, December 31, 2022 Assets: Other invested assets: Fixed indexed call options $ 108.2 $ 56.7 Reinsurance receivables (16.4) (17.8) Total assets $ 91.8 $ 38.9 Liabilities: Future policy benefits: Fixed indexed products $ 1,347.9 $ 1,297.0 Total liabilities $ 1,347.9 $ 1,297.0 |
Schedule Pre-Tax Gains (Losses) Recognized in Net Income for Derivative Instruments | The following table provides the pre-tax gains (losses) recognized in revenues for derivative instruments, which are not designated as hedges for the periods indicated (dollars in millions): Three months ended March 31, 2023 2022 Net investment income (loss) from policyholder and other special-purpose portfolios: Fixed indexed call options $ 18.6 $ (72.9) Total investment gains (losses): Embedded derivative related to modified coinsurance agreement 1.4 (6.5) Total revenues from derivative instruments, not designated as hedges $ 20.0 $ (79.4) |
Schedule of Derivatives with Master Netting Arrangements | The following table summarizes information related to derivatives with master netting arrangements or collateral as of March 31, 2023 and December 31, 2022 (dollars in millions): Gross amounts not offset in the balance sheet Gross amounts recognized Gross amounts offset in the balance sheet Net amounts of assets presented in the balance sheet Financial instruments Cash collateral received Net amount March 31, 2023: Fixed indexed call options $ 108.2 $ — $ 108.2 $ — $ — $ 108.2 December 31, 2022: Fixed indexed call options 56.7 — 56.7 — — 56.7 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The components of income tax expense are as follows (dollars in millions): Three months ended March 31, 2023 2022 Current tax expense $ 14.0 $ 4.4 Deferred tax expense (benefit) (14.2) 52.5 Total income tax expense (benefit) $ (.2) $ 56.9 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the U.S. statutory corporate tax rate to the estimated annual effective rate, reflected in the consolidated statement of operations is as follows: Three months ended March 31, 2023 2022 U.S. statutory corporate rate 21.0 % 21.0 % Non-taxable income and nondeductible benefits, net (.4) — State taxes 2.7 2.7 Effective tax rate 23.3 % 23.7 % |
Schedule of Deferred Tax Assets and Liabilities | The components of the Company's income tax assets and liabilities are summarized below (dollars in millions): March 31, December 31, Deferred tax assets: Net federal operating loss carryforwards $ 149.9 $ 166.0 Net state operating loss carryforwards 2.5 2.5 Insurance liabilities 329.4 298.5 Indirect costs allocable to self-constructed real estate assets 224.4 214.8 Accumulated other comprehensive loss 470.1 552.4 Other — 7.3 Gross deferred tax assets 1,176.3 1,241.5 Deferred tax liabilities: Investments (34.8) (37.2) Present value of future profits and deferred acquisition costs (152.1) (148.9) Other (1.5) — Gross deferred tax liabilities (188.4) (186.1) Net deferred tax assets 987.9 1,055.4 Current income taxes prepaid .2 8.0 Income tax assets, net $ 988.1 $ 1,063.4 |
Schedule of Operating Loss Carryforwards | We have $0.7 billion of federal non-life NOLs as of March 31, 2023, as summarized below (dollars in millions): Net operating loss Year of expiration carryforwards 2023 $ 127.4 2025 85.2 2026 149.9 2027 10.8 2028 80.3 2029 213.2 2030 .3 2031 .2 2032 44.4 2033 .6 2034 .9 2035 .8 Total federal non-life NOLs $ 714.0 |
NOTES PAYABLE - DIRECT CORPOR_2
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt Instruments | The following notes payable were direct corporate obligations of the Company as of March 31, 2023 and December 31, 2022 (dollars in millions): March 31, December 31, 5.250% Senior Notes due May 2025 $ 500.0 $ 500.0 5.250% Senior Notes due May 2029 500.0 500.0 5.125% Subordinated Debentures due November 2060 150.0 150.0 Revolving Credit Agreement (as defined below) — — Unamortized debt issue costs (10.8) (11.2) Direct corporate obligations $ 1,139.2 $ 1,138.8 |
INVESTMENT BORROWINGS (Tables)
INVESTMENT BORROWINGS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Investment Borrowings [Abstract] | |
Schedule of Terms of Federal Home Loan Bank Borrowing | The following summarizes the terms of the borrowings from the FHLB by our insurance subsidiaries (dollars in millions): Amount Maturity Interest rate at borrowed date March 31, 2023 100.0 April 2024 Variable rate – 4.973% 22.0 May 2024 Variable rate – 5.202% 15.5 July 2024 Fixed rate – 1.990% 27.0 August 2024 Fixed rate – .640% 25.0 September 2024 Variable rate – 5.439% 21.7 May 2025 Variable rate – 5.114% 18.4 June 2025 Fixed rate – 2.940% 125.0 September 2025 Variable rate – 5.170% 100.0 October 2025 Variable rate – 5.246% 100.0 October 2025 Variable rate – 5.223% 57.7 October 2025 Variable rate – 5.185% 50.0 November 2025 Variable rate – 5.226% 50.0 January 2026 Variable rate – 5.168% 50.0 January 2026 Variable rate – 5.195% 100.0 January 2026 Variable rate – 5.064% 15.0 January 2026 Variable rate – 5.487% 21.8 May 2026 Variable rate – 4.954% 50.0 May 2026 Variable rate – 5.090% 75.0 December 2026 Variable rate – 5.169% 75.0 January 2027 Variable rate – 5.060% 50.0 January 2027 Variable rate – 5.077% 50.0 January 2027 Variable rate – 5.204% 100.0 February 2027 Variable rate – 5.133% 50.0 April 2027 Variable rate – 5.135% 50.0 May 2027 Variable rate – 5.145% 100.0 June 2027 Variable rate – 5.190% 10.0 June 2027 Variable rate – 5.413% 75.0 January 2028 Variable rate – 5.174% 50.0 January 2028 Variable rate – 5.382% 50.0 January 2028 Variable rate – 5.236% 34.5 February 2028 Variable rate – 5.294% 21.0 February 2028 Variable rate – 5.156% 100.0 February 2028 Variable rate – 5.153% $ 1,839.6 |
CONSOLIDATED STATEMENT OF CAS_3
CONSOLIDATED STATEMENT OF CASH FLOWS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of the Reconciliation for Net Income Provided by Operating Activities | The following reconciles net income (loss) to net cash from operating activities (dollars in millions): Three months ended March 31, 2023 2022 Cash flows from operating activities: Net income (loss) $ (.8) $ 183.4 Adjustments to reconcile net income (loss) to net cash from operating activities: Amortization and depreciation 65.7 61.1 Income taxes (6.4) 42.3 Insurance liabilities 173.3 (152.4) Accrual, amortization and fair value changes included in investment income (27.9) 52.2 Deferral of policy acquisition costs (89.8) (83.7) Net investment losses 14.6 32.7 Other (a) (46.8) (79.2) Net cash from operating activities $ 81.9 $ 56.4 _____________ (a) Primarily relates to: (i) changes in other assets and liabilities related to the timing of payments and receipts; and (ii) the change in fair value of the deferred compensation plan liability. |
Schedule of Other Significant Noncash Transactions | Other non-cash items not reflected in the investing and financing activities sections of the consolidated statement of cash flows (dollars in millions): Three months ended March 31, 2023 2022 Amounts related to employee benefit plans $ 6.5 $ 7.2 |
INVESTMENTS IN VARIABLE INTER_2
INVESTMENTS IN VARIABLE INTEREST ENTITIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Impact on Balance Sheet of Consolidating Variable Interest Entities | The following tables provide supplemental information about the assets and liabilities of the VIEs which have been consolidated in accordance with authoritative guidance (dollars in millions): March 31, 2023 VIEs Eliminations Net effect on Assets: Investments held by variable interest entities $ 1,017.9 $ — $ 1,017.9 Notes receivable of VIEs held by subsidiaries — (113.8) (113.8) Cash and cash equivalents held by variable interest entities 97.1 — 97.1 Accrued investment income 4.0 — 4.0 Income tax assets, net 16.6 — 16.6 Other assets 4.5 (.8) 3.7 Total assets $ 1,140.1 $ (114.6) $ 1,025.5 Liabilities: Other liabilities $ 26.8 $ (3.9) $ 22.9 Borrowings related to variable interest entities 1,065.4 — 1,065.4 Notes payable of VIEs held by subsidiaries 126.1 (126.1) — Total liabilities $ 1,218.3 $ (130.0) $ 1,088.3 December 31, 2022 VIEs Eliminations Net effect on Assets: Investments held by variable interest entities $ 1,077.6 $ — $ 1,077.6 Notes receivable of VIEs held by subsidiaries — (113.8) (113.8) Cash and cash equivalents held by variable interest entities 69.2 — 69.2 Accrued investment income 3.5 — 3.5 Income tax assets, net 19.6 — 19.6 Other assets 2.5 (.8) 1.7 Total assets $ 1,172.4 $ (114.6) $ 1,057.8 Liabilities: Other liabilities $ 29.3 $ (2.4) $ 26.9 Borrowings related to variable interest entities 1,104.6 — 1,104.6 Notes payable of VIEs held by subsidiaries 126.1 (126.1) — Total liabilities $ 1,260.0 $ (128.5) $ 1,131.5 |
Schedule of Changes in the Allowance for Current Expected Credit Losses Related to Investments Held by VIEs | The following table summarizes changes in the allowance for credit losses related to fixed maturities, available for sale, for the three months ended March 31, 2023 (dollars in millions): Corporate securities States and political subdivisions Foreign governments Asset-backed securities Total Allowance at December 31, 2022 $ 54.4 $ .9 $ .4 $ .3 $ 56.0 Additions for securities for which credit losses were not previously recorded 3.0 — — — 3.0 Additions for purchased securities with deteriorated credit — — — — — Additions (reductions) for securities where an allowance was previously recorded .5 (.1) .1 .3 .8 Reduction for securities sold during the period (.7) — — — (.7) Reduction for securities for which the Company made the decision to sell where an allowance was previously recorded — — — — — Write-offs — — — — — Recoveries of previously written-off amount — — — — — Allowance at March 31, 2023 $ 57.2 $ .8 $ .5 $ .6 $ 59.1 The following table summarizes changes in the allowance for credit losses related to fixed maturities, available for sale, for the three months ended March 31, 2022 (dollars in millions): Corporate securities States and political subdivisions Foreign governments Asset-backed securities Total Allowance at December 31, 2021 $ 7.4 $ — $ .2 $ — $ 7.6 Additions for securities for which credit losses were not previously recorded 14.0 .3 .1 — 14.4 Additions for purchased securities with deteriorated credit — — — — — Additions (reductions) for securities where an allowance was previously recorded 14.6 .5 (.2) .1 15.0 Reduction for securities sold during the period (.4) — — — (.4) Reduction for securities for which the Company made the decision to sell where an allowance was previously recorded — — — — — Write-offs — — — — — Recoveries of previously written-off amount — — — — — Allowance at March 31, 2022 $ 35.6 $ .8 $ .1 $ .1 $ 36.6 The following table summarizes changes in the allowance for credit losses related to corporate securities held by VIEs for the three months ended March 31, 2023 and 2022 (dollars in millions): Three months ended March 31, 2023 2022 Allowance at the beginning of the period $ 5.5 $ 3.7 Additions for securities for which credit losses were not previously recorded .3 1.5 Additions for purchased securities with deteriorated credit — — Additions (reductions) for securities where an allowance was previously recorded (.7) 1.3 Reduction for securities sold during the period (1.6) (.6) Reduction for securities for which the Company made the decision to sell where an allowance was previously recorded — — Write-offs — — Recoveries of previously written-off amount — — Allowance at the end of the period $ 3.5 $ 5.9 |
Schedule of Variable Interest Entities by Contractual Maturity | The following table sets forth the amortized cost and estimated fair value of the investments held by the VIEs at March 31, 2023, by contractual maturity. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties. Amortized Estimated (Dollars in millions) Due in one year or less $ 5.4 $ 4.7 Due after one year through five years 782.3 752.8 Due after five years through ten years 272.6 260.4 Total $ 1,060.3 $ 1,017.9 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Instruments Carried at Fair Value Categorized by Input Level | The categorization of fair value measurements, by input level, for our financial instruments carried at fair value on a recurring basis at March 31, 2023 is as follows (dollars in millions): Quoted prices in active markets Significant other observable inputs Significant unobservable inputs Total Assets: Fixed maturities, available for sale: Corporate securities $ — $ 11,848.6 $ 127.8 $ 11,976.4 United States Treasury securities and obligations of United States government corporations and agencies — 170.1 — 170.1 States and political subdivisions — 2,462.6 — 2,462.6 Foreign governments — 78.6 — 78.6 Asset-backed securities — 1,299.1 41.1 1,340.2 Agency residential mortgage-backed securities — 215.9 — 215.9 Non-agency residential mortgage-backed securities — 1,606.7 33.8 1,640.5 Collateralized loan obligations — 918.9 — 918.9 Commercial mortgage-backed securities — 2,290.1 13.8 2,303.9 Total fixed maturities, available for sale — 20,890.6 216.5 21,107.1 Equity securities - corporate securities 31.1 — 75.0 106.1 Trading securities: Asset-backed securities — 25.5 — 25.5 Agency residential mortgage-backed securities — .3 — .3 Non-agency residential mortgage-backed securities — 58.3 .5 58.8 Commercial mortgage-backed securities — 123.5 — 123.5 Total trading securities — 207.6 .5 208.1 Investments held by variable interest entities - corporate securities — 1,017.9 — 1,017.9 Other invested assets: Derivatives — 108.2 — 108.2 Residual tranches — .9 19.2 20.1 Total other invested assets — 109.1 19.2 128.3 Market risk benefit asset — — 57.8 57.8 Assets held in separate accounts — 2.8 — 2.8 Total assets carried at fair value by category $ 31.1 $ 22,228.0 $ 369.0 $ 22,628.1 Liabilities: Market risk benefit liability $ — $ — $ 17.6 $ 17.6 Embedded derivatives associated with fixed indexed annuity products (classified as policyholder account liabilities) — — 1,347.9 1,347.9 Total liabilities carried at fair value by category $ — $ — $ 1,365.5 $ 1,365.5 The categorization of fair value measurements, by input level, for our financial instruments carried at fair value on a recurring basis at December 31, 2022 is as follows (dollars in millions): Quoted prices in active markets Significant other observable inputs Significant unobservable inputs Total Assets: Fixed maturities, available for sale: Corporate securities $ — $ 11,584.9 $ 127.8 $ 11,712.7 United States Treasury securities and obligations of United States government corporations and agencies — 158.7 — 158.7 States and political subdivisions — 2,388.5 — 2,388.5 Foreign governments — 74.7 — 74.7 Asset-backed securities — 1,230.0 57.0 1,287.0 Agency residential mortgage-backed securities — 175.0 — 175.0 Non-agency residential mortgage-backed securities — 1,492.3 56.2 1,548.5 Collateralized loan obligations — 782.5 3.4 785.9 Commercial mortgage-backed securities — 2,207.9 14.5 2,222.4 Total fixed maturities, available for sale — 20,094.5 258.9 20,353.4 Equity securities - corporate securities 59.6 — 75.7 135.3 Trading securities: Asset-backed securities — 15.1 — 15.1 Agency residential mortgage-backed securities — .3 — .3 Non-agency residential mortgage-backed securities — 60.2 .5 60.7 Commercial mortgage-backed securities — 131.8 — 131.8 Total trading securities — 207.4 .5 207.9 Investments held by variable interest entities - corporate securities — 1,077.6 — 1,077.6 Other invested assets: Derivatives — 56.7 — 56.7 Residual tranches — — 18.3 18.3 Total other invested assets — 56.7 18.3 75.0 Market risk benefit asset — — 65.3 65.3 Assets held in separate accounts — 2.7 — 2.7 Total assets carried at fair value by category $ 59.6 $ 21,438.9 $ 418.7 $ 21,917.2 Liabilities: Market risk benefit liability $ — $ — $ 11.3 $ 11.3 Embedded derivatives associated with fixed indexed annuity products (classified as policyholder account liabilities) — — 1,297.0 1,297.0 Total liabilities carried at fair value by category $ — $ — $ 1,308.3 $ 1,308.3 The fair value of our financial instruments disclosed at fair value on a recurring basis are as follows (dollars in millions): March 31, 2023 Quoted prices in active markets for identical assets or liabilities Significant other observable inputs Significant unobservable inputs Total estimated fair value Total carrying amount Assets: Mortgage loans $ — $ — $ 1,557.5 $ 1,557.5 $ 1,676.1 Policy loans — — 123.0 123.0 123.0 Other invested assets: Company-owned life insurance — 201.3 — 201.3 201.3 Cash and cash equivalents: Unrestricted 425.0 — — 425.0 425.0 Held by variable interest entities 97.1 — — 97.1 97.1 Liabilities: Policyholder account liabilities — — 15,302.9 15,302.9 15,302.9 Investment borrowings — 1,840.6 — 1,840.6 1,839.6 Borrowings related to variable interest entities — 1,034.8 — 1,034.8 1,065.4 Notes payable – direct corporate obligations — 1,079.5 — 1,079.5 1,139.2 December 31, 2022 Quoted prices in active markets for identical assets or liabilities Significant other observable inputs Significant unobservable inputs Total estimated fair value Total carrying amount Assets: Mortgage loans $ — $ — $ 1,273.6 $ 1,273.6 $ 1,411.9 Policy loans — — 121.6 121.6 121.6 Other invested assets: Company-owned life insurance — 199.1 — 199.1 199.1 Cash and cash equivalents: Unrestricted 575.7 — — 575.7 575.7 Held by variable interest entities 69.2 — — 69.2 69.2 Liabilities: Policyholder account liabilities — — 15,234.2 15,234.2 15,234.2 Investment borrowings — 1,640.5 — 1,640.5 1,639.5 Borrowings related to variable interest entities — 1,066.3 — 1,066.3 1,104.6 Notes payable – direct corporate obligations — 1,077.0 — 1,077.0 1,138.8 The following table presents additional information about assets measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the three months ended March 31, 2023 (dollars in millions): March 31, 2023 Beginning balance as of December 31, 2022 Purchases, sales, issuances and settlements, net (b) Total realized and unrealized gains (losses) included in net income Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) Transfers into Level 3 (a) Transfers out of Ending balance as of March 31, 2023 Amount of total gains (losses) for the three months ended March 31, 2023 included in our net income relating to assets still held as of the reporting date Amount of total gains (losses) for the three months ended March 31, 2023 included in accumulated other comprehensive income (loss) relating to assets still held as of the reporting date Assets: Fixed maturities, available for sale: Corporate securities $ 127.8 $ (.5) $ .1 $ .9 $ 5.9 $ (6.4) $ 127.8 $ .1 $ .1 Asset-backed securities 57.0 (5.1) (.2) (.2) — (10.4) 41.1 — (.5) Non-agency residential mortgage-backed securities 56.2 (.2) — 2.3 — (24.5) 33.8 — 2.4 Collateralized loan obligations 3.4 — — — — (3.4) — — — Commercial mortgage-backed securities 14.5 — — (.7) — — 13.8 — (.7) Total fixed maturities, available for sale 258.9 (5.8) (.1) 2.3 5.9 (44.7) 216.5 .1 1.3 Equity securities - corporate securities 75.7 — (.7) — — — 75.0 (.7) — Trading securities - non-agency residential mortgage-backed securities .5 — — — — — .5 — — Other invested assets - residual tranches 18.3 .5 .4 — — — 19.2 .4 — _________ (a) Transfers into Level 3 are the result of unobservable inputs utilized within valuation methodologies for assets that were previously valued using observable inputs. Transfers out of Level 3 are due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company is able to validate. (b) Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset but does not represent changes in fair value for the instruments held at the beginning of the period. Such activity primarily consists of purchases and sales of fixed maturity and equity securities. The following summarizes such activity for the three months ended March 31, 2023 (dollars in millions): Purchases Sales Issuances Settlements Purchases, sales, issuances and settlements, net Assets: Fixed maturities, available for sale: Corporate securities $ .9 $ (1.4) $ — $ — $ (.5) Asset-backed securities 2.3 (7.4) — — (5.1) Non-agency residential mortgage-backed securities — (.2) — — (.2) Total fixed maturities, available for sale 3.2 (9.0) — — (5.8) Other invested assets - residual tranches .7 (.2) — — .5 The following table presents additional information about assets measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the three months ended March 31, 2022 (dollars in millions): March 31, 2022 Beginning balance as of December 31, 2021 Purchases, sales, issuances and settlements, net (b) Total realized and unrealized gains (losses) included in net income Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) Transfers into Level 3 (a) Transfers out of Level 3 (a) Ending balance as of March 31, 2022 Amount of total gains (losses) for the three months ended March 31, 2022 included in our net income relating to assets still held as of the reporting date Amount of total gains (losses) for the three months ended March 31, 2022 included in accumulated other comprehensive income (loss) relating to assets still held as of the reporting date Assets: Fixed maturities, available for sale: Corporate securities $ 89.7 $ — $ (1.4) $ (6.5) $ 36.2 $ — $ 118.0 $ (2.1) $ (6.5) Asset-backed securities 26.6 15.9 — (1.3) — — 41.2 — (1.3) Non-agency residential mortgage-backed securities — — — (.6) 5.0 — 4.4 — (.6) Collateralized loan obligations 5.0 10.0 — (.2) — (5.0) 9.8 — (.2) Commercial mortgage-backed securities 19.0 — — (1.5) — — 17.5 — (1.5) Total fixed maturities, available for sale 140.3 25.9 (1.4) (10.1) 41.2 (5.0) 190.9 (2.1) (10.1) Equity securities - corporate securities 11.5 (2.9) (.2) — — — 8.4 (.2) — Trading securities: Non-agency residential mortgage-backed securities 3.5 — — — — (3.5) — — — Commercial mortgage-backed securities 12.9 — (.4) .2 — — 12.7 (.4) — Total trading securities 16.4 — (.4) .2 — (3.5) 12.7 (.4) — Investments held by variable interest entities - corporate securities 2.2 (2.1) (.1) — — — — — — ____________ (a) Transfers into Level 3 are the result of unobservable inputs utilized within valuation methodologies for assets that were previously valued using observable inputs. Transfers out of Level 3 are due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company is able to validate. (b) Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset but does not represent changes in fair value for the instruments held at the beginning of the period. Such activity primarily consists of purchases and sales of fixed maturity and equity securities. The following summarizes such activity for the three months ended March 31, 2022 (dollars in millions): Purchases Sales Issuances Settlements Purchases, sales, issuances and settlements, net Assets: Fixed maturities, available for sale: Corporate securities $ 9.4 $ (9.4) $ — $ — $ — Asset-backed securities 16.0 (.1) — — 15.9 Collateralized loan obligations 10.0 — — — 10.0 Total fixed maturities, available for sale 35.4 (9.5) — — 25.9 Equity securities - corporate securities .3 (3.2) — — (2.9) Investments held by variable interest entities - corporate securities — (2.1) — — (2.1) The following table summarizes changes in the value of our embedded derivatives associated with fixed indexed annuity products (classified as policyholder account liabilities) which are measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value (dollars in millions): Three months ended March 31, 2023 2022 Balance at beginning of the period $ 1,297.0 $ 1,724.1 Premiums less benefits (14.0) 21.1 Change in fair value, net 64.9 (201.7) Balance at end of the period $ 1,347.9 $ 1,543.5 |
