Document & Entity Information
Document & Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 10, 2017 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,017 | |
Trading Symbol | UIHC | |
Registrant Name | United Insurance Holdings Corp. | |
Central Index Key | 1,401,521 | |
Current Fiscal Year End Date | --12-31 | |
Filer Category | Accelerated Filer | |
Common Stock, Shares, Outstanding | 42,747,963 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Investments available for sale, at fair value: | ||
Total investments | $ 541,106 | $ 528,647 |
Cash and Cash Equivalents | 124,219 | 150,688 |
Accrued Investment Income | 3,645 | 3,735 |
Property and equipment, net | 17,453 | 17,860 |
Premiums receivable, net | 37,674 | 38,883 |
Reinsurance recoverable on paid and unpaid losses | 35,788 | 24,028 |
Prepaid reinsurance premiums | 92,745 | 132,564 |
Goodwill | 14,254 | 14,254 |
Deferred policy acquisition costs | 63,806 | 65,473 |
Other assets | 20,195 | 23,554 |
Total Assets | 950,885 | 999,686 |
Liabilities | ||
Unpaid losses and loss adjustment expenses | 141,102 | 140,855 |
Unearned Premiums | 359,000 | 372,223 |
Reinsurance Payable | 56,960 | 99,891 |
Other Liabilities | 92,894 | 91,215 |
Notes Payable | 53,822 | 54,175 |
Total Liabilities | 703,778 | 758,359 |
Commitments and Contingencies | ||
Stockholders' Equity | ||
Preferred Stock, $0.0001 par value; 1,000,000 shares authorized, none issued or outstanding | 0 | 0 |
Common Stock, $0.0001 par value; 50,000,000 shares authorized; 21,938,691 and 21,858,697 issued; 21,726,608 and 21,646,614 outstanding for 2017 and 2016, respectively | 2 | 2 |
Additional Paid in Capital | 99,995 | 99,353 |
Treasury shares, at cost; 212,083 shares | (431) | (431) |
Accumulated Other Comprehensive Income (Loss), Net of Tax | 3,362 | 822 |
Retained Earnings | 144,179 | 141,581 |
Total Stockholders' Equity | 247,107 | 241,327 |
Total Liabilities and Stockholders' Equity | 950,885 | 999,686 |
Fixed Maturities | ||
Investments available for sale, at fair value: | ||
Fixed maturities (amortized cost of $496,869 and $497,616) | 496,124 | 494,516 |
Equity Securities | ||
Investments available for sale, at fair value: | ||
Equity securities (amortized cost of $24,073 and $24,074) | 30,039 | 28,398 |
Other Long-term Investments | ||
Investments available for sale, at fair value: | ||
Other investments (amortized cost of $14,618 and $5,493) | $ 14,943 | $ 5,733 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized shares | 1,000,000 | 1,000,000 |
Preferred stock, issued shares | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, authorized shares | 50,000,000 | 50,000,000 |
Common stock, issued shares | 21,938,691 | 21,858,697 |
Common stock, outstanding shares | 21,726,608 | 21,646,614 |
Treasury stock | 212,083 | 212,083 |
Schedule of Available-for-sale Securities | ||
Other investments, cost | $ 535,560 | $ 527,183 |
Fixed Maturities | ||
Schedule of Available-for-sale Securities | ||
Fixed maturities, cost | 496,869 | 497,616 |
Equity Securities | ||
Schedule of Available-for-sale Securities | ||
Equity securities, cost | 24,073 | 24,074 |
Other Long-term Investments | ||
Schedule of Available-for-sale Securities | ||
Other investments, cost | $ 14,618 | $ 5,493 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
REVENUE: | ||
Gross premiums written | $ 168,842 | $ 135,956 |
Decrease in gross unearned premiums | 13,223 | 10,546 |
Gross premiums earned | 182,065 | 146,502 |
Ceded premiums earned | (74,882) | (45,132) |
Net premiums earned | 107,183 | 101,370 |
Investment income | 2,951 | 2,396 |
Net realized gains (losses) | (351) | 270 |
Other revenue | 12,850 | 3,525 |
Total revenue | 122,633 | 107,561 |
EXPENSES: | ||
Losses and loss adjustment expenses | 63,333 | 64,258 |
Policy acquisition costs | 35,436 | 27,032 |
Operating expenses | 5,872 | 3,954 |
General and administrative expenses | 11,333 | 7,933 |
Interest expense | 759 | 75 |
Total expenses | 116,733 | 103,252 |
Income before other income | 5,900 | 4,309 |
Other income | 38 | 21 |
Income before income taxes | 5,938 | 4,330 |
Provision for income taxes | 2,039 | 1,379 |
Net income | 3,899 | 2,951 |
OTHER COMPREHENSIVE INCOME: | ||
Change in net unrealized gains (losses) on investments | 3,731 | 6,380 |
Reclassification adjustment for net realized investment (gains) losses | 351 | (270) |
Income tax benefit (expense) related to items of other comprehensive income | (1,542) | (2,361) |
Total comprehensive income | $ 6,439 | $ 6,700 |
Weighted-average shares outstanding | ||
Weighted-average shares outstanding (in shares) | 21,471,185 | 21,346,701 |
Weighted-average diluted shares (in shares) | 21,688,733 | 21,537,496 |
Earnings Per Share | ||
Basic earnings per share (in usd per share) | $ 0.18 | $ 0.14 |
Diluted earnings per share (in usd per share) | 0.18 | 0.14 |
Dividends declared per share (in usd per share) | $ 0.06 | $ 0.05 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
OPERATING ACTIVITIES | ||
Net Income | $ 3,899 | $ 2,951 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Depreciation and amortization | 1,997 | 908 |
Bond amortization and accretion | 1,042 | 690 |
Net realized gains | 351 | (270) |
Provision for uncollectable premiums/over and short | 80 | 109 |
Deferred income taxes, net | (2,703) | (1,102) |
Stock based compensation | 642 | 459 |
Changes in operating assets and liabilities: | ||
Accrued investment income | 90 | 150 |
Premiums receivable | 1,129 | 3,039 |
Reinsurance recoverable on paid and unpaid losses | (11,760) | 299 |
Prepaid reinsurance premiums | 39,819 | 36,456 |
Deferred policy acquisition costs, net | 1,667 | 1,357 |
Other assets | 3,166 | 670 |
Unpaid losses and loss adjustment expenses | 247 | 11,654 |
Unearned premiums | (13,223) | (10,546) |
Reinsurance payable | (42,931) | (26,289) |
Other liabilities | 11,557 | 20,325 |
Net cash provided by operating activities | (4,931) | 40,860 |
INVESTING ACTIVITIES | ||
Proceeds from sales and maturities of investments available for sale | 40,710 | 55,351 |
Purchases of investments available for sale | (50,480) | (51,676) |
Cost of property, equipment and capitalized software acquired | (208) | (1,440) |
Net cash used in investing activities | (9,978) | 2,235 |
FINANCING ACTIVITIES | ||
Payments Related to Tax Withholding for Share-based Compensation | 0 | (102) |
Repayments of Long-term Debt | (381) | (294) |
Payments of Dividends | (1,301) | (1,076) |
Proceeds from (Repayments of) Bank Overdrafts | (9,878) | 0 |
Net Cash Provided by (Used in) Financing Activities | (11,560) | (1,472) |
Increase in cash | (26,469) | 41,623 |
Cash and cash equivalents at beginning of period | 150,688 | |
Cash and cash equivalents at end of period | 124,219 | 126,409 |
Supplemental Cash Flows Information | ||
Interest paid | 743 | 72 |
Income taxes paid | $ 814 | $ 200 |
Organization, Consolidation and
Organization, Consolidation and Presentation | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Consolidation and Presentation | ORGANIZATION, CONSOLIDATION AND PRESENTATION (a) Business United Insurance Holdings Corp. (referred to in this document as we, our, us, the Company or UPC Insurance) is a property and casualty insurance holding company that sources, writes, and services residential and commercial property and casualty insurance policies using a network of agents and three wholly owned insurance subsidiaries. Our primary insurance subsidiary is United Property & Casualty Insurance Company (UPC), which was formed in Florida in 1999 and has operated continuously since that time. Our other subsidiaries include United Insurance Management, L.C., the managing general agent that manages substantially all aspects of UPC's business; Skyway Claims Services, LLC (our claims adjusting affiliate) that provides services to our insurance affiliates; and UPC Re (our reinsurance affiliate) that provides a portion of the reinsurance protection purchased by our insurance affiliates. On February 3, 2015, we acquired Family Security Holdings, LLC (FSH) and its two wholly owned subsidiaries, Family Security Insurance Company, Inc. (FSIC) and Family Security Underwriters, LLC, via merger. On April 29, 2016, we acquired Interboro Insurance Company (IIC) via merger. See Note 4 in our Notes to Unaudited Consolidated Financial Statements for additional information regarding these acquisitions. Our primary product is homeowners' insurance, which we currently offer in Connecticut, Florida, Georgia, Hawaii, Louisiana, Massachusetts, New Jersey, New York, North Carolina, Rhode Island, South Carolina, and Texas, under authorization from the insurance regulatory authorities in each state. We are also licensed to write property and casualty insurance in Alabama, Delaware, Maryland, Mississippi, New Hampshire, and Virginia; however, we have not commenced writing in these states. We conduct our operations under one business segment. (b) Consolidation and Presentation We prepare our financial statements in conformity with U.S. generally accepted accounting principles (GAAP). While preparing our consolidated financial statements, we make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements, as well as reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates. Reported amounts that require us to make extensive use of estimates include our reserves for unpaid losses and loss adjustment expenses, reinsurance recoverable, deferred policy acquisition costs, investments and goodwill. Except for the captions on our Unaudited Consolidated Balance Sheets and Unaudited Consolidated Statements of Comprehensive Income, we generally use the term loss(es) to collectively refer to both loss and loss adjustment expenses. We include all of our subsidiaries in our unaudited consolidated financial statements, eliminating all significant intercompany balances and transactions during consolidation. We prepared the accompanying Unaudited Consolidated Balance Sheet as of March 31, 2017 , with the Audited Consolidated Balance Sheet amounts as of December 31, 2016 , presented for comparative purposes, and the related Unaudited Consolidated Statements of Comprehensive Income and Statements of Cash Flows in accordance with the instructions for Form 10-Q and Article 10-01 of Regulation S-X. In compliance with those instructions, we have omitted certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with GAAP, though management believes the disclosures made herein are sufficient to ensure that the information presented is not misleading. Our results of operations and our cash flows as of the end of the interim periods reported herein do not necessarily indicate the results we may experience for the remainder of the year or for any other future period. Management believes our unaudited consolidated interim financial statements include all the normal recurring adjustments necessary to fairly present our Unaudited Consolidated Balance Sheet as of March 31, 2017 , our Unaudited Consolidated Statements of Comprehensive Income and our Unaudited Consolidated Statements of Cash Flows for all periods presented. Our unaudited consolidated interim financial statements and footnotes should be read in conjunction with our consolidated financial statements and footnotes in our Annual Report filed on Form 10-K for the year ended December 31, 2016 . |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | SIGNIFICANT ACCOUNTING POLICIES (a) Changes to significant accounting policies We have made no changes to our significant accounting policies as reported in our 2016 Form 10-K. (b) Fair value assumptions The carrying amounts for the following financial instrument categories approximate their fair values at March 31, 2017 and December 31, 2016 , because of their short-term nature: cash and cash equivalents, accrued investment income, premiums receivable, reinsurance recoverable, reinsurance payable, other assets, and other liabilities. The carrying amount of the notes payable to the Florida State Board of Administration and the Branch Banking & Trust Corporation (BB&T) approximate fair value as the interest rates are variable. The carrying amount of our note payable with Interboro, LLC approximates fair value due to the short-term nature of the loan. (c) Pending Accounting Pronouncements We have evaluated recent accounting pronouncements that have had or may have a significant effect on our financial statements or on our disclosures. In January 2017, The FASB has issued Accounting Standards Update (ASU) No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04). This update simplifies the manner in which an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. ASU 2017-07 is effective for annual periods beginning after December 15, 2019, including interim periods within those annual periods, with early adoption permitted for certain requirements. We do not intend to early adopt and are assessing the impact of adopting this new accounting standard on our consolidated financial statements and related disclosures. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | INVESTMENTS The following table details the difference between cost or adjusted/amortized cost and estimated fair value, by major investment category, at March 31, 2017 and December 31, 2016 : Cost or Adjusted/Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value March 31, 2017 U.S. government and agency securities $ 142,284 $ 204 $ 1,597 $ 140,891 Foreign government 2,028 32 — 2,060 States, municipalities and political subdivisions 154,545 1,205 1,164 154,586 Public utilities 12,243 118 68 12,293 Corporate securities 184,582 1,387 834 185,135 Redeemable preferred stocks 1,187 24 52 1,159 Total fixed maturities 496,869 2,970 3,715 496,124 Public utilities 1,342 227 — 1,569 Other common stocks 19,815 5,893 155 25,553 Non-redeemable preferred stocks 2,916 58 57 2,917 Total equity securities 24,073 6,178 212 30,039 Other long-term investments 14,618 345 20 14,943 Total investments $ 535,560 $ 9,493 $ 3,947 $ 541,106 December 31, 2016 U.S. government and agency securities $ 151,656 $ 189 $ 1,893 $ 149,952 Foreign government 2,031 30 — 2,061 States, municipalities and political subdivisions 170,636 1,027 2,551 169,112 Public utilities 7,687 116 73 7,730 Corporate securities 164,424 1,238 1,126 164,536 Redeemable preferred stocks 1,182 5 62 1,125 Total fixed maturities 497,616 2,605 5,705 494,516 Public utilities 1,343 164 — 1,507 Other common stocks 19,815 4,552 319 24,048 Non-redeemable preferred stocks 2,916 10 83 2,843 Total equity securities 24,074 4,726 402 28,398 Other long-term investments 5,493 267 27 5,733 Total investments $ 527,183 $ 7,598 $ 6,134 $ 528,647 When we sell investments, we calculate the gain or loss realized on the sale by comparing the sales price (fair value) to the cost or adjusted/amortized cost of the security sold. We determine the cost or adjusted/amortized cost of the security sold using the specific-identification method. The following table details our realized gains (losses) by major investment category for the three month periods ended March 31, 2017 and 2016 : 2017 2016 Gains (Losses) Fair Value at Sale Gains (Losses) Fair Value at Sale Three Months Ended March 31, Fixed maturities $ 99 $ 12,586 $ 1,055 $ 25,342 Equity securities — — — — Total realized gains 99 12,586 1,055 25,342 Fixed maturities (450 ) 23,548 (678 ) 9,162 Equity securities — — (107 ) 6,009 Total realized losses (450 ) 23,548 (785 ) 15,171 Net realized investment gains (losses) $ (351 ) $ 36,134 $ 270 $ 40,513 The table below summarizes our fixed maturities at March 31, 2017 by contractual maturity periods. Actual results may differ, as issuers may have the right to call or prepay obligations, with or without penalties, prior to the contractual maturities of those obligations. March 31, 2017 Cost or Amortized Cost Percent of Total Fair Value Percent of Total Due in one year or less $ 44,213 8.9 % $ 44,213 8.9 % Due after one year through five years 267,350 53.8 % 267,187 53.9 % Due after five years through ten years 146,545 29.5 % 146,004 29.4 % Due after ten years 38,761 7.8 % 38,720 7.8 % Total $ 496,869 100.0 % $ 496,124 100.0 % The following table summarizes our net investment income by major investment category: Three Months Ended March 31, 2017 2016 Fixed maturities $ 2,498 $ 2,099 