Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 31, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | PROASSURANCE CORP | |
Entity Central Index Key | 1,127,703 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 53,143,027 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Investments | ||
Fixed maturities, available for sale, at fair value; amortized cost, $2,769,432 and $3,055,477, respectively | $ 2,826,179 | $ 3,145,027 |
Equity securities, trading, at fair value; cost, $334,036 and $283,107, respectively | 317,886 | 314,482 |
Short-term investments | 158,057 | 131,259 |
Business owned life insurance | 56,748 | 56,381 |
Investment in unconsolidated subsidiaries | 298,375 | 276,501 |
Other investments, $29,480 and $28,958 at fair value, respectively, otherwise at cost or amortized cost | 91,410 | 86,057 |
Total Investments | 3,748,655 | 4,009,707 |
Cash and cash equivalents | 201,342 | 197,040 |
Premiums receivable | 239,907 | 202,528 |
Receivable from reinsurers on paid losses and loss adjustment expenses | 6,807 | 6,494 |
Receivable from reinsurers on unpaid losses and loss adjustment expenses | 240,239 | 237,966 |
Prepaid reinsurance premiums | 36,476 | 32,115 |
Deferred policy acquisition costs | 47,662 | 38,790 |
Deferred tax asset, net | 7,745 | 0 |
Real estate, net | 38,704 | 39,799 |
Intangible assets | 94,530 | 100,733 |
Goodwill | 210,725 | 210,725 |
Other assets | 90,212 | 93,263 |
Total Assets | 4,963,004 | 5,169,160 |
Policy liabilities and accruals | ||
Reserve for losses and loss adjustment expenses | 2,022,261 | 2,058,266 |
Unearned premiums | 401,996 | 345,828 |
Reinsurance premiums payable | 23,369 | 17,451 |
Total Policy Liabilities | 2,447,626 | 2,421,545 |
Deferred tax liability, net | 0 | 18,818 |
Other liabilities | 158,588 | 320,853 |
Long-term debt | 350,000 | 250,000 |
Total Liabilities | 2,956,214 | 3,011,216 |
Shareholders’ Equity | ||
Common shares, par value $0.01 per share, 100,000,000 shares authorized, 62,498,192 and 62,297,214 shares issued, respectively | 625 | 623 |
Additional paid-in capital | 364,877 | 359,577 |
Accumulated other comprehensive income (loss), net of deferred tax expense (benefit) of $19,051 and $31,342, respectively | 36,096 | 58,204 |
Retained earnings | 2,022,534 | 1,991,704 |
Treasury shares, at cost, 9,348,376 shares and 5,763,388 shares, respectively | (417,342) | (252,164) |
Total Shareholders’ Equity | 2,006,790 | 2,157,944 |
Total Liabilities and Shareholders’ Equity | $ 4,963,004 | $ 5,169,160 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Fixed maturities, available for sale, at fair value; amortized cost | $ 2,769,432 | $ 3,055,477 |
Equity securities, trading, cost | 334,470 | 283,107 |
Other investments, portion carried at fair value | $ 29,480 | $ 28,958 |
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 | 62,498,192 | 62,297,214 |
Deferred tax expense (benefit) on accumulated other comprehensive income (loss) | $ 19,051 | $ 31,342 |
Treasury shares, number of shares | 9,348,376 | 5,763,388 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Changes in Capital - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Increase (Decrease) in Stockholders' Equity: | ||||
Beginning Balance | $ 2,157,944 | $ 2,394,414 | ||
Common shares reacquired | (165,178) | (167,242) | ||
Common shares issued for compensation | 2,071 | 2,908 | ||
Share-based compensation | $ 2,700 | $ 2,400 | 7,638 | 8,022 |
Net effect of restricted and performance shares issued and stock options exercised | (4,407) | (2,814) | ||
Dividends to shareholders | (50,418) | (52,873) | ||
Other comprehensive income (loss) | (22,108) | 7,346 | ||
Net income | 10,276 | 34,778 | 81,248 | 131,451 |
Ending Balance | 2,006,790 | 2,321,212 | 2,006,790 | 2,321,212 |
Common Stock | ||||
Increase (Decrease) in Stockholders' Equity: | ||||
Beginning Balance | 623 | 621 | ||
Net effect of restricted and performance shares issued and stock options exercised | 2 | 2 | ||
Ending Balance | 625 | 623 | 625 | 623 |
Additional Paid-in Capital | ||||
Increase (Decrease) in Stockholders' Equity: | ||||
Beginning Balance | 359,577 | 349,894 | ||
Common shares issued for compensation | 2,071 | 2,679 | ||
Share-based compensation | 7,638 | 8,022 | ||
Net effect of restricted and performance shares issued and stock options exercised | (4,409) | (2,816) | ||
Ending Balance | 364,877 | 357,779 | 364,877 | 357,779 |
Accumulated Other Comprehensive Income (Loss) | ||||
Increase (Decrease) in Stockholders' Equity: | ||||
Beginning Balance | 58,204 | 59,661 | ||
Other comprehensive income (loss) | (22,108) | 7,346 | ||
Ending Balance | 36,096 | 67,007 | 36,096 | 67,007 |
Retained Earnings | ||||
Increase (Decrease) in Stockholders' Equity: | ||||
Beginning Balance | 1,991,704 | 2,015,603 | ||
Dividends to shareholders | (50,418) | (52,873) | ||
Net income | 81,248 | 131,451 | ||
Ending Balance | 2,022,534 | 2,094,181 | 2,022,534 | 2,094,181 |
Treasury Stock | ||||
Increase (Decrease) in Stockholders' Equity: | ||||
Beginning Balance | (252,164) | (31,365) | ||
Common shares reacquired | (165,178) | (167,242) | ||
Common shares issued for compensation | 229 | |||
Ending Balance | $ (417,342) | $ (198,378) | $ (417,342) | $ (198,378) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenues | ||||
Net premiums earned | $ 182,085 | $ 177,028 | $ 529,277 | $ 525,061 |
Net investment income | 26,942 | 32,830 | 82,201 | 92,788 |
Equity in earnings (loss) of unconsolidated subsidiaries | (221) | 298 | 3,821 | 2,767 |
Net realized investment gains (losses): | ||||
Other-than-temporary impairment (OTTI) losses | (3,795) | (1,425) | (8,275) | (1,475) |
Portion of OTTI losses recognized in other comprehensive income before taxes | 385 | 268 | 2,174 | 268 |
Net impairment losses recognized in earnings | (3,410) | (1,157) | (6,101) | (1,207) |
Other net realized investment gains (losses) | (33,222) | (6,974) | (29,519) | 8,866 |
Total net realized investment gains (losses) | (36,632) | (8,131) | (35,620) | 7,659 |
Other income | 2,759 | 1,808 | 6,504 | 6,055 |
Total revenues | 174,933 | 203,833 | 586,183 | 634,330 |
Expenses | ||||
Losses and loss adjustment expenses | 119,824 | 106,486 | 350,739 | 306,591 |
Reinsurance recoveries | (11,018) | (7,264) | (32,855) | (18,948) |
Net losses and loss adjustment expenses | 108,806 | 99,222 | 317,884 | 287,643 |
Underwriting, policy acquisition and operating expenses | 53,025 | 54,185 | 157,908 | 158,856 |
Segregated portfolio cells dividend expense (income) | (1,933) | (483) | 1,481 | 2,355 |
Interest expense | 3,637 | 3,606 | 10,978 | 10,697 |
Total expenses | 163,535 | 156,530 | 488,251 | 459,551 |
Income before income taxes | 11,398 | 47,303 | 97,932 | 174,779 |
Provision for income taxes | ||||
Current expense (benefit) | 17,277 | 15,591 | 31,406 | 37,884 |
Deferred expense (benefit) | (16,155) | (3,066) | (14,722) | 5,444 |
Total income tax expense (benefit) | 1,122 | 12,525 | 16,684 | 43,328 |
Net income | 10,276 | 34,778 | 81,248 | 131,451 |
Other comprehensive income (loss), after tax, net of reclassification adjustments | (4,953) | (14,646) | (22,108) | 7,346 |
Comprehensive income | $ 5,323 | $ 20,132 | $ 59,140 | $ 138,797 |
Earnings per share: | ||||
Basic (USD per share) | $ 0.19 | $ 0.59 | $ 1.47 | $ 2.20 |
Diluted (USD per share) | $ 0.19 | $ 0.59 | $ 1.46 | $ 2.19 |
Weighted average number of common shares outstanding: | ||||
Basic (in shares) | 54,007 | 58,676 | 55,339 | 59,807 |
Diluted (in shares) | 54,232 | 58,931 | 55,554 | 60,047 |
Cash dividends declared per common share (USD per share) | $ 0.31 | $ 0.3 | $ 0.93 | $ 0.9 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Operating Activities | ||
Net income | $ 81,248 | $ 131,451 |
Depreciation and amortization, net of accretion | 28,249 | 29,800 |
Net realized investment (gains) losses | 35,620 | (7,659) |
Share-based compensation | 7,638 | 8,022 |
Deferred income taxes | (14,722) | 5,444 |
Policy acquisition costs, net amortization (net deferral) | (8,872) | (5,249) |
Equity in earnings of unconsolidated subsidiaries, excluding income distributions received | (4,661) | 1,246 |
Other | (823) | (740) |
Other changes in assets and liabilities, excluding effect of business combinations: | ||
Premiums receivable | (37,379) | (42,406) |
Reinsurance related assets and liabilities | (1,029) | (19,829) |
Other assets | 5,191 | 33,823 |
Reserve for losses and loss adjustment expenses | (36,005) | (78,558) |
Unearned premiums | 56,168 | 55,565 |
Other liabilities | (5,100) | (9,827) |
Net cash provided (used) by operating activities | 105,523 | 101,083 |
Purchases of: | ||
Fixed maturities, available for sale | (466,248) | (511,894) |
Equity securities, trading | (211,437) | (85,986) |
Other investments | (25,360) | (25,109) |
Funding of qualified affordable housing tax credit limited partnerships | (903) | (8,439) |
Investment in unconsolidated subsidiaries | (43,142) | (30,394) |
Proceeds from sales or maturities of: | ||
Fixed maturities, available for sale | 738,377 | 486,702 |
Equity securities, trading | 172,502 | 102,765 |
Other investments | 18,369 | 15,074 |
Distributions from unconsolidated subsidiaries | 23,390 | 3,850 |
Net sales or maturities (purchases) of short-term investments | (26,861) | 177,013 |
Cash received in acquisitions | 0 | 35,013 |
Unsettled security transactions, net change | (473) | (127) |
(Increase) decrease in restricted cash | 0 | 78,000 |
Purchases of capital assets | (6,382) | (2,139) |
Other | (1,514) | 5,606 |
Net cash provided (used) by investing activities | 170,318 | 239,935 |
Financing Activities | ||
Borrowing under revolving credit agreement | 100,000 | 0 |
Repurchase of common stock | (165,178) | (163,146) |
Dividends to shareholders | (201,158) | (53,820) |
Other | (5,203) | (5,430) |
Net cash provided (used) by financing activities | (271,539) | (222,396) |
Increase (decrease) in cash and cash equivalents | 4,302 | 118,622 |
Cash and cash equivalents at beginning of period | 197,040 | 129,383 |
Cash and cash equivalents at end of period | 201,342 | 248,005 |
Significant non-cash transactions | ||
Deposit transferred as consideration for acquisition | 0 | 205,244 |
Dividends declared and not yet paid | $ 16,454 | $ 17,318 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of ProAssurance Corporation and its consolidated subsidiaries (ProAssurance, PRA or the Company). The financial statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation, consisting of normal recurring adjustments, have been included. ProAssurance’s results for the nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015 . The accompanying Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes contained in ProAssurance’s December 31, 2014 report on Form 10-K. In connection with its preparation of the Condensed Consolidated Financial Statements, ProAssurance evaluated events that occurred subsequent to September 30, 2015 for recognition or disclosure in its financial statements and notes to financial statements. ProAssurance operates in four reportable segments as follows: Specialty P&C , Workers' Compensation, Lloyd's Syndicate, and Corporate. For more information on the nature of products and services provided and for financial information by segment, refer to Note 12 of the Notes to Condensed Consolidated Financial Statements. Other Liabilities Other liabilities consisted of the following: (In millions) September 30, 2015 December 31, 2014 SPC dividends payable $ 16.7 $ 15.8 Unpaid dividends 16.5 167.7 All other 125.4 137.4 Total other liabilities $ 158.6 $ 320.9 SPC dividends payable are the cumulative undistributed earnings contractually payable to the external preferred shareholders of SPC s operated by ProAssurance's Cayman Islands subsidiary, Eastern Re. Unpaid dividends represents common stock dividends declared by ProAssurance's Board of Directors that had not yet been paid. Unpaid dividends at December 31, 2014 reflect a special dividend declared in late 2014 that was paid in January 2015. Accounting Changes 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 regarding 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 not reported as discontinued operations. ProAssurance adopted the guidance as of January 1, 2015. Adoption of the guidance had no effect on ProAssurance’s results of operations or financial position. Disclosures for Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent) Effective for fiscal years beginning after December 15, 2015, the FASB issued guidance which removed the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The guidance also revised disclosure requirements for investments measured or eligible to be measured at fair value using the net asset value per share practical expedient. ProAssurance adopted the guidance as of June 30, 2015 as early adoption is permitted. Adoption of the guidance had no effect on ProAssurance's results of operations or financial position as it affected disclosures only. Accounting Changes Not Yet Adopted 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, 2017, 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, 2018. 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. Simplifying the Presentation of Debt Issuance Costs Effective for fiscal years beginning after December 15, 2015, the FASB issued guidance related to the presentation of debt issuance costs. The new guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. Related guidance issued by the SEC permits issuance costs associated with line-of-credit arrangements to be presented as an asset and subsequently amortized proportionally over the term of the arrangement. ProAssurance plans to adopt the guidance beginning January 1, 2016. Adoption of the guidance is not expected to have a material effect on ProAssurance’s results of operations or financial position. Amendments to the Consolidation Analysis Effective for fiscal years beginning after December 15, 2015, the FASB issued additional guidance regarding the consolidation of legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions). The new standard modifies the evaluation of whether or not entities are VIE s and the consolidation analysis of entities involved with VIE s, particularly those having fee arrangements and related party relationships. ProAssurance is in the process of evaluating the effect, if any, of the new guidance on its results of operations and financial position and plans to adopt the guidance beginning January 1, 2016. Adoption of the guidance is not expected to have a material effect on ProAssurance’s results of operations or financial position. Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement Effective for fiscal years beginning after December 15, 2015, the FASB issued additional guidance regarding accounting for cloud computing arrangements. Under the new guidance, customers participating in cloud computing arrangements that include a software license should account for the software license element of the arrangement consistent with the acquisition of other software licenses. Customers should account for cloud computing arrangements that do not include a software license as a service contract, following existing guidance for service contracts. ProAssurance is in the process of evaluating the effect that the use of the new method would have on its results of operations and financial position and plans to adopt the guidance beginning January 1, 2016. Adoption of the guidance is not expected to have a material effect on ProAssurance’s results of operations or financial position. Disclosures about Short-Duration Contracts Effective for fiscal years beginning after December 15, 2015 and interim periods within fiscal years beginning after December 15, 2016, the FASB issued guidance that requires insurance entities that issue short-duration contracts to provide detailed disclosures relative to the reserve for losses and loss adjustment expenses in annual reporting periods and a roll-forward of the reserve for losses and loss adjustment expenses in interim reporting periods. The guidance also requires disclosures regarding significant changes in the methodologies and assumptions used to calculate the reserve for losses and loss adjustment expenses, including reasons for and the effects of such changes. ProAssurance plans to adopt the guidance beginning January 1, 2016. Adoption of the guidance is not expected to have a material effect on ProAssurance's results of operations or financial position as it affects disclosures only. Simplifying the Accounting for Measurement-Period Adjustments Effective for fiscal years beginning after December 15, 2015 and interim periods within those fiscal years, the FASB issued guidance that requires an acquirer to recognize adjustments to estimated amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. An acquirer must also record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the estimated amounts, calculated as if the accounting had been completed at the acquisition date. The amendments also require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the estimated amounts had been recognized as of the acquisition date. ProAssurance plans to adopt the guidance beginning January 1, 2016. Adoption of the guidance is not expected to have a material effect on ProAssurance’s results of operations or financial position. |
Fair Value Measurement
Fair Value Measurement | 9 Months Ended |
Sep. 30, 2015 | |
