Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 19, 2016 | Jun. 30, 2015 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | PROASSURANCE CORP | ||
Entity Central Index Key | 1,127,703 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 53,081,080 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 2,449,774,306 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Investments | ||
Fixed maturities, available for sale, at fair value; amortized cost, $2,722,063 and $3,055,477, respectively | $ 2,760,287 | $ 3,145,027 |
Equity securities, trading, at fair value; cost, $319,320 and $283,107, respectively | 322,353 | 314,482 |
Short-term investments | 119,236 | 131,259 |
Business owned life insurance | 57,213 | 56,381 |
Investment in unconsolidated subsidiaries | 311,908 | 276,501 |
Other investments, $30,611 and $28,958 at fair value, respectively, otherwise at cost or amortized cost | 79,133 | 86,057 |
Total Investments | 3,650,130 | 4,009,707 |
Cash and cash equivalents | 241,100 | 197,040 |
Premiums receivable | 217,034 | 202,528 |
Receivable from reinsurers on paid losses and loss adjustment expenses | 9,249 | 6,494 |
Receivable from reinsurers on unpaid losses and loss adjustment expenses | 249,350 | 237,966 |
Prepaid reinsurance premiums | 34,050 | 32,115 |
Deferred policy acquisition costs | 44,388 | 38,790 |
Deferred tax asset, net | 15,097 | 0 |
Real estate, net | 38,470 | 39,799 |
Intangible assets | 92,462 | 100,733 |
Goodwill | 210,725 | 210,725 |
Other assets | 106,108 | 93,263 |
Total Assets | 4,908,163 | 5,169,160 |
Policy liabilities and accruals | ||
Reserve for losses and loss adjustment expenses | 2,005,326 | 2,058,266 |
Unearned premiums | 362,066 | 345,828 |
Reinsurance premiums payable | 30,114 | 17,451 |
Total Policy Liabilities | 2,397,506 | 2,421,545 |
Deferred tax liability, net | 0 | 18,818 |
Other liabilities | 202,303 | 320,853 |
Debt | 350,000 | 250,000 |
Total Liabilities | 2,949,809 | 3,011,216 |
Shareholders’ Equity: | ||
Common shares, par value $0.01 per share, 100,000,000 shares authorized, 62,503,255 and 62,297,214 shares issued, respectively | 625 | 623 |
Additional paid-in capital | 365,399 | 359,577 |
Accumulated other comprehensive income (loss), net of deferred tax expense (benefit) of $12,972 and $31,342, respectively | 23,855 | 58,204 |
Retained earnings | 1,988,035 | 1,991,704 |
Treasury shares, at cost, 9,402,697 shares and 5,763,388 shares, respectively | (419,560) | (252,164) |
Total Shareholders’ Equity | 1,958,354 | 2,157,944 |
Total Liabilities and Shareholders’ Equity | $ 4,908,163 | $ 5,169,160 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Fixed maturities, available for sale, at fair value; amortized cost | $ 2,722,063 | $ 3,055,477 |
Equity securities, trading, cost | 319,320 | 283,107 |
Other investments, portion carried at fair value | $ 30,611 | $ 28,958 |
Common shares, par value (USD per share) | $ 0.01 | $ 0.01 |
Common shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common shares, shares issued (in shares) | 62,503,255 | 62,297,214 |
Deferred tax expense (benefit) on accumulated other comprehensive income (loss) | $ 12,972 | $ 31,342 |
Treasury shares, number of shares (in shares) | 9,402,697 | 5,763,388 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Capital - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Increase (Decrease) in Stockholders' Equity: | |||||||
Beginning Balance | $ 2,157,944 | $ 2,394,414 | $ 2,157,944 | $ 2,394,414 | $ 2,270,580 | ||
Common shares reacquired | (169,793) | (222,360) | (32,454) | ||||
Common shares issued for compensation and effect of shares reissued to stock purchase plan | 3,629 | 4,200 | 4,085 | ||||
Share-based compensation | 9,166 | 10,056 | 9,242 | ||||
Net effect of restricted and performance shares issued and stock options exercised | (4,574) | (3,010) | (4,066) | ||||
Dividends to shareholders | (119,866) | (220,464) | (64,777) | ||||
Other comprehensive income (loss) | (34,349) | (1,457) | (85,719) | ||||
Net income | $ 34,948 | 37,814 | $ 65,114 | 46,731 | 116,197 | 196,565 | 297,523 |
Ending Balance | 1,958,354 | 2,157,944 | 1,958,354 | 2,157,944 | 2,394,414 | ||
Common Stock | |||||||
Increase (Decrease) in Stockholders' Equity: | |||||||
Beginning Balance | 623 | 621 | 623 | 621 | 619 | ||
Common shares reacquired | 0 | 0 | 0 | ||||
Common shares issued for compensation and effect of shares reissued to stock purchase plan | 0 | 0 | 0 | ||||
Share-based compensation | 0 | 0 | 0 | ||||
Net effect of restricted and performance shares issued and stock options exercised | 2 | 2 | 2 | ||||
Dividends to shareholders | 0 | 0 | 0 | ||||
Other comprehensive income (loss) | 0 | 0 | 0 | ||||
Net income | 0 | 0 | 0 | ||||
Ending Balance | 625 | 623 | 625 | 623 | 621 | ||
Additional Paid-in Capital | |||||||
Increase (Decrease) in Stockholders' Equity: | |||||||
Beginning Balance | 359,577 | 349,894 | 359,577 | 349,894 | 341,780 | ||
Common shares reacquired | 0 | 0 | 0 | ||||
Common shares issued for compensation and effect of shares reissued to stock purchase plan | 1,232 | 2,639 | 2,940 | ||||
Share-based compensation | 9,166 | 10,056 | 9,242 | ||||
Net effect of restricted and performance shares issued and stock options exercised | (4,576) | (3,012) | (4,068) | ||||
Dividends to shareholders | 0 | 0 | 0 | ||||
Other comprehensive income (loss) | 0 | 0 | 0 | ||||
Net income | 0 | 0 | 0 | ||||
Ending Balance | 365,399 | 359,577 | 365,399 | 359,577 | 349,894 | ||
Accumulated Other Comprehensive Income (Loss) | |||||||
Increase (Decrease) in Stockholders' Equity: | |||||||
Beginning Balance | 58,204 | 59,661 | 58,204 | 59,661 | 145,380 | ||
Common shares reacquired | 0 | 0 | 0 | ||||
Common shares issued for compensation and effect of shares reissued to stock purchase plan | 0 | 0 | 0 | ||||
Share-based compensation | 0 | 0 | 0 | ||||
Net effect of restricted and performance shares issued and stock options exercised | 0 | 0 | 0 | ||||
Dividends to shareholders | 0 | 0 | 0 | ||||
Other comprehensive income (loss) | (34,349) | (1,457) | (85,719) | ||||
Net income | 0 | 0 | 0 | ||||
Ending Balance | 23,855 | 58,204 | 23,855 | 58,204 | 59,661 | ||
Retained Earnings | |||||||
Increase (Decrease) in Stockholders' Equity: | |||||||
Beginning Balance | 1,991,704 | 2,015,603 | 1,991,704 | 2,015,603 | 1,782,857 | ||
Common shares reacquired | 0 | 0 | 0 | ||||
Common shares issued for compensation and effect of shares reissued to stock purchase plan | 0 | 0 | 0 | ||||
Share-based compensation | 0 | 0 | 0 | ||||
Net effect of restricted and performance shares issued and stock options exercised | 0 | 0 | 0 | ||||
Dividends to shareholders | (119,866) | (220,464) | (64,777) | ||||
Other comprehensive income (loss) | 0 | 0 | 0 | ||||
Net income | 116,197 | 196,565 | 297,523 | ||||
Ending Balance | 1,988,035 | 1,991,704 | 1,988,035 | 1,991,704 | 2,015,603 | ||
Treasury Stock | |||||||
Increase (Decrease) in Stockholders' Equity: | |||||||
Beginning Balance | $ (252,164) | $ (31,365) | (252,164) | (31,365) | (56) | ||
Common shares reacquired | (169,793) | (222,360) | (32,454) | ||||
Common shares issued for compensation and effect of shares reissued to stock purchase plan | 2,397 | 1,561 | 1,145 | ||||
Share-based compensation | 0 | 0 | 0 | ||||
Net effect of restricted and performance shares issued and stock options exercised | 0 | 0 | 0 | ||||
Dividends to shareholders | 0 | 0 | 0 | ||||
Other comprehensive income (loss) | 0 | 0 | 0 | ||||
Net income | 0 | 0 | 0 | ||||
Ending Balance | $ (419,560) | $ (252,164) | $ (419,560) | $ (252,164) | $ (31,365) |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues | |||
Net premiums earned | $ 694,149 | $ 699,731 | $ 527,919 |
Net investment income | 108,660 | 125,557 | 129,265 |
Equity in earnings (loss) of unconsolidated subsidiaries | 3,682 | 3,986 | 7,539 |
Net realized investment gains (losses): | |||
Other-than-temporary impairment (OTTI) losses | (19,917) | (1,475) | (71) |
Portion of OTTI losses recognized in other comprehensive income before taxes | 4,572 | 268 | 0 |
Net impairment losses recognized in earnings | (15,345) | (1,207) | (71) |
Other net realized investment gains (losses) | (26,294) | 15,861 | 67,975 |
Total net realized investment gains (losses) | (41,639) | 14,654 | 67,904 |
Other income | 7,227 | 8,398 | 7,551 |
Total revenues | 772,079 | 852,326 | 740,178 |
Expenses | |||
Losses and loss adjustment expenses | 456,862 | 379,232 | 243,015 |
Reinsurance recoveries | (46,151) | (16,148) | (18,254) |
Net losses and loss adjustment expenses | 410,711 | 363,084 | 224,761 |
Underwriting, policy acquisition and operating expenses | 217,064 | 211,311 | 147,817 |
Segregated portfolio cells dividend expense (income) | 853 | 1,842 | 0 |
Interest expense | 14,596 | 14,084 | 2,755 |
Total expenses | 643,224 | 590,321 | 375,333 |
Gain on acquisition | 0 | 0 | 32,314 |
Income before income taxes | 128,855 | 262,005 | 397,159 |
Provision for income taxes | |||
Current expense (benefit) | 28,652 | 58,645 | 74,977 |
Deferred expense (benefit) | (15,994) | 6,795 | 24,659 |
Total income tax expense (benefit) | 12,658 | 65,440 | 99,636 |
Net income | 116,197 | 196,565 | 297,523 |
Other comprehensive income (loss), after tax, net of reclassification adjustments | (34,349) | (1,457) | (85,719) |
Comprehensive income | $ 81,848 | $ 195,108 | $ 211,804 |
Earnings per share: | |||
Basic (USD per share) | $ 2.12 | $ 3.32 | $ 4.82 |
Diluted (USD per share) | $ 2.11 | $ 3.30 | $ 4.80 |
Weighted average number of common shares outstanding: | |||
Basic (in shares) | 54,795 | 59,285 | 61,761 |
Diluted (in shares) | 55,017 | 59,525 | 62,020 |
Cash dividends declared per common share (USD per share) | $ 2.24 | $ 3.86 | $ 1.05 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Operating Activities | |||
Net income | $ 116,197 | $ 196,565 | $ 297,523 |
Adjustments to reconcile income to net cash provided by operating activities: | |||
Amortization, net of accretion | 28,963 | 32,638 | 31,295 |
Depreciation | 7,437 | 6,956 | 4,538 |
Gain on acquisition | 0 | 0 | (32,314) |
(Increase) decrease in cash surrender value of BOLI | (2,032) | (2,007) | (1,960) |
Net realized investment (gains) losses | 41,639 | (14,654) | (67,904) |
Share-based compensation | 9,166 | 10,056 | 9,242 |
Deferred income taxes | (15,994) | 6,795 | 24,659 |
Policy acquisition costs, net amortization (net deferral) | (5,598) | 10 | (5,820) |
Equity in earnings of unconsolidated subsidiaries, excluding income distributions received | (3,650) | 29 | (7,242) |
Other | 252 | (8,784) | (3,014) |
Other changes in assets and liabilities, excluding effect of business combinations: | |||
Premiums receivable | (14,506) | (15,136) | (6,105) |
Receivable from reinsurers on paid losses and loss adjustment expenses | (2,755) | 3,263 | 2,601 |
Receivable from reinsurers on unpaid losses and loss adjustment expenses | (11,384) | 27,114 | 15,625 |
Prepaid reinsurance premiums | (1,935) | (5,672) | (849) |
Other assets | (10,458) | 36,924 | 9,582 |
Reserve for losses and loss adjustment expenses | (52,940) | (167,747) | (179,677) |
Unearned premiums | 16,238 | 10,097 | (1,740) |
Reinsurance premiums payable | 12,663 | (26,377) | (13,269) |
Other liabilities | 657 | 5,932 | (36,569) |
Net cash provided (used) by operating activities | 111,960 | 96,002 | 38,602 |
Purchases of: | |||
Fixed maturities, available for sale | (580,577) | (645,114) | (519,161) |
Equity securities, trading | (271,608) | (119,865) | (87,604) |
Other investments | (33,366) | (25,109) | (34,699) |
Funding of qualified affordable housing tax credit limited partnerships | (12,477) | (8,611) | (63,489) |
Investment in unconsolidated subsidiaries | (61,444) | (52,295) | (19,228) |
Proceeds from sales or maturities of: | |||
Fixed maturities, available for sale | 886,886 | 703,828 | 970,708 |
Equity securities, trading | 236,476 | 134,005 | 123,645 |
Other investments | 33,638 | 19,942 | 2,352 |
Distributions from unconsolidated subsidiaries | 28,017 | 5,428 | 14,632 |
Net sales or maturities (purchases) of short-term investments | 11,932 | 140,411 | (176,092) |
Cash received in (paid in) acquisition | 0 | 35,013 | 22,780 |
Deposit made for future acquisition | 0 | 0 | (205,244) |
Unsettled security transactions, net change | 2,339 | (2,953) | 205 |
Funds at Lloyd's in support of Syndicate 1729, returned (deposited) | 0 | 8,690 | (8,699) |
(Increase) decrease in restricted cash | 0 | 78,000 | (78,000) |
Purchases of capital assets | (9,524) | (2,883) | (5,847) |
Other | (2,505) | (1,507) | (4,062) |
Net cash provided (used) by investing activities | 227,787 | 266,980 | (67,803) |
Financing Activities | |||
Proceeds from debt | 0 | 0 | 250,000 |
Borrowing under revolving credit agreement | 100,000 | 0 | 0 |
Repayment of debt | 0 | 0 | (127,183) |
Repurchase of common stock | (172,772) | (222,360) | (29,089) |
Excess tax benefit from share-based payment arrangements | 494 | 2,702 | 2,128 |
Dividends to shareholders | (217,626) | (71,252) | (46,375) |
Other | (5,783) | (4,415) | (9,448) |
Net cash provided (used) by financing activities | (295,687) | (295,325) | 40,033 |
Increase (decrease) in cash and cash equivalents | 44,060 | 67,657 | 10,832 |
Cash and cash equivalents at beginning of period | 197,040 | 129,383 | 118,551 |
Cash and cash equivalents at end of period | 241,100 | 197,040 | 129,383 |
Supplemental Disclosure of Cash Flow Information | |||
Cash paid during the year for income taxes, net of refunds | 42,784 | 22,968 | 117,107 |
Cash paid during the year for interest | 13,996 | 13,408 | 913 |
Significant non-cash transactions | |||
Deposit transferred as consideration for acquisition | 0 | 205,244 | 153,700 |
Dividends declared and not yet paid | $ 69,447 | $ 167,744 | $ 18,532 |
Accounting Policies
Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Accounting Policies | Accounting Policies Organization and Nature of Business ProAssurance Corporation (ProAssurance, PRA or the Company), a Delaware corporation, is an insurance holding company primarily for wholly owned specialty property and casualty insurance entities including an entity that is the majority capital provider to Syndicate 1729 at Lloyd's of London. Risks insured are primarily liability risks located within the United States. As described in more detail in Note 15 , ProAssurance operates in four reportable segments: Specialty P&C , Workers' Compensation, Lloyd's Syndicate, and Corporate. Principles of Consolidation The accompanying consolidated financial statements include the accounts of ProAssurance Corporation and its wholly-owned subsidiaries. Investments in entities where ProAssurance holds a greater than minor interest but does not hold a controlling interest are accounted for using the equity method. All significant intercompany accounts and transactions are eliminated in consolidation. ProAssurance subsidiaries located in the U.K. are reported on a quarter delay due to timing issues regarding the availability of information, except there is no delay related to subsidiary investments managed in the U.S. as that information is available on an earlier schedule. Basis of Presentation The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and disclosures related to these amounts at the date of the financial statements. Actual results could differ from those estimates. Accounting Policies The significant accounting policies followed by ProAssurance in making estimates that materially affect financial reporting are summarized in these notes to the consolidated financial statements. Recognition of Revenues Insurance premiums are recognized as revenues pro rata over the terms of the policies, which are principally one year in duration. Credit Losses ProAssurance's premium and agency receivables are exposed to credit losses, but to-date have not experienced any significant amount of credit losses. Recorded allowances for credit losses were less than $1.5 million at both December 31, 2015 and 2014 . Neither estimated credit losses or actual credit write-offs exceeded $0.6 million during the years ended December 31, 2015 and 2014 . Earned But Unbilled Premiums Workers’ compensation premiums are determined based upon the payroll of the insured, the applicable premium rates and, where applicable, an experience based modification factor. An audit of the policyholders’ records is conducted after policy expiration to make a final determination of applicable premiums. Audit premium due from or due to a policyholder as a result of an audit is reflected in net premiums earned when billed. ProAssurance tracks, by policy, the amount of additional premium billed in final audit invoices as a percentage of payroll exposure and uses this information to estimate the probable additional amount that it has earned, but not yet billed, as of the balance sheet date. Changes to the EBUB estimate are included in Net premiums earned in the period recognized. As of December 31, 2015 and 2014, ProAssurance carried EBUB of $3.9 million and $3.4 million , respectively, as a part of Premiums receivable. Losses and Loss Adjustment Expenses ProAssurance establishes its reserve for losses and loss adjustment expenses ("reserve for losses" or "reserve") based on estimates of the future amounts necessary to pay claims and expenses associated with the investigation and settlement of claims. The reserve for losses is determined on the basis of individual claims and payments thereon as well as actuarially determined estimates of future losses based on past loss experience, available industry data and projections as to future claims frequency, severity, inflationary trends, judicial trends, legislative changes and settlement patterns. Management establishes the reserve for losses after taking into consideration a variety of factors including the conclusions reached by internal actuaries, premium rates, claims frequency, historical paid and incurred loss development trends, the effect of inflation, general economic trends, the legal and political environment, and the reports received from consulting actuaries. Internal actuaries perform an in-depth review of the reserve for losses at least semi-annually using the loss and exposure data of ProAssurance subsidiaries. Management engages consulting actuaries to review subsidiary loss and exposure data and provide reports to Management regarding the adequacy of reserves. Estimating casualty insurance reserves, and particularly long-tailed insurance reserves, is a complex process. Long-tailed insurance is characterized by the extended period of time between collecting the premium for insuring a risk and the ultimate payment of losses. For a high proportion of the risks insured or reinsured by ProAssurance the period of time required to resolve a claim is often five years or more, and claims may be subject to litigation. Estimating losses for these long-tailed claims requires ProAssurance to make and revise judgments and assessments regarding multiple uncertainties over an extended period of time. As a result, reserve estimates may vary significantly from the eventual outcome. Reserve estimates and the assumptions on which these estimates are predicated are regularly reviewed and updated as new information becomes available. Any adjustments necessary are reflected in then current operations. Due to the size of ProAssurance’s reserve for losses, even a small percentage adjustment to these estimates could have a material effect on earnings in the period in which the adjustment is made, as was the case in 2015 , 2014 and 2013 . The effect of adjustments made to reinsured losses is mitigated by the corresponding adjustment that is made to reinsurance recoveries. Thus, in any given year, ProAssurance may make significant adjustments to gross losses that have little effect on its net losses. Reinsurance Receivables ProAssurance enters into reinsurance agreements whereby other insurance entities agree to assume a portion of the risk associated with certain policies issued by ProAssurance. In return, ProAssurance agrees to pay a premium to the reinsurer. ProAssurance uses reinsurance to provide capacity to write larger limits of liability, to provide reimbursement for losses incurred under the higher limit coverages we offer, to provide protection against losses in excess of policy limits, and as a mechanism for providing custom insurance solutions. Receivable from reinsurers on paid losses and loss adjustment expenses is the estimated amount of losses already paid that will be recoverable from reinsurers. Receivable from reinsurers on unpaid losses and loss adjustment expenses is the estimated amount of future loss payments that will be recoverable from reinsurers. Reinsurance recoveries are the portion of losses incurred during the period that are estimated to be allocable to reinsurers. Premiums ceded are the estimated premiums that will be due to reinsurers with respect to premiums earned and losses incurred during the period. These estimates are based upon management’s estimates of ultimate losses and the portion of those losses that are allocable to reinsurers under the terms of the related reinsurance agreements. Given the uncertainty of the ultimate amounts of losses, these estimates may vary significantly from the eventual outcome. Management regularly reviews these estimates and any adjustments necessary are reflected in the period in which the estimate is changed. Due to the size of the receivable from reinsurers, even a small adjustment to the estimates could have a material effect on ProAssurance’s results of operations for the period in which the change is made. Reinsurance contracts do not relieve ProAssurance from its obligations to policyholders. ProAssurance continually monitors its reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. Any amount determined to be uncollectible is written off in the period in which the uncollectible amount is identified. Investments Fair Values Fair values of investment securities are primarily provided by independent pricing services. The pricing services provide an exchange traded price, if available, or provide an estimated price determined using multiple observable inputs, including exchange traded prices for similar assets. Management reviews valuations of securities obtained from the pricing services for accuracy based upon the specifics of the security, including class, maturity, credit rating, durations, collateral, and comparable markets for similar securities. Multiple observable inputs are not available for certain of our investments, including municipal bonds and corporate debt not actively traded, and investments in LP s/ LLC s. Management values these municipal bonds and corporate debt either using a single non-binding broker quote or pricing models that utilize market based assumptions that have limited observable inputs. Management values certain investments in LP s/ LLC s based on the NAV of the interest held, as provided by the fund. Fixed Maturities and Equity Securities Fixed maturities and equity securities are considered as either available-for-sale or trading securities. Available-for-sale securities are carried at fair value, determined as described above. Exclusive of OTTI losses, discussed in a separate section that follows, unrealized gains and losses on available-for-sale securities are included, net of related tax effects, in Shareholders’ Equity as a component of AOCI . Investment income includes amortization of premium and accretion of discount related to available-for-sale debt securities acquired at other than par value. Debt securities and mandatorily redeemable preferred stock with maturities beyond one year when purchased are classified as fixed maturities. Trading portfolio securities are carried at fair value, determined as described above, with the holding gains and losses included in realized investment gains and losses in the current period. Short-term Investments Short-term investments, which have a maturity at purchase of one year or less, are primarily comprised of investments in U.S. Treasury obligations, commercial paper and money market funds. All balances are reported at amortized cost, which approximates fair value. Other Investments Investments in LP s/ LLC s where ProAssurance has virtually no influence over the operating and financial policies of an investee are accounted for using the cost method. Under the cost method, investments are valued at cost, with investment income recognized when received. Investments in convertible bond securities are carried at fair value as permitted by the accounting guidance for hybrid financial instruments, with changes in fair value recognized in income as a component of Net realized investment gains (losses) during the period of change. Interest on convertible bond securities is recorded on an accrual basis based on contractual interest rates and is included in Net investment income. Investment in Unconsolidated Subsidiaries Investments in LP s/ LLC s where ProAssurance is deemed to have influence because it holds a greater than a minor interest are accounted for using the equity method. Under the equity method, the recorded basis of the investment is adjusted each period for the investor’s pro rata share of the investee’s income or loss. Investments in unconsolidated subsidiaries include tax credit partnerships accounted for using the equity method, whereby ProAssurance’s proportionate share of income or loss is included in investment income. Tax credits received from the partnerships are recognized in the period received as a reduction to current tax expenses. Business Owned Life Insurance ProAssurance owns life insurance contracts on certain management employees. The life insurance contracts are carried at their current cash surrender value. Changes in the cash surrender value are included in income in the current period as investment income. Death proceeds from the contracts are recorded when the proceeds become payable under the policy terms. Realized Gains and Losses Realized investment gains and losses are recognized on the specific identification basis. Other-than-temporary Impairments ProAssurance evaluates its available-for-sale investment securities, which at December 31, 2015 and 2014 consisted entirely of fixed maturity securities, on at least a quarterly basis for the purpose of determining whether declines in fair value below recorded cost basis represent other-than-temporary impairment. We consider an OTTI to have occurred: • if there is intent to sell the security • if it is more likely than not that the security will be required to be sold before full recovery of its amortized cost basis • if the entire amortized basis of the security is not expected to be recovered. The assessment of whether the amortized cost basis of a security, particularly an asset-backed debt security, is expected to be recovered requires management to make assumptions regarding various matters affecting future cash flows. The choice of assumptions is subjective and requires the use of judgment; actual credit losses experienced in future periods may differ from management’s estimates of those credit losses. Methodologies used to estimate the present value of expected cash flows are: • For non-structured fixed maturities (U.S. Treasury securities, obligations of U.S. Government and government agencies and authorities, obligations of states, municipalities and political subdivisions, and corporate debt) the estimate of expected cash flows is determined by projecting a recovery value and a recovery time frame and assessing whether further principal and interest will be received. ProAssurance considers various factors in projecting recovery values and recovery time frames, including the following: • third party research and credit rating reports; • the current credit standing of the issuer, including credit rating downgrades, whether before or after the balance sheet date; • internal assessments and the assessments of external portfolio managers regarding specific circumstances surrounding an investment, which indicate the investment is more or less likely to recover its amortized cost than other investments with a similar structure; • failure of the issuer of the security to make scheduled interest or principal payments; • For structured securities (primarily asset-backed securities), ProAssurance estimates the present value of the security’s cash flows using the effective yield of the security at the date of acquisition (or the most recent implied rate used to accrete the security if the implied rate has changed as a result of a previous impairment or changes in expected cash flows). ProAssurance considers the most recently available six-month averages of the levels of delinquencies, defaults, severities, and prepayments for the collateral (loans) underlying the securitization or, if historical data is not available, sector based assumptions, to estimate expected future cash flows of these securities. Exclusive of securities where there is an intent to sell or where it is not more likely than not that the security will be required to be sold before recovery of its amortized cost basis, OTTI for debt securities is separated into a credit component and a non-credit component. The credit component of an OTTI is the difference between the security’s amortized cost basis and the present value of its expected future cash flows, while the non-credit component is the remaining difference between the security’s fair value and the present value of expected future cash flows. The credit component of the OTTI is recognized in earnings while the non-credit component is recognized in OCI. Investments in tax credit partnerships are evaluated for OTTI by considering both qualitative and quantitative factors which include: whether the current expected cash flows from the investment, primarily tax benefits, are less than those expected at the time the investment was acquired, and ProAssurance's ability and intent to hold the investment until the recovery of its carrying value. Investments in LP s/ LLC s other than tax credit partnerships are evaluated for impairment by comparing ProAssurance’s carrying value to net asset value of ProAssurance’s interest as reported by the LP / LLC . Additionally, Management considers the performance of the LP/LLC relative to the market and its stated objectives, cash flows expected from the interest, and the audited financial statements of the LP / LLC , if available. ProAssurance recognizes OTTI , exclusive of non-credit OTTI, in earnings as a part of net realized investment gains (losses). In subsequent periods, any measurement of gain, loss or impairment is based on the revised amortized basis of the security. Non-credit OTTI on debt securities and declines in fair value of available-for-sale securities not considered to be other-than-temporary are recognized in OCI . Asset-backed debt securities that have been impaired due to credit or are below investment grade quality are accounted for under the effective yield method. Under the effective yield method estimates of cash flows expected over the life of asset-backed securities are then used to recognize income on the investment balance for subsequent accounting periods. Foreign Currency The functional currency of all ProAssurance foreign subsidiaries is the U.S. Dollar. Cash and Cash Equivalents For purposes of the consolidated balance sheets and statements of cash flows, ProAssurance considers all demand deposits and overnight investments to be cash equivalents. Restricted Cash Restricted cash represents cash balances which are not available for immediate or general use. Restricted cash activity in 2014 and 2013 related entirely to a collateral deposit which supported our Lloyd's Syndicate segment. Deferred Policy Acquisition Costs; Ceding Commission Income Costs that vary with and are directly related to the successful production of new and renewal premiums (primarily premium taxes, commissions and underwriting salaries) are