Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 10, 2016 | Jun. 30, 2015 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2015 | ||
Entity Registrant Name | Employers Holdings, Inc. | ||
Entity Central Index Key | 1,379,041 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well Know Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock Shares Outstanding | 32,216,480 | ||
Entity Public Float | $ 729,797,712 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Available for sale: | ||
Fixed maturity securities at fair value (amortized cost $2,221,100 at December 31, 2015 and $2,186,100 at December 31, 2014) | $ 2,288,500 | $ 2,275,700 |
Equity securities at fair value (cost $137,500 at December 31, 2015 and $97,800 at December 31, 2014) | 198,700 | 172,700 |
Total investments | 2,487,200 | 2,448,400 |
Cash and cash equivalents | 56,600 | 103,600 |
Restricted cash and cash equivalents | 2,500 | 10,800 |
Accrued investment income | 20,600 | 20,500 |
Premiums receivable, less bad debt allowance of $12,200 at December 31, 2015 and $7,900 at December 31, 2014 | 301,100 | 295,800 |
Reinsurance recoverable for: | ||
Paid losses | 7,700 | 10,700 |
Unpaid losses, including bad debt allowance | 628,200 | 669,500 |
Deferred policy acquisition costs | 44,300 | 44,600 |
Deferred income taxes, net | 67,900 | 49,700 |
Property and equipment, net | 24,900 | 21,000 |
Intangible assets, net | 8,500 | 9,000 |
Goodwill | 36,200 | 36,200 |
Contingent commission receivable–LPT Agreement | 29,200 | 26,400 |
Other assets | 40,900 | 23,500 |
Total assets | 3,755,800 | 3,769,700 |
Claims and policy liabilities: | ||
Unpaid losses and loss adjustment expenses | 2,347,500 | 2,369,700 |
Unearned premiums | 308,900 | 310,800 |
Total claims and policy liabilities | 2,656,400 | 2,680,500 |
Commissions and premium taxes payable | 52,500 | 46,300 |
Accounts payable and accrued expenses | 24,100 | 20,400 |
Deferred reinsurance gain—LPT Agreement | 189,500 | 207,000 |
Notes payable | 32,000 | 92,000 |
Other liabilities | 40,500 | 36,700 |
Total liabilities | $ 2,995,000 | $ 3,082,900 |
Commitments and contingencies (Note 12) | ||
Stockholders’ equity: | ||
Common stock, $0.01 par value; 150,000,000 shares authorized; 55,589,454 and 54,866,802 shares issued and 32,216,480 and 31,493,828 shares outstanding at December 31, 2015 and 2014, respectively | $ 600 | $ 600 |
Preferred stock, $0.01 par value; 25,000,000 shares authorized; none issued | 0 | 0 |
Additional paid-in capital | 357,200 | 346,600 |
Retained earnings | 682,000 | 595,300 |
Accumulated other comprehensive income, net | 83,600 | 106,900 |
Treasury stock, at cost (23,372,974 shares at December 31, 2015 and 2014) | (362,600) | (362,600) |
Total stockholders’ equity | 760,800 | 686,800 |
Total liabilities and stockholders’ equity | $ 3,755,800 | $ 3,769,700 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Available for sale: | ||
Fixed maturity securities, amortized cost | $ 2,358,600 | $ 2,283,900 |
Premiums receivable, bad debt allowance | 12,200 | 7,900 |
Reinsurance recoverables, allowance for unpaid losses | $ 0 | $ 0 |
Stockholders' equity | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 55,589,454 | 54,866,802 |
Common stock, shares outstanding (in shares) | 32,216,480 | 31,493,828 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Treasury stock, at cost (in shares) | 23,372,974 | 23,372,974 |
Debt Securities [Member] | ||
Available for sale: | ||
Fixed maturity securities, amortized cost | $ 2,221,100 | $ 2,186,100 |
Equity Securities [Member] | ||
Available for sale: | ||
Fixed maturity securities, amortized cost | $ 137,500 | $ 97,800 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues | |||
Net premiums earned | $ 690,400 | $ 684,500 | $ 642,300 |
Net investment income | 72,200 | 72,400 | 70,800 |
Net realized (losses) gains on investments | (10,700) | 16,300 | 9,500 |
Other income | 200 | 300 | 900 |
Total revenues | 752,100 | 773,500 | 723,500 |
Expenses | |||
Losses and loss adjustment expenses | 429,400 | 453,400 | 463,600 |
Commission expense | 85,400 | 81,400 | 78,300 |
Underwriting and other operating expenses | 135,200 | 129,100 | 125,300 |
Interest expense | 2,700 | 3,000 | 3,200 |
Total expenses | 652,700 | 666,900 | 670,400 |
Net income before income taxes | 99,400 | 106,600 | 53,100 |
Income tax expense (benefit) | 5,000 | 5,900 | (10,700) |
Net income | 94,400 | 100,700 | 63,800 |
Comprehensive income | |||
Unrealized (losses) gains during the period (net of tax (benefit) expense of $(16,300), $14,600, and $(17,700) for the years ended December 31, 2015, 2014, and 2013, respectively) | (30,300) | 27,100 | (32,900) |
Reclassification adjustment for realized gains in net income (net of taxes of $(3,700), $5,700, and $3,300 for the years ended December 31, 2015, 2014, and 2013, respectively) | 7,000 | (10,600) | (6,200) |
Other comprehensive (loss) income, net of tax | (23,300) | 16,500 | (39,100) |
Total comprehensive income | $ 71,100 | $ 117,200 | $ 24,700 |
Earnings per common share (Note 18): | |||
Basic | $ 2.94 | $ 3.19 | $ 2.05 |
Diluted | 2.90 | 3.14 | 2 |
Cash dividends declared per common share | $ 0.24 | $ 0.24 | $ 0.24 |
Net realized (losses) gains on investments | |||
Net realized gains on investments before impairments on fixed maturity and equity securities | $ 6,500 | $ 16,800 | $ 9,600 |
Other than temporary impairment recognized in earnings | (17,200) | (500) | (100) |
Net realized (losses) gains on investments | $ (10,700) | $ 16,300 | $ 9,500 |
Consolidated Statements of Com5
Consolidated Statements of Comprehensive Income (Parentheticals) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Other Comprehensive Income Parenthetical [Abstract] | |||
Other comprehensive income (loss), unrealized holding gain (loss) on securities arising during period, tax | $ (16,300) | $ 14,600 | $ (17,700) |
Other comprehensive income (loss), reclassification adjustment for sale of securities included in net income, tax | $ (3,700) | $ 5,700 | $ 3,300 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income, Net | Treasury Stock at Cost |
Stockholders' equity, shares at Dec. 31, 2012 | 54,144,453 | |||||
Stockholders' equity, value at Dec. 31, 2012 | $ 539,400 | $ 600 | $ 326,000 | $ 445,900 | $ 129,500 | $ (362,600) |
Stock-based compensation (Note 14), shares | 0 | |||||
Stock-based compensation (Note 14), value | 5,600 | $ 0 | 5,600 | 0 | 0 | 0 |
Stock-options exercised, shares | 411,295 | |||||
Stock options exercised, value | 7,400 | $ 0 | 7,400 | 0 | 0 | 0 |
Vesting of restricted stock units, net of shares withheld to satisfy minimum tax withholding (Note 15), shares | 117,156 | |||||
Vesting of restricted stock units, net of shares withheld to satisfy minimum tax withholding (Note 15), value | (900) | $ 0 | (900) | 0 | 0 | 0 |
Dividend to common stockholders, shares | 0 | |||||
Dividend to common stockholders, value | 7,500 | $ 0 | 0 | 7,500 | 0 | 0 |
Stockholders' equity, shares at Dec. 31, 2013 | 54,672,904 | |||||
Net income for the period | 63,800 | $ 0 | 0 | 63,800 | 0 | 0 |
Change in net unrealized gains on investments, net of taxes | (39,100) | 0 | 0 | 0 | (39,100) | 0 |
Stockholders' equity, value at Dec. 31, 2013 | 568,700 | $ 600 | 338,100 | 502,200 | 90,400 | (362,600) |
Stock-based compensation (Note 14), shares | 0 | |||||
Stock-based compensation (Note 14), value | 6,000 | $ 0 | 6,000 | 0 | 0 | 0 |
Stock-options exercised, shares | 120,494 | |||||
Stock options exercised, value | 2,200 | $ 0 | 2,200 | 0 | 0 | 0 |
Vesting of restricted stock units, net of shares withheld to satisfy minimum tax withholding (Note 15), shares | 73,404 | |||||
Vesting of restricted stock units, net of shares withheld to satisfy minimum tax withholding (Note 15), value | (600) | $ 0 | (600) | 0 | 0 | 0 |
Dividend to common stockholders, shares | 0 | |||||
Dividend to common stockholders, value | $ 7,600 | $ 0 | 0 | 7,600 | 0 | 0 |
Stockholders' equity, shares at Dec. 31, 2014 | 54,866,802 | 54,866,802 | ||||
Net income for the period | $ 100,700 | $ 0 | 0 | 100,700 | 0 | 0 |
Change in net unrealized gains on investments, net of taxes | 16,500 | 0 | 0 | 0 | 16,500 | 0 |
Stockholders' equity, value at Dec. 31, 2014 | 686,800 | $ 600 | 346,600 | 595,300 | 106,900 | (362,600) |
Stock-based compensation (Note 14), shares | 0 | |||||
Stock-based compensation (Note 14), value | 4,600 | $ 0 | 4,600 | 0 | 0 | 0 |
Stock-options exercised, shares | 463,466 | |||||
Stock options exercised, value | 7,600 | $ 0 | 7,600 | 0 | 0 | 0 |
Vesting of restricted stock units, net of shares withheld to satisfy minimum tax withholding (Note 15), shares | 259,186 | |||||
Vesting of restricted stock units, net of shares withheld to satisfy minimum tax withholding (Note 15), value | (2,700) | $ 0 | (2,700) | 0 | 0 | 0 |
Dividend to common stockholders, shares | 0 | |||||
Dividend to common stockholders, value | $ 7,700 | $ 0 | 0 | 7,700 | 0 | 0 |
Stockholders' equity, shares at Dec. 31, 2015 | 55,589,454 | 55,589,454 | ||||
Excess tax benefit from stock-based compensation | $ 1,100 | $ 0 | 1,100 | 0 | 0 | 0 |
Net income for the period | 94,400 | 0 | 0 | 94,400 | 0 | 0 |
Change in net unrealized gains on investments, net of taxes | (23,300) | 0 | 0 | 0 | (23,300) | 0 |
Stockholders' equity, value at Dec. 31, 2015 | $ 760,800 | $ 600 | $ 357,200 | $ 682,000 | $ 83,600 | $ (362,600) |
Consolidated Stockholders Equit
Consolidated Stockholders Equity (Parentheticals) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Stockholders Equity Parenthetical [Abstract] | |||
Change in net unrealized gains on investments, net of tax of | $ (12,600) | $ 8,900 | $ (21,000) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating activities | |||
Net income | $ 94,400 | $ 100,700 | $ 63,800 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 8,300 | 7,000 | 6,100 |
Stock-based compensation | 4,600 | 6,000 | 5,600 |
Amortization of premium on investments, net | 12,800 | 10,600 | 9,000 |
Allowance for doubtful accounts | 4,300 | 800 | 1,100 |
Deferred income tax benefit | (5,600) | (500) | (10,800) |
Net realized gains (losses) on investments | 10,700 | (16,300) | (9,500) |
Excess tax benefits from stock-based compensation | (1,200) | (1,200) | 0 |
Other operating activities, adjustments to reconcile net income to net cash | 100 | (300) | (900) |
Change in operating assets and liabilities: | |||
Premiums receivable | (9,600) | (17,600) | (57,200) |
Reinsurance recoverable on paid and unpaid losses | 44,300 | 71,300 | 63,800 |
Federal income taxes recoverable | (3,900) | 6,500 | (3,700) |
Unpaid losses and loss adjustment expenses | (22,200) | 39,200 | 99,000 |
Unearned premiums | (1,900) | 6,800 | 38,800 |
Accounts payable, accrued expenses and other liabilities | 8,600 | 12,800 | 1,800 |
Deferred reinsurance gain–LPT Agreement | (17,500) | (42,100) | (32,000) |
Contingent commission receivable–LPT Agreement | (2,800) | (1,300) | (6,000) |
Other | (7,000) | (10,500) | (2,400) |
Net cash provided by operating activities | 116,400 | 171,900 | 166,500 |
Investing activities | |||
Purchase of fixed maturity securities | (476,900) | (378,000) | (514,200) |
Purchase of equity securities | (85,100) | (29,500) | (30,500) |
Proceeds from sale of fixed maturity securities | 105,400 | 47,900 | 52,500 |
Proceeds from sale of equity securities | 34,700 | 36,500 | 30,700 |
Proceeds from maturities and redemptions of investments | 323,900 | 251,100 | 206,800 |
Proceeds from sale of fixed assets | 0 | 0 | 800 |
Capital expenditures and other | (11,500) | (10,500) | (5,000) |
Change in restricted cash and cash equivalents | 8,300 | (4,200) | (1,200) |
Net cash used in investing activities | (101,200) | (86,700) | (260,100) |
Financing activities | |||
Cash transactions related to stock-based compensation | 4,800 | 1,600 | 6,500 |
Dividends paid to stockholders | (7,700) | (7,600) | (7,500) |
Payments on notes payable and capital leases | (60,500) | (11,300) | (11,600) |
Excess tax benefits from stock-based compensation | 1,200 | 1,200 | 0 |
Net cash used in financing activities | (62,200) | (16,100) | (12,600) |
Net (decrease) increase in cash and cash equivalents | (47,000) | 69,100 | (106,200) |
Cash and cash equivalents at the beginning of the period | 103,600 | 34,500 | 140,700 |
Cash and cash equivalents at the end of the period | 56,600 | 103,600 | 34,500 |
Cash (received) paid for income taxes | 12,700 | (1,100) | 3,900 |
Cash paid for interest | 2,800 | 3,000 | 3,300 |
Schedule of non-cash transactions | |||
Financed property and equipment purchases | $ 300 | $ 700 | $ 2,300 |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 2015 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | Basis of Presentation and Summary of Operations Nature of Operations and Organization Employers Holdings, Inc. (EHI) is a Nevada holding company. Through its wholly owned insurance subsidiaries, Employers Insurance Company of Nevada (EICN), Employers Compensation Insurance Company (ECIC), Employers Preferred Insurance Company (EPIC), and Employers Assurance Company (EAC), EHI is engaged in the commercial property and casualty insurance industry, specializing in workers' compensation products and services. Unless otherwise indicated, all references to the “Company” refer to EHI, together with its subsidiaries. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP). All intercompany transactions and balances have been eliminated in consolidation. The Company considers an operating segment to be any component of its business whose operating results are regularly reviewed by the Company's chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance based on discrete financial information. Currently, the Company has one operating segment, workers' compensation insurance and related services. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. As a result, actual results could differ from these estimates. The most significant areas that require management judgment are the estimate of unpaid losses and loss adjustment expenses (LAE), evaluation of reinsurance recoverables, recognition of premium revenue, deferred income taxes, and investments. Reclassifications Certain prior period information has been reclassified to conform to the current period presentation. |
Changes in Estimates Level 1 (N
Changes in Estimates Level 1 (Notes) | 12 Months Ended |
Dec. 31, 2015 | |
Changes in Estimates [Abstract] | |
Accounting Changes and Error Corrections | Changes in Estimates The Company reduced its estimated reserves ceded under the Loss Portfolio Transfer Agreement (LPT Reserve Adjustments) in each of the years 2015 , 2014 , and 2013 as a result of the determination that adjustments were necessary to reflect observed favorable paid loss trends in each of these years. The following table shows the financial statement impact related to the reduction in estimated reserves ceded under the Loss Portfolio Transfer Agreement (LPT Agreement). 2015 2014 2013 (in millions, except per share data) Change in estimated reserves ceded under the LPT Agreement $ (10.0 ) $ (46.8 ) $ (27.5 ) Cumulative adjustment to the Deferred Gain (1) (6.4 ) (31.1 ) (19.0 ) Net income impact of change in estimate 6.4 31.1 19.0 EPS impact of change in estimate Basic 0.20 0.99 0.61 Diluted 0.20 0.97 0.59 (1) The cumulative adjustments to the Deferred Gain were also recognized in losses and LAE incurred in the consolidated statement of comprehensive income, so that the Deferred Gain reflects the balance that would have existed had the revised reserves been recognized at the inception of the LPT Agreement. The Company increased its estimate of Contingent commission receivable – LPT Agreement (LPT Contingent Commission Adjustments) in each of 2015 , 2014 , and 2013 as a result of the determination that adjustments were necessary to reflect observed favorable paid loss trends in each of those years. The following table shows the impact to the Consolidated Statements of Comprehensive Income related to these changes in estimates. 2015 2014 2013 (in millions, except per share data) Cumulative adjustment to the deferred reinsurance gain - LPT Agreement (Deferred Gain) (1) $ (2.6 ) $ (10.8 ) $ (4.3 ) Net income impact of change in estimate 2.6 10.8 4.3 EPS impact of change in estimate Basic 0.08 0.34 0.14 Diluted 0.08 0.34 0.13 (1) The cumulative adjustments to the Deferred Gain were also recognized in losses and LAE incurred in the consolidated statement of comprehensive income, so that the Deferred Gain reflects the balance that would have existed had the revised reserves been recognized at the inception of the LPT Agreement. The Company reallocated reserves from non-taxable periods prior to January 1, 2000 to taxable years, which reduced its effective tax rates, in each of 2015 , 2014 , and 2013 . These changes in estimates were the result of the determination that a reallocation of reserves among accident years was appropriate to address a continuation of observed loss trends in each of those years. The following table shows the financial statement impact of these changes in estimates. 2015 2014 2013 (in millions, except per share data) Reserves reallocated to taxable years $ 56.3 $ 13.1 $ 27.2 Impact to effective tax rate (15.4 )% (3.4 )% (13.9 )% Net income impact of change in estimate $ 15.3 $ 3.6 $ 7.4 EPS impact of change in estimate Basic 0.48 0.11 0.24 Diluted 0.47 0.11 0.23 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Significant Accounting Policies | Summary of Significant Accounting Policies Cash and Cash Equivalents The Company considers all highly liquid investments with an initial maturity of three months or less at the date of purchase to be cash equivalents. Restricted Cash and Cash Equivalents Restricted cash and cash equivalents is primarily related to funds held in trust to secure the Company's line of credit and for reinsurance. The Company held $32.7 million and $33.3 million in trust for reinsurance, of which $2.5 million and $6.1 million were classified as restricted cash and cash equivalents at December 31, 2015 and 2014 , respectively. Investments The Company's investments in fixed maturity securities and equity securities are classified as available-for-sale and are reported at fair value with unrealized gains and losses excluded from earnings and reported as a separate component of equity, net of deferred taxes, in accumulated other comprehensive income. Investment income consists primarily of interest and dividends. Interest is recognized on an accrual basis, and dividends are recorded as earned at the ex-dividend date. Interest income on mortgage-backed and asset-backed securities is determined using the effective-yield method based on estimated principal repayments. Mortgage-backed securities are adjusted for the effects of changes in prepayment assumptions on the related accretion of discount or amortization of premium of such securities using the retrospective method. Realized capital gains and losses on investments are determined on a specific-identification basis. When, in the opinion of management, a decline in the fair value of an equity security below its cost is considered to be “other-than-temporary,” the equity security's cost is written down to its fair value at the time the other-than-temporary decline is identified. The determination of an other-than-temporary decline for debt securities includes, in addition to other relevant factors, a presumption that if the market value is below cost by a significant amount for a period of time, a bifurcation of the write-down may be necessary. If management has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery, the investment is written down to its fair value and the entire impairment is recorded as a realized loss due to credit in the accompanying consolidated statements of comprehensive income. If management does not have the intent to sell or will not be required to sell the debt security but does not expect to recover the amortized cost basis of the debt security, the amount of the other-than-temporary impairment is bifurcated between credit loss and other loss and recorded as a component of realized gains and losses and to other comprehensive income, respectively, in the consolidated statements of comprehensive income. The amount of any write-down is determined by the difference between the cost or amortized cost of the debt security and its fair value at the time the other-than-temporary decline is identified (see Note 6 ). Recognition of Revenue and Expense Revenue Recognition Premium revenue is recognized over the period of the contract in proportion to the amount of time insurance protection is provided. At the end of the policy term, payroll-based premium audits are performed on substantially all policyholder accounts to determine net premiums earned for the policy year. Earned but unbilled premiums include estimated future audit premiums based on the Company's historical experience. These estimates are subject to changes in policyholders' payrolls, economic conditions, and seasonality, and are continually reviewed and adjusted as experience develops or new information becomes known. Any such adjustments are included in current operations; however, they are partially offset by the resulting changes in losses and LAE, commission expenses, and premium taxes. The Company's premiums receivable on the consolidated balance sheet included $53.5 million and $49.1 million of additional premiums expected to be received from policyholders for final audits at December 31, 2015 and 2014 , respectively. The Company establishes a bad debt allowance on its premiums receivable through a charge included in underwriting and other operating expenses in the accompanying consolidated statements of comprehensive income. This bad debt allowance is determined based on estimates and assumptions to project future experience. After all collection efforts have been exhausted, the Company reduces the bad debt allowance for write-offs of premiums receivable that have been deemed uncollectible. The Company's bad debt allowance was $12.2 million and $7.9 million at December 31, 2015 and 2014 , respectively. The Company had write-offs, net of recoveries of amounts previously written off, of $2.4 million , $3.4 million , and $2.5 million for the years ended December 31, 2015 , 2014 , and 2013 , respectively. Deferred Policy Acquisition Costs Policy acquisition costs that relate directly to the successful acquisition of new or renewal insurance contracts, including underwriting, policy issuance and processing, medical and inspection, and sales force contract selling are deferred and amortized as the related premiums are earned. Amortization of deferred policy acquisition costs for the years ended December 31, 2015 , 2014 , and 2013 , was $103.9 million , $102.7 million , and $96.9 million , respectively. A premium deficiency would exist if expected future losses and LAE, expected policyholder dividends, deferred policy acquisition costs, and expected policy maintenance costs, offset by anticipated investment income, exceed the related unearned premiums. A premium deficiency would reduce the value of deferred policy acquisition costs. If the deficiency exceeded the deferred policy acquisition costs, a separate liability would be accrued for the excess deficiency. There was no premium deficiency at December 31, 2015 or 2014 . Unpaid Loss and LAE Reserves Loss and LAE reserves represent management's best estimate of the ultimate net cost of all reported and unreported losses incurred for the applicable periods, less payments made. The estimated reserves for losses and LAE include the accumulation of estimates for all claims reported prior to the balance sheet date, estimates of claims incurred but not reported, and estimates of expenses for investigating and adjusting all incurred and unadjusted claims (based on projections of relevant historical data). Amounts reported are necessarily subject to the impact of future changes in economic, regulatory and social conditions. Management believes that, subject to the inherent variability in any such estimate, the reserves are within a reasonable and acceptable range of adequacy. Estimates for claims prior to the balance sheet date are continually monitored and reviewed, and as settlements are made or reserves adjusted, the differences are reported in current operations. Salvage and subrogation recoveries are estimated based on a review of the level of historical salvage and subrogation recoveries. Reinsurance In the ordinary course of business and consistent with general insurance industry practices, the Company purchases excess of loss reinsurance to protect the Company against the impact of large and/or catastrophic losses in its workers' compensation business. Additionally, the Company is a party to a 100% quota share retroactive reinsurance agreement (see Note 10 ). This reinsurance reduces the financial impact of such losses on current operations and the equity of the Company. Reinsurance makes the assuming reinsurer liable to the ceding company to the extent of the reinsurance coverage provided. It does not, however, discharge the Company from its liability to its policyholders in the event the reinsurer is unable or unwilling to meet its obligations under its reinsurance agreement with the Company. Net premiums earned and losses and LAE incurred are stated in the accompanying consolidated statements of comprehensive income after deduction of amounts ceded to reinsurers. Balances due from reinsurers on unpaid losses, including an estimate of such recoverables related to reserves for incurred but not reported losses, are reported as assets and are included in reinsurance recoverables even though amounts due on unpaid losses and LAE are not recoverable from the reinsurer until such losses are paid. Recoverables from reinsurers on unpaid losses and LAE amounted to $628.2 million and $669.5 million at December 31, 2015 and 2014 , respectively. Ceded losses and LAE are accounted for on a basis consistent with those used in accounting for the original policies issued and the terms of the relevant reinsurance agreement. The 100% quota share retroactive reinsurance agreement was entered into in 1999 by the Nevada State Industrial Insurance System (the Fund) and assumed by EICN, which the Company refers to as the LPT Agreement (see Note 10 ). Loss expenses are deemed to be 7% of total losses paid and are paid to the Company as compensation for management of the claims under the LPT Agreement. The Company accounts for this transaction as retroactive reinsurance, whereby the initial deferred gain was recorded as a liability in the accompanying consolidated balance sheets as Deferred reinsurance gain–LPT Agreement. This gain is amortized using the recovery method, whereby the amortization is determined by the proportion of actual reinsurance recoveries to total estimated recoveries through the life of the LPT Agreement, and is recorded in losses and LAE incurred in the accompanying consolidated statements of comprehensive income. Any adjustment to the estimated reserves ceded under the LPT Agreement results in a cumulative adjustment to the Deferred Gain, which is also recognized in losses and LAE incurred in the consolidated statement of comprehensive income, such that the Deferred Gain reflects the balance that would have existed had the revised reserves been recognized at the inception of the LPT Agreement. Additionally, the Company is entitled to receive a contingent profit commission under the LPT Agreement. The contingent profit is equal to 30% of the favorable difference between actual paid losses and LAE and expected paid losses and LAE as established in the LPT Agreement based on losses paid through June 30, 2024. The contingent profit commission is paid every five years beginning June 30, 2004 for the first twenty-five years of the agreement. The Company is paid 30% of the favorable difference between the actual and expected losses and LAE paid at each calculation point. The Company could be required to return any previously received contingent profit commission, plus interest, in the event of unfavorable differences through June 30, 2024. The Company records its estimate of contingent profit commission in the accompanying consolidated balance sheets as Contingent commission receivable–LPT Agreement and a corresponding liability is recorded on the accompanying consolidated balance sheets in Deferred reinsurance gain–LPT Agreement. The Contingent commission receivable–LPT Agreement is reduced as amounts are received from participating reinsurers. In 2014, the Company received $11.7 million in cash related to the contingent profit commission. The related Deferred reinsurance gain–LPT Agreement is amortized using the recovery method. The amortization of the contingent profit commission is determined by the proportion of actual reinsurance recoveries to total estimated recoveries over the life of the contingent profit commission (through June 30, 2024), and is recorded in losses and LAE incurred in the accompanying consolidated statements of comprehensive income. Any adjustment to the contingent profit commission under the LPT Agreement results in a cumulative adjustment to the Deferred Gain, which is also recognized in losses and LAE incurred in the consolidated statement of comprehensive income, such that the Deferred Gain reflects the balance that would have existed had the revised contingent profit commission been recognized at the inception of the LPT Agreement. Property and Equipment Property and equipment are stated at cost less accumulated depreciation (see Note 7 ). Expenditures for maintenance and repairs are charged against operations as incurred. Electronic data processing equipment, software, furniture and equipment, and automobiles are depreciated using the straight-line method over three to seven years . Leasehold improvements are carried at cost less accumulated amortization. The Company amortizes leasehold improvements using the straight-line method over the lesser of the useful life of the asset or the remaining original lease term, excluding options or renewal periods. Leasehold improvements are generally amortized over three to five years . Obligations Held Under Capital Leases Leased property and equipment meeting capital lease criteria are capitalized at the lower of the present value of the related lease payments or the fair value of the leased asset at the inception of the lease. Amortization is calculated using the straight-line method based on the term of the lease and is included in the depreciation expense of property and equipment. See Note 12 for additional disclosures related to capital leases. Income Taxes The Company's accounting for income taxes considers the current and deferred tax consequences of all transactions that have been recognized in its consolidated financial statements using the provisions of enacted tax laws. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The effect on deferred tax assets and liabilities resulting from a tax rate change affects net income or loss in the period that includes the enactment date of the tax rate change. The Company's income tax returns are subject to audit by the Internal Revenue Service and various state tax authorities. Significant disputes may arise with these tax authorities involving issues of the timing and amount of deductions and allocations of income among various tax jurisdictions because of differing interpretations of tax laws and regulations. The Company periodically evaluates exposures associated with tax filing positions. Although we believe our positions comply with applicable laws, liabilities are recorded based upon estimates of the ultimate outcomes of these matters. In assessing whether deferred tax assets will be realized, the Company considers whether it is more likely than not that it will generate future taxable income during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, tax planning strategies, and projected future taxable income in making this assessment. If necessary, a valuation allowance is established to reduce the deferred tax assets to the amounts that are more likely than not to be realized. Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents, investments, premiums receivable, and reinsurance recoverable balances. Cash equivalents include investments in money market securities and securities backed by the U.S. government. Investments are diversified throughout many industries and geographic regions. The Company limits the amount of credit exposure with any one financial institution and believes that no significant concentration of credit risk exists with respect to cash and cash equivalents and investments. At December 31, 2015 and 2014 , the outstanding premiums receivable balance was generally diversified due to the large number of entities composing the Company's policyholder base and their dispersion across many different industries. The Company also has recoverables from its reinsurers. Reinsurance contracts do not relieve the Company of its obligations to claimants or policyholders. Failure of reinsurers to honor their obligations could result in losses to the Company. The Company evaluates the financial condition of its reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. The Company obtains collateral to mitigate the risks related to reinsurance insolvencies. At December 31, 2015 , $3.7 million was collateralized by cash or letters of credit and an additional $1.4 billion was in trust accounts for reinsurance related to the LPT Agreement. Fair Value of Financial Instruments Estimated fair value amounts have been determined using available market information and other appropriate valuation methodologies. Judgment is required in developing the estimates of fair value where quoted market prices are not available. Accordingly, these estimates are not necessarily indicative of the amounts that could be realized in a current market exchange. The use of different market assumptions or estimating methodologies may have an effect on the estimated fair value amounts. The following methods and assumptions were used by the Company in estimating the fair value for financial instruments in the accompanying consolidated financial statements and in these notes for the years ended 2015 and 2014 : Cash and cash equivalents, premiums receivable, accounts payable, and accrued expenses and other liabilities. The carrying amounts for these financial instruments as reported in the accompanying consolidated balance sheets approximate their fair values. Investments. The estimated fair values for available-for-sale securities generally represent quoted market prices for securities traded in the public marketplace or estimated values for securities not traded in the public marketplace. Additional data with respect to fair values of the Company's investment securities is disclosed in Note 5 . Goodwill and Other Intangible Assets The Company tests for impairment of goodwill and non-amortizable intangible assets in the fourth quarter of each year. At the end of each quarter, management considers the results of the previous analysis as well as any recent developments that may constitute triggering events requiring the impairment analysis of goodwill and other intangible assets to be updated. The Company has assessed the effects of current economic conditions on the Company's financial condition and results of operations and changes in the Company's stock price and determined that there were no impairments as of December 31, 2015 and 2014 . Intangible assets related to state licenses are not subject to amortization. Intangibles related to insurance relationships will be amortized in proportion to the expected period of benefit over the next three years. The gross carrying value, accumulated amortization, and net carrying value for the Company's intangible assets, by major class, as of December 31, were as follows: 2015 2014 Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value Accumulated Amortization Net Carrying Value (in millions) State licenses $ 7.7 $ — $ 7.7 $ 7.7 $ — $ 7.7 Insurance relationships 9.4 $ (8.6 ) 0.8 9.4 $ (8.1 ) 1.3 Total $ 17.1 $ (8.6 ) $ 8.5 $ 17.1 $ (8.1 ) $ 9.0 During the years ended December 31, 2015 , 2014 , and 2013 , the Company recognized $0.5 million , $0.7 million , and $0.9 million in amortization expenses, respectively. These amortization expenses are included in the accompanying consolidated statements of comprehensive income in underwriting and other operating expenses. Amortization expense is expected to be as follows: Year Amount (in millions) 2016 0.4 2017 0.3 2018 0.1 Total $ 0.8 Stock-Based Compensation The Company issues stock-based payments, which are recognized in the consolidated statements of comprehensive income based on their estimated fair values over the employees' service period (see Note 14 ). |
New Accounting Standards
New Accounting Standards | 12 Months Ended |
Dec. 31, 2015 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
New Accounting Standards | New Accounting Standards In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) Number 2015-05, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40). The update provides guidance to purchasers to assist in determining whether a cloud computing arrangement includes a software license and how to account for such an arrangement. This update becomes effective for annual reporting periods, including interim periods within those annual periods, beginning after December 15, 2015 and early adoption is permitted. The Company does not expect the adoption to have a material impact on its consolidated financial condition and results of operations. In May 2015, the FASB issued ASU Number 2015-07, Fair Value Measurement (Topic 820). This update removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value (NAV) per share. Additionally, this update removes the requirement to make certain disclosures for all investments that are eligible to be measured as a practical expedient at fair value using the NAV per share. This update becomes effective for annual reporting periods, including interim periods within those annual periods, beginning after December 15, 2015 and early adoption is permitted. As this update focuses only on disclosures, it will not impact the Company's consolidated financial condition and results of operations. In May 2015, the FASB issued ASU Number 2015-09, Financial Services - Insurance (Topic 944). This update expands the breadth of disclosures that an insurance entity must provide about its short-duration insurance contracts. This expanded disclosure includes the presentation of incurred and paid claims development tables by accident year for a period of up to 10 years. This update becomes effective for annual reporting periods beginning after December 15, 2015 and interim periods beginning after December 15, 2016 and early adoption is permitted. As this update focuses only on disclosures, it will not impact the Company's consolidated financial condition and results of operations. In January 2016, the FASB issued ASU Number 2016-01, Financial Instruments - Overall (Subtopic 825-10). This update replaces the guidance to classify equity transactions with readily determinable fair values into different categories (trading or available-for-sale) and requires equity securities to be measured at fair value with changes in fair value recognized through net income. Additionally, this update eliminates the method and significant assumptions used to estimate the fair value of financial instruments measured at amortized cost. It requires financial instruments to be measured at fair value using the exit notion price. Furthermore, this update clarifies that an evaluation of deferred tax assets related to available-for-sale securities is needed, in combination with and evaluation of other deferred tax assets, to determine if a valuation allowance is required. This update becomes effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company has not yet estimated the full effect that adoption will have on its consolidated financial condition and results of operations. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value of Financial Instruments [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying value and the estimated fair value of the Company's financial instruments as of December 31, were as follows: 2015 2014 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Financial assets (in millions) Investments (Note 6) $ 2,487.2 $ 2,487.2 $ 2,448.4 $ 2,448.4 Cash and cash equivalents 56.6 56.6 103.6 103.6 Restricted cash and cash equivalents 2.5 2.5 10.8 10.8 Financial liabilities Notes payable (Note 11) $ 32.0 $ 36.6 $ 92.0 $ 97.8 Assets and liabilities recorded at fair value on the consolidated balance sheets are categorized based upon the levels of judgment associated with the inputs used to measure their fair value. Level inputs are defined as follows: • Level 1 - Inputs are unadjusted quoted market prices for identical assets or liabilities in active markets at the measurement date. • Level 2 - Inputs other than Level 1 prices that are observable for similar assets or liabilities through corroboration with market data at the measurement date. • Level 3 - Inputs that are unobservable that reflect management's best estimate of what willing market participants would use in pricing the assets or liabilities at the measurement date. Fair values of available-for-sale fixed maturity and equity securities are based on quoted market prices, where available. These fair values are obtained primarily from third party pricing services, which generally use Level 1 or Level 2 inputs. The Company obtains a quoted price for each security from third party pricing services, which are derived through recently reported trades for identical or similar securities. For securities not actively traded, the third party pricing services may use quoted market prices of similar instruments or discounted cash flow analyses, incorporating inputs that are currently observable in the markets for similar securities. Inputs that are often used in the valuation methodologies include, but are not limited to, broker quotes, benchmark yields, credit spreads, default rates, and prepayment speeds. The Company also performs a quarterly analysis on the prices received from third parties to determine whether the prices are reasonable estimates of fair value, including confirming the fair values of these securities through observable market prices using an alternative pricing source. If differences are noted in this review, the Company may obtain additional information from other pricing services to validate the quoted price. There were no adjustments to prices obtained from third party pricing services as of December 31, 2015 and 2014 that were material to the consolidated financial statements. If quoted market prices and an estimate determined by using objectively verifiable information are unavailable, the Company produces an estimate of fair value based on internally developed valuation techniques, which, depending on the level of observable market inputs, will render the fair value estimate as Level 2 or Level 3. The Company bases all of its estimates of fair value for assets on the bid price, as it represents what a third-party market participant would be willing to pay in an arm's length transaction. These methods of valuation will only produce an estimate of fair value if there is objectively verifiable information to produce a valuation. If objectively verifiable information is not available, the Company would be required to produce an estimate of fair value using some of the same methodologies, making assumptions for market-based inputs that are unavailable. The Company's estimates of fair value for financial liabilities are based on a combination of the variable interest rates for the Company's existing line of credit and other notes with similar durations to discount the projection of future payments on notes payable. The fair value measurements for notes payable have been determined to be Level 2. The following table presents the items in the accompanying consolidated balance sheets that are stated at fair value and the corresponding fair value measurements. December 31, 2015 December 31, 2014 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 (in millions) Fixed maturity securities U.S. Treasuries $ — $ 120.2 $ — $ — $ 166.7 $ — U.S. Agencies — 24.4 — — 39.6 — States and municipalities — 854.5 — — 745.8 — Corporate securities — 925.3 — — 908.3 — Residential mortgage-backed securities — 237.9 — — 288.4 — Commercial mortgage-backed securities — 80.3 — — 65.4 — Asset-backed securities — 45.9 — — 61.5 — Total fixed maturity securities $ — $ 2,288.5 $ — $ — $ 2,275.7 $ — Equity securities $ 198.7 $ — $ — $ 172.7 $ — $ — The Company had no Level 3 investments during the years ended December 31, 2015 and 2014 . |
Investments
Investments | 12 Months Ended |
Dec. 31, 2015 | |
Investments [Abstract] | |
Investments | Investments The cost or amortized cost, gross unrealized gains, gross unrealized losses, and estimated fair value of the Company’s investments were as follows: Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value At December 31, 2015 (in millions) Fixed maturity securities U.S. Treasuries $ 116.4 $ 3.9 $ (0.1 ) $ 120.2 U.S. Agencies 23.0 1.4 — 24.4 States and municipalities 809.4 45.1 — 854.5 Corporate securities 913.4 19.9 (8.0 ) 925.3 Residential mortgage-backed securities 231.8 7.1 (1.0 ) 237.9 Commercial mortgage-backed securities 81.1 0.2 (1.0 ) 80.3 Asset-backed securities 46.0 — (0.1 ) 45.9 Total fixed maturity securities 2,221.1 77.6 (10.2 ) 2,288.5 Equity securities 137.5 65.8 (4.6 ) 198.7 Total investments $ 2,358.6 $ 143.4 $ (14.8 ) $ 2,487.2 At December 31, 2014 Fixed maturity securities U.S. Treasuries $ 160.9 $ 5.8 $ — $ 166.7 U.S. Agencies 37.2 2.4 — 39.6 States and municipalities 701.6 44.4 (0.2 ) 745.8 Corporate securities 880.7 30.8 (3.2 ) 908.3 Residential mortgage-backed securities 278.6 10.6 (0.8 ) 288.4 Commercial mortgage-backed securities 65.5 0.5 (0.6 ) 65.4 Asset-backed securities 61.6 — (0.1 ) 61.5 Total fixed maturity securities 2,186.1 94.5 (4.9 ) 2,275.7 Equity securities 97.8 75.5 (0.6 ) 172.7 Total investments $ 2,283.9 $ 170.0 $ (5.5 ) $ 2,448.4 The amortized cost and estimated fair value of fixed maturity securities at December 31, 2015 , by contractual maturity, are shown below. Expected maturities differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Amortized Cost Estimated Fair Value (in millions) Due in one year or less $ 113.6 $ 115.1 Due after one year through five years 859.3 884.5 Due after five years through ten years 636.9 657.1 Due after ten years 252.4 267.7 Mortgage and asset-backed securities 358.9 364.1 Total $ 2,221.1 $ 2,288.5 The following is a summary of investments that have been in a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for 12 months or greater as of December 31, 2015 and 2014 . December 31, 2015 December 31, 2014 Estimated Fair Value Gross Unrealized Losses Number of Issues Estimated Fair Value Gross Unrealized Losses Number of Issues Less than 12 months: (dollars in millions) Fixed maturity securities U.S. Treasuries $ 27.4 $ (0.1 ) 20 $ — $ — — States and municipalities — — — 20.6 (0.2 ) 5 Corporate securities 328.4 (4.7 ) 122 109.9 (0.8 ) 42 Residential mortgage-backed securities 50.5 (0.8 ) 24 — — — Commercial mortgage-backed securities 51.5 (1.0 ) 22 — — — Asset-backed securities 34.1 — 27 — — — Total fixed maturity securities 491.9 (6.6 ) 215 130.5 (1.0 ) 47 Equity securities 35.8 (4.6 ) 45 10.1 (0.6 ) 15 Total less than 12 months $ 527.7 $ (11.2 ) 260 $ 140.6 $ (1.6 ) 62 Greater than 12 months: Fixed maturity securities Corporate securities $ 34.6 $ (3.3 ) 15 $ 129.4 $ (2.4 ) 39 Residential mortgage-backed securities 7.1 (0.2 ) 25 44.1 (0.8 ) 36 Commercial mortgage-backed securities — — — 31.3 (0.6 ) 8 Asset-backed securities 11.1 (0.1 ) 4 18.3 (0.1 ) 6 Total fixed maturity securities 52.8 (3.6 ) 44 223.1 (3.9 ) 89 Total greater than 12 months $ 52.8 $ (3.6 ) 44 $ 223.1 $ (3.9 ) 89 Total available-for-sale: Fixed maturity securities U.S. Treasuries $ 27.4 $ (0.1 ) 20 $ — $ — — States and municipalities — — — 20.6 (0.2 ) 5 Corporate securities 363.0 (8.0 ) 137 239.3 (3.2 ) 81 Residential mortgage-backed securities 57.6 (1.0 ) 49 44.1 (0.8 ) 36 Commercial mortgage-backed securities 51.5 (1.0 ) 22 31.3 (0.6 ) 8 Asset-backed securities 45.2 (0.1 ) 31 18.3 (0.1 ) 6 Total fixed maturity securities 544.7 (10.2 ) 259 353.6 (4.9 ) 136 Equity securities 35.8 (4.6 ) 45 10.1 (0.6 ) 15 Total available-for-sale $ 580.5 $ (14.8 ) 304 $ 363.7 $ (5.5 ) 151 Based on reviews of the fixed maturity securities, the Company determined that unrealized losses for the years ended December 31, 2015 , 2014 , and 2013 were primarily the result of changes in prevailing interest rates and not the credit quality of the issuers. The fixed maturity securities whose fair value was less than amortized cost were not determined to be other-than-temporarily impaired given the severity and duration of the impairment, the credit quality of the issuers, the Company’s intent on not selling the securities, and a determination that it is not more likely than not that the Company will be required to sell the securities until fair value recovers to above amortized cost, or to maturity. Based on reviews of the equity securities, the Company recognized total impairments of $17.2 million , $0.5 million and $0.1 million in the fair values of 27 , seven , and one equity securities primarily as a result of the severity and duration of the change in fair values of those securities as of December 31, 2015 , 2014 , and 2013 , respectively. The remaining unrealized losses on equity securities were not considered to be other than temporary due to the financial condition and near-term prospects of the issuers. The other-than-temporary impairments of equity securities in 2015 were primarily due to the continued downturn in the energy sector during the fourth quarter. Net realized gains on investments and the change in unrealized gains (losses) on fixed maturity and equity securities are determined on a specific-identification basis and were as follows: Years Ended December 31, 2015 2014 2013 (in millions) Net realized gains on investments Fixed maturity securities Gross gains $ 0.5 $ 1.1 $ 0.7 Gross losses (0.4 ) — — Net realized gains on fixed maturity securities $ 0.1 $ 1.1 $ 0.7 Equity securities Gross gains $ 8.1 $ 15.7 $ 9.1 Gross losses (18.9 ) (0.5 ) (0.3 ) Net realized gains on equity securities $ (10.8 ) $ 15.2 $ 8.8 Total $ (10.7 ) $ 16.3 $ 9.5 Change in unrealized gain (losses) Fixed maturity securities $ (22.2 ) $ 23.1 $ (88.8 ) Equity securities (13.7 ) 2.2 28.6 Total $ (35.9 ) $ 25.3 $ (60.2 ) Net investment income was as follows: Years Ended December 31, 2015 2014 2013 (in millions) Fixed maturity securities $ 68.8 $ 70.7 $ 69.5 Equity securities 5.9 4.2 3.8 Cash equivalents and restricted cash 0.1 0.1 0.1 Gross investment income 74.8 75.0 73.4 Investment expenses (2.6 ) (2.6 ) (2.6 ) Net investment income $ 72.2 $ 72.4 $ 70.8 The Company is required by various state laws and regulations to keep securities or letters of credit in depository accounts with certain states in which it does business. As of December 31, 2015 and 2014 , securities having a fair value of $881.2 million and $783.9 million , respectively, were on deposit. These laws and regulations govern not only the amount but also the type of securities that are eligible for deposit. Certain reinsurance contracts require Company funds to be held in trust for the benefit of the ceding reinsurer to secure the outstanding liabilities assumed by the Company. The fair value of fixed maturity securities and restricted cash and cash equivalents held in trust for the benefit of the ceding reinsurers at December 31, 2015 and 2014 was $32.7 million and $33.3 million , respectively. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Property and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure | Property and Equipment Property and equipment consists of the following: As of December 31, 2015 2014 (in millions) Furniture and equipment $ 2.3 $ 2.3 Leasehold improvements 4.3 4.4 Computers and software 56.7 46.0 Automobiles 1.2 1.2 64.5 53.9 Accumulated amortization and depreciation (39.6 ) (32.9 ) Property and equipment, net $ 24.9 $ 21.0 Depreciation and amortization expenses related to property and equipment for the years ended December 31, 2015 , 2014 , and 2013 were $7.8 million , $6.3 million , and $5.2 million , respectively. Internally developed software costs of $1.2 million and $0.8 million were capitalized during each of the years ended December 31, 2015 and 2014 . |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes [Abstract] | |
Income Taxes | Income Taxes The Company files a consolidated federal income tax return. The insurance subsidiaries pay premium taxes on gross premiums written in lieu of some states' income or franchise taxes. The provision for income taxes consisted of the following: Years Ended December 31, 2015 2014 2013 Current tax expense: (in millions) Federal $ 9.5 $ 6.3 $ 0.1 State 1.1 0.1 — Total current tax expense 10.6 6.4 0.1 Deferred federal tax benefit (5.6 ) (0.5 ) (10.8 ) Income tax expense (benefit) $ 5.0 $ 5.9 $ (10.7 ) The difference between the statutory federal tax rate of 35% and the Company's effective tax rate on net income before income taxes as reflected in the consolidated statements of comprehensive income was as follows: Years Ended December 31, 2015 2014 2013 (in millions) Expense computed at statutory rate $ 34.8 $ 37.3 $ 18.6 Dividends received deduction and tax-exempt interest (8.6 ) (8.8 ) (9.1 ) Pre-Privatization reserve adjustments, excluding LPT (15.3 ) (3.6 ) (7.4 ) LPT deferred gain amortization (4.9 ) (8.4 ) (6.6 ) LPT Reserve Adjustment (2.2 ) (10.9 ) (6.7 ) Other 1.2 0.3 0.5 Income tax expense (benefit) $ 5.0 $ 5.9 $ (10.7 ) On January 1, 2000, EICN assumed the assets, liabilities, and operations of the Fund pursuant to legislation passed in the 1999 Nevada Legislature (the Privatization). Prior to the Privatization, the Fund was a part of the State of Nevada and therefore was not subject to federal income tax; accordingly, it did not take an income tax deduction with respect to the establishment of its unpaid loss and LAE reserves. Due to favorable loss experience after the Privatization, it was determined that certain of the pre-Privatization unpaid loss and LAE reserves assumed by EICN as part of the Privatization were no longer necessary and the unpaid loss and LAE reserves were reduced accordingly. Such downward adjustments of pre-Privatization unpaid loss reserves increased GAAP net income by $15.3 million , $3.6 million , and $7.4 million for the years ended December 31, 2015 , 2014 , and 2013 , respectively, but did not increase taxable income. There were downward adjustments of pre-Privatization unpaid loss reserves, excluding the LPT, of $56.3 million , $13.1 million , and $27.2 million for the years ended December 31, 2015 , 2014 , and 2013 , respectively. The LPT Reserve Adjustments for the years ended December 31, 2015 , 2014 , and 2013 increased GAAP net income by $6.4 million , $31.1 million , and $19.0 million , respectively, but did not increase taxable income. The LPT Contingent Commission Adjustments increased net income by $2.6 million , $10.8 million , and $4.3 million during 2015, 2014, and 2013, respectively, but did not increase taxable income. As of December 31, 2015 and 2014 , the Company had no unrecognized tax benefits. Tax years 2012 through 2015 are subject to full examination by the federal taxing authority. The significant components of deferred income taxes, net, were as follows as of December 31: 2015 2014 Deferred Tax Deferred Tax Assets Liabilities Assets Liabilities (in millions) Unrealized capital gains, net $ — $ 45.0 $ — $ 57.6 Deferred policy acquisition costs — 15.7 — 15.7 Intangible assets — 3.0 — 3.2 Loss reserve discounting for tax reporting 56.3 — 56.7 — Unearned premiums 20.9 — 20.9 — Allowance for bad debt 4.3 — 2.7 — Stock based compensation 4.1 — 5.8 — Accrued liabilities 8.4 — 7.5 — Minimum tax credit 28.0 — 19.6 — Net operating loss carryforward 8.7 — 16.2 — Other 8.4 7.5 2.5 5.7 Total $ 139.1 $ 71.2 $ 131.9 $ 82.2 Deferred income taxes, net $ 67.9 $ 49.7 At December 31, 2015 , the Company had a $25.0 million net operating loss carry-forward. This is due to expire beginning 2032 through 2033. At December 31, 2015 , the Company had a minimum tax credit of $28.0 million that may be carried forward indefinitely. Deferred tax assets are required to be reduced by a valuation allowance if it is more likely than not that all or some portion of the deferred tax asset will not be realized. Realization of the deferred income tax asset is dependent on the Company generating sufficient taxable income in future years as the deferred income tax charges become currently deductible for tax reporting purposes. Although realization is not assured, management believes that it is more likely than not that the net deferred income tax asset will be realized. |
