Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Mar. 25, 2015 | Jun. 30, 2014 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | AFFM | ||
Entity Registrant Name | AFFIRMATIVE INSURANCE HOLDINGS INC | ||
Entity Central Index Key | 1282543 | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-Known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | 16,155,357 | ||
Entity Public Float | $13,032,167 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Assets | ||
Available-for-sale securities, at fair value | $33,285 | $62,321 |
Other invested assets | 4,501 | 4,085 |
Cash and cash equivalents | 23,863 | 44,569 |
Fiduciary and restricted cash | 4,794 | 1,369 |
Accrued investment income | 149 | 231 |
Premiums and fees receivable, net | 53,167 | 53,442 |
Commissions receivable | 487 | |
Receivable from reinsurers | 182,804 | 165,819 |
Income taxes receivable | 149 | |
Investment in real property, net | 9,558 | 10,277 |
Property and equipment (net of accumulated depreciation of $59,127 for 2014 and $53,222 for 2013) | 8,389 | 13,978 |
Other intangible assets (net of accumulated amortization of $7,765 for 2014 and 2013) | 1,500 | 1,500 |
Prepaid expenses | 5,623 | 7,126 |
Other assets (net of allowance for doubtful accounts of $576 for 2014 and $7,739 for 2013) | 9,420 | 22,124 |
Total assets | 337,689 | 386,841 |
Liabilities: | ||
Reserves for losses and loss adjustment expenses | 132,752 | 133,589 |
Unearned premium | 84,055 | 81,598 |
Amounts due to reinsurers | 80,126 | 64,910 |
Due to third-party carriers | 5,106 | 7,221 |
Deferred revenue | 6,537 | 6,763 |
Capital lease obligation | 3,344 | 9,428 |
Debt | 123,341 | 127,563 |
Income taxes payable | 3,641 | |
Deferred acquisition costs, net liability | 4,214 | 7,544 |
Other liabilities | 32,613 | 47,476 |
Total liabilities | 472,088 | 489,733 |
Stockholders’ deficit: | ||
Common stock, $0.01 par value; 75,000,000 shares authorized, 18,949,220 shares issued and 16,155,357 shares outstanding at December 31, 2014; 18,202,221 shares issued and 15,408,358 shares outstanding at December 31, 2013 | 190 | 182 |
Additional paid-in capital | 167,623 | 167,049 |
Treasury stock, at cost (2,793,863 shares at December 31, 2014 and 2013) | -32,910 | -32,910 |
Accumulated other comprehensive loss | -1,536 | -1,654 |
Retained deficit | -267,766 | -235,559 |
Total stockholders’ deficit | -134,399 | -102,892 |
Total liabilities and stockholders’ deficit | $337,689 | $386,841 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Statement Of Financial Position [Abstract] | ||
Property and equipment, accumulated depreciation | $59,127 | $53,222 |
Other intangible assets, accumulated amortization | 7,765 | 7,765 |
Other assets, allowance for doubtful accounts | $576 | $7,739 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 18,949,220 | 18,202,221 |
Common stock, shares outstanding | 16,155,357 | 15,408,358 |
Treasury stock, shares | 2,793,863 | 2,793,863 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues | |||
Net premiums earned | $97,036 | $165,683 | $143,736 |
Commission income, fees and managing general agent revenue | 43,428 | 77,534 | 61,495 |
Net investment income | 3,009 | 2,721 | 3,105 |
Net realized gains | 57 | 61 | 922 |
Other income | 3 | 125 | 503 |
Total revenues | 143,533 | 246,124 | 209,761 |
Expenses | |||
Net losses and loss adjustment expenses | 115,682 | 147,818 | 111,858 |
Selling, general and administrative expenses | 52,854 | 99,735 | 96,055 |
Depreciation and amortization | 5,952 | 7,079 | 10,062 |
Total expenses | 174,488 | 254,632 | 217,975 |
Operating loss | -30,955 | -8,508 | -8,214 |
Gain on sale of retail business | 10,000 | 64,971 | |
Loss on extinguishment of debt | -4,193 | ||
Interest expense | -12,954 | -20,663 | -19,743 |
Goodwill and other intangible assets impairment | -23,692 | ||
Income (loss) before income taxes | -33,909 | 31,607 | -51,649 |
Income tax expense (benefit) | -1,702 | 889 | 264 |
Net income (loss) | ($32,207) | $30,718 | ($51,913) |
Basic income (loss) per common share: | |||
Net income (loss) | ($2.07) | $1.99 | ($3.37) |
Diluted income (loss) per common share: | |||
Net income (loss) | ($2.07) | $1.97 | ($3.37) |
Weighted average common shares outstanding: | |||
Basic | 15,525 | 15,408 | 15,408 |
Diluted | 15,525 | 15,622 | 15,408 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net income (loss) | ($32,207) | $30,718 | ($51,913) |
Other comprehensive income (loss): | |||
Unrealized gains (losses) on available-for-sale investment securities arising during period | 164 | -607 | 117 |
Reclassification adjustment for realized gains included in net income (loss) | -46 | -49 | -888 |
Other comprehensive income (loss), net | 118 | -656 | -771 |
Total comprehensive income (loss) | ($32,089) | $30,062 | ($52,684) |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT (USD $) | Total | Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Retained Earnings |
In Thousands, except Share data | ||||||
Balance at beginning of year at Dec. 31, 2011 | $182 | $166,342 | ($32,910) | ($227) | ($214,364) | |
Balance at beginning of year (in shares) at Dec. 31, 2011 | 18,202,221 | 2,793,863 | ||||
Stock-based compensation | 407 | |||||
Unrealized gain (loss) on available-for-sale investment securities | 117 | -771 | ||||
Net income (loss) | -51,913 | -51,913 | ||||
Balance at end of period at Dec. 31, 2012 | -133,254 | 182 | 166,749 | -32,910 | -998 | -266,277 |
Balance at end of period (in shares) at Dec. 31, 2012 | 18,202,221 | 2,793,863 | ||||
Stock-based compensation | 300 | |||||
Unrealized gain (loss) on available-for-sale investment securities | -607 | -656 | ||||
Net income (loss) | 30,718 | 30,718 | ||||
Balance at end of period at Dec. 31, 2013 | -102,892 | 182 | 167,049 | -32,910 | -1,654 | -235,559 |
Balance at end of period (in shares) at Dec. 31, 2013 | 18,202,221 | 2,793,863 | ||||
Issuance of restricted stock awards | 5 | -5 | ||||
Issuance of restricted stock awards (in shares) | 472,000 | |||||
Exercise of stock options | 3 | 207 | ||||
Exercise of stock options (in shares) | 274,999 | 274,999 | ||||
Stock-based compensation | 372 | |||||
Unrealized gain (loss) on available-for-sale investment securities | 164 | 118 | ||||
Net income (loss) | -32,207 | -32,207 | ||||
Balance at end of period at Dec. 31, 2014 | ($134,399) | $190 | $167,623 | ($32,910) | ($1,536) | ($267,766) |
Balance at end of period (in shares) at Dec. 31, 2014 | 18,949,220 | 2,793,863 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities | |||
Net income (loss) | ($32,207) | $30,718 | ($51,913) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 6,671 | 7,798 | 10,842 |
Stock-based compensation expense | 372 | 369 | 390 |
Amortization of debt costs | 1,946 | 1,314 | 435 |
Amortization of debt discount | 1,112 | 4,944 | 4,126 |
Net realized gains from sales of available-for-sale securities | -46 | -49 | -888 |
Fair value gain on investment in hedge fund | -416 | -695 | -492 |
Gain on disposal of assets | -11 | -12 | -34 |
Gain on sale of retail business | -10,000 | -64,971 | |
Amortization of premiums on investments, net | 616 | 557 | 1,515 |
Provision for doubtful accounts | -7,225 | 88 | 451 |
Paid-in-kind interest | 2,916 | 2,083 | 1,543 |
Loss on extinguishment of debt | 4,193 | ||
Goodwill and other intangible assets impairment | 23,692 | ||
Deferred tax asset valuation allowance | 11,420 | -13,303 | 12,708 |
Change in operating assets and liabilities: | |||
Fiduciary and restricted cash | -1,325 | -800 | 1,909 |
Premiums, fees and commissions receivable, net | 7,013 | -4,007 | -7,833 |
Reserves for losses and loss adjustment expenses | -837 | -5,265 | -44,982 |
Amounts due from reinsurers | -1,769 | -7,594 | 3,500 |
Due to third-party carriers | -2,115 | 8,193 | -948 |
Premium finance receivable, net (related to our insurance premiums) | -3,932 | -2,251 | |
Deferred revenue | -226 | 2,398 | 1,301 |
Unearned premium | 2,457 | 8,737 | 14,619 |
Deferred acquisition costs, net | -3,330 | 7,642 | -6,562 |
Deferred taxes | -11,420 | 10,125 | -12,458 |
Income taxes receivable | -3,790 | 3,791 | 589 |
Other | -11,078 | 4,543 | -7,067 |
Net cash used in operating activities | -51,272 | -3,135 | -57,808 |
Cash flows from investing activities | |||
Fiduciary and restricted cash | -2,100 | ||
Proceeds from sale of retail business, net | 25,000 | 84,270 | |
Proceeds from sales of available-for-sale securities | 16,193 | 8,964 | 37,447 |
Proceeds from maturities of available-for-sale securities | 19,270 | 54,302 | 37,871 |
Purchases of available-for-sale securities | -16,879 | -69,004 | -9,392 |
Premium finance receivable, net (related to third-party insurance premiums) | -281 | 1,391 | |
Purchases of property and equipment | -367 | -917 | -1,443 |
Proceeds from sale of property and equipment | 11 | ||
Proceeds from insurance recoveries | 30 | ||
Net cash provided by investing activities | 41,128 | 77,334 | 65,904 |
Cash flows from financing activities | |||
Proceeds from financing under capital lease obligation | 4,858 | ||
Principal payments under capital lease obligations | -6,319 | -2,943 | -4,937 |
Principal payments on mortgage security agreement | -1,737 | -1,248 | |
Issuance of mortgage security agreement | 4,809 | ||
Proceeds from stock options exercised | 207 | ||
Debt issuance costs paid | -532 | -860 | |
Bank overdrafts | -539 | -2,872 | 4,488 |
Net cash provided by (used in) financing activities | -10,562 | -67,806 | 1,521 |
Net increase (decrease) in cash and cash equivalents | -20,706 | 6,393 | 9,617 |
Cash and cash equivalents at beginning of year | 44,569 | 38,176 | 28,559 |
Cash and cash equivalents at end of year | 23,863 | 44,569 | 38,176 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 4,333 | 10,004 | 10,941 |
Cash paid for income taxes | 2,748 | 390 | 336 |
Disclosure of non-cash information: | |||
Capital lease obligation settled by transfer of securities | 7,851 | ||
Debt issuance costs | 3,000 | ||
Effective January 2007 | |||
Cash flows from financing activities | |||
Borrowings under senior secured credit facility | 12,500 | 5,500 | |
Principal payments on senior secured credit facility | -120,192 | -3,530 | |
Effective September 2013 | |||
Cash flows from financing activities | |||
Borrowings under senior secured credit facility | 48,000 | ||
Principal payments on senior secured credit facility | ($6,500) | ($5,000) |
General
General | 12 Months Ended | |
Dec. 31, 2014 | ||
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
General | 1 | General |
Affirmative Insurance Holdings, Inc. (the Company), was incorporated in Delaware in June 1998. The Company is a provider of non-standard personal automobile insurance policies for individual consumers in targeted geographic areas. The Company is a party to an agreement with an unaffiliated underwriting agency in the state of California and provides non-standard insurance policies written by a Texas county mutual. The Company is currently distributing insurance policies through approximately 5,000 independent agents or brokers in 7 states (Louisiana, Texas, California, Alabama, Illinois, Indiana and Missouri). |
Going_Concern
Going Concern | 12 Months Ended | |
Dec. 31, 2014 | ||
Going Concern [Abstract] | ||
Going Concern | 2 | Going Concern |
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. This assumes continuing operations and the realization of assets and liabilities in the normal course of business. | ||
The Company incurred losses from operations over the last six years, including an operating loss of $31.0 million for the year ended December 31, 2014. Losses over this period were primarily due to underwriting losses, significant revenue declines, expenses declining less than the amount of revenue declines, and goodwill impairments. The losses from operations were the result of prior pricing issues in some states in which the Company has taken significant pricing and underwriting actions to address profitability, losses from states that the Company has exited, such as Florida and Michigan, and goodwill impairment charges as a result of such losses. | ||
The senior secured and subordinated credit facilities contain quarterly debt covenants that set forth, among other things, minimum risk-based capital requirements for the Company’s insurance subsidiaries as well as minimum cash flow requirements for the Company’s non-regulated businesses. The credit facilities have been amended to waive compliance of the risk-based capital measurement requirement as of December 31, 2014 and to postpone the principal payment of $3.5 million due March 31, 2015 to June 30, 2015. Except for the minimum risk-based capital requirement for which the Company obtained a waiver, the Company was in compliance with these covenants as of December 31, 2014. However, it is probable the Company will not meet certain of these covenants in future periods. If the Company is unable to achieve compliance with the covenants or obtain a forbearance or waiver of any non-compliance or amend the agreements to change such covenants, the lenders could declare all amounts outstanding under the facilities to be immediately due and payable. If the Company’s lenders declare the amounts outstanding to be immediately due and payable, it would have a material adverse effect on the Company’s operations and the Company’s creditors and stockholders. | ||
The Company’s insurance subsidiaries are subject to risk-based capital standards and other minimum capital and surplus requirements imposed under applicable state laws, including the laws of their state of domicile. The risk-based capital standards, based upon the Risk-Based Capital Model Act adopted by the National Association of Insurance Commissioners, or NAIC, require insurance companies to report their results of risk-based capital calculations to state departments of insurance and the NAIC. At December 31, 2014, the risk-based capital level of Affirmative Insurance Company (AIC) triggered a regulatory action level event under the NAIC standard. As a result, AIC is required to submit a plan to the Illinois Department of Insurance (IDOI) in April 2015 detailing corrective actions it will take to return its risk-based capital ratio to an acceptable level. Upon receipt of the plan, the IDOI may accept the plan, require further amendments to the plan or take additional regulatory action including, but not limited to, placing AIC in receivership. Such action by the Illinois Department of Insurance would have a material adverse effect on the Company’s operations and the interest of its creditors and stockholders. Such action by the Illinois Department of Insurance also would trigger a further event of default under the Company’s senior secured and subordinated credit facilities allowing the Company’s lenders to declare all amounts outstanding under the facilities to be immediately due and payable, and if such amounts were declared immediately due and payable by the lenders, it would have a material adverse effect on the Company’s operations and the interests of its creditors and stockholders. The Company has taken and will continue to pursue appropriate actions to improve the underwriting results; however, there can be no assurance that this will occur. | ||
The Company’s recent history of recurring losses from operations, its failure to comply with certain financial covenants in its senior secured and subordinated credit facilities and its failure to comply with the Illinois Department of Insurance minimum risk-based capital requirements raise substantial doubt about the Company’s ability to continue as a going concern. | ||
The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects of this uncertainty on the recoverability or classification of recorded asset amounts or the amounts or classification of liabilities. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | |
Dec. 31, 2014 | ||
Accounting Policies [Abstract] | ||
Summary of Significant Accounting Policies | 3 | Summary of Significant Accounting Policies |
Basis of Presentation • The consolidated financial statements include the accounts of Affirmative Insurance Holdings, Inc. and its subsidiaries (together the Company), and have been prepared in accordance with U.S. generally accepted accounting principles (GAAP). All material intercompany transactions and balances have been eliminated in consolidation. | ||
Certain prior year amounts have been reclassified to conform to the current presentation. | ||
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 the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. These estimates and assumptions are particularly important in determining reserves for losses and loss adjustment expenses, deferred policy acquisition costs, reinsurance receivables, valuation of investments, other intangible assets, and deferred income taxes. | ||
Cash and Cash Equivalents • Cash and cash equivalents are highly liquid investments with an original maturity of ninety days or less and include principally money market funds, repurchase agreements, and other bank deposits. Unless the right-of-setoff requirements have been met, bank overdrafts or negative book cash balances, if material, are recorded in other liabilities in the consolidated balance sheet. As of December 31, 2014 and 2013, $1.1 million and $1.6 million negative book cash balance was reflected in other liabilities in the consolidated balance sheets, respectively. | ||
Fiduciary and Restricted Cash • Fiduciary and restricted cash consists of non-operating certificates of deposit required by state regulations and/or under various agreements with third parties. | ||
Investments • Investment securities consist of debt securities, and are recorded at fair value on the consolidated balance sheet. These investments are classified as available-for-sale with unrealized gains and losses recorded in accumulated other comprehensive income (loss), a separate component of stockholders’ deficit. No income tax effect of unrealized gains and losses is reflected in other comprehensive income (loss) due to the Company carrying a full deferred tax valuation allowance. The Investment Committee periodically reviews investment portfolio results and evaluates strategies to maximize yields, to match maturity durations with anticipated needs, and to maintain compliance with investment guidelines. | ||
Fair value is based on quoted prices in active markets or third-party valuation sources when observable market prices are not available. Gains and losses realized on the disposition of investment securities are determined on the specific-identification basis and credited or charged to income. Premium and discount on investment securities are amortized and accreted using the interest method and charged or credited to investment income. | ||
Other invested assets is comprised of an investment in a hedge fund, which primarily invests in mortgage-backed securities with the strategy of seeking attractive yields on commercial and residential mortgage-backed securities. The Company elected the fair value option for its investment in the hedge fund and measures the fair value of this investment using the net asset value of the fund as reported by the fund manager. The financial statements of the hedge fund are subject to annual audits evaluating the net asset positions of the underlying investments. The fair value is included in the Level 3 fair value hierarchy. The Company records changes in the value of its other invested assets as a component of net investment income. | ||
Investments are considered to be impaired when a decline in fair value is judged to be other-than-temporary. On a quarterly basis, the Company considers available quantitative and qualitative evidence in evaluating potential impairment of its investments. If the cost of an investment exceeds its fair value, the Company evaluates, among other factors, general market conditions, the duration and extent to which the fair value is less than cost. If the fair value of a debt security is less than its amortized cost basis, an other-than-temporary impairment may be triggered in circumstances where (1) an entity has an intent to sell the security, (2) it is more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis, or (3) the entity does not expect to recover the entire amortized cost basis of the security (that is, a credit loss exists). Other-than-temporary impairments are separated into amounts representing credit losses which are recognized in earnings and amounts related to all other factors which are recognized in other comprehensive income (loss). The Company also considers potential adverse conditions related to the financial health of the issuer based on rating agency actions. | ||
Amounts Due from/to Reinsurers • The Company collects premiums from insureds and after deducting its authorized commissions, the Company remits these premiums to the appropriate reinsurance companies. The Company’s obligation to remit these premiums is recorded as amounts due reinsurers in its consolidated balance sheet. The Company records the amounts it expects to receive from reinsurers for paid and unpaid losses as an asset on its consolidated balance sheet. | ||
Deferred Policy Acquisition Costs, net of ceding commission • Deferred policy acquisition costs represent the deferral of expenses that the Company incurs in the successful acquisition of new business or renewal of existing insurance policies. Policy acquisition costs, consisting of primarily commissions and premium taxes, net of ceding commission income, are deferred and charged against income ratably over the terms of the related policies. The Company regularly reviews the categories of acquisition costs that are deferred and assesses the recoverability of this asset. A premium deficiency, and a corresponding charge to income, is recognized if the sum of the expected losses and loss adjustment expenses, unamortized acquisition costs, and maintenance costs exceeds related unearned premiums and anticipated investment income. Amounts received as ceding commissions on reinsurance contracts are recorded as reductions of deferred acquisition costs and are recognized into income ratably as the related ceded premium is earned. Amortization of deferred policy acquisition costs is recorded in selling, general and administrative expenses in the consolidated statement of operations. | ||
Property and Equipment, Net • Property and equipment is stated at cost, less accumulated depreciation. Depreciation is recognized using the straight-line method over the estimated useful lives of the Company’s assets, typically ranging from three to eight years. Leasehold improvements are depreciated over the shorter of the estimated useful lives of the assets or the remainder of the lease term. | ||
Other Intangible Assets, Net • Other intangible assets with indefinite useful lives are tested for impairment annually as of September 30 or more frequently if events or changes in circumstances indicate that the assets might be impaired. | ||
Identifiable intangible assets consist of state insurance company licenses. The Company reviews such intangibles for impairment whenever an impairment indicator exists. Management continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets, including intangible assets, may not be recoverable. When such events or changes in circumstances occur, management assesses recoverability by determining whether the carrying value of such assets will be recovered through the undiscounted expected future cash flows. If the future undiscounted cash flows are less than the carrying amount of these assets, an impairment loss is recognized based on the excess of the carrying amount over the fair value of the assets. | ||
Variable Interest Entities • Affirmative Insurance Holdings Statutory Trust I (“Trust I”), is an unconsolidated trust subsidiary established for the sole purpose of issuing $30.0 million trust preferred securities in 2004. Trust I used the proceeds from the sale of these securities and the Company’s initial capital contribution to purchase $30.9 million of subordinated debt securities from the Company. The debt securities are the sole assets of Trust I, and the payments under the debt securities are the sole revenues of Trust I. The Company’s initial capital contribution consisted of the purchase of 928,000 common securities issued by Trust I for $928,000, which represented 3% of the total dollar amount of subordinated debentures issued. | ||
Affirmative Insurance Holdings Statutory Trust II (“Trust II”), is an unconsolidated trust subsidiary established for the sole purpose of issuing $25.0 million trust preferred securities in 2005. Trust II used the proceeds from the sale of these securities and the Company’s initial capital contribution to purchase $25.8 million of subordinated debt securities from the Company. The debt securities are the sole assets of Trust II, and the payments under the debt securities are the sole revenues of Trust II. The Company’s initial capital contribution consisted of the purchase of 774,000 common securities issued by Trust II for $774,000, which represented 3% of the total dollar amount of subordinated debentures issued. | ||
The investment in the common securities totaling $1.7 million is reflected in other assets in the Company’s consolidated balance sheets. The subordinated debentures totaling $56.7 million are included in debt in the Company’s consolidated balance sheets. | ||
Management evaluates on an ongoing basis the Company’s investments in Trust I and II (collectively the “Trusts”) and continue to conclude that, while the Trusts continue to be variable interest entities (“VIE’s”), the Company is not the primary beneficiary. Therefore, the Trusts are not included in the Company’s consolidated financial statements. | ||
Reserves for Losses and Loss Adjustment Expenses • The Company maintains reserves for the estimated ultimate liability for unpaid losses and loss adjustment expenses related to incurred claims and estimates of unreported claims. The estimation of the ultimate liability for unpaid losses and loss adjustment expenses is based on projections developed by the Company’s actuaries using analytical methodologies commonly used in the property-casualty insurance industry. Liabilities for unpaid claims and for expenses of investigation and adjustment of unpaid claims are based on: (1) the accumulation of estimates of individual claims for losses reported prior to the close of the accounting period; (2) estimates received from ceding companies, reinsurers and insurance pools and associations; (3) estimates of unreported losses based on past experience; (4) estimates based on past experience of expenses for investigating and adjusting claims; and (5) estimates of subrogation and salvage collections. Management periodically adjusts the losses and loss adjustment expense reserves for changes in product mix, underwriting standards, loss cost trends and other factors. Losses and loss adjustment expense reserves may also be impacted by factors such as the rate of inflation, claims settlement patterns, litigation and legislative and regulatory activities. Unpaid losses and loss adjustment expenses have not been reduced for amounts recoverable from reinsurers. Changes in estimates of liabilities for unpaid losses and loss adjustment expenses are reflected in the consolidated statement of operations in the period in which determined. Ultimately, the actual losses and loss adjustment expenses may differ materially from recorded estimates. | ||
Treasury Stock • Treasury stock purchases are accounted for using the cost method, whereby the entire cost of the acquired stock is recorded as treasury stock. When reissued, shares of treasury stock will be removed from the treasury stock account at the average purchase price per share of the aggregate treasury shares held. | ||
Revenue Recognition • Premium income — Premiums, net of premiums ceded, is earned over the life of the underlying policies. Unearned premiums represent that portion of premiums written that are applicable to the unexpired terms of policies in force. Premiums receivable are recorded net of an estimated allowance for uncollectible amounts. | ||
Commission income — Represents revenues from the retail agency business prior to being sold on September 30, 2013. Commission income and related policy fees, written for third-party insurance companies, are recognized, net of an allowance for estimated policy cancellations, at the date the customer is initially billed or as of the effective date of the insurance policy, whichever is later. Commissions on premium endorsements are recognized when premiums are processed. The allowance for estimated third-party cancellations is periodically evaluated and adjusted as necessary. | ||
Profit-sharing commissions, which enable the Company to collect commission income and fees in excess of provisional commissions, are recorded when it is probable that estimates of loss ratios will be below the levels stated in the Company’s agency contracts. Provisional commissions may be reduced when it is probable that estimates of loss ratios will be above the levels stated in the related agency contract. | ||
Fee Income — Policy origination fees and installment fees compensate the Company for the costs of policy administration and providing installment payment plans. Policy origination fees are recognized over the underlying policy terms. Other fees are recognized when services are provided. | ||
Agency Fees — Represents revenues from the retail agency business prior to being sold on September 30, 2013. These fees compensated the Company for the costs of policy cancellation, policy rewrite and reinstatement and were recognized when the services were provided. Premium finance and origination fees were recognized over the term of the finance contracts. | ||
Managing general agent revenue — Revenues earned for business produced for a Texas county mutual insurance agency beginning January 1, 2013. The Company receives compensation for distribution and underwriting services and providing claims handling on the business. Revenue for distribution and underwriting services are recognized, net of an allowance for estimated policy cancellations, at the date the customer is initially billed or as of the effective date of the insurance policy, whichever is later. Claims handling revenue is recognized as the services are provided. | ||
Accounting and Reporting for Reinsurance • Income and expense on reinsurance contracts are recognized principally over the term of the reinsurance contracts or until the reinsurers maximum liability is exhausted, whichever comes first. Reinsurance contracts do not relieve the Company from its obligations to policyholders. The Company continually monitors reinsurers to minimize the exposure to significant losses from reinsurer insolvencies. The Company only cedes risks to reinsurers whom it believes to be financially sound. | ||
Stock-Based Compensation • Compensation cost is measured based on the grant-date fair value of an award utilizing the assumptions discussed in Note 17. Compensation cost is recognized for financial reporting purposes on a straight-line basis over the period in which the employee is required to provide service in exchange for the award. | ||
Income Taxes • The Company accounts for income taxes under the asset and liability method. Under this method, deferred income taxes are recognized for temporary differences between the financial statement and tax return bases of assets and liabilities. Recorded amounts are adjusted to reflect changes in income tax rates for the period in which the change is enacted. Any resulting future tax benefits are recognized to the extent that realization of such benefits is more likely than not, and a valuation allowance is established for any portion of a deferred tax asset that management believes will not be realized. While the Company typically does not incur significant interest or penalties on income tax liabilities, the Company’s policy is to classify such amounts as income tax expense on the consolidated statement of operations. | ||
