Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 04, 2017 | |
Document Documentand Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | AFSI | |
Entity Registrant Name | AMTRUST FINANCIAL SERVICES, INC. | |
Entity Central Index Key | 1,365,555 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 171,237,052 |
Consolidated Balance Sheets (un
Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Investments: | ||
Fixed maturities, available-for-sale, at fair value (amortized cost $7,834,548; $7,315,041) | $ 7,937,238 | $ 7,398,134 |
Fixed maturities, trading, at fair value (amortized cost $57,060; $29,081) | 54,153 | 33,782 |
Equity securities, available-for-sale, at fair value (cost $116,867; $126,670) | 128,164 | 137,162 |
Equity securities, trading, at fair value (cost $98,277; $76,163) | 100,258 | 81,960 |
Equity investment in unconsolidated subsidiaries – related party | 157,103 | 151,332 |
Other investments (related party $77,029; $72,328) | 154,541 | 152,187 |
Total investments | 8,531,457 | 7,954,557 |
Cash and cash equivalents | 621,730 | 567,771 |
Restricted cash and cash equivalents | 615,671 | 713,338 |
Accrued interest and dividends | 63,455 | 54,680 |
Premiums receivable, net | 2,946,344 | 2,802,167 |
Reinsurance recoverable (related party $2,597,647; $2,452,242) | 4,509,509 | 4,329,521 |
Prepaid reinsurance premium (related party $1,213,810; $1,133,485) | 2,119,662 | 1,994,092 |
Other assets (related party $146,760; $161,845; recorded at fair value $397,493; $356,856) | 1,747,607 | 1,712,165 |
Deferred policy acquisition costs | 1,026,001 | 928,920 |
Property and equipment, net | 451,573 | 314,332 |
Goodwill | 704,614 | 686,565 |
Intangible assets | 546,648 | 556,560 |
Total assets | 23,884,271 | 22,614,668 |
Liabilities: | ||
Loss and loss adjustment expense reserves | 10,630,162 | 10,140,716 |
Unearned premiums | 5,199,465 | 4,880,066 |
Ceded reinsurance premiums payable (related party $746,729; $633,638) | 811,346 | 804,882 |
Reinsurance payable on paid losses | 18,487 | 15,960 |
Funds held under reinsurance treaties | 63,774 | 70,868 |
Note payable on collateral loan – related party | 167,975 | 167,975 |
Securities sold but not yet purchased, at fair value | 61,667 | 36,394 |
Securities sold under agreements to repurchase, at contract value | 293,583 | 160,270 |
Accrued expenses and other liabilities (recorded at fair value $77,029; $76,840) | 1,817,146 | 1,635,666 |
Debt | 1,306,701 | 1,234,900 |
Total liabilities | 20,370,306 | 19,147,697 |
Commitments and contingencies | ||
Redeemable non-controlling interest | 1,642 | 1,358 |
Stockholders’ equity: | ||
Common stock, $0.01 par value; 500,000 shares authorized; 196,455 issued in 2017 and 2016, respectively; 171,237 and 170,508 outstanding in 2017 and 2016, respectively | 1,965 | 1,965 |
Preferred stock, $0.01 par value; 10,000 shares authorized; 5,399 issued and outstanding; $913,750 aggregated liquidation preference in 2017 and 2016, respectively. | 913,750 | 913,750 |
Additional paid-in capital | 1,386,385 | 1,384,922 |
Treasury stock at cost; 25,218 and 25,947 shares in 2017 and 2016, respectively | (306,435) | (310,883) |
Accumulated other comprehensive loss, net of tax | (97,806) | (125,722) |
Retained earnings | 1,398,596 | 1,405,071 |
Total AmTrust Financial Services, Inc. equity | 3,296,455 | 3,269,103 |
Non-controlling interest | 215,868 | 196,510 |
Total stockholders’ equity | 3,512,323 | 3,465,613 |
Total liabilities and stockholders' equity | $ 23,884,271 | $ 22,614,668 |
Consolidated Balance Sheets (u3
Consolidated Balance Sheets (unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Fixed maturities, available-for-sale, amortized cost | $ 7,834,548 | $ 7,315,041 |
Fixed maturities, trading, amortized cost | 57,060 | 29,081 |
Equity securities, available-for-sale, cost | 116,867 | 126,670 |
Trading securities, cost basis | 98,277 | 76,163 |
Other investments | 154,541 | 152,187 |
Reinsurance recoverable | 4,509,509 | 4,329,521 |
Prepaid reinsurance premium | 2,119,662 | 1,994,092 |
Other assets, fair value | 397,493 | 356,856 |
Other assets | 1,747,607 | 1,712,165 |
Ceded reinsurance premiums payable | 811,346 | 804,882 |
Accrued expenses and other current liabilities | $ 77,029 | $ 76,840 |
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, issued (in shares) | 196,455,000 | 196,455,000 |
Common stock, outstanding (in shares) | 171,237,000 | 170,508,000 |
Liquidation preference | $ 913,750 | $ 913,750 |
Preferred stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred Stock, shares issued | 5,399,000 | 5,399,000 |
Preferred stock, shares outstanding (in shares) | 5,399,000 | 5,399,000 |
Treasury stock at cost (in shares) | 25,218,000 | 25,947,000 |
Related Party Transactions | ||
Other investments | $ 77,029 | $ 72,328 |
Reinsurance recoverable | 2,597,647 | 2,452,242 |
Prepaid reinsurance premium | 1,213,810 | 1,133,485 |
Other assets | 146,760 | 161,845 |
Ceded reinsurance premiums payable | $ 746,729 | $ 633,638 |
Consolidated Statements of Inco
Consolidated Statements of Income (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Premium income: | ||
Net written premium | $ 1,344,066 | $ 1,220,679 |
Change in unearned premium | (121,534) | (146,397) |
Net earned premium | 1,222,532 | 1,074,282 |
Service and fee income (related parties - $20,335; $20,163) | 137,496 | 128,805 |
Net investment income | 63,325 | 49,415 |
Net realized gain on investments | 8,615 | 7,975 |
Total revenues | 1,431,968 | 1,260,477 |
Expenses: | ||
Loss and loss adjustment expense | 840,334 | 715,073 |
Acquisition costs and other underwriting expenses (net of ceding commission and administrative services - related party $153,702; $138,391) | 328,215 | 272,468 |
Other | 162,853 | 129,267 |
Total expenses | 1,331,402 | 1,116,808 |
Income before other income (expense), provision for income taxes, equity in earnings of unconsolidated subsidiaries and non-controlling interest | 100,566 | 143,669 |
Other income (loss): | ||
Interest expense (net of interest income - related party - $1,580; $2,188) | (23,601) | (15,874) |
Gain on investment in life settlement contracts net of profit commission | 8,610 | 10,730 |
Foreign currency loss | (17,968) | (38,233) |
Gain on acquisition | 0 | 9,678 |
Total other loss | (32,959) | (33,699) |
Income before provision for income taxes, equity in earnings of unconsolidated subsidiaries and non-controlling interest | 67,607 | 109,970 |
Provision for income taxes | 21,356 | 18,960 |
Income before equity in earnings of unconsolidated subsidiaries | 46,251 | 91,010 |
Equity in earnings of unconsolidated subsidiary – related parties | 3,957 | 5,776 |
Equity in earnings of unconsolidated subsidiaries – related parties | 3,957 | 6,145 |
Net income | 50,208 | 96,786 |
Net income attributable to non-controlling interest and redeemable non-controlling interest of subsidiaries | (11,005) | (4,017) |
Net Income (Loss), Including Portion Attributable to Nonredeemable Noncontrolling Interest | 49,923 | 96,626 |
Net income attributable to AmTrust Financial Services, Inc. | 92,769 | |
Dividends on preferred stock | (16,571) | (8,791) |
Net income attributable to AmTrust common stockholders | $ 22,632 | $ 83,978 |
Earnings per common share: (usd per share) | ||
Basic earnings per share (usd per share) | $ 0.13 | $ 0.48 |
Diluted earnings per share (usd per share) | 0.13 | 0.47 |
Dividends declared per common share (usd per share) | $ 0.17 | $ 0.15000 |
Net realized gain on investments: | ||
Net realized gain on available for sale securities | $ 11,630 | $ 5,272 |
Net unrealized gain (loss) on trading securities and other investments | (3,015) | 2,703 |
Net realized investment gain | $ 8,615 | $ 7,975 |
Consolidated Statements of Inc5
Consolidated Statements of Income (unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | |
Service and fee income | $ 137,496 | $ 128,805 | $ 102,119 |
Ceding commission - earned | 138,391 | ||
Interest Income form related party | 1,580 | 2,188 | |
Related Party Transactions | |||
Service and fee income | 20,335 | 20,163 | 17,404 |
Ceding commission - earned | $ 153,702 | 138,391 | |
Interest Income form related party | $ 2,188 | $ 2,188 |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 50,208 | $ 96,786 | $ 142,969 | $ 142,969 |
Other comprehensive income, net of tax: | ||||
Foreign currency translation adjustments | 13,863 | (47,194) | (57,524) | |
Change in fair value of interest rate swap | 92 | 119 | 27 | |
Unrealized gain on securities: | ||||
Gross unrealized holding gain | 32,031 | 127,652 | 12,603 | |
Tax expense arising during period | 6,440 | 44,679 | 4,411 | |
Net unrealized holding gain | 25,591 | 82,973 | 8,192 | |
Other-than-temporary impairment loss | 0 | 0 | 0 | |
Other net realized (gain) on investments | (11,630) | (428) | (415) | |
Reclassification adjustments for investment gain (loss) included in net income: | (11,630) | (428) | (415) | |
Other comprehensive income, net of tax | 27,916 | 35,470 | (49,720) | |
Comprehensive income | 78,124 | 132,256 | 93,249 | |
Less: Comprehensive income attributable to redeemable non-controlling interest and non-controlling interest | 11,005 | 4,017 | 4,083 | |
Comprehensive income attributable to AmTrust Financial Services, Inc. | $ 67,119 | $ 128,239 | $ 89,166 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 50,208 | $ 96,786 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 40,839 | 27,859 |
Net amortization of bond premium or discount | 5,500 | 4,842 |
Equity earnings on investment in unconsolidated subsidiaries | (3,957) | (6,145) |
Gain on investment in life settlement contracts, net | (8,610) | (10,730) |
Net realized gain on investments | (8,615) | (7,975) |
Discount on notes payable | 1,566 | 1,455 |
Stock based compensation | 5,818 | 5,641 |
Bad debt expense | 11,232 | 305 |
Foreign currency loss | 17,968 | 38,233 |
Gain on acquisition | 0 | (9,678) |
Dividend received from equity investment | 492 | 369 |
Changes in assets - (increase) decrease: | ||
Premiums receivables | (285,043) | (271,320) |
Reinsurance recoverable | (177,712) | (73,900) |
Deferred policy acquisition costs | (97,081) | (42,667) |
Prepaid reinsurance premiums | (122,295) | (102,000) |
Other assets | 150,741 | 126,208 |
Changes in liabilities - increase (decrease): | ||
Ceded reinsurance premium payable | 6,464 | 203,594 |
Loss and loss adjustment expense reserve | 272,021 | 271,070 |
Unearned premiums | 264,193 | 264,090 |
Funds held under reinsurance treaties | (7,094) | (30,984) |
Accrued expenses and other liabilities | 132,430 | 217,078 |
Net cash provided by operating activities | 249,065 | 702,131 |
Cash flows from investing activities: | ||
Purchases of fixed maturities, available-for-sale | (871,320) | (870,349) |
Purchases of equity securities, available-for-sale | (41,399) | (613) |
Purchase of equity securities, trading | (170,751) | (54,382) |
Purchase of other investments | (12,210) | (5,441) |
Sales, maturities, paydowns of fixed maturities, available-for-sale | 523,448 | 198,173 |
Sales of equity securities, available-for-sale | 119,257 | 4,563 |
Sales of equity securities, trading | 131,845 | 52,744 |
Sales of other investments | 12,690 | 190 |
Net purchases of short term investments | 0 | (59,927) |
Net purchases of securities sold but not purchased | 25,273 | (9,763) |
Receipt of life settlement contracts | (15,223) | 0 |
Receipt of life settlement contract proceeds | 18,081 | 8,058 |
Acquisition of subsidiaries, net of cash obtained | (27,510) | 3,814 |
Decrease in restricted cash and cash equivalents | 97,668 | 20,823 |
Purchase of property and equipment | (156,152) | (41,022) |
Net cash used in investing activities | (366,303) | (753,132) |
Cash flows from financing activities: | ||
Repurchase agreements, net | 133,313 | 0 |
Secured loan agreements borrowings | 102,008 | 0 |
Secured loan agreements payments | (5,874) | (1,778) |
Promissory note payments | (26,171) | 0 |
Financing fees | (76) | 0 |
Common stock issuance | 0 | 276 |
Common stock repurchase | 0 | (14,668) |
Preferred stock issuance | 0 | 139,070 |
Contingent consideration payments | 0 | (10,303) |
Non-controlling interest capital contributions from consolidated subsidiaries, net | 8,638 | 0 |
Stock option exercise and other | 1,522 | (2,982) |
Dividends distributed on common stock | (28,987) | (26,311) |
Dividends distributed on preferred stock | (16,571) | (8,791) |
Net cash provided by financing activities | 167,802 | 74,513 |
Effect of exchange rate changes on cash | 3,395 | (4,052) |
Net increase in cash and cash equivalents | 53,959 | 19,460 |
Cash and cash equivalents, beginning of the year | 567,771 | 1,003,916 |
Cash and cash equivalents, end of the period | 621,730 | 1,023,376 |
Supplemental Cash Flow Information | ||
Income tax payments | 140 | 5,467 |
Interest payments on debt | 25,463 | 16,295 |
Declared dividends on common stock | $ 29,107 | $ 26,313 |
Basis of Reporting
Basis of Reporting | 3 Months Ended |
Mar. 31, 2017 | |
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 consolidated 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, 2016 , previously filed with the Securities and Exchange Commission (“SEC”) on April 4, 2017. 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 consolidated 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, 2016 , 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. |
Restatement of Previously Issue
Restatement of Previously Issued Consolidated Financial Statements | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Restatement of Previously Issued Consolidated Financial Statements | Restatement of Previously Issued Consolidated Financial Statements In connection with the preparation, review and audit of the Company's consolidated financial statements required to be included in the Annual Report on Form 10-K for the year ended December 31, 2016 , management identified certain errors in the Company's historical financial statements. As a result, the Company concluded that its previously issued consolidated financial statements for fiscal years 2015 and 2014 , along with each of the four quarters included in fiscal year 2015 , as well as the first three quarters of fiscal year 2016 , needed to be restated, The Company's restated consolidated financial statements as of and for the years ended December 31, 2015 and 2014 were included in its Annual Report on Form 10-K for the year ended December 31, 2016 . Within this report, the Company has included restated unaudited interim consolidated financial statements as of and for the three months ended March 31, 2016 and 2015 . This Note 2 to the unaudited interim consolidated financial statements discloses the nature of the restatement matters and adjustments and shows the impact of the restatement for the three months ended March 31, 2016 and 2015, respectively. The restatement corrects errors primarily related to: (1) upfront recognition of the portion of warranty contract revenue associated with administration services, instead of recognizing the revenue over the life of the contract; and (2) bonuses that were expensed in the year paid but that should have been accrued as earned based on ASC 270, Interim Reporting , and ASC 450, Contingencies . The Company has also identified other adjustments described below in items (3) – (9) that have been corrected as part of this restatement. Adjustments needed to correct errors (1) Warranty fee revenue – During the preparation of its financial statements for the year ended December 31, 2016, management became aware of a misapplication of the revenue recognition guidance in relation to its accounting for warranty contract revenue associated with promotion, marketing and administration services (collectively, "administration services") provided as part of extended service plans (“ESPs”). The Company had historically recognized the majority of revenue related to administration services at the time of the sale of ESP. However, the Company revised its application of the revenue recognition guidance to record revenue related to administration services on a straight-line basis over the term of the ESP contracts. This correction of an error created an overstatement of service and fee income and an overstatement of other expenses that were also recognized upfront at the time of the sale. (2) Accrual of bonuses – In prior years, the Company had expensed discretionary bonuses paid to its employees in the year the bonuses were paid because the Company did not consider the discretionary bonuses to be “probable,” which is the standard required for accrual. Upon review of ASC 270, Interim Reporting , and ASC 450, Contingencies , management determined that its application was incorrect because, even though the bonuses were discretionary, the bonuses should have been estimated and expenses assigned to interim periods so that the interim periods bear a reasonable portion of the anticipated annual amount. This created an error resulting in an overstatement of acquisition costs and other underwriting expenses. (3) Deferred policy acquisition costs – The Company corrected errors in its calculation of deferred policy acquisition costs related to (a) the over-amortization of certain deferred acquisition costs in 2015, resulting in an overstatement of expenses in 2015, (b) the deferral of certain non-eligible salaries and consulting fees, resulting in an understatement of expenses, (c) the treatment of certain costs as both underwriting expenses and salary and benefit expenses, resulting in the duplication of the amount originally deferred, and (d) the inclusion of deferred warranty administration fees and obligor liabilities associated with the administration services provided to our ESPs, which resulted in an increase to policy acquisition expense. (4) Foreign exchange gain/(loss) – The Company corrected errors related to the re-measurement of monetary balances denominated in foreign currencies into their functional currencies that were originally recorded as a component of other comprehensive income. Given the monetary nature of some of these balances, the re-measurement impact should have been recorded as foreign currency transaction gain/(loss) in the Company's statements of income. (5) Capitalized software – The Company capitalized certain internally developed software costs that did not meet criteria for capitalization under ASC 350, Intangibles - Goodwill and Other . This error resulted overall in an over-capitalization of certain software expenses, which resulted in an understatement of expenses for the three months ended March 31, 2016 and an overstatement of expenses for the three months ended March 31, 2015. (6) Imputed interest – The Company corrected an error related to imputed interest on contingent consideration owed as a result of certain business acquisitions, which resulted in an overstatement of interest expense during the three months ended March 31, 2016 and an understatement of interest expense during the three months ended March 31 2015 . (7) Intercompany eliminations – The Company corrected an error related to internal brokerage commissions paid from one of its subsidiaries to another subsidiary, which should have been eliminated in consolidation, thereby causing an overstatement of commission income in the three months ended March 31, 2015. (8) Other items – The Company corrected other errors that impacted the three months ended March 31, 2016 and 2015 interim consolidated financial statements, including unaccrued liabilities, uncollectible other receivables, accrued commissions, unrecognized amortization expense, unrealized losses on investments and proper quarter end cut-off related to premiums and claims. (9) Balance sheet items – The Company historically recorded certain receivables (premium and other) net of commissions. The error was corrected and the Company now records the receivables on a gross basis, with the associated commission payable in other accrued expenses and liabilities. In addition, the Company corrected a classification error involving short term investments and cash and cash equivalents as of March 31, 2016 and 2015 . The following summarizes the impact of the Restatement on our previously reported unaudited interim Consolidated Balance Sheets, Consolidated Statements of Income, Consolidated Statements of Comprehensive Income, Consolidated Statements of Stockholders' Equity and Consolidated Statements of Cash Flows for the three months ended March 31, 2016 and 2015 : Consolidated Balance Sheet March 31, 2016 ASSETS As previously reported Adjustments As restated Reference (in thousands) Investments: Fixed maturities, available-for-sale, at fair value (amortized cost $6,221,739) $ 6,307,719 $ — $ 6,307,719 Equity securities, available-for-sale, at fair value (cost $110,594) 98,518 — 98,518 Equity securities, trading, at fair value (cost $28,142) 29,891 — 29,891 Short-term investments 34,008 (25,094 ) 8,914 9 Equity investment in unconsolidated subsidiaries – related parties 146,000 — 146,000 Other investments (related party $68,860) 126,875 — 126,875 Total investments 6,743,011 (25,094 ) 6,717,917 Cash and cash equivalents 998,282 25,094 1,023,376 8, 9 Restricted cash and cash equivalents 359,876 — 359,876 Accrued interest and dividends 57,179 — 57,179 Premiums receivable, net 2,376,689 134,804 2,511,493 8, 9 Reinsurance recoverable (related party $2,282,432) 3,097,192 — 3,097,192 Prepaid reinsurance premiums (related party $1,184,742) 1,633,866 — 1,633,866 Other assets (related party $206,298; recorded at fair value $294,573) 1,247,886 74,017 1,321,903 1 – 9 Deferred policy acquisition costs 761,802 (25,495 ) 736,307 3 Property and equipment, net 292,381 (11,448 ) 280,933 5, 8 Goodwill 426,268 — 426,268 Intangible assets 361,289 — 361,289 $ 18,355,721 $ 171,878 $ 18,527,599 LIABILITIES AND STOCKHOLDERS’ EQUITY Liabilities: Loss and loss adjustment expense reserves $ 7,516,089 $ — $ 7,516,089 Unearned premiums 4,290,528 — 4,290,528 Ceded reinsurance premiums payable (related party $571,754) 851,192 — 851,192 Accrued expenses and other liabilities (related party $167,975; recorded at fair value $101,655) 1,379,985 370,853 1,750,838 1, 2, 6, 8, 9 Debt (net of debt issuance cost of $16,616) 993,028 — 993,028 Total liabilities 15,030,822 370,853 15,401,675 Commitments and contingencies Redeemable non-controlling interest 1,332 — 1,332 Stockholders’ equity: Common stock, $0.01 par value; 500,000 shares authorized, 196,455 issued; 175,400 outstanding 1,965 — 1,965 Preferred stock, $0.01 par value; 10,000 shares authorized, 5,112 issued and outstanding; aggregated liquidation preference $626,250 626,250 — 626,250 Additional paid-in capital 1,381,282 — 1,381,282 Treasury stock at cost; 21,054 shares (177,071 ) — (177,071 ) Accumulated other comprehensive (loss) income, net of tax (97,348 ) (574 ) (97,922 ) 4 Retained earnings 1,408,177 (198,401 ) 1,209,776 1 – 8 Total AmTrust Financial Services, Inc. equity 3,143,255 (198,975 ) 2,944,280 Non-controlling interest 180,312 — 180,312 Total stockholders’ equity 3,323,567 (198,975 ) 3,124,592 $ 18,355,721 $ 171,878 $ 18,527,599 Consolidated Statement of Income Three Months Ended March 31, 2016 As previously reported Adjustments As restated Reference (in thousands, except per share) Revenues: Premium income: Net written premium $ 1,220,679 $ — $ 1,220,679 Change in unearned premium (146,397 ) — (146,397 ) Net earned premium 1,074,282 — 1,074,282 Service and fee income (related parties - $20,163) 144,201 (15,396 ) 128,805 1, 8 Net investment income 49,415 — 49,415 Net realized gain on investments 7,975 — 7,975 Total revenues 1,275,873 (15,396 ) 1,260,477 Expenses: Loss and loss adjustment expense 715,073 — 715,073 Acquisition costs and other underwriting expenses (net of ceding commission - related party - $138,391) 264,634 7,834 272,468 2, 3, 5, 8 Other 128,186 1,081 129,267 1, 5, 8 Total expenses 1,107,893 — 8,915 1,116,808 Income before other (expense) income, provision for income taxes, equity in earnings of unconsolidated subsidiaries and non-controlling interest 167,980 (24,311 ) 1 143,669 Other (expenses) income: Interest expense (net of interest income - related party - $2,188) (17,700 ) 1,826 (15,874 ) 6 Gain on investment in life settlement contracts net of profit commission 10,730 — 10,730 Foreign currency (loss) gain (35,673 ) (2,560 ) (38,233 ) 4, 8 Gain on acquisition 9,678 — 9,678 Total other (expenses) income (32,965 ) — (734 ) (33,699 ) Income before provision for income taxes, equity in earnings of unconsolidated subsidiaries and non-controlling interest 135,015 — (25,045 ) 109,970 Provision for income taxes 27,726 (8,766 ) 18,960 1 – 8 Income before equity in earnings of unconsolidated subsidiaries 107,289 — (16,279 ) 91,010 Equity in earnings of unconsolidated subsidiary – related parties 5,776 — 5,776 Net income $ 113,065 — $ (16,279 ) $ 96,786 Net income attributable to non-controlling interests and redeemable non-controlling interests of subsidiaries (4,017 ) — (4,017 ) Net income attributable to AmTrust Financial Services, Inc. $ 109,048 — $ (16,279 ) $ 92,769 Dividends on preferred stock (8,791 ) — (8,791 ) Net income attributable to AmTrust common stockholders $ 100,257 0.001 $ (16,279 ) 2 $ 83,978 Earnings per common share: Basic earnings per share $ 0.57 $ (0.09 ) $ 0.48 Diluted earnings per share $ 0.56 $ (0.09 ) $ 0.47 Dividends declared per common share $ 0.15 $ — $ 0.15 Weighted average common shares outstanding - basic 175,585 165,042 — 175,585 Weighted average common shares outstanding - diluted 177,927 168,360 — 177,927 Consolidated Statement of Comprehensive Income Three Months Ended March 31, 2016 As previously reported Adjustments As Restated Reference (in thousands) Net income $ 113,065 $ (16,279 ) $ 96,786 Other comprehensive (loss) income, net of tax: Foreign currency translation adjustments (47,845 ) 651 (47,194 ) 4 Change in fair value of interest rate swap 119 — 119 Unrealized gain on securities: Gross unrealized holding (loss) gain 124,720 2,932 127,652 8 Less tax expense 43,652 1,027 44,679 8 Net unrealized holding gain 81,068 1,905 82,973 3 Reclassification adjustment for investment loss included in net income, net of tax: Other-than-temporary impairment loss — — — Other net realized loss on investments (428 ) — (428 ) Reclassification adjustment for investment loss included in net income (428 ) — (428 ) Other comprehensive income, net of tax $ 32,914 $ 2,556 $ 35,470 Comprehensive income 145,979 (13,723 ) 132,256 Less: Comprehensive income attributable to non-controlling and redeemable non-controlling interest 4,017 — 4,017 Comprehensive income attributable to AmTrust Financial Services, Inc. $ 141,962 $ (13,723 ) $ 128,239 Consolidated Statement of Stockholders' Equity As of March 31, 2016 As previously reported Adjustment As Restated Reference (in thousands) Common stock $ 1,965 $ — $ 1,965 Preferred stock 626,250 — 626,250 Additional paid-in capital 1,381,282 — 1,381,282 Treasury stock (177,071 ) — (177,071 ) Accumulated other comprehensive income (loss) (97,348 ) (574 ) (97,922 ) 4, 8 Retained earnings 1,408,177 (198,401 ) 1,209,776 1 – 8 $ 3,143,255 $ (198,975 ) $ 2,944,280 Consolidated Statements of Cash Flows Three Months Ended March 31, 2016 As previously reported Adjustments As restated Reference (in thousands) Cash flows from operating activities: Net income $ 113,065 $ (16,279 ) $ 96,786 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 25,347 2,512 27,859 5 Net amortization of bond premium or discount 4,842 — 4,842 Equity earnings on investment in unconsolidated subsidiaries (5,776 ) (369 ) (6,145 ) 8 Gain on investment in life settlement contracts, net (10,730 ) — (10,730 ) Net realized gain on investments (7,975 ) — (7,975 ) Discount on notes payable 1,455 — 1,455 Stock based compensation 5,641 — 5,641 Bad debt expense 305 — 305 Foreign currency loss 35,673 2,560 38,233 4, 8 Gain on acquisition (9,678 ) — (9,678 ) Dividend received from equity investment — 369 369 8 Changes in assets – (increase) decrease: Premiums receivable (256,816 ) (14,504 ) (271,320 ) 8, 9 Reinsurance recoverable (72,607 ) (1,293 ) (73,900 ) 8 Deferred policy acquisition costs (57,559 ) 14,892 (42,667 ) 3 Prepaid reinsurance premiums (102,000 ) — (102,000 ) Other assets 124,952 1,256 126,208 1 – 9 Changes in liabilities – increase (decrease): Ceded reinsurance premium payable 203,594 — 203,594 Loss and loss expense adjustment reserves 271,070 — 271,070 Unearned premiums 263,749 341 264,090 8 Funds held under reinsurance treaties (30,984 ) — (30,984 ) Accrued expenses and other liabilities 192,883 24,195 217,078 1, 2, 6, 8, 9 Net cash provided by operating activities 688,451 13,680 702,131 Cash flows from investing activities: Purchases of fixed maturities, available-for-sale (870,349 ) — (870,349 ) Purchases of equity securities, available-for-sale (613 ) — (613 ) Purchases of equity securities, trading (54,382 ) — (54,382 ) Purchases of other investments (12,605 ) 7,164 (5,441 ) 8 Sales, maturities, paydowns of fixed maturities, available-for-sale 198,173 — 198,173 Sales of equity securities, available-for-sale 4,563 — 4,563 Sales of equity securities, trading 52,744 — 52,744 Sales of other investments 190 — 190 Net (purchases) of short term investments (17,926 ) (42,001 ) (59,927 ) 9 Net (purchases) of securities sold but not purchased (9,763 ) — (9,763 ) Receipt of life settlement contract proceeds 8,058 — 8,058 Acquisition of subsidiaries, net of cash obtained 3,814 — 3,814 Decrease in restricted cash and cash equivalents, net 20,823 — 20,823 Purchase of property and equipment (25,630 ) (15,392 ) (41,022 ) 5 Net cash used in investing activities (702,903 ) (50,229 ) (753,132 ) Consolidated Statements of Cash Flows Three Months Ended March 31, 2016 As previously reported Adjustments As restated Reference Cash flows from financing activities: Secured loan agreement payments (1,778 ) — (1,778 ) Common stock issuance 276 — 276 Common stock repurchase (14,668 ) — (14,668 ) Preferred stock issuance 139,070 — 139,070 Contingent consideration payments — (10,303 ) (10,303 ) 6 Stock option exercise and other (2,982 ) — (2,982 ) Dividends distributed on common stock (26,311 ) — (26,311 ) Dividends distributed on preferred stock (8,791 ) — (8,791 ) Net cash provided by financing activities 84,816 (10,303 ) 74,513 Effect of exchange rate changes on cash (4,052 ) — (4,052 ) Net increase in cash and cash equivalents 66,312 (46,852 ) 19,460 Cash and cash equivalents, beginning of year 931,970 71,946 1,003,916 1, 2, 4-9 Cash and cash equivalents, end of period $ 998,282 $ 25,094 $ 1,023,376 Supplemental Cash Flow Information Interest payments on debt $ 16,295 — $ 16,295 Income tax payments 5,467 — 5,467 Declared dividends on common stock 26,313 — 26,313 Consolidated Balance Sheet March 31, 2015 ASSETS As previously reported Adjustments As restated Reference (in thousands) Investments: Fixed maturities, available-for-sale, at fair value (amortized cost $4,292,658) $ 4,419,313 $ — $ 4,419,313 Equity securities, available-for-sale, at fair value (cost $96,261) 94,668 — 94,668 Equity securities, trading, at fair value (cost $29,353) 30,560 — 30,560 Short-term investments 42,668 (32,001 ) 10,667 9 Equity investment in unconsolidated subsidiaries – related parties 125,104 — 125,104 Other investments (related party $9,700) 45,627 — 45,627 Total investments 4,757,940 (32,001 ) 4,725,939 Cash and cash equivalents 997,007 32,001 1,029,008 8, 9 Restricted cash and cash equivalents 217,628 — 217,628 Accrued interest and dividends 42,952 — 42,952 Premiums receivable, net 2,134,647 83,918 2,218,565 8, 9 Reinsurance recoverable (related party $1,627,100) 2,544,549 — 2,544,549 Prepaid reinsurance premium (related party $1,047,486) 1,473,353 — 1,473,353 Other assets (related party $156,996; recorded at fair value $259,785) 1,050,804 421 1,051,225 1, 5, 8, 9 Deferred policy acquisition costs 651,884 (2,651 ) 649,233 3 Property and equipment, net 167,459 (8,876 ) 158,583 5, 8 Goodwill 458,042 — 458,042 Intangible assets 303,116 — 303,116 $ 14,799,381 $ 72,812 $ 14,872,193 LIABILITIES AND STOCKHOLDERS’ EQUITY Liabilities: Loss and loss adjustment expense reserves $ 5,886,149 $ — 5,886,149 Unearned premiums 3,704,419 — 3,704,419 Ceded reinsurance premiums payable (related party $533,234) 772,651 — 772,651 Accrued expenses and other liabilities (related party $167,975; recorded at fair value $33,189) 1,229,501 210,049 1,439,550 1, 2, 6, 8, 9 Debt (net of debt issuance cost of $12,295) 580,673 — 580,673 Total liabilities 12,173,393 210,049 12,383,442 Commitments and contingencies Redeemable non-controlling interest 922 — 922 Stockholders’ equity: Common stock, $0.01 par value; 300,000 shares authorized, 196,436 issued; 164,694 outstanding 1,964 — 1,964 Preferred stock, $0.01 par value; 10,000 shares authorized, 4,968 issued and outstanding 482,500 — 482,500 Additional paid-in capital 1,116,900 — 1,116,900 Treasury stock at cost; 31,562 shares (225,121 ) — (225,121 ) Accumulated other comprehensive income (loss) (2,348 ) 13,202 10,854 4, 8 Retained earnings 1,088,840 (150,439 ) 938,401 1, 2, 4, 5, 8 Total AmTrust Financial Services, Inc. equity 2,462,735 (137,237 ) 2,325,498 Non-controlling interest 162,331 — 162,331 Total stockholders’ equity 2,625,066 (137,237 ) 2,487,829 $ 14,799,381 $ 72,812 $ 14,872,193 Consolidated Statement of Income Three Months Ended March 31, 2015 As previously reported Adjustments As restated Reference (in thousands, except share data) Revenues: Premium income: Net written premium $ 1,043,189 $ — $ 1,043,189 Change in unearned premium (93,812 ) — (93,812 ) Net earned premium 949,377 — 949,377 Service and fee income (related parties - $17,404) 112,886 (10,767 ) 102,119 1 Net investment income 34,573 — 34,573 Net realized gain on investments 15,653 — 15,653 Total revenues 1,112,489 (10,767 ) 1,101,722 3,000 Expenses: 3,000 Loss and loss adjustment expense 613,283 — 613,283 Acquisition costs and other underwriting expenses (net of ceding commission - related party - $118,687) 231,676 1,105 232,781 2, 3, 5, 8 Other 98,457 2,503 100,960 1, 5, 7, 8 Total expenses 943,416 3,608 947,024 8,000 Income before other (expense) income, provision for income taxes, equity in earnings of unconsolidated subsidiaries and non-controlling interest 169,073 (14,375 ) 154,698 8,000 Other (expenses) income: 3,000 Interest expense (net of interest income - related party - $2,188) (10,255 ) (1,826 ) (12,081 ) 6 Loss on extinguishment of debt (4,714 ) — (4,714 ) Gain on investment in life settlement contracts net of profit commission 11,373 — 11,373 Foreign currency gain 39,954 (15,297 ) 24,657 4, 8 Total other (expenses) income 36,358 (17,123 ) 19,235 8,000 Income before provision for income taxes, equity in earnings of unconsolidated subsidiaries and non-controlling interest 205,431 (31,498 ) 173,933 8,000 Provision for income taxes 46,812 (10,319 ) 36,493 3,000 1, 2, 3, 4, 5, 6, 8 Income before equity in earnings of unconsolidated subsidiaries 158,619 (21,179 ) $ 137,440 Equity in earnings of unconsolidated subsidiary – related parties 5,529 — 5,529 Net income 164,148 (21,179 ) 142,969 8,000 Net (income) loss attributable to non-controlling interests and redeemable non-controlling interests of subsidiaries (4,083 ) — (4,083 ) Net income attributable to AmTrust Financial Services, Inc. $ 160,065 $ (21,179 ) $ 138,886 8,000 Dividends on preferred stock (5,369 ) — (5,369 ) Net income attributable to AmTrust common stockholders $ 154,696 $ (21,179 ) $ 133,517 Earnings per common share: Basic earnings per share $ 0.95 $ (0.13 ) $ 0.82 Diluted earnings per share $ 0.93 $ (0.13 ) $ 0.80 Dividends declared per common share $ 0.10 — $ 0.10 Weighted average common shares outstanding - basic 162,336 — 162,336 Weighted average common shares outstanding - diluted 166,874 — 166,874 Consolidated Statement of Comprehensive Income Three Months Ended March 31, 2015 As previously reported Adjustments As Restated Reference (in thousands) Net income $ 164,148 $ (21,179 ) $ 142,969 Other comprehensive (loss) income, net of tax: Foreign currency translation adjustments (65,353 ) 7,829 (57,524 ) 4 Change in fair value of interest rate swap 27 — 27 Unrealized gain on securities: Gross unrealized holding (loss) gain 11,185 1,418 12,603 8 Less tax expense 3,915 496 4,411 8 Net unrealized holding gain 7,270 922 7,000 8,192 Reclassification adjustment for investment gain (loss) included in net income, net of tax: Other-than-temporary impairment loss — — — Other net realized loss on investments (415 ) — (415 ) Reclassification adjustment for investment loss included in net income (415 ) — 7,000 (415 ) Other comprehensive (loss), net of tax $ (58,471 ) $ 8,751 $ (49,720 ) Comprehensive income 105,677 (12,428 ) 93,249 Less: Comprehensive income attributable to non-controlling and redeemable non-controlling interest 4,083 — 4,083 Comprehensive income attributable to AmTrust Financial Services, Inc. $ 101,594 $ (12,428 ) $ 89,166 Consolidated Statement of Stockholders' Equity As of March 31, 2015 As previously reported Adjustment As Restated Reference (in thousands) Common stock $ 1,964 $ — $ 1,964 Preferred stock 482,500 — 482,500 Additional paid-in capital 1,116,900 — 1,116,900 Treasury Stock (225,121 ) — (225,121 ) Accumulated other comprehensive income (loss) (2,348 ) 13,202 10,854 4, 8 Retained earnings 1,088,840 (150,439 ) 938,401 1, 2, 4, 5, 8 $ 2,462,735 $ (137,237 ) $ 2,325,498 Consolidated Statement of Cash Flows Three Months Ended March 31, 2015 As previously reported Adjustments As restated Reference (in thousands) Cash flows from operating activities: Net income $ 164,148 $ (21,179 ) $ 142,969 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 19,426 896 20,322 5 Net amortization of bond premium or discount 5,890 — 5,890 Equity earnings on investment in unconsolidated subsidiaries (5,529 ) — (5,529 ) Gain on investment in life settlement contracts, net (11,373 ) — (11,373 ) Net realized gain on investments (16,669 ) — (16,669 ) Non-cash write-down of investments 1,016 — 1,016 Discount on notes payable 1,389 — 1,389 Stock based compensation 4,914 — 4,914 Loss on extinguishment of debt 4,714 — 4,714 Bad debt expense 6,281 — 6,281 Foreign currency (gain) (39,954 ) 15,297 (24,657 ) 4 Changes in assets – (increase) decrease: Premiums receivable (289,546 ) (43,594 ) (333,140 ) 8, 9 Reinsurance recoverable (102,608 ) 95 (102,513 ) 8 Deferred policy acquisition costs (23,501 ) 3,529 (19,972 ) 3 Prepaid reinsurance premiums (170,505 ) — (170,505 ) Other assets (40,228 ) 81,420 41,192 1, 8, 9 Changes in liabilities – increase (decrease): Ceded reinsurance premium payable 89,550 — 89,550 Loss and loss adjustment expense reserves 174,000 — 174,000 Unearned premiums 232,986 (2,332 ) 230,654 8 Funds held under reinsurance treaties 18,984 — 18,984 Accrued expenses and other current liabilities 170,409 (12,106 ) 158,303 1, 2, 6, 8, 9 Net cash provided by operating activities 193,794 22,026 215,820 Cash flows from investing activities: Purchases of fixed maturities, available-for-sale (434,806 ) — (434,806 ) Purchases of equity securities, available-for-sale (15,351 ) — (15,351 ) Purchases of equity securities, trading (62,083 ) — (62,083 ) Purchases of other investments (27,233 ) 8,366 (18,867 ) 8 Sales, maturities, paydowns of fixed maturities, available-for-sale 292,961 (3,275 ) 289,686 9 Sales of equity securities, available-for-sale 9,285 — 9,285 Sales of equity securities, trading 60,268 — 60,268 Sales of other investments 13,337 — 13,337 Net sales of short term investments 41,540 32,001 73,541 9 Net sale of securities sold but not purchased 3,570 — 3,570 Receipt of life settlement contract proceeds 53,080 — 53,080 Acquisition of subsidiaries, net of cash obtained (118,464 ) — (118,464 ) Increase in restricted cash and cash equivalents, net (31,403 ) — (31,403 ) Purchase of property and equipment (21,906 ) (1,088 ) (22,994 ) 5 Net cash used in investing activities (237,205 ) 36,004 (201,201 ) Cash flows from financing activities: Revolving credit facility borrowings 200,000 — 200,000 Revolving credit facility payments (320,000 ) — (320,000 ) Secured loan agreement payments (1,733 ) — (1,733 ) Convertible senior notes payments (53,606 ) — (53,606 ) Common stock issuance 171,672 — 171,672 Preferred stock issuance 176,529 — 176,529 Consolidated Statement of Cash Flows Three Months Ended March 31, 2015 As previously reported Adjustments As restated Reference Contingent consideration payments — (4,178 ) (4,178 ) 6 Non-controlling interest capital contributions to consolidated subsidiaries, net 565 — 565 Stock option exercise and other 310 — 310 Dividends distributed on common stock (19,374 ) — (19,374 ) Dividends distributed on preferred stock (5,369 ) — (5,369 ) Net cash provided by financing activities 148,994 1 (4,178 ) 2,000 144,816 Effect of exchange rate changes on cash (11,326 ) — (11,326 ) Net increase in cash and cash equivalents 94,257 1 53,852 148,109 Cash and cash equivalents, beginning year 902,750 (21,851 ) 880,899 1,2, 4-9 Cash and cash equivalents, end of period $ 997,007 1 $ 32,001 $ 1,029,008 Supplemental Cash Flow Information Interest payments on debt $ 11,442 $ — $ 11,442 Income tax payments 96,916 — 96,916 Declared dividends on common stock 20,590 — 20,590 |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2017 | |