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 September 30, 2015 and December 31, 2014 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. September 30, 2015 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 $ — $ 111,919 $ — $ 111,919 U.S. Government-sponsored enterprise obligations — 26,000 — 26,000 State and municipal bonds — 967,786 — 967,786 Corporate debt, multiple observable inputs 2,329 1,302,377 — 1,304,706 Corporate debt, limited observable inputs — — 7,820 7,820 Residential mortgage-backed securities — 254,878 — 254,878 Agency commercial mortgage-backed securities — 11,204 — 11,204 Other commercial mortgage-backed securities — 39,134 — 39,134 Other asset-backed securities — 96,464 6,268 102,732 Equity securities Financial 66,614 — — 66,614 Utilities/Energy 41,686 — — 41,686 Consumer oriented 55,320 — 23 55,343 Industrial 50,447 — — 50,447 Bond funds 75,688 — — 75,688 All other 15,071 13,037 — 28,108 Short-term investments 154,858 3,199 — 158,057 Other investments 2,769 26,194 517 29,480 Total assets categorized within the fair value hierarchy $ 464,782 $ 2,852,192 $ 14,628 3,331,602 LP/LLC interests carried at NAV which approximates fair value. These interests, reported as a part of Investment in unconsolidated subsidiaries, are not categorized within the fair value hierarchy. 156,850 Total assets at fair value $ 3,488,452 December 31, 2014 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 — — 13,081 13,081 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 Other investments 6,050 22,908 — 28,958 Total assets categorized within the fair value hierarchy $ 451,731 $ 3,145,120 $ 22,875 3,619,726 LP/LLC interests carried at NAV which approximates fair value. These interests, reported as a part of Investment in unconsolidated subsidiaries, are not categorized within the fair value hierarchy. 133,250 Total assets at fair value $ 3,752,976 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. Any value that did not appear reasonable was discussed with the service that provided the value and would have been adjusted, if necessary. No such adjustments were necessary in 2015 or 2014 . 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 based on an average of broker quotes for the loans in question, if available. If quotes were not available, the loans were valued based on quoted prices for comparable loans or, if the loan was newly issued, by comparison to similar seasoned issues. Broker quotes were compared to actual trade prices on a regular basis to permit assessment of the reliability of the quotes; unreliable quotes were not considered in quoted averages. 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. Equity securities were securities not traded on an exchange on the valuation date. The securities were valued using the most recently available quotes for the securities. 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. • 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. 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 September 30, 2015 , 93% of the securities were rated; the average rating was A- . At December 31, 2014 , 80% of the securities were rated; the average rating 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. Equity securities and Other investments consisted of common stock and convertible securities for which limited observable inputs were available at September 30, 2015 . The securities were valued internally based on expected cash flows, including the expected final recovery, discounted at a yield that considered the lack of liquidity and the financial status of the issuer. Quantitative Information Regarding Level 3 Valuations Fair Value at (In millions) September 30, 2015 December 31, 2014 Valuation Technique Unobservable Input Range Assets: State and municipal bonds $— $5.0 Market Comparable Comparability Adjustment 0% - 10% (5%) Discounted Cash Flows Comparability Adjustment 0% - 10% (5%) Corporate debt with limited observable inputs $7.8 $13.1 Market Comparable Comparability Adjustment 0% - 5% (2.5%) Discounted Cash Flows Comparability Adjustment 0% - 5% (2.5%) Other asset-backed securities $6.3 $4.8 Market Comparable Comparability Adjustment 0% - 5% (2.5%) Discounted Cash Flows Comparability Adjustment 0% - 5% (2.5%) Equity securities and Other investments $0.5 $— Discounted Cash Flows Comparability Adjustment 0% - 10% (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. September 30, 2015 Level 3 Fair Value Measurements – Assets (In thousands) U.S. Government-sponsored Enterprise Obligations State and Municipal Bonds Corporate Debt Asset-backed Securities Equity Securities and Other Investments Total Balance June 30, 2015 $ — $ — $ 8,468 $ 4,777 $ 1,036 $ 14,281 Total gains (losses) realized and unrealized: Included in earnings, as a part of: Net investment income — — — — — — Net realized investment gains (losses) — — (311 ) — — (311 ) Included in other comprehensive income — — 300 (9 ) (53 ) 238 Purchases — — — 1,500 584 2,084 Sales — — (648 ) — — (648 ) Transfers in — — 11 — — 11 Transfers out — — — — (918 ) (918 ) Balance September 30, 2015 $ — $ — $ 7,820 $ 6,268 $ 540 $ 14,628 Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end $ — $ — $ — $ — $ (109 ) $ (109 ) September 30, 2015 Level 3 Fair Value Measurements – Assets (In thousands) U.S. Government-sponsored Enterprise Obligations State and Municipal Bonds Corporate Debt Asset-backed Securities Equity Securities and Other Investments Total Balance December 31, 2014 $ — $ 5,025 $ 13,081 $ 4,769 $ — $ 22,875 Total gains (losses) realized and unrealized: Included in earnings, as a part of: Net investment income — — 17 — — 17 Net realized investment gains (losses) — — (309 ) — — (309 ) Included in other comprehensive income — (459 ) 38 (1 ) (133 ) (555 ) Purchases — — 1,515 1,500 1,700 4,715 Sales — — (1,484 ) — — (1,484 ) Transfers in — — 11 — — 11 Transfers out — (4,566 ) (5,049 ) — (918 ) (10,533 ) Balance September 30, 2015 $ — $ — $ 7,820 $ 6,268 $ 540 $ 14,628 Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end $ — $ — $ — $ — $ (109 ) $ (109 ) September 30, 2014 Level 3 Fair Value Measurements – Assets (In thousands) U.S. Government-sponsored Enterprise Obligations State and Municipal Bonds Corporate Debt Asset-backed Securities Equity Securities and Other Investments Total Balance June 30, 2014 $ — $ 7,148 $ 14,544 $ 5,960 $ — $ 27,652 Total gains (losses) realized and unrealized: Included in earnings, as a part of: Net investment income — (4 ) 16 — — 12 Included in other comprehensive income — (76 ) 35 (6 ) — (47 ) Purchases — — — — — — Sales — (1,474 ) (1,160 ) — — (2,634 ) Transfers out — — — (1,181 ) — (1,181 ) Balance September 30, 2014 $ — $ 5,594 $ 13,435 $ 4,773 $ — $ 23,802 Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end $ — $ — $ — $ — $ — $ — September 30, 2014 Level 3 Fair Value Measurements – Assets (In thousands) U.S. Government-sponsored Enterprise Obligations State and Municipal Bonds Corporate Debt Asset-backed Securities Equity Securities and Other Investments Total Balance December 31, 2013 $ — $ 7,338 $ 14,176 $ 6,814 $ — $ 28,328 Total gains (losses) realized and unrealized: Included in earnings, as a part of: Net investment income — (10 ) 48 — — 38 Net realized investment gains (losses) — (95 ) 3 — — (92 ) Included in other comprehensive income 1 (34 ) 702 63 — 732 Purchases 1,000 1,861 2,000 3,340 — 8,201 Sales — (1,731 ) (1,469 ) (61 ) — (3,261 ) Transfers in — 2,119 — 305 — 2,424 Transfers out (1,001 ) (3,854 ) (2,025 ) (5,688 ) — (12,568 ) Balance September 30, 2014 $ — $ 5,594 $ 13,435 $ 4,773 $ — $ 23,802 Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end $ — $ — $ — $ — $ — $ — Transfers There were no transfers between the Level 1 and Level 2 categories during the three and nine months ended September 30, 2015 or 2014 . Transfers shown in the preceding Level 3 tables were as of the end of the period and were to or from Level 2. All transfers during the three and nine months ended September 30, 2015 and 2014 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. Fair Values Not Categorized Investments in unconsolidated subsidiaries at both September 30, 2015 and December 31, 2014 included interests in investment fund LP s/ LLC s that measure fund assets at fair value on a recurring basis and that provide a NAV for the interest. The carrying value of these interests is based on the NAV provided, and was considered to approximate the fair value of the interests. In accordance with GAAP , the fair value of these investments was not classified within the fair value hierarchy. Additional information regarding these investments is as follows: Unfunded Fair Value (In thousands) September 30, September 30, December 31, Investments in LPs/LLCs: Private debt funds (1) $20,023 $ 44,595 $ 37,296 Long equity fund (2) None 6,521 6,747 Long/short equity funds (3) None 30,099 25,301 Non-public equity funds (4) $52,125 63,309 51,811 Multi-strategy fund of funds (5) None 8,372 8,271 Structured credit fund (6) None 3,954 3,824 $ 156,850 $ 133,250 (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 LP s over an anticipated time frame that spans from 3 to 8 years. (2) The 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 capital redemptions subject to 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 LP s. 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 LP s/ LLC s without special consent from the LP / LLC . 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. September 30, 2015 December 31, 2014 (In thousands) Carrying Fair Carrying Fair Financial assets: BOLI $ 56,748 $ 56,748 $ 56,381 $ 56,381 Other investments $ 61,930 $ 62,573 $ 57,099 $ 57,994 Other assets $ 22,755 $ 22,739 $ 22,440 $ 22,399 Financial liabilities: Senior notes due 2023 $ 250,000 $ 269,198 $ 250,000 $ 276,503 Revolving credit agreement $ 100,000 $ 100,000 $ — $ — Other liabilities $ 14,292 $ 14,288 $ 14,656 $ 14,645 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 LP s/ LLC s accounted for using the cost method, investments in 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 equity value of the interest provided by the LP / LLC managers for the most recent quarter, which approximates the fair value of the interest. 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 NAV s provided by the underlying funds. 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 | 9 Months Ended |
Sep. 30, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments Available-for-sale securities at September 30, 2015 and December 31, 2014 included the following: September 30, 2015 (In thousands) Amortized Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Fixed maturities U.S. Treasury obligations $ 109,416 $ 2,536 $ 33 $ 111,919 U.S. Government-sponsored enterprise obligations 24,748 1,257 5 26,000 State and municipal bonds 929,645 39,272 1,131 967,786 Corporate debt 1,306,358 33,448 27,280 1,312,526 Residential mortgage-backed securities 247,601 7,830 553 254,878 Agency commercial mortgage-backed securities 10,945 279 20 11,204 Other commercial mortgage-backed securities 38,595 601 62 39,134 Other asset-backed securities 102,124 625 17 102,732 $ 2,769,432 $ 85,848 $ 29,101 $ 2,826,179 December 31, 2014 (In thousands) Amortized Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value 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 The recorded cost basis and estimated fair value of available-for-sale fixed maturities at September 30, 2015 , 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 Fixed maturities, available for sale U.S. Treasury obligations $ 109,416 $ 14,796 $ 82,117 $ 11,729 $ 3,277 $ 111,919 U.S. Government-sponsored enterprise obligations 24,748 2,322 16,109 7,427 142 26,000 State and municipal bonds 929,645 48,062 327,284 444,040 148,400 967,786 Corporate debt 1,306,358 87,645 718,812 472,990 33,079 1,312,526 Residential mortgage-backed securities 247,601 254,878 Agency commercial mortgage-backed securities 10,945 11,204 Other commercial mortgage-backed securities 38,595 39,134 Other asset-backed securities 102,124 102,732 $ 2,769,432 $ 2,826,179 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 September 30, 2015 . Cash and securities with a carrying value of $49.3 million at September 30, 2015 were on deposit with various state insurance departments to meet regulatory requirements. ProAssurance also held securities with a carrying value of $126.6 million at September 30, 2015 that are pledged as collateral security for advances under the Revolving Credit Agreement (see Note 8 of the Notes to Condensed Consolidated Financial Statements for additional detail on the Revolving Credit Agreement ). 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 FAL . ProAssurance investments at September 30, 2015 included fixed maturities with a fair value of $89.3 million and short term investments with a fair value of approximately $0.4 million on deposit with Lloyd's in order to satisfy these FAL requirements. BOLI ProAssurance holds BOLI policies that are carried at the current cash surrender value of the policies (original cost $33 million ). All insured individuals were management employees at the time the policies were acquired. 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 September 30, 2015 and December 31, 2014 were comprised as follows: (In thousands) September 30, December 31, Investments in LPs/LLCs, at cost $ 58,381 $ 53,258 Convertible securities, at fair value 29,480 28,958 Other, principally FHLB capital stock, at cost 3,549 3,841 $ 91,410 $ 86,057 Investments in convertible 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 or losses during the period of change. Interest on convertible securities is recorded on an accrual basis based on contractual interest rates and is included in Net investment income. 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: September 30, 2015 Carrying Value (In thousands) Percentage September 30, December 31, Investment in LPs/LLCs: Qualified affordable housing tax credit partnerships See below $ 124,109 $ 133,143 Other tax credit partnerships See below 4,306 — All other LPs/LLCs < 25% 169,960 143,358 $ 298,375 $ 276,501 Qualified affordable housing tax credit partnership interests held by ProAssurance generate investment returns by providing tax benefits to fund investors in the form of tax credits and project operating losses. The carrying value of these investments reflects our total commitments (both funded and unfunded) to the partnerships. ProAssurance's ownership percentage relative to two of the tax credit partnership interests is almost 100% ; these interests had a carrying value of $54.6 million at September 30, 2015 . ProAssurance's ownership percentage relative to the remaining tax credit partnership interests is less than 20% ; these interests had a carrying value of $69.5 million at September 30, 2015 . ProAssurance does not have the ability to exert control over the partnerships; all are accounted for using the equity method. Other tax credit partnerships are comprised entirely of historic tax credits. The historic tax credits generate investment returns by providing benefits to fund investors in the form of tax credits, tax deductible project operating losses and positive cash flows. ProAssurance's ownership percentage relative to the tax credit partnerships is almost 100%. ProAssurance does not have the ability to exert control over the partnerships; the interests are accounted for using the equity method. As discussed in additional detail in Note 2 of the Notes to Condensed Consolidated Financial Statements, ProAssurance holds interests in certain LP s/ LLC s that are investment funds which measure fund assets at fair value on a recurring basis and the fund managers provide a NAV for the interest. The carrying value of these interests is based on the NAV provided, and is considered to approximate the fair value of the interests; such interests totaled $156.9 million at September 30, 2015 and $133.3 million at December 31, 2014 . ProAssurance also holds interests in other LP s/ LLC s where the carrying value is not considered to approximate the estimated fair value of the interest; such interests totaled $13.1 million at September 30, 2015 and $10.1 million at December 31, 2014 . Investments Held in a Loss Position The following tables provide summarized information with respect to investments held in an unrealized loss position at September 30, 2015 and December 31, 2014 , including the length of time the investment had been held in a continuous unrealized loss position. September 30, 2015 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 $ 8,791 $ 32 $ 2,931 $ 8 $ 5,860 $ 24 U.S. Government-sponsored enterprise obligations 1,463 6 1,463 6 — — State and municipal bonds 48,882 1,132 44,184 948 4,698 184 Corporate debt 471,107 27,280 400,127 15,316 70,980 11,964 Residential mortgage-backed securities 71,621 553 62,177 418 9,444 135 Agency commercial mortgage-backed securities 425 20 — — 425 20 Other commercial mortgage-backed securities 8,428 61 5,084 43 3,344 18 Other asset-backed securities 24,421 17 16,458 9 7,963 8 $ 635,138 $ 29,101 $ 532,424 $ 16,748 $ 102,714 $ 12,353 Other investments Investments in LPs/LLCs carried at cost $ 33,534 $ 2,242 $ 33,534 $ 2,242 $ — $ — December 31, 2014 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 As of September 30, 2015 , excluding U.S. Government backed securities, there were 546 debt securities ( 20.2% of all available-for-sale fixed maturity securities held) in an unrealized loss position representing 404 issuers. The greatest and second greatest unrealized loss position among those securities were approximately $1.5 million and $1.3 million , respectively. The securities were evaluated for impairment as of September 30, 2015 . 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 approximated $1.7 million and $0.7 million , respectively. The securities were evaluated for impairment as of December 31, 2014 . 