Net Income (Loss) Per Common Share • Basic net income (loss) per common share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the year. Diluted net income (loss) per share is computed by giving effect to the potential dilution that could occur if securities or other contracts to issue common shares were exercised and converted into common shares during the year. | ||
Fair Value of Financial Instruments • The Company determines fair value for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk. | ||
Segment Reporting • The Company’s operations consist of designing, underwriting and servicing non-standard personal automobile insurance policies. The Company is a holding company, with no operating revenues and only interest expense on corporate debt. The Company’s subsidiaries consist of several types of legal entities: insurance companies, underwriting agencies and a service company from which all employees are paid. Insurance subsidiaries possess the certificates of authority and capital necessary to transact insurance business and issue policies, but they rely on both affiliated and an unaffiliated underwriting agency to design, distribute and service those policies. Underwriting agencies primarily design, distribute and service policies issued or reinsured by the Company’s insurance subsidiaries and that are distributed by independent agents. Given the homogeneity of the Company’s products, the regulatory environments in which the Company operates, the nature of the Company’s customers and distribution channels, Company management monitors, controls and manages the business as an integrated entity offering non-standard personal automobile insurance products through multiple distribution channels. | ||
Statutory Accounting Practices • The Company’s insurance subsidiaries are required to report results of operations and financial position to insurance regulatory authorities based upon statutory accounting principles (SAP). The more significant differences between SAP and GAAP are as follows: | ||
· | Under SAP, all sales and other policy acquisition costs are expensed as they are incurred rather than capitalized and amortized over the expected life of the policy as required by GAAP. The immediate charge off of sales and acquisition expenses and other conservative valuations under SAP generally cause a lag between the sale of a policy and the emergence of reported earnings. Since this lag can reduce income from operations on a SAP basis, it can have the effect of reducing the amount of funds available for dividends from insurance companies. | |
· | Under SAP, certain assets, including deferred taxes, are designated as “non-admitted” and are charged directly to unassigned surplus, whereas under GAAP, such assets are included in the consolidated balance sheet net of an appropriate valuation allowance. | |
· | SAP requires available-for-sale investments generally be carried at amortized book value while GAAP requires available-for-sale investments be carried at fair value. | |
Recently Issued Accounting Standards • Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers issued in May 2014 supersedes the revenue recognition requirements in Topic 605, Revenue Recognition and most industry-specific guidance. Insurance contracts have been excluded from the scope of the guidance, which is effective for fiscal years beginning after December 15, 2016. The Company does not expect the adoption of this standard to have a material impact on the consolidated financial position, results of operations, or cash flows. | ||
Accounting Standards Update (ASU) No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern issued in August 2014 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. Specifically, this ASU provides guidance to an organization’s management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations today in the financial statement footnotes. The amendments are effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early application is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. The Company does not expect the adoption of this standard to have a material impact on the consolidated financial position, results of operations, or cash flows. |
Sale_of_the_Retail_Business
Sale of the Retail Business | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Sale Of Retail Business [Abstract] | |||||
Sale of the Retail Business | 4 | Sale of the Retail Business | |||
On September 30, 2013, the Company sold its retail agency distribution business to Confie Seguros (Confie). The Company’s retail agency distribution business consisted of 195 retail locations in Louisiana, Alabama, Texas, Illinois, Indiana, Missouri, Kansas, South Carolina and Wisconsin and two premium finance companies (the retail business). Proceeds from the sale were $101.9 million in cash with the potential to receive an additional $20.0 million of cash proceeds. The initial cash proceeds included a working capital adjustment of $1.9 million that was received in 2013 and $20.0 million placed in an escrow account. The funds held in escrow were available, dependent upon the quarterly risk-based capital status of Affirmative Insurance Company (AIC), to be utilized to either infuse capital into AIC or pay down debt. As of the first risk-based measurement date of September 30, 2013, AIC met the risk-based capital target and in November 2013, $5.0 million was released from the escrow account and was used to pay down the senior secured credit facility. As of December 31, 2013, AIC met the risk-based capital target and in April 2014, an additional $5.0 million was released from the escrow account and was used to pay down the senior secured credit facility. In March 2014, the purchase agreement was amended to eliminate the measurement of risk-based capital as of March 31, 2014. In June 2014, the remaining $10.0 million in the escrow account was utilized to infuse capital into AIC. | |||||
The additional $20.0 million of proceeds may be used to pay down debt or infuse capital into Affirmative Insurance Company (AIC). The additional proceeds are contingent on AIC meeting certain risk-based capital thresholds and maintaining the obligations of the distribution agreement. The risk-based capital measurement begun as of June 30, 2014 for up to $10.0 million of additional proceeds and the remaining balance up to $20.0 million can be achieved on any following quarterly measurement date through December 31, 2015. These contingent proceeds are recognized as risk-based capital measurement thresholds are achieved. In September 2014, $10.0 million of additional proceeds were received of which, $9.9 million was used to infuse capital into AIC and $0.1 million was used to pay down the senior secured credit facility. | |||||
In connection with the sale of the retail business, the Company also entered into a distribution agreement pursuant to which the purchaser will continue to produce insurance business for the Company’s insurance subsidiaries at least until the earlier of December 15, 2015, or when Confie’s obligation to pay the contingent proceeds pursuant to the purchase agreement is discharged. Among other things, the distribution agreement sets forth the terms and conditions under which Confie will produce insurance business for the Company after the closing and includes terms designed to preserve the volume of business produced by the retail business for the Company as of the closing. In turn, the distribution agreement obligates the Company’s insurance subsidiaries to maintain reinsurance and their underwriting capacity in the markets where the retail business operates for the duration of the distribution agreement, including certain restrictions on increasing fees and rates beyond certain thresholds without Confie’s consent. Additionally, Confie will continue to provide premium financing capability for the Company’s policies, including for business written through other independent agencies in certain markets, and the parties will share equally in any increased profits from premium financing other independent agency business during the term of the distribution agreement. Due to the Company’s significant continuing involvement as the underwriter for business produced by the retail agency distribution business and the ongoing premium finance arrangements, the operating activities of the retail agency distribution are not reflected as discontinued operations. | |||||
The Company realized a pretax gain on the sale of $10.0 million and $65.0 million for the years ended December 31, 2014 and 2013, respectively. The Company’s consolidated results of operations as of December 31, 2013 include the retail business’s results of operations through the date of the sale, September 30, 2013. The net assets sold consisted of (in thousands): | |||||
September 30, | |||||
2013 | |||||
Assets | |||||
Cash and cash equivalents | $ | 2,529 | |||
Premium finance and commission receivable | 47,847 | ||||
Other intangible assets | 12,764 | ||||
Other assets | 3,709 | ||||
Total Assets | $ | 66,849 | |||
Liabilities | |||||
Due to third-party carriers | $ | 24,456 | |||
Other liabilities | 5,419 | ||||
Total Liabilities | 29,875 | ||||
Net Assets | $ | 36,974 | |||
AvailableforSale_Investment_Se
Available-for-Sale Investment Securities | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Investments Debt And Equity Securities [Abstract] | |||||||||||||||||||||||||
Available-for-Sale Investment Securities | 5 | Available-for-sale Investment Securities | |||||||||||||||||||||||
The Company’s available-for-sale investment securities are carried at fair value with unrealized gains and losses reported in accumulated other comprehensive income (loss), a separate component of stockholders’ deficit. No income tax effect of unrealized gains and losses is reflected in other comprehensive income (loss) due to the Company carrying a full deferred tax valuation allowance. Gains and losses realized on the disposition of investment securities are determined on the specific-identification basis and credited or charged to income at the time of disposal. | |||||||||||||||||||||||||
Amortized Cost and Fair Value | |||||||||||||||||||||||||
The amortized cost, gross unrealized gains (losses), and estimated fair value of the Company’s available-for-sale securities at December 31, 2014 and 2013, were as follows (in thousands): | |||||||||||||||||||||||||
Amortized | Gross | Gross | Estimated Fair | ||||||||||||||||||||||
Cost | Unrealized | Unrealized | Value | ||||||||||||||||||||||
Gains | Losses | ||||||||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||||
U.S. Treasury and government agencies | $ | 8,311 | $ | 33 | $ | (30 | ) | $ | 8,314 | ||||||||||||||||
Mortgage-backed securities | 3,386 | 19 | (92 | ) | 3,313 | ||||||||||||||||||||
States and political subdivisions | 1,485 | 34 | — | 1,519 | |||||||||||||||||||||
Corporate debt securities | 17,340 | 90 | (58 | ) | 17,372 | ||||||||||||||||||||
Certificates of deposit | 2,760 | 8 | (1 | ) | 2,767 | ||||||||||||||||||||
Total | $ | 33,282 | $ | 184 | $ | (181 | ) | $ | 33,285 | ||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||
U.S. Treasury and government agencies | $ | 17,830 | $ | 55 | $ | (51 | ) | $ | 17,834 | ||||||||||||||||
Mortgage-backed securities | 4,023 | 4 | (47 | ) | 3,980 | ||||||||||||||||||||
States and political subdivisions | 3,265 | 68 | — | 3,333 | |||||||||||||||||||||
Corporate debt securities | 32,458 | 135 | (310 | ) | 32,283 | ||||||||||||||||||||
Certificates of deposit | 4,860 | 32 | (1 | ) | 4,891 | ||||||||||||||||||||
Total | $ | 62,436 | $ | 294 | $ | (409 | ) | $ | 62,321 | ||||||||||||||||
The Company had $10.0 million of unsettled investment purchases as of December 31, 2013. | |||||||||||||||||||||||||
For additional disclosures regarding methods and assumptions used in estimating fair values of these securities see Note 23. | |||||||||||||||||||||||||
Maturities | |||||||||||||||||||||||||
Expected maturities may differ from contractual maturities because certain borrowers may have the right to call or prepay obligations with or without penalties. The Company’s amortized cost and estimated fair values of fixed-income securities at December 31, 2014 by contractual maturity were as follows (in thousands): | |||||||||||||||||||||||||
Amortized | Estimated Fair | ||||||||||||||||||||||||
Cost | Value | ||||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||||
Due in one year or less | $ | 7,672 | $ | 7,716 | |||||||||||||||||||||
Due after one year through five years | 22,224 | 22,256 | |||||||||||||||||||||||
Mortgage-backed securities | 3,386 | 3,313 | |||||||||||||||||||||||
Total | $ | 33,282 | $ | 33,285 | |||||||||||||||||||||
Net Investment Income | |||||||||||||||||||||||||
Major categories of net investment income for the years ended December 31 were as follows (in thousands): | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Available-for-sale investment securities | $ | 803 | $ | 769 | $ | 1,520 | |||||||||||||||||||
Rental income from investment in real property | 2,420 | 2,390 | 2,410 | ||||||||||||||||||||||
Income from investment in hedge fund | 416 | 695 | 492 | ||||||||||||||||||||||
Cash and cash equivalents | 635 | 155 | 3 | ||||||||||||||||||||||
4,274 | 4,009 | 4,425 | |||||||||||||||||||||||
Less: Investment expense | (1,265 | ) | (1,288 | ) | (1,320 | ) | |||||||||||||||||||
Net investment income | $ | 3,009 | $ | 2,721 | $ | 3,105 | |||||||||||||||||||
Gross Realized Gains and Losses | |||||||||||||||||||||||||
Gross realized gains and losses on available-for-sale investments for the years ended December 31 were as follows (in thousands): | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Gross gains | $ | 124 | $ | 58 | $ | 1,025 | |||||||||||||||||||
Gross losses | (78 | ) | (9 | ) | (137 | ) | |||||||||||||||||||
Total | $ | 46 | $ | 49 | $ | 888 | |||||||||||||||||||
Unrealized Losses | |||||||||||||||||||||||||
The following table summarizes the Company’s available-for-sale securities in an unrealized loss position at December 31, 2014 and 2013, the estimated fair value and amount of gross unrealized losses, aggregated by investment category and length of time those securities have been continuously in an unrealized loss position (in thousands): | |||||||||||||||||||||||||
December 31, 2014 | |||||||||||||||||||||||||
Less Than Twelve | Twelve Months or | Total | |||||||||||||||||||||||
Months | Greater | ||||||||||||||||||||||||
Estimated | Gross | Estimated Fair | Gross | Estimated | Gross | ||||||||||||||||||||
Fair | Unrealized | Value | Unrealized | Fair | Unrealized | ||||||||||||||||||||
Value | Losses | Losses | Value | Losses | |||||||||||||||||||||
U.S. Treasury and government agencies | $ | 2,217 | $ | (6 | ) | $ | 1,984 | $ | (24 | ) | $ | 4,201 | $ | (30 | ) | ||||||||||
Mortgage-backed securities | 1,388 | (22 | ) | 1,273 | (70 | ) | 2,661 | (92 | ) | ||||||||||||||||
Corporate debt securities | 5,894 | (36 | ) | 3,235 | (22 | ) | 9,129 | (58 | ) | ||||||||||||||||
Certificates of deposit | 999 | (1 | ) | — | — | 999 | (1 | ) | |||||||||||||||||
Total | $ | 10,498 | $ | (65 | ) | $ | 6,492 | $ | (116 | ) | $ | 16,990 | $ | (181 | ) | ||||||||||
December 31, 2013 | |||||||||||||||||||||||||
Less Than Twelve | Twelve Months or | Total | |||||||||||||||||||||||
Months | Greater | ||||||||||||||||||||||||
Estimated | Gross | Estimated Fair | Gross | Estimated | Gross | ||||||||||||||||||||
Fair | Unrealized | Value | Unrealized | Fair | Unrealized | ||||||||||||||||||||
Value | Losses | Losses | Value | Losses | |||||||||||||||||||||
U.S. Treasury and government agencies | $ | 13,220 | $ | (51 | ) | $ | — | $ | — | $ | 13,220 | $ | (51 | ) | |||||||||||
Mortgage-backed securities | 3,403 | (47 | ) | — | — | 3,403 | (47 | ) | |||||||||||||||||
Corporate debt securities | 23,410 | (310 | ) | — | — | 23,410 | (310 | ) | |||||||||||||||||
Certificates of deposit | 849 | (1 | ) | — | — | 849 | (1 | ) | |||||||||||||||||
Total | $ | 40,882 | $ | (409 | ) | $ | — | $ | — | $ | 40,882 | $ | (409 | ) | |||||||||||
The Company’s portfolio contained approximately 65 and 53 individual investment securities that were in an unrealized loss position as of December 31, 2014 and 2013, respectively. | |||||||||||||||||||||||||
The unrealized losses at December 31, 2014 were primarily attributable to changes in market interest rates since the securities were purchased. Management systematically evaluates investment securities for other-than-temporary declines in fair value on a quarterly basis. Investments are considered to be impaired when a decline in fair value is judged to be other-than-temporary. On a quarterly basis, the Company considers available quantitative and qualitative evidence in evaluating potential impairment of its investments. If the cost of an investment exceeds its fair value, the Company evaluates, among other factors, general market conditions, duration and extent to which the fair value is less than cost. If the fair value of a debt security is less than its amortized cost basis, an other-than-temporary impairment may be triggered in circumstances where (1) an entity has an intent to sell the security, (2) it is more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis, or (3) the entity does not expect to recover the entire amortized cost basis of the security (that is, a credit loss exists). Other-than-temporary impairments are separated into amounts representing credit losses which are recognized in earnings and amounts related to all other factors which are recognized in other comprehensive income (loss). The Company also considers potential adverse conditions related to the financial health of the issuer based on rating agency actions. As a result of management’s quarterly analyses for the years ended December 31, 2014 and 2013, no individual securities were considered other-than-temporarily impaired. | |||||||||||||||||||||||||
Restricted Investments | |||||||||||||||||||||||||
As of December 31, 2014 and 2013, certificates of deposit in the amount of $2.8 million and $4.9 million, respectively, were pledged as collateral associated with the capital lease related to certain computer software, software licenses, and hardware used in the Company’s insurance operations. See Note 12 for discussion of the associated capital lease obligation. | |||||||||||||||||||||||||
At December 31, 2014 and 2013, investments in fixed-maturity securities with an approximate carrying value of $7.0 million and $6.9 million, respectively, were on deposit with regulatory authorities as required by insurance regulations. |
Reinsurance
Reinsurance | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Reinsurance Disclosures [Abstract] | |||||||||||||||||||||||||
Reinsurance | 6 | Reinsurance | |||||||||||||||||||||||
In the ordinary course of business, the Company places reinsurance with other insurance companies in order to provide greater diversification of its business and limit the potential for losses arising from large risks. The Company’s reinsurance agreements provide for recovery of a portion of losses and loss expenses from reinsurers and reinsurance recoverables are recorded as assets. The Company is liable if the reinsurers are unable to satisfy their obligations under the agreements. The Company seeks to cede business to reinsurers generally with a financial strength rating of “A-” or better. | |||||||||||||||||||||||||
Quota-share agreements | |||||||||||||||||||||||||
In 2011, the Company entered into a quota-share agreement with a third-party reinsurance company under which the Company ceded 10% of business produced in Louisiana, Alabama, Texas and Illinois from September 1, 2011 through December 31, 2011. At December 31, 2011, this contract converted to a 40% quota-share reinsurance contract on the in-force business for the applicable states throughout 2012. Written premiums ceded under this agreement totaled $82.0 million during the year ended December 31, 2012, and this agreement was extended under the same terms through March 31, 2013 and terminated on a cutoff basis as of April 1, 2013. Upon termination, the Company recorded $27.2 million of returned premium, net of $7.7 million of deferred ceding commissions. Written premiums under this agreement during 2013 represented a return of previously ceded premiums totaling $5.5 million. Written premiums ceded under this agreement totaled $99.3 million. This agreement commuted in March 2015. | |||||||||||||||||||||||||
In 2013, the Company entered into a new quota-share agreement with the same third-party reinsurance company effective March 31, 2013, under which the Company ceded 40% for the same four states as the expiring agreement. This agreement was amended effective June 30, 2013, under which the Company ceded an additional 40% for the same four states for the remainder of 2013. This agreement was further amended to provide a $10.0 million reduction in ceded premiums in the fourth quarter. Written premiums ceded under this agreement totaled $145.8 million during the year ended December 31, 2013. This agreement terminated on January 1, 2014, resulting in the return of $47.2 million unearned premiums, net of $13.9 million of ceding commissions. Written premiums ceded under the agreement totaled $98.6 million. | |||||||||||||||||||||||||
Effective December 31, 2013, the Company entered into a new reinsurance agreement with four third-party reinsurance companies. Under this agreement, the Company ceded 20% of premiums and losses in Alabama, Illinois, Louisiana and Texas, and 60% in California on policies in force on December 31, 2013 or written or renewed on and after that date. Written premiums ceded under this agreement totaled $22.2 million as of December 31, 2013. On January 1, 2014, the quota-share rate increased to 60% for all business in force in these same states and for new and renewal business. On June 30, 2014, the reinsurance agreement was terminated, resulting in the return of $51.7 million of unearned premiums, net of $14.5 million of ceding commissions. Written premiums ceded under the agreement totaled $95.9 million. In March 2015, two of the quota share reinsurers commuted their participation on this agreement. | |||||||||||||||||||||||||
Effective June 30, 2014, a new reinsurance agreement with five third-party reinsurance companies was put in place to cede 85% of all business in force in these same states and for new and renewal business through June 30, 2015. Written premiums ceded under this agreement totaled $201.9 million through December 31, 2014. In March 2015, one of the quota share reinsurers commuted their participation on this agreement. | |||||||||||||||||||||||||
Assumed Reinsurance | |||||||||||||||||||||||||
The Company assumes reinsurance from a Texas county mutual insurance company (the county mutual) whereby the Company has assumed 100% of the policies issued by the county mutual for business produced by the Company’s owned general agents with policies in force prior to January 1, 2013. The county mutual does not retain any of this business and there are no loss limits other than the underlying policy limits. AIC has established a trust to secure the Company’s obligation under this reinsurance contract with a balance of $4.3 million and $15.0 million as of December 31, 2014 and 2013, of which $0.6 million and $3.6 million was held in cash equivalents as of December 31, 2014 and 2013, respectively. On January 1, 2013, the Company terminated this agreement on a cut-off basis and unearned premium of $11.8 million was returned to the ceding company. | |||||||||||||||||||||||||
The effect of reinsurance on premiums written and earned was as follows (in thousands): | |||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Written | Earned | Written | Earned | Written | Earned | ||||||||||||||||||||
Direct | $ | 331,179 | $ | 328,752 | $ | 304,007 | $ | 284,479 | $ | 198,359 | $ | 185,546 | |||||||||||||
Reinsurance assumed (returned) | — | — | (11,812 | ) | — | 38,663 | 36,718 | ||||||||||||||||||
Reinsurance ceded | (229,423 | ) | (231,716 | ) | (163,549 | ) | (118,796 | ) | (66,482 | ) | (78,528 | ) | |||||||||||||
Total | $ | 101,756 | $ | 97,036 | $ | 128,646 | $ | 165,683 | $ | 170,540 | $ | 143,736 | |||||||||||||
Under certain of the Company’s reinsurance transactions, the Company has received ceding commissions. The ceding commission rate varies based on loss experience. The estimates of loss experience are continually reviewed and adjusted, and the resulting adjustments to ceding commissions are reflected in current operations. Ceding commissions recognized, reflected as a reduction of selling, general and administrative expenses, were as follows (in thousands): | |||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Selling, general and administrative expenses | $ | 50,765 | $ | 29,716 | $ | 26,676 | |||||||||||||||||||
The amount of loss reserves and unearned premium the Company would remain liable for in the event its reinsurers are unable to meet their obligations were as follows (in thousands): | |||||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
Losses and loss adjustment expense reserves | $ | 86,421 | $ | 72,366 | |||||||||||||||||||||
Unearned premium reserve | 67,089 | 69,381 | |||||||||||||||||||||||
Total | $ | 153,510 | $ | 141,747 | |||||||||||||||||||||
The following table summarizes the ceded incurred losses and loss adjustment expenses (consisting of ceded paid losses and loss adjustment expenses and change in reserves for loss and loss adjustment expenses ceded) to various reinsurers (in thousands): | |||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Paid losses and loss adjustment expenses ceded | $ | 145,436 | $ | 74,903 | $ | 61,186 | |||||||||||||||||||
Change in reserves for loss and loss adjustment expenses ceded | 14,609 | 5,200 | (11,344 | ) | |||||||||||||||||||||
Incurred losses and loss adjustment expenses ceded | $ | 160,045 | $ | 80,103 | $ | 49,842 | |||||||||||||||||||
The Michigan Catastrophic Claims Association (MCCA) is the mandatory reinsurance facility that covers no-fault medical losses above a specific retention amount in Michigan. The Company discontinued writing policies in Michigan in 2011. For policies effective in 2011 and 2010, the retention amount was $0.5 million. When the Company wrote personal automobile policies in the state of Michigan, the Company ceded premiums and claims to the MCCA. Funding for MCCA comes from assessments against active automobile insurers based upon their proportionate market share of the state’s automobile liability insurance market. Insurers are allowed to pass along this cost to Michigan automobile policyholders. | |||||||||||||||||||||||||
Receivable from reinsurers | |||||||||||||||||||||||||
The table below presents the total amount of receivables due from reinsurers as of December 31, 2014 and 2013 (in thousands): | |||||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
Quota-share reinsurers for agreements effective June 30, 2014 | $ | 130,086 | $ | — | |||||||||||||||||||||
Michigan Catastrophic Claims Association | 27,610 | 34,878 | |||||||||||||||||||||||
Quota-share reinsurers for agreements effective December 31, 2013 | 14,096 | 22,218 | |||||||||||||||||||||||
Vesta Insurance Group | 9,270 | 13,435 | |||||||||||||||||||||||
Quota-share reinsurer for agreements effective January 1, 2011 and other | 3,188 | (4 | ) | ||||||||||||||||||||||
Excess of loss reinsurers | 839 | 3,413 | |||||||||||||||||||||||
Quota-share reinsurer for agreements effective September 1, 2011 and March 31, 2013 | (2,285 | ) | 91,879 | ||||||||||||||||||||||
Total reinsurance receivable | $ | 182,804 | $ | 165,819 | |||||||||||||||||||||
The quota-share reinsurers and the excess of loss reinsurers all have at least A- ratings from A.M. Best. Accordingly, the Company believes there is minimal credit risk related to these reinsurance receivables. Under the reinsurance agreement with Vesta Insurance Group (VIG), including primarily Vesta Fire Insurance Corporation (VFIC), AIC had the right, under certain circumstances, to require VFIC to provide a letter of credit or establish a trust account to collateralize gross amounts due from VFIC under the reinsurance agreement. At December 31, 2014, the VFIC Trust held $16.6 million (after cumulative withdrawals of $9.0 million through December 31, 2014), consisting of a U.S. Treasury money market account held in cash and cash equivalents, to collateralize the $9.3 million net recoverable from VFIC. In March 2015, AIC received a notice of determination from the VFIC Special Deputy Receiver on multiple proofs of claim for an aggregate amount of $15.3 million for various reinsurance balances with VFIC. As part of the notice of determination, AIC entered into a settlement agreement and release with the VFIC Special Deputy Receiver. AIC expects to receive the $15.3 million in settlement proceeds by May 2015. | |||||||||||||||||||||||||
At December 31, 2014, $0.2 million was included in reserves for losses and loss adjustment expenses that represented the amounts owed by AIC under a reinsurance agreement with a VIG-affiliated company. Affirmative established a trust account to secure the Company’s obligations under this reinsurance contract, which currently holds $10.7 million in a money market cash equivalent account (the AIC Trust). The Special Deputy Receiver in Texas had cumulative withdrawals from the AIC Trust of $0.4 million through December 2014, and the Special Deputy Receiver in Hawaii had cumulative withdrawals from the AIC Trust of $1.7 million through December 2014. | |||||||||||||||||||||||||
In June 2006, the Texas Department of Insurance (TDI) placed VFIC, along with several of its affiliates, into rehabilitation and subsequently into liquidation (except for VIG which remains in rehabilitation). In accordance with the TDI liquidation orders, all VIG subsidiary reinsurance agreements were terminated. Prior to the termination, the Company assumed various quota-share percentages according to which managing general agents (MGAs) produced the business. With respect to business produced by certain MGAs, the Company assumed 100% of the contracts. For business produced by other MGAs, the Company’s assumption was net after VIG cession to other reinsurers. For this latter assumed business, the other reinsurers and their participation varied by MGA. Prior to the termination of the VIG subsidiary reinsurance agreements, the agreements contained no maximum loss limit other than the underlying policy limits. The ceding company’s retention was zero and these agreements could be terminated at the end of any calendar quarter by either party with prior written notice of not less than 90 days. | |||||||||||||||||||||||||
VIG indemnified the Company for any losses due to uncollectible reinsurance related to reinsurance agreements entered into with unaffiliated reinsurers prior to December 31, 2003. As of December 31, 2014, all such unaffiliated reinsurers had A.M. best ratings of A- or better. The Company had reinsurance recoverable from VIG of $2.0 million and $2.2 million as of December 31, 2014 and 2013, respectively. |
Deferred_Policy_Acquisition_Co
Deferred Policy Acquisition Costs | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Insurance [Abstract] | |||||||||||||
Deferred Policy Acquisition Costs | 7 | Deferred Policy Acquisition Costs | |||||||||||
Policy acquisition costs, consisting of primarily commissions and premium taxes, net of ceding commission income, are deferred and charged against income ratably over the terms of the related policies. The components of deferred policy acquisition costs and the related amortization were as follows (in thousands): | |||||||||||||
Gross | Ceded | Net | |||||||||||
Asset (Liability) | |||||||||||||
Ending balance at December 31, 2012 | $ | 7,111 | $ | (7,013 | ) | $ | 98 | ||||||
Additions | 38,156 | (47,705 | ) | (9,549 | ) | ||||||||
Amortization | (32,680 | ) | 34,587 | 1,907 | |||||||||
Ending balance at December 31, 2013 | 12,587 | (20,131 | ) | (7,544 | ) | ||||||||
Additions | 58,940 | (63,215 | ) | (4,275 | ) | ||||||||
Amortization | (56,959 | ) | 64,564 | 7,605 | |||||||||
Ending balance at December 31, 2014 | $ | 14,568 | $ | (18,782 | ) | $ | (4,214 | ) | |||||
Property_and_Equipment_Net
