Fair Value Disclosures

9 Months Ended

Sep. 30, 2022

Fair Values, Inputs and Valuation Techniques for Financial Assets and Liabilities Disclosures

The fair value measurements and disclosures guidance defines fair value and establishes a framework for measuring fair value. Fair value is defined as 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. The Company has categorized its recurring fair value basis financial assets and liabilities into a three-level fair value hierarchy based on the priority of the inputs to the valuation technique.

The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and takes into account factors specific to the asset or liability.

The levels of the fair value hierarchy are described below:

•Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access.

•Level 2 inputs utilize other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that

are not active and inputs other than quoted prices that are observable in the marketplace for the asset or liability. The observable inputs are used in valuation models to calculate the fair value for the asset or liability.

•Level 3 inputs are unobservable but are significant to the fair value measurement for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability.

The Company reviews fair value hierarchy classifications on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy.

The following tables present the Company’s fair value hierarchy for assets and liabilities measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021. The amounts presented below for short-term investments, other investments, cash equivalents, other assets, assets held in and liabilities related to separate accounts and other liabilities differ from the amounts presented in the consolidated balance sheets because only certain investments or certain assets and liabilities within these line items are measured at estimated fair value. Other investments are comprised of investments in the Assurant Investment Plan (“AIP”), the American Security Insurance Company Investment Plan, the Assurant Deferred Compensation Plan and other derivatives. Other liabilities are comprised of investments in the AIP, contingent considerations related to business combinations and other derivatives. The fair value amount and the majority of the associated levels presented for other investments and assets and liabilities held in separate accounts are received directly from third parties.


	September 30, 2022
	Total		Level 1			Level 2			Level 3
Financial Assets
Fixed maturity securities:
U.S. government and government agencies and authorities	$	95.2	$	—		$	95.2		$	—
States, municipalities and political subdivisions	145.1		—			145.1			—
Foreign governments	382.7		—			382.7			—
Asset-backed	626.2		—			569.3			56.9		(7)
Commercial mortgage-backed	411.2		—			411.2			—
Residential mortgage-backed	458.3		—			458.3			—
U.S. corporate	2,888.8		—			2,885.0			3.8
Foreign corporate	1,130.4		—			1,127.3			3.1
Equity securities:
Mutual funds	32.9		32.9			—			—
Common stocks	37.4		36.5			0.7			0.2
Non-redeemable preferred stocks	232.3		—			232.3			—
Short-term investments	228.1		150.0		(2)	78.1		(3)	—
Other investments	56.3		56.1		(1)	—			0.2
Cash equivalents	667.0		608.5		(2)	58.5		(3)	—

Other assets	4.2		—			4.2		(4)	—
Assets held in separate accounts	9.8		4.5		(1)	5.3		(3)	—
Total financial assets	$	7,405.9	$	888.5		$	6,453.2		$	64.2

Financial Liabilities
Other liabilities	$	64.4	$	56.1	(1)	$	—		$	8.3	(5)
Liabilities related to separate accounts	9.8		4.5		(1)	5.3		(3)	—
Total financial liabilities	$	74.2	$	60.6		$	5.3		$	8.3


	December 31, 2021
	Total		Level 1			Level 2			Level 3
Financial Assets
Fixed maturity securities:
U.S. government and government agencies and authorities	$	85.0	$	—		$	85.0		$	—
States, municipalities and political subdivisions	148.5		—			148.5			—
Foreign governments	437.7		—			437.7			—
Asset-backed	423.0		—			423.0			—
Commercial mortgage-backed	473.7		—			473.7			—
Residential mortgage-backed	601.9		—			601.9			—
U.S. corporate	3,803.1		—			3,799.7			3.4
Foreign corporate	1,242.4		—			1,238.8			3.6
Equity securities:
Mutual funds	33.3		33.3			—			—
Common stocks	151.1		15.5			0.7			134.9		(6)
Non-redeemable preferred stocks	261.3		—			261.3			—
Short-term investments	207.2		200.1		(2)	7.1			—
Other investments	72.6		72.4		(1)	—			0.2
Cash equivalents	1,243.9		1,190.9		(2)	53.0		(3)	—

Other assets	1.7		—			1.7		(4)	—
Assets held in separate accounts	11.8		7.7		(1)	4.1		(3)	—
Total financial assets	$	9,198.2	$	1,519.9		$	7,536.2		$	142.1

Financial Liabilities
Other liabilities	$	76.4	$	72.4	(1)	$	—		$	4.0	(5)
Liabilities related to separate accounts	11.8		7.7		(1)	4.1		(3)	—
Total financial liabilities	$	88.2	$	80.1		$	4.1		$	4.0

(1)Primarily includes mutual funds and related obligations.

(2)Primarily includes money market funds.

(3)Primarily includes fixed maturity securities and related obligations.

(4)Primarily includes derivatives.

(5)Includes contingent consideration liabilities and other derivatives.

(6)These equity securities are subject to lock up agreements and therefore an illiquidity discount was applied to the exchange traded price, which includes significant unobservable inputs.

(7)Primarily includes the fair value of private fixed maturity securities, which are originated by internal private asset managers, and may incorporate significant unobservable inputs.

The following tables disclose the carrying value, fair value and hierarchy level of the financial instruments that are not recognized or are not carried at fair value in the consolidated balance sheets as of the dates indicated:


	September 30, 2022
			Fair Value
	Carrying Value		Total		Level 1		Level 2		Level 3
Financial Assets
Commercial mortgage loans on real estate	$	304.4	$	284.5	$	—	$	—	$	284.5
Other investments	6.8		6.8		1.7		—		5.1
Other assets	13.8		13.8		—		—		13.8
Total financial assets	$	325.0	$	305.1	$	1.7	$	—	$	303.4
Financial Liabilities
Policy reserves under investment products (Individual and group annuities, subject to discretionary withdrawal) (1)	$	8.1	$	8.2	$	—	$	—	$	8.2
Funds withheld under reinsurance	374.5		374.5		374.5		—		—
Debt	2,129.3		1,938.7		—		1,938.7		—
Total financial liabilities	$	2,511.9	$	2,321.4	$	374.5	$	1,938.7	$	8.2

	December 31, 2021
			Fair Value
	Carrying Value		Total		Level 1		Level 2		Level 3
Financial Assets
Commercial mortgage loans on real estate	$	256.5	$	266.0	$	—	$	—	$	266.0
Other investments	4.2		4.2		2.0		—		2.2
Other assets	24.9		24.9		—		—		24.9
Total financial assets	$	285.6	$	295.1	$	2.0	$	—	$	293.1
Financial Liabilities
Policy reserves under investment products (Individual and group annuities, subject to discretionary withdrawal) (1)	$	8.5	$	9.6	$	—	$	—	$	9.6
Funds withheld under reinsurance	364.2		364.2		364.2		—		—
Debt	2,202.5		2,456.3		—		2,456.3		—
Total financial liabilities	$	2,575.2	$	2,830.1	$	364.2	$	2,456.3	$	9.6

(1)Only the fair value of the Company’s policy reserves for investment-type contracts (those without significant mortality or morbidity risk) are reflected in the tables above.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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