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 of the Notes to Consolidated Financial Statements included in ProAssurance's December 31, 2014 Form 10-K. Fixed maturity securities held in an unrealized loss position at September 30, 2015 , 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 September 30, 2015 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: Three Months Ended Nine Months Ended (In thousands) 2015 2014 2015 2014 Fixed maturities $ 24,127 $ 28,442 $ 74,110 $ 85,402 Equities 3,506 2,661 9,974 7,479 Short-term and Other investments 515 2,793 1,417 4,723 BOLI 658 646 1,589 1,544 Investment fees and expenses (1,864 ) (1,712 ) (4,889 ) (6,360 ) Net investment income $ 26,942 $ 32,830 $ 82,201 $ 92,788 Equity in Earnings (Loss) from Unconsolidated Subsidiaries Equity in earnings (loss) from unconsolidated subsidiaries included losses from qualified affordable housing project tax credit investments of $2.4 million and $7.6 million for the three- and nine-month periods ended September 30, 2015 , respectively, and $2.5 million and $6.5 million for the three- and nine-month periods ended September 30, 2014 , respectively. The losses recorded reflect ProAssurance's allocable portion of partnership operating losses. ProAssurance recognized tax credits related to these qualified affordable housing investments that totaled $4.6 million and $13.9 million for the three- and nine-month periods ended September 30, 2015 , respectively and $4.6 million and $13.4 million for the three- and nine-month periods ended September 30, 2014 , respectively. Tax credits recognized reduced income tax expense in the respective periods. Net Realized Investment Gains (Losses) Realized investment gains and losses are recognized on the specific identification basis. The following table provides detailed information regarding net realized investment gains (losses): Three Months Ended September 30 Nine Months Ended September 30 (In thousands) 2015 2014 2015 2014 Total OTTI losses: State and municipal bonds $ — $ — $ — $ (50 ) Corporate debt (1,925 ) (1,425 ) (6,405 ) (1,425 ) Other investments (1,870 ) — (1,870 ) — Portion recognized in OCI: Corporate debt 385 268 2,174 268 Net impairments recognized in earnings $ (3,410 ) $ (1,157 ) $ (6,101 ) $ (1,207 ) Gross realized gains, available-for-sale securities 2,739 736 10,379 3,711 Gross realized (losses), available-for-sale securities (2,548 ) (52 ) (4,613 ) (371 ) Net realized gains (losses), trading securities 402 3,227 12,594 21,830 Net realized gains (losses), Other investments (361 ) 55 357 321 Change in unrealized holding gains (losses), trading securities (32,621 ) (10,402 ) (47,513 ) (17,906 ) Change in unrealized holding gains (losses), convertible securities, carried at fair value (971 ) (538 ) (1,669 ) 1,281 Other 138 — 946 — Net realized investment gains (losses) $ (36,632 ) $ (8,131 ) $ (35,620 ) $ 7,659 ProAssurance recognized impairments in income totaling $3.4 million and $6.1 million for the three- and nine-month periods ended September 30, 2015 , respectively. Impairments recognized in income related to corporate debt securities for the 2015 three-month period primarily consisted of an impairment associated with bonds ProAssurance intends to sell but also included two other credit-related impairments, one a preferred stock from a consumer-oriented issuer and the other a bond from an energy sector issuer. ProAssurance also recognized non-credit impairments for the three- and nine-month periods ended September 30, 2015 , respectively, related to the latter two securities as the fair value of the impaired securities was less than the future cash flows expected to be received from the securities. Impairments recognized for the 2015 nine-month period further included credit-related impairments of corporate debt securities totaling $2.7 million recorded related to high-yield securities from three other issuers in the energy sector, and non-credit impairments related to these same securities of $1.8 million . ProAssurance also recognized a $1.9 million impairment related to an investment fund that is accounted for using the cost method. The fund is focused on the energy sector and securities held have declined in value. An OTTI was recognized to reduce the carrying value of the investment to an amount which Management believes will be recoverable on the investment. The holding loss recognized related to our equity trading securities of $32.6 million for the 2015 three-month period primarily reflected unfavorable equity market performance during the third quarter 2015. 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 OTTI was recorded in OCI . Three Months Ended September 30 Nine Months Ended September 30 (In thousands) 2015 2014 2015 2014 Balance beginning of period $ 2,630 $ 83 $ 232 $ 83 Additional credit losses recognized during the period, related to securities for which: No OTTI has been previously recognized — 149 1,830 149 OTTI has been previously recognized 623 — 1,484 — Reductions due to: Securities sold during the period (realized) — — (293 ) — Balance September 30 $ 3,253 $ 232 $ 3,253 $ 232 Other information regarding sales and purchases of available-for-sale securities is as follows: Three Months Ended September 30 Nine Months Ended September 30 (In millions) 2015 2014 2015 2014 Proceeds from sales (exclusive of maturities and paydowns) $ 119.0 $ 24.8 $ 420.0 $ 147.3 Purchases $ 90.9 $ 146.5 $ 466.2 $ 511.9 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes ProAssurance estimates its annual effective tax rate at the end of each quarterly reporting period and uses this estimated rate to record the provision for income taxes in the interim financial statements. The provision for income taxes is different from that which would be obtained by applying the statutory Federal income tax rate to income before taxes primarily because a portion of ProAssurance’s investment income is tax-exempt, because ProAssurance utilizes tax credit benefits transferred from tax credit partnership investments, and because no tax benefit is received related to the operating loss or the U.K. tax expense associated with our Lloyd's Syndicate segment. ProAssurance had a liability for federal income taxes of $1.7 million at September 30, 2015 , carried as part of Other Liabilities. ProAssurance had a receivable for federal income taxes of $1.1 million at December 31, 2014 , carried as a part of Other Assets. The liability for unrecognized tax benefits was $0.8 million at September 30, 2015 and $0.6 million at December 31, 2014 . |
Deferred Policy Acquisition Cos
Deferred Policy Acquisition Costs | 9 Months Ended |
Sep. 30, 2015 | |
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 DPAC was $21.1 million and $60.0 million for the three and nine months ended September 30, 2015 , respectively, and $21.2 million and $62.4 million for the three and nine months ended September 30, 2014 , respectively. |
Reserve for Losses and Loss Adj
Reserve for Losses and Loss Adjustment Expenses | 9 Months Ended |
Sep. 30, 2015 | |
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. During the three and nine months ended September 30, 2015 , ProAssurance recognized favorable net loss development of $36.2 million and $104.8 million , respectively, related to prior accident years. The favorable net loss development primarily reflected reductions in the Company's estimates of claims severity related to the 2008 through 2012 accident years. For the three and nine months ended September 30, 2014 , ProAssurance recognized favorable net loss development of $42.9 million and $133.3 million , respectively, to reflect reductions in estimated claims severity related to the 2007 through 2012 accident years. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
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 in Note 1 of the Notes to Consolidated Financial Statements in ProAssurance's 2014 Form 10-K. ProAssurance has funding commitments primarily related to non-public investment entities totaling approximately $130.4 million , expected to be paid as follows: $31.3 million in 2015 , $96.0 million in 2016 and 2017 combined, $2.3 million in 2018 and 2019 combined and $0.8 million thereafter. Of these funding commitments, $13.2 million are related to qualified affordable housing project tax credit investments and are expected to be paid as follows: $11.7 million in 2015, $0.5 million in 2016 and 2017 combined, $0.3 million in 2018 and 2019 combined and $0.7 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 September 30, 2015 , ProAssurance was satisfying the FAL requirement with investment securities on deposit with Lloyd's with a carrying value of $89.7 million (see Note 3 of the Notes to Condensed Consolidated Financial Statements). ProAssurance has issued an unconditional revolving credit agreement of up to £10 million to the Premium Trust Fund of Syndicate 1729 for the purpose of providing working capital. Advances under this Syndicate Credit Agreement bear interest at 8.5% annually, and may be repaid at any time but are repayable upon demand after December 31, 2016. As of September 30, 2015 , the unused commitment under the Syndicate Credit Agreement approximated £1.5 million (approximately $2.3 million as of September 30, 2015 ). |
Long-term Debt
Long-term Debt | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt ProAssurance’s outstanding long-term debt consisted of the following: (In thousands) September 30, December 31, Senior notes due 2023, unsecured, interest at 5.3% annually $ 250,000 $ 250,000 Revolving Credit Agreement, outstanding borrowings fully secured, see Note 3, and carried at an interest rate of 0.78%. The interest rate on the borrowing is set at the time the borrowing is initiated or renewed. The current borrowing can be repaid or renewed in January 2016. If renewed, the interest rate will reset. 100,000 — $ 350,000 $ 250,000 Revolving Credit Agreement During June 2015, ProAssurance amended certain terms of its Revolving Credit Agreement to include the following: (1) The available line of credit of $200 million has been expanded to include an additional $50 million accordion feature, which if subscribed successfully, would also be available for use. (2) All borrowings are required to be repaid prior to the expiration date which has been extended to June 19, 2020 . (3) ProAssurance is required to pay a commitment fee, ranging from 12.5 to 25 basis points based on ProAssurance's credit ratings, on the average unused portion of the credit line during the term of the Revolving Credit Agreement . (4) Borrowing under the Revolving Credit Agreement may be secured or unsecured and accrues interest at a selected base rate, adjusted by a margin, which can vary from 0 to 163 basis points, based on ProAssurance's credit rating and whether the borrowing is secured or unsecured. In addition, the financial covenants were amended to replace the original minimum net worth calculation with a requirement that ProAssurance maintain a net worth, excluding AOCI , of at least $1.3 billion . Covenant Compliance There are no financial covenants associated with the Senior Notes due 2023. The Revolving Credit Agreement contains customary representations, covenants and events constituting default, and remedies for default. The Revolving Credit Agreement also defines financial covenants regarding permitted leverage ratios. ProAssurance is currently in compliance with all covenants of the Agreement. Additional Information For additional information regarding ProAssurance's long-term debt, see Note 10 of the Notes to Consolidated Financial Statements included in ProAssurance's December 31, 2014 Form 10-K. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity At September 30, 2015 and December 31, 2014 , 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. ProAssurance declared cash dividends of $0.31 per share during each of the first three quarters of 2015 totaling $50.4 million , which included the third quarter dividend of $16.5 million that was paid in October 2015 . ProAssurance declared cash dividends of $0.30 per share during each of the first three quarters of 2014 totaling $52.9 million , which included the third quarter dividend of $17.3 million that was paid in October 2014 . At September 30, 2015 , Board authorizations for the repurchase of common shares or the retirement of outstanding debt of $116.4 million remained available for use, which included a $100 million increase to the authorization approved by the Board in May 2015. ProAssurance repurchased approximately 3.6 million and 3.7 million shares during the nine months ended September 30, 2015 and 2014 at a total cost of $165.2 million and $167.2 million , respectively. Share-based compensation expense was $2.7 million and $7.6 million for the three and nine months ended September 30, 2015 , respectively, and $2.4 million and $8.0 million for the three and nine months ended September 30, 2014 , respectively. Related tax benefits were $0.9 million and $2.7 million for the three and nine months ended September 30, 2015 , respectively, and $0.8 million and $2.8 million for the three and nine months ended September 30, 2014 , respectively. ProAssurance awarded approximately 92,000 restricted share units and 106,500 base performance share units to employees in February 2015 . The fair value of each unit awarded was estimated at $42.73 , equal to the market value of a ProAssurance common share on the date of grant less the estimated present value of dividends during the vesting period. All awards are charged to expense as an increase to equity over the service period (generally the vesting period) associated with the award. Restricted share units and performance share units 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 unit once vesting requirements are met, except that units sufficient to satisfy required tax withholdings are paid in cash. The number of common shares issued for performance share units varies from 75% to 125% of base awards depending upon the degree to which stated performance objectives are achieved. ProAssurance issued approximately 28,000 and 116,000 common shares to employees in February 2015 related to restricted share units and performance share units, respectively, granted in 2012. Performance share units for the 2012 award were issued at levels ranging from 104% to 125% . ProAssurance issued approximately 28,000 common shares to employees in February 2015 as bonus compensation, as approved by the Compensation Committee of the Board. The shares issued were valued at fair value (the market price of a ProAssurance common share on the date of award). Other Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss) For the three and nine months ended September 30, 2015 and September 30, 2014 , OCI was primarily comprised of unrealized gains and losses, including non-credit impairment losses, arising during the period related to available-for-sale securities, less reclassification adjustments as shown in the table that follows, net of tax. For the nine months ended September 30, 2015 , OCI also included losses related to unrecognized changes in defined benefit plan liabilities of $1.0 million , net of tax, from the reestimation of two defined benefit plans assumed in the Eastern acquisition. Both plans are frozen as to the earning of additional benefits, but the unrecognized plan benefit liability is reestimated annually. At September 30, 2015 and December 31, 2014 , AOCI was primarily comprised of unrealized gains and losses from available-for-sale securities, including non-credit impairments recognized in OCI of $0.9 million and $0.5 million , respectively, net of tax. At September 30, 2015 AOCI also included losses of $1.0 million related to unrecognized changes in defined benefit plan liabilities, net of tax. All tax effects were computed using a 35% rate. OCI and AOCI also included immaterial amounts of foreign currency translation adjustments. Amounts reclassified from AOCI to net income and the amounts of deferred tax expense (benefit) included in OCI were as follows: Three Months Ended September 30 Nine Months Ended September 30 (In thousands) 2015 2014 2015 2014 Reclassifications from AOCI to net income, available-for-sale securities: Realized investment gains (losses) $ (1,348 ) $ (473 ) $ 1,535 $ 2,133 Tax effect (at 35%) 472 166 (537 ) (747 ) Net reclassification adjustments $ (876 ) $ (307 ) $ 998 $ 1,386 Deferred tax expense (benefit) included in OCI $ (2,555 ) $ (7,851 ) $ (11,905 ) $ 3,784 |
Variable Interest Entities
Variable Interest Entities | 9 Months Ended |
Sep. 30, 2015 | |
Variable Interest Entities [Abstract] | |
Variable Interest Entities | Variable Interest Entities ProAssurance holds passive interests in a number of entities that are considered to be VIE s under GAAP guidance. ProAssurance's VIE interests principally consist of interests in LP s/ LLC s formed for the purpose of achieving diversified equity and debt returns. ProAssurance's VIE interests carried as a part of Other investments totaled $38.1 million at September 30, 2015 and $33.3 million at December 31, 2014 . ProAssurance's VIE interests carried as a part of Investment in unconsolidated subsidiaries totaled $69.1 million at September 30, 2015 and $65.0 million at December 31, 2014 . ProAssurance has not consolidated these VIE s 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 September 30, 2015 , 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 | 9 Months Ended |
Sep. 30, 2015 | |
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 three and nine months ended September 30, 2015 and 2014 . |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2015 | |
