Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 10, 2020 | Jun. 30, 2019 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2019 | ||
Entity File Number | 000-50070 | ||
Entity Registrant Name | SAFETY INSURANCE GROUP, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 13-4181699 | ||
Entity Address, Address Line One | 20 Custom House Street | ||
Entity Address, City or Town | Boston | ||
Entity Address, State or Province | MA | ||
Entity Address, Postal Zip Code | 02110 | ||
City Area Code | 617 | ||
Local Phone Number | 951-0600 | ||
Title of 12(b) Security | Common Shares, $0.01 par value per share | ||
Trading Symbol | SAFT | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 15,383,209 | ||
Entity Public Float | $ 1,392,875,671 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001172052 | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Investments: | ||
Fixed maturities, available for sale, at fair value (amortized cost: $1,192,357 and $1,175,413) | $ 1,228,040 | $ 1,161,862 |
Equity securities, at fair value (cost: $151,121 and $142,948) | 177,637 | 148,011 |
Other invested assets | 37,278 | 23,481 |
Total investments | 1,442,955 | 1,333,354 |
Cash and cash equivalents | 44,407 | 37,582 |
Accounts receivable, net of allowance for doubtful accounts | 193,369 | 190,062 |
Receivable for securities sold | 1,784 | 1,039 |
Accrued investment income | 8,404 | 8,420 |
Taxes recoverable | 1,003 | |
Receivable from reinsurers related to paid loss and loss adjustment expenses | 11,319 | 13,691 |
Receivable from reinsurers related to unpaid loss and loss adjustment expenses | 122,372 | 108,398 |
Ceded unearned premiums | 35,182 | 33,974 |
Deferred policy acquisition costs | 74,287 | 73,355 |
Deferred income taxes | 8,749 | |
Equity and deposits in pools | 29,791 | 28,094 |
Operating lease right-of-use-assets | 33,998 | |
Other assets | 23,798 | 19,522 |
Total assets | 2,022,669 | 1,856,240 |
Liabilities | ||
Loss and loss adjustment expense reserves | 610,566 | 584,719 |
Unearned premium reserves | 442,219 | 435,380 |
Accounts payable and accrued liabilities | 75,016 | 71,896 |
Payable for securities purchased | 6,377 | 5,156 |
Payable to reinsurers | 12,911 | 12,220 |
Deferred income taxes | 5,717 | |
Taxes payable | 6,090 | |
Operating lease liabilities | 33,998 | |
Other liabilities | 27,459 | 22,135 |
Total liabilities | 1,214,263 | 1,137,596 |
Commitments and contingencies (Note 7) | ||
Shareholders' equity | ||
Common stock: $0.01 par value; 30,000,000 shares authorized; 17,662,779 and 17,566,180 shares issued | 177 | 176 |
Additional paid-in capital | 202,321 | 196,292 |
Accumulated other comprehensive income (loss), net of taxes | 28,190 | (10,706) |
Retained earnings | 661,553 | 616,717 |
Treasury stock, at cost: 2,279,570 shares | (83,835) | (83,835) |
Total shareholders' equity | 808,406 | 718,644 |
Total liabilities and shareholders' equity | $ 2,022,669 | $ 1,856,240 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Consolidated Balance Sheets | ||
Fixed maturity securities, amortized cost | $ 1,192,357 | $ 1,175,413 |
Equity securities, at cost | $ 151,121 | $ 142,948 |
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock shares authorized | 30,000,000 | 30,000,000 |
Common stock shares issued | 17,662,779 | 17,566,180 |
Treasury stock shares | 2,279,570 | 2,279,570 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | |||
Net earned premiums | $ 788,777 | $ 781,587 | $ 774,420 |
Net investment income | 46,665 | 43,788 | 38,758 |
Earnings from partnership investments | 1,937 | 6,915 | 2,082 |
Net realized gains on investments | 2,976 | 3,226 | 6,036 |
Change in unrealized gains on equity investments | 21,454 | (16,324) | |
Net impairment losses on investments (a) | (889) | (228) | (256) |
Finance and other service income | 16,833 | 17,533 | 18,073 |
Total revenue | 877,753 | 836,497 | 839,113 |
Expenses | |||
Losses and loss adjustment expenses | 509,846 | 485,513 | 503,887 |
Underwriting, operating and related expenses | 244,136 | 246,643 | 248,436 |
Interest expense | 90 | 90 | 90 |
Total expenses | 754,072 | 732,246 | 752,413 |
Income before income taxes | 123,681 | 104,251 | 86,700 |
Income tax expense | 24,080 | 21,056 | 24,313 |
Net income | $ 99,601 | $ 83,195 | $ 62,387 |
Earnings per weighted average common share: | |||
Basic (in dollars per share) | $ 6.52 | $ 5.48 | $ 4.13 |
Diluted (in dollars per share) | 6.46 | 5.43 | 4.10 |
Cash dividends paid per common share (in dollars per share) | $ 3.40 | $ 3.20 | $ 3 |
Number of shares used in computing earnings per share: | |||
Basic (in shares) | 15,201,132 | 15,080,269 | 15,010,751 |
Diluted (in shares) | 15,337,807 | 15,229,898 | 15,135,348 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated Statements of Comprehensive Income | |||
Net income | $ 99,601 | $ 83,195 | $ 62,387 |
Other comprehensive income (loss), net of tax: | |||
Unrealized holding gains (losses) during the period, net of income tax expense (benefit) of $10,964, ($5,387), and $6,027. | 41,247 | (20,267) | 12,349 |
Reclassification adjustment for net realized gains on investments included in net income, net of income tax expense of ($625), ($678), and ($2,112). | (2,351) | (2,549) | (3,923) |
Other comprehensive income (loss), net of tax: | 38,896 | (22,816) | 8,426 |
Comprehensive income | $ 138,497 | $ 60,379 | $ 70,813 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated Statements of Comprehensive Income. | |||
Tax expense (benefit) on unrealized holding gains (losses) during the period | $ 10,964 | $ (5,387) | $ 6,027 |
Tax expense on reclassification adjustment for gains included in net income | $ (625) | $ (678) | $ (2,112) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss), Net of Taxes | Retained Earnings | Treasury Stock | Total |
Balance at Dec. 31, 2016 | $ 174 | $ 184,549 | $ 15,843 | $ 553,995 | $ (83,835) | $ 670,726 |
Net income | 62,387 | 62,387 | ||||
Unrealized gains (losses) on securities available for sale, net of deferred federal income taxes | 8,426 | 8,426 | ||||
Restricted share awards issued | 1 | 362 | 363 | |||
Recognition of employee share-based compensation, net of deferred federal income taxes | 4,803 | 4,803 | ||||
Dividends paid and accrued | (45,689) | (45,689) | ||||
Balance at Dec. 31, 2017 | 175 | 189,714 | 24,269 | 570,693 | (83,835) | 701,016 |
Reclassification of certain tax effects from accumulated other comprehensive income at January 1, 2018 | 4,736 | (4,736) | ||||
Net income | 83,195 | 83,195 | ||||
Unrealized gains (losses) on securities available for sale, net of deferred federal income taxes | (22,816) | (22,816) | ||||
Restricted share awards issued | 1 | 375 | 376 | |||
Recognition of employee share-based compensation, net of deferred federal income taxes | 6,203 | 6,203 | ||||
Dividends paid and accrued | (49,330) | (49,330) | ||||
Balance at Dec. 31, 2018 | 176 | 196,292 | (10,706) | 616,717 | (83,835) | 718,644 |
Cumulative effect of adoption of updated accounting guidance for equity financial instruments at January 1, 2018 | (16,895) | 16,895 | ||||
Net income | 99,601 | 99,601 | ||||
Unrealized gains (losses) on securities available for sale, net of deferred federal income taxes | 38,896 | 38,896 | ||||
Restricted share awards issued | 1 | 462 | 463 | |||
Recognition of employee share-based compensation, net of deferred federal income taxes | 5,567 | 5,567 | ||||
Dividends paid and accrued | (52,392) | (52,392) | ||||
Balance at Dec. 31, 2019 | $ 177 | $ 202,321 | $ 28,190 | 661,553 | $ (83,835) | 808,406 |
Cumulative effect of adoption of updated accounting guidance for callable debt securities at January 1, 2019 | $ (2,373) | $ (2,373) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | |||
Net income | $ 99,601 | $ 83,195 | $ 62,387 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Investment amortization, net | 4,922 | 5,273 | 6,962 |
Fixed Asset depreciation, net | 5,485 | 5,467 | 5,037 |
Stock based compensation | 6,030 | 6,579 | 5,166 |
Provision (credit) for deferred income taxes | 4,757 | (5,600) | 2,085 |
Net realized gains on investments | (2,976) | (3,226) | (6,036) |
Net impairment losses on investments | 889 | 228 | 256 |
Earnings from partnership investments | (904) | (650) | (2,082) |
Change in net unrealized gains on equity investments | (21,454) | 16,324 | |
Changes in assets and liabilities: | |||
Accounts receivable | (3,307) | 587 | (2,953) |
Accrued investment income | 16 | 456 | (18) |
Receivable from reinsurers | (11,602) | (14,228) | 5,367 |
Ceded unearned premiums | (1,208) | (1,799) | (3,590) |
Deferred policy acquisition costs | (932) | (1,153) | (1,206) |
Taxes recoverable | (1,003) | 908 | (908) |
Other assets | (1,864) | 2,565 | (5,400) |
Loss and loss adjustment expense reserves | 25,847 | 10,665 | 13,733 |
Unearned premium reserves | 6,839 | 7,123 | 10,224 |
Taxes payable | (6,090) | 6,090 | (1,110) |
Accounts payable and accrued liabilities | 3,395 | 10,678 | (6,333) |
Payable to reinsurers | 691 | (1,581) | 299 |
Other liabilities | 5,324 | (210) | 160 |
Net cash provided by operating activities | 112,456 | 127,691 | 82,040 |
Cash flows from investing activities: | |||
Fixed maturities purchased | (219,875) | (304,654) | (205,226) |
Equity securities purchased | (28,586) | (66,832) | (27,440) |
Other invested assets purchased | (14,794) | (6,648) | (7,492) |
Proceeds from sales and paydowns of fixed maturities | 135,119 | 217,221 | 151,071 |
Proceeds from maturities, redemptions, and calls of fixed maturities | 58,676 | 63,628 | 37,868 |
Proceed from sales of equity securities | 23,966 | 18,654 | 34,664 |
Proceeds from other invested assets redeemed | 2,124 | 6,810 | 7,589 |
Fixed assets purchased | (9,594) | (11,183) | (5,958) |
Net cash used for investing activities | (52,964) | (83,004) | (14,924) |
Cash flows from financing activities: | |||
Dividends paid to shareholders | (52,667) | (48,813) | (45,460) |
Net cash used for financing activities | (52,667) | (48,813) | (45,460) |
Net increase (decrease) in cash and cash equivalents | 6,825 | (4,126) | 21,656 |
Cash and cash equivalents at beginning of year | 37,582 | 41,708 | 20,052 |
Cash and cash equivalents at end of period | 44,407 | 37,582 | 41,708 |
Supplemental disclosure of cash flow information: | |||
Federal and state income taxes | 26,780 | 20,115 | 23,721 |
Interest | $ 75 | $ 75 | $ 75 |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 2019 | |
Basis of Presentation | |
Basis of Presentation | 1. Basis of Presentatio n The consolidated financial statements have been prepared on the basis of accounting principles generally accepted in the United States of America (“GAAP”). The consolidated financial statements include Safety Insurance Group, Inc. and its subsidiaries (the “Company”). The subsidiaries consist of Safety Insurance Company, Safety Indemnity Insurance Company, Safety Property and Casualty Insurance Company, Safety Asset Management Corporation (“SAMC”), and Safety Management Corporation, which is SAMC’s holding company. All intercompany transactions have been eliminated. The Company was incorporated on June 25, 2001 in the State of Delaware. On October 16, 2001, the Company acquired all of the issued and outstanding common stock of Thomas Black Corporation (“TBC”) and its property and casualty subsidiaries. TBC subsequently merged with and into Safety Insurance Group, Inc. with Safety Insurance Group, Inc. being the corporation surviving the merger. The Company is a leading provider of property and casualty insurance focused primarily on the Massachusetts market. The Company’s principal product line is private passenger automobile insurance, which accounted for 54.8% of its direct written premiums in 2019. The Company operates through its insurance company subsidiaries, Safety Insurance Company, Safety Indemnity Insurance Company, and Safety Property and Casualty Insurance Company (together referred to as the “Insurance Subsidiaries”). The Insurance Subsidiaries began writing private passenger automobile and homeowners insurance in New Hampshire during 2008, personal umbrella insurance in New Hampshire during 2009, and commercial automobile insurance in New Hampshire during 2011. The Insurance Subsidiaries began writing all of these lines of business in Maine during 2016. Management has assessed and concluded that there were no conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the financial statements were issued. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Investments Investments in fixed maturities, which include taxable and non-taxable bonds and redeemable preferred stocks, are reported at fair value. Investments in equity securities, which include interests in common stocks, mutual funds and a real estate investment trust (“REIT”), are reported at fair value. Fair values for fixed maturity securities are based on estimates obtained from independent pricing services. Fair values for equity securities are derived from external market quotations, with the exception of the REIT whose fair value was determined using the trust’s net asset value obtained from its audited financial statements. Short-term investments, which consist of U.S. Treasury securities, are reported at amortized cost, which approximates fair value. Other long-term investments consist of investments in limited partnerships. The partnership interest is accounted for using the equity method of accounting and recorded in earnings from partnership investments. The carrying value of this investment is written down, or impaired, to fair value when a decline in value is considered to be other-than-temporary. In applying the equity method (including assessment for other-than-temporary impairment), the Company uses financial information provided by the investee, generally on a three month lag. Unrealized gains or losses on fixed maturity securities reported at fair value are excluded from earnings and reported in a separate component of shareholders’ equity, known as “Accumulated other comprehensive income (loss), net of taxes,” until realized. Changes in unrealized gains or losses on equity securities are recognized in earnings. Realized gains or losses on the sale or maturity of investments are determined based on the specific cost identification method. Fixed maturities and equity securities that experience declines in value that are other-than-temporary are written down to fair value with a corresponding charge to net impairment losses on investments. Investment income is recognized on an accrual basis of accounting. Bonds not backed by other loans are amortized using the interest method. Loan-backed bonds and structured securities are amortized using the interest method and significant changes in estimated cash flows from the original purchase assumptions are accounted for using the retrospective method. Cash and Cash Equivalents Cash and cash equivalents includes money market accounts and United States (“U.S.”) Treasury bills with original maturities of three months or less from the date of purchase. U.S. Treasury bills are stated at amortized cost, which approximates fair value. Accounts Receivable Amounts included in accounts receivable represent premiums as well as finance charges, the majority of which are billed on a monthly installment basis. Accounts receivable are stated net of allowances for doubtful accounts. At December 31, 2019 and 2018, these allowances were $578 and $482, respectively. Uncollected premium balances over ninety days past due are written off. Deferred Policy Acquisition Costs Amounts that vary with and are primarily related to the successful acquisition of a new or renewal insurance contract, principally commissions and premium taxes, are deferred and amortized ratably over the effective period of the policy. All other acquisition expenses are expensed as incurred. Deferred policy acquisition costs are reviewed to determine if they are recoverable from future income, and if not, are charged to expense. Future investment income attributable to related premiums is not taken into account in measuring the recoverability of the carrying value of this asset. Amortization of acquisition costs in the amount of $147,945, $146,601, and $144,703 were charged to underwriting, operating and other expenses for the years ended 2019, 2018 and 2017, respectively. Equity and Deposits in Pools Equity and deposits in pools represents the net receivable amounts from the residual market mechanisms, Commonwealth Automobile Reinsurers (“CAR”) for automobile and Massachusetts Property Insurance Underwriting Association (“FAIR Plan”) for homeowner insurance in Massachusetts. See Note 10 for a discussion of the Company’s accounting for amounts assumed from residual markets. Equipment and Leasehold Improvements Property, equipment, leasehold improvements, and software which are included in other assets are carried at cost less accumulated depreciation. Depreciation is provided using the straight- line or accelerated method over the estimated useful lives of the related assets, which range from 3 to 10 years. Amortization of leasehold improvements is provided using the straight-line method over the term of the lease. The costs of computer software developed or obtained for internal use are capitalized and amortized over the estimated life of the business system, beginning when the software is ready for its intended use. Maintenance and repairs are charged to expense as incurred. Losses and Loss Adjustment Expenses Liabilities for losses and loss adjustment expenses (“LAE”) include case basis estimates for open claims reported prior to year- end and estimates of unreported claims and claim adjustment expenses, net of salvage and subrogation. The estimates are continually reviewed and modified to reflect current conditions, and any resulting adjustments are reflected in current operating results. Adjustments for anticipated salvage and subrogation are recorded on incurred and reported and incurred but not reported losses. The Company determines its loss and LAE reserves estimate based upon the analysis of our actuaries. A reasonable estimate is derived by selecting a point estimate within a range of indications as calculated by our actuaries using generally accepted actuarial techniques. The key assumption in most actuarial analysis is that past patterns of frequency and severity will repeat in the future, unless a significant change in the factors described above takes place. Our key factors and resulting assumptions are the ultimate frequency and severity of claims, based upon the most recent ten years of claims reported to the Company, and the data reported to us to calculate our share of the residual market. For each accident year and each coverage within a line of business our actuaries calculate the ultimate losses incurred. Premiums and Unearned Premiums Premiums are earned over the terms of the respective policies, which are generally one year. Unearned premiums represent the portion of premiums written applicable to the unexpired terms of the policies. Ceded premiums are charged to income over the terms of the respective policies and the applicable term of the reinsurance contracts with third-party reinsurers. Ceded unearned premiums represent the unexpired portion of premiums ceded to CAR and other reinsurers. Premiums received in advance of the policy effective date are recorded as a liability and not recognized as income until earned. Such amounts are included in accounts payable and accrued liabilities and totaled $14,628 and $14,649 at December 31, 2019 and 2018, respectively. Reinsurance Liabilities for unearned premiums and unpaid losses are stated before deductions for ceded reinsurance. The ceded amounts are carried as receivables. Earned premiums are stated net of deductions for ceded reinsurance. The Company, as primary insurer, will be required to pay losses in their entirety in the event that the reinsurers are unable to discharge their obligations under the reinsurance agreements. Advertising Costs Advertising costs are charged to expense when they are incurred. Total advertising costs were $2,182, $2,500 and $2,216 for the years ended December 31, 2019, 2018, and 2017, respectively. Finance and Other Service Income Finance and other service income primarily include revenues from premium installment charges, which are recognized when earned. Income Taxes The Company and its subsidiaries file a consolidated U.S. federal income tax return. The method of allocation among members of the consolidated group is subject to a written agreement approved by the Board of Directors (the “Board”). The consolidated tax liability is allocated on the basis of the members’ proportionate contribution to consolidated taxable income. Deferred income taxes are generally recognized when assets and liabilities have different values for financial statement and tax reporting purposes, and for other temporary taxable and deductible differences as defined by Accounting Standards Codification (“ASC”) 740, Income Taxes. On December 22, 2017, the TCJA was enacted, which significantly amends the Internal Revenue Code of 1986. The TCJA, among other things, reduced the corporate tax rate from a statutory rate of 35% to 21%, imposes additional limitations on net operating losses and executive compensation, allows for the full expensing of certain capital expenditures, and enacts other changes impacting the insurance industry. Earnings per Weighted Average Common share Basic earnings per weighted average common share (“EPS”) are calculated by dividing net income by the weighted average number of basic common shares outstanding during the period. Diluted earnings per share amounts are based on the weighted average number of common shares including non-vested performance stock grants. The following table sets forth the computation of basic and diluted EPS for the periods indicated. Years Ended December 31, 2019 2018 2017 Earnings attributable to common shareholders - basic and diluted: Net income from continuing operations $ 99,601 $ 83,195 $ 62,387 Allocation of income for participating shares (523) (496) (392) Net income from continuing operations attributed to common shareholders $ 99,078 $ 82,699 $ 61,995 Earnings per share denominator - basis and diluted Total weighted average common shares outstanding, including participating shares 15,281,363 15,170,754 15,105,558 Less: weighted average participating shares (80,231) (90,485) (94,807) Basic earnings per share denominator 15,201,132 15,080,269 15,010,751 Common equivalent shares- stock options — — — Common equivalent shares- non-vested performance stock grants 136,675 149,629 124,597 Diluted earnings per share denominator 15,337,807 15,229,898 15,135,348 Basic earnings per share $ 6.52 $ 5.48 $ 4.13 Diluted earnings per share $ 6.46 $ 5.43 $ 4.10 Undistributed earnings attributable to common shareholders - basic and diluted: Net income from continuing operations attributable to common shareholders -Basic $ 6.52 $ 5.48 $ 4.13 Dividends declared (3.40) (3.20) (3.00) Undistributed earnings $ 3.12 $ 2.28 $ 1.13 Net income from continuing operations attributable to common shareholders -Diluted $ 6.46 $ 5.43 $ 4.10 Dividends declared (3.40) (3.20) (3.00) Undistributed earnings $ 3.06 $ 2.23 $ 1.10 Diluted EPS excludes non vested performance stock grants with exercise prices and exercise tax benefits greater than the average market price of the Company’s common stock during the period because their inclusion would be anti-dilutive. There were no anti-dilutive stock options or non-vested performance stock grants for the years ended December 31, 2019 and 2018. Share-Based Compensation Accounting Standards Codification (“ASC”) 718, Compensation —Stock Compensation requires the Company to measure and recognize the cost of employee services received in exchange for an award of equity instruments. Under the provisions of ASC 718, share-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period (generally the vesting period of the equity grant). See Note 6 for further information regarding share-based compensation. Use of Estimates 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 and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Recent Accounting Pronouncements On March 20, 2019, the SEC adopted amendments to Regulation S-K and related rules and forms to modernize and simplify certain disclosure requirements for public companies. The amendments are intended to reduce the costs and burdens of the disclosure process and while continuing to require disclosure of all material information. The amended rules generally were effective on May 2, 2019 and reduced disclosures but some provisions added new requirements. The adoption of the new rules did not have a material impact on the Company’s financial position, results of operations, cash flows, or disclosures. On August 17, 2018, the SEC adopted amendments to eliminate, integrate, update or modify certain of its disclosure requirements. The amendments which are focused on disclosure requirements that have become redundant, duplicative, overlapping, outdated, or superseded, are intended to facilitate the disclosure of information to investors and simplify compliance without significantly altering the total mix of information provided to investors. The amended rules generally reduce disclosures but some provisions added new disclosure requirements. The amendments were effective November 5, 2018. The adoption of the new rules did not have a material In February 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In March 2017, the FASB issued ASU 2017-08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities In August 2016, the FASB issued ASU 2016-15 , Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Statements operations with regard to potential credit losses on its Available For Sale investment portfolio and reinsurance recoverables and determined that the impact of adoption will not be material. In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting In February 2016, the FASB issued ASU 2016-02, Leases Codification Improvements to Topic 842, Leases Leases (Topic 842): Targeted Improvements In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities In May 2014, the FASB issued as final, ASU 2014-09, Revenue from Contracts with Customers (Topic 606) entity should recognize revenue 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. The update was effective for interim and annual reporting periods in fiscal years beginning after December 15, 2017. ASU 2014-09 allows for the use of either the retrospective or modified retrospective approach of adoption. The Company adopted the updated guidance effective January 1, 2018 using the modified retrospective approach. The adoption of ASU 2014-09 did not have a material impact on the Company’s financial position, results of operations, cash flows, or disclosures. Segments Segment Reporting, |