Property and Equipment, Net | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property Plant And Equipment [Abstract] | |||||||||
Property and Equipment, Net | |||||||||
8 | Property and Equipment, Net | ||||||||
Property and equipment, net, consisted of the following as of December 31, 2014 and 2013 (in thousands): | |||||||||
2014 | 2013 | ||||||||
Computer software | $ | 50,565 | $ | 50,448 | |||||
Data processing equipment | 9,250 | 9,056 | |||||||
Leasehold improvements | 3,830 | 3,805 | |||||||
Furniture and office equipment | 3,664 | 3,637 | |||||||
Automobiles | 207 | 254 | |||||||
67,516 | 67,200 | ||||||||
Accumulated depreciation | (59,127 | ) | (53,222 | ) | |||||
Property and equipment, net | $ | 8,389 | $ | 13,978 | |||||
The Company’s depreciation expense was $6.0 million, $7.1 million, and $10.0 million for the years ended December 31, 2014, 2013 and 2012, respectively. |
Goodwill_and_Other_Intangible_
Goodwill and Other Intangible Assets | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||
Goodwill And Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | |||||||||||||||||||||||||||||||||
9 | Goodwill and Other Intangible Assets | ||||||||||||||||||||||||||||||||
The Company reports no carrying value for goodwill since the impairment analysis as of September 30, 2012. The Company reports under a single reporting segment and, as such, the goodwill analysis was measured under one reporting unit. Trends and developments resulted in management concluding that it is more likely than not that a goodwill impairment existed at September 30, 2012. Specifically, operating income and cash flow was less than plan, and premium production was below forecast. Due to the Company’s negative equity position of $101.3 million as of September 30, 2012, prior to goodwill impairment, ASC 350-20-35-30 required that the Company perform step two of the goodwill impairment test. | |||||||||||||||||||||||||||||||||
Consistent with prior assessments, the fair value of the Company was determined using an internally developed discounted cash flow method. Management made significant assumptions and estimates about the extent and timing of future cash flows, growth rates, and discount rates that represent unobservable inputs into the valuation methodologies used to calculate fair value. A discount rate of 19% was used at September 30, 2012, which the Company believes adequately reflected an appropriate risk-adjusted discount rate based on its overall cost of capital and company-specific risk factors related to cash flow, debt covenants compliance, and regulatory risk. The cash flows were estimated over a significant future period of time, which made those estimates and assumptions subject to a high degree of uncertainty. In step two of the goodwill impairment analysis, the Company determined the fair values of the Company’s assets and liabilities (including any unrecognized intangible assets) as if the Company had been acquired in a business combination. Determining the implied fair value of goodwill was judgmental in nature and involved the use of significant estimates and assumptions. The resulting implied fair value of goodwill was compared to the carrying value of goodwill, resulting in the write-off of the remaining goodwill balance of $23.4 million in 2012. | |||||||||||||||||||||||||||||||||
Indefinite-lived intangible assets primarily consist of state insurance licenses. Prior to the sale of the retail business, intangible assets included brand names that were evaluated for impairment utilizing the relief-from-royalty method. This method assumes that trade names have value to the extent that their owner is relieved of the obligation to pay royalties for the benefits received from them. This method requires an estimate of future revenue for the related brands, the appropriate royalty rate and the weighted average cost of capital. This analysis indicated an impairment of indefinite-lived intangible assets of $0.2 million as of September 30, 2012. Impairment of intangible assets is recorded in goodwill and other intangible assets impairment on the consolidated statements of operations. | |||||||||||||||||||||||||||||||||
Other intangible assets at December 31, 2014 and 2013 were as follows (in thousands): | |||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||
Cost | Impairment | Accumulated | Net | Cost | Impairment | Accumulated | Net | ||||||||||||||||||||||||||
Amortization | Amortization | ||||||||||||||||||||||||||||||||
Amortizable intangible assets: | |||||||||||||||||||||||||||||||||
Agency and customer relationships | $ | 8,054 | $ | (1,689 | ) | $ | (6,365 | ) | $ | — | $ | 8,054 | $ | (1,689 | ) | $ | (6,365 | ) | $ | — | |||||||||||||
Non-amortizable intangible assets: | |||||||||||||||||||||||||||||||||
Trade names and licenses | 3,144 | (244 | ) | (1,400 | ) | 1,500 | 3,144 | (244 | ) | (1,400 | ) | 1,500 | |||||||||||||||||||||
Total | $ | 11,198 | $ | (1,933 | ) | $ | (7,765 | ) | $ | 1,500 | $ | 11,198 | $ | (1,933 | ) | $ | (7,765 | ) | $ | 1,500 | |||||||||||||
The Company sold $12.8 million of trade name intangibles as part of the retail sale in 2013, as discussed in Note 4. | |||||||||||||||||||||||||||||||||
Reserve_for_Losses_and_Loss_Ad
Reserve for Losses and Loss Adjustment Expenses | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Insurance [Abstract] | |||||||||||||
Reserve for Losses and Loss Adjustment Expenses | 10 | Reserve for Losses and Loss Adjustment Expenses | |||||||||||
The following table provides a reconciliation of the beginning and ending reserves for unpaid losses and loss adjustment expenses for the periods indicated (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Gross balance at beginning of year | $ | 133,589 | $ | 138,854 | $ | 183,836 | |||||||
Less: Reinsurance recoverable | 72,366 | 67,166 | 78,510 | ||||||||||
Net balance at beginning of year | 61,223 | 71,688 | 105,326 | ||||||||||
Incurred related to: | |||||||||||||
Current year | 94,470 | 135,556 | 106,379 | ||||||||||
Prior years | 21,212 | 12,262 | 5,479 | ||||||||||
Paid related to: | |||||||||||||
Current year | 63,780 | 88,727 | 66,916 | ||||||||||
Prior years | 66,794 | 69,556 | 78,580 | ||||||||||
Net balance at the end of year | 46,331 | 61,223 | 71,688 | ||||||||||
Reinsurance recoverable | 86,421 | 72,366 | 67,166 | ||||||||||
Gross balance at the end of year | $ | 132,752 | $ | 133,589 | $ | 138,854 | |||||||
In 2014, the percentage of net losses and loss adjustment expense to net premiums earned (the net loss ratio) was 119.2% compared with 89.2% in 2013. The current year included $21.2 million of unfavorable prior period development primarily related to Louisiana, Texas and California losses from 2013 and 2012, which was primarily due to increases in estimated severity of liability claims. Excluding the prior year development, the current accident year net loss ratio was 97.4% compared with 81.8% in 2013. The use of quota-share reinsurance overstates the net loss ratio. Loss adjustment expenses include all of the business subject to the quota-share treaties with ceding commission income booked as an offset to selling, general and administrative expenses. Excluding the impact of the quota-share, the loss ratio for the 2014 accident year was 75.2% and 74.6% for the 2013 accident year. The increase in the current year was primarily due to the increase of 2014 losses based on the prior period development. | |||||||||||||
In 2013, the percentage of net losses and loss adjustment expense to net premiums earned (the net loss ratio) was 89.2% compared with 77.8% in 2012. The current year included $7.0 million of unfavorable prior period development primarily related to the 2011 accident year for our Louisiana business, $3.6 million related to the 2011 and 2012 Texas business, and $1.3 million for the accident year 2012 California business. Excluding the prior year development, the current accident year net loss ratio was 81.8% compared with 74.0% in 2012. The use of quota-share reinsurance overstates the net loss ratio. Loss adjustment expenses include all of the business subject to the quota-share treaties with ceding commission income booked as an offset to selling, general and administrative expenses. Excluding the impact of the quota-share, the loss ratio for the 2013 accident year was 74.6% and 69.4% for the 2012 accident year. The increase in the current year was primarily due to a significant increase in new business, which tends to have a higher loss ratio than renewal business. Also reflected in the above numbers is the effect of catastrophes. In the current accident year we have incurred catastrophes, net of reinsurance, equal to 2.0% for 2013 and 2012. Both of these numbers are higher than our long term average expectation of 0.5%. | |||||||||||||
Debt
Debt | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Debt | 11.Debt | ||||||||
The Company’s long-term debt instruments and balances outstanding at December 31, 2014 and 2013 were as follows (in thousands): | |||||||||
2014 | 2013 | ||||||||
Notes payable due 2035 | $ | 30,928 | $ | 30,928 | |||||
Notes payable due 2035 | 25,774 | 25,774 | |||||||
Notes payable due 2035 | 20,113 | 20,126 | |||||||
Total notes payable | 76,815 | 76,828 | |||||||
Senior secured credit facility effective September 2013, net of discount | 28,135 | 33,523 | |||||||
Subordinated secured credit facility | 16,566 | 13,650 | |||||||
Mortgage payable | 1,825 | 3,562 | |||||||
Total long-term debt | $ | 123,341 | $ | 127,563 | |||||
Notes payable | |||||||||
The $30.9 million notes payable due 2035 are redeemable in whole or in part by the Company. The notes adjust quarterly to the three-month LIBOR rate plus 3.60%. The interest rate as of December 31, 2014 was 3.84%. | |||||||||
The $25.8 million notes payable due 2035 are redeemable in whole or in part by the Company. The notes adjust quarterly to the three-month LIBOR rate plus 3.55%. The interest rate as of December 31, 2014 was 3.79%. | |||||||||
On February 28, 2012, the Company exercised its right to defer interest payments on the two notes payable mentioned above beginning with the scheduled interest payment due in March 2012 and continuing for a period of up to five years. The affected notes are associated with obligations to the Company’s unconsolidated trusts. The outstanding balance of the affected notes was $56.7 million as of December 31, 2014. The Company will continue to accrue interest on the principal during the interest deferral period and the unpaid deferred interest will also accrue interest. Deferred interest will be due and payable at the expiration of the interest deferral period and totaled $6.9 million as of December 31, 2014. | |||||||||
The $20.1 million notes payable due 2035 are redeemable in whole or in part by the Company. The notes adjust quarterly to the three-month LIBOR rate plus 3.95%. The interest rate as of December 31, 2014 was 4.19%. | |||||||||
Senior and subordinated secured facilities | |||||||||
On September 30, 2013, the Company replaced its existing senior credit facility with the proceeds from the sale of the retail business and with proceeds from two new debt arrangements. The Company’s new debt arrangement consisted of a $40.0 million senior secured credit facility with a maturity date of March 30, 2016, and a $10.0 million subordinated secured credit facility with a maturity date of March 30, 2017. | |||||||||
The pricing under the senior secured credit facility was amended effective September 30, 2014 to an adjusted LIBOR rate floor of 1.25%, plus 9.25%. The interest rate as of December 31, 2014 was 10.50%. The Company made principal payments of $6.5 million and $5.0 million in 2014 and 2013, respectively. As of December 31, 2014, the principal balance of the senior secured credit facility was $28.5 million. The senior secured credit facility was issued at a discount of $2.0 million that is amortized as interest expense over the expected term of the loan using the effective interest method. Repayment of the facility is due quarterly with $2.0 million payable for each quarter through September 30, 2014, $3.5 million payable each quarter through September 30, 2015, $4.5 million payable on December 31, 2015 and the remaining balance of $13.5 million due in full on March 30, 2016. Prepayments under this agreement are applied to the earliest payments due. Effective December 31, 2014, the senior secured credit facility was amended to postpone the principal payment of $3.5 million due March 31, 2015. The next payment due is $7.0 million on June 30, 2015. | |||||||||
The pricing under the subordinated secured credit facility is currently subject to an adjusted LIBOR rate floor of 1.25%, plus 18.00%. The interest rate as of December 31, 2014 was 19.25%. The subordinated secured credit facility included a commitment fee of $3.0 million that was added to the principal balance outstanding. Accrued interest is added to the outstanding principal balance until the senior secured credit facility is paid. Capitalized interest totaling $2.9 million was added to the principal balance during 2014. As of December 31, 2014, the principal balance of the subordinated secured credit facility was $16.6 million. | |||||||||
In March 2015, the Company entered into an amendment to the senior secured and subordinated credit facilities. The amendment included the following significant items: | |||||||||
· | A waiver under both the senior secured and subordinated credit facility of all defaults or events of default arising out of the breach of the Company’s risk-based capital ratio for the quarter ended December 31, 2014. | ||||||||
· | The principal payment of $3.5 million due March 31, 2015 under the senior secured facility postponed to June 30, 2015. The next principal payment due is $7.0 million on June 30, 2015. | ||||||||
· | A fee of 0% is due to the senior secured facility lenders upon approving the amendment. The fee shall be added to the principal amount of the credit facility as of March 31, 2015. | ||||||||
In November 2014, the Company entered into an amendment to the senior secured and subordinated credit facilities. The amendment included the following significant items: | |||||||||
· | A waiver under both the senior secured and subordinated credit facility of all defaults or events of default arising out of the breach of the Company’s risk-based capital ratio for the quarter ended September 30, 2014. | ||||||||
· | Effective September 30, 2014, the pricing under the senior secured facility changed from adjusted LIBOR rate floor plus 7.25% to the adjusted LIBOR rate floor plus 9.25%. The new interest rate on the senior secured facility beginning September 30, 2014 is 10.50%. | ||||||||
· | A fee of 1% is due to the senior secured facility lenders upon approving the amendment. The Company paid a 0.50% fee to the senior secured facility lenders in November 2014 and will pay an additional 0.50% fee to the senior secured facility lenders on March 31, 2015. | ||||||||
The Company recorded a $4.2 million pretax loss on extinguishment of debt as a result of the refinancing on September 30, 2013. The $4.2 million debt extinguishment loss resulted from the write-off of $2.2 million of deferred debt issuance costs and unamortized discount relating to the senior secured credit facility effective January 2007, $1.4 million of legal fees and a $0.6 million prepayment premium. | |||||||||
Debt issuance costs of $5.2 million were capitalized and will be amortized to interest expense over the expected term of the new credit agreements. | |||||||||
The Company’s obligations under the credit facilities are guaranteed by its material operating subsidiaries (other than the Company’s insurance companies) and are secured by a first lien security interest on all of the Company’s assets and the assets of its material operating subsidiaries (other than the Company’s insurance companies), including a pledge of 100% of the stock of AIC. | |||||||||
The following table summarizes the Company’s credit facilities scheduled principal payments (in thousands): | |||||||||
2015 | $ | 15,000 | |||||||
2016 | 13,500 | ||||||||
2017 | 16,566 | ||||||||
Total | $ | 45,066 | |||||||
Mortgage payable | |||||||||
In March 2013, the Company, through one of its indirect, wholly-owned subsidiaries, entered into a $4.8 million loan secured by commercial real estate to provide liquidity to AIC. The loan is evidenced by a promissory note secured by a mortgage security agreement and assignment of leases and rents on real estate located in Baton Rouge, Louisiana, which is held as investment in real property on the consolidated balance sheet. The mortgage bears interest at a per annum fixed rate of 4.95%. The mortgage requires monthly payments of principal and interest with the final payment due on the maturity date of December 15, 2015. As security for payments, the Company assigned rents due under the lease to a trustee. Pursuant to an escrow and servicing agreement, the trustee will receive rent due under the lease, make required payments due under the mortgage and maintain certain escrow accounts to pay for the necessary expenses of the property until the mortgage is paid in full. |
Capital_Lease_Obligation
Capital Lease Obligation | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Leases [Abstract] | |||||||||
Capital Lease Obligation | 12 | Capital Lease Obligation | |||||||
In December 2013, the Company entered into a capital lease obligation related to certain computer software, software licenses and hardware used in the Company’s insurance operations. A receivable for settlement of this transaction was included in other assets as of December 31, 2013. In January 2014, the Company received cash proceeds from the financing in the amount of $4.9 million. The transaction proceeds are pledged as collateral against all the Company’s obligations under the lease. The dollar amount of collateral pledged is set to decline over the term of the lease as the Company makes the scheduled lease payments. At the end of the initial term, the Company will have the right to purchase the software for a nominal fee, after which all rights, title and interest would transfer to the Company. | |||||||||
In May 2010, the Company entered into two capital lease obligations related to certain computer software, software licenses, and hardware used in the Company’s insurance operations. The Company received cash proceeds from the financing in the amount of $28.2 million. As required by the lease agreements, the Company purchased $28.2 million of certificates of deposit held in brokerage accounts and pledged such securities as collateral against all of the Company’s obligations under the lease. The dollar amount of collateral pledged is set to decline over the term of the lease as the Company makes the scheduled lease payments. At the end of the initial term, the Company will have the right to purchase the software for a nominal fee, after which all rights, title and interest would transfer to the Company. | |||||||||
In October 2012, one of the Lessors terminated their capital lease agreement with the Company. In December 2012, the Lessor conveyed all rights and interest in the leased property to the Company. | |||||||||
The remaining lease term for both capital leases is 6 months with monthly rental payments totaling approximately $0.6 million. Cash and securities pledged as collateral and held as available-for-sale securities were $4.9 million and $5.9 million as of December 31, 2014 and 2013, respectively. | |||||||||
Property under capital lease consisted of the following as of December 31, 2014 and 2013 (in thousands): | |||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Computer software, software licenses and hardware | $ | 34,212 | $ | 34,212 | |||||
Accumulated depreciation | (28,263 | ) | (23,971 | ) | |||||
Computer software, software licenses and hardware, net | $ | 5,949 | $ | 10,241 | |||||
Estimated future lease payments for the year ending December 31 (in thousands): | |||||||||
2015 | $ | 3,407 | |||||||
Less: Amount representing interest | (63 | ) | |||||||
Present value of future lease payments | $ | 3,344 | |||||||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Income Taxes | 13 | Income Taxes | |||||||||||
The provision for income taxes for the years ended December 31 consisted of the following (in thousands): | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Current tax expense (benefit) | $ | (1,702 | ) | $ | 4,067 | $ | 14 | ||||||
Deferred tax expense (benefit) | - | (3,178 | ) | 250 | |||||||||
Net income tax expense (benefit) | $ | (1,702 | ) | $ | 889 | $ | 264 | ||||||
The Company’s effective tax rate differed from the statutory rate of 35% for the years ended December 31 as follows (in thousands): | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Income (loss) before income taxes | $ | (33,909 | ) | $ | 31,607 | $ | (51,649 | ) | |||||
Tax provision computed at the federal statutory income tax rate | (11,868 | ) | 11,063 | (18,077 | ) | ||||||||
Increases (reductions) in tax resulting from: | |||||||||||||
Tax-exempt interest | (13 | ) | (17 | ) | (67 | ) | |||||||
State income taxes | (1,277 | ) | 3,115 | 140 | |||||||||
IRS audit settlement | — | — | (118 | ) | |||||||||
Goodwill impairment | — | — | 5,623 | ||||||||||
Valuation allowance | 11,420 | (13,303 | ) | 12,766 | |||||||||
Other | 36 | 31 | (3 | ) | |||||||||
Income tax expense (benefit) | $ | (1,702 | ) | $ | 889 | $ | 264 | ||||||
Effective tax rate | 5 | % | 2.8 | % | 0.5 | % | |||||||
Tax effects of temporary differences that give rise to significant portions of the Company’s deferred tax assets and deferred tax liabilities at December 31, 2014 and 2013 were as follows (in thousands): | |||||||||||||
2014 | 2013 | ||||||||||||
Deferred tax assets: | |||||||||||||
Unearned and advance premiums | $ | 1,115 | $ | 763 | |||||||||
Net operating loss carryforward | 80,041 | 68,318 | |||||||||||
Discounted unpaid losses | 704 | 1,085 | |||||||||||
Deferred revenue | 2,288 | 2,367 | |||||||||||
Allowance for doubtful accounts | 184 | 2,709 | |||||||||||
Goodwill | 3,066 | 3,655 | |||||||||||
Rent deferral | 712 | 752 | |||||||||||
Deferred acquisition costs, net asset | 1,475 | 2,640 | |||||||||||
Depreciation on fixed assets | 709 | 325 | |||||||||||
Alternative minimum tax and work opportunity credits | 696 | 1,276 | |||||||||||
Paid in kind interest | 1,248 | — | |||||||||||
Unrealized losses | — | 40 | |||||||||||
Intangibles | 47 | 68 | |||||||||||
Stock options | 1,585 | 1,580 | |||||||||||
State deferred tax assets | 3,146 | 2,598 | |||||||||||
Other deferred tax assets | 1,455 | 1,782 | |||||||||||
Total deferred tax assets | 98,471 | 89,958 | |||||||||||
Deferred tax liabilities: | |||||||||||||
Unrealized gains | 1 | — | |||||||||||
Debt extinguishment | 128 | 517 | |||||||||||
Gain on sale of retail business | — | 3,600 | |||||||||||
Other deferred tax liabilities | 1,158 | 1,013 | |||||||||||
Total deferred tax liabilities | 1,287 | 5,130 | |||||||||||
Deferred tax assets, net, before valuation allowance | 97,184 | 84,828 | |||||||||||
Valuation allowance | 97,184 | 84,828 | |||||||||||
Deferred tax liabilities, net | $ | — | $ | — | |||||||||
The change in valuation allowance attributable to continuing operations and other comprehensive income is presented for the years ended December 31 as follows (in thousands): | |||||||||||||
2014 | 2013 | ||||||||||||
Continuing operations | $ | 11,420 | $ | (13,303 | ) | ||||||||
Changes in other comprehensive income | (41 | ) | 230 | ||||||||||
$ | 11,379 | $ | (13,073 | ) | |||||||||
If actual results differ from these estimates or these estimates are adjusted in future periods, the valuation allowance may need to be adjusted, which could materially impact the Company’s financial position and results of operations. If sufficient positive evidence arises in the future indicating that all or a portion of the deferred tax assets meet the more likely than not standard, the valuation allowance would be reversed accordingly in the period that such a conclusion is reached. | |||||||||||||
As of December 31, 2014, the Company has available for income tax purposes federal net operating loss carryforwards (NOL’s), which may be used to offset future taxable income. The Company’s NOL’s expire as follows (in thousands): | |||||||||||||
2027 | $ | 11,189 | |||||||||||
2028 | 4,886 | ||||||||||||
2029 | 26,569 | ||||||||||||
2030 | 82,417 | ||||||||||||
2031 | 39,122 | ||||||||||||
2032 | 31,217 | ||||||||||||
2033 | - | ||||||||||||
2034 | 33,289 | ||||||||||||
$ | 228,689 | ||||||||||||
At December 31, 2014, the Company’s 2007 and prior tax years were closed by the IRS. |
Commitments
Commitments | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments And Contingencies Disclosure [Abstract] | |||||
Commitments | 14 | Commitments | |||
The Company leases office space for its insurance companies in various locations throughout the United States. The Company’s operating lease rental expenses were $2.5 million, $6.8 million and $8.8 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||
The following table summarizes the Company’s minimum commitments at December 31, 2014 (in thousands): | |||||
2015 | $ | 1,371 | |||
2016 | 1,848 | ||||
2017 | 1,807 | ||||
2018 | 1,790 | ||||
2019 | 1,764 | ||||
Thereafter | 4,542 | ||||
Total estimated future lease payment | 13,122 | ||||
Less: Sublease rental arrangements | (2,174 | ) | |||
Total | $ | 10,948 | |||
Legal_Proceedings
Legal Proceedings | 12 Months Ended | |
Dec. 31, 2014 | ||
Commitments And Contingencies Disclosure [Abstract] | ||
Legal Proceedings | 15 | Legal Proceedings |
The Company and its subsidiaries are named from time to time as parties in various legal actions arising in the ordinary course of the Company’s business and arising out of or related to claims made in connection with the Company’s insurance policies and claims handling. The Company believes that the resolution of these legal actions will not have a material adverse effect on the Company’s consolidated financial position or results of operations. However, the ultimate outcome of these matters is uncertain. | ||
On October 21, 2014, Affirmative Insurance Company (AIC) filed a complaint for breach of contract and declaratory judgment in the U.S. District Court for the District of South Carolina, styled Affirmative Insurance Company v. Travis K. Williams, et al., Case No. 5:14-CV-4087-JMC. The lawsuit arises out of AIC’s defense of its insured who was involved in a fatal automobile accident in November 2007. Plaintiffs in the underlying lawsuits have threatened bad faith litigation against AIC based on their belief that they will obtain an excess judgment against AIC’s insured in the future. AIC believes the allegation of bad faith lacks merit and intends to defend itself vigorously should an excess verdict be obtained and a bad faith action pursued. Further, AIC asserts that its insured breached the insurance policy by, among other things, failing to cooperate in the defense of the underlying lawsuit and entering into competing settlement negotiations with plaintiffs in the underlying lawsuit. AIC seeks a finding that defendants breached the insurance policy, a declaration that AIC has no duty to defend or indemnify the insured in the underlying lawsuits, and a declaration that AIC has not acted in bad faith under South Carolina law. On December 2, 2014, defendants filed a motion to dismiss, which is fully briefed and awaiting decision. No accurate estimate of the range of potential loss nor an assessment of the likelihood of unfavorable outcome can be made at this time. |
Net_Income_Loss_per_Common_Sha
Net Income (Loss) per Common Share | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Earnings Per Share [Abstract] | |||||||||||||
Net Income (Loss) per Common Share | 16 | Net Income (Loss) per Common Share | |||||||||||
Net income (loss) per common share is based on the weighted average number of shares outstanding. Diluted weighted average shares is calculated by adjusting basic weighted average shares outstanding by all potentially dilutive stock options and restricted stock. Restricted stock awards outstanding of 472,000 for the year ended December 31, 2014 (Nil for 2013 and 2012), were not included in the computation of diluted earnings per share because there was a loss from continuing operations during the period. Stock options outstanding of 1,263,000, 323,000 and 2,407,000 for the years ended December 31, 2014, 2013 and 2012, respectively, were not included in the computation of diluted earnings per share because the exercise price of the options was greater than the average market price of the common stock or there was a loss from continuing operations in the respective periods. | |||||||||||||
The following table sets forth the reconciliation of numerators and denominators for the basic and diluted earnings per share computation for each of the years ended December 31, 2014, 2013 and 2012 (in thousands, except per share amounts): | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Numerator: | |||||||||||||
Net income (loss) | $ | (32,207 | ) | $ | 30,718 | $ | (51,913 | ) | |||||
Denominator: | |||||||||||||
Weighted average basic shares | |||||||||||||
Weighted average common shares outstanding | 15,525 | 15,408 | 15,408 | ||||||||||
Weighted average diluted shares | |||||||||||||
Weighted average diluted shares outstanding | 15,525 | 15,622 | 15,408 | ||||||||||
Basic income (loss) per common share | $ | (2.07 | ) | $ | 1.99 | $ | (3.37 | ) | |||||
Diluted income (loss) per common share | $ | (2.07 | ) | $ | 1.97 | $ | (3.37 | ) | |||||
StockBased_Compensation
Stock-Based Compensation | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||||||||||||||||||||||||
Stock-Based Compensation | 17 | Stock-Based Compensation | |||||||||||||||||||||||
In May 2004, the Company’s board of directors adopted and its stockholders approved the 2004 Stock Incentive Plan (2004 Plan) to enable the Company to attract, retain and motivate eligible employees, directors and consultants through equity-based compensatory awards, including stock options, stock bonus awards, restricted and unrestricted stock awards, performance stock awards, stock appreciation rights and dividend equivalent rights. The maximum number of shares of common stock reserved for issuance under the 2004 Plan, as amended, is 3,000,000, subject to adjustment to reflect certain corporate transactions or changes in the Company’s capital structure. At December 31, 2014, 807,195 shares were reserved for future grants under the 2004 Plan. | |||||||||||||||||||||||||
Under the 2004 Plan, the board or Compensation Committee may fix the term and vesting schedule of each stock option, but no incentive stock option will be exercisable more than ten years after the date of grant. Vested stock options generally remain exercisable for up to three months after a participant’s termination of service or up to 12 months after a participant’s death or disability. Typically, the exercise price of each incentive stock option must not be less than 100% of the fair market value of the Company’s common stock on the grant date, and the exercise price of a nonqualified stock option must not be less than 20% of the fair market value of the Company’s common stock on the grant date. In the event that an incentive stock option is granted to a 10% stockholder, the term of such stock option may not be more than five years and the exercise price may not be less than 110% of the fair market value on the grant date. The exercise price of each stock option granted under the 2004 Plan may be paid in cash or in other forms of consideration in certain circumstances, including shares of common stock, deferred payment arrangements or pursuant to cashless exercise programs. A stock option award may provide that if shares of the Company’s common stock are used to pay the exercise price, additional stock options will be granted to the participant to purchase that number of shares used to pay the exercise price. Generally, stock options are not transferable except by will or the laws of descent and distribution, unless the board or Compensation Committee provides that a nonqualified stock option may be transferred. | |||||||||||||||||||||||||