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 liability insurance. The professional liability business primarily offers professional liability insurance to healthcare providers and institutions and to attorneys and their firms. Medical technology liability insurance is offered for medical technology and life sciences companies that manufacture or distribute products including entities conducting human clinical trials. The Specialty P&C segment cedes certain premium to the Lloyd's Syndicate segment under a quota share 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 delay, 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 SPC s operated by a wholly owned subsidiary of ProAssurance. The SPC s 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 results) of the SPC s accrue to the owners of that cell. Lloyd's Syndicate includes operating results from ProAssurance's 58% participation in Lloyd's of London Syndicate 1729. Syndicate 1729 underwrites risks over a wide range of property and casualty insurance and reinsurance lines in both the U.S and international markets. The results of this segment are reported on a quarter delay, except that investment results associated with investment assets solely allocated to Syndicate 1729 operations and certain U.S. paid administrative expenses 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 of the Notes to Consolidated Financial Statements in ProAssurance’s December 31, 2014 report on Form 10-K and Note 1 of the Notes to Condensed Consolidated Financial Statements. ProAssurance evaluates performance of its Specialty P&C and Workers' Compensation segments based on before tax underwriting profit or loss, which excludes investment performance. Performance of the Lloyd's Syndicate segment is evaluated based on underwriting profit or loss, plus 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 transactions as if the transactions were to third parties at current market prices. Assets are not allocated to segments because investments and other assets are not managed at the segment level. Financial data by segment were as follows: Three Months Ended September 30, 2015 (In thousands) Specialty P&C Workers' Compensation Lloyd's Syndicate Corporate Inter-segment Eliminations Consolidated Net premiums earned $ 115,593 $ 54,577 $ 11,915 $ — $ — $ 182,085 Net investment income — — 260 26,682 — 26,942 Equity in earnings (loss) of unconsolidated subsidiaries — — — (221 ) — (221 ) Net realized gains (losses) — — 9 (36,641 ) (36,632 ) Other income 1,660 61 (283 ) 1,559 (238 ) 2,759 Net losses and loss adjustment expenses (63,974 ) (36,132 ) (8,700 ) — — (108,806 ) Underwriting, policy acquisition and operating expenses* (26,251 ) (16,231 ) (5,644 ) (5,137 ) 238 (53,025 ) Segregated portfolio cells dividend (expense) income — 1,933 — — — 1,933 Interest expense — — — (3,637 ) — (3,637 ) Income tax benefit (expense) — — (132 ) (990 ) — (1,122 ) Segment operating results $ 27,028 $ 4,208 $ (2,575 ) $ (18,385 ) $ — $ 10,276 Significant non-cash items Depreciation and amortization $ 1,964 $ 1,416 $ 94 $ 6,272 $ — $ 9,746 Nine Months Ended September 30, 2015 (In thousands) Specialty P&C Workers' Compensation Lloyd's Syndicate Corporate Inter-segment Eliminations Consolidated Net premiums earned $ 343,065 $ 159,436 $ 26,776 $ — $ — $ 529,277 Net investment income — — 653 81,548 — 82,201 Equity in earnings (loss) of unconsolidated subsidiaries — — — 3,821 — 3,821 Net realized gains (losses) — — 25 (35,645 ) — (35,620 ) Other income 4,533 361 209 1,828 (427 ) 6,504 Net losses and loss adjustment expenses (197,056 ) (102,545 ) (18,283 ) — — (317,884 ) Underwriting, policy acquisition and operating expenses* (80,057 ) (47,421 ) (13,187 ) (17,670 ) 427 (157,908 ) Segregated portfolio cells dividend (expense) income — (1,481 ) — — — (1,481 ) Interest expense — — — (10,978 ) — (10,978 ) Income tax benefit (expense) — — (752 ) (15,932 ) — (16,684 ) Segment operating results $ 70,485 $ 8,350 $ (4,559 ) $ 6,972 $ — $ 81,248 Significant non-cash items Depreciation and amortization $ 6,107 $ 4,285 $ 330 $ 17,527 $ — $ 28,249 Three Months Ended September 30, 2014 (In thousands) Specialty P&C Workers' Compensation Lloyd's Syndicate Corporate Inter-segment Eliminations Consolidated Net premiums earned $ 123,791 $ 49,792 $ 3,445 $ — $ — $ 177,028 Net investment income — — 120 32,710 — 32,830 Equity in earnings (loss) of unconsolidated subsidiaries — — — 298 — 298 Net realized gains (losses) — — — (8,131 ) — (8,131 ) Other income 1,071 179 (79 ) 824 (187 ) 1,808 Net losses and loss adjustment expenses (63,639 ) (33,046 ) (2,537 ) — — (99,222 ) Underwriting, policy acquisition and operating expenses* (33,814 ) (14,785 ) (2,584 ) (3,189 ) 187 (54,185 ) Segregated portfolio cells dividend expense (income) — 483 — — — 483 Interest expense — — — (3,606 ) — (3,606 ) Income tax benefit (expense) — — — (12,525 ) — (12,525 ) Segment operating results $ 27,409 $ 2,623 $ (1,635 ) $ 6,381 $ — $ 34,778 Significant non-cash items Depreciation and amortization $ 2,334 $ 1,602 $ 157 $ 5,757 $ — $ 9,850 Nine Months Ended September 30, 2014 (In thousands) Specialty P&C Workers' Compensation Lloyd's Syndicate Corporate Inter-segment Eliminations Consolidated Net premiums earned $ 374,704 $ 143,960 $ 6,397 $ — $ — $ 525,061 Net investment income — — 244 92,544 — 92,788 Equity in earnings (loss) of unconsolidated subsidiaries — — — 2,767 — 2,767 Net realized gains (losses) — — — 7,659 — 7,659 Other income 4,167 503 (79 ) 1,856 (392 ) 6,055 Net losses and loss adjustment expenses (191,263 ) (91,975 ) (4,405 ) — — (287,643 ) Underwriting, policy acquisition and operating expenses* (101,044 ) (45,379 ) (5,999 ) (6,826 ) 392 (158,856 ) Segregated portfolio cells dividend expense (income) — (2,355 ) — — — (2,355 ) Interest expense — — — (10,697 ) — (10,697 ) Income tax benefit (expense) — — — (43,328 ) — (43,328 ) Segment operating results $ 86,564 $ 4,754 $ (3,842 ) $ 43,975 $ — $ 131,451 Significant non-cash items Depreciation and amortization $ 6,708 $ 4,384 $ 329 $ 18,379 $ — $ 29,800 * Beginning with the first quarter of 2015, the operating subsidiaries within the Specialty P&C and Workers' Compensation segments were charged a management fee by the Corporate segment for various management services provided to the subsidiary. Under the new arrangement, the expenses associated with such services are reported as expenses of the Corporate segment, and the management fees charged are reported as an offset to Corporate operating expenses. Prior to 2015, a substantial portion of expenses associated with corporate services were directly allocated to the insurance subsidiaries included in the Specialty P&C segment. The following table provides detailed information regarding ProAssurance's gross premiums earned by product 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. Three Months Ended September 30 Nine Months Ended September 30 (In thousands) 2015 2014 2015 2014 Specialty P&C Segment Gross premiums earned: Healthcare professional liability $ 118,624 $ 120,623 $ 349,511 $ 361,179 Legal professional liability 6,994 7,145 21,433 21,147 Medical technology liability 8,800 9,258 26,457 27,043 Other 374 420 1,145 1,445 Ceded premiums earned* (19,199 ) (13,655 ) (55,481 ) (36,110 ) Segment net premiums earned $ 115,593 $ 123,791 $ 343,065 $ 374,704 Workers' Compensation Segment Gross premiums earned: Traditional business $ 43,525 $ 42,345 $ 129,515 $ 119,702 Alternative market business 17,052 14,345 48,667 40,253 Ceded premiums earned (6,000 ) (6,898 ) (18,746 ) (15,995 ) Segment net premiums earned $ 54,577 $ 49,792 $ 159,436 $ 143,960 Lloyd's Syndicate Segment Gross premiums earned: Property and casualty* $ 12,973 $ 4,085 $ 29,832 $ 7,110 Ceded premiums earned (1,058 ) (640 ) (3,056 ) (713 ) Segment net premiums earned $ 11,915 $ 3,445 $ 26,776 $ 6,397 Consolidated net premiums earned $ 182,085 $ 177,028 $ 529,277 $ 525,061 *Includes premium ceded from the Specialty P&C Segment to the Lloyd's Syndicate Segment of $3.6 million and $10.6 million for the three and nine months ended September 30, 2015 and $1.1 million and $1.6 million for the three and nine months ended September 30, 2014 , respectively. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Accounting Changes Adopted and Not Yet Adopted | Accounting Changes 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 regarding 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 not reported as discontinued operations. ProAssurance adopted the guidance as of January 1, 2015. Adoption of the guidance had no effect on ProAssurance’s results of operations or financial position. Disclosures for Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent) Effective for fiscal years beginning after December 15, 2015, the FASB issued guidance which removed the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The guidance also revised disclosure requirements for investments measured or eligible to be measured at fair value using the net asset value per share practical expedient. ProAssurance adopted the guidance as of June 30, 2015 as early adoption is permitted. Adoption of the guidance had no effect on ProAssurance's results of operations or financial position as it affected disclosures only. Accounting Changes Not Yet Adopted 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, 2017, 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, 2018. 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. Simplifying the Presentation of Debt Issuance Costs Effective for fiscal years beginning after December 15, 2015, the FASB issued guidance related to the presentation of debt issuance costs. The new guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. Related guidance issued by the SEC permits issuance costs associated with line-of-credit arrangements to be presented as an asset and subsequently amortized proportionally over the term of the arrangement. ProAssurance plans to adopt the guidance beginning January 1, 2016. Adoption of the guidance is not expected to have a material effect on ProAssurance’s results of operations or financial position. Amendments to the Consolidation Analysis Effective for fiscal years beginning after December 15, 2015, the FASB issued additional guidance regarding the consolidation of legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions). The new standard modifies the evaluation of whether or not entities are VIE s and the consolidation analysis of entities involved with VIE s, particularly those having fee arrangements and related party relationships. ProAssurance is in the process of evaluating the effect, if any, of the new guidance on its results of operations and financial position and plans to adopt the guidance beginning January 1, 2016. Adoption of the guidance is not expected to have a material effect on ProAssurance’s results of operations or financial position. Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement Effective for fiscal years beginning after December 15, 2015, the FASB issued additional guidance regarding accounting for cloud computing arrangements. Under the new guidance, customers participating in cloud computing arrangements that include a software license should account for the software license element of the arrangement consistent with the acquisition of other software licenses. Customers should account for cloud computing arrangements that do not include a software license as a service contract, following existing guidance for service contracts. ProAssurance is in the process of evaluating the effect that the use of the new method would have on its results of operations and financial position and plans to adopt the guidance beginning January 1, 2016. Adoption of the guidance is not expected to have a material effect on ProAssurance’s results of operations or financial position. Disclosures about Short-Duration Contracts Effective for fiscal years beginning after December 15, 2015 and interim periods within fiscal years beginning after December 15, 2016, the FASB issued guidance that requires insurance entities that issue short-duration contracts to provide detailed disclosures relative to the reserve for losses and loss adjustment expenses in annual reporting periods and a roll-forward of the reserve for losses and loss adjustment expenses in interim reporting periods. The guidance also requires disclosures regarding significant changes in the methodologies and assumptions used to calculate the reserve for losses and loss adjustment expenses, including reasons for and the effects of such changes. ProAssurance plans to adopt the guidance beginning January 1, 2016. Adoption of the guidance is not expected to have a material effect on ProAssurance's results of operations or financial position as it affects disclosures only. Simplifying the Accounting for Measurement-Period Adjustments Effective for fiscal years beginning after December 15, 2015 and interim periods within those fiscal years, the FASB issued guidance that requires an acquirer to recognize adjustments to estimated amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. An acquirer must also record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the estimated amounts, calculated as if the accounting had been completed at the acquisition date. The amendments also require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the estimated amounts had been recognized as of the acquisition date. ProAssurance plans to adopt the guidance beginning January 1, 2016. Adoption of the guidance is not expected to have a material effect on ProAssurance’s results of operations or financial position. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Other Liabilities | Other liabilities consisted of the following: (In millions) September 30, 2015 December 31, 2014 SPC dividends payable $ 16.7 $ 15.8 Unpaid dividends 16.5 167.7 All other 125.4 137.4 Total other liabilities $ 158.6 $ 320.9 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
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 September 30, 2015 and December 31, 2014 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. September 30, 2015 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 $ — $ 111,919 $ — $ 111,919 U.S. Government-sponsored enterprise obligations — 26,000 — 26,000 State and municipal bonds — 967,786 — 967,786 Corporate debt, multiple observable inputs 2,329 1,302,377 — 1,304,706 Corporate debt, limited observable inputs — — 7,820 7,820 Residential mortgage-backed securities — 254,878 — 254,878 Agency commercial mortgage-backed securities — 11,204 — 11,204 Other commercial mortgage-backed securities — 39,134 — 39,134 Other asset-backed securities — 96,464 6,268 102,732 Equity securities Financial 66,614 — — 66,614 Utilities/Energy 41,686 — — 41,686 Consumer oriented 55,320 — 23 55,343 Industrial 50,447 — — 50,447 Bond funds 75,688 — — 75,688 All other 15,071 13,037 — 28,108 Short-term investments 154,858 3,199 — 158,057 Other investments 2,769 26,194 517 29,480 Total assets categorized within the fair value hierarchy $ 464,782 $ 2,852,192 $ 14,628 3,331,602 LP/LLC interests carried at NAV which approximates fair value. These interests, reported as a part of Investment in unconsolidated subsidiaries, are not categorized within the fair value hierarchy. 156,850 Total assets at fair value $ 3,488,452 December 31, 2014 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 — — 13,081 13,081 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 Other investments 6,050 22,908 — 28,958 Total assets categorized within the fair value hierarchy $ 451,731 $ 3,145,120 $ 22,875 3,619,726 LP/LLC interests carried at NAV which approximates fair value. These interests, reported as a part of Investment in unconsolidated subsidiaries, are not categorized within the fair value hierarchy. 133,250 Total assets at fair value $ 3,752,976 |
Summary of quantitative information about Level 3 fair value measurements | Quantitative Information Regarding Level 3 Valuations Fair Value at (In millions) September 30, 2015 December 31, 2014 Valuation Technique Unobservable Input Range Assets: State and municipal bonds $— $5.0 Market Comparable Comparability Adjustment 0% - 10% (5%) Discounted Cash Flows Comparability Adjustment 0% - 10% (5%) Corporate debt with limited observable inputs $7.8 $13.1 Market Comparable Comparability Adjustment 0% - 5% (2.5%) Discounted Cash Flows Comparability Adjustment 0% - 5% (2.5%) Other asset-backed securities $6.3 $4.8 Market Comparable Comparability Adjustment 0% - 5% (2.5%) Discounted Cash Flows Comparability Adjustment 0% - 5% (2.5%) Equity securities and Other investments $0.5 $— Discounted Cash Flows Comparability Adjustment 0% - 10% (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. September 30, 2015 Level 3 Fair Value Measurements – Assets (In thousands) U.S. Government-sponsored Enterprise Obligations State and Municipal Bonds Corporate Debt Asset-backed Securities Equity Securities and Other Investments Total Balance June 30, 2015 $ — $ — $ 8,468 $ 4,777 $ 1,036 $ 14,281 Total gains (losses) realized and unrealized: Included in earnings, as a part of: Net investment income — — — — — — Net realized investment gains (losses) — — (311 ) — — (311 ) Included in other comprehensive income — — 300 (9 ) (53 ) 238 Purchases — — — 1,500 584 2,084 Sales — — (648 ) — — (648 ) Transfers in — — 11 — — 11 Transfers out — — — — (918 ) (918 ) Balance September 30, 2015 $ — $ — $ 7,820 $ 6,268 $ 540 $ 14,628 Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end $ — $ — $ — $ — $ (109 ) $ (109 ) September 30, 2015 Level 3 Fair Value Measurements – Assets (In thousands) U.S. Government-sponsored Enterprise Obligations State and Municipal Bonds Corporate Debt Asset-backed Securities Equity Securities and Other Investments Total Balance December 31, 2014 $ — $ 5,025 $ 13,081 $ 4,769 $ — $ 22,875 Total gains (losses) realized and unrealized: Included in earnings, as a part of: Net investment income — — 17 — — 17 Net realized investment gains (losses) — — (309 ) — — (309 ) Included in other comprehensive income — (459 ) 38 (1 ) (133 ) (555 ) Purchases — — 1,515 1,500 1,700 4,715 Sales — — (1,484 ) — — (1,484 ) Transfers in — — 11 — — 11 Transfers out — (4,566 ) (5,049 ) — (918 ) (10,533 ) Balance September 30, 2015 $ — $ — $ 7,820 $ 6,268 $ 540 $ 14,628 Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end $ — $ — $ — $ — $ (109 ) $ (109 ) September 30, 2014 Level 3 Fair Value Measurements – Assets (In thousands) U.S. Government-sponsored Enterprise Obligations State and Municipal Bonds Corporate Debt Asset-backed Securities Equity Securities and Other Investments Total Balance June 30, 2014 $ — $ 7,148 $ 14,544 $ 5,960 $ — $ 27,652 Total gains (losses) realized and unrealized: Included in earnings, as a part of: Net investment income — (4 ) 16 — — 12 Included in other comprehensive income — (76 ) 35 (6 ) — (47 ) Purchases — — — — — — Sales — (1,474 ) (1,160 ) — — (2,634 ) Transfers out — — — (1,181 ) — (1,181 ) Balance September 30, 2014 $ — $ 5,594 $ 13,435 $ 4,773 $ — $ 23,802 Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end $ — $ — $ — $ — $ — $ — September 30, 2014 Level 3 Fair Value Measurements – Assets (In thousands) U.S. Government-sponsored Enterprise Obligations State and Municipal Bonds Corporate Debt Asset-backed Securities Equity Securities and Other Investments Total Balance December 31, 2013 $ — $ 7,338 $ 14,176 $ 6,814 $ — $ 28,328 Total gains (losses) realized and unrealized: Included in earnings, as a part of: Net investment income — (10 ) 48 — — 38 Net realized investment gains (losses) — (95 ) 3 — — (92 ) Included in other comprehensive income 1 (34 ) 702 63 — 732 Purchases 1,000 1,861 2,000 3,340 — 8,201 Sales — (1,731 ) (1,469 ) (61 ) — (3,261 ) Transfers in — 2,119 — 305 — 2,424 Transfers out (1,001 ) (3,854 ) (2,025 ) (5,688 ) — (12,568 ) Balance September 30, 2014 $ — $ 5,594 $ 13,435 $ 4,773 $ — $ 23,802 Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end $ — $ — $ — $ — $ — $ — |
