☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 63-1261433 | ||||||||||||||||||||||||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||||||||||||||||||||
100 Brookwood Place, | Birmingham, | AL | 35209 | ||||||||||||||||||||||||||
(Address of principal executive offices) | (Zip Code) | ||||||||||||||||||||||||||||
(205) | 877-4400 | ||||||||||||||||||||||||||||
(Registrant’s telephone number, including area code) | (Former name, former address and former fiscal year, if changed since last report) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Common Stock, par value $0.01 per share | PRA | New York Stock Exchange |
Large accelerated filer | ☒ | Accelerated filer | ☐ | ||||||||||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | ||||||||||||||||||||
Emerging growth company | ☐ |
Term | Meaning | ||||
AAD | Annual aggregate deductible | ||||
Accumulated other comprehensive income (loss) | |||||
ASU | Accounting Standards Update | ||||
BEAT | Base erosion anti-abuse tax | ||||
Board | Board of Directors of ProAssurance Corporation | ||||
BOLI | Business owned life insurance | ||||
CARES Act | Coronavirus Aid, Relief and Economic Security Act | ||||
CODM | Chief Operating Decision Maker | ||||
COVID-19 | Coronavirus Disease 2019 | ||||
DPAC | Deferred policy acquisition costs | ||||
Eastern Re | Eastern Re, LTD, S.P.C. | ||||
EBUB | Earned but unbilled premium | ||||
ECO/XPL | Extra-contractual | ||||
FAL | Funds at Lloyd's | ||||
FASB | Financial Accounting Standards Board | ||||
FHLB | Federal Home Loan Bank | ||||
FHLMC | Federal Home Loan Mortgage Corporation | ||||
FNMA | Federal National Mortgage Association | ||||
GAAP | Generally accepted accounting principles in the United States of America | ||||
GNMA | Government National Mortgage Association | ||||
HCPL | Healthcare professional liability | ||||
IBNR | Incurred but not reported | ||||
Inova Re | Inova Re, LTD, S.P.C. | ||||
IRS | Internal Revenue Service | ||||
LIBOR | London Interbank Offered Rate | ||||
LLC | Limited liability company | ||||
Lloyd's | Lloyd's of London market | ||||
LP | Limited partnership | ||||
Medical Technology Liability | Medical technology and life sciences products liability | ||||
Mortgage Loans | Two ten-year mortgage loans collectively with an original borrowing amount of approximately $40 million, each entered into by a subsidiary of ProAssurance | ||||
NAV | Net asset value | ||||
NOL | Net operating loss | ||||
NORCAL | NORCAL Mutual Insurance Company | ||||
NRSRO | Nationally recognized statistical rating organization | ||||
NYSE | New York Stock Exchange | ||||
OCI | Other comprehensive income (loss) |
PCAOB | Public Company Accounting Oversight Board | ||||
PDR | Premium deficiency reserve | ||||
Revolving Credit Agreement | ProAssurance's $250 million revolving credit agreement | ||||
ROE | Return on equity | ||||
ROU | Right-of-use | ||||
SEC | Securities and Exchange Commission | ||||
SPA | Special Purpose Arrangement | ||||
SPC | Segregated portfolio cell | ||||
Specialty P&C | Specialty Property and Casualty |
Term | Meaning | ||||
Syndicate 1729 | Lloyd's of London Syndicate 1729 | ||||
Syndicate 6131 | Lloyd's of London Syndicate 6131, a Special Purpose Arrangement with Lloyd's of London Syndicate 1729 | ||||
Syndicate Credit Agreement | Unconditional revolving credit agreement with the Premium Trust Fund of Syndicate 1729 | ||||
TCJA | Tax Cuts and Jobs Act H.R.1 of 2017 | ||||
U.K. | United Kingdom of Great Britain and Northern Ireland | ||||
ULAE | Unallocated loss adjustment expense | ||||
VIE | Variable interest entity |
changes in general economic conditions, including the impact of inflation or deflation and unemployment; | |||||
our ability to maintain our dividend payments; | |||||
regulatory, legislative and judicial actions or decisions that could affect our business plans or operations, including | |||||
the enactment or repeal of tort reforms; | |||||
formation or dissolution of state-sponsored insurance entities providing coverages now offered by ProAssurance which could remove or add sizable numbers of insureds from or to the private insurance market; | |||||
changes in the interest and tax rate | |||||
resolution of uncertain tax matters and changes in tax laws, including the impact of the | |||||
changes in laws or government regulations regarding financial markets or market activity that may affect our business; | |||||
changes in the ability, or perception thereof, of the U.S. government to meet its obligations that may affect the U.S. economy and our business; | |||||
performance of financial markets affecting the fair value of our investments or making it difficult to determine the value of our investments; | |||||
changes in requirements or accounting policies and practices that may be adopted by our regulatory agencies, the FASB, the SEC, the PCAOB or the NYSE that may affect our business; | |||||
changes in laws or government regulations affecting the financial services industry, the property and casualty insurance industry or particular insurance lines underwritten by our | |||||
the effect on our insureds, particularly the insurance needs of our insureds, and our loss costs, of changes in the healthcare delivery system and/or changes in the U.S. political climate that may affect healthcare policy or our business; | |||||
consolidation of our insureds into or under larger entities which may be insured by competitors, or may not have a risk profile that meets our underwriting criteria or which may not use external providers for insuring or otherwise managing substantial portions of their liability risk; | |||||
the effect of cyclical insurance industry trends on our underwriting, including demand and pricing in the insurance and reinsurance markets in which we operate; | |||||
uncertainties inherent in the estimate of our loss and loss adjustment expense reserve and reinsurance recoverable; | |||||
changes in the availability, cost, quality or collectability of insurance/reinsurance; | |||||
the results of litigation, including pre- or post-trial motions, trials and/or appeals we undertake; | |||||
effects on our claims costs from mass tort litigation that are different from that anticipated by us; | |||||
allegations of bad faith which may arise from our handling of any particular claim, including failure to settle; |
loss or consolidation of independent agents, agencies, brokers or brokerage firms; |
changes in our organization, compensation and benefit plans; | |||||
changes in the business or competitive environment may limit the effectiveness of our business strategy and impact our revenues; | |||||
our ability to retain and recruit senior management and other qualified personnel; | |||||
the availability, integrity and security of our technology infrastructure or that of our third-party providers of technology infrastructure, including any susceptibility to cyber-attacks which might result in a loss of information or operating capability; | |||||
the impact of a catastrophic event, including the recent COVID-19 pandemic, as it relates to our business and insurance operations, investment results, Lloyd's Syndicates and our insured risks; | |||||
the impact of the COVID-19 pandemic and related economic conditions on our premium volume, loss reserves, investment portfolio, asset valuations, business operations and workforce; | |||||
the impact of a catastrophic man-made event, such as acts of terrorism, | |||||
the effects of terrorism-related insurance legislation and laws; | |||||
guaranty funds and other state assessments; | |||||
our ability to achieve continued growth through expansion into new markets or through acquisitions or business combinations; | |||||
changes to the ratings assigned by rating agencies to our holding company or insurance subsidiaries, individually or as a group; | |||||
provisions in our charter documents, Delaware law and state insurance laws may impede attempts to replace or remove management or may impede a takeover; | |||||
state insurance restrictions may prohibit assets held by our insurance subsidiaries, including cash and investment securities, from being used for general corporate purposes; | |||||
taxing authorities can take exception to our tax positions and cause us to incur significant amounts of legal and accounting costs and, if our defense is not successful, additional tax costs, including interest and penalties; and | |||||
expected benefits from completed and proposed acquisitions may not be achieved or may be delayed longer than expected due to business disruption; loss of customers, employees or key agents; increased operating costs or inability to achieve cost savings and synergies; and assumption of greater than expected liabilities, among other reasons. | |||||
Additional risks, assumptions and uncertainties that could arise from our membership in the Lloyd's market and our participation in Lloyd's Syndicates include, but are not limited to, the following: | |||||
members of Lloyd's are subject to levies by the Council of Lloyd's based on a percentage of the member's underwriting capacity, currently a maximum of 3%, but can be increased by Lloyd's; | |||||
Syndicate | |||||
Lloyd's insurance and reinsurance relationships and distribution channels could be disrupted or Lloyd's trading licenses could be revoked, making it more difficult for a Lloyd's Syndicate to distribute and market its products; | |||||
rating agencies could downgrade their ratings of Lloyd's as a whole; and | |||||
Syndicate 1729 and Syndicate 6131 operations are dependent on a small, specialized management team, and the loss of their services could adversely affect the Syndicate’s business. The inability to identify, hire and retain other highly qualified personnel in the future could adversely affect the quality and profitability of Syndicate 1729’s or Syndicate 6131's business. |
TABLE OF CONTENTS | ||||||||
June 30, 2020 | December 31, 2019 | March 31, 2021 | December 31, 2020 | |||||||||||||||
Assets | Assets | |||||||||||||||||
Investments | Investments | |||||||||||||||||
Fixed maturities, available-for-sale, at fair value (amortized cost, $2,182,473 and $2,241,304, respectively; allowance for expected credit losses, $1,408 as of current period end) | $ | 2,259,948 | $ | 2,288,785 | ||||||||||||||
Fixed maturities, trading, at fair value (cost, $45,754 and $46,772, respectively) | 46,116 | 47,284 | ||||||||||||||||
Equity investments, at fair value (cost, $99,822 and $227,873, respectively) | 98,723 | 250,552 | ||||||||||||||||
Fixed maturities, available-for-sale, at fair value (amortized cost, $2,509,623 and $2,361,575, respectively; allowance for expected credit losses, NaN as of March 31, 2021 and $552 as of December 31, 2020) | Fixed maturities, available-for-sale, at fair value (amortized cost, $2,509,623 and $2,361,575, respectively; allowance for expected credit losses, NaN as of March 31, 2021 and $552 as of December 31, 2020) | $ | 2,563,273 | $ | 2,457,531 | |||||||||||||
Fixed maturities, trading, at fair value (cost, $44,819 and $47,907, respectively) | Fixed maturities, trading, at fair value (cost, $44,819 and $47,907, respectively) | 45,151 | 48,456 | |||||||||||||||
Equity investments, at fair value (cost, $74,083 and $113,709, respectively) | Equity investments, at fair value (cost, $74,083 and $113,709, respectively) | 77,537 | 120,101 | |||||||||||||||
Short-term investments | 478,074 | 339,907 | Short-term investments | 280,993 | 337,813 | |||||||||||||
Business owned life insurance | 67,025 | 66,112 | Business owned life insurance | 66,932 | 67,847 | |||||||||||||
Investment in unconsolidated subsidiaries | 306,859 | 358,820 | Investment in unconsolidated subsidiaries | 299,360 | 310,529 | |||||||||||||
Other investments (at fair value, $37,978 and $36,018, respectively, otherwise at cost or amortized cost) | 40,900 | 38,949 | ||||||||||||||||
Other investments (at fair value, $69,251 and $44,116, respectively, otherwise at cost or amortized cost) | Other investments (at fair value, $69,251 and $44,116, respectively, otherwise at cost or amortized cost) | 71,621 | 47,068 | |||||||||||||||
Total Investments | 3,297,645 | 3,390,409 | Total Investments | 3,404,867 | 3,389,345 | |||||||||||||
Cash and cash equivalents | 224,268 | 175,369 | Cash and cash equivalents | 214,835 | 215,782 | |||||||||||||
Premiums receivable, net | 234,840 | 249,540 | Premiums receivable, net | 210,560 | 201,395 | |||||||||||||
Receivable from reinsurers on paid losses and loss adjustment expenses | 29,930 | 12,739 | Receivable from reinsurers on paid losses and loss adjustment expenses | 10,451 | 14,370 | |||||||||||||
Receivable from reinsurers on unpaid losses and loss adjustment expenses | 386,276 | 390,708 | Receivable from reinsurers on unpaid losses and loss adjustment expenses | 393,420 | 385,087 | |||||||||||||
Prepaid reinsurance premiums | 41,982 | 42,796 | Prepaid reinsurance premiums | 34,802 | 35,885 | |||||||||||||
Deferred policy acquisition costs | 52,250 | 55,567 | Deferred policy acquisition costs | 47,616 | 47,196 | |||||||||||||
Deferred tax asset, net | 52,565 | 44,387 | Deferred tax asset, net | 67,699 | 57,105 | |||||||||||||
Real estate, net | 30,206 | 30,410 | Real estate, net | 30,594 | 30,529 | |||||||||||||
Operating lease ROU assets | 19,198 | 21,074 | Operating lease ROU assets | 18,219 | 19,013 | |||||||||||||
Intangible assets, net | 68,848 | 70,757 | Intangible assets, net | 64,173 | 65,720 | |||||||||||||
Goodwill | 210,725 | 210,725 | Goodwill | 49,610 | 49,610 | |||||||||||||
Other assets | 134,822 | 111,118 | Other assets | 127,692 | 143,766 | |||||||||||||
Total Assets | $ | 4,783,555 | $ | 4,805,599 | Total Assets | $ | 4,674,538 | $ | 4,654,803 | |||||||||
Liabilities and Shareholders' Equity | Liabilities and Shareholders' Equity | |||||||||||||||||
Liabilities | Liabilities | |||||||||||||||||
Policy liabilities and accruals | Policy liabilities and accruals | |||||||||||||||||
Reserve for losses and loss adjustment expenses | $ | 2,389,181 | $ | 2,346,526 | Reserve for losses and loss adjustment expenses | $ | 2,438,250 | $ | 2,417,179 | |||||||||
Unearned premiums | 392,501 | 413,086 | Unearned premiums | 375,246 | 361,547 | |||||||||||||
Reinsurance premiums payable | 42,701 | 52,946 | Reinsurance premiums payable | 31,039 | 39,998 | |||||||||||||
Total Policy Liabilities | 2,824,383 | 2,812,558 | Total Policy Liabilities | 2,844,535 | 2,818,725 | |||||||||||||
Operating lease liabilities | 20,645 | 22,051 | Operating lease liabilities | 19,168 | 20,116 | |||||||||||||
Other liabilities | 178,869 | 173,256 | Other liabilities | 205,097 | 182,039 | |||||||||||||
Debt less unamortized debt issuance costs | 285,268 | 285,821 | Debt less unamortized debt issuance costs | 284,422 | 284,713 | |||||||||||||
Total Liabilities | 3,309,165 | 3,293,686 | Total Liabilities | 3,353,222 | 3,305,593 | |||||||||||||
Shareholders' Equity | Shareholders' Equity | |||||||||||||||||
Common shares (par value $0.01 per share, 100,000,000 shares authorized, 63,213,146 and 63,117,235 shares issued, respectively) | 632 | 631 | ||||||||||||||||
Common shares (par value $0.01 per share, 100,000,000 shares authorized, 63,277,721 and 63,217,708 shares issued, respectively) | Common shares (par value $0.01 per share, 100,000,000 shares authorized, 63,277,721 and 63,217,708 shares issued, respectively) | 633 | 632 | |||||||||||||||
Additional paid-in capital | 386,365 | 384,551 | Additional paid-in capital | 388,924 | 388,150 | |||||||||||||
Accumulated other comprehensive income (loss) (net of deferred tax expense (benefit) of $15,587 and $9,795, respectively) | 61,130 | 36,955 | ||||||||||||||||
Accumulated other comprehensive income (loss) (net of deferred tax expense (benefit) of $11,065 and $19,386, respectively) | Accumulated other comprehensive income (loss) (net of deferred tax expense (benefit) of $11,065 and $19,386, respectively) | 41,522 | 75,227 | |||||||||||||||
Retained earnings | 1,442,225 | 1,505,738 | Retained earnings | 1,306,199 | 1,301,163 | |||||||||||||
Treasury shares, at cost (9,325,180 shares as of each respective period end) | (415,962 | ) | (415,962 | ) | Treasury shares, at cost (9,325,180 shares as of each respective period end) | (415,962) | (415,962) | |||||||||||
Total Shareholders' Equity | 1,474,390 | 1,511,913 | Total Shareholders' Equity | 1,321,316 | 1,349,210 | |||||||||||||
Total Liabilities and Shareholders' Equity | $ | 4,783,555 | $ | 4,805,599 | Total Liabilities and Shareholders' Equity | $ | 4,674,538 | $ | 4,654,803 |
ProAssurance Shareholders' Equity | ||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Stock | Total | |||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | 632 | $ | 388,150 | $ | 75,227 | $ | 1,301,163 | $ | (415,962) | $ | 1,349,210 | ||||||||||||||||||||||||||
Common shares issued for compensation and effect of shares reissued to stock purchase plan | — | 8 | — | — | — | 8 | ||||||||||||||||||||||||||||||||
Share-based compensation | — | 1,024 | — | — | — | 1,024 | ||||||||||||||||||||||||||||||||
Net effect of restricted and performance shares issued | 1 | (258) | — | — | — | (257) | ||||||||||||||||||||||||||||||||
Dividends to shareholders | — | — | — | (2,699) | — | (2,699) | ||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | (33,705) | — | — | (33,705) | ||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | 7,735 | — | 7,735 | ||||||||||||||||||||||||||||||||
Balance at March 31, 2021 | $ | 633 | $ | 388,924 | $ | 41,522 | $ | 1,306,199 | $ | (415,962) | $ | 1,321,316 | ||||||||||||||||||||||||||
ProAssurance Shareholders' Equity | ||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Stock | Total | |||||||||||||||||||
Balance at April 1, 2020 | $ | 632 | $ | 384,732 | $ | (4,910 | ) | $ | 1,463,017 | $ | (415,962 | ) | $ | 1,427,509 | ||||||||||
Common shares issued for compensation and effect of shares reissued to stock purchase plan | — | 642 | — | — | — | 642 | ||||||||||||||||||
Share-based compensation | — | 1,027 | — | — | — | 1,027 | ||||||||||||||||||
Net effect of restricted and performance shares issued | — | (36 | ) | — | — | — | (36 | ) | ||||||||||||||||
Dividends to shareholders | — | — | — | (2,693 | ) | — | (2,693 | ) | ||||||||||||||||
Other comprehensive income (loss) | — | — | 66,040 | — | — | 66,040 | ||||||||||||||||||
Net income (loss) | — | — | — | (18,099 | ) | — | (18,099 | ) | ||||||||||||||||
Balance at June 30, 2020 | $ | 632 | $ | 386,365 | $ | 61,130 | $ | 1,442,225 | $ | (415,962 | ) | $ | 1,474,390 | |||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Stock | Total | |||||||||||||||||||
Balance at December 31, 2019 | $ | 631 | $ | 384,551 | $ | 36,955 | $ | 1,505,738 | $ | (415,962 | ) | $ | 1,511,913 | |||||||||||
Cumulative-effect adjustment- ASU 2016-13 adoption* | — | — | — | (4,076 | ) | — | (4,076 | ) | ||||||||||||||||
Common shares issued for compensation and effect of shares reissued to stock purchase plan | — | 675 | — | — | — | 675 | ||||||||||||||||||
Share-based compensation | — | 2,044 | — | — | — | 2,044 | ||||||||||||||||||
Net effect of restricted and performance shares issued | 1 | (905 | ) | — | — | — | (904 | ) | ||||||||||||||||
Dividends to shareholders | — | — | — | (19,384 | ) | — | (19,384 | ) | ||||||||||||||||
Other comprehensive income (loss) | — | — | 24,175 | — | — | 24,175 | ||||||||||||||||||
Net income (loss) | — | — | — | (40,053 | ) | — | (40,053 | ) | ||||||||||||||||
Balance at June 30, 2020 | $ | 632 | $ | 386,365 | $ | 61,130 | $ | 1,442,225 | $ | (415,962 | ) | $ | 1,474,390 | |||||||||||
* See Note 1 for discussion of accounting guidance adopted during the period. | ||||||||||||||||||||||||
Continued on the following page. |
Continued from the previous page. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Stock | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at April 1, 2019 | $ | 631 | $ | 383,494 | $ | 8,655 | $ | 1,586,393 | $ | (417,277 | ) | $ | 1,561,896 | |||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Stock | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | Balance at December 31, 2019 | $ | 631 | $ | 384,551 | $ | 36,955 | $ | 1,505,738 | $ | (415,962) | $ | 1,511,913 | |||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative-effect adjustment- ASU 2016-13 adoption | Cumulative-effect adjustment- ASU 2016-13 adoption | — | — | — | (4,076) | — | (4,076) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common shares issued for compensation and effect of shares reissued to stock purchase plan | — | 636 | — | — | — | 636 | Common shares issued for compensation and effect of shares reissued to stock purchase plan | — | 33 | — | — | — | 33 | |||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | 1,083 | — | — | — | 1,083 | Share-based compensation | — | 1,017 | — | — | — | 1,017 | |||||||||||||||||||||||||||||||||||||||||||||||||
Net effect of restricted and performance shares issued | — | (13 | ) | — | — | — | (13 | ) | Net effect of restricted and performance shares issued | 1 | (869) | — | — | — | (868) | |||||||||||||||||||||||||||||||||||||||||||||||
Dividends to shareholders | — | — | — | (16,656 | ) | — | (16,656 | ) | Dividends to shareholders | — | — | — | (16,691) | — | (16,691) | |||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | 23,074 | — | — | 23,074 | Other comprehensive income (loss) | — | — | (41,865) | — | — | (41,865) | |||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | 11,536 | — | 11,536 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2019 | $ | 631 | $ | 385,200 | $ | 31,729 | $ | 1,581,273 | $ | (417,277 | ) | $ | 1,581,556 | |||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | Net income (loss) | — | — | — | (21,954) | — | (21,954) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2020 | Balance at March 31, 2020 | $ | 632 | $ | 384,732 | $ | (4,910) | $ | 1,463,017 | $ | (415,962) | $ | 1,427,509 | |||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Stock | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2018 | $ | 630 | $ | 384,713 | $ | (16,911 | ) | $ | 1,571,847 | $ | (417,277 | ) | $ | 1,523,002 | ||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative-effect adjustment- ASU 2018-07 adoption | — | — | — | (444 | ) | — | (444 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common shares issued for compensation and effect of shares reissued to stock purchase plan | — | 812 | — | — | — | 812 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | 2,320 | — | — | — | 2,320 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net effect of restricted and performance shares issued | 1 | (2,645 | ) | — | — | — | (2,644 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends to shareholders | — | — | — | (33,316 | ) | — | (33,316 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | 48,640 | — | — | 48,640 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | 43,186 | — | 43,186 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2019 | $ | 631 | $ | 385,200 | $ | 31,729 | $ | 1,581,273 | $ | (417,277 | ) | $ | 1,581,556 |
Three Months Ended June 30 | Six Months Ended June 30 | Three Months Ended March 31 | ||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2021 | 2020 | |||||||||||||||||||||||||||||||||
Revenues | Revenues | |||||||||||||||||||||||||||||||||||||
Net premiums earned | $ | 207,293 | $ | 209,149 | $ | 411,149 | $ | 417,298 | Net premiums earned | $ | 187,358 | $ | 203,855 | |||||||||||||||||||||||||
Net investment income | 18,124 | 23,539 | 38,954 | 46,357 | Net investment income | 15,017 | 20,830 | |||||||||||||||||||||||||||||||
Equity in earnings (loss) of unconsolidated subsidiaries | (25,355 | ) | (5,152 | ) | (26,917 | ) | (5,962 | ) | Equity in earnings (loss) of unconsolidated subsidiaries | 6,788 | (1,562) | |||||||||||||||||||||||||||
Net realized investment gains (losses): | Net realized investment gains (losses): | |||||||||||||||||||||||||||||||||||||
Impairment losses | (582 | ) | — | (2,399 | ) | (136 | ) | Impairment losses | 0 | (1,817) | ||||||||||||||||||||||||||||
Portion of impairment losses recognized in other comprehensive income (loss) before taxes | 237 | — | 891 | 87 | Portion of impairment losses recognized in other comprehensive income (loss) before taxes | 0 | 654 | |||||||||||||||||||||||||||||||
Net impairment losses recognized in earnings | (345 | ) | — | (1,508 | ) | (49 | ) | Net impairment losses recognized in earnings | 0 | (1,163) | ||||||||||||||||||||||||||||
Other net realized investment gains (losses) | 20,330 | 9,308 | (7,180 | ) | 45,980 | Other net realized investment gains (losses) | 8,849 | (27,510) | ||||||||||||||||||||||||||||||
Total net realized investment gains (losses) | 19,985 | 9,308 | (8,688 | ) | 45,931 | Total net realized investment gains (losses) | 8,849 | (28,673) | ||||||||||||||||||||||||||||||
Other income | 1,695 | 2,777 | 3,945 | 4,872 | Other income | 2,005 | 2,251 | |||||||||||||||||||||||||||||||
Total revenues | 221,742 | 239,621 | 418,443 | 508,496 | Total revenues | 220,017 | 196,701 | |||||||||||||||||||||||||||||||
Expenses | Expenses | |||||||||||||||||||||||||||||||||||||
Net losses and loss adjustment expenses | 210,999 | 168,440 | 375,831 | 328,195 | Net losses and loss adjustment expenses | 149,785 | 164,832 | |||||||||||||||||||||||||||||||
Underwriting, policy acquisition and operating expenses: | Underwriting, policy acquisition and operating expenses: | |||||||||||||||||||||||||||||||||||||
Operating expense | 33,349 | 34,661 | 68,120 | 67,951 | Operating expense | 31,522 | 34,773 | |||||||||||||||||||||||||||||||
DPAC amortization | 25,343 | 28,047 | 52,626 | 56,149 | DPAC amortization | 24,929 | 27,283 | |||||||||||||||||||||||||||||||
SPC U.S. federal income tax expense | 480 | — | 702 | — | SPC U.S. federal income tax expense | 356 | 222 | |||||||||||||||||||||||||||||||
SPC dividend expense (income) | 4,642 | (7,033 | ) | 4,134 | (2,246 | ) | SPC dividend expense (income) | 1,742 | (508) | |||||||||||||||||||||||||||||
Interest expense | 3,714 | 4,247 | 7,844 | 8,576 | Interest expense | 3,212 | 4,129 | |||||||||||||||||||||||||||||||
Total expenses | 278,527 | 228,362 | 509,257 | 458,625 | Total expenses | 211,546 | 230,731 | |||||||||||||||||||||||||||||||
Income (loss) before income taxes | (56,785 | ) | 11,259 | (90,814 | ) | 49,871 | Income (loss) before income taxes | 8,471 | (34,030) | |||||||||||||||||||||||||||||
Provision for income taxes: | Provision for income taxes: | |||||||||||||||||||||||||||||||||||||
Current expense (benefit) | (36,083 | ) | 1,507 | (37,934 | ) | 1,851 | Current expense (benefit) | 3,008 | (1,852) | |||||||||||||||||||||||||||||
Deferred expense (benefit) | (2,603 | ) | (1,784 | ) | (12,827 | ) | 4,834 | Deferred expense (benefit) | (2,272) | (10,224) | ||||||||||||||||||||||||||||
Total income tax expense (benefit) | (38,686 | ) | (277 | ) | (50,761 | ) | 6,685 | Total income tax expense (benefit) | 736 | (12,076) | ||||||||||||||||||||||||||||
Net income (loss) | (18,099 | ) | 11,536 | (40,053 | ) | 43,186 | Net income (loss) | 7,735 | (21,954) | |||||||||||||||||||||||||||||
Other comprehensive income (loss), after tax, net of reclassification adjustments | 66,040 | 23,074 | 24,175 | 48,640 | Other comprehensive income (loss), after tax, net of reclassification adjustments | (33,705) | (41,865) | |||||||||||||||||||||||||||||||
Comprehensive income (loss) | $ | 47,941 | $ | 34,610 | $ | (15,878 | ) | $ | 91,826 | Comprehensive income (loss) | $ | (25,970) | $ | (63,819) | ||||||||||||||||||||||||
Earnings (loss) per share | Earnings (loss) per share | |||||||||||||||||||||||||||||||||||||
Basic | $ | (0.34 | ) | $ | 0.21 | $ | (0.74 | ) | $ | 0.80 | Basic | $ | 0.14 | $ | (0.41) | |||||||||||||||||||||||
Diluted | $ | (0.34 | ) | $ | 0.21 | $ | (0.74 | ) | $ | 0.80 | Diluted | $ | 0.14 | $ | (0.41) | |||||||||||||||||||||||
Weighted average number of common shares outstanding: | Weighted average number of common shares outstanding: | |||||||||||||||||||||||||||||||||||||
Basic | 53,864 | 53,750 | 53,836 | 53,716 | Basic | 53,918 | 53,808 | |||||||||||||||||||||||||||||||
Diluted | 53,886 | 53,828 | 53,886 | 53,818 | Diluted | 53,998 | 53,885 | |||||||||||||||||||||||||||||||
Cash dividends declared per common share | $ | 0.05 | $ | 0.31 | $ | 0.36 | $ | 0.62 | Cash dividends declared per common share | $ | 0.05 | $ | 0.31 |
Six Months Ended June 30 | |||||||
2020 | 2019 | ||||||