Schedule of Fair Value Measurement Inputs | The following table provides additional information about the significant unobservable (Level 3) inputs developed internally by the Company to determine fair value for certain assets and liabilities carried at fair value at March 31, 2023 (dollars in millions): Fair value at March 31, 2023 Valuation techniques Unobservable inputs Range (weighted average) (a) Assets: Corporate securities (b) $ 2.9 Discounted cash flow analysis Discount margins 2.41% Corporate securities (c) 3.5 Recovery method Percent of recovery expected 0.00% - 35.00% (35.00%) Corporate securities (d) .5 Unadjusted purchase price Not applicable Not applicable Asset-backed securities (e) 23.1 Discounted cash flow analysis Discount margins 1.99% - 4.02% (3.20%) Equity securities (f) 63.6 Market comparables EBITDA multiples 8.8X Equity securities (g) .1 Recovery method Percent of recovery expected 0.00% - 100.00% (100.00%) Equity securities (h) 11.4 Unadjusted purchase price Not applicable Not applicable Other assets categorized as Level 3 (i) 206.1 Unadjusted third-party price source Not applicable Not applicable Market risk benefit asset (k) 57.8 Discounted cash flow analysis Surrender rates 1.28% - 11.05% (3.45%) Utilization rates 5.92% - 47.62% (22.54%) Total 369.0 Liabilities: Market risk benefit liability (k) 17.6 Discounted cash flow analysis Surrender rates 1.28% - 11.05% (3.45%) Utilization rates 5.92% - 47.62% (22.54%) Embedded derivatives related to fixed indexed annuity products (classified as policyholder account liabilities) (j) 1,347.9 Discounted projected embedded derivatives Projected portfolio yields 4.30% - 4.63% (4.31%) Discount rates 3.47% - 5.33% (4.13%) Surrender rates 1.90% - 27.70% (9.20%) ________________________________ (a) The weighted average is based on the relative fair value of the related assets or liabilities. (b) Corporate securities - The significant unobservable input used in the fair value measurement of our corporate securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would have resulted in a significantly lower (higher) fair value measurement. (c) Corporate securities - The significant unobservable input used in the fair value measurement of these corporate securities is percentage of recovery expected. Significant increases (decreases) in percentage of recovery expected in isolation would have resulted in a significantly higher (lower) fair value measurement. (d) Corporate securities - For these assets, there were no adjustments to the purchase price. (e) Asset-backed securities - The significant unobservable input used in the fair value measurement of these asset-backed securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would have resulted in a significantly lower (higher) fair value measurement. (f) Equity securities - The significant unobservable input used in the fair value measurement of these equity securities is multiples of earnings before interest, taxes, depreciation and amortization ("EBITDA"). Generally, increases (decreases) in the EBITDA multiples would result in higher (lower) fair value measurements. (g) Equity securities - The significant unobservable input used in the fair value measurement of these equity securities is percentage of recovery expected. Significant increases (decreases) in percentage of recovery expected in isolation would have resulted in a significantly higher (lower) fair value measurement. (h) Equity securities - For these assets, there were no adjustments to the purchase price. (i) Other assets categorized as Level 3 - For these assets, there were no adjustments to non-binding quoted market prices obtained from third-party pricing sources. (j) Embedded derivatives related to fixed indexed annuity products (classified as policyholder account liabilities) - The significant unobservable inputs used in the fair value measurement of our embedded derivatives associated with fixed indexed annuity products are projected portfolio yields, discount rates and surrender rates. Increases (decreases) in projected portfolio yields in isolation would have resulted in a higher (lower) fair value measurement. The discount rate is based on risk free rates (U.S. Treasury rates for similar durations) adjusted for our non-performance risk and risk margins for non-capital market inputs. Increases (decreases) in the discount rates would have resulted in a lower (higher) fair value measurement. Assumed surrender rates are used to project how long the contracts remain in force. Generally, the longer the contracts are assumed to be in force the higher the fair value of the embedded derivative. (k) Market risk benefits – Many of our fixed indexed annuity products include a GLWB that is considered a MRB. The calculation of the value of MRBs are based on significant unobservable inputs including assumptions related to surrenders and utilization of policy benefits. These assumptions are based on actuarial estimates and past experience. Increases in assumed surrender rates would generally increase the value of a MRB asset or decrease the value of a MRB liability (with decreases in assumed surrender rates having the opposite impacts). Increases in utilization rates would generally decrease the value of a MRB asset or increase the value of a MRB liability (with decreases in utilization rates having the opposite impacts). The following table provides additional information about the significant unobservable (Level 3) inputs developed internally by the Company to determine fair value for certain assets and liabilities carried at fair value at December 31, 2022 (dollars in millions): Fair value at December 31, 2022 Valuation techniques Unobservable inputs Range (weighted average) (a) Assets: Corporate securities (b) $ 2.9 Discounted cash flow analysis Discount margins 2.23% - 3.94% (2.25%) Corporate securities (c) 3.5 Recovery method Percent of recovery expected 0.00% - 35.00% (35.00%) Corporate securities (d) .5 Unadjusted purchase price Not applicable Not applicable Asset-backed securities (e) 21.8 Discounted cash flow analysis Discount margins 2.50% - 3.86% (3.30%) Equity securities (f) 63.9 Market comparables EBITDA multiples 8.5X Equity securities (g) .1 Recovery method Percent of recovery expected 0.00% - 100.00% (100.00%) Equity securities (h) 11.7 Unadjusted purchase price Not applicable Not applicable Other assets categorized as Level 3 (i) 249.0 Unadjusted third-party price source Not applicable Not applicable Market risk benefit asset (k) 65.3 Discounted cash flow analysis Surrender rates 1.28% - 11.05% (3.68%) Utilization rates 6.78% - 63.16% (20.09%) Total 418.7 Liabilities: Market risk benefit liability (k) 11.3 Discounted cash flow analysis Surrender rates 1.28% - 11.05% (3.68%) Utilization rates 6.78% - 63.16% (20.09%) Embedded derivatives related to fixed indexed annuity products (classified as policyholder account liabilities) (j) 1,297.0 Discounted projected embedded derivatives Projected portfolio yields 4.30% - 4.63% (4.31%) Discount rates 3.77% - 5.48% (4.47%) Surrender rates 1.90% - 27.70% (9.20%) ________________________________ (a) The weighted average is based on the relative fair value of the related assets or liabilities. (b) Corporate securities - The significant unobservable input used in the fair value measurement of our corporate securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would have resulted in a significantly lower (higher) fair value measurement. (c) Corporate securities - The significant unobservable input used in the fair value measurement of these corporate securities is percentage of recovery expected. Significant increases (decreases) in percentage of recovery expected in isolation would have resulted in a significantly higher (lower) fair value measurement. (d) Corporate securities - For these assets, there were no adjustments to the purchase price. (e) Asset-backed securities - The significant unobservable input used in the fair value measurement of these asset-backed securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would have resulted in a significantly lower (higher) fair value measurement. (f) Equity securities - The significant unobservable input used in the fair value measurement of these equity securities is multiples of earnings before EBITDA. Generally, increases (decreases) in the EBITDA multiples would result in higher (lower) fair value measurements. (g) Equity securities - The significant unobservable input used in the fair value measurement of these equity securities is percentage of recovery expected. Significant increases (decreases) in percentage of recovery expected in isolation would have resulted in a significantly higher (lower) fair value measurement. (h) Equity securities - For these assets, there were no adjustments to the purchase price. (i) Other assets categorized as Level 3 - For these assets, there were no adjustments to non-binding quoted market prices obtained from third-party pricing sources. (j) Embedded derivatives related to fixed indexed annuity products (classified as policyholder account liabilities) - The significant unobservable inputs used in the fair value measurement of our embedded derivatives associated with fixed indexed annuity products are projected portfolio yields, discount rates and surrender rates. Increases (decreases) in projected portfolio yields in isolation would have resulted in a higher (lower) fair value measurement. The discount rate is based on risk free rates (U.S. Treasury rates for similar durations) adjusted for our non-performance risk and risk margins for non-capital market inputs. Increases (decreases) in the discount rates would have resulted in a lower (higher) fair value measurement. Assumed surrender rates are used to project how long the contracts remain in force. Generally, the longer the contracts are assumed to be in force the higher the fair value of the embedded derivative. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Millions | Mar. 31, 2023 USD ($) |
Accounting Policies [Abstract] | |
Deferred profit liability | $ 57.7 |
RECENTLY ADOPTED ACCOUNTING S_3
RECENTLY ADOPTED ACCOUNTING STANDARDS - Impact of Adoption Transition (Details) - USD ($) $ in Millions | 3 Months Ended | |||||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2021 | Dec. 31, 2020 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Present value of future profits | $ 197.6 | $ 223.2 | $ 203.7 | $ 230.1 | $ 259.6 | $ 249.4 |
Deferred acquisition costs | 1,811.3 | 1,770.9 | 1,485.8 | 1,027.8 | ||
Reinsurance receivables | 4,189.6 | 4,223.4 | 4,584.3 | |||
Market risk benefit asset | 57.8 | 16.9 | 65.3 | 2.5 | 0 | |
Income tax assets, net | 988.1 | 1,063.4 | 806.4 | 199.4 | ||
Total assets | 34,015 | 33,133.1 | 35,339.9 | |||
Policyholder account balances | 15,302.9 | 14,725.6 | 15,234.2 | 12,367.7 | 12,540.6 | |
Future policy benefits | 11,623.3 | 11,240.2 | 15,704.9 | 11,744.2 | ||
Market risk benefit liability | 17.6 | 63.8 | 11.3 | 114.8 | 0 | |
Liability for life insurance policy claims | 67.6 | 64.1 | 561.8 | |||
Total liabilities | 31,983.2 | 31,364.3 | 29,855.7 | |||
Retained earnings | 1,674 | 1,293 | 1,691.2 | 752.3 | ||
Accumulated other comprehensive income | (1,664.4) | (561.5) | (1,957.3) | 2,186.1 | ||
Total shareholders' equity | 2,031.8 | 2,818.4 | 1,768.8 | $ 3,684.7 | $ 5,484.2 | |
Insurance policy benefits | 609.7 | 333.9 | ||||
Liability for future policy benefits remeasurement loss | (0.6) | (7) | ||||
Change in fair value of market risk benefits | 14.8 | (32.7) | ||||
Amortization | 55.5 | 52.3 | ||||
Other operating costs and expenses | 271.7 | 218.3 | ||||
Total benefits and expenses | 1,007 | 602.6 | ||||
Income before income taxes | (1) | 240.3 | ||||
Income tax expense (benefit) on period income (loss) | (0.2) | 56.9 | ||||
Net income (loss) | $ (0.8) | 183.4 | ||||
Amount prior to adoption of ASU 2018-12 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Present value of future profits | 212.2 | 249.4 | ||||
Deferred acquisition costs | 1,913.4 | 1,027.8 | ||||
Reinsurance receivables | 4,241.7 | |||||
Market risk benefit asset | 0 | 0 | ||||
Income tax assets, net | 1,165.5 | 199.4 | ||||
Total assets | 33,339.2 | |||||
Policyholder account balances | 14,858.3 | 12,540.6 | ||||
Future policy benefits | 11,809.1 | 11,744.2 | ||||
Market risk benefit liability | 0 | 0 | ||||
Liability for life insurance policy claims | 456.5 | |||||
Total liabilities | 31,938.4 | |||||
Retained earnings | 1,223.5 | 1,459 | ||||
Accumulated other comprehensive income | 380.5 | (2,093.1) | ||||
Total shareholders' equity | 3,690.9 | 1,400.8 | ||||
Insurance policy benefits | 346.7 | |||||
Liability for future policy benefits remeasurement loss | 0 | |||||
Change in fair value of market risk benefits | 0 | |||||
Amortization | 103.9 | |||||
Other operating costs and expenses | 219.2 | |||||
Total benefits and expenses | 693.6 | |||||
Income before income taxes | 149.3 | |||||
Income tax expense (benefit) on period income (loss) | 37 | |||||
Net income (loss) | 112.3 | |||||
Effect of adoption | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Present value of future profits | (8.5) | |||||
Deferred acquisition costs | (142.5) | |||||
Reinsurance receivables | (18.3) | |||||
Market risk benefit asset | 65.3 | |||||
Income tax assets, net | (102.1) | |||||
Total assets | (206.1) | |||||
Policyholder account balances | 375.9 | |||||
Future policy benefits | (568.9) | |||||
Market risk benefit liability | 11.3 | |||||
Liability for life insurance policy claims | (392.4) | |||||
Total liabilities | (574.1) | |||||
Retained earnings | 69.5 | 232.2 | ||||
Accumulated other comprehensive income | (942) | 135.8 | ||||
Total shareholders' equity | (872.5) | 368 | ||||
Insurance policy benefits | (12.8) | |||||
Liability for future policy benefits remeasurement loss | 7 | |||||
Change in fair value of market risk benefits | (32.7) | |||||
Amortization | (51.6) | |||||
Other operating costs and expenses | (0.9) | |||||
Total benefits and expenses | (91) | |||||
Income before income taxes | 91 | |||||
Income tax expense (benefit) on period income (loss) | 19.9 | |||||
Net income (loss) | 71.1 | |||||
Effect of adoption | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Present value of future profits | 10.2 | |||||
Deferred acquisition costs | 458 | |||||
Reinsurance receivables | 144.1 | |||||
Market risk benefit asset | 2.5 | |||||
Income tax assets, net | 607 | |||||
Total assets | 1,221.8 | |||||
Policyholder account balances | (172.9) | |||||
Future policy benefits | 3,960.7 | |||||
Market risk benefit liability | 114.8 | |||||
Liability for life insurance policy claims | (470.1) | |||||
Total liabilities | 3,432.5 | |||||
Retained earnings | (130.9) | |||||
Accumulated other comprehensive income | (2,079.8) | |||||
Total shareholders' equity | (2,210.7) | |||||
As recast | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Present value of future profits | 203.7 | 259.6 | ||||
Deferred acquisition costs | 1,770.9 | 1,485.8 | ||||
Reinsurance receivables | 4,223.4 | 4,728.4 | ||||
Market risk benefit asset | 65.3 | 2.5 | ||||
Income tax assets, net | 1,063.4 | 806.4 | ||||
Total assets | 33,133.1 | 36,561.7 | ||||
Policyholder account balances | 15,234.2 | 12,367.7 | ||||
Future policy benefits | 11,240.2 | 15,704.9 | ||||
Market risk benefit liability | 11.3 | 114.8 | ||||
Liability for life insurance policy claims | 64.1 | 91.7 | ||||
Total liabilities | 31,364.3 | 33,288.2 | ||||
Retained earnings | 1,691.2 | 621.4 | ||||
Accumulated other comprehensive income | (1,957.3) | 106.3 | ||||
Total shareholders' equity | $ 1,768.8 | $ 3,273.5 | ||||
Insurance policy benefits | 333.9 | |||||
Liability for future policy benefits remeasurement loss | 7 | |||||
Change in fair value of market risk benefits | (32.7) | |||||
Amortization | 52.3 | |||||
Other operating costs and expenses | 218.3 | |||||
Total benefits and expenses | 602.6 | |||||
Income before income taxes | 240.3 | |||||
Income tax expense (benefit) on period income (loss) | 56.9 | |||||
Net income (loss) | $ 183.4 |
RECENTLY ADOPTED ACCOUNTING S_4
RECENTLY ADOPTED ACCOUNTING STANDARDS - Transition Adjustments (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2021 | Dec. 31, 2020 |
Present value of future profits | ||||||
Balance | $ 197.6 | $ 203.7 | $ 223.2 | $ 230.1 | $ 259.6 | $ 249.4 |
Deferred acquisition costs | ||||||
Balance | 1,811.3 | 1,770.9 | 1,485.8 | 1,027.8 | ||
Reinsurance receivables | ||||||
Balance | 4,728.4 | |||||
Market risk benefit asset | ||||||
Market risk benefit asset | 57.8 | 65.3 | 16.9 | 2.5 | 0 | |
Income tax assets, net | ||||||
Balance | 988.1 | 1,063.4 | 806.4 | 199.4 | ||
Policyholder Account Balance [Abstract] | ||||||
Balance | 15,302.9 | 15,234.2 | 14,725.6 | 12,367.7 | 12,540.6 | |
Future policy benefits | ||||||
Future policy benefits | 11,623.3 | 11,240.2 | 15,704.9 | 11,744.2 | ||
Market risk benefit liability | ||||||
Market risk benefit liability | 17.6 | 11.3 | 63.8 | 114.8 | 0 | |
Liability for policy and contract claims | ||||||
Balance | 91.7 | |||||
Statement of Stockholders' Equity [Abstract] | ||||||
Total shareholders' equity | 2,031.8 | 1,768.8 | 2,818.4 | 3,684.7 | $ 5,484.2 | |
Accumulated other comprehensive income (loss) | ||||||
Statement of Stockholders' Equity [Abstract] | ||||||
Total shareholders' equity | (1,664.4) | (1,957.3) | (561.5) | 373.7 | 106.3 | |
Retained earnings | ||||||
Statement of Stockholders' Equity [Abstract] | ||||||
Total shareholders' equity | $ 1,674 | 1,691.2 | 1,293 | $ 1,125.6 | 621.4 | |
Amount prior to adoption of ASU 2018-12 | ||||||
Present value of future profits | ||||||
Balance | 212.2 | 249.4 | ||||
Deferred acquisition costs | ||||||
Balance | 1,913.4 | 1,027.8 | ||||
Reinsurance receivables | ||||||
Balance | 4,584.3 | |||||
Market risk benefit asset | ||||||
Market risk benefit asset | 0 | 0 | ||||
Income tax assets, net | ||||||
Balance | 1,165.5 | 199.4 | ||||
Policyholder Account Balance [Abstract] | ||||||
Balance | 14,858.3 | 12,540.6 | ||||
Future policy benefits | ||||||
Future policy benefits | 11,809.1 | 11,744.2 | ||||
Market risk benefit liability | ||||||
Market risk benefit liability | 0 | 0 | ||||
Liability for policy and contract claims | ||||||
Balance | 561.8 | |||||
Statement of Stockholders' Equity [Abstract] | ||||||
Total shareholders' equity | 1,400.8 | 3,690.9 | ||||
Amount prior to adoption of ASU 2018-12 | Accumulated other comprehensive income (loss) | ||||||
Statement of Stockholders' Equity [Abstract] | ||||||
Total shareholders' equity | 2,186.1 | |||||
Amount prior to adoption of ASU 2018-12 | Retained earnings | ||||||
Statement of Stockholders' Equity [Abstract] | ||||||
Total shareholders' equity | 752.3 | |||||
Effect of adoption | ||||||
Present value of future profits | ||||||
Balance | (8.5) | |||||
Unwinding amounts related to unrealized gains (losses) | 10.2 | |||||
Deferred acquisition costs | ||||||
Balance | (142.5) | |||||
Unwinding amounts related to unrealized gains (losses) | 458 | |||||
Reinsurance receivables | ||||||
Changes in measurement of assets | (81.6) | |||||
Change in discount rates | 225.7 | |||||
Market risk benefit asset | ||||||
Market risk benefit asset | 65.3 | |||||
Changes in market benefit reserve basis | 2.5 | |||||
Income tax assets, net | ||||||
Balance | (102.1) | |||||
Tax impacts of changes recognized in accumulated other comprehensive income | 570.3 | |||||
Tax impacts of changes recognized in retained earnings | 36.7 | |||||
Policyholder Account Balance [Abstract] | ||||||
Balance | 375.9 | |||||
Changes in classification of liabilities | (172.9) | |||||
Future policy benefits | ||||||
Future policy benefits | (568.9) | |||||
Unwinding amounts related to unrealized gains (losses) | (197.5) | |||||
Changes in remeasurement of future policy benefits | 31.1 | |||||
Changes in classification of liabilities | 643 | |||||
Reclass to market risk benefit liability | (66.6) | |||||
Change in discount rates | 3,550.7 | |||||
Market risk benefit liability | ||||||
Market risk benefit liability | 11.3 | |||||
Reclass to market risk benefit liability | 66.6 | |||||
Changes in market risk benefit reserve basis | 48.2 | |||||
Liability for policy and contract claims | ||||||
Changes in classification of liabilities | (470.1) | |||||
Statement of Stockholders' Equity [Abstract] | ||||||
Total shareholders' equity | $ 368 | $ (872.5) | ||||
Effect of adoption | Accumulated other comprehensive income (loss) | ||||||
Statement of Stockholders' Equity [Abstract] | ||||||
Unwinding amounts related to unrealized gains (losses) | 665.7 | |||||
Changes in measurement of assets and liabilities | 0 | |||||
Change in market risk benefit reserve basis | 9.2 | |||||
Tax impacts of changes recognized in retained earnings | 0 | |||||
Change in discount rates | (3,325) | |||||
Tax impacts of changes recognized in accumulated other comprehensive income | 570.3 | |||||
Effect of adoption | Retained earnings | ||||||
Statement of Stockholders' Equity [Abstract] | ||||||
Unwinding amounts related to unrealized gains (losses) | 0 | |||||
Changes in measurement of assets and liabilities | (112.7) | |||||
Change in market risk benefit reserve basis | (54.9) | |||||