deferred to the extent they are recoverable against unearned premiums and are amortized as related premiums are earned. Unearned ceding commission income is reported as an offset to DPAC . Ceding commission earned is reported as an offset to DPAC amortization. Income Taxes/Deferred Taxes ProAssurance files a consolidated federal income tax return. Tax-related interest and penalties are recognized as components of tax expense. ProAssurance evaluates tax positions taken on tax returns and recognizes positions in the financial statements when it is more likely than not that the position will be sustained upon resolution with a taxing authority. If recognized, the benefit is measured as the largest amount of benefit that has a greater than fifty percent probability of being realized. Uncertain tax positions are reviewed each period by considering changes in facts and circumstances, such as changes in tax law, interactions with taxing authorities and developments in case law, and adjustments would be made if considered necessary. No such adjustments were made during the years ended December 31, 2015 , 2014 or 2013 . Adjustments to unrecognized tax benefits may affect income tax expense and the settlement of uncertain tax positions may require the use of cash. Deferred federal income taxes arise from the recognition of temporary differences between the basis of assets and liabilities determined for financial reporting purposes and the basis determined for income tax purposes. ProAssurance’s temporary differences principally relate to loss reserves, unearned premium, compensation accruals, intangibles, DPAC , unrealized investment gains (losses), and basis differentials in fixed assets and investments. Deferred tax assets and liabilities are measured using the enacted tax rates expected to be in effect when such benefits are realized. ProAssurance reviews its deferred tax assets quarterly for impairment. If management determines that it is more likely than not that some or all of a deferred tax asset will not be realized, a valuation allowance is recorded to reduce the carrying value of the asset. In assessing the need for a valuation allowance, management is required to make certain judgments and assumptions about the future operations of ProAssurance based on historical experience and information as of the measurement date regarding reversal of existing temporary differences, carryback capacity, future taxable income, including its capital and operating characteristics, and tax planning strategies. Changes in tax laws and rates could also affect recorded deferred tax assets and liabilities in the future. Management is not aware of any such changes that would have a material effect on the Company’s results of operations, cash flows or financial position. Real Estate Real Estate balances are reported at cost or, for properties acquired in business combinations, estimated fair value on the date of acquisition, less accumulated depreciation. Real estate principally consists of properties in use as corporate offices. Depreciation is computed over the estimated useful lives of the related property using the straight-line method. Excess office capacity is leased or made available for lease; rental income is included in other income and real estate expenses are included in underwriting, policy acquisition and operating expenses. Real estate accumulated depreciation was approximately $24.2 million and $23.0 million at December 31, 2015 and 2014 , respectively. Real estate depreciation expense for each of the years ended December 31, 2015 , 2014 and 2013 was $1.5 million . Intangible Assets Intangible assets with definite lives, primarily consist of agency and policyholder relationships, are amortized over the estimated useful life of the asset; those with indefinite lives, primarily state licenses, are not amortized. All intangible assets are evaluated for impairment on an annual basis. The following table provides additional information regarding ProAssurance's intangible assets. Gross Carrying Value Accumulated Amortization Amortization Expense December 31 December 31 Year Ended December 31 (In millions) 2015 2014 2015 2014 2015 2014 2013 Intangible Assets Non-amortizable $ 25.8 $ 25.8 Amortizable 94.0 96.2 $ 27.3 $ 21.2 $ 8.3 $ 10.3 $ 5.3 Total Intangible Assets $ 119.8 $ 122.0 Aggregate amortization expense for intangible assets is estimated to be $8.1 million for the year ended December 31, 2016 and $5.6 million for each of the years ended December 31, 2017 , 2018 , 2019 and 2020 . Goodwill Goodwill is recognized in conjunction with acquisitions as the excess of the purchase consideration for the acquisition over the fair value of identifiable assets acquired and liabilities assumed. The fair value of identifiable assets and liabilities, and thus goodwill, is subject to redetermination within a measurement period of up to one year following completion of an acquisition. ProAssurance evaluates the carrying value of goodwill at the reporting unit level annually as of October 1st. For ProAssurance, reporting units are consistent with the reportable segments identified in Note 15 . If, at any time during the year, events occur or circumstances change that would more likely than not reduce the fair value below the carrying value, an additional evaluation of goodwill is made. ProAssurance is permitted to conduct a qualitative assessment to determine whether it is necessary to perform a two-step quantitative goodwill impairment test but periodically elects to perform a quantitative impairment assessment. A quantitative goodwill impairment test for both the Specialty P&C and Workers' Compensation units was performed as of October 1, 2015. In the first step of the quantitative impairment test, the fair value of each reporting unit is compared to its carrying amount. In the 2015 evaluation, Management determined the fair value of each ProAssurance reporting unit using an equal weighting of fair values derived from the income approach and the market approach. Under the income approach, Management estimated the fair value of a reporting unit based on the present value of estimated future cash flows. Cash flow projections were based on Management's estimates of revenue growth rates and operating margins, taking into consideration industry and market conditions. The discount rate used was based on the weighted average cost of capital adjusted for the relevant risk associated with business specific characteristics and the uncertainty related to the reporting unit's ability to execute on the projected cash flows. Under the market approach, Management estimated the fair value based on market multiples of revenue and earnings derived from comparable publicly traded companies with operating and investment characteristics similar to the reporting unit. Management weighted the fair values derived from the market approach depending on the level of comparability of these publicly traded companies to the reporting unit. Estimating the fair value of a reporting unit is judgmental in nature and involved the use of significant estimates and assumptions by Management. These estimates and assumptions included revenue growth rates and operating margins used to calculate projected future cash flows, risk adjusted discount rates, future economic and market conditions and the determination of appropriate comparable publicly traded companies. In addition, Management made certain judgments and assumptions in allocating shared assets and liabilities to individual reporting units to determine the carrying amount of each reporting unit. If the fair value of a reporting unit exceeds the carrying amount of the net assets assigned to that reporting unit, goodwill is not impaired and no further testing is required. If the fair value of the reporting unit is less than its carrying amount, then the second step of the goodwill impairment test is performed which measures the amount of impairment loss, if any. In the second step, the reporting unit's assets, including any unrecognized intangible assets, liabilities and non-controlling interests are measured at fair value in a hypothetical analysis to calculate the implied fair value of goodwill for the reporting unit in the same manner as if the reporting unit was being acquired in a business combination. If the implied fair value of the reporting unit's goodwill is less than its carrying amount, the difference is recorded as an impairment loss. As of October 1, 2015 , the most recent evaluation date, Management concluded that the fair value of each ProAssurance reporting unit exceeded the carrying value of the reporting unit, and deemed it unnecessary to perform further testing for impairment. Other Liabilities Other liabilities at December 31, 2015 and 2014 consisted of the following: (In millions) 2015 2014 SPC dividends payable $ 16.7 $ 15.8 Liability for unpaid dividends 69.4 167.7 Remaining other liabilities 116.2 137.4 Total Other liabilities $ 202.3 $ 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 both December 31, 2015 and 2014 included a special dividend declared in the fourth quarter period that was paid in January of the following year. Treasury Stock Treasury shares are reported at cost, and are reflected on the Consolidated Balance Sheets as an unallocated reduction of total equity. Share-Based Payments Compensation cost for share-based payments is measured based on the grant-date fair value of the award, recognized over the period in which the employee is required to provide service in exchange for the award. Excess tax benefits (tax deductions realized in excess of the compensation costs recognized for the exercise of the awards, multiplied by the incremental tax rate) are reported as financing cash inflows. Subsequent Events ProAssurance evaluates events that occurred subsequent to December 31, 2015 , for recognition or disclosure in its Consolidated Financial Statements. 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 which changes the requirements for reporting discontinued operations. Under the new guidance, reporting entities are required to report disposals of business components only if the disposal represents a strategic shift in the entity’s operations that will have a major effect on the entity’s operations and financial results. The new guidance expands disclosure requirements for reported discontinued operations and requires disclosure of pre-tax profit or loss attributable to significant disposals that are not reported as discontinued operations. ProAssurance adopted the guidance effective 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 w |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations All entities acquired in 2014 and 2013 were accounted for in accordance with GAAP relating to Business Combinations. No entities were acquired during 2015. On January 1, 2014, ProAssurance completed the acquisition of Eastern by purchasing 100% of its outstanding common shares for cash of $205 million . Eastern is based in Lancaster, Pennsylvania and specializes in workers' compensation insurance and reinsurance products and services, including alternative market solutions. ProAssurance incurred a nominal amount of expenses related to the purchase during the year ended December 31, 2015 and approximately $2.2 million and $0.9 million during the years ended December 31, 2014 and 2013, respectively. These expenses were included as a part of operating expenses in the periods incurred. On January 1, 2013, ProAssurance completed the acquisition of Medmarc Mutual Insurance Company, now Medmarc Casualty Insurance Company (Medmarc), through a sponsored demutualization. Medmarc is based in Chantilly, Virginia and provides medical technology liability insurance for medical technology and life sciences companies and also provides legal professional liability insurance. ProAssurance acquired Medmarc for cash of $153.7 million , including the funding of future policy credits for eligible members of $7.5 million . ProAssurance incurred expenses related to the purchase of approximately $2.6 million during the year ended December 31, 2013. These expenses were included as a part of 2013 operating expenses. For the Medmarc acquisition, the purchase consideration was less than the estimated fair value of the net assets acquired resulting in a gain on the acquisition of $32.3 million . ProAssurance believes it was able to acquire Medmarc for less than the fair value of its net assets due to Medmarc's declining premium base and its small capital position relative to other insurers in the medical technology and life sciences products liability market. The following table provides Pro Forma Consolidated Results for the years ended December 31, 2014 and 2013 as if the Eastern transaction had occurred on January 1, 2013. ProAssurance Actual Consolidated Results have been adjusted by the following, including tax effects, to reflect the Pro Forma Consolidated Results below. Medmarc actual results are included in ProAssurance consolidated results for 2014 and 2013; accordingly, the Pro Forma Consolidated Results below do not include any adjustments associated with the Medmarc acquisition. • For the year ended December 31, 2013, ProAssurance 2013 Actual Consolidated Results, which did not include Eastern, have been adjusted to include Eastern's 2013 operating results. ProAssurance Actual Consolidated Results for the year ended December 31, 2014 included Eastern's operating results (Revenue of $202.2 million and Net income of $9.1 million ). • Certain costs included in ProAssurance Actual Consolidated Results for the year ended December 31, 2014 have been reported in the Pro Forma Consolidated Results as if the costs had been incurred for the year ended December 31, 2013. Such costs include direct transaction costs and certain compensation costs directly related to the integration of Eastern operations. There was a nominal amount of compensation costs related to the acquisition of Eastern in 2015. • Net income for the year ended December 31, 2013 was reduced to reflect the net effect from amortization of intangible assets and debt security premiums and accretion of discounts recorded as a part of the Eastern purchase price allocation. No such adjustments were necessary for the period ended December 31, 2014 as actual results already include amortization and accretion associated with the Eastern transaction. Year Ended December 31, 2014 Year Ended December 31, 2013 (In thousands) ProAssurance ProAssurance ProAssurance ProAssurance Revenue $852,326 $852,326 $926,873 $740,178 Net income $197,527 * $196,565 $297,149 * $297,523 * Includes adjustments related to Eastern of $1.0 million in 2014 and $0.4 million in 2013. |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 31, 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 December 31, 2015 and December 31, 2014 are shown in the following tables. Where applicable, 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. December 31, 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 $ — $ 123,892 $ — $ 123,892 U.S. Government-sponsored enterprise obligations — 26,334 — 26,334 State and municipal bonds — 940,635 — 940,635 Corporate debt, multiple observable inputs 2,362 1,274,824 — 1,277,186 Corporate debt, limited observable inputs — — 14,500 14,500 Residential mortgage-backed securities — 238,387 — 238,387 Agency commercial mortgage-backed securities — 10,999 — 10,999 Other commercial mortgage-backed securities — 30,134 — 30,134 Other asset-backed securities — 97,463 757 98,220 Equity securities Financial 67,764 — — 67,764 Utilities/Energy 41,050 — — 41,050 Consumer oriented 56,470 — — 56,470 Industrial 48,305 — — 48,305 Bond funds 76,316 — — 76,316 All other 18,239 14,209 — 32,448 Short-term investments 86,271 32,965 — 119,236 Other investments 3,478 27,133 — 30,611 Total assets categorized within the fair value hierarchy $ 400,255 $ 2,816,975 $ 15,257 3,232,487 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. 162,624 Total assets at fair value $ 3,395,111 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 consider 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 primarily 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. • ProAssurance Level 3 securities 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 December 31, 2015 , 83% 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. Quantitative Information Regarding Level 3 Valuations Fair Value at (In millions) December 31, 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 $14.5 $13.1 Market Comparable Comparability Adjustment 0% - 5% (2.5%) Discounted Cash Flows Comparability Adjustment 0% - 5% (2.5%) Other asset-backed securities $0.8 $4.8 Market Comparable Comparability Adjustment 0% - 5% (2.5%) Discounted Cash Flows Comparability Adjustment 0% - 5% (2.5%) The significant unobservable inputs used in the fair value measurement of the above listed securities were the valuations of comparable securities with similar issuers, credit quality and maturity. Changes in the availability of comparable securities could result in changes in the fair value measurements. Fair Value Measurements - Level 3 Assets The following tables (the Level 3 Tables) present summary information regarding changes in the fair value of assets measured at fair value using Level 3 inputs. December 31, 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 — — 18 — — 18 Equity in earnings of unconsolidated subsidiaries — — — — (83 ) (83 ) Net realized investment gains (losses) — — (363 ) (11 ) (156 ) (530 ) Included in other comprehensive income — (459 ) 73 (7 ) — (393 ) Purchases — — 1,996 1,500 1,700 5,196 Sales — — (1,896 ) (4,000 ) — (5,896 ) Transfers in — — 6,640 — — 6,640 Transfers out — (4,566 ) (5,049 ) (1,494 ) (1,461 ) (12,570 ) Balance December 31, 2015 $ — $ — $ 14,500 $ 757 $ — $ 15,257 Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end $ — $ — $ — $ — $ — $ — December 31, 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 — (14 ) 65 — — 51 Equity in earnings of unconsolidated subsidiaries — — — — — — Net realized investment gains (losses) — (95 ) 3 — — (92 ) Included in other comprehensive income 1 (29 ) 688 59 — 719 Purchases 1,000 1,861 2,000 3,340 — 8,201 Sales — (1,731 ) (1,826 ) (61 ) — (3,618 ) Transfers in — 2,119 — 305 — 2,424 Transfers out (1,001 ) (4,424 ) (2,025 ) (5,688 ) — (13,138 ) Balance December 31, 2014 $ — $ 5,025 $ 13,081 $ 4,769 $ — $ 22,875 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 2015 or 2014 . Transfers shown in the preceding Level 3 tables were as of the end of the quarter in which the transfer occurred. All transfers were to or from Level 2. All transfers during 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 December 31, 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) December 31, December 31, December 31, Investments in LPs/LLCs: Private debt funds (1) $14,267 $ 50,268 $ 37,296 Long equity fund (2) None 6,407 6,747 Long/short equity funds (3) None 28,030 25,301 Non-public equity funds (4) $48,381 65,722 51,811 Multi-strategy fund of funds (5) None 8,252 8,271 Structured credit fund (6) None 3,945 3,824 $ 162,624 $ 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 offers to repurchase units of the LLC may be extended periodically. (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. December 31, 2015 December 31, 2014 (In thousands) Carrying Fair Carrying Fair Financial assets: BOLI $ 57,213 $ 57,213 $ 56,381 $ 56,381 Other investments 48,522 51,646 57,099 57,994 Other assets 24,215 24,193 22,440 22,399 Financial liabilities: Senior notes due 2023 $ 250,000 $ 261,308 $ 250,000 $ 276,503 Revolving credit agreement 100,000 100,000 — — Other liabilities 14,897 14,893 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 contractual liabilities related to prior business combinations. The fair values of the business combination liabilities were based on the present value of the expected future cash outflows, discounted at ProAssurance’s assumed incremental borrowing rate on the valuation date for unsecured liabilities with similar repayment structures. The fair value of the long-term debt was estimated based on the present value of expected future cash outflows, discounted at rates available on the valuation date for similar debt issued by entities with a similar credit standing to ProAssurance. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments Available-for-sale securities at December 31, 2015 and December 31, 2014 included the following: December 31, 2015 (In thousands) Amortized Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Fixed maturities U.S. Treasury obligations $ 122,855 $ 1,696 $ 659 $ 123,892 U.S. Government-sponsored enterprise obligations 25,456 927 49 26,334 State and municipal bonds 904,719 36,739 823 940,635 Corporate debt 1,296,128 24,720 29,162 1,291,686 Residential mortgage-backed securities 233,659 6,039 1,311 238,387 Agency commercial mortgage-backed securities 10,851 174 26 10,999 Other commercial mortgage-backed securities 29,983 354 203 30,134 Other asset-backed securities 98,412 54 246 98,220 $ 2,722,063 $ 70,703 $ 32,479 $ 2,760,287 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 December 31, 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 $ 122,855 $ 10,703 $ 94,067 $ 15,923 $ 3,199 $ 123,892 U.S. Government-sponsored enterprise obligations 25,456 2,290 16,593 7,312 139 26,334 State and municipal bonds 904,719 48,752 332,489 428,872 130,522 940,635 Corporate debt 1,296,128 104,746 698,148 455,849 32,943 1,291,686 Residential mortgage-backed securities 233,659 238,387 Agency commercial mortgage-backed securities 10,851 10,999 Other commercial mortgage-backed securities 29,983 30,134 Other asset-backed securities 98,412 98,220 $ 2,722,063 $ 2,760,287 Excluding obligations of the U.S. Government or U.S. Government-sponsored enterprises, no investment in any entity or its affiliates exceeded 10% of Shareholders’ equity at December 31, 2015 . Cash and securities with a carrying value of $48.8 million at December 31, 2015 were on deposit with various state insurance departments to meet regulatory requirements. ProAssurance also held securities with a carrying value of $125.6 million at December 31, 2015 that are pledged as collateral security for advances under the Revolving Credit Agreement (see Note 10 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 December 31, 2015 included fixed maturities with a fair value of $95.4 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 ). The primary purpose of the program is to offset future employee benefit expenses through earnings on the cash value of the policies. ProAssurance is the owner and principal beneficiary of these policies. Other Investments Other investments at December 31, 2015 and December 31, 2014 were comprised as follows: (In thousands) December 31, December 31, Investments in LPs/LLCs, at cost $ 44,958 $ 53,258 Convertible securities, at fair value 30,611 28,958 Other, principally FHLB capital stock, at cost 3,564 3,841 $ 79,133 $ 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. 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: December 31, 2015 Carrying Value (In thousands) Percentage December 31, December 31, Investment in LPs/LLCs: Qualified affordable housing tax credit partnerships See below $ 121,550 $ 133,143 Other tax credit partnerships See below 8,362 — All other LPs/LLCs See below 181,996 143,358 $ 311,908 $ 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 ProAssurance's 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 $53.4 million at December 31, 2015 . ProAssurance's ownership percentage relative to the remaining tax credit partnership interests is less than 20% ; these interests had a carrying value of $68.1 million at December 31, 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 3 , 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 $162.6 million at December 31, 2015 and $133.3 million at December 31, 2014 . ProAssurance also holds interests in other LP s/ LLC s which are not considered to be investment funds; such interests totaled $19.4 million at December 31, 2015 and $10.1 million at December 31, 2014 . ProAssurance's ownership percentage relative to two of the LP s/ LLC s is greater than 25% , which is expected to be reduced as the funds mature and other investors participate in the fund; these investments had a carrying value of $8.3 million at December 31, 2015 . ProAssurance's ownership percentage relative to the remaining LP s/ LLC s is less than 25% ; these interests had a carrying value of $173.7 million at December 31, 2015 . ProAssurance does not have the ability to exert control over any of these funds. Investments Held in a Loss Position The following tables provide summarized information with respect to investments held in an unrealized loss position at December 31, 2015 and December 31, 2014 , including the length of time the investment had been held in a continuous unrealized loss position. December 31, 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 $ 66,685 $ 658 $ 61,869 $ 591 $ 4,816 $ 67 U.S. Government-sponsored enterprise obligations 6,819 49 6,819 49 — — State and municipal bonds 46,193 823 36,822 703 9,371 120 Corporate debt 622,991 29,162 555,097 15,691 67,894 13,471 Residential mortgage-backed securities 87,567 1,311 78,961 1,095 8,606 216 Agency commercial mortgage-backed securities 409 26 — — 409 26 Other commercial mortgage-backed securities 15,960 203 12,635 170 3,325 33 Other asset-backed securities 79,637 247 74,150 237 5,487 10 $ 926,261 $ 32,479 $ 826,353 $ 18,536 $ 99,908 $ 13,943 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 December 31, 2015 , excluding U.S. Government backed securities, there were 773 debt securities ( 28.8% of all available-for-sale fixed maturity securities held) in an unrealized loss position representing 506 issuers. The greatest and second greatest unrealized loss position among those securities were approximately $1.4 million and $1.3 million , respectively. The securities were evaluated for impairment as of December 31, 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 the 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 OTTI impairment in value. A detailed discussion of the factors considered in the assessment is included in Note 1 . Fixed maturity securities held in an unrealized loss position at December 31, 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 December 31, 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: Year Ended December 31 (In thousands) 2015 2014 2013 Fixed maturities $ 97,348 $ 111,895 $ 122,065 Equities 13,317 10,817 9,454 Short-term and Other investments 2,049 8,833 2,584 BOLI 2,053 2,006 1,960 Investment fees and expenses (6,107 ) (7,994 ) (6,798 ) Net investment income $ 108,660 $ 125,557 $ 129,265 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 $10.1 million , $10.7 million and $10.1 million for the years ended December 31, 2015 , 2014 and 2013 , 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 $18.4 million , $17.9 million and $17.9 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. Tax credits recognized reduced income tax expense in the respective periods. During 2013, ProAssurance's interest in one of its LP s increased and ProAssurance therefore determined it appropriate to begin applying the equity method of accounting instead of the previously applied cost method. Under GAAP such a change from the cost to the equity method should be made on a retroactive basis with restatement of prior periods. ProAssurance did not restate prior periods related to this method change as the amounts were not material to 2013 or any of the prior periods affected. Accordingly, Equity in earnings (loss) of unconsolidated subsidiaries for 2013 included ProAssurance's portion of the LP ’s accumulated earnings from the date of initial investment, which totaled $10.5 million , of which $8.4 million was related to prior periods. Net Realized Investment Gains (Losses) Realized investment gains and losses are recognized on the specific identification basis. The following table provides detailed information regarding net realized investment gains (losses): Year Ended December 31 (In thousands) 2015 2014 2013 Total OTTI losses: State and municipal bonds $ — $ (50 ) $ (71 ) Corporate debt (11,781 ) (1,425 ) — Other investments (8,136 ) — — Portion recognized in OCI: Corporate debt 4,572 268 — Net impairments recognized in earnings (15,345 ) (1,207 ) (71 ) Gross realized gains, available-for-sale securities 11,936 5,627 18,130 Gross realized (losses), available-for-sale securities (11,481 ) (1,103 ) (7,031 ) Net realized gains (losses), trading securities 1,080 28,018 20,444 Net realized gains (losses), Other investments 464 326 — Change in unrealized holding gains (losses), trading securities (28,343 ) (18,883 ) 35,507 Change in unrealized holding gains (losses), convertible securities, carried at fair value (896 ) 1,876 — Other 946 — 925 Net realized investment gains (losses) $ (41,639 ) $ 14,654 $ 67,904 During 2015, ProAssurance recognized impairments through earnings of $7.2 million related to corporate bonds, including credit-related OTTI of $4.9 million related to debt instruments from six issuers in the energy sector. The fair value of these bonds declined in 2015 as did the credit quality of the issuers and ProAssurance recognized credit-related OTTI to reduce the amortized cost basis of the bonds to the present value of future cash flows expected to be received from the bonds. ProAssurance also recognized non-credit impairments of $3.7 million in OCI relative to the bonds of these issuers, as the fair value of the bonds was less than the present value of the expected future cash flows from the securities. ProAssurance also recognized an OTTI in earnings during 2015 related to a bond intended to be sold. Also during 2015, ProAssurance recognized an $8.1 million OTTI in earnings related to an investment fund that is accounted for using the cost method. The fund is focused on the energy sector and securities held by the fund have declined in value. An OTTI was recognized to reduce the carrying value of the investment to the NAV reported by the fund. During 2014 credit-related impairments were recognized related to two corporate debt instruments, both in retail/services industries. A non-credit impairment was recognized in OCI related to one of the instruments as the fair value of the instrument was less than the expected future cash flows from the security. 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 . (In thousands) 2015 2014 2013 Balance January 1 $ 232 $ 83 $ 3,301 Additional credit losses recognized during the period, related to securities for which: No OTTI has been previously recognized 3,648 149 — OTTI has been previously recognized 2,645 — — Reductions due to: Securities sold during the period (realized) (774 ) — (3,218 ) Balance December 31 $ 5,751 $ 232 $ 83 Other information regarding sales and purchases of available-for-sale securities is as follows: Year Ended December 31 (In millions) 2015 2014 2013 Proceeds from sales (exclusive of maturities and paydowns) $ 481.8 $ 244.9 $ 593.3 Purchases $ 580.6 $ 645.1 $ 519.2 |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2015 | |
Insurance [Abstract] | |