Liability for Unpaid Losses and
Liability for Unpaid Losses and Loss Adjustment Expenses | 12 Months Ended |
Dec. 31, 2015 | |
Liability for Unpaid Losses and Loss Adjustment Expenses [Abstract] | |
Liability for Unpaid Losses and Loss Adjustment Expenses | Liability for Unpaid Losses and Loss Adjustment Expenses The following table represents a reconciliation of changes in the liability for unpaid losses and LAE. Years Ended December 31, 2015 2014 2013 (in millions) Unpaid losses and LAE, gross of reinsurance, at beginning of period $ 2,369.7 $ 2,330.5 $ 2,231.5 Less reinsurance recoverable, excluding bad debt allowance, on unpaid losses and LAE 669.5 743.1 805.4 Net unpaid losses and LAE at beginning of period 1,700.2 1,587.4 1,426.1 Losses and LAE, net of reinsurance, incurred in: Current year 456.9 503.8 494.5 Prior years (7.2 ) 4.6 7.0 Total net losses and LAE incurred during the period 449.7 508.4 501.5 Paid losses and LAE, net of reinsurance, related to: Current year 75.4 75.9 78.5 Prior years 355.2 319.7 261.7 Total net paid losses and LAE during the period 430.6 395.6 340.2 Ending unpaid losses and LAE, net of reinsurance 1,719.3 1,700.2 1,587.4 Reinsurance recoverable, excluding bad debt allowance, on unpaid losses and LAE 628.2 669.5 743.1 Unpaid losses and LAE, gross of reinsurance, at end of period $ 2,347.5 $ 2,369.7 $ 2,330.5 Total net losses and LAE included in the above table excludes the impact of the amortization of the Deferred Gain and the LPT Reserve Adjustment (Note 10 ). In 2015, the Company had $7.2 million of favorable prior accident year loss development, which included $9.0 million of favorable prior accident year loss development on its voluntary risk business, which was partially offset by $1.8 million of unfavorable loss development related to its assigned risk business. In 2014, the increase in the estimate of incurred losses and LAE attributable to insured events in prior years was primarily related to the Company's assigned risk business. In 2013, the increase in the estimate of incurred losses and LAE attributable to insured events in prior years included $5.0 million related to actual paid losses that were more than expected and the impact of new information on selected patterns of claims emergence and payments used in the projection of future loss payments and $1.9 million related to the Company's assigned risk business. In California, where the Company's operations began on July 1, 2002, the actuaries' and management's initial expectations of ultimate losses and patterns of loss emergence and payment were based on benchmarks derived from analyses of historical insurance industry data in California. No historical data from the Company's California insurance subsidiary existed prior to July 1, 2002; however, some historical data was available for the prior years for some of the market segments the Company entered in California, but was limited as to the number of loss reserve evaluation points available. The industry-based benchmarks were judgmentally adjusted for the anticipated impact of significant environmental changes, specifically the enactment of major changes to the statutory workers' compensation benefit structure and the manner in which claims are administered and adjudicated in California. The actual emergence and payment of claims by the Company's California insurance subsidiary have been more favorable than those initial expectations through 2008, due in part to the enactment of the major changes in the California workers' compensation environment. The Company's recent loss experience, from 2010 through 2015, indicates an upward trend in medical costs that is reflected in our loss reserves; however, the Company's indemnity claims frequency (the number of claims expressed as a percentage of payroll) decreased year-over-year in 2015 and 2014. The Company's estimates assume that increasing medical cost trends will continue and will impact the Company's long-term claims costs and loss reserves. The Company continues to develop its own loss experience in California and will rely more on its experience and less on historical industry data in projecting its reserve requirements as such data becomes available. As the actual experience of the Company emerges, it will continue to evaluate prior estimates, which may result in additional adjustments in reserves. In Nevada, the Company has compiled a lengthy history of workers' compensation claims payment patterns based on the business of the Fund and EICN, but the emergence and payment of claims in recent years has been more favorable than in the long-term history in Nevada with the Fund. The expected patterns of claim payments and emergence used in the projection of the Company's ultimate claim payments are based on both the long and short-term historical paid data. In recent evaluations, claim patterns have continued to emerge in a manner consistent with short-term historical data. Consequently, for California and Nevada, the Company has relied more heavily on claim projection patterns observed in recent years. Loss reserves shown in the consolidated balance sheets are net of $26.8 million and $25.1 million for anticipated subrogation recoveries as of December 31, 2015 and 2014 , respectively. |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2015 | |
Reinsurance [Abstract] | |
Reinsurance | Reinsurance The Company is involved in the cession and assumption of reinsurance with non-affiliated companies. Risks are reinsured with other companies on both a quota share and excess of loss basis. Reinsurance transactions reflected in the accompanying consolidated statements of comprehensive income were as follows: Years Ended December 31, 2015 2014 2013 Written Earned Written Earned Written Earned (in millions) Direct premiums $ 684.9 $ 686.0 $ 686.8 $ 684.3 $ 680.5 $ 645.4 Assumed premiums 12.8 12.8 10.9 10.3 9.4 8.3 Gross premiums 697.7 698.8 697.7 694.6 689.9 653.7 Ceded premiums (8.4 ) (8.4 ) (10.1 ) (10.1 ) (11.4 ) (11.4 ) Net premiums $ 689.3 $ 690.4 $ 687.6 $ 684.5 $ 678.5 $ 642.3 Ceded losses and LAE incurred $ 10.1 $ 17.2 $ 10.7 Ceded losses and LAE incurred includes the amortization of the Deferred Gain, LPT Reserve Adjustments, and LPT Contingent Commission Adjustments. Excess of Loss Reinsurance The Company has consistently maintained excess of loss reinsurance coverage to protect it against the impact of large and/or catastrophic losses in its workers' compensation business. The Company currently maintains reinsurance for losses from a single occurrence or catastrophic event in excess of $7.0 million and up to $200.0 million , subject to certain exclusions. The reinsurance coverage includes coverage for acts of terrorism, excluding nuclear, biological, chemical, and radiological events. Any liability outside the coverage limits of the reinsurance program is retained by the Company. The Company's current reinsurance program is effective July 1, 2015 through June 30, 2016 . The Company's reinsurance programs covering older accident years have generally had similar terms. LPT Agreement Recoverables from reinsurers on unpaid losses and LAE amounted to $628.2 million and $669.5 million at December 31, 2015 and 2014 , respectively. At each of December 31, 2015 and 2014 , $498.0 million and $534.8 million , respectively, of those recoverables was related to the LPT Agreement that was entered into in 1999 by the Fund and assumed by EICN. Under the LPT Agreement, substantially all of the Fund's losses and LAE on claims incurred prior to July 1, 1995, have been ceded to three unaffiliated reinsurers on a 100% quota share basis. Investments have been placed in trust by the three reinsurers as security for payment of the reinsured claims. Under the LPT Agreement, initially $1.5 billion in liabilities for the incurred but unpaid losses and LAE related to claims incurred prior to July 1, 1995, were reinsured for consideration of $775.0 million . The LPT Agreement provides coverage up to $2.0 billion . Through December 31, 2015 , the Company has paid losses and LAE claims totaling $695.2 million related to the LPT Agreement. The Company amortized $11.4 million , $13.1 million , and $14.6 million of the Deferred Gain for the years ended December 31, 2015 , 2014 , and 2013 , respectively. Additionally, the Deferred Gain was reduced by $6.4 million , $31.1 million and $19.0 million for the years ended December 31, 2015 , 2014 , and 2013 , respectively, due to favorable LPT Reserve Adjustments and by $2.6 million , $10.8 million , and $4.3 million for the years ended December 31, 2015 , 2014 , and 2013 , respectively, due to favorable LPT Contingent Commission Adjustments (Note 2 ). |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2015 | |
Notes Payable [Abstract] | |
Notes Payable | Notes Payable Notes payable is comprised of the following: December 31, 2015 2014 (in millions) Credit facility, with variable interest, as described below $ — $ 60.0 Dekania Surplus Note, due April 30, 2034 with variable interest of 425 basis points above 90-day LIBOR 10.0 10.0 ICONS Surplus Note, due May 26, 2034 with variable interest of 425 basis points above 90-day LIBOR 12.0 12.0 Alesco Surplus Note, due December 15, 2034 with variable interest of 405 basis points above 90-day LIBOR 10.0 10.0 Balance $ 32.0 $ 92.0 On December 28, 2010, the Company entered into a credit facility, under which the Company was provided with: (a) $100.0 million line of credit through December 31, 2011; (b) $90.0 million line of credit from January 1, 2012 through December 31, 2012; (c) $80.0 million line of credit from January 1, 2013 through December 31, 2013; (d) $70.0 million line of credit from January 1, 2014 through December 31, 2014; and (e) $60.0 million line of credit from January 1, 2015 through December 31, 2015. Amounts outstanding bear interest at a rate equal to, at our option: (a) a fluctuating rate of 1.75% above prime rate or (b) a fixed rate that is 1.75% above the LIBOR rate then in effect. Interest paid during the years ended December 31, 2015 , 2014 , and 2013 totaled $1.3 million , $1.4 million , and $1.6 million , respectively. In accordance with the terms of the contract, the remaining principal balance of $60.0 million was repaid on the credit facility during the fourth quarter of 2015 . EPIC has a $10.0 million surplus note to Dekania CDO II, Ltd. issued as part of a pooled transaction. The note matures in 2034 and became callable by the Company in the second quarter of 2009 . The terms of the note provide for quarterly interest payments at a rate 425 basis points in excess of the 90-day LIBOR. Both the payment of interest and repayment of the principal under this note and the surplus notes described in the succeeding two paragraphs are subject to the prior approval of the Florida Department of Financial Services. Interest paid during each of the years ended December 31, 2015 , 2014 , and 2013 was $0.5 million . Interest accrued as of December 31, 2015 and 2014 was $0.1 million . EPIC has a $12.0 million surplus note to ICONS, Inc. issued as part of a pooled transaction. The note matures in 2034 and became callable by the Company in the second quarter of 2009 . The terms of the note provide for quarterly interest payments at a rate 425 basis points in excess of the 90-day LIBOR. Interest paid during each of the years ended December 31, 2015 , 2014 , and 2013 was $0.6 million , $0.5 million and $0.6 million , respectively. Interest accrued as of December 31, 2015 and 2014 was $0.1 million . EPIC has a $10.0 million surplus note to Alesco Preferred Funding V, LTD issued as part of a pooled transaction. The note matures in 2034 and became callable by the Company in the fourth quarter of 2009 . The terms of the note provide for quarterly interest payments at a rate 405 basis points in excess of the 90-day LIBOR. Interest paid during each of the years ended December 31, 2015 , 2014 , and 2013 was $0.4 million . Interest accrued as of December 31, 2015 and 2014 was less than $0.1 million . Principal payment obligations on notes payable outstanding at December 31, 2015 , were as follows: Year Principal Due (in millions) 2016 $ — 2017 — 2018 — 2019 — 2020 — Thereafter 32.0 Total $ 32.0 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies Disclosure | Commitments and Contingencies Leases The Company leases office facilities and certain equipment under operating and capital leases. Most leases have renewal options, typically with increased rental rates during the option period. Certain of these leases contain options to purchase the property at amounts that approximate fair market value; other leases contain options to purchase at a bargain purchase price. At December 31, 2015 , the remaining lease terms expire over the next six years . The future lease payments for the next five years on these non-cancelable operating and capital leases at December 31, 2015 , were as follows: Year Operating Leases Capital Leases (in millions) 2016 $ 4.9 $ 0.3 2017 4.8 0.3 2018 3.5 0.2 2019 3.0 — 2020 2.6 — Thereafter 1.1 — Total $ 19.9 $ 0.8 Included in the future minimum capital lease payments are future interest charges of $0.1 million . Facilities rent expense was $4.9 million , $4.8 million , and $5.0 million for the years ended December 31, 2015 , 2014 , and 2013 , respectively. Property held under capital leases is included in property and equipment as follows: Asset Class 2015 2014 (in millions) Computers and software $ 0.4 $ 0.9 Automobiles 1.2 1.2 1.6 2.1 Accumulated amortization (1.0 ) (1.0 ) Total $ 0.6 $ 1.1 Contingencies Surrounding Insurance Assessments All of the states where the Company's insurance subsidiaries are licensed to transact business require property and casualty insurers doing business within the respective state to pay various insurance assessments. The Company accrues a liability for estimated insurance assessments as direct premiums are written, losses are recorded, or as other events occur in accordance with various states' laws and regulations, and defers these costs and recognizes them as an expense as the related premiums are earned. The Company had an accrued liability for guaranty fund assessments, second injury funds assessments, and other insurance assessments totaling $22.0 million and $18.8 million as of December 31, 2015 and 2014 , respectively. These liabilities are generally expected to be paid over one to eighty year periods based on individual state's regulations. The Company also recorded an asset of $21.4 million and $13.0 million , as of December 31, 2015 and 2014 , respectively, for prepaid policy charges still to be collected in the future from policyholders, assessments that may be recovered through a reduction in future premium taxes in certain states, and for expected refunds of certain prepaid assessments based on a change in the Company's premium over time. These assets are expected to be realized over one to ten year periods in accordance with their type and individual state's regulations. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2015 | |
Stockholders' Equity Attributable to Parent [Abstract] | |
Treasury Stock | Stockholders' Equity Stock Repurchase Programs Since the Company's initial public offering in January 2007 through December 31, 2015 , the Company repurchased a total of 23,372,974 shares of common stock at an average cost per share of $15.51 , which is reported as treasury stock, at cost, on the accompanying consolidated balance sheets. There were no stock repurchase programs authorized by the Board of Directors as of December 31, 2015 . |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2015 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Employers Holdings, Inc. Amended and Restated Equity and Incentive Plan (the Plan) is administered by the Compensation Committee of the Board of Directors, which is authorized to grant, at its discretion, awards to officers, employees, non-employee directors, consultants, and independent contractors. The maximum number of common shares reserved for grants of awards under the Plan was 7,105,838 shares, prior to reductions for grants made. The Plan provides for the grant of stock options (both incentive stock options and nonqualified stock options), stock appreciation rights, shares of restricted stock, restricted stock units (RSUs), performance stock units (PSUs), and other stock-based awards. As of December 31, 2015 , nonqualified stock options, RSUs, and PSUs have been granted, but no incentive stock options, stock appreciation rights, or shares of restricted stock have been granted under the Plan. Compensation costs are recognized based on expected performance, if applicable, net of any estimated forfeitures on a straight-line basis over the employee requisite service periods. Forfeiture rates are based on historical experience and are adjusted in subsequent periods for differences in actual forfeitures from those estimated. Net stock-based compensation expense recognized in the accompanying consolidated statements of comprehensive income was as follows: Years Ended December 31, 2015 2014 2013 Stock-based compensation expense related to: (in millions) Nonqualified stock options $ 1.0 $ 1.2 $ 1.7 RSUs 2.0 1.9 2.3 PSUs 1.6 2.9 1.6 Total 4.6 6.0 5.6 Less: related tax benefit 1.6 2.1 2.0 Net stock-based compensation expense $ 3.0 $ 3.9 $ 3.6 Nonqualified Stock Options The fair value of the stock options granted is estimated using a Black-Scholes option pricing model that uses the assumptions noted in the following table. During the years ended December 31, 2015 , 2014 , and 2013 , the expected stock price volatility used to value the options granted in 2015 , 2014 , and 2013 was based on the volatility of the Company's historical stock price since February 2007. The expected term of the options granted in 2015 , 2014 , and 2013 was calculated using the 'plain-vanilla' calculation provided in the guidance of the Securities and Exchange Commission's Staff Accounting Bulletin No. 107. The dividend yield was calculated using amounts authorized by the Board of Directors. The risk-free interest rate is the yield on the grant date of the options of U.S. Treasury zero coupon securities with a maturity comparable to the expected term of the options. The Company anticipates issuing new shares upon exercise of stock options. The fair value of the stock options granted during the years ended December 31, 2015 , 2014 , and 2013 was calculated using the following weighted average assumptions: 2015 2014 2013 Expected volatility 38.0 % 39.0 % 40.1 % Expected life (in years) 4.8 4.8 4.8 Dividend yield 1.0 % 1.2 % 1.1 % Risk-free interest rate 1.6 % 1.6 % 0.8 % Weighted average grant date fair values of options granted $7.63 $6.66 $7.04 Changes in outstanding stock options for the year ended December 31, 2015 were as follows: Number of Options Weighted-Average Exercise Price Weighted Average Remaining Contractual Life Options outstanding at December 31, 2012 1,830,772 $ 16.97 3.7 years Granted 162,800 22.24 6.2 years Exercised (411,295 ) 17.89 Expired (6,900 ) 17.00 Forfeited (28,479 ) 18.90 Options outstanding at December 31, 2013 1,546,898 17.24 3.4 years Granted 141,744 20.87 6.2 years Exercised (120,494 ) 17.89 Expired (2,400 ) 17.00 Forfeited (44,458 ) 19.99 Options outstanding at December 31, 2014 1,521,290 17.45 2.9 years Granted 80,800 24.20 6.2 years Exercised (463,466 ) 16.43 Forfeited (17,079 ) 20.21 Options outstanding at December 31, 2015 1,121,545 18.31 2.8 years Exercisable at December 31, 2015 849,312 17.28 2.1 years At December 31, 2015 , the Company had yet to recognize $1.4 million in deferred compensation related to nonqualified stock option grants and expects to recognize these costs on a straight-line basis over the next 39 months . The fair value of options vested and the intrinsic value of outstanding and exercisable options as of December 31, were as follows: 2015 2014 2013 (in millions) Fair value of options vested $ 1.3 $ 1.6 $ 1.8 Intrinsic value of outstanding options 10.1 9.2 22.3 Intrinsic value of exercisable options 8.5 7.8 15.2 The intrinsic value of options exercised was $4.0 million , $0.5 million , and $3.7 million for the years ended December 31, 2015 , 2014 , and 2013 . RSUs The Company has awarded RSUs to non-employee members of the Board of Directors and certain officers of the Company. The RSUs awarded to non-employee members of the Board of Directors generally vest on the first anniversary of the award date. RSU grants allow each non-employee Director to decide whether to defer settlement of the RSUs until six months after termination of Board service or settle the RSUs at vesting. Dividend equivalents are granted to Directors who elected to defer settlement of the RSUs after the grants vested. RSUs awarded to officers of the Company have a service vesting period of approximately four years from the date awarded and vest 25% on or after each of the subsequent four anniversaries of such date . These RSUs are subject to accelerated vesting in certain limited circumstances, such as: retirement, death or disability of the holder, or in connection with a change of control of the Company. Changes in outstanding RSUs for the year ended December 31, 2015 were as follows: Number of RSUs Weighted Average Grant Date Fair Value RSUs outstanding at December 31, 2012 406,262 $ 16.65 Granted 84,215 23.57 Forfeited (10,924 ) 18.85 Vested (121,207 ) 15.97 RSUs outstanding at December 31, 2013 358,346 18.44 Granted 87,396 21.02 Forfeited (16,690 ) 20.18 Vested (122,185 ) 18.26 RSUs outstanding at December 31, 2014 306,867 19.15 Granted 112,048 24.19 Forfeited (7,749 ) 20.99 Vested (92,133 ) 19.74 RSUs outstanding at December 31, 2015 319,033 20.71 Vested but unsettled RSUs at December 31, 2015 124,149 17.73 At December 31, 2015 , the Company had yet to recognize $3.2 million in deferred compensation related to RSU grants and expects to recognize these costs on a straight-line basis over the next 39 months . The grant date fair value of RSUs vested and the intrinsic value of vested RSUs for the years ended December 31, were as follows: 2015 2014 2013 (in millions) Grant date fair value of RSUs vested $ 1.7 $ 2.2 $ 1.9 Intrinsic value of vested RSUs 2.2 2.7 2.9 The intrinsic value of outstanding RSUs was $8.7 million , $7.2 million , and $11.3 million at December 31, 2015 , 2014 , and 2013 . PSUs The Company awarded PSUs to certain officers of the Company as follows: Date of Grant Target Number Awarded Fair Value on Date of Grant Aggregate Fair Value on Date of Grant (in millions) March 2013 (1) 147,440 $ 22.24 $ 3.3 March 2014 (1) 125,340 20.87 2.6 March 2015 (2) 110,000 24.20 2.7 (1) The PSUs granted in 2013 and 2014 have a performance period of three years and are subject to certain performance goals, based on the Company's statutory combined ratio, with payouts that range from 0% to 200% of the target awards. The ultimate payout of the PSUs awarded in 2013 was 0% of the target award. (2) The PSUs awarded in March 2015 were awarded to certain officers of the Company and have a performance period of two years followed by an additional one year vesting period. The PSU awards are subject to certain performance goals with payouts that range from 0% to 200% of the target awards. The value shown in the table represents the aggregate number of PSUs awarded at the target level. At December 31, 2015 , the Company had yet to recognize $4.4 million in deferred compensation related to PSU grants and expects to recognize these costs on a straight-line basis over the next 24 months . This is based on the expectation of the Company achieving a 80% target rate for the 2014 PSUs and 200% for the 2015 PSUs. |
Statutory Matters
Statutory Matters | 12 Months Ended |
Dec. 31, 2015 | |
Stautory Matters [Abstract] | |