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, 2017 , as compared to those described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 , that are of significance, or potential significance, to the Company. Recent Accounting Standards, Adopted In March 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or a liability, and classification on the statement of cash flows. The updated guidance was effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The adoption of this guidance on January 1, 2017 did not have a material effect on the Company's results of operations, financial position or liquidity. In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments , which clarifies the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. An entity performing the assessment under the amended guidance in this ASU is required to assess the embedded call (put) options solely in accordance with the four-step decision sequence prescribed by Topic 815. The updated guidance was effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company adopted this guidance on a modified retrospective basis. The adoption of this guidance on January 1, 2017 did not have a material effect on the Company's results of operations, financial position or liquidity. In March 2016, the FASB issued ASU 2016-05, Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships , which clarifies that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument under Topic 815 does not, in and of itself, require designation of that hedging relationship provided that all other hedge accounting criteria continue to be met. The updated guidance was effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company adopted this guidance on a modified retrospective basis. The adoption of this guidance on January 1, 2017 did not have a material effect on the Company's results of operations, financial position or liquidity. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business . The amendments clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The guidance specifies that when substantially all of the fair value of gross assets acquired is concentrated in a single asset (or a group of similar assets), the assets acquired would not represent a business. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. Early adoption is permitted and prospective application is required. The Company early adopted this guidance effective January 1, 2017. The adoption of this guidance did not have a material impact on the Company's results of operations, financial position or liquidity. Recent Accounting Standards, Not Yet Adopted In March 2017, the FASB issued ASU No. 2017-08, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities . The new standard shortens the amortization period for the premium on callable debt securities to the earliest call date. The amortization period for callable debt securities purchased at a discount would not be impacted by the proposed ASU. This is to more closely align interest income recorded on bonds held at a premium or a discount with the economics of the underlying instrument. The standard takes effect for fiscal years and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. If an entity early adopts in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures. In March 2017, the FASB issued ASU 2017-07 — Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The amendments in this ASU require that an employer present service cost in the same line item or items as other current employee compensation costs, and present the remaining components of net benefit cost in one or more separate line items outside of income from operations (if that subtotal is presented). In addition, this ASU limits the components of net benefit cost eligible to be capitalized to service cost. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those annual periods. This standard is not expected to have a material impact on the Company's financial position, results of operations or cash flows. In February 2017, the FASB issued ASU 2017-05— Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. The new guidance clarifies that ASC 610-20 applies to the derecognition of nonfinancial assets and in substance nonfinancial assets unless other specific guidance applies. As a result, it will not apply to the derecognition of businesses, nonprofit activities, or financial assets (including equity method investments), or to revenue transactions (contracts with customers). The new guidance also clarifies that an in substance nonfinancial asset is an asset or group of assets for which substantially all of the fair value consists of nonfinancial assets and the group or subsidiary is not a business. In addition, transfers of nonfinancial assets to another entity in exchange for a noncontrolling ownership interest in that entity will be accounted for under ASC 610-20, removing specific guidance on such partial exchanges from ASC 845, Nonmonetary Transactions . As a result of the new guidance, the guidance specific to real estate sales in ASC 360-20 will be eliminated. As such, sales and partial sales of real estate assets will now be subject to the same derecognition model as all other nonfinancial assets. This guidance is effective for fiscal years beginning after December 15, 2017, including interim reporting periods within that reporting period. Early adoption is permitted, but only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . The ASU simplifies the accounting for goodwill impairment charges. Under current guidance, if the fair value of a reporting unit is lower than its carrying amount, an entity calculates any impairment charge by comparing the implied fair value of goodwill with its carrying amount. The implied fair value of goodwill is calculated by deducting the fair value of all assets and liabilities of the reporting unit from the reporting unit’s fair value. Under the new guidance, if a reporting unit’s carrying amount exceeds its fair value, an entity will record an impairment charge based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. The new guidance eliminates the current requirement to calculate a goodwill impairment charge as described above. The guidance is effective in fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. The Company is evaluating the requirements of this guidance and the potential impact on the Company’s financial position and results of operations. In January 2017, the FASB provided an update 2017-03 —Accounting Changes and Error Corrections ( Topic 250) and Investments—Equity Method and Joint Ventures (Topic 323): Amendments to SEC Paragraphs Pursuant to Staff Announcements at the September 22, 2016 and November 17, 2016 EITF Meetings (SEC Update). This ASU adds an SEC paragraph addressing “Disclosure of the Impact That Recently Issued Accounting Standards Will Have on the Financial Statements of a Registrant When Such Standards Are Adopted in a Future Period (in accordance with SAB Topic 11.M).” The SEC staff expressed its expectations about the extent of disclosures registrants should make about the effects of the new FASB guidance (including any amendments issued prior to adoption) on revenue (ASU 2014-09), leases (ASU 2016-02) and credit losses on financial instruments (ASU 2016-13). This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures. On October 24, 2016, the FASB issued ASU 2016-16, Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory . The ASU is part of the FASB’s simplification initiative aimed at reducing complexity in accounting standards. The new guidance eliminates the exception for all intra-entity sales of assets other than inventory. As a result, a reporting entity would recognize the tax expense from the sale of the asset in the seller’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. Any deferred tax asset that arises in the buyer’s jurisdiction would also be recognized at the time of the transfer. ASU 2016-16 is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures. In August 2016, due to divergent practices for reporting certain cash receipts and cash payments on the statement of cash flows, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . The update provides guidance and clarification for eight specific cash flow issues, which include debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate and bank owned life insurance policies, distributions received from equity-method investees, beneficial interests in securitization transactions, and separately identifiable cash flows and application of the predominance principle. The update takes effect for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company is currently evaluating the impact this guidance will have on its results of operations, financial position or liquidity. In November 2016, due to divergent practices for the presentation of changes in restricted cash and restricted cash equivalents in the statement of cash flows, the FASB issued final guidance on (ASC) 230, Statement of Cash Flows, that will require entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. The new guidance requires a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet. This reconciliation can be presented either on the face of the statement of cash flows or in the notes to the financial statements. Entities will also have to disclose the nature of their restricted cash and restricted cash equivalent balances. For public business entities, the guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those years. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures. In June 2016, the FASB completed its Financial Instruments—Credit Losses project by issuing ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326) . The new guidance requires organizations to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The new guidance affects loans, debt securities, trade receivables, net investments in leases, off-balance-sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations , which improves the operability and understandability of the implementation guidance on principal versus agent considerations by clarifying that 1) an entity determines whether it is a principal or an agent for each specific good or service promised to the customer; 2) an entity determines the nature of each specific good or service; 3) when another party is involved in providing goods or services to a customer, an entity that is a principal obtains control of (a) a good or another asset from the other party that it then transfers to the customer, (b) a right to a service that will be performed by another party, which gives the entity the ability to direct that party to provide the service to the customer on the entity's behalf, or (c) a good or service from the other party that is combined with other goods or services to provide the specific good or service to the customer; and 4) the purpose of the indicators in paragraph 606-10-55-39 in Topic 606 is to support or assist in the assessment of control. The effective date and transition requirement for this ASU are the same as the effective date and transition requirements of ASU 2014-09, which were deferred to the quarter ending March 31, 2018 by ASU 2015-14. The Company is currently evaluating the impact this guidance will have on its results of operations, financial position or liquidity. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which requires a lessee to recognize a right of use asset and a lease liability on the balance sheet for leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The updated guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is currently evaluating the impact this guidance will have on its results of operations, financial position or liquidity. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities , which address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Specifically, the guidance (a) requires equity investments to be measured at fair value with changes in fair value recognized in earnings, however, an entity may choose to measure equity investments that do not have readily determinable fair value at cost minus impairment, if any, plus or minus changes resulted from observable price changes in orderly transactions for identical or similar investments of the same issuer, (b) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (c) eliminates the requirement to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost, (d) requires the use of the exit price notion when measuring the fair value of financial instruments for disclosure purposes, (e) requires an entity to present separately in other comprehensive income the portion of the total change in fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option, (f) requires separate presentation of financial assets and liabilities by measurement category and form on the balance sheet or the notes to the financial statements, and (g) clarifies that the need for a valuation allowance on a deferred tax asset related to an available for sale security should be evaluated with other deferred tax assets. The updated guidance is effective for reporting periods beginning after December 15, 2017. The Company is currently evaluating the impact this guidance will have on its results of operations, financial position or liquidity. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments (a) Available-for-Sale Securities The cost or amortized cost, gross unrealized gains and losses, and estimated fair value of fixed maturities and equity securities classified as available-for-sale as of March 31, 2017 and December 31, 2016 , are presented below: (Amounts in Thousands) Original or amortized cost Gross unrealized gains Gross unrealized losses Fair Value Preferred stock $ 753 $ 12 $ — $ 765 Common stock 116,114 13,499 (2,214 ) 127,399 U.S. treasury securities 332,089 1,181 (1,524 ) 331,746 U.S. government agencies 38,704 26 (12 ) 38,718 Municipal bonds 906,527 10,727 (11,004 ) 906,250 Foreign government 163,902 3,500 (827 ) 166,575 Corporate bonds: Finance 1,594,509 39,132 (6,071 ) 1,627,570 Industrial 2,426,628 60,914 (11,948 ) 2,475,594 Utilities 310,717 7,024 (1,366 ) 316,375 Commercial mortgage-backed securities 475,061 3,493 (6,632 ) 471,922 Residential mortgage-backed securities: Agency backed 922,458 13,295 (8,309 ) 927,444 Non-agency backed 5,133 10 (40 ) 5,103 Collateralized loan / debt obligation 617,608 11,646 (466 ) 628,788 Asset backed securities 41,212 142 (201 ) 41,153 $ 7,951,415 $ 164,601 $ (50,614 ) $ 8,065,402 (Amounts in Thousands) Original or amortized cost Gross unrealized gains Gross unrealized losses Fair value Preferred stock $ 4,044 $ — $ (59 ) $ 3,985 Common stock 122,626 12,899 (2,348 ) 133,177 U.S. treasury securities 331,036 1,235 (1,617 ) 330,654 U.S. government agencies 63,467 282 (17 ) 63,732 Municipal bonds 860,444 9,603 (15,877 ) 854,170 Foreign government 149,365 4,237 (726 ) 152,876 Corporate bonds: Finance 1,535,606 38,404 (7,722 ) 1,566,288 Industrial 2,222,843 62,133 (17,115 ) 2,267,861 Utilities 195,607 4,433 (1,210 ) 198,830 Commercial mortgage backed securities 178,092 2,464 (2,562 ) 177,994 Residential mortgage backed securities: Agency backed 1,210,229 13,685 (13,529 ) 1,210,385 Non-agency backed 61,646 586 (1,003 ) 61,229 Collateralized loan / debt obligations 476,767 8,389 (751 ) 484,405 Asset backed securities 29,939 31 (260 ) 29,710 $ 7,441,711 $ 158,381 $ (64,796 ) $ 7,535,296 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, 2017 , the Company's foreign government securities were issued or guaranteed primarily by governments in Europe, Canada and Mexico. Proceeds from the sale of investments in available-for-sale securities during the three months ended March 31, 2017 and 2016 were approximately $642,705 and $202,736 , respectively. A summary of the Company’s available-for-sale fixed maturities as of March 31, 2017 and December 31, 2016 , 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. March 31, 2017 December 31, 2016 (Amounts in Thousands) Amortized Cost Fair Value Amortized Cost Fair Value Due in one year or less $ 289,263 $ 289,850 $ 319,275 $ 319,882 Due after one through five years 1,782,757 1,829,025 2,956,429 2,998,711 Due after five through ten years 3,204,377 3,248,128 1,645,211 1,683,112 Due after ten years 496,679 495,824 437,452 432,702 Mortgage and asset backed securities 2,061,472 2,074,411 1,956,674 1,963,727 Total fixed maturities $ 7,834,548 $ 7,937,238 $ 7,315,041 $ 7,398,134 The tables below summarize the gross unrealized losses of our fixed maturity and equity securities by length of time the security has continuously been in an unrealized loss position as of March 31, 2017 and December 31, 2016 : Less Than 12 Months 12 Months or More Total (Amounts in Thousands) Fair Value Unrealized Losses No. of Positions Held Fair Value Unrealized Losses No. of Positions Held Fair Value Unrealized Losses Common and preferred stock $ 40,202 $ (2,214 ) 86 $ — $ — — $ 40,202 $ (2,214 ) U.S. treasury securities 287,025 (1,521 ) 137 723 (3 ) 3 287,748 (1,524 ) U.S. government agencies 7,736 (12 ) 14 — — — 7,736 (12 ) Municipal bonds 485,032 (10,657 ) 114 8,635 (347 ) 11 493,667 (11,004 ) Foreign government 70,292 (746 ) 454 1,919 (81 ) 1 72,211 (827 ) Corporate bonds: Finance 460,143 (5,731 ) 231 13,769 (340 ) 4 473,912 (6,071 ) Industrial 633,781 (11,522 ) 415 17,279 (426 ) 11 651,060 (11,948 ) Utilities 99,201 (1,364 ) 83 511 (2 ) 1 99,712 (1,366 ) Commercial mortgage backed securities 280,918 (6,488 ) 74 5,612 (144 ) 30 286,530 (6,632 ) Residential mortgage backed securities: Agency backed 393,883 (8,250 ) 210 2,281 (59 ) 22 396,164 (8,309 ) Non-agency backed 2,638 (39 ) 15 60 (1 ) 2 2,698 (40 ) Collateralized loan / debt obligations 87,951 (436 ) 37 11,802 (30 ) 6 99,753 (466 ) Asset-backed securities 12,474 (39 ) 24 4,434 (162 ) 7 16,908 (201 ) Total temporarily impaired securities $ 2,861,276 $ (49,019 ) 1,894 $ 67,025 $ (1,595 ) 98 $ 2,928,301 $ (50,614 ) Less Than 12 Months 12 Months or More Total (Amounts in Thousands) Fair Value Unrealized Losses No. of Positions Held Fair Value Unrealized Losses No. of Positions Held Fair Value Unrealized Losses Common and preferred stock $ 46,783 $ (1,424 ) 32 $ 9,991 $ (983 ) 53 $ 56,774 $ (2,407 ) U.S. treasury securities 293,155 (1,613 ) 115 22,989 (4 ) 6 316,144 (1,617 ) U.S. government agencies 7,866 (17 ) 20 — — — 7,866 (17 ) Municipal bonds 519,578 (15,207 ) 439 15,742 (670 ) 26 535,320 (15,877 ) Foreign government 128,863 (688 ) 52 12,659 (38 ) 7 141,522 (726 ) Corporate bonds: Finance 1,071,982 (7,210 ) 342 16,840 (512 ) 13 1,088,822 (7,722 ) Industrial 1,200,129 (13,648 ) 479 114,035 (3,467 ) 59 1,314,164 (17,115 ) Utilities 119,488 (423 ) 33 10,391 (787 ) 6 129,879 (1,210 ) Commercial mortgage backed securities 71,780 (1,654 ) 56 10,910 (908 ) 32 82,690 (2,562 ) Residential mortgage backed securities: Agency backed 718,098 (13,469 ) 216 8,144 (60 ) 26 726,242 (13,529 ) Non-agency backed 24,372 (869 ) 21 4,462 (134 ) 6 28,834 (1,003 ) Collateralized loan / debt obligations 97,923 (433 ) 37 32,937 (318 ) 13 130,860 (751 ) Asset-backed securities 9,220 (124 ) 24 4,926 (136 ) 12 14,146 (260 ) Total temporarily impaired securities $ 4,309,237 $ (56,779 ) 1,866 $ 264,026 $ (8,017 ) 259 $ 4,573,263 $ (64,796 ) There are 1,992 and 2,125 securities at March 31, 2017 and December 31, 2016 , respectively, that account for the gross unrealized loss, none of which is deemed by the Company to be OTTI. At March 31, 2017 , the Company determined that the unrealized losses on fixed maturities were primarily due to market interest rate movements since their date of purchase. On a quarterly basis, the Company analyzes securities in an unrealized loss position for OTTI. The Company considers an investment to be impaired when it has been in an unrealized loss position greater than a de minimis threshold for over 12 months, excluding securities backed by the U.S. government (e.g., U.S. treasury securities or agency-backed residential mortgage-backed securities). Additionally, the Company reviews whether any of the impaired positions related to securities for which OTTI was previously recognized, and whether the Company intends to sell any of the securities in an unrealized loss position. Once the Company completes the analysis described above, each security is further evaluated to assess whether the decline in the fair value of any investment below its cost basis is deemed other-than-temporary. The Company considers many factors in completing its quarterly review of securities with unrealized losses for other-than-temporary impairment. For equity securities, the Company considers the length of time and the extent to which the fair value has been below cost, the financial condition and near-term prospects of the issuer, including any specific events that may influence the operations of the issuer, and the intent and ability of the Company to retain its investment for a period of time sufficient to allow for any anticipated recovery in fair value. For fixed maturities, the Company considers among other things, the length of time and the extent to which the fair value has been less than the amortized cost basis, adverse conditions and near-term prospects for improvement specifically related to the issuer, industry or geographic area, the historical and implied volatility of the fair value of the security, any information obtained from regulators and rating agencies, the issuer’s capital strength and the payment structure of the debt security and the likelihood the issuer will be able to make payments in the future (or the historical failure of the issuer to make scheduled interest or principal payments or payment of dividends). For equity securities, a decline in fair value that is considered to be other-than-temporary is recognized in net income based on the fair value of the security at the time of assessment, resulting in a new cost basis for the security. For fixed maturities where the Company intends to sell the security or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost, a decline in fair value is considered to be other-than-temporary and is recognized in net income based on the fair value of the security at the time of assessment, resulting in a new cost basis for the security. If the decline in fair value of a fixed maturity below its amortized cost is considered to be other-than-temporary based upon other considerations, the Company compares the estimated present value of the cash flows expected to be collected to the amortized cost of the security. The extent to which the estimated present value of the cash flows expected to be collected is less than the amortized cost of the security represents the credit-related portion of the other-than-temporary impairment, which is recognized in net income, resulting in a new cost basis for the security. Any remaining decline in fair value represents the non-credit portion of the other-than-temporary impairment, which is recognized in other comprehensive income (loss). There were no credit-related other-than-temporary impairment ("OTTI") charges for the three months ended March 31, 2017 and 2016. (b) Trading Securities The original or amortized cost, estimated fair value and gross unrealized gains and losses of trading securities as of March 31, 2017 and December 31, 2016 are presented in the tables below: (Amounts in Thousands) Original or amortized cost Gross unrealized gains Gross unrealized losses Fair value Common stock $ 98,277 $ 7,417 $ (5,436 ) $ 100,258 U.S. Treasury securities 27,314 89 (21 ) 27,382 Corporate bonds: Industrial 10,186 607 (1,396 ) 9,397 Utilities 19,560 67 (2,253 ) 17,374 (Amounts in Thousands) Original or amortized cost Gross unrealized gains Gross unrealized losses Fair value Common stock $ 76,163 $ 9,842 $ (4,045 ) $ 81,960 Corporate bonds: Industrial 24,151 4,379 — 28,530 Utilities 4,930 322 — 5,252 Proceeds from the sale of investments in trading securities during the three months ended March 31, 2017 and 2016 were approximately $131,845 and $52,744 , respectively. The portion of trading gains and losses for the period related to trading securities still held during the three months ended March 31, 2017 and 2016 : Three Months Ended March 31, (Amounts in Thousands) 2017 2016 Net gains and losses recognized during the period on trading securities (3,261 ) $ 2,756 Less: Net gains and losses recognized during the period on trading securities sold during the period 2,715 6,373 Unrealized gains and losses recognized during the reporting period on trading securities still held at the reporting date $ (5,976 ) (3,617 ) (c) Investment Income Net investment income for the three months ended March 31, 2017 and 2016 was derived from the following sources: Three Months Ended March 31, (Amounts in Thousands) 2017 2016 Fixed maturities, available-for-sale $ 57,644 $ 46,193 Equity securities, available-for-sale 1,337 2,364 Equity securities, trading 989 (153 ) Cash and short term investments 5,382 1,086 65,352 49,490 Less: Investment expenses 2,027 75 $ 63,325 $ 49,415 (d) Realized Gains and Losses The tables below summarize the gross realized gains and (losses) for the three months ended March 31, 2017 and 2016 : (Amounts in Thousands) Gross Gains Gross Losses Net Gains (Losses) Fixed maturities, available-for-sale $ 8,311 $ (1,263 ) $ 7,048 Equity securities, available-for-sale 5,223 (641 ) 4,582 Fixed maturity securities, trading 2,374 (5,434 ) (3,060 ) Equity securities, trading 6,085 (6,286 ) (201 ) Other investments 271 (25 ) 246 $ 22,264 $ (13,649 ) $ 8,615 (Amounts in Thousands) Gross Gains Gross Losses Net Gains (Losses) Fixed maturities, available-for-sale $ 4,799 $ (46 ) $ 4,753 Equity securities, available-for-sale 660 (141 ) 519 Equity securities, trading 9,612 (6,856 ) 2,756 Other investments 4 (57 ) (53 ) $ 15,075 $ (7,100 ) $ 7,975 (e) 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, if any, 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. The interest rate swap related to the Company's junior subordinated debentures matured during the three months ended March 31, 2017 . The Company has one interest rate swap designated as a hedge in the total amount of $101 as of March 31, 2017 that was included as a component of accrued expenses and other liabilities. As of December 31, 2016, the Company had two interest rate swap agreements designated as a hedge that were recorded as a liability in the amount of $243 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, 2017 : Remaining Life of Notional Amount (1) One Year Two Through Five Years Six Through Ten Years After Ten Years Total Interest rate swaps — 7,334 — — $ 7,334 (1) Notional amount is not representative of either market risk or credit risk and is not recorded in the consolidated balance sheet. (f) 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 the Company's restricted assets as of March 31, 2017 and December 31, 2016 are as follows: (Amounts in Thousands) March 31, 2017 December 31, 2016 Restricted cash and cash equivalents $ 615,671 $ 713,338 Restricted investments - fixed maturities at fair value 2,288,016 2,126,216 Total restricted cash, cash equivalents, and investments $ 2,903,687 $ 2,839,554 (g) Other Securities sold but not yet purchased are securities that the Company has sold, but does not own, in anticipation of a decline in the market value of the security. The Company's risk is that the value of the security will increase rather than decline. Consequently, the settlement amount of the liability for securities sold, not yet purchased may exceed the amount recorded in the consolidated balance sheet as the Company is obligated to purchase the securities sold, not yet purchased in the market at prevailing prices to settle the obligations. To establish a position in security sold, not yet purchased, the Company needs to borrow the security for delivery to the buyer. When the transaction is open, the liability for the obligation to replace the borrowed security is marked to market and an unrealized gain or loss is recorded. At the time the transaction is closed, the Company realizes a gain or loss equal to the differences between the price at which the security was sold and the cost of replacing the borrowed security. While the transaction is open, the Company will also incur an expense for any dividends or interest which will be paid to the lender of the securities. The Company’s liability for securities to be delivered is measured at their fair value and was $61,667 and $36,394 as of March 31, 2017 and December 31, 2016 , respectively. The securities sold but not yet purchased consisted primarily of equity and fixed maturity securities, and the liability for securities sold but not yet purchased is included in accrued expenses and other liabilities in the consolidated balance sheet. From time to time, the Company enters 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, 2017 , the Company had twenty repurchase agreements with an outstanding principal amount of $293,583 , which approximates fair value, with interest rates between 0.95% and 1.25% . The Company had approximately $348,693 of collateral pledged in support of these agreements. Interest expense associated with these repurchase agreements for the three months ended March 31, 2017 was $375 . As of December 31, 2016 , the Company had thirteen repurchase agreements with an outstanding principal amount of $160,270 , which approximates fair value, at interest rates between 0.75% and 0.90% . The Company had approximately $175,700 of collateral pledged in support of these agreements. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2017 | |
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, 2017 and December 31, 2016 : (Amounts in Thousands) Total Level 1 Level 2 Level 3 Assets: U.S. treasury securities $ 359,128 $ 359,128 $ — $ — U.S. government agencies 38,718 — 38,718 — Municipal bonds 906,250 — 906,250 — Foreign government 166,575 31 164,337 2,207 Corporate bonds and other bonds: Finance 1,627,570 — 1,622,382 5,188 Industrial 2,484,991 140 2,483,530 1,321 Utilities 333,749 — 333,749 — Commercial mortgage backed securities 471,922 — 448,278 23,644 Residential mortgage backed securities: Agency backed 927,444 — 927,444 — Non-agency backed 5,103 — 5,103 — Collateralized loan / debt obligations 628,788 — 628,788 — Asset-backed securities 41,153 — 38,340 2,813 Equity securities, available-for-sale 128,164 100,023 10,758 17,383 Equity securities, trading 100,258 96,141 — 4,117 Life settlement contracts 397,493 — — 397,493 $ 8,617,306 $ 555,463 $ 7,607,677 $ 454,166 Liabilities: Equity securities sold but not yet purchased $ 61,667 $ 61,667 $ — $ — Fixed maturity securities sold but not yet purchased 293,583 — 293,583 — Life settlement contract profit commission 5,599 — — 5,599 Contingent consideration 72,330 — — 72,330 Derivatives 101 — 101 — $ 433,280 $ 61,667 $ 293,684 $ 77,929 (Amounts in Thousands) Total Level 1 Level 2 Level 3 Assets: U.S. treasury securities $ 330,654 $ 330,654 $ — $ — U.S. government agencies 63,732 — 63,732 — Municipal bonds 854,170 — 854,170 — Foreign government 152,876 — 149,298 3,578 Corporate bonds and other bonds: Finance 1,566,288 — 1,559,800 6,487 Industrial 2,296,391 — 2,291,351 5,040 Utilities 204,082 — 199,503 4,580 Commercial mortgage backed securities 177,994 — 177,994 — Residential mortgage backed securities: Agency backed 1,210,385 — 1,186,315 24,070 Non-agency backed 61,229 — 58,109 3,120 Collateralized loan / debt obligations 484,405 — 484,405 — Asset-backed securities 29,710 — 29,710 — Equity securities, available-for-sale 137,162 66,228 49,618 21,316 Equity securities, trading 81,960 78,827 — 3,133 Life settlement contracts 356,856 — — 356,856 $ 8,007,894 $ 475,709 $ 7,104,005 $ 428,180 Liabilities: Equity securities sold but not yet purchased $ 36,394 $ 36,394 $ — $ — Fixed maturity securities sold but not yet purchased 160,270 — 160,270 — Life settlement contract profit commission 4,940 — — 4,940 Contingent consideration (as restated) 71,657 — — 71,657 Derivatives 243 — 243 — $ 273,504 $ 36,394 $ 160,513 $ 76,597 There were no significant transfers between Level 1 and Level 2 during the three months ended March 31, 2017 and 2016 , respectively. The following table 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, 2017 and 2016 . The transfers into and out of Level 3 were due to changes in the availability of market observable inputs. All transfers are reflected in the table at fair value as of the end of the reporting period. (Amounts in Thousands) Balance as of December 31, 2016 Net income Other comprehensive income Purchases and issuances Sales and settlements Net transfers into (out of) Level 3 Balance as of March 31, Equity securities, trading $ 3,133 $ (348 ) $ — $ 4,487 $ (2,134 ) $ (1,021 ) $ 4,117 Equity securities, available-for-sale 21,316 — 245 — — (4,178 ) 17,383 Fixed maturities, available-for-sale 46,875 — (714 ) 2,339 (463 ) (12,864 ) 35,173 Life settlement contracts 356,856 35,495 — 15,223 (10,081 ) — 397,493 Life settlement contract profit commission (4,940 ) (659 ) — — — — (5,599 ) Contingent consideration (71,657 ) (673 ) — — — — (72,330 ) Total $ 351,583 $ 33,815 $ (469 ) $ 22,049 $ (12,678 ) $ (18,063 ) $ 376,237 (Amounts in Thousands) Balance as of December 31, 2015 Net income Other comprehensive income Purchases and issuances Sales and settlements Net transfers into (out of) Level 3 Balance as of March 31, 2016 Equity securities, available-for-sale 37,211 — (11,673 ) 18 — — 25,556 Life settlement contracts 264,001 30,629 — — (57 ) — 294,573 Life settlement contract profit commission (15,406 ) (7,168 ) — — 15,406 — (7,168 ) Contingent consideration (as restated) (84,760 ) (1,826 ) — 2,416 10,303 — (73,867 ) Total (as restated) $ 201,046 $ 21,635 $ (11,673 ) $ 2,434 $ 25,652 $ — $ 239,094 A reconciliation of net income for life settlement contracts in the above table to gain on investment in life settlement contracts net of profit commission included in the Consolidated Statements of Income for the three months ended March 31, 2017 and 2016 is as follows: Three Months Ended March 31, (Amounts in Thousands) 2017 2016 Net income $ 35,495 $ 30,629 Premiums paid (25,274 ) (12,102 ) Profit commission (659 ) (7,168 ) Other expenses (952 ) (629 ) Gain on investment in life settlement contracts $ 8,610 $ 10,730 The Company uses the following methods and assumptions in estimating its fair value disclosures for financial instruments: • Equity and Fixed Income Investments: As of March 31, 2017 , the Company's Level 3 equity securities consisted primarily of privately placed warrants of companies that have publicly traded common stock. The fair value of these equity securities as of March 31, 2017 was derived from the quoted price of the underlying common stock adjusted for other inputs that are not market observable. • Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, and Short Term Investments: The carrying value of cash and cash equivalents, restricted cash and cash equivalents, and short term investments approximate their respective fair value and are classified as Level 1 in the fair value hierarchy. • Premiums Receivable, Accrued Interest, Reinsurance Recoverables: 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. • Equity Investment in Unconsolidated Subsidiaries - Related Party: The Company has an ownership percentage of approximately 12% in National General Holdings Corp. ("NGHC"), a publicly held insurance holding company (Nasdaq: NGHC). The Company accounts for this investment under the equity method of accounting as it has the ability to exert significant influence on NGHC. The fair value and carrying value of the investment was approximately $157,103 and $292,139 , respectively, as of March 31, 2017 . • Subordinated Debentures and Debt: The fair value of the Company's material debt arrangements as of March 31, 2017 was as follows: Carrying Value Fair Value 7.25% Subordinated Notes due 2055 $ 145,234 $ 150,360 7.50% Subordinated Notes due 2055 130,711 134,784 2.75% Convertible senior notes due 2044 168,001 179,183 6.125% Notes due 2023 248,253 254,220 Junior subordinated debentures due 2035-2037 122,050 100,220 Trust preferred securities due 2033-2037 92,786 92,735 Republic promissory note 78,514 79,520 Revolving credit facility 130,000 130,000 Other 191,152 191,152 The 7.25% subordinated notes due 2055, the 7.50% subordinated notes due 2055, the 2.75% convertible senior notes due 2044, and the 6.125% notes due 2023 are publicly traded instruments and are classified as Level 1 in the fair value hierarchy. The fair value of the junior subordinated debentures due 2035-2037 and trust preferred securities due 2033-2037 were determined using the Black-Derman-Toy interest rate lattice model and are classified as Level 3 in the fair value hierarchy. In determining the fair value of its remaining debt, the Company uses estimates based on rates currently available to the Company for debt with similar terms and remaining maturities. Accordingly, the fair value of the Republic promissory note and other debt is classified as Level 2 within the valuation hierarchy. The Company considers its other debt's carrying value to approximate fair value as their interest rates approximate current borrowing rates. • Derivatives: The Company classifies interest rate swaps as Level 2 in the 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. • Contingent consideration: The fair value of contingent consideration is based on a discounted cash flow methodology and is classified as Level 3 in the fair value hierarchy. The range of discount rates used for contingent consideration was primarily between 8% and 30% . • Life settlement contracts and life settlement contract profit commission: Life settlement contracts are described in Note 6. "Investments in Life Settlements" elsewhere in this report. 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. These financial instruments are classified as Level 3 in the fair value hierarchy. 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 of policies in the portfolio based on the expected cash flow to be generated by the policies (death benefit less premium payments), discounted to reflect the cost of funding, 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 and the independent life expectancy reports based thereon. 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, 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 as no comparable market pricing is available. 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, 2017 and December 31, 2016 , and only includes data for policies to which the Company assigned value at those dates: March 31, December 31, Average age of insured 82.8 years 82.8 years Average life expectancy, months (1) 104 107 Average face amount per policy (Amounts in thousands) $ 6,680 $ 6,572 Effective discount rate (2) 12.9 % 12.4 % (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 EDR is inclusive 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 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, 2017 and December 31, 2016 : Change in life expectancy (Amounts in Thousands) Plus 4 Months Minus 4 Months Investment in life policies: March 31, 2017 $ (46,739 ) $ 45,180 December 31, 2016 $ (44,207 ) $ 43,492 Change in discount rate (1) (Amounts in Thousands) Plus 1% Minus 1% Investment in life policies: March 31, 2017 $ (32,447 ) $ 35,956 December 31, 2016 $ (29,881 ) $ 33,155 (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, 2017 | |