Investments
Investments | 12 Months Ended |
Dec. 31, 2019 | |
Investments | |
Investments | 3. Investments The gross unrealized gains and losses on investments in fixed maturity securities, including redeemable preferred stocks that have characteristics of fixed maturities, and equity securities, including interests in mutual funds, and other invested assets, were as follows for the periods indicated. As of December 31, 2019 Gross Unrealized Losses (3) Cost or Gross Non-OTTI OTTI Estimated Amortized Unrealized Unrealized Unrealized Fair Cost Gains Losses Losses (4) Value U.S. Treasury securities $ 1,504 $ 8 $ — $ — $ 1,512 Obligations of states and political subdivisions 241,597 9,799 — — 251,396 Residential mortgage-backed securities (1) 301,503 6,608 (909) — 307,202 Commercial mortgage-backed securities 106,902 3,233 (397) — 109,738 Other asset-backed securities 36,068 218 (64) — 36,222 Corporate and other securities 504,783 18,455 (1,268) — 521,970 Subtotal, fixed maturity securities 1,192,357 38,321 (2,638) — 1,228,040 Equity securities (2) 151,121 27,879 (1,363) — 177,637 Other invested assets (5) 37,278 — — — 37,278 Totals $ 1,380,756 $ 66,200 $ (4,001) $ — $ 1,442,955 As of December 31, 2018 Gross Unrealized Losses (3) Cost or Gross Non-OTTI OTTI Estimated Amortized Unrealized Unrealized Unrealized Fair Cost Gains Losses Losses (4) Value U.S. Treasury securities $ 1,807 $ — $ (30) $ — $ 1,777 Obligations of states and political subdivisions 262,772 5,098 (1,672) — 266,198 Residential mortgage-backed securities (1) 300,387 1,477 (4,841) — 297,023 Commercial mortgage-backed securities 60,897 337 (898) — 60,336 Other asset-backed securities 61,310 95 (329) — 61,076 Corporate and other securities 488,240 1,775 (14,563) — 475,452 Subtotal, fixed maturity securities 1,175,413 8,782 (22,333) — 1,161,862 Equity securities (2) 142,948 15,419 (10,356) — 148,011 Other invested assets (5) 23,481 — — — 23,481 Totals $ 1,341,842 $ 24,201 $ (32,689) $ — $ 1,333,354 (1) Residential mortgage-backed securities consists primarily of obligations of U.S. Government agencies including collateralized mortgage obligations issued, guaranteed and/or insured by the following issuers: Government National Mortgage Association (GNMA), Federal Home Loan Mortgage Corporation (FHLMC), Federal National Mortgage Association (FNMA) and the Federal Home Loan Bank (FHLB). (2) Equity securities include common stock, preferred stock, mutual funds and interests in mutual funds held to fund the Company’s executive deferred compensation plan. (3) The Company’s investment portfolio included 229 and 958 securities in an unrealized loss position at December 31, 2019 and December 31, 2018, respectively. (4) Amounts in this column represent other-than-temporary impairment (“OTTI”) recognized in accumulated other comprehensive (loss) income. (5) Other invested assets are accounted for under the equity method which approximates fair value. The amortized cost and the estimated fair value of fixed maturity securities, by maturity, are shown below for the period indicated. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. As of December 31, 2019 Amortized Estimated Cost Fair Value Due in one year or less $ 46,850 $ 47,146 Due after one year through five years 309,662 317,821 Due after five years through ten years 306,656 321,000 Due after ten years through twenty years 83,872 87,952 Due after twenty years 846 961 Asset-backed securities 444,471 453,160 Totals $ 1,192,357 $ 1,228,040 The gross realized gains and losses on sales of investments were as follows for the periods indicated. Years Ended December 31, 2019 2018 2017 Gross realized gains Fixed maturity securities $ 1,294 $ 1,022 $ 1,468 Equity securities 4,536 5,129 5,244 Gross realized losses Fixed maturity securities (1,805) (1,878) (504) Equity securities (1,049) (1,047) (172) Net realized gains on investments $ 2,976 $ 3,226 $ 6,036 In the normal course of business, the Company enters into transactions involving various types of financial instruments, including investments in fixed maturities and equity securities. Investment transactions have credit exposure to the extent that a counter party may default on an obligation to the Company. Credit risk is a consequence of carrying, trading and investing in securities. To manage credit risk, the Company focuses on higher quality fixed income securities, reviews the credit strength of all companies in which it invests, limits its exposure in any one investment and monitors the portfolio quality, taking into account credit ratings assigned by recognized statistical rating organizations. The following tables as of December 31, 2019 and 2018 present the gross unrealized losses included in the Company’s investment portfolio and the fair value of those securities aggregated by investment category. The tables also present the length of time that they have been in a continuous unrealized loss position. As of December 31, 2019 Less than 12 Months 12 Months or More Total Estimated Unrealized Estimated Unrealized Estimated Unrealized Fair Value Losses Fair Value Losses Fair Value Losses U.S. Treasury securities $ — $ — $ — $ — $ — $ — Obligations of states and political subdivisions — — — — — — Residential mortgage-backed securities 61,933 409 31,655 500 93,588 909 Commercial mortgage-backed securities 36,398 397 866 — 37,264 397 Other asset-backed securities 21,281 64 462 — 21,743 64 Corporate and other securities 26,386 481 13,718 787 40,104 1,268 Subtotal, fixed maturity securities 145,998 1,351 46,701 1,287 192,699 2,638 Equity securities 8,849 391 14,143 972 22,992 1,363 Total temporarily impaired securities $ 154,847 $ 1,742 $ 60,844 $ 2,259 $ 215,691 $ 4,001 As of December 31, 2018 Less than 12 Months 12 Months or More Total Estimated Unrealized Estimated Unrealized Estimated Unrealized Fair Value Losses Fair Value Losses Fair Value Losses U.S. Treasury securities $ — $ — $ 1,777 $ 30 $ 1,777 $ 30 Obligations of states and political subdivisions 80,856 707 16,049 965 96,905 1,672 Residential mortgage-backed securities 64,101 694 138,572 4,147 202,673 4,841 Commercial mortgage-backed securities 22,652 270 13,117 628 35,769 898 Other asset-backed securities 33,866 112 23,532 217 57,398 329 Corporate and other securities 288,786 10,149 87,546 4,414 376,332 14,563 Subtotal, fixed maturity securities 490,261 11,932 280,593 10,401 770,854 22,333 Equity securities 71,439 9,955 2,072 401 73,511 10,356 Total temporarily impaired securities $ 561,700 $ 21,887 $ 282,665 $ 10,802 $ 844,365 $ 32,689 Other-Than-Temporary Impairments ASC 320, Investments—Debt and Equity Securities The Company holds no subprime mortgage debt securities. All of the Company’s holdings in mortgage-backed securities are either U.S. Government or Agency guaranteed or are rated investment grade by either Moody’s or Standard & Poor’s. The unrealized losses in the Company’s fixed income and equity portfolio as of December 31, 2019 were reviewed for potential other-than-temporary asset impairments. The Company reviews securities with a material (20% or greater) unrealized loss for four or more consecutive quarters that additionally had certain qualitative factors that led to an impairment charge. As a result of our analysis, during the year ended December 31, 2019, the Company recognized $889 of OTTI losses which consisted entirely of credit losses related to fixed maturity securities. During the year ended December 31, 2018, the Company recognized $228 of OTTI losses which consisted entirely of credit losses related to fixed maturity securities. Specific qualitative analysis was also performed for any additional securities appearing on the Company’s “Watch List.” Qualitative analysis considered such factors as the financial condition and the near term prospects of the issuer, whether the debtor is current on its contractually obligated interest and principal payments, changes to the rating of the security by a rating agency and the historical volatility of the fair value of the security. The qualitative analysis performed by the Company concluded that outside of the securities that were recognized through OTTI, the unrealized losses recorded on the investment portfolio at December 31, 2019 resulted from fluctuations in market interest rates and other temporary market conditions as opposed to fundamental changes in the credit quality of the issuers of such securities. Therefore, decreases in fair values of the Company’s securities are viewed as being temporary. The following table summarizes the credit loss recognized in earnings related to fixed maturity securities: Years Ended December 31, 2019 2018 2017 Credit losses on fixed maturity securities, beginning of period $ 844 $ 892 $ 1,094 Add: credit losses on OTTI not previously recognized 889 228 256 Less: credit losses on securities sold (1,064) (276) (458) Less: credit losses on securities impaired due to intent to sell — — — Add: credit losses on previously impaired securities — — — Less: increases in cash flows expected on previously impaired securities — — — Credit losses on fixed maturity securities, end of period $ 669 $ 844 $ 892 At December 31, 2019 and December 31, 2018, there were no amounts included in accumulated other comprehensive income (loss) related to securities which were considered by the Company to be other-than-temporarily impaired. Based upon the qualitative analysis performed, the Company’s decision to hold these securities, the Company’s current level of liquidity and its positive operating cash flows, management believes it is more likely than not that it will not be required to sell any of its securities before the anticipated recovery in the fair value to its amortized cost basis. Net Investment Income The components of net investment income were as follows for the periods indicated. Years Ended December 31, 2019 2018 2017 Interest on fixed maturity securities $ 42,892 $ 40,988 $ 37,246 Dividends on equity securities 5,268 4,500 3,093 Equity in earnings of other invested assets 1,552 1,182 1,016 Interest on other assets 32 62 89 Total Investment Income 49,744 46,732 41,444 Investment expenses 3,079 2,944 2,686 Net investment income $ 46,665 $ 43,788 $ 38,758 |
Equipment and Leasehold Improve
Equipment and Leasehold Improvements | 12 Months Ended |
Dec. 31, 2019 | |
Equipment and Leasehold Improvements | |
Equipment and Leasehold Improvements | 4. Equipment and Leasehold Improvements The carrying value of equipment and leasehold improvements by classification was as follows for the periods indicated. As of December 31, 2019 2018 Software $ 42,516 $ 36,161 Computer equipment 12,412 9,195 Leasehold improvements 8,264 8,264 Other equipment 3,132 3,116 Furniture and fixtures 4,134 4,129 Total cost 70,458 60,865 Less accumulated depreciation and amortization 50,447 45,281 Equipment and leasehold improvements, net $ 20,011 $ 15,584 |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2019 | |
Employee Benefit Plan | |
Employee Benefit Plan | 5. Employee Benefit Plan |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-Based Compensation | |
Share-Based Compensation | 6. Share-Based Compensation 2018 Long Term Incentive Plan On April 2, 2018, the Company’s Board of Directors adopted the Safety Insurance Group, Inc. 2018 Long-Term Incentive Plan (“the 2018 Plan”), which was subsequently approved by our shareholders at the 2018 Annual Meeting of Shareholders. The 2018 Plan enables the grant of stock awards, performance shares, cash-based performance units, other stock-based awards, stock options, stock appreciation rights, and stock unit awards, each of which may be granted separately or in tandem with other awards. Eligibility to participate includes officers, directors, employees and other individuals who provide bona fide services to the Company. The 2018 Plan supersedes the Company’s 2002 Management Omnibus Incentive Plan (“the 2002 Incentive Plan”). The 2018 Plan establishes an initial pool of 350,000 shares of common stock available for issuance to our employees and other eligible participants. The Board of Directors and the Compensation Committee intend to issue awards under the 2018 Plan in the future. The maximum number of shares of common stock between both the 2018 Plan and 2002 Incentive Plan with respect to which awards may be granted is 2,850,000. No further grants will be allowed under the 2002 Incentive Plan. At December 31, 2019, there were 293,031 shares available for future grant. Restricted Stock Service-based restricted stock awarded in the form of unvested shares is recorded at the market value of the Company’s common stock on the grant date and amortized ratably as compensation expense over the requisite service period. Service-based restricted stock awards generally vest over a second service period and independent directors’ stock awards which vest immediately. Our independent directors are subject to stock ownership guidelines, which require them to have a value equal to four times their annual cash retainer. In addition to service-based awards, the Company grants performance-based restricted shares to certain employees. These performance shares cliff vest after a three-year performance period provided certain performance measures are attained. A portion of these awards, which contain a market condition, vest according to the level of total shareholder return achieved by the Company compared to its property-casualty insurance peers over a three-year period. The remainder, which contain a performance condition, vest according to the level of Company’s combined ratio results compared to a target based on its property-casualty insurance peers. Actual payouts can range from 0% to 200% of target shares awarded depending upon the level of achievement of the respective market and performance conditions during a three calendar-year performance period. Compensation expense for share awards with a performance condition is based on the probable number of awards expected to vest using the performance level most likely to be achieved at the end of the performance period. Performance-based awards with market conditions are accounted for and measured differently from awards that have a performance or service condition. The effect of a market condition is reflected in the award’s fair value on the grant date. That fair value is recognized as compensation cost over the requisite service period regardless of whether the market-based performance objective has been satisfied. All of the Company’s restricted stock awards are issued as incentive compensation and are equity classified. The following table summarizes restricted stock activity under the Incentive Plan assuming a target payout for the performance-based shares. Years Ended December 31, 2019 2018 2017 Shares Weighted Shares Weighted Shares Weighted Under Average Under Average Under Average Restriction Fair Value Restriction Fair Value Restriction Fair Value Outstanding at beginning of year 89,135 $ 68.70 93,086 $ 63.13 95,493 $ 55.86 Granted 33,778 92.52 39,451 75.05 40,226 73.42 Vested and unrestricted (44,085) 68.41 (43,276) 62.46 (42,453) 56.56 Forfeited (626) 75.50 (126) 70.63 (180) 63.87 Outstanding at end of period 78,202 $ 79.09 89,135 $ 68.70 93,086 $ 63.13 Years Ended December 31, 2019 2018 2017 Performance-based Weighted Performance-based Weighted Performance-based Weighted Shares Under Average Shares Under Average Shares Under Average Restriction Fair Value Restriction Fair Value Restriction Fair Value Outstanding at beginning of year 105,170 $ 66.79 105,660 $ 62.75 94,610 $ 57.60 Granted (1) 63,447 69.61 31,832 75.14 29,829 74.96 Vested and unrestricted (84,512) 56.42 (27,801) 61.50 (18,259) 53.99 Forfeited — — (4,521) 62.41 (520) 53.99 Outstanding at end of period 84,105 $ 79.34 105,170 $ 66.79 105,660 $ 62.75 (1) Includes a true-up of previously awarded performance-based restricted share awards. The updated shares were calculated based on the attainment of pre-established performance objectives. As of December 31, 2019, there was $6,119 of unrecognized compensation expense related to non-vested restricted stock awards that is expected to be recognized over a weighted average period of 1.5 years. The total fair value of the shares that were vested and unrestricted during the years ended December 31, 2019, 2018, and 2017 was $7,784, $4,413 and $3,387, respectively. For the years ended December 31, 2019, 2018, and 2017, the Company recorded compensation expense related to awards under the Incentive Plan of $4,764, $5,197, and $3,358, net of income tax benefit of $1,266, $1,382, and $1,808, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | 7. Commitments and Contingencies Commitments As part of the Company’s investment activity, we have committed $80,000 to investments in limited partnerships. The Company has contributed $49,587 to these commitments as of December 31, 2019. As of December 31, 2019, the remaining committed capital that could be called is $32,721, which includes potential recallable capital distributions. Contingencies Various claims, generally incidental to the conduct of normal business, are pending or alleged against the Company from time to time. In the opinion of management, based in part on the advice of legal counsel, the ultimate resolution of such claims will not have a material adverse effect on the Company’s consolidated financial statements. However, if estimates of the ultimate resolutions of those proceedings are revised, liabilities related to those proceedings could be adjusted in the near term. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases | |
Leases | 8. Leases The Company has various non-cancelable, long-term operating leases, the largest of which are for office space including the corporate headquarters, VIP claims centers and law offices. Other operating leases consist of auto leases and various office equipment. The Company has no finance leases. Our leases have remaining lease terms of Certain lease agreements contain renewal options and, in addition to the minimum annual rentals, generally provide for payment of a share of the real estate taxes and operating expenses in excess of a base amount. Rental expense for our office space, law offices and VIP claims centers was $4,573, $3,531 and $4,557 for the years ended December 31, 2019, 2018, and 2017, respectively. All leases expire prior to 2029. The Company expects that in the normal course of business, leases that expire will be renewed. The Company adopted ASU 2016-02, ASU 2018-10 and ASU 2018-11 effective January 1, 2019 (“the application date”) using the required modified retrospective transition approach. In accordance with the guidance, the Company has elected not to adjust comparative periods. As such ASC 842 will be applied to each lease that had commenced as of the application date with a cumulative effect adjustment as of that date. All periods before the application date presented in the financial statements will not change and the guidance in ASC 840 will apply. The Company has of practical expedients provided in ASC 842 to all leases. In addition, the Company has Year Ended December 31, 2019 Operating lease cost $ 4,645 Other information related to leases was as follows: Year Ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 5,082 Weighted average remaining lease term Operating leases 8.42 Years Weighted average discount rate Operating leases 2.39% Maturities of lease liabilities were as follows: Operating Leases 2020 $ 4,998 2021 4,798 2022 4,270 2023 3,879 2024 3,875 Thereafter 15,405 Total lease payments 37,225 Less imputed interest (3,227) Total $ 33,998 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt | |
Debt | 9. Debt On August 10, 2018, the Company extended its Revolving Credit Agreement (the “Credit Agreement”) with Citizens Bank, N.A. (formerly known as RBS Citizens, N.A. (“Citizens Bank”)) to a maturity date of August 10, 2023. The Credit Agreement provides a $30,000 revolving credit facility with an accordion feature allowing for future expansion of the committed amount up to $50,000 . Loans under the credit facility bear interest at the Company’s option at either (i) the LIBOR rate plus 1.25% per annum or (ii) the higher of Citizens Bank prime rate or 0.5% above the federal funds rate plus 1.25% per annum. Interest only is payable prior to maturity. The Company’s obligations under the credit facility are secured by pledges of its assets and the capital stock of its operating subsidiaries. The credit facility is guaranteed by the Company’s non-insurance company subsidiaries. The credit facility contains covenants including requirements to maintain minimum risk-based capital ratios and statutory surplus of Safety Insurance Company as well as limitations or restrictions on indebtedness, liens, and other matters. As of December 31, 2019, the Company was in compliance with all covenants. In addition, the credit facility includes customary events of default, including a cross-default provision permitting the lenders to accelerate the facility if the Company (i) defaults in any payment obligation under debt having a principal amount in excess of $10,000 or (ii) fails to perform any other covenant permitting acceleration of all such debt. The Company had no amounts outstanding on its credit facility at December 31, 2019 or 2018. The credit facility commitment fee included in interest expense was computed at a rate of 0.25% per annum on the $30,000 commitment at December 31, 2019 and 2018. The Company is a member of the Federal Home Loan Bank of Boston (“FHLB-Boston”). Membership in the FHLB-Boston allows the Company to borrow money at competitive interest rates provided the loan is collateralized by specific U.S Government residential mortgage backed securities. At December 31, 2019, the Company has the ability to borrow approximately $289,507 using eligible invested assets that would be used as collateral. The Company has no amounts outstanding from the FHLB-Boston at December 31, 2019. |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2019 | |
Reinsurance | |
Reinsurance | 10. Reinsurance The Company cedes insurance to CAR and to other reinsurers. The Company has a property catastrophe excess of loss agreement and a casualty excess of loss agreement that qualify as reinsurance treaties and are designed to protect against large or unusual loss and LAE activity. Reinsurance contracts do not relieve the Company from its obligations to policyholders. Failure of reinsurers to honor their obligations could result in losses to the Company. The Company evaluates the financial condition of its reinsurers and monitors economic characteristics of the reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. The Company is subject to concentration of credit risk with respect to reinsurance ceded. At December 31, 2019, reinsurance receivables on paid and unpaid loss and LAE with a carrying value of $130,005 and ceded unearned premiums of $33,587 were associated with CAR. At December 31, 2018, reinsurance receivables on paid and unpaid loss and LAE with a carrying value of $113,544 and ceded unearned premiums of $32,447 were associated with CAR. The Company assumes a proportionate share of the obligations from CAR. The Company makes an estimate of its share of assumed activity from the most recent quarter reported by CAR and records adjustments to the reported activity to reflect its anticipated final assumed obligations. The Company’s participation in CAR resulted in assumed net losses of $3,595, $5,362 and $5,444 for the years ended December 31, 2019, 2018 and 2017, respectively. CAR has been, with few exceptions, required by law to issue a policy to any applicant who seeks it. As a servicing carrier of CAR, this requirement has applied to the Company. The effect of assumed and ceded premiums on net written and earned premiums and losses and LAE incurred is as follows. Years Ended December 31, 2019 2018 2017 Written Premiums Direct $ 852,404 $ 843,675 $ 827,316 Assumed 32,391 32,403 34,214 Ceded (90,386) (89,166) (80,476) Net written premiums $ 794,409 $ 786,912 $ 781,054 Earned Premiums Direct $ 845,102 $ 836,759 $ 818,804 Assumed 32,853 32,196 32,502 Ceded (89,178) (87,368) (76,886) Net earned premiums $ 788,777 $ 781,587 $ 774,420 Loss and LAE Direct $ 562,192 $ 538,569 $ 517,146 Assumed 28,529 28,815 28,003 Ceded (80,875) (81,871) (41,262) Net loss and LAE $ 509,846 $ 485,513 $ 503,887 |
Loss and Loss Adjustment Expens
Loss and Loss Adjustment Expense Reserves | 12 Months Ended |
Dec. 31, 2019 | |
Loss and Loss Adjustment Expense Reserves | |