Tax impacts of changes recognized in retained earnings | 36.7 | |||||
Change in discount rates | 0 | |||||
Tax impacts of changes recognized in accumulated other comprehensive income | $ 0 |
INVESTMENTS - SCHEDULE OF UNREA
INVESTMENTS - SCHEDULE OF UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS INCLUDED IN ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2020 |
Investments, Debt and Equity Securities [Abstract] | ||||
Net unrealized losses on investments having no allowance for credit losses | $ (937.1) | $ (1,247) | ||
Unrealized losses on investments with an allowance for credit losses | (1,453.6) | (1,780.7) | ||
Change in discount rates for liability for future policy benefits | 237.4 | 500.7 | ||
Change in instrument-specific credit risk for market risk benefits | 13.1 | 12.2 | ||
Deferred income tax assets | 475.8 | 557.5 | ||
Accumulated other comprehensive loss | $ (1,664.4) | $ (1,957.3) | $ (561.5) | $ 2,186.1 |
INVESTMENTS - SCHEDULE OF AMORT
INVESTMENTS - SCHEDULE OF AMORTIZED COST, GROSS UNREALIZED GAINS AND LOSSES, ESTIMATED FAIR VALUE, AND ALLOWANCE FOR CREDIT LOSSES (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale [Line Items] | ||||
Amortized cost | $ 23,517.9 | $ 23,384.2 | ||
Allowance for credit losses | (59.1) | (56) | $ (36.6) | $ (7.6) |
Estimated fair value | 21,107.1 | 20,353.4 | ||
Corporate securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Amortized cost | 13,497 | 13,649.1 | ||
Gross unrealized gains | 66.3 | 29.9 | ||
Gross unrealized losses | (1,529.7) | (1,911.9) | ||
Allowance for credit losses | (57.2) | (54.4) | (35.6) | (7.4) |
Estimated fair value | 11,976.4 | 11,712.7 | ||
United States Treasury securities and obligations of United States government corporations and agencies | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Amortized cost | 174.7 | 171.7 | ||
Gross unrealized gains | 0.1 | 0 | ||
Gross unrealized losses | (4.7) | (13) | ||
Allowance for credit losses | 0 | 0 | ||
Estimated fair value | 170.1 | 158.7 | ||
States and political subdivisions | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Amortized cost | 2,789.4 | 2,846.9 | ||
Gross unrealized gains | 34.1 | 19.3 | ||
Gross unrealized losses | (360.1) | (476.8) | ||
Allowance for credit losses | (0.8) | (0.9) | (0.8) | 0 |
Estimated fair value | 2,462.6 | 2,388.5 | ||
Foreign governments | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Amortized cost | 88.8 | 86.3 | ||
Gross unrealized gains | 0.2 | 0.1 | ||
Gross unrealized losses | (9.9) | (11.3) | ||
Allowance for credit losses | (0.5) | (0.4) | (0.1) | (0.2) |
Estimated fair value | 78.6 | 74.7 | ||
Asset-backed securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Amortized cost | 1,458.6 | 1,435.7 | ||
Gross unrealized gains | 2.4 | 1 | ||
Gross unrealized losses | (120.2) | (149.4) | ||
Allowance for credit losses | (0.6) | (0.3) | $ (0.1) | $ 0 |
Estimated fair value | 1,340.2 | 1,287 | ||
Agency residential mortgage-backed securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Amortized cost | 213.3 | 174.3 | ||
Gross unrealized gains | 2.8 | 1.4 | ||
Gross unrealized losses | (0.2) | (0.7) | ||
Allowance for credit losses | 0 | 0 | ||
Estimated fair value | 215.9 | 175 | ||
Non-agency residential mortgage-backed securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Amortized cost | 1,778.2 | 1,700.4 | ||
Gross unrealized gains | 37.2 | 40 | ||
Gross unrealized losses | (174.9) | (191.9) | ||
Allowance for credit losses | 0 | 0 | ||
Estimated fair value | 1,640.5 | 1,548.5 | ||
Collateralized loan obligations | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Amortized cost | 954.3 | 825.2 | ||
Gross unrealized gains | 0.5 | 0.3 | ||
Gross unrealized losses | (35.9) | (39.6) | ||
Allowance for credit losses | 0 | 0 | ||
Estimated fair value | 918.9 | 785.9 | ||
Commercial mortgage-backed securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Amortized cost | 2,563.6 | 2,494.6 | ||
Gross unrealized gains | 0.1 | 0.1 | ||
Gross unrealized losses | (259.8) | (272.3) | ||
Allowance for credit losses | 0 | 0 | ||
Estimated fair value | 2,303.9 | 2,222.4 | ||
Total fixed maturities, available for sale | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Amortized cost | 23,517.9 | 23,384.2 | ||
Gross unrealized gains | 143.7 | 92.1 | ||
Gross unrealized losses | (2,495.4) | (3,066.9) | ||
Allowance for credit losses | (59.1) | (56) | ||
Estimated fair value | $ 21,107.1 | $ 20,353.4 |
INVESTMENTS - SUMMARY OF INVEST
INVESTMENTS - SUMMARY OF INVESTMENTS BY CONTRACTUAL MATURITY (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Amortized cost | ||
Due in one year or less | $ 140.1 | $ 112 |
Due after one year through five years | 2,209.3 | 1,913.7 |
Due after five years through ten years | 1,871.8 | 2,098.9 |
Due after ten years | 12,328.7 | 12,629.4 |
Subtotal | 16,549.9 | 16,754 |
Structured securities | 6,968 | 6,630.2 |
Amortized cost | 23,517.9 | 23,384.2 |
Estimated fair value | ||
Due in one year or less | 138.7 | 110.8 |
Due after one year through five years | 2,080 | 1,790.2 |
Due after five years through ten years | 1,742.8 | 1,910.4 |
Due after ten years | 10,726.2 | 10,523.2 |
Subtotal | 14,687.7 | 14,334.6 |
Structured securities | 6,419.4 | 6,018.8 |
Estimated fair value | $ 21,107.1 | $ 20,353.4 |
INVESTMENTS - SUMMARY OF INVE_2
INVESTMENTS - SUMMARY OF INVESTMENTS WITH UNREALIZED LOSSES BY INVESTMENT CATEGORY (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Fair value | ||
Less than 12 months | $ 3,088.7 | $ 7,636.9 |
12 months or greater | 6,207.4 | 1,897.5 |
Total | 9,296.1 | 9,534.4 |
Unrealized losses | ||
Less than 12 months | (108.6) | (835.2) |
12 months or greater | (950.9) | (471.6) |
Total | (1,059.5) | (1,306.8) |
Corporate securities | ||
Fair value | ||
Less than 12 months | 973.1 | 2,830.8 |
12 months or greater | 1,979.4 | 370.4 |
Total | 2,952.5 | 3,201.2 |
Unrealized losses | ||
Less than 12 months | (35.5) | (329.4) |
12 months or greater | (322.6) | (129.3) |
Total | (358.1) | (458.7) |
United States Treasury securities and obligations of United States government corporations and agencies | ||
Fair value | ||
Less than 12 months | 106.8 | 134.4 |
12 months or greater | 33.7 | 21.9 |
Total | 140.5 | 156.3 |
Unrealized losses | ||
Less than 12 months | (1.2) | (9.6) |
12 months or greater | (3.5) | (3.4) |
Total | (4.7) | (13) |
States and political subdivisions | ||
Fair value | ||
Less than 12 months | 207.5 | 667 |
12 months or greater | 397.4 | 132.1 |
Total | 604.9 | 799.1 |
Unrealized losses | ||
Less than 12 months | (11.2) | (124.8) |
12 months or greater | (97.1) | (58.5) |
Total | (108.3) | (183.3) |
Foreign governments | ||
Fair value | ||
Less than 12 months | 15.2 | 35 |
12 months or greater | 13.3 | 2.1 |
Total | 28.5 | 37.1 |
Unrealized losses | ||
Less than 12 months | (0.3) | (3.5) |
12 months or greater | (1.2) | (0.3) |
Total | (1.5) | (3.8) |
Asset-backed securities | ||
Fair value | ||
Less than 12 months | 388.9 | 914 |
12 months or greater | 775 | 258.1 |
Total | 1,163.9 | 1,172.1 |
Unrealized losses | ||
Less than 12 months | (12.9) | (90.1) |
12 months or greater | (103.2) | (53.4) |
Total | (116.1) | (143.5) |
Agency residential mortgage-backed securities | ||
Fair value | ||
Less than 12 months | 33.4 | 59.7 |
12 months or greater | 0.6 | 0 |
Total | 34 | 59.7 |
Unrealized losses | ||
Less than 12 months | (0.2) | (0.7) |
12 months or greater | 0 | 0 |
Total | (0.2) | (0.7) |
Non-agency residential mortgage-backed securities | ||
Fair value | ||
Less than 12 months | 560.9 | 861.6 |
12 months or greater | 718 | 335.4 |
Total | 1,278.9 | 1,197 |
Unrealized losses | ||
Less than 12 months | (27.1) | (89.7) |
12 months or greater | (147.8) | (102.2) |
Total | (174.9) | (191.9) |
Collateralized loan obligations | ||
Fair value | ||
Less than 12 months | 282.6 | 553 |
12 months or greater | 551.7 | 184.2 |
Total | 834.3 | 737.2 |
Unrealized losses | ||
Less than 12 months | (6.5) | (27.4) |
12 months or greater | (29.4) | (12.2) |
Total | (35.9) | (39.6) |
Commercial mortgage-backed securities | ||
Fair value | ||
Less than 12 months | 520.3 | 1,581.4 |
12 months or greater | 1,738.3 | 593.3 |
Total | 2,258.6 | 2,174.7 |
Unrealized losses | ||
Less than 12 months | (13.7) | (160) |
12 months or greater | (246.1) | (112.3) |
Total | $ (259.8) | $ (272.3) |
INVESTMENTS - SUMMARY OF CHANGE
INVESTMENTS - SUMMARY OF CHANGES IN THE ALLOWANCE FOR CURRENT EXPECTED CREDIT LOSSES (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Debt Securities, Available-for-sale, Allowance for Credit Loss [Roll Forward] | ||
Allowance at the beginning of the period | $ 56 | $ 7.6 |
Additions for securities for which credit losses were not previously recorded | 3 | 14.4 |
Additions for purchased securities with deteriorated credit | 0 | 0 |
Additions (reductions) for securities where an allowance was previously recorded | 0.8 | 15 |
Reduction for securities sold during the period | (0.7) | (0.4) |
Reduction for securities for which the Company made the decision to sell where an allowance was previously recorded | 0 | 0 |
Write-offs | 0 | 0 |
Recoveries of previously written-off amount | 0 | 0 |
Allowance at the end of the period | 59.1 | 36.6 |
Corporate securities | ||
Debt Securities, Available-for-sale, Allowance for Credit Loss [Roll Forward] | ||
Allowance at the beginning of the period | 54.4 | 7.4 |
Additions for securities for which credit losses were not previously recorded | 3 | 14 |
Additions for purchased securities with deteriorated credit | 0 | 0 |
Additions (reductions) for securities where an allowance was previously recorded | 0.5 | 14.6 |
Reduction for securities sold during the period | (0.7) | (0.4) |
Reduction for securities for which the Company made the decision to sell where an allowance was previously recorded | 0 | 0 |
Write-offs | 0 | 0 |
Recoveries of previously written-off amount | 0 | 0 |
Allowance at the end of the period | 57.2 | 35.6 |
States and political subdivisions | ||
Debt Securities, Available-for-sale, Allowance for Credit Loss [Roll Forward] | ||
Allowance at the beginning of the period | 0.9 | 0 |
Additions for securities for which credit losses were not previously recorded | 0 | 0.3 |
Additions for purchased securities with deteriorated credit | 0 | 0 |
Additions (reductions) for securities where an allowance was previously recorded | (0.1) | 0.5 |
Reduction for securities sold during the period | 0 | 0 |
Reduction for securities for which the Company made the decision to sell where an allowance was previously recorded | 0 | 0 |
Write-offs | 0 | 0 |
Recoveries of previously written-off amount | 0 | 0 |
Allowance at the end of the period | 0.8 | 0.8 |
Foreign governments | ||
Debt Securities, Available-for-sale, Allowance for Credit Loss [Roll Forward] | ||
Allowance at the beginning of the period | 0.4 | 0.2 |
Additions for securities for which credit losses were not previously recorded | 0 | 0.1 |
Additions for purchased securities with deteriorated credit | 0 | 0 |
Additions (reductions) for securities where an allowance was previously recorded | 0.1 | (0.2) |
Reduction for securities sold during the period | 0 | 0 |
Reduction for securities for which the Company made the decision to sell where an allowance was previously recorded | 0 | 0 |
Write-offs | 0 | 0 |
Recoveries of previously written-off amount | 0 | 0 |
Allowance at the end of the period | 0.5 | 0.1 |
Asset-backed securities | ||
Debt Securities, Available-for-sale, Allowance for Credit Loss [Roll Forward] | ||
Allowance at the beginning of the period | 0.3 | 0 |
Additions for securities for which credit losses were not previously recorded | 0 | 0 |
Additions for purchased securities with deteriorated credit | 0 | 0 |
Additions (reductions) for securities where an allowance was previously recorded | 0.3 | 0.1 |
Reduction for securities sold during the period | 0 | 0 |
Reduction for securities for which the Company made the decision to sell where an allowance was previously recorded | 0 | 0 |
Write-offs | 0 | 0 |
Recoveries of previously written-off amount | 0 | 0 |
Allowance at the end of the period | $ 0.6 | $ 0.1 |
INVESTMENTS - NARRATIVE (Detail
INVESTMENTS - NARRATIVE (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 USD ($) investment loan mortgage_loan | Mar. 31, 2022 USD ($) | |
Debt Securities, Available-for-sale [Line Items] | ||
Net realized investment gains (losses) | $ (14.6) | $ (32.7) |
Change in allowance for credit losses | $ 1.5 | 30.7 |
Number of investments in default or considered nonperforming | investment | 0 | |
Value of available for sale securities sold | $ 288.5 | 786.6 |
Total fixed maturities, available for sale | ||
Debt Securities, Available-for-sale [Line Items] | ||
Gross realized losses on sale | 14.4 | 30.6 |
Embedded Derivative Related to Fixed Maturity Securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Change in fair value of certain investments with embedded derivatives | (4) | (13.1) |
Reinsurance Contract | Coinsurance | ||
Debt Securities, Available-for-sale [Line Items] | ||
Change in fair value of certain investments with embedded derivatives | 1.4 | (6.5) |
Marketable Securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Net realized investment gains (losses) | (10.8) | 23.5 |
Equity Securities - Corporate Securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Net realized investment gains (losses) | 0.3 | (5.9) |
Commercial mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Gross realized losses on sale | 2.2 | |
Corporate Securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Gross realized losses on sale | 11.1 | 14.6 |
Non-agency residential mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Gross realized losses on sale | 9.8 | |
States and political subdivisions | ||
Debt Securities, Available-for-sale [Line Items] | ||
Gross realized losses on sale | 4.2 | |
Various Other Investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Gross realized losses on sale | 1.1 | $ 2 |
Carrying Value | Residential Mortgage | ||
Debt Securities, Available-for-sale [Line Items] | ||
Mortgage loans | 409.4 | |
Fair Value | Residential Mortgage | ||
Debt Securities, Available-for-sale [Line Items] | ||
Mortgage loans | $ 407.2 | |
Commercial Portfolio Segment | ||
Debt Securities, Available-for-sale [Line Items] | ||
Number of mortgage loans in process of foreclosure | mortgage_loan | 0 | |
Carrying value of loans | $ 1,275.1 | |
Residential Portfolio Segment | Financial Asset, Past Due | ||
Debt Securities, Available-for-sale [Line Items] | ||
Number of mortgage loans noncurrent | loan | 4 | |
Carrying value of loans | $ 1.1 | |
Residential Portfolio Segment | Foreclosure | Financial Asset, Past Due | ||
Debt Securities, Available-for-sale [Line Items] | ||
Number of mortgage loans noncurrent | loan | 2 | |
Carrying value of loans | $ 0.5 |
INVESTMENTS - SUMMARY OF CARRYI
INVESTMENTS - SUMMARY OF CARRYING VALUE AND ESTIMATED FAIR VALUE OF OUTSTANDING COMMERCIAL MORTGAGE LOANS AND UNDERLYING COLLATERAL (Details) $ in Millions | Mar. 31, 2023 USD ($) |
Less than 60% | Maximum | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
Outstanding Mortgage Loans, Loan to Value Ratio | 60% |
60% to less than 70% | Maximum | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
Outstanding Mortgage Loans, Loan to Value Ratio | 70% |
60% to less than 70% | Minimum | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
Outstanding Mortgage Loans, Loan to Value Ratio | 60% |
70% to less than 80% | Maximum | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
Outstanding Mortgage Loans, Loan to Value Ratio | 80% |
70% to less than 80% | Minimum | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
Outstanding Mortgage Loans, Loan to Value Ratio | 70% |
80% to less than 90% | Maximum | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
Outstanding Mortgage Loans, Loan to Value Ratio | 90% |
80% to less than 90% | Minimum | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
Outstanding Mortgage Loans, Loan to Value Ratio | 80% |
Debt-To-Value Ratio, Greater Than 90 Percent | Minimum | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
Outstanding Mortgage Loans, Loan to Value Ratio | 90% |
Commercial Portfolio Segment | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2023 | $ 73.6 |
2022 | 313.8 |
2021 | 150.7 |
2020 | 43.1 |
2019 | 75.1 |
Prior | 618.8 |
Total amortized cost | 1,275.1 |
Mortgage loans | 1,150.3 |
Collateral | 3,987.1 |
Commercial Portfolio Segment | Less than 60% | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2023 | 73.6 |
2022 | 178.7 |
2021 | 114.4 |
2020 | 37.4 |
2019 | 75.1 |
Prior | 494.2 |
Total amortized cost | 973.4 |
Mortgage loans | 884.3 |
Collateral | 3,553.3 |
Commercial Portfolio Segment | 60% to less than 70% | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2023 | 0 |
2022 | 87.3 |
2021 | 26.2 |
2020 | 5.7 |
2019 | 0 |
Prior | 56.8 |
Total amortized cost | 176 |
Mortgage loans | 159.7 |
Collateral | 269.3 |
Commercial Portfolio Segment | 70% to less than 80% | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2023 | 0 |
2022 | 47.8 |
2021 | 10.1 |
2020 | 0 |
2019 | 0 |
Prior | 43.2 |
Total amortized cost | 101.1 |
Mortgage loans | 86.8 |
Collateral | 138.4 |
Commercial Portfolio Segment | 80% to less than 90% | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2023 | 0 |
2022 | 0 |
2021 | 0 |
2020 | 0 |
2019 | 0 |
Prior | 0 |
Total amortized cost | 0 |
Mortgage loans | 0 |
Collateral | 0 |
Commercial Portfolio Segment | 90% or greater | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2023 | 0 |
2022 | 0 |
2021 | 0 |
2020 | 0 |
2019 | 0 |
Prior | 24.6 |
Total amortized cost | 24.6 |
Mortgage loans | 19.5 |
Collateral | $ 26.1 |
INVESTMENTS - SUMMARY OF CHAN_2
INVESTMENTS - SUMMARY OF CHANGES IN THE ALLOWANCE FOR CURRENT EXPECTED CREDIT LOSSES RELATED TO MORTGAGE LOANS (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Allowance for credit losses at beginning of period | $ 8 | $ 5.6 |
Current period provision for expected credit losses | 0.4 | (0.5) |
Initial allowance recognized for purchased financial assets with credit deterioration | 0 | 0 |
Write-offs charged against the allowance | 0 | 0 |
Recoveries of amounts previously written off | 0 | 0 |
Allowance for credit losses at end of period | $ 8.4 | $ 5.1 |
INVESTMENTS - TOTAL INVESTMENT
INVESTMENTS - TOTAL INVESTMENT GAINS (LOSSES) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Realized investment gains (losses): | ||
Total realized investment gains (losses) | $ (14.6) | $ 18.8 |
Change in allowance for credit losses | (1.5) | (30.7) |
Change in fair value of equity securities | 0.4 | (1.2) |
Other changes in fair value | 1.1 | (19.6) |
Other investment losses | 0 | (51.5) |
Net realized investment gains (losses) | (14.6) | (32.7) |
Variable interest entities, change in allowance for current expected credit losses | 2 | (2.2) |
Increase (decrease) in equity securities, FV-NI, held at end of period | 0.3 | (5.2) |
Change in estimated fair value of trading securities | (2.5) | (12.8) |
Total fixed maturities, available for sale | ||
Realized investment gains (losses): | ||
Gross realized gains on sales of fixed maturities, available for sale | 7.3 | 54.8 |
Gross realized losses on sales of fixed maturities, available for sale | (14.4) | (30.6) |
Equity securities, net | (0.2) | (4.7) |
Other, net | $ (7.3) | $ (0.7) |
LIABILITIES FOR INSURANCE PRO_3
LIABILITIES FOR INSURANCE PRODUCTS - SUMMARY OF CHANGES IN LIABILITY FOR FUTURE POLICY BENEFITS (Details) - USD ($) $ in Millions | 3 Months Ended | |||||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2021 | Dec. 31, 2020 | |
Present value of expected future policy benefits ("PVEFPB"), beginning of period | ||||||
Net liability for future policy benefits | $ 11,623.3 | $ 11,240.2 | $ 15,704.9 | $ 11,744.2 | ||
Supplemental health | ||||||
Liability for Future Policy Benefit, Expected Net Premium [Roll Forward] | ||||||
Present value of expected net premiums ("PVENP"), beginning of period | 2,781.3 | $ 3,496.8 | ||||
Effect of changes in discount rate assumptions, beginning of period | (188.4) | 525.6 | ||||
Beginning PVENP at original discount rate | 2,969.7 | 2,971.2 | ||||
Effect of changes in cash flow assumptions | 0 | $ 0 | ||||
Effect of actual variances from expected experience | (17.2) | 6.3 | ||||
Adjusted beginning of period PVENP | 2,952.5 | 2,977.5 | ||||
Issuances | 63.7 | 80.6 | ||||
Interest accrual | 32 | 31.3 | ||||
Net premiums collected | (90.3) | (89.5) | ||||
Ending PVENP at original discount rate | 2,957.9 | 2,999.9 | ||||
Effect of changes in discount rate assumptions, end of period | (120.4) | 213.4 | ||||
PVENP, end of period | 2,837.5 | 3,213.3 | ||||
Present value of expected future policy benefits ("PVEFPB"), beginning of period | ||||||
Present value of expected future policy benefits ("PVEFPB"), beginning of period | 5,886.8 | 7,688 | ||||
Effect of changes in discount rate assumptions, beginning of period | 483.3 | (1,414.8) | ||||
Beginning PVEFPB at original discount rate | 6,370.1 | 6,273.2 | ||||
Effect of changes in cash flow assumptions | 0 | 0 | ||||
Effect of actual variances from expected experience | (20.5) | 5.6 | ||||
Adjusted beginning of period PVEFPB | 6,349.6 | 6,278.8 | ||||
Issuances | 63.7 | 80.8 | ||||
Interest accrual | 73.8 | 72.5 | ||||
Benefit payments | (99.5) | (99.5) | ||||
Ending PVEFPB at original discount rate | 6,387.6 | 6,332.6 | ||||
Effect of changes in discount rate assumptions, end of period | 306.8 | (622.3) | ||||
PVEFPB, end of period | 6,080.8 | 6,954.9 | ||||
Net liability for future policy benefits | 3,243.3 | 3,741.6 | ||||
Flooring impact | 0 | 1.5 | ||||
Adjusted net liability for future policy benefits | 3,243.3 | 3,743.1 | ||||
Related reinsurance recoverable | (2.4) | (3.2) | ||||
Net liability for future policy benefits, net of reinsurance recoverable | 3,240.9 | 3,739.9 | ||||
Medicare supplement | ||||||
Liability for Future Policy Benefit, Expected Net Premium [Roll Forward] | ||||||
Present value of expected net premiums ("PVENP"), beginning of period | 2,800.6 | 3,454 | ||||
Effect of changes in discount rate assumptions, beginning of period | (196.4) | 341.8 | ||||
Beginning PVENP at original discount rate | 2,997 | 3,112.2 | ||||
Effect of changes in cash flow assumptions | 0 | 0 | ||||
Effect of actual variances from expected experience | 27 | 21.2 | ||||