Investments, All Other Investments [Abstract] | |
Investment in Life Settlements | Investment in Life Settlements The Company has a 50% ownership interest in each of three entities (collectively, the "LSC Entities") formed for the purpose of acquiring life settlement contracts, with a subsidiary of NGHC owning the remaining 50% . The LSC Entities are: Tiger Capital LLC (“Tiger”); AMT Capital Alpha, LLC (“AMT Alpha”); and AMT Capital Holdings, S.A. (“AMTCH”). 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. During 2016 , the Company terminated an agreement with a third party administrator of the Tiger and AMTCH life settlement contract portfolios, under which the third party received an administrative fee. The third party administrator was also eligible to receive a percentage of profits after certain time and performance thresholds had been met. This profit commission was calculated based on the discounted anticipated cash flows and the provisions of the underlying contract, and was settled with the third party administrator in 2016. The Company accrues the related profit commission on life settlements at fair value, in relation to the life settlements purchased prior to December 31, 2010. This profit commission is calculated based on the discounted anticipated cash flows and the provisions of the underlying contract. The Company provides certain actuarial and finance functions related to the LSC Entities. In conjunction with the Company’s approximate 12% ownership percentage of NGHC, the Company ultimately receives 56% 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. The Company determines fair value as discussed in Note 5. "Fair Value of Financial Information." Capital contributions were made to the LSC Entities during the three months ended March 31, 2017 totaling $20,000 , of which the Company contributed $10,000 . There were no capital contributions made to the LSC Entities during the three months ended March 31, 2016. The Company recorded a gain of $8,610 and $10,730 on investment in life settlement contracts, net of profit commission, for the three months ended March 31, 2017 and 2016, respectively. The following tables describe the Company’s investment in life settlements as of March 31, 2017 and December 31, 2016 : (Amounts in Thousands, except number of Life Settlement Contracts) Expected Maturity Term in Years Number of Life Settlement Contracts Fair Value (1) Face Value As of March 31, 2017 0-1 — $ — $ — 1-2 2 9,019 12,500 2-3 7 43,007 77,922 3-4 13 39,085 89,500 4-5 14 39,182 92,900 Thereafter 223 267,200 1,433,413 Total 259 $ 397,493 $ 1,706,235 (Amounts in Thousands, except number of Life Settlement Contracts) Expected Maturity Term in Years Number of Life Settlement Contracts Fair Value (1) Face Value As of December 31, 2016 0-1 — $ — $ — 1-2 2 8,873 12,500 2-3 7 39,495 63,000 3-4 10 37,436 75,422 4-5 10 34,003 82,900 Thereafter 225 237,049 1,405,414 Total 254 $ 356,856 $ 1,639,236 (1) The Company determined the fair value as of March 31, 2017 based on 246 policies out of 259 policies, as the Company assigned no value to 13 of the policies as of March 31, 2017 . The Company determined the fair value as of December 31, 2016 based on 236 policies out of 254 policies, as the Company assigned no value to 18 of the policies as of December 31, 2016 . 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, 2017 and December 31, 2016 : (Amounts in Thousands, except number of Life Settlement Contracts) March 31, 2017 December 31, 2016 Number of policies with a negative value from discounted cash flow model as of period end 13 18 Premiums paid for the preceding twelve month period for period ended $ 1,682 $ 2,640 Death benefit received $ — $ — 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, 2017 , are as follows: (Amounts in Thousands) Premiums Due on Life Settlement Contracts 2017 $ 50,872 2018 51,151 2019 51,368 2020 47,361 2021 44,726 Thereafter 513,283 Total $ 758,761 |
Deferred Policy Acquisitions Co
Deferred Policy Acquisitions Costs | 3 Months Ended |
Mar. 31, 2017 | |
Insurance [Abstract] | |
Deferred Policy Acquisition Costs | Deferred Policy Acquisition Costs The following table reflects the amounts of policy acquisition costs deferred and amortized for the three months ended March 31, 2017 and 2016 : Three Months Ended March 31, (Amounts in Thousands) 2017 2016 As Restated Balance, beginning of period $ 928,920 $ 693,639 Acquisition costs deferred 289,128 252,662 Amortization (192,047 ) (209,994 ) Balance, end of period $ 1,026,001 $ 736,307 |
Loss and loss adjustment expens
Loss and loss adjustment expense reserves | 3 Months Ended |
Mar. 31, 2017 | |
Insurance [Abstract] | |
Loss and loss adjustment expense reserves | Loss and Loss Adjustment Expense Reserves The following table provides a reconciliation of the beginning and ending balances for loss and loss adjustment expense reserves ("Loss and LAE"), reported in the accompanying consolidated balance sheets as of March 31, 2017 and 2016: (Amounts in Thousands) 2017 2016 Loss and LAE, gross of related reinsurance recoverables at beginning of year $ 10,140,716 $ 7,208,367 Less: Reinsurance recoverables at beginning of year 3,873,786 2,665,187 Net balance, beginning of year 6,266,930 4,543,180 Incurred related to: Current year 821,483 639,122 Prior year 18,851 75,951 Total incurred during the year 840,334 715,073 Paid related to: Current year (135,865 ) (93,864 ) Prior year (612,860 ) (478,987 ) Total paid during the year (748,725 ) (572,851 ) Loss portfolio transfers — 168,382 Acquired outstanding loss and loss adjustment reserves 200,802 — Effect of foreign exchange rates 27,889 (69,092 ) Net balance, end of period 6,587,230 4,784,692 Plus reinsurance recoverables at end of period 4,042,932 2,731,397 Loss and LAE, gross of related reinsurance recoverables at end of period $ 10,630,162 $ 7,516,089 In setting its reserves, the Company utilizes a combination of Company loss development factors and industry-wide loss development factors. In the event that the Company’s losses develop more favorably (adversely) than the industry, as a whole, the Company’s liabilities for unpaid losses and LAE should decrease (increase). The Company's management believes that its use of both its historical experience and industry-wide loss development factors provide a reasonable basis for estimating future losses. In either case, future events beyond the control of management, such as changes in law, judicial interpretations of law, and inflation may favorably or unfavorably impact the ultimate settlement of the Company’s Loss and LAE reserves. The anticipated effect of inflation is implicitly considered when estimating liabilities for losses and LAE. While the Company considers anticipated changes in claim costs due to inflation in estimating the ultimate claim costs, the increase in average severity of claims is caused by a number of factors that vary with the individual type of policy written. The Company projects future average severities based on historical trends adjusted for implemented changes in underwriting standards, policy provisions, and general economic trends. The Company monitors those anticipated trends based on actual development and makes modifications, if necessary. The Company's Loss and LAE, gross of related reinsurance recoverables increased $489,445 and $307,722 , respectively, during the three months ended March 31, 2017 and 2016. The increase in 2017 related to the acquisition of AmeriHealth Casualty Insurance Company and increased premium writings. The Company had adverse prior period development of $18,851 during the three months ended March 31, 2017. The adverse development was driven primarily by certain general liability programs in the Company's Specialty Program segment. The increase in 2016 related to a loss portfolio transfer and increased premium writing. The Company's liabilities for unpaid losses and LAE attributable to prior years increased by $75,951 due to adverse loss experience in the Company's Specialty Program segment's general liability (particularly non-admitted programs) and auto liability portfolios, and the Company's Small Commercial Business segment's auto liability portfolio. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company’s outstanding debt consisted of the following at March 31, 2017 and December 31, 2016 : (Amounts in Thousands) March 31, 2017 December 31, 2016 Revolving credit facility $ 130,000 $ 130,000 5.5% Convertible senior notes due 2021 (the "2021 Notes") 5,258 5,223 2.75% Convertible senior notes due 2044 (the "2044 Notes") 168,001 166,387 6.125% Notes due 2023 (the "2023 Notes") 248,253 248,185 Junior subordinated debentures (the "2035-2037 Notes") 122,050 122,028 Trust preferred securities (the "2033-2037 TPS Notes") 92,786 92,786 7.25% Subordinated notes due 2055 (the "7.25% 2055 Notes") 145,234 145,202 7.50% Subordinated notes due 2055 (the "7.50% 2055 Notes") 130,711 130,684 Secured loan agreements 171,842 75,762 Promissory notes 92,566 118,643 $ 1,306,701 $ 1,234,900 Aggregate scheduled maturities of the Company’s outstanding debt, excluding unamortized deferred origination costs, at March 31, 2017 are: (Amounts in Thousands) March 31, 2017 2017 $ 4,833 (1) 2018 32,933 (1) 2019 161,115 2020 26,932 2021 15,277 Thereafter 1,081,517 (2) Total scheduled payments 1,322,607 Unamortized deferred origination costs (15,906 ) $ 1,306,701 (1) Amount does not include scheduled maturities of notes payable on the collateral loan to Maiden of $113,542 in March 2017, $20,192 in April 2018 and $34,240 in June 2018. See Note 14. "Related Party Transactions" for additional information. (2) Amount includes debt outstanding under the 2021 Notes and 2044 Notes, which is net of unamortized original issue discount of $705 and $45,560 , respectively. Additionally, the Company utilizes various letters of credit in its operations. The following is a summary of the Company's letters of credit as of March 31, 2017 : (Amounts in Thousands) Letters of Credit Limit Letters of Credit Outstanding Letters of Credit Available Revolving credit facility $ 175,000 $ 173,252 $ 1,748 Funds at Lloyd's facility, in USD equivalent 645,656 635,394 10,262 ING Bank N.V. and Deutsche Bank Netherlands N.V. facilities, in USD equivalent 81,852 68,070 13,782 Comerica bank letters of credit 75,000 43,067 31,933 UniCredit Bank 100,000 100,000 — Other letters of credit, in aggregate 101,836 101,836 — Interest expense, including amortization of original issue discount and deferred origination costs, as well as applicable bank fees, related to the Company's outstanding debt and letters of credit for the three months ended March 31, 2017 and 2016 was: Three Months Ended March 31, (Amounts in Thousands) 2017 2016 Revolving credit facility $ 1,510 $ 1,156 Funds at Lloyd's facility 1,479 1,199 2021 Notes 117 115 2023 Notes 3,897 3,897 2035-2037 Notes 1,468 1,515 2033-2037 TPS Notes 1,031 — 2044 Notes 3,225 3,116 7.25% 2055 Notes 2,750 2,750 7.50% 2055 Notes 2,559 2,559 Secured loan agreements 1,334 189 Promissory notes 1,663 158 Other, including interest income 2,568 (780 ) Total $ 23,601 $ 15,874 Secured loan agreements On January 12, 2017, the Company, through three wholly-owned subsidiaries, entered into a ten -year secured loan agreement with Teachers Insurance and Annuity Association of America in the aggregate amount of £73,500 (or $92,147 ) to finance the purchase of a commercial office building in London. The loan bears interest at an annual rate of 3.45% and matures on January 15, 2027 . The loan requires quarterly interest payments for the term of the loan, with the principal and any accrued interest to be paid at maturity. On February 24, 2017, the Company, through a wholly-owned subsidiary, entered into a ten-year secured loan agreement with Citigroup Global Markets Realty Corp. in the aggregate principal amount of $11,350 to finance the purchase of a commercial office building in Alpharetta, Georgia. The mortgage bears interest at a fixed annual rate of 4.67% and matures on March 6, 2027 . The loan requires monthly interest only payments through March 6, 2019, principal and interest payments of approximately $64 through February 6, 2027, with any remaining principal and accrued interest to be paid at maturity. Waivers Related to Restatement and Other Matters In March 2017, except as described below, the Company obtained waivers from the required lenders under each of its credit facilities and secured loan agreements that the Company determined that an event of default had occurred as a result of the restatement discussed in Note 2. "Restatement of Previously Issued Consolidated Financial Statements" and its failure to timely file its Annual Report on Form 10-K, including as a result of any related cross defaults. Such waivers provided a waiver of all known defaults or events of default under such credit facilities and secured loan agreements, including one or more of the following, as applicable, (i) the occurrence of any defaults and events of default arising from the breach of representations, warranties and covenants contained in certain of the Company's credit facilities due to the restatement of its historical financial statements and related certifications in respect of fiscal years ended December 31, 2015 and 2014, and the quarterly periods in 2016 and the delay in filing its Form 10-K for the fiscal year ended December 31, 2016, (ii) the occurrence of any cross default that may have arisen from events of default under the Company’s other indebtedness as a result of the restatement and failure to timely deliver the Form 10-K and the failure to obtain a waiver from the lenders under certain other credit facilities, (iii) the occurrence of any cross default that may have arisen from an event of default under a subsidiary’s letter of credit facilities due to past breaches of certain financial ratios and rating requirements that are no longer applicable and for which waivers have been received, (iv) the occurrence of any cross default that may have arisen from an event of default under the Funds at Lloyd’s Facility, due to past breaches of a financial covenant that is no longer applicable and for which a prospective and retroactive waiver has been received, and (v) any failure to deliver notices in connection with any of the foregoing. The Company has a ten -year secured loan agreement with Citigroup Global Markets Realty Corp. in the aggregate amount of $29,000 that is secured by a commercial office building the Company owns in Dallas, Texas. Citigroup Global Markets Realty Corp. transferred its interest under the loan agreement to Citigroup Commercial Mortgage Trust 2016-C1, a commercial mortgage securitization vehicle. In March 2017, the Company sought a waiver from the servicer under the loan agreement relating to an event of default thereunder as a result of the restatement of the Company’s financial statements and its failure to timely file its Form 10-K. The Company has not yet obtained such a wavier and has no assurances that such a waiver will be obtained in the future. |
Acquisition Costs and Other Und
Acquisition Costs and Other Underwriting Expenses | 3 Months Ended |
Mar. 31, 2017 | |
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, 2017 and 2016 : Three Months Ended March 31, (Amounts in Thousands) 2017 2016 (As restated) Policy acquisition expenses $ 137,386 $ 148,665 Salaries and benefits 171,377 117,821 Other insurance general and administrative expenses 19,452 5,982 $ 328,215 $ 272,468 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share There were no outstanding unvested restricted shares as of March 31, 2017 and 2016 . 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, 2017 and 2016 : Three Months Ended March 31, (Amounts in Thousands, except for earnings per share) 2017 2016 As Restated Basic earnings per share: Net income attributable to AmTrust common shareholders $ 22,632 $ 83,978 Weighted average common shares outstanding - basic 170,864 175,585 Net income per AmTrust common share - basic 0.13 $ 0.48 Diluted earnings per share: Net income attributable to AmTrust common shareholders $ 22,632 $ 83,978 Weighted average common shares outstanding – basic 170,864 175,585 Plus: Dilutive effect of stock options, convertible debt, other 1,828 2,342 Weighted average common shares outstanding – dilutive 172,692 177,927 Net income per AmTrust common shares – diluted $ 0.13 $ 0.47 The Company's anti-dilutive securities excluded from diluted earnings per share calculation were immaterial for the three months ended March 31, 2017 and 2016 , respectively. |
Share Based Compensation
Share Based Compensation | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share Based Compensation | Share Based Compensation The Company’s 2010 Omnibus Incentive Plan (the “Plan”) permits the Company to grant to its officers, employees and non-employee directors incentive compensation directly linked to the price of the Company’s common stock. The Company is authorized to issue up to 14,630,136 shares of Company stock for awards of options to purchase shares of the Company’s common stock ("Stock Options"), restricted stock, restricted stock units (“RSU”), performance share 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 is subject to the authority of the Company’s Board of Directors who may adjust the 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, 2017 , approximately 7,000,000 shares of Company common stock remained available for grants under the Plan. The Company recognizes compensation expense for its share-based payments based on the fair value of the awards. Compensation expense for all share-based payments was approximately $5,818 and $5,641 for the three months ended March 31, 2017 and 2016 , respectively. The Company has unrecognized compensation cost related to unvested stock options and non-vested RSU awards of $39,528 and $44,975 at March 31, 2017 and December 31, 2016 , respectively. Stock Options The Company may grant Stock Options at prices equal to the closing stock price of the Company’s stock on the dates the Stock Options are granted. The Stock 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 Stock 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 following schedule shows all Stock Options granted, exercised, and expired under the Plan for the three months ended March 31, 2017 and 2016 : Three Months Ended March 31, Three Months Ended March 31, 2017 2016 Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Outstanding at beginning of period 2,305,351 $ 7.54 2,783,880 $ 6.99 Granted — — — — Exercised (556,252 ) 5.43 (210,018 ) 3.87 Canceled or terminated — — — — Outstanding at end of period 1,749,099 8.21 2,573,862 7.24 The Company did not grant any Stock Options during the three months ended March 31, 2017 and 2016 . As of March 31, 2017 and 2016 , outstanding Stock Options had an approximate weighted average life of 3.0 and 3.1 years, respectively. The intrinsic value of Stock Options exercised during the three months ended March 31, 2017 and 2016 was $10,069 and $4,561 , respectively. The intrinsic value of Stock Options that were outstanding as of March 31, 2017 and December 31, 2016 was $18,963 and $45,812 , respectively. The intrinsic value of Stock Options that were exercisable as of March 31, 2017 and December 31, 2016 was $18,934 and $45,506 , respectively. Cash received from Stock Options exercised was $3,022 and $813 during the three months ended March 31, 2017 and 2016 , respectively. The excess tax benefit from award exercises was approximately $391 and $1,539 for the three months ended March 31, 2017 and 2016 , respectively. During 2017 , such benefits were recorded as a reduction of income tax payable and FIT expense. During 2016 , such benefits were recorded as a reduction of income tax payable and an increase in additional paid in capital. Restricted stock, RSU and PSU The Company grants restricted shares, RSUs and PSUs with a grant date fair value equal to the closing stock price of the Company’s stock on the dates the shares or units are granted. The restricted shares and RSUs vest ratably over a period of one to four years, while PSUs vest based on the terms of the awards. As of March 31, 2017 and 2016 , all restricted stock, RSU and PSU outstanding had an approximate weighted average remaining life of 1.3 years and 1.4 years, respectively. A summary of the Company’s restricted stock and RSU activity for the three months ended March 31, 2017 and 2016 is shown below: Three Months Ended March 31, Three Months Ended March 31, 2017 2016 Shares or Units Weighted Average Grant Date Fair Value Shares or Units Weighted Average Grant Date Fair Value Non-vested at beginning of period 1,965,011 $ 24.38 1,853,516 $ 20.54 Granted 20,157 23.03 250,038 25.73 Vested (298,427 ) 20.84 (447,198 ) 15.78 Forfeited (8,383 ) 25.81 (25,264 ) 24.11 Non-vested at end of period 1,678,358 24.99 1,631,092 22.58 The Company's RSU grant that typically occurs in early March of each year did not occur until April in 2017 , causing the significant decrease in the RSUs granted during the three months ended March 31, 2017 as compared to the three months ended March 31, 2016 . A summary of the Company's PSU activity for the three months ended March 31, 2017 and 2016 is shown below: Three Months Ended March 31, Three Months Ended March 31, 2017 2016 Shares or Units Weighted Average Grant Date Fair Value Shares or Units Weighted Average Grant Date Fair Value Non-vested at beginning of period 680,597 $ 25.57 752,466 $ 24.58 Granted 11,917 23.03 — — Vested — — — — Forfeited (6,116 ) 26.63 (914 ) 22.60 Non-vested at end of period 686,398 25.51 751,552 24.58 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. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [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, 2017 and 2016 : Three Months Ended March 31, As Restated (Amounts in Thousands) 2017 2016 Income before equity in earnings of unconsolidated subsidiaries $ 67,607 $ 109,970 Tax at federal statutory rate of 35% $ 23,662 $ 38,490 Tax effects resulting from: Foreign rate differential (10,909 ) (17,320 ) Adjustment to prior year taxes 1,407 147 Permanent adjustments 5,676 (4,473 ) Valuation allowance 1,951 (511 ) Other, net (431 ) 2,627 $ 21,356 $ 18,960 Effective tax rate 31.6 % 17.2 % As of March 31, 2017 , the Company has U.S. Net Operating Losses ("NOLs") of $26,338 that expire beginning in 2019 through 2036 . In addition, these NOLs are subject to certain limitations under Section 382 of the Internal Revenue Code due to changes in ownership of $9,084 per year. The Company also has foreign NOLs of $808,549 , the majority of which have no expiration. The Company’s management believes that as of March 31, 2017 , except for a portion of foreign NOLs, it will realize the benefits of its deferred tax assets, which are included as a component of other liabilities on the consolidated balance sheet, due to the Company having an overall deferred tax liability position. As a result, the Company recorded a valuation allowance of $147,194 and $142,462 as of March 31, 2017 and December 31, 2016 , respectively. The increase in the valuation allowance from December 31, 2016 to March 31, 2017 was primarily due to the increase of gross NOLs in Luxembourg, which required a full valuation allowance. The Company did not utilize any equalization reserves attributed to its Luxembourg reinsurance companies during the three months ended March 31, 2017 and 2016 , respectively. 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 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, 2011 and forward. The Company is currently under audit in the U.S. for tax years 2013 and 2014 . The audit is ongoing as of March 31, 2017 and is expected to close during 2017. As permitted by FASB ASC 740-10 Income Taxes , the Company recognizes interest and penalties, if any, related to unrecognized tax benefits in its income tax provision. The Company does not have any unrecognized tax benefits and, therefore, has not recorded any unrecognized tax benefits, or any related interest and penalties, as of March 31, 2017 and December 31, 2016 . No interest or penalties have been recorded by the Company for the three months ended March 31, 2017 and 2016 , respectively. The Company does not anticipate any significant changes to its total unrecognized tax benefits in the next 12 months. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Significant Transactions with Maiden Holdings, Ltd. 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 stockholders, and, respectively, the former chairman of the board of directors, a director, and the current Chairman, Chief Executive Officer and President of the Company. As of March 31, 2017 , two of the Company's principal stockholders, Leah Karfunkel ( one of the Company's directors and co-trustee of the Michael Karfunkel Family 2005 Trust (the “Trust”)), and Barry Zyskind, owned or controlled approximately 7.9% and 7.5% , respectively, of the issued and outstanding capital stock of Maiden. Mr. Zyskind serves as the non-executive chairman of Maiden’s board of directors. Maiden Reinsurance Ltd. (“Maiden Reinsurance”), 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 Reinsurance to enter into a quota share reinsurance agreement (the “Maiden Quota Share”), as amended, by which AII retrocedes to Maiden Reinsurance an amount equal to 40% of the premium written for certain lines of business 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). AII also retrocedes 40% of losses. Certain business that the Company commenced writing after the effective date of the Maiden Quota Share, including, among other lines, the Company’s European medical liability business discussed below, business assumed from Tower Group International, Ltd. (“Tower”) 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 DAC (“AIU”), for which the AmTrust Ceding Insurers’ net retention exceeds $5,000 is not ceded to Maiden Reinsurance under the Maiden Quota Share (ceded business defined as “Covered Business”). 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 Reinsurance to the extent that the loss ratio to Maiden Reinsurance, 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 June 30, 2019 and will automatically renew for successive three -year terms unless either AII or Maiden Reinsurance notifies the other of its election not to renew no 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 Reinsurance, run-off, or a reduction of 50% or more of the shareholders’ equity of Maiden Reinsurance or the combined shareholders’ equity of AII and the AmTrust Ceding Insurers. The Company, through its subsidiaries AEL and AIU, has a reinsurance agreement with Maiden Reinsurance by which the Company cedes to Maiden Reinsurance a percentage of its European medical liability business, including business in force at April 1, 2011. From April 1, 2011 through June 30, 2016, that percentage ceded by both AEL and AIU was 40% . Effective July 1, 2016, the percentage ceded by AEL decreased to 32.5% , and, effective July 1, 2017, will decrease to 20% . The quota share had an initial term of one year and has been renewed through March 31, 2018. The agreement can be terminated at any April 1 by either party on four months’ prior written notice. Maiden Reinsurance 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 Company did not receive any profit commissions for this business for the three months ended March 31, 2017 or 2016. The following is the effect on the Company’s results of operations for the three months ended March 31, 2017 and 2016 related to the Maiden Quota Share agreement: Three Months Ended March 31, (Amounts in Thousands) 2017 2016 Results of operations: Premium written – ceded $ (586,913 ) $ (543,688 ) Change in unearned premium – ceded 76,798 86,698 Earned premium - ceded $ (510,115 ) $ (456,990 ) Ceding commission on premium written $ 185,653 $ 174,334 Ceding commission – deferred (31,951 ) (35,943 ) Ceding commission – earned $ 153,702 $ 138,391 Incurred loss and loss adjustment expense – ceded $ 420,556 $ 354,854 Note Payable to Maiden – Collateral for Proportionate Share of Reinsurance Obligations In conjunction with the Maiden Quota Share, as described above, the Company entered into a loan agreement with Maiden Reinsurance during the fourth quarter of 2007, whereby Maiden Reinsurance loaned to the Company the amount equal to AII’s quota share of the obligations of the AmTrust Ceding Insurers that AII was then obligated to secure. Advances under the loan, which were made in three separate tranches of $113,542 (December 2007), $20,192 (April 2008) and $34,240 (June 2008), are secured by promissory notes. The loan agreement provides for interest at a rate of LIBOR plus 90 basis points (which is applicable to all three advances) and is payable on a quarterly basis. The Company recorded $712 and $562 of interest expense during the three months ended March 31, 2017 and 2016, respectively.The maturity date with respect to each advance in ten years from the date the advance was made. Effective December 1, 2008, AII and Maiden Reinsurance entered into a Reinsurer Trust Assets Collateral agreement whereby Maiden Reinsurance is required to provide AII the assets required to secure Maiden’s proportional share of AII’s obligations to the AmTrust Ceding Insurers. In addition, pursuant to the quota share reinsurance agreement among AEL, AIU and Maiden Reinsurance for the Company’s European medical liability business, Maiden Reinsurance is required to provide AEL and AIU the assets required to secure AEL’s and AIU’s obligations. The aggregate amount of this collateral contained in various reinsurance trusts as of March 31, 2017 was approximately $3,146,767 . Maiden retains ownership of the collateral in the trust accounts. Reinsurance Brokerage Agreement The Company, through a subsidiary, has 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 $4,160 and $6,862 of brokerage commission during the three months ended March 31, 2017 and 2016, respectively. The brokerage commission was recorded as a component of service and fee income. Asset Management Agreement A subsidiary of the Company manages the assets of Maiden Reinsurance and certain of its affiliates for an annual rate of 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 an annual rate of 0.15% of the average aggregate value of the assets under management for the preceding quarter if the average aggregate value for the preceding quarter is more than $1,000,000 . The Company managed approximately $4,815,565 of assets, as of March 31, 2017, related to this agreement. As a result of this agreement, the Company recorded $1,823 and $1,645 of asset management fees during the three months ended March 31, 2017 and 2016. The asset management fees were recorded as a component of service and fee income. Significant Transactions with National General Holding Corp. The Company has an ownership interest in NGHC of approximately 12% . NGHC is a publicly-held specialty personal lines insurance holding company (Nasdaq: NGHC) that operates twenty-two insurance companies in the United States and provides a variety of insurance products, including personal and commercial automobile, homeowners and umbrella, and supplemental health. NGHC's two largest stockholders are the Trust and a grantor retained annuity trust controlled by Leah Karfunkel. Leah Karfunkel, who is co-trustee of the Trust along with Barry Zyskind, is a member of the Company’s board of directors, and the mother-in-law of Barry Zyskind, the Company’s Chairman, Chief Executive Officer and President. The ultimate beneficiaries of the Trust include Leah Karfunkel’s children, one of whom is married to Mr. Zyskind. In addition, Barry Karfunkel, the son of Leah Karfunkel and brother-in-law of Barry Zyskind, is the chief executive officer of NGHC and Barry Zyskind is NGHC’s non-executive chairman of the board. 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. During the three months ended March 31, 2017 and 2016, the Company recorded $3,957 and $5,776 of income, respectively, related to its equity investment in NGHC. Master Services Agreement The Company provides NGHC and its affiliates information technology services in connection with the development and licensing of a policy management system. The Company provides the license at a cost that is currently 1.25% of gross premiums written of NGHC and its affiliates plus the Company’s costs for development and support services. The Company provides development services at a price of cost plus 20% . 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 also provides NGHC and its affiliates lockbox services for policies processed on the system, and scanning of correspondence and supplemental materials. The Company charges NGHC for these services based on actual volume and actual cost. The Company recorded approximately $11,786 and $9,910 of fee income during the three months ended March 31, 2017 and 2016, respectively, related to this agreement. Asset Management Agreement A subsidiary of the Company manages the assets of certain of NGHC’s subsidiaries, including the assets of reciprocal insurers managed by subsidiaries of NGHC, for an annual rate of 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 an annual rate of 0.15% of the average aggregate value of the assets under management for the preceding quarter if the average aggregate value for the preceding quarter is more than $1,000,000 . The Company managed approximately $3,309,795 of assets as of March 31, 2017 related to this agreement. As a result of this agreement, the Company recorded approximately $1,079 and $793 of asset management fees during the three months ended March 31, 2017 and 2016. The asset management fees were recorded as a component of service and fee income. 800 Superior, LLC The Company and NGHC each have a fifty percent ownership interest in 800 Superior, LLC ("800 Superior"), which owns an office building in Cleveland, Ohio. The cost of the building was approximately $7,500 . The Company has been appointed managing member of 800 Superior. Additionally, in conjunction with the Company’s approximate 12% ownership percentage of NGHC, the Company ultimately receives 56% of the profits and losses of 800 Superior. As such, in accordance with ASC 810-10, Consolidation, the Company has been deemed the primary beneficiary and, therefore, consolidates this entity. NGHC currently leases office space from 800 Superior. The lease agreement is through 2027. NGHC paid 800 Superior approximately $703 and $683 of rent during the three months ended March 31, 2017 and 2016, respectively. As discussed in Note 16. “New Market Tax Credit,” 800 Superior, 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. 