Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2014 | 1-May-14 | |
Document Documentand Entity Information [Abstract] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 31-Mar-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Trading Symbol | 'AFSI | ' |
Entity Registrant Name | 'AMTRUST FINANCIAL SERVICES, INC. | ' |
Entity Central Index Key | '0001365555 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 75,431,766 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Investments: | ' | ' |
Fixed maturities, available-for-sale, at market value (amortized cost $3,788,266; $3,107,043) | $3,834,595 | $3,100,936 |
Equity securities, available-for-sale, at market value (cost $65,978; $16,010) | 67,387 | 15,148 |
Short-term investments | 71,223 | 114,202 |
Equity investment in unconsolidated subsidiaries – related party | 108,962 | 89,756 |
Other investments | 18,166 | 25,749 |
Securities pledged (amortized cost of $105,306; $316,576) | 104,552 | 311,518 |
Total investments | 4,204,885 | 3,657,309 |
Cash and cash equivalents | 539,016 | 830,022 |
Restricted cash and cash equivalents | 143,143 | 100,439 |
Accrued interest and dividends | 30,376 | 27,800 |
Premiums receivable, net | 1,841,805 | 1,593,975 |
Reinsurance recoverable (related party $1,251,398; $1,144,168) | 2,081,087 | 1,929,848 |
Prepaid reinsurance premium (related party $841,222; $739,719) | 1,133,344 | 1,011,304 |
Prepaid expenses and other assets (recorded at fair value $268,199; $233,024) | 900,833 | 890,333 |
Deferred policy acquisition costs | 539,173 | 446,687 |
Property and equipment, net | 108,215 | 104,299 |
Goodwill | 393,090 | 373,591 |
Intangible assets | 299,946 | 291,802 |
Total assets | 12,214,913 | 11,257,409 |
Liabilities: | ' | ' |
Loss and loss expense reserves | 4,749,551 | 4,368,234 |
Unearned premiums | 3,167,944 | 2,680,982 |
Ceded reinsurance premiums payable (related party $460,278; $393,941) | 719,260 | 635,588 |
Reinsurance payable on paid losses | 30,387 | 18,818 |
Funds held under reinsurance treaties | 42,072 | 27,574 |
Note payable on collateral loan – related party | 167,975 | 167,975 |
Securities sold but not yet purchased, at market | 21,471 | 0 |
Securities sold under agreements to repurchase, at contract value | 94,162 | 293,222 |
Accrued expenses and other current liabilities (recorded at fair value $13,348; $11,945) | 689,473 | 650,858 |
Deferred income taxes | 250,988 | 265,881 |
Debt | 560,696 | 560,174 |
Total liabilities | 10,493,979 | 9,669,306 |
Commitments and contingencies | ' | ' |
Redeemable non-controlling interest | 600 | 600 |
Stockholders’ equity: | ' | ' |
Common stock, $.01 par value; 150,000 shares authorized, 98,192 and 98,122 issued in 2014 and 2013, respectively; 75,327 and 74,765 outstanding in 2014 and 2013, respectively | 980 | 980 |
Preferred stock, $.01 par value; 10,000 shares authorized, 4,600 issued and outstanding in 2014 and 2013 | 115,000 | 115,000 |
Additional paid-in capital | 1,031,473 | 1,033,084 |
Treasury stock at cost; 22,865 and 23,357 shares in 2014 and 2013, respectively | -277,572 | -284,891 |
Accumulated other comprehensive income (loss) | 32,471 | -8,164 |
Retained earnings | 678,421 | 593,634 |
Total AmTrust Financial Services, Inc. equity | 1,580,773 | 1,449,643 |
Non-controlling interest | 139,561 | 137,860 |
Total stockholders’ equity | 1,720,334 | 1,587,503 |
Total liabilities and stockholders' equity | $12,214,913 | $11,257,409 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Fixed maturities, available-for-sale, amortized cost | $3,788,266 | $3,107,043 |
Equity securities, available-for-sale, cost | 65,978 | 16,010 |
Securities pledged | 105,306 | 316,576 |
Reinsurance recoverable | 2,081,087 | 1,929,848 |
Prepaid reinsurance premium | 1,133,344 | 1,011,304 |
Prepaid expense and other assets, fair value | 268,199 | 233,024 |
Ceded reinsurance premiums payable | 719,260 | 635,588 |
Accrued expenses and other current liabilities | 13,348 | 11,945 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 98,192,000 | 98,122,000 |
Common stock, shares outstanding | 75,327,000 | 74,765,000 |
Preferred stock, par value | $0.01 | $0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred Stock, shares issued | 4,600,000 | 4,600,000 |
Preferred Stock, shares outstanding | 4,600,000 | 4,600,000 |
Treasury stock, at cost, shares | 22,865,000 | 23,357,000 |
Related Party Transactions | ' | ' |
Reinsurance recoverable | 1,251,398 | 1,144,168 |
Prepaid reinsurance premium | 841,222 | 739,719 |
Ceded reinsurance premiums payable | $460,278 | $393,941 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Income (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Premium income: | ' | ' |
Net written premium | $1,130,281 | $532,106 |
Change in unearned premium | -301,230 | -124,112 |
Net earned premium | 829,051 | 407,994 |
Service and fee income (related parties – $12,200, $10,507) | 90,958 | 60,513 |
Net investment income | 28,527 | 18,095 |
Net realized gain on investments | 5,439 | 17,284 |
Total revenues | 953,975 | 503,886 |
Expenses: | ' | ' |
Loss and loss adjustment expense | 558,570 | 272,256 |
Acquisition costs and other underwriting expenses (net of ceding commission - related party - $88,106, $63,958) | 186,609 | 100,285 |
Other | 87,591 | 52,152 |
Total expenses | 832,770 | 424,693 |
Income before other income (expense), income taxes and equity in earnings of unconsolidated subsidiaries | 121,205 | 79,193 |
Other income (expense): | ' | ' |
Interest expense | -11,497 | -7,361 |
Gain (loss) on investment in life settlement contracts net of profit commission | 2,800 | -1,076 |
Foreign currency (loss) gain | -1,852 | 1,272 |
Acquisition gain on purchase | 0 | 25,532 |
Total other (expense) income | -10,549 | 18,367 |
Income before income taxes and equity in earnings of unconsolidated subsidiaries | 110,656 | 97,560 |
Provision for income taxes | 27,444 | 16,109 |
Income before equity in earnings of unconsolidated subsidiaries | 83,212 | 81,451 |
Equity in earnings of unconsolidated subsidiary – related party | 18,516 | 1,550 |
Net income | 101,728 | 83,001 |
Net loss attributable to non-controlling interest of subsidiaries | 64 | 877 |
Net income attributable to AmTrust Financial Services, Inc. | 101,792 | 83,878 |
Dividends on preference stock | -1,941 | 0 |
Net income attributable to AmTrust common shareholders | 99,851 | 83,878 |
Earnings per common share: | ' | ' |
Basic earnings per share | $1.34 | $1.13 |
Diluted earnings per share | $1.27 | $1.08 |
Dividends declared per common share | $0.20 | $0.14 |
Net realized gain on investments: | ' | ' |
Total other-than-temporary impairment loss | -1,643 | 0 |
Portion of loss recognized in other comprehensive income | 0 | 0 |
Net impairment losses recognized in earnings | -1,643 | 0 |
Other net realized gain on investments | 7,082 | 17,284 |
Net realized investment gain | $5,439 | $17,284 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Income (Parenthetical) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Service and fee income | $90,958 | $60,513 |
Related Party Transactions | ' | ' |
Service and fee income | 12,200 | 10,507 |
Ceding commission - earned | $88,106 | $63,958 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statement of Comprehensive Income (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Statement of Comprehensive Income [Abstract] | ' | ' |
Net income | $101,728 | $83,001 |
Other comprehensive income, net of tax: | ' | ' |
Foreign currency translation adjustments | 1,515 | -15,731 |
Change in fair value of interest rate swap | 192 | 220 |
Unrealized gains (losses) on securities: | ' | ' |
Unrealized holding gain (loss) arising during period | 40,873 | -15,286 |
Reclassification adjustment for (losses) gains included in net income | -1,945 | 3,536 |
Other comprehensive income (loss), net of tax | 40,635 | -27,261 |
Comprehensive income | 142,363 | 55,740 |
Less: Comprehensive loss attributable to non-controlling interest | -64 | -877 |
Net current-period other comprehensive income | $142,427 | $56,617 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Cash flows from operating activities: | ' | ' |
Net income | $101,728 | $83,001 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 14,596 | 9,177 |
Net amortization of bond premium or discount | 2,940 | 1,542 |
Equity earnings on investment in unconsolidated subsidiaries | -18,516 | -1,550 |
(Gain) loss on investment in life settlement contracts, net | -2,800 | 1,076 |
Realized gain on marketable securities | -7,082 | -17,284 |
Non-cash write-down of marketable securities | 1,643 | 0 |
Discount on notes payable | 788 | 723 |
Stock based compensation | 4,150 | 2,108 |
Bad debt expense | 5,825 | 2,996 |
Foreign currency loss (gain) | 1,852 | -1,272 |
Acquisition gain | 0 | -25,532 |
Changes in assets - (increase) decrease: | ' | ' |
Premiums and note receivables | -254,033 | -63,120 |
Reinsurance recoverable | -145,440 | -80,551 |
Deferred policy acquisition costs, net | -92,486 | -39,677 |
Prepaid reinsurance premiums | -122,040 | -114,483 |
Prepaid expenses and other assets | -55,892 | 24,092 |
Changes in liabilities - increase (decrease): | ' | ' |
Reinsurance premium payable | 83,673 | 2,133 |
Loss and loss expense reserve | 356,108 | 138,007 |
Unearned premiums | 461,247 | 235,716 |
Funds held under reinsurance treaties | 8,635 | -512 |
Accrued expenses and other current liabilities | 68,568 | 57,402 |
Deferred tax liability | -14,172 | -14,183 |
Net cash provided by operating activities | 399,292 | 199,809 |
Cash flows from investing activities: | ' | ' |
Net purchases of securities with fixed maturities | -352,840 | -9,631 |
Net (purchases) sales of equity securities | -3,985 | 7,240 |
Net sales (purchases) of other investments | -9,697 | 4,214 |
Acquisition of and capitalized premiums for life settlement contracts | -11,394 | -9,427 |
Receipt of life settlement contract proceeds | 5,027 | 4,028 |
Acquisition of subsidiaries, net of cash obtained | -67,622 | -3,516 |
Increase in restricted cash and cash equivalents | -42,704 | -36,925 |
Purchase of property and equipment | -9,019 | -8,383 |
Net cash used in investing activities | -472,840 | -60,828 |
Cash flows from financing activities: | ' | ' |
Repurchase agreements, net | -199,060 | -99,695 |
Secured loan agreements payments | -266 | -251 |
Promissory notes payments | -10,000 | 0 |
Non-controlling interest capital contribution to consolidated subsidiaries | 1,765 | 2,209 |
Stock option exercise and other | 1,558 | 975 |
Dividends distributed on common stock | -10,503 | 0 |
Dividends distributed on preference stock | -1,941 | 0 |
Net cash provided by financing activities | -218,447 | -96,762 |
Effect of exchange rate changes on cash | 989 | -5,865 |
Net (decrease) increase in cash and cash equivalents | -291,006 | 36,354 |
Cash and cash equivalents, beginning of the period | 830,022 | 414,370 |
Cash and cash equivalents, end of the period | 539,016 | 450,724 |
Supplemental Cash Flow Information | ' | ' |
Income tax payments | 707 | 273 |
Interest payments on debt | $9,844 | $2,452 |
Basis_of_Reporting
Basis of Reporting | 3 Months Ended |
Mar. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Basis of Reporting | ' |
Basis of Reporting | |
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X and, therefore, do not include all of the information and footnotes required by GAAP for complete financial statements. These interim statements should be read in conjunction with the financial statements and notes thereto included in the AmTrust Financial Services, Inc. (“AmTrust” or the “Company”) Annual Report on Form 10-K for the year ended December 31, 2013, previously filed with the Securities and Exchange Commission (“SEC”) on March 3, 2014. The balance sheet at December 31, 2013 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. | |
These interim consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim period and all such adjustments are of a normal recurring nature. The results of operations for the interim period are not necessarily indicative, if annualized, of those to be expected for the full year. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. | |
A detailed description of the Company’s significant accounting policies and management judgments is located in the audited consolidated financial statements for the year ended December 31, 2013, included in the Company’s Form 10-K filed with the SEC. | |
All significant inter-company transactions and accounts have been eliminated in the consolidated financial statements. | |
To facilitate period-to-period comparisons, certain reclassifications have been made to prior period consolidated financial statement amounts to conform to current period presentation. |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 3 Months Ended | |
Mar. 31, 2014 | ||
Accounting Policies [Abstract] | ' | |
Recent Accounting Pronouncements | ' | |
Recent Accounting Pronouncements | ||
With the exception of those discussed below, there have been no recent accounting pronouncements or changes in accounting pronouncements during the three months ended March 31, 2014, as compared to those described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, that are of significance, or potential significance, to the Company. | ||
In April 2014, the Financial Accounting Standards Board ("FASB") issued revised guidance to reduce diversity in practice for reporting discontinued operations. Under the previous guidance, any component of an entity that was a reportable segment, an operating segment, a reporting unit, a subsidiary, or an asset group was eligible for discontinued operations presentation. The revised guidance only allows disposals of components of an entity that represent a strategic shift (e.g., disposal of a major geographical area, a major line of business, a major equity method investment, or other major parts of an entity) and that have a major effect on a reporting entity’s operations and financial results to be reported as discontinued operations. The revised guidance also requires expanded disclosure in the financial statements for discontinued operations as well as for disposals of significant components of an entity that do not qualify for discontinued operations presentation. The updated guidance is effective for the period ending March 31, 2015. The adoption of this guidance is not expected to have a material effect on the Company’s results of operations, financial position or liquidity. | ||
In July 2013, the FASB issued Accounting Standards Update ("ASU") 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists, which provides guidance on the presentation of an unrecognized tax benefit when a net operating loss ("NOL") carry-forward, a similar tax loss, or a tax credit carry-forward exists. Under the ASU, an entity must present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a NOL carry-forward, similar tax loss, or a tax credit carry-forward. There are two exceptions to this form of presentation as follows: | ||
• | To the extent a NOL carry-forward, a similar tax loss, or a tax credit carry-forward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position; or | |
• | The entity does not intend to use the deferred tax asset for this purpose. | |
If either of these conditions exists, an entity should present an unrecognized benefit in the financial statements as a liability and should net the unrecognizable tax benefit with a deferred tax asset. The Company adopted ASU 2013-11 on January 1, 2014 and the implementation did not have an impact on our results of operations, financial condition or liquidity. | ||
In June 2013, the FASB issued Exposure Draft Insurance Contracts Topic 834. The exposure draft would impact all entities that write insurance contracts. If adopted, the guidance would supersede the requirements in ASC Topic 944, Financial Services - Insurance, which currently apply to insurance entities. The guidance in the exposure draft would require a property and casualty insurer to measure its insurance contracts under the premium allocation approach, which would require an entity to record revenue over the coverage period on the basis of the expected timing of incurred claims. Comments on the exposure draft were due on October 25, 2013. If adopted, entities would be required to adopt this standard retrospectively. The Company is currently studying this exposure draft and the impact on the Company's results of operations, financial position or liquidity. | ||
In March 2013, the FASB issued ASU 2013-05, Parent’s Accounting for the Cumulative Translation Adjustment Upon Derecognition of Certain Subsidiaries or Groups of Assets Within a Foreign Entity or of an Investment in a Foreign Entity to standardize the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary. The Company adopted ASU 2013-05 on January 1, 2014 and the implementation did not have a material impact on the Company’s results of operations, financial position or liquidity. |
Investments
Investments | 3 Months Ended | ||||||||||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ' | ||||||||||||||||||||||||||||||||
Investments | ' | ||||||||||||||||||||||||||||||||
Investments | |||||||||||||||||||||||||||||||||
(a) Available-for-Sale Securities | |||||||||||||||||||||||||||||||||
The amortized cost, estimated market value and gross unrealized appreciation and depreciation of available-for-sale securities as of March 31, 2014 and December 31, 2013, are presented in the table below: | |||||||||||||||||||||||||||||||||
(Amounts in Thousands) | Original or amortized cost | Gross unrealized gains | Gross unrealized losses | Market value | |||||||||||||||||||||||||||||
As of March 31, 2014 | |||||||||||||||||||||||||||||||||
Preferred stock | $ | 4,243 | $ | 293 | $ | (94 | ) | $ | 4,442 | ||||||||||||||||||||||||
Common stock | 61,735 | 3,159 | (1,949 | ) | 62,945 | ||||||||||||||||||||||||||||
U.S. treasury securities | 105,743 | 1,375 | (200 | ) | 106,918 | ||||||||||||||||||||||||||||
U.S. government agencies | 26,139 | 657 | (63 | ) | 26,733 | ||||||||||||||||||||||||||||
Municipal bonds | 506,648 | 8,691 | (11,781 | ) | 503,558 | ||||||||||||||||||||||||||||
Foreign government | 163,146 | 2,376 | (675 | ) | 164,847 | ||||||||||||||||||||||||||||
Corporate bonds: | |||||||||||||||||||||||||||||||||
Finance | 1,151,801 | 47,877 | (8,360 | ) | 1,191,318 | ||||||||||||||||||||||||||||
Industrial | 981,336 | 18,414 | (11,117 | ) | 988,633 | ||||||||||||||||||||||||||||
Utilities | 105,001 | 1,600 | (1,266 | ) | 105,335 | ||||||||||||||||||||||||||||
Commercial mortgage backed securities | 38,941 | 309 | (230 | ) | 39,020 | ||||||||||||||||||||||||||||
Residential mortgage backed securities: | |||||||||||||||||||||||||||||||||
Agency backed | 796,621 | 9,196 | (11,293 | ) | 794,524 | ||||||||||||||||||||||||||||
Non-agency backed | 13,536 | 68 | (2 | ) | 13,602 | ||||||||||||||||||||||||||||
Asset-backed securities | 4,660 | 2 | (3 | ) | 4,659 | ||||||||||||||||||||||||||||
$ | 3,959,550 | $ | 94,017 | $ | (47,033 | ) | $ | 4,006,534 | |||||||||||||||||||||||||
Less: Securities pledged | 105,306 | 884 | (1,638 | ) | 104,552 | ||||||||||||||||||||||||||||
$ | 3,854,244 | $ | 93,133 | $ | (45,395 | ) | $ | 3,901,982 | |||||||||||||||||||||||||
(Amounts in Thousands) | Original or amortized cost | Gross unrealized gains | Gross unrealized losses | Market value | |||||||||||||||||||||||||||||
As of December 31, 2013 | |||||||||||||||||||||||||||||||||
Preferred stock | $ | 1,498 | $ | 82 | $ | (74 | ) | $ | 1,506 | ||||||||||||||||||||||||
Common stock | 14,512 | 1,156 | (2,026 | ) | 13,642 | ||||||||||||||||||||||||||||
U.S. treasury securities | 158,915 | 1,196 | (851 | ) | 159,260 | ||||||||||||||||||||||||||||
U.S. government agencies | 10,466 | 107 | (84 | ) | 10,489 | ||||||||||||||||||||||||||||
Municipal bonds | 461,325 | 4,781 | (19,923 | ) | 446,183 | ||||||||||||||||||||||||||||
Foreign government | 160,459 | 971 | (1,325 | ) | 160,105 | ||||||||||||||||||||||||||||
Corporate bonds: | |||||||||||||||||||||||||||||||||
Finance | 1,057,542 | 41,027 | (13,970 | ) | 1,084,599 | ||||||||||||||||||||||||||||
Industrial | 768,161 | 7,695 | (21,439 | ) | 754,417 | ||||||||||||||||||||||||||||
Utilities | 70,924 | 1,310 | (2,008 | ) | 70,226 | ||||||||||||||||||||||||||||
Commercial mortgage backed securities | 28,970 | — | (404 | ) | 28,566 | ||||||||||||||||||||||||||||
Residential mortgage backed securities: | |||||||||||||||||||||||||||||||||
Agency backed | 694,001 | 5,657 | (13,918 | ) | 685,740 | ||||||||||||||||||||||||||||
Non-agency backed | 6,737 | 19 | (7 | ) | 6,749 | ||||||||||||||||||||||||||||
Asset backed securities | $ | 6,119 | $ | 4 | $ | (3 | ) | $ | 6,120 | ||||||||||||||||||||||||
$ | 3,439,629 | $ | 64,005 | $ | (76,032 | ) | $ | 3,427,602 | |||||||||||||||||||||||||
Less: Securities pledged | 316,576 | 506 | (5,564 | ) | 311,518 | ||||||||||||||||||||||||||||
$ | 3,123,053 | $ | 63,499 | $ | (70,468 | ) | $ | 3,116,084 | |||||||||||||||||||||||||
Investments in foreign government securities include securities issued by national entities as well as instruments that are unconditionally guaranteed by such entities. As of March 31, 2014, the Company's foreign government securities were issued or guaranteed primarily by governments in Canada, Europe, Israel and the United Kingdom. | |||||||||||||||||||||||||||||||||
Proceeds from the sale of investments in available-for-sale securities during the three months ended March 31, 2014 and 2013 were approximately $381,393 and $472,076, respectively. | |||||||||||||||||||||||||||||||||
A summary of the Company’s available-for-sale fixed securities as of March 31, 2014 and December 31, 2013, by contractual maturity, is shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. | |||||||||||||||||||||||||||||||||
31-Mar-14 | 31-Dec-13 | ||||||||||||||||||||||||||||||||
(Amounts in Thousands) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||||||||||||||||||||
Due in one year or less | $ | 133,632 | $ | 133,833 | $ | 128,128 | $ | 128,214 | |||||||||||||||||||||||||
Due after one through five years | 654,077 | 668,005 | 592,703 | 603,942 | |||||||||||||||||||||||||||||
Due after five through ten years | 1,894,126 | 1,933,571 | 1,632,115 | 1,631,751 | |||||||||||||||||||||||||||||
Due after ten years | 357,979 | 351,934 | 334,846 | 321,372 | |||||||||||||||||||||||||||||
Mortgage and asset backed securities | 853,758 | 851,804 | 735,827 | 727,175 | |||||||||||||||||||||||||||||
Total fixed maturities | $ | 3,893,572 | $ | 3,939,147 | $ | 3,423,619 | $ | 3,412,454 | |||||||||||||||||||||||||
(b) Investment Income | |||||||||||||||||||||||||||||||||
Net investment income for the three months ended March 31, 2014 and 2013 was derived from the following sources: | |||||||||||||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||||||||||||||||||
(Amounts in Thousands) | 2014 | 2013 | |||||||||||||||||||||||||||||||
Fixed maturity securities | $ | 27,672 | $ | 17,272 | |||||||||||||||||||||||||||||
Equity securities | 59 | 402 | |||||||||||||||||||||||||||||||
Cash and short term investments | 1,428 | 1,044 | |||||||||||||||||||||||||||||||
29,159 | 18,718 | ||||||||||||||||||||||||||||||||
Less: | |||||||||||||||||||||||||||||||||
Investment expenses and interest expense on securities sold under agreement to repurchase | (632 | ) | (623 | ) | |||||||||||||||||||||||||||||
$ | 28,527 | $ | 18,095 | ||||||||||||||||||||||||||||||
(c) Other-Than-Temporary Impairment | |||||||||||||||||||||||||||||||||
OTTI charges of our fixed-maturities and equity securities for the three months ended March 31, 2014 and 2013 are presented in the table below: | |||||||||||||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||||||||||||||||||
(Amounts in Thousands) | 2014 | 2013 | |||||||||||||||||||||||||||||||
Equity securities recognized in earnings | $ | 1,643 | $ | — | |||||||||||||||||||||||||||||
Fixed-maturity securities recognized in earnings | — | — | |||||||||||||||||||||||||||||||
$ | 1,643 | $ | — | ||||||||||||||||||||||||||||||
The table below summarizes the gross unrealized losses of our fixed maturity and equity securities by length of time the security has continuously been in an unrealized position as of March 31, 2014 and December 31, 2013: | |||||||||||||||||||||||||||||||||
Less Than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||||||||||
(Amounts in Thousands) | Fair Market Value | Unrealized Losses | No. of Positions Held | Fair Market Value | Unrealized Losses | No. of Positions Held | Fair Market Value | Unrealized Losses | |||||||||||||||||||||||||
31-Mar-14 | |||||||||||||||||||||||||||||||||
Common and preferred stock | $ | 25,402 | $ | (1,978 | ) | 125 | $ | 130 | $ | (65 | ) | 6 | $ | 25,532 | $ | (2,043 | ) | ||||||||||||||||
U.S. treasury securities | 45,520 | (200 | ) | 37 | — | — | — | 45,520 | (200 | ) | |||||||||||||||||||||||
U.S. government agencies | 4,864 | (63 | ) | 14 | — | — | — | 4,864 | (63 | ) | |||||||||||||||||||||||
Municipal bonds | 221,785 | (9,883 | ) | 275 | 19,375 | (1,898 | ) | 9 | 241,160 | (11,781 | ) | ||||||||||||||||||||||
Foreign government | 72,153 | (675 | ) | 30 | — | — | — | 72,153 | (675 | ) | |||||||||||||||||||||||
Corporate bonds: | |||||||||||||||||||||||||||||||||
Finance | 344,076 | (8,116 | ) | 223 | 45,043 | (244 | ) | 7 | 389,119 | (8,360 | ) | ||||||||||||||||||||||
Industrial | 366,521 | (10,806 | ) | 228 | 3,790 | (311 | ) | 2 | 370,311 | (11,117 | ) | ||||||||||||||||||||||
Utilities | 32,584 | (1,266 | ) | 16 | — | — | — | 32,584 | (1,266 | ) | |||||||||||||||||||||||
Commercial mortgage backed securities | 6,415 | (230 | ) | 12 | — | — | — | 6,415 | (230 | ) | |||||||||||||||||||||||
Residential mortgage backed securities: | |||||||||||||||||||||||||||||||||
Agency backed | 382,413 | (11,293 | ) | 109 | — | — | — | 382,413 | (11,293 | ) | |||||||||||||||||||||||
Non-agency backed | 152 | (1 | ) | 5 | 22 | (1 | ) | 1 | 174 | (2 | ) | ||||||||||||||||||||||
Asset-backed securities | 2,713 | (3 | ) | 6 | — | — | — | 2,713 | (3 | ) | |||||||||||||||||||||||
Total temporarily impaired securities | $ | 1,504,598 | $ | (44,514 | ) | 1,080 | $ | 68,360 | $ | (2,519 | ) | 25 | $ | 1,572,958 | $ | (47,033 | ) | ||||||||||||||||
Less Than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||||||||||
(Amounts in Thousands) | Fair Market Value | Unrealized Losses | No. of Positions Held | Fair Market Value | Unrealized Losses | No. of Positions Held | Fair Market Value | Unrealized Losses | |||||||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||||||||||
Common and preferred stock | $ | 4,875 | $ | (2,100 | ) | 51 | $ | — | $ | — | — | $ | 4,875 | $ | (2,100 | ) | |||||||||||||||||
U.S. treasury securities | 52,757 | (851 | ) | 18 | — | — | — | 52,757 | (851 | ) | |||||||||||||||||||||||
U.S. government agencies | 4,135 | (84 | ) | 11 | — | — | — | 4,135 | (84 | ) | |||||||||||||||||||||||
Municipal bonds | 254,219 | (17,986 | ) | 302 | 24,169 | (1,937 | ) | 9 | 278,388 | (19,923 | ) | ||||||||||||||||||||||
Foreign government | 68,102 | (1,324 | ) | 16 | 999 | (1 | ) | 1 | 69,101 | (1,325 | ) | ||||||||||||||||||||||
Corporate bonds: | |||||||||||||||||||||||||||||||||
Finance | 500,564 | (13,402 | ) | 182 | 58,923 | (568 | ) | 9 | 559,487 | (13,970 | ) | ||||||||||||||||||||||
Industrial | 500,366 | (21,203 | ) | 263 | 3,383 | (236 | ) | 2 | 503,749 | (21,439 | ) | ||||||||||||||||||||||
Utilities | 45,663 | (2,008 | ) | 21 | — | — | — | 45,663 | (2,008 | ) | |||||||||||||||||||||||
Commercial mortgage backed securities | 28,552 | (404 | ) | 18 | — | — | — | 28,552 | (404 | ) | |||||||||||||||||||||||
Residential mortgage backed securities: | |||||||||||||||||||||||||||||||||
Agency backed | 492,740 | (13,918 | ) | 120 | — | — | — | 492,740 | (13,918 | ) | |||||||||||||||||||||||
Non-agency backed | 205 | (5 | ) | 6 | 23 | (2 | ) | 1 | 228 | (7 | ) | ||||||||||||||||||||||
Asset-backed securities | 1,463 | (3 | ) | 4 | — | — | — | 1,463 | (3 | ) | |||||||||||||||||||||||
Total temporarily impaired securities | $ | 1,953,641 | $ | (73,288 | ) | $ | 1,012 | $ | 87,497 | $ | (2,744 | ) | $ | 22 | $ | 2,041,138 | $ | (76,032 | ) | ||||||||||||||
There are 1,105 and 1,034 securities at March 31, 2014 and December 31, 2013, respectively, that account for the gross unrealized loss, none of which is deemed by the Company to be OTTI. Significant factors influencing the Company’s determination that unrealized losses were temporary included the magnitude of the unrealized losses in relation to each security’s cost, the nature of the investment and management’s intent not to sell these securities and it being not more likely than not that the Company will be required to sell these investments before anticipated recovery of fair value to the Company’s cost basis. | |||||||||||||||||||||||||||||||||
(d) Derivatives | |||||||||||||||||||||||||||||||||
The Company from time to time invests in a limited number of derivatives and other financial instruments as part of its investment portfolio to manage interest rate changes or other exposures to a particular financial market. The Company records changes in valuation on its derivative positions not designated as a hedge as a component of net realized gains and losses. | |||||||||||||||||||||||||||||||||
The Company records changes in valuation on its hedge positions as a component of other comprehensive income. As of March 31, 2014 and December 31, 2013, the Company had two interest rate swaps designated as hedges that were recorded as a liability in the total amount of $2,759 and $3,054, respectively, and were included as a component of accrued expenses and other liabilities. | |||||||||||||||||||||||||||||||||
The following table presents the notional amounts by remaining maturity of the Company’s interest rate swaps as of March 31, 2014: | |||||||||||||||||||||||||||||||||
Remaining Life of Notional Amount (1) | |||||||||||||||||||||||||||||||||
One Year | Two Through Five Years | Six Through Ten Years | After Ten Years | Total | |||||||||||||||||||||||||||||
(Amounts in Thousands) | |||||||||||||||||||||||||||||||||
Interest rate swaps | $ | — | $ | 70,000 | $ | — | $ | — | $ | 70,000 | |||||||||||||||||||||||
(1) | Notional amount is not representative of either market risk or credit risk and is not recorded in the consolidated balance sheet. | ||||||||||||||||||||||||||||||||
(e) Restricted Cash and Investments | |||||||||||||||||||||||||||||||||
The Company, in order to conduct business in certain states, is required to maintain letters of credit or assets on deposit to support state mandated regulatory requirements and certain third party agreements. The Company also utilizes trust accounts to collateralize business with its reinsurance counterparties. These assets are primarily in the form of cash and certain high grade securities. The fair values of our restricted assets as of March 31, 2014 and December 31, 2013 are as follows: | |||||||||||||||||||||||||||||||||
(Amounts in Thousands) | 2014 | 2013 | |||||||||||||||||||||||||||||||
Restricted cash | $ | 143,143 | $ | 100,439 | |||||||||||||||||||||||||||||
Restricted investments | 877,461 | 978,910 | |||||||||||||||||||||||||||||||
Total restricted cash and investments | $ | 1,020,604 | $ | 1,079,349 | |||||||||||||||||||||||||||||
(f) Other | |||||||||||||||||||||||||||||||||
Securities sold but not yet purchased represent obligations of the Company to deliver the specified security at the contracted price and, thereby, create a liability to purchase the security in the market at prevailing prices. The Company’s liability for securities to be delivered is measured at their fair value and as of March 31, 2014 was $21,471 for equity securities. These transactions result in off-balance sheet risk, as the Company’s ultimate cost to satisfy the delivery of securities sold but not yet purchased may exceed the amount reflected at March 31, 2014. Substantially all securities owned under these arrangements are pledged to the clearing broker to sell or repledge the securities to others subject to certain limitations. The Company did not have any securities sold but not yet purchased as of December 31, 2013. | |||||||||||||||||||||||||||||||||
The Company entered into repurchase agreements that are subject to a master netting arrangement, which are accounted for as collateralized borrowing transactions and are recorded at contract amounts. The Company receives cash or securities that it invests or holds in short term or fixed income securities. As of March 31, 2014, the Company had 4 repurchase agreements with an outstanding principal amount of $94,162, which approximates fair value, at an interest rate of 0.24%. All of these repurchase agreements were with the same counter-party. Interest expense associated with these repurchase agreements, which was recorded as a component of investment income, was $249 and $277 for the three months ended March 31, 2014 and 2013, respectively. The Company has approximately $104,552 collateral pledged in support of these agreements as of March 31, 2014. |
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 3 Months Ended | ||||||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||||||||||||||
Fair Value of Financial Instruments | ' | ||||||||||||||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||||||||||||||
The following tables present the level within the fair value hierarchy at which the Company’s financial assets and financial liabilities are measured on a recurring basis as of March 31, 2014 and December 31, 2013: | |||||||||||||||||||||||||||||
(Amounts in Thousands) | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||
As of March 31, 2014 | |||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||
U.S. treasury securities | $ | 106,918 | $ | 106,918 | $ | — | $ | — | |||||||||||||||||||||
U.S. government agencies | 26,733 | — | 26,733 | — | |||||||||||||||||||||||||
Municipal bonds | 503,558 | — | 503,558 | — | |||||||||||||||||||||||||
Foreign government | 164,847 | — | 164,847 | — | |||||||||||||||||||||||||
Corporate bonds and other bonds: | |||||||||||||||||||||||||||||
Finance | 1,191,318 | — | 1,191,318 | — | |||||||||||||||||||||||||
Industrial | 988,633 | — | 988,633 | — | |||||||||||||||||||||||||
Utilities | 105,335 | — | 105,335 | — | |||||||||||||||||||||||||
Commercial mortgage backed securities | 39,020 | — | 39,020 | — | |||||||||||||||||||||||||
Residential mortgage backed securities: | |||||||||||||||||||||||||||||
Agency backed | 689,972 | — | 689,972 | — | |||||||||||||||||||||||||
Non-agency backed | 13,602 | — | 13,602 | — | |||||||||||||||||||||||||
Asset-backed securities | 4,659 | — | 4,659 | — | |||||||||||||||||||||||||
Equity securities | 67,387 | 67,387 | — | — | |||||||||||||||||||||||||
Short term investments | 71,223 | 71,223 | — | — | |||||||||||||||||||||||||
Other investments | 18,166 | — | — | 18,166 | |||||||||||||||||||||||||
Securities held as collateral | 104,552 | — | 104,552 | — | |||||||||||||||||||||||||
Life settlement contracts | 268,199 | — | — | 268,199 | |||||||||||||||||||||||||
$ | 4,364,122 | $ | 245,528 | $ | 3,832,229 | $ | 286,365 | ||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||
Equity securities sold but not yet purchased, market | 21,471 | 21,471 | — | — | |||||||||||||||||||||||||
Equity securities sold under agreements to repurchase, at carrying value | 94,162 | — | 94,162 | — | |||||||||||||||||||||||||