Operating Activities | |||||||
Net income (loss) | $ | (40,053 | ) | $ | 43,186 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization, net of accretion | 9,824 | 9,653 | |||||
(Increase) decrease in cash surrender value of BOLI | (913 | ) | (912 | ) | |||
Net realized investment (gains) losses | 8,688 | (45,931 | ) | ||||
Share-based compensation | 2,032 | 2,320 | |||||
Deferred income tax expense (benefit) | (12,827 | ) | 4,834 | ||||
Policy acquisition costs, net of amortization (net deferral) | 3,317 | (1,755 | ) | ||||
Equity in (earnings) loss of unconsolidated subsidiaries | 26,917 | 5,962 | |||||
Distributed earnings from unconsolidated subsidiaries | 27,437 | 7,298 | |||||
Other | 2,755 | 1,643 | |||||
Other changes in assets and liabilities: | |||||||
Premiums receivable | 9,540 | (17,362 | ) | ||||
Reinsurance related assets and liabilities | (22,190 | ) | (22,536 | ) | |||
Other assets | (22,740 | ) | (2,557 | ) | |||
Reserve for losses and loss adjustment expenses | 42,655 | 75,613 | |||||
Unearned premiums | (20,585 | ) | 26,712 | ||||
Other liabilities | (11,384 | ) | (7,153 | ) | |||
Net cash provided (used) by operating activities | 2,473 | 79,015 | |||||
Investing Activities | |||||||
Purchases of: | |||||||
Fixed maturities, available-for-sale | (371,876 | ) | (350,937 | ) | |||
Equity investments | (32,544 | ) | (38,959 | ) | |||
Other investments | (21,238 | ) | (13,769 | ) | |||
Funding of qualified affordable housing project tax credit partnerships | (1,307 | ) | (322 | ) | |||
Investment in unconsolidated subsidiaries | (24,135 | ) | (41,947 | ) | |||
Proceeds from sales or maturities of: | |||||||
Fixed maturities, available-for-sale | 433,090 | 277,592 | |||||
Equity investments | 171,155 | 102,410 | |||||
Other investments | 19,868 | 14,715 | |||||
Net sales or (purchases) of fixed maturities, trading | 1,588 | (4,486 | ) | ||||
Return of invested capital from unconsolidated subsidiaries | 21,742 | 10,800 | |||||
Net sales or maturities (purchases) of short-term investments | (138,116 | ) | 21,623 | ||||
Unsettled security transactions, net change | 30,115 | (4,171 | ) | ||||
Purchases of capital assets | (4,483 | ) | (5,042 | ) | |||
Purchases of intangible assets | (1,198 | ) | — | ||||
Repayments under Syndicate Credit Agreement | — | 29,790 | |||||
Other | (1,142 | ) | (17 | ) | |||
Net cash provided (used) by investing activities | 81,519 | (2,720 | ) | ||||
Continued on the following page. |
Three Months Ended March 31 | |||||||||||
2021 | 2020 | ||||||||||
Operating Activities | |||||||||||
Net income (loss) | $ | 7,735 | $ | (21,954) | |||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Depreciation and amortization, net of accretion | 6,722 | 4,734 | |||||||||
(Increase) decrease in cash surrender value of BOLI | 915 | (457) | |||||||||
Net realized investment (gains) losses | (8,849) | 28,673 | |||||||||
Share-based compensation | 1,031 | 1,011 | |||||||||
Deferred income tax expense (benefit) | (2,272) | (10,224) | |||||||||
Policy acquisition costs, net of amortization (net deferral) | (420) | (599) | |||||||||
Equity in (earnings) loss of unconsolidated subsidiaries | (6,788) | 1,562 | |||||||||
Distributed earnings from unconsolidated subsidiaries | 5,658 | 1,585 | |||||||||
Other | (661) | (703) | |||||||||
Other changes in assets and liabilities: | |||||||||||
Premiums receivable | (9,165) | (22,442) | |||||||||
Reinsurance related assets and liabilities | (12,290) | (4,623) | |||||||||
Other assets | 13,151 | 14,268 | |||||||||
Reserve for losses and loss adjustment expenses | 21,071 | (15,478) | |||||||||
Unearned premiums | 13,699 | 30,202 | |||||||||
Other liabilities | (837) | (17,604) | |||||||||
Net cash provided (used) by operating activities | 28,700 | (12,049) | |||||||||
Investing Activities | |||||||||||
Purchases of: | |||||||||||
Fixed maturities, available-for-sale | (342,197) | (227,503) | |||||||||
Equity investments | (38,232) | (23,136) | |||||||||
Other investments | (33,252) | (6,065) | |||||||||
Investment in unconsolidated subsidiaries | (5,319) | (17,180) | |||||||||
Proceeds from sales or maturities of: | |||||||||||
Fixed maturities, available-for-sale | 195,266 | 180,698 | |||||||||
Equity investments | 82,048 | 157,652 | |||||||||
Other investments | 12,026 | 6,026 | |||||||||
Net sales or (purchases) of fixed maturities, trading | 3,163 | (407) | |||||||||
Return of invested capital from unconsolidated subsidiaries | 17,618 | 1,481 | |||||||||
Net sales or maturities (purchases) of short-term investments | 56,836 | (7,441) | |||||||||
Unsettled security transactions, net change | 27,025 | 12,656 | |||||||||
Purchases of capital assets | (1,243) | (2,750) | |||||||||
Other | 0 | (2,206) | |||||||||
Net cash provided (used) by investing activities | (26,261) | 71,825 | |||||||||
Continued on the following page. |
Six Months Ended June 30 | |||||||
2020 | 2019 | ||||||
Continued from the previous page. | |||||||
Financing Activities | |||||||
Repayments of Mortgage Loans | (751 | ) | (724 | ) | |||
Dividends to shareholders | (33,292 | ) | (59,956 | ) | |||
Capital contribution received from (return of capital to) external segregated portfolio cell participants | (146 | ) | (1,544 | ) | |||
Other | (904 | ) | (2,663 | ) | |||
Net cash provided (used) by financing activities | (35,093 | ) | (64,887 | ) | |||
Increase (decrease) in cash and cash equivalents | 48,899 | 11,408 | |||||
Cash and cash equivalents at beginning of period | 175,369 | 80,471 | |||||
Cash and cash equivalents at end of period | $ | 224,268 | $ | 91,879 | |||
Significant Non-Cash Transactions | |||||||
Dividends declared and not yet paid | $ | 2,693 | $ | 16,656 | |||
Operating ROU assets obtained in exchange for operating lease liabilities | $ | — | $ | 3,729 |
Three Months Ended March 31 | |||||||||||
2021 | 2020 | ||||||||||
Continued from the previous page. | |||||||||||
Financing Activities | |||||||||||
Repayments of Mortgage Loans | (390) | (376) | |||||||||
Dividends to shareholders | (2,686) | (16,714) | |||||||||
Capital contribution received from (return of capital to) external segregated portfolio cell participants | (53) | 204 | |||||||||
Other | (257) | (1,090) | |||||||||
Net cash provided (used) by financing activities | (3,386) | (17,976) | |||||||||
Increase (decrease) in cash and cash equivalents | (947) | 41,800 | |||||||||
Cash and cash equivalents at beginning of period | 215,782 | 175,369 | |||||||||
Cash and cash equivalents at end of period | $ | 214,835 | $ | 217,169 | |||||||
Significant Non-Cash Transactions | |||||||||||
Dividends declared and not yet paid | $ | 2,699 | $ | 16,691 | |||||||
(In thousands) | Premiums Receivable, Net | Allowance for Expected Credit Losses | |||||||||||||||||||||||||||
Balance, December 31, 2020 | $ | 201,395 | $ | 6,131 | |||||||||||||||||||||||||
Provision for expected credit losses | 105 | ||||||||||||||||||||||||||||
Write offs charged against the allowance | (232) | ||||||||||||||||||||||||||||
Recoveries of amounts previously written off | 78 | ||||||||||||||||||||||||||||
Balance, March 31, 2021 | $ | 210,560 | $ | 6,082 |
(In thousands) | Premiums Receivable, Net | Allowance for Expected Credit Losses | |||||||||||||||||||||
Balance, December 31, 2019 | $ | 249,540 | $ | 1,590 | |||||||||||||||||||
Cumulative-effect adjustment, before tax* | 5,160 | ||||||||||||||||||||||
Provision for expected credit losses | 88 | ||||||||||||||||||||||
Write offs charged against the allowance | (689) | ||||||||||||||||||||||
Recoveries of amounts previously written off | 48 | ||||||||||||||||||||||
Balance, March 31, 2020 | $ | 266,822 | $ | 6,197 | |||||||||||||||||||
*Due to the adoption of ASU 2016-13, ProAssurance recorded a cumulative-effect adjustment to beginning retained earnings as of January 1, 2020 to increase its consolidated allowance for expected credit losses related to its premiums receivable. See Note 1 of the Notes to Consolidated Financial Statements in ProAssurance's December 31, 2020 report on Form 10-K. |
(In thousands) | June 30, 2020 | December 31, 2019 | ||||||
SPC dividends payable | $ | 60,993 | $ | 55,763 | ||||
Unpaid shareholder dividends | 2,693 | 16,676 | ||||||
All other | 115,183 | 100,817 | ||||||
Total other liabilities | $ | 178,869 | $ | 173,256 |
(In thousands) | Premiums Receivable, Net | Allowance for Expected Credit Losses | |||||||||||||||||||||||||||
Balance, December 31, 2020 | $ | 201,395 | $ | 6,131 | |||||||||||||||||||||||||
Provision for expected credit losses | 105 | ||||||||||||||||||||||||||||
Write offs charged against the allowance | (232) | ||||||||||||||||||||||||||||
Recoveries of amounts previously written off | 78 | ||||||||||||||||||||||||||||
Balance, March 31, 2021 | $ | 210,560 | $ | 6,082 |
(In thousands) | Premiums Receivable, Net | Allowance for Expected Credit Losses | |||||
Balance, April 1, 2020 | $ | 266,822 | $ | 6,197 | |||
Provision for expected credit losses | 405 | ||||||
Write offs charged against the allowance | (16 | ) | |||||
Recoveries of amounts previously written off | 41 | ||||||
Balance, June 30, 2020 | $ | 234,840 | $ | 6,627 |
(In thousands) | Premiums Receivable, Net | Allowance for Expected Credit Losses | |||||
Balance, December 31, 2019 | $ | 249,540 | $ | 1,590 | |||
Cumulative-effect adjustment on January 1, 2020, before tax - ASU 2016-13 adoption | 5,160 | ||||||
Provision for expected credit losses | 493 | ||||||
Write offs charged against the allowance | (674 | ) | |||||
Recoveries of amounts previously written off | 58 | ||||||
Balance, June 30, 2020 | $ | 234,840 | $ | 6,627 |
(In thousands) | Premiums Receivable, Net | Allowance for Expected Credit Losses | |||||||||||||||||||||
Balance, December 31, 2019 | $ | 249,540 | $ | 1,590 | |||||||||||||||||||
Cumulative-effect adjustment, before tax* | 5,160 | ||||||||||||||||||||||
Provision for expected credit losses | 88 | ||||||||||||||||||||||
Write offs charged against the allowance | (689) | ||||||||||||||||||||||
Recoveries of amounts previously written off | 48 | ||||||||||||||||||||||
Balance, March 31, 2020 | $ | 266,822 | $ | 6,197 | |||||||||||||||||||
*Due to the adoption of ASU 2016-13, ProAssurance recorded a cumulative-effect adjustment to beginning retained earnings as of January 1, 2020 to increase its consolidated allowance for expected credit losses related to its premiums receivable. See Note 1 of the Notes to Consolidated Financial Statements in ProAssurance's December 31, 2020 report on Form 10-K. |
(In thousands) | Premiums Receivable, Net | Allowance for Expected Credit Losses | |||||||||||||||||||||||||||
Balance, December 31, 2020 | $ | 201,395 | $ | 6,131 | |||||||||||||||||||||||||
Provision for expected credit losses | 105 | ||||||||||||||||||||||||||||
Write offs charged against the allowance | (232) | ||||||||||||||||||||||||||||
Recoveries of amounts previously written off | 78 | ||||||||||||||||||||||||||||
Balance, March 31, 2021 | $ | 210,560 | $ | 6,082 |
(In thousands) | Premiums Receivable, Net | Allowance for Expected Credit Losses | |||||||||||||||||||||
Balance, December 31, 2019 | $ | 249,540 | $ | 1,590 | |||||||||||||||||||
Cumulative-effect adjustment, before tax* | 5,160 | ||||||||||||||||||||||
Provision for expected credit losses | 88 | ||||||||||||||||||||||
Write offs charged against the allowance | (689) | ||||||||||||||||||||||
Recoveries of amounts previously written off | 48 | ||||||||||||||||||||||
Balance, March 31, 2020 | $ | 266,822 | $ | 6,197 | |||||||||||||||||||
*Due to the adoption of ASU 2016-13, ProAssurance recorded a cumulative-effect adjustment to beginning retained earnings as of January 1, 2020 to increase its consolidated allowance for expected credit losses related to its premiums receivable. See Note 1 of the Notes to Consolidated Financial Statements in ProAssurance's December 31, 2020 report on Form 10-K. |
(In thousands) | March 31, 2021 | December 31, 2020 | ||||||||||||
SPC dividends payable | $ | 69,732 | $ | 68,865 | ||||||||||
Unpaid shareholder dividends | 2,699 | 2,694 | ||||||||||||
All other | 132,666 | 110,480 | ||||||||||||
Total other liabilities | $ | 205,097 | $ | 182,039 |
Level 1: | quoted (unadjusted) market prices in active markets for identical assets and liabilities. For ProAssurance, Level 1 inputs are generally quotes for |
Level 2: | market data obtained from sources independent of the reporting entity (observable inputs). For ProAssurance, Level 2 inputs generally include quoted prices in markets that are not active, quoted prices for similar assets or liabilities, and results from pricing models that use observable inputs such as interest rates and yield curves that are generally available at commonly quoted intervals. |
Level 3: | the reporting entity’s own assumptions about market participant assumptions based on the best information available in the circumstances (non-observable inputs). For ProAssurance, Level 3 inputs are used in situations where little or no Level 1 or 2 inputs are available or are inappropriate given the particular circumstances. Level 3 inputs include results from pricing models for which some or all of the inputs are not observable, discounted cash flow methodologies, single non-binding broker quotes and adjustments to externally quoted prices that are based on management judgment or estimation. |
March 31, 2021 | |||||||||||||||||||||||
Fair Value Measurements Using | Total | ||||||||||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Fair Value | |||||||||||||||||||
Assets: | |||||||||||||||||||||||
Fixed maturities, available-for-sale | |||||||||||||||||||||||
U.S. Treasury obligations | $ | 0 | $ | 102,877 | $ | 0 | $ | 102,877 | |||||||||||||||
U.S. Government-sponsored enterprise obligations | 0 | 11,944 | 0 | 11,944 | |||||||||||||||||||
State and municipal bonds | 0 | 322,465 | 0 | 322,465 | |||||||||||||||||||
Corporate debt, multiple observable inputs | 0 | 1,421,097 | 0 | 1,421,097 | |||||||||||||||||||
Corporate debt, limited observable inputs | 0 | 0 | 7,769 | 7,769 | |||||||||||||||||||
Residential mortgage-backed securities | 0 | 270,059 | 1,489 | 271,548 | |||||||||||||||||||
Agency commercial mortgage-backed securities | 0 | 13,718 | 0 | 13,718 | |||||||||||||||||||
Other commercial mortgage-backed securities | 0 | 121,319 | 0 | 121,319 | |||||||||||||||||||
Other asset-backed securities | 0 | 282,712 | 7,824 | 290,536 | |||||||||||||||||||
Fixed maturities, trading | 0 | 45,151 | 0 | 45,151 | |||||||||||||||||||
Equity investments | |||||||||||||||||||||||
Bond funds | 60,264 | 0 | 0 | 60,264 | |||||||||||||||||||
All other | 17,273 | 0 | 0 | 17,273 | |||||||||||||||||||
Short-term investments | 259,075 | 21,918 | 0 | 280,993 | |||||||||||||||||||
Other investments | 29 | 67,070 | 2,152 | 69,251 | |||||||||||||||||||
Other assets | 0 | 836 | 0 | 836 | |||||||||||||||||||
Total assets categorized within the fair value hierarchy | $ | 336,641 | $ | 2,681,166 | $ | 19,234 | 3,037,041 | ||||||||||||||||
Assets carried at NAV, which approximates fair value and which are not categorized within the fair value hierarchy, reported as a part of: | |||||||||||||||||||||||
Investment in unconsolidated subsidiaries | 226,898 | ||||||||||||||||||||||
Total assets at fair value | $ | 3,263,939 |
June 30, 2020 | |||||||||||||||
Fair Value Measurements Using | Total | ||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Fair Value | |||||||||||
Assets: | |||||||||||||||
Fixed maturities, available-for-sale | |||||||||||||||
U.S. Treasury obligations | $ | — | $ | 115,241 | $ | — | $ | 115,241 | |||||||
U.S. Government-sponsored enterprise obligations | — | 8,693 | — | 8,693 | |||||||||||
State and municipal bonds | — | 293,718 | — | 293,718 | |||||||||||
Corporate debt, multiple observable inputs | — | 1,271,326 | — | 1,271,326 | |||||||||||
Corporate debt, limited observable inputs | — | — | 3,117 | 3,117 | |||||||||||
Residential mortgage-backed securities | — | 234,093 | 600 | 234,693 | |||||||||||
Agency commercial mortgage-backed securities | — | 13,192 | — | 13,192 | |||||||||||
Other commercial mortgage-backed securities | — | 90,757 | — | 90,757 | |||||||||||
Other asset-backed securities | — | 223,833 | 5,378 | 229,211 | |||||||||||
Fixed maturities, trading | — | 46,116 | — | 46,116 | |||||||||||
Equity investments | |||||||||||||||
Financial | 10,274 | — | — | 10,274 | |||||||||||
Utilities/Energy | 568 | — | — | 568 | |||||||||||
Consumer oriented | 1,082 | — | — | 1,082 | |||||||||||
Industrial | 1,561 | — | — | 1,561 | |||||||||||
Bond funds | 41,521 | — | — | 41,521 | |||||||||||
All other | 19,952 | — | — | 19,952 | |||||||||||
Short-term investments | 462,524 | 15,550 | — | 478,074 | |||||||||||
Other investments | 1,425 | 34,985 | 1,568 | 37,978 | |||||||||||
Other assets | — | 388 | — | 388 | |||||||||||
Total assets categorized within the fair value hierarchy | $ | 538,907 | $ | 2,347,892 | $ | 10,663 | 2,897,462 | ||||||||
Assets carried at NAV, which approximates fair value and which are not categorized within the fair value hierarchy, reported as a part of: | |||||||||||||||
Equity investments | 23,765 | ||||||||||||||
Investment in unconsolidated subsidiaries | 223,030 | ||||||||||||||
Total assets at fair value | $ | 3,144,257 |
December 31, 2019 | |||||||||||||||
Fair Value Measurements Using | Total | ||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Fair Value | |||||||||||
Assets: | |||||||||||||||
Fixed maturities, available-for-sale | |||||||||||||||
U.S. Treasury obligations | $ | — | $ | 110,467 | $ | — | $ | 110,467 | |||||||
U.S. Government-sponsored enterprise obligations | — | 17,340 | — | 17,340 | |||||||||||
State and municipal bonds | — | 296,093 | — | 296,093 | |||||||||||
Corporate debt, multiple observable inputs | — | 1,335,285 | — | 1,335,285 | |||||||||||
Corporate debt, limited observable inputs | — | — | 5,079 | 5,079 | |||||||||||
Residential mortgage-backed securities | — | 208,408 | — | 208,408 | |||||||||||
Agency commercial mortgage-backed securities | — | 8,221 | — | 8,221 | |||||||||||
Other commercial mortgage-backed securities | — | 71,868 | — | 71,868 | |||||||||||
Other asset-backed securities | — | 233,032 | 2,992 | 236,024 | |||||||||||
Fixed maturities, trading | — | 47,284 | — | 47,284 | |||||||||||
Equity investments | |||||||||||||||
Financial | 40,294 | — | — | 40,294 | |||||||||||
Utilities/Energy | 21,195 | — | — | 21,195 | |||||||||||
Consumer oriented | 29,288 | — | — | 29,288 | |||||||||||
Industrial | 26,440 | — | — | 26,440 | |||||||||||
Bond funds | 58,346 | — | — | 58,346 | |||||||||||
All other | 52,512 | — | — | 52,512 | |||||||||||
Short-term investments | 317,313 | 22,594 | — | 339,907 | |||||||||||
Other investments | 219 | 32,713 | 3,086 | 36,018 | |||||||||||
Other assets | — | 760 | — | 760 | |||||||||||
Total assets categorized within the fair value hierarchy | $ | 545,607 | $ | 2,384,065 | $ | 11,157 | 2,940,829 | ||||||||
Assets carried at NAV, which approximates fair value and which are not categorized within the fair value hierarchy, reported as a part of: | |||||||||||||||
Equity investments | 22,477 | ||||||||||||||
Investment in unconsolidated subsidiaries | 270,524 | ||||||||||||||
Total assets at fair value | $ | 3,233,830 |
December 31, 2020 | |||||||||||||||||||||||
Fair Value Measurements Using | Total | ||||||||||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Fair Value | |||||||||||||||||||
Assets: | |||||||||||||||||||||||
Fixed maturities, available-for-sale | |||||||||||||||||||||||
U.S. Treasury obligations | $ | 0 | $ | 107,059 | $ | 0 | $ | 107,059 | |||||||||||||||
U.S. Government-sponsored enterprise obligations | 0 | 12,261 | 0 | 12,261 | |||||||||||||||||||
State and municipal bonds | 0 | 332,920 | 0 | 332,920 | |||||||||||||||||||
Corporate debt, multiple observable inputs | 0 | 1,326,077 | 0 | 1,326,077 | |||||||||||||||||||
Corporate debt, limited observable inputs | 0 | 0 | 3,265 | 3,265 | |||||||||||||||||||
Residential mortgage-backed securities | 0 | 274,509 | 2,032 | 276,541 | |||||||||||||||||||
Agency commercial mortgage-backed securities | 0 | 13,310 | 0 | 13,310 | |||||||||||||||||||
Other commercial mortgage-backed securities | 0 | 113,092 | 0 | 113,092 | |||||||||||||||||||
Other asset-backed securities | 0 | 266,345 | 6,661 | 273,006 | |||||||||||||||||||
Fixed maturities, trading | 0 | 48,456 | 0 | 48,456 | |||||||||||||||||||
Equity investments | |||||||||||||||||||||||
Financial | 13,810 | 0 | 0 | 13,810 | |||||||||||||||||||
Utilities/Energy | 564 | 0 | 0 | 564 | |||||||||||||||||||
Consumer oriented | 1,262 | 0 | 0 | 1,262 | |||||||||||||||||||
Industrial | 2,240 | 0 | 0 | 2,240 | |||||||||||||||||||
Bond funds | 69,475 | 0 | 0 | 69,475 | |||||||||||||||||||
All other | 20,202 | 0 | 0 | 20,202 | |||||||||||||||||||
Short-term investments | 307,695 | 30,118 | 0 | 337,813 | |||||||||||||||||||
Other investments | 1,509 | 42,607 | 0 | 44,116 | |||||||||||||||||||
Other assets | 0 | 329 | 0 | 329 | |||||||||||||||||||
Total assets categorized within the fair value hierarchy | $ | 416,757 | $ | 2,567,083 | $ | 11,958 | 2,995,798 | ||||||||||||||||
Assets carried at NAV, which approximates fair value and which are not categorized within the fair value hierarchy, reported as a part of: | |||||||||||||||||||||||
Equity investments | 12,548 | ||||||||||||||||||||||
Investment in unconsolidated subsidiaries | 233,711 | ||||||||||||||||||||||
Total assets at fair value | $ | 3,242,057 |
Fair Value at | ||||||||||
($ in thousands) | June 30, 2020 | December 31, 2019 | Valuation Technique | Unobservable Input | Range (Weighted Average) | |||||
Assets: | ||||||||||
Corporate debt, limited observable inputs | $3,117 | $5,079 | Market Comparable Securities | Comparability Adjustment | 0% - 5% (2.5%) | |||||
Discounted Cash Flows | Comparability Adjustment | 0% - 5% (2.5%) | ||||||||
Residential mortgage-backed and other commercial mortgage-backed securities | $600 | — | Market Comparable Securities | Comparability Adjustment | 0% - 5% (2.5%) | |||||
Discounted Cash Flows | Comparability Adjustment | 0% - 5% (2.5%) | ||||||||
Other asset-backed securities | $5,378 | $2,992 | Market Comparable Securities | Comparability Adjustment | 0% - 5% (2.5%) | |||||
Discounted Cash Flows | Comparability Adjustment | 0% - 5% (2.5%) | ||||||||
Other investments | $1,568 | 3,086 | Discounted Cash Flows | Comparability Adjustment | 0% - 10% (5%) |
Fair Value at | ||||||||||||||||||||||||||||||||
($ in thousands) | March 31, 2021 | December 31, 2020 | Valuation Technique | Unobservable Input | Range (Weighted Average) | |||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||
Corporate debt, limited observable inputs | $7,769 | $3,265 | Market Comparable Securities | Comparability Adjustment | 0% - 5% (2.5%) | |||||||||||||||||||||||||||
Discounted Cash Flows | Comparability Adjustment | 0% - 5% (2.5%) | ||||||||||||||||||||||||||||||
Residential mortgage-backed securities | $1,489 | $2,032 | Market Comparable Securities | Comparability Adjustment | 0% - 5% (2.5%) | |||||||||||||||||||||||||||
Discounted Cash Flows | Comparability Adjustment | 0% - 5% (2.5%) | ||||||||||||||||||||||||||||||
Other asset-backed securities | $7,824 | $6,661 | Market Comparable Securities | Comparability Adjustment | 0% - 5% (2.5%) | |||||||||||||||||||||||||||
Discounted Cash Flows | Comparability Adjustment | 0% - 5% (2.5%) | ||||||||||||||||||||||||||||||
Other investments | $2,152 | $0 | Discounted Cash Flows | Comparability Adjustment | 0% - 10% (5%) | |||||||||||||||||||||||||||
March 31, 2021 | |||||||||||||||||||||||||||||||||||
Level 3 Fair Value Measurements – Assets | |||||||||||||||||||||||||||||||||||
(In thousands) | Corporate Debt | Asset-backed Securities | Other Investments | Total | |||||||||||||||||||||||||||||||
Balance December 31, 2020 | $ | 3,265 | $ | 8,693 | $ | 0 | $ | 11,958 | |||||||||||||||||||||||||||
Total gains (losses) realized and unrealized: | |||||||||||||||||||||||||||||||||||
Included in earnings, as a part of: | |||||||||||||||||||||||||||||||||||
Net investment income | 1 | (2) | 0 | (1) | |||||||||||||||||||||||||||||||
Net realized investment gains (losses) | 0 | (11) | 0 | (11) | |||||||||||||||||||||||||||||||
Included in other comprehensive income | 20 | (179) | 0 | (159) | |||||||||||||||||||||||||||||||
Purchases | 4,875 | 7,357 | 0 | 12,232 | |||||||||||||||||||||||||||||||
Sales | (17) | (304) | 0 | (321) | |||||||||||||||||||||||||||||||
Transfers in | 858 | 0 | 2,152 | 3,010 | |||||||||||||||||||||||||||||||
Transfers out | (1,233) | (6,241) | 0 | (7,474) | |||||||||||||||||||||||||||||||
Balance March 31, 2021 | $ | 7,769 | $ | 9,313 | $ | 2,152 | $ | 19,234 | |||||||||||||||||||||||||||
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end | $ | 0 | $ | 0 | $ | 0 | $ | 0 |
June 30, 2020 | March 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||
Level 3 Fair Value Measurements – Assets | Level 3 Fair Value Measurements – Assets | |||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | Corporate Debt | Asset-backed Securities | Other investments | Total | (In thousands) | Corporate Debt | Asset-backed Securities | Other Investments | Total | |||||||||||||||||||||||||||||||||||||||||
Balance March 31, 2020 | $ | 3,440 | $ | 6,897 | $ | 1,338 | $ | 11,675 | ||||||||||||||||||||||||||||||||||||||||||
Balance December 31, 2019 | Balance December 31, 2019 | $ | 5,079 | $ | 2,992 | $ | 3,086 | $ | 11,157 | |||||||||||||||||||||||||||||||||||||||||
Total gains (losses) realized and unrealized: | Total gains (losses) realized and unrealized: | |||||||||||||||||||||||||||||||||||||||||||||||||
Included in earnings, as a part of: | Included in earnings, as a part of: | |||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | — | (10 | ) | — | (10 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Net realized investment gains (losses) | — | — | 230 | 230 | Net realized investment gains (losses) | 0 | 0 | (222) | (222) | |||||||||||||||||||||||||||||||||||||||||
Included in other comprehensive income | 127 | 203 | — | 330 | Included in other comprehensive income | (83) | (122) | 0 | (205) | |||||||||||||||||||||||||||||||||||||||||
Purchases | — | 1,406 | — | 1,406 | Purchases | 0 | 3,422 | 0 | 3,422 | |||||||||||||||||||||||||||||||||||||||||
Sales | (450 | ) | (789 | ) | — | (1,239 | ) | Sales | (1,707) | 0 | 0 | (1,707) | ||||||||||||||||||||||||||||||||||||||
Transfers in | — | — | — | — | Transfers in | 945 | 605 | 0 | 1,550 | |||||||||||||||||||||||||||||||||||||||||
Transfers out | — | (1,729 | ) | — | (1,729 | ) | Transfers out | (794) | 0 | (1,526) | (2,320) | |||||||||||||||||||||||||||||||||||||||
Balance June 30, 2020 | $ | 3,117 | $ | 5,978 | $ | 1,568 | $ | 10,663 | ||||||||||||||||||||||||||||||||||||||||||
Balance March 31, 2020 | Balance March 31, 2020 | $ | 3,440 | $ | 6,897 | $ | 1,338 | $ | 11,675 | |||||||||||||||||||||||||||||||||||||||||
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end | $ | — | $ | — | $ | 230 | $ | 230 | Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end | $ | 0 | $ | 0 | $ | (222) | $ | (222) |
June 30, 2020 | |||||||||||||||
Level 3 Fair Value Measurements – Assets | |||||||||||||||
(In thousands) | Corporate Debt | Asset-backed Securities | Other investments | Total | |||||||||||
Balance December 31, 2019 | $ | 5,079 | $ | 2,992 | $ | 3,086 | $ | 11,157 | |||||||
Total gains (losses) realized and unrealized: | |||||||||||||||
Included in earnings, as a part of: | |||||||||||||||
Net investment income | — | (10 | ) | — | (10 | ) | |||||||||
Net realized investment gains (losses) | — | — | 8 | 8 | |||||||||||
Included in other comprehensive income | 44 | 81 | — | 125 | |||||||||||
Purchases | — | 4,828 | — | 4,828 | |||||||||||
Sales | (2,157 | ) | (789 | ) | — | (2,946 | ) | ||||||||
Transfers in | 945 | 605 | — | 1,550 | |||||||||||
Transfers out | (794 | ) | (1,729 | ) | (1,526 | ) | (4,049 | ) | |||||||
Balance June 30, 2020 | $ | 3,117 | $ | 5,978 | $ | 1,568 | $ | 10,663 | |||||||
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end | $ | — | $ | — | $ | 8 | $ | 8 |
June 30, 2019 | |||||||||||||||
Level 3 Fair Value Measurements – Assets | |||||||||||||||
(In thousands) | Corporate Debt | Asset-backed Securities | Other investments | Total | |||||||||||
Balance March 31, 2019 | $ | 4,296 | $ | 4,132 | $ | 3 | $ | 8,431 | |||||||
Total gains (losses) realized and unrealized: | |||||||||||||||