4455 LBJ Freeway, LLC In 2015, the Company and NGHC each acquired an ownership interest in 4455 LBJ Freeway, LLC (“4455 LBJ Freeway”), which owns an office building in Dallas, Texas. The cost of the building was approximately $21,050 . The Company has been appointed the managing member of 4455 LBJ Freeway. Additionally, in conjunction with the Company’s approximate 12% ownership percentage of NGHC, the Company ultimately receives 56% of the profits and losses of 4455 LBJ Freeway. As such, in accordance with ASC 810-10, Consolidation, the Company consolidates this entity. NGHC's portion of the net assets and earnings are recorded within non-controlling interest in the condensed consolidated financial statements. The Company recorded approximately $527 and $341 of service and fee income related to rent for the three months ended March 31, 2017 and 2016, respectively. In addition, NGHC has an office lease agreement with 4455 LBJ Freeway. The lease agreement is through February 2028. Lastly, 4455 LBJ Freeway entered into a ten-year loan agreement secured by the office building owned by 4455 LBJ Freeway. As part of that transaction, the Company and NGHC provided a joint and several guaranty to the lender. As a result, the Company and NGHC entered into an agreement to contribute 50% toward any payments the other party would be required to make pursuant to this guaranty. Significant Transactions with ACP Re, Ltd. ACP Re, Ltd. (“ACP Re”) is a privately-held Bermuda reinsurance holding company owned by the Trust. The following section describes the agreements in place between the Company and its subsidiaries and ACP Re and its subsidiaries. Asset Management Agreement A subsidiary of the Company manages the assets of ACP Re and certain of its subsidiaries for an annual rate of 0.20% of the average aggregate value of the assets under management, excluding investment in AmTrust stock, for the preceding quarter if the average aggregate value for the preceding quarter is $1,000,000 or less, and an annual rate of 0.15% of the average aggregate value of the assets under management, excluding investments in AmTrust stock, for the preceding quarter if the average aggregate value for the preceding quarter is more than $1,000,000 . The Company managed $385,931 of assets as of March 31, 2017 . The Company recorded approximately $210 and $231 of asset management fees during the three months ended March 31, 2017 and 2016, respectively. The asset management fees were recorded as a component of service and fee income. ACP Re Credit Agreement The Company, as Administrative Agent, AII and NG Re Ltd., as Lenders, and ACP Re Holdings, LLC (the "Borrower") and the Trust entered into an Amended and Restated Credit Agreement on September 20, 2016 (the "ACP Re Credit Agreement"), pursuant to which the Lenders made a $250,000 loan ( $125,000 made by each Lender) to the Borrower. The ACP Re Credit Agreement amended and restated the original credit agreement between the parties dated September 15, 2014, and was entered into following approval by the Superior Court of the State of California of the Plan of Conservation and Liquidation developed by the Commissioner of Insurance of the State of California for CastlePoint National Insurance Company (“CNIC”) (the “Conservation Plan”), and the $200,000 contribution to CNIC by members of the Michael Karfunkel family on September 20, 2016 (the “Contribution”). The ACP Re Credit Agreement has a maturity date of September 20, 2036 . Outstanding borrowings under the ACP Re Credit Agreement bear interest at a fixed annual rate of 3.70% (payable in cash, semi-annually in arrears on the last day of January and July), provided that up to 1.20% thereof may be paid in kind. Fees payable to the Company for its service as Administrative Agent include an annual fee equal to $30 , plus reimbursement of costs, expenses and certain other charges. Commencing on September 20, 2026, and for each year thereafter, 2% of the then outstanding principal balance of the loan (inclusive of any amounts previously paid in kind) is due and payable. At the Lenders’ discretion, the Borrower may repay the loan using cash or tradeable stock of an equivalent market value of any publicly traded company on the NYSE, NASDAQ or London stock exchange. The Borrower has the right to prepay the amounts borrowed, in whole or in part. The ACP Re Credit Agreement contains a financial covenant whereby the Trust will cause the Borrower to maintain assets having a value greater than 115% of the value of the then outstanding loan balance, and if there is a shortfall, the Trust will make a contribution to the Borrower of assets having a market value of at least the shortfall (the “Maintenance Covenant”). The obligations of the Borrower are secured by equity interests, cash and cash equivalents, other investments held by the Borrower and proceeds of the foregoing in an amount equal to the requirements of the Maintenance Covenant. The ACP Re Credit Agreement also provides for customary events of default, with grace periods where appropriate, including failure to pay principal when due, failure to pay interest or fees within three business days after becoming due, failure to comply with covenants, breaches of representations and warranties, certain insolvency or receivership events affecting the Borrower, the occurrence of certain material judgments, certain amounts of reportable ERISA or foreign pension plan noncompliance events, if any security interest created under the ACP Re Credit Agreement ceases to be in full force and effect, a change of control of greater than 50% , or an uncured breach of the Maintenance Covenant. Upon the occurrence and during the continuation of an event of default, the Company, as Administrative Agent, upon the request of any Lender, would declare the Borrower's obligations under the ACP Re Credit Agreement immediately due and payable and/or exercise any and all remedies and other rights under the ACP Re Credit Agreement. As of March 31, 2017 and December 31, 2016 , the Company recorded $126,580 and $127,188 , respectively, of loan and related interest receivable as a component of other assets on the condensed consolidated balance sheet. The Company recorded total interest income of approximately $1,159 and $2,188 for the three months ended March 31, 2017 and 2016, respectively, under the ACP Re Credit Agreement. Other Related Party Transactions Lease Agreements The Company leases office space at 59 Maiden Lane in New York, New York from 59 Maiden Lane Associates, LLC, an entity that is wholly-owned by Leah Karfunkel and George Karfunkel. The lease term is through May 2023. The Company paid approximately $472 and $382 of rent during the three months ended March 31, 2017 and 2016, respectively, for this leased office space. The Company leases office space in Chicago, Illinois from IC 233 Building Company LLC, a wholly-owned subsidiary of Illinois Center Building Company, discussed below. The lease term is ten years through the end of May 2026. The Company's rent expense was $100 during the three months ended March 31, 2017 for the leased office space. During the three months ended March 31, 2016, the Company leased office space in Chicago, Illinois from 135 LaSalle Property, LLC, an entity that is wholly-owned by entities controlled by Leah Karfunkel and George Karfunkel. The Company paid rent of approximately $132 during three months ended March 31, 2016 . The lease terminated on May 31, 2016. Equity Investments in Limited Partnerships In February 2015, the Company invested approximately $9,700 in North Dearborn Building Company, L.P. (“North Dearborn”), a limited partnership that owns an office building in Chicago, Illinois. NGHC is also a limited partner in North Dearborn, and the general partner is NA Advisors GP LLC (“NA Advisors”), an entity controlled by a related party and managed by an unrelated third party. The Company and NGHC each received a 45% limited partnership interest in North Dearborn for their respective $9,700 investments, while NA Advisors invested approximately $2,200 and holds a 10% general partnership interest and a 10% profit interest, which NA Advisors pays to the unrelated third party manager. From time to time, the Company, NGHC and NA Advisors will make capital contributions to, or receive distributions from, North Dearborn, in all instances in accordance with their respective ownership percentages. North Dearborn appointed NA Advisors as the general manager to oversee the day-to-day operations of the office building and pays NA Advisors an annual fee for these services. This investment is included within other investments and is accounted for using the equity method of accounting on a three-month lag basis. The Company recorded approximately $318 and $273 of income from this investment during the three months ended March 31, 2017 and 2016, respectively. In August 2015, certain of the Company's subsidiaries invested approximately $53,715 in Illinois Center Building Company, L.P. (“Illinois Center”), a limited partnership that owns an office building complex in Chicago, Illinois. NGHC and ACP Re are also limited partners in Illinois Center, and the general partner is NA Advisors. The Company and NGHC each have a 37.5% limited partnership interest in Illinois Center, while ACP Re has a 15.0% limited partnership interest. NA Advisors holds a 10% general partnership interest and a 10% profit interest, which NA Advisors pays to the unrelated third party manager. From time to time, the Company, NGHC, ACP Re and NA Advisors will make capital contributions to, or receive distributions from, Illinois Center, in all instances in accordance with their respective ownership percentages. Illinois Center appointed NA Advisors as the general manager to oversee the day-to-day operations of the office building and pays NA Advisors an annual fee for these services. This investment is included within other investments and is accounted for using the equity method of accounting on a three-month lag basis. The Company recorded approximately $448 and $593 of income from this investment during the three months ended March 31, 2017 and 2016, respectively. These limited partnerships are considered variable interest entities ("VIEs"). Based on current accounting guidance, the Company is required to consolidate any VIEs in which it is deemed to be the primary beneficiary through having: (i) power over the significant activities of the entity, and (ii) having an obligation to absorb losses or the right to receive benefits from the VIE that are potentially significant to the VIE. The Company performed a primary beneficiary analysis on the aforementioned limited partnerships and determined the Company was not the primary beneficiary since it does not have power over the significant activities of the entity. These limited partnerships are recorded as a component of other investments on the condensed consolidated balance sheet. The carrying value of these limited partnerships, in aggregate, was $73,094 and $72,328 as of March 31, 2017 and December 31, 2016 , respectively. The maximum exposure to loss, which is the estimated loss that would be incurred under severe, hypothetical circumstances, for which the possibility of occurrence is remote, such as where the value of the Company's interests declines to zero, without any consideration of recovery or offset from any economic hedges, was $73,094 and $72,328 as of March 31, 2017 and December 31, 2016 , respectively. The maximum exposure to loss is a required disclosure under US GAAP and is not an indication of expected loss. Use of Company Aircraft The Company and its wholly-owned subsidiary, AmTrust Underwriters, Inc. (“AUI”), are each a party to aircraft time share agreements with each of Maiden and NGHC. The agreements provide for payment to the Company or AUI for the usage of their respective company-owned aircraft and cover actual expenses incurred and permissible under federal aviation regulations. Such expenses include, among others, travel and lodging expenses of the crew, in-flight catering, flight planning and weather contract services, ground transportation, fuel, landing and hanger fees, and airport taxes. Neither the Company nor AUI charges Maiden or NGHC for the fixed costs that would be incurred in any event to operate the aircrafts (for example, aircraft purchase costs, insurance and flight crew salaries). During the three months ended March 31, 2017 , Maiden paid $13 and NGHC paid $103 , respectively, for their respective use of the company-owned aircraft under these agreements. In addition, for personal travel, Barry Zyskind entered into an aircraft reimbursement agreement with the Company and AUI. Since entering into such agreements, Mr. Zyskind has fully reimbursed the Company and AUI for the incremental cost billed by the Company and AUI for his personal use of the company-owned aircraft. During the three months ended March 31, 2017 and 2016, Mr. Zyskind reimbursed the Company and AUI, in aggregate, $196 and $80 , respectively, for his personal use of the company-owned aircraft. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions AmeriHealth Casualty Insurance Company On February 28, 2017 , the Company completed its previously announced acquisition of AmeriHealth Casualty Insurance Company ("AmeriHealth Casualty"), a workers’ compensation insurance company operating primarily in Pennsylvania and New Jersey. The Company acquired 100% of the outstanding stock of AmeriHealth Casualty for approximately $92,786 in cash, which is subject to a reserve guarantee of approximately $40,000 , subject to a 10% loss corridor retained by the Company and payable after five years, based on the development of AmeriHealth Casualty’s loss reserves as of June 30, 2016 . As of March 31, 2017, the Company had recorded $25,000 related to the reserve guarantee. A summary of the preliminary assets acquired and liabilities assumed for AmeriHealth Casualty are as follows: (Amounts in Thousands) Assets Cash and investments $ 275,351 Premium receivable 46,253 Accrued interest and dividends 1,162 Reinsurance recoverable 16,455 Other assets 31,437 Goodwill and intangible assets 13,976 Total assets $ 384,634 Liabilities Loss and loss adjustment expense reserves $ 214,981 Unearned premiums 49,284 Accrued expenses and other liabilities 27,583 Total liabilities $ 291,848 Acquisition price $ 92,786 The goodwill and intangible assets, as well as AmeriHealth Casualty's results of operations, are included as a component of the Small Commercial Business segment. The goodwill is not expected to be deductible for income tax purposes. The intangible assets consist primarily of licenses and agent relationships. As a result of this acquisition, the Company recorded approximately $5,636 of gross written premium and $971 of net income during the three months ended March 31, 2017 . Other The Company had an additional immaterial acquisitions totaling approximately $2,103 during the three months ended March 31, 2017 . No individual acquisition were significant and, therefore, the Company was not required to include any pro forma financial information in this report. |
New Market Tax Credit
New Market Tax Credit | 3 Months Ended |
Mar. 31, 2017 | |
New Market Tax Credit [Abstract] | |
New Market Tax Credit | New Market Tax Credit In 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 a weighted average interest rate approximately of 2.0% 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 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 an approximate 12% ownership in NGHC. 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 Accumula
Shareholder Equity and Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Shareholder Equity and Accumulated Other Comprehensive Income (Loss) | Stockholder's Equity and Accumulated Other Comprehensive Income (Loss) Stockholders' Equity The following table summarizes the ownership components of total stockholders' equity: Three Months Ended March 31, 2017 2016 (Amounts in Thousands) AmTrust Non-Controlling Interest Total AmTrust Non-Controlling Interest Total As restated As restated Balance, December 31, $ 3,269,103 $ 196,510 $ 3,465,613 $ 2,723,780 $ 176,455 $ 2,900,235 Net income 39,203 10,720 49,923 92,769 3,857 96,626 Unrealized holding gain 25,591 — 25,591 82,973 — 82,973 Reclassification adjustment (11,630 ) — (11,630 ) (428 ) — (428 ) Foreign currency translation 13,863 — 13,863 (47,194 ) — (47,194 ) Unrealized gain on interest rate swap 92 — 92 119 — 119 Share exercises, compensation and other 5,911 — 5,911 2,686 — 2,686 Common share purchase, net — — — (14,391 ) — (14,391 ) Common stock dividends (29,107 ) — (29,107 ) (26,313 ) — (26,313 ) Preferred stock issuance, net of fees — — — 139,070 — 139,070 Preferred stock dividends (16,571 ) — (16,571 ) (8,791 ) — (8,791 ) Capital contribution, net — 8,638 8,638 — — — Balance, March 31, $ 3,296,455 $ 215,868 $ 3,512,323 $ 2,944,280 $ 180,312 $ 3,124,592 During the three months ended March 31, 2017 , net income attributable to non-controlling interest was $10,720 , and net income attributable to non-controlling interest and redeemable non-controlling interest of subsidiaries totaled $11,005 . During the three months ended March 31, 2016, net income attributable to non-controlling interest was $3,857 , and net income attributable to non-controlling interest and redeemable non-controlling interest of subsidiaries was $ 4,017 . Accumulated Other Comprehensive Income (Loss) The following table summarizes the activities and components of accumulated other comprehensive income (loss): (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, 2016 $ (188,203 ) $ 65,830 $ (172 ) $ (3,177 ) $ (125,722 ) Other comprehensive income before reclassification 13,863 32,031 92 — 45,986 Amounts reclassed from accumulated other comprehensive income — (11,630 ) — — (11,630 ) Income tax (expense) — (6,440 ) — — (6,440 ) Net current-period other comprehensive income 13,863 13,961 92 — 27,916 Balance, March 31, 2017 $ (174,340 ) $ 79,791 $ (80 ) $ (3,177 ) $ (97,806 ) Balance, December 31, 2015 (As restated) $ (98,074 ) $ (34,511 ) $ (700 ) $ (107 ) $ (133,392 ) Other comprehensive income before reclassification (As restated) (47,194 ) 127,652 183 — 80,641 Amounts reclassed from accumulated other comprehensive income — (428 ) — — (428 ) Income tax (expense) (As restated) — (44,679 ) (64 ) — (44,743 ) Net current-period other comprehensive income (As restated) (47,194 ) 82,545 119 — 35,470 Balance, March 31, 2016 $ (145,268 ) $ 48,034 $ (581 ) $ (107 ) $ (97,922 ) |
Commitment and Contingent Liabi
Commitment and Contingent Liabilities | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitment and Contingent Liabilities | Commitment and Contingent Liabilities Litigation 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, 2017 | |
Segment Reporting [Abstract] | |
Segments | Segments The Company operates three business segments: Small Commercial Business; Specialty Risk and Extended Warranty; and Specialty Program. The Company also has a former segment, Personal Lines Reinsurance, which is in run-off and is now included within its Corporate and Other segment. The Corporate and Other segment also 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 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 the Company’s stockholders with an understanding of the Company’s business and operating performance. During the three months ended March 31, 2017, the Company did not have any segment derive over ten percent of its total revenue from one agent. During three months ended March 31, 2016 , the Company's Specialty Program segment derived over ten percent of its gross written premium primarily from one agent. The following tables summarize the results of operations of the business segments for the three months ended March 31, 2017 and 2016 : (Amounts in Thousands) Small Commercial Business Specialty Risk and Extended Warranty Specialty Program Corporate and Other Total Three Months Ended March 31, 2017: Gross written premium $ 1,257,285 $ 732,442 $ 276,553 $ — $ 2,266,280 Net written premium 658,979 510,208 174,879 — 1,344,066 Change in unearned premium (105,354 ) (36,718 ) 20,538 — (121,534 ) Net earned premium 553,625 473,490 195,417 — 1,222,532 Loss and loss adjustment expense (377,437 ) (312,604 ) (150,293 ) — (840,334 ) Acquisition costs and other underwriting expenses (154,641 ) (118,463 ) (55,111 ) — (328,215 ) (532,078 ) (431,067 ) (205,404 ) — (1,168,549 ) Underwriting income 21,547 42,423 (9,987 ) — 53,983 Service and fee income 28,654 86,941 1,537 20,364 137,496 Investment income and realized gain 29,690 26,128 16,122 — 71,940 Other expenses (45,174 ) (26,316 ) (9,936 ) (81,427 ) (162,853 ) Interest expense (13,093 ) (7,628 ) (2,880 ) — (23,601 ) Foreign currency loss — (17,968 ) — — (17,968 ) Gain on life settlement contracts 4,776 2,783 1,051 — 8,610 (Provision) benefit for income taxes (7,878 ) (31,742 ) 1,221 17,043 (21,356 ) Equity in earnings of unconsolidated subsidiary – related party — — — 3,957 3,957 Net income (loss) $ 18,522 $ 74,621 $ (2,872 ) $ (40,063 ) $ 50,208 (Amounts in Thousands) Small Commercial Business Specialty Risk and Extended Warranty Specialty Program Corporate and Other Total Three Months Ended March 31, 2016 (As restated) Gross written premium $ 1,066,132 $ 529,446 $ 337,496 $ — $ 1,933,074 Net written premium 624,528 337,833 258,318 — 1,220,679 Change in unearned premium (120,434 ) (15,992 ) (9,971 ) — (146,397 ) Net earned premium 504,094 321,841 248,347 — 1,074,282 Loss and loss adjustment expense (332,684 ) (210,936 ) (171,453 ) — (715,073 ) Acquisition costs and other underwriting expenses (133,532 ) (72,851 ) (66,085 ) — (272,468 ) (466,216 ) (283,787 ) (237,538 ) — (987,541 ) Underwriting income 37,878 38,054 10,809 — 86,741 Service and fee income 32,537 74,384 289 21,595 128,805 Investment income and realized gain 26,854 19,170 11,300 66 57,390 Other expenses (35,647 ) (17,702 ) (11,284 ) (64,634 ) (129,267 ) Interest expense (8,755 ) (4,348 ) (2,771 ) — (15,874 ) Foreign currency loss — (38,233 ) — — (38,233 ) Gain on life settlement contracts 5,918 2,939 1,873 — 10,730 Acquisition gain on purchase 9,678 — — — 9,678 (Provision) benefit for income taxes (11,215 ) (12,165 ) (1,673 ) 6,093 (18,960 ) Equity in earnings of unconsolidated subsidiary – related party — — — 5,776 5,776 Net income (loss) $ 57,248 $ 62,099 $ 8,543 $ (31,104 ) $ 96,786 The following tables summarize net earned premium by major line of business, by segment, for the three months ended March 31, 2017 and 2016 : (Amounts in Thousands) Small Commercial Business Specialty Risk and Extended Warranty Specialty Program Total Three Months Ended March 31, 2017: Workers' compensation $ 336,324 $ — $ 108,996 $ 445,320 Warranty — 214,528 3 214,531 Other liability — 43,308 54,539 97,847 Commercial auto and liability, physical damage 101,146 — 25,954 127,100 Medical malpractice — 52,779 — 52,779 Other 116,155 162,875 5,925 284,955 Total net earned premium $ 553,625 $ 473,490 $ 195,417 $ 1,222,532 (Amounts in Thousands) Small Commercial Business Specialty Risk and Extended Warranty Specialty Program Total Three Months Ended March 31, 2016: Workers' compensation $ 346,043 $ — $ 107,713 $ 453,756 Warranty — 168,333 — 168,333 Other liability 5,249 40,713 70,581 116,543 Commercial auto and liability, physical damage 85,904 8,492 35,143 129,539 Medical malpractice — 44,017 — 44,017 Other 66,898 60,286 34,910 162,094 Total net earned premium $ 504,094 $ 321,841 $ 248,347 $ 1,074,282 The following table summarizes total assets of the business segments as of March 31, 2017 and December 31, 2016 : (Amounts in Thousands) March 31, 2017 December 31, 2016 Small Commercial Business $ 10,734,048 $ 9,949,105 Specialty Risk and Extended Warranty 8,931,550 8,530,559 Specialty Program 4,218,673 4,135,004 $ 23,884,271 $ 22,614,668 |
Restatement of Previously Iss27
Restatement of Previously Issued Consolidated Financial Statements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of Error Corrections and Prior Period Adjustments | The following summarizes the impact of the Restatement on our previously reported unaudited interim Consolidated Balance Sheets, Consolidated Statements of Income, Consolidated Statements of Comprehensive Income, Consolidated Statements of Stockholders' Equity and Consolidated Statements of Cash Flows for the three months ended March 31, 2016 and 2015 : Consolidated Balance Sheet March 31, 2016 ASSETS As previously reported Adjustments As restated Reference (in thousands) Investments: Fixed maturities, available-for-sale, at fair value (amortized cost $6,221,739) $ 6,307,719 $ — $ 6,307,719 Equity securities, available-for-sale, at fair value (cost $110,594) 98,518 — 98,518 Equity securities, trading, at fair value (cost $28,142) 29,891 — 29,891 Short-term investments 34,008 (25,094 ) 8,914 9 Equity investment in unconsolidated subsidiaries – related parties 146,000 — 146,000 Other investments (related party $68,860) 126,875 — 126,875 Total investments 6,743,011 (25,094 ) 6,717,917 Cash and cash equivalents 998,282 25,094 1,023,376 8, 9 Restricted cash and cash equivalents 359,876 — 359,876 Accrued interest and dividends 57,179 — 57,179 Premiums receivable, net 2,376,689 134,804 2,511,493 8, 9 Reinsurance recoverable (related party $2,282,432) 3,097,192 — 3,097,192 Prepaid reinsurance premiums (related party $1,184,742) 1,633,866 — 1,633,866 Other assets (related party $206,298; recorded at fair value $294,573) 1,247,886 74,017 1,321,903 1 – 9 Deferred policy acquisition costs 761,802 (25,495 ) 736,307 3 Property and equipment, net 292,381 (11,448 ) 280,933 5, 8 Goodwill 426,268 — 426,268 Intangible assets 361,289 — 361,289 $ 18,355,721 $ 171,878 $ 18,527,599 LIABILITIES AND STOCKHOLDERS’ EQUITY Liabilities: Loss and loss adjustment expense reserves $ 7,516,089 $ — $ 7,516,089 Unearned premiums 4,290,528 — 4,290,528 Ceded reinsurance premiums payable (related party $571,754) 851,192 — 851,192 Accrued expenses and other liabilities (related party $167,975; recorded at fair value $101,655) 1,379,985 370,853 1,750,838 1, 2, 6, 8, 9 Debt (net of debt issuance cost of $16,616) 993,028 — 993,028 Total liabilities 15,030,822 370,853 15,401,675 Commitments and contingencies Redeemable non-controlling interest 1,332 — 1,332 Stockholders’ equity: Common stock, $0.01 par value; 500,000 shares authorized, 196,455 issued; 175,400 outstanding 1,965 — 1,965 Preferred stock, $0.01 par value; 10,000 shares authorized, 5,112 issued and outstanding; aggregated liquidation preference $626,250 626,250 — 626,250 Additional paid-in capital 1,381,282 — 1,381,282 Treasury stock at cost; 21,054 shares (177,071 ) — (177,071 ) Accumulated other comprehensive (loss) income, net of tax (97,348 ) (574 ) (97,922 ) 4 Retained earnings 1,408,177 (198,401 ) 1,209,776 1 – 8 Total AmTrust Financial Services, Inc. equity 3,143,255 (198,975 ) 2,944,280 Non-controlling interest 180,312 — 180,312 Total stockholders’ equity 3,323,567 (198,975 ) 3,124,592 $ 18,355,721 $ 171,878 $ 18,527,599 Consolidated Statement of Income Three Months Ended March 31, 2016 As previously reported Adjustments As restated Reference (in thousands, except per share) Revenues: Premium income: Net written premium $ 1,220,679 $ — $ 1,220,679 Change in unearned premium (146,397 ) — (146,397 ) Net earned premium 1,074,282 — 1,074,282 Service and fee income (related parties - $20,163) 144,201 (15,396 ) 128,805 1, 8 Net investment income 49,415 — 49,415 Net realized gain on investments 7,975 — 7,975 Total revenues 1,275,873 (15,396 ) 1,260,477 Expenses: Loss and loss adjustment expense 715,073 — 715,073 Acquisition costs and other underwriting expenses (net of ceding commission - related party - $138,391) 264,634 7,834 272,468 2, 3, 5, 8 Other 128,186 1,081 129,267 1, 5, 8 Total expenses 1,107,893 — 8,915 1,116,808 Income before other (expense) income, provision for income taxes, equity in earnings of unconsolidated subsidiaries and non-controlling interest 167,980 (24,311 ) 1 143,669 Other (expenses) income: Interest expense (net of interest income - related party - $2,188) (17,700 ) 1,826 (15,874 ) 6 Gain on investment in life settlement contracts net of profit commission 10,730 — 10,730 Foreign currency (loss) gain (35,673 ) (2,560 ) (38,233 ) 4, 8 Gain on acquisition 9,678 — 9,678 Total other (expenses) income (32,965 ) — (734 ) (33,699 ) Income before provision for income taxes, equity in earnings of unconsolidated subsidiaries and non-controlling interest 135,015 — (25,045 ) 109,970 Provision for income taxes 27,726 (8,766 ) 18,960 1 – 8 Income before equity in earnings of unconsolidated subsidiaries 107,289 — (16,279 ) 91,010 Equity in earnings of unconsolidated subsidiary – related parties 5,776 — 5,776 Net income $ 113,065 — $ (16,279 ) $ 96,786 Net income attributable to non-controlling interests and redeemable non-controlling interests of subsidiaries (4,017 ) — (4,017 ) Net income attributable to AmTrust Financial Services, Inc. $ 109,048 — $ (16,279 ) $ 92,769 Dividends on preferred stock (8,791 ) — (8,791 ) Net income attributable to AmTrust common stockholders $ 100,257 0.001 $ (16,279 ) 2 $ 83,978 Earnings per common share: Basic earnings per share $ 0.57 $ (0.09 ) $ 0.48 Diluted earnings per share $ 0.56 $ (0.09 ) $ 0.47 Dividends declared per common share $ 0.15 $ — $ 0.15 Weighted average common shares outstanding - basic 175,585 165,042 — 175,585 Weighted average common shares outstanding - diluted 177,927 168,360 — 177,927 Consolidated Statement of Comprehensive Income Three Months Ended March 31, 2016 As previously reported Adjustments As Restated Reference (in thousands) Net income $ 113,065 $ (16,279 ) $ 96,786 Other comprehensive (loss) income, net of tax: Foreign currency translation adjustments (47,845 ) 651 (47,194 ) 4 Change in fair value of interest rate swap 119 — 119 Unrealized gain on securities: Gross unrealized holding (loss) gain 124,720 2,932 127,652 8 Less tax expense 43,652 1,027 44,679 8 Net unrealized holding gain 81,068 1,905 82,973 3 Reclassification adjustment for investment loss included in net income, net of tax: Other-than-temporary impairment loss — — — Other net realized loss on investments (428 ) — (428 ) Reclassification adjustment for investment loss included in net income (428 ) — (428 ) Other comprehensive income, net of tax $ 32,914 $ 2,556 $ 35,470 Comprehensive income 145,979 (13,723 ) 132,256 Less: Comprehensive income attributable to non-controlling and redeemable non-controlling interest 4,017 — 4,017 Comprehensive income attributable to AmTrust Financial Services, Inc. $ 141,962 $ (13,723 ) $ 128,239 Consolidated Statement of Stockholders' Equity As of March 31, 2016 As previously reported Adjustment As Restated Reference (in thousands) Common stock $ 1,965 $ — $ 1,965 Preferred stock 626,250 — 626,250 Additional paid-in capital 1,381,282 — 1,381,282 Treasury stock (177,071 ) — (177,071 ) Accumulated other comprehensive income (loss) (97,348 ) (574 ) (97,922 ) 4, 8 Retained earnings 1,408,177 (198,401 ) 1,209,776 1 – 8 $ 3,143,255 $ (198,975 ) $ 2,944,280 Consolidated Statements of Cash Flows Three Months Ended March 31, 2016 As previously reported Adjustments As restated Reference (in thousands) Cash flows from operating activities: Net income $ 113,065 $ (16,279 ) $ 96,786 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 25,347 2,512 27,859 5 Net amortization of bond premium or discount 4,842 — 4,842 Equity earnings on investment in unconsolidated subsidiaries (5,776 ) (369 ) (6,145 ) 8 Gain on investment in life settlement contracts, net (10,730 ) — (10,730 ) Net realized gain on investments (7,975 ) — (7,975 ) Discount on notes payable 1,455 — 1,455 Stock based compensation 5,641 — 5,641 Bad debt expense 305 — 305 Foreign currency loss 35,673 2,560 38,233 4, 8 Gain on acquisition (9,678 ) — (9,678 ) Dividend received from equity investment — 369 369 8 Changes in assets – (increase) decrease: Premiums receivable (256,816 ) (14,504 ) (271,320 ) 8, 9 Reinsurance recoverable (72,607 ) (1,293 ) (73,900 ) 8 Deferred policy acquisition costs (57,559 ) 14,892 (42,667 ) 3 Prepaid reinsurance premiums (102,000 ) — (102,000 ) Other assets 124,952 1,256 126,208 1 – 9 Changes in liabilities – increase (decrease): Ceded reinsurance premium payable 203,594 — 203,594 Loss and loss expense adjustment reserves 271,070 — 271,070 Unearned premiums 263,749 341 264,090 8 Funds held under reinsurance treaties (30,984 ) — (30,984 ) Accrued expenses and other liabilities 192,883 24,195 217,078 1, 2, 6, 8, 9 Net cash provided by operating activities 688,451 13,680 702,131 Cash flows from investing activities: Purchases of fixed maturities, available-for-sale (870,349 ) — (870,349 ) Purchases of equity securities, available-for-sale (613 ) — (613 ) Purchases of equity securities, trading (54,382 ) — (54,382 ) Purchases of other investments (12,605 ) 7,164 (5,441 ) 8 Sales, maturities, paydowns of fixed maturities, available-for-sale 198,173 — 198,173 Sales of equity securities, available-for-sale 4,563 — 4,563 Sales of equity securities, trading 52,744 — 52,744 Sales of other investments 190 — 190 Net (purchases) of short term investments (17,926 ) (42,001 ) (59,927 ) 9 Net (purchases) of securities sold but not purchased (9,763 ) — (9,763 ) Receipt of life settlement contract proceeds 8,058 — 8,058 Acquisition of subsidiaries, net of cash obtained 3,814 — 3,814 Decrease in restricted cash and cash equivalents, net 20,823 — 20,823 Purchase of property and equipment (25,630 ) (15,392 ) (41,022 ) 5 Net cash used in investing activities (702,903 ) (50,229 ) (753,132 ) Consolidated Statements of Cash Flows Three Months Ended March 31, 2016 As previously reported Adjustments As restated Reference Cash flows from financing activities: Secured loan agreement payments (1,778 ) — (1,778 ) Common stock issuance 276 — 276 Common stock repurchase (14,668 ) — (14,668 ) Preferred stock issuance 139,070 — 139,070 Contingent consideration payments — (10,303 ) (10,303 ) 6 Stock option exercise and other (2,982 ) — (2,982 ) Dividends distributed on common stock (26,311 ) — (26,311 ) Dividends distributed on preferred stock (8,791 ) — (8,791 ) Net cash provided by financing activities 84,816 (10,303 ) 74,513 Effect of exchange rate changes on cash (4,052 ) — (4,052 ) Net increase in cash and cash equivalents 66,312 (46,852 ) 19,460 Cash and cash equivalents, beginning of year 931,970 71,946 1,003,916 1, 2, 4-9 Cash and cash equivalents, end of period $ 998,282 $ 25,094 $ 1,023,376 Supplemental Cash Flow Information Interest payments on debt $ 16,295 — $ 16,295 Income tax payments 5,467 — 5,467 Declared dividends on common stock 26,313 — 26,313 Consolidated Balance Sheet March 31, 2015 ASSETS As previously reported Adjustments As restated Reference (in thousands) Investments: Fixed maturities, available-for-sale, at fair value (amortized cost $4,292,658) $ 4,419,313 $ — $ 4,419,313 Equity securities, available-for-sale, at fair value (cost $96,261) 94,668 — 94,668 Equity securities, trading, at fair value (cost $29,353) 30,560 — 30,560 Short-term investments 42,668 (32,001 ) 10,667 9 Equity investment in unconsolidated subsidiaries – related parties 125,104 — 125,104 Other investments (related party $9,700) 45,627 — 45,627 Total investments 4,757,940 (32,001 ) 4,725,939 Cash and cash equivalents 997,007 32,001 1,029,008 8, 9 Restricted cash and cash equivalents 217,628 — 217,628 Accrued interest and dividends 42,952 — 42,952 Premiums receivable, net 2,134,647 83,918 2,218,565 8, 9 Reinsurance recoverable (related party $1,627,100) 2,544,549 — 2,544,549 Prepaid reinsurance premium (related party $1,047,486) 1,473,353 — 1,473,353 Other assets (related party $156,996; recorded at fair value $259,785) 1,050,804 421 1,051,225 1, 5, 8, 9 Deferred policy acquisition costs 651,884 (2,651 ) 649,233 3 Property and equipment, net 167,459 (8,876 ) 158,583 5, 8 Goodwill 458,042 — 458,042 Intangible assets 303,116 — 303,116 $ 14,799,381 $ 72,812 $ 14,872,193 LIABILITIES AND STOCKHOLDERS’ EQUITY Liabilities: Loss and loss adjustment expense reserves $ 5,886,149 $ — 5,886,149 Unearned premiums 3,704,419 — 3,704,419 Ceded reinsurance premiums payable (related party $533,234) 772,651 — 772,651 Accrued expenses and other liabilities (related party $167,975; recorded at fair value $33,189) 1,229,501 210,049 1,439,550 1, 2, 6, 8, 9 Debt (net of debt issuance cost of $12,295) 580,673 — 580,673 Total liabilities 12,173,393 210,049 12,383,442 Commitments and contingencies Redeemable non-controlling interest 922 — 922 Stockholders’ equity: Common stock, $0.01 par value; 300,000 shares authorized, 196,436 issued; 164,694 outstanding 1,964 — 1,964 Preferred stock, $0.01 par value; 10,000 shares authorized, 4,968 issued and outstanding 482,500 — 482,500 Additional paid-in capital 1,116,900 — 1,116,900 Treasury stock at cost; 31,562 shares (225,121 ) — (225,121 ) Accumulated other comprehensive income (loss) (2,348 ) 13,202 10,854 4, 8 Retained earnings 1,088,840 (150,439 ) 938,401 1, 2, 4, 5, 8 Total AmTrust Financial Services, Inc. equity 2,462,735 (137,237 ) 2,325,498 Non-controlling interest 162,331 — 162,331 Total stockholders’ equity 2,625,066 (137,237 ) 2,487,829 $ 14,799,381 $ 72,812 $ 14,872,193 Consolidated Statement of Income Three Months Ended March 31, 2015 As previously reported Adjustments As restated Reference (in thousands, except share data) Revenues: Premium income: Net written premium $ 1,043,189 $ — $ 1,043,189 Change in unearned premium (93,812 ) — (93,812 ) Net earned premium 949,377 — 949,377 Service and fee income (related parties - $17,404) 112,886 (10,767 ) 102,119 1 Net investment income 34,573 — 34,573 Net realized gain on investments 15,653 — 15,653 Total revenues 1,112,489 (10,767 ) 1,101,722 3,000 Expenses: 3,000 Loss and loss adjustment expense 613,283 — 613,283 Acquisition costs and other underwriting expenses (net of ceding commission - related party - $118,687) 231,676 1,105 232,781 2, 3, 5, 8 Other 98,457 2,503 100,960 1, 5, 7, 8 Total expenses 943,416 3,608 947,024 8,000 Income before other (expense) income, provision for income taxes, equity in earnings of unconsolidated subsidiaries and non-controlling interest 169,073 (14,375 ) 154,698 8,000 Other (expenses) income: 3,000 Interest expense (net of interest income - related party - $2,188) (10,255 ) (1,826 ) (12,081 ) 6 Loss on extinguishment of debt (4,714 ) — (4,714 ) Gain on investment in life settlement contracts net of profit commission 11,373 — 11,373 Foreign currency gain 39,954 (15,297 ) 24,657 4, 8 Total other (expenses) income 36,358 (17,123 ) 19,235 8,000 Income before provision for income taxes, equity in earnings of unconsolidated subsidiaries and non-controlling interest 205,431 (31,498 ) 173,933 8,000 Provision for income taxes 46,812 (10,319 ) 36,493 3,000 1, 2, 3, 4, 5, 6, 8 Income before equity in earnings of unconsolidated subsidiaries 158,619 (21,179 ) $ 137,440 Equity in earnings of unconsolidated subsidiary – related parties 5,529 — 5,529 Net income 164,148 (21,179 ) 142,969 8,000 Net (income) loss attributable to non-controlling interests and redeemable non-controlling interests of subsidiaries (4,083 ) — (4,083 ) Net income attributable to AmTrust Financial Services, Inc. $ 160,065 $ (21,179 ) $ 138,886 8,000 Dividends on preferred stock (5,369 ) — (5,369 ) Net income attributable to AmTrust common stockholders $ 154,696 $ (21,179 ) $ 133,517 Earnings per common share: Basic earnings per share $ 0.95 $ (0.13 ) $ 0.82 Diluted earnings per share $ 0.93 $ (0.13 ) $ 0.80 Dividends declared per common share $ 0.10 — $ 0.10 Weighted average common shares outstanding - basic 162,336 — 162,336 Weighted average common shares outstanding - diluted 166,874 — 166,874 Consolidated Statement of Comprehensive Income Three Months Ended March 31, 2015 As previously reported Adjustments As Restated Reference (in thousands) Net income $ 164,148 $ (21,179 ) $ 142,969 Other comprehensive (loss) income, net of tax: Foreign currency translation adjustments (65,353 ) 7,829 (57,524 ) 4 Change in fair value of interest rate swap 27 — 27 Unrealized gain on securities: Gross unrealized holding (loss) gain 11,185 1,418 12,603 8 Less tax expense 3,915 496 4,411 8 Net unrealized holding gain 7,270 922 7,000 8,192 Reclassification adjustment for investment gain (loss) included in net income, net of tax: Other-than-temporary impairment loss — — — Other net realized loss on investments (415 ) — (415 ) Reclassification adjustment for investment loss included in net income (415 ) — 7,000 (415 ) Other comprehensive (loss), net of tax $ (58,471 ) $ 8,751 $ (49,720 ) Comprehensive income 105,677 (12,428 ) 93,249 Less: Comprehensive income attributable to non-controlling and redeemable non-controlling interest 4,083 — 4,083 Comprehensive income attributable to AmTrust Financial Services, Inc. $ 101,594 $ (12,428 ) $ 89,166 Consolidated Statement of Stockholders' Equity As of March 31, 2015 As previously reported Adjustment As Restated Reference (in thousands) Common stock $ 1,964 $ — $ 1,964 Preferred stock 482,500 — 482,500 Additional paid-in capital 1,116,900 — 1,116,900 Treasury Stock (225,121 ) — (225,121 ) Accumulated other comprehensive income (loss) (2,348 ) 13,202 10,854 4, 8 Retained earnings 1,088,840 (150,439 ) 938,401 1, 2, 4, 5, 8 $ 2,462,735 $ (137,237 ) $ 2,325,498 Consolidated Statement of Cash Flows Three Months Ended March 31, 2015 As previously reported Adjustments As restated Reference (in thousands) Cash flows from operating activities: Net income $ 164,148 $ (21,179 ) $ 142,969 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 19,426 896 20,322 5 Net amortization of bond premium or discount 5,890 — 5,890 Equity earnings on investment in unconsolidated subsidiaries (5,529 ) — (5,529 ) Gain on investment in life settlement contracts, net (11,373 ) — (11,373 ) Net realized gain on investments (16,669 ) — (16,669 ) Non-cash write-down of investments 1,016 — 1,016 Discount on notes payable 1,389 — 1,389 Stock based compensation 4,914 — 4,914 Loss on extinguishment of debt 4,714 — 4,714 Bad debt expense 6,281 — 6,281 Foreign currency (gain) (39,954 ) 15,297 (24,657 ) 4 Changes in assets – (increase) decrease: Premiums receivable (289,546 ) (43,594 ) (333,140 ) 8, 9 Reinsurance recoverable (102,608 ) 95 (102,513 ) 8 Deferred policy acquisition costs (23,501 ) 3,529 (19,972 ) 3 Prepaid reinsurance premiums (170,505 ) — (170,505 ) Other assets (40,228 ) 81,420 41,192 1, 8, 9 Changes in liabilities – increase (decrease): Ceded reinsurance premium payable 89,550 — 89,550 Loss and loss adjustment expense reserves 174,000 — 174,000 Unearned premiums 232,986 (2,332 ) 230,654 8 Funds held under reinsurance treaties 18,984 — 18,984 Accrued expenses and other current liabilities 170,409 (12,106 ) 158,303 1, 2, 6, 8, 9 Net cash provided by operating activities 193,794 22,026 215,820 Cash flows from investing activities: Purchases of fixed maturities, available-for-sale (434,806 ) — (434,806 ) Purchases of equity securities, available-for-sale (15,351 ) — (15,351 ) Purchases of equity securities, trading (62,083 ) — (62,083 ) Purchases of other investments (27,233 ) 8,366 (18,867 ) 8 Sales, maturities, paydowns of fixed maturities, available-for-sale 292,961 (3,275 ) 289,686 9 Sales of equity securities, available-for-sale 9,285 — 9,285 Sales of equity securities, trading 60,268 — 60,268 Sales of other investments 13,337 — 13,337 Net sales of short term investments 41,540 32,001 73,541 9 Net sale of securities sold but not purchased 3,570 — 3,570 Receipt of life settlement contract proceeds 53,080 — 53,080 Acquisition of subsidiaries, net of cash obtained (118,464 ) — (118,464 ) Increase in restricted cash and cash equivalents, net (31,403 ) — (31,403 ) Purchase of property and equipment (21,906 ) (1,088 ) (22,994 ) 5 Net cash used in investing activities (237,205 ) 36,004 (201,201 ) Cash flows from financing activities: Revolving credit facility borrowings 200,000 — 200,000 Revolving credit facility payments (320,000 ) — (320,000 ) Secured loan agreement payments (1,733 ) — (1,733 ) Convertible senior notes payments (53,606 ) — (53,606 ) Common stock issuance 171,672 — 171,672 Preferred stock issuance 176,529 — 176,529 Consolidated Statement of Cash Flows Three Months Ended March 31, 2015 As previously reported Adjustments As restated Reference Contingent consideration payments — (4,178 ) (4,178 ) 6 Non-controlling interest capital contributions to consolidated subsidiaries, net 565 — 565 Stock option exercise and other 310 — 310 Dividends distributed on common stock (19,374 ) — (19,374 ) Dividends distributed on preferred stock (5,369 ) — (5,369 ) Net cash provided by financing activities 148,994 1 (4,178 ) 2,000 144,816 Effect of exchange rate changes on cash (11,326 ) — (11,326 ) Net increase in cash and cash equivalents 94,257 1 53,852 148,109 Cash and cash equivalents, beginning year 902,750 (21,851 ) 880,899 1,2, 4-9 Cash and cash equivalents, end of period $ 997,007 1 $ 32,001 $ 1,029,008 Supplemental Cash Flow Information Interest payments on debt $ 11,442 $ — $ 11,442 Income tax payments 96,916 — 96,916 Declared dividends on common stock 20,590 — 20,590 |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Amortized Cost, Estimated Market Value and Gross Unrealized Appreciation and Depreciation of Available-for-sale Securities | The cost or amortized cost, gross unrealized gains and losses, and estimated fair value of fixed maturities and equity securities classified as available-for-sale as of March 31, 2017 and December 31, 2016 , are presented below: (Amounts in Thousands) Original or amortized cost Gross unrealized gains Gross unrealized losses Fair Value Preferred stock $ 753 $ 12 $ — $ 765 Common stock 116,114 13,499 (2,214 ) 127,399 U.S. treasury securities 332,089 1,181 (1,524 ) 331,746 U.S. government agencies 38,704 26 (12 ) 38,718 Municipal bonds 906,527 10,727 (11,004 ) 906,250 Foreign government 163,902 3,500 (827 ) 166,575 Corporate bonds: Finance 1,594,509 39,132 (6,071 ) 1,627,570 Industrial 2,426,628 60,914 (11,948 ) 2,475,594 Utilities 310,717 7,024 (1,366 ) 316,375 Commercial mortgage-backed securities 475,061 3,493 (6,632 ) 471,922 Residential mortgage-backed securities: Agency backed 922,458 13,295 (8,309 ) 927,444 Non-agency backed 5,133 10 (40 ) 5,103 Collateralized loan / debt obligation 617,608 11,646 (466 ) 628,788 Asset backed securities 41,212 142 (201 ) 41,153 $ 7,951,415 $ 164,601 $ (50,614 ) $ 8,065,402 (Amounts in Thousands) Original or amortized cost Gross unrealized gains Gross unrealized losses Fair value Preferred stock $ 4,044 $ — $ (59 ) $ 3,985 Common stock 122,626 12,899 (2,348 ) 133,177 U.S. treasury securities 331,036 1,235 (1,617 ) 330,654 U.S. government agencies 63,467 282 (17 ) 63,732 Municipal bonds 860,444 9,603 (15,877 ) 854,170 Foreign government 149,365 4,237 (726 ) 152,876 Corporate bonds: Finance 1,535,606 38,404 (7,722 ) 1,566,288 Industrial 2,222,843 62,133 (17,115 ) 2,267,861 Utilities 195,607 4,433 (1,210 ) 198,830 Commercial mortgage backed securities 178,092 2,464 (2,562 ) 177,994 Residential mortgage backed securities: Agency backed 1,210,229 13,685 (13,529 ) 1,210,385 Non-agency backed 61,646 586 (1,003 ) 61,229 Collateralized loan / debt obligations 476,767 8,389 (751 ) 484,405 Asset backed securities 29,939 31 (260 ) 29,710 $ 7,441,711 $ 158,381 $ (64,796 ) $ 7,535,296 |
Amortized Cost, Estimated Market Value and Gross Unrealized Appreciation and Depreciation of Trading Securities | The portion of trading gains and losses for the period related to trading securities still held during the three months ended March 31, 2017 and 2016 : Three Months Ended March 31, (Amounts in Thousands) 2017 2016 Net gains and losses recognized during the period on trading securities (3,261 ) $ 2,756 Less: Net gains and losses recognized during the period on trading securities sold during the period 2,715 6,373 Unrealized gains and losses recognized during the reporting period on trading securities still held at the reporting date $ (5,976 ) (3,617 ) The original or amortized cost, estimated fair value and gross unrealized gains and losses of trading securities as of March 31, 2017 and December 31, 2016 are presented in the tables below: (Amounts in Thousands) Original or amortized cost Gross unrealized gains Gross unrealized losses Fair value Common stock $ 98,277 $ 7,417 $ (5,436 ) $ 100,258 U.S. Treasury securities 27,314 89 (21 ) 27,382 Corporate bonds: Industrial 10,186 607 (1,396 ) 9,397 Utilities 19,560 67 (2,253 ) 17,374 (Amounts in Thousands) Original or amortized cost Gross unrealized gains Gross unrealized losses Fair value Common stock $ 76,163 $ 9,842 $ (4,045 ) $ 81,960 Corporate bonds: Industrial 24,151 4,379 — 28,530 Utilities 4,930 322 — 5,252 |
Summary of Available for Sale Fixed Securities by Contractual Maturity | A summary of the Company’s available-for-sale fixed maturities as of March 31, 2017 and December 31, 2016 , 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. March 31, 2017 December 31, 2016 (Amounts in Thousands) Amortized Cost Fair Value Amortized Cost Fair Value Due in one year or less $ 289,263 $ 289,850 $ 319,275 $ 319,882 Due after one through five years 1,782,757 1,829,025 2,956,429 2,998,711 Due after five through ten years 3,204,377 3,248,128 1,645,211 1,683,112 Due after ten years 496,679 495,824 437,452 432,702 Mortgage and asset backed securities 2,061,472 2,074,411 1,956,674 1,963,727 Total fixed maturities $ 7,834,548 $ 7,937,238 $ 7,315,041 $ 7,398,134 |
Net Investment Income | Net investment income for the three months ended March 31, 2017 and 2016 was derived from the following sources: Three Months Ended March 31, (Amounts in Thousands) 2017 2016 Fixed maturities, available-for-sale $ 57,644 $ 46,193 Equity securities, available-for-sale 1,337 2,364 Equity securities, trading 989 (153 ) Cash and short term investments 5,382 1,086 65,352 49,490 Less: Investment expenses 2,027 75 $ 63,325 $ 49,415 |
Summary of Gross Unrealized Losses of Fixed-maturities and Equity Securities | The tables below summarize the gross unrealized losses of our fixed maturity and equity securities by length of time the security has continuously been in an unrealized loss position as of March 31, 2017 and December 31, 2016 : Less Than 12 Months 12 Months or More Total (Amounts in Thousands) Fair Value Unrealized Losses No. of Positions Held Fair Value Unrealized Losses No. of Positions Held Fair Value Unrealized Losses Common and preferred stock $ 40,202 $ (2,214 ) 86 $ — $ — — $ 40,202 $ (2,214 ) U.S. treasury securities 287,025 (1,521 ) 137 723 (3 ) 3 287,748 (1,524 ) U.S. government agencies 7,736 (12 ) 14 — — — 7,736 (12 ) Municipal bonds 485,032 (10,657 ) 114 8,635 (347 ) 11 493,667 (11,004 ) Foreign government 70,292 (746 ) 454 1,919 (81 ) 1 72,211 (827 ) Corporate bonds: Finance 460,143 (5,731 ) 231 13,769 (340 ) 4 473,912 (6,071 ) Industrial 633,781 (11,522 ) 415 17,279 (426 ) 11 651,060 (11,948 ) Utilities 99,201 (1,364 ) 83 511 (2 ) 1 99,712 (1,366 ) Commercial mortgage backed securities 280,918 (6,488 ) 74 5,612 (144 ) 30 286,530 (6,632 ) Residential mortgage backed securities: Agency backed 393,883 (8,250 ) 210 2,281 (59 ) 22 396,164 (8,309 ) Non-agency backed 2,638 (39 ) 15 60 (1 ) 2 2,698 (40 ) Collateralized loan / debt obligations 87,951 (436 ) 37 11,802 (30 ) 6 99,753 (466 ) Asset-backed securities 12,474 (39 ) 24 4,434 (162 ) 7 16,908 (201 ) Total temporarily impaired securities $ 2,861,276 $ (49,019 ) 1,894 $ 67,025 $ (1,595 ) 98 $ 2,928,301 $ (50,614 ) Less Than 12 Months 12 Months or More Total (Amounts in Thousands) Fair Value Unrealized Losses No. of Positions Held Fair Value Unrealized Losses No. of Positions Held Fair Value Unrealized Losses Common and preferred stock $ 46,783 $ (1,424 ) 32 $ 9,991 $ (983 ) 53 $ 56,774 $ (2,407 ) U.S. treasury securities 293,155 (1,613 ) 115 22,989 (4 ) 6 316,144 (1,617 ) U.S. government agencies 7,866 (17 ) 20 — — — 7,866 (17 ) Municipal bonds 519,578 (15,207 ) 439 15,742 (670 ) 26 535,320 (15,877 ) Foreign government 128,863 (688 ) 52 12,659 (38 ) 7 141,522 (726 ) Corporate bonds: Finance 1,071,982 (7,210 ) 342 16,840 (512 ) 13 1,088,822 (7,722 ) Industrial 1,200,129 (13,648 ) 479 114,035 (3,467 ) 59 1,314,164 (17,115 ) Utilities 119,488 (423 ) 33 10,391 (787 ) 6 129,879 (1,210 ) Commercial mortgage backed securities 71,780 (1,654 ) 56 10,910 (908 ) 32 82,690 (2,562 ) Residential mortgage backed securities: Agency backed 718,098 (13,469 ) 216 8,144 (60 ) 26 726,242 (13,529 ) Non-agency backed 24,372 (869 ) 21 4,462 (134 ) 6 28,834 (1,003 ) Collateralized loan / debt obligations 97,923 (433 ) 37 32,937 (318 ) 13 130,860 (751 ) Asset-backed securities 9,220 (124 ) 24 4,926 (136 ) 12 14,146 (260 ) Total temporarily impaired securities $ 4,309,237 $ (56,779 ) 1,866 $ 264,026 $ (8,017 ) 259 $ 4,573,263 $ (64,796 ) |
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, 2017 : Remaining Life of Notional Amount (1) One Year Two Through Five Years Six Through Ten Years After Ten Years Total Interest rate swaps — 7,334 — — $ 7,334 (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 the Company's restricted assets as of March 31, 2017 and December 31, 2016 are as follows: (Amounts in Thousands) March 31, 2017 December 31, 2016 Restricted cash and cash equivalents $ 615,671 $ 713,338 Restricted investments - fixed maturities at fair value 2,288,016 2,126,216 Total restricted cash, cash equivalents, and investments $ 2,903,687 $ 2,839,554 |
Realized Gain (Loss) on Investments | The tables below summarize the gross realized gains and (losses) for the three months ended March 31, 2017 and 2016 : (Amounts in Thousands) Gross Gains Gross Losses Net Gains (Losses) Fixed maturities, available-for-sale $ 8,311 $ (1,263 ) $ 7,048 Equity securities, available-for-sale 5,223 (641 ) 4,582 Fixed maturity securities, trading 2,374 (5,434 ) (3,060 ) Equity securities, trading 6,085 (6,286 ) (201 ) Other investments 271 (25 ) 246 $ 22,264 $ (13,649 ) $ 8,615 (Amounts in Thousands) Gross Gains Gross Losses Net Gains (Losses) Fixed maturities, available-for-sale $ 4,799 $ (46 ) $ 4,753 Equity securities, available-for-sale 660 (141 ) 519 Equity securities, trading 9,612 (6,856 ) 2,756 Other investments 4 (57 ) (53 ) $ 15,075 $ (7,100 ) $ 7,975 |
Fair Value of Financial Instr29
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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, 2017 and December 31, 2016 : (Amounts in Thousands) Total Level 1 Level 2 Level 3 Assets: U.S. treasury securities $ 359,128 $ 359,128 $ — $ — U.S. government agencies 38,718 — 38,718 — Municipal bonds 906,250 — 906,250 — Foreign government 166,575 31 164,337 2,207 Corporate bonds and other bonds: Finance 1,627,570 — 1,622,382 5,188 Industrial 2,484,991 140 2,483,530 1,321 Utilities 333,749 — 333,749 — Commercial mortgage backed securities 471,922 — 448,278 23,644 Residential mortgage backed securities: Agency backed 927,444 — 927,444 — Non-agency backed 5,103 — 5,103 — Collateralized loan / debt obligations 628,788 — 628,788 — Asset-backed securities 41,153 — 38,340 2,813 Equity securities, available-for-sale 128,164 100,023 10,758 17,383 Equity securities, trading 100,258 96,141 — 4,117 Life settlement contracts 397,493 — — 397,493 $ 8,617,306 $ 555,463 $ 7,607,677 $ 454,166 Liabilities: Equity securities sold but not yet purchased $ 61,667 $ 61,667 $ — $ — Fixed maturity securities sold but not yet purchased 293,583 — 293,583 — Life settlement contract profit commission 5,599 — — 5,599 Contingent consideration 72,330 — — 72,330 Derivatives 101 — 101 — $ 433,280 $ 61,667 $ 293,684 $ 77,929 (Amounts in Thousands) Total Level 1 Level 2 Level 3 Assets: U.S. treasury securities $ 330,654 $ 330,654 $ — $ — U.S. government agencies 63,732 — 63,732 — Municipal bonds 854,170 — 854,170 — Foreign government 152,876 — 149,298 3,578 Corporate bonds and other bonds: Finance 1,566,288 — 1,559,800 6,487 Industrial 2,296,391 — 2,291,351 5,040 Utilities 204,082 — 199,503 4,580 Commercial mortgage backed securities 177,994 — 177,994 — Residential mortgage backed securities: Agency backed 1,210,385 — 1,186,315 24,070 Non-agency backed 61,229 — 58,109 3,120 Collateralized loan / debt obligations 484,405 — 484,405 — Asset-backed securities 29,710 — 29,710 — Equity securities, available-for-sale 137,162 66,228 49,618 21,316 Equity securities, trading 81,960 78,827 — 3,133 Life settlement contracts 356,856 — — 356,856 $ 8,007,894 $ 475,709 $ 7,104,005 $ 428,180 Liabilities: Equity securities sold but not yet purchased $ 36,394 $ 36,394 $ — $ — Fixed maturity securities sold but not yet purchased 160,270 — 160,270 — Life settlement contract profit commission 4,940 — — 4,940 Contingent consideration (as restated) 71,657 — — 71,657 Derivatives 243 — 243 — $ 273,504 $ 36,394 $ 160,513 $ 76,597 |
Changes in Fair Value of Level 3 Financial Assets And Liabilities | The following table 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, 2017 and 2016 . The transfers into and out of Level 3 were due to changes in the availability of market observable inputs. All transfers are reflected in the table at fair value as of the end of the reporting period. (Amounts in Thousands) Balance as of December 31, 2016 Net income Other comprehensive income Purchases and issuances Sales and settlements Net transfers into (out of) Level 3 Balance as of March 31, Equity securities, trading $ 3,133 $ (348 ) $ — $ 4,487 $ (2,134 ) $ (1,021 ) $ 4,117 Equity securities, available-for-sale 21,316 — 245 — — (4,178 ) 17,383 Fixed maturities, available-for-sale 46,875 — (714 ) 2,339 (463 ) (12,864 ) 35,173 Life settlement contracts 356,856 35,495 — 15,223 (10,081 ) — 397,493 Life settlement contract profit commission (4,940 ) (659 ) — — — — (5,599 ) Contingent consideration (71,657 ) (673 ) — — — — (72,330 ) Total $ 351,583 $ 33,815 $ (469 ) $ 22,049 $ (12,678 ) $ (18,063 ) $ 376,237 (Amounts in Thousands) Balance as of December 31, 2015 Net income Other comprehensive income Purchases and issuances Sales and settlements Net transfers into (out of) Level 3 Balance as of March 31, 2016 Equity securities, available-for-sale 37,211 — (11,673 ) 18 — — 25,556 Life settlement contracts 264,001 30,629 — — (57 ) — 294,573 Life settlement contract profit commission (15,406 ) (7,168 ) — — 15,406 — (7,168 ) Contingent consideration (as restated) (84,760 ) (1,826 ) — 2,416 10,303 — (73,867 ) Total (as restated) $ 201,046 $ 21,635 $ (11,673 ) $ 2,434 $ 25,652 $ — $ 239,094 |
Fair Value Measurements, Recurring and Nonrecurring | The fair value of the Company's material debt arrangements as of March 31, 2017 was as follows: Carrying Value Fair Value 7.25% Subordinated Notes due 2055 $ 145,234 $ 150,360 7.50% Subordinated Notes due 2055 130,711 134,784 2.75% Convertible senior notes due 2044 168,001 179,183 6.125% Notes due 2023 248,253 254,220 Junior subordinated debentures due 2035-2037 122,050 100,220 Trust preferred securities due 2033-2037 92,786 92,735 Republic promissory note 78,514 79,520 Revolving credit facility 130,000 130,000 Other 191,152 191,152 |
Schedule of Reconciliation of Net Income | A reconciliation of net income for life settlement contracts in the above table to gain on investment in life settlement contracts net of profit commission included in the Consolidated Statements of Income for the three months ended March 31, 2017 and 2016 is as follows: Three Months Ended March 31, (Amounts in Thousands) 2017 2016 Net income $ 35,495 $ 30,629 Premiums paid (25,274 ) (12,102 ) Profit commission (659 ) (7,168 ) Other expenses (952 ) (629 ) Gain on investment in life settlement contracts $ 8,610 $ 10,730 |
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, 2017 and December 31, 2016 , and only includes data for policies to which the Company assigned value at those dates: March 31, December 31, Average age of insured 82.8 years 82.8 years Average life expectancy, months (1) 104 107 Average face amount per policy (Amounts in thousands) $ 6,680 $ 6,572 Effective discount rate (2) 12.9 % 12.4 % (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 EDR is inclusive 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). |
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, 2017 and December 31, 2016 : Change in life expectancy (Amounts in Thousands) Plus 4 Months Minus 4 Months Investment in life policies: March 31, 2017 $ (46,739 ) $ 45,180 December 31, 2016 $ (44,207 ) $ 43,492 Change in discount rate (1) (Amounts in Thousands) Plus 1% Minus 1% Investment in life policies: March 31, 2017 $ (32,447 ) $ 35,956 December 31, 2016 $ (29,881 ) $ 33,155 (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 (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Investments, All Other Investments [Abstract] | |
Investment in Life Settlements | The following tables describe the Company’s investment in life settlements as of March 31, 2017 and December 31, 2016 : (Amounts in Thousands, except number of Life Settlement Contracts) Expected Maturity Term in Years Number of Life Settlement Contracts Fair Value (1) Face Value As of March 31, 2017 0-1 — $ — $ — 1-2 2 9,019 12,500 2-3 7 43,007 77,922 3-4 13 39,085 89,500 4-5 14 39,182 92,900 Thereafter 223 267,200 1,433,413 Total 259 $ 397,493 $ 1,706,235 (Amounts in Thousands, except number of Life Settlement Contracts) Expected Maturity Term in Years Number of Life Settlement Contracts Fair Value (1) Face Value As of December 31, 2016 0-1 — $ — $ — 1-2 2 8,873 12,500 2-3 7 39,495 63,000 3-4 10 37,436 75,422 4-5 10 34,003 82,900 Thereafter 225 237,049 1,405,414 Total 254 $ 356,856 $ 1,639,236 (1) The Company determined the fair value as of March 31, 2017 based on 246 policies out of 259 policies, as the Company assigned no value to 13 of the policies as of March 31, 2017 . The Company determined the fair value as of December 31, 2016 based on 236 policies out of 254 policies, as the Company assigned no value to 18 of the policies as of December 31, 2016 . 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, 2017 and December 31, 2016 : (Amounts in Thousands, except number of Life Settlement Contracts) March 31, 2017 December 31, 2016 Number of policies with a negative value from discounted cash flow model as of period end 13 18 Premiums paid for the preceding twelve month period for period ended $ 1,682 $ 2,640 Death benefit received $ — $ — |
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, 2017 , are as follows: (Amounts in Thousands) Premiums Due on Life Settlement Contracts 2017 $ 50,872 2018 51,151 2019 51,368 2020 47,361 2021 44,726 Thereafter 513,283 Total $ 758,761 |
Deferred Policy Acquisitions 31
Deferred Policy Acquisitions Costs (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Insurance [Abstract] | |
Deferred Policy Acquisition Costs | The following table reflects the amounts of policy acquisition costs deferred and amortized for the three months ended March 31, 2017 and 2016 : Three Months Ended March 31, (Amounts in Thousands) 2017 2016 As Restated Balance, beginning of period $ 928,920 $ 693,639 Acquisition costs deferred 289,128 252,662 Amortization (192,047 ) (209,994 ) Balance, end of period $ 1,026,001 $ 736,307 |
Loss and loss adjustment expe32
Loss and loss adjustment expense reserves (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Insurance [Abstract] | |
Schedule of Liability for Unpaid Claims and Claims Adjustment Expense | The following table provides a reconciliation of the beginning and ending balances for loss and loss adjustment expense reserves ("Loss and LAE"), reported in the accompanying consolidated balance sheets as of March 31, 2017 and 2016: (Amounts in Thousands) 2017 2016 Loss and LAE, gross of related reinsurance recoverables at beginning of year $ 10,140,716 $ 7,208,367 Less: Reinsurance recoverables at beginning of year 3,873,786 2,665,187 Net balance, beginning of year 6,266,930 4,543,180 Incurred related to: Current year 821,483 639,122 Prior year 18,851 75,951 Total incurred during the year 840,334 715,073 Paid related to: Current year (135,865 ) (93,864 ) Prior year (612,860 ) (478,987 ) Total paid during the year (748,725 ) (572,851 ) Loss portfolio transfers — 168,382 Acquired outstanding loss and loss adjustment reserves 200,802 — Effect of foreign exchange rates 27,889 (69,092 ) Net balance, end of period 6,587,230 4,784,692 Plus reinsurance recoverables at end of period 4,042,932 2,731,397 Loss and LAE, gross of related reinsurance recoverables at end of period $ 10,630,162 $ 7,516,089 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Borrowings | The Company’s outstanding debt consisted of the following at March 31, 2017 and December 31, 2016 : (Amounts in Thousands) March 31, 2017 December 31, 2016 Revolving credit facility $ 130,000 $ 130,000 5.5% Convertible senior notes due 2021 (the "2021 Notes") 5,258 5,223 2.75% Convertible senior notes due 2044 (the "2044 Notes") 168,001 166,387 6.125% Notes due 2023 (the "2023 Notes") 248,253 248,185 Junior subordinated debentures (the "2035-2037 Notes") 122,050 122,028 Trust preferred securities (the "2033-2037 TPS Notes") 92,786 92,786 7.25% Subordinated notes due 2055 (the "7.25% 2055 Notes") 145,234 145,202 7.50% Subordinated notes due 2055 (the "7.50% 2055 Notes") 130,711 130,684 Secured loan agreements 171,842 75,762 Promissory notes 92,566 118,643 $ 1,306,701 $ 1,234,900 |
Schedule of Line of Credit Facilities | Additionally, the Company utilizes various letters of credit in its operations. The following is a summary of the Company's letters of credit as of March 31, 2017 : (Amounts in Thousands) Letters of Credit Limit Letters of Credit Outstanding Letters of Credit Available Revolving credit facility $ 175,000 $ 173,252 $ 1,748 Funds at Lloyd's facility, in USD equivalent 645,656 635,394 10,262 ING Bank N.V. and Deutsche Bank Netherlands N.V. facilities, in USD equivalent 81,852 68,070 13,782 Comerica bank letters of credit 75,000 43,067 31,933 UniCredit Bank 100,000 100,000 — Other letters of credit, in aggregate 101,836 101,836 — |
Aggregate Scheduled Maturities of Borrowings | Aggregate scheduled maturities of the Company’s outstanding debt, excluding unamortized deferred origination costs, at March 31, 2017 are: (Amounts in Thousands) March 31, 2017 2017 $ 4,833 (1) 2018 32,933 (1) 2019 161,115 2020 26,932 2021 15,277 Thereafter 1,081,517 (2) Total scheduled payments 1,322,607 Unamortized deferred origination costs (15,906 ) $ 1,306,701 (1) Amount does not include scheduled maturities of notes payable on the collateral loan to Maiden of $113,542 in March 2017, $20,192 in April 2018 and $34,240 in June 2018. See Note 14. "Related Party Transactions" for additional information. (2) Amount includes debt outstanding under the 2021 Notes and 2044 Notes, which is net of unamortized original issue discount of $705 and $45,560 , respectively. |
Interest Income and Interest Expense Disclosure | Interest expense, including amortization of original issue discount and deferred origination costs, as well as applicable bank fees, related to the Company's outstanding debt and letters of credit for the three months ended March 31, 2017 and 2016 was: Three Months Ended March 31, (Amounts in Thousands) 2017 2016 Revolving credit facility $ 1,510 $ 1,156 Funds at Lloyd's facility 1,479 1,199 2021 Notes 117 115 2023 Notes 3,897 3,897 2035-2037 Notes 1,468 1,515 2033-2037 TPS Notes 1,031 — 2044 Notes 3,225 3,116 7.25% 2055 Notes 2,750 2,750 7.50% 2055 Notes 2,559 2,559 Secured loan agreements 1,334 189 Promissory notes 1,663 158 Other, including interest income 2,568 (780 ) Total $ 23,601 $ 15,874 |
Acquisition Costs and Other U34
Acquisition Costs and Other Underwriting Expenses (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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, 2017 and 2016 : Three Months Ended March 31, (Amounts in Thousands) 2017 2016 (As restated) Policy acquisition expenses $ 137,386 $ 148,665 Salaries and benefits 171,377 117,821 Other insurance general and administrative expenses 19,452 5,982 $ 328,215 $ 272,468 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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, 2017 and 2016 : Three Months Ended March 31, (Amounts in Thousands, except for earnings per share) 2017 2016 As Restated Basic earnings per share: Net income attributable to AmTrust common shareholders $ 22,632 $ 83,978 Weighted average common shares outstanding - basic 170,864 175,585 Net income per AmTrust common share - basic 0.13 $ 0.48 Diluted earnings per share: Net income attributable to AmTrust common shareholders $ 22,632 $ 83,978 Weighted average common shares outstanding – basic 170,864 175,585 Plus: Dilutive effect of stock options, convertible debt, other 1,828 2,342 Weighted average common shares outstanding – dilutive 172,692 177,927 Net income per AmTrust common shares – diluted $ 0.13 $ 0.47 |
Share Based Compensation (Table
Share Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Option Granted, Exercised and Expired | The following schedule shows all Stock Options granted, exercised, and expired under the Plan for the three months ended March 31, 2017 and 2016 : Three Months Ended March 31, Three Months Ended March 31, 2017 2016 Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Outstanding at beginning of period 2,305,351 $ 7.54 2,783,880 $ 6.99 Granted — — — — Exercised (556,252 ) 5.43 (210,018 ) 3.87 Canceled or terminated — — — — Outstanding at end of period 1,749,099 8.21 2,573,862 7.24 |
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, 2017 and 2016 is shown below: Three Months Ended March 31, Three Months Ended March 31, 2017 2016 Shares or Units Weighted Average Grant Date Fair Value Shares or Units Weighted Average Grant Date Fair Value Non-vested at beginning of period 1,965,011 $ 24.38 1,853,516 $ 20.54 Granted 20,157 23.03 250,038 25.73 Vested (298,427 ) 20.84 (447,198 ) 15.78 Forfeited (8,383 ) 25.81 (25,264 ) 24.11 Non-vested at end of period 1,678,358 24.99 1,631,092 22.58 |
Schedule of Share-based Compensation, Performance Shares | A summary of the Company's PSU activity for the three months ended March 31, 2017 and 2016 is shown below: Three Months Ended March 31, Three Months Ended March 31, 2017 2016 Shares or Units Weighted Average Grant Date Fair Value Shares or Units Weighted Average Grant Date Fair Value Non-vested at beginning of period 680,597 $ 25.57 752,466 $ 24.58 Granted 11,917 23.03 — — Vested — — — — Forfeited (6,116 ) 26.63 (914 ) 22.60 Non-vested at end of period 686,398 25.51 751,552 24.58 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [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, 2017 and 2016 : Three Months Ended March 31, As Restated (Amounts in Thousands) 2017 2016 Income before equity in earnings of unconsolidated subsidiaries $ 67,607 $ 109,970 Tax at federal statutory rate of 35% $ 23,662 $ 38,490 Tax effects resulting from: Foreign rate differential (10,909 ) (17,320 ) Adjustment to prior year taxes 1,407 147 Permanent adjustments 5,676 (4,473 ) Valuation allowance 1,951 (511 ) Other, net (431 ) 2,627 $ 21,356 $ 18,960 Effective tax rate 31.6 % 17.2 % |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [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, 2017 and 2016 related to the Maiden Quota Share agreement: Three Months Ended March 31, (Amounts in Thousands) 2017 2016 Results of operations: Premium written – ceded $ (586,913 ) $ (543,688 ) Change in unearned premium – ceded 76,798 86,698 Earned premium - ceded $ (510,115 ) $ (456,990 ) Ceding commission on premium written $ 185,653 $ 174,334 Ceding commission – deferred (31,951 ) (35,943 ) Ceding commission – earned $ 153,702 $ 138,391 Incurred loss and loss adjustment expense – ceded $ 420,556 $ 354,854 |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
Schedule of Preliminary Assets Acquired and Liabilities Assumed | A summary of the preliminary assets acquired and liabilities assumed for AmeriHealth Casualty are as follows: (Amounts in Thousands) Assets Cash and investments $ 275,351 Premium receivable 46,253 Accrued interest and dividends 1,162 Reinsurance recoverable 16,455 Other assets 31,437 Goodwill and intangible assets 13,976 Total assets $ 384,634 Liabilities Loss and loss adjustment expense reserves $ 214,981 Unearned premiums 49,284 Accrued expenses and other liabilities 27,583 Total liabilities $ 291,848 Acquisition price $ 92,786 |
Shareholder Equity and Accumu40
Shareholder Equity and Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Ownership Components of Total Equity | The following table summarizes the ownership components of total stockholders' equity: Three Months Ended March 31, 2017 2016 (Amounts in Thousands) AmTrust Non-Controlling Interest Total AmTrust Non-Controlling Interest Total As restated As restated Balance, December 31, $ 3,269,103 $ 196,510 $ 3,465,613 $ 2,723,780 $ 176,455 $ 2,900,235 Net income 39,203 10,720 49,923 92,769 3,857 96,626 Unrealized holding gain 25,591 — 25,591 82,973 — 82,973 Reclassification adjustment (11,630 ) — (11,630 ) (428 ) — (428 ) Foreign currency translation 13,863 — 13,863 (47,194 ) — (47,194 ) Unrealized gain on interest rate swap 92 — 92 119 — 119 Share exercises, compensation and other 5,911 — 5,911 2,686 — 2,686 Common share purchase, net — — — (14,391 ) — (14,391 ) Common stock dividends (29,107 ) — (29,107 ) (26,313 ) — (26,313 ) Preferred stock issuance, net of fees — — — 139,070 — 139,070 Preferred stock dividends (16,571 ) — (16,571 ) (8,791 ) — (8,791 ) Capital contribution, net — 8,638 8,638 — — — Balance, March 31, $ 3,296,455 $ 215,868 $ 3,512,323 $ 2,944,280 $ 180,312 $ 3,124,592 |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table summarizes the activities and components of accumulated other comprehensive income (loss): (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, 2016 $ (188,203 ) $ 65,830 $ (172 ) $ (3,177 ) $ (125,722 ) Other comprehensive income before reclassification 13,863 32,031 92 — 45,986 Amounts reclassed from accumulated other comprehensive income — (11,630 ) — — (11,630 ) Income tax (expense) — (6,440 ) — — (6,440 ) Net current-period other comprehensive income 13,863 13,961 92 — 27,916 Balance, March 31, 2017 $ (174,340 ) $ 79,791 $ (80 ) $ (3,177 ) $ (97,806 ) Balance, December 31, 2015 (As restated) $ (98,074 ) $ (34,511 ) $ (700 ) $ (107 ) $ (133,392 ) Other comprehensive income before reclassification (As restated) (47,194 ) 127,652 183 — 80,641 Amounts reclassed from accumulated other comprehensive income — (428 ) — — (428 ) Income tax (expense) (As restated) — (44,679 ) (64 ) — (44,743 ) Net current-period other comprehensive income (As restated) (47,194 ) 82,545 119 — 35,470 Balance, March 31, 2016 $ (145,268 ) $ 48,034 $ (581 ) $ (107 ) $ (97,922 ) |
Segments (Tables)
Segments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [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, 2017 and 2016 : (Amounts in Thousands) Small Commercial Business Specialty Risk and Extended Warranty Specialty Program Corporate and Other Total Three Months Ended March 31, 2017: Gross written premium $ 1,257,285 $ 732,442 $ 276,553 $ — $ 2,266,280 Net written premium 658,979 510,208 174,879 — 1,344,066 Change in unearned premium (105,354 ) (36,718 ) 20,538 — (121,534 ) Net earned premium 553,625 473,490 195,417 — 1,222,532 Loss and loss adjustment expense (377,437 ) (312,604 ) (150,293 ) — (840,334 ) Acquisition costs and other underwriting expenses (154,641 ) (118,463 ) (55,111 ) — (328,215 ) (532,078 ) (431,067 ) (205,404 ) — (1,168,549 ) Underwriting income 21,547 42,423 (9,987 ) — 53,983 Service and fee income 28,654 86,941 1,537 20,364 137,496 Investment income and realized gain 29,690 26,128 16,122 — 71,940 Other expenses (45,174 ) (26,316 ) (9,936 ) (81,427 ) (162,853 ) Interest expense (13,093 ) (7,628 ) (2,880 ) — (23,601 ) Foreign currency loss — (17,968 ) — — (17,968 ) Gain on life settlement contracts 4,776 2,783 1,051 — 8,610 (Provision) benefit for income taxes (7,878 ) (31,742 ) 1,221 17,043 (21,356 ) Equity in earnings of unconsolidated subsidiary – related party — — — 3,957 3,957 Net income (loss) $ 18,522 $ 74,621 $ (2,872 ) $ (40,063 ) $ 50,208 (Amounts in Thousands) Small Commercial Business Specialty Risk and Extended Warranty Specialty Program Corporate and Other Total Three Months Ended March 31, 2016 (As restated) Gross written premium $ 1,066,132 $ 529,446 $ 337,496 $ — $ 1,933,074 Net written premium 624,528 337,833 258,318 — 1,220,679 Change in unearned premium (120,434 ) (15,992 ) (9,971 ) — (146,397 ) Net earned premium 504,094 321,841 248,347 — 1,074,282 Loss and loss adjustment expense (332,684 ) (210,936 ) (171,453 ) — (715,073 ) Acquisition costs and other underwriting expenses (133,532 ) (72,851 ) (66,085 ) — (272,468 ) (466,216 ) (283,787 ) (237,538 ) — (987,541 ) Underwriting income 37,878 38,054 10,809 — 86,741 Service and fee income 32,537 74,384 289 21,595 128,805 Investment income and realized gain 26,854 19,170 11,300 66 57,390 Other expenses (35,647 ) (17,702 ) (11,284 ) (64,634 ) (129,267 ) Interest expense (8,755 ) (4,348 ) (2,771 ) — (15,874 ) Foreign currency loss — (38,233 ) — — (38,233 ) Gain on life settlement contracts 5,918 2,939 1,873 — 10,730 Acquisition gain on purchase 9,678 — — — 9,678 (Provision) benefit for income taxes (11,215 ) (12,165 ) (1,673 ) 6,093 (18,960 ) Equity in earnings of unconsolidated subsidiary – related party — — — 5,776 5,776 Net income (loss) $ 57,248 $ 62,099 $ 8,543 $ (31,104 ) $ 96,786 The following tables summarize net earned premium by major line of business, by segment, for the three months ended March 31, 2017 and 2016 : (Amounts in Thousands) Small Commercial Business Specialty Risk and Extended Warranty Specialty Program Total Three Months Ended March 31, 2017: Workers' compensation $ 336,324 $ — $ 108,996 $ 445,320 Warranty — 214,528 3 214,531 Other liability — 43,308 54,539 97,847 Commercial auto and liability, physical damage 101,146 — 25,954 127,100 Medical malpractice — 52,779 — 52,779 Other 116,155 162,875 5,925 284,955 Total net earned premium $ 553,625 $ 473,490 $ 195,417 $ 1,222,532 (Amounts in Thousands) Small Commercial Business Specialty Risk and Extended Warranty Specialty Program Total Three Months Ended March 31, 2016: Workers' compensation $ 346,043 $ — $ 107,713 $ 453,756 Warranty — 168,333 — 168,333 Other liability 5,249 40,713 70,581 116,543 Commercial auto and liability, physical damage 85,904 8,492 35,143 129,539 Medical malpractice — 44,017 — 44,017 Other 66,898 60,286 34,910 162,094 Total net earned premium $ 504,094 $ 321,841 $ 248,347 $ 1,074,282 |