Reinsurance | Reinsurance ProAssurance purchases reinsurance from third-party reinsurers and insurance enterprises in order to reduce its net exposure to losses. ProAssurance also uses reinsurance arrangements as a mechanism for sharing risk with insureds or their affiliates. The effect of reinsurance on premiums written and earned was as follows: (In thousands) 2015 Premiums 2014 Premiums 2013 Premiums Written Earned Written Earned Written Earned Direct $ 780,982 $ 772,968 $ 761,043 $ 755,623 $ 566,745 $ 568,629 Assumed 31,236 22,691 18,566 12,987 802 804 Ceded (102,933 ) (101,510 ) (77,760 ) (68,879 ) (42,365 ) (41,514 ) Net premiums $ 709,285 $ 694,149 $ 701,849 $ 699,731 $ 525,182 $ 527,919 The receivable from reinsurers on unpaid losses and loss adjustment expenses represents Management’s estimate of amounts that will be recoverable under ProAssurance reinsurance agreements. Most Company reinsurance agreements base the amount of premium that is due to the reinsurer in part on losses reimbursed or to be reimbursed under the agreement, and terms may also include maximum and minimum amounts of ceded premium. Ceded premium amounts are estimated based on Management’s expectation of ultimate losses and the portion of those losses that are allocable to reinsurers according to the terms of the agreements, including any minimums or maximums. Given the uncertainty of the ultimate amounts of losses, Management’s estimates of losses and related amounts recoverable may vary significantly from the eventual outcome. During the years ended December 31, 2015 , 2014 and 2013 ProAssurance reduced premiums ceded by $1.1 million , $15.7 million and $16.4 million , respectively, due to changes in Management’s estimates of amounts due to reinsurers related to prior accident year loss recoveries. Reinsurance contracts do not relieve ProAssurance from its obligations to policyholders and ProAssurance remains liable to its policyholders whether or not reinsurers honor their contractual obligations. ProAssurance continually monitors its reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. At December 31, 2015 , the net total amounts due from reinsurers was $262.5 million (including receivables related to paid and unpaid losses and LAE and prepaid reinsurance premiums, less reinsurance premiums payable). No one reinsurer had an individual balance which exceeded $25 million . At December 31, 2015 reinsurance recoverables totaling approximately $47.0 million were collateralized by letters of credit or funds withheld. ProAssurance had no allowance for credit losses related to its reinsurance receivables at December 31, 2015 or 2014 as all reinsurance balances were considered collectible. During the years ended December 31, 2015 , 2014 and 2013 no reinsurance balances were written off for credit reasons. There were no significant reinsurance commutations in 2015 , 2014 or 2013 . |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Deferred income taxes reflect the net tax effects of temporary differences between the amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of ProAssurance’s deferred tax assets and liabilities were as follows: (In thousands) 2015 2014 Deferred tax assets Unpaid loss discount $ 44,886 $ 44,002 Unearned premium adjustment 22,889 23,972 Compensation related 18,130 18,623 Intangibles 1,435 1,957 Total deferred tax assets 87,340 88,554 Deferred tax liabilities Deferred acquisition costs 9,287 9,180 Unrealized gains on investments, net 13,933 31,342 Fixed assets 3,401 3,689 Basis differentials–investments 17,492 31,657 Intangibles 24,644 27,294 Other 3,486 4,210 Total deferred tax liabilities 72,243 107,372 Net deferred tax assets (liabilities) $ 15,097 $ (18,818 ) At December 31, 2015 , ProAssurance had no available net operating loss carryforwards, capital loss carryforwards, or Alternative Minimum Tax credit carryforwards. ProAssurance files income tax returns in the U.S. federal jurisdiction and various states. ProAssurance had receivables for federal income taxes of $16.4 million at December 31, 2015 and $1.1 million at December 31, 2014 , both carried as a part of Other assets. The statute of limitations is now closed for all tax years prior to 2012 . A reconciliation of the beginning and ending amounts of unrecognized tax benefits for 2015 , 2014 and 2013 , was as follows: (In thousands) 2015 2014 2013 Balance at January 1 $ 577 $ 4,823 $ 4,823 Increase for tax position acquired as result of a business combination — 414 — Increases for tax positions taken during the current year 7,618 163 — (Decreases) for tax positions taken during the current year — (4,823 ) — Balance at December 31 $ 8,195 $ 577 $ 4,823 At December 31, 2015 and 2014 , approximately $0.9 million of ProAssurance's uncertain tax positions, if recognized, would affect the effective tax rate. As with any uncertain tax position, there is a possibility that the ultimate benefit realized could differ from the estimate Management has established. Management believes that it is reasonably possible that a portion of unrecognized tax benefits at December 31, 2015 , may change during the next twelve months. However, an estimate of the change cannot be made at this time. ProAssurance recognizes interest and/or penalties related to income tax matters in income tax expense. Interest recognized in the income statement was not significant during the years ended December 31, 2015 , 2014 and 2013 . The accrued liability for interest was not significant at December 31, 2015 or 2014 . A reconciliation of “expected” income tax expense ( 35% of income before income taxes) to actual income tax expense for each of the years ended December 31, 2015 , 2014 and 2013 were as follows: (In thousands) 2015 2014 2013 Computed “expected” tax expense $ 45,099 $ 91,702 $ 139,005 Tax-exempt income (12,913 ) (13,250 ) (14,509 ) Tax credits (22,407 ) (17,918 ) (17,888 ) Non-taxable gain on acquisition — — (11,310 ) Non-U.S. Loss 1,806 1,741 — Other 1,073 3,165 4,338 Income tax expense $ 12,658 $ 65,440 $ 99,636 |
Deferred Policy Acquisition Cos
Deferred Policy Acquisition Costs | 12 Months Ended |
Dec. 31, 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 $79.6 million , $82.4 million and $53.2 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. |
Reserve for Losses and Loss Adj
Reserve for Losses and Loss Adjustment Expenses | 12 Months Ended |
Dec. 31, 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. ProAssurance believes that the methods it uses to establish reserves are reasonable and appropriate. Each year, ProAssurance uses internal actuaries to review the reserve for losses of each insurance subsidiary. ProAssurance also engages consulting actuaries to review ProAssurance claims data and provide observations regarding cost trends, rate adequacy and ultimate loss costs. ProAssurance considers the views of the actuaries as well as other factors, such as known, anticipated or estimated changes in frequency and severity of claims and loss retention levels and premium rates, in establishing the amount of its reserve for losses. The statutory filings of each insurance company with the insurance regulators must be accompanied by a consulting actuary's certification as to their respective reserves. Activity in the reserve for losses and loss adjustment expenses is summarized as follows: (In thousands) 2015 2014 2013 Balance, beginning of year $ 2,058,266 $ 2,072,822 $ 2,054,994 Less reinsurance recoverables on unpaid losses and loss adjustment expenses 237,966 247,518 191,645 Net balance, beginning of year 1,820,300 1,825,304 1,863,349 Net reserves acquired from acquisitions — 139,549 126,007 Net losses: Current year 571,891 545,168 447,510 Favorable development of reserves established in prior years, net (161,180 ) (182,084 ) (222,749 ) Total 410,711 363,084 224,761 Paid related to: Current year (84,186 ) (93,737 ) (43,616 ) Prior years (390,849 ) (413,900 ) (345,197 ) Total paid (475,035 ) (507,637 ) (388,813 ) Net balance, end of year 1,755,976 1,820,300 1,825,304 Plus reinsurance recoverables on unpaid losses and loss adjustment expenses 249,350 237,966 247,518 Balance, end of year $ 2,005,326 $ 2,058,266 $ 2,072,822 As discussed in Note 1 , estimating liability reserves is complex and requires the use of many assumptions. As time passes and ultimate losses for prior years are either known or become subject to a more precise estimation, ProAssurance increases or decreases the reserve estimates established in prior periods. The favorable loss development recognized in 2015 primarily reflects a lower than anticipated claims severity trend (i.e. the average size of a claim) for accident years 2008 through 2012 . The favorable development recognized in 2014 and 2013 was primarily due to lower than anticipated claims severity trends for accident years 2007 through 2011 and accident years 2005 through 2011 , respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 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 of Note 1 . ProAssurance has funding commitments primarily related to non-public investment entities totaling approximately $110.0 million , expected to be paid as follows: $78.0 million in 2016, $31.1 million in 2017 and 2018 combined, $0.3 million in 2019 and 2020 combined and $0.6 million thereafter. Of these funding commitments, $1.6 million is related to qualified affordable housing project tax credit investments and is expected to be paid as follows: $0.3 million in 2016, $0.4 million in 2017 and 2018 combined, $0.3 million in 2019 and 2020 combined and $0.6 million thereafter. As a member of Lloyd's and a capital provider to Syndicate 1729 , ProAssurance is required to provide capital, referred to as FAL . At December 31, 2015 , ProAssurance is satisfying the FAL requirement with investment securities on deposit with Lloyd's with a carrying value of $95.8 million (see Note 4 ). 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 December 31, 2015 , the unused commitment under the Syndicate Credit Agreement approximated £0.8 million (approximately $1.2 million as of December 31, 2015 ). ProAssurance is involved in a number of operating leases primarily for office space and office equipment. The following is a schedule of future minimum lease payments for operating leases that had initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2015 . Operating Leases (In thousands) 2016 $ 5,010 2017 3,669 2018 2,997 2019 2,567 2020 1,784 Thereafter 3,442 Total minimum lease payments $ 19,469 ProAssurance incurred rent expense of $5.1 million , $5.0 million and $3.2 million in the years ended December 31, 2015 , 2014 and 2013 , respectively. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Debt | Debt ProAssurance’s outstanding debt consisted of the following: (In thousands) December 31, 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 4, and carried at an interest rate of 0.82%. 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 April 2016. If renewed, the interest rate will reset. 100,000 — $ 350,000 $ 250,000 Senior Notes due 2023 (the Senior Notes) The Senior Notes are the unsecured obligations of ProAssurance Corporation, due in full in November 2023, unless redeemed sooner, with interest payable semiannually. Redemptions may be made prior to maturity, in whole or part, at the greater of par or the sum of the present values of the outstanding principal and remaining interest payments calculated at 40 basis points above the then-current rate for U.S. Treasury Notes with a term comparable to the remaining term of the Senior Notes. There are no financial covenants associated with the Senior Notes. Revolving Credit Agreement ProAssurance has entered into a Revolving Credit Agreement with five participating lenders. During 2015 ProAssurance amended certain terms of the Revolving Credit Agreement including extending the expiration date to June 19, 2020 . The Revolving Credit Agreement permits ProAssurance to borrow, repay and reborrow from the lenders during the term of the Revolving Credit Agreement ; aggregate outstanding borrowings are not permitted to exceed $250 million at any time, which includes an additional $50 million made available for use, if subscribed successfully, under an accordion feature added as a part of the 2015 amendment. All borrowings are required to be repaid prior to the expiration date of the Revolving Credit Agreement . 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 . Borrowings under the Revolving Credit Agreement may be secured or unsecured and accrue interest at a selected base rate, adjusted by a margin, which can vary from 0 to 163 basis points, based on ProAssurance’s credit ratings and whether the borrowing is secured or unsecured. The base rate selected may either be the current one-, three- or six-month LIBOR rate, with the LIBOR term selected fixing the interest period for which the rate is effective. If no selection is made, the base rate defaults to the highest of (1) the Prime rate (2) the Federal Funds rate plus 50 basis points or (3) the one month LIBOR rate plus 100 basis points, determined daily. Rates are reset each successive interest period until the borrowing is repaid. The Revolving Credit Agreement contains customary representations, covenants and events constituting default, and remedies for default. Additionally, the Revolving Credit Agreement carries the following financial covenants: (1) ProAssurance is not permitted to have a leverage ratio of Consolidated Funded Indebtedness (principally, obligations for borrowed money, obligations evidenced by instruments such as notes or acceptances, standby and commercial Letters of Credit, and contingent obligations) to Consolidated Total Capitalization (principally, total non-trade liabilities on a consolidated basis plus consolidated shareholders’ equity, exclusive of AOCI ) greater than 0.35 to 1.0 , determined at the end of each fiscal quarter. (2) ProAssurance is required to maintain a minimum net worth, excluding AOCI , of at least $1.3 billion. Funds borrowed under the terms of the Revolving Credit Agreement will be used for general corporate purposes, including, but not limited to, use as short-term working capital, funding for share repurchases as authorized by the Board, and for support of other activities ProAssurance enters into in the normal course of business. Covenant Compliance ProAssurance is currently in compliance with all covenants. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity At December 31, 2015 and 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. The following is a summary of changes in common shares issued and outstanding during the years ended December 31, 2015 , 2014 and 2013 : (In thousands of shares) 2015 2014 2013 Issued and outstanding shares - January 1 56,534 61,197 61,624 Repurchase of shares (3,680 ) (4,909 ) (681 ) Shares issued due to exercise of options and vesting of share-based compensation awards 150 154 169 Other shares issued for compensation and shares reissued to stock purchase plan* 97 92 85 Issued and outstanding shares - December 31 53,101 56,534 61,197 * Shares issued were valued at fair value (the market price of a ProAssurance common share on the date of issue). As of December 31, 2015 , approximately 2.4 million of ProAssurance's authorized common shares were reserved by the Board for award or issuance under the incentive compensation plans described in Note 12 and an additional 0.7 million of authorized common shares were reserved for the issuance of currently outstanding restricted share and performance share unit awards and for the exercise of outstanding stock options. ProAssurance declared cash dividends during 2015 , 2014 and 2013 as follows: Cash Dividends Declared, per Share 2015 2014 2013 First Quarter $ 0.31 $ 0.30 $ 0.25 Second Quarter 0.31 0.30 0.25 Third Quarter 0.31 0.30 0.25 Fourth Quarter* 1.31 2.96 0.30 * Includes special dividends of $1.00 per share in 2015 and $2.65 per share in 2014. Dividends declared during 2015 , 2014 and 2013 totaled $119.9 million , $220.5 million and $64.8 million , respectively. These dividends were paid in the month following the quarter in which they were declared. ProAssurance's ability to pay dividends to its shareholders is limited by its holding company structure, to the extent of the net assets held by its insurance subsidiaries, as discussed in Note 17 . Otherwise, there are no other regulatory restrictions on ProAssurance's retained earnings or net income that materially impact its ability to pay dividends. Based on Shareholders' Equity at December 31, 2015 , total equity of $592 million was free of debt covenant restrictions regarding the payment of dividends. However, any decision to pay future cash dividends is subject to the Board’s final determination after a comprehensive review of financial performance, future expectations and other factors deemed relevant by the Board. As of December 31, 2015 , Board authorizations for the repurchase of common shares or the retirement of outstanding debt of $111.7 million remained available for use, which included a $100 million increase to the authorization approved by the Board in 2015. The timing and quantity of purchases depends upon market conditions and changes in ProAssurance's capital requirements and is subject to limitations that may be imposed on such purchases by applicable securities laws and regulations, and the rules of the NYSE . Other Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss) For the years ended December 31, 2015 , 2014 and 2013 , OCI was primarily comprised of unrealized gains and losses, including non-credit impairment losses in 2015 and 2013, 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 year ended December 31, 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 December 31, 2015 and 2014 , AOCI was primarily comprised of unrealized gains and losses from available-for-sale securities, including non-credit impairment losses of $2.0 million and $0.5 million , respectively, net of tax. At December 31, 2015 , AOCI also included losses of $1.0 million related to unrecognized changes in defined benefit plan liabilities, net of tax. Tax effects were computed using a 35% rate, with the exception of immaterial amounts of foreign currency translation adjustments included in OCI and AOCI , as there is no deferred tax effect for such adjustments. Amounts reclassified from AOCI to net income and the amounts of deferred tax expense (benefit) included in OCI were as follows: (In thousands) 2015 2014 2013 Reclassifications from AOCI to net income, available-for-sale securities: Realized investment gains (losses) $ (4,475 ) $ 3,317 $ 11,722 Non-credit impairment losses reclassified to earnings, due to sale of securities or reclassification as a credit loss (2,279 ) — (347 ) Tax effect (at 35%) 2,364 (1,161 ) (3,981 ) Net reclassification adjustments $ (4,390 ) $ 2,156 $ 7,394 Deferred tax expense (benefit) included in OCI $ (18,370 ) $ (785 ) $ (46,157 ) |
Share-Based Payments
Share-Based Payments | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Payments | Share-Based Payments Share-based compensation costs are primarily classified as underwriting, policy acquisition and operating expenses. During 2015 , 2014 and 2013 , ProAssurance provided share-based compensation to employees utilizing three types of awards: restricted share units, performance share units, and purchase match units. The awards were made under either the ProAssurance Corporation Amended and Restated 2014 Equity Incentive Plan or the ProAssurance Corporation 2008 Equity Incentive Plan. The Compensation Committee of the Board is responsible for the administration of both plans. The following table provides a summary of compensation expense and the total related tax benefit recognized during each period as well as compensation cost that will be charged to expense in future periods, by award type. Share-Based Unrecognized Compensation Cost Year Ended December 31 December 31, 2015 2015 2014 2013 Amount Remaining (In millions) (In millions) (Weighted average years) Restricted Share Units $ 2.5 $ 1.7 $ 1.6 $ 3.2 1.8 Performance Share Units 5.9 7.6 7.1 6.0 1.6 Purchase Match Units 0.8 0.8 0.5 1.8 2.2 Total share-based compensation expense $ 9.2 $ 10.1 $ 9.2 $ 11.0 Tax benefit recognized $ 3.2 $ 3.5 $ 3.2 Each award type is charged to expense as an increase to equity over the service period (generally the vesting period) associated with the award. Restricted share 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. Purchase match units vest over a three -year period based on a service requirement with partial vesting permitted for all participants. For the restricted share and purchase match units, a single share is issued per vested unit. For performance share units, the number of shares issued per vested unit varies based on performance goals achieved. For all types of awards, units sufficient to satisfy required tax withholdings are paid in cash rather than in shares. Restricted Share Units Activity for restricted share units during 2015 , 2014 and 2013 is summarized below. Grant date fair values are based on the market value of a ProAssurance common share on the date of grant less the estimated present value of dividends during the vesting period. 2015 2014 2013 Units Weighted Units Weighted Units Weighted Beginning non-vested balance 136,802 $ 45.02 138,770 $ 38.92 157,212 $ 31.94 Granted 91,943 42.73 49,750 46.34 39,400 46.97 Forfeited (1,342 ) 42.79 (2,044 ) 44.88 (603 ) 35.91 Vested and released (48,935 ) 42.24 (49,674 ) 29.22 (57,239 ) 25.25 Ending non-vested balance 178,468 44.64 136,802 45.02 138,770 38.92 The aggregate grant date fair value of restricted share units vested and released in 2015 , 2014 and 2013 totaled $2.1 million , $1.5 million and $1.4 million , respectively. The aggregate intrinsic value of restricted share units vested and released in 2015 , 2014 and 2013 (including units paid in cash to cover tax withholdings) totaled $2.3 million , $2.3 million and $2.7 million , respectively. Performance Share Units Performance share units vest only if minimum performance objectives are met, and the number of units earned varies from 75% to 125% of a base award depending upon the degree to which stated performance objectives are achieved. Performance share unit activity for 2015 , 2014 and 2013 is summarized below. The table reflects the base number of units; actual awards that vest depend upon the extent to which performance objectives are achieved. Grant date fair values are based on the market value of a ProAssurance common share on the date of grant less the estimated present value of dividends during the vesting period. 2015 2014 2013 Base Units Weighted Base Units Weighted Base Units Weighted Beginning non-vested balance 466,860 $ 44.97 486,680 $ 39.86 552,417 $ 33.21 Granted 106,490 42.73 160,900 46.34 145,580 46.97 Forfeited (2,322 ) 46.42 (14,221 ) 45.30 (17,043 ) 38.90 Vested and released (180,678 ) 42.44 (166,499 ) 31.33 (194,274 ) 26.39 Ending non-vested balance 390,350 45.56 466,860 44.97 486,680 39.86 The aggregate grant date fair value of performance share units (base level) vested and released in 2015 , 2014 and 2013 totaled $7.7 million , $5.2 million and $5.1 million , respectively. The aggregate intrinsic value of performance share units (base level) vested and released in 2015 , 2014 and 2013 (including units paid in cash to cover tax withholdings) totaled $8.4 million , $7.7 million and $9.1 million , respectively. The weighted average level at which the vested units were issued was 115% during 2015 and 125% during both 2014 and 2013 , based on performance levels achieved. Purchase Match Units The ProAssurance Corporation 2011 Employee Stock Ownership Plan provides a purchase match unit for each share purchased with contributions by eligible plan participants, with participant contributions subject to a $5,000 annual limit per participant. Purchase match unit activity during 2015 , 2014 and 2013 is summarized below. Grant date fair values are based on the market value of a ProAssurance common share on the date of grant less the estimated present value of dividends during the vesting period. 2015 2014 2013 Units Weighted Units Weighted Units Weighted Beginning non-vested balance 72,101 $ 43.69 63,125 $ 41.34 40,985 $ 39.85 Granted 26,593 46.03 29,069 44.55 25,151 43.57 Forfeited (3,087 ) 44.16 (2,968 ) 43.14 (2,456 ) 40.71 Vested and released (21,124 ) 42.65 (17,125 ) 36.61 (555 ) 36.33 Ending non-vested balance 74,483 44.80 72,101 43.69 63,125 41.34 The aggregate grant date fair value of purchase match units vested and released in 2015 and 2014 totaled $0.9 million and $0.6 million , respectively, and the aggregate intrinsic value of purchase match share units vested and released in 2015 and 2014 (including units paid in cash to cover tax withholdings) totaled $1.0 million and $0.8 million , respectively. Stock Options ProAssurance also had certain fully-vested employee stock options outstanding during 2015 , 2014 and 2013 , as summarized below. 2015 2014 2013 Options Weighted Options Weighted Options Weighted Outstanding, vested and exercisable, beginning of year 4,456 $ 24.64 18,082 $ 23.00 20,302 $ 23.15 Exercised (2,342 ) 24.13 (13,626 ) 22.47 (2,220 ) 24.28 Outstanding, vested and exercisable, end of year 2,114 25.02 4,456 24.64 18,082 23.00 The aggregate intrinsic value of options exercised during 2015 , 2014 and 2013 was $0.1 million , $0.3 million and $0.1 million , respectively. ProAssurance outstanding options had an aggregate intrinsic value of $0.1 million and a weighted average remaining contractual term of 2.21 years at December 31, 2015 . All ProAssurance option agreements permit cashless exercise whereby the exercise price and any required tax withholdings are allowed to be satisfied by the retention of shares that would otherwise be deliverable to the option holder. ProAssurance issues new shares for options exercised. There were no cash proceeds from options exercised during the years ended December 31, 2015 , 2014 or 2013 . |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Dec. 31, 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 VIE interests carried as a part of Other investments totaled $24.5 million at December 31, 2015 and $33.3 million at December 31, 2014 . ProAssurance VIE interests, carried as a part of Investment in unconsolidated subsidiaries, totaled $67.8 million at December 31, 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 December 31, 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 | 12 Months Ended |
Dec. 31, 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 years ended December 31, 2015 , 2014 and 2013 . |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 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. Professional liability insurance is primarily offered 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. For consistency of presentation, the ceded premium associated with the Syndicate 1729 reinsurance agreement has been reported within the Specialty P&C segment on a similar delay. 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. Our Workers' Compensation segment is comprised entirely of the business acquired through Eastern on January 1, 2014. Lloyd's Syndicate includes operating results from ProAssurance's 58% participation in Lloyd's of London Syndicate 1729 that began writing business as of January 1, 2014. Syndicate 1729 underwrites risks over a wide range of property and casualty insurance and reinsurance lines 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 . 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: Year Ended December 31, 2015 (In thousands) Specialty P&C Workers' Compensation Lloyd's Syndicate Corporate Inter-segment Eliminations Consolidated Net premiums earned $ 443,313 $ 213,161 $ 37,675 $ — $ — $ 694,149 Net investment income — — 928 107,732 — 108,660 Equity in earnings (loss) of unconsolidated subsidiaries — — — 3,682 — 3,682 Net realized gains (losses) — — 24 (41,663 ) — (41,639 ) Other income 4,561 492 698 2,057 (581 ) 7,227 Net losses and loss adjustment expenses (1) (250,168 ) (140,744 ) (25,181 ) — 5,382 (410,711 ) Underwriting, policy acquisition and operating expenses (2) (105,574 ) (63,653 ) (18,518 ) (24,518 ) (4,801 ) (217,064 ) Segregated portfolio cells dividend (expense) income — (853 ) — — — (853 ) Interest expense — — — (14,596 ) — (14,596 ) Income tax benefit (expense) — — (1,240 ) (11,418 ) — (12,658 ) Segment operating results $ 92,132 $ 8,403 $ (5,614 ) $ 21,276 $ — $ 116,197 Significant non-cash items: Depreciation and amortization $ 8,663 $ 5,696 $ 417 $ 21,624 $ — $ 36,400 Year Ended December 31, 2014 (In thousands) Specialty P&C Workers' Compensation Lloyd's Syndicate Corporate Inter-segment Eliminations Consolidated Net premiums earned $ 492,733 $ 194,540 $ 12,458 $ — $ — $ 699,731 Net investment income — — 410 125,147 — 125,557 Equity in earnings (loss) of unconsolidated subsidiaries — — — 3,986 — 3,986 Net realized gains (losses) — — 4 14,650 — 14,654 Other income 5,823 645 126 2,285 (481 ) 8,398 Gain on acquisition — — — — — — Net losses and loss adjustment expenses (1) (228,199 ) (126,447 ) (8,438 ) — — (363,084 ) Underwriting, policy acquisition and operating expenses (2) (133,132 ) (60,357 ) (9,535 ) (8,768 ) 481 (211,311 ) Segregated portfolio cells dividend (expense) income — (1,842 ) — — — (1,842 ) Interest expense — — — (14,084 ) — (14,084 ) Income tax benefit (expense) — — — (65,440 ) — (65,440 ) Segment operating results $ 137,225 $ 6,539 $ (4,975 ) $ 57,776 $ — $ 196,565 Significant non-cash items: Depreciation and amortization $ 8,945 $ 5,828 $ 477 $ 24,344 $ — $ 39,594 Year Ended December 31, 2013 (In thousands) Specialty P&C Workers' Compensation Lloyd's Syndicate Corporate Inter-segment Eliminations Consolidated Net premiums earned $ 527,919 $ — $ — $ — $ — $ 527,919 Net investment income — — — 129,265 — 129,265 Equity in earnings (loss) of unconsolidated subsidiaries — — — 7,539 — 7,539 Net realized gains (losses) — — 67,904 — 67,904 Other income 5,648 — — 1,910 (7 ) 7,551 Gain on acquisition — — — 32,314 — 32,314 Net losses and loss adjustment expenses (1) (224,761 ) — — — — (224,761 ) Underwriting, policy acquisition and operating expenses (2) (132,076 ) — — (15,748 ) 7 (147,817 ) Interest expense — — — (2,755 ) — (2,755 ) Loss on extinguishment of debt — — — — — — Income tax benefit (expense) — (99,636 ) (99,636 ) Segment operating results $ 176,730 $ — $ — $ 120,793 $ — $ 297,523 Significant non-cash items: Depreciation and amortization $ 7,199 $ — $ — $ 28,634 $ — $ 35,833 (1) Beginning in 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. The portion of the management fee that is allocated to ULAE is eliminated in consolidation. (2) Under the management fee arrangement mentioned above, 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. Year Ended December 31 (In thousands) 2015 2014 2013 Specialty P&C Segment Gross premiums earned: Healthcare professional liability $ 463,599 $ 477,031 $ 507,222 Legal professional liability 28,234 28,278 27,162 Medical technology liability 34,838 35,913 33,242 Other 1,447 1,830 1,807 Less: Ceded premiums earned* 84,805 50,319 41,514 Segment net premiums earned 443,313 492,733 527,919 Workers' Compensation Segment Gross premiums earned: Traditional business 172,115 160,717 — Alternative market business 66,168 55,616 — Less: Ceded premiums earned 25,122 21,793 — Segment net premiums earned 213,161 194,540 — Lloyd's Syndicate Segment Gross premiums earned: Property and casualty* 43,617 13,429 — Less: Ceded premiums earned 5,942 971 — Segment net premiums earned 37,675 12,458 — Consolidated net premiums earned $ 694,149 $ 699,731 $ 527,919 * Includes premium ceded from the Specialty P&C segment to the Lloyd's Syndicate segment of $14.4 million and $4.2 million for years ended December 31, 2015 and December 31, 2014 , respectively. |
Benefit Plans
Benefit Plans | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Benefit Plans | Benefit Plans ProAssurance maintains the ProAssurance Savings Plan that is intended to provide retirement income to eligible employees. ProAssurance provides employer contributions to the plan of between 5% and 10% of salary for qualified employees. During 2014 and 2013, ProAssurance also maintained similar plans of acquired entities prior to the plans being merged into the ProAssurance Savings Plan. ProAssurance incurred expense related to savings and retirement plans of $7.0 million , $6.0 million and $5.1 million during the years ended December 31, 2015 , 2014 and 2013 , respectively. ProAssurance also maintains the ProAssurance Plan that allows participating management employees to defer a portion of their current salary. ProAssurance incurred expense related to the ProAssurance Plan, as well as another plan acquired as a part of a business combination, of $0.4 million , $0.3 million , and $0.4 million during the years ended December 31, 2015 , 2014 and 2013 , respectively. ProAssurance deferred compensation liabilities totaled $14.9 million , $14.0 million and $13.1 million at December 31, 2015 , 2014 and 2013 , respectively. The liabilities included amounts due under the ProAssurance Plan and amounts due under individual agreements with current or former employees. |