Included in earnings, as a part of: | |||||||||||||||
Net investment income | — | (22 | ) | — | (22 | ) | |||||||||
Net realized investment gains (losses) | — | — | 33 | 33 | |||||||||||
Included in other comprehensive income | 8 | 53 | — | 61 | |||||||||||
Purchases | — | — | 170 | 170 | |||||||||||
Sales | (2,000 | ) | — | — | (2,000 | ) | |||||||||
Transfers in | — | — | 418 | 418 | |||||||||||
Transfers out | — | — | — | — | |||||||||||
Balance June 30, 2019 | $ | 2,304 | $ | 4,163 | $ | 624 | $ | 7,091 | |||||||
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end | $ | — | $ | — | $ | — | $ | — |
June 30, 2019 | |||||||||||||||
Level 3 Fair Value Measurements – Assets | |||||||||||||||
(In thousands) | Corporate Debt | Asset-backed Securities | Other investments | Total | |||||||||||
Balance December 31, 2018 | $ | 4,322 | $ | 3,850 | $ | 3 | $ | 8,175 | |||||||
Total gains (losses) realized and unrealized: | |||||||||||||||
Included in earnings, as a part of: | |||||||||||||||
Net investment income | 2 | (140 | ) | — | (138 | ) | |||||||||
Net realized investment gains (losses) | — | — | 33 | 33 | |||||||||||
Included in other comprehensive income | 11 | 210 | — | 221 | |||||||||||
Purchases | 1,305 | — | 170 | 1,475 | |||||||||||
Sales | (2,136 | ) | (6 | ) | — | (2,142 | ) | ||||||||
Transfers in | — | 1,200 | 418 | 1,618 | |||||||||||
Transfers out | (1,200 | ) | (951 | ) | — | (2,151 | ) | ||||||||
Balance June 30, 2019 | $ | 2,304 | $ | 4,163 | $ | 624 | 7,091 | ||||||||
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end | $ | — | $ | — | $ | — | $ | — |
Unfunded Commitments | Fair Value | ||||||||||
(In thousands) | June 30, 2020 | June 30, 2020 | December 31, 2019 | ||||||||
Equity investments: | |||||||||||
Mortgage fund (1) | NaN | $ | 23,765 | $ | 22,477 | ||||||
Investment in unconsolidated subsidiaries: | |||||||||||
Private debt funds (2) | $ | 12,049 | 18,071 | 19,011 | |||||||
Long equity fund (3) | NaN | — | 5,293 | ||||||||
Long/short equity funds (4) | NaN | 516 | 30,542 | ||||||||
Non-public equity funds (5) | $ | 55,245 | 123,596 | 120,343 | |||||||
Multi-strategy fund of funds (6) | NaN | 1,995 | 1,951 | ||||||||
Credit funds (7) | $ | 1,962 | 41,306 | 42,415 | |||||||
Long/short commodities fund (8) | NaN | — | 14,519 | ||||||||
Strategy focused funds (9) | $ | 42,416 | 37,546 | 36,450 | |||||||
223,030 | 270,524 | ||||||||||
Total investments carried at NAV | $ | 246,795 | $ | 293,001 |
Unfunded Commitments | Fair Value | ||||||||||||||||
(In thousands) | March 31, 2021 | March 31, 2021 | December 31, 2020 | ||||||||||||||
Equity investments: | |||||||||||||||||
Mortgage fund (1) | NaN | $ | 0 | $ | 12,548 | ||||||||||||
Investment in unconsolidated subsidiaries: | |||||||||||||||||
Private debt funds (2) | $11,308 | 16,317 | 16,387 | ||||||||||||||
Long/short equity funds (3) | NaN | 632 | 596 | ||||||||||||||
Non-public equity funds (4) | $42,554 | 137,648 | 138,357 | ||||||||||||||
Credit funds (5) | $1,653 | 26,943 | 34,848 | ||||||||||||||
Strategy focused funds (6) | $36,927 | 45,358 | 43,523 | ||||||||||||||
226,898 | 233,711 | ||||||||||||||||
Total investments carried at NAV | $ | 226,898 | $ | 246,259 | |||||||||||||
(4)This investment is comprised of interests in multiple unrelated LP funds, each structured to provide capital appreciation through diversified investments in private equity, which can include investments in buyout, venture capital, debt including senior, second lien and mezzanine, distressed debt, collateralized loan obligations and other private equity-oriented LPs. Two of the LPs allow redemption by terms set forth in the LP agreements; the others do not permit redemption. Income and capital are to be periodically distributed at the discretion of the LP over time frames that are anticipated to span up to ten years. (5)This investment is comprised of 4 unrelated LP funds. Two funds seek to obtain superior risk-adjusted absolute returns through a diversified portfolio of debt securities, including bonds, loans and other asset-backed instruments. A third fund focuses on private middle market company mezzanine loans, while the remaining fund seeks event driven opportunities across the corporate credit spectrum. Two funds are allowed redemptions at any quarter-end with a prior notice requirement of 90 days; one fund permits redemption at any quarter-end with a prior notice requirement of 180 days and one fund does not allow redemptions. For the fund that does not allow redemptions, income and capital are to be periodically distributed at the discretion of the LP over time frames that are anticipated to span up to twelve years. |
(6) |
June 30, 2020 | December 31, 2019 | ||||||||||||||
(In thousands) | Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||
Financial assets: | |||||||||||||||
BOLI | $ | 67,025 | $ | 67,025 | $ | 66,112 | $ | 66,112 | |||||||
Other investments | $ | 2,922 | $ | 2,922 | $ | 2,931 | $ | 2,931 | |||||||
Other assets | $ | 26,596 | $ | 26,602 | $ | 28,645 | $ | 28,650 | |||||||
Financial liabilities: | |||||||||||||||
Senior notes due 2023* | $ | 250,000 | $ | 261,208 | $ | 250,000 | $ | 273,865 | |||||||
Mortgage Loans* | $ | 36,864 | $ | 36,864 | $ | 37,617 | $ | 37,617 | |||||||
Other liabilities | $ | 25,777 | $ | 25,777 | $ | 27,953 | $ | 27,953 | |||||||
* Carrying value excludes unamortized debt issuance costs. |
March 31, 2021 | December 31, 2020 | ||||||||||||||||||||||
(In thousands) | Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||||||||
Financial assets: | |||||||||||||||||||||||
BOLI | $ | 66,932 | $ | 66,932 | $ | 67,847 | $ | 67,847 | |||||||||||||||
Other investments | $ | 2,370 | $ | 2,370 | $ | 2,952 | $ | 2,952 | |||||||||||||||
Other assets | $ | 33,869 | $ | 33,885 | $ | 31,128 | $ | 31,141 | |||||||||||||||
Financial liabilities: | |||||||||||||||||||||||
Senior notes due 2023* | $ | 250,000 | $ | 271,105 | $ | 250,000 | $ | 269,160 | |||||||||||||||
Mortgage Loans* | $ | 35,723 | $ | 35,723 | $ | 36,113 | $ | 36,113 | |||||||||||||||
Other liabilities | $ | 32,548 | $ | 32,548 | $ | 30,334 | $ | 30,334 | |||||||||||||||
* Carrying value excludes unamortized debt issuance costs. |
March 31, 2021 | |||||||||||||||||||||||||||||
(In thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||||||||||||||
Fixed maturities, available-for-sale | |||||||||||||||||||||||||||||
U.S. Treasury obligations | $ | 101,045 | $ | 2,088 | $ | 256 | $ | 102,877 | |||||||||||||||||||||
U.S. Government-sponsored enterprise obligations | 11,959 | 106 | 121 | 11,944 | |||||||||||||||||||||||||
State and municipal bonds | 312,809 | 11,196 | 1,540 | 322,465 | |||||||||||||||||||||||||
Corporate debt | 1,395,466 | 42,572 | 9,172 | 1,428,866 | |||||||||||||||||||||||||
Residential mortgage-backed securities | 268,344 | 5,727 | 2,523 | 271,548 | |||||||||||||||||||||||||
Agency commercial mortgage-backed securities | 13,196 | 537 | 15 | 13,718 | |||||||||||||||||||||||||
Other commercial mortgage-backed securities | 119,145 | 3,254 | 1,080 | 121,319 | |||||||||||||||||||||||||
Other asset-backed securities | 287,659 | 3,227 | 350 | 290,536 | |||||||||||||||||||||||||
$ | 2,509,623 | $ | 68,707 | $ | 15,057 | $ | 2,563,273 |
June 30, 2020 | December 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | Amortized Cost | Allowance for Expected Credit Losses | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | (In thousands) | Amortized Cost | Allowance for Expected Credit Losses | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||||||||||||||||||||||||||
Fixed maturities, available-for-sale | Fixed maturities, available-for-sale | |||||||||||||||||||||||||||||||||||||||||||||||
U.S. Treasury obligations | $ | 110,405 | $ | — | $ | 4,837 | $ | 1 | $ | 115,241 | U.S. Treasury obligations | $ | 104,097 | $ | 0 | $ | 2,985 | $ | 23 | $ | 107,059 | |||||||||||||||||||||||||||
U.S. Government-sponsored enterprise obligations | 8,506 | — | 187 | — | 8,693 | U.S. Government-sponsored enterprise obligations | 12,103 | 0 | 158 | 0 | 12,261 | |||||||||||||||||||||||||||||||||||||
State and municipal bonds | 277,091 | — | 16,658 | 31 | 293,718 | State and municipal bonds | 316,022 | 0 | 16,937 | 39 | 332,920 | |||||||||||||||||||||||||||||||||||||
Corporate debt | 1,229,377 | 1,408 | 54,999 | 8,525 | 1,274,443 | Corporate debt | 1,267,992 | 552 | 63,204 | 1,302 | 1,329,342 | |||||||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | 227,593 | — | 7,774 | 674 | 234,693 | Residential mortgage-backed securities | 269,752 | 0 | 7,171 | 382 | 276,541 | |||||||||||||||||||||||||||||||||||||
Agency commercial mortgage-backed securities | 12,450 | — | 742 | — | 13,192 | Agency commercial mortgage-backed securities | 12,623 | 0 | 687 | — | 13,310 | |||||||||||||||||||||||||||||||||||||
Other commercial mortgage-backed securities | 88,852 | — | 3,445 | 1,540 | 90,757 | Other commercial mortgage-backed securities | 109,244 | 0 | 4,788 | 940 | 113,092 | |||||||||||||||||||||||||||||||||||||
Other asset-backed securities | 228,199 | — | 3,470 | 2,458 | 229,211 | Other asset-backed securities | 269,742 | 0 | 4,006 | 742 | 273,006 | |||||||||||||||||||||||||||||||||||||
$ | 2,182,473 | $ | 1,408 | $ | 92,112 | $ | 13,229 | $ | 2,259,948 | $ | 2,361,575 | $ | 552 | $ | 99,936 | $ | 3,428 | $ | 2,457,531 |
December 31, 2019 | |||||||||||||||
(In thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||
Fixed maturities, available-for-sale | |||||||||||||||
U.S. Treasury obligations | $ | 109,060 | $ | 1,533 | $ | 126 | $ | 110,467 | |||||||
U.S. Government-sponsored enterprise obligations | 17,215 | 125 | — | 17,340 | |||||||||||
State and municipal bonds | 287,658 | 9,110 | 675 | 296,093 | |||||||||||
Corporate debt | 1,308,889 | 33,050 | 1,575 | 1,340,364 | |||||||||||
Residential mortgage-backed securities | 205,588 | 3,139 | 319 | 208,408 | |||||||||||
Agency commercial mortgage-backed securities | 8,054 | 182 | 15 | 8,221 | |||||||||||
Other commercial mortgage-backed securities | 70,621 | 1,468 | 221 | 71,868 | |||||||||||
Other asset-backed securities | 234,219 | 1,958 | 153 | 236,024 | |||||||||||
$ | 2,241,304 | $ | 50,565 | $ | 3,084 | $ | 2,288,785 |
(In thousands) | Amortized Cost | Due in one year or less | Due after one year through five years | Due after five years through ten years | Due after ten years | Total Fair Value | |||||||||||||||||
Fixed maturities, available-for-sale | |||||||||||||||||||||||
U.S. Treasury obligations | $ | 110,405 | $ | 32,905 | $ | 63,387 | $ | 18,949 | $ | — | $ | 115,241 | |||||||||||
U.S. Government-sponsored enterprise obligations | 8,506 | — | 4,929 | 3,606 | 158 | 8,693 | |||||||||||||||||
State and municipal bonds | 277,091 | 18,435 | 117,564 | 128,996 | 28,723 | 293,718 | |||||||||||||||||
Corporate debt | 1,229,377 | 132,517 | 726,096 | 385,178 | 30,652 | 1,274,443 | |||||||||||||||||
Residential mortgage-backed securities | 227,593 | 234,693 | |||||||||||||||||||||
Agency commercial mortgage-backed securities | 12,450 | 13,192 | |||||||||||||||||||||
Other commercial mortgage-backed securities | 88,852 | 90,757 | |||||||||||||||||||||
Other asset-backed securities | 228,199 | 229,211 | |||||||||||||||||||||
$ | 2,182,473 | $ | 2,259,948 |
(In thousands) | Amortized Cost | Due in one year or less | Due after one year through five years | Due after five years through ten years | Due after ten years | Total Fair Value | |||||||||||||||||||||||||||||
Fixed maturities, available-for-sale | |||||||||||||||||||||||||||||||||||
U.S. Treasury obligations | $ | 101,045 | $ | 23,143 | $ | 70,919 | $ | 8,815 | $ | 0 | $ | 102,877 | |||||||||||||||||||||||
U.S. Government-sponsored enterprise obligations | 11,959 | 3,870 | 5,044 | 2,887 | 143 | 11,944 | |||||||||||||||||||||||||||||
State and municipal bonds | 312,809 | 6,114 | 153,779 | 144,719 | 17,853 | 322,465 | |||||||||||||||||||||||||||||
Corporate debt | 1,395,466 | 140,572 | 755,625 | 481,431 | 51,238 | 1,428,866 | |||||||||||||||||||||||||||||
Residential mortgage-backed securities | 268,344 | 271,548 | |||||||||||||||||||||||||||||||||
Agency commercial mortgage-backed securities | 13,196 | 13,718 | |||||||||||||||||||||||||||||||||
Other commercial mortgage-backed securities | 119,145 | 121,319 | |||||||||||||||||||||||||||||||||
Other asset-backed securities | 287,659 | 290,536 | |||||||||||||||||||||||||||||||||
$ | 2,509,623 | $ | 2,563,273 |
March 31, 2021 | |||||||||||||||||||||||||||||||||||
Total | Less than 12 months | 12 months or longer | |||||||||||||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||||||||||||||||||
(In thousands) | Value | Loss | Value | Loss | Value | Loss | |||||||||||||||||||||||||||||
Fixed maturities, available-for-sale | |||||||||||||||||||||||||||||||||||
U.S. Treasury obligations | $ | 26,250 | $ | 256 | $ | 26,250 | $ | 256 | $ | 0 | $ | 0 | |||||||||||||||||||||||
U.S. Government-sponsored enterprise obligations | 5,714 | 121 | 5,714 | 121 | 0 | 0 | |||||||||||||||||||||||||||||
State and municipal bonds | 67,604 | 1,540 | 67,604 | 1,540 | 0 | 0 | |||||||||||||||||||||||||||||
Corporate debt | 397,470 | 9,172 | 370,642 | 8,704 | 26,828 | 468 | |||||||||||||||||||||||||||||
Residential mortgage-backed securities | 105,643 | 2,523 | 99,580 | 2,253 | 6,063 | 270 | |||||||||||||||||||||||||||||
Agency commercial mortgage-backed securities | 1,276 | 15 | 1,276 | 15 | 0 | 0 | |||||||||||||||||||||||||||||
Other commercial mortgage-backed securities | 41,832 | 1,080 | 35,400 | 437 | 6,432 | 643 | |||||||||||||||||||||||||||||
Other asset-backed securities | 71,365 | 350 | 59,054 | 280 | 12,311 | 70 | |||||||||||||||||||||||||||||
$ | 717,154 | $ | 15,057 | $ | 665,520 | $ | 13,606 | $ | 51,634 | $ | 1,451 | ||||||||||||||||||||||||
June 30, 2020 | |||||||||||||||||||||||
Total | Less than 12 months | 12 months or longer | |||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||||||
(In thousands) | Value | Loss | Value | Loss | Value | Loss | |||||||||||||||||
Fixed maturities, available-for-sale | |||||||||||||||||||||||
U.S. Treasury obligations | $ | 432 | $ | 1 | $ | 432 | $ | 1 | $ | — | $ | — | |||||||||||
State and municipal bonds | 4,516 | 31 | 4,516 | 31 | — | — | |||||||||||||||||
Corporate debt | 179,179 | 8,525 | 156,363 | 7,099 | 22,816 | 1,426 | |||||||||||||||||
Residential mortgage-backed securities | 17,725 | 674 | 17,079 | 666 | 646 | 8 | |||||||||||||||||
Other commercial mortgage-backed securities | 22,083 | 1,540 | 21,523 | 1,529 | 560 | 11 | |||||||||||||||||
Other asset-backed securities | 77,276 | 2,458 | 77,064 | 2,458 | 212 | — | |||||||||||||||||
$ | 301,211 | $ | 13,229 | $ | 276,977 | $ | 11,784 | $ | 24,234 | $ | 1,445 |
December 31, 2019 | |||||||||||||||||||||||
Total | Less than 12 months | 12 months or longer | |||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||||||
(In thousands) | Value | Loss | Value | Loss | Value | Loss | |||||||||||||||||
Fixed maturities, available-for-sale | |||||||||||||||||||||||
U.S. Treasury obligations | $ | 25,959 | $ | 126 | $ | 15,305 | $ | 103 | $ | 10,654 | $ | 23 | |||||||||||
State and municipal bonds | 36,565 | 675 | 35,621 | 674 | 944 | 1 | |||||||||||||||||
Corporate debt | 128,254 | 1,575 | 88,582 | 932 | 39,672 | 643 | |||||||||||||||||
Residential mortgage-backed securities | 59,291 | 319 | 28,048 | 63 | 31,243 | 256 | |||||||||||||||||
Agency commercial mortgage-backed securities | 459 | 15 | 158 | — | 301 | 15 | |||||||||||||||||
Other commercial mortgage-backed securities | 18,339 | 221 | 16,924 | 206 | 1,415 | 15 | |||||||||||||||||
Other asset-backed securities | 48,912 | 153 | 37,322 | 145 | 11,590 | 8 | |||||||||||||||||
$ | 317,779 | $ | 3,084 | $ | 221,960 | $ | 2,123 | $ | 95,819 | $ | 961 |
December 31, 2020 | |||||||||||||||||||||||||||||||||||
Total | Less than 12 months | 12 months or longer | |||||||||||||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||||||||||||||||||
(In thousands) | Value | Loss | Value | Loss | Value | Loss | |||||||||||||||||||||||||||||
Fixed maturities, available-for-sale | |||||||||||||||||||||||||||||||||||
U.S. Treasury obligations | $ | 14,390 | $ | 23 | $ | 14,390 | $ | 23 | $ | 0 | $ | 0 | |||||||||||||||||||||||
State and municipal bonds | 6,416 | 39 | 6,416 | 39 | 0 | 0 | |||||||||||||||||||||||||||||
Corporate debt | 94,695 | 1,302 | 79,436 | 1,020 | 15,259 | 282 | |||||||||||||||||||||||||||||
Residential mortgage-backed securities | 34,928 | 382 | 34,509 | 381 | 419 | 1 | |||||||||||||||||||||||||||||
Other commercial mortgage-backed securities | 18,766 | 940 | 18,480 | 935 | 286 | 5 | |||||||||||||||||||||||||||||
Other asset-backed securities | 43,739 | 742 | 37,850 | 701 | 5,889 | 41 | |||||||||||||||||||||||||||||
$ | 212,934 | $ | 3,428 | $ | 191,081 | $ | 3,099 | $ | 21,853 | $ | 329 | ||||||||||||||||||||||||
Three Months Ended March 31, 2021 | ||||||||||||||||||||||||||
(In thousands) | Corporate Debt | Total | ||||||||||||||||||||||||
Balance at December 31, 2020 | $ | 552 | $ | 552 | ||||||||||||||||||||||
Reductions related to: | ||||||||||||||||||||||||||
Securities sold during the period | (552) | (552) | ||||||||||||||||||||||||
Balance at March 31, 2021 | $ | 0 | $ | 0 |
Three Months Ended June 30, 2020 | ||||||
(In thousands) | Corporate Debt | Total | ||||
Balance April 1, 2020 | $ | 1,163 | $ | 1,163 | ||
Additional credit losses related to securities for which: | ||||||
No allowance for credit losses has been previously recognized | 87 | 87 | ||||
An allowance for credit losses was recorded in a previous period | 258 | 258 | ||||
Reductions related to: | ||||||
Securities sold during the period | (100 | ) | (100 | ) | ||
Balance June 30, 2020 | $ | 1,408 | $ | 1,408 |
Six Months Ended June 30, 2020 | ||||||
(In thousands) | Corporate Debt | Total | ||||
Balance December 31, 2019 | $ | — | $ | — | ||
Additional credit losses related to securities for which: | ||||||
No allowance for credit losses has been previously recognized | 1,508 | 1,508 | ||||
Reductions related to: | ||||||
Securities sold during the period | (100 | ) | (100 | ) | ||
Balance June 30, 2020 | $ | 1,408 | $ | 1,408 |
Three Months Ended March 31, 2020 | ||||||||||||||||||||||||||
(In thousands) | Corporate Debt | Total | ||||||||||||||||||||||||
Balance at December 31, 2019 | $ | 0 | $ | 0 | ||||||||||||||||||||||
Additional credit losses related to securities for which: | ||||||||||||||||||||||||||
No allowance for credit losses has been previously recognized | 1,163 | 1,163 | ||||||||||||||||||||||||
Balance at March 31, 2020 | $ | 1,163 | $ | 1,163 |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Proceeds from sales (exclusive of maturities and paydowns) | $ | 152.8 | $ | 61.8 | $ | 217.7 | $ | 93.3 | |||||||
Purchases | $ | 144.4 | $ | 171.8 | $ | 371.9 | $ | 350.9 |
Three Months Ended March 31 | |||||||||||||||||||||||
(In millions) | 2021 | 2020 | |||||||||||||||||||||
Proceeds from sales (exclusive of maturities and paydowns) | $ | 61.9 | $ | 64.9 | |||||||||||||||||||
Purchases | $ | 342.2 | $ | 227.5 |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||
(In thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Fixed maturities | $ | 17,676 | $ | 18,275 | $ | 35,961 | $ | 35,792 | |||||||
Equities | 985 | 4,990 | 2,892 | 9,813 | |||||||||||
Short-term investments, including Other | 509 | 1,619 | 1,981 | 3,454 | |||||||||||
BOLI | 457 | 459 | 913 | 912 | |||||||||||
Investment fees and expenses | (1,503 | ) | (1,804 | ) | (2,793 | ) | (3,614 | ) | |||||||
Net investment income | $ | 18,124 | $ | 23,539 | $ | 38,954 | $ | 46,357 |
Three Months Ended March 31 | |||||||||||||||||||||||
(In thousands) | 2021 | 2020 | |||||||||||||||||||||
Fixed maturities | $ | 15,692 | $ | 18,285 | |||||||||||||||||||
Equities | 694 | 1,909 | |||||||||||||||||||||
Short-term investments, including Other | 273 | 1,472 | |||||||||||||||||||||
BOLI | 444 | 456 | |||||||||||||||||||||
Investment fees and expenses | (2,086) | (1,292) | |||||||||||||||||||||
Net investment income | $ | 15,017 | $ | 20,830 |
June 30, 2020 | Carrying Value | |||||||||
(In thousands) | Percentage Ownership | June 30, 2020 | December 31, 2019 | |||||||
Qualified affordable housing project tax credit partnerships | See below | $ | 37,061 | $ | 46,421 | |||||
Other tax credit partnerships | See below | — | 2,085 | |||||||
All other investments, primarily investment fund LPs/LLCs | See below | 269,798 | 310,314 | |||||||
$ | 306,859 | $ | 358,820 |
March 31, 2021 | Carrying Value | |||||||||||||||||||
(In thousands) | Percentage Ownership | March 31, 2021 | December 31, 2020 | |||||||||||||||||
Qualified affordable housing project tax credit partnerships | See below | $ | 24,351 | $ | 27,719 | |||||||||||||||
All other investments, primarily investment fund LPs/LLCs | See below | 275,009 | 282,810 | |||||||||||||||||
$ | 299,360 | $ | 310,529 |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||
(In thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Qualified affordable housing project tax credit partnerships | |||||||||||||||
Losses recorded | $ | 5,012 | $ | 5,167 | $ | 9,354 | $ | 9,597 | |||||||
Tax credits recognized | $ | 4,369 | $ | 4,531 | $ | 8,737 | $ | 9,063 | |||||||
Historic tax credit partnership | |||||||||||||||
Losses recorded | $ | 1,762 | $ | 302 | $ | 2,084 | $ | 491 | |||||||
Tax credits recognized | $ | 103 | $ | 103 | $ | 206 | $ | 206 |
Three Months Ended March 31 | |||||||||||||||||||||||
(In thousands) | 2021 | 2020 | |||||||||||||||||||||
Qualified affordable housing project tax credit partnerships | |||||||||||||||||||||||
Losses recorded | $ | 3,368 | $ | 4,342 | |||||||||||||||||||
Tax credits recognized | $ | 3,324 | $ | 4,369 | |||||||||||||||||||
Historic tax credit partnership* | |||||||||||||||||||||||
Losses (gains) recorded | $ | (182) | $ | 323 | |||||||||||||||||||
Tax credits recognized | $ | 50 | $ | 103 | |||||||||||||||||||
* ProAssurance holds a historic tax credit partnership which was fully amortized in 2020. ProAssurance received a distribution associated with this investment during the three months ended March 31, 2021 as a result of positive cash flows from a project recognizing an operating gain. See further discussion on this investment in Note 3 of the Notes to the Consolidated Financial Statements in ProAssurance’s December 31, 2020 report on Form 10-K. |
Three Months Ended March 31, 2021 | |||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Net investment income | $ | 40,636 | |||||||||||||||||||||
Net realized investment gains (losses) | 14,587 | ||||||||||||||||||||||
Net change in unrealized appreciation (depreciation) | 61,777 | ||||||||||||||||||||||
Net gain (loss) | $ | 117,000 | |||||||||||||||||||||
Net gain (loss) attributable to ProAssurance* | $ | 2,056 | |||||||||||||||||||||
*Represents ProAssurance's share of the fund's aggregate income or loss, which is included as a component of equity in earnings (loss) of unconsolidated subsidiaries in its Condensed Consolidated Statement of Income and Comprehensive Income for the three months ended March 31, 2021. |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||
(In thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Total impairment losses: | |||||||||||||||
Corporate debt | $ | (582 | ) | $ | — | $ | (2,399 | ) | $ | (136 | ) | ||||
Portion of impairment losses recognized in other comprehensive income before taxes: | |||||||||||||||
Corporate debt | 237 | — | 891 | 87 | |||||||||||
Net impairment losses recognized in earnings | (345 | ) | — | (1,508 | ) | (49 | ) | ||||||||
Gross realized gains, available-for-sale fixed maturities | 4,518 | 1,006 | 6,945 | 1,374 | |||||||||||
Gross realized (losses), available-for-sale fixed maturities | (467 | ) | (33 | ) | (1,870 | ) | (369 | ) | |||||||
Net realized gains (losses), trading fixed maturities | 49 | 2 | 152 | (25 | ) | ||||||||||
Net realized gains (losses), equity investments | (4,633 | ) | 9,218 | 10,558 | 11,008 | ||||||||||
Net realized gains (losses), other investments | 1,864 | 198 | 1,912 | 577 | |||||||||||
Change in unrealized holding gains (losses), trading fixed maturities | 382 | 265 | 264 | 475 | |||||||||||
Change in unrealized holding gains (losses), equity investments | 14,699 | (2,459 | ) | (23,778 | ) | 29,932 | |||||||||
Change in unrealized holding gains (losses), convertible securities, carried at fair value | 3,913 | 1,110 | (1,360 | ) | 3,006 | ||||||||||
Other | 5 | 1 | (3 | ) | 2 | ||||||||||
Net realized investment gains (losses) | $ | 19,985 | $ | 9,308 | $ | (8,688 | ) | $ | 45,931 |
Three Months Ended March 31 | |||||||||||||||||||||||||||||||||||
(In thousands) | 2021 | 2020 | |||||||||||||||||||||||||||||||||
Total impairment losses: | |||||||||||||||||||||||||||||||||||
Corporate debt | $ | 0 | $ | (1,817) | |||||||||||||||||||||||||||||||
Portion of impairment losses recognized in other comprehensive income before taxes: | |||||||||||||||||||||||||||||||||||
Corporate debt | — | 654 | |||||||||||||||||||||||||||||||||
Net impairment losses recognized in earnings | 0 | (1,163) | |||||||||||||||||||||||||||||||||
Gross realized gains, available-for-sale fixed maturities | 4,294 | 2,427 | |||||||||||||||||||||||||||||||||
Gross realized (losses), available-for-sale fixed maturities | (187) | (1,403) | |||||||||||||||||||||||||||||||||
Net realized gains (losses), trading fixed maturities | 72 | 103 | |||||||||||||||||||||||||||||||||
Net realized gains (losses), equity investments | 4,189 | 15,190 | |||||||||||||||||||||||||||||||||
Net realized gains (losses), other investments | 3,196 | 48 | |||||||||||||||||||||||||||||||||
Change in unrealized holding gains (losses), trading fixed maturities | (214) | (118) | |||||||||||||||||||||||||||||||||
Change in unrealized holding gains (losses), equity investments | (2,937) | (38,477) | |||||||||||||||||||||||||||||||||
Change in unrealized holding gains (losses), convertible securities, carried at fair value | (190) | (5,273) | |||||||||||||||||||||||||||||||||
Other | 626 | (7) | |||||||||||||||||||||||||||||||||
Net realized investment gains (losses) | $ | 8,849 | $ | (28,673) |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||
(In thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Balance beginning of period | $ | 1,534 | $ | 142 | $ | 470 | $ | 93 | |||||||
Additional credit losses recognized during the period, related to securities for which: | |||||||||||||||
No impairment has been previously recognized | — | — | 1,064 | 49 | |||||||||||
Impairment has been previously recognized | 258 | — | 258 | — | |||||||||||
Reductions due to: | |||||||||||||||
Securities sold during the period (realized) | (470 | ) | — | (470 | ) | — | |||||||||
Balance June 30 | $ | 1,322 | $ | 142 | $ | 1,322 | $ | 142 |
Three Months Ended March 31 | |||||||||||||||||||||||
(In thousands) | 2021 | 2020 | |||||||||||||||||||||
Balance beginning of period | $ | 552 | $ | 470 | |||||||||||||||||||
Additional credit losses recognized during the period, related to securities for which: | |||||||||||||||||||||||
No impairment has been previously recognized | 0 | 1,064 | |||||||||||||||||||||
Reductions due to: | |||||||||||||||||||||||
Securities sold during the period (realized) | (552) | 0 | |||||||||||||||||||||
Balance March 31 | $ | 0 | $ | 1,534 |
Reporting Unit | |||||||||||||||||||||||
(In thousands) | Specialty P&C | Workers' Compensation Insurance | Segregated Portfolio Cell Reinsurance | Total | |||||||||||||||||||
Goodwill, gross as of January 1, 2020 | $ | 161,115 | $ | 44,110 | $ | 5,500 | $ | 210,725 | |||||||||||||||
Accumulated impairment losses* | (161,115) | 0 | 0 | (161,115) | |||||||||||||||||||
Goodwill, net as of December 31, 2020 | 0 | 44,110 | 5,500 | 49,610 | |||||||||||||||||||
Accumulated impairment losses | 0 | 0 | 0 | 0 | |||||||||||||||||||
Goodwill, net as of March 31, 2021 | $ | 0 | $ | 44,110 | $ | 5,500 | $ | 49,610 |
(In thousands) | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | Year Ended December 31, 2019 | ||||||||
Balance, beginning of year | $ | 2,346,526 | $ | 2,119,847 | $ | 2,119,847 | |||||
Less reinsurance recoverables on unpaid losses and loss adjustment expenses | 390,708 | 343,820 | 343,820 | ||||||||
Net balance, beginning of year | 1,955,818 | 1,776,027 | 1,776,027 | ||||||||
Net losses: | |||||||||||
Current year(1)(2) | 398,923 | 354,466 | 765,698 | ||||||||
Favorable development of reserves established in prior years, net | (23,092 | ) | (26,271 | ) | (11,783 | ) | |||||