Investments in Limited liability companies and limited partnerships | Investments in unconsolidated subsidiaries at both September 30, 2015 and December 31, 2014 included interests in investment fund LP s/ LLC s that measure fund assets at fair value on a recurring basis and that provide a NAV for the interest. The carrying value of these interests is based on the NAV provided, and was considered to approximate the fair value of the interests. In accordance with GAAP , the fair value of these investments was not classified within the fair value hierarchy. Additional information regarding these investments is as follows: Unfunded Fair Value (In thousands) September 30, September 30, December 31, Investments in LPs/LLCs: Private debt funds (1) $20,023 $ 44,595 $ 37,296 Long equity fund (2) None 6,521 6,747 Long/short equity funds (3) None 30,099 25,301 Non-public equity funds (4) $52,125 63,309 51,811 Multi-strategy fund of funds (5) None 8,372 8,271 Structured credit fund (6) None 3,954 3,824 $ 156,850 $ 133,250 (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 LP s over an anticipated time frame that spans from 3 to 8 years. (2) The 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 capital redemptions subject to 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 LP s. 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 . |
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. September 30, 2015 December 31, 2014 (In thousands) Carrying Fair Carrying Fair Financial assets: BOLI $ 56,748 $ 56,748 $ 56,381 $ 56,381 Other investments $ 61,930 $ 62,573 $ 57,099 $ 57,994 Other assets $ 22,755 $ 22,739 $ 22,440 $ 22,399 Financial liabilities: Senior notes due 2023 $ 250,000 $ 269,198 $ 250,000 $ 276,503 Revolving credit agreement $ 100,000 $ 100,000 $ — $ — Other liabilities $ 14,292 $ 14,288 $ 14,656 $ 14,645 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
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 September 30, 2015 and December 31, 2014 included the following: September 30, 2015 (In thousands) Amortized Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Fixed maturities U.S. Treasury obligations $ 109,416 $ 2,536 $ 33 $ 111,919 U.S. Government-sponsored enterprise obligations 24,748 1,257 5 26,000 State and municipal bonds 929,645 39,272 1,131 967,786 Corporate debt 1,306,358 33,448 27,280 1,312,526 Residential mortgage-backed securities 247,601 7,830 553 254,878 Agency commercial mortgage-backed securities 10,945 279 20 11,204 Other commercial mortgage-backed securities 38,595 601 62 39,134 Other asset-backed securities 102,124 625 17 102,732 $ 2,769,432 $ 85,848 $ 29,101 $ 2,826,179 December 31, 2014 (In thousands) Amortized Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value 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 |
Schedule of available for sale securities by contractual maturity | The recorded cost basis and estimated fair value of available-for-sale fixed maturities at September 30, 2015 , 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 Fixed maturities, available for sale U.S. Treasury obligations $ 109,416 $ 14,796 $ 82,117 $ 11,729 $ 3,277 $ 111,919 U.S. Government-sponsored enterprise obligations 24,748 2,322 16,109 7,427 142 26,000 State and municipal bonds 929,645 48,062 327,284 444,040 148,400 967,786 Corporate debt 1,306,358 87,645 718,812 472,990 33,079 1,312,526 Residential mortgage-backed securities 247,601 254,878 Agency commercial mortgage-backed securities 10,945 11,204 Other commercial mortgage-backed securities 38,595 39,134 Other asset-backed securities 102,124 102,732 $ 2,769,432 $ 2,826,179 |
Other investments | Other investments at September 30, 2015 and December 31, 2014 were comprised as follows: (In thousands) September 30, December 31, Investments in LPs/LLCs, at cost $ 58,381 $ 53,258 Convertible securities, at fair value 29,480 28,958 Other, principally FHLB capital stock, at cost 3,549 3,841 $ 91,410 $ 86,057 |
Unconsolidated subsidiaries | ProAssurance holds investments in unconsolidated subsidiaries, accounted for under the equity method. The investments include the following: September 30, 2015 Carrying Value (In thousands) Percentage September 30, December 31, Investment in LPs/LLCs: Qualified affordable housing tax credit partnerships See below $ 124,109 $ 133,143 Other tax credit partnerships See below 4,306 — All other LPs/LLCs < 25% 169,960 143,358 $ 298,375 $ 276,501 |
Investments held in an unrealized loss position | The following tables provide summarized information with respect to investments held in an unrealized loss position at September 30, 2015 and December 31, 2014 , including the length of time the investment had been held in a continuous unrealized loss position. September 30, 2015 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 $ 8,791 $ 32 $ 2,931 $ 8 $ 5,860 $ 24 U.S. Government-sponsored enterprise obligations 1,463 6 1,463 6 — — State and municipal bonds 48,882 1,132 44,184 948 4,698 184 Corporate debt 471,107 27,280 400,127 15,316 70,980 11,964 Residential mortgage-backed securities 71,621 553 62,177 418 9,444 135 Agency commercial mortgage-backed securities 425 20 — — 425 20 Other commercial mortgage-backed securities 8,428 61 5,084 43 3,344 18 Other asset-backed securities 24,421 17 16,458 9 7,963 8 $ 635,138 $ 29,101 $ 532,424 $ 16,748 $ 102,714 $ 12,353 Other investments Investments in LPs/LLCs carried at cost $ 33,534 $ 2,242 $ 33,534 $ 2,242 $ — $ — December 31, 2014 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 |
Net Investment Income | Net investment income by investment category was as follows: Three Months Ended Nine Months Ended (In thousands) 2015 2014 2015 2014 Fixed maturities $ 24,127 $ 28,442 $ 74,110 $ 85,402 Equities 3,506 2,661 9,974 7,479 Short-term and Other investments 515 2,793 1,417 4,723 BOLI 658 646 1,589 1,544 Investment fees and expenses (1,864 ) (1,712 ) (4,889 ) (6,360 ) Net investment income $ 26,942 $ 32,830 $ 82,201 $ 92,788 |
Net realized investment gains (losses) | The following table provides detailed information regarding net realized investment gains (losses): Three Months Ended September 30 Nine Months Ended September 30 (In thousands) 2015 2014 2015 2014 Total OTTI losses: State and municipal bonds $ — $ — $ — $ (50 ) Corporate debt (1,925 ) (1,425 ) (6,405 ) (1,425 ) Other investments (1,870 ) — (1,870 ) — Portion recognized in OCI: Corporate debt 385 268 2,174 268 Net impairments recognized in earnings $ (3,410 ) $ (1,157 ) $ (6,101 ) $ (1,207 ) Gross realized gains, available-for-sale securities 2,739 736 10,379 3,711 Gross realized (losses), available-for-sale securities (2,548 ) (52 ) (4,613 ) (371 ) Net realized gains (losses), trading securities 402 3,227 12,594 21,830 Net realized gains (losses), Other investments (361 ) 55 357 321 Change in unrealized holding gains (losses), trading securities (32,621 ) (10,402 ) (47,513 ) (17,906 ) Change in unrealized holding gains (losses), convertible securities, carried at fair value (971 ) (538 ) (1,669 ) 1,281 Other 138 — 946 — Net realized investment gains (losses) $ (36,632 ) $ (8,131 ) $ (35,620 ) $ 7,659 |
Other than temporary impairment, credit losses recognized in earnings | 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 OTTI was recorded in OCI . Three Months Ended September 30 Nine Months Ended September 30 (In thousands) 2015 2014 2015 2014 Balance beginning of period $ 2,630 $ 83 $ 232 $ 83 Additional credit losses recognized during the period, related to securities for which: No OTTI has been previously recognized — 149 1,830 149 OTTI has been previously recognized 623 — 1,484 — Reductions due to: Securities sold during the period (realized) — — (293 ) — Balance September 30 $ 3,253 $ 232 $ 3,253 $ 232 |
Information regarding sales and purchases of available-for-sale securities | Other information regarding sales and purchases of available-for-sale securities is as follows: Three Months Ended September 30 Nine Months Ended September 30 (In millions) 2015 2014 2015 2014 Proceeds from sales (exclusive of maturities and paydowns) $ 119.0 $ 24.8 $ 420.0 $ 147.3 Purchases $ 90.9 $ 146.5 $ 466.2 $ 511.9 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | ProAssurance’s outstanding long-term debt consisted of the following: (In thousands) September 30, December 31, Senior notes due 2023, unsecured, interest at 5.3% annually $ 250,000 $ 250,000 Revolving Credit Agreement, outstanding borrowings fully secured, see Note 3, and carried at an interest rate of 0.78%. The interest rate on the borrowing is set at the time the borrowing is initiated or renewed. The current borrowing can be repaid or renewed in January 2016. If renewed, the interest rate will reset. 100,000 — $ 350,000 $ 250,000 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Reclassification adjustments related to available-for-sale securities | Amounts reclassified from AOCI to net income and the amounts of deferred tax expense (benefit) included in OCI were as follows: Three Months Ended September 30 Nine Months Ended September 30 (In thousands) 2015 2014 2015 2014 Reclassifications from AOCI to net income, available-for-sale securities: Realized investment gains (losses) $ (1,348 ) $ (473 ) $ 1,535 $ 2,133 Tax effect (at 35%) 472 166 (537 ) (747 ) Net reclassification adjustments $ (876 ) $ (307 ) $ 998 $ 1,386 Deferred tax expense (benefit) included in OCI $ (2,555 ) $ (7,851 ) $ (11,905 ) $ 3,784 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Financial data by segment were as follows: Three Months Ended September 30, 2015 (In thousands) Specialty P&C Workers' Compensation Lloyd's Syndicate Corporate Inter-segment Eliminations Consolidated Net premiums earned $ 115,593 $ 54,577 $ 11,915 $ — $ — $ 182,085 Net investment income — — 260 26,682 — 26,942 Equity in earnings (loss) of unconsolidated subsidiaries — — — (221 ) — (221 ) Net realized gains (losses) — — 9 (36,641 ) (36,632 ) Other income 1,660 61 (283 ) 1,559 (238 ) 2,759 Net losses and loss adjustment expenses (63,974 ) (36,132 ) (8,700 ) — — (108,806 ) Underwriting, policy acquisition and operating expenses* (26,251 ) (16,231 ) (5,644 ) (5,137 ) 238 (53,025 ) Segregated portfolio cells dividend (expense) income — 1,933 — — — 1,933 Interest expense — — — (3,637 ) — (3,637 ) Income tax benefit (expense) — — (132 ) (990 ) — (1,122 ) Segment operating results $ 27,028 $ 4,208 $ (2,575 ) $ (18,385 ) $ — $ 10,276 Significant non-cash items Depreciation and amortization $ 1,964 $ 1,416 $ 94 $ 6,272 $ — $ 9,746 Nine Months Ended September 30, 2015 (In thousands) Specialty P&C Workers' Compensation Lloyd's Syndicate Corporate Inter-segment Eliminations Consolidated Net premiums earned $ 343,065 $ 159,436 $ 26,776 $ — $ — $ 529,277 Net investment income — — 653 81,548 — 82,201 Equity in earnings (loss) of unconsolidated subsidiaries — — — 3,821 — 3,821 Net realized gains (losses) — — 25 (35,645 ) — (35,620 ) Other income 4,533 361 209 1,828 (427 ) 6,504 Net losses and loss adjustment expenses (197,056 ) (102,545 ) (18,283 ) — — (317,884 ) Underwriting, policy acquisition and operating expenses* (80,057 ) (47,421 ) (13,187 ) (17,670 ) 427 (157,908 ) Segregated portfolio cells dividend (expense) income — (1,481 ) — — — (1,481 ) Interest expense — — — (10,978 ) — (10,978 ) Income tax benefit (expense) — — (752 ) (15,932 ) — (16,684 ) Segment operating results $ 70,485 $ 8,350 $ (4,559 ) $ 6,972 $ — $ 81,248 Significant non-cash items Depreciation and amortization $ 6,107 $ 4,285 $ 330 $ 17,527 $ — $ 28,249 Three Months Ended September 30, 2014 (In thousands) Specialty P&C Workers' Compensation Lloyd's Syndicate Corporate Inter-segment Eliminations Consolidated Net premiums earned $ 123,791 $ 49,792 $ 3,445 $ — $ — $ 177,028 Net investment income — — 120 32,710 — 32,830 Equity in earnings (loss) of unconsolidated subsidiaries — — — 298 — 298 Net realized gains (losses) — — — (8,131 ) — (8,131 ) Other income 1,071 179 (79 ) 824 (187 ) 1,808 Net losses and loss adjustment expenses (63,639 ) (33,046 ) (2,537 ) — — (99,222 ) Underwriting, policy acquisition and operating expenses* (33,814 ) (14,785 ) (2,584 ) (3,189 ) 187 (54,185 ) Segregated portfolio cells dividend expense (income) — 483 — — — 483 Interest expense — — — (3,606 ) — (3,606 ) Income tax benefit (expense) — — — (12,525 ) — (12,525 ) Segment operating results $ 27,409 $ 2,623 $ (1,635 ) $ 6,381 $ — $ 34,778 Significant non-cash items Depreciation and amortization $ 2,334 $ 1,602 $ 157 $ 5,757 $ — $ 9,850 Nine Months Ended September 30, 2014 (In thousands) Specialty P&C Workers' Compensation Lloyd's Syndicate Corporate Inter-segment Eliminations Consolidated Net premiums earned $ 374,704 $ 143,960 $ 6,397 $ — $ — $ 525,061 Net investment income — — 244 92,544 — 92,788 Equity in earnings (loss) of unconsolidated subsidiaries — — — 2,767 — 2,767 Net realized gains (losses) — — — 7,659 — 7,659 Other income 4,167 503 (79 ) 1,856 (392 ) 6,055 Net losses and loss adjustment expenses (191,263 ) (91,975 ) (4,405 ) — — (287,643 ) Underwriting, policy acquisition and operating expenses* (101,044 ) (45,379 ) (5,999 ) (6,826 ) 392 (158,856 ) Segregated portfolio cells dividend expense (income) — (2,355 ) — — — (2,355 ) Interest expense — — — (10,697 ) — (10,697 ) Income tax benefit (expense) — — — (43,328 ) — (43,328 ) Segment operating results $ 86,564 $ 4,754 $ (3,842 ) $ 43,975 $ — $ 131,451 Significant non-cash items Depreciation and amortization $ 6,708 $ 4,384 $ 329 $ 18,379 $ — $ 29,800 * Beginning with the first quarter of 2015, the operating subsidiaries within the Specialty P&C and Workers' Compensation segments were charged a management fee by the Corporate segment for various management services provided to the subsidiary. Under the new arrangement, the expenses associated with such services are reported as expenses of the Corporate segment, and the management fees charged are reported as an offset to Corporate operating expenses. Prior to 2015, a substantial portion of expenses associated with corporate services were directly allocated to the insurance subsidiaries included in the Specialty P&C segment. |
Schedule of Gross Premiums by Product | The following table provides detailed information regarding ProAssurance's gross premiums earned by product 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. Three Months Ended September 30 Nine Months Ended September 30 (In thousands) 2015 2014 2015 2014 Specialty P&C Segment Gross premiums earned: Healthcare professional liability $ 118,624 $ 120,623 $ 349,511 $ 361,179 Legal professional liability 6,994 7,145 21,433 21,147 Medical technology liability 8,800 9,258 26,457 27,043 Other 374 420 1,145 1,445 Ceded premiums earned* (19,199 ) (13,655 ) (55,481 ) (36,110 ) Segment net premiums earned $ 115,593 $ 123,791 $ 343,065 $ 374,704 Workers' Compensation Segment Gross premiums earned: Traditional business $ 43,525 $ 42,345 $ 129,515 $ 119,702 Alternative market business 17,052 14,345 48,667 40,253 Ceded premiums earned (6,000 ) (6,898 ) (18,746 ) (15,995 ) Segment net premiums earned $ 54,577 $ 49,792 $ 159,436 $ 143,960 Lloyd's Syndicate Segment Gross premiums earned: Property and casualty* $ 12,973 $ 4,085 $ 29,832 $ 7,110 Ceded premiums earned (1,058 ) (640 ) (3,056 ) (713 ) Segment net premiums earned $ 11,915 $ 3,445 $ 26,776 $ 6,397 Consolidated net premiums earned $ 182,085 $ 177,028 $ 529,277 $ 525,061 *Includes premium ceded from the Specialty P&C Segment to the Lloyd's Syndicate Segment of $3.6 million and $10.6 million for the three and nine months ended September 30, 2015 and $1.1 million and $1.6 million for the three and nine months ended September 30, 2014 , respectively. |
Basis of Presentation (Details
Basis of Presentation (Details Textual) | 9 Months Ended |
Sep. 30, 2015Segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 4 |
Basis of Presentation Basis of
Basis of Presentation Basis of Presentation (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
SPC dividends payable | $ 16,700 | $ 15,800 | |
Unpaid dividends | 16,454 | 167,700 | $ 17,318 |
All other | 125,400 | 137,400 | |
Total other liabilities | $ 158,588 | $ 320,853 |
Fair Value Measurement (Assets
Fair Value Measurement (Assets and Liabilities Measured at Fair Value) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Assets: | ||
Equity securities | $ 317,886 | $ 314,482 |
Other investments | 91,410 | 86,057 |
Level 3 [Member] | State and municipal bonds [Member] | ||
Assets: | ||
Total assets at fair value | 0 | 5,000 |
Level 3 [Member] | Other asset-backed securities [Member] | ||
Assets: | ||
Total assets at fair value | 6,300 | 4,800 |
Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Other investments | 29,480 | 28,958 |
Total assets at fair value | 3,331,602 | 3,619,726 |
Fair Value, Measurements, Recurring [Member] | U.S. Treasury obligations [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 111,919 | 166,512 |
Fair Value, Measurements, Recurring [Member] | U.S. Government-sponsored enterprise obligations [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 26,000 | 39,563 |
Fair Value, Measurements, Recurring [Member] | State and municipal bonds [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 967,786 | 1,062,615 |
Fair Value, Measurements, Recurring [Member] | Corporate debt, multiple observable inputs [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 1,304,706 | 1,404,020 |