The Company has a 1998 Omnibus Incentive Plan (1998 Plan) under which the Company may grant options to employees, directors and consultants for up to 803,169 shares of common stock. The exercise prices are determined by the board of directors, but shall not be less than 100% of the fair market value on the grant date or, in the case of any employee who is deemed to own more than 10% of the voting power of all classes of the Company’s stock, not less than 110% of the fair market value. The terms of the options are also determined by the board of directors, but shall never exceed ten years or, in the case of any employee who is deemed to own more than 10% of the voting power of all classes of the Company’s common stock, shall not exceed five years. The Company does not expect to grant any further equity awards under the 1998 Plan, but intends to make all future awards under the 2004 Plan. While all awards previously granted under the 1998 Plan will remain outstanding, 1998 Plan shares will not be available for re-grant if these outstanding awards are forfeited or cancelled. | |||||||||||||||||||||||||
Stock Options • There were no stock option awards granted during 2014. In prior years, the Company used the modified Black-Scholes model to estimate the fair value of employee stock options on the date of grant utilizing the assumptions noted below. The risk-free rate is based on the U.S. Treasury bill yield curve in effect at the time of grant for the expected term of the option. The expected term of options granted represents the period of time that the options are expected to be outstanding. The expected volatility assumption is derived from the historical volatility of the Company’s common stock over the most recent period commensurate with the estimated expected life of the Company’s stock options, adjusted for periods of significant volatility not expected to recur. The dividend yield was based on expected dividends at the time of grant. | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Weighted-average grant date fair value | $ | 1.76 | $ | 0.69 | |||||||||||||||||||||
Weighted-average risk-free interest rate | 1.71 | % | 1.15 | % | |||||||||||||||||||||
Expected term of option in years | 5 | 6 | |||||||||||||||||||||||
Weighted-average expected volatility | 43 | % | 43 | % | |||||||||||||||||||||
Dividend yield | — | — | |||||||||||||||||||||||
A summary of stock option activity for each of the three years ended December 31 follows (shares in thousands): | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Shares | Weighted Average | Shares | Weighted Average | Shares | Weighted Average | ||||||||||||||||||||
Exercise Price | Exercise Price | Exercise Price | |||||||||||||||||||||||
Outstanding at beginning of year | 1,573 | $ | 4.75 | 2,407 | $ | 5.07 | 1,748 | $ | 6.82 | ||||||||||||||||
Granted | - | - | 250 | 1.76 | 750 | 0.69 | |||||||||||||||||||
Exercised | (275 | ) | 0.75 | - | - | - | - | ||||||||||||||||||
Forfeited | (35 | ) | 5.06 | (1,084 | ) | 4.77 | (91 | ) | 1.65 | ||||||||||||||||
Outstanding at end of year | 1,263 | 5.61 | 1,573 | 4.75 | 2,407 | 5.07 | |||||||||||||||||||
The Company recognized compensation expense related to the stock options of $50,000, $300,000 and $403,000 during 2014, 2013 and 2012, respectively. The 2014 expense is further reduced by $57,000 to account for forfeited options recorded in the current period. Compensation expense is included in selling, general and administrative expenses in the consolidated statements of operations. Total unrecognized compensation expense related to unvested stock options was $4,002 at December 31, 2014, which will be recognized over a weighted-average period of approximately 1.5 months. | |||||||||||||||||||||||||
Stock options outstanding and exercisable at December 31, 2014 were as follows (shares in thousands): | |||||||||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||||||||
Range of Exercise Prices | Number | Weighted Average | Weighted Average | Number | Weighted Average | ||||||||||||||||||||
Outstanding | Exercise Price | Years of | Exercisable | Exercise Price | |||||||||||||||||||||
Remaining | |||||||||||||||||||||||||
Contractual Life | |||||||||||||||||||||||||
$0.69 to $1.75 | 275 | $ | 0.69 | 7.15 | 183 | $ | 0.69 | ||||||||||||||||||
$1.76 to $10.37 | 675 | 1.76 | 7.39 | 675 | 1.76 | ||||||||||||||||||||
$10.38 to $15.00 | 47 | 11.42 | 2.54 | 47 | 11.42 | ||||||||||||||||||||
$15.01 to $22.00 | 206 | 17.77 | 2.18 | 206 | 17.77 | ||||||||||||||||||||
$22.01 to $30.00 | 60 | 25.28 | 2.06 | 60 | 25.28 | ||||||||||||||||||||
$0.69 to $30.00 | 1,263 | 5.61 | 6.05 | 1,171 | 6 | ||||||||||||||||||||
The stock options outstanding and exercisable at December 31, 2014 had aggregate intrinsic values of zero as the aggregate exercise price was greater than the aggregate market value. Stock options exercised during 2014 had an aggregate intrinsic value of $481,000. No stock options were exercised in 2013 or 2012. The Company received $207,000 from the exercise of 274,999 share options during 2014. | |||||||||||||||||||||||||
Restricted Stock Awards • The Company recognized compensation expense related to the restricted stock awards of $381,000 in 2014, $0 in 2013 and $4,000 during 2012. Compensation expense is included in selling, general and administrative expenses in the consolidated statements of operations. As of December 31, 2014, there was $0.9 million of unrecognized compensation cost related to unvested restricted stock awards. | |||||||||||||||||||||||||
The outstanding restricted stock awards of 472,000 at December 31, 2014 had an aggregate intrinsic value of $585,200. The aggregate fair value of restricted stock awards vested during 2012 was $1,000 at the date of vesting. |
Employee_Benefit_Plan
Employee Benefit Plan | 12 Months Ended | |
Dec. 31, 2014 | ||
Postemployment Benefits [Abstract] | ||
Employee Benefit Plan | 18 | Employee Benefit Plan |
The Company sponsors a defined contribution retirement plan under Section 401(k) of the Internal Revenue Code. The plan covers substantially all employees who meet specified service requirements. Under the plan, the Company may, at its discretion, match 100% of each employee’s contribution, up to 3% of the employee’s earnings, plus 50% of each employee’s contribution for the next 2% of the employee’s salary. There were no employer matching contributions to the 401(k) plan in 2012 or 2013. The Company reinstated matching contributions to the 401(k) plan beginning January 1, 2014. Total costs incurred by the Company in 2014 was $0.6 million. |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended | |
Dec. 31, 2014 | ||
Related Party Transactions [Abstract] | ||
Related Party Transactions | 19 | Related Party Transactions |
On September 30, 2013, the Company entered into a $10.0 million subordinated secured credit facility with JCF AFFM Debt Holdings, L.P., as Administrative Agent and Collateral Agent. JCF AFFM Debt Holdings, L.P. is an affiliate of J.C. Flowers & Co. LLC and New Affirmative LLC, the Company’s majority shareholder. |
Disclosures_for_Items_Reclassi
Disclosures for Items Reclassified Out of Accumulated Other Comprehensive Income (Loss) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Equity [Abstract] | |||||||||
Disclosures for Items Reclassified Out of Accumulated Other Comprehensive Income (Loss) | 20 | Disclosures for Items Reclassified Out of Accumulated Other Comprehensive Income (Loss) | |||||||
The following table sets forth the components of accumulated other comprehensive income (loss), including reclassification adjustments (in thousands): | |||||||||
Year | Year | ||||||||
Ended | Ended | ||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Beginning balance | $ | (1,654 | ) | $ | (998 | ) | |||
Other comprehensive income (loss) before reclassifications | 164 | (607 | ) | ||||||
Amounts reclassified from accumulated other comprehensive income (loss) | (46 | ) | (49 | ) | |||||
Net current period other comprehensive income (loss) | 118 | (656 | ) | ||||||
Ending balance | $ | (1,536 | ) | $ | (1,654 | ) | |||
Net gain in accumulated other comprehensive income (loss) reclassifications for previously unrealized net gains on available-for-sale securities was $46,000 and $49,000 for the years ended December 31, 2014 and 2013, respectively. The gain was not net of any taxes due to the valuation allowance for deferred income taxes. |
Regulatory_Restrictions
Regulatory Restrictions | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Regulatory Restrictions [Abstract] | |||||
Regulatory Restrictions | 21 | Regulatory Restrictions | |||
The Company is subject to comprehensive regulation and supervision by government agencies in Illinois, Louisiana, Michigan and New York, the states in which the Company’s insurance company subsidiaries are domiciled, as well as in the states where its subsidiaries sell insurance products, issue policies, handle claims and finance premiums. Certain states impose restrictions or require prior regulatory approval of certain corporate actions, which may adversely affect the Company’s ability to operate, innovate, obtain necessary rate adjustments in a timely manner or grow its business profitably. These regulations provide safeguards for policy owners and are not intended to protect the interests of stockholders. The Company’s ability to comply with these laws and regulations, and to obtain necessary regulatory action in a timely manner, is and will continue to be critical to its success. | |||||
The Company’s insurance company subsidiaries are subject to risk-based capital standards and other minimum capital and surplus requirements imposed under applicable state laws, including the laws of their state of domicile. The risk-based capital standards, based upon the Risk-Based Capital Model Act, adopted by the National Association of Insurance Commissioners (NAIC), require the Company’s insurance company subsidiaries to report their results of risk-based capital calculations to state departments of insurance and the NAIC. Failure to meet applicable risk-based capital requirements or minimum statutory capital requirements could subject the Company to further examination or corrective action imposed by state regulators, including limitations on the Company’s writing of additional business, state supervision or liquidation. Any changes in existing risk-based capital requirements or minimum statutory capital requirements may require the Company to increase its statutory capital levels. These risk-based capital standards provide for different levels of regulatory attention depending upon the ratio of an insurance company’s total adjusted capital, as calculated in accordance with NAIC guidelines, to its authorized control level risk-based capital and trend test. Authorized control level risk-based capital is the number determined by applying the NAIC’s risk-based capital formula, which measures the minimum amount of capital that an insurance company needs to support its overall business operations. At December 31, 2014, three of the Company’s insurance subsidiaries maintained a risk-based capital level that was in excess of an amount that would require any corrective actions. The risk-based capital level of Affirmative Insurance Company (AIC) triggered a regulatory action level event under the NAIC standard. As a result, AIC is required to submit a plan to the Illinois Department of Insurance (IDOI) in April 2015 detailing corrective actions it will take to return its risk-based capital ratio to an acceptable level. Upon receipt of the plan, the IDOI may accept the plan, require further amendments to the plan or take additional regulatory action including, but not limited, to placing AIC in receivership. The following is a comparison of AIC’s total statutory capital to risk-based capital as at December 31, 2014 (in thousands): | |||||
Total reported statutory capital | $ | 24,265 | |||
Company action level | 37,432 | ||||
Regulatory action level | 28,074 | ||||
Authorized control level | 18,716 | ||||
Mandatory control level | 13,101 | ||||
Effective January 1, 2012, the State of Illinois adopted the revised NAIC Risk-Based Capital Model Act that includes a risk-based capital trend test as another manner under which the company action level could be triggered. The test is applicable when an insurance company has a risk-based capital ratio between 200% and 300% and a combined ratio of more than 120%. At December 31, 2014, three of our insurance subsidiaries maintained a risk-based capital level that was in excess of an amount that would require any corrective actions. Affirmative Insurance Company (AIC) was at the Regulatory Action Level, thus, this test does not apply. | |||||
State insurance laws restrict the ability of the Company’s insurance company subsidiaries to declare stockholder dividends. These subsidiaries may not issue an “extraordinary dividend” until 30 days after the applicable commissioner of insurance has received notice of the intended dividend and has not objected in such time or until the commissioner has approved the payment of the extraordinary dividend within the 30-day period. In most states, an extraordinary dividend is defined as any dividend or distribution of cash or other property whose fair market value, together with that of other dividends and distributions made within the preceding 12 months, exceeds the greater of 10.0% of the insurance company’s surplus as of the preceding year-end or the insurance company’s net income for the preceding year, in each case determined in accordance with statutory accounting practices. In addition, dividends may only be paid from unassigned earnings and an insurance company’s remaining surplus must be both reasonable in relation to its outstanding liabilities and adequate to its financial needs. As of December 31, 2014, the Company’s insurance companies could not pay ordinary dividends to the Company without prior regulatory approval due to a negative unassigned surplus position of Affirmative Insurance Company. |
Business_Concentrations
Business Concentrations | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Risks And Uncertainties [Abstract] | |||||||||||||
Business Concentrations | 22 | Business Concentrations | |||||||||||
The majority of the Company’s commission income and fees are directly related to the premiums written through its insurance subsidiaries from policies sold to individuals located in certain states. Accordingly, the Company could be adversely affected by economic downturns, natural disasters, and other conditions that may occur from time-to-time in these states. | |||||||||||||
The following table displays the Company’s gross written premiums managed and assumed by state (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Louisiana | $ | 123,934 | $ | 119,828 | $ | 106,841 | |||||||
Texas | 102,766 | 93,573 | 54,009 | ||||||||||
California | 81,905 | 73,741 | 17,706 | ||||||||||
Alabama | 24,794 | 25,272 | 21,270 | ||||||||||
Illinois | 15,655 | 18,359 | 23,887 | ||||||||||
Indiana | 6,073 | 6,846 | 8,092 | ||||||||||
Missouri | 3,086 | 2,799 | 3,084 | ||||||||||
South Carolina | — | — | 2,127 | ||||||||||
Other | 44 | 49 | 6 | ||||||||||
Total written premium managed | 358,257 | 340,467 | 237,022 | ||||||||||
Less Texas written premium not underwritten | 27,078 | 48,272 | — | ||||||||||
Gross underwritten premiums | $ | 331,179 | $ | 292,195 | $ | 237,022 | |||||||
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||
Fair Value of Financial Instruments | 23 | Fair Value of Financial Instruments | |||||||||||||||||||
The Company utilizes a hierarchy of valuation techniques for the disclosure of fair value estimates based on whether the significant inputs into the valuation are observable. In determining the level of hierarchy in which the estimate is disclosed, the highest priority is given to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs that reflect the Company’s significant market assumptions. The Company measures certain assets and liabilities at fair value on a recurring basis, including investment securities classified as available-for-sale, cash equivalents and other invested assets. Following is a brief description of the type of valuation information that qualifies as a financial asset or liability for each level: | |||||||||||||||||||||
Level 1 — Unadjusted quoted market prices for identical assets or liabilities in active markets which are accessible by the Company. | |||||||||||||||||||||
Level 2 — Observable prices in active markets for similar assets or liabilities. Prices for identical or similar assets or liabilities in markets that are not active. Directly observable market inputs for substantially the full term of the asset or liability, e.g., interest rates and yield curves at commonly quoted intervals, volatilities, prepayment speeds, default rates, and credit spreads. Market inputs that are not directly observable, but are derived from or corroborated by observable market data. | |||||||||||||||||||||
Level 3 — Unobservable inputs based on the Company’s own judgment as to assumptions a market participant would use, including inputs derived from extrapolation and interpolation that are not corroborated by observable market data. | |||||||||||||||||||||
The Company evaluates the various types of financial assets and liabilities to determine the appropriate fair value hierarchy based upon trading activity and the observation of market inputs. The Company employs control processes to validate the reasonableness of the fair value estimates of its assets and liabilities, including those estimates based on prices and quotes obtained from independent third-party sources. The Company’s procedures generally include, but are not limited to, initial and ongoing evaluation of methodologies used by independent third-parties and additional pricing services are used as a comparison to determine the reasonableness of fair values used in pricing the investment portfolio. | |||||||||||||||||||||
The Company recognizes transfers between levels at the actual date of the event or change in circumstances that caused the transfer. | |||||||||||||||||||||
Where possible, the Company utilizes quoted market prices to measure fair value. For assets and liabilities that have quoted market prices in active markets, the Company uses the quoted market prices as fair value and includes these prices in the amounts disclosed in Level 1 of the hierarchy. When quoted market prices in active markets are unavailable, the Company determines fair values based on independent external valuation information obtained from independent pricing services, which utilize various models and valuation techniques based on a range of inputs including pricing models, quoted market prices of publicly traded securities with similar duration and yield, time value, yield curve, prepayment speeds, default rates and discounted cash flows. In most cases, these estimates are determined based on independent third-party valuation information, and the amounts are disclosed as Level 2 or Level 3 of the fair value hierarchy depending on the level of observable market inputs. | |||||||||||||||||||||
Financial assets measured at fair value on a recurring basis | |||||||||||||||||||||
The following table provides information as of December 31, 2014 about the Company’s financial assets measured at fair value on a recurring basis (in thousands): | |||||||||||||||||||||
Total | Quoted | Significant | Significant | ||||||||||||||||||
Prices in | Other | Unobservable | |||||||||||||||||||
Active | Observable | Inputs | |||||||||||||||||||
Markets | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||||||
U.S. Treasury and government agencies | $ | 8,314 | $ | 8,314 | $ | — | $ | — | |||||||||||||
Mortgage-backed securities | 3,313 | — | 3,313 | — | |||||||||||||||||
States and political subdivisions | 1,519 | — | 1,519 | — | |||||||||||||||||
Corporate debt securities | 17,372 | — | 17,372 | — | |||||||||||||||||
Certificates of deposit | 2,767 | — | 2,767 | — | |||||||||||||||||
Total investment securities | 33,285 | 8,314 | 24,971 | — | |||||||||||||||||
Other invested assets | 4,501 | — | — | 4,501 | |||||||||||||||||
Total assets | $ | 37,786 | $ | 8,314 | $ | 24,971 | $ | 4,501 | |||||||||||||
The following table provides information as of December 31, 2013 about the Company’s financial assets measured at fair value on a recurring basis (in thousands): | |||||||||||||||||||||
Total | Quoted | Significant | Significant | ||||||||||||||||||
Prices in | Other | Unobservable | |||||||||||||||||||
Active | Observable | Inputs | |||||||||||||||||||
Markets | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||||||
U.S. Treasury and government agencies | $ | 17,834 | $ | 17,834 | $ | — | $ | — | |||||||||||||
Mortgage-backed securities | 3,980 | — | 3,980 | — | |||||||||||||||||
States and political subdivisions | 3,333 | — | 3,333 | — | |||||||||||||||||
Corporate debt securities | 32,283 | — | 32,283 | — | |||||||||||||||||
Certificates of deposit | 4,891 | — | 4,891 | — | |||||||||||||||||
Total investment securities | 62,321 | 17,834 | 44,487 | — | |||||||||||||||||
Other invested assets | 4,085 | — | — | 4,085 | |||||||||||||||||
Total assets | $ | 66,406 | $ | 17,834 | $ | 44,487 | $ | 4,085 | |||||||||||||
Level 1 Financial assets | |||||||||||||||||||||
Financial assets classified as Level 1 in the fair value hierarchy include U.S. Treasury and government agencies securities. These securities are actively traded and the Company estimates the fair value of these securities using unadjusted quoted market prices. | |||||||||||||||||||||
Level 2 Financial assets | |||||||||||||||||||||
Financial assets classified as Level 2 in the fair value hierarchy include mortgage-backed securities, tax-exempt securities, corporate bonds and certificates of deposit. The fair value of these securities is determined based on observable market inputs provided by independent third-party pricing services. To date, the Company has not experienced a circumstance where it has determined that an adjustment is required to a quote or price received from independent third-party pricing sources. To the extent the Company determines that a price or quote is inconsistent with actual trading activity observed in that investment or similar investments, the Company would determine a fair value using this observable market information and disclose the occurrence of this circumstance. All of the fair values of securities disclosed in Level 2 are estimated based on independent third-party pricing services. | |||||||||||||||||||||
Level 3 Financial assets | |||||||||||||||||||||
The Company’s Level 3 financial assets include an investment in a hedge fund, which is presented as other invested assets in the consolidated balance sheets. The Company elected the fair value option for its investment in the hedge fund and measures the fair value of the hedge fund on the basis of the net asset value of the fund as reported by the fund manager. The hedge fund is primarily invested in residential mortgage-backed securities and other asset-backed securities which are recorded at fair value as determined by the fund manager. Such fair value determination is based on quoted marked prices, bid prices, or the fund manager’s proprietary valuation models where quoted prices are unavailable or deemed to be inadequately representative of fair value. Significant decreases in the fair value of the underlying securities in the hedge fund would result in a significantly lower fair value measurement of other invested assets as reported in the consolidated balance sheets. | |||||||||||||||||||||
Fair value measurements for assets in Level 3 for the year ended December 31, 2014 were as follows (in thousands): | |||||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||||
Using Significant | |||||||||||||||||||||
Unobservable Inputs | |||||||||||||||||||||
(Level 3) | |||||||||||||||||||||
Other Invested Assets | |||||||||||||||||||||
Balance at January 1, 2014 | $ | 4,085 | |||||||||||||||||||
Transfers into Level 3 | — | ||||||||||||||||||||
Total gains included in earnings as net investment income | 416 | ||||||||||||||||||||
Settlements | — | ||||||||||||||||||||
Balance at December 31, 2014 | $ | 4,501 | |||||||||||||||||||
Fair value measurements for assets in Level 3 for the year ended December 31, 2013 were as follows (in thousands): | |||||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||||
Using Significant | |||||||||||||||||||||
Unobservable Inputs | |||||||||||||||||||||
(Level 3) | |||||||||||||||||||||
Other Invested Assets | |||||||||||||||||||||
Balance at January 1, 2013 | $ | 3,390 | |||||||||||||||||||
Transfers into Level 3 | — | ||||||||||||||||||||
Total gains included in earnings as net investment income | 695 | ||||||||||||||||||||
Settlements | — | ||||||||||||||||||||
Balance at December 31, 2013 | $ | 4,085 | |||||||||||||||||||
The Company did not have any transfers between Levels 1 and 2 during the years ended December 31, 2014 or 2013. | |||||||||||||||||||||
Financial Instruments Disclosed, But Not Carried, At Fair Value | |||||||||||||||||||||
Fair values represent the Company’s best estimates and may not be substantiated by comparisons to independent markets and, in many cases, could not be realized in immediate settlement of the instruments. | |||||||||||||||||||||
The following table presents the carrying value and estimated fair value of the Company’s financial assets and liabilities disclosed, but not carried, at fair value at December 31, 2014 and the level within the fair value hierarchy (in thousands): | |||||||||||||||||||||
Carrying | Estimated | Level 1 | Level 2 | Level 3 | |||||||||||||||||
Value | Fair Value | ||||||||||||||||||||
Assets: | |||||||||||||||||||||
Cash and cash equivalents | $ | 23,863 | $ | 23,863 | $ | 23,863 | $ | — | $ | — | |||||||||||
Fiduciary and restricted cash | 4,794 | 4,794 | 4,794 | — | — | ||||||||||||||||
Total | $ | 28,657 | $ | 28,657 | $ | 28,657 | $ | — | $ | — | |||||||||||
Liabilities: | |||||||||||||||||||||
Notes payable | $ | 76,815 | $ | 14,289 | $ | — | $ | — | $ | 14,289 | |||||||||||
Senior secured credit facility | 28,135 | 28,254 | — | — | 28,254 | ||||||||||||||||
Subordinated secured credit facility | 16,566 | 14,126 | — | — | 14,126 | ||||||||||||||||
Mortgage payable | 1,825 | 1,825 | — | — | 1,825 | ||||||||||||||||
Total | $ | 123,341 | $ | 58,494 | $ | — | $ | — | $ | 58,494 | |||||||||||
The following table presents the carrying value and estimated fair value of the Company’s financial assets and liabilities disclosed, but not carried, at fair value at December 31, 2013 and the level within the fair value hierarchy (in thousands): | |||||||||||||||||||||
Carrying | Estimated | Level 1 | Level 2 | Level 3 | |||||||||||||||||
Value | Fair Value | ||||||||||||||||||||
Assets: | |||||||||||||||||||||
Cash and cash equivalents | $ | 44,569 | $ | 44,569 | $ | 44,569 | $ | — | $ | — | |||||||||||
Fiduciary and restricted cash | 1,369 | 1,369 | 1,369 | — | — | ||||||||||||||||
Total | $ | 45,938 | $ | 45,938 | $ | 45,938 | $ | — | $ | — | |||||||||||
Liabilities: | |||||||||||||||||||||
Notes payable | $ | 76,828 | $ | 13,181 | $ | — | $ | — | $ | 13,181 | |||||||||||
Senior secured credit facility | 33,523 | 34,476 | — | — | 34,476 | ||||||||||||||||
Subordinated secured credit facility | 13,650 | 11,723 | — | — | 11,723 | ||||||||||||||||
Mortgage payable | 3,562 | 3,562 | — | — | 3,562 | ||||||||||||||||
Total | $ | 127,563 | $ | 62,942 | $ | — | $ | — | $ | 62,942 | |||||||||||
The fair values of the notes payable, the senior secured credit facility and the subordinated secured credit facility were estimated using discounted cash flow analyses prepared by a third-party valuation source based on inputs and assumptions, such as credit and default risk associated with the debt. The mortgage payable is reported at par value which approximates its fair value due to its short-term nature. |
Statutory_Financial_Informatio
Statutory Financial Information and Accounting Policies | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Supplementary Insurance Information [Abstract] | |||||||||||||
Statutory Financial Information and Accounting Policies | 24 | Statutory Financial Information and Accounting Policies | |||||||||||
The Company’s insurance subsidiaries are required to file statutory-basis financial statements with state insurance departments in all states where they are licensed. These statements are prepared in accordance with accounting practices prescribed or permitted by the applicable state of domicile. Each state of domicile requires that insurance companies domiciled in those states prepare their statutory-basis financial statements in accordance with the National Association of Insurance Commissioners Accounting Principles and Procedures Manual subject to any deviations prescribed or permitted by the insurance commissioner in each state of domicile. | |||||||||||||
Affirmative Insurance Company of Michigan (AIC of Michigan), USAgencies Casualty Insurance Company, Inc. (Casualty), and USAgencies Direct Insurance Company (Direct) are wholly-owned subsidiaries of AIC and are included as common stock investments on AIC’s balance sheet in its statutory surplus. In November 2012, a former subsidiary of AIC, Insura Property and Casualty Company was merged into AIC and Direct was sold from AIC to Casualty. The following table summarizes selected statutory information of the Company’s insurance subsidiaries ended December 31 (in thousands): | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Statutory capital and surplus: | |||||||||||||
Affirmative Insurance Company (AIC) | $ | 24,265 | $ | 46,291 | $ | 48,115 | |||||||
Affirmative Insurance Company of Michigan | 9,225 | 9,211 | 9,206 | ||||||||||
(AIC of Michigan) | |||||||||||||
USAgencies Casualty Insurance Company, Inc | 27,278 | 25,728 | 24,258 | ||||||||||
(Casualty) | |||||||||||||
USAgencies Direct Insurance Company (Direct) | 5,326 | 5,300 | 5,273 | ||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Statutory net income (loss): | |||||||||||||
Affirmative Insurance Company | $ | (51,253 | ) | $ | (11,343 | ) | $ | (20,786 | ) | ||||
Affirmative Insurance Company of Michigan | 14 | 4 | (7 | ) | |||||||||
USAgencies Casualty Insurance Company, Inc. | 136 | 731 | 1,128 | ||||||||||
USAgencies Direct Insurance Company | 26 | 28 | 15 | ||||||||||
The amount of statutory capital and surplus necessary for AIC to satisfy regulatory requirements as of December 31, 2014 was $37.4 million. Except for AIC not achieving the minimum capital and surplus requirement as at December 31, 2014, the statutory capital and surplus of each of the Company’s insurance subsidiaries exceeded the highest level of minimum regulatory required capital as of December 31, 2014, 2013 and 2012. |
Unaudited_Quarterly_Financial_
Unaudited Quarterly Financial Data | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||
Unaudited Quarterly Financial Data | 25 | Unaudited Quarterly Financial Data | |||||||||||||||
The following is a summary of the Company’s unaudited quarterly consolidated results from continuing operations for the years ended December 31, 2014 and 2013 (in thousands, except per share data): | |||||||||||||||||
Quarter Ended | |||||||||||||||||
March 31 | June 30 | September 30 | December 31 | ||||||||||||||
2014:00:00 | |||||||||||||||||
Net premiums earned | $ | 33,364 | $ | 35,188 | $ | 14,274 | $ | 14,210 | |||||||||
Total revenues | 45,526 | 46,968 | 25,395 | 25,644 | |||||||||||||
Net losses and loss adjustment expenses | 27,552 | 34,560 | 30,853 | 22,717 | |||||||||||||
Net income (loss) | 664 | (7,242 | ) | (17,755 | ) | (7,874 | ) | ||||||||||
Diluted income (loss) per common share | 0.04 | (0.47 | ) | (1.14 | ) | (0.50 | ) | ||||||||||
Diluted weighted-average common shares | 16,282 | 15,431 | 15,572 | 15,683 | |||||||||||||
2013:00:00 | |||||||||||||||||
Net premiums earned | $ | 41,332 | $ | 49,658 | $ | 30,802 | $ | 43,891 | |||||||||
Total revenues | 63,818 | 72,780 | 53,310 | 56,216 | |||||||||||||