Statutory Financial Data Disclosure | Statutory Matters Statutory Financial Data The combined capital stock, surplus, and net income of the Company's insurance subsidiaries (EICN, ECIC, EPIC, and EAC), prepared in accordance with the statutory accounting practices (SAP) of the National Association of Insurance Commissioners (NAIC) as well as SAP permitted by the states of California, Florida, and Nevada, were as follows: December 31, 2015 2014 (in millions) Capital stock and unassigned surplus $ 498.8 $ 413.8 Paid in capital 174.9 174.9 Surplus notes 32.0 32.0 Total statutory surplus $ 705.7 $ 620.7 Net income for the Company's insurance subsidiaries prepared in accordance with SAP for the years ended December 31, 2015 , 2014 and 2013 was $87.8 million , $58.6 million and $19.3 million , respectively. Treatment of the LPT Agreement, deferred policy acquisition costs, fair value of financial instruments, and the surplus notes (see Notes 5 , 10 , and 11 ) are the primary differences in the SAP-basis capital stock and total surplus of the insurance subsidiaries of $705.7 million and $620.7 million , and the GAAP-basis equity of the Company of $760.8 million and $686.8 million as of December 31, 2015 and 2014 , respectively. Under SAP accounting, the retroactive reinsurance gain resulting from the LPT Agreement is recorded as a special component of surplus (special surplus funds) in the initial year of the contract, and not reported as unassigned surplus until the Company has recovered amounts in excess of the original consideration paid. The special surplus funds are also reduced by the amount of extraordinary dividends as approved by the Nevada Division of Insurance. Under SAP, the surplus notes are recorded as a separate component of surplus. Under SAP, changes to the estimated contingent profit commission under the LPT Agreement are reflected in commission expense in the period that the estimate is revised. Insurance Company Dividends The ability of EHI to pay dividends on the Company's common stock and to pay other expenses will be dependent to a significant extent upon the ability of the Nevada domiciled insurance company, EICN, and the Florida domiciled insurance company, EPIC, to pay dividends to their immediate holding company, Employers Group, Inc. (EGI) and, in turn, the ability of EGI to pay dividends to EHI. ECIC and EAC have the ability to declare and pay dividends to EICN and EPIC, respectively, subject to certain restrictions. The amount of dividends each of the Company's subsidiaries may pay to their immediate parent is limited by the laws of its respective state of domicile. Nevada law limits the payment of cash dividends by EICN to its parent by providing that payments cannot be made except from available and accumulated surplus, otherwise unrestricted (unassigned), and derived from realized net operating profits and realized and unrealized capital gains. A stock dividend may be paid out of any available surplus. A cash or stock dividend prohibited by these restrictions may only be declared and distributed as an extraordinary dividend upon the prior approval of the Nevada Commissioner of Insurance (Nevada Commissioner). EICN may not pay such an extraordinary dividend or make an extraordinary distribution until the Nevada Commissioner either approves or does not disapprove the payment within 30 days after receiving notice of its declaration. An extraordinary dividend or distribution is defined by statute to include any dividend or distribution of cash or property whose fair market value, together with that of other dividends or distributions made within the preceding 12 months, exceeds the greater of: (a) 10% of EICN's statutory surplus as regards to policyholders at the next preceding December 31; or (b) EICN's statutory net income, not including realized capital gains, for the 12-month period ending at the next preceding December 31. As of December 31, 2015 , EICN had positive unassigned surplus of $423.1 million . During 2015 , EICN did not pay any dividends. The maximum dividends that may be paid in 2016 by EICN without prior approval is $49.7 million . Under Florida law, without regulatory approval, EPIC may pay dividends if they do not exceed the greater of: the lesser of 10% of surplus or net income, not including realized capital gains, plus a 2-year carry forward; 10% of surplus, with dividends payable limited to unassigned funds minus 25% of unrealized capital gains; or, the lesser of 10% of surplus or net investment income plus a 3-year carry forward with dividends payable limited to unassigned funds minus 25% of unrealized capital gains. During 2015 , EPIC did not pay any dividends. The maximum dividends that may be paid in 2016 by EPIC without prior approval is $28.1 million . Regulatory Requirements and Restrictions ECIC is subject to regulation by the California Department of Insurance (California DOI). The ability of ECIC to pay dividends was further limited by restrictions imposed by the California DOI in its approval of the Company's October 1, 2008 reinsurance pooling agreement. Under that approval: (a) ECIC must initiate discussions of its business plan with the California DOI if its net written premium to policyholder surplus ratio exceeds 1.5 to 1 ; (b) ECIC will not exceed a ratio of net written premium to policyholder surplus of 2 to 1 without approval of the California DOI; (c) if at any time ECIC's policyholder surplus decreases to 80% or less than the September 30, 2008 balance, ECIC shall cease issuing new policies in California, but may continue to renew existing policies until it has (i) received a capital infusion to bring its surplus position to the same level as that as of September 30, 2008 and (ii) submitted a new business plan to the California DOI; (d) ECIC will maintain a risk based capital (RBC) level of at least 350% of the authorized control level; (e) should ECIC fail to comply with any commitments listed herein, ECIC will consent to any request by the California DOI to cease issuing new policies in California, but may continue to renew existing policies until such time that as ECIC is able to achieve full compliance with each commitment; and (f) the obligations listed shall only terminate with the written consent of the California DOI. During the years ended December 31, 2015 , 2014 , and 2013 , ECIC was in compliance with these requirements. EPIC and EAC are subject to regulation by the Florida Department of Financial Services (FDFS). Florida statute Section 624.408 requires EPIC and EAC to maintain minimum capital and surplus of the greater of $4.0 million or 10% of total liabilities. Florida statute Section 624.4095 requires EPIC and EAC to maintain a ratio of written premiums times 1.25 to surplus of no greater than 10-to-1 for gross written premiums and 4-to-1 for net written premiums. During the years ended December 31, 2015 , 2014 , and 2013 , EPIC and EAC were in compliance with these statutes. Additionally, EICN, ECIC, EPIC, and EAC are required to comply with NAIC RBC requirements. RBC is a method of measuring the amount of capital appropriate for an insurance company to support its overall business operations in light of its size and risk profile. NAIC RBC standards are used by regulators to determine appropriate regulatory actions relating to insurers that show signs of weak or deteriorating conditions. As of December 31, 2015 , 2014 , and 2013 , EICN, ECIC, EPIC, and EAC each had total adjusted capital above all regulatory action levels. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income, Net | 12 Months Ended |
Dec. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income, Net | Accumulated Other Comprehensive Income, Net Accumulated other comprehensive income, net, is comprised of unrealized gains on investments classified as available-for-sale, net of deferred tax expense. The following table summarizes the components of accumulated other comprehensive income, net: Years Ended December 31, 2015 2014 (in millions) Net unrealized gain on investments, before taxes $ 128.6 $ 164.5 Deferred tax expense on net unrealized gains (45.0 ) (57.6 ) Total accumulated other comprehensive income, net $ 83.6 $ 106.9 |
Employee Benefit and Retirement
Employee Benefit and Retirement Plans | 12 Months Ended |
Dec. 31, 2015 | |
Employee Benefit and Retirement Plans [Abstract] | |
Compensation and Employee Benefit Plans | Employee Benefit and Retirement Plans The Company maintains a 401(k) defined contribution plan covering all eligible Company employees (the Employers 401(k) Plan). Under the Employers 401(k) Plan, the Company's safe harbor matching consists of 100% matching contribution on salary deferrals up to 3% of compensation and then 50% matching contribution on salary deferrals from 3% to 5% of compensation. The Company's contribution to the Employers 401(k) Plan was $1.8 million , $1.7 million , and $1.2 million for the years ended December 31, 2015 , 2014 , and 2013 , respectively. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share includes no dilution and is computed by dividing income applicable to stockholders by the weighted average number of shares outstanding for the period. Diluted earnings per share reflect the potential dilutive impact of all convertible securities on earnings per share. Diluted earnings per share includes shares assumed issued under the “treasury stock method,” which reflects the potential dilution that would occur if outstanding RSUs and PSUs vested, and options were to be exercised. The following table presents the net income and the weighted average shares outstanding used in the earnings per share common share calculations. Years Ended December 31, 2015 2014 2013 (in millions, except share data) Net income available to stockholders–basic and diluted $ 94.4 $ 100.7 $ 63.8 Weighted average number of shares outstanding–basic 32,070,911 31,529,621 31,142,534 Effect of dilutive securities: Stock options 286,764 223,811 464,334 PSUs 155,768 264,511 177,040 RSUs 48,010 51,126 154,259 Dilutive potential shares 490,542 539,448 795,633 Weighted average number of shares outstanding–diluted 32,561,453 32,069,069 31,938,167 Diluted earnings per share excludes outstanding options and other common stock equivalents in periods where the inclusion of such options and common stock equivalents would be anti-dilutive. The following table presents options, PSUs and RSUs that were excluded from diluted earnings per share. Years Ended December 31, 2015 2014 2013 Options excluded as the exercise price was greater than the average market price 20,200 173,247 — Options, PSUs and RSUs excluded under the treasury method, as the potential proceeds on settlement or exercise was greater than the value of shares acquired 257,405 260,171 162,800 |
Selected Quarterly Financial Da
Selected Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2015 | |
Selecled Quarterly Financial Data (Unaudited) [Abstract] | |
Quarterly Financial Information | Selected Quarterly Financial Data (Unaudited) Quarterly results for the years ended December 31, 2015 and 2014 were as follows: 2015 Quarters Ended March 31 June 30 September 30 December 31 (in millions, except per share data) Net premiums earned $ 159.0 $ 170.6 $ 179.0 $ 181.8 Net realized gains (losses) on investments 1.2 1.9 2.0 (15.8 ) Losses and loss adjustment expenses 106.2 101.5 115.8 105.9 Commission expense 18.7 22.9 21.0 22.8 Underwriting and other operating expenses 33.5 32.5 31.6 37.6 Income tax expense (benefit) 4.1 4.1 5.9 (9.1 ) Net income 14.0 29.2 24.5 26.7 Earnings per common share: Basic 0.44 0.91 0.76 0.83 Diluted 0.43 0.90 0.75 0.82 2014 Quarters Ended March 31 June 30 September 30 December 31 (in millions, except per share data) Net premiums earned $ 167.2 $ 172.6 $ 172.1 $ 172.6 Net realized gains on investments 3.3 9.2 1.8 2.0 Losses and loss adjustment expenses 122.3 98.5 122.4 110.2 Commission expense 20.0 20.4 20.6 20.4 Underwriting and other operating expenses 33.3 33.1 31.9 30.9 Income tax expense 1.3 2.0 1.3 1.3 Net income 10.8 45.6 15.2 29.1 Earnings per common share: Basic 0.34 1.45 0.48 0.92 Diluted 0.34 1.42 0.47 0.91 Fourth Quarter Adjustments The fourth quarter of 2015 was impacted by two changes in estimates: (1) favorable prior accident year loss development of $8.5 million , which included $9.0 million of favorable prior accident year loss development on the Company's voluntary risk business, partially offset by $0.5 million of unfavorable loss development related to assigned risk business, that increased net income by $8.5 million or $0.26 per basic and diluted share; and (2) a $36.9 million reallocation of reserves from non-taxable periods prior to January 1, 2000 to taxable years, which reduced our effective tax rate by 65.3 percentage points, resulting in an increase to net income of $11.5 million , or $0.36 and $0.35 per basic and diluted share, respectively. The fourth quarter of 2014 was impacted by two changes in estimates, including: (1) a favorable LPT Reserve Adjustment, which reduced the Company's losses and LAE by $8.8 million , and increased net income by $8.8 million , or $0.28 and $0.27 per basic and diluted share, respectively; and (2) an LPT Contingent Commission Adjustment, which reduced the Company's losses and LAE by $2.9 million , resulting in an increase to net income of $2.9 million , or $0.09 per basic and diluted share. See Note 2 . |
Schedule II. Condensed Financia
Schedule II. Condensed Financial Information of Registrant | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Condensed Financial Statments [Abstract] | |
Schedule II. Condensed Financial Information of Registrant | Employers Holdings, Inc. Condensed Balance Sheets December 31, 2015 2014 (in thousands, except share data) Assets Investments: Investment in subsidiaries $ 647,100 $ 567,100 Investment in fixed maturity securities available-for-sale (amortized cost $40,200 in 2015 and $83,300 in 2014) 42,200 86,700 Equity securities at fair value (amortized cost $46,000 in 2015 and $48,600 in 2014) 51,600 58,600 Total investments 740,900 712,400 Cash and cash equivalents 1,400 10,900 Restricted cash and cash equivalents — 4,600 Intercompany receivable 200 300 Federal income taxes receivable 1,700 6,600 Deferred income taxes, net 20,600 13,900 Other assets 1,500 1,900 Total assets $ 766,300 $ 750,600 Liabilities and stockholders' equity Accounts payable and accrued expenses $ 5,200 $ 3,800 Notes payable — 60,000 Other liabilities 300 — Total liabilities 5,500 63,800 Stockholders' equity : Common stock, $0.01 par value; 150,000,000 shares authorized 55,589,454 and 54,866,802 shares issued and 32,216,480 and 31,493,828 shares outstanding at December 31, 2015 and 2014, respectively 600 600 Preferred stock, $0.01 par value; 25,000,000 shares authorized non-issued — — Additional paid-in capital 357,200 346,600 Retained earnings 682,000 595,300 Accumulated other comprehensive income, net 83,600 106,900 Treasury stock, at cost (23,372,974 shares at December 31, 2015 and 2014) (362,600 ) (362,600 ) Total stockholders' equity 760,800 686,800 Total liabilities and stockholders' equity $ 766,300 $ 750,600 See accompanying notes. Employers Holdings, Inc. Condensed Statements of Income Years Ended December 31, 2015 2014 2013 (in thousands, except per share data) Revenues Net investment income $ 4,000 $ 5,200 $ 6,000 Realized gains on investments 2,400 5,800 4,300 Total revenues 6,400 11,000 10,300 Expenses Other operating expenses 13,800 13,500 12,000 Interest expense 1,100 1,400 1,600 Total expenses 14,900 14,900 13,600 Loss before income taxes and equity in earnings of subsidiary (8,500 ) (3,900 ) (3,300 ) Income tax benefit (3,300 ) (2,600 ) (1,500 ) Net loss before equity in earnings of subsidiary (5,200 ) (1,300 ) (1,800 ) Equity in net income of subsidiary 99,600 102,000 65,600 Net income $ 94,400 $ 100,700 $ 63,800 Earnings per common share for the stated periods (Note 18): Basic $ 2.94 $ 3.19 $ 2.05 Diluted $ 2.90 $ 3.14 $ 2.00 Cash dividends declared per common share $ 0.24 $ 0.24 $ 0.24 See accompanying notes. Employers Holdings, Inc. Condensed Statement of Cash Flows Years Ended December 31, 2015 2014 2013 (in thousands) Operating activities Net income $ 94,400 $ 100,700 $ 63,800 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Equity in net income of subsidiary (99,600 ) (102,000 ) (65,600 ) Realized gains on investments (2,400 ) (5,800 ) (4,300 ) Stock-based compensation 4,600 6,000 5,600 Excess tax benefits from stock-based compensation (1,200 ) (1,200 ) — Amortization of premium or investments, net 900 1,000 1,300 Deferred income tax expense (4,600 ) (2,300 ) (500 ) Change in operating assets and liabilities: Accounts payable and accrued expenses and other liabilities 1,700 1,200 (1,700 ) Federal income taxes 4,900 800 (1,800 ) Other assets 400 900 200 Intercompany payable/receivable 100 (1,400 ) 5,600 Other 1,200 1,000 — Net cash provided by (used in) operating activities 400 (1,100 ) 2,600 Investing activities Purchase of fixed maturity securities (21,600 ) (12,000 ) (29,500 ) Purchase of equity securities (19,000 ) (20,700 ) (23,600 ) Proceeds from sale of fixed maturity securities 18,300 4,100 35,500 Proceeds from maturities and redemptions of investments 45,500 32,600 17,600 Proceeds from sale of equity securities 24,000 20,600 15,500 Cash dividends received from subsidiary — — 3,600 Capital contributions to subsidiary — — (44,000 ) Change in restricted cash equivalents 4,600 (4,100 ) (400 ) Net cash provided by (used in) investing activities 51,800 20,500 (25,300 ) Financing activities Cash transactions related to stock-based compensation 4,800 1,500 6,500 Dividends paid to stockholders (7,700 ) (7,600 ) (7,500 ) Payments on notes payable (60,000 ) (10,000 ) (10,000 ) Excess tax benefits from stock-based compensation 1,200 1,200 — Net cash used in financing activities (61,700 ) (14,900 ) (11,000 ) Net increase (decrease) in cash and cash equivalents (9,500 ) 4,500 (33,700 ) Cash and cash equivalents at the beginning of the period 10,900 6,400 40,100 Cash and cash equivalents at the end of the period $ 1,400 $ 10,900 $ 6,400 See accompanying notes. 1 . Nature of Operations and Summary of Significant Accounting Policies Operations and Basis of Presentation Employers Holdings, Inc. (EHI) is a Nevada holding company. Through its wholly owned insurance subsidiaries, Employers Insurance Company of Nevada (EICN), Employers Compensation Insurance Company (ECIC), Employers Preferred Insurance Company (EPIC), and Employers Assurance Company (EAC), EHI is engaged in the commercial property and casualty insurance industry, specializing in workers' compensation products and services. Unless otherwise indicated, all references to the “Company” refer to EHI, together with its subsidiaries. EHI prepares its condensed financial statements in accordance with U.S. generally accepted accounting principles (GAAP), using the equity method. Under the equity method, the investment in subsidiary is stated at cost plus equity in earnings of its subsidiary. EHI receives dividends from its insurance subsidiaries in the form of cash and securities. The book value for these securities is stated at the fair market value at the date of transfer. These condensed financial statements should be read in conjunction with EHI's consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Estimates and Assumptions The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. As a result, actual results could differ from these estimates. 2. Income Taxes EHI files a consolidated federal income tax return with its subsidiaries and has a tax allocation agreement with its subsidiaries. The equity in the undistributed earnings of subsidiaries included in the accompanying condensed statements of income is net of income taxes. 3. Investments The amortized cost and estimated fair value of fixed maturity securities at December 31, 2015 , by contractual maturity, are shown below. Expected maturities differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Amortized Cost Estimated Fair Value (in millions) Due in one year or less $ 14.6 $ 14.9 Due after one year through five years 15.6 16.1 Due after five years through ten years 3.3 3.7 Due after ten years 6.7 7.5 Total $ 40.2 $ 42.2 At December 31, 2015 , the fixed maturity securities had unrealized gains of $2.0 million which are included in accumulated comprehensive income, net in the accompanying condensed balance sheets. During 2015 , EHI purchased equity securities and utilized market quotations to determine their fair values. 4. Notes Payable On December 28, 2010, EHI entered into a credit facility. See Note 11 of the Consolidated Financial Statements of Employers Holdings, Inc. and Subsidiaries included herein for a description of the terms of the Amended Credit Facility. Interest paid during the years ended December 31, 2015 , 2014 , and 2013 totaled $1.3 million , $1.4 million , and $1.6 million , respectively. In accordance with the terms of the contract, the remaining principal balance of $60.0 million was repaid on the credit facility during the fourth quarter of 2015 . 5. Stock-Based Compensation During 2015 , EHI awarded 80,800 non-qualified stock options to officers, 112,048 RSUs to non-employee Directors and officers, and 110,000 PSUs to officers. During 2014 , EHI awarded 141,744 non-qualified stock options to officers, 87,396 RSUs to non-employee Directors and officers, and 125,340 PSUs to officers. See Note 14 of the Consolidated Financial Statements of Employers Holdings, Inc. and Subsidiaries included herein for a detailed description of the stock-based compensation. |
Schedule VI. Supplemental Infor
Schedule VI. Supplemental Information | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Information for Property, Casualty Insurance Underwriters [Abstract] | |
Schedule of Supplemental Information for Property, Casualty Insurance Underwriters | Schedule VI. Supplemental Information Concerning Property - Casualty Insurance Operations Employers Holdings, Inc. and Subsidiaries Consolidated Supplemental Information Concerning Property and Casualty Insurance Operations Year Ended Deferred Policy Acquisition Costs Reserves For Unpaid Losses And LAE Unearned Premiums Net Premiums Earned Net Investment Income Losses and LAE Related to Current Years Losses and LAE Related to Prior Years (including LPT Amortization and Adj) Amortization of Deferred Policy Acquisition Costs Paid Losses And LAE (including LPT Amortization and Adj) Net Premiums Written (in millions) 2015 $ 44.3 $ 2,347.5 $ 308.9 $ 690.4 $ 72.2 $ 456.9 $ (27.6 ) $ 103.9 $ 410.2 $ 689.3 2014 44.6 2,369.7 310.8 684.5 72.4 503.8 (50.5 ) 102.7 340.6 687.6 2013 43.5 2,330.5 304.0 642.3 70.8 494.5 (31.0 ) 96.9 302.3 678.5 |
Subsequent Events (Notes)
Subsequent Events (Notes) | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Subsequent Events Each of the Company's insurance subsidiaries, EICN, ECIC, EPIC, and EAC, became a member of the Federal Home Loan Bank of San Francisco (FHLB) in January 2016. Membership allows each subsidiary access to collateralized advances, which may be used to support and enhance liquidity management. The amount of advances that may be taken are dependent on statutory admitted assets on a per company basis. Currently, none of the Company's subsidiaries has advances outstanding under the FHLB facility. On February 16, 2016, the Board of Directors authorized a share repurchase program for up to $50.0 million of the Company's common stock from February 22, 2016 through February 22, 2018 (the 2016 Program). The Company expects that shares of common stock may be purchased at prevailing market prices through a variety of methods, including open market or private transactions, in accordance with applicable laws and regulations and as determined by management. The timing and actual number of shares repurchased will depend on a variety of factors, including the share price, corporate and regulatory requirements, and other market and economic conditions. Repurchases under the 2016 Program may be commenced, modified, or suspended from time-to-time without prior notice. |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Cash and Cash Equivalents, Policy | Cash and Cash Equivalents The Company considers all highly liquid investments with an initial maturity of three months or less at the date of purchase to be cash equivalents. |
Restricted Cash and Cash Equivalents, Policy | Restricted Cash and Cash Equivalents Restricted cash and cash equivalents is primarily related to funds held in trust to secure the Company's line of credit and for reinsurance. The Company held $32.7 million and $33.3 million in trust for reinsurance, of which $2.5 million and $6.1 million were classified as restricted cash and cash equivalents at December 31, 2015 and 2014 , respectively. |
Investments, Policy | Investments The Company's investments in fixed maturity securities and equity securities are classified as available-for-sale and are reported at fair value with unrealized gains and losses excluded from earnings and reported as a separate component of equity, net of deferred taxes, in accumulated other comprehensive income. Investment income consists primarily of interest and dividends. Interest is recognized on an accrual basis, and dividends are recorded as earned at the ex-dividend date. Interest income on mortgage-backed and asset-backed securities is determined using the effective-yield method based on estimated principal repayments. Mortgage-backed securities are adjusted for the effects of changes in prepayment assumptions on the related accretion of discount or amortization of premium of such securities using the retrospective method. Realized capital gains and losses on investments are determined on a specific-identification basis. When, in the opinion of management, a decline in the fair value of an equity security below its cost is considered to be “other-than-temporary,” the equity security's cost is written down to its fair value at the time the other-than-temporary decline is identified. The determination of an other-than-temporary decline for debt securities includes, in addition to other relevant factors, a presumption that if the market value is below cost by a significant amount for a period of time, a bifurcation of the write-down may be necessary. If management has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery, the investment is written down to its fair value and the entire impairment is recorded as a realized loss due to credit in the accompanying consolidated statements of comprehensive income. If management does not have the intent to sell or will not be required to sell the debt security but does not expect to recover the amortized cost basis of the debt security, the amount of the other-than-temporary impairment is bifurcated between credit loss and other loss and recorded as a component of realized gains and losses and to other comprehensive income, respectively, in the consolidated statements of comprehensive income. The amount of any write-down is determined by the difference between the cost or amortized cost of the debt security and its fair value at the time the other-than-temporary decline is identified (see Note 6 ). |
Revenue Recognition, Policy | Revenue Recognition Premium revenue is recognized over the period of the contract in proportion to the amount of time insurance protection is provided. At the end of the policy term, payroll-based premium audits are performed on substantially all policyholder accounts to determine net premiums earned for the policy year. Earned but unbilled premiums include estimated future audit premiums based on the Company's historical experience. These estimates are subject to changes in policyholders' payrolls, economic conditions, and seasonality, and are continually reviewed and adjusted as experience develops or new information becomes known. Any such adjustments are included in current operations; however, they are partially offset by the resulting changes in losses and LAE, commission expenses, and premium taxes. The Company's premiums receivable on the consolidated balance sheet included $53.5 million and $49.1 million of additional premiums expected to be received from policyholders for final audits at December 31, 2015 and 2014 , respectively. The Company establishes a bad debt allowance on its premiums receivable through a charge included in underwriting and other operating expenses in the accompanying consolidated statements of comprehensive income. This bad debt allowance is determined based on estimates and assumptions to project future experience. After all collection efforts have been exhausted, the Company reduces the bad debt allowance for write-offs of premiums receivable that have been deemed uncollectible. The Company's bad debt allowance was $12.2 million and $7.9 million at December 31, 2015 and 2014 , respectively. The Company had write-offs, net of recoveries of amounts previously written off, of $2.4 million , $3.4 million , and $2.5 million for the years ended December 31, 2015 , 2014 , and 2013 , respectively. |