Fair Value, Measurements, Recurring [Member] | Corporate debt, limited observable inputs [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 7,820 | 13,081 |
Fair Value, Measurements, Recurring [Member] | Residential mortgage-backed securities [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 254,878 | 276,056 |
Fair Value, Measurements, Recurring [Member] | Agency commercial mortgage-backed securities [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 11,204 | 15,493 |
Fair Value, Measurements, Recurring [Member] | Other commercial mortgage-backed securities [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 39,134 | 51,063 |
Fair Value, Measurements, Recurring [Member] | Other asset-backed securities [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 102,732 | 116,624 |
Fair Value, Measurements, Recurring [Member] | Financial [Member] | ||
Assets: | ||
Equity securities | 66,614 | 79,341 |
Fair Value, Measurements, Recurring [Member] | Utilities/Energy [Member] | ||
Assets: | ||
Equity securities | 41,686 | 25,629 |
Fair Value, Measurements, Recurring [Member] | Consumer oriented [Member] | ||
Assets: | ||
Equity securities | 55,343 | 65,670 |
Fair Value, Measurements, Recurring [Member] | Industrial [Member] | ||
Assets: | ||
Equity securities | 50,447 | 55,460 |
Fair Value, Measurements, Recurring [Member] | Bond funds [Member] | ||
Assets: | ||
Equity securities | 75,688 | 55,196 |
Fair Value, Measurements, Recurring [Member] | All other [Member] | ||
Assets: | ||
Equity securities | 28,108 | 33,186 |
Fair Value, Measurements, Recurring [Member] | Short-term Investments [Member] | ||
Assets: | ||
Short-term investments | 158,057 | 131,259 |
Fair Value, Measurements, Recurring [Member] | Adjustments for New Accounting Principle, Early Adoption [Member] | ||
Assets: | ||
LP/LLC interests carried at NAV which approximates fair value. These interests, reported as a part of Investment in unconsolidated subsidiaries, are not categorized within the fair value hierarchy. | 156,850 | 133,250 |
Total assets at fair value | 3,488,452 | 3,752,976 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | ||
Assets: | ||
Other investments | 2,769 | 6,050 |
Total assets at fair value | 464,782 | 451,731 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | U.S. Treasury obligations [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | U.S. Government-sponsored enterprise obligations [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | State and municipal bonds [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Corporate debt, multiple observable inputs [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 2,329 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Corporate debt, limited observable inputs [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Residential mortgage-backed securities [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Agency commercial mortgage-backed securities [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Other commercial mortgage-backed securities [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Other asset-backed securities [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Financial [Member] | ||
Assets: | ||
Equity securities | 66,614 | 79,341 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Utilities/Energy [Member] | ||
Assets: | ||
Equity securities | 41,686 | 25,629 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Consumer oriented [Member] | ||
Assets: | ||
Equity securities | 55,320 | 65,670 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Industrial [Member] | ||
Assets: | ||
Equity securities | 50,447 | 55,460 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Bond funds [Member] | ||
Assets: | ||
Equity securities | 75,688 | 55,196 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | All other [Member] | ||
Assets: | ||
Equity securities | 15,071 | 33,186 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Short-term Investments [Member] | ||
Assets: | ||
Short-term investments | 154,858 | 131,199 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | ||
Assets: | ||
Other investments | 26,194 | 22,908 |
Total assets at fair value | 2,852,192 | 3,145,120 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | U.S. Treasury obligations [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 111,919 | 166,512 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | U.S. Government-sponsored enterprise obligations [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 26,000 | 39,563 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | State and municipal bonds [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 967,786 | 1,057,590 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Corporate debt, multiple observable inputs [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 1,302,377 | 1,404,020 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Corporate debt, limited observable inputs [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Residential mortgage-backed securities [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 254,878 | 276,056 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Agency commercial mortgage-backed securities [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 11,204 | 15,493 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Other commercial mortgage-backed securities [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 39,134 | 51,063 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Other asset-backed securities [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 96,464 | 111,855 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Financial [Member] | ||
Assets: | ||
Equity securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Utilities/Energy [Member] | ||
Assets: | ||
Equity securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Consumer oriented [Member] | ||
Assets: | ||
Equity securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Industrial [Member] | ||
Assets: | ||
Equity securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Bond funds [Member] | ||
Assets: | ||
Equity securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | All other [Member] | ||
Assets: | ||
Equity securities | 13,037 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Short-term Investments [Member] | ||
Assets: | ||
Short-term investments | 3,199 | 60 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | ||
Assets: | ||
Other investments | 517 | 0 |
Total assets at fair value | 14,628 | 22,875 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | U.S. Treasury obligations [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | U.S. Government-sponsored enterprise obligations [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | State and municipal bonds [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 0 | 5,025 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Corporate debt, multiple observable inputs [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Corporate debt, limited observable inputs [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 7,820 | 13,081 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Residential mortgage-backed securities [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Agency commercial mortgage-backed securities [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Other commercial mortgage-backed securities [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Other asset-backed securities [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 6,268 | 4,769 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Financial [Member] | ||
Assets: | ||
Equity securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Utilities/Energy [Member] | ||
Assets: | ||
Equity securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Consumer oriented [Member] | ||
Assets: | ||
Equity securities | 23 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Industrial [Member] | ||
Assets: | ||
Equity securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Bond funds [Member] | ||
Assets: | ||
Equity securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | All other [Member] | ||
Assets: | ||
Equity securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Short-term Investments [Member] | ||
Assets: | ||
Short-term investments | $ 0 | $ 0 |
Fair Value Measurement (Quantit
Fair Value Measurement (Quantitative Information Regarding Level 3 Valuations) (Details) - Level 3 [Member] - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | |
State and municipal bonds [Member] | ||
Assets: | ||
Assets, Fair Value | $ 0 | $ 5 |
State and municipal bonds [Member] | Market comparable securities valuation technique [Member] | Minimum [Member] | ||
Assets: | ||
Comparability Adjustment | 0.00% | |
State and municipal bonds [Member] | Market comparable securities valuation technique [Member] | Maximum [Member] | ||
Assets: | ||
Comparability Adjustment | 10.00% | |
State and municipal bonds [Member] | Market comparable securities valuation technique [Member] | Weighted Average [Member] | ||
Assets: | ||
Comparability Adjustment | 5.00% | |
State and municipal bonds [Member] | Discount cash flows valuation technique [Member] | Minimum [Member] | ||
Assets: | ||
Comparability Adjustment | 0.00% | |
State and municipal bonds [Member] | Discount cash flows valuation technique [Member] | Maximum [Member] | ||
Assets: | ||
Comparability Adjustment | 10.00% | |
State and municipal bonds [Member] | Discount cash flows valuation technique [Member] | Weighted Average [Member] | ||
Assets: | ||
Comparability Adjustment | 5.00% | |
Corporate debt with limited observable inputs [Member] | ||
Assets: | ||
Assets, Fair Value | $ 7.8 | 13.1 |
Corporate debt with limited observable inputs [Member] | Market comparable securities valuation technique [Member] | Minimum [Member] | ||
Assets: | ||
Comparability Adjustment | 0.00% | |
Corporate debt with limited observable inputs [Member] | Market comparable securities valuation technique [Member] | Maximum [Member] | ||
Assets: | ||
Comparability Adjustment | 5.00% | |
Corporate debt with limited observable inputs [Member] | Market comparable securities valuation technique [Member] | Weighted Average [Member] | ||
Assets: | ||
Comparability Adjustment | 2.50% | |
Corporate debt with limited observable inputs [Member] | Discount cash flows valuation technique [Member] | Minimum [Member] | ||
Assets: | ||
Comparability Adjustment | 0.00% | |
Corporate debt with limited observable inputs [Member] | Discount cash flows valuation technique [Member] | Maximum [Member] | ||
Assets: | ||
Comparability Adjustment | 5.00% | |
Corporate debt with limited observable inputs [Member] | Discount cash flows valuation technique [Member] | Weighted Average [Member] | ||
Assets: | ||
Comparability Adjustment | 2.50% | |
Other asset-backed securities [Member] | ||
Assets: | ||
Assets, Fair Value | $ 6.3 | 4.8 |
Other asset-backed securities [Member] | Market comparable securities valuation technique [Member] | Minimum [Member] | ||
Assets: | ||
Comparability Adjustment | 0.00% | |
Other asset-backed securities [Member] | Market comparable securities valuation technique [Member] | Maximum [Member] | ||
Assets: | ||
Comparability Adjustment | 5.00% | |
Other asset-backed securities [Member] | Market comparable securities valuation technique [Member] | Weighted Average [Member] | ||
Assets: | ||
Comparability Adjustment | 2.50% | |
Other asset-backed securities [Member] | Discount cash flows valuation technique [Member] | Minimum [Member] | ||
Assets: | ||
Comparability Adjustment | 0.00% | |
Other asset-backed securities [Member] | Discount cash flows valuation technique [Member] | Maximum [Member] | ||
Assets: | ||
Comparability Adjustment | 5.00% | |
Other asset-backed securities [Member] | Discount cash flows valuation technique [Member] | Weighted Average [Member] | ||
Assets: | ||
Comparability Adjustment | 2.50% | |
Equity securities and other investments [Member] | ||
Assets: | ||
Assets, Fair Value | $ 0.5 | $ 0 |
Equity securities and other investments [Member] | Discount cash flows valuation technique [Member] | Minimum [Member] | ||
Assets: | ||
Comparability Adjustment | 0.00% | |
Equity securities and other investments [Member] | Discount cash flows valuation technique [Member] | Maximum [Member] | ||
Assets: | ||
Comparability Adjustment | 10.00% | |
Equity securities and other investments [Member] | Discount cash flows valuation technique [Member] | Weighted Average [Member] | ||
Assets: | ||
Comparability Adjustment | 5.00% |
Fair Value Measurement (Level 3
Fair Value Measurement (Level 3 Assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation: | ||||
Beginning Balance | $ 14,281 | $ 27,652 | $ 22,875 | $ 28,328 |
Included in earnings, as a part of: | ||||
Included in other comprehensive income | 238 | (47) | (555) | 732 |
Purchases | 2,084 | 0 | 4,715 | 8,201 |
Sales | (648) | (2,634) | (1,484) | (3,261) |
Transfers in | 11 | 11 | 2,424 | |
Transfers out | (918) | (1,181) | (10,533) | (12,568) |
Ending Balance | 14,628 | 23,802 | 14,628 | 23,802 |
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end | (109) | 0 | (109) | 0 |
U.S. Government-sponsored enterprise obligations [Member] | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation: | ||||
Beginning Balance | 0 | 0 | 0 | 0 |
Included in earnings, as a part of: | ||||
Included in other comprehensive income | 0 | 0 | 0 | 1 |
Purchases | 0 | 0 | 0 | 1,000 |
Sales | 0 | 0 | 0 | 0 |
Transfers in | 0 | 0 | 0 | |
Transfers out | 0 | 0 | 0 | (1,001) |
Ending Balance | 0 | 0 | 0 | 0 |
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end | 0 | 0 | 0 | 0 |
State and municipal bonds [Member] | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation: | ||||
Beginning Balance | 0 | 7,148 | 5,025 | 7,338 |
Included in earnings, as a part of: | ||||
Included in other comprehensive income | 0 | (76) | (459) | (34) |
Purchases | 0 | 0 | 0 | 1,861 |
Sales | 0 | (1,474) | 0 | (1,731) |
Transfers in | 0 | 0 | 2,119 | |
Transfers out | 0 | 0 | (4,566) | (3,854) |
Ending Balance | 0 | 5,594 | 0 | 5,594 |
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end | 0 | 0 | 0 | 0 |
Corporate debt [Member] | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation: | ||||
Beginning Balance | 8,468 | 14,544 | 13,081 | 14,176 |
Included in earnings, as a part of: | ||||
Included in other comprehensive income | 300 | 35 | 38 | 702 |
Purchases | 0 | 0 | 1,515 | 2,000 |
Sales | (648) | (1,160) | (1,484) | (1,469) |
Transfers in | 11 | 11 | 0 | |
Transfers out | 0 | (5,049) | (2,025) | |
Ending Balance | 7,820 | 13,435 | 7,820 | 13,435 |
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end | 0 | 0 | 0 | 0 |
Asset-backed securities [Member] | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation: | ||||
Beginning Balance | 4,777 | 5,960 | 4,769 | 6,814 |
Included in earnings, as a part of: | ||||
Included in other comprehensive income | (9) | (6) | (1) | 63 |
Purchases | 1,500 | 0 | 1,500 | 3,340 |
Sales | 0 | 0 | 0 | (61) |
Transfers in | 0 | 0 | 305 | |
Transfers out | 0 | (1,181) | 0 | (5,688) |
Ending Balance | 6,268 | 4,773 | 6,268 | 4,773 |
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end | 0 | 0 | 0 | 0 |
Equity securities and other investments [Member] | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation: | ||||
Beginning Balance | 1,036 | 0 | 0 | 0 |
Included in earnings, as a part of: | ||||
Included in other comprehensive income | (53) | 0 | (133) | 0 |
Purchases | 584 | 0 | 1,700 | 0 |
Sales | 0 | 0 | 0 | 0 |
Transfers in | 0 | 0 | 0 | |
Transfers out | (918) | 0 | (918) | 0 |
Ending Balance | 540 | 0 | 540 | 0 |
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end | (109) | 0 | (109) | 0 |
Net investment Income [Member] | ||||
Included in earnings, as a part of: | ||||
Total gains (losses) realized and unrealized, included in earnings | 0 | 12 | 17 | 38 |
Net investment Income [Member] | U.S. Government-sponsored enterprise obligations [Member] | ||||
Included in earnings, as a part of: | ||||
Total gains (losses) realized and unrealized, included in earnings | 0 | 0 | 0 | 0 |
Net investment Income [Member] | State and municipal bonds [Member] | ||||
Included in earnings, as a part of: | ||||
Total gains (losses) realized and unrealized, included in earnings | 0 | (4) | 0 | (10) |
Net investment Income [Member] | Corporate debt [Member] | ||||
Included in earnings, as a part of: | ||||
Total gains (losses) realized and unrealized, included in earnings | 0 | 16 | 17 | 48 |
Net investment Income [Member] | Asset-backed securities [Member] | ||||
Included in earnings, as a part of: | ||||
Total gains (losses) realized and unrealized, included in earnings | 0 | 0 | 0 | 0 |
Net investment Income [Member] | Equity securities and other investments [Member] | ||||
Included in earnings, as a part of: | ||||
Total gains (losses) realized and unrealized, included in earnings | 0 | $ 0 | 0 | 0 |
Net realized investment gains (losses) [Member] | ||||
Included in earnings, as a part of: | ||||
Total gains (losses) realized and unrealized, included in earnings | (311) | (309) | (92) | |
Net realized investment gains (losses) [Member] | U.S. Government-sponsored enterprise obligations [Member] | ||||
Included in earnings, as a part of: | ||||
Total gains (losses) realized and unrealized, included in earnings | 0 | 0 | 0 | |
Net realized investment gains (losses) [Member] | State and municipal bonds [Member] | ||||
Included in earnings, as a part of: | ||||
Total gains (losses) realized and unrealized, included in earnings | 0 | 0 | (95) | |
Net realized investment gains (losses) [Member] | Corporate debt [Member] | ||||
Included in earnings, as a part of: | ||||
Total gains (losses) realized and unrealized, included in earnings | (311) | (309) | 3 | |
Net realized investment gains (losses) [Member] | Asset-backed securities [Member] | ||||
Included in earnings, as a part of: | ||||
Total gains (losses) realized and unrealized, included in earnings | 0 | 0 | 0 | |