Net losses and loss adjustment expenses | 31,563 | 38,243 | 33,725 | 44,287 | |||||||||||||
Net income (loss) | (6,251 | ) | 1,485 | 47,618 | (12,134 | ) | |||||||||||
Diluted income (loss) per common share | (0.41 | ) | 0.1 | 3.02 | (0.76 | ) | |||||||||||
Diluted weighted-average common shares | 15,408 | 15,408 | 15,772 | 15,941 | |||||||||||||
Parent_Company_Financials
Parent Company Financials | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Condensed Financial Information Of Parent Company Only Disclosure [Abstract] | |||||||||||||
Parent Company Financials | 26 | Parent Company Financials | |||||||||||
The condensed financial information of the parent company, Affirmative Insurance Holdings, Inc. as of December 31, 2014 and 2013, and for each of the three years ended December 31, 2014, 2013 and 2012 is presented as follows (in thousands, except share data): | |||||||||||||
Condensed Balance Sheets | |||||||||||||
2014 | 2013 | ||||||||||||
Assets | |||||||||||||
Cash and cash equivalents | $ | 27 | $ | 1,012 | |||||||||
Fiduciary and restricted cash | 320 | 319 | |||||||||||
Investment in subsidiaries | 84,361 | 106,446 | |||||||||||
Income taxes receivable | 149 | — | |||||||||||
Other intangible assets, net | 273 | 273 | |||||||||||
Other assets | 5,523 | 21,903 | |||||||||||
Total assets | $ | 90,653 | $ | 129,953 | |||||||||
Liabilities and Stockholders’ Deficit | |||||||||||||
Liabilities: | |||||||||||||
Payable to subsidiaries | $ | 116,170 | $ | 120,441 | |||||||||
Income taxes payable | — | 3,641 | |||||||||||
Debt | 101,402 | 103,875 | |||||||||||
Other liabilities | 7,480 | 4,888 | |||||||||||
Total liabilities | 225,052 | 232,845 | |||||||||||
Stockholders’ deficit: | |||||||||||||
Common stock, $0.01 par value; 75,000,000 shares authorized, | 190 | 182 | |||||||||||
18,949,220 shares issued and 16,155,357 shares outstanding | |||||||||||||
at December 31, 2014; 18,202,221 shares issued and 15,408,358 | |||||||||||||
shares outstanding at December 31, 2013 | |||||||||||||
Additional paid-in capital | 167,623 | 167,049 | |||||||||||
Treasury stock, at cost (2,793,863 shares at December 31, 2014 and 2013) | (32,910 | ) | (32,910 | ) | |||||||||
Accumulated other comprehensive loss | (1,536 | ) | (1,654 | ) | |||||||||
Retained deficit | (267,766 | ) | (235,559 | ) | |||||||||
Total stockholders’ deficit | (134,399 | ) | (102,892 | ) | |||||||||
Total liabilities and stockholders’ deficit | $ | 90,653 | $ | 129,953 | |||||||||
Condensed Statements of Operations | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Revenues | |||||||||||||
Dividends from subsidiaries | $ | 9,968 | $ | 6,700 | $ | 14,714 | |||||||
Gain on sale of retail business | 10,000 | 64,971 | — | ||||||||||
Net investment income | 4 | 5 | — | ||||||||||
Total revenues | 19,972 | 71,676 | 14,714 | ||||||||||
Expenses | |||||||||||||
Operating expenses | 493 | (57 | ) | 352 | |||||||||
Loss on extinguishment of debt | — | 4,193 | — | ||||||||||
Interest expense | 11,156 | 19,115 | 17,616 | ||||||||||
Goodwill and other intangible assets impairment | — | — | 1,398 | ||||||||||
Total expenses | 11,649 | 23,251 | 19,366 | ||||||||||
Income (loss) before income taxes and equity interest in subsidiaries | 8,323 | 48,425 | (4,652 | ) | |||||||||
Income tax expense (benefit) | (1,559 | ) | (14,587 | ) | 2,447 | ||||||||
Equity interest in undistributed loss of subsidiaries | (42,089 | ) | (32,294 | ) | (44,814 | ) | |||||||
Net income (loss) | $ | (32,207 | ) | $ | 30,718 | $ | (51,913 | ) | |||||
Condensed Statements of Cash Flows | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Net cash used in operating activities | $ | (29,128 | ) | $ | (24,423 | ) | $ | (16,683 | ) | ||||
Cash flows from investing activities | |||||||||||||
Dividends received from subsidiaries | 9,968 | 6,700 | 14,714 | ||||||||||
Proceeds from sale of retail business, net | 25,000 | 84,270 | — | ||||||||||
Net cash provided by investing activities | 34,968 | 90,970 | 14,714 | ||||||||||
Cash flows from financing activities | |||||||||||||
Borrowings under senior secured credit facility effective January 2007 | — | 12,500 | 5,500 | ||||||||||
Borrowings under credit facilities effective September 2013 | — | 48,000 | — | ||||||||||
Principal payments on senior secured credit facility effective September 2013 | (6,500 | ) | (5,000 | ) | — | ||||||||
Principal payments on senior secured credit facility effective January 2007 | — | (120,192 | ) | (3,530 | ) | ||||||||
Proceeds from stock options exercised | 207 | — | — | ||||||||||
Debt issuance costs paid | (532 | ) | (860 | ) | — | ||||||||
Net cash provided by (used in) financing activities | (6,825 | ) | (65,552 | ) | 1,970 | ||||||||
Net increase (decrease) in cash and cash equivalents | (985 | ) | 995 | 1 | |||||||||
Cash and cash equivalents at beginning of year | 1,012 | 17 | 16 | ||||||||||
Cash and cash equivalents at end of year | $ | 27 | $ | 1,012 | $ | 17 | |||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |
Dec. 31, 2014 | ||
Accounting Policies [Abstract] | ||
Basis of Presentation | Basis of Presentation • The consolidated financial statements include the accounts of Affirmative Insurance Holdings, Inc. and its subsidiaries (together the Company), and have been prepared in accordance with U.S. generally accepted accounting principles (GAAP). All material intercompany transactions and balances have been eliminated in consolidation. | |
Certain prior year amounts have been reclassified to conform to the current presentation. | ||
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 the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. These estimates and assumptions are particularly important in determining reserves for losses and loss adjustment expenses, deferred policy acquisition costs, reinsurance receivables, valuation of investments, other intangible assets, and deferred income taxes. | |
Cash and Cash Equivalents | Cash and Cash Equivalents • Cash and cash equivalents are highly liquid investments with an original maturity of ninety days or less and include principally money market funds, repurchase agreements, and other bank deposits. Unless the right-of-setoff requirements have been met, bank overdrafts or negative book cash balances, if material, are recorded in other liabilities in the consolidated balance sheet. As of December 31, 2014 and 2013, $1.1 million and $1.6 million negative book cash balance was reflected in other liabilities in the consolidated balance sheets, respectively. | |
Fiduciary and Restricted Cash | Fiduciary and Restricted Cash • Fiduciary and restricted cash consists of non-operating certificates of deposit required by state regulations and/or under various agreements with third parties. | |
Investments | Investments • Investment securities consist of debt securities, and are recorded at fair value on the consolidated balance sheet. These investments are classified as available-for-sale with unrealized gains and losses recorded in accumulated other comprehensive income (loss), a separate component of stockholders’ deficit. No income tax effect of unrealized gains and losses is reflected in other comprehensive income (loss) due to the Company carrying a full deferred tax valuation allowance. The Investment Committee periodically reviews investment portfolio results and evaluates strategies to maximize yields, to match maturity durations with anticipated needs, and to maintain compliance with investment guidelines. | |
Fair value is based on quoted prices in active markets or third-party valuation sources when observable market prices are not available. Gains and losses realized on the disposition of investment securities are determined on the specific-identification basis and credited or charged to income. Premium and discount on investment securities are amortized and accreted using the interest method and charged or credited to investment income. | ||
Other invested assets is comprised of an investment in a hedge fund, which primarily invests in mortgage-backed securities with the strategy of seeking attractive yields on commercial and residential mortgage-backed securities. The Company elected the fair value option for its investment in the hedge fund and measures the fair value of this investment using the net asset value of the fund as reported by the fund manager. The financial statements of the hedge fund are subject to annual audits evaluating the net asset positions of the underlying investments. The fair value is included in the Level 3 fair value hierarchy. The Company records changes in the value of its other invested assets as a component of net investment income. | ||
Investments are considered to be impaired when a decline in fair value is judged to be other-than-temporary. On a quarterly basis, the Company considers available quantitative and qualitative evidence in evaluating potential impairment of its investments. If the cost of an investment exceeds its fair value, the Company evaluates, among other factors, general market conditions, the duration and extent to which the fair value is less than cost. If the fair value of a debt security is less than its amortized cost basis, an other-than-temporary impairment may be triggered in circumstances where (1) an entity has an intent to sell the security, (2) it is more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis, or (3) the entity does not expect to recover the entire amortized cost basis of the security (that is, a credit loss exists). Other-than-temporary impairments are separated into amounts representing credit losses which are recognized in earnings and amounts related to all other factors which are recognized in other comprehensive income (loss). The Company also considers potential adverse conditions related to the financial health of the issuer based on rating agency actions. | ||
Amounts Due from/to Reinsurers | Amounts Due from/to Reinsurers • The Company collects premiums from insureds and after deducting its authorized commissions, the Company remits these premiums to the appropriate reinsurance companies. The Company’s obligation to remit these premiums is recorded as amounts due reinsurers in its consolidated balance sheet. The Company records the amounts it expects to receive from reinsurers for paid and unpaid losses as an asset on its consolidated balance sheet. | |
Deferred Policy Acquisition Costs, net of ceding commission | Deferred Policy Acquisition Costs, net of ceding commission • Deferred policy acquisition costs represent the deferral of expenses that the Company incurs in the successful acquisition of new business or renewal of existing insurance policies. Policy acquisition costs, consisting of primarily commissions and premium taxes, net of ceding commission income, are deferred and charged against income ratably over the terms of the related policies. The Company regularly reviews the categories of acquisition costs that are deferred and assesses the recoverability of this asset. A premium deficiency, and a corresponding charge to income, is recognized if the sum of the expected losses and loss adjustment expenses, unamortized acquisition costs, and maintenance costs exceeds related unearned premiums and anticipated investment income. Amounts received as ceding commissions on reinsurance contracts are recorded as reductions of deferred acquisition costs and are recognized into income ratably as the related ceded premium is earned. Amortization of deferred policy acquisition costs is recorded in selling, general and administrative expenses in the consolidated statement of operations. | |
Property and Equipment, Net | Property and Equipment, Net • Property and equipment is stated at cost, less accumulated depreciation. Depreciation is recognized using the straight-line method over the estimated useful lives of the Company’s assets, typically ranging from three to eight years. Leasehold improvements are depreciated over the shorter of the estimated useful lives of the assets or the remainder of the lease term. | |
Other Intangible Assets, Net | Other Intangible Assets, Net • Other intangible assets with indefinite useful lives are tested for impairment annually as of September 30 or more frequently if events or changes in circumstances indicate that the assets might be impaired. | |
Identifiable intangible assets consist of state insurance company licenses. The Company reviews such intangibles for impairment whenever an impairment indicator exists. Management continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets, including intangible assets, may not be recoverable. When such events or changes in circumstances occur, management assesses recoverability by determining whether the carrying value of such assets will be recovered through the undiscounted expected future cash flows. If the future undiscounted cash flows are less than the carrying amount of these assets, an impairment loss is recognized based on the excess of the carrying amount over the fair value of the assets. | ||
Variable Interest Entities | Variable Interest Entities • Affirmative Insurance Holdings Statutory Trust I (“Trust I”), is an unconsolidated trust subsidiary established for the sole purpose of issuing $30.0 million trust preferred securities in 2004. Trust I used the proceeds from the sale of these securities and the Company’s initial capital contribution to purchase $30.9 million of subordinated debt securities from the Company. The debt securities are the sole assets of Trust I, and the payments under the debt securities are the sole revenues of Trust I. The Company’s initial capital contribution consisted of the purchase of 928,000 common securities issued by Trust I for $928,000, which represented 3% of the total dollar amount of subordinated debentures issued. | |
Affirmative Insurance Holdings Statutory Trust II (“Trust II”), is an unconsolidated trust subsidiary established for the sole purpose of issuing $25.0 million trust preferred securities in 2005. Trust II used the proceeds from the sale of these securities and the Company’s initial capital contribution to purchase $25.8 million of subordinated debt securities from the Company. The debt securities are the sole assets of Trust II, and the payments under the debt securities are the sole revenues of Trust II. The Company’s initial capital contribution consisted of the purchase of 774,000 common securities issued by Trust II for $774,000, which represented 3% of the total dollar amount of subordinated debentures issued. | ||
The investment in the common securities totaling $1.7 million is reflected in other assets in the Company’s consolidated balance sheets. The subordinated debentures totaling $56.7 million are included in debt in the Company’s consolidated balance sheets. | ||
Management evaluates on an ongoing basis the Company’s investments in Trust I and II (collectively the “Trusts”) and continue to conclude that, while the Trusts continue to be variable interest entities (“VIE’s”), the Company is not the primary beneficiary. Therefore, the Trusts are not included in the Company’s consolidated financial statements. | ||
Reserves for Losses and Loss Adjustment Expenses | Reserves for Losses and Loss Adjustment Expenses • The Company maintains reserves for the estimated ultimate liability for unpaid losses and loss adjustment expenses related to incurred claims and estimates of unreported claims. The estimation of the ultimate liability for unpaid losses and loss adjustment expenses is based on projections developed by the Company’s actuaries using analytical methodologies commonly used in the property-casualty insurance industry. Liabilities for unpaid claims and for expenses of investigation and adjustment of unpaid claims are based on: (1) the accumulation of estimates of individual claims for losses reported prior to the close of the accounting period; (2) estimates received from ceding companies, reinsurers and insurance pools and associations; (3) estimates of unreported losses based on past experience; (4) estimates based on past experience of expenses for investigating and adjusting claims; and (5) estimates of subrogation and salvage collections. Management periodically adjusts the losses and loss adjustment expense reserves for changes in product mix, underwriting standards, loss cost trends and other factors. Losses and loss adjustment expense reserves may also be impacted by factors such as the rate of inflation, claims settlement patterns, litigation and legislative and regulatory activities. Unpaid losses and loss adjustment expenses have not been reduced for amounts recoverable from reinsurers. Changes in estimates of liabilities for unpaid losses and loss adjustment expenses are reflected in the consolidated statement of operations in the period in which determined. Ultimately, the actual losses and loss adjustment expenses may differ materially from recorded estimates. | |
Treasury Stock | Treasury Stock • Treasury stock purchases are accounted for using the cost method, whereby the entire cost of the acquired stock is recorded as treasury stock. When reissued, shares of treasury stock will be removed from the treasury stock account at the average purchase price per share of the aggregate treasury shares held. | |
Revenue Recognition | Revenue Recognition • Premium income — Premiums, net of premiums ceded, is earned over the life of the underlying policies. Unearned premiums represent that portion of premiums written that are applicable to the unexpired terms of policies in force. Premiums receivable are recorded net of an estimated allowance for uncollectible amounts. | |
Commission income — Represents revenues from the retail agency business prior to being sold on September 30, 2013. Commission income and related policy fees, written for third-party insurance companies, are recognized, net of an allowance for estimated policy cancellations, at the date the customer is initially billed or as of the effective date of the insurance policy, whichever is later. Commissions on premium endorsements are recognized when premiums are processed. The allowance for estimated third-party cancellations is periodically evaluated and adjusted as necessary. | ||
Profit-sharing commissions, which enable the Company to collect commission income and fees in excess of provisional commissions, are recorded when it is probable that estimates of loss ratios will be below the levels stated in the Company’s agency contracts. Provisional commissions may be reduced when it is probable that estimates of loss ratios will be above the levels stated in the related agency contract. | ||
Fee Income — Policy origination fees and installment fees compensate the Company for the costs of policy administration and providing installment payment plans. Policy origination fees are recognized over the underlying policy terms. Other fees are recognized when services are provided. | ||
Agency Fees — Represents revenues from the retail agency business prior to being sold on September 30, 2013. These fees compensated the Company for the costs of policy cancellation, policy rewrite and reinstatement and were recognized when the services were provided. Premium finance and origination fees were recognized over the term of the finance contracts. | ||
Managing general agent revenue — Revenues earned for business produced for a Texas county mutual insurance agency beginning January 1, 2013. The Company receives compensation for distribution and underwriting services and providing claims handling on the business. Revenue for distribution and underwriting services are recognized, net of an allowance for estimated policy cancellations, at the date the customer is initially billed or as of the effective date of the insurance policy, whichever is later. Claims handling revenue is recognized as the services are provided. | ||
Accounting and Reporting for Reinsurance | Accounting and Reporting for Reinsurance • Income and expense on reinsurance contracts are recognized principally over the term of the reinsurance contracts or until the reinsurers maximum liability is exhausted, whichever comes first. Reinsurance contracts do not relieve the Company from its obligations to policyholders. The Company continually monitors reinsurers to minimize the exposure to significant losses from reinsurer insolvencies. The Company only cedes risks to reinsurers whom it believes to be financially sound. | |
Stock-Based Compensation | Stock-Based Compensation • Compensation cost is measured based on the grant-date fair value of an award utilizing the assumptions discussed in Note 17. Compensation cost is recognized for financial reporting purposes on a straight-line basis over the period in which the employee is required to provide service in exchange for the award. | |
Income Taxes | Income Taxes • The Company accounts for income taxes under the asset and liability method. Under this method, deferred income taxes are recognized for temporary differences between the financial statement and tax return bases of assets and liabilities. Recorded amounts are adjusted to reflect changes in income tax rates for the period in which the change is enacted. Any resulting future tax benefits are recognized to the extent that realization of such benefits is more likely than not, and a valuation allowance is established for any portion of a deferred tax asset that management believes will not be realized. While the Company typically does not incur significant interest or penalties on income tax liabilities, the Company’s policy is to classify such amounts as income tax expense on the consolidated statement of operations. | |
Net Income (Loss) Per Common Share | Net Income (Loss) Per Common Share • Basic net income (loss) per common share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the year. Diluted net income (loss) per share is computed by giving effect to the potential dilution that could occur if securities or other contracts to issue common shares were exercised and converted into common shares during the year. | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments • The Company determines fair value for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk. | |
Segment Reporting | Segment Reporting • The Company’s operations consist of designing, underwriting and servicing non-standard personal automobile insurance policies. The Company is a holding company, with no operating revenues and only interest expense on corporate debt. The Company’s subsidiaries consist of several types of legal entities: insurance companies, underwriting agencies and a service company from which all employees are paid. Insurance subsidiaries possess the certificates of authority and capital necessary to transact insurance business and issue policies, but they rely on both affiliated and an unaffiliated underwriting agency to design, distribute and service those policies. Underwriting agencies primarily design, distribute and service policies issued or reinsured by the Company’s insurance subsidiaries and that are distributed by independent agents. Given the homogeneity of the Company’s products, the regulatory environments in which the Company operates, the nature of the Company’s customers and distribution channels, Company management monitors, controls and manages the business as an integrated entity offering non-standard personal automobile insurance products through multiple distribution channels. | |
Statutory Accounting Practices | Statutory Accounting Practices • The Company’s insurance subsidiaries are required to report results of operations and financial position to insurance regulatory authorities based upon statutory accounting principles (SAP). The more significant differences between SAP and GAAP are as follows: | |
· | Under SAP, all sales and other policy acquisition costs are expensed as they are incurred rather than capitalized and amortized over the expected life of the policy as required by GAAP. The immediate charge off of sales and acquisition expenses and other conservative valuations under SAP generally cause a lag between the sale of a policy and the emergence of reported earnings. Since this lag can reduce income from operations on a SAP basis, it can have the effect of reducing the amount of funds available for dividends from insurance companies. | |
· | Under SAP, certain assets, including deferred taxes, are designated as “non-admitted” and are charged directly to unassigned surplus, whereas under GAAP, such assets are included in the consolidated balance sheet net of an appropriate valuation allowance. | |
· | SAP requires available-for-sale investments generally be carried at amortized book value while GAAP requires available-for-sale investments be carried at fair value. | |
Accounting Standards Issued But Not Yet Effective | Recently Issued Accounting Standards • Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers issued in May 2014 supersedes the revenue recognition requirements in Topic 605, Revenue Recognition and most industry-specific guidance. Insurance contracts have been excluded from the scope of the guidance, which is effective for fiscal years beginning after December 15, 2016. The Company does not expect the adoption of this standard to have a material impact on the consolidated financial position, results of operations, or cash flows. | |
Accounting Standards Update (ASU) No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern issued in August 2014 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. Specifically, this ASU provides guidance to an organization’s management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations today in the financial statement footnotes. The amendments are effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early application is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. The Company does not expect the adoption of this standard to have a material impact on the consolidated financial position, results of operations, or cash flows. |
Sale_of_the_Retail_Business_Ta
Sale of the Retail Business (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Sale Of Retail Business [Abstract] | |||||
Component of Net Assets Sold | The net assets sold consisted of (in thousands): | ||||
September 30, | |||||
2013 | |||||
Assets | |||||
Cash and cash equivalents | $ | 2,529 | |||
Premium finance and commission receivable | 47,847 | ||||
Other intangible assets | 12,764 | ||||
Other assets | 3,709 | ||||
Total Assets | $ | 66,849 | |||
Liabilities | |||||
Due to third-party carriers | $ | 24,456 | |||
Other liabilities | 5,419 | ||||
Total Liabilities | 29,875 | ||||
Net Assets | $ | 36,974 | |||
AvailableforSale_Investment_Se1
Available-for-Sale Investment Securities (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Summary of Available-for-Sale Securities | The amortized cost, gross unrealized gains (losses), and estimated fair value of the Company’s available-for-sale securities at December 31, 2014 and 2013, were as follows (in thousands): | ||||||||||||||||||||||||
Amortized | Gross | Gross | Estimated Fair | ||||||||||||||||||||||
Cost | Unrealized | Unrealized | Value | ||||||||||||||||||||||
Gains | Losses | ||||||||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||||
U.S. Treasury and government agencies | $ | 8,311 | $ | 33 | $ | (30 | ) | $ | 8,314 | ||||||||||||||||
Mortgage-backed securities | 3,386 | 19 | (92 | ) | 3,313 | ||||||||||||||||||||
States and political subdivisions | 1,485 | 34 | — | 1,519 | |||||||||||||||||||||
Corporate debt securities | 17,340 | 90 | (58 | ) | 17,372 | ||||||||||||||||||||
Certificates of deposit | 2,760 | 8 | (1 | ) | 2,767 | ||||||||||||||||||||
Total | $ | 33,282 | $ | 184 | $ | (181 | ) | $ | 33,285 | ||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||
U.S. Treasury and government agencies | $ | 17,830 | $ | 55 | $ | (51 | ) | $ | 17,834 | ||||||||||||||||
Mortgage-backed securities | 4,023 | 4 | (47 | ) | 3,980 | ||||||||||||||||||||
States and political subdivisions | 3,265 | 68 | — | 3,333 | |||||||||||||||||||||
Corporate debt securities | 32,458 | 135 | (310 | ) | 32,283 | ||||||||||||||||||||
Certificates of deposit | 4,860 | 32 | (1 | ) | 4,891 | ||||||||||||||||||||
Total | $ | 62,436 | $ | 294 | $ | (409 | ) | $ | 62,321 | ||||||||||||||||
Gross Realized Gains and Losses on Available-for-Sale Investment | Gross realized gains and losses on available-for-sale investments for the years ended December 31 were as follows (in thousands): | ||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Gross gains | $ | 124 | $ | 58 | $ | 1,025 | |||||||||||||||||||
Gross losses | (78 | ) | (9 | ) | (137 | ) | |||||||||||||||||||
Total | $ | 46 | $ | 49 | $ | 888 | |||||||||||||||||||
Summary of Available-for-sale Securities in Unrealized Loss Position | The following table summarizes the Company’s available-for-sale securities in an unrealized loss position at December 31, 2014 and 2013, the estimated fair value and amount of gross unrealized losses, aggregated by investment category and length of time those securities have been continuously in an unrealized loss position (in thousands): | ||||||||||||||||||||||||
December 31, 2014 | |||||||||||||||||||||||||
Less Than Twelve | Twelve Months or | Total | |||||||||||||||||||||||
Months | Greater | ||||||||||||||||||||||||
Estimated | Gross | Estimated Fair | Gross | Estimated | Gross | ||||||||||||||||||||
Fair | Unrealized | Value | Unrealized | Fair | Unrealized | ||||||||||||||||||||
Value | Losses | Losses | Value | Losses | |||||||||||||||||||||
U.S. Treasury and government agencies | $ | 2,217 | $ | (6 | ) | $ | 1,984 | $ | (24 | ) | $ | 4,201 | $ | (30 | ) | ||||||||||
Mortgage-backed securities | 1,388 | (22 | ) | 1,273 | (70 | ) | 2,661 | (92 | ) | ||||||||||||||||
Corporate debt securities | 5,894 | (36 | ) | 3,235 | (22 | ) | 9,129 | (58 | ) | ||||||||||||||||
Certificates of deposit | 999 | (1 | ) | — | — | 999 | (1 | ) | |||||||||||||||||
Total | $ | 10,498 | $ | (65 | ) | $ | 6,492 | $ | (116 | ) | $ | 16,990 | $ | (181 | ) | ||||||||||
December 31, 2013 | |||||||||||||||||||||||||
Less Than Twelve | Twelve Months or | Total | |||||||||||||||||||||||
Months | Greater | ||||||||||||||||||||||||
Estimated | Gross | Estimated Fair | Gross | Estimated | Gross | ||||||||||||||||||||
Fair | Unrealized | Value | Unrealized | Fair | Unrealized | ||||||||||||||||||||
Value | Losses | Losses | Value | Losses | |||||||||||||||||||||
U.S. Treasury and government agencies | $ | 13,220 | $ | (51 | ) | $ | — | $ | — | $ | 13,220 | $ | (51 | ) | |||||||||||
Mortgage-backed securities | 3,403 | (47 | ) | — | — | 3,403 | (47 | ) | |||||||||||||||||
Corporate debt securities | 23,410 | (310 | ) | — | — | 23,410 | (310 | ) | |||||||||||||||||
Certificates of deposit | 849 | (1 | ) | — | — | 849 | (1 | ) | |||||||||||||||||
Total | $ | 40,882 | $ | (409 | ) | $ | — | $ | — | $ | 40,882 | $ | (409 | ) | |||||||||||
Major Categories of Net Investment Income | Major categories of net investment income for the years ended December 31 were as follows (in thousands): | ||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Available-for-sale investment securities | $ | 803 | $ | 769 | $ | 1,520 | |||||||||||||||||||
Rental income from investment in real property | 2,420 | 2,390 | 2,410 | ||||||||||||||||||||||
Income from investment in hedge fund | 416 | 695 | 492 | ||||||||||||||||||||||
Cash and cash equivalents | 635 | 155 | 3 | ||||||||||||||||||||||
4,274 | 4,009 | 4,425 | |||||||||||||||||||||||
Less: Investment expense | (1,265 | ) | (1,288 | ) | (1,320 | ) | |||||||||||||||||||
Net investment income | $ | 3,009 | $ | 2,721 | $ | 3,105 | |||||||||||||||||||
Fixed income securities | |||||||||||||||||||||||||
Summary of Available-for-Sale Securities | The Company’s amortized cost and estimated fair values of fixed-income securities at December 31, 2014 by contractual maturity were as follows (in thousands): | ||||||||||||||||||||||||
Amortized | Estimated Fair | ||||||||||||||||||||||||
Cost | Value | ||||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||||
Due in one year or less | $ | 7,672 | $ | 7,716 | |||||||||||||||||||||
Due after one year through five years | 22,224 | 22,256 | |||||||||||||||||||||||