Equity securities 220 263 Cash, cash equivalents and short-term investments 70 17 Other investments 152 13 Other assets 11 4 Investment income 2,951 2,396 Investment expenses (250 ) (74 ) Net investment income $ 2,701 $ 2,322 Portfolio monitoring We have a comprehensive portfolio monitoring process to identify and evaluate each fixed income and equity security whose carrying value may be other-than-temporarily impaired. For each fixed income security in an unrealized loss position, we determine if the loss is temporary or other-than-temporary. If our management decides to sell the security or determines that it is more likely than not that we will be required to sell the security before recovery of the cost or amortized cost basis for reasons such as liquidity needs, contractual or regulatory requirements, then the security's decline in fair value is considered other-than-temporary and is recorded in earnings. If we have not made the decision to sell the fixed income security and it is more likely than not that we will be required to sell the fixed income security before recovery of its amortized cost basis, we evaluate whether we expect the security to receive cash flows sufficient to recover the entire cost or amortized cost basis of the security. We calculate the estimated recovery value by discounting the best estimate of future cash flows at the security's original or current effective rate, as appropriate, and compare this to the cost or amortized cost of the security. If we do not expect to receive cash flows sufficient to recover the entire cost or amortized cost basis of the fixed income security, the credit loss component of the impairment is recorded in earnings, with the remaining amount of the unrealized loss related to other factors recognized in other comprehensive income. For equity securities, we consider various factors, including whether we have the intent and ability to hold the equity security for a period of time sufficient to recover its cost basis. If we lack the intent and ability to hold to recovery, or if we believe the recovery period is extended, the equity security's decline in fair value is considered other-than-temporary and is recorded in earnings. Our portfolio monitoring process includes a quarterly review of all securities to identify instances where the fair value of a security compared to its cost or amortized cost (for fixed income securities) or cost (for equity securities) is below established thresholds. The process also includes the monitoring of other impairment indicators such as ratings, ratings downgrades and payment defaults. The securities identified, in addition to other securities for which we may have a concern, are evaluated for potential other-than-temporary impairment using all reasonably available information relevant to the collectability or recovery of the security. Inherent in our evaluation of other-than-temporary impairment for these fixed income and equity securities are assumptions and estimates about the financial condition and future earnings potential of the issue or issuer. Some of the factors that may be considered in evaluating whether a decline in fair value is other-than-temporary are: (1) the financial condition, near-term and long-term prospects of the issue or issuer, including relevant industry specific market conditions and trends, geographic location and implications of rating agency actions and offering prices; (2) the specific reasons that a security is in an unrealized loss position, including overall market conditions which could affect liquidity; and (3) the length of time and extent to which the fair value has been less than amortized cost or cost. The following table presents an aging of our unrealized investment losses by investment class: Less Than Twelve Months Twelve Months or More Number of Securities* Gross Unrealized Losses Fair Value Number of Securities* Gross Unrealized Losses Fair Value March 31, 2017 U.S. government and agency securities 172 $ 1,535 $ 99,022 11 $ 62 $ 3,085 States, municipalities and political subdivisions 122 1,083 91,937 4 81 5,180 Public utilities 20 68 6,230 — — — Corporate securities 236 813 84,342 1 21 1,024 Redeemable preferred stocks — — — 3 52 307 Total fixed maturities 550 3,499 281,531 19 216 9,596 Other common stocks 7 26 530 11 129 967 Non-redeemable preferred stocks 6 24 854 6 33 484 Total equity securities 13 50 1,384 17 162 1,451 Other long-term investments 1 20 961 — — — Total 564 $ 3,569 $ 283,876 36 $ 378 $ 11,047 December 31, 2016 U.S. government and agency securities 186 $ 1,893 $ 111,216 — $ — $ — States, municipalities and political subdivisions 201 2,551 136,360 — — — Public utilities 8 73 2,222 — — — Corporate securities 215 1,100 88,605 1 26 1,021 Redeemable preferred stocks 7 62 764 — — — Total fixed maturities 617 5,679 339,167 1 26 1,021 Other common stocks 16 140 2,450 17 179 1,732 Non-redeemable preferred stocks 12 52 1,830 7 31 369 Total equity securities 28 192 4,280 24 210 2,101 Other long-term investments 1 27 987 — — — Total 646 $ 5,898 $ 344,434 25 $ 236 $ 3,122 * This amount represents the actual number of discrete securities, not the number of shares of those securities. The numbers are not presented in thousands. During our quarterly evaluations of our securities for impairment, we determined that none of our investments in debt and equity securities or limited partnership investments that reflected an unrealized loss position were other-than-temporarily impaired. The issuers of our debt securities continue to make interest payments on a timely basis. We do not intend to sell nor is it likely that we would be required to sell the debt securities before we recover our amortized cost basis. The near-term prospects of all the issuers of the equity securities we own indicate we could recover our cost basis, and we also do not intend to sell these securities until their value equals or exceeds their cost. The limited partnership continues to make interest payments on a timely basis and we do not intend to sell nor is it likely that we would be required to sell our investment in the partnership before we recover our amortized cost. During the three months ended March 31, 2017 and 2016 , we recorded no other-than-temporary impairment charges. Fair value measurement Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The hierarchy for inputs used in determining fair value maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Assets and liabilities recorded on the Unaudited Consolidated Balance Sheets at fair value are categorized in the fair value hierarchy based on the observability of inputs to the valuation techniques as follows: Level 1: Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that we can access. Level 2: Assets and liabilities whose values are based on the following: (a) Quoted prices for similar assets or liabilities in active markets; (b) Quoted prices for identical or similar assets or liabilities in markets that are not active; or (c) Valuation models whose inputs are observable, directly or indirectly, for substantially the full term of the asset or liability. Level 3: Assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Unobservable inputs reflect our estimates of the assumptions that market participants would use in valuing the assets and liabilities. We estimate the fair value of our investments using the closing prices on the last business day of the reporting period, obtained from active markets such as the NYSE, NASDAQ, and NYSE MKT. For securities for which quoted prices in active markets are unavailable, we use a third-party pricing service that utilizes quoted prices in active markets for similar instruments, benchmark interest rates, broker quotes and other relevant inputs to estimate the fair value of those securities for which quoted prices are unavailable. Our estimates of fair value reflect the interest rate environment that existed as of the close of business on March 31, 2017 and December 31, 2016 . Changes in interest rates subsequent to March 31, 2017 may affect the fair value of our investments. The fair value of our fixed-maturities is initially calculated by a third-party pricing service. Valuation service providers typically obtain data about market transactions and other key valuation model inputs from multiple sources and, through the use of proprietary models, produce valuation information in the form of a single fair value for individual fixed income and other securities for which a fair value has been requested. The inputs used by the valuation service providers include, but are not limited to, market prices from recently completed transactions and transactions of comparable securities, interest rate yield curves, credit spreads, liquidity spreads, currency rates, and other information, as applicable. Credit and liquidity spreads are typically implied from completed transactions and transactions of comparable securities. Valuation service providers also use proprietary discounted cash flow models that are widely accepted in the financial services industry and similar to those used by other market participants to value the same financial information. The valuation models take into account, among other things, market observable information as of the measurement date, as described above, as well as the specific attributes of the security being valued, including its term, interest rate, credit rating, industry sector and, where applicable, collateral quality and other issue or issuer specific information. Executing valuation models effectively requires seasoned professional judgment and experience. For our Level 3 assets, our internal pricing methods are primarily based on models using discounted cash flow methodologies that determine a single best estimate of fair value for individual financial instruments. In addition, our models use a discount rate and internally assigned credit ratings as inputs (which are generally consistent with any external ratings) and those we use to report our holdings by credit rating. Market related inputs used in these fair values, which we believe are representative of inputs other market participants would use to determine fair value of the same instruments include: interest rate yield curves, quoted market prices of comparable securities, credit spreads, and other applicable market data. As a result of the significance of non-market observable inputs, including internally assigned credit ratings as described above, judgment is required in developing these fair values. The fair value of these financial assets may differ from the amount actually received if we were to sell the asset. Moreover, the use of different valuation assumptions may have a material effect on the fair values on the financial assets. Any change in the estimated fair value of our securities would impact the amount of unrealized gain or loss we have recorded, which could change the amount we have recorded for our investments and other comprehensive income on our Unaudited Consolidated Balance Sheet as of March 31, 2017 . The following table presents the fair value of our financial instruments measured on a recurring basis by level at March 31, 2017 and December 31, 2016 : Total Level 1 Level 2 Level 3 March 31, 2017 U.S. government and agency securities $ 140,891 $ — $ 140,891 $ — Foreign government 2,060 — 2,060 — States, municipalities and political subdivisions 154,586 — 154,586 — Public utilities 12,293 — 12,293 — Corporate securities 185,135 — 185,135 — Redeemable preferred stocks 1,159 1,159 — — Total fixed maturities 496,124 1,159 494,965 — Public utilities 1,569 1,569 — — Other common stocks 25,553 25,553 — — Non-redeemable preferred stocks 2,917 2,917 — — Total equity securities 30,039 30,039 — — Other long-term investments 14,943 300 12,977 1,666 Total investments $ 541,106 $ 31,498 $ 507,942 $ 1,666 December 31, 2016 U.S. government and agency securities $ 149,952 $ — $ 149,952 $ — Foreign government 2,061 — 2,061 — States, municipalities and political subdivisions 169,112 — 169,112 — Public utilities 7,730 — 7,730 — Corporate securities 164,536 — 164,536 — Redeemable preferred stocks 1,125 1,125 — — Total fixed maturities 494,516 1,125 493,391 — Public utilities 1,507 1,507 — — Other common stocks 24,048 24,048 — — Non-redeemable preferred stocks 2,843 2,843 — — Total equity securities 28,398 28,398 — — Other long-term investments 5,733 300 3,735 1,698 Total investments $ 528,647 $ 29,823 $ 497,126 $ 1,698 The table below presents the rollforward of our Level 3 investments held at fair value during the three months ended March 31, 2017 : Other Investments December 31, 2016 $ 1,698 Transfers in — Partnership income 4 Return of capital (121 ) Unrealized gains in accumulated other comprehensive income 85 March 31, 2017 $ 1,666 We are responsible for the determination of fair value and the supporting assumptions and methodologies. We gain assurance on the overall reasonableness and consistent application of valuation methodologies and inputs and compliance with accounting standards through the execution of various processes and controls designed to provide assurance that our assets and liabilities are appropriately valued. For fair values received from third parties, our processes are designed to provide assurance that the valuation methodologies and inputs are appropriate and consistently applied, the assumptions are reasonable and consistent with the objective of determining fair value, and the fair values are accurately recorded. At the end of each quarter, we determine whether we need to transfer the fair values of any securities between levels of the fair value hierarchy and, if so, we report the transfer as of the end of the quarter. During the first three months of 2017 , we transferred no investments between levels. We used unobservable inputs to derive our estimated fair value for Level 3 investments, and the unobservable inputs are significant to the overall fair value measurement. For our investments in U.S. government securities that do not have prices in active markets, agency securities, state and municipal governments, and corporate bonds, we obtain the fair values from our investment custodians, which use a third-party valuation service. The valuation service calculates prices for our investments in the aforementioned security types on a month-end basis by using several matrix-pricing methodologies that incorporate inputs from various sources. The model the valuation service uses to price U.S. government securities and securities of states and municipalities incorporates inputs from active market makers and inter-dealer brokers. To price corporate bonds and agency securities, the valuation service calculates non-call yield spreads on all issuers, uses option-adjusted yield spreads to account for any early redemption features, then adds final spreads to the U.S. Treasury curve at 3 p.m. (ET) as of quarter end. Since the inputs the valuation service uses in their calculations are not quoted prices in active markets, but are observable inputs, they represent Level 2 inputs. Other investments We acquired investments in limited partnerships, recorded in the other investments line of our Unaudited Consolidated Balance Sheets, that are currently being accounted for at fair value utilizing a discounted cash flow methodology. The estimated fair value of our investments in the limited partnership interests was $14,643,000 . We have fully funded our investments in DCR Mortgage Partners VI, L.P. (DCR VI), DCR Mortgage Partners VII, L.P. (DCR VII), and RCH Mortgage Fund VI Investors, L.P. (RCH); however, we are still obligated to fund an additional $342,000 , $665,000 and $598,000 for our investments in Kayne Anderson Senior Credit Fund II, L.P. (Kayne), Blackstone Alternative Solutions 2015 Trust (Blackstone), and Green Street Power Partners (Green Tree), respectively. The information presented in the table below is as of March 31, 2017 . Initial Investment Book Value Unrealized Gain Unrealized Loss Fair Value DCR Mortgage Partners VI, L.P. $ 312 $ 360 $ 345 $ — $ 705 RCH Mortgage Fund VI Investors, LP 1,000 981 — 20 961 Total Level 3 limited partnership investments 1,312 1,341 345 20 1,666 Kayne Senior Credit Fund II, L.P. 1,658 1,509 — — 1,509 DCR Mortgage