Long Lived Assets and Total Assets of Business Segments | The following table summarizes total assets of the business segments as of March 31, 2017 and December 31, 2016 : (Amounts in Thousands) March 31, 2017 December 31, 2016 Small Commercial Business $ 10,734,048 $ 9,949,105 Specialty Risk and Extended Warranty 8,931,550 8,530,559 Specialty Program 4,218,673 4,135,004 $ 23,884,271 $ 22,614,668 |
Restatement of Previously Iss42
Restatement of Previously Issued Consolidated Financial Statements (Balance sheet) (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Fixed maturities, available-for-sale, at fair value | $ 7,937,238 | $ 7,398,134 | $ 6,307,719 | $ 4,419,313 | ||
Equity securities, available-for-sale, at fair value | 128,164 | 137,162 | 98,518 | 94,668 | ||
Equity securities, trading, at fair value | 100,258 | 81,960 | 29,891 | 30,560 | ||
Short-term investments | 8,914 | 10,667 | ||||
Equity investment in unconsolidated subsidiaries – related party | 157,103 | 151,332 | 146,000 | 125,104 | ||
Other investments | 154,541 | 152,187 | 126,875 | 45,627 | ||
Total investments | 8,531,457 | 7,954,557 | 6,717,917 | 4,725,939 | ||
Cash and cash equivalents | 621,730 | 567,771 | 1,023,376 | $ 1,003,916 | 1,029,008 | $ 880,899 |
Restricted cash and cash equivalents | 615,671 | 713,338 | 359,876 | 217,628 | ||
Accrued interest and dividends | 63,455 | 54,680 | 57,179 | 42,952 | ||
Premiums receivable, net | 2,946,344 | 2,802,167 | 2,511,493 | 2,218,565 | ||
Reinsurance recoverable | 4,509,509 | 4,329,521 | 3,097,192 | 2,544,549 | ||
Prepaid reinsurance premium, related party | 2,119,662 | 1,994,092 | 1,633,866 | 1,473,353 | ||
Other assets | 1,747,607 | 1,712,165 | 1,321,903 | 1,051,225 | ||
Deferred policy acquisition costs | 1,026,001 | 928,920 | 736,307 | 693,639 | 649,233 | |
Property and equipment, net | 451,573 | 314,332 | 280,933 | 158,583 | ||
Goodwill | 704,614 | 686,565 | 426,268 | 458,042 | ||
Intangible assets | 546,648 | 556,560 | 361,289 | 303,116 | ||
Total assets | 23,884,271 | 22,614,668 | 18,527,599 | 14,872,193 | ||
Loss and loss adjustment expense reserves | 10,630,162 | 10,140,716 | 7,516,089 | 7,208,367 | 5,886,149 | |
Unearned premiums | 5,199,465 | 4,880,066 | 4,290,528 | 3,704,419 | ||
Ceded reinsurance premiums payable | 811,346 | 804,882 | 851,192 | 772,651 | ||
Accrued expenses and other liabilities | 1,817,146 | 1,635,666 | 1,750,838 | 1,439,550 | ||
Debt | 1,306,701 | 1,234,900 | 993,028 | 580,673 | ||
Total liabilities | 20,370,306 | 19,147,697 | 15,401,675 | 12,383,442 | ||
Commitments and contingencies | ||||||
Redeemable non-controlling interest | 1,642 | 1,358 | 1,332 | 922 | ||
Common stock | 1,965 | 1,965 | 1,965 | 1,964 | ||
Preferred stock | 913,750 | 913,750 | 626,250 | 482,500 | ||
Additional paid-in capital | 1,386,385 | 1,384,922 | 1,381,282 | 1,116,900 | ||
Treasury stock at cost | (306,435) | (310,883) | (177,071) | (225,121) | ||
Accumulated other comprehensive loss, net of tax | (97,806) | (125,722) | (97,922) | 10,854 | ||
Retained earnings | 1,398,596 | 1,405,071 | 1,209,776 | 938,401 | ||
Total AmTrust Financial Services, Inc. equity | 3,296,455 | 3,269,103 | 2,944,280 | 2,325,498 | 2,325,498 | |
Non-controlling interest | 215,868 | 196,510 | 180,312 | 162,331 | ||
Total stockholders’ equity | 3,512,323 | 3,465,613 | 3,124,592 | 2,900,235 | 2,487,829 | |
Total liabilities and stockholders' equity | $ 23,884,271 | $ 22,614,668 | 18,527,599 | 14,872,193 | ||
As previously reported | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Fixed maturities, available-for-sale, at fair value | 6,307,719 | 4,419,313 | ||||
Equity securities, available-for-sale, at fair value | 98,518 | 94,668 | ||||
Equity securities, trading, at fair value | 29,891 | 30,560 | ||||
Short-term investments | 34,008 | 42,668 | ||||
Equity investment in unconsolidated subsidiaries – related party | 146,000 | 125,104 | ||||
Other investments | 126,875 | 45,627 | ||||
Total investments | 6,743,011 | 4,757,940 | ||||
Cash and cash equivalents | 998,282 | 931,970 | 997,007 | 902,750 | ||
Restricted cash and cash equivalents | 359,876 | 217,628 | ||||
Accrued interest and dividends | 57,179 | 42,952 | ||||
Premiums receivable, net | 2,376,689 | 2,134,647 | ||||
Reinsurance recoverable | 3,097,192 | 2,544,549 | ||||
Prepaid reinsurance premium, related party | 1,633,866 | 1,473,353 | ||||
Other assets | 1,247,886 | 1,050,804 | ||||
Deferred policy acquisition costs | 761,802 | 651,884 | ||||
Property and equipment, net | 292,381 | 167,459 | ||||
Goodwill | 426,268 | 458,042 | ||||
Intangible assets | 361,289 | 303,116 | ||||
Total assets | 18,355,721 | 14,799,381 | ||||
Loss and loss adjustment expense reserves | 7,516,089 | 5,886,149 | ||||
Unearned premiums | 4,290,528 | 3,704,419 | ||||
Ceded reinsurance premiums payable | 851,192 | 772,651 | ||||
Accrued expenses and other liabilities | 1,379,985 | 1,229,501 | ||||
Debt | 993,028 | 580,673 | ||||
Total liabilities | 15,030,822 | 12,173,393 | ||||
Redeemable non-controlling interest | 1,332 | 922 | ||||
Common stock | 1,965 | 1,964 | ||||
Preferred stock | 626,250 | 482,500 | ||||
Additional paid-in capital | 1,381,282 | 1,116,900 | ||||
Treasury stock at cost | (177,071) | (225,121) | ||||
Accumulated other comprehensive loss, net of tax | (97,348) | (2,348) | ||||
Retained earnings | 1,408,177 | 1,088,840 | ||||
Total AmTrust Financial Services, Inc. equity | 3,143,255 | 2,462,735 | 2,462,735 | |||
Non-controlling interest | 180,312 | 162,331 | ||||
Total stockholders’ equity | 3,323,567 | 2,625,066 | ||||
Total liabilities and stockholders' equity | 18,355,721 | 14,799,381 | ||||
Restatement adjustment | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Short-term investments | (25,094) | (32,001) | ||||
Equity investment in unconsolidated subsidiaries – related party | 0 | |||||
Other investments | 0 | |||||
Total investments | (25,094) | (32,001) | ||||
Cash and cash equivalents | 25,094 | 71,946 | 32,001 | $ (21,851) | ||
Premiums receivable, net | 134,804 | 83,918 | ||||
Other assets | 74,017 | 421 | ||||
Deferred policy acquisition costs | (25,495) | (2,651) | ||||
Property and equipment, net | (11,448) | (8,876) | ||||
Total assets | 171,878 | 72,812 | ||||
Accrued expenses and other liabilities | 370,853 | 210,049 | ||||
Total liabilities | 370,853 | 210,049 | ||||
Accumulated other comprehensive loss, net of tax | (574) | 13,202 | ||||
Retained earnings | (198,401) | (150,439) | ||||
Total AmTrust Financial Services, Inc. equity | (198,975) | $ (137,237) | (137,237) | |||
Total stockholders’ equity | (198,975) | (137,237) | ||||
Total liabilities and stockholders' equity | $ 171,878 | $ 72,812 |
Restatement of Previously Iss43
Restatement of Previously Issued Consolidated Financial Statements (Income statement) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net written premium | $ 1,344,066 | $ 1,220,679 | $ 1,043,189 | |
Change in unearned premium | (121,534) | (146,397) | (93,812) | |
Net earned premium | 1,222,532 | 1,074,282 | 949,377 | |
Service and fee income | 137,496 | 128,805 | 102,119 | |
Net investment income | 63,325 | 49,415 | 34,573 | |
Net realized gain on investments | 8,615 | 7,975 | 15,653 | |
Total revenues | 1,431,968 | 1,260,477 | 1,101,722 | |
Loss and loss adjustment expense | 840,334 | 715,073 | 613,283 | |
Acquisition costs and other underwriting expenses | 328,215 | 272,468 | 232,781 | |
Other | 162,853 | 129,267 | 100,960 | |
Total expenses | 1,331,402 | 1,116,808 | 947,024 | |
Income before other (expense) income, provision for income taxes, equity in earnings of unconsolidated subsidiaries and non-controlling interest | 100,566 | 143,669 | 154,698 | |
Interest expense | (23,601) | (15,874) | (12,081) | |
Loss on extinguishment of debt | (4,714) | |||
Gain on investment in life settlement contracts net of profit commission | 8,610 | 10,730 | 11,373 | |
Foreign currency (loss) gain | (17,968) | (38,233) | 24,657 | |
Gain on acquisition | 0 | 9,678 | ||
Total other loss | (32,959) | (33,699) | 19,235 | |
Income before income taxes, equity in earnings of unconsolidated subsidiaries and non-controlling interest | 67,607 | 109,970 | 173,933 | |
Provision for income taxes | 21,356 | 18,960 | 36,493 | |
Income before equity in earnings of unconsolidated subsidiaries | 46,251 | 91,010 | 137,440 | |
Equity in earnings of unconsolidated subsidiary – related parties | 3,957 | 5,776 | 5,529 | |
Equity in earnings of unconsolidated subsidiaries – related parties | 3,957 | 6,145 | 5,529 | |
Net income | 50,208 | 96,786 | 142,969 | $ 142,969 |
Net (income) loss attributable to non-controlling interests and redeemable non-controlling interests of subsidiaries | (11,005) | (4,017) | (4,083) | |
Net income attributable to AmTrust stockholders | 92,769 | 138,886 | ||
Net Income (Loss), Including Portion Attributable to Nonredeemable Noncontrolling Interest | 49,923 | 96,626 | ||
Dividends on preferred stock | (16,571) | (8,791) | (5,369) | |
Net income attributable to AmTrust common stockholders | $ 22,632 | $ 83,978 | $ 133,517 | |
Basic earnings per share (in dollars per share) | $ 0.13 | $ 0.48 | $ 0.82 | |
Diluted earnings per share (in dollars per share) | 0.13 | 0.47 | 0.80 | |
Dividends declared per common share (in dollars per share) | $ 0.17 | $ 0.15000 | $ 0.1 | |
Weighted average common shares outstanding - Basic (in shares) | 170,864 | 175,585 | 162,336 | |
Weighted average common shares outstanding - Diluted (in shares) | 172,692 | 177,927 | 166,874 | |
As previously reported | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net written premium | $ 1,220,679 | $ 1,043,189 | ||
Change in unearned premium | (146,397) | (93,812) | ||
Net earned premium | 1,074,282 | 949,377 | ||
Service and fee income | 144,201 | 112,886 | ||
Net investment income | 49,415 | 34,573 | ||
Net realized gain on investments | 7,975 | 15,653 | ||
Total revenues | 1,275,873 | 1,112,489 | ||
Loss and loss adjustment expense | 715,073 | 613,283 | ||
Acquisition costs and other underwriting expenses | 264,634 | 231,676 | ||
Other | 128,186 | 98,457 | ||
Total expenses | 1,107,893 | 943,416 | ||
Income before other (expense) income, provision for income taxes, equity in earnings of unconsolidated subsidiaries and non-controlling interest | 167,980 | 169,073 | ||
Interest expense | (17,700) | (10,255) | ||
Loss on extinguishment of debt | (4,714) | |||
Gain on investment in life settlement contracts net of profit commission | 10,730 | 11,373 | ||
Foreign currency (loss) gain | (35,673) | 39,954 | ||
Gain on acquisition | 9,678 | |||
Total other loss | (32,965) | 36,358 | ||
Income before income taxes, equity in earnings of unconsolidated subsidiaries and non-controlling interest | 135,015 | 205,431 | ||
Provision for income taxes | 27,726 | 46,812 | ||
Income before equity in earnings of unconsolidated subsidiaries | 107,289 | 158,619 | ||
Equity in earnings of unconsolidated subsidiary – related parties | 5,776 | 5,529 | ||
Equity in earnings of unconsolidated subsidiaries – related parties | 5,776 | 5,529 | ||
Net income | 113,065 | 164,148 | 164,148 | |
Net (income) loss attributable to non-controlling interests and redeemable non-controlling interests of subsidiaries | (4,017) | (4,083) | ||
Net income attributable to AmTrust stockholders | 109,048 | 160,065 | ||
Dividends on preferred stock | (8,791) | (5,369) | ||
Net income attributable to AmTrust common stockholders | $ 100,257 | $ 154,696 | ||
Basic earnings per share (in dollars per share) | $ 0.57 | $ 0.95 | ||
Diluted earnings per share (in dollars per share) | 0.56 | 0.93 | ||
Dividends declared per common share (in dollars per share) | $ 0.15 | $ 0.10 | ||
Weighted average common shares outstanding - Basic (in shares) | 175,585 | 162,336 | ||
Weighted average common shares outstanding - Diluted (in shares) | 177,927 | 166,874 | ||
Restatement adjustment | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Service and fee income | $ (15,396) | $ (10,767) | ||
Net realized gain on investments | 0 | |||
Total revenues | (15,396) | (10,767) | ||
Acquisition costs and other underwriting expenses | 7,834 | 1,105 | ||
Other | 1,081 | 2,503 | ||
Total expenses | 8,915 | 3,608 | ||
Income before other (expense) income, provision for income taxes, equity in earnings of unconsolidated subsidiaries and non-controlling interest | (24,311) | (14,375) | ||
Interest expense | 1,826 | (1,826) | ||
Foreign currency (loss) gain | (2,560) | (15,297) | ||
Total other loss | (734) | (17,123) | ||
Income before income taxes, equity in earnings of unconsolidated subsidiaries and non-controlling interest | (25,045) | (31,498) | ||
Provision for income taxes | (8,766) | (10,319) | ||
Income before equity in earnings of unconsolidated subsidiaries | (16,279) | (21,179) | ||
Equity in earnings of unconsolidated subsidiaries – related parties | (369) | |||
Net income | (16,279) | (21,179) | $ (21,179) | |
Net income attributable to AmTrust stockholders | (16,279) | (21,179) | ||
Dividends on preferred stock | 0 | |||
Net income attributable to AmTrust common stockholders | $ (16,279) | $ (21,179) | ||
Basic earnings per share (in dollars per share) | $ (0.09) | $ (0.13) | ||
Diluted earnings per share (in dollars per share) | $ (0.09) | $ (0.13) |
Restatement of Previously Iss44
Restatement of Previously Issued Consolidated Financial Statements (Comprehensive Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net income | $ 50,208 | $ 96,786 | $ 142,969 | $ 142,969 |
Foreign currency translation adjustments | 13,863 | (47,194) | (57,524) | |
Change in fair value of interest rate swap | 92 | 119 | 27 | |
Gross unrealized holding gain | 32,031 | 127,652 | 12,603 | |
Less tax expense | 6,440 | 44,679 | 4,411 | |
Net unrealized holding gain | 25,591 | 82,973 | 8,192 | |
Other-than-temporary impairment loss | 0 | 0 | 0 | |
Other net realized loss on investments | (11,630) | (428) | (415) | |
Reclassification adjustments for investment gain (loss) included in net income: | (11,630) | (428) | (415) | |
Other comprehensive income, net of tax | 27,916 | 35,470 | (49,720) | |
Comprehensive income | 78,124 | 132,256 | 93,249 | |
Less: Comprehensive income attributable to non-controlling and redeemable non-controlling interest | 11,005 | 4,017 | 4,083 | |
Comprehensive income attributable to AmTrust Financial Services, Inc. | $ 67,119 | 128,239 | 89,166 | |
As previously reported | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net income | 113,065 | 164,148 | 164,148 | |
Foreign currency translation adjustments | (47,845) | (65,353) | ||
Change in fair value of interest rate swap | 119 | 27 | ||
Gross unrealized holding gain | 124,720 | 11,185 | ||
Less tax expense | 43,652 | 3,915 | ||
Net unrealized holding gain | 81,068 | 7,270 | ||
Other-than-temporary impairment loss | 0 | 0 | ||
Other net realized loss on investments | (428) | (415) | ||
Reclassification adjustments for investment gain (loss) included in net income: | (428) | (415) | ||
Other comprehensive income, net of tax | 32,914 | (58,471) | ||
Comprehensive income | 145,979 | 105,677 | ||
Less: Comprehensive income attributable to non-controlling and redeemable non-controlling interest | 4,017 | 4,083 | ||
Comprehensive income attributable to AmTrust Financial Services, Inc. | 141,962 | 101,594 | ||
Restatement adjustment | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net income | (16,279) | $ (21,179) | (21,179) | |
Foreign currency translation adjustments | 651 | 7,829 | ||
Gross unrealized holding gain | 2,932 | 1,418 | ||
Less tax expense | 1,027 | 496 | ||
Net unrealized holding gain | 1,905 | 922 | ||
Other comprehensive income, net of tax | 2,556 | 8,751 | ||
Comprehensive income | (13,723) | (12,428) | ||
Comprehensive income attributable to AmTrust Financial Services, Inc. | $ (13,723) | $ (12,428) |
Restatement of Previously Iss45
Restatement of Previously Issued Consolidated Financial Statements (Stockholders' Equity) (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Total AmTrust Financial Services, Inc. equity | $ 3,296,455 | $ 3,269,103 | $ 2,944,280 | $ 2,325,498 | $ 2,325,498 |
As previously reported | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Total AmTrust Financial Services, Inc. equity | 3,143,255 | 2,462,735 | 2,462,735 | ||
Restatement adjustment | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Total AmTrust Financial Services, Inc. equity | (198,975) | (137,237) | $ (137,237) | ||
Common stock | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Total AmTrust Financial Services, Inc. equity | 1,965 | 1,964 | |||
Common stock | As previously reported | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Total AmTrust Financial Services, Inc. equity | 1,965 | 1,964 | |||
Preferred stock | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Total AmTrust Financial Services, Inc. equity | 626,250 | 482,500 | |||
Preferred stock | As previously reported | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Total AmTrust Financial Services, Inc. equity | 626,250 | 482,500 | |||
Additional paid-in capital | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Total AmTrust Financial Services, Inc. equity | 1,381,282 | 1,116,900 | |||
Additional paid-in capital | As previously reported | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Total AmTrust Financial Services, Inc. equity | 1,381,282 | 1,116,900 | |||
Treasury Stock | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Total AmTrust Financial Services, Inc. equity | (177,071) | (225,121) | |||
Treasury Stock | As previously reported | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Total AmTrust Financial Services, Inc. equity | (177,071) | (225,121) | |||
Accumulated other comprehensive income (loss) | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Total AmTrust Financial Services, Inc. equity | (97,922) | 10,854 | |||
Accumulated other comprehensive income (loss) | As previously reported | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Total AmTrust Financial Services, Inc. equity | (97,348) | (2,348) | |||
Accumulated other comprehensive income (loss) | Restatement adjustment | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Total AmTrust Financial Services, Inc. equity | (574) | 13,202 | |||
Retained earnings | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Total AmTrust Financial Services, Inc. equity | 1,209,776 | 938,401 | |||
Retained earnings | As previously reported | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Total AmTrust Financial Services, Inc. equity | 1,408,177 | 1,088,840 | |||
Retained earnings | Restatement adjustment | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Total AmTrust Financial Services, Inc. equity | $ (198,401) | $ (150,439) |
Restatement of Previously Iss46
Restatement of Previously Issued Consolidated Financial Statements (Cash Flow) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Net income | $ 50,208 | $ 96,786 | $ 142,969 | $ 142,969 | |
Depreciation and amortization | 40,839 | 27,859 | 20,322 | ||
Net amortization of bond premium or discount | 5,500 | 4,842 | 5,890 | ||
Equity earnings on investment in unconsolidated subsidiaries | (3,957) | (6,145) | (5,529) | ||
Gain on investment in life settlement contracts, net | (8,610) | (10,730) | (11,373) | ||
Net realized gain on investments | (8,615) | (7,975) | (16,669) | ||
Non-cash write-down of investments | 1,016 | ||||
Discount on notes payable | 1,566 | 1,455 | 1,389 | ||
Stock based compensation | 5,818 | 5,641 | 4,914 | $ 5,641 | |
Loss on extinguishment of debt | 4,714 | ||||
Bad debt expense | 11,232 | 305 | 6,281 | ||
Foreign currency (gain) | 17,968 | 38,233 | (24,657) | ||
Gain on acquisition | 0 | (9,678) | |||
Dividend received from equity investment | 492 | 369 | |||
Premiums receivable | (285,043) | (271,320) | (333,140) | ||
Reinsurance recoverable | (177,712) | (73,900) | (102,513) | ||
Deferred policy acquisition costs | (97,081) | (42,667) | (19,972) | ||
Prepaid reinsurance premiums | (122,295) | (102,000) | (170,505) | ||
Other assets | 150,741 | 126,208 | 41,192 | ||
Ceded reinsurance premium payable | 6,464 | 203,594 | 89,550 | ||
Loss and loss adjustment expense reserve | 272,021 | 271,070 | 174,000 | ||
Unearned premiums | 264,193 | 264,090 | 230,654 | ||
Funds held under reinsurance treaties | (7,094) | (30,984) | 18,984 | ||
Accrued expenses and other liabilities | 132,430 | 217,078 | 158,303 | ||
Net cash provided by operating activities | 249,065 | 702,131 | 215,820 | ||
Purchases of fixed maturities, available-for-sale | (871,320) | (870,349) | (434,806) | ||
Purchases of equity securities, available-for-sale | (41,399) | (613) | (15,351) | ||
Purchase of equity securities, trading | (170,751) | (54,382) | (62,083) | ||
Purchases of other investments | (12,210) | (5,441) | (18,867) | ||
Sales, maturities, paydowns of fixed maturities, available-for-sale | 523,448 | 198,173 | 289,686 | ||
Sales of equity securities, available-for-sale | 119,257 | 4,563 | 9,285 | ||
Sales of equity securities, trading | 131,845 | 52,744 | 60,268 | ||
Sales of other investments | 12,690 | 190 | 13,337 | ||
Net (purchases) of short term investments | 0 | (59,927) | 73,541 | ||
Net (purchases) of securities sold but not purchased | 25,273 | (9,763) | 3,570 | ||
Receipt of life settlement contract proceeds | 18,081 | 8,058 | 53,080 | ||
Acquisition of subsidiaries, net of cash obtained | (27,510) | 3,814 | (118,464) | ||
(Increase) decrease in restricted cash and cash equivalents, net | 97,668 | 20,823 | (31,403) | ||
Purchase of property and equipment | (156,152) | (41,022) | (22,994) | ||
Net cash used in investing activities | (366,303) | (753,132) | (201,201) | ||
Revolving credit facility borrowings | 200,000 | ||||
Revolving credit facility payments | (320,000) | ||||
Secured loan agreements payments | (5,874) | (1,778) | (1,733) | ||
Convertible senior notes payments | (53,606) | ||||
Common stock issuance | 0 | 276 | 171,672 | ||
Common stock repurchase | 0 | (14,668) | |||
Preferred stock issuance | 0 | 139,070 | 176,529 | ||
Contingent consideration payments | 0 | (10,303) | (4,178) | ||
Non-controlling interest capital contributions (dividends) to consolidated subsidiaries, net | 8,638 | 0 | 565 | ||
Stock option exercise and other | 1,522 | (2,982) | 310 | ||
Dividends distributed on common stock | (28,987) | (26,311) | (19,374) | ||
Dividends distributed on preferred stock | (16,571) | (8,791) | (5,369) | ||
Net cash provided by financing activities | 167,802 | 74,513 | 144,816 | ||
Effect of exchange rate changes on cash | 3,395 | (4,052) | (11,326) | ||
Net increase in cash and cash equivalents | 53,959 | 19,460 | 148,109 | ||
Cash and cash equivalents, beginning of the year | 567,771 | 1,003,916 | 880,899 | 1,003,916 | 880,899 |
Cash and cash equivalents, end of the period | 621,730 | 1,023,376 | 1,029,008 | 567,771 | 1,003,916 |
Interest payments on debt | 25,463 | 16,295 | 11,442 | ||
Income tax payments | 140 | 5,467 | 96,916 | ||
Declared dividends on common stock | $ 29,107 | 26,313 | 20,590 | ||
As previously reported | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Net income | 113,065 | 164,148 | 164,148 | ||
Depreciation and amortization | 25,347 | 19,426 | |||
Net amortization of bond premium or discount | 4,842 | 5,890 | |||
Equity earnings on investment in unconsolidated subsidiaries | (5,776) | (5,529) | |||
Gain on investment in life settlement contracts, net | (10,730) | (11,373) | |||
Net realized gain on investments | (7,975) | (16,669) | |||
Non-cash write-down of investments | 1,016 | ||||
Discount on notes payable | 1,455 | 1,389 | |||
Stock based compensation | 5,641 | 4,914 | |||
Loss on extinguishment of debt | 4,714 | ||||
Bad debt expense | 305 | 6,281 | |||
Foreign currency (gain) | 35,673 | (39,954) | |||
Gain on acquisition | (9,678) | ||||
Dividend received from equity investment | 0 | ||||
Premiums receivable | (256,816) | (289,546) | |||
Reinsurance recoverable | (72,607) | (102,608) | |||
Deferred policy acquisition costs | (57,559) | (23,501) | |||
Prepaid reinsurance premiums | (102,000) | (170,505) | |||
Other assets | 124,952 | (40,228) | |||
Ceded reinsurance premium payable | 203,594 | 89,550 | |||
Loss and loss adjustment expense reserve | 271,070 | 174,000 | |||
Unearned premiums | 263,749 | 232,986 | |||
Funds held under reinsurance treaties | (30,984) | 18,984 | |||
Accrued expenses and other liabilities | 192,883 | 170,409 | |||
Net cash provided by operating activities | 688,451 | 193,794 | |||
Purchases of fixed maturities, available-for-sale | (870,349) | (434,806) | |||
Purchases of equity securities, available-for-sale | (613) | (15,351) | |||
Purchase of equity securities, trading | (54,382) | (62,083) | |||
Purchases of other investments | (12,605) | (27,233) | |||
Sales, maturities, paydowns of fixed maturities, available-for-sale | 198,173 | 292,961 | |||
Sales of equity securities, available-for-sale | 4,563 | 9,285 | |||
Sales of equity securities, trading | 52,744 | 60,268 | |||
Sales of other investments | 190 | 13,337 | |||
Net (purchases) of short term investments | (17,926) | 41,540 | |||
Net (purchases) of securities sold but not purchased | (9,763) | 3,570 | |||
Receipt of life settlement contract proceeds | 8,058 | 53,080 | |||
Acquisition of subsidiaries, net of cash obtained | 3,814 | (118,464) | |||
(Increase) decrease in restricted cash and cash equivalents, net | 20,823 | (31,403) | |||
Purchase of property and equipment | (25,630) | (21,906) | |||
Net cash used in investing activities | (702,903) | (237,205) | |||
Revolving credit facility borrowings | 200,000 | ||||
Revolving credit facility payments | (320,000) | ||||
Secured loan agreements payments | (1,778) | (1,733) | |||
Convertible senior notes payments | (53,606) | ||||
Common stock issuance | 276 | 171,672 | |||
Common stock repurchase | (14,668) | ||||
Preferred stock issuance | 139,070 | 176,529 | |||
Contingent consideration payments | 0 | 0 | |||
Non-controlling interest capital contributions (dividends) to consolidated subsidiaries, net | 565 | ||||
Stock option exercise and other | (2,982) | 310 | |||
Dividends distributed on common stock | (26,311) | (19,374) | |||
Dividends distributed on preferred stock | (8,791) | (5,369) | |||
Net cash provided by financing activities | 84,816 | 148,994 | |||
Effect of exchange rate changes on cash | (4,052) | (11,326) | |||
Net increase in cash and cash equivalents | 66,312 | 94,257 | |||
Cash and cash equivalents, beginning of the year | 931,970 | 902,750 | 931,970 | 902,750 | |
Cash and cash equivalents, end of the period | 998,282 | 997,007 | 931,970 | ||
Interest payments on debt | 16,295 | 11,442 | |||
Income tax payments | 5,467 | 96,916 | |||
Declared dividends on common stock | 26,313 | 20,590 | |||
Restatement adjustment | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Net income | (16,279) | (21,179) | (21,179) | ||
Depreciation and amortization | 2,512 | 896 | |||
Equity earnings on investment in unconsolidated subsidiaries | 369 | ||||
Foreign currency (gain) | (2,560) | 15,297 | |||
Dividend received from equity investment | 369 | ||||
Premiums receivable | 14,504 | (43,594) | |||
Reinsurance recoverable | (1,293) | 95 | |||
Deferred policy acquisition costs | 14,892 | 3,529 | |||
Other assets | 1,256 | 81,420 | |||
Unearned premiums | 341 | (2,332) | |||
Accrued expenses and other liabilities | 24,195 | (12,106) | |||
Net cash provided by operating activities | 13,680 | 22,026 | |||
Purchases of other investments | (7,164) | 8,366 | |||
Sales, maturities, paydowns of fixed maturities, available-for-sale | (3,275) | ||||
Net (purchases) of short term investments | (42,001) | 32,001 | |||
Purchase of property and equipment | (15,392) | (1,088) | |||
Net cash used in investing activities | (50,229) | 36,004 | |||
Contingent consideration payments | (10,303) | (4,178) | |||
Net cash provided by financing activities | (10,303) | (4,178) | |||
Effect of exchange rate changes on cash | 0 | ||||
Net increase in cash and cash equivalents | (46,852) | 53,852 | |||
Cash and cash equivalents, beginning of the year | 71,946 | (21,851) | $ 71,946 | (21,851) | |
Cash and cash equivalents, end of the period | $ 25,094 | $ 32,001 | $ 71,946 |
Restatement of Previously Iss47
Restatement of Previously Issued Consolidated Financial Statements (Non-Printing) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2016 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Fixed maturities, available-for-sale, amortized cost | $ 7,834,548 | $ 6,221,739 | $ 4,292,658 | $ 7,315,041 |
Fixed maturities, trading, at cost | 57,060 | 0 | 29,081 | |
Equity securities, available-for-sale, cost | 116,867 | 110,594 | 96,261 | 126,670 |
Equity securities, trading, at cost | 98,277 | 28,142 | 29,353 | 76,163 |
Other investments | 154,541 | 126,875 | 45,627 | 152,187 |
Reinsurance recoverable | 4,509,509 | 3,097,192 | 2,544,549 | 4,329,521 |
Prepaid reinsurance premium, related party | 2,119,662 | 1,633,866 | 1,473,353 | 1,994,092 |
Other assets | 1,747,607 | 1,321,903 | 1,051,225 | 1,712,165 |
Other assets, at fair value | 294,573 | 259,785 | ||
Ceded reinsurance premiums payable, related party | 811,346 | 851,192 | 772,651 | 804,882 |
Accrued expenses and other current liabilities, related party | 1,817,146 | 1,750,838 | 1,439,550 | 1,635,666 |
Accrued expenses and other current liabilities, fair value | 77,029 | 101,655 | 33,189 | $ 76,840 |
Debt, net of debt issuance cost | $ 15,906 | $ 161,616 | $ 12,295 | |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 | 300,000,000 | 500,000,000 |
Common stock, issued (in shares) | 196,455,000 | 196,455,000 | 98,211,000 | 196,455,000 |
Common stock, outstanding (in shares) | 171,237,000 | 175,400,000 | 82,347,000 | 170,508,000 |
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 |
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 |
Preferred stock, shares issued (in shares) | 5,399,000 | 5,112,000 | 4,968,000 | 5,399,000 |
Preferred stock, shares outstanding (in shares) | 5,399,000 | 5,112,000 | 4,968,000 | 5,399,000 |
Liquidation preference | $ 913,750 | $ 626,250 | $ 913,750 | |
Treasury stock at cost (in shares) | 25,218,000 | 21,054,000 | 31,562,000 | 25,947,000 |
Service and fee income | $ 137,496 | $ 128,805 | $ 102,119 | |
Ceding commission - earned | 138,391 | |||
Interest income | 1,580 | 2,188 | ||
Related Party Transactions | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Other investments | 77,029 | 68,860 | $ 72,328 | |
Reinsurance recoverable | 2,597,647 | 2,282,432 | 1,627,100 | 2,452,242 |
Prepaid reinsurance premium, related party | 1,213,810 | 184,742 | 1,047,486 | 1,133,485 |
Other assets | 146,760 | 206,298 | 156,996 | 161,845 |
Ceded reinsurance premiums payable, related party | 746,729 | 571,754 | 533,234 | $ 633,638 |
Accrued expenses and other current liabilities, related party | 167,975 | 167,975 | ||
Service and fee income | 20,335 | 20,163 | 17,404 | |
Ceding commission - earned | $ 153,702 | 138,391 | ||
Interest income | $ 2,188 | $ 2,188 |
Investments - Amortized Cost, E
Investments - Amortized Cost, Estimated Market Value and Gross Unrealized Appreciation and Depreciation of Available-for-sale Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Original or amortized cost | $ 7,951,415 | $ 7,441,711 |
Gross unrealized gains | 164,601 | 158,381 |
Gross unrealized losses | (50,614) | (64,796) |
Fair Value | 8,065,402 | 7,535,296 |
Preferred stock | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Original or amortized cost | 753 | 4,044 |
Gross unrealized gains | 12 | 0 |
Gross unrealized losses | 0 | (59) |
Fair Value | 765 | 3,985 |
Common stock | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Original or amortized cost | 116,114 | 122,626 |
Gross unrealized gains | 13,499 | 12,899 |
Gross unrealized losses | (2,214) | (2,348) |
Fair Value | 127,399 | 133,177 |
U.S. treasury securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Original or amortized cost | 332,089 | 331,036 |
Gross unrealized gains | 1,181 | 1,235 |
Gross unrealized losses | (1,524) | (1,617) |
Fair Value | 331,746 | 330,654 |
U.S. government agencies | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Original or amortized cost | 38,704 | 63,467 |
Gross unrealized gains | 26 | 282 |
Gross unrealized losses | (12) | (17) |
Fair Value | 38,718 | 63,732 |
Municipal bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Original or amortized cost | 906,527 | 860,444 |
Gross unrealized gains | 10,727 | 9,603 |
Gross unrealized losses | (11,004) | (15,877) |
Fair Value | 906,250 | 854,170 |
Foreign government | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Original or amortized cost | 163,902 | 149,365 |
Gross unrealized gains | 3,500 | 4,237 |
Gross unrealized losses | (827) | (726) |
Fair Value | 166,575 | 152,876 |
Finance | Corporate bonds: | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Original or amortized cost | 1,594,509 | 1,535,606 |
Gross unrealized gains | 39,132 | 38,404 |
Gross unrealized losses | (6,071) | (7,722) |
Fair Value | 1,627,570 | 1,566,288 |
Industrial | Corporate bonds: | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Original or amortized cost | 2,426,628 | 2,222,843 |
Gross unrealized gains | 60,914 | 62,133 |
Gross unrealized losses | (11,948) | (17,115) |
Fair Value | 2,475,594 | 2,267,861 |
Utilities | Corporate bonds: | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Original or amortized cost | 310,717 | 195,607 |
Gross unrealized gains | 7,024 | 4,433 |
Gross unrealized losses | (1,366) | (1,210) |
Fair Value | 316,375 | 198,830 |
Commercial mortgage backed securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Original or amortized cost | 475,061 | 178,092 |
Gross unrealized gains | 3,493 | 2,464 |
Gross unrealized losses | (6,632) | (2,562) |
Fair Value | 471,922 | 177,994 |
Agency backed | Residential mortgage-backed securities: | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Original or amortized cost | 922,458 | 1,210,229 |
Gross unrealized gains | 13,295 | 13,685 |
Gross unrealized losses | (8,309) | (13,529) |
Fair Value | 927,444 | 1,210,385 |
Non-agency backed | Residential mortgage-backed securities: | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Original or amortized cost | 5,133 | 61,646 |
Gross unrealized gains | 10 | 586 |
Gross unrealized losses | (40) | (1,003) |
Fair Value | 5,103 | 61,229 |
Collateralized loan / debt obligation | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Original or amortized cost | 617,608 | 476,767 |
Gross unrealized gains | 11,646 | 8,389 |
Gross unrealized losses | (466) | (751) |
Fair Value | 628,788 | 484,405 |
Asset-backed securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Original or amortized cost | 41,212 | 29,939 |
Gross unrealized gains | 142 | 31 |
Gross unrealized losses | (201) | (260) |
Fair Value | $ 41,153 | $ 29,710 |
Investments - Summary of Availa
Investments - Summary of Available for Sale Fixed Securities by Contractual Maturity (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Mar. 31, 2015 |
Amortized Cost | ||||
Total fixed maturities | $ 7,834,548 | $ 7,315,041 | $ 6,221,739 | $ 4,292,658 |
Fair Value | ||||
Total fixed maturities | 7,937,238 | 7,398,134 | $ 6,307,719 | $ 4,419,313 |
Fixed maturities, available-for-sale | ||||
Amortized Cost | ||||
Due in one year or less | 289,263 | 319,275 | ||
Due after one through five years | 1,782,757 | 2,956,429 | ||
Due after five through ten years | 3,204,377 | 1,645,211 | ||
Due after ten years | 496,679 | 437,452 | ||
Mortgage and asset backed securities | 2,061,472 | 1,956,674 | ||
Total fixed maturities | 7,834,548 | 7,315,041 | ||
Fair Value | ||||
Due in one year or less | 289,850 | 319,882 | ||
Due after one through five years | 1,829,025 | 2,998,711 | ||
Due after five through ten years | 3,248,128 | 1,683,112 | ||
Due after ten years | 495,824 | 432,702 | ||
Mortgage and asset backed securities | 2,074,411 | 1,963,727 | ||
Total fixed maturities | $ 7,937,238 | $ 7,398,134 |
Investments - Summary of Gross
Investments - Summary of Gross Unrealized Losses of Fixed-maturities and Equity Securities (Details) $ in Thousands | Mar. 31, 2017USD ($)Contract | Dec. 31, 2016USD ($)Contract |
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | $ 2,861,276 | $ 4,309,237 |
Unrealized Losses | $ (49,019) | $ (56,779) |
No. of Positions Held | Contract | 1,894 | 1,866 |
Fair Value | $ 67,025 | $ 264,026 |
Unrealized Losses | $ (1,595) | $ (8,017) |
No. of Positions Held | Contract | 98 | 259 |
Fair Value | $ 2,928,301 | $ 4,573,263 |
Unrealized Losses | (50,614) | (64,796) |
