Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Feb. 20, 2015 | Jun. 30, 2014 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | PROASSURANCE CORP | ||
Entity Central Index Key | 1127703 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | -19 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 55,814,475 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $2,557,238,513 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Investments | ||
Fixed maturities, available for sale, at fair value; amortized cost, $3,055,477 and $3,026,256, respectively | $3,145,027 | $3,118,049 |
Equity securities, trading, at fair value; cost, $283,107 and $203,308, respectively | 314,482 | 253,541 |
Short-term investments | 131,259 | 248,605 |
Business owned life insurance | 56,381 | 54,374 |
Investment in unconsolidated subsidiaries | 276,501 | 214,236 |
Other investments, $28,958 at fair value at December 31, 2014, otherwise at cost or amortized cost | 86,057 | 52,240 |
Total Investments | 4,009,707 | 3,941,045 |
Cash and cash equivalents | 197,040 | 129,383 |
Restricted cash | 0 | 78,000 |
Premiums receivable | 202,528 | 115,403 |
Receivable from reinsurers on paid losses and loss adjustment expenses | 6,494 | 3,231 |
Receivable from reinsurers on unpaid losses and loss adjustment expenses | 237,966 | 247,518 |
Prepaid reinsurance premiums | 32,115 | 21,449 |
Deferred policy acquisition costs | 38,790 | 28,207 |
Deferred tax asset | 0 | 1,757 |
Real estate, net | 39,799 | 41,010 |
Intangible assets | 100,733 | 52,002 |
Goodwill | 210,725 | 161,115 |
Other assets | 93,263 | 329,979 |
Total Assets | 5,169,160 | 5,150,099 |
Policy liabilities and accruals | ||
Reserve for losses and loss adjustment expenses | 2,058,266 | 2,072,822 |
Unearned premiums | 345,828 | 255,463 |
Reinsurance premiums payable | 17,451 | 34,321 |
Total Policy Liabilities | 2,421,545 | 2,362,606 |
Deferred tax liability | 18,818 | 0 |
Other liabilities | 320,853 | 143,079 |
Long-term debt | 250,000 | 250,000 |
Total Liabilities | 3,011,216 | 2,755,685 |
Shareholders’ Equity: | ||
Common shares, par value $0.01 per share, 100,000,000 shares authorized, 62,297,214 and 62,096,787 shares issued, respectively | 623 | 621 |
Additional paid-in capital | 359,577 | 349,894 |
Accumulated other comprehensive income (loss), net of deferred tax expense (benefit) of $31,342 and $32,127, respectively | 58,204 | 59,661 |
Retained earnings | 1,991,704 | 2,015,603 |
Treasury shares, at cost, 5,763,388 shares and 900,281 shares, respectively | -252,164 | -31,365 |
Total Shareholders’ Equity | 2,157,944 | 2,394,414 |
Total Liabilities and Shareholders’ Equity | $5,169,160 | $5,150,099 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ||
Fixed maturities, available for sale, at fair value; amortized cost | $3,055,477 | $3,026,256 |
Equity securities, trading, cost | 283,107 | 203,308 |
Other investments, portion carried at fair value | 28,958 | 0 |
Common shares, par value (USD per share) | $0.01 | $0.01 |
Common shares, shares authorized | 100,000,000 | 100,000,000 |
Common shares, shares issued | 62,297,214 | 62,096,787 |
Deferred tax expense (benefit) on accumulated other comprehensive income (loss) | $31,342 | $32,127 |
Treasury shares, number of shares | 5,763,388 | 900,281 |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Capital (USD $) | 3 Months Ended | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Increase (Decrease) in Stockholders' Equity: | |||||||
Beginning Balance | $2,394,414 | $2,270,580 | $2,394,414 | $2,270,580 | $2,164,453 | ||
Common shares reacquired | -222,360 | -32,454 | |||||
Common shares issued for compensation | 4,200 | 4,085 | 3,594 | ||||
Share-based compensation | 10,056 | 9,242 | 8,639 | ||||
Net effect of restricted and performance shares issued and stock options exercised | -3,010 | -4,066 | -4,453 | ||||
Dividends to shareholders | -220,464 | -64,777 | -192,466 | ||||
Two-for-one stock split effected in the form of a stock dividend | 0 | ||||||
Other comprehensive income (loss) | -1,457 | -85,719 | 15,343 | ||||
Net income | 65,114 | 46,731 | 70,864 | 112,850 | 196,565 | 297,523 | 275,470 |
Ending Balance | 2,157,944 | 2,394,414 | 2,157,944 | 2,394,414 | 2,270,580 | ||
Common Stock | |||||||
Increase (Decrease) in Stockholders' Equity: | |||||||
Beginning Balance | 621 | 619 | 621 | 619 | 346 | ||
Common shares reacquired | 0 | 0 | |||||
Common shares issued for compensation | 0 | 0 | 0 | ||||
Share-based compensation | 0 | 0 | 0 | ||||
Net effect of restricted and performance shares issued and stock options exercised | 2 | 2 | 2 | ||||
Dividends to shareholders | 0 | 0 | 0 | ||||
Two-for-one stock split effected in the form of a stock dividend | 271 | ||||||
Other comprehensive income (loss) | 0 | 0 | 0 | ||||
Net income | 0 | 0 | 0 | ||||
Ending Balance | 623 | 621 | 623 | 621 | 619 | ||
Additional Paid-in Capital | |||||||
Increase (Decrease) in Stockholders' Equity: | |||||||
Beginning Balance | 349,894 | 341,780 | 349,894 | 341,780 | 538,625 | ||
Common shares reacquired | 0 | 0 | |||||
Common shares issued for compensation | 2,639 | 2,940 | 3,041 | ||||
Share-based compensation | 10,056 | 9,242 | 8,639 | ||||
Net effect of restricted and performance shares issued and stock options exercised | -3,012 | -4,068 | -4,455 | ||||
Dividends to shareholders | 0 | 0 | 0 | ||||
Two-for-one stock split effected in the form of a stock dividend | -204,070 | ||||||
Other comprehensive income (loss) | 0 | 0 | 0 | ||||
Net income | 0 | 0 | 0 | ||||
Ending Balance | 359,577 | 349,894 | 359,577 | 349,894 | 341,780 | ||
Accumulated Other Comprehensive Income (Loss) | |||||||
Increase (Decrease) in Stockholders' Equity: | |||||||
Beginning Balance | 59,661 | 145,380 | 59,661 | 145,380 | 130,037 | ||
Common shares reacquired | 0 | 0 | |||||
Common shares issued for compensation | 0 | 0 | |||||
Share-based compensation | 0 | 0 | 0 | ||||
Net effect of restricted and performance shares issued and stock options exercised | 0 | 0 | 0 | ||||
Dividends to shareholders | 0 | 0 | 0 | ||||
Two-for-one stock split effected in the form of a stock dividend | 0 | ||||||
Other comprehensive income (loss) | -1,457 | -85,719 | 15,343 | ||||
Net income | 0 | 0 | 0 | ||||
Ending Balance | 58,204 | 59,661 | 58,204 | 59,661 | 145,380 | ||
Retained Earnings | |||||||
Increase (Decrease) in Stockholders' Equity: | |||||||
Beginning Balance | 2,015,603 | 1,782,857 | 2,015,603 | 1,782,857 | 1,699,853 | ||
Common shares reacquired | 0 | 0 | |||||
Common shares issued for compensation | 0 | 0 | 0 | ||||
Share-based compensation | 0 | 0 | 0 | ||||
Net effect of restricted and performance shares issued and stock options exercised | 0 | 0 | 0 | ||||
Dividends to shareholders | -220,464 | -64,777 | -192,466 | ||||
Other comprehensive income (loss) | 0 | 0 | 0 | ||||
Net income | 196,565 | 297,523 | 275,470 | ||||
Ending Balance | 1,991,704 | 2,015,603 | 1,991,704 | 2,015,603 | 1,782,857 | ||
Treasury Stock | |||||||
Increase (Decrease) in Stockholders' Equity: | |||||||
Beginning Balance | -31,365 | -56 | -31,365 | -56 | -204,408 | ||
Common shares reacquired | -222,360 | -32,454 | |||||
Common shares issued for compensation | 1,561 | 1,145 | 553 | ||||
Share-based compensation | 0 | 0 | 0 | ||||
Net effect of restricted and performance shares issued and stock options exercised | 0 | 0 | 0 | ||||
Dividends to shareholders | 0 | 0 | 0 | ||||
Two-for-one stock split effected in the form of a stock dividend | 203,799 | ||||||
Other comprehensive income (loss) | 0 | 0 | 0 | ||||
Net income | 0 | 0 | 0 | ||||
Ending Balance | ($252,164) | ($31,365) | ($252,164) | ($31,365) | ($56) |
Consolidated_Statements_of_Inc
Consolidated Statements of Income and Comprehensive Income (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues | |||
Net premiums earned | $699,731 | $527,919 | $550,664 |
Net investment income | 125,557 | 129,265 | 136,094 |
Equity in earnings (loss) of unconsolidated subsidiaries | 3,986 | 7,539 | -6,873 |
Net realized investment gains (losses): | |||
Other-than-temporary impairment (OTTI) losses | -1,475 | -71 | -1,566 |
Portion of OTTI losses recognized in (reclassified from) other comprehensive income before taxes | 268 | 0 | -201 |
Net impairment losses recognized in earnings | -1,207 | -71 | -1,767 |
Other net realized investment gains (losses) | 15,861 | 67,975 | 30,630 |
Total net realized investment gains (losses) | 14,654 | 67,904 | 28,863 |
Other income | 8,398 | 7,551 | 7,106 |
Total revenues | 852,326 | 740,178 | 715,854 |
Expenses | |||
Losses and loss adjustment expenses | 379,232 | 243,015 | 161,726 |
Reinsurance recoveries | -16,148 | -18,254 | 18,187 |
Net losses and loss adjustment expenses | 363,084 | 224,761 | 179,913 |
Underwriting, policy acquisition and operating expenses | 211,311 | 147,817 | 135,631 |
Segregated portfolio cells dividend expense | 1,842 | 0 | 0 |
Interest expense | 14,084 | 2,755 | 2,181 |
Loss on extinguishment of debt | 0 | 0 | 2,163 |
Total expenses | 590,321 | 375,333 | 319,888 |
Gain on acquisition | 0 | 32,314 | 0 |
Income before income taxes | 262,005 | 397,159 | 395,966 |
Provision for income taxes | |||
Current expense (benefit) | 58,645 | 74,977 | 82,752 |
Deferred expense (benefit) | 6,795 | 24,659 | 37,744 |
Total income tax expense (benefit) | 65,440 | 99,636 | 120,496 |
Net income | 196,565 | 297,523 | 275,470 |
Other comprehensive income (loss), after tax, net of reclassification adjustments | -1,457 | -85,719 | 15,343 |
Comprehensive income | $195,108 | $211,804 | $290,813 |
Earnings per share: | |||
Basic (USD per share) | $3.32 | $4.82 | $4.49 |
Diluted (USD per share) | $3.30 | $4.80 | $4.46 |
Weighted average number of common shares outstanding: | |||
Basic (in shares) | 59,285 | 61,761 | 61,342 |
Diluted (in shares) | 59,525 | 62,020 | 61,833 |
Cash dividends declared per common share (USD per share) | $3.86 | $1.05 | $3.13 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Operating Activities | |||
Net income | $196,565 | $297,523 | $275,470 |
Adjustments to reconcile income to net cash provided by operating activities: | |||
Amortization, net of accretion | 43,367 | 41,429 | 32,832 |
Depreciation | 6,956 | 4,538 | 4,741 |
Loss (gain) on extinguishment of debt | 0 | 0 | 2,163 |
Gain on acquisition | 0 | -32,314 | 0 |
(Increase) decrease in cash surrender value of business owned life insurance | -2,007 | -1,960 | -2,008 |
Net realized investment gains | -14,654 | -67,904 | -28,863 |
Share-based compensation | 10,056 | 9,242 | 8,639 |
Deferred income taxes | 6,795 | 24,659 | 37,744 |
Policy acquisition costs, net amortization (net deferral) | 10 | -5,820 | 3,448 |
Equity in earnings of unconsolidated subsidiaries, excluding distributions received and tax credit partnership amortization | -10,700 | -17,376 | 450 |
Other | -8,784 | -3,014 | -2,957 |
Other changes in assets and liabilities, excluding effect of business combinations: | |||
Premiums receivable | -15,136 | -6,105 | 16,494 |
Receivable from reinsurers on paid losses and loss adjustment expenses | 3,263 | 2,601 | -342 |
Receivable from reinsurers on unpaid losses and loss adjustment expenses | 27,114 | 15,625 | 58,870 |
Prepaid reinsurance premiums | -5,672 | -849 | -482 |
Other assets | 36,924 | 9,582 | -11,231 |
Reserve for losses and loss adjustment expenses | -167,747 | -179,677 | -218,100 |
Unearned premiums | 10,097 | -1,740 | -21,919 |
Reinsurance premiums payable | -26,377 | -13,269 | -36,583 |
Other liabilities | 5,932 | -36,569 | -27,116 |
Net cash provided (used) by operating activities | 96,002 | 38,602 | 91,250 |
Purchases of: | |||
Fixed maturities, available for sale | -645,114 | -519,161 | -646,198 |
Equity securities, trading | -119,865 | -87,604 | -120,555 |
Other investments | -25,109 | -34,699 | -9,977 |
Funding of tax credit limited partnerships | -8,611 | -63,489 | -35,745 |
Investment in unconsolidated subsidiaries | -52,295 | -19,228 | -11,009 |
Proceeds from sales or maturities of: | |||
Fixed maturities, available for sale | 703,828 | 970,708 | 926,221 |
Equity securities, trading | 134,005 | 123,645 | 54,670 |
Other investments | 19,942 | 2,352 | 1,180 |
Distributions from unconsolidated subsidiaries | 5,428 | 14,632 | 1,387 |
Net sales or maturities (purchases) of short-term investments | 140,411 | -176,092 | 48,565 |
Cash received in (paid in) acquisition | 35,013 | 22,780 | -28,439 |
Deposit made for future acquisition | 0 | -205,244 | -153,700 |
Unsettled security transactions, net change | -2,953 | 205 | 4,852 |
Funds at Lloyd's in support of Syndicate 1729, returned (deposited) | 8,690 | -8,699 | 0 |
(Increase) decrease in restricted cash | 78,000 | -78,000 | 0 |
Other | -4,390 | -9,909 | -4,409 |
Net cash provided (used) by investing activities | 266,980 | -67,803 | 26,843 |
Financing Activities | |||
Proceeds from long-term debt | 0 | 250,000 | 125,000 |
Repayment of long-term debt | 0 | -127,183 | -57,660 |
Repurchase of common stock | -222,360 | -29,089 | 0 |
Excess tax benefit from share-based payment arrangements | 2,702 | 2,128 | 7,022 |
Dividends to shareholders | -71,252 | -46,375 | -200,118 |
Other | -4,415 | -9,448 | -4,186 |
Net cash provided (used) by financing activities | -295,325 | 40,033 | -129,942 |
Increase (decrease) in cash and cash equivalents | 67,657 | 10,832 | -11,849 |
Cash and cash equivalents at beginning of period | 129,383 | 118,551 | 130,400 |
Cash and cash equivalents at end of period | 197,040 | 129,383 | 118,551 |
Supplemental Disclosure of Cash Flow Information | |||
Cash paid during the year for income taxes, net of refunds | 26,061 | 117,107 | 110,278 |
Cash paid during the year for interest | 13,408 | 913 | 2,342 |
Significant non-cash transactions | |||
Deposit transferred as consideration for acquisition | 205,244 | 153,700 | 0 |
Unpaid dividends | 167,744 | 18,532 | 0 |
Other investment interest converted to equity securities | $0 | $0 | $15,742 |
Accounting_Policies
Accounting Policies | 12 Months Ended | |||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||
Accounting Policies | Accounting Policies | |||||||||||||||||||||||||||
Organization and Nature of Business | ||||||||||||||||||||||||||||
ProAssurance Corporation (ProAssurance, PRA or the Company), a Delaware corporation, is an insurance holding company primarily for wholly owned specialty property and casualty insurance entities including an entity that is the majority capital provider to Syndicate 1729 at Lloyd's of London. Risks insured are primarily liability risks located within the United States of America (U.S.). As described in more detail in Note 15, ProAssurance operates in four reportable segments: Specialty Property and Casualty (Specialty P&C), Workers' Compensation, Lloyd's Syndicate, and Corporate. | ||||||||||||||||||||||||||||
Principles of Consolidation | ||||||||||||||||||||||||||||
The accompanying consolidated financial statements include the accounts of ProAssurance Corporation and its wholly-owned subsidiaries. Investments in entities where ProAssurance holds a greater than minor interest but does not hold a controlling interest are accounted for using the equity method. All significant intercompany accounts and transactions are eliminated in consolidation. ProAssurance subsidiaries located in the United Kingdom (U.K.) are reported on a quarter delay due to timing issues regarding the availability of information, except there is no delay related to subsidiary investments managed in the U.S. as that information is available on an earlier schedule. | ||||||||||||||||||||||||||||
Basis of Presentation | ||||||||||||||||||||||||||||
The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and disclosures related to these amounts at the date of the financial statements. Actual results could differ from those estimates. | ||||||||||||||||||||||||||||
Reclassifications | ||||||||||||||||||||||||||||
On January 1, 2014, ProAssurance began reporting unearned ceding commissions as an offset to deferred policy acquisition costs (DPAC) on the Consolidated Balance Sheet, and the December 31, 2013 Consolidated Balance Sheet has been conformed to the current presentation. Previously, unearned ceding commissions ($0.8 million at December 31, 2013) were reported in Unearned premiums. Also, ceding commission income earned for the years ended December 31, 2014, 2013 and 2012 has been reported as an offset to DPAC amortization (see Note 7) which lowered DPAC amortization as previously reported for the years ended December 31, 2013 and 2012 by $5.9 million and $2.1 million, respectively. Total underwriting, policy acquisition and operating expense for the years ended December 31, 2013 and 2012 was not affected by the change in presentation. | ||||||||||||||||||||||||||||
Stock Split | ||||||||||||||||||||||||||||
In 2012, the Board of Directors of ProAssurance Corporation (the Board) declared a two-for-one split of ProAssurance common shares which was effected December 27, 2012 in the form of a stock dividend. All share and per share information provided in this report reflects the effect of the split for all periods presented. | ||||||||||||||||||||||||||||
Accounting Policies | ||||||||||||||||||||||||||||
The significant accounting policies followed by ProAssurance in making estimates that materially affect financial reporting are summarized in these notes to the consolidated financial statements. | ||||||||||||||||||||||||||||
Recognition of Revenues | ||||||||||||||||||||||||||||
Insurance premiums are recognized as revenues pro rata over the terms of the policies, which are principally one year in duration. | ||||||||||||||||||||||||||||
At December 31, 2014 and 2013 ProAssurance had established allowances for credit losses related to premium and agency receivables as shown in the following table. | ||||||||||||||||||||||||||||
(in thousands) | Premium | Agency | ||||||||||||||||||||||||||
Receivables | Receivables | |||||||||||||||||||||||||||
Allowance for credit losses: | ||||||||||||||||||||||||||||
Balance at December 31, 2012 | $ | 1,000 | $ | 286 | ||||||||||||||||||||||||
Estimated credit losses | 236 | — | ||||||||||||||||||||||||||
Account write offs, net of recoveries | (246 | ) | (236 | ) | ||||||||||||||||||||||||
Balance at December 31, 2013 | 990 | 50 | ||||||||||||||||||||||||||
Estimated credit losses | 299 | — | ||||||||||||||||||||||||||
Account write offs, net of recoveries | (299 | ) | — | |||||||||||||||||||||||||
Allowance acquired from acquisition | 225 | — | ||||||||||||||||||||||||||
Balance at December 31, 2014 | $ | 1,215 | $ | 50 | ||||||||||||||||||||||||
Earned But Unbilled Premiums (EBUB) | ||||||||||||||||||||||||||||
Workers’ compensation premiums are determined based upon the payroll of the insured, the applicable premium rates and, where applicable, an experience based modification factor. An audit of the policyholders’ records is conducted after policy expiration to make a final determination of applicable premiums. Audit premium due from or due to a policyholder as a result of an audit is reflected in net premiums earned when billed. ProAssurance tracks, by policy, the amount of additional premium billed in final audit invoices as a percentage of payroll exposure and uses this information to estimate the probable additional amount that it has earned, but not yet billed, as of the balance sheet date. Changes to the EBUB estimate are included in Net premiums earned in the period recognized. As of December 31, 2014, ProAssurance carried earned but unbilled premiums of $3.4 million as a part of Premiums receivable. | ||||||||||||||||||||||||||||
Losses and Loss Adjustment Expenses | ||||||||||||||||||||||||||||
ProAssurance establishes its reserve for losses and loss adjustment expenses ("reserve for losses" or "reserve") based on estimates of the future amounts necessary to pay claims and expenses associated with the investigation and settlement of claims. The reserve for losses is determined on the basis of individual claims and payments thereon as well as actuarially determined estimates of future losses based on past loss experience, available industry data and projections as to future claims frequency, severity, inflationary trends, judicial trends, legislative changes and settlement patterns. | ||||||||||||||||||||||||||||
Management establishes the reserve for losses after taking into consideration a variety of factors including the conclusions reached by internal actuaries, premium rates, claims frequency, historical paid and incurred loss development trends, the effect of inflation, general economic trends, the legal and political environment, and the reports received from consulting actuaries. Internal actuaries perform an in-depth review of the reserve for losses at least semi-annually using the loss and exposure data of ProAssurance subsidiaries. Management engages consulting actuaries to review subsidiary loss and exposure data and provide reports to Management regarding the adequacy of reserves. | ||||||||||||||||||||||||||||
Estimating casualty insurance reserves, and particularly long-tailed insurance reserves, is a complex process. Long-tailed insurance is characterized by the extended period of time between collecting the premium for insuring a risk and the ultimate payment of losses. For a high proportion of the risks insured or reinsured by ProAssurance the period of time required to resolve a claim is often five years or more, and claims may be subject to litigation. Estimating losses for these long-tailed claims requires ProAssurance to make and revise judgments and assessments regarding multiple uncertainties over an extended period of time. As a result, reserve estimates may vary significantly from the eventual outcome. Reserve estimates and the assumptions on which these estimates are predicated are regularly reviewed and updated as new information becomes available. Any adjustments necessary are reflected in then current operations. Due to the size of ProAssurance’s reserve for losses, even a small percentage adjustment to these estimates could have a material effect on earnings in the period in which the adjustment is made, as was the case in 2014, 2013 and 2012. | ||||||||||||||||||||||||||||
The effect of adjustments made to reinsured losses is mitigated by the corresponding adjustment that is made to reinsurance recoveries. Thus, in any given year, ProAssurance may make significant adjustments to gross losses that have little effect on its net losses. | ||||||||||||||||||||||||||||
Reinsurance Receivables | ||||||||||||||||||||||||||||
ProAssurance enters into reinsurance agreements whereby other insurance entities agree to assume a portion of the risk associated with certain policies issued by ProAssurance. In return, ProAssurance agrees to pay a premium to the reinsurer. ProAssurance purchases reinsurance to provide for greater diversification of business and to allow management to control exposure to potential losses arising from large risks. | ||||||||||||||||||||||||||||
Receivable from reinsurers on paid losses and loss adjustment expenses is the estimated amount of losses already paid that will be recoverable from reinsurers. Receivable from reinsurers on unpaid losses and loss adjustment expenses is the estimated amount of future loss payments that will be recoverable from reinsurers. Reinsurance recoveries are the portion of losses incurred during the period that are estimated to be allocable to reinsurers. Premiums ceded are the estimated premiums that will be due to reinsurers with respect to premiums earned and losses incurred during the period. | ||||||||||||||||||||||||||||
These estimates are based upon management’s estimates of ultimate losses and the portion of those losses that are allocable to reinsurers under the terms of the related reinsurance agreements. Given the uncertainty of the ultimate amounts of losses, these estimates may vary significantly from the eventual outcome. Management regularly reviews these estimates and any adjustments necessary are reflected in the period in which the estimate is changed. Due to the size of the receivable from reinsurers, even a small adjustment to the estimates could have a material effect on ProAssurance’s results of operations for the period in which the change is made. | ||||||||||||||||||||||||||||
Reinsurance contracts do not relieve ProAssurance from its obligations to policyholders. ProAssurance continually monitors its reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. Any amount determined to be uncollectible is written off in the period in which the uncollectible amount is identified. | ||||||||||||||||||||||||||||
Investments | ||||||||||||||||||||||||||||
Fair Values | ||||||||||||||||||||||||||||
Fair values of investment securities are primarily provided by independent pricing services. The pricing services provide an exchange traded price, if available, or provide an estimated price determined using multiple observable inputs, including exchange traded prices for similar assets. Management reviews valuations of securities obtained from the pricing services for accuracy based upon the specifics of the security, including class, maturity, credit rating, durations, collateral, and comparable markets for similar securities. Multiple observable inputs are not available for certain of our investments, including municipal bonds and corporate debt not actively traded, and investments in limited partnerships/limited liability companies (LPs/LLCs). Management values these municipal bonds and corporate debt either using a single non-binding broker quote or pricing models that utilize market based assumptions that have limited observable inputs. Management values certain investments in LPs/LLCs based on the net asset value (NAV) of the interest held, as provided by the fund. | ||||||||||||||||||||||||||||
Fixed Maturities and Equity Securities | ||||||||||||||||||||||||||||
Fixed maturities and equity securities are considered as either available-for-sale or trading securities. | ||||||||||||||||||||||||||||
Available-for-sale securities are carried at fair value, determined as described above, and unrealized gains and losses on such available-for-sale securities are included, net of related tax effects, in Shareholders’ Equity as a component of Accumulated Other Comprehensive Income (Loss). | ||||||||||||||||||||||||||||
Investment income includes amortization of premium and accretion of discount related to available-for-sale debt securities acquired at other than par value. Debt securities and mandatorily redeemable preferred stock with maturities beyond one year when purchased are classified as fixed maturities. | ||||||||||||||||||||||||||||
Trading portfolio securities are carried at fair value, determined as described above, with the holding gains and losses included in realized investment gains and losses in the current period. | ||||||||||||||||||||||||||||
Short-term Investments | ||||||||||||||||||||||||||||
Short-term investments, which have a maturity at purchase of one year or less, are primarily comprised of investments in U.S. Treasury obligations and commercial paper. All balances are reported at amortized cost, which approximates fair value. | ||||||||||||||||||||||||||||
Other Investments | ||||||||||||||||||||||||||||
Investments in LPs/LLCs where ProAssurance has virtually no influence over the operating and financial policies of an investee are accounted for using the cost method. Under the cost method, investments are valued at cost, with investment income recognized when received. | ||||||||||||||||||||||||||||
Investments in convertible bond securities are carried at fair value as permitted by the accounting guidance for hybrid financial instruments, with changes in fair value recognized in income as a component of Net realized investment gains (losses) during the period of change. Interest on convertible bond securities is recorded on an accrual basis based on contractual interest rates and is included in Net investment income. | ||||||||||||||||||||||||||||
Investment in Unconsolidated Subsidiaries | ||||||||||||||||||||||||||||
Investments in LPs/LLCs where ProAssurance is deemed to have influence because it holds a greater than a minor interest are accounted for using the equity method. Under the equity method, the recorded basis of the investment is adjusted each period for the investor’s pro rata share of the investee’s income or loss. Investments in unconsolidated subsidiaries include tax credit partnerships accounted for using the equity method, whereby ProAssurance’s proportionate share of income or loss is included in investment income. Tax credits received from the partnerships are recognized in the period received as a reduction to current tax expenses. | ||||||||||||||||||||||||||||
Business Owned Life Insurance (BOLI) | ||||||||||||||||||||||||||||
ProAssurance owns life insurance contracts on certain management employees. The life insurance contracts are carried at their current cash surrender value. Changes in the cash surrender value are included in income in the current period as investment income. Death proceeds from the contracts are recorded when the proceeds become payable under the policy terms. | ||||||||||||||||||||||||||||
Realized Gains and Losses | ||||||||||||||||||||||||||||
Realized investment gains and losses are recognized on the specific identification basis. | ||||||||||||||||||||||||||||
Other-than-temporary Impairments | ||||||||||||||||||||||||||||
ProAssurance evaluates its available-for-sale investment securities on at least a quarterly basis for the purpose of determining whether declines in fair value below recorded cost basis represent other-than-temporary declines. The assessment of whether the amortized cost basis of debt securities, particularly asset-backed debt securities, is expected to be recovered requires management to make assumptions regarding various matters affecting cash flows to be received in the future. The choice of assumptions is subjective and requires the use of judgment; actual credit losses experienced in future periods may differ from management’s estimates of those credit losses. | ||||||||||||||||||||||||||||
If there is intent to sell the security or if it is more likely than not that the security will be required to be sold before full recovery of its amortized cost basis, ProAssurance considers a decline in fair value to be an other-than-temporary impairment. Otherwise, ProAssurance considers the following factors in determining whether an investment’s decline is other-than-temporary: | ||||||||||||||||||||||||||||
For equity securities: | ||||||||||||||||||||||||||||
• | the length of time for which the fair value of the investment has been less than its recorded basis; | |||||||||||||||||||||||||||
• | the financial condition and near-term prospects of the issuer underlying the investment, taking into consideration the economic prospects of the issuer’s industry and geographical region, to the extent that information is publicly available; and | |||||||||||||||||||||||||||
• | the historical and implied volatility of the fair value of the security. | |||||||||||||||||||||||||||
For debt securities, an evaluation is made as to whether the decline in fair value is due to credit loss, which is defined as the excess of the current amortized cost basis of the security over the present value of expected future cash flows. Methodologies used to estimate the present value of expected cash flows to determine if a decline is due to a credit loss are: | ||||||||||||||||||||||||||||
• | For non-structured fixed maturities (U.S. Treasury securities, obligations of U.S. Government and government agencies and authorities, obligations of states, municipalities and political subdivisions, and corporate debt) the estimate of expected cash flows is determined by projecting a recovery value and a recovery time frame and assessing whether further principal and interest will be received. ProAssurance considers various factors in projecting recovery values and recovery time frames, including the following: | |||||||||||||||||||||||||||
• | third party research and credit rating reports; | |||||||||||||||||||||||||||
• | the current credit standing of the issuer, including credit rating downgrades, whether before or after the balance sheet date; | |||||||||||||||||||||||||||
• | internal assessments and the assessments of external portfolio managers regarding specific circumstances surrounding an investment, which indicate the investment is more or less likely to recover its amortized cost than other investments with a similar structure; | |||||||||||||||||||||||||||
• | failure of the issuer of the security to make scheduled interest or principal payments; | |||||||||||||||||||||||||||
• | For structured securities (primarily asset-backed securities), ProAssurance estimates the present value of the security’s cash flows using the effective yield of the security at the date of acquisition (or the most recent implied rate used to accrete the security if the implied rate has changed as a result of a previous impairment or changes in expected cash flows). ProAssurance considers the most recently available six month averages of the levels of delinquencies, defaults, severities, and prepayments for the collateral (loans) underlying the securitization or, if historical data is not available, sector based assumptions, to estimate expected future cash flows of these securities. | |||||||||||||||||||||||||||
Investments in tax credit partnerships are evaluated for OTTI by considering both qualitative and quantitative factors which include: whether cash flows currently expected from the investment, primarily tax benefits, equal or exceed the carrying value of the investment, whether currently expected cash flows are less than those expected at the time the investment was acquired, and ProAssurance's ability and intent to hold the investment until the recovery of its carrying value. | ||||||||||||||||||||||||||||
Investments in LPs/LLCs other than tax credit partnerships are evaluated for impairment by comparing ProAssurance’s carrying value to net asset value of ProAssurance’s interest as reported by the LP/LLC. Additionally, Management considers the performance of the LP/LLC relative to the market and its stated objectives, cash flows expected from the interest, and the audited financial statements of the LP/LLC, if available. | ||||||||||||||||||||||||||||
ProAssurance recognizes other-than-temporary impairments, including impairments of debt securities due to credit loss, in earnings as a part of net realized investment gains (losses). In subsequent periods, any measurement of gain or loss or impairment is based on the revised amortized basis of the security. Declines in fair value, including non-credit impairments of debt securities, not considered to be other-than-temporary are recognized in other comprehensive income. | ||||||||||||||||||||||||||||
Asset-backed securities that have been impaired due to credit or are below investment grade quality are accounted for under the effective yield method. Under the effective yield method estimates of cash flows expected over the life of asset-backed securities are then used to recognize income on the investment balance for subsequent accounting periods. | ||||||||||||||||||||||||||||
Foreign Currency | ||||||||||||||||||||||||||||
The functional currency of all ProAssurance foreign subsidiaries is the U.S. Dollar. | ||||||||||||||||||||||||||||
Cash and Cash Equivalents | ||||||||||||||||||||||||||||
For purposes of the consolidated balance sheets and statements of cash flows, ProAssurance considers all demand deposits and overnight investments to be cash equivalents. | ||||||||||||||||||||||||||||
Restricted Cash | ||||||||||||||||||||||||||||
Restricted cash represents cash balances which are not available for immediate or general use. At December 31, 2013 ProAssurance's Restricted cash was comprised entirely of a deposit collateralizing a standby letter of credit entered into as partial funding at Lloyd's for Syndicate 1729. | ||||||||||||||||||||||||||||
Deferred Policy Acquisition Costs; Ceding Commission Income | ||||||||||||||||||||||||||||
Costs that vary with and are directly related to the successful production of new and renewal premiums (primarily premium taxes, commissions and underwriting salaries) are deferred to the extent they are recoverable against unearned premiums and are amortized as related premiums are earned. Unearned ceding commission income is reported as an offset to deferred policy acquisition costs. Ceding commission earned is reported as an offset to DPAC amortization. | ||||||||||||||||||||||||||||
Income Taxes/Deferred Taxes | ||||||||||||||||||||||||||||
ProAssurance files a consolidated federal income tax return. Tax-related interest and penalties are recognized as components of tax expense. | ||||||||||||||||||||||||||||
ProAssurance evaluates tax positions taken on tax returns and recognizes positions in the financial statements when it is more likely than not that the position will be sustained upon resolution with a taxing authority. If recognized, the benefit is measured as the largest amount of benefit that has a greater than fifty percent probability of being realized. Uncertain tax positions are reviewed each period by considering changes in facts and circumstances, such as changes in tax law, interactions with taxing authorities and developments in case law, and adjustments are made as considered necessary. Adjustments to unrecognized tax benefits may affect income tax expense and the settlement of uncertain tax positions may require the use of cash. | ||||||||||||||||||||||||||||
Deferred federal income taxes arise from the recognition of temporary differences between the basis of assets and liabilities determined for financial reporting purposes and the basis determined for income tax purposes. ProAssurance’s temporary differences principally relate to loss reserves, unearned premium, deferred policy acquisition costs, unrealized investment gains (losses), basis differentials for investments, compensation accruals, and intangibles. Deferred tax assets and liabilities are measured using the enacted tax rates expected to be in effect when such benefits are realized. ProAssurance reviews its deferred tax assets quarterly for impairment. If management determines that it is more likely than not that some or all of a deferred tax asset will not be realized, a valuation allowance is recorded to reduce the carrying value of the asset. In assessing the need for a valuation allowance, management is required to make certain judgments and assumptions about the future operations of ProAssurance based on historical experience and information as of the measurement date regarding reversal of existing temporary differences, carryback capacity, future taxable income, including its capital and operating characteristics, and tax planning strategies. | ||||||||||||||||||||||||||||
Changes in tax laws and rates could also affect recorded deferred tax assets and liabilities in the future. Management is not aware of any such changes that would have a material effect on the Company’s results of operations, cash flows or financial position. | ||||||||||||||||||||||||||||
Real Estate | ||||||||||||||||||||||||||||
Real Estate balances are reported at cost or, for properties acquired in business combinations, estimated fair value on the date of acquisition, less accumulated depreciation. Real estate principally consists of properties in use as corporate offices. Depreciation is computed over the estimated useful lives of the related property using the straight-line method. Excess office capacity is leased or made available for lease; rental income is included in other income and real estate expenses are included in underwriting, policy acquisition and operating expenses. | ||||||||||||||||||||||||||||
Real estate accumulated depreciation was approximately $23.0 million and $21.6 million at December 31, 2014 and 2013, respectively. Real estate depreciation expense for the years ended December 31, 2014, 2013 and 2012 was $1.5 million, $1.5 million and $1.4 million, respectively. | ||||||||||||||||||||||||||||
Intangible Assets | ||||||||||||||||||||||||||||
Intangible assets with definite lives are amortized over the estimated useful life of the asset. Amortizable intangible assets primarily consist of agency and policyholder relationships. Intangible assets with an indefinite life, primarily state licenses, are not amortized. Both amortizable and non-amortizable intangible assets increased during 2014 due to intangible assets purchased in the Eastern acquisition, see Note 2. Intangible assets are evaluated for impairment on an annual basis. Information about ProAssurance's intangible assets is shown in the following table. | ||||||||||||||||||||||||||||
Gross Carrying Value | Accumulated Amortization | Amortization Expense | ||||||||||||||||||||||||||
31-Dec | 31-Dec | Year Ended December 31 | ||||||||||||||||||||||||||
(In millions) | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2012 | |||||||||||||||||||||
Intangible Assets | ||||||||||||||||||||||||||||
Non-amortizable | $ | 25.8 | $ | 16.8 | ||||||||||||||||||||||||
Amortizable | 96.2 | 51.7 | $ | 21.2 | $ | 16.5 | $ | 10.3 | $ | 5.3 | $ | 4.5 | ||||||||||||||||
Total Intangible Assets | $ | 122 | $ | 68.5 | ||||||||||||||||||||||||
Aggregate amortization expense for intangible assets is estimated to be $8.3 million for 2015, $8.0 million for 2016, $5.6 million for 2017, $5.6 million for 2018 and $5.6 million for 2019. | ||||||||||||||||||||||||||||
Goodwill | ||||||||||||||||||||||||||||
Goodwill is recognized in conjunction with acquisitions as the excess of the purchase consideration for the acquisition over the fair value of identifiable assets acquired and liabilities assumed. The fair value of identifiable assets and liabilities, and thus goodwill, is subject to redetermination within a measurement period of up to one year following completion of an acquisition. | ||||||||||||||||||||||||||||
ProAssurance evaluates the carrying value of goodwill at the segment (or reporting unit) level annually as of October 1st. If, at any time during the year, events occur or circumstances change that would more likely than not reduce the fair value below the carrying value, an additional evaluation of goodwill is made. | ||||||||||||||||||||||||||||
The goodwill impairment assessment requires evaluating qualitative factors or performing a quantitative assessment to determine if a reporting unit’s carrying value is likely to exceed its fair value. ProAssurance elected to evaluate goodwill for each of its reporting units using qualitative factors to determine whether it was more likely than not that the fair value of a reporting unit was less than its carrying amount. In applying the qualitative approach, Management considered macroeconomic factors, such as industry and market conditions, as well as reporting-unit-specific events, actual financial performance versus expectations, and management’s future business expectations. For recently acquired reporting units with material goodwill, consideration was given to the fact that the business had been recently acquired in an orderly transaction between market participants, and that the purchase price therefore represented fair value at acquisition. A significant amount of judgment is required in performing the goodwill impairment analysis. As of October 1, 2014, the most recent evaluation date, Management concluded that the fair value of each ProAssurance reporting unit exceeded the carrying value of the reporting unit, and deemed it unnecessary to perform further testing for impairment. | ||||||||||||||||||||||||||||
Other Assets and Other Liabilities | ||||||||||||||||||||||||||||
At December 31, 2013, Other assets was principally comprised of a deposit with an intermediate third-party of $205 million, related to the completion of the Eastern Insurance Holdings, Inc. (Eastern) acquisition which closed on January 1, 2014. See Note 2. | ||||||||||||||||||||||||||||
Other liabilities at December 31, 2014 and 2013 consisted of the following: | ||||||||||||||||||||||||||||
(In millions) | 2014 | 2013 | ||||||||||||||||||||||||||
Unpaid dividends | $ | 167.7 | $ | 18.5 | ||||||||||||||||||||||||
Segregated portfolio cell (SPC) dividends payable | 15.8 | — | ||||||||||||||||||||||||||
All other | 137.4 | 124.6 | ||||||||||||||||||||||||||
Total other liabilities | $ | 320.9 | $ | 143.1 | ||||||||||||||||||||||||
The SPC dividend payable represents the cumulative undistributed earnings of segregated portfolio cells that are contractually payable to external preferred shareholders of the cells. Unpaid dividends represents common stock dividends declared by ProAssurance's Board of Directors that have not yet been paid. Unpaid dividends increased for 2014 due to special dividends declared in the fourth quarter that were paid in 2015. | ||||||||||||||||||||||||||||
Treasury Stock | ||||||||||||||||||||||||||||
Treasury shares are reported at cost, and are reflected on the Consolidated Balance Sheets as an unallocated reduction of total equity. | ||||||||||||||||||||||||||||
Share-Based Payments | ||||||||||||||||||||||||||||
Compensation cost for share-based payments is measured based on the grant-date fair value of the award, recognized over the period in which the employee is required to provide service in exchange for the award. Excess tax benefits (tax deductions realized in excess of the compensation costs recognized for the exercise of the awards, multiplied by the incremental tax rate) are reported as financing cash inflows. | ||||||||||||||||||||||||||||
Subsequent Events | ||||||||||||||||||||||||||||
ProAssurance evaluates events that occurred subsequent to December 31, 2014, for recognition or disclosure in its Consolidated Financial Statements. | ||||||||||||||||||||||||||||
Accounting Changes Adopted | ||||||||||||||||||||||||||||
Obligations Resulting from Joint and Several Liability Arrangements | ||||||||||||||||||||||||||||
Effective for fiscal years beginning after December 15, 2013, the Financial Accounting Standards Board (FASB) revised guidance related to obligations resulting from joint and several liability arrangements. The new guidance requires an entity to recognize, measure and disclose obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date, except for obligations already addressed within existing GAAP guidance, with retrospective application required for such arrangements existing at the beginning of the fiscal year of adoption. ProAssurance adopted the guidance on January 1, 2014. Adoption of this guidance had no effect on ProAssurance's results of operations or financial position. | ||||||||||||||||||||||||||||
Presentation of Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists | ||||||||||||||||||||||||||||
Effective for fiscal years beginning after December 15, 2013, the FASB issued guidance related to the financial statement presentation of unrecognized tax benefits. The new guidance requires an entity to present unrecognized tax benefits as a reduction to a deferred tax asset resulting from a net operating loss carryforward, a similar tax loss, or tax credit carryforward except in circumstances where the relevant taxing authority does not permit offset or does not require offset and the entity does not intend to use the deferred tax asset for offset. The guidance requires prospective application for all unrecognized tax benefits that exist as of the effective date, but may be applied retrospectively. ProAssurance adopted the guidance prospectively on January 1, 2014. Adoption of this guidance had no material effect on ProAssurance's results of operations or financial position. | ||||||||||||||||||||||||||||