Partners VII, L.P. 2,000 2,010 — — 2,010 Blackstone Alternative Solutions 2015 Trust 335 335 — — 335 Green Street Power Partners 9,123 9,123 — — 9,123 Total Level 2 limited partnership investments 13,116 12,977 — — 12,977 Total limited partnership investments $ 14,428 $ 14,318 $ 345 $ 20 $ 14,643 Other short-term investments 300 300 — — 300 Total other investments $ 14,728 $ 14,618 $ 345 $ 20 $ 14,943 The following table summarizes the quantitative impact that the significant unobservable inputs used to estimate the fair value of our Level 3 investments has on the estimated fair value on our investments shown in the tables above. Due to Kayne, DCR VII, and Blackstone being carried at cost, we have excluded them from the table below. The DCR VI and RCH investments were valued using a duration of 60 months for both periods presented below. Fair Value Valuation Rate Impact Technique Unobservable Input Adjustment March 31, 2017 DCR VI $ (47 ) Discounted cash flow Discount rate based on D&B paydex scale 2.35% RCH $ (341 ) Discounted cash flow Discount rate based on D&B paydex scale 7.35% December 31, 2016 DCR VI $ (56 ) Discounted cash flow Discount rate based on D&B paydex scale 2.35% RCH $ (341 ) Discounted cash flow Discount rate based on D&B paydex scale 7.35% |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | ACQUISITIONS AND MERGERS We account for business acquisitions in accordance with the acquisition method of accounting, which requires, among other things, that most assets acquired, liabilities assumed and earn-out consideration be recognized at their fair values as of the acquisition date. Measurement period adjustments to provisional purchase price allocations are recognized in the period in which they are determined as if they accounting had been completed on the acquisition date. Interboro Insurance Company On April 29, 2016, we completed the acquisition of IIC. The purchase price for IIC consisted of $48,450,000 in cash, $8,550,000 in a note payable and an accrued liability for $3,471,000 paid during July 2016. The acquisition of IIC supports the Company's growth strategy and further strengthens the Company's overall position in the property and casualty insurance market in the state of New York. The operations of IIC are included in our Unautided Consolidated Statements of Comprehensive Income effective April 29, 2016. We have one year from the acquisition date to finalize the allocation of the purchase price of IIC. The fair value of the net liabilities assumed, the intangible assets and the related goodwill are preliminary and may be subject to change upon completing the final valuation assessment. The preliminary purchase price allocation is as follows: Cash and cash equivalents $ 15,554 Investments 66,527 Premium and agents' receivable 3,186 Reinsurance receivable 1,042 Intangible assets 5,877 Insurance contract asset 8,334 Goodwill 10,841 Other assets 3,980 Unpaid losses and loss adjustment expenses (24,967 ) Unearned premiums (26,243 ) Advanced premiums (1,472 ) Deferred taxes (109 ) Other liabilities (2,079 ) Total purchase price $ 60,471 The unaudited pro forma financial information below has been prepared as if the IIC acquisition had taken place on January 1, 2016. The unaudited pro forma information is not necessarily indicative of the results that we would have achieved had the transaction taken place on January 1, 2016, and the unaudited pro forma information does not purport to be indicative of future financial operating results. For the Three Months Ended March 31, 2016 Pro Forma As Reported Adjustments Pro Forma Revenues $ 107,561 $ 16,634 $ 124,195 Net income $ 2,951 $ 2,350 $ 5,301 Diluted earnings per share $ 0.14 $ — $ 0.25 American Coastal Insurance Company On April 3, 2017, the Company announced that it had received all necessary regulatory approvals, met all other closing conditions and successfully completed its merger with American Coastal Insurance Company (ACIC). The acquisition was completed through a series of mergers that ultimately resulted in the Company issuing 20,956,355 shares of its common stock, $0.0001 par value per share, as merger consideration to the equity holders of RDX Holding, LLC, a Delaware limited liability company. The unaudited pro forma financial information below has been prepared as if the ACIC merger had taken place on January 1, 2017. The unaudited pro forma financial information is not necessarily indicative of the results that we would have achieved had the transaction taken place on January 1, 2017, and the unaudited pro forma information does not purport to be indicative of future financial operating results. For the Three Months Ended March 31, 2017 Pro Forma As Reported Adjustments Pro Forma Revenues $ 122,633 $ 38,097 $ 160,730 Net income $ 3,899 $ 6,467 $ 10,366 Diluted earnings per share $ 0.18 $ — $ 0.24 |
Earnings per Share
Earnings per Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE Basic earnings per share (EPS) is based on the weighted average number of common shares outstanding for the period, excluding any dilutive common share equivalents. Diluted EPS reflects the potential dilution resulting from vesting of restricted stock awards. The following table shows the computation of basic and diluted EPS for the three month periods ended March 31, 2017 and March 31, 2016 , respectively: Three Months Ended March 31, 2017 2016 Numerator: Net income attributable to common stockholders $ 3,899 $ 2,951 Denominator: Weighted-average shares outstanding 21,471,185 21,346,701 Effect of dilutive securities 217,548 190,795 Weighted-average diluted shares 21,688,733 21,537,496 Basic earnings per share $ 0.18 $ 0.14 Diluted earnings per share $ 0.18 $ 0.14 See Note 16 for additional information on the stock grants related to dilutive securities. |
Property and Equipment, Net
Property and Equipment, Net | 3 Months Ended |
Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | PROPERTY AND EQUIPMENT, NET Property and equipment, net consists of the following: March 31, December 31, Land $ 2,114 $ 2,114 Building and building improvements 5,502 5,502 Computer hardware and software 14,907 14,699 Office furniture and equipment 2,652 2,652 Total, at cost 25,175 24,967 Less: accumulated depreciation and amortization (7,722 ) (7,107 ) Property and equipment, net $ 17,453 $ 17,860 Depreciation and amortization expense under property and equipment was $615,000 and $622,000 for the three months ended March 31, 2017 and 2016 , respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets Disclosure | GOODWILL AND INTANGIBLE ASSETS Goodwill The carrying amount of goodwill, both at March 31, 2017 and December 31, 2016 , was $14,254,000 . There was no goodwill acquired or disposed of during the three months ended March 31, 2017 . Using a qualitative assessment, we completed our most recent goodwill impairment testing during the fourth quarter of 2016 and determined that there was no impairment in the value of the asset as of December 31, 2016 . No impairment loss in the value of goodwill or goodwill amortization expense was recognized during the three months ended March 31, 2017 . Additionally, there was no accumulated impairment or accumulated amortization related to goodwill at March 31, 2017 or December 31, 2016 . Intangible Assets The following is a summary of intangible assets excluding goodwill and value of business acquired (VOBA) recorded as other assets at March 31, 2017 and December 31, 2016 : Weighted-average remaining amortization period (in years) Gross carrying amount Accumulated amortization Net carrying amount March 31, 2017 Amortizing intangible assets Agency agreements acquired 3.5 $ 10,284 $ (3,298 ) $ 6,986 Trade names acquired 1.9 720 (324 ) 396 Non-amortizing intangible assets Licenses acquired 1,185 — 1,185 Total $ 12,189 $ (3,622 ) $ 8,567 December 31, 2016 Amortizing intangible assets Agency agreements acquired 3.8 $ 10,284 $ (2,784 ) $ 7,500 Trade names acquired 2.1 720 (264 ) 456 Non-amortizing intangible assets Licenses acquired 1,185 — 1,185 Total $ 12,189 $ (3,048 ) $ 9,141 No impairment in the value of amortizing or non-amortizing intangible assets was recognized during the three months ended March 31, 2017 . Amortization expense was $1,794,000 for the three months ended March 31, 2017 . Estimated amortization expense to be recognized by the Company over the next five years is as follows: Year ending December 31, Estimated Amortization Expense Remaining 2017 $ 1,799 2018 2,271 2019 2,159 2020 1,071 2021 358 2022 49 |
Reinsurance
Reinsurance | 3 Months Ended |
Mar. 31, 2017 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | REINSURANCE Our reinsurance program is designed, utilizing our risk management methodology, to address our exposure to catastrophes. According to the Insurance Service Office (ISO), a catastrophe loss is defined as a single unpredictable incident or series of closely related incidents that result in $25,000,000 or more in U.S. industry-wide direct insured losses to property and that affect a significant number of policyholders and insurers (ISO catastrophes). In addition to ISO catastrophes, we also include as catastrophes those events (non-ISO catastrophes), which may include losses, that we believe are, or will be, material to our operations, either in amount or in number of claims made. Our program provides reinsurance protection for catastrophes including hurricanes, tropical storms, and tornadoes. These reinsurance agreements are part of our catastrophe management strategy, which is intended to provide our shareholders an acceptable return on the risks assumed in our property business, and to reduce variability of earnings, while providing protection to our policyholders. During the second quarter of 2016, we placed our reinsurance program for the 2016 treaty year beginning June 1, 2016 and ending on May 31, 2017. The agreements incorporate the mandatory coverage required by and placed with the Florida Hurricane Catastrophe Fund (FHCF). The FHCF is a Florida state-sponsored trust fund that provides reimbursement in Florida against storms that the National Hurricane Center designates as hurricanes. The private agreements provide coverage against severe weather events such as hurricanes, tropical storms and tornadoes. For the treaty year beginning June 1, 2016 and ending on May 31, 2017, UPC Insurance has obtained reinsurance protection of $1,515,197,000 excess $10,000,000 providing sufficient protection for a 1-in-100 year hurricane event and a second 1-in-50 year hurricane event in the same year as calculated using a blended model result predominately based on our licensed modeling software, AIR model version 17, using long-term event rates including demand surge. For a single first event hurricane or tropical storm, UPC Insurance will pay, or “retain”, 100% of losses up to $30,000,000 including the $20,000,000 layer funded by UPC Re. The catastrophe excess of loss reinsurance program provides our insurance subsidiaries 100% coverage for all losses in excess of $10,000,000 up to $1,415,197,000 for a first event and $ 1,515,197,000 for any number of subsequent events until all limit is exhausted. For the 2016 contract year, UPC Insurance elected a 45% participation rate with the FHCF and purchased replacement coverage from private reinsurers for the remaining 45% . Of the $ 1,515,197,000 in excess of $10,000,000 , we estimate the mandatory FHCF layer will provide approximately $354,015,000 ( 45% of $786,700,000 ) of aggregate coverage for losses in excess of $246,002,000 . The private market FHCF replacement coverage provides another $346,182,000 of aggregate protection ( 45% of $769,293,000 ) in excess of $244,206,000 layer for Florida only on a fully collateralized basis that also inures to the benefit of all other private reinsurance coverage. In addition to the FHCF and FHCF replacement coverage, we purchased $685,000,000 of aggregate catastrophe reinsurance coverage in excess of $10,000,000 from 55 unaffiliated private reinsurers and catastrophe bond investors who either carry A.M. Best financial strength ratings of A- or higher, or have fully collateralized their maximum potential obligations in dedicated trusts for the benefit of UPC Insurance. Our 2016 agreements with these private reinsurers structure coverage into 5 layers, with a cascading feature such that all layers attach at $10,000,000 . If the aggregate limit of the preceding layer is exhausted, the next layer drops down (cascades) in its place. Additionally, any unused layer protection drops down for subsequent events until exhausted, ensuring there are no potential gaps in coverage up to the $1,415,197,000 first event program exhaustion point. The company also secured up to $100,000,000 of limit that can be utilized at our option for second and subsequent events at an additional cost, but the Company is under no obligation to activate this layer. The total cost of the 2016-17 catastrophe reinsurance program is estimated to be $191,500,000 . Effective December 1, 2016, UPC Insurance, through our wholly owned insurance subsidiary, UPC, entered into a quota share reinsurance agreement (the "quota share agreement") with private reinsurers. Also, effective January 1, 2017, we renewed our aggregate excess of loss reinsurance agreement (the "aggregate excess of loss agreement," and, together with the quota share agreement, the "agreements") with private reinsurers. These agreements provide coverage for in-force, new and renewal business. The quota share agreement provides coverage only for UPC, while the aggregate excess of loss agreement provides coverage for UPC, IIC, and FSIC. These new reinsurance programs are designed to work in conjunction with our catastrophe excess of loss reinsurance program to provide us broad risk transfer protection and to lessen financial volatility. The quota share agreement includes a cession rate of 20% (15% on single year and 5% over a two-year period) for all subject business. The quota share agreement provides coverage for all catastrophe perils (e.g. hurricanes, tropical storms, tropical depressions and earthquakes), other-catastrophe perils (e.g. weather-related perils other than hurricanes, tropical storms, tropical depressions and earthquakes), and attritional losses. For other-catastrophe perils, the quota share agreement provides coverage alongside the aggregate excess of loss program described herein, after our retention has been satisfied. For catastrophe perils, the quota share agreement provides ground-up protection that effectively reduces our retention for catastrophe losses. Quota share agreement reinsurers' participation in paying attritional losses is subject to an attritional loss ratio cap. The aggregate excess of loss agreement provides coverage only for other-catastrophe perils. Under this agreement, for other-catastrophe losses in excess of $1,000,000 but less than $15,000,000, UPC will retain, in the aggregate, 100% of those losses up to $30,000,000. The reinsurers will then be liable for all losses excess of $30,000,000 in the aggregate not to exceed an annual aggregate limit of $30,000,000. This program was placed at 85% rather than 100% because of the quota share agreement reinsurers' participation in paying other-catastrophe losses after the $30,000,000 retention. We amortize our prepaid reinsurance premiums over the annual agreement period, and we record that amortization in ceded premiums earned on our Unaudited Consolidated Statements of Comprehensive Income. The table below summarizes the amounts of our ceded premiums written under the various types of agreements, as well as the amortization of prepaid reinsurance premiums: Three Months Ended March 31, 2017 2016 Excess-of-loss $ (29,599 ) $ (4,057 ) Equipment & identity theft (2,073 ) (1,576 ) Flood (3,391 ) (3,043 ) Ceded premiums written $ (35,063 ) $ (8,676 ) Increase (decrease) in ceded unearned premiums (39,819 ) (36,456 ) Ceded premiums earned $ (74,882 ) $ (45,132 ) Current year catastrophe losses by the event magnitude are shown in the following table for the three months ended March 31, 2017 and 2016 . 2017 2016 Number of Events Incurred Loss and LAE (1) Combined Ratio Impact Number of Events Incurred Loss and LAE (1) Combined Ratio Impact Three Months Ended March 31, Current period catastrophe losses incurred $ 1 million to $5 million (2) 4 $ 9,873 9.2 % 4 $ 11,341 11.2 % Less than $1 million (3) 1 739 0.7 % 6 3,715 3.7 % Total 5 $ 10,612 9.9 % 10 $ 15,056 14.9 % (1) Incurred loss and LAE is equal to losses and LAE paid plus the change in case and incurred but not reported reserves. Shown net of losses ceded to reinsurers. (2) Reflects losses from tornadoes, hail and wind storms in 2017 and from Florida tornadoes and winter storms in 2016. (3) Reflects losses from hail and wind storms in 2017 and 2016. We collected cash recoveries under our reinsurance agreements totaling $2,484,000 and $266,000 for the three month periods ended March 31, 2017 and 2016 , respectively. We write flood insurance under an agreement with the National Flood Insurance Program. We cede 100% of the premiums written and the related risk of loss to the federal government. We earn commissions for the issuance of flood policies based upon a fixed percentage of net written premiums and the processing of flood claims based upon a fixed percentage of incurred losses, and we can earn additional commissions by meeting certain growth targets for the number of in-force policies. We recognized commission revenue from our flood program of $294,000 and $246,000 for the three month periods ended March 31, 2017 and 2016 , respectively. |