Life settlement contract profit commission | 13,348 | — | — | 13,348 | |||||||||||||||||||||||||
Derivatives | 2,759 | — | 2,759 | — | |||||||||||||||||||||||||
$ | 131,740 | $ | 21,471 | $ | 96,921 | $ | 13,348 | ||||||||||||||||||||||
(Amounts in Thousands) | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||
As of December 31, 2013 | |||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||
U.S. treasury securities | $ | 110,345 | $ | 110,345 | $ | — | $ | — | |||||||||||||||||||||
U.S. government agencies | 10,489 | — | 10,489 | — | |||||||||||||||||||||||||
Municipal bonds | 446,183 | — | 446,183 | — | |||||||||||||||||||||||||
Foreign government | 160,105 | 160,105 | |||||||||||||||||||||||||||
Corporate bonds and other bonds: | |||||||||||||||||||||||||||||
Finance | 1,084,599 | — | 1,084,599 | — | |||||||||||||||||||||||||
Industrial | 754,417 | — | 754,417 | — | |||||||||||||||||||||||||
Utilities | 70,226 | — | 70,226 | — | |||||||||||||||||||||||||
Commercial mortgage backed securities | 28,566 | — | 28,566 | — | |||||||||||||||||||||||||
Residential mortgage backed securities: | |||||||||||||||||||||||||||||
Agency backed | 423,137 | — | 423,137 | — | |||||||||||||||||||||||||
Non-agency backed | 6,749 | — | 6,749 | — | |||||||||||||||||||||||||
Asset-backed securities | 6,120 | 6,120 | |||||||||||||||||||||||||||
Equity securities | 15,148 | 15,148 | — | — | |||||||||||||||||||||||||
Short term investments | 114,202 | 114,202 | — | — | |||||||||||||||||||||||||
Other investments | 25,749 | — | — | 25,749 | |||||||||||||||||||||||||
Securities held as collateral | 311,518 | 48,915 | 262,603 | — | |||||||||||||||||||||||||
Life settlement contracts | 233,024 | — | — | 233,024 | |||||||||||||||||||||||||
$ | 3,800,577 | $ | 288,610 | $ | 3,253,194 | $ | 258,773 | ||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||
Securities sold under agreements to repurchase, at carrying value | 293,222 | — | 293,222 | — | |||||||||||||||||||||||||
Life settlement contract profit commission | 11,945 | — | — | 11,945 | |||||||||||||||||||||||||
Derivatives | 3,054 | — | 3,054 | — | |||||||||||||||||||||||||
$ | 308,221 | $ | — | $ | 296,276 | $ | 11,945 | ||||||||||||||||||||||
The Company classifies its financial assets and liabilities in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. This classification requires judgment in assessing the market and pricing methodologies for a particular security. The fair value hierarchy includes the following three levels: | |||||||||||||||||||||||||||||
• | Level 1 – Valuations are based on unadjusted quoted market prices in active markets for identical financial assets or liabilities. | ||||||||||||||||||||||||||||
Examples of instruments utilizing Level 1 inputs include: exchange-traded securities and U.S. Treasury bonds. | |||||||||||||||||||||||||||||
• | Level 2 – Valuations of financial assets and liabilities are based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or liabilities in inactive markets obtained from third party pricing services or valuations based on models where the significant inputs are observable (e.g., interest rates, yield curves, prepayment speeds, default rates, loss severities, etc.) or can be corroborated by observable market data. | ||||||||||||||||||||||||||||
Examples of instruments utilizing Level 2 inputs include: U.S. government-sponsored agency securities; non-U.S. government obligations; corporate and municipal bonds; mortgage-backed bonds; asset-backed securities and listed derivatives that are not actively traded. | |||||||||||||||||||||||||||||
• | Level 3 – Valuations are based on unobservable inputs for assets and liabilities where there is little or no market activity. Management’s assumptions are used in internal valuation pricing models to determine the fair value of financial assets or liabilities, which may include projected cash flows, collateral performance or liquidity circumstances in the security or similar securities that may have occurred since the prior pricing period. | ||||||||||||||||||||||||||||
Examples of instruments utilizing Level 3 inputs include: hedge and credit funds with partial transparency. | |||||||||||||||||||||||||||||
For additional discussion regarding techniques used to value the Company’s investment portfolio, refer to Note 2. “Significant Accounting Policies” in Item 8. “Financial Statements and Supplementary Data” in its 2013 Form 10-K. | |||||||||||||||||||||||||||||
The following tables provides a summary of changes in fair value of the Company’s Level 3 financial assets and liabilities for the three months ended March 31, 2014 and 2013: | |||||||||||||||||||||||||||||
(Amounts in Thousands) | Balance as of December 31, 2013 | Net income | Other comprehensive income | Purchases and issuances | Sales and settlements | Net transfers into (out of) Level 3 | Balance as of March 31, | ||||||||||||||||||||||
2014 | |||||||||||||||||||||||||||||
Other investments | $ | 25,749 | $ | 2,114 | $ | — | $ | 3,207 | $ | (12,904 | ) | $ | — | $ | 18,166 | ||||||||||||||
Life settlement contracts | 233,024 | 16,987 | — | 23,215 | (5,027 | ) | — | 268,199 | |||||||||||||||||||||
Life settlement contract profit commission | (11,945 | ) | (1,403 | ) | — | — | — | — | (13,348 | ) | |||||||||||||||||||
Total | $ | 246,828 | $ | 17,698 | $ | — | $ | 26,422 | $ | (17,931 | ) | $ | — | $ | 273,017 | ||||||||||||||
(Amounts in Thousands) | Balance as of December 31, 2012 | Net income | Other comprehensive income | Purchases and issuances | Sales and settlements | Net transfers into (out of) Level 3 | Balance as of | ||||||||||||||||||||||
March 31, | |||||||||||||||||||||||||||||
2013 | |||||||||||||||||||||||||||||
Other investments | $ | 11,144 | $ | 694 | $ | — | $ | 5,111 | $ | (897 | ) | $ | — | $ | 16,052 | ||||||||||||||
Life settlement contracts | 193,927 | 9,925 | — | — | (4,028 | ) | — | 199,824 | |||||||||||||||||||||
Life settlement contract profit commission | (11,750 | ) | (487 | ) | — | — | — | — | (12,237 | ) | |||||||||||||||||||
Total | $ | 193,321 | $ | 10,132 | $ | — | $ | 5,111 | $ | (4,925 | ) | $ | — | $ | 203,639 | ||||||||||||||
The Company had no transfers between levels during the three months ended March 31, 2014 and 2013. | |||||||||||||||||||||||||||||
A reconciliation of net income for life settlement contracts in the above table to gain (loss) on investment in life settlement contracts net of profit commission included in the Condensed Consolidated Statements of Income is as follows: | |||||||||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||||||||||||||
(Amounts in Thousands) | 2014 | 2013 | |||||||||||||||||||||||||||
Net income | $ | 16,987 | $ | 9,925 | |||||||||||||||||||||||||
Premiums paid | (11,394 | ) | (9,427 | ) | |||||||||||||||||||||||||
Profit commission | (1,403 | ) | (487 | ) | |||||||||||||||||||||||||
Other expenses | (1,390 | ) | (1,087 | ) | |||||||||||||||||||||||||
Gain (loss) on investment in life settlement contracts net of profit commission | $ | 2,800 | $ | (1,076 | ) | ||||||||||||||||||||||||
The Company uses the following methods and assumptions in estimating its fair value disclosures for financial instruments: | |||||||||||||||||||||||||||||
— | Equity and Fixed Income Investments: Fair value disclosures for these investments are disclosed above in this note. The carrying values of cash, short term investments and investment income accrued approximate their fair values and are classified as Level 1 in the financial hierarchy. | ||||||||||||||||||||||||||||
— | Premiums Receivable: The carrying values reported in the accompanying balance sheets for these financial instruments approximate their fair values due to the short term nature of the asset and are classified as Level 1 in the financial hierarchy. | ||||||||||||||||||||||||||||
— | Other Investments: The Company has approximately 0.4% of its investment portfolio in limited partnerships or hedge funds where the fair value estimate is determined by a fund manager based on recent filings, operating results, balance sheet stability, growth and other business and market sector fundamentals. Due to the significant unobservable inputs in these valuations, the Company includes the estimate in the amount disclosed in Level 3 hierarchy. | ||||||||||||||||||||||||||||
— | Equity Investment in Unconsolidated Subsidiaries - Related Party: The Company has an approximate ownership percentage of 13.2% in National General Holdings Corp., which completed a 144A offering during 2014. The Company accounts for this investment under the equity method of accounting as it has the ability to exert significant influence on National General Holdings Corp. The fair value of the investment was approximately $172,000 as of March 31, 2014. | ||||||||||||||||||||||||||||
— | Subordinated Debentures and Debt: The current fair value of the Company's convertible senior notes, subordinated debentures, and 6.125% Notes was $294,762, $69,250, and $248,293 as of March 31, 2014, respectively. The convertible senior notes and the 6.125% Notes are publicly traded instruments and are classified as Level 1 in the fair value hierarchy. The subordinated debentures are classified as Level 3 in the fair value hierarchy. The fair value of the subordinated debentures was determined using the Black-Derman-Toy interest rate lattice model. | ||||||||||||||||||||||||||||
— | Derivatives: The Company classifies interest rate swaps as Level 2 in fair value hierarchy. The Company uses these interest rate swaps to hedge floating interest rates on its debt, thereby changing the variable rate exposure to a fixed rate exposure for interest on these obligations. The estimated fair value of the interest rate swaps, which is obtained from a third party pricing service, is measured using discounted cash flow analysis that incorporates significant observable inputs, including the LIBOR forward curve and a measurement of volatility. | ||||||||||||||||||||||||||||
— | Repurchase Agreements: The carrying value of repurchase agreements in the accompanying balance sheets represents their fair values and are classified as Level 2 in the financial hierarchy. | ||||||||||||||||||||||||||||
The fair value of life settlement contracts as well as life settlement profit commission liability is based on information available to the Company at the end of the reporting period. The Company considers the following factors in its fair value estimates: cost at date of purchase, recent purchases and sales of similar investments (if available and applicable), financial standing of the issuer, changes in economic conditions affecting the issuer, maintenance cost, premiums, benefits, standard actuarially developed mortality tables and life expectancy reports prepared by nationally recognized and independent third party medical underwriters. The Company estimates the fair value of a life insurance policy by applying an investment discount rate based on the cost of funding the Company's life settlement contracts as compared to returns on investments in asset classes with comparable credit quality, which the Company has determined to be 7.5%, to the expected cash flow generated by the policies in the Company's life settlement portfolio (death benefits less premium payments), net of policy specific adjustments and reserves. In order to confirm the integrity of their calculation of fair value, the Company, quarterly, retains an independent third-party actuary to verify that the actuarial modeling used by the Company to determine fair value was performed correctly and that the valuation, as determined through the Company’s actuarial modeling, is consistent with other methodologies. The Company considers this information in its assessment of the reasonableness of the life expectancy and discount rate inputs used in the valuation of these investments. | |||||||||||||||||||||||||||||
The Company adjusts the standard mortality for each insured for the insured's life expectancy based on reviews of the insured's medical records. The Company establishes policy specific reserves for the following uncertainties: improvements in mortality, the possibility that the high net worth individuals represented in its portfolio may have access to better health care, the volatility inherent in determining the life expectancy of insureds with significant reported health impairments, the possibility that the issuer of the policy or a third party will contest the payment of the death benefit payable to the Company, and the future expenses related to the administration of the portfolio. The application of the investment discount rate to the expected cash flow generated by the portfolio, net of the policy specific reserves, yields the fair value of the portfolio. The effective discount rate reflects the relationship between the fair value and the expected cash flow gross of these reserves. | |||||||||||||||||||||||||||||
The following summarizes data utilized in estimating the fair value of the portfolio of life insurance policies as of March 31, 2014 and December 31, 2013 and, as described in Note 5. "Investments in Life Settlements", only includes data for policies to which the Company assigned value at those dates: | |||||||||||||||||||||||||||||
March 31, | December 31, | ||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||
Average age of insured | 80.4 years | 80.1 years | |||||||||||||||||||||||||||
Average life expectancy, months (1) | 127 | 131 | |||||||||||||||||||||||||||
Average face amount per policy | $ | 6,692,000 | $ | 6,611,000 | |||||||||||||||||||||||||
Effective discount rate (2) | 14.4 | % | 14.2 | % | |||||||||||||||||||||||||
(1) | Standard life expectancy as adjusted for specific circumstances. | ||||||||||||||||||||||||||||
(2) | Effective Discount Rate ("EDR") is the Company's estimated internal rate of return on its life settlement contract portfolio and is determined from the gross expected cash flows and valuation of the portfolio. The valuation of the portfolio is calculated net of all reserves using a 7.5% discount rate. The EDR is implicit of the reserves and the gross expected cash flows of the portfolio. The Company anticipates that the EDR's range is between 12.5% and 17.5% and reflects the uncertainty that exists surrounding the information available as of the reporting date. As the accuracy and reliability of information improves (declines), the EDR will decrease (increase). The increase in the EDR from December 31, 2013 to March 31, 2014 resulted from routine updating of life expectancies and other factors relating to operational risk. | ||||||||||||||||||||||||||||
The Company's assumptions are, by their nature, inherently uncertain and the effect of changes in estimates may be significant. The fair value measurements used in estimating the present value calculation are derived from valuation techniques generally used in the industry that include inputs for the asset that are not based on observable market data. The extent to which the fair value could reasonably vary in the near term has been quantified by evaluating the effect of changes in significant underlying assumptions used to estimate the fair value amount. If the life expectancies were increased or decreased by 4 months and the discount factors were increased or decreased by 1% while all other variables were held constant, the carrying value of the investment in life insurance policies would increase or (decrease) by the unaudited amounts summarized below as of March 31, 2014 and December 31, 2013: | |||||||||||||||||||||||||||||
Change in life expectancy | |||||||||||||||||||||||||||||
(Amounts in Thousands) | Plus 4 Months | Minus 4 Months | |||||||||||||||||||||||||||
Investment in life policies: | |||||||||||||||||||||||||||||
March 31, 2014 | $ | (33,032 | ) | $ | 34,621 | ||||||||||||||||||||||||
December 31, 2013 | $ | (29,537 | ) | $ | 31,313 | ||||||||||||||||||||||||
Change in discount rate (1) | |||||||||||||||||||||||||||||
(Amounts in Thousands) | Plus 1% | Minus 1% | |||||||||||||||||||||||||||
Investment in life policies: | |||||||||||||||||||||||||||||
March 31, 2014 | $ | (22,413 | ) | $ | 25,228 | ||||||||||||||||||||||||
December 31, 2013 | $ | (20,055 | ) | $ | 22,605 | ||||||||||||||||||||||||
-1 | Discount rate is a present value calculation that considers legal risk, credit risk and liquidity risk and is a component of EDR. |
Investment_in_Life_Settlements
Investment in Life Settlements | 3 Months Ended | ||||||||||
Mar. 31, 2014 | |||||||||||
Investments, All Other Investments [Abstract] | ' | ||||||||||
Investment in Life Settlements | ' | ||||||||||
Investment in Life Settlements | |||||||||||
The Company currently owns and periodically acquires life settlement contracts. A life settlement contract is a contract between the owner of a life insurance policy and a third-party who obtains the ownership and beneficiary rights of the underlying life insurance policy. The Company currently has a fifty percent ownership interest in four subsidiaries (collectively, the “LSC entities”) that acquire life settlement contracts. The LSC entities may also acquire premium finance loans made in connection with the borrowers’ purchase of life insurance policies that are secured by the policies, which are in default at the time of purchase. The LSC entities acquire the underlying policies through the borrowers’ voluntary surrender of the policy in satisfaction of the loan or foreclosure. A subsidiary of National General Holdings Corp. ("NGHC") owns the remaining fifty percent interest in the LSC entities. A third party serves as the administrator for two of the life settlement contract portfolios, for which it receives an administrative fee. The third party administrator is eligible to receive a percentage of profits after certain time and performance thresholds have been met. The Company provides certain actuarial and finance functions related to the LSC entities. In conjunction with the Company’s 13.2% ownership percentage of NGHC, the Company ultimately receives 56.6% of the profits and losses of the LSC entities. As such, in accordance with ASC 810-10, Consolidation, the Company has been deemed the primary beneficiary and, therefore, consolidate the LSC entities. | |||||||||||
The Company accounts for investments in life settlements in accordance with ASC 325-30, Investments in Insurance Contracts, which states that an investor shall elect to account for its investments in life settlement contracts by using either the investment method or the fair value method. The election is made on an instrument-by-instrument basis and is irrevocable. The Company has elected to account for these policies using the fair value method. As no comparable market pricing is available, the Company determines fair value based upon its estimate of the discounted cash flow related to policies (net of the reserves for improvements in mortality, the possibility that the high net worth individuals represented in its portfolio may have access to better health care, the volatility inherent in determining the life expectancy of insureds with significant reported health impairments, the possibility that the issuer of the policy or a third party will contest the payment of the death benefit payable to the Company, and the future expenses related to the administration of the portfolio), which incorporates current life expectancy assumptions, premium payments, the credit exposure to the insurance company that issued the life settlement contracts and the rate of return that a buyer would require on the contracts. | |||||||||||
Total capital contributions of approximately $3,125 and $4,397 were made to the LSC entities during the three months ended March 31, 2014 and 2013, respectively, for which the Company contributed approximately $1,375 and $2,188 in those same periods. The LSC entities used the contributed capital to pay premiums and purchase policies. The Company’s investments in life settlements and premium finance loans were approximately $268,199 and $233,024 as of March 31, 2014 and December 31, 2013, respectively, and are included in Prepaid expenses and other assets on the Consolidated Balance Sheet. The Company recorded a gain on investment in life settlement contracts, net of profit commission, for the three months ended March 31, 2014 of approximately $2,800 and a loss of approximately $1,076 for the three months ended March 31, 2013, respectively, related to the life settlement contracts. | |||||||||||
During the three months ended March 31, 2014, upon the voluntary surrender of the underlying life insurance policies in satisfaction of the remaining defaulted premium finance loans, the LSC entities became the owner and beneficiary under the underlying life insurance policies with respect to such loans. As of March 31, 2014, the LSC entities owned no premium finance loans. As of December 31, 2013, the LSC entities owned 2 premium finance loans which were secured by life insurance policies and were carried at a value of $0. | |||||||||||
The following table describes the Company’s investment in life settlements as of March 31, 2014 and December 31, 2013: | |||||||||||
(Amounts in Thousands, except number of Life Settlement Contracts) | Number of Life Settlement Contracts | Fair Value (1) | Face Value | ||||||||
Expected Maturity Term in Years | |||||||||||
As of March 31, 2014 | |||||||||||
0-1 | — | $ | — | $ | — | ||||||
2-Jan | 3 | 17,236 | 25,000 | ||||||||
3-Feb | 8 | 43,069 | 73,000 | ||||||||
4-Mar | 7 | 15,824 | 38,000 | ||||||||
5-Apr | 3 | 7,886 | 20,000 | ||||||||
Thereafter | 267 | 184,184 | 1,718,409 | ||||||||
Total | 288 | $ | 268,199 | $ | 1,874,409 | ||||||
(Amounts in Thousands, except number of Life Settlement Contracts) | Number of Life Settlement Contracts | Fair Value (1) | Face Value | ||||||||
Expected Maturity Term in Years | |||||||||||
As of December 31, 2013 | |||||||||||
0-1 | — | $ | — | $ | — | ||||||
2-Jan | — | — | — | ||||||||
3-Feb | 1 | 2,726 | 5,000 | ||||||||
4-Mar | 13 | 53,767 | 103,000 | ||||||||
5-Apr | 2 | 5,622 | 13,000 | ||||||||
Thereafter | 255 | 170,909 | 1,641,409 | ||||||||
Total | 271 | $ | 233,024 | $ | 1,762,409 | ||||||
(1) | The Company determined the fair value as of March 31, 2014 based on 210 policies out of 288 policies, as the Company assigned no value to 78 of the policies as of March 31, 2014. The Company determined the fair value as of December 31, 2013 based on 191 policies out of 271 policies, as the Company assigned no value to 80 of the policies as of December 31, 2013. The Company estimated the fair value of a life insurance policy using a cash flow model with an appropriate discount rate. In some cases, the cash flow model calculates the value of an individual policy to be negative, and therefore the fair value of the policy is zero as no liability exists when a negative value is calculated. The Company is not contractually bound to pay the premium on its life settlement contracts and, therefore, would not pay a willing buyer to assume title of these contracts. Additionally, certain of the Company's acquired policies were structured to have low premium payments at inception of the policy term, which later escalate greatly towards the tail end of the policy term. At the current time, the Company expenses all premium paid, even on policies with zero fair value. Once the premium payments escalate, the Company may allow the policies to lapse. In the event that death benefits are realized in the time frame between initial acquisition and premium escalation, it is a benefit to cash flow. | ||||||||||
For these contracts where the Company determined the fair value to be negative and therefore assigned a fair value of zero, the table below details the amount of premiums paid and the death benefits received during the twelve months preceding March 31, 2014 and December 31, 2013: | |||||||||||
(Amounts in Thousands, except number of Life Settlement Contracts) | 31-Mar-14 | 31-Dec-13 | |||||||||
Number of policies with a negative value from discounted cash flow model as of period end | 78 | 80 | |||||||||
Premiums paid for the preceding twelve month period for period ended | $ | 9,114 | $ | 9,371 | |||||||
Death benefit received | $ | 3,012 | $ | 3,012 | |||||||
Premiums to be paid by the LSC entities for each of the five succeeding fiscal years to keep the life insurance policies in force as of March 31, 2014, are as follows: | |||||||||||
(Amounts in Thousands) | Premiums Due on Life Settlement Contracts | ||||||||||
2014 | $ | 39,790 | |||||||||
2015 | 42,339 | ||||||||||
2016 | 62,240 | ||||||||||
2017 | 40,309 | ||||||||||
2018 | 38,319 | ||||||||||
Thereafter | 583,031 | ||||||||||
Total | $ | 806,028 | |||||||||
Debt
Debt | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||
Debt Disclosure [Abstract] | ' | |||||||||||||||||||
Debt | ' | |||||||||||||||||||
Debt | ||||||||||||||||||||
The Company’s borrowings consisted of the following at March 31, 2014 and December 31, 2013: | ||||||||||||||||||||
(Amounts in Thousands) | March 31, 2014 | December 31, 2013 | ||||||||||||||||||
Revolving credit facility | $ | — | $ | — | ||||||||||||||||
Convertible senior notes | 165,006 | 164,218 | ||||||||||||||||||
6.125% Notes due 2023 | 250,000 | 250,000 | ||||||||||||||||||
Subordinated debentures | 123,714 | 123,714 | ||||||||||||||||||
Secured loan agreements | 7,476 | 7,742 | ||||||||||||||||||
Promissory notes | 14,500 | 14,500 | ||||||||||||||||||
$ | 560,696 | $ | 560,174 | |||||||||||||||||
Aggregate scheduled maturities of the Company’s borrowings at March 31, 2014 are: | ||||||||||||||||||||
(Amounts in Thousands) | ||||||||||||||||||||
2014 | $ | 805 | ||||||||||||||||||
2015 | 1,116 | |||||||||||||||||||
2016 | 1,167 | |||||||||||||||||||
2017 | 1,220 | |||||||||||||||||||
2018 | 3,168 | |||||||||||||||||||
Thereafter | 553,220 | (1) | ||||||||||||||||||
(1) | Amount reflected in balance sheet for convertible senior notes is net of unamortized original issue discount of $34,994. | |||||||||||||||||||
Revolving Credit Agreement | ||||||||||||||||||||
The Company has a $200,000 credit agreement (the “Credit Agreement”), among JPMorgan Chase Bank, N.A., as Administrative Agent, KeyBank National Association and SunTrust Bank, as Co-Syndication Agents, Associated Bank, National Association and Lloyds Securities Inc., as Co-Documentation Agents and the various lending institutions party thereto. The credit facility is a revolving credit facility with a letter of credit sublimit of $100,000 and an expansion feature not to exceed $100,000. The Credit Agreement, which matures in August 2016, contains certain restrictive covenants customary for facilities of this type (subject to negotiated exceptions and baskets), including restrictions on indebtedness, liens, acquisitions and investments, restricted payments and dispositions. There are also financial covenants that require the Company to maintain a minimum consolidated net worth, a maximum consolidated leverage ratio, a minimum fixed charge coverage ratio, a minimum risk-based capital and a minimum statutory surplus. The Company was in compliance with all covenants as of March 31, 2014. | ||||||||||||||||||||
As of March 31, 2014, the Company had no outstanding borrowings under this Credit Agreement. As of March 31, 2014, the Company had outstanding letters of credit in place under this Credit Agreement for $88,469, which reduced the availability for letters of credit to $11,531, and the availability under the facility to $111,531. | ||||||||||||||||||||
Borrowings under the Credit Agreement bear interest at (x) the greatest of (a) the Administrative Agent’s prime rate, (b) the federal funds effective rate plus 0.5 percent or (c) the adjusted LIBO rate for a one month interest period on such day plus 1 percent, plus (y) a margin that is adjusted on the basis of the Company’s consolidated leverage ratio. Eurodollar borrowings under the Credit Agreement will bear interest at the adjusted LIBO rate for the interest period in effect plus a margin that is adjusted on the basis of the Company’s consolidated leverage ratio. The interest rate on the credit facility as of March 31, 2014 was 1.50%. The Company recorded total interest expense of approximately $340 and $560 for the three months ended March 31, 2014 and 2013, respectively, under revolving credit agreements. | ||||||||||||||||||||
Fees payable by the Company under the Credit Agreement include a letter of credit participation fee (which is the margin applicable to Eurodollar borrowings and was 1.50% at March 31, 2014), a letter of credit fronting fee with respect to each letter of credit (.125%) and a commitment fee on the available commitments of the lenders (a range of .20% to .30% based on the Company’s consolidated leverage ratio and was .25% at March 31, 2014). | ||||||||||||||||||||
Convertible Senior Notes | ||||||||||||||||||||
The Company has outstanding $200,000 aggregate principal amount of convertible senior notes due 2021 (the “Convertible Notes”). The Notes bear interest at a rate equal to 5.5% per year, payable semiannually in arrears on June 15th and December 15th of each year. | ||||||||||||||||||||
The Convertible Notes will mature on December 15, 2021 (the “Maturity Date”), unless earlier purchased by the Company or converted into shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”). Prior to September 15, 2021, the Convertible Notes will be convertible only upon satisfaction of certain conditions, and thereafter, at any time prior to the close of business on the second scheduled trading day immediately preceding the Maturity Date. The conversion rate at March 31, 2014 is equal to 38.2129 shares of Common Stock per $1,000 principal amount of Convertible Notes, which corresponds to a conversion price of approximately $26.17 per share of Common Stock. The conversion rate is subject to adjustment upon the occurrence of certain events as set forth in the indenture governing the Convertible Notes. Upon conversion of the Convertible Notes, the Company will, at its election, pay or deliver, as the case may be, cash, shares of Common Stock, or a combination of cash and shares of Common Stock. | ||||||||||||||||||||
Upon the occurrence of a fundamental change (as defined in the indenture governing the notes) involving the Company, holders of the Convertible Notes will have the right to require the Company to repurchase their Convertible Notes for cash, in whole or in part, at 100% of the principal amount of the Convertible Notes to be repurchased, plus any accrued and unpaid interest, if any, to, but excluding, the fundamental change purchase date. | ||||||||||||||||||||
The Company separately allocated the proceeds for the issuance of the Convertible Notes to a liability component and an equity component, which is the embedded conversion option. The equity component was reported as an adjustment to paid-in-capital, net of tax, and is reflected as an original issue discount (“OID”). The OID of $41,679 and deferred origination costs relating to the liability component of $4,750 will be amortized into interest expense over the term of the loan of the Convertible Notes. After considering the contractual interest payments and amortization of the original discount, the Convertible Notes effective interest rate was 8.57%. Transaction costs of $1,250 associated with the equity component were netted in paid-in-capital. Interest expense, including amortization of deferred origination costs, recognized on the Convertible Notes was $3,657 and $3,592 for the three months ended March 31, 2014 and 2013, respectively. | ||||||||||||||||||||
The following table shows the amounts recorded for the Convertible Notes as of March 31, 2014 and December 31, 2013: | ||||||||||||||||||||
(Amounts in Thousands) | March 31, | December 31, | ||||||||||||||||||
2014 | 2013 | |||||||||||||||||||
Liability component | ||||||||||||||||||||
Outstanding principal | $ | 200,000 | $ | 200,000 | ||||||||||||||||
Unamortized OID | (34,994 | ) | (35,782 | ) | ||||||||||||||||
Liability component | $ | 165,006 | $ | 164,218 | ||||||||||||||||
Equity component, net of tax | $ | 27,092 | $ | 27,092 | ||||||||||||||||
6.125% Notes due 2023 | ||||||||||||||||||||
In August 2013, the Company issued $250,000 aggregate principal amount of its 6.125% notes due 2023 (the "Notes") to certain initial purchasers in a private placement. The Notes bear interest at a rate equal to 6.125% per year, payable semiannually in arrears on February 15th and August 15th of each year. The Notes will mature on August 15, 2023, unless earlier purchased by the Company. Fees associated with the Notes were approximately $2,706. The indenture governing the Notes contains covenants whereby the interest rate will increase by 0.50% per year if the Company's consolidated leverage ratio exceeds 30% and does not exceed 35% and will increase an additional 1.00% per year (for an aggregate increase of 1.50% per year) if the consolidated leverage ratio exceeds 35%. The consolidated leverage ratio under this agreement was less than 30% as of March 31, 2014. It is an event of default if the Company has a consolidated leverage ratio in excess of 35% for a period of 30 days, unless in connection with an acquisition, in which case the grace period is 18 months. The indenture governing the Notes also contains certain customary covenants, such as reporting of annual and quarterly financial results, and restrictions on certain mergers and consolidations, a limitation on liens, and a limitation on the disposition of stock of certain of the Company's subsidiaries. The Notes rank equally with existing and future unsecured and unsubordinated indebtedness, including the Company's Convertible Notes and amounts under the Credit Agreement. Interest expense, including amortization of deferred origination costs, recognized on the Notes was approximately $3,897 for the three months ended March 31, 2014. | ||||||||||||||||||||
Junior Subordinated Debt | ||||||||||||||||||||
The Company has established four special purpose trusts for the purpose of issuing trust preferred securities. The proceeds from such issuances, together with the proceeds of the related issuances of common securities of the trusts, were invested by the trusts in junior subordinated debentures issued by the Company. In accordance with FASB ASC 810-10-25, the Company does not consolidate such special purpose trusts, as the Company is not considered to be the primary beneficiary. The equity investment, totaling $3,714 as of March 31, 2014 on the Company’s consolidated balance sheet, represents the Company’s ownership of common securities issued by the trusts. The debentures require interest-only payments to be made on a quarterly basis, with principal due at maturity. The debentures contain covenants that restrict declaration of dividends on the Company’s common stock under certain circumstances, including default of payment. The Company incurred $2,605 of placement fees in connection with these issuances which is being amortized over thirty years. The Company recorded $2,020 and $1,999 of interest expense for the three months ended March 31, 2014 and 2013, respectively, related to these trust preferred securities. | ||||||||||||||||||||
The table below summarizes the Company’s trust preferred securities as of March 31, 2014: | ||||||||||||||||||||
(Amounts in Thousands) | Aggregate Liquidation Amount of Trust Preferred Securities | Aggregate Liquidation Amount of Common Securities | Aggregate Principal Amount of Notes | Stated Maturity of Notes | Per Annum Interest Rate % of Notes | |||||||||||||||
Name of Trust | ||||||||||||||||||||
AmTrust Capital Financing Trust I | $ | 25,000 | $ | 774 | $ | 25,774 | 3/17/35 | 8.275 | (1 | ) | ||||||||||
AmTrust Capital Financing Trust II | 25,000 | 774 | 25,774 | 6/15/35 | 7.71 | (1 | ) | |||||||||||||
AmTrust Capital Financing Trust III | 30,000 | 928 | 30,928 | 9/15/36 | 3.533 | (2 | ) | |||||||||||||
AmTrust Capital Financing Trust IV | 40,000 | 1,238 | 41,238 | 3/15/37 | 3.233 | (3 | ) | |||||||||||||
Total trust preferred securities | $ | 120,000 | $ | 3,714 | $ | 123,714 | ||||||||||||||
-1 | The interest rate will change to three-month LIBOR plus 3.40% after the tenth anniversary in 2015. | |||||||||||||||||||
-2 | The interest rate is LIBOR plus 3.30%. | |||||||||||||||||||
-3 | The interest rate is LIBOR plus 3.00%. | |||||||||||||||||||
The Company entered into two interest rate swap agreements related to these junior subordinated debentures, which effectively convert the interest rate on the trust preferred securities from a variable rate to a fixed rate. Each agreement is for a period of five years and commenced on September 15, 2011 for tranche III and March 15, 2012 for tranche IV. | ||||||||||||||||||||
Secured Loan Agreement | ||||||||||||||||||||
The Company, through a wholly-owned subsidiary, has a seven-year secured loan agreement with Bank of America Leasing & Capital, LLC in the aggregate amount of $10,800 to finance the purchase of an aircraft. The loan bears interest at a fixed rate of 4.45%, requires monthly installment payments of approximately $117 through February 25, 2018, and a balloon payment of $3,240 at the maturity date. The Company recorded interest expense of approximately $87 and $101 for the three months ended March 31, 2014 and 2013, respectively, related to this agreement. The loan is secured by the aircraft. | ||||||||||||||||||||
The agreement contains certain covenants that are similar to the Company’s Credit Agreement. Additionally, subsequent to February 25, 2012, but prior to payment in full, if the outstanding balance of this loan exceeds 90% of the fair value of the aircraft, the Company is required to pay the lender the entire amount necessary to reduce the outstanding principal balance to be equal to or less than 90% of the fair value of the aircraft. The agreement allows the Company, under certain conditions, to repay the entire outstanding principal balance of this loan without penalty. | ||||||||||||||||||||
Promissory Notes | ||||||||||||||||||||
In September 2012, as part of its participation in the New Market Tax Credit Program discussed in Note 13. "New Market Tax Credit", the Company entered into two promissory notes totaling $8,000. The loans are for a period of 15 years and have an average interest rate of 1.7% per annum. The Company recorded interest expense of approximately $66 and $97 for the three months ended March 31, 2014 and 2013, respectively, related to the notes. Additionally, the Company recorded approximately $1,430 of deferred financing fees. | ||||||||||||||||||||
In May 2013, as part of its acquisition of Mutual Insurers Holding Company ("MIHC") as discussed in Note 12. "Acquisitions", the Company assumed two promissory notes totaling $6,500 for which the principal is due in 2034 and 2035. The notes require the payment of interest on a quarterly basis and have an interest rate of 3.8% plus the three month libor per annum, which was 4.1% as of March 31, 2014. The Company recorded $69 of interest expense related to these notes for the three months ended March 31, 2014. | ||||||||||||||||||||
Sagicor Credit Agreement | ||||||||||||||||||||
On November 26, 2013, the Company (as “Guarantor”), and two of its wholly-owned subsidiaries, AmTrust International Insurance, Ltd. (the “Account Party”) and AmTrust Corporate Capital Limited ("IGI Group") entered into a four-year, £200,000 credit facility agreement with ING Bank, N.V., London Branch, individually and as Agent and Security Trustee. The credit facility, which matures on December 31, 2017, is a letter of credit facility that is used to support the Company’s capacity at Lloyd’s as a member of Syndicates 2526, 1206 and 44 for the 2014 underwriting year of account, as well as prior open years of account. The credit facility contains customary covenants for facilities of this type, including restrictions on indebtedness and liens, limitations on mergers, transactions with affiliates and the sale of assets, and requirements to maintain certain consolidated net worth, statutory surplus, leverage and fixed charge coverage ratios. | ||||||||||||||||||||
The facility is secured by a pledge of a collateral account pursuant to a pledge and security agreement and a Deed of Charge dated November 26, 2013. At the outset, the collateral account is 50% funded. The collateral account will be required to be 100% funded upon the occurrence of certain specified events, including an event of default, the financial strength rating of the Account Party falling below A-, the forecast underwriting losses exceeding a certain level for any year supported by a letter of credit or any non-extension notice is given with respect to any letter of credit. | ||||||||||||||||||||
As of March 31, 2014, the Company had outstanding letters of credit of £194,293 (or $323,767) in place under this credit facility, which reduced the total availability under the facility to £5,707 (or $9,511). | ||||||||||||||||||||
Fees payable by the Company under the credit facility include a letter of credit issuance fee, payable quarterly in arrears, on the secured portion of the letters of credit at the rate of 0.55% and on the unsecured portion of the letters of credit determined based on the Account Party’s then-current financial strength rating issued by A.M. Best. As of March 31, 2014, the applicable letter of credit fee rate on the unsecured portion was 1.15% based on the Account Party’s A.M. Best financial strength rating of “A”. The Company also pays a commitment fee of 0.35% per year on the aggregate unutilized and uncanceled amount of the facility. | ||||||||||||||||||||
Other Letters of Credit | ||||||||||||||||||||
The Company, through one of its subsidiaries, has a secured letter of credit facility with Comerica Bank. The Company utilizes this letter of credit facility to comply with the deposit requirements of the State of California and the U.S. Department of Labor as security for the Company’s obligations to workers’ compensation and Federal Longshore and Harbor Workers’ Compensation Act policyholders. The credit limit is for $75,000, of which $48,467 was utilized as of March 31, 2014. The Company is required to pay a letter of credit participation fee for each letter of credit in the amount of 0.40%. | ||||||||||||||||||||
The Company, through certain subsidiaries, has additional existing stand-by letters of credit with various lenders in the amount of $22,210 as of March 31, 2014. |
Acquisition_Costs_and_Other_Un
Acquisition Costs and Other Underwriting Expenses | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Acquisition Costs and Other Underwriting Expenses [Abstract] | ' | ||||||||
Acquisition Costs and Other Underwriting Expenses | ' | ||||||||
Acquisition Costs and Other Underwriting Expenses | |||||||||
The following table summarizes the components of acquisition costs and other underwriting expenses for the three months ended March 31, 2014 and 2013: | |||||||||
Three Months Ended March 31, | |||||||||
(Amounts in Thousands) | 2014 | 2013 | |||||||
Policy acquisition expenses | $ | 94,251 | $ | 37,730 | |||||
Salaries and benefits | 77,855 | 45,129 | |||||||
Other insurance general and administrative expenses | 14,503 | 17,426 | |||||||
$ | 186,609 | $ | 100,285 | ||||||
Earnings_Per_Share
Earnings Per Share | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Earnings Per Share | ' | ||||||||
Earnings Per Share | |||||||||
Effective January 1, 2009, the Company adopted ASC subtopic 260-10, Determining Whether Instruments Granted in Share-Based Payments Transactions Are Participating Securities. ASC 260-10 provides that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents, whether paid or unpaid, are participating securities and are to be included in the computation of earnings per share under the two-class method. The Company’s unvested restricted shares contain rights to receive nonforfeitable dividends and are participating securities, requiring the two-class method of computing earnings per share. | |||||||||
The Company paid a ten percent stock dividend on September 4, 2013. As such, the weighted average number of shares used for basic and diluted earnings per share have been adjusted retroactively in the prior periods. | |||||||||
The following table is a summary of the elements used in calculating basic and diluted earnings per share for the three months ended March 31, 2014 and 2013: | |||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
(Amounts in Thousands, except for earnings per share) | 2014 | 2013 | |||||||
Basic earnings per share: | |||||||||
Net income attributable to AmTrust common shareholders | 99,851 | 83,878 | |||||||
Less: Net income allocated to participating securities and redeemable non-controlling interest | 216 | 319 | |||||||
Net income allocated to AmTrust common shareholders | $ | 99,635 | $ | 83,559 | |||||
Weighted average common shares outstanding – basic | 74,708 | 74,079 | |||||||
Less: Weighted average participating shares outstanding | 161 | 268 | |||||||
Weighted average common shares outstanding - basic | 74,547 | 73,811 | |||||||
Net income per AmTrust common share - basic | $ | 1.34 | $ | 1.13 | |||||
Diluted earnings per share: | |||||||||
Net income attributable to AmTrust common shareholders | $ | 99,851 | $ | 83,878 | |||||
Less: Net income allocated to participating securities and redeemable non-controlling interest | 216 | 319 | |||||||
Net income allocated to AmTrust common shareholders | $ | 99,635 | $ | 83,559 | |||||
Weighted average common shares outstanding – basic | 74,547 | 73,811 | |||||||
Plus: Dilutive effect of stock options, convertible debt, other | 3,897 | 3,514 | |||||||
Weighted average common shares outstanding – dilutive | 78,444 | 77,325 | |||||||
Net income per AmTrust common shares – diluted | $ | 1.27 | $ | 1.08 | |||||
As of March 31, 2014, there were less than 20,000 anti-dilutive securities excluded from diluted earnings per share. |
Share_Based_Compensation
Share Based Compensation | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Text Block [Abstract] | ' | |||||||||||||
Share Based Compensation | ' | |||||||||||||
Share Based Compensation | ||||||||||||||
The Company’s 2010 Omnibus Incentive Plan (the “Plan”), which permits the Company to grant to its officers, employees and non-employee directors incentive compensation directly linked to the price of the Company’s stock, authorizes up to an aggregate of 7,315,068 shares of Company stock for awards of options to purchase shares of the Company’s common stock, restricted stock, restricted stock units (“RSU”), performance shares units (“PSU”) or appreciation rights. Shares used may be either newly issued shares or treasury shares or both. The aggregate number of shares of common stock for which awards may be issued may not exceed 7,315,068 shares, subject to the authority of the Company’s board of directors to adjust this amount in the event of a consolidation, reorganization, stock dividend, stock split, recapitalization or similar transaction affecting the Company’s common stock. As of March 31, 2014, approximately 5,000,000 shares of Company common stock remained available for grants under the Plan. | ||||||||||||||
The Company recognizes compensation expense under FASB ASC 718-10-25 for its share-based payments based on the fair value of the awards. The Company grants stock options at prices equal to the closing stock price of the Company’s stock on the dates the options are granted. The options have a term of ten years from the date of grant and vest primarily in equal annual installments over the four year period following the date of grant for employee options. The Company uses the simplified method in determining the expected life. Employees have three months after the employment relationship ends to exercise all vested options. The fair value of each option grant is separately estimated for each vesting date. The fair value of each option is amortized into compensation expense on a straight-line basis between the grant date for the award and each vesting date. The Company has estimated the fair value of all stock option awards as of the date of the grant by applying the Black-Scholes-Merton multiple-option pricing valuation model. The application of this valuation model involves assumptions that are judgmental and highly sensitive in the determination of compensation expense. The Company grants restricted shares, RSUs and PSUs with a grant date value equal to the closing stock price of the Company’s stock on the dates the shares or units are granted and the restricted shares and RSUs vest over a period of two to four years, while PSUs vest based on terms of the awards. | ||||||||||||||
The Company paid a ten percent stock dividend on September 4, 2013. At the dividend date, all options outstanding were adjusted by ten percent and their respective exercise prices were reduced by ten percent, which ultimately resulted in each outstanding share having the same fair value immediately prior to and subsequent to the dividend date. Therefore, the Company did not record any additional compensation expense as a result of the stock dividend. The Company also adjusted outstanding RSUs, unvested restricted stock and PSUs, resulting in no additional compensation expense. The following information and tables below for stock options, restricted stock and RSUs have been adjusted retroactively in all periods presented. | ||||||||||||||
The following schedule shows all options granted, exercised, and expired under the Plan for the three months ended March 31, 2014 and 2013: | ||||||||||||||
2014 | 2013 | |||||||||||||
Weighted Average Exercise Price | Weighted Average Exercise Price | |||||||||||||
Shares | Shares | |||||||||||||
Outstanding at beginning of period | 2,997,460 | $ | 10.49 | 3,675,776 | $ | 9.41 | ||||||||
Granted | 27,500 | 32.49 | 11,000 | 26.71 | ||||||||||
Exercised | (229,968 | ) | 8.13 | (168,035 | ) | 7.28 | ||||||||
Cancelled or terminated | — | — | — | — | ||||||||||
Outstanding end of period | 2,794,992 | $ | 10.9 | 3,518,741 | $ | 9.57 | ||||||||
The weighted average grant date fair value of options granted during the three months ended March 31, 2014 and 2013 was approximately $14.16 and $8.91, respectively. | ||||||||||||||
A summary of the Company’s restricted stock and RSU activity for the three months ended March 31, 2014 and 2013 is shown below: | ||||||||||||||
2014 | 2013 | |||||||||||||
Weighted Average Grant Date Fair Value | Weighted Average Grant Date Fair Value | |||||||||||||
Shares or | Shares | |||||||||||||
Units | or Units | |||||||||||||
Non-vested at beginning of period | 917,015 | $ | 24.43 | 888,197 | $ | 20.86 | ||||||||
Granted | 680,842 | 37.14 | 90,146 | 31.58 | ||||||||||
Vested | (155,171 | ) | 22.65 | (131,539 | ) | 21.04 | ||||||||
Forfeited | (1,566 | ) | 24 | — | — | |||||||||
Non-vested at end of period | 1,441,120 | $ | 30.63 | 846,804 | $ | 21.97 | ||||||||
The Company has 159,713 PSUs granted as of March 31, 2014. During the three months ended March 31, 2014, 347,875 PSUs were converted to restricted share awards based on achievements of certain targets. PSUs are conditional grants of a specified maximum number of common shares. In general, grants are earned, subject to the attainment of pre-specified performance goals at the end of the pre-determined period. The fair value of these PSUs on the date of the grants was $4,687. | ||||||||||||||
Compensation expense for all share-based payments under ASC 718-10-30 was approximately $4,150 and $2,108 for the three months ended March 31, 2014 and 2013, respectively. | ||||||||||||||
The intrinsic value of stock options exercised during the three months ended March 31, 2014 and 2013 was $5,877 and $3,780, respectively. The intrinsic value of stock options that were outstanding as of March 31, 2014 and 2013 was $74,644 and $88,256, respectively. | ||||||||||||||
Cash received from options exercised was $1,558 and $975 during the three months ended March 31, 2014 and 2013, respectively. The excess tax benefit from award exercises was approximately $1,337 and $1,133, for the three months ended March 31, 2014 and 2013, respectively. |
Income_Taxes
Income Taxes | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Text Block [Abstract] | ' | ||||||||
Income Taxes | ' | ||||||||
Income Taxes | |||||||||
The following table is a reconciliation of the Company’s statutory income tax expense to its effective tax rate for the three months ended March 31, 2014 and 2013: | |||||||||
Three Months Ended March 31, | |||||||||
(Amounts in Thousands) | 2014 | 2013 | |||||||
Income before equity in earnings of unconsolidated subsidiaries | $ | 110,656 | $ | 97,560 | |||||
Tax at federal statutory rate of 35% | $ | 38,730 | $ | 34,146 | |||||
Tax effects resulting from: | |||||||||
Income (loss) of non-includible foreign subsidiaries | (48,878 | ) | (19,587 | ) | |||||
Other, net | 37,592 | 1,550 | |||||||
$ | 27,444 | $ | 16,109 | ||||||
Effective tax rate | 24.8 | % | 16.5 | % | |||||
During the fourth quarter of 2013, the Company reclassified the reduction to its Luxembourg tax liability that was previously recorded as a reduction in policy acquisition expense to a reduction in its provision for income taxes in accordance with ASC 740 Income Taxes. As a result of the reclassification, the Company reduced its income tax expense by $7,423 for the three months ended March 31, 2013, which reduced the effective tax rate by approximately 7.6%. There was no corresponding reduction in the Company's deferred tax liability during the three months ended March 31, 2014. This reduction was offset by an increase in tax expense during the three months ended March 31, 2013 of $5,872 related to the retrospective gain on acquisition of Car Care Plan (Holdings) Limited ("CCPH") of $25,532. | |||||||||
The Company’s management believes that it will realize the benefits of its deferred tax assets, which is included as a component of the Company’s net deferred tax liability, and, accordingly, no valuation allowance has been recorded for the periods presented. The earnings of certain of the Company’s foreign subsidiaries have been indefinitely reinvested in foreign operations. Therefore, no provision has been made for any U.S. taxes or foreign withholding taxes that may be applicable upon any repatriation or disposition. The determination of any unrecognized deferred tax liability for temporary differences related to investments in certain of the Company’s foreign subsidiaries is not practicable. At March 31, 2014 and December 31, 2013, the financial reporting basis in excess of the tax basis for which no deferred taxes have been recognized was approximately $444,000 and $360,000, respectively. | |||||||||
The Company’s major taxing jurisdictions include the U.S. (federal and state), the United Kingdom and Ireland. The years subject to potential audit vary depending on the tax jurisdiction. Generally, the Company’s statute of limitation is open for tax years ended December 31, 2010 and forward. As permitted by FASB ASC 740-10, the Company recognizes interest and penalties, if any, related to unrecognized tax benefits in its income tax provision. The Company has not recorded any unrecognized tax benefits or any related interest and penalties at March 31, 2014 and December 31, 2013, respectively. |
Related_Party_Transactions
Related Party Transactions | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Text Block [Abstract] | ' | ||||||||
Related Party Transactions | ' | ||||||||
Related Party Transactions | |||||||||
Maiden | |||||||||
The Company has various reinsurance and service agreements with Maiden Holdings, Ltd. (“Maiden”). Maiden is a publicly-held Bermuda insurance holding company (Nasdaq: MHLD) formed by Michael Karfunkel, George Karfunkel and Barry Zyskind, principal shareholders, and, respectively, the chairman of the board of directors, a director, and the chief executive officer and director of the Company. As of March 31, 2014, our principal shareholders, Michael Karfunkel, Leah Karfunkel (wife of Michael Karfunkel and sole trustee of the Michael Karfunkel 2005 Grantor Retained Annuity Trust), George Karfunkel and Barry Zyskind, own or control approximately 6.2%, 7.6%, 9.3% and 5.1%, respectively, of the issued and outstanding capital stock of Maiden. Mr. Zyskind serves as the non-executive chairman of the board of Maiden’s board of directors. Maiden Insurance Company, Ltd. (“Maiden Insurance”), a wholly-owned subsidiary of Maiden, is a Bermuda reinsurer. The following section describes the agreements in place between the Company and its subsidiaries and Maiden and its subsidiaries. | |||||||||
Reinsurance Agreements with Maiden Holdings, Ltd. | |||||||||
In 2007, the Company and Maiden entered into a master agreement, as amended, by which the parties caused the Company’s Bermuda subsidiary, AmTrust International Insurance, Ltd. (“AII”) and Maiden Insurance to enter into a quota share reinsurance agreement (the “Maiden Quota Share”), as amended, by which AII retrocedes to Maiden Insurance an amount equal to 40% of the premium written by the Company’s U.S., Irish and U.K. insurance companies (the “AmTrust Ceding Insurers”), net of the cost of unaffiliated inuring reinsurance (and in the case of the Company’s U.K. insurance subsidiary, AmTrust Europe Ltd. ("AEL"), net of commissions) and 40% of losses excluding certain business that the Company commenced writing after the effective date, including the Company’s European medical liability business discussed below, business assumed from Tower Group International, Ltd. pursuant to the cut-through quota share reinsurance agreement, and risks, other than workers’ compensation risks and certain business written by the Company’s Irish subsidiary, AmTrust International Underwriters Limited (“AIU”), for which the AmTrust Ceding Insurers’ net retention exceeds $5,000 (“Covered Business”). | |||||||||
On March 7, 2013, after receipt of approval from each of the Company’s and Maiden’s Audit Committee, the Company and Maiden executed an amendment to the Maiden Quota Share. The amendment provides that, effective January 1, 2013, AII receives a ceding commission of 31% of ceded written premiums with respect to all Covered Business other than retail commercial package business, for which the ceding commission remains 34.375%. With regards to the Specialty Program portion of Covered Business only, the Company will be responsible for ultimate net loss otherwise recoverable from Maiden Insurance to the extent that the loss ratio to Maiden Insurance, which shall be determined on an inception to date basis from July 1, 2007 through the date of calculation, is between 81.5% and 95% (the "Specialty Program Loss Corridor"). For the purpose of determining whether the loss ratio falls within the Specialty Program Loss Corridor, workers’ compensation business written in the Company’s Specialty Program segment from July 1, 2007 through December 31, 2012 is excluded from the loss ratio calculation. | |||||||||
The Maiden Quota Share was renewed through July 1, 2016 and will automatically renew for successive three-year terms unless either AII or Maiden Insurance notifies the other of its election not to renew not less than nine months prior to the end of any such three-year term. In addition, either party is entitled to terminate on thirty days’ notice or less upon the occurrence of certain early termination events, which include a default in payment, insolvency, change in control of AII or Maiden Insurance, run-off, or a reduction of 50% or more of the shareholders’ equity of Maiden Insurance or the combined shareholders’ equity of AII and the AmTrust Ceding Insurers. | |||||||||
Effective April 1, 2011, the Company, through its subsidiaries AEL and AIU, entered into a reinsurance agreement with Maiden Insurance by which the Company cedes to Maiden Insurance 40% of its European medical liability business, including business in force at April 1, 2011. The quota share had an initial term of one year and was renewed through March 31, 2015. The agreement can be terminated by either party on four months’ prior written notice. Maiden Insurance pays the Company a 5% ceding commission, and the Company will earn a profit commission of 50% of the amount by which the ceded loss ratio is lower than 65%. | |||||||||
The following is the effect on the Company’s results of operations for the three months ended March 31, 2014 and 2013 related to Maiden Reinsurance agreements: | |||||||||
Three Months Ended March 31, | |||||||||
(Amounts in Thousands) | 2014 | 2013 | |||||||
Results of operations: | |||||||||
Premium written – ceded | $ | (408,558 | ) | $ | (305,786 | ) | |||
Change in unearned premium – ceded | 95,890 | 78,096 | |||||||
Earned premium - ceded | $ | (312,668 | ) | $ | (227,690 | ) | |||
Ceding commission on premium written | $ | 118,340 | $ | 89,499 | |||||
Ceding commission – deferred | (30,234 | ) | (25,541 | ) | |||||
Ceding commission – earned | $ | 88,106 | $ | 63,958 | |||||
Incurred loss and loss adjustment expense – ceded | $ | 214,283 | $ | 152,965 | |||||
Note Payable to Maiden – Collateral for Proportionate Share of Reinsurance Obligations | |||||||||
In conjunction with the Maiden Quota Share, as described above, AII entered into a loan agreement with Maiden Insurance during the fourth quarter of 2007, whereby Maiden Insurance loaned to AII the amount equal to its quota share of the obligations of the AmTrust Ceding Insurers that AII was then obligated to secure. The loan agreement provides for interest at a rate of LIBOR plus 90 basis points and is payable on a quarterly basis. Advances under the loan are secured by a promissory note and totaled $167,975 as of March 31, 2014 and December 31, 2013, respectively. The Company recorded $444 and $494 of interest expense during the three months ended March 31, 2014 and 2013, respectively. Effective December 1, 2008, AII and Maiden Insurance entered into a Reinsurer Trust Assets Collateral agreement whereby Maiden Insurance is required to provide AII the assets required to secure Maiden’s proportional share of the Company’s obligations to its U.S. subsidiaries. The amount of this collateral as of March 31, 2014 was approximately $1,216,782. Maiden retains ownership of the collateral in the trust account. | |||||||||
Reinsurance Brokerage Agreement | |||||||||
Effective July 1, 2007, the Company, through a subsidiary, entered into a reinsurance brokerage agreement with Maiden. Pursuant to the brokerage agreement, the Company provides brokerage services relating to the Maiden Quota Share for a fee equal to 1.25% of reinsured premium. The Company recorded $5,020 and $3,659 of brokerage commission (recorded as a component of service and fee income) during the three months ended March 31, 2014 and 2013, respectively. | |||||||||
Asset Management Agreement | |||||||||
Effective July 1, 2007, the Company, through a subsidiary, entered into an asset management agreement with Maiden, pursuant to which the Company provides investment management services to Maiden and its affiliates. As of March 31, 2014, the Company managed approximately $3,275,164 of assets related to this agreement. The investment management services fee is an annual rate of 0.20% for periods in which average invested assets are $1,000,000 or less and an annual rate of 0.15% for periods in which the average invested assets exceeds $1,000,000. As a result of this agreement, the Company earned approximately $1,224 and $1,041 of investment management fees (recorded as a component of service and fee income) for the three months ended March 31, 2014 and 2013, respectively. | |||||||||
National General Holding Corp. | |||||||||
The Company has a 13.2% ownership interest in National General Holding Corp. (“NGHC”). NGHC is a publicly-held insurance holding company (Nasdaq: NGHC) that operates eleven insurance companies in the United States and writes consumer property and casualty insurance business through independent agents for automobiles. Its coverages include standard/preferred auto, RVs, non-standard auto and commercial auto. NGHC's two largest shareholders are the Michael Karfunkel 2005 Grantor Retained Annuity Trust (the “Trust”) and Michael Karfunkel individually. Michael Karfunkel is the chairman of the board of directors of the Company and the father-in-law of Barry D. Zyskind, the chief executive officer of the Company. The ultimate beneficiaries of the Trust include Michael Karfunkel’s children, one of whom is married to Mr. Zyskind. In addition, Michael Karfunkel is the Chairman, President and Chief Executive Offer of NGHC. In accordance with ASC 323-10-15, Investments-Equity Method and Joint Ventures, the Company accounts for its investment in NGHC under the equity method as it has the ability to exert significant influence on NGHC's operations. | |||||||||
In February 2014, NGHC issued approximately 13,600,000 shares in a follow on 144A offering, which resulted in the Company reducing its ownership percentage in NGHC from 15.4% to 13.2%. As a result of the stock issuance, the Company recognized a gain on sale of its equity investment of $14,712, which is included in equity in earnings of unconsolidated subsidiary. In total, the Company recorded $18,516 and $1,550 of income during the three months ended March 31, 2014 and 2013, respectively, related to its equity investment in NGHC. | |||||||||
Personal Lines Quota Share | |||||||||
The Company was a party to a quota share reinsurance agreement (“Personal Lines Quota Share”) with Integon National Insurance Company ("Integon"). On August 1, 2013, the Company and its wholly-owned subsidiary, Technology Insurance Company, Inc. (“TIC”), received notice from Integon that Integon was terminating, effective August 1, 2013, TIC's participation in the Personal Lines Quota Share. The termination is on a run-off basis, meaning TIC will continue to receive net premiums and assume related net losses with respect to policies in force as of July 31, 2013 through the expiration of such policies. The results of its operations from the Personal Lines Quota Share represent the Company's Personal Lines Reinsurance segment. The Company assumed $30,652 of business as a result of this agreement during the three months ended March 31, 2013. | |||||||||
Master Services Agreement | |||||||||
The Company provides NGHC and its affiliates information technology development services in connection with the development and licensing of a policy management system at a cost which is currently 1.25% of gross written premium of NGHC and its affiliates plus the Company’s costs for development and support services. In addition, the Company provides NGHC and its affiliates printing and mailing services at a per piece cost for policy and policy related materials, such as invoices, quotes, notices and endorsements, associated with the policies the Company processes for NGHC and its affiliates on the policy management system. The Company recorded approximately $5,039 and $5,376 of fee income during the three months ended March 31, 2014 and 2013, respectively, related to this agreement. | |||||||||
Asset Management Agreement | |||||||||
The Company manages the assets of NGHC and its subsidiaries for an annual fee equal to 0.20% of the average aggregate value of the assets under management for the preceding quarter if the average aggregate value for the preceding quarter is $1,000,000 or less and 0.15% of the average aggregate value of the assets under management for the preceding quarter if the average aggregate value for that quarter is more than $1,000,000. The Company managed approximately $1,119,903 of assets as of March 31, 2014 related to this agreement. As a result of this agreement, the Company earned approximately $429 and $363 of investment management fees for the three months ended March 31, 2014 and 2013, respectively. | |||||||||
As a result of the above service agreements with NGHC, the Company recorded fees totaling approximately $5,468 and $5,739 for the three months ended March 31, 2014 and 2013, respectively. As of March 31, 2014, the outstanding balance payable by NGHC related to these service fees and reimbursable costs was approximately $11,958. | |||||||||
800 Superior | |||||||||
In August 2011, the Company formed 800 Superior, LLC with a subsidiary of NGHC for the purposes of acquiring an office building in Cleveland, Ohio. The Company and NGHC each have a fifty percent ownership interest in 800 Superior, LLC. The cost of the building was approximately $7,500. The Company has been appointed managing member of the LLC. Additionally, in conjunction with the Company’s 13.2% ownership percentage of NGHC, the Company ultimately receives 57.7% of the profits and losses of the LLC. As such, in accordance with ASC 810-10, Consolidation, the Company has been deemed the primary beneficiary and, therefore, consolidates this entity. | |||||||||
Additionally in 2012, NGHC entered into an office lease with 800 Superior, LLC for approximately 134,000 square feet. The lease period is for fifteen years and NGHC paid 800 Superior, LLC $402 and $536 for the three months ended March 31, 2014 and 2013, respectively. As discussed in Note 13. "New Market Tax Credit," 800 Superior, LLC, the Company and NGHC participated in a financing transaction related to capital improvements on the office building. As part of that transaction, NGHC and the Company entered into an agreement related to the payment and performance guaranties provided by the Company to the various parties to the financing transaction whereby NGHC has agreed to contribute 50% toward any payments the Company is required to make pursuant to the guaranties. | |||||||||
ACP Re, Ltd. | |||||||||
The Company has service and quota share agreements with ACP Re, Ltd. (“ACP Re”). ACP Re is a privately-held Bermuda reinsurance holding company formed by Michael Karfunkel, the chairman of the board of the Company. The following section describes the agreements in place between the Company and its subsidiaries and ACP Re and its subsidiaries. | |||||||||
Asset Management Agreement | |||||||||
The Company provides investment management services to ACP Re at (i) an annual rate of 0.20% of the average value of ACP Re’s invested assets, excluding investment in AmTrust stock, for the preceding calendar quarter if the average value of such assets for the quarter was $1,000,000 or less, or (ii) an annual rate of 0.15% of the average value of ACP Re’s invested assets, excluding investment in AmTrust stock, for the preceding calendar quarter if the average value of such assets for the quarter was greater than $1,000,000. The Company managed approximately $106,689 of assets as of March 31, 2014. The Company recorded approximately $55 and $52 for these services for the three months ended March 31, 2014 and 2013, respectively. | |||||||||