Adjusted beginning of period PVENP | 3,024 | 3,133.4 | ||||
Issuances | 101.6 | 68 | ||||
Interest accrual | 30.5 | 30.4 | ||||
Net premiums collected | (113.4) | (119) | ||||
Ending PVENP at original discount rate | 3,042.7 | 3,112.8 | ||||
Effect of changes in discount rate assumptions, end of period | (139.2) | 112.1 | ||||
PVENP, end of period | 2,903.5 | 3,224.9 | ||||
Present value of expected future policy benefits ("PVEFPB"), beginning of period | ||||||
Present value of expected future policy benefits ("PVEFPB"), beginning of period | 3,033.1 | 3,750.5 | ||||
Effect of changes in discount rate assumptions, beginning of period | 212 | (373.8) | ||||
Beginning PVEFPB at original discount rate | 3,245.1 | 3,376.7 | ||||
Effect of changes in cash flow assumptions | 0 | 0 | ||||
Effect of actual variances from expected experience | 32.2 | 21.5 | ||||
Adjusted beginning of period PVEFPB | 3,277.3 | 3,398.2 | ||||
Issuances | 101.6 | 67.3 | ||||
Interest accrual | 33.2 | 33.2 | ||||
Benefit payments | (125.6) | (123.3) | ||||
Ending PVEFPB at original discount rate | 3,286.5 | 3,375.4 | ||||
Effect of changes in discount rate assumptions, end of period | 150 | (123.9) | ||||
PVEFPB, end of period | 3,136.5 | 3,499.3 | ||||
Net liability for future policy benefits | 233 | 274.4 | ||||
Flooring impact | 0.4 | 0.2 | ||||
Adjusted net liability for future policy benefits | 233.4 | 274.6 | ||||
Related reinsurance recoverable | 0 | 0 | ||||
Net liability for future policy benefits, net of reinsurance recoverable | 233.4 | 274.6 | ||||
Long-term care | ||||||
Liability for Future Policy Benefit, Expected Net Premium [Roll Forward] | ||||||
Present value of expected net premiums ("PVENP"), beginning of period | 1,034.1 | 1,313.4 | ||||
Effect of changes in discount rate assumptions, beginning of period | (23.2) | 183.2 | ||||
Beginning PVENP at original discount rate | 1,057.3 | 1,130.2 | ||||
Effect of changes in cash flow assumptions | 0 | 0 | ||||
Effect of actual variances from expected experience | (3.4) | (8.9) | ||||
Adjusted beginning of period PVENP | 1,053.9 | 1,121.3 | ||||
Issuances | 15.7 | 25.7 | ||||
Interest accrual | 12.3 | 13.1 | ||||
Net premiums collected | (40.6) | (42.7) | ||||
Ending PVENP at original discount rate | 1,041.3 | 1,117.4 | ||||
Effect of changes in discount rate assumptions, end of period | (4.6) | 94.2 | ||||
PVENP, end of period | 1,036.7 | 1,211.6 | ||||
Present value of expected future policy benefits ("PVEFPB"), beginning of period | ||||||
Present value of expected future policy benefits ("PVEFPB"), beginning of period | 4,158.1 | 5,501.6 | ||||
Effect of changes in discount rate assumptions, beginning of period | 28.5 | (1,291.2) | ||||
Beginning PVEFPB at original discount rate | 4,186.6 | 4,210.4 | ||||
Effect of changes in cash flow assumptions | 0 | 0 | ||||
Effect of actual variances from expected experience | (6.3) | (9.2) | ||||
Adjusted beginning of period PVEFPB | 4,180.3 | 4,201.2 | ||||
Issuances | 15.7 | 25.7 | ||||
Interest accrual | 55.5 | 56.1 | ||||
Benefit payments | (71.3) | (64.2) | ||||
Ending PVEFPB at original discount rate | 4,180.2 | 4,218.8 | ||||
Effect of changes in discount rate assumptions, end of period | (86.4) | (747.4) | ||||
PVEFPB, end of period | 4,266.6 | 4,966.2 | ||||
Net liability for future policy benefits | 3,229.9 | 3,754.6 | ||||
Flooring impact | 0 | 0.6 | ||||
Adjusted net liability for future policy benefits | 3,229.9 | 3,755.2 | ||||
Related reinsurance recoverable | (357.5) | (407) | ||||
Net liability for future policy benefits, net of reinsurance recoverable | 2,872.4 | 3,348.2 | ||||
Traditional life | ||||||
Liability for Future Policy Benefit, Expected Net Premium [Roll Forward] | ||||||
Present value of expected net premiums ("PVENP"), beginning of period | 2,175 | 2,483.7 | ||||
Effect of changes in discount rate assumptions, beginning of period | (137.1) | 239.4 | ||||
Beginning PVENP at original discount rate | 2,312.1 | 2,244.3 | ||||
Effect of changes in cash flow assumptions | 0 | 0 | ||||
Effect of actual variances from expected experience | (14.1) | (11.8) | ||||
Adjusted beginning of period PVENP | 2,298 | 2,232.5 | ||||
Issuances | 108.3 | 149.3 | ||||
Interest accrual | 23 | 20.9 | ||||
Net premiums collected | (101.4) | (99.9) | ||||
Ending PVENP at original discount rate | 2,327.9 | 2,302.8 | ||||
Effect of changes in discount rate assumptions, end of period | (92.5) | 72.5 | ||||
PVENP, end of period | 2,235.4 | 2,375.3 | ||||
Present value of expected future policy benefits ("PVEFPB"), beginning of period | ||||||
Present value of expected future policy benefits ("PVEFPB"), beginning of period | 4,417.9 | 5,395.7 | ||||
Effect of changes in discount rate assumptions, beginning of period | 336.6 | (767.3) | ||||
Beginning PVEFPB at original discount rate | 4,754.5 | 4,628.4 | ||||
Effect of changes in cash flow assumptions | 0 | 0 | ||||
Effect of actual variances from expected experience | (15.2) | (8.5) | ||||
Adjusted beginning of period PVEFPB | 4,739.3 | 4,619.9 | ||||
Issuances | 108.3 | 149.4 | ||||
Interest accrual | 51 | 48.8 | ||||
Benefit payments | (115) | (128.8) | ||||
Ending PVEFPB at original discount rate | 4,783.6 | 4,689.3 | ||||
Effect of changes in discount rate assumptions, end of period | 223 | (296.2) | ||||
PVEFPB, end of period | 4,560.6 | 4,985.5 | ||||
Net liability for future policy benefits | 2,325.2 | 2,610.2 | ||||
Flooring impact | 0 | 0.4 | ||||
Adjusted net liability for future policy benefits | 2,325.2 | 2,610.6 | ||||
Related reinsurance recoverable | (201.1) | (242.1) | ||||
Net liability for future policy benefits, net of reinsurance recoverable | 2,124.1 | 2,368.5 | ||||
Other annuities | ||||||
Liability for Future Policy Benefit, Expected Net Premium [Roll Forward] | ||||||
Present value of expected net premiums ("PVENP"), beginning of period | 0 | 0 | ||||
Effect of changes in discount rate assumptions, beginning of period | 0 | 0 | ||||
Beginning PVENP at original discount rate | 0 | 0 | ||||
Effect of changes in cash flow assumptions | 0 | 0 | ||||
Effect of actual variances from expected experience | 0 | 0 | ||||
Adjusted beginning of period PVENP | 0 | 0 | ||||
Issuances | 1.1 | 1.6 | ||||
Interest accrual | 0 | 0 | ||||
Net premiums collected | (1.1) | (1.6) | ||||
Ending PVENP at original discount rate | 0 | 0 | ||||
Effect of changes in discount rate assumptions, end of period | 0 | 0 | ||||
PVENP, end of period | 0 | 0 | ||||
Present value of expected future policy benefits ("PVEFPB"), beginning of period | ||||||
Present value of expected future policy benefits ("PVEFPB"), beginning of period | 310.9 | 431.9 | ||||
Effect of changes in discount rate assumptions, beginning of period | 15.4 | (88.4) | ||||
Beginning PVEFPB at original discount rate | 326.3 | 343.5 | ||||
Effect of changes in cash flow assumptions | 0 | 0 | ||||
Effect of actual variances from expected experience | 0.7 | (1.3) | ||||
Adjusted beginning of period PVEFPB | $ 327 | $ 342.2 | ||||
Issuances | 1.1 | 1.9 | ||||
Interest accrual | 3.7 | 3.9 | ||||
Benefit payments | (8.6) | (9.3) | ||||
Ending PVEFPB at original discount rate | 323.2 | 338.7 | ||||
Effect of changes in discount rate assumptions, end of period | 6.9 | (44.6) | ||||
PVEFPB, end of period | 316.3 | 383.3 | ||||
Net liability for future policy benefits | 316.3 | 383.3 | ||||
Flooring impact | 0 | 0 | ||||
Adjusted net liability for future policy benefits | 316.3 | 383.3 | ||||
Related reinsurance recoverable | 0 | 0 | ||||
Net liability for future policy benefits, net of reinsurance recoverable | $ 316.3 | $ 383.3 |
LIABILITIES FOR INSURANCE PRO_4
LIABILITIES FOR INSURANCE PRODUCTS - RECONCILIATION OF NET LIABILITY FOR FUTURE POLICY BENEFITS (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Mar. 31, 2022 |
Liability for Future Policy Benefit, Activity [Line Items] | ||
Reserves excluded from rollforward | $ 2,593.3 | $ 2,626.5 |
Deferred profit liability | 57.7 | 51.3 |
Amount of reserves above (below) policyholder account balances | (410.5) | (273.1) |
Future loss reserves | 34.7 | 34.6 |
Future policy benefits | 11,623.3 | 13,206.1 |
Supplemental health | ||
Liability for Future Policy Benefit, Activity [Line Items] | ||
Adjusted net liability for future policy benefits | 3,243.3 | 3,743.1 |
Medicare supplement | ||
Liability for Future Policy Benefit, Activity [Line Items] | ||
Adjusted net liability for future policy benefits | 233.4 | 274.6 |
Long-term care | ||
Liability for Future Policy Benefit, Activity [Line Items] | ||
Adjusted net liability for future policy benefits | 3,229.9 | 3,755.2 |
Traditional life | ||
Liability for Future Policy Benefit, Activity [Line Items] | ||
Adjusted net liability for future policy benefits | 2,325.2 | 2,610.6 |
Other annuities | ||
Liability for Future Policy Benefit, Activity [Line Items] | ||
Adjusted net liability for future policy benefits | $ 316.3 | $ 383.3 |
LIABILITIES FOR INSURANCE PRO_5
LIABILITIES FOR INSURANCE PRODUCTS - CHANGES IN MARKET RISK BENEFITS (Details) - USD ($) $ in Millions | 3 Months Ended | |||||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2021 | Dec. 31, 2020 | |
Market Risk Benefit [Roll Forward] | ||||||
Net liability (asset), beginning of period | $ (54) | $ 86.2 | ||||
Effect of changes in the instrument-specific credit risk, beginning of period | (13.1) | (18.7) | $ 12.2 | $ 12.1 | ||
Balance, beginning of period, before effect of changes in the instrument-specific credit risk | (41.8) | 98.3 | ||||
Issuances | 0.1 | (0.8) | ||||
Interest accrual | 5.2 | 3.4 | ||||
Attributed fees collected | 0 | 0 | ||||
Benefit payments | 0 | 0 | ||||
Effect of changes in interest rates | 12.3 | (35.3) | ||||
Effect of changes in equity markets | 5.3 | (6.8) | ||||
Effect of changes in equity index volatility | (7.4) | 4.4 | ||||
Actual policyholder behavior different from expected behavior | 0.6 | 0.3 | ||||
Effect of changes in future expected policyholder behavior - other | 0 | 0 | ||||
Effect of changes in future expected policyholder behavior - risk margin | 0 | 0 | ||||
Effect of changes in assumptions | (1.4) | 2.1 | ||||
Net liability (asset), end of period, before effect of changes in the instrument-specific credit risk | (27.1) | 65.6 | ||||
Net liability (asset), end of period | (40.2) | 46.9 | ||||
Reinsurance recoverable, end of period | 0 | 0 | ||||
Net liability (asset), end of period, net of reinsurance | (40.2) | 46.9 | ||||
Balance reported as an asset | 57.8 | 16.9 | 65.3 | $ 2.5 | $ 0 | |
Balance reported as a liability | 17.6 | 63.8 | 11.3 | $ 114.8 | $ 0 | |
Net liability (asset) | (40.2) | 46.9 | $ (54) | $ 86.2 | ||
Net amount at risk | $ 58.9 | $ 107.4 | ||||
Weighted average attained age of contract holders | 68 years | 68 years |
LIABILITIES FOR INSURANCE PRO_6
LIABILITIES FOR INSURANCE PRODUCTS - SUMMARY OF AMOUNT OF REVENUE AND INTEREST, TRADITIONAL AND LIMITED PAYMENT CONTRACTS (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Liability for Future Policy Benefit, Activity [Line Items] | ||
Gross premiums | $ 601.4 | $ 600.3 |
Interest accretion | 119.4 | 118.8 |
Other annuity | ||
Liability for Future Policy Benefit, Activity [Line Items] | ||
Gross premiums | 1.3 | 2.2 |
Interest accretion | 3.7 | 3.9 |
Supplemental health | ||
Liability for Future Policy Benefit, Activity [Line Items] | ||
Gross premiums | 179.4 | 175.7 |
Interest accretion | 41.8 | 41.2 |
Medicare supplement | ||
Liability for Future Policy Benefit, Activity [Line Items] | ||
Gross premiums | 159.2 | 167.6 |
Interest accretion | 2.7 | 2.8 |
Long-term care | ||
Liability for Future Policy Benefit, Activity [Line Items] | ||
Gross premiums | 82.7 | 82.4 |
Interest accretion | 43.2 | 43 |
Traditional life | ||
Liability for Future Policy Benefit, Activity [Line Items] | ||
Gross premiums | 178.8 | 172.4 |
Interest accretion | $ 28 | $ 27.9 |
LIABILITIES FOR INSURANCE PRO_7
LIABILITIES FOR INSURANCE PRODUCTS - SUMMARY OF AMOUNT OF UNDISCOUNTED AND DISCOUNTED EXPECTED GROSS PREMIUMS AND EXPECTED FUTURE BENEFITS (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Mar. 31, 2022 |
Other annuity | ||
Liability for Future Policy Benefit, Activity [Line Items] | ||
Expected future gross premiums (Undiscounted) | $ 0 | $ 0 |
Expected future gross premiums (Discounted) | 0 | 0 |
Expected future benefits and expenses (Undiscounted) | 396.9 | 426 |
Expected future benefits and expenses (Discounted) | 316.3 | 383.3 |
Supplemental health | ||
Liability for Future Policy Benefit, Activity [Line Items] | ||
Expected future gross premiums (Undiscounted) | 8,964.4 | 8,862.2 |
Expected future gross premiums (Discounted) | 5,605.7 | 6,222.2 |
Expected future benefits and expenses (Undiscounted) | 11,040.9 | 10,940.4 |
Expected future benefits and expenses (Discounted) | 6,080.8 | 6,954.9 |
Medicare supplement | ||
Liability for Future Policy Benefit, Activity [Line Items] | ||
Expected future gross premiums (Undiscounted) | 5,645.2 | 5,680.8 |
Expected future gross premiums (Discounted) | 4,031.9 | 4,490 |
Expected future benefits and expenses (Undiscounted) | 4,417.8 | 4,446.9 |
Expected future benefits and expenses (Discounted) | 3,136.5 | 3,499.3 |
Long-term care | ||
Liability for Future Policy Benefit, Activity [Line Items] | ||
Expected future gross premiums (Undiscounted) | 2,954.3 | 3,012.5 |
Expected future gross premiums (Discounted) | 2,152.7 | 2,389.4 |
Expected future benefits and expenses (Undiscounted) | 7,445.7 | 7,606.7 |
Expected future benefits and expenses (Discounted) | 4,266.6 | 4,966.2 |
Traditional life | ||
Liability for Future Policy Benefit, Activity [Line Items] | ||
Expected future gross premiums (Undiscounted) | 5,435 | 5,384.4 |
Expected future gross premiums (Discounted) | 3,953.3 | 4,260.8 |
Expected future benefits and expenses (Undiscounted) | 7,382.8 | 7,180.2 |
Expected future benefits and expenses (Discounted) | $ 4,560.6 | $ 4,985.5 |
LIABILITIES FOR INSURANCE PRO_8
LIABILITIES FOR INSURANCE PRODUCTS - WEIGHTED AVERAGE DURATIONS OF LIABILITY (Details) | Mar. 31, 2023 | Mar. 31, 2022 |
Other annuity | ||
Liability for Future Policy Benefit, Activity [Line Items] | ||
Weighted average duration | 9 years 8 months 12 days | 9 years 8 months 12 days |
Supplemental health | ||
Liability for Future Policy Benefit, Activity [Line Items] | ||
Weighted average duration | 11 years 9 months 18 days | 12 years |
Medicare supplement | ||
Liability for Future Policy Benefit, Activity [Line Items] | ||
Weighted average duration | 6 years 1 month 6 days | 5 years 10 months 24 days |
Long-term care | ||
Liability for Future Policy Benefit, Activity [Line Items] | ||
Weighted average duration | 10 years 6 months | 10 years 9 months 18 days |
Traditional life | ||
Liability for Future Policy Benefit, Activity [Line Items] | ||
Weighted average duration | 10 years 1 month 6 days | 10 years 4 months 24 days |
LIABILITIES FOR INSURANCE PRO_9
LIABILITIES FOR INSURANCE PRODUCTS - WEIGHTED AVERAGE INTEREST RATE (Details) | Mar. 31, 2023 | Mar. 31, 2022 |
Other annuity | ||
Liability for Future Policy Benefit, Activity [Line Items] | ||
Interest accretion rate | 4.76% | 4.72% |
Current discount rate | 5.17% | 3.68% |
Supplemental health | ||
Liability for Future Policy Benefit, Activity [Line Items] | ||
Interest accretion rate | 5.04% | 5.09% |
Current discount rate | 5.14% | 3.66% |
Medicare supplement | ||
Liability for Future Policy Benefit, Activity [Line Items] | ||
Interest accretion rate | 4.26% | 4.23% |
Current discount rate | 4.94% | 3.41% |
Long-term care | ||
Liability for Future Policy Benefit, Activity [Line Items] | ||
Interest accretion rate | 5.67% | 5.71% |
Current discount rate | 5.18% | 3.71% |
Traditional life | ||
Liability for Future Policy Benefit, Activity [Line Items] | ||
Interest accretion rate | 4.77% | 4.82% |
Current discount rate | 5.15% | 3.66% |
LIABILITIES FOR INSURANCE PR_10
LIABILITIES FOR INSURANCE PRODUCTS - SUMMARY OF CHANGES IN POLICYHOLDER ACCOUNT BALANCES (Details) - USD ($) $ in Millions | 3 Months Ended | ||||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Jan. 01, 2021 | Dec. 31, 2020 | |
Policyholder Account Balance [Roll Forward] | |||||
Policyholder account balances | $ 15,302.9 | $ 14,725.6 | $ 15,234.2 | $ 12,367.7 | $ 12,540.6 |
Fixed indexed annuities | |||||
Policyholder Account Balance [Roll Forward] | |||||
Balance, beginning of period excluding contracts 100% ceded | 9,490.4 | 8,681 | |||
Issuances | 323.3 | 354.6 | |||
Premiums received | 0.4 | 0.1 | |||
Policy charges | (4) | (3) | |||
Surrenders and withdrawals | (178.2) | (133.7) | |||
Benefit payments | (59.2) | (67.3) | |||
Interest credited | 6.1 | 65.7 | |||
Other | 5.5 | 4.6 | |||
Balance, end of period excluding contracts 100% ceded | 9,584.3 | 8,902 | |||
Balance, end of period for contracts 100% ceded | 154.4 | 166.6 | |||
Policyholder account balances | 9,738.7 | 9,068.6 | |||
Balance, end of period, reinsurance ceded | (154.4) | (166.6) | |||
Balance, end of period, net of reinsurance | $ 9,584.3 | $ 8,902 | |||
Weighted average crediting rate | 1.60% | 1.40% | |||
Net amount at risk | $ 0 | $ 0 | |||
Cash surrender value, net of reinsurance | 8,932.4 | 8,295.5 | |||
Fixed interest annuities | |||||
Policyholder Account Balance [Roll Forward] | |||||
Balance, beginning of period excluding contracts 100% ceded | 1,663.1 | 1,806.1 | |||
Issuances | 45.3 | 10.5 | |||
Premiums received | 0.7 | 1.1 | |||
Policy charges | (0.2) | (0.1) | |||
Surrenders and withdrawals | (43.3) | (37.9) | |||
Benefit payments | (27.7) | (39.6) | |||
Interest credited | 11.3 | 11.5 | |||
Other | 0.1 | 0.2 | |||
Balance, end of period excluding contracts 100% ceded | 1,649.3 | 1,751.8 | |||
Balance, end of period for contracts 100% ceded | 632.6 | 658.8 | |||
Policyholder account balances | 2,281.9 | 2,410.6 | |||
Balance, end of period, reinsurance ceded | (632.6) | (658.8) | |||
Balance, end of period, net of reinsurance | $ 1,649.3 | $ 1,751.8 | |||
Weighted average crediting rate | 2.70% | 2.60% | |||
Net amount at risk | $ 0 | $ 0 | |||
Cash surrender value, net of reinsurance | 1,631.5 | 1,743.3 | |||
Other annuities | |||||
Policyholder Account Balance [Roll Forward] | |||||
Balance, beginning of period excluding contracts 100% ceded | 127.1 | 131.2 | |||
Issuances | 0 | 0 | |||
Premiums received | 7.5 | 9.1 | |||
Policy charges | 0 | 0 | |||
Surrenders and withdrawals | (10.5) | (10.2) | |||
Benefit payments | (1.7) | (1.4) | |||
Interest credited | 0.6 | 0.6 | |||
Other | (0.2) | 0 | |||
Balance, end of period excluding contracts 100% ceded | 122.8 | 129.3 | |||
Balance, end of period for contracts 100% ceded | 26.3 | 28.2 | |||
Policyholder account balances | 149.1 | 157.5 | |||
Balance, end of period, reinsurance ceded | (26.3) | (28.2) | |||
Balance, end of period, net of reinsurance | $ 122.8 | $ 129.3 | |||
Weighted average crediting rate | 1.90% | 1.80% | |||
Net amount at risk | $ 0 | $ 0 | |||
Cash surrender value, net of reinsurance | 122.8 | 129.3 | |||
Interest-sensitive life | |||||
Policyholder Account Balance [Roll Forward] | |||||
Balance, beginning of period excluding contracts 100% ceded | 1,209.6 | 1,163.9 | |||
Issuances | 9.5 | 10.6 | |||
Premiums received | 50.3 | 47.6 | |||
Policy charges | (46.1) | (44.5) | |||
Surrenders and withdrawals | (8.2) | (5.7) | |||
Benefit payments | (6) | (7.8) | |||
Interest credited | 8.1 | 15.7 | |||
Other | 0 | 0 | |||
Balance, end of period excluding contracts 100% ceded | 1,217.2 | 1,179.8 | |||
Balance, end of period for contracts 100% ceded | 110.7 | 115.7 | |||
Policyholder account balances | 1,327.9 | 1,295.5 | |||
Balance, end of period, reinsurance ceded | (130.5) | (136.5) | |||
Balance, end of period, net of reinsurance | $ 1,197.4 | $ 1,159 | |||
Weighted average crediting rate | 3.10% | 5.90% | |||
Net amount at risk | $ 26,865.3 | $ 26,436.6 | |||
Cash surrender value, net of reinsurance | 977.1 | 938.6 | |||
Funding agreements | |||||
Policyholder Account Balance [Roll Forward] | |||||
Balance, beginning of period excluding contracts 100% ceded | 1,410.8 | 502 | |||
Issuances | 0 | 899 | |||
Premiums received | 0 | 0 | |||
Policy charges | 0 | 0 | |||
Surrenders and withdrawals | (9.9) | 0 | |||
Benefit payments | 0 | 0 | |||
Interest credited | 7.2 | 7 | |||
Other | 0 | 0 | |||
Balance, end of period excluding contracts 100% ceded | 1,408.1 | 1,408 | |||
Balance, end of period for contracts 100% ceded | 0 | 0 | |||
Policyholder account balances | 1,408.1 | 1,408 | |||
Balance, end of period, reinsurance ceded | 0 | 0 | |||
Balance, end of period, net of reinsurance | $ 1,408.1 | $ 1,408 | |||
Weighted average crediting rate | 2% | 2% | |||
Net amount at risk | $ 0 | $ 0 | |||
Cash surrender value, net of reinsurance | 0 | 0 | |||
Other | |||||
Policyholder Account Balance [Roll Forward] | |||||
Balance, beginning of period excluding contracts 100% ceded | 395.5 | 368 | |||
Issuances | 0 | 0 | |||
Premiums received | 63 | 61.7 | |||
Policy charges | 0 | 0 | |||
Surrenders and withdrawals | (72.6) | (56.8) | |||
Benefit payments | 0 | (0.1) | |||
Interest credited | 0.7 | 0.7 | |||
Other | 0 | 0 | |||
Balance, end of period excluding contracts 100% ceded | 386.6 | 373.5 | |||
Balance, end of period for contracts 100% ceded | 10.6 | 11.9 | |||
Policyholder account balances | 397.2 | 385.4 | |||
Balance, end of period, reinsurance ceded | (24.8) | (26.7) | |||
Balance, end of period, net of reinsurance | $ 372.4 | $ 358.7 | |||
Weighted average crediting rate | 0.60% | 0.70% | |||
Net amount at risk | $ 0 | $ 0 | |||
Cash surrender value, net of reinsurance | $ 372.4 | $ 358.7 |
LIABILITIES FOR INSURANCE PR_11
LIABILITIES FOR INSURANCE PRODUCTS - RECONCILIATION OF LIABILITY FOR POLICYHOLDER ACCOUNT BALANCES (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Jan. 01, 2021 | Dec. 31, 2020 |
Policyholder Account Balance [Line Items] | |||||
Total | $ 15,302.9 | $ 15,234.2 | $ 14,725.6 | $ 12,367.7 | $ 12,540.6 |
Fixed indexed annuities | |||||
Policyholder Account Balance [Line Items] | |||||
Total | 9,738.7 | 9,068.6 | |||
Fixed interest annuities | |||||
Policyholder Account Balance [Line Items] | |||||
Total | 2,281.9 | 2,410.6 | |||
Other annuity | |||||
Policyholder Account Balance [Line Items] | |||||
Total | 149.1 | 157.5 | |||
Interest-sensitive life | |||||
Policyholder Account Balance [Line Items] | |||||
Total | 1,327.9 | 1,295.5 | |||
Funding agreements | |||||