Deferred Policy Acquisition Costs, Policy | Deferred Policy Acquisition Costs Policy acquisition costs that relate directly to the successful acquisition of new or renewal insurance contracts, including underwriting, policy issuance and processing, medical and inspection, and sales force contract selling are deferred and amortized as the related premiums are earned. Amortization of deferred policy acquisition costs for the years ended December 31, 2015 , 2014 , and 2013 , was $103.9 million , $102.7 million , and $96.9 million , respectively. A premium deficiency would exist if expected future losses and LAE, expected policyholder dividends, deferred policy acquisition costs, and expected policy maintenance costs, offset by anticipated investment income, exceed the related unearned premiums. A premium deficiency would reduce the value of deferred policy acquisition costs. If the deficiency exceeded the deferred policy acquisition costs, a separate liability would be accrued for the excess deficiency. There was no premium deficiency at December 31, 2015 or 2014 . |
Unpaid Loss and LAE Reserves, Policy | Unpaid Loss and LAE Reserves Loss and LAE reserves represent management's best estimate of the ultimate net cost of all reported and unreported losses incurred for the applicable periods, less payments made. The estimated reserves for losses and LAE include the accumulation of estimates for all claims reported prior to the balance sheet date, estimates of claims incurred but not reported, and estimates of expenses for investigating and adjusting all incurred and unadjusted claims (based on projections of relevant historical data). Amounts reported are necessarily subject to the impact of future changes in economic, regulatory and social conditions. Management believes that, subject to the inherent variability in any such estimate, the reserves are within a reasonable and acceptable range of adequacy. Estimates for claims prior to the balance sheet date are continually monitored and reviewed, and as settlements are made or reserves adjusted, the differences are reported in current operations. Salvage and subrogation recoveries are estimated based on a review of the level of historical salvage and subrogation recoveries. |
Reinsurance, Policy | Reinsurance In the ordinary course of business and consistent with general insurance industry practices, the Company purchases excess of loss reinsurance to protect the Company against the impact of large and/or catastrophic losses in its workers' compensation business. Additionally, the Company is a party to a 100% quota share retroactive reinsurance agreement (see Note 10 ). This reinsurance reduces the financial impact of such losses on current operations and the equity of the Company. Reinsurance makes the assuming reinsurer liable to the ceding company to the extent of the reinsurance coverage provided. It does not, however, discharge the Company from its liability to its policyholders in the event the reinsurer is unable or unwilling to meet its obligations under its reinsurance agreement with the Company. Net premiums earned and losses and LAE incurred are stated in the accompanying consolidated statements of comprehensive income after deduction of amounts ceded to reinsurers. Balances due from reinsurers on unpaid losses, including an estimate of such recoverables related to reserves for incurred but not reported losses, are reported as assets and are included in reinsurance recoverables even though amounts due on unpaid losses and LAE are not recoverable from the reinsurer until such losses are paid. Recoverables from reinsurers on unpaid losses and LAE amounted to $628.2 million and $669.5 million at December 31, 2015 and 2014 , respectively. Ceded losses and LAE are accounted for on a basis consistent with those used in accounting for the original policies issued and the terms of the relevant reinsurance agreement. The 100% quota share retroactive reinsurance agreement was entered into in 1999 by the Nevada State Industrial Insurance System (the Fund) and assumed by EICN, which the Company refers to as the LPT Agreement (see Note 10 ). Loss expenses are deemed to be 7% of total losses paid and are paid to the Company as compensation for management of the claims under the LPT Agreement. The Company accounts for this transaction as retroactive reinsurance, whereby the initial deferred gain was recorded as a liability in the accompanying consolidated balance sheets as Deferred reinsurance gain–LPT Agreement. This gain is amortized using the recovery method, whereby the amortization is determined by the proportion of actual reinsurance recoveries to total estimated recoveries through the life of the LPT Agreement, and is recorded in losses and LAE incurred in the accompanying consolidated statements of comprehensive income. Any adjustment to the estimated reserves ceded under the LPT Agreement results in a cumulative adjustment to the Deferred Gain, which is also recognized in losses and LAE incurred in the consolidated statement of comprehensive income, such that the Deferred Gain reflects the balance that would have existed had the revised reserves been recognized at the inception of the LPT Agreement. Additionally, the Company is entitled to receive a contingent profit commission under the LPT Agreement. The contingent profit is equal to 30% of the favorable difference between actual paid losses and LAE and expected paid losses and LAE as established in the LPT Agreement based on losses paid through June 30, 2024. The contingent profit commission is paid every five years beginning June 30, 2004 for the first twenty-five years of the agreement. The Company is paid 30% of the favorable difference between the actual and expected losses and LAE paid at each calculation point. The Company could be required to return any previously received contingent profit commission, plus interest, in the event of unfavorable differences through June 30, 2024. The Company records its estimate of contingent profit commission in the accompanying consolidated balance sheets as Contingent commission receivable–LPT Agreement and a corresponding liability is recorded on the accompanying consolidated balance sheets in Deferred reinsurance gain–LPT Agreement. The Contingent commission receivable–LPT Agreement is reduced as amounts are received from participating reinsurers. In 2014, the Company received $11.7 million in cash related to the contingent profit commission. The related Deferred reinsurance gain–LPT Agreement is amortized using the recovery method. The amortization of the contingent profit commission is determined by the proportion of actual reinsurance recoveries to total estimated recoveries over the life of the contingent profit commission (through June 30, 2024), and is recorded in losses and LAE incurred in the accompanying consolidated statements of comprehensive income. Any adjustment to the contingent profit commission under the LPT Agreement results in a cumulative adjustment to the Deferred Gain, which is also recognized in losses and LAE incurred in the consolidated statement of comprehensive income, such that the Deferred Gain reflects the balance that would have existed had the revised contingent profit commission been recognized at the inception of the LPT Agreement. |
Property, and Equipment, Policy | Property and Equipment Property and equipment are stated at cost less accumulated depreciation (see Note 7 ). Expenditures for maintenance and repairs are charged against operations as incurred. Electronic data processing equipment, software, furniture and equipment, and automobiles are depreciated using the straight-line method over three to seven years . Leasehold improvements are carried at cost less accumulated amortization. The Company amortizes leasehold improvements using the straight-line method over the lesser of the useful life of the asset or the remaining original lease term, excluding options or renewal periods. Leasehold improvements are generally amortized over three to five years . |
Obligations Held Under Capital Leases, Policy | Obligations Held Under Capital Leases Leased property and equipment meeting capital lease criteria are capitalized at the lower of the present value of the related lease payments or the fair value of the leased asset at the inception of the lease. Amortization is calculated using the straight-line method based on the term of the lease and is included in the depreciation expense of property and equipment. See Note 12 for additional disclosures related to capital leases. |
Income Taxes, Policy | Income Taxes The Company's accounting for income taxes considers the current and deferred tax consequences of all transactions that have been recognized in its consolidated financial statements using the provisions of enacted tax laws. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The effect on deferred tax assets and liabilities resulting from a tax rate change affects net income or loss in the period that includes the enactment date of the tax rate change. The Company's income tax returns are subject to audit by the Internal Revenue Service and various state tax authorities. Significant disputes may arise with these tax authorities involving issues of the timing and amount of deductions and allocations of income among various tax jurisdictions because of differing interpretations of tax laws and regulations. The Company periodically evaluates exposures associated with tax filing positions. Although we believe our positions comply with applicable laws, liabilities are recorded based upon estimates of the ultimate outcomes of these matters. In assessing whether deferred tax assets will be realized, the Company considers whether it is more likely than not that it will generate future taxable income during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, tax planning strategies, and projected future taxable income in making this assessment. If necessary, a valuation allowance is established to reduce the deferred tax assets to the amounts that are more likely than not to be realized. |
Credit Risk, Policy | Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents, investments, premiums receivable, and reinsurance recoverable balances. Cash equivalents include investments in money market securities and securities backed by the U.S. government. Investments are diversified throughout many industries and geographic regions. The Company limits the amount of credit exposure with any one financial institution and believes that no significant concentration of credit risk exists with respect to cash and cash equivalents and investments. At December 31, 2015 and 2014 , the outstanding premiums receivable balance was generally diversified due to the large number of entities composing the Company's policyholder base and their dispersion across many different industries. The Company also has recoverables from its reinsurers. Reinsurance contracts do not relieve the Company of its obligations to claimants or policyholders. Failure of reinsurers to honor their obligations could result in losses to the Company. The Company evaluates the financial condition of its reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. The Company obtains collateral to mitigate the risks related to reinsurance insolvencies. At December 31, 2015 , $3.7 million was collateralized by cash or letters of credit and an additional $1.4 billion was in trust accounts for reinsurance related to the LPT Agreement. |
Fair Value of Financial Instruments, Policy | Fair Value of Financial Instruments Estimated fair value amounts have been determined using available market information and other appropriate valuation methodologies. Judgment is required in developing the estimates of fair value where quoted market prices are not available. Accordingly, these estimates are not necessarily indicative of the amounts that could be realized in a current market exchange. The use of different market assumptions or estimating methodologies may have an effect on the estimated fair value amounts. The following methods and assumptions were used by the Company in estimating the fair value for financial instruments in the accompanying consolidated financial statements and in these notes for the years ended 2015 and 2014 : Cash and cash equivalents, premiums receivable, accounts payable, and accrued expenses and other liabilities. The carrying amounts for these financial instruments as reported in the accompanying consolidated balance sheets approximate their fair values. Investments. The estimated fair values for available-for-sale securities generally represent quoted market prices for securities traded in the public marketplace or estimated values for securities not traded in the public marketplace. Additional data with respect to fair values of the Company's investment securities is disclosed in Note 5 . |
Goodwill and Other Intangible Assets, Policy | Goodwill and Other Intangible Assets The Company tests for impairment of goodwill and non-amortizable intangible assets in the fourth quarter of each year. At the end of each quarter, management considers the results of the previous analysis as well as any recent developments that may constitute triggering events requiring the impairment analysis of goodwill and other intangible assets to be updated. The Company has assessed the effects of current economic conditions on the Company's financial condition and results of operations and changes in the Company's stock price and determined that there were no impairments as of December 31, 2015 and 2014 . Intangible assets related to state licenses are not subject to amortization. Intangibles related to insurance relationships will be amortized in proportion to the expected period of benefit over the next three years. The gross carrying value, accumulated amortization, and net carrying value for the Company's intangible assets, by major class, as of December 31, were as follows: 2015 2014 Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value Accumulated Amortization Net Carrying Value (in millions) State licenses $ 7.7 $ — $ 7.7 $ 7.7 $ — $ 7.7 Insurance relationships 9.4 $ (8.6 ) 0.8 9.4 $ (8.1 ) 1.3 Total $ 17.1 $ (8.6 ) $ 8.5 $ 17.1 $ (8.1 ) $ 9.0 During the years ended December 31, 2015 , 2014 , and 2013 , the Company recognized $0.5 million , $0.7 million , and $0.9 million in amortization expenses, respectively. These amortization expenses are included in the accompanying consolidated statements of comprehensive income in underwriting and other operating expenses. Amortization expense is expected to be as follows: Year Amount (in millions) 2016 0.4 2017 0.3 2018 0.1 Total $ 0.8 |
Stock-based Compensation, Policy | Stock-Based Compensation The Company issues stock-based payments, which are recognized in the consolidated statements of comprehensive income based on their estimated fair values over the employees' service period (see Note 14 ). |
Changes in Estimates (Tables)
Changes in Estimates (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Changes in Estimates [Abstract] | |
Change to Contingent Profit Commission [Table Text Block] | The Company increased its estimate of Contingent commission receivable – LPT Agreement (LPT Contingent Commission Adjustments) in each of 2015 , 2014 , and 2013 as a result of the determination that adjustments were necessary to reflect observed favorable paid loss trends in each of those years. The following table shows the impact to the Consolidated Statements of Comprehensive Income related to these changes in estimates. 2015 2014 2013 (in millions, except per share data) Cumulative adjustment to the deferred reinsurance gain - LPT Agreement (Deferred Gain) (1) $ (2.6 ) $ (10.8 ) $ (4.3 ) Net income impact of change in estimate 2.6 10.8 4.3 EPS impact of change in estimate Basic 0.08 0.34 0.14 Diluted 0.08 0.34 0.13 (1) The cumulative adjustments to the Deferred Gain were also recognized in losses and LAE incurred in the consolidated statement of comprehensive income, so that the Deferred Gain reflects the balance that would have existed had the revised reserves been recognized at the inception of the LPT Agreement. |
Change Due to Estimated Reserves Ceded Under the LPT Agreement [Table Text Block] | The Company reduced its estimated reserves ceded under the Loss Portfolio Transfer Agreement (LPT Reserve Adjustments) in each of the years 2015 , 2014 , and 2013 as a result of the determination that adjustments were necessary to reflect observed favorable paid loss trends in each of these years. The following table shows the financial statement impact related to the reduction in estimated reserves ceded under the Loss Portfolio Transfer Agreement (LPT Agreement). 2015 2014 2013 (in millions, except per share data) Change in estimated reserves ceded under the LPT Agreement $ (10.0 ) $ (46.8 ) $ (27.5 ) Cumulative adjustment to the Deferred Gain (1) (6.4 ) (31.1 ) (19.0 ) Net income impact of change in estimate 6.4 31.1 19.0 EPS impact of change in estimate Basic 0.20 0.99 0.61 Diluted 0.20 0.97 0.59 (1) The cumulative adjustments to the Deferred Gain were also recognized in losses and LAE incurred in the consolidated statement of comprehensive income, so that the Deferred Gain reflects the balance that would have existed had the revised reserves been recognized at the inception of the LPT Agreement. |
Change in Reserves for Non-taxable Periods [Table Text Block] | The Company reallocated reserves from non-taxable periods prior to January 1, 2000 to taxable years, which reduced its effective tax rates, in each of 2015 , 2014 , and 2013 . These changes in estimates were the result of the determination that a reallocation of reserves among accident years was appropriate to address a continuation of observed loss trends in each of those years. The following table shows the financial statement impact of these changes in estimates. 2015 2014 2013 (in millions, except per share data) Reserves reallocated to taxable years $ 56.3 $ 13.1 $ 27.2 Impact to effective tax rate (15.4 )% (3.4 )% (13.9 )% Net income impact of change in estimate $ 15.3 $ 3.6 $ 7.4 EPS impact of change in estimate Basic 0.48 0.11 0.24 Diluted 0.47 0.11 0.23 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of intangible assets table | The gross carrying value, accumulated amortization, and net carrying value for the Company's intangible assets, by major class, as of December 31, were as follows: 2015 2014 Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value Accumulated Amortization Net Carrying Value (in millions) State licenses $ 7.7 $ — $ 7.7 $ 7.7 $ — $ 7.7 Insurance relationships 9.4 $ (8.6 ) 0.8 9.4 $ (8.1 ) 1.3 Total $ 17.1 $ (8.6 ) $ 8.5 $ 17.1 $ (8.1 ) $ 9.0 |
Expected amortization expense table | Amortization expense is expected to be as follows: Year Amount (in millions) 2016 0.4 2017 0.3 2018 0.1 Total $ 0.8 |
Fair Value of Financial Instr34
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value of Financial Instruments [Abstract] | |
Estimated fair value of financial instruments table | The carrying value and the estimated fair value of the Company's financial instruments as of December 31, were as follows: 2015 2014 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Financial assets (in millions) Investments (Note 6) $ 2,487.2 $ 2,487.2 $ 2,448.4 $ 2,448.4 Cash and cash equivalents 56.6 56.6 103.6 103.6 Restricted cash and cash equivalents 2.5 2.5 10.8 10.8 Financial liabilities Notes payable (Note 11) $ 32.0 $ 36.6 $ 92.0 $ 97.8 |
Fair value, assets and liabilities measured on recurring basis table | The following table presents the items in the accompanying consolidated balance sheets that are stated at fair value and the corresponding fair value measurements. December 31, 2015 December 31, 2014 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 (in millions) Fixed maturity securities U.S. Treasuries $ — $ 120.2 $ — $ — $ 166.7 $ — U.S. Agencies — 24.4 — — 39.6 — States and municipalities — 854.5 — — 745.8 — Corporate securities — 925.3 — — 908.3 — Residential mortgage-backed securities — 237.9 — — 288.4 — Commercial mortgage-backed securities — 80.3 — — 65.4 — Asset-backed securities — 45.9 — — 61.5 — Total fixed maturity securities $ — $ 2,288.5 $ — $ — $ 2,275.7 $ — Equity securities $ 198.7 $ — $ — $ 172.7 $ — $ — |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Investments [Abstract] | |
Available-for-sale securities table | The cost or amortized cost, gross unrealized gains, gross unrealized losses, and estimated fair value of the Company’s investments were as follows: Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value At December 31, 2015 (in millions) Fixed maturity securities U.S. Treasuries $ 116.4 $ 3.9 $ (0.1 ) $ 120.2 U.S. Agencies 23.0 1.4 — 24.4 States and municipalities 809.4 45.1 — 854.5 Corporate securities 913.4 19.9 (8.0 ) 925.3 Residential mortgage-backed securities 231.8 7.1 (1.0 ) 237.9 Commercial mortgage-backed securities 81.1 0.2 (1.0 ) 80.3 Asset-backed securities 46.0 — (0.1 ) 45.9 Total fixed maturity securities 2,221.1 77.6 (10.2 ) 2,288.5 Equity securities 137.5 65.8 (4.6 ) 198.7 Total investments $ 2,358.6 $ 143.4 $ (14.8 ) $ 2,487.2 At December 31, 2014 Fixed maturity securities U.S. Treasuries $ 160.9 $ 5.8 $ — $ 166.7 U.S. Agencies 37.2 2.4 — 39.6 States and municipalities 701.6 44.4 (0.2 ) 745.8 Corporate securities 880.7 30.8 (3.2 ) 908.3 Residential mortgage-backed securities 278.6 10.6 (0.8 ) 288.4 Commercial mortgage-backed securities 65.5 0.5 (0.6 ) 65.4 Asset-backed securities 61.6 — (0.1 ) 61.5 Total fixed maturity securities 2,186.1 94.5 (4.9 ) 2,275.7 Equity securities 97.8 75.5 (0.6 ) 172.7 Total investments $ 2,283.9 $ 170.0 $ (5.5 ) $ 2,448.4 |
Investments classified by contractual maturity date table | The amortized cost and estimated fair value of fixed maturity securities at December 31, 2015 , by contractual maturity, are shown below. Expected maturities differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Amortized Cost Estimated Fair Value (in millions) Due in one year or less $ 113.6 $ 115.1 Due after one year through five years 859.3 884.5 Due after five years through ten years 636.9 657.1 Due after ten years 252.4 267.7 Mortgage and asset-backed securities 358.9 364.1 Total $ 2,221.1 $ 2,288.5 The amortized cost and estimated fair value of fixed maturity securities at December 31, 2015 , by contractual maturity, are shown below. Expected maturities differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Amortized Cost Estimated Fair Value (in millions) Due in one year or less $ 14.6 $ 14.9 Due after one year through five years 15.6 16.1 Due after five years through ten years 3.3 3.7 Due after ten years 6.7 7.5 Total $ 40.2 $ 42.2 |
Unrealized loss on investments table | The following is a summary of investments that have been in a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for 12 months or greater as of December 31, 2015 and 2014 . December 31, 2015 December 31, 2014 Estimated Fair Value Gross Unrealized Losses Number of Issues Estimated Fair Value Gross Unrealized Losses Number of Issues Less than 12 months: (dollars in millions) Fixed maturity securities U.S. Treasuries $ 27.4 $ (0.1 ) 20 $ — $ — — States and municipalities — — — 20.6 (0.2 ) 5 Corporate securities 328.4 (4.7 ) 122 109.9 (0.8 ) 42 Residential mortgage-backed securities 50.5 (0.8 ) 24 — — — Commercial mortgage-backed securities 51.5 (1.0 ) 22 — — — Asset-backed securities 34.1 — 27 — — — Total fixed maturity securities 491.9 (6.6 ) 215 130.5 (1.0 ) 47 Equity securities 35.8 (4.6 ) 45 10.1 (0.6 ) 15 Total less than 12 months $ 527.7 $ (11.2 ) 260 $ 140.6 $ (1.6 ) 62 Greater than 12 months: Fixed maturity securities Corporate securities $ 34.6 $ (3.3 ) 15 $ 129.4 $ (2.4 ) 39 Residential mortgage-backed securities 7.1 (0.2 ) 25 44.1 (0.8 ) 36 Commercial mortgage-backed securities — — — 31.3 (0.6 ) 8 Asset-backed securities 11.1 (0.1 ) 4 18.3 (0.1 ) 6 Total fixed maturity securities 52.8 (3.6 ) 44 223.1 (3.9 ) 89 Total greater than 12 months $ 52.8 $ (3.6 ) 44 $ 223.1 $ (3.9 ) 89 Total available-for-sale: Fixed maturity securities U.S. Treasuries $ 27.4 $ (0.1 ) 20 $ — $ — — States and municipalities — — — 20.6 (0.2 ) 5 Corporate securities 363.0 (8.0 ) 137 239.3 (3.2 ) 81 Residential mortgage-backed securities 57.6 (1.0 ) 49 44.1 (0.8 ) 36 Commercial mortgage-backed securities 51.5 (1.0 ) 22 31.3 (0.6 ) 8 Asset-backed securities 45.2 (0.1 ) 31 18.3 (0.1 ) 6 Total fixed maturity securities 544.7 (10.2 ) 259 353.6 (4.9 ) 136 Equity securities 35.8 (4.6 ) 45 10.1 (0.6 ) 15 Total available-for-sale $ 580.5 $ (14.8 ) 304 $ 363.7 $ (5.5 ) 151 |
Net realized gains and change in unrealized gains (losses), available for sale securities table | realized gains on investments and the change in unrealized gains (losses) on fixed maturity and equity securities are determined on a specific-identification basis and were as follows: Years Ended December 31, 2015 2014 2013 (in millions) Net realized gains on investments Fixed maturity securities Gross gains $ 0.5 $ 1.1 $ 0.7 Gross losses (0.4 ) — — Net realized gains on fixed maturity securities $ 0.1 $ 1.1 $ 0.7 Equity securities Gross gains $ 8.1 $ 15.7 $ 9.1 Gross losses (18.9 ) (0.5 ) (0.3 ) Net realized gains on equity securities $ (10.8 ) $ 15.2 $ 8.8 Total $ (10.7 ) $ 16.3 $ 9.5 Change in unrealized gain (losses) Fixed maturity securities $ (22.2 ) $ 23.1 $ (88.8 ) Equity securities (13.7 ) 2.2 28.6 Total $ (35.9 ) $ 25.3 $ (60.2 ) |
Investment income table | Net investment income was as follows: Years Ended December 31, 2015 2014 2013 (in millions) Fixed maturity securities $ 68.8 $ 70.7 $ 69.5 Equity securities 5.9 4.2 3.8 Cash equivalents and restricted cash 0.1 0.1 0.1 Gross investment income 74.8 75.0 73.4 Investment expenses (2.6 ) (2.6 ) (2.6 ) Net investment income $ 72.2 $ 72.4 $ 70.8 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property and Equipment [Abstract] | |
Property, plant and equipment table | Property and equipment consists of the following: As of December 31, 2015 2014 (in millions) Furniture and equipment $ 2.3 $ 2.3 Leasehold improvements 4.3 4.4 Computers and software 56.7 46.0 Automobiles 1.2 1.2 64.5 53.9 Accumulated amortization and depreciation (39.6 ) (32.9 ) Property and equipment, net $ 24.9 $ 21.0 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes [Abstract] | |
Summary of income tax contingencies table | The provision for income taxes consisted of the following: Years Ended December 31, 2015 2014 2013 Current tax expense: (in millions) Federal $ 9.5 $ 6.3 $ 0.1 State 1.1 0.1 — Total current tax expense 10.6 6.4 0.1 Deferred federal tax benefit (5.6 ) (0.5 ) (10.8 ) Income tax expense (benefit) $ 5.0 $ 5.9 $ (10.7 ) |
Reconciliation of federal staturoty income tax rates to the effective tax rates table | The difference between the statutory federal tax rate of 35% and the Company's effective tax rate on net income before income taxes as reflected in the consolidated statements of comprehensive income was as follows: Years Ended December 31, 2015 2014 2013 (in millions) Expense computed at statutory rate $ 34.8 $ 37.3 $ 18.6 Dividends received deduction and tax-exempt interest (8.6 ) (8.8 ) (9.1 ) Pre-Privatization reserve adjustments, excluding LPT (15.3 ) (3.6 ) (7.4 ) LPT deferred gain amortization (4.9 ) (8.4 ) (6.6 ) LPT Reserve Adjustment (2.2 ) (10.9 ) (6.7 ) Other 1.2 0.3 0.5 Income tax expense (benefit) $ 5.0 $ 5.9 $ (10.7 ) |