Statutory Accounting and Divide
Statutory Accounting and Dividend Restrictions | 12 Months Ended |
Dec. 31, 2015 | |
Statutory Accounting And Dividend Restrictions [Abstract] | |
Statutory Accounting and Dividend Restrictions | Statutory Accounting and Dividend Restrictions ProAssurance’s domestic U.S. insurance subsidiaries are required to file statutory financial statements with state insurance regulatory authorities, prepared based upon statutory accounting practices prescribed or permitted by regulatory authorities. ProAssurance did not use any prescribed or permitted statutory accounting practices that differed from the NAIC 's statutory accounting practices at December 31, 2015 , 2014 or 2013 . Differences between net income prepared in accordance with GAAP and statutory net income are principally due to: (a) policy acquisition and certain software and equipment costs which are deferred under GAAP but expensed for statutory purposes and (b) certain deferred income taxes which are recognized under GAAP but are not recognized for statutory purposes. The NAIC specifies risk-based capital requirements for property and casualty insurance providers. At December 31, 2015 actual statutory capital and surplus for each of ProAssurance’s insurance subsidiaries substantially exceeded the regulatory requirements. Net earnings and capital and surplus of ProAssurance’s insurance subsidiaries on a statutory basis are shown in the following table. (In millions) Statutory Net Earnings Statutory Capital and Surplus 2015 2014 2013 2015 2014 $168 $246 $256 $1,506 $1,681 At December 31, 2015 , $1.7 billion of ProAssurance's consolidated net assets were held at its domestic insurance subsidiaries, of which approximately $165 million are permitted to be paid as dividends over the course of 2016 without prior approval of state insurance regulators. However, the payment of any dividend requires prior notice to the insurance regulator in the state of domicile and the regulator may prevent the dividend if, in its judgment, payment of the dividend would have an adverse effect on the capital and surplus of the insurance subsidiary. |
Quarterly Results of Operations
Quarterly Results of Operations (unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Data [Abstract] | |
Quarterly Results of Operations (unaudited) | Quarterly Results of Operations (unaudited) The following is a summary of unaudited quarterly results of operations for 2015 and 2014 : 2015 (In thousands, except per share data) 1st 2nd 3rd 4th Net premiums earned $ 171,899 $ 175,293 $ 182,085 $ 164,874 Net losses and loss adjustment expenses: Current year 138,654 139,057 145,027 149,157 Prior year (33,514 ) (35,115 ) (36,221 ) (56,330 ) Net income 37,814 33,158 10,276 34,948 Basic earnings per share 0.67 0.60 0.19 0.66 Diluted earnings per share 0.67 0.60 0.19 0.65 2014 (In thousands, except per share data) 1st 2nd 3rd 4th Net premiums earned $ 171,730 $ 176,303 $ 177,028 $ 174,670 Net losses and loss adjustment expenses: Current year 137,647 141,126 142,124 124,271 Prior year (48,139 ) (42,213 ) (42,902 ) (48,830 ) Net income 46,731 49,942 34,778 65,114 Basic earnings per share 0.76 0.84 0.59 1.13 Diluted earnings per share 0.76 0.84 0.59 1.12 * Quarterly and year-to-date computations of per share amounts are made independently; therefore, the sum of per share amounts for the quarters may not equal per share amounts for the respective year-to-date periods. |
Schedule I - Summary of Investm
Schedule I - Summary of Investments-Other Than Investments In Related Parties | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Investments, Other than Investments in Related Parties [Abstract] | |
Schedule I - Summary of Investments Other than Investments in Related Parties | Type of Investment Recorded Fair Amount Which is (In thousands) Fixed Maturities Bonds: U.S. Government or government agencies and authorities $ 148,311 $ 150,226 $ 150,226 States, municipalities and political subdivisions 904,719 940,635 940,635 Foreign governments 5,128 5,256 5,256 Public utilities 95,185 96,448 96,448 All other corporate bonds 1,195,665 1,189,832 1,189,832 Certificates of deposit 150 150 150 Mortgage-backed securities 372,905 377,740 377,740 Total Fixed Maturities 2,722,063 2,760,287 2,760,287 Equity Securities, trading Common Stocks: Public utilities 9,546 9,518 9,518 Banks, trusts and insurance companies 68,639 67,764 67,764 Industrial, miscellaneous and all other 241,135 245,071 245,071 Total Equity Securities, trading 319,320 322,353 322,353 Other long-term investments 401,851 557,114 448,254 Short-term investments 119,236 119,236 119,236 Total Investments $ 3,562,470 $ 3,758,990 $ 3,650,130 |
Schedule II - Condensed Financi
Schedule II - Condensed Financial Information of Registrant | 12 Months Ended |
Dec. 31, 2015 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Schedule II - Condensed Financial Information of Registrant | Condensed Balance Sheets December 31 (In thousands) 2015 2014 Assets Investment in subsidiaries, at equity $ 2,026,247 $ 2,145,358 Fixed maturities available for sale, at fair value 202,501 203,451 Short-term investments 16,716 42,790 Cash and cash equivalents 103,292 87,200 Due from subsidiaries — 87,719 Other assets 48,288 25,736 Total Assets $ 2,397,044 $ 2,592,254 Liabilities and Shareholders’ Equity Liabilities: Due to subsidiaries $ 14,803 $ — Dividends payable 69,447 167,744 Other liabilities 4,440 16,566 Debt 350,000 250,000 Total Liabilities 438,690 434,310 Shareholders’ Equity: Common stock 625 623 Other shareholders’ equity, including unrealized gains (losses) on securities of subsidiaries 1,957,729 2,157,321 Total Shareholders’ Equity 1,958,354 2,157,944 Total Liabilities and Shareholders’ Equity $ 2,397,044 $ 2,592,254 Condensed Statements of Income Year Ended December 31 (In thousands) 2015 2014 2013 Net investment income $ 5,017 $ 3,295 $ 5,789 Net realized investment gains (losses) 4,673 990 5,334 Other income (loss) 378 660 170 10,068 4,945 11,293 Expenses: Interest expense 14,596 14,084 2,747 Other expenses 24,695 7,083 13,213 39,291 21,167 15,960 Income (loss) before income tax expense (benefit) and equity in net income of consolidated subsidiaries (29,223 ) (16,222 ) (4,667 ) Income tax expense (benefit) (11,657 ) (6,728 ) (1,007 ) Income (loss) before equity in net income of consolidated subsidiaries (17,566 ) (9,494 ) (3,660 ) Equity in net income of consolidated subsidiaries 133,763 206,059 301,183 Net income $ 116,197 $ 196,565 $ 297,523 Other comprehensive income $ (34,349 ) $ (1,457 ) $ (85,719 ) Comprehensive income $ 81,848 $ 195,108 $ 211,804 Condensed Statements of Cash Flow Year Ended December 31 (In thousands) 2015 2014 2013 Net cash provided (used) by operating activities $ (14,411 ) $ 20,086 $ (24,654 ) Investing activities Purchases of equity securities trading — (310 ) (1,265 ) Proceeds from sale or maturities of: Fixed maturities, available for sale 200,245 104,844 224,993 Equity securities trading — 12,813 1,113 Net decrease (increase) in short-term investments 26,074 149,202 (187,625 ) Dividends from subsidiaries 107,870 67,188 239,484 Contribution of capital to subsidiaries — (7,000 ) — Deposit made for future acquisition — — (205,244 ) (Increase) decrease in restricted cash — 78,000 (78,000 ) Funds advanced for Syndicate 1729 FAL deposit (9,642 ) (76,553 ) (8,699 ) Funds advanced under Syndicate 1729 credit agreement (3,083 ) (9,107 ) (1,665 ) Other (289 ) 415 (20 ) Net cash provided (used) by investing activities 321,175 319,492 (16,928 ) Financing activities Proceeds from debt 100,000 — 250,000 Principal repayment of debt — — (125,000 ) Repurchase of common stock (172,772 ) (222,360 ) (29,089 ) Subsidiary payments for common shares and share-based compensation awarded to subsidiary employees 6,063 8,301 6,258 Excess of tax benefit from share-based payment arrangements 379 1,631 2,128 Dividends to shareholders (217,626 ) (70,490 ) (46,375 ) Other (6,716 ) (6,919 ) (8,278 ) Net cash provided (used) by financing activities (290,672 ) (289,837 ) 49,644 Increase (decrease) in cash and cash equivalents 16,092 49,741 8,062 Cash and cash equivalents, beginning of period 87,200 37,459 29,397 Cash and cash equivalents, end of period $ 103,292 $ 87,200 $ 37,459 Supplemental disclosure of cash flow information: Cash paid during the year for income taxes, net of refunds $ 47,004 $ 26,764 $ 120,031 Cash paid during the year for interest $ 13,996 $ 13,408 $ 913 Significant non-cash transactions: Dividends declared and not yet paid $ 69,447 $ 167,744 $ 18,532 Securities transferred at fair value as dividends from subsidiaries $ 206,880 $ 227,412 $ 69,011 Non-cash capital contribution to subsidiaries $ 87,719 $ — $ — Note to Condensed Financial Statements of Registrant Basis of Presentation The registrant-only financial statements should be read in conjunction with ProAssurance Corporation’s Consolidated Financial Statements and Notes thereto. At December 31, 2015 and 2014 , PRA Parent’s investment in subsidiaries is stated at the initial consolidation value plus equity in the undistributed earnings of subsidiaries since the date of acquisition. Effective January 1, 2015 ProAssurance Corporation entered into a management agreement with several of its insurance subsidiaries whereby ProAssurance Corporation charges the subsidiaries a management fee for various management services provided to the subsidiary. Under the new arrangement, the expenses associated with such services remain as expenses of ProAssurance Corporation and the management fee charged is reported as an offset to ProAssurance Corporation expenses. Prior to 2015, a substantial portion of expenses associated with services provided to insurance subsidiaries were directly allocated or directly charged to the insurance subsidiaries. |
Schedule III - Supplementary In
Schedule III - Supplementary Insurance Information | 12 Months Ended |
Dec. 31, 2015 | |
Supplementary Insurance Information [Abstract] | |
Schedule III - Supplementary Insurance Information | (In thousands) 2015 2014 2013 Net premiums earned Specialty P&C $ 443,313 $ 492,733 $ 527,919 Workers' Compensation 213,161 194,540 — Lloyd's Syndicate 37,675 12,458 — Consolidated 694,149 699,731 527,919 Net investment income (1) Lloyd's Syndicate 928 410 — Corporate 107,732 125,147 129,265 Consolidated 108,660 125,557 129,265 Losses and loss adjustment expenses incurred related to current year, net of reinsurance Specialty P&C 409,149 408,987 447,510 Workers' Compensation 142,943 127,743 — Lloyd's Syndicate 25,181 8,438 — Inter-segment eliminations (5,382 ) — — Consolidated 571,891 545,168 447,510 Losses and loss adjustment expenses incurred related to prior year, net of reinsurance Specialty P&C (158,981 ) (180,788 ) (222,749 ) Workers' Compensation (2,199 ) (1,296 ) — Consolidated (161,180 ) (182,084 ) (222,749 ) Paid losses and loss adjustment expenses, net of reinsurance Specialty P&C 346,606 389,458 388,813 Workers' Compensation 126,296 117,775 — Lloyd's Syndicate 7,549 404 — Inter-segment eliminations (5,416 ) — — Consolidated 475,035 507,637 388,813 Amortization of deferred policy acquisition costs Specialty P&C 45,459 55,105 53,207 Workers' Compensation 26,232 10,307 — Lloyd's Syndicate 7,841 3,165 — Inter-segment eliminations 24 — — Consolidated 79,556 68,577 53,207 Other underwriting, policy acquisition and operating expenses Specialty P&C 60,115 78,027 78,869 Workers' Compensation 37,421 50,050 — Lloyd's Syndicate 10,677 6,370 — Corporate 24,518 8,768 15,748 Inter-segment eliminations 4,777 (481 ) (7 ) Consolidated 137,508 142,734 94,610 Net premiums written Specialty P&C 442,126 467,046 525,182 Workers' Compensation 218,338 202,697 — Lloyd's Syndicate 48,821 32,106 — Consolidated 709,285 701,849 525,182 Deferred policy acquisition costs (1) 44,388 38,790 28,207 Reserve for losses and loss adjustment expenses (1) 2,005,326 2,058,266 2,072,822 Unearned premiums (1) 362,066 345,828 255,463 (1) Assets are not allocated to segments because investments and assets are not managed at the segment level. |
Schedule IV - Reinsurance
Schedule IV - Reinsurance | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Schedule of Reinsurance Premiums for Insurance Companies [Abstract] | |
Schedule IV - Reinsurance | ($ in thousands) 2015 2014 2013 Property and Liability * Premiums earned $ 772,968 $ 755,623 $ 568,629 Premiums ceded (101,510 ) (68,879 ) (41,514 ) Premiums assumed 22,691 12,987 804 Net premiums earned $ 694,149 $ 699,731 $ 527,919 Percentage of amount assumed to net 3.27% 1.86% 0.15% * All of ProAssurance’s premiums are related to property and liability coverages. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Organization and Nature of Business | Organization and Nature of Business ProAssurance Corporation (ProAssurance, PRA or the Company), a Delaware corporation, is an insurance holding company primarily for wholly owned specialty property and casualty insurance entities including an entity that is the majority capital provider to Syndicate 1729 at Lloyd's of London. Risks insured are primarily liability risks located within the United States. As described in more detail in Note 15 , ProAssurance operates in four reportable segments: Specialty P&C , Workers' Compensation, Lloyd's Syndicate, and Corporate. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of ProAssurance Corporation and its wholly-owned subsidiaries. Investments in entities where ProAssurance holds a greater than minor interest but does not hold a controlling interest are accounted for using the equity method. All significant intercompany accounts and transactions are eliminated in consolidation. ProAssurance subsidiaries located in the U.K. are reported on a quarter delay due to timing issues regarding the availability of information, except there is no delay related to subsidiary investments managed in the U.S. as that information is available on an earlier schedule. |
Basis of Presentation | Basis of Presentation The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and disclosures related to these amounts at the date of the financial statements. Actual results could differ from those estimates. |
Recognition of Revenues | Recognition of Revenues Insurance premiums are recognized as revenues pro rata over the terms of the policies, which are principally one year in duration. Credit Losses ProAssurance's premium and agency receivables are exposed to credit losses, but to-date have not experienced any significant amount of credit losses. Earned But Unbilled Premiums Workers’ compensation premiums are determined based upon the payroll of the insured, the applicable premium rates and, where applicable, an experience based modification factor. An audit of the policyholders’ records is conducted after policy expiration to make a final determination of applicable premiums. Audit premium due from or due to a policyholder as a result of an audit is reflected in net premiums earned when billed. ProAssurance tracks, by policy, the amount of additional premium billed in final audit invoices as a percentage of payroll exposure and uses this information to estimate the probable additional amount that it has earned, but not yet billed, as of the balance sheet date. Changes to the EBUB estimate are included in Net premiums earned in the period recognized. |
Losses and Loss Adjustment Expenses | Losses and Loss Adjustment Expenses ProAssurance establishes its reserve for losses and loss adjustment expenses ("reserve for losses" or "reserve") based on estimates of the future amounts necessary to pay claims and expenses associated with the investigation and settlement of claims. The reserve for losses is determined on the basis of individual claims and payments thereon as well as actuarially determined estimates of future losses based on past loss experience, available industry data and projections as to future claims frequency, severity, inflationary trends, judicial trends, legislative changes and settlement patterns. Management establishes the reserve for losses after taking into consideration a variety of factors including the conclusions reached by internal actuaries, premium rates, claims frequency, historical paid and incurred loss development trends, the effect of inflation, general economic trends, the legal and political environment, and the reports received from consulting actuaries. Internal actuaries perform an in-depth review of the reserve for losses at least semi-annually using the loss and exposure data of ProAssurance subsidiaries. Management engages consulting actuaries to review subsidiary loss and exposure data and provide reports to Management regarding the adequacy of reserves. Estimating casualty insurance reserves, and particularly long-tailed insurance reserves, is a complex process. Long-tailed insurance is characterized by the extended period of time between collecting the premium for insuring a risk and the ultimate payment of losses. For a high proportion of the risks insured or reinsured by ProAssurance the period of time required to resolve a claim is often five years or more, and claims may be subject to litigation. Estimating losses for these long-tailed claims requires ProAssurance to make and revise judgments and assessments regarding multiple uncertainties over an extended period of time. As a result, reserve estimates may vary significantly from the eventual outcome. Reserve estimates and the assumptions on which these estimates are predicated are regularly reviewed and updated as new information becomes available. Any adjustments necessary are reflected in then current operations. Due to the size of ProAssurance’s reserve for losses, even a small percentage adjustment to these estimates could have a material effect on earnings in the period in which the adjustment is made, as was the case in 2015 , 2014 and 2013 . The effect of adjustments made to reinsured losses is mitigated by the corresponding adjustment that is made to reinsurance recoveries. Thus, in any given year, ProAssurance may make significant adjustments to gross losses that have little effect on its net losses. |
Reinsurance Receivables | Reinsurance Receivables ProAssurance enters into reinsurance agreements whereby other insurance entities agree to assume a portion of the risk associated with certain policies issued by ProAssurance. In return, ProAssurance agrees to pay a premium to the reinsurer. ProAssurance uses reinsurance to provide capacity to write larger limits of liability, to provide reimbursement for losses incurred under the higher limit coverages we offer, to provide protection against losses in excess of policy limits, and as a mechanism for providing custom insurance solutions. Receivable from reinsurers on paid losses and loss adjustment expenses is the estimated amount of losses already paid that will be recoverable from reinsurers. Receivable from reinsurers on unpaid losses and loss adjustment expenses is the estimated amount of future loss payments that will be recoverable from reinsurers. Reinsurance recoveries are the portion of losses incurred during the period that are estimated to be allocable to reinsurers. Premiums ceded are the estimated premiums that will be due to reinsurers with respect to premiums earned and losses incurred during the period. These estimates are based upon management’s estimates of ultimate losses and the portion of those losses that are allocable to reinsurers under the terms of the related reinsurance agreements. Given the uncertainty of the ultimate amounts of losses, these estimates may vary significantly from the eventual outcome. Management regularly reviews these estimates and any adjustments necessary are reflected in the period in which the estimate is changed. Due to the size of the receivable from reinsurers, even a small adjustment to the estimates could have a material effect on ProAssurance’s results of operations for the period in which the change is made. Reinsurance contracts do not relieve ProAssurance from its obligations to policyholders. ProAssurance continually monitors its reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. Any amount determined to be uncollectible is written off in the period in which the uncollectible amount is identified. |
Investments | Investments Fair Values Fair values of investment securities are primarily provided by independent pricing services. The pricing services provide an exchange traded price, if available, or provide an estimated price determined using multiple observable inputs, including exchange traded prices for similar assets. Management reviews valuations of securities obtained from the pricing services for accuracy based upon the specifics of the security, including class, maturity, credit rating, durations, collateral, and comparable markets for similar securities. Multiple observable inputs are not available for certain of our investments, including municipal bonds and corporate debt not actively traded, and investments in LP s/ LLC s. Management values these municipal bonds and corporate debt either using a single non-binding broker quote or pricing models that utilize market based assumptions that have limited observable inputs. Management values certain investments in LP s/ LLC s based on the NAV of the interest held, as provided by the fund. Fixed Maturities and Equity Securities Fixed maturities and equity securities are considered as either available-for-sale or trading securities. Available-for-sale securities are carried at fair value, determined as described above. Exclusive of OTTI losses, discussed in a separate section that follows, unrealized gains and losses on available-for-sale securities are included, net of related tax effects, in Shareholders’ Equity as a component of AOCI . Investment income includes amortization of premium and accretion of discount related to available-for-sale debt securities acquired at other than par value. Debt securities and mandatorily redeemable preferred stock with maturities beyond one year when purchased are classified as fixed maturities. Trading portfolio securities are carried at fair value, determined as described above, with the holding gains and losses included in realized investment gains and losses in the current period. Short-term Investments Short-term investments, which have a maturity at purchase of one year or less, are primarily comprised of investments in U.S. Treasury obligations, commercial paper and money market funds. All balances are reported at amortized cost, which approximates fair value. Other Investments Investments in LP s/ LLC s where ProAssurance has virtually no influence over the operating and financial policies of an investee are accounted for using the cost method. Under the cost method, investments are valued at cost, with investment income recognized when received. Investments in convertible bond securities are carried at fair value as permitted by the accounting guidance for hybrid financial instruments, with changes in fair value recognized in income as a component of Net realized investment gains (losses) during the period of change. Interest on convertible bond securities is recorded on an accrual basis based on contractual interest rates and is included in Net investment income. Investment in Unconsolidated Subsidiaries Investments in LP s/ LLC s where ProAssurance is deemed to have influence because it holds a greater than a minor interest are accounted for using the equity method. Under the equity method, the recorded basis of the investment is adjusted each period for the investor’s pro rata share of the investee’s income or loss. Investments in unconsolidated subsidiaries include tax credit partnerships accounted for using the equity method, whereby ProAssurance’s proportionate share of income or loss is included in investment income. Tax credits received from the partnerships are recognized in the period received as a reduction to current tax expenses. Business Owned Life Insurance ProAssurance owns life insurance contracts on certain management employees. The life insurance contracts are carried at their current cash surrender value. Changes in the cash surrender value are included in income in the current period as investment income. Death proceeds from the contracts are recorded when the proceeds become payable under the policy terms. Realized Gains and Losses Realized investment gains and losses are recognized on the specific identification basis. Other-than-temporary Impairments ProAssurance evaluates its available-for-sale investment securities, which at December 31, 2015 and 2014 consisted entirely of fixed maturity securities, on at least a quarterly basis for the purpose of determining whether declines in fair value below recorded cost basis represent other-than-temporary impairment. We consider an OTTI to have occurred: • if there is intent to sell the security • if it is more likely than not that the security will be required to be sold before full recovery of its amortized cost basis • if the entire amortized basis of the security is not expected to be recovered. The assessment of whether the amortized cost basis of a security, particularly an asset-backed debt security, is expected to be recovered requires management to make assumptions regarding various matters affecting future cash flows. The choice of assumptions is subjective and requires the use of judgment; actual credit losses experienced in future periods may differ from management’s estimates of those credit losses. Methodologies used to estimate the present value of expected cash flows are: • For non-structured fixed maturities (U.S. Treasury securities, obligations of U.S. Government and government agencies and authorities, obligations of states, municipalities and political subdivisions, and corporate debt) the estimate of expected cash flows is determined by projecting a recovery value and a recovery time frame and assessing whether further principal and interest will be received. ProAssurance considers various factors in projecting recovery values and recovery time frames, including the following: • third party research and credit rating reports; • the current credit standing of the issuer, including credit rating downgrades, whether before or after the balance sheet date; • internal assessments and the assessments of external portfolio managers regarding specific circumstances surrounding an investment, which indicate the investment is more or less likely to recover its amortized cost than other investments with a similar structure; • failure of the issuer of the security to make scheduled interest or principal payments; • For structured securities (primarily asset-backed securities), ProAssurance estimates the present value of the security’s cash flows using the effective yield of the security at the date of acquisition (or the most recent implied rate used to accrete the security if the implied rate has changed as a result of a previous impairment or changes in expected cash flows). ProAssurance considers the most recently available six-month averages of the levels of delinquencies, defaults, severities, and prepayments for the collateral (loans) underlying the securitization or, if historical data is not available, sector based assumptions, to estimate expected future cash flows of these securities. Exclusive of securities where there is an intent to sell or where it is not more likely than not that the security will be required to be sold before recovery of its amortized cost basis, OTTI for debt securities is separated into a credit component and a non-credit component. The credit component of an OTTI is the difference between the security’s amortized cost basis and the present value of its expected future cash flows, while the non-credit component is the remaining difference between the security’s fair value and the present value of expected future cash flows. The credit component of the OTTI is recognized in earnings while the non-credit component is recognized in OCI. Investments in tax credit partnerships are evaluated for OTTI by considering both qualitative and quantitative factors which include: whether the current expected cash flows from the investment, primarily tax benefits, are less than those expected at the time the investment was acquired, and ProAssurance's ability and intent to hold the investment until the recovery of its carrying value. Investments in LP s/ LLC s other than tax credit partnerships are evaluated for impairment by comparing ProAssurance’s carrying value to net asset value of ProAssurance’s interest as reported by the LP / LLC . Additionally, Management considers the performance of the LP/LLC relative to the market and its stated objectives, cash flows expected from the interest, and the audited financial statements of the LP / LLC , if available. ProAssurance recognizes OTTI , exclusive of non-credit OTTI, in earnings as a part of net realized investment gains (losses). In subsequent periods, any measurement of gain, loss or impairment is based on the revised amortized basis of the security. Non-credit OTTI on debt securities and declines in fair value of available-for-sale securities not considered to be other-than-temporary are recognized in OCI . Asset-backed debt securities that have been impaired due to credit or are below investment grade quality are accounted for under the effective yield method. Under the effective yield method estimates of cash flows expected over the life of asset-backed securities are then used to recognize income on the investment balance for subsequent accounting periods. |
Foreign Currency | Foreign Currency The functional currency of all ProAssurance foreign subsidiaries is the U.S. Dollar |
Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of the consolidated balance sheets and statements of cash flows, ProAssurance considers all demand deposits and overnight investments to be cash equivalents. |
Restricted Cash | Restricted Cash Restricted cash represents cash balances which are not available for immediate or general use. Restricted cash activity in 2014 and 2013 related entirely to a collateral deposit which supported our Lloyd's Syndicate segment. |
Deferred Policy Acquisition Costs; Ceding Commission Income | Deferred Policy Acquisition Costs; Ceding Commission Income Costs that vary with and are directly related to the successful production of new and renewal premiums (primarily premium taxes, commissions and underwriting salaries) are deferred to the extent they are recoverable against unearned premiums and are amortized as related premiums are earned. Unearned ceding commission income is reported as an offset to DPAC . Ceding commission earned is reported as an offset to DPAC amortization. |