Total | 375,831 | 328,195 | 753,915 | ||||||||
Paid related to: | |||||||||||
Current year | (32,283 | ) | (39,396 | ) | (115,133 | ) | |||||
Prior years | (296,461 | ) | (221,378 | ) | (458,991 | ) | |||||
Total paid | (328,744 | ) | (260,774 | ) | (574,124 | ) | |||||
Net balance, end of period | 2,002,905 | 1,843,448 | 1,955,818 | ||||||||
Plus reinsurance recoverables on unpaid losses and loss adjustment expenses | 386,276 | 352,012 | 390,708 | ||||||||
Balance, end of period | $ | 2,389,181 | $ | 2,195,460 | $ | 2,346,526 |
(In thousands) | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | Year Ended December 31, 2020 | ||||||||||||||||||||
Balance, beginning of year | $ | 2,417,179 | $ | 2,346,526 | $ | 2,346,526 | |||||||||||||||||
Less reinsurance recoverables on unpaid losses and loss adjustment expenses | 385,087 | 390,708 | 390,708 | ||||||||||||||||||||
Net balance, beginning of year | 2,032,092 | 1,955,818 | 1,955,818 | ||||||||||||||||||||
Net losses: | |||||||||||||||||||||||
Current year(1)(2)(3) | 154,634 | 170,874 | 711,846 | ||||||||||||||||||||
Favorable development of reserves established in prior years, net | (4,849) | (6,042) | (50,399) | ||||||||||||||||||||
Total | 149,785 | 164,832 | 661,447 | ||||||||||||||||||||
Paid related to: | |||||||||||||||||||||||
Current year | (10,513) | (15,876) | (83,204) | ||||||||||||||||||||
Prior years | (126,534) | (163,518) | (501,969) | ||||||||||||||||||||
Total paid | (137,047) | (179,394) | (585,173) | ||||||||||||||||||||
Net balance, end of period | 2,044,830 | 1,941,256 | 2,032,092 | ||||||||||||||||||||
Plus reinsurance recoverables on unpaid losses and loss adjustment expenses | 393,420 | 389,792 | 385,087 | ||||||||||||||||||||
Balance, end of period | $ | 2,438,250 | $ | 2,331,048 | $ | 2,417,179 |
(In thousands) | Location in the Condensed Consolidated Statements of Income and Comprehensive Income | Three Months Ended June 30 | Six Months Ended June 30 | (In thousands) | Location in the Condensed Consolidated Statements of Income and Comprehensive Income | Three Months Ended March 31 | ||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2021 | 2020 | |||||||||||||||||||||||||||||
Operating lease expense (1) | Operating expense | $ | 891 | $ | 1,141 | $ | 2,516 | $ | 1,915 | Operating lease expense (1) | Operating expense | $ | 938 | $ | 1,625 | |||||||||||||||||||
Sublease income (2) | Other income | (38 | ) | (38 | ) | (76 | ) | (76 | ) | Sublease income (2) | Other income | (54) | (38) | |||||||||||||||||||||
Net lease expense | $ | 853 | $ | 1,103 | $ | 2,440 | $ | 1,839 | Net lease expense | $ | 884 | $ | 1,587 |
($ in thousands) | June 30, 2020 | December 31, 2019 | ($ in thousands) | March 31, 2021 | December 31, 2020 | ||||||||||||
Operating lease ROU assets | $ | 19,198 | $ | 21,074 | Operating lease ROU assets | $ | 18,219 | $ | 19,013 | ||||||||
Operating lease liabilities | $ | 20,645 | $ | 22,051 | Operating lease liabilities | $ | 19,168 | $ | 20,116 | ||||||||
Weighted-average remaining lease term | 8.54 years | 8.74 years | Weighted-average remaining lease term | 8.26 years | 8.31 years | ||||||||||||
Weighted-average discount rate | 3.08 | % | 3.08 | % | Weighted-average discount rate | 2.98 | % | 2.97 | % |
Three Months Ended March 31 | |||||||||||||||||
(In thousands) | 2021 | 2020 | |||||||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||||||||
Operating cash flows from operating leases | $ | 1,089 | $ | 1,017 | |||||||||||||
Six Months Ended June 30 | ||||||
(In thousands) | 2020 | 2019 | ||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||
Operating cash flows from operating leases | $ | 471 | $ | 757 |
(In thousands) | |||
2020 | $ | 2,142 | |
2021 | 3,994 | ||
2022 | 3,107 | ||
2023 | 2,404 | ||
2024 | 1,816 | ||
Thereafter | 10,055 | ||
Total future minimum lease payments | 23,518 | ||
Less: Imputed interest | 2,873 | ||
Total operating lease liabilities | $ | 20,645 |
(In thousands) | |||||
2021 | $ | 3,057 | |||
2022 | 3,306 | ||||
2023 | 2,608 | ||||
2024 | 2,026 | ||||
2025 | 1,783 | ||||
Thereafter | 8,875 | ||||
Total future minimum lease payments | 21,655 | ||||
Less: Imputed interest | 2,487 | ||||
Total operating lease liabilities | $ | 19,168 |
(In thousands) | June 30, 2020 | December 31, 2019 | |||||
Senior Notes due 2023, unsecured, interest at 5.3% annually | $ | 250,000 | $ | 250,000 | |||
Mortgage Loans, outstanding borrowings are secured by first priority liens on two office buildings, and bear an interest rate of three-month LIBOR plus 1.325% (1.70% and 3.21%, respectively) determined on a quarterly basis. | 36,864 | 37,617 | |||||
Total principal | 286,864 | 287,617 | |||||
Less unamortized debt issuance costs | 1,596 | 1,796 | |||||
Debt less unamortized debt issuance costs | $ | 285,268 | $ | 285,821 |
($ in thousands) | March 31, 2021 | December 31, 2020 | |||||||||
Senior Notes due 2023, unsecured, interest at 5.3% annually | $ | 250,000 | $ | 250,000 | |||||||
Mortgage Loans, outstanding borrowings are secured by first priority liens on two office buildings, and bear an interest rate of three-month LIBOR plus 1.325% (1.51% and 1.58%, respectively) determined on a quarterly basis | 35,723 | 36,113 | |||||||||
Total principal | 285,723 | 286,113 | |||||||||
Less unamortized debt issuance costs | 1,301 | 1,400 | |||||||||
Debt less unamortized debt issuance costs | $ | 284,422 | $ | 284,713 |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||
(In thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Share-based compensation expense | $ | 1,021 | $ | 1,092 | $ | 2,032 | $ | 2,320 | |||||||
Related tax benefits | $ | 215 | $ | 229 | $ | 427 | $ | 487 |
(In thousands) | Unrealized Investment Gains (Losses) | Non-credit Impairments | Unrecognized Change in Defined Benefit Plan Liabilities* | Accumulated Other Comprehensive Income (Loss) | (In thousands) | Unrealized Investment Gains (Losses) | Non-credit Impairments | Unrecognized Change in Defined Benefit Plan Liabilities* | Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||||||||||||
Balance April 1, 2020 | $ | (4,015 | ) | $ | (817 | ) | $ | (78 | ) | $ | (4,910 | ) | ||||||||||||||||||||||||||
Balance December 31, 2020 | Balance December 31, 2020 | $ | 75,388 | $ | (57) | $ | (104) | $ | 75,227 | |||||||||||||||||||||||||||||
OCI, before reclassifications, net of tax | 69,159 | (187 | ) | — | 68,972 | OCI, before reclassifications, net of tax | (30,415) | 0 | 0 | (30,415) | ||||||||||||||||||||||||||||
Amounts reclassified from AOCI, net of tax | (3,232 | ) | 300 | — | (2,932 | ) | Amounts reclassified from AOCI, net of tax | (3,347) | 57 | 0 | (3,290) | |||||||||||||||||||||||||||
Net OCI, current period | 65,927 | 113 | — | 66,040 | Net OCI, current period | (33,762) | 57 | 0 | (33,705) | |||||||||||||||||||||||||||||
Balance at June 30, 2020 | $ | 61,912 | $ | (704 | ) | $ | (78 | ) | $ | 61,130 | ||||||||||||||||||||||||||||
Balance March 31, 2021 | Balance March 31, 2021 | $ | 41,626 | $ | 0 | $ | (104) | $ | 41,522 |
(In thousands) | Unrealized Investment Gains (Losses) | Non-credit Impairments | Unrecognized Change in Defined Benefit Plan Liabilities* | Accumulated Other Comprehensive Income (Loss) | |||||||||||
Balance December 31, 2019 | $ | 37,333 | $ | (300 | ) | $ | (78 | ) | $ | 36,955 | |||||
OCI, before reclassifications, net of tax | 27,695 | (704 | ) | — | 26,991 | ||||||||||
Amounts reclassified from AOCI, net of tax | (3,116 | ) | 300 | — | (2,816 | ) | |||||||||
Net OCI, current period | 24,579 | (404 | ) | — | 24,175 | ||||||||||
Balance at June 30, 2020 | $ | 61,912 | $ | (704 | ) | $ | (78 | ) | $ | 61,130 |
(In thousands) | Unrealized Investment Gains (Losses) | Non-credit Impairments | Unrecognized Change in Defined Benefit Plan Liabilities* | Accumulated Other Comprehensive Income (Loss) | |||||||||||
Balance April 1, 2019 | $ | 8,909 | $ | (190 | ) | $ | (64 | ) | $ | 8,655 | |||||
OCI, before reclassifications, net of tax | 23,848 | — | (5 | ) | 23,843 | ||||||||||
Amounts reclassified from AOCI, net of tax | (769 | ) | — | — | (769 | ) | |||||||||
Net OCI, current period | 23,079 | — | (5 | ) | 23,074 | ||||||||||
Balance June 30, 2019 | $ | 31,988 | $ | (190 | ) | $ | (69 | ) | $ | 31,729 |
(In thousands) | Unrealized Investment Gains (Losses) | Non-credit Impairments | Unrecognized Change in Defined Benefit Plan Liabilities* | Accumulated Other Comprehensive Income (Loss) | |||||||||||
Balance December 31, 2018 | $ | (16,733 | ) | $ | (121 | ) | $ | (57 | ) | $ | (16,911 | ) | |||
OCI, before reclassifications, net of tax | 49,477 | (69 | ) | (12 | ) | 49,396 | |||||||||
Amounts reclassified from AOCI, net of tax | (756 | ) | — | — | (756 | ) | |||||||||
Net OCI, current period | 48,721 | (69 | ) | (12 | ) | 48,640 | |||||||||
Balance June 30, 2019 | $ | 31,988 | $ | (190 | ) | $ | (69 | ) | $ | 31,729 | |||||
* Represents the reestimation of the defined benefit plan liability assumed in the Eastern acquisition. The defined benefit plan is frozen as to the earnings of additional benefits and the benefit plan liability is reestimated annually. |
(In thousands) | Unrealized Investment Gains (Losses) | Non-credit Impairments | Unrecognized Change in Defined Benefit Plan Liabilities* | Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||
Balance December 31, 2019 | $ | 36,577 | $ | 300 | $ | 78 | $ | 36,955 | |||||||||||||||
OCI, before reclassifications, net of tax | (42,497) | 517 | 0 | (41,980) | |||||||||||||||||||
Amounts reclassified from AOCI, net of tax | 115 | 0 | 0 | 115 | |||||||||||||||||||
Net OCI, current period | (42,382) | 517 | 0 | (41,865) | |||||||||||||||||||
Balance March 31, 2020 | $ | (5,805) | $ | 817 | $ | 78 | $ | (4,910) | |||||||||||||||
* Represents the re-estimation of the defined benefit plan liability assumed in the Eastern acquisition. The defined benefit plan is frozen as to the earnings of additional benefits and the benefit plan liability is re-estimated annually. |
(In thousands, except per share data) | Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Weighted average number of common shares outstanding, basic | 53,864 | 53,750 | 53,836 | 53,716 | |||||||||||
Dilutive effect of securities: | |||||||||||||||
Restricted Share Units | 22 | 53 | 48 | 67 | |||||||||||
Performance Share Units | — | 10 | 2 | 20 | |||||||||||
Purchase Match Units | — | 15 | — | 15 | |||||||||||
Weighted average number of common shares outstanding, diluted | 53,886 | 53,828 | 53,886 | 53,818 | |||||||||||
Effect of dilutive shares on earnings (loss) per share | $ | — | $ | — | $ | — | $ | — |
(In thousands, except per share data) | Three Months Ended March 31 | ||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
Weighted average number of common shares outstanding, basic | 53,918 | 53,808 | |||||||||||||||||||||
Dilutive effect of securities: | |||||||||||||||||||||||
Restricted Share Units | 76 | 74 | |||||||||||||||||||||
Performance Share Units | 4 | 3 | |||||||||||||||||||||
Weighted average number of common shares outstanding, diluted | 53,998 | 53,885 | |||||||||||||||||||||
Effect of dilutive shares on earnings (loss) per share | $ | 0 | $ | 0 | |||||||||||||||||||
Three Months Ended June 30, 2020 | Three Months Ended March 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | Specialty P&C | Workers' Compensation Insurance | Segregated Portfolio Cell Reinsurance | Lloyd's Syndicates | Corporate | Inter-segment Eliminations | Consolidated | (In thousands) | Specialty P&C | Workers' Compensation Insurance | Segregated Portfolio Cell Reinsurance | Lloyd's Syndicates | Corporate | Inter-segment Eliminations | Consolidated | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net premiums earned | $ | 127,096 | $ | 42,406 | $ | 16,748 | $ | 21,043 | $ | — | $ | — | $ | 207,293 | Net premiums earned | $ | 115,613 | $ | 40,011 | $ | 15,884 | $ | 15,850 | $ | 0 | $ | 0 | $ | 187,358 | |||||||||||||||||||||||||||||||||||||||
Net investment income | — | — | 305 | 1,126 | 16,693 | — | 18,124 | Net investment income | 0 | 0 | 221 | 729 | 14,067 | 0 | 15,017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity in earnings (loss) of unconsolidated subsidiaries | — | — | — | — | (25,355 | ) | — | (25,355 | ) | Equity in earnings (loss) of unconsolidated subsidiaries | 0 | 0 | 0 | 0 | 6,788 | 0 | 6,788 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized gains (losses) | — | — | 2,606 | 529 | 16,850 | — | 19,985 | Net realized gains (losses) | 0 | 0 | 987 | (115) | 7,977 | 0 | 8,849 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Other income (expense)(1) | 1,092 | 519 | 55 | 40 | 404 | (415 | ) | 1,695 | Other income (expense)(1) | 469 | 392 | 1 | 221 | 1,894 | (972) | 2,005 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net losses and loss adjustment expenses | (159,559 | ) | (28,425 | ) | (7,680 | ) | (15,335 | ) | — | — | (210,999 | ) | Net losses and loss adjustment expenses | (101,186) | (26,207) | (9,425) | (12,967) | 0 | 0 | (149,785) | ||||||||||||||||||||||||||||||||||||||||||||||||
Underwriting, policy acquisition and operating expenses(1) | (25,234 | ) | (13,456 | ) | (5,360 | ) | (7,293 | ) | (7,764 | ) | 415 | (58,692 | ) | Underwriting, policy acquisition and operating expenses(1) | (26,346) | (12,286) | (5,025) | (6,591) | (7,175) | 972 | (56,451) | |||||||||||||||||||||||||||||||||||||||||||||||
SPC U.S. federal income tax expense(2) | — | — | (480 | ) | — | — | — | (480 | ) | SPC U.S. federal income tax expense(2) | 0 | 0 | (356) | 0 | 0 | 0 | (356) | |||||||||||||||||||||||||||||||||||||||||||||||||||
SPC dividend (expense) income | — | — | (4,642 | ) | — | — | — | (4,642 | ) | SPC dividend (expense) income | 0 | 0 | (1,742) | 0 | 0 | 0 | (1,742) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense | — | — | — | — | (3,714 | ) | — | (3,714 | ) | Interest expense | 0 | 0 | 0 | 0 | (3,212) | 0 | (3,212) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Income tax benefit (expense) | — | — | — | — | 38,686 | — | 38,686 | Income tax benefit (expense) | 0 | 0 | 0 | 0 | (736) | 0 | (736) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment operating results | $ | (56,605 | ) | $ | 1,044 | $ | 1,552 | $ | 110 | $ | 35,800 | $ | — | $ | (18,099 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment results | Segment results | $ | (11,450) | $ | 1,910 | $ | 545 | $ | (2,873) | $ | 19,603 | $ | 0 | 7,735 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | Net income (loss) | $ | 7,735 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant non-cash items: | Significant non-cash items: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization, net of accretion | $ | 1,680 | $ | 922 | $ | 91 | $ | 14 | $ | 2,378 | $ | — | $ | 5,085 | Depreciation and amortization, net of accretion | $ | 2,171 | $ | 903 | $ | 316 | $ | 15 | $ | 3,317 | $ | 0 | $ | 6,722 |
Six Months Ended June 30, 2020 | |||||||||||||||||||||||||||
(In thousands) | Specialty P&C | Workers' Compensation Insurance | Segregated Portfolio Cell Reinsurance | Lloyd's Syndicates | Corporate | Inter-segment Eliminations | Consolidated | ||||||||||||||||||||
Net premiums earned | $ | 247,456 | $ | 86,921 | $ | 33,728 | $ | 43,044 | $ | — | $ | — | $ | 411,149 | |||||||||||||
Net investment income | — | — | 559 | 2,285 | 36,110 | — | 38,954 | ||||||||||||||||||||
Equity in earnings (loss) of unconsolidated subsidiaries | — | — | — | — | (26,917 | ) | — | (26,917 | ) | ||||||||||||||||||
Net realized gains (losses) | — | — | (601 | ) | 611 | (8,698 | ) | — | (8,688 | ) | |||||||||||||||||
Other income (expense)(1) | 2,788 | 1,276 | 191 | (192 | ) | 1,038 | (1,156 | ) | 3,945 | ||||||||||||||||||
Net losses and loss adjustment expenses | (270,491 | ) | (58,192 | ) | (17,032 | ) | (30,116 | ) | — | — | (375,831 | ) | |||||||||||||||
Underwriting, policy acquisition and operating expenses(1) | (54,818 | ) | (27,622 | ) | (10,439 | ) | (16,434 | ) | (12,589 | ) | 1,156 | (120,746 | ) | ||||||||||||||
SPC U.S. federal income tax expense(2) | — | — | (702 | ) | — | — | — | (702 | ) | ||||||||||||||||||
SPC dividend (expense) income | — | — | (4,134 | ) | — | — | — | (4,134 | ) | ||||||||||||||||||
Interest expense | — | — | — | — | (7,844 | ) | — | (7,844 | ) | ||||||||||||||||||
Income tax benefit (expense) | — | — | — | 29 | 50,732 | — | 50,761 | ||||||||||||||||||||
Segment operating results | $ | (75,065 | ) | $ | 2,383 | $ | 1,570 | $ | (773 | ) | $ | 31,832 | $ | — | $ | (40,053 | ) | ||||||||||
Significant non-cash items: | |||||||||||||||||||||||||||
Depreciation and amortization, net of accretion | $ | 3,260 | $ | 1,848 | $ | 160 | $ | 23 | $ | 4,533 | $ | — | $ | 9,824 |
Three Months Ended March 31, 2020 | |||||||||||||||||||||||||||||||||||||||||
(In thousands) | Specialty P&C | Workers' Compensation Insurance | Segregated Portfolio Cell Reinsurance | Lloyd's Syndicates | Corporate | Inter-segment Eliminations | Consolidated | ||||||||||||||||||||||||||||||||||
Net premiums earned | $ | 120,359 | $ | 44,515 | $ | 16,980 | $ | 22,001 | $ | 0 | $ | 0 | $ | 203,855 | |||||||||||||||||||||||||||
Net investment income | 0 | 0 | 254 | 1,159 | 19,417 | 0 | 20,830 | ||||||||||||||||||||||||||||||||||
Equity in earnings (loss) of unconsolidated subsidiaries | 0 | 0 | 0 | 0 | (1,562) | 0 | (1,562) | ||||||||||||||||||||||||||||||||||
Net realized gains (losses) | 0 | 0 | (3,207) | 81 | (25,547) | 0 | (28,673) | ||||||||||||||||||||||||||||||||||
Other income (expense)(1) | 1,698 | 757 | 136 | (232) | 633 | (741) | 2,251 | ||||||||||||||||||||||||||||||||||
Net losses and loss adjustment expenses | (110,931) | (29,769) | (9,352) | (14,780) | 0 | 0 | (164,832) | ||||||||||||||||||||||||||||||||||
Underwriting, policy acquisition and operating expenses(1) | (29,585) | (14,164) | (5,079) | (9,142) | (4,827) | 741 | (62,056) | ||||||||||||||||||||||||||||||||||
SPC U.S. federal income tax expense(2) | 0 | 0 | (222) | 0 | 0 | 0 | (222) | ||||||||||||||||||||||||||||||||||
SPC dividend (expense) income | 0 | 0 | 508 | 0 | 0 | 0 | 508 | ||||||||||||||||||||||||||||||||||
Interest expense | 0 | 0 | 0 | 0 | (4,129) | 0 | (4,129) | ||||||||||||||||||||||||||||||||||
Income tax benefit (expense) | 0 | 0 | 0 | 29 | 12,047 | 0 | 12,076 | ||||||||||||||||||||||||||||||||||
Segment results | $ | (18,459) | $ | 1,339 | $ | 18 | $ | (884) | $ | (3,968) | $ | 0 | (21,954) | ||||||||||||||||||||||||||||
Net income (loss) | $ | (21,954) | |||||||||||||||||||||||||||||||||||||||
Significant non-cash items: | |||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization, net of accretion | $ | 1,580 | $ | 926 | $ | 69 | $ | 9 | $ | 2,150 | $ | 0 | $ | 4,734 | |||||||||||||||||||||||||||
(1) Certain fees for services provided to the SPCs at Inova Re and Eastern Re are recorded as expenses within the Segregated Portfolio Cell Reinsurance segment and as other income within the Workers' Compensation Insurance segment. These fees are primarily SPC rental fees and are eliminated between segments in consolidation. | |||||||||||||||||||||||||||||||||||||||||
(2) Represents the provision for U.S. federal income taxes for SPCs at Inova Re, which have elected to be taxed as a U.S. corporation under Section 953(d) of the Internal Revenue Code. U.S. federal income taxes are included in the total SPC net results and are paid by the individual SPCs. | |||||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, 2019 | |||||||||||||||||||||||||||
(In thousands) | Specialty P&C | Workers' Compensation Insurance | Segregated Portfolio Cell Reinsurance | Lloyd's Syndicates | Corporate | Inter-segment Eliminations | Consolidated | ||||||||||||||||||||
Net premiums earned | $ | 126,011 | $ | 46,574 | $ | 19,284 | $ | 17,280 | $ | — | $ | — | $ | 209,149 | |||||||||||||
Net investment income | — | — | 368 | 1,199 | 21,972 | — | 23,539 | ||||||||||||||||||||
Equity in earnings (loss) of unconsolidated subsidiaries | — | — | — | — | (5,152 | ) | — | (5,152 | ) | ||||||||||||||||||
Net realized gains (losses) | — | — | (94 | ) | 262 | 9,140 | — | 9,308 | |||||||||||||||||||
Other income (expense)(1) | 1,470 | 725 | 135 | 32 | 833 | (418 | ) | 2,777 | |||||||||||||||||||
Net losses and loss adjustment expenses | (106,017 | ) | (30,625 | ) | (19,973 | ) | (11,825 | ) | — | — | (168,440 | ) | |||||||||||||||
Underwriting, policy acquisition and operating expenses(1) | (29,863 | ) | (14,368 | ) | (5,905 | ) | (7,564 | ) | (5,426 | ) | 418 | (62,708 | ) | ||||||||||||||
SPC U.S. federal income tax expense(2) | — | — | — | — | — | — | — | ||||||||||||||||||||
SPC dividend (expense) income | — | — | 7,033 | — | — | — | 7,033 | ||||||||||||||||||||
Interest expense | — | — | — | — | (4,247 | ) | — | (4,247 | ) | ||||||||||||||||||
Income tax benefit (expense) | — | — | — | 304 | (27 | ) | — | 277 | |||||||||||||||||||
Segment operating results | $ | (8,399 | ) | $ | 2,306 | $ | 848 | $ | (312 | ) | $ | 17,093 | $ | — | $ | 11,536 | |||||||||||
Significant non-cash items: | |||||||||||||||||||||||||||
Depreciation and amortization, net of accretion | $ | 1,623 | $ | 959 | $ | (32 | ) | $ | (4 | ) | $ | 2,071 | $ | — | $ | 4,617 |
Six Months Ended June 30, 2019 | |||||||||||||||||||||||||||
(In thousands) | Specialty P&C | Workers' Compensation Insurance | Segregated Portfolio Cell Reinsurance | Lloyd's Syndicates | Corporate | Inter-segment Eliminations | Consolidated | ||||||||||||||||||||
Net premiums earned | $ | 250,079 | $ | 92,512 | $ | 38,787 | $ | 35,920 | $ | — | $ | — | $ | 417,298 | |||||||||||||
Net investment income | — | — | 815 | 2,205 | 43,337 | — | 46,357 | ||||||||||||||||||||
Equity in earnings (loss) of unconsolidated subsidiaries | — | — | — | — | (5,962 | ) | — | (5,962 | ) | ||||||||||||||||||
Net realized gains (losses) | — | — | 2,047 | 440 | 43,444 | — | 45,931 | ||||||||||||||||||||
Other income (expense)(1) | 2,680 | 1,454 | 221 | (114 | ) | 1,738 | (1,107 | ) | 4,872 | ||||||||||||||||||
Net losses and loss adjustment expenses | (213,675 | ) | (61,068 | ) | (30,719 | ) | (22,733 | ) | — | — | (328,195 | ) | |||||||||||||||
Underwriting, policy acquisition and operating expenses(1) | (59,480 | ) | (28,559 | ) | (11,138 | ) | (16,033 | ) | (9,997 | ) | 1,107 | (124,100 | ) | ||||||||||||||
SPC U.S. federal income tax expense(2) | — | — | — | — | — | — | — | ||||||||||||||||||||
SPC dividend (expense) income | — | — | 2,246 | — | — | — | 2,246 | ||||||||||||||||||||
Interest expense | — | — | — | — | (8,576 | ) | — | (8,576 | ) | ||||||||||||||||||
Income tax benefit (expense) | — | — | — | — | (6,685 | ) | — | (6,685 | ) | ||||||||||||||||||
Segment operating results | $ | (20,396 | ) | $ | 4,339 | $ | 2,259 | $ | (315 | ) | $ | 57,299 | $ | — | $ | 43,186 | |||||||||||
Significant non-cash items: | |||||||||||||||||||||||||||
Depreciation and amortization, net of accretion | $ | 3,359 | $ | 1,936 | $ | 14 | $ | (7 | ) | $ | 4,351 | $ | — | $ | 9,653 | ||||||||||||
(1) Certain fees for services provided to the SPCs at Inova Re and Eastern Re are recorded as expenses within the Segregated Portfolio Cell Reinsurance segment and as other income within the Workers' Compensation Insurance segment. These fees are primarily SPC rental fees and are eliminated between segments in consolidation. | |||||||||||||||||||||||||||
(2) Represents the provision for U.S. federal income taxes for SPCs at Inova Re, which have elected to be taxed as a U.S. corporation under Section 953(d) of the Internal Revenue Code. U.S. federal income taxes are included in the total SPC net operating results and are paid by the individual SPCs. |
Three Months Ended June 30 | Six Months Ended June 30 | Three Months Ended March 31 | ||||||||||||||||||||||||||||||||||||
(In thousands) | 2020 | 2019 | 2020 | 2019 | (In thousands) | 2021 | 2020 | |||||||||||||||||||||||||||||||
Specialty P&C Segment | Specialty P&C Segment | |||||||||||||||||||||||||||||||||||||
Gross premiums earned: | Gross premiums earned: | |||||||||||||||||||||||||||||||||||||
HCPL | $ | 111,836 | $ | 108,297 | $ | 215,304 | $ | 215,761 | HCPL | $ | 97,045 | $ | 103,467 | |||||||||||||||||||||||||
Small Business Unit | 24,915 | 27,307 | 51,565 | 54,425 | Small Business Unit | 25,925 | 26,650 | |||||||||||||||||||||||||||||||
Medical Technology Liability | 8,641 | 8,356 | 17,169 | 16,658 | Medical Technology Liability | 8,938 | 8,529 | |||||||||||||||||||||||||||||||
Other | 155 | 1,209 | 532 | 1,342 | Other | 152 | 377 | |||||||||||||||||||||||||||||||
Ceded premiums earned | (18,451 | ) | (19,158 | ) | (37,114 | ) | (38,107 | ) | Ceded premiums earned | (16,447) | (18,664) | |||||||||||||||||||||||||||
Segment net premiums earned | 127,096 | 126,011 | 247,456 | 250,079 | Segment net premiums earned | 115,613 | 120,359 | |||||||||||||||||||||||||||||||
Workers' Compensation Insurance Segment | Workers' Compensation Insurance Segment | |||||||||||||||||||||||||||||||||||||
Gross premiums earned: | Gross premiums earned: | |||||||||||||||||||||||||||||||||||||
Traditional business | 45,524 | 50,036 | 93,008 | 99,321 | Traditional business | 41,743 | 47,485 | |||||||||||||||||||||||||||||||
Alternative market business | 17,906 | 20,846 | 36,034 | 41,837 | Alternative market business | 16,889 | 18,128 | |||||||||||||||||||||||||||||||
Ceded premiums earned | (21,024 | ) | (24,308 | ) | (42,121 | ) | (48,646 | ) | Ceded premiums earned | (18,621) | (21,098) | |||||||||||||||||||||||||||
Segment net premiums earned | 42,406 | 46,574 | 86,921 | 92,512 | Segment net premiums earned | 40,011 | 44,515 | |||||||||||||||||||||||||||||||
Segregated Portfolio Cell Reinsurance Segment | Segregated Portfolio Cell Reinsurance Segment | |||||||||||||||||||||||||||||||||||||
Gross premiums earned: | Gross premiums earned: | |||||||||||||||||||||||||||||||||||||
Workers' compensation(1) | 17,189 | 20,229 | 34,702 | 40,726 | Workers' compensation(1) | 16,115 | 17,513 | |||||||||||||||||||||||||||||||
HCPL(2) | 1,723 | 1,349 | 3,400 | 2,672 | HCPL(2) | 1,852 | 1,677 | |||||||||||||||||||||||||||||||
Other | — | 120 | — | 240 | ||||||||||||||||||||||||||||||||||
Ceded premiums earned | (2,164 | ) | (2,414 | ) | (4,374 | ) | (4,851 | ) | Ceded premiums earned | (2,083) | (2,210) | |||||||||||||||||||||||||||
Segment net premiums earned | 16,748 | 19,284 | 33,728 | 38,787 | Segment net premiums earned | 15,884 | 16,980 | |||||||||||||||||||||||||||||||
Lloyd's Syndicates Segment | Lloyd's Syndicates Segment | |||||||||||||||||||||||||||||||||||||
Gross premiums earned: | Gross premiums earned: | |||||||||||||||||||||||||||||||||||||
Property and casualty | 26,336 | 21,997 | 54,532 | 45,825 | 20,385 | 28,196 | ||||||||||||||||||||||||||||||||
Ceded premiums earned | (5,293 | ) | (4,717 | ) | (11,488 | ) | (9,905 | ) | Ceded premiums earned | (4,535) | (6,195) | |||||||||||||||||||||||||||
Segment net premiums earned | 21,043 | 17,280 | 43,044 | 35,920 | Segment net premiums earned | 15,850 | 22,001 | |||||||||||||||||||||||||||||||
Consolidated net premiums earned | $ | 207,293 | $ | 209,149 | $ | 411,149 | $ | 417,298 | Consolidated net premiums earned | $ | 187,358 | $ | 203,855 |