Liability for Unpaid Losses and
Liability for Unpaid Losses and Loss Adjustment Expenses Liability for Unpaid Losses and Loss Adjustment Expense | 3 Months Ended |
Mar. 31, 2017 | |
Insurance [Abstract] | |
Short-Duration Insurance and Deposit Contracts | LIABILITY FOR UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSE We determine the reserve for unpaid losses on an individual-case basis for all incidents reported. The liability also includes amounts for IBNR claims as of the balance sheet date. The table below shows the analysis of our reserve for unpaid losses for the three months ended March 31, 2017 and March 31, 2016 on a GAAP basis: March 31, 2017 2016 Balance at January 1 $ 140,855 $ 76,792 Less: reinsurance recoverable on unpaid losses 18,724 2,114 Net balance at January 1 $ 122,131 $ 74,678 Incurred related to: Current year 63,859 61,072 Prior years (526 ) 3,186 Total incurred $ 63,333 $ 64,258 Paid related to: Current year 21,986 23,691 Prior years 42,528 27,710 Total paid $ 64,514 $ 51,401 Net balance at March 31 $ 120,950 $ 87,535 Plus: reinsurance recoverable on unpaid losses 20,152 911 Balance at March 31 $ 141,102 $ 88,446 Composition of reserve for unpaid losses and LAE: Case reserves $ 82,987 $ 53,006 IBNR reserves 58,115 35,440 Balance at March 31 $ 141,102 $ 88,446 Based upon our internal analysis and our review of the statement of actuarial opinion provided by our actuarial consultants, we believe that the reserve for unpaid losses reasonably represents the amount necessary to pay all claims and related expenses which may arise from incidents that have occurred as of the balance sheet date. As reflected by our losses incurred related to prior years, the favorable development experienced in 2017 was primarily the result of losses related to the 2016 and 2015 accident years coming in better than expected. During 2016, we had a reserve deficiency. Since we place substantial reliance on loss-development-based actuarial models when determining our estimate of ultimate losses, the deficiencies resulted from additional development on prior accident years which caused our ultimate losses to increase. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long-term Debt | LONG-TERM DEBT Florida State Board of Administration Note Payable Our long-term debt at March 31, 2017 included a note payable to the Florida State Board of Administration (SBA note). At March 31, 2017 and December 31, 2016 , we owed $10,882,000 and $11,176,000 , respectively, on the note and the interest rate was 2.49% and 1.56% , respectively. During the three months ended March 31, 2017 , we paid $294,000 and $70,000 of principal and interest, respectively. All other terms and conditions of the note remain as described in our 2016 Form 10-K. The SBA note requires UPC to maintain surplus as regards policyholders at or above a calculated level, which was $12,254,000 at March 31, 2017 . Each quarter, we monitor the surplus as regards policyholders for all of our insurance affiliates and, for various reasons, we occasionally provide additional capital to our insurance affiliates. Our SBA note requires that UPC maintain either a 2 :1 ratio of net written premium to surplus, or net writing ratio, or a 6 :1 ratio of gross written premium to surplus, or gross writing ratio, to avoid additional interest penalties. The SBA note agreement defines surplus for the purpose of calculating the required ratios as the $20,000,000 of capital contributed to UPC under the agreement plus the outstanding balance of the note. Should UPC fail to exceed either a net writing ratio of 1.5 :1 or a gross writing ratio of 4.5 :1, UPC's interest rate will increase by 450 basis points above the 10-year Constant Maturity Treasury rate which was 2.40% at the end of March 2017 . Any other writing ratio deficiencies result in an interest rate penalty of 25 basis points above the stated rate of the note, which is 2.49% at the end of March 2017 . Our SBA note further provides that the SBA may, among other things, declare its loan immediately due and payable for all defaults existing under the SBA note; however, any payment is subject to approval by the insurance regulatory authority. At March 31, 2017 , we were in compliance with the covenants as specified in the SBA note. Interboro, LLC Promissory Note Payable On April 29, 2016, we issued an $8,550,000 promissory note to Interboro, LLC, the former parent company of IIC, as part of the purchase price paid to acquire our insurance affiliate. The note will mature in 18 months after the closing of the transaction and bears interest at an annual rate of 6% which is paid in full at maturity. In accordance with the stock purchase agreement, we have the right to reduce the amount of the outstanding principal by the amount of all or part of any loss relating to a claim for indemnification to which we may be entitled under the stock purchase agreement. In the event of default, Interboro, LLC, at its option, may declare the loan immediately due and payable. BB&T Term Note Payable On May 26, 2016, we issued a $5,200,000 , 15 -year term note payable to BB&T (the BB&T note) with the intent to use the funds to purchase, renovate, furnish and equip our home office. The note bears interest at 1.65% in excess of the one month LIBOR. The interest rate resets monthly and was 2.44% at March 31, 2017 . Principal and interest are payable monthly. During the three months ended March 31, 2017 , we paid $87,000 and $30,000 of principal and interest, respectively. At March 31, 2017 and December 31, 2016 , we owed $4,911,000 and $4,998,000 , respectively, on the note. The BB&T note requires that at all times while there has been no "Non-Recurring Losses", UPC Insurance will maintain a minimum Cash Flow Coverage ratio of 1.2 :1. The Cash Flow Coverage ratio is defined as UPC Insurance's cash flow to borrower's debt services. Cash flow is defined as earnings before taxes, plus depreciation and amortization and interest. Debt service is defined as prior year's current maturities of long term debt plus interest expense. This ratio will be tested annually, based on UPC Insurance's audited financial statements. For the annual period only following a "Non-Recurring Loss", UPC Insurance will maintain a minimum Cash Flow Coverage ratio of 1.0 :1. For purposes of both of the foregoing, "Non-Recurring Losses" is defined as losses from our insurance subsidiaries' operations, as determined from time to time in the bank's sole discretion. This covenant will only be effective if the Pre Non-Recurring Losses test is failed, and is only available and effective for one (1) annual test period. Thereafter, the Non-Recurring Loss Cash Flow Coverage Ratio of 1.2 :1 will immediately apply. At the time of the most recent annual test period, December 31, 2016 , we were in compliance with the covenants as specified in the BB&T note. In addition, the BB&T note requires that we establish and maintain with BB&T a noninterest bearing DDA account with a minimum balance of $500,000 , and an interest bearing account with a minimum balance of $1,500,000 , at all times during the term of the loan. In the event of default, BB&T, may among other things, declare its loan immediately due and payable, require us to pledge additional collateral to the bank, and take possession of and foreclose upon our home office which has been pledged to the bank as security for the loan. At March 31, 2017 , we were in compliance with the covenants as specified in the BB&T note. Senior Notes Payable On December 5, 2016, we issued $30,000,000 of senior notes pursuant to an Indenture (the "Indenture") dated as of December 5, 2016, by and between the Company and private investors. During the three months ended March 31, 2017 , we paid $634,000 of interest. The notes bear interest at a floating rate equal to the three month LIBOR plus 5.75% per annum with interest payable quarterly in arrears. The notes will mature 10 years after the issue date, have no scheduled amortization, and may be redeemed at par any time without a pre-payment penalty. The Indenture contains customary event of default provisions. It also contains covenants that, among other things, restrict the Company's ability to incur indebtedness without first providing written notification and receiving approval from the majority of the holders of the notes, limit the Company's ability to create, incur or assume liens other than permitted liens that secure any indebtedness on any asset or property of the Company, require the Company to maintain reinsurance coverage during the life of the notes, and maintain a maximum debt to capital ratio of 20% beginning from December 31, 2017. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES We are involved in claims-related legal actions arising in the ordinary course of business. We accrue amounts resulting from claims-related legal actions in unpaid losses and loss adjustment expenses during the period that we determine an unfavorable outcome becomes probable and we can estimate the amounts. Management makes revisions to our estimates based on its analysis of subsequent information that we receive regarding various factors, including: (i) per claim information; (ii) company and industry historical loss experience; (iii) judicial decisions and legal developments in the awarding of damages, and (iv) trends in general economic conditions, including the effects of inflation. At March 31, 2017 , we were not involved in any material non-claims-related legal actions. See Note 10 for information regarding commitments related to long-term debt, and Note 12 for commitments related to regulatory actions. |
Statutory Accounting and Regula
Statutory Accounting and Regulation | 3 Months Ended |
Mar. 31, 2017 | |
Insurance [Abstract] | |
Statutory and Accounting Regulation | STATUTORY ACCOUNTING AND REGULATION The insurance industry is heavily regulated. State laws and regulations, as well as national regulatory agency requirements, govern the operations of all insurers such as our insurance affiliates. The various laws and regulations require that insurers maintain minimum amounts of statutory surplus and risk-based capital, restrict insurers' ability to pay dividends, specify allowable investment types and investment mixes, and subject insurers to assessments. Our insurance affiliates, UPC, FSIC and IIC are domiciled in Florida, Hawaii and New York, respectively. At March 31, 2017 , and during the three months then ended, our insurance affiliates met all regulatory requirements of the states in which they operate, and they did not incur any material assessments. The National Association of Insurance Commissioners (NAIC) published Risk-Based Capital (RBC) guidelines for insurance companies that are designed to assess capital adequacy and to raise the level of protection that statutory surplus provides for policyholders. Most states, including Florida, Hawaii and New York, have enacted statutory requirements adopting the NAIC RBC guidelines, and insurers having less statutory surplus than required will be subject to varying degrees of regulatory action, depending on the level of capital inadequacy. State insurance regulatory authorities could require an insurer to cease operations in the event the insurer fails to maintain the required statutory capital. The state laws of Florida, Hawaii and New York permit an insurer to pay dividends or make distributions out of that part of statutory surplus derived from net operating profit and net realized capital gains. The state laws further provide calculations to determine the amount of dividends or distributions that can be made without the prior approval of the insurance regulatory authorities in those states and the amount of dividends or distributions that would require prior approval of the insurance regulatory authorities in those states. Statutory RBC requirements may further restrict our insurance affiliates' ability to pay dividends or make distributions if the amount of the intended dividend or distribution would cause statutory surplus to fall below minimum RBC requirements. The SBA note is considered a surplus note pursuant to statutory accounting principles. As a result, UPC is subject to the authority of the Insurance Commissioner of the State of Florida with regard to its ability to repay principal and interest on the surplus note. Any payment of principal or interest requires permission from the insurance regulatory authority. We have reported our insurance affiliates' assets, liabilities and results of operations in accordance with GAAP, which varies from statutory accounting principles prescribed or permitted by state laws and regulations, as well as by general industry practices. The following items are principal differences between statutory accounting and GAAP: • Statutory accounting requires that we exclude certain assets, called non-admitted assets, from the balance sheet. • Statutory accounting requires us to expense policy acquisition costs when incurred, while GAAP allows us to defer to the extent realizable, and amortize policy acquisition costs over the estimated life of the policies. • Statutory accounting requires that surplus notes, also known as surplus debentures, be recorded in statutory surplus, while GAAP requires us to record surplus notes as a liability. • Statutory accounting allows certain investments to be carried at amortized cost or fair value based on the rating received from the Securities Valuation Office of the National Association of Insurance Commissioners, while they are recorded at fair value for GAAP because the investments are held as available for sale. • Statutory accounting allows ceding commission income to be recognized when written if the cost of acquiring and renewing the associated business exceeds the ceding commissions, but under GAAP such income is deferred and recognized over the coverage period. • Statutory accounting requires that unearned premiums and loss reserves are presented net of related reinsurance rather than on a gross basis under GAAP. • Statutory accounting requires that a provision for reinsurance liability be established for reinsurance recoverable on paid losses aged over 90 days and for unsecured amounts recoverable from unauthorized reinsurers. Under GAAP there is no charge for uncollateralized amounts ceded to a company not licensed in the insurance affiliate's domiciliary state and a reserve for uncollectable reinsurance is charged through earnings rather than surplus or equity. • Statutory accounting requires an additional admissibility test and the change in deferred income tax is reported directly in capital and surplus, rather than being reported as a component of income tax expense under GAAP. Our insurance affiliates must file with the various insurance regulatory authorities an “Annual Statement” which reports, among other items, statutory net income (loss) and surplus as regards policyholders, which is called stockholder’s equity under GAAP. For the three month periods ended March 31, 2017 and 2016 , UPC, FSIC and IIC recorded the following amounts of statutory net income (loss). Three Months Ended March 31, 2017 March 31, 2016 UPC $ (6,039 ) $ (1,172 ) FSIC $ 2,937 $ 96 IIC (1) $ 2,079 N/A (1) There is not a reportable value for IIC as of March 31, 2016 as we did not own the company until April 2016. Our insurance affiliates must maintain capital and surplus ratios or balances as determined by the regulatory authority of the states in which they are domiciled. The table below shows the minimum capital and surplus requirements, as well as the amount of surplus as regards policyholders for our regulated entities at March 31, 2017 and December 31, 2016 , respectively. Minimum Requirement March 31, 2017 December 31, 2016 UPC (1) $ 5,000 $ 157,160 $ 155,587 FSIC $ 3,250 $ 20,473 $ 16,269 IIC $ 4,700 $ 43,939 $ 40,442 (1) UPC is required to maintain capital and surplus equal to the greater of 10% of its total liabilities or $5,000,000 . |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS One of our executive officers, Ms. Salmon, is a former partner at the law firm of Groelle & Salmon, PA, where her spouse remains partner and co-owner. Groelle & Salmon, PA provides legal representation to us related to our claims litigation, and also provided representation to us for several years prior to Ms. Salmon joining UPC Insurance. During the three months ended March 31, 2017 and 2016 , Groelle & Salmon, PA billed us approximately $868,000 and $596,000 , respectively. Ms. Salmon's spouse has a 50% interest in these billings, or approximately $434,000 and $298,000 , for the three months ended March 31, 2017 and 2016 , respectively. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 3 Months Ended |