Income Taxes/Deferred Taxes | Income Taxes/Deferred Taxes ProAssurance files a consolidated federal income tax return. Tax-related interest and penalties are recognized as components of tax expense. ProAssurance evaluates tax positions taken on tax returns and recognizes positions in the financial statements when it is more likely than not that the position will be sustained upon resolution with a taxing authority. If recognized, the benefit is measured as the largest amount of benefit that has a greater than fifty percent probability of being realized. Uncertain tax positions are reviewed each period by considering changes in facts and circumstances, such as changes in tax law, interactions with taxing authorities and developments in case law, and adjustments would be made if considered necessary. No such adjustments were made during the years ended December 31, 2015 , 2014 or 2013 . Adjustments to unrecognized tax benefits may affect income tax expense and the settlement of uncertain tax positions may require the use of cash. Deferred federal income taxes arise from the recognition of temporary differences between the basis of assets and liabilities determined for financial reporting purposes and the basis determined for income tax purposes. ProAssurance’s temporary differences principally relate to loss reserves, unearned premium, compensation accruals, intangibles, DPAC , unrealized investment gains (losses), and basis differentials in fixed assets and investments. Deferred tax assets and liabilities are measured using the enacted tax rates expected to be in effect when such benefits are realized. ProAssurance reviews its deferred tax assets quarterly for impairment. If management determines that it is more likely than not that some or all of a deferred tax asset will not be realized, a valuation allowance is recorded to reduce the carrying value of the asset. In assessing the need for a valuation allowance, management is required to make certain judgments and assumptions about the future operations of ProAssurance based on historical experience and information as of the measurement date regarding reversal of existing temporary differences, carryback capacity, future taxable income, including its capital and operating characteristics, and tax planning strategies. Changes in tax laws and rates could also affect recorded deferred tax assets and liabilities in the future. Management is not aware of any such changes that would have a material effect on the Company’s results of operations, cash flows or financial position. |
Real Estate | Real Estate Real Estate balances are reported at cost or, for properties acquired in business combinations, estimated fair value on the date of acquisition, less accumulated depreciation. Real estate principally consists of properties in use as corporate offices. Depreciation is computed over the estimated useful lives of the related property using the straight-line method. Excess office capacity is leased or made available for lease; rental income is included in other income and real estate expenses are included in underwriting, policy acquisition and operating expenses. |
Intangible Assets | Intangible Assets Intangible assets with definite lives, primarily consist of agency and policyholder relationships, are amortized over the estimated useful life of the asset; those with indefinite lives, primarily state licenses, are not amortized. All intangible assets are evaluated for impairment on an annual basis. |
Goodwill | Goodwill Goodwill is recognized in conjunction with acquisitions as the excess of the purchase consideration for the acquisition over the fair value of identifiable assets acquired and liabilities assumed. The fair value of identifiable assets and liabilities, and thus goodwill, is subject to redetermination within a measurement period of up to one year following completion of an acquisition. ProAssurance evaluates the carrying value of goodwill at the reporting unit level annually as of October 1st. For ProAssurance, reporting units are consistent with the reportable segments identified in Note 15 . If, at any time during the year, events occur or circumstances change that would more likely than not reduce the fair value below the carrying value, an additional evaluation of goodwill is made. ProAssurance is permitted to conduct a qualitative assessment to determine whether it is necessary to perform a two-step quantitative goodwill impairment test but periodically elects to perform a quantitative impairment assessment. A quantitative goodwill impairment test for both the Specialty P&C and Workers' Compensation units was performed as of October 1, 2015. In the first step of the quantitative impairment test, the fair value of each reporting unit is compared to its carrying amount. In the 2015 evaluation, Management determined the fair value of each ProAssurance reporting unit using an equal weighting of fair values derived from the income approach and the market approach. Under the income approach, Management estimated the fair value of a reporting unit based on the present value of estimated future cash flows. Cash flow projections were based on Management's estimates of revenue growth rates and operating margins, taking into consideration industry and market conditions. The discount rate used was based on the weighted average cost of capital adjusted for the relevant risk associated with business specific characteristics and the uncertainty related to the reporting unit's ability to execute on the projected cash flows. Under the market approach, Management estimated the fair value based on market multiples of revenue and earnings derived from comparable publicly traded companies with operating and investment characteristics similar to the reporting unit. Management weighted the fair values derived from the market approach depending on the level of comparability of these publicly traded companies to the reporting unit. Estimating the fair value of a reporting unit is judgmental in nature and involved the use of significant estimates and assumptions by Management. These estimates and assumptions included revenue growth rates and operating margins used to calculate projected future cash flows, risk adjusted discount rates, future economic and market conditions and the determination of appropriate comparable publicly traded companies. In addition, Management made certain judgments and assumptions in allocating shared assets and liabilities to individual reporting units to determine the carrying amount of each reporting unit. If the fair value of a reporting unit exceeds the carrying amount of the net assets assigned to that reporting unit, goodwill is not impaired and no further testing is required. If the fair value of the reporting unit is less than its carrying amount, then the second step of the goodwill impairment test is performed which measures the amount of impairment loss, if any. In the second step, the reporting unit's assets, including any unrecognized intangible assets, liabilities and non-controlling interests are measured at fair value in a hypothetical analysis to calculate the implied fair value of goodwill for the reporting unit in the same manner as if the reporting unit was being acquired in a business combination. If the implied fair value of the reporting unit's goodwill is less than its carrying amount, the difference is recorded as an impairment loss. As of October 1, 2015 , the most recent evaluation date, Management concluded that the fair value of each ProAssurance reporting unit exceeded the carrying value of the reporting unit, and deemed it unnecessary to perform further testing for impairment. |
Treasury Shares | Treasury Stock Treasury shares are reported at cost, and are reflected on the Consolidated Balance Sheets as an unallocated reduction of total equity. |
Share-Based Payments | Share-Based Payments Compensation cost for share-based payments is measured based on the grant-date fair value of the award, recognized over the period in which the employee is required to provide service in exchange for the award. Excess tax benefits (tax deductions realized in excess of the compensation costs recognized for the exercise of the awards, multiplied by the incremental tax rate) are reported as financing cash inflows. |
Subsequent Events | Subsequent Events ProAssurance evaluates events that occurred subsequent to December 31, 2015 , for recognition or disclosure in its Consolidated Financial Statements. |
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 which changes the requirements for reporting discontinued operations. Under the new guidance, reporting entities are required to report disposals of business components only if the disposal represents a strategic shift in the entity’s operations that will have a major effect on the entity’s operations and financial results. The new guidance expands disclosure requirements for reported discontinued operations and requires disclosure of pre-tax profit or loss attributable to significant disposals that are not reported as discontinued operations. ProAssurance adopted the guidance effective 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. Recognition and Measurement of Financial Assets and Financial Liabilities Effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years, the FASB issued guidance that requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. The new guidance also specifies that an entity use the exit price notion when measuring the fair value of financial instruments for disclosure purposes and present financial assets and liabilities by measurement category and form of financial asset. Other provisions of the new guidance include: revised disclosure requirements related to the presentation in comprehensive income of changes in the fair value of liabilities; elimination, for public companies, of disclosure requirements relative to the method(s) and significant assumptions underlying fair values disclosed for financial instruments measured at amortized cost; and simplified impairment assessments for equity investments without readily determinable fair values. ProAssurance plans to adopt the guidance beginning January 1, 2018. Adoption of the guidance is not expected to have a material effect on ProAssurance’s results of operations or financial position. |
Accounting Policies (Tables)
Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Schedule of intangible assets | The following table provides additional information regarding ProAssurance's intangible assets. Gross Carrying Value Accumulated Amortization Amortization Expense December 31 December 31 Year Ended December 31 (In millions) 2015 2014 2015 2014 2015 2014 2013 Intangible Assets Non-amortizable $ 25.8 $ 25.8 Amortizable 94.0 96.2 $ 27.3 $ 21.2 $ 8.3 $ 10.3 $ 5.3 Total Intangible Assets $ 119.8 $ 122.0 Aggregate amortization expense for intangible assets is estimated to be $8.1 million for the year ended December 31, 2016 and $5.6 million for each of the years ended December 31, 2017 , 2018 , 2019 and 2020 . |
Other liabilities | Other liabilities at December 31, 2015 and 2014 consisted of the following: (In millions) 2015 2014 SPC dividends payable $ 16.7 $ 15.8 Liability for unpaid dividends 69.4 167.7 Remaining other liabilities 116.2 137.4 Total Other liabilities $ 202.3 $ 320.9 |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
ProAssurance Consolidated results | The following table provides Pro Forma Consolidated Results for the years ended December 31, 2014 and 2013 as if the Eastern transaction had occurred on January 1, 2013. ProAssurance Actual Consolidated Results have been adjusted by the following, including tax effects, to reflect the Pro Forma Consolidated Results below. Medmarc actual results are included in ProAssurance consolidated results for 2014 and 2013; accordingly, the Pro Forma Consolidated Results below do not include any adjustments associated with the Medmarc acquisition. • For the year ended December 31, 2013, ProAssurance 2013 Actual Consolidated Results, which did not include Eastern, have been adjusted to include Eastern's 2013 operating results. ProAssurance Actual Consolidated Results for the year ended December 31, 2014 included Eastern's operating results (Revenue of $202.2 million and Net income of $9.1 million ). • Certain costs included in ProAssurance Actual Consolidated Results for the year ended December 31, 2014 have been reported in the Pro Forma Consolidated Results as if the costs had been incurred for the year ended December 31, 2013. Such costs include direct transaction costs and certain compensation costs directly related to the integration of Eastern operations. There was a nominal amount of compensation costs related to the acquisition of Eastern in 2015. • Net income for the year ended December 31, 2013 was reduced to reflect the net effect from amortization of intangible assets and debt security premiums and accretion of discounts recorded as a part of the Eastern purchase price allocation. No such adjustments were necessary for the period ended December 31, 2014 as actual results already include amortization and accretion associated with the Eastern transaction. Year Ended December 31, 2014 Year Ended December 31, 2013 (In thousands) ProAssurance ProAssurance ProAssurance ProAssurance Revenue $852,326 $852,326 $926,873 $740,178 Net income $197,527 * $196,565 $297,149 * $297,523 * Includes adjustments related to Eastern of $1.0 million in 2014 and $0.4 million in 2013. |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 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 December 31, 2015 and December 31, 2014 are shown in the following tables. Where applicable, 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. December 31, 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 $ — $ 123,892 $ — $ 123,892 U.S. Government-sponsored enterprise obligations — 26,334 — 26,334 State and municipal bonds — 940,635 — 940,635 Corporate debt, multiple observable inputs 2,362 1,274,824 — 1,277,186 Corporate debt, limited observable inputs — — 14,500 14,500 Residential mortgage-backed securities — 238,387 — 238,387 Agency commercial mortgage-backed securities — 10,999 — 10,999 Other commercial mortgage-backed securities — 30,134 — 30,134 Other asset-backed securities — 97,463 757 98,220 Equity securities Financial 67,764 — — 67,764 Utilities/Energy 41,050 — — 41,050 Consumer oriented 56,470 — — 56,470 Industrial 48,305 — — 48,305 Bond funds 76,316 — — 76,316 All other 18,239 14,209 — 32,448 Short-term investments 86,271 32,965 — 119,236 Other investments 3,478 27,133 — 30,611 Total assets categorized within the fair value hierarchy $ 400,255 $ 2,816,975 $ 15,257 3,232,487 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. 162,624 Total assets at fair value $ 3,395,111 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) December 31, 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 $14.5 $13.1 Market Comparable Comparability Adjustment 0% - 5% (2.5%) Discounted Cash Flows Comparability Adjustment 0% - 5% (2.5%) Other asset-backed securities $0.8 $4.8 Market Comparable Comparability Adjustment 0% - 5% (2.5%) Discounted Cash Flows Comparability Adjustment 0% - 5% (2.5%) |
Summary of changes in the fair value of assets measured at fair value | The following tables (the Level 3 Tables) present summary information regarding changes in the fair value of assets measured at fair value using Level 3 inputs. December 31, 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 — — 18 — — 18 Equity in earnings of unconsolidated subsidiaries — — — — (83 ) (83 ) Net realized investment gains (losses) — — (363 ) (11 ) (156 ) (530 ) Included in other comprehensive income — (459 ) 73 (7 ) — (393 ) Purchases — — 1,996 1,500 1,700 5,196 Sales — — (1,896 ) (4,000 ) — (5,896 ) Transfers in — — 6,640 — — 6,640 Transfers out — (4,566 ) (5,049 ) (1,494 ) (1,461 ) (12,570 ) Balance December 31, 2015 $ — $ — $ 14,500 $ 757 $ — $ 15,257 Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end $ — $ — $ — $ — $ — $ — December 31, 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 — (14 ) 65 — — 51 Equity in earnings of unconsolidated subsidiaries — — — — — — Net realized investment gains (losses) — (95 ) 3 — — (92 ) Included in other comprehensive income 1 (29 ) 688 59 — 719 Purchases 1,000 1,861 2,000 3,340 — 8,201 Sales — (1,731 ) (1,826 ) (61 ) — (3,618 ) Transfers in — 2,119 — 305 — 2,424 Transfers out (1,001 ) (4,424 ) (2,025 ) (5,688 ) — (13,138 ) Balance December 31, 2014 $ — $ 5,025 $ 13,081 $ 4,769 $ — $ 22,875 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 December 31, 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) December 31, December 31, December 31, Investments in LPs/LLCs: Private debt funds (1) $14,267 $ 50,268 $ 37,296 Long equity fund (2) None 6,407 6,747 Long/short equity funds (3) None 28,030 25,301 Non-public equity funds (4) $48,381 65,722 51,811 Multi-strategy fund of funds (5) None 8,252 8,271 Structured credit fund (6) None 3,945 3,824 $ 162,624 $ 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 offers to repurchase units of the LLC may be extended periodically. (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. December 31, 2015 December 31, 2014 (In thousands) Carrying Fair Carrying Fair Financial assets: BOLI $ 57,213 $ 57,213 $ 56,381 $ 56,381 Other investments 48,522 51,646 57,099 57,994 Other assets 24,215 24,193 22,440 22,399 Financial liabilities: Senior notes due 2023 $ 250,000 $ 261,308 $ 250,000 $ 276,503 Revolving credit agreement 100,000 100,000 — — Other liabilities 14,897 14,893 14,656 14,645 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 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 December 31, 2015 and December 31, 2014 included the following: December 31, 2015 (In thousands) Amortized Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Fixed maturities U.S. Treasury obligations $ 122,855 $ 1,696 $ 659 $ 123,892 U.S. Government-sponsored enterprise obligations 25,456 927 49 26,334 State and municipal bonds 904,719 36,739 823 940,635 Corporate debt 1,296,128 24,720 29,162 1,291,686 Residential mortgage-backed securities 233,659 6,039 1,311 238,387 Agency commercial mortgage-backed securities 10,851 174 26 10,999 Other commercial mortgage-backed securities 29,983 354 203 30,134 Other asset-backed securities 98,412 54 246 98,220 $ 2,722,063 $ 70,703 $ 32,479 $ 2,760,287 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 December 31, 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 $ 122,855 $ 10,703 $ 94,067 $ 15,923 $ 3,199 $ 123,892 U.S. Government-sponsored enterprise obligations 25,456 2,290 16,593 7,312 139 26,334 State and municipal bonds 904,719 48,752 332,489 428,872 130,522 940,635 Corporate debt 1,296,128 104,746 698,148 455,849 32,943 1,291,686 Residential mortgage-backed securities 233,659 238,387 Agency commercial mortgage-backed securities 10,851 10,999 Other commercial mortgage-backed securities 29,983 30,134 Other asset-backed securities 98,412 98,220 $ 2,722,063 $ 2,760,287 |
Other Investments | Other investments at December 31, 2015 and December 31, 2014 were comprised as follows: (In thousands) December 31, December 31, Investments in LPs/LLCs, at cost $ 44,958 $ 53,258 Convertible securities, at fair value 30,611 28,958 Other, principally FHLB capital stock, at cost 3,564 3,841 $ 79,133 $ 86,057 |
Unconsolidated Subsidiaries | ProAssurance holds investments in unconsolidated subsidiaries, accounted for under the equity method. The investments include the following: December 31, 2015 Carrying Value (In thousands) Percentage December 31, December 31, Investment in LPs/LLCs: Qualified affordable housing tax credit partnerships See below $ 121,550 $ 133,143 Other tax credit partnerships See below 8,362 — All other LPs/LLCs See below 181,996 143,358 $ 311,908 $ 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 December 31, 2015 and December 31, 2014 , including the length of time the investment had been held in a continuous unrealized loss position. December 31, 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 $ 66,685 $ 658 $ 61,869 $ 591 $ 4,816 $ 67 U.S. Government-sponsored enterprise obligations 6,819 49 6,819 49 — — State and municipal bonds 46,193 823 36,822 703 9,371 120 Corporate debt 622,991 29,162 555,097 15,691 67,894 13,471 Residential mortgage-backed securities 87,567 1,311 78,961 1,095 8,606 216 Agency commercial mortgage-backed securities 409 26 — — 409 26 Other commercial mortgage-backed securities 15,960 203 12,635 170 3,325 33 Other asset-backed securities 79,637 247 74,150 237 5,487 10 $ 926,261 $ 32,479 $ 826,353 $ 18,536 $ 99,908 $ 13,943 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: Year Ended December 31 (In thousands) 2015 2014 2013 Fixed maturities $ 97,348 $ 111,895 $ 122,065 Equities 13,317 10,817 9,454 Short-term and Other investments 2,049 8,833 2,584 BOLI 2,053 2,006 1,960 Investment fees and expenses (6,107 ) (7,994 ) (6,798 ) Net investment income $ 108,660 $ 125,557 $ 129,265 |
Net realized investment gains (losses) | The following table provides detailed information regarding net realized investment gains (losses): Year Ended December 31 (In thousands) 2015 2014 2013 Total OTTI losses: State and municipal bonds $ — $ (50 ) $ (71 ) Corporate debt (11,781 ) (1,425 ) — Other investments (8,136 ) — — Portion recognized in OCI: Corporate debt 4,572 268 — Net impairments recognized in earnings (15,345 ) (1,207 ) (71 ) Gross realized gains, available-for-sale securities 11,936 5,627 18,130 Gross realized (losses), available-for-sale securities (11,481 ) (1,103 ) (7,031 ) Net realized gains (losses), trading securities 1,080 28,018 20,444 Net realized gains (losses), Other investments 464 326 — Change in unrealized holding gains (losses), trading securities (28,343 ) (18,883 ) 35,507 Change in unrealized holding gains (losses), convertible securities, carried at fair value (896 ) 1,876 — Other 946 — 925 Net realized investment gains (losses) $ (41,639 ) $ 14,654 $ 67,904 |
Cumulative credit losses recorded in earnings related to impaired debt securities for which a portion of the OTTI has been recorded in OCI | The following table presents a roll forward of cumulative credit losses recorded in earnings related to impaired debt securities for which a portion of the OTTI was recorded in OCI . (In thousands) 2015 2014 2013 Balance January 1 $ 232 $ 83 $ 3,301 Additional credit losses recognized during the period, related to securities for which: No OTTI has been previously recognized 3,648 149 — OTTI has been previously recognized 2,645 — — Reductions due to: Securities sold during the period (realized) (774 ) — (3,218 ) Balance December 31 $ 5,751 $ 232 $ 83 |
Information regarding sales and purchases of available-for-sale securities | Other information regarding sales and purchases of available-for-sale securities is as follows: Year Ended December 31 (In millions) 2015 2014 2013 Proceeds from sales (exclusive of maturities and paydowns) $ 481.8 $ 244.9 $ 593.3 Purchases $ 580.6 $ 645.1 $ 519.2 |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Insurance [Abstract] | |
Summary of the effect of reinsurance on premiums written and earned | The effect of reinsurance on premiums written and earned was as follows: (In thousands) 2015 Premiums 2014 Premiums 2013 Premiums Written Earned Written Earned Written Earned Direct $ 780,982 $ 772,968 $ 761,043 $ 755,623 $ 566,745 $ 568,629 Assumed 31,236 22,691 18,566 12,987 802 804 Ceded (102,933 ) (101,510 ) (77,760 ) (68,879 ) (42,365 ) (41,514 ) Net premiums $ 709,285 $ 694,149 $ 701,849 $ 699,731 $ 525,182 $ 527,919 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Components of deferred tax assets and liabilities | Significant components of ProAssurance’s deferred tax assets and liabilities were as follows: (In thousands) 2015 2014 Deferred tax assets Unpaid loss discount $ 44,886 $ 44,002 Unearned premium adjustment 22,889 23,972 Compensation related 18,130 18,623 Intangibles 1,435 1,957 Total deferred tax assets 87,340 88,554 Deferred tax liabilities Deferred acquisition costs 9,287 9,180 Unrealized gains on investments, net 13,933 31,342 Fixed assets 3,401 3,689 Basis differentials–investments 17,492 31,657 Intangibles 24,644 27,294 Other 3,486 4,210 Total deferred tax liabilities 72,243 107,372 Net deferred tax assets (liabilities) $ 15,097 $ (18,818 ) |
Reconciliation of unrecognized tax benefits | A reconciliation of the beginning and ending amounts of unrecognized tax benefits for 2015 , 2014 and 2013 , was as follows: (In thousands) 2015 2014 2013 Balance at January 1 $ 577 $ 4,823 $ 4,823 Increase for tax position acquired as result of a business combination — 414 — Increases for tax positions taken during the current year 7,618 163 — (Decreases) for tax positions taken during the current year — (4,823 ) — Balance at December 31 $ 8,195 $ 577 $ 4,823 |
Reconciliation of expected income tax expense to actual income tax expense | A reconciliation of “expected” income tax expense ( 35% of income before income taxes) to actual income tax expense for each of the years ended December 31, 2015 , 2014 and 2013 were as follows: (In thousands) 2015 2014 2013 Computed “expected” tax expense $ 45,099 $ 91,702 $ 139,005 Tax-exempt income (12,913 ) (13,250 ) (14,509 ) Tax credits (22,407 ) (17,918 ) (17,888 ) Non-taxable gain on acquisition — — (11,310 ) Non-U.S. Loss 1,806 1,741 — Other 1,073 3,165 4,338 Income tax expense $ 12,658 $ 65,440 $ 99,636 |
Reserve for Losses and Loss A36
Reserve for Losses and Loss Adjustment Expenses (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Insurance [Abstract] | |
Summary of reserve for losses and loss adjustment expenses | Activity in the reserve for losses and loss adjustment expenses is summarized as follows: (In thousands) 2015 2014 2013 Balance, beginning of year $ 2,058,266 $ 2,072,822 $ 2,054,994 Less reinsurance recoverables on unpaid losses and loss adjustment expenses 237,966 247,518 191,645 Net balance, beginning of year 1,820,300 1,825,304 1,863,349 Net reserves acquired from acquisitions — 139,549 126,007 Net losses: Current year 571,891 545,168 447,510 Favorable development of reserves established in prior years, net (161,180 ) (182,084 ) (222,749 ) Total 410,711 363,084 224,761 Paid related to: Current year (84,186 ) (93,737 ) (43,616 ) Prior years (390,849 ) (413,900 ) (345,197 ) Total paid (475,035 ) (507,637 ) (388,813 ) Net balance, end of year 1,755,976 1,820,300 1,825,304 Plus reinsurance recoverables on unpaid losses and loss adjustment expenses 249,350 237,966 247,518 Balance, end of year $ 2,005,326 $ 2,058,266 $ 2,072,822 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments for operating leases | The following is a schedule of future minimum lease payments for operating leases that had initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2015 . Operating Leases (In thousands) 2016 $ 5,010 2017 3,669 2018 2,997 2019 2,567 2020 1,784 Thereafter 3,442 Total minimum lease payments $ 19,469 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Outstanding long-term debt | ProAssurance’s outstanding debt consisted of the following: (In thousands) December 31, 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 4, and carried at an interest rate of 0.82%. 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 April 2016. If renewed, the interest rate will reset. 100,000 — $ 350,000 $ 250,000 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Common Stock outstanding | The following is a summary of changes in common shares issued and outstanding during the years ended December 31, 2015 , 2014 and 2013 : (In thousands of shares) 2015 2014 2013 Issued and outstanding shares - January 1 56,534 61,197 61,624 Repurchase of shares (3,680 ) (4,909 ) (681 ) Shares issued due to exercise of options and vesting of share-based compensation awards 150 154 169 Other shares issued for compensation and shares reissued to stock purchase plan* 97 92 85 Issued and outstanding shares - December 31 53,101 56,534 61,197 * Shares issued were valued at fair value (the market price of a ProAssurance common share on the date of issue). |
Dividends declared | ProAssurance declared cash dividends during 2015 , 2014 and 2013 as follows: Cash Dividends Declared, per Share 2015 2014 2013 First Quarter $ 0.31 $ 0.30 $ 0.25 Second Quarter 0.31 0.30 0.25 Third Quarter 0.31 0.30 0.25 Fourth Quarter* 1.31 2.96 0.30 * Includes special dividends of $1.00 per share in 2015 and $2.65 per share in 2014. |
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: (In thousands) 2015 2014 2013 Reclassifications from AOCI to net income, available-for-sale securities: Realized investment gains (losses) $ (4,475 ) $ 3,317 $ 11,722 Non-credit impairment losses reclassified to earnings, due to sale of securities or reclassification as a credit loss (2,279 ) — (347 ) Tax effect (at 35%) 2,364 (1,161 ) (3,981 ) Net reclassification adjustments $ (4,390 ) $ 2,156 $ 7,394 Deferred tax expense (benefit) included in OCI $ (18,370 ) $ (785 ) $ (46,157 ) |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of compensation expense and related tax benefit recognized during each period, and compensation cost expense in future periods | The following table provides a summary of compensation expense and the total related tax benefit recognized during each period as well as compensation cost that will be charged to expense in future periods, by award type. Share-Based Unrecognized Compensation Cost Year Ended December 31 December 31, 2015 2015 2014 2013 Amount Remaining (In millions) (In millions) (Weighted average years) Restricted Share Units $ 2.5 $ 1.7 $ 1.6 $ 3.2 1.8 Performance Share Units 5.9 7.6 7.1 6.0 1.6 Purchase Match Units 0.8 0.8 0.5 1.8 2.2 Total share-based compensation expense $ 9.2 $ 10.1 $ 9.2 $ 11.0 Tax benefit recognized $ 3.2 $ 3.5 $ 3.2 |
Summary of activity related to management share awards | Activity for restricted share units during 2015 , 2014 and 2013 is summarized below. Grant date fair values are based on the market value of a ProAssurance common share on the date of grant less the estimated present value of dividends during the vesting period. 2015 2014 2013 Units Weighted Units Weighted Units Weighted Beginning non-vested balance 136,802 $ 45.02 138,770 $ 38.92 157,212 $ 31.94 Granted 91,943 42.73 49,750 46.34 39,400 46.97 Forfeited (1,342 ) 42.79 (2,044 ) 44.88 (603 ) 35.91 Vested and released (48,935 ) 42.24 (49,674 ) 29.22 (57,239 ) 25.25 Ending non-vested balance 178,468 44.64 136,802 45.02 138,770 38.92 |
Summarized activity for performance share awards | The table reflects the base number of units; actual awards that vest depend upon the extent to which performance objectives are achieved. Grant date fair values are based on the market value of a ProAssurance common share on the date of grant less the estimated present value of dividends during the vesting period. 2015 2014 2013 Base Units Weighted Base Units Weighted Base Units Weighted Beginning non-vested balance 466,860 $ 44.97 486,680 $ 39.86 552,417 $ 33.21 Granted 106,490 42.73 160,900 46.34 145,580 46.97 Forfeited (2,322 ) 46.42 (14,221 ) 45.30 (17,043 ) 38.90 Vested and released (180,678 ) 42.44 (166,499 ) 31.33 (194,274 ) 26.39 Ending non-vested balance 390,350 45.56 466,860 44.97 486,680 39.86 |
Market value of ProAssurance common share on the grant date fair value | Purchase match unit activity during 2015 , 2014 and 2013 is summarized below. Grant date fair values are based on the market value of a ProAssurance common share on the date of grant less the estimated present value of dividends during the vesting period. 2015 2014 2013 Units Weighted Units Weighted Units Weighted Beginning non-vested balance 72,101 $ 43.69 63,125 $ 41.34 40,985 $ 39.85 Granted 26,593 46.03 29,069 44.55 25,151 43.57 Forfeited (3,087 ) 44.16 (2,968 ) 43.14 (2,456 ) 40.71 Vested and released (21,124 ) 42.65 (17,125 ) 36.61 (555 ) 36.33 Ending non-vested balance 74,483 44.80 72,101 43.69 63,125 41.34 |
Summary of fully-vested employee stock options outstanding | ProAssurance also had certain fully-vested employee stock options outstanding during 2015 , 2014 and 2013 , as summarized below. 2015 2014 2013 Options Weighted Options Weighted Options Weighted Outstanding, vested and exercisable, beginning of year 4,456 $ 24.64 18,082 $ 23.00 20,302 $ 23.15 Exercised (2,342 ) 24.13 (13,626 ) 22.47 (2,220 ) 24.28 Outstanding, vested and exercisable, end of year 2,114 25.02 4,456 24.64 18,082 23.00 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Financial data by segment were as follows: Year Ended December 31, 2015 (In thousands) Specialty P&C Workers' Compensation Lloyd's Syndicate Corporate Inter-segment Eliminations Consolidated Net premiums earned $ 443,313 $ 213,161 $ 37,675 $ — $ — $ 694,149 Net investment income — — 928 107,732 — 108,660 Equity in earnings (loss) of unconsolidated subsidiaries — — — 3,682 — 3,682 Net realized gains (losses) — — 24 (41,663 ) — (41,639 ) Other income 4,561 492 698 2,057 (581 ) 7,227 Net losses and loss adjustment expenses (1) (250,168 ) (140,744 ) (25,181 ) — 5,382 (410,711 ) Underwriting, policy acquisition and operating expenses (2) (105,574 ) (63,653 ) (18,518 ) (24,518 ) (4,801 ) (217,064 ) Segregated portfolio cells dividend (expense) income — (853 ) — — — (853 ) Interest expense — — — (14,596 ) — (14,596 ) Income tax benefit (expense) — — (1,240 ) (11,418 ) — (12,658 ) Segment operating results $ 92,132 $ 8,403 $ (5,614 ) $ 21,276 $ — $ 116,197 Significant non-cash items: Depreciation and amortization $ 8,663 $ 5,696 $ 417 $ 21,624 $ — $ 36,400 Year Ended December 31, 2014 (In thousands) Specialty P&C Workers' Compensation Lloyd's Syndicate Corporate Inter-segment Eliminations Consolidated Net premiums earned $ 492,733 $ 194,540 $ 12,458 $ — $ — $ 699,731 Net investment income — — 410 125,147 — 125,557 Equity in earnings (loss) of unconsolidated subsidiaries — — — 3,986 — 3,986 Net realized gains (losses) — — 4 14,650 — 14,654 Other income 5,823 645 126 2,285 (481 ) 8,398 Gain on acquisition — — — — — — Net losses and loss adjustment expenses (1) (228,199 ) (126,447 ) (8,438 ) — — (363,084 ) Underwriting, policy acquisition and operating expenses (2) (133,132 ) (60,357 ) (9,535 ) (8,768 ) 481 (211,311 ) Segregated portfolio cells dividend (expense) income — (1,842 ) — — — (1,842 ) Interest expense — — — (14,084 ) — (14,084 ) Income tax benefit (expense) — — — (65,440 ) — (65,440 ) Segment operating results $ 137,225 $ 6,539 $ (4,975 ) $ 57,776 $ — $ 196,565 Significant non-cash items: Depreciation and amortization $ 8,945 $ 5,828 $ 477 $ 24,344 $ — $ 39,594 Year Ended December 31, 2013 (In thousands) Specialty P&C Workers' Compensation Lloyd's Syndicate Corporate Inter-segment Eliminations Consolidated Net premiums earned $ 527,919 $ — $ — $ — $ — $ 527,919 Net investment income — — — 129,265 — 129,265 Equity in earnings (loss) of unconsolidated subsidiaries — — — 7,539 — 7,539 Net realized gains (losses) — — 67,904 — 67,904 Other income 5,648 — — 1,910 (7 ) 7,551 Gain on acquisition — — — 32,314 — 32,314 Net losses and loss adjustment expenses (1) (224,761 ) — — — — (224,761 ) Underwriting, policy acquisition and operating expenses (2) (132,076 ) — — (15,748 ) 7 (147,817 ) Interest expense — — — (2,755 ) — (2,755 ) Loss on extinguishment of debt — — — — — — Income tax benefit (expense) — (99,636 ) (99,636 ) Segment operating results $ 176,730 $ — $ — $ 120,793 $ — $ 297,523 Significant non-cash items: Depreciation and amortization $ 7,199 $ — $ — $ 28,634 $ — $ 35,833 (1) Beginning in 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. The portion of the management fee that is allocated to ULAE is eliminated in consolidation. (2) Under the management fee arrangement mentioned above, 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. |
Revenue from External Customers by Products and Services | 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. Year Ended December 31 (In thousands) 2015 2014 2013 Specialty P&C Segment Gross premiums earned: Healthcare professional liability $ 463,599 $ 477,031 $ 507,222 Legal professional liability 28,234 28,278 27,162 Medical technology liability 34,838 35,913 33,242 Other 1,447 1,830 1,807 Less: Ceded premiums earned* 84,805 50,319 41,514 Segment net premiums earned 443,313 492,733 527,919 Workers' Compensation Segment Gross premiums earned: Traditional business 172,115 160,717 — Alternative market business 66,168 55,616 — Less: Ceded premiums earned 25,122 21,793 — Segment net premiums earned 213,161 194,540 — Lloyd's Syndicate Segment Gross premiums earned: Property and casualty* 43,617 13,429 — Less: Ceded premiums earned 5,942 971 — Segment net premiums earned 37,675 12,458 — Consolidated net premiums earned $ 694,149 $ 699,731 $ 527,919 * Includes premium ceded from the Specialty P&C segment to the Lloyd's Syndicate segment of $14.4 million and $4.2 million for years ended December 31, 2015 and December 31, 2014 , respectively. |
Statutory Accounting and Divi42
Statutory Accounting and Dividend Restrictions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Statutory Accounting And Dividend Restrictions [Abstract] | |
Consolidated net income | Net earnings and capital and surplus of ProAssurance’s insurance subsidiaries on a statutory basis are shown in the following table. (In millions) Statutory Net Earnings Statutory Capital and Surplus 2015 2014 2013 2015 2014 $168 $246 $256 $1,506 $1,681 |
Quarterly Results of Operatio43
Quarterly Results of Operations (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Data [Abstract] | |
Summary of unaudited quarterly results of operations | The following is a summary of unaudited quarterly results of operations for 2015 and 2014 : 2015 (In thousands, except per share data) 1st 2nd 3rd 4th Net premiums earned $ 171,899 $ 175,293 $ 182,085 $ 164,874 Net losses and loss adjustment expenses: Current year 138,654 139,057 145,027 149,157 Prior year (33,514 ) (35,115 ) (36,221 ) (56,330 ) Net income 37,814 33,158 10,276 34,948 Basic earnings per share 0.67 0.60 0.19 0.66 Diluted earnings per share 0.67 0.60 0.19 0.65 2014 (In thousands, except per share data) 1st 2nd 3rd 4th Net premiums earned $ 171,730 $ 176,303 $ 177,028 $ 174,670 Net losses and loss adjustment expenses: Current year 137,647 141,126 142,124 124,271 Prior year (48,139 ) (42,213 ) (42,902 ) (48,830 ) Net income 46,731 49,942 34,778 65,114 Basic earnings per share 0.76 0.84 0.59 1.13 Diluted earnings per share 0.76 0.84 0.59 1.12 * Quarterly and year-to-date computations of per share amounts are made independently; therefore, the sum of per share amounts for the quarters may not equal per share amounts for the respective year-to-date periods. |
Accounting Policies (Narrative)
Accounting Policies (Narrative) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)Segment | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Accounting Policies [Abstract] | |||
Number of reportable segments | Segment | 4 | ||
Insurance policy duration | 1 year | ||
Recorded allowances for credit losses (less than) | $ 1,500 | $ 1,500 | |
Estimated credit losses | 600 | 600 | |
Account write offs (up to) | 600 | 600 | |
Earned But unbilled premiums | $ 3,900 | 3,400 | |
Minimum period for claims resolution | 5 years | ||
Percentage of tax benefit | 50.00% | ||
Property, Plant and Equipment [Line Items] | |||
Depreciation | $ 7,437 | 6,956 | $ 4,538 |
Estimated aggregate amortization of intangible assets for 2016 | 8,100 | ||
Estimated aggregate amortization of intangible assets for 2017 | 5,600 | ||
Estimated aggregate amortization of intangible assets for 2018 | 5,600 | ||
Estimated aggregate amortization of intangible assets for 2019 | 5,600 | ||
Estimated aggregate amortization of intangible assets for 2020 | 5,600 | ||
Building and Building Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Real estate accumulated depreciation | 24,200 | 23,000 | |
Depreciation | $ 1,500 | $ 1,500 | $ 1,500 |
Accounting Policies (Intangible
Accounting Policies (Intangible Assets) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accounting Policies [Abstract] | |||
Carrying value of indefinite lived intangible assets | $ 25.8 | $ 25.8 | |
Carrying value of finite-lived intangible assets | 94 | 96.2 | |
Total Intangible Assets | 119.8 | 122 | |
Accumulated amortization of intangible assets | 27.3 | 21.2 | |
Amortization expense for intangible assets | $ 8.3 | $ 10.3 | $ 5.3 |
Accounting Policies (Other Asse
Accounting Policies (Other Assets and Other Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Accounting Policies [Abstract] | |||
SPC dividends payable | $ 16,700 | $ 15,800 | |
Liability for unpaid dividends | 69,447 | 167,744 | $ 18,532 |
Remaining other liabilities | 116,200 | 137,400 | |
Total Other liabilities | $ 202,303 | $ 320,853 |
Business Combinations (Narrativ
Business Combinations (Narrative) (Details) - USD ($) $ in Thousands | Jan. 01, 2014 | Jan. 01, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Business Acquisition [Line Items] | |||||
Gain on acquisition | $ 0 | $ 0 | $ 32,314 | ||
Eastern Insurance Holdings [Member] | |||||
Business Acquisition [Line Items] | |||||
Voting interests acquired | 100.00% | ||||
Total purchase consideration | $ 205,000 | ||||
Expenses related to the purchase of business | 2,200 | 900 | |||
Revenue of aquiree since acquisition date | 202,200 | ||||
Earnings of acquiree since acquisition date | $ 9,100 | ||||
Medmarc [Member] | |||||
Business Acquisition [Line Items] | |||||
Total purchase consideration | $ 153,700 | ||||
Expenses related to the purchase of business | 2,600 | ||||
Gain on acquisition | $ 32,300 | ||||
Business acquisition, related premium credits to eligible policyholders | $ 7,500 |
Business Combinations (Pro Form
Business Combinations (Pro Forma Consolidated Results) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Business Acquisition [Line Items] | |||||||||||
ProAssurance Pro Forma Consolidated Results, Revenue | $ 852,326 | $ 926,873 | |||||||||
ProAssurance Actual Consolidated Results, Revenue | $ 772,079 | 852,326 | 740,178 | ||||||||
ProAssurance Pro Forma Consolidated Results, Net income | 197,527 | 297,149 | |||||||||
ProAssurance Actual Consolidated Results, Net income | $ 34,948 | $ 10,276 | $ 33,158 | $ 37,814 | $ 65,114 | $ 34,778 | $ 49,942 | $ 46,731 | $ 116,197 | 196,565 | 297,523 |
Eastern Insurance Holdings [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Adjustments related to pro forma revenue | $ 1,000 | $ 400 |
Fair Value Measurement (Assets
Fair Value Measurement (Assets and Liabilities Measured at Fair Value) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Assets: | ||
Equity securities, trading, at fair value | $ 322,353 | $ 314,482 |
Other investments | 79,133 | 86,057 |
Other investments | ||
Total assets at fair value | 3,395,111 | 3,752,976 |
Level 3 [Member] | State and municipal bonds [Member] | ||
Other investments | ||
Total assets at fair value | 0 | 5,000 |
Level 3 [Member] | Corporate debt, limited observable inputs [Member] | ||
Other investments | ||
Total assets at fair value | 14,500 | 13,100 |
Level 3 [Member] | Other asset-backed securities [Member] | ||
Other investments | ||
Total assets at fair value | 800 | 4,800 |
Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Other investments | 30,611 | 28,958 |
Other investments | ||
Total assets at fair value | 3,232,487 | 3,619,726 |
Fair Value, Measurements, Recurring [Member] | U.S. Treasury obligations [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 123,892 | 166,512 |
Fair Value, Measurements, Recurring [Member] | U.S. Government-sponsored enterprise obligations [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 26,334 | 39,563 |
Fair Value, Measurements, Recurring [Member] | State and municipal bonds [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 940,635 | 1,062,615 |
Fair Value, Measurements, Recurring [Member] | Corporate debt, multiple observable inputs [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 1,277,186 | 1,404,020 |
Fair Value, Measurements, Recurring [Member] | Corporate debt, limited observable inputs [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 14,500 | 13,081 |
Fair Value, Measurements, Recurring [Member] | Residential mortgage-backed securities [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 238,387 | 276,056 |
Fair Value, Measurements, Recurring [Member] | Agency commercial mortgage-backed securities [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 10,999 | 15,493 |
Fair Value, Measurements, Recurring [Member] | Other commercial mortgage-backed securities [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 30,134 | 51,063 |
Fair Value, Measurements, Recurring [Member] | Other asset-backed securities [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 98,220 | 116,624 |
Fair Value, Measurements, Recurring [Member] | Financial [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 67,764 | 79,341 |
Fair Value, Measurements, Recurring [Member] | Utilities/Energy [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 41,050 | 25,629 |
Fair Value, Measurements, Recurring [Member] | Consumer oriented [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 56,470 | 65,670 |
Fair Value, Measurements, Recurring [Member] | Industrial [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 48,305 | 55,460 |
Fair Value, Measurements, Recurring [Member] | Fixed Income Funds [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 76,316 | 55,196 |
Fair Value, Measurements, Recurring [Member] | All other [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 32,448 | 33,186 |
Fair Value, Measurements, Recurring [Member] | Short-term Investments [Member] | ||
Assets: | ||
Short-term investments | 119,236 | 131,259 |
Fair Value, Measurements, Recurring [Member] | Accounting Standards Update 2015-07 [Member] | ||
Other investments | ||
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. | 162,624 | 133,250 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | ||
Assets: | ||
Other investments | 3,478 | 6,050 |
Other investments | ||
Total assets at fair value | 400,255 | 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 | 2,362 | 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, trading, at fair value | 67,764 | 79,341 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Utilities/Energy [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 41,050 | 25,629 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Consumer oriented [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 56,470 | 65,670 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Industrial [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 48,305 | 55,460 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Fixed Income Funds [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 76,316 | 55,196 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | All other [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 18,239 | 33,186 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Short-term Investments [Member] | ||
Assets: | ||
Short-term investments | 86,271 | 131,199 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | ||
Assets: | ||
Other investments | 27,133 | 22,908 |
Other investments | ||
Total assets at fair value | 2,816,975 | 3,145,120 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | U.S. Treasury obligations [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 123,892 | 166,512 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | U.S. Government-sponsored enterprise obligations [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 26,334 | 39,563 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | State and municipal bonds [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 940,635 | 1,057,590 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Corporate debt, multiple observable inputs [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 1,274,824 | 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 | 238,387 | 276,056 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Agency commercial mortgage-backed securities [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 10,999 | 15,493 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Other commercial mortgage-backed securities [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 30,134 | 51,063 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Other asset-backed securities [Member] | ||
Assets: | ||
Fixed maturities, available for sale | 97,463 | 111,855 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Financial [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Utilities/Energy [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Consumer oriented [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Industrial [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Fixed Income Funds [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | All other [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 14,209 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Short-term Investments [Member] | ||
Assets: | ||
Short-term investments | 32,965 | 60 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | ||
Assets: | ||
Other investments | 0 | 0 |
Other investments | ||
Total assets at fair value | 15,257 | 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 | 14,500 | 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 | 757 | 4,769 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Financial [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Utilities/Energy [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Consumer oriented [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Industrial [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Fixed Income Funds [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | All other [Member] | ||
Assets: | ||
Equity securities, trading, at fair value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Short-term Investments [Member] | ||
Assets: | ||
Short-term investments | $ 0 | $ 0 |
Fair Value Measurement (Narrati
Fair Value Measurement (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Transfers between Level 1 to Level 2 | $ 0 | $ 0 |
Transfers between Level 2 to Level 1 | $ 0 | $ 0 |
A- Rating [Member] | Corporate debt, limited observable inputs [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Credit rating | 83.00% | 80.00% |
Fair Value Measurement (Quantit
Fair Value Measurement (Quantitative Information Regarding Level 3 Valuations) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Assets: | ||
Total assets at fair value | $ 3,395,111 | $ 3,752,976 |
Fair Value, Inputs, Level 3 [Member] | State and municipal bonds [Member] | ||
Assets: | ||
Total assets at fair value | $ 0 | 5,000 |
Fair Value, Inputs, Level 3 [Member] | State and municipal bonds [Member] | Market Approach Valuation Technique [Member] | Minimum [Member] | ||
Assets: | ||
Comparability Adjustment | 0.00% | |
Fair Value, Inputs, Level 3 [Member] | State and municipal bonds [Member] | Market Approach Valuation Technique [Member] | Maximum [Member] | ||
Assets: | ||
Comparability Adjustment | 10.00% | |
Fair Value, Inputs, Level 3 [Member] | State and municipal bonds [Member] | Market Approach Valuation Technique [Member] | Weighted Average [Member] | ||
Assets: | ||
Comparability Adjustment | 5.00% | |
Fair Value, Inputs, Level 3 [Member] | State and municipal bonds [Member] | Income Approach Valuation Technique [Member] | Minimum [Member] | ||
Assets: | ||
Comparability Adjustment | 0.00% | |
Fair Value, Inputs, Level 3 [Member] | State and municipal bonds [Member] | Income Approach Valuation Technique [Member] | Maximum [Member] | ||
Assets: | ||
Comparability Adjustment | 10.00% | |
Fair Value, Inputs, Level 3 [Member] | State and municipal bonds [Member] | Income Approach Valuation Technique [Member] | Weighted Average [Member] | ||
Assets: | ||
Comparability Adjustment | 5.00% | |
Fair Value, Inputs, Level 3 [Member] | Corporate debt, limited observable inputs [Member] | ||
Assets: | ||
Total assets at fair value | $ 14,500 | 13,100 |
Fair Value, Inputs, Level 3 [Member] | Corporate debt, limited observable inputs [Member] | Market Approach Valuation Technique [Member] | Minimum [Member] | ||
Assets: | ||
Comparability Adjustment | 0.00% | |
Fair Value, Inputs, Level 3 [Member] | Corporate debt, limited observable inputs [Member] | Market Approach Valuation Technique [Member] | Maximum [Member] | ||
Assets: | ||
Comparability Adjustment | 5.00% | |
Fair Value, Inputs, Level 3 [Member] | Corporate debt, limited observable inputs [Member] | Market Approach Valuation Technique [Member] | Weighted Average [Member] | ||
Assets: | ||
Comparability Adjustment | 2.50% | |
Fair Value, Inputs, Level 3 [Member] | Corporate debt, limited observable inputs [Member] | Income Approach Valuation Technique [Member] | Minimum [Member] | ||
Assets: | ||
Comparability Adjustment | 0.00% | |
Fair Value, Inputs, Level 3 [Member] | Corporate debt, limited observable inputs [Member] | Income Approach Valuation Technique [Member] | Maximum [Member] | ||
Assets: | ||
Comparability Adjustment | 5.00% | |
Fair Value, Inputs, Level 3 [Member] | Corporate debt, limited observable inputs [Member] | Income Approach Valuation Technique [Member] | Weighted Average [Member] | ||
Assets: | ||
Comparability Adjustment | 2.50% | |
Fair Value, Inputs, Level 3 [Member] | Asset-backed Securities, Securitized Loans and Receivables [Member] | ||
Assets: | ||
Total assets at fair value | $ 800 | $ 4,800 |
Fair Value, Inputs, Level 3 [Member] | Asset-backed Securities, Securitized Loans and Receivables [Member] | Market Approach Valuation Technique [Member] | Minimum [Member] | ||
Assets: | ||
Comparability Adjustment | 0.00% | |
Fair Value, Inputs, Level 3 [Member] | Asset-backed Securities, Securitized Loans and Receivables [Member] | Market Approach Valuation Technique [Member] | Maximum [Member] | ||
Assets: | ||
Comparability Adjustment | 5.00% | |
Fair Value, Inputs, Level 3 [Member] | Asset-backed Securities, Securitized Loans and Receivables [Member] | Market Approach Valuation Technique [Member] | Weighted Average [Member] | ||
Assets: | ||
Comparability Adjustment | 2.50% | |
Fair Value, Inputs, Level 3 [Member] | Asset-backed Securities, Securitized Loans and Receivables [Member] | Income Approach Valuation Technique [Member] | Minimum [Member] | ||
Assets: | ||
Comparability Adjustment | 0.00% | |
Fair Value, Inputs, Level 3 [Member] | Asset-backed Securities, Securitized Loans and Receivables [Member] | Income Approach Valuation Technique [Member] | Maximum [Member] | ||
Assets: | ||
Comparability Adjustment | 5.00% | |
Fair Value, Inputs, Level 3 [Member] | Asset-backed Securities, Securitized Loans and Receivables [Member] | Income Approach Valuation Technique [Member] | Weighted Average [Member] | ||
Assets: | ||
Comparability Adjustment | 2.50% |
Fair Value Measurement (Level 3
Fair Value Measurement (Level 3 Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation: | ||
Beginning Balance | $ 22,875 | $ 28,328 |
Included in earnings, as a part of: | ||
Included in other comprehensive income | (393) | 719 |
Purchases | 5,196 | 8,201 |
Sales | (5,896) | (3,618) |
Transfers in | 6,640 | 2,424 |
Transfers out | (12,570) | (13,138) |
Ending Balance | 15,257 | 22,875 |
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end | 0 | 0 |
U.S. Government-sponsored enterprise obligations [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation: | ||
Beginning Balance | 0 | 0 |
Included in earnings, as a part of: | ||
Included in other comprehensive income | 0 | 1 |
Purchases | 0 | 1,000 |
Sales | 0 | 0 |
Transfers in | 0 | 0 |
Transfers out | 0 | (1,001) |
Ending Balance | 0 | |
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end | 0 | 0 |
State and municipal bonds [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation: | ||
Beginning Balance | 5,025 | 7,338 |
Included in earnings, as a part of: | ||
Included in other comprehensive income | (459) | (29) |
Purchases | 0 | 1,861 |
Sales | 0 | (1,731) |
Transfers in | 0 | 2,119 |
Transfers out | (4,566) | (4,424) |
Ending Balance | 5,025 | |
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end | 0 | 0 |
Corporate debt [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation: | ||
Beginning Balance | 13,081 | 14,176 |
Included in earnings, as a part of: | ||
Included in other comprehensive income | 73 | 688 |
Purchases | 1,996 | 2,000 |
Sales | (1,896) | (1,826) |
Transfers in | 6,640 | 0 |
Transfers out | (5,049) | (2,025) |
Ending Balance | 14,500 | 13,081 |
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end | 0 | 0 |
Asset-backed securities [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation: | ||
Beginning Balance | 4,769 | 6,814 |
Included in earnings, as a part of: | ||
Included in other comprehensive income | (7) | 59 |
Purchases | 1,500 | 3,340 |
Sales | (4,000) | (61) |
Transfers in | 0 | 305 |
Transfers out | (1,494) | (5,688) |
Ending Balance | 757 | 4,769 |
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end | 0 | 0 |
Equity Securities and Other [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation: | ||
Beginning Balance | 0 | 0 |
Included in earnings, as a part of: | ||
Included in other comprehensive income | 0 | 0 |
Purchases | 1,700 | 0 |
Sales | 0 | 0 |
Transfers in | 0 | 0 |
Transfers out | (1,461) | 0 |
Ending Balance | 0 | |
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end | 0 | 0 |
Net investment income [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | 18 | 51 |
Net investment income [Member] | U.S. Government-sponsored enterprise obligations [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | 0 | 0 |
Net investment income [Member] | State and municipal bonds [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | 0 | (14) |
Net investment income [Member] | Corporate debt [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | 18 | 65 |
Net investment income [Member] | Asset-backed securities [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | 0 | 0 |
Net investment income [Member] | Equity Securities and Other [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | 0 | 0 |
Equity in earnings of unconsolidated subsidiaries [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | (83) | 0 |
Equity in earnings of unconsolidated subsidiaries [Member] | U.S. Government-sponsored enterprise obligations [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | 0 | 0 |
Equity in earnings of unconsolidated subsidiaries [Member] | State and municipal bonds [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | 0 | 0 |
Equity in earnings of unconsolidated subsidiaries [Member] | Corporate debt [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | 0 | 0 |
Equity in earnings of unconsolidated subsidiaries [Member] | Asset-backed securities [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | 0 | 0 |
Equity in earnings of unconsolidated subsidiaries [Member] | Equity Securities and Other [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | (83) | 0 |
Net realized investment gains (losses) [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | (530) | (92) |
Net realized investment gains (losses) [Member] | U.S. Government-sponsored enterprise obligations [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | 0 | 0 |
Net realized investment gains (losses) [Member] | State and municipal bonds [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | 0 | (95) |
Net realized investment gains (losses) [Member] | Corporate debt [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | (363) | 3 |
Net realized investment gains (losses) [Member] | Asset-backed securities [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | (11) | 0 |
Net realized investment gains (losses) [Member] | Equity Securities and Other [Member] | ||
Included in earnings, as a part of: | ||
Net investment income | $ (156) | $ 0 |
Fair Value Measurement (Investm
Fair Value Measurement (Investments in LLCs and Limited Partnerships) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Investments in private funds [Abstract] | ||
Investments in limited liability companies and limited partnerships fair value | $ 162,624 | $ 133,250 |
Private debt funds [Member] | ||
Investments in private funds [Abstract] | ||
Investments in limited liability companies and limited partnerships unfunded commitments | 14,267 | |
Investments in limited liability companies and limited partnerships fair value | 50,268 | 37,296 |
Long equity fund [Member] | ||
Investments in private funds [Abstract] | ||
Investments in limited liability companies and limited partnerships unfunded commitments | 0 | |
Investments in limited liability companies and limited partnerships fair value | 6,407 | 6,747 |
Long/Short equity funds [Member] | ||
Investments in private funds [Abstract] | ||
Investments in limited liability companies and limited partnerships unfunded commitments | 0 | |
Investments in limited liability companies and limited partnerships fair value | 28,030 | 25,301 |
Non-public equity funds [Member] | ||
Investments in private funds [Abstract] | ||
Investments in limited liability companies and limited partnerships unfunded commitments | 48,381 | |
Investments in limited liability companies and limited partnerships fair value | 65,722 | 51,811 |
Multi-strategy fund of funds [Member] | ||
Investments in private funds [Abstract] | ||
Investments in limited liability companies and limited partnerships unfunded commitments | 0 | |
Investments in limited liability companies and limited partnerships fair value | 8,252 | 8,271 |
Structured credit fund [Member] | ||
Investments in private funds [Abstract] | ||
Investments in limited liability companies and limited partnerships unfunded commitments | 0 | |
Investments in limited liability companies and limited partnerships fair value | $ 3,945 | $ 3,824 |
Fair Value Measurement (Inves54
Fair Value Measurement (Investments in LLCs and Limited Partnerships Footnote) (Details) | 12 Months Ended |
Dec. 31, 2015fund | |
Private debt funds [Member] | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |
Number of unrelated LPs funds | 2 |
Number of LPs to allow redemption by special consent | 1 |
Private debt funds [Member] | Minimum [Member] | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |
Anticipated time frame for distribution at the discretion of the LP | 3 years |
Private debt funds [Member] | Maximum [Member] | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |
Anticipated time frame for distribution at the discretion of the LP | 8 years |
Long equity fund [Member] | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |
Entities that calculate net asset value notice period | 15 days |
Long equity fund [Member] | Maximum [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 |
Long/Short equity funds [Member] | Minimum [Member] | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |
Entities that calculate net asset value notice period | 30 days |
Redemption Percentage of LP at NAV for which initial payment is limited | 90.00% |
Long/Short equity funds [Member] | Maximum [Member] | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |
Entities that calculate net asset value notice period | 90 days |
Payment period for redemption of LP valued at NAV | 30 days |
Non-public equity funds [Member] | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |
Number of unrelated LPs funds | 3 |
Anticipated time frame for distribution at the discretion of the LP | 9 years |
Structured credit fund [Member] | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |
Entities that calculate net asset value notice period | 90 days |
Fair Value Measurement (Methodo
Fair Value Measurement (Methodologies Other Than Fair Value) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Financial assets: | ||
BOLI | $ 57,213 | $ 56,381 |
Other investments | 79,133 | 86,057 |
Other assets | 106,108 | 93,263 |
Financial liabilities: | ||
Debt | 350,000 | 250,000 |
Other liabilities | 202,303 | 320,853 |
Not Measured At Fair Value [Member] | Carrying Value [Member] | ||
Financial assets: | ||
BOLI | 57,213 | 56,381 |
Other investments | 48,522 | 57,099 |
Other assets | 24,215 | 22,440 |
Financial liabilities: | ||
Other liabilities | 14,897 | 14,656 |
Not Measured At Fair Value [Member] | Carrying Value [Member] | Senior notes due 2023 [Member] | ||
Financial liabilities: | ||
Debt | 250,000 | 250,000 |
Not Measured At Fair Value [Member] | Carrying Value [Member] | Revolving Credit Facility [Member] | ||