•Specialty P&C - This segment includes our professional liability business and medical technology liability business. Our professional liability insurance is primarily comprised of medical professional liability products offered to healthcare providers and institutions. We also offer, to a lesser extent, professional liability insurance to attorneys and their firms. Medical technology liability insurance is offered to medical technology and life sciences companies that manufacture or distribute products including entities conducting human clinical trials. We also offer custom alternative risk solutions including loss portfolio transfers, assumed reinsurance and captive cell programs for healthcare professional liability insureds. For our alternative market captive cell programs, we cede either all or a portion of the premium to certain SPCs in our Segregated Portfolio Cell Reinsurance segment. •Workers' Compensation Insurance - This segment includes our workers' compensation insurance business which is provided primarily to employers with 1,000 or fewer employees. Our workers' compensation products include guaranteed cost policies, policyholder dividend policies, retrospectively-rated policies, deductible policies and alternative market solutions. Alternative market program premiums are 100% ceded to either SPCs in our Segregated Portfolio Cell Reinsurance segment or, to a limited extent, an unaffiliated captive insurer. •Segregated Portfolio Cell Reinsurance - This segment includes the results (underwriting profit or loss, plus investment results, net of U.S. federal income taxes) of SPCs at Inova Re and Eastern Re, our Cayman Islands SPC operations. Each SPC is owned, fully or in part, by an agency, group or association, and the results of the SPCs are attributable to the participants of that cell. We participate to a varying degree in the results of selected SPCs and, for the SPCs in which we participate, our participation interest ranges from a low of 20% to a high of 85%. SPC results attributable to external cell participants are reflected as an SPC dividend expense (income) in our Segregated Portfolio Cell Reinsurance segment. The SPCs assume workers' compensation insurance, healthcare professional liability insurance or a combination of the two from our Workers' Compensation Insurance and Specialty P&C segments. •Lloyd's Syndicates - This segment includes the results from our participation in Lloyd's of London Syndicate 1729 and Syndicate 6131. The results of this segment are normally reported on a quarter lag, except when information is available that is material to the current period. Syndicate 1729 underwrites risks over a wide range of property and casualty insurance and reinsurance lines in both the U.S. and international markets while Syndicate 6131 focuses on contingency and specialty property business, also within the U.S. and international markets. To support and grow our core insurance operations, we decreased our participation in the results of Syndicate 1729 for the 2021 underwriting year to 5% from 29%. Syndicate 6131 is an SPA that underwrites on a quota share basis with Syndicate 1729. Effective July 1, 2020, Syndicate 6131 entered into a six-month quota share reinsurance agreement with an unaffiliated insurer. Under this agreement, Syndicate 6131 ceded essentially half of the premium assumed from Syndicate 1729 to the unaffiliated insurer; the agreement was non-renewed on January 1, 2021 and we decreased our participation in the results of Syndicate 6131 to 50% from 100% for the 2021 underwriting year. Due to the quarter lag, the change in our participation in the results of Syndicates 1729 and 6131 will not be reflected in our results until the second quarter of 2021. 44 • |
Corporate - This segment includes our investment operations, other than those reported in our Segregated Portfolio Cell Reinsurance and Lloyd's Syndicates segments, interest expense and U.S. income taxes. This segment also includes non-premium revenues generated outside of our insurance entities and corporate expenses. |
Distribution by GAAP Fair Value Hierarchy | Distribution by GAAP Fair Value Hierarchy | |||||||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Not Categorized | Total Investments | Level 1 | Level 2 | Level 3 | Not Categorized | Total Investments | |||||||||||||||||||||||||||||
Investments recorded at: | Investments recorded at: | |||||||||||||||||||||||||||||||||||||
Fair value | 16% | 71% | 1% | 7% | 95% | Fair value | 10% | 78% | 1% | 7% | 96% | |||||||||||||||||||||||||||
Other valuations | 5% | Other valuations | 4% | |||||||||||||||||||||||||||||||||||
Total Investments | 100% | Total Investments | 100% |
(In millions) | Carrying Value | GAAP Measurement Method | |||||||||
Other investments: | |||||||||||
Other, principally FHLB capital stock | $ | 2.4 | Principally Cost | ||||||||
Investment in unconsolidated subsidiaries: | |||||||||||
Investments in tax credit partnerships | 24.4 | Equity | |||||||||
Equity method investments, primarily LPs/LLCs | 48.1 | Equity | |||||||||
72.5 | |||||||||||
BOLI | 66.9 | Cash surrender value | |||||||||
Total investments - Other valuation methodologies | $ | 141.8 |
(In millions) | Carrying Value | GAAP Measurement Method | |||
Other investments: | |||||
Other, principally FHLB capital stock | $ | 2.9 | Principally Cost | ||
Investment in unconsolidated subsidiaries: | |||||
Investments in tax credit partnerships | 37.1 | Equity | |||
Equity method investments, primarily LPs/LLCs | 46.8 | Equity | |||
83.9 | |||||
BOLI | 67.0 | Cash surrender value | |||
Total investments - Other valuation methodologies | $ | 153.8 |
Three Months Ended March 31 | |||||||||||||||||
(In thousands) | 2021 | 2020 | Change | ||||||||||||||
Net cash provided (used) by: | |||||||||||||||||
Operating activities | $ | 28,700 | $ | (12,049) | $ | 40,749 | |||||||||||
Investing activities | (26,261) | 71,825 | (98,086) | ||||||||||||||
Financing activities | (3,386) | (17,976) | 14,590 | ||||||||||||||
Increase (decrease) in cash and cash equivalents | $ | (947) | $ | 41,800 | $ | (42,747) |
Six Months Ended June 30 | |||||||||||
(In thousands) | 2020 | 2019 | Change | ||||||||
Net cash provided (used) by: | |||||||||||
Operating activities | $ | 2,473 | $ | 79,015 | $ | (76,542 | ) | ||||
Investing activities | 81,519 | (2,720 | ) | 84,239 | |||||||
Financing activities | (35,093 | ) | (64,887 | ) | 29,794 | ||||||
Increase (decrease) in cash and cash equivalents | $ | 48,899 | $ | 11,408 | $ | 37,491 |
Six Months Ended June 30 | Three Months Ended March 31 | |||||||||||||||||||||||||||
(In thousands) | 2019 | 2018 | Change | (In thousands) | 2020 | 2019 | Change | |||||||||||||||||||||
Net cash provided (used) by: | Net cash provided (used) by: | |||||||||||||||||||||||||||
Operating activities | $ | 79,015 | $ | 65,566 | $ | 13,449 | Operating activities | $ | (12,049) | $ | 34,392 | $ | (46,441) | |||||||||||||||
Investing activities | (2,720 | ) | 277,898 | (280,618 | ) | Investing activities | 71,825 | 3,868 | 67,957 | |||||||||||||||||||
Financing activities | (64,887 | ) | (411,244 | ) | 346,357 | Financing activities | (17,976) | (46,901) | 28,925 | |||||||||||||||||||
Increase (decrease) in cash and cash equivalents | $ | 11,408 | $ | (67,780 | ) | $ | 79,188 | Increase (decrease) in cash and cash equivalents | $ | 41,800 | $ | (8,641) | $ | 50,441 |
Healthcare Professional Liability | Medical Technology & Life Sciences Products | Workers' Compensation - Traditional |
Per Occurrence Coverage | Aggregate Coverage |
June 30, 2020 | December 31, 2019 | March 31, 2021 | December 31, 2020 | |||||||||||||||||||||||||
($ in thousands) | Carrying Value | % of Total Investment | Carrying Value | % of Total Investment | ($ in thousands) | Carrying Value | % of Total Investment | Carrying Value | % of Total Investment | |||||||||||||||||||
Fixed maturities, available-for-sale | Fixed maturities, available-for-sale | |||||||||||||||||||||||||||
U.S. Treasury obligations | $ | 115,241 | 4 | % | $ | 110,467 | 3 | % | U.S. Treasury obligations | $ | 102,877 | 3 | % | $ | 107,059 | 3 | % | |||||||||||
U.S. Government-sponsored enterprise obligations | 8,693 | 1 | % | 17,340 | 1 | % | U.S. Government-sponsored enterprise obligations | 11,944 | 1 | % | 12,261 | 1 | % | |||||||||||||||
State and municipal bonds | 293,718 | 9 | % | 296,093 | 9 | % | State and municipal bonds | 322,465 | 9 | % | 332,920 | 10 | % | |||||||||||||||
Corporate debt | 1,274,443 | 39 | % | 1,340,364 | 40 | % | Corporate debt | 1,428,866 | 42 | % | 1,329,342 | 39 | % | |||||||||||||||
Residential mortgage-backed securities | 234,693 | 7 | % | 208,408 | 6 | % | Residential mortgage-backed securities | 271,548 | 8 | % | 276,541 | 8 | % | |||||||||||||||
Commercial mortgage-backed securities | 103,949 | 3 | % | 80,089 | 2 | % | Commercial mortgage-backed securities | 135,037 | 4 | % | 126,402 | 4 | % | |||||||||||||||
Other asset-backed securities | 229,211 | 7 | % | 236,024 | 7 | % | Other asset-backed securities | 290,536 | 9 | % | 273,006 | 8 | % | |||||||||||||||
Total fixed maturities, available-for-sale | 2,259,948 | 70 | % | 2,288,785 | 68 | % | Total fixed maturities, available-for-sale | 2,563,273 | 76 | % | 2,457,531 | 73 | % | |||||||||||||||
Fixed maturities, trading | 46,116 | 1 | % | 47,284 | 1 | % | Fixed maturities, trading | 45,151 | 1 | % | 48,456 | 1 | % | |||||||||||||||
Total fixed maturities | 2,306,064 | 71 | % | 2,336,069 | 69 | % | Total fixed maturities | 2,608,424 | 77 | % | 2,505,987 | 74 | % | |||||||||||||||
Equity investments | 98,723 | 3 | % | 250,552 | 7 | % | Equity investments | 77,537 | 2 | % | 120,101 | 4 | % | |||||||||||||||
Short-term investments | 478,074 | 14 | % | 339,907 | 10 | % | Short-term investments | 280,993 | 8 | % | 337,813 | 10 | % | |||||||||||||||
BOLI | 67,025 | 2 | % | 66,112 | 2 | % | BOLI | 66,932 | 2 | % | 67,847 | 2 | % | |||||||||||||||
Investment in unconsolidated subsidiaries | 306,859 | 9 | % | 358,820 | 11 | % | Investment in unconsolidated subsidiaries | 299,360 | 9 | % | 310,529 | 9 | % | |||||||||||||||
Other investments | 40,900 | 1 | % | 38,949 | 1 | % | Other investments | 71,621 | 2 | % | 47,068 | 1 | % | |||||||||||||||
Total investments | $ | 3,297,645 | 100 | % | $ | 3,390,409 | 100 | % | Total investments | $ | 3,404,867 | 100 | % | $ | 3,389,345 | 100 | % |
March 31, 2021 | December 31, 2020 | ||||||||||||||||
($ in thousands) | Carrying Value | % of Total Investment | Carrying Value | % of Total Investment | |||||||||||||
Rating* | |||||||||||||||||
AAA | $ | 721,870 | 28 | % | $ | 717,187 | 29 | % | |||||||||
AA+ | 100,285 | 4 | % | 103,996 | 4 | % | |||||||||||
AA | 170,503 | 7 | % | 168,452 | 7 | % | |||||||||||
AA- | 116,165 | 4 | % | 122,733 | 5 | % | |||||||||||
A+ | 207,918 | 8 | % | 197,274 | 8 | % | |||||||||||
A | 360,371 | 14 | % | 323,044 | 13 | % | |||||||||||
A- | 244,943 | 10 | % | 245,464 | 10 | % | |||||||||||
BBB+ | 196,769 | 8 | % | 189,971 | 8 | % | |||||||||||
BBB | 210,681 | 8 | % | 190,385 | 8 | % | |||||||||||
BBB- | 82,604 | 3 | % | 59,847 | 2 | % | |||||||||||
Below investment grade | 138,949 | 5 | % | 133,607 | 5 | % | |||||||||||
Not rated | 12,215 | 1 | % | 5,571 | 1 | % | |||||||||||
Total | $ | 2,563,273 | 100 | % | $ | 2,457,531 | 100 | % | |||||||||
*Average of three NRSRO sources, presented as an S&P equivalent. Source: S&P, Copyright ©2021, S&P Global Market Intelligence |
June 30, 2020 | December 31, 2019 | ||||||||||
($ in thousands) | Carrying Value | % of Total Investment | Carrying Value | % of Total Investment | |||||||
Rating* | |||||||||||
AAA | $ | 649,795 | 29 | % | $ | 677,554 | 30 | % | |||
AA+ | 95,147 | 4 | % | 84,991 | 3 | % | |||||
AA | 150,267 | 7 | % | 152,118 | 7 | % | |||||
AA- | 115,625 | 5 | % | 153,377 | 7 | % | |||||
A+ | 197,178 | 9 | % | 182,966 | 8 | % | |||||
A | 321,263 | 14 | % | 338,697 | 15 | % | |||||
A- | 211,256 | 9 | % | 171,553 | 7 | % | |||||
BBB+ | 178,107 | 8 | % | 182,041 | 8 | % | |||||
BBB | 153,253 | 7 | % | 155,935 | 7 | % | |||||
BBB- | 50,306 | 2 | % | 52,523 | 2 | % | |||||
Below investment grade | 130,671 | 5 | % | 130,929 | 5 | % | |||||
Not rated | 7,080 | 1 | % | 6,101 | 1 | % | |||||
Total | $ | 2,259,948 | 100 | % | $ | 2,288,785 | 100 | % | |||
*Average of three NRSRO sources, presented as an S&P equivalent. Source: S&P, Copyright ©2020, S&P Global Market Intelligence |
Carrying Value | June 30, 2020 | Carrying Value | March 31, 2021 | |||||||||||||||||||||||||
($ in thousands, except expected funding period) | June 30, 2020 | December 31, 2019 | Unfunded Commitment | Expected funding period in years | ($ in thousands, except expected funding period) | March 31, 2021 | December 31, 2020 | Unfunded Commitment | Expected funding period in years | |||||||||||||||||||
Qualified affordable housing project tax credit partnerships (1) | $ | 37,061 | $ | 46,421 | $ | 771 | 6 | Qualified affordable housing project tax credit partnerships (1) | $ | 24,351 | $ | 27,719 | $ | 744 | 6 | |||||||||||||
Historic tax credit partnership (2) | — | 2,085 | 276 | 1 | ||||||||||||||||||||||||
All other investments, primarily investment fund LPs/LLCs | 269,798 | 310,314 | 137,206 | 4 | All other investments, primarily investment fund LPs/LLCs | 275,009 | 282,810 | 116,508 | 3 | |||||||||||||||||||
Total | $ | 306,859 | $ | 358,820 | $ | 138,253 | Total | $ | 299,360 | $ | 310,529 | $ | 117,252 | |||||||||||||||
(1) The carrying value reflects our total commitments (both funded and unfunded) to the partnerships, less any amortization, since our initial investment. We fund these investments based on funding schedules maintained by the partnerships. | (1) The carrying value reflects our total commitments (both funded and unfunded) to the partnerships, less any amortization, since our initial investment. We fund these investments based on funding schedules maintained by the partnerships. | (1) The carrying value reflects our total commitments (both funded and unfunded) to the partnerships, less any amortization, since our initial investment. We fund these investments based on funding schedules maintained by the partnerships. | ||||||||||||||||||||||||||
(2) The carrying value reflects our funded commitments less any amortization. |
Three Months Ended March 31 | |||||||||||||||||||||||
($ in thousands, except per share data) | 2021 | 2020 | Change | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Net premiums written | $ | 202,270 | $ | 232,217 | $ | (29,947) | |||||||||||||||||
Net premiums earned | $ | 187,358 | $ | 203,855 | $ | (16,497) | |||||||||||||||||
Net investment result | 21,805 | 19,268 | 2,537 | ||||||||||||||||||||
Net realized investment gains (losses) | 8,849 | (28,673) | 37,522 | ||||||||||||||||||||
Other income | 2,005 | 2,251 | (246) | ||||||||||||||||||||
Total revenues | 220,017 | 196,701 | 23,316 | ||||||||||||||||||||
Expenses: | |||||||||||||||||||||||
Net losses and loss adjustment expenses | 149,785 | 164,832 | (15,047) | ||||||||||||||||||||
Underwriting, policy acquisition and operating expenses | 56,451 | 62,056 | (5,605) | ||||||||||||||||||||
SPC U.S. federal income tax expense | 356 | 222 | 134 | ||||||||||||||||||||
SPC dividend expense (income) | 1,742 | (508) | 2,250 | ||||||||||||||||||||
Interest expense | 3,212 | 4,129 | (917) | ||||||||||||||||||||
Total expenses | 211,546 | 230,731 | (19,185) | ||||||||||||||||||||
Income (loss) before income taxes | 8,471 | (34,030) | 42,501 | ||||||||||||||||||||
Income tax expense (benefit) | 736 | (12,076) | 12,812 | ||||||||||||||||||||
Net income (loss) | $ | 7,735 | $ | (21,954) | $ | 29,689 | |||||||||||||||||
Non-GAAP operating income (loss) | $ | 2,085 | $ | (1,146) | $ | 3,231 | |||||||||||||||||
Earnings (loss) per share: | |||||||||||||||||||||||
Basic | $ | 0.14 | $ | (0.41) | $ | 0.55 | |||||||||||||||||
Diluted | $ | 0.14 | $ | (0.41) | $ | 0.55 | |||||||||||||||||
Non-GAAP operating income (loss) per share: | |||||||||||||||||||||||
Basic | $ | 0.04 | $ | (0.02) | $ | 0.06 | |||||||||||||||||
Diluted | $ | 0.04 | $ | (0.02) | $ | 0.06 | |||||||||||||||||
Net loss ratio | 79.9 | % | 80.9 | % | (1.0 | pts) | |||||||||||||||||
Underwriting expense ratio | 30.1 | % | 30.4 | % | (0.3 | pts) | |||||||||||||||||
Combined ratio | 110.0 | % | 111.3 | % | (1.3 | pts) | |||||||||||||||||
Operating ratio | 102.0 | % | 101.1 | % | 0.9 | pts | |||||||||||||||||
Effective tax rate | 8.7 | % | 35.5 | % | (26.8 | pts) | |||||||||||||||||
Return on equity* | 2.3 | % | (6.0 | %) | 8.3 | pts | |||||||||||||||||
*Annualized | |||||||||||||||||||||||
In all tables that follow, the abbreviation "nm" indicates that the information or the percentage change is not meaningful. |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||
($ in thousands, except per share data) | 2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||
Revenues: | |||||||||||||||||||
Net premiums written | $ | 159,745 | $ | 189,984 | $ | (30,239 | ) | $ | 391,961 | $ | 435,725 | $ | (43,764 | ) | |||||
Net premiums earned | $ | 207,293 | $ | 209,149 | $ | (1,856 | ) | $ | 411,149 | $ | 417,298 | $ | (6,149 | ) | |||||
Net investment result | (7,231 | ) | 18,387 | (25,618 | ) | 12,037 | 40,395 | (28,358 | ) | ||||||||||
Net realized investment gains (losses) | 19,985 | 9,308 | 10,677 | (8,688 | ) | 45,931 | (54,619 | ) | |||||||||||
Other income | 1,695 | 2,777 | (1,082 | ) | 3,945 | 4,872 | (927 | ) | |||||||||||
Total revenues | 221,742 | 239,621 | (17,879 | ) | 418,443 | 508,496 | (90,053 | ) | |||||||||||
Expenses: | |||||||||||||||||||
Net losses and loss adjustment expenses | 210,999 | 168,440 | 42,559 | 375,831 | 328,195 | 47,636 | |||||||||||||
Underwriting, policy acquisition and operating expenses | 58,692 | 62,708 | (4,016 | ) | 120,746 | 124,100 | (3,354 | ) | |||||||||||
SPC U.S. federal income tax expense | 480 | — | 480 | 702 | — | 702 | |||||||||||||
Segregated portfolio cell dividend expense (income) | 4,642 | (7,033 | ) | 11,675 | 4,134 | (2,246 | ) | 6,380 | |||||||||||
Interest expense | 3,714 | 4,247 | (533 | ) | 7,844 | 8,576 | (732 | ) | |||||||||||
Total expenses | 278,527 | 228,362 | 50,165 | 509,257 | 458,625 | 50,632 | |||||||||||||
Income (loss) before income taxes | (56,785 | ) | 11,259 | (68,044 | ) | (90,814 | ) | 49,871 | (140,685 | ) | |||||||||
Income tax expense (benefit) | (38,686 | ) | (277 | ) | (38,409 | ) | (50,761 | ) | 6,685 | (57,446 | ) | ||||||||
Net income (loss) | $ | (18,099 | ) | $ | 11,536 | $ | (29,635 | ) | $ | (40,053 | ) | $ | 43,186 | $ | (83,239 | ) | |||
Non-GAAP operating income (loss) | $ | (32,441 | ) | $ | 4,134 | $ | (36,575 | ) | $ | (33,587 | ) | $ | 8,298 | $ | (41,885 | ) | |||
Earnings (loss) per share: | |||||||||||||||||||
Basic | $ | (0.34 | ) | $ | 0.21 | $ | (0.55 | ) | $ | (0.74 | ) | $ | 0.80 | $ | (1.54 | ) | |||
Diluted | $ | (0.34 | ) | $ | 0.21 | $ | (0.55 | ) | $ | (0.74 | ) | $ | 0.80 | $ | (1.54 | ) | |||
Non-GAAP operating earnings (loss) per share: | |||||||||||||||||||
Basic | $ | (0.60 | ) | $ | 0.08 | $ | (0.68 | ) | $ | (0.62 | ) | $ | 0.15 | $ | (0.77 | ) | |||
Diluted | $ | (0.60 | ) | $ | 0.08 | $ | (0.68 | ) | $ | (0.62 | ) | $ | 0.15 | $ | (0.77 | ) | |||
Net loss ratio | 101.8 | % | 80.5 | % | 21.3 | pts | 91.4 | % | 78.6 | % | 12.8 | pts | |||||||
Underwriting expense ratio | 28.3 | % | 30.0 | % | (1.7 | pts) | 29.4 | % | 29.7 | % | (0.3 | pts) | |||||||
Combined ratio | 130.1 | % | 110.5 | % | 19.6 | pts | 120.8 | % | 108.3 | % | 12.5 | pts | |||||||
Operating ratio | 121.4 | % | 99.2 | % | 22.2 | pts | 111.3 | % | 97.2 | % | 14.1 | pts | |||||||
Effective tax rate | 68.1 | % | (2.5 | %) | 70.6 | pts | 55.9 | % | 13.4 | % | 42.5 | pts | |||||||
Return on equity* | (5.0 | %) | 2.9 | % | (7.9 | pts) | (5.4 | %) | 5.6 | % | (11.0 | pts) | |||||||
* Annualized | |||||||||||||||||||
In all tables that follow, the abbreviation "nm" indicates that the information or the percentage change is not meaningful. |
Three Months Ended March 31 | |||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | 2021 | 2020 | Change | ||||||||||||||||||||||||||||||||||||||||||||
Net premiums earned | |||||||||||||||||||||||||||||||||||||||||||||||
Specialty P&C | $ | 115,613 | $ | 120,359 | $ | (4,746) | (3.9 | %) | |||||||||||||||||||||||||||||||||||||||
Workers' Compensation Insurance | 40,011 | 44,515 | (4,504) | (10.1 | %) | ||||||||||||||||||||||||||||||||||||||||||
Segregated Portfolio Cell Reinsurance | 15,884 | 16,980 | (1,096) | (6.5 | %) | ||||||||||||||||||||||||||||||||||||||||||
Lloyd's Syndicates | 15,850 | 22,001 | (6,151) | (28.0 | %) | ||||||||||||||||||||||||||||||||||||||||||
Consolidated total | $ | 187,358 | $ | 203,855 | $ | (16,497) | (8.1 | %) |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||||||||||||
($ in thousands) | 2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||||||||
Net premiums earned | |||||||||||||||||||||||||||||
Specialty P&C | $ | 127,096 | $ | 126,011 | $ | 1,085 | 0.9 | % | $ | 247,456 | $ | 250,079 | $ | (2,623 | ) | (1.0 | %) | ||||||||||||
Workers' Compensation Insurance | 42,406 | 46,574 | (4,168 | ) | (8.9 | %) | 86,921 | 92,512 | (5,591 | ) | (6.0 | %) | |||||||||||||||||
Segregated Portfolio Cell Reinsurance | 16,748 | 19,284 | (2,536 | ) | (13.2 | %) | 33,728 | 38,787 | (5,059 | ) | (13.0 | %) | |||||||||||||||||
Lloyd's Syndicates | 21,043 | 17,280 | 3,763 | 21.8 | % | 43,044 | 35,920 | 7,124 | 19.8 | % | |||||||||||||||||||
Consolidated total | $ | 207,293 | $ | 209,149 | $ | (1,856 | ) | (0.9 | %) | $ | 411,149 | $ | 417,298 | $ | (6,149 | ) | (1.5 | %) |
Three Months Ended June 30 | Six Months Ended June 30 | Three Months Ended March 31 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | 2020 | 2019 | Change | 2020 | 2019 | Change | ($ in thousands) | 2021 | 2020 | Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | $ | 18,124 | $ | 23,539 | $ | (5,415 | ) | (23.0 | %) | $ | 38,954 | $ | 46,357 | $ | (7,403 | ) | (16.0 | %) | Net investment income | $ | 15,017 | $ | 20,830 | $ | (5,813) | (27.9 | %) | |||||||||||||||||||||||||||||||||||||||||||||||||
Equity in earnings (loss) of unconsolidated subsidiaries | (25,355 | ) | (5,152 | ) | (20,203 | ) | (392.1 | %) | (26,917 | ) | (5,962 | ) | (20,955 | ) | (351.5 | %) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity in earnings (loss) of unconsolidated subsidiaries* | Equity in earnings (loss) of unconsolidated subsidiaries* | 6,788 | (1,562) | 8,350 | 534.6 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment result | $ | (7,231 | ) | $ | 18,387 | $ | (25,618 | ) | (139.3 | %) | $ | 12,037 | $ | 40,395 | $ | (28,358 | ) | (70.2 | %) | Net investment result | $ | 21,805 | $ | 19,268 | $ | 2,537 | 13.2 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
*Equity in earnings (loss) of unconsolidated subsidiaries includes our share of the operating results of interests we hold in certain LPs/LLCs as well as operating losses associated with our tax credit partnership investments, which are designed to generate returns in the form of tax credits and tax-deductible project operating losses. | *Equity in earnings (loss) of unconsolidated subsidiaries includes our share of the operating results of interests we hold in certain LPs/LLCs as well as operating losses associated with our tax credit partnership investments, which are designed to generate returns in the form of tax credits and tax-deductible project operating losses. |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||||||||||||
($ in thousands) | 2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||||||||
Net impairment losses recognized in earnings | $ | (345 | ) | $ | — | $ | (345 | ) | nm | $ | (1,508 | ) | $ | (49 | ) | $ | (1,459 | ) | 2,977.6 | % | |||||||||
Other net realized investment gains (losses) | 20,330 | 9,308 | 11,022 | 118.4 | % | (7,180 | ) | 45,980 | (53,160 | ) | (115.6 | %) | |||||||||||||||||
Net realized investment gains (losses) | $ | 19,985 | $ | 9,308 | $ | 10,677 | 114.7 | % | $ | (8,688 | ) | $ | 45,931 | $ | (54,619 | ) | (118.9 | %) |
Three Months Ended March 31 | ||||||||||||||||||||||||||||||||||||||
($ in millions) | 2021 | 2020 | Change | |||||||||||||||||||||||||||||||||||
Current accident year net loss ratio | ||||||||||||||||||||||||||||||||||||||
Consolidated ratio | 82.5 | % | 83.8 | % | (1.3 | pts) | ||||||||||||||||||||||||||||||||
Specialty P&C | 89.8 | % | 94.2 | % | (4.4 | pts) | ||||||||||||||||||||||||||||||||
Workers' Compensation Insurance | 71.0 | % | 70.2 | % | 0.8 | pts | ||||||||||||||||||||||||||||||||
Segregated Portfolio Cell Reinsurance | 68.9 | % | 65.7 | % | 3.2 | pts | ||||||||||||||||||||||||||||||||
Lloyd's Syndicates | 72.1 | % | 68.7 | % | 3.4 | pts | ||||||||||||||||||||||||||||||||
Calendar year net loss ratio | ||||||||||||||||||||||||||||||||||||||
Consolidated ratio | 79.9 | % | 80.9 | % | (1.0 | pts) | ||||||||||||||||||||||||||||||||
Specialty P&C | 87.5 | % | 92.2 | % | (4.7 | pts) | ||||||||||||||||||||||||||||||||
Workers' Compensation Insurance | 65.5 | % | 66.9 | % | (1.4 | pts) | ||||||||||||||||||||||||||||||||
Segregated Portfolio Cell Reinsurance | 59.3 | % | 55.1 | % | 4.2 | pts | ||||||||||||||||||||||||||||||||
Lloyd's Syndicates | 81.8 | % | 67.2 | % | 14.6 | pts | ||||||||||||||||||||||||||||||||
Favorable (unfavorable) reserve development, prior accident years | ||||||||||||||||||||||||||||||||||||||
Consolidated | $ | 4.8 | $ | 6.0 | $ | (1.2) | ||||||||||||||||||||||||||||||||
Specialty P&C | $ | 2.7 | $ | 2.4 | $ | 0.3 | ||||||||||||||||||||||||||||||||
Workers' Compensation Insurance | $ | 2.2 | $ | 1.5 | $ | 0.7 | ||||||||||||||||||||||||||||||||
Segregated Portfolio Cell Reinsurance | $ | 1.4 | $ | 1.8 | $ | (0.4) | ||||||||||||||||||||||||||||||||
Lloyd's Syndicates | $ | (1.5) | $ | 0.3 | $ | (1.8) |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||||||
($ in millions) | 2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||
Current accident year net loss ratio | |||||||||||||||||||||||
Consolidated ratio | 110.0 | % | 88.2 | % | 21.8 | pts | 97.0 | % | 84.9 | % | 12.1 | pts | |||||||||||
Specialty P&C | 137.7 | % | 94.0 | % | 43.7 | pts | 116.5 | % | 93.6 | % | 22.9 | pts | |||||||||||
Workers' Compensation Insurance | 70.6 | % | 68.2 | % | 2.4 | pts | 70.4 | % | 68.2 | % | 2.2 | pts | |||||||||||
Segregated Portfolio Cell Reinsurance | 57.0 | % | 115.2 | % | (58.2 | pts) | 61.4 | % | 90.8 | % | (29.4 | pts) | |||||||||||
Lloyd's Syndicates | 64.7 | % | 69.7 | % | (5.0 | pts) | 66.8 | % | 61.8 | % | 5.0 | pts | |||||||||||
Calendar year net loss ratio | |||||||||||||||||||||||
Consolidated ratio | 101.8 | % | 80.5 | % | 21.3 | pts | 91.4 | % | 78.6 | % | 12.8 | pts | |||||||||||
Specialty P&C | 125.5 | % | 84.1 | % | 41.4 | pts | 109.3 | % | 85.4 | % | 23.9 | pts | |||||||||||
Workers' Compensation Insurance | 67.0 | % | 65.8 | % | 1.2 | pts | 66.9 | % | 66.0 | % | 0.9 | pts | |||||||||||
Segregated Portfolio Cell Reinsurance | 45.9 | % | 103.6 | % | (57.7 | pts) | 50.5 | % | 79.2 | % | (28.7 | pts) | |||||||||||
Lloyd's Syndicates | 72.9 | % | 68.4 | % | 4.5 | pts | 70.0 | % | 63.3 | % | 6.7 | pts | |||||||||||
Favorable (unfavorable) net loss development, prior accident years | |||||||||||||||||||||||
Consolidated | $ | 17.1 | $ | 16.0 | $ | 1.1 | $ | 23.1 | $ | 26.3 | $ | (3.2 | ) | ||||||||||
Specialty P&C | $ | 15.4 | $ | 12.4 | $ | 3.0 | $ | 17.8 | $ | 20.3 | $ | (2.5 | ) | ||||||||||
Workers' Compensation Insurance | $ | 1.5 | $ | 1.1 | $ | 0.4 | $ | 3.0 | $ | 2.0 | $ | 1.0 | |||||||||||
Segregated Portfolio Cell Reinsurance | $ | 1.9 | $ | 2.3 | $ | (0.4 | ) | $ | 3.7 | $ | 4.5 | $ | (0.8 | ) | |||||||||
Lloyd's Syndicates | $ | (1.7 | ) | $ | 0.2 | $ | (1.9 | ) | $ | (1.4 | ) | $ | (0.5 | ) | $ | (0.9 | ) |
Three Months Ended March 31 | |||||||||||||||||||||||||||||||||||
2021 | 2020 | Change | |||||||||||||||||||||||||||||||||
Underwriting Expense Ratio | |||||||||||||||||||||||||||||||||||
Consolidated | 30.1 | % | 30.4 | % | (0.3 | pts) | |||||||||||||||||||||||||||||
Specialty P&C | 22.8 | % | 24.6 | % | (1.8 | pts) | |||||||||||||||||||||||||||||
Workers' Compensation Insurance | 30.7 | % | 31.8 | % | (1.1 | pts) | |||||||||||||||||||||||||||||
Segregated Portfolio Cell Reinsurance | 31.6 | % | 29.9 | % | 1.7 | pts | |||||||||||||||||||||||||||||
Lloyd's Syndicates | 41.6 | % | 41.6 | % | — | pts | |||||||||||||||||||||||||||||
Corporate* | 3.8 | % | 2.4 | % | 1.4 | pts | |||||||||||||||||||||||||||||
*There are no net premiums earned associated with the Corporate segment. Ratios shown are the contribution of the Corporate segment to the consolidated ratio (Corporate operating expenses divided by consolidated net premium earned). |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||
2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||
Underwriting Expense Ratio | |||||||||||||||||
Consolidated | 28.3 | % | 30.0 | % | (1.7 | pts) | 29.4 | % | 29.7 | % | (0.3 | pts) | |||||
Specialty P&C | 19.9 | % | 23.7 | % | (3.8 | pts) | 22.2 | % | 23.8 | % | (1.6 | pts) | |||||
Workers' Compensation Insurance | 31.7 | % | 30.8 | % | 0.9 | pts | 31.8 | % | 30.9 | % | 0.9 | pts | |||||
Segregated Portfolio Cell Reinsurance | 32.0 | % | 30.6 | % | 1.4 | pts | 31.0 | % | 28.7 | % | 2.3 | pts | |||||
Lloyd's Syndicates | 34.7 | % | 43.8 | % | (9.1 | pts) | 38.2 | % | 44.6 | % | (6.4 | pts) | |||||
Corporate* | 3.7 | % | 2.6 | % | 1.1 | pts | 3.1 | % | 2.4 | % | 0.7 | pts | |||||
*There are no net premiums earned associated with the Corporate segment. Ratios shown are the contribution of the Corporate segment to the consolidated ratio (Corporate operating expenses divided by consolidated net premium earned). |
($ in thousands) | Six Months Ended June 30 | |||||||||||||
2020 | 2019 | Change | ||||||||||||
Income (loss) before income taxes | $ | (90,814 | ) | $ | 49,871 | $ | (140,685 | ) | (282.1 | %) | ||||