Mar. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income | ACCUMULATED OTHER COMPREHENSIVE INCOME We report changes in other comprehensive income items within comprehensive income on the Unaudited Consolidated Statements of Comprehensive Income, and we include accumulated other comprehensive income as a component of stockholders' equity on our Consolidated Balance Sheets. The table below details the components of accumulated other comprehensive income at period end: Pre-Tax Amount Tax (Expense)Benefit Net-of-Tax Amount December 31, 2016 $ 1,464 $ (642 ) $ 822 Changes in net unrealized gains on investments 3,731 (1,406 ) 2,325 Reclassification adjustment for realized losses 351 (136 ) 215 March 31, 2017 $ 5,546 $ (2,184 ) $ 3,362 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | STOCKHOLDERS' EQUITY Our Board declared dividends on our outstanding shares of common stock to stockholders of record as follows for the periods presented (in thousands except per share amounts): Three Months Ended March 31, 2017 2016 Per Share Amount Aggregate Amount Per Share Amount Aggregate Amount First Quarter $ 0.06 $ 1,301 $ 0.05 $ 1,076 We are authorized to issue 875,000 shares of "blank check" preferred stock, which may be issued from time to time in one or more series upon authorization by our Board of Directors. Our Board, without further approval of the stockholders, is authorized to fix the designations, powers, including voting powers, preferences and the relative, participating optional or other special rights of the shares of each series and any qualifications, limitations and restrictions thereof. As of March 31, 2017, we had not issued any shares of preferred stock. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | STOCK-BASED COMPENSATION We account for stock-based compensation under the fair value recognition provisions of ASC Topic 718 - Compensation - Stock Compensation . Stock-based compensation cost for restricted stock grants is measured based on the closing fair market value of our common stock on the date of grant. We recognize stock-based compensation cost over the award’s requisite service period on a straight line basis for time-based restricted stock grants. We granted 90,122 shares of restricted common stock during the three month period ended March 31, 2017 , which had weighted-average grant date fair value of $16.04 per share. We granted 46,205 shares of restricted common stock during the three month period ended March 31, 2016 , which had a weighted-average grant date fair value of $17.63 per share. The following table presents certain information related to the activity of our non-vested common stock grants: Number of Restricted Shares Weighted Average Grant Date Fair Value Outstanding as of December 31, 2016 169,642 $ 16.87 Granted 90,122 16.04 Forfeited 10,128 20.15 Vested 28,444 19.79 Outstanding as of March 31, 2017 221,192 $ 16.01 We had approximately $2,177,000 of unrecognized stock compensation expense on March 31, 2017 related to non-vested stock-based compensation granted, that we expect to recognize over the next three years . We recognized $375,000 and $197,000 of stock-based compensation expense during the three months ended March 31, 2017 and March 31, 2016 , respectively. We had approximately $104,000 of unrecognized director stock-based compensation expense at March 31, 2017 related to non-vested director stock-based compensation granted, that we expect to recognize ratably until the 2017 Annual Meeting of Stockholders. We recognized $266,000 and $262,000 of director stock-based compensation expense during the three months ended March 31, 2017 and March 31, 2016 , respectively. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS On May 9, 2017, our Board of Directors declared a $0.06 per share quarterly cash dividend payable on May 30, 2017, to stockholders of record on May 23, 2017. On April 3, 2017, we announced that we had received all necessary regulatory approvals, met all other closing conditions and successfully completed our merger with American Coastal Insurance Company. See Note 4 in our Notes to Unaudited Consolidated Financial Statements for additional information regarding this merger. |
Significant Accounting Polici23
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Fair Value Assumptions | Fair value assumptions The carrying amounts for the following financial instrument categories approximate their fair values at March 31, 2017 and December 31, 2016 , because of their short-term nature: cash and cash equivalents, accrued investment income, premiums receivable, reinsurance recoverable, reinsurance payable, other assets, and other liabilities. The carrying amount of the notes payable to the Florida State Board of Administration and the Branch Banking & Trust Corporation (BB&T) approximate fair value as the interest rates are variable. The carrying amount of our note payable with Interboro, LLC approximates fair value due to the short-term nature of the loan. |
Pending Accounting Pronouncements | Pending Accounting Pronouncements We have evaluated recent accounting pronouncements that have had or may have a significant effect on our financial statements or on our disclosures. In January 2017, The FASB has issued Accounting Standards Update (ASU) No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04). This update simplifies the manner in which an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. ASU 2017-07 is effective for annual periods beginning after December 15, 2019, including interim periods within those annual periods, with early adoption permitted for certain requirements. We do not intend to early adopt and are assessing the impact of adopting this new accounting standard on our consolidated financial statements and related disclosures. |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Available-for-sale Securities Reconciliation | The following table details the difference between cost or adjusted/amortized cost and estimated fair value, by major investment category, at March 31, 2017 and December 31, 2016 : Cost or Adjusted/Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value March 31, 2017 U.S. government and agency securities $ 142,284 $ 204 $ 1,597 $ 140,891 Foreign government 2,028 32 — 2,060 States, municipalities and political subdivisions 154,545 1,205 1,164 154,586 Public utilities 12,243 118 68 12,293 Corporate securities 184,582 1,387 834 185,135 Redeemable preferred stocks 1,187 24 52 1,159 Total fixed maturities 496,869 2,970 3,715 496,124 Public utilities 1,342 227 — 1,569 Other common stocks 19,815 5,893 155 25,553 Non-redeemable preferred stocks 2,916 58 57 2,917 Total equity securities 24,073 6,178 212 30,039 Other long-term investments 14,618 345 20 14,943 Total investments $ 535,560 $ 9,493 $ 3,947 $ 541,106 December 31, 2016 U.S. government and agency securities $ 151,656 $ 189 $ 1,893 $ 149,952 Foreign government 2,031 30 — 2,061 States, municipalities and political subdivisions 170,636 1,027 2,551 169,112 Public utilities 7,687 116 73 7,730 Corporate securities 164,424 1,238 1,126 164,536 Redeemable preferred stocks 1,182 5 62 1,125 Total fixed maturities 497,616 2,605 5,705 494,516 Public utilities 1,343 164 — 1,507 Other common stocks 19,815 4,552 319 24,048 Non-redeemable preferred stocks 2,916 10 83 2,843 Total equity securities 24,074 4,726 402 28,398 Other long-term investments 5,493 267 27 5,733 Total investments $ 527,183 $ 7,598 $ 6,134 $ 528,647 |
Schedule of Realized Gain (Loss) | The following table details our realized gains (losses) by major investment category for the three month periods ended March 31, 2017 and 2016 : 2017 2016 Gains (Losses) Fair Value at Sale Gains (Losses) Fair Value at Sale Three Months Ended March 31, Fixed maturities $ 99 $ 12,586 $ 1,055 $ 25,342 Equity securities — — — — Total realized gains 99 12,586 1,055 25,342 Fixed maturities (450 ) 23,548 (678 ) 9,162 Equity securities — — (107 ) 6,009 Total realized losses (450 ) 23,548 (785 ) 15,171 Net realized investment gains (losses) $ (351 ) $ 36,134 $ 270 $ 40,513 |
Investments Classified by Contractual Maturity Date | The table below summarizes our fixed maturities at March 31, 2017 by contractual maturity periods. Actual results may differ, as issuers may have the right to call or prepay obligations, with or without penalties, prior to the contractual maturities of those obligations. March 31, 2017 Cost or Amortized Cost Percent of Total Fair Value Percent of Total Due in one year or less $ 44,213 8.9 % $ 44,213 8.9 % Due after one year through five years 267,350 53.8 % 267,187 53.9 % Due after five years through ten years 146,545 29.5 % 146,004 29.4 % Due after ten years 38,761 7.8 % 38,720 7.8 % Total $ 496,869 100.0 % $ 496,124 100.0 % |
Investment Income | The following table summarizes our net investment income by major investment category: Three Months Ended March 31, 2017 2016 Fixed maturities $ 2,498 $ 2,099 Equity securities 220 263 Cash, cash equivalents and short-term investments 70 17 Other investments 152 13 Other assets 11 4 Investment income 2,951 2,396 Investment expenses (250 ) (74 ) Net investment income $ 2,701 $ 2,322 |
Schedule of Unrealized Loss on Investments | The following table presents an aging of our unrealized investment losses by investment class: Less Than Twelve Months Twelve Months or More Number of Securities* Gross Unrealized Losses Fair Value Number of Securities* Gross Unrealized Losses Fair Value March 31, 2017 U.S. government and agency securities 172 $ 1,535 $ 99,022 11 $ 62 $ 3,085 States, municipalities and political subdivisions 122 1,083 91,937 4 81 5,180 Public utilities 20 68 6,230 — — — Corporate securities 236 813 84,342 1 21 1,024 Redeemable preferred stocks — — — 3 52 307 Total fixed maturities 550 3,499 281,531 19 216 9,596 Other common stocks 7 26 530 11 129 967 Non-redeemable preferred stocks 6 24 854 6 33 484 Total equity securities 13 50 1,384 17 162 1,451 Other long-term investments 1 20 961 — — — Total 564 $ 3,569 $ 283,876 36 $ 378 $ 11,047 December 31, 2016 U.S. government and agency securities 186 $ 1,893 $ 111,216 — $ — $ — States, municipalities and political subdivisions 201 2,551 136,360 — — — Public utilities 8 73 2,222 — — — Corporate securities 215 1,100 88,605 1 26 1,021 Redeemable preferred stocks 7 62 764 — — — Total fixed maturities 617 5,679 339,167 1 26 1,021 Other common stocks 16 140 2,450 17 179 1,732 Non-redeemable preferred stocks 12 52 1,830 7 31 369 Total equity securities 28 192 4,280 24 210 2,101 Other long-term investments 1 27 987 — — — Total 646 $ 5,898 $ 344,434 25 $ 236 $ 3,122 * This amount represents the actual number of discrete securities, not the number of shares of those securities. The numbers are not presented in thousands. |
Schedule of Fair Value of Financial Instruments Measured on a Recurring Basis | The following table presents the fair value of our financial instruments measured on a recurring basis by level at March 31, 2017 and December 31, 2016 : Total Level 1 Level 2 Level 3 March 31, 2017 U.S. government and agency securities $ 140,891 $ — $ 140,891 $ — Foreign government 2,060 — 2,060 — States, municipalities and political subdivisions 154,586 — 154,586 — Public utilities 12,293 — 12,293 — Corporate securities 185,135 — 185,135 — Redeemable preferred stocks 1,159 1,159 — — Total fixed maturities 496,124 1,159 494,965 — Public utilities 1,569 1,569 — — Other common stocks 25,553 25,553 — — Non-redeemable preferred stocks 2,917 2,917 — — Total equity securities 30,039 30,039 — — Other long-term investments 14,943 300 12,977 1,666 Total investments $ 541,106 $ 31,498 $ 507,942 $ 1,666 December 31, 2016 U.S. government and agency securities $ 149,952 $ — $ 149,952 $ — Foreign government 2,061 — 2,061 — States, municipalities and political subdivisions 169,112 — 169,112 — Public utilities 7,730 — 7,730 — Corporate securities 164,536 — 164,536 — Redeemable preferred stocks 1,125 1,125 — — Total fixed maturities 494,516 1,125 493,391 — Public utilities 1,507 1,507 — — Other common stocks 24,048 24,048 — — Non-redeemable preferred stocks 2,843 2,843 — — Total equity securities 28,398 28,398 — — Other long-term investments 5,733 300 3,735 1,698 Total investments $ 528,647 $ 29,823 $ 497,126 $ 1,698 |
Schedule of Fair Value of Financial Instruments with Unobservable Inputs | The table below presents the rollforward of our Level 3 investments held at fair value during the three months ended March 31, 2017 : Other Investments December 31, 2016 $ 1,698 Transfers in — Partnership income 4 Return of capital (121 ) Unrealized gains in accumulated other comprehensive income 85 March 31, 2017 $ 1,666 |
Schedule of Investments in Limited Partnerships | The information presented in the table below is as of March 31, 2017 . Initial Investment Book Value Unrealized Gain Unrealized Loss Fair Value DCR Mortgage Partners VI, L.P. $ 312 $ 360 $ 345 $ — $ 705 RCH Mortgage Fund VI Investors, LP 1,000 981 — 20 961 Total Level 3 limited partnership investments 1,312 1,341 345 20 1,666 Kayne Senior Credit Fund II, L.P. 1,658 1,509 — — 1,509 DCR Mortgage Partners VII, L.P. 2,000 2,010 — — 2,010 Blackstone Alternative Solutions 2015 Trust 335 335 — — 335 Green Street Power Partners 9,123 9,123 — — 9,123 Total Level 2 limited partnership investments 13,116 12,977 — — 12,977 Total limited partnership investments $ 14,428 $ 14,318 $ 345 $ 20 $ 14,643 Other short-term investments 300 300 — — 300 Total other investments $ 14,728 $ 14,618 $ 345 $ 20 $ 14,943 |
Quantitative Impact of Unobservable Inputs | The DCR VI and RCH investments were valued using a duration of 60 months for both periods presented below. Fair Value Valuation Rate Impact Technique Unobservable Input Adjustment March 31, 2017 DCR VI $ (47 ) Discounted cash flow Discount rate based on D&B paydex scale 2.35% RCH $ (341 ) Discounted cash flow Discount rate based on D&B paydex scale 7.35% December 31, 2016 DCR VI $ (56 ) Discounted cash flow Discount rate based on D&B paydex scale 2.35% RCH $ (341 ) Discounted cash flow Discount rate based on D&B paydex scale 7.35% |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
Schedule of Purchase Price Allocation | The preliminary purchase price allocation is as follows: Cash and cash equivalents $ 15,554 Investments 66,527 Premium and agents' receivable 3,186 Reinsurance receivable 1,042 Intangible assets 5,877 Insurance contract asset 8,334 Goodwill 10,841 Other assets 3,980 Unpaid losses and loss adjustment expenses (24,967 ) Unearned premiums (26,243 ) Advanced premiums (1,472 ) Deferred taxes (109 ) Other liabilities (2,079 ) Total purchase price $ 60,471 |