Financial liabilities: | ||
Debt | 100,000 | 0 |
Not Measured At Fair Value [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value [Member] | ||
Financial assets: | ||
BOLI | 57,213 | 56,381 |
Other investments | 51,646 | 57,994 |
Other assets | 24,193 | 22,399 |
Financial liabilities: | ||
Other liabilities | 14,893 | 14,645 |
Not Measured At Fair Value [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value [Member] | Senior notes due 2023 [Member] | ||
Financial liabilities: | ||
Debt | 261,308 | 276,503 |
Not Measured At Fair Value [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value [Member] | Revolving Credit Facility [Member] | ||
Financial liabilities: | ||
Debt | $ 100,000 | $ 0 |
Investments (Available-For-Sale
Investments (Available-For-Sale Securities) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
U.S. Treasury obligations [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | $ 122,855 | $ 163,714 |
Gross Unrealized Gains | 1,696 | 3,785 |
Gross Unrealized Losses | 659 | 987 |
Estimated Fair Value | 123,892 | 166,512 |
U.S. Government-sponsored enterprise obligations [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 25,456 | 38,022 |
Gross Unrealized Gains | 927 | 1,641 |
Gross Unrealized Losses | 49 | 100 |
Estimated Fair Value | 26,334 | 39,563 |
State and municipal bonds [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 904,719 | 1,015,555 |
Gross Unrealized Gains | 36,739 | 47,395 |
Gross Unrealized Losses | 823 | 335 |
Estimated Fair Value | 940,635 | 1,062,615 |
Corporate debt [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 1,296,128 | 1,389,970 |
Gross Unrealized Gains | 24,720 | 44,234 |
Gross Unrealized Losses | 29,162 | 17,103 |
Estimated Fair Value | 1,291,686 | 1,417,101 |
Residential mortgage-backed securities [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 233,659 | 266,306 |
Gross Unrealized Gains | 6,039 | 10,198 |
Gross Unrealized Losses | 1,311 | 448 |
Estimated Fair Value | 238,387 | 276,056 |
Agency commercial mortgage-backed securities [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 10,851 | 15,344 |
Gross Unrealized Gains | 174 | 208 |
Gross Unrealized Losses | 26 | 59 |
Estimated Fair Value | 10,999 | 15,493 |
Other commercial mortgage-backed securities [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 29,983 | 50,025 |
Gross Unrealized Gains | 354 | 1,137 |
Gross Unrealized Losses | 203 | 99 |
Estimated Fair Value | 30,134 | 51,063 |
Other asset-backed securities [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 98,412 | 116,541 |
Gross Unrealized Gains | 54 | 288 |
Gross Unrealized Losses | 246 | 205 |
Estimated Fair Value | 98,220 | 116,624 |
Debt Securities [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 2,722,063 | 3,055,477 |
Gross Unrealized Gains | 70,703 | 108,886 |
Gross Unrealized Losses | 32,479 | 19,336 |
Estimated Fair Value | $ 2,760,287 | $ 3,145,027 |
Investments (Available For Sale
Investments (Available For Sale Securities by Contractual Maturity) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
U.S. Treasury obligations [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | $ 122,855 | $ 163,714 |
Due in one year or less | 10,703 | |
Due after one year through five years | 94,067 | |
Due after five years through ten years | 15,923 | |
Due after ten years | 3,199 | |
Total Fair Value | 123,892 | 166,512 |
U.S. Government-sponsored enterprise obligations [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 25,456 | 38,022 |
Due in one year or less | 2,290 | |
Due after one year through five years | 16,593 | |
Due after five years through ten years | 7,312 | |
Due after ten years | 139 | |
Total Fair Value | 26,334 | 39,563 |
State and municipal bonds [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 904,719 | 1,015,555 |
Due in one year or less | 48,752 | |
Due after one year through five years | 332,489 | |
Due after five years through ten years | 428,872 | |
Due after ten years | 130,522 | |
Total Fair Value | 940,635 | 1,062,615 |
Corporate debt [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 1,296,128 | 1,389,970 |
Due in one year or less | 104,746 | |
Due after one year through five years | 698,148 | |
Due after five years through ten years | 455,849 | |
Due after ten years | 32,943 | |
Total Fair Value | 1,291,686 | 1,417,101 |
Residential mortgage-backed securities [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 233,659 | 266,306 |
Total Fair Value | 238,387 | 276,056 |
Agency commercial mortgage-backed securities [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 10,851 | 15,344 |
Total Fair Value | 10,999 | 15,493 |
Other commercial mortgage-backed securities [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 29,983 | 50,025 |
Total Fair Value | 30,134 | 51,063 |
Other asset-backed securities [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 98,412 | 116,541 |
Total Fair Value | 98,220 | 116,624 |
Debt Securities [Member] | ||
Fixed maturities, available for sale | ||
Amortized Cost | 2,722,063 | 3,055,477 |
Total Fair Value | $ 2,760,287 | $ 3,145,027 |
Investments (Narrative) (Detail
Investments (Narrative) (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015USD ($)Affiliateinvestment_interestIssuerSecurity | Dec. 31, 2014USD ($)IssuerSecurity | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | |
Schedule of Available-for-sale Securities [Line Items] | ||||
Number of investment affiliates exceeding shareholder's equity ten percent threshold limit | Affiliate | 0 | |||
Threshold limit of investments based on shareholders' equity | 10.00% | |||
Securities on deposit with state insurance departments | $ 48,800 | |||
Business owned life insurance cost | 33,000 | |||
Investment in unconsolidated subsidiaries | 311,908 | $ 276,501 | ||
Investments in limited liability companies and limited partnerships fair value | 162,624 | 133,250 | ||
Estimated fair value of interest | 19,400 | 10,100 | ||
Equity in earnings (loss) from unconsolidated subsidiaries | 10,100 | 10,700 | $ 10,100 | |
Tax credits related to qualified affordable housing investments | 18,400 | 17,900 | 17,900 | |
Effect of conversion to equity method, total | 10,500 | |||
Effect of conversion to equity method, prior years | 8,400 | |||
Net impairments recognized in earnings | 15,345 | 1,207 | 71 | |
Credit-related OTTI | 5,751 | $ 232 | $ 83 | $ 3,301 |
OTTI cost-method investment | $ 8,100 | |||
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 | |||
Investment in unconsolidated subsidiaries | $ 53,400 | |||
Tax Credit Partnerships Less Than 20% Ownership [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Investment in unconsolidated subsidiaries | $ 68,100 | |||
Other Limited Partnerships and Limited Liability Company, Greater Than 25% Ownership [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Percentage ownership (greater than) | 25.00% | |||
Investment in unconsolidated subsidiaries | $ 8,300 | |||
Other Limited Partnerships and Limited Liability Company Less than 25% Ownership [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Percentage ownership (greater than) | 25.00% | |||
Investment in unconsolidated subsidiaries | $ 173,700 | |||
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 (greater than) | 100.00% | |||
Maximum [Member] | Tax Credit Partnerships Less Than 20% Ownership [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Percentage ownership (greater than) | 20.00% | |||
Debt Securities [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
FAL Deposit assets | $ 95,400 | |||
Short-term Investments [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
FAL Deposit assets | $ 400 | |||
Non Government-Backed [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Number of debt securities in unrealized loss position | Security | 773 | 588 | ||
Debt securities in unrealized loss position as percentage of total debt securities held | 28.80% | 20.50% | ||
Number of issuers in unrealized loss position | Issuer | 506 | 434 | ||
Single greatest unrealized loss position | $ 1,400 | $ 1,700 | ||
Second greatest unrealized loss position | 1,300 | $ 700 | ||
Corporate Bonds [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Net impairments recognized in earnings | 7,200 | |||
Credit-related OTTI | $ 4,900 | |||
Debt Securities, Number of Issuers | Issuer | 6 | |||
Non-credit impairment | $ 3,700 | |||
Revolving Credit Facility [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Available-for-sale securities pledged as collateral | $ 125,600 |
Investments (Other Investments)
Investments (Other Investments) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Other Investments | ||
Other investments | $ 79,133 | $ 86,057 |
Investments in LPs/LLCs, at cost [Member] | ||
Other Investments | ||
Other investments | 44,958 | 53,258 |
Convertible Debt Securities [Member] | ||
Other Investments | ||
Other investments | 30,611 | 28,958 |
FHLB And Other Investments [Member] | ||
Other Investments | ||
Other investments | $ 3,564 | $ 3,841 |
Investments (Unconsolidated Sub
Investments (Unconsolidated Subsidiaries) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Unconsolidated Subsidiaries | ||
Carrying Value | $ 311,908 | $ 276,501 |
Qualified affordable housing tax credit partnerships [Member] | ||
Unconsolidated Subsidiaries | ||
Carrying Value | 121,550 | 133,143 |
Other tax credit partnerships [Member] | ||
Unconsolidated Subsidiaries | ||
Carrying Value | 8,362 | 0 |
All other LPs/LLCs [Member] | ||
Unconsolidated Subsidiaries | ||
Carrying Value | $ 181,996 | $ 143,358 |
Investments (Investments Held i
Investments (Investments Held in a Loss Position) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Investments in LPs/LLCs [Member] | ||
Investments held in an unrealized loss position | ||
Fair Value | $ 23,683 | |
Unrealized Loss | 3,948 | |
Less than 12 months, Fair Value | 22,265 | |
Less than 12 months, Unrealized loss | 3,711 | |
12 months or longer, Fair Value | 1,418 | |
12 months or longer, Unrealized loss | 237 | |
U.S. Treasury obligations [Member] | ||
Investments held in an unrealized loss position | ||
Fair Value | $ 66,685 | 61,209 |
Unrealized Loss | 658 | 987 |
Less than 12 months, Fair Value | 61,869 | 46,869 |
Less than 12 months, Unrealized loss | 591 | 617 |
12 months or longer, Fair Value | 4,816 | 14,340 |
12 months or longer, Unrealized loss | 67 | 370 |
U.S. Government-sponsored enterprise obligations [Member] | ||
Investments held in an unrealized loss position | ||
Fair Value | 6,819 | 6,268 |
Unrealized Loss | 49 | 100 |
Less than 12 months, Fair Value | 6,819 | 2,775 |
Less than 12 months, Unrealized loss | 49 | 44 |
12 months or longer, Fair Value | 0 | 3,493 |
12 months or longer, Unrealized loss | 0 | 56 |
State and municipal bonds [Member] | ||
Investments held in an unrealized loss position | ||
Fair Value | 46,193 | 39,831 |
Unrealized Loss | 823 | 335 |
Less than 12 months, Fair Value | 36,822 | 18,910 |
Less than 12 months, Unrealized loss | 703 | 84 |
12 months or longer, Fair Value | 9,371 | 20,921 |
12 months or longer, Unrealized loss | 120 | 251 |
Corporate debt [Member] | ||
Investments held in an unrealized loss position | ||
Fair Value | 622,991 | 423,107 |
Unrealized Loss | 29,162 | 17,103 |
Less than 12 months, Fair Value | 555,097 | 326,804 |
Less than 12 months, Unrealized loss | 15,691 | 13,236 |
12 months or longer, Fair Value | 67,894 | 96,303 |
12 months or longer, Unrealized loss | 13,471 | 3,867 |
Residential mortgage-backed securities [Member] | ||
Investments held in an unrealized loss position | ||
Fair Value | 87,567 | 45,006 |
Unrealized Loss | 1,311 | 448 |
Less than 12 months, Fair Value | 78,961 | 14,406 |
Less than 12 months, Unrealized loss | 1,095 | 31 |
12 months or longer, Fair Value | 8,606 | 30,600 |
12 months or longer, Unrealized loss | 216 | 417 |
Agency commercial mortgage-backed securities [Member] | ||
Investments held in an unrealized loss position | ||
Fair Value | 409 | 4,783 |
Unrealized Loss | 26 | 59 |
Less than 12 months, Fair Value | 0 | 70 |
Less than 12 months, Unrealized loss | 0 | 0 |
12 months or longer, Fair Value | 409 | 4,713 |
12 months or longer, Unrealized loss | 26 | 59 |
Other commercial mortgage-backed securities [Member] | ||
Investments held in an unrealized loss position | ||
Fair Value | 15,960 | 13,860 |
Unrealized Loss | 203 | 99 |
Less than 12 months, Fair Value | 12,635 | 7,005 |
Less than 12 months, Unrealized loss | 170 | 28 |
12 months or longer, Fair Value | 3,325 | 6,855 |
12 months or longer, Unrealized loss | 33 | 71 |
Other asset-backed securities [Member] | ||
Investments held in an unrealized loss position | ||
Fair Value | 79,637 | 62,577 |
Unrealized Loss | 247 | 205 |
Less than 12 months, Fair Value | 74,150 | 59,176 |
Less than 12 months, Unrealized loss | 237 | 109 |
12 months or longer, Fair Value | 5,487 | 3,401 |
12 months or longer, Unrealized loss | 10 | 96 |
Debt Securities [Member] | ||
Investments held in an unrealized loss position | ||
Fair Value | 926,261 | 656,641 |
Unrealized Loss | 32,479 | 19,336 |
Less than 12 months, Fair Value | 826,353 | 476,015 |
Less than 12 months, Unrealized loss | 18,536 | 14,149 |
12 months or longer, Fair Value | 99,908 | 180,626 |
12 months or longer, Unrealized loss | $ 13,943 | $ 5,187 |
Investments (Net Investment Inc
Investments (Net Investment Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net Investment Income | |||
Investment fees and expenses | $ (6,107) | $ (7,994) | $ (6,798) |
Net investment income | 108,660 | 125,557 | 129,265 |
Debt Securities [Member] | |||
Net Investment Income | |||
Interest and dividend income | 97,348 | 111,895 | 122,065 |
Equities [Member] | |||
Net Investment Income | |||
Interest and dividend income | 13,317 | 10,817 | 9,454 |
Short-term Investments and Other Invested [Member] | |||
Net Investment Income | |||
Interest and dividend income | 2,049 | 8,833 | 2,584 |
Business owned life insurance [Member] | |||
Net Investment Income | |||
Interest and dividend income | $ 2,053 | $ 2,006 | $ 1,960 |
Investments (Net Realized Inves
Investments (Net Realized Investment Gains (Losses)) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Total other-than-temporary impairment losses: | |||
Other-than-temporary impairment (OTTI) losses | $ (19,917) | $ (1,475) | $ (71) |
Portion of OTTI losses recognized in other comprehensive income before taxes | 4,572 | 268 | 0 |
Net impairments recognized in earnings | (15,345) | (1,207) | (71) |
Gross realized gains, available-for-sale securities | 11,936 | 5,627 | 18,130 |
Gross realized (losses), available-for-sale securities | (11,481) | (1,103) | (7,031) |
Net realized gains (losses), trading securities | 1,080 | 28,018 | 20,444 |
Net realized gains (losses), Other investments | 464 | 326 | 0 |
Change in unrealized holding gains (losses), trading securities | (28,343) | (18,883) | 35,507 |
Change in unrealized holding gains (losses), convertible securities, carried at fair value | (896) | 1,876 | 0 |
Other | 946 | 0 | 925 |
Total net realized investment gains (losses) | (41,639) | 14,654 | 67,904 |
State and municipal bonds [Member] | |||
Total other-than-temporary impairment losses: | |||
Other-than-temporary impairment (OTTI) losses | 0 | (50) | (71) |
Corporate debt [Member] | |||
Total other-than-temporary impairment losses: | |||
Other-than-temporary impairment (OTTI) losses | (11,781) | (1,425) | 0 |
Other Investments [Member] | |||
Total other-than-temporary impairment losses: | |||
Other-than-temporary impairment (OTTI) losses | $ (8,136) | $ 0 | $ 0 |
Investments (Credit Losses Reco
Investments (Credit Losses Recorded in Earnings) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cumulative credit losses recorded in earnings related to impaired debt securities | |||
Accumulated credit losses related to impaired debt securities, Beginning Balance | $ 232 | $ 83 | $ 3,301 |
No OTTI has been previously recognized | 3,648 | 149 | 0 |
OTTI has been previously recognized | 2,645 | 0 | 0 |
Securities sold during the period (realized) | (774) | 0 | (3,218) |
Accumulated credit losses related to impaired debt securities, Ending Balance | $ 5,751 | $ 232 | $ 83 |
(Sales and Purchases of Availab
(Sales and Purchases of Available-for-Sale Securities) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Information regarding sales and purchases of available-for-sale securities | |||
Proceeds from sales (exclusive of maturities and paydowns) | $ 481,800 | $ 244,900 | $ 593,300 |
Purchases | $ 580,577 | $ 645,114 | $ 519,161 |
Reinsurance (Premiums Written a
Reinsurance (Premiums Written and Earned) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Summary of the effect of reinsurance on premiums written and earned | |||
Direct premiums written | $ 780,982 | $ 761,043 | $ 566,745 |
Direct premiums earned | 772,968 | 755,623 | 568,629 |
Assumed premiums written | 31,236 | 18,566 | 802 |
Assumed premiums earned | 22,691 | 12,987 | 804 |
Ceded premiums written | (102,933) | (77,760) | (42,365) |
Ceded premium earned | (101,510) | (68,879) | (41,514) |
Net premiums written | 709,285 | 701,849 | 525,182 |
Net premiums earned | $ 694,149 | $ 699,731 | $ 527,919 |
Reinsurance (Narrative) (Detail
Reinsurance (Narrative) (Details) | 12 Months Ended | ||
Dec. 31, 2015USD ($)reinsurer | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Ceded Credit Risk [Line Items] | |||
Premium ceded reduction amount | $ 1,100,000 | $ 15,700,000 | $ 16,400,000 |
Amount due from reinsurers total | $ 262,500,000 | ||
Number of major reinsurers | reinsurer | 0 | ||
Allowance for reinsurance receivables | $ 0 | 0 | |
Loss on uncollectible accounts in the period | 0 | $ 0 | $ 0 |
Ceded Credit Risk, Secured [Member] | |||
Ceded Credit Risk [Line Items] | |||
Amount of reinsurance recoverables collateralized by letters of credit | 47,000,000 | ||
Minimum [Member] | |||
Ceded Credit Risk [Line Items] | |||
Major reinsurer threshold | $ 25,000,000 |
Income Taxes (Deferred Tax Asse
Income Taxes (Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets | ||
Unpaid loss discount | $ 44,886 | $ 44,002 |
Unearned premium adjustment | 22,889 | 23,972 |
Compensation related | 18,130 | 18,623 |
Intangibles | 1,435 | 1,957 |
Total deferred tax assets | 87,340 | 88,554 |
Deferred tax liabilities | ||
Deferred acquisition costs | 9,287 | 9,180 |
Unrealized gains on investments, net | 13,933 | 31,342 |
Fixed assets | 3,401 | 3,689 |
Basis differentials–investments | 17,492 | 31,657 |
Intangibles | 24,644 | 27,294 |
Other | 3,486 | 4,210 |
Total deferred tax liabilities | 72,243 | 107,372 |
Net deferred tax assets | 15,097 | |
Net deferred tax liabilities | $ 0 | $ (18,818) |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
Net operating loss carryforwards | $ 0 | ||
Capital loss carryforwards | 0 | ||
Alternative minimum tax credit carryforwards | 0 | ||
Income taxes receivable | 16,400,000 | $ 1,100,000 | |
Unrecognized tax benefits that would impact effective tax rate | $ 900,000 | $ 900,000 | |
Percentage of income before income taxes included in expected income tax expense | 35.00% | 35.00% | 35.00% |
Income Taxes (Unrecognized Tax
Income Taxes (Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Reconciliation of unrecognized tax benefits | |||
Balance at January 1 | $ 577 | $ 4,823 | $ 4,823 |
Increase for tax position acquired as result of a business combination | 0 | 414 | 0 |
Increases for tax positions taken during the current year | 7,618 | 163 | 0 |
(Decreases) for tax positions taken during the current year | 0 | (4,823) | 0 |
Balance at December 31 | $ 8,195 | $ 577 | $ 4,823 |
Income Taxes (Income Tax Expens
Income Taxes (Income Tax Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Reconciliation of expected income tax expense to actual income tax expense | |||
Computed “expected” tax expense | $ 45,099 | $ 91,702 | $ 139,005 |
Tax-exempt income | (12,913) | (13,250) | (14,509) |
Tax credits | (22,407) | (17,918) | (17,888) |
Non-taxable gain on acquisition | 0 | 0 | (11,310) |
Non-U.S. Loss | 1,806 | 1,741 | 0 |
Other | 1,073 | 3,165 | 4,338 |
Total income tax expense (benefit) | $ 12,658 | $ 65,440 | $ 99,636 |
Deferred Policy Acquisition C72
Deferred Policy Acquisition Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Insurance [Abstract] | |||
Amortization of deferred policy acquisition costs | $ 79.6 | $ 82.4 | $ 53.2 |
Reserve for Losses and Loss A73
Reserve for Losses and Loss Adjustment Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Liability for Unpaid Claims and Claims Adjustment Expense, Period Increase (Decrease) [Abstract] | ||||||||||||
Minimum period for claims resolution | 5 years | |||||||||||
Summary of reserve for losses and loss adjustment expenses | ||||||||||||
Balance, beginning of year | $ 2,058,266 | $ 2,072,822 | $ 2,058,266 | $ 2,072,822 | $ 2,054,994 | |||||||
Receivable from reinsurers on unpaid losses and loss adjustment expenses | $ 249,350 | $ 237,966 | 249,350 | 237,966 | 247,518 | $ 191,645 | ||||||
Net balance, beginning of year | 1,820,300 | 1,825,304 | 1,820,300 | 1,825,304 | 1,863,349 | |||||||
Net reserves acquired from acquisitions | 0 | 139,549 | 126,007 | |||||||||
Net losses: | ||||||||||||
Current year | 149,157 | $ 145,027 | $ 139,057 | 138,654 | 124,271 | $ 142,124 | $ 141,126 | 137,647 | 571,891 | 545,168 | 447,510 | |
Favorable development of reserves established in prior years, net | (56,330) | $ (36,221) | $ (35,115) | $ (33,514) | (48,830) | $ (42,902) | $ (42,213) | $ (48,139) | (161,180) | (182,084) | (222,749) | |
Total | 410,711 | 363,084 | 224,761 | |||||||||
Paid related to: | ||||||||||||
Current year | (84,186) | (93,737) | (43,616) | |||||||||
Prior years | (390,849) | (413,900) | (345,197) | |||||||||
Total paid | (475,035) | (507,637) | (388,813) | |||||||||
Net balance, end of year | 1,755,976 | 1,820,300 | 1,755,976 | 1,820,300 | 1,825,304 | |||||||
Balance, end of year | $ 2,005,326 | $ 2,058,266 | $ 2,005,326 | $ 2,058,266 | $ 2,072,822 | |||||||
Liability for unpaid claims and claims adjustment expense incurred claims prior years accident years | 2008 through 2012 | 2007 through 2011 | 2005 through 2011 |
Commitments and Contingencies74
Commitments and Contingencies (Narrative) (Details) $ in Millions | 12 Months Ended | |||
Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2015GBP (£) | |
Other Commitment, Fiscal Year Maturity | ||||
Rent expense | $ 5.1 | $ 5 | $ 3.2 | |
Lloyds Syndicate [Member] | ||||
Other Commitment, Fiscal Year Maturity | ||||
FAL Deposit assets | $ 95.8 | |||
Line of credit extended to Lloyd's Syndicate, lending capacity | £ | £ 10,000,000 | |||
Line of credit extended to Lloyd's Syndicate, interest rate | 8.50% | 8.50% | ||
Unused commitments | $ 1.2 | £ 800,000 | ||
Non-Public Equity Funds [Member] | ||||
Other Commitment, Fiscal Year Maturity | ||||
Other commitment | 110 | |||
Other commitment, due in 2016 | 78 | |||
Other commitment, due in 2017 and 2018 | 31.1 | |||
Other commitment, due in 2019 and 2010 | 0.3 | |||
Other commitment, due thereafter | 0.6 | |||
Qualified Affordable Housing Project [Member] | ||||
Other Commitment, Fiscal Year Maturity | ||||
Other commitment, due in 2016 | 0.3 | |||
Other commitment, due in 2017 and 2018 | 0.4 | |||
Other commitment, due in 2019 and 2010 | 0.3 | |||
Other commitment, due thereafter | 0.6 | |||
Qualified affordable housing project investments | $ 1.6 |
Commitments and Contingencies75
Commitments and Contingencies (Operating Leases) (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Schedule of future minimum lease payments for operating leases | |
2,016 | $ 5,010 |
2,017 | 3,669 |
2,018 | 2,997 |
2,019 | 2,567 |
2,020 | 1,784 |
Thereafter | 3,442 |
Total minimum lease payments | $ 19,469 |
Debt (Details)
Debt (Details) | 12 Months Ended | |
Dec. 31, 2015USD ($)lender | Dec. 31, 2014USD ($) | |
Debt Instrument [Line Items] | ||
Number of participating lenders | lender | 5 | |
Debt | $ 350,000,000 | $ 250,000,000 |
Senior notes due 2023 [Member] | Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Debt | $ 250,000,000 | 250,000,000 |
Interest rate | 5.30% | |
Revolving credit agreement [Member] | Line of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Debt | $ 100,000,000 | $ 0 |
Interest rate | 0.82% | |
Current Revolving credit capacity | $ 250,000,000 | |
Additional borrowing capacity | $ 50,000,000 | |
Maximum allowable consolidated funded indebtedness ratio | 0.35 | |
Minimum net worth required | $ 1,300,000,000 | |
Revolving credit agreement [Member] | Line of Credit [Member] | Base Rate [Member] | ||
Debt Instrument [Line Items] | ||
Description of variable rate basis | base rate | |
Revolving credit agreement [Member] | Line of Credit [Member] | Prime Rate [Member] | ||
Debt Instrument [Line Items] | ||
Description of variable rate basis | Prime rate | |
Revolving credit agreement [Member] | Line of Credit [Member] | Federal Funds Rate [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 0.50% | |
Description of variable rate basis | Federal Funds | |
Revolving credit agreement [Member] | Line of Credit [Member] | One Month LIBOR [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.00% | |
Description of variable rate basis | one month LIBOR | |
Revolving credit agreement [Member] | Line of Credit [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Commitment fee percentages | 0.125% | |
Basis spread on variable rate | 0.00% | |
Revolving credit agreement [Member] | Line of Credit [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Commitment fee percentages | 0.25% | |
Basis spread on variable rate | 1.63% |
Shareholders' Equity (Changes i
Shareholders' Equity (Changes in Common Shares) (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Common Stock Outstanding Rollforward [Roll Forward] | |||
Beginning Balance | 56,534 | 61,197 | 61,624 |
Repurchase of shares | (3,680) | (4,909) | (681) |
Shares issued due to exercise of options and vesting of share-based compensation awards | 150 | 154 | 169 |
Other shares issued for compensation and shares reissued to stock purchase plan | 97 | 92 | 85 |
Ending Balance | 53,101 | 56,534 | 61,197 |
Shareholders' Equity (Narrative
Shareholders' Equity (Narrative) (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015USD ($)planshares | Dec. 31, 2014USD ($)shares | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common shares authorized (in shares) | shares | 100,000,000 | 100,000,000 | ||
Authorized preferred stock (in shares) | shares | 50,000,000 | 50,000,000 | ||
Authorization common shares for the issuance under incentive compensation plans (in shares) | shares | 2,400,000 | |||
Number of shares available for grant (in shares) | shares | 700,000 | |||
Dividends declared | $ 119,900 | $ 220,500 | $ 64,800 | |
Equity attributable to parent | 1,958,354 | 2,157,944 | $ 2,394,414 | $ 2,270,580 |
Total authorizations which remain available for use (in shares) | 111,700 | |||
Increase in amount authorized to repurchase shares | 100,000 | |||
Losses related to unrecognized changes in defined benefit plan liabilities | $ (1,000) | |||
Number of defined benefit plans assumed in acquisition | plan | 2 | |||
Impairment losses in accumulated other comprehensive income | $ 2,000 | $ 500 | ||
AOCI losses unrecognized changes in defined benefit plan liabilities, net | $ (1,000) | |||
Percentage of income before income taxes included in expected income tax expense | 35.00% | 35.00% | 35.00% | |
Retained Earnings, Unappropriated [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity attributable to parent | $ 592,000 |
Shareholders' Equity (Cash Divi
Shareholders' Equity (Cash Dividends Declared) (Details) - $ / shares | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Class of Stock [Line Items] | |||||||||||||||
Cash dividends declared per common share (USD per share) | $ 1.31 | $ 0.31 | $ 0.31 | $ 0.31 | $ 2.96 | $ 0.30 | $ 0.30 | $ 0.3 | $ 0.3 | $ 0.25 | $ 0.25 | $ 0.25 | $ 2.24 | $ 3.86 | $ 1.05 |
Dividends Declared, Special [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Cash dividends declared per common share (USD per share) | $ 1 | $ 2.65 |
Shareholders' Equity (Reclassif
Shareholders' Equity (Reclassifications from AOCI to Net Income)(Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Reclassification adjustments related to available-for-sale securities | |||||||||||
Tax effect (at 35%) | $ (12,658) | $ (65,440) | $ (99,636) | ||||||||
Net income | $ 34,948 | $ 10,276 | $ 33,158 | $ 37,814 | $ 65,114 | $ 34,778 | $ 49,942 | $ 46,731 | 116,197 | 196,565 | 297,523 |
Deferred tax expense (benefit) included in OCI | (18,370) | (785) | (46,157) | ||||||||
Reclassifications from accumulated other comprehensive income to net income, available for sale securities [Member] | |||||||||||
Reclassification adjustments related to available-for-sale securities | |||||||||||
Tax effect (at 35%) | 2,364 | (1,161) | (3,981) | ||||||||
Net income | (4,390) | 2,156 | 7,394 | ||||||||
Reclassifications from accumulated other comprehensive income to net income, available for sale securities [Member] | Realized investment gains (losses) [Member] | |||||||||||
Reclassification adjustments related to available-for-sale securities | |||||||||||
Reclassifications from AOCI to net income, available-for-sale securities | (4,475) | 3,317 | 11,722 | ||||||||
Reclassifications from accumulated other comprehensive income to net income, available for sale securities [Member] | Non-credit impairment losses reclassified to earnings, due to sale of securities or reclassification as a credit loss [Member] | |||||||||||
Reclassification adjustments related to available-for-sale securities | |||||||||||
Reclassifications from AOCI to net income, available-for-sale securities | $ (2,279) | $ 0 | $ (347) |
Share-Based Payments (Compensat
Share-Based Payments (Compensation Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Summary of compensation expense and related tax benefit recognized during each period and compensation cost expense in future periods | |||
Share-based compensation expense | $ 9,166 | $ 10,056 | $ 9,242 |
Tax benefit recognized | 3,200 | 3,500 | 3,200 |
Unrecognized Compensation Cost, amount | 11,000 | ||
Restricted Stock Units (RSUs) [Member] | |||
Summary of compensation expense and related tax benefit recognized during each period and compensation cost expense in future periods | |||
Share-based compensation expense | 2,500 | 1,700 | 1,600 |
Unrecognized Compensation Cost, amount | $ 3,200 | ||
Unrecognized Compensation Cost, remaining recognition period | 1 year 9 months 18 days | ||
Performance Shares Units [Member] | |||
Summary of compensation expense and related tax benefit recognized during each period and compensation cost expense in future periods | |||
Share-based compensation expense | $ 5,900 | 7,600 | 7,100 |
Unrecognized Compensation Cost, amount | $ 6,000 | ||
Unrecognized Compensation Cost, remaining recognition period | 1 year 7 months 12 days | ||
Employee Purchase Plan [Member] | |||
Summary of compensation expense and related tax benefit recognized during each period and compensation cost expense in future periods | |||
Share-based compensation expense | $ 800 | $ 800 | $ 500 |
Unrecognized Compensation Cost, amount | $ 1,800 | ||
Unrecognized Compensation Cost, remaining recognition period | 2 years 2 months 12 days |
Share-Based Payments (Narrative
Share-Based Payments (Narrative) (Details) | 12 Months Ended | ||
Dec. 31, 2015USD ($)Award_Type | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of award types | Award_Type | 3 | ||
The aggregate grant date intrinsic value of options exercised | $ 100,000 | $ 300,000 | $ 100,000 |
Aggregate intrinsic value of stock options outstanding | $ 100,000 | ||
Weighted average remaining contractual term of stock options | 2 years 2 months 14 days | ||
Cash proceeds from stock option exercises | $ 0 | 0 | 0 |
Restricted Stock Units (RSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected average period | 3 years | ||