Mortgage-backed securities | 3,386 | 3,313 | |||||||||||||||||||||||
Total | $ | 33,282 | $ | 33,285 | |||||||||||||||||||||
Reinsurance_Tables
Reinsurance (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Reinsurance Disclosures [Abstract] | |||||||||||||||||||||||||
Effect of Reinsurance on Premiums Written and Earned | The effect of reinsurance on premiums written and earned was as follows (in thousands): | ||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Written | Earned | Written | Earned | Written | Earned | ||||||||||||||||||||
Direct | $ | 331,179 | $ | 328,752 | $ | 304,007 | $ | 284,479 | $ | 198,359 | $ | 185,546 | |||||||||||||
Reinsurance assumed (returned) | — | — | (11,812 | ) | — | 38,663 | 36,718 | ||||||||||||||||||
Reinsurance ceded | (229,423 | ) | (231,716 | ) | (163,549 | ) | (118,796 | ) | (66,482 | ) | (78,528 | ) | |||||||||||||
Total | $ | 101,756 | $ | 97,036 | $ | 128,646 | $ | 165,683 | $ | 170,540 | $ | 143,736 | |||||||||||||
Selling, General and Administrative Expenses | Ceding commissions recognized, reflected as a reduction of selling, general and administrative expenses, were as follows (in thousands): | ||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Selling, general and administrative expenses | $ | 50,765 | $ | 29,716 | $ | 26,676 | |||||||||||||||||||
Amount of Loss Reserves and Unearned Premium | The amount of loss reserves and unearned premium the Company would remain liable for in the event its reinsurers are unable to meet their obligations were as follows (in thousands): | ||||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
Losses and loss adjustment expense reserves | $ | 86,421 | $ | 72,366 | |||||||||||||||||||||
Unearned premium reserve | 67,089 | 69,381 | |||||||||||||||||||||||
Total | $ | 153,510 | $ | 141,747 | |||||||||||||||||||||
Ceded Incurred Losses and Loss Adjustment expenses | The following table summarizes the ceded incurred losses and loss adjustment expenses (consisting of ceded paid losses and loss adjustment expenses and change in reserves for loss and loss adjustment expenses ceded) to various reinsurers (in thousands): | ||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Paid losses and loss adjustment expenses ceded | $ | 145,436 | $ | 74,903 | $ | 61,186 | |||||||||||||||||||
Change in reserves for loss and loss adjustment expenses ceded | 14,609 | 5,200 | (11,344 | ) | |||||||||||||||||||||
Incurred losses and loss adjustment expenses ceded | $ | 160,045 | $ | 80,103 | $ | 49,842 | |||||||||||||||||||
Amount of Receivables Due from Reinsurers | The table below presents the total amount of receivables due from reinsurers as of December 31, 2014 and 2013 (in thousands): | ||||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
Quota-share reinsurers for agreements effective June 30, 2014 | $ | 130,086 | $ | — | |||||||||||||||||||||
Michigan Catastrophic Claims Association | 27,610 | 34,878 | |||||||||||||||||||||||
Quota-share reinsurers for agreements effective December 31, 2013 | 14,096 | 22,218 | |||||||||||||||||||||||
Vesta Insurance Group | 9,270 | 13,435 | |||||||||||||||||||||||
Quota-share reinsurer for agreements effective January 1, 2011 and other | 3,188 | (4 | ) | ||||||||||||||||||||||
Excess of loss reinsurers | 839 | 3,413 | |||||||||||||||||||||||
Quota-share reinsurer for agreements effective September 1, 2011 and March 31, 2013 | (2,285 | ) | 91,879 | ||||||||||||||||||||||
Total reinsurance receivable | $ | 182,804 | $ | 165,819 | |||||||||||||||||||||
Deferred_Policy_Acquisition_Co1
Deferred Policy Acquisition Costs (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Insurance [Abstract] | |||||||||||||
Components of Deferred Policy Acquisition Costs and Related Amortization | The components of deferred policy acquisition costs and the related amortization were as follows (in thousands): | ||||||||||||
Gross | Ceded | Net | |||||||||||
Asset (Liability) | |||||||||||||
Ending balance at December 31, 2012 | $ | 7,111 | $ | (7,013 | ) | $ | 98 | ||||||
Additions | 38,156 | (47,705 | ) | (9,549 | ) | ||||||||
Amortization | (32,680 | ) | 34,587 | 1,907 | |||||||||
Ending balance at December 31, 2013 | 12,587 | (20,131 | ) | (7,544 | ) | ||||||||
Additions | 58,940 | (63,215 | ) | (4,275 | ) | ||||||||
Amortization | (56,959 | ) | 64,564 | 7,605 | |||||||||
Ending balance at December 31, 2014 | $ | 14,568 | $ | (18,782 | ) | $ | (4,214 | ) | |||||
Property_and_Equipment_Net_Tab
Property and Equipment, Net (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property Plant And Equipment [Abstract] | |||||||||
Property and Equipment | Property and equipment, net, consisted of the following as of December 31, 2014 and 2013 (in thousands): | ||||||||
2014 | 2013 | ||||||||
Computer software | $ | 50,565 | $ | 50,448 | |||||
Data processing equipment | 9,250 | 9,056 | |||||||
Leasehold improvements | 3,830 | 3,805 | |||||||
Furniture and office equipment | 3,664 | 3,637 | |||||||
Automobiles | 207 | 254 | |||||||
67,516 | 67,200 | ||||||||
Accumulated depreciation | (59,127 | ) | (53,222 | ) | |||||
Property and equipment, net | $ | 8,389 | $ | 13,978 | |||||
Goodwill_and_Other_Intangible_1
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||
Property Plant And Equipment [Abstract] | |||||||||||||||||||||||||||||||||
Non-amortizable intangible assets | Other intangible assets at December 31, 2014 and 2013 were as follows (in thousands): | ||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||
Cost | Impairment | Accumulated | Net | Cost | Impairment | Accumulated | Net | ||||||||||||||||||||||||||
Amortization | Amortization | ||||||||||||||||||||||||||||||||
Amortizable intangible assets: | |||||||||||||||||||||||||||||||||
Agency and customer relationships | $ | 8,054 | $ | (1,689 | ) | $ | (6,365 | ) | $ | — | $ | 8,054 | $ | (1,689 | ) | $ | (6,365 | ) | $ | — | |||||||||||||
Non-amortizable intangible assets: | |||||||||||||||||||||||||||||||||
Trade names and licenses | 3,144 | (244 | ) | (1,400 | ) | 1,500 | 3,144 | (244 | ) | (1,400 | ) | 1,500 | |||||||||||||||||||||
Total | $ | 11,198 | $ | (1,933 | ) | $ | (7,765 | ) | $ | 1,500 | $ | 11,198 | $ | (1,933 | ) | $ | (7,765 | ) | $ | 1,500 | |||||||||||||
Reserve_for_Losses_and_Loss_Ad1
Reserve for Losses and Loss Adjustment Expenses (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Insurance [Abstract] | |||||||||||||
Reconciliation of Unpaid Losses and Loss Adjustment Expense | The following table provides a reconciliation of the beginning and ending reserves for unpaid losses and loss adjustment expenses for the periods indicated (in thousands): | ||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Gross balance at beginning of year | $ | 133,589 | $ | 138,854 | $ | 183,836 | |||||||
Less: Reinsurance recoverable | 72,366 | 67,166 | 78,510 | ||||||||||
Net balance at beginning of year | 61,223 | 71,688 | 105,326 | ||||||||||
Incurred related to: | |||||||||||||
Current year | 94,470 | 135,556 | 106,379 | ||||||||||
Prior years | 21,212 | 12,262 | 5,479 | ||||||||||
Paid related to: | |||||||||||||
Current year | 63,780 | 88,727 | 66,916 | ||||||||||
Prior years | 66,794 | 69,556 | 78,580 | ||||||||||
Net balance at the end of year | 46,331 | 61,223 | 71,688 | ||||||||||
Reinsurance recoverable | 86,421 | 72,366 | 67,166 | ||||||||||
Gross balance at the end of year | $ | 132,752 | $ | 133,589 | $ | 138,854 | |||||||
Debt_Tables
Debt (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Summary of Long-Term Debt Instruments and Balances Outstanding | The Company’s long-term debt instruments and balances outstanding at December 31, 2014 and 2013 were as follows (in thousands): | ||||||||
2014 | 2013 | ||||||||
Notes payable due 2035 | $ | 30,928 | $ | 30,928 | |||||
Notes payable due 2035 | 25,774 | 25,774 | |||||||
Notes payable due 2035 | 20,113 | 20,126 | |||||||
Total notes payable | 76,815 | 76,828 | |||||||
Senior secured credit facility effective September 2013, net of discount | 28,135 | 33,523 | |||||||
Subordinated secured credit facility | 16,566 | 13,650 | |||||||
Mortgage payable | 1,825 | 3,562 | |||||||
Total long-term debt | $ | 123,341 | $ | 127,563 | |||||
Summarized Credit Facilities Scheduled Payments | The following table summarizes the Company’s credit facilities scheduled principal payments (in thousands): | ||||||||
2015 | $ | 15,000 | |||||||
2016 | 13,500 | ||||||||
2017 | 16,566 | ||||||||
Total | $ | 45,066 | |||||||
Capital_Lease_Obligation_Table
Capital Lease Obligation (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Leases [Abstract] | |||||||||
Property Under Capital Lease | Property under capital lease consisted of the following as of December 31, 2014 and 2013 (in thousands): | ||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Computer software, software licenses and hardware | $ | 34,212 | $ | 34,212 | |||||
Accumulated depreciation | (28,263 | ) | (23,971 | ) | |||||
Computer software, software licenses and hardware, net | $ | 5,949 | $ | 10,241 | |||||
Future Lease Payments | Estimated future lease payments for the year ending December 31 (in thousands): | ||||||||
2015 | $ | 3,407 | |||||||
Less: Amount representing interest | (63 | ) | |||||||
Present value of future lease payments | $ | 3,344 | |||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Provision for Income Taxes | The provision for income taxes for the years ended December 31 consisted of the following (in thousands): | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
Current tax expense (benefit) | $ | (1,702 | ) | $ | 4,067 | $ | 14 | ||||||
Deferred tax expense (benefit) | - | (3,178 | ) | 250 | |||||||||
Net income tax expense (benefit) | $ | (1,702 | ) | $ | 889 | $ | 264 | ||||||
Summary of Effective Tax Rate Differed from Statutory Rate | The Company’s effective tax rate differed from the statutory rate of 35% for the years ended December 31 as follows (in thousands): | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
Income (loss) before income taxes | $ | (33,909 | ) | $ | 31,607 | $ | (51,649 | ) | |||||
Tax provision computed at the federal statutory income tax rate | (11,868 | ) | 11,063 | (18,077 | ) | ||||||||
Increases (reductions) in tax resulting from: | |||||||||||||
Tax-exempt interest | (13 | ) | (17 | ) | (67 | ) | |||||||
State income taxes | (1,277 | ) | 3,115 | 140 | |||||||||
IRS audit settlement | — | — | (118 | ) | |||||||||
Goodwill impairment | — | — | 5,623 | ||||||||||
Valuation allowance | 11,420 | (13,303 | ) | 12,766 | |||||||||
Other | 36 | 31 | (3 | ) | |||||||||
Income tax expense (benefit) | $ | (1,702 | ) | $ | 889 | $ | 264 | ||||||
Effective tax rate | 5 | % | 2.8 | % | 0.5 | % | |||||||
Portions of Deferred Tax Assets and Deferred Tax Liabilities | Tax effects of temporary differences that give rise to significant portions of the Company’s deferred tax assets and deferred tax liabilities at December 31, 2014 and 2013 were as follows (in thousands): | ||||||||||||
2014 | 2013 | ||||||||||||
Deferred tax assets: | |||||||||||||
Unearned and advance premiums | $ | 1,115 | $ | 763 | |||||||||
Net operating loss carryforward | 80,041 | 68,318 | |||||||||||
Discounted unpaid losses | 704 | 1,085 | |||||||||||
Deferred revenue | 2,288 | 2,367 | |||||||||||
Allowance for doubtful accounts | 184 | 2,709 | |||||||||||
Goodwill | 3,066 | 3,655 | |||||||||||
Rent deferral | 712 | 752 | |||||||||||
Deferred acquisition costs, net asset | 1,475 | 2,640 | |||||||||||
Depreciation on fixed assets | 709 | 325 | |||||||||||
Alternative minimum tax and work opportunity credits | 696 | 1,276 | |||||||||||
Paid in kind interest | 1,248 | — | |||||||||||
Unrealized losses | — | 40 | |||||||||||
Intangibles | 47 | 68 | |||||||||||
Stock options | 1,585 | 1,580 | |||||||||||
State deferred tax assets | 3,146 | 2,598 | |||||||||||
Other deferred tax assets | 1,455 | 1,782 | |||||||||||
Total deferred tax assets | 98,471 | 89,958 | |||||||||||
Deferred tax liabilities: | |||||||||||||
Unrealized gains | 1 | — | |||||||||||
Debt extinguishment | 128 | 517 | |||||||||||
Gain on sale of retail business | — | 3,600 | |||||||||||
Other deferred tax liabilities | 1,158 | 1,013 | |||||||||||
Total deferred tax liabilities | 1,287 | 5,130 | |||||||||||
Deferred tax assets, net, before valuation allowance | 97,184 | 84,828 | |||||||||||
Valuation allowance | 97,184 | 84,828 | |||||||||||
Deferred tax liabilities, net | $ | — | $ | — | |||||||||
Changes in Valuation Allowance | The change in valuation allowance attributable to continuing operations and other comprehensive income is presented for the years ended December 31 as follows (in thousands): | ||||||||||||
2014 | 2013 | ||||||||||||
Continuing operations | $ | 11,420 | $ | (13,303 | ) | ||||||||
Changes in other comprehensive income | (41 | ) | 230 | ||||||||||
$ | 11,379 | $ | (13,073 | ) | |||||||||
Expiration of Net Operating Loss Carryforwards | As of December 31, 2014, the Company has available for income tax purposes federal net operating loss carryforwards (NOL’s), which may be used to offset future taxable income. The Company’s NOL’s expire as follows (in thousands): | ||||||||||||
2027 | $ | 11,189 | |||||||||||
2028 | 4,886 | ||||||||||||
2029 | 26,569 | ||||||||||||
2030 | 82,417 | ||||||||||||
2031 | 39,122 | ||||||||||||
2032 | 31,217 | ||||||||||||
2033 | - | ||||||||||||
2034 | 33,289 | ||||||||||||
$ | 228,689 | ||||||||||||
Commitments_Tables
Commitments (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments And Contingencies Disclosure [Abstract] | |||||
Summary of Minimum Commitments | The following table summarizes the Company’s minimum commitments at December 31, 2014 (in thousands): | ||||
2015 | $ | 1,371 | |||
2016 | 1,848 | ||||
2017 | 1,807 | ||||
2018 | 1,790 | ||||
2019 | 1,764 | ||||
Thereafter | 4,542 | ||||
Total estimated future lease payment | 13,122 | ||||
Less: Sublease rental arrangements | (2,174 | ) | |||
Total | $ | 10,948 | |||
Net_Income_Loss_per_Common_Sha1
Net Income (Loss) per Common Share (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Earnings Per Share [Abstract] | |||||||||||||
Summary of Reconciliation of Numerators and Denominators for Basic and Diluted Earnings per Share | The following table sets forth the reconciliation of numerators and denominators for the basic and diluted earnings per share computation for each of the years ended December 31, 2014, 2013 and 2012 (in thousands, except per share amounts): | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
Numerator: | |||||||||||||
Net income (loss) | $ | (32,207 | ) | $ | 30,718 | $ | (51,913 | ) | |||||
Denominator: | |||||||||||||
Weighted average basic shares | |||||||||||||
Weighted average common shares outstanding | 15,525 | 15,408 | 15,408 | ||||||||||
Weighted average diluted shares | |||||||||||||
Weighted average diluted shares outstanding | 15,525 | 15,622 | 15,408 | ||||||||||
Basic income (loss) per common share | $ | (2.07 | ) | $ | 1.99 | $ | (3.37 | ) | |||||
Diluted income (loss) per common share | $ | (2.07 | ) | $ | 1.97 | $ | (3.37 | ) | |||||
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||||||||||||||||||||||||
Assumptions Used in Estimating Fair Value of Employee Stock Options | The dividend yield was based on expected dividends at the time of grant. | ||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Weighted-average grant date fair value | $ | 1.76 | $ | 0.69 | |||||||||||||||||||||
Weighted-average risk-free interest rate | 1.71 | % | 1.15 | % | |||||||||||||||||||||
Expected term of option in years | 5 | 6 | |||||||||||||||||||||||
Weighted-average expected volatility | 43 | % | 43 | % | |||||||||||||||||||||
Dividend yield | — | — | |||||||||||||||||||||||
Summary of Stock Option Activity | A summary of stock option activity for each of the three years ended December 31 follows (shares in thousands): | ||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Shares | Weighted Average | Shares | Weighted Average | Shares | Weighted Average | ||||||||||||||||||||
Exercise Price | Exercise Price | Exercise Price | |||||||||||||||||||||||
Outstanding at beginning of year | 1,573 | $ | 4.75 | 2,407 | $ | 5.07 | 1,748 | $ | 6.82 | ||||||||||||||||
Granted | - | - | 250 | 1.76 | 750 | 0.69 | |||||||||||||||||||
Exercised | (275 | ) | 0.75 | - | - | - | - | ||||||||||||||||||
Forfeited | (35 | ) | 5.06 | (1,084 | ) | 4.77 | (91 | ) | 1.65 | ||||||||||||||||
Outstanding at end of year | 1,263 | 5.61 | 1,573 | 4.75 | 2,407 | 5.07 | |||||||||||||||||||
Stock Options Outstanding and Exercisable | Stock options outstanding and exercisable at December 31, 2014 were as follows (shares in thousands): | ||||||||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||||||||
Range of Exercise Prices | Number | Weighted Average | Weighted Average | Number | Weighted Average | ||||||||||||||||||||
Outstanding | Exercise Price | Years of | Exercisable | Exercise Price | |||||||||||||||||||||
Remaining | |||||||||||||||||||||||||
Contractual Life | |||||||||||||||||||||||||
$0.69 to $1.75 | 275 | $ | 0.69 | 7.15 | 183 | $ | 0.69 | ||||||||||||||||||
$1.76 to $10.37 | 675 | 1.76 | 7.39 | 675 | 1.76 | ||||||||||||||||||||
$10.38 to $15.00 | 47 | 11.42 | 2.54 | 47 | 11.42 | ||||||||||||||||||||
$15.01 to $22.00 | 206 | 17.77 | 2.18 | 206 | 17.77 | ||||||||||||||||||||
$22.01 to $30.00 | 60 | 25.28 | 2.06 | 60 | 25.28 | ||||||||||||||||||||
$0.69 to $30.00 | 1,263 | 5.61 | 6.05 | 1,171 | 6 | ||||||||||||||||||||
Disclosures_for_Items_Reclassi1
Disclosures for Items Reclassified Out of Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Equity [Abstract] | |||||||||
Components of Accumulated Other Comprehensive Income (Loss) | The following table sets forth the components of accumulated other comprehensive income (loss), including reclassification adjustments (in thousands): | ||||||||
Year | Year | ||||||||
Ended | Ended | ||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Beginning balance | $ | (1,654 | ) | $ | (998 | ) | |||
Other comprehensive income (loss) before reclassifications | 164 | (607 | ) | ||||||
Amounts reclassified from accumulated other comprehensive income (loss) | (46 | ) | (49 | ) | |||||
Net current period other comprehensive income (loss) | 118 | (656 | ) | ||||||
Ending balance | $ | (1,536 | ) | $ | (1,654 | ) | |||
Regulatory_Restrictions_Tables
Regulatory Restrictions (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Regulatory Restrictions [Abstract] | |||||
Schedule of Statutory Capital Comparison to Risk Based Capital | The following is a comparison of AIC’s total statutory capital to risk-based capital as at December 31, 2014 (in thousands): | ||||
Total reported statutory capital | $ | 24,265 | |||
Company action level | 37,432 | ||||
Regulatory action level | 28,074 | ||||
Authorized control level | 18,716 | ||||
Mandatory control level | 13,101 | ||||
Business_Concentrations_Tables
Business Concentrations (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Risks And Uncertainties [Abstract] | |||||||||||||
Gross Written Premiums Managed and Assumed By State | The following table displays the Company’s gross written premiums managed and assumed by state (in thousands): | ||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Louisiana | $ | 123,934 | $ | 119,828 | $ | 106,841 | |||||||
Texas | 102,766 | 93,573 | 54,009 | ||||||||||
California | 81,905 | 73,741 | 17,706 | ||||||||||
Alabama | 24,794 | 25,272 | 21,270 | ||||||||||
Illinois | 15,655 | 18,359 | 23,887 | ||||||||||
Indiana | 6,073 | 6,846 | 8,092 | ||||||||||
Missouri | 3,086 | 2,799 | 3,084 | ||||||||||
South Carolina | — | — | 2,127 | ||||||||||
Other | 44 | 49 | 6 | ||||||||||
Total written premium managed | 358,257 | 340,467 | 237,022 | ||||||||||
Less Texas written premium not underwritten | 27,078 | 48,272 | — | ||||||||||
Gross underwritten premiums | $ | 331,179 | $ | 292,195 | $ | 237,022 | |||||||
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||
Financial Assets Measured at Fair Value on Recurring Basis | The following table provides information as of December 31, 2014 about the Company’s financial assets measured at fair value on a recurring basis (in thousands): | ||||||||||||||||||||
Total | Quoted | Significant | Significant | ||||||||||||||||||
Prices in | Other | Unobservable | |||||||||||||||||||
Active | Observable | Inputs | |||||||||||||||||||
Markets | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||||||
U.S. Treasury and government agencies | $ | 8,314 | $ | 8,314 | $ | — | $ | — | |||||||||||||
Mortgage-backed securities | 3,313 | — | 3,313 | — | |||||||||||||||||
States and political subdivisions | 1,519 | — | 1,519 | — | |||||||||||||||||
Corporate debt securities | 17,372 | — | 17,372 | — | |||||||||||||||||
Certificates of deposit | 2,767 | — | 2,767 | — | |||||||||||||||||
Total investment securities | 33,285 | 8,314 | 24,971 | — | |||||||||||||||||
Other invested assets | 4,501 | — | — | 4,501 | |||||||||||||||||
Total assets | $ | 37,786 | $ | 8,314 | $ | 24,971 | $ | 4,501 | |||||||||||||
The following table provides information as of December 31, 2013 about the Company’s financial assets measured at fair value on a recurring basis (in thousands): | |||||||||||||||||||||
Total | Quoted | Significant | Significant | ||||||||||||||||||
Prices in | Other | Unobservable | |||||||||||||||||||
Active | Observable | Inputs | |||||||||||||||||||
Markets | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||||||
U.S. Treasury and government agencies | $ | 17,834 | $ | 17,834 | $ | — | $ | — | |||||||||||||
Mortgage-backed securities | 3,980 | — | 3,980 | — | |||||||||||||||||
States and political subdivisions | 3,333 | — | 3,333 | — | |||||||||||||||||
Corporate debt securities | 32,283 | — | 32,283 | — | |||||||||||||||||
Certificates of deposit | 4,891 | — | 4,891 | — | |||||||||||||||||
Total investment securities | 62,321 | 17,834 | 44,487 | — | |||||||||||||||||
Other invested assets | 4,085 | — | — | 4,085 | |||||||||||||||||
Total assets | $ | 66,406 | $ | 17,834 | $ | 44,487 | $ | 4,085 | |||||||||||||
Fair Value Measurements for Assets | Fair value measurements for assets in Level 3 for the year ended December 31, 2014 were as follows (in thousands): | ||||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||||
Using Significant | |||||||||||||||||||||
Unobservable Inputs | |||||||||||||||||||||
(Level 3) | |||||||||||||||||||||
Other Invested Assets | |||||||||||||||||||||
Balance at January 1, 2014 | $ | 4,085 | |||||||||||||||||||
Transfers into Level 3 | — | ||||||||||||||||||||
Total gains included in earnings as net investment income | 416 | ||||||||||||||||||||
Settlements | — | ||||||||||||||||||||
Balance at December 31, 2014 | $ | 4,501 | |||||||||||||||||||
Fair value measurements for assets in Level 3 for the year ended December 31, 2013 were as follows (in thousands): | |||||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||||
Using Significant | |||||||||||||||||||||
Unobservable Inputs | |||||||||||||||||||||
(Level 3) | |||||||||||||||||||||
Other Invested Assets | |||||||||||||||||||||
Balance at January 1, 2013 | $ | 3,390 | |||||||||||||||||||
Transfers into Level 3 | — | ||||||||||||||||||||
Total gains included in earnings as net investment income | 695 | ||||||||||||||||||||
Settlements | — | ||||||||||||||||||||
Balance at December 31, 2013 | $ | 4,085 | |||||||||||||||||||
Fair Value Measurements for Assets and Liabilities | The following table presents the carrying value and estimated fair value of the Company’s financial assets and liabilities disclosed, but not carried, at fair value at December 31, 2014 and the level within the fair value hierarchy (in thousands): | ||||||||||||||||||||
Carrying | Estimated | Level 1 | Level 2 | Level 3 | |||||||||||||||||
Value | Fair Value | ||||||||||||||||||||
Assets: | |||||||||||||||||||||
Cash and cash equivalents | $ | 23,863 | $ | 23,863 | $ | 23,863 | $ | — | $ | — | |||||||||||
Fiduciary and restricted cash | 4,794 | 4,794 | 4,794 | — | — | ||||||||||||||||
Total | $ | 28,657 | $ | 28,657 | $ | 28,657 | $ | — | $ | — | |||||||||||
Liabilities: | |||||||||||||||||||||
Notes payable | $ | 76,815 | $ | 14,289 | $ | — | $ | — | $ | 14,289 | |||||||||||
Senior secured credit facility | 28,135 | 28,254 | — | — | 28,254 | ||||||||||||||||
Subordinated secured credit facility | 16,566 | 14,126 | — | — | 14,126 | ||||||||||||||||
Mortgage payable | 1,825 | 1,825 | — | — | 1,825 | ||||||||||||||||
Total | $ | 123,341 | $ | 58,494 | $ | — | $ | — | $ | 58,494 | |||||||||||
The following table presents the carrying value and estimated fair value of the Company’s financial assets and liabilities disclosed, but not carried, at fair value at December 31, 2013 and the level within the fair value hierarchy (in thousands): | |||||||||||||||||||||
Carrying | Estimated | Level 1 | Level 2 | Level 3 | |||||||||||||||||
Value | Fair Value | ||||||||||||||||||||
Assets: | |||||||||||||||||||||
Cash and cash equivalents | $ | 44,569 | $ | 44,569 | $ | 44,569 | $ | — | $ | — | |||||||||||
Fiduciary and restricted cash | 1,369 | 1,369 | 1,369 | — | — | ||||||||||||||||
Total | $ | 45,938 | $ | 45,938 | $ | 45,938 | $ | — | $ | — | |||||||||||
Liabilities: | |||||||||||||||||||||
Notes payable | $ | 76,828 | $ | 13,181 | $ | — | $ | — | $ | 13,181 | |||||||||||
Senior secured credit facility | 33,523 | 34,476 | — | — | 34,476 | ||||||||||||||||
Subordinated secured credit facility | 13,650 | 11,723 | — | — | 11,723 | ||||||||||||||||
Mortgage payable | 3,562 | 3,562 | — | — | 3,562 | ||||||||||||||||
Total | $ | 127,563 | $ | 62,942 | $ | — | $ | — | $ | 62,942 | |||||||||||
Statutory_Financial_Informatio1
Statutory Financial Information and Accounting Policies (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Supplementary Insurance Information [Abstract] | |||||||||||||
Statutory Information of Company's Insurance Subsidiaries | The following table summarizes selected statutory information of the Company’s insurance subsidiaries ended December 31 (in thousands): | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Statutory capital and surplus: | |||||||||||||
Affirmative Insurance Company (AIC) | $ | 24,265 | $ | 46,291 | $ | 48,115 | |||||||
Affirmative Insurance Company of Michigan | 9,225 | 9,211 | 9,206 | ||||||||||
(AIC of Michigan) | |||||||||||||
USAgencies Casualty Insurance Company, Inc | 27,278 | 25,728 | 24,258 | ||||||||||
(Casualty) | |||||||||||||
USAgencies Direct Insurance Company (Direct) | 5,326 | 5,300 | 5,273 | ||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Statutory net income (loss): | |||||||||||||
Affirmative Insurance Company | $ | (51,253 | ) | $ | (11,343 | ) | $ | (20,786 | ) | ||||
Affirmative Insurance Company of Michigan | 14 | 4 | (7 | ) | |||||||||
USAgencies Casualty Insurance Company, Inc. | 136 | 731 | 1,128 | ||||||||||
USAgencies Direct Insurance Company | 26 | 28 | 15 | ||||||||||
Unaudited_Quarterly_Financial_1
Unaudited Quarterly Financial Data (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||
Summary of Quarterly Consolidated Results from Continuing Operations | The following is a summary of the Company’s unaudited quarterly consolidated results from continuing operations for the years ended December 31, 2014 and 2013 (in thousands, except per share data): | ||||||||||||||||
Quarter Ended | |||||||||||||||||
March 31 | June 30 | September 30 | December 31 | ||||||||||||||
2014:00:00 | |||||||||||||||||
Net premiums earned | $ | 33,364 | $ | 35,188 | $ | 14,274 | $ | 14,210 | |||||||||
Total revenues | 45,526 | 46,968 | 25,395 | 25,644 | |||||||||||||
Net losses and loss adjustment expenses | 27,552 | 34,560 | 30,853 | 22,717 | |||||||||||||
Net income (loss) | 664 | (7,242 | ) | (17,755 | ) | (7,874 | ) | ||||||||||
Diluted income (loss) per common share | 0.04 | (0.47 | ) | (1.14 | ) | (0.50 | ) | ||||||||||
Diluted weighted-average common shares | 16,282 | 15,431 | 15,572 | 15,683 | |||||||||||||
2013:00:00 | |||||||||||||||||
Net premiums earned | $ | 41,332 | $ | 49,658 | $ | 30,802 | $ | 43,891 | |||||||||
Total revenues | 63,818 | 72,780 | 53,310 | 56,216 | |||||||||||||
Net losses and loss adjustment expenses | 31,563 | 38,243 | 33,725 | 44,287 | |||||||||||||
Net income (loss) | (6,251 | ) | 1,485 | 47,618 | (12,134 | ) | |||||||||||
Diluted income (loss) per common share | (0.41 | ) | 0.1 | 3.02 | (0.76 | ) | |||||||||||
Diluted weighted-average common shares | 15,408 | 15,408 | 15,772 | 15,941 | |||||||||||||
Parent_Company_Financials_Tabl
Parent Company Financials (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Condensed Financial Information Of Parent Company Only Disclosure [Abstract] | |||||||||||||
Condensed Balance Sheets | The condensed financial information of the parent company, Affirmative Insurance Holdings, Inc. as of December 31, 2014 and 2013, and for each of the three years ended December 31, 2014, 2013 and 2012 is presented as follows (in thousands, except share data): | ||||||||||||
Condensed Balance Sheets | |||||||||||||
2014 | 2013 | ||||||||||||
Assets | |||||||||||||
Cash and cash equivalents | $ | 27 | $ | 1,012 | |||||||||
Fiduciary and restricted cash | 320 | 319 | |||||||||||
Investment in subsidiaries | 84,361 | 106,446 | |||||||||||
Income taxes receivable | 149 | — | |||||||||||
Other intangible assets, net | 273 | 273 | |||||||||||
Other assets | 5,523 | 21,903 | |||||||||||
Total assets | $ | 90,653 | $ | 129,953 | |||||||||
Liabilities and Stockholders’ Deficit | |||||||||||||
Liabilities: | |||||||||||||
Payable to subsidiaries | $ | 116,170 | $ | 120,441 | |||||||||
Income taxes payable | — | 3,641 | |||||||||||
Debt | 101,402 | 103,875 | |||||||||||
Other liabilities | 7,480 | 4,888 | |||||||||||
Total liabilities | 225,052 | 232,845 | |||||||||||
Stockholders’ deficit: | |||||||||||||
Common stock, $0.01 par value; 75,000,000 shares authorized, | 190 | 182 | |||||||||||
18,949,220 shares issued and 16,155,357 shares outstanding | |||||||||||||
at December 31, 2014; 18,202,221 shares issued and 15,408,358 | |||||||||||||
shares outstanding at December 31, 2013 | |||||||||||||
Additional paid-in capital | 167,623 | 167,049 | |||||||||||
Treasury stock, at cost (2,793,863 shares at December 31, 2014 and 2013) | (32,910 | ) | (32,910 | ) | |||||||||
Accumulated other comprehensive loss | (1,536 | ) | (1,654 | ) | |||||||||
Retained deficit | (267,766 | ) | (235,559 | ) | |||||||||
Total stockholders’ deficit | (134,399 | ) | (102,892 | ) | |||||||||
Total liabilities and stockholders’ deficit | $ | 90,653 | $ | 129,953 | |||||||||
Condensed Statements of Operations | Condensed Statements of Operations | ||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Revenues | |||||||||||||
Dividends from subsidiaries | $ | 9,968 | $ | 6,700 | $ | 14,714 | |||||||
Gain on sale of retail business | 10,000 | 64,971 | — | ||||||||||
Net investment income | 4 | 5 | — | ||||||||||
Total revenues | 19,972 | 71,676 | 14,714 | ||||||||||
Expenses | |||||||||||||
Operating expenses | 493 | (57 | ) | 352 | |||||||||
Loss on extinguishment of debt | — | 4,193 | — | ||||||||||
Interest expense | 11,156 | 19,115 | 17,616 | ||||||||||
Goodwill and other intangible assets impairment | — | — | 1,398 | ||||||||||
Total expenses | 11,649 | 23,251 | 19,366 | ||||||||||
Income (loss) before income taxes and equity interest in subsidiaries | 8,323 | 48,425 | (4,652 | ) | |||||||||
Income tax expense (benefit) | (1,559 | ) | (14,587 | ) | 2,447 | ||||||||
Equity interest in undistributed loss of subsidiaries | (42,089 | ) | (32,294 | ) | (44,814 | ) | |||||||
Net income (loss) | $ | (32,207 | ) | $ | 30,718 | $ | (51,913 | ) | |||||
Condensed Statements of Cash Flows | Condensed Statements of Cash Flows | ||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Net cash used in operating activities | $ | (29,128 | ) | $ | (24,423 | ) | $ | (16,683 | ) | ||||
Cash flows from investing activities | |||||||||||||
Dividends received from subsidiaries | 9,968 | 6,700 | 14,714 | ||||||||||
Proceeds from sale of retail business, net | 25,000 | 84,270 | — | ||||||||||
Net cash provided by investing activities | 34,968 | 90,970 | 14,714 | ||||||||||
Cash flows from financing activities | |||||||||||||
Borrowings under senior secured credit facility effective January 2007 | — | 12,500 | 5,500 | ||||||||||