Schedule of Pro Forma Information | For the Three Months Ended March 31, 2016 Pro Forma As Reported Adjustments Pro Forma Revenues $ 107,561 $ 16,634 $ 124,195 Net income $ 2,951 $ 2,350 $ 5,301 Diluted earnings per share $ 0.14 $ — $ 0.25 The unaudited pro forma financial information is not necessarily indicative of the results that we would have achieved had the transaction taken place on January 1, 2017, and the unaudited pro forma information does not purport to be indicative of future financial operating results. For the Three Months Ended March 31, 2017 Pro Forma As Reported Adjustments Pro Forma Revenues $ 122,633 $ 38,097 $ 160,730 Net income $ 3,899 $ 6,467 $ 10,366 Diluted earnings per share $ 0.18 $ — $ 0.24 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | The following table shows the computation of basic and diluted EPS for the three month periods ended March 31, 2017 and March 31, 2016 , respectively: Three Months Ended March 31, 2017 2016 Numerator: Net income attributable to common stockholders $ 3,899 $ 2,951 Denominator: Weighted-average shares outstanding 21,471,185 21,346,701 Effect of dilutive securities 217,548 190,795 Weighted-average diluted shares 21,688,733 21,537,496 Basic earnings per share $ 0.18 $ 0.14 Diluted earnings per share $ 0.18 $ 0.14 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment, net consists of the following: March 31, December 31, Land $ 2,114 $ 2,114 Building and building improvements 5,502 5,502 Computer hardware and software 14,907 14,699 Office furniture and equipment 2,652 2,652 Total, at cost 25,175 24,967 Less: accumulated depreciation and amortization (7,722 ) (7,107 ) Property and equipment, net $ 17,453 $ 17,860 |
Goodwill and Intangible Asset28
Goodwill and Intangible Assets Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated amortization expense to be recognized by the Company over the next five years is as follows: Year ending December 31, Estimated Amortization Expense Remaining 2017 $ 1,799 2018 2,271 2019 2,159 2020 1,071 2021 358 2022 49 |
Schedule of Acquired Finite-Lived Intangible Assets by Major Class | The following is a summary of intangible assets excluding goodwill and value of business acquired (VOBA) recorded as other assets at March 31, 2017 and December 31, 2016 : Weighted-average remaining amortization period (in years) Gross carrying amount Accumulated amortization Net carrying amount March 31, 2017 Amortizing intangible assets Agency agreements acquired 3.5 $ 10,284 $ (3,298 ) $ 6,986 Trade names acquired 1.9 720 (324 ) 396 Non-amortizing intangible assets Licenses acquired 1,185 — 1,185 Total $ 12,189 $ (3,622 ) $ 8,567 December 31, 2016 Amortizing intangible assets Agency agreements acquired 3.8 $ 10,284 $ (2,784 ) $ 7,500 Trade names acquired 2.1 720 (264 ) 456 Non-amortizing intangible assets Licenses acquired 1,185 — 1,185 Total $ 12,189 $ (3,048 ) $ 9,141 |
Reinsurance (Tables)
Reinsurance (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Reinsurance Disclosures [Abstract] | |
Schedule of Ceded Premiums Earned by Type | The table below summarizes the amounts of our ceded premiums written under the various types of agreements, as well as the amortization of prepaid reinsurance premiums: Three Months Ended March 31, 2017 2016 Excess-of-loss $ (29,599 ) $ (4,057 ) Equipment & identity theft (2,073 ) (1,576 ) Flood (3,391 ) (3,043 ) Ceded premiums written $ (35,063 ) $ (8,676 ) Increase (decrease) in ceded unearned premiums (39,819 ) (36,456 ) Ceded premiums earned $ (74,882 ) $ (45,132 ) |
Schedule of Catastrophe Losses by Event Magnitude | Current year catastrophe losses by the event magnitude are shown in the following table for the three months ended March 31, 2017 and 2016 . 2017 2016 Number of Events Incurred Loss and LAE (1) Combined Ratio Impact Number of Events Incurred Loss and LAE (1) Combined Ratio Impact Three Months Ended March 31, Current period catastrophe losses incurred $ 1 million to $5 million (2) 4 $ 9,873 9.2 % 4 $ 11,341 11.2 % Less than $1 million (3) 1 739 0.7 % 6 3,715 3.7 % Total 5 $ 10,612 9.9 % 10 $ 15,056 14.9 % (1) Incurred loss and LAE is equal to losses and LAE paid plus the change in case and incurred but not reported reserves. Shown net of losses ceded to reinsurers. (2) Reflects losses from tornadoes, hail and wind storms in 2017 and from Florida tornadoes and winter storms in 2016. (3) Reflects losses from hail and wind storms in 2017 and 2016. |
Liability for Unpaid Losses a30
Liability for Unpaid Losses and Loss Adjustment Expenses Liability for Unpaid Losses and Loss Adjustment Expense (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Insurance [Abstract] | |
Schedule of Liability for Unpaid Claims and Claims Adjustment Expense | The table below shows the analysis of our reserve for unpaid losses for the three months ended March 31, 2017 and March 31, 2016 on a GAAP basis: March 31, 2017 2016 Balance at January 1 $ 140,855 $ 76,792 Less: reinsurance recoverable on unpaid losses 18,724 2,114 Net balance at January 1 $ 122,131 $ 74,678 Incurred related to: Current year 63,859 61,072 Prior years (526 ) 3,186 Total incurred $ 63,333 $ 64,258 Paid related to: Current year 21,986 23,691 Prior years 42,528 27,710 Total paid $ 64,514 $ 51,401 Net balance at March 31 $ 120,950 $ 87,535 Plus: reinsurance recoverable on unpaid losses 20,152 911 Balance at March 31 $ 141,102 $ 88,446 Composition of reserve for unpaid losses and LAE: Case reserves $ 82,987 $ 53,006 IBNR reserves 58,115 35,440 Balance at March 31 $ 141,102 $ 88,446 |
Statutory Accounting and Regu31
Statutory Accounting and Regulation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Insurance [Abstract] | |
Statutory Accounting Practices | The table below shows the minimum capital and surplus requirements, as well as the amount of surplus as regards policyholders for our regulated entities at March 31, 2017 and December 31, 2016 , respectively. Minimum Requirement March 31, 2017 December 31, 2016 UPC (1) $ 5,000 $ 157,160 $ 155,587 FSIC $ 3,250 $ 20,473 $ 16,269 IIC $ 4,700 $ 43,939 $ 40,442 (1) UPC is required to maintain capital and surplus equal to the greater of 10% of its total liabilities or $5,000,000 . For the three month periods ended March 31, 2017 and 2016 , UPC, FSIC and IIC recorded the following amounts of statutory net income (loss). Three Months Ended March 31, 2017 March 31, 2016 UPC $ (6,039 ) $ (1,172 ) FSIC $ 2,937 $ 96 IIC (1) $ 2,079 N/A (1) There is not a reportable value for IIC as of March 31, 2016 as we did not own the company until April 2016. |
Accumulated Other Comprehensi32
Accumulated Other Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The table below details the components of accumulated other comprehensive income at period end: Pre-Tax Amount Tax (Expense)Benefit Net-of-Tax Amount December 31, 2016 $ 1,464 $ (642 ) $ 822 Changes in net unrealized gains on investments 3,731 (1,406 ) 2,325 Reclassification adjustment for realized losses 351 (136 ) 215 March 31, 2017 $ 5,546 $ (2,184 ) $ 3,362 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Dividends Declared | Our Board declared dividends on our outstanding shares of common stock to stockholders of record as follows for the periods presented (in thousands except per share amounts): Three Months Ended March 31, 2017 2016 Per Share Amount Aggregate Amount Per Share Amount Aggregate Amount First Quarter $ 0.06 $ 1,301 $ 0.05 $ 1,076 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Nonvested Share Activity | The following table presents certain information related to the activity of our non-vested common stock grants: Number of Restricted Shares Weighted Average Grant Date Fair Value Outstanding as of December 31, 2016 169,642 $ 16.87 Granted 90,122 16.04 Forfeited 10,128 20.15 Vested 28,444 19.79 Outstanding as of March 31, 2017 221,192 $ 16.01 |
Organization, Consolidation a35
Organization, Consolidation and Presentation (Details) | Feb. 03, 2015subsidiary | Mar. 31, 2017subsidiarysegment |
Number of Wholly-Owned Subsidiaries | ||
Number of Wholly Owned Subsidiaries | 3 | |
Number of Operating Segments | segment | 1 | |
Family Security Holdings | ||
Number of Wholly-Owned Subsidiaries | ||
Number of Wholly Owned Subsidiaries | 2 |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Schedule of Cost-method Investments | ||
Other than temporary impairment losses | $ 0 | $ 0 |
Other Long-term Investments | ||
Schedule of Cost-method Investments | ||
Investment in limited partnership | 14,943 | |
Other Long-term Investments | Limited Partnership | ||
Schedule of Cost-method Investments | ||
Investment in limited partnership | 14,643 | |
Other Long-term Investments | Limited Partnership | Kayne Senior Credit Fund II, L.P. | ||
Schedule of Cost-method Investments | ||
Additional obligation to fund investment | 342 | |
Other Long-term Investments | Limited Partnership | Blackstone Alternative Solutions Trust 2015 | ||
Schedule of Cost-method Investments | ||
Additional obligation to fund investment | 665 | |
Other Long-term Investments | Limited Partnership | Green Street Power Partners | ||
Schedule of Cost-method Investments | ||
Additional obligation to fund investment | 598 | |
Other Long-term Investments | Level 3 | ||
Schedule of Cost-method Investments | ||
Transfers in | 0 | |
Other Long-term Investments | Level 3 | Limited Partnership | ||
Schedule of Cost-method Investments | ||
Investment in limited partnership | $ 1,666 | |
Valuation period for other investments | 60 months |
Investments - Schedule of Avail
Investments - Schedule of Available-for-sale Securities Reconciliation (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities | ||
Other investments, cost | $ 535,560 | $ 527,183 |
Gross unrealized gains | 9,493 | 7,598 |
Gross unrealized loss | 3,947 | 6,134 |
Total investments | 541,106 | 528,647 |
U.S. Government and Agency Securities | ||
Schedule of Available-for-sale Securities | ||
Cost or adjusted/amortized cost | 142,284 | 151,656 |
Gross unrealized gains | 204 | 189 |
Gross unrealized loss | 1,597 | 1,893 |
Fair Value | 140,891 | 149,952 |
Foreign Government | ||
Schedule of Available-for-sale Securities | ||
Cost or adjusted/amortized cost | 2,028 | 2,031 |
Gross unrealized gains | 32 | 30 |
Gross unrealized loss | 0 | 0 |
Fair Value | 2,060 | 2,061 |
States, Municipalities and Political Subdivisions | ||
Schedule of Available-for-sale Securities | ||
Cost or adjusted/amortized cost | 154,545 | 170,636 |
Gross unrealized gains | 1,205 | 1,027 |
Gross unrealized loss | 1,164 | 2,551 |
Fair Value | 154,586 | 169,112 |
Public Utilities | ||
Schedule of Available-for-sale Securities | ||
Cost or adjusted/amortized cost | 12,243 | 7,687 |
Gross unrealized gains | 118 | 116 |
Gross unrealized loss | 68 | 73 |
Fair Value | 12,293 | 7,730 |
Corporate Securities | ||
Schedule of Available-for-sale Securities | ||
Cost or adjusted/amortized cost | 184,582 | 164,424 |
Gross unrealized gains | 1,387 | 1,238 |
Gross unrealized loss | 834 | 1,126 |
Fair Value | 185,135 | 164,536 |
Redeemable Preferred Stocks | ||
Schedule of Available-for-sale Securities | ||
Cost or adjusted/amortized cost | 1,187 | 1,182 |
Gross unrealized gains | 24 | 5 |
Gross unrealized loss | 52 | 62 |
Fair Value | 1,159 | 1,125 |
Fixed Maturities | ||
Schedule of Available-for-sale Securities | ||
Cost or adjusted/amortized cost | 496,869 | 497,616 |
Gross unrealized gains | 2,970 | 2,605 |
Gross unrealized loss | 3,715 | 5,705 |
Fair Value | 496,124 | 494,516 |
Public Utilities | ||
Schedule of Available-for-sale Securities | ||
Cost or adjusted/amortized cost | 1,342 | 1,343 |
Gross unrealized gains | 227 | 164 |
Gross unrealized loss | 0 | 0 |
Fair Value | 1,569 | 1,507 |
Other Common Stock | ||
Schedule of Available-for-sale Securities | ||
Cost or adjusted/amortized cost | 19,815 | 19,815 |
Gross unrealized gains | 5,893 | 4,552 |
Gross unrealized loss | 155 | 319 |
Fair Value | 25,553 | 24,048 |
Nonredeemable Preferred Stocks | ||
Schedule of Available-for-sale Securities | ||
Cost or adjusted/amortized cost | 2,916 | 2,916 |
Gross unrealized gains | 58 | 10 |
Gross unrealized loss | 57 | 83 |
Fair Value | 2,917 | 2,843 |
Equity Securities | ||
Schedule of Available-for-sale Securities | ||
Cost or adjusted/amortized cost | 24,073 | 24,074 |
Gross unrealized gains | 6,178 | 4,726 |
Gross unrealized loss | 212 | 402 |
Fair Value | 30,039 | 28,398 |
Other Long-term Investments | ||
Schedule of Available-for-sale Securities | ||
Other investments, cost | 14,618 | 5,493 |
Gross unrealized gains | 345 | 267 |
Gross unrealized loss | 20 | 27 |
Other Long-term Investments | $ 14,943 | $ 5,733 |
Investments - Schedule of Reali
Investments - Schedule of Realized Gain (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Gains (Losses) | ||
Gross realized gains | $ 99 | $ 1,055 |
Gross realized losses | (450) | (785) |
Net realized gains (losses) | (351) | 270 |
Fair Value at Sale | ||
Fair value at sale | 12,586 | 25,342 |
Fair value at sale | 23,548 | 15,171 |
Net fair value at sale | 36,134 | 40,513 |
Fixed Maturities | ||
Gains (Losses) | ||
Gross realized gains | 99 | 1,055 |
Gross realized losses | (450) | (678) |
Fair Value at Sale | ||
Fair value at sale | 12,586 | 25,342 |
Fair value at sale | 23,548 | 9,162 |
Equity Securities | ||
Gains (Losses) | ||
Gross realized gains | 0 | 0 |
Gross realized losses | 0 | (107) |
Fair Value at Sale | ||
Fair value at sale | 0 | 0 |
Fair value at sale | $ 0 | $ 6,009 |
Investments - Investments Class
Investments - Investments Classified by Contractual Maturity Date (Details) - Fixed Maturities - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Cost or Amortized Cost | ||
Due in one year or less | $ 44,213 | |
Due after one year through five years | 267,350 | |
Due after five years through ten years | 146,545 | |
Due after ten years | 38,761 | |
Cost or adjusted/amortized cost | $ 496,869 | $ 497,616 |
Percent of Total | ||
Due in one year or less | 8.90% | |
Due after one year through five years | 53.80% | |
Due after five years through ten years | 29.50% | |
Due after ten years | 7.80% | |
Total | 100.00% | |
Fair Value | ||
Due in one year or less | $ 44,213 | |
Due after one year through five years | 267,187 | |
Due after five years through ten years | 146,004 | |
Due after ten years | 38,720 | |
Total | $ 496,124 | $ 494,516 |
Percent of Total | ||
Due in one year or less | 8.90% | |
Due after one year through five years | 53.90% | |
Due after five years through ten years | 29.40% | |
Due after ten years | 7.80% | |
Total | 100.00% |
Investments - Investment Income
Investments - Investment Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Net Investment Income | ||
Investment income | $ 2,951 | $ 2,396 |
Investment expenses | (250) | (74) |
Net investment income | 2,701 | 2,322 |
Fixed Maturities | ||
Net Investment Income | ||
Investment income | 2,498 | 2,099 |
Equity Securities | ||
Net Investment Income | ||
Investment income | 220 | 263 |
Cash, Cash Equivalents And Short-Term Investments | ||
Net Investment Income | ||
Investment income | 70 | 17 |
Other Investments | ||
Net Investment Income | ||
Investment income | 152 | 13 |
Other Assets | ||
Net Investment Income | ||
Investment income | $ 11 | $ 4 |
Investments - Schedule of Unrea
Investments - Schedule of Unrealized Loss on Investments (Details) $ in Thousands | Mar. 31, 2017USD ($)security | Dec. 31, 2016USD ($)security |
Less Than Twelve Months | ||
Number of securities | security | 564 | 646 |
Gross unrealized losses | $ 3,569 | $ 5,898 |
Fair value | $ 283,876 | $ 344,434 |
Twelve Months or More | ||
Number of securities | security | 36 | 25 |
Gross unrealized losses | $ 378 | $ 236 |
Fair value | $ 11,047 | $ 3,122 |
U.S. Government and Agency Securities | ||
Less Than Twelve Months | ||
Number of securities | security | 172 | 186 |
Gross unrealized losses | $ 1,535 | $ 1,893 |
Fair value | $ 99,022 | $ 111,216 |
Twelve Months or More | ||
Number of securities | security | 11 | 0 |
Gross unrealized losses | $ 62 | $ 0 |
Fair value | $ 3,085 | $ 0 |
States, Municipalities and Political Subdivisions | ||