Deferred tax assets and liabilities | The significant components of deferred income taxes, net, were as follows as of December 31: 2015 2014 Deferred Tax Deferred Tax Assets Liabilities Assets Liabilities (in millions) Unrealized capital gains, net $ — $ 45.0 $ — $ 57.6 Deferred policy acquisition costs — 15.7 — 15.7 Intangible assets — 3.0 — 3.2 Loss reserve discounting for tax reporting 56.3 — 56.7 — Unearned premiums 20.9 — 20.9 — Allowance for bad debt 4.3 — 2.7 — Stock based compensation 4.1 — 5.8 — Accrued liabilities 8.4 — 7.5 — Minimum tax credit 28.0 — 19.6 — Net operating loss carryforward 8.7 — 16.2 — Other 8.4 7.5 2.5 5.7 Total $ 139.1 $ 71.2 $ 131.9 $ 82.2 Deferred income taxes, net $ 67.9 $ 49.7 |
Liability for Unpaid Losses a38
Liability for Unpaid Losses and Loss Adjustment Expenses (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Liability for Unpaid Losses and Loss Adjustment Expenses [Abstract] | |
Changes in the liability for unpaid losses and LAE table | The following table represents a reconciliation of changes in the liability for unpaid losses and LAE. Years Ended December 31, 2015 2014 2013 (in millions) Unpaid losses and LAE, gross of reinsurance, at beginning of period $ 2,369.7 $ 2,330.5 $ 2,231.5 Less reinsurance recoverable, excluding bad debt allowance, on unpaid losses and LAE 669.5 743.1 805.4 Net unpaid losses and LAE at beginning of period 1,700.2 1,587.4 1,426.1 Losses and LAE, net of reinsurance, incurred in: Current year 456.9 503.8 494.5 Prior years (7.2 ) 4.6 7.0 Total net losses and LAE incurred during the period 449.7 508.4 501.5 Paid losses and LAE, net of reinsurance, related to: Current year 75.4 75.9 78.5 Prior years 355.2 319.7 261.7 Total net paid losses and LAE during the period 430.6 395.6 340.2 Ending unpaid losses and LAE, net of reinsurance 1,719.3 1,700.2 1,587.4 Reinsurance recoverable, excluding bad debt allowance, on unpaid losses and LAE 628.2 669.5 743.1 Unpaid losses and LAE, gross of reinsurance, at end of period $ 2,347.5 $ 2,369.7 $ 2,330.5 |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Reinsurance [Abstract] | |
Supplemental schedule of reinsurance premiums for insurance companies table | Reinsurance transactions reflected in the accompanying consolidated statements of comprehensive income were as follows: Years Ended December 31, 2015 2014 2013 Written Earned Written Earned Written Earned (in millions) Direct premiums $ 684.9 $ 686.0 $ 686.8 $ 684.3 $ 680.5 $ 645.4 Assumed premiums 12.8 12.8 10.9 10.3 9.4 8.3 Gross premiums 697.7 698.8 697.7 694.6 689.9 653.7 Ceded premiums (8.4 ) (8.4 ) (10.1 ) (10.1 ) (11.4 ) (11.4 ) Net premiums $ 689.3 $ 690.4 $ 687.6 $ 684.5 $ 678.5 $ 642.3 Ceded losses and LAE incurred $ 10.1 $ 17.2 $ 10.7 |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Payable [Abstract] | |
Schedule of long-term debt instruments table | Notes payable is comprised of the following: December 31, 2015 2014 (in millions) Credit facility, with variable interest, as described below $ — $ 60.0 Dekania Surplus Note, due April 30, 2034 with variable interest of 425 basis points above 90-day LIBOR 10.0 10.0 ICONS Surplus Note, due May 26, 2034 with variable interest of 425 basis points above 90-day LIBOR 12.0 12.0 Alesco Surplus Note, due December 15, 2034 with variable interest of 405 basis points above 90-day LIBOR 10.0 10.0 Balance $ 32.0 $ 92.0 |
Schedule of maturities of long-term debt table | Principal payment obligations on notes payable outstanding at December 31, 2015 , were as follows: Year Principal Due (in millions) 2016 $ — 2017 — 2018 — 2019 — 2020 — Thereafter 32.0 Total $ 32.0 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies [Abstract] | |
Operating and capital leases schedule of future minimum lease payments table | The future lease payments for the next five years on these non-cancelable operating and capital leases at December 31, 2015 , were as follows: Year Operating Leases Capital Leases (in millions) 2016 $ 4.9 $ 0.3 2017 4.8 0.3 2018 3.5 0.2 2019 3.0 — 2020 2.6 — Thereafter 1.1 — Total $ 19.9 $ 0.8 |
Schedule of capital leased asssets table | Property held under capital leases is included in property and equipment as follows: Asset Class 2015 2014 (in millions) Computers and software $ 0.4 $ 0.9 Automobiles 1.2 1.2 1.6 2.1 Accumulated amortization (1.0 ) (1.0 ) Total $ 0.6 $ 1.1 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Stock-Based Compensation [Abstract] | |
Schedule of compensation cost for share-based payment arrangements, allocation of share-based compensation costs by plan table | Net stock-based compensation expense recognized in the accompanying consolidated statements of comprehensive income was as follows: Years Ended December 31, 2015 2014 2013 Stock-based compensation expense related to: (in millions) Nonqualified stock options $ 1.0 $ 1.2 $ 1.7 RSUs 2.0 1.9 2.3 PSUs 1.6 2.9 1.6 Total 4.6 6.0 5.6 Less: related tax benefit 1.6 2.1 2.0 Net stock-based compensation expense $ 3.0 $ 3.9 $ 3.6 |
Schedule of share-based payment award, stock options, valuation assumptions table | The fair value of the stock options granted during the years ended December 31, 2015 , 2014 , and 2013 was calculated using the following weighted average assumptions: 2015 2014 2013 Expected volatility 38.0 % 39.0 % 40.1 % Expected life (in years) 4.8 4.8 4.8 Dividend yield 1.0 % 1.2 % 1.1 % Risk-free interest rate 1.6 % 1.6 % 0.8 % Weighted average grant date fair values of options granted $7.63 $6.66 $7.04 |
Schedule of share-based compensation arrangement by share-based payment award, options, vested and expected to vest, outstanding table | Changes in outstanding stock options for the year ended December 31, 2015 were as follows: Number of Options Weighted-Average Exercise Price Weighted Average Remaining Contractual Life Options outstanding at December 31, 2012 1,830,772 $ 16.97 3.7 years Granted 162,800 22.24 6.2 years Exercised (411,295 ) 17.89 Expired (6,900 ) 17.00 Forfeited (28,479 ) 18.90 Options outstanding at December 31, 2013 1,546,898 17.24 3.4 years Granted 141,744 20.87 6.2 years Exercised (120,494 ) 17.89 Expired (2,400 ) 17.00 Forfeited (44,458 ) 19.99 Options outstanding at December 31, 2014 1,521,290 17.45 2.9 years Granted 80,800 24.20 6.2 years Exercised (463,466 ) 16.43 Forfeited (17,079 ) 20.21 Options outstanding at December 31, 2015 1,121,545 18.31 2.8 years Exercisable at December 31, 2015 849,312 17.28 2.1 years |
Schedule of fair value of options vested and instrinsic value of outstanding and exercisable options table | The fair value of options vested and the intrinsic value of outstanding and exercisable options as of December 31, were as follows: 2015 2014 2013 (in millions) Fair value of options vested $ 1.3 $ 1.6 $ 1.8 Intrinsic value of outstanding options 10.1 9.2 22.3 Intrinsic value of exercisable options 8.5 7.8 15.2 |
Schedule of share-based compensation, restricted stock and restricted stock units activity | Changes in outstanding RSUs for the year ended December 31, 2015 were as follows: Number of RSUs Weighted Average Grant Date Fair Value RSUs outstanding at December 31, 2012 406,262 $ 16.65 Granted 84,215 23.57 Forfeited (10,924 ) 18.85 Vested (121,207 ) 15.97 RSUs outstanding at December 31, 2013 358,346 18.44 Granted 87,396 21.02 Forfeited (16,690 ) 20.18 Vested (122,185 ) 18.26 RSUs outstanding at December 31, 2014 306,867 19.15 Granted 112,048 24.19 Forfeited (7,749 ) 20.99 Vested (92,133 ) 19.74 RSUs outstanding at December 31, 2015 319,033 20.71 Vested but unsettled RSUs at December 31, 2015 124,149 17.73 |
Schedule of fair value of RSUs vested and instrinsic value of outstanding and vested RSUs table | The grant date fair value of RSUs vested and the intrinsic value of vested RSUs for the years ended December 31, were as follows: 2015 2014 2013 (in millions) Grant date fair value of RSUs vested $ 1.7 $ 2.2 $ 1.9 Intrinsic value of vested RSUs 2.2 2.7 2.9 |
PSUs awarded to certain officers table | The Company awarded PSUs to certain officers of the Company as follows: Date of Grant Target Number Awarded Fair Value on Date of Grant Aggregate Fair Value on Date of Grant (in millions) March 2013 (1) 147,440 $ 22.24 $ 3.3 March 2014 (1) 125,340 20.87 2.6 March 2015 (2) 110,000 24.20 2.7 (1) The PSUs granted in 2013 and 2014 have a performance period of three years and are subject to certain performance goals, based on the Company's statutory combined ratio, with payouts that range from 0% to 200% of the target awards. |
Statutory Matters (Tables)
Statutory Matters (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Stautory Matters [Abstract] | |
Statutory accounting practices disclosure table | The combined capital stock, surplus, and net income of the Company's insurance subsidiaries (EICN, ECIC, EPIC, and EAC), prepared in accordance with the statutory accounting practices (SAP) of the National Association of Insurance Commissioners (NAIC) as well as SAP permitted by the states of California, Florida, and Nevada, were as follows: December 31, 2015 2014 (in millions) Capital stock and unassigned surplus $ 498.8 $ 413.8 Paid in capital 174.9 174.9 Surplus notes 32.0 32.0 Total statutory surplus $ 705.7 $ 620.7 |
Accumulated Other Comprehensi44
Accumulated Other Comprehensive Income, Net (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of accumulated other comprehensive income (loss) table | The following table summarizes the components of accumulated other comprehensive income, net: Years Ended December 31, 2015 2014 (in millions) Net unrealized gain on investments, before taxes $ 128.6 $ 164.5 Deferred tax expense on net unrealized gains (45.0 ) (57.6 ) Total accumulated other comprehensive income, net $ 83.6 $ 106.9 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Net income and weighted average common shares outstanding used in earnings per share calculations table | The following table presents the net income and the weighted average shares outstanding used in the earnings per share common share calculations. Years Ended December 31, 2015 2014 2013 (in millions, except share data) Net income available to stockholders–basic and diluted $ 94.4 $ 100.7 $ 63.8 Weighted average number of shares outstanding–basic 32,070,911 31,529,621 31,142,534 Effect of dilutive securities: Stock options 286,764 223,811 464,334 PSUs 155,768 264,511 177,040 RSUs 48,010 51,126 154,259 Dilutive potential shares 490,542 539,448 795,633 Weighted average number of shares outstanding–diluted 32,561,453 32,069,069 31,938,167 |
Antidilutive securities excluded from computation of earnings per share table | The following table presents options, PSUs and RSUs that were excluded from diluted earnings per share. Years Ended December 31, 2015 2014 2013 Options excluded as the exercise price was greater than the average market price 20,200 173,247 — Options, PSUs and RSUs excluded under the treasury method, as the potential proceeds on settlement or exercise was greater than the value of shares acquired 257,405 260,171 162,800 |
Selected Quarterly Financial 46
Selected Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Selecled Quarterly Financial Data (Unaudited) [Abstract] | |
Schedule of Quarterly Financial Information [Table Text Block] | Quarterly results for the years ended December 31, 2015 and 2014 were as follows: 2015 Quarters Ended March 31 June 30 September 30 December 31 (in millions, except per share data) Net premiums earned $ 159.0 $ 170.6 $ 179.0 $ 181.8 Net realized gains (losses) on investments 1.2 1.9 2.0 (15.8 ) Losses and loss adjustment expenses 106.2 101.5 115.8 105.9 Commission expense 18.7 22.9 21.0 22.8 Underwriting and other operating expenses 33.5 32.5 31.6 37.6 Income tax expense (benefit) 4.1 4.1 5.9 (9.1 ) Net income 14.0 29.2 24.5 26.7 Earnings per common share: Basic 0.44 0.91 0.76 0.83 Diluted 0.43 0.90 0.75 0.82 2014 Quarters Ended March 31 June 30 September 30 December 31 (in millions, except per share data) Net premiums earned $ 167.2 $ 172.6 $ 172.1 $ 172.6 Net realized gains on investments 3.3 9.2 1.8 2.0 Losses and loss adjustment expenses 122.3 98.5 122.4 110.2 Commission expense 20.0 20.4 20.6 20.4 Underwriting and other operating expenses 33.3 33.1 31.9 30.9 Income tax expense 1.3 2.0 1.3 1.3 Net income 10.8 45.6 15.2 29.1 Earnings per common share: Basic 0.34 1.45 0.48 0.92 Diluted 0.34 1.42 0.47 0.91 |
Schedule II. Condensed Financ47
Schedule II. Condensed Financial Information of Registrant (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Condensed Financial Statments [Abstract] | |
Investments classified by contractual maturity date table | The amortized cost and estimated fair value of fixed maturity securities at December 31, 2015 , by contractual maturity, are shown below. Expected maturities differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Amortized Cost Estimated Fair Value (in millions) Due in one year or less $ 113.6 $ 115.1 Due after one year through five years 859.3 884.5 Due after five years through ten years 636.9 657.1 Due after ten years 252.4 267.7 Mortgage and asset-backed securities 358.9 364.1 Total $ 2,221.1 $ 2,288.5 The amortized cost and estimated fair value of fixed maturity securities at December 31, 2015 , by contractual maturity, are shown below. Expected maturities differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Amortized Cost Estimated Fair Value (in millions) Due in one year or less $ 14.6 $ 14.9 Due after one year through five years 15.6 16.1 Due after five years through ten years 3.3 3.7 Due after ten years 6.7 7.5 Total $ 40.2 $ 42.2 |
Schedule II - Balance Sheet Par
Schedule II - Balance Sheet Parenthetical (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Fixed maturity securities, amortized cost | $ 2,358,600 | $ 2,283,900 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 55,589,454 | 54,866,802 |
Common stock, shares outstanding (in shares) | 32,216,480 | 31,493,828 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Treasury stock, at cost (in shares) | 23,372,974 | 23,372,974 |
Parent Company [Member] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Equity Securities [Member] | ||
Fixed maturity securities, amortized cost | $ 137,500 | $ 97,800 |
Equity Securities [Member] | Parent Company [Member] | ||
Fixed maturity securities, amortized cost | 46,800 | 48,600 |
Debt Securities [Member] | ||
Fixed maturity securities, amortized cost | 2,221,100 | 2,186,100 |
Debt Securities [Member] | Parent Company [Member] | ||
Fixed maturity securities, amortized cost | $ 40,200 | $ 83,300 |
Changes in Estimates (Details)
Changes in Estimates (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||||
Change in Accounting Estimate [Line Items] | |||||||||||||||
Unpaid losses and loss adjustment expenses | $ 2,347,500 | $ 2,369,700 | $ 2,347,500 | $ 2,369,700 | $ 2,330,500 | $ 2,231,500 | |||||||||
Amortization of deferred gain | (11,400) | (13,100) | (14,600) | ||||||||||||
Reserves reallocated to taxable years | 36,900 | 56,300 | 13,100 | 27,200 | |||||||||||
Net income | $ 26,700 | $ 24,500 | $ 29,200 | $ 14,000 | $ 29,100 | $ 15,200 | $ 45,600 | $ 10,800 | $ 94,400 | $ 100,700 | $ 63,800 | ||||
Basic | $ 0.83 | $ 0.76 | $ 0.91 | $ 0.44 | $ 0.92 | $ 0.48 | $ 1.45 | $ 0.34 | $ 2.94 | $ 3.19 | $ 2.05 | ||||
Diluted | $ 0.82 | $ 0.75 | $ 0.90 | $ 0.43 | $ 0.91 | $ 0.47 | $ 1.42 | $ 0.34 | $ 2.90 | $ 3.14 | $ 2 | ||||
Change to Contingent Profit Commission [Member] | |||||||||||||||
Change in Accounting Estimate [Line Items] | |||||||||||||||
Amortization of deferred gain | $ (2,900) | $ (2,600) | $ (10,800) | [1] | $ (4,300) | [1] | |||||||||
Net income | $ 2,900 | $ 2,600 | $ 10,800 | $ 4,300 | |||||||||||
Basic | $ 0.08 | $ 0.34 | $ 0.14 | ||||||||||||
Diluted | $ 0.08 | $ 0.34 | $ 0.13 | ||||||||||||
EPS, basic and diluted | $ 0.09 | ||||||||||||||
Change Due to Estimated Reserves Ceded Under the LPT Agreement [Member] | |||||||||||||||
Change in Accounting Estimate [Line Items] | |||||||||||||||
Unpaid losses and loss adjustment expenses | $ (10,000) | $ (46,800) | $ (10,000) | $ (46,800) | $ (27,500) | ||||||||||
Amortization of deferred gain | (8,800) | (6,400) | [2] | (31,100) | [2] | (19,000) | [2] | ||||||||
Net income | $ 8,800 | $ 6,400 | $ 31,100 | $ 19,000 | |||||||||||
Basic | $ 0.28 | $ 0.20 | $ 0.99 | $ 0.61 | |||||||||||
Diluted | $ 0.27 | $ 0.20 | $ 0.97 | $ 0.59 | |||||||||||
Due to change in reserves for non-taxable periods | |||||||||||||||
Change in Accounting Estimate [Line Items] | |||||||||||||||
Effective Income Tax Rate Reconciliation, Percent | (65.30%) | (15.40%) | (3.40%) | (13.90%) | |||||||||||
Net income | $ 11,500 | $ 15,300 | $ 3,600 | $ 7,400 | |||||||||||
Basic | $ 0.36 | $ 0.48 | $ 0.11 | $ 0.24 | |||||||||||
Diluted | $ 0.35 | $ 0.47 | $ 0.11 | $ 0.23 | |||||||||||
[1] | (1)The cumulative adjustments to the Deferred Gain were also recognized in losses and LAE incurred in the consolidated statement of comprehensive income, so that the Deferred Gain reflects the balance that would have existed had the revised reserves been recognized at the inception of the LPT Agreement. | ||||||||||||||
[2] | (1)The cumulative adjustments to the Deferred Gain were also recognized in losses and LAE incurred in the consolidated statement of comprehensive income, so that the Deferred Gain reflects the balance that would have existed had the revised reserves been recognized at the inception of the LPT Agreement. |
Summary of Significant Accoun50
Summary of Significant Accounting Policies Reinsurance Funds Held (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Reinsurance [Line Items] | ||
Restricted cash and cash equivalents | $ 2,500 | $ 10,800 |
Funds Held in Trust, Reinsurance Agreement [Domain] | ||
Reinsurance [Line Items] | ||
Restricted cash and cash equivalents | $ 2,500 | $ 6,100 |
Summary of Significant Accoun51
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Investments | $ 2,487,200 | $ 2,448,400 | |
Premiums receivable from policyholders for final audit | 53,500 | 49,100 | |
Premiums receivable, bad debt allowance | 12,200 | 7,900 | |
Write-offs, net of recoveries of amounts previously written off | 2,400 | 3,400 | $ 2,500 |
Deferred policy acquisition cost, amortization expense | $ 103,900 | 102,700 | 96,900 |
Reinsurance quota share, percentage | 100.00% | ||
Unpaid losses | $ 628,200 | 669,500 | |
LPT actual amounts paid versus expected amounts, period | every five years | ||
LPT actual amounts paid versus expected amounts, expiration period | first twenty-five years | ||
LPT favorable/ unfavorable difference, percentage | 30.00% | ||
LPT - loss expense as a percentange of losses paid, for management of LPT claims | 7.00% | ||
Collateralized by cash or letter of credit | $ 3,700 | ||
LPT collateral held in trust account | 1,400,000 | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Intangible assets, gross carrying amount | 17,100 | 17,100 | |
Intangible assets, accumulated amortization | (8,600) | (8,100) | |
Intangible assets, net | 8,500 | 9,000 | |
Amortization of intangible assets | 500 | 700 | $ 900 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
Future amortization expense, year two | 400 | ||
Future amortization expense, year three | 300 | ||
Future amortization expense, year four | 100 | ||
Intangible assets, future amortization total | 800 | ||
Licensing Agreements [Member] | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Intangible assets, gross carrying amount | 7,700 | 7,700 | |
Intangible assets, net | 7,700 | 7,700 | |
Service Agreements [Member] | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Intangible assets, gross carrying amount | 9,400 | 9,400 | |
Intangible assets, accumulated amortization | (8,600) | (8,100) | |
Intangible assets, net | $ 800 | 1,300 | |
Leasehold Improvements [Member] | |||
Finite-Lived Intangible Assets, Amortization Method | amortized over three to five years | ||
Electronic Data Processing Equipment, Software, Furniture and Equipment and Automobiles [Member] | |||
Finite-Lived Intangible Assets, Amortization Method | straight-line method over three to seven years | ||
Portion at Fair Value Measurement [Member] | |||
Investments | $ 32,700 | $ 33,300 |
Fair Value of Financial Instr52
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Investments | $ 2,487,200 | $ 2,448,400 | ||
Cash and cash equivalents | 56,600 | 103,600 | $ 34,500 | $ 140,700 |
Restricted cash and cash equivalents | 2,500 | 10,800 | ||
Notes payable | 32,000 | 92,000 | ||
Investments, fair value | 2,487,200 | 2,448,400 | ||
Cash and cash equivalents, estimated fair value | 56,600 | 103,600 | ||
Notes payable, fair value | $ 36,600 | $ 97,800 |
Fair Value of Financial Instr53
Fair Value of Financial Instruments, Fair Value Inputs (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 2,487.2 | $ 2,448.4 |
Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 2,288.5 | 2,275.7 |
Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 2,288.5 | 2,275.7 |
Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
US Treasury Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 120.2 | 166.7 |
US Treasury Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
US Treasury Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 120.2 | 166.7 |
US Treasury Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
US Government Agencies Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 24.4 | 39.6 |
US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 24.4 | 39.6 |
US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
US States and Political Subdivisions Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 854.5 | 745.8 |
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 854.5 | 745.8 |
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Corporate Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 925.3 | 908.3 |
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 925.3 | 908.3 |
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Residential Mortgage Backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 237.9 | 288.4 |
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 237.9 | 288.4 |
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Commercial Mortgage Backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 80.3 | 65.4 |
Commercial Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Commercial Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 80.3 | 65.4 |
Commercial Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Asset-backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 45.9 | 61.5 |
Asset-backed Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Asset-backed Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 45.9 | 61.5 |
Asset-backed Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Equity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 198.7 | 172.7 |
Equity Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 198.7 | 172.7 |
Equity Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Equity Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 0 | $ 0 |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | $ 2,358,600 | $ 2,283,900 |
Gross unrealized gains | 143,400 | 170,000 |
Gross unrealized loss | (14,800) | (5,500) |
Investments | 2,487,200 | 2,448,400 |
Deposit Assets | ||
Investments | 2,487,200 | 2,448,400 |
Assets Held-in-trust | ||
Investments | 2,487,200 | 2,448,400 |
Debt Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 2,221,100 | 2,186,100 |
Gross unrealized gains | 77,600 | 94,500 |
Gross unrealized loss | (10,200) | (4,900) |
Investments | 2,288,500 | 2,275,700 |
Deposit Assets | ||
Investments | 2,288,500 | 2,275,700 |
Assets Held-in-trust | ||
Investments | 2,288,500 | 2,275,700 |
US Treasury Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 116,400 | 160,900 |
Gross unrealized gains | 3,900 | 5,800 |
Gross unrealized loss | (100) | 0 |
Investments | 120,200 | 166,700 |
Deposit Assets | ||
Investments | 120,200 | 166,700 |
Assets Held-in-trust | ||
Investments | 120,200 | 166,700 |
US Government Agencies Debt Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 23,000 | 37,200 |
Gross unrealized gains | 1,400 | 2,400 |
Gross unrealized loss | 0 | 0 |
Investments | 24,400 | 39,600 |
Deposit Assets | ||
Investments | 24,400 | 39,600 |
Assets Held-in-trust | ||
Investments | 24,400 | 39,600 |
US States and Political Subdivisions Debt Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 809,400 | 701,600 |
Gross unrealized gains | 45,100 | 44,400 |
Gross unrealized loss | 0 | (200) |
Investments | 854,500 | 745,800 |
Deposit Assets | ||
Investments | 854,500 | 745,800 |
Assets Held-in-trust | ||
Investments | 854,500 | 745,800 |
Corporate Debt Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 913,400 | 880,700 |
Gross unrealized gains | 19,900 | 30,800 |
Gross unrealized loss | (8,000) | (3,200) |
Investments | 925,300 | 908,300 |
Deposit Assets | ||
Investments | 925,300 | 908,300 |
Assets Held-in-trust | ||
Investments | 925,300 | 908,300 |
Asset-backed Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 46,000 | 61,600 |
Gross unrealized gains | 0 | 0 |
Gross unrealized loss | (100) | (100) |
Investments | 45,900 | 61,500 |
Deposit Assets | ||
Investments | 45,900 | 61,500 |
Assets Held-in-trust | ||
Investments | 45,900 | 61,500 |
Residential Mortgage Backed Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 231,800 | 278,600 |
Gross unrealized gains | 7,100 | 10,600 |
Gross unrealized loss | (1,000) | (800) |
Investments | 237,900 | 288,400 |
Deposit Assets | ||
Investments | 237,900 | 288,400 |
Assets Held-in-trust | ||
Investments | 237,900 | 288,400 |
Commercial Mortgage Backed Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 81,100 | 65,500 |
Gross unrealized gains | 200 | 500 |
Gross unrealized loss | (1,000) | (600) |
Investments | 80,300 | 65,400 |
Deposit Assets | ||
Investments | 80,300 | 65,400 |
Assets Held-in-trust | ||
Investments | 80,300 | 65,400 |
Equity Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 137,500 | 97,800 |
Gross unrealized gains | 65,800 | 75,500 |
Gross unrealized loss | (4,600) | (600) |
Investments | 198,700 | 172,700 |
Deposit Assets | ||
Investments | 198,700 | 172,700 |
Assets Held-in-trust | ||
Investments | 198,700 | 172,700 |
Funds Held in Trust, Reinsurance Agreement [Domain] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Investments | 74,600 | |
Deposit Assets | ||
Investments | 74,600 | |
Assets Held-in-trust | ||
Investments | 74,600 | |
Portion at Fair Value Measurement [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Investments | 32,700 | 33,300 |
Deposit Assets | ||
Investments | 32,700 | 33,300 |
Assets Held-in-trust | ||
Investments | 32,700 | 33,300 |
Portion at Fair Value Measurement [Member] | Debt Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Investments | 881,200 | 783,900 |
Deposit Assets | ||
Investments | 881,200 | 783,900 |
Assets Held-in-trust | ||
Investments | $ 881,200 | $ 783,900 |
Investments, Amortized Cost and
Investments, Amortized Cost and Estimated Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Amortized Cost | ||
Due in one year or less, amortized cost | $ 113,600 | |
Due after one year through five years, amortized cost | 859,300 | |
Due after five years through ten years, amortized cost | 636,900 | |
Due after ten years, amortized cost | 252,400 | |
Mortgage and asset-backed securities, amortized cost | 358,900 | |
Total, amortized cost | 2,221,100 | |
Estimated Fair Value | ||
Due in one year or less, fair value | 115,100 | |
Due after one year through five years, fair value | 884,500 | |
Due after five years through ten years, fair value | 657,100 | |
Due after ten years, fair value | 267,700 | |
Mortgage and asset-backed securities, fair value | 364,100 | |
Total, fair value | $ 2,288,500 | $ 2,275,700 |
Investments, Continuous Loss Po
Investments, Continuous Loss Position (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015USD ($)shares | Dec. 31, 2014USD ($)shares | Dec. 31, 2013USD ($)shares | |
Estimated Fair Value | |||
Estimated fair value, less than 12 months | $ 527.7 | $ 140.6 | |
Estimated fair value, 12 months or greater | 52.8 | 223.1 | |
Estimated fair value, total | 580.5 | 363.7 | |
Gross Unrealized Losses | |||
Gross unrealized losses, less than 12 Months | 11.2 | 1.6 | |
Gross unrealized losses, 12 months or greater | 3.6 | 3.9 | |
Estimated unrealized loss, total position | $ 14.8 | $ 5.5 | |
Number of issues in loss position, less than 12 months | shares | 260 | 62 | |
Number of issues in loss position, 12 months or greater | shares | 44 | 89 | |
Number of issues in loss position, aggregate | shares | 304 | 151 | |
Total impairments, value | $ 17.2 | $ 0.5 | $ 0.1 |
Total impairments, number of securitites | shares | 27 | 7 | 1 |
Debt Securities [Member] | |||
Estimated Fair Value | |||
Estimated fair value, less than 12 months | $ 491.9 | $ 130.5 | |
Estimated fair value, 12 months or greater | 52.8 | 223.1 | |
Estimated fair value, total | 544.7 | 353.6 | |
Gross Unrealized Losses | |||
Gross unrealized losses, less than 12 Months | 6.6 | 1 | |
Gross unrealized losses, 12 months or greater | 3.6 | 3.9 | |
Estimated unrealized loss, total position | $ 10.2 | $ 4.9 | |
Number of issues in loss position, less than 12 months | shares | 215 | 47 | |
Number of issues in loss position, 12 months or greater | shares | 44 | 89 | |
Number of issues in loss position, aggregate | shares | 259 | 136 | |
US Treasury Securities [Member] | |||
Estimated Fair Value | |||
Estimated fair value, less than 12 months | $ 27.4 | $ 0 | |
Estimated fair value, total | 27.4 | 0 | |
Gross Unrealized Losses | |||
Gross unrealized losses, less than 12 Months | 0.1 | 0 | |
Estimated unrealized loss, total position | $ 0.1 | $ 0 | |
Number of issues in loss position, less than 12 months | shares | 20 | 0 | |
Number of issues in loss position, aggregate | shares | 20 | 0 | |
US States and Political Subdivisions Debt Securities [Member] | |||
Estimated Fair Value | |||
Estimated fair value, less than 12 months | $ 0 | $ 20.6 | |
Estimated fair value, total | 0 | 20.6 | |
Gross Unrealized Losses | |||
Gross unrealized losses, less than 12 Months | 0 | 0.2 | |
Estimated unrealized loss, total position | $ 0 | $ 0.2 | |
Number of issues in loss position, less than 12 months | shares | 0 | 5 | |
Number of issues in loss position, aggregate | shares | 0 | 5 | |
Corporate Debt Securities [Member] | |||
Estimated Fair Value | |||
Estimated fair value, less than 12 months | $ 328.4 | $ 109.9 | |
Estimated fair value, 12 months or greater | 34.6 | 129.4 | |
Estimated fair value, total | 363 | 239.3 | |
Gross Unrealized Losses | |||
Gross unrealized losses, less than 12 Months | 4.7 | 0.8 | |
Gross unrealized losses, 12 months or greater | 3.3 | 2.4 | |
Estimated unrealized loss, total position | $ 8 | $ 3.2 | |
Number of issues in loss position, less than 12 months | shares | 122 | 42 | |
Number of issues in loss position, 12 months or greater | shares | 15 | 39 | |
Number of issues in loss position, aggregate | shares | 137 | 81 | |
Residential Mortgage Backed Securities [Member] | |||
Estimated Fair Value | |||
Estimated fair value, less than 12 months | $ 50.5 | $ 0 | |
Estimated fair value, 12 months or greater | 7.1 | 44.1 | |
Estimated fair value, total | 57.6 | 44.1 | |
Gross Unrealized Losses | |||
Gross unrealized losses, less than 12 Months | 0.8 | 0 | |
Gross unrealized losses, 12 months or greater | 0.2 | 0.8 | |
Estimated unrealized loss, total position | $ 1 | $ 0.8 | |
Number of issues in loss position, less than 12 months | shares | 24 | 0 | |
Number of issues in loss position, 12 months or greater | shares | 25 | 36 | |
Number of issues in loss position, aggregate | shares | 49 | 36 | |
Commercial Mortgage Backed Securities [Member] | |||
Estimated Fair Value | |||
Estimated fair value, less than 12 months | $ 51.5 | $ 0 | |
Estimated fair value, 12 months or greater | 0 | 31.3 | |
Estimated fair value, total | 51.5 | 31.3 | |
Gross Unrealized Losses | |||
Gross unrealized losses, less than 12 Months | 1 | 0 | |
Gross unrealized losses, 12 months or greater | 0 | 0.6 | |
Estimated unrealized loss, total position | $ 1 | $ 0.6 | |
Number of issues in loss position, less than 12 months | shares | 22 | 0 | |
Number of issues in loss position, 12 months or greater | shares | 0 | 8 | |
Number of issues in loss position, aggregate | shares | 22 | 8 | |
Asset-backed Securities [Member] | |||
Estimated Fair Value | |||
Estimated fair value, less than 12 months | $ 34.1 | $ 0 | |
Estimated fair value, 12 months or greater | 11.1 | 18.3 | |
Estimated fair value, total | 45.2 | 18.3 | |
Gross Unrealized Losses | |||
Gross unrealized losses, less than 12 Months | 0 | 0 | |
Gross unrealized losses, 12 months or greater | 0.1 | 0.1 | |
Estimated unrealized loss, total position | $ 0.1 | $ 0.1 | |
Number of issues in loss position, less than 12 months | shares | 27 | 0 | |
Number of issues in loss position, 12 months or greater | shares | 4 | 6 | |
Number of issues in loss position, aggregate | shares | 31 | 6 | |
Equity Securities [Member] | |||
Estimated Fair Value | |||
Estimated fair value, less than 12 months | $ 35.8 | $ 10.1 | |
Estimated fair value, total | 35.8 | 10.1 | |
Gross Unrealized Losses | |||
Gross unrealized losses, less than 12 Months | 4.6 | 0.6 | |
Estimated unrealized loss, total position | $ 4.6 | $ 0.6 | |
Number of issues in loss position, less than 12 months | shares | 45 | 15 | |
Number of issues in loss position, aggregate | shares | 45 | 15 |
Investments, Net Realized Gains
Investments, Net Realized Gains (Losses) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net realized gains (losses) | |||
Net realized (losses) gains on investments | $ (10,700) | $ 16,300 | $ 9,500 |
Change in unrealized gains (losses) | |||
Change in unrealized gains (losses) on fixed maturity and equity securities | (35,900) | 25,300 | (60,200) |
Debt Securities [Member] | |||
Net realized gains (losses) | |||
Gross gains from sales | 500 | 1,100 | 700 |
Gross losses from sales | (400) | 0 | 0 |
Net realized (losses) gains on investments | 100 | 1,100 | 700 |
Change in unrealized gains (losses) | |||
Change in unrealized gains (losses) on fixed maturity and equity securities | (22,200) | 23,100 | (88,800) |
Equity Securities [Member] | |||
Net realized gains (losses) | |||
Gross gains from sales | 8,100 | 15,700 | 9,100 |
Gross losses from sales | (18,900) | (500) | (300) |
Net realized (losses) gains on investments | (10,800) | 15,200 | 8,800 |
Change in unrealized gains (losses) | |||
Change in unrealized gains (losses) on fixed maturity and equity securities | $ (13,700) | $ 2,200 | $ 28,600 |
Net Investment Income (Details)
Net Investment Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Available-for-sale Securities | $ 2,487.2 | $ 2,448.4 | |
Investment income | 74.8 | 75 | $ 73.4 |
Investment expenses | (2.6) | (2.6) | (2.6) |
Net investment income | 72.2 | 72.4 | 70.8 |
Debt Securities [Member] | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Investment income related to fixed maturity securities and short-term investments and cash equivalents | 68.8 | 70.7 | 69.5 |
Equity Securities [Member] | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Investment income related to equity securities | 5.9 | 4.2 | 3.8 |
Short-term Investments [Member] | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Investment income related to fixed maturity securities and short-term investments and cash equivalents | 0.1 | 0.1 | $ 0.1 |
Portion at Fair Value Measurement [Member] | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Available-for-sale Securities | $ 32.7 | $ 33.3 |
Property and Equipment Property
Property and Equipment Property and Equipment breakout (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property and Equipment [Line Items] | |||
Property and equipment, gross | $ 64,500 | $ 53,900 | |
Accumulated depreciation, depletion and amortization, property and equipment | 39,600 | 32,900 | |
Property and equipment, net | 24,900 | 21,000 | |
Utilities operating expense, depreciation and amortization | 7,800 | 6,300 | $ 5,200 |
Payments to develop software | 1,200 | 800 | |
Office Equipment [Member] | |||
Property and Equipment [Line Items] | |||
Property and equipment, gross | 2,300 | 2,300 | |
Leasehold Improvements [Member] | |||
Property and Equipment [Line Items] | |||
Property and equipment, gross | 4,300 | 4,400 | |
Computer Equipment [Member] | |||
Property and Equipment [Line Items] | |||
Property and equipment, gross | 56,700 | 46,000 | |
Automobiles [Member] | |||
Property and Equipment [Line Items] | |||
Property and equipment, gross | $ 1,200 | $ 1,200 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current Income Tax Expense (Benefit), Continuing Operations [Abstract] | |||||||||||
Current federal tax expense (benefit) | $ 9,500 | $ 6,300 | $ 100 | ||||||||
Current state and local tax expense (benefit) | 1,100 | 100 | 0 | ||||||||
Current income tax expense (benefit) | 10,600 | 6,400 | 100 | ||||||||
Deferred Income Tax Expense (Benefit), Continuing Operations [Abstract] | |||||||||||
Deferred income tax benefit | (5,600) | (500) | (10,800) | ||||||||
Income tax expense (benefit) | $ (9,100) | $ 5,900 | $ 4,100 | $ 4,100 | $ 1,300 | $ 1,300 | $ 2,000 | $ 1,300 | $ 5,000 | 5,900 | (10,700) |
Statutory federal tax rate | 35.00% | ||||||||||
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation [Abstract] | |||||||||||
Expense computed at statutory rate | $ 34,800 | 37,300 | 18,600 | ||||||||
Dividends received deduction and tax-exempt interest | (8,600) | (8,800) | (9,100) | ||||||||
Pre-privatization reserve adjustment | (15,300) | (3,600) | (7,400) | ||||||||
LPT deferred gain amortization | (4,900) | (8,400) | (6,600) | ||||||||
LPT reserve adjustment | (2,200) | (10,900) | (6,700) | ||||||||
Income tax reconciliation, other | 1,200 | 300 | 500 | ||||||||
Downward adjustment of pre-privatization unpaid loss reserve | 56,300 | 13,100 | 27,200 | ||||||||
Net income | 26,700 | $ 24,500 | $ 29,200 | $ 14,000 | 29,100 | $ 15,200 | $ 45,600 | $ 10,800 | 94,400 | 100,700 | 63,800 |
Deferred Tax Liabilities [Abstract] | |||||||||||
Unrealized capital gains, net | 45,000 | 57,600 | 45,000 | 57,600 | |||||||
Deferred policy acquisition cost | 15,700 | 15,700 | 15,700 | 15,700 | |||||||
Intangible assets | 3,000 | 3,200 | 3,000 | 3,200 | |||||||
Other deferred tax liabilities | 7,500 | 5,700 | 7,500 | 5,700 | |||||||
Total deferred tax liabilities | 71,200 | 82,200 | 71,200 | 82,200 | |||||||
Deferred Tax Assets [Abstract] | |||||||||||
Loss reserves discounting for tax reporting | 56,300 | 56,700 | 56,300 | 56,700 | |||||||
Unearned premiums | 20,900 | 20,900 | 20,900 | 20,900 | |||||||
Allowance for bad debt | 4,300 | 2,700 | 4,300 | 2,700 | |||||||
Stock based compensation | 4,100 | 5,800 | 4,100 | 5,800 | |||||||
Accrued liabilities | 8,400 | 7,500 | 8,400 | 7,500 | |||||||
Minimum tax credit | 28,000 | 19,600 | 28,000 | 19,600 | |||||||
Net operating loss carry forward | 8,700 | 16,200 | 8,700 | 16,200 | |||||||
Other deferred tax assets | 8,400 | 2,500 | 8,400 | 2,500 | |||||||
Total deferred tax assets | 139,100 | 131,900 | 139,100 | 131,900 | |||||||
Deferred income taxes, net | 67,900 | 49,700 | 67,900 | 49,700 | |||||||
Operating loss carryforwards | 25,000 | 25,000 | |||||||||
Minimum tax credit | $ 28,000 | 28,000 | |||||||||
Change Due to Estimated Reserves Ceded Under the LPT Agreement [Member] | |||||||||||
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation [Abstract] | |||||||||||
Net income | 8,800 | 6,400 | 31,100 | 19,000 | |||||||
Change to Contingent Profit Commission [Member] | |||||||||||
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation [Abstract] | |||||||||||
Net income | $ 2,900 | $ 2,600 | $ 10,800 | $ 4,300 |
Liability for Unpaid Losses a61
Liability for Unpaid Losses and Loss Adjustment Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||||
Unpaid losses and LAE, gross of reinsurance, at beginning of period | $ 2,369,700 | $ 2,330,500 | $ 2,231,500 | |
Loss reinsurance recoverable, excluding bad debt, on unpaid losses | 669,500 | 743,100 | 805,400 | |
Net unpaid losses and LAE at beginning of period | 1,700,200 | 1,587,400 | 1,426,100 | |
Losses and LAE, net of reinsurance, incurred in: | ||||
Current year | 456,900 | 503,800 | 494,500 | |
Prior years | $ 8,500 | (7,200) | 4,600 | 7,000 |
Total net losses and LAE incurred during the period | 449,700 | 508,400 | 501,500 | |
Deduct payments for losses and LAE, net of reinsurance, related to: | ||||
Current year | 75,400 | 75,900 | 78,500 | |
Prior years | 355,200 | 319,700 | 261,700 | |
Total net payments for losses and LAE during the period | 430,600 | 395,600 | 340,200 | |
Ending unpaid losses and LAE, net of reinsurance | 1,719,300 | 1,719,300 | 1,700,200 | 1,587,400 |
Loss reinsurance recoverable, excluding bad debt, on unpaid losses | 628,200 | 628,200 | 669,500 | 743,100 |
Unpaid losses and LAE, gross of reinsurance, at end of period | 2,347,500 | 2,347,500 | 2,369,700 | 2,330,500 |
Salvage and subrogation recoveries, value | 26,800 | $ 26,800 | $ 25,100 | |
Losses and LAE actual paid were more than expected | ||||
Losses and LAE, net of reinsurance, incurred in: | ||||
Prior years | 5,000 | |||
Related to involuntary assigned risk business | ||||
Losses and LAE, net of reinsurance, incurred in: | ||||
Prior years | $ 500 | $ 1,900 |
Reinsurance Reinsurance Premium
Reinsurance Reinsurance Premium Note (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Premiums Written, Net | ||||
Direct premiums, written | $ 684.9 | $ 686.8 | $ 680.5 | |
Assumed premiums written | 12.8 | 10.9 | 9.4 | |
Gross premiums, written | 697.7 | 697.7 | 689.9 | |
Ceded premiums written | (8.4) | (10.1) | (11.4) | |
Premiums written, net | $ 678.5 | 689.3 | 687.6 | 678.5 |
Premiums Earned, Net | ||||
Direct premiums earned | 686 | 684.3 | 645.4 | |
Assumed premiums earned | 12.8 | 10.3 | 8.3 | |
Gross premiums, earned | 698.8 | 694.6 | 653.7 | |
Ceded premiums earned | (8.4) | (10.1) | (11.4) | |
Premiums earned, net | 690.4 | 684.5 | 642.3 | |
Ceded losses and LAE incurred | $ 10.1 | $ 17.2 | $ 10.7 |
Reinsurance Excess of Loss (Det
Reinsurance Excess of Loss (Details) $ in Millions | Dec. 31, 2015USD ($) |
Excess of Loss [Abstract] | |
Minimum reinsurance for losses from single occurence or event | $ 7 |
Maximum reinsurance for losses from single occurence or event | $ 200 |
Reinsurance LPT Agreement (Deta
Reinsurance LPT Agreement (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||||
Reinsurance Agreement [Line Items] | |||||||
Unpaid losses | $ 669,500 | $ 628,200 | $ 669,500 | ||||
Recoverables was related to the LPT agreement | 534,800 | $ 498,000 | 534,800 | ||||
Reinsurance quota share, percentage | 100.00% | ||||||
Ceded premiums written | $ 8,400 | 10,100 | $ 11,400 | ||||
Coverage provided under LPT agreement | 2,000,000 | ||||||
Paid losses and LAE claims related to LPT | 695,200 | ||||||
Amortization of deferred gain | 11,400 | 13,100 | 14,600 | ||||
LPT Agreement [Member] | |||||||
Reinsurance Agreement [Line Items] | |||||||
Cash | 11,700 | 11,700 | |||||
Liabilities for the incurred but unpaid losses and LAE related to claims prior to July 1, 1995 | 1,500,000 | ||||||
Ceded premiums written | 775,000 | ||||||
Change Due to Estimated Reserves Ceded Under the LPT Agreement [Member] | |||||||
Reinsurance Agreement [Line Items] | |||||||
Amortization of deferred gain | 8,800 | 6,400 | [1] | 31,100 | [1] | 19,000 | [1] |
Change to Contingent Profit Commission [Member] | |||||||
Reinsurance Agreement [Line Items] | |||||||
Amortization of deferred gain | $ 2,900 | $ 2,600 | $ 10,800 | [2] | $ 4,300 | [2] | |
[1] | (1)The cumulative adjustments to the Deferred Gain were also recognized in losses and LAE incurred in the consolidated statement of comprehensive income, so that the Deferred Gain reflects the balance that would have existed had the revised reserves been recognized at the inception of the LPT Agreement. | ||||||
[2] | (1)The cumulative adjustments to the Deferred Gain were also recognized in losses and LAE incurred in the consolidated statement of comprehensive income, so that the Deferred Gain reflects the balance that would have existed had the revised reserves been recognized at the inception of the LPT Agreement. |
Notes Payable Outstanding (Deta
Notes Payable Outstanding (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | |
Debt Instrument [Line Items] | ||||||
Notes payable | $ 32,000 | $ 92,000 | ||||
Line of credit facility, decrease, repayments | 60,000 | |||||
Cash paid for interest | 2,800 | 3,000 | $ 3,300 | |||
Line of Credit [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Notes payable | 0 | 60,000 | 70,000 | $ 80,000 | $ 90,000 | $ 100,000 |
Cash paid for interest | 1,300 | 1,400 | 1,600 | |||
Dekania Surplus Note [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Notes payable | $ 10,000 | 10,000 | ||||
Notes payable, maturity date | Apr. 30, 2034 | |||||
Notes payable, callable | second quarter of 2009 | |||||
Interest rate, basis points in excess of the 90-day LIBOR | 425 | |||||
Cash paid for interest | $ 500 | 500 | 500 | |||
Accrued interest | 100 | 100 | ||||
ICONS Surpuls Note [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Notes payable | $ 12,000 | 12,000 | ||||
Notes payable, maturity date | May 26, 2034 | |||||
Notes payable, callable | second quarter of 2009 | |||||
Interest rate, basis points in excess of the 90-day LIBOR | 425 | |||||
Cash paid for interest | $ 600 | 500 | 600 | |||
Accrued interest | 100 | 100 | ||||
Alesco Surplus Note [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Notes payable | $ 10,000 | 10,000 | ||||
Notes payable, maturity date | Dec. 15, 2034 | |||||
Notes payable, callable | fourth quarter of 2009 | |||||
Interest rate, basis points in excess of the 90-day LIBOR | 405 | |||||
Cash paid for interest | $ 400 | 400 | $ 400 | |||
Accrued interest | $ 100 | $ 100 |
Notes Payable Principal payment
Notes Payable Principal payment obligations on notes payable outstanding (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Schedule of Capitalization, Long-term Debt [Line Items] | ||
Repayments of principal in next twelve months | $ 0 | |
Repayments of principal in year two | 0 | |
Repayments of principal in year three | 0 | |
Repayments of principal in year four | 0 | |
Repayments of principal in year five | 0 | |
Repayments of principal after year five | 32,000 | |
Notes payable | $ 32,000 | $ 92,000 |
Commitments and Contingencies F
Commitments and Contingencies Future Lease Payments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Commitments and Contingencies [Abstract] | |||
Remaining lease terms expire over the next | 6 years | ||
Future lease payments for non-cancelable operating and capital leases, in years | 5 years | ||
Operating Leases, Future Minimum Payments Due [Abstract] | |||
Operating leases, future minimum payments due, current | $ 4.9 | ||
Operating leases, future minimum payments, due in two years | 4.8 | ||
Operating leases, future minimum payments, due in three years | 3.5 | ||
Operating leases, future minimum payments, due in four years | 3 | ||
Operating leases, future minimum payments, due in five years | 2.6 | ||
Operating leases, future minimum payments, due thereafter | 1.1 | ||
Operating leases, future minimum payments due | 19.9 | ||
Capital Leases, Future Minimum Payments Due [Abstract] | |||
Capital leases, future minimum payments due, current | 0.3 | ||
Capital leases, future minimum payments due in two years | 0.3 | ||
Capital leases, future minimum payments due in three years | 0.2 | ||
Capital leases, future minimum payments due in four years | 0 | ||
Capital leases, future minimum payments due in five years | 0 | ||
Capital leases, Future minimum payments due thereafter | 0 | ||
Capital leases, future minimum payments due | 0.8 | ||
Future interest charges included in capital lease payments | 0.1 | ||
Facilities rent expense | $ 4.9 | $ 4.8 | $ 5 |
Commitments and Contingencies P
Commitments and Contingencies Property held under capital leases is included in property and equipment (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Property held under capital leases | ||
Accumulated depreciation, depletion and amortization, property and equipment | $ (39.6) | $ (32.9) |
Computers and software | ||
Property held under capital leases | ||
Property held under captial leases | 0.4 | 0.9 |
Automobiles [Member] | ||
Property held under capital leases | ||
Property held under captial leases | 1.2 | 1.2 |
Assets Held under Capital Leases [Member] | ||
Property held under capital leases | ||
Property held under captial leases | 1.6 | 2.1 |
Accumulated depreciation, depletion and amortization, property and equipment | (1) | (1) |
Total property held under capital leases | $ 0.6 | $ 1.1 |
Commitments and Contingencies C
Commitments and Contingencies Contingencies Surrounding Insurance Assessments (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Loss Contingencies [Line Items] | ||
Amount of Insurance-related assessment liability | $ 22 | $ 18.8 |
Payment period for assessment liability based on individual states regulations | one to eighty year periods | |
Other assets, prepaid policy surcharges | $ 21.4 | $ 13 |
Expected realization period for assets related to policy surcharges | one to ten year periods |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | 96 Months Ended |
Dec. 31, 2014$ / sharesshares | |
Accelerated Share Repurchases [Line Items] | |
Stock repurchased during period, shares | shares | 23,372,974 |
Accelerated share repurchases, final price paid per share | $ / shares | $ 15.51 |
Stock-Based Compensation Expens
Stock-Based Compensation Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum number of shares reserved for grants | 7,105,838 | ||
Stock-based compensation expense [Abstract] | |||
Stock-based compensation expense | $ 4.6 | $ 6 | $ 5.6 |
Less: related tax benefit | 1.6 | 2.1 | 2 |
Net stock-based compensation expense | 3 | 3.9 | 3.6 |
Stock Option [Member] | |||
Stock-based compensation expense [Abstract] | |||
Stock-based compensation expense | 1 | 1.2 | 1.7 |
Restricted stock units (RSUs) | |||
Stock-based compensation expense [Abstract] | |||
Stock-based compensation expense | 2 | 1.9 | 2.3 |
Performance shares units [Member] | |||
Stock-based compensation expense [Abstract] | |||
Stock-based compensation expense | $ 1.6 | $ 2.9 | $ 1.6 |
Stock-Based Compensation Fair M
Stock-Based Compensation Fair Market Value of Stock Options Granted, Calculated (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Fair Market Value of Stock Options Granted, Calculated [Abstract] | |||
Expected volatility | 38.00% | 39.00% | 40.10% |
Expected life (in years) | 4 years 274 days | 4 years 274 days | 4 years 274 days |
Dividend yield | 1.00% | 1.20% | 1.10% |
Risk free interest rate | 1.60% | 1.60% | 0.80% |
Weighted average grant date fair value | $ 7.63 | $ 6.66 | $ 7.04 |
Stock-Based Compensation Change
Stock-Based Compensation Changes in Outstanding Stock Options (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average grant date fair value | $ 7.63 | $ 6.66 | $ 7.04 | |
Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of outstanding options or share units | 1,121,545 | 1,521,290 | 1,546,898 | 1,830,772 |
Number of options or share units, granted | 80,800 | 141,744 | 162,800 | |
Stock-options exercised, shares | (463,466) | (120,494) | (411,295) | |
Number of options or share units, expired | (2,400) | (6,900) | ||
Number of options or share units, forfeited | (17,079) | (44,458) | (28,479) | |
Number of exercisable options or share units | 849,312 | |||
Weighted average exercise price, grants | $ 24.20 | $ 20.87 | $ 22.24 | |
Weighted average exercise price, exercises | 16.43 | 17.89 | 17.89 | |
Weighted average exercise price, expirations | 17 | 17 | ||
Weighted average exercise price, forfeitures | 20.21 | 19.99 | $ 18.90 | |
Weighted average exercise price, outstanding | 18.31 | $ 17.45 | $ 17.24 | $ 16.97 |
Weighted average exercisable price | $ 17.28 | |||
Weighted average remaining contractual life | 2 years 300 days | 2 years 324 days | 3 years 164 days | 3 years 269 days |
Share-based compensation expense, deferred | $ 1.4 | |||
Share-based compensation expense, Period for Recognition | 39 months | |||
Options vested, fair value | $ 1.3 | $ 1.6 | $ 1.8 | |
Options outstanding, intrinsic value | 10.1 | 9.2 | 22.3 | |
Options exercisable, intrinsic value | 8.5 | 7.8 | 15.2 | |
Options exercised, intrinsic value | $ 4 | $ 0.5 | $ 3.7 | |
Stock Options Granted [Domain] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average remaining contractual life | 6 years 73 days | 6 years 73 days | 6 years 80 days | |
Stock Options Exercisable [Domain] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average remaining contractual life | 2 years 45 days | |||
Restricted stock units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Service vesting period for options awarded | 4 years | |||
Vesting rights for options awarded | vest 25% on or after each of the subsequent four anniversaries of such date | |||
Number of outstanding options or share units | 319,033 | 306,867 | 358,346 | 406,262 |
Number of options or share units, granted | 112,048 | 87,396 | 84,215 | |
Number of options or share units, forfeited | (7,749) | (16,690) | (10,924) | |
Number of vested options or share units | (92,133) | (122,185) | (121,207) | |
Weighted average exercise price, grants | $ 24.19 | $ 21.02 | $ 23.57 | |
Weighted average exercise price, forfeitures | 20.99 | 20.18 | $ 18.85 | |
Weighted average exercise price, vested | 19.74 | 18.26 | 15.97 | |
Weighted average grant date fair value | $ 20.71 | $ 19.15 | $ 18.44 | $ 16.65 |
Share-based compensation expense, deferred | $ 3.2 | |||
Share-based compensation expense, Period for Recognition | 39 months | |||
Options vested, fair value | $ 1.7 | $ 2.2 | $ 1.9 | |
Options outstanding, intrinsic value | 8.7 | 7.2 | 11.3 | |
Options exercisable, intrinsic value | $ 2.2 | $ 2.7 | $ 2.9 | |
Restricted Stock Units Vested but Unsettled [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of outstanding options or share units | 124,149 | |||
Weighted average grant date fair value | $ 17.73 |
Stock-Based Compensation Perfor
Stock-Based Compensation Performance Share Awards (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Performance share awards, minimum payout | 0.00% | 0.00% | ||||
Performane share awards, maximum payout | 200.00% | 200.00% | ||||
Performance share awards, expected target | 200.00% | 80.00% | ||||
Performance share awards, ultimate payout | 0.00% | |||||
Performance shares units [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Service vesting period for options awarded | 3 years | |||||
Number of outstanding options or share units | 110,000 | [1] | 125,340 | [2] | 147,440 | [2] |
Share-based compensation options, exercise price on grant date | $ 24.20 | [1] | $ 20.87 | [2] | $ 22.24 | [2] |
Fair value of awards awarded on grant date | $ 2.7 | [1] | $ 2.6 | [2] | $ 3.3 | [2] |
Share-based compensation expense, deferred | $ 4.4 | |||||
Share-based compensation expense, Period for Recognition | 24 months | |||||
[1] | The PSUs awarded in March 2015 were awarded to certain officers of the Company and have a performance period of two years followed by an additional one year vesting period. The PSU awards are subject to certain performance goals with payouts that range from 0% to 200% of the target awards. The value shown in the table represents the aggregate number of PSUs awarded at the target level. | |||||
[2] | The PSUs granted in 2013 and 2014 have a performance period of three years and are subject to certain performance goals, based on the Company's statutory combined ratio, with payouts that range from 0% to 200% of the target awards. The ultimate payout of the PSUs awarded in 2013 was 0% of the target award. |
Statutory Matters Statutory Mat
Statutory Matters Statutory Matters (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statutory Accounting Practices [Line Items] | |||
Capital stock and unassigned surplus | $ 498,800 | $ 413,800 | |
Paid in capital | 174,900 | 174,900 | |
Surplus notes | 32,000 | 32,000 | |
Total statutory surplus | 705,700 | 620,700 | |
SAP, net income amount | 87,800 | 58,600 | $ 19,300 |
Total stockholders’ equity | $ 760,800 | $ 686,800 | |
Will maintain a risk based capital (RBC) level of at least | 350.00% | ||
EICN | |||
Statutory Accounting Practices [Line Items] | |||
Capital stock and unassigned surplus | $ 423,100 | ||
Maximum dividends that may be paid without prior approval in 2015 | $ 49,700 | ||
Extraordinary dividends, approves or does not disapprove the payment within | 30 days | ||
Percentage of surplus of EICN's statutory surplus as regards to policyholders | 10.00% | ||
EPIC | |||
Statutory Accounting Practices [Line Items] | |||
Maximum dividends that may be paid without prior approval in 2015 | $ 28,100 | ||
Percentage of surplus used to calculate the lesser of 10% of surplus or net income, not including realized capital gains, plus a 2-year carry forward. | 10.00% | ||
Percentage of surplus used to calculate 10% of surplus, with dividends payable limited to unassigned funds minus 25% of unrealized capital gains | 10.00% | ||
Percentage of surplus used to calculate the lesser of 10% of surplus or net investment income plus a 3-year carry forward with dividends payable limited to unassigned funds minus 25% of unrealized capital gains | 10.00% | ||
Percentage of unassigned gains used to calculate 10% of surplus, with dividends payable limited to unassigned funds minus 25% of unrealized capital gains | 25.00% | ||
Percentage of unassigned gains used to calculate the lesser of 10% of surplus or net investment income plus a 3-year carry forward with dividends payable limited to unassigned funds minus 25% of unrealized capital gains | 25.00% | ||
ECIC | |||
Statutory Accounting Practices [Line Items] | |||
ECIC must initiate discussions of its business plan with the California DOI if its premium to policyholder surplus ratio exceeds | 1.5 to 1 | ||
ECIC will not exceed a ratio of premium to policyholder surplus of | 2 to 1 | ||
If at any time ECIC's policyholder surplus decreases to | 80.00% | ||
EAC and EPIC | |||
Statutory Accounting Practices [Line Items] | |||
Total statutory surplus | $ 4,000 | ||
Florida statute section 624.408 requires EPIC and EAC to maintain minimum capital and surplus of the greater of $4.0 million or 10% of total liabilities. | 10.00% | ||
Used to calculate ratio of written premium to surplus | times 1.25 | ||
Net gross premiums to surplus ratio. Florida statute section 624.4095 requires net gross premiums times 1.25 not exceed this ratio. | 10-to-1 | ||
Net written premiums to surplus ratio. Florida statute section 624.4095 requires net written premiums times 1.25 not exceed this ratio. | 4-to-1 |
Accumulated Other Comprehensi76
Accumulated Other Comprehensive Income, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Net unrealized gain on investments, before taxes | $ 128,600 | $ 164,500 |
Deferred tax expense | (45,000) | (57,600) |
Total accumulated other comprehensive income, net | $ (83,600) | $ (106,900) |
Employee Benefit and Retireme77
Employee Benefit and Retirement Plans Employee Benefit and Retirement Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Employee Benefit and Retirement Plans [Abstract] | |||
Safe habor matching, 100% | 100.00% | ||
Employee contributions, 100% match, percentage | 3.00% | ||
Safe harbor matching 50% | 50.00% | ||
Employee contributions 50% match, percentage | 3.00% | ||
Employee contributions, maximum match, percentage | 5.00% | ||
Company's contributions to Employers 401(k) | $ 1.8 | $ 1.7 | $ 1.2 |
Earnings Per Share Earnings Per
Earnings Per Share Earnings Per Share (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Earnings Per Share, Basic and Diluted, by Common Class [Line Items] | |||||||||||
Net income | $ 26,700 | $ 24,500 | $ 29,200 | $ 14,000 | $ 29,100 | $ 15,200 | $ 45,600 | $ 10,800 | $ 94,400 | $ 100,700 | $ 63,800 |
Weighted average number of shares outstanding - basic | 32,070,911 | 31,529,621 | 31,142,534 | ||||||||
Effect of diluted securities: | 490,542 | 539,448 | 795,633 | ||||||||
Weighted average number of shares outstanding - diluted | 32,561,453 | 32,069,069 | 31,938,167 | ||||||||
Employee Stock Option [Member] | |||||||||||
Earnings Per Share, Basic and Diluted, by Common Class [Line Items] | |||||||||||
Effect of diluted securities: | 286,764 | 223,811 | 464,334 | ||||||||
Performance shares units [Member] | |||||||||||
Earnings Per Share, Basic and Diluted, by Common Class [Line Items] | |||||||||||
Effect of diluted securities: | 155,768 | 264,511 | 177,040 | ||||||||
Restricted stock units (RSUs) | |||||||||||
Earnings Per Share, Basic and Diluted, by Common Class [Line Items] | |||||||||||
Effect of diluted securities: | 48,010 | 51,126 | 154,259 |
Earnings Per Share Antidilutive
Earnings Per Share Antidilutive Securities (Details) - shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from computation of EPS | 257,405 | 260,171 | 162,800 |
Employee Stock Option [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from computation of EPS | 20,200 | 173,247 | 0 |
Selected Quarterly Financial 80
Selected Quarterly Financial Data Selected Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||||
Condensed Financial Statements, Captions [Line Items] | ||||||||||||||
Prior Year Claims and Claims Adjustment Expense | $ 8,500 | $ (7,200) | $ 4,600 | $ 7,000 | ||||||||||
Net premiums earned | 181,800 | $ 179,000 | $ 170,600 | $ 159,000 | $ 172,600 | $ 172,100 | $ 172,600 | $ 167,200 | 690,400 | 684,500 | 642,300 | |||
Net realized (losses) gains on investments | (15,800) | 2,000 | 1,900 | 1,200 | 2,000 | 1,800 | 9,200 | 3,300 | (10,700) | 16,300 | 9,500 | |||
Losses and loss adjustment expenses | 105,900 | 115,800 | 101,500 | 106,200 | 110,200 | 122,400 | 98,500 | 122,300 | 429,400 | 453,400 | 463,600 | |||
Commission expense | 22,800 | 21,000 | 22,900 | 18,700 | 20,400 | 20,600 | 20,400 | 20,000 | 85,400 | 81,400 | 78,300 | |||
Underwriting and other operating expenses | 37,600 | 31,600 | 32,500 | 33,500 | 30,900 | 31,900 | 33,100 | 33,300 | 135,200 | 129,100 | 125,300 | |||
Income tax expense (benefit) | (9,100) | 5,900 | 4,100 | 4,100 | 1,300 | 1,300 | 2,000 | 1,300 | 5,000 | 5,900 | (10,700) | |||
Net income | $ 26,700 | $ 24,500 | $ 29,200 | $ 14,000 | $ 29,100 | $ 15,200 | $ 45,600 | $ 10,800 | $ 94,400 | $ 100,700 | $ 63,800 | |||
Earnings per common share (Note 18): | ||||||||||||||
Basic | $ 0.83 | $ 0.76 | $ 0.91 | $ 0.44 | $ 0.92 | $ 0.48 | $ 1.45 | $ 0.34 | $ 2.94 | $ 3.19 | $ 2.05 | |||
Diluted | $ 0.82 | $ 0.75 | $ 0.90 | $ 0.43 | $ 0.91 | $ 0.47 | $ 1.42 | $ 0.34 | $ 2.90 | $ 3.14 | $ 2 | |||
Amortization of deferred gain | $ 11,400 | $ 13,100 | $ 14,600 | |||||||||||
Reserves reallocated to taxable years | $ 36,900 | 56,300 | 13,100 | 27,200 | ||||||||||
Change Due to Estimated Reserves Ceded Under the LPT Agreement [Member] | ||||||||||||||
Condensed Financial Statements, Captions [Line Items] | ||||||||||||||
Net income | $ 8,800 | $ 6,400 | $ 31,100 | $ 19,000 | ||||||||||
Earnings per common share (Note 18): | ||||||||||||||
Basic | $ 0.28 | $ 0.20 | $ 0.99 | $ 0.61 | ||||||||||
Diluted | $ 0.27 | $ 0.20 | $ 0.97 | $ 0.59 | ||||||||||
Amortization of deferred gain | $ 8,800 | $ 6,400 | [1] | $ 31,100 | [1] | $ 19,000 | [1] | |||||||
Change to Contingent Profit Commission [Member] | ||||||||||||||
Condensed Financial Statements, Captions [Line Items] | ||||||||||||||
Net income | $ 2,900 | $ 2,600 | $ 10,800 | $ 4,300 | ||||||||||
Earnings per common share (Note 18): | ||||||||||||||
Basic | $ 0.08 | $ 0.34 | $ 0.14 | |||||||||||
Diluted | $ 0.08 | $ 0.34 | $ 0.13 | |||||||||||
EPS, basic and diluted | $ 0.09 | |||||||||||||
Amortization of deferred gain | $ 2,900 | $ 2,600 | $ 10,800 | [2] | $ 4,300 | [2] | ||||||||
Due to change in reserves for non-taxable periods | ||||||||||||||
Condensed Financial Statements, Captions [Line Items] | ||||||||||||||
Net income | $ 11,500 | $ 15,300 | $ 3,600 | $ 7,400 | ||||||||||
Earnings per common share (Note 18): | ||||||||||||||
Basic | $ 0.36 | $ 0.48 | $ 0.11 | $ 0.24 | ||||||||||
Diluted | $ 0.35 | $ 0.47 | $ 0.11 | $ 0.23 | ||||||||||
Effective Income Tax Rate Reconciliation, Percent | 65.30% | 15.40% | 3.40% | 13.90% | ||||||||||
Related to Voluntary Risk Business [Member] | ||||||||||||||
Condensed Financial Statements, Captions [Line Items] | ||||||||||||||
Prior Year Claims and Claims Adjustment Expense | $ 9,000 | |||||||||||||
Related to involuntary assigned risk business | ||||||||||||||
Condensed Financial Statements, Captions [Line Items] | ||||||||||||||
Prior Year Claims and Claims Adjustment Expense | 500 | $ 1,900 | ||||||||||||
Related to Prior Year Accident Year Loss Development [Member] | ||||||||||||||
Condensed Financial Statements, Captions [Line Items] | ||||||||||||||
Net income | $ 8,500 | |||||||||||||
Earnings per common share (Note 18): | ||||||||||||||
EPS, basic and diluted | $ 0.26 | |||||||||||||
[1] | (1)The cumulative adjustments to the Deferred Gain were also recognized in losses and LAE incurred in the consolidated statement of comprehensive income, so that the Deferred Gain reflects the balance that would have existed had the revised reserves been recognized at the inception of the LPT Agreement. | |||||||||||||
[2] | (1)The cumulative adjustments to the Deferred Gain were also recognized in losses and LAE incurred in the consolidated statement of comprehensive income, so that the Deferred Gain reflects the balance that would have existed had the revised reserves been recognized at the inception of the LPT Agreement. |
Schedule II. Condensed Financ81
Schedule II. Condensed Financial Information of Registrant (Condensed Balance Sheets) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Excess tax benefits from stock-based compensation | $ 1,200 | $ 1,200 | $ 0 | |
Investments | ||||
Investment in securities available-for-sale (amortized cost $108,890 in 2013 and $133,606 in 2012) | 2,487,200 | 2,448,400 | ||
Equity securities at fair value (amortized cost $42,861 in 2013 and $30,678 in 2012) | 198,700 | 172,700 | ||
Total investments | 2,487,200 | 2,448,400 | ||
Cash and cash equivalents | 56,600 | 103,600 | 34,500 | $ 140,700 |
Restricted cash and cash equivalents | 2,500 | 10,800 | ||
Deferred income taxes, net | 67,900 | 49,700 | ||
Other assets | 40,900 | 23,500 | ||
Total assets | 3,755,800 | 3,769,700 | ||
Liabilities and stockholders’ equity | ||||
Accounts payable and accrued expenses | 24,100 | 20,400 | ||
Notes payable | 32,000 | 92,000 | ||
Other liabilities | 40,500 | 36,700 | ||
Total liabilities | 2,995,000 | 3,082,900 | ||
Stockholders’ equity: | ||||
Common stock, $0.01 par value; 150,000,000 shares authorized; 55,589,454 and 54,866,802 shares issued and 32,216,480 and 31,493,828 shares outstanding at December 31, 2015 and 2014, respectively | 600 | 600 | ||
Preferred stock, $0.01 par value; 25,000,000 shares authorized; none issued | 0 | 0 | ||
Additional paid-in capital | 357,200 | 346,600 | ||
Retained earnings | 682,000 | 595,300 | ||
Accumulated other comprehensive income, net | 83,600 | 106,900 | ||
Treasury stock, at cost (23,372,974 shares at December 31, 2015 and 2014) | (362,600) | (362,600) | ||
Total stockholders’ equity | 760,800 | 686,800 | ||
Total liabilities and stockholders’ equity | 3,755,800 | 3,769,700 | ||
Parent Company [Member] | ||||
Excess tax benefits from stock-based compensation | 1,200 | 1,200 | 0 | |
Investments | ||||
Investment in subsidiaries | 647,100 | 567,100 | ||
Investment in securities available-for-sale (amortized cost $108,890 in 2013 and $133,606 in 2012) | 42,200 | 86,700 | ||
Equity securities at fair value (amortized cost $42,861 in 2013 and $30,678 in 2012) | 51,600 | 58,600 | ||
Total investments | 740,900 | 712,400 | ||
Cash and cash equivalents | 1,400 | 10,900 | $ 6,400 | $ 40,100 |
Restricted cash and cash equivalents | 0 | 4,600 | ||
Intercompany receivable | 200 | 300 | ||
Federal income taxes recoverable | 1,700 | 6,600 | ||
Deferred income taxes, net | 20,600 | 13,900 | ||
Other assets | 1,500 | 1,900 | ||
Total assets | 766,300 | 750,600 | ||
Liabilities and stockholders’ equity | ||||
Accounts payable and accrued expenses | 5,200 | 3,800 | ||
Notes payable | 0 | 60,000 | ||
Other liabilities | 300 | 0 | ||
Total liabilities | 5,500 | 63,800 | ||
Stockholders’ equity: | ||||
Common stock, $0.01 par value; 150,000,000 shares authorized; 55,589,454 and 54,866,802 shares issued and 32,216,480 and 31,493,828 shares outstanding at December 31, 2015 and 2014, respectively | 600 | 600 | ||
Preferred stock, $0.01 par value; 25,000,000 shares authorized; none issued | 0 | 0 | ||
Additional paid-in capital | 357,200 | 346,600 | ||
Retained earnings | 682,000 | 595,300 | ||
Accumulated other comprehensive income, net | 83,600 | 106,900 | ||
Treasury stock, at cost (23,372,974 shares at December 31, 2015 and 2014) | (362,600) | (362,600) | ||
Total stockholders’ equity | 760,800 | 686,800 | ||
Total liabilities and stockholders’ equity | $ 766,300 | $ 750,600 |
Schedule II. Condensed Financ82
Schedule II. Condensed Financial Information of Registrant (Condensed Balance Sheets Parenthetical) (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Fixed maturity securities, amortized cost | $ 2,358,600 | $ 2,283,900 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 55,589,454 | 54,866,802 |
Common stock, shares outstanding (in shares) | 32,216,480 | 31,493,828 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Treasury stock, at cost (in shares) | 23,372,974 | 23,372,974 |
Parent Company [Member] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Debt Securities [Member] | ||
Fixed maturity securities, amortized cost | $ 2,221,100 | $ 2,186,100 |
Debt Securities [Member] | Parent Company [Member] | ||
Fixed maturity securities, amortized cost | 40,200 | 83,300 |
Equity Securities [Member] | ||
Fixed maturity securities, amortized cost | 137,500 | 97,800 |
Equity Securities [Member] | Parent Company [Member] | ||
Fixed maturity securities, amortized cost | $ 46,800 | $ 48,600 |
Schedule II. Condensed Financ83
Schedule II. Condensed Financial Information of Registrant (Condensed Statements of Income) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues | |||||||||||
Net investment income | $ 72,200 | $ 72,400 | $ 70,800 | ||||||||
Realized gains on investments | $ (15,800) | $ 2,000 | $ 1,900 | $ 1,200 | $ 2,000 | $ 1,800 | $ 9,200 | $ 3,300 | (10,700) | 16,300 | 9,500 |
Total revenues | 752,100 | 773,500 | 723,500 | ||||||||
Expenses | |||||||||||
Interest expense | 2,700 | 3,000 | 3,200 | ||||||||
Total expenses | 652,700 | 666,900 | 670,400 | ||||||||
Income tax expense (benefit) | (9,100) | 5,900 | 4,100 | 4,100 | 1,300 | 1,300 | 2,000 | 1,300 | 5,000 | 5,900 | (10,700) |
Net income | $ 26,700 | $ 24,500 | $ 29,200 | $ 14,000 | $ 29,100 | $ 15,200 | $ 45,600 | $ 10,800 | $ 94,400 | $ 100,700 | $ 63,800 |
Earnings per common share for the stated periods (Note 18): | |||||||||||
Basic | $ 0.83 | $ 0.76 | $ 0.91 | $ 0.44 | $ 0.92 | $ 0.48 | $ 1.45 | $ 0.34 | $ 2.94 | $ 3.19 | $ 2.05 |
Diluted | $ 0.82 | $ 0.75 | $ 0.90 | $ 0.43 | $ 0.91 | $ 0.47 | $ 1.42 | $ 0.34 | 2.90 | 3.14 | 2 |
Cash dividends declared per common share | $ 0.24 | $ 0.24 | $ 0.24 | ||||||||
Parent Company [Member] | |||||||||||
Revenues | |||||||||||
Net investment income | $ 4,000 | $ 5,200 | $ 6,000 | ||||||||
Realized gains on investments | 2,400 | 5,800 | 4,300 | ||||||||
Total revenues | 6,400 | 11,000 | 10,300 | ||||||||
Expenses | |||||||||||
Other operating expenses | 13,800 | 13,500 | 12,000 | ||||||||
Interest expense | 1,100 | 1,400 | 1,600 | ||||||||
Total expenses | 14,900 | 14,900 | 13,600 | ||||||||
Income (loss) before income taxes and equity in earnings of subsidiaries | (8,500) | (3,900) | (3,300) | ||||||||
Income tax expense (benefit) | (3,300) | (2,600) | (1,500) | ||||||||
Net income (loss) before equity in earnings of subsidiaries | (5,200) | (1,300) | (1,800) | ||||||||
Equity in net income of subsidiaries | 99,600 | 102,000 | 65,600 | ||||||||
Net income | $ 94,400 | $ 100,700 | $ 63,800 | ||||||||
Earnings per common share for the stated periods (Note 18): | |||||||||||
Basic | $ 2.94 | $ 3.19 | $ 2.05 | ||||||||
Diluted | $ 2.90 | $ 3.14 | $ 2 |
Schedule II. Condensed Financ84
Schedule II. Condensed Financial Information of Registrant (Condensed Statements of Cash Flows) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating activities | |||||||||||
Net income | $ 26,700 | $ 24,500 | $ 29,200 | $ 14,000 | $ 29,100 | $ 15,200 | $ 45,600 | $ 10,800 | $ 94,400 | $ 100,700 | $ 63,800 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||||||
Amortization expense | 8,300 | 7,000 | 6,100 | ||||||||
Realized gains on investments | 10,700 | (16,300) | (9,500) | ||||||||
Stock-based compensation | 4,600 | 6,000 | 5,600 | ||||||||
Excess Tax Benefit from Share-based Compensation, Operating Activities | 1,200 | 1,200 | 0 | ||||||||
Amortization of premium on investments, net | 12,800 | 10,600 | 9,000 | ||||||||
Deferred income tax expense | (5,600) | (500) | (10,800) | ||||||||
Change in operating assets and liabilities: | |||||||||||
Accounts payable, accrued expenses and other liabilities | 8,600 | 12,800 | 1,800 | ||||||||
Federal income taxes | (3,900) | 6,500 | (3,700) | ||||||||
Other | (7,000) | (10,500) | (2,400) | ||||||||
Net cash provided by operating activities | 116,400 | 171,900 | 166,500 | ||||||||
Investing activities | |||||||||||
Purchase of fixed maturity securities | (476,900) | (378,000) | (514,200) | ||||||||
Purchase of equity securities | (85,100) | (29,500) | (30,500) | ||||||||
Proceeds from sale of fixed maturity securities | 105,400 | 47,900 | 52,500 | ||||||||
Proceeds from maturities and redemptions of investments | 323,900 | 251,100 | 206,800 | ||||||||
Proceeds from sale of equity securities | 34,700 | 36,500 | 30,700 | ||||||||
Capital Contributions to subsidiary | 0 | 0 | (44,000) | ||||||||
Restricted cash used in investing activities | 8,300 | (4,200) | (1,200) | ||||||||
Net cash provided by investing activities | (101,200) | (86,700) | (260,100) | ||||||||
Financing activities | |||||||||||
Cash transactions related to stock-based compensation | 4,800 | 1,600 | 6,500 | ||||||||
Dividends paid to stockholders | (7,700) | (7,600) | (7,500) | ||||||||
Payments on notes payable and capital leases | (60,500) | (11,300) | (11,600) | ||||||||
Excess tax benefits from stock-based compensation | 1,200 | 1,200 | 0 | ||||||||
Net cash used in financing activities | (62,200) | (16,100) | (12,600) | ||||||||
Net increase (decrease) in cash and cash equivalents | (47,000) | 69,100 | (106,200) | ||||||||
Cash and cash equivalents at the beginning of the period | 103,600 | 34,500 | 103,600 | 34,500 | 140,700 | ||||||
Cash and cash equivalents at the end of the period | 56,600 | 103,600 | 56,600 | 103,600 | 34,500 | ||||||
Parent Company [Member] | |||||||||||
Operating activities | |||||||||||
Net income | 94,400 | 100,700 | 63,800 | ||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||||||
Equity in net income of subsidiaries | 99,600 | 102,000 | 65,600 | ||||||||
Realized gains on investments | (2,400) | (5,800) | (4,300) | ||||||||
Stock-based compensation | 4,600 | 6,000 | 5,600 | ||||||||
Excess Tax Benefit from Share-based Compensation, Operating Activities | (1,200) | (1,200) | 0 | ||||||||
Amortization of premium on investments, net | 900 | 1,000 | 1,300 | ||||||||
Deferred income tax expense | (4,600) | (2,300) | (500) | ||||||||
Change in operating assets and liabilities: | |||||||||||
Accounts payable, accrued expenses and other liabilities | 1,700 | 1,200 | (1,700) | ||||||||
Federal income taxes | 4,900 | 800 | (1,800) | ||||||||
Other assets | (400) | (900) | (200) | ||||||||
Intercompany payable/receivable | 100 | (1,400) | 5,600 | ||||||||
Other | (1,200) | (1,000) | 0 | ||||||||
Net cash provided by operating activities | 400 | (1,100) | 2,600 | ||||||||
Investing activities | |||||||||||
Purchase of fixed maturity securities | (21,600) | (12,000) | (29,500) | ||||||||
Purchase of equity securities | (19,000) | (20,700) | (23,600) | ||||||||
Proceeds from sale of fixed maturity securities | 18,300 | 4,100 | 35,500 | ||||||||
Proceeds from maturities and redemptions of investments | 45,500 | 32,600 | 17,600 | ||||||||
Proceeds from sale of equity securities | 24,000 | 20,600 | 15,500 | ||||||||
Cash dividends received from subsidiaries | 0 | 0 | 3,600 | ||||||||
Restricted cash used in investing activities | 4,600 | (4,100) | (400) | ||||||||
Net cash provided by investing activities | 51,800 | 20,500 | (25,300) | ||||||||
Financing activities | |||||||||||
Cash transactions related to stock-based compensation | 4,800 | 1,500 | 6,500 | ||||||||
Dividends paid to stockholders | (7,700) | (7,600) | (7,500) | ||||||||
Payments on notes payable and capital leases | (60,000) | (10,000) | (10,000) | ||||||||
Excess tax benefits from stock-based compensation | 1,200 | 1,200 | 0 | ||||||||
Net cash used in financing activities | (61,700) | (14,900) | (11,000) | ||||||||
Net increase (decrease) in cash and cash equivalents | (9,500) | 4,500 | (33,700) | ||||||||
Cash and cash equivalents at the beginning of the period | $ 10,900 | $ 6,400 | 10,900 | 6,400 | 40,100 | ||||||
Cash and cash equivalents at the end of the period | $ 1,400 | $ 10,900 | $ 1,400 | $ 10,900 | $ 6,400 |
Schedule II. Condensed Financ85
Schedule II. Condensed Financial Information of Registrant (Notes to Condensed Financial Statements) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||
Mar. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||||||
Payments on notes payable | $ 60,500 | $ 11,300 | $ 11,600 | |||||
Amortized Cost | ||||||||
Due in one year or less, amortized cost | 113,600 | |||||||
Due after one year through five years, amortized cost | 859,300 | |||||||
Due after five years through ten years, amortized cost | 636,900 | |||||||
Due after ten years, amortized cost | 252,400 | |||||||
Mortgage and asset-backed securities, amortized cost | 358,900 | |||||||
Total, amortized cost | 2,221,100 | |||||||
Estimated Fair Value | ||||||||
Due in one year or less, fair value | 115,100 | |||||||
Due after one year through five years, fair value | 884,500 | |||||||
Due after five years through ten years, fair value | 657,100 | |||||||
Due after ten years, fair value | 267,700 | |||||||
Mortgage and asset-backed securities, fair value | 364,100 | |||||||
Total, fair value | 2,288,500 | 2,275,700 | ||||||
Change in net unrealized gains on investments, net of taxes | (23,300) | 16,500 | (39,100) | |||||
Cash paid for interest | 2,800 | 3,000 | $ 3,300 | |||||
Line of credit facility, decrease, repayments | 60,000 | |||||||
Investments | 2,487,200 | $ 2,448,400 | ||||||
Parent Company [Member] | ||||||||
Amortized Cost | ||||||||
Due in one year or less, amortized cost | 14,600 | |||||||
Due after one year through five years, amortized cost | 15,600 | |||||||
Due after five years through ten years, amortized cost | 3,300 | |||||||
Due after ten years, amortized cost | 6,700 | |||||||
Total, amortized cost | 40,200 | |||||||
Estimated Fair Value | ||||||||
Due in one year or less, fair value | 14,900 | |||||||
Due after one year through five years, fair value | 16,100 | |||||||
Due after five years through ten years, fair value | 3,700 | |||||||
Due after ten years, fair value | 7,500 | |||||||
Total, fair value | $ 42,200 | |||||||
Change in net unrealized gains on investments, net of taxes | $ 2,000 | |||||||
Employee Stock Option [Member] | ||||||||
Estimated Fair Value | ||||||||
Number of options or share units, granted | 80,800 | 141,744 | 162,800 | |||||
Number of outstanding options or share units | 1,121,545 | 1,521,290 | 1,546,898 | 1,830,772 | ||||
Restricted stock units (RSUs) | ||||||||
Estimated Fair Value | ||||||||
Number of options or share units, granted | 112,048 | 87,396 | 84,215 | |||||
Number of outstanding options or share units | 319,033 | 306,867 | 358,346 | 406,262 | ||||
Performance shares units [Member] | ||||||||
Estimated Fair Value | ||||||||
Number of outstanding options or share units | 110,000 | [1] | 125,340 | [2] | 147,440 | [2] | ||
Line of Credit [Member] | ||||||||
Estimated Fair Value | ||||||||
Cash paid for interest | $ 1,300 | $ 1,400 | $ 1,600 | |||||
Line of Credit [Member] | Parent Company [Member] | ||||||||
Estimated Fair Value | ||||||||
Cash paid for interest | $ 1,300 | $ 1,400 | $ 1,600 | |||||
[1] | The PSUs awarded in March 2015 were awarded to certain officers of the Company and have a performance period of two years followed by an additional one year vesting period. The PSU awards are subject to certain performance goals with payouts that range from 0% to 200% of the target awards. The value shown in the table represents the aggregate number of PSUs awarded at the target level. | |||||||
[2] | The PSUs granted in 2013 and 2014 have a performance period of three years and are subject to certain performance goals, based on the Company's statutory combined ratio, with payouts that range from 0% to 200% of the target awards. The ultimate payout of the PSUs awarded in 2013 was 0% of the target award. |
Schedule VI. Supplemental Inf86
Schedule VI. Supplemental Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Supplemental Information for Property, Casualty Insurance Underwriters [Abstract] | |||||||||||||
Deferred policy acquisition costs | $ 44,300 | $ 44,600 | $ 44,300 | $ 44,600 | $ 43,500 | ||||||||
Unpaid losses and loss adjustment expenses | 2,347,500 | 2,369,700 | 2,347,500 | 2,369,700 | 2,330,500 | $ 2,231,500 | |||||||
Unearned premiums | 308,900 | 310,800 | 308,900 | 310,800 | 304,000 | ||||||||
Net premiums earned | $ 181,800 | $ 179,000 | $ 170,600 | $ 159,000 | $ 172,600 | $ 172,100 | $ 172,600 | $ 167,200 | 690,400 | 684,500 | 642,300 | ||
Net investment income | 72,200 | 72,400 | 70,800 | ||||||||||
Current year | 456,900 | 503,800 | 494,500 | ||||||||||
Supplemental Information For Property Casualty Insurance Underwriters Prior Year Claims And Claims Adjustment Expense Including LPT Amortization and Adj | (27,600) | (50,500) | (31,000) | ||||||||||
Deferred policy acquisition cost, amortization expense | 103,900 | 102,700 | 96,900 | ||||||||||
Payments For Losses And Loss Adjustment Expense Including LPT Amortization and Adj | 410,200 | 340,600 | 302,300 | ||||||||||
Premiums written, net | $ 678,500 | $ 689,300 | $ 687,600 | $ 678,500 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Subsequent Events [Abstract] | |
Stock Repurchase Program, Authorized Amount | $ 50 |
Stock Repurchase Program Expiration Date | Feb. 22, 2018 |