Income tax expense (benefit) | (50,761 | ) | 6,685 | (57,446 | ) | (859.3 | %) | |||||||
Net income (loss) | $ | (40,053 | ) | $ | 43,186 | $ | (83,239 | ) | (192.7 | %) | ||||
Effective tax rate | 55.9 | % | 13.4 | % |
Six Months Ended June 30 | |||||
2020 | 2019 | ||||
Projected annual effective tax rate | 53.4 | % | (39.0 | %) | |
Tax effect of discrete items | 2.5 | % | 52.4 | % | |
Total effective tax rate | 55.9 | % | 13.4 | % |
($ in thousands) | Three Months Ended March 31 | ||||||||||||||||||||||
2021 | 2020 | Change | |||||||||||||||||||||
Income (loss) before income taxes | $ | 8,471 | $ | (34,030) | $ | 42,501 | 124.9 | % | |||||||||||||||
Less: Income tax expense (benefit) | 736 | (12,076) | 12,812 | 106.1 | % | ||||||||||||||||||
Net income (loss) | $ | 7,735 | $ | (21,954) | $ | 29,689 | 135.2 | % | |||||||||||||||
Effective tax rate | 8.7 | % | 35.5 | % | (26.8 | pts) |
Three Months Ended March 31 | |||||||||||||||||||||||
2021 | 2020 | Change | |||||||||||||||||||||
Combined ratio | 110.0 | % | 111.3 | % | (1.3 | pts) | |||||||||||||||||
Less: investment income ratio | 8.0 | % | 10.2 | % | (2.2 | pts) | |||||||||||||||||
Operating ratio | 102.0 | % | 101.1 | % | 0.9 | pts |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||
2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||
Combined ratio | 130.1 | % | 110.5 | % | 19.6 | pts | 120.8 | % | 108.3 | % | 12.5 | pts | |
Less: investment income ratio | 8.7 | % | 11.3 | % | (2.6 | pts) | 9.5 | % | 11.1 | % | (1.6 | pts) | |
Operating ratio | 121.4 | % | 99.2 | % | 22.2 | pts | 111.3 | % | 97.2 | % | 14.1 | pts |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||
2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||
ROE | (5.0 | %) | 2.9 | % | (7.9 | pts) | (5.4 | %) | 5.6 | % | (11.0 | pts) |
Three Months Ended March 31 | |||||||||||||||||||||||
2021 | 2020 | Change | |||||||||||||||||||||
ROE | 2.3 | % | (6.0 | %) | 8.3 | pts |
Book Value Per Share | |||||
Book Value Per Share at December 31, 2020 | $ | 25.04 | |||
Increase (decrease) to book value per share during the three months ended March 31, 2021 attributable to: | |||||
Dividends declared | (0.05) | ||||
Net income (loss) | 0.14 | ||||
OCI(1) | (0.63) | ||||
Other(2) | (0.01) | ||||
Book Value Per Share at March 31, 2021 | $ | 24.49 |
Book Value Per Share | |||
Book Value Per Share at December 31, 2019 | $ | 28.11 | |
Increase (decrease) to book value per share during the six months ended June 30, 2020 attributable to: | |||
Dividends declared | (0.36 | ) | |
Net income (loss) | (0.74 | ) | |
OCI | 0.45 | ||
Other * | (0.10 | ) | |
Book Value Per Share at June 30, 2020 | $ | 27.36 | |
* Includes the impact of cumulative effect adjustments related to ASUs adopted during 2020 and the impact of share-based compensation. |
Three Months Ended March 31 | |||||||||||||||||||||||
(In thousands, except per share data) | 2021 | 2020 | |||||||||||||||||||||
Net income (loss) | $ | 7,735 | $ | (21,954) | |||||||||||||||||||
Items excluded in the calculation of Non-GAAP operating income (loss): | |||||||||||||||||||||||
Net realized investment (gains) losses | (8,849) | 28,673 | |||||||||||||||||||||
Net realized gains (losses) attributable to SPCs which no profit/loss is retained (1) | 789 | (2,498) | |||||||||||||||||||||
Transaction-related costs (2) | 925 | — | |||||||||||||||||||||
Guaranty fund assessments (recoupments) | 4 | (2) | |||||||||||||||||||||
Pre-tax effect of exclusions | (7,131) | 26,173 | |||||||||||||||||||||
Tax effect, at 21% (3) | 1,481 | (5,365) | |||||||||||||||||||||
After-tax effect of exclusions | (5,650) | 20,808 | |||||||||||||||||||||
Non-GAAP operating income (loss) | $ | 2,085 | $ | (1,146) | |||||||||||||||||||
Per diluted common share: | |||||||||||||||||||||||
Net income (loss) | $ | 0.14 | $ | (0.41) | |||||||||||||||||||
Effect of exclusions | (0.10) | 0.39 | |||||||||||||||||||||
Non-GAAP operating income (loss) per diluted common share | $ | 0.04 | $ | (0.02) | |||||||||||||||||||
(1) Net realized investment gains (losses) on investments related to SPCs are recognized in our Segregated Portfolio Cell Reinsurance segment. SPC results, including any realized gain or loss, that are attributable to external cell participants are reflected in the SPC dividend expense (income). To be consistent with our exclusion of net realized investment gains (losses) recognized in earnings, we are excluding the portion of net realized investment gains (losses) that is included in the SPC dividend expense (income) which is attributable to the external cell participants. | |||||||||||||||||||||||
(2) Transaction-related costs associated with our acquisition of NORCAL. Given the significance of these transaction-related costs to the current period, we are excluding these costs as they do not reflect normal operating results and are unique and non-recurring in nature. | |||||||||||||||||||||||
(3) The 21% rate is the annual expected statutory tax rate associated with the taxable or tax deductible items listed above. Our effective tax rate for the respective periods was applied to these items in calculating net income (loss), excluding net realized investment gains (losses) and related adjustments. Net realized investment gains (losses) in our Corporate segment are discrete items and are tax affected at the annual expected statutory tax rate (21%) in the period they are included in our consolidated tax provision and net income (loss). See previous discussion in this section under the heading "Taxes." The taxes associated with the net realized investment gains (losses) related to SPCs in our Segregated Portfolio Cell Reinsurance segment are paid by the individual SPCs and are not included in our consolidated tax provision or net income (loss); therefore, both the net realized investment gains (losses) from our Segregated Portfolio Cell Reinsurance segment and the adjustment to exclude the portion of net realized investment gains (losses) included in the SPC dividend expense (income) in the table above are not tax effected. |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||
(In thousands, except per share data) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Net income (loss) | $ | (18,099 | ) | $ | 11,536 | $ | (40,053 | ) | $ | 43,186 | |||||
Items excluded in the calculation of Non-GAAP operating income (loss): | |||||||||||||||
Net realized investment (gains) losses | (19,985 | ) | (9,308 | ) | 8,688 | (45,931 | ) | ||||||||
Net realized gains (losses) attributable to SPCs which no profit/loss is retained (1) | 2,075 | (79 | ) | (423 | ) | 1,663 | |||||||||
Guaranty fund assessments (recoupments) | 29 | 18 | 27 | 106 | |||||||||||
Pre-tax effect of exclusions | (17,881 | ) | (9,369 | ) | 8,292 | (44,162 | ) | ||||||||
Tax effect, at 21% (2) | 3,539 | 1,967 | (1,826 | ) | 9,274 | ||||||||||
After-tax effect of exclusions | (14,342 | ) | (7,402 | ) | 6,466 | (34,888 | ) | ||||||||
Non-GAAP operating income (loss) | $ | (32,441 | ) | $ | 4,134 | $ | (33,587 | ) | $ | 8,298 | |||||
Per diluted common share: | |||||||||||||||
Net income (loss) | $ | (0.34 | ) | $ | 0.21 | $ | (0.74 | ) | $ | 0.80 | |||||
Effect of exclusions | (0.26 | ) | (0.13 | ) | 0.12 | (0.65 | ) | ||||||||
Non-GAAP operating income (loss) per diluted common share | $ | (0.60 | ) | $ | 0.08 | $ | (0.62 | ) | $ | 0.15 | |||||
(1) Net realized investment gains (losses) on investments related to SPCs are recognized in our Segregated Portfolio Cell Reinsurance segment. SPC operating results, including any realized gain or loss, that are attributable to external cell participants are reflected in the SPC dividend expense (income). To be consistent with our exclusion of net realized investment gains (losses) recognized in earnings, we are excluding the portion of net realized investment gains (losses) that is included in the SPC dividend expense (income) which is attributable to the external cell participants. | |||||||||||||||
(2) The 21% rate is the annual expected statutory tax rate associated with the taxable or tax deductible items listed above. Our effective tax rate for the respective periods was applied to these items in calculating net income (loss), excluding net realized investment gains (losses) and related adjustments. Net realized investment gains (losses) in our Corporate segment are discrete items and are tax affected at the annual expected statutory tax rate (21%) in the period they are included in our consolidated tax provision and net income (loss). See previous discussion in this section under the heading "Taxes." The taxes associated with the net realized investment gains (losses) related to SPCs in our Segregated Portfolio Cell Reinsurance segment are paid by the individual SPCs and are not included in our consolidated tax provision or net income (loss); therefore, both the net realized investment gains (losses) from our Segregated Portfolio Cell Reinsurance segment and the adjustment to exclude the portion of net realized investment gains (losses) included in the SPC dividend expense (income) in the table above are not tax effected. |
Three Months Ended March 31 | |||||||||||||||||||||||||||||
($ in thousands) | 2021 | 2020 | Change | ||||||||||||||||||||||||||
Net premiums written | $ | 121,313 | $ | 131,255 | $ | (9,942) | (7.6 | %) | |||||||||||||||||||||
Net premiums earned | $ | 115,613 | $ | 120,359 | $ | (4,746) | (3.9 | %) | |||||||||||||||||||||
Other income | 469 | 1,698 | (1,229) | (72.4 | %) | ||||||||||||||||||||||||
Net losses and loss adjustment expenses | (101,186) | (110,931) | 9,745 | (8.8 | %) | ||||||||||||||||||||||||
Underwriting, policy acquisition and operating expenses | (26,346) | (29,585) | 3,239 | (10.9 | %) | ||||||||||||||||||||||||
Segment results | $ | (11,450) | $ | (18,459) | $ | 7,009 | 38.0 | % | |||||||||||||||||||||
Net loss ratio | 87.5 | % | 92.2 | % | (4.7 pts) | ||||||||||||||||||||||||
Underwriting expense ratio | 22.8 | % | 24.6 | % | (1.8 pts) | ||||||||||||||||||||||||
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||||||
($ in thousands) | 2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||
Net premiums written | $ | 92,682 | $ | 111,253 | $ | (18,571 | ) | (16.7 | %) | $ | 223,937 | $ | 251,909 | $ | (27,972 | ) | (11.1 | %) | |||||
Net premiums earned | $ | 127,096 | $ | 126,011 | $ | 1,085 | 0.9 | % | $ | 247,456 | $ | 250,079 | $ | (2,623 | ) | (1.0 | %) | ||||||
Other income | 1,092 | 1,470 | (378 | ) | (25.7 | %) | 2,788 | 2,680 | 108 | 4.0 | % | ||||||||||||
Net losses and loss adjustment expenses | (159,559 | ) | (106,017 | ) | (53,542 | ) | 50.5 | % | (270,491 | ) | (213,675 | ) | (56,816 | ) | 26.6 | % | |||||||
Underwriting, policy acquisition and operating expenses | (25,234 | ) | (29,863 | ) | 4,629 | (15.5 | %) | (54,818 | ) | (59,480 | ) | 4,662 | (7.8 | %) | |||||||||
Segment operating results | $ | (56,605 | ) | $ | (8,399 | ) | $ | (48,206 | ) | (573.9 | %) | $ | (75,065 | ) | $ | (20,396 | ) | $ | (54,669 | ) | (268.0 | %) | |
Net loss ratio | 125.5 | % | 84.1 | % | 41.4 pts | 109.3 | % | 85.4 | % | 23.9 pts | |||||||||||||
Underwriting expense ratio | 19.9 | % | 23.7 | % | (3.8 pts) | 22.2 | % | 23.8 | % | (1.6 pts) |
Three Months Ended March 31 | |||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | 2021 | 2020 | Change | ||||||||||||||||||||||||||||||||||||||||||||
Gross premiums written | $ | 138,289 | $ | 155,381 | $ | (17,092) | (11.0 | %) | |||||||||||||||||||||||||||||||||||||||
Less: Ceded premiums written | 16,976 | 24,126 | (7,150) | (29.6 | %) | ||||||||||||||||||||||||||||||||||||||||||
Net premiums written | $ | 121,313 | $ | 131,255 | $ | (9,942) | (7.6 | %) |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||||||||||||
($ in thousands) | 2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||||||||
Gross premiums written | $ | 107,065 | $ | 127,901 | $ | (20,836 | ) | (16.3 | %) | $ | 262,445 | $ | 294,333 | $ | (31,888 | ) | (10.8 | %) | |||||||||||
Less: Ceded premiums written | 14,383 | 16,648 | (2,265 | ) | (13.6 | %) | 38,508 | 42,424 | (3,916 | ) | (9.2 | %) | |||||||||||||||||
Net premiums written | $ | 92,682 | $ | 111,253 | $ | (18,571 | ) | (16.7 | %) | $ | 223,937 | $ | 251,909 | $ | (27,972 | ) | (11.1 | %) |
Three Months Ended March 31 | |||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | 2021 | 2020 | Change | ||||||||||||||||||||||||||||||||||||||||||||
Professional Liability | |||||||||||||||||||||||||||||||||||||||||||||||
HCPL | |||||||||||||||||||||||||||||||||||||||||||||||
Standard Physician(1) | |||||||||||||||||||||||||||||||||||||||||||||||
Twelve month term | $ | 52,617 | $ | 56,918 | $ | (4,301) | (7.6 | %) | |||||||||||||||||||||||||||||||||||||||
Twenty-four month term | — | 7,366 | (7,366) | nm | |||||||||||||||||||||||||||||||||||||||||||
Total Standard Physician | 52,617 | 64,284 | (11,667) | (18.1 | %) | ||||||||||||||||||||||||||||||||||||||||||
Specialty | |||||||||||||||||||||||||||||||||||||||||||||||
Custom Physician(2)(10) | 15,837 | 30,399 | (14,562) | (47.9 | %) | ||||||||||||||||||||||||||||||||||||||||||
Hospitals and Facilities(3)(10) | 16,341 | 16,357 | (16) | (0.1 | %) | ||||||||||||||||||||||||||||||||||||||||||
Senior Care(4)(10) | 5,041 | 3,885 | 1,156 | 29.8 | % | ||||||||||||||||||||||||||||||||||||||||||
Reinsurance (assumed)(5) | 10,437 | 4,789 | 5,648 | 117.9 | % | ||||||||||||||||||||||||||||||||||||||||||
Total Specialty | 47,656 | 55,430 | (7,774) | (14.0 | %) | ||||||||||||||||||||||||||||||||||||||||||
Total HCPL | 100,273 | 119,714 | (19,441) | (16.2 | %) | ||||||||||||||||||||||||||||||||||||||||||
Small Business Unit(6) | 22,766 | 22,901 | (135) | (0.6 | %) | ||||||||||||||||||||||||||||||||||||||||||
Tail Coverages(7)(10) | 8,138 | 6,189 | 1,949 | 31.5 | % | ||||||||||||||||||||||||||||||||||||||||||
Total Professional Liability | 131,177 | 148,804 | (17,627) | (11.8 | %) | ||||||||||||||||||||||||||||||||||||||||||
Medical Technology Liability(8) | 6,984 | 6,219 | 765 | 12.3 | % | ||||||||||||||||||||||||||||||||||||||||||
Other(9) | 128 | 358 | (230) | (64.2 | %) | ||||||||||||||||||||||||||||||||||||||||||
Total | $ | 138,289 | $ | 155,381 | $ | (17,092) | (11.0 | %) |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||||||||||||
($ in thousands) | 2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||||||||
Professional Liability | |||||||||||||||||||||||||||||
HCPL | |||||||||||||||||||||||||||||
Standard Physician(1)(9) | |||||||||||||||||||||||||||||
Twelve month term | $ | 45,019 | $ | 50,598 | $ | (5,579 | ) | (11.0 | %) | $ | 108,917 | $ | 117,756 | $ | (8,839 | ) | (7.5 | %) | |||||||||||
Twenty-four month term | 947 | 10,081 | (9,134 | ) | (90.6 | %) | 8,314 | 16,867 | (8,553 | ) | (50.7 | %) | |||||||||||||||||
Total Standard physician | 40,339 | 53,452 | (13,113 | ) | (24.5 | %) | $ | 104,623 | $ | 119,771 | (15,148 | ) | (12.6 | %) | |||||||||||||||
Specialty | |||||||||||||||||||||||||||||
Custom Physician(2)(9) | 5,696 | 17,420 | (11,724 | ) | (67.3 | %) | 36,442 | 51,795 | (15,353 | ) | (29.6 | %) | |||||||||||||||||
Hospitals and Facilities(3)(9) | 9,662 | 11,340 | (1,678 | ) | (14.8 | %) | 25,933 | 27,496 | (1,563 | ) | (5.7 | %) | |||||||||||||||||
Senior Care(4)(9) | 480 | 3,625 | (3,145 | ) | (86.8 | %) | 4,104 | 11,784 | (7,680 | ) | (65.2 | %) | |||||||||||||||||
Reinsurance (assumed) | 2,477 | 2,517 | (40 | ) | (1.6 | %) | 7,266 | 7,178 | 88 | 1.2 | % | ||||||||||||||||||
Total Specialty | 18,315 | 34,902 | (16,587 | ) | (47.5 | %) | 73,745 | 98,253 | (24,508 | ) | (24.9 | %) | |||||||||||||||||
Total HCPL | 58,654 | 88,354 | (29,700 | ) | (33.6 | %) | 178,368 | 218,024 | (39,656 | ) | (18.2 | %) | |||||||||||||||||
Small Business Unit(5) | 20,505 | 23,180 | (2,675 | ) | (11.5 | %) | 43,405 | 48,144 | (4,739 | ) | (9.8 | %) | |||||||||||||||||
Tail Coverages(6) | 17,818 | 4,752 | 13,066 | 275.0 | % | 24,007 | 9,181 | 14,826 | 161.5 | % | |||||||||||||||||||
Total Professional Liability | 96,977 | 116,286 | (19,309 | ) | (16.6 | %) | 245,780 | 275,349 | (29,569 | ) | (10.7 | %) | |||||||||||||||||
Medical Technology Liability(7) | 9,885 | 9,937 | (52 | ) | (0.5 | %) | 16,104 | 17,140 | (1,036 | ) | (6.0 | %) | |||||||||||||||||
Other(8) | 203 | 1,678 | (1,475 | ) | (87.9 | %) | 561 | 1,844 | (1,283 | ) | (69.6 | %) | |||||||||||||||||
Total | $ | 107,065 | $ | 127,901 | $ | (20,836 | ) | (16.3 | %) | $ | 262,445 | $ | 294,333 | $ | (31,888 | ) | (10.8 | %) |
(1)Standard Physician premium was our greatest source of premium revenues in both 2021 and 2020 |
(9) This component of gross premiums written includes all other product lines within our Specialty P&C segment. |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||||||||||||
($ in millions) | 2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||||||||
Standard Physician | $ | 1.6 | $ | 1.4 | $ | 0.2 | 14.3 | % | $ | 1.6 | $ | 1.4 | $ | 0.2 | 14.3 | % | |||||||||||||
Custom Physician | — | — | — | nm | 0.1 | 0.2 | (0.1 | ) | (50.0 | %) | |||||||||||||||||||
Hospitals and Facilities | — | — | — | nm | 0.1 | — | 0.1 | nm | |||||||||||||||||||||
Senior Care | 0.2 | 0.2 | — | — | % | 3.8 | 3.7 | 0.1 | 2.7 | % | |||||||||||||||||||
Total | $ | 1.8 | $ | 1.6 | $ | 0.2 | 12.5 | % | $ | 5.6 | $ | 5.3 | $ | 0.3 | 5.7 | % |
Three Months Ended March 31 | |||||||||||||||||||||||||||||||||||||||||||||||
($ in millions) | 2021 | 2020 | Change | ||||||||||||||||||||||||||||||||||||||||||||
Custom Physician | $ | — | $ | 0.1 | $ | (0.1) | nm | ||||||||||||||||||||||||||||||||||||||||
Hospitals and Facilities | — | 0.1 | (0.1) | nm | |||||||||||||||||||||||||||||||||||||||||||
Senior Care | 4.2 | 3.6 | 0.6 | 16.7 | % | ||||||||||||||||||||||||||||||||||||||||||
Tail Coverages | 0.3 | — | 0.3 | nm | |||||||||||||||||||||||||||||||||||||||||||
Total | $ | 4.5 | $ | 3.8 | $ | 0.7 | 18.4 | % |
Three Months Ended June 30 | Six Months Ended June 30 | ||||
2020 | 2020 | ||||
Specialty P&C segment | 9 | % | 11 | % | |
HCPL | |||||
Standard Physician(1) | 12 | % | 12 | % | |
Specialty(1) | 20 | % | 18 | % | |
Total HCPL | 13 | % | 14 | % | |
Small Business Unit | 3 | % | 3 | % | |
Medical Technology Liability(1) | (2 | %) | (3 | %) | |
(1) See Gross Premiums Written section for further explanation of changes in renewal pricing. |
Three Months Ended March 31 | |||||||||||
2021 | |||||||||||
Specialty P&C segment | 6 | % | |||||||||
HCPL | |||||||||||
Standard Physician(1) | 6 | % | |||||||||
Specialty(1) | 8 | % | |||||||||
Total HCPL | 6 | % | |||||||||
Small Business Unit(1) | 4 | % | |||||||||
Medical Technology Liability(1) | (2 | %) | |||||||||
(1) See Gross Premiums Written section for further explanation of changes in renewal pricing. |
Three Months Ended March 31 | |||||||||||||||||||||||
(In millions) | 2021 | 2020 | |||||||||||||||||||||
HCPL | |||||||||||||||||||||||
Standard Physician | $ | 0.6 | $ | 0.6 | |||||||||||||||||||
Specialty | 8.7 | 1.9 | |||||||||||||||||||||
Total HCPL | 9.3 | 2.5 | |||||||||||||||||||||
Small Business Unit | 1.0 | 1.2 | |||||||||||||||||||||
Medical Technology Liability | 1.8 | 0.7 | |||||||||||||||||||||
Total | $ | 12.1 | $ | 4.4 |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
HCPL | |||||||||||||||
Standard Physician | $ | 0.4 | $ | 1.2 | $ | 1.0 | $ | 6.3 | |||||||
Specialty | 1.1 | 4.4 | 3.0 | 18.2 | |||||||||||
Total HCPL | 1.5 | 5.6 | 4.0 | 24.5 | |||||||||||
Small Business Unit | 1.1 | 1.2 | 2.3 | 2.3 | |||||||||||
Medical Technology Liability | 2.0 | 1.3 | 2.7 | 2.2 | |||||||||||
Total | $ | 4.6 | $ | 8.1 | $ | 9.0 | $ | 29.0 |
Three Months Ended March 31 | |||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
Specialty P&C segment | 77 | % | 81 | % | |||||||||||||||||||
HCPL | |||||||||||||||||||||||
Standard Physician | 86 | % | 80 | % | |||||||||||||||||||
Specialty(1) | 56 | % | 82 | % | |||||||||||||||||||
Total HCPL | 73 | % | 81 | % | |||||||||||||||||||
Small Business Unit | 91 | % | 85 | % | |||||||||||||||||||
Medical Technology Liability | 87 | % | 78 | % | |||||||||||||||||||
(1) See Gross Premiums Written section for further explanation of retention decline in 2021. |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||
Specialty P&C segment | 71 | % | 87 | % | 77 | % | 88 | % | |||
HCPL | |||||||||||
Standard Physician(1) | 82 | % | 87 | % | 81 | % | 88 | % | |||
Specialty(1) | 29 | % | 87 | % | 60 | % | 87 | % | |||
Total HCPL | 63 | % | 87 | % | 73 | % | 88 | % | |||
Small Business Unit | 91 | % | 91 | % | 88 | % | 91 | % | |||
Medical Technology Liability(1) | 88 | % | 89 | % | 84 | % | 85 | % | |||
(1) See Gross Premiums Written section for further explanation of retention decline in 2020. |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||||||
($ in thousands) | 2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||
Excess of loss reinsurance arrangements (1) | $ | 8,111 | $ | 8,661 | $ | (550 | ) | (6.4 | %) | $ | 16,728 | $ | 17,982 | $ | (1,254 | ) | (7.0 | %) | |||||
Other shared risk arrangements (2) | 4,314 | 6,135 | (1,821 | ) | (29.7 | %) | 15,178 | 17,853 | (2,675 | ) | (15.0 | %) | |||||||||||
Premium ceded to SPCs (3) | 1,298 | 1,152 | 146 | 12.7 | % | 5,082 | 4,890 | 192 | 3.9 | % | |||||||||||||
Other ceded premiums written | 660 | 700 | (40 | ) | (5.7 | %) | 1,520 | 1,699 | (179 | ) | (10.5 | %) | |||||||||||
Total ceded premiums written | $ | 14,383 | $ | 16,648 | $ | (2,265 | ) | (13.6 | %) | $ | 38,508 | $ | 42,424 | $ | (3,916 | ) | (9.2 | %) |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||
2020 | 2019 | Change | 2020 | 2019 | Change | ||||||
Ceded premiums ratio | 13.4% | 13.0% | 0.4 pts | 14.7% | 14.4% | 0.3 pts |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||||||||||||
($ in thousands) | 2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||||||||
Gross premiums earned | $ | 145,547 | $ | 145,169 | $ | 378 | 0.3 | % | $ | 284,570 | $ | 288,186 | $ | (3,616 | ) | (1.3 | %) | ||||||||||||
Less: Ceded premiums earned | 18,451 | 19,158 | (707 | ) | (3.7 | %) | 37,114 | 38,107 | (993 | ) | (2.6 | %) | |||||||||||||||||
Net premiums earned | $ | 127,096 | $ | 126,011 | $ | 1,085 | 0.9 | % | $ | 247,456 | $ | 250,079 | $ | (2,623 | ) | (1.0 | %) |
Net Loss Ratios (1) | |||||||||||
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||
2020 | 2019 | Change | 2020 | 2019 | Change | ||||||
Calendar year net loss ratio | 125.5% | 84.1% | 41.4 pts | 109.3% | 85.4% | 23.9 pts | |||||
Less impact of prior accident years on the net loss ratio | (12.2%) | (9.9%) | (2.3 pts) | (7.2%) | (8.2%) | 1.0 pts | |||||
Current accident year net loss ratio (2) | 137.7% | 94.0% | 43.7 pts | 116.5% | 93.6% | 22.9 pts |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||||||||||||
($ in thousands) | 2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||||||||
DPAC amortization | $ | 13,635 | $ | 14,444 | $ | (809 | ) | (5.6 | %) | $ | 27,551 | $ | 28,535 | $ | (984 | ) | (3.4 | %) | |||||||||||
Management fees | 1,258 | 1,474 | (216 | ) | (14.7 | %) | 3,090 | 3,440 | (350 | ) | (10.2 | %) | |||||||||||||||||
Other underwriting and operating expenses | 10,341 | 13,945 | (3,604 | ) | (25.8 | %) | 24,177 | 27,505 | (3,328 | ) | (12.1 | %) | |||||||||||||||||
Total | $ | 25,234 | $ | 29,863 | $ | (4,629 | ) | (15.5 | %) | $ | 54,818 | $ | 59,480 | $ | (4,662 | ) | (7.8 | %) |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||
2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||
Underwriting expense ratio | 19.9 | % | 23.7 | % | (3.8 | pts) | 22.2 | % | 23.8 | % | (1.6 | pts) |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||||||
($ in thousands) | 2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||
Net premiums written | $ | 40,301 | $ | 45,031 | $ | (4,730 | ) | (10.5 | %) | $ | 90,613 | $ | 96,438 | $ | (5,825 | ) | (6.0 | %) | |||||
Net premiums earned | $ | 42,406 | $ | 46,574 | $ | (4,168 | ) | (8.9 | %) | $ | 86,921 | $ | 92,512 | $ | (5,591 | ) | (6.0 | %) | |||||
Other income | 519 | 725 | (206 | ) | (28.4 | %) | 1,276 | 1,454 | (178 | ) | (12.2 | %) | |||||||||||
Net losses and loss adjustment expenses | (28,425 | ) | (30,625 | ) | 2,200 | (7.2 | %) | (58,192 | ) | (61,068 | ) | 2,876 | (4.7 | %) | |||||||||
Underwriting, policy acquisition and operating expenses | (13,456 | ) | (14,368 | ) | 912 | (6.3 | %) | (27,622 | ) | (28,559 | ) | 937 | (3.3 | %) | |||||||||
Segment operating results | $ | 1,044 | $ | 2,306 | $ | (1,262 | ) | (54.7 | %) | $ | 2,383 | $ | 4,339 | $ | (1,956 | ) | (45.1 | %) | |||||
Net loss ratio | 67.0% | 65.8% | 1.2 pts | 66.9 | % | 66.0 | % | 0.9 pts | |||||||||||||||
Underwriting expense ratio | 31.7% | 30.8% | 0.9 pts | 31.8 | % | 30.9 | % | 0.9 pts |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||||||
($ in thousands) | 2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||
Gross premiums written | $ | 57,208 | $ | 64,218 | $ | (7,010 | ) | (10.9 | %) | $ | 136,451 | $ | 153,572 | $ | (17,121 | ) | (11.1 | %) | |||||
Less: Ceded premiums written | 16,907 | 19,187 | (2,280 | ) | (11.9 | %) | 45,838 | 57,134 | (11,296 | ) | (19.8 | %) | |||||||||||
Net premiums written | $ | 40,301 | $ | 45,031 | $ | (4,730 | ) | (10.5 | %) | $ | 90,613 | $ | 96,438 | $ | (5,825 | ) | (6.0 | %) |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||||||||||||
($ in thousands) | 2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||||||||
Traditional business: | |||||||||||||||||||||||||||||
Guaranteed cost | $ | 35,049 | $ | 37,559 | $ | (2,510 | ) | (6.7 | %) | $ | 77,111 | $ | 80,296 | $ | (3,185 | ) | (4.0 | %) | |||||||||||
Policyholder dividend | 5,144 | 5,068 | 76 | 1.5 | % | 13,176 | 12,254 | 922 | 7.5 | % | |||||||||||||||||||
Deductible | 552 | 831 | (279 | ) | (33.6 | %) | 2,478 | 3,077 | (599 | ) | (19.5 | %) | |||||||||||||||||
Retrospective* | 995 | 2,274 | (1,279 | ) | (56.2 | %) | 1,338 | 3,037 | (1,699 | ) | (55.9 | %) | |||||||||||||||||
Other | 1,687 | 2,775 | (1,088 | ) | (39.2 | %) | 3,468 | 4,602 | (1,134 | ) | (24.6 | %) | |||||||||||||||||
Alternative market business | 13,781 | 15,711 | (1,930 | ) | (12.3 | %) | 39,740 | 50,306 | (10,566 | ) | (21.0 | %) | |||||||||||||||||
Change in EBUB estimate | — | — | — | nm | (860 | ) | — | (860 | ) | nm | |||||||||||||||||||
Total | $ | 57,208 | $ | 64,218 | $ | (7,010 | ) | (10.9 | %) | $ | 136,451 | $ | 153,572 | $ | (17,121 | ) | (11.1 | %) |
Three Months Ended June 30 | |||||||||||||||||||
2020 | 2019 | ||||||||||||||||||
($ in millions) | Traditional Business | Alternative Market Business | Segment Results | Traditional Business | Alternative Market Business | Segment Results | |||||||||||||
New business | $ | 5.8 | $ | 0.7 | $ | 6.5 | $ | 5.4 | $ | 1.2 | $ | 6.6 | |||||||
Audit premium (excluding EBUB) | $ | 0.1 | $ | 0.1 | $ | 0.2 | $ | 0.7 | $ | 0.5 | $ | 1.2 | |||||||
Retention rate (1) | 87 | % | 87 | % | 87 | % | 79 | % | 85 | % | 81 | % | |||||||
Change in renewal pricing (2) | (4 | %) | (5 | %) | (4 | %) | (3 | %) | (7 | %) | (4 | %) | |||||||
Six Months Ended June 30 | |||||||||||||||||||
2020 | 2019 | ||||||||||||||||||
($ in millions) | Traditional Business | Alternative Market Business | Segment Results | Traditional Business | Alternative Market Business | Segment Results | |||||||||||||
New business | $ | 13.8 | $ | 1.8 | $ | 15.6 | $ | 11.8 | $ | 2.3 | $ | 14.1 | |||||||
Audit premium (excluding EBUB) | $ | 1.3 | $ | (0.2 | ) | $ | 1.1 | $ | 0.9 | $ | 1.0 | $ | 1.9 | ||||||
Retention rate (1) | 86 | % | 81 | % | 84 | % | 81 | % | 93 | % | 84 | % | |||||||
Change in renewal pricing (2) | (4 | %) | (5 | %) | (4 | %) | (3 | %) | (4 | %) | (3 | %) | |||||||
(1) We calculate our workers' compensation retention rate as annualized expiring renewed premium divided by all annualized expiring premium subject to renewal. Our retention rate can be impacted by various factors, including price or other competitive issues, insureds being acquired, or a decision not to renew based on our underwriting evaluation. | |||||||||||||||||||
(2) The pricing of our business includes an assessment of the underlying policy exposure and market conditions. We continue to base our pricing on expected losses, as indicated by our historical loss data. |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||||||||||||
($ in thousands) | 2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||||||||
Premiums ceded to SPCs | $ | 13,698 | $ | 15,758 | $ | (2,060 | ) | (13.1 | %) | $ | 37,053 | $ | 47,903 | $ | (10,850 | ) | (22.6 | %) | |||||||||||