Equity Method and Joint Ventures-Accounting for Investments in Qualified Affordable Housing Projects | ||||||||||||||||||||||||||||
Effective for fiscal years beginning after December 15, 2014, the FASB issued guidance which, if certain criteria is met, permits but does not require reporting entities to begin using a new accounting method, the proportional amortization method, for investments in qualified affordable housing projects. The guidance also includes new disclosure requirements around the nature of investments in qualified affordable housing projects and their effect on financial position and results of operations. Under the proportional amortization method the investments in such projects are amortized in proportion to the tax benefits received, and investment performance is recognized as a component of income tax expense (benefit) rather than as a component of investment income. The tax credit partnership investments held by ProAssurance are primarily investments in qualified affordable housing projects. ProAssurance has adopted the new guidance as of December 31, 2014, but has elected to continue to account for these investments using the equity method of accounting. Adoption of this guidance had no material effect on ProAssurance’s results of operations or financial position as it affected disclosures only. | ||||||||||||||||||||||||||||
Determining Whether Hybrid Financial Instruments Issued as a Share is More Akin to Debt or to Equity | ||||||||||||||||||||||||||||
Effective for fiscal years beginning after December 15, 2015, early adoption permitted, the FASB issued guidance that clarifies current U.S. GAAP regarding the evaluation of the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. ProAssurance adopted the guidance as of December 31, 2014. Adoption of this guidance had no effect on ProAssurance’s results of operations or financial position. | ||||||||||||||||||||||||||||
Business Combinations: Pushdown Accounting | ||||||||||||||||||||||||||||
On November 18, 2014, the FASB issued immediately effective guidance on whether and at what threshold an acquired entity can apply pushdown accounting in its separate financial statements. ProAssurance has adopted this guidance as of its effective date. Adoption of this guidance had no effect on ProAssurance’s results of operations or financial position. | ||||||||||||||||||||||||||||
Income Statement Presentation of Extraordinary Items | ||||||||||||||||||||||||||||
Effective for fiscal years beginning after December 15, 2015, early adoption permitted, the FASB issued guidance that eliminates from U.S. GAAP the concept of extraordinary items and the related presentation requirements. Under the new guidance, the effect of each event or transaction that is unusual in nature or occurs infrequently, or both, is to be presented as a separate component of income from continuing operations or, alternatively, disclosed in notes to the financial statements. ProAssurance adopted the guidance as of January 1, 2014. Adoption of this guidance had no effect on ProAssurance’s results of operations or financial position. | ||||||||||||||||||||||||||||
Accounting Changes Not Yet Adopted | ||||||||||||||||||||||||||||
Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity | ||||||||||||||||||||||||||||
Effective for fiscal years beginning after December 15, 2014, the FASB issued guidance which changes the requirements for reporting discontinued operations. Under the new guidance, reporting entities are required to report disposals of business components only if the disposal represents a strategic shift in the entity’s operations that will have a major effect on the entity’s operations and financial results. The new guidance expands disclosure requirements for reported discontinued operations and requires disclosure of pre-tax profit or loss attributable to significant disposals that are not reported as discontinued operations. ProAssurance plans to adopt the guidance beginning January 1, 2015. Adoption of the guidance is expected to have no effect on ProAssurance’s results of operations or financial position. | ||||||||||||||||||||||||||||
Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period | ||||||||||||||||||||||||||||
Effective for fiscal years beginning after December 15, 2015, the FASB issued guidance for share-based payments in which the terms of the award provide that a performance target can be achieved after completion of the requisite service period. The new guidance provides that compensation cost for such awards should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. ProAssurance plans to adopt the guidance beginning January 1, 2016. Adoption of the guidance is expected to have no effect on ProAssurance’s results of operations or financial position as ProAssurance has no awards with performance targets extending beyond the requisite service period. | ||||||||||||||||||||||||||||
Revenue from Contracts with Customers | ||||||||||||||||||||||||||||
Effective for fiscal years beginning after December 15, 2016, the FASB issued guidance related to revenue from contracts with customers. The core principle of the new guidance is that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ProAssurance plans to adopt the guidance beginning January 1, 2017. As the majority of ProAssurance's revenues come from insurance contracts which fall under the scope of other FASB standards, adoption of the guidance is expected to have no material effect on ProAssurance’s results of operations or financial position. | ||||||||||||||||||||||||||||
Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern | ||||||||||||||||||||||||||||
Effective for fiscal years ending after December 15, 2016 and interim periods beginning after December 15, 2016, the FASB issued guidance that establishes principles and definitions related to management's evaluation of whether there is substantial doubt about the organization's ability to continue as a going concern. For each interim and annual reporting period, the new guidance requires management to evaluate the organization's ability to meet its obligations as they are due within one year of the date the financial statements are issued and requires disclosure when there is substantial doubt regarding the organization's ability to continue as a going concern. ProAssurance plans to adopt the guidance on its effective date. Adoption is expected to have no effect on ProAssurance’s results of operations or financial position. |
Business_Combinations
Business Combinations | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Business Combinations [Abstract] | ||||||||||||
Business Combinations | Business Combinations | |||||||||||
All entities acquired in 2014, 2013 and 2012 were accounted for in accordance with GAAP relating to Business Combinations. | ||||||||||||
On January 1, 2014, ProAssurance completed the acquisition of Eastern by purchasing 100% of its outstanding common shares for cash of $205 million. Eastern is based in Lancaster, Pennsylvania and specializes in workers' compensation insurance and reinsurance products and services, including alternative market solutions. ProAssurance incurred expenses related to the purchase of approximately $2.2 million during the year ended December 31, 2014 and approximately $0.9 million during the year ended December 31, 2013. These expenses were included as a part of operating expenses in the periods incurred. | ||||||||||||
On January 1, 2013, ProAssurance completed the acquisition of Medmarc Mutual Insurance Company, now Medmarc Casualty Insurance Company (Medmarc), through a sponsored demutualization. Medmarc is based in Chantilly, Virginia and provides products liability insurance for medical technology and life sciences companies and also provides legal professional liability insurance. ProAssurance acquired Medmarc for cash of $153.7 million, including the funding of future policy credits for eligible members of $7.5 million. ProAssurance transferred all of the cash required to complete the transaction to a third party agent for the benefit of Medmarc eligible members on December 27, 2012. ProAssurance incurred expenses related to the purchase of approximately $2.6 million during the year ended December 31, 2013 and approximately $1.0 million during the year ended December 31, 2012. These expenses were included as a part of operating expenses in the periods incurred. | ||||||||||||
During 2012, ProAssurance also completed an acquisition of a reciprocal exchange that converted to a stock insurance company upon acquisition. The acquisition was not material to ProAssurance. | ||||||||||||
The purchase consideration for both the acquisitions of Eastern and Medmarc was allocated to the assets acquired and liabilities assumed based on their estimated fair values on the acquisition dates, as shown in the table below. For the Eastern acquisition, goodwill of $49.6 million was recognized equal to the excess of the purchase price over the net fair value of identifiable assets acquired and liabilities assumed. Factors contributing to the recognition of goodwill include strategic and synergistic benefits that are expected to be realized as a result of the acquisition. These benefits include insurance market diversification, expanded access to alternative markets, and opportunities to reach additional insureds in the healthcare market by being a single source provider of a suite of insurance products. None of the goodwill is expected to be tax deductible. | ||||||||||||
For the Medmarc acquisition, the purchase consideration was less than the estimated fair value of the net assets acquired resulting in a gain on the acquisition of $32.3 million. ProAssurance believes it was able to acquire Medmarc for less than the fair value of its net assets due to Medmarc's declining premium base and its small capital position relative to other insurers in the medical technology and life sciences products liability insurance market. | ||||||||||||
(In thousands) | Eastern | Medmarc | ||||||||||
Fixed maturities, available for sale | $ | 107,131 | $ | 269,529 | ||||||||
Equity securities, trading | 65,945 | 30,976 | ||||||||||
Cash and short-term investments | 58,944 | 24,008 | ||||||||||
Other investments | 42,133 | 5,340 | ||||||||||
Premiums receivable, net | 71,989 | 2,986 | ||||||||||
Receivable from reinsurers on paid and unpaid losses and LAE | 18,942 | 73,107 | ||||||||||
Intangible assets | 59,000 | 3,630 | ||||||||||
Deferred policy acquisition costs (see discussion below) | 10,593 | — | ||||||||||
Other assets | 19,225 | 14,614 | ||||||||||
Reserve for losses and loss adjustment expenses | (153,191 | ) | (201,072 | ) | ||||||||
Unearned premiums | (80,268 | ) | (16,937 | ) | ||||||||
Ceded balances payable | (9,507 | ) | — | |||||||||
Segregated portfolio cells dividends payable | (14,430 | ) | — | |||||||||
Deferred tax liabilities, net | (12,835 | ) | (4,934 | ) | ||||||||
Other liabilities | (28,038 | ) | (15,233 | ) | ||||||||
Fair value of net assets acquired | $ | 155,633 | $ | 186,014 | ||||||||
Goodwill | 49,610 | — | ||||||||||
Gain on acquisition | — | (32,314 | ) | |||||||||
Total purchase consideration | $ | 205,243 | $ | 153,700 | ||||||||
Intangible assets acquired from Eastern and Medmarc included the following: | ||||||||||||
Eastern | Medmarc | |||||||||||
(In millions) | Estimated Fair Value on Acquisition Date | Estimated | Estimated Fair Value on Acquisition Date | Estimated | ||||||||
Useful Life | Useful Life | |||||||||||
Agency relationships | $27.00 | 15 | $— | — | ||||||||
Policyholder relationships | 8 | 15 | — | — | ||||||||
Trade names | 8 | 15 | — | — | ||||||||
Non-compete agreements | 7 | 3 | 1.1 | 2 | -1 | |||||||
Total intangibles subject to amortization | $50.00 | 13 | -2 | $1.10 | 2 | -2 | ||||||
Insurance license agreements | $9.00 | Indefinite | $2.50 | Indefinite | ||||||||
(1) Medmarc non-compete agreements were fully amortized as of December 31, 2014. | ||||||||||||
(2) Reflects the weighted average estimated useful life of acquired intangible assets that are subject to amortization. | ||||||||||||
ProAssurance's fair value estimate of the value of business acquired (VOBA), calculated as the present value of future earnings expected from the insurance contracts acquired, approximated the carrying value of Eastern's asset for deferred policy acquisition costs as of the acquisition date. Consequently, Eastern's asset for deferred policy acquisition costs was recognized in the purchase price allocation, as listed above, in lieu of recognizing an intangible asset for VOBA. | ||||||||||||
ProAssurance believes that all contractual cash flows related to acquired receivables of both acquisitions will be collected. For Eastern, the fair values of the reserve for losses and loss adjustment expenses and related reinsurance recoverables were based on three components: an actuarial estimate of the expected future net cash flows, a reduction to those cash flows for the time value of money determined utilizing the U.S. Treasury Yield Curve, and a risk margin adjustment to reflect the net present value of profit that an investor would demand in return for the assumption of the development risk associated with the reserve. The fair value of the reserve, including the risk margin adjustment, exceeded the undiscounted loss reserve previously established by Eastern by $9.3 million; this fair value adjustment is being amortized over the average expected life of the reserve of 6 years as a reduction to loss expenses. For Medmarc, the fair values of the reserve for losses and loss adjustment expenses and related reinsurance recoverables were estimated based on the present value of the expected underlying net cash flows, including a 5% profit margin and a 5% risk premium, and were determined to be materially the same as the recorded cost basis acquired. | ||||||||||||
The following table provides Pro Forma Consolidated Results for the years ended December 31, 2014, 2013 and 2012 as if the Eastern transaction had occurred on January 1, 2013 and the Medmarc transaction had occurred on January 1, 2012. ProAssurance Actual Consolidated Results have been adjusted by the following, net of related tax effects, to reflect the Pro Forma Consolidated Results below. | ||||||||||||
• | For the year ended December 31, 2013, ProAssurance 2013 Actual Consolidated Results, which did not include Eastern, have been adjusted to include Eastern's 2013 operating results. ProAssurance Actual Consolidated Results for the year ended December 31, 2014 included Eastern's operating results (Revenue of $202.2 million and Net income of $9.1 million). | |||||||||||
• | For the year ended December 31, 2012, ProAssurance 2012 Actual Consolidated Results, which did not include Medmarc, have been adjusted to include Medmarc's 2012 operating results. ProAssurance Actual Consolidated Results for the years ended December 31, 2014 and 2013 included Medmarc's operating results (Revenue of $41.4 million and $46.5 million, respectively, and Net Income of $8.1 million and $15.7 million, respectively). | |||||||||||
• | Certain costs included in ProAssurance Actual Consolidated Results for the years ended December 31, 2014 and 2013 have been reported in the Pro Forma Consolidated Results as if the costs had been incurred for the years ended December 31, 2013 and 2012, respectively. Such costs include direct transaction costs and certain compensation costs directly related to the integration of Eastern and Medmarc operations. | |||||||||||
• | Prior to the acquisition date, Medmarc reported on a statutory basis and expensed policy acquisition costs associated with successful contracts as incurred. After the acquisition date, in accordance with GAAP, Medmarc policy acquisition costs associated with successful contracts were capitalized and amortized to expense as the related premium revenues were earned, but no amortization was recognized for Medmarc policies written prior to the acquisition date. The Pro Forma Consolidated Results for both 2013 and 2012 have been adjusted to reflect policy acquisition costs as if Medmarc had followed GAAP guidance for these costs in pre-acquisition periods. | |||||||||||
• | Net income for the years ended December 31, 2013 and 2012, respectively, was reduced to reflect amortization of intangible assets and debt security premiums and discounts recorded as a part of the Eastern and Medmarc purchase price allocations. | |||||||||||
• | The non-taxable gain on the Medmarc acquisition of $32.3 million that was included in ProAssurance Actual Consolidated Results for the year ended December 31, 2013 has been reported in the Pro Forma Consolidated Results as being recognized during the year ended December 31, 2012. | |||||||||||
Year Ended December 31, 2014 | Year Ended December 31, 2013 | Year Ended December 31, 2012 | ||||||||||
(In thousands) | ProAssurance | ProAssurance | ProAssurance | ProAssurance | ProAssurance | ProAssurance | ||||||
Pro Forma | Actual | Pro Forma | Actual | Pro Forma | Actual | |||||||
Consolidated | Consolidated Results | Consolidated | Consolidated Results | Consolidated | Consolidated Results | |||||||
Results | Results | Results | ||||||||||
Revenue | $852,326 | $852,326 | $926,873 | $740,178 | $757,240 | $715,854 | ||||||
Net income | $197,533 | $196,565 | $263,446 | * | $297,523 | $317,097 | $275,470 | |||||
* Includes adjustments related to Eastern of $0.4 million and Medmarc of $33.7 million. |
Fair_Value_Measurement
Fair Value Measurement | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||
Fair Value Measurement | Fair Value Measurement | |||||||||||||||||||||||
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three level hierarchy has been established for valuing assets and liabilities based on how transparent (observable) the inputs are that are used to determine fair value, with the inputs considered most observable categorized as Level 1 and those that are the least observable categorized as Level 3. Hierarchy levels are defined as follows: | ||||||||||||||||||||||||
Level 1: | quoted (unadjusted) market prices in active markets for identical assets and liabilities. For ProAssurance, Level 1 inputs are generally quotes for debt or equity securities actively traded in exchange or over-the-counter markets. | |||||||||||||||||||||||
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. | |||||||||||||||||||||||
Fair values of assets measured at fair value on a recurring basis as of December 31, 2014 and December 31, 2013, are shown in the following tables. The tables also indicate the fair value hierarchy of the valuation techniques utilized to determine those fair values. For some assets, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. When this is the case, the asset is categorized based on the level of the most significant input to the fair value measurement. Assessments of the significance of a particular input to the fair value measurement require judgment and consideration of factors specific to the assets being valued. | ||||||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||
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 | $ | — | $ | 166,512 | $ | — | $ | 166,512 | ||||||||||||||||
U.S. Government-sponsored enterprise obligations | — | 39,563 | — | 39,563 | ||||||||||||||||||||
State and municipal bonds | — | 1,057,590 | 5,025 | 1,062,615 | ||||||||||||||||||||
Corporate debt, multiple observable inputs | — | 1,404,020 | — | 1,404,020 | ||||||||||||||||||||
Corporate debt, limited observable inputs: | ||||||||||||||||||||||||
Other corporate debt, NRSRO ratings available | — | — | 10,474 | 10,474 | ||||||||||||||||||||
Other corporate debt, NRSRO ratings not available | — | — | 2,607 | 2,607 | ||||||||||||||||||||
Residential mortgage-backed securities | — | 276,056 | — | 276,056 | ||||||||||||||||||||
Agency commercial mortgage-backed securities | — | 15,493 | — | 15,493 | ||||||||||||||||||||
Other commercial mortgage-backed securities | — | 51,063 | — | 51,063 | ||||||||||||||||||||
Other asset-backed securities | — | 111,855 | 4,769 | 116,624 | ||||||||||||||||||||
Equity securities | ||||||||||||||||||||||||
Financial | 79,341 | — | — | 79,341 | ||||||||||||||||||||
Utilities/Energy | 25,629 | — | — | 25,629 | ||||||||||||||||||||
Consumer oriented | 65,670 | — | — | 65,670 | ||||||||||||||||||||
Industrial | 55,460 | — | — | 55,460 | ||||||||||||||||||||
Bond funds | 55,196 | — | — | 55,196 | ||||||||||||||||||||
All other | 33,186 | — | — | 33,186 | ||||||||||||||||||||
Short-term investments | 131,199 | 60 | — | 131,259 | ||||||||||||||||||||
Financial instruments carried at fair value, classified as a part of: | ||||||||||||||||||||||||
Investment in unconsolidated subsidiaries | — | — | 133,250 | 133,250 | ||||||||||||||||||||
Other investments | $ | 6,050 | $ | 22,908 | $ | — | $ | 28,958 | ||||||||||||||||
Total assets | $ | 451,731 | $ | 3,145,120 | $ | 156,125 | $ | 3,752,976 | ||||||||||||||||
31-Dec-13 | ||||||||||||||||||||||||
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 | $ | — | $ | 170,714 | $ | — | $ | 170,714 | ||||||||||||||||
U.S. Government-sponsored enterprise obligations | — | 32,768 | — | 32,768 | ||||||||||||||||||||
State and municipal bonds | — | 1,147,328 | 7,338 | 1,154,666 | ||||||||||||||||||||
Corporate debt, multiple observable inputs | — | 1,346,977 | — | 1,346,977 | ||||||||||||||||||||
Corporate debt, limited observable inputs: | ||||||||||||||||||||||||
Other corporate debt, NRSRO ratings available | — | — | 11,449 | 11,449 | ||||||||||||||||||||
Other corporate debt, NRSRO ratings not available | — | — | 2,727 | 2,727 | ||||||||||||||||||||
Residential mortgage-backed securities | — | 235,614 | — | 235,614 | ||||||||||||||||||||
Agency commercial mortgage-backed securities | — | 27,475 | — | 27,475 | ||||||||||||||||||||
Other commercial mortgage-backed securities | — | 61,390 | — | 61,390 | ||||||||||||||||||||
Other asset-backed securities | — | 67,455 | 6,814 | 74,269 | ||||||||||||||||||||
Equity securities | ||||||||||||||||||||||||
Financial | 81,536 | — | — | 81,536 | ||||||||||||||||||||
Utilities/Energy | 32,350 | — | — | 32,350 | ||||||||||||||||||||
Consumer oriented | 66,461 | — | — | 66,461 | ||||||||||||||||||||
Industrial | 57,262 | — | — | 57,262 | ||||||||||||||||||||
All other | 15,932 | — | — | 15,932 | ||||||||||||||||||||
Short-term investments | 248,605 | 248,605 | ||||||||||||||||||||||
Financial instruments carried at fair value, classified as a part of: | ||||||||||||||||||||||||
Investment in unconsolidated subsidiaries | — | — | 72,062 | 72,062 | ||||||||||||||||||||
Total assets | $ | 502,146 | $ | 3,089,721 | $ | 100,390 | $ | 3,692,257 | ||||||||||||||||
The fair values for securities included in the Level 2 category, with the few exceptions described below, were developed by one of several third party, nationally recognized pricing services, including services that price only certain types of securities. Each service uses complex methodologies to determine values for securities and subject the values they develop to quality control reviews. Management selected a primary source for each type of security in the portfolio, and reviewed the values provided for reasonableness by comparing data to alternate pricing services and to available market and trade data. Values that appeared inconsistent were further reviewed for appropriateness. If a value did not appear reasonable, the valuation was discussed with the service that provided the value and would have been adjusted, if necessary. No such adjustments were necessary at December 31, 2014 or 2013. | ||||||||||||||||||||||||
Level 2 Valuations | ||||||||||||||||||||||||
Below is a summary description of the valuation methodologies primarily used by the pricing services for securities in the Level 2 category, by security type: | ||||||||||||||||||||||||
U.S. Treasury obligations were valued based on quoted prices for identical assets, or, in markets that are not active, quotes for similar assets, taking into consideration adjustments for variations in contractual cash flows and yields to maturity. | ||||||||||||||||||||||||
U.S. Government-sponsored enterprise obligations were valued using pricing models that consider current and historical market data, normal trading conventions, credit ratings, and the particular structure and characteristics of the security being valued such as yield to maturity, redemption options, and contractual cash flows. Adjustments to model inputs or model results were included in the valuation process when necessary to reflect recent regulatory, government or corporate actions or significant economic, industry or geographic events affecting the security’s fair value. | ||||||||||||||||||||||||
State and municipal bonds were valued using a series of matrices that considered credit ratings, the structure of the security, the sector in which the security falls, yields, and contractual cash flows. Valuations were further adjusted, when necessary, to reflect the expected effect on fair value of recent significant economic or geographic events or ratings changes. | ||||||||||||||||||||||||
Corporate debt with multiple observable inputs consisted primarily of corporate bonds, but also included a small number of bank loans. The methodology used to value Level 2 corporate bonds was the same as the methodology previously described for U.S. Government-sponsored enterprise obligations. Bank loans were valued by an outside vendor based upon a widely distributed, loan-specific listing of average bid and ask prices published daily by an investment industry group. The publisher of the listing derived the averages from data received from multiple market-makers for bank loans. | ||||||||||||||||||||||||
Residential and commercial mortgage backed securities. Agency pass-through securities were valued using a pricing matrix which considers the issuer type, coupon rate and longest cash flows outstanding. The matrix used was based on the most recently available market information. Agency and non-agency collateralized mortgage obligations were both valued using models that consider the structure of the security, current and historical information regarding prepayment speeds, ratings and ratings updates, and current and historical interest rate and interest rate spread data. | ||||||||||||||||||||||||
Other asset-backed securities were valued using models that consider the structure of the security, monthly payment information, current and historical information regarding prepayment speeds, ratings and ratings updates, and current and historical interest rate and interest rate spread data. Spreads and prepayment speeds considered collateral type. | ||||||||||||||||||||||||
Short-term investments are securities maturing within one year, carried at cost which approximated the fair value of the security due to the short term to maturity. | ||||||||||||||||||||||||
Other investments consisted of convertible bonds valued using a pricing model that incorporated selected dealer quotes as well as current market data regarding equity prices and risk free rates. If dealer quotes were unavailable for the security being valued, quotes for securities with similar terms and credit status were used in the pricing model. Dealer quotes selected for use were those considered most accurate based on parameters such as underwriter status and historical reliability. | ||||||||||||||||||||||||
Level 3 Valuations | ||||||||||||||||||||||||
Below is a summary description of the valuation processes and methodologies used as well as quantitative information regarding securities in the Level 3 category. | ||||||||||||||||||||||||
Level 3 Valuation Processes | ||||||||||||||||||||||||
• | Level 3 securities are priced by the Chief Investment Officer. | |||||||||||||||||||||||
• | Level 3 valuations are computed quarterly. Prices are evaluated quarterly against prior period prices and the expected change in price. | |||||||||||||||||||||||
• | Exclusive of Investments in unconsolidated subsidiaries, which are valued at NAV, the securities noted in the disclosure are primarily NRSRO rated debt instruments for which comparable market inputs are commonly available for evaluating the securities in question. Valuation of these debt instruments is not overly sensitive to changes in the unobservable inputs used. | |||||||||||||||||||||||
Level 3 Valuation Methodologies | ||||||||||||||||||||||||
State and municipal bonds consisted of auction rate municipal bonds valued internally using either published quotes for similar securities or values produced by discounted cash flow models using yields currently available on fixed rate securities with a similar term and collateral, adjusted to consider the effect of a floating rate and a premium for illiquidity. At December 31, 2014, 100% of the securities were rated; the average rating was A-. | ||||||||||||||||||||||||
Corporate debt with limited observable inputs consisted of corporate bonds valued using dealer quotes for similar securities or discounted cash flow models using yields currently available for similar securities. Similar securities are defined as securities of comparable credit quality that have like terms and payment features. Assessments of credit quality were based on NRSRO ratings, if available, or were subjectively determined by management if not available. At December 31, 2014, the average rating of rated securities was A-. | ||||||||||||||||||||||||
Other asset-backed securities consisted of securitizations of receivables valued using dealer quotes for similar securities or discounted cash flow models using yields currently available for similar securities. | ||||||||||||||||||||||||
Investment in unconsolidated subsidiaries consisted of limited partnership (LP) and limited liability company (LLC) interests valued using the NAV provided by the LP/LLC, which approximated the fair value of the interest. | ||||||||||||||||||||||||
Such interests include the following: | ||||||||||||||||||||||||
Unfunded | Fair Value | |||||||||||||||||||||||
Commitments | ||||||||||||||||||||||||
(In thousands) | December 31, | December 31, | December 31, | |||||||||||||||||||||
2014 | 2014 | 2013 | ||||||||||||||||||||||
Investments in LPs/LLCs: | ||||||||||||||||||||||||
Private debt funds (1) | $27,578 | $ | 37,296 | $ | 13,233 | |||||||||||||||||||
Long equity fund (2) | None | 6,747 | 6,574 | |||||||||||||||||||||
Long/Short equity funds (3) | None | 25,301 | 28,385 | |||||||||||||||||||||
Non-public equity funds (4) | $66,545 | 51,811 | 23,870 | |||||||||||||||||||||
Multi-strategy fund of funds (5) | None | 8,271 | — | |||||||||||||||||||||
Structured credit fund (6) | None | 3,824 | — | |||||||||||||||||||||
$ | 133,250 | $ | 72,062 | |||||||||||||||||||||
-1 | Comprised of interests in two unrelated LP funds that are structured to provide interest distributions primarily through diversified portfolios of private debt instruments. One LP allows redemption by special consent; the other does not permit redemption. Income and capital are to be periodically distributed at the discretion of the LPs over an anticipated time frame that spans from 3 to 8 years. | |||||||||||||||||||||||
-2 | This fund is an LP that holds long equities of public international companies. Redemptions are allowed at the end of any calendar month with a prior notice requirement of 15 days and are paid within 10 days of the end of the calendar month of the redemption request. | |||||||||||||||||||||||
-3 | Comprised of interests in multiple unrelated LP funds. The funds hold primarily long and short North American equities, and target absolute returns using strategies designed to take advantage of event-driven market opportunities. The funds generally permit quarterly or semi-annual redemptions of the investors' existing capital balance with notice requirements of 30 to 90 days. For some funds, redemptions above specified thresholds (lowest threshold is 90%) may be only partially payable until after a fund audit is completed and are then payable within 30 days. | |||||||||||||||||||||||
-4 | Comprised of interests in three unrelated LP funds, each structured to provide capital appreciation through diversified investments in private equity, which can include investments in buyout, venture capital, mezzanine debt, distressed debt and other private equity-oriented LPs. One LP allows redemption by special consent; 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 9 years. | |||||||||||||||||||||||
-5 | This fund is an LLC structured to build and manage low volatility, multi-manager portfolios that have little or no correlation to the broader fixed income and equity security markets. Redemptions are not permitted but the LLC Board is permitted discretion to periodically extend offers to repurchase units of the LLC. | |||||||||||||||||||||||
-6 | This fund is an LP seeking to obtain superior risk-adjusted absolute returns by acquiring and actively managing a diversified portfolio of debt securities, including bonds, loans and other asset-backed instruments. Redemptions are allowed at any quarter-end with a prior notice requirement of 90 days. | |||||||||||||||||||||||
ProAssurance may not sell, transfer or assign its interest in any of the above LPs/LLCs without special consent from the LPs/LLCs. | ||||||||||||||||||||||||
Quantitative Information Regarding Level 3 Valuations | ||||||||||||||||||||||||
Quantitative Information about Level 3 Fair Value Measurements | ||||||||||||||||||||||||
Fair Value at | ||||||||||||||||||||||||
(In millions) | 31-Dec-14 | 31-Dec-13 | Valuation Technique | Unobservable Input | Range | |||||||||||||||||||
(Weighted Average) | ||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||
State and municipal bonds | $5.00 | $7.30 | Market Comparable | Comparability Adjustment | 0% - 10% (5%) | |||||||||||||||||||
Securities | ||||||||||||||||||||||||
Discounted Cash Flows | Comparability Adjustment | 0% - 10% (5%) | ||||||||||||||||||||||
Corporate debt with limited observable inputs | $13.10 | $14.20 | Market Comparable | Comparability Adjustment | 0% - 5% (2.5%) | |||||||||||||||||||
Securities | ||||||||||||||||||||||||
Discounted Cash Flows | Comparability Adjustment | 0% - 5% (2.5%) | ||||||||||||||||||||||
Other asset-backed securities | $4.80 | $6.80 | Market Comparable | Comparability Adjustment | 0% - 5% (2.5%) | |||||||||||||||||||
Securities | ||||||||||||||||||||||||
Discounted Cash Flows | Comparability Adjustment | 0% - 5% (2.5%) | ||||||||||||||||||||||
The significant unobservable inputs used in the fair value measurement of the above listed securities were the valuations of comparable securities with similar issuers, credit quality and maturity. Changes in the availability of comparable securities could result in changes in the fair value measurements. | ||||||||||||||||||||||||
Fair Value Measurements - Level 3 Assets | ||||||||||||||||||||||||
The following tables (the Level 3 Tables) present summary information regarding changes in the fair value of assets measured at fair value using Level 3 inputs. | ||||||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||
Level 3 Fair Value Measurements – Assets | ||||||||||||||||||||||||
(In thousands) | U.S. Government-sponsored Enterprise Obligations | State and Municipal Bonds | Corporate Debt | Asset-backed Securities | Investment in Unconsolidated Subsidiaries | Total | ||||||||||||||||||
Balance December 31, 2013 | $ | — | $ | 7,338 | $ | 14,176 | $ | 6,814 | $ | 72,062 | $ | 100,390 | ||||||||||||
Total gains (losses) realized and unrealized: | ||||||||||||||||||||||||
Included in earnings, as a part of: | ||||||||||||||||||||||||
Net investment income | — | (14 | ) | 65 | — | — | 51 | |||||||||||||||||
Equity in earnings of unconsolidated subsidiaries | — | — | — | — | 10,538 | 10,538 | ||||||||||||||||||
Net realized investment gains (losses) | — | (95 | ) | 3 | — | — | (92 | ) | ||||||||||||||||
Included in other comprehensive income | 1 | (29 | ) | 688 | 59 | — | 719 | |||||||||||||||||
Purchases | 1,000 | 1,861 | 2,000 | 3,340 | 56,340 | 64,541 | ||||||||||||||||||
Sales | — | (1,731 | ) | (1,826 | ) | (61 | ) | (5,690 | ) | (9,308 | ) | |||||||||||||
Transfers in | — | 2,119 | — | 305 | — | 2,424 | ||||||||||||||||||
Transfers out | (1,001 | ) | (4,424 | ) | (2,025 | ) | (5,688 | ) | — | (13,138 | ) | |||||||||||||
Balance December 31, 2014 | $ | — | $ | 5,025 | $ | 13,081 | $ | 4,769 | $ | 133,250 | $ | 156,125 | ||||||||||||
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end | $ | — | $ | — | $ | — | $ | — | $ | 10,538 | $ | 10,538 | ||||||||||||
31-Dec-13 | ||||||||||||||||||||||||
Level 3 Fair Value Measurements – Assets | ||||||||||||||||||||||||
(In thousands) | U.S. Government-sponsored Enterprise Obligations | State and Municipal Bonds | Corporate Debt | Asset-backed Securities | Investment in Unconsolidated Subsidiaries | Total | ||||||||||||||||||
Balance December 31, 2012 | $ | — | $ | 7,175 | $ | 15,191 | $ | 4,035 | $ | 33,739 | $ | 60,140 | ||||||||||||
Total gains (losses) realized and unrealized: | ||||||||||||||||||||||||
Included in earnings, as a part of: | ||||||||||||||||||||||||
Net investment income | — | — | (103 | ) | (17 | ) | — | (120 | ) | |||||||||||||||
Equity in earnings of unconsolidated subsidiaries | — | — | — | — | 6,877 | 6,877 | ||||||||||||||||||
Net realized investment gains (losses) | — | (44 | ) | (69 | ) | — | — | (113 | ) | |||||||||||||||
Included in other comprehensive income | — | 1 | (725 | ) | (61 | ) | — | (785 | ) | |||||||||||||||
Purchases | — | — | 9,470 | 1,356 | 24,567 | 35,393 | ||||||||||||||||||
Sales | — | (2,106 | ) | (1,629 | ) | (18 | ) | (14,632 | ) | (18,385 | ) | |||||||||||||
Transfers in | — | 2,312 | 2,114 | 3,800 | 21,511 | 29,737 | ||||||||||||||||||
Transfers out | — | — | (10,073 | ) | (2,281 | ) | — | (12,354 | ) | |||||||||||||||
Balance December 31, 2013 | $ | — | $ | 7,338 | $ | 14,176 | $ | 6,814 | $ | 72,062 | $ | 100,390 | ||||||||||||
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end | $ | — | $ | — | $ | — | $ | — | $ | 6,877 | $ | 6,877 | ||||||||||||
Transfers | ||||||||||||||||||||||||
There were no transfers between the Level 1 and Level 2 categories during 2014. Short-term investments of $7.2 million were transferred from Level 2 to Level 1 as of the end of 2013. | ||||||||||||||||||||||||
Transfers shown in the preceding Level 3 Tables were as of the end of the period and were to or from Level 2, unless otherwise noted. | ||||||||||||||||||||||||
The transfer in for Investment in unconsolidated subsidiaries reported in the Level 3 Tables for 2013 reflected an interest in an LP previously accounted for using the cost method and thus not carried at fair value. During 2013, the interest began to be accounted for using the equity method which approximates fair value. | ||||||||||||||||||||||||
All remaining transfers during 2014 and 2013 related to securities held for which the level of market activity for identical or nearly identical securities varies from period to period. The securities were valued using multiple observable inputs when those inputs were available; otherwise the securities were valued using limited observable inputs. | ||||||||||||||||||||||||
Financial Instruments - Methodologies Other Than Fair Value | ||||||||||||||||||||||||
The following table provides the estimated fair value of our financial instruments that, in accordance with GAAP for the type of investment, are measured using a methodology other than fair value. All fair values provided fall within the Level 3 fair value category. | ||||||||||||||||||||||||
31-Dec-14 | 31-Dec-13 | |||||||||||||||||||||||
(In thousands) | Carrying | Fair | Carrying | Fair | ||||||||||||||||||||
Value | Value | Value | Value | |||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||
BOLI | $ | 56,381 | $ | 56,381 | $ | 54,374 | $ | 54,374 | ||||||||||||||||
Other investments | 57,099 | 57,994 | 52,240 | 51,833 | ||||||||||||||||||||
Other assets | 22,440 | 22,399 | 17,940 | 17,940 | ||||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||
Senior notes due 2023 | $ | 250,000 | $ | 276,503 | $ | 250,000 | $ | 262,500 | ||||||||||||||||
Other liabilities | 14,656 | 14,645 | 13,303 | 13,303 | ||||||||||||||||||||
The fair value of the BOLI was equal to the cash surrender value associated with the policies on the valuation date. | ||||||||||||||||||||||||
Other investments listed in the table above include interests in certain investment fund LPs/LLCs accounted for using the cost method, investments in Federal Home Loan Bank (FHLB) common stock carried at cost, and an annuity investment carried at amortized cost. The estimated fair value of the LP/LLC interests was based on the NAVs provided by the LP/LLC managers. The estimated fair value of the FHLB common stock was based on the amount ProAssurance would receive if its membership were canceled, as the membership cannot be sold. The fair value of the annuity represents the present value of the expected future cash flows discounted using a rate available in active markets for similarly structured instruments. | ||||||||||||||||||||||||
Other assets and Other liabilities primarily consisted of related investment assets and liabilities associated with funded deferred compensation agreements. Fair values of the funded deferred compensation assets and liabilities were based on the NAVs of the underlying securities. Other assets also included a secured note receivable and an unsecured receivable under a revolving credit agreement. Fair value of these receivables was based on the present value of expected cash flows from the receivables, discounted at market rates on the valuation date for receivables with similar credit standings and similar payment structures. Other liabilities also included certain contractual liabilities related to prior business combinations. The fair values of the business combination liabilities were based on the present value of the expected future cash outflows, discounted at ProAssurance’s assumed incremental borrowing rate on the valuation date for unsecured liabilities with similar repayment structures. | ||||||||||||||||||||||||
The fair value of the long-term debt was estimated based on the present value of expected future cash outflows, discounted at rates available on the valuation date for similar debt issued by entities with a similar credit standing to ProAssurance. |
Investments
Investments | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||
Investments | Investments | |||||||||||||||||||||||
Available-for-sale securities at December 31, 2014 and December 31, 2013 included the following: | ||||||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||
(In thousands) | Amortized | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||||||||||
Cost | ||||||||||||||||||||||||
Fixed maturities | ||||||||||||||||||||||||
U.S. Treasury obligations | $ | 163,714 | $ | 3,785 | $ | 987 | $ | 166,512 | ||||||||||||||||
U.S. Government-sponsored enterprise obligations | 38,022 | 1,641 | 100 | 39,563 | ||||||||||||||||||||
State and municipal bonds | 1,015,555 | 47,395 | 335 | 1,062,615 | ||||||||||||||||||||
Corporate debt | 1,389,970 | 44,234 | 17,103 | 1,417,101 | ||||||||||||||||||||
Residential mortgage-backed securities | 266,306 | 10,198 | 448 | 276,056 | ||||||||||||||||||||
Agency commercial mortgage-backed securities | 15,344 | 208 | 59 | 15,493 | ||||||||||||||||||||
Other commercial mortgage-backed securities | 50,025 | 1,137 | 99 | 51,063 | ||||||||||||||||||||
Other asset-backed securities | 116,541 | 288 | 205 | 116,624 | ||||||||||||||||||||
$ | 3,055,477 | $ | 108,886 | $ | 19,336 | $ | 3,145,027 | |||||||||||||||||
31-Dec-13 | ||||||||||||||||||||||||
(In thousands) | Amortized | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||||||||||
Cost | ||||||||||||||||||||||||
Fixed maturities | ||||||||||||||||||||||||
U.S. Treasury obligations | $ | 166,115 | $ | 6,118 | $ | 1,519 | $ | 170,714 | ||||||||||||||||
U.S. Government-sponsored enterprise obligations | 30,942 | 2,251 | 425 | 32,768 | ||||||||||||||||||||
State and municipal bonds | 1,116,060 | 46,533 | 7,927 | 1,154,666 | ||||||||||||||||||||
Corporate debt | 1,321,838 | 53,059 | 13,744 | 1,361,153 | ||||||||||||||||||||
Residential mortgage-backed securities | 230,861 | 7,608 | 2,855 | 235,614 | ||||||||||||||||||||
Agency commercial mortgage-backed securities | 27,268 | 343 | 136 | 27,475 | ||||||||||||||||||||
Other commercial mortgage-backed securities | 59,066 | 2,491 | 167 | 61,390 | ||||||||||||||||||||
Other asset-backed securities | 74,106 | 487 | 324 | 74,269 | ||||||||||||||||||||
$ | 3,026,256 | $ | 118,890 | $ | 27,097 | $ | 3,118,049 | |||||||||||||||||
The recorded cost basis and estimated fair value of available-for-sale fixed maturities at December 31, 2014, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. | ||||||||||||||||||||||||
(In thousands) | Amortized | Due in one | Due after | Due after | Due after | Total Fair | ||||||||||||||||||
Cost | year or less | one year | five years | ten years | Value | |||||||||||||||||||
through | through | |||||||||||||||||||||||
five years | ten years | |||||||||||||||||||||||
Fixed maturities, available for sale | ||||||||||||||||||||||||
U.S. Treasury obligations | $ | 163,714 | $ | 9,584 | $ | 113,489 | $ | 39,264 | $ | 4,175 | $ | 166,512 | ||||||||||||
U.S. Government-sponsored enterprise obligations | 38,022 | 3,641 | 25,286 | 10,287 | 349 | 39,563 | ||||||||||||||||||
State and municipal bonds | 1,015,555 | 44,334 | 380,741 | 453,275 | 184,265 | 1,062,615 | ||||||||||||||||||
Corporate debt | 1,389,970 | 115,301 | 711,806 | 566,585 | 23,409 | 1,417,101 | ||||||||||||||||||
Residential mortgage-backed securities | 266,306 | 276,056 | ||||||||||||||||||||||
Agency commercial mortgage-backed securities | 15,344 | 15,493 | ||||||||||||||||||||||
Other commercial mortgage-backed securities | 50,025 | 51,063 | ||||||||||||||||||||||
Other asset-backed securities | 116,541 | 116,624 | ||||||||||||||||||||||
$ | 3,055,477 | $ | 3,145,027 | |||||||||||||||||||||
Excluding obligations of the U.S. Government or U.S. Government-sponsored enterprises, no investment in any entity or its affiliates exceeded 10% of shareholders’ equity at December 31, 2014. | ||||||||||||||||||||||||
Cash and securities with a carrying value of $49.3 million at December 31, 2014 were on deposit with various state insurance departments to meet regulatory requirements. | ||||||||||||||||||||||||
As a member of Lloyd's and a capital provider to Syndicate 1729, ProAssurance is required to maintain capital at Lloyd's, referred to as Funds at Lloyd's (FAL). ProAssurance investments at December 31, 2014 included fixed maturities with a fair value of $85.0 million and short term investments with a fair value of approximately $0.2 million on deposit with Lloyd's in order to satisfy these FAL requirements. | ||||||||||||||||||||||||
BOLI | ||||||||||||||||||||||||
ProAssurance holds BOLI policies on management employees that are carried at the current cash surrender value of the policies (original cost $33 million). The primary purpose of the program is to offset future employee benefit expenses through earnings on the cash value of the policies. ProAssurance is the owner and principal beneficiary of these policies. | ||||||||||||||||||||||||
Other Investments | ||||||||||||||||||||||||
Other investments at December 31, 2014 and December 31, 2013 was comprised as follows: | ||||||||||||||||||||||||
(In thousands) | December 31, | December 31, | ||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
Investments in LPs/LLCs, at cost | $ | 53,258 | $ | 47,258 | ||||||||||||||||||||
Convertible securities, at fair value, see Note 1 | 28,958 | — | ||||||||||||||||||||||
Other, principally FHLB capital stock, at cost | 3,841 | 4,982 | ||||||||||||||||||||||
$ | 86,057 | $ | 52,240 | |||||||||||||||||||||
FHLB capital stock is not marketable, but may be liquidated by terminating membership in the FHLB. The liquidation process can take up to five years. | ||||||||||||||||||||||||
Unconsolidated Subsidiaries | ||||||||||||||||||||||||
ProAssurance holds investments in unconsolidated subsidiaries, accounted for under the equity method. The investments include the following: | ||||||||||||||||||||||||
31-Dec-14 | Carrying Value | |||||||||||||||||||||||
(In thousands) | Unfunded | Percentage | December 31, | December 31, | ||||||||||||||||||||
Commitments* | Ownership | 2014 | 2013 | |||||||||||||||||||||
Investment in LPs/LLCs: | ||||||||||||||||||||||||
Tax credit partnerships | $ | 15,537 | See below | $ | 133,143 | $ | 142,174 | |||||||||||||||||
Private debt funds | 27,578 | < | 20% | 37,296 | 13,233 | |||||||||||||||||||
Long equity fund | None | < | 20% | 6,747 | 6,574 | |||||||||||||||||||
Long/short equity funds | None | < | 25% | 25,301 | 28,385 | |||||||||||||||||||
Non-public equity funds | 80,070 | < | 20% | 58,128 | 23,870 | |||||||||||||||||||
Multi-strategy fund of funds | — | < | 20% | 8,271 | — | |||||||||||||||||||
Structured credit fund | — | < | 20% | 3,824 | — | |||||||||||||||||||
Real estate fund | 6,526 | < | 20% | 3,791 | — | |||||||||||||||||||
$ | 276,501 | $ | 214,236 | |||||||||||||||||||||
* Unfunded commitments are included in the carrying value of tax credit partnerships only. | ||||||||||||||||||||||||
Tax credit partnership interests held by ProAssurance generate investment returns by providing tax benefits to fund investors in the form of project operating losses and tax credits. The related properties are all qualified affordable housing projects. ProAssurance's ownership percentage relative to two of the tax credit partnership interests is almost 100%; these interests had a carrying value of $58.0 million at December 31, 2014. ProAssurance's ownership percentage relative to the remaining tax credit partnership interests is less than 20%; these interests had a carrying value of $75.1 million at December 31, 2014. All are accounted for under the equity method as ProAssurance does not have the ability to exert control over the partnerships. | ||||||||||||||||||||||||
The Private debt funds are structured to provide interest distributions primarily through diversified portfolios of private debt investments. | ||||||||||||||||||||||||
The Long equity fund targets long-term total returns through holdings in public international companies. | ||||||||||||||||||||||||
The Long/Short equity funds target absolute returns using strategies designed to take advantage of event-driven market opportunities. | ||||||||||||||||||||||||
The Non-public equity funds hold diversified private equities and are structured to provide capital appreciation. | ||||||||||||||||||||||||
The Multi-strategy fund of funds holds portfolios having little or no correlation to the broader fixed income and equity security markets. | ||||||||||||||||||||||||
The Structured credit fund seeks to obtain superior risk-adjusted absolute returns by acquiring and actively managing a diversified portfolio of debt securities. | ||||||||||||||||||||||||
The Real estate fund invests in multi-tenant industrial real estate with the objective of achieving superior absolute returns in all market cycles. | ||||||||||||||||||||||||
Investments Held in a Loss Position | ||||||||||||||||||||||||
The following tables provide summarized information with respect to investments held in an unrealized loss position at December 31, 2014 and December 31, 2013, including the length of time the investment had been held in a continuous unrealized loss position. | ||||||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||
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 | $ | 61,209 | $ | 987 | $ | 46,869 | $ | 617 | $ | 14,340 | $ | 370 | ||||||||||||
U.S. Government-sponsored enterprise obligations | 6,268 | 100 | 2,775 | 44 | 3,493 | 56 | ||||||||||||||||||
State and municipal bonds | 39,831 | 335 | 18,910 | 84 | 20,921 | 251 | ||||||||||||||||||
Corporate debt | 423,107 | 17,103 | 326,804 | 13,236 | 96,303 | 3,867 | ||||||||||||||||||
Residential mortgage-backed securities | 45,006 | 448 | 14,406 | 31 | 30,600 | 417 | ||||||||||||||||||
Agency commercial mortgage-backed securities | 4,783 | 59 | 70 | — | 4,713 | 59 | ||||||||||||||||||
Other commercial mortgage-backed securities | 13,860 | 99 | 7,005 | 28 | 6,855 | 71 | ||||||||||||||||||
Other asset-backed securities | 62,577 | 205 | 59,176 | 109 | 3,401 | 96 | ||||||||||||||||||
$ | 656,641 | $ | 19,336 | $ | 476,015 | $ | 14,149 | $ | 180,626 | $ | 5,187 | |||||||||||||
Other investments | ||||||||||||||||||||||||
Investments in LPs/LLCs carried at cost | $ | 23,683 | $ | 3,948 | $ | 22,265 | $ | 3,711 | $ | 1,418 | $ | 237 | ||||||||||||
31-Dec-13 | ||||||||||||||||||||||||
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 | $ | 47,668 | $ | 1,519 | $ | 44,304 | $ | 1,182 | $ | 3,364 | $ | 337 | ||||||||||||
U.S. Goverment-sponsored enterprise obligations | $ | 6,640 | $ | 425 | $ | 5,752 | $ | 321 | $ | 888 | $ | 104 | ||||||||||||
State and municipal bonds | 203,970 | 7,927 | 184,401 | 6,640 | 19,569 | 1,287 | ||||||||||||||||||
Corporate debt | 349,277 | 13,744 | 324,510 | 12,061 | 24,767 | 1,683 | ||||||||||||||||||
Residential mortgage-backed securities | 93,608 | 2,855 | 84,045 | 2,393 | 9,563 | 462 | ||||||||||||||||||
Agency commercial mortgage-backed securities | 11,658 | 136 | 11,082 | 116 | 576 | 20 | ||||||||||||||||||
Other commercial mortgage-backed securities | 11,153 | 167 | 10,215 | 159 | 938 | 8 | ||||||||||||||||||
Other asset-backed securities | 25,539 | 324 | 21,804 | 77 | 3,735 | 247 | ||||||||||||||||||
$ | 749,513 | $ | 27,097 | $ | 686,113 | $ | 22,949 | $ | 63,400 | $ | 4,148 | |||||||||||||
Other investments | ||||||||||||||||||||||||
Investments in LPs/LLCs carried at cost | $ | 14,752 | $ | 1,059 | $ | 13,166 | $ | 1,018 | $ | 1,586 | $ | 41 | ||||||||||||
As of December 31, 2014, excluding U.S. government backed securities, there were 588 debt securities (20.5% of all available-for-sale fixed maturity securities held) in an unrealized loss position representing 434 issuers. The greatest and second greatest unrealized loss position among those securities were approximately $1.7 million and $0.7 million, respectively. The securities were evaluated for impairment as of December 31, 2014. | ||||||||||||||||||||||||
As of December 31, 2013, excluding U.S. government backed securities, there were 714 debt securities (26.3% of all available-for-sale fixed maturity securities held) in an unrealized loss position representing 516 issuers. Both the greatest and the second greatest unrealized loss position among those securities approximated $0.4 million. The securities were evaluated for impairment as of December 31, 2013. | ||||||||||||||||||||||||
Each quarter, ProAssurance performs a detailed analysis for the purpose of assessing whether any of the securities it holds in an unrealized loss position have suffered an other-than-temporary impairment in value. A detailed discussion of the factors considered in the assessment is included in Note 1. | ||||||||||||||||||||||||
Fixed maturity securities held in an unrealized loss position at December 31, 2014, excluding asset-backed securities, have paid all scheduled contractual payments and are expected to continue doing so. Expected future cash flows of asset-backed securities held in an unrealized loss position were estimated as part of the December 31, 2014 impairment evaluation using the most recently available six-month historical performance data for the collateral (loans) underlying the security or, if historical data was not available, sector based assumptions, and equaled or exceeded the current amortized cost basis of the security. | ||||||||||||||||||||||||
Net Investment Income | ||||||||||||||||||||||||
Net investment income by investment category was as follows: | ||||||||||||||||||||||||
Year Ended December 31 | ||||||||||||||||||||||||
(In thousands) | 2014 | 2013 | 2012 | |||||||||||||||||||||
Fixed maturities | $ | 111,895 | $ | 122,065 | $ | 133,088 | ||||||||||||||||||
Equities | 10,817 | 9,454 | 6,947 | |||||||||||||||||||||
Short-term and Other investments | 8,833 | 2,584 | 660 | |||||||||||||||||||||
Business owned life insurance | 2,006 | 1,960 | 2,008 | |||||||||||||||||||||
Investment fees and expenses | (7,994 | ) | (6,798 | ) | (6,609 | ) | ||||||||||||||||||
Net investment income | $ | 125,557 | $ | 129,265 | $ | 136,094 | ||||||||||||||||||
Equity in Earnings (Loss) from Unconsolidated Subsidiaries | ||||||||||||||||||||||||
Equity in earnings (loss) from unconsolidated subsidiaries included losses due to amortization resulting from the allocable portion of the projected operating losses of qualified affordable housing project tax credits investments of $10.7 million, $10.1 million and $6.4 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||||||||||||||||||
During 2013, ProAssurance's interest in one of its LPs increased and ProAssurance therefore determined it appropriate to begin applying the equity method of accounting instead of the previously applied cost method. Under GAAP such a change from the cost to the equity method should be made on a retroactive basis with restatement of prior periods. ProAssurance did not restate prior periods related to this method change as the amounts were not material to 2013 or any of the prior periods affected. Accordingly, Equity in earnings (loss) of unconsolidated subsidiaries for 2013 included ProAssurance's portion of the LP’s accumulated earnings from the date of initial investment, which totaled $10.5 million, of which $8.4 million was related to prior periods. | ||||||||||||||||||||||||
Net Realized Investment Gains (Losses) | ||||||||||||||||||||||||
The following table provides detailed information regarding net realized investment gains (losses): | ||||||||||||||||||||||||
Year Ended December 31 | ||||||||||||||||||||||||
(In thousands) | 2014 | 2013 | 2012 | |||||||||||||||||||||
Total other-than-temporary impairment losses: | ||||||||||||||||||||||||
State and municipal bonds | $ | (50 | ) | $ | (71 | ) | $ | — | ||||||||||||||||
Residential mortgage-backed securities | — | — | (557 | ) | ||||||||||||||||||||
Corporate debt | (1,425 | ) | — | (878 | ) | |||||||||||||||||||
Other investments | — | — | (131 | ) | ||||||||||||||||||||
Portion recognized in (reclassified from) Other Comprehensive Income: | ||||||||||||||||||||||||
Corporate debt | 268 | — | (201 | ) | ||||||||||||||||||||
Net impairments recognized in earnings | (1,207 | ) | (71 | ) | (1,767 | ) | ||||||||||||||||||
Gross realized gains, available-for-sale securities | 5,627 | 18,130 | 18,645 | |||||||||||||||||||||
Gross realized (losses), available-for-sale securities | (1,103 | ) | (7,031 | ) | (2,076 | ) | ||||||||||||||||||
Net realized gains (losses), trading securities | 28,018 | 20,444 | 1,485 | |||||||||||||||||||||
Net realized gains (losses), Other investments | 326 | — | — | |||||||||||||||||||||
Change in unrealized holding gains (losses), trading securities | (18,883 | ) | 35,507 | 12,673 | ||||||||||||||||||||
Change in unrealized holding gains (losses), convertible securities, carried at fair value | 1,876 | — | — | |||||||||||||||||||||
Decrease (increase) in the fair value of liabilities carried at fair value | — | — | (1,245 | ) | ||||||||||||||||||||
Other | — | 925 | 1,148 | |||||||||||||||||||||
Net realized investment gains (losses) | $ | 14,654 | $ | 67,904 | $ | 28,863 | ||||||||||||||||||
Credit-related impairments related to two corporate debt instruments were recognized during 2014. Additionally, a non-credit impairment related to one of the instruments was recognized as the fair value of the instrument was less than the expected future cash flows from the security. No significant impairment losses were recognized during 2013. During 2012, impairment losses were recognized related to certain residential mortgage-backed securities because carrying values for those securities were greater than the future cash flows expected to be received from the securities, and impairment losses for corporate debt securities were recognized because the credit standing of the issuers had deteriorated. | ||||||||||||||||||||||||
The following table presents a roll forward of cumulative credit losses recorded in earnings related to impaired debt securities for which a portion of the other-than-temporary impairment was recorded in Other comprehensive income. | ||||||||||||||||||||||||
(In thousands) | 2014 | 2013 | 2012 | |||||||||||||||||||||
Balance January 1 | $ | 83 | $ | 3,301 | $ | 5,870 | ||||||||||||||||||
Additional credit losses recognized during the period, related to securities for which: | ||||||||||||||||||||||||
No OTTI has been previously recognized | 149 | — | — | |||||||||||||||||||||
OTTI has been previously recognized | — | — | 268 | |||||||||||||||||||||
Reductions due to: | ||||||||||||||||||||||||
Securities sold during the period (realized) | — | (3,218 | ) | (2,837 | ) | |||||||||||||||||||
Balance December 31 | $ | 232 | $ | 83 | $ | 3,301 | ||||||||||||||||||
Other information regarding sales and purchases of available-for-sale securities is as follows: | ||||||||||||||||||||||||
Year Ended December 31 | ||||||||||||||||||||||||
(In millions) | 2014 | 2013 | 2012 | |||||||||||||||||||||
Proceeds from sales (exclusive of maturities and paydowns) | $ | 244.9 | $ | 593.3 | $ | 500.2 | ||||||||||||||||||
Purchases | $ | 645.1 | $ | 519.2 | $ | 646.2 | ||||||||||||||||||
Reinsurance
Reinsurance | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Insurance [Abstract] | |||||||||||||||||||||||||
Reinsurance | Reinsurance | ||||||||||||||||||||||||
ProAssurance purchases reinsurance from third-party reinsurers and insurance enterprises in order to reduce its net exposure to losses. ProAssurance also uses reinsurance arrangements as a mechanism for sharing risk with insureds or their affiliates. | |||||||||||||||||||||||||
The effect of reinsurance on premiums written and earned was as follows: | |||||||||||||||||||||||||
(In thousands) | 2014 Premiums | 2013 Premiums | 2012 Premiums | ||||||||||||||||||||||
Written | Earned | Written | Earned | Written | Earned | ||||||||||||||||||||
Direct | $ | 761,043 | $ | 755,623 | $ | 566,745 | $ | 568,629 | $ | 536,318 | $ | 558,200 | |||||||||||||
Assumed | 18,566 | 12,987 | 802 | 804 | 113 | 116 | |||||||||||||||||||
Ceded | (77,760 | ) | (68,879 | ) | (42,365 | ) | (41,514 | ) | (8,133 | ) | (7,652 | ) | |||||||||||||
Net premiums | $ | 701,849 | $ | 699,731 | $ | 525,182 | $ | 527,919 | $ | 528,298 | $ | 550,664 | |||||||||||||
The Receivable from reinsurers on unpaid losses and loss adjustment expenses represents Management’s estimate of amounts that will be recoverable under ProAssurance reinsurance agreements. Most Company reinsurance agreements base the amount of premium that is due to the reinsurer in part on losses reimbursed or to be reimbursed under the agreement, and terms may also include maximum and minimum amounts of ceded premium. Ceded premium amounts are estimated based on Management’s expectation of ultimate losses and the portion of those losses that are allocable to reinsurers according to the terms of the agreements, including any minimums or maximums. Given the uncertainty of the ultimate amounts of losses, Management’s estimates of losses and related amounts recoverable may vary significantly from the eventual outcome. During the years ended December 31, 2014, 2013 and 2012 ProAssurance reduced premiums ceded by $15.7 million, $16.4 million and $34.3 million, respectively, due to changes in Management’s estimates of amounts due to reinsurers related to prior accident year loss recoveries. | |||||||||||||||||||||||||
Reinsurance contracts do not relieve ProAssurance from its obligations to policyholders and ProAssurance remains liable to its policyholders whether or not reinsurers honor their contractual obligations to ProAssurance. ProAssurance continually monitors its reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. | |||||||||||||||||||||||||
At December 31, 2014, $66.9 million of the net total amounts due from reinsurers of $259.1 million (including receivables related to paid and unpaid losses and LAE and prepaid reinsurance premiums, less reinsurance premiums payable) was due from three reinsurers which had an individual balance which exceeded $20 million. Each of these reinsurers had an A.M. Best credit rating of A or above. There were no individual reinsurers having a balance that exceeded 5% of shareholders’ equity. | |||||||||||||||||||||||||
At December 31, 2014 reinsurance recoverables totaling approximately $35 million were collateralized by letters of credit or funds withheld. ProAssurance had no allowance for credit losses related to its reinsurance receivables at December 31, 2014 or 2013 as all reinsurance balances were considered collectible. During the years ended December 31, 2014, 2013 and 2012 no reinsurance balances were written off for credit reasons. | |||||||||||||||||||||||||
There were no significant reinsurance commutations in 2014, 2013 or 2012. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Income Taxes | Income Taxes | ||||||||||||
Deferred income taxes reflect the net tax effects of temporary differences between the amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of ProAssurance’s deferred tax assets and liabilities were as follows: | |||||||||||||
(In thousands) | 2014 | 2013 | |||||||||||
Deferred tax assets | |||||||||||||
Unpaid loss discount | $ | 44,002 | $ | 51,879 | |||||||||
Unearned premium adjustment | 23,972 | 21,861 | |||||||||||
Compensation related | 18,623 | 18,172 | |||||||||||
Intangibles | 1,957 | 2,074 | |||||||||||
Total deferred tax assets | 88,554 | 93,986 | |||||||||||
Deferred tax liabilities | |||||||||||||
Deferred acquisition costs | 9,180 | 10,150 | |||||||||||
Unrealized gains on investments, net | 31,342 | 32,127 | |||||||||||
Fixed assets | 3,689 | 4,166 | |||||||||||
Basis differentials–investments | 31,657 | 31,247 | |||||||||||
Intangibles | 27,294 | 13,238 | |||||||||||
Other | 4,210 | 1,301 | |||||||||||
Total deferred tax liabilities | 107,372 | 92,229 | |||||||||||
Net deferred tax assets (liabilities) | $ | (18,818 | ) | $ | 1,757 | ||||||||
At December 31, 2014, ProAssurance had no available net operating loss carryforwards, capital loss carryforwards, or Alternative Minimum Tax credit carryforwards. ProAssurance files income tax returns in the U.S. federal jurisdiction and various states. | |||||||||||||
During 2013 the IRS issued a Notice of Proposed Adjustment (NOPA) to ProAssurance related to the 2009 and 2010 tax years. ProAssurance subsequently protested certain issues in the NOPA, all of which related to the timing of deductions. During 2014, ProAssurance and the IRS reached a final settlement on all contested issues which resulted in no additional tax liability for ProAssurance. The IRS subsequently refunded $30.6 million, exclusive of interest, to ProAssurance, reflecting both a refund from the settlement of non-contested issues addressed by the NOPA and the return of a protective payment made in 2013. | |||||||||||||
ProAssurance had receivables for federal income taxes of $1.1 million at December 31, 2014 and $27.3 million at December 31, 2013, both carried as a part of Other Assets. | |||||||||||||
The statute of limitations is now closed for all tax years prior to 2011. | |||||||||||||
A reconciliation of the beginning and ending amounts of unrecognized tax benefits for 2014 and 2013 was as follows: | |||||||||||||
(In thousands) | 2014 | 2013 | 2012 | ||||||||||
Balance at January 1 | $ | 4,823 | $ | 4,823 | $ | 18,585 | |||||||
Increase for tax position acquired as result of a business combination | 414 | — | — | ||||||||||
Increases for tax positions taken during the current year | 163 | — | — | ||||||||||
(Decreases) for tax positions taken during the current year | (4,823 | ) | — | (10,206 | ) | ||||||||
(Decreases) for tax positions taken during prior years | — | — | (3,556 | ) | |||||||||
Balance at December 31 | $ | 577 | $ | 4,823 | $ | 4,823 | |||||||
At December 31, 2014, all of ProAssurance's uncertain tax positions, if recognized, would affect the effective tax rate. None of ProAssurance's uncertain tax positions at December 31, 2013, if recognized, would have affected the effective tax rate. As with any uncertain tax position, there is a possibility that the ultimate benefit realized could differ from the estimate Management has established. Management does not expect any portion of unrecognized benefits at December 31, 2014 to reverse during the next twelve months. | |||||||||||||
ProAssurance recognizes interest and/or penalties related to income tax matters in income tax expense. Interest recognized in the income statement was not significant during the years ended December 31, 2014, and 2013 and approximated $0.5 million in 2012. The accrued liability for interest was not significant at December 31, 2014 and approximated $1.3 million at December 31, 2013. | |||||||||||||
A reconciliation of “expected” income tax expense (35% of income before income taxes) to actual income tax expense for each of the years ended December 31, 2014, 2013 and 2012 follows: | |||||||||||||
(In thousands) | 2014 | 2013 | 2012 | ||||||||||
Computed “expected” tax expense | $ | 91,702 | $ | 139,005 | $ | 138,588 | |||||||
Tax-exempt income | (13,250 | ) | (14,509 | ) | (14,374 | ) | |||||||
Tax credits, qualified affordable housing | (17,918 | ) | (17,888 | ) | (10,005 | ) | |||||||
Non-taxable gain on acquisition | — | (11,310 | ) | — | |||||||||
Non-U.S. Loss | 1,741 | — | — | ||||||||||
Other | 3,165 | 4,338 | 6,287 | ||||||||||
Total | $ | 65,440 | $ | 99,636 | $ | 120,496 | |||||||
Deferred_Policy_Acquisition_Co
Deferred Policy Acquisition Costs | 12 Months Ended |
Dec. 31, 2014 | |
Insurance [Abstract] | |
Deferred Policy Acquisition Costs | Deferred Policy Acquisition Costs |
Policy acquisition costs, that are primarily and directly related to the successful production of new and renewal insurance contracts, most significantly agent commissions, premium taxes and underwriting salaries and benefits, are capitalized as policy acquisition costs and amortized to expense, net of ceding commissions earned, as the related premium revenues are earned. | |
Amortization of deferred policy acquisition costs was $68.6 million, $53.2 million and $54.9 million for the years ended December 31, 2014, 2013 and 2012, respectively. |
Reserve_for_Losses_and_Loss_Ad
Reserve for Losses and Loss Adjustment Expenses | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Insurance [Abstract] | ||||||||||||
Reserve for Losses and Loss Adjustment Expenses | Reserve for Losses and Loss Adjustment Expenses | |||||||||||
The reserve for losses is established based on estimates of individual claims and actuarially determined estimates of future losses based on ProAssurance’s past loss experience, available industry data and projections as to future claims frequency, severity, inflationary trends and settlement patterns. Estimating the reserve, particularly the reserve appropriate for liability exposures, is a complex process. Claims may be resolved over an extended period of time, often five years or more, and may be subject to litigation. Estimating losses requires ProAssurance to make and revise judgments and assessments regarding multiple uncertainties over an extended period of time. As a result, the reserve estimate may vary significantly from the eventual outcome. The assumptions used in establishing ProAssurance’s reserve are regularly reviewed and updated by management as new data becomes available. Changes to estimates of previously established reserves are included in earnings in the period in which the estimate is changed. | ||||||||||||
ProAssurance believes that the methods it uses to establish reserves are reasonable and appropriate. Each year, ProAssurance uses internal actuaries to review the reserve for losses of each insurance subsidiary. ProAssurance also engages consulting actuaries to review ProAssurance claims data and provide observations regarding cost trends, rate adequacy and ultimate loss costs. ProAssurance considers the views of the actuaries as well as other factors, such as known, anticipated or estimated changes in frequency and severity of claims and loss retention levels and premium rates, in establishing the amount of its reserve for losses. The statutory filings of each insurance company with the insurance regulators must be accompanied by a consulting actuary's certification as to their respective reserves in accordance with the requirements of the NAIC. | ||||||||||||
Activity in the reserve for losses and loss adjustment expenses is summarized as follows: | ||||||||||||
(In thousands) | 2014 | 2013 | 2012 | |||||||||
Balance, beginning of year | $ | 2,072,822 | $ | 2,054,994 | $ | 2,247,772 | ||||||
Less reinsurance recoverables on unpaid losses and loss adjustment expenses | 247,518 | 191,645 | 247,658 | |||||||||
Net balance, beginning of year | 1,825,304 | 1,863,349 | 2,000,114 | |||||||||
Net reserves acquired from acquisitions | 139,549 | 126,007 | 22,464 | |||||||||
Net losses: | ||||||||||||
Current year | 545,168 | 447,510 | 451,951 | |||||||||
Favorable development of reserves established in prior years, net | (182,084 | ) | (222,749 | ) | (272,038 | ) | ||||||
Total | 363,084 | 224,761 | 179,913 | |||||||||
Paid related to: | ||||||||||||
Current year | (93,737 | ) | (43,616 | ) | (38,439 | ) | ||||||
Prior years | (413,900 | ) | (345,197 | ) | (300,703 | ) | ||||||
Total paid | (507,637 | ) | (388,813 | ) | (339,142 | ) | ||||||
Net balance, end of year | 1,820,300 | 1,825,304 | 1,863,349 | |||||||||
Plus reinsurance recoverables on unpaid losses and loss adjustment expenses | 237,966 | 247,518 | 191,645 | |||||||||
Balance, end of year | $ | 2,058,266 | $ | 2,072,822 | $ | 2,054,994 | ||||||
As discussed in Note 1, estimating liability reserves is complex and requires the use of many assumptions. As time passes and ultimate losses for prior years are either known or become subject to a more precise estimation, ProAssurance increases or decreases the reserve estimates established in prior periods. The favorable loss development recognized in 2014 primarily reflects a lower than anticipated claims severity trend (i.e. the average size of a claim) for accident years 2007 through 2011. The favorable development recognized in 2013 and 2012 was primarily due to lower than anticipated claims severity trends for accident years 2005 through 2011 and accident years 2004 through 2009, respectively. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Commitments and Contingencies Disclosure [Abstract] | ||||
Commitments and Contingencies | Commitments and Contingencies | |||
ProAssurance is involved in various legal actions related to insurance policies and claims handling including, but not limited to, claims asserted by policyholders. These types of legal actions arise in the Company’s ordinary course of business and, in accordance with GAAP for insurance entities, are considered as a part of the Company’s loss reserving process, which is described in detail under the heading "Losses and Loss Adjustment Expenses” in the Accounting Policies section of Note 1. | ||||
ProAssurance has funding commitments primarily related to non-public investment entities totaling approximately $169.4 million, expected to be paid as follows: $98.8 million in 2015, $69.2 million in 2016 and 2017 combined, $0.6 million in 2018 and 2019 combined, and $0.8 million thereafter. Of these funding commitments, $15.5 million are related to qualified affordable housing project tax credit investments and are expected to be paid as follows: $14.1 million in 2015, $0.5 million in 2016 and 2017 combined, $0.3 million in 2018 and 2019 combined and $0.6 million thereafter. | ||||
As a member of Lloyd's and a capital provider to Syndicate 1729, ProAssurance is required to provide capital, referred to as FAL. At December 31, 2014, ProAssurance is satisfying the FAL requirement with investment securities on deposit with Lloyd's with a carrying value of $85.2 million (see Note 4). At December 31, 2013, the FAL requirement was primarily met through a standby letter of credit (LOC). | ||||
ProAssurance has issued an unconditional revolving credit agreement (the "Syndicate Credit Agreement") of up to £10 million ($16 million at December 31, 2014) to the Premium Trust Fund of Syndicate 1729 for the purpose of providing working capital. Advances under the Syndicate Credit Agreement bear interest at 8.5% annually, and are repayable upon demand after December 31, 2016. As of December 31, 2014, £6.6 million ($11.0 million) had been advanced under the Syndicate Credit Agreement. | ||||
ProAssurance is involved in a number of operating leases primarily for office space and office equipment. The following is a schedule of future minimum lease payments for operating leases that had initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2014. | ||||
Operating Leases | ||||
(In thousands) | ||||
2015 | $ | 5,024 | ||
2016 | 4,915 | |||
2017 | 3,601 | |||
2018 | 2,965 | |||
2019 | 2,572 | |||
Thereafter | 5,232 | |||
Total minimum lease payments | $ | 24,309 | ||
ProAssurance incurred rent expense of $5.0 million, $3.2 million and $2.7 million in the years ended December 31, 2014, 2013 and 2012, respectively. |
Longterm_Debt
Long-term Debt | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Debt Disclosure [Abstract] | ||||||||
Long-term Debt | Long-term Debt | |||||||
ProAssurance’s outstanding long-term debt consisted of the following: | ||||||||
(In thousands) | December 31, | December 31, | ||||||
2014 | 2013 | |||||||
Senior notes due 2023, unsecured, interest at 5.3% annually | $ | 250,000 | $ | 250,000 | ||||
Revolving credit agreement, outstanding borrowings not permitted to exceed $200 million aggregately, expires in 2016 | — | — | ||||||
$ | 250,000 | $ | 250,000 | |||||
Senior Notes due 2023 (the Senior Notes) | ||||||||
The Senior Notes are the unsecured obligations of ProAssurance Corporation, due in full in November 2023, unless sooner redeemed, with interest payable semiannually. Redemptions may be made prior to maturity, in whole or part, at the greater of par or the sum of the present values of the outstanding principal and remaining interest payments calculated at 40 basis points above the then-current rate for U.S. Treasury Notes with a term comparable to the remaining term of the Senior Notes. There are no financial covenants associated with the Senior Notes. | ||||||||
Revolving Credit Agreement | ||||||||
ProAssurance has entered into a revolving credit agreement (the “Credit Agreement”) with five participating lenders with an expiration date of April 15, 2016. The Credit Agreement permits ProAssurance to borrow, repay and reborrow from the lenders during the term of the Credit Agreement. All borrowings are required to be repaid prior to the expiration date of the Credit Agreement. ProAssurance is required to pay a commitment fee, ranging from 15 to 30 basis points based on ProAssurance’s credit ratings, on the average unused portion of the credit line during the term of the Credit Agreement. Borrowings under the Credit Agreement may be secured or unsecured and accrue interest at a selected base rate, adjusted by a margin, which can vary from 0 to 188 basis points, based on ProAssurance’s credit rating and whether the borrowing is secured or unsecured. The base rate selected may either be the current one-, three- or six-month LIBOR rate, with the LIBOR term selected fixing the interest period for which the rate is effective. If LIBOR is not selected, the base rate defaults to the highest of (1) the Prime rate (2) the Federal Funds rate plus 50 basis points or (3) the one month LIBOR rate plus 100 basis points, determined daily. Rates are reset each successive interest period until the borrowing is repaid. | ||||||||
The Credit Agreement contains customary representations, covenants and events constituting default, and remedies for default. Additionally, the Credit Agreement carries the following financial covenants: | ||||||||
-1 | ProAssurance is not permitted to have a leverage ratio of Consolidated Funded Indebtedness (principally, obligations for borrowed money, obligations evidenced by instruments such as notes or acceptances, standby and commercial Letters of Credit, and contingent obligations) to Consolidated Total Capitalization (principally, total non-trade liabilities on a consolidated basis plus consolidated shareholders’ equity, exclusive of accumulated other comprehensive income) greater than 0.35 to 1.0, determined at the end of each fiscal quarter. | |||||||
-2 | ProAssurance is required to maintain a minimum net worth of not less than the sum of 75% of Consolidated Net Worth (consolidated shareholders’ equity, exclusive of accumulated other comprehensive income) at December 31, 2010, plus 50% of consolidated net income earned each fiscal quarter, if positive, beginning with the quarter ending March 31, 2011, plus 100% of net cash proceeds resulting from the issuance of ProAssurance capital stock. | |||||||
Funds borrowed under the terms of the Credit Agreement will be used for general corporate purposes, including, but not limited to, use as short-term working capital, funding for share repurchases as authorized by the Board, and for support of other activities ProAssurance enters into in the normal course of business. | ||||||||
Covenant Compliance | ||||||||
ProAssurance is currently in compliance with all covenants. | ||||||||
Loss on Extinguishment | ||||||||
ProAssurance recognized a $2.2 million loss on extinguishment of debt during 2012 upon repayment of a note payable carried at fair value. |
Shareholders_Equity
Shareholders' Equity | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Equity [Abstract] | |||||||||||||
Shareholders' Equity | Shareholders’ Equity | ||||||||||||
At December 31, 2014 and 2013, ProAssurance had 100 million shares of authorized common stock and 50 million shares of authorized preferred stock. The Board has the authority to determine provisions for the issuance of preferred shares, including the number of shares to be issued, the designations, powers, preferences and rights, and the qualifications, limitations or restrictions of such shares. To date, the Board has not approved the issuance of preferred stock. | |||||||||||||
The following is a summary of changes in common shares issued and outstanding during the years ended December 31, 2014, 2013 and 2012: | |||||||||||||
(In thousands of shares) | 2014 | 2013 | 2012 | ||||||||||
Issued and outstanding shares - January 1 | 61,197 | 61,624 | 61,107 | ||||||||||
Repurchase of shares | (4,909 | ) | (681 | ) | — | ||||||||
Shares issued due to exercise of options and vesting of share-based compensation awards | 154 | 169 | 436 | ||||||||||
Other shares issued for compensation and shares reissued to stock purchase plan* | 92 | 85 | 81 | ||||||||||
Issued and outstanding shares - December 31 | 56,534 | 61,197 | 61,624 | ||||||||||
* | Shares issued were valued at fair value (the market price of a ProAssurance common share on the date of issue). | ||||||||||||
As of December 31, 2014, approximately 2.7 million of ProAssurance's authorized common shares were reserved by the Board for award or issuance under the incentive compensation plans described in Note 12 and an additional 0.8 million of authorized common shares were reserved for the issuance of currently outstanding restricted share and performance share unit awards and for the exercise of outstanding stock options. | |||||||||||||
ProAssurance declared cash dividends during 2014, 2013 and 2012 as follows: | |||||||||||||
Cash Dividends Declared, per Share | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
First Quarter | $ | 0.3 | $ | 0.25 | $ | 0.125 | |||||||
Second Quarter | $ | 0.3 | $ | 0.25 | $ | 0.125 | |||||||
Third Quarter | $ | 0.3 | $ | 0.25 | $ | 0.125 | |||||||
Fourth Quarter* | $ | 2.96 | $ | 0.3 | $ | 2.75 | |||||||
* Includes special dividends of $2.65 per share in 2014 and $2.50 per share in 2012. | |||||||||||||
Dividends declared during 2014, 2013 and 2012 totaled $220.5 million, $64.8 million and $192.5 million, respectively. These dividends were paid in the month following the quarter in which they were declared, except for fourth quarter 2012 dividends for which payment was accelerated into December 2012. | |||||||||||||
ProAssurance's ability to pay dividends to its shareholders is limited by its holding company structure, to the extent of the net assets held by its insurance subsidiaries, as discussed in Note 17. Otherwise, there are no other regulatory restrictions on ProAssurance's retained earnings or net income that materially impact its ability to pay dividends. Based on Shareholders' Equity at December 31, 2014, total equity of $239 million was free of debt covenant restrictions regarding the payment of dividends. However, any decision to pay future cash dividends is subject to the Board’s final determination after a comprehensive review of financial performance, future expectations and other factors deemed relevant by the Board. | |||||||||||||
As of December 31, 2014 Board authorizations for the repurchase of common shares or the retirement of outstanding debt of $181.5 million remained available for use. The timing and quantity of purchases depends upon market conditions and changes in ProAssurance's capital requirements and is subject to limitations that may be imposed on such purchases by applicable securities laws and regulations, and the rules of the New York Stock Exchange. | |||||||||||||
Other Comprehensive Income (Loss) (OCI) | |||||||||||||
For the years ended December 31, 2014, 2013 and 2012, OCI was primarily comprised of unrealized gains and losses arising during the period related to available-for-sale securities, less reclassification adjustments as shown in the table below, net of tax. At December 31, 2014 and 2013, accumulated other comprehensive income was comprised primarily of unrealized gains and losses from available-for-sale securities, including non-credit impairment losses of $0.8 million and 0.5 million, respectively, net of tax. All tax effects were computed using a 35% rate. OCI and accumulated other comprehensive income also included immaterial amounts of foreign currency translation adjustments. | |||||||||||||
Amounts reclassified from accumulated other comprehensive income to net income and the amounts of deferred tax expense (benefit) included in OCI were as follows: | |||||||||||||
(In thousands) | 2014 | 2013 | 2012 | ||||||||||
Reclassifications from accumulated other comprehensive income to net income, available-for-sale securities: | |||||||||||||
Realized investment gains (losses) | $ | 3,317 | $ | 11,375 | $ | 17,350 | |||||||
Non-credit impairment losses reclassified to earnings, due to sale of securities or reclassification as a credit loss | — | (347 | ) | (2,417 | ) | ||||||||
Total amounts reclassified, before tax effect | 3,317 | 11,028 | 14,933 | ||||||||||
Tax effect (at 35%) | (1,161 | ) | (3,860 | ) | (5,227 | ) | |||||||
Net reclassification adjustments | $ | 2,156 | $ | 7,168 | $ | 9,706 | |||||||
Deferred tax expense (benefit) included in OCI | $ | (785 | ) | $ | (46,157 | ) | $ | 8,262 | |||||
ShareBased_Payments
Share-Based Payments | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||
Share-Based Payments | Share-Based Payments | |||||||||||||||||||||
Share-based compensation costs are primarily classified as underwriting, policy acquisition and operating expenses. | ||||||||||||||||||||||
Since May 2013, ProAssurance has provided share-based compensation to employees under the ProAssurance Corporation Amended and Restated 2014 Equity Incentive Plan. Previously, compensation was provided under the ProAssurance Corporation 2008 Equity Incentive Plan (2009 to May 2013), and the ProAssurance Corporation 2004 Equity Incentive Plan (2005 to 2008). The Compensation Committee of the Board is responsible for the administration of each plan. | ||||||||||||||||||||||
ProAssurance has provided share-based compensation to employees utilizing four types of awards: stock options, restricted share units, performance share units and purchase match units. The following table provides a summary of compensation expense and compensation cost that will be charged to expense in future periods, by award type, and the total related tax benefit recognized during each period. There was no compensation expense related to stock option awards in 2014, 2013 or 2012. | ||||||||||||||||||||||
Share-Based | Unrecognized Compensation Cost | |||||||||||||||||||||
Compensation Expense | ||||||||||||||||||||||
Year Ended December 31 | 31-Dec-14 | |||||||||||||||||||||
2014 | 2013 | 2012 | Amount | Remaining | ||||||||||||||||||
Recognition Period | ||||||||||||||||||||||
(In millions) | (In millions) | (Weighted average years) | ||||||||||||||||||||
Restricted Share Units | 1.7 | 1.6 | 1.6 | 2 | 1.8 | |||||||||||||||||
Performance Share Units | 7.6 | 7.1 | 6.7 | 6.3 | 1.7 | |||||||||||||||||
Purchase Match Units | 0.8 | 0.5 | 0.3 | 1.6 | 2.2 | |||||||||||||||||
Total share-based compensation expense | $ | 10.1 | $ | 9.2 | $ | 8.6 | $ | 9.9 | ||||||||||||||
Tax benefit recognized | $ | 3.5 | $ | 3.2 | $ | 3 | ||||||||||||||||
The above awards are charged to expense as an increase to equity over the service period (generally the vesting period) associated with the award. Awards vest in their entirety at the end of a three-year period following the grant date based on a continuous service requirement and, for performance share units, achievement of a performance objective. Partial vesting is permitted for retirees. A ProAssurance common share is issued for each restricted, performance or purchase match unit once vesting requirements are met, except that units sufficient to satisfy required tax withholdings are paid in cash. | ||||||||||||||||||||||
Stock Options | ||||||||||||||||||||||
Activity for ProAssurance stock option awards during 2014, 2013 and 2012 is summarized below. | ||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||
Options | Weighted | Options | Weighted | Options | Weighted | |||||||||||||||||
Average | Average | Average | ||||||||||||||||||||
Exercise | Exercise | Exercise | ||||||||||||||||||||
Price | Price | Price | ||||||||||||||||||||
Outstanding, beginning of year | 18,082 | $ | 23 | 20,302 | $ | 23.15 | 1,014,661 | $ | 22.76 | |||||||||||||
Granted | — | — | — | — | — | — | ||||||||||||||||
Exercised | (13,626 | ) | 22.47 | (2,220 | ) | 24.28 | (994,148 | ) | 22.75 | |||||||||||||
Forfeited or expired | — | — | — | — | (211 | ) | 25.67 | |||||||||||||||
Outstanding at end of year | 4,456 | 24.64 | 18,082 | 23 | 20,302 | 23.15 | ||||||||||||||||
Exercisable at end of year | 4,456 | 24.64 | 18,082 | 23 | 20,302 | 23.15 | ||||||||||||||||
Outstanding at end of year, | 4,456 | 24.64 | 18,082 | 23 | 20,302 | 23.15 | ||||||||||||||||
vested or expected to vest | ||||||||||||||||||||||
All options were vested as of December 31, 2012. The aggregate grant date fair value of options vested during the year ended December 31, 2012 was $0.9 million. The aggregate intrinsic value of options exercised during 2014, 2013 and 2012 was $0.3 million, $0.1 million and $19.8 million, respectively. ProAssurance outstanding options had an aggregate intrinsic value of $0.1 million and a weighted average remaining contractual term of 2.44 years at December 31, 2014. All ProAssurance option agreements permit cashless exercise whereby the exercise price and any required tax withholdings are allowed to be satisfied by the retention of shares that would otherwise be deliverable to the option holder. ProAssurance issues new shares for options exercised. There were no cash proceeds from options exercised during the years ended December 31, 2014, 2013 or 2012. | ||||||||||||||||||||||
Restricted Share Units | ||||||||||||||||||||||
Activity for restricted share units during 2014, 2013 and 2012 is summarized below. Grant date fair values are based on the market value of a ProAssurance common share on the date of grant. | ||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||
Units | Weighted | Units | Weighted | Units | Weighted | |||||||||||||||||
Average | Average | Average | ||||||||||||||||||||
Grant Date | Grant Date | Grant Date | ||||||||||||||||||||
Fair Value | Fair Value | Fair Value | ||||||||||||||||||||
Beginning non-vested balance | 138,770 | $ | 38.92 | 157,212 | $ | 31.94 | 167,236 | $ | 25.52 | |||||||||||||
Granted | 49,750 | 46.34 | 39,400 | 46.97 | 51,864 | 42.22 | ||||||||||||||||
Forfeited | (2,044 | ) | 44.88 | (603 | ) | 35.91 | (2,823 | ) | 35.23 | |||||||||||||
Vested and released | (49,674 | ) | 29.22 | (57,239 | ) | 25.25 | (59,065 | ) | 22.61 | |||||||||||||
Ending non-vested balance | 136,802 | 45.02 | 138,770 | 38.92 | 157,212 | 31.94 | ||||||||||||||||
The aggregate grant date fair value of restricted share units vested and released in 2014, 2013 and 2012 totaled $1.5 million, $1.4 million and $1.3 million, respectively. The aggregate intrinsic value of restricted share units vested and released in 2014, 2013 and 2012 (including units paid in cash to cover tax withholdings) totaled $2.3 million, $2.7 million and $2.6 million, respectively. | ||||||||||||||||||||||
Performance Share Units | ||||||||||||||||||||||
Performance share units vest only if minimum performance objectives are met, and the number of units earned varies from 75% to 125% of a base award depending upon the degree to which stated performance objectives are achieved. Performance share unit activity for 2014, 2013 and 2012 is summarized below. The table reflects the base number of units; actual awards that vest depends upon the extent to which performance objectives are achieved. Grant date fair values are based on the market value of a ProAssurance common share on the date of grant. | ||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||
Base Units | Weighted | Base Units | Weighted | Base Units | Weighted | |||||||||||||||||
Average | Average | Average | ||||||||||||||||||||
Grant Date | Grant Date | Grant Date | ||||||||||||||||||||
Fair Value | Fair Value | Fair Value | ||||||||||||||||||||
Beginning non-vested balance | 486,680 | $ | 39.86 | 552,417 | $ | 33.21 | 522,599 | $ | 26.36 | |||||||||||||
Granted | 160,900 | 46.34 | 145,580 | 46.97 | 212,205 | 42.22 | ||||||||||||||||
Forfeited | (14,221 | ) | 45.3 | (17,043 | ) | 38.9 | (20,492 | ) | 31.44 | |||||||||||||
Vested and released | (166,499 | ) | 31.33 | (194,274 | ) | 26.39 | (161,895 | ) | 23.13 | |||||||||||||
Ending non-vested balance | 466,860 | 44.97 | 486,680 | 39.86 | 552,417 | 33.21 | ||||||||||||||||
The aggregate grant date fair value of performance share units (base level) vested and released in 2014, 2013 and 2012 totaled $5.2 million, $5.1 million and $3.7 million, respectively. The aggregate intrinsic value of performance share units vested and released in 2014, 2013 and 2012 (including units paid in cash to cover tax withholdings) totaled $7.7 million, $9.1 million and $7.2 million, respectively. The vested units were issued at the maximum level (125%) based on performance levels achieved. | ||||||||||||||||||||||
Purchase Match Units | ||||||||||||||||||||||