Loss and Loss Adjustment Expense Reserves | 11. Loss and Loss Adjustment Expense Reserves The following table sets forth a reconciliation of beginning and ending reserves for losses and loss adjustment expenses (“LAE”), as shown in the Company’s consolidated financial statements for the periods indicated. Year Ended December 31, 2019 2018 2017 Reserves for losses and LAE at beginning of year $ 584,719 $ 574,054 $ 560,321 Less receivable from reinsurers related to unpaid losses and LAE (108,398) (83,085) (83,724) Net reserves for losses and LAE at beginning of year 476,321 490,969 476,597 Incurred losses and LAE, related to: Current year 551,895 542,001 545,671 Prior years (42,049) (56,488) (41,784) Total incurred losses and LAE 509,846 485,513 503,887 Paid losses and LAE related to: Current year 333,377 340,927 325,049 Prior years 164,596 159,234 164,466 Total paid losses and LAE 497,973 500,161 489,515 Net reserves for losses and LAE at end of period 488,194 476,321 490,969 Plus receivable from reinsurers related to unpaid losses and LAE 122,372 108,398 83,085 Reserves for losses and LAE at end of period $ 610,566 $ 584,719 $ 574,054 At the end of each period, the reserves were re-estimated for all prior accident years. The Company’s prior year reserves decreased by $42,049, $56,488, and $41,784 for the years ended December 31, 2019, 2018, and 2017, respectively, and resulted from re-estimations of prior years’ ultimate loss and LAE liabilities. The decrease in prior year reserves during 2019 was primarily composed of reductions of $25,623 in the Company’s retained automobile and $14,182 in the Company’s retained other than auto and homeowners reserves. The decrease in prior year reserves during 2018 was primarily composed of reductions of $36,266 in the Company’s retained automobile and $18,947 in the Company’s retained other than auto and homeowners reserves. The decrease in prior year reserves during 2017 was primarily composed of reductions of $29,855 in the Company’s retained automobile and $10,201 in the Company’s retained homeowners reserves. The Company’s private passenger automobile line of business prior year reserves decreased during the years ended December 31, 2019, 2018 and 2017 primarily due to improved retained private passenger results. The improved retained private passenger results were primarily due to fewer incurred but not yet reported claims than previously estimated and better than previously estimated severity on the Company’s established bodily injury and property damage case reserves. The following is information about incurred and paid claims development as of December 31, 2019, net of reinsurance, as well as cumulative claim frequency and the total of incurred-but-not-reported liabilities plus expected development on reported claims included within the net incurred claims amounts for our three largest lines of business. The cumulative number of reported claims include claims closed with payment, claims closed without payment and all open claims. It does not include anticipated IBNR claims. For the Private Passenger Automobile and Commercial Automobile lines of business, claim count is defined on a claimant basis where several claim counts may arise from a single auto accident. For Homeowners and all other lines of business, claim count is defined on an accident basis. The information about incurred claims and allocated claim adjustment expense, net of reserves and paid ultimate claims development for the years ended December 31, 2010 to 2018 is presented as unaudited supplementary information. Private Passenger Automobile Liability Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance As of December 31, 2019 For the Years Ended December 31, Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims Cumulative Number of Reported Claims Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (Unaudited) 2010 $ 169,426 $ 172,558 $ 171,978 $ 170,089 $ 166,195 $ 164,723 $ 163,206 $ 162,679 $ 161,236 $ 161,212 $ - 54,933 2011 176,727 176,906 176,906 175,209 172,957 171,852 170,732 168,671 168,625 - 56,124 2012 175,262 175,189 174,856 170,379 167,831 166,008 163,350 162,448 (334) 53,273 2013 183,367 183,517 183,264 181,492 179,167 176,713 175,684 (1,155) 54,248 2014 187,305 187,104 186,798 183,119 181,312 179,251 (1,531) 52,787 2015 190,036 190,236 188,317 184,477 181,299 (1,082) 52,976 2016 192,912 192,318 185,009 180,486 (2,625) 49,368 2017 185,673 184,429 182,068 (9,052) 46,154 2018 176,411 175,222 (10,581) 42,785 2019 176,171 (7,596) 37,565 Total $ 1,742,466 Private Passenger Automobile Liability Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (Unaudited) 2010 $ 73,721 $ 126,734 $ 142,688 $ 153,408 $ 157,887 $ 160,192 $ 160,859 $ 161,080 $ 161,114 $ 161,112 2011 76,467 130,018 146,532 158,904 164,413 167,251 168,025 168,585 168,593 2012 74,306 126,553 144,157 152,991 157,443 160,416 161,749 162,014 2013 79,049 135,031 152,472 163,694 169,634 172,736 173,890 2014 79,151 136,434 156,693 166,815 173,163 176,616 2015 76,934 138,255 156,483 168,641 173,816 2016 78,862 137,917 154,964 167,458 2017 77,519 133,037 153,675 2018 72,895 126,456 2019 72,219 Total $ 1,535,849 All outstanding liabilities before 2010, net of reinsurance 347 Liabilities for claims and claim adjustment expenses, net of reinsurance $ 206,964 Private Passenger Automobile Physical Damage Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance As of December 31, 2019 For the Years Ended December 31, Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims Cumulative Number of Reported Claims Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (Unaudited) 2010 $ 101,456 $ 98,463 $ 96,642 $ 96,485 $ 96,385 $ 96,366 $ 96,325 $ 96,323 $ 96,335 $ 96,309 $ - 128,202 2011 118,131 117,951 115,028 113,821 113,765 113,674 113,677 113,640 113,630 - 140,509 2012 108,376 107,912 104,393 103,679 103,575 103,547 103,510 103,491 - 123,639 2013 114,389 114,239 113,034 112,197 112,096 112,060 112,029 - 131,703 2014 123,421 123,622 122,410 122,327 122,341 122,213 (38) 135,006 2015 140,219 136,661 134,101 133,737 133,581 (58) 144,272 2016 129,528 124,922 122,116 121,717 (78) 126,080 2017 128,340 126,304 124,128 (206) 123,989 2018 129,450 130,145 (3,085) 119,644 2019 128,698 (21,574) 113,983 Total $ 1,185,941 Private Passenger Automobile Physical Damage Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (Unaudited) 2010 $ 101,635 $ 98,445 $ 96,587 $ 96,444 $ 96,369 $ 96,335 $ 96,325 $ 96,317 $ 96,306 $ 96,309 2011 126,196 117,152 114,451 113,809 113,719 113,673 113,669 113,640 113,630 2012 111,928 107,017 104,311 103,664 103,573 103,537 103,510 103,491 2013 120,843 115,904 112,894 112,162 112,085 112,060 112,029 2014 130,732 126,414 122,668 122,402 122,350 122,251 2015 143,532 136,760 134,066 133,701 133,639 2016 133,530 124,298 122,023 121,795 2017 132,409 126,822 124,286 2018 138,036 132,591 2019 134,429 Total $ 1,194,450 All outstanding liabilities before 2010, net of reinsurance - Liabilities for claims and claim adjustment expenses, net of reinsurance $ (8,509) Commercial Automobile Liability Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance As of December 31, 2019 For the Years Ended December 31, Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims Cumulative Number of Reported Claims Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (Unaudited) 2010 $ 20,150 $ 19,922 $ 19,493 $ 19,576 $ 19,763 $ 19,285 $ 19,034 $ 18,725 $ 18,495 $ 18,547 $ 10 4,531 2011 23,658 24,298 24,160 24,187 23,649 22,933 22,817 22,759 22,488 25 4,958 2012 23,704 24,447 24,662 24,723 24,572 23,819 22,859 22,476 358 4,566 2013 29,175 29,541 28,377 26,864 26,310 25,986 25,443 421 5,783 2014 34,117 34,105 34,376 33,914 32,948 32,438 53 6,085 2015 35,371 36,150 36,610 37,730 38,015 (620) 7,211 2016 37,954 39,416 40,947 40,916 (821) 6,452 2017 42,865 41,373 41,055 1,263 6,123 2018 41,347 40,115 5,365 5,700 2019 51,679 14,371 4,895 Total $ 333,172 Commercial Automobile Liability Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (Unaudited) 2010 $ 6,466 $ 11,520 $ 13,816 $ 15,821 $ 17,351 $ 17,892 $ 18,113 $ 18,269 $ 18,280 $ 18,297 2011 7,306 14,263 17,807 19,783 20,941 21,913 22,043 22,445 22,463 2012 6,503 12,474 15,617 17,804 18,876 20,601 21,021 22,086 2013 8,502 17,079 19,625 21,129 22,434 23,867 24,507 2014 9,426 17,853 21,968 25,253 27,886 30,420 2015 11,181 21,700 26,018 29,804 31,537 2016 9,991 19,902 25,711 32,274 2017 10,407 20,106 24,409 2018 9,704 18,499 2019 12,113 Total $ 236,605 All outstanding liabilities before 2010, net of reinsurance - Liabilities for claims and claim adjustment expenses, net of reinsurance $ 96,567 Commercial Automobile Physical Damage Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance As of December 31, 2019 For the Years Ended December 31, Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims Cumulative Number of Reported Claims Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (Unaudited) 2010 $ 10,048 $ 9,963 $ 9,893 $ 9,892 $ 10,077 $ 9,955 $ 9,916 $ 9,990 $ 9,990 $ 10,025 $ - 10,664 2011 11,511 11,151 11,031 10,960 10,952 10,910 10,952 11,024 11,048 - 11,488 2012 10,382 10,382 10,331 10,249 10,250 10,208 10,209 10,226 - 9,913 2013 13,666 13,567 13,298 13,180 13,057 13,047 13,071 5 12,298 2014 17,426 16,925 15,455 15,419 15,353 15,381 5 13,545 2015 20,223 19,047 19,021 18,974 18,641 100 15,468 2016 20,216 18,506 17,909 17,808 96 13,593 2017 19,691 19,200 19,021 103 13,112 2018 21,230 19,937 91 12,897 2019 20,039 220 12,010 Total $ 155,197 Commercial Automobile Physical Damage Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (Unaudited) 2010 $ 9,398 $ 10,219 $ 10,053 $ 10,039 $ 10,028 $ 10,025 $ 10,027 $ 10,026 $ 10,026 $ 10,025 2011 11,006 11,119 11,092 11,060 11,055 11,053 11,050 11,049 11,048 2012 9,707 10,553 10,270 10,242 10,239 10,235 10,228 10,226 2013 12,665 13,378 13,114 13,074 13,065 13,060 13,066 2014 15,377 15,862 15,424 15,388 15,381 15,376 2015 17,787 18,910 18,667 18,549 18,541 2016 17,228 18,143 17,763 17,712 2017 17,957 19,336 18,915 2018 18,842 19,842 2019 18,128 Total $ 152,879 All outstanding liabilities before 2010, net of reinsurance - Liabilities for claims and claim adjustment expenses, net of reinsurance $ 2,318 Homeowners Liability Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance As of December 31, 2019 For the Years Ended December 31, Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims Cumulative Number of Reported Claims Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (Unaudited) 2010 $ 5,591 $ 5,422 $ 5,422 $ 4,888 $ 4,717 $ 4,098 $ 3,735 $ 3,612 $ 3,457 $ 3,457 $ - 217 2011 6,260 7,644 7,644 7,531 6,923 6,017 5,546 4,845 4,845 - 304 2012 7,514 7,514 7,514 6,464 5,304 4,331 3,824 3,889 - 249 2013 9,768 9,768 9,337 7,578 5,978 5,312 5,147 (79) 264 2014 11,494 11,494 9,738 7,388 7,120 6,984 92 261 2015 12,965 12,555 9,908 9,201 9,201 (483) 287 2016 10,594 10,594 10,594 9,847 867 272 2017 11,276 10,058 9,328 346 265 2018 9,951 9,951 (1,402) 242 2019 14,130 5,132 208 Total $ 76,779 Homeowners Liability Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (Unaudited) 2010 $ 963 $ 1,420 $ 2,684 $ 2,890 $ 3,214 $ 3,425 $ 3,472 $ 3,457 $ 3,457 $ 3,457 2011 235 1,969 3,459 4,336 4,497 4,536 4,758 4,769 4,769 2012 1,389 2,063 2,308 2,731 3,029 3,600 3,606 3,646 2013 527 2,337 3,080 3,493 3,829 4,038 4,209 2014 340 1,834 3,212 4,200 4,828 6,315 2015 428 3,319 4,267 5,205 6,445 2016 647 2,669 4,257 5,387 2017 305 1,676 2,913 2018 551 2,039 2019 1,634 Total $ 40,814 All outstanding liabilities before 2010, net of reinsurance 3 Liabilities for claims and claim adjustment expenses, net of reinsurance $ 35,968 Homeowners Property Damage Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance As of December 31, 2019 For the Years Ended December 31, Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims Cumulative Number of Reported Claims Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (Unaudited) 2010 $ 45,342 $ 44,550 $ 43,021 $ 40,868 $ 39,921 $ 39,658 $ 39,501 $ 39,501 $ 39,097 $ 39,097 $ 173 6,685 2011 95,586 98,021 97,571 94,657 93,914 93,186 92,595 92,388 92,387 204 15,116 2012 50,351 49,911 47,392 44,380 43,097 42,382 41,895 41,887 148 6,051 2013 56,298 56,199 55,722 52,464 51,077 49,973 49,463 100 5,698 2014 59,160 60,213 59,751 57,331 55,127 54,607 284 6,077 2015 152,586 152,049 162,377 162,788 162,722 434 20,075 2016 67,116 66,442 64,208 61,262 1,334 5,419 2017 80,736 76,560 70,689 316 6,006 2018 83,443 82,581 (3,163) 8,223 2019 77,976 2,127 5,184 Total $ 732,671 Homeowners Property Damage Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (Unaudited) 2010 $ 25,761 $ 37,447 $ 38,790 $ 39,110 $ 39,145 $ 39,203 $ 39,235 $ 39,235 $ 38,923 $ 38,923 2011 71,532 89,741 92,184 92,462 92,444 92,333 92,182 92,182 92,182 2012 30,801 40,681 41,960 41,737 41,782 41,789 41,736 41,736 2013 38,661 48,456 49,702 49,612 49,653 49,620 49,328 2014 40,409 52,161 54,088 54,224 54,262 54,274 2015 112,563 145,337 160,572 161,745 161,773 2016 44,103 57,238 59,155 59,449 2017 46,366 64,401 66,181 2018 57,704 70,959 2019 49,121 Total $ 683,926 All outstanding liabilities before 2010, net of reinsurance 506 Liabilities for claims and claim adjustment expenses, net of reinsurance $ 49,251 The following is unaudited supplementary information about average historical claims duration as of December 31, 2019. Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Unaudited) Years 1 2 3 4 5 6 7 8 9 10 Private Passenger Automobile Liability 43.7% 32.0% 10.3% 6.5% 3.1% 1.7% 0.6% 0.2% 0.0% 0.0% Private Passenger Automobile Physical Damage 107.4% -5.1% -2.3% -0.4% -0.1% 0.0% 0.0% 0.0% 0.0% 0.0% Commercial Automobile Liability 27.5% 26.3% 12.5% 10.6% 5.9% 5.9% 1.6% 2.6% 0.1% 0.1% Commercial Automobile Physical Damage 95.4% 5.5% -1.9% -0.3% -0.1% 0.0% 0.0% 0.0% 0.0% 0.0% Homeowners Liability 9.1% 22.3% 16.9% 11.5% 8.9% 10.4% 2.6% 0.3% 0.0% 0.0% Homeowners Property Damage 70.6% 21.2% 4.8% 0.4% 0.0% 0.0% -0.2% 0.0% -0.2% 0.0% The reconciliation of the net incurred and paid claims development tables to the liability for claims and claim adjustment expenses in the consolidated balance sheets is as follows. Reconciliation of the Disclosure of Incurred and Paid Claims Development to the Liability for Unpaid claims and Claim Adjustment Expenses December 31, 2019 Net outstanding liabilities Private Passenger Automobile Liability $ 206,964 Private Passenger Automobile Physical Damage (8,509) Commercial Automobile Liability 96,567 Commercial Automobile Physical Damage 2,318 Homeowners Liability 35,968 Homeowners Property Damage 49,251 Other Short-Duration Insurance Lines 75,455 Liabilities for unpaid claims and claim adjustment expenses, net of reinsurance $ 458,014 Reinsurance recoverable on unpaid claims Private Passenger Automobile Liability $ 238 Private Passenger Automobile Physical Damage - Commercial Automobile Liability 116,756 Commercial Automobile Physical Damage 2,255 Homeowners Liability - Homeowners Property Damage 1 Other Short-Duration Insurance Lines 3,122 Total reinsurance recoverable on unpaid claims $ 122,372 Unallocated claims adjustment expenses 30,180 Total gross liability for unpaid claims and claim adjustment expenses $ 610,566 Due to the nature of the risks that the Company underwrites and has historically underwritten, management does not believe that it has an exposure to asbestos or environmental pollution liabilities. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Income Taxes | 12. Income Taxes A summary of the income tax expense in the Consolidated Statements of Operations is shown below. Years Ended December 31, 2019 2018 2017 Current Income Taxes: Federal $ 19,280 $ 26,548 $ 22,198 State 43 108 30 19,323 26,656 22,228 Deferred Income Taxes: Federal 4,757 (5,600) 2,085 State — — — 4,757 (5,600) 2,085 Total income tax expense $ 24,080 $ 21,056 $ 24,313 The income tax expense attributable to the consolidated results of operations is different from the amounts determined by multiplying income before federal income taxes by the statutory federal income tax rate. The sources of the difference and the tax effects of each were as follows for the periods indicated. Years Ended December 31, 2019 2018 2017 Federal income tax expense at statutory rate $ 25,973 $ 21,893 $ 30,345 Tax‑exempt investment income, net (1,626) (1,862) (4,123) State taxes, net 34 85 19 Nondeductible expenses 488 494 237 Remeasurement of deferred tax liability upon enactment of the TCJA — — (1,540) Tax windfall related to share-based stock compensation (1,003) (79) (333) Other, net 214 525 (292) Total income tax expense $ 24,080 $ 21,056 $ 24,313 The deferred income tax (liability) asset represents the tax effects of temporary differences attributable to the Company’s consolidated federal tax return group. Its components were as shown in the following table for the periods indicated. Years Ended December 31, 2019 2018 Deferred tax assets: Discounting of loss reserves $ 5,642 $ 5,688 Discounting of unearned premium reserve 17,710 17,475 Investments — 1,972 Bad debt allowance 274 274 Employee benefits 4,340 4,159 Rent incentive 1,063 1,181 Total deferred tax assets before valuation allowance 29,029 30,749 Valuation allowance for deferred tax assets — — Total deferred tax assets 29,029 30,749 Deferred tax liabilities: Deferred acquisition costs (15,600) (15,405) Investments (1,744) — Net unrealized gains on investments (11,985) (1,645) Loss reserve transition adjustment (1,662) (2,229) Software development costs (2,109) (1,268) Premium acquisition expenses (509) (512) Depreciation (1,137) (941) Total deferred tax liabilities (34,746) (22,000) Net deferred tax (liability) asset $ (5,717) $ 8,749 The Company believes that the positions taken on its income tax returns for open tax years will be sustained upon examination by the Internal Revenue Service (“IRS”). Therefore, the Company has not recorded any liability for uncertain tax positions under ASC 740, Income Taxes During the years ended December 31, 2019 and December 31, 2018 there were no material changes to the amount of the Company’s unrecognized tax benefits or to any assumptions regarding the amount of its ASC 740 liability. As of December 31, 2019 and December 31, 2018, the Company had no unrecognized tax benefits, and none which if recognized would affect the effective tax rate. The Company does not currently anticipate significant changes in the amount of unrecognized income tax benefits during the next twelve months. The Company records interest and penalties associated with audits as a component of income before income taxes. Penalties are recorded in underwriting, operating and other expenses, and interest expense is recorded in interest expenses in the Consolidated Statements of Operations. The Company had no interest and penalties related to income taxes accrued as of December 31, 2019 and 2018. On December 22, 2017, the TCJA was enacted, which significantly amended the Internal Revenue Code of 1986. The TCJA, among other things, reduced the corporate tax rate from a statutory rate of 35% to 21%, imposed additional limitations on net operating losses and executive compensation, allowed for the full expensing of certain capital expenditures and enacted other changes impacting the insurance industry. |
Share Repurchase Program
Share Repurchase Program | 12 Months Ended |
Dec. 31, 2019 | |
Share Repurchase Program | |
Share Repurchase Program | 13. Share Repurchase Program On August 3, 2007, the Board of Directors approved a share repurchase program of up to $30,000 of the Company’s outstanding common shares. As of December 31, 2019, the Board of Directors had cumulatively authorized increases to the existing share repurchase program of up to $150,000 of its outstanding common shares. Under the program, the Company may repurchase shares of its common stock for cash in public or private transactions, in the open market or otherwise. The timing of such repurchases and actual number of shares repurchased will depend on a variety of factors including price, market conditions and applicable regulatory and corporate requirements. The program does not require the Company to repurchase any specific number of shares and it may be modified, suspended or terminated at any time without prior notice. No share purchases were made by the Company under the program during the years ended December 31, 2019 and December 31, 2018. As of December 31, 2019, the Company had purchased 2,279,570 shares on the open market at a cost of $83,835. |
Statutory Net Income and Surplu
Statutory Net Income and Surplus | 12 Months Ended |
Dec. 31, 2019 | |
Statutory Net Income and Surplus | |
Statutory Net Income and Surplus | 14. Statutory Net Income and Surplus Statutory Accounting Practices The Company’s insurance company subsidiaries, domiciled in the Commonwealth of Massachusetts, prepare statutory financial statements in accordance with the accounting practices prescribed or permitted by the Division. Prescribed statutory accounting practices are those practices that are incorporated directly or by reference in state laws, regulations, and general administrative rules applicable to all insurance enterprises domiciled in a particular state. Permitted statutory accounting practices include practices not prescribed by the Division, but allowed by the Division. Statutory net income was $75,469, $86,734, and $57,982 for the years ended December 31, 2019, 2018, and 2017, respectively. Statutory capital and surplus of the Company’s insurance subsidiaries was $704,177, and $646,820 at December 31, 2019 and 2018, respectively. Dividends The Insurance Subsidiaries are subject to various regulatory restrictions that limit the maximum amount of dividends available to be paid to their parent without prior approval of the Commonwealth of Massachusetts Commissioner of Insurance (the “Commissioner”). Massachusetts statute limits the dividends an insurer may pay in any twelve month period, without the prior permission of the Commissioner, to the greater of (i) 10% of the insurer’s surplus as of the preceding December 31 or (ii) the insurer’s net income for the twelve- month period ending the preceding December 31, in each case determined in accordance with statutory accounting practices. Our insurance company subsidiaries may not declare an “extraordinary dividend” (defined as any dividend or distribution that, together with other distributions made within the preceding twelve months, exceeds the limits established by Massachusetts statute) until thirty days after the Commissioner has received notice of the intended dividend and has not objected. As historically administered by the Commissioner, this provision requires the Commissioner’s prior approval of an extraordinary dividend. Under Massachusetts law, an insurer may pay cash dividends only from its unassigned funds, also known as earned surplus, and the insurer’s remaining surplus must be both reasonable in relation to its outstanding liabilities and adequate to its financial needs. At December 31, 2019, the statutory capital and surplus of Safety Insurance was $704,177 and its net income for 2019 was $75,469. As a result, a maximum of $75,469 is available in 2020 for such dividends without prior approval of the Commissioner. During the year ended December 31, 2019, Safety Insurance recorded dividends of $47,585. As result of this Massachusetts statute, the Insurance Subsidiaries had restricted net assets in the amount of $628,708 at December 31, 2019. Risk-Based Capital Requirements The NAIC has adopted a formula and model law to implement risk-based capital requirements for most property and casualty insurance companies, which are designed to determine minimum capital requirements and to raise the level of protection that statutory surplus provides for policyholder obligations. Under Massachusetts law, insurers having less total adjusted capital than that required by the risk-based capital calculation will be subject to varying degrees of regulatory action, depending on the level of capital inadequacy. The risk-based capital law provides for four levels of regulatory action. The extent of regulatory intervention and action increases as the level of total adjusted capital to risk-based capital falls. As of December 31, 2019, the Insurance Subsidiaries had total adjusted capital of $704,177, which is in excess of amounts requiring company or regulatory action at any prescribed risk-based capital action level. Minimum statutory capital and surplus, or company action level risk-based capital, was $184,601 at December 31, 2019. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | 15. Fair Value of Financial Instruments ASC 820, Fair Value Measurements and Disclosure Level 1 — Valuations based on quoted prices in active markets for identical assets and liabilities; Level 2 — Valuations based on observable inputs that do not meet the criteria for Level 1, including quoted prices in inactive markets and quoted prices in active markets for similar, but not identical instruments; and Level 3 — Valuations based on unobservable inputs. Fair values for the Company’s fixed maturity securities are based on prices provided by its custodian bank and its investment managers. Both the Company’s custodian bank and investment managers use a variety of independent, nationally recognized pricing services to determine market valuations. If the pricing service cannot provide fair value determinations, the Company obtains non-binding price quotes from broker-dealers. A minimum of two quoted prices is obtained for the majority of the Company’s available-for-sale fixed maturity securities in its investment portfolio. The Company uses a third-party pricing service as its primary provider of quoted prices from third-party pricing services and broker-dealers. To provide reasonable assurance of the validity of each price or quote, a secondary third-party pricing service or broker-dealer quote is obtained from the Company’s custodian or investment managers. An examination of the pricing data is then performed for each security. If the variance between the primary and secondary price quotes for a security is within an accepted tolerance level, the quoted price obtained from the Company’s primary source is used for the security. If the variance between the primary and secondary price quotes exceeds an accepted tolerance level, the Company obtains a quote from an alternative source, if possible, and documents and resolves any differences between the pricing sources. In addition, the Company may request that its investment managers and its traders provide input as to which vendor is providing prices that its traders believe are reflective of fair value for the security. Following this process, the Company may decide to value the security in its financial statements using the secondary or alternative source if it believes that pricing is more reflective of the security’s value than the primary pricing provided by its custodian bank. The Company analyzes market valuations received to verify reasonableness, to understand the key assumptions used and their sources, and to determine an appropriate ASC 820 fair value hierarchy level based upon trading activity and the observability of market inputs. Based on this evaluation and investment class analysis, each price is classified into Level 1, 2 or 3. Fair values of instruments are based on (i) quoted prices in active markets for identical assets (Level 1), (ii) quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which all significant inputs are observable in active markets (Level 2) or (iii) valuations derived from valuation techniques in which one or more significant inputs are unobservable in the marketplace (Level 3). The Company’s Level 1 securities consist of equity securities whose values are based on quoted prices in active markets for identical assets. The Company’s Level 2 securities are comprised of available-for-sale fixed maturity securities whose fair value was determined using observable market inputs. The Company’s Level 3 security consists of an investment in the Federal Home Loan Bank of Boston related to Safety Insurance Company’s membership stock, which is not redeemable in a short-term time frame. Fair values for securities for which quoted market prices were unavailable were estimated based upon reference to observable inputs such as benchmark interest rates, market comparables, and other relevant inputs. Investments valued using these inputs include U.S. Treasury securities, obligations of states and political subdivisions, corporate and other securities, commercial and residential mortgage-backed securities, and other asset-backed securities. Inputs into the fair value application that are utilized by asset