Borrowings under credit facilities effective September 2013 | — | 48,000 | — | ||||||||||
Principal payments on senior secured credit facility effective September 2013 | (6,500 | ) | (5,000 | ) | — | ||||||||
Principal payments on senior secured credit facility effective January 2007 | — | (120,192 | ) | (3,530 | ) | ||||||||
Proceeds from stock options exercised | 207 | — | — | ||||||||||
Debt issuance costs paid | (532 | ) | (860 | ) | — | ||||||||
Net cash provided by (used in) financing activities | (6,825 | ) | (65,552 | ) | 1,970 | ||||||||
Net increase (decrease) in cash and cash equivalents | (985 | ) | 995 | 1 | |||||||||
Cash and cash equivalents at beginning of year | 1,012 | 17 | 16 | ||||||||||
Cash and cash equivalents at end of year | $ | 27 | $ | 1,012 | $ | 17 | |||||||
General_Additional_Information
General - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
Agency | |
State | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Number of states operating | 7 |
Number of Independent agents | 5,000 |
Going_Concern_Additional_Infor
Going Concern - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Going Concern [Line Items] | |||
Operating loss | ($30,955,000) | ($8,508,000) | ($8,214,000) |
Description of non-compliance with risk-based capital ratio | The Company’s insurance subsidiaries are subject to risk-based capital standards and other minimum capital and surplus requirements imposed under applicable state laws, including the laws of their state of domicile. The risk-based capital standards, based upon the Risk-Based Capital Model Act adopted by the National Association of Insurance Commissioners, or NAIC, require insurance companies to report their results of risk-based capital calculations to state departments of insurance and the NAIC. At December 31, 2014, the risk-based capital level of Affirmative Insurance Company (AIC) triggered a regulatory action level event under the NAIC standard. As a result, AIC is required to submit a plan to the Illinois Department of Insurance (IDOI) in April 2015 detailing corrective actions it will take to return its risk-based capital ratio to an acceptable level. Upon receipt of the plan, the IDOI may accept the plan, require further amendments to the plan or take additional regulatory action including, but not limited to, placing AIC in receivership. Such action by the Illinois Department of Insurance would have a material adverse effect on the Company’s operations and the interest of its creditors and stockholders. Such action by the Illinois Department of Insurance also would trigger a further event of default under the Company’s senior secured and subordinated credit facilities allowing the Company’s lenders to declare all amounts outstanding under the facilities to be immediately due and payable, and if such amounts were declared immediately due and payable by the lenders, it would have a material adverse effect on the Company’s operations and the interests of its creditors and stockholders. The Company has taken and will continue to pursue appropriate actions to improve the underwriting results; however, there can be no assurance that this will occur. | ||
Senior Secured Credit Facility | Debt Instrument, Redemption, Period Two | |||
Going Concern [Line Items] | |||
Debt Instrument, Covenant Compliance | The credit facilities have been amended to waive compliance of the risk-based capital measurement requirement as of December 31, 2014 and to postpone the principal payment of $3.5 million due March 31, 2015 to June 30, 2015. Except for the minimum risk-based capital requirement for which the Company obtained a waiver, the Company was in compliance with these covenants as of December 31, 2014. | ||
Senior Secured Credit Facility | After Amendment | Debt Instrument, Redemption, Period Two | |||
Going Concern [Line Items] | |||
Repayment of credit facility | 7,000,000 | ||
Senior Secured Credit Facility | After Amendment | Debt Instrument, Redemption, Period Two Postpone | |||
Going Concern [Line Items] | |||
Repayment of credit facility | $3,500,000 |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 12 Months Ended | |||
Dec. 31, 2004 | Dec. 31, 2005 | Dec. 31, 2014 | Dec. 31, 2013 | |
Significant Accounting Policies [Line Items] | ||||
Bank overdrafts or negative book cash balance | 1,100,000 | $1,600,000 | ||
Notes payable | 76,815,000 | 76,828,000 | ||
Investment in common securities | 1,700,000 | |||
Notes Payable With Deferred Interest Right | ||||
Significant Accounting Policies [Line Items] | ||||
Notes payable | 56,700,000 | |||
Trust I | ||||
Significant Accounting Policies [Line Items] | ||||
Issuance of trust preferred security | 30,000,000 | |||
Notes payable | 30,900,000 | |||
Initial capital contribution | 928,000 | |||
Investment in common securities | 928,000 | |||
Ownership percentage in VIE | 3.00% | |||
Trust II | ||||
Significant Accounting Policies [Line Items] | ||||
Issuance of trust preferred security | 25,000,000 | |||
Notes payable | 25,800,000 | |||
Initial capital contribution | 774,000 | |||
Investment in common securities | $774,000 | |||
Ownership percentage in VIE | 3.00% | |||
Minimum | ||||
Significant Accounting Policies [Line Items] | ||||
Property and equipment, useful life | 3 years | |||
Maximum | ||||
Significant Accounting Policies [Line Items] | ||||
Property and equipment, useful life | 8 years |
Sale_of_the_Retail_Business_Ad
Sale of the Retail Business - Additional Information (Detail) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | ||||
Sep. 30, 2013 | Sep. 30, 2014 | Jun. 30, 2014 | Apr. 30, 2014 | Nov. 30, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | |
Entity | |||||||
Location | |||||||
Assets And Liabilities Disposed On Sale Of Business [Line Items] | |||||||
Number of retail locations | 195 | ||||||
Number of premium finance companies | 2 | ||||||
Cash proceeds from sale of business | $101,900,000 | ||||||
Potential additional cash proceeds from sale of business | 20,000,000 | ||||||
Working capital adjustment | 1,900,000 | ||||||
Amount held in escrow dependent upon the risk-based capital status | 20,000,000 | ||||||
Fund released from escrow | 10,000,000 | 5,000,000 | 5,000,000 | ||||
Additional proceeds received | 10,000,000 | ||||||
Repayment of senior secured credit facility | 100,000 | ||||||
Gain on sale of retail business | 10,000,000 | 64,971,000 | |||||
Affirmative Insurance Company | |||||||
Assets And Liabilities Disposed On Sale Of Business [Line Items] | |||||||
Infused capital into AIC | $9,900,000 |
Component_of_Net_Assets_Sold_D
Component of Net Assets Sold (Detail) (USD $) | Sep. 30, 2013 |
In Thousands, unless otherwise specified | |
Assets | |
Cash and cash equivalents | $2,529 |
Premium finance and commission receivable | 47,847 |
Other intangible assets | 12,764 |
Other assets | 3,709 |
Total Assets | 66,849 |
Liabilities | |
Due to third-party carriers | 24,456 |
Other liabilities | 5,419 |
Total Liabilities | 29,875 |
Net Assets | $36,974 |
AvailableforSale_Investment_Se2
Available-for-Sale Investment Securities - Additional Information (Detail) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Securities | Securities | |
Schedule of Available-for-sale Securities [Line Items] | ||
Income tax effect of unrealized gains and losses | $0 | |
Unsettled investment purchased | 10,000,000 | |
Individual investment securities in an unrealized loss position | 65 | 53 |
Available-for-sale securities pledged as collateral | 4,900,000 | 5,900,000 |
Investments in fixed-maturity securities | 7,000,000 | 6,900,000 |
Certificates of deposit | Capital Lease | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities pledged as collateral | $2,800,000 | $4,900,000 |
Amortized_Cost_Gross_Unrealize
Amortized Cost Gross Unrealized Gains Losses and Estimated Fair Value of Available-for-Sale Securities (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $33,282 | $62,436 |
Gross Unrealized Gains | 184 | 294 |
Gross Unrealized Losses | -181 | -409 |
Estimated Fair Value | 33,285 | 62,321 |
U.S. Treasury and government agencies | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 8,311 | 17,830 |
Gross Unrealized Gains | 33 | 55 |
Gross Unrealized Losses | -30 | -51 |
Estimated Fair Value | 8,314 | 17,834 |
Mortgage-backed securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 3,386 | 4,023 |
Gross Unrealized Gains | 19 | 4 |
Gross Unrealized Losses | -92 | -47 |
Estimated Fair Value | 3,313 | 3,980 |
States and political subdivisions | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 1,485 | 3,265 |
Gross Unrealized Gains | 34 | 68 |
Estimated Fair Value | 1,519 | 3,333 |
Corporate debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 17,340 | 32,458 |
Gross Unrealized Gains | 90 | 135 |
Gross Unrealized Losses | -58 | -310 |
Estimated Fair Value | 17,372 | 32,283 |
Certificates of deposit | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 2,760 | 4,860 |
Gross Unrealized Gains | 8 | 32 |
Gross Unrealized Losses | -1 | -1 |
Estimated Fair Value | $2,767 | $4,891 |
Amortized_Costs_and_Estimated_
Amortized Costs and Estimated Fair Values of Fixed Income Securities (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $33,282 | $62,436 |
Estimated Fair Value | 33,285 | 62,321 |
Fixed income securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed maturities, Due in one year or less, Amortized Cost | 7,672 | |
Fixed maturities, Due after one year through five years, Amortized Cost | 22,224 | |
Fixed maturities, Due in one year or less, Estimated Fair Value | 7,716 | |
Fixed maturities, Due after one year through five years, Estimated Fair Value | 22,256 | |
Fixed income securities | Mortgage-backed securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Mortgage-backed securities, Amortized Cost | 3,386 | |
Mortgage-backed securities, Estimated Fair Value | $3,313 |
Major_Categories_of_Net_Invest
Major Categories of Net Investment Income (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Investments Debt And Equity Securities [Abstract] | |||
Available-for-sale investment securities | $803 | $769 | $1,520 |
Rental income from investment in real property | 2,420 | 2,390 | 2,410 |
Income from investment in hedge fund | 416 | 695 | 492 |
Cash and cash equivalents | 635 | 155 | 3 |
Investment income | 4,274 | 4,009 | 4,425 |
Less: Investment expense | -1,265 | -1,288 | -1,320 |
Net investment income | $3,009 | $2,721 | $3,105 |
Gross_Realized_Gains_and_Losse
Gross Realized Gains and Losses on Available-for-Sale Investments (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Investments Debt And Equity Securities [Abstract] | |||
Gross gains | $124 | $58 | $1,025 |
Gross losses | -78 | -9 | -137 |
Total | $46 | $49 | $888 |
AvailableforSale_Investment_Se3
Available-for-Sale Investment Securities in Unrealized Loss Position (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less Than Twelve Months Estimated Fair Value | $10,498 | $40,882 |
Less Than Twelve Months Gross Unrealized Losses | -65 | -409 |
Twelve Months or Greater Estimated Fair Value | 6,492 | |
Twelve Months or Greater Gross Unrealized Losses | -116 | |
Total Estimated Fair Value | 16,990 | 40,882 |
Total Gross Unrealized Losses | -181 | -409 |
U.S. Treasury and government agencies | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less Than Twelve Months Estimated Fair Value | 2,217 | 13,220 |
Less Than Twelve Months Gross Unrealized Losses | -6 | -51 |
Twelve Months or Greater Estimated Fair Value | 1,984 | |
Twelve Months or Greater Gross Unrealized Losses | -24 | |
Total Estimated Fair Value | 4,201 | 13,220 |
Total Gross Unrealized Losses | -30 | -51 |
Mortgage-backed securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less Than Twelve Months Estimated Fair Value | 1,388 | 3,403 |
Less Than Twelve Months Gross Unrealized Losses | -22 | -47 |
Twelve Months or Greater Estimated Fair Value | 1,273 | |
Twelve Months or Greater Gross Unrealized Losses | -70 | |
Total Estimated Fair Value | 2,661 | 3,403 |
Total Gross Unrealized Losses | -92 | -47 |
Corporate debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less Than Twelve Months Estimated Fair Value | 5,894 | 23,410 |
Less Than Twelve Months Gross Unrealized Losses | -36 | -310 |
Twelve Months or Greater Estimated Fair Value | 3,235 | |
Twelve Months or Greater Gross Unrealized Losses | -22 | |
Total Estimated Fair Value | 9,129 | 23,410 |
Total Gross Unrealized Losses | -58 | -310 |
Certificates of deposit | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less Than Twelve Months Estimated Fair Value | 999 | 849 |
Less Than Twelve Months Gross Unrealized Losses | -1 | -1 |
Total Estimated Fair Value | 999 | 849 |
Total Gross Unrealized Losses | ($1) | ($1) |
Reinsurance_Additional_Informa
Reinsurance - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 19 Months Ended | 1 Months Ended | 6 Months Ended | 0 Months Ended | 1 Months Ended | 9 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Jun. 30, 2006 | Dec. 31, 2011 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | Jan. 01, 2014 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2011 | Dec. 31, 2010 | |
Effects of Reinsurance [Line Items] | ||||||||||||||||
Ceded percentage of business produced | 10.00% | |||||||||||||||
Conversion rate of quota share reinsurance contract | 40.00% | |||||||||||||||
Written premiums ceded | $229,423,000 | $163,549,000 | $66,482,000 | |||||||||||||
Percentage of policies issued | 100.00% | |||||||||||||||
Unearned premium returned to the ceding company | 84,055,000 | 81,598,000 | 81,598,000 | 81,598,000 | ||||||||||||
Receivable from reinsurers | 182,804,000 | 165,819,000 | 165,819,000 | 165,819,000 | ||||||||||||
Reserves for losses and loss adjustment expenses | 183,836,000 | 132,752,000 | 133,589,000 | 138,854,000 | 133,589,000 | 133,589,000 | 183,836,000 | |||||||||
Funds in a money market cash equivalent account | 10,700,000 | |||||||||||||||
Cumulative withdrawal by first party | 400,000 | |||||||||||||||
Cumulative withdrawal by second party | 1,700,000 | |||||||||||||||
Ceding company retention balance | 0 | |||||||||||||||
Minimum | ||||||||||||||||
Effects of Reinsurance [Line Items] | ||||||||||||||||
Prior written notice period for termination of agreements | 90 days | |||||||||||||||
Affirmative Insurance Company | ||||||||||||||||
Effects of Reinsurance [Line Items] | ||||||||||||||||
Company obligation under reinsurance contract | 4,300,000 | 15,000,000 | 15,000,000 | 15,000,000 | ||||||||||||
Unearned premium returned to the ceding company | 11,800,000 | |||||||||||||||
Affirmative Insurance Company | Cash Equivalents | ||||||||||||||||
Effects of Reinsurance [Line Items] | ||||||||||||||||
Company obligation under reinsurance contract | 600,000 | 3,600,000 | 3,600,000 | 3,600,000 | ||||||||||||
Subsidiaries | ||||||||||||||||
Effects of Reinsurance [Line Items] | ||||||||||||||||
Reserves for losses and loss adjustment expenses | 200,000 | |||||||||||||||
Quota-share reinsurer for agreements effective January 1, 2011 and other | ||||||||||||||||
Effects of Reinsurance [Line Items] | ||||||||||||||||
Written premiums ceded | 5,500,000 | 82,000,000 | 99,300,000 | |||||||||||||
Ceded unearned premium | 27,200,000 | |||||||||||||||
Net deferred ceding commissions | 7,700,000 | |||||||||||||||
Receivable from reinsurers | 3,188,000 | -4,000 | -4,000 | -4,000 | ||||||||||||
New Quota Share Reinsurance Treaty Agreements | ||||||||||||||||
Effects of Reinsurance [Line Items] | ||||||||||||||||
Written premiums ceded | 22,200,000 | 95,900,000 | ||||||||||||||
New Quota Share Reinsurance Treaty Agreements | Louisiana, Alabama, Texas, Illinois | ||||||||||||||||
Effects of Reinsurance [Line Items] | ||||||||||||||||
Ceded percentage of business produced | 40.00% | 40.00% | ||||||||||||||
Written premiums ceded | 145,800,000 | 10,000,000 | 98,600,000 | |||||||||||||
Ceded unearned premium | 47,200,000 | 51,700,000 | ||||||||||||||
Net deferred ceding commissions | 13,900,000 | 14,500,000 | ||||||||||||||
Ceded gross written premium | 20.00% | |||||||||||||||
Increase in quota share rate | 60.00% | |||||||||||||||
New Quota Share Reinsurance Treaty Agreements | California | ||||||||||||||||
Effects of Reinsurance [Line Items] | ||||||||||||||||
Ceded gross written premium | 60.00% | |||||||||||||||
Quota-share reinsurers for agreements effective June 30, 2014 | ||||||||||||||||
Effects of Reinsurance [Line Items] | ||||||||||||||||
Ceded percentage of business produced | 85.00% | |||||||||||||||
Written premiums ceded | 201,900,000 | |||||||||||||||
Receivable from reinsurers | 130,086,000 | |||||||||||||||
County Mutual Insurance Company | ||||||||||||||||
Effects of Reinsurance [Line Items] | ||||||||||||||||
Percentage of policies issued | 100.00% | |||||||||||||||
Michigan Catastrophic Claims Association | ||||||||||||||||
Effects of Reinsurance [Line Items] | ||||||||||||||||
Policy retention amount | 500,000 | 500,000 | ||||||||||||||
Receivable from reinsurers | 27,610,000 | 34,878,000 | 34,878,000 | 34,878,000 | ||||||||||||
Vesta Insurance Group | ||||||||||||||||
Effects of Reinsurance [Line Items] | ||||||||||||||||
Total deposit | 16,600,000 | |||||||||||||||
Deposit after cumulative withdrawals | 9,000,000 | |||||||||||||||
Receivable from reinsurers | 9,270,000 | 13,435,000 | 13,435,000 | 13,435,000 | ||||||||||||
Reinsurance receivables on settlement agreement | 15,300,000 | |||||||||||||||
Reinsurance Recoverable for losses due to collectible reinsurance | $2,000,000 | $2,200,000 | $2,200,000 | $2,200,000 |
Effect_of_Reinsurance_on_Premi
Effect of Reinsurance on Premiums Written and Earned (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Reinsurance Disclosures [Abstract] | |||||||||||
Written Premium, Direct | $331,179 | $304,007 | $198,359 | ||||||||
Written Premium, Reinsurance assumed (returned) | -11,812 | 38,663 | |||||||||
Written Premium, Reinsurance ceded | -229,423 | -163,549 | -66,482 | ||||||||
Written Premium, Total | 101,756 | 128,646 | 170,540 | ||||||||
Earned Premium, Direct | 328,752 | 284,479 | 185,546 | ||||||||
Earned Premium, Reinsurance assumed (returned) | 36,718 | ||||||||||
Earned Premium, Reinsurance ceded | -231,716 | -118,796 | -78,528 | ||||||||
Earned Premium, Total | $14,210 | $14,274 | $35,188 | $33,364 | $43,891 | $30,802 | $49,658 | $41,332 | $97,036 | $165,683 | $143,736 |
Adjustments_to_Ceding_Commissi
Adjustments to Ceding Commissions Recognized (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Reinsurance Disclosures [Abstract] | |||
Selling, general and administrative expenses | $50,765 | $29,716 | $26,676 |
Amount_of_Loss_Reserves_and_Un
Amount of Loss Reserves and Unearned Premium (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Reinsurance Disclosures [Abstract] | ||
Losses and loss adjustment expense reserves | $86,421 | $72,366 |
Unearned premium reserve | 67,089 | 69,381 |
Total | $153,510 | $141,747 |
Summary_of_Ceded_Incurred_Loss
Summary of Ceded Incurred Losses and Loss Adjustment Expenses (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accounts Notes And Loans Receivable [Line Items] | |||
Paid losses and loss adjustment expenses ceded | $182,804 | $165,819 | |
Change in reserves for loss and loss adjustment expenses ceded | -837 | -5,265 | -44,982 |
Ceded Loss and Loss Adjustment Expense Reserves | |||
Accounts Notes And Loans Receivable [Line Items] | |||
Paid losses and loss adjustment expenses ceded | 145,436 | 74,903 | 61,186 |
Change in reserves for loss and loss adjustment expenses ceded | 14,609 | 5,200 | -11,344 |
Incurred losses and loss adjustment expenses ceded | $160,045 | $80,103 | $49,842 |
Amount_of_Receivables_Due_from
Amount of Receivables Due from Reinsurers (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Receivable from reinsurers | $182,804 | $165,819 |
Quota-share reinsurers for agreements effective June 30, 2014 | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Receivable from reinsurers | 130,086 | |
Michigan Catastrophic Claims Association | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Receivable from reinsurers | 27,610 | 34,878 |
Quota-share reinsurers for agreements effective December 31, 2013 | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Receivable from reinsurers | 14,096 | 22,218 |
Vesta Insurance Group | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Receivable from reinsurers | 9,270 | 13,435 |
Quota-share reinsurer for agreements effective January 1, 2011 and other | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Receivable from reinsurers | 3,188 | -4 |
Excess of Loss Reinsurers | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Receivable from reinsurers | 839 | 3,413 |
Quota-share reinsurer for agreements effective September 1, 2011 and March 31, 2013 | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Receivable from reinsurers | ($2,285) | $91,879 |
Summary_of_Policy_Acquisition_
Summary of Policy Acquisition Cost (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred Policy Acquisition Costs [Line Items] | ||
Ending balance | ($4,214) | ($7,544) |
Deferred Policy Acquisition Costs, Gross | ||
Deferred Policy Acquisition Costs [Line Items] | ||
Beginning balance | 12,587 | 7,111 |
Additions | 58,940 | 38,156 |
Amortization | -56,959 | -32,680 |
Ending balance | 14,568 | 12,587 |
Deferred Policy Acquisition Costs, Ceded | ||
Deferred Policy Acquisition Costs [Line Items] | ||
Beginning balance | -20,131 | -7,013 |
Additions | -63,215 | -47,705 |
Amortization | 64,564 | 34,587 |
Ending balance | -18,782 | -20,131 |
Deferred Policy Acquisition Costs, Net Asset (Liability) | ||
Deferred Policy Acquisition Costs [Line Items] | ||
Beginning balance | -7,544 | 98 |
Additions | -4,275 | -9,549 |
Amortization | 7,605 | 1,907 |
Ending balance | ($4,214) | ($7,544) |
Property_and_Equipment_Detail
Property and Equipment (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Property Plant And Equipment [Abstract] | ||
Computer software | $50,565 | $50,448 |
Data processing equipment | 9,250 | 9,056 |
Leasehold improvements | 3,830 | 3,805 |
Furniture and office equipment | 3,664 | 3,637 |
Automobiles | 207 | 254 |
Property and equipment, Gross | 67,516 | 67,200 |
Accumulated depreciation | -59,127 | -53,222 |
Property and equipment, net | $8,389 | $13,978 |
Property_and_Equipment_Net_Add
Property and Equipment, Net - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Property Plant And Equipment [Abstract] | |||
Depreciation expense | $6 | $7.10 | $10 |
Goodwill_and_Other_Intangible_2
Goodwill and Other Intangible Assets - Additional Information (Detail) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2012 | Sep. 30, 2013 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |||||
Goodwill carrying value | $0 | ||||
Company's negative equity position prior to goodwill impairment | 101,300,000 | ||||
Appropriate risk adjusted discount rate used | 19.00% | ||||
Impairment of goodwill | 23,400,000 | ||||
Impairment of indefinite-lived intangible assets | 1,933,000 | 1,933,000 | 1,933,000 | ||
Other intangible assets | $12,764,000 |
Other_Intangible_Assets_Detail
Other Intangible Assets (Detail) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2014 |
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Cost | $11,198 | $11,198 | |
Impairment | -1,933 | -1,933 | -1,933 |
Accumulated Amortization | -7,765 | -7,765 | |
Net | 1,500 | 1,500 | |
Agency and customer relationships | |||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Cost | 8,054 | 8,054 | |
Impairment | -1,689 | -1,689 | |
Accumulated Amortization | -6,365 | -6,365 | |
Trade names and licenses | |||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Cost | 3,144 | 3,144 | |
Impairment | -244 | -244 | |
Accumulated Amortization | -1,400 | -1,400 | |
Net | $1,500 | $1,500 |
Reconciliation_of_Unpaid_Losse
Reconciliation of Unpaid Losses and Loss Adjustment Expense (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Insurance [Abstract] | |||
Gross balance at beginning of year | $133,589 | $138,854 | $183,836 |
Less: Reinsurance recoverable | 72,366 | 67,166 | 78,510 |
Net balance at beginning of year | 61,223 | 71,688 | 105,326 |
Incurred related to: | |||
Current year | 94,470 | 135,556 | 106,379 |
Prior years | 21,212 | 12,262 | 5,479 |
Paid related to: | |||
Current year | 63,780 | 88,727 | 66,916 |
Prior years | 66,794 | 69,556 | 78,580 |
Net balance at the end of year | 46,331 | 61,223 | 71,688 |
Reinsurance recoverable | 86,421 | 72,366 | 67,166 |
Gross balance at the end of year | $132,752 | $133,589 | $138,854 |
Reserve_for_Losses_and_Loss_Ad2
Reserve for Losses and Loss Adjustment Expenses - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Liability For Claims And Claims Adjustment Expense [Line Items] | |||
Losses and loss adjustment expense to net premiums earned ratio | 119.20% | 89.20% | 77.80% |
Prior period favorable (unfavorable) development | $837 | $5,265 | $44,982 |
Accident Year | |||
Liability For Claims And Claims Adjustment Expense [Line Items] | |||
Losses and loss adjustment expense to net premiums earned ratio | 97.40% | 81.80% | 74.00% |
Catastrophes, net of reinsurance | 2.00% | 2.00% | |
Long term average expected ratio | 0.50% | 0.50% | |
Accident Year | Excluding the impact of the quota-share | |||
Liability For Claims And Claims Adjustment Expense [Line Items] | |||
Losses and loss adjustment expense to net premiums earned ratio | 75.20% | 74.60% | 69.40% |
Accident Year | 2013 and 2012 Louisiana, Texas and California businesses | |||
Liability For Claims And Claims Adjustment Expense [Line Items] | |||
Prior period favorable (unfavorable) development | 21,200 | ||
Louisiana Business Accident Year 2011 | |||
Liability For Claims And Claims Adjustment Expense [Line Items] | |||
Prior period favorable (unfavorable) development | 7,000 | ||
Texas Business Accident Year 2011 and 2012 | |||
Liability For Claims And Claims Adjustment Expense [Line Items] | |||
Prior period favorable (unfavorable) development | 3,600 | ||
California Business Accident Year 2012 | |||
Liability For Claims And Claims Adjustment Expense [Line Items] | |||
Prior period favorable (unfavorable) development | $1,300 |
Summary_of_LongTerm_Debt_Instr
Summary of Long-Term Debt Instruments and Balances Outstanding (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Debt Instrument [Line Items] | ||
Notes payable | $76,815 | $76,828 |
Subordinated secured credit facility | 16,566 | 13,650 |
Mortgage payable | 1,825 | 3,562 |
Total long-term debt | 123,341 | 127,563 |
Notes payable due 2035 | ||
Debt Instrument [Line Items] | ||
Notes payable | 30,928 | 30,928 |
Notes payable due 2035 | ||
Debt Instrument [Line Items] | ||
Notes payable | 25,774 | 25,774 |
Notes payable due 2035 | ||
Debt Instrument [Line Items] | ||
Notes payable | 20,113 | 20,126 |
Effective September 2013 | ||
Debt Instrument [Line Items] | ||
Senior secured credit facility, net of discount | $28,135 | $33,523 |
Summary_of_LongTerm_Debt_Instr1
Summary of Long-Term Debt Instruments and Balances Outstanding (Parenthetical) (Detail) (Notes payable due 2035) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Notes payable due 2035 | ||
Debt Instrument [Line Items] | ||
Maturity Year | 2035 | 2035 |
Notes payable due 2035 | ||
Debt Instrument [Line Items] | ||
Maturity Year | 2035 | 2035 |
Notes payable due 2035 | ||
Debt Instrument [Line Items] | ||
Maturity Year | 2035 | 2035 |
Debt_Additional_Information_De
Debt - Additional Information (Detail) (USD $) | 9 Months Ended | 12 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | ||
Sep. 30, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Nov. 30, 2014 | Mar. 31, 2015 | Sep. 30, 2014 | Mar. 31, 2013 | |
Debt Instrument [Line Items] | |||||||
Notes payable | $76,815,000 | $76,828,000 | |||||
Period of interest payments on selected notes payable | 5 years | ||||||
Total deferred interest payable at the expiration of interest deferral period | 6,900,000 | ||||||
Debt instrument maturity period | 15-Dec-15 | ||||||
Principal balance | 45,066,000 | ||||||
Loss on extinguishment of debt | -4,200,000 | -4,193,000 | |||||
Deferred debt issuance cost | 2,200,000 | ||||||
Legal fees | 1,400,000 | ||||||
Prepayment premium | 600,000 | ||||||
Debt issuance cost capitalized | 5,200,000 | ||||||
Secured loan | 4,800,000 | ||||||
Mortgage, interest rate | 4.95% | ||||||
Affirmative Insurance Company | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of Pledge of stock | 100.00% | ||||||
Senior Secured Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 9.25% | ||||||
Interest rate | 10.50% | 10.50% | |||||
Secured credit facility | 40,000,000 | ||||||
Debt instrument maturity period | 30-Mar-16 | ||||||
Leverage ratio under condition one | 1.25% | ||||||
Principal Periodic Payment | 6,500,000 | 5,000,000 | |||||
Principal balance | 28,500,000 | ||||||
Debt instrument discount | 2,000,000 | ||||||
Fee percentage due | 1.00% | 0.50% | |||||
Senior Secured Credit Facility | September 30, 2014 Payment Due | |||||||
Debt Instrument [Line Items] | |||||||
Repayment of credit facility | 2,000,000 | ||||||
Senior Secured Credit Facility | December 31, 2015 Payment Due | |||||||
Debt Instrument [Line Items] | |||||||
Repayment of credit facility | 4,500,000 | ||||||
Senior Secured Credit Facility | March 30, 2016 Payment Due | |||||||
Debt Instrument [Line Items] | |||||||
Repayment of credit facility | 13,500,000 | ||||||
Senior Secured Credit Facility | Before Amendment | Debt Instrument, Redemption, Period Two | |||||||
Debt Instrument [Line Items] | |||||||
Repayment of credit facility | 3,500,000 | ||||||
Senior Secured Credit Facility | After Amendment | Debt Instrument, Redemption, Period Two | |||||||
Debt Instrument [Line Items] | |||||||
Repayment of credit facility | 7,000,000 | ||||||
Senior Secured Credit Facility | After Amendment | Debt Instrument, Redemption, Period Two Postpone | |||||||
Debt Instrument [Line Items] | |||||||
Repayment of credit facility | 3,500,000 | ||||||
Senior Secured Credit Facility | Amendment One | |||||||
Debt Instrument [Line Items] | |||||||
Fee percentage due | 0.00% | ||||||
Senior Secured Credit Facility | Scenario, Forecast | |||||||
Debt Instrument [Line Items] | |||||||
Fee percentage due | 0.50% | ||||||
LIBOR | Senior Secured Credit Facility | Before Amendment | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 7.25% | ||||||
LIBOR | Senior Secured Credit Facility | After Amendment | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 9.25% | ||||||
Three-month LIBOR Rate Plus 3.60% Notes Payable Due 2035 | |||||||
Debt Instrument [Line Items] | |||||||
Notes payable | 30,928,000 | ||||||
Maturity Year | 2035 | ||||||
Securities adjusted | Three-month LIBOR | ||||||
Interest rate | 3.84% | ||||||
Three-month LIBOR Rate Plus 3.60% Notes Payable Due 2035 | LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 3.60% | ||||||
Three-month LIBOR Rate Plus 3.55% Notes Payable Due 2035 | |||||||
Debt Instrument [Line Items] | |||||||
Notes payable | 25,774,000 | ||||||
Maturity Year | 2035 | ||||||
Securities adjusted | Three-month LIBOR | ||||||
Interest rate | 3.79% | ||||||
Three-month LIBOR Rate Plus 3.55% Notes Payable Due 2035 | LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 3.55% | ||||||
Notes Payable With Deferred Interest Right | |||||||
Debt Instrument [Line Items] | |||||||
Notes payable | 56,700,000 | ||||||
Three-month LIBOR Rate Plus 3.95% Notes Payable Due 2035 | |||||||
Debt Instrument [Line Items] | |||||||
Notes payable | 20,113,000 | ||||||
Maturity Year | 2035 | ||||||
Securities adjusted | Three-month LIBOR | ||||||
Interest rate | 4.19% | ||||||
Three-month LIBOR Rate Plus 3.95% Notes Payable Due 2035 | LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 3.95% | ||||||
Subordinated Secured Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate | 19.25% | ||||||
Debt instrument maturity period | 30-Mar-17 | ||||||
Debt instrument face amount | 10,000,000 | ||||||
Principal balance | 16,600,000 | ||||||
Commitment fee | 3,000,000 | ||||||
Capitalized interest cost | $2,900,000 | ||||||
Subordinated Secured Credit Facility | LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 18.00% | ||||||
Leverage ratio under condition one | 1.25% |