Net realized investment gains (losses) [Member] | Equity securities and other investments [Member] | ||||
Included in earnings, as a part of: | ||||
Total gains (losses) realized and unrealized, included in earnings | $ 0 | $ 0 | $ 0 |
Fair Value Measurement (Narrati
Fair Value Measurement (Narrative) (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | |
Credit Derivatives [Line Items] | |||
Fair value level 1 to level 2 transfers | $ 0 | $ 0 | |
Fair value level 2 to level 1 transfers | $ 0 | $ 0 | |
Corporate debt with limited observable inputs [Member] | A- Rating [Member] | |||
Credit Derivatives [Line Items] | |||
Credit rating | 93.00% | 80.00% |
Fair Value Measurement (Investm
Fair Value Measurement (Investments in LLCs and Limited Partnerships) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Investments in LPs/LLCs fair value | $ 156,850 | $ 133,250 | |
Private debt fund [Member] | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Investments LPs/LLCs unfunded commitments | [1] | 20,023 | |
Investments in LPs/LLCs fair value | [1] | 44,595 | 37,296 |
Long equity fund [Member] | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Investments LPs/LLCs unfunded commitments | [2] | 0 | |
Investments in LPs/LLCs fair value | [2] | 6,521 | 6,747 |
Long/Short equity funds [Member] | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Investments LPs/LLCs unfunded commitments | [3] | 0 | |
Investments in LPs/LLCs fair value | [3] | 30,099 | 25,301 |
Non-public equity funds [Member] | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Investments LPs/LLCs unfunded commitments | [4] | 52,125 | |
Investments in LPs/LLCs fair value | [4] | 63,309 | 51,811 |
Multi-Strategy Fund of Funds [Member] | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Investments LPs/LLCs unfunded commitments | [5] | 0 | |
Investments in LPs/LLCs fair value | [5] | 8,372 | 8,271 |
Structured Credit Fund [Member] | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Investments LPs/LLCs unfunded commitments | [6] | 0 | |
Investments in LPs/LLCs fair value | [6] | $ 3,954 | $ 3,824 |
[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] | The 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 capital redemptions subject to 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 (Inves33
Fair Value Measurement (Investments in LLCs and Limited Partnerships Footnote) (Details) | 9 Months Ended |
Sep. 30, 2015 | |
Long equity fund [Member] | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |
Investment redemption notice period | 15 days |
Non-public equity funds [Member] | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |
Liquidating investments remaining period | 9 years |
Structured Credit Fund [Member] | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |
Investment redemption notice period | 90 days |
Minimum [Member] | Secured debt fund [Member] | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |
Liquidating investments remaining period | 3 years |
Minimum [Member] | Long/Short Equity Funds [Member] | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |
Investment redemption 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] | |
Liquidating investments remaining period | 8 years |
Maximum [Member] | Long 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] | |
Investment redemption notice period | 90 days |
Payment period for redemption of LP valued at NAV | 30 days |
Fair Value Measurement (Methodo
Fair Value Measurement (Methodologies Other Than Fair Value) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Financial assets: | ||
BOLI | $ 56,748 | $ 56,381 |
Other investments | 91,410 | 86,057 |
Other assets | 90,212 | 93,263 |
Financial liabilities: | ||
Senior notes due 2023 | 350,000 | 250,000 |
Total other liabilities | 158,588 | 320,853 |
Not Measured At Fair Value [Member] | Carrying Value [Member] | ||
Financial assets: | ||
BOLI | 56,748 | 56,381 |
Other investments | 61,930 | 57,099 |
Other assets | 22,755 | 22,440 |
Financial liabilities: | ||
Total other liabilities | 14,292 | 14,656 |
Not Measured At Fair Value [Member] | Carrying Value [Member] | Senior notes due 2023 [Member] | ||
Financial liabilities: | ||
Senior notes due 2023 | 250,000 | 250,000 |
Not Measured At Fair Value [Member] | Carrying Value [Member] | Revolving Credit Facility [Member] | ||
Financial liabilities: | ||
Senior notes due 2023 | 100,000 | 0 |
Not Measured At Fair Value [Member] | Level 3 [Member] | Fair Value [Member] | ||
Financial assets: | ||
BOLI | 56,748 | 56,381 |
Other investments | 62,573 | 57,994 |
Other assets | 22,739 | 22,399 |
Financial liabilities: | ||
Total other liabilities | 14,288 | 14,645 |
Not Measured At Fair Value [Member] | Level 3 [Member] | Fair Value [Member] | Senior notes due 2023 [Member] | ||
Financial liabilities: | ||
Senior notes due 2023 | 269,198 | 276,503 |
Not Measured At Fair Value [Member] | Level 3 [Member] | Fair Value [Member] | Revolving Credit Facility [Member] | ||
Financial liabilities: | ||
Senior notes due 2023 | $ 100,000 | $ 0 |
Investments (Available-For-Sale
Investments (Available-For-Sale Securities) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
U.S. Treasury obligations [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | $ 109,416 | $ 163,714 |
Gross Unrealized Gains | 2,536 | 3,785 |
Gross Unrealized Losses | 33 | 987 |
Estimated Fair Value | 111,919 | 166,512 |
U.S. Government-sponsored enterprise obligations [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 24,748 | 38,022 |
Gross Unrealized Gains | 1,257 | 1,641 |
Gross Unrealized Losses | 5 | 100 |
Estimated Fair Value | 26,000 | 39,563 |
State and municipal bonds [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 929,645 | 1,015,555 |
Gross Unrealized Gains | 39,272 | 47,395 |
Gross Unrealized Losses | 1,131 | 335 |
Estimated Fair Value | 967,786 | 1,062,615 |
Corporate debt [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 1,306,358 | 1,389,970 |
Gross Unrealized Gains | 33,448 | 44,234 |
Gross Unrealized Losses | 27,280 | 17,103 |
Estimated Fair Value | 1,312,526 | 1,417,101 |
Residential mortgage-backed securities [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 247,601 | 266,306 |
Gross Unrealized Gains | 7,830 | 10,198 |
Gross Unrealized Losses | 553 | 448 |
Estimated Fair Value | 254,878 | 276,056 |
Agency commercial mortgage-backed securities [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 10,945 | 15,344 |
Gross Unrealized Gains | 279 | 208 |
Gross Unrealized Losses | 20 | 59 |
Estimated Fair Value | 11,204 | 15,493 |
Other commercial mortgage-backed securities [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 38,595 | 50,025 |
Gross Unrealized Gains | 601 | 1,137 |
Gross Unrealized Losses | 62 | 99 |
Estimated Fair Value | 39,134 | 51,063 |
Other asset-backed securities [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 102,124 | 116,541 |
Gross Unrealized Gains | 625 | 288 |
Gross Unrealized Losses | 17 | 205 |
Estimated Fair Value | 102,732 | 116,624 |
Debt Securities [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 2,769,432 | 3,055,477 |
Gross Unrealized Gains | 85,848 | 108,886 |
Gross Unrealized Losses | 29,101 | 19,336 |
Estimated Fair Value | $ 2,826,179 | $ 3,145,027 |
Investments (Available For Sale
Investments (Available For Sale Securities by Contractual Maturity) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
U.S. Treasury obligations [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | $ 109,416 | $ 163,714 |
Due in one year or less | 14,796 | |
Due after one year through five years | 82,117 | |
Due after five years through ten years | 11,729 | |
Due after ten years | 3,277 | |
Estimated Fair Value | 111,919 | 166,512 |
U.S. Government-sponsored enterprise obligations [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 24,748 | 38,022 |
Due in one year or less | 2,322 | |
Due after one year through five years | 16,109 | |
Due after five years through ten years | 7,427 | |
Due after ten years | 142 | |
Estimated Fair Value | 26,000 | 39,563 |
State and municipal bonds [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 929,645 | 1,015,555 |
Due in one year or less | 48,062 | |
Due after one year through five years | 327,284 | |
Due after five years through ten years | 444,040 | |
Due after ten years | 148,400 | |
Estimated Fair Value | 967,786 | 1,062,615 |
Corporate debt [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 1,306,358 | 1,389,970 |
Due in one year or less | 87,645 | |
Due after one year through five years | 718,812 | |
Due after five years through ten years | 472,990 | |
Due after ten years | 33,079 | |
Estimated Fair Value | 1,312,526 | 1,417,101 |
Residential mortgage-backed securities [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 247,601 | 266,306 |
Estimated Fair Value | 254,878 | 276,056 |
Agency commercial mortgage-backed securities [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 10,945 | 15,344 |
Estimated Fair Value | 11,204 | 15,493 |
Other commercial mortgage-backed securities [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 38,595 | 50,025 |
Estimated Fair Value | 39,134 | 51,063 |
Other asset-backed securities [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 102,124 | 116,541 |
Estimated Fair Value | 102,732 | 116,624 |
Debt Securities [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 2,769,432 | 3,055,477 |
Estimated Fair Value | $ 2,826,179 | $ 3,145,027 |
Investments (Narrative) (Detail
Investments (Narrative) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015USD ($)SecurityAffiliateinvestment_interestIssuer | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)SecurityAffiliateinvestment_interestIssuer | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($)SecurityIssuer | |
Schedule of Available-for-sale Securities [Line Items] | |||||
Number of investment affiliates exceeding shareholder's equity ten percent threshold limit | Affiliate | 0 | 0 | |||
Threshold limit of investments based on shareholders' equity | 10.00% | 10.00% | |||
Securities on deposit with state insurance departments | $ 49,300 | $ 49,300 | |||
Business owned life insurance cost | 33,000 | 33,000 | |||
Investment in unconsolidated subsidiaries | 298,375 | 298,375 | $ 276,501 | ||
Investments in LPs/LLCs fair value | 156,850 | 156,850 | 133,250 | ||
Real estate investment property | 13,100 | 13,100 | 10,100 | ||
Equity in earnings, income (loss) from affordable housing projects | (2,400) | $ (2,500) | (7,600) | $ (6,500) | |
Affordable housing tax credits | 4,600 | 4,600 | 13,900 | 13,400 | |
Net impairments recognized in earnings | 3,410 | 1,157 | 6,101 | 1,207 | |
Portion of OTTI losses recognized in other comprehensive income before taxes | 385 | 268 | 2,174 | 268 | |
Other-than-temporary impairment (OTTI) losses | (3,795) | (1,425) | (8,275) | (1,475) | |
Change in unrealized holding gains (losses), trading securities | $ (32,621) | (10,402) | $ (47,513) | (17,906) | |
Tax Credit Partnerships Almost 100% Ownership [Member] | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Number of tax credit partnerships almost 100% ownership percentage | investment_interest | 2 | 2 | |||
Investment in unconsolidated subsidiaries | $ 54,600 | $ 54,600 | |||
Tax Credit Partnerships Less Than 20% Ownership [Member] | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Investment in unconsolidated subsidiaries | 69,500 | 69,500 | |||
Other tax credit partnerships [Member] | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Investment in unconsolidated subsidiaries | $ 4,306 | $ 4,306 | $ 0 | ||
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% | 100.00% | |||
Maximum [Member] | Tax Credit Partnerships Less Than 20% Ownership [Member] | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Percentage Ownership | 20.00% | 20.00% | |||
Fixed maturities [Member] | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Required FAL Deposit | $ 89,300 | $ 89,300 | |||
Short-term Investments [Member] | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Required FAL Deposit | $ 400 | $ 400 | |||
Non Government-Backed [Member] | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Number of debt securities in unrealized loss position | Security | 546 | 546 | 588 | ||
Debt securities in unrealized loss position as percentage of total debt securities held | 20.20% | 20.20% | 20.50% | ||
Number of issuers in unrealized loss position | Issuer | 404 | 404 | 434 | ||
Single greatest unrealized loss position | $ 1,500 | $ 1,500 | $ 1,700 | ||
Second greatest unrealized loss position | 1,300 | 1,300 | $ 700 | ||
Corporate debt with limited observable inputs [Member] | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Net impairments recognized in earnings | 2,700 | ||||
Portion of OTTI losses recognized in other comprehensive income before taxes | 1,800 | ||||
Other-than-temporary impairment (OTTI) losses | (1,925) | (1,425) | (6,405) | (1,425) | |
Other Investments [Member] | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Other-than-temporary impairment (OTTI) losses | (1,870) | $ 0 | (1,870) | $ 0 | |
Revolving Credit Facility [Member] | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Securities pledged as collateral | $ 126,600 | $ 126,600 |
Investments (Other Investments)
Investments (Other Investments) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Other Investments | ||
Other investments | $ 91,410 | $ 86,057 |
Investments in LPs/LLCs, at cost [Member] | ||
Other Investments | ||
Other investments | 58,381 | 53,258 |
Convertible securities, at fair value [Member] | ||
Other Investments | ||
Other investments | 29,480 | 28,958 |
Other, principally FHLB capital stock at cost [Member] | ||
Other Investments | ||
Other investments | $ 3,549 | $ 3,841 |
Investments (Unconsolidated Sub
Investments (Unconsolidated Subsidiaries) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Unconsolidated Subsidiaries | ||
Investment in unconsolidated subsidiaries | $ 298,375 | $ 276,501 |
Qualified affordable housing tax credit partnerships [Member] | ||
Unconsolidated Subsidiaries | ||
Investment in unconsolidated subsidiaries | 124,109 | 133,143 |
Other tax credit partnerships [Member] | ||
Unconsolidated Subsidiaries | ||
Investment in unconsolidated subsidiaries | 4,306 | 0 |
All Other LPs/LLCs [Member] | ||
Unconsolidated Subsidiaries | ||
Investment in unconsolidated subsidiaries | $ 169,960 | $ 143,358 |
All Other LPs/LLCs [Member] | Maximum [Member] | ||
Unconsolidated Subsidiaries | ||
Percentage Ownership | 25.00% |
Investments (Investments Held i
Investments (Investments Held in a Loss Position) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Investments in LPs/LLCs [Member] | ||
Investments held in an unrealized loss position | ||
Fair Value | $ 33,534 | $ 23,683 |
Unrealized Loss | 2,242 | 3,948 |
Less than 12 months, Fair Value | 33,534 | 22,265 |
Less than 12 months, Unrealized Loss | 2,242 | 3,711 |
More than 12 months, Fair Value | 0 | 1,418 |
More than 12 months, Unrealized Loss | 0 | 237 |
U.S. Treasury obligations [Member] | ||
Investments held in an unrealized loss position | ||
Fair Value | 8,791 | 61,209 |
Unrealized Loss | 32 | 987 |
Less than 12 months, Fair Value | 2,931 | 46,869 |
Less than 12 months, Unrealized Loss | 8 | 617 |
More than 12 months, Fair Value | 5,860 | 14,340 |
More than 12 months, Unrealized Loss | 24 | 370 |
US Government-sponsored Enterprises Debt Securities [Member] | ||
Investments held in an unrealized loss position | ||
Fair Value | 1,463 | 6,268 |
Unrealized Loss | 6 | 100 |
Less than 12 months, Fair Value | 1,463 | 2,775 |
Less than 12 months, Unrealized Loss | 6 | 44 |
More than 12 months, Fair Value | 0 | 3,493 |
More than 12 months, Unrealized Loss | 0 | 56 |
State and municipal bonds [Member] | ||
Investments held in an unrealized loss position | ||
Fair Value | 48,882 | 39,831 |
Unrealized Loss | 1,132 | 335 |
Less than 12 months, Fair Value | 44,184 | 18,910 |
Less than 12 months, Unrealized Loss | 948 | 84 |
More than 12 months, Fair Value | 4,698 | 20,921 |
More than 12 months, Unrealized Loss | 184 | 251 |
Corporate debt [Member] | ||
Investments held in an unrealized loss position | ||
Fair Value | 471,107 | 423,107 |
Unrealized Loss | 27,280 | 17,103 |
Less than 12 months, Fair Value | 400,127 | 326,804 |
Less than 12 months, Unrealized Loss | 15,316 | 13,236 |
More than 12 months, Fair Value | 70,980 | 96,303 |
More than 12 months, Unrealized Loss | 11,964 | 3,867 |
Residential mortgage-backed securities [Member] | ||
Investments held in an unrealized loss position | ||
Fair Value | 71,621 | 45,006 |
Unrealized Loss | 553 | 448 |
Less than 12 months, Fair Value | 62,177 | 14,406 |
Less than 12 months, Unrealized Loss | 418 | 31 |
More than 12 months, Fair Value | 9,444 | 30,600 |
More than 12 months, Unrealized Loss | 135 | 417 |
Agency commercial mortgage-backed securities [Member] | ||
Investments held in an unrealized loss position | ||
Fair Value | 425 | 4,783 |
Unrealized Loss | 20 | 59 |
Less than 12 months, Fair Value | 0 | 70 |
Less than 12 months, Unrealized Loss | 0 | 0 |
More than 12 months, Fair Value | 425 | 4,713 |
More than 12 months, Unrealized Loss | 20 | 59 |
Other commercial mortgage-backed securities [Member] | ||
Investments held in an unrealized loss position | ||
Fair Value | 8,428 | 13,860 |
Unrealized Loss | 61 | 99 |
Less than 12 months, Fair Value | 5,084 | 7,005 |
Less than 12 months, Unrealized Loss | 43 | 28 |
More than 12 months, Fair Value | 3,344 | 6,855 |
More than 12 months, Unrealized Loss | 18 | 71 |
Other asset-backed securities [Member] | ||
Investments held in an unrealized loss position | ||
Fair Value | 24,421 | 62,577 |
Unrealized Loss | 17 | 205 |
Less than 12 months, Fair Value | 16,458 | 59,176 |
Less than 12 months, Unrealized Loss | 9 | 109 |
More than 12 months, Fair Value | 7,963 | 3,401 |
More than 12 months, Unrealized Loss | 8 | 96 |
Debt Securities [Member] | ||
Investments held in an unrealized loss position | ||
Fair Value | 635,138 | 656,641 |
Unrealized Loss | 29,101 | 19,336 |