Less Than Twelve Months | ||
Number of securities | security | 122 | 201 |
Gross unrealized losses | $ 1,083 | $ 2,551 |
Fair value | $ 91,937 | $ 136,360 |
Twelve Months or More | ||
Number of securities | security | 4 | 0 |
Gross unrealized losses | $ 81 | $ 0 |
Fair value | $ 5,180 | $ 0 |
Public Utilities | ||
Less Than Twelve Months | ||
Number of securities | security | 20 | 8 |
Gross unrealized losses | $ 68 | $ 73 |
Fair value | $ 6,230 | $ 2,222 |
Twelve Months or More | ||
Number of securities | security | 0 | 0 |
Gross unrealized losses | $ 0 | $ 0 |
Fair value | $ 0 | $ 0 |
Corporate Securities | ||
Less Than Twelve Months | ||
Number of securities | security | 236 | 215 |
Gross unrealized losses | $ 813 | $ 1,100 |
Fair value | $ 84,342 | $ 88,605 |
Twelve Months or More | ||
Number of securities | security | 1 | 1 |
Gross unrealized losses | $ 21 | $ 26 |
Fair value | $ 1,024 | $ 1,021 |
Redeemable Preferred Stocks | ||
Less Than Twelve Months | ||
Number of securities | security | 0 | 7 |
Gross unrealized losses | $ 0 | $ 62 |
Fair value | $ 0 | $ 764 |
Twelve Months or More | ||
Number of securities | security | 3 | 0 |
Gross unrealized losses | $ 52 | $ 0 |
Fair value | $ 307 | $ 0 |
Fixed Maturities | ||
Less Than Twelve Months | ||
Number of securities | security | 550 | 617 |
Gross unrealized losses | $ 3,499 | $ 5,679 |
Fair value | $ 281,531 | $ 339,167 |
Twelve Months or More | ||
Number of securities | security | 19 | 1 |
Gross unrealized losses | $ 216 | $ 26 |
Fair value | $ 9,596 | $ 1,021 |
Common Stock | ||
Less Than Twelve Months | ||
Number of securities | security | 7 | 16 |
Gross unrealized losses | $ 26 | $ 140 |
Fair value | $ 530 | $ 2,450 |
Twelve Months or More | ||
Number of securities | security | 11 | 17 |
Gross unrealized losses | $ 129 | $ 179 |
Fair value | $ 967 | $ 1,732 |
Nonredeemable Preferred Stocks | ||
Less Than Twelve Months | ||
Number of securities | security | 6 | 12 |
Gross unrealized losses | $ 24 | $ 52 |
Fair value | $ 854 | $ 1,830 |
Twelve Months or More | ||
Number of securities | security | 6 | 7 |
Gross unrealized losses | $ 33 | $ 31 |
Fair value | $ 484 | $ 369 |
Equity Securities | ||
Less Than Twelve Months | ||
Number of securities | security | 13 | 28 |
Gross unrealized losses | $ 50 | $ 192 |
Fair value | $ 1,384 | $ 4,280 |
Twelve Months or More | ||
Number of securities | security | 17 | 24 |
Gross unrealized losses | $ 162 | $ 210 |
Fair value | $ 1,451 | $ 2,101 |
Other Long-term Investments | ||
Less Than Twelve Months | ||
Number of securities | security | 1 | 1 |
Gross unrealized losses | $ 20 | $ 27 |
Fair value | $ 961 | $ 987 |
Twelve Months or More | ||
Number of securities | security | 0 | 0 |
Gross unrealized losses | $ 0 | $ 0 |
Fair value | $ 0 | $ 0 |
Investments - Schedule of Fair
Investments - Schedule of Fair Value of Financial Instruments Measured on a Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | $ 541,106 | $ 528,647 |
U.S. Government and Agency Securities | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 140,891 | 149,952 |
Foreign Government | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 2,060 | 2,061 |
States, Municipalities and Political Subdivisions | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 154,586 | 169,112 |
Public Utilities | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 12,293 | 7,730 |
Corporate Securities | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 185,135 | 164,536 |
Redeemable Preferred Stocks | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 1,159 | 1,125 |
Fixed Maturities | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 496,124 | 494,516 |
Public Utilities | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 1,569 | 1,507 |
Common Stock | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 25,553 | 24,048 |
Nonredeemable Preferred Stocks | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 2,917 | 2,843 |
Equity Securities | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 30,039 | 28,398 |
Other Long-term Investments | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 14,943 | 5,733 |
Level 1 | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 31,498 | 29,823 |
Level 1 | U.S. Government and Agency Securities | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 0 | 0 |
Level 1 | Foreign Government | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 0 | 0 |
Level 1 | States, Municipalities and Political Subdivisions | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 0 | 0 |
Level 1 | Public Utilities | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 0 | 0 |
Level 1 | Corporate Securities | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 0 | 0 |
Level 1 | Redeemable Preferred Stocks | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 1,159 | 1,125 |
Level 1 | Fixed Maturities | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 1,159 | 1,125 |
Level 1 | Public Utilities | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 1,569 | 1,507 |
Level 1 | Common Stock | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 25,553 | 24,048 |
Level 1 | Nonredeemable Preferred Stocks | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 2,917 | 2,843 |
Level 1 | Equity Securities | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 30,039 | 28,398 |
Level 1 | Other Long-term Investments | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 300 | 300 |
Level 2 | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 507,942 | 497,126 |
Level 2 | U.S. Government and Agency Securities | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 140,891 | 149,952 |
Level 2 | Foreign Government | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 2,060 | 2,061 |
Level 2 | States, Municipalities and Political Subdivisions | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 154,586 | 169,112 |
Level 2 | Public Utilities | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 12,293 | 7,730 |
Level 2 | Corporate Securities | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 185,135 | 164,536 |
Level 2 | Redeemable Preferred Stocks | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 0 | 0 |
Level 2 | Fixed Maturities | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 494,965 | 493,391 |
Level 2 | Public Utilities | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 0 | 0 |
Level 2 | Common Stock | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 0 | 0 |
Level 2 | Nonredeemable Preferred Stocks | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 0 | 0 |
Level 2 | Equity Securities | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 0 | 0 |
Level 2 | Other Long-term Investments | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 12,977 | 3,735 |
Level 3 | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 1,666 | 1,698 |
Level 3 | U.S. Government and Agency Securities | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 0 | 0 |
Level 3 | Foreign Government | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 0 | 0 |
Level 3 | States, Municipalities and Political Subdivisions | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 0 | 0 |
Level 3 | Public Utilities | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 0 | 0 |
Level 3 | Corporate Securities | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 0 | 0 |
Level 3 | Redeemable Preferred Stocks | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 0 | 0 |
Level 3 | Fixed Maturities | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 0 | 0 |
Level 3 | Public Utilities | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 0 | 0 |
Level 3 | Common Stock | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 0 | 0 |
Level 3 | Nonredeemable Preferred Stocks | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 0 | 0 |
Level 3 | Equity Securities | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | 0 | 0 |
Level 3 | Other Long-term Investments | ||
Schedule of Available-for-sale Securities | ||
Fair value of financial instruments | $ 1,666 | $ 1,698 |
Investments - Schedule of Fai43
Investments - Schedule of Fair Value of Financial Instruments with Unobservable Inputs (Details) - Level 3 - Other Long-term Investments $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
December 31, 2016 | $ 1,698 |
Transfers in | 0 |
Partnership income | 4 |
Return of capital | (121) |
Unrealized gains in accumulated other comprehensive income | 85 |
March 31, 2017 | $ 1,666 |
Investments - Schedule of Inves
Investments - Schedule of Investments in Limited Partnerships (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Schedule of Cost-method Investments | ||
Other investments, cost | $ 535,560 | $ 527,183 |
Unrealized Loss | (3,947) | (6,134) |
Unrealized Gain | 9,493 | 7,598 |
Other Long-term Investments | ||
Schedule of Cost-method Investments | ||
Total other investments | 14,728 | |
Other investments, cost | 14,618 | 5,493 |
Fair value - partnerships | 14,943 | |
Other Long-term Investments | 14,943 | 5,733 |
Unrealized Loss | (20) | (27) |
Unrealized Gain | 345 | $ 267 |
Net unrealized gain (loss) | 345 | |
Limited Partnership | Other Long-term Investments | ||
Schedule of Cost-method Investments | ||
Initial investment - partnerships | 14,428 | |
Other investments, cost | 14,318 | |
Fair value - partnerships | 14,643 | |
Unrealized Loss | (20) | |
Net unrealized gain (loss) | 345 | |
Limited Partnership | Other Long-term Investments | Level 2 | ||
Schedule of Cost-method Investments | ||
Initial investment - partnerships | 13,116 | |
Other investments, cost | 12,977 | |
Fair value - partnerships | 12,977 | |
Unrealized Loss | 0 | |
Net unrealized gain (loss) | 0 | |
Limited Partnership | Other Long-term Investments | Level 3 | ||
Schedule of Cost-method Investments | ||
Initial investment - partnerships | 1,312 | |
Other investments, cost | 1,341 | |
Fair value - partnerships | 1,666 | |
Unrealized Loss | (20) | |
Net unrealized gain (loss) | 345 | |
Certificates of Deposit | Other Long-term Investments | Level 1 | ||
Schedule of Cost-method Investments | ||
Initial investment - certificates of deposit | 300 | |
Other investments, cost | 300 | |
Fair value - certificates of deposit | 300 | |
Unrealized Loss | 0 | |
Unrealized Gain | 0 | |
DCR Mortgage Fund VI, L.P. | Limited Partnership | Other Long-term Investments | Level 3 | ||
Schedule of Cost-method Investments | ||
Initial investment - partnerships | 312 | |
Other investments, cost | 360 | |
Fair value - partnerships | 705 | |
Unrealized Loss | 0 | |
Unrealized Gain | 345 | |
RCH Mortgage Fund VI, L.P. | Limited Partnership | Other Long-term Investments | Level 3 | ||
Schedule of Cost-method Investments | ||
Initial investment - partnerships | 1,000 | |
Other investments, cost | 981 | |
Fair value - partnerships | 961 | |
Unrealized Loss | (20) | |
Unrealized Gain | 0 | |
Kayne Senior Credit Fund II, L.P. | Limited Partnership | Other Long-term Investments | Level 2 | ||
Schedule of Cost-method Investments | ||
Initial investment - partnerships | 1,658 | |
Other investments, cost | 1,509 | |
Fair value - partnerships | 1,509 | |
Unrealized Loss | 0 | |
Unrealized Gain | 0 | |
DCR Mortgage Fund VII, L.P. | Limited Partnership | Other Long-term Investments | Level 2 | ||
Schedule of Cost-method Investments | ||
Initial investment - partnerships | 2,000 | |
Other investments, cost | 2,010 | |
Fair value - partnerships | 2,010 | |
Unrealized Loss | 0 | |
Unrealized Gain | 0 | |
Blackstone Alternative Solutions Trust 2015 | Limited Partnership | Other Long-term Investments | Level 2 | ||
Schedule of Cost-method Investments | ||
Initial investment - partnerships | 335 | |
Other investments, cost | 335 | |
Fair value - partnerships | 335 | |
Unrealized Loss | 0 | |
Unrealized Gain | 0 | |
Green Street Power Partners | Limited Partnership | Other Long-term Investments | Level 2 | ||
Schedule of Cost-method Investments | ||
Initial investment - partnerships | 9,123 | |
Other investments, cost | 9,123 | |
Fair value - partnerships | 9,123 | |
Unrealized Loss | 0 | |
Unrealized Gain | $ 0 |
Investments - Schedule of Fai45
Investments - Schedule of Fair Value Quantitative Information (Details) - Discounted Cash Flow - Limited Partnership - Level 3 - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
DCR Mortgage Fund VI, L.P. | ||
Fair Value Inputs, Assets, Quantitative Information | ||
Unrealized gains in accumulated other comprehensive income | $ (47) | $ (56) |
Rate adjustment | 2.35% | 2.35% |
RCH Mortgage Fund VI, L.P. | ||
Fair Value Inputs, Assets, Quantitative Information | ||
Unrealized gains in accumulated other comprehensive income | $ (341) | $ (341) |
Rate adjustment | 7.35% | 7.35% |
Acquisitions (Details)
Acquisitions (Details) | 3 Months Ended |
Mar. 31, 2017subsidiary | |
Business Acquisition | |
Number of Wholly Owned Subsidiaries | 3 |
Acquisitions - Schedule of Pro
Acquisitions - Schedule of Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Business Acquisition | ||
Revenues | $ 122,633 | $ 107,561 |
Pro Forma Revenue | 160,730 | 124,195 |
Net Income | 3,899 | 2,951 |
Pro Forma Net Income (Loss) | $ 10,366 | $ 5,301 |
Diluted earnings per share (in usd per share) | $ 0.18 | $ 0.14 |
Pro Forma Diluted Earnings Per Share (in usd per share) | $ 0.24 | $ 0.25 |
Interboro Insurance Company | ||
Business Acquisition | ||
Pro Forma Revenue | $ 16,634 | |
Pro Forma Net Income (Loss) | $ 2,350 | |
Pro Forma Diluted Earnings Per Share (in usd per share) | $ 0 | |
American Coastal Insurance Company | ||
Business Acquisition | ||
Pro Forma Revenue | $ 38,097 | |
Pro Forma Net Income (Loss) | $ 6,467 | |
Pro Forma Diluted Earnings Per Share (in usd per share) | $ 0 |
Acquisitions - Schedule of Cons
Acquisitions - Schedule of Consideration Transferred (Details) - Interboro Insurance Company $ in Thousands | Apr. 29, 2016USD ($) |
Business Acquisition | |
Notes Issued | $ 8,550 |
Cash | 48,450 |
Accrued Liabilities | 3,471 |
Total purchase price | $ 60,471 |
Acquisitions - Schedule of Purc
Acquisitions - Schedule of Purchase Price Allocation (Details) - Interboro Insurance Company $ in Thousands | Apr. 29, 2016USD ($) |
Business Acquisition | |
Cash and Cash Equivalents | $ 15,554 |
Investments | 66,527 |
Premium and Agents' Receivable | 3,186 |
Goodwill | 10,841 |
Intangible assets | 5,877 |
Insurance contract asset | 8,334 |
Other assets | 3,980 |
Loss Reserves | (24,967) |
Unearned Premiums | (26,243) |
Reinsurance Receivable | 1,042 |
Deferred taxes | (109) |
Other liabilities | (2,079) |
Total purchase price | 60,471 |
Advanced Premiums | $ 1,472 |
Earnings per Share - Schedule o
Earnings per Share - Schedule of Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Numerator | ||
Net Income | $ 3,899 | $ 2,951 |
Denominator | ||
Weighted-average shares outstanding (in shares) | 21,471,185 | 21,346,701 |
Effect of dilutive securities (in shares) | 217,548 | 190,795 |
Weighted-average diluted shares (in shares) | 21,688,733 | 21,537,496 |
Basic earnings per share (in usd per share) | $ 0.18 | $ 0.14 |
Diluted earnings per share (in usd per share) | $ 0.18 | $ 0.14 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization expense | $ 615 | $ 622 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment | ||
Total, at cost | $ 25,175 | $ 24,967 |
Less: Accumulated Depreciation and Amortization, Property, Plant, and Equipment | (7,722) | (7,107) |
Property, Plant and Equipment, Net | 17,453 | 17,860 |
Building | ||
Property, Plant and Equipment | ||
Total, at cost | 5,502 | 5,502 |
Land | ||
Property, Plant and Equipment | ||
Total, at cost | 2,114 | 2,114 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment | ||
Total, at cost | 0 | 0 |
Office Equipment [Member] | ||
Property, Plant and Equipment | ||
Total, at cost | 2,652 | 2,652 |
Computer Equipment [Member] | ||
Property, Plant and Equipment | ||
Total, at cost | $ 14,907 | $ 14,699 |
Goodwill and Intangible Asset53
Goodwill and Intangible Assets Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of Intangible Assets | $ 1,794 | |
Goodwill | $ 14,254 | $ 14,254 |
Goodwill and Intangible Asset54
Goodwill and Intangible Assets Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 12,189 | $ 12,189 |
Finite-Lived Intangible Assets, Accumulated Amortization | (3,622) | (3,048) |