Summarized_Credit_Facilities_S
Summarized Credit Facilities Scheduled Payments (Detail) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Debt Disclosure [Abstract] | |
2015 | $15,000 |
2016 | 13,500 |
2017 | 16,566 |
Total | $45,066 |
Capital_Lease_Obligation_Addit
Capital Lease Obligation - Additional Information (Detail) (USD $) | 1 Months Ended | 12 Months Ended | 1 Months Ended | |
31-May-10 | Dec. 31, 2014 | Jan. 31, 2014 | Dec. 31, 2013 | |
Leases | ||||
Schedule Of Capital Lease Obligations [Line Items] | ||||
Proceeds from financing under capital lease obligation | $28,200,000 | $4,858,000 | ||
Purchase of FDIC-insured certificates of deposit | 28,200,000 | |||
Number of capital lease obligations | 2 | |||
Lease term | 6 months | |||
Total rental monthly payments | 600,000 | |||
Available-for-sale securities pledged as collateral | 4,900,000 | 5,900,000 | ||
Computer Software, Intangible Asset | ||||
Schedule Of Capital Lease Obligations [Line Items] | ||||
Proceeds from financing under capital lease obligation | $4,900,000 |
Property_Under_Capital_Lease_D
Property Under Capital Lease (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Leases [Abstract] | ||
Computer software, software licenses and hardware | $34,212 | $34,212 |
Accumulated depreciation | -28,263 | -23,971 |
Computer software, software licenses and hardware, net | $5,949 | $10,241 |
Estimated_Future_Lease_Payment
Estimated Future Lease Payments (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Leases [Abstract] | ||
2015 | $3,407 | |
Less: Amount representing interest | -63 | |
Present value of future lease payments | $3,344 | $9,428 |
Provision_for_Income_Taxes_Det
Provision for Income Taxes (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | |||
Current tax expense (benefit) | ($1,702) | $4,067 | $14 |
Deferred tax expense (benefit) | -3,178 | 250 | |
Net income tax expense (benefit) | ($1,702) | $889 | $264 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Disclosure [Abstract] | |||
Effective tax rate from statutory rate | 35.00% | 35.00% | 35.00% |
Effective_Tax_Rate_Differed_fr
Effective Tax Rate Differed from Statutory Tax Rate (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | |||
Income (loss) before income taxes | ($33,909) | $31,607 | ($51,649) |
Tax provision computed at the federal statutory income tax rate | -11,868 | 11,063 | -18,077 |
Increases (reductions) in tax resulting from: | |||
Tax-exempt interest | -13 | -17 | -67 |
State income taxes | -1,277 | 3,115 | 140 |
IRS audit settlement | -118 | ||
Goodwill impairment | 5,623 | ||
Valuation allowance | 11,420 | -13,303 | 12,766 |
Other | 36 | 31 | -3 |
Net income tax expense (benefit) | ($1,702) | $889 | $264 |
Effective tax rate | 5.00% | 2.80% | 0.50% |
Portions_of_Deferred_Tax_Asset
Portions of Deferred Tax Assets and Deferred Tax Liabilities (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred tax assets: | ||
Unearned and advance premiums | $1,115 | $763 |
Net operating loss carryforward | 80,041 | 68,318 |
Discounted unpaid losses | 704 | 1,085 |
Deferred revenue | 2,288 | 2,367 |
Allowance for doubtful accounts | 184 | 2,709 |
Goodwill | 3,066 | 3,655 |
Rent deferral | 712 | 752 |
Deferred acquisition costs, net asset | 1,475 | 2,640 |
Depreciation on fixed assets | 709 | 325 |
Alternative minimum tax and work opportunity credits | 696 | 1,276 |
Paid in kind interest | 1,248 | |
Unrealized losses | 40 | |
Intangibles | 47 | 68 |
Stock options | 1,585 | 1,580 |
State deferred tax assets | 3,146 | 2,598 |
Other deferred tax assets | 1,455 | 1,782 |
Total deferred tax assets | 98,471 | 89,958 |
Deferred tax liabilities: | ||
Unrealized gains | 1 | |
Debt extinguishment | 128 | 517 |
Gain on sale of retail business | 3,600 | |
Other deferred tax liabilities | 1,158 | 1,013 |
Total deferred tax liabilities | 1,287 | 5,130 |
Deferred tax assets, net, before valuation allowance | 97,184 | 84,828 |
Valuation allowance | $97,184 | $84,828 |
Changes_in_Valuation_Allowance
Changes in Valuation Allowance (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | |||
Continuing operations | $11,420 | ($13,303) | $12,766 |
Changes in other comprehensive income | -41 | 230 | |
Change in valuation allowance | $11,379 | ($13,073) |
Expiration_of_Net_Operating_Lo
Expiration of Net Operating Loss Carryforwards (Detail) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $228,689 |
2027 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 11,189 |
2028 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 4,886 |
2029 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 26,569 |
2030 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 82,417 |
2031 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 39,122 |
2032 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 31,217 |
2034 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $33,289 |
Commitments_Additional_Informa
Commitments - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Commitments And Contingencies Disclosure [Abstract] | |||
Operating lease rental expenses | $2.50 | $6.80 | $8.80 |
Summary_of_Minimum_Commitments
Summary of Minimum Commitments (Detail) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Commitments And Contingencies Disclosure [Abstract] | |
2015 | $1,371 |
2016 | 1,848 |
2017 | 1,807 |
2018 | 1,790 |
2019 | 1,764 |
Thereafter | 4,542 |
Total estimated future lease payment | 13,122 |
Less: Sublease rental arrangements | -2,174 |
Total | $10,948 |
Net_Income_Loss_per_Common_Sha2
Net Income (Loss) per Common Share - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Restricted Stock | |||
Earnings Loss Per Share [Line Items] | |||
Outstanding shares excluded from computation of earnings per share due to anti-dilutive effect | 472,000 | ||
Equity Option | |||
Earnings Loss Per Share [Line Items] | |||
Outstanding shares excluded from computation of earnings per share due to anti-dilutive effect | 1,263,000 | 323,000 | 2,407,000 |
Summary_of_Reconciliation_of_N
Summary of Reconciliation of Numerators and Denominators for Basic and Diluted Earnings per Share (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Numerator: | |||||||||||
Net income (loss) | ($7,874) | ($17,755) | ($7,242) | $664 | ($12,134) | $47,618 | $1,485 | ($6,251) | ($32,207) | $30,718 | ($51,913) |
Denominator: | |||||||||||
Weighted average common shares outstanding | 15,525 | 15,408 | 15,408 | ||||||||
Weighted average diluted shares outstanding | 15,683 | 15,572 | 15,431 | 16,282 | 15,941 | 15,772 | 15,408 | 15,408 | 15,525 | 15,622 | 15,408 |
Basic income (loss) per common share | ($2.07) | $1.99 | ($3.37) | ||||||||
Diluted income (loss) per common share | ($0.50) | ($1.14) | ($0.47) | $0.04 | ($0.76) | $3.02 | $0.10 | ($0.41) | ($2.07) | $1.97 | ($3.37) |
StockBased_Compensation_Additi
Stock-Based Compensation - Additional Information (Detail) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | 31-May-04 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted | 0 | 250,000 | 750,000 | |
Compensation expense | $50,000 | $300,000 | $403,000 | |
Total unrecognized compensation expense | 4,000 | |||
Compensation expense reduced for forfeited options | 57,000 | |||
Total unrecognized compensation expense, period for recognition | 1 month 15 days | |||
Aggregate intrinsic value of stock options outstanding and exercisable | 0 | |||
Aggregate intrinsic value of stock options exercised | 481,000 | 0 | 0 | |
Exercise of stock options (in shares) | 274,999 | |||
Proceeds from stock options exercised | 207,000 | |||
Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | 381,000 | 0 | 4,000 | |
Unrecognized compensation cost related to unvested restricted stock awards | 900,000 | |||
Aggregate fair value of restricted stock awards vested | 1,000 | |||
Restricted stock awards outstanding | 472,000 | |||
Aggregate intrinsic value of outstanding restricted stock awards | $585,200 | |||
Stock Incentive Plan 2004 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock reserved for future issuance | 807,195 | |||
Minimum percentage of exercise price for incentive stock option | 100.00% | |||
Percentage of incentive stock option granted | 10.00% | |||
Minimum percentage of exercise price of non qualified stock option | 20.00% | |||
Stock Incentive Plan 2004 | In the event that an incentive stock option is granted to a 10% stockholder | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Minimum percentage of exercise price for incentive stock option | 110.00% | |||
Stock Incentive Plan 2004 | After a participant's termination of service | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vested stock option exercisable period | 3 months | |||
Stock Incentive Plan 2004 | After a participant's death or disability | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vested stock option exercisable period | 12 months | |||
Stock Incentive Plan 2004 | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock reserved for future issuance | 3,000,000 | |||
Stock options awarded, exercise periods | 10 years | |||
Stock Incentive Plan 2004 | Maximum | In the event that an incentive stock option is granted to a 10% stockholder | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options awarded, exercise periods | 5 years | |||
1998 Omnibus Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Minimum percentage of exercise price for incentive stock option | 100.00% | |||
Stock options available for grant | 803,169 | |||
Stock option term | 10 years | |||
1998 Omnibus Incentive Plan | In the case of any employee who is deemed to own more than 10% of the voting power of all classes of the Company's stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Minimum percentage of exercise price for incentive stock option | 110.00% | |||
Stock option term | 5 years |
Assumptions_Used_in_Estimating
Assumptions Used in Estimating Fair Value of Employee Stock Options (Detail) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Weighted-average grant date fair value | $1.76 | $0.69 |
Weighted-average risk-free interest rate | 1.71% | 1.15% |
Expected term of option in years | 5 years | 6 years |
Weighted-average expected volatility | 43.00% | 43.00% |
Dividend yield | $0 | $0 |
Summary_of_Stock_Option_Activi
Summary of Stock Option Activity (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Shares | |||
Outstanding at beginning of year | 1,573,000 | 2,407,000 | 1,748,000 |
Granted | 0 | 250,000 | 750,000 |
Exercised | -274,999 | ||
Forfeited | -35,000 | -1,084,000 | -91,000 |
Outstanding at end of year | 1,263,000 | 1,573,000 | 2,407,000 |
Weighted Average Exercise Price | |||
Outstanding at beginning of year | $4.75 | $5.07 | $6.82 |
Granted | $1.76 | $0.69 | |
Exercised | $0.75 | ||
Forfeited | $5.06 | $4.77 | $1.65 |
Outstanding at end of year | $5.61 | $4.75 | $5.07 |
Stock_Options_Outstanding_and_
Stock Options Outstanding and Exercisable (Detail) (USD $) | 12 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 |
$0.69 to $1.75 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Range of Exercise Prices, lower limit | $0.69 |
Range of Exercise Prices, upper limit | $1.75 |
Options Outstanding, Number Outstanding | 275 |
Options Outstanding, Weighted Average Exercise Price | $0.69 |
Options Outstanding, Weighted Average Years of Remaining Contractual Life | 7 years 1 month 24 days |
Options Exercisable, Number Exercisable | 183 |
Options Exercisable, Weighted Average Exercise Price | $0.69 |
$1.76 to $10.37 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Range of Exercise Prices, lower limit | $1.76 |
Range of Exercise Prices, upper limit | $10.37 |
Options Outstanding, Number Outstanding | 675 |
Options Outstanding, Weighted Average Exercise Price | $1.76 |
Options Outstanding, Weighted Average Years of Remaining Contractual Life | 7 years 4 months 21 days |
Options Exercisable, Number Exercisable | 675 |
Options Exercisable, Weighted Average Exercise Price | $1.76 |
$10.38 to $15.00 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Range of Exercise Prices, lower limit | $10.38 |
Range of Exercise Prices, upper limit | $15 |
Options Outstanding, Number Outstanding | 47 |
Options Outstanding, Weighted Average Exercise Price | $11.42 |
Options Outstanding, Weighted Average Years of Remaining Contractual Life | 2 years 6 months 15 days |
Options Exercisable, Number Exercisable | 47 |
Options Exercisable, Weighted Average Exercise Price | $11.42 |
$15.01 to $22.00 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Range of Exercise Prices, lower limit | $15.01 |
Range of Exercise Prices, upper limit | $22 |
Options Outstanding, Number Outstanding | 206 |
Options Outstanding, Weighted Average Exercise Price | $17.77 |
Options Outstanding, Weighted Average Years of Remaining Contractual Life | 2 years 2 months 5 days |
Options Exercisable, Number Exercisable | 206 |
Options Exercisable, Weighted Average Exercise Price | $17.77 |
$22.01 to $30.00 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Range of Exercise Prices, lower limit | $22.01 |
Range of Exercise Prices, upper limit | $30 |
Options Outstanding, Number Outstanding | 60 |
Options Outstanding, Weighted Average Exercise Price | $25.28 |
Options Outstanding, Weighted Average Years of Remaining Contractual Life | 2 years 22 days |
Options Exercisable, Number Exercisable | 60 |
Options Exercisable, Weighted Average Exercise Price | $25.28 |
$0.69 to $30.00 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Range of Exercise Prices, lower limit | $0.69 |
Range of Exercise Prices, upper limit | $30 |
Options Outstanding, Number Outstanding | 1,263 |
Options Outstanding, Weighted Average Exercise Price | $5.61 |
Options Outstanding, Weighted Average Years of Remaining Contractual Life | 6 years 18 days |
Options Exercisable, Number Exercisable | 1,171 |
Options Exercisable, Weighted Average Exercise Price | $6 |
Employee_Benefit_Plan_Addition
Employee Benefit Plan - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Employee Benefit Plan [Line Items] | |||
Defined contribution retirement plan description | the Company may, at its discretion, match 100% of each employee’s contribution, up to 3% of the employee’s earnings, plus 50% of each employee’s contribution for the next 2% of the employee’s salary. | ||
Defined Contribution Plan of Employees Percentage | 100.00% | ||
Employees contribution | 3.00% | ||
Employer Matching Contribution | $0 | $0 | |
Costs incurred | $600,000 | ||
Employer Additional Contribution | |||
Employee Benefit Plan [Line Items] | |||
Defined Contribution Plan of Employees Percentage | 50.00% | ||
Employees contribution | 2.00% |
Related_Party_Transactions_Add
Related Party Transactions - Additional Information (Detail) (Subordinated Secured Credit Facility, USD $) | Sep. 30, 2013 |
In Millions, unless otherwise specified | |
Related Party Transaction [Line Items] | |
Debt instrument face amount | $10 |
JCF AFFM Debt Holdings, L.P. | |
Related Party Transaction [Line Items] | |
Debt instrument face amount | $10 |
Items_Reclassified_Out_of_Accu
Items Reclassified Out of Accumulated Other Comprehensive Income (AOCI) (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Equity [Abstract] | |||
Beginning balance | ($1,654) | ($998) | |
Unrealized gain (loss) on available-for-sale investment securities | 164 | -607 | 117 |
Amounts reclassified from accumulated other comprehensive income (loss) | -46 | -49 | -888 |
Net current period other comprehensive income (loss) | 118 | -656 | -771 |
Ending balance | ($1,536) | ($1,654) | ($998) |
Disclosures_for_Items_Reclassi2
Disclosures for Items Reclassified Out of Accumulated Other Comprehensive Income (AOCI) - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Equity [Abstract] | |||
Reclassifications for previously unrealized net gains on available-for-sale securities | $46 | $49 | $888 |
Schedule_of_Statutory_Capital_
Schedule of Statutory Capital Comparison to Risk Based Capital (Detail) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Regulatory Restrictions [Abstract] | |
Total reported statutory capital | $24,265 |
Company action level | 37,432 |
Regulatory action level | 28,074 |
Authorized control level | 18,716 |
Mandatory control level | $13,101 |
Regulatory_Restrictions_Additi
Regulatory Restrictions - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
Subsidiaries | |
Regulatory Requirements [Line Items] | |
Combined ratio | 120.00% |
Number of insurance subsidiaries maintained risk-based capital level | 3 |
Minimum | |
Regulatory Requirements [Line Items] | |
Capital ratio | 200.00% |
Maximum | |
Regulatory Requirements [Line Items] | |
Capital ratio | 300.00% |
Gross_Premiums_Written_by_Stat
Gross Premiums Written by State (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Segment Reporting Information [Line Items] | |||
Gross underwritten premiums | $358,257 | $340,467 | $237,022 |
Less Texas written premium not underwritten | 229,423 | 163,549 | 66,482 |
Louisiana | |||
Segment Reporting Information [Line Items] | |||
Gross underwritten premiums | 123,934 | 119,828 | 106,841 |
Texas | |||
Segment Reporting Information [Line Items] | |||
Gross underwritten premiums | 102,766 | 93,573 | 54,009 |
Less Texas written premium not underwritten | 27,078 | 48,272 | 0 |
California | |||
Segment Reporting Information [Line Items] | |||
Gross underwritten premiums | 81,905 | 73,741 | 17,706 |
Alabama | |||
Segment Reporting Information [Line Items] | |||
Gross underwritten premiums | 24,794 | 25,272 | 21,270 |
Illinois | |||
Segment Reporting Information [Line Items] | |||
Gross underwritten premiums | 15,655 | 18,359 | 23,887 |
Indiana | |||
Segment Reporting Information [Line Items] | |||
Gross underwritten premiums | 6,073 | 6,846 | 8,092 |
Missouri | |||
Segment Reporting Information [Line Items] | |||
Gross underwritten premiums | 3,086 | 2,799 | 3,084 |
South Carolina | |||
Segment Reporting Information [Line Items] | |||
Gross underwritten premiums | 0 | 0 | 2,127 |
Other | |||
Segment Reporting Information [Line Items] | |||
Gross underwritten premiums | 44 | 49 | 6 |
Various States | |||
Segment Reporting Information [Line Items] | |||
Gross underwritten premiums | $331,179 | $292,195 | $237,022 |
Financial_Assets_Measured_at_F
Financial Assets Measured at Fair Value on Recurring Basis (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total investment securities | $33,285 | $62,321 |
Other invested assets | 4,501 | 4,085 |
Fair Value measurements on a recurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total investment securities | 33,285 | 62,321 |
Other invested assets | 4,501 | 4,085 |
Total assets | 37,786 | 66,406 |
Fair Value measurements on a recurring basis | U.S. Treasury and government agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total investment securities | 8,314 | 17,834 |
Fair Value measurements on a recurring basis | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total investment securities | 3,313 | 3,980 |
Fair Value measurements on a recurring basis | States and political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total investment securities | 1,519 | 3,333 |
Fair Value measurements on a recurring basis | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total investment securities | 17,372 | 32,283 |
Fair Value measurements on a recurring basis | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total investment securities | 2,767 | 4,891 |
Fair Value measurements on a recurring basis | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total investment securities | 8,314 | 17,834 |
Total assets | 8,314 | 17,834 |
Fair Value measurements on a recurring basis | Level 1 | U.S. Treasury and government agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total investment securities | 8,314 | 17,834 |
Fair Value measurements on a recurring basis | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total investment securities | 24,971 | 44,487 |
Total assets | 24,971 | 44,487 |
Fair Value measurements on a recurring basis | Level 2 | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total investment securities | 3,313 | 3,980 |
Fair Value measurements on a recurring basis | Level 2 | States and political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total investment securities | 1,519 | 3,333 |
Fair Value measurements on a recurring basis | Level 2 | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total investment securities | 17,372 | 32,283 |
Fair Value measurements on a recurring basis | Level 2 | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total investment securities | 2,767 | 4,891 |
Fair Value measurements on a recurring basis | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Other invested assets | 4,501 | 4,085 |
Total assets | $4,501 | $4,085 |
Fair_Value_Measurements_for_As
Fair Value Measurements for Assets using Unobservable Inputs (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Fair Value Disclosures [Abstract] | ||
Beginning Balance | $4,085 | $3,390 |
Total gains included in earnings as net investment income | 416 | 695 |
Ending Balance | $4,501 | $4,085 |
Fair_Value_Measurements_for_As1
Fair Value Measurements for Assets and Liabilities (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Liabilities: | ||
Subordinated secured credit facility | $16,566 | $13,650 |
Carrying Value | ||
Assets: | ||
Cash and cash equivalents | 23,863 | 44,569 |
Fiduciary and restricted cash | 4,794 | 1,369 |
Total | 28,657 | 45,938 |
Liabilities: | ||
Notes payable | 76,815 | 76,828 |
Senior secured credit facility | 28,135 | 33,523 |
Subordinated secured credit facility | 16,566 | 13,650 |
Mortgage payable | 1,825 | 3,562 |
Total | 123,341 | 127,563 |
Estimated Fair Value | ||
Assets: | ||
Cash and cash equivalents | 23,863 | 44,569 |
Fiduciary and restricted cash | 4,794 | 1,369 |
Total | 28,657 | 45,938 |
Liabilities: | ||
Notes payable | 14,289 | 13,181 |
Senior secured credit facility | 28,254 | 34,476 |
Subordinated secured credit facility | 14,126 | 11,723 |
Mortgage payable | 1,825 | 3,562 |
Total | 58,494 | 62,942 |
Estimated Fair Value | Level 1 | ||
Assets: | ||
Cash and cash equivalents | 23,863 | 44,569 |
Fiduciary and restricted cash | 4,794 | 1,369 |
Total | 28,657 | 45,938 |
Estimated Fair Value | Level 3 | ||
Liabilities: | ||
Notes payable | 14,289 | 13,181 |
Senior secured credit facility | 28,254 | 34,476 |
Subordinated secured credit facility | 14,126 | 11,723 |
Mortgage payable | 1,825 | 3,562 |
Total | $58,494 | $62,942 |
Summary_of_Selected_Statutory_
Summary of Selected Statutory Information of Insurance Subsidiaries (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statutory Accounting Practices [Line Items] | |||
Statutory capital and surplus | $24,265 | ||
Affirmative Insurance Company | |||
Statutory Accounting Practices [Line Items] | |||
Statutory capital and surplus | 24,265 | 46,291 | 48,115 |
Statutory net income (loss) | -51,253 | -11,343 | -20,786 |
Affirmative Insurance Company of Michigan | |||
Statutory Accounting Practices [Line Items] | |||
Statutory capital and surplus | 9,225 | 9,211 | 9,206 |
Statutory net income (loss) | 14 | 4 | -7 |
US Agencies Casualty Insurance Company Incorporated | |||
Statutory Accounting Practices [Line Items] | |||
Statutory capital and surplus | 27,278 | 25,728 | 24,258 |
Statutory net income (loss) | 136 | 731 | 1,128 |
US Agencies Direct Insurance Company | |||
Statutory Accounting Practices [Line Items] | |||
Statutory capital and surplus | 5,326 | 5,300 | 5,273 |
Statutory net income (loss) | $26 | $28 | $15 |
Statutory_Financial_Informatio2
Statutory Financial Information and Accounting Policies - Additional Information (Detail) (USD $) | Dec. 31, 2014 |
In Millions, unless otherwise specified | |
Insurance [Abstract] | |
Statutory capital and surplus necessary for AIC to satisfy regulatory requirements | $37.40 |
Summary_of_Quarterly_Consolida
Summary of Quarterly Consolidated Result from Continuing Operations (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net premiums earned | $14,210 | $14,274 | $35,188 | $33,364 | $43,891 | $30,802 | $49,658 | $41,332 | $97,036 | $165,683 | $143,736 |
Total revenues | 25,644 | 25,395 | 46,968 | 45,526 | 56,216 | 53,310 | 72,780 | 63,818 | 143,533 | 246,124 | 209,761 |
Net losses and loss adjustment expenses | 22,717 | 30,853 | 34,560 | 27,552 | 44,287 | 33,725 | 38,243 | 31,563 | 115,682 | 147,818 | 111,858 |
Net income (loss) | ($7,874) | ($17,755) | ($7,242) | $664 | ($12,134) | $47,618 | $1,485 | ($6,251) | ($32,207) | $30,718 | ($51,913) |
Diluted income (loss) per common share | ($0.50) | ($1.14) | ($0.47) | $0.04 | ($0.76) | $3.02 | $0.10 | ($0.41) | ($2.07) | $1.97 | ($3.37) |
Diluted weighted-average common shares | 15,683 | 15,572 | 15,431 | 16,282 | 15,941 | 15,772 | 15,408 | 15,408 | 15,525 | 15,622 | 15,408 |
Condensed_Balance_Sheet_of_Par
Condensed Balance Sheet of Parent Company (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Assets | ||||
Cash and cash equivalents | $23,863 | $44,569 | $38,176 | $28,559 |
Fiduciary and restricted cash | 4,794 | 1,369 | ||
Income taxes receivable | 149 | |||
Other intangible assets, net | 1,500 | 1,500 | ||
Other assets | 9,420 | 22,124 | ||
Total assets | 337,689 | 386,841 | ||
Liabilities: | ||||
Income taxes payable | 3,641 | |||
Debt | 123,341 | 127,563 | ||
Other liabilities | 32,613 | 47,476 | ||
Total liabilities | 472,088 | 489,733 | ||
Stockholders’ deficit: | ||||
Common stock, $0.01 par value; 75,000,000 shares authorized, 18,949,220 shares issued and 16,155,357 shares outstanding at December 31, 2014; 18,202,221 shares issued and 15,408,358 shares outstanding at December 31, 2013 | 190 | 182 | ||
Additional paid-in capital | 167,623 | 167,049 | ||
Treasury stock, at cost (2,793,863 shares at December 31, 2014 and 2013) | -32,910 | -32,910 | ||
Accumulated other comprehensive loss | -1,536 | -1,654 | -998 | |
Retained deficit | -267,766 | -235,559 | ||
Total stockholders’ deficit | -134,399 | -102,892 | -133,254 | |
Total liabilities and stockholders’ deficit | 337,689 | 386,841 | ||
Parent Company | ||||
Assets | ||||
Cash and cash equivalents | 27 | 1,012 | 17 | 16 |
Fiduciary and restricted cash | 320 | 319 | ||
Investment in subsidiaries | 84,361 | 106,446 | ||
Income taxes receivable | 149 | |||
Other intangible assets, net | 273 | 273 | ||
Other assets | 5,523 | 21,903 | ||
Total assets | 90,653 | 129,953 | ||
Liabilities: | ||||
Payable to subsidiaries | 116,170 | 120,441 | ||
Income taxes payable | 3,641 | |||
Debt | 101,402 | 103,875 | ||
Other liabilities | 7,480 | 4,888 | ||
Total liabilities | 225,052 | 232,845 | ||
Stockholders’ deficit: | ||||
Common stock, $0.01 par value; 75,000,000 shares authorized, 18,949,220 shares issued and 16,155,357 shares outstanding at December 31, 2014; 18,202,221 shares issued and 15,408,358 shares outstanding at December 31, 2013 | 190 | 182 | ||
Additional paid-in capital | 167,623 | 167,049 | ||
Treasury stock, at cost (2,793,863 shares at December 31, 2014 and 2013) | -32,910 | -32,910 | ||
Accumulated other comprehensive loss | -1,536 | -1,654 | ||
Retained deficit | -267,766 | -235,559 | ||
Total stockholders’ deficit | -134,399 | -102,892 | ||
Total liabilities and stockholders’ deficit | $90,653 | $129,953 |
Condensed_Balance_Sheet_of_Par1
Condensed Balance Sheet of Parent Company (Parenthetical) (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Condensed Financial Statements Captions [Line Items] | ||
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 18,949,220 | 18,202,221 |
Common stock, shares outstanding | 16,155,357 | 15,408,358 |
Treasury stock, shares | 2,793,863 | 2,793,863 |
Parent Company | ||
Condensed Financial Statements Captions [Line Items] | ||
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 18,949,220 | 18,202,221 |
Common stock, shares outstanding | 16,155,357 | 15,408,358 |
Treasury stock, shares | 2,793,863 | 2,793,863 |
Condensed_Statements_of_Operat
Condensed Statements of Operations of Parent Company (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues | ||||||||||||
Gain on sale of retail business | $10,000 | $64,971 | ||||||||||
Net investment income | 3,009 | 2,721 | 3,105 | |||||||||
Total revenues | 25,644 | 25,395 | 46,968 | 45,526 | 56,216 | 53,310 | 72,780 | 63,818 | 143,533 | 246,124 | 209,761 | |
Expenses | ||||||||||||
Operating expenses | -3 | -125 | -503 | |||||||||
Loss on extinguishment of debt | 4,200 | 4,193 | ||||||||||
Interest expense | 12,954 | 20,663 | 19,743 | |||||||||
Goodwill and other intangible assets impairment | 23,692 | |||||||||||
Income (loss) before income taxes | -33,909 | 31,607 | -51,649 | |||||||||
Income tax expense (benefit) | -1,702 | 889 | 264 | |||||||||
Net income (loss) | -7,874 | -17,755 | -7,242 | 664 | -12,134 | 47,618 | 1,485 | -6,251 | -32,207 | 30,718 | -51,913 | |
Parent Company | ||||||||||||
Revenues | ||||||||||||
Dividends from subsidiaries | 9,968 | 6,700 | 14,714 | |||||||||
Gain on sale of retail business | 10,000 | 64,971 | ||||||||||
Net investment income | 4 | 5 | ||||||||||
Total revenues | 19,972 | 71,676 | 14,714 | |||||||||
Expenses | ||||||||||||
Operating expenses | 493 | -57 | 352 | |||||||||
Loss on extinguishment of debt | 4,193 | |||||||||||
Interest expense | 11,156 | 19,115 | 17,616 | |||||||||
Goodwill and other intangible assets impairment | 1,398 | |||||||||||
Total expenses | 11,649 | 23,251 | 19,366 | |||||||||
Income (loss) before income taxes | 8,323 | 48,425 | -4,652 | |||||||||
Income tax expense (benefit) | -1,559 | -14,587 | 2,447 | |||||||||
Equity interest in undistributed loss of subsidiaries | -42,089 | -32,294 | -44,814 | |||||||||
Net income (loss) | ($32,207) | $30,718 | ($51,913) |
Condensed_Statements_of_Cash_F
Condensed Statements of Cash Flows of parent Company (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Condensed Cash Flow Statements Captions [Line Items] | |||
Net cash used in operating activities | ($51,272) | ($3,135) | ($57,808) |
Cash flows from investing activities | |||
Proceeds from sale of retail business, net | 25,000 | 84,270 | |
Net cash provided by investing activities | 41,128 | 77,334 | 65,904 |
Cash flows from financing activities | |||
Proceeds from stock options exercised | 207 | ||
Debt issuance costs paid | -532 | -860 | |
Net cash provided by (used in) financing activities | -10,562 | -67,806 | 1,521 |
Net increase (decrease) in cash and cash equivalents | -20,706 | 6,393 | 9,617 |
Cash and cash equivalents at beginning of year | 44,569 | 38,176 | 28,559 |
Cash and cash equivalents at end of year | 23,863 | 44,569 | 38,176 |
Effective January 2007 | |||
Cash flows from financing activities | |||
Borrowings under senior secured credit facility | 12,500 | 5,500 | |
Principal payments on senior secured credit facility | -120,192 | -3,530 | |
Effective September 2013 | |||
Cash flows from financing activities | |||
Borrowings under senior secured credit facility | 48,000 | ||
Principal payments on senior secured credit facility | -6,500 | -5,000 | |
Parent Company | |||
Condensed Cash Flow Statements Captions [Line Items] | |||
Net cash used in operating activities | -29,128 | -24,423 | -16,683 |
Cash flows from investing activities | |||
Dividends received from subsidiaries | 9,968 | 6,700 | 14,714 |
Proceeds from sale of retail business, net | 25,000 | 84,270 | |
Net cash provided by investing activities | 34,968 | 90,970 | 14,714 |
Cash flows from financing activities | |||
Proceeds from stock options exercised | 207 | ||
Debt issuance costs paid | -532 | -860 | |
Net cash provided by (used in) financing activities | -6,825 | -65,552 | 1,970 |
Net increase (decrease) in cash and cash equivalents | -985 | 995 | 1 |
Cash and cash equivalents at beginning of year | 1,012 | 17 | 16 |
Cash and cash equivalents at end of year | 27 | 1,012 | 17 |
Parent Company | Effective January 2007 | |||
Cash flows from financing activities | |||
Borrowings under senior secured credit facility | 12,500 | 5,500 | |
Principal payments on senior secured credit facility | -120,192 | -3,530 | |
Parent Company | Effective September 2013 | |||
Cash flows from financing activities | |||
Borrowings under senior secured credit facility | 48,000 | ||
Principal payments on senior secured credit facility | ($6,500) | ($5,000) |