The ProAssurance Corporation 2011 Employee Stock Ownership Plan provides a purchase match unit for each share purchased with contributions by eligible plan participants, with participant contributions subject to a $5,000 annual limit per participant. Purchase match unit activity during 2014, 2013 and 2012 is summarized below. Grant date fair values are based on the market value of a ProAssurance common share on the date of grant. | ||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||
Units | Weighted | Units | Weighted | Units | Weighted | |||||||||||||||||
Average | Average | Average | ||||||||||||||||||||
Grant Date | Grant Date | Grant Date | ||||||||||||||||||||
Fair Value | Fair Value | Fair Value | ||||||||||||||||||||
Beginning non-vested balance | 63,125 | $ | 41.34 | 40,985 | $ | 39.85 | 18,900 | $ | 36.2 | |||||||||||||
Granted | 29,069 | 44.55 | 25,151 | 43.57 | 23,799 | 42.59 | ||||||||||||||||
Forfeited | (2,968 | ) | 43.14 | (2,456 | ) | 40.71 | (1,610 | ) | 37.72 | |||||||||||||
Vested and released | (17,125 | ) | 36.61 | (555 | ) | 36.33 | (104 | ) | 36.2 | |||||||||||||
Ending non-vested balance | 72,101 | 43.69 | 63,125 | 41.34 | 40,985 | 39.85 | ||||||||||||||||
The aggregate grant date fair value of purchase match units vested and released in 2014 totaled $0.6 million and the aggregate intrinsic value of purchase match share units vested and released in 2014 (including units paid in cash to cover tax withholdings) totaled $0.8 million. In both 2013 and 2012 the aggregate grant date fair value and the aggregate intrinsic value of units vested were nominal as 2014 was the first full vesting period. |
Variable_Interest_Entities
Variable Interest Entities | 12 Months Ended |
Dec. 31, 2014 | |
Variable Interest Entities [Abstract] | |
Variable Interest Entities | Variable Interest Entities |
ProAssurance holds passive interests in a number of entities that are considered to be Variable Interest Entities (VIEs) under GAAP guidance. ProAssurance's VIE interests principally consist of interests in LPs/LLCs formed for the purpose of achieving diversified equity and debt returns. ProAssurance VIE interests carried as a part of Other investments totaled $33.3 million at December 31, 2014 and $27.3 million at December 31, 2013. ProAssurance VIE interests, carried as a part of Investment in unconsolidated subsidiaries, totaled $65.0 million at December 31, 2014 and $49.5 million at December 31, 2013. | |
ProAssurance has not consolidated these VIEs because it has either very limited or no power to control the activities that most significantly affect the economic performance of these entities and is not the primary beneficiary of any of the entities. ProAssurance’s involvement with each entity is limited to its direct ownership interest in the entity. ProAssurance has no arrangements with any of the entities to provide other financial support to or on behalf of the entity. At December 31, 2014, ProAssurance’s maximum loss exposure relative to these investments was limited to the carrying value of ProAssurance’s investment in the VIE. |
Earnings_Per_Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2014 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share |
Diluted weighted average shares is calculated as basic weighted average shares plus the effect, calculated using the treasury stock method, of assuming that dilutive stock options have been exercised and that performance, restricted, and purchase share units have vested. All outstanding stock options, performance, restricted, and purchase share units had a dilutive effect for the years ended December 31, 2014, 2013 and 2012. |
Segment_Information
Segment Information | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||
Segment Information | Segment Information | |||||||||||||||||||||||
ProAssurance operates in four segments that are organized around the nature of the products and services provided: Specialty P&C, Workers' Compensation, Lloyd's Syndicate, and Corporate. A description of each segment follows. | ||||||||||||||||||||||||
Specialty P&C is primarily focused on professional liability insurance and medical technology and life sciences products liability insurance. The professional liability business primarily offers professional liability insurance to healthcare providers and institutions and to attorneys and their firms. The medical technology and life sciences business offers products liability insurance for medical technology and life sciences companies that manufacture or distribute products. The Specialty P&C segment cedes certain premium to the Lloyd's Syndicate segment under an agreement with Syndicate 1729. As discussed below, Syndicate 1729 operating results are reported on a quarter delay. The ceded premium associated with the Syndicate 1729 reinsurance agreement has been reported within the Specialty P&C segment on a similar lag, as this results in the ceded premium being reported in the same period in which the Lloyd's Syndicate segment reports the corresponding assumed premium. | ||||||||||||||||||||||||
Workers' Compensation provides workers' compensation products primarily to employers with 1,000 or fewer employees. The segment also offers alternative market solutions whereby policies written are 100% ceded either to a captive insurer unaffiliated with ProAssurance or to SPCs operated by a wholly owned subsidiary of ProAssurance. The SPCs are fully or partially owned by the employer (or employer group, association or affiliate) insured by the policies ceded. Financial results (underwriting profit or loss, plus investment income) of the SPCs accrue to the owners of that cell. Our Workers' Compensation segment is comprised entirely of the business acquired through Eastern on January 1, 2014. | ||||||||||||||||||||||||
Lloyd's Syndicate includes operating results from ProAssurance's 58% participation in Lloyd's of London Syndicate 1729 that began writing business as of January 1, 2014. Syndicate 1729 underwrites risks over a wide range of property and casualty insurance and reinsurance lines. The results of this segment are reported on a quarter delay, except that investment results associated with the FAL investments and certain U.S. paid administrative expenses, primarily start-up costs, are reported concurrently as that information is available on an earlier time frame. | ||||||||||||||||||||||||
Corporate includes ProAssurance's U.S. investment operations, interest expense and U.S. income taxes, all of which are managed at the corporate level, non-premium revenues generated outside of our insurance entities, and corporate expenses. | ||||||||||||||||||||||||
The accounting policies of the segments are the same as those described in Note 1. ProAssurance evaluates performance of its Specialty P&C and Workers' Compensation segments based on before tax underwriting profit or loss, and excludes investment performance. Performance of the Lloyd's Syndicate segment is evaluated based on underwriting profit or loss, and investment results of investment assets solely allocated to Syndicate 1729 operations, net of U.K. income tax expense. Performance of the Corporate segment is evaluated based on the contribution made to consolidated after tax results. ProAssurance accounts for inter-segment sales and transfers as if the sales or transfers were to third parties at current market prices. Assets are not allocated to segments because investments and assets are not managed at the segment level. | ||||||||||||||||||||||||
Financial data by segment for the years December 31, 2014, 2013 and 2012 were as follows: | ||||||||||||||||||||||||
Year Ended December 31, 2014 | ||||||||||||||||||||||||
(In thousands) | Specialty P&C | Workers' Compensation | Lloyd's Syndicate | Corporate | Inter-segment Eliminations | Consolidated | ||||||||||||||||||
Net premiums earned | $ | 492,733 | $ | 194,540 | $ | 12,458 | $ | — | $ | — | $ | 699,731 | ||||||||||||
Net investment income | — | — | 410 | 125,147 | — | 125,557 | ||||||||||||||||||
Equity in earnings (loss) of unconsolidated subsidiaries | — | — | — | 3,986 | — | 3,986 | ||||||||||||||||||
Net realized gains (losses) | — | — | 4 | 14,650 | — | 14,654 | ||||||||||||||||||
Other income | 5,823 | 645 | 126 | 2,285 | (481 | ) | 8,398 | |||||||||||||||||
Net losses and loss adjustment expenses | (228,199 | ) | (126,447 | ) | (8,438 | ) | — | — | (363,084 | ) | ||||||||||||||
Underwriting, policy acquisition and operating expenses | (133,132 | ) | (60,357 | ) | (9,535 | ) | (8,768 | ) | 481 | (211,311 | ) | |||||||||||||
Segregated portfolio cells dividend expense | — | (1,842 | ) | — | — | — | (1,842 | ) | ||||||||||||||||
Interest expense | — | — | — | (14,084 | ) | — | (14,084 | ) | ||||||||||||||||
Income tax benefit (expense) | — | — | — | (65,440 | ) | — | (65,440 | ) | ||||||||||||||||
Segment operating results | $ | 137,225 | $ | 6,539 | $ | (4,975 | ) | $ | 57,776 | $ | — | $ | 196,565 | |||||||||||
Significant non-cash items | ||||||||||||||||||||||||
Depreciation and amortization | $ | 8,945 | $ | 5,828 | $ | 477 | $ | 35,073 | $ | — | $ | 50,323 | ||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||||||
(In thousands) | Specialty P&C | Workers' Compensation | Lloyd's Syndicate | Corporate | Inter-segment Eliminations | Consolidated | ||||||||||||||||||
Net premiums earned | $ | 527,919 | $ | — | $ | — | $ | — | $ | — | $ | 527,919 | ||||||||||||
Net investment income | — | — | — | 129,265 | — | 129,265 | ||||||||||||||||||
Equity in earnings (loss) of unconsolidated subsidiaries | — | — | — | 7,539 | — | 7,539 | ||||||||||||||||||
Net realized gains (losses) | — | — | — | 67,904 | — | 67,904 | ||||||||||||||||||
Other income | 5,648 | — | — | 1,910 | (7 | ) | 7,551 | |||||||||||||||||
Gain on acquisition | — | — | — | 32,314 | — | 32,314 | ||||||||||||||||||
Net losses and loss adjustment expenses | (224,761 | ) | — | — | — | — | (224,761 | ) | ||||||||||||||||
Underwriting, policy acquisition and operating expenses | (132,076 | ) | — | — | (15,748 | ) | 7 | (147,817 | ) | |||||||||||||||
Interest expense | — | — | — | (2,755 | ) | — | (2,755 | ) | ||||||||||||||||
Income tax benefit (expense) | — | — | — | (99,636 | ) | — | (99,636 | ) | ||||||||||||||||
Segment operating results | $ | 176,730 | $ | — | $ | — | $ | 120,793 | $ | — | $ | 297,523 | ||||||||||||
Significant non-cash items | ||||||||||||||||||||||||
Depreciation and amortization | $ | 7,199 | $ | — | $ | — | $ | 38,768 | $ | — | $ | 45,967 | ||||||||||||
Year Ended December 31, 2012 | ||||||||||||||||||||||||
(In thousands) | Specialty P&C | Workers' Compensation | Lloyd's Syndicate | Corporate | Inter-segment Eliminations | Consolidated | ||||||||||||||||||
Net premiums earned | $ | 550,664 | $ | — | $ | — | $ | — | $ | — | $ | 550,664 | ||||||||||||
Net investment income | — | — | — | 136,094 | — | 136,094 | ||||||||||||||||||
Equity in earnings (loss) of unconsolidated subsidiaries | — | — | — | (6,873 | ) | — | (6,873 | ) | ||||||||||||||||
Net realized gains (losses) | — | — | 28,863 | — | 28,863 | |||||||||||||||||||
Other income | 5,331 | — | — | 1,825 | (50 | ) | 7,106 | |||||||||||||||||
Gain on acquisition | — | — | — | — | — | — | ||||||||||||||||||
Net losses and loss adjustment expenses | (179,913 | ) | — | — | — | — | (179,913 | ) | ||||||||||||||||
Underwriting, policy acquisition and operating expenses | (125,292 | ) | — | — | (10,389 | ) | 50 | (135,631 | ) | |||||||||||||||
Interest expense | — | — | — | (2,181 | ) | — | (2,181 | ) | ||||||||||||||||
Loss on extinguishment of debt | — | — | — | (2,163 | ) | — | (2,163 | ) | ||||||||||||||||
Income tax benefit (expense) | — | (120,496 | ) | (120,496 | ) | |||||||||||||||||||
Segment operating results | $ | 250,790 | $ | — | $ | — | $ | 24,680 | $ | — | $ | 275,470 | ||||||||||||
Significant non-cash items | ||||||||||||||||||||||||
Depreciation and amortization | $ | 7,355 | $ | — | $ | — | $ | 30,218 | $ | — | $ | 37,573 | ||||||||||||
The following table provides detailed information regarding gross premiums earned by major category within each segment as well as a reconciliation to net premiums earned. All gross premiums earned are from external customers except as noted. ProAssurance's insured risks are primarily within the United States. | ||||||||||||||||||||||||
Year Ended December 31 | ||||||||||||||||||||||||
(In thousands) | 2014 | 2013 | 2012 | |||||||||||||||||||||
Specialty P&C Segment | ||||||||||||||||||||||||
Gross premiums earned: | ||||||||||||||||||||||||
Healthcare professional liability | $ | 477,031 | $ | 507,222 | $ | 539,729 | ||||||||||||||||||
Legal professional liability | 28,278 | 27,162 | 17,042 | |||||||||||||||||||||
Medical technology and life sciences products liability | 35,913 | 33,242 | — | |||||||||||||||||||||
Other | 1,830 | 1,807 | 1,545 | |||||||||||||||||||||
Ceded premiums earned* | (50,319 | ) | (41,514 | ) | (7,652 | ) | ||||||||||||||||||
Segment net premiums earned | $ | 492,733 | $ | 527,919 | $ | 550,664 | ||||||||||||||||||
Workers' Compensation Segment | ||||||||||||||||||||||||
Gross premiums earned: | ||||||||||||||||||||||||
Traditional business | $ | 160,717 | $ | — | $ | — | ||||||||||||||||||
Alternative market business | 55,616 | — | — | |||||||||||||||||||||
Ceded premiums earned | (21,793 | ) | — | — | ||||||||||||||||||||
Segment net premiums earned | $ | 194,540 | $ | — | $ | — | ||||||||||||||||||
Lloyd's Syndicate Segment | ||||||||||||||||||||||||
Gross premiums earned: | ||||||||||||||||||||||||
Property and casualty* | $ | 13,429 | $ | — | $ | — | ||||||||||||||||||
Ceded premiums earned | (971 | ) | — | — | ||||||||||||||||||||
Segment net premiums earned | $ | 12,458 | $ | — | $ | — | ||||||||||||||||||
Consolidated net premiums earned | $ | 699,731 | $ | 527,919 | $ | 550,664 | ||||||||||||||||||
* Includes premium ceded from the Specialty P&C Segment to the Lloyd's Syndicate Segment of $4.2 million for year ended December 31, 2014. |
Benefit_Plans
Benefit Plans | 12 Months Ended |
Dec. 31, 2014 | |
Compensation and Retirement Disclosure [Abstract] | |
Benefit Plans | Benefit Plans |
ProAssurance maintains a defined contribution savings and retirement plan (the ProAssurance Savings Plan) that is intended to provide retirement income to eligible employees. The plan provides for employer contributions to the plan of between 5% and 10% of salary for qualified employees. During 2014 and 2013, ProAssurance also maintained similar plans of acquired entities prior to the plans being merged into the ProAssurance Savings Plan. ProAssurance incurred expense related to savings and retirement plans of $6.0 million, $5.1 million and $4.6 million during the years ended December 31, 2014, 2013 and 2012, respectively. | |
ProAssurance also maintains a non-qualified deferred compensation plan (the ProAssurance Plan) that allows participating management employees to defer a portion of their current salary. ProAssurance incurred expense related to the ProAssurance Plan, as well as another plan acquired as part of a business combination, of $0.3 million during the year ended December 31, 2014 and $0.4 million during each of the years ended December 31, 2013 and 2012. ProAssurance deferred compensation liabilities totaled $14.0 million, and $13.1 million at December 31, 2014. and 2013, respectively. The liabilities included amounts due under the ProAssurance Plan and amounts due under individual agreements with current or former employees. |
Statutory_Accounting_and_Divid
Statutory Accounting and Dividend Restrictions | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Statutory Accounting And Dividend Restrictions [Abstract] | |||||||||
Statutory Accounting and Dividend Restrictions | Statutory Accounting and Dividend Restrictions | ||||||||
ProAssurance’s domestic U.S. insurance subsidiaries are required to file statutory financial statements with state insurance regulatory authorities, prepared based upon statutory accounting practices prescribed or permitted by regulatory authorities. ProAssurance did not use any prescribed or permitted statutory accounting practices that differed from the National Association of Insurance Commissioners' statutory accounting practices at December 31, 2014, 2013 or 2012. Differences between net income prepared in accordance with GAAP and statutory net income are principally due to: (a) policy acquisition and certain software and equipment costs which are deferred under GAAP but expensed for statutory purposes and (b) certain deferred income taxes which are recognized under GAAP but are not recognized for statutory purposes. | |||||||||
The NAIC specifies risk-based capital requirements for property and casualty insurance providers. At December 31, 2014 actual statutory capital and surplus for each of ProAssurance’s insurance subsidiaries substantially exceeded the regulatory requirements. Net earnings and capital and surplus of ProAssurance’s insurance subsidiaries on a statutory basis are shown in the following table. | |||||||||
(In millions) | |||||||||
Statutory Net Earnings | Statutory Capital and Surplus | ||||||||
2014 | 2013 | 2012 | 2014 | 2013 | |||||
$246 | $256 | $312 | $1,681 | $1,642 | |||||
At December 31, 2014 $1.9 billion of ProAssurance's consolidated net assets were held at its domestic insurance subsidiaries, of which approximately $230 million are permitted to be paid as dividends over the course of 2015 without prior approval of state insurance regulators. However, the payment of any dividend requires prior notice to the insurance regulator in the state of domicile and the regulator may prevent the dividend if, in its judgment, payment of the dividend would have an adverse effect on the capital and surplus of the insurance subsidiary. |
Quarterly_Results_of_Operation
Quarterly Results of Operations (unaudited) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Quarterly Financial Data [Abstract] | |||||||||||||||||
Quarterly Results of Operations (unaudited) | Quarterly Results of Operations (unaudited) | ||||||||||||||||
The following is a summary of unaudited quarterly results of operations for 2014 and 2013: | |||||||||||||||||
2014 | |||||||||||||||||
(In thousands, except per share data) | 1st | 2nd | 3rd | 4th | |||||||||||||
Net premiums earned | $ | 171,730 | $ | 176,303 | $ | 177,028 | $ | 174,670 | |||||||||
Net losses and loss adjustment expenses: | |||||||||||||||||
Current year | 137,647 | 141,126 | 142,124 | 124,271 | |||||||||||||
Prior year | (48,139 | ) | (42,213 | ) | (42,902 | ) | (48,830 | ) | |||||||||
Net income | 46,731 | 49,942 | 34,778 | 65,114 | |||||||||||||
Basic earnings per share* | 0.76 | 0.84 | 0.59 | 1.13 | |||||||||||||
Diluted earnings per share* | 0.76 | 0.84 | 0.59 | 1.12 | |||||||||||||
2013 | |||||||||||||||||
(In thousands, except per share data) | 1st | 2nd | 3rd | 4th | |||||||||||||
Net premiums earned | $ | 134,578 | $ | 130,352 | $ | 133,598 | $ | 129,392 | |||||||||
Net losses and loss adjustment expenses: | |||||||||||||||||
Current year | 110,726 | 109,109 | 110,987 | 116,689 | |||||||||||||
Prior year | (53,100 | ) | (38,500 | ) | (49,350 | ) | (81,799 | ) | |||||||||
Net income | 112,850 | 50,451 | 63,357 | 70,864 | |||||||||||||
Basic earnings per share* | 1.83 | 0.82 | 1.02 | 1.15 | |||||||||||||
Diluted earnings per share* | 1.82 | 0.81 | 1.02 | 1.14 | |||||||||||||
* | Quarterly and year-to-date computations of per share amounts are made independently; therefore, the sum of per share amounts for the quarters may not equal per share amounts for the respective year-to-date periods. |
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events |
In January 2015, ProAssurance drew $100 million against its revolving credit agreement on a secured basis. Refer to Note 10 for further discussion of the terms of the revolving credit agreement. |
Schedule_I_Summary_of_Investme
Schedule I - Summary of Investments-Other Than Investments In Related Parties | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Summary of Investments, Other than Investments in Related Parties [Abstract] | |||||||||||||
Schedule I - Summary of Investments Other than Investments in Related Parties | |||||||||||||
Type of Investment | Recorded | Fair | Amount Which is | ||||||||||
Cost | Value | Presented | |||||||||||
Basis | in the | ||||||||||||
Balance Sheet | |||||||||||||
(In thousands) | |||||||||||||
Fixed Maturities | |||||||||||||
Bonds: | |||||||||||||
U.S. Government or government agencies and authorities | $ | 201,736 | $ | 206,075 | $ | 206,075 | |||||||
States, municipalities and political subdivisions | 1,015,555 | 1,062,615 | 1,062,615 | ||||||||||
Foreign Governments | 2,709 | 2,871 | 2,871 | ||||||||||
Public utilities | 80,086 | 83,668 | 83,668 | ||||||||||
All other corporate bonds | 1,307,025 | 1,330,412 | 1,330,412 | ||||||||||
Certificates of deposit | 150 | 150 | 150 | ||||||||||
Mortgage-backed securities | 448,216 | 459,236 | 459,236 | ||||||||||
Total Fixed Maturities | 3,055,477 | 3,145,027 | 3,145,027 | ||||||||||
Equity Securities, trading | |||||||||||||
Common Stocks: | |||||||||||||
Public utilities | 6,559 | 7,981 | 7,981 | ||||||||||
Banks, trusts and insurance companies | 75,171 | 79,341 | 79,341 | ||||||||||
Industrial, miscellaneous and all other | 201,377 | 227,160 | 227,160 | ||||||||||
Total Equity Securities, trading | 283,107 | 314,482 | 314,482 | ||||||||||
Other long-term investments | 418,939 | 421,655 | 418,939 | ||||||||||
Short-term investments | 131,259 | 131,259 | 131,259 | ||||||||||
Total Investments | $ | 3,888,782 | $ | 4,012,423 | $ | 4,009,707 | |||||||
Schedule_II_Condensed_Financia
Schedule II - Condensed Financial Information of Registrant | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||
Schedule II - Condensed Financial Information of Registrant | ProAssurance Corporation – Registrant Only | ||||||||||||
Condensed Balance Sheets | |||||||||||||
December 31 | |||||||||||||
(In thousands) | 2014 | 2013 | |||||||||||
Assets | |||||||||||||
Investment in subsidiaries, at equity | $ | 2,145,358 | $ | 1,996,721 | |||||||||
Fixed maturities available for sale, at fair value | 203,451 | 86,603 | |||||||||||
Equity securities, trading, at fair value | — | 12,043 | |||||||||||
Short-term investments | 42,790 | 191,991 | |||||||||||
Cash and cash equivalents | 87,200 | 37,459 | |||||||||||
Restricted cash | — | 78,000 | |||||||||||
Due from subsidiaries | 87,719 | 12,014 | |||||||||||
Other assets | 25,736 | 255,313 | |||||||||||
Total Assets | $ | 2,592,254 | $ | 2,670,144 | |||||||||
Liabilities and Shareholders’ Equity | |||||||||||||
Liabilities: | |||||||||||||
Other liabilities | $ | 184,310 | $ | 25,730 | |||||||||
Long-term debt | 250,000 | 250,000 | |||||||||||
Total Liabilities | 434,310 | 275,730 | |||||||||||
Shareholders’ Equity: | |||||||||||||
Common stock | 623 | 621 | |||||||||||
Other shareholders’ equity, including unrealized gains (losses) on securities of subsidiaries | 2,157,321 | 2,393,793 | |||||||||||
Total Shareholders’ Equity | 2,157,944 | 2,394,414 | |||||||||||
Total Liabilities and Shareholders’ Equity | $ | 2,592,254 | $ | 2,670,144 | |||||||||
ProAssurance Corporation – Registrant Only | |||||||||||||
Condensed Statements of Income | |||||||||||||
Year Ended December 31 | |||||||||||||
(In thousands) | 2014 | 2013 | 2012 | ||||||||||
Net investment income | $ | 3,295 | $ | 5,789 | $ | 5,281 | |||||||
Equity in earnings (loss) of unconsolidated subsidiaries | — | — | (728 | ) | |||||||||
Net realized investment gains (losses) | 990 | 5,334 | 3,230 | ||||||||||
Other income (loss) | 660 | 170 | 54 | ||||||||||
4,945 | 11,293 | 7,837 | |||||||||||
Expenses: | |||||||||||||
Interest expense | 14,084 | 2,747 | 1,534 | ||||||||||
Other expenses | 7,083 | 13,213 | 8,870 | ||||||||||
21,167 | 15,960 | 10,404 | |||||||||||
Income (loss) before income tax expense (benefit) and equity in net income of consolidated subsidiaries | (16,222 | ) | (4,667 | ) | (2,567 | ) | |||||||
Income tax expense (benefit) | (6,728 | ) | (1,007 | ) | 773 | ||||||||
Income (loss) before equity in net income of consolidated subsidiaries | (9,494 | ) | (3,660 | ) | (3,340 | ) | |||||||
Equity in net income of consolidated subsidiaries | 206,059 | 301,183 | 278,810 | ||||||||||
Net income | $ | 196,565 | $ | 297,523 | $ | 275,470 | |||||||
Other comprehensive income | $ | (1,457 | ) | $ | (85,719 | ) | $ | 15,343 | |||||
Comprehensive income | $ | 195,108 | $ | 211,804 | $ | 290,813 | |||||||
ProAssurance Corporation – Registrant Only | |||||||||||||
Condensed Statements of Cash Flow | |||||||||||||
Year Ended December 31 | |||||||||||||
(In thousands) | 2014 | 2013 | 2012 | ||||||||||
Net cash provided (used) by operating activities | $ | 20,086 | $ | (24,654 | ) | $ | 3,601 | ||||||
Investing activities | |||||||||||||
Purchases of equity securities trading | (310 | ) | (1,265 | ) | (364 | ) | |||||||
Proceeds from sale or maturities of: | |||||||||||||
Fixed maturities, available for sale | 104,844 | 224,993 | 150,192 | ||||||||||
Equity securities trading | 12,813 | 1,113 | 616 | ||||||||||
Net decrease (increase) in short-term investments | 149,202 | (187,625 | ) | 58,657 | |||||||||
Dividends from subsidiaries | 67,188 | 239,484 | 59,369 | ||||||||||
Contribution of capital to subsidiaries | (7,000 | ) | — | (184,330 | ) | ||||||||
Deposit made for future acquisition | — | (205,244 | ) | — | |||||||||
(Increase) decrease in restricted cash | 78,000 | (78,000 | ) | — | |||||||||
Funds advanced for Syndicate 1729 FAL deposit | (76,553 | ) | (8,699 | ) | — | ||||||||
Funds advanced under Syndicate 1729 credit agreement | (9,107 | ) | (1,665 | ) | — | ||||||||
Other | 415 | (20 | ) | (1 | ) | ||||||||
Net cash provided (used) by investing activities | 319,492 | (16,928 | ) | 84,139 | |||||||||
Financing activities | |||||||||||||
Proceeds from long-term debt | — | 250,000 | 125,000 | ||||||||||
Principal repayment of debt | — | (125,000 | ) | (32,992 | ) | ||||||||
Repurchase of common stock | (222,360 | ) | (29,089 | ) | — | ||||||||
Subsidiary payments for common shares and share-based compensation awarded to subsidiary employees | 8,301 | 6,258 | 7,066 | ||||||||||
Excess of tax benefit from share-based payment arrangements | 1,631 | 2,128 | 7,022 | ||||||||||
Dividends to shareholders | (70,490 | ) | (46,375 | ) | (200,118 | ) | |||||||
Other | (6,919 | ) | (8,278 | ) | (12,259 | ) | |||||||
Net cash provided (used) by financing activities | (289,837 | ) | 49,644 | (106,281 | ) | ||||||||
Increase (decrease) in cash and cash equivalents | 49,741 | 8,062 | (18,541 | ) | |||||||||
Cash and cash equivalents, beginning of period | 37,459 | 29,397 | 47,938 | ||||||||||
Cash and cash equivalents, end of period | $ | 87,200 | $ | 37,459 | $ | 29,397 | |||||||
Supplemental disclosure of cash flow information: | |||||||||||||
Cash paid during the year for income taxes, net of refunds | $ | 26,061 | $ | 117,107 | $ | 110,278 | |||||||
Cash paid during the year for interest | $ | 13,408 | $ | 913 | $ | 2,342 | |||||||
Significant non-cash transactions: | |||||||||||||
Dividends declared and not yet paid | $ | 167,744 | $ | 18,532 | $ | — | |||||||
Securities transferred at fair value as dividends from subsidiaries | $ | 227,412 | $ | 69,011 | $ | 241,081 | |||||||
Notes to Condensed Financial Statements of Registrant | |||||||||||||
1. Basis of Presentation | |||||||||||||
The registrant-only financial statements should be read in conjunction with ProAssurance Corporation’s (PRA Parent) consolidated financial statements. At December 31, 2014 and 2013, PRA Parent’s investment in subsidiaries is stated at the initial consolidation value plus equity in the undistributed earnings of subsidiaries since the date of acquisition. | |||||||||||||
2. Business Combinations | |||||||||||||
On January 1, 2014, ProAssurance completed the acquisition of Eastern Insurance Holdings, Inc. (Eastern) (NASDAQ: EIHI) by purchasing 100% of its outstanding common shares. ProAssurance acquired Eastern for cash of $205 million. ProAssurance transferred all of the cash required to complete the transaction to a third-party agent for the benefit of Eastern eligible shareholders on December 27, 2013; the deposit was classified as a part of Other Assets at December 31, 2013. | |||||||||||||
On January 1, 2013, ProAssurance, through a wholly owned subsidiary, completed the acquisition of Medmarc Mutual Insurance Company, now Medmarc Casualty Insurance Company (Medmarc), through a sponsored demutualization. A gain recognized on the acquisition is included in the December 31, 2013 Consolidated Statements of Income and Comprehensive Income. | |||||||||||||
Additional information regarding business combinations is provided in Note 2 of the Notes to Consolidated Financial Statements. | |||||||||||||
3. Other Assets | |||||||||||||
At December 31, 2013 Other assets was principally comprised of a $205 million deposit made related to the Eastern transaction, discussed in Note 2 above. | |||||||||||||
4. Long-term Debt | |||||||||||||
Outstanding long-term debt, as of December 31, 2014 and 2013, consisted of the following: | |||||||||||||
(In thousands) | 2014 | 2013 | |||||||||||
Senior notes due 2023, unsecured, interest at 5.3% annually | $ | 250,000 | $ | 250,000 | |||||||||
Revolving credit agreement, outstanding borrowings not permitted to exceed $200 million aggregately, expires in 2016 | — | — | |||||||||||
$ | 250,000 | $ | 250,000 | ||||||||||
See Note 10 of the Notes to Consolidated Financial Statements included herein for a detailed description of the terms of the Senior Notes due 2023 and the Revolving Credit Agreement. | |||||||||||||
5. Related Party Transactions | |||||||||||||
PRA Parent received dividends from its subsidiaries of $294.6 million, $308.5 million and $300.5 million during the years ended December 31, 2014, 2013 and 2012, respectively. PRA Parent contributed capital of $7.0 million, and $184.3 million to its subsidiaries during the years ended December 31, 2014 and 2012, respectively. No capital was contributed to subsidiaries during the year ended December 31, 2013. Capital contributed in 2012 was primarily for the purpose of funding the Medmarc acquisition. Additionally, advances of $76.6 million and $8.7 million were made in 2014 and 2013, respectively, to a subsidiary that is a Corporate Member at Lloyds. The subsidiary used the advances to provide capital at Lloyd's, also known as FAL, in support of Syndicate 1729. | |||||||||||||
6. Income Taxes | |||||||||||||
Under terms of PRA Parent’s tax sharing agreement with its subsidiaries, income tax provisions for individual companies are allocated on a separate company basis. | |||||||||||||
7. Commitment to Syndicate 1729 | |||||||||||||
ProAssurance has provided a revolving credit agreement (the "Syndicate Credit Agreement") to Premium Trust Fund of Syndicate 1729 which will provide operating funds for the Syndicate of up to £10 million (approximately $16 million at December 31, 2014). At December 31, 2014, £6.6 million ($11.0 million) had been drawn under the Syndicate Credit Agreement. See Note 9 of the Notes to Consolidated Financial Statements for additional information regarding the Syndicate Credit Agreement. |
Schedule_III_Supplementary_Ins
Schedule III - Supplementary Insurance Information | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Supplementary Insurance Information [Abstract] | ||||||||||||
Schedule III - Supplementary Insurance Information | ||||||||||||
(In thousands) | 2014 | 2013 | 2012 | |||||||||
Net premiums earned | ||||||||||||
Specialty P&C | $ | 492,733 | $ | 527,919 | $ | 550,664 | ||||||
Workers' Compensation | 194,540 | — | — | |||||||||
Lloyd's Syndicate | 12,458 | — | — | |||||||||
Consolidated | 699,731 | 527,919 | 550,664 | |||||||||
Net investment income (1) | ||||||||||||
Lloyd's Syndicate | 410 | — | — | |||||||||
Corporate | 125,147 | 129,265 | 136,094 | |||||||||
Consolidated | 125,557 | 129,265 | 136,094 | |||||||||
Losses and loss adjustment expenses incurred related to current year, net of reinsurance | ||||||||||||
Specialty P&C | 408,987 | 447,510 | 451,951 | |||||||||
Workers' Compensation | 127,743 | — | — | |||||||||
Lloyd's Syndicate | 8,438 | — | — | |||||||||
Consolidated | 545,168 | 447,510 | 451,951 | |||||||||
Losses and loss adjustment expenses incurred related to prior year, net of reinsurance | ||||||||||||
Specialty P&C | (180,788 | ) | (222,749 | ) | (272,038 | ) | ||||||
Workers' Compensation | (1,296 | ) | — | — | ||||||||
Lloyd's Syndicate | — | — | — | |||||||||
Consolidated | (182,084 | ) | (222,749 | ) | (272,038 | ) | ||||||
Paid losses and loss adjustment expenses, net of reinsurance | ||||||||||||
Specialty P&C | 389,458 | 388,813 | 339,142 | |||||||||
Workers' Compensation | 117,775 | — | — | |||||||||
Lloyd's Syndicate | 404 | — | — | |||||||||
Consolidated | 507,637 | 388,813 | 339,142 | |||||||||
Amortization of deferred policy acquisition costs | ||||||||||||
Specialty P&C | 55,105 | 53,207 | 54,887 | |||||||||
Workers' Compensation | 10,307 | — | — | |||||||||
Lloyd's Syndicate | 3,165 | — | — | |||||||||
Consolidated | 68,577 | 53,207 | 54,887 | |||||||||
Other underwriting, policy acquisition and operating expenses | ||||||||||||
Specialty P&C | 78,027 | 78,869 | 70,405 | |||||||||
Workers' Compensation | 50,050 | — | — | |||||||||
Lloyd's Syndicate | 6,370 | — | — | |||||||||
Corporate | 8,768 | 15,748 | 10,389 | |||||||||
Consolidated (2) | 142,734 | 94,610 | 80,744 | |||||||||
Net premiums written | ||||||||||||
Specialty P&C | 467,046 | 525,182 | 528,298 | |||||||||
Workers' Compensation | 202,697 | — | — | |||||||||
Lloyd's Syndicate | 32,106 | — | — | |||||||||
Consolidated | 701,849 | 525,182 | 528,298 | |||||||||
Deferred policy acquisition costs (1) | 38,790 | 28,207 | 23,179 | |||||||||
Reserve for losses and loss adjustment expenses (1) | 2,058,266 | 2,072,822 | 2,054,994 | |||||||||
Unearned premiums (1) | 345,828 | 255,463 | 233,861 | |||||||||
(1) Assets are not allocated to segments because investments and assets are not managed at the segment level, with the exception | ||||||||||||
of the FAL investments held at our Lloyd's Syndicate segment. | ||||||||||||
(2) Includes Inter-segment eliminations. |
Schedule_IV_Reinsurance
Schedule IV - Reinsurance | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Supplemental Schedule of Reinsurance Premiums for Insurance Companies [Abstract] | |||||||||||||
Schedule IV - Reinsurance | |||||||||||||
(In thousands) | 2014 | 2013 | 2012 | ||||||||||
Property and Liability * | |||||||||||||
Premiums earned | $ | 755,623 | $ | 568,629 | $ | 558,200 | |||||||
Premiums ceded | (68,879 | ) | (41,514 | ) | (7,652 | ) | |||||||
Premiums assumed | 12,987 | 804 | 116 | ||||||||||
Net premiums earned | $ | 699,731 | $ | 527,919 | $ | 550,664 | |||||||
Percentage of amount assumed to net | 1.86 | % | 0.15 | % | 0.02 | % | |||||||
* | All of ProAssurance’s premiums are related to property and liability coverages. |
Accounting_Policies_Policies
Accounting Policies (Policies) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accounting Policies [Abstract] | |||||||||
Organization and Nature of Business | Organization and Nature of Business | ||||||||
ProAssurance Corporation (ProAssurance, PRA or the Company), a Delaware corporation, is an insurance holding company primarily for wholly owned specialty property and casualty insurance entities including an entity that is the majority capital provider to Syndicate 1729 at Lloyd's of London. Risks insured are primarily liability risks located within the United States of America (U.S.). As described in more detail in Note 15, ProAssurance operates in four reportable segments: Specialty Property and Casualty (Specialty P&C), Workers' Compensation, Lloyd's Syndicate, and Corporate. | |||||||||
Principles of Consolidation | Principles of Consolidation | ||||||||
The accompanying consolidated financial statements include the accounts of ProAssurance Corporation and its wholly-owned subsidiaries. Investments in entities where ProAssurance holds a greater than minor interest but does not hold a controlling interest are accounted for using the equity method. All significant intercompany accounts and transactions are eliminated in consolidation. ProAssurance subsidiaries located in the United Kingdom (U.K.) are reported on a quarter delay due to timing issues regarding the availability of information, except there is no delay related to subsidiary investments managed in the U.S. as that information is available on an earlier schedule. | |||||||||
Basis of Presentation | Basis of Presentation | ||||||||
The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and disclosures related to these amounts at the date of the financial statements. Actual results could differ from those estimates. | |||||||||
Reclassifications | Reclassifications | ||||||||
On January 1, 2014, ProAssurance began reporting unearned ceding commissions as an offset to deferred policy acquisition costs (DPAC) on the Consolidated Balance Sheet, and the December 31, 2013 Consolidated Balance Sheet has been conformed to the current presentation. Previously, unearned ceding commissions ($0.8 million at December 31, 2013) were reported in Unearned premiums. Also, ceding commission income earned for the years ended December 31, 2014, 2013 and 2012 has been reported as an offset to DPAC amortization (see Note 7) which lowered DPAC amortization as previously reported for the years ended December 31, 2013 and 2012 by $5.9 million and $2.1 million, respectively. Total underwriting, policy acquisition and operating expense for the years ended December 31, 2013 and 2012 was not affected by the change in presentation. | |||||||||
Stock Split | Stock Split | ||||||||
In 2012, the Board of Directors of ProAssurance Corporation (the Board) declared a two-for-one split of ProAssurance common shares which was effected December 27, 2012 in the form of a stock dividend. All share and per share information provided in this report reflects the effect of the split for all periods presented. | |||||||||
Recognition of Revenues | Recognition of Revenues | ||||||||
Insurance premiums are recognized as revenues pro rata over the terms of the policies, which are principally one year in duration. | |||||||||
At December 31, 2014 and 2013 ProAssurance had established allowances for credit losses related to premium and agency receivables as shown in the following table. | |||||||||
(in thousands) | Premium | Agency | |||||||
Receivables | Receivables | ||||||||
Allowance for credit losses: | |||||||||
Balance at December 31, 2012 | $ | 1,000 | $ | 286 | |||||
Estimated credit losses | 236 | — | |||||||
Account write offs, net of recoveries | (246 | ) | (236 | ) | |||||
Balance at December 31, 2013 | 990 | 50 | |||||||
Estimated credit losses | 299 | — | |||||||
Account write offs, net of recoveries | (299 | ) | — | ||||||
Allowance acquired from acquisition | 225 | — | |||||||
Balance at December 31, 2014 | $ | 1,215 | $ | 50 | |||||
Earned But Unbilled Premiums (EBUB) | |||||||||
Workers’ compensation premiums are determined based upon the payroll of the insured, the applicable premium rates and, where applicable, an experience based modification factor. An audit of the policyholders’ records is conducted after policy expiration to make a final determination of applicable premiums. Audit premium due from or due to a policyholder as a result of an audit is reflected in net premiums earned when billed. ProAssurance tracks, by policy, the amount of additional premium billed in final audit invoices as a percentage of payroll exposure and uses this information to estimate the probable additional amount that it has earned, but not yet billed, as of the balance sheet date. Changes to the EBUB estimate are included in Net premiums earned in the period recognized. As of December 31, 2014, ProAssurance carried earned but unbilled premiums of $3.4 million as a part of Premiums receivable. | |||||||||
Losses and Loss Adjustment Expenses | Losses and Loss Adjustment Expenses | ||||||||
ProAssurance establishes its reserve for losses and loss adjustment expenses ("reserve for losses" or "reserve") based on estimates of the future amounts necessary to pay claims and expenses associated with the investigation and settlement of claims. The reserve for losses is determined on the basis of individual claims and payments thereon as well as actuarially determined estimates of future losses based on past loss experience, available industry data and projections as to future claims frequency, severity, inflationary trends, judicial trends, legislative changes and settlement patterns. | |||||||||
Management establishes the reserve for losses after taking into consideration a variety of factors including the conclusions reached by internal actuaries, premium rates, claims frequency, historical paid and incurred loss development trends, the effect of inflation, general economic trends, the legal and political environment, and the reports received from consulting actuaries. Internal actuaries perform an in-depth review of the reserve for losses at least semi-annually using the loss and exposure data of ProAssurance subsidiaries. Management engages consulting actuaries to review subsidiary loss and exposure data and provide reports to Management regarding the adequacy of reserves. | |||||||||
Estimating casualty insurance reserves, and particularly long-tailed insurance reserves, is a complex process. Long-tailed insurance is characterized by the extended period of time between collecting the premium for insuring a risk and the ultimate payment of losses. For a high proportion of the risks insured or reinsured by ProAssurance the period of time required to resolve a claim is often five years or more, and claims may be subject to litigation. Estimating losses for these long-tailed claims requires ProAssurance to make and revise judgments and assessments regarding multiple uncertainties over an extended period of time. As a result, reserve estimates may vary significantly from the eventual outcome. Reserve estimates and the assumptions on which these estimates are predicated are regularly reviewed and updated as new information becomes available. Any adjustments necessary are reflected in then current operations. Due to the size of ProAssurance’s reserve for losses, even a small percentage adjustment to these estimates could have a material effect on earnings in the period in which the adjustment is made, as was the case in 2014, 2013 and 2012. | |||||||||
The effect of adjustments made to reinsured losses is mitigated by the corresponding adjustment that is made to reinsurance recoveries. Thus, in any given year, ProAssurance may make significant adjustments to gross losses that have little effect on its net losses. | |||||||||
Reinsurance Receivables | Reinsurance Receivables | ||||||||
ProAssurance enters into reinsurance agreements whereby other insurance entities agree to assume a portion of the risk associated with certain policies issued by ProAssurance. In return, ProAssurance agrees to pay a premium to the reinsurer. ProAssurance purchases reinsurance to provide for greater diversification of business and to allow management to control exposure to potential losses arising from large risks. | |||||||||
Receivable from reinsurers on paid losses and loss adjustment expenses is the estimated amount of losses already paid that will be recoverable from reinsurers. Receivable from reinsurers on unpaid losses and loss adjustment expenses is the estimated amount of future loss payments that will be recoverable from reinsurers. Reinsurance recoveries are the portion of losses incurred during the period that are estimated to be allocable to reinsurers. Premiums ceded are the estimated premiums that will be due to reinsurers with respect to premiums earned and losses incurred during the period. | |||||||||
These estimates are based upon management’s estimates of ultimate losses and the portion of those losses that are allocable to reinsurers under the terms of the related reinsurance agreements. Given the uncertainty of the ultimate amounts of losses, these estimates may vary significantly from the eventual outcome. Management regularly reviews these estimates and any adjustments necessary are reflected in the period in which the estimate is changed. Due to the size of the receivable from reinsurers, even a small adjustment to the estimates could have a material effect on ProAssurance’s results of operations for the period in which the change is made. | |||||||||
Reinsurance contracts do not relieve ProAssurance from its obligations to policyholders. ProAssurance continually monitors its reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. Any amount determined to be uncollectible is written off in the period in which the uncollectible amount is identified. | |||||||||
Investments | Investments | ||||||||
Fair Values | |||||||||
Fair values of investment securities are primarily provided by independent pricing services. The pricing services provide an exchange traded price, if available, or provide an estimated price determined using multiple observable inputs, including exchange traded prices for similar assets. Management reviews valuations of securities obtained from the pricing services for accuracy based upon the specifics of the security, including class, maturity, credit rating, durations, collateral, and comparable markets for similar securities. Multiple observable inputs are not available for certain of our investments, including municipal bonds and corporate debt not actively traded, and investments in limited partnerships/limited liability companies (LPs/LLCs). Management values these municipal bonds and corporate debt either using a single non-binding broker quote or pricing models that utilize market based assumptions that have limited observable inputs. Management values certain investments in LPs/LLCs based on the net asset value (NAV) of the interest held, as provided by the fund. | |||||||||
Fixed Maturities and Equity Securities | |||||||||
Fixed maturities and equity securities are considered as either available-for-sale or trading securities. | |||||||||
Available-for-sale securities are carried at fair value, determined as described above, and unrealized gains and losses on such available-for-sale securities are included, net of related tax effects, in Shareholders’ Equity as a component of Accumulated Other Comprehensive Income (Loss). | |||||||||
Investment income includes amortization of premium and accretion of discount related to available-for-sale debt securities acquired at other than par value. Debt securities and mandatorily redeemable preferred stock with maturities beyond one year when purchased are classified as fixed maturities. | |||||||||
Trading portfolio securities are carried at fair value, determined as described above, with the holding gains and losses included in realized investment gains and losses in the current period. | |||||||||
Short-term Investments | |||||||||
Short-term investments, which have a maturity at purchase of one year or less, are primarily comprised of investments in U.S. Treasury obligations and commercial paper. All balances are reported at amortized cost, which approximates fair value. | |||||||||
Other Investments | |||||||||
Investments in LPs/LLCs where ProAssurance has virtually no influence over the operating and financial policies of an investee are accounted for using the cost method. Under the cost method, investments are valued at cost, with investment income recognized when received. | |||||||||
Investments in convertible bond securities are carried at fair value as permitted by the accounting guidance for hybrid financial instruments, with changes in fair value recognized in income as a component of Net realized investment gains (losses) during the period of change. Interest on convertible bond securities is recorded on an accrual basis based on contractual interest rates and is included in Net investment income. | |||||||||
Investment in Unconsolidated Subsidiaries | |||||||||