Reinsurance Agreements and Assumption of Premium from Tower | |||||||||
In January 2014, ACP Re, through a subsidiary, agreed to acquire 100% of the outstanding stock of Tower Group International, Ltd. (“Tower”) and merge with Tower (the “Merger”). In connection with the Merger, the Company and ACP Re entered into a Commercial Lines Stock and Asset Purchase Agreement dated January 3, 2014 (the “CL SPA”) by which the Company agreed to purchase from ACP Re the renewal rights and certain other assets related to Tower’s commercial lines insurance operations (“Commercial Lines Assets”), including certain of Tower’s U.S. domiciled insurance companies, for a purchase price equal to the tangible book value of the companies, which was expected to be $125,000. | |||||||||
In connection with its entry into the CL SPA with the Company, ACP Re entered into a Personal Lines Stock and Asset Purchase Agreement dated January 3, 2014 (the “PL SPA”) with NGHC, by which NGHC agreed to purchase from ACP Re the renewal rights and certain other assets related to Tower’s personal lines insurance operations (“Personal Lines Assets”), including certain of Tower’s U.S. domiciled insurance companies, for a purchase price equal to the tangible book value of the companies, which also was expected to be $125,000. | |||||||||
The Merger is subject to shareholder and regulatory approval and the acquisition of Tower’s insurance companies by the Company and NGHC pursuant to the CL SPA and PL SPA also requires regulatory approval. Upon announcement of the Merger and the execution of the CL SPA and PL SPA, the Company, NGHC and ACP Re entered into discussions with Tower’s U.S. and Bermuda insurance regulators regarding the overall plan for the administration of the run-off of Tower’s business as of the closing of the Merger and the Company’s and NGHC’s acquisition of the Commercial Lines Assets and Personal Lines Assets going forward. Based on these discussions, the Company, NGHC and ACP Re determined that the best way to structure the transaction would be for Tower to retain ownership of all its U.S. insurance companies and for the Company and NGHC, respectively, to (i) acquire the Commercial Lines Assets and the Personal Lines Assets; (ii) administer the run-off of Tower’s historical commercial lines claims and personal lines claims at cost, (iii) in their discretion, place commercial lines business and personal lines business with the Tower insurance companies, which they will exclusively manage and fully reinsure for a net 2% ceding fee payable to the Tower insurance companies, (iv) retain the expirations on all business written by the Tower insurance companies through the Company and NGHC, as managers, and (v) receive the agreement of the Tower insurance companies and ACP Re not to compete with respect to the commercial lines business and personal lines business (the “Revised Plan”). | |||||||||
In connection with the Revised Plan, the Company and NGHC expect to provide ACP Re with financing in an aggregate principal amount of up to $125,000 each, subject to terms to be negotiated, but that will have a term of no shorter than seven years and pay a market interest rate. In addition, the Company and NGHC will issue a $250,000 aggregate stop loss reinsurance agreement to Tower by which each, as reinsurers, will provide, severally, $125,000 of stop loss coverage. ACP Re will fully reinsure the Company and NGHC for any payments made by the Company and NGHC pursuant to the stop loss agreement. The stop loss coverage will attach in the event that paid losses and paid loss adjustment expenses by the Tower insurance companies exceed Tower’s reserves as of the closing of the Merger. | |||||||||
Pursuant to the foregoing, the Company, on April 8, 2014, terminated the CL SPA and entered into a Commercial Lines Master Agreement with ACP Re (the “Master Agreement”), which provides for the implementation of the Revised Plan and the Company's acquisition of the Commercial Line Assets through the entry of the following agreements, subject to regulatory approval and the consummation of the Merger: | |||||||||
• | the instrument by which the Company will provide financing to ACP Re in the aggregate principal amount of up to $125,000; | ||||||||
• | the Company, through a subsidiary, will enter into an administrative services agreement with ACP Re to manage and administer the runoff of commercial lines claims and policies written by the Tower insurance companies prior to the Merger; | ||||||||
• | the Company, or one of its subsidiaries, will enter into a commercial lines managing general agent agreement with ACP Re to manage and administer the ongoing commercial lines policies after the Merger; | ||||||||
• | the Company, through one of its insurance subsidiaries, will enter into a 100% quota share reinsurance agreement with ACP Re to reinsure the net retained business written post-closing by the Tower insurance companies pursuant to the commercial lines managing general agent agreement; | ||||||||
• | the Company, along with NGHC, as reinsurers, will enter into a $250,000 aggregate stop loss reinsurance agreement with a subsidiary of Tower and ACP Re will enter into a reinsurance agreement by which it reinsures the full amount of any payments that the Company and NGHC would be obligated to pay under the aggregate stop loss reinsurance agreement; and | ||||||||
• | the Company, through a subsidiary, will enter into an investment management agreement with ACP Re to provide investment management services to the Tower insurance companies. | ||||||||
The transaction remains subject to regulatory approval and the consummation of the Merger. There is no assurance that modifications to the terms of the transaction described above will not need to be made in order to obtain regulatory approval. | |||||||||
Lease Agreements | |||||||||
The Company has an office lease for its office space at 59 Maiden Lane in New York, New York from 59 Maiden Lane Associates, LLC, an entity that is wholly-owned by Michael Karfunkel and George Karfunkel. The Company currently leases 39,992 square feet of office space and the lease term is through May 2023. During the three months ended March 31, 2013, the Company leased 14,807 square feet of office space in the same building. The Company paid approximately $467 and $201 for the leased office space for the three months ended March 31, 2014 and 2013, respectively. | |||||||||
In November 2012, the Company entered into an agreement for its office space in Chicago, Illinois. The lease is with 135 LaSalle Property, LLC, an entity that is wholly-owned by entities controlled by Michael Karfunkel and George Karfunkel. The lease term is through November 30, 2022. The Company paid approximately $111 and $144 for this lease for the three months ended March 31, 2014 and 2013, respectively. | |||||||||
Use of the Company Aircraft | |||||||||
The Company’s wholly-owned subsidiary, AmTrust Underwriters, Inc. (“AUI”), is a party to an aircraft time share agreement with each of Maiden and NGHC. The agreements provide for payment to AUI for usage of its company-owned aircraft and covers actual expenses incurred and permissible under federal aviation regulations, including travel and lodging expenses of the crew, in-flight catering, flight planning and weather contract services, ground transportation, fuel, landing and hanger fees, airport taxes, among others. AUI does not charge Maiden or NGHC for the fixed costs that would be incurred in any event to operate the aircraft (for example, aircraft purchase costs, insurance and flight crew salaries). During the three months ended March 31, 2014, Maiden and NGHC paid AUI $0 and $84, respectively, for the use of AUI’s aircraft under these agreements. Neither Maiden or NGHC used the aircraft during the three months ended March 31, 2013, and, as a result, no payments were made to AUI under these agreements. | |||||||||
In addition, for personal travel, Mr. Zyskind, the Company’s President and Chief Executive Officer and Michael Karfunkel, the Chairman of the Board, each entered into an aircraft reimbursement agreement with AUI and, since entering into such agreement, have fully reimbursed AUI for the incremental cost billed by AUI for their personal use of AUI’s aircraft. Mr. Zyskind reimbursed the Company $54 for his personal use of AUI's aircraft during the three months ended March 31, 2014. Mr. Zyskind did not use the aircraft for personal purposes during the three months ended March 31, 2013. Mr. Karfunkel did not use the aircraft for personal purposes during the three months ended March 31, 2014 and 2013, respectively. |
Acquisitions
Acquisitions | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
Text Block [Abstract] | ' | ||||
Acquisitions | ' | ||||
Acquisitions | |||||
The Insco Dico Group | |||||
On January 3, 2014, the Company completed the acquisition of The Insco Dico Group ("Insco Dico") and its subsidiaries for a purchase price of approximately $88,700. The transaction was funded with the Company's existing working capital. Insco Dico's subsidiaries include Developers Surety and Indemnity Company and Indemnity Company of California, which offer surety insurance to developers and contractors in all 50 states with California as the largest state. In addition, Insco Dico's subsidiary, Builders Insurance Services, markets general liability insurance policies to contractors in several states in the western region of the U.S. | |||||
A summary of the preliminary assets acquired and liabilities assumed for Insco Dico are as follows: | |||||
(Amounts in Thousands) | |||||
Assets | |||||
Cash and investments | $ | 130,031 | |||
Premium receivables | 8,484 | ||||
Reinsurance recoverable | 5,799 | ||||
Other assets | 1,784 | ||||
Property and equipment | 1,190 | ||||
Goodwill and intangible assets | 19,452 | ||||
Total assets | $ | 166,740 | |||
Liabilities | |||||
Unearned premiums | $ | 25,715 | |||
Loss and loss expense reserves | 25,210 | ||||
Accrued liabilities | 10,210 | ||||
Notes payable | 10,000 | ||||
Funds held for policyholders | 5,864 | ||||
Deferred tax liability | 1,041 | ||||
Total liabilities | $ | 78,040 | |||
Cash paid | $ | 88,700 | |||
As a result of this transaction, the Company recorded approximately $13,087 of written premium and $359 of fee income during the three months ended March 31, 2014 related to Insco Dico. The goodwill and intangible assets, as well as Insco Dico's results of operations, are included as a component of the Small Commercial Business segment. The Company is in the process of completing its acquisition accounting and expects to have it completed in 2014. | |||||
Sagicor Europe Limited | |||||
On December 23, 2013, the Company, through one of its subsidiaries, completed the acquisition of Sagicor Europe Limited and its wholly owned subsidiaries, including Sagicor at Lloyd's Limited (collectively "Sagicor"), from Sagicor Financial Corporation for approximately $93,113. Sagicor of Lloyd's Limited is a managing agency and owner of Lloyd's property/casualty insurance syndicate 1206 with stamp capacity of $330,000 and Lloyd's life insurance syndicate 44 with stamp capacity of $16,500. | |||||
A summary of the preliminary assets acquired and liabilities assumed for Sagicor are as follows: | |||||
(Amounts in Thousands) | |||||
Assets | |||||
Cash and investments | $ | 429,476 | |||
Prepaid insurance | 122,673 | ||||
Premium receivables | 89,801 | ||||
Other receivable | 54,479 | ||||
Deferred tax asset | 29,916 | ||||
Other assets | 10,502 | ||||
Property and equipment | 5,010 | ||||
Goodwill and intangible assets | 33,539 | ||||
Total assets | $ | 775,396 | |||
Liabilities | |||||
Loss and loss expense reserves | $ | 496,836 | |||
Unearned premium | 113,182 | ||||
Accrued expense and other liabilities | 55,950 | ||||
Ceded reinsurance | 16,315 | ||||
Total liabilities | $ | 682,283 | |||
Cash paid | $ | 93,113 | |||
The goodwill and intangible assets, as well as Sagicor's results of operations, are included as a component of the Specialty Risk and Extended Warranty segment. The Company is in the process of completing its acquisition accounting and expects to have it completed in 2014. | |||||
As a result of this transaction, the Company recorded approximately $83,315 of written premium for the three months ended March 31, 2014 related to Sagicor. | |||||
Mutual Insurers Holding Company | |||||
On May 13, 2013, the Company completed the acquisition of Mutual Insurers Holding Company (“MIHC”) and its subsidiaries. MIHC's primary operating subsidiary, First Nonprofit Insurance Company ("FNIC"), is the third largest provider of property and casualty insurance products to nonprofit organizations in the U.S. Immediately prior to the acquisition, MIHC converted from a mutual form to a stock form of ownership in a transaction “sponsored” by the Company. As required by the plan of conversion and applicable Delaware law, the Company offered shares of its common stock, at a discount to the market price, to the members of MIHC who held policies as of December 31, 2012 and the directors, officers and employees of MIHC and its subsidiaries. The Company received subscriptions for approximately $472, resulting in the issuance by the Company of 18 shares of its common stock at a discounted price of 20.0% from the Company's market trading price, or approximately $118. Pursuant to the stock purchase agreement, after the expiration of the offering, the Company purchased all of the authorized shares of capital stock of MIHC at a purchase price equal to the greater of the gross proceeds received by the Company in the offering, and $8,000. The Company made a payment to MIHC of $48,500, which included the $472 in proceeds the Company received in the offering, for the stock of FNIC. Additionally, the Company as part of the transaction, was required to make a contribution to First Nonprofit Foundation, a tax exempt corporation principally funded by FNIC's predecessor and managed for the benefit of nonprofit organizations, in the amount of $7,882, which represented $8,000, as discussed above, less the discount of approximately $118 on the shares issued by the Company in the transaction. The remaining $40,618 of cash contributed to MIHC was retained by the Company. Additionally, the Company assumed $6,500 of debt in the transaction. In accordance with FASB ASC 805-10 Business Combinations, the Company recorded an acquisition price of approximately $14,500. | |||||
A summary of the assets acquired and liabilities assumed for MIHC are as follows: | |||||
(Amounts in Thousands) | |||||
Assets | |||||
Cash and investments | $ | 134,780 | |||
Premium receivables | 23,085 | ||||
Other assets | 43,714 | ||||
Deferred tax asset | 5,358 | ||||
Property and equipment | 2,684 | ||||
Intangible assets | 6,132 | ||||
Total assets | $ | 215,753 | |||
Liabilities | |||||
Loss and loss expense reserves | $ | 89,267 | |||
Unearned premium | 27,760 | ||||
Accrued liabilities | 23,629 | ||||
Deferred tax liability | 1,586 | ||||
Notes payable | 6,500 | ||||
Total liabilities | $ | 148,742 | |||
Cash paid | $ | 48,500 | |||
Acquisition gain | $ | 18,511 | |||
The intangible assets acquired consisted of state licenses and have an indefinite life. The intangible assets, as well as FNIC's results of operations, are included as a component of the Small Commercial Business segment. | |||||
In accordance with FASB ASC 944-805 Business Combinations, the Company adjusted to fair value FNIC's loss and LAE reserves by taking the acquired loss reserves recorded and discounting them based on expected reserve payout pattern using a current risk free rate. This risk free interest rate was then adjusted based on different cash flow scenarios that use different payout and ultimate reserve assumptions deemed to be reasonably possible based upon the inherent uncertainties present in determining the amount and timing of payment of such reserves. The difference between the acquired loss and LAE reserves and the Company's best estimate of the fair value of such reserves at acquisition date is amortized ratably over the payout period of the acquired loss and LAE reserves and was approximately $4,531. As a result of this transaction, the Company recorded a preliminary acquisition gain of approximately $18,511. The Company anticipates completing its acquisition accounting during the second quarter of 2014. | |||||
During the three months ended March 31, 2014, the Company recorded approximately $19,391 of written premium related to MIHC. | |||||
AMTCS Holdings, Inc. | |||||
On May 3, 2013, the Company, through its wholly-owned subsidiary AMT Warranty Corp., completed the acquisition of CPPNA Holdings, Inc. (“CPPNA”) from CPP Group LLC, a company based in the United Kingdom, for approximately $40,000. CPPNA subsequently changed its name to AMTCS Holdings, Inc. ("AMTCS"). AMTCS provides administrative services for consumer protection products in the United States, including identity theft protection and warranties related to credit card purchases, to customers of AMTCS's financial services partners. | |||||
In accordance with FASB ASC 805-10 Business Combinations, the Company recorded a purchase price of approximately $40,000, which consisted primarily of goodwill and intangible assets of approximately $17,327 and $34,700, respectively, and a deferred tax liability of $12,145. The intangible asset consists of customer relationships and has a life of 12 years. The goodwill and intangibles, as well as AMTCS's results of operations, are included as a component of the Specialty Risk and Extended Warranty segment. The Company finalized its acquisition accounting during the three months ended March 31, 2014. | |||||
The Company recorded approximately $15,263 of fee income during the three months ended March 31, 2014 related to AMTCS. | |||||
Sequoia Insurance Company | |||||
On April 19, 2013, the Company completed the acquisition of all the issued and outstanding shares of common stock of Sequoia Insurance Company and its subsidiaries, Sequoia Indemnity Company and Personal Express Insurance Company (“Sequoia”) for approximately $60,000. Sequoia offers low hazard, property/casualty insurance products, including workers' compensation and commercial package insurance, to small businesses in several western states, with California representing Sequoia's largest market. | |||||
A summary of the assets acquired and liabilities assumed for Sequoia are as follows: | |||||
(Amounts in Thousands) | |||||
Assets | |||||
Cash and investments | $ | 215,473 | |||
Premium receivables | 32,870 | ||||
Reinsurance recoverables | 43,793 | ||||
Other assets | 4,014 | ||||
Deferred tax asset | 7,780 | ||||
Property and equipment | 1,022 | ||||
Intangible assets | 11,848 | ||||
Total assets | $ | 316,800 | |||
Liabilities | |||||
Loss and loss expense reserves | $ | 165,487 | |||
Unearned premium | 59,773 | ||||
Accrued liabilities | 15,624 | ||||
Deferred tax liability | 2,607 | ||||
Total liabilities | $ | 243,491 | |||
Purchase price | $ | 60,000 | |||
Acquisition gain | $ | 13,309 | |||
The intangible assets consists primarily of licenses and trademarks and have an indefinite life. The intangible assets, as well as Sequoia's results of operations, are included as a component of the Small Commercial Business segment. | |||||
In accordance with FASB ASC 944-805 Business Combinations, the Company adjusted to fair value Sequoia's loss and LAE reserves by taking the acquired loss reserves recorded and discounting them based on expected reserve payout pattern using a current risk free rate. This risk free interest rate was then adjusted based on different cash flow scenarios that use different payout and ultimate reserve assumptions deemed to be reasonably possible based upon the inherent uncertainties present in determining the amount and timing of payment of such reserves. The difference between the acquired loss and LAE reserves and the Company's best estimate of the fair value of such reserves at acquisition date is amortized ratably over the payout period of the acquired loss and LAE reserves and was approximately $7,448. As a result of this transaction, the Company recognized a gain on the acquisition of approximately $13,309. The Company anticipates completing its acquisition accounting during the three months ended June 30, 2014. | |||||
The Company recorded approximately $22,833 of written premium during the three months ended March 31, 2014 related to Sequoia. | |||||
Car Care | |||||
On February 28, 2013, the Company, through its wholly-owned subsidiary IGI Group Limited, acquired all of the issued and outstanding shares of capital stock of Car Care Plan (Holdings) Limited ("CCPH") from Ally Insurance Holdings, Inc ("AIH"). CCPH is an administrator, insurer and provider of auto extended warranty, guaranteed asset protection (GAP), Wholesale Floorplan Insurance and other complementary insurance products. CCPH underwrites its products and the products of third-party administrators through its subsidiary Motors Insurance Company Limited, a UK insurer authorized by the Financial Services Authority. CCPH has operations in the United Kingdom, Europe, China, North America and Latin America. The Company paid $72,412 for the purchase of CCPH. | |||||
Certain employees, former employees and retirees of CCPH participate in a defined benefit pension plan. The plan was frozen and curtailed in 2007. The impact of the plan on the Company's results of operations was immaterial. | |||||
The Company recorded approximately $34,337 of goodwill and intangible assets, which related to dealer relationships, trademarks and non-compete agreements as well as a gain on the acquisition of approximately $25,532. The goodwill and intangible assets, as well as the operating results of CCPH, are included as a component of the Specialty Risk and Extended Warranty segment. | |||||
As a result of this transaction, the Company recorded approximately $30,580 and $9,031 of written premium during the three months ended March 31, 2014 and 2013, respectively. Additionally, the Company recorded approximately $10,357 and $3,086 of fee income for the three months ended March 31, 2014 and 2013, respectively, related to CCPH. |
New_Market_Tax_Credit
New Market Tax Credit | 3 Months Ended |
Mar. 31, 2014 | |
New Market Tax Credit [Abstract] | ' |
New Market Tax Credit | ' |
New Market Tax Credit | |
In September 2012, the Company's subsidiary, 800 Superior, LLC (an entity owned equally by the Company and NGHC) received $19,400 in net proceeds from a financing transaction the Company and NGHC entered into with Key Community Development Corporation (“KCDC”) related to a capital improvement project for an office building in Cleveland, Ohio owned by 800 Superior, LLC. The Company, NGHC and KCDC collectively made capital contributions (net of allocation fees) and loans to 800 Superior NMTC Investment Fund II LLC and 800 Superior NMTC Investment Fund I LLC (collectively, the “Investment Funds”) under a qualified New Markets Tax Credit (“NMTC”) program. The NMTC program was provided for in the Community Renewal Tax Relief Act of 2000 (the “Act”) and is intended to induce capital investment in qualified lower income communities. The Act permits taxpayers to claim credits against their federal income taxes for up to 39% of qualified investments in the equity of community development entities (“CDEs”). CDEs are privately managed investment institutions that are certified to make qualified low-income community investments (“QLICIs”). | |
In addition to the capital contributions and loans from the Company, NGHC and KCDC, as part of the transaction, the Investment Funds received, directly and indirectly, proceeds of approximately $8,000 from two loans originating from state and local governments of Ohio. These loans are each for a period of 15 years and have an average interest rate of 1.7% per annum. | |
The Investment Funds then contributed the loan proceeds and capital contributions of $19,400 to two CDEs, which, in turn, loaned the funds on similar terms to 800 Superior, LLC. The proceeds of the loans from the CDEs (including loans representing the capital contribution made by KCDC, net of allocation fees) will be used to fund the capital improvement project. As collateral for these loans, the Company has granted a security interest in the assets acquired with the loan proceeds. | |
The Company and NGHC are each entitled to receive an equal portion of 49% of the benefits derived from the NMTCs generated by 800 Superior Investment Fund II LLC, while KCDC is entitled to the remaining 51%. The NMTC is subject to 100% recapture for a period of 7 years as provided in the Internal Revenue Code. During this seven-year compliance period, the entities involved are required to be in compliance with various regulations and contractual provisions that apply to the NMTC arrangement. Non-compliance with applicable requirements could result in the projected tax benefits not being realized and, therefore, could require the Company to indemnify KCDC for any loss or recapture of NMTCs related to the financing until such time as the obligation to deliver tax benefits is relieved. The Company does not anticipate any credit recaptures will be required in connection with this arrangement. In addition, this transaction includes a put/call provision whereby the Company may be obligated or entitled to repurchase KCDC's interest in the Investment Funds in September 2019 at the end of the recapture period. The Company believes that KCDC will exercise its put option and, therefore, attributed an insignificant value to the put/call. | |
The Company has determined that the Investment Funds are variable interest entities (“VIEs”). The ongoing activities of the Investment Funds - collecting and remitting interest and fees and NMTC compliance - were all considered in the initial design and are not expected to significantly affect economic performance throughout the life of the Investment Funds. When determining whether to consolidate the Investment Funds, Company management considered the contractual arrangements that obligate it to deliver tax benefits and provide various other guarantees to the structure, KCDC's lack of a material interest in the underlying economics of the project, and the fact that the Company is obligated to absorb losses of the Investment Funds. Also, the Company has a 13.2% ownership in NGHC which was reduced from 15.40% as a result of the 144A stock offering by NGHC in February of 2014. The Company concluded that it was the primary beneficiary and consolidated the Investment Funds, as VIEs, in accordance with the accounting standard for consolidation. KCDC's contribution, net of syndication fees, is included as accrued liability in the accompanying condensed consolidated balance sheets. Direct costs incurred in structuring the financing arrangement are deferred and will be recognized as expense over the term of the loans. Incremental costs to maintain the structure during the compliance period are recognized as incurred. |
Shareholder_Equity_and_Accumul
Shareholder Equity and Accumulated Other Comprehensive Income (Loss) | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||
Equity [Abstract] | ' | ||||||||||||||||||||||||
Shareholder Equity and Accumulated Other Comprehensive Income (Loss) | ' | ||||||||||||||||||||||||
Stockholder Equity and Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||||||||
The following table summarizes the ownership components of total stockholders' equity for the three months ended March 31, 2014 and 2013: | |||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
(Amounts in Thousands) | AmTrust | Non-Controlling Interest | Total | AmTrust | Non-Controlling Interest | Total | |||||||||||||||||||
Beginning Balance | $ | 1,449,643 | $ | 137,860 | $ | 1,587,503 | $ | 1,144,121 | $ | 103,344 | $ | 1,247,465 | |||||||||||||
Net income (loss) | 101,792 | (64 | ) | 101,728 | 83,878 | (877 | ) | 83,001 | |||||||||||||||||
Unrealized holding (loss) gain | 40,873 | — | 40,873 | (15,286 | ) | — | (15,286 | ) | |||||||||||||||||
Reclassification adjustment | (1,945 | ) | — | (1,945 | ) | 3,536 | — | 3,536 | |||||||||||||||||
Foreign currency translation | 1,515 | — | 1,515 | (15,731 | ) | — | (15,731 | ) | |||||||||||||||||
Unrealized gain on interest rate swap | 192 | — | 192 | 220 | — | 220 | |||||||||||||||||||
Share exercises, compensation and other | 5,708 | — | 5,708 | 3,083 | — | 3,083 | |||||||||||||||||||
Common share dividends | (15,064 | ) | — | (15,064 | ) | (9,430 | ) | — | (9,430 | ) | |||||||||||||||
Preferred stock dividends | (1,941 | ) | — | (1,941 | ) | — | — | — | |||||||||||||||||
Capital contribution | — | 1,765 | 1,765 | — | 2,209 | 2,209 | |||||||||||||||||||
Ending Balance | $ | 1,580,773 | $ | 139,561 | $ | 1,720,334 | $ | 1,194,391 | $ | 104,676 | $ | 1,299,067 | |||||||||||||
The following table summarizes Accumulated Other Comprehensive Income (Loss) for the three month periods ended March 31, 2014 and 2013: | |||||||||||||||||||||||||
(Amounts in Thousands) | Foreign Currency Items | Unrealized Gains (Losses) on Investments | Interest Rate Swap Hedge | Net Benefit Plan Assets and Obligations Recognized in Stockholders' Equity | Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||
Balance December 31, 2013 | $ | 2,582 | $ | (7,023 | ) | $ | (1,985 | ) | $ | (1,738 | ) | $ | (8,164 | ) | |||||||||||
Other comprehensive income before reclassification | 2,331 | 62,881 | 295 | — | 65,507 | ||||||||||||||||||||
Amounts reclassed from accumulated other comprehensive income | — | (2,992 | ) | — | — | (2,992 | ) | ||||||||||||||||||
Income tax expense | (816 | ) | (20,961 | ) | (103 | ) | — | (21,880 | ) | ||||||||||||||||
Net current-period other comprehensive income | 1,515 | 38,928 | 192 | — | 40,635 | ||||||||||||||||||||
Balance, March 31, 2014 | $ | 4,097 | $ | 31,905 | $ | (1,793 | ) | $ | (1,738 | ) | $ | 32,471 | |||||||||||||
Balance December 31, 2012 | $ | (10,361 | ) | $ | 77,605 | $ | (3,013 | ) | $ | — | $ | 64,231 | |||||||||||||
Other comprehensive income before reclassification | (24,201 | ) | (23,517 | ) | 338 | — | (47,380 | ) | |||||||||||||||||
Amounts reclassed from accumulated other comprehensive income | — | 5,440 | — | — | 5,440 | ||||||||||||||||||||
Income tax benefit (expense) | 8,470 | 6,327 | (118 | ) | — | 14,679 | |||||||||||||||||||
Net current-period other comprehensive income (loss) | (15,731 | ) | (11,750 | ) | 220 | — | (27,261 | ) | |||||||||||||||||
Balance, March 31, 2013 | $ | (26,092 | ) | $ | 65,855 | $ | (2,793 | ) | $ | — | $ | 36,970 | |||||||||||||
Contingent_Liabilities
Contingent Liabilities | 3 Months Ended |
Mar. 31, 2014 | |
Text Block [Abstract] | ' |
Contingent Liabilities | ' |
Contingent Liabilities | |
Litigation | |
From time to time, the Company is subject to routine legal proceedings, including arbitrations, arising in the ordinary course of business. The Company’s insurance subsidiaries are named as defendants in various legal actions arising principally from claims made under insurance policies and contracts. Those actions are considered by the Company in estimating the loss and LAE reserves. The Company’s management believes the resolution of those actions will not have a material adverse effect on the Company’s financial position or results of operations. |
Segments
Segments | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||
Text Block [Abstract] | ' | ||||||||||||||||||||||||
Segments | ' | ||||||||||||||||||||||||
Segments | |||||||||||||||||||||||||
The Company currently operates three business segments, Small Commercial Business; Specialty Risk and Extended Warranty and Specialty Program. The Company's Personal Lines Reinsurance segment is in run-off due to the termination of Personal Lines Quota Share in August 2013. The “Corporate & Other” segment represents the activities of the holding company as well as a portion of service and fee revenue. In determining total assets (excluding cash and invested assets) by segment, the Company identifies those assets that are attributable to a particular segment such as deferred acquisition cost, reinsurance recoverable, goodwill, intangible assets and prepaid reinsurance while the remaining assets are allocated based on gross written premium by segment. In determining cash and invested assets by segment, the Company matches certain identifiable liabilities such as unearned premium and loss and loss adjustment expense reserves by segment. The remaining cash and invested assets are then allocated based on gross written premium by segment. Investment income and realized gains (losses) are determined by calculating an overall annual return on cash and invested assets and applying that overall return to the cash and invested assets by segment. Ceding commission revenue is allocated to each segment based on that segment’s proportionate share of the Company’s overall acquisition costs. Interest expense is allocated based on gross written premium by segment. Income taxes are allocated on a pro-rata basis based on the Company’s effective tax rate. Additionally, management reviews the performance of underwriting income in assessing the performance of and making decisions regarding the allocation of resources to the segments. Underwriting income excludes, primarily, service and fee revenue, investment income and other revenues, other expenses, interest expense and income taxes. Management believes that providing this information in this manner is essential to providing Company’s shareholders with an understanding of the Company’s business and operating performance. | |||||||||||||||||||||||||
The following tables summarize the results of operations of the business segments for the three months ended March 31, 2014 and 2013: | |||||||||||||||||||||||||
(Amounts in Thousands) | Small Commercial Business | Specialty Risk and Extended Warranty | Specialty Program | Personal Lines Reinsurance - Run off | Corporate and Other | Total | |||||||||||||||||||
Three months ended March 31, 2014: | |||||||||||||||||||||||||
Gross written premium | $ | 938,927 | $ | 447,203 | $ | 280,066 | $ | — | $ | — | $ | 1,666,196 | |||||||||||||
Net written premium | 650,716 | 281,115 | 198,450 | — | — | 1,130,281 | |||||||||||||||||||
Change in unearned premium | (270,312 | ) | (9,600 | ) | (27,610 | ) | 6,292 | — | (301,230 | ) | |||||||||||||||
Net earned premium | 380,404 | 271,515 | 170,840 | 6,292 | — | 829,051 | |||||||||||||||||||
Loss and loss adjustment expense | (255,122 | ) | (183,120 | ) | (116,160 | ) | (4,168 | ) | — | (558,570 | ) | ||||||||||||||
Acquisition costs and other underwriting expenses | (88,028 | ) | (52,865 | ) | (43,886 | ) | (1,830 | ) | — | (186,609 | ) | ||||||||||||||
(343,150 | ) | (235,985 | ) | (160,046 | ) | (5,998 | ) | — | (745,179 | ) | |||||||||||||||
Underwriting income | 37,254 | 35,530 | 10,794 | 294 | — | 83,872 | |||||||||||||||||||
Service and fee income | 22,103 | 56,225 | 150 | — | 12,480 | 90,958 | |||||||||||||||||||
Investment income and realized gain | 13,644 | 14,105 | 6,054 | 163 | — | 33,966 | |||||||||||||||||||
Other expenses | (49,359 | ) | (23,509 | ) | (14,723 | ) | — | — | (87,591 | ) | |||||||||||||||
Interest expense | (6,479 | ) | (3,086 | ) | (1,932 | ) | — | — | (11,497 | ) | |||||||||||||||
Foreign currency loss | — | (1,852 | ) | — | — | — | (1,852 | ) | |||||||||||||||||
Gain on life settlement contracts | 1,577 | 752 | 471 | — | — | 2,800 | |||||||||||||||||||