Policyholder Account Balance [Line Items] | |||||
Total | 1,408.1 | 1,408 | |||
Other | |||||
Policyholder Account Balance [Line Items] | |||||
Total | $ 397.2 | $ 385.4 |
LIABILITIES FOR INSURANCE PR_12
LIABILITIES FOR INSURANCE PRODUCTS - GUARANTEED MINIMUM CREDITING RATES (Details) $ in Millions | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Mar. 31, 2022 USD ($) | Jan. 01, 2021 USD ($) | Dec. 31, 2020 USD ($) |
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | $ 15,302.9 | $ 15,234.2 | $ 14,725.6 | $ 12,367.7 | $ 12,540.6 |
0.00%-2.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | $ 2,963.9 | 2,416.8 | |||
0.00%-2.99% | Minimum | |||||
Policyholder Account Balance [Line Items] | |||||
Range of guaranteed minimum crediting rates | 0% | ||||
0.00%-2.99% | Maximum | |||||
Policyholder Account Balance [Line Items] | |||||
Range of guaranteed minimum crediting rates | 2.99% | ||||
3.00%-4.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | $ 2,473.5 | 2,635.3 | |||
3.00%-4.99% | Minimum | |||||
Policyholder Account Balance [Line Items] | |||||
Range of guaranteed minimum crediting rates | 3% | ||||
3.00%-4.99% | Maximum | |||||
Policyholder Account Balance [Line Items] | |||||
Range of guaranteed minimum crediting rates | 4.99% | ||||
5.00% and greater | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | $ 126.8 | 604.9 | |||
5.00% and greater | Minimum | |||||
Policyholder Account Balance [Line Items] | |||||
Range of guaranteed minimum crediting rates | 5% | ||||
At guaranteed minimum | 0.00%-2.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | $ 1,680.9 | 1,658.8 | |||
At guaranteed minimum | 3.00%-4.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 2,122.4 | 2,230.8 | |||
At guaranteed minimum | 5.00% and greater | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | $ 123.3 | 129.8 | |||
1-50 basis points above | Minimum | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balance, above guaranteed minimum crediting rate | 0.0001 | ||||
1-50 basis points above | Maximum | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balance, above guaranteed minimum crediting rate | 0.0050 | ||||
1-50 basis points above | 0.00%-2.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | $ 902.4 | 703.6 | |||
1-50 basis points above | 3.00%-4.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 79.4 | 80 | |||
1-50 basis points above | 5.00% and greater | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | $ 0.5 | 0.4 | |||
51-150 basis points above | Minimum | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balance, above guaranteed minimum crediting rate | 0.0051 | ||||
51-150 basis points above | Maximum | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balance, above guaranteed minimum crediting rate | 0.0150 | ||||
51-150 basis points above | 0.00%-2.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | $ 303.7 | 42.9 | |||
51-150 basis points above | 3.00%-4.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 146.7 | 178.1 | |||
51-150 basis points above | 5.00% and greater | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | $ 2.7 | 0 | |||
Greater than 150 basis points above | Minimum | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balance, above guaranteed minimum crediting rate | 0.0150 | ||||
Greater than 150 basis points above | 0.00%-2.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | $ 76.9 | 11.5 | |||
Greater than 150 basis points above | 3.00%-4.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 125 | 146.4 | |||
Greater than 150 basis points above | 5.00% and greater | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0.3 | 474.7 | |||
Contracts Excluding Fixed Index Annuities | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 5,564.2 | 5,657 | |||
Contracts Excluding Fixed Index Annuities | At guaranteed minimum | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 3,926.6 | 4,019.4 | |||
Contracts Excluding Fixed Index Annuities | 1-50 basis points above | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 982.3 | 784 | |||
Contracts Excluding Fixed Index Annuities | 51-150 basis points above | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 453.1 | 221 | |||
Contracts Excluding Fixed Index Annuities | Greater than 150 basis points above | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 202.2 | 632.6 | |||
Fixed interest annuities | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 2,281.9 | 2,410.6 | |||
Fixed interest annuities | 0.00%-2.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | $ 591.8 | 558.3 | |||
Fixed interest annuities | 0.00%-2.99% | Minimum | |||||
Policyholder Account Balance [Line Items] | |||||
Range of guaranteed minimum crediting rates | 0% | ||||
Fixed interest annuities | 0.00%-2.99% | Maximum | |||||
Policyholder Account Balance [Line Items] | |||||
Range of guaranteed minimum crediting rates | 2.99% | ||||
Fixed interest annuities | 3.00%-4.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | $ 1,599.8 | 1,757.9 | |||
Fixed interest annuities | 3.00%-4.99% | Minimum | |||||
Policyholder Account Balance [Line Items] | |||||
Range of guaranteed minimum crediting rates | 3% | ||||
Fixed interest annuities | 3.00%-4.99% | Maximum | |||||
Policyholder Account Balance [Line Items] | |||||
Range of guaranteed minimum crediting rates | 4.99% | ||||
Fixed interest annuities | 5.00% and greater | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | $ 90.3 | 94.4 | |||
Fixed interest annuities | 5.00% and greater | Minimum | |||||
Policyholder Account Balance [Line Items] | |||||
Range of guaranteed minimum crediting rates | 5% | ||||
Fixed interest annuities | At guaranteed minimum | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | $ 1,807.2 | 2,000.4 | |||
Fixed interest annuities | At guaranteed minimum | 0.00%-2.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 144.9 | 171.7 | |||
Fixed interest annuities | At guaranteed minimum | 3.00%-4.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 1,572 | 1,734.3 | |||
Fixed interest annuities | At guaranteed minimum | 5.00% and greater | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 90.3 | 94.4 | |||
Fixed interest annuities | 1-50 basis points above | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 319.4 | 355.7 | |||
Fixed interest annuities | 1-50 basis points above | 0.00%-2.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 291.7 | 332.2 | |||
Fixed interest annuities | 1-50 basis points above | 3.00%-4.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 27.7 | 23.5 | |||
Fixed interest annuities | 1-50 basis points above | 5.00% and greater | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Fixed interest annuities | 51-150 basis points above | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 78.4 | 43 | |||
Fixed interest annuities | 51-150 basis points above | 0.00%-2.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 78.3 | 42.9 | |||
Fixed interest annuities | 51-150 basis points above | 3.00%-4.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0.1 | 0.1 | |||
Fixed interest annuities | 51-150 basis points above | 5.00% and greater | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Fixed interest annuities | Greater than 150 basis points above | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 76.9 | 11.5 | |||
Fixed interest annuities | Greater than 150 basis points above | 0.00%-2.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 76.9 | 11.5 | |||
Fixed interest annuities | Greater than 150 basis points above | 3.00%-4.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Fixed interest annuities | Greater than 150 basis points above | 5.00% and greater | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Other annuity | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 149.1 | 157.5 | |||
Other annuity | 0.00%-2.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | $ 73.1 | 83.4 | |||
Other annuity | 0.00%-2.99% | Minimum | |||||
Policyholder Account Balance [Line Items] | |||||
Range of guaranteed minimum crediting rates | 0% | ||||
Other annuity | 0.00%-2.99% | Maximum | |||||
Policyholder Account Balance [Line Items] | |||||
Range of guaranteed minimum crediting rates | 2.99% | ||||
Other annuity | 3.00%-4.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | $ 65.3 | 62.4 | |||
Other annuity | 3.00%-4.99% | Minimum | |||||
Policyholder Account Balance [Line Items] | |||||
Range of guaranteed minimum crediting rates | 3% | ||||
Other annuity | 3.00%-4.99% | Maximum | |||||
Policyholder Account Balance [Line Items] | |||||
Range of guaranteed minimum crediting rates | 4.99% | ||||
Other annuity | 5.00% and greater | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | $ 10.7 | 11.7 | |||
Other annuity | 5.00% and greater | Minimum | |||||
Policyholder Account Balance [Line Items] | |||||
Range of guaranteed minimum crediting rates | 5% | ||||
Other annuity | At guaranteed minimum | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | $ 119.6 | 127.2 | |||
Other annuity | At guaranteed minimum | 0.00%-2.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 43.6 | 53.1 | |||
Other annuity | At guaranteed minimum | 3.00%-4.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 65.3 | 62.4 | |||
Other annuity | At guaranteed minimum | 5.00% and greater | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 10.7 | 11.7 | |||
Other annuity | 1-50 basis points above | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 29.5 | 30.3 | |||
Other annuity | 1-50 basis points above | 0.00%-2.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 29.5 | 30.3 | |||
Other annuity | 1-50 basis points above | 3.00%-4.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Other annuity | 1-50 basis points above | 5.00% and greater | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Other annuity | 51-150 basis points above | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Other annuity | 51-150 basis points above | 0.00%-2.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Other annuity | 51-150 basis points above | 3.00%-4.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Other annuity | 51-150 basis points above | 5.00% and greater | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Other annuity | Greater than 150 basis points above | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Other annuity | Greater than 150 basis points above | 0.00%-2.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Other annuity | Greater than 150 basis points above | 3.00%-4.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Other annuity | Greater than 150 basis points above | 5.00% and greater | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Interest-sensitive life | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 1,327.9 | 1,295.5 | |||
Interest-sensitive life | 0.00%-2.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | $ 517.7 | 7.5 | |||
Interest-sensitive life | 0.00%-2.99% | Minimum | |||||
Policyholder Account Balance [Line Items] | |||||
Range of guaranteed minimum crediting rates | 0% | ||||
Interest-sensitive life | 0.00%-2.99% | Maximum | |||||
Policyholder Account Balance [Line Items] | |||||
Range of guaranteed minimum crediting rates | 2.99% | ||||
Interest-sensitive life | 3.00%-4.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | $ 784.8 | 790.2 | |||
Interest-sensitive life | 3.00%-4.99% | Minimum | |||||
Policyholder Account Balance [Line Items] | |||||
Range of guaranteed minimum crediting rates | 3% | ||||
Interest-sensitive life | 3.00%-4.99% | Maximum | |||||
Policyholder Account Balance [Line Items] | |||||
Range of guaranteed minimum crediting rates | 4.99% | ||||
Interest-sensitive life | 5.00% and greater | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | $ 25.4 | 497.8 | |||
Interest-sensitive life | 5.00% and greater | Minimum | |||||
Policyholder Account Balance [Line Items] | |||||
Range of guaranteed minimum crediting rates | 5% | ||||
Interest-sensitive life | At guaranteed minimum | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | $ 549.9 | 439.5 | |||
Interest-sensitive life | At guaranteed minimum | 0.00%-2.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 66.5 | 7.5 | |||
Interest-sensitive life | At guaranteed minimum | 3.00%-4.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 461.5 | 409.3 | |||
Interest-sensitive life | At guaranteed minimum | 5.00% and greater | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 21.9 | 22.7 | |||
Interest-sensitive life | 1-50 basis points above | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 278 | 56.9 | |||
Interest-sensitive life | 1-50 basis points above | 0.00%-2.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 225.8 | 0 | |||
Interest-sensitive life | 1-50 basis points above | 3.00%-4.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 51.7 | 56.5 | |||
Interest-sensitive life | 1-50 basis points above | 5.00% and greater | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0.5 | 0.4 | |||
Interest-sensitive life | 51-150 basis points above | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 374.7 | 178 | |||
Interest-sensitive life | 51-150 basis points above | 0.00%-2.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 225.4 | 0 | |||
Interest-sensitive life | 51-150 basis points above | 3.00%-4.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 146.6 | 178 | |||
Interest-sensitive life | 51-150 basis points above | 5.00% and greater | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 2.7 | 0 | |||
Interest-sensitive life | Greater than 150 basis points above | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 125.3 | 621.1 | |||
Interest-sensitive life | Greater than 150 basis points above | 0.00%-2.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Interest-sensitive life | Greater than 150 basis points above | 3.00%-4.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 125 | 146.4 | |||
Interest-sensitive life | Greater than 150 basis points above | 5.00% and greater | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0.3 | 474.7 | |||
Funding agreements | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 1,408.1 | 1,408 | |||
Funding agreements | 0.00%-2.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | $ 1,408.1 | 1,408 | |||
Funding agreements | 0.00%-2.99% | Minimum | |||||
Policyholder Account Balance [Line Items] | |||||
Range of guaranteed minimum crediting rates | 0% | ||||
Funding agreements | 0.00%-2.99% | Maximum | |||||
Policyholder Account Balance [Line Items] | |||||
Range of guaranteed minimum crediting rates | 2.99% | ||||
Funding agreements | 3.00%-4.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | $ 0 | 0 | |||
Funding agreements | 3.00%-4.99% | Minimum | |||||
Policyholder Account Balance [Line Items] | |||||
Range of guaranteed minimum crediting rates | 3% | ||||
Funding agreements | 3.00%-4.99% | Maximum | |||||
Policyholder Account Balance [Line Items] | |||||
Range of guaranteed minimum crediting rates | 4.99% | ||||
Funding agreements | 5.00% and greater | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | $ 0 | 0 | |||
Funding agreements | 5.00% and greater | Minimum | |||||
Policyholder Account Balance [Line Items] | |||||
Range of guaranteed minimum crediting rates | 5% | ||||
Funding agreements | At guaranteed minimum | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | $ 1,408.1 | 1,408 | |||
Funding agreements | At guaranteed minimum | 0.00%-2.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 1,408.1 | 1,408 | |||
Funding agreements | At guaranteed minimum | 3.00%-4.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Funding agreements | At guaranteed minimum | 5.00% and greater | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Funding agreements | 1-50 basis points above | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Funding agreements | 1-50 basis points above | 0.00%-2.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Funding agreements | 1-50 basis points above | 3.00%-4.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Funding agreements | 1-50 basis points above | 5.00% and greater | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Funding agreements | 51-150 basis points above | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Funding agreements | 51-150 basis points above | 0.00%-2.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Funding agreements | 51-150 basis points above | 3.00%-4.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Funding agreements | 51-150 basis points above | 5.00% and greater | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Funding agreements | Greater than 150 basis points above | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Funding agreements | Greater than 150 basis points above | 0.00%-2.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Funding agreements | Greater than 150 basis points above | 3.00%-4.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Funding agreements | Greater than 150 basis points above | 5.00% and greater | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Other | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 397.2 | 385.4 | |||
Other | 0.00%-2.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | $ 373.2 | 359.6 | |||
Other | 0.00%-2.99% | Minimum | |||||
Policyholder Account Balance [Line Items] | |||||
Range of guaranteed minimum crediting rates | 0% | ||||
Other | 0.00%-2.99% | Maximum | |||||
Policyholder Account Balance [Line Items] | |||||
Range of guaranteed minimum crediting rates | 2.99% | ||||
Other | 3.00%-4.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | $ 23.6 | 24.8 | |||
Other | 3.00%-4.99% | Minimum | |||||
Policyholder Account Balance [Line Items] | |||||
Range of guaranteed minimum crediting rates | 3% | ||||
Other | 3.00%-4.99% | Maximum | |||||
Policyholder Account Balance [Line Items] | |||||
Range of guaranteed minimum crediting rates | 4.99% | ||||
Other | 5.00% and greater | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | $ 0.4 | 1 | |||
Other | 5.00% and greater | Minimum | |||||
Policyholder Account Balance [Line Items] | |||||
Range of guaranteed minimum crediting rates | 5% | ||||
Other | At guaranteed minimum | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | $ 41.8 | 44.3 | |||
Other | At guaranteed minimum | 0.00%-2.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 17.8 | 18.5 | |||
Other | At guaranteed minimum | 3.00%-4.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 23.6 | 24.8 | |||
Other | At guaranteed minimum | 5.00% and greater | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0.4 | 1 | |||
Other | 1-50 basis points above | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 355.4 | 341.1 | |||
Other | 1-50 basis points above | 0.00%-2.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 355.4 | 341.1 | |||
Other | 1-50 basis points above | 3.00%-4.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Other | 1-50 basis points above | 5.00% and greater | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Other | 51-150 basis points above | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Other | 51-150 basis points above | 0.00%-2.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Other | 51-150 basis points above | 3.00%-4.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Other | 51-150 basis points above | 5.00% and greater | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Other | Greater than 150 basis points above | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Other | Greater than 150 basis points above | 0.00%-2.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Other | Greater than 150 basis points above | 3.00%-4.99% | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Other | Greater than 150 basis points above | 5.00% and greater | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | 0 | 0 | |||
Fixed indexed annuities | |||||
Policyholder Account Balance [Line Items] | |||||
Policyholder account balances | $ 9,738.7 | $ 9,068.6 |
DEFERRED ACQUISITION COSTS, P_3
DEFERRED ACQUISITION COSTS, PRESENT VALUE OF FUTURE PROFITS AND SALES INDUCEMENTS - DEFERRED ACQUISITION COSTS (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward] | ||
Beginning of period | $ 1,690.4 | $ 1,553.3 |
Capitalizations | 84.2 | 79 |
Amortization expense | (46.6) | (43) |
End of period | 1,728 | 1,589.3 |
Fixed indexed annuities | ||
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward] | ||
Beginning of period | 365.6 | 313 |
Capitalizations | 21.6 | 22.5 |
Amortization expense | (11.1) | (9.7) |
End of period | 376.1 | 325.8 |
Fixed interest annuities | ||
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward] | ||
Beginning of period | 19.6 | 19 |
Capitalizations | 2.5 | 0.5 |
Amortization expense | (0.9) | (0.9) |
End of period | 21.2 | 18.6 |
Supplemental health | ||
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward] | ||
Beginning of period | 378.8 | 357.5 |
Capitalizations | 14.4 | 12 |
Amortization expense | (7.6) | (7) |
End of period | 385.6 | 362.5 |
Medicare supplement | ||
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward] | ||
Beginning of period | 161.2 | 170.2 |
Capitalizations | 5.8 | 5.5 |
Amortization expense | (7.2) | (7.6) |
End of period | 159.8 | 168.1 |
Long-term care | ||
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward] | ||
Beginning of period | 137.9 | 136.4 |
Capitalizations | 3.4 | 4.8 |
Amortization expense | (3.8) | (3.9) |
End of period | 137.5 | 137.3 |
Interest-sensitive life | ||
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward] | ||
Beginning of period | 212.2 | 196.3 |
Capitalizations | 8.3 | 7.8 |
Amortization expense | (3.5) | (3.4) |
End of period | 217 | 200.7 |
Traditional life | ||
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward] | ||
Beginning of period | 409.1 | 357.6 |
Capitalizations | 28.2 | 21.7 |
Amortization expense | (12.2) | (10.2) |
End of period | 425.1 | 369.1 |
Funding agreements | ||
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward] | ||
Beginning of period | 6 | 3.3 |
Capitalizations | 0 | 4.2 |
Amortization expense | (0.3) | (0.3) |
End of period | $ 5.7 | $ 7.2 |
DEFERRED ACQUISITION COSTS, P_4
DEFERRED ACQUISITION COSTS, PRESENT VALUE OF FUTURE PROFITS AND SALES INDUCEMENTS - PRESENT VALUE OF FUTURE PROFITS (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Movement in Present Value of Future Insurance Profits [Roll Forward] | ||