Investments in LPs/LLCs where ProAssurance is deemed to have influence because it holds a greater than a minor interest are accounted for using the equity method. Under the equity method, the recorded basis of the investment is adjusted each period for the investor’s pro rata share of the investee’s income or loss. Investments in unconsolidated subsidiaries include tax credit partnerships accounted for using the equity method, whereby ProAssurance’s proportionate share of income or loss is included in investment income. Tax credits received from the partnerships are recognized in the period received as a reduction to current tax expenses. | |||||||||
Business Owned Life Insurance (BOLI) | |||||||||
ProAssurance owns life insurance contracts on certain management employees. The life insurance contracts are carried at their current cash surrender value. Changes in the cash surrender value are included in income in the current period as investment income. Death proceeds from the contracts are recorded when the proceeds become payable under the policy terms. | |||||||||
Realized Gains and Losses | |||||||||
Realized investment gains and losses are recognized on the specific identification basis. | |||||||||
Other-than-temporary Impairments | |||||||||
ProAssurance evaluates its available-for-sale investment securities on at least a quarterly basis for the purpose of determining whether declines in fair value below recorded cost basis represent other-than-temporary declines. The assessment of whether the amortized cost basis of debt securities, particularly asset-backed debt securities, is expected to be recovered requires management to make assumptions regarding various matters affecting cash flows to be received in the future. The choice of assumptions is subjective and requires the use of judgment; actual credit losses experienced in future periods may differ from management’s estimates of those credit losses. | |||||||||
If there is intent to sell the security or if it is more likely than not that the security will be required to be sold before full recovery of its amortized cost basis, ProAssurance considers a decline in fair value to be an other-than-temporary impairment. Otherwise, ProAssurance considers the following factors in determining whether an investment’s decline is other-than-temporary: | |||||||||
For equity securities: | |||||||||
• | the length of time for which the fair value of the investment has been less than its recorded basis; | ||||||||
• | the financial condition and near-term prospects of the issuer underlying the investment, taking into consideration the economic prospects of the issuer’s industry and geographical region, to the extent that information is publicly available; and | ||||||||
• | the historical and implied volatility of the fair value of the security. | ||||||||
For debt securities, an evaluation is made as to whether the decline in fair value is due to credit loss, which is defined as the excess of the current amortized cost basis of the security over the present value of expected future cash flows. Methodologies used to estimate the present value of expected cash flows to determine if a decline is due to a credit loss are: | |||||||||
• | For non-structured fixed maturities (U.S. Treasury securities, obligations of U.S. Government and government agencies and authorities, obligations of states, municipalities and political subdivisions, and corporate debt) the estimate of expected cash flows is determined by projecting a recovery value and a recovery time frame and assessing whether further principal and interest will be received. ProAssurance considers various factors in projecting recovery values and recovery time frames, including the following: | ||||||||
• | third party research and credit rating reports; | ||||||||
• | the current credit standing of the issuer, including credit rating downgrades, whether before or after the balance sheet date; | ||||||||
• | internal assessments and the assessments of external portfolio managers regarding specific circumstances surrounding an investment, which indicate the investment is more or less likely to recover its amortized cost than other investments with a similar structure; | ||||||||
• | failure of the issuer of the security to make scheduled interest or principal payments; | ||||||||
• | For structured securities (primarily asset-backed securities), ProAssurance estimates the present value of the security’s cash flows using the effective yield of the security at the date of acquisition (or the most recent implied rate used to accrete the security if the implied rate has changed as a result of a previous impairment or changes in expected cash flows). ProAssurance considers the most recently available six month averages of the levels of delinquencies, defaults, severities, and prepayments for the collateral (loans) underlying the securitization or, if historical data is not available, sector based assumptions, to estimate expected future cash flows of these securities. | ||||||||
Investments in tax credit partnerships are evaluated for OTTI by considering both qualitative and quantitative factors which include: whether cash flows currently expected from the investment, primarily tax benefits, equal or exceed the carrying value of the investment, whether currently expected cash flows are less than those expected at the time the investment was acquired, and ProAssurance's ability and intent to hold the investment until the recovery of its carrying value. | |||||||||
Investments in LPs/LLCs other than tax credit partnerships are evaluated for impairment by comparing ProAssurance’s carrying value to net asset value of ProAssurance’s interest as reported by the LP/LLC. Additionally, Management considers the performance of the LP/LLC relative to the market and its stated objectives, cash flows expected from the interest, and the audited financial statements of the LP/LLC, if available. | |||||||||
ProAssurance recognizes other-than-temporary impairments, including impairments of debt securities due to credit loss, in earnings as a part of net realized investment gains (losses). In subsequent periods, any measurement of gain or loss or impairment is based on the revised amortized basis of the security. Declines in fair value, including non-credit impairments of debt securities, not considered to be other-than-temporary are recognized in other comprehensive income. | |||||||||
Asset-backed securities that have been impaired due to credit or are below investment grade quality are accounted for under the effective yield method. Under the effective yield method estimates of cash flows expected over the life of asset-backed securities are then used to recognize income on the investment balance for subsequent accounting periods. | |||||||||
Foreign Currency | Foreign Currency | ||||||||
The functional currency of all ProAssurance foreign subsidiaries is the U.S. Dollar | |||||||||
Cash and Cash Equivalents | Cash and Cash Equivalents | ||||||||
For purposes of the consolidated balance sheets and statements of cash flows, ProAssurance considers all demand deposits and overnight investments to be cash equivalents. | |||||||||
Restricted Cash | Restricted Cash | ||||||||
Restricted cash represents cash balances which are not available for immediate or general use. At December 31, 2013 ProAssurance's Restricted cash was comprised entirely of a deposit collateralizing a standby letter of credit entered into as partial funding at Lloyd's for Syndicate 1729. | |||||||||
Deferred Policy Acquisition Costs (DPAC); Ceding Commission Income | Deferred Policy Acquisition Costs; Ceding Commission Income | ||||||||
Costs that vary with and are directly related to the successful production of new and renewal premiums (primarily premium taxes, commissions and underwriting salaries) are deferred to the extent they are recoverable against unearned premiums and are amortized as related premiums are earned. | |||||||||
Income Taxes/Deferred Taxes | Income Taxes/Deferred Taxes | ||||||||
ProAssurance files a consolidated federal income tax return. Tax-related interest and penalties are recognized as components of tax expense. | |||||||||
ProAssurance evaluates tax positions taken on tax returns and recognizes positions in the financial statements when it is more likely than not that the position will be sustained upon resolution with a taxing authority. If recognized, the benefit is measured as the largest amount of benefit that has a greater than fifty percent probability of being realized. Uncertain tax positions are reviewed each period by considering changes in facts and circumstances, such as changes in tax law, interactions with taxing authorities and developments in case law, and adjustments are made as considered necessary. Adjustments to unrecognized tax benefits may affect income tax expense and the settlement of uncertain tax positions may require the use of cash. | |||||||||
Deferred federal income taxes arise from the recognition of temporary differences between the basis of assets and liabilities determined for financial reporting purposes and the basis determined for income tax purposes. ProAssurance’s temporary differences principally relate to loss reserves, unearned premium, deferred policy acquisition costs, unrealized investment gains (losses), basis differentials for investments, compensation accruals, and intangibles. Deferred tax assets and liabilities are measured using the enacted tax rates expected to be in effect when such benefits are realized. ProAssurance reviews its deferred tax assets quarterly for impairment. If management determines that it is more likely than not that some or all of a deferred tax asset will not be realized, a valuation allowance is recorded to reduce the carrying value of the asset. In assessing the need for a valuation allowance, management is required to make certain judgments and assumptions about the future operations of ProAssurance based on historical experience and information as of the measurement date regarding reversal of existing temporary differences, carryback capacity, future taxable income, including its capital and operating characteristics, and tax planning strategies. | |||||||||
Changes in tax laws and rates could also affect recorded deferred tax assets and liabilities in the future. Management is not aware of any such changes that would have a material effect on the Company’s results of operations, cash flows or financial position. | |||||||||
Real Estate | Real Estate | ||||||||
Real Estate balances are reported at cost or, for properties acquired in business combinations, estimated fair value on the date of acquisition, less accumulated depreciation. Real estate principally consists of properties in use as corporate offices. Depreciation is computed over the estimated useful lives of the related property using the straight-line method. Excess office capacity is leased or made available for lease; rental income is included in other income and real estate expenses are included in underwriting, policy acquisition and operating expenses | |||||||||
Intangible Assets | Intangible Assets | ||||||||
Intangible assets with definite lives are amortized over the estimated useful life of the asset. Amortizable intangible assets primarily consist of agency and policyholder relationships. Intangible assets with an indefinite life, primarily state licenses, are not amortized. Both amortizable and non-amortizable intangible assets increased during 2014 due to intangible assets purchased in the Eastern acquisition, see Note 2. Intangible assets are evaluated for impairment on an annual basis. | |||||||||
Goodwill | Goodwill | ||||||||
Goodwill is recognized in conjunction with acquisitions as the excess of the purchase consideration for the acquisition over the fair value of identifiable assets acquired and liabilities assumed. The fair value of identifiable assets and liabilities, and thus goodwill, is subject to redetermination within a measurement period of up to one year following completion of an acquisition. | |||||||||
ProAssurance evaluates the carrying value of goodwill at the segment (or reporting unit) level annually as of October 1st. If, at any time during the year, events occur or circumstances change that would more likely than not reduce the fair value below the carrying value, an additional evaluation of goodwill is made. | |||||||||
The goodwill impairment assessment requires evaluating qualitative factors or performing a quantitative assessment to determine if a reporting unit’s carrying value is likely to exceed its fair value. ProAssurance elected to evaluate goodwill for each of its reporting units using qualitative factors to determine whether it was more likely than not that the fair value of a reporting unit was less than its carrying amount. In applying the qualitative approach, Management considered macroeconomic factors, such as industry and market conditions, as well as reporting-unit-specific events, actual financial performance versus expectations, and management’s future business expectations. For recently acquired reporting units with material goodwill, consideration was given to the fact that the business had been recently acquired in an orderly transaction between market participants, and that the purchase price therefore represented fair value at acquisition. A significant amount of judgment is required in performing the goodwill impairment analysis. As of October 1, 2014, the most recent evaluation date, Management concluded that the fair value of each ProAssurance reporting unit exceeded the carrying value of the reporting unit, and deemed it unnecessary to perform further testing for impairment. | |||||||||
Treasury Shares | Treasury Stock | ||||||||
Treasury shares are reported at cost, and are reflected on the Consolidated Balance Sheets as an unallocated reduction of total equity. | |||||||||
Share-Based Payments | Share-Based Payments | ||||||||
Compensation cost for share-based payments is measured based on the grant-date fair value of the award, recognized over the period in which the employee is required to provide service in exchange for the award. Excess tax benefits (tax deductions realized in excess of the compensation costs recognized for the exercise of the awards, multiplied by the incremental tax rate) are reported as financing cash inflows. | |||||||||
Subsequent Events | Subsequent Events | ||||||||
ProAssurance evaluates events that occurred subsequent to December 31, 2014, for recognition or disclosure in its Consolidated Financial Statements. | |||||||||
Accounting Changes Adopted and Not Yet Adopted | Accounting Changes Adopted | ||||||||
Obligations Resulting from Joint and Several Liability Arrangements | |||||||||
Effective for fiscal years beginning after December 15, 2013, the Financial Accounting Standards Board (FASB) revised guidance related to obligations resulting from joint and several liability arrangements. The new guidance requires an entity to recognize, measure and disclose obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date, except for obligations already addressed within existing GAAP guidance, with retrospective application required for such arrangements existing at the beginning of the fiscal year of adoption. ProAssurance adopted the guidance on January 1, 2014. Adoption of this guidance had no effect on ProAssurance's results of operations or financial position. | |||||||||
Presentation of Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists | |||||||||
Effective for fiscal years beginning after December 15, 2013, the FASB issued guidance related to the financial statement presentation of unrecognized tax benefits. The new guidance requires an entity to present unrecognized tax benefits as a reduction to a deferred tax asset resulting from a net operating loss carryforward, a similar tax loss, or tax credit carryforward except in circumstances where the relevant taxing authority does not permit offset or does not require offset and the entity does not intend to use the deferred tax asset for offset. The guidance requires prospective application for all unrecognized tax benefits that exist as of the effective date, but may be applied retrospectively. ProAssurance adopted the guidance prospectively on January 1, 2014. Adoption of this guidance had no material effect on ProAssurance's results of operations or financial position. | |||||||||
Equity Method and Joint Ventures-Accounting for Investments in Qualified Affordable Housing Projects | |||||||||
Effective for fiscal years beginning after December 15, 2014, the FASB issued guidance which, if certain criteria is met, permits but does not require reporting entities to begin using a new accounting method, the proportional amortization method, for investments in qualified affordable housing projects. The guidance also includes new disclosure requirements around the nature of investments in qualified affordable housing projects and their effect on financial position and results of operations. Under the proportional amortization method the investments in such projects are amortized in proportion to the tax benefits received, and investment performance is recognized as a component of income tax expense (benefit) rather than as a component of investment income. The tax credit partnership investments held by ProAssurance are primarily investments in qualified affordable housing projects. ProAssurance has adopted the new guidance as of December 31, 2014, but has elected to continue to account for these investments using the equity method of accounting. Adoption of this guidance had no material effect on ProAssurance’s results of operations or financial position as it affected disclosures only. | |||||||||
Determining Whether Hybrid Financial Instruments Issued as a Share is More Akin to Debt or to Equity | |||||||||
Effective for fiscal years beginning after December 15, 2015, early adoption permitted, the FASB issued guidance that clarifies current U.S. GAAP regarding the evaluation of the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. ProAssurance adopted the guidance as of December 31, 2014. Adoption of this guidance had no effect on ProAssurance’s results of operations or financial position. | |||||||||
Business Combinations: Pushdown Accounting | |||||||||
On November 18, 2014, the FASB issued immediately effective guidance on whether and at what threshold an acquired entity can apply pushdown accounting in its separate financial statements. ProAssurance has adopted this guidance as of its effective date. Adoption of this guidance had no effect on ProAssurance’s results of operations or financial position. | |||||||||
Income Statement Presentation of Extraordinary Items | |||||||||
Effective for fiscal years beginning after December 15, 2015, early adoption permitted, the FASB issued guidance that eliminates from U.S. GAAP the concept of extraordinary items and the related presentation requirements. Under the new guidance, the effect of each event or transaction that is unusual in nature or occurs infrequently, or both, is to be presented as a separate component of income from continuing operations or, alternatively, disclosed in notes to the financial statements. ProAssurance adopted the guidance as of January 1, 2014. Adoption of this guidance had no effect on ProAssurance’s results of operations or financial position. | |||||||||
Accounting Changes Not Yet Adopted | |||||||||
Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity | |||||||||
Effective for fiscal years beginning after December 15, 2014, the FASB issued guidance which changes the requirements for reporting discontinued operations. Under the new guidance, reporting entities are required to report disposals of business components only if the disposal represents a strategic shift in the entity’s operations that will have a major effect on the entity’s operations and financial results. The new guidance expands disclosure requirements for reported discontinued operations and requires disclosure of pre-tax profit or loss attributable to significant disposals that are not reported as discontinued operations. ProAssurance plans to adopt the guidance beginning January 1, 2015. Adoption of the guidance is expected to have no effect on ProAssurance’s results of operations or financial position. | |||||||||
Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period | |||||||||
Effective for fiscal years beginning after December 15, 2015, the FASB issued guidance for share-based payments in which the terms of the award provide that a performance target can be achieved after completion of the requisite service period. The new guidance provides that compensation cost for such awards should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. ProAssurance plans to adopt the guidance beginning January 1, 2016. Adoption of the guidance is expected to have no effect on ProAssurance’s results of operations or financial position as ProAssurance has no awards with performance targets extending beyond the requisite service period. | |||||||||
Revenue from Contracts with Customers | |||||||||
Effective for fiscal years beginning after December 15, 2016, the FASB issued guidance related to revenue from contracts with customers. The core principle of the new guidance is that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ProAssurance plans to adopt the guidance beginning January 1, 2017. As the majority of ProAssurance's revenues come from insurance contracts which fall under the scope of other FASB standards, adoption of the guidance is expected to have no material effect on ProAssurance’s results of operations or financial position. | |||||||||
Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern | |||||||||
Effective for fiscal years ending after December 15, 2016 and interim periods beginning after December 15, 2016, the FASB issued guidance that establishes principles and definitions related to management's evaluation of whether there is substantial doubt about the organization's ability to continue as a going concern. For each interim and annual reporting period, the new guidance requires management to evaluate the organization's ability to meet its obligations as they are due within one year of the date the financial statements are issued and requires disclosure when there is substantial doubt regarding the organization's ability to continue as a going concern. ProAssurance plans to adopt the guidance on its effective date. Adoption is expected to have no effect on ProAssurance’s results of operations or financial position. |
Accounting_Policies_Tables
Accounting Policies (Tables) | 12 Months Ended | |||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||
Summary of allowances for credit losses related to premium and agency receivables | At December 31, 2014 and 2013 ProAssurance had established allowances for credit losses related to premium and agency receivables as shown in the following table. | |||||||||||||||||||||||||||
(in thousands) | Premium | Agency | ||||||||||||||||||||||||||
Receivables | Receivables | |||||||||||||||||||||||||||
Allowance for credit losses: | ||||||||||||||||||||||||||||
Balance at December 31, 2012 | $ | 1,000 | $ | 286 | ||||||||||||||||||||||||
Estimated credit losses | 236 | — | ||||||||||||||||||||||||||
Account write offs, net of recoveries | (246 | ) | (236 | ) | ||||||||||||||||||||||||
Balance at December 31, 2013 | 990 | 50 | ||||||||||||||||||||||||||
Estimated credit losses | 299 | — | ||||||||||||||||||||||||||
Account write offs, net of recoveries | (299 | ) | — | |||||||||||||||||||||||||
Allowance acquired from acquisition | 225 | — | ||||||||||||||||||||||||||
Balance at December 31, 2014 | $ | 1,215 | $ | 50 | ||||||||||||||||||||||||
Schedule of Intangible Assets Excluding Goodwill | Information about ProAssurance's intangible assets is shown in the following table. | |||||||||||||||||||||||||||
Gross Carrying Value | Accumulated Amortization | Amortization Expense | ||||||||||||||||||||||||||
31-Dec | 31-Dec | Year Ended December 31 | ||||||||||||||||||||||||||
(In millions) | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2012 | |||||||||||||||||||||
Intangible Assets | ||||||||||||||||||||||||||||
Non-amortizable | $ | 25.8 | $ | 16.8 | ||||||||||||||||||||||||
Amortizable | 96.2 | 51.7 | $ | 21.2 | $ | 16.5 | $ | 10.3 | $ | 5.3 | $ | 4.5 | ||||||||||||||||
Total Intangible Assets | $ | 122 | $ | 68.5 | ||||||||||||||||||||||||
Other Liabilities | Other liabilities at December 31, 2014 and 2013 consisted of the following: | |||||||||||||||||||||||||||
(In millions) | 2014 | 2013 | ||||||||||||||||||||||||||
Unpaid dividends | $ | 167.7 | $ | 18.5 | ||||||||||||||||||||||||
Segregated portfolio cell (SPC) dividends payable | 15.8 | — | ||||||||||||||||||||||||||
All other | 137.4 | 124.6 | ||||||||||||||||||||||||||
Total other liabilities | $ | 320.9 | $ | 143.1 | ||||||||||||||||||||||||
Business_Combinations_Tables
Business Combinations (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Business Combinations [Abstract] | ||||||||||||
Purchase Price Allocation | The purchase consideration for both the acquisitions of Eastern and Medmarc was allocated to the assets acquired and liabilities assumed based on their estimated fair values on the acquisition dates, as shown in the table below. For the Eastern acquisition, goodwill of $49.6 million was recognized equal to the excess of the purchase price over the net fair value of identifiable assets acquired and liabilities assumed. Factors contributing to the recognition of goodwill include strategic and synergistic benefits that are expected to be realized as a result of the acquisition. These benefits include insurance market diversification, expanded access to alternative markets, and opportunities to reach additional insureds in the healthcare market by being a single source provider of a suite of insurance products. None of the goodwill is expected to be tax deductible. | |||||||||||
For the Medmarc acquisition, the purchase consideration was less than the estimated fair value of the net assets acquired resulting in a gain on the acquisition of $32.3 million. ProAssurance believes it was able to acquire Medmarc for less than the fair value of its net assets due to Medmarc's declining premium base and its small capital position relative to other insurers in the medical technology and life sciences products liability insurance market. | ||||||||||||
(In thousands) | Eastern | Medmarc | ||||||||||
Fixed maturities, available for sale | $ | 107,131 | $ | 269,529 | ||||||||
Equity securities, trading | 65,945 | 30,976 | ||||||||||
Cash and short-term investments | 58,944 | 24,008 | ||||||||||
Other investments | 42,133 | 5,340 | ||||||||||
Premiums receivable, net | 71,989 | 2,986 | ||||||||||
Receivable from reinsurers on paid and unpaid losses and LAE | 18,942 | 73,107 | ||||||||||
Intangible assets | 59,000 | 3,630 | ||||||||||
Deferred policy acquisition costs (see discussion below) | 10,593 | — | ||||||||||
Other assets | 19,225 | 14,614 | ||||||||||
Reserve for losses and loss adjustment expenses | (153,191 | ) | (201,072 | ) | ||||||||
Unearned premiums | (80,268 | ) | (16,937 | ) | ||||||||
Ceded balances payable | (9,507 | ) | — | |||||||||
Segregated portfolio cells dividends payable | (14,430 | ) | — | |||||||||
Deferred tax liabilities, net | (12,835 | ) | (4,934 | ) | ||||||||
Other liabilities | (28,038 | ) | (15,233 | ) | ||||||||
Fair value of net assets acquired | $ | 155,633 | $ | 186,014 | ||||||||
Goodwill | 49,610 | — | ||||||||||
Gain on acquisition | — | (32,314 | ) | |||||||||
Total purchase consideration | $ | 205,243 | $ | 153,700 | ||||||||
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | Intangible assets acquired from Eastern and Medmarc included the following: | |||||||||||
Eastern | Medmarc | |||||||||||
(In millions) | Estimated Fair Value on Acquisition Date | Estimated | Estimated Fair Value on Acquisition Date | Estimated | ||||||||
Useful Life | Useful Life | |||||||||||
Agency relationships | $27.00 | 15 | $— | — | ||||||||
Policyholder relationships | 8 | 15 | — | — | ||||||||
Trade names | 8 | 15 | — | — | ||||||||
Non-compete agreements | 7 | 3 | 1.1 | 2 | -1 | |||||||
Total intangibles subject to amortization | $50.00 | 13 | -2 | $1.10 | 2 | -2 | ||||||
Insurance license agreements | $9.00 | Indefinite | $2.50 | Indefinite | ||||||||
(1) Medmarc non-compete agreements were fully amortized as of December 31, 2014. | ||||||||||||
(2) Reflects the weighted average estimated useful life of acquired intangible assets that are subject to amortization. | ||||||||||||
ProAssurance Consolidated results | The following table provides Pro Forma Consolidated Results for the years ended December 31, 2014, 2013 and 2012 as if the Eastern transaction had occurred on January 1, 2013 and the Medmarc transaction had occurred on January 1, 2012. ProAssurance Actual Consolidated Results have been adjusted by the following, net of related tax effects, to reflect the Pro Forma Consolidated Results below. | |||||||||||
• | For the year ended December 31, 2013, ProAssurance 2013 Actual Consolidated Results, which did not include Eastern, have been adjusted to include Eastern's 2013 operating results. ProAssurance Actual Consolidated Results for the year ended December 31, 2014 included Eastern's operating results (Revenue of $202.2 million and Net income of $9.1 million). | |||||||||||
• | For the year ended December 31, 2012, ProAssurance 2012 Actual Consolidated Results, which did not include Medmarc, have been adjusted to include Medmarc's 2012 operating results. ProAssurance Actual Consolidated Results for the years ended December 31, 2014 and 2013 included Medmarc's operating results (Revenue of $41.4 million and $46.5 million, respectively, and Net Income of $8.1 million and $15.7 million, respectively). | |||||||||||
• | Certain costs included in ProAssurance Actual Consolidated Results for the years ended December 31, 2014 and 2013 have been reported in the Pro Forma Consolidated Results as if the costs had been incurred for the years ended December 31, 2013 and 2012, respectively. Such costs include direct transaction costs and certain compensation costs directly related to the integration of Eastern and Medmarc operations. | |||||||||||
• | Prior to the acquisition date, Medmarc reported on a statutory basis and expensed policy acquisition costs associated with successful contracts as incurred. After the acquisition date, in accordance with GAAP, Medmarc policy acquisition costs associated with successful contracts were capitalized and amortized to expense as the related premium revenues were earned, but no amortization was recognized for Medmarc policies written prior to the acquisition date. The Pro Forma Consolidated Results for both 2013 and 2012 have been adjusted to reflect policy acquisition costs as if Medmarc had followed GAAP guidance for these costs in pre-acquisition periods. | |||||||||||
• | Net income for the years ended December 31, 2013 and 2012, respectively, was reduced to reflect amortization of intangible assets and debt security premiums and discounts recorded as a part of the Eastern and Medmarc purchase price allocations. | |||||||||||
• | The non-taxable gain on the Medmarc acquisition of $32.3 million that was included in ProAssurance Actual Consolidated Results for the year ended December 31, 2013 has been reported in the Pro Forma Consolidated Results as being recognized during the year ended December 31, 2012. | |||||||||||
Year Ended December 31, 2014 | Year Ended December 31, 2013 | Year Ended December 31, 2012 | ||||||||||
(In thousands) | ProAssurance | ProAssurance | ProAssurance | ProAssurance | ProAssurance | ProAssurance | ||||||
Pro Forma | Actual | Pro Forma | Actual | Pro Forma | Actual | |||||||
Consolidated | Consolidated Results | Consolidated | Consolidated Results | Consolidated | Consolidated Results | |||||||
Results | Results | Results | ||||||||||
Revenue | $852,326 | $852,326 | $926,873 | $740,178 | $757,240 | $715,854 | ||||||
Net income | $197,533 | $196,565 | $263,446 | * | $297,523 | $317,097 | $275,470 | |||||
* Includes adjustments related to Eastern of $0.4 million and Medmarc of $33.7 million. |
Fair_Value_Measurement_Tables
Fair Value Measurement (Tables) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||
Assets and liabilities measured at fair value | Fair values of assets measured at fair value on a recurring basis as of December 31, 2014 and December 31, 2013, are shown in the following tables. The tables also indicate the fair value hierarchy of the valuation techniques utilized to determine those fair values. For some assets, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. When this is the case, the asset is categorized based on the level of the most significant input to the fair value measurement. Assessments of the significance of a particular input to the fair value measurement require judgment and consideration of factors specific to the assets being valued. | |||||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||
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 | $ | — | $ | 166,512 | $ | — | $ | 166,512 | ||||||||||||||||
U.S. Government-sponsored enterprise obligations | — | 39,563 | — | 39,563 | ||||||||||||||||||||
State and municipal bonds | — | 1,057,590 | 5,025 | 1,062,615 | ||||||||||||||||||||
Corporate debt, multiple observable inputs | — | 1,404,020 | — | 1,404,020 | ||||||||||||||||||||
Corporate debt, limited observable inputs: | ||||||||||||||||||||||||
Other corporate debt, NRSRO ratings available | — | — | 10,474 | 10,474 | ||||||||||||||||||||
Other corporate debt, NRSRO ratings not available | — | — | 2,607 | 2,607 | ||||||||||||||||||||
Residential mortgage-backed securities | — | 276,056 | — | 276,056 | ||||||||||||||||||||
Agency commercial mortgage-backed securities | — | 15,493 | — | 15,493 | ||||||||||||||||||||
Other commercial mortgage-backed securities | — | 51,063 | — | 51,063 | ||||||||||||||||||||
Other asset-backed securities | — | 111,855 | 4,769 | 116,624 | ||||||||||||||||||||
Equity securities | ||||||||||||||||||||||||
Financial | 79,341 | — | — | 79,341 | ||||||||||||||||||||
Utilities/Energy | 25,629 | — | — | 25,629 | ||||||||||||||||||||
Consumer oriented | 65,670 | — | — | 65,670 | ||||||||||||||||||||
Industrial | 55,460 | — | — | 55,460 | ||||||||||||||||||||
Bond funds | 55,196 | — | — | 55,196 | ||||||||||||||||||||
All other | 33,186 | — | — | 33,186 | ||||||||||||||||||||
Short-term investments | 131,199 | 60 | — | 131,259 | ||||||||||||||||||||
Financial instruments carried at fair value, classified as a part of: | ||||||||||||||||||||||||
Investment in unconsolidated subsidiaries | — | — | 133,250 | 133,250 | ||||||||||||||||||||
Other investments | $ | 6,050 | $ | 22,908 | $ | — | $ | 28,958 | ||||||||||||||||
Total assets | $ | 451,731 | $ | 3,145,120 | $ | 156,125 | $ | 3,752,976 | ||||||||||||||||
31-Dec-13 | ||||||||||||||||||||||||
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 | $ | — | $ | 170,714 | $ | — | $ | 170,714 | ||||||||||||||||
U.S. Government-sponsored enterprise obligations | — | 32,768 | — | 32,768 | ||||||||||||||||||||
State and municipal bonds | — | 1,147,328 | 7,338 | 1,154,666 | ||||||||||||||||||||
Corporate debt, multiple observable inputs | — | 1,346,977 | — | 1,346,977 | ||||||||||||||||||||
Corporate debt, limited observable inputs: | ||||||||||||||||||||||||
Other corporate debt, NRSRO ratings available | — | — | 11,449 | 11,449 | ||||||||||||||||||||
Other corporate debt, NRSRO ratings not available | — | — | 2,727 | 2,727 | ||||||||||||||||||||
Residential mortgage-backed securities | — | 235,614 | — | 235,614 | ||||||||||||||||||||
Agency commercial mortgage-backed securities | — | 27,475 | — | 27,475 | ||||||||||||||||||||
Other commercial mortgage-backed securities | — | 61,390 | — | 61,390 | ||||||||||||||||||||
Other asset-backed securities | — | 67,455 | 6,814 | 74,269 | ||||||||||||||||||||
Equity securities | ||||||||||||||||||||||||
Financial | 81,536 | — | — | 81,536 | ||||||||||||||||||||
Utilities/Energy | 32,350 | — | — | 32,350 | ||||||||||||||||||||
Consumer oriented | 66,461 | — | — | 66,461 | ||||||||||||||||||||
Industrial | 57,262 | — | — | 57,262 | ||||||||||||||||||||
All other | 15,932 | — | — | 15,932 | ||||||||||||||||||||
Short-term investments | 248,605 | 248,605 | ||||||||||||||||||||||
Financial instruments carried at fair value, classified as a part of: | ||||||||||||||||||||||||
Investment in unconsolidated subsidiaries | — | — | 72,062 | 72,062 | ||||||||||||||||||||
Total assets | $ | 502,146 | $ | 3,089,721 | $ | 100,390 | $ | 3,692,257 | ||||||||||||||||
Investments in Limited liability companies and limited partnerships | Investment in unconsolidated subsidiaries consisted of limited partnership (LP) and limited liability company (LLC) interests valued using the NAV provided by the LP/LLC, which approximated the fair value of the interest. | |||||||||||||||||||||||
Such interests include the following: | ||||||||||||||||||||||||
Unfunded | Fair Value | |||||||||||||||||||||||
Commitments | ||||||||||||||||||||||||
(In thousands) | December 31, | December 31, | December 31, | |||||||||||||||||||||
2014 | 2014 | 2013 | ||||||||||||||||||||||
Investments in LPs/LLCs: | ||||||||||||||||||||||||
Private debt funds (1) | $27,578 | $ | 37,296 | $ | 13,233 | |||||||||||||||||||
Long equity fund (2) | None | 6,747 | 6,574 | |||||||||||||||||||||
Long/Short equity funds (3) | None | 25,301 | 28,385 | |||||||||||||||||||||
Non-public equity funds (4) | $66,545 | 51,811 | 23,870 | |||||||||||||||||||||
Multi-strategy fund of funds (5) | None | 8,271 | — | |||||||||||||||||||||
Structured credit fund (6) | None | 3,824 | — | |||||||||||||||||||||
$ | 133,250 | $ | 72,062 | |||||||||||||||||||||
-1 | Comprised of interests in two unrelated LP funds that are structured to provide interest distributions primarily through diversified portfolios of private debt instruments. One LP allows redemption by special consent; the other does not permit redemption. Income and capital are to be periodically distributed at the discretion of the LPs over an anticipated time frame that spans from 3 to 8 years. | |||||||||||||||||||||||
-2 | This fund is an LP that holds long equities of public international companies. Redemptions are allowed at the end of any calendar month with a prior notice requirement of 15 days and are paid within 10 days of the end of the calendar month of the redemption request. | |||||||||||||||||||||||
-3 | Comprised of interests in multiple unrelated LP funds. The funds hold primarily long and short North American equities, and target absolute returns using strategies designed to take advantage of event-driven market opportunities. The funds generally permit quarterly or semi-annual redemptions of the investors' existing capital balance with notice requirements of 30 to 90 days. For some funds, redemptions above specified thresholds (lowest threshold is 90%) may be only partially payable until after a fund audit is completed and are then payable within 30 days. | |||||||||||||||||||||||
-4 | Comprised of interests in three unrelated LP funds, each structured to provide capital appreciation through diversified investments in private equity, which can include investments in buyout, venture capital, mezzanine debt, distressed debt and other private equity-oriented LPs. One LP allows redemption by special consent; 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 9 years. | |||||||||||||||||||||||
-5 | This fund is an LLC structured to build and manage low volatility, multi-manager portfolios that have little or no correlation to the broader fixed income and equity security markets. Redemptions are not permitted but the LLC Board is permitted discretion to periodically extend offers to repurchase units of the LLC. | |||||||||||||||||||||||
-6 | This fund is an LP seeking to obtain superior risk-adjusted absolute returns by acquiring and actively managing a diversified portfolio of debt securities, including bonds, loans and other asset-backed instruments. Redemptions are allowed at any quarter-end with a prior notice requirement of 90 days. | |||||||||||||||||||||||
Summary of quantitative information about Level 3 fair value measurements | Quantitative Information Regarding Level 3 Valuations | |||||||||||||||||||||||
Quantitative Information about Level 3 Fair Value Measurements | ||||||||||||||||||||||||
Fair Value at | ||||||||||||||||||||||||
(In millions) | 31-Dec-14 | 31-Dec-13 | Valuation Technique | Unobservable Input | Range | |||||||||||||||||||
(Weighted Average) | ||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||
State and municipal bonds | $5.00 | $7.30 | Market Comparable | Comparability Adjustment | 0% - 10% (5%) | |||||||||||||||||||
Securities | ||||||||||||||||||||||||
Discounted Cash Flows | Comparability Adjustment | 0% - 10% (5%) | ||||||||||||||||||||||
Corporate debt with limited observable inputs | $13.10 | $14.20 | Market Comparable | Comparability Adjustment | 0% - 5% (2.5%) | |||||||||||||||||||
Securities | ||||||||||||||||||||||||
Discounted Cash Flows | Comparability Adjustment | 0% - 5% (2.5%) | ||||||||||||||||||||||
Other asset-backed securities | $4.80 | $6.80 | Market Comparable | Comparability Adjustment | 0% - 5% (2.5%) | |||||||||||||||||||
Securities | ||||||||||||||||||||||||
Discounted Cash Flows | Comparability Adjustment | 0% - 5% (2.5%) | ||||||||||||||||||||||
Summary of changes in the fair value of assets measured at fair value | The following tables (the Level 3 Tables) present summary information regarding changes in the fair value of assets measured at fair value using Level 3 inputs. | |||||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||
Level 3 Fair Value Measurements – Assets | ||||||||||||||||||||||||
(In thousands) | U.S. Government-sponsored Enterprise Obligations | State and Municipal Bonds | Corporate Debt | Asset-backed Securities | Investment in Unconsolidated Subsidiaries | Total | ||||||||||||||||||
Balance December 31, 2013 | $ | — | $ | 7,338 | $ | 14,176 | $ | 6,814 | $ | 72,062 | $ | 100,390 | ||||||||||||
Total gains (losses) realized and unrealized: | ||||||||||||||||||||||||
Included in earnings, as a part of: | ||||||||||||||||||||||||
Net investment income | — | (14 | ) | 65 | — | — | 51 | |||||||||||||||||
Equity in earnings of unconsolidated subsidiaries | — | — | — | — | 10,538 | 10,538 | ||||||||||||||||||
Net realized investment gains (losses) | — | (95 | ) | 3 | — | — | (92 | ) | ||||||||||||||||
Included in other comprehensive income | 1 | (29 | ) | 688 | 59 | — | 719 | |||||||||||||||||
Purchases | 1,000 | 1,861 | 2,000 | 3,340 | 56,340 | 64,541 | ||||||||||||||||||
Sales | — | (1,731 | ) | (1,826 | ) | (61 | ) | (5,690 | ) | (9,308 | ) | |||||||||||||
Transfers in | — | 2,119 | — | 305 | — | 2,424 | ||||||||||||||||||
Transfers out | (1,001 | ) | (4,424 | ) | (2,025 | ) | (5,688 | ) | — | (13,138 | ) | |||||||||||||
Balance December 31, 2014 | $ | — | $ | 5,025 | $ | 13,081 | $ | 4,769 | $ | 133,250 | $ | 156,125 | ||||||||||||
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end | $ | — | $ | — | $ | — | $ | — | $ | 10,538 | $ | 10,538 | ||||||||||||
31-Dec-13 | ||||||||||||||||||||||||
Level 3 Fair Value Measurements – Assets | ||||||||||||||||||||||||
(In thousands) | U.S. Government-sponsored Enterprise Obligations | State and Municipal Bonds | Corporate Debt | Asset-backed Securities | Investment in Unconsolidated Subsidiaries | Total | ||||||||||||||||||
Balance December 31, 2012 | $ | — | $ | 7,175 | $ | 15,191 | $ | 4,035 | $ | 33,739 | $ | 60,140 | ||||||||||||
Total gains (losses) realized and unrealized: | ||||||||||||||||||||||||
Included in earnings, as a part of: | ||||||||||||||||||||||||
Net investment income | — | — | (103 | ) | (17 | ) | — | (120 | ) | |||||||||||||||
Equity in earnings of unconsolidated subsidiaries | — | — | — | — | 6,877 | 6,877 | ||||||||||||||||||
Net realized investment gains (losses) | — | (44 | ) | (69 | ) | — | — | (113 | ) | |||||||||||||||
Included in other comprehensive income | — | 1 | (725 | ) | (61 | ) | — | (785 | ) | |||||||||||||||
Purchases | — | — | 9,470 | 1,356 | 24,567 | 35,393 | ||||||||||||||||||
Sales | — | (2,106 | ) | (1,629 | ) | (18 | ) | (14,632 | ) | (18,385 | ) | |||||||||||||
Transfers in | — | 2,312 | 2,114 | 3,800 | 21,511 | 29,737 | ||||||||||||||||||
Transfers out | — | — | (10,073 | ) | (2,281 | ) | — | (12,354 | ) | |||||||||||||||
Balance December 31, 2013 | $ | — | $ | 7,338 | $ | 14,176 | $ | 6,814 | $ | 72,062 | $ | 100,390 | ||||||||||||
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end | $ | — | $ | — | $ | — | $ | — | $ | 6,877 | $ | 6,877 | ||||||||||||
Financial instruments not measured at fair value | The following table provides the estimated fair value of our financial instruments that, in accordance with GAAP for the type of investment, are measured using a methodology other than fair value. All fair values provided fall within the Level 3 fair value category. | |||||||||||||||||||||||
31-Dec-14 | 31-Dec-13 | |||||||||||||||||||||||
(In thousands) | Carrying | Fair | Carrying | Fair | ||||||||||||||||||||
Value | Value | Value | Value | |||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||
BOLI | $ | 56,381 | $ | 56,381 | $ | 54,374 | $ | 54,374 | ||||||||||||||||
Other investments | 57,099 | 57,994 | 52,240 | 51,833 | ||||||||||||||||||||
Other assets | 22,440 | 22,399 | 17,940 | 17,940 | ||||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||
Senior notes due 2023 | $ | 250,000 | $ | 276,503 | $ | 250,000 | $ | 262,500 | ||||||||||||||||
Other liabilities | 14,656 | 14,645 | 13,303 | 13,303 | ||||||||||||||||||||
Investments_Tables
Investments (Tables) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||
Amortized cost and estimated fair value of available-for-sale fixed maturities and equity securities | Available-for-sale securities at December 31, 2014 and December 31, 2013 included the following: | |||||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||
(In thousands) | Amortized | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||||||||||
Cost | ||||||||||||||||||||||||
Fixed maturities | ||||||||||||||||||||||||
U.S. Treasury obligations | $ | 163,714 | $ | 3,785 | $ | 987 | $ | 166,512 | ||||||||||||||||
U.S. Government-sponsored enterprise obligations | 38,022 | 1,641 | 100 | 39,563 | ||||||||||||||||||||
State and municipal bonds | 1,015,555 | 47,395 | 335 | 1,062,615 | ||||||||||||||||||||
Corporate debt | 1,389,970 | 44,234 | 17,103 | 1,417,101 | ||||||||||||||||||||
Residential mortgage-backed securities | 266,306 | 10,198 | 448 | 276,056 | ||||||||||||||||||||
Agency commercial mortgage-backed securities | 15,344 | 208 | 59 | 15,493 | ||||||||||||||||||||
Other commercial mortgage-backed securities | 50,025 | 1,137 | 99 | 51,063 | ||||||||||||||||||||
Other asset-backed securities | 116,541 | 288 | 205 | 116,624 | ||||||||||||||||||||
$ | 3,055,477 | $ | 108,886 | $ | 19,336 | $ | 3,145,027 | |||||||||||||||||
31-Dec-13 | ||||||||||||||||||||||||
(In thousands) | Amortized | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||||||||||
Cost | ||||||||||||||||||||||||
Fixed maturities | ||||||||||||||||||||||||
U.S. Treasury obligations | $ | 166,115 | $ | 6,118 | $ | 1,519 | $ | 170,714 | ||||||||||||||||
U.S. Government-sponsored enterprise obligations | 30,942 | 2,251 | 425 | 32,768 | ||||||||||||||||||||
State and municipal bonds | 1,116,060 | 46,533 | 7,927 | 1,154,666 | ||||||||||||||||||||
Corporate debt | 1,321,838 | 53,059 | 13,744 | 1,361,153 | ||||||||||||||||||||
Residential mortgage-backed securities | 230,861 | 7,608 | 2,855 | 235,614 | ||||||||||||||||||||