class include but are not limited to: ● Obligations of states and political subdivisions ● Corporate and other securities ● Residential mortgage-backed securities ● Commercial mortgage-backed securities ● Other asset-backed securities ● FHLB-Boston In order to ensure the fair value determination is representative of an exit price (consistent with ASC 820), the Company’s procedures for validating quotes or prices obtained from third parties include, but are not limited to, obtaining a minimum of two price quotes for each fixed maturity security if possible, as discussed above, the periodic testing of sales activity to determine if there are any significant differences between the market price used to value the security as of the balance sheet date and the sales price of the security for sales that occurred around the balance sheet date, and the periodic review of reports provided by its external investment manager regarding those securities with ratings changes and securities placed on its “Watch List.” In addition, valuation techniques utilized by pricing services and prices obtained from external sources are reviewed by the Company’s external investment manager, whose investment professionals are familiar with the securities being priced and the markets in which they trade, to ensure the fair value determination is representative of an exit price (consistent with ASC 820). All unadjusted estimates of fair value for our fixed maturities priced by the pricing services as described above are included in the amounts disclosed in Level 2. With the exception of the FHLB-Boston security, which is categorized as a Level 3 security, the Company’s entire portfolio was priced based upon quoted market prices or other observable inputs as of December 31, 2019. There were no significant changes to the valuation process during the year ended December 31, 2019. As of December 31, 2019 and December 31, 2018, no quotes or prices obtained were adjusted by management. All broker quotes obtained were non-binding. At December 31, 2019 and December 31, 2018, investments in fixed maturities classified as available-for-sale had a fair value which equaled carrying value of $1,228,040 and $1,161,862 , respectively. At December 31, 2019 and December 31, 2018, we held no short-term investments. The carrying values of cash and cash equivalents and investment income accrued approximated fair value. The following tables summarize the Company’s total fair value measurements for investments for the periods indicated. As of December 31, 2019 Total Level 1 Inputs Level 2 Inputs Level 3 Inputs U.S. Treasury securities $ 1,512 $ — $ 1,512 $ — Obligations of states and political subdivisions 251,396 — 251,396 — Residential mortgage-backed securities 307,202 — 307,202 — Commercial mortgage-backed securities 109,738 — 109,738 — Other asset-backed securities 36,222 — 36,222 — Corporate and other securities 521,970 — 521,970 — Equity securities 144,877 144,361 — 516 Total investment securities $ 1,372,917 $ 144,361 $ 1,228,040 $ 516 As of December 31, 2018 Total Level 1 Inputs Level 2 Inputs Level 3 Inputs U.S. Treasury securities $ 1,777 $ — $ 1,777 $ — Obligations of states and political subdivisions 266,198 — 266,198 — Residential mortgage-backed securities 297,023 — 297,023 — Commercial mortgage-backed securities 60,336 — 60,336 — Other asset-backed securities 61,076 — 61,076 — Corporate and other securities 475,452 — 475,452 — Equity securities 116,173 115,493 — 680 Total investment securities $ 1,278,035 $ 115,493 $ 1,161,862 $ 680 There were no transfers between Level 1 and Level 2 The following tables summarize the changes in the Company’s Level 3 fair value securities for the periods indicated. Years Ended December 31, 2019 2018 2017 Balance at beginning of period $ 680 $ 680 $ 678 Net gains and losses included in earnings — — — Net gains included in other comprehensive income — — — Purchases 133 — 2 Sales (297) — — Transfers into Level 3 — — — Transfers out of Level 3 — — — Balance at end of period $ 516 $ 680 $ 680 Transfers in and out of Level 3 are attributable to changes in the ability to observe significant inputs in determining fair value exit pricing. As noted in the table above, no transfers were made in or out of Level 3 during 2019, 2018 and 2017. The Company held one Level 3 security at December 31, 2019. As of December 31, 2019 and December 31, 2018, there were approximately $32,760 and $31,838 in a real estate investment trust (“REIT”). The REIT is excluded from the fair value hierarchy because the fair value is recorded using the net asset value per share practical expedient. The net asset value per share of this REIT is derived from member ownership in the capital venture to which a proportionate share of independently appraised net assets is attributed. The fair value was determined using the trust’s net asset value obtained from its audited financial statements. The Company is required to submit a request 45 days before a quarter end to dispose of the security. |
Quarterly Results of Operations
Quarterly Results of Operations | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Results of Operations | |
Quarterly Results of Operations | 16. Quarterly Results of Operations (Unaudited) An unaudited summary of the Company’s 2019 and 2018 quarterly performance, and audited annual performance, is as follows. Year ended December 31, 2019 First Second Third Fourth Total Quarter Quarter Quarter Quarter Year Total revenue $ 222,579 $ 216,002 $ 215,273 $ 223,899 $ 877,753 Net income 29,946 25,934 15,619 28,102 99,601 Earnings per weighted average common share: Basic 1.97 1.70 1.02 1.84 6.52 Diluted 1.95 1.68 1.01 1.82 6.46 Cash dividends paid per common share 0.80 0.80 0.90 0.90 3.40 Year ended December 31, 2018 First Second Third Fourth Total Quarter Quarter Quarter Quarter Year Total revenue $ 209,719 $ 207,970 $ 215,907 $ 202,901 $ 836,497 Net income 9,125 26,816 28,908 18,346 83,195 Earnings per weighted average common share: Basic 0.60 1.77 1.90 1.21 5.48 Diluted 0.60 1.75 1.88 1.19 5.43 Cash dividends paid per common share 0.80 0.80 0.80 0.80 3.20 |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Event | |
Subsequent Event | 17. Subsequent Events The Company has evaluated subsequent events for recognition or disclosure in the consolidated financial statements on Form 10-K filed herewith and no events have occurred that require recognition or disclosure. |
Schedule I - Summary of Investm
Schedule I - Summary of Investments - Other than Investments in Related Parties | 12 Months Ended |
Dec. 31, 2019 | |
Schedule I - Summary of Investments - Other than Investments in Related Parties | |
Schedule I - Summary of Investments - Other than Investments in Related Parties | Safety Insurance Group, Inc. Summary of Investment s —Other than Investments in Related Parties Schedule I At December 31, 2019 (Dollars in thousands) Amount at which shown Cost or Estimated in the Balance Amortized Cost Fair Value Sheet Fixed maturities: U.S. government and government agencies and authorities $ 303,007 $ 308,714 $ 308,714 Obligations of states and political subdivisions 241,597 251,396 251,396 Corporate and other securities 647,753 667,930 667,930 Total fixed maturities 1,192,357 1,228,040 1,228,040 Equity securities: Common stocks: Industrial, miscellaneous and all other 151,121 177,637 177,637 Total equity securities 151,121 177,637 177,637 Other invested assets 37,278 37,278 37,278 Total investments $ 1,380,756 $ 1,442,955 $ 1,442,955 |
Schedule II - Condensed Financi
Schedule II - Condensed Financial Information of the Registrant | 12 Months Ended |
Dec. 31, 2019 | |
Schedule II - Condensed Financial Information of the Registrant | |
Schedule II - Condensed Financial Information of the Registrant | Safety Insurance Group, Inc. Condensed Financial Information of the Registran t Condensed Balance Sheets Schedule II (Dollars in thousands) Years Ended December 31, 2019 2018 Assets Investments in consolidated affiliates $ 810,251 $ 720,721 Other 54 69 Total assets $ 810,305 $ 720,790 Liabilities Accounts payable and other liabilities $ 1,899 $ 2,146 Total liabilities 1,899 2,146 Shareholders’ equity 808,406 718,644 Total liabilities and shareholders’ equity $ 810,305 $ 720,790 Safety Insurance Group, Inc. Condensed Financial Information of the Registrant Condensed Statements of Operations and Comprehensive Income Schedule II (Dollars in thousands) Years Ended December 31, 2019 2018 2017 Revenues $ — $ — $ — Expenses 1,694 1,695 1,494 Net loss (1,694) (1,695) (1,494) Earnings from consolidated subsidiaries 101,295 84,890 63,881 Net income 99,601 83,195 62,387 Other comprehensive income (loss), net of tax 38,896 (22,816) 8,426 Comprehensive income $ 138,497 $ 60,379 $ 70,813 Safety Insurance Group, Inc. Condensed Financial Information of the Registrant Condensed Statements of Cash Flows Schedule II (Dollars in thousands) Years Ended December 31, 2019 2018 2017 Net income $ 99,601 $ 83,195 $ 62,387 Adjustments to reconcile net income to net cash provided by operating activities: Earnings from consolidated subsidiaries (101,295) (84,890) (63,881) Dividends received from consolidated subsidiaries(1) 47,585 45,271 41,826 Amortization of restricted stock expense 6,514 5,789 5,367 Changes in assets and liabilities: Other assets 15 (60) 15 Accounts payable and accrued liabilities 247 (492) (254) Net cash provided by operating activities 52,667 48,813 45,460 Proceeds from exercise of stock options — — — Excess tax benefit from stock options exercised — — — Dividends paid (52,667) (48,813) (45,460) Acquisition of treasury stock — — — Net cash used for financing activities (52,667) (48,813) (45,460) Net increase in cash and cash equivalents — — — Cash and cash equivalents, beginning of year — — — Cash and cash equivalents, end of year $ — $ — $ — (1) No portion of the dividends received from operating subsidiaries during 2019, 2018 or 2017 represent returns of capital and therefore no portion is presented as an investing activity. |
Schedule III - Supplementary In
Schedule III - Supplementary Insurance Information | 12 Months Ended |
Dec. 31, 2019 | |
Schedule III - Supplementary Insurance Information | |
Schedule III - Supplementary Insurance Information | Safety Insurance Group, Inc. Supplementary Insurance Informatio n Schedule III (Dollars in thousands) As of December 31, Years Ended December 31, Future Policy Deferred Benefits, Policy Losses, Net Acquisition Claims and Loss Unearned Earned Investment Segment Costs Expenses Premiums Premiums Income Property and Casualty Insurance 2019 $ 74,287 $ 610,566 $ 442,219 $ 788,777 $ 46,665 2018 73,355 584,719 435,380 781,587 43,788 2017 72,202 574,054 428,257 774,420 38,758 Years Ended December 31, Benefits, Amortization of Claims, Deferred Net Losses, and Policy Other Premium Investment Settlement Acquisition Operating Premiums Segment Revenue Income Expenses Costs Expenses Written Property and Casualty Insurance 2019 $ 788,777 $ 46,665 $ 509,846 $ 147,945 $ 96,191 $ 794,409 2018 781,587 43,788 485,513 146,601 100,042 786,912 2017 774,420 38,758 503,887 144,703 103,733 781,054 |
Schedule IV - Reinsurance
Schedule IV - Reinsurance | 12 Months Ended |
Dec. 31, 2019 | |
Schedule IV - Reinsurance | |
Schedule IV - Reinsurance | Safety Insurance Group, Inc. Reinsuranc e Schedule IV (Dollars in thousands) Percent of Amount Property and Casualty Gross Ceded to Other Assumed from Net Assumed Insurance Earned Premiums Amount Companies Other Companies Amount to Net Years ended December 31, 2019 $ 845,102 $ 89,178 $ 32,853 $ 788,777 4.2% 2018 836,759 87,368 32,196 781,587 4.1% 2017 818,804 76,886 32,502 774,420 4.2% |
Schedule V - Valuation and Qual
Schedule V - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2019 | |
Schedule V - Valuation and Qualifying Accounts | |
Schedule V - Valuation and Qualifying Accounts | Safety Insurance Group, Inc. Valuation and Qualifying Account s Schedule V (Dollars in thousands) Additions Balance at Charged to Charged to Balance at Beginning Costs and Other End of of Period Expenses Accounts Deductions(1) Period Allowance for doubtful accounts Years Ended December 31, 2019 $ 482 $ 1,358 $ — $ 1,262 $ 578 2018 414 1,338 — 1,270 482 2017 435 1,203 — 1,224 414 (1) Deductions represent write-offs of accounts determined to be uncollectible. |
Schedule VI - Supplemental Info
Schedule VI - Supplemental Information Concerning Property and Casualty Insurance Operations | 12 Months Ended |
Dec. 31, 2019 | |
Schedule VI - Supplemental Information Concerning Property and Casualty Insurance Operations | |
Schedule VI - Supplemental Information Concerning Property and Casualty Insurance Operations | Safety Insurance Group, Inc. Supplemental Information Concerning Property and Casualty Insurance Operation s Schedule VI (Dollars in thousands) As of December 31, Years Ended December 31, Reserves for Deferred Unpaid Claims Policy and Claims Net Acquisition Adjustment Unearned Earned Investment Affiliation With Registrant Costs Expenses Premiums Premiums Income Consolidated Property & Casualty Subsidiaries 2019 $ 74,287 $ 610,566 $ 442,219 $ 788,777 $ 46,665 2018 73,355 584,719 435,380 781,587 43,788 2017 72,202 574,054 428,257 774,420 38,758 Years Ended December 31, Claims and Claims Amortization Adjustment Expenses of Deferred Paid Claims Incurred Related to Policy and Claims Current Prior Acquisition Adjustment Premiums Affiliation With Registrant Year Year Costs Expenses Written Consolidated Property & Casualty Subsidiaries 2019 $ 551,895 $ (42,049) $ 147,945 $ 497,973 $ 794,409 2018 542,001 (56,488) 146,601 500,161 786,912 2017 545,671 (41,784) 144,703 489,515 781,054 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Significant Accounting Policies | |
Investments | Investments Investments in fixed maturities, which include taxable and non-taxable bonds and redeemable preferred stocks, are reported at fair value. Investments in equity securities, which include interests in common stocks, mutual funds and a real estate investment trust (“REIT”), are reported at fair value. Fair values for fixed maturity securities are based on estimates obtained from independent pricing services. Fair values for equity securities are derived from external market quotations, with the exception of the REIT whose fair value was determined using the trust’s net asset value obtained from its audited financial statements. Short-term investments, which consist of U.S. Treasury securities, are reported at amortized cost, which approximates fair value. Other long-term investments consist of investments in limited partnerships. The partnership interest is accounted for using the equity method of accounting and recorded in earnings from partnership investments. The carrying value of this investment is written down, or impaired, to fair value when a decline in value is considered to be other-than-temporary. In applying the equity method (including assessment for other-than-temporary impairment), the Company uses financial information provided by the investee, generally on a three month lag. Unrealized gains or losses on fixed maturity securities reported at fair value are excluded from earnings and reported in a separate component of shareholders’ equity, known as “Accumulated other comprehensive income (loss), net of taxes,” until realized. Changes in unrealized gains or losses on equity securities are recognized in earnings. Realized gains or losses on the sale or maturity of investments are determined based on the specific cost identification method. Fixed maturities and equity securities that experience declines in value that are other-than-temporary are written down to fair value with a corresponding charge to net impairment losses on investments. Investment income is recognized on an accrual basis of accounting. Bonds not backed by other loans are amortized using the interest method. Loan-backed bonds and structured securities are amortized using the interest method and significant changes in estimated cash flows from the original purchase assumptions are accounted for using the retrospective method. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents includes money market accounts and United States (“U.S.”) Treasury bills with original maturities of three months or less from the date of purchase. U.S. Treasury bills are stated at amortized cost, which approximates fair value. |
Accounts Receivable | Accounts Receivable Amounts included in accounts receivable represent premiums as well as finance charges, the majority of which are billed on a monthly installment basis. Accounts receivable are stated net of allowances for doubtful accounts. At December 31, 2019 and 2018, these allowances were $578 and $482, respectively. Uncollected premium balances over ninety days past due are written off. |
Deferred Policy Acquisition Costs | Deferred Policy Acquisition Costs Amounts that vary with and are primarily related to the successful acquisition of a new or renewal insurance contract, principally commissions and premium taxes, are deferred and amortized ratably over the effective period of the policy. All other acquisition expenses are expensed as incurred. Deferred policy acquisition costs are reviewed to determine if they are recoverable from future income, and if not, are charged to expense. Future investment income attributable to related premiums is not taken into account in measuring the recoverability of the carrying value of this asset. Amortization of acquisition costs in the amount of $147,945, $146,601, and $144,703 were charged to underwriting, operating and other expenses for the years ended 2019, 2018 and 2017, respectively. |
Equity and Deposits in Pools | Equity and Deposits in Pools Equity and deposits in pools represents the net receivable amounts from the residual market mechanisms, Commonwealth Automobile Reinsurers (“CAR”) for automobile and Massachusetts Property Insurance Underwriting Association (“FAIR Plan”) for homeowner insurance in Massachusetts. See Note 10 for a discussion of the Company’s accounting for amounts assumed from residual markets. |
Equipment and Leasehold Improvements | Equipment and Leasehold Improvements Property, equipment, leasehold improvements, and software which are included in other assets are carried at cost less accumulated depreciation. Depreciation is provided using the straight- line or accelerated method over the estimated useful lives of the related assets, which range from 3 to 10 years. Amortization of leasehold improvements is provided using the straight-line method over the term of the lease. The costs of computer software developed or obtained for internal use are capitalized and amortized over the estimated life of the business system, beginning when the software is ready for its intended use. Maintenance and repairs are charged to expense as incurred. |
Losses and Loss Adjustment Expenses | Losses and Loss Adjustment Expenses Liabilities for losses and loss adjustment expenses (“LAE”) include case basis estimates for open claims reported prior to year- end and estimates of unreported claims and claim adjustment expenses, net of salvage and subrogation. The estimates are continually reviewed and modified to reflect current conditions, and any resulting adjustments are reflected in current operating results. Adjustments for anticipated salvage and subrogation are recorded on incurred and reported and incurred but not reported losses. The Company determines its loss and LAE reserves estimate based upon the analysis of our actuaries. A reasonable estimate is derived by selecting a point estimate within a range of indications as calculated by our actuaries using generally accepted actuarial techniques. The key assumption in most actuarial analysis is that past patterns of frequency and severity will repeat in the future, unless a significant change in the factors described above takes place. Our key factors and resulting assumptions are the ultimate frequency and severity of claims, based upon the most recent ten years of claims reported to the Company, and the data reported to us to calculate our share of the residual market. For each accident year and each coverage within a line of business our actuaries calculate the ultimate losses incurred. |
Premiums and Unearned Premiums | Premiums and Unearned Premiums Premiums are earned over the terms of the respective policies, which are generally one year. Unearned premiums represent the portion of premiums written applicable to the unexpired terms of the policies. Ceded premiums are charged to income over the terms of the respective policies and the applicable term of the reinsurance contracts with third-party reinsurers. Ceded unearned premiums represent the unexpired portion of premiums ceded to CAR and other reinsurers. Premiums received in advance of the policy effective date are recorded as a liability and not recognized as income until earned. Such amounts are included in accounts payable and accrued liabilities and totaled $14,628 and $14,649 at December 31, 2019 and 2018, respectively. |
Reinsurance | Reinsurance Liabilities for unearned premiums and unpaid losses are stated before deductions for ceded reinsurance. The ceded amounts are carried as receivables. Earned premiums are stated net of deductions for ceded reinsurance. The Company, as primary insurer, will be required to pay losses in their entirety in the event that the reinsurers are unable to discharge their obligations under the reinsurance agreements. |
Advertising Costs | Advertising Costs Advertising costs are charged to expense when they are incurred. Total advertising costs were $2,182, $2,500 and $2,216 for the years ended December 31, 2019, 2018, and 2017, respectively. |
Finance and Other Service Income | Finance and Other Service Income Finance and other service income primarily include revenues from premium installment charges, which are recognized when earned. |
Income Taxes | Income Taxes The Company and its subsidiaries file a consolidated U.S. federal income tax return. The method of allocation among members of the consolidated group is subject to a written agreement approved by the Board of Directors (the “Board”). The consolidated tax liability is allocated on the basis of the members’ proportionate contribution to consolidated taxable income. Deferred income taxes are generally recognized when assets and liabilities have different values for financial statement and tax reporting purposes, and for other temporary taxable and deductible differences as defined by Accounting Standards Codification (“ASC”) 740, Income Taxes. On December 22, 2017, the TCJA was enacted, which significantly amends the Internal Revenue Code of 1986. The TCJA, among other things, reduced the corporate tax rate from a statutory rate of 35% to 21%, imposes additional limitations on net operating losses and executive compensation, allows for the full expensing of certain capital expenditures, and enacts other changes impacting the insurance industry. |
Earnings per Weighted Average Common Share | Earnings per Weighted Average Common share Basic earnings per weighted average common share (“EPS”) are calculated by dividing net income by the weighted average number of basic common shares outstanding during the period. Diluted earnings per share amounts are based on the weighted average number of common shares including non-vested performance stock grants. The following table sets forth the computation of basic and diluted EPS for the periods indicated. Years Ended December 31, 2019 2018 2017 Earnings attributable to common shareholders - basic and diluted: Net income from continuing operations $ 99,601 $ 83,195 $ 62,387 Allocation of income for participating shares (523) (496) (392) Net income from continuing operations attributed to common shareholders $ 99,078 $ 82,699 $ 61,995 Earnings per share denominator - basis and diluted Total weighted average common shares outstanding, including participating shares 15,281,363 15,170,754 15,105,558 Less: weighted average participating shares (80,231) (90,485) (94,807) Basic earnings per share denominator 15,201,132 15,080,269 15,010,751 Common equivalent shares- stock options — — — Common equivalent shares- non-vested performance stock grants 136,675 149,629 124,597 Diluted earnings per share denominator 15,337,807 15,229,898 15,135,348 Basic earnings per share $ 6.52 $ 5.48 $ 4.13 Diluted earnings per share $ 6.46 $ 5.43 $ 4.10 Undistributed earnings attributable to common shareholders - basic and diluted: Net income from continuing operations attributable to common shareholders -Basic $ 6.52 $ 5.48 $ 4.13 Dividends declared (3.40) (3.20) (3.00) Undistributed earnings $ 3.12 $ 2.28 $ 1.13 Net income from continuing operations attributable to common shareholders -Diluted $ 6.46 $ 5.43 $ 4.10 Dividends declared (3.40) (3.20) (3.00) Undistributed earnings $ 3.06 $ 2.23 $ 1.10 Diluted EPS excludes non vested performance stock grants with exercise prices and exercise tax benefits greater than the average market price of the Company’s common stock during the period because their inclusion would be anti-dilutive. There were no anti-dilutive stock options or non-vested performance stock grants for the years ended December 31, 2019 and 2018. |
Share-Based Compensation | Share-Based Compensation Accounting Standards Codification (“ASC”) 718, Compensation —Stock Compensation requires the Company to measure and recognize the cost of employee services received in exchange for an award of equity instruments. Under the provisions of ASC 718, share-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period (generally the vesting period of the equity grant). See Note 6 for further information regarding share-based compensation. |
Use of Estimates | Use of Estimates 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 and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements On March 20, 2019, the SEC adopted amendments to Regulation S-K and related rules and forms to modernize and simplify certain disclosure requirements for public companies. The amendments are intended to reduce the costs and burdens of the disclosure process and while continuing to require disclosure of all material information. The amended rules generally were effective on May 2, 2019 and reduced disclosures but some provisions added new requirements. The adoption of the new rules did not have a material impact on the Company’s financial position, results of operations, cash flows, or disclosures. On August 17, 2018, the SEC adopted amendments to eliminate, integrate, update or modify certain of its disclosure requirements. The amendments which are focused on disclosure requirements that have become redundant, duplicative, overlapping, outdated, or superseded, are intended to facilitate the disclosure of information to investors and simplify compliance without significantly altering the total mix of information provided to investors. The amended rules generally reduce disclosures but some provisions added new disclosure requirements. The amendments were effective November 5, 2018. The adoption of the new rules did not have a material In February 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In March 2017, the FASB issued ASU 2017-08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities In August 2016, the FASB issued ASU 2016-15 , Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Statements operations with regard to potential credit losses on its Available For Sale investment portfolio and reinsurance recoverables and determined that the impact of adoption will not be material. In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting In February 2016, the FASB issued ASU 2016-02, Leases Codification Improvements to Topic 842, Leases Leases (Topic 842): Targeted Improvements In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities In May 2014, the FASB issued as final, ASU 2014-09, Revenue from Contracts with Customers (Topic 606) entity should recognize revenue 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. The update was effective for interim and annual reporting periods in fiscal years beginning after December 15, 2017. ASU 2014-09 allows for the use of either the retrospective or modified retrospective approach of adoption. The Company adopted the updated guidance effective January 1, 2018 using the modified retrospective approach. The adoption of ASU 2014-09 did not have a material impact on the Company’s financial position, results of operations, cash flows, or disclosures. |
Segments | Segments Segment Reporting, |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings per Weighted Average Common Share | |
Computation of basic and diluted EPS | Years Ended December 31, 2019 2018 2017 Earnings attributable to common shareholders - basic and diluted: Net income from continuing operations $ 99,601 $ 83,195 $ 62,387 Allocation of income for participating shares (523) (496) (392) Net income from continuing operations attributed to common shareholders $ 99,078 $ 82,699 $ 61,995 Earnings per share denominator - basis and diluted Total weighted average common shares outstanding, including participating shares 15,281,363 15,170,754 15,105,558 Less: weighted average participating shares (80,231) (90,485) (94,807) Basic earnings per share denominator 15,201,132 15,080,269 15,010,751 Common equivalent shares- stock options — — — Common equivalent shares- non-vested performance stock grants 136,675 149,629 124,597 Diluted earnings per share denominator 15,337,807 15,229,898 15,135,348 Basic earnings per share $ 6.52 $ 5.48 $ 4.13 Diluted earnings per share $ 6.46 $ 5.43 $ 4.10 Undistributed earnings attributable to common shareholders - basic and diluted: Net income from continuing operations attributable to common shareholders -Basic $ 6.52 $ 5.48 $ 4.13 Dividends declared (3.40) (3.20) (3.00) Undistributed earnings $ 3.12 $ 2.28 $ 1.13 Net income from continuing operations attributable to common shareholders -Diluted $ 6.46 $ 5.43 $ 4.10 Dividends declared (3.40) (3.20) (3.00) Undistributed earnings $ 3.06 $ 2.23 $ 1.10 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investments | |
Gross unrealized gains and losses on investments in securities | As of December 31, 2019 Gross Unrealized Losses (3) Cost or Gross Non-OTTI OTTI Estimated Amortized Unrealized Unrealized Unrealized Fair Cost Gains Losses Losses (4) Value U.S. Treasury securities $ 1,504 $ 8 $ — $ — $ 1,512 Obligations of states and political subdivisions 241,597 9,799 — — 251,396 Residential mortgage-backed securities (1) 301,503 6,608 (909) — 307,202 Commercial mortgage-backed securities 106,902 3,233 (397) — 109,738 Other asset-backed securities 36,068 218 (64) — 36,222 Corporate and other securities 504,783 18,455 (1,268) — 521,970 Subtotal, fixed maturity securities 1,192,357 38,321 (2,638) — 1,228,040 Equity securities (2) 151,121 27,879 (1,363) — 177,637 Other invested assets (5) 37,278 — — — 37,278 Totals $ 1,380,756 $ 66,200 $ (4,001) $ — $ 1,442,955 As of December 31, 2018 Gross Unrealized Losses (3) Cost or Gross Non-OTTI OTTI Estimated Amortized Unrealized Unrealized Unrealized Fair Cost Gains Losses Losses (4) Value U.S. Treasury securities $ 1,807 $ — $ (30) $ — $ 1,777 Obligations of states and political subdivisions 262,772 5,098 (1,672) — 266,198 Residential mortgage-backed securities (1) 300,387 1,477 (4,841) — 297,023 Commercial mortgage-backed securities 60,897 337 (898) — 60,336 Other asset-backed securities 61,310 95 (329) — 61,076 Corporate and other securities 488,240 1,775 (14,563) — 475,452 Subtotal, fixed maturity securities 1,175,413 8,782 (22,333) — 1,161,862 Equity securities (2) 142,948 15,419 (10,356) — 148,011 Other invested assets (5) 23,481 — — — 23,481 Totals $ 1,341,842 $ 24,201 $ (32,689) $ — $ 1,333,354 (1) Residential mortgage-backed securities consists primarily of obligations of U.S. Government agencies including collateralized mortgage obligations issued, guaranteed and/or insured by the following issuers: Government National Mortgage Association (GNMA), Federal Home Loan Mortgage Corporation (FHLMC), Federal National Mortgage Association (FNMA) and the Federal Home Loan Bank (FHLB). (2) Equity securities include common stock, preferred stock, mutual funds and interests in mutual funds held to fund the Company’s executive deferred compensation plan. (3) The Company’s investment portfolio included 229 and 958 securities in an unrealized loss position at December 31, 2019 and December 31, 2018, respectively. (4) Amounts in this column represent other-than-temporary impairment (“OTTI”) recognized in accumulated other comprehensive (loss) income. (5) Other invested assets are accounted for under the equity method which approximates fair value. |
Amortized cost and the estimated fair value of fixed maturity securities, by maturity | As of December 31, 2019 Amortized Estimated Cost Fair Value Due in one year or less $ 46,850 $ 47,146 Due after one year through five years 309,662 317,821 Due after five years through ten years 306,656 321,000 Due after ten years through twenty years 83,872 87,952 Due after twenty years 846 961 Asset-backed securities 444,471 453,160 Totals $ 1,192,357 $ 1,228,040 |
Gross realized gains and losses on sales of investments | Years Ended December 31, 2019 2018 2017 Gross realized gains Fixed maturity securities $ 1,294 $ 1,022 $ 1,468 Equity securities 4,536 5,129 5,244 Gross realized losses Fixed maturity securities (1,805) (1,878) (504) Equity securities (1,049) (1,047) (172) Net realized gains on investments $ 2,976 $ 3,226 $ 6,036 |
Gross unrealized losses included in the Company's investment portfolio and the fair value of those securities | As of December 31, 2019 Less than 12 Months 12 Months or More Total Estimated Unrealized Estimated Unrealized Estimated Unrealized Fair Value Losses Fair Value Losses Fair Value Losses U.S. Treasury securities $ — $ — $ — $ — $ — $ — Obligations of states and political subdivisions — — — — — — Residential mortgage-backed securities 61,933 409 31,655 500 93,588 909 Commercial mortgage-backed securities 36,398 397 866 — 37,264 397 Other asset-backed securities 21,281 64 462 — 21,743 64 Corporate and other securities 26,386 481 13,718 787 40,104 1,268 Subtotal, fixed maturity securities 145,998 1,351 46,701 1,287 192,699 2,638 Equity securities 8,849 391 14,143 972 22,992 1,363 Total temporarily impaired securities $ 154,847 $ 1,742 $ 60,844 $ 2,259 $ 215,691 $ 4,001 As of December 31, 2018 Less than 12 Months 12 Months or More Total Estimated Unrealized Estimated Unrealized Estimated Unrealized Fair Value Losses Fair Value Losses Fair Value Losses U.S. Treasury securities $ — $ — $ 1,777 $ 30 $ 1,777 $ 30 Obligations of states and political subdivisions 80,856 707 16,049 965 96,905 1,672 Residential mortgage-backed securities 64,101 694 138,572 4,147 202,673 4,841 Commercial mortgage-backed securities 22,652 270 13,117 628 35,769 898 Other asset-backed securities 33,866 112 23,532 217 57,398 329 Corporate and other securities 288,786 10,149 87,546 4,414 376,332 14,563 Subtotal, fixed maturity securities 490,261 11,932 280,593 10,401 770,854 22,333 Equity securities 71,439 9,955 2,072 401 73,511 10,356 Total temporarily impaired securities $ 561,700 $ 21,887 $ 282,665 $ 10,802 $ 844,365 $ 32,689 |
Credit loss recognized in earnings related to fixed maturity securities | Years Ended December 31, 2019 2018 2017 Credit losses on fixed maturity securities, beginning of period $ 844 $ 892 $ 1,094 Add: credit losses on OTTI not previously recognized 889 228 256 Less: credit losses on securities sold (1,064) (276) (458) Less: credit losses on securities impaired due to intent to sell — — — Add: credit losses on previously impaired securities — — — Less: increases in cash flows expected on previously impaired securities — — — Credit losses on fixed maturity securities, end of period $ 669 $ 844 $ 892 |
Components of net investment income | Years Ended December 31, 2019 2018 2017 Interest on fixed maturity securities $ 42,892 $ 40,988 $ 37,246 Dividends on equity securities 5,268 4,500 3,093 Equity in earnings of other invested assets 1,552 1,182 1,016 Interest on other assets 32 62 89 Total Investment Income 49,744 46,732 41,444 Investment expenses 3,079 2,944 2,686 Net investment income $ 46,665 $ 43,788 $ 38,758 |
Equipment and Leasehold Impro_2
Equipment and Leasehold Improvements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equipment and Leasehold Improvements | |
Schedule of carrying value of equipment and leasehold improvements by classification | As of December 31, 2019 2018 Software $ 42,516 $ 36,161 Computer equipment 12,412 9,195 Leasehold improvements 8,264 8,264 Other equipment 3,132 3,116 Furniture and fixtures 4,134 4,129 Total cost 70,458 60,865 Less accumulated depreciation and amortization 50,447 45,281 Equipment and leasehold improvements, net $ 20,011 $ 15,584 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-Based Compensation | |
Schedule of restricted stock and performance-based restricted stock activity | Years Ended December 31, 2019 2018 2017 Shares Weighted Shares Weighted Shares Weighted Under Average Under Average Under Average Restriction Fair Value Restriction Fair Value Restriction Fair Value Outstanding at beginning of year 89,135 $ 68.70 93,086 $ 63.13 95,493 $ 55.86 Granted 33,778 92.52 39,451 75.05 40,226 73.42 Vested and unrestricted (44,085) 68.41 (43,276) 62.46 (42,453) 56.56 Forfeited (626) 75.50 (126) 70.63 (180) 63.87 Outstanding at end of period 78,202 $ 79.09 89,135 $ 68.70 93,086 $ 63.13 Years Ended December 31, 2019 2018 2017 Performance-based Weighted Performance-based Weighted Performance-based Weighted Shares Under Average Shares Under Average Shares Under Average Restriction Fair Value Restriction Fair Value Restriction Fair Value Outstanding at beginning of year 105,170 $ 66.79 105,660 $ 62.75 94,610 $ 57.60 Granted (1) 63,447 69.61 31,832 75.14 29,829 74.96 Vested and unrestricted (84,512) 56.42 (27,801) 61.50 (18,259) 53.99 Forfeited — — (4,521) 62.41 (520) 53.99 Outstanding at end of period 84,105 $ 79.34 105,170 $ 66.79 105,660 $ 62.75 (1) Includes a true-up of previously awarded performance-based restricted share awards. The updated shares were calculated based on the attainment of pre-established performance objectives. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases | |
Schedule of operating lease cost | Year Ended December 31, 2019 Operating lease cost $ 4,645 |
Schedule of other information related to leases | Year Ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 5,082 Weighted average remaining lease term Operating leases 8.42 Years Weighted average discount rate Operating leases 2.39% |
Schedule of the maturities of lease liabilities | Operating Leases 2020 $ 4,998 2021 4,798 2022 4,270 2023 3,879 2024 3,875 Thereafter 15,405 Total lease payments 37,225 Less imputed interest (3,227) Total $ 33,998 |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Reinsurance | |
Schedule of effect of assumed and ceded premiums on net written and earned premiums and losses and LAE incurred | Years Ended December 31, 2019 2018 2017 Written Premiums Direct $ 852,404 $ 843,675 $ 827,316 Assumed 32,391 32,403 34,214 Ceded (90,386) (89,166) (80,476) Net written premiums $ 794,409 $ 786,912 $ 781,054 Earned Premiums Direct $ 845,102 $ 836,759 $ 818,804 Assumed 32,853 32,196 32,502 Ceded (89,178) (87,368) (76,886) Net earned premiums $ 788,777 $ 781,587 $ 774,420 Loss and LAE Direct $ 562,192 $ 538,569 $ 517,146 Assumed 28,529 28,815 28,003 Ceded (80,875) (81,871) (41,262) Net loss and LAE $ 509,846 $ 485,513 $ 503,887 |
Loss and Loss Adjustment Expe_2
Loss and Loss Adjustment Expense Reserves (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Loss and Loss Adjustment Expense Reserves | |
Schedule of reconciliation of beginning and ending reserves for losses and loss adjustment expenses (LAE) | Year Ended December 31, 2019 2018 2017 Reserves for losses and LAE at beginning of year $ 584,719 $ 574,054 $ 560,321 Less receivable from reinsurers related to unpaid losses and LAE (108,398) (83,085) (83,724) Net reserves for losses and LAE at beginning of year 476,321 490,969 476,597 Incurred losses and LAE, related to: Current year 551,895 542,001 545,671 Prior years (42,049) (56,488) (41,784) Total incurred losses and LAE 509,846 485,513 503,887 Paid losses and LAE related to: Current year 333,377 340,927 325,049 Prior years 164,596 159,234 164,466 Total paid losses and LAE 497,973 500,161 489,515 Net reserves for losses and LAE at end of period 488,194 476,321 490,969 Plus receivable from reinsurers related to unpaid losses and LAE 122,372 108,398 83,085 Reserves for losses and LAE at end of period $ 610,566 $ 584,719 $ 574,054 |
Schedule of incurred and paid claims development | Private Passenger Automobile Liability Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance As of December 31, 2019 For the Years Ended December 31, Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims Cumulative Number of Reported Claims Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (Unaudited) 2010 $ 169,426 $ 172,558 $ 171,978 $ 170,089 $ 166,195 $ 164,723 $ 163,206 $ 162,679 $ 161,236 $ 161,212 $ - 54,933 2011 176,727 176,906 176,906 175,209 172,957 171,852 170,732 168,671 168,625 - 56,124 2012 175,262 175,189 174,856 170,379 167,831 166,008 163,350 162,448 (334) 53,273 2013 183,367 183,517 183,264 181,492 179,167 176,713 175,684 (1,155) 54,248 2014 187,305 187,104 186,798 183,119 181,312 179,251 (1,531) 52,787 2015 190,036 190,236 188,317 184,477 181,299 (1,082) 52,976 2016 192,912 192,318 185,009 180,486 (2,625) 49,368 2017 185,673 184,429 182,068 (9,052) 46,154 2018 176,411 175,222 (10,581) 42,785 2019 176,171 (7,596) 37,565 Total $ 1,742,466 Private Passenger Automobile Liability Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (Unaudited) 2010 $ 73,721 $ 126,734 $ 142,688 $ 153,408 $ 157,887 $ 160,192 $ 160,859 $ 161,080 $ 161,114 $ 161,112 2011 76,467 130,018 146,532 158,904 164,413 167,251 168,025 168,585 168,593 2012 74,306 126,553 144,157 152,991 157,443 160,416 161,749 162,014 2013 79,049 135,031 152,472 163,694 169,634 172,736 173,890 2014 79,151 136,434 156,693 166,815 173,163 176,616 2015 76,934 138,255 156,483 168,641 173,816 2016 78,862 137,917 154,964 167,458 2017 77,519 133,037 153,675 2018 72,895 126,456 2019 72,219 Total $ 1,535,849 All outstanding liabilities before 2010, net of reinsurance 347 Liabilities for claims and claim adjustment expenses, net of reinsurance $ 206,964 Private Passenger Automobile Physical Damage Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance As of December 31, 2019 For the Years Ended December 31, Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims Cumulative Number of Reported Claims Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (Unaudited) 2010 $ 101,456 $ 98,463 $ 96,642 $ 96,485 $ 96,385 $ 96,366 $ 96,325 $ 96,323 $ 96,335 $ 96,309 $ - 128,202 2011 118,131 117,951 115,028 113,821 113,765 113,674 113,677 113,640 113,630 - 140,509 2012 108,376 107,912 104,393 103,679 103,575 103,547 103,510 103,491 - 123,639 2013 114,389 114,239 113,034 112,197 112,096 112,060 112,029 - 131,703 2014 123,421 123,622 122,410 122,327 122,341 122,213 (38) 135,006 2015 140,219 136,661 134,101 133,737 133,581 (58) 144,272 2016 129,528 124,922 122,116 121,717 (78) 126,080 2017 128,340 126,304 124,128 (206) 123,989 2018 129,450 130,145 (3,085) 119,644 2019 128,698 (21,574) 113,983 Total $ 1,185,941 Private Passenger Automobile Physical Damage Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (Unaudited) 2010 $ 101,635 $ 98,445 $ 96,587 $ 96,444 $ 96,369 $ 96,335 $ 96,325 $ 96,317 $ 96,306 $ 96,309 2011 126,196 117,152 114,451 113,809 113,719 113,673 113,669 113,640 113,630 2012 111,928 107,017 104,311 103,664 103,573 103,537 103,510 103,491 2013 120,843 115,904 112,894 112,162 112,085 112,060 112,029 2014 130,732 126,414 122,668 122,402 122,350 122,251 2015 143,532 136,760 134,066 133,701 133,639 2016 133,530 124,298 122,023 121,795 2017 132,409 126,822 124,286 2018 138,036 132,591 2019 134,429 Total $ 1,194,450 All outstanding liabilities before 2010, net of reinsurance - Liabilities for claims and claim adjustment expenses, net of reinsurance $ (8,509) Commercial Automobile Liability Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance As of December 31, 2019 For the Years Ended December 31, Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims Cumulative Number of Reported Claims Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (Unaudited) 2010 $ 20,150 $ 19,922 $ 19,493 $ 19,576 $ 19,763 $ 19,285 $ 19,034 $ 18,725 $ 18,495 $ 18,547 $ 10 4,531 2011 23,658 24,298 24,160 24,187 23,649 22,933 22,817 22,759 22,488 25 4,958 2012 23,704 24,447 24,662 24,723 24,572 23,819 22,859 22,476 358 4,566 2013 29,175 29,541 28,377 26,864 26,310 25,986 25,443 421 5,783 2014 34,117 34,105 34,376 33,914 32,948 32,438 53 6,085 2015 35,371 36,150 36,610 37,730 38,015 (620) 7,211 2016 37,954 39,416 40,947 40,916 (821) 6,452 2017 42,865 41,373 41,055 1,263 6,123 2018 41,347 40,115 5,365 5,700 2019 51,679 14,371 4,895 Total $ 333,172 Commercial Automobile Liability Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (Unaudited) 2010 $ 6,466 $ 11,520 $ 13,816 $ 15,821 $ 17,351 $ 17,892 $ 18,113 $ 18,269 $ 18,280 $ 18,297 2011 7,306 14,263 17,807 19,783 20,941 21,913 22,043 22,445 22,463 2012 6,503 12,474 15,617 17,804 18,876 20,601 21,021 22,086 2013 8,502 17,079 19,625 21,129 22,434 23,867 24,507 2014 9,426 17,853 21,968 25,253 27,886 30,420 2015 11,181 21,700 26,018 29,804 31,537 2016 9,991 19,902 25,711 32,274 2017 10,407 20,106 24,409 2018 9,704 18,499 2019 12,113 Total $ 236,605 All outstanding liabilities before 2010, net of reinsurance - Liabilities for claims and claim adjustment expenses, net of reinsurance $ 96,567 Commercial Automobile Physical Damage Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance As of December 31, 2019 For the Years Ended December 31, Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims Cumulative Number of Reported Claims Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (Unaudited) 2010 $ 10,048 $ 9,963 $ 9,893 $ 9,892 $ 10,077 $ 9,955 $ 9,916 $ 9,990 $ 9,990 $ 10,025 $ - 10,664 2011 11,511 11,151 11,031 10,960 10,952 10,910 10,952 11,024 11,048 - 11,488 2012 10,382 10,382 10,331 10,249 10,250 10,208 10,209 10,226 - 9,913 2013 13,666 13,567 13,298 13,180 13,057 13,047 13,071 5 12,298 2014 17,426 16,925 15,455 15,419 15,353 15,381 5 13,545 2015 20,223 19,047 19,021 18,974 18,641 100 15,468 2016 20,216 18,506 17,909 17,808 96 13,593 2017 19,691 19,200 19,021 103 13,112 2018 21,230 19,937 91 12,897 2019 20,039 220 12,010 Total $ 155,197 Commercial Automobile Physical Damage Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (Unaudited) 2010 $ 9,398 $ 10,219 $ 10,053 $ 10,039 $ 10,028 $ 10,025 $ 10,027 $ 10,026 $ 10,026 $ 10,025 2011 11,006 11,119 11,092 11,060 11,055 11,053 11,050 11,049 11,048 2012 9,707 10,553 10,270 10,242 10,239 10,235 10,228 10,226 2013 12,665 13,378 13,114 13,074 13,065 13,060 13,066 2014 15,377 15,862 15,424 15,388 15,381 15,376 2015 17,787 18,910 18,667 18,549 18,541 2016 17,228 18,143 17,763 17,712 2017 17,957 19,336 18,915 2018 18,842 19,842 2019 18,128 Total $ 152,879 All outstanding liabilities before 2010, net of reinsurance - Liabilities for claims and claim adjustment expenses, net of reinsurance $ 2,318 Homeowners Liability Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance As of December 31, 2019 For the Years Ended December 31, Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims Cumulative Number of Reported Claims Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (Unaudited) 2010 $ 5,591 $ 5,422 $ 5,422 $ 4,888 $ 4,717 $ 4,098 $ 3,735 $ 3,612 $ 3,457 $ 3,457 $ - 217 2011 6,260 7,644 7,644 7,531 6,923 6,017 5,546 4,845 4,845 - 304 2012 7,514 7,514 7,514 6,464 5,304 4,331 3,824 3,889 - 249 2013 9,768 9,768 9,337 7,578 5,978 5,312 5,147 (79) 264 2014 11,494 11,494 9,738 7,388 7,120 6,984 92 261 2015 12,965 12,555 9,908 9,201 9,201 (483) 287 2016 10,594 10,594 10,594 9,847 867 272 2017 11,276 10,058 9,328 346 265 2018 9,951 9,951 (1,402) 242 2019 14,130 5,132 208 Total $ 76,779 Homeowners Liability Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (Unaudited) 2010 $ 963 $ 1,420 $ 2,684 $ 2,890 $ 3,214 $ 3,425 $ 3,472 $ 3,457 $ 3,457 $ 3,457 2011 235 1,969 3,459 4,336 4,497 4,536 4,758 4,769 4,769 2012 1,389 2,063 2,308 2,731 3,029 3,600 3,606 3,646 2013 527 2,337 3,080 3,493 3,829 4,038 4,209 2014 340 1,834 3,212 4,200 4,828 6,315 2015 428 3,319 4,267 5,205 6,445 2016 647 2,669 4,257 5,387 2017 305 1,676 2,913 2018 551 2,039 2019 1,634 Total $ 40,814 All outstanding liabilities before 2010, net of reinsurance 3 Liabilities for claims and claim adjustment expenses, net of reinsurance $ 35,968 Homeowners Property Damage Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance As of December 31, 2019 For the Years Ended December 31, Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims Cumulative Number of Reported Claims Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (Unaudited) 2010 $ 45,342 $ 44,550 $ 43,021 $ 40,868 $ 39,921 $ 39,658 $ 39,501 $ 39,501 $ 39,097 $ 39,097 $ 173 6,685 2011 95,586 98,021 97,571 94,657 93,914 93,186 92,595 92,388 92,387 204 15,116 2012 50,351 49,911 47,392 44,380 43,097 42,382 41,895 41,887 148 6,051 2013 56,298 56,199 55,722 52,464 51,077 49,973 49,463 100 5,698 2014 59,160 60,213 59,751 57,331 55,127 54,607 284 6,077 2015 152,586 152,049 162,377 162,788 162,722 434 20,075 2016 67,116 66,442 64,208 61,262 1,334 5,419 2017 80,736 76,560 70,689 316 6,006 2018 83,443 82,581 (3,163) 8,223 2019 77,976 2,127 5,184 Total $ 732,671 Homeowners Property Damage Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (Unaudited) 2010 $ 25,761 $ 37,447 $ 38,790 $ 39,110 $ 39,145 $ 39,203 $ 39,235 $ 39,235 $ 38,923 $ 38,923 2011 71,532 89,741 92,184 92,462 92,444 92,333 92,182 92,182 92,182 2012 30,801 40,681 41,960 41,737 41,782 41,789 41,736 41,736 2013 38,661 48,456 49,702 49,612 49,653 49,620 49,328 2014 40,409 52,161 54,088 54,224 54,262 54,274 2015 112,563 145,337 160,572 161,745 161,773 2016 44,103 57,238 59,155 59,449 2017 46,366 64,401 66,181 2018 57,704 70,959 2019 49,121 Total $ 683,926 All outstanding liabilities before 2010, net of reinsurance 506 Liabilities for claims and claim adjustment expenses, net of reinsurance $ 49,251 |
Schedule of unaudited supplementary information related to incurred and paid claims development | Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Unaudited) Years 1 2 3 4 5 6 7 8 9 10 Private Passenger Automobile Liability 43.7% 32.0% 10.3% 6.5% 3.1% 1.7% 0.6% 0.2% 0.0% 0.0% Private Passenger Automobile Physical Damage 107.4% -5.1% -2.3% -0.4% -0.1% 0.0% 0.0% 0.0% 0.0% 0.0% Commercial Automobile Liability 27.5% 26.3% 12.5% 10.6% 5.9% 5.9% 1.6% 2.6% 0.1% 0.1% Commercial Automobile Physical Damage 95.4% 5.5% -1.9% -0.3% -0.1% 0.0% 0.0% 0.0% 0.0% 0.0% Homeowners Liability 9.1% 22.3% 16.9% 11.5% 8.9% 10.4% 2.6% 0.3% 0.0% 0.0% Homeowners Property Damage 70.6% 21.2% 4.8% 0.4% 0.0% 0.0% -0.2% 0.0% -0.2% 0.0% |
Schedule of reconciliation of the disclosure of Incurred and Paid Claims Development to the Liability for Unpaid claims and Claims Adjustment Expenses | Reconciliation of the Disclosure of Incurred and Paid Claims Development to the Liability for Unpaid claims and Claim Adjustment Expenses December 31, 2019 Net outstanding liabilities Private Passenger Automobile Liability $ 206,964 Private Passenger Automobile Physical Damage (8,509) Commercial Automobile Liability 96,567 Commercial Automobile Physical Damage 2,318 Homeowners Liability 35,968 Homeowners Property Damage 49,251 Other Short-Duration Insurance Lines 75,455 Liabilities for unpaid claims and claim adjustment expenses, net of reinsurance $ 458,014 Reinsurance recoverable on unpaid claims Private Passenger Automobile Liability $ 238 Private Passenger Automobile Physical Damage - Commercial Automobile Liability 116,756 Commercial Automobile Physical Damage 2,255 Homeowners Liability - Homeowners Property Damage 1 Other Short-Duration Insurance Lines 3,122 Total reinsurance recoverable on unpaid claims $ 122,372 Unallocated claims adjustment expenses 30,180 Total gross liability for unpaid claims and claim adjustment expenses $ 610,566 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Summary of income tax expense (benefit) in the Consolidated Statements of Operations | Years Ended December 31, 2019 2018 2017 Current Income Taxes: Federal $ 19,280 $ 26,548 $ 22,198 State 43 108 30 19,323 26,656 22,228 Deferred Income Taxes: Federal 4,757 (5,600) 2,085 State — — — 4,757 (5,600) 2,085 Total income tax expense $ 24,080 $ 21,056 $ 24,313 |
Schedule of sources of the difference and the tax effects | Years Ended December 31, 2019 2018 2017 Federal income tax expense at statutory rate $ 25,973 $ 21,893 $ 30,345 Tax‑exempt investment income, net (1,626) (1,862) (4,123) State taxes, net 34 85 19 Nondeductible expenses 488 494 237 Remeasurement of deferred tax liability upon enactment of the TCJA — — (1,540) Tax windfall related to share-based stock compensation (1,003) (79) (333) Other, net 214 525 (292) Total income tax expense $ 24,080 $ 21,056 $ 24,313 |
Schedule of deferred income tax asset (liability) representing the tax effects of temporary differences attributable to the Company's consolidated federal tax return group | Years Ended December 31, 2019 2018 Deferred tax assets: Discounting of loss reserves $ 5,642 $ 5,688 Discounting of unearned premium reserve 17,710 17,475 Investments — 1,972 Bad debt allowance 274 274 Employee benefits 4,340 4,159 Rent incentive 1,063 1,181 Total deferred tax assets before valuation allowance 29,029 30,749 Valuation allowance for deferred tax assets — — Total deferred tax assets 29,029 30,749 Deferred tax liabilities: Deferred acquisition costs (15,600) (15,405) Investments (1,744) — Net unrealized gains on investments (11,985) (1,645) Loss reserve transition adjustment (1,662) (2,229) Software development costs (2,109) (1,268) Premium acquisition expenses (509) (512) Depreciation (1,137) (941) Total deferred tax liabilities (34,746) (22,000) Net deferred tax (liability) asset $ (5,717) $ 8,749 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value of Financial Instruments | |
Fair value measurements for investments | As of December 31, 2019 Total Level 1 Inputs Level 2 Inputs Level 3 Inputs U.S. Treasury securities $ 1,512 $ — $ 1,512 $ — Obligations of states and political subdivisions 251,396 — 251,396 — Residential mortgage-backed securities 307,202 — 307,202 — Commercial mortgage-backed securities 109,738 — 109,738 — Other asset-backed securities 36,222 — 36,222 — Corporate and other securities 521,970 — 521,970 — Equity securities 144,877 144,361 — 516 Total investment securities $ 1,372,917 $ 144,361 $ 1,228,040 $ 516 As of December 31, 2018 Total Level 1 Inputs Level 2 Inputs Level 3 Inputs U.S. Treasury securities $ 1,777 $ — $ 1,777 $ — Obligations of states and political subdivisions 266,198 — 266,198 — Residential mortgage-backed securities 297,023 — 297,023 — Commercial mortgage-backed securities 60,336 — 60,336 — Other asset-backed securities 61,076 — 61,076 — Corporate and other securities 475,452 — 475,452 — Equity securities 116,173 115,493 — 680 Total investment securities $ 1,278,035 $ 115,493 $ 1,161,862 $ 680 |
Changes in the Company's Level 3 fair value securities | Years Ended December 31, 2019 2018 2017 Balance at beginning of period $ 680 $ 680 $ 678 Net gains and losses included in earnings — — — Net gains included in other comprehensive income — — — Purchases 133 — 2 Sales (297) — — Transfers into Level 3 — — — Transfers out of Level 3 — — — Balance at end of period $ 516 $ 680 $ 680 |
Quarterly Results of Operatio_2
Quarterly Results of Operations (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Results of Operations | |
Summary of the Company's unaudited of quarterly performance, and audited annual performance results of operations | Year ended December 31, 2019 First Second Third Fourth Total Quarter Quarter Quarter Quarter Year Total revenue $ 222,579 $ 216,002 $ 215,273 $ 223,899 $ 877,753 Net income 29,946 25,934 15,619 28,102 99,601 Earnings per weighted average common share: Basic 1.97 1.70 1.02 1.84 6.52 Diluted 1.95 1.68 1.01 1.82 6.46 Cash dividends paid per common share 0.80 0.80 0.90 0.90 3.40 Year ended December 31, 2018 First Second Third Fourth Total Quarter Quarter Quarter Quarter Year Total revenue $ 209,719 $ 207,970 $ 215,907 $ 202,901 $ 836,497 Net income 9,125 26,816 28,908 18,346 83,195 Earnings per weighted average common share: Basic 0.60 1.77 1.90 1.21 5.48 Diluted 0.60 1.75 1.88 1.19 5.43 Cash dividends paid per common share 0.80 0.80 0.80 0.80 3.20 |
Basis of Presentation (Details)
Basis of Presentation (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Basis of Presentation | |
Percentage of private passenger automobile insurance to total direct written premiums | 54.80% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) $ / shares in Units, $ in Thousands | Jan. 01, 2018USD ($) | Dec. 22, 2017 | Dec. 31, 2019USD ($)$ / shares | Sep. 30, 2019USD ($)$ / shares | Jun. 30, 2019USD ($)$ / shares | Mar. 31, 2019USD ($)$ / shares | Dec. 31, 2018USD ($)$ / shares | Sep. 30, 2018USD ($)$ / shares | Jun. 30, 2018USD ($)$ / shares | Mar. 31, 2018USD ($)$ / shares | Dec. 31, 2019USD ($)segment$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Jan. 01, 2019USD ($) |
Accounting Policies [Line Items] | ||||||||||||||
Operating lease liability | $ 33,998 | $ 33,998 | ||||||||||||
Investments | ||||||||||||||
Maximum period considered for applying equity method accounting based on financial information provided by the investee | 3 months | |||||||||||||
Accounts Receivable | ||||||||||||||
Premiums receivable, allowance for doubtful accounts | 578 | $ 482 | $ 578 | $ 482 | ||||||||||
Deferred Policy Acquisition Costs | ||||||||||||||
Amortization expense | 147,945 | 146,601 | $ 144,703 | |||||||||||
Marketing and Advertising Expense [Abstract] | ||||||||||||||
Advertising costs | 2,182 | 2,500 | 2,216 | |||||||||||
Earnings per Weighted Average Common Share | ||||||||||||||
Net income from continuing operations | $ 28,102 | $ 15,619 | $ 25,934 | $ 29,946 | $ 18,346 | $ 28,908 | $ 26,816 | $ 9,125 | 99,601 | 83,195 | 62,387 | |||
Allocation of income for participating shares | (523) | (496) | (392) | |||||||||||
Net income from continuing operations attributed to common shareholders | $ 99,078 | $ 82,699 | $ 61,995 | |||||||||||
Total weighted average common shares outstanding, including participating shares | shares | 15,281,363 | 15,170,754 | 15,105,558 | |||||||||||
Less: weighted average participating shares | shares | (80,231) | (90,485) | (94,807) | |||||||||||
Basic earnings per share denominator | shares | 15,201,132 | 15,080,269 | 15,010,751 | |||||||||||
Common equivalent shares- non-vested performance stock grants | shares | 136,675 | 149,629 | 124,597 | |||||||||||
Diluted earnings per share denominator | shares | 15,337,807 | 15,229,898 | 15,135,348 | |||||||||||
Basic earnings per share (in dollars per share) | $ / shares | $ 1.84 | $ 1.02 | $ 1.70 | $ 1.97 | $ 1.21 | $ 1.90 | $ 1.77 | $ 0.60 | $ 6.52 | $ 5.48 | $ 4.13 | |||
Diluted earnings per share (in dollars per share) | $ / shares | 1.82 | 1.01 | 1.68 | 1.95 | 1.19 | 1.88 | 1.75 | 0.60 | $ 6.46 | $ 5.43 | 4.10 | |||
Antidilutive common shares | shares | 0 | 0 | ||||||||||||
Undistributed Earnings, Diluted [Abstract] | ||||||||||||||
Basic earnings per share (in dollars per share) | $ / shares | 1.84 | 1.02 | 1.70 | 1.97 | 1.21 | 1.90 | 1.77 | 0.60 | $ 6.52 | $ 5.48 | 4.13 | |||
Dividends declared | $ / shares | (3.40) | (3.20) | (3) | |||||||||||
Undistributed earnings (loss) | $ / shares | 3.12 | 2.28 | 1.13 | |||||||||||
Diluted earnings per share (in dollars per share) | $ / shares | $ 1.82 | $ 1.01 | $ 1.68 | $ 1.95 | $ 1.19 | $ 1.88 | $ 1.75 | $ 0.60 | 6.46 | 5.43 | 4.10 | |||
Undistributed earnings (loss) - Diluted | $ / shares | $ 3.06 | $ 2.23 | $ 1.10 | |||||||||||
Premiums and Unearned Premiums | ||||||||||||||
Term over which premiums are earned | 1 year | |||||||||||||
Deferred revenue | $ 14,628 | $ 14,649 | ||||||||||||
Segments | ||||||||||||||
Number of business segments | segment | 1 | |||||||||||||
Cumulative effect of adoption of updated accounting guidance for callable debt securities at January 1, 2019 | $ 2,373 | $ 2,373 | $ (2,373) | |||||||||||
Statutory tax rate | 35.00% | 21.00% | ||||||||||||
Minimum | ||||||||||||||
Equipment and Leasehold Improvements | ||||||||||||||
Estimated useful lives | 3 years | |||||||||||||
Maximum | ||||||||||||||
Equipment and Leasehold Improvements | ||||||||||||||
Estimated useful lives | 10 years | |||||||||||||
Accounting Standards Update 2017-03 | ||||||||||||||
Segments | ||||||||||||||
Cumulative Effect of Adoption of ASU 2018-02 in Period of Adoption | $ (4,736) | |||||||||||||
Accounting Standards Update 2016-01 | ||||||||||||||
Segments | ||||||||||||||
Cumulative effect of change in accounting principle | $ 16,895 | |||||||||||||
Accounting Standards Update 2016-02 | Restatement Adjustment | ||||||||||||||
Accounting Policies [Line Items] | ||||||||||||||
Operating lease liability | $ 35,984 |
Investments (Details)
Investments (Details) $ in Thousands | Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($)item |
Marketable Securities | ||
Fixed maturity securities, amortized cost | $ 1,192,357 | $ 1,175,413 |
Fixed maturity securities, Gross Unrealized Gains | 38,321 | 8,782 |
Fixed maturity securities, Non-OTTI Gross Unrealized Losses | (2,638) | (22,333) |
Fixed maturity securities, Estimated Fair Value | 1,228,040 | 1,161,862 |
Equity securities, Cost or Amortized Cost | 151,121 | 142,948 |
Equity securities, Estimated Fair Value | 177,637 | 148,011 |
Other invested assets, Cost or Amortized Cost | 37,278 | 23,481 |
Cost or Amortized Cost | 1,380,756 | 1,341,842 |
Gross Unrealized Gains | 66,200 | 24,201 |
Gross Non-OTTI Unrealized Losses | (4,001) | (32,689) |
Estimated Fair Value | $ 1,442,955 | $ 1,333,354 |
Number of securities in an unrealized loss position | item | 229 | 958 |
U.S. Treasury securities | ||
Marketable Securities | ||
Fixed maturity securities, amortized cost | $ 1,504 | $ 1,807 |
Fixed maturity securities, Gross Unrealized Gains | 8 | |
Fixed maturity securities, Non-OTTI Gross Unrealized Losses | (30) | |
Fixed maturity securities, Estimated Fair Value | 1,512 | 1,777 |
Obligations of states and political subdivisions | ||
Marketable Securities | ||
Fixed maturity securities, amortized cost | 241,597 | 262,772 |
Fixed maturity securities, Gross Unrealized Gains | 9,799 | 5,098 |
Fixed maturity securities, Non-OTTI Gross Unrealized Losses | (1,672) | |
Fixed maturity securities, Estimated Fair Value | 251,396 | 266,198 |
Residential mortgage-backed securities | ||
Marketable Securities | ||
Fixed maturity securities, amortized cost | 301,503 | 300,387 |
Fixed maturity securities, Gross Unrealized Gains | 6,608 | 1,477 |
Fixed maturity securities, Non-OTTI Gross Unrealized Losses | (909) | (4,841) |
Fixed maturity securities, Estimated Fair Value | 307,202 | 297,023 |
Commercial mortgage-backed securities | ||
Marketable Securities | ||
Fixed maturity securities, amortized cost | 106,902 | 60,897 |
Fixed maturity securities, Gross Unrealized Gains | 3,233 | 337 |
Fixed maturity securities, Non-OTTI Gross Unrealized Losses | (397) | (898) |
Fixed maturity securities, Estimated Fair Value | 109,738 | 60,336 |
Other asset-backed securities | ||
Marketable Securities | ||
Fixed maturity securities, amortized cost | 36,068 | 61,310 |
Fixed maturity securities, Gross Unrealized Gains | 218 | 95 |
Fixed maturity securities, Non-OTTI Gross Unrealized Losses | (64) | (329) |
Fixed maturity securities, Estimated Fair Value | 36,222 | 61,076 |
Corporate and other securities | ||
Marketable Securities | ||
Fixed maturity securities, amortized cost | 504,783 | 488,240 |
Fixed maturity securities, Gross Unrealized Gains | 18,455 | 1,775 |
Fixed maturity securities, Non-OTTI Gross Unrealized Losses | (1,268) | (14,563) |
Fixed maturity securities, Estimated Fair Value | 521,970 | 475,452 |
Equity securities | ||
Marketable Securities | ||
Equity securities, Cost or Amortized Cost | 151,121 | 142,948 |
Equity securities, Gross Unrealized Gains | 27,879 | 15,419 |
Equity securities, Non-OTTI Gross Unrealized Losses | (1,363) | (10,356) |
Equity securities, Estimated Fair Value | 177,637 | 148,011 |
Other invested assets | ||
Marketable Securities | ||
Other invested assets, Cost or Amortized Cost | 37,278 | 23,481 |
Other invested assets, Estimated Fair Value | $ 37,278 | $ 23,481 |
Investments Amortized Cost and
Investments Amortized Cost and Estimated Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Amortized Cost | ||
Due in one year or less, Amortized Cost | $ 46,850 | |
Due after one year through five years, Amortized Cost | 309,662 | |
Due after five years though ten years, Amortized Cost | 306,656 | |
Due after ten years through twenty years, Amortized Cost | 83,872 | |
Due after twenty years, Amortized Cost | 846 | |
Asset-backed securities, Amortized Cost | 444,471 | |
Totals, Amortized Cost | 1,192,357 | $ 1,175,413 |
Estimated Fair Value | ||
Due in one year or less, Fair Value | 47,146 | |
Due after one year through five years, Fair Value | 317,821 | |
Due after five years through ten years, Fair Value | 321,000 | |
Due after ten years through twenty years, Fair Value | 87,952 | |
Due after twenty years, Fair Value | 961 | |
Asset-backed securities, Fair Value | 453,160 | |
Totals, Fair Value | $ 1,228,040 | $ 1,161,862 |
Investments Gross Realized Gain
Investments Gross Realized Gains and Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Investments | |||
Gross realized gains fixed maturity securities | $ 1,294 | $ 1,022 | $ 1,468 |
Gross realized gains equity securities | 4,536 | 5,129 | 5,244 |
Gross realized losses fixed maturities | (1,805) | (1,878) | (504) |
Gross realized losses equity securities | (1,049) | (1,047) | (172) |
Net realized gains on investments | $ 2,976 | $ 3,226 | $ 6,036 |
Investments Gross Unrealized Lo
Investments Gross Unrealized Losses and Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fixed Maturity Securities | ||
Estimated Fair Value, Less than 12 Months | $ 154,847 | $ 561,700 |
Estimated Fair Value, 12 Months or More | 60,844 | 282,665 |
Estimated Fair Value, Total | 215,691 | 844,365 |
Unrealized Losses, Less than 12 Months | 1,742 | 21,887 |
Unrealized Losses, 12 Months or More | 2,259 | 10,802 |
Unrealized Losses, Total | 4,001 | 32,689 |
Fixed maturity securities | ||
Fixed Maturity Securities | ||
Estimated Fair Value, Less than 12 Months | 145,998 | 490,261 |
Estimated Fair Value, 12 Months or More | 46,701 | 280,593 |
Estimated Fair Value, Total | 192,699 | 770,854 |
Unrealized Losses, Less than 12 Months | 1,351 | 11,932 |
Unrealized Losses, 12 Months or More | 1,287 | 10,401 |
Unrealized Losses, Total | 2,638 | 22,333 |
U.S. Treasury securities | ||
Fixed Maturity Securities | ||
Estimated Fair Value, 12 Months or More | 1,777 | |
Estimated Fair Value, Total | 1,777 | |
Unrealized Losses, 12 Months or More | 30 | |
Unrealized Losses, Total | 30 | |
Obligations of states and political subdivisions | ||
Fixed Maturity Securities | ||
Estimated Fair Value, Less than 12 Months | 80,856 | |
Estimated Fair Value, 12 Months or More | 16,049 | |
Estimated Fair Value, Total | 96,905 | |
Unrealized Losses, Less than 12 Months | 707 | |
Unrealized Losses, 12 Months or More | 965 | |
Unrealized Losses, Total | 1,672 | |
Residential mortgage-backed securities | ||
Fixed Maturity Securities | ||
Estimated Fair Value, Less than 12 Months | 61,933 | 64,101 |
Estimated Fair Value, 12 Months or More | 31,655 | 138,572 |
Estimated Fair Value, Total | 93,588 | 202,673 |
Unrealized Losses, Less than 12 Months | 409 | 694 |
Unrealized Losses, 12 Months or More | 500 | 4,147 |
Unrealized Losses, Total | 909 | 4,841 |
Commercial mortgage-backed securities | ||
Fixed Maturity Securities | ||
Estimated Fair Value, Less than 12 Months | 36,398 | 22,652 |
Estimated Fair Value, 12 Months or More | 866 | 13,117 |
Estimated Fair Value, Total | 37,264 | 35,769 |
Unrealized Losses, Less than 12 Months | 397 | 270 |
Unrealized Losses, 12 Months or More | 628 | |
Unrealized Losses, Total | 397 | 898 |
Other asset-backed securities | ||
Fixed Maturity Securities | ||
Estimated Fair Value, Less than 12 Months | 21,281 | 33,866 |
Estimated Fair Value, 12 Months or More | 462 | 23,532 |
Estimated Fair Value, Total | 21,743 | 57,398 |
Unrealized Losses, Less than 12 Months | 64 | 112 |
Unrealized Losses, 12 Months or More | 217 | |
Unrealized Losses, Total | 64 | 329 |
Corporate and other securities | ||
Fixed Maturity Securities | ||
Estimated Fair Value, Less than 12 Months | 26,386 | 288,786 |
Estimated Fair Value, 12 Months or More | 13,718 | 87,546 |
Estimated Fair Value, Total | 40,104 | 376,332 |
Unrealized Losses, Less than 12 Months | 481 | 10,149 |
Unrealized Losses, 12 Months or More | 787 | 4,414 |
Unrealized Losses, Total | 1,268 | 14,563 |
Equity securities | ||
Fixed Maturity Securities | ||
Estimated Fair Value, Less than 12 Months | 8,849 | 71,439 |
Estimated Fair Value, 12 Months or More | 14,143 | 2,072 |
Estimated Fair Value, Total | 22,992 | 73,511 |
Unrealized Losses, Less than 12 Months | 391 | 9,955 |
Unrealized Losses, 12 Months or More | 972 | 401 |
Unrealized Losses, Total | $ 1,363 | $ 10,356 |
Investments Other (Details)
Investments Other (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($)period | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Other-Than-Temporary Impairments | |||
Securities held | $ 1,228,040 | $ 1,161,862 | |
Material loss threshold, percentage | 20.00% | ||
Material loss threshold, number of consecutive quarters | period | 4 | ||
Other than Temporary Impairment, Credit Losses Recognized in Earnings | |||
Credit losses on fixed maturity securities, beginning of period | $ 844 | 892 | $ 1,094 |
Add: credit losses on OTTI not previously recognized | 889 | 228 | 256 |
Less: credit losses on securities sold | (1,064) | (276) | (458) |
Credit losses on fixed maturity securities, end of period | 669 | $ 844 | $ 892 |
Amounts included in accumulated other comprehensive income related to OTTI securities | 0 | ||
Short-term Investments | 0 | ||
Subprime mortgage debt securities | |||
Other-Than-Temporary Impairments | |||
Securities held | $ 0 |
Investments Components of Net I
Investments Components of Net Investment Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Components of net investment income | |||
Interest on fixed maturity securities | $ 42,892 | $ 40,988 | $ 37,246 |
Dividends on equity securities | 5,268 | 4,500 | 3,093 |
Equity in earnings of other invested assets | 1,552 | 1,182 | 1,016 |
Interest on other assets | 32 | 62 | 89 |
Total investment income | 49,744 | 46,732 | 41,444 |
Investment expenses | 3,079 | 2,944 | 2,686 |
Net investment income | $ 46,665 | $ 43,788 | $ 38,758 |
Investments Fair Value Measurem
Investments Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fair value of financial instruments | ||
Fixed maturity securities, Estimated Fair Value | $ 1,228,040 | $ 1,161,862 |
Equity securities, Estimated Fair Value | 177,637 | 148,011 |
Marketable Securities, Total | 1,228,040 | 1,161,862 |
Level 1 Inputs | ||
Fair value of financial instruments | ||
Marketable Securities, Total | 144,361 | 115,493 |
Level 1 Inputs | Equity securities | ||
Fair value of financial instruments | ||
Equity securities, Estimated Fair Value | 144,361 | 115,493 |
Level 2 Inputs | ||
Fair value of financial instruments | ||
Marketable Securities, Total | 1,228,040 | 1,161,862 |
Level 2 Inputs | U.S. Treasury securities | ||
Fair value of financial instruments | ||
Fixed maturity securities, Estimated Fair Value | 1,512 | 1,777 |
Level 2 Inputs | Obligations of states and political subdivisions | ||
Fair value of financial instruments | ||
Fixed maturity securities, Estimated Fair Value | 251,396 | 266,198 |
Level 2 Inputs | Residential mortgage-backed securities | ||
Fair value of financial instruments | ||
Fixed maturity securities, Estimated Fair Value | 307,202 | 297,023 |
Level 2 Inputs | Commercial mortgage-backed securities | ||
Fair value of financial instruments | ||
Fixed maturity securities, Estimated Fair Value | 109,738 | 60,336 |
Level 2 Inputs | Other asset-backed securities | ||
Fair value of financial instruments | ||
Fixed maturity securities, Estimated Fair Value | 36,222 | 61,076 |
Level 2 Inputs | Corporate and other securities | ||
Fair value of financial instruments | ||
Fixed maturity securities, Estimated Fair Value | 521,970 | 475,452 |
Level 3 Inputs | ||
Fair value of financial instruments | ||
Marketable Securities, Total | 516 | 680 |
Level 3 Inputs | Equity securities | ||
Fair value of financial instruments | ||
Equity securities, Estimated Fair Value | 516 | 680 |
Total | ||
Fair value of financial instruments | ||
Marketable Securities, Total | 1,372,917 | 1,278,035 |
Total | U.S. Treasury securities | ||
Fair value of financial instruments | ||
Fixed maturity securities, Estimated Fair Value | 1,512 | 1,777 |
Total | Obligations of states and political subdivisions | ||
Fair value of financial instruments | ||
Fixed maturity securities, Estimated Fair Value | 251,396 | 266,198 |
Total | Residential mortgage-backed securities | ||
Fair value of financial instruments | ||
Fixed maturity securities, Estimated Fair Value | 307,202 | 297,023 |
Total | Commercial mortgage-backed securities | ||
Fair value of financial instruments | ||
Fixed maturity securities, Estimated Fair Value | 109,738 | 60,336 |
Total | Other asset-backed securities | ||
Fair value of financial instruments | ||
Fixed maturity securities, Estimated Fair Value | 36,222 | 61,076 |
Total | Corporate and other securities | ||
Fair value of financial instruments | ||
Fixed maturity securities, Estimated Fair Value | 521,970 | 475,452 |
Total | Equity securities | ||
Fair value of financial instruments | ||
Equity securities, Estimated Fair Value | $ 144,877 | $ 116,173 |
Investments Level 3 and Other (
Investments Level 3 and Other (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Transfers between Levels | |||
Transfers from Level 1 to Level 2 | $ 0 | ||
Transfers from Level 2 to Level 1 | $ 0 | $ 0 | |
Changes in the Company's Level 3 fair value securities | |||
Balance at beginning of period | 680 | 680 | 678 |
Purchases | 133 | 2 | |
Sales | (297) | ||
Transfers into Level 3 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 |
Balance at end of period | $ 516 | 680 | $ 680 |
Period of advance notice before quarter end | 45 days | ||
Accounting Standards Update 2015-07 | |||
Changes in the Company's Level 3 fair value securities | |||
Alternative investments fair value | $ 32,760 | $ 31,838 |
Equipment and Leasehold Impro_3
Equipment and Leasehold Improvements (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, plant and equipment | |||
Total cost | $ 70,458 | $ 60,865 | |
Less accumulated depreciation and amortization | 50,447 | 45,281 | |
Equipment and leasehold improvements, net | 20,011 | 15,584 | |
Depreciation and amortization | 5,166 | 5,464 | $ 5,037 |
Software | |||
Property, plant and equipment | |||
Total cost | 42,516 | 36,161 | |
Computer equipment | |||
Property, plant and equipment | |||
Total cost | 12,412 | 9,195 | |
Leasehold improvements | |||
Property, plant and equipment | |||
Total cost | 8,264 | 8,264 | |
Other equipment | |||
Property, plant and equipment | |||
Total cost | 3,132 | 3,116 | |
Furniture and fixtures | |||
Property, plant and equipment | |||
Total cost | $ 4,134 | $ 4,129 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Employee Benefit Plan | |||
Minimum age required to be eligible for contribution under the Retirement Plan | 21 years | ||
Employer matching contribution (as a percent) | 100.00% | ||
Maximum amount contributed by employee from employees base salary (as a percent) | 8.00% | ||
Compensation expense | $ 3,365 | $ 3,302 | $ 3,164 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) | Dec. 31, 2019shares |
Maximum number of shares of common stock with respect to which awards may be granted | 2,850,000 |
Number of shares available for future grant | 293,031 |
The Incentive Plan | |
Number of shares available for future grant | 0 |
2018 Long Term Incentive Plan | |
Number of shares available for future grant | 350,000 |
Share-Based Compensation Restri
Share-Based Compensation Restricted Stock Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-Based Compensation | |||
Vesting period | 3 years | ||
Weighted Average Fair Value | |||
Unrecognized compensation expense related to non-vested restricted stock awards | $ 6,119 | ||
Weighted average period expected for recognition of compensation expense related to non-vested restricted stock awards | 1 year 6 months | ||
Total fair value of the shares that were vested and unrestricted during the period | $ 7,784 | $ 4,413 | $ 3,387 |
Compensation Expense, Net of Tax | 4,764 | 5,197 | 3,358 |
Income tax benefits from compensation expense | $ 1,266 | $ 1,382 | $ 1,808 |
Performance-based Shares Under Restriction | |||
Share-Based Compensation | |||
Vesting period | 3 years | ||
Shares Under Restriction | |||
Outstanding at beginning of year (in shares) | 105,170 | 105,660 | 94,610 |
Granted (in shares) | 63,447 | 31,832 | 29,829 |
Vested and unrestricted (in shares) | (84,512) | (27,801) | (18,259) |
Forfeited (in shares) | (4,521) | (520) | |
Outstanding at end of period (in shares) | 84,105 | 105,170 | 105,660 |
Weighted Average Fair Value | |||
Outstanding at beginning of year (in dollars per share) | $ 66.79 | $ 62.75 | $ 57.60 |
Granted (in dollars per share) | 69.61 | 75.14 | 74.96 |
Vested and unrestricted (in dollars per share) | 56.42 | 61.50 | 53.99 |
Forfeited (in dollars per share) | 62.41 | 53.99 | |
Outstanding at end of period (in dollars per share) | $ 79.34 | $ 66.79 | $ 62.75 |
Performance-based Shares Under Restriction | Minimum | |||
Share-Based Compensation | |||
Actual Payouts (as a percent) | 0.00% | ||
Performance-based Shares Under Restriction | Maximum | |||
Share-Based Compensation | |||
Actual Payouts (as a percent) | 200.00% | ||
Restricted Stock | |||
Shares Under Restriction | |||
Outstanding at beginning of year (in shares) | 89,135 | 93,086 | 95,493 |
Granted (in shares) | 33,778 | 39,451 | 40,226 |
Vested and unrestricted (in shares) | (44,085) | (43,276) | (42,453) |
Forfeited (in shares) | (626) | (126) | (180) |
Outstanding at end of period (in shares) | 78,202 | 89,135 | 93,086 |
Weighted Average Fair Value | |||
Outstanding at beginning of year (in dollars per share) | $ 68.70 | $ 63.13 | $ 55.86 |
Granted (in dollars per share) | 92.52 | 75.05 | 73.42 |
Vested and unrestricted (in dollars per share) | 68.41 | 62.46 | 56.56 |
Forfeited (in dollars per share) | 75.50 | 70.63 | 63.87 |
Outstanding at end of period (in dollars per share) | $ 79.09 | $ 68.70 | $ 63.13 |
Restricted Stock | Executives and non-executives (2018 and after) | |||
Share-Based Compensation | |||
Vesting period | 5 years | ||
Restricted Stock | First anniversary of grant date | |||
Share-Based Compensation | |||
Actual Payouts (as a percent) | 30.00% | ||
Restricted Stock | Second anniversary of grant date | |||
Share-Based Compensation | |||
Actual Payouts (as a percent) | 30.00% | ||
Restricted Stock | Third anniversary of grant date | |||
Share-Based Compensation | |||
Actual Payouts (as a percent) | 40.00% |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Limited partnership commitments $ in Thousands | Dec. 31, 2019USD ($) |
Commitments and Contingencies | |
Investment in limited partnership, committed amount | $ 80,000 |
Contributions to be made | 32,721 |
Contribution made | $ 49,587 |
Leases - Remaining Lease Term (
Leases - Remaining Lease Term (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Leases | |||