Less than 12 months, Fair Value | 532,424 | 476,015 |
Less than 12 months, Unrealized Loss | 16,748 | 14,149 |
More than 12 months, Fair Value | 102,714 | 180,626 |
More than 12 months, Unrealized Loss | $ 12,353 | $ 5,187 |
Investments (Net Investment Inc
Investments (Net Investment Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Net Investment Income | ||||
Investment fees and expenses | $ (1,864) | $ (1,712) | $ (4,889) | $ (6,360) |
Net investment income | 26,942 | 32,830 | 82,201 | 92,788 |
Fixed maturities [Member] | ||||
Net Investment Income | ||||
Investment Income | 24,127 | 28,442 | 74,110 | 85,402 |
Equities [Member] | ||||
Net Investment Income | ||||
Investment Income | 3,506 | 2,661 | 9,974 | 7,479 |
Short-term investments and Other invested assets [Member] | ||||
Net Investment Income | ||||
Investment Income | 515 | 2,793 | 1,417 | 4,723 |
BOLI [Member] | ||||
Net Investment Income | ||||
Investment Income | $ 658 | $ 646 | $ 1,589 | $ 1,544 |
Investments (Net Realized Inves
Investments (Net Realized Investment Gains (Losses)) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Gain (Loss) on Investments [Line Items] | ||||
Other-than-temporary impairment (OTTI) losses | $ (3,795) | $ (1,425) | $ (8,275) | $ (1,475) |
Corporate debt | 385 | 268 | 2,174 | 268 |
Net impairments recognized in earnings | (3,410) | (1,157) | (6,101) | (1,207) |
Gross realized gains, available-for-sale securities | 2,739 | 736 | 10,379 | 3,711 |
Gross realized (losses), available-for-sale securities | (2,548) | (52) | (4,613) | (371) |
Net realized gains (losses), trading securities | 402 | 3,227 | 12,594 | 21,830 |
Net realized gains (losses), Other investments | (361) | 55 | 357 | 321 |
Change in unrealized holding gains (losses), trading securities | (32,621) | (10,402) | (47,513) | (17,906) |
Change in unrealized holding gains (losses), convertible securities, carried at fair value | (971) | (538) | (1,669) | 1,281 |
Other | 138 | 0 | 946 | 0 |
Total net realized investment gains (losses) | (36,632) | (8,131) | (35,620) | 7,659 |
US States and Political Subdivisions Debt Securities [Member] | ||||
Gain (Loss) on Investments [Line Items] | ||||
Other-than-temporary impairment (OTTI) losses | 0 | 0 | 0 | (50) |
Corporate debt [Member] | ||||
Gain (Loss) on Investments [Line Items] | ||||
Other-than-temporary impairment (OTTI) losses | (1,925) | (1,425) | (6,405) | (1,425) |
Corporate debt | 1,800 | |||
Net impairments recognized in earnings | (2,700) | |||
Other Investments [Member] | ||||
Gain (Loss) on Investments [Line Items] | ||||
Other-than-temporary impairment (OTTI) losses | $ (1,870) | $ 0 | $ (1,870) | $ 0 |
Investments (Credit Losses Reco
Investments (Credit Losses Recorded in Earnings) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Cumulative credit losses recorded in earnings related to impaired debt securities | ||||
Accumulated credit losses related to impaired debt securities, Beginning Balance | $ 2,630 | $ 83 | $ 232 | $ 83 |
No OTTI has been previously recognized | 0 | 149 | 1,830 | 149 |
OTTI has been previously recognized | 623 | 0 | 1,484 | 0 |
Securities sold during the period (realized) | 0 | 0 | (293) | 0 |
Accumulated credit losses related to impaired debt securities, Ending Balance | $ 3,253 | $ 232 | $ 3,253 | $ 232 |
Investments (Sales and Purchase
Investments (Sales and Purchases of Available-for-Sale Securities) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Information regarding sales and purchases of available-for-sale securities | ||||
Proceeds from sales (exclusive of maturities and paydowns) | $ 119,000 | $ 24,800 | $ 420,000 | $ 147,300 |
Purchases | $ 90,900 | $ 146,500 | $ 466,248 | $ 511,894 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Income Tax Disclosure [Abstract] | ||
Federal income taxes payable | $ 1.7 | |
Income taxes receivable | $ 1.1 | |
Unrecognized tax benefits | $ 0.8 | $ 0.6 |
Deferred Policy Acquisition C46
Deferred Policy Acquisition Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Insurance [Abstract] | ||||
Amortization of deferred policy acquisition costs | $ 21.1 | $ 21.2 | $ 60 | $ 62.4 |
Reserve for Losses and Loss A47
Reserve for Losses and Loss Adjustment Expenses (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Summary of reserve for losses and loss adjustment expenses | ||||
Minimum period for claims resolution | 5 years | |||
Net losses: | ||||
Favorable development of reserves established in prior years, net | $ 36.2 | $ 42.9 | $ 104.8 | $ 133.3 |
Liability for unpaid claims and claims adjustment expense incurred claims prior years accident years | 2008 through 2012 | 2007 through 2012 | 2008 through 2012 | 2007 through 2012 |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) $ in Millions | Sep. 30, 2015USD ($) | Sep. 30, 2015GBP (£) |
Non-Public Investment Entities [Member] | ||
Other Commitment, Fiscal Year Maturity [Abstract] | ||
Commitments Total | $ 130.4 | |
Commitments due 2015 | 31.3 | |
Commitments due 2016 and 2017 | 96 | |
Commitments due 2018 and 2019 | 2.3 | |
Commitments due thereafter | 0.8 | |
Qualified Affordable Housing Project [Member] | ||
Other Commitment, Fiscal Year Maturity [Abstract] | ||
Commitments due 2015 | 11.7 | |
Commitments due 2016 and 2017 | 0.5 | |
Commitments due 2018 and 2019 | 0.3 | |
Commitments due thereafter | 0.7 | |
Qualified affordable housing project investments | 13.2 | |
Lloyds Syndicate [Member] | ||
Other Commitment, Fiscal Year Maturity [Abstract] | ||
Required FAL Deposit | $ 89.7 | |
Current lending capacity under revolving credit agreement | £ | £ 10,000,000 | |
Interest rate on revolving credit agreement | 8.50% | 8.50% |
Unused commitments to extend credit | £ | £ 1,500,000 | |
Remaining borrowing capacity | $ 2.3 |
Long-term Debt (Details)
Long-term Debt (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | |
Outstanding long-term debt | ||
Long-term debt | $ 350,000,000 | $ 250,000,000 |
Senior Notes [Member] | Senior notes due 2023 [Member] | ||
Outstanding long-term debt | ||
Long-term debt | $ 250,000,000 | 250,000,000 |
Senior notes due 2023, unsecured, interest at 5.3% annually | 5.30% | |
Line of Credit [Member] | Revolving Credit Facility [Member] | ||
Outstanding long-term debt | ||
Long-term debt | $ 100,000,000 | $ 0 |
Senior notes due 2023, unsecured, interest at 5.3% annually | 0.78% | |
Maximum outstanding borrowings under revolving credit agreement | $ 200,000,000 | |
Accordion feature | 50,000,000 | |
Minimum net worth, excluding AOCI | $ 1,300,000,000 | |
Minimum [Member] | Line of Credit [Member] | Revolving Credit Facility [Member] | ||
Outstanding long-term debt | ||
Commitment fee percentage | 0.125% | |
Basis spread on variable rate | 0.00% | |
Maximum [Member] | Line of Credit [Member] | Revolving Credit Facility [Member] | ||
Outstanding long-term debt | ||
Commitment fee percentage | 0.25% | |
Basis spread on variable rate | 1.63% |
Shareholders' Equity (Narrative
Shareholders' Equity (Narrative) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||
Feb. 28, 2015 | Feb. 28, 2014 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Authorized common stock (in shares) | 100,000,000 | 100,000,000 | 100,000,000 | ||||||||
Authorized preferred stock (in shares) | 50,000,000 | 50,000,000 | 50,000,000 | ||||||||
Quarterly dividend declared, per share (USD per share) | $ 0.31 | $ 0.31 | $ 0.31 | $ 0.3 | $ 0.3 | $ 0.30 | $ 0.93 | $ 0.9 | |||
Dividend declared | $ 16,500,000 | $ 17,300,000 | $ 50,400,000 | $ 52,900,000 | |||||||
Total authorizations which remain available for use | 116,400,000 | 116,400,000 | |||||||||
Authorized repurchase amount | 100,000,000 | $ 100,000,000 | |||||||||
Common shares acquired (in shares) | 3,600,000 | 3,700,000 | |||||||||
Cost of common shares reacquired | $ 165,178,000 | $ 167,242,000 | |||||||||
Share-based compensation | 2,700,000 | 2,400,000 | 7,638,000 | 8,022,000 | |||||||
Tax benefits from share-based compensation expense | 900,000 | $ 800,000 | 2,700,000 | $ 2,800,000 | |||||||
Bonus compensation shares issued (in shares) | 28,000 | ||||||||||
Other comprehensive income (loss), defined benefit plans, net of tax | (1,000,000) | ||||||||||
Non-credit loss, net of tax | 900,000 | 900,000 | $ 500,000 | ||||||||
Unrecognized changes in defined benefit plan liabilities | $ (1,000,000) | $ (1,000,000) | |||||||||
Tax rate used to compute the tax effect of amounts reclassified out of OCI | 35.00% | 35.00% | 35.00% | 35.00% | |||||||
Restricted Share Units [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Awards in period (in shares) | 92,000 | ||||||||||
Fair value of each unit awarded (USD per share) | $ 42.73 | ||||||||||
Award vesting period | 3 years | ||||||||||
Shares issued in period for share-based compensation (in shares) | 28,000 | ||||||||||
Performance Shares [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Awards in period (in shares) | 106,500 | ||||||||||
Fair value of each unit awarded (USD per share) | $ 42.73 | ||||||||||
Award vesting period | 3 years | ||||||||||
Shares issued in period for share-based compensation (in shares) | 116,000 | ||||||||||
Minimum [Member] | Performance Shares [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Award payout rate | 104.00% | 75.00% | |||||||||
Maximum [Member] | Performance Shares [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Award payout rate | 125.00% | 125.00% |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Reclassifications from AOCI to net income, available-for-sale securities: | ||||
Tax effect (at 35%) | $ (1,122) | $ (12,525) | $ (16,684) | $ (43,328) |
Net income | $ 10,276 | $ 34,778 | $ 81,248 | $ 131,451 |
Tax rate used to compute the tax effect of OCI components | 35.00% | 35.00% | 35.00% | 35.00% |
Deferred tax expense (benefit) included in OCI | $ (2,555) | $ (7,851) | $ (11,905) | $ 3,784 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||
Reclassifications from AOCI to net income, available-for-sale securities: | ||||
Tax effect (at 35%) | 472 | 166 | (537) | (747) |
Net income | (876) | (307) | 998 | 1,386 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Realized investment gains (losses) [Member] | ||||
Reclassifications from AOCI to net income, available-for-sale securities: | ||||
Reclassification from AOCI to income | $ (1,348) | $ (473) | $ 1,535 | $ 2,133 |
Variable Interest Entities (Det
Variable Interest Entities (Details) - Variable Interest Entity, Not Primary Beneficiary [Member] - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Other Investments [Member] | ||
Variable Interest Entity [Line Items] | ||
VIE interests carrying value | $ 38.1 | $ 33.3 |
VIE interest maximum loss exposure | 38.1 | 33.3 |
Investment in unconsolidated subsidiaries [Member] | ||
Variable Interest Entity [Line Items] | ||
VIE interests carrying value | 69.1 | 65 |
VIE interest maximum loss exposure | $ 69.1 | $ 65 |
Segment Information (Narrative)
Segment Information (Narrative) (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)Segment | Sep. 30, 2014USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of operating segments | Segment | 4 | |||
Workers Compensation [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Worker's compensation SPC percentage ceded | 100.00% | 100.00% | ||
Lloyds Syndicate [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Proportion of Capital Provided to support Lloyd's Syndicate 1729 | 58.00% | 58.00% | ||
Specialty Property and Casualty [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Premiums Ceded To Lloyd's Syndicate Segment | $ 3.6 | $ 1.1 | $ 10.6 | $ 1.6 |
Segment Information (Financial
Segment Information (Financial Data by Segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Segment Reporting Information [Line Items] | ||||
Net premiums earned | $ 182,085 | $ 177,028 | $ 529,277 | $ 525,061 |
Net investment income | 26,942 | 32,830 | 82,201 | 92,788 |
Equity in earnings (loss) of unconsolidated subsidiaries | (221) | 298 | 3,821 | 2,767 |
Net realized gains (losses) | (36,632) | (8,131) | (35,620) | 7,659 |
Other income | 2,759 | 1,808 | 6,504 | 6,055 |
Net losses and loss adjustment expenses | (108,806) | (99,222) | (317,884) | (287,643) |
Underwriting, policy acquisition and operating expenses | (53,025) | (54,185) | (157,908) | (158,856) |
Segregated portfolio cells dividend (expense) income | 1,933 | 483 | (1,481) | (2,355) |
Interest expense | (3,637) | (3,606) | (10,978) | (10,697) |
Income tax benefit (expense) | (1,122) | (12,525) | (16,684) | (43,328) |
Segment operating results | 10,276 | 34,778 | 81,248 | 131,451 |
Depreciation and amortization | 9,746 | 9,850 | 28,249 | 29,800 |
Operating Segments [Member] | Specialty P&C [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net premiums earned | 115,593 | 123,791 | 343,065 | 374,704 |
Other income | 1,660 | 1,071 | 4,533 | 4,167 |
Net losses and loss adjustment expenses | (63,974) | (63,639) | (197,056) | (191,263) |
Underwriting, policy acquisition and operating expenses | (26,251) | (33,814) | (80,057) | (101,044) |
Segment operating results | 27,028 | 27,409 | 70,485 | 86,564 |
Depreciation and amortization | 1,964 | 2,334 | 6,107 | 6,708 |
Operating Segments [Member] | Workers Compensation [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net premiums earned | 54,577 | 49,792 | 159,436 | 143,960 |
Other income | 61 | 179 | 361 | 503 |
Net losses and loss adjustment expenses | (36,132) | (33,046) | (102,545) | (91,975) |
Underwriting, policy acquisition and operating expenses | (16,231) | (14,785) | (47,421) | (45,379) |
Segregated portfolio cells dividend (expense) income | 1,933 | 483 | (1,481) | (2,355) |
Segment operating results | 4,208 | 2,623 | 8,350 | 4,754 |
Depreciation and amortization | 1,416 | 1,602 | 4,285 | 4,384 |
Operating Segments [Member] | Lloyds Syndicate [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net premiums earned | 11,915 | 3,445 | 26,776 | 6,397 |
Net investment income | 260 | 120 | 653 | 244 |
Net realized gains (losses) | 9 | 0 | 25 | |
Other income | (283) | (79) | 209 | (79) |
Net losses and loss adjustment expenses | (8,700) | (2,537) | (18,283) | (4,405) |
Underwriting, policy acquisition and operating expenses | (5,644) | (2,584) | (13,187) | (5,999) |
Income tax benefit (expense) | (132) | (752) | ||
Segment operating results | (2,575) | (1,635) | (4,559) | (3,842) |
Depreciation and amortization | 94 | 157 | 330 | 329 |
Operating Segments [Member] | Corporate [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net premiums earned | 0 | 0 | 0 | 0 |
Net investment income | 26,682 | 32,710 | 81,548 | 92,544 |
Equity in earnings (loss) of unconsolidated subsidiaries | (221) | 298 | 3,821 | 2,767 |
Net realized gains (losses) | (36,641) | (8,131) | (35,645) | 7,659 |
Other income | 1,559 | 824 | 1,828 | 1,856 |
Underwriting, policy acquisition and operating expenses | (5,137) | (3,189) | (17,670) | (6,826) |
Interest expense | (3,637) | (3,606) | (10,978) | (10,697) |
Income tax benefit (expense) | (990) | (12,525) | (15,932) | (43,328) |
Segment operating results | (18,385) | 6,381 | 6,972 | 43,975 |
Depreciation and amortization | 6,272 | 5,757 | 17,527 | 18,379 |
Intersegment Eliminations [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net premiums earned | 0 | 0 | 0 | 0 |
Other income | (238) | (187) | (427) | (392) |
Underwriting, policy acquisition and operating expenses | 238 | 187 | 427 | 392 |
Segment operating results | 0 | 0 | 0 | 0 |
Depreciation and amortization | $ 0 | $ 0 | $ 0 | $ 0 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Segment Reporting Information [Line Items] | |||||
Net premiums earned | $ 182,085 | $ 177,028 | $ 529,277 | $ 525,061 | |
Operating Segments [Member] | Specialty P&C [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Ceded premiums earned | [1] | (19,199) | (13,655) | (55,481) | (36,110) |
Net premiums earned | 115,593 | 123,791 | 343,065 | 374,704 | |
Operating Segments [Member] | Workers Compensation [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Ceded premiums earned | (6,000) | (6,898) | (18,746) | (15,995) | |
Net premiums earned | 54,577 | 49,792 | 159,436 | 143,960 | |
Operating Segments [Member] | Lloyds Syndicate [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Ceded premiums earned | (1,058) | (640) | (3,056) | (713) | |
Net premiums earned | 11,915 | 3,445 | 26,776 | 6,397 | |
Operating Segments [Member] | Healthcare professional liability [Member] | Specialty P&C [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Gross premiums earned | 118,624 | 120,623 | 349,511 | 361,179 | |
Operating Segments [Member] | Legal professional liability [Member] | Specialty P&C [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Gross premiums earned | 6,994 | 7,145 | 21,433 | 21,147 | |
Operating Segments [Member] | Medical technology and life sciences product liability [Member] | Specialty P&C [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Gross premiums earned | 8,800 | 9,258 | 26,457 | 27,043 | |
Operating Segments [Member] | Other [Member] | Specialty P&C [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Gross premiums earned | 374 | 420 | 1,145 | 1,445 | |
Operating Segments [Member] | Traditional business [Member] | Workers Compensation [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Gross premiums earned | 43,525 | 42,345 | 129,515 | 119,702 | |
Operating Segments [Member] | Alternative market business [Member] | Workers Compensation [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Gross premiums earned | 17,052 | 14,345 | 48,667 | 40,253 | |
Operating Segments [Member] | Property, Liability and Casualty Insurance Product Line [Member] | Lloyds Syndicate [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Gross premiums earned | [1] | $ 12,973 | $ 4,085 | $ 29,832 | $ 7,110 |
[1] | Includes premium ceded from the Specialty P&C Segment to the Lloyd's Syndicate Segment of $3.6 million and $10.6 million for the three and nine months ended September 30, 2015 and $1.1 million and $1.6 million for the three and nine months ended September 30, 2014, respectively. |