Agency commercial mortgage-backed securities | 27,268 | 343 | 136 | 27,475 | ||||||||||||||||||||
Other commercial mortgage-backed securities | 59,066 | 2,491 | 167 | 61,390 | ||||||||||||||||||||
Other asset-backed securities | 74,106 | 487 | 324 | 74,269 | ||||||||||||||||||||
$ | 3,026,256 | $ | 118,890 | $ | 27,097 | $ | 3,118,049 | |||||||||||||||||
Schedule of available for sale securities by contractual maturity | The recorded cost basis and estimated fair value of available-for-sale fixed maturities at December 31, 2014, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. | |||||||||||||||||||||||
(In thousands) | Amortized | Due in one | Due after | Due after | Due after | Total Fair | ||||||||||||||||||
Cost | year or less | one year | five years | ten years | Value | |||||||||||||||||||
through | through | |||||||||||||||||||||||
five years | ten years | |||||||||||||||||||||||
Fixed maturities, available for sale | ||||||||||||||||||||||||
U.S. Treasury obligations | $ | 163,714 | $ | 9,584 | $ | 113,489 | $ | 39,264 | $ | 4,175 | $ | 166,512 | ||||||||||||
U.S. Government-sponsored enterprise obligations | 38,022 | 3,641 | 25,286 | 10,287 | 349 | 39,563 | ||||||||||||||||||
State and municipal bonds | 1,015,555 | 44,334 | 380,741 | 453,275 | 184,265 | 1,062,615 | ||||||||||||||||||
Corporate debt | 1,389,970 | 115,301 | 711,806 | 566,585 | 23,409 | 1,417,101 | ||||||||||||||||||
Residential mortgage-backed securities | 266,306 | 276,056 | ||||||||||||||||||||||
Agency commercial mortgage-backed securities | 15,344 | 15,493 | ||||||||||||||||||||||
Other commercial mortgage-backed securities | 50,025 | 51,063 | ||||||||||||||||||||||
Other asset-backed securities | 116,541 | 116,624 | ||||||||||||||||||||||
$ | 3,055,477 | $ | 3,145,027 | |||||||||||||||||||||
Other Investments | Other investments at December 31, 2014 and December 31, 2013 was comprised as follows: | |||||||||||||||||||||||
(In thousands) | December 31, | December 31, | ||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
Investments in LPs/LLCs, at cost | $ | 53,258 | $ | 47,258 | ||||||||||||||||||||
Convertible securities, at fair value, see Note 1 | 28,958 | — | ||||||||||||||||||||||
Other, principally FHLB capital stock, at cost | 3,841 | 4,982 | ||||||||||||||||||||||
$ | 86,057 | $ | 52,240 | |||||||||||||||||||||
Unconsolidated Subsidiaries | ProAssurance holds investments in unconsolidated subsidiaries, accounted for under the equity method. The investments include the following: | |||||||||||||||||||||||
31-Dec-14 | Carrying Value | |||||||||||||||||||||||
(In thousands) | Unfunded | Percentage | December 31, | December 31, | ||||||||||||||||||||
Commitments* | Ownership | 2014 | 2013 | |||||||||||||||||||||
Investment in LPs/LLCs: | ||||||||||||||||||||||||
Tax credit partnerships | $ | 15,537 | See below | $ | 133,143 | $ | 142,174 | |||||||||||||||||
Private debt funds | 27,578 | < | 20% | 37,296 | 13,233 | |||||||||||||||||||
Long equity fund | None | < | 20% | 6,747 | 6,574 | |||||||||||||||||||
Long/short equity funds | None | < | 25% | 25,301 | 28,385 | |||||||||||||||||||
Non-public equity funds | 80,070 | < | 20% | 58,128 | 23,870 | |||||||||||||||||||
Multi-strategy fund of funds | — | < | 20% | 8,271 | — | |||||||||||||||||||
Structured credit fund | — | < | 20% | 3,824 | — | |||||||||||||||||||
Real estate fund | 6,526 | < | 20% | 3,791 | — | |||||||||||||||||||
$ | 276,501 | $ | 214,236 | |||||||||||||||||||||
* Unfunded commitments are included in the carrying value of tax credit partnerships only. | ||||||||||||||||||||||||
Investments held in an unrealized loss position | The following tables provide summarized information with respect to investments held in an unrealized loss position at December 31, 2014 and December 31, 2013, including the length of time the investment had been held in a continuous unrealized loss position. | |||||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||
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 | $ | 61,209 | $ | 987 | $ | 46,869 | $ | 617 | $ | 14,340 | $ | 370 | ||||||||||||
U.S. Government-sponsored enterprise obligations | 6,268 | 100 | 2,775 | 44 | 3,493 | 56 | ||||||||||||||||||
State and municipal bonds | 39,831 | 335 | 18,910 | 84 | 20,921 | 251 | ||||||||||||||||||
Corporate debt | 423,107 | 17,103 | 326,804 | 13,236 | 96,303 | 3,867 | ||||||||||||||||||
Residential mortgage-backed securities | 45,006 | 448 | 14,406 | 31 | 30,600 | 417 | ||||||||||||||||||
Agency commercial mortgage-backed securities | 4,783 | 59 | 70 | — | 4,713 | 59 | ||||||||||||||||||
Other commercial mortgage-backed securities | 13,860 | 99 | 7,005 | 28 | 6,855 | 71 | ||||||||||||||||||
Other asset-backed securities | 62,577 | 205 | 59,176 | 109 | 3,401 | 96 | ||||||||||||||||||
$ | 656,641 | $ | 19,336 | $ | 476,015 | $ | 14,149 | $ | 180,626 | $ | 5,187 | |||||||||||||
Other investments | ||||||||||||||||||||||||
Investments in LPs/LLCs carried at cost | $ | 23,683 | $ | 3,948 | $ | 22,265 | $ | 3,711 | $ | 1,418 | $ | 237 | ||||||||||||
31-Dec-13 | ||||||||||||||||||||||||
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 | $ | 47,668 | $ | 1,519 | $ | 44,304 | $ | 1,182 | $ | 3,364 | $ | 337 | ||||||||||||
U.S. Goverment-sponsored enterprise obligations | $ | 6,640 | $ | 425 | $ | 5,752 | $ | 321 | $ | 888 | $ | 104 | ||||||||||||
State and municipal bonds | 203,970 | 7,927 | 184,401 | 6,640 | 19,569 | 1,287 | ||||||||||||||||||
Corporate debt | 349,277 | 13,744 | 324,510 | 12,061 | 24,767 | 1,683 | ||||||||||||||||||
Residential mortgage-backed securities | 93,608 | 2,855 | 84,045 | 2,393 | 9,563 | 462 | ||||||||||||||||||
Agency commercial mortgage-backed securities | 11,658 | 136 | 11,082 | 116 | 576 | 20 | ||||||||||||||||||
Other commercial mortgage-backed securities | 11,153 | 167 | 10,215 | 159 | 938 | 8 | ||||||||||||||||||
Other asset-backed securities | 25,539 | 324 | 21,804 | 77 | 3,735 | 247 | ||||||||||||||||||
$ | 749,513 | $ | 27,097 | $ | 686,113 | $ | 22,949 | $ | 63,400 | $ | 4,148 | |||||||||||||
Other investments | ||||||||||||||||||||||||
Investments in LPs/LLCs carried at cost | $ | 14,752 | $ | 1,059 | $ | 13,166 | $ | 1,018 | $ | 1,586 | $ | 41 | ||||||||||||
Net Investment Income | Net investment income by investment category was as follows: | |||||||||||||||||||||||
Year Ended December 31 | ||||||||||||||||||||||||
(In thousands) | 2014 | 2013 | 2012 | |||||||||||||||||||||
Fixed maturities | $ | 111,895 | $ | 122,065 | $ | 133,088 | ||||||||||||||||||
Equities | 10,817 | 9,454 | 6,947 | |||||||||||||||||||||
Short-term and Other investments | 8,833 | 2,584 | 660 | |||||||||||||||||||||
Business owned life insurance | 2,006 | 1,960 | 2,008 | |||||||||||||||||||||
Investment fees and expenses | (7,994 | ) | (6,798 | ) | (6,609 | ) | ||||||||||||||||||
Net investment income | $ | 125,557 | $ | 129,265 | $ | 136,094 | ||||||||||||||||||
Net realized investment gains (losses) | The following table provides detailed information regarding net realized investment gains (losses): | |||||||||||||||||||||||
Year Ended December 31 | ||||||||||||||||||||||||
(In thousands) | 2014 | 2013 | 2012 | |||||||||||||||||||||
Total other-than-temporary impairment losses: | ||||||||||||||||||||||||
State and municipal bonds | $ | (50 | ) | $ | (71 | ) | $ | — | ||||||||||||||||
Residential mortgage-backed securities | — | — | (557 | ) | ||||||||||||||||||||
Corporate debt | (1,425 | ) | — | (878 | ) | |||||||||||||||||||
Other investments | — | — | (131 | ) | ||||||||||||||||||||
Portion recognized in (reclassified from) Other Comprehensive Income: | ||||||||||||||||||||||||
Corporate debt | 268 | — | (201 | ) | ||||||||||||||||||||
Net impairments recognized in earnings | (1,207 | ) | (71 | ) | (1,767 | ) | ||||||||||||||||||
Gross realized gains, available-for-sale securities | 5,627 | 18,130 | 18,645 | |||||||||||||||||||||
Gross realized (losses), available-for-sale securities | (1,103 | ) | (7,031 | ) | (2,076 | ) | ||||||||||||||||||
Net realized gains (losses), trading securities | 28,018 | 20,444 | 1,485 | |||||||||||||||||||||
Net realized gains (losses), Other investments | 326 | — | — | |||||||||||||||||||||
Change in unrealized holding gains (losses), trading securities | (18,883 | ) | 35,507 | 12,673 | ||||||||||||||||||||
Change in unrealized holding gains (losses), convertible securities, carried at fair value | 1,876 | — | — | |||||||||||||||||||||
Decrease (increase) in the fair value of liabilities carried at fair value | — | — | (1,245 | ) | ||||||||||||||||||||
Other | — | 925 | 1,148 | |||||||||||||||||||||
Net realized investment gains (losses) | $ | 14,654 | $ | 67,904 | $ | 28,863 | ||||||||||||||||||
Cumulative credit losses recorded in earnings related to impaired debt securities for which a portion of the OTTI has been recorded in OCI | The following table presents a roll forward of cumulative credit losses recorded in earnings related to impaired debt securities for which a portion of the other-than-temporary impairment was recorded in Other comprehensive income. | |||||||||||||||||||||||
(In thousands) | 2014 | 2013 | 2012 | |||||||||||||||||||||
Balance January 1 | $ | 83 | $ | 3,301 | $ | 5,870 | ||||||||||||||||||
Additional credit losses recognized during the period, related to securities for which: | ||||||||||||||||||||||||
No OTTI has been previously recognized | 149 | — | — | |||||||||||||||||||||
OTTI has been previously recognized | — | — | 268 | |||||||||||||||||||||
Reductions due to: | ||||||||||||||||||||||||
Securities sold during the period (realized) | — | (3,218 | ) | (2,837 | ) | |||||||||||||||||||
Balance December 31 | $ | 232 | $ | 83 | $ | 3,301 | ||||||||||||||||||
Information regarding sales and purchases of available-for-sale securities | Other information regarding sales and purchases of available-for-sale securities is as follows: | |||||||||||||||||||||||
Year Ended December 31 | ||||||||||||||||||||||||
(In millions) | 2014 | 2013 | 2012 | |||||||||||||||||||||
Proceeds from sales (exclusive of maturities and paydowns) | $ | 244.9 | $ | 593.3 | $ | 500.2 | ||||||||||||||||||
Purchases | $ | 645.1 | $ | 519.2 | $ | 646.2 | ||||||||||||||||||
Reinsurance_Tables
Reinsurance (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Insurance [Abstract] | |||||||||||||||||||||||||
Summary of the effect of reinsurance on premiums written and earned | The effect of reinsurance on premiums written and earned was as follows: | ||||||||||||||||||||||||
(In thousands) | 2014 Premiums | 2013 Premiums | 2012 Premiums | ||||||||||||||||||||||
Written | Earned | Written | Earned | Written | Earned | ||||||||||||||||||||
Direct | $ | 761,043 | $ | 755,623 | $ | 566,745 | $ | 568,629 | $ | 536,318 | $ | 558,200 | |||||||||||||
Assumed | 18,566 | 12,987 | 802 | 804 | 113 | 116 | |||||||||||||||||||
Ceded | (77,760 | ) | (68,879 | ) | (42,365 | ) | (41,514 | ) | (8,133 | ) | (7,652 | ) | |||||||||||||
Net premiums | $ | 701,849 | $ | 699,731 | $ | 525,182 | $ | 527,919 | $ | 528,298 | $ | 550,664 | |||||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Components of deferred tax assets and liabilities | Significant components of ProAssurance’s deferred tax assets and liabilities were as follows: | ||||||||||||
(In thousands) | 2014 | 2013 | |||||||||||
Deferred tax assets | |||||||||||||
Unpaid loss discount | $ | 44,002 | $ | 51,879 | |||||||||
Unearned premium adjustment | 23,972 | 21,861 | |||||||||||
Compensation related | 18,623 | 18,172 | |||||||||||
Intangibles | 1,957 | 2,074 | |||||||||||
Total deferred tax assets | 88,554 | 93,986 | |||||||||||
Deferred tax liabilities | |||||||||||||
Deferred acquisition costs | 9,180 | 10,150 | |||||||||||
Unrealized gains on investments, net | 31,342 | 32,127 | |||||||||||
Fixed assets | 3,689 | 4,166 | |||||||||||
Basis differentials–investments | 31,657 | 31,247 | |||||||||||
Intangibles | 27,294 | 13,238 | |||||||||||
Other | 4,210 | 1,301 | |||||||||||
Total deferred tax liabilities | 107,372 | 92,229 | |||||||||||
Net deferred tax assets (liabilities) | $ | (18,818 | ) | $ | 1,757 | ||||||||
Reconciliation of unrecognized tax benefits | A reconciliation of the beginning and ending amounts of unrecognized tax benefits for 2014 and 2013 was as follows: | ||||||||||||
(In thousands) | 2014 | 2013 | 2012 | ||||||||||
Balance at January 1 | $ | 4,823 | $ | 4,823 | $ | 18,585 | |||||||
Increase for tax position acquired as result of a business combination | 414 | — | — | ||||||||||
Increases for tax positions taken during the current year | 163 | — | — | ||||||||||
(Decreases) for tax positions taken during the current year | (4,823 | ) | — | (10,206 | ) | ||||||||
(Decreases) for tax positions taken during prior years | — | — | (3,556 | ) | |||||||||
Balance at December 31 | $ | 577 | $ | 4,823 | $ | 4,823 | |||||||
Reconciliation of expected income tax expense to actual income tax expense | A reconciliation of “expected” income tax expense (35% of income before income taxes) to actual income tax expense for each of the years ended December 31, 2014, 2013 and 2012 follows: | ||||||||||||
(In thousands) | 2014 | 2013 | 2012 | ||||||||||
Computed “expected” tax expense | $ | 91,702 | $ | 139,005 | $ | 138,588 | |||||||
Tax-exempt income | (13,250 | ) | (14,509 | ) | (14,374 | ) | |||||||
Tax credits, qualified affordable housing | (17,918 | ) | (17,888 | ) | (10,005 | ) | |||||||
Non-taxable gain on acquisition | — | (11,310 | ) | — | |||||||||
Non-U.S. Loss | 1,741 | — | — | ||||||||||
Other | 3,165 | 4,338 | 6,287 | ||||||||||
Total | $ | 65,440 | $ | 99,636 | $ | 120,496 | |||||||
Reserve_for_Losses_and_Loss_Ad1
Reserve for Losses and Loss Adjustment Expenses (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Insurance [Abstract] | ||||||||||||
Summary of reserve for losses and loss adjustment expenses | Activity in the reserve for losses and loss adjustment expenses is summarized as follows: | |||||||||||
(In thousands) | 2014 | 2013 | 2012 | |||||||||
Balance, beginning of year | $ | 2,072,822 | $ | 2,054,994 | $ | 2,247,772 | ||||||
Less reinsurance recoverables on unpaid losses and loss adjustment expenses | 247,518 | 191,645 | 247,658 | |||||||||
Net balance, beginning of year | 1,825,304 | 1,863,349 | 2,000,114 | |||||||||
Net reserves acquired from acquisitions | 139,549 | 126,007 | 22,464 | |||||||||
Net losses: | ||||||||||||
Current year | 545,168 | 447,510 | 451,951 | |||||||||
Favorable development of reserves established in prior years, net | (182,084 | ) | (222,749 | ) | (272,038 | ) | ||||||
Total | 363,084 | 224,761 | 179,913 | |||||||||
Paid related to: | ||||||||||||
Current year | (93,737 | ) | (43,616 | ) | (38,439 | ) | ||||||
Prior years | (413,900 | ) | (345,197 | ) | (300,703 | ) | ||||||
Total paid | (507,637 | ) | (388,813 | ) | (339,142 | ) | ||||||
Net balance, end of year | 1,820,300 | 1,825,304 | 1,863,349 | |||||||||
Plus reinsurance recoverables on unpaid losses and loss adjustment expenses | 237,966 | 247,518 | 191,645 | |||||||||
Balance, end of year | $ | 2,058,266 | $ | 2,072,822 | $ | 2,054,994 | ||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Commitments and Contingencies Disclosure [Abstract] | ||||
Schedule of future minimum lease payments for operating leases | The following is a schedule of future minimum lease payments for operating leases that had initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2014. | |||
Operating Leases | ||||
(In thousands) | ||||
2015 | $ | 5,024 | ||
2016 | 4,915 | |||
2017 | 3,601 | |||
2018 | 2,965 | |||
2019 | 2,572 | |||
Thereafter | 5,232 | |||
Total minimum lease payments | $ | 24,309 | ||
Longterm_Debt_Tables
Long-term Debt (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Debt Disclosure [Abstract] | ||||||||
Outstanding long-term debt | ProAssurance’s outstanding long-term debt consisted of the following: | |||||||
(In thousands) | December 31, | December 31, | ||||||
2014 | 2013 | |||||||
Senior notes due 2023, unsecured, interest at 5.3% annually | $ | 250,000 | $ | 250,000 | ||||
Revolving credit agreement, outstanding borrowings not permitted to exceed $200 million aggregately, expires in 2016 | — | — | ||||||
$ | 250,000 | $ | 250,000 | |||||
Shareholders_Equity_Tables
Shareholders' Equity (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Equity [Abstract] | |||||||||||||
Common Stock Outstanding Rollforward | The following is a summary of changes in common shares issued and outstanding during the years ended December 31, 2014, 2013 and 2012: | ||||||||||||
(In thousands of shares) | 2014 | 2013 | 2012 | ||||||||||
Issued and outstanding shares - January 1 | 61,197 | 61,624 | 61,107 | ||||||||||
Repurchase of shares | (4,909 | ) | (681 | ) | — | ||||||||
Shares issued due to exercise of options and vesting of share-based compensation awards | 154 | 169 | 436 | ||||||||||
Other shares issued for compensation and shares reissued to stock purchase plan* | 92 | 85 | 81 | ||||||||||
Issued and outstanding shares - December 31 | 56,534 | 61,197 | 61,624 | ||||||||||
* | Shares issued were valued at fair value (the market price of a ProAssurance common share on the date of issue). | ||||||||||||
Dividends Declared | ProAssurance declared cash dividends during 2014, 2013 and 2012 as follows: | ||||||||||||
Cash Dividends Declared, per Share | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
First Quarter | $ | 0.3 | $ | 0.25 | $ | 0.125 | |||||||
Second Quarter | $ | 0.3 | $ | 0.25 | $ | 0.125 | |||||||
Third Quarter | $ | 0.3 | $ | 0.25 | $ | 0.125 | |||||||
Fourth Quarter* | $ | 2.96 | $ | 0.3 | $ | 2.75 | |||||||
* Includes special dividends of $2.65 per share in 2014 and $2.50 per share in 2012. | |||||||||||||
Reclassification adjustments related to available-for-sale securities | Amounts reclassified from accumulated other comprehensive income to net income and the amounts of deferred tax expense (benefit) included in OCI were as follows: | ||||||||||||
(In thousands) | 2014 | 2013 | 2012 | ||||||||||
Reclassifications from accumulated other comprehensive income to net income, available-for-sale securities: | |||||||||||||
Realized investment gains (losses) | $ | 3,317 | $ | 11,375 | $ | 17,350 | |||||||
Non-credit impairment losses reclassified to earnings, due to sale of securities or reclassification as a credit loss | — | (347 | ) | (2,417 | ) | ||||||||
Total amounts reclassified, before tax effect | 3,317 | 11,028 | 14,933 | ||||||||||
Tax effect (at 35%) | (1,161 | ) | (3,860 | ) | (5,227 | ) | |||||||
Net reclassification adjustments | $ | 2,156 | $ | 7,168 | $ | 9,706 | |||||||
Deferred tax expense (benefit) included in OCI | $ | (785 | ) | $ | (46,157 | ) | $ | 8,262 | |||||
ShareBased_Payments_Tables
Share-Based Payments (Tables) | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||
Summary of compensation expense and related tax benefit recognized during each period, and compensation cost expense in future periods | The following table provides a summary of compensation expense and compensation cost that will be charged to expense in future periods, by award type, and the total related tax benefit recognized during each period. There was no compensation expense related to stock option awards in 2014, 2013 or 2012. | |||||||||||||||||||||
Share-Based | Unrecognized Compensation Cost | |||||||||||||||||||||
Compensation Expense | ||||||||||||||||||||||
Year Ended December 31 | 31-Dec-14 | |||||||||||||||||||||
2014 | 2013 | 2012 | Amount | Remaining | ||||||||||||||||||
Recognition Period | ||||||||||||||||||||||
(In millions) | (In millions) | (Weighted average years) | ||||||||||||||||||||
Restricted Share Units | 1.7 | 1.6 | 1.6 | 2 | 1.8 | |||||||||||||||||
Performance Share Units | 7.6 | 7.1 | 6.7 | 6.3 | 1.7 | |||||||||||||||||
Purchase Match Units | 0.8 | 0.5 | 0.3 | 1.6 | 2.2 | |||||||||||||||||
Total share-based compensation expense | $ | 10.1 | $ | 9.2 | $ | 8.6 | $ | 9.9 | ||||||||||||||
Tax benefit recognized | $ | 3.5 | $ | 3.2 | $ | 3 | ||||||||||||||||
Summary of activity for stock options | ||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||
Options | Weighted | Options | Weighted | Options | Weighted | |||||||||||||||||
Average | Average | Average | ||||||||||||||||||||
Exercise | Exercise | Exercise | ||||||||||||||||||||
Price | Price | Price | ||||||||||||||||||||
Outstanding, beginning of year | 18,082 | $ | 23 | 20,302 | $ | 23.15 | 1,014,661 | $ | 22.76 | |||||||||||||
Granted | — | — | — | — | — | — | ||||||||||||||||
Exercised | (13,626 | ) | 22.47 | (2,220 | ) | 24.28 | (994,148 | ) | 22.75 | |||||||||||||
Forfeited or expired | — | — | — | — | (211 | ) | 25.67 | |||||||||||||||
Outstanding at end of year | 4,456 | 24.64 | 18,082 | 23 | 20,302 | 23.15 | ||||||||||||||||
Exercisable at end of year | 4,456 | 24.64 | 18,082 | 23 | 20,302 | 23.15 | ||||||||||||||||
Outstanding at end of year, | 4,456 | 24.64 | 18,082 | 23 | 20,302 | 23.15 | ||||||||||||||||
vested or expected to vest | ||||||||||||||||||||||
Summary of activity related to management share awards | Activity for restricted share units during 2014, 2013 and 2012 is summarized below. Grant date fair values are based on the market value of a ProAssurance common share on the date of grant. | |||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||
Units | Weighted | Units | Weighted | Units | Weighted | |||||||||||||||||
Average | Average | Average | ||||||||||||||||||||
Grant Date | Grant Date | Grant Date | ||||||||||||||||||||
Fair Value | Fair Value | Fair Value | ||||||||||||||||||||
Beginning non-vested balance | 138,770 | $ | 38.92 | 157,212 | $ | 31.94 | 167,236 | $ | 25.52 | |||||||||||||
Granted | 49,750 | 46.34 | 39,400 | 46.97 | 51,864 | 42.22 | ||||||||||||||||
Forfeited | (2,044 | ) | 44.88 | (603 | ) | 35.91 | (2,823 | ) | 35.23 | |||||||||||||
Vested and released | (49,674 | ) | 29.22 | (57,239 | ) | 25.25 | (59,065 | ) | 22.61 | |||||||||||||
Ending non-vested balance | 136,802 | 45.02 | 138,770 | 38.92 | 157,212 | 31.94 | ||||||||||||||||
Summarized activity for performance share awards | The table reflects the base number of units; actual awards that vest depends upon the extent to which performance objectives are achieved. Grant date fair values are based on the market value of a ProAssurance common share on the date of grant. | |||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||
Base Units | Weighted | Base Units | Weighted | Base Units | Weighted | |||||||||||||||||
Average | Average | Average | ||||||||||||||||||||
Grant Date | Grant Date | Grant Date | ||||||||||||||||||||
Fair Value | Fair Value | Fair Value | ||||||||||||||||||||
Beginning non-vested balance | 486,680 | $ | 39.86 | 552,417 | $ | 33.21 | 522,599 | $ | 26.36 | |||||||||||||
Granted | 160,900 | 46.34 | 145,580 | 46.97 | 212,205 | 42.22 | ||||||||||||||||
Forfeited | (14,221 | ) | 45.3 | (17,043 | ) | 38.9 | (20,492 | ) | 31.44 | |||||||||||||
Vested and released | (166,499 | ) | 31.33 | (194,274 | ) | 26.39 | (161,895 | ) | 23.13 | |||||||||||||
Ending non-vested balance | 466,860 | 44.97 | 486,680 | 39.86 | 552,417 | 33.21 | ||||||||||||||||
Market value of ProAssurance common share on the grant date fair value | Purchase match unit activity during 2014, 2013 and 2012 is summarized below. Grant date fair values are based on the market value of a ProAssurance common share on the date of grant. | |||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||
Units | Weighted | Units | Weighted | Units | Weighted | |||||||||||||||||
Average | Average | Average | ||||||||||||||||||||
Grant Date | Grant Date | Grant Date | ||||||||||||||||||||
Fair Value | Fair Value | Fair Value | ||||||||||||||||||||
Beginning non-vested balance | 63,125 | $ | 41.34 | 40,985 | $ | 39.85 | 18,900 | $ | 36.2 | |||||||||||||
Granted | 29,069 | 44.55 | 25,151 | 43.57 | 23,799 | 42.59 | ||||||||||||||||
Forfeited | (2,968 | ) | 43.14 | (2,456 | ) | 40.71 | (1,610 | ) | 37.72 | |||||||||||||
Vested and released | (17,125 | ) | 36.61 | (555 | ) | 36.33 | (104 | ) | 36.2 | |||||||||||||
Ending non-vested balance | 72,101 | 43.69 | 63,125 | 41.34 | 40,985 | 39.85 | ||||||||||||||||
Segment_Information_Tables
Segment Information (Tables) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | Financial data by segment for the years December 31, 2014, 2013 and 2012 were as follows: | |||||||||||||||||||||||
Year Ended December 31, 2014 | ||||||||||||||||||||||||
(In thousands) | Specialty P&C | Workers' Compensation | Lloyd's Syndicate | Corporate | Inter-segment Eliminations | Consolidated | ||||||||||||||||||
Net premiums earned | $ | 492,733 | $ | 194,540 | $ | 12,458 | $ | — | $ | — | $ | 699,731 | ||||||||||||
Net investment income | — | — | 410 | 125,147 | — | 125,557 | ||||||||||||||||||
Equity in earnings (loss) of unconsolidated subsidiaries | — | — | — | 3,986 | — | 3,986 | ||||||||||||||||||
Net realized gains (losses) | — | — | 4 | 14,650 | — | 14,654 | ||||||||||||||||||
Other income | 5,823 | 645 | 126 | 2,285 | (481 | ) | 8,398 | |||||||||||||||||
Net losses and loss adjustment expenses | (228,199 | ) | (126,447 | ) | (8,438 | ) | — | — | (363,084 | ) | ||||||||||||||
Underwriting, policy acquisition and operating expenses | (133,132 | ) | (60,357 | ) | (9,535 | ) | (8,768 | ) | 481 | (211,311 | ) | |||||||||||||
Segregated portfolio cells dividend expense | — | (1,842 | ) | — | — | — | (1,842 | ) | ||||||||||||||||
Interest expense | — | — | — | (14,084 | ) | — | (14,084 | ) | ||||||||||||||||
Income tax benefit (expense) | — | — | — | (65,440 | ) | — | (65,440 | ) | ||||||||||||||||
Segment operating results | $ | 137,225 | $ | 6,539 | $ | (4,975 | ) | $ | 57,776 | $ | — | $ | 196,565 | |||||||||||
Significant non-cash items | ||||||||||||||||||||||||
Depreciation and amortization | $ | 8,945 | $ | 5,828 | $ | 477 | $ | 35,073 | $ | — | $ | 50,323 | ||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||||||
(In thousands) | Specialty P&C | Workers' Compensation | Lloyd's Syndicate | Corporate | Inter-segment Eliminations | Consolidated | ||||||||||||||||||
Net premiums earned | $ | 527,919 | $ | — | $ | — | $ | — | $ | — | $ | 527,919 | ||||||||||||
Net investment income | — | — | — | 129,265 | — | 129,265 | ||||||||||||||||||
Equity in earnings (loss) of unconsolidated subsidiaries | — | — | — | 7,539 | — | 7,539 | ||||||||||||||||||
Net realized gains (losses) | — | — | — | 67,904 | — | 67,904 | ||||||||||||||||||
Other income | 5,648 | — | — | 1,910 | (7 | ) | 7,551 | |||||||||||||||||
Gain on acquisition | — | — | — | 32,314 | — | 32,314 | ||||||||||||||||||
Net losses and loss adjustment expenses | (224,761 | ) | — | — | — | — | (224,761 | ) | ||||||||||||||||
Underwriting, policy acquisition and operating expenses | (132,076 | ) | — | — | (15,748 | ) | 7 | (147,817 | ) | |||||||||||||||
Interest expense | — | — | — | (2,755 | ) | — | (2,755 | ) | ||||||||||||||||
Income tax benefit (expense) | — | — | — | (99,636 | ) | — | (99,636 | ) | ||||||||||||||||
Segment operating results | $ | 176,730 | $ | — | $ | — | $ | 120,793 | $ | — | $ | 297,523 | ||||||||||||
Significant non-cash items | ||||||||||||||||||||||||
Depreciation and amortization | $ | 7,199 | $ | — | $ | — | $ | 38,768 | $ | — | $ | 45,967 | ||||||||||||
Year Ended December 31, 2012 | ||||||||||||||||||||||||
(In thousands) | Specialty P&C | Workers' Compensation | Lloyd's Syndicate | Corporate | Inter-segment Eliminations | Consolidated | ||||||||||||||||||
Net premiums earned | $ | 550,664 | $ | — | $ | — | $ | — | $ | — | $ | 550,664 | ||||||||||||
Net investment income | — | — | — | 136,094 | — | 136,094 | ||||||||||||||||||
Equity in earnings (loss) of unconsolidated subsidiaries | — | — | — | (6,873 | ) | — | (6,873 | ) | ||||||||||||||||
Net realized gains (losses) | — | — | 28,863 | — | 28,863 | |||||||||||||||||||
Other income | 5,331 | — | — | 1,825 | (50 | ) | 7,106 | |||||||||||||||||
Gain on acquisition | — | — | — | — | — | — | ||||||||||||||||||
Net losses and loss adjustment expenses | (179,913 | ) | — | — | — | — | (179,913 | ) | ||||||||||||||||
Underwriting, policy acquisition and operating expenses | (125,292 | ) | — | — | (10,389 | ) | 50 | (135,631 | ) | |||||||||||||||
Interest expense | — | — | — | (2,181 | ) | — | (2,181 | ) | ||||||||||||||||
Loss on extinguishment of debt | — | — | — | (2,163 | ) | — | (2,163 | ) | ||||||||||||||||
Income tax benefit (expense) | — | (120,496 | ) | (120,496 | ) | |||||||||||||||||||
Segment operating results | $ | 250,790 | $ | — | $ | — | $ | 24,680 | $ | — | $ | 275,470 | ||||||||||||
Significant non-cash items | ||||||||||||||||||||||||
Depreciation and amortization | $ | 7,355 | $ | — | $ | — | $ | 30,218 | $ | — | $ | 37,573 | ||||||||||||
Revenue from External Customers by Products and Services | The following table provides detailed information regarding gross premiums earned by major category within each segment as well as a reconciliation to net premiums earned. All gross premiums earned are from external customers except as noted. ProAssurance's insured risks are primarily within the United States. | |||||||||||||||||||||||
Year Ended December 31 | ||||||||||||||||||||||||
(In thousands) | 2014 | 2013 | 2012 | |||||||||||||||||||||
Specialty P&C Segment | ||||||||||||||||||||||||
Gross premiums earned: | ||||||||||||||||||||||||
Healthcare professional liability | $ | 477,031 | $ | 507,222 | $ | 539,729 | ||||||||||||||||||
Legal professional liability | 28,278 | 27,162 | 17,042 | |||||||||||||||||||||
Medical technology and life sciences products liability | 35,913 | 33,242 | — | |||||||||||||||||||||
Other | 1,830 | 1,807 | 1,545 | |||||||||||||||||||||
Ceded premiums earned* | (50,319 | ) | (41,514 | ) | (7,652 | ) | ||||||||||||||||||
Segment net premiums earned | $ | 492,733 | $ | 527,919 | $ | 550,664 | ||||||||||||||||||
Workers' Compensation Segment | ||||||||||||||||||||||||
Gross premiums earned: | ||||||||||||||||||||||||
Traditional business | $ | 160,717 | $ | — | $ | — | ||||||||||||||||||
Alternative market business | 55,616 | — | — | |||||||||||||||||||||
Ceded premiums earned | (21,793 | ) | — | — | ||||||||||||||||||||
Segment net premiums earned | $ | 194,540 | $ | — | $ | — | ||||||||||||||||||
Lloyd's Syndicate Segment | ||||||||||||||||||||||||
Gross premiums earned: | ||||||||||||||||||||||||
Property and casualty* | $ | 13,429 | $ | — | $ | — | ||||||||||||||||||
Ceded premiums earned | (971 | ) | — | — | ||||||||||||||||||||
Segment net premiums earned | $ | 12,458 | $ | — | $ | — | ||||||||||||||||||
Consolidated net premiums earned | $ | 699,731 | $ | 527,919 | $ | 550,664 | ||||||||||||||||||
* Includes premium ceded from the Specialty P&C Segment to the Lloyd's Syndicate Segment of $4.2 million for year ended December 31, 2014. |
Statutory_Accounting_and_Divid1
Statutory Accounting and Dividend Restrictions (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Statutory Accounting And Dividend Restrictions [Abstract] | |||||||||
Consolidated net income | Net earnings and capital and surplus of ProAssurance’s insurance subsidiaries on a statutory basis are shown in the following table. | ||||||||
(In millions) | |||||||||
Statutory Net Earnings | Statutory Capital and Surplus | ||||||||
2014 | 2013 | 2012 | 2014 | 2013 | |||||
$246 | $256 | $312 | $1,681 | $1,642 |
Quarterly_Results_of_Operation1
Quarterly Results of Operations (Unaudited) (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Quarterly Financial Data [Abstract] | |||||||||||||||||
Summary of unaudited quarterly results of operations | The following is a summary of unaudited quarterly results of operations for 2014 and 2013: | ||||||||||||||||
2014 | |||||||||||||||||
(In thousands, except per share data) | 1st | 2nd | 3rd | 4th | |||||||||||||
Net premiums earned | $ | 171,730 | $ | 176,303 | $ | 177,028 | $ | 174,670 | |||||||||
Net losses and loss adjustment expenses: | |||||||||||||||||
Current year | 137,647 | 141,126 | 142,124 | 124,271 | |||||||||||||
Prior year | (48,139 | ) | (42,213 | ) | (42,902 | ) | (48,830 | ) | |||||||||
Net income | 46,731 | 49,942 | 34,778 | 65,114 | |||||||||||||
Basic earnings per share* | 0.76 | 0.84 | 0.59 | 1.13 | |||||||||||||
Diluted earnings per share* | 0.76 | 0.84 | 0.59 | 1.12 | |||||||||||||
2013 | |||||||||||||||||
(In thousands, except per share data) | 1st | 2nd | 3rd | 4th | |||||||||||||
Net premiums earned | $ | 134,578 | $ | 130,352 | $ | 133,598 | $ | 129,392 | |||||||||
Net losses and loss adjustment expenses: | |||||||||||||||||
Current year | 110,726 | 109,109 | 110,987 | 116,689 | |||||||||||||
Prior year | (53,100 | ) | (38,500 | ) | (49,350 | ) | (81,799 | ) | |||||||||
Net income | 112,850 | 50,451 | 63,357 | 70,864 | |||||||||||||
Basic earnings per share* | 1.83 | 0.82 | 1.02 | 1.15 | |||||||||||||
Diluted earnings per share* | 1.82 | 0.81 | 1.02 | 1.14 | |||||||||||||
* | Quarterly and year-to-date computations of per share amounts are made independently; therefore, the sum of per share amounts for the quarters may not equal per share amounts for the respective year-to-date periods. |
Accounting_Policies_Details
Accounting Policies (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Summary of allowances for credit losses related to premium and agency receivables | ||
Allowance acquired from acquisition | $225 | $0 |
Premium Receivables [Member] | ||
Summary of allowances for credit losses related to premium and agency receivables | ||
Allowance for credit losses, Beginning balance | 990 | 1,000 |
Estimated credit losses | 299 | 236 |
Account write offs, net of recoveries | -299 | -246 |
Allowance for credit losses, Ending balance | 1,215 | 990 |
Agency Receivables [Member] | ||
Summary of allowances for credit losses related to premium and agency receivables | ||
Allowance for credit losses, Beginning balance | 50 | 286 |
Estimated credit losses | 0 | 0 |
Account write offs, net of recoveries | 0 | -236 |
Allowance for credit losses, Ending balance | $50 | $50 |
Accounting_Policies_Details_1
Accounting Policies (Details 1) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accounting Policies [Abstract] | |||
Carrying value of indefinite lived intangible assets | $25.80 | $16.80 | |
Carrying value of finite-lived intangible assets | 96.2 | 51.7 | |
Total Intangible Assets | 122 | 68.5 | |
Accumulated amortization of intangible assets | 21.2 | 16.5 | |
Amortization expense for intangible assets | $10.30 | $5.30 | $4.50 |
Accounting_Policies_Accounting
Accounting Policies Accounting Policies (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accounting Policies [Abstract] | |||
Unpaid dividends | $167,744,000 | $18,532,000 | $0 |
Segregated portfolio cell (SPC) dividends payable | 15,800,000 | 0 | |
All other | 137,400,000 | 124,600,000 | |
Total other liabilities | $320,853,000 | $143,079,000 |
Accounting_Policies_Details_Te
Accounting Policies (Details Textual) (USD $) | 0 Months Ended | 12 Months Ended | ||
Dec. 27, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Segment | ||||
Accounting Policies [Abstract] | ||||
Number of reportable segments | 4 | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Stock split, conversion ratio | 2 | |||
Insurance policy duration | 1 year | |||
Earned But unbilled premiums | $3,400,000 | |||
Percentage of tax benefit | 50.00% | |||
Property, Plant and Equipment [Line Items] | ||||
Depreciation | 6,956,000 | 4,538,000 | 4,741,000 | |
Estimated aggregate amortization of intangible assets for 2015 | 8,300,000 | |||
Estimated aggregate amortization of intangible assets for 2016 | 8,000,000 | |||
Estimated aggregate amortization of intangible assets for 2017 | 5,600,000 | |||
Estimated aggregate amortization of intangible assets for 2018 | 5,600,000 | |||
Estimated aggregate amortization of intangible assets for 2019 | 5,600,000 | |||
Third party conversion agent asset | 205,000,000 | |||
Building and Building Improvements [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Real estate accumulated depreciation | 23,000,000 | 21,600,000 | ||
Depreciation | 1,500,000 | 1,500,000 | 1,400,000 | |
Reclassifications [Member] | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Unearned ceding commission | 800,000 | |||
Ceding commission income | $5,900,000 | $2,100,000 |
Business_Combinations_Details
Business Combinations (Details) (USD $) | 12 Months Ended | 0 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 01, 2014 | Jan. 01, 2013 |
Business Acquisition [Line Items] | |||||
Goodwill | $210,725 | $161,115 | |||
Gain on acquisition | 0 | -32,314 | 0 | ||
Eastern Insurance Holdings [Member] | |||||
Business Acquisition [Line Items] | |||||
Fixed maturities, available for sale | 107,131 | ||||
Equity securities, trading | 65,945 | ||||
Cash and short-term investments | 58,944 | ||||
Other investments | 42,133 | ||||
Premiums receivable, net | 71,989 | ||||
Receivable from reinsurers on paid and unpaid losses and LAE | 18,942 | ||||
Intangible assets | 59,000 | ||||
Deferred policy acquisition costs (see discussion below) | 10,593 | ||||
Other assets | 19,225 | ||||
Reserve for losses and loss adjustment expenses | -153,191 | ||||
Unearned premiums | -80,268 | ||||
Ceded balances payable | -9,507 | ||||
Segregated portfolio cells dividends payable | -14,430 | ||||
Deferred tax liabilities, net | -12,835 | ||||
Other liabilities | -28,038 | ||||
Fair value of net assets acquired | 155,633 | ||||
Goodwill | 49,610 | ||||
Gain on acquisition | 0 | ||||
Total purchase consideration | 205,243 | 205,000 | |||
Medmarc [Member] | |||||
Business Acquisition [Line Items] | |||||
Fixed maturities, available for sale | 269,529 | ||||
Equity securities, trading | 30,976 | ||||
Cash and short-term investments | 24,008 | ||||
Other investments | 5,340 | ||||
Premiums receivable, net | 2,986 | ||||
Receivable from reinsurers on paid and unpaid losses and LAE | 73,107 | ||||
Intangible assets | 3,630 | ||||
Deferred policy acquisition costs (see discussion below) | 0 | ||||
Other assets | 14,614 | ||||
Reserve for losses and loss adjustment expenses | -201,072 | ||||
Unearned premiums | -16,937 | ||||
Ceded balances payable | 0 | ||||
Segregated portfolio cells dividends payable | 0 | ||||
Deferred tax liabilities, net | -4,934 | ||||
Other liabilities | -15,233 | ||||
Fair value of net assets acquired | 186,014 | ||||
Goodwill | 0 | ||||
Gain on acquisition | -32,314 | ||||
Total purchase consideration | $153,700 | $153,700 |
Business_Combinations_Details_
Business Combinations (Details 1) (USD $) | 0 Months Ended | |||
In Millions, unless otherwise specified | Jan. 01, 2014 | Jan. 01, 2013 | ||
Eastern Insurance Holdings [Member] | ||||
Business Acquisition [Line Items] | ||||
Estimated Fair Value on Acquisition Date | $50 | |||
Estimated Useful Life, Finite Lived Assets | 13 years | [1] | ||
Medmarc [Member] | ||||
Business Acquisition [Line Items] | ||||
Estimated Fair Value on Acquisition Date | 1.1 | |||
Estimated Useful Life, Finite Lived Assets | 2 years | [1] | ||
Agency relationships [Member] | Eastern Insurance Holdings [Member] | ||||
Business Acquisition [Line Items] | ||||
Estimated Fair Value on Acquisition Date | 27 | |||
Estimated Useful Life | 15 years | |||
Agency relationships [Member] | Medmarc [Member] | ||||
Business Acquisition [Line Items] | ||||
Estimated Fair Value on Acquisition Date | 0 | |||
Policyholder relationships [Member] | Eastern Insurance Holdings [Member] | ||||
Business Acquisition [Line Items] | ||||
Estimated Fair Value on Acquisition Date | 8 | |||
Estimated Useful Life | 15 years | |||
Policyholder relationships [Member] | Medmarc [Member] | ||||
Business Acquisition [Line Items] | ||||
Estimated Fair Value on Acquisition Date | 0 | |||
Trade names [Member] | Eastern Insurance Holdings [Member] | ||||
Business Acquisition [Line Items] | ||||
Estimated Fair Value on Acquisition Date | 8 | |||
Estimated Useful Life | 15 years | |||
Trade names [Member] | Medmarc [Member] | ||||
Business Acquisition [Line Items] | ||||
Estimated Fair Value on Acquisition Date | 0 | |||
Non-compete agreements [Member] | Eastern Insurance Holdings [Member] | ||||
Business Acquisition [Line Items] | ||||
Estimated Fair Value on Acquisition Date | 7 | |||
Estimated Useful Life | 3 years | |||
Non-compete agreements [Member] | Medmarc [Member] | ||||
Business Acquisition [Line Items] | ||||
Estimated Fair Value on Acquisition Date | 1.1 | |||
Estimated Useful Life | 2 years | [2] | ||
Insurance License Agreements [Member] | Eastern Insurance Holdings [Member] | ||||
Business Acquisition [Line Items] | ||||
Estimated Fair Value on Acquisition Date, Finite Lived Assets | 9 | |||
Insurance License Agreements [Member] | Medmarc [Member] | ||||
Business Acquisition [Line Items] | ||||
Estimated Fair Value on Acquisition Date, Finite Lived Assets | $2.50 | |||
[1] | Reflects the weighted average estimated useful life of acquired intangible assets that are subject to amortization. | |||
[2] | Medmarc non-compete agreements were fully amortized as of December 31, 2014. |
Business_Combinations_Details_1
Business Combinations (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||
Business Acquisition [Line Items] | ||||||||||||
ProAssurance Pro Forma Consolidated Results | $852,326,000 | $926,873,000 | $757,240,000 | |||||||||
ProAssurance Pro Forma Consolidated Net Income | 852,326,000 | 740,178,000 | 715,854,000 | |||||||||
Business Acquisition, Pro Forma Net Income (Loss) | 197,533,000 | 263,446,000 | [1] | 317,097,000 | ||||||||
Net income | 65,114,000 | 34,778,000 | 49,942,000 | 46,731,000 | 70,864,000 | 63,357,000 | 50,451,000 | 112,850,000 | 196,565,000 | 297,523,000 | 275,470,000 | |
Eastern Insurance Holdings [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Adjustments related to pro forma revenue | 400,000 | [1] | ||||||||||
Medmarc [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Adjustments related to pro forma revenue | $33,700,000 | [1] | ||||||||||
[1] | Includes adjustments related to Eastern of $0.4 million and Medmarc of $33.7 million. |
Business_Combinations_Details_2
Business Combinations (Details Textual) (USD $) | 0 Months Ended | 12 Months Ended | |||
Jan. 01, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 01, 2013 | |
Business Acquisition [Line Items] | |||||
Goodwill | $210,725,000 | $161,115,000 | |||
Gain on acquisition | 0 | 32,314,000 | 0 | ||
Medmarc [Member] | |||||
Business Acquisition [Line Items] | |||||
Total purchase consideration | 153,700,000 | 153,700,000 | |||
Expenses related to the purchase of business | 2,600,000 | 1,000,000 | |||
Business acquisition, related premium credits to eligible policyholders | 7,500,000 | ||||
Goodwill | 0 | ||||
Gain on acquisition | 32,314,000 | ||||
Revenue of aquiree since acquisition date | 41,400,000 | 46,500,000 | |||
Earnings of acquiree since acquisition date | 8,100,000 | 15,700,000 | |||
Eastern Insurance Holdings [Member] | |||||
Business Acquisition [Line Items] | |||||
Voting interests acquired | 100.00% | ||||
Total purchase consideration | 205,000,000 | 205,243,000 | |||
Expenses related to the purchase of business | 2,200,000 | 900,000 | |||
Goodwill | 49,610,000 | ||||
Gain on acquisition | 0 | ||||
Risk premium used in fair value estimate of acquired reserves for losses and related reinsurance recoverables | 9,300,000 | ||||
Amortization period of fair value adjustment | 6 years | ||||
Profit margin used in fair value estimate of acquired reserves for losses and related reinsurance recoverables | 5.00% | ||||
Risk premium used in fair value estimate of acquired reserves for losses and related reinsurance recoverables | 5.00% | ||||
Revenue of aquiree since acquisition date | 202,200,000 | ||||
Earnings of acquiree since acquisition date | $9,100,000 |
Fair_Value_Measurement_Details
Fair Value Measurement (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Assets: | ||
Equity securities, trading, at fair value | $314,482 | $253,541 |
Level 3 [Member] | State and municipal bonds [Member] | ||
Financial instruments carried at fair value, classified as a part of: | ||
Total assets | 5,000 | 7,300 |
Level 3 [Member] | Other asset-backed securities [Member] | ||
Financial instruments carried at fair value, classified as a part of: | ||
Total assets | 4,800 | 6,800 |
Fair Value, Measurements, Recurring [Member] | ||
Financial instruments carried at fair value, classified as a part of: | ||
Investment in unconsolidated subsidiaries | 133,250 | 72,062 |
Other Investments Fair Value Disclosure | 28,958 | |
Total assets | 3,752,976 | 3,692,257 |
Fair Value, Measurements, Recurring [Member] | U.S. Treasury obligations [Member] | ||
Assets: | ||
Fair value of available for sale securities | 166,512 | 170,714 |
Fair Value, Measurements, Recurring [Member] | U.S. Government-sponsored enterprise obligations [Member] | ||
Assets: | ||
Fair value of available for sale securities | 39,563 | 32,768 |
Fair Value, Measurements, Recurring [Member] | State and municipal bonds [Member] | ||
Assets: | ||
Fair value of available for sale securities | 1,062,615 | 1,154,666 |
Fair Value, Measurements, Recurring [Member] | Corporate debt, multiple observable inputs [Member] | ||
Assets: | ||
Fair value of available for sale securities | 1,404,020 | 1,346,977 |
Fair Value, Measurements, Recurring [Member] | Other corporate debt, NRSRO ratings available [Member] | ||
Assets: | ||
Fair value of available for sale securities | 10,474 | 11,449 |
Fair Value, Measurements, Recurring [Member] | Other corporate debt, NRSRO ratings not available [Member] | ||
Assets: | ||
Fair value of available for sale securities | 2,607 | 2,727 |
Fair Value, Measurements, Recurring [Member] | Residential mortgage-backed securities [Member] | ||
Assets: | ||
Fair value of available for sale securities | 276,056 | 235,614 |
Fair Value, Measurements, Recurring [Member] | Agency commercial mortgage-backed securities [Member] | ||
Assets: | ||
Fair value of available for sale securities | 15,493 | 27,475 |
Fair Value, Measurements, Recurring [Member] | Other commercial mortgage-backed securities [Member] | ||
Assets: | ||
Fair value of available for sale securities | 51,063 | 61,390 |
Fair Value, Measurements, Recurring [Member] | Other asset-backed securities [Member] | ||
Assets: | ||
Fair value of available for sale securities | 116,624 | 74,269 |
Fair Value, Measurements, Recurring [Member] | Financial [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 79,341 | 81,536 |
Fair Value, Measurements, Recurring [Member] | Utilities/Energy [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 25,629 | 32,350 |
Fair Value, Measurements, Recurring [Member] | Consumer oriented [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 65,670 | 66,461 |
Fair Value, Measurements, Recurring [Member] | Industrial [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 55,460 | 57,262 |
Fair Value, Measurements, Recurring [Member] | Fixed Income Funds [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 55,196 | |
Fair Value, Measurements, Recurring [Member] | All other [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 33,186 | 15,932 |
Fair Value, Measurements, Recurring [Member] | Short-term Investments [Member] | ||
Assets: | ||
Short-term investments | 131,259 | 248,605 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | ||
Financial instruments carried at fair value, classified as a part of: | ||
Investment in unconsolidated subsidiaries | 0 | 0 |
Other Investments Fair Value Disclosure | 6,050 | |
Total assets | 451,731 | 502,146 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | U.S. Treasury obligations [Member] | ||
Assets: | ||
Fair value of available for sale securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | U.S. Government-sponsored enterprise obligations [Member] | ||
Assets: | ||
Fair value of available for sale securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | State and municipal bonds [Member] | ||