Rental Expense | $ 4,573 | $ 3,531 | $ 4,557 |
Lease, Practical Expedients, Package [true false] | true | ||
Lease, Practical Expedient, Use of Hindsight [true false] | false | ||
Operating lease, existence of option to extend | true | ||
Minimum | |||
Leases | |||
Operating lease, remaining lease term | 1 year | ||
Maximum | |||
Leases | |||
Operating lease, remaining lease term | 10 years | ||
Operating lease, renewal term | 5 years |
Leases (Details)
Leases (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases | |
Operating lease cost | $ 4,645 |
Operating cash flows from operating leases | $ 5,082 |
Weighted average remaining lease term Operating leases | 8 years 5 months 1 day |
Weighted average discount rate Operating leases | 2.39% |
Leases (Maturities) (Details)
Leases (Maturities) (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases | |
2020 | $ 4,998 |
2021 | 4,798 |
2022 | 4,270 |
2023 | 3,879 |
2024 | 3,875 |
Thereafter | 15,405 |
Total lease payments | 37,225 |
Less imputed interest | (3,227) |
Total | $ 33,998 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revolving Credit Agreement | LIBOR rate | ||
Debt | ||
Variable interest rate basis | LIBOR | |
Spread on variable rate (as a percent) | 1.25% | |
Revolving Credit Agreement | Prime rate | ||
Debt | ||
Variable interest rate basis | prime rate | |
Revolving Credit Agreement | Federal Funds Effective Swap Rate | ||
Debt | ||
Variable interest rate basis | federal funds rate | |
Spread on variable rate (as a percent) | 1.25% | |
Additional spread on variable rate (as a percent) | 0.50% | |
RBS Citizens | Revolving Credit Agreement | ||
Debt | ||
Current borrowing capacity | $ 30,000 | |
Maximum borrowing capacity | 50,000 | |
Default trigger, principal amount | 10,000 | |
Outstanding amount | $ 0 | $ 0 |
Commitment fee (as a percent) | 0.25% | 0.25% |
F H L B Boston | ||
Debt | ||
Outstanding amount | $ 0 | |
Maximum borrowing capacity using eligible invested assets as collateral | $ 289,507 |
Reinsurance (Details)
Reinsurance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reinsurance | |||
Prepaid Reinsurance Premiums | $ 35,182 | $ 33,974 | |
CAR | Reinsurance Recoverable Including Reinsurance Premium Paid [Member] | Concentration of credit risk | |||
Reinsurance | |||
Reinsurance receivables on paid and unpaid loss and LAE | 130,005 | 113,544 | |
Assumed net losses | 3,595 | 5,362 | $ 5,444 |
Prepaid Reinsurance Premiums | $ 33,587 | $ 32,447 |
Reinsurance Written and Earned
Reinsurance Written and Earned Premiums (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Written Premiums | |||
Direct | $ 852,404 | $ 843,675 | $ 827,316 |
Assumed | 32,391 | 32,403 | 34,214 |
Ceded | (90,386) | (89,166) | (80,476) |
Net written premiums | 794,409 | 786,912 | 781,054 |
Earned Premiums | |||
Direct | 845,102 | 836,759 | 818,804 |
Assumed | 32,853 | 32,196 | 32,502 |
Ceded | (89,178) | (87,368) | (76,886) |
Net earned premiums | 788,777 | 781,587 | 774,420 |
Loss and LAE | |||
Direct | 562,192 | 538,569 | 517,146 |
Assumed | 28,529 | 28,815 | 28,003 |
Ceded | (80,875) | (81,871) | (41,262) |
Net loss and LAE | $ 509,846 | $ 485,513 | $ 503,887 |
Loss and Loss Adjustment Expe_3
Loss and Loss Adjustment Expense Reserves (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Loss and Loss Adjustment Expense Reserves | |||
Reserves for losses and LAE at beginning of year | $ 584,719 | $ 574,054 | $ 560,321 |
Less receivable from reinsurers related to unpaid losses and LAE | (108,398) | (83,085) | (83,724) |
Net reserves for losses and LAE at beginning of year | 476,321 | 490,969 | 476,597 |
Incurred losses and LAE, related to: | |||
Current year | 551,895 | 542,001 | 545,671 |
Prior years | (42,049) | (56,488) | (41,784) |
Total incurred losses and LAE | 509,846 | 485,513 | 503,887 |
Paid losses and LAE related to: | |||
Current year | 333,377 | 340,927 | 325,049 |
Prior years | 164,596 | 159,234 | 164,466 |
Total paid losses and LAE | 497,973 | 500,161 | 489,515 |
Net reserves for losses and LAE at end of period | 488,194 | 476,321 | 490,969 |
Plus receivable from reinsurers related to unpaid losses and LAE | 122,372 | 108,398 | 83,085 |
Reserves for losses and LAE at end of period | 610,566 | 584,719 | 574,054 |
Prior years | 42,049 | 56,488 | 41,784 |
Reduction in retained automobile reserves | 25,623 | 36,266 | 29,855 |
Reduction in retained homeowners reserves | $ 14,182 | $ 18,947 | $ 10,201 |
Loss and Loss Adjustment Expe_4
Loss and Loss Adjustment Expense Reserves - Incurred and paid claims development (Details) | Dec. 31, 2019USD ($)claim | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2011USD ($) | Dec. 31, 2010USD ($) |
incurred and paid claims development | ||||||||||
Liabilities for claims and claims adjustment expenses, net of reinsurance | $ 458,014,000 | |||||||||
Private Passenger Automobile Liability | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 1,742,466,000 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | 1,535,849,000 | |||||||||
All outstanding liabilities before 2010, net of reinsurance | 347,000 | |||||||||
Liabilities for claims and claims adjustment expenses, net of reinsurance | 206,964,000 | |||||||||
Private Passenger Automobile Physical Damage | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 1,185,941,000 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | 1,194,450,000 | |||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance | (8,509,000) | |||||||||
Commercial Automobile Liability | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 333,172,000 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | 236,605,000 | |||||||||
Liabilities for claims and claims adjustment expenses, net of reinsurance | 96,567,000 | |||||||||
Commercial Automobile Physical Damage | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 155,197,000 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | 152,879,000 | |||||||||
All outstanding liabilities before 2010, net of reinsurance | ||||||||||
Liabilities for claims and claims adjustment expenses, net of reinsurance | 2,318,000 | |||||||||
Homeowners Liability | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 76,779,000 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | 40,814,000 | |||||||||
All outstanding liabilities before 2010, net of reinsurance | 3,000 | |||||||||
Liabilities for claims and claims adjustment expenses, net of reinsurance | 35,968,000 | |||||||||
Homeowners Property Damage | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 732,671,000 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | 683,926,000 | |||||||||
All outstanding liabilities before 2010, net of reinsurance | 506,000 | |||||||||
Liabilities for claims and claims adjustment expenses, net of reinsurance | 49,251,000 | |||||||||
2010 | Private Passenger Automobile Liability | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | $ 161,212,000 | $ 161,236,000 | $ 162,679,000 | $ 163,206,000 | $ 164,723,000 | $ 166,195,000 | 170,089,000 | 171,978,000 | 172,558,000 | 169,426,000 |
Cumulative Number of Reported claims | claim | 54,933 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 161,112,000 | 161,114,000 | 161,080,000 | 160,859,000 | 160,192,000 | 157,887,000 | 153,408,000 | 142,688,000 | 126,734,000 | 73,721,000 |
2010 | Private Passenger Automobile Physical Damage | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | $ 96,309,000 | 96,335,000 | 96,323,000 | 96,325,000 | 96,366,000 | 96,385,000 | 96,485,000 | 96,642,000 | 98,463,000 | 101,456,000 |
Cumulative Number of Reported claims | claim | 128,202 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 96,309,000 | 96,306,000 | 96,317,000 | 96,325,000 | 96,335,000 | 96,369,000 | 96,444,000 | 96,587,000 | 98,445,000 | 101,635,000 |
2010 | Commercial Automobile Liability | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 18,547,000 | 18,495,000 | 18,725,000 | 19,034,000 | 19,285,000 | 19,763,000 | 19,576,000 | 19,493,000 | 19,922,000 | 20,150,000 |
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ 10,000 | |||||||||
Cumulative Number of Reported claims | 4,531 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 18,297,000 | 18,280,000 | 18,269,000 | 18,113,000 | 17,892,000 | 17,351,000 | 15,821,000 | 13,816,000 | 11,520,000 | 6,466,000 |
2010 | Commercial Automobile Physical Damage | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | $ 10,025,000 | 9,990,000 | 9,990,000 | 9,916,000 | 9,955,000 | 10,077,000 | 9,892,000 | 9,893,000 | 9,963,000 | 10,048,000 |
Cumulative Number of Reported claims | 10,664 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 10,025,000 | 10,026,000 | 10,026,000 | 10,027,000 | 10,025,000 | 10,028,000 | 10,039,000 | 10,053,000 | 10,219,000 | 9,398,000 |
2010 | Homeowners Liability | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | $ 3,457,000 | 3,457,000 | 3,612,000 | 3,735,000 | 4,098,000 | 4,717,000 | 4,888,000 | 5,422,000 | 5,422,000 | 5,591,000 |
Cumulative Number of Reported claims | 217 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 3,457,000 | 3,457,000 | 3,457,000 | 3,472,000 | 3,425,000 | 3,214,000 | 2,890,000 | 2,684,000 | 1,420,000 | 963,000 |
2010 | Homeowners Property Damage | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 39,097,000 | 39,097,000 | 39,501,000 | 39,501,000 | 39,658,000 | 39,921,000 | 40,868,000 | 43,021,000 | 44,550,000 | 45,342,000 |
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ 173,000 | |||||||||
Cumulative Number of Reported claims | 6,685 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 38,923,000 | 38,923,000 | 39,235,000 | 39,235,000 | 39,203,000 | 39,145,000 | 39,110,000 | 38,790,000 | 37,447,000 | $ 25,761,000 |
2011 | Private Passenger Automobile Liability | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | $ 168,625,000 | 168,671,000 | 170,732,000 | 171,852,000 | 172,957,000 | 175,209,000 | 176,906,000 | 176,906,000 | 176,727,000 | |
Cumulative Number of Reported claims | claim | 56,124 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 168,593,000 | 168,585,000 | 168,025,000 | 167,251,000 | 164,413,000 | 158,904,000 | 146,532,000 | 130,018,000 | 76,467,000 | |
2011 | Private Passenger Automobile Physical Damage | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | $ 113,630,000 | 113,640,000 | 113,677,000 | 113,674,000 | 113,765,000 | 113,821,000 | 115,028,000 | 117,951,000 | 118,131,000 | |
Cumulative Number of Reported claims | claim | 140,509 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 113,630,000 | 113,640,000 | 113,669,000 | 113,673,000 | 113,719,000 | 113,809,000 | 114,451,000 | 117,152,000 | 126,196,000 | |
2011 | Commercial Automobile Liability | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 22,488,000 | 22,759,000 | 22,817,000 | 22,933,000 | 23,649,000 | 24,187,000 | 24,160,000 | 24,298,000 | 23,658,000 | |
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ 25,000 | |||||||||
Cumulative Number of Reported claims | 4,958 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 22,463,000 | 22,445,000 | 22,043,000 | 21,913,000 | 20,941,000 | 19,783,000 | 17,807,000 | 14,263,000 | 7,306,000 | |
2011 | Commercial Automobile Physical Damage | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | $ 11,048,000 | 11,024,000 | 10,952,000 | 10,910,000 | 10,952,000 | 10,960,000 | 11,031,000 | 11,151,000 | 11,511,000 | |
Cumulative Number of Reported claims | 11,488 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 11,048,000 | 11,049,000 | 11,050,000 | 11,053,000 | 11,055,000 | 11,060,000 | 11,092,000 | 11,119,000 | 11,006,000 | |
2011 | Homeowners Liability | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | $ 4,845,000 | 4,845,000 | 5,546,000 | 6,017,000 | 6,923,000 | 7,531,000 | 7,644,000 | 7,644,000 | 6,260,000 | |
Cumulative Number of Reported claims | 304 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 4,769,000 | 4,769,000 | 4,758,000 | 4,536,000 | 4,497,000 | 4,336,000 | 3,459,000 | 1,969,000 | 235,000 | |
2011 | Homeowners Property Damage | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 92,387,000 | 92,388,000 | 92,595,000 | 93,186,000 | 93,914,000 | 94,657,000 | 97,571,000 | 98,021,000 | 95,586,000 | |
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ 204,000 | |||||||||
Cumulative Number of Reported claims | 15,116 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 92,182,000 | 92,182,000 | 92,182,000 | 92,333,000 | 92,444,000 | 92,462,000 | 92,184,000 | 89,741,000 | $ 71,532,000 | |
2012 | Private Passenger Automobile Liability | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 162,448,000 | 163,350,000 | 166,008,000 | 167,831,000 | 170,379,000 | 174,856,000 | 175,189,000 | 175,262,000 | ||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ (334,000) | |||||||||
Cumulative Number of Reported claims | claim | 53,273 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 162,014,000 | 161,749,000 | 160,416,000 | 157,443,000 | 152,991,000 | 144,157,000 | 126,553,000 | 74,306,000 | ||
2012 | Private Passenger Automobile Physical Damage | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | $ 103,491,000 | 103,510,000 | 103,547,000 | 103,575,000 | 103,679,000 | 104,393,000 | 107,912,000 | 108,376,000 | ||
Cumulative Number of Reported claims | claim | 123,639 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 103,491,000 | 103,510,000 | 103,537,000 | 103,573,000 | 103,664,000 | 104,311,000 | 107,017,000 | 111,928,000 | ||
2012 | Commercial Automobile Liability | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 22,476,000 | 22,859,000 | 23,819,000 | 24,572,000 | 24,723,000 | 24,662,000 | 24,447,000 | 23,704,000 | ||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ 358,000 | |||||||||
Cumulative Number of Reported claims | 4,566 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 22,086,000 | 21,021,000 | 20,601,000 | 18,876,000 | 17,804,000 | 15,617,000 | 12,474,000 | 6,503,000 | ||
2012 | Commercial Automobile Physical Damage | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | $ 10,226,000 | 10,209,000 | 10,208,000 | 10,250,000 | 10,249,000 | 10,331,000 | 10,382,000 | 10,382,000 | ||
Cumulative Number of Reported claims | 9,913 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 10,226,000 | 10,228,000 | 10,235,000 | 10,239,000 | 10,242,000 | 10,270,000 | 10,553,000 | 9,707,000 | ||
2012 | Homeowners Liability | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | $ 3,889,000 | 3,824,000 | 4,331,000 | 5,304,000 | 6,464,000 | 7,514,000 | 7,514,000 | 7,514,000 | ||
Cumulative Number of Reported claims | 249 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 3,646,000 | 3,606,000 | 3,600,000 | 3,029,000 | 2,731,000 | 2,308,000 | 2,063,000 | 1,389,000 | ||
2012 | Homeowners Property Damage | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 41,887,000 | 41,895,000 | 42,382,000 | 43,097,000 | 44,380,000 | 47,392,000 | 49,911,000 | 50,351,000 | ||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ 148,000 | |||||||||
Cumulative Number of Reported claims | 6,051 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 41,736,000 | 41,736,000 | 41,789,000 | 41,782,000 | 41,737,000 | 41,960,000 | 40,681,000 | $ 30,801,000 | ||
2013 | Private Passenger Automobile Liability | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 175,684,000 | 176,713,000 | 179,167,000 | 181,492,000 | 183,264,000 | 183,517,000 | 183,367,000 | |||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ (1,155,000) | |||||||||
Cumulative Number of Reported claims | claim | 54,248 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 173,890,000 | 172,736,000 | 169,634,000 | 163,694,000 | 152,472,000 | 135,031,000 | 79,049,000 | |||
2013 | Private Passenger Automobile Physical Damage | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | $ 112,029,000 | 112,060,000 | 112,096,000 | 112,197,000 | 113,034,000 | 114,239,000 | 114,389,000 | |||
Cumulative Number of Reported claims | claim | 131,703 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 112,029,000 | 112,060,000 | 112,085,000 | 112,162,000 | 112,894,000 | 115,904,000 | 120,843,000 | |||
2013 | Commercial Automobile Liability | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 25,443,000 | 25,986,000 | 26,310,000 | 26,864,000 | 28,377,000 | 29,541,000 | 29,175,000 | |||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ 421,000 | |||||||||
Cumulative Number of Reported claims | 5,783 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 24,507,000 | 23,867,000 | 22,434,000 | 21,129,000 | 19,625,000 | 17,079,000 | 8,502,000 | |||
2013 | Commercial Automobile Physical Damage | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 13,071,000 | 13,047,000 | 13,057,000 | 13,180,000 | 13,298,000 | 13,567,000 | 13,666,000 | |||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ 5,000 | |||||||||
Cumulative Number of Reported claims | 12,298 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 13,066,000 | 13,060,000 | 13,065,000 | 13,074,000 | 13,114,000 | 13,378,000 | 12,665,000 | |||
2013 | Homeowners Liability | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 5,147,000 | 5,312,000 | 5,978,000 | 7,578,000 | 9,337,000 | 9,768,000 | 9,768,000 | |||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ (79,000) | |||||||||
Cumulative Number of Reported claims | 264 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 4,209,000 | 4,038,000 | 3,829,000 | 3,493,000 | 3,080,000 | 2,337,000 | 527,000 | |||
2013 | Homeowners Property Damage | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 49,463,000 | 49,973,000 | 51,077,000 | 52,464,000 | 55,722,000 | 56,199,000 | 56,298,000 | |||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ 100,000 | |||||||||
Cumulative Number of Reported claims | 5,698 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 49,328,000 | 49,620,000 | 49,653,000 | 49,612,000 | 49,702,000 | 48,456,000 | $ 38,661,000 | |||
2014 | Private Passenger Automobile Liability | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 179,251,000 | 181,312,000 | 183,119,000 | 186,798,000 | 187,104,000 | 187,305,000 | ||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ (1,531,000) | |||||||||
Cumulative Number of Reported claims | claim | 52,787 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 176,616,000 | 173,163,000 | 166,815,000 | 156,693,000 | 136,434,000 | 79,151,000 | ||||
2014 | Private Passenger Automobile Physical Damage | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 122,213,000 | 122,341,000 | 122,327,000 | 122,410,000 | 123,622,000 | 123,421,000 | ||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ (38,000) | |||||||||
Cumulative Number of Reported claims | claim | 135,006 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 122,251,000 | 122,350,000 | 122,402,000 | 122,668,000 | 126,414,000 | 130,732,000 | ||||
2014 | Commercial Automobile Liability | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 32,438,000 | 32,948,000 | 33,914,000 | 34,376,000 | 34,105,000 | 34,117,000 | ||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ 53,000 | |||||||||
Cumulative Number of Reported claims | 6,085 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 30,420,000 | 27,886,000 | 25,253,000 | 21,968,000 | 17,853,000 | 9,426,000 | ||||
2014 | Commercial Automobile Physical Damage | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 15,381,000 | 15,353,000 | 15,419,000 | 15,455,000 | 16,925,000 | 17,426,000 | ||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ 5,000 | |||||||||
Cumulative Number of Reported claims | 13,545 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 15,376,000 | 15,381,000 | 15,388,000 | 15,424,000 | 15,862,000 | 15,377,000 | ||||
2014 | Homeowners Liability | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 6,984,000 | 7,120,000 | 7,388,000 | 9,738,000 | 11,494,000 | 11,494,000 | ||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ 92,000 | |||||||||
Cumulative Number of Reported claims | 261 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 6,315,000 | 4,828,000 | 4,200,000 | 3,212,000 | 1,834,000 | 340,000 | ||||
2014 | Homeowners Property Damage | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 54,607,000 | 55,127,000 | 57,331,000 | 59,751,000 | 60,213,000 | 59,160,000 | ||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ 284,000 | |||||||||
Cumulative Number of Reported claims | 6,077 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 54,274,000 | 54,262,000 | 54,224,000 | 54,088,000 | 52,161,000 | $ 40,409,000 | ||||
2015 | Private Passenger Automobile Liability | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 181,299,000 | 184,477,000 | 188,317,000 | 190,236,000 | 190,036,000 | |||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ (1,082,000) | |||||||||
Cumulative Number of Reported claims | claim | 52,976 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 173,816,000 | 168,641,000 | 156,483,000 | 138,255,000 | 76,934,000 | |||||
2015 | Private Passenger Automobile Physical Damage | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 133,581,000 | 133,737,000 | 134,101,000 | 136,661,000 | 140,219,000 | |||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ (58,000) | |||||||||
Cumulative Number of Reported claims | claim | 144,272 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 133,639,000 | 133,701,000 | 134,066,000 | 136,760,000 | 143,532,000 | |||||
2015 | Commercial Automobile Liability | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 38,015,000 | 37,730,000 | 36,610,000 | 36,150,000 | 35,371,000 | |||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ (620,000) | |||||||||
Cumulative Number of Reported claims | 7,211 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 31,537,000 | 29,804,000 | 26,018,000 | 21,700,000 | 11,181,000 | |||||
2015 | Commercial Automobile Physical Damage | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 18,641,000 | 18,974,000 | 19,021,000 | 19,047,000 | 20,223,000 | |||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ 100,000 | |||||||||
Cumulative Number of Reported claims | 15,468 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 18,541,000 | 18,549,000 | 18,667,000 | 18,910,000 | 17,787,000 | |||||
2015 | Homeowners Liability | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 9,201,000 | 9,201,000 | 9,908,000 | 12,555,000 | 12,965,000 | |||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ (483,000) | |||||||||
Cumulative Number of Reported claims | 287 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 6,445,000 | 5,205,000 | 4,267,000 | 3,319,000 | 428,000 | |||||
2015 | Homeowners Property Damage | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 162,722,000 | 162,788,000 | 162,377,000 | 152,049,000 | 152,586,000 | |||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ 434,000 | |||||||||
Cumulative Number of Reported claims | 20,075 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 161,773,000 | 161,745,000 | 160,572,000 | 145,337,000 | $ 112,563,000 | |||||
2016 | Private Passenger Automobile Liability | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 180,486,000 | 185,009,000 | 192,318,000 | 192,912,000 | ||||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ (2,625,000) | |||||||||
Cumulative Number of Reported claims | claim | 49,368 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 167,458,000 | 154,964,000 | 137,917,000 | 78,862,000 | ||||||
2016 | Private Passenger Automobile Physical Damage | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 121,717,000 | 122,116,000 | 124,922,000 | 129,528,000 | ||||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ (78,000) | |||||||||
Cumulative Number of Reported claims | claim | 126,080 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 121,795,000 | 122,023,000 | 124,298,000 | 133,530,000 | ||||||
2016 | Commercial Automobile Liability | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 40,916,000 | 40,947,000 | 39,416,000 | 37,954,000 | ||||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ (821,000) | |||||||||
Cumulative Number of Reported claims | 6,452 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 32,274,000 | 25,711,000 | 19,902,000 | 9,991,000 | ||||||
2016 | Commercial Automobile Physical Damage | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 17,808,000 | 17,909,000 | 18,506,000 | 20,216,000 | ||||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ 96,000 | |||||||||
Cumulative Number of Reported claims | 13,593 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 17,712,000 | 17,763,000 | 18,143,000 | 17,228,000 | ||||||
2016 | Homeowners Liability | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 9,847,000 | 10,594,000 | 10,594,000 | 10,594,000 | ||||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ 867,000 | |||||||||
Cumulative Number of Reported claims | 272 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 5,387,000 | 4,257,000 | 2,669,000 | 647,000 | ||||||
2016 | Homeowners Property Damage | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 61,262,000 | 64,208,000 | 66,442,000 | 67,116,000 | ||||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ 1,334,000 | |||||||||
Cumulative Number of Reported claims | 5,419 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 59,449,000 | 59,155,000 | 57,238,000 | $ 44,103,000 | ||||||
2017 | Private Passenger Automobile Liability | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 182,068,000 | 184,429,000 | 185,673,000 | |||||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ (9,052,000) | |||||||||
Cumulative Number of Reported claims | claim | 46,154 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 153,675,000 | 133,037,000 | 77,519,000 | |||||||
2017 | Private Passenger Automobile Physical Damage | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 124,128,000 | 126,304,000 | 128,340,000 | |||||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ (206,000) | |||||||||
Cumulative Number of Reported claims | claim | 123,989 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 124,286,000 | 126,822,000 | 132,409,000 | |||||||
2017 | Commercial Automobile Liability | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 41,055,000 | 41,373,000 | 42,865,000 | |||||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ 1,263,000 | |||||||||
Cumulative Number of Reported claims | 6,123 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 24,409,000 | 20,106,000 | 10,407,000 | |||||||
2017 | Commercial Automobile Physical Damage | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 19,021,000 | 19,200,000 | 19,691,000 | |||||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ 103,000 | |||||||||
Cumulative Number of Reported claims | 13,112 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 18,915,000 | 19,336,000 | 17,957,000 | |||||||