Beginning of period | $ 203.7 | $ 230.1 |
Amortization expense | (6.1) | (6.9) |
End of period | 197.6 | 223.2 |
Supplemental health | ||
Movement in Present Value of Future Insurance Profits [Roll Forward] | ||
Beginning of period | 154 | 168.1 |
Amortization expense | (3.3) | (3.6) |
End of period | 150.7 | 164.5 |
Medicare supplement | ||
Movement in Present Value of Future Insurance Profits [Roll Forward] | ||
Beginning of period | 27.5 | 36.5 |
Amortization expense | (1.9) | (2.5) |
End of period | 25.6 | 34 |
Long-term care | ||
Movement in Present Value of Future Insurance Profits [Roll Forward] | ||
Beginning of period | 6.2 | 7.3 |
Amortization expense | (0.3) | (0.3) |
End of period | 5.9 | 7 |
Traditional life | ||
Movement in Present Value of Future Insurance Profits [Roll Forward] | ||
Beginning of period | 14.8 | 16.9 |
Amortization expense | (0.5) | (0.5) |
End of period | 14.3 | 16.4 |
Fixed indexed annuities | ||
Movement in Present Value of Future Insurance Profits [Roll Forward] | ||
Beginning of period | 0.8 | 0.9 |
Amortization expense | (0.1) | 0 |
End of period | 0.7 | 0.9 |
Fixed interest annuities | ||
Movement in Present Value of Future Insurance Profits [Roll Forward] | ||
Beginning of period | 0.4 | 0.4 |
Amortization expense | 0 | 0 |
End of period | $ 0.4 | $ 0.4 |
DEFERRED ACQUISITION COSTS, P_5
DEFERRED ACQUISITION COSTS, PRESENT VALUE OF FUTURE PROFITS AND SALES INDUCEMENTS - SALES INDUCEMENTS (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Fixed indexed annuities | ||
Movement in Deferred Sales Inducements [Roll Forward] | ||
Beginning of period | $ 76 | $ 63 |
Capitalizations | 5.4 | 4.6 |
Amortization expense | (2.6) | (2.1) |
End of period | 78.8 | 65.5 |
Fixed interest annuities | ||
Movement in Deferred Sales Inducements [Roll Forward] | ||
Beginning of period | 4.5 | 5 |
Capitalizations | 0.2 | 0.1 |
Amortization expense | (0.2) | (0.3) |
End of period | 4.5 | 4.8 |
Annuity | ||
Movement in Deferred Sales Inducements [Roll Forward] | ||
Beginning of period | 80.5 | 68 |
Capitalizations | 5.6 | 4.7 |
Amortization expense | (2.8) | (2.4) |
End of period | $ 83.3 | $ 70.3 |
EARNINGS PER SHARE - BASIC AND
EARNINGS PER SHARE - BASIC AND DILUTED EARNINGS PER SHARE (Details) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Net income (loss) for basic earnings per share | $ (0.8) | $ 183.4 |
Net income (loss) for diluted earnings per share | $ (0.8) | $ 183.4 |
Shares: | ||
Weighted average shares outstanding for basic earnings per share (in shares) | 114,545 | 118,622 |
Effect of dilutive securities on weighted average shares: | ||
Amounts related to employee benefit plans (in shares) | 0 | 2,380 |
Weighted average shares outstanding for diluted earnings per share (in shares) | 114,545 | 121,002 |
Common share equivalent excluded from computation of earnings per share (in shares) | 2,182 |
BUSINESS SEGMENTS - NARRATIVE (
BUSINESS SEGMENTS - NARRATIVE (Details) | 3 Months Ended |
Mar. 31, 2023 product_line | |
Segment Reporting [Abstract] | |
Number of product lines | 3 |
BUSINESS SEGMENTS - SCHEDULE OF
BUSINESS SEGMENTS - SCHEDULE OF SEGMENT REPORTING INFORMATION BY SEGMENT (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenues: | ||
Insurance policy income | $ 625.5 | $ 625 |
Fee revenue and other income: | 52.1 | 42.4 |
Total segment revenues | 1,000.5 | 869.1 |
Expenses: | ||
Insurance policy benefits | 609.7 | 333.9 |
Interest expense | 54.7 | 23.8 |
Impact of annual option forfeitures related to fixed indexed annuity surrenders | 0 | (1.6) |
Other expenses | 271.7 | 218.3 |
Total segment expenses | 924.1 | 784.6 |
Operating earnings before taxes | 76.4 | 84.5 |
Income tax expense on operating income | 17.8 | 20 |
Net operating income | 58.6 | 64.5 |
Operating Segments | ||
Revenues: | ||
Total segment revenues | 1,000.5 | 869.1 |
Expenses: | ||
Total segment expenses | 924.1 | 784.6 |
Insurance Product Lines | ||
Expenses: | ||
Allocated expenses | 157.5 | 144.8 |
Total insurance product margin | 221.2 | 207.2 |
Operating earnings before taxes | 63.7 | 62.4 |
Investment income not allocated to product lines | ||
Revenues: | ||
Change in market values of the underlying options supporting the fixed indexed annuity and life products (offset by market value changes credited to policyholder balances) | 18.6 | (71.9) |
Investment income not allocated to product lines | 67.8 | 46.6 |
Expenses: | ||
Interest credited | 7.2 | 6.9 |
Market value changes of options credited to fixed indexed annuity and life policyholders | 18.6 | (71.9) |
Interest expense | 37.4 | 18.1 |
Amortization | 0.4 | 0.4 |
Other expenses | 7.3 | (4.2) |
Total insurance product margin | 15.5 | 27 |
Fee income | ||
Revenues: | ||
Fee revenue and other income: | 51.3 | 40.3 |
Expenses: | ||
Commissions and other operating expenses | 35.8 | 30.4 |
Total insurance product margin | 15.5 | 9.9 |
Amounts netted in expenses not allocated to product lines | ||
Revenues: | ||
Fee revenue and other income: | 1.6 | 2.8 |
Expenses: | ||
Expenses not allocated to product lines | 19.9 | 17.6 |
Total insurance product margin | (18.3) | (14.8) |
Annuity: | Insurance Product Lines | ||
Revenues: | ||
Insurance policy income | 5.1 | 5 |
Net investment income | 125.4 | 117.5 |
Total insurance product line revenue | 130.5 | 122.5 |
Expenses: | ||
Insurance policy benefits | 8.7 | 9.5 |
Interest credited | 48.1 | 42.5 |
Amortization and non-deferred commissions | 16.4 | 14.6 |
Total expenses | 73.2 | 66.6 |
Total insurance product margin | 57.3 | 55.9 |
Health: | Insurance Product Lines | ||
Revenues: | ||
Insurance policy income | 401.4 | 406.7 |
Net investment income | 74 | 73.3 |
Total insurance product line revenue | 475.4 | 480 |
Expenses: | ||
Insurance policy benefits | 318.1 | 323.1 |
Amortization and non-deferred commissions | 40.8 | 41.6 |
Total expenses | 358.9 | 364.7 |
Total insurance product margin | 116.5 | 115.3 |
Life: | Insurance Product Lines | ||
Revenues: | ||
Insurance policy income | 219 | 213.3 |
Net investment income | 36.3 | 35.5 |
Total insurance product line revenue | 255.3 | 248.8 |
Expenses: | ||
Insurance policy benefits | 147.2 | 153.1 |
Interest credited | 12.1 | 12 |
Amortization and non-deferred commissions | 48.6 | 47.7 |
Total expenses | 207.9 | 212.8 |
Total insurance product margin | 47.4 | 36 |
Allocated expenses | Insurance Product Lines | ||
Expenses: | ||
Total insurance product margin | $ (157.5) | $ (144.8) |
BUSINESS SEGMENTS - RECONCILIAT
BUSINESS SEGMENTS - RECONCILIATION OF OPERATING PROFIT (LOSS) FROM SEGMENTS TO CONSOLIDATED (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Total segment revenues | $ 1,000.5 | $ 869.1 |
Total investment losses | (14.6) | 18.8 |
Total revenues | 1,006 | 842.9 |
Total segment expenses | 924.1 | 784.6 |
Total benefits and expenses | 1,007 | 602.6 |
Income (loss) before income taxes | (1) | 240.3 |
Income tax expense (benefit) on period income (loss) | (0.2) | 56.9 |
Net income (loss) | (0.8) | 183.4 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total segment revenues | 1,000.5 | 869.1 |
Total segment expenses | 924.1 | 784.6 |
Segment Reconciling Items | ||
Segment Reporting Information [Line Items] | ||
Total investment losses | (14.6) | (32.7) |
Revenues related to earnings attributable to VIEs | 20.1 | 6.5 |
Insurance policy benefits - changes in fair value of embedded derivative liabilities and market risk benefits | 65.1 | (165.4) |
Expenses attributable to VIEs | 17.8 | 6.1 |
Fair value changes related to agent deferred compensation plan | $ 0 | $ (22.7) |
ACCOUNTING FOR DERIVATIVES - FA
ACCOUNTING FOR DERIVATIVES - FAIR VALUE BY BALANCE SHEET LOCATION (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Fixed indexed call options | ||
Derivatives, Fair Value [Line Items] | ||
Gross amounts recognized | $ 108.2 | $ 56.7 |
Not Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Gross amounts recognized | 91.8 | 38.9 |
Gross derivative liability | 1,347.9 | 1,297 |
Not Designated as Hedging Instrument | Fixed indexed call options | Other invested assets: | ||
Derivatives, Fair Value [Line Items] | ||
Gross amounts recognized | 108.2 | 56.7 |
Not Designated as Hedging Instrument | Reinsurance receivables | Reinsurance receivables | ||
Derivatives, Fair Value [Line Items] | ||
Gross amounts recognized | (16.4) | (17.8) |
Not Designated as Hedging Instrument | Fixed indexed products | Future policy benefits: | ||
Derivatives, Fair Value [Line Items] | ||
Gross derivative liability | $ 1,347.9 | $ 1,297 |
ACCOUNTING FOR DERIVATIVES - NA
ACCOUNTING FOR DERIVATIVES - NARRATIVE (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Derivative [Line Items] | ||
Embedded derivative | $ 88 | |
Fixed Index Call Options | ||
Derivative [Line Items] | ||
Notional amount | $ 2,700 | $ 2,800 |
ACCOUNTING FOR DERIVATIVES - SC
ACCOUNTING FOR DERIVATIVES - SCHEDULE PRE-TAX GAINS (LOSSES) RECOGNIZED IN NET INCOME FOR DERIVATIVE INSTRUMENTS (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Derivative [Line Items] | ||
Gains (losses) on derivatives not designated as hedging instruments | $ 20 | $ (79.4) |
Net investment income (loss) from policyholder and other special-purpose portfolios | Fixed indexed call options | ||
Derivative [Line Items] | ||
Gains (losses) on derivatives not designated as hedging instruments | 18.6 | (72.9) |
Net realized gains (losses) | Embedded derivative related to modified coinsurance agreement | Coinsurance agreements | ||
Derivative [Line Items] | ||
Gains (losses) on derivatives not designated as hedging instruments | $ 1.4 | $ (6.5) |
ACCOUNTING FOR DERIVATIVES - DE
ACCOUNTING FOR DERIVATIVES - DERIVATIVES WITH MASTER NETTING ARRANGEMENTS (Details) - Fixed indexed call options - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Derivative [Line Items] | ||
Gross amounts recognized | $ 108.2 | $ 56.7 |
Gross amounts offset in the balance sheet | 0 | 0 |
Net amounts of assets presented in the balance sheet | 108.2 | 56.7 |
Financial instruments | 0 | 0 |
Cash collateral received | 0 | 0 |
Net amount | $ 108.2 | $ 56.7 |
REINSURANCE (Details)
REINSURANCE (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Insurance [Abstract] | ||
Ceded premiums written | $ 48.3 | $ 52 |
Reinsurance recoveries benefits | 134.9 | 93.9 |
Assumed premiums written | 4.1 | 4.9 |
Insurance policy benefits related to reinsurance assumed | $ 4.7 | $ 6.1 |
INCOME TAXES - COMPONENTS OF TA
INCOME TAXES - COMPONENTS OF TAX EXPENSE (BENEFIT) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Current tax expense | $ 14 | $ 4.4 |
Deferred tax expense (benefit) | (14.2) | 52.5 |
Total income tax expense (benefit) | $ (0.2) | $ 56.9 |
INCOME TAXES - RECONCILIATION O
INCOME TAXES - RECONCILIATION OF CORPORATE TAX RATE (Details) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
U.S. statutory corporate rate | 21% | 21% |
Non-taxable income and nondeductible benefits, net | (0.40%) | 0% |
State taxes | 2.70% | 2.70% |
Effective tax rate | 23.30% | 23.70% |
INCOME TAXES - DEFERRED ASSETS
INCOME TAXES - DEFERRED ASSETS AND LIABILITIES (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | Jan. 01, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||||
Net federal operating loss carryforwards | $ 149.9 | $ 166 | ||
Net state operating loss carryforwards | 2.5 | 2.5 | ||
Insurance liabilities | 329.4 | 298.5 | ||
Indirect costs allocable to self-constructed real estate assets | 224.4 | 214.8 | ||
Accumulated other comprehensive loss | 470.1 | 552.4 | ||
Other | 0 | 7.3 | ||
Gross deferred tax assets | 1,176.3 | 1,241.5 | ||
Deferred tax liabilities: | ||||
Investments | (34.8) | (37.2) | ||
Present value of future profits and deferred acquisition costs | (152.1) | (148.9) | ||
Other | (1.5) | 0 | ||
Gross deferred tax liabilities | (188.4) | (186.1) | ||
Net deferred tax assets | 987.9 | 1,055.4 | ||
Current income taxes prepaid | 0.2 | 8 | ||
Income tax assets, net | $ 988.1 | $ 1,063.4 | $ 806.4 | $ 199.4 |
INCOME TAXES - NARRATIVE (Detai
INCOME TAXES - NARRATIVE (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Operating Loss Carryforwards [Line Items] | ||
Deferred tax assets more likely than not to be realized through future taxable earnings | $ 987.9 | $ 1,055.4 |
Loss limitation based on income of life insurance company, percent | 35% | |
Loss limitation based on loss of non-life entities, percent | 35% | |
Federal long-term tax exempt rate | 2.92% | |
Ownership change threshold restricting NOL usage | 50% | |
Net state operating loss carryforwards | $ 2.5 | $ 2.5 |
Federal | ||
Operating Loss Carryforwards [Line Items] | ||
Net federal operating loss carryforwards | $ 700 |
INCOME TAXES - NET OPERATING LO
INCOME TAXES - NET OPERATING LOSSES (Details) $ in Millions | Mar. 31, 2023 USD ($) |
Operating Loss Carryforwards [Line Items] | |
Total federal non-life NOLs | $ 714 |
2023 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 127.4 |
2025 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 85.2 |
2026 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 149.9 |
2027 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 10.8 |
2028 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 80.3 |
2029 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 213.2 |
2030 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 0.3 |
2031 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 0.2 |
2032 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 44.4 |
2033 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 0.6 |
2034 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 0.9 |
2035 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $ 0.8 |
NOTES PAYABLE - DIRECT CORPOR_3
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS - SCHEDULE OF LONG-TERM DEBT INSTRUMENTS (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Notes payable – direct corporate obligations | $ 1,139.2 | $ 1,138.8 |
Unamortized debt issue costs | $ (10.8) | (11.2) |
Senior Notes | 5.250% Senior Notes due May 2025 | ||
Debt Instrument [Line Items] | ||
Interest rate | 5.25% | |
Notes payable – direct corporate obligations | $ 500 | 500 |
Senior Notes | 5.250% Senior Notes due May 2029 | ||
Debt Instrument [Line Items] | ||
Interest rate | 5.25% | |
Notes payable – direct corporate obligations | $ 500 | 500 |
Subordinated Debt | 5.125% Subordinated Debentures due November 2060 | ||
Debt Instrument [Line Items] | ||
Interest rate | 5.125% | |
Notes payable – direct corporate obligations | $ 150 | 150 |
Revolving Credit Agreement | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Notes payable – direct corporate obligations | $ 0 | $ 0 |
NOTES PAYABLE - DIRECT CORPOR_4
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS - NARRATIVE (Details) - USD ($) | Jul. 16, 2021 | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | |||
Outstanding amount | $ 1,139,200,000 | $ 1,138,800,000 | |
Line of Credit | Revolving Credit Agreement | |||
Debt Instrument [Line Items] | |||
Line of credit maximum borrowing capacity | $ 250,000,000 | ||
Total capitalization percentage | 15% | ||
Debt covenant, required minimum debt to total capitalization ratio | 35% | ||
Debt covenant, actual debt to total capitalization ratio at period end | 20.90% | ||
Debt covenant, minimum required consolidated net worth, component one, amount | $ 2,674,000,000 | ||
Debt covenant, minimum required consolidated net worth, component two, as a percent of net equity proceeds received from issuance and sale of equity interests | 25% | ||
Debt covenant, actual consolidated net worth at period end | $ 3,696,200,000 | ||
Debt covenant, required minimum consolidated net worth, amount | 2,696,200,000 | ||
Outstanding amount | $ 0 | $ 0 | |
Line of Credit | Revolving Credit Agreement | SOFR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.10% | ||
Line of Credit | Revolving Credit Agreement | Eurodollar | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.375% | ||
Line of Credit | Revolving Credit Agreement | Eurodollar | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.125% | ||
Line of Credit | Revolving Credit Agreement | Base Rate | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.375% | ||
Line of Credit | Revolving Credit Agreement | Base Rate | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.125% |
INVESTMENT BORROWINGS - NARRATI
INVESTMENT BORROWINGS - NARRATIVE (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 USD ($) subsidiary | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Debt Instrument [Line Items] | |||
Number of insurance subsidiaries that are members of the FHLB | subsidiary | 3 | ||
Investment borrowings | $ 1,839.6 | $ 1,639.5 | |
Interest expense on FHLB borrowings | 21.7 | $ 2.4 | |
Federal Home Loan Bank Advances | |||
Debt Instrument [Line Items] | |||
Federal home loan bank stock | 79.6 | ||
Investment borrowings | 1,839.6 | ||
Federal home loan bank advances, collateral pledged | 2,400 | ||
Aggregate fee to prepay all fixed rate FHLB borrowings | $ 1 |
INVESTMENT BORROWINGS - TERMS O
INVESTMENT BORROWINGS - TERMS OF THE BORROWINGS FROM THE FHLB (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 1,839.6 | $ 1,639.5 |
Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | 1,839.6 | |
Borrowings due April 2024 at 4.973% | Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 100 | |
Interest rate | 4.973% | |
Borrowings due May 2024 at 5.202% | Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 22 | |
Interest rate | 5.202% | |
Borrowings due July 2024 at 1.990% | Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 15.5 | |
Interest rate | 1.99% | |
Borrowings Due August 2024 at 0.640% | Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 27 | |
Interest rate | 0.64% | |
Borrowings due September 2024 at 5.439% | Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 25 | |
Interest rate | 5.439% | |
Borrowings due May 2025 at 5.114% | Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 21.7 | |
Interest rate | 5.114% | |
Borrowings due June 2025 at 2.940% | Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 18.4 | |
Interest rate | 2.94% | |
Borrowings due September 2025 at 5.170% | Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 125 | |
Interest rate | 5.17% | |
Borrowings due October 2025 at 5.246% | Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 100 | |
Interest rate | 5.246% | |
Borrowings due October 2025 at 5.223% | Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 100 | |
Interest rate | 5.223% | |
Borrowings due October 2025 at 5.185% | Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 57.7 | |
Interest rate | 5.185% | |
Borrowings due November 2025 at 5.226% | Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 50 | |
Interest rate | 5.226% | |
Borrowings due January 2026 at 5.168% | Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 50 | |
Interest rate | 5.168% | |
Borrowings due January 2026 at 5.195% | Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 50 | |
Interest rate | 5.195% | |
Borrowings due January 2026 at 5.064% | Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 100 | |
Interest rate | 5.064% | |
Borrowings Due January 2026 at 5.487% | Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 15 | |
Interest rate | 5.487% | |
Borrowings due May 2026 at 4.954% | Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 21.8 | |
Interest rate | 4.954% | |
Borrowings due May 2026 at 5.090% | Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 50 | |
Interest rate | 5.09% | |
Borrowings Due December 2026 at 5.169% | Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 75 | |
Interest rate | 5.169% | |
Borrowings Due January 2027 at 5.060% | Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 75 | |
Interest rate | 5.06% | |
Borrowings Due January 2027 at 5.077% | Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 50 | |
Interest rate | 5.077% | |
Borrowings Due January 2027 at 5.204% | Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 50 | |
Interest rate | 5.204% | |
Borrowings Due February 2027 at 5.133% | Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 100 | |
Interest rate | 5.133% | |
Borrowings due April 2027 at 5.135% | Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 50 | |
Interest rate | 5.135% | |
Borrowings due May 2027 at 5.145% | Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 50 | |
Interest rate | 5.145% | |
Borrowings due June 2027 at 5.190% | Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 100 | |
Interest rate | 5.19% | |
Borrowings due June 2027 at 5.413% | Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 10 | |
Interest rate | 5.413% | |
Borrowings Due January 2028 at 5.174% | Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 75 | |
Interest rate | 5.174% | |
Borrowings Due January 2028 at 5.382% | Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 50 | |
Interest rate | 5.382% | |
Borrowings Due January 2028 at 5.236% | Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 50 | |
Interest rate | 5.236% | |
Borrowings Due February 2028 at 5.294% | Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 34.5 | |
Interest rate | 5.294% | |
Borrowings Due February 2028 at 5.156% | Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 21 | |
Interest rate | 5.156% | |
Borrowings Due February 2028 at 5.153% | Federal Home Loan Bank Advances | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investment borrowings | $ 100 | |
Interest rate | 5.153% |
CHANGES IN COMMON STOCK (Detail
CHANGES IN COMMON STOCK (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 1 Months Ended | 3 Months Ended | |
May 31, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | |
Equity, Class of Treasury Stock [Line Items] | |||
Common stock repurchased | $ 15.1 | $ 100 | |
Stock repurchase program, remaining repurchase authorized amount | 171.8 | ||
Common stock dividends declared | $ 16.4 | $ 16 | |
Dividends (in dollars per share) | $ 0.14 | ||
Common stock | |||
Equity, Class of Treasury Stock [Line Items] | |||
Stock repurchased and retired during period (in shares) | 633 | 4,057 | |
Dividends (in dollars per share) | $ 0.14 | ||
Common stock | Subsequent Event | |||
Equity, Class of Treasury Stock [Line Items] | |||
Additional of share repurchase program remaining authorized amount | $ 500 | ||
Dividends (in dollars per share) | $ 0.15 |
LITIGATION AND OTHER LEGAL PR_2