Assets: | ||
Fair value of available for sale securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Corporate debt, multiple observable inputs [Member] | ||
Assets: | ||
Fair value of available for sale securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Other corporate debt, NRSRO ratings available [Member] | ||
Assets: | ||
Fair value of available for sale securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Other corporate debt, NRSRO ratings not available [Member] | ||
Assets: | ||
Fair value of available for sale securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Residential mortgage-backed securities [Member] | ||
Assets: | ||
Fair value of available for sale securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Agency commercial mortgage-backed securities [Member] | ||
Assets: | ||
Fair value of available for sale securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Other commercial mortgage-backed securities [Member] | ||
Assets: | ||
Fair value of available for sale securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Other asset-backed securities [Member] | ||
Assets: | ||
Fair value of available for sale securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Financial [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 79,341 | 81,536 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Utilities/Energy [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 25,629 | 32,350 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Consumer oriented [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 65,670 | 66,461 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Industrial [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 55,460 | 57,262 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Fixed Income Funds [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 55,196 | |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | All other [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 33,186 | 15,932 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Short-term Investments [Member] | ||
Assets: | ||
Short-term investments | 131,199 | 248,605 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | ||
Financial instruments carried at fair value, classified as a part of: | ||
Investment in unconsolidated subsidiaries | 0 | 0 |
Other Investments Fair Value Disclosure | 22,908 | |
Total assets | 3,145,120 | 3,089,721 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | U.S. Treasury obligations [Member] | ||
Assets: | ||
Fair value of available for sale securities | 166,512 | 170,714 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | U.S. Government-sponsored enterprise obligations [Member] | ||
Assets: | ||
Fair value of available for sale securities | 39,563 | 32,768 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | State and municipal bonds [Member] | ||
Assets: | ||
Fair value of available for sale securities | 1,057,590 | 1,147,328 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Corporate debt, multiple observable inputs [Member] | ||
Assets: | ||
Fair value of available for sale securities | 1,404,020 | 1,346,977 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Other corporate debt, NRSRO ratings available [Member] | ||
Assets: | ||
Fair value of available for sale securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Other corporate debt, NRSRO ratings not available [Member] | ||
Assets: | ||
Fair value of available for sale securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Residential mortgage-backed securities [Member] | ||
Assets: | ||
Fair value of available for sale securities | 276,056 | 235,614 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Agency commercial mortgage-backed securities [Member] | ||
Assets: | ||
Fair value of available for sale securities | 15,493 | 27,475 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Other commercial mortgage-backed securities [Member] | ||
Assets: | ||
Fair value of available for sale securities | 51,063 | 61,390 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Other asset-backed securities [Member] | ||
Assets: | ||
Fair value of available for sale securities | 111,855 | 67,455 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Financial [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Utilities/Energy [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Consumer oriented [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Industrial [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Fixed Income Funds [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 0 | |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | All other [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Short-term Investments [Member] | ||
Assets: | ||
Short-term investments | 60 | |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | ||
Financial instruments carried at fair value, classified as a part of: | ||
Investment in unconsolidated subsidiaries | 133,250 | 72,062 |
Other Investments Fair Value Disclosure | 0 | |
Total assets | 156,125 | 100,390 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | U.S. Treasury obligations [Member] | ||
Assets: | ||
Fair value of available for sale securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | U.S. Government-sponsored enterprise obligations [Member] | ||
Assets: | ||
Fair value of available for sale securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | State and municipal bonds [Member] | ||
Assets: | ||
Fair value of available for sale securities | 5,025 | 7,338 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Corporate debt, multiple observable inputs [Member] | ||
Assets: | ||
Fair value of available for sale securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Other corporate debt, NRSRO ratings available [Member] | ||
Assets: | ||
Fair value of available for sale securities | 10,474 | 11,449 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Other corporate debt, NRSRO ratings not available [Member] | ||
Assets: | ||
Fair value of available for sale securities | 2,607 | 2,727 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Residential mortgage-backed securities [Member] | ||
Assets: | ||
Fair value of available for sale securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Agency commercial mortgage-backed securities [Member] | ||
Assets: | ||
Fair value of available for sale securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Other commercial mortgage-backed securities [Member] | ||
Assets: | ||
Fair value of available for sale securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Other asset-backed securities [Member] | ||
Assets: | ||
Fair value of available for sale securities | 4,769 | 6,814 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Financial [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Utilities/Energy [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Consumer oriented [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Industrial [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Fixed Income Funds [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 0 | |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | All other [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Short-term Investments [Member] | ||
Assets: | ||
Short-term investments | $0 |
Fair_Value_Measurement_Details1
Fair Value Measurement (Details 1) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
Secured debt fund [Member] | ||||
Investments in private funds [Abstract] | ||||
Investments in limited liability companies and limited partnerships unfunded commitments | $27,578,000 | [1] | ||
Investments in limited liability companies and limited partnerships fair value | 37,296,000 | [1] | 13,233,000 | [1] |
Private equity fund [Member] | ||||
Investments in private funds [Abstract] | ||||
Investments in limited liability companies and limited partnerships unfunded commitments | 0 | [2] | ||
Investments in limited liability companies and limited partnerships fair value | 6,747,000 | [2] | 6,574,000 | [2] |
Long/Short equity funds [Member] | ||||
Investments in private funds [Abstract] | ||||
Investments in limited liability companies and limited partnerships unfunded commitments | 0 | [3] | ||
Investments in limited liability companies and limited partnerships fair value | 25,301,000 | [3] | 28,385,000 | [3] |
Non-public equity funds [Member] | ||||
Investments in private funds [Abstract] | ||||
Investments in limited liability companies and limited partnerships unfunded commitments | 66,545,000 | [4] | ||
Investments in limited liability companies and limited partnerships fair value | 51,811,000 | [4] | 23,870,000 | [4] |
Multi-strategy fund of funds [Member] | ||||
Investments in private funds [Abstract] | ||||
Investments in limited liability companies and limited partnerships unfunded commitments | 0 | [5] | ||
Investments in limited liability companies and limited partnerships fair value | 8,271,000 | [5] | 0 | [5] |
Structured credit fund [Member] | ||||
Investments in private funds [Abstract] | ||||
Investments in limited liability companies and limited partnerships unfunded commitments | 0 | [6] | ||
Investments in limited liability companies and limited partnerships fair value | 3,824,000 | [6] | 0 | [6] |
Investment in unconsolidated subsidiaries [Member] | ||||
Investments in private funds [Abstract] | ||||
Investments in limited liability companies and limited partnerships fair value | $133,250,000 | $72,062,000 | ||
[1] | LP funds that are structured to provide interest distributions primarily through diversified portfolios of private debt instruments. One LP allows redemption by special consent; the other does not permit redemption. Income and capital are to be periodically distributed at the discretion of the LPs over an anticipated time frame that spans from 3 to 8 years. | |||
[2] | This fund is an LP that holds long equities of public international companies. Redemptions are allowed at the end of any calendar month with a prior notice requirement of 15 days and are paid within 10 days of the end of the calendar month of the redemption request. | |||
[3] | Comprised of interests in multiple unrelated LP funds. The funds hold primarily long and short North American equities, and target absolute returns using strategies designed to take advantage of event-driven market opportunities. The funds generally permit quarterly or semi-annual redemptions of the investors' existing capital balance with notice requirements of 30 to 90 days. For some funds, redemptions above specified thresholds (lowest threshold is 90%) may be only partially payable until after a fund audit is completed and are then payable within 30 days. | |||
[4] | Comprised of interests in three unrelated LP funds, each structured to provide capital appreciation through diversified investments in private equity, which can include investments in buyout, venture capital, mezzanine debt, distressed debt and other private equity-oriented LPs. One LP allows redemption by special consent; 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 9 years. | |||
[5] | This fund is an LLC structured to build and manage low volatility, multi-manager portfolios that have little or no correlation to the broader fixed income and equity security markets. Redemptions are not permitted but the LLC Board is permitted discretion to periodically extend offers to repurchase units of the LLC. | |||
[6] | This fund is an LP seeking to obtain superior risk-adjusted absolute returns by acquiring and actively managing a diversified portfolio of debt securities, including bonds, loans and other asset-backed instruments. Redemptions are allowed at any quarter-end with a prior notice requirement of 90 days. |
Fair_Value_Measurement_Details2
Fair Value Measurement (Details 2) (Fair Value, Inputs, Level 3 [Member], USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
State and municipal bonds [Member] | ||
Assets: | ||
Total assets | 5,000 | $7,300 |
State and municipal bonds [Member] | Market Approach Valuation Technique [Member] | Maximum [Member] | ||
Assets: | ||
Comparability Adjustment | 10.00% | |
State and municipal bonds [Member] | Market Approach Valuation Technique [Member] | Minimum [Member] | ||
Assets: | ||
Comparability Adjustment | 0.00% | |
State and municipal bonds [Member] | Market Approach Valuation Technique [Member] | Weighted Average [Member] | ||
Assets: | ||
Comparability Adjustment | 5.00% | |
State and municipal bonds [Member] | Income Approach Valuation Technique [Member] | Maximum [Member] | ||
Assets: | ||
Comparability Adjustment | 10.00% | |
State and municipal bonds [Member] | Income Approach Valuation Technique [Member] | Minimum [Member] | ||
Assets: | ||
Comparability Adjustment | 0.00% | |
State and municipal bonds [Member] | Income Approach Valuation Technique [Member] | Weighted Average [Member] | ||
Assets: | ||
Comparability Adjustment | 5.00% | |
Corporate debt with limited observable inputs [Member] | ||
Assets: | ||
Total assets | 13,100 | 14,200 |
Corporate debt with limited observable inputs [Member] | Market Approach Valuation Technique [Member] | Maximum [Member] | ||
Assets: | ||
Comparability Adjustment | 5.00% | |
Corporate debt with limited observable inputs [Member] | Market Approach Valuation Technique [Member] | Minimum [Member] | ||
Assets: | ||
Comparability Adjustment | 0.00% | |
Corporate debt with limited observable inputs [Member] | Market Approach Valuation Technique [Member] | Weighted Average [Member] | ||
Assets: | ||
Comparability Adjustment | 2.50% | |
Corporate debt with limited observable inputs [Member] | Income Approach Valuation Technique [Member] | Maximum [Member] | ||
Assets: | ||
Comparability Adjustment | 5.00% | |
Corporate debt with limited observable inputs [Member] | Income Approach Valuation Technique [Member] | Minimum [Member] | ||
Assets: | ||
Comparability Adjustment | 0.00% | |
Corporate debt with limited observable inputs [Member] | Income Approach Valuation Technique [Member] | Weighted Average [Member] | ||
Assets: | ||
Comparability Adjustment | 2.50% | |
Asset-backed Securities, Securitized Loans and Receivables [Member] | ||
Assets: | ||
Total assets | 4,800 | $6,800 |
Asset-backed Securities, Securitized Loans and Receivables [Member] | Market Approach Valuation Technique [Member] | Maximum [Member] | ||
Assets: | ||
Comparability Adjustment | 5.00% | |
Asset-backed Securities, Securitized Loans and Receivables [Member] | Market Approach Valuation Technique [Member] | Minimum [Member] | ||
Assets: | ||
Comparability Adjustment | 0.00% | |
Asset-backed Securities, Securitized Loans and Receivables [Member] | Market Approach Valuation Technique [Member] | Weighted Average [Member] | ||
Assets: | ||
Comparability Adjustment | 2.50% | |
Asset-backed Securities, Securitized Loans and Receivables [Member] | Income Approach Valuation Technique [Member] | Maximum [Member] | ||
Assets: | ||
Comparability Adjustment | 5.00% | |
Asset-backed Securities, Securitized Loans and Receivables [Member] | Income Approach Valuation Technique [Member] | Minimum [Member] | ||
Assets: | ||
Comparability Adjustment | 0.00% | |
Asset-backed Securities, Securitized Loans and Receivables [Member] | Income Approach Valuation Technique [Member] | Weighted Average [Member] | ||
Assets: | ||
Comparability Adjustment | 2.50% |
Fair_Value_Measurement_Details3
Fair Value Measurement (Details 3) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation: | ||
Beginning Balance | $100,390 | $60,140 |
Included in earnings, as a part of: | ||
Included in other comprehensive income | 719 | -785 |
Purchases | 64,541 | 35,393 |
Sales | -9,308 | -18,385 |
Transfers in | 2,424 | 29,737 |
Transfers out | -13,138 | -12,354 |
Ending Balance | 156,125 | 100,390 |
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end | 10,538 | 6,877 |
U.S. Government-sponsored enterprise obligations [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation: | ||
Beginning Balance | 0 | 0 |
Included in earnings, as a part of: | ||
Included in other comprehensive income | 1 | 0 |
Purchases | 1,000 | 0 |
Sales | 0 | 0 |
Transfers in | 0 | 0 |
Transfers out | -1,001 | 0 |
Ending Balance | 0 | |
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end | 0 | 0 |
State and municipal bonds [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation: | ||
Beginning Balance | 7,338 | 7,175 |
Included in earnings, as a part of: | ||
Included in other comprehensive income | -29 | 1 |
Purchases | 1,861 | 0 |
Sales | -1,731 | -2,106 |
Transfers in | 2,119 | 2,312 |
Transfers out | -4,424 | 0 |
Ending Balance | 5,025 | 7,338 |
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end | 0 | 0 |
Corporate debt [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation: | ||
Beginning Balance | 14,176 | 15,191 |
Included in earnings, as a part of: | ||
Included in other comprehensive income | 688 | -725 |
Purchases | 2,000 | 9,470 |
Sales | -1,826 | -1,629 |
Transfers in | 0 | 2,114 |
Transfers out | -2,025 | -10,073 |
Ending Balance | 13,081 | 14,176 |
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end | 0 | 0 |
Asset-backed securities [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation: | ||
Beginning Balance | 6,814 | 4,035 |
Included in earnings, as a part of: | ||
Included in other comprehensive income | 59 | -61 |
Purchases | 3,340 | 1,356 |
Sales | -61 | -18 |
Transfers in | 305 | 3,800 |
Transfers out | -5,688 | -2,281 |
Ending Balance | 4,769 | 6,814 |
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end | 0 | 0 |
Investment in unconsolidated subsidiaries [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation: | ||
Beginning Balance | 72,062 | 33,739 |
Included in earnings, as a part of: | ||
Included in other comprehensive income | 0 | 0 |
Purchases | 56,340 | 24,567 |
Sales | -5,690 | -14,632 |
Transfers in | 0 | 21,511 |
Transfers out | 0 | 0 |
Ending Balance | 133,250 | 72,062 |
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end | 10,538 | 6,877 |
Other Investments [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation: | ||
Beginning Balance | 0 | |
Included in earnings, as a part of: | ||
Included in other comprehensive income | 0 | |
Purchases | 0 | |
Sales | 0 | |
Transfers in | 0 | |
Transfers out | 0 | |
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end | 0 | |
Net investment income [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | 51 | -120 |
Net investment income [Member] | U.S. Government-sponsored enterprise obligations [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | 0 | 0 |
Net investment income [Member] | State and municipal bonds [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | -14 | 0 |
Net investment income [Member] | Corporate debt [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | 65 | -103 |
Net investment income [Member] | Asset-backed securities [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | 0 | -17 |
Net investment income [Member] | Investment in unconsolidated subsidiaries [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | 0 | 0 |
Net investment income [Member] | Other Investments [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | 0 | |
Equity in earnings of unconsolidated subsidiaries [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | 10,538 | 6,877 |
Equity in earnings of unconsolidated subsidiaries [Member] | U.S. Government-sponsored enterprise obligations [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | 0 | 0 |
Equity in earnings of unconsolidated subsidiaries [Member] | State and municipal bonds [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | 0 | 0 |
Equity in earnings of unconsolidated subsidiaries [Member] | Corporate debt [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | 0 | 0 |
Equity in earnings of unconsolidated subsidiaries [Member] | Asset-backed securities [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | 0 | 0 |
Equity in earnings of unconsolidated subsidiaries [Member] | Investment in unconsolidated subsidiaries [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | 10,538 | 6,877 |
Equity in earnings of unconsolidated subsidiaries [Member] | Other Investments [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | 0 | |
Gain (Loss) on Investments [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | -92 | -113 |
Gain (Loss) on Investments [Member] | U.S. Government-sponsored enterprise obligations [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | 0 | 0 |
Gain (Loss) on Investments [Member] | State and municipal bonds [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | -95 | -44 |
Gain (Loss) on Investments [Member] | Corporate debt [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | 3 | -69 |
Gain (Loss) on Investments [Member] | Asset-backed securities [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | 0 | 0 |
Gain (Loss) on Investments [Member] | Investment in unconsolidated subsidiaries [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | 0 | 0 |
Gain (Loss) on Investments [Member] | Other Investments [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | $0 |
Fair_Value_Measurement_Details4
Fair Value Measurement (Details 4) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Financial assets: | ||
BOLI | $56,381 | $54,374 |
Other investments | 86,057 | 52,240 |
Other assets | 93,263 | 329,979 |
Financial liabilities: | ||
Notes payable, fair value disclosure | 250,000 | 250,000 |
Total other liabilities | 320,853 | 143,079 |
Not Measured At Fair Value [Member] | Carrying Value [Member] | ||
Financial assets: | ||
BOLI | 56,381 | 54,374 |
Other investments | 57,099 | 52,240 |
Other assets | 22,440 | 17,940 |
Financial liabilities: | ||
Total other liabilities | 14,656 | 13,303 |
Not Measured At Fair Value [Member] | Carrying Value [Member] | Senior notes due 2023 [Member] | ||
Financial liabilities: | ||
Notes payable, fair value disclosure | 250,000 | 250,000 |
Not Measured At Fair Value [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value [Member] | ||
Financial assets: | ||
BOLI | 56,381 | 54,374 |
Other investments | 57,994 | 51,833 |
Other assets | 22,399 | 17,940 |
Financial liabilities: | ||
Total other liabilities | 14,645 | 13,303 |
Not Measured At Fair Value [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value [Member] | Senior notes due 2023 [Member] | ||
Financial liabilities: | ||
Notes payable, fair value disclosure | $276,503 | $262,500 |
Fair_Value_Measurement_Details5
Fair Value Measurement (Details Textuals) (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Private equity fund [Member] | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |
Entities that calculate net asset value notice period | 15 days |
Non-public equity funds [Member] | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |
Anticipated time frame for distribution at the discretion of the LP | 9 years |
Structured credit fund [Member] | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |
Entities that calculate net asset value notice period | 90 days |
Minimum [Member] | Secured debt fund [Member] | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |
Anticipated time frame for distribution at the discretion of the LP | 3 years |
Minimum [Member] | Long/Short equity funds [Member] | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |
Entities that calculate net asset value notice period | 30 days |
Redemption Percentage of LP at NAV for which initial payment is limited | 90.00% |
Maximum [Member] | Secured debt fund [Member] | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |
Anticipated time frame for distribution at the discretion of the LP | 8 years |
Maximum [Member] | Private equity fund [Member] | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |
Payment period for redemption of LP valued at NAV | 10 days |
Maximum [Member] | Long/Short equity funds [Member] | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |
Payment period for redemption of LP valued at NAV | 30 days |
Entities that calculate net asset value notice period | 90 days |
Fair_Value_Measurement_Details6
Fair Value Measurement (Details Textuals 1) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Transfers between Level 1 to Level 2 | $0 | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value | 156,125,000 | 100,390,000 | 60,140,000 |
Included in other comprehensive income | 719,000 | -785,000 | |
Purchases | 64,541,000 | 35,393,000 | |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Sales | 9,308,000 | 18,385,000 | |
Transfers in | 2,424,000 | 29,737,000 | |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers out of Level 3 | 13,138,000 | 12,354,000 | |
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end | 10,538,000 | 6,877,000 | |
Carrying Value | 276,501,000 | 214,236,000 | |
Other Investments [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value | 0 | ||
Included in other comprehensive income | 0 | ||
Purchases | 0 | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Sales | 0 | ||
Transfers in | 0 | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers out of Level 3 | 0 | ||
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end | 0 | ||
Short-term Investments [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Transfers between Level 2 to Level 1 | $7,200,000 |
Investments_Details
Investments (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
U.S. Treasury obligations [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | $163,714 | $166,115 |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 3,785 | 6,118 |
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 987 | 1,519 |
Total Fair Value | 166,512 | 170,714 |
U.S. Government-sponsored enterprise obligations [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 38,022 | 30,942 |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 1,641 | 2,251 |
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 100 | 425 |
Total Fair Value | 39,563 | 32,768 |
State and municipal bonds [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 1,015,555 | 1,116,060 |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 47,395 | 46,533 |
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 335 | 7,927 |
Total Fair Value | 1,062,615 | 1,154,666 |
Corporate debt [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 1,389,970 | 1,321,838 |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 44,234 | 53,059 |
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 17,103 | 13,744 |
Total Fair Value | 1,417,101 | 1,361,153 |
Residential mortgage-backed securities [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 266,306 | 230,861 |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 10,198 | 7,608 |
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 448 | 2,855 |
Total Fair Value | 276,056 | 235,614 |
Agency commercial mortgage-backed securities [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 15,344 | 27,268 |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 208 | 343 |
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 59 | 136 |
Total Fair Value | 15,493 | 27,475 |
Other commercial mortgage-backed securities [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 50,025 | 59,066 |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 1,137 | 2,491 |
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 99 | 167 |
Total Fair Value | 51,063 | 61,390 |
Other asset-backed securities [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 116,541 | 74,106 |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 288 | 487 |
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 205 | 324 |
Total Fair Value | 116,624 | 74,269 |
Debt Securities [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 3,055,477 | 3,026,256 |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 108,886 | 118,890 |
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 19,336 | 27,097 |
Total Fair Value | $3,145,027 | $3,118,049 |
Investments_Details_1
Investments (Details 1) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
U.S. Treasury obligations [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | $163,714 | $166,115 |
Due in one year or less | 9,584 | |
Due after one year through five years | 113,489 | |
Due after five years through ten years | 39,264 | |
Due after ten years | 4,175 | |
Total Fair Value | 166,512 | 170,714 |
U.S. Government-sponsored enterprise obligations [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 38,022 | 30,942 |
Due in one year or less | 3,641 | |
Due after one year through five years | 25,286 | |
Due after five years through ten years | 10,287 | |
Due after ten years | 349 | |
Total Fair Value | 39,563 | 32,768 |
State and municipal bonds [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 1,015,555 | 1,116,060 |
Due in one year or less | 44,334 | |
Due after one year through five years | 380,741 | |
Due after five years through ten years | 453,275 | |
Due after ten years | 184,265 | |
Total Fair Value | 1,062,615 | 1,154,666 |
Corporate debt [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 1,389,970 | 1,321,838 |
Due in one year or less | 115,301 | |
Due after one year through five years | 711,806 | |
Due after five years through ten years | 566,585 | |
Due after ten years | 23,409 | |
Total Fair Value | 1,417,101 | 1,361,153 |
Residential mortgage-backed securities [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 266,306 | 230,861 |
Total Fair Value | 276,056 | 235,614 |
Agency commercial mortgage-backed securities [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 15,344 | 27,268 |
Total Fair Value | 15,493 | 27,475 |
Other commercial mortgage-backed securities [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 50,025 | 59,066 |
Total Fair Value | 51,063 | 61,390 |
Other asset-backed securities [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 116,541 | 74,106 |
Total Fair Value | 116,624 | 74,269 |
Debt Securities [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 3,055,477 | 3,026,256 |
Total Fair Value | $3,145,027 | $3,118,049 |
Investments_Details_2
Investments (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Other Investments | ||
Other investments | $86,057 | $52,240 |
Investments in LPs/LLCs, at cost [Member] | ||
Other Investments | ||
Other investments | 53,258 | 47,258 |
Convertible Debt Securities [Member] | ||
Other Investments | ||
Other investments | 28,958 | 0 |
FHLB And Other Investments [Member] | ||
Other Investments | ||
Other investments | $3,841 | $4,982 |
Investments_Details_3
Investments (Details 3) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Unconsolidated Subsidiaries | ||
Carrying Value | $276,501,000 | $214,236,000 |
Tax credit partnerships [Member] | ||
Unconsolidated Subsidiaries | ||
Unfunded Commitments | 15,537,000 | |
Carrying Value | 133,143,000 | 142,174,000 |
Secured debt fund [Member] | ||
Unconsolidated Subsidiaries | ||
Unfunded Commitments | 27,578,000 | |
Carrying Value | 37,296,000 | 13,233,000 |
Secured debt fund [Member] | Maximum [Member] | ||
Unconsolidated Subsidiaries | ||
Percentage Ownership | 20.00% | |
Long equity fund [Member] | ||
Unconsolidated Subsidiaries | ||
Unfunded Commitments | 0 | |
Carrying Value | 6,747,000 | 6,574,000 |
Long equity fund [Member] | Maximum [Member] | ||
Unconsolidated Subsidiaries | ||
Percentage Ownership | 20.00% | |
Long/Short equity funds [Member] | ||
Unconsolidated Subsidiaries | ||
Unfunded Commitments | 0 | |
Carrying Value | 25,301,000 | 28,385,000 |
Long/Short equity funds [Member] | Maximum [Member] | ||
Unconsolidated Subsidiaries | ||
Percentage Ownership | 25.00% | |
Non-public equity funds [Member] | ||
Unconsolidated Subsidiaries | ||
Unfunded Commitments | 80,070,000 | |
Carrying Value | 58,128,000 | 23,870,000 |
Non-public equity funds [Member] | Maximum [Member] | ||
Unconsolidated Subsidiaries | ||
Percentage Ownership | 20.00% | |
Multi-strategy fund of funds [Member] | ||
Unconsolidated Subsidiaries | ||
Unfunded Commitments | 0 | |
Carrying Value | 8,271,000 | 0 |
Multi-strategy fund of funds [Member] | Maximum [Member] | ||
Unconsolidated Subsidiaries | ||
Percentage Ownership | 20.00% | |
Structured credit fund [Member] | ||
Unconsolidated Subsidiaries | ||
Unfunded Commitments | 0 | |
Carrying Value | 3,824,000 | 0 |
Structured credit fund [Member] | Maximum [Member] | ||
Unconsolidated Subsidiaries | ||
Percentage Ownership | 20.00% | |
Real estate fund [Member] | ||
Unconsolidated Subsidiaries | ||
Unfunded Commitments | 6,526,000 | |
Carrying Value | $3,791,000 | $0 |
Real estate fund [Member] | Maximum [Member] | ||
Unconsolidated Subsidiaries | ||
Percentage Ownership | 20.00% |
Investments_Details_4
Investments (Details 4) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Investments in LPs/LLCs [Member] | ||
Investments held in an unrealized loss position | ||
Fair Value | $23,683 | $14,752 |
Unrealized Loss | 3,948 | 1,059 |
Less than 12 months, Fair Value | 22,265 | 13,166 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 3,711 | 1,018 |
12 months or longer, Fair Value | 1,418 | 1,586 |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | 237 | 41 |
U.S. Treasury obligations [Member] | ||
Investments held in an unrealized loss position | ||
Fair Value | 61,209 | 47,668 |
Unrealized Loss | 987 | 1,519 |
Less than 12 months, Fair Value | 46,869 | 44,304 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 617 | 1,182 |
12 months or longer, Fair Value | 14,340 | 3,364 |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | 370 | 337 |
U.S. Government-sponsored enterprise obligations [Member] | ||
Investments held in an unrealized loss position | ||
Fair Value | 6,268 | 6,640 |
Unrealized Loss | 100 | 425 |
Less than 12 months, Fair Value | 2,775 | 5,752 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 44 | 321 |
12 months or longer, Fair Value | 3,493 | 888 |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | 56 | 104 |
State and municipal bonds [Member] | ||
Investments held in an unrealized loss position | ||
Fair Value | 39,831 | 203,970 |
Unrealized Loss | 335 | 7,927 |
Less than 12 months, Fair Value | 18,910 | 184,401 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 84 | 6,640 |
12 months or longer, Fair Value | 20,921 | 19,569 |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | 251 | 1,287 |
Corporate debt [Member] | ||
Investments held in an unrealized loss position | ||
Fair Value | 423,107 | 349,277 |
Unrealized Loss | 17,103 | 13,744 |
Less than 12 months, Fair Value | 326,804 | 324,510 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 13,236 | 12,061 |
12 months or longer, Fair Value | 96,303 | 24,767 |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | 3,867 | 1,683 |
Residential mortgage-backed securities [Member] | ||
Investments held in an unrealized loss position | ||
Fair Value | 45,006 | 93,608 |
Unrealized Loss | 448 | 2,855 |
Less than 12 months, Fair Value | 14,406 | 84,045 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 31 | 2,393 |
12 months or longer, Fair Value | 30,600 | 9,563 |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | 417 | 462 |
Agency commercial mortgage-backed securities [Member] | ||
Investments held in an unrealized loss position | ||
Fair Value | 4,783 | 11,658 |
Unrealized Loss | 59 | 136 |
Less than 12 months, Fair Value | 70 | 11,082 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 0 | 116 |
12 months or longer, Fair Value | 4,713 | 576 |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | 59 | 20 |
Other commercial mortgage-backed securities [Member] | ||
Investments held in an unrealized loss position | ||
Fair Value | 13,860 | 11,153 |
Unrealized Loss | 99 | 167 |
Less than 12 months, Fair Value | 7,005 | 10,215 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 28 | 159 |
12 months or longer, Fair Value | 6,855 | 938 |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | 71 | 8 |
Other asset-backed securities [Member] | ||
Investments held in an unrealized loss position | ||
Fair Value | 62,577 | 25,539 |
Unrealized Loss | 205 | 324 |
Less than 12 months, Fair Value | 59,176 | 21,804 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 109 | 77 |
12 months or longer, Fair Value | 3,401 | 3,735 |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | 96 | 247 |
Debt Securities [Member] | ||
Investments held in an unrealized loss position | ||
Fair Value | 656,641 | 749,513 |
Unrealized Loss | 19,336 | 27,097 |
Less than 12 months, Fair Value | 476,015 | 686,113 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 14,149 | 22,949 |
12 months or longer, Fair Value | 180,626 | 63,400 |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $5,187 | $4,148 |
Investments_Details_5
Investments (Details 5) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Net Investment Income | |||
Investment fees and expenses | ($7,994) | ($6,798) | ($6,609) |
Net investment income | 125,557 | 129,265 | 136,094 |
Debt Securities [Member] | |||
Net Investment Income | |||
Interest and Dividend Income, Operating | 111,895 | 122,065 | 133,088 |
Equities [Member] | |||
Net Investment Income | |||
Interest and Dividend Income, Operating | 10,817 | 9,454 | 6,947 |
Short-term Investments and Other Invested [Member] | |||
Net Investment Income | |||
Interest and Dividend Income, Operating | 8,833 | 2,584 | 660 |
Business owned life insurance [Member] | |||
Net Investment Income | |||
Interest and Dividend Income, Operating | $2,006 | $1,960 | $2,008 |
Investments_Details_6
Investments (Details 6) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Total other-than-temporary impairment losses: | |||
Other-than-temporary impairment (OTTI) losses | ($1,475) | ($71) | ($1,566) |
Portion of OTTI losses recognized in (reclassified from) other comprehensive income before taxes | -268 | 0 | 201 |
Net impairments recognized in earnings | -1,207 | -71 | -1,767 |
Gross realized gains, available-for-sale securities | 5,627 | 18,130 | 18,645 |
Gross realized (losses), available-for-sale securities | -1,103 | -7,031 | -2,076 |
Net realized gains (losses), trading securities | 28,018 | 20,444 | 1,485 |
Net realized gains (losses), Other investments | 326 | 0 | 0 |
Change in unrealized holding gains (losses), trading securities | -18,883 | 35,507 | 12,673 |
Change in unrealized holding gains (losses), convertible securities, carried at fair value | 1,876 | 0 | 0 |
Decrease (increase) in the fair value of liabilities carried at fair value | 0 | 0 | -1,245 |
Other | 0 | 925 | 1,148 |
Total net realized investment gains (losses) | 14,654 | 67,904 | 28,863 |
State and municipal bonds [Member] | |||
Total other-than-temporary impairment losses: | |||
Other-than-temporary impairment (OTTI) losses | -50 | -71 | 0 |
Residential mortgage-backed securities [Member] | |||
Total other-than-temporary impairment losses: | |||
Other-than-temporary impairment (OTTI) losses | 0 | 0 | -557 |
Corporate debt [Member] | |||
Total other-than-temporary impairment losses: | |||
Other-than-temporary impairment (OTTI) losses | -1,425 | 0 | -878 |
Portion of OTTI losses recognized in (reclassified from) other comprehensive income before taxes | 268 | 0 | -201 |
Other Investments [Member] | |||
Total other-than-temporary impairment losses: | |||
Other-than-temporary impairment (OTTI) losses | $0 | $0 | ($131) |
Investments_Details_7
Investments (Details 7) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cumulative credit losses recorded in earnings related to impaired debt securities | |||
Accumulated credit losses related to impaired debt securities, Beginning Balance | $83 | $3,301 | $5,870 |
No OTTI has been previously recognized | 149 | 0 | 0 |
OTTI has been previously recognized | 0 | 0 | 268 |
Securities sold during the period (realized) | 0 | -3,218 | -2,837 |
Accumulated credit losses related to impaired debt securities, Ending Balance | $232 | $83 | $3,301 |
Investments_Details_8
Investments (Details 8) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Information regarding sales and purchases of available-for-sale securities | |||
Proceeds from sales (exclusive of maturities and paydowns) | $244,900,000 | $593,300,000 | $500,200,000 |
Purchases | $645,114,000 | $519,161,000 | $646,198,000 |
Investments_Details_Textual
Investments (Details Textual) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Affiliate | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Number of investment affiliates exceeding shareholder's equity ten percent threshold limit | 0 | ||
Threshold limit of investments based on shareholders' equity | 10.00% | ||
Securities on deposit with state insurance departments | $49,300,000 | ||
Business owned life insurance cost | 33,000,000 | ||
Investment in unconsolidated subsidiaries | 276,501,000 | 214,236,000 | |
Effect of conversion to equity method, total | 10,500,000 | ||
Effect of conversion to equity method, prior years | 8,400,000 | ||
Amortization of operation losses, related to affordable housing tax project tax credits | 10,700,000 | 10,100,000 | 6,400,000 |
Tax Credit Partnerships Almost 100% Ownership [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Number of tax credit partnerships almost 100% ownership percentage | 2 | ||
Investment in unconsolidated subsidiaries | 58,000,000 | ||
Tax Credit Partnerships Less Than 20% Ownership [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Investment in unconsolidated subsidiaries | 75,100,000 | ||
Maximum [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Period for federal home loan bank stock liquidation process | 5 years | ||
Maximum [Member] | Tax Credit Partnerships Almost 100% Ownership [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Percentage Ownership | 100.00% | ||
Maximum [Member] | Tax Credit Partnerships Less Than 20% Ownership [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Percentage Ownership | 20.00% | ||
Debt Securities [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
FAL Deposit assets | 85,000,000 | ||
Short-term Investments [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
FAL Deposit assets | 200,000 | ||
Non Government-Backed [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Number of debt securities in unrealized loss position | 588 | 714 | |
Debt securities in unrealized loss position as percentage of total debt securities held | 20.50% | 26.30% | |
Number of issuers in unrealized loss position | 434 | 516 | |
Single greatest unrealized loss position | 1,700,000 | 400,000 | |
Second greatest unrealized loss position | $700,000 | $400,000 |
Reinsurance_Details
Reinsurance (Details) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Summary of the effect of reinsurance on premiums written and earned | ||||||
Direct premiums written | $761,043 | $566,745 | $536,318 | |||
Premiums earned | 755,623 | [1] | 568,629 | [1] | 558,200 | [1] |
Assumed premiums written | 18,566 | 802 | 113 | |||
Premiums assumed | 12,987 | [1] | 804 | [1] | 116 | [1] |
Ceded premiums written | -77,760 | -42,365 | -8,133 | |||
Premiums ceded | -68,879 | [1] | -41,514 | [1] | -7,652 | [1] |
Premiums written, net | 701,849 | 525,182 | 528,298 | |||
Net premiums earned | $699,731 | [1] | $527,919 | [1] | $550,664 | [1] |
[1] | All of ProAssurance’s premiums are related to property and liability coverages. |
Reinsurance_Details_Textual
Reinsurance (Details Textual) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
reinsurer | |||
Ceded Credit Risk [Line Items] | |||
Premium ceded reduction amount | $15,700,000 | $16,400,000 | $34,300,000 |
Amount due from reinsurers total | 259,100,000 | ||
Number of major reinsurers | 3 | ||
Allowance for reinsurance receivables | 0 | 0 | |
Loss on uncollectible accounts in the period | 0 | 0 | 0 |
Individual reinsurer balances as percentage of shareholder's equity, maximum | 5.00% | ||
Ceded Credit Risk, Secured [Member] | |||
Ceded Credit Risk [Line Items] | |||
Amount of reinsurance recoverables collateralized by letters of credit | 35,000,000 | ||
Major Reinsurers [Member] | |||
Ceded Credit Risk [Line Items] | |||
Amount due from reinsurers total | 66,900,000 | ||
Minimum [Member] | |||
Ceded Credit Risk [Line Items] | |||
Major reinsurer threshold | $20,000,000 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred tax assets | ||
Unpaid loss discount | $44,002 | $51,879 |
Unearned premium adjustment | 23,972 | 21,861 |
Compensation related | 18,623 | 18,172 |
Intangibles | 1,957 | 2,074 |
Total deferred tax assets | 88,554 | 93,986 |
Deferred tax liabilities | ||
Deferred acquisition costs | 9,180 | 10,150 |
Unrealized gains on investments, net | 31,342 | 32,127 |
Fixed assets | 3,689 | 4,166 |
Basis differentials–investments | 31,657 | 31,247 |
Intangibles | 27,294 | 13,238 |
Other | 4,210 | 1,301 |
Total deferred tax liabilities | 107,372 | 92,229 |
Net deferred tax assets (liabilities) | ($18,818) | $1,757 |
Income_Taxes_Details_1
Income Taxes (Details 1) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Reconciliation of unrecognized tax benefits | |||
Balance at January 1 | $4,823 | $4,823 | $18,585 |
Increase for tax position acquired as result of a business combination | 414 | 0 | 0 |
Increases for tax positions taken during the current year | 163 | 0 | 0 |
(Decreases) for tax positions taken during the current year | -4,823 | 0 | -10,206 |
(Decreases) for tax positions taken during prior years | 0 | 0 | -3,556 |
Balance at December 31 | $577 | $4,823 | $4,823 |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Reconciliation of expected income tax expense to actual income tax expense | |||
Computed “expected†tax expense | $91,702 | $139,005 | $138,588 |
Tax-exempt income | -13,250 | -14,509 | -14,374 |
Tax credits, qualified affordable housing | -17,918 | -17,888 | -10,005 |
Non-taxable gain on acquisition | 0 | -11,310 | 0 |
Non-U.S. Loss | 1,741 | 0 | 0 |
Other | 3,165 | 4,338 | 6,287 |
Total income tax expense (benefit) | $65,440 | $99,636 | $120,496 |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Income Tax Contingency [Line Items] | ||||
Capital loss carryforwards | $0 | |||
Amount of available net operating loss (NOL) carryforwards | 0 | |||
Expected refund from settlement with IRS | 30,600,000 | |||
Income taxes receivable | 1,100,000 | 27,300,000 | ||
Unrecognized tax benefits | 577,000 | 4,823,000 | 4,823,000 | 18,585,000 |
Unrecognized tax benefits interest | 500,000 | |||
Accrued liability for interest and penalties | 1,300,000 | |||
Percentage of income before income taxes included in expected income tax expense | 35.00% | 35.00% | 35.00% | |
Deferred tax assets, alternative minimum tax | $0 |
Deferred_Policy_Acquisition_Co1
Deferred Policy Acquisition Costs (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Insurance [Abstract] | |||
Amortization of deferred policy acquisition costs | $68.60 | $53.20 | $54.90 |
Reserve_for_Losses_and_Loss_Ad2
Reserve for Losses and Loss Adjustment Expenses (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Liability for Unpaid Claims and Claims Adjustment Expense, Period Increase (Decrease) [Abstract] | ||||||||||||
Minimum period for claims resolution | 5 years | |||||||||||
Summary of reserve for losses and loss adjustment expenses | ||||||||||||
Balance, beginning of year | $2,072,822 | $2,054,994 | $2,072,822 | $2,054,994 | $2,247,772 | |||||||
Receivable from reinsurers on unpaid losses and loss adjustment expenses | 237,966 | 247,518 | 237,966 | 247,518 | 191,645 | 247,658 | ||||||
Net balance, beginning of year | 1,825,304 | 1,863,349 | 1,825,304 | 1,863,349 | 2,000,114 | |||||||
Net reserves acquired from acquisitions | 139,549 | 126,007 | 22,464 | |||||||||
Net losses: | ||||||||||||
Current year | -124,271 | -142,124 | -141,126 | -137,647 | -116,689 | -110,987 | -109,109 | -110,726 | -545,168 | -447,510 | -451,951 | |