Common and preferred stock | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 40,202 | 46,783 |
Unrealized Losses | $ (2,214) | $ (1,424) |
No. of Positions Held | Contract | 86 | 32 |
Fair Value | $ 0 | $ 9,991 |
Unrealized Losses | $ 0 | $ (983) |
No. of Positions Held | Contract | 0 | 53 |
Fair Value | $ 40,202 | $ 56,774 |
Unrealized Losses | (2,214) | (2,407) |
U.S. treasury securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 287,025 | 293,155 |
Unrealized Losses | $ (1,521) | $ (1,613) |
No. of Positions Held | Contract | 137 | 115 |
Fair Value | $ 723 | $ 22,989 |
Unrealized Losses | $ (3) | $ (4) |
No. of Positions Held | Contract | 3 | 6 |
Fair Value | $ 287,748 | $ 316,144 |
Unrealized Losses | (1,524) | (1,617) |
U.S. government agencies | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 7,736 | 7,866 |
Unrealized Losses | $ (12) | $ (17) |
No. of Positions Held | Contract | 14 | 20 |
Fair Value | $ 0 | $ 0 |
Unrealized Losses | $ 0 | $ 0 |
No. of Positions Held | Contract | 0 | 0 |
Fair Value | $ 7,736 | $ 7,866 |
Unrealized Losses | (12) | (17) |
Municipal bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 485,032 | 519,578 |
Unrealized Losses | $ (10,657) | $ (15,207) |
No. of Positions Held | Contract | 114 | 439 |
Fair Value | $ 8,635 | $ 15,742 |
Unrealized Losses | $ (347) | $ (670) |
No. of Positions Held | Contract | 11 | 26 |
Fair Value | $ 493,667 | $ 535,320 |
Unrealized Losses | (11,004) | (15,877) |
Foreign government | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 70,292 | 128,863 |
Unrealized Losses | $ (746) | $ (688) |
No. of Positions Held | Contract | 454 | 52 |
Fair Value | $ 1,919 | $ 12,659 |
Unrealized Losses | $ (81) | $ (38) |
No. of Positions Held | Contract | 1 | 7 |
Fair Value | $ 72,211 | $ 141,522 |
Unrealized Losses | (827) | (726) |
Finance | Corporate bonds: | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 460,143 | 1,071,982 |
Unrealized Losses | $ (5,731) | $ (7,210) |
No. of Positions Held | Contract | 231 | 342 |
Fair Value | $ 13,769 | $ 16,840 |
Unrealized Losses | $ (340) | $ (512) |
No. of Positions Held | Contract | 4 | 13 |
Fair Value | $ 473,912 | $ 1,088,822 |
Unrealized Losses | (6,071) | (7,722) |
Industrial | Corporate bonds: | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 633,781 | 1,200,129 |
Unrealized Losses | $ (11,522) | $ (13,648) |
No. of Positions Held | Contract | 415 | 479 |
Fair Value | $ 17,279 | $ 114,035 |
Unrealized Losses | $ (426) | $ (3,467) |
No. of Positions Held | Contract | 11 | 59 |
Fair Value | $ 651,060 | $ 1,314,164 |
Unrealized Losses | (11,948) | (17,115) |
Utilities | Corporate bonds: | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 99,201 | 119,488 |
Unrealized Losses | $ (1,364) | $ (423) |
No. of Positions Held | Contract | 83 | 33 |
Fair Value | $ 511 | $ 10,391 |
Unrealized Losses | $ (2) | $ (787) |
No. of Positions Held | Contract | 1 | 6 |
Fair Value | $ 99,712 | $ 129,879 |
Unrealized Losses | (1,366) | (1,210) |
Commercial mortgage backed securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 280,918 | 71,780 |
Unrealized Losses | $ (6,488) | $ (1,654) |
No. of Positions Held | Contract | 74 | 56 |
Fair Value | $ 5,612 | $ 10,910 |
Unrealized Losses | $ (144) | $ (908) |
No. of Positions Held | Contract | 30 | 32 |
Fair Value | $ 286,530 | $ 82,690 |
Unrealized Losses | (6,632) | (2,562) |
Agency backed | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 718,098 | |
Unrealized Losses | $ (13,469) | |
No. of Positions Held | Contract | 216 | |
Fair Value | $ 8,144 | |
Unrealized Losses | $ (60) | |
No. of Positions Held | Contract | 26 | |
Fair Value | $ 726,242 | |
Unrealized Losses | (13,529) | |
Agency backed | Residential mortgage-backed securities: | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 393,883 | |
Unrealized Losses | $ (8,250) | |
No. of Positions Held | Contract | 210 | |
Fair Value | $ 2,281 | |
Unrealized Losses | $ (59) | |
No. of Positions Held | Contract | 22 | |
Fair Value | $ 396,164 | |
Unrealized Losses | (8,309) | |
Non-agency backed | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 24,372 | |
Unrealized Losses | $ (869) | |
No. of Positions Held | Contract | 21 | |
Fair Value | $ 4,462 | |
Unrealized Losses | $ (134) | |
No. of Positions Held | Contract | 6 | |
Fair Value | $ 28,834 | |
Unrealized Losses | (1,003) | |
Non-agency backed | Residential mortgage-backed securities: | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 2,638 | |
Unrealized Losses | $ (39) | |
No. of Positions Held | Contract | 15 | |
Fair Value | $ 60 | |
Unrealized Losses | $ (1) | |
No. of Positions Held | Contract | 2 | |
Fair Value | $ 2,698 | |
Unrealized Losses | (40) | |
Collateralized loan / debt obligations | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 87,951 | 97,923 |
Unrealized Losses | $ (436) | $ (433) |
No. of Positions Held | Contract | 37 | 37 |
Fair Value | $ 11,802 | $ 32,937 |
Unrealized Losses | $ (30) | $ (318) |
No. of Positions Held | Contract | 6 | 13 |
Fair Value | $ 99,753 | $ 130,860 |
Unrealized Losses | (466) | (751) |
Asset-backed securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 12,474 | 9,220 |
Unrealized Losses | $ (39) | $ (124) |
No. of Positions Held | Contract | 24 | 24 |
Fair Value | $ 4,434 | $ 4,926 |
Unrealized Losses | $ (162) | $ (136) |
No. of Positions Held | Contract | 7 | 12 |
Fair Value | $ 16,908 | $ 14,146 |
Unrealized Losses | $ (201) | $ (260) |
Investments (Trading Securities
Investments (Trading Securities) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Mar. 31, 2015 | |
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||||
Trading securities, cost basis | $ 98,277 | $ 28,142 | $ 76,163 | $ 29,353 |
Fair value | 100,258 | 29,891 | 81,960 | $ 30,560 |
Proceeds from sale of trading securities | 131,845 | $ 52,744 | ||
Net gains and losses recognized during the period on trading securities | (3,261) | 2,756 | ||
Less: Net gains and losses recognized during the period on trading securities sold during the period | 2,715 | 6,373 | ||
Unrealized gains and losses recognized during the reporting period on trading securities still held at the reporting date | (5,976) | (3,617) | ||
Common stock | ||||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||||
Trading securities, cost basis | 98,277 | 76,163 | ||
Gross unrealized gains | 7,417 | 9,842 | ||
Gross unrealized losses | (5,436) | (4,045) | ||
Fair value | 100,258 | 81,960 | ||
U.S. treasury securities | ||||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||||
Trading securities, cost basis | 27,314 | |||
Gross unrealized gains | 89 | |||
Gross unrealized losses | (21) | |||
Fair value | 27,382 | |||
Industrial | Corporate bonds: | ||||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||||
Trading securities, cost basis | 10,186 | 24,151 | ||
Gross unrealized gains | 607 | 4,379 | ||
Gross unrealized losses | (1,396) | 0 | ||
Fair value | 9,397 | 28,530 | ||
Utilities | Corporate bonds: | ||||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||||
Trading securities, cost basis | 19,560 | 4,930 | ||
Gross unrealized gains | 67 | 322 | ||
Gross unrealized losses | (2,253) | 0 | ||
Fair value | $ 17,374 | $ 5,252 |
Investments - Net Investment In
Investments - Net Investment Income (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | |
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Gross investment income | $ 65,352 | $ 49,490 | |
Investment expenses | 2,027 | 75 | |
Net investment income | 63,325 | 49,415 | $ 34,573 |
Fixed maturities, available-for-sale | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Gross investment income | 57,644 | 46,193 | |
Equity securities, available-for-sale | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Gross investment income | 1,337 | 2,364 | |
Equity securities, trading | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Gross investment income | 989 | (153) | |
Cash and short term investments | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Gross investment income | $ 5,382 | $ 1,086 |
Investments (Realized Gains and
Investments (Realized Gains and Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Gains | $ 22,264 | $ 15,075 |
Net Gains (Losses) | 11,630 | 5,272 |
Total of gross loss including write-downs | (13,649) | (7,100) |
Net gain and losses, including write-down | 8,615 | 7,975 |
Available-for-sale | Fixed maturities, available-for-sale | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Gains | 8,311 | 4,799 |
Gross Losses | (1,263) | (46) |
Net Gains (Losses) | 7,048 | 4,753 |
Available-for-sale | Equity securities, available-for-sale | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Gains | 5,223 | 660 |
Gross Losses | (641) | (141) |
Net Gains (Losses) | 4,582 | 519 |
Equity securities, trading | Fixed maturities, available-for-sale | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Gains | 2,374 | |
Gross Losses | (5,434) | |
Net Gains (Losses) | (3,060) | |
Equity securities, trading | Equity securities, available-for-sale | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Gains | 6,085 | 9,612 |
Gross Losses | (6,286) | (6,856) |
Net Gains (Losses) | (201) | 2,756 |
Other investments | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Gains | 271 | 4 |
Gross Losses | (25) | (57) |
Net Gains (Losses) | $ 246 | $ (53) |
Investments - Notional Amounts
Investments - Notional Amounts of Interest Rate Swaps by Remaining Maturity (Details) - Interest rate swaps $ in Thousands | Mar. 31, 2017USD ($) |
Schedule of Available-for-sale Securities [Line Items] | |
One Year | $ 0 |
Two Through Five Years | 7,334 |
Six Through Ten Years | 0 |
After Ten Years | 0 |
Total | $ 7,334 |
Investments - Fair Values of Re
Investments - Fair Values of Restricted Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Investments, Debt and Equity Securities [Abstract] | ||
Restricted cash and cash equivalents | $ 615,671 | $ 713,338 |
Restricted investments - fixed maturities at fair value | 2,288,016 | 2,126,216 |
Total restricted cash, cash equivalents, and investments | $ 2,903,687 | $ 2,839,554 |
Investments - Additional Inform
Investments - Additional Information (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017USD ($)agreementDerivativeInvestment | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($)agreementDerivativeInvestment | |
Investment [Line Items] | |||
Number of securities | Investment | 1,992 | 2,125 | |
Proceeds from the sale of investments in available-for-sale securities | $ 642,705 | $ 202,736 | |
Number of interest rate swaps | Derivative | 1 | 2 | |
Fair value of derivatives | $ 101 | $ 243 | |
Securities sold but not yet purchased, at fair value | $ 61,667 | $ 36,394 | |
Number of repurchase agreements | agreement | 20 | 13 | |
Equity and debt securities, at fair value | $ 294 | $ 160,270 | |
Held-to-maturity securities pledged as collateral | 348,693 | 175,700 | |
Financial instruments sold, not yet purchased, interest expense | 375 | ||
Equity securities, available-for-sale | |||
Investment [Line Items] | |||
Securities sold but not yet purchased, at fair value | $ 61,667 | $ 36,394 | |
Minimum | |||
Investment [Line Items] | |||
Stated interest rate (percentage) | 0.95% | 0.75% | |
Maximum | |||
Investment [Line Items] | |||
Stated interest rate (percentage) | 1.25% | 0.90% |
Fair Value of Financial Instr57
Fair Value of Financial Instruments - Assets and Financial Liabilities on Recurring Basis (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | $ 8,617,306 | $ 8,007,894 |
Fair Value of liabilities | 433,280 | 273,504 |
Equity securities sold but not yet purchased, market | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value of liabilities | 36,394 | |
Equity securities sold but not yet purchased, market | Fixed maturities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value of liabilities | 293,583 | 160,270 |
Equity securities sold but not yet purchased, market | Equity securities, available-for-sale | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value of liabilities | 61,667 | |
Life settlement contract profit commission | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value of liabilities | 5,599 | 4,940 |
Contingent consideration | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value of liabilities | 72,330 | 71,657 |
Derivatives | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value of liabilities | 101 | 243 |
U.S. treasury securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 359,128 | 330,654 |
U.S. government agencies | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 38,718 | 63,732 |
Municipal bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 906,250 | 854,170 |
Foreign government | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 166,575 | 152,876 |
Finance | Corporate bonds: | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 1,627,570 | 1,566,288 |
Industrial | Corporate bonds: | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 2,484,991 | 2,296,391 |
Utilities | Corporate bonds: | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 333,749 | 204,082 |
Commercial mortgage backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 471,922 | 177,994 |
Agency backed | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 927,444 | 1,210,385 |
Non-agency backed | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 5,103 | 61,229 |
Collateralized loan / debt obligations | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 628,788 | 484,405 |
Asset-backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 41,153 | 29,710 |
Life settlement contracts | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 397,493 | 356,856 |
Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 555,463 | 475,709 |
Fair Value of liabilities | 61,667 | 36,394 |
Level 1 | Equity securities sold but not yet purchased, market | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value of liabilities | 36,394 | |
Level 1 | Equity securities sold but not yet purchased, market | Fixed maturities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value of liabilities | 0 | 0 |
Level 1 | Equity securities sold but not yet purchased, market | Equity securities, available-for-sale | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value of liabilities | 61,667 | |
Level 1 | Life settlement contract profit commission | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value of liabilities | 0 | 0 |
Level 1 | Contingent consideration | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value of liabilities | 0 | 0 |
Level 1 | Derivatives | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value of liabilities | 0 | 0 |
Level 1 | U.S. treasury securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 359,128 | 330,654 |
Level 1 | U.S. government agencies | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 0 | 0 |
Level 1 | Municipal bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 0 | 0 |
Level 1 | Foreign government | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 31 | 0 |
Level 1 | Finance | Corporate bonds: | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 0 | 0 |
Level 1 | Industrial | Corporate bonds: | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 140 | 0 |
Level 1 | Utilities | Corporate bonds: | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 0 | 0 |
Level 1 | Commercial mortgage backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 0 | 0 |
Level 1 | Agency backed | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 0 | 0 |
Level 1 | Non-agency backed | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 0 | 0 |
Level 1 | Collateralized loan / debt obligations | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 0 | 0 |
Level 1 | Asset-backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 0 | 0 |
Level 1 | Life settlement contracts | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 0 | 0 |
Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 7,607,677 | 7,104,005 |
Fair Value of liabilities | 293,684 | 160,513 |
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 | |
Level 2 | Equity securities sold but not yet purchased, market | Fixed maturities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value of liabilities | 293,583 | 160,270 |
Level 2 | Equity securities sold but not yet purchased, market | Equity securities, available-for-sale | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value of liabilities | 0 | |
Level 2 | Life settlement contract profit commission | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value of liabilities | 0 | 0 |
Level 2 | Contingent consideration | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value of liabilities | 0 | 0 |
Level 2 | Derivatives | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value of liabilities | 101 | 243 |
Level 2 | U.S. treasury securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 0 | 0 |
Level 2 | U.S. government agencies | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 38,718 | 63,732 |
Level 2 | Municipal bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 906,250 | 854,170 |
Level 2 | Foreign government | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 164,337 | 149,298 |
Level 2 | Finance | Corporate bonds: | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 1,622,382 | 1,559,800 |
Level 2 | Industrial | Corporate bonds: | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 2,483,530 | 2,291,351 |
Level 2 | Utilities | Corporate bonds: | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 333,749 | 199,503 |
Level 2 | Commercial mortgage backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 448,278 | 177,994 |
Level 2 | Agency backed | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 927,444 | 1,186,315 |
Level 2 | Non-agency backed | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 5,103 | 58,109 |
Level 2 | Collateralized loan / debt obligations | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 628,788 | 484,405 |
Level 2 | Asset-backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 38,340 | 29,710 |
Level 2 | Life settlement contracts | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 0 | 0 |
Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 454,166 | 428,180 |
Fair Value of liabilities | 77,929 | 76,597 |
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 | |
Level 3 | Equity securities sold but not yet purchased, market | Fixed maturities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value of liabilities | 0 | 0 |
Level 3 | Equity securities sold but not yet purchased, market | Equity securities, available-for-sale | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value of liabilities | 0 | |
Level 3 | Life settlement contract profit commission | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value of liabilities | 5,599 | 4,940 |
Level 3 | Contingent consideration | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value of liabilities | 72,330 | 71,657 |
Level 3 | Derivatives | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value of liabilities | 0 | 0 |
Level 3 | U.S. treasury securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 0 | 0 |
Level 3 | U.S. government agencies | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 0 | 0 |
Level 3 | Municipal bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 0 | 0 |
Level 3 | Foreign government | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 2,207 | 3,578 |
Level 3 | Finance | Corporate bonds: | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 5,188 | 6,487 |
Level 3 | Industrial | Corporate bonds: | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 1,321 | 5,040 |
Level 3 | Utilities | Corporate bonds: | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 0 | 4,580 |
Level 3 | Commercial mortgage backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 23,644 | 0 |
Level 3 | Agency backed | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 0 | 24,070 |
Level 3 | Non-agency backed | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 0 | 3,120 |
Level 3 | Collateralized loan / debt obligations | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 0 | 0 |
Level 3 | Asset-backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 2,813 | 0 |
Level 3 | Life settlement contracts | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 397,493 | 356,856 |
Available-for-sale | Equity securities, available-for-sale | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 128,164 | 137,162 |
Available-for-sale | Level 1 | Equity securities, available-for-sale | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 100,023 | 66,228 |
Available-for-sale | Level 2 | Equity securities, available-for-sale | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 10,758 | 49,618 |
Available-for-sale | Level 3 | Equity securities, available-for-sale | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 17,383 | 21,316 |
Trading | Equity securities, available-for-sale | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 100,258 | 81,960 |
Trading | Level 1 | Equity securities, available-for-sale | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 96,141 | 78,827 |
Trading | Level 2 | Equity securities, available-for-sale | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | 0 | 0 |
Trading | Level 3 | Equity securities, available-for-sale | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets | $ 4,117 | $ 3,133 |
Fair Value of Financial Instr58
Fair Value of Financial Instruments - Changes in Fair Value of Level 3 Financial Assets And Liabilities (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Beginning Balance | $ 351,583 | $ 201,046 |
Net income | 33,815 | 21,635 |
Other comprehensive income | (469) | (11,673) |
Purchases and issuances | 22,049 | 2,434 |
Sales and settlements | (12,678) | 25,652 |
Net transfers into (out of) Level 3 | (18,063) | 0 |
Ending Balance | 376,237 | 239,094 |
Equity securities, trading | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Beginning Balance | 3,133 | |
Net income | (348) | |
Other comprehensive income | 0 | |
Purchases and issuances | 4,487 | |
Sales and settlements | (2,134) | |
Net transfers into (out of) Level 3 | (1,021) | |
Ending Balance | 4,117 | |
Equity securities, available-for-sale | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Beginning Balance | 21,316 | 37,211 |
Net income | 0 | 0 |
Other comprehensive income | 245 | (11,673) |
Purchases and issuances | 0 | 18 |
Sales and settlements | 0 | 0 |
Net transfers into (out of) Level 3 | (4,178) | 0 |
Ending Balance | 17,383 | 25,556 |
Fixed maturities, available-for-sale | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Beginning Balance | 46,875 | |
Net income | 0 | |
Other comprehensive income | (714) | |
Purchases and issuances | 2,339 | |
Sales and settlements | (463) | |
Net transfers into (out of) Level 3 | (12,864) | |
Ending Balance | 35,173 | |
Life settlement contracts | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Beginning Balance | 356,856 | 264,001 |
Net income | 35,495 | 30,629 |
Other comprehensive income | 0 | 0 |
Purchases and issuances | 15,223 | 0 |
Sales and settlements | (10,081) | (57) |
Net transfers into (out of) Level 3 | 0 | 0 |
Ending Balance | 397,493 | 294,573 |
Life settlement contract profit commission | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Beginning Balance | (4,940) | (15,406) |
Net income | (659) | (7,168) |
Other comprehensive income | 0 | 0 |
Purchases and issuances | 0 | 0 |
Sales and settlements | 0 | 15,406 |
Net transfers into (out of) Level 3 | 0 | 0 |
Ending Balance | (5,599) | (7,168) |
Contingent consideration | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Beginning Balance | (71,657) | (84,760) |
Net income | (673) | (1,826) |
Other comprehensive income | 0 | 0 |
Purchases and issuances | 0 | 2,416 |
Sales and settlements | 0 | 10,303 |
Net transfers into (out of) Level 3 | 0 | 0 |
Ending Balance | $ (72,330) | $ (73,867) |
Fair Value of Financial Instr59
Fair Value of Financial Instruments - Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Net income | $ 33,815 | $ 21,635 | |
Gain on investment in life settlement contracts | 8,610 | 10,730 | $ 11,373 |
Life settlement contracts | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Net income | 35,495 | 30,629 | |
Premiums paid | (25,274) | (12,102) | |
Other Expenses | (952) | (629) | |
Gain on investment in life settlement contracts | 8,610 | 10,730 | |
Life settlement contract profit commission | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Net income | $ (659) | $ (7,168) |
Fair Value of Financial Instr60
Fair Value of Financial Instruments -Fair Value of Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
6.125% Notes due 2023 (the 2023 Notes) | $ 248,253 | $ 248,185 |
Revolving credit facility | 130,000 | 130,000 |
Other | 191,152 | |
Fair Value | ||
Revolving credit facility | 130,000 | |
Other | 191,152 | |
7.25% Subordinated Notes due 2055 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Subordinated Debt | 145,234 | 145,202 |
7.50% Subordinated Notes due 2055 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Subordinated Debt | 130,711 | 130,684 |
2.75% Convertible senior notes due 2044 (the 2044 Notes) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible Notes Payable | 168,001 | 166,387 |
Junior subordinated debentures (the 2035-2037 Notes) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Junior subordinated debentures | 122,050 | 122,028 |
Trust preferred securities (the 2033-2037 TPS Notes) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Junior subordinated debentures | 92,786 | $ 92,786 |
Fair Value | ||
Fair Value | ||
6.125% Notes due 2023 | 254,220 | |
Republic promissory note | 79,520 | |
Fair Value | 7.25% Subordinated Notes due 2055 | ||
Fair Value | ||
7.25% Subordinated Notes due 2055 | 150,360 | |
Fair Value | 7.50% Subordinated Notes due 2055 | ||
Fair Value | ||
7.25% Subordinated Notes due 2055 | 134,784 | |
Fair Value | 2.75% Convertible senior notes due 2044 (the 2044 Notes) | ||
Fair Value | ||
2.75% Convertible senior notes due 2044 | 179,183 | |
Fair Value | Junior subordinated debentures (the 2035-2037 Notes) | ||
Fair Value | ||
Junior subordinated debentures | 100,220 | |
Fair Value | Trust preferred securities (the 2033-2037 TPS Notes) | ||
Fair Value | ||
Junior subordinated debentures | 92,735 | |
Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Republic promissory note | $ 78,514 |
Fair Value of Financial Instr61
Fair Value of Financial Instruments - Fair Value of Portfolio of Life Insurance Policies (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Life Settlement Contracts, Fair Value Method [Abstract] | ||
Average age of insured (in years) | 82 years 9 months 1 day | 82 years 9 months 1 day |
Average life expectancy, months (in months) | 104 months | 107 months |
Average face amount per policy | $ 6,680 | $ 6,572 |
Implicit discount rate (in percentage) | 12.90% | 12.40% |
Fair Value of Financial Instr62
Fair Value of Financial Instruments - Increase or (Decrease) in Carrying Value of Investment in Life Insurance Policies (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Life Settlement Contracts, Fair Value Method [Abstract] | ||
Life expectancy Plus 4 Months | $ 46,739 | $ 44,207 |
Life expectancy Minus 4 Months | 45,180 | 43,492 |
Discount Plus 1% | 32,447 | 29,881 |
Discount Minus 1% | $ 35,956 | $ 33,155 |
Fair Value of Financial Instr63
Fair Value of Financial Instruments - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Dec. 31, 2016 | Feb. 24, 2017 | Jan. 12, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt instrument, stated interest rate (in percentage) | 4.67% | 3.45% | ||
Implicit discount rate (in percentage) | 12.90% | 12.40% | ||
NGHC | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Percentage of ownership in NGHC (in percentage) | 12.00% | |||
7.25% Subordinated Notes due 2055 | Subordinated Notes | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt instrument, stated interest rate (in percentage) | 7.25% | |||
7.50% Subordinated Notes due 2055 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt instrument, stated interest rate (in percentage) | 7.50% | |||
2.75% Convertible senior notes due 2044 (the 2044 Notes) | Convertible Notes Payable | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt instrument, stated interest rate (in percentage) | 2.75% | |||
6.125% Notes due 2023 | Promissory Note | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt instrument, stated interest rate (in percentage) | 6.125% | |||
Minimum | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Implicit discount rate (in percentage) | 12.50% | |||
Maximum | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Implicit discount rate (in percentage) | 17.50% | |||
Carrying Value | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value of investment in NGHC | $ 292,139 | |||
Fair Value | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value of investment in NGHC | $ 157,103 | |||
Discounted Cash Flow Technique | Level 3 | Minimum | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investment discount rate (in percentage) | 8.00% | |||
Discounted Cash Flow Technique | Level 3 | Maximum | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investment discount rate (in percentage) | 30.00% |
Investment in Life Settlement64
Investment in Life Settlements - Additional Information (Detail) | 3 Months Ended | ||
Mar. 31, 2017USD ($)Entity | Mar. 31, 2016USD ($) | Mar. 31, 2015USD ($) | |
Schedule of Cost-method Investments [Line Items] | |||
Profits and losses of investment in life insurance policies and premium finance loans (in percentage) | 56.00% | ||
Gain on investment in life settlement contracts net of profit commission | $ 8,610,000 | $ 10,730,000 | $ 11,373,000 |
NGHC | |||
Schedule of Cost-method Investments [Line Items] | |||
Percentage of ownership (in percentage) | 12.00% | ||
LSC Entities | |||
Schedule of Cost-method Investments [Line Items] | |||
Percentage of ownership interest (in percentage) | 50.00% | ||
Number of entities with ownership interest | Entity | 3 | ||
Life settlement contracts | |||
Schedule of Cost-method Investments [Line Items] | |||
Capital contributions | $ 20,000,000 | ||
Life settlement contracts | AmTrust | |||
Schedule of Cost-method Investments [Line Items] | |||
Company contribution | $ 10,000 | ||
NGHC | LSC Entities | |||
Schedule of Cost-method Investments [Line Items] | |||
Percentage of ownership interest (in percentage) | 50.00% |
Investment in Life Settlement65
Investment in Life Settlements (Detail) $ in Thousands | Mar. 31, 2017USD ($)Contract | Dec. 31, 2016USD ($)Contract |
Number of Life Settlement Contracts | ||
0-1 | Contract | 0 | 0 |
1-2 | Contract | 2 | 2 |
2-3 | Contract | 7 | 7 |
3-4 | Contract | 13 | 10 |
4-5 | Contract | 14 | 10 |
Thereafter | Contract | 223 | 225 |
Total | Contract | 259 | 254 |
Fair Value | ||
0-1 | $ 0 | $ 0 |
1-2 | 9,019 | 8,873 |
2-3 | 43,007 | 39,495 |
3-4 | 39,085 | 37,436 |
4-5 | 39,182 | 34,003 |
Thereafter | 267,200 | 237,049 |
Total | 397,493 | 356,856 |
Face Value | ||
0-1 | 0 | 0 |
1-2 | 12,500 | 12,500 |
2-3 | 77,922 | 63,000 |
3-4 | 89,500 | 75,422 |
4-5 | 92,900 | 82,900 |
Thereafter | 1,433,413 | 1,405,414 |
Total | $ 1,706,235 | $ 1,639,236 |
Investment in Life Settlement66
Investment in Life Settlements - Additional Information (Footnotes) (Detail) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017USD ($)Contract | Dec. 31, 2016USD ($)Contract | Mar. 31, 2017policy | Dec. 31, 2016policy | |
Investments, All Other Investments [Abstract] | ||||
Life settlement contracts, number of contracts with fair value | Contract | 246 | 236 | ||
Total number of Life Settlement Contracts | Contract | 259 | 254 | ||
Number of policies with a negative value from discounted cash flow model as of period end | 13 | 18 | 13 | 18 |
Premiums paid for the preceding twelve month period for period ended | $ | $ 1,682 | $ 2,640 | ||
Death benefit received | $ | $ 0 | $ 0 |
Investment in Life Settlement67
Investment in Life Settlements - Premiums to be Paid (Detail) - Premiums Due On Life Settlement Contracts $ in Thousands | Mar. 31, 2017USD ($) |
Life Insurance Premiums and Related Investment Income [Line Items] | |
2,017 | $ 50,872 |
2,018 | 51,151 |
2,019 | 51,368 |
2,020 | 47,361 |
2,021 | 44,726 |
Thereafter | 513,283 |
Total | $ 758,761 |
Deferred Policy Acquisitions 68
Deferred Policy Acquisitions Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward] | ||
Beginning balance | $ 928,920 | $ 693,639 |
Acquisition costs deferred | 289,128 | 252,662 |
Amortization | (192,047) | (209,994) |
Ending balance | $ 1,026,001 | $ 736,307 |
Loss and loss adjustment expe69
Loss and loss adjustment expense reserves (Reconciliation of the beginning and ending balances for unpaid losses and LAE) (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Insurance [Abstract] | ||||
Liability for Unpaid Claims and Claims Adjustment Expense, Period Increase (Decrease) | $ 489,445 | $ 307,722 | ||
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||||
Loss and LAE, gross of related reinsurance recoverables at beginning of year | 10,140,716 | 7,208,367 | ||
Less: Reinsurance recoverables at beginning of year | 4,042,932 | 2,731,397 | $ 3,873,786 | $ 2,665,187 |
Net balance, beginning of year | 6,266,930 | 4,543,180 | ||
Incurred related to: | ||||
Current year | 821,483 | 639,122 | ||
Prior year | 18,851 | 75,951 | ||
Total incurred during the year | 840,334 | 715,073 | ||
Paid related to: | ||||
Current year | (135,865) | (93,864) | ||
Prior year | (612,860) | (478,987) | ||
Total paid during the year | (748,725) | (572,851) | ||
Loss portfolio transfers | 0 | 168,382 | ||
Acquired outstanding loss and loss adjustment reserves | 200,802 | 0 | ||
Effect of foreign exchange rates | (27,889) | 69,092 | ||
Net balance, end of year | 6,587,230 | 4,784,692 | ||
Plus reinsurance recoverables at end of year | 4,042,932 | 2,731,397 | $ 3,873,786 | $ 2,665,187 |
Loss and LAE, gross of related reinsurance recoverables at end of year | $ 10,630,162 | $ 7,516,089 |
Debt - Borrowings (Detail)
Debt - Borrowings (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Revolving credit facility | $ 130,000 | $ 130,000 |
6.125% Notes due 2023 (the 2023 Notes) | 248,253 | 248,185 |
Secured loan agreements | 171,842 | 75,762 |
Promissory notes | 92,566 | 118,643 |
Total debt | 1,306,701 | 1,234,900 |
5.5% Convertible senior notes due 2021 (the 2021 Notes) | ||
Debt Instrument [Line Items] | ||
Convertible senior notes | 5,258 | 5,223 |
2.75% Convertible senior notes due 2044 (the 2044 Notes) | ||
Debt Instrument [Line Items] | ||
Convertible senior notes | 168,001 | 166,387 |
Junior subordinated debentures (the 2035-2037 Notes) | ||
Debt Instrument [Line Items] | ||
Junior subordinated debentures (the 2035-2037 Notes) | 122,050 | 122,028 |
Trust preferred securities (the 2033-2037 TPS Notes) | ||
Debt Instrument [Line Items] | ||
Junior subordinated debentures (the 2035-2037 Notes) | 92,786 | 92,786 |
7.25% Subordinated Notes due 2055 | ||
Debt Instrument [Line Items] | ||
Subordinate Notes due 2055 | 145,234 | 145,202 |
7.50% Subordinated Notes due 2055 | ||
Debt Instrument [Line Items] | ||
Subordinate Notes due 2055 | $ 130,711 | $ 130,684 |
Debt - Aggregate Scheduled Matu
Debt - Aggregate Scheduled Maturities of Borrowings (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Mar. 31, 2015 |
Debt Disclosure [Abstract] | ||||
2,017 | $ 4,833 | |||
2,018 | 32,933 | |||
2,019 | 161,115 | |||
2,020 | 26,932 | |||
2,021 | 15,277 | |||
Thereafter | 1,081,517 | |||
Total scheduled payments | 1,322,607 | |||
Unamortized deferred origination costs | (15,906) | $ (161,616) | $ (12,295) | |
Total debt | $ 1,306,701 | $ 1,234,900 |
Debt - Aggregate Scheduled Ma72
Debt - Aggregate Scheduled Maturities of Borrowings (Footnotes) (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2008 | Apr. 30, 2008 | Dec. 31, 2007 |
Debt Instrument [Line Items] | |||||
Due in March 2017 | $ 4,833 | ||||
Note payable on collateral loan – related party | 167,975 | $ 167,975 | |||
Senior Notes | 2.75% Convertible senior notes due 2044 (the 2044 Notes) | |||||
Debt Instrument [Line Items] | |||||
Unamortized OID | 45,560 | ||||
Maiden Reinsurance Company | |||||
Debt Instrument [Line Items] | |||||
Due in March 2017 | 113,542 | ||||
Due in April 2018 | 20,192 | ||||
Due in June 2018 | 34,240 | ||||
Note payable on collateral loan – related party | $ 705 | $ 34,240 | $ 20,192 | $ 113,542 |
Debt - Credit Facilities (Detai
Debt - Credit Facilities (Details) - Line of Credit | Mar. 31, 2017USD ($) |
Revolving credit facility | |
Line of Credit Facility [Line Items] | |
Letters of Credit Limit | $ 175,000,000 |
Letters of Credit Outstanding | 173,252,000 |
Letters of Credit Available | 1,748,000 |
Other letters of credit, in aggregate | |
Line of Credit Facility [Line Items] | |
Letters of Credit Limit | 101,836,000 |
Letters of Credit Outstanding | 101,836,000 |
Letters of Credit Available | 0 |
Lloyds | Letter of Credit | |
Line of Credit Facility [Line Items] | |
Letters of Credit Limit | 645,656,000 |
Letters of Credit Outstanding | 635,394,000 |
Letters of Credit Available | 10,262,000 |
ING Bank N.V. and Deutsche Bank Netherlands N.V. facilities, in USD equivalent | Letter of Credit | |
Line of Credit Facility [Line Items] | |
Letters of Credit Limit | 81,852,000 |
Letters of Credit Outstanding | 68,070,000 |
Letters of Credit Available | 13,782,000 |
Comerica bank letters of credit | Letter of Credit | |
Line of Credit Facility [Line Items] | |
Letters of Credit Limit | 75,000,000 |
Letters of Credit Outstanding | 43,067,000 |
Letters of Credit Available | 31,933,000 |
UniCredit Bank | Letter of Credit | |
Line of Credit Facility [Line Items] | |
Letters of Credit Limit | 100,000,000 |
Letters of Credit Outstanding | 100,000,000 |
Letters of Credit Available | $ 0 |
Debt - Interest Expense (Detail
Debt - Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | ||||
Interest expense (net of interest income) | $ 23,601 | $ 15,874 | $ 12,081 | |
Convertible Notes Payable | ||||
Debt Instrument [Line Items] | ||||
Interest expense (net of interest income) | 3,225 | $ 3,116 | ||
Convertible Notes Payable | 2021 Notes | ||||
Debt Instrument [Line Items] | ||||
Interest expense (net of interest income) | 117 | 115 | ||
Senior Notes | 2023 Notes | ||||
Debt Instrument [Line Items] | ||||