Finite-Lived Intangible Assets, Net | 8,567 | 9,141 |
Indefinite-lived Intangible Assets Acquired | 1,185 | 1,185 |
Customer Relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 10,284 | 10,284 |
Finite-Lived Intangible Assets, Accumulated Amortization | (3,298) | (2,784) |
Finite-Lived Intangible Assets, Net | $ 6,986 | $ 7,500 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 3 years 5 months | 3 years 8 months |
Trade Names | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 720 | $ 720 |
Finite-Lived Intangible Assets, Accumulated Amortization | (324) | (264) |
Finite-Lived Intangible Assets, Net | $ 396 | $ 456 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 1 year 9 months | 2 years 1 month |
Goodwill and Intangible Asset55
Goodwill and Intangible Assets Goodwill and Intangible Assets - Future Amortization Expense (Details) $ in Thousands | Mar. 31, 2017USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Finite-Lived Intangible Assets, Amortization Expense, Remainder of Fiscal Year | $ 1,799 |
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 2,271 |
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 2,159 |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 1,071 |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 358 |
Finite-Lived Intangible Assets, Amortization Expense, after Year Five | $ 49 |
Reinsurance (Details)
Reinsurance (Details) | Jun. 01, 2016USD ($)catastrophic_eventlayerreinsurerRate | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($) |
Reinsurance Retention Policy [Line Items] | ||||
Prepaid reinsurance premiums | $ 92,745,000 | $ 132,564,000 | ||
Cash recoveries under reinsurance agreements | $ 2,484,000 | $ 266,000 | ||
Flood premiums ceded (percentage) | 100.00% | |||
Insurance commissions and fees under Flood Program | $ 294,000 | $ 246,000 | ||
Minimum | ||||
Reinsurance Retention Policy [Line Items] | ||||
ISO Catastrophe Definition | $ 25,000,000 | |||
Maximum | ||||
Reinsurance Retention Policy [Line Items] | ||||
Stated amount of upper retention limit per policy | 10,000,000 | |||
Second And Subsequent Catastrophic Events | ||||
Reinsurance Retention Policy [Line Items] | ||||
Amount of risk reinsured in excess of stated retention | 100,000,000 | |||
Second And Subsequent Catastrophic Events | Maximum | ||||
Reinsurance Retention Policy [Line Items] | ||||
Amount of risk reinsured in excess of stated retention | $ 1,515,197,000 | |||
Catastrophe | ||||
Reinsurance Retention Policy [Line Items] | ||||
Percentage of losses covered | Rate | 100.00% | |||
Prepaid reinsurance premiums | $ 191,500,000 | |||
Catastrophe | First Catastrophic Event | ||||
Reinsurance Retention Policy [Line Items] | ||||
Reinsurance Retention Policy, Coverage Percentage Hurricane Event | catastrophic_event | 0.010 | |||
Percentage of losses covered | Rate | 100.00% | |||
Catastrophe | First Catastrophic Event | Maximum | ||||
Reinsurance Retention Policy [Line Items] | ||||
Amount of risk reinsured in excess of stated retention | $ 1,415,197,000 | |||
Stated amount of upper retention limit per policy | $ 30,000,000 | |||
Catastrophe | Second Catastrophic Event | ||||
Reinsurance Retention Policy [Line Items] | ||||
Reinsurance Retention Policy, Coverage Percentage Hurricane Event | catastrophic_event | 0.020 | |||
Catastrophe | Florida Hurricane Catastrophe Fund [Member] | FLORIDA | ||||
Reinsurance Retention Policy [Line Items] | ||||
Reimbursement percentage | 45.00% | |||
Reinsurance, Aggregate Value of Property Covered Under Contracts | $ 786,700,000 | |||
Reinsurance, Losses Not Covered Prior to Coverage Beginning | 246,002,000 | |||
Aggregate Coverage for Covered Losses Under Reinsurance Contract | $ 354,015,000 | |||
Catastrophe | Unaffiliated Private Reinsurers [Member] | ||||
Reinsurance Retention Policy [Line Items] | ||||
Number of private reinsurers | reinsurer | 55 | |||
Number of cascading insurance layers | layer | 5 | |||
Catastrophe | Unaffiliated Private Reinsurers [Member] | Maximum | ||||
Reinsurance Retention Policy [Line Items] | ||||
Stated amount of upper retention limit per policy | $ 10,000,000 | |||
Aggregate Coverage for Covered Losses Under Reinsurance Contract | $ 685,000,000 | |||
Catastrophe | Unaffiliated Private Reinsurers [Member] | FLORIDA | ||||
Reinsurance Retention Policy [Line Items] | ||||
Reimbursement percentage | 45.00% | |||
Reinsurance, Aggregate Value of Property Covered Under Contracts | $ 769,293,000 | |||
Reinsurance, Losses Not Covered Prior to Coverage Beginning | 244,206,000 | |||
Aggregate Coverage for Covered Losses Under Reinsurance Contract | 346,182,000 | |||
UPC Re | Catastrophe | Maximum | ||||
Reinsurance Retention Policy [Line Items] | ||||
Stated amount of upper retention limit per policy | $ 20,000,000 |
Reinsurance - Schedule of Ceded
Reinsurance - Schedule of Ceded Premiums Earned by Type (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Effects of Reinsurance [Line Items] | ||
Ceded Premiums Written | $ (35,063) | $ (8,676) |
Increase (Decrease) in Ceded Unearned Premiums | (39,819) | (36,456) |
Ceded Premiums Earned | (74,882) | (45,132) |
Excess of Loss Product Line | ||
Effects of Reinsurance [Line Items] | ||
Ceded Premiums Written | (29,599) | (4,057) |
Equipment and Identity Theft Product Line | ||
Effects of Reinsurance [Line Items] | ||
Ceded Premiums Written | (2,073) | (1,576) |
Flood Product Line | ||
Effects of Reinsurance [Line Items] | ||
Ceded Premiums Written | $ (3,391) | $ (3,043) |
Reinsurance - Schedule of Catas
Reinsurance - Schedule of Catastrophe Losses by Event Magnitude (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017USD ($)catastrophic_event | Mar. 31, 2016USD ($)catastrophic_event | |
Catastrophe | ||
Liability for Catastrophe Claims [Line Items] | ||
Number of Catastrophic Events | catastrophic_event | 5 | 10 |
Catastrophic Event, Incurred Losses and Loss Adjustment Expense | $ 10,612 | $ 15,056 |
Catastrophic Events, Impact on Combined Ratio | 9.90% | 14.90% |
Catastrophe | Catastrophe Loss Size, Range 2 [Member] | ||
Liability for Catastrophe Claims [Line Items] | ||
Number of Catastrophic Events | catastrophic_event | 4 | 4 |
Catastrophic Event, Incurred Losses and Loss Adjustment Expense | $ 9,873 | $ 11,341 |
Catastrophic Events, Impact on Combined Ratio | 9.20% | 11.20% |
Catastrophe | Catastrophe Loss Size, Range 1 [Member] | ||
Liability for Catastrophe Claims [Line Items] | ||
Number of Catastrophic Events | catastrophic_event | 1 | 6 |
Catastrophic Event, Incurred Losses and Loss Adjustment Expense | $ 739 | $ 3,715 |
Catastrophic Events, Impact on Combined Ratio | 0.70% | 3.70% |
Minimum | Catastrophe Loss Size, Range 3 [Member] | ||
Liability for Catastrophe Claims [Line Items] | ||
Catastrophic Event, Incurred Losses and Loss Adjustment Expense | $ 5,000 | $ 5,000 |
Minimum | Catastrophe Loss Size, Range 2 [Member] | ||
Liability for Catastrophe Claims [Line Items] | ||
Catastrophic Event, Incurred Losses and Loss Adjustment Expense | 1,000 | 1,000 |
Minimum | Catastrophe Loss Size, Range 1 [Member] | ||
Liability for Catastrophe Claims [Line Items] | ||
Catastrophic Event, Incurred Losses and Loss Adjustment Expense | 0 | 0 |
Maximum | Catastrophe Loss Size, Range 3 [Member] | ||
Liability for Catastrophe Claims [Line Items] | ||
Catastrophic Event, Incurred Losses and Loss Adjustment Expense | 10,000 | 10,000 |
Maximum | Catastrophe Loss Size, Range 2 [Member] | ||
Liability for Catastrophe Claims [Line Items] | ||
Catastrophic Event, Incurred Losses and Loss Adjustment Expense | 5,000 | 5,000 |
Maximum | Catastrophe Loss Size, Range 1 [Member] | ||
Liability for Catastrophe Claims [Line Items] | ||
Catastrophic Event, Incurred Losses and Loss Adjustment Expense | $ 1,000 | $ 1,000 |
Liability for Unpaid Losses a59
Liability for Unpaid Losses and Loss Adjustment Expenses Liability for Unpaid Losses and Loss Adjustment Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||||
Unpaid losses and loss adjustment expenses | $ 141,102 | $ 88,446 | $ 140,855 | $ 76,792 |
Reinsurance Recoverable for Unpaid Claims and Claims Adjustments | 20,152 | 911 | 18,724 | 2,114 |
Liability for Unpaid Claims and Claims Adjustment Expense, Net | 120,950 | 87,535 | $ 122,131 | $ 74,678 |
Current Year Claims and Claims Adjustment Expense | 63,859 | 61,072 | ||
Prior Year Claims and Claims Adjustment Expense | (526) | 3,186 | ||
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred Claims | 63,333 | 64,258 | ||
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid, Current Year | 21,986 | 23,691 | ||
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid, Prior Years | 42,528 | 27,710 | ||
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid | 64,514 | 51,401 | ||
Liability for Unpaid Claims and Claims Adjustment Expense, Reported Claims, Amount | 82,987 | 53,006 | ||
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred but Not Reported (IBNR) Claims, Amount | $ 58,115 | $ 35,440 |
Long-Term Debt (Details)
Long-Term Debt (Details) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2017USD ($)Rate | Dec. 31, 2016USD ($) | Dec. 05, 2016USD ($)Rate | May 26, 2016USD ($) | |
Debt Instrument | ||||
Notes Payable | $ 53,822 | $ 54,175 | ||
Effective rate at period end | 2.40% | |||
Florida State Board of Administration Note Payable | ||||
Debt Instrument | ||||
Notes Payable | $ 10,882 | $ 11,176 | ||
Interest rate (percentage) | 2.49% | 1.56% | ||
Statutory capital and surplus required | $ 12,254 | |||
Capital contributed to surplus | 20,000 | |||
Debt Instrument, Periodic Payment, Principal | 294 | |||
Debt Instrument, Periodic Payment, Interest | $ 70 | |||
Florida State Board of Administration Note Payable | Gross and Net Writing Ratio | 10-Year Constant Maturity Treasury Rate | ||||
Debt Instrument | ||||
Basis spread on variable rate | Rate | 4.50% | |||
Florida State Board of Administration Note Payable | Gross Writing Ratio | ||||
Debt Instrument | ||||
Required written premiums to surplus ratio | 6 | |||
Florida State Board of Administration Note Payable | Gross Writing Ratio | Minimum | ||||
Debt Instrument | ||||
Required written premiums to surplus ratio | 4.5 | |||
Florida State Board of Administration Note Payable | Net Writing Ratio | ||||
Debt Instrument | ||||
Required written premiums to surplus ratio | 2 | |||
Florida State Board of Administration Note Payable | Net Writing Ratio | Minimum | ||||
Debt Instrument | ||||
Required written premiums to surplus ratio | 1.5 | |||
Florida State Board of Administration Note Payable | Other Than Gross and Net Writing Ratio | Stated Rate | ||||
Debt Instrument | ||||
Basis spread on variable rate | Rate | 0.25% | |||
Interboro, LLC Promissory Note | ||||
Debt Instrument | ||||
Notes Payable | $ 8,550 | |||
Interest rate (percentage) | 6.00% | |||
BB&T Term Note Payable | ||||
Debt Instrument | ||||
Notes Payable | $ 4,911 | $ 4,998 | $ 5,200 | |
Interest rate (percentage) | 2.44% | 1.65% | ||
Debt Instrument, Periodic Payment, Principal | $ 87 | |||
Debt Instrument, Periodic Payment, Interest | $ 30 | |||
BB&T Term Note Payable | Minimum | ||||
Debt Instrument | ||||
Cash Flow Coverage Ratio | 1.2 | |||
Required Balance in Interest Bearing Account | $ 1,500 | |||
Required Balance in Non-Interest Bearing Account | $ 500 | |||
BB&T Term Note Payable | Non-recurring Loss | Minimum | ||||
Debt Instrument | ||||
Cash Flow Coverage Ratio | 1 | |||
Senior Notes | ||||
Debt Instrument | ||||
Notes Payable | $ 30,000 | |||
Interest rate (percentage) | Rate | 5.75% | |||
Debt Instrument, Periodic Payment, Interest | $ 634 |
Statutory Accounting and Regu61
Statutory Accounting and Regulation - Schedule of Statutory Net Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
United Property & Casualty Insurance Company | ||
Statutory Accounting Practices | ||
Statutory net income | $ (6,039) | $ (1,172) |
Family Security Insurance Company | ||
Statutory Accounting Practices | ||
Statutory net income | 2,937 | $ 96 |
Interboro Insurance Company | ||
Statutory Accounting Practices | ||
Statutory net income | $ 2,079 |
Statutory Accounting and Regu62
Statutory Accounting and Regulation - Schedule of Affiliates' Surplus Regarding Policyholders (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
United Property & Casualty Insurance Company | ||
Statutory Accounting Practices | ||
Statutory capital and surplus required (percent of total liabilities) | 10.00% | |
Statutory capital and surplus balance | $ 157,160 | $ 155,587 |
Family Security Insurance Company | ||
Statutory Accounting Practices | ||
Statutory capital and surplus balance | 20,473 | 16,269 |
Interboro Insurance Company | ||
Statutory Accounting Practices | ||
Statutory capital and surplus balance | 43,939 | $ 40,442 |
Minimum | United Property & Casualty Insurance Company | ||
Statutory Accounting Practices | ||
Statutory capital and surplus required | 5,000 | |
Minimum | Family Security Insurance Company | ||
Statutory Accounting Practices | ||
Statutory capital and surplus required | 3,250 | |
Minimum | Interboro Insurance Company | ||
Statutory Accounting Practices | ||
Statutory capital and surplus required | $ 4,700 |
Related Party Transactions (Det
Related Party Transactions (Details) - Legal Fees - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Related Party Transaction | ||
Amounts of Transactions | $ 868 | $ 596 |
Spouse of Executive Officer | ||
Related Party Transaction | ||
Amounts of Transactions | $ 434 | $ 298 |
Related party interest in billings (percentage) | 50.00% |
Accumulated Other Comprehensi64
Accumulated Other Comprehensive Income - Schedule of Accumulated Other Comprehensive Income (Loss) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Pre-Tax Amount | |
December 31, 2016 | $ 1,464 |
Changes in net unrealized gains on investments | 3,731 |
Reclassification adjustment for realized gains | 351 |
March 31, 2017 | 5,546 |
Tax (Expense) Benefit | |
December 31, 2016 | (642) |
Changes in net unrealized gains on investments | (1,406) |
Reclassification adjustment for realized gains | (136) |
March 31, 2017 | (2,184) |
Net-of-Tax Amount | |
December 31, 2016 | 822 |
Changes in net unrealized gains on investments | 2,325 |
Reclassification adjustment for realized gains | (215) |
March 31, 2017 | $ 3,362 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - shares | Mar. 31, 2017 | Dec. 31, 2016 |
Class of Stock | ||
Authorized shares of preferred stock | 1,000,000 | 1,000,000 |
Schedule of Dividends Declared
Schedule of Dividends Declared (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Class of Stock | ||
Dividends declared per share (in usd per share) | $ 0.06 | $ 0.05 |
Aggregate amount of dividends | $ 1,301 | $ 1,076 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||
Unrecognized stock compensation expense | $ 2,177 | |
Period for recognition (years) | 3 years | |
Allocated compensation expense | $ 375 | $ 197 |
Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Shares granted during period (in shares) | 90,122 | 46,205 |
Weighted average grant date fair value (usd per share) | $ 16.04 | $ 17.63 |
Director | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Unrecognized stock compensation expense | $ 104 | |
Allocated compensation expense | $ 266 | $ 262 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Nonvested Shares Activity (Details) - Restricted Stock - $ / shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Number of Restricted Shares | ||
Outstanding as of December 31, 2015 (shares) | 169,642 | |
Granted (usd per share) | 90,122 | 46,205 |
Forfeited (usd per share) | 10,128 | |
Vested (usd per share) | 28,444 | |
Outstanding as of June 30, 2016 (shares) | 221,192 | |
Weighted Average Grant Date Fair Value | ||
Outstanding as of December 31, 2016 (usd per share) | $ 16.87 | |
Granted (usd per share) | 16.04 | $ 17.63 |
Forfeited (usd per share) | 20.15 | |
Vested (usd per share) | 19.79 | |
Outstanding as of March 31, 2017 (usd per share) | $ 16.01 |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares | May 09, 2017 | Mar. 31, 2017 | Mar. 31, 2016 |
Subsequent Event [Line Items] | |||
Dividends declared per share (in usd per share) | $ 0.06 | $ 0.05 | |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Dividends declared per share (in usd per share) | $ 0.06 |