Provision for income taxes | (3,982 | ) | (16,607 | ) | (173 | ) | (97 | ) | (6,585 | ) | (27,444 | ) | |||||||||||||
Equity in earnings of unconsolidated subsidiary – related party | — | — | — | — | 18,516 | 18,516 | |||||||||||||||||||
Net income attributable to AmTrust Financial Services, Inc. | $ | 14,758 | $ | 61,558 | $ | 641 | $ | 360 | $ | 24,411 | $ | 101,728 | |||||||||||||
(Amounts in Thousands) | Small Commercial Business | Specialty Risk and Extended Warranty | Specialty Program | Personal Lines Reinsurance - Run off | Corporate and Other | Total | |||||||||||||||||||
Three months ended March 31, 2013: | |||||||||||||||||||||||||
Gross written premium | $ | 375,849 | $ | 328,329 | $ | 209,092 | $ | 30,652 | $ | — | $ | 943,922 | |||||||||||||
Net written premium | 173,740 | 184,442 | 143,272 | 30,652 | — | 532,106 | |||||||||||||||||||
Change in unearned premium | (47,140 | ) | (43,288 | ) | (31,794 | ) | (1,890 | ) | — | (124,112 | ) | ||||||||||||||
Net earned premium | 126,600 | 141,154 | 111,478 | 28,762 | — | 407,994 | |||||||||||||||||||
Loss and loss adjustment expense | (84,330 | ) | (92,971 | ) | (75,554 | ) | (19,401 | ) | — | (272,256 | ) | ||||||||||||||
Acquisition costs and other underwriting expenses | (31,664 | ) | (31,318 | ) | (28,543 | ) | (8,760 | ) | — | (100,285 | ) | ||||||||||||||
(115,994 | ) | (124,289 | ) | (104,097 | ) | (28,161 | ) | — | (372,541 | ) | |||||||||||||||
Underwriting income | 10,606 | 16,865 | 7,381 | 601 | — | 35,453 | |||||||||||||||||||
Service and fee income | 22,102 | 27,719 | 73 | — | 10,619 | 60,513 | |||||||||||||||||||
Investment income and realized gain (loss) | 12,038 | 14,891 | 7,402 | 1,048 | — | 35,379 | |||||||||||||||||||
Other expenses | (20,766 | ) | (18,140 | ) | (11,552 | ) | (1,694 | ) | — | (52,152 | ) | ||||||||||||||
Interest expense | (2,931 | ) | (2,560 | ) | (1,631 | ) | (239 | ) | — | (7,361 | ) | ||||||||||||||
Foreign currency gain | — | 1,272 | — | — | — | 1,272 | |||||||||||||||||||
Loss on life settlement contracts | (429 | ) | (374 | ) | (238 | ) | (35 | ) | — | (1,076 | ) | ||||||||||||||
Acquisition gain on purchase | — | 25,532 | — | — | — | 25,532 | |||||||||||||||||||
Provision for income taxes | (3,352 | ) | (10,598 | ) | (233 | ) | 52 | (1,978 | ) | (16,109 | ) | ||||||||||||||
Equity in earnings of unconsolidated subsidiary – related party | — | — | — | — | 1,550 | 1,550 | |||||||||||||||||||
Net income attributable to AmTrust Financial Services, Inc. | $ | 17,268 | $ | 54,607 | $ | 1,202 | $ | (267 | ) | $ | 10,191 | $ | 83,001 | ||||||||||||
The following tables summarize long lived assets and total assets of the business segments as of March 31, 2014 and December 31, 2013: | |||||||||||||||||||||||||
(Amounts in Thousands) | Small Commercial Business | Specialty Risk and Extended Warranty | Specialty Program | Personal Lines Reinsurance - Run off | Corporate and other | Total | |||||||||||||||||||
As of March 31, 2014: | |||||||||||||||||||||||||
Property and equipment, net | $ | 60,980 | $ | 29,045 | $ | 18,190 | $ | — | $ | — | $ | 108,215 | |||||||||||||
Goodwill and intangible assets | 230,415 | 408,095 | 54,526 | — | — | 693,036 | |||||||||||||||||||
Total assets | 5,444,100 | 4,820,424 | 1,925,866 | 24,523 | — | 12,214,913 | |||||||||||||||||||
As of December 31, 2013: | |||||||||||||||||||||||||
Property and equipment, net | $ | 42,054 | $ | 38,297 | $ | 22,280 | $ | 1,668 | $ | — | $ | 104,299 | |||||||||||||
Goodwill and intangible assets | 233,566 | 399,954 | 31,873 | — | — | 665,393 | |||||||||||||||||||
Total assets | 4,257,302 | 5,021,556 | 1,891,991 | 86,560 | — | 11,257,409 | |||||||||||||||||||
Subsequent_Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
Subsequent Event | |
Sale of Personal Express Insurance Company | |
In April 2014, the Company completed the sale of Personal Express Insurance Company (“PEIC”) and its captive insurance agency Personal Express Insurance Services, Inc. (“PEIS” and, together with PEIC, the “Personal Express Companies”) to Integon National Insurance Company, a subsidiary of NGHC, for approximately $20,000, subject to certain post-closing adjustments. The Personal Express Companies were wholly-owned subsidiaries of Sequoia Insurance Company, which is one of the Company’s wholly-owned subsidiaries. PEIC is a regulated preferred personal lines insurance carrier and offers retail personal lines insurance products in California. The Personal Express Companies offer three primary lines of direct-to-market personal insurance products: personal auto, homeowners and dwelling fire insurance. |
Investments_Tables
Investments (Tables) | 3 Months Ended | ||||||||||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ' | ||||||||||||||||||||||||||||||||
Amortized Cost, Estimated Market Value and Gross Unrealized Appreciation and Depreciation of Available-for-sale Securities | ' | ||||||||||||||||||||||||||||||||
The amortized cost, estimated market value and gross unrealized appreciation and depreciation of available-for-sale securities as of March 31, 2014 and December 31, 2013, are presented in the table below: | |||||||||||||||||||||||||||||||||
(Amounts in Thousands) | Original or amortized cost | Gross unrealized gains | Gross unrealized losses | Market value | |||||||||||||||||||||||||||||
As of March 31, 2014 | |||||||||||||||||||||||||||||||||
Preferred stock | $ | 4,243 | $ | 293 | $ | (94 | ) | $ | 4,442 | ||||||||||||||||||||||||
Common stock | 61,735 | 3,159 | (1,949 | ) | 62,945 | ||||||||||||||||||||||||||||
U.S. treasury securities | 105,743 | 1,375 | (200 | ) | 106,918 | ||||||||||||||||||||||||||||
U.S. government agencies | 26,139 | 657 | (63 | ) | 26,733 | ||||||||||||||||||||||||||||
Municipal bonds | 506,648 | 8,691 | (11,781 | ) | 503,558 | ||||||||||||||||||||||||||||
Foreign government | 163,146 | 2,376 | (675 | ) | 164,847 | ||||||||||||||||||||||||||||
Corporate bonds: | |||||||||||||||||||||||||||||||||
Finance | 1,151,801 | 47,877 | (8,360 | ) | 1,191,318 | ||||||||||||||||||||||||||||
Industrial | 981,336 | 18,414 | (11,117 | ) | 988,633 | ||||||||||||||||||||||||||||
Utilities | 105,001 | 1,600 | (1,266 | ) | 105,335 | ||||||||||||||||||||||||||||
Commercial mortgage backed securities | 38,941 | 309 | (230 | ) | 39,020 | ||||||||||||||||||||||||||||
Residential mortgage backed securities: | |||||||||||||||||||||||||||||||||
Agency backed | 796,621 | 9,196 | (11,293 | ) | 794,524 | ||||||||||||||||||||||||||||
Non-agency backed | 13,536 | 68 | (2 | ) | 13,602 | ||||||||||||||||||||||||||||
Asset-backed securities | 4,660 | 2 | (3 | ) | 4,659 | ||||||||||||||||||||||||||||
$ | 3,959,550 | $ | 94,017 | $ | (47,033 | ) | $ | 4,006,534 | |||||||||||||||||||||||||
Less: Securities pledged | 105,306 | 884 | (1,638 | ) | 104,552 | ||||||||||||||||||||||||||||
$ | 3,854,244 | $ | 93,133 | $ | (45,395 | ) | $ | 3,901,982 | |||||||||||||||||||||||||
(Amounts in Thousands) | Original or amortized cost | Gross unrealized gains | Gross unrealized losses | Market value | |||||||||||||||||||||||||||||
As of December 31, 2013 | |||||||||||||||||||||||||||||||||
Preferred stock | $ | 1,498 | $ | 82 | $ | (74 | ) | $ | 1,506 | ||||||||||||||||||||||||
Common stock | 14,512 | 1,156 | (2,026 | ) | 13,642 | ||||||||||||||||||||||||||||
U.S. treasury securities | 158,915 | 1,196 | (851 | ) | 159,260 | ||||||||||||||||||||||||||||
U.S. government agencies | 10,466 | 107 | (84 | ) | 10,489 | ||||||||||||||||||||||||||||
Municipal bonds | 461,325 | 4,781 | (19,923 | ) | 446,183 | ||||||||||||||||||||||||||||
Foreign government | 160,459 | 971 | (1,325 | ) | 160,105 | ||||||||||||||||||||||||||||
Corporate bonds: | |||||||||||||||||||||||||||||||||
Finance | 1,057,542 | 41,027 | (13,970 | ) | 1,084,599 | ||||||||||||||||||||||||||||
Industrial | 768,161 | 7,695 | (21,439 | ) | 754,417 | ||||||||||||||||||||||||||||
Utilities | 70,924 | 1,310 | (2,008 | ) | 70,226 | ||||||||||||||||||||||||||||
Commercial mortgage backed securities | 28,970 | — | (404 | ) | 28,566 | ||||||||||||||||||||||||||||
Residential mortgage backed securities: | |||||||||||||||||||||||||||||||||
Agency backed | 694,001 | 5,657 | (13,918 | ) | 685,740 | ||||||||||||||||||||||||||||
Non-agency backed | 6,737 | 19 | (7 | ) | 6,749 | ||||||||||||||||||||||||||||
Asset backed securities | $ | 6,119 | $ | 4 | $ | (3 | ) | $ | 6,120 | ||||||||||||||||||||||||
$ | 3,439,629 | $ | 64,005 | $ | (76,032 | ) | $ | 3,427,602 | |||||||||||||||||||||||||
Less: Securities pledged | 316,576 | 506 | (5,564 | ) | 311,518 | ||||||||||||||||||||||||||||
$ | 3,123,053 | $ | 63,499 | $ | (70,468 | ) | $ | 3,116,084 | |||||||||||||||||||||||||
Summary of Available for Sale Fixed Securities by Contractual Maturity | ' | ||||||||||||||||||||||||||||||||
A summary of the Company’s available-for-sale fixed securities as of March 31, 2014 and December 31, 2013, by contractual maturity, is shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. | |||||||||||||||||||||||||||||||||
31-Mar-14 | 31-Dec-13 | ||||||||||||||||||||||||||||||||
(Amounts in Thousands) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||||||||||||||||||||
Due in one year or less | $ | 133,632 | $ | 133,833 | $ | 128,128 | $ | 128,214 | |||||||||||||||||||||||||
Due after one through five years | 654,077 | 668,005 | 592,703 | 603,942 | |||||||||||||||||||||||||||||
Due after five through ten years | 1,894,126 | 1,933,571 | 1,632,115 | 1,631,751 | |||||||||||||||||||||||||||||
Due after ten years | 357,979 | 351,934 | 334,846 | 321,372 | |||||||||||||||||||||||||||||
Mortgage and asset backed securities | 853,758 | 851,804 | 735,827 | 727,175 | |||||||||||||||||||||||||||||
Total fixed maturities | $ | 3,893,572 | $ | 3,939,147 | $ | 3,423,619 | $ | 3,412,454 | |||||||||||||||||||||||||
Net Investment Income | ' | ||||||||||||||||||||||||||||||||
Net investment income for the three months ended March 31, 2014 and 2013 was derived from the following sources: | |||||||||||||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||||||||||||||||||
(Amounts in Thousands) | 2014 | 2013 | |||||||||||||||||||||||||||||||
Fixed maturity securities | $ | 27,672 | $ | 17,272 | |||||||||||||||||||||||||||||
Equity securities | 59 | 402 | |||||||||||||||||||||||||||||||
Cash and short term investments | 1,428 | 1,044 | |||||||||||||||||||||||||||||||
29,159 | 18,718 | ||||||||||||||||||||||||||||||||
Less: | |||||||||||||||||||||||||||||||||
Investment expenses and interest expense on securities sold under agreement to repurchase | (632 | ) | (623 | ) | |||||||||||||||||||||||||||||
$ | 28,527 | $ | 18,095 | ||||||||||||||||||||||||||||||
Other than Temporary Impairment, Credit Losses Recognized in Earnings | ' | ||||||||||||||||||||||||||||||||
OTTI charges of our fixed-maturities and equity securities for the three months ended March 31, 2014 and 2013 are presented in the table below: | |||||||||||||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||||||||||||||||||
(Amounts in Thousands) | 2014 | 2013 | |||||||||||||||||||||||||||||||
Equity securities recognized in earnings | $ | 1,643 | $ | — | |||||||||||||||||||||||||||||
Fixed-maturity securities recognized in earnings | — | — | |||||||||||||||||||||||||||||||
$ | 1,643 | $ | — | ||||||||||||||||||||||||||||||
Summary of Gross Unrealized Losses of Fixed-maturities and Equity Securities | ' | ||||||||||||||||||||||||||||||||
The table below summarizes the gross unrealized losses of our fixed maturity and equity securities by length of time the security has continuously been in an unrealized position as of March 31, 2014 and December 31, 2013: | |||||||||||||||||||||||||||||||||
Less Than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||||||||||
(Amounts in Thousands) | Fair Market Value | Unrealized Losses | No. of Positions Held | Fair Market Value | Unrealized Losses | No. of Positions Held | Fair Market Value | Unrealized Losses | |||||||||||||||||||||||||
31-Mar-14 | |||||||||||||||||||||||||||||||||
Common and preferred stock | $ | 25,402 | $ | (1,978 | ) | 125 | $ | 130 | $ | (65 | ) | 6 | $ | 25,532 | $ | (2,043 | ) | ||||||||||||||||
U.S. treasury securities | 45,520 | (200 | ) | 37 | — | — | — | 45,520 | (200 | ) | |||||||||||||||||||||||
U.S. government agencies | 4,864 | (63 | ) | 14 | — | — | — | 4,864 | (63 | ) | |||||||||||||||||||||||
Municipal bonds | 221,785 | (9,883 | ) | 275 | 19,375 | (1,898 | ) | 9 | 241,160 | (11,781 | ) | ||||||||||||||||||||||
Foreign government | 72,153 | (675 | ) | 30 | — | — | — | 72,153 | (675 | ) | |||||||||||||||||||||||
Corporate bonds: | |||||||||||||||||||||||||||||||||
Finance | 344,076 | (8,116 | ) | 223 | 45,043 | (244 | ) | 7 | 389,119 | (8,360 | ) | ||||||||||||||||||||||
Industrial | 366,521 | (10,806 | ) | 228 | 3,790 | (311 | ) | 2 | 370,311 | (11,117 | ) | ||||||||||||||||||||||
Utilities | 32,584 | (1,266 | ) | 16 | — | — | — | 32,584 | (1,266 | ) | |||||||||||||||||||||||
Commercial mortgage backed securities | 6,415 | (230 | ) | 12 | — | — | — | 6,415 | (230 | ) | |||||||||||||||||||||||
Residential mortgage backed securities: | |||||||||||||||||||||||||||||||||
Agency backed | 382,413 | (11,293 | ) | 109 | — | — | — | 382,413 | (11,293 | ) | |||||||||||||||||||||||
Non-agency backed | 152 | (1 | ) | 5 | 22 | (1 | ) | 1 | 174 | (2 | ) | ||||||||||||||||||||||
Asset-backed securities | 2,713 | (3 | ) | 6 | — | — | — | 2,713 | (3 | ) | |||||||||||||||||||||||
Total temporarily impaired securities | $ | 1,504,598 | $ | (44,514 | ) | 1,080 | $ | 68,360 | $ | (2,519 | ) | 25 | $ | 1,572,958 | $ | (47,033 | ) | ||||||||||||||||
Less Than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||||||||||
(Amounts in Thousands) | Fair Market Value | Unrealized Losses | No. of Positions Held | Fair Market Value | Unrealized Losses | No. of Positions Held | Fair Market Value | Unrealized Losses | |||||||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||||||||||
Common and preferred stock | $ | 4,875 | $ | (2,100 | ) | 51 | $ | — | $ | — | — | $ | 4,875 | $ | (2,100 | ) | |||||||||||||||||
U.S. treasury securities | 52,757 | (851 | ) | 18 | — | — | — | 52,757 | (851 | ) | |||||||||||||||||||||||
U.S. government agencies | 4,135 | (84 | ) | 11 | — | — | — | 4,135 | (84 | ) | |||||||||||||||||||||||
Municipal bonds | 254,219 | (17,986 | ) | 302 | 24,169 | (1,937 | ) | 9 | 278,388 | (19,923 | ) | ||||||||||||||||||||||
Foreign government | 68,102 | (1,324 | ) | 16 | 999 | (1 | ) | 1 | 69,101 | (1,325 | ) | ||||||||||||||||||||||
Corporate bonds: | |||||||||||||||||||||||||||||||||
Finance | 500,564 | (13,402 | ) | 182 | 58,923 | (568 | ) | 9 | 559,487 | (13,970 | ) | ||||||||||||||||||||||
Industrial | 500,366 | (21,203 | ) | 263 | 3,383 | (236 | ) | 2 | 503,749 | (21,439 | ) | ||||||||||||||||||||||
Utilities | 45,663 | (2,008 | ) | 21 | — | — | — | 45,663 | (2,008 | ) | |||||||||||||||||||||||
Commercial mortgage backed securities | 28,552 | (404 | ) | 18 | — | — | — | 28,552 | (404 | ) | |||||||||||||||||||||||
Residential mortgage backed securities: | |||||||||||||||||||||||||||||||||
Agency backed | 492,740 | (13,918 | ) | 120 | — | — | — | 492,740 | (13,918 | ) | |||||||||||||||||||||||
Non-agency backed | 205 | (5 | ) | 6 | 23 | (2 | ) | 1 | 228 | (7 | ) | ||||||||||||||||||||||
Asset-backed securities | 1,463 | (3 | ) | 4 | — | — | — | 1,463 | (3 | ) | |||||||||||||||||||||||
Total temporarily impaired securities | $ | 1,953,641 | $ | (73,288 | ) | $ | 1,012 | $ | 87,497 | $ | (2,744 | ) | $ | 22 | $ | 2,041,138 | $ | (76,032 | ) | ||||||||||||||
Notional Amounts of Interest Rate Swaps by Remaining Maturity | ' | ||||||||||||||||||||||||||||||||
The following table presents the notional amounts by remaining maturity of the Company’s interest rate swaps as of March 31, 2014: | |||||||||||||||||||||||||||||||||
Remaining Life of Notional Amount (1) | |||||||||||||||||||||||||||||||||
One Year | Two Through Five Years | Six Through Ten Years | After Ten Years | Total | |||||||||||||||||||||||||||||
(Amounts in Thousands) | |||||||||||||||||||||||||||||||||
Interest rate swaps | $ | — | $ | 70,000 | $ | — | $ | — | $ | 70,000 | |||||||||||||||||||||||
(1) | Notional amount is not representative of either market risk or credit risk and is not recorded in the consolidated balance sheet. | ||||||||||||||||||||||||||||||||
Fair Values of Restricted Assets | ' | ||||||||||||||||||||||||||||||||
The fair values of our restricted assets as of March 31, 2014 and December 31, 2013 are as follows: | |||||||||||||||||||||||||||||||||
(Amounts in Thousands) | 2014 | 2013 | |||||||||||||||||||||||||||||||
Restricted cash | $ | 143,143 | $ | 100,439 | |||||||||||||||||||||||||||||
Restricted investments | 877,461 | 978,910 | |||||||||||||||||||||||||||||||
Total restricted cash and investments | $ | 1,020,604 | $ | 1,079,349 | |||||||||||||||||||||||||||||
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 3 Months Ended | ||||||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||||||||||||||
Fair Value Measurement of Financial Assets and Financial Liabilities on Recurring Basis | ' | ||||||||||||||||||||||||||||
The following tables present the level within the fair value hierarchy at which the Company’s financial assets and financial liabilities are measured on a recurring basis as of March 31, 2014 and December 31, 2013: | |||||||||||||||||||||||||||||
(Amounts in Thousands) | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||
As of March 31, 2014 | |||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||
U.S. treasury securities | $ | 106,918 | $ | 106,918 | $ | — | $ | — | |||||||||||||||||||||
U.S. government agencies | 26,733 | — | 26,733 | — | |||||||||||||||||||||||||
Municipal bonds | 503,558 | — | 503,558 | — | |||||||||||||||||||||||||
Foreign government | 164,847 | — | 164,847 | — | |||||||||||||||||||||||||
Corporate bonds and other bonds: | |||||||||||||||||||||||||||||
Finance | 1,191,318 | — | 1,191,318 | — | |||||||||||||||||||||||||
Industrial | 988,633 | — | 988,633 | — | |||||||||||||||||||||||||
Utilities | 105,335 | — | 105,335 | — | |||||||||||||||||||||||||
Commercial mortgage backed securities | 39,020 | — | 39,020 | — | |||||||||||||||||||||||||
Residential mortgage backed securities: | |||||||||||||||||||||||||||||
Agency backed | 689,972 | — | 689,972 | — | |||||||||||||||||||||||||
Non-agency backed | 13,602 | — | 13,602 | — | |||||||||||||||||||||||||
Asset-backed securities | 4,659 | — | 4,659 | — | |||||||||||||||||||||||||
Equity securities | 67,387 | 67,387 | — | — | |||||||||||||||||||||||||
Short term investments | 71,223 | 71,223 | — | — | |||||||||||||||||||||||||
Other investments | 18,166 | — | — | 18,166 | |||||||||||||||||||||||||
Securities held as collateral | 104,552 | — | 104,552 | — | |||||||||||||||||||||||||
Life settlement contracts | 268,199 | — | — | 268,199 | |||||||||||||||||||||||||
$ | 4,364,122 | $ | 245,528 | $ | 3,832,229 | $ | 286,365 | ||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||
Equity securities sold but not yet purchased, market | 21,471 | 21,471 | — | — | |||||||||||||||||||||||||
Equity securities sold under agreements to repurchase, at carrying value | 94,162 | — | 94,162 | — | |||||||||||||||||||||||||
Life settlement contract profit commission | 13,348 | — | — | 13,348 | |||||||||||||||||||||||||
Derivatives | 2,759 | — | 2,759 | — | |||||||||||||||||||||||||
$ | 131,740 | $ | 21,471 | $ | 96,921 | $ | 13,348 | ||||||||||||||||||||||
(Amounts in Thousands) | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||
As of December 31, 2013 | |||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||
U.S. treasury securities | $ | 110,345 | $ | 110,345 | $ | — | $ | — | |||||||||||||||||||||
U.S. government agencies | 10,489 | — | 10,489 | — | |||||||||||||||||||||||||
Municipal bonds | 446,183 | — | 446,183 | — | |||||||||||||||||||||||||
Foreign government | 160,105 | 160,105 | |||||||||||||||||||||||||||
Corporate bonds and other bonds: | |||||||||||||||||||||||||||||
Finance | 1,084,599 | — | 1,084,599 | — | |||||||||||||||||||||||||
Industrial | 754,417 | — | 754,417 | — | |||||||||||||||||||||||||
Utilities | 70,226 | — | 70,226 | — | |||||||||||||||||||||||||
Commercial mortgage backed securities | 28,566 | — | 28,566 | — | |||||||||||||||||||||||||
Residential mortgage backed securities: | |||||||||||||||||||||||||||||
Agency backed | 423,137 | — | 423,137 | — | |||||||||||||||||||||||||
Non-agency backed | 6,749 | — | 6,749 | — | |||||||||||||||||||||||||
Asset-backed securities | 6,120 | 6,120 | |||||||||||||||||||||||||||
Equity securities | 15,148 | 15,148 | — | — | |||||||||||||||||||||||||
Short term investments | 114,202 | 114,202 | — | — | |||||||||||||||||||||||||
Other investments | 25,749 | — | — | 25,749 | |||||||||||||||||||||||||
Securities held as collateral | 311,518 | 48,915 | 262,603 | — | |||||||||||||||||||||||||
Life settlement contracts | 233,024 | — | — | 233,024 | |||||||||||||||||||||||||
$ | 3,800,577 | $ | 288,610 | $ | 3,253,194 | $ | 258,773 | ||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||
Securities sold under agreements to repurchase, at carrying value | 293,222 | — | 293,222 | — | |||||||||||||||||||||||||
Life settlement contract profit commission | 11,945 | — | — | 11,945 | |||||||||||||||||||||||||
Derivatives | 3,054 | — | 3,054 | — | |||||||||||||||||||||||||
$ | 308,221 | $ | — | $ | 296,276 | $ | 11,945 | ||||||||||||||||||||||
Changes in Fair Value of Level 3 Financial Assets And Liabilities | ' | ||||||||||||||||||||||||||||
The following tables provides a summary of changes in fair value of the Company’s Level 3 financial assets and liabilities for the three months ended March 31, 2014 and 2013: | |||||||||||||||||||||||||||||
(Amounts in Thousands) | Balance as of December 31, 2013 | Net income | Other comprehensive income | Purchases and issuances | Sales and settlements | Net transfers into (out of) Level 3 | Balance as of March 31, | ||||||||||||||||||||||
2014 | |||||||||||||||||||||||||||||
Other investments | $ | 25,749 | $ | 2,114 | $ | — | $ | 3,207 | $ | (12,904 | ) | $ | — | $ | 18,166 | ||||||||||||||
Life settlement contracts | 233,024 | 16,987 | — | 23,215 | (5,027 | ) | — | 268,199 | |||||||||||||||||||||
Life settlement contract profit commission | (11,945 | ) | (1,403 | ) | — | — | — | — | (13,348 | ) | |||||||||||||||||||
Total | $ | 246,828 | $ | 17,698 | $ | — | $ | 26,422 | $ | (17,931 | ) | $ | — | $ | 273,017 | ||||||||||||||
(Amounts in Thousands) | Balance as of December 31, 2012 | Net income | Other comprehensive income | Purchases and issuances | Sales and settlements | Net transfers into (out of) Level 3 | Balance as of | ||||||||||||||||||||||
March 31, | |||||||||||||||||||||||||||||
2013 | |||||||||||||||||||||||||||||
Other investments | $ | 11,144 | $ | 694 | $ | — | $ | 5,111 | $ | (897 | ) | $ | — | $ | 16,052 | ||||||||||||||
Life settlement contracts | 193,927 | 9,925 | — | — | (4,028 | ) | — | 199,824 | |||||||||||||||||||||
Life settlement contract profit commission | (11,750 | ) | (487 | ) | — | — | — | — | (12,237 | ) | |||||||||||||||||||
Total | $ | 193,321 | $ | 10,132 | $ | — | $ | 5,111 | $ | (4,925 | ) | $ | — | $ | 203,639 | ||||||||||||||
Schedule of Reconciliation of Net Income | ' | ||||||||||||||||||||||||||||
A reconciliation of net income for life settlement contracts in the above table to gain (loss) on investment in life settlement contracts net of profit commission included in the Condensed Consolidated Statements of Income is as follows: | |||||||||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||||||||||||||
(Amounts in Thousands) | 2014 | 2013 | |||||||||||||||||||||||||||
Net income | $ | 16,987 | $ | 9,925 | |||||||||||||||||||||||||
Premiums paid | (11,394 | ) | (9,427 | ) | |||||||||||||||||||||||||
Profit commission | (1,403 | ) | (487 | ) | |||||||||||||||||||||||||
Other expenses | (1,390 | ) | (1,087 | ) | |||||||||||||||||||||||||
Gain (loss) on investment in life settlement contracts net of profit commission | $ | 2,800 | $ | (1,076 | ) | ||||||||||||||||||||||||
Premiums to be Paid for Each of Five Succeeding Fiscal Years to keep Life Insurance Policies in Force | ' | ||||||||||||||||||||||||||||
The following summarizes data utilized in estimating the fair value of the portfolio of life insurance policies as of March 31, 2014 and December 31, 2013 and, as described in Note 5. "Investments in Life Settlements", only includes data for policies to which the Company assigned value at those dates: | |||||||||||||||||||||||||||||
March 31, | December 31, | ||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||
Average age of insured | 80.4 years | 80.1 years | |||||||||||||||||||||||||||
Average life expectancy, months (1) | 127 | 131 | |||||||||||||||||||||||||||
Average face amount per policy | $ | 6,692,000 | $ | 6,611,000 | |||||||||||||||||||||||||
Effective discount rate (2) | 14.4 | % | 14.2 | % | |||||||||||||||||||||||||
(1) | Standard life expectancy as adjusted for specific circumstances. | ||||||||||||||||||||||||||||
(2) | Effective Discount Rate ("EDR") is the Company's estimated internal rate of return on its life settlement contract portfolio and is determined from the gross expected cash flows and valuation of the portfolio. The valuation of the portfolio is calculated net of all reserves using a 7.5% discount rate. The EDR is implicit of the reserves and the gross expected cash flows of the portfolio. The Company anticipates that the EDR's range is between 12.5% and 17.5% and reflects the uncertainty that exists surrounding the information available as of the reporting date. As the accuracy and reliability of information improves (declines), the EDR will decrease (increase). The increase in the EDR from December 31, 2013 to March 31, 2014 resulted from routine updating of life expectancies and other factors relating to operational risk. | ||||||||||||||||||||||||||||
Increase or (Decrease) in Carrying Value of Investment in Life Insurance Policies | ' | ||||||||||||||||||||||||||||
The Company's assumptions are, by their nature, inherently uncertain and the effect of changes in estimates may be significant. The fair value measurements used in estimating the present value calculation are derived from valuation techniques generally used in the industry that include inputs for the asset that are not based on observable market data. The extent to which the fair value could reasonably vary in the near term has been quantified by evaluating the effect of changes in significant underlying assumptions used to estimate the fair value amount. If the life expectancies were increased or decreased by 4 months and the discount factors were increased or decreased by 1% while all other variables were held constant, the carrying value of the investment in life insurance policies would increase or (decrease) by the unaudited amounts summarized below as of March 31, 2014 and December 31, 2013: | |||||||||||||||||||||||||||||
Change in life expectancy | |||||||||||||||||||||||||||||
(Amounts in Thousands) | Plus 4 Months | Minus 4 Months | |||||||||||||||||||||||||||
Investment in life policies: | |||||||||||||||||||||||||||||
March 31, 2014 | $ | (33,032 | ) | $ | 34,621 | ||||||||||||||||||||||||
December 31, 2013 | $ | (29,537 | ) | $ | 31,313 | ||||||||||||||||||||||||
Change in discount rate (1) | |||||||||||||||||||||||||||||
(Amounts in Thousands) | Plus 1% | Minus 1% | |||||||||||||||||||||||||||
Investment in life policies: | |||||||||||||||||||||||||||||
March 31, 2014 | $ | (22,413 | ) | $ | 25,228 | ||||||||||||||||||||||||
December 31, 2013 | $ | (20,055 | ) | $ | 22,605 | ||||||||||||||||||||||||
-1 | Discount rate is a present value calculation that considers legal risk, credit risk and liquidity risk and is a component of EDR. |
Investment_in_Life_Settlements1
Investment in Life Settlements (Tables) | 3 Months Ended | ||||||||||
Mar. 31, 2014 | |||||||||||
Investments, All Other Investments [Abstract] | ' | ||||||||||
Investment in Life Settlements | ' | ||||||||||
The following table describes the Company’s investment in life settlements as of March 31, 2014 and December 31, 2013: | |||||||||||
(Amounts in Thousands, except number of Life Settlement Contracts) | Number of Life Settlement Contracts | Fair Value (1) | Face Value | ||||||||
Expected Maturity Term in Years | |||||||||||
As of March 31, 2014 | |||||||||||
0-1 | — | $ | — | $ | — | ||||||
2-Jan | 3 | 17,236 | 25,000 | ||||||||
3-Feb | 8 | 43,069 | 73,000 | ||||||||
4-Mar | 7 | 15,824 | 38,000 | ||||||||
5-Apr | 3 | 7,886 | 20,000 | ||||||||
Thereafter | 267 | 184,184 | 1,718,409 | ||||||||
Total | 288 | $ | 268,199 | $ | 1,874,409 | ||||||
(Amounts in Thousands, except number of Life Settlement Contracts) | Number of Life Settlement Contracts | Fair Value (1) | Face Value | ||||||||
Expected Maturity Term in Years | |||||||||||
As of December 31, 2013 | |||||||||||
0-1 | — | $ | — | $ | — | ||||||
2-Jan | — | — | — | ||||||||
3-Feb | 1 | 2,726 | 5,000 | ||||||||
4-Mar | 13 | 53,767 | 103,000 | ||||||||
5-Apr | 2 | 5,622 | 13,000 | ||||||||
Thereafter | 255 | 170,909 | 1,641,409 | ||||||||
Total | 271 | $ | 233,024 | $ | 1,762,409 | ||||||
(1) | The Company determined the fair value as of March 31, 2014 based on 210 policies out of 288 policies, as the Company assigned no value to 78 of the policies as of March 31, 2014. The Company determined the fair value as of December 31, 2013 based on 191 policies out of 271 policies, as the Company assigned no value to 80 of the policies as of December 31, 2013. The Company estimated the fair value of a life insurance policy using a cash flow model with an appropriate discount rate. In some cases, the cash flow model calculates the value of an individual policy to be negative, and therefore the fair value of the policy is zero as no liability exists when a negative value is calculated. The Company is not contractually bound to pay the premium on its life settlement contracts and, therefore, would not pay a willing buyer to assume title of these contracts. Additionally, certain of the Company's acquired policies were structured to have low premium payments at inception of the policy term, which later escalate greatly towards the tail end of the policy term. At the current time, the Company expenses all premium paid, even on policies with zero fair value. Once the premium payments escalate, the Company may allow the policies to lapse. In the event that death benefits are realized in the time frame between initial acquisition and premium escalation, it is a benefit to cash flow. | ||||||||||
For these contracts where the Company determined the fair value to be negative and therefore assigned a fair value of zero, the table below details the amount of premiums paid and the death benefits received during the twelve months preceding March 31, 2014 and December 31, 2013: | |||||||||||
(Amounts in Thousands, except number of Life Settlement Contracts) | 31-Mar-14 | 31-Dec-13 | |||||||||
Number of policies with a negative value from discounted cash flow model as of period end | 78 | 80 | |||||||||
Premiums paid for the preceding twelve month period for period ended | $ | 9,114 | $ | 9,371 | |||||||
Death benefit received | $ | 3,012 | $ | 3,012 | |||||||
Premiums to be Paid for Each of Five Succeeding Fiscal Years to keep Life Insurance Policies in Force | ' | ||||||||||
Premiums to be paid by the LSC entities for each of the five succeeding fiscal years to keep the life insurance policies in force as of March 31, 2014, are as follows: | |||||||||||
(Amounts in Thousands) | Premiums Due on Life Settlement Contracts | ||||||||||
2014 | $ | 39,790 | |||||||||
2015 | 42,339 | ||||||||||
2016 | 62,240 | ||||||||||
2017 | 40,309 | ||||||||||
2018 | 38,319 | ||||||||||
Thereafter | 583,031 | ||||||||||
Total | $ | 806,028 | |||||||||
Debt_Tables
Debt (Tables) | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||
Debt Disclosure [Abstract] | ' | |||||||||||||||||||
Borrowings | ' | |||||||||||||||||||
The Company’s borrowings consisted of the following at March 31, 2014 and December 31, 2013: | ||||||||||||||||||||
(Amounts in Thousands) | March 31, 2014 | December 31, 2013 | ||||||||||||||||||
Revolving credit facility | $ | — | $ | — | ||||||||||||||||
Convertible senior notes | 165,006 | 164,218 | ||||||||||||||||||
6.125% Notes due 2023 | 250,000 | 250,000 | ||||||||||||||||||
Subordinated debentures | 123,714 | 123,714 | ||||||||||||||||||
Secured loan agreements | 7,476 | 7,742 | ||||||||||||||||||
Promissory notes | 14,500 | 14,500 | ||||||||||||||||||
$ | 560,696 | $ | 560,174 | |||||||||||||||||
Aggregate Scheduled Maturities of Borrowings | ' | |||||||||||||||||||
Aggregate scheduled maturities of the Company’s borrowings at March 31, 2014 are: | ||||||||||||||||||||
(Amounts in Thousands) | ||||||||||||||||||||
2014 | $ | 805 | ||||||||||||||||||
2015 | 1,116 | |||||||||||||||||||
2016 | 1,167 | |||||||||||||||||||
2017 | 1,220 | |||||||||||||||||||
2018 | 3,168 | |||||||||||||||||||
Thereafter | 553,220 | (1) | ||||||||||||||||||
(1) | Amount reflected in balance sheet for convertible senior notes is net of unamortized original issue discount of $34,994. | |||||||||||||||||||
Amounts Recorded for Notes | ' | |||||||||||||||||||
The following table shows the amounts recorded for the Convertible Notes as of March 31, 2014 and December 31, 2013: | ||||||||||||||||||||
(Amounts in Thousands) | March 31, | December 31, | ||||||||||||||||||
2014 | 2013 | |||||||||||||||||||
Liability component | ||||||||||||||||||||
Outstanding principal | $ | 200,000 | $ | 200,000 | ||||||||||||||||
Unamortized OID | (34,994 | ) | (35,782 | ) | ||||||||||||||||
Liability component | $ | 165,006 | $ | 164,218 | ||||||||||||||||
Equity component, net of tax | $ | 27,092 | $ | 27,092 | ||||||||||||||||
Trust Preferred Securities | ' | |||||||||||||||||||
The table below summarizes the Company’s trust preferred securities as of March 31, 2014: | ||||||||||||||||||||
(Amounts in Thousands) | Aggregate Liquidation Amount of Trust Preferred Securities | Aggregate Liquidation Amount of Common Securities | Aggregate Principal Amount of Notes | Stated Maturity of Notes | Per Annum Interest Rate % of Notes | |||||||||||||||
Name of Trust | ||||||||||||||||||||
AmTrust Capital Financing Trust I | $ | 25,000 | $ | 774 | $ | 25,774 | 3/17/35 | 8.275 | (1 | ) | ||||||||||
AmTrust Capital Financing Trust II | 25,000 | 774 | 25,774 | 6/15/35 | 7.71 | (1 | ) | |||||||||||||
AmTrust Capital Financing Trust III | 30,000 | 928 | 30,928 | 9/15/36 | 3.533 | (2 | ) | |||||||||||||
AmTrust Capital Financing Trust IV | 40,000 | 1,238 | 41,238 | 3/15/37 | 3.233 | (3 | ) | |||||||||||||
Total trust preferred securities | $ | 120,000 | $ | 3,714 | $ | 123,714 | ||||||||||||||
-1 | The interest rate will change to three-month LIBOR plus 3.40% after the tenth anniversary in 2015. | |||||||||||||||||||
-2 | The interest rate is LIBOR plus 3.30%. | |||||||||||||||||||
-3 | The interest rate is LIBOR plus 3.00%. |
Acquisition_Costs_and_Other_Un1
Acquisition Costs and Other Underwriting Expenses (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Acquisition Costs and Other Underwriting Expenses [Abstract] | ' | ||||||||
Business Acquisitions Components Of Acquisition Related Costs | ' | ||||||||
The following table summarizes the components of acquisition costs and other underwriting expenses for the three months ended March 31, 2014 and 2013: | |||||||||
Three Months Ended March 31, | |||||||||
(Amounts in Thousands) | 2014 | 2013 | |||||||
Policy acquisition expenses | $ | 94,251 | $ | 37,730 | |||||
Salaries and benefits | 77,855 | 45,129 | |||||||
Other insurance general and administrative expenses | 14,503 | 17,426 | |||||||
$ | 186,609 | $ | 100,285 | ||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Summary of Elements Used in Calculating Basic and Diluted Earnings Per Share | ' | ||||||||
The following table is a summary of the elements used in calculating basic and diluted earnings per share for the three months ended March 31, 2014 and 2013: | |||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
(Amounts in Thousands, except for earnings per share) | 2014 | 2013 | |||||||
Basic earnings per share: | |||||||||
Net income attributable to AmTrust common shareholders | 99,851 | 83,878 | |||||||
Less: Net income allocated to participating securities and redeemable non-controlling interest | 216 | 319 | |||||||
Net income allocated to AmTrust common shareholders | $ | 99,635 | $ | 83,559 | |||||
Weighted average common shares outstanding – basic | 74,708 | 74,079 | |||||||
Less: Weighted average participating shares outstanding | 161 | 268 | |||||||
Weighted average common shares outstanding - basic | 74,547 | 73,811 | |||||||
Net income per AmTrust common share - basic | $ | 1.34 | $ | 1.13 | |||||
Diluted earnings per share: | |||||||||
Net income attributable to AmTrust common shareholders | $ | 99,851 | $ | 83,878 | |||||
Less: Net income allocated to participating securities and redeemable non-controlling interest | 216 | 319 | |||||||
Net income allocated to AmTrust common shareholders | $ | 99,635 | $ | 83,559 | |||||
Weighted average common shares outstanding – basic | 74,547 | 73,811 | |||||||
Plus: Dilutive effect of stock options, convertible debt, other | 3,897 | 3,514 | |||||||
Weighted average common shares outstanding – dilutive | 78,444 | 77,325 | |||||||
Net income per AmTrust common shares – diluted | $ | 1.27 | $ | 1.08 | |||||
Share_Based_Compensation_Table
Share Based Compensation (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Text Block [Abstract] | ' | |||||||||||||
Schedule of Option Granted, Exercised and Expired | ' | |||||||||||||
The following information and tables below for stock options, restricted stock and RSUs have been adjusted retroactively in all periods presented. | ||||||||||||||
The following schedule shows all options granted, exercised, and expired under the Plan for the three months ended March 31, 2014 and 2013: | ||||||||||||||
2014 | 2013 | |||||||||||||
Weighted Average Exercise Price | Weighted Average Exercise Price | |||||||||||||
Shares | Shares | |||||||||||||
Outstanding at beginning of period | 2,997,460 | $ | 10.49 | 3,675,776 | $ | 9.41 | ||||||||
Granted | 27,500 | 32.49 | 11,000 | 26.71 | ||||||||||
Exercised | (229,968 | ) | 8.13 | (168,035 | ) | 7.28 | ||||||||
Cancelled or terminated | — | — | — | — | ||||||||||
Outstanding end of period | 2,794,992 | $ | 10.9 | 3,518,741 | $ | 9.57 | ||||||||
Summary of Restricted Stock and RSU Activity | ' | |||||||||||||
A summary of the Company’s restricted stock and RSU activity for the three months ended March 31, 2014 and 2013 is shown below: | ||||||||||||||
2014 | 2013 | |||||||||||||
Weighted Average Grant Date Fair Value | Weighted Average Grant Date Fair Value | |||||||||||||
Shares or | Shares | |||||||||||||
Units | or Units | |||||||||||||
Non-vested at beginning of period | 917,015 | $ | 24.43 | 888,197 | $ | 20.86 | ||||||||
Granted | 680,842 | 37.14 | 90,146 | 31.58 | ||||||||||
Vested | (155,171 | ) | 22.65 | (131,539 | ) | 21.04 | ||||||||
Forfeited | (1,566 | ) | 24 | — | — | |||||||||
Non-vested at end of period | 1,441,120 | $ | 30.63 | 846,804 | $ | 21.97 | ||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Text Block [Abstract] | ' | ||||||||
Reconciliation of Statutory Income Tax Rate to Effective Tax Rate | ' | ||||||||
The following table is a reconciliation of the Company’s statutory income tax expense to its effective tax rate for the three months ended March 31, 2014 and 2013: | |||||||||
Three Months Ended March 31, | |||||||||
(Amounts in Thousands) | 2014 | 2013 | |||||||
Income before equity in earnings of unconsolidated subsidiaries | $ | 110,656 | $ | 97,560 | |||||
Tax at federal statutory rate of 35% | $ | 38,730 | $ | 34,146 | |||||
Tax effects resulting from: | |||||||||
Income (loss) of non-includible foreign subsidiaries | (48,878 | ) | (19,587 | ) | |||||
Other, net | 37,592 | 1,550 | |||||||
$ | 27,444 | $ | 16,109 | ||||||
Effective tax rate | 24.8 | % | 16.5 | % | |||||
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Text Block [Abstract] | ' | ||||||||
Results of Operations Related to Reinsurance Agreements | ' | ||||||||
The following is the effect on the Company’s results of operations for the three months ended March 31, 2014 and 2013 related to Maiden Reinsurance agreements: | |||||||||
Three Months Ended March 31, | |||||||||
(Amounts in Thousands) | 2014 | 2013 | |||||||
Results of operations: | |||||||||
Premium written – ceded | $ | (408,558 | ) | $ | (305,786 | ) | |||
Change in unearned premium – ceded | 95,890 | 78,096 | |||||||
Earned premium - ceded | $ | (312,668 | ) | $ | (227,690 | ) | |||
Ceding commission on premium written | $ | 118,340 | $ | 89,499 | |||||
Ceding commission – deferred | (30,234 | ) | (25,541 | ) | |||||
Ceding commission – earned | $ | 88,106 | $ | 63,958 | |||||
Incurred loss and loss adjustment expense – ceded | $ | 214,283 | $ | 152,965 | |||||
Acquisitions_Acquistions_Table
Acquisitions Acquistions (Tables) | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
Insco Dico Group | ' | ||||
Business Acquisition [Line Items] | ' | ||||
Schedule of Preliminary Assets Acquired and Liabilities Assumed | ' | ||||
A summary of the preliminary assets acquired and liabilities assumed for Insco Dico are as follows: | |||||
(Amounts in Thousands) | |||||
Assets | |||||
Cash and investments | $ | 130,031 | |||
Premium receivables | 8,484 | ||||
Reinsurance recoverable | 5,799 | ||||
Other assets | 1,784 | ||||
Property and equipment | 1,190 | ||||
Goodwill and intangible assets | 19,452 | ||||
Total assets | $ | 166,740 | |||
Liabilities | |||||
Unearned premiums | $ | 25,715 | |||
Loss and loss expense reserves | 25,210 | ||||
Accrued liabilities | 10,210 | ||||
Notes payable | 10,000 | ||||
Funds held for policyholders | 5,864 | ||||
Deferred tax liability | 1,041 | ||||
Total liabilities | $ | 78,040 | |||
Cash paid | $ | 88,700 | |||
Sagicor Europe Limited | ' | ||||
Business Acquisition [Line Items] | ' | ||||
Schedule of Preliminary Assets Acquired and Liabilities Assumed | ' | ||||
A summary of the preliminary assets acquired and liabilities assumed for Sagicor are as follows: | |||||
(Amounts in Thousands) | |||||
Assets | |||||
Cash and investments | $ | 429,476 | |||
Prepaid insurance | 122,673 | ||||
Premium receivables | 89,801 | ||||
Other receivable | 54,479 | ||||
Deferred tax asset | 29,916 | ||||
Other assets | 10,502 | ||||
Property and equipment | 5,010 | ||||
Goodwill and intangible assets | 33,539 | ||||
Total assets | $ | 775,396 | |||
Liabilities | |||||
Loss and loss expense reserves | $ | 496,836 | |||
Unearned premium | 113,182 | ||||
Accrued expense and other liabilities | 55,950 | ||||
Ceded reinsurance | 16,315 | ||||
Total liabilities | $ | 682,283 | |||
Cash paid | $ | 93,113 | |||
MIHC | ' | ||||
Business Acquisition [Line Items] | ' | ||||
Schedule of Preliminary Assets Acquired and Liabilities Assumed | ' | ||||
A summary of the assets acquired and liabilities assumed for MIHC are as follows: | |||||
(Amounts in Thousands) | |||||
Assets | |||||
Cash and investments | $ | 134,780 | |||
Premium receivables | 23,085 | ||||
Other assets | 43,714 | ||||
Deferred tax asset | 5,358 | ||||
Property and equipment | 2,684 | ||||
Intangible assets | 6,132 | ||||
Total assets | $ | 215,753 | |||
Liabilities | |||||
Loss and loss expense reserves | $ | 89,267 | |||
Unearned premium | 27,760 | ||||
Accrued liabilities | 23,629 | ||||
Deferred tax liability | 1,586 | ||||
Notes payable | 6,500 | ||||
Total liabilities | $ | 148,742 | |||
Cash paid | $ | 48,500 | |||
Acquisition gain | $ | 18,511 | |||
Sequoia | ' | ||||
Business Acquisition [Line Items] | ' | ||||
Schedule of Preliminary Assets Acquired and Liabilities Assumed | ' | ||||
A summary of the assets acquired and liabilities assumed for Sequoia are as follows: | |||||
(Amounts in Thousands) | |||||
Assets | |||||
Cash and investments | $ | 215,473 | |||
Premium receivables | 32,870 | ||||
Reinsurance recoverables | 43,793 | ||||
Other assets | 4,014 | ||||
Deferred tax asset | 7,780 | ||||
Property and equipment | 1,022 | ||||
Intangible assets | 11,848 | ||||
Total assets | $ | 316,800 | |||
Liabilities | |||||
Loss and loss expense reserves | $ | 165,487 | |||
Unearned premium | 59,773 | ||||
Accrued liabilities | 15,624 | ||||
Deferred tax liability | 2,607 | ||||
Total liabilities | $ | 243,491 | |||
Purchase price | $ | 60,000 | |||
Acquisition gain | $ | 13,309 | |||
Shareholder_Equity_and_Accumul1
Shareholder Equity and Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||
Equity [Abstract] | ' | ||||||||||||||||||||||||
Ownership Components of Total Equity | ' | ||||||||||||||||||||||||
The following table summarizes the ownership components of total stockholders' equity for the three months ended March 31, 2014 and 2013: | |||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
(Amounts in Thousands) | AmTrust | Non-Controlling Interest | Total | AmTrust | Non-Controlling Interest | Total | |||||||||||||||||||
Beginning Balance | $ | 1,449,643 | $ | 137,860 | $ | 1,587,503 | $ | 1,144,121 | $ | 103,344 | $ | 1,247,465 | |||||||||||||
Net income (loss) | 101,792 | (64 | ) | 101,728 | 83,878 | (877 | ) | 83,001 | |||||||||||||||||
Unrealized holding (loss) gain | 40,873 | — | 40,873 | (15,286 | ) | — | (15,286 | ) | |||||||||||||||||
Reclassification adjustment | (1,945 | ) | — | (1,945 | ) | 3,536 | — | 3,536 | |||||||||||||||||
Foreign currency translation | 1,515 | — | 1,515 | (15,731 | ) | — | (15,731 | ) | |||||||||||||||||
Unrealized gain on interest rate swap | 192 | — | 192 | 220 | — | 220 | |||||||||||||||||||
Share exercises, compensation and other | 5,708 | — | 5,708 | 3,083 | — | 3,083 | |||||||||||||||||||
Common share dividends | (15,064 | ) | — | (15,064 | ) | (9,430 | ) | — | (9,430 | ) | |||||||||||||||
Preferred stock dividends | (1,941 | ) | — | (1,941 | ) | — | — | — | |||||||||||||||||
Capital contribution | — | 1,765 | 1,765 | — | 2,209 | 2,209 | |||||||||||||||||||
Ending Balance | $ | 1,580,773 | $ | 139,561 | $ | 1,720,334 | $ | 1,194,391 | $ | 104,676 | $ | 1,299,067 | |||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | ' | ||||||||||||||||||||||||
The following table summarizes Accumulated Other Comprehensive Income (Loss) for the three month periods ended March 31, 2014 and 2013: | |||||||||||||||||||||||||
(Amounts in Thousands) | Foreign Currency Items | Unrealized Gains (Losses) on Investments | Interest Rate Swap Hedge | Net Benefit Plan Assets and Obligations Recognized in Stockholders' Equity | Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||
Balance December 31, 2013 | $ | 2,582 | $ | (7,023 | ) | $ | (1,985 | ) | $ | (1,738 | ) | $ | (8,164 | ) | |||||||||||
Other comprehensive income before reclassification | 2,331 | 62,881 | 295 | — | 65,507 | ||||||||||||||||||||
Amounts reclassed from accumulated other comprehensive income | — | (2,992 | ) | — | — | (2,992 | ) | ||||||||||||||||||
Income tax expense | (816 | ) | (20,961 | ) | (103 | ) | — | (21,880 | ) | ||||||||||||||||
Net current-period other comprehensive income | 1,515 | 38,928 | 192 | — | 40,635 | ||||||||||||||||||||
Balance, March 31, 2014 | $ | 4,097 | $ | 31,905 | $ | (1,793 | ) | $ | (1,738 | ) | $ | 32,471 | |||||||||||||
Balance December 31, 2012 | $ | (10,361 | ) | $ | 77,605 | $ | (3,013 | ) | $ | — | $ | 64,231 | |||||||||||||
Other comprehensive income before reclassification | (24,201 | ) | (23,517 | ) | 338 | — | (47,380 | ) | |||||||||||||||||
Amounts reclassed from accumulated other comprehensive income | — | 5,440 | — | — | 5,440 | ||||||||||||||||||||
Income tax benefit (expense) | 8,470 | 6,327 | (118 | ) | — | 14,679 | |||||||||||||||||||
Net current-period other comprehensive income (loss) | (15,731 | ) | (11,750 | ) | 220 | — | (27,261 | ) | |||||||||||||||||
Balance, March 31, 2013 | $ | (26,092 | ) | $ | 65,855 | $ | (2,793 | ) | $ | — | $ | 36,970 | |||||||||||||
Segments_Tables
Segments (Tables) | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||
Text Block [Abstract] | ' | ||||||||||||||||||||||||
Results of Operations of Business Segments | ' | ||||||||||||||||||||||||
The following tables summarize the results of operations of the business segments for the three months ended March 31, 2014 and 2013: | |||||||||||||||||||||||||
(Amounts in Thousands) | Small Commercial Business | Specialty Risk and Extended Warranty | Specialty Program | Personal Lines Reinsurance - Run off | Corporate and Other | Total | |||||||||||||||||||
Three months ended March 31, 2014: | |||||||||||||||||||||||||
Gross written premium | $ | 938,927 | $ | 447,203 | $ | 280,066 | $ | — | $ | — | $ | 1,666,196 | |||||||||||||
Net written premium | 650,716 | 281,115 | 198,450 | — | — | 1,130,281 | |||||||||||||||||||
Change in unearned premium | (270,312 | ) | (9,600 | ) | (27,610 | ) | 6,292 | — | (301,230 | ) | |||||||||||||||
Net earned premium | 380,404 | 271,515 | 170,840 | 6,292 | — | 829,051 | |||||||||||||||||||
Loss and loss adjustment expense | (255,122 | ) | (183,120 | ) | (116,160 | ) | (4,168 | ) | — | (558,570 | ) | ||||||||||||||
Acquisition costs and other underwriting expenses | (88,028 | ) | (52,865 | ) | (43,886 | ) | (1,830 | ) | — | (186,609 | ) | ||||||||||||||
(343,150 | ) | (235,985 | ) | (160,046 | ) | (5,998 | ) | — | (745,179 | ) | |||||||||||||||
Underwriting income | 37,254 | 35,530 | 10,794 | 294 | — | 83,872 | |||||||||||||||||||
Service and fee income | 22,103 | 56,225 | 150 | — | 12,480 | 90,958 | |||||||||||||||||||
Investment income and realized gain | 13,644 | 14,105 | 6,054 | 163 | — | 33,966 | |||||||||||||||||||
Other expenses | (49,359 | ) | (23,509 | ) | (14,723 | ) | — | — | (87,591 | ) | |||||||||||||||
Interest expense | (6,479 | ) | (3,086 | ) | (1,932 | ) | — | — | (11,497 | ) | |||||||||||||||
Foreign currency loss | — | (1,852 | ) | — | — | — | (1,852 | ) | |||||||||||||||||
Gain on life settlement contracts | 1,577 | 752 | 471 | — | — | 2,800 | |||||||||||||||||||
Provision for income taxes | (3,982 | ) | (16,607 | ) | (173 | ) | (97 | ) | (6,585 | ) | (27,444 | ) | |||||||||||||
Equity in earnings of unconsolidated subsidiary – related party | — | — | — | — | 18,516 | 18,516 | |||||||||||||||||||
Net income attributable to AmTrust Financial Services, Inc. | $ | 14,758 | $ | 61,558 | $ | 641 | $ | 360 | $ | 24,411 | $ | 101,728 | |||||||||||||
(Amounts in Thousands) | Small Commercial Business | Specialty Risk and Extended Warranty | Specialty Program | Personal Lines Reinsurance - Run off | Corporate and Other | Total | |||||||||||||||||||
Three months ended March 31, 2013: | |||||||||||||||||||||||||
Gross written premium | $ | 375,849 | $ | 328,329 | $ | 209,092 | $ | 30,652 | $ | — | $ | 943,922 | |||||||||||||
Net written premium | 173,740 | 184,442 | 143,272 | 30,652 | — | 532,106 | |||||||||||||||||||
Change in unearned premium | (47,140 | ) | (43,288 | ) | (31,794 | ) | (1,890 | ) | — | (124,112 | ) | ||||||||||||||
Net earned premium | 126,600 | 141,154 | 111,478 | 28,762 | — | 407,994 | |||||||||||||||||||
Loss and loss adjustment expense | (84,330 | ) | (92,971 | ) | (75,554 | ) | (19,401 | ) | — | (272,256 | ) | ||||||||||||||
Acquisition costs and other underwriting expenses | (31,664 | ) | (31,318 | ) | (28,543 | ) | (8,760 | ) | — | (100,285 | ) | ||||||||||||||
(115,994 | ) | (124,289 | ) | (104,097 | ) | (28,161 | ) | — | (372,541 | ) | |||||||||||||||
Underwriting income | 10,606 | 16,865 | 7,381 | 601 | — | 35,453 | |||||||||||||||||||
Service and fee income | 22,102 | 27,719 | 73 | — | 10,619 | 60,513 | |||||||||||||||||||
Investment income and realized gain (loss) | 12,038 | 14,891 | 7,402 | 1,048 | — | 35,379 | |||||||||||||||||||
Other expenses | (20,766 | ) | (18,140 | ) | (11,552 | ) | (1,694 | ) | — | (52,152 | ) | ||||||||||||||
Interest expense | (2,931 | ) | (2,560 | ) | (1,631 | ) | (239 | ) | — | (7,361 | ) | ||||||||||||||
Foreign currency gain | — | 1,272 | — | — | — | 1,272 | |||||||||||||||||||
Loss on life settlement contracts | (429 | ) | (374 | ) | (238 | ) | (35 | ) | — | (1,076 | ) | ||||||||||||||
Acquisition gain on purchase | — | 25,532 | — | — | — | 25,532 | |||||||||||||||||||
Provision for income taxes | (3,352 | ) | (10,598 | ) | (233 | ) | 52 | (1,978 | ) | (16,109 | ) | ||||||||||||||
Equity in earnings of unconsolidated subsidiary – related party | — | — | — | — | 1,550 | 1,550 | |||||||||||||||||||
Net income attributable to AmTrust Financial Services, Inc. | $ | 17,268 | $ | 54,607 | $ | 1,202 | $ | (267 | ) | $ | 10,191 | $ | 83,001 | ||||||||||||
Long Lived Assets and Total Assets of Business Segments | ' | ||||||||||||||||||||||||
The following tables summarize long lived assets and total assets of the business segments as of March 31, 2014 and December 31, 2013: | |||||||||||||||||||||||||
(Amounts in Thousands) | Small Commercial Business | Specialty Risk and Extended Warranty | Specialty Program | Personal Lines Reinsurance - Run off | Corporate and other | Total | |||||||||||||||||||
As of March 31, 2014: | |||||||||||||||||||||||||
Property and equipment, net | $ | 60,980 | $ | 29,045 | $ | 18,190 | $ | — | $ | — | $ | 108,215 | |||||||||||||
Goodwill and intangible assets | 230,415 | 408,095 | 54,526 | — | — | 693,036 | |||||||||||||||||||
Total assets | 5,444,100 | 4,820,424 | 1,925,866 | 24,523 | — | 12,214,913 | |||||||||||||||||||
As of December 31, 2013: | |||||||||||||||||||||||||
Property and equipment, net | $ | 42,054 | $ | 38,297 | $ | 22,280 | $ | 1,668 | $ | — | $ | 104,299 | |||||||||||||
Goodwill and intangible assets | 233,566 | 399,954 | 31,873 | — | — | 665,393 | |||||||||||||||||||
Total assets | 4,257,302 | 5,021,556 | 1,891,991 | 86,560 | — | 11,257,409 | |||||||||||||||||||
Investments_Amortized_Cost_Est
Investments - Amortized Cost, Estimated Market Value and Gross Unrealized Appreciation and Depreciation of Available-for-sale Securities (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Original or amortized cost | $3,959,550 | $3,439,629 |
Gross unrealized gains | 94,017 | 64,005 |
Gross unrealized losses | -47,033 | -76,032 |
Market value | 4,006,534 | 3,427,602 |
Original and amortized cost, securities pledged | 105,306 | 316,576 |
Securities pledged, gross unrealized gains | 884 | 506 |
Securities pledged, gross unrealized losses | -1,638 | -5,564 |
Securities pledged as collateral | 104,552 | 311,518 |
Original and amortized cost, net of securities pledged | 3,854,244 | 3,123,053 |
Gross unrealized gains, net of securities pledged | 93,133 | 63,499 |
Gross unrealized losses, net of securities pledged | -45,395 | -70,468 |
Fair value, net of securities pledged | 3,901,982 | 3,116,084 |
Preferred stock | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Original or amortized cost | 4,243 | 1,498 |
Gross unrealized gains | 293 | 82 |
Gross unrealized losses | -94 | -74 |
Market value | 4,442 | 1,506 |
Common stock | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Original or amortized cost | 61,735 | 14,512 |
Gross unrealized gains | 3,159 | 1,156 |
Gross unrealized losses | -1,949 | -2,026 |
Market value | 62,945 | 13,642 |
U.S. treasury securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Original or amortized cost | 105,743 | 158,915 |
Gross unrealized gains | 1,375 | 1,196 |
Gross unrealized losses | -200 | -851 |
Market value | 106,918 | 159,260 |
U.S. government agencies | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Original or amortized cost | 26,139 | 10,466 |
Gross unrealized gains | 657 | 107 |
Gross unrealized losses | -63 | -84 |
Market value | 26,733 | 10,489 |
Municipal bonds | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Original or amortized cost | 506,648 | 461,325 |
Gross unrealized gains | 8,691 | 4,781 |
Gross unrealized losses | -11,781 | -19,923 |
Market value | 503,558 | 446,183 |
Foreign government | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Original or amortized cost | 163,146 | 160,459 |
Gross unrealized gains | 2,376 | 971 |
Gross unrealized losses | -675 | -1,325 |
Market value | 164,847 | 160,105 |
Finance | Corporate bonds | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Original or amortized cost | 1,151,801 | 1,057,542 |
Gross unrealized gains | 47,877 | 41,027 |
Gross unrealized losses | -8,360 | -13,970 |
Market value | 1,191,318 | 1,084,599 |
Industrial | Corporate bonds | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Original or amortized cost | 981,336 | 768,161 |
Gross unrealized gains | 18,414 | 7,695 |
Gross unrealized losses | -11,117 | -21,439 |
Market value | 988,633 | 754,417 |
Utilities | Corporate bonds | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Original or amortized cost | 105,001 | 70,924 |
Gross unrealized gains | 1,600 | 1,310 |
Gross unrealized losses | -1,266 | -2,008 |
Market value | 105,335 | 70,226 |
Commercial mortgage backed securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Original or amortized cost | 38,941 | 28,970 |
Gross unrealized gains | 309 | 0 |
Gross unrealized losses | -230 | -404 |
Market value | 39,020 | 28,566 |
Agency, residential mortgage backed securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Original or amortized cost | 796,621 | 694,001 |
Gross unrealized gains | 9,196 | 5,657 |
Gross unrealized losses | -11,293 | -13,918 |
Market value | 794,524 | 685,740 |
Non-agency, residential mortgage backed securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Original or amortized cost | 13,536 | 6,737 |
Gross unrealized gains | 68 | 19 |
Gross unrealized losses | -2 | -7 |
Market value | 13,602 | 6,749 |
Asset-backed Securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Original or amortized cost | 4,660 | 6,119 |
Gross unrealized gains | 2 | 4 |
Gross unrealized losses | -3 | -3 |
Market value | $4,659 | $6,120 |
Investments_Summary_of_Availab
Investments - Summary of Available for Sale Fixed Securities by Contractual Maturity (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Total fixed maturities | $3,788,266 | $3,107,043 |
Total fixed maturities | 3,834,595 | 3,100,936 |
Fixed maturities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Due in one year or less | 133,632 | 128,128 |
Due after one through five years | 654,077 | 592,703 |
Due after five through ten years | 1,894,126 | 1,632,115 |
Due after ten years | 357,979 | 334,846 |
Mortgage and asset backed securities | 853,758 | 735,827 |
Total fixed maturities | 3,893,572 | 3,423,619 |
Due in one year or less | 133,833 | 128,214 |
Due after one through five years | 668,005 | 603,942 |
Due after five through ten years | 1,933,571 | 1,631,751 |
Due after ten years | 351,934 | 321,372 |
Mortgage and asset backed securities | 851,804 | 727,175 |
Total fixed maturities | $3,939,147 | $3,412,454 |
Investments_Net_Investment_Inc
Investments - Net Investment Income (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' |
Gross investment income | $29,159 | $18,718 |
Less: Investment expenses and interest expense on securities sold under agreement to repurchase | -632 | -623 |
Net investment income | 28,527 | 18,095 |
Fixed maturities | ' | ' |
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' |
Gross investment income | 27,672 | 17,272 |
Equity securities | ' | ' |
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' |
Gross investment income | 59 | 402 |
Cash and cash equivalents | ' | ' |
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' |
Gross investment income | $1,428 | $1,044 |
Investments_OTTI_Details
Investments - OTTI (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | ' | ' |
Other than Temporary Impairment Losses, Investments, Portion Recognized in Earnings, Net, Available-for-sale Securities | $1,643 | $0 |
Equity securities | ' | ' |
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | ' | ' |
Other than Temporary Impairment Losses, Investments, Portion Recognized in Earnings, Net, Available-for-sale Securities | 1,643 | 0 |
Fixed maturities | ' | ' |
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | ' | ' |
Other than Temporary Impairment Losses, Investments, Portion Recognized in Earnings, Net, Available-for-sale Securities | $0 | $0 |
Investments_Summary_of_Gross_U
Investments - Summary of Gross Unrealized Losses of Fixed-maturities and Equity Securities (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | Contract | Contract |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair Market Value | $1,504,598 | $1,953,641 |
Unrealized Losses | -44,514 | -73,288 |
No. of Positions Held | 1,080 | 1,012 |
Fair Market Value | 68,360 | 87,497 |
Unrealized Losses | -2,519 | -2,744 |
No. of Positions Held | 25 | 22 |
Total Fair Market Value | 1,572,958 | 2,041,138 |
Total Unrealized Losses | -47,033 | -76,032 |
Common and preferred stock | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair Market Value | 25,402 | 4,875 |
Unrealized Losses | -1,978 | -2,100 |
No. of Positions Held | 125 | 51 |
Fair Market Value | 130 | 0 |
Unrealized Losses | -65 | 0 |
No. of Positions Held | 6 | 0 |
Total Fair Market Value | 25,532 | 4,875 |
Total Unrealized Losses | -2,043 | -2,100 |
U.S. treasury securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair Market Value | 45,520 | 52,757 |
Unrealized Losses | -200 | -851 |
No. of Positions Held | 37 | 18 |
Fair Market Value | 0 | 0 |
Unrealized Losses | 0 | 0 |
No. of Positions Held | 0 | 0 |
Total Fair Market Value | 45,520 | 52,757 |
Total Unrealized Losses | -200 | -851 |
US Government and Government Agencies and Authorities [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair Market Value | 4,864 | 4,135 |
Unrealized Losses | -63 | -84 |
No. of Positions Held | 14 | 11 |
Fair Market Value | 0 | 0 |
Unrealized Losses | 0 | 0 |
No. of Positions Held | 0 | 0 |
Total Fair Market Value | 4,864 | 4,135 |
Total Unrealized Losses | -63 | -84 |
Municipal bonds | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair Market Value | 221,785 | 254,219 |
Unrealized Losses | -9,883 | -17,986 |
No. of Positions Held | 275 | 302 |
Fair Market Value | 19,375 | 24,169 |
Unrealized Losses | -1,898 | -1,937 |
No. of Positions Held | 9 | 9 |
Total Fair Market Value | 241,160 | 278,388 |
Total Unrealized Losses | -11,781 | -19,923 |
Foreign government | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair Market Value | 72,153 | 68,102 |
Unrealized Losses | -675 | -1,324 |
No. of Positions Held | 30 | 16 |
Fair Market Value | 0 | 999 |
Unrealized Losses | 0 | -1 |
No. of Positions Held | 0 | 1 |
Total Fair Market Value | 72,153 | 69,101 |
Total Unrealized Losses | -675 | -1,325 |
Finance | Corporate bonds | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair Market Value | 344,076 | 500,564 |
Unrealized Losses | -8,116 | -13,402 |
No. of Positions Held | 223 | 182 |
Fair Market Value | 45,043 | 58,923 |
Unrealized Losses | -244 | -568 |
No. of Positions Held | 7 | 9 |
Total Fair Market Value | 389,119 | 559,487 |
Total Unrealized Losses | -8,360 | -13,970 |
Industrial | Corporate bonds | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair Market Value | 366,521 | 500,366 |
Unrealized Losses | -10,806 | -21,203 |
No. of Positions Held | 228 | 263 |
Fair Market Value | 3,790 | 3,383 |
Unrealized Losses | -311 | -236 |
No. of Positions Held | 2 | 2 |
Total Fair Market Value | 370,311 | 503,749 |
Total Unrealized Losses | -11,117 | -21,439 |
Utilities | Corporate bonds | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair Market Value | 32,584 | 45,663 |
Unrealized Losses | -1,266 | -2,008 |
No. of Positions Held | 16 | 21 |
Fair Market Value | 0 | 0 |
Unrealized Losses | 0 | 0 |
No. of Positions Held | 0 | 0 |
Total Fair Market Value | 32,584 | 45,663 |
Total Unrealized Losses | -1,266 | -2,008 |
Commercial mortgage backed securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair Market Value | 6,415 | 28,552 |
Unrealized Losses | -230 | -404 |
No. of Positions Held | 12 | 18 |
Fair Market Value | 0 | 0 |
Unrealized Losses | 0 | 0 |
No. of Positions Held | 0 | 0 |
Total Fair Market Value | 6,415 | 28,552 |
Total Unrealized Losses | -230 | -404 |
Agency, residential mortgage backed securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair Market Value | 382,413 | 492,740 |
Unrealized Losses | -11,293 | -13,918 |
No. of Positions Held | 109 | 120 |
Fair Market Value | 0 | 0 |
Unrealized Losses | 0 | 0 |
No. of Positions Held | 0 | 0 |
Total Fair Market Value | 382,413 | 492,740 |
Total Unrealized Losses | -11,293 | -13,918 |
Non-agency, residential mortgage backed securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair Market Value | 152 | 205 |
Unrealized Losses | -1 | -5 |
No. of Positions Held | 5 | 6 |
Fair Market Value | 22 | 23 |
Unrealized Losses | -1 | -2 |
No. of Positions Held | 1 | 1 |
Total Fair Market Value | 174 | 228 |
Total Unrealized Losses | -2 | -7 |
Asset-backed Securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair Market Value | 2,713 | 1,463 |
Unrealized Losses | -3 | -3 |
No. of Positions Held | 6 | 4 |
Fair Market Value | 0 | 0 |
Unrealized Losses | 0 | 0 |
No. of Positions Held | 0 | 0 |
Total Fair Market Value | 2,713 | 1,463 |
Total Unrealized Losses | ($3) | ($3) |
Investments_Notional_Amounts_o
Investments - Notional Amounts of Interest Rate Swaps by Remaining Maturity (Details) (Interest Rate Swap [Member], USD $) | Mar. 31, 2014 | |
In Thousands, unless otherwise specified | ||
Interest Rate Swap [Member] | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | |
One Year | $0 | [1] |
Two Through Five Years | 70,000 | [1] |
Six Through Ten Years | 0 | [1] |
After Ten years | 0 | [1] |
Total | $70,000 | [1] |
[1] | Notional amount is not representative of either market risk or credit risk and is not recorded in the consolidated balance sheet. |
Investments_Fair_Values_of_Res
Investments - Fair Values of Restricted Assets (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Investments, Debt and Equity Securities [Abstract] | ' | ' |
Restricted cash | $143,143 | $100,439 |
Restricted investments | 877,461 | 978,910 |
Total restricted cash and investments | $1,020,604 | $1,079,349 |
Investments_Additional_Informa
Investments - Additional Information (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 |
Investment | Investment | ||
agreements | |||
Derivative | |||
Investment [Line Items] | ' | ' | ' |
Securities sold but not yet purchased, at market | $21,471 | ' | $0 |
Number of repurchase agreements | 4 | ' | ' |
Proceeds from the sale of investments in available-for-sale securities | 381,393 | 472,076 | ' |
Number of securities account for gross unrealized loss | 1,105 | ' | 1,034 |
Number of interest rate swaps | 2 | ' | ' |
Interest rate swaps liability | 2,759 | ' | 3,054 |
Securities sold under agreements to repurchase, principal amount | 94,162 | ' | 293,222 |
Securities sold under agreements to repurchase, interest expense | 249 | 277 | ' |
Securities pledged as collateral | 104,552 | ' | 311,518 |
Minimum | ' | ' | ' |
Investment [Line Items] | ' | ' | ' |
Securities sold under agreements to repurchase, interest rates | 0.24% | ' | ' |
Equity securities | ' | ' | ' |
Investment [Line Items] | ' | ' | ' |
Securities sold but not yet purchased, at market | $21,471 | ' | ' |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments - Assets and Financial Liabilities on Recurring Basis (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | $4,364,122 | $3,800,577 |
Fair Value of liabilities | 131,740 | 308,221 |
Equity securities sold but not yet purchased, market | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair Value of liabilities | 21,471 | ' |
Securities sold under agreements to repurchase, at carrying value | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair Value of liabilities | 94,162 | 293,222 |
Life settlement contract profit commission | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair Value of liabilities | 13,348 | 11,945 |
Derivatives | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair Value of liabilities | 2,759 | 3,054 |
U.S. treasury securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 106,918 | 110,345 |
U.S. government agencies | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 26,733 | 10,489 |
Municipal bonds | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 503,558 | 446,183 |
Foreign government | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 164,847 | 160,105 |
Finance | Corporate bonds | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 1,191,318 | 1,084,599 |
Industrial | Corporate bonds | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 988,633 | 754,417 |
Utilities | Corporate bonds | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 105,335 | 70,226 |
Commercial mortgage backed securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 39,020 | 28,566 |
Agency, residential mortgage backed securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 689,972 | 423,137 |
Non-agency, residential mortgage backed securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 13,602 | 6,749 |
Asset-backed Securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 4,659 | 6,120 |
Equity securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 67,387 | 15,148 |
Short term investments | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 71,223 | 114,202 |
Other investments | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 18,166 | 25,749 |
Securities Held as Collateral [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 104,552 | 311,518 |
Life settlement contracts | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 268,199 | 233,024 |
Fair Value, Inputs, Level 1 | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 245,528 | 288,610 |
Fair Value of liabilities | 21,471 | 0 |
Fair Value, Inputs, Level 1 | Equity securities sold but not yet purchased, market | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair Value of liabilities | 21,471 | ' |
Fair Value, Inputs, Level 1 | Securities sold under agreements to repurchase, at carrying value | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair Value of liabilities | 0 | 0 |
Fair Value, Inputs, Level 1 | Life settlement contract profit commission | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair Value of liabilities | 0 | 0 |
Fair Value, Inputs, Level 1 | Derivatives | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair Value of liabilities | 0 | 0 |
Fair Value, Inputs, Level 1 | U.S. treasury securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 106,918 | 110,345 |
Fair Value, Inputs, Level 1 | U.S. government agencies | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 0 | 0 |
Fair Value, Inputs, Level 1 | Municipal bonds | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 0 | 0 |
Fair Value, Inputs, Level 1 | Foreign government | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 0 | ' |
Fair Value, Inputs, Level 1 | Finance | Corporate bonds | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 0 | 0 |
Fair Value, Inputs, Level 1 | Industrial | Corporate bonds | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 0 | 0 |
Fair Value, Inputs, Level 1 | Utilities | Corporate bonds | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 0 | 0 |
Fair Value, Inputs, Level 1 | Commercial mortgage backed securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 0 | 0 |
Fair Value, Inputs, Level 1 | Agency, residential mortgage backed securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 0 | 0 |
Fair Value, Inputs, Level 1 | Non-agency, residential mortgage backed securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 0 | 0 |
Fair Value, Inputs, Level 1 | Asset-backed Securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 0 | ' |
Fair Value, Inputs, Level 1 | Equity securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 67,387 | 15,148 |
Fair Value, Inputs, Level 1 | Short term investments | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 71,223 | 114,202 |
Fair Value, Inputs, Level 1 | Other investments | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 0 | 0 |
Fair Value, Inputs, Level 1 | Securities Held as Collateral [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 0 | 48,915 |
Fair Value, Inputs, Level 1 | Life settlement contracts | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 0 | 0 |
Fair Value, Inputs, Level 2 | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 3,832,229 | 3,253,194 |
Fair Value of liabilities | 96,921 | 296,276 |
Fair Value, Inputs, Level 2 | Equity securities sold but not yet purchased, market | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair Value of liabilities | 0 | ' |
Fair Value, Inputs, Level 2 | Securities sold under agreements to repurchase, at carrying value | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair Value of liabilities | 94,162 | 293,222 |
Fair Value, Inputs, Level 2 | Life settlement contract profit commission | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair Value of liabilities | 0 | 0 |
Fair Value, Inputs, Level 2 | Derivatives | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair Value of liabilities | 2,759 | 3,054 |
Fair Value, Inputs, Level 2 | U.S. treasury securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 0 | 0 |
Fair Value, Inputs, Level 2 | U.S. government agencies | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 26,733 | 10,489 |
Fair Value, Inputs, Level 2 | Municipal bonds | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 503,558 | 446,183 |
Fair Value, Inputs, Level 2 | Foreign government | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 164,847 | 160,105 |
Fair Value, Inputs, Level 2 | Finance | Corporate bonds | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 1,191,318 | 1,084,599 |
Fair Value, Inputs, Level 2 | Industrial | Corporate bonds | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 988,633 | 754,417 |
Fair Value, Inputs, Level 2 | Utilities | Corporate bonds | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 105,335 | 70,226 |
Fair Value, Inputs, Level 2 | Commercial mortgage backed securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 39,020 | 28,566 |
Fair Value, Inputs, Level 2 | Agency, residential mortgage backed securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 689,972 | 423,137 |
Fair Value, Inputs, Level 2 | Non-agency, residential mortgage backed securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 13,602 | 6,749 |
Fair Value, Inputs, Level 2 | Asset-backed Securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 4,659 | 6,120 |
Fair Value, Inputs, Level 2 | Equity securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 0 | 0 |
Fair Value, Inputs, Level 2 | Short term investments | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 0 | 0 |
Fair Value, Inputs, Level 2 | Other investments | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 0 | 0 |
Fair Value, Inputs, Level 2 | Securities Held as Collateral [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 104,552 | 262,603 |
Fair Value, Inputs, Level 2 | Life settlement contracts | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 0 | 0 |
Fair Value, Inputs, Level 3 | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 286,365 | 258,773 |
Fair Value of liabilities | 13,348 | 11,945 |
Fair Value, Inputs, Level 3 | Equity securities sold but not yet purchased, market | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair Value of liabilities | 0 | ' |
Fair Value, Inputs, Level 3 | Securities sold under agreements to repurchase, at carrying value | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair Value of liabilities | 0 | 0 |
Fair Value, Inputs, Level 3 | Life settlement contract profit commission | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair Value of liabilities | 13,348 | 11,945 |
Fair Value, Inputs, Level 3 | Derivatives | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair Value of liabilities | 0 | 0 |
Fair Value, Inputs, Level 3 | U.S. treasury securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 0 | 0 |
Fair Value, Inputs, Level 3 | U.S. government agencies | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 0 | 0 |
Fair Value, Inputs, Level 3 | Municipal bonds | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 0 | 0 |
Fair Value, Inputs, Level 3 | Foreign government | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 0 | ' |
Fair Value, Inputs, Level 3 | Finance | Corporate bonds | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 0 | 0 |
Fair Value, Inputs, Level 3 | Industrial | Corporate bonds | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 0 | 0 |
Fair Value, Inputs, Level 3 | Utilities | Corporate bonds | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 0 | 0 |
Fair Value, Inputs, Level 3 | Commercial mortgage backed securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 0 | 0 |
Fair Value, Inputs, Level 3 | Agency, residential mortgage backed securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 0 | 0 |
Fair Value, Inputs, Level 3 | Non-agency, residential mortgage backed securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 0 | 0 |
Fair Value, Inputs, Level 3 | Asset-backed Securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 0 | ' |
Fair Value, Inputs, Level 3 | Equity securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 0 | 0 |
Fair Value, Inputs, Level 3 | Short term investments | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 0 | 0 |
Fair Value, Inputs, Level 3 | Other investments | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 18,166 | 25,749 |
Fair Value, Inputs, Level 3 | Securities Held as Collateral [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | 0 | 0 |
Fair Value, Inputs, Level 3 | Life settlement contracts | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of assets | $268,199 | $233,024 |
Fair_Value_of_Financial_Instru3
Fair Value of Financial Instruments - Changes in Fair Value of Level 3 Financial Assets And Liabilities (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' |
Beginning Balance | $246,828 | $193,321 |
Net income | 17,698 | 10,132 |
Other comprehensive income | 0 | 0 |
Purchases and issuances | 26,422 | 5,111 |
Sales and settlements | -17,931 | -4,925 |
Net transfers into (out of) Level 3 | 0 | 0 |
Ending Balance | 273,017 | 203,639 |
Other investments | ' | ' |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' |
Beginning Balance | 25,749 | 11,144 |
Net income | 2,114 | 694 |
Other comprehensive income | 0 | 0 |
Purchases and issuances | 3,207 | 5,111 |
Sales and settlements | -12,904 | -897 |
Net transfers into (out of) Level 3 | 0 | 0 |
Ending Balance | 18,166 | 16,052 |
Life settlement contracts | ' | ' |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' |
Beginning Balance | 233,024 | 193,927 |
Net income | 16,987 | 9,925 |
Other comprehensive income | 0 | 0 |
Purchases and issuances | 23,215 | 0 |
Sales and settlements | -5,027 | -4,028 |
Net transfers into (out of) Level 3 | 0 | 0 |
Ending Balance | 268,199 | 199,824 |
Life settlement contract profit commission | ' | ' |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' |
Beginning Balance | -11,945 | -11,750 |
Net income | -1,403 | -487 |
Other comprehensive income | 0 | 0 |
Purchases and issuances | 0 | 0 |
Sales and settlements | 0 | 0 |
Net transfers into (out of) Level 3 | 0 | 0 |
Ending Balance | ($13,348) | ($12,237) |
Fair_Value_of_Financial_Instru4
Fair Value of Financial Instruments - Reconciliation (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Net income | $17,698 | $10,132 |
Gain (loss) on investment in life settlement contracts net of profit commission | 2,800 | -1,076 |
Life settlement contracts | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Net income | 16,987 | 9,925 |
Premiums paid | -11,394 | -9,427 |
Other Expenses | -1,390 | -1,087 |
Gain (loss) on investment in life settlement contracts net of profit commission | 2,800 | -1,076 |
Life settlement contract profit commission | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Net income | ($1,403) | ($487) |
Fair_Value_of_Financial_Instru5
Fair Value of Financial Instruments - Fair Value of Portfolio of Life Insurance Policies (Detail) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 | ||
Life Settlement Contracts, Fair Value Method [Abstract] | ' | ' | ||
Average age of insured | '80 years 4 months 30 days | '80 years 1 month 6 days | ||
Average life expectancy, months | '127 months | [1] | '131 months | [1] |
Average face amount per policy | $6,692 | $6,611 | ||
Implicit discount rate | 14.40% | [2] | 14.20% | [2] |
[1] | Standard life expectancy as adjusted for specific circumstances. | |||
[2] | Effective Discount Rate ("EDR") is the Company's estimated internal rate of return on its life settlement contract portfolio and is determined from the gross expected cash flows and valuation of the portfolio. The valuation of the portfolio is calculated net of all reserves using a 7.5% discount rate. The EDR is implicit of the reserves and the gross expected cash flows of the portfolio. The Company anticipates that the EDR's range is between 12.5% and 17.5% and reflects the uncertainty that exists surrounding the information available as of the reporting date. As the accuracy and reliability of information improves (declines), the EDR will decrease (increase). The increase in the EDR from December 31, 2013 to March 31, 2014 resulted from routine updating of life expectancies and other factors relating to operational risk. |
Fair_Value_of_Financial_Instru6
Fair Value of Financial Instruments - Increase or (Decrease) in Carrying Value of Investment in Life Insurance Policies (Detail) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 | ||
Life Settlement Contracts, Fair Value Method [Abstract] | ' | ' | ||
Life expectancy Plus 4 Months | ($33,032) | ($29,537) | ||
Life expectancy Minus 4 Months | 34,621 | 31,313 | ||
Discount Plus 1% | -22,413 | [1] | -20,055 | [1] |
Discount Minus 1% | $25,228 | [1] | $22,605 | [1] |
[1] | Discount rate is a present value calculation that considers legal risk, credit risk and liquidity risk and is a component of EDR. |
Fair_Value_of_Financial_Instru7
Fair Value of Financial Instruments - Additional Information (Details) (USD $) | 3 Months Ended | 12 Months Ended | 3 Months Ended | ||||||||||||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Feb. 28, 2014 | Jan. 31, 2014 | Mar. 31, 2014 | Aug. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | ||||
Senior Notes | Subordinate Debenture | NGHC | NGHC | NGHC | 6.125% Senior Note | 6.125% Senior Note | Minimum | Maximum | |||||||
Senior Notes | Senior Notes | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Fair value | ' | ' | $294,762 | $69,250 | ' | ' | ' | $248,293 | ' | ' | ' | ||||
Debt instrument, stated interest rate | 5.50% | ' | ' | ' | ' | ' | ' | 6.13% | 6.13% | ' | ' | ||||
Investment discount rate | 7.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Maximum investment in Limited Partnership and Hedge Funds | 0.40% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Percentage of ownership in NGHC | ' | ' | ' | ' | 13.20% | 13.20% | 15.40% | ' | ' | ' | ' | ||||
Discount rate | 7.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Implicit discount rate | 14.40% | [1] | 14.20% | [1] | ' | ' | ' | ' | ' | ' | ' | 12.50% | [1] | 17.50% | [1] |
Fair value of investment in NGHC | $172,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
[1] | Effective Discount Rate ("EDR") is the Company's estimated internal rate of return on its life settlement contract portfolio and is determined from the gross expected cash flows and valuation of the portfolio. The valuation of the portfolio is calculated net of all reserves using a 7.5% discount rate. The EDR is implicit of the reserves and the gross expected cash flows of the portfolio. The Company anticipates that the EDR's range is between 12.5% and 17.5% and reflects the uncertainty that exists surrounding the information available as of the reporting date. As the accuracy and reliability of information improves (declines), the EDR will decrease (increase). The increase in the EDR from December 31, 2013 to March 31, 2014 resulted from routine updating of life expectancies and other factors relating to operational risk. |
Investment_in_Life_Settlements2
Investment in Life Settlements - Additional Information (Detail) (USD $) | 3 Months Ended | 3 Months Ended | 3 Months Ended | |||||||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Aug. 31, 2011 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 |
Tiger Capital LLC | NGHC | NGHC | Life settlement contracts | Life settlement contracts | Life settlement contracts | Life settlement contracts | ||||
Contract | AmTrust | AmTrust | ||||||||
Schedule of Cost-method Investments [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of ownership interest | ' | ' | ' | ' | 13.20% | 13.20% | ' | ' | ' | ' |
Profits and losses of investment in life insurance policies and premium finance loans | 56.60% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Capital contributions | ' | ' | ' | ' | ' | ' | $3,125 | $4,397 | $1,375 | $2,188 |
Investments in life settlements and cash value loans | 268,199 | ' | 233,024 | ' | ' | ' | ' | ' | ' | ' |
Gain (loss) on investment in life settlement contracts net of profit commission | 2,800 | -1,076 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of premium finance loans | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' |
Value of premium finance loans | ' | ' | ' | $0 | ' | ' | ' | ' | ' | ' |
Investment_in_Life_Settlements3
Investment in Life Settlements (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | Contract | Contract | policy | ||
Number of Life Settlement Contracts | ' | ' | ' | ||
0-1 | 0 | 0 | 0 | ||
2-Jan | 3 | 0 | 0 | ||
3-Feb | 8 | 1 | 1 | ||
4-Mar | 7 | 13 | 13 | ||
5-Apr | 3 | 2 | 2 | ||
Thereafter | 267 | 255 | 255 | ||
Total | 288 | 271 | 271 | ||
Fair Value | ' | ' | ' | ||
0-1 | $0 | [1] | ' | $0 | [1] |
2-Jan | 17,236 | [1] | ' | 0 | [1] |
3-Feb | 43,069 | [1] | ' | 2,726 | [1] |
4-Mar | 15,824 | [1] | ' | 53,767 | [1] |
5-Apr | 7,886 | [1] | ' | 5,622 | [1] |
Thereafter | 184,184 | [1] | ' | 170,909 | [1] |
Total | 268,199 | [1] | ' | 233,024 | [1] |
Face Value | ' | ' | ' | ||
0-1 | 0 | ' | 0 | ||
2-Jan | 25,000 | ' | 0 | ||
3-Feb | 73,000 | ' | 5,000 | ||
4-Mar | 38,000 | ' | 103,000 | ||
5-Apr | 20,000 | ' | 13,000 | ||
Thereafter | 1,718,409 | ' | 1,641,409 | ||
Total | $1,874,409 | ' | $1,762,409 | ||
[1] | The Company determined the fair value as of March 31, 2014 based on 210 policies out of 288 policies, as the Company assigned no value to 78 of the policies as of March 31, 2014. The Company determined the fair value as of December 31, 2013 based on 191 policies out of 271 policies, as the Company assigned no value to 80 of the policies as of December 31, 2013. The Company estimated the fair value of a life insurance policy using a cash flow model with an appropriate discount rate. In some cases, the cash flow model calculates the value of an individual policy to be negative, and therefore the fair value of the policy is zero as no liability exists when a negative value is calculated. The Company is not contractually bound to pay the premium on its life settlement contracts and, therefore, would not pay a willing buyer to assume title of these contracts. Additionally, certain of the Company's acquired policies were structured to have low premium payments at inception of the policy term, which later escalate greatly towards the tail end of the policy term. At the current time, the Company expenses all premium paid, even on policies with zero fair value. Once the premium payments escalate, the Company may allow the policies to lapse. In the event that death benefits are realized in the time frame between initial acquisition and premium escalation, it is a benefit to cash flow. |
Investment_in_Life_Settlements4
Investment in Life Settlements - Additional Information (Parenthetical) (Detail) (USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 |
policy | policy | |
Contract | Contract | |
Investments, All Other Investments [Abstract] | ' | ' |
Life settlement contracts, number of contracts with fair value | 210 | 191 |
Total number of Life Settlement Contracts | 288 | 271 |
Life settlement contracts, number of contracts with no fair value | 78 | 80 |
Premiums paid for the preceding twelve month period for period ended | $9,114 | $9,371 |
Death benefit received | $3,012 | $3,012 |
Investment_in_Life_Settlements5
Investment in Life Settlements - Premiums to be Paid (Detail) (Premiums Due On Life Settlement Contracts, USD $) | Mar. 31, 2014 |
In Thousands, unless otherwise specified | |
Premiums Due On Life Settlement Contracts | ' |
Life Insurance Premiums and Related Investment Income [Line Items] | ' |
2014 | $39,790 |
2015 | 42,339 |
2016 | 62,240 |
2017 | 40,309 |
2018 | 38,319 |
Thereafter | 583,031 |
Total | $806,028 |
Debt_Borrowings_Detail
Debt - Borrowings (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Debt Disclosure [Abstract] | ' | ' |
Revolving credit facility | $0 | $0 |
Convertible senior notes | 165,006 | 164,218 |
6.125% Notes due 2023 | 250,000 | 250,000 |
Subordinated debentures | 123,714 | 123,714 |
Secured loan agreements | 7,476 | 7,742 |
Promissory notes | 14,500 | 14,500 |
Debt, Long-term and Short-term, Combined Amount, Total | $560,696 | $560,174 |
Debt_Aggregate_Scheduled_Matur
Debt - Aggregate Scheduled Maturities of Borrowings (Detail) (USD $) | Mar. 31, 2014 | |
In Thousands, unless otherwise specified | ||
Debt Disclosure [Abstract] | ' | |
2014 | $805 | |
2015 | 1,116 | |
2016 | 1,167 | |
2017 | 1,220 | |
2018 | 3,168 | |
Thereafter | $553,220 | [1] |
[1] | Amount reflected in balance sheet for convertible senior notes is net of unamortized original issue discount of $34,994. |
Debt_Aggregate_Scheduled_Matur1
Debt - Aggregate Scheduled Maturities of Borrowings (Parenthetical) (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Debt Disclosure [Abstract] | ' | ' |
Unamortized OID | $34,994 | $35,782 |
Debt_Amounts_Recorded_for_Note
Debt - Amounts Recorded for Notes (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Debt Disclosure [Abstract] | ' | ' |
Outstanding principal | $200,000 | $200,000 |
Unamortized OID | -34,994 | -35,782 |
Liability component | 165,006 | 164,218 |
Equity component, net of tax | $27,092 | $27,092 |
Debt_Trust_Preferred_Securitie
Debt - Trust Preferred Securities (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 |
Debt Instrument [Line Items] | ' | ' |
Aggregate Liquidation Amount of Trust Preferred Securities | $120,000 | ' |
Aggregate Liquidation Amount of Common Securities | 3,714 | ' |
Aggregate Principal Amount of Notes | 123,714 | 123,714 |
Stated Maturity of Notes | 15-Dec-21 | ' |
Per Annum Interest Rate of Notes | 5.50% | ' |
AmTrust Capital Financing Trust I | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Aggregate Liquidation Amount of Trust Preferred Securities | 25,000 | ' |
Aggregate Liquidation Amount of Common Securities | 774 | ' |
Aggregate Principal Amount of Notes | 25,774 | ' |
Stated Maturity of Notes | 17-Mar-35 | ' |
Per Annum Interest Rate of Notes | 8.28% | ' |
AmTrust Capital Financing Trust II | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Aggregate Liquidation Amount of Trust Preferred Securities | 25,000 | ' |
Aggregate Liquidation Amount of Common Securities | 774 | ' |
Aggregate Principal Amount of Notes | 25,774 | ' |
Stated Maturity of Notes | 15-Jun-35 | ' |
Per Annum Interest Rate of Notes | 7.71% | ' |
AmTrust Capital Financing Trust III | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Aggregate Liquidation Amount of Trust Preferred Securities | 30,000 | ' |
Aggregate Liquidation Amount of Common Securities | 928 | ' |
Aggregate Principal Amount of Notes | 30,928 | ' |
Stated Maturity of Notes | 15-Sep-36 | ' |
Per Annum Interest Rate of Notes | 353.30% | ' |
AmTrust Capital Financing Trust IV | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Aggregate Liquidation Amount of Trust Preferred Securities | 40,000 | ' |
Aggregate Liquidation Amount of Common Securities | 1,238 | ' |
Aggregate Principal Amount of Notes | $41,238 | ' |
Stated Maturity of Notes | 15-Mar-37 | ' |
Per Annum Interest Rate of Notes | 323.30% | ' |
Debt_Trust_Preferred_Securitie1
Debt - Trust Preferred Securities (Parenthetical) (Detail) (LIBOR) | 3 Months Ended |
Mar. 31, 2014 | |
After tenth anniversary in 2015 | ' |
Debt Instrument [Line Items] | ' |
Debt instrument interest rate, margin | 3.40% |
After fifth anniversary in 2011 | ' |
Debt Instrument [Line Items] | ' |
Debt instrument interest rate, margin | 3.30% |
After fifth anniversary in 2012 | ' |
Debt Instrument [Line Items] | ' |
Debt instrument interest rate, margin | 3.00% |
Debt_Additional_Information_De
Debt - Additional Information (Detail) | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 2 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 3 Months Ended | 2 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 3 Months Ended | ||||||||||||||||||||||||||||||||||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Nov. 26, 2013 | Feb. 28, 2011 | Mar. 31, 2014 | Mar. 31, 2014 | Aug. 31, 2011 | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Aug. 10, 2012 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Aug. 10, 2012 | Mar. 31, 2014 | Mar. 31, 2014 | Aug. 10, 2012 | Sep. 30, 2013 | Mar. 31, 2014 | Aug. 31, 2013 | Aug. 31, 2013 | Mar. 31, 2014 | Aug. 31, 2013 | Feb. 28, 2011 | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2011 | Mar. 31, 2013 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Sep. 30, 2012 | Mar. 31, 2014 | 31-May-13 | 31-May-13 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Sep. 30, 2013 | Sep. 30, 2013 | Aug. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Sep. 30, 2012 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Nov. 26, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | |
USD ($) | USD ($) | GBP (£) | USD ($) | subsidiary | After tenth anniversary in 2015 | After fifth anniversary in 2011 | 800 Superior LLC | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Letter of Credit | Letter of Credit | Senior Notes | Senior Notes | Senior Notes | Senior Notes | Senior Notes | Senior Notes | Secured Loan | Secured Loan | Secured Loan | Secured Loan | Promissory Note | Promissory Note | Promissory Note | Promissory Note | 800 Superior LLC | MIHC | MIHC | MIHC | LIBOR | LIBOR | LIBOR | Increase in Leveraged Ratio by 30 Percent to 35 Percent | Increase in Leveraged Ratio by More than 35 Percent | Event of Default | State and Local Government of Ohio | State and Local Government of Ohio | State and Local Government of Ohio | State and Local Government of Ohio | Sagicor Europe Limited | Sagicor Europe Limited | Sagicor Europe Limited | Comerica Bank [Member] | Comerica Bank [Member] | ||
Derivative | USD ($) | USD ($) | USD ($) | Federal Funds Rate | One Month London Interbank Offered Rate [Member] | Maximum | Maximum | Minimum | USD ($) | USD ($) | 6.125% Senior Note | 6.125% Senior Note | 6.125% Senior Note | Maximum | Minimum | Minimum | USD ($) | USD ($) | USD ($) | 800 Superior LLC | 800 Superior LLC | 800 Superior LLC | ACP Re, Ltd | State and Local Government of Ohio | USD ($) | USD ($) | Promissory Note | After tenth anniversary in 2015 | After fifth anniversary in 2011 | Senior Notes | Senior Notes | Senior Notes | Promissory Note | Promissory Note | 800 Superior LLC | 800 Superior LLC | Letter of Credit | Letter of Credit | Letter of Credit | Comerica Letter of Credit Facility | |||||||||||||
USD ($) | USD ($) | USD ($) | 6.125% Senior Note | 6.125% Senior Note | 6.125% Senior Note | State and Local Government of Ohio | State and Local Government of Ohio | State and Local Government of Ohio | 800 Superior LLC | Loans | Minimum | Minimum | Maximum | USD ($) | USD ($) | Loans | Promissory Note | USD ($) | GBP (£) | USD ($) | |||||||||||||||||||||||||||||||||
USD ($) | USD ($) | USD ($) | 6.125% Senior Note | 6.125% Senior Note | 6.125% Senior Note | ||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of the debt instrument | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '7 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '15 years | ' | ' | ' | ' | ' | ' |
Average rate of interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.70% | ' | ' | ' | ' | ' |
Line of credit, maximum borrowing capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $200,000,000 | ' | ' | ' | $100,000,000 | ' | ' | $100,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | £ 200,000,000 | $75,000,000 | ' |
Letters of credit, outstanding amount | ' | ' | 194,293,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 88,469,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 323,767,000 | ' | 48,467,000 | ' |
Credit agreement, remaining borrowing capacity | ' | ' | 5,707,000 | ' | ' | ' | ' | ' | ' | 111,531,000 | ' | ' | ' | ' | ' | ' | ' | ' | 11,531,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,511,000 | ' | ' | ' |
Debt instrument, marginal interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.50% | 1.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.40% | 3.30% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Credit facility, Interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.50% | ' | 1.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | 340,000 | 560,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 87,000 | 101,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fronting fee percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.13% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commitment fee percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.25% | ' | ' | ' | ' | ' | 0.30% | ' | 0.20% | 1.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.40% |
Trust equity investment | 3,714,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Placement fees in connection with common securities issuance | 2,605,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense related to trust preferred securities | 2,020,000 | 1,999,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of interest swap agreements related to junior subordinated debentures | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maturity of interest rate swaps | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate principal amount of convertible senior notes issued | 200,000,000 | ' | ' | 200,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument, stated interest rate | 5.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6.13% | 6.13% | ' | ' | ' | 4.45% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.80% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fee for debt instrument | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,706,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase(decrease) in interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.50% | 1.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,897,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ratio of Indebtedness to Net Capital | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.35 | 0.3 | 0.3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.35 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of Days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '30 days | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Grace period in case of acquisition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '18 months | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate at period end | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.10% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible senior notes maturity year | '2021 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible senior notes interest payable month and day | ' | ' | ' | ' | ' | ' | '--06-15 | '--12-15 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Frequency of periodic payment | 'semiannually | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible senior notes maturity date | 15-Dec-21 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, par value | $0.01 | ' | ' | $0.01 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Conversion earlier date | 15-Sep-21 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion rate for conversion of convertible senior notes | 38.2129 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Principal amount of convertible notes | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Initial conversion price of per share of Common Stock | $26.17 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notes repurchase price, percentage | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument original discount | 41,679,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unamortized OID | 34,994,000 | ' | ' | 35,782,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred origination costs relating to the liability component | 4,750,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible senior notes effective interest rate | 8.57% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Transaction costs associated with the equity component | 1,250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense | 3,657,000 | 3,592,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 69,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of Subsidiaries | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument, face amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 250,000 | ' | ' | ' | 10,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Monthly installment payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 117,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument, maturity date range, end | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25-Feb-18 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balloon payment at maturity date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,240,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of outstanding balance of loan in excess of fair value of aircraft | ' | ' | ' | ' | ' | 90.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of loans | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' |
Notes Payable | 14,500,000 | ' | ' | 14,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,000,000 | ' | ' | ' | ' | 6,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense | 11,497,000 | 7,361,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12,000 | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 66,000 | 97,000 | ' | ' | ' | ' | ' | ' | ' |
Deferred Costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,430,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of ownership interests | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Availability of letters of credit | $22,210,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fee payable on secured portion of debt, percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.55% | ' | ' | ' |
Fee payable on unsecured portion of debt, percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.15% | ' | ' | ' |
Commitment fee for the unused capacity, percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.35% | ' | ' | ' |
Funding Percentage of Collateral Account | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' |
Funding Percentage Required of Collateral Account Upon Occurrence of Events | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' |
Acquisition_Costs_and_Other_Un2
Acquisition Costs and Other Underwriting Expenses (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Disclosure Summary Of Components Of Acquisition Costs And Other Underwriting Expenses [Abstract] | ' | ' |
Policy acquisition expenses | $94,251 | $37,730 |
Salaries and benefits | 77,855 | 45,129 |
Other insurance general and administrative expenses | 14,503 | 17,426 |
Acquisition costs and other underwriting expenses | $186,609 | $100,285 |
Earnings_Per_Share_Summary_of_
Earnings Per Share - Summary of Elements Used in Calculating Basic and Diluted Earnings Per Share (Detail) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Basic earnings per share: | ' | ' |
Net income attributable to AmTrust common shareholders | $99,851 | $83,878 |
Less: Net income allocated to participating securities and redeemable non-controlling interest | 216 | 319 |
Net income allocated to AmTrust common shareholders | 99,635 | 83,559 |
Weighted average common shares outstanding - basic (in shares) | 74,708 | 74,079 |
Less: Weighted average participating shares outstanding (in shares) | 161 | 268 |
Weighted average common shares outstanding - basic (in shares) | 74,547 | 73,811 |
Net income per AmTrust Financial Services, Inc. common share - basic (usd per share) | $1.34 | $1.13 |
Diluted earnings per share: | ' | ' |
Net income allocated to AmTrust Financial Services, Inc. common shareholders | 99,851 | 83,878 |
Less: Net income allocated to participating securities and redeemable non-controlling interest | 216 | 319 |
Net income allocated to AmTrust common shareholders | $99,635 | $83,559 |
Weighted average common shares outstanding - basic (in shares) | 74,547 | 73,811 |
Plus: Dilutive effect of stock options, convertible debt, other (in shares) | 3,897 | 3,514 |
Weighted average common shares outstanding - dilutive (in shares) | 78,444 | 77,325 |
Net income per AmTrust Financial Services, Inc. common shares - diluted (usd per share) | $1.27 | $1.08 |
Earnings_Per_Share_Additional_
Earnings Per Share - Additional Information (Detail) | 0 Months Ended | 1 Months Ended | 3 Months Ended |
In Thousands, unless otherwise specified | Sep. 04, 2013 | Sep. 20, 2012 | Mar. 31, 2014 |
Earnings Per Share [Abstract] | ' | ' | ' |
Stock dividend | 10.00% | 10.00% | ' |
Anti-dilutive securities excluded from diluted earnings per share | ' | ' | 20,000 |
Share_Based_Compensation_Addit
Share Based Compensation - Additional Information (Detail) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 3 Months Ended | ||||||
In Thousands, except Share data, unless otherwise specified | Sep. 04, 2013 | Sep. 20, 2012 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2010 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 |
Omnibus Incentive Plan | Omnibus Incentive Plan | Restricted Stock Units (RSUs) | Restricted Stock Units (RSUs) | Performance Share Units | Restricted Stock [Member] | |||||