Interest expense (net of interest income) | 3,897 | 3,897 | ||
Convertible Debt | 2035-2037 Notes | ||||
Debt Instrument [Line Items] | ||||
Interest expense (net of interest income) | 1,468 | 1,515 | ||
Junior Subordinated Debt | 2033-2037 TPS Notes | ||||
Debt Instrument [Line Items] | ||||
Interest expense (net of interest income) | 1,031 | 0 | ||
Subordinated Debt | 7.25% 2055 Notes | ||||
Debt Instrument [Line Items] | ||||
Interest expense (net of interest income) | 2,750 | 2,750 | ||
Subordinated Debt | 7.50% 2055 Notes | ||||
Debt Instrument [Line Items] | ||||
Interest expense (net of interest income) | 2,559 | 2,559 | ||
Secured loan agreements | ||||
Debt Instrument [Line Items] | ||||
Interest expense (net of interest income) | 1,334 | 189 | ||
Promissory notes | ||||
Debt Instrument [Line Items] | ||||
Interest expense (net of interest income) | 1,663 | 158 | ||
Other | ||||
Debt Instrument [Line Items] | ||||
Interest expense (net of interest income) | 2,568 | (780) | ||
Revolving credit facility | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Interest expense (net of interest income) | 1,510 | 1,156 | ||
Lloyds | Funds at Lloyd's facility | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Interest expense (net of interest income) | $ 1,479 | $ 1,199 |
Debt - Secured Loan Agreement (
Debt - Secured Loan Agreement (Details) | Jan. 12, 2017 | Mar. 31, 2017USD ($) | Feb. 24, 2017USD ($) | Jan. 12, 2016USD ($) | Jan. 12, 2016EUR (€) |
Debt Instrument [Line Items] | |||||
Term of the debt instrument (in years) | 10 years | ||||
Debt instrument, face amount | $ 11,350,000 | $ 92,147,000 | € 73,500,000 | ||
Debt instrument, stated interest rate (in percentage) | 3.45% | 4.67% | |||
Monthly interest expense | $ 64,000 | ||||
Secured loan agreements | |||||
Debt Instrument [Line Items] | |||||
Term of the debt instrument (in years) | 10 years | ||||
Debt instrument, face amount | $ 29,000,000 |
Acquisition Costs and Other U76
Acquisition Costs and Other Underwriting Expenses (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | |
Acquisition Costs and Other Underwriting Expenses [Abstract] | |||
Policy acquisition expenses | $ 137,386 | $ 148,665 | |
Salaries and benefits | 171,377 | 117,821 | |
Other insurance general and administrative expenses | 19,452 | 5,982 | |
Acquisition costs and other underwriting expenses | $ 328,215 | $ 272,468 | $ 232,781 |
Earnings Per Share - Summary of
Earnings Per Share - Summary of Elements Used in Calculating Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | |
Basic earnings per share: | |||
Net income attributable to AmTrust common stockholders | $ 22,632 | $ 83,978 | $ 133,517 |
Weighted average common shares outstanding - basic (in shares) | 170,864 | 175,585 | 162,336 |
Net income per AmTrust common share - basic (usd per share) | $ 0.13 | $ 0.48 | $ 0.82 |
Diluted earnings per share: | |||
Net income allocated to AmTrust Financial Services, Inc. common shareholders | $ 22,632 | $ 83,978 | |
Weighted average common shares outstanding - basic (in shares) | 170,864 | 175,585 | 162,336 |
Plus: Dilutive effect of stock options, convertible debt, other (in shares) | 1,828 | 2,342 | |
Weighted average common shares outstanding - dilutive (in shares) | 172,692 | 177,927 | 166,874 |
Net income per AmTrust common shares – diluted (usd per share) | $ 0.13 | $ 0.47 | $ 0.80 |
Share Based Compensation - Addi
Share Based Compensation - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2010 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock based compensation | $ 5,818 | $ 5,641 | $ 4,914 | $ 5,641 | ||
Stock options, expiration term (in years) | 10 years | |||||
Share based award, vesting period (in years) | 4 years | |||||
Exercise period of vested option after employment relationship end (in months) | 3 months | |||||
Weighted average expected lives in years (in years) | 3 years | 3 years 1 month 6 days | ||||
Proceeds from stock options exercised | $ 3,022 | 813 | ||||
Omnibus Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized for stock award, maximum (in shares) | 14,630,136 | |||||
Common stock remained available for grants (in shares) | 7,000,000 | |||||
Restricted Stock Units (RSUs) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized compensation cost | $ 39,528 | $ 44,975 | ||||
Restricted Stock Units (RSUs) | Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share based award, vesting period (in years) | 1 year | |||||
Restricted Stock Units (RSUs) | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share based award, vesting period (in years) | 4 years | |||||
Employee Stock Option | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Intrinsic value of the stock option exercised | $ 10,069 | 4,561 | ||||
Intrinsic value of stock options | 18,963 | $ 45,812 | ||||
Intrinsic value of the stock option exercisable | 18,934 | 45,506 | ||||
Excess tax benefit from award exercised | $ 391 | $ 1,539 | ||||
Restricted Stock Units and Performance Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Weighted average remaining life (in years) | 1 year 3 months 18 days | 1 year 4 months 17 days |
Share Based Compensation - Sche
Share Based Compensation - Schedule of Option Granted, Exercised and Expired (Detail) - $ / shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Shares | ||
Outstanding at beginning of period (shares) | 2,305,351 | 2,783,880 |
Granted (shares) | 0 | 0 |
Exercised (shares) | (556,252) | (210,018) |
Canceled or terminated (shares) | 0 | 0 |
Outstanding end of period (shares) | 1,749,099 | 2,573,862 |
Weighted Average Exercise Price | ||
Outstanding at beginning of period (usd per share) | $ 7.54 | $ 6.99 |
Granted (usd per share) | 0 | 0 |
Exercised (usd per share) | 5.43 | 3.87 |
Canceled or terminated (usd per share) | 0 | 0 |
Outstanding end of period (usd per share) | $ 8.21 | $ 7.24 |
Share Based Compensation - Summ
Share Based Compensation - Summary of RSU and PSU (Detail) - $ / shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Restricted Stock and Restricted Stock Unit | ||
Shares or Units | ||
Non-vested at beginning of period (shares) | 1,965,011 | 1,853,516 |
Granted (shares) | 20,157 | 250,038 |
Vested (shares) | (298,427) | (447,198) |
Forfeited (shares) | (8,383) | (25,264) |
Non-vested at end of period (shares) | 1,678,358 | 1,631,092 |
Weighted-Average Grant Date Fair Value | ||
Non-vested at beginning of period (usd per share) | $ 24.38 | $ 20.54 |
Granted (usd per share) | 23.03 | 25.73 |
Vested (usd per share) | 20.84 | 15.78 |
Forfeited (usd per share) | 25.81 | 24.11 |
Non-vested at end of period (usd per share) | $ 24.99 | $ 22.58 |
Performance Share Units | ||
Shares or Units | ||
Non-vested at beginning of period (shares) | 680,597 | 752,466 |
Granted (shares) | 11,917 | 0 |
Vested (shares) | 0 | 0 |
Forfeited (shares) | (6,116) | (914) |
Non-vested at end of period (shares) | 686,398 | 751,552 |
Weighted-Average Grant Date Fair Value | ||
Non-vested at beginning of period (usd per share) | $ 25.57 | $ 24.58 |
Granted (usd per share) | 23.03 | 0 |
Vested (usd per share) | 0 | 0 |
Forfeited (usd per share) | 26.63 | 22.60 |
Non-vested at end of period (usd per share) | $ 25.51 | $ 24.58 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Statutory Federal Income Tax Rate to Effective Tax Rate (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Income before equity in earnings of unconsolidated subsidiaries | $ 67,607 | $ 109,970 | $ 173,933 |
Tax at federal statutory rate of 35% | 23,662 | 38,490 | |
Foreign rate differential | (10,909) | (17,320) | |
Adjustment to prior year taxes | 1,407 | 147 | |
Permanent adjustments | 5,676 | (4,473) | |
Valuation allowance | 1,951 | (511) | |
Other, net | (431) | 2,627 | |
Provision for income taxes | $ 21,356 | $ 18,960 | $ 36,493 |
Effective tax rate | 31.60% | 17.20% |
Income Taxes - Reconciliation82
Income Taxes - Reconciliation of Statutory Federal Income Tax Rate to Effective Tax Rate (Footnotes) (Detail) | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Federal statutory rate | 35.00% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards, limitation on use per year | $ 9,084,000 | |
Operating loss carryforwards, valuation allowance | 147,194,000 | $ 142,462,000 |
Domestic Tax Authority | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | $ 26,338,000 | |
Foreign Tax Authority | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | $ 808,549,000 |
Related Party Transactions (Mai
Related Party Transactions (Maiden) (Details) | Jul. 01, 2017 | Jul. 01, 2016 | Apr. 30, 2011 | Mar. 31, 2017USD ($)director | Mar. 31, 2016USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2007USD ($) | Sep. 30, 2007USD ($) | Jun. 30, 2016 | Dec. 31, 2016USD ($) | Dec. 31, 2012 | Apr. 01, 2011 | Jun. 30, 2008USD ($) | Apr. 30, 2008USD ($) |
Related Party Transaction [Line Items] | ||||||||||||||
Reinsurance recoverable | $ 4,509,509,000 | $ 3,097,192,000 | $ 2,544,549,000 | $ 4,329,521,000 | ||||||||||
Note payable on collateral loan – related party | 167,975,000 | $ 167,975,000 | ||||||||||||
Brokerage commission | $ 137,496,000 | 128,805,000 | $ 102,119,000 | |||||||||||
Maiden Reinsurance Company | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Number of Company's Principal Stockholders' | director | 2 | |||||||||||||
Number of DIrectors | director | 1 | |||||||||||||
Percentage of capital stock (in percentage) | 7.90% | |||||||||||||
Ceding commission percentage of ceded written premiums (in percentage) | 5.00% | |||||||||||||
Period to notify cancellation of contract (in months) | 4 years | |||||||||||||
Percentage of ceding commission (in percentage) | 32.50% | 40.00% | ||||||||||||
Term of reinsurance agreement (in years) | 1 year | |||||||||||||
Reinsurance ceded profit ratio (in percentage) | 50.00% | |||||||||||||
Assets managed under asset management agreement | $ 4,815,565,000 | |||||||||||||
Maiden | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Percentage of reinsurance brokerage commissions (in percentage) | 1.25% | |||||||||||||
Brokerage commission | $ 4,160,000 | 6,862,000 | ||||||||||||
Investment management fee | $ 1,823,000 | 1,645,000 | ||||||||||||
AII | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Premiums, percentage assumed to net (in percentage) | 40.00% | |||||||||||||
Percentage of reinsurance related losses assumed (in percentage) | 40.00% | |||||||||||||
Ceding commission percentage of ceded written premiums (in percentage) | 31.00% | |||||||||||||
Extension period of reinsurance agreement term (in years) | 3 years | |||||||||||||
Period to notify cancellation of contract (in months) | 9 months | |||||||||||||
Termination notice period (in days) | 30 days | |||||||||||||
Increase (decrease) in stockholders equity, or more (in percentage) | (50.00%) | |||||||||||||
Interest rate ( in percentage) | 0.90% | |||||||||||||
Interest expense on collateral loan | $ 712,000 | $ 562,000 | ||||||||||||
Chief Executive Officer | Maiden Reinsurance Company | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Percentage of capital stock (in percentage) | 7.50% | |||||||||||||
Minimum | Maiden Reinsurance Company | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Asset management services fee percentage (in percentage) | 0.15% | |||||||||||||
Minimum | AII | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Reinsurance recoverable | $ 5,000,000 | |||||||||||||
Minimum | Maiden | AII | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Reinsurance ceded loss ratio (in percentage) | 81.50% | |||||||||||||
Maximum | Maiden Reinsurance Company | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Reinsurance ceded loss ratio (in percentage) | 65.00% | |||||||||||||
Asset management services fee percentage (in percentage) | 0.20% | |||||||||||||
Average value of assets under management | $ 1,000,000,000 | |||||||||||||
Maximum | Maiden | AII | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Reinsurance ceded loss ratio (in percentage) | 95.00% | |||||||||||||
Retail Business | Maiden | AII | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Ceding commission percentage of ceded written premiums (in percentage) | 34.375% | |||||||||||||
Maiden Reinsurance Company | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Note payable on collateral loan – related party | 705,000 | $ 113,542,000 | $ 34,240,000 | $ 20,192,000 | ||||||||||
Maiden Reinsurance Company | AII | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Collateral debt issued by maiden insurance | $ 3,146,767,000 | |||||||||||||
Scenario, Forecast [Member] | Maiden Reinsurance Company | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Percentage of ceding commission (in percentage) | 20.00% |
Related Party Transactions (Res
Related Party Transactions (Results of Operations Related to Reinsurance Agreements) (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | |
Related Party Transaction [Line Items] | |||
Change in unearned premium | $ (121,534) | $ (146,397) | $ (93,812) |
Ceding commission - earned | 138,391 | ||
Incurred loss and loss adjustment expense - ceded | 840,334 | 715,073 | $ 613,283 |
Maiden | |||
Related Party Transaction [Line Items] | |||
Premium written - ceded | (586,913) | (543,688) | |
Change in unearned premium | 76,798 | 86,698 | |
Earned premium - ceded | (510,115) | (456,990) | |
Ceding commission on premium written | 185,653 | 174,334 | |
Ceding commission – deferred | (31,951) | (35,943) | |
Ceding commission - earned | 153,702 | 138,391 | |
Incurred loss and loss adjustment expense - ceded | $ 420,556 | $ 354,854 |
Related Party Transactions (NGH
Related Party Transactions (NGHC) (Details) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2017USD ($)companyshareholder | Mar. 31, 2016USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2016 | Aug. 31, 2011 | |
Related Party Transaction [Line Items] | |||||
Number of Insurance Companies | company | 22 | ||||
Number of shareholder | shareholder | 2 | ||||
Equity in earnings of unconsolidated subsidiaries – related parties | $ 3,957 | $ 6,145 | $ 5,529 | ||
Service and fee income | $ 137,496 | 128,805 | $ 102,119 | ||
NGHC | |||||
Related Party Transaction [Line Items] | |||||
Percentage of ownership in NGHC (in percentage) | 12.00% | ||||
Equity in earnings of unconsolidated subsidiaries – related parties | $ 3,957 | 5,776 | |||
License fee percentage (in percentage) | 1.25% | ||||
Developmental services (in percentage) | 20.00% | ||||
Technology services fee income | $ 11,786 | 9,910 | |||
Assets managed under asset management agreement | 3,309,795 | ||||
Investment management fee | 1,079 | 793 | |||
Acquisition price | $ 7,500 | ||||
Contribution towards payment for guaranties (in percentage) | 50.00% | ||||
Service and fee income | $ 527 | 341 | |||
Percentage of Payment | 50.00% | ||||
Maximum | NGHC | |||||
Related Party Transaction [Line Items] | |||||
Asset management services fee percentage (in percentage) | 0.20% | ||||
Average value of assets under management | $ 1,000,000 | ||||
Minimum | NGHC | |||||
Related Party Transaction [Line Items] | |||||
Asset management services fee percentage (in percentage) | 0.15% | ||||
Average value of assets under management | $ 1,000,000 | ||||
800 Superior LLC | |||||
Related Party Transaction [Line Items] | |||||
Percentage of ownership interest (in percentage) | 50.00% | ||||
800 Superior LLC | NGHC | |||||
Related Party Transaction [Line Items] | |||||
Percentage of ownership interest (in percentage) | 50.00% | ||||
Office lease expenses | $ 703 | $ 683 | |||
4455 LBJ Freeway, LLC | NGHC | |||||
Related Party Transaction [Line Items] | |||||
Percentage of ownership interest (in percentage) | 12.00% | ||||
Acquisition price | $ 21,050 | ||||
Percentage of profits and losses (in percentage) | 56.00% |
Related Party Transactions (ACP
Related Party Transactions (ACP Re. Ltd) (Details) - USD ($) | Sep. 26, 2017 | Sep. 15, 2014 | Mar. 31, 2017 | Mar. 31, 2016 | Feb. 24, 2017 | Jan. 12, 2017 | Dec. 31, 2016 | Sep. 21, 2016 |
Related Party Transaction [Line Items] | ||||||||
Revolving credit facility | $ 130,000,000 | $ 130,000,000 | ||||||
Debt instrument, stated interest rate (in percentage) | 4.67% | 3.45% | ||||||
Interest income | 1,580,000 | $ 2,188,000 | ||||||
ACP Re, Ltd | ||||||||
Related Party Transaction [Line Items] | ||||||||
Assets managed under asset management agreement | 385,931,000 | |||||||
Management fees | $ 210,000 | 231,000 | ||||||
Related Party Transaction, Percentage of Principle Due | 2.00% | |||||||
Loans receivable | $ 126,580,000 | $ 127,188,000 | ||||||
Interest income | $ 1,159,000 | $ 2,188,000 | ||||||
ACP Re, Ltd | AII | ||||||||
Related Party Transaction [Line Items] | ||||||||
Revolving credit facility | $ 125,000,000 | $ 250,000,000 | ||||||
Debt instrument, stated interest rate (in percentage) | 3.70% | |||||||
Interest rate, paid in kind (in percentage) | 1.20% | |||||||
Asset to be maintained, percentage of the value (in percentage) | 115.00% | |||||||
Change in ownership, percentage (in percentage) | 50.00% | |||||||
ACP Re, Ltd | AmTrust | ||||||||
Related Party Transaction [Line Items] | ||||||||
Annual fees | $ 30,000 | |||||||
ACP Re, Ltd | Scenario 1 | ||||||||
Related Party Transaction [Line Items] | ||||||||
Asset management services fee percentage (in percentage) | 0.20% | |||||||
ACP Re, Ltd | Scenario 2 | Maximum | ||||||||
Related Party Transaction [Line Items] | ||||||||
Average value of assets under management | $ 1,000,000,000 | |||||||
ACP Re, Ltd | Scenario 3 | ||||||||
Related Party Transaction [Line Items] | ||||||||
Asset management services fee percentage (in percentage) | 0.15% | |||||||
ACP Re, Ltd | Scenario 3 | Minimum | ||||||||
Related Party Transaction [Line Items] | ||||||||
Average value of assets under management | $ 1,000,000,000 | |||||||
ACP Re, Ltd | Scenario, Forecast [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related Party Transaction, Contribution Paid | $ 200,000,000 |
Related Party Transactions - Ad
Related Party Transactions - Additional information (Detail) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Aug. 31, 2015USD ($) | Feb. 28, 2015USD ($) | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2016USD ($) | Sep. 15, 2014USD ($) | |
Related Party Transaction [Line Items] | |||||||
Long-term Line of Credit | $ 130,000 | $ 130,000 | |||||
Equity in earnings of unconsolidated subsidiary – related party | 3,957 | $ 6,145 | $ 5,529 | ||||
59 Maiden Lane Associates, LLC | |||||||
Related Party Transaction [Line Items] | |||||||
Lease payments | 472 | 382 | |||||
33 West Monroe Associates, LLC | |||||||
Related Party Transaction [Line Items] | |||||||
Lease payments | 100 | 132 | |||||
North Dearborn Building Company, L.P. | |||||||
Related Party Transaction [Line Items] | |||||||
Limited partnership interest | $ 9,700 | ||||||
Ownership interest, LP | 45.00% | ||||||
Equity in earnings of unconsolidated subsidiary – related party | 318 | 273 | |||||
NGHC | |||||||
Related Party Transaction [Line Items] | |||||||
Equity in earnings of unconsolidated subsidiary – related party | 3,957 | 5,776 | |||||
Aircraft rental and landing fees | 103 | ||||||
Maiden | |||||||
Related Party Transaction [Line Items] | |||||||
Aircraft rental and landing fees | 13 | ||||||
NG Re Ltd. | ACP Re, Ltd | |||||||
Related Party Transaction [Line Items] | |||||||
Long-term Line of Credit | $ 125,000 | ||||||
ACP Re, Ltd | Illinois Center Building | |||||||
Related Party Transaction [Line Items] | |||||||
Ownership interest, LP | 15.00% | ||||||
Equity in earnings of unconsolidated subsidiary – related party | 448 | 593 | |||||
NGHC | North Dearborn Building Company, L.P. | |||||||
Related Party Transaction [Line Items] | |||||||
Limited partnership interest | $ 9,700 | ||||||
Ownership interest, LP | 45.00% | ||||||
NGHC | Illinois Center Building | |||||||
Related Party Transaction [Line Items] | |||||||
Ownership interest, LP | 37.50% | ||||||
NA Advisors GP LLC | North Dearborn Building Company, L.P. | |||||||
Related Party Transaction [Line Items] | |||||||
Limited partnership interest | $ 2,200 | ||||||
NA Advisors GP LLC | Illinois Center Building | |||||||
Related Party Transaction [Line Items] | |||||||
Limited partnership interest | $ 53,715 | ||||||
Ownership interest, GP | 10.00% | ||||||
Profit interest, GP | 0.1 | ||||||
Chief Operating Officer | Maiden | |||||||
Related Party Transaction [Line Items] | |||||||
Aircraft rental and landing fees | 196 | $ 80 | |||||
Variable Interest Entity, Not Primary Beneficiary, Aggregated Disclosure | Other investments | |||||||
Related Party Transaction [Line Items] | |||||||
VIE, Carrying amount, assets and liabilities, net | 73,094 | 72,328 | |||||
Maximum loss exposure, amount | $ 73,094 | $ 72,328 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) - USD ($) $ in Thousands | Feb. 28, 2017 | Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 |
Business Acquisition [Line Items] | ||||
Gross written premium | $ 2,266,280 | $ 1,933,074 | ||
Service and fee income | 137,496 | $ 128,805 | $ 102,119 | |
AmeriHealth Casualty Insurance Company | ||||
Business Acquisition [Line Items] | ||||
Percentage of voting Interests acquired (in percentage) | 100.00% | |||
Acquisition price | $ 92,786 | |||
Reserve guarantee amount | $ 40,000 | 25,000 | ||
Reserve guarantee amount, subject to percentage loss corridor retained (percentage) | 10.00% | |||
Reserve guarantee (in years) | 5 years | |||
Gross written premium | 5,636 | |||
Service and fee income | 971 | |||
Series of Individually Immaterial Business Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Acquisition price | $ 2,103 |
Acquisitions - Purchase Price A
Acquisitions - Purchase Price Allocation (Details) - AmeriHealth Casualty Insurance Company $ in Thousands | Feb. 28, 2017USD ($) |
Business Acquisition [Line Items] | |
Cash and investments | $ 275,351 |
Premium receivables | 46,253 |
Accrued interest and dividends | 1,162 |
Reinsurance recoverable | 16,455 |
Other assets | 31,437 |
Goodwill and intangible assets | 13,976 |
Total assets | 384,634 |
Loss and loss expense reserves | 214,981 |
Unearned premiums | 49,284 |
Accrued expenses and other liabilities | 27,583 |
Total liabilities | 291,848 |
Acquisition price | $ 92,786 |
New Market Tax Credit (Details)
New Market Tax Credit (Details) $ in Thousands | Jan. 12, 2017 | Sep. 30, 2012 | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2012USD ($)loanCDE |
Schedule of Tax Credit [Line Items] | |||||
Repurchase agreements, net | $ 133,313 | $ 0 | |||
Percentage of qualified investment income that can be claimed at tax credit against their federal income taxes | 39.00% | ||||
Term of the debt instrument (in years) | 10 years | ||||
NGHC | |||||
Schedule of Tax Credit [Line Items] | |||||
Ownership percentage | 12.00% | ||||
800 Superior LLC | |||||
Schedule of Tax Credit [Line Items] | |||||
Number of CDE | CDE | 2 | ||||
800 Superior LLC | NGHC | |||||
Schedule of Tax Credit [Line Items] | |||||
Total benefit a company is entitled to receive | 49.00% | ||||
AmTrust | 800 Superior LLC | |||||
Schedule of Tax Credit [Line Items] | |||||
Total benefit a company is entitled to receive | 49.00% | ||||
State and Local Government of Ohio | 800 Superior LLC | |||||
Schedule of Tax Credit [Line Items] | |||||
Repurchase agreements, net | $ 8,000 | ||||
Number of loans | loan | 2 | ||||
Parent, NGHC, KCDC and State and Local Government of Ohio | 800 Superior LLC | |||||
Schedule of Tax Credit [Line Items] | |||||
Repurchase agreements, net | $ 19,400 | ||||
Key Community Development Corporation | 800 Superior LLC | |||||
Schedule of Tax Credit [Line Items] | |||||
Total benefit a company is entitled to receive | 51.00% | ||||
Community Development Entities (CDE) | 800 Superior LLC | |||||
Schedule of Tax Credit [Line Items] | |||||
Period to recapture | 7 years | ||||
Promissory Note | State and Local Government of Ohio | 800 Superior LLC | |||||
Schedule of Tax Credit [Line Items] | |||||
Term of the debt instrument (in years) | 15 years | ||||
Average rate of interest | 2.00% |
Shareholder's Equity and Accumu
Shareholder's Equity and Accumulated Other Comprehensive Income (Loss) - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | |
Class of Stock [Line Items] | |||
Net Income (Loss), Including Portion Attributable to Nonredeemable Noncontrolling Interest | $ 49,923 | $ 96,626 | |
Net income attributable to non-controlling interest and redeemable non-controlling interest of subsidiaries | (11,005) | (4,017) | $ (4,083) |
Non-Controlling Interest | |||
Class of Stock [Line Items] | |||
Net Income (Loss), Including Portion Attributable to Nonredeemable Noncontrolling Interest | $ 10,720 | $ 3,857 |
Shareholder's Equity and Accu93
Shareholder's Equity and Accumulated Other Comprehensive Income (Loss) - Ownership Components of Total Equity (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | $ 3,465,613 | $ 2,900,235 | ||
Net income | 49,923 | 96,626 | ||
Unrealized holding gain | 25,591 | 82,973 | $ 8,192 | |
Reclassification adjustment | (11,630) | (428) | (415) | |
Foreign currency translation | 13,863 | (47,194) | ||
Unrealized gain on interest rate swap | 92 | 119 | 27 | |
Share exercises, compensation and other | 5,911 | 2,686 | ||
Common share purchase, net | 0 | (14,391) | ||
Common stock dividends | (29,107) | (26,313) | ||
Preferred stock dividends | (16,571) | (8,791) | $ (5,369) | |
Capital contribution, net | 8,638 | 0 | ||
Ending Balance | 3,512,323 | 3,124,592 | $ 2,487,829 | 2,900,235 |
Non-Controlling Interest | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | 196,510 | 176,455 | ||
Net income | 10,720 | 3,857 | ||
Capital contribution, net | 8,638 | 0 | ||
Ending Balance | 215,868 | 180,312 | 176,455 | |
AmTrust | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | 3,269,103 | 2,723,780 | ||
Net income | 39,203 | 92,769 | ||
Unrealized holding gain | 25,591 | 82,973 | ||
Reclassification adjustment | (11,630) | (428) | ||
Foreign currency translation | 13,863 | (47,194) | ||
Unrealized gain on interest rate swap | 92 | 119 | ||
Share exercises, compensation and other | 5,911 | 2,686 | ||
Common stock dividends | (29,107) | (26,313) | ||
Preferred stock dividends | (16,571) | (8,791) | ||
Ending Balance | 3,296,455 | 2,944,280 | $ 2,723,780 | |
Preferred stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Preferred stock issuance, net of fees | 0 | 139,070 | ||
Preferred stock | AmTrust | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Preferred stock issuance, net of fees | 0 | 139,070 | ||
Common stock | AmTrust | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Common share purchase, net | $ 0 | $ (14,391) |
Shareholder's Equity and Accu94
Shareholder's Equity and Accumulated Other Comprehensive Income (Loss) - AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning Balance | $ 3,465,613 | $ 2,900,235 | |
Other comprehensive income (loss) before reclassifications | 45,986 | 80,641 | |
Amounts reclassed from accumulated other comprehensive loss | (11,630) | (428) | |
Income tax benefit (expense) | (6,440) | (44,743) | |
Other comprehensive income, net of tax | 27,916 | 35,470 | $ (49,720) |
Ending Balance | 3,512,323 | 3,124,592 | 2,900,235 |
Accumulated Other Comprehensive Income (Loss) | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning Balance | (125,722) | (133,392) | |
Ending Balance | (97,806) | (97,922) | (133,392) |
Foreign Currency Items | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning Balance | (188,203) | (98,074) | |
Other comprehensive income (loss) before reclassifications | 13,863 | (47,194) | |
Amounts reclassed from accumulated other comprehensive loss | 0 | 0 | |
Income tax benefit (expense) | 0 | 0 | |
Other comprehensive income, net of tax | 13,863 | (47,194) | |
Ending Balance | (174,340) | (145,268) | (98,074) |
Unrealized Gains (Losses) on Investments | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning Balance | 65,830 | (34,511) | |
Other comprehensive income (loss) before reclassifications | 32,031 | 127,652 | |
Amounts reclassed from accumulated other comprehensive loss | (11,630) | (428) | |
Income tax benefit (expense) | (6,440) | (44,679) | |
Other comprehensive income, net of tax | 13,961 | 82,545 | |
Ending Balance | 79,791 | 48,034 | (34,511) |
Interest Rate Swap Hedge | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning Balance | (172) | (700) | |
Other comprehensive income (loss) before reclassifications | 92 | 183 | |
Amounts reclassed from accumulated other comprehensive loss | 0 | 0 | |
Income tax benefit (expense) | 0 | (64) | |
Other comprehensive income, net of tax | 92 | 119 | |
Ending Balance | (80) | (581) | (700) |
Net Benefit Plan Assets and Obligations Recognized in Stockholders' Equity | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning Balance | (3,177) | (107) | |
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, net of tax | 0 | 0 | |
Ending Balance | $ (3,177) | $ (107) | $ (107) |
Segments - Results of Operation
Segments - Results of Operations of Business Segments (Detail) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017USD ($)segment | Mar. 31, 2016USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of operating segments | segment | 3 | |||
Gross written premium | $ 2,266,280 | $ 1,933,074 | ||
Net written premium | 1,344,066 | 1,220,679 | $ 1,043,189 | |
Change in unearned premium | (121,534) | (146,397) | (93,812) | |
Net earned premium | 1,222,532 | 1,074,282 | 949,377 | |
Loss and loss adjustment expense | (840,334) | (715,073) | (613,283) | |
Acquisition costs and other underwriting expenses | (328,215) | (272,468) | (232,781) | |
Operating Expenses | (1,168,549) | (987,541) | ||
Underwriting income | 53,983 | 86,741 | ||
Service and fee income | 137,496 | 128,805 | 102,119 | |
Investment income and realized gain | 71,940 | 57,390 | ||
Other expenses | (162,853) | (129,267) | (100,960) | |
Interest expense | (23,601) | (15,874) | ||
Foreign currency loss | (17,968) | (38,233) | 24,657 | |
Gain (loss) on life settlement contracts | 8,610 | 10,730 | 11,373 | |
Gain on acquisition | 0 | 9,678 | ||
(Provision) benefit for income taxes | (21,356) | (18,960) | (36,493) | |
Equity in earnings of unconsolidated subsidiary – related parties | 3,957 | 5,776 | 5,529 | |
Net income | 50,208 | 96,786 | $ 142,969 | $ 142,969 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Net earned premium | 1,222,532 | 1,074,282 | ||
Operating Segments | Small Commercial Business | ||||
Segment Reporting Information [Line Items] | ||||
Gross written premium | 1,257,285 | 1,066,132 | ||
Net written premium | 658,979 | 624,528 | ||
Change in unearned premium | (105,354) | (120,434) | ||
Net earned premium | 553,625 | 504,094 | ||
Loss and loss adjustment expense | (377,437) | (332,684) | ||
Acquisition costs and other underwriting expenses | (154,641) | (133,532) | ||
Operating Expenses | (532,078) | (466,216) | ||
Underwriting income | 21,547 | 37,878 | ||
Service and fee income | 28,654 | 32,537 | ||
Investment income and realized gain | 29,690 | 26,854 | ||
Other expenses | (45,174) | (35,647) | ||
Interest expense | (13,093) | (8,755) | ||
Foreign currency loss | 0 | 0 | ||
Gain (loss) on life settlement contracts | 4,776 | 5,918 | ||
Gain on acquisition | 9,678 | |||
(Provision) benefit for income taxes | (7,878) | (11,215) | ||
Equity in earnings of unconsolidated subsidiary – related parties | 0 | 0 | ||
Net income | 18,522 | 57,248 | ||
Operating Segments | Specialty Risk and Extended Warranty | ||||
Segment Reporting Information [Line Items] | ||||
Gross written premium | 732,442 | 529,446 | ||
Net written premium | 510,208 | 337,833 | ||
Change in unearned premium | (36,718) | (15,992) | ||
Net earned premium | 473,490 | 321,841 | ||
Loss and loss adjustment expense | (312,604) | (210,936) | ||
Acquisition costs and other underwriting expenses | (118,463) | (72,851) | ||
Operating Expenses | (431,067) | (283,787) | ||
Underwriting income | 42,423 | 38,054 | ||
Service and fee income | 86,941 | 74,384 | ||
Investment income and realized gain | 26,128 | 19,170 | ||
Other expenses | (26,316) | (17,702) | ||
Interest expense | (7,628) | (4,348) | ||
Foreign currency loss | (17,968) | (38,233) | ||
Gain (loss) on life settlement contracts | 2,783 | 2,939 | ||
Gain on acquisition | 0 | |||
(Provision) benefit for income taxes | (31,742) | (12,165) | ||
Equity in earnings of unconsolidated subsidiary – related parties | 0 | 0 | ||
Net income | 74,621 | 62,099 | ||
Operating Segments | Specialty Program | ||||
Segment Reporting Information [Line Items] | ||||
Gross written premium | 276,553 | 337,496 | ||
Net written premium | 174,879 | 258,318 | ||
Change in unearned premium | 20,538 | (9,971) | ||
Net earned premium | 195,417 | 248,347 | ||
Loss and loss adjustment expense | (150,293) | (171,453) | ||
Acquisition costs and other underwriting expenses | (55,111) | (66,085) | ||
Operating Expenses | (205,404) | (237,538) | ||
Underwriting income | (9,987) | 10,809 | ||
Service and fee income | 1,537 | 289 | ||
Investment income and realized gain | 16,122 | 11,300 | ||
Other expenses | (9,936) | (11,284) | ||
Interest expense | (2,880) | (2,771) | ||
Foreign currency loss | 0 | 0 | ||
Gain (loss) on life settlement contracts | 1,051 | 1,873 | ||
Gain on acquisition | 0 | |||
(Provision) benefit for income taxes | 1,221 | (1,673) | ||
Equity in earnings of unconsolidated subsidiary – related parties | 0 | 0 | ||
Net income | (2,872) | 8,543 | ||
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 | 20,364 | 21,595 | ||
Investment income and realized gain | 0 | 66 | ||
Other expenses | (81,427) | (64,634) | ||
Interest expense | 0 | 0 | ||
Foreign currency loss | 0 | 0 | ||
Gain (loss) on life settlement contracts | 0 | 0 | ||
Gain on acquisition | 0 | |||
(Provision) benefit for income taxes | 17,043 | 6,093 | ||
Equity in earnings of unconsolidated subsidiary – related parties | 3,957 | 5,776 | ||
Net income | (40,063) | (31,104) | ||
Workers' compensation | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Net earned premium | 445,320 | 453,756 | ||
Workers' compensation | Operating Segments | Small Commercial Business | ||||
Segment Reporting Information [Line Items] | ||||
Net earned premium | 336,324 | 346,043 | ||
Workers' compensation | Operating Segments | Specialty Risk and Extended Warranty | ||||
Segment Reporting Information [Line Items] | ||||
Net earned premium | 0 | 0 | ||
Workers' compensation | Operating Segments | Specialty Program | ||||
Segment Reporting Information [Line Items] | ||||
Net earned premium | 108,996 | 107,713 | ||
Warranty | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Net earned premium | 214,531 | 168,333 | ||
Warranty | Operating Segments | Small Commercial Business | ||||
Segment Reporting Information [Line Items] | ||||
Net earned premium | 0 | 0 | ||
Warranty | Operating Segments | Specialty Risk and Extended Warranty | ||||
Segment Reporting Information [Line Items] | ||||
Net earned premium | 214,528 | 168,333 | ||
Warranty | Operating Segments | Specialty Program | ||||
Segment Reporting Information [Line Items] | ||||
Net earned premium | 3 | 0 | ||
Other liability | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Net earned premium | 97,847 | 116,543 | ||
Other liability | Operating Segments | Small Commercial Business | ||||
Segment Reporting Information [Line Items] | ||||
Net earned premium | 0 | 5,249 | ||
Other liability | Operating Segments | Specialty Risk and Extended Warranty | ||||
Segment Reporting Information [Line Items] | ||||
Net earned premium | 43,308 | 40,713 | ||
Other liability | Operating Segments | Specialty Program | ||||
Segment Reporting Information [Line Items] | ||||
Net earned premium | 54,539 | 70,581 | ||
Commercial auto and liability, physical damage | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Net earned premium | 127,100 | 129,539 | ||
Commercial auto and liability, physical damage | Operating Segments | Small Commercial Business | ||||
Segment Reporting Information [Line Items] | ||||
Net earned premium | 101,146 | 85,904 | ||
Commercial auto and liability, physical damage | Operating Segments | Specialty Risk and Extended Warranty | ||||
Segment Reporting Information [Line Items] | ||||
Net earned premium | 0 | 8,492 | ||
Commercial auto and liability, physical damage | Operating Segments | Specialty Program | ||||
Segment Reporting Information [Line Items] | ||||
Net earned premium | 25,954 | 35,143 | ||
Medical malpractice | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Net earned premium | 52,779 | 44,017 | ||
Medical malpractice | Operating Segments | Small Commercial Business | ||||
Segment Reporting Information [Line Items] | ||||
Net earned premium | 0 | 0 | ||
Medical malpractice | Operating Segments | Specialty Risk and Extended Warranty | ||||
Segment Reporting Information [Line Items] | ||||
Net earned premium | 52,779 | 44,017 | ||
Medical malpractice | Operating Segments | Specialty Program | ||||
Segment Reporting Information [Line Items] | ||||
Net earned premium | 0 | 0 | ||
Other | Corporate and Other | ||||
Segment Reporting Information [Line Items] | ||||
Net earned premium | 284,955 | 162,094 | ||
Other | Corporate and Other | Small Commercial Business | ||||
Segment Reporting Information [Line Items] | ||||
Net earned premium | 116,155 | 66,898 | ||
Other | Corporate and Other | Specialty Risk and Extended Warranty | ||||
Segment Reporting Information [Line Items] | ||||
Net earned premium | 162,875 | 60,286 | ||
Other | Corporate and Other | Specialty Program | ||||
Segment Reporting Information [Line Items] | ||||
Net earned premium | $ 5,925 | $ 34,910 |
Segments - Long Lived Assets an
Segments - Long Lived Assets and Total Assets of Business Segments (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Mar. 31, 2015 |
Segment Reporting Information [Line Items] | ||||
Total assets | $ 23,884,271 | $ 22,614,668 | $ 18,527,599 | $ 14,872,193 |
Small Commercial Business | ||||
Segment Reporting Information [Line Items] | ||||
Total assets | 10,734,048 | 9,949,105 | ||
Specialty Risk and Extended Warranty | ||||
Segment Reporting Information [Line Items] | ||||
Total assets | 8,931,550 | 8,530,559 | ||
Specialty Program | ||||
Segment Reporting Information [Line Items] | ||||
Total assets | 4,218,673 | 4,135,004 | ||
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total assets | $ 23,884,271 | $ 22,614,668 |