2017 | Homeowners Liability | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 9,328,000 | 10,058,000 | 11,276,000 | |||||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ 346,000 | |||||||||
Cumulative Number of Reported claims | 265 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 2,913,000 | 1,676,000 | 305,000 | |||||||
2017 | Homeowners Property Damage | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 70,689,000 | 76,560,000 | 80,736,000 | |||||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ 316,000 | |||||||||
Cumulative Number of Reported claims | 6,006 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 66,181,000 | 64,401,000 | $ 46,366,000 | |||||||
2018 | Private Passenger Automobile Liability | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 175,222,000 | 176,411,000 | ||||||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ (10,581,000) | |||||||||
Cumulative Number of Reported claims | claim | 42,785 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 126,456,000 | 72,895,000 | ||||||||
2018 | Private Passenger Automobile Physical Damage | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 130,145,000 | 129,450,000 | ||||||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ (3,085,000) | |||||||||
Cumulative Number of Reported claims | claim | 119,644 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 132,591,000 | 138,036,000 | ||||||||
2018 | Commercial Automobile Liability | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 40,115,000 | 41,347,000 | ||||||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ 5,365,000 | |||||||||
Cumulative Number of Reported claims | 5,700 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 18,499,000 | 9,704,000 | ||||||||
2018 | Commercial Automobile Physical Damage | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 19,937,000 | 21,230,000 | ||||||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ 91,000 | |||||||||
Cumulative Number of Reported claims | 12,897 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 19,842,000 | 18,842,000 | ||||||||
2018 | Homeowners Liability | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 9,951,000 | 9,951,000 | ||||||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ (1,402,000) | |||||||||
Cumulative Number of Reported claims | 242 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 2,039,000 | 551,000 | ||||||||
2018 | Homeowners Property Damage | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 82,581,000 | 83,443,000 | ||||||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ (3,163,000) | |||||||||
Cumulative Number of Reported claims | 8,223 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 70,959,000 | $ 57,704,000 | ||||||||
2019 | Private Passenger Automobile Liability | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 176,171,000 | |||||||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ (7,596,000) | |||||||||
Cumulative Number of Reported claims | claim | 37,565 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 72,219,000 | |||||||||
2019 | Private Passenger Automobile Physical Damage | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 128,698,000 | |||||||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ (21,574,000) | |||||||||
Cumulative Number of Reported claims | claim | 113,983 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 134,429,000 | |||||||||
2019 | Commercial Automobile Liability | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 51,679,000 | |||||||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ 14,371,000 | |||||||||
Cumulative Number of Reported claims | 4,895 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 12,113,000 | |||||||||
2019 | Commercial Automobile Physical Damage | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 20,039,000 | |||||||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ 220,000 | |||||||||
Cumulative Number of Reported claims | 12,010 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 18,128,000 | |||||||||
2019 | Homeowners Liability | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 14,130,000 | |||||||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ 5,132,000 | |||||||||
Cumulative Number of Reported claims | 208 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 1,634,000 | |||||||||
2019 | Homeowners Property Damage | ||||||||||
incurred and paid claims development | ||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 77,976,000 | |||||||||
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development of Reported Claims | $ 2,127,000 | |||||||||
Cumulative Number of Reported claims | 5,184 | |||||||||
Cumulative paid and allocated claim adjustment expenses, net of reinsurance | $ 49,121,000 |
Loss and Loss Adjustment Expe_5
Loss and Loss Adjustment Expense Reserves - Supplementary information about average historical claims (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Private Passenger Automobile Liability | |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | |
Year 1 | 43.70% |
Year 2 | 32.00% |
Year 3 | 10.30% |
Year 4 | 6.50% |
Year 5 | 3.10% |
Year 6 | 1.70% |
Year 7 | 0.60% |
Year 8 | 0.20% |
Year 9 | 0.00% |
Year 10 | 0.00% |
Private Passenger Automobile Physical Damage | |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | |
Year 1 | 107.40% |
Year 2 | (5.1) |
Year 3 | (2.3) |
Year 4 | (0.4) |
Year 5 | (0.1) |
Year 6 | 0.00% |
Year 7 | 0.00% |
Year 8 | 0.00% |
Year 9 | 0.00% |
Year 10 | 0.00% |
Commercial Automobile Liability | |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | |
Year 1 | 27.50% |
Year 2 | 26.30% |
Year 3 | 12.50% |
Year 4 | 10.60% |
Year 5 | 5.90% |
Year 6 | 5.90% |
Year 7 | 1.60% |
Year 8 | 2.60% |
Year 9 | 0.10% |
Year 10 | 0.10% |
Commercial Automobile Physical Damage | |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | |
Year 1 | 95.40% |
Year 2 | 5.50% |
Year 3 | (1.9) |
Year 4 | (0.3) |
Year 5 | (0.1) |
Year 6 | 0 |
Year 7 | 0.00% |
Year 8 | 0.00% |
Year 9 | 0.00% |
Year 10 | 0.00% |
Homeowners Liability | |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | |
Year 1 | 9.10% |
Year 2 | 22.30% |
Year 3 | 16.90% |
Year 4 | 11.50% |
Year 5 | 8.90% |
Year 6 | 10.40% |
Year 7 | 2.60% |
Year 8 | 0.30% |
Year 9 | 0.00% |
Year 10 | 0.00% |
Homeowners Property Damage | |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | |
Year 1 | 70.60% |
Year 2 | 21.20% |
Year 3 | 4.80% |
Year 4 | 0.40% |
Year 5 | 0.00% |
Year 6 | 0.00% |
Year 7 | (0.20%) |
Year 8 | 0.00% |
Year 9 | (0.20%) |
Year 10 | 0.00% |
Loss and Loss Adjustment Expe_6
Loss and Loss Adjustment Expense Reserves - Disclosure of Incurred and Paid Claims Development to the Liability for Unpaid claims and Claim Adjustment Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Reconciliation of the Disclosure of Incurred and Paid Claims Development to the Liability for Unpaid claims and Claim Adjustment Expenses | ||||
Net outstanding liabilities | $ 458,014 | |||
Reinsurance recoverable on unpaid claims | 122,372 | $ 108,398 | $ 83,085 | |
Unallocated claims adjustment expenses | 30,180 | |||
Total gross liability for unpaid claims and claim adjustment expenses | 610,566 | $ 584,719 | $ 574,054 | $ 560,321 |
Private Passenger Automobile Liability | ||||
Reconciliation of the Disclosure of Incurred and Paid Claims Development to the Liability for Unpaid claims and Claim Adjustment Expenses | ||||
Net outstanding liabilities | 206,964 | |||
Reinsurance recoverable on unpaid claims | 238 | |||
Private Passenger Automobile Physical Damage | ||||
Reconciliation of the Disclosure of Incurred and Paid Claims Development to the Liability for Unpaid claims and Claim Adjustment Expenses | ||||
Net outstanding liabilities | (8,509) | |||
Commercial Automobile Liability | ||||
Reconciliation of the Disclosure of Incurred and Paid Claims Development to the Liability for Unpaid claims and Claim Adjustment Expenses | ||||
Net outstanding liabilities | 96,567 | |||
Reinsurance recoverable on unpaid claims | 116,756 | |||
Commercial Automobile Physical Damage | ||||
Reconciliation of the Disclosure of Incurred and Paid Claims Development to the Liability for Unpaid claims and Claim Adjustment Expenses | ||||
Net outstanding liabilities | 2,318 | |||
Reinsurance recoverable on unpaid claims | 2,255 | |||
Homeowners Liability | ||||
Reconciliation of the Disclosure of Incurred and Paid Claims Development to the Liability for Unpaid claims and Claim Adjustment Expenses | ||||
Net outstanding liabilities | 35,968 | |||
Homeowners Property Damage | ||||
Reconciliation of the Disclosure of Incurred and Paid Claims Development to the Liability for Unpaid claims and Claim Adjustment Expenses | ||||
Net outstanding liabilities | 49,251 | |||
Reinsurance recoverable on unpaid claims | 1 | |||
Other short-Duration Insurance Lines | ||||
Reconciliation of the Disclosure of Incurred and Paid Claims Development to the Liability for Unpaid claims and Claim Adjustment Expenses | ||||
Net outstanding liabilities | 75,455 | |||
Reinsurance recoverable on unpaid claims | $ 3,122 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | Dec. 22, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Current Income Taxes: | ||||
Federal | $ 19,280 | $ 26,548 | $ 22,198 | |
State | 43 | 108 | 30 | |
Current Income Tax Expense (Benefit), Total | 19,323 | 26,656 | 22,228 | |
Deferred Income Taxes: | ||||
Federal | 4,757 | (5,600) | 2,085 | |
Deferred Income Tax Expense (Benefit), Total | 4,757 | (5,600) | 2,085 | |
Total income tax expense (benefit) | $ 24,080 | $ 21,056 | $ 24,313 | |
Statutory tax rate | 35.00% | 21.00% |
Income Taxes (Sources of Differ
Income Taxes (Sources of Difference and Tax Effects) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Sources of the difference and the tax effects | |||
Federal income tax expense (benefit), at statutory rate | $ 25,973 | $ 21,893 | $ 30,345 |
Tax-exempt investment income, net | (1,626) | (1,862) | (4,123) |
State taxes, net | 34 | 85 | 19 |
Nondeductible expenses | 488 | 494 | 237 |
Remeasurement of deferred tax liability upon enactment of the TCJA | (1,540) | ||
Tax windfall related to share-based stock compensation | (1,003) | (79) | (333) |
Other, net | 214 | 525 | (292) |
Total income tax expense (benefit) | $ 24,080 | $ 21,056 | $ 24,313 |
Income Taxes (Temporary Differe
Income Taxes (Temporary Differences) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Discounting of loss reserves | $ 5,642 | $ 5,688 |
Discounting of unearned premium reserve | 17,710 | 17,475 |
Investments | 1,972 | |
Bad debt allowance | 274 | 274 |
Employee benefits | 4,340 | 4,159 |
Rent incentive | 1,063 | 1,181 |
Total deferred tax assets before valuation allowance | 29,029 | 30,749 |
Total deferred tax assets | 29,029 | 30,749 |
Deferred tax liabilities: | ||
Deferred acquisition costs | (15,600) | (15,405) |
Investments | (1,744) | |
Net unrealized gains on investments | (11,985) | (1,645) |
Loss reserve transition adjustment | (1,662) | (2,229) |
Software development costs | (2,109) | (1,268) |
Premium acquisition expenses | (509) | (512) |
Depreciation | (1,137) | (941) |
Total deferred tax liabilities | (34,746) | (22,000) |
Net deferred tax (liability) asset | (5,717) | |
Net deferred tax (liability) asset | 8,749 | |
Unrecognized tax benefits | 0 | 0 |
Unrecognized tax benefits if recognized would affect the effective tax rate | 0 | 0 |
Unrecognized tax benefits interest and penalties accrued | $ 0 | $ 0 |
Share Repurchase Program (Detai
Share Repurchase Program (Details) - USD ($) $ in Thousands | 24 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Aug. 03, 2007 | |
Share Repurchase Program | |||
Share Repurchase Program | $ 150,000 | $ 30,000 | |
Number of common shares purchased during period under the program | 0 | ||
Treasury stock shares | 2,279,570 | 2,279,570 | |
Treasury stock, at cost | $ 83,835 | $ 83,835 |
Statutory Net Income and Surp_2
Statutory Net Income and Surplus (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Statutory Net Income and Surplus | |||
Statutory net income | $ 75,469 | ||
Statutory capital and surplus | $ 704,177 | ||
Period of statutory measurement of income and dividends | 12 months | ||
Maximum available for dividends without approval | $ 75,469 | ||
Company's insurance company subsidiaries | |||
Statutory Net Income and Surplus | |||
Statutory net income | 75,469 | $ 86,734 | $ 57,982 |
Statutory capital and surplus | $ 704,177 | $ 646,820 | |
Dividend limitation without prior permission, percentage of preceding surplus | 10.00% | ||
Period allowed for Commissioner to object to notice of an extraordinary dividend | 30 days | ||
Restricted net assets amount | $ 628,708 | ||
Number of levels of regulatory action, risk-based capital law | item | 4 | ||
Minimum statutory capital and surplus or company action level risk-based capital | $ 184,601 | ||
Safety Insurance Company | |||
Statutory Net Income and Surplus | |||
Statutory capital and surplus | 704,177 | ||
Recorded dividends | $ 47,585 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments Level 1 - 3 Inputs (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fair value of financial instruments | ||
Fixed maturity securities, Estimated Fair Value | $ 1,228,040 | $ 1,161,862 |
Equity securities, Estimated Fair Value | 177,637 | 148,011 |
Short-term investments | 0 | |
Marketable Securities, Total | 1,228,040 | 1,161,862 |
Total | ||
Fair value of financial instruments | ||
Marketable Securities, Total | 1,372,917 | 1,278,035 |
Total | U.S. Treasury securities | ||
Fair value of financial instruments | ||
Fixed maturity securities, Estimated Fair Value | 1,512 | 1,777 |
Total | Obligations of states and political subdivisions | ||
Fair value of financial instruments | ||
Fixed maturity securities, Estimated Fair Value | 251,396 | 266,198 |
Total | Residential mortgage-backed securities | ||
Fair value of financial instruments | ||
Fixed maturity securities, Estimated Fair Value | 307,202 | 297,023 |
Total | Commercial mortgage-backed securities | ||
Fair value of financial instruments | ||
Fixed maturity securities, Estimated Fair Value | 109,738 | 60,336 |
Total | Other asset-backed securities | ||
Fair value of financial instruments | ||
Fixed maturity securities, Estimated Fair Value | 36,222 | 61,076 |
Total | Corporate and other securities | ||
Fair value of financial instruments | ||
Fixed maturity securities, Estimated Fair Value | 521,970 | 475,452 |
Total | Equity securities | ||
Fair value of financial instruments | ||
Equity securities, Estimated Fair Value | 144,877 | 116,173 |
Level 1 Inputs | ||
Fair value of financial instruments | ||
Marketable Securities, Total | 144,361 | 115,493 |
Level 1 Inputs | Equity securities | ||
Fair value of financial instruments | ||
Equity securities, Estimated Fair Value | 144,361 | 115,493 |
Level 2 Inputs | ||
Fair value of financial instruments | ||
Marketable Securities, Total | 1,228,040 | 1,161,862 |
Level 2 Inputs | U.S. Treasury securities | ||
Fair value of financial instruments | ||
Fixed maturity securities, Estimated Fair Value | 1,512 | 1,777 |
Level 2 Inputs | Obligations of states and political subdivisions | ||
Fair value of financial instruments | ||
Fixed maturity securities, Estimated Fair Value | 251,396 | 266,198 |
Level 2 Inputs | Residential mortgage-backed securities | ||
Fair value of financial instruments | ||
Fixed maturity securities, Estimated Fair Value | 307,202 | 297,023 |
Level 2 Inputs | Commercial mortgage-backed securities | ||
Fair value of financial instruments | ||
Fixed maturity securities, Estimated Fair Value | 109,738 | 60,336 |
Level 2 Inputs | Other asset-backed securities | ||
Fair value of financial instruments | ||
Fixed maturity securities, Estimated Fair Value | 36,222 | 61,076 |
Level 2 Inputs | Corporate and other securities | ||
Fair value of financial instruments | ||
Fixed maturity securities, Estimated Fair Value | 521,970 | 475,452 |
Level 3 Inputs | ||
Fair value of financial instruments | ||
Marketable Securities, Total | 516 | 680 |
Level 3 Inputs | Equity securities | ||
Fair value of financial instruments | ||
Equity securities, Estimated Fair Value | $ 516 | $ 680 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments Transfers between Levels (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Transfers between Levels | |||
Transfers from Level 1 to Level 2 | $ 0 | ||
Changes in the Company's Level 3 fair value securities | |||
Balance at beginning of period | 680 | $ 680 | $ 678 |
Purchases | 133 | 2 | |
Sales | (297) | ||
Transfers into Level 3 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 |
Balance at end of period | $ 516 | 680 | $ 680 |
Period of advance notice before quarter end | 45 days | ||
Accounting Standards Update 2015-07 | |||
Changes in the Company's Level 3 fair value securities | |||
Alternative investments fair value | $ 32,760 | $ 31,838 |
Quarterly Results of Operatio_3
Quarterly Results of Operations (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Results of Operations | |||||||||||
Total revenue | $ 223,899 | $ 215,273 | $ 216,002 | $ 222,579 | $ 202,901 | $ 215,907 | $ 207,970 | $ 209,719 | $ 877,753 | $ 836,497 | $ 839,113 |
Net income | $ 28,102 | $ 15,619 | $ 25,934 | $ 29,946 | $ 18,346 | $ 28,908 | $ 26,816 | $ 9,125 | $ 99,601 | $ 83,195 | $ 62,387 |
Earnings per weighted average common share: | |||||||||||
Basic (in dollars per share) | $ 1.84 | $ 1.02 | $ 1.70 | $ 1.97 | $ 1.21 | $ 1.90 | $ 1.77 | $ 0.60 | $ 6.52 | $ 5.48 | $ 4.13 |
Diluted (in dollars per share) | 1.82 | 1.01 | 1.68 | 1.95 | 1.19 | 1.88 | 1.75 | 0.60 | 6.46 | 5.43 | 4.10 |
Cash dividends paid per common share (in dollars per share) | $ 0.90 | $ 0.90 | $ 0.80 | $ 0.80 | $ 0.80 | $ 0.80 | $ 0.80 | $ 0.80 | $ 3.40 | $ 3.20 | $ 3 |
Schedule I - Summary of Inves_2
Schedule I - Summary of Investments - Other than Investments in Related Parties (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Summary of investments - other than investments in related parties | |
Cost or Amortized Cost | $ 1,380,756 |
Estimated Fair Value | 1,442,955 |
Amount at which shown in the Balance Sheet | 1,442,955 |
Total fixed maturities | |
Summary of investments - other than investments in related parties | |
Cost or Amortized Cost | 1,192,357 |
Estimated Fair Value | 1,228,040 |
Amount at which shown in the Balance Sheet | 1,228,040 |
U.S. government and government agencies and authorities | |
Summary of investments - other than investments in related parties | |
Cost or Amortized Cost | 303,007 |
Estimated Fair Value | 308,714 |
Amount at which shown in the Balance Sheet | 308,714 |
Obligations of states and political subdivisions | |
Summary of investments - other than investments in related parties | |
Cost or Amortized Cost | 241,597 |
Estimated Fair Value | 251,396 |
Amount at which shown in the Balance Sheet | 251,396 |
Corporate and other securities | |
Summary of investments - other than investments in related parties | |
Cost or Amortized Cost | 647,753 |
Estimated Fair Value | 667,930 |
Amount at which shown in the Balance Sheet | 667,930 |
Total equity securities | |
Summary of investments - other than investments in related parties | |
Cost or Amortized Cost | 151,121 |
Estimated Fair Value | 177,637 |
Amount at which shown in the Balance Sheet | 177,637 |
Industrial, miscellaneous and all other | |
Summary of investments - other than investments in related parties | |
Cost or Amortized Cost | 151,121 |
Estimated Fair Value | 177,637 |
Amount at which shown in the Balance Sheet | 177,637 |
Other invested assets | |
Summary of investments - other than investments in related parties | |
Cost or Amortized Cost | 37,278 |
Estimated Fair Value | 37,278 |
Amount at which shown in the Balance Sheet | $ 37,278 |
Schedule II - Condensed Finan_2
Schedule II - Condensed Financial Information of the Registrant (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | ||||
Investments in consolidated affiliates | $ 37,278 | $ 23,481 | ||
Other | 23,798 | 19,522 | ||
Total assets | 2,022,669 | 1,856,240 | ||
Liabilities | ||||
Total liabilities | 1,214,263 | 1,137,596 | ||
Shareholders' equity | 808,406 | 718,644 | $ 701,016 | $ 670,726 |
Total liabilities and shareholders' equity | 2,022,669 | 1,856,240 | ||
Registrant | ||||
Assets | ||||
Investments in consolidated affiliates | 810,251 | 720,721 | ||
Other | 54 | 69 | ||
Total assets | 810,305 | 720,790 | ||
Liabilities | ||||
Accounts payable and other liabilities | 1,899 | 2,146 | ||
Total liabilities | 1,899 | 2,146 | ||
Shareholders' equity | 808,406 | 718,644 | ||
Total liabilities and shareholders' equity | $ 810,305 | $ 720,790 |
Schedule II - Condensed Finan_3
Schedule II - Condensed Financial Information of the Registrant Comprehensive Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Condensed Statements of Income and Comprehensive Income | |||||||||||
Revenues | $ 223,899 | $ 215,273 | $ 216,002 | $ 222,579 | $ 202,901 | $ 215,907 | $ 207,970 | $ 209,719 | $ 877,753 | $ 836,497 | $ 839,113 |
Expenses | 754,072 | 732,246 | 752,413 | ||||||||
Net income | $ 28,102 | $ 15,619 | $ 25,934 | $ 29,946 | $ 18,346 | $ 28,908 | $ 26,816 | $ 9,125 | 99,601 | 83,195 | 62,387 |
Other comprehensive (loss) income, net of tax | 38,896 | (22,816) | 8,426 | ||||||||
Comprehensive income | 138,497 | 60,379 | 70,813 | ||||||||
Registrant | |||||||||||
Condensed Statements of Income and Comprehensive Income | |||||||||||
Expenses | 1,694 | 1,695 | 1,494 | ||||||||
Net loss | (1,694) | (1,695) | (1,494) | ||||||||
Earnings from consolidated subsidiaries | 101,295 | 84,890 | 63,881 | ||||||||
Net income | 99,601 | 83,195 | 62,387 | ||||||||
Other comprehensive (loss) income, net of tax | 38,896 | (22,816) | 8,426 | ||||||||
Comprehensive income | $ 138,497 | $ 60,379 | $ 70,813 |
Schedule II - Condensed Finan_4
Schedule II - Condensed Financial Information of the Registrant Cash Flow (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Condensed Statements of Cash Flows | |||||||||||
Net income | $ 28,102 | $ 15,619 | $ 25,934 | $ 29,946 | $ 18,346 | $ 28,908 | $ 26,816 | $ 9,125 | $ 99,601 | $ 83,195 | $ 62,387 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Earnings from consolidated subsidiaries | (1,552) | (1,182) | (1,016) | ||||||||
Changes in assets and liabilities: | |||||||||||
Other assets | (1,864) | 2,565 | (5,400) | ||||||||
Accounts payable and accrued liabilities | 3,395 | 10,678 | (6,333) | ||||||||
Net cash provided by operating activities | 112,456 | 127,691 | 82,040 | ||||||||
Dividends paid | (52,667) | (48,813) | (45,460) | ||||||||
Net cash used for financing activities | (52,667) | (48,813) | (45,460) | ||||||||
Net increase (decrease) in cash and cash equivalents | 6,825 | (4,126) | 21,656 | ||||||||
Cash and cash equivalents at beginning of year | $ 37,582 | $ 41,708 | 37,582 | 41,708 | 20,052 | ||||||
Cash and cash equivalents at end of period | $ 44,407 | $ 37,582 | 44,407 | 37,582 | 41,708 | ||||||
Registrant | |||||||||||
Condensed Statements of Cash Flows | |||||||||||
Net income | 99,601 | 83,195 | 62,387 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Earnings from consolidated subsidiaries | (101,295) | (84,890) | (63,881) | ||||||||
Dividends received from consolidated subsidiaries | 47,585 | 45,271 | 41,826 | ||||||||
Amortization of restricted stock expense | 6,514 | 5,789 | 5,367 | ||||||||
Changes in assets and liabilities: | |||||||||||
Other assets | 15 | (60) | 15 | ||||||||
Accounts payable and accrued liabilities | 247 | (492) | (254) | ||||||||
Net cash provided by operating activities | 52,667 | 48,813 | 45,460 | ||||||||
Dividends paid | (52,667) | (48,813) | (45,460) | ||||||||
Net cash used for financing activities | $ (52,667) | $ (48,813) | $ (45,460) |
Schedule III - Supplementary _2
Schedule III - Supplementary Insurance Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule III - Supplementary Insurance Information | |||
Deferred Policy Acquisition Costs | $ 74,287 | $ 73,355 | $ 72,202 |
Future Policy Benefits, Losses, Claims and Loss Expenses | 610,566 | 584,719 | 574,054 |
Unearned Premiums | 442,219 | 435,380 | 428,257 |
Earned Premiums | 788,777 | 781,587 | 774,420 |
Premium Revenue | 788,777 | 781,587 | 774,420 |
Net Investment Income | 46,665 | 43,788 | 38,758 |
Benefits, Claims, Losses, and Settlement Expenses | 509,846 | 485,513 | 503,887 |
Amortization of Deferred Policy Acquisition Costs | 147,945 | 146,601 | 144,703 |
Other Operating Expenses | 96,191 | 100,042 | 103,733 |
Premiums Written | $ 794,409 | $ 786,912 | $ 781,054 |
Schedule IV - Reinsurance (Deta
Schedule IV - Reinsurance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Insurance Earned Premiums | |||
Gross Amount | $ 845,102 | $ 836,759 | $ 818,804 |
Ceded to Other Companies | 89,178 | 87,368 | 76,886 |
Assumed from Other Companies | 32,853 | 32,196 | 32,502 |
Net Amount | 788,777 | 781,587 | 774,420 |
Property and Casualty Insurance | |||
Insurance Earned Premiums | |||
Gross Amount | 845,102 | 836,759 | 818,804 |
Ceded to Other Companies | 89,178 | 87,368 | 76,886 |
Assumed from Other Companies | 32,853 | 32,196 | 32,502 |
Net Amount | $ 788,777 | $ 781,587 | $ 774,420 |
Percentage of Amount Assumed to Net | 4.20% | 4.10% | 4.20% |
Schedule V - Valuation and Qu_2
Schedule V - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Movement in valuation and qualifying accounts | |||
Balance at Beginning of Period | $ 482 | $ 414 | $ 435 |
Charged to Costs and Expenses | 1,358 | 1,338 | 1,203 |
Deductions | 1,262 | 1,270 | 1,224 |
Balance at End of Period | $ 578 | $ 482 | $ 414 |
Schedule VI - Supplemental In_2
Schedule VI - Supplemental Information Concerning Property and Casualty Insurance Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Supplemental Information Concerning Property and Casualty Insurance Operations | |||
Earned Premiums | $ 788,777 | $ 781,587 | $ 774,420 |
Current year | 551,895 | 542,001 | 545,671 |
Prior year | (42,049) | (56,488) | (41,784) |
Consolidated Property & Casualty Subsidiaries | |||
Supplemental Information Concerning Property and Casualty Insurance Operations | |||
Deferred Policy Acquisition Costs | 74,287 | 73,355 | 72,202 |
Reserves for Unpaid Claims and Claims Adjustment Expenses | 610,566 | 584,719 | 574,054 |
Unearned Premiums | 442,219 | 435,380 | 428,257 |
Earned Premiums | 788,777 | 781,587 | 774,420 |
Net Investment Income | 46,665 | 43,788 | 38,758 |
Current year | 551,895 | 542,001 | 545,671 |
Prior year | (42,049) | (56,488) | (41,784) |
Amortization of Deferred Policy Acquisition Costs | 147,945 | 146,601 | 144,703 |
Paid Claims and Claims Adjustment Expenses | 497,973 | 500,161 | 489,515 |
Premiums Written | $ 794,409 | $ 786,912 | $ 781,054 |