Minimum | Maximum | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Intrensic value of the stock oprion exercised | ' | ' | $5,877 | $3,780 | ' | ' | ' | ' | ' | ' |
PSU's granted during the period | ' | ' | 680,842 | 90,146 | ' | ' | ' | ' | 159,713 | 347,875 |
Number of shares authorized for stock award, maximum | ' | ' | ' | ' | ' | 7,315,068 | ' | ' | ' | ' |
Common stock remained available for grants | ' | ' | ' | ' | 5,000,000 | ' | ' | ' | ' | ' |
Stock options, expiration term | ' | ' | '10 years | ' | ' | ' | ' | ' | ' | ' |
Share based award, vesting period | ' | ' | ' | ' | ' | ' | '2 years | '4 years | ' | ' |
Stock dividend | 10.00% | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Adjustment to options outstanding due to dividend paid | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Decrease in exercise price due to dividends paid | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise period of vested option after employment relationship end | ' | ' | '3 months | ' | ' | ' | ' | ' | ' | ' |
Weighted average grant date fair value of options granted | ' | ' | $14.16 | $8.91 | ' | ' | ' | ' | ' | ' |
Intrinsic value of stock options | ' | ' | 74,644 | 88,256 | ' | ' | ' | ' | ' | ' |
Stock option exercise and other | ' | ' | 1,558 | 975 | ' | ' | ' | ' | ' | ' |
Fair value of PSU on the date of the grant | ' | ' | ' | ' | ' | ' | ' | ' | 4,687 | ' |
Stock based compensation | ' | ' | 4,150 | 2,108 | ' | ' | ' | ' | ' | ' |
Excess tax benefit from award exercised | ' | ' | $1,337 | $1,133 | ' | ' | ' | ' | ' | ' |
Share_Based_Compensation_Sched
Share Based Compensation - Schedule of Option Granted, Exercised and Expired (Detail) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Shares | ' | ' |
Outstanding at beginning of period | 2,997,460 | 3,675,776 |
Granted | 27,500 | 11,000 |
Exercised | -229,968 | -168,035 |
Cancelled or terminated | 0 | 0 |
Outstanding end of period | 2,794,992 | 3,518,741 |
Weighted Average Exercise Price | ' | ' |
Outstanding at beginning of period | $10.49 | $9.41 |
Granted | $32.49 | $26.71 |
Exercised | $8.13 | $7.28 |
Cancelled or terminated | $0 | $0 |
Outstanding end of period | $10.90 | $9.57 |
Share_Based_Compensation_Summa
Share Based Compensation - Summary of Restricted Stock and RSU Activity (Detail) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Shares or Units | ' | ' |
Non-vested at beginning of period | 917,015 | 888,197 |
Granted | 680,842 | 90,146 |
Vested | -155,171 | -131,539 |
Forfeited | -1,566 | 0 |
Non-vested at end of period | 1,441,120 | 846,804 |
Weighted-Average Grant Date Fair Value | ' | ' |
Non-vested at beginning of period | $24.43 | $20.86 |
Granted | $37.14 | $31.58 |
Vested | $22.65 | $21.04 |
Forfeited | $24 | $0 |
Non-vested at end of period | $30.63 | $21.97 |
Income_Taxes_Reconciliation_of
Income Taxes - Reconciliation of Statutory Federal Income Tax Rate to Effective Tax Rate (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Income Tax Disclosure [Abstract] | ' | ' |
Income before equity in earnings of unconsolidated subsidiaries | $110,656 | $97,560 |
Tax at federal statutory rate of 35% | 38,730 | 34,146 |
Income (loss) of non-includible foreign subsidiaries | -48,878 | -19,587 |
Other, net | 37,592 | 1,550 |
Provision for income taxes | $27,444 | $16,109 |
Effective tax rate | 24.80% | 16.50% |
Income_Taxes_Reconciliation_of1
Income Taxes - Reconciliation of Statutory Federal Income Tax Rate to Effective Tax Rate (Parenthetical) (Detail) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Income Tax Disclosure [Abstract] | ' | ' |
Federal statutory rate | 35.00% | 35.00% |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 |
Operating Loss Carryforwards [Line Items] | ' | ' | ' |
Provision for income taxes | $27,444 | $16,109 | ' |
Acquisition gain on purchase | 0 | 25,532 | ' |
Amount of unrecognized deferred tax liability | 444,000 | ' | 360,000 |
Reclassification of Intangible to Goodwill | ' | ' | ' |
Operating Loss Carryforwards [Line Items] | ' | ' | ' |
Provision for income taxes | ' | -7,423 | ' |
Effective Income Tax Rate Reconciliation, Other Adjustments, Percent | ' | 7.60% | ' |
Restatement Adjustment | Retrospective Gain on Pretax on Acquisition | ' | ' | ' |
Operating Loss Carryforwards [Line Items] | ' | ' | ' |
Provision for income taxes | ' | 5,872 | ' |
Acquisition gain on purchase | ' | $25,532 | ' |
Related_Party_Transactions_Mai
Related Party Transactions (Maiden) (Details) (USD $) | 3 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | |||||||||||||||||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Sep. 30, 2007 | Apr. 30, 2011 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Sep. 30, 2007 | Apr. 30, 2011 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Apr. 30, 2011 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 |
Technology Insurance Company Inc | Maiden | Maiden | AII | AII | AII | Maiden Insurance | NGHC | NGHC | Chief Executive Officer | Board of Directors Chairman | Director | Minimum | Minimum | Minimum | Minimum | Minimum | Maximum | Maximum | Maximum | Maximum | Scenario 3 | Retail Business | ||||
Maiden | Maiden | Maiden | Maiden | AII | Maiden Insurance | NGHC | Maiden | Maiden | Maiden Insurance | NGHC | Maiden | AII | Maiden | |||||||||||||
AII | AII | AII | ||||||||||||||||||||||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Note payable on collateral loan – related party | $167,975 | ' | $167,975 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of capital stock | ' | ' | ' | ' | 7.60% | ' | ' | ' | ' | ' | ' | ' | 5.10% | 6.20% | 9.30% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Premiums, percentage assumed to net | ' | ' | ' | ' | ' | ' | ' | ' | 40.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of reinsurance related losses assumed | ' | ' | ' | ' | ' | ' | ' | ' | 40.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reinsurance recoverable | 2,081,087 | ' | 1,929,848 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ceding commission percentage of ceded written premiums | ' | ' | ' | 5.00% | ' | ' | ' | ' | ' | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 31.00% | 34.38% |
Reinsurance ceded profit ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reinsurance ceded loss ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 81.50% | ' | 65.00% | ' | 95.00% | ' | ' |
Extension period of reinsurance agreement term | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expiration date reinsurance agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1-Apr-11 | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of premiums | ' | ' | ' | ' | ' | ' | ' | ' | ' | 40.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of reinsurance agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense on collateral loan | ' | ' | ' | ' | ' | ' | 444 | 494 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Collateral debt issued by maiden insurance | ' | ' | ' | ' | ' | ' | 1,216,782 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of reinsurance brokerage commissions | ' | ' | ' | ' | 1.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Brokerage commission | 90,958 | 60,513 | ' | ' | 5,020 | 3,659 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Assets managed under asset management agreement | ' | ' | ' | ' | 3,275,164 | ' | ' | ' | ' | ' | 1,119,903 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Asset management services fee percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.15% | ' | ' | 0.15% | ' | 0.20% | ' | 0.20% | ' | ' | ' |
Average value of assets under management | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | 1,000,000 | ' | 1,000,000 | ' | 1,000,000 | ' | ' | ' |
Investment management fee | ' | ' | ' | ' | $1,224 | $1,041 | ' | ' | ' | ' | $429 | $363 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Related_Party_Transactions_Res
Related Party Transactions - Results of Operations Related to Reinsurance Agreements (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 |
Related Party Transaction [Line Items] | ' | ' | ' |
Change in unearned premium - ceded | ($301,230) | ($124,112) | ' |
Incurred loss and loss adjustment expense - ceded | 558,570 | 272,256 | ' |
Related Party Transactions | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Premium written - ceded | -408,558 | -305,786 | ' |
Change in unearned premium - ceded | 95,890 | 78,096 | ' |
Earned premium - ceded | -312,668 | -227,690 | ' |
Ceding commission on premium written | 118,340 | 89,499 | ' |
Ceding commission – deferred | -30,234 | -25,541 | ' |
Ceding commission - earned | 88,106 | 63,958 | 63,958 |
Incurred loss and loss adjustment expense - ceded | $214,283 | $152,965 | ' |
Related_Party_Transactions_NGH
Related Party Transactions (NGHC) (Details) (USD $) | 3 Months Ended | 1 Months Ended | 3 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 3 Months Ended | ||||||||||||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Feb. 28, 2014 | Aug. 31, 2011 | Mar. 31, 2014 | Mar. 31, 2013 | Jan. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Jun. 06, 2013 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Aug. 31, 2011 | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2012 | Aug. 31, 2011 | Aug. 31, 2011 |
sqft | sqft | NGHC | NGHC | NGHC | NGHC | NGHC | ACP Re, Ltd | ACP Re, Ltd | Private Placement | Personal Lines Reinsurance | Maximum | Minimum | 800 Superior LLC | 800 Superior LLC | 800 Superior LLC | 800 Superior LLC | 800 Superior LLC | 800 Superior LLC | |
Entity | NGHC | NGHC | NGHC | NGHC | NGHC | NGHC | NGHC | ACP Re, Ltd | |||||||||||
sqft | |||||||||||||||||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of ownership in NGHC | ' | ' | 13.20% | ' | 13.20% | ' | 15.40% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of reportable entities | ' | ' | ' | ' | 11 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued by the company as a part of the agreement | ' | ' | 13,600 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gain on sale of investment | ' | ' | ' | ' | ' | ' | ' | ' | ' | $14,712 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Equity in earnings of unconsolidated subsidiary – related party | 18,516 | 1,550 | ' | ' | 18,516 | 1,550 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net written premium | 1,130,281 | 532,106 | ' | ' | ' | ' | ' | ' | ' | ' | 30,652 | ' | ' | ' | ' | ' | ' | ' | ' |
License fee percentage | ' | ' | ' | ' | 1.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Technology services fee income | ' | ' | ' | ' | 5,039 | 5,376 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Asset management services fee percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.20% | 0.15% | ' | ' | ' | ' | ' | ' |
Average value of assets under management | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | 1,000,000 | ' | ' | ' | ' | ' | ' |
Assets managed under asset management agreement | ' | ' | ' | ' | 1,119,903 | ' | ' | 106,689 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Investment management fee | ' | ' | ' | ' | 429 | 363 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Management fees | ' | ' | ' | ' | 5,468 | 5,739 | ' | 55 | 52 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Asset management fees payable | ' | ' | ' | ' | 11,958 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cost of acquiring office building | ' | ' | ' | 7,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of ownership interest | ' | ' | ' | 13.20% | 13.20% | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | 50.00% | ' |
Percentage of profits and losses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 57.70% |
Office area under lease | 39,992 | 14,807 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 134,000 | ' | ' |
Office lease period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '15 years | ' | ' | ' | ' |
Office lease expenses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $402 | $536 | ' | ' | ' |
Contribution towards payment for guaranties, percentage | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Related_Party_Transactions_ACP
Related Party Transactions (ACP Re. Ltd) (Details) (USD $) | 3 Months Ended | 3 Months Ended | 1 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | ||||||||||||
Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Jan. 31, 2014 | Jan. 31, 2014 | Jan. 03, 2014 | Apr. 08, 2014 | Apr. 08, 2014 | Apr. 08, 2014 | Apr. 08, 2014 | Apr. 08, 2014 | Apr. 08, 2014 | Apr. 08, 2014 | Apr. 08, 2014 | |
ACP Re, Ltd | ACP Re, Ltd | Scenario 1 | Scenario 3 | Maximum | Minimum | Tower | AmTrust | NGHC | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | ACP Re, Ltd | ACP Re, Ltd | ||
ACP Re, Ltd | ACP Re, Ltd | Scenario 2 | Scenario 3 | ACP Re, Ltd | Tower | Tower | Tower | Tower | AmTrust | NGHC | NGHC | NGHC | Subsequent Event | AMtrust and National General Holding Corp. | ||||
ACP Re, Ltd | ACP Re, Ltd | ACP Re, Ltd | ACP Re, Ltd | ACP Re, Ltd | Maximum | Tower | Tower | Tower | Tower | AmTrust | Subsequent Event | |||||||
ACP Re, Ltd | Minimum | Maximum | Minimum | Tower | Tower | |||||||||||||
ACP Re, Ltd | ACP Re, Ltd | ACP Re, Ltd | ||||||||||||||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Asset management services fee percentage | ' | ' | ' | 0.20% | 0.15% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Average value of assets under management | ' | ' | ' | ' | ' | $1,000,000,000 | $1,000,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Assets managed under asset management agreement | ' | 106,689,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Management fees | ' | 55,000 | 52,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of outstanding stock acquired | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected purchase price | ' | ' | ' | ' | ' | ' | ' | ' | 125,000,000 | 125,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Ceding fees | 2.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Financing commitment to ACP Re | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 125,000,000 | ' | ' | 125,000,000 | ' | ' | ' |
Term of financing | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '7 years | ' | ' | '7 years | ' | ' |
Quota share, percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' |
Aggregate stop loss reinsurance agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $125,000,000 | ' | ' | $125,000,000 | $250,000,000 |
Related_Party_Transactions_Add
Related Party Transactions - Additional information (Detail) (USD $) | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2007 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 |
sqft | sqft | AII | Maiden | Maiden | NGHC | 59 Maiden Lane Associates, LLC | 59 Maiden Lane Associates, LLC | 33 West Monroe Associates, LLC | 33 West Monroe Associates, LLC | |
Chief Operating Officer | ||||||||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Rate | ' | ' | 0.90% | ' | ' | ' | ' | ' | ' | ' |
Office area under lease | 39,992 | 14,807 | ' | ' | ' | ' | ' | ' | ' | ' |
Lease payments | ' | ' | ' | ' | ' | ' | $467,000 | $201,000 | $111,000 | $144,000 |
Aircraft use payments | ' | ' | ' | $0 | $54,000 | $84,000 | ' | ' | ' | ' |
Acquisitions_Additional_Inform
Acquisitions - Additional Information (Detail) (USD $) | 3 Months Ended | 1 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 1 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | ||||||||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Apr. 19, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Jan. 03, 2014 | Mar. 31, 2014 | 13-May-13 | Mar. 31, 2014 | Mar. 31, 2013 | 13-May-13 | 3-May-13 | Mar. 31, 2014 | Dec. 23, 2013 | Dec. 23, 2013 | Dec. 23, 2013 | Dec. 23, 2013 | Mar. 31, 2014 | Feb. 28, 2013 | Mar. 31, 2014 | Mar. 31, 2013 |
Sequoia | Sequoia | Sequoia | Insco Dico Group | Insco Dico Group | MIHC | MIHC | MIHC | MIHC | AMTCS | AMTCS | Sagicor at Lloyd's Limited [Member] | Llyods Property and Casualty Insurance [Member] | Llyods Life Insurance [Member] | Sagicor Europe Limited | Sagicor Europe Limited | Car Care Plan (Holding) Limited | Car Care Plan (Holding) Limited | Car Care Plan (Holding) Limited | ||||
State | FNF | syndicate | syndicate | |||||||||||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Acquisition gain | $0 | $25,532 | ' | $13,309 | ' | $13 | ' | ' | $18,511 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Service and fee income | 90,958 | 60,513 | ' | ' | ' | ' | ' | 359 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,357 | 3,086 |
Net written premium | 1,130,281 | 532,106 | ' | ' | 22,833 | ' | ' | 13,087 | ' | 19,391 | ' | ' | ' | 15,263 | ' | ' | ' | ' | 83,315 | ' | 30,580 | 9,031 |
Number of sates the company wrote premiums | ' | ' | ' | ' | ' | ' | 50 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Subscription received by the company | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 472 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued by the company as a part of the agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 18 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Discount on market price of common stock, percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Discount on market price of common stock, value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 118 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock purchased by the company as part of the acquisition | ' | ' | ' | ' | ' | ' | ' | ' | 8,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payment to MIHC | ' | ' | ' | ' | ' | ' | 88,700 | ' | 48,500 | ' | ' | ' | ' | ' | ' | ' | ' | 93,113 | ' | ' | ' | ' |
Contribution to nonprofit organization | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,882 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash contribution retained by the company | ' | ' | ' | ' | ' | ' | ' | ' | 40,618 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt liability assumed by the company | ' | ' | ' | ' | ' | ' | ' | ' | 6,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchase price | ' | ' | ' | 60,000 | ' | ' | ' | ' | 14,500 | ' | ' | ' | 40,000 | ' | 93,113 | ' | ' | ' | ' | 72,412 | ' | ' |
Accrued loss reserves | ' | ' | ' | ' | 7,448 | ' | ' | ' | ' | 4,531 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred tax liability | ' | ' | ' | 2,607 | ' | ' | 1,041 | ' | 1,586 | ' | ' | ' | 12,145 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average useful life | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '12 years | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill and intangibles, initially recorded | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 34,337 | ' | ' |
Retrospective gain on acquisition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,532 | ' |
Goodwill | 393,090 | ' | 373,591 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 17,327 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Intangible assets | ' | ' | ' | 11,848 | ' | ' | ' | ' | 6,132 | ' | ' | ' | 34,700 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of syndicate acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,206 | 44 | ' | ' | ' | ' | ' |
Stamp capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $330,000 | $16,500 | ' | ' | ' | ' | ' |
Acquisitions_Purchase_Price_Al
Acquisitions - Purchase Price Allocation (Details) (USD $) | 3 Months Ended | 1 Months Ended | 0 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 23, 2013 | Jan. 03, 2014 | 3-May-13 |
Sagicor Europe Limited | Insco Dico Group | AMTCS | |||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' |
Cash and investments | ' | ' | $429,476 | $130,031 | ' |
Premium receivables | ' | ' | 89,801 | 8,484 | ' |
Prepaid insurance | ' | ' | 122,673 | ' | ' |
Reinsurance recoverable | ' | ' | ' | 5,799 | ' |
Other receivable | ' | ' | 54,479 | ' | ' |
Other assets | ' | ' | 10,502 | 1,784 | ' |
Deferred tax asset | ' | ' | 29,916 | ' | ' |
Property and equipment | ' | ' | 5,010 | 1,190 | ' |
Goodwill and intangible assets | ' | ' | 33,539 | 19,452 | ' |
Intangible assets | ' | ' | ' | ' | 34,700 |
Total assets including goodwill | ' | ' | 775,396 | 166,740 | ' |
Unearned premiums | ' | ' | 113,182 | 25,715 | ' |
Loss and loss expense reserves | ' | ' | 496,836 | 25,210 | ' |
Accrued liabilities | ' | ' | 55,950 | 10,210 | ' |
Ceded reinsurance | ' | ' | 16,315 | ' | ' |
Notes payable | ' | ' | ' | 10,000 | ' |
Funds held for policyholders | ' | ' | ' | 5,864 | ' |
Deferred tax liability | ' | ' | ' | 1,041 | 12,145 |
Total liabilities | ' | ' | 682,283 | 78,040 | ' |
Cash paid | ' | ' | 93,113 | 88,700 | ' |
Acquisition gain | $0 | $25,532 | ' | ' | ' |
Acquisitions_Sequoia_and_MICH_
Acquisitions (Sequoia and MICH Acquisition) (Details) (USD $) | 3 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | 13-May-13 | Apr. 19, 2013 | Mar. 31, 2013 |
MIHC | Sequoia | Sequoia | |||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' |
Cash and investments | ' | ' | $134,780 | $215,473 | ' |
Premium receivables | ' | ' | 23,085 | 32,870 | ' |
Reinsurance recoverable | ' | ' | ' | 43,793 | ' |
Other assets | ' | ' | 43,714 | 4,014 | ' |
Deferred tax asset | ' | ' | 5,358 | 7,780 | ' |
Property and equipment | ' | ' | 2,684 | 1,022 | ' |
Intangible assets | ' | ' | 6,132 | 11,848 | ' |
Total assets | ' | ' | 215,753 | 316,800 | ' |
Loss and loss expense reserves | ' | ' | 89,267 | 165,487 | ' |
Unearned premium | ' | ' | 27,760 | 59,773 | ' |
Accrued liabilities | ' | ' | 23,629 | 15,624 | ' |
Deferred tax liability | ' | ' | 1,586 | 2,607 | ' |
Notes payable | ' | ' | 6,500 | ' | ' |
Total liabilities | ' | ' | 148,742 | 243,491 | ' |
Cash paid | ' | ' | 48,500 | ' | ' |
Purchase price | ' | ' | 14,500 | 60,000 | ' |
Acquisition gain | $0 | $25,532 | $18,511 | $13,309 | $13 |
New_Market_Tax_Credit_Details
New Market Tax Credit (Details) (USD $) | 1 Months Ended | 3 Months Ended | 1 Months Ended | 2 Months Ended | 1 Months Ended | 1 Months Ended | |||||||
In Thousands, unless otherwise specified | Sep. 30, 2012 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Feb. 28, 2014 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | Dec. 31, 2013 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2012 |
NGHC | NGHC | 800 Superior LLC | 800 Superior LLC | Parent | State and Local Government of Ohio | State and Local Government of Ohio | Key Community Development Corporation (KCDC) | Parent, NGHC, KCDC and State and Local Government of Ohio | Community Development Entities (CDE) [Member] | ||||
CDE | NGHC | 800 Superior LLC | 800 Superior LLC | 800 Superior LLC | 800 Superior LLC | 800 Superior LLC | 800 Superior LLC | ||||||
Loans | Promissory Note | ||||||||||||
Schedule of Tax Credit [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from financing transaction | ' | ($199,060) | ($99,695) | ' | ' | ' | ' | ' | $8,000 | ' | ' | $19,400 | ' |
Percentage of qualified investment income that can be claimed at tax credit against their federal income taxes | 39.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of loans | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' |
Term of the debt instrument | ' | ' | ' | ' | ' | ' | ' | ' | '15 years | ' | ' | ' | ' |
Average rate of interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.70% | ' | ' | ' |
Number of CDE | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' |
Total benefit a company is entitled to receive | ' | ' | ' | ' | ' | ' | 49.00% | 49.00% | ' | ' | 51.00% | ' | ' |
Period to recapture | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '7 years |
Ownership percentage | ' | ' | ' | 15.40% | 13.20% | ' | ' | ' | ' | ' | ' | ' | ' |
Shareholder_Equity_and_Accumul2
Shareholder Equity and Accumulated Other Comprehensive Income (Loss) - Ownership Components of Total Equity (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Class of Stock [Line Items] | ' | ' |
Beginning Balance | $1,587,503 | $1,247,465 |
Net income attributable to AmTrust Financial Services, Inc. | 101,792 | 83,878 |
Net income | 101,728 | 83,001 |
Unrealized holding (loss) gain | 40,873 | -15,286 |
Reclassification adjustment | -1,945 | 3,536 |
Foreign currency translation | 1,515 | -15,731 |
Unrealized gain on interest rate swap | 192 | 220 |
Share exercises and compensation, other | 5,708 | 3,083 |
Common share dividends | -15,064 | -9,430 |
Preferred stock dividends | -1,941 | 0 |
Capital contribution | 1,765 | 2,209 |
Ending Balance | 1,720,334 | 1,299,067 |
Non-Controlling Interests | ' | ' |
Class of Stock [Line Items] | ' | ' |
Beginning Balance | 137,860 | 103,344 |
Net income | -64 | -877 |
Capital contribution | 1,765 | 2,209 |
Ending Balance | 139,561 | 104,676 |
AmTrust | ' | ' |
Class of Stock [Line Items] | ' | ' |
Beginning Balance | 1,449,643 | 1,144,121 |
Net income attributable to AmTrust Financial Services, Inc. | 101,792 | 83,878 |
Unrealized holding (loss) gain | 40,873 | -15,286 |
Reclassification adjustment | -1,945 | 3,536 |
Foreign currency translation | 1,515 | -15,731 |
Unrealized gain on interest rate swap | 192 | 220 |
Share exercises and compensation, other | 5,708 | 3,083 |
Common share dividends | -15,064 | -9,430 |
Preferred stock dividends | ' | 0 |
Ending Balance | $1,580,773 | $1,194,391 |
Shareholder_Equity_and_Accumul3
Shareholder Equity and Accumulated Other Comprehensive Income (Loss) - AOCI (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' |
Beginning balance | ($8,164) | $64,231 |
Other comprehensive income (loss) before reclassifications | 65,507 | -47,380 |
Amounts reclassed from accumulated other comprehensive loss | -2,992 | 5,440 |
Income tax benefit (expense) | -21,880 | 14,679 |
Other comprehensive income (loss), net of tax | 40,635 | -27,261 |
Ending balance | 32,471 | 36,970 |
Foreign Currency Items | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' |
Beginning balance | 2,582 | -10,361 |
Other comprehensive income (loss) before reclassifications | 2,331 | -24,201 |
Amounts reclassed from accumulated other comprehensive loss | 0 | 0 |
Income tax benefit (expense) | -816 | 8,470 |
Other comprehensive income (loss), net of tax | 1,515 | -15,731 |
Ending balance | 4,097 | -26,092 |
Unrealized Gains (Losses) on Investments | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' |
Beginning balance | -7,023 | 77,605 |
Other comprehensive income (loss) before reclassifications | 62,881 | -23,517 |
Amounts reclassed from accumulated other comprehensive loss | -2,992 | 5,440 |
Income tax benefit (expense) | -20,961 | 6,327 |
Other comprehensive income (loss), net of tax | 38,928 | -11,750 |
Ending balance | 31,905 | 65,855 |
Interest Rate Swap Hedge | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' |
Beginning balance | -1,985 | -3,013 |
Other comprehensive income (loss) before reclassifications | 295 | 338 |
Amounts reclassed from accumulated other comprehensive loss | 0 | 0 |
Income tax benefit (expense) | -103 | -118 |
Other comprehensive income (loss), net of tax | 192 | 220 |
Ending balance | -1,793 | -2,793 |
Net Benefit Plan Assets and Obligations Recognized in Stockholders' Equity | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' |
Beginning balance | -1,738 | 0 |
Other comprehensive income (loss) before reclassifications | 0 | 0 |
Amounts reclassed from accumulated other comprehensive loss | 0 | 0 |
Income tax benefit (expense) | 0 | 0 |
Other comprehensive income (loss), net of tax | 0 | 0 |
Ending balance | ($1,738) | $0 |
Segments_Results_of_Operations
Segments - Results of Operations of Business Segments (Detail) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Segments | ||
Segment Reporting Information [Line Items] | ' | ' |
Number of operating segments | 3 | ' |
Gross written premium | $1,666,196,000 | $943,922,000 |
Net written premium | 1,130,281,000 | 532,106,000 |
Change in unearned premium | -301,230,000 | -124,112,000 |
Net earned premium | 829,051,000 | 407,994,000 |
Loss and loss adjustment expense | -558,570,000 | -272,256,000 |
Acquisition costs and other underwriting expenses | 186,609,000 | 100,285,000 |
Operating Expenses | -745,179,000 | -372,541,000 |
Underwriting income | 83,872,000 | 35,453,000 |
Service and fee income | 90,958,000 | 60,513,000 |
Investment income and realized gain | 33,966,000 | 35,379,000 |
Other expenses | -87,591,000 | -52,152,000 |
Interest expense | -11,497,000 | -7,361,000 |
Foreign currency gain (loss) | -1,852,000 | 1,272,000 |
Gain (loss) on life settlement contracts | 2,800,000 | -1,076,000 |
Acquisition gain on purchase | 0 | 25,532,000 |
Provision for income taxes | -27,444,000 | -16,109,000 |
Equity in earnings of unconsolidated subsidiary - related party | 18,516,000 | 1,550,000 |
Net income | 101,728,000 | 83,001,000 |
Personal Lines Reinsurance | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Net written premium | ' | 30,652,000 |
Operating Segments | Small Commercial Business | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Gross written premium | 938,927,000 | 375,849,000 |
Net written premium | 650,716,000 | 173,740,000 |
Change in unearned premium | -270,312,000 | -47,140,000 |
Net earned premium | 380,404,000 | 126,600,000 |
Loss and loss adjustment expense | -255,122,000 | -84,330,000 |
Acquisition costs and other underwriting expenses | 88,028,000 | 31,664,000 |
Operating Expenses | -343,150,000 | -115,994,000 |
Underwriting income | 37,254,000 | 10,606,000 |
Service and fee income | 22,103,000 | 22,102,000 |
Investment income and realized gain | 13,644,000 | 12,038,000 |
Other expenses | -49,359,000 | -20,766,000 |
Interest expense | -6,479,000 | -2,931,000 |
Foreign currency gain (loss) | 0 | 0 |
Gain (loss) on life settlement contracts | 1,577,000 | -429,000 |
Acquisition gain on purchase | ' | 0 |
Provision for income taxes | -3,982,000 | -3,352,000 |
Equity in earnings of unconsolidated subsidiary - related party | 0 | 0 |
Net income | 14,758,000 | 17,268,000 |
Operating Segments | Specialty Risk and Extended Warranty | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Gross written premium | 447,203,000 | 328,329,000 |
Net written premium | 281,115,000 | 184,442,000 |
Change in unearned premium | -9,600,000 | -43,288,000 |
Net earned premium | 271,515,000 | 141,154,000 |
Loss and loss adjustment expense | -183,120,000 | -92,971,000 |
Acquisition costs and other underwriting expenses | 52,865,000 | 31,318,000 |
Operating Expenses | -235,985,000 | -124,289,000 |
Underwriting income | 35,530,000 | 16,865,000 |
Service and fee income | 56,225,000 | 27,719,000 |
Investment income and realized gain | 14,105,000 | 14,891,000 |
Other expenses | -23,509,000 | -18,140,000 |
Interest expense | -3,086,000 | -2,560,000 |
Foreign currency gain (loss) | -1,852,000 | 1,272,000 |
Gain (loss) on life settlement contracts | 752,000 | -374,000 |
Acquisition gain on purchase | ' | 25,532,000 |
Provision for income taxes | -16,607,000 | -10,598,000 |
Equity in earnings of unconsolidated subsidiary - related party | 0 | 0 |
Net income | 61,558,000 | 54,607,000 |
Operating Segments | Specialty Program | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Gross written premium | 280,066,000 | 209,092,000 |
Net written premium | 198,450,000 | 143,272,000 |
Change in unearned premium | -27,610,000 | -31,794,000 |
Net earned premium | 170,840,000 | 111,478,000 |
Loss and loss adjustment expense | -116,160,000 | -75,554,000 |
Acquisition costs and other underwriting expenses | 43,886,000 | 28,543,000 |
Operating Expenses | -160,046,000 | -104,097,000 |
Underwriting income | 10,794,000 | 7,381,000 |
Service and fee income | 150,000 | 73,000 |
Investment income and realized gain | 6,054,000 | 7,402,000 |
Other expenses | -14,723,000 | -11,552,000 |
Interest expense | -1,932,000 | -1,631,000 |
Foreign currency gain (loss) | 0 | 0 |
Gain (loss) on life settlement contracts | 471,000 | -238,000 |
Acquisition gain on purchase | ' | 0 |
Provision for income taxes | -173,000 | -233,000 |
Equity in earnings of unconsolidated subsidiary - related party | 0 | 0 |
Net income | 641,000 | 1,202,000 |
Operating Segments | Personal Lines Reinsurance | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Gross written premium | 0 | 30,652,000 |
Net written premium | 0 | 30,652,000 |
Change in unearned premium | 6,292,000 | -1,890,000 |
Net earned premium | 6,292,000 | 28,762,000 |
Loss and loss adjustment expense | -4,168,000 | -19,401,000 |
Acquisition costs and other underwriting expenses | 1,830,000 | 8,760,000 |
Operating Expenses | -5,998,000 | -28,161,000 |
Underwriting income | 294,000 | 601,000 |
Service and fee income | 0 | 0 |
Investment income and realized gain | 163,000 | 1,048,000 |
Other expenses | 0 | -1,694,000 |
Interest expense | 0 | -239,000 |
Foreign currency gain (loss) | 0 | 0 |
Gain (loss) on life settlement contracts | 0 | -35,000 |
Acquisition gain on purchase | ' | 0 |
Provision for income taxes | -97,000 | 52,000 |
Equity in earnings of unconsolidated subsidiary - related party | 0 | 0 |
Net income | 360,000 | -267,000 |
Operating Segments | Corporate and Other | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Gross written premium | 0 | 0 |
Net written premium | 0 | 0 |
Change in unearned premium | 0 | 0 |
Net earned premium | 0 | 0 |
Loss and loss adjustment expense | 0 | 0 |
Acquisition costs and other underwriting expenses | 0 | 0 |
Operating Expenses | 0 | 0 |
Underwriting income | 0 | 0 |
Service and fee income | 12,480,000 | 10,619,000 |
Investment income and realized gain | 0 | 0 |
Other expenses | 0 | 0 |
Interest expense | 0 | 0 |
Foreign currency gain (loss) | 0 | 0 |
Gain (loss) on life settlement contracts | 0 | 0 |
Acquisition gain on purchase | ' | 0 |
Provision for income taxes | -6,585,000 | -1,978,000 |
Equity in earnings of unconsolidated subsidiary - related party | 18,516,000 | 1,550,000 |
Net income | $24,411,000 | $10,191,000 |
Segments_Long_Lived_Assets_and
Segments - Long Lived Assets and Total Assets of Business Segments (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Segment Reporting Information [Line Items] | ' | ' |
Property and equipment, net | $108,215 | $104,299 |
Goodwill and intangible assets | 693,036 | 665,393 |
Total assets | 12,214,913 | 11,257,409 |
Operating Segments | Small Commercial Business | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Property and equipment, net | 60,980 | 42,054 |
Goodwill and intangible assets | 230,415 | 233,566 |
Total assets | 5,444,100 | 4,257,302 |
Operating Segments | Specialty Risk and Extended Warranty | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Property and equipment, net | 29,045 | 38,297 |
Goodwill and intangible assets | 408,095 | 399,954 |
Total assets | 4,820,424 | 5,021,556 |
Operating Segments | Specialty Program | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Property and equipment, net | 18,190 | 22,280 |
Goodwill and intangible assets | 54,526 | 31,873 |
Total assets | 1,925,866 | 1,891,991 |
Operating Segments | Personal Lines Reinsurance | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Property and equipment, net | 0 | 1,668 |
Goodwill and intangible assets | 0 | 0 |
Total assets | 24,523 | 86,560 |
Operating Segments | Corporate and Other | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Property and equipment, net | 0 | 0 |
Goodwill and intangible assets | 0 | 0 |
Total assets | $0 | $0 |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (PEIC, Subsequent Event, USD $) | 1 Months Ended |
In Millions, unless otherwise specified | Apr. 30, 2014 |
product | |
PEIC | Subsequent Event | ' |
Subsequent Event [Line Items] | ' |
Proceeds from sale of business | $20 |
Number of products | 3 |