LITIGATION AND OTHER LEGAL PROCEEDINGS (Details) | Mar. 25, 2022 policyholder | Apr. 09, 2019 trust_agreement |
Commitments and Contingencies Disclosure [Abstract] | ||
Number of trust agreements | trust_agreement | 4 | |
Number of Policyholders | policyholder | 2,000 |
CONSOLIDATED STATEMENT OF CAS_4
CONSOLIDATED STATEMENT OF CASH FLOWS (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (0.8) | $ 183.4 |
Adjustments to reconcile net income (loss) to net cash from operating activities: | ||
Amortization and depreciation | 65.7 | 61.1 |
Income taxes | (6.4) | 42.3 |
Insurance liabilities | 173.3 | (152.4) |
Accrual, amortization and fair value changes included in investment income | (27.9) | 52.2 |
Deferral of policy acquisition costs | (89.8) | (83.7) |
Net investment losses | 14.6 | 32.7 |
Other | (46.8) | (79.2) |
Net cash from operating activities | 81.9 | 56.4 |
Amounts related to employee benefit plans | $ 6.5 | $ 7.2 |
INVESTMENTS IN VARIABLE INTER_3
INVESTMENTS IN VARIABLE INTEREST ENTITIES - BALANCE SHEET ITEMS (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | Jan. 01, 2021 | Dec. 31, 2020 |
Assets: | ||||
Investments held by variable interest entities | $ 1,017.9 | $ 1,077.6 | ||
Cash and cash equivalents held by variable interest entities | 97.1 | 69.2 | ||
Accrued investment income | 241.3 | 235.6 | ||
Income tax assets, net | 988.1 | 1,063.4 | $ 806.4 | $ 199.4 |
Other assets | 669 | 580.8 | ||
Total assets | 34,015 | 33,133.1 | 35,339.9 | |
Liabilities: | ||||
Other liabilities | 681.3 | 693.9 | ||
Borrowings related to variable interest entities | 1,065.4 | 1,104.6 | ||
Total liabilities | 31,983.2 | 31,364.3 | $ 29,855.7 | |
Investments held by variable interest entities - corporate securities | ||||
Assets: | ||||
Investments held by variable interest entities | 1,017.9 | 1,077.6 | ||
Notes receivable of VIEs held by subsidiaries | (113.8) | (113.8) | ||
Cash and cash equivalents held by variable interest entities | 97.1 | 69.2 | ||
Accrued investment income | 4 | 3.5 | ||
Income tax assets, net | 16.6 | 19.6 | ||
Other assets | 3.7 | 1.7 | ||
Total assets | 1,025.5 | 1,057.8 | ||
Liabilities: | ||||
Other liabilities | 22.9 | 26.9 | ||
Borrowings related to variable interest entities | 1,065.4 | 1,104.6 | ||
Notes payable of VIEs held by subsidiaries | 0 | 0 | ||
Total liabilities | 1,088.3 | 1,131.5 | ||
Investments held by variable interest entities - corporate securities | VIEs | ||||
Assets: | ||||
Investments held by variable interest entities | 1,017.9 | 1,077.6 | ||
Notes receivable of VIEs held by subsidiaries | 0 | 0 | ||
Cash and cash equivalents held by variable interest entities | 97.1 | 69.2 | ||
Accrued investment income | 4 | 3.5 | ||
Income tax assets, net | 16.6 | 19.6 | ||
Other assets | 4.5 | 2.5 | ||
Total assets | 1,140.1 | 1,172.4 | ||
Liabilities: | ||||
Other liabilities | 26.8 | 29.3 | ||
Borrowings related to variable interest entities | 1,065.4 | 1,104.6 | ||
Notes payable of VIEs held by subsidiaries | 126.1 | 126.1 | ||
Total liabilities | 1,218.3 | 1,260 | ||
Investments held by variable interest entities - corporate securities | Eliminations | ||||
Assets: | ||||
Investments held by variable interest entities | 0 | 0 | ||
Notes receivable of VIEs held by subsidiaries | (113.8) | (113.8) | ||
Cash and cash equivalents held by variable interest entities | 0 | 0 | ||
Accrued investment income | 0 | 0 | ||
Income tax assets, net | 0 | 0 | ||
Other assets | (0.8) | (0.8) | ||
Total assets | (114.6) | (114.6) | ||
Liabilities: | ||||
Other liabilities | (3.9) | (2.4) | ||
Borrowings related to variable interest entities | 0 | 0 | ||
Notes payable of VIEs held by subsidiaries | (126.1) | (126.1) | ||
Total liabilities | $ (130) | $ (128.5) |
INVESTMENTS IN VARIABLE INTER_4
INVESTMENTS IN VARIABLE INTEREST ENTITIES - NARRATIVE (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 USD ($) investment | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Variable Interest Entity [Line Items] | |||
Total amortized cost | $ 1,060.3 | ||
Variable interest entity, gross unrealized gains fixed maturity securities | 1.4 | ||
Variable interest entity gross unrealized losses fixed maturity securities | 40.3 | ||
Variable interest entity, allowance for credit losses fixed maturity securities | 3.5 | ||
Estimated fair value of fixed maturity securities | 1,017.9 | ||
Variable interest entities net realized gain (losses) on investments | (0.6) | $ (3.2) | |
Variable interest entities net loss from sale of fixed maturity investments | (2.6) | (0.8) | |
Variable interest entities, change in allowance for credit losses | 2 | (2.2) | |
Variable interest entity, gross investment losses | 2.6 | 0.8 | |
Variable interest entities, investments sold | $ 5.6 | 11.7 | |
Variable interest entities change in market value of other investments | $ (0.2) | ||
Number of investments held by VIE, in default | investment | 0 | ||
Fair value of investments in unrealized loss position for less than 12 months | $ 3,088.7 | $ 7,636.9 | |
Gross unrealized losses of investments in unrealized loss position for less than 12 months | 108.6 | 835.2 | |
Fair value of investments in unrealized loss position for more than 12 months | 6,207.4 | 1,897.5 | |
Gross unrealized losses of investments in unrealized loss position for more than 12 months | 950.9 | 471.6 | |
Investments held in limited partnerships | 578.5 | ||
Unfunded commitments to limited partnerships | 431 | ||
Investments held by variable interest entities - corporate securities | |||
Variable Interest Entity [Line Items] | |||
Fair value of investments in unrealized loss position for less than 12 months | 214.9 | 392.2 | |
Gross unrealized losses of investments in unrealized loss position for less than 12 months | 3.3 | 14.2 | |
Fair value of investments in unrealized loss position for more than 12 months | 571.3 | 477.9 | |
Gross unrealized losses of investments in unrealized loss position for more than 12 months | $ 19.4 | $ 17.3 |
INVESTMENTS IN VARIABLE INTER_5
INVESTMENTS IN VARIABLE INTEREST ENTITIES - CHANGES IN ALLOWANCE (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Debt Securities, Available-for-sale, Allowance for Credit Loss [Roll Forward] | ||
Allowance at the beginning of the period | $ 56 | $ 7.6 |
Additions for securities for which credit losses were not previously recorded | 3 | 14.4 |
Additions for purchased securities with deteriorated credit | 0 | 0 |
Additions (reductions) for securities where an allowance was previously recorded | 0.8 | 15 |
Reduction for securities sold during the period | (0.7) | (0.4) |
Reduction for securities for which the Company made the decision to sell where an allowance was previously recorded | 0 | 0 |
Write-offs | 0 | 0 |
Recoveries of previously written-off amount | 0 | 0 |
Allowance at the end of the period | 59.1 | 36.6 |
Corporate securities | ||
Debt Securities, Available-for-sale, Allowance for Credit Loss [Roll Forward] | ||
Allowance at the beginning of the period | 54.4 | 7.4 |
Additions for securities for which credit losses were not previously recorded | 3 | 14 |
Additions for purchased securities with deteriorated credit | 0 | 0 |
Additions (reductions) for securities where an allowance was previously recorded | 0.5 | 14.6 |
Reduction for securities sold during the period | (0.7) | (0.4) |
Reduction for securities for which the Company made the decision to sell where an allowance was previously recorded | 0 | 0 |
Write-offs | 0 | 0 |
Recoveries of previously written-off amount | 0 | 0 |
Allowance at the end of the period | 57.2 | 35.6 |
Investments held by variable interest entities - corporate securities | Corporate securities | ||
Debt Securities, Available-for-sale, Allowance for Credit Loss [Roll Forward] | ||
Allowance at the beginning of the period | 5.5 | 3.7 |
Additions for securities for which credit losses were not previously recorded | 0.3 | 1.5 |
Additions for purchased securities with deteriorated credit | 0 | 0 |
Additions (reductions) for securities where an allowance was previously recorded | (0.7) | 1.3 |
Reduction for securities sold during the period | (1.6) | (0.6) |
Reduction for securities for which the Company made the decision to sell where an allowance was previously recorded | 0 | 0 |
Write-offs | 0 | 0 |
Recoveries of previously written-off amount | 0 | 0 |
Allowance at the end of the period | $ 3.5 | $ 5.9 |
INVESTMENTS IN VARIABLE INTER_6
INVESTMENTS IN VARIABLE INTEREST ENTITIES - SCHEDULE OF VIEs (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Amortized cost | ||
Due in one year or less | $ 140.1 | $ 112 |
Due after one year through five years | 2,209.3 | 1,913.7 |
Due after five years through ten years | 1,871.8 | 2,098.9 |
Amortized cost | 23,517.9 | 23,384.2 |
Estimated fair value | ||
Due in one year or less | 138.7 | 110.8 |
Due after one year through five years | 2,080 | 1,790.2 |
Due after five years through ten years | 1,742.8 | 1,910.4 |
Estimated fair value | 21,107.1 | $ 20,353.4 |
Investments held by variable interest entities - corporate securities | ||
Amortized cost | ||
Due in one year or less | 5.4 | |
Due after one year through five years | 782.3 | |
Due after five years through ten years | 272.6 | |
Amortized cost | 1,060.3 | |
Estimated fair value | ||
Due in one year or less | 4.7 | |
Due after one year through five years | 752.8 | |
Due after five years through ten years | 260.4 | |
Estimated fair value | $ 1,017.9 |
FAIR VALUE MEASUREMENTS - NARRA
FAIR VALUE MEASUREMENTS - NARRATIVE (Details) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair value of level 3 fixed maturity securities and trading securities valued using broker quotes, percentage | 86% |
Available for sale fixed maturities classified as level 3, investment grade, percent | 87% |
Available for sale fixed maturities classified as Level 3 and corporate securities | 59% |
FAIR VALUE MEASUREMENTS - MEASU
FAIR VALUE MEASUREMENTS - MEASUREMENTS BY INPUT LEVEL (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Jan. 01, 2021 | Dec. 31, 2020 |
Assets: | |||||
Estimated fair value | $ 21,107.1 | $ 20,353.4 | |||
Equity securities - corporate securities | 106.1 | 135.3 | |||
Total trading securities | 208.1 | 207.9 | |||
Investments held by variable interest entities - corporate securities | 1,017.9 | 1,077.6 | |||
Total other invested assets | 1,097.1 | 1,034.7 | |||
Market risk benefit asset | 57.8 | 65.3 | $ 16.9 | $ 2.5 | $ 0 |
Assets held in separate accounts | 2.8 | 2.7 | |||
Liabilities: | |||||
Market risk benefit liability | 17.6 | 11.3 | $ 63.8 | $ 114.8 | $ 0 |
Corporate securities | |||||
Assets: | |||||
Estimated fair value | 11,976.4 | 11,712.7 | |||
United States Treasury securities and obligations of United States government corporations and agencies | |||||
Assets: | |||||
Estimated fair value | 170.1 | 158.7 | |||
States and political subdivisions | |||||
Assets: | |||||
Estimated fair value | 2,462.6 | 2,388.5 | |||
Foreign governments | |||||
Assets: | |||||
Estimated fair value | 78.6 | 74.7 | |||
Asset-backed securities | |||||
Assets: | |||||
Estimated fair value | 1,340.2 | 1,287 | |||
Agency residential mortgage-backed securities | |||||
Assets: | |||||
Estimated fair value | 215.9 | 175 | |||
Non-agency residential mortgage-backed securities | |||||
Assets: | |||||
Estimated fair value | 1,640.5 | 1,548.5 | |||
Collateralized loan obligations | |||||
Assets: | |||||
Estimated fair value | 918.9 | 785.9 | |||
Commercial mortgage-backed securities | |||||
Assets: | |||||
Estimated fair value | 2,303.9 | 2,222.4 | |||
Significant unobservable inputs (Level 3) | |||||
Assets: | |||||
Total assets carried at fair value by category | 369 | 418.7 | |||
Fair Value, Measurements, Recurring | |||||
Assets: | |||||
Total trading securities | 208.1 | 207.9 | |||
Investments held by variable interest entities - corporate securities | 1,017.9 | 1,077.6 | |||
Derivatives | 108.2 | 56.7 | |||
Residual tranches | 20.1 | 18.3 | |||
Total other invested assets | 128.3 | 75 | |||
Market risk benefit asset | 57.8 | 65.3 | |||
Assets held in separate accounts | 2.8 | 2.7 | |||
Total assets carried at fair value by category | 22,628.1 | 21,917.2 | |||
Liabilities: | |||||
Market risk benefit liability | 17.6 | 11.3 | |||
Embedded derivatives associated with fixed indexed annuity products (classified as policyholder account liabilities) | 1,347.9 | 1,297 | |||
Total liabilities carried at fair value by category | 1,365.5 | 1,308.3 | |||
Fair Value, Measurements, Recurring | Corporate securities | |||||
Assets: | |||||
Estimated fair value | 11,976.4 | 11,712.7 | |||
Equity securities - corporate securities | 106.1 | 135.3 | |||
Fair Value, Measurements, Recurring | United States Treasury securities and obligations of United States government corporations and agencies | |||||
Assets: | |||||
Estimated fair value | 170.1 | 158.7 | |||
Fair Value, Measurements, Recurring | States and political subdivisions | |||||
Assets: | |||||
Estimated fair value | 2,462.6 | 2,388.5 | |||
Fair Value, Measurements, Recurring | Foreign governments | |||||
Assets: | |||||
Estimated fair value | 78.6 | 74.7 | |||
Fair Value, Measurements, Recurring | Asset-backed securities | |||||
Assets: | |||||
Estimated fair value | 1,340.2 | 1,287 | |||
Total trading securities | 25.5 | 15.1 | |||
Fair Value, Measurements, Recurring | Agency residential mortgage-backed securities | |||||
Assets: | |||||
Estimated fair value | 215.9 | 175 | |||
Total trading securities | 0.3 | 0.3 | |||
Fair Value, Measurements, Recurring | Non-agency residential mortgage-backed securities | |||||
Assets: | |||||
Estimated fair value | 1,640.5 | 1,548.5 | |||
Total trading securities | 58.8 | 60.7 | |||
Fair Value, Measurements, Recurring | Collateralized loan obligations | |||||
Assets: | |||||
Estimated fair value | 918.9 | 785.9 | |||
Fair Value, Measurements, Recurring | Commercial mortgage-backed securities | |||||
Assets: | |||||
Estimated fair value | 2,303.9 | 2,222.4 | |||
Total trading securities | 123.5 | 131.8 | |||
Fair Value, Measurements, Recurring | Total fixed maturities, available for sale | |||||
Assets: | |||||
Estimated fair value | 21,107.1 | 20,353.4 | |||
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | |||||
Assets: | |||||
Total trading securities | 0 | 0 | |||
Investments held by variable interest entities - corporate securities | 0 | 0 | |||
Derivatives | 0 | 0 | |||
Residual tranches | 0 | 0 | |||
Total other invested assets | 0 | 0 | |||
Market risk benefit asset | 0 | 0 | |||
Assets held in separate accounts | 0 | 0 | |||
Total assets carried at fair value by category | 31.1 | 59.6 | |||
Liabilities: | |||||
Market risk benefit liability | 0 | 0 | |||
Embedded derivatives associated with fixed indexed annuity products (classified as policyholder account liabilities) | 0 | 0 | |||
Total liabilities carried at fair value by category | 0 | 0 | |||
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | Corporate securities | |||||
Assets: | |||||
Estimated fair value | 0 | 0 | |||
Equity securities - corporate securities | 31.1 | 59.6 | |||
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | United States Treasury securities and obligations of United States government corporations and agencies | |||||
Assets: | |||||
Estimated fair value | 0 | 0 | |||
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | States and political subdivisions | |||||
Assets: | |||||
Estimated fair value | 0 | 0 | |||
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | Foreign governments | |||||
Assets: | |||||
Estimated fair value | 0 | 0 | |||
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | Asset-backed securities | |||||
Assets: | |||||
Estimated fair value | 0 | 0 | |||
Total trading securities | 0 | 0 | |||
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | Agency residential mortgage-backed securities | |||||
Assets: | |||||
Estimated fair value | 0 | 0 | |||
Total trading securities | 0 | 0 | |||
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | Non-agency residential mortgage-backed securities | |||||
Assets: | |||||
Estimated fair value | 0 | 0 | |||
Total trading securities | 0 | 0 | |||
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | Collateralized loan obligations | |||||
Assets: | |||||
Estimated fair value | 0 | 0 | |||
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | Commercial mortgage-backed securities | |||||
Assets: | |||||
Estimated fair value | 0 | 0 | |||
Total trading securities | 0 | 0 | |||
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | Total fixed maturities, available for sale | |||||
Assets: | |||||
Estimated fair value | 0 | 0 | |||
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | |||||
Assets: | |||||
Total trading securities | 207.6 | 207.4 | |||
Investments held by variable interest entities - corporate securities | 1,017.9 | 1,077.6 | |||
Derivatives | 108.2 | 56.7 | |||
Residual tranches | 0.9 | 0 | |||
Total other invested assets | 109.1 | 56.7 | |||
Market risk benefit asset | 0 | 0 | |||
Assets held in separate accounts | 2.8 | 2.7 | |||
Total assets carried at fair value by category | 22,228 | 21,438.9 | |||
Liabilities: | |||||
Market risk benefit liability | 0 | 0 | |||
Embedded derivatives associated with fixed indexed annuity products (classified as policyholder account liabilities) | 0 | 0 | |||
Total liabilities carried at fair value by category | 0 | 0 | |||
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Corporate securities | |||||
Assets: | |||||
Estimated fair value | 11,848.6 | 11,584.9 | |||
Equity securities - corporate securities | 0 | 0 | |||
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | United States Treasury securities and obligations of United States government corporations and agencies | |||||
Assets: | |||||
Estimated fair value | 170.1 | 158.7 | |||
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | States and political subdivisions | |||||
Assets: | |||||
Estimated fair value | 2,462.6 | 2,388.5 | |||
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Foreign governments | |||||
Assets: | |||||
Estimated fair value | 78.6 | 74.7 | |||
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Asset-backed securities | |||||
Assets: | |||||
Estimated fair value | 1,299.1 | 1,230 | |||
Total trading securities | 25.5 | 15.1 | |||
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Agency residential mortgage-backed securities | |||||
Assets: | |||||
Estimated fair value | 215.9 | 175 | |||
Total trading securities | 0.3 | 0.3 | |||
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Non-agency residential mortgage-backed securities | |||||
Assets: | |||||
Estimated fair value | 1,606.7 | 1,492.3 | |||
Total trading securities | 58.3 | 60.2 | |||
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Collateralized loan obligations | |||||
Assets: | |||||
Estimated fair value | 918.9 | 782.5 | |||
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Commercial mortgage-backed securities | |||||
Assets: | |||||
Estimated fair value | 2,290.1 | 2,207.9 | |||
Total trading securities | 123.5 | 131.8 | |||
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Total fixed maturities, available for sale | |||||
Assets: | |||||
Estimated fair value | 20,890.6 | 20,094.5 | |||
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | |||||
Assets: | |||||
Total trading securities | 0.5 | 0.5 | |||
Investments held by variable interest entities - corporate securities | 0 | 0 | |||
Derivatives | 0 | 0 | |||
Residual tranches | 19.2 | 18.3 | |||
Total other invested assets | 19.2 | 18.3 | |||
Market risk benefit asset | 57.8 | 65.3 | |||
Assets held in separate accounts | 0 | 0 | |||
Total assets carried at fair value by category | 369 | 418.7 | |||
Liabilities: | |||||
Market risk benefit liability | 17.6 | 11.3 | |||
Embedded derivatives associated with fixed indexed annuity products (classified as policyholder account liabilities) | 1,347.9 | 1,297 | |||
Total liabilities carried at fair value by category | 1,365.5 | 1,308.3 | |||
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Corporate securities | |||||
Assets: | |||||
Estimated fair value | 127.8 | 127.8 | |||
Equity securities - corporate securities | 75 | 75.7 | |||
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | United States Treasury securities and obligations of United States government corporations and agencies | |||||
Assets: | |||||
Estimated fair value | 0 | 0 | |||
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | States and political subdivisions | |||||
Assets: | |||||
Estimated fair value | 0 | 0 | |||
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Foreign governments | |||||
Assets: | |||||
Estimated fair value | 0 | 0 | |||
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Asset-backed securities | |||||
Assets: | |||||
Estimated fair value | 41.1 | 57 | |||
Total trading securities | 0 | 0 | |||
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Agency residential mortgage-backed securities | |||||
Assets: | |||||
Estimated fair value | 0 | 0 | |||
Total trading securities | 0 | 0 | |||
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Non-agency residential mortgage-backed securities | |||||
Assets: | |||||
Estimated fair value | 33.8 | 56.2 | |||
Total trading securities | 0.5 | 0.5 | |||
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Collateralized loan obligations | |||||
Assets: | |||||
Estimated fair value | 0 | 3.4 | |||
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Commercial mortgage-backed securities | |||||
Assets: | |||||
Estimated fair value | 13.8 | 14.5 | |||
Total trading securities | 0 | 0 | |||
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Total fixed maturities, available for sale | |||||
Assets: | |||||
Estimated fair value | $ 216.5 | $ 258.9 |
FAIR VALUE MEASUREMENTS - RECUR
FAIR VALUE MEASUREMENTS - RECURRING BASIS (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Cash and cash equivalents: | ||
Held by variable interest entities | $ 97.1 | $ 69.2 |
Fair Value, Measurements, Recurring | Total estimated fair value | ||
Assets: | ||
Mortgage loans | 1,557.5 | 1,273.6 |
Policy loans | 123 | 121.6 |
Other invested assets: | ||
Company-owned life insurance | 201.3 | 199.1 |
Cash and cash equivalents: | ||
Unrestricted | 425 | 575.7 |
Held by variable interest entities | 97.1 | 69.2 |
Liabilities: | ||