Premiums ceded to external reinsurers | 3,110 | 3,373 | (263 | ) | (7.8 | %) | 6,051 | 6,817 | (766 | ) | (11.2 | %) | |||||||||||||||||
Premiums ceded to unaffiliated captive insurers | 83 | (47 | ) | 130 | 276.6 | % | 2,687 | 2,403 | 284 | 11.8 | % | ||||||||||||||||||
Change in return premium estimate under external reinsurance | 16 | 103 | (87 | ) | (84.5 | %) | 47 | 11 | 36 | 327.3 | % | ||||||||||||||||||
Total ceded premiums written | $ | 16,907 | $ | 19,187 | $ | (2,280 | ) | (11.9 | %) | $ | 45,838 | $ | 57,134 | $ | (11,296 | ) | (19.8 | %) |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||
2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||
Ceded premiums ratio, as reported | 33.1 | % | 34.3 | % | (1.2 | pts) | 32.6 | % | 34.5 | % | (1.9 | pts) | |||||
Less the effect of: | |||||||||||||||||
Premiums ceded to SPCs (100%) | 24.9 | % | 26.2 | % | (1.3 | pts) | 24.8 | % | 26.6 | % | (1.8 | pts) | |||||
Retrospective premium adjustments | 0.2 | % | 0.2 | % | — | 0.1 | % | 0.1 | % | — | |||||||
Premiums ceded to unaffiliated captive insurers (100%) | 1.4 | % | 1.1 | % | 0.3 | pts | 1.3 | % | 1.0 | % | 0.3 | pts | |||||
Change in EBUB | — | % | — | % | — | 0.1 | % | — | % | 0.1 | pts | ||||||
Return premium estimated under external reinsurance | — | % | 0.2 | % | (0.2 | pts) | — | % | — | % | — | ||||||
Assumed premiums earned (not ceded to external reinsurers) | (0.2 | %) | (0.3 | %) | 0.1 | pts | (0.2 | %) | (0.3 | %) | 0.1 | pts | |||||
Ceded premiums ratio (related to external reinsurance), less the effects of above | 6.8 | % | 6.9 | % | (0.1 | pts) | 6.5 | % | 7.1 | % | (0.6 | pts) |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||||||
($ in thousands) | 2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||
Gross premiums earned | $ | 63,430 | $ | 70,882 | $ | (7,452 | ) | (10.5 | %) | $ | 129,042 | $ | 141,158 | $ | (12,116 | ) | (8.6 | %) | |||||
Less: Ceded premiums earned | 21,024 | 24,308 | (3,284 | ) | (13.5 | %) | 42,121 | 48,646 | (6,525 | ) | (13.4 | %) | |||||||||||
Net premiums earned | $ | 42,406 | $ | 46,574 | $ | (4,168 | ) | (8.9 | %) | $ | 86,921 | $ | 92,512 | $ | (5,591 | ) | (6.0 | %) |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||
2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||
Calendar year net loss ratio | 67.0 | % | 65.8 | % | 1.2 | pts | 66.9 | % | 66.0 | % | 0.9 | pts | |||||
Less impact of prior accident years on the net loss ratio | (3.6 | %) | (2.4 | %) | (1.2 | pts) | (3.5 | %) | (2.2 | %) | (1.3 | pts) | |||||
Current accident year net loss ratio | 70.6 | % | 68.2 | % | 2.4 | pts | 70.4 | % | 68.2 | % | 2.2 | pts |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||||||||||||
($ in thousands) | 2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||||||||
DPAC amortization | $ | 7,287 | $ | 8,601 | $ | (1,314 | ) | (15.3 | %) | $ | 15,137 | $ | 17,051 | $ | (1,914 | ) | (11.2 | %) | |||||||||||
Management fees | 429 | 482 | (53 | ) | (11.0 | %) | 1,030 | 1,152 | (122 | ) | (10.6 | %) | |||||||||||||||||
Other underwriting and operating expenses | 9,302 | 9,798 | (496 | ) | (5.1 | %) | 19,337 | 19,181 | 156 | 0.8 | % | ||||||||||||||||||
SPC ceding commission offset | (3,562 | ) | (4,513 | ) | 951 | (21.1 | %) | (7,882 | ) | (8,825 | ) | 943 | (10.7 | %) | |||||||||||||||
Total | $ | 13,456 | $ | 14,368 | $ | (912 | ) | (6.3 | %) | $ | 27,622 | $ | 28,559 | $ | (937 | ) | (3.3 | %) |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||
2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||
Underwriting expense ratio, as reported | 31.7 | % | 30.8 | % | 0.9 | pts | 31.8 | % | 30.9 | % | 0.9 | pts | |||||
Less estimated ratio increase (decrease) attributable to: | |||||||||||||||||
Impact of ceding commissions received from SPCs | 3.5 | % | 2.8 | % | 0.7 | pts | 2.9 | % | 3.0 | % | (0.1 | pts) | |||||
Retrospective premium adjustment | 0.7 | % | 0.5 | % | 0.2 | pts | 0.4 | % | 0.3 | % | 0.1 | pts | |||||
Impact of audit premium | (0.1 | %) | (0.3 | %) | 0.2 | pts | (0.1 | %) | (0.2 | %) | 0.1 | pts | |||||
Underwriting expense ratio, less listed effects | 27.6 | % | 27.8 | % | (0.2 | pts) | 28.6 | % | 27.8 | % | 0.8 | pts |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||||||
($ in thousands) | 2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||
Net premiums written | $ | 13,245 | $ | 14,937 | $ | (1,692 | ) | (11.3 | %) | $ | 37,235 | $ | 47,618 | $ | (10,383 | ) | (21.8 | %) | |||||
Net premiums earned | $ | 16,748 | $ | 19,284 | $ | (2,536 | ) | (13.2 | %) | $ | 33,728 | $ | 38,787 | $ | (5,059 | ) | (13.0 | %) | |||||
Net investment income | 305 | 368 | (63 | ) | (17.1 | %) | 559 | 815 | (256 | ) | (31.4 | %) | |||||||||||
Net realized gains (losses) | 2,606 | (94 | ) | 2,700 | (2,872.3 | %) | (601 | ) | 2,047 | (2,648 | ) | (129.4 | %) | ||||||||||
Other income | 55 | 135 | (80 | ) | (59.3 | %) | 191 | 221 | (30 | ) | (13.6 | %) | |||||||||||
Net losses and loss adjustment expenses | (7,680 | ) | (19,973 | ) | 12,293 | (61.5 | %) | (17,032 | ) | (30,719 | ) | 13,687 | (44.6 | %) | |||||||||
Underwriting, policy acquisition and operating expenses | (5,360 | ) | (5,905 | ) | 545 | (9.2 | %) | (10,439 | ) | (11,138 | ) | 699 | (6.3 | %) | |||||||||
SPC U.S. federal income tax expense(1) | (480 | ) | — | (480 | ) | nm | (702 | ) | — | (702 | ) | nm | |||||||||||
SPC net operating results | 6,194 | (6,185 | ) | 12,379 | (200.1 | %) | 5,704 | 13 | 5,691 | 43,776.9 | % | ||||||||||||
SPC dividend (expense) income (2) | (4,642 | ) | 7,033 | (11,675 | ) | (166.0 | %) | (4,134 | ) | 2,246 | (6,380 | ) | (284.1 | %) | |||||||||
Segment operating results (3) | $ | 1,552 | $ | 848 | $ | 704 | 83.0 | % | $ | 1,570 | $ | 2,259 | $ | (689 | ) | (30.5 | %) | ||||||
Net loss ratio | 45.9 | % | 103.6 | % | (57.7 pts) | 50.5 | % | 79.2 | % | (28.7 pts) | |||||||||||||
Underwriting expense ratio | 32.0 | % | 30.6 | % | 1.4 pts | 31.0 | % | 28.7 | % | 2.3 pts | |||||||||||||
(1) Represents the provision for U.S. federal income taxes for SPCs at Inova Re, which have elected to be taxed as a U.S. corporation under Section 953(d) of the Internal Revenue Code. U.S. federal income taxes are included in the total SPC net operating results and are paid by the individual SPCs. | |||||||||||||||||||||||
(2) Represents the net operating (profit) loss due to external cell participants. | |||||||||||||||||||||||
(3) Represents our share of the net operating profit (loss) of the SPCs in which we participate. |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||||||||||||
($ in thousands) | 2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||||||||
Gross premiums written | $ | 14,996 | $ | 16,910 | $ | (1,914 | ) | (11.3 | %) | $ | 42,135 | $ | 53,274 | $ | (11,139 | ) | (20.9 | %) | |||||||||||
Less: Ceded premiums written | 1,751 | 1,973 | (222 | ) | (11.3 | %) | 4,900 | 5,656 | (756 | ) | (13.4 | %) | |||||||||||||||||
Net premiums written | $ | 13,245 | $ | 14,937 | $ | (1,692 | ) | (11.3 | %) | $ | 37,235 | $ | 47,618 | $ | (10,383 | ) | (21.8 | %) |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||||||||||||
($ in thousands) | 2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||||||||
Workers' compensation | $ | 13,698 | $ | 15,758 | $ | (2,060 | ) | (13.1 | %) | $ | 37,053 | $ | 47,903 | $ | (10,850 | ) | (22.6 | %) | |||||||||||
Healthcare professional liability | 1,298 | 1,152 | 146 | 12.7 | % | 5,082 | 4,890 | 192 | 3.9 | % | |||||||||||||||||||
Other | — | — | — | nm | — | 481 | (481 | ) | nm | ||||||||||||||||||||
Gross Premiums Written | $ | 14,996 | $ | 16,910 | $ | (1,914 | ) | (11.3 | %) | $ | 42,135 | $ | 53,274 | $ | (11,139 | ) | (20.9 | %) |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||
($ in millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
New business | $ | 0.7 | $ | 1.2 | $ | 1.8 | $ | 2.3 | |||||||
Audit premium (including EBUB) | $ | 0.1 | $ | 0.5 | $ | (0.2 | ) | $ | 1.0 | ||||||
Retention rate (1) | 87 | % | 85 | % | 81 | % | 93 | % | |||||||
Change in renewal pricing (2) | (5 | %) | (7 | %) | (5 | %) | (4 | %) | |||||||
(1) We calculate our workers' compensation retention rate as annualized expiring renewed premium divided by all annualized expiring premium subject to renewal. Our retention rate can be impacted by various factors, including price or other competitive issues, insureds being acquired, or a decision not to renew based on our underwriting evaluation. | |||||||||||||||
(2) The pricing of our business includes an assessment of the underlying policy exposure and market conditions. We continue to base our pricing on expected losses, as indicated by our historical loss data. |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||||||
($ in thousands) | 2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||
Ceded premiums written | $ | 1,751 | $ | 1,973 | $ | (222 | ) | (11.3 | %) | $ | 4,900 | $ | 5,656 | $ | (756 | ) | (13.4 | %) |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||
2020 | 2019 | Change | 2020 | 2019 | Change | ||||||
Ceded premiums ratio | 12.8% | 12.5% | 0.3 pts | 13.2% | 11.8% | 1.4 pts |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||||||
($ in thousands) | 2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||
Gross premiums earned | $ | 18,912 | $ | 21,698 | $ | (2,786 | ) | (12.8 | %) | $ | 38,102 | $ | 43,638 | $ | (5,536 | ) | (12.7 | %) | |||||
Less: Ceded premiums earned | 2,164 | 2,414 | (250 | ) | (10.4 | %) | 4,374 | 4,851 | (477 | ) | (9.8 | %) | |||||||||||
Net premiums earned | $ | 16,748 | $ | 19,284 | $ | (2,536 | ) | (13.2 | %) | $ | 33,728 | $ | 38,787 | $ | (5,059 | ) | (13.0 | %) |
Three Months Ended June 30 | ||||||||||||||
2020 | 2019 | Change | ||||||||||||
As reported | As reported | E&O Reserve Impact | Adjusted | As reported | Adjusted | |||||||||
Calendar year net loss ratio | 45.9 | % | 103.6 | % | 51.6 | pts | 52.0 | % | (57.7 | pts) | (6.1 | pts) | ||
Less impact of prior accident years on the net loss ratio | (11.1 | %) | (11.6 | %) | 0.2 | pts | (11.8 | %) | 0.5 | pts | 0.7 | pts | ||
Current accident year net loss ratio | 57.0 | % | 115.2 | % | 51.4 | pts | 63.8 | % | (58.2 | pts) | (6.8 | pts) | ||
Six Months Ended June 30 | ||||||||||||||
2020 | 2019 | Change | ||||||||||||
As reported | As reported | E&O Reserve Impact | Adjusted | As reported | Adjusted | |||||||||
Calendar year net loss ratio | 50.5 | % | 79.2 | % | 25.5 | pts | 53.7 | % | (28.7 | pts) | (3.2 | pts) | ||
Less impact of prior accident years on the net loss ratio | (10.9 | %) | (11.6 | %) | 0.2 | pts | (11.8 | %) | 0.7 | pts | 0.9 | pts | ||
Current accident year net loss ratio | 61.4 | % | 90.8 | % | 25.3 | pts | 65.5 | % | (29.4 | pts) | (4.1 | pts) |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||||||||||||
($ in thousands) | 2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||||||||
DPAC amortization | $ | 4,938 | $ | 5,516 | $ | (578 | ) | (10.5 | %) | $ | 10,073 | $ | 10,666 | $ | (593 | ) | (5.6 | %) | |||||||||||
Other underwriting and operating expenses | 422 | 389 | 33 | 8.5 | % | 366 | 472 | (106 | ) | (22.5 | %) | ||||||||||||||||||
Total | $ | 5,360 | $ | 5,905 | $ | (545 | ) | (9.2 | %) | $ | 10,439 | $ | 11,138 | $ | (699 | ) | (6.3 | %) |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||
2020 | 2019 | Change | 2020 | 2019 | Change | ||||||
Underwriting expense ratio, as reported | 32.0% | 30.6% | 1.4 pts | 31.0% | 28.7% | 2.3 pts | |||||
Less | |||||||||||
Impact of audit premium on expense ratio | (0.2%) | (0.8%) | 0.6 pts | 0.3% | (0.7%) | 1.0 pts | |||||
Underwriting expense ratio, excluding the effect of audit premium | 32.2% | 31.4% | 0.8 pts | 30.7% | 29.4% | 1.3 pts |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||||||
($ in thousands) | 2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||
Gross premiums written | $ | 20,717 | $ | 29,233 | $ | (8,516 | ) | (29.1 | %) | $ | 48,579 | $ | 52,821 | $ | (4,242 | ) | (8.0 | %) | |||||
Ceded premiums written | (7,200 | ) | (10,470 | ) | 3,270 | (31.2 | %) | (8,403 | ) | (13,061 | ) | 4,658 | (35.7 | %) | |||||||||
Net premiums written | $ | 13,517 | $ | 18,763 | $ | (5,246 | ) | (28.0 | %) | $ | 40,176 | $ | 39,760 | $ | 416 | 1.0 | % | ||||||
Net premiums earned | $ | 21,043 | $ | 17,280 | $ | 3,763 | 21.8 | % | $ | 43,044 | $ | 35,920 | $ | 7,124 | 19.8 | % | |||||||
Net investment income | 1,126 | 1,199 | (73 | ) | (6.1 | %) | 2,285 | 2,205 | 80 | 3.6 | % | ||||||||||||
Net realized gains (losses) | 529 | 262 | 267 | 101.9 | % | 611 | 440 | 171 | 38.9 | % | |||||||||||||
Other income (loss) | 40 | 32 | 8 | 25.0 | % | (192 | ) | (114 | ) | (78 | ) | 68.4 | % | ||||||||||
Net losses and loss adjustment expenses | (15,335 | ) | (11,825 | ) | (3,510 | ) | 29.7 | % | (30,116 | ) | (22,733 | ) | (7,383 | ) | 32.5 | % | |||||||
Underwriting, policy acquisition and operating expenses | (7,293 | ) | (7,564 | ) | 271 | (3.6 | %) | (16,434 | ) | (16,033 | ) | (401 | ) | 2.5 | % | ||||||||
Income tax benefit (expense) | — | 304 | (304 | ) | nm | 29 | — | 29 | nm | ||||||||||||||
Segment operating results | $ | 110 | $ | (312 | ) | $ | 422 | 135.3 | % | $ | (773 | ) | $ | (315 | ) | $ | (458 | ) | (145.4 | %) | |||
Net loss ratio | 72.9 | % | 68.4 | % | 4.5 | pts | 70.0 | % | 63.3 | % | 6.7 | pts | |||||||||||
Underwriting expense ratio | 34.7 | % | 43.8 | % | (9.1 | pts) | 38.2 | % | 44.6 | % | (6.4 | pts) |
Three Months Ended March 31 | |||||||||||||||||||||||||||||
($ in thousands) | 2021 | 2020 | Change | ||||||||||||||||||||||||||
Excess of loss reinsurance arrangements (1) | $ | 7,678 | $ | 8,617 | $ | (939) | (10.9 | %) | |||||||||||||||||||||
Other shared risk arrangements (2) | 3,963 | 10,864 | (6,901) | (63.5 | %) | ||||||||||||||||||||||||
Premium ceded to SPCs (3) | 4,469 | 3,784 | 685 | 18.1 | % | ||||||||||||||||||||||||
Other ceded premiums written | 866 | 861 | 5 | 0.6 | % | ||||||||||||||||||||||||
Total ceded premiums written | $ | 16,976 | $ | 24,126 | $ | (7,150) | (29.6 | %) |
Three Months Ended March 31 | |||||||||||||||||||||||||||||||||||
2021 | 2020 | Change | |||||||||||||||||||||||||||||||||
Ceded premiums ratio | 12.3% | 15.5% | (3.2 pts) | ||||||||||||||||||||||||||||||||
Three Months Ended March 31 | |||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | 2021 | 2020 | Change | ||||||||||||||||||||||||||||||||||||||||||||
Gross premiums earned | $ | 132,060 | $ | 139,023 | $ | (6,963) | (5.0 | %) | |||||||||||||||||||||||||||||||||||||||
Less: Ceded premiums earned | 16,447 | 18,664 | (2,217) | (11.9 | %) | ||||||||||||||||||||||||||||||||||||||||||
Net premiums earned | $ | 115,613 | $ | 120,359 | $ | (4,746) | (3.9 | %) |
Net Loss Ratios (1) | |||||||||||||||||||||||||||||||||||||||||
Three Months Ended March 31 | |||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | Change | |||||||||||||||||||||||||||||||||||||||
Calendar year net loss ratio | 87.5 | % | 92.2 | % | (4.7 | pts) | |||||||||||||||||||||||||||||||||||
Less impact of prior accident years on the net loss ratio | (2.3 | %) | (2.0 | %) | (0.3 | pts) | |||||||||||||||||||||||||||||||||||
Current accident year net loss ratio(2) | 89.8 | % | 94.2 | % | (4.4 | pts) | |||||||||||||||||||||||||||||||||||
Three Months Ended March 31 | |||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | 2021 | 2020 | Change | ||||||||||||||||||||||||||||||||||||||||||||
DPAC amortization | $ | 12,396 | $ | 13,916 | $ | (1,520) | (10.9 | %) | |||||||||||||||||||||||||||||||||||||||
Management fees | 1,001 | 1,832 | (831) | (45.4 | %) | ||||||||||||||||||||||||||||||||||||||||||
Other underwriting and operating expenses | 12,949 | 13,837 | (888) | (6.4 | %) | ||||||||||||||||||||||||||||||||||||||||||
Total | $ | 26,346 | $ | 29,585 | $ | (3,239) | (10.9 | %) |
Three Months Ended March 31 | |||||||||||||||||||||||||||||||||||
2021 | 2020 | Change | |||||||||||||||||||||||||||||||||
Underwriting expense ratio | 22.8 | % | 24.6 | % | (1.8 | pts) |
Three Months Ended March 31 | |||||||||||||||||||||||||||||
($ in thousands) | 2021 | 2020 | Change | ||||||||||||||||||||||||||
Net premiums written | $ | 46,884 | $ | 50,312 | $ | (3,428) | (6.8 | %) | |||||||||||||||||||||
Net premiums earned | $ | 40,011 | $ | 44,515 | $ | (4,504) | (10.1 | %) | |||||||||||||||||||||
Other income | 392 | 757 | (365) | (48.2 | %) | ||||||||||||||||||||||||
Net losses and loss adjustment expenses | (26,207) | (29,769) | 3,562 | (12.0 | %) | ||||||||||||||||||||||||
Underwriting, policy acquisition and operating expenses | (12,286) | (14,164) | 1,878 | (13.3 | %) | ||||||||||||||||||||||||
Segment results | $ | 1,910 | $ | 1,339 | $ | 571 | 42.6 | % | |||||||||||||||||||||
Net loss ratio | 65.5% | 66.9% | (1.4 pts) | ||||||||||||||||||||||||||
Underwriting expense ratio | 30.7% | 31.8% | (1.1 pts) |
Three Months Ended March 31 | |||||||||||||||||||||||||||||
($ in thousands) | 2021 | 2020 | Change | ||||||||||||||||||||||||||
Gross premiums written | $ | 72,328 | $ | 79,243 | $ | (6,915) | (8.7 | %) | |||||||||||||||||||||
Less: Ceded premiums written | 25,444 | 28,931 | (3,487) | (12.1 | %) | ||||||||||||||||||||||||
Net premiums written | $ | 46,884 | $ | 50,312 | $ | (3,428) | (6.8 | %) | |||||||||||||||||||||
Three Months Ended March 31 | |||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | 2021 | 2020 | Change | ||||||||||||||||||||||||||||||||||||||||||||
Traditional business: | |||||||||||||||||||||||||||||||||||||||||||||||
Guaranteed cost | $ | 38,196 | $ | 42,062 | $ | (3,866) | (9.2 | %) | |||||||||||||||||||||||||||||||||||||||
Policyholder dividend | 7,520 | 8,031 | (511) | (6.4 | %) | ||||||||||||||||||||||||||||||||||||||||||
Deductible | 2,052 | 1,926 | 126 | 6.5 | % | ||||||||||||||||||||||||||||||||||||||||||
Retrospective(1) | 455 | 344 | 111 | 32.3 | % | ||||||||||||||||||||||||||||||||||||||||||
Other | 1,600 | 1,781 | (181) | (10.2 | %) | ||||||||||||||||||||||||||||||||||||||||||
Alternative market business(2) | 23,715 | 25,959 | (2,244) | (8.6 | %) | ||||||||||||||||||||||||||||||||||||||||||
Change in EBUB estimate | (1,210) | (860) | (350) | 40.7 | % | ||||||||||||||||||||||||||||||||||||||||||
Total | $ | 72,328 | $ | 79,243 | $ | (6,915) | (8.7 | %) |
Three Months Ended March 31 | |||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
($ in millions) | Traditional Business | Alternative Market Business | Segment Results | Traditional Business | Alternative Market Business | Segment Results | |||||||||||||||||
New business | $ | 5.9 | $ | 0.8 | $ | 6.7 | $ | 8.0 | $ | 1.1 | $ | 9.1 | |||||||||||
Audit premium (including EBUB) | $ | (2.2) | $ | 0.2 | $ | (2.0) | $ | 0.3 | $ | (0.3) | $ | — | |||||||||||
Retention rate (1) | 89 | % | 92 | % | 90 | % | 85 | % | 78 | % | 83 | % | |||||||||||
Change in renewal pricing (2) | (2 | %) | (5 | %) | (3 | %) | (4 | %) | (6 | %) | (4 | %) | |||||||||||
(1) We calculate our workers' compensation retention rate as annualized expiring renewed premium divided by all annualized expiring premium subject to renewal. Our retention rate can be impacted by various factors, including price or other competitive issues, insureds being acquired, or a decision not to renew based on our underwriting evaluation. | |||||||||||||||||||||||
(2) The pricing of our business includes an assessment of the underlying policy exposure and market conditions. We continue to base our pricing on expected losses, as indicated by our historical loss data. |
Three Months Ended March 31 | |||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | 2021 | 2020 | Change | ||||||||||||||||||||||||||||||||||||||||||||
Premiums ceded to SPCs | $ | 20,682 | $ | 23,356 | $ | (2,674) | (11.4 | %) | |||||||||||||||||||||||||||||||||||||||
Premiums ceded to external reinsurers | 2,974 | 3,245 | (271) | (8.4 | %) | ||||||||||||||||||||||||||||||||||||||||||
Premiums ceded to unaffiliated captive insurer | 3,033 | 2,603 | 430 | 16.5 | % | ||||||||||||||||||||||||||||||||||||||||||
Change in return premium estimate under external reinsurance | (474) | 31 | (505) | (1,629.0 | %) | ||||||||||||||||||||||||||||||||||||||||||
Estimated revenue share | (771) | (304) | (467) | 153.6 | % | ||||||||||||||||||||||||||||||||||||||||||
Total ceded premiums written | $ | 25,444 | $ | 28,931 | $ | (3,487) | (12.1 | %) |
Three Months Ended March 31 | |||||||||||||||||||||||||||||||||||
2021 | 2020 | Change | |||||||||||||||||||||||||||||||||
Ceded premiums ratio, as reported | 31.8 | % | 32.2 | % | (0.4 | pts) | |||||||||||||||||||||||||||||
Less the effect of: | |||||||||||||||||||||||||||||||||||
Premiums ceded to SPCs (100%) | 25.9 | % | 24.7 | % | 1.2 | pts | |||||||||||||||||||||||||||||
Premiums ceded to unaffiliated captive insurers (100%) | 1.7 | % | 1.2 | % | 0.5 | pts | |||||||||||||||||||||||||||||
Change in EBUB | 0.1 | % | 0.1 | % | — | pts | |||||||||||||||||||||||||||||
Change in return premium estimate under external reinsurance | (1.1 | %) | 0.1 | % | (1.2 | pts) | |||||||||||||||||||||||||||||
Estimated revenue share | (1.8 | %) | (0.6 | %) | (1.2 | pts) | |||||||||||||||||||||||||||||
Assumed premiums earned (not ceded to external reinsurers) | (0.3 | %) | (0.2 | %) | (0.1 | pts) | |||||||||||||||||||||||||||||
Ceded premiums ratio (related to external reinsurance), less the effects of above | 7.3 | % | 6.9 | % | 0.4 | pts |
Three Months Ended March 31 | |||||||||||||||||||||||||||||
($ in thousands) | 2021 | 2020 | Change | ||||||||||||||||||||||||||
Gross premiums earned | $ | 58,632 | $ | 65,613 | $ | (6,981) | (10.6 | %) | |||||||||||||||||||||
Less: Ceded premiums earned | 18,621 | 21,098 | (2,477) | (11.7 | %) | ||||||||||||||||||||||||
Net premiums earned | $ | 40,011 | $ | 44,515 | $ | (4,504) | (10.1 | %) | |||||||||||||||||||||
Three Months Ended March 31 | |||||||||||||||||||||||||||||||||||
2021 | 2020 | Change | |||||||||||||||||||||||||||||||||
Calendar year net loss ratio | 65.5 | % | 66.9 | % | (1.4 | pts) | |||||||||||||||||||||||||||||
Less impact of prior accident years on the net loss ratio | (5.5 | %) | (3.3 | %) | (2.2 | pts) | |||||||||||||||||||||||||||||
Current accident year net loss ratio | 71.0 | % | 70.2 | % | 0.8 | pts |
Three Months Ended March 31 | |||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | 2021 | 2020 | Change | ||||||||||||||||||||||||||||||||||||||||||||
DPAC amortization | $ | 6,741 | $ | 7,850 | $ | (1,109) | (14.1 | %) | |||||||||||||||||||||||||||||||||||||||
Management fees | 542 | 601 | (59) | (9.8 | %) | ||||||||||||||||||||||||||||||||||||||||||
Other underwriting and operating expenses | 8,521 | 10,032 | (1,511) | (15.1 | %) | ||||||||||||||||||||||||||||||||||||||||||
SPC ceding commission offset | (3,518) | (4,319) | 801 | (18.5 | %) | ||||||||||||||||||||||||||||||||||||||||||
Total | $ | 12,286 | $ | 14,164 | $ | (1,878) | (13.3 | %) |
Three Months Ended March 31 | |||||||||||||||||||||||||||||||||||
2021 | 2020 | Change | |||||||||||||||||||||||||||||||||
Underwriting expense ratio, as reported | 30.7 | % | 31.8 | % | (1.1 | pts) | |||||||||||||||||||||||||||||
Less estimated ratio increase (decrease) attributable to: | |||||||||||||||||||||||||||||||||||
Impact of ceding commissions received from SPCs | 2.9 | % | 2.3 | % | 0.6 | pts | |||||||||||||||||||||||||||||
Retrospective premium adjustment | — | % | 0.1 | % | (0.1 | pts) | |||||||||||||||||||||||||||||
Impact of audit premium | 1.0 | % | (0.2 | %) | 1.2 | pts | |||||||||||||||||||||||||||||
Change in return premium estimate under external reinsurance | (0.2 | %) | — | % | (0.2 | pts) | |||||||||||||||||||||||||||||
Estimated revenue share | (0.4 | %) | (0.1 | %) | (0.3 | pts) | |||||||||||||||||||||||||||||
Underwriting expense ratio, less listed effects | 27.4 | % | 29.7 | % | (2.3 | pts) | |||||||||||||||||||||||||||||
Three Months Ended March 31 | |||||||||||||||||||||||||||||
($ in thousands) | 2021 | 2020 | Change | ||||||||||||||||||||||||||
Net premiums written | $ | 22,188 | $ | 23,990 | $ | (1,802) | (7.5 | %) | |||||||||||||||||||||
Net premiums earned | $ | 15,884 | $ | 16,980 | $ | (1,096) | (6.5 | %) | |||||||||||||||||||||
Net investment income | 221 | 254 | (33) | (13.0 | %) | ||||||||||||||||||||||||
Net realized gains (losses) | 987 | (3,207) | 4,194 | 130.8 | % | ||||||||||||||||||||||||
Other income | 1 | 136 | (135) | (99.3 | %) | ||||||||||||||||||||||||
Net losses and loss adjustment expenses | (9,425) | (9,352) | (73) | 0.8 | % | ||||||||||||||||||||||||
Underwriting, policy acquisition and operating expenses | (5,025) | (5,079) | 54 | (1.1 | %) | ||||||||||||||||||||||||
SPC U.S. federal income tax expense (1) | (356) | (222) | (134) | 60.4 | % | ||||||||||||||||||||||||
SPC net results | 2,287 | (490) | 2,777 | 566.7 | % | ||||||||||||||||||||||||
SPC dividend (expense) income (2) | (1,742) | 508 | (2,250) | 442.9 | % | ||||||||||||||||||||||||
Segment results (3) | $ | 545 | $ | 18 | $ | 527 | 2,927.8 | % | |||||||||||||||||||||
Net loss ratio | 59.3 | % | 55.1 | % | 4.2 pts | ||||||||||||||||||||||||
Underwriting expense ratio | 31.6 | % | 29.9 | % | 1.7 pts | ||||||||||||||||||||||||
(1) Represents the provision for U.S. federal income taxes for SPCs at Inova Re, which have elected to be taxed as a U.S. corporation under Section 953(d) of the Internal Revenue Code. U.S. federal income taxes are included in the total SPC net results and are paid by the individual SPCs. | |||||||||||||||||||||||||||||
(2) Represents the net (profit) loss attributable to external cell participants. | |||||||||||||||||||||||||||||
(3) Represents our share of the net profit (loss) of the SPCs in which we participate. |
Three Months Ended March 31 | |||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | 2021 | 2020 | Change | ||||||||||||||||||||||||||||||||||||||||||||
Gross premiums written | $ | 25,151 | $ | 27,140 | $ | (1,989) | (7.3 | %) | |||||||||||||||||||||||||||||||||||||||
Less: Ceded premiums written | 2,963 | 3,150 | (187) | (5.9 | %) | ||||||||||||||||||||||||||||||||||||||||||
Net premiums written | $ | 22,188 | $ | 23,990 | $ | (1,802) | (7.5 | %) |
Three Months Ended March 31 | |||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | 2021 | 2020 | Change | ||||||||||||||||||||||||||||||||||||||||||||
Workers' compensation | $ | 20,682 | $ | 23,356 | $ | (2,674) | (11.4 | %) | |||||||||||||||||||||||||||||||||||||||
Healthcare professional liability | 4,469 | 3,784 | 685 | 18.1 | % | ||||||||||||||||||||||||||||||||||||||||||
Gross Premiums Written | $ | 25,151 | $ | 27,140 | $ | (1,989) | (7.3 | %) |
Three Months Ended March 31 | |||||||||||||||||||||||
($ in millions) | 2021 | 2020 | |||||||||||||||||||||
New business | $ | 0.8 | $ | 1.1 | |||||||||||||||||||
Audit premium (including EBUB) | $ | 0.2 | $ | (0.3) | |||||||||||||||||||
Retention rate (1) | 92 | % | 78 | % | |||||||||||||||||||
Change in renewal pricing (2) | (5 | %) | (6 | %) | |||||||||||||||||||
(1) We calculate our workers' compensation retention rate as annualized expiring renewed premium divided by all annualized expiring premium subject to renewal. Our retention rate can be impacted by various factors, including price or other competitive issues, insureds being acquired, or a decision not to renew based on our underwriting evaluation. | |||||||||||||||||||||||
(2) The pricing of our business includes an assessment of the underlying policy exposure and market conditions. We continue to base our pricing on expected losses, as indicated by our historical loss data. |
Three Months Ended March 31 | |||||||||||||||||||||||||||||
($ in thousands) | 2021 | 2020 | Change | ||||||||||||||||||||||||||
Ceded premiums written | $ | 2,963 | $ | 3,150 | $ | (187) | (5.9 | %) |
Three Months Ended March 31 | |||||||||||||||||||||||||||||||||||
2021 | 2020 | Change | |||||||||||||||||||||||||||||||||
Ceded premiums ratio | 14.3% | 13.5% | 0.8 pts |
Three Months Ended March 31 | |||||||||||||||||||||||||||||
($ in thousands) | 2021 | 2020 | Change | ||||||||||||||||||||||||||
Gross premiums earned | $ | 17,967 | $ | 19,190 | $ | (1,223) | (6.4 | %) | |||||||||||||||||||||
Less: Ceded premiums earned | 2,083 | 2,210 | (127) | (5.7 | %) | ||||||||||||||||||||||||
Net premiums earned | $ | 15,884 | $ | 16,980 | $ | (1,096) | (6.5 | %) |
Three Months Ended March 31 | |||||||||||||||||
2021 | 2020 | Change | |||||||||||||||
Calendar year net loss ratio | 59.3 | % | 55.1 | % | 4.2 | pts | |||||||||||
Less impact of prior accident years on the net loss ratio | (9.6 | %) | (10.6 | %) | 1.0 | pts | |||||||||||
Current accident year net loss ratio | 68.9 | % | 65.7 | % | 3.2 | pts |