Favorable development of reserves established in prior years, net | 48,830 | 42,902 | 42,213 | 48,139 | 81,799 | 49,350 | 38,500 | 53,100 | 182,084 | 222,749 | 272,038 | |
Total | 363,084 | 224,761 | 179,913 | |||||||||
Paid related to: | ||||||||||||
Current year | -93,737 | -43,616 | -38,439 | |||||||||
Prior years | -413,900 | -345,197 | -300,703 | |||||||||
Total paid | -507,637 | -388,813 | -339,142 | |||||||||
Net balance, end of year | 1,820,300 | 1,825,304 | 1,820,300 | 1,825,304 | 1,863,349 | |||||||
Balance, end of year | $2,058,266 | $2,072,822 | $2,058,266 | $2,072,822 | $2,054,994 | |||||||
Liability For unpaid claims and claims adjustment expense incurred claims prior years accident years | 2005 through 2011 | 2007 through 2011 | 2004 through 2009 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Schedule of future minimum lease payments for operating leases | |
2015 | $5,024 |
2016 | 4,915 |
2017 | 3,601 |
2018 | 2,965 |
2019 | 2,572 |
Thereafter | 5,232 |
Total minimum lease payments | $24,309 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details Textual) | 12 Months Ended | ||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | |
USD ($) | USD ($) | USD ($) | GBP (£) | Non-Public Equity Funds [Member] | Qualified Affordable Housing Project [Member] | Lloyds Syndicate [Member] | |
USD ($) | USD ($) | USD ($) | |||||
Other Commitment, Fiscal Year Maturity [Abstract] | |||||||
Other commitment | $169,400,000 | $15,500,000 | |||||
Other commitment, due in 2015 | 98,800,000 | 14,100,000 | |||||
Other commitment, due in 2016 and 2017 | 69,200,000 | 500,000 | |||||
Other commitment, due in 2018 | 600,000 | 300,000 | |||||
Other commitment, due thereafter | 800,000 | 600,000 | |||||
FAL Deposit assets | 85,200,000 | ||||||
Line of credit extended to Lloyd's Syndicate, lending capacity | 16,000,000 | 10,000,000 | |||||
Line of credit extended to Lloyd's Syndicate, interest rate | 8.50% | ||||||
Amount receivable under line of credit extended to Lloyd's Syndicate | 11,000,000 | 6,600,000 | |||||
Rent expense | $5,000,000 | $3,200,000 | $2,700,000 |
Longterm_Debt_Details
Long-term Debt (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Outstanding long-term debt | |||
Long-term debt | $250,000,000 | $250,000,000 | |
Loss on extinguishment of debt | 0 | 0 | 2,163,000 |
Senior notes due 2023 [Member] | Senior Notes [Member] | |||
Outstanding long-term debt | |||
Long-term debt | 250,000,000 | 250,000,000 | |
Interest rate | 5.30% | ||
Senior notes due 2023 [Member] | US Treasury Note Rate [Member] | Senior Notes [Member] | |||
Outstanding long-term debt | |||
Variable interest rate of long term debt | 0.40% | ||
Revolving credit agreement [Member] | Line of Credit [Member] | |||
Outstanding long-term debt | |||
Long-term debt | 0 | 0 | |
Current Revolving credit capacity | 200,000,000 | ||
Maximum allowable consolidated funded indebtedness ratio | 0.35 | ||
Net worth requirement, sum of consolidated net worth | 75.00% | ||
Net worth requirement, percentage of consolidated net income earned | 50.00% | ||
Net worth requirement, percentage of net cash proceeds from issuance of stock | 100.00% | ||
Revolving credit agreement [Member] | Base Rate [Member] | Line of Credit [Member] | |||
Outstanding long-term debt | |||
Description of variable rate basis | base rate | ||
Revolving credit agreement [Member] | Prime Rate [Member] | Line of Credit [Member] | |||
Outstanding long-term debt | |||
Description of variable rate basis | Prime rate | ||
Revolving credit agreement [Member] | Federal Funds Rate [Member] | Line of Credit [Member] | |||
Outstanding long-term debt | |||
Variable interest rate of long term debt | 0.50% | ||
Description of variable rate basis | Federal Funds | ||
Revolving credit agreement [Member] | One Month LIBOR [Member] | Line of Credit [Member] | |||
Outstanding long-term debt | |||
Variable interest rate of long term debt | 1.00% | ||
Description of variable rate basis | one month LIBOR | ||
Revolving credit agreement [Member] | Minimum [Member] | Line of Credit [Member] | |||
Outstanding long-term debt | |||
Commitment fee percentages | 0.15% | ||
Variable interest rate of long term debt | 0.00% | ||
Revolving credit agreement [Member] | Maximum [Member] | Line of Credit [Member] | |||
Outstanding long-term debt | |||
Commitment fee percentages | 0.30% | ||
Variable interest rate of long term debt | 1.88% | ||
Note Payable Due 2019 [Member] | Notes Payable [Member] | |||
Outstanding long-term debt | |||
Loss on extinguishment of debt | $2,200,000 |
Shareholders_Equity_Shareholde
Shareholders' Equity Shareholders' Equity (Details) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Common Stock Outstanding Rollforward [Roll Forward] | ||||||
Beginning Balance (in shares) | 61,197 | 61,624 | 61,107 | |||
Repurchase of shares (in shares) | -4,909 | -681 | 0 | |||
Shares issued due to exercise of options and vesting of share-based compensation awards (in shares) | 154 | 169 | 436 | |||
Other shares issued as compensation (in shares) | 92 | [1] | 85 | [1] | 81 | [1] |
Ending Balance (in shares) | 56,534 | 61,197 | 61,624 | |||
[1] | Shares issued were valued at fair value (the market price of a ProAssurance common share on the date of issue). |
Shareholders_Equity_Details_1
Shareholders' Equity (Details 1) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||||
Class of Stock [Line Items] | ||||||||||||||||||
Cash dividends declared per common share (USD per share) | $2.96 | [1] | $0.30 | $0.30 | $0.30 | $0.30 | [1] | $0.25 | $0.25 | $0.25 | $2.75 | [1] | $0.13 | $0.13 | $0.13 | $3.86 | $1.05 | $3.13 |
Dividends Declared, Special [Member] | ||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||
Cash dividends declared per common share (USD per share) | $2.65 | $2.50 | ||||||||||||||||
[1] | * Includes special dividends of $2.65 per share in 2014 and $2.50 per share in 2012. |
Shareholders_Equity_Details_2
Shareholders' Equity (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Reclassification adjustments related to available-for-sale securities | |||||||||||
Net realized gains (losses) | $14,654 | $67,904 | $28,863 | ||||||||
Total amounts reclassified, before tax effect | 262,005 | 397,159 | 395,966 | ||||||||
Tax effect (at 35%) | -65,440 | -99,636 | -120,496 | ||||||||
Net income | 65,114 | 34,778 | 49,942 | 46,731 | 70,864 | 63,357 | 50,451 | 112,850 | 196,565 | 297,523 | 275,470 |
Other Comprehensive Income (Loss), Tax | -785 | -46,157 | 8,262 | ||||||||
Reclassifications from accumulated other comprehensive income to net income, available for sale securities [Member] | |||||||||||
Reclassification adjustments related to available-for-sale securities | |||||||||||
Total amounts reclassified, before tax effect | 3,317 | 11,028 | 14,933 | ||||||||
Tax effect (at 35%) | -1,161 | -3,860 | -5,227 | ||||||||
Net income | 2,156 | 7,168 | 9,706 | ||||||||
Reclassifications from accumulated other comprehensive income to net income, available for sale securities [Member] | Accumulated Net Unrealized Investment Gain (Loss) [Member] | |||||||||||
Reclassification adjustments related to available-for-sale securities | |||||||||||
Net realized gains (losses) | 3,317 | 11,375 | 17,350 | ||||||||
Reclassifications from accumulated other comprehensive income to net income, available for sale securities [Member] | Accumulated Other-than-Temporary Impairment [Member] | |||||||||||
Reclassification adjustments related to available-for-sale securities | |||||||||||
Net realized gains (losses) | $0 | ($347) | ($2,417) |
Shareholders_Equity_Details_Te
Shareholders' Equity (Details Textual) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||
Common shares authorized (in shares) | 100,000,000 | 100,000,000 | 100,000,000 | 100,000,000 | |||||||||||||||
Authorized preferred stock (in shares) | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | |||||||||||||||
Dividends declared | $220,500,000 | $64,800,000 | $192,500,000 | ||||||||||||||||
Equity attributable to parent | 2,157,944,000 | 2,394,414,000 | 2,270,580,000 | 2,157,944,000 | 2,394,414,000 | 2,270,580,000 | 2,164,453,000 | ||||||||||||
Total authorizations which remain available for use (in shares) | 181,500,000 | 181,500,000 | |||||||||||||||||
Repurchased common shares (in shares) | 4,909,000 | 681,000 | 0 | ||||||||||||||||
Authorization common shares for the issuance under incentive compensation plans (in shares) | 2,680,075 | 2,680,075 | |||||||||||||||||
Number of shares available for grant (in shares) | 796,933 | 796,933 | |||||||||||||||||
Impairment losses in accumulated other comprehensive income | 800,000 | 500,000 | 800,000 | 500,000 | |||||||||||||||
Percentage of income before income taxes included in expected income tax expense | 35.00% | 35.00% | 35.00% | ||||||||||||||||
Quarterly dividend declared, per share (USD per share) | $2.96 | [1] | $0.30 | $0.30 | $0.30 | $0.30 | [1] | $0.25 | $0.25 | $0.25 | $2.75 | [1] | $0.13 | $0.13 | $0.13 | $3.86 | $1.05 | $3.13 | |
Retained Earnings, Unappropriated [Member] | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||
Equity attributable to parent | $239,000,000 | $239,000,000 | |||||||||||||||||
[1] | * Includes special dividends of $2.65 per share in 2014 and $2.50 per share in 2012. |
ShareBased_Payments_Details
Share-Based Payments (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Summary of compensation expense and related tax benefit recognized during each period and compensation cost expense in future periods | |||
Share-based compensation expense | $10,056,000 | $9,242,000 | $8,639,000 |
Tax benefit recognized | 3,500,000 | 3,200,000 | 3,000,000 |
Unrecognized Compensation Cost, Amount | 9,900,000 | ||
Restricted Stock Units (RSUs) [Member] | |||
Summary of compensation expense and related tax benefit recognized during each period and compensation cost expense in future periods | |||
Share-based compensation expense | 1,700,000 | 1,600,000 | 1,600,000 |
Unrecognized Compensation Cost, Amount | 2,000,000 | ||
Unrecognized Compensation Cost, remaining recognition period | 1 year 9 months 18 days | ||
Performance Shares Units [Member] | |||
Summary of compensation expense and related tax benefit recognized during each period and compensation cost expense in future periods | |||
Share-based compensation expense | 7,600,000 | 7,100,000 | 6,700,000 |
Unrecognized Compensation Cost, Amount | 6,300,000 | ||
Unrecognized Compensation Cost, remaining recognition period | 1 year 8 months 12 days | ||
Employee Purchase Plan [Member] | |||
Summary of compensation expense and related tax benefit recognized during each period and compensation cost expense in future periods | |||
Share-based compensation expense | 800,000 | 500,000 | 300,000 |
Unrecognized Compensation Cost, Amount | $1,600,000 | ||
Unrecognized Compensation Cost, remaining recognition period | 2 years 2 months 12 days |
ShareBased_Payments_Details_1
Share-Based Payments (Details 1) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Summary of activity for stock options | |||
Stock Options, Outstanding, Beginning of the year (in shares) | 18,082 | 20,302 | 1,014,661 |
Stock Options, Outstanding, Granted (in shares) | 0 | 0 | 0 |
Stock Options, Outstanding, Exercised (in shares) | -13,626 | -2,220 | -994,148 |
Stock Options, Outstanding, Forfeited or Expired (in shares) | 0 | 0 | -211 |
Stock Options, Outstanding, Ending of the year (in shares) | 4,456 | 18,082 | 20,302 |
Stock Options, Outstanding, Exercisable at end of year (in shares) | 4,456 | 18,082 | 20,302 |
Stock Options, Outstanding at end of year, Vested or Expected to Vest (in shares) | 4,456 | 18,082 | 20,302 |
Summary of activity for stock options, weighted average exercise price | |||
Stock Options, Outstanding, Weighted Average Exercise Price, Beginning of the year (USD per share) | $23 | $23.15 | $22.76 |
Stock Options, Outstanding, Weighted Average Exercise Price, Granted (USD per share) | $0 | $0 | $0 |
Stock Options, Outstanding, Weighted Average Exercise Price ,Exercised (USD per share) | $22.47 | $24.28 | $22.75 |
Stock Options, Outstanding, Weighted Average Exercise Price, Forfeited and Expired (USD per share) | $0 | $0 | $25.67 |
Stock Options, Outstanding, Weighted Average Exercise Price, End of the Period (USD per share) | $24.64 | $23 | $23.15 |
Stock Options, Outstanding, Weighted Average Exercise Price, Exercisable (USD per share) | $24.64 | $23 | $23.15 |
Stock Options, Outstanding at end of year, Weighted Average Exercise Price, vested or expected to vest (USD per share) | $24.64 | $23 | $23.15 |
ShareBased_Payments_Details_2
Share-Based Payments (Details 2) (Restricted Stock Units (RSUs) [Member], USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Restricted Stock Units (RSUs) [Member] | |||
Summary Activity for restricted share units, number of shares | |||
Beginning non-vested balance (in shares) | 138,770 | 157,212 | 167,236 |
Granted (in shares) | 49,750 | 39,400 | 51,864 |
Forfeited (in shares) | -2,044 | -603 | -2,823 |
Vested (in shares) | -49,674 | -57,239 | -59,065 |
Ending non-vested balance (in shares) | 136,802 | 138,770 | 157,212 |
Summary Activity for restricted share units, weighted average grant date fair value | |||
Beginning balance, weighted average grant date fair value per share (USD per share) | $38.92 | $31.94 | $25.52 |
Granted, weighted average grant date fair value per share (USD per share) | $46.34 | $46.97 | $42.22 |
Forfeited, weighted average grant date fair value per share (USD per share) | $44.88 | $35.91 | $35.23 |
Vested and released, weighted average grant date fair value per share (USD per share) | $29.22 | $25.25 | $22.61 |
Ending balance, weighted average grant date fair value per share (USD per share) | $45.02 | $38.92 | $31.94 |
ShareBased_Payments_Details_3
Share-Based Payments (Details 3) (Performance Shares Units [Member], USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Performance Shares Units [Member] | |||
Summary Activity for restricted share units, number of shares | |||
Beginning non-vested balance (in shares) | 486,680 | 552,417 | 522,599 |
Granted (in shares) | 160,900 | 145,580 | 212,205 |
Forfeited (in shares) | -14,221 | -17,043 | -20,492 |
Vested (in shares) | -166,499 | -194,274 | -161,895 |
Ending non-vested balance (in shares) | 466,860 | 486,680 | 552,417 |
Summary Activity for restricted share units, weighted average grant date fair value | |||
Beginning balance, weighted average grant date fair value per share (USD per share) | $39.86 | $33.21 | $26.36 |
Granted, weighted average grant date fair value per share (USD per share) | $46.34 | $46.97 | $42.22 |
Forfeited, weighted average grant date fair value per share (USD per share) | $45.30 | $38.90 | $31.44 |
Vested and released, weighted average grant date fair value per share (USD per share) | $31.33 | $26.39 | $23.13 |
Ending balance, weighted average grant date fair value per share (USD per share) | $44.97 | $39.86 | $33.21 |
Share_Based_Payments_Details_4
Share Based Payments (Details 4) (Employee Purchase Plan [Member], USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Employee Purchase Plan [Member] | |||
Summary Activity for restricted share units, number of shares | |||
Beginning non-vested balance (in shares) | 63,125 | 40,985 | 18,900 |
Granted (in shares) | 29,069 | 25,151 | 23,799 |
Forfeited (in shares) | -2,968 | -2,456 | -1,610 |
Vested (in shares) | -17,125 | -555 | -104 |
Ending non-vested balance (in shares) | 72,101 | 63,125 | 40,985 |
Summary Activity for restricted share units, weighted average grant date fair value | |||
Beginning balance, weighted average grant date fair value per share (USD per share) | $41.34 | $39.85 | $36.20 |
Granted, weighted average grant date fair value per share (USD per share) | $44.55 | $43.57 | $42.59 |
Forfeited, weighted average grant date fair value per share (USD per share) | $43.14 | $40.71 | $37.72 |
Vested and released, weighted average grant date fair value per share (USD per share) | $36.61 | $36.33 | $36.20 |
Ending balance, weighted average grant date fair value per share (USD per share) | $43.69 | $41.34 | $39.85 |
ShareBased_Payments_Details_Te
Share-Based Payments (Details Textual) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Award_Type | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of award types | 4 | ||
Aggregate grant date fair value of options vested in period | $900,000 | ||
The aggregate grant date intrinsic value of options exercised | 300,000 | 100,000 | 19,800,000 |
Aggregate intrinsic value of stock options outstanding | 100,000 | ||
Weighted average remaining contractual term of stock options | 2 years 5 months 8 days | ||
Cash proceeds from stock option exercises | 0 | 0 | 0 |
Performance Shares Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected average period | 3 years | ||
The aggregate grant date fair value of Employee awards | 5,200,000 | 5,100,000 | 3,700,000 |
The percentage of award vest | 125.00% | ||
Aggregate intrinsic value | 7,700,000 | 9,100,000 | 7,200,000 |
Management Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected average period | 3 years | ||
The aggregate grant date fair value of Employee awards | 1,500,000 | 1,400,000 | 1,300,000 |
Aggregate intrinsic value | 2,300,000 | 2,700,000 | 2,600,000 |
Employee Purchase Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected average period | 3 years | ||
The aggregate grant date fair value of Employee awards | 600,000 | ||
Aggregate intrinsic value | 800,000 | ||
Annual contribution for the purchase of shares | $5,000 | ||
Minimum [Member] | Performance Shares Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
The percentage of award vest | 75.00% | ||
Maximum [Member] | Performance Shares Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
The percentage of award vest | 125.00% |
Variable_Interest_Entities_Det
Variable Interest Entities (Details) (Variable Interest Entity, Not Primary Beneficiary [Member], USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Other Investments [Member] | ||
Variable Interest Entity [Line Items] | ||
Variable interest entity nonconsolidated assets | $33.30 | $27.30 |
Variable interest entity, maximum loss exposure | 33.3 | |
Equity Method Investments [Member] | ||
Variable Interest Entity [Line Items] | ||
Variable interest entity nonconsolidated assets | 65 | 49.5 |
Variable interest entity, maximum loss exposure | $65 |
Segment_Information_Details_Te
Segment Information (Details Textual) | 12 Months Ended |
Dec. 31, 2014 | |
Segment | |
Segment Reporting Information [Line Items] | |
Number of operating segments | 4 |
Workers Compensation [Member] | |
Segment Reporting Information [Line Items] | |
Alternative market solutions percentage ceded | 100.00% |
Lloyds Syndicate [Member] | |
Segment Reporting Information [Line Items] | |
Proportion of capital provided to support lloyd's syndicate | 58.00% |
Segment_Information_Details_1
Segment Information (Details 1) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Segment Reporting Information [Line Items] | |||||||||||
Net premiums earned | $174,670 | $177,028 | $176,303 | $171,730 | $129,392 | $133,598 | $130,352 | $134,578 | $699,731 | $527,919 | $550,664 |
Net investment income | 125,557 | 129,265 | 136,094 | ||||||||
Equity in earnings (loss) of unconsolidated subsidiaries | 3,986 | 7,539 | -6,873 | ||||||||
Net realized gains (losses) | 14,654 | 67,904 | 28,863 | ||||||||
Other income (loss) | 8,398 | 7,551 | 7,106 | ||||||||
Gain on acquisition | 0 | 32,314 | 0 | ||||||||
Net losses and loss adjustment expenses | -363,084 | -224,761 | -179,913 | ||||||||
Underwriting, policy acquisition and operating expenses | -211,311 | -147,817 | -135,631 | ||||||||
Segregated portfolio cells dividend expense | -1,842 | 0 | 0 | ||||||||
Interest expense | -14,084 | -2,755 | -2,181 | ||||||||
Loss (gain) on extinguishment of debt | 0 | 0 | -2,163 | ||||||||
Tax effect (at 35%) | -65,440 | -99,636 | -120,496 | ||||||||
Segment operating results | 196,565 | 297,523 | 275,470 | ||||||||
Depreciation and amortization | 50,323 | 45,967 | 37,573 | ||||||||
Net income | 65,114 | 34,778 | 49,942 | 46,731 | 70,864 | 63,357 | 50,451 | 112,850 | 196,565 | 297,523 | 275,470 |
Specialty Property and Casualty [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net premiums earned | 492,733 | 527,919 | 550,664 | ||||||||
Other income (loss) | 5,823 | 5,648 | 5,331 | ||||||||
Gain on acquisition | 0 | ||||||||||
Net losses and loss adjustment expenses | -228,199 | -224,761 | -179,913 | ||||||||
Underwriting, policy acquisition and operating expenses | -133,132 | -132,076 | -125,292 | ||||||||
Segment operating results | 137,225 | 176,730 | 250,790 | ||||||||
Depreciation and amortization | 8,945 | 7,199 | 7,355 | ||||||||
Workers Compensation [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net premiums earned | 194,540 | 0 | 0 | ||||||||
Other income (loss) | 645 | 0 | 0 | ||||||||
Net losses and loss adjustment expenses | -126,447 | 0 | 0 | ||||||||
Underwriting, policy acquisition and operating expenses | -60,357 | 0 | 0 | ||||||||
Segregated portfolio cells dividend expense | -1,842 | ||||||||||
Segment operating results | 6,539 | 0 | 0 | ||||||||
Depreciation and amortization | 5,828 | 0 | 0 | ||||||||
Lloyds Syndicate [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net premiums earned | 12,458 | 0 | 0 | ||||||||
Net investment income | 410 | 0 | 0 | ||||||||
Net realized gains (losses) | 4 | ||||||||||
Other income (loss) | 126 | ||||||||||
Net losses and loss adjustment expenses | -8,438 | ||||||||||
Underwriting, policy acquisition and operating expenses | -9,535 | 0 | 0 | ||||||||
Segment operating results | -4,975 | 0 | 0 | ||||||||
Depreciation and amortization | 477 | 0 | 0 | ||||||||
Corporate Segment [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net premiums earned | 0 | ||||||||||
Net investment income | 125,147 | 129,265 | 136,094 | ||||||||
Equity in earnings (loss) of unconsolidated subsidiaries | 3,986 | 7,539 | -6,873 | ||||||||
Net realized gains (losses) | 14,650 | 67,904 | 28,863 | ||||||||
Other income (loss) | 2,285 | 1,910 | 1,825 | ||||||||
Gain on acquisition | 32,314 | ||||||||||
Underwriting, policy acquisition and operating expenses | -8,768 | -15,748 | -10,389 | ||||||||
Interest expense | -14,084 | -2,755 | -2,181 | ||||||||
Loss (gain) on extinguishment of debt | -2,163 | ||||||||||
Tax effect (at 35%) | -65,440 | -99,636 | -120,496 | ||||||||
Segment operating results | 57,776 | 120,793 | 24,680 | ||||||||
Depreciation and amortization | 35,073 | 38,768 | 30,218 | ||||||||
Inter-segment Eliminations [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Other income (loss) | -481 | -7 | -50 | ||||||||
Underwriting, policy acquisition and operating expenses | 481 | 7 | 50 | ||||||||
Segment operating results | 0 | 0 | 0 | ||||||||
Depreciation and amortization | $0 |
Segment_Information_Details_2
Segment Information (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||||
Segment Reporting Information [Line Items] | ||||||||||||||
Premiums ceded | ($68,879,000) | [1] | ($41,514,000) | [1] | ($7,652,000) | [1] | ||||||||
Net premiums earned | 174,670,000 | 177,028,000 | 176,303,000 | 171,730,000 | 129,392,000 | 133,598,000 | 130,352,000 | 134,578,000 | 699,731,000 | 527,919,000 | 550,664,000 | |||
Specialty Property and Casualty [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Premiums ceded | -50,319,000 | -41,514,000 | -7,652,000 | |||||||||||
Net premiums earned | 492,733,000 | 527,919,000 | 550,664,000 | |||||||||||
Premiums ceded to lloyd's syndicate segment | 4,200,000 | |||||||||||||
Workers Compensation [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Premiums ceded | -21,793,000 | 0 | 0 | |||||||||||
Net premiums earned | 194,540,000 | 0 | 0 | |||||||||||
Lloyds Syndicate [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Premiums ceded | -971,000 | 0 | 0 | |||||||||||
Net premiums earned | 12,458,000 | 0 | 0 | |||||||||||
Healthcare Professional Liability [Member] | Specialty Property and Casualty [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Gross premiums earned: | 477,031,000 | 507,222,000 | 539,729,000 | |||||||||||
Legal Professional Liability [Member] | Specialty Property and Casualty [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Gross premiums earned: | 28,278,000 | 27,162,000 | 17,042,000 | |||||||||||
Medical Technology and Life Sciences Product Liability [Member] | Specialty Property and Casualty [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Gross premiums earned: | 35,913,000 | 33,242,000 | 0 | |||||||||||
Other Premiums [Member] | Specialty Property and Casualty [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Gross premiums earned: | 1,830,000 | 1,807,000 | 1,545,000 | |||||||||||
Workers' Compensation Traditional Business [Member] | Workers Compensation [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Gross premiums earned: | 160,717,000 | 0 | 0 | |||||||||||
Workers' Compensation Alternative Market Business [Member] | Workers Compensation [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Gross premiums earned: | 55,616,000 | 0 | 0 | |||||||||||
Property, Liability and Casualty Insurance Product Line [Member] | Lloyds Syndicate [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Gross premiums earned: | $13,429,000 | [2] | $0 | $0 | ||||||||||
[1] | All of ProAssurance’s premiums are related to property and liability coverages. | |||||||||||||
[2] | Includes premium ceded from the Specialty P&C Segment to the Lloyd's Syndicate Segment of $4.2 million for year ended December 31, 2014. |
Benefit_Plans_Details
Benefit Plans (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Defined Contribution Plan Disclosure [Line Items] | |||
Incurred expense related to savings and retirement plans | $6 | $5.10 | $4.60 |
Incurred expense related to non qualified deferred compensation plans | 0.3 | 0.4 | 0.4 |
ProAssurance deferred compensation liabilities total | $14 | $13.10 | |
Minimum [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Percentage of benefit plan contribution by employer | 5.00% | ||
Maximum [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Percentage of benefit plan contribution by employer | 10.00% |
Statutory_Accounting_and_Divid2
Statutory Accounting and Dividend Restrictions (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Consolidated Net Income Related to Statutory Accounting | |||
Statutory Net Earnings | $246,000,000 | $256,000,000 | $312,000,000 |
Statutory Capital and Surplus | 1,681,000,000 | 1,642,000,000 | |
Statutory Capital and Surplus | 1,900,000,000 | ||
Dividend payments from insurance subsidiaries | $230,000,000 |
Quarterly_Results_of_Operation2
Quarterly Results of Operations (Unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||||||||
Summary of unaudited quarterly results of operations | |||||||||||||||||||
Net premiums earned | $174,670 | $177,028 | $176,303 | $171,730 | $129,392 | $133,598 | $130,352 | $134,578 | $699,731 | $527,919 | $550,664 | ||||||||
Net losses and loss adjustment expenses: | |||||||||||||||||||
Current year | 124,271 | 142,124 | 141,126 | 137,647 | 116,689 | 110,987 | 109,109 | 110,726 | 545,168 | 447,510 | 451,951 | ||||||||
Favorable development of reserves established in prior years, net | 48,830 | 42,902 | 42,213 | 48,139 | 81,799 | 49,350 | 38,500 | 53,100 | 182,084 | 222,749 | 272,038 | ||||||||
Net income | $65,114 | $34,778 | $49,942 | $46,731 | $70,864 | $63,357 | $50,451 | $112,850 | $196,565 | $297,523 | $275,470 | ||||||||
Basic earnings per share (USD per share) | $1.13 | [1] | $0.59 | [1] | $0.84 | [1] | $0.76 | [1] | $1.15 | [1] | $1.02 | [1] | $0.82 | [1] | $1.83 | [1] | $3.32 | $4.82 | $4.49 |
Diluted earnings per share (USD per share) | $1.12 | [1] | $0.59 | [1] | $0.84 | [1] | $0.76 | [1] | $1.14 | [1] | $1.02 | [1] | $0.81 | [1] | $1.82 | [1] | $3.30 | $4.80 | $4.46 |
[1] | Quarterly and year-to-date computations of per share amounts are made independently; therefore, the sum of per share amounts for the quarters may not equal per share amounts for the respective year-to-date periods. |
Subsequent_Events_Details
Subsequent Events (Details) (Revolving Credit Facility [Member], Subsequent Event [Member], USD $) | 1 Months Ended |
In Millions, unless otherwise specified | Jan. 31, 2015 |
Revolving Credit Facility [Member] | Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Draw on line of credit | $100 |
Schedule_I_Summary_of_Investme1
Schedule I - Summary of Investments-Other Than Investments In Related Parties (Details) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Total Investments, Recorded cost basis | $3,888,782 |
Total Investments, Fair value | 4,012,423 |
Total Investments, Amount which is presented in the balance sheet | 4,009,707 |
U.S. Government or government agencies and authorities [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Total Investments, Recorded cost basis | 201,736 |
Total Investments, Fair value | 206,075 |
Total Investments, Amount which is presented in the balance sheet | 206,075 |
States, municipalities and political subdivisions [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Total Investments, Recorded cost basis | 1,015,555 |
Total Investments, Fair value | 1,062,615 |
Total Investments, Amount which is presented in the balance sheet | 1,062,615 |
Foreign Governments [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Total Investments, Recorded cost basis | 2,709 |
Total Investments, Fair value | 2,871 |
Total Investments, Amount which is presented in the balance sheet | 2,871 |
Public utilities bonds [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Total Investments, Recorded cost basis | 80,086 |
Total Investments, Fair value | 83,668 |
Total Investments, Amount which is presented in the balance sheet | 83,668 |
All other corporate bonds [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Total Investments, Recorded cost basis | 1,307,025 |
Total Investments, Fair value | 1,330,412 |
Total Investments, Amount which is presented in the balance sheet | 1,330,412 |
Certificates of deposit [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Total Investments, Recorded cost basis | 150 |
Total Investments, Fair value | 150 |
Total Investments, Amount which is presented in the balance sheet | 150 |
Mortgage-backed securities [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Total Investments, Recorded cost basis | 448,216 |
Total Investments, Fair value | 459,236 |
Total Investments, Amount which is presented in the balance sheet | 459,236 |
Fixed Maturities [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Total Investments, Recorded cost basis | 3,055,477 |
Total Investments, Fair value | 3,145,027 |
Total Investments, Amount which is presented in the balance sheet | 3,145,027 |
Public utilities equity, trading [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Total Investments, Recorded cost basis | 6,559 |
Total Investments, Fair value | 7,981 |
Total Investments, Amount which is presented in the balance sheet | 7,981 |
Banks, trusts and insurance companies, trading [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Total Investments, Recorded cost basis | 75,171 |
Total Investments, Fair value | 79,341 |
Total Investments, Amount which is presented in the balance sheet | 79,341 |
Industrial, miscellaneous and all other, trading [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Total Investments, Recorded cost basis | 201,377 |
Total Investments, Fair value | 227,160 |
Total Investments, Amount which is presented in the balance sheet | 227,160 |
Total Equity Securities, trading [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Total Investments, Recorded cost basis | 283,107 |
Total Investments, Fair value | 314,482 |
Total Investments, Amount which is presented in the balance sheet | 314,482 |
Other long-term investments [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Total Investments, Recorded cost basis | 418,939 |
Total Investments, Fair value | 421,655 |
Total Investments, Amount which is presented in the balance sheet | 418,939 |
Short-term Investments [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Total Investments, Recorded cost basis | 131,259 |
Total Investments, Fair value | 131,259 |
Total Investments, Amount which is presented in the balance sheet | $131,259 |
Schedule_II_Condensed_Financia1
Schedule II - Condensed Financial Information of Registrant (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Assets | ||||
Fixed maturities available for sale, at fair value | $3,145,027 | $3,118,049 | ||
Equity securities, trading, at fair value | 314,482 | 253,541 | ||
Short-term investments | 131,259 | 248,605 | ||
Cash and cash equivalents | 197,040 | 129,383 | 118,551 | 130,400 |
Restricted cash | 0 | 78,000 | ||
Other assets | 93,263 | 329,979 | ||
Total Assets | 5,169,160 | 5,150,099 | ||
Liabilities | ||||
Other liabilities | 320,853 | 143,079 | ||
Long-term debt | 250,000 | 250,000 | ||
Total Liabilities | 3,011,216 | 2,755,685 | ||
Shareholders’ Equity: | ||||
Common stock | 623 | 621 | ||
Total Shareholders’ Equity | 2,157,944 | 2,394,414 | 2,270,580 | 2,164,453 |
Total Liabilities and Shareholders’ Equity | 5,169,160 | 5,150,099 | ||
Parent Company [Member] | ||||
Assets | ||||
Investment in subsidiaries, at equity | 2,145,358 | 1,996,721 | ||
Fixed maturities available for sale, at fair value | 203,451 | 86,603 | ||
Equity securities, trading, at fair value | 0 | 12,043 | ||
Short-term investments | 42,790 | 191,991 | ||
Cash and cash equivalents | 87,200 | 37,459 | 29,397 | 47,938 |
Restricted cash | 0 | 78,000 | ||
Due from subsidiaries | 87,719 | 12,014 | ||
Other assets | 25,736 | 255,313 | ||
Total Assets | 2,592,254 | 2,670,144 | ||
Liabilities | ||||
Other liabilities | 184,310 | 25,730 | ||
Long-term debt | 250,000 | 250,000 | ||
Total Liabilities | 434,310 | 275,730 | ||
Shareholders’ Equity: | ||||
Common stock | 623 | 621 | ||
Other shareholders’ equity, including unrealized gains (losses) on securities of subsidiaries | 2,157,321 | 2,393,793 | ||
Total Shareholders’ Equity | 2,157,944 | 2,394,414 | ||
Total Liabilities and Shareholders’ Equity | $2,592,254 | $2,670,144 |
Schedule_II_Condensed_Financia2
Schedule II - Condensed Financial Information of Registrant (Details 1) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues | |||||||||||
Net investment income | $125,557 | $129,265 | $136,094 | ||||||||
Equity in earnings (loss) of unconsolidated subsidiaries | 3,986 | 7,539 | -6,873 | ||||||||
Other income (loss) | 8,398 | 7,551 | 7,106 | ||||||||
Total revenues | 852,326 | 740,178 | 715,854 | ||||||||
Expenses | |||||||||||
Interest expense | 14,084 | 2,755 | 2,181 | ||||||||
Total expenses | 590,321 | 375,333 | 319,888 | ||||||||
Income tax expense (benefit) | 65,440 | 99,636 | 120,496 | ||||||||
Net income | 65,114 | 34,778 | 49,942 | 46,731 | 70,864 | 63,357 | 50,451 | 112,850 | 196,565 | 297,523 | 275,470 |
Other comprehensive income | -1,457 | -85,719 | 15,343 | ||||||||
Comprehensive income | 195,108 | 211,804 | 290,813 | ||||||||
Parent Company [Member] | |||||||||||
Revenues | |||||||||||
Net investment income | 3,295 | 5,789 | 5,281 | ||||||||
Equity in earnings (loss) of unconsolidated subsidiaries | 0 | 0 | -728 | ||||||||
Net realized investment gains (losses) | 990 | 5,334 | 3,230 | ||||||||
Other income (loss) | 660 | 170 | 54 | ||||||||
Total revenues | 4,945 | 11,293 | 7,837 | ||||||||
Expenses | |||||||||||
Interest expense | 14,084 | 2,747 | 1,534 | ||||||||
Other expenses | 7,083 | 13,213 | 8,870 | ||||||||
Total expenses | 21,167 | 15,960 | 10,404 | ||||||||
Income (loss) before income tax expense (benefit) and equity in net income of consolidated subsidiaries | -16,222 | -4,667 | -2,567 | ||||||||
Income tax expense (benefit) | -6,728 | -1,007 | 773 | ||||||||
Income (loss) before equity in net income of consolidated subsidiaries | -9,494 | -3,660 | -3,340 | ||||||||
Equity in net income of consolidated subsidiaries | 206,059 | 301,183 | 278,810 | ||||||||
Net income | 196,565 | 297,523 | 275,470 | ||||||||
Other comprehensive income | -1,457 | -85,719 | 15,343 | ||||||||
Comprehensive income | $195,108 | $211,804 | $290,813 |
Schedule_II_Condensed_Financia3
Schedule II - Condensed Financial Information of Registrant (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Condensed Cash Flow Statements, Captions [Line Items] | |||
Net cash provided (used) by operating activities | $96,002 | $38,602 | $91,250 |
Purchases of: | |||
Equity securities trading | -119,865 | -87,604 | -120,555 |
Proceeds from sale or maturities of: | |||
Fixed maturities, available for sale | 703,828 | 970,708 | 926,221 |
Equity securities trading | 134,005 | 123,645 | 54,670 |
Net decrease (increase) in short-term investments | 140,411 | -176,092 | 48,565 |
(Increase) decrease in restricted cash | 78,000 | -78,000 | 0 |
Funds at Lloyd's in support of Syndicate 1729, returned (deposited) | 8,690 | -8,699 | 0 |
Other | -4,390 | -9,909 | -4,409 |
Net cash provided (used) by investing activities | 266,980 | -67,803 | 26,843 |
Financing Activities | |||
Proceeds from long-term debt | 0 | 250,000 | 125,000 |
Principal repayment of debt | 0 | -127,183 | -57,660 |
Repurchase of common stock | -222,360 | -29,089 | 0 |
Excess of tax benefit from share-based payment arrangements | 2,702 | 2,128 | 7,022 |
Dividends to shareholders | -71,252 | -46,375 | -200,118 |
Other | -4,415 | -9,448 | -4,186 |
Net cash provided (used) by financing activities | -295,325 | 40,033 | -129,942 |
Increase (decrease) in cash and cash equivalents | 67,657 | 10,832 | -11,849 |
Cash and cash equivalents at beginning of period | 129,383 | 118,551 | 130,400 |
Cash and cash equivalents at end of period | 197,040 | 129,383 | 118,551 |
Supplemental Disclosure of Cash Flow Information | |||
Cash paid during the year for income taxes, net of refunds | 26,061 | 117,107 | 110,278 |
Cash paid during the year for interest | 13,408 | 913 | 2,342 |
Significant non-cash transactions: | |||
Unpaid dividends | 167,744 | 18,532 | 0 |
Parent Company [Member] | |||
Condensed Cash Flow Statements, Captions [Line Items] | |||
Net cash provided (used) by operating activities | 20,086 | -24,654 | 3,601 |
Purchases of: | |||
Equity securities trading | -310 | -1,265 | -364 |
Proceeds from sale or maturities of: | |||
Fixed maturities, available for sale | 104,844 | 224,993 | 150,192 |
Equity securities trading | 12,813 | 1,113 | 616 |
Net decrease (increase) in short-term investments | 149,202 | -187,625 | 58,657 |
Dividends from subsidiaries | 67,188 | 239,484 | 59,369 |
Contribution of capital to subsidiaries | -7,000 | 0 | -184,330 |
Cash paid for acquisitions, net of cash received | 0 | -205,244 | 0 |
(Increase) decrease in restricted cash | 78,000 | -78,000 | 0 |
Funds at Lloyd's in support of Syndicate 1729, returned (deposited) | -76,553 | -8,699 | 0 |
Funds advanced under Syndicate 1729 credit agreement | 9,107 | 1,665 | 0 |
Other | 415 | -20 | -1 |
Net cash provided (used) by investing activities | 319,492 | -16,928 | 84,139 |
Financing Activities | |||
Proceeds from long-term debt | 0 | 250,000 | 125,000 |
Principal repayment of debt | 0 | -125,000 | -32,992 |
Repurchase of common stock | -222,360 | -29,089 | 0 |
Subsidiary payments for common shares and share-based compensation awarded to subsidiary employees | 8,301 | 6,258 | 7,066 |
Excess of tax benefit from share-based payment arrangements | 1,631 | 2,128 | 7,022 |
Dividends to shareholders | -70,490 | -46,375 | -200,118 |
Other | -6,919 | -8,278 | -12,259 |
Net cash provided (used) by financing activities | -289,837 | 49,644 | -106,281 |
Increase (decrease) in cash and cash equivalents | 49,741 | 8,062 | -18,541 |
Cash and cash equivalents at beginning of period | 37,459 | 29,397 | 47,938 |
Cash and cash equivalents at end of period | 87,200 | 37,459 | 29,397 |
Significant non-cash transactions: | |||
Unpaid dividends | 167,744 | 18,532 | 0 |
Securities transferred at fair value as dividends from subsidiaries | $227,412 | $69,011 | $241,081 |
Schedule_II_Condensed_Financia4
Schedule II - Condensed Financial Information of Registrant (Details 3) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2012 | Dec. 31, 2013 | |
Outstanding long-term debt | |||
Long-term debt | $250,000,000 | $250,000,000 | |
Parent Company [Member] | |||
Outstanding long-term debt | |||
Long-term debt | 250,000,000 | 250,000,000 | |
Payments to Acquire Additional Interest in Subsidiaries | 7,000,000 | 184,300,000 | |
Senior Notes [Member] | Senior notes due 2023 [Member] | |||
Outstanding long-term debt | |||
Long-term debt | 250,000,000 | 250,000,000 | |
Interest rate | 5.30% | ||
Senior Notes [Member] | Senior notes due 2023 [Member] | Parent Company [Member] | |||
Outstanding long-term debt | |||
Long-term debt | 250,000,000 | 250,000,000 | |
Interest rate | 5.30% | ||
Line of Credit [Member] | Revolving Credit Facility [Member] | |||
Outstanding long-term debt | |||
Long-term debt | 0 | 0 | |
Line of Credit [Member] | Revolving Credit Facility [Member] | Parent Company [Member] | |||
Outstanding long-term debt | |||
Long-term debt | $0 | $0 |
Schedule_II_Condensed_Financia5
Schedule II - Condensed Financial Information of Registrant (Details Textual) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 12 Months Ended | 0 Months Ended | ||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Jan. 01, 2014 | Dec. 31, 2014 | Jan. 01, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Jan. 01, 2014 | Jan. 01, 2014 | Dec. 31, 2013 | |
USD ($) | USD ($) | GBP (£) | Eastern Insurance Holdings [Member] | Eastern Insurance Holdings [Member] | Eastern Insurance Holdings [Member] | Parent Company [Member] | Parent Company [Member] | Parent Company [Member] | Parent Company [Member] | Parent Company [Member] | Parent Company [Member] | Parent Company [Member] | |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | GBP (£) | Eastern Insurance Holdings [Member] | Eastern Insurance Holdings [Member] | Eastern Insurance Holdings [Member] | |||||
USD ($) | USD ($) | ||||||||||||
Voting interests acquired | 100.00% | 100.00% | |||||||||||
Total purchase consideration | $205,000,000 | $205,243,000 | $205,000,000 | ||||||||||
Third party conversion agent asset | 205,000,000 | 205,000,000 | |||||||||||
Dividends paid to parent company by consolidated subsidiaries | 294,600,000 | 308,500,000 | 300,500,000 | ||||||||||
Capital contribution | 7,000,000 | 184,300,000 | |||||||||||
Funds at lloyd's In support of syndicate 1729, advanced from subsidiary | -76,600,000 | -8,700,000 | |||||||||||
Line of credit extended to Lloyd's Syndicate, lending capacity | 16,000,000 | 10,000,000 | 16,000,000 | 10,000,000 | |||||||||
Amount receivable under line of credit extended to Lloyd's Syndicate | $11,000,000 | £ 6,600,000 | $11,000,000 | £ 6,600,000 |
Schedule_III_Supplementary_Ins1
Schedule III - Supplementary Insurance Information (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||||
Supplementary Insurance Information, by Segment [Line Items] | ||||||||||||||||
Net premiums earned | $699,731 | $527,919 | $550,664 | |||||||||||||
Net investment income | 125,557 | [1] | 129,265 | [1] | 136,094 | [1] | ||||||||||
Losses and loss adjustment expenses incurred related to current year, net of reinsurance | 124,271 | 142,124 | 141,126 | 137,647 | 116,689 | 110,987 | 109,109 | 110,726 | 545,168 | 447,510 | 451,951 | |||||
Losses and loss adjustment expenses incurred related to prior year, net of reinsurance | -48,830 | -42,902 | -42,213 | -48,139 | -81,799 | -49,350 | -38,500 | -53,100 | -182,084 | -222,749 | -272,038 | |||||
Paid losses and loss adjustment expenses, net of reinsurance | 507,637 | 388,813 | 339,142 | |||||||||||||
Underwriting, policy acquisition and operating expenses: | 68,577 | 53,207 | 54,887 | |||||||||||||
Other underwriting, policy acquisition and operating expenses | 142,734 | [2] | 94,610 | [2] | 80,744 | [2] | ||||||||||
Net premiums written | 701,849 | 525,182 | 528,298 | |||||||||||||
Deferred policy acquisition costs | 38,790 | [1] | 28,207 | [1] | 38,790 | [1] | 28,207 | [1] | 23,179 | [1] | ||||||
Reserve for losses and loss adjustment expenses | 2,058,266 | [1] | 2,072,822 | [1] | 2,058,266 | [1] | 2,072,822 | [1] | 2,054,994 | [1] | ||||||
Unearned premiums | 345,828 | [1] | 255,463 | [1] | 345,828 | [1] | 255,463 | [1] | 233,861 | [1] | ||||||
Specialty Property and Casualty [Member] | ||||||||||||||||
Supplementary Insurance Information, by Segment [Line Items] | ||||||||||||||||
Net premiums earned | 492,733 | 527,919 | 550,664 | |||||||||||||
Losses and loss adjustment expenses incurred related to current year, net of reinsurance | 408,987 | 447,510 | 451,951 | |||||||||||||
Losses and loss adjustment expenses incurred related to prior year, net of reinsurance | -180,788 | -222,749 | -272,038 | |||||||||||||
Paid losses and loss adjustment expenses, net of reinsurance | 389,458 | 388,813 | 339,142 | |||||||||||||
Underwriting, policy acquisition and operating expenses: | 55,105 | 53,207 | 54,887 | |||||||||||||
Other underwriting, policy acquisition and operating expenses | 78,027 | 78,869 | 70,405 | |||||||||||||
Net premiums written | 467,046 | 525,182 | 528,298 | |||||||||||||
Workers Compensation [Member] | ||||||||||||||||
Supplementary Insurance Information, by Segment [Line Items] | ||||||||||||||||
Net premiums earned | 194,540 | 0 | 0 | |||||||||||||
Losses and loss adjustment expenses incurred related to current year, net of reinsurance | 127,743 | 0 | 0 | |||||||||||||
Losses and loss adjustment expenses incurred related to prior year, net of reinsurance | -1,296 | 0 | 0 | |||||||||||||
Paid losses and loss adjustment expenses, net of reinsurance | 117,775 | 0 | 0 | |||||||||||||
Underwriting, policy acquisition and operating expenses: | 10,307 | 0 | 0 | |||||||||||||
Other underwriting, policy acquisition and operating expenses | 50,050 | 0 | 0 | |||||||||||||
Net premiums written | 202,697 | 0 | 0 | |||||||||||||
Lloyds Syndicate [Member] | ||||||||||||||||
Supplementary Insurance Information, by Segment [Line Items] | ||||||||||||||||
Net premiums earned | 12,458 | 0 | 0 | |||||||||||||
Net investment income | 410 | [1] | 0 | [1] | 0 | [1] | ||||||||||
Losses and loss adjustment expenses incurred related to current year, net of reinsurance | 8,438 | 0 | 0 | |||||||||||||
Losses and loss adjustment expenses incurred related to prior year, net of reinsurance | 0 | 0 | 0 | |||||||||||||
Paid losses and loss adjustment expenses, net of reinsurance | 404 | 0 | 0 | |||||||||||||
Underwriting, policy acquisition and operating expenses: | 3,165 | 0 | 0 | |||||||||||||
Other underwriting, policy acquisition and operating expenses | 6,370 | 0 | 0 | |||||||||||||
Net premiums written | 32,106 | 0 | 0 | |||||||||||||
Corporate Segment [Member] | ||||||||||||||||
Supplementary Insurance Information, by Segment [Line Items] | ||||||||||||||||
Net investment income | 125,147 | [1] | 129,265 | [1] | 136,094 | [1] | ||||||||||
Other underwriting, policy acquisition and operating expenses | $8,768 | $15,748 | $10,389 | |||||||||||||
[1] | Assets are not allocated to segments because investments and assets are not managed at the segment level, with the exceptionof the FAL investments held at our Lloyd's Syndicate segment. | |||||||||||||||
[2] | Includes Inter-segment eliminations. |
Schedule_IV_Reinsurance_Detail
Schedule IV - Reinsurance (Details) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Property and Liability | ||||||
Premiums earned | $755,623 | [1] | $568,629 | [1] | $558,200 | [1] |
Premiums ceded | -68,879 | [1] | -41,514 | [1] | -7,652 | [1] |
Premiums assumed | 12,987 | [1] | 804 | [1] | 116 | [1] |
Net premiums earned | $699,731 | [1] | $527,919 | [1] | $550,664 | [1] |
Percentage of amount assumed to net | 1.86% | [1] | 0.15% | [1] | 0.02% | [1] |
[1] | All of ProAssurance’s premiums are related to property and liability coverages. |