The aggregate grant date fair value | $ 2,100,000 | 1,500,000 | 1,400,000 |
Aggregate intrinsic value | $ 2,300,000 | 2,300,000 | 2,700,000 |
Performance Shares Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected average period | 3 years | ||
The aggregate grant date fair value | $ 7,700,000 | 5,200,000 | 5,100,000 |
Aggregate intrinsic value | $ 8,400,000 | $ 7,700,000 | $ 9,100,000 |
The percentage of award vest | 115.00% | 125.00% | 125.00% |
Performance Shares Units [Member] | Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
The percentage of award vest | 75.00% | ||
Performance Shares Units [Member] | Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
The percentage of award vest | 125.00% | ||
Employee Purchase Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected average period | 3 years | ||
The aggregate grant date fair value | $ 900,000 | $ 600,000 | |
Aggregate intrinsic value | 1,000,000 | $ 800,000 | |
Annual contribution for the purchase of shares | $ 5,000 |
Share-Based Payments (Restricte
Share-Based Payments (Restricted Share Units) (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Summary Activity for restricted share units, number of shares | |||
Beginning non-vested balance (in shares) | 136,802 | 138,770 | 157,212 |
Granted (in shares) | 91,943 | 49,750 | 39,400 |
Forfeited (in shares) | (1,342) | (2,044) | (603) |
Vested (in shares) | (48,935) | (49,674) | (57,239) |
Ending non-vested balance (in shares) | 178,468 | 136,802 | 138,770 |
Summary Activity for restricted share units, weighted average grant date fair value | |||
Beginning balance, weighted average grant date fair value per share (USD per share) | $ 45.02 | $ 38.92 | $ 31.94 |
Granted, weighted average grant date fair value per share (USD per share) | 42.73 | 46.34 | 46.97 |
Forfeited, weighted average grant date fair value per share (USD per share) | 42.79 | 44.88 | 35.91 |
Vested and released, weighted average grant date fair value per share (USD per share) | 42.24 | 29.22 | 25.25 |
Ending balance, weighted average grant date fair value per share (USD per share) | $ 44.64 | $ 45.02 | $ 38.92 |
Share-Based Payments (Performan
Share-Based Payments (Performance Share Units) (Details) - Performance Shares Units [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Summary Activity for restricted share units, number of shares | |||
Beginning non-vested balance (in shares) | 466,860 | 486,680 | 552,417 |
Granted (in shares) | 106,490 | 160,900 | 145,580 |
Forfeited (in shares) | (2,322) | (14,221) | (17,043) |
Vested (in shares) | (180,678) | (166,499) | (194,274) |
Ending non-vested balance (in shares) | 390,350 | 466,860 | 486,680 |
Summary Activity for restricted share units, weighted average grant date fair value | |||
Beginning balance, weighted average grant date fair value per share (USD per share) | $ 44.97 | $ 39.86 | $ 33.21 |
Granted, weighted average grant date fair value per share (USD per share) | 42.73 | 46.34 | 46.97 |
Forfeited, weighted average grant date fair value per share (USD per share) | 46.42 | 45.30 | 38.90 |
Vested and released, weighted average grant date fair value per share (USD per share) | 42.44 | 31.33 | 26.39 |
Ending balance, weighted average grant date fair value per share (USD per share) | $ 45.56 | $ 44.97 | $ 39.86 |
Share-Based Payments (Purchase
Share-Based Payments (Purchase Match Units) (Details) - Employee Purchase Plan [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Summary Activity for restricted share units, number of shares | |||
Beginning non-vested balance (in shares) | 72,101 | 63,125 | 40,985 |
Granted (in shares) | 26,593 | 29,069 | 25,151 |
Forfeited (in shares) | (3,087) | (2,968) | (2,456) |
Vested (in shares) | (21,124) | (17,125) | (555) |
Ending non-vested balance (in shares) | 74,483 | 72,101 | 63,125 |
Summary Activity for restricted share units, weighted average grant date fair value | |||
Beginning balance, weighted average grant date fair value per share (USD per share) | $ 43.69 | $ 41.34 | $ 39.85 |
Granted, weighted average grant date fair value per share (USD per share) | 46.03 | 44.55 | 43.57 |
Forfeited, weighted average grant date fair value per share (USD per share) | 44.16 | 43.14 | 40.71 |
Vested and released, weighted average grant date fair value per share (USD per share) | 42.65 | 36.61 | 36.33 |
Ending balance, weighted average grant date fair value per share (USD per share) | $ 44.80 | $ 43.69 | $ 41.34 |
Share-Based Payments (Stock Opt
Share-Based Payments (Stock Options) (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Summary of activity for stock options | |||
Stock Options, Outstanding, Beginning of the year (in shares) | 4,456 | 18,082 | 20,302 |
Stock Options, Outstanding, Exercised (in shares) | (2,342) | (13,626) | (2,220) |
Stock Options, Outstanding, Ending of the year (in shares) | 2,114 | 4,456 | 18,082 |
Summary of activity for stock options, weighted average exercise price | |||
Stock Options, Outstanding, Weighted Average Exercise Price, Beginning of the year (USD per share) | $ 24.64 | $ 23 | $ 23.15 |
Stock Options, Outstanding, Weighted Average Exercise Price, Exercised (USD per share) | 24.13 | 22.47 | 24.28 |
Stock Options, Outstanding, Weighted Average Exercise Price, End of the Period (USD per share) | $ 25.02 | $ 24.64 | $ 23 |
Variable Interest Entities (Det
Variable Interest Entities (Details) - Variable Interest Entity, Not Primary Beneficiary [Member] - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Other Investments [Member] | ||
Variable Interest Entity [Line Items] | ||
Variable interest entity nonconsolidated assets | $ 24.5 | $ 33.3 |
Variable interest entity, maximum loss exposure | 24.5 | |
Equity Method Investments [Member] | ||
Variable Interest Entity [Line Items] | ||
Variable interest entity nonconsolidated assets | 67.8 | $ 65 |
Variable interest entity, maximum loss exposure | $ 67.8 |
Segment Information (Narrative)
Segment Information (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2015Segment | |
Segment Reporting Information [Line Items] | |
Number of operating segments | 4 |
Workers Compensation [Member] | |
Segment Reporting Information [Line Items] | |
Alternative market solutions percentage ceded | 100.00% |
Lloyds Syndicate [Member] | |
Segment Reporting Information [Line Items] | |
Proportion of capital provided to support lloyd's syndicate | 58.00% |
Segment Information (Financial
Segment Information (Financial Data by Segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting Information [Line Items] | |||||||||||
Net premiums earned | $ 164,874 | $ 182,085 | $ 175,293 | $ 171,899 | $ 174,670 | $ 177,028 | $ 176,303 | $ 171,730 | $ 694,149 | $ 699,731 | $ 527,919 |
Net investment income | 108,660 | 125,557 | 129,265 | ||||||||
Equity in earnings (loss) of unconsolidated subsidiaries | 3,682 | 3,986 | 7,539 | ||||||||
Net realized gains (losses) | (41,639) | 14,654 | 67,904 | ||||||||
Other income (loss) | 7,227 | 8,398 | 7,551 | ||||||||
Gain on acquisition | 0 | 0 | 32,314 | ||||||||
Net losses and loss adjustment expenses | (410,711) | (363,084) | (224,761) | ||||||||
Underwriting, policy acquisition and operating expenses | (217,064) | (211,311) | (147,817) | ||||||||
Segregated portfolio cells dividend (expense) income | (853) | (1,842) | 0 | ||||||||
Interest expense | (14,596) | (14,084) | (2,755) | ||||||||
Loss on extinguishment of debt | 0 | ||||||||||
Income tax benefit (expense) | (12,658) | (65,440) | (99,636) | ||||||||
Segment operating results | 116,197 | 196,565 | 297,523 | ||||||||
Depreciation and amortization | 36,400 | 39,594 | 35,833 | ||||||||
Specialty Property and Casualty [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net premiums earned | 443,313 | 492,733 | 527,919 | ||||||||
Segment operating results | 92,132 | 137,225 | 176,730 | ||||||||
Workers Compensation [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net premiums earned | 213,161 | 194,540 | 0 | ||||||||
Segment operating results | 8,403 | 6,539 | 0 | ||||||||
Lloyds Syndicate [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net premiums earned | 37,675 | 12,458 | 0 | ||||||||
Segment operating results | (5,614) | (4,975) | 0 | ||||||||
Corporate Segment [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Segment operating results | 21,276 | 57,776 | 120,793 | ||||||||
Inter-segment Eliminations [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net premiums earned | 0 | 0 | |||||||||
Other income (loss) | (581) | (481) | (7) | ||||||||
Net losses and loss adjustment expenses | 5,382 | ||||||||||
Underwriting, policy acquisition and operating expenses | (4,801) | 481 | 7 | ||||||||
Segment operating results | 0 | 0 | 0 | ||||||||
Operating Segments [Member] | Specialty Property and Casualty [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net premiums earned | 443,313 | 492,733 | 527,919 | ||||||||
Other income (loss) | 4,561 | 5,823 | 5,648 | ||||||||
Net losses and loss adjustment expenses | (250,168) | (228,199) | (224,761) | ||||||||
Underwriting, policy acquisition and operating expenses | (105,574) | (133,132) | (132,076) | ||||||||
Depreciation and amortization | 8,663 | 8,945 | 7,199 | ||||||||
Operating Segments [Member] | Workers Compensation [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net premiums earned | 213,161 | 194,540 | 0 | ||||||||
Other income (loss) | 492 | 645 | 0 | ||||||||
Net losses and loss adjustment expenses | (140,744) | (126,447) | 0 | ||||||||
Underwriting, policy acquisition and operating expenses | (63,653) | (60,357) | 0 | ||||||||
Segregated portfolio cells dividend (expense) income | (853) | (1,842) | |||||||||
Depreciation and amortization | 5,696 | 5,828 | 0 | ||||||||
Operating Segments [Member] | Lloyds Syndicate [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net premiums earned | 37,675 | 12,458 | 0 | ||||||||
Net investment income | 928 | 410 | 0 | ||||||||
Net realized gains (losses) | 24 | 4 | |||||||||
Other income (loss) | 698 | 126 | 0 | ||||||||
Net losses and loss adjustment expenses | (25,181) | (8,438) | 0 | ||||||||
Underwriting, policy acquisition and operating expenses | (18,518) | (9,535) | 0 | ||||||||
Income tax benefit (expense) | (1,240) | ||||||||||
Depreciation and amortization | 417 | 477 | 0 | ||||||||
Operating Segments [Member] | Corporate Segment [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net investment income | 107,732 | 125,147 | 129,265 | ||||||||
Equity in earnings (loss) of unconsolidated subsidiaries | 3,682 | 3,986 | 7,539 | ||||||||
Net realized gains (losses) | (41,663) | 14,650 | 67,904 | ||||||||
Other income (loss) | 2,057 | 2,285 | 1,910 | ||||||||
Gain on acquisition | 0 | 32,314 | |||||||||
Underwriting, policy acquisition and operating expenses | (24,518) | (8,768) | (15,748) | ||||||||
Interest expense | (14,596) | (14,084) | (2,755) | ||||||||
Loss on extinguishment of debt | 0 | ||||||||||
Income tax benefit (expense) | (11,418) | (65,440) | (99,636) | ||||||||
Depreciation and amortization | $ 21,624 | $ 24,344 | $ 28,634 |
Segment Information (Gross Prem
Segment Information (Gross Premiums Earned by Product) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting Information [Line Items] | |||||||||||
Premiums ceded | $ 101,510 | $ 68,879 | $ 41,514 | ||||||||
Net premiums earned | $ 164,874 | $ 182,085 | $ 175,293 | $ 171,899 | $ 174,670 | $ 177,028 | $ 176,303 | $ 171,730 | 694,149 | 699,731 | 527,919 |
Specialty Property and Casualty [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net premiums earned | 443,313 | 492,733 | 527,919 | ||||||||
Premiums ceded to Lloyd's Syndicate | 14,400 | 4,200 | |||||||||
Workers Compensation [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net premiums earned | 213,161 | 194,540 | 0 | ||||||||
Lloyds Syndicate [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net premiums earned | 37,675 | 12,458 | 0 | ||||||||
Operating Segments [Member] | Specialty Property and Casualty [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums ceded | 84,805 | 50,319 | 41,514 | ||||||||
Net premiums earned | 443,313 | 492,733 | 527,919 | ||||||||
Operating Segments [Member] | Workers Compensation [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums ceded | 25,122 | 21,793 | 0 | ||||||||
Net premiums earned | 213,161 | 194,540 | 0 | ||||||||
Operating Segments [Member] | Lloyds Syndicate [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums ceded | 5,942 | 971 | 0 | ||||||||
Net premiums earned | 37,675 | 12,458 | 0 | ||||||||
Operating Segments [Member] | Healthcare Professional Liability [Member] | Specialty Property and Casualty [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Gross premiums earned | 463,599 | 477,031 | 507,222 | ||||||||
Operating Segments [Member] | Legal Professional Liability [Member] | Specialty Property and Casualty [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Gross premiums earned | 28,234 | 28,278 | 27,162 | ||||||||
Operating Segments [Member] | Medical Technology and Life Sciences Product Liability [Member] | Specialty Property and Casualty [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Gross premiums earned | 34,838 | 35,913 | 33,242 | ||||||||
Operating Segments [Member] | Other Premiums [Member] | Specialty Property and Casualty [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Gross premiums earned | 1,447 | 1,830 | 1,807 | ||||||||
Operating Segments [Member] | Workers' Compensation Traditional Business [Member] | Workers Compensation [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Gross premiums earned | 172,115 | 160,717 | 0 | ||||||||
Operating Segments [Member] | Workers' Compensation Alternative Market Business [Member] | Workers Compensation [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Gross premiums earned | 66,168 | 55,616 | 0 | ||||||||
Operating Segments [Member] | Property, Liability and Casualty Insurance Product Line [Member] | Lloyds Syndicate [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Gross premiums earned | $ 43,617 | $ 13,429 | $ 0 |
Benefit Plans (Details)
Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Incurred expense related to savings and retirement plans | $ 7 | $ 6 | $ 5.1 |
Incurred expense related to non qualified deferred compensation plans | 0.4 | 0.3 | 0.4 |
ProAssurance deferred compensation liabilities total | $ 14.9 | $ 14 | $ 13.1 |
Minimum [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Percentage of benefit plan contribution by employer | 5.00% | ||
Maximum [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Percentage of benefit plan contribution by employer | 10.00% |
Statutory Accounting and Divi92
Statutory Accounting and Dividend Restrictions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Consolidated Net Income Related to Statutory Accounting | |||
Statutory Net Earnings | $ 168 | $ 246 | $ 256 |
Statutory Capital and Surplus | 1,506 | $ 1,681 | |
Net assets held at domestic insurance subsidiaries | 1,700 | ||
Statutory dividend payments permitted from insurance subsidiaries | $ 165 |
Quarterly Results of Operatio93
Quarterly Results of Operations (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Summary of unaudited quarterly results of operations | |||||||||||
Net premiums earned | $ 164,874 | $ 182,085 | $ 175,293 | $ 171,899 | $ 174,670 | $ 177,028 | $ 176,303 | $ 171,730 | $ 694,149 | $ 699,731 | $ 527,919 |
Net losses and loss adjustment expenses: | |||||||||||
Current year | 149,157 | 145,027 | 139,057 | 138,654 | 124,271 | 142,124 | 141,126 | 137,647 | 571,891 | 545,168 | 447,510 |
Favorable development of reserves established in prior years, net | (56,330) | (36,221) | (35,115) | (33,514) | (48,830) | (42,902) | (42,213) | (48,139) | (161,180) | (182,084) | (222,749) |
Net income | $ 34,948 | $ 10,276 | $ 33,158 | $ 37,814 | $ 65,114 | $ 34,778 | $ 49,942 | $ 46,731 | $ 116,197 | $ 196,565 | $ 297,523 |
Basic earnings per share (USD per share) | $ 0.66 | $ 0.19 | $ 0.60 | $ 0.67 | $ 1.13 | $ 0.59 | $ 0.84 | $ 0.76 | $ 2.12 | $ 3.32 | $ 4.82 |
Diluted earnings per share (USD per share) | $ 0.65 | $ 0.19 | $ 0.60 | $ 0.67 | $ 1.12 | $ 0.59 | $ 0.84 | $ 0.76 | $ 2.11 | $ 3.30 | $ 4.80 |
Schedule I - Summary of Inves94
Schedule I - Summary of Investments-Other Than Investments In Related Parties (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Recorded Cost Basis | $ 3,562,470 |
Fair Value | 3,758,990 |
Amount Which is Presented in the Balance Sheet | 3,650,130 |
U.S. Government or government agencies and authorities [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Recorded Cost Basis | 148,311 |
Fair Value | 150,226 |
Amount Which is Presented in the Balance Sheet | 150,226 |
States, municipalities and political subdivisions [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Recorded Cost Basis | 904,719 |
Fair Value | 940,635 |
Amount Which is Presented in the Balance Sheet | 940,635 |
Foreign governments [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Recorded Cost Basis | 5,128 |
Fair Value | 5,256 |
Amount Which is Presented in the Balance Sheet | 5,256 |
Public utilities bonds [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Recorded Cost Basis | 95,185 |
Fair Value | 96,448 |
Amount Which is Presented in the Balance Sheet | 96,448 |
All other corporate bonds [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Recorded Cost Basis | 1,195,665 |
Fair Value | 1,189,832 |
Amount Which is Presented in the Balance Sheet | 1,189,832 |
Certificates of deposit [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Recorded Cost Basis | 150 |
Fair Value | 150 |
Amount Which is Presented in the Balance Sheet | 150 |
Mortgage-backed securities [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Recorded Cost Basis | 372,905 |
Fair Value | 377,740 |
Amount Which is Presented in the Balance Sheet | 377,740 |
Fixed Maturities [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Recorded Cost Basis | 2,722,063 |
Fair Value | 2,760,287 |
Amount Which is Presented in the Balance Sheet | 2,760,287 |
Public utilities equity, trading [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Recorded Cost Basis | 9,546 |
Fair Value | 9,518 |
Amount Which is Presented in the Balance Sheet | 9,518 |
Banks, trusts and insurance companies, trading [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Recorded Cost Basis | 68,639 |
Fair Value | 67,764 |
Amount Which is Presented in the Balance Sheet | 67,764 |
Industrial, miscellaneous and all other, trading [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Recorded Cost Basis | 241,135 |
Fair Value | 245,071 |
Amount Which is Presented in the Balance Sheet | 245,071 |
Total Equity Securities, trading [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Recorded Cost Basis | 319,320 |
Fair Value | 322,353 |
Amount Which is Presented in the Balance Sheet | 322,353 |
Other long-term investments [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Recorded Cost Basis | 401,851 |
Fair Value | 557,114 |
Amount Which is Presented in the Balance Sheet | 448,254 |
Short-term Investments [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Recorded Cost Basis | 119,236 |
Fair Value | 119,236 |
Amount Which is Presented in the Balance Sheet | $ 119,236 |
Schedule II - Condensed Finan95
Schedule II - Condensed Financial Information of Registrant (Condensed Balance Sheets) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Assets | ||||
Fixed maturities available for sale, at fair value | $ 2,760,287 | $ 3,145,027 | ||
Short-term investments | 119,236 | 131,259 | ||
Cash and cash equivalents | 241,100 | 197,040 | $ 129,383 | $ 118,551 |
Other assets | 106,108 | 93,263 | ||
Total Assets | 4,908,163 | 5,169,160 | ||
Liabilities | ||||
Dividends declared and not yet paid | 69,447 | 167,744 | 18,532 | |
Other liabilities | 202,303 | 320,853 | ||
Debt | 350,000 | 250,000 | ||
Total Liabilities | 2,949,809 | 3,011,216 | ||
Shareholders’ Equity: | ||||
Common stock | 625 | 623 | ||
Total Shareholders’ Equity | 1,958,354 | 2,157,944 | 2,394,414 | 2,270,580 |
Total Liabilities and Shareholders’ Equity | 4,908,163 | 5,169,160 | ||
Parent Company [Member] | ||||
Assets | ||||
Investment in subsidiaries, at equity | 2,026,247 | 2,145,358 | ||
Fixed maturities available for sale, at fair value | 202,501 | 203,451 | ||
Short-term investments | 16,716 | 42,790 | ||
Cash and cash equivalents | 103,292 | 87,200 | 37,459 | $ 29,397 |
Due from subsidiaries | 0 | 87,719 | ||
Other assets | 48,288 | 25,736 | ||
Total Assets | 2,397,044 | 2,592,254 | ||
Liabilities | ||||
Due to subsidiaries | 14,803 | 0 | ||
Dividends declared and not yet paid | 69,447 | 167,744 | $ 18,532 | |
Other liabilities | 4,440 | 16,566 | ||
Debt | 350,000 | 250,000 | ||
Total Liabilities | 438,690 | 434,310 | ||
Shareholders’ Equity: | ||||
Common stock | 625 | 623 | ||
Other shareholders’ equity, including unrealized gains (losses) on securities of subsidiaries | 1,957,729 | 2,157,321 | ||
Total Shareholders’ Equity | 1,958,354 | 2,157,944 | ||
Total Liabilities and Shareholders’ Equity | $ 2,397,044 | $ 2,592,254 |
Schedule II - Condensed Finan96
Schedule II - Condensed Financial Information of Registrant (Condensed Statements of Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues | |||||||||||
Net investment income | $ 108,660 | $ 125,557 | $ 129,265 | ||||||||
Other income (loss) | 7,227 | 8,398 | 7,551 | ||||||||
Total revenues | 772,079 | 852,326 | 740,178 | ||||||||
Expenses | |||||||||||
Interest expense | 14,596 | 14,084 | 2,755 | ||||||||
Total expenses | 643,224 | 590,321 | 375,333 | ||||||||
Income tax expense (benefit) | 12,658 | 65,440 | 99,636 | ||||||||
Net income | $ 34,948 | $ 10,276 | $ 33,158 | $ 37,814 | $ 65,114 | $ 34,778 | $ 49,942 | $ 46,731 | 116,197 | 196,565 | 297,523 |
Other comprehensive income | (34,349) | (1,457) | (85,719) | ||||||||
Comprehensive income | 81,848 | 195,108 | 211,804 | ||||||||
Parent Company [Member] | |||||||||||
Revenues | |||||||||||
Net investment income | 5,017 | 3,295 | 5,789 | ||||||||
Net realized investment gains (losses) | 4,673 | 990 | 5,334 | ||||||||
Other income (loss) | 378 | 660 | 170 | ||||||||
Total revenues | 10,068 | 4,945 | 11,293 | ||||||||
Expenses | |||||||||||
Interest expense | 14,596 | 14,084 | 2,747 | ||||||||
Other expenses | 24,695 | 7,083 | 13,213 | ||||||||
Total expenses | 39,291 | 21,167 | 15,960 | ||||||||
Income (loss) before income tax expense (benefit) and equity in net income of consolidated subsidiaries | (29,223) | (16,222) | (4,667) | ||||||||
Income tax expense (benefit) | (11,657) | (6,728) | (1,007) | ||||||||
Income (loss) before equity in net income of consolidated subsidiaries | (17,566) | (9,494) | (3,660) | ||||||||
Equity in net income of consolidated subsidiaries | 133,763 | 206,059 | 301,183 | ||||||||
Net income | 116,197 | 196,565 | 297,523 | ||||||||
Other comprehensive income | (34,349) | (1,457) | (85,719) | ||||||||
Comprehensive income | $ 81,848 | $ 195,108 | $ 211,804 |
Schedule II - Condensed Finan97
Schedule II - Condensed Financial Information of Registrant (Condensed Statements of Cash Flow) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Condensed Cash Flow Statements, Captions [Line Items] | |||
Net cash provided (used) by operating activities | $ 111,960 | $ 96,002 | $ 38,602 |
Purchases of: | |||
Equity securities trading | (271,608) | (119,865) | (87,604) |
Proceeds from sale or maturities of: | |||
Fixed maturities, available for sale | 886,886 | 703,828 | 970,708 |
Equity securities trading | 236,476 | 134,005 | 123,645 |
Net decrease (increase) in short-term investments | 11,932 | 140,411 | (176,092) |
(Increase) decrease in restricted cash | 0 | 78,000 | (78,000) |
Funds at Lloyd's in support of Syndicate 1729, returned (deposited) | 0 | 8,690 | (8,699) |
Other | (2,505) | (1,507) | (4,062) |
Net cash provided (used) by investing activities | 227,787 | 266,980 | (67,803) |
Financing Activities | |||
Principal repayment of debt | 0 | 0 | (127,183) |
Repurchase of common stock | (172,772) | (222,360) | (29,089) |
Excess of tax benefit from share-based payment arrangements | 494 | 2,702 | 2,128 |
Dividends to shareholders | (217,626) | (71,252) | (46,375) |
Other | (5,783) | (4,415) | (9,448) |
Net cash provided (used) by financing activities | (295,687) | (295,325) | 40,033 |
Increase (decrease) in cash and cash equivalents | 44,060 | 67,657 | 10,832 |
Cash and cash equivalents at beginning of period | 197,040 | 129,383 | 118,551 |
Cash and cash equivalents at end of period | 241,100 | 197,040 | 129,383 |
Supplemental Disclosure of Cash Flow Information | |||
Cash paid during the year for income taxes, net of refunds | 42,784 | 22,968 | 117,107 |
Cash paid during the year for interest | 13,996 | 13,408 | 913 |
Significant non-cash transactions: | |||
Dividends declared and not yet paid | 69,447 | 167,744 | 18,532 |
Parent Company [Member] | |||
Condensed Cash Flow Statements, Captions [Line Items] | |||
Net cash provided (used) by operating activities | (14,411) | 20,086 | (24,654) |
Purchases of: | |||
Equity securities trading | 0 | (310) | (1,265) |
Proceeds from sale or maturities of: | |||
Fixed maturities, available for sale | 200,245 | 104,844 | 224,993 |
Equity securities trading | 0 | 12,813 | 1,113 |
Net decrease (increase) in short-term investments | 26,074 | 149,202 | (187,625) |
Dividends from subsidiaries | 107,870 | 67,188 | 239,484 |
Contribution of capital to subsidiaries | 0 | (7,000) | 0 |
Cash paid for acquisitions, net of cash received | 0 | 0 | (205,244) |
(Increase) decrease in restricted cash | 0 | 78,000 | (78,000) |
Funds at Lloyd's in support of Syndicate 1729, returned (deposited) | (9,642) | (76,553) | (8,699) |
Funds advanced under Syndicate 1729 credit agreement | (3,083) | (9,107) | (1,665) |
Other | (289) | 415 | (20) |
Net cash provided (used) by investing activities | 321,175 | 319,492 | (16,928) |
Financing Activities | |||
Borrowing under revolving credit agreement | 100,000 | 0 | 250,000 |
Principal repayment of debt | 0 | 0 | (125,000) |
Repurchase of common stock | (172,772) | (222,360) | (29,089) |
Subsidiary payments for common shares and share-based compensation awarded to subsidiary employees | 6,063 | 8,301 | 6,258 |
Excess of tax benefit from share-based payment arrangements | 379 | 1,631 | 2,128 |
Dividends to shareholders | (217,626) | (70,490) | (46,375) |
Other | (6,716) | (6,919) | (8,278) |
Net cash provided (used) by financing activities | (290,672) | (289,837) | 49,644 |
Increase (decrease) in cash and cash equivalents | 16,092 | 49,741 | 8,062 |
Cash and cash equivalents at beginning of period | 87,200 | 37,459 | 29,397 |
Cash and cash equivalents at end of period | 103,292 | 87,200 | 37,459 |
Supplemental Disclosure of Cash Flow Information | |||
Cash paid during the year for income taxes, net of refunds | 47,004 | 26,764 | 120,031 |
Cash paid during the year for interest | 13,996 | 13,408 | 913 |
Significant non-cash transactions: | |||
Dividends declared and not yet paid | 69,447 | 167,744 | 18,532 |
Securities transferred at fair value as dividends from subsidiaries | 206,880 | 227,412 | 69,011 |
Non-cash capital contribution to subsidiaries | $ 87,719 | $ 0 | $ 0 |
Schedule III - Supplementary 98
Schedule III - Supplementary Insurance Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Supplementary Insurance Information, by Segment [Line Items] | |||||||||||
Net premiums earned | $ 694,149 | $ 699,731 | $ 527,919 | ||||||||
Net investment income | 108,660 | 125,557 | 129,265 | ||||||||
Losses and loss adjustment expenses incurred related to current year, net of reinsurance | $ 149,157 | $ 145,027 | $ 139,057 | $ 138,654 | $ 124,271 | $ 142,124 | $ 141,126 | $ 137,647 | 571,891 | 545,168 | 447,510 |
Favorable development of reserves established in prior years, net | (56,330) | $ (36,221) | $ (35,115) | $ (33,514) | (48,830) | $ (42,902) | $ (42,213) | $ (48,139) | (161,180) | (182,084) | (222,749) |
Paid losses and loss adjustment expenses, net of reinsurance | 475,035 | 507,637 | 388,813 | ||||||||
Underwriting, policy acquisition and operating expenses: | 79,556 | 68,577 | 53,207 | ||||||||
Other underwriting, policy acquisition and operating expenses | 137,508 | 142,734 | 94,610 | ||||||||
Net premiums written | 709,285 | 701,849 | 525,182 | ||||||||
Deferred policy acquisition costs | 44,388 | 38,790 | 44,388 | 38,790 | 28,207 | ||||||
Reserve for losses and loss adjustment expenses | 2,005,326 | 2,058,266 | 2,005,326 | 2,058,266 | 2,072,822 | ||||||
Unearned premiums | $ 362,066 | $ 345,828 | 362,066 | 345,828 | 255,463 | ||||||
Inter-segment Eliminations [Member] | |||||||||||
Supplementary Insurance Information, by Segment [Line Items] | |||||||||||
Losses and loss adjustment expenses incurred related to current year, net of reinsurance | (5,382) | 0 | 0 | ||||||||
Paid losses and loss adjustment expenses, net of reinsurance | (5,416) | 0 | 0 | ||||||||
Underwriting, policy acquisition and operating expenses: | 24 | 0 | 0 | ||||||||
Other underwriting, policy acquisition and operating expenses | 4,777 | (481) | (7) | ||||||||
Specialty Property and Casualty [Member] | |||||||||||
Supplementary Insurance Information, by Segment [Line Items] | |||||||||||
Net premiums earned | 443,313 | 492,733 | 527,919 | ||||||||
Losses and loss adjustment expenses incurred related to current year, net of reinsurance | 409,149 | 408,987 | 447,510 | ||||||||
Favorable development of reserves established in prior years, net | (158,981) | (180,788) | (222,749) | ||||||||
Paid losses and loss adjustment expenses, net of reinsurance | 346,606 | 389,458 | 388,813 | ||||||||
Underwriting, policy acquisition and operating expenses: | 45,459 | 55,105 | 53,207 | ||||||||
Other underwriting, policy acquisition and operating expenses | 60,115 | 78,027 | 78,869 | ||||||||
Net premiums written | 442,126 | 467,046 | 525,182 | ||||||||
Workers Compensation [Member] | |||||||||||
Supplementary Insurance Information, by Segment [Line Items] | |||||||||||
Net premiums earned | 213,161 | 194,540 | 0 | ||||||||
Losses and loss adjustment expenses incurred related to current year, net of reinsurance | 142,943 | 127,743 | 0 | ||||||||
Favorable development of reserves established in prior years, net | (2,199) | (1,296) | 0 | ||||||||
Paid losses and loss adjustment expenses, net of reinsurance | 126,296 | 117,775 | 0 | ||||||||
Underwriting, policy acquisition and operating expenses: | 26,232 | 10,307 | 0 | ||||||||
Other underwriting, policy acquisition and operating expenses | 37,421 | 50,050 | 0 | ||||||||
Net premiums written | 218,338 | 202,697 | 0 | ||||||||
Lloyds Syndicate [Member] | |||||||||||
Supplementary Insurance Information, by Segment [Line Items] | |||||||||||
Net premiums earned | 37,675 | 12,458 | 0 | ||||||||
Net investment income | 928 | 410 | 0 | ||||||||
Losses and loss adjustment expenses incurred related to current year, net of reinsurance | 25,181 | 8,438 | 0 | ||||||||
Paid losses and loss adjustment expenses, net of reinsurance | 7,549 | 404 | 0 | ||||||||
Underwriting, policy acquisition and operating expenses: | 7,841 | 3,165 | 0 | ||||||||
Other underwriting, policy acquisition and operating expenses | 10,677 | 6,370 | 0 | ||||||||
Net premiums written | 48,821 | 32,106 | 0 | ||||||||
Corporate Segment [Member] | |||||||||||
Supplementary Insurance Information, by Segment [Line Items] | |||||||||||
Net investment income | 107,732 | 125,147 | 129,265 | ||||||||
Other underwriting, policy acquisition and operating expenses | $ 24,518 | $ 8,768 | $ 15,748 |
Schedule IV - Reinsurance (Deta
Schedule IV - Reinsurance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property and Liability | |||
Premiums earned | $ 772,968 | $ 755,623 | $ 568,629 |
Premiums ceded | (101,510) | (68,879) | (41,514) |
Premiums assumed | 22,691 | 12,987 | 804 |
Net premiums earned | $ 694,149 | $ 699,731 | $ 527,919 |
Percentage of amount assumed to net | 3.27% | 1.86% | 0.15% |