Three Months Ended March 31 | |||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | 2021 | 2020 | Change | ||||||||||||||||||||||||||||||||||||||||||||
DPAC amortization | $ | 4,636 | $ | 5,135 | $ | (499) | (9.7 | %) | |||||||||||||||||||||||||||||||||||||||
Other underwriting and operating expenses | 389 | (56) | 445 | 794.6 | % | ||||||||||||||||||||||||||||||||||||||||||
Total | $ | 5,025 | $ | 5,079 | $ | (54) | (1.1 | %) |
Three Months Ended March 31 | |||||||||||||||||||||||||||||||||||
2021 | 2020 | Change | |||||||||||||||||||||||||||||||||
Underwriting expense ratio, as reported | 31.6% | 29.9% | 1.7 pts | ||||||||||||||||||||||||||||||||
Less: impact of audit premium on expense ratio | (0.3%) | 0.6% | (0.9 pts) | ||||||||||||||||||||||||||||||||
Underwriting expense ratio, excluding the effect of audit premium | 31.9% | 29.3% | 2.6 pts | ||||||||||||||||||||||||||||||||
Three Months Ended March 31 | |||||||||||||||||||||||||||||
($ in thousands) | 2021 | 2020 | Change | ||||||||||||||||||||||||||
Net premiums written | $ | 11,885 | $ | 26,660 | $ | (14,775) | (55.4 | %) | |||||||||||||||||||||
Net premiums earned | $ | 15,850 | $ | 22,001 | $ | (6,151) | (28.0 | %) | |||||||||||||||||||||
Net investment income | 729 | 1,159 | (430) | (37.1 | %) | ||||||||||||||||||||||||
Net realized gains (losses) | (115) | 81 | (196) | (242.0 | %) | ||||||||||||||||||||||||
Other income (loss) | 221 | (232) | 453 | 195.3 | % | ||||||||||||||||||||||||
Net losses and loss adjustment expenses | (12,967) | (14,780) | 1,813 | (12.3 | %) | ||||||||||||||||||||||||
Underwriting, policy acquisition and operating expenses | (6,591) | (9,142) | 2,551 | (27.9 | %) | ||||||||||||||||||||||||
Income tax benefit (expense) | — | 29 | (29) | nm | |||||||||||||||||||||||||
Segment results | $ | (2,873) | $ | (884) | $ | (1,989) | (225.0 | %) | |||||||||||||||||||||
Net loss ratio | 81.8 | % | 67.2 | % | 14.6 | pts | |||||||||||||||||||||||
Underwriting expense ratio | 41.6 | % | 41.6 | % | — | pts |
Three Months Ended March 31 | |||||||||||||||||||||||||||||
($ in thousands) | 2021 | 2020 | Change | ||||||||||||||||||||||||||
Gross premiums written | $ | 14,102 | $ | 27,861 | $ | (13,759) | (49.4 | %) | |||||||||||||||||||||
Less: Ceded premiums written | 2,217 | 1,201 | 1,016 | 84.6 | % | ||||||||||||||||||||||||
Net premiums written | $ | 11,885 | $ | 26,660 | $ | (14,775) | (55.4 | %) |
Three Months Ended June 30 | Six Months Ended June 30 | Three Months Ended March 31 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | 2020 | 2019 | Change | 2020 | 2019 | Change | ($ in thousands) | 2021 | 2020 | Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gross premiums earned | $ | 26,336 | $ | 21,997 | $ | 4,339 | 19.7 | % | $ | 54,532 | $ | 45,825 | $ | 8,707 | 19.0 | % | Gross premiums earned | $ | 20,385 | $ | 28,196 | $ | (7,811) | (27.7 | %) | |||||||||||||||||||||||||||||||||||||||||||
Less: Ceded premiums earned | 5,293 | 4,717 | 576 | 12.2 | % | 11,488 | 9,905 | 1,583 | 16.0 | % | Less: Ceded premiums earned | 4,535 | 6,195 | (1,660) | (26.8 | %) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net premiums earned | $ | 21,043 | $ | 17,280 | $ | 3,763 | 21.8 | % | $ | 43,044 | $ | 35,920 | $ | 7,124 | 19.8 | % | Net premiums earned | $ | 15,850 | $ | 22,001 | $ | (6,151) | (28.0 | %) |
Net Loss Ratios | |||||||||||||||||||||||||||||||||||
Three Months Ended March 31 | |||||||||||||||||||||||||||||||||||
2021 | 2020 | Change | |||||||||||||||||||||||||||||||||
Calendar year net loss ratio | 81.8% | 67.2% | 14.6 pts | ||||||||||||||||||||||||||||||||
Less: impact of prior accident years on the net loss ratio | 9.7% | (1.5%) | 11.2 pts | ||||||||||||||||||||||||||||||||
Current accident year net loss ratio | 72.1% | 68.7% | 3.4 pts |
Net Loss Ratios | |||||||||||
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||
2020 | 2019 | Change | 2020 | 2019 | Change | ||||||
Calendar year net loss ratio | 72.9% | 68.4% | 4.5 pts | 70.0% | 63.3% | 6.7 pts | |||||
Less impact of prior accident years on the net loss ratio | 8.2% | (1.3%) | 9.5 pts | 3.2% | 1.5% | 1.7 pts | |||||
Current accident year net loss ratio | 64.7% | 69.7% | (5.0 pts) | 66.8% | 61.8% | 5.0 pts |
Three Months Ended March 31 | |||||||||||||||||||||||||||||
($ in thousands) | 2021 | 2020 | Change | ||||||||||||||||||||||||||
Net investment income | $ | 14,067 | $ | 19,417 | $ | (5,350) | (27.6 | %) | |||||||||||||||||||||
Equity in earnings (loss) of unconsolidated subsidiaries | $ | 6,788 | $ | (1,562) | $ | 8,350 | (534.6 | %) | |||||||||||||||||||||
Net realized gains (losses) | $ | 7,977 | $ | (25,547) | $ | 33,524 | 131.2 | % | |||||||||||||||||||||
Other income | $ | 1,894 | $ | 633 | $ | 1,261 | 199.2 | % | |||||||||||||||||||||
Operating expense | $ | 7,175 | $ | 4,827 | $ | 2,348 | 48.6 | % | |||||||||||||||||||||
Interest expense | $ | 3,212 | $ | 4,129 | $ | (917) | (22.2 | %) | |||||||||||||||||||||
Income tax expense (benefit) | $ | 736 | $ | (12,047) | $ | 12,783 | (106.1 | %) |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||||||
($ in thousands) | 2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||
Net investment income | $ | 16,693 | $ | 21,972 | $ | (5,279 | ) | (24.0 | %) | $ | 36,110 | $ | 43,337 | $ | (7,227 | ) | (16.7 | %) | |||||
Equity in earnings (loss) of unconsolidated subsidiaries | $ | (25,355 | ) | $ | (5,152 | ) | $ | (20,203 | ) | (392.1 | %) | $ | (26,917 | ) | $ | (5,962 | ) | $ | (20,955 | ) | (351.5 | %) | |
Net realized gains (losses) | $ | 16,850 | $ | 9,140 | $ | 7,710 | 84.4 | % | $ | (8,698 | ) | $ | 43,444 | $ | (52,142 | ) | (120.0 | %) | |||||
Other income | $ | 404 | $ | 833 | $ | (429 | ) | (51.5 | %) | $ | 1,038 | $ | 1,738 | $ | (700 | ) | (40.3 | %) | |||||
Operating expense | $ | 7,764 | $ | 5,426 | $ | 2,338 | 43.1 | % | $ | 12,589 | $ | 9,997 | $ | 2,592 | 25.9 | % | |||||||
Interest expense | $ | 3,714 | $ | 4,247 | $ | (533 | ) | (12.6 | %) | $ | 7,844 | $ | 8,576 | $ | (732 | ) | (8.5 | %) | |||||
Income tax expense (benefit) | $ | (38,686 | ) | $ | 27 | $ | (38,713 | ) | (143,381.5 | %) | $ | (50,732 | ) | $ | 6,685 | $ | (57,417 | ) | (858.9 | %) |
Three Months Ended June 30 | Six Months Ended June 30 | Three Months Ended March 31 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | 2020 | 2019 | Change | 2020 | 2019 | Change | ($ in thousands) | 2021 | 2020 | Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed maturities | $ | 16,375 | $ | 16,680 | $ | (305 | ) | (1.8 | %) | $ | 33,306 | $ | 32,832 | $ | 474 | 1.4 | % | Fixed maturities | $ | 14,725 | $ | 16,931 | $ | (2,206) | (13.0 | %) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Equities | 984 | 4,990 | (4,006 | ) | (80.3 | %) | 2,892 | 9,813 | (6,921 | ) | (70.5 | %) | Equities | 694 | 1,909 | (1,215) | (63.6 | %) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-term investments, including Other | 355 | 1,449 | (1,094 | ) | (75.5 | %) | 1,698 | 3,116 | (1,418 | ) | (45.5 | %) | Short-term investments, including Other | 198 | 1,342 | (1,144) | (85.2 | %) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BOLI | 457 | 459 | (2 | ) | (0.4 | %) | 913 | 912 | 1 | 0.1 | % | BOLI | 444 | 456 | (12) | (2.6 | %) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment fees and expenses | (1,478 | ) | (1,606 | ) | 128 | (8.0 | %) | (2,699 | ) | (3,336 | ) | 637 | (19.1 | %) | Investment fees and expenses | (1,994) | (1,221) | (773) | 63.3 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | $ | 16,693 | $ | 21,972 | $ | (5,279 | ) | (24.0 | %) | $ | 36,110 | $ | 43,337 | $ | (7,227 | ) | (16.7 | %) | Net investment income | $ | 14,067 | $ | 19,417 | $ | (5,350) | (27.6 | %) |
Three Months Ended June 30 | Six Months Ended June 30 | Three Months Ended March 31 | ||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2021 | 2020 | |||||||||||||||||||||||||
Average income yield | 3.2% | 3.4% | 3.2% | 3.4% | Average income yield | 2.6% | 3.4% | |||||||||||||||||||||||
Average tax equivalent income yield | 3.2% | 3.4% | 3.3% | 3.4% | Average tax equivalent income yield | 2.7% | 3.4% |
Three Months Ended June 30 | Six Months Ended June 30 | Three Months Ended March 31 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | 2020 | 2019 | Change | 2020 | 2019 | Change | ($ in thousands) | 2021 | 2020 | Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
All other investments, primarily investment fund LPs/LLCs | $ | (18,581 | ) | $ | 317 | $ | (18,898 | ) | (5,961.5 | %) | $ | (15,479 | ) | $ | 4,126 | $ | (19,605 | ) | (475.2 | %) | All other investments, primarily investment fund LPs/LLCs | $ | 9,974 | $ | 3,103 | $ | 6,871 | 221.4 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Tax credit partnerships | (6,774 | ) | (5,469 | ) | (1,305 | ) | 23.9 | % | (11,438 | ) | (10,088 | ) | (1,350 | ) | 13.4 | % | Tax credit partnerships | (3,186) | (4,665) | 1,479 | (31.7 | %) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity in earnings (loss) of unconsolidated subsidiaries | $ | (25,355 | ) | $ | (5,152 | ) | $ | (20,203 | ) | 392.1 | % | $ | (26,917 | ) | $ | (5,962 | ) | $ | (20,955 | ) | 351.5 | % | Equity in earnings (loss) of unconsolidated subsidiaries | $ | 6,788 | $ | (1,562) | $ | 8,350 | 534.6 | % |
Three Months Ended March 31 | |||||||||||||||||||||||
(In millions) | 2021 | 2020 | |||||||||||||||||||||
Tax credits recognized during the period | $ | 3.4 | $ | 4.5 | |||||||||||||||||||
Tax benefit of tax credit partnership operating losses | $ | 0.7 | $ | 1.0 |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Tax credits recognized during the period | $ | 4.5 | $ | 4.7 | $ | 8.9 | $ | 9.3 | |||||||
Tax benefit of tax credit partnership operating losses | $ | 1.4 | $ | 1.1 | $ | 2.4 | $ | 2.1 |
Three Months Ended March 31 | |||||||||||||||||||||||
(In thousands) | 2021 | 2020 | |||||||||||||||||||||
GAAP net investment result: | |||||||||||||||||||||||
Net investment income | $ | 14,067 | $ | 19,417 | |||||||||||||||||||
Equity in earnings (loss) of unconsolidated subsidiaries | 6,788 | (1,562) | |||||||||||||||||||||
GAAP net investment result | $ | 20,855 | $ | 17,855 | |||||||||||||||||||
Pro forma tax-equivalent investment result | $ | 22,883 | $ | 23,871 | |||||||||||||||||||
Reconciliation of pro forma and GAAP tax-equivalent investment result: | |||||||||||||||||||||||
GAAP net investment result | $ | 20,855 | $ | 17,855 | |||||||||||||||||||
Taxable equivalent adjustments, calculated using the 21% federal statutory tax rate | |||||||||||||||||||||||
State and municipal bonds | 115 | 161 | |||||||||||||||||||||
BOLI | 118 | 121 | |||||||||||||||||||||
Dividends received | 3 | 73 | |||||||||||||||||||||
Tax credit partnerships | 1,792 | 5,661 | |||||||||||||||||||||
Pro forma tax-equivalent investment result | $ | 22,883 | $ | 23,871 | |||||||||||||||||||
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||
(In thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||||
GAAP net investment result: | |||||||||||||||
Net investment income | $ | 16,693 | $ | 21,972 | $ | 36,110 | $ | 43,337 | |||||||
Equity in earnings (loss) of unconsolidated subsidiaries | (25,355 | ) | (5,152 | ) | (26,917 | ) | (5,962 | ) | |||||||
GAAP net investment result | $ | (8,662 | ) | $ | 16,820 | $ | 9,193 | $ | 37,375 | ||||||
Pro forma tax-equivalent investment result | $ | (8,376 | ) | $ | 23,195 | $ | 9,835 | $ | 50,097 | ||||||
Reconciliation of pro forma and GAAP tax-equivalent investment result: | |||||||||||||||
GAAP net investment result | $ | (8,662 | ) | $ | 16,820 | $ | 9,193 | $ | 37,375 | ||||||
Taxable equivalent adjustments, calculated using the 21% federal statutory tax rate | |||||||||||||||
State and municipal bonds | 157 | 247 | 318 | 467 | |||||||||||
BOLI | 121 | 122 | 243 | 242 | |||||||||||
Dividends received | 8 | 139 | 81 | 280 | |||||||||||
Tax credit partnerships* | — | 5,867 | — | 11,733 | |||||||||||
Pro forma tax-equivalent investment result | $ | (8,376 | ) | $ | 23,195 | $ | 9,835 | $ | 50,097 | ||||||
*Due to our consolidated pre-tax loss during the three and six months ended June 30, 2020, the tax credits recognized from our tax credit partnership investments were deferred to be utilized in future periods; therefore, there is no tax-equivalent adjustment required as tax credits had no impact on our current tax expense during the three and six months ended June 30, 2020. |
Three Months Ended March 31 | |||||||||||||||||||||||
(In thousands) | 2021 | 2020 | |||||||||||||||||||||
Total impairment losses | |||||||||||||||||||||||
Corporate debt | $ | — | $ | (1,817) | |||||||||||||||||||
Portion of impairment losses recognized in other comprehensive income before taxes: | |||||||||||||||||||||||
Corporate debt | — | 654 | |||||||||||||||||||||
Net impairment losses recognized in earnings | — | (1,163) | |||||||||||||||||||||
Gross realized gains, available-for-sale fixed maturities | 4,163 | 2,279 | |||||||||||||||||||||
Gross realized (losses), available-for-sale fixed maturities | (187) | (1,403) | |||||||||||||||||||||
Net realized gains (losses), equity investments | 4,156 | 15,197 | |||||||||||||||||||||
Net realized gains (losses), other investments | 3,196 | 48 | |||||||||||||||||||||
Change in unrealized holding gains (losses), equity investments | (3,788) | (35,225) | |||||||||||||||||||||
Change in unrealized holding gains (losses), convertible securities, carried at fair value as a part of other investments | (190) | (5,273) | |||||||||||||||||||||
Other | 627 | (7) | |||||||||||||||||||||
Net realized investment gains (losses) | $ | 7,977 | $ | (25,547) |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||
(In thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Total impairment losses | |||||||||||||||
Corporate debt | $ | (582 | ) | $ | — | $ | (2,399 | ) | $ | (136 | ) | ||||
Portion of impairment losses recognized in other comprehensive income before taxes: | |||||||||||||||
Corporate debt | 237 | — | 891 | 87 | |||||||||||
Net impairment losses recognized in earnings | (345 | ) | — | (1,508 | ) | (49 | ) | ||||||||
Gross realized gains, available-for-sale fixed maturities | 4,391 | 966 | 6,670 | 1,226 | |||||||||||
Gross realized (losses), available-for-sale fixed maturities | (466 | ) | (20 | ) | (1,869 | ) | (328 | ) | |||||||
Net realized gains (losses), equity investments | (4,564 | ) | 9,179 | 10,633 | 10,969 | ||||||||||
Net realized gains (losses), other investments | 1,864 | 198 | 1,912 | 577 | |||||||||||
Change in unrealized holding gains (losses), equity investments | 12,053 | (2,294 | ) | (23,172 | ) | 27,931 | |||||||||
Change in unrealized holding gains (losses), convertible securities, carried at fair value as a part of other investments | 3,913 | 1,110 | (1,360 | ) | 3,116 | ||||||||||
Other | 4 | 1 | (4 | ) | 2 | ||||||||||
Net realized investment gains (losses) | $ | 16,850 | $ | 9,140 | $ | (8,698 | ) | $ | 43,444 |
Three Months Ended March 31 | |||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | 2021 | 2020 | Change | ||||||||||||||||||||||||||||||||||||||||||||
Operating expenses | $ | 9,719 | $ | 9,093 | $ | 626 | 6.9 | % | |||||||||||||||||||||||||||||||||||||||
Management fee offset | (2,544) | (4,266) | 1,722 | (40.4 | %) | ||||||||||||||||||||||||||||||||||||||||||
Total | $ | 7,175 | $ | 4,827 | $ | 2,348 | 48.6 | % |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||||||||||||
($ in thousands) | 2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||||||||
Operating expenses | $ | 10,709 | $ | 8,856 | $ | 1,853 | 20.9 | % | $ | 19,799 | $ | 18,027 | $ | 1,772 | 9.8 | % | |||||||||||||
Management fee offset | (2,945 | ) | (3,430 | ) | 485 | (14.1 | %) | (7,210 | ) | (8,030 | ) | 820 | (10.2 | %) | |||||||||||||||
Segment Total | $ | 7,764 | $ | 5,426 | $ | 2,338 | 43.1 | % | $ | 12,589 | $ | 9,997 | $ | 2,592 | 25.9 | % |
Three Months Ended March 31 | |||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | 2021 | 2020 | Change | ||||||||||||||||||||||||||||||||||||||||||||
Senior Notes due 2023 | $ | 3,357 | $ | 3,357 | $ | — | — | % | |||||||||||||||||||||||||||||||||||||||
Revolving Credit Agreement (including fees and amortization) | 214 | 184 | 30 | 16.3 | % | ||||||||||||||||||||||||||||||||||||||||||
Mortgage Loans (including amortization) | 148 | 293 | (145) | (49.5 | %) | ||||||||||||||||||||||||||||||||||||||||||
(Gain)/loss on interest rate cap | (507) | 295 | (802) | (271.9 | %) | ||||||||||||||||||||||||||||||||||||||||||
Interest expense | $ | 3,212 | $ | 4,129 | $ | (917) | (22.2 | %) |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||||||||||||
($ in thousands) | 2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||||||||
Senior Notes due 2023 | $ | 3,357 | $ | 3,357 | $ | — | — | % | $ | 6,714 | $ | 6,714 | $ | — | — | % | |||||||||||||
Revolving Credit Agreement (including fees and amortization) | 83 | 177 | (94 | ) | (53.1 | %) | 267 | 318 | (51 | ) | (16.0 | %) | |||||||||||||||||
Mortgage Loans (including amortization)* | 197 | 351 | (154 | ) | (43.9 | %) | 491 | 745 | (254 | ) | (34.1 | %) | |||||||||||||||||
(Gain)/loss on interest rate cap | 77 | 362 | (285 | ) | (78.7 | %) | 372 | 799 | (427 | ) | (53.4 | %) | |||||||||||||||||
Interest expense | $ | 3,714 | $ | 4,247 | $ | (533 | ) | (12.6 | %) | $ | 7,844 | $ | 8,576 | $ | (732 | ) | (8.5 | %) |
Three Months Ended June 30 | Six Months Ended June 30 | Three Months Ended March 31 | ||||||||||||||||||||||||||||||||||||
(In thousands) | 2020 | 2019 | 2020 | 2019 | (In thousands) | 2021 | 2020 | |||||||||||||||||||||||||||||||
Corporate segment income tax expense (benefit) | $ | (38,686 | ) | $ | 27 | $ | (50,732 | ) | $ | 6,685 | Corporate segment income tax expense (benefit) | $ | 736 | $ | (12,047) | |||||||||||||||||||||||
Lloyd's Syndicates segment income tax expense (benefit) | — | (304 | ) | (29 | ) | — | Lloyd's Syndicates segment income tax expense (benefit) | — | (29) | |||||||||||||||||||||||||||||
Consolidated income tax expense (benefit) | $ | (38,686 | ) | $ | (277 | ) | $ | (50,761 | ) | $ | 6,685 | Consolidated income tax expense (benefit) | $ | 736 | $ | (12,076) |
Three Months Ended March 31 | |||||||||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||||||||
($ in thousands) | Income tax (benefit) expense | Rate Impact | Income tax (benefit) expense | Rate Impact | |||||||||||||||||||||||||
Computed "expected" tax expense (benefit) at statutory rate | $ | 1,779 | 21.0 | % | $ | (7,146) | 21.0 | % | |||||||||||||||||||||
Tax-exempt income (1) | (186) | (2.2 | %) | (280) | 0.9 | % | |||||||||||||||||||||||
Tax credits | (3,374) | (39.8 | %) | (4,471) | 13.1 | % | |||||||||||||||||||||||
Non-U.S. operating results | 603 | 7.1 | % | 186 | (0.5 | %) | |||||||||||||||||||||||
Tax deficiency on share-based compensation | 297 | 3.5 | % | 405 | (1.2 | %) | |||||||||||||||||||||||
Tax rate differential on loss carryback | — | — | % | (1,424) | 4.2 | % | |||||||||||||||||||||||
Change in uncertain tax positions | 57 | 0.7 | % | 712 | (2.1 | %) | |||||||||||||||||||||||
Estimated annual tax rate differential (2) | 2,087 | 24.6 | % | — | — | % | |||||||||||||||||||||||
Other | (527) | (6.2 | %) | (58) | 0.1 | % | |||||||||||||||||||||||
Total income tax expense (benefit) | $ | 736 | 8.7 | % | $ | (12,076) | 35.5 | % |
Three Months Ended June 30 | |||||||||||
2020 | 2019 | ||||||||||
($ in thousands) | Income tax (benefit) expense | Rate Impact | Income tax (benefit) expense | Rate Impact | |||||||
Computed "expected" tax expense (benefit) at statutory rate | $ | (11,925 | ) | 21.0 | % | $ | 2,365 | 21.0 | % | ||
Tax-exempt income (1) | (227 | ) | 0.2 | % | (391 | ) | (3.5 | %) | |||
Tax credits | (4,472 | ) | 7.9 | % | (4,635 | ) | (41.2 | %) | |||
Non-U.S. operating results | (23 | ) | 0.1 | % | (66 | ) | (0.6 | %) | |||
Tax deficiency (excess tax benefit) on share-based compensation | 23 | — | % | (91 | ) | (0.8 | %) | ||||
Tax rate differential on loss carryback | (7,906 | ) | 13.9 | % | — | — | % | ||||
Estimated annual tax rate differential (2) | (14,155 | ) | 24.8 | % | 2,360 | 20.9 | % | ||||
Other | (1 | ) | 0.2 | % | 181 | 1.7 | % | ||||
Total income tax expense (benefit) | $ | (38,686 | ) | 68.1 | % | $ | (277 | ) | (2.5 | %) | |
Six Months Ended June 30 | |||||||||||
2020 | 2019 | ||||||||||
($ in thousands) | Income tax (benefit) expense | Rate Impact | Income tax (benefit) expense | Rate Impact | |||||||
Computed "expected" tax expense (benefit) at statutory rate | $ | (19,071 | ) | 21.0 | % | $ | 10,473 | 21.0 | % | ||
Tax-exempt income (1) | (507 | ) | 0.6 | % | (824 | ) | (1.6 | %) | |||
Tax credits | (8,943 | ) | 9.8 | % | (9,269 | ) | (18.6 | %) | |||
Non-U.S. operating results | 163 | (0.2 | %) | 66 | 0.1 | % | |||||
Tax deficiency (excess tax benefit) on share-based compensation | 428 | (0.5 | %) | 46 | 0.1 | % | |||||
Tax rate differential on loss carryback | (9,330 | ) | 10.3 | % | — | — | % | ||||
Estimated annual tax rate differential (2) | (14,155 | ) | 15.6 | % | 6,301 | 12.6 | % | ||||
Other | 654 | (0.7 | %) | (108 | ) | (0.2 | %) | ||||
Total income tax expense (benefit) | $ | (50,761 | ) | 55.9 | % | $ | 6,685 | 13.4 | % | ||
(1) Includes tax-exempt interest, dividends received deduction and change in cash surrender value of BOLI. | |||||||||||
(2) Represents the tax rate differential between our actual effective tax rate for the six months ended June 30, 2020 and our projected annual effective tax rate as of June 30, 2020. |
Interest Rate Shift in Basis Points | |||||||||||||||||||||||||||||
March 31, 2021 | |||||||||||||||||||||||||||||
($ in millions) | (200) | (100) | Current | 100 | 200 | ||||||||||||||||||||||||
Fair Value: | |||||||||||||||||||||||||||||
Fixed maturities, available-for-sale: | |||||||||||||||||||||||||||||
U.S. Treasury obligations | $ | 110 | $ | 105 | $ | 103 | $ | 101 | $ | 96 | |||||||||||||||||||
U.S. Government-sponsored enterprise obligations | 13 | 12 | 11 | 12 | 11 | ||||||||||||||||||||||||
State and municipal bonds | 368 | 337 | 322 | 309 | 282 | ||||||||||||||||||||||||
Corporate debt | 1,588 | 1,481 | 1,429 | 1,380 | 1,284 | ||||||||||||||||||||||||
Asset-backed securities | 748 | 715 | 698 | 676 | 632 | ||||||||||||||||||||||||
Total fixed maturities, available-for-sale | $ | 2,827 | $ | 2,650 | $ | 2,563 | $ | 2,478 | $ | 2,305 | |||||||||||||||||||
Duration: | |||||||||||||||||||||||||||||
Fixed maturities, available-for-sale: | |||||||||||||||||||||||||||||
U.S. Treasury obligations | 2.36 | 2.32 | 2.27 | 2.23 | 2.18 | ||||||||||||||||||||||||
U.S. Government-sponsored enterprise obligations | 1.55 | 1.92 | 2.82 | 2.97 | 2.93 | ||||||||||||||||||||||||
State and municipal bonds | 4.71 | 4.52 | 4.37 | 4.52 | 4.71 | ||||||||||||||||||||||||
Corporate debt | 3.67 | 3.59 | 3.51 | 3.46 | 3.39 | ||||||||||||||||||||||||
Asset-backed securities | 2.36 | 2.42 | 2.87 | 3.25 | 3.41 | ||||||||||||||||||||||||
Total fixed maturities, available-for-sale | 3.40 | 3.33 | 3.39 | 3.48 | 3.50 |
Interest Rate Shift in Basis Points | |||||||||||||||||||
June 30, 2020 | |||||||||||||||||||
($ in millions) | (200) | (100) | Current | 100 | 200 | ||||||||||||||
Fair Value: | |||||||||||||||||||
Fixed maturities, available-for-sale: | |||||||||||||||||||
U.S. Treasury obligations | $ | 122 | $ | 119 | $ | 115 | $ | 112 | $ | 109 | |||||||||
U.S. Government-sponsored enterprise obligations | 9 | 9 | 9 | 9 | 8 | ||||||||||||||
State and municipal bonds | 318 | 305 | 294 | 283 | 272 | ||||||||||||||
Corporate debt | 1,366 | 1,319 | 1,274 | 1,232 | 1,193 | ||||||||||||||
Asset-backed securities | 594 | 581 | 568 | 554 | 539 | ||||||||||||||
Total fixed maturities, available-for-sale | $ | 2,409 | $ | 2,333 | $ | 2,260 | $ | 2,190 | $ | 2,121 | |||||||||
Duration: | |||||||||||||||||||
Fixed maturities, available-for-sale: | |||||||||||||||||||
U.S. Treasury obligations | 3.00 | 2.92 | 2.85 | 2.79 | 2.72 | ||||||||||||||
U.S. Government-sponsored enterprise obligations | 1.34 | 1.30 | 1.28 | 2.76 | 3.82 | ||||||||||||||
State and municipal bonds | 3.97 | 3.90 | 3.84 | 3.81 | 3.81 | ||||||||||||||
Corporate debt | 3.40 | 3.37 | 3.33 | 3.28 | 3.22 | ||||||||||||||
Asset-backed securities | 2.35 | 2.30 | 2.31 | 2.56 | 2.85 | ||||||||||||||
Total fixed maturities, available-for-sale | 3.19 | 3.14 | 3.11 | 3.14 | 3.18 |
Interest Rate Shift in Basis Points | Interest Rate Shift in Basis Points | |||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2019 | December 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||
($ in millions) | (200) | (100) | Current | 100 | 200 | ($ in millions) | (200) | (100) | Current | 100 | 200 | |||||||||||||||||||||||||||||||||||||
Fair Value: | Fair Value: | |||||||||||||||||||||||||||||||||||||||||||||||
Fixed maturities, available-for-sale: | Fixed maturities, available-for-sale: | |||||||||||||||||||||||||||||||||||||||||||||||
U.S. Treasury obligations | $ | 117 | $ | 113 | $ | 111 | $ | 108 | $ | 105 | U.S. Treasury obligations | $ | 113 | $ | 110 | $ | 107 | $ | 104 | $ | 102 | |||||||||||||||||||||||||||
U.S. Government-sponsored enterprise obligations | 18 | 17 | 17 | 17 | 16 | U.S. Government-sponsored enterprise obligations | 13 | 13 | 12 | 12 | 12 | |||||||||||||||||||||||||||||||||||||
State and municipal bonds | 320 | 308 | 296 | 285 | 274 | State and municipal bonds | 361 | 347 | 333 | 320 | 308 | |||||||||||||||||||||||||||||||||||||
Corporate debt | 1,425 | 1,382 | 1,340 | 1,300 | 1,261 | Corporate debt | 1,427 | 1,377 | 1,329 | 1,284 | 1,241 | |||||||||||||||||||||||||||||||||||||
Asset-backed securities | 548 | 537 | 525 | 511 | 497 | Asset-backed securities | 704 | 690 | 677 | 659 | 639 | |||||||||||||||||||||||||||||||||||||
Total fixed maturities, available-for-sale | $ | 2,428 | $ | 2,357 | $ | 2,289 | $ | 2,221 | $ | 2,153 | Total fixed maturities, available-for-sale | $ | 2,618 | $ | 2,537 | $ | 2,458 | $ | 2,379 | $ | 2,302 | |||||||||||||||||||||||||||
Duration: | Duration: | |||||||||||||||||||||||||||||||||||||||||||||||
Fixed maturities, available-for-sale: | Fixed maturities, available-for-sale: | |||||||||||||||||||||||||||||||||||||||||||||||
U.S. Treasury obligations | 2.78 | 2.71 | 2.64 | 2.58 | 2.52 | U.S. Treasury obligations | 2.65 | 2.60 | 2.56 | 2.51 | 2.46 | |||||||||||||||||||||||||||||||||||||
U.S. Government-sponsored enterprise obligations | 0.75 | 0.71 | 0.98 | 3.07 | 3.87 | U.S. Government-sponsored enterprise obligations | 1.80 | 1.77 | 2.11 | 2.99 | 3.14 | |||||||||||||||||||||||||||||||||||||
State and municipal bonds | 3.91 | 3.84 | 3.82 | 3.89 | 3.93 | State and municipal bonds | 4.07 | 4.01 | 3.96 | 3.91 | 3.88 | |||||||||||||||||||||||||||||||||||||
Corporate debt | 3.10 | 3.04 | 3.02 | 3.01 | 2.99 | Corporate debt | 3.62 | 3.52 | 3.44 | 3.40 | 3.35 | |||||||||||||||||||||||||||||||||||||
Asset-backed securities | 2.12 | 2.21 | 2.46 | 2.73 | 2.87 | Asset-backed securities | 2.29 | 2.23 | 2.34 | 2.86 | 3.21 | |||||||||||||||||||||||||||||||||||||
Total fixed maturities, available-for-sale | 2.95 | 2.92 | 2.96 | 3.04 | 3.07 | Total fixed maturities, available-for-sale | 3.27 | 3.19 | 3.16 | 3.28 | 3.34 |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs* (In thousands) | ||||||||||||||||||||||
— | N/A | — | $109,643 | |||||||||||||||||||||||
— | N/A | — | $109,643 | |||||||||||||||||||||||
— | N/A | — | $109,643 | |||||||||||||||||||||||
Total | — | $— | — |
Exhibit Number | Description | |||||||
Certification of Principal Executive Officer of ProAssurance as required under SEC rule 13a-14(a). | ||||||||
Certification of Principal Financial and Accounting Officer of ProAssurance as required under SEC rule 13a-14(a). | ||||||||
Certification of Principal Executive Officer of ProAssurance as required under SEC Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code, as amended (18 U.S.C. 1350). | ||||||||
Certification of Principal Financial and Accounting Officer of ProAssurance as required under SEC Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code, as amended (18 U.S.C. 1350). | ||||||||
XBRL Instance Document | ||||||||
XBRL Taxonomy Extension Schema Document | ||||||||
XBRL Taxonomy Extension Calculation Linkbase Document | ||||||||
XBRL Taxonomy Extension Definition Linkbase Document | ||||||||
XBRL Taxonomy Extension Labels Linkbase Document | ||||||||
XBRL Taxonomy Extension Presentation Linkbase Document |
PROASSURANCE CORPORATION |
/s/ Dana S. Hendricks | ||
Dana S. Hendricks | ||
Chief Financial Officer | ||
(Duly authorized officer and principal financial officer) |