Policyholder account liabilities | 15,302.9 | 15,234.2 |
Investment borrowings | 1,840.6 | 1,640.5 |
Borrowings related to variable interest entities | 1,034.8 | 1,066.3 |
Notes payable – direct corporate obligations | 1,079.5 | 1,077 |
Fair Value, Measurements, Recurring | Total carrying amount | ||
Assets: | ||
Mortgage loans | 1,676.1 | 1,411.9 |
Policy loans | 123 | 121.6 |
Other invested assets: | ||
Company-owned life insurance | 201.3 | 199.1 |
Cash and cash equivalents: | ||
Unrestricted | 425 | 575.7 |
Held by variable interest entities | 97.1 | 69.2 |
Liabilities: | ||
Policyholder account liabilities | 15,302.9 | 15,234.2 |
Investment borrowings | 1,839.6 | 1,639.5 |
Borrowings related to variable interest entities | 1,065.4 | 1,104.6 |
Notes payable – direct corporate obligations | 1,139.2 | 1,138.8 |
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | ||
Assets: | ||
Mortgage loans | 0 | 0 |
Policy loans | 0 | 0 |
Other invested assets: | ||
Company-owned life insurance | 0 | 0 |
Cash and cash equivalents: | ||
Unrestricted | 425 | 575.7 |
Held by variable interest entities | 97.1 | 69.2 |
Liabilities: | ||
Policyholder account liabilities | 0 | 0 |
Investment borrowings | 0 | 0 |
Borrowings related to variable interest entities | 0 | 0 |
Notes payable – direct corporate obligations | 0 | 0 |
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | ||
Assets: | ||
Mortgage loans | 0 | 0 |
Policy loans | 0 | 0 |
Other invested assets: | ||
Company-owned life insurance | 201.3 | 199.1 |
Cash and cash equivalents: | ||
Unrestricted | 0 | 0 |
Held by variable interest entities | 0 | 0 |
Liabilities: | ||
Policyholder account liabilities | 0 | 0 |
Investment borrowings | 1,840.6 | 1,640.5 |
Borrowings related to variable interest entities | 1,034.8 | 1,066.3 |
Notes payable – direct corporate obligations | 1,079.5 | 1,077 |
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | ||
Assets: | ||
Mortgage loans | 1,557.5 | 1,273.6 |
Policy loans | 123 | 121.6 |
Other invested assets: | ||
Company-owned life insurance | 0 | 0 |
Cash and cash equivalents: | ||
Unrestricted | 0 | 0 |
Held by variable interest entities | 0 | 0 |
Liabilities: | ||
Policyholder account liabilities | 15,302.9 | 15,234.2 |
Investment borrowings | 0 | 0 |
Borrowings related to variable interest entities | 0 | 0 |
Notes payable – direct corporate obligations | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - BALAN
FAIR VALUE MEASUREMENTS - BALANCE SHEET RECURRING (Details) - Significant unobservable inputs (Level 3) - Fair Value, Measurements, Recurring - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Corporate securities | ||
Assets: | ||
Beginning balance | $ 127.8 | $ 89.7 |
Purchases, sales, issuances and settlements, net | (0.5) | 0 |
Total realized and unrealized gains (losses) included in net income | 0.1 | (1.4) |
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0.9 | (6.5) |
Transfers into level 3 | 5.9 | 36.2 |
Transfers out of level 3 | (6.4) | 0 |
Ending balance | 127.8 | 118 |
Amount of total gains (losses) included in our net income relating to assets still held as of the reporting date | 0.1 | (2.1) |
Amount of total gains (losses) included in accumulated other comprehensive income (loss) relating to assets still held as of the reporting date | 0.1 | (6.5) |
Corporate securities | Investments held by variable interest entities - corporate securities | ||
Assets: | ||
Beginning balance | 2.2 | |
Purchases, sales, issuances and settlements, net | (2.1) | |
Total realized and unrealized gains (losses) included in net income | (0.1) | |
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0 | |
Transfers into level 3 | 0 | |
Transfers out of level 3 | 0 | |
Ending balance | 0 | |
Amount of total gains (losses) included in our net income relating to assets still held as of the reporting date | 0 | |
Amount of total gains (losses) included in accumulated other comprehensive income (loss) relating to assets still held as of the reporting date | 0 | |
Asset-backed securities | ||
Assets: | ||
Beginning balance | 57 | 26.6 |
Purchases, sales, issuances and settlements, net | (5.1) | 15.9 |
Total realized and unrealized gains (losses) included in net income | (0.2) | 0 |
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | (0.2) | (1.3) |
Transfers into level 3 | 0 | 0 |
Transfers out of level 3 | (10.4) | 0 |
Ending balance | 41.1 | 41.2 |
Amount of total gains (losses) included in our net income relating to assets still held as of the reporting date | 0 | 0 |
Amount of total gains (losses) included in accumulated other comprehensive income (loss) relating to assets still held as of the reporting date | (0.5) | (1.3) |
Non-agency residential mortgage-backed securities | ||
Assets: | ||
Beginning balance | 56.2 | 0 |
Purchases, sales, issuances and settlements, net | (0.2) | 0 |
Total realized and unrealized gains (losses) included in net income | 0 | 0 |
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 2.3 | (0.6) |
Transfers into level 3 | 0 | 5 |
Transfers out of level 3 | (24.5) | 0 |
Ending balance | 33.8 | 4.4 |
Amount of total gains (losses) included in our net income relating to assets still held as of the reporting date | 0 | 0 |
Amount of total gains (losses) included in accumulated other comprehensive income (loss) relating to assets still held as of the reporting date | 2.4 | (0.6) |
Collateralized loan obligations | ||
Assets: | ||
Beginning balance | 3.4 | 5 |
Purchases, sales, issuances and settlements, net | 0 | 10 |
Total realized and unrealized gains (losses) included in net income | 0 | 0 |
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0 | (0.2) |
Transfers into level 3 | 0 | 0 |
Transfers out of level 3 | (3.4) | (5) |
Ending balance | 0 | 9.8 |
Amount of total gains (losses) included in our net income relating to assets still held as of the reporting date | 0 | 0 |
Amount of total gains (losses) included in accumulated other comprehensive income (loss) relating to assets still held as of the reporting date | 0 | (0.2) |
Commercial mortgage-backed securities | ||
Assets: | ||
Beginning balance | 14.5 | 19 |
Purchases, sales, issuances and settlements, net | 0 | 0 |
Total realized and unrealized gains (losses) included in net income | 0 | 0 |
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | (0.7) | (1.5) |
Transfers into level 3 | 0 | 0 |
Transfers out of level 3 | 0 | 0 |
Ending balance | 13.8 | 17.5 |
Amount of total gains (losses) included in our net income relating to assets still held as of the reporting date | 0 | 0 |
Amount of total gains (losses) included in accumulated other comprehensive income (loss) relating to assets still held as of the reporting date | (0.7) | (1.5) |
Total fixed maturities, available for sale | ||
Assets: | ||
Beginning balance | 258.9 | 140.3 |
Purchases, sales, issuances and settlements, net | (5.8) | 25.9 |
Total realized and unrealized gains (losses) included in net income | (0.1) | (1.4) |
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 2.3 | (10.1) |
Transfers into level 3 | 5.9 | 41.2 |
Transfers out of level 3 | (44.7) | (5) |
Ending balance | 216.5 | 190.9 |
Amount of total gains (losses) included in our net income relating to assets still held as of the reporting date | 0.1 | (2.1) |
Amount of total gains (losses) included in accumulated other comprehensive income (loss) relating to assets still held as of the reporting date | 1.3 | (10.1) |
Equity securities - corporate securities | ||
Assets: | ||
Beginning balance | 75.7 | 11.5 |
Purchases, sales, issuances and settlements, net | 0 | (2.9) |
Total realized and unrealized gains (losses) included in net income | (0.7) | (0.2) |
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0 | 0 |
Transfers into level 3 | 0 | 0 |
Transfers out of level 3 | 0 | 0 |
Ending balance | 75 | 8.4 |
Amount of total gains (losses) included in our net income relating to assets still held as of the reporting date | (0.7) | (0.2) |
Amount of total gains (losses) included in accumulated other comprehensive income (loss) relating to assets still held as of the reporting date | 0 | 0 |
Trading securities - non-agency residential mortgage-backed securities | ||
Assets: | ||
Beginning balance | 0.5 | 3.5 |
Purchases, sales, issuances and settlements, net | 0 | 0 |
Total realized and unrealized gains (losses) included in net income | 0 | 0 |
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0 | 0 |
Transfers into level 3 | 0 | 0 |
Transfers out of level 3 | 0 | (3.5) |
Ending balance | 0.5 | 0 |
Amount of total gains (losses) included in our net income relating to assets still held as of the reporting date | 0 | 0 |
Amount of total gains (losses) included in accumulated other comprehensive income (loss) relating to assets still held as of the reporting date | 0 | 0 |
Trading Securities - Commercial mortgage-backed securities | ||
Assets: | ||
Beginning balance | 12.9 | |
Purchases, sales, issuances and settlements, net | 0 | |
Total realized and unrealized gains (losses) included in net income | (0.4) | |
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0.2 | |
Transfers into level 3 | 0 | |
Transfers out of level 3 | 0 | |
Ending balance | 12.7 | |
Amount of total gains (losses) included in our net income relating to assets still held as of the reporting date | (0.4) | |
Amount of total gains (losses) included in accumulated other comprehensive income (loss) relating to assets still held as of the reporting date | 0 | |
Total trading securities | ||
Assets: | ||
Beginning balance | 16.4 | |
Purchases, sales, issuances and settlements, net | 0 | |
Total realized and unrealized gains (losses) included in net income | (0.4) | |
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0.2 | |
Transfers into level 3 | 0 | |
Transfers out of level 3 | (3.5) | |
Ending balance | 12.7 | |
Amount of total gains (losses) included in our net income relating to assets still held as of the reporting date | (0.4) | |
Amount of total gains (losses) included in accumulated other comprehensive income (loss) relating to assets still held as of the reporting date | $ 0 | |
Other invested assets - residual tranches | ||
Assets: | ||
Beginning balance | 18.3 | |
Purchases, sales, issuances and settlements, net | 0.5 | |
Total realized and unrealized gains (losses) included in net income | 0.4 | |
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | 0 | |
Transfers into level 3 | 0 | |
Transfers out of level 3 | 0 | |
Ending balance | 19.2 | |
Amount of total gains (losses) included in our net income relating to assets still held as of the reporting date | 0.4 | |
Amount of total gains (losses) included in accumulated other comprehensive income (loss) relating to assets still held as of the reporting date | $ 0 |
FAIR VALUE MEASUREMENTS - FAIR
FAIR VALUE MEASUREMENTS - FAIR VALUE ACTIVITY (Details) - Significant unobservable inputs (Level 3) - Fair Value, Measurements, Recurring - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Corporate securities | ||
Assets: | ||
Purchases | $ 0.9 | $ 9.4 |
Sales | (1.4) | (9.4) |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Purchases, sales, issuances and settlements, net | (0.5) | 0 |
Corporate securities | Variable Interest Entities | ||
Assets: | ||
Purchases | 0 | |
Sales | (2.1) | |
Issuances | 0 | |
Settlements | 0 | |
Purchases, sales, issuances and settlements, net | (2.1) | |
Asset-backed securities | ||
Assets: | ||
Purchases | 2.3 | 16 |
Sales | (7.4) | (0.1) |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Purchases, sales, issuances and settlements, net | (5.1) | 15.9 |
Collateralized loan obligations | ||
Assets: | ||
Purchases | 10 | |
Sales | 0 | |
Issuances | 0 | |
Settlements | 0 | |
Purchases, sales, issuances and settlements, net | 0 | 10 |
Non-agency residential mortgage-backed securities | ||
Assets: | ||
Purchases | 0 | |
Sales | (0.2) | |
Issuances | 0 | |
Settlements | 0 | |
Purchases, sales, issuances and settlements, net | (0.2) | 0 |
Total fixed maturities, available for sale | ||
Assets: | ||
Purchases | 3.2 | 35.4 |
Sales | (9) | (9.5) |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Purchases, sales, issuances and settlements, net | (5.8) | 25.9 |
Equity securities - corporate securities | ||
Assets: | ||
Purchases | 0.3 | |
Sales | (3.2) | |
Issuances | 0 | |
Settlements | 0 | |
Purchases, sales, issuances and settlements, net | 0 | $ (2.9) |
Other invested assets - residual tranches | ||
Assets: | ||
Purchases | 0.7 | |
Sales | (0.2) | |
Issuances | 0 | |
Settlements | 0 | |
Purchases, sales, issuances and settlements, net | $ 0.5 |
FAIR VALUE MEASUREMENTS-CHANGES
FAIR VALUE MEASUREMENTS-CHANGES IN VALUE OF EMBEDDED DERIVATIVES (Details) - Fair Value, Inputs, Level 3 - Fixed Index Annuity Products - Fair Value, Measurements, Recurring - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Liabilities: | ||
Balance at beginning of the period | $ 1,297 | $ 1,724.1 |
Premiums less benefits | (14) | 21.1 |
Change in fair value, net | 64.9 | (201.7) |
Balance at end of the period | $ 1,347.9 | $ 1,543.5 |
FAIR VALUE MEASUREMENTS - FAI_2
FAIR VALUE MEASUREMENTS - FAIR VALUE INPUTS (Details) $ in Millions | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Mar. 31, 2022 USD ($) | Jan. 01, 2021 USD ($) | Dec. 31, 2020 USD ($) |
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Equity securities - corporate securities | $ 106.1 | $ 135.3 | |||
Market risk benefit asset | 57.8 | 65.3 | $ 16.9 | $ 2.5 | $ 0 |
Market risk benefit liability | 17.6 | 11.3 | $ 63.8 | $ 114.8 | $ 0 |
Significant unobservable inputs (Level 3) | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total assets carried at fair value by category | 369 | 418.7 | |||
Significant unobservable inputs (Level 3) | Discounted cash flow analysis | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Market risk benefit asset | 57.8 | 65.3 | |||
Market risk benefit liability | $ 17.6 | $ 11.3 | |||
Significant unobservable inputs (Level 3) | Discounted cash flow analysis | Surrender rates | Minimum | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Unobservable inputs, market risk benefit, assets measurement input | 0.0128 | 0.0128 | |||
Unobservable inputs, market risk benefit, liability measurement input | 0.0128 | 0.0128 | |||
Significant unobservable inputs (Level 3) | Discounted cash flow analysis | Surrender rates | Maximum | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Unobservable inputs, market risk benefit, assets measurement input | 0.1105 | 0.1105 | |||
Unobservable inputs, market risk benefit, liability measurement input | 0.1105 | 0.1105 | |||
Significant unobservable inputs (Level 3) | Discounted cash flow analysis | Surrender rates | Weighted Average | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Unobservable inputs, market risk benefit, assets measurement input | 0.0345 | 0.0368 | |||
Unobservable inputs, market risk benefit, liability measurement input | 0.0345 | 0.0368 | |||
Significant unobservable inputs (Level 3) | Discounted cash flow analysis | Utilization rates | Minimum | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Unobservable inputs, market risk benefit, assets measurement input | 0.0592 | 0.0678 | |||
Unobservable inputs, market risk benefit, liability measurement input | 0.0592 | 0.0678 | |||
Significant unobservable inputs (Level 3) | Discounted cash flow analysis | Utilization rates | Maximum | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Unobservable inputs, market risk benefit, assets measurement input | 0.4762 | 0.6316 | |||
Unobservable inputs, market risk benefit, liability measurement input | 0.4762 | 0.6316 | |||
Significant unobservable inputs (Level 3) | Discounted cash flow analysis | Utilization rates | Weighted Average | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Unobservable inputs, market risk benefit, assets measurement input | 0.2254 | 0.2009 | |||
Unobservable inputs, market risk benefit, liability measurement input | 0.2254 | 0.2009 | |||
Significant unobservable inputs (Level 3) | Market comparables | EBITDA multiples | Weighted Average | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Unobservable inputs, equity securities | 8.8 | 8.5 | |||
Significant unobservable inputs (Level 3) | Recovery method | Percent of recovery expected | Minimum | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Unobservable inputs, fixed maturities | 0 | 0 | |||
Unobservable inputs, equity securities | 0 | 0 | |||
Significant unobservable inputs (Level 3) | Recovery method | Percent of recovery expected | Maximum | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Unobservable inputs, fixed maturities | 0.3500 | 0.3500 | |||
Unobservable inputs, equity securities | 1 | 1 | |||
Significant unobservable inputs (Level 3) | Recovery method | Percent of recovery expected | Weighted Average | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Unobservable inputs, fixed maturities | 0.3500 | 0.3500 | |||
Unobservable inputs, equity securities | 1 | 1 | |||
Significant unobservable inputs (Level 3) | Unadjusted third-party price source | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Other assets | $ 206.1 | $ 249 | |||
Significant unobservable inputs (Level 3) | Discounted projected embedded derivatives | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Embedded derivatives related to fixed indexed annuity products | $ 1,347.9 | $ 1,297 | |||
Significant unobservable inputs (Level 3) | Discounted projected embedded derivatives | Discount margins/rates | Minimum | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Unobservable inputs, liabilities | 0.0347 | 0.0377 | |||
Significant unobservable inputs (Level 3) | Discounted projected embedded derivatives | Discount margins/rates | Maximum | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Unobservable inputs, liabilities | 0.0533 | 0.0548 | |||
Significant unobservable inputs (Level 3) | Discounted projected embedded derivatives | Discount margins/rates | Weighted Average | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Unobservable inputs, liabilities | 0.0413 | 0.0447 | |||
Significant unobservable inputs (Level 3) | Discounted projected embedded derivatives | Projected portfolio yields | Minimum | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Unobservable inputs, liabilities | 0.0430 | 0.0430 | |||
Significant unobservable inputs (Level 3) | Discounted projected embedded derivatives | Projected portfolio yields | Maximum | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Unobservable inputs, liabilities | 0.0463 | 0.0463 | |||
Significant unobservable inputs (Level 3) | Discounted projected embedded derivatives | Projected portfolio yields | Weighted Average | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Unobservable inputs, liabilities | 0.0431 | 0.0431 | |||
Significant unobservable inputs (Level 3) | Discounted projected embedded derivatives | Surrender rates | Minimum | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Unobservable inputs, liabilities | 0.0190 | 0.0190 | |||
Significant unobservable inputs (Level 3) | Discounted projected embedded derivatives | Surrender rates | Maximum | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Unobservable inputs, liabilities | 0.2770 | 0.2770 | |||
Significant unobservable inputs (Level 3) | Discounted projected embedded derivatives | Surrender rates | Weighted Average | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Unobservable inputs, liabilities | 0.0920 | 0.0920 | |||
Significant unobservable inputs (Level 3) | Corporate securities | Discounted cash flow analysis | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Fixed maturities, available for sale | $ 2.9 | $ 2.9 | |||
Significant unobservable inputs (Level 3) | Corporate securities | Discounted cash flow analysis | Discount margins/rates | Minimum | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Unobservable inputs, fixed maturities | 0.0223 | ||||
Significant unobservable inputs (Level 3) | Corporate securities | Discounted cash flow analysis | Discount margins/rates | Maximum | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Unobservable inputs, fixed maturities | 0.0394 | ||||
Significant unobservable inputs (Level 3) | Corporate securities | Discounted cash flow analysis | Discount margins/rates | Weighted Average | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Unobservable inputs, fixed maturities | 0.0241 | 0.0225 | |||
Significant unobservable inputs (Level 3) | Corporate securities | Unadjusted purchase price | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Fixed maturities, available for sale | $ 0.5 | $ 0.5 | |||
Significant unobservable inputs (Level 3) | Corporate securities | Recovery method | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Fixed maturities, available for sale | 3.5 | 3.5 | |||
Significant unobservable inputs (Level 3) | Asset-backed securities | Discounted cash flow analysis | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Fixed maturities, available for sale | $ 23.1 | $ 21.8 | |||
Significant unobservable inputs (Level 3) | Asset-backed securities | Discounted cash flow analysis | Discount margins/rates | Minimum | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Unobservable inputs, fixed maturities | 0.0199 | 0.0250 | |||
Significant unobservable inputs (Level 3) | Asset-backed securities | Discounted cash flow analysis | Discount margins/rates | Maximum | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Unobservable inputs, fixed maturities | 0.0402 | 0.0386 | |||
Significant unobservable inputs (Level 3) | Asset-backed securities | Discounted cash flow analysis | Discount margins/rates | Weighted Average | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Unobservable inputs, fixed maturities | 0.0320 | 0.0330 | |||
Significant unobservable inputs (Level 3) | Equity Securities | Unadjusted purchase price | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Equity securities - corporate securities | $ 11.4 | $ 11.7 | |||
Significant unobservable inputs (Level 3) | Equity Securities | Market comparables | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Equity securities - corporate securities | 63.6 | 63.9 | |||
Significant unobservable inputs (Level 3) | Equity Securities | Recovery method | |||||
Fair Value, Assets on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Equity securities - corporate securities | $ 0.1 | $ 0.1 |