Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Jun. 30, 2014 | Mar. 09, 2015 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | GBLI | ||
Entity Registrant Name | GLOBAL INDEMNITY PLC | ||
Entity Central Index Key | 1494904 | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $212,911,354 | ||
Ordinary Shares A | |||
Document Information [Line Items] | |||
Entity Ordinary Shares, Shares Outstanding | 13,394,145 | ||
Ordinary Shares B | |||
Document Information [Line Items] | |||
Entity Ordinary Shares, Shares Outstanding | 12,061,370 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fixed maturities: | ||
Available for sale, at fair value (amortized cost: $1,272,948 and $1,187,685) | $1,283,475 | $1,204,364 |
Equity securities: | ||
Available for sale, at fair value (cost: $99,297 and $191,425) | 122,048 | 254,070 |
Other invested assets: | ||
Available for sale, at fair value (cost: $33,174 and $3,065) | 33,663 | 3,489 |
Total investments | 1,439,186 | 1,461,923 |
Cash and cash equivalents | 58,823 | 105,492 |
Restricted cash (Note 2) | 113,696 | |
Premiums receivable, net | 56,586 | 49,888 |
Reinsurance receivables, net | 125,718 | 197,887 |
Funds held by ceding insurers | 25,176 | 18,662 |
Federal income taxes receivable | 3,139 | |
Deferred federal income taxes | 20,250 | 4,206 |
Deferred acquisition costs | 25,238 | 22,177 |
Intangible assets | 17,636 | 17,990 |
Goodwill | 4,820 | 4,820 |
Prepaid reinsurance premiums | 4,725 | 5,199 |
Receivable for securities sold | 60 | 723 |
Other assets | 34,980 | 22,812 |
Total assets | 1,930,033 | 1,911,779 |
Liabilities: | ||
Unpaid losses and loss adjustment expenses | 675,472 | 779,466 |
Unearned premiums | 120,815 | 116,629 |
Federal income taxes payable | 1,595 | |
Ceded balances payable | 2,800 | 5,177 |
Contingent commissions | 12,985 | 12,677 |
Margin borrowing facilities | 174,673 | 100,000 |
Other liabilities | 34,998 | 22,955 |
Total liabilities | 1,021,743 | 1,038,499 |
Commitments and contingencies (Note 13) | ||
Shareholders' equity: | ||
Ordinary shares, $0.0001 par value, 900,000,000 ordinary shares authorized; A ordinary shares issued: 16,331,577 and 16,200,406, respectively; A ordinary shares outstanding: 13,266,762 and 13,141,035, respectively; B ordinary shares issued and outstanding: 12,061,370 and 12,061,370, respectively | 3 | 3 |
Additional paid-in capital | 519,590 | 516,653 |
Accumulated other comprehensive income, net of taxes | 23,384 | 54,028 |
Retained earnings | 466,717 | 403,861 |
Total shareholders' equity | 908,290 | 873,280 |
Total liabilities and shareholders' equity | 1,930,033 | 1,911,779 |
Ordinary Shares A | ||
Shareholders' equity: | ||
A ordinary shares in treasury, at cost: 3,064,815 and 3,059,371 shares, respectively | -101,404 | -101,265 |
Total shareholders' equity | $2 | $2 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Available for sale, amortized cost | $1,272,948 | $1,187,685 |
Available for sale, at cost | 99,297 | 191,425 |
Available for sale, at cost | $33,174 | $3,065 |
Ordinary shares, par value | $0.00 | $0.00 |
Ordinary shares, shares authorized | 900,000,000 | 900,000,000 |
Ordinary Shares A | ||
Ordinary shares, shares issued | 16,331,577 | 16,200,406 |
Ordinary shares, shares outstanding | 13,266,762 | 13,141,035 |
Treasury shares, cost | 3,064,815 | 3,059,371 |
Ordinary Shares B | ||
Ordinary shares, shares issued | 12,061,370 | 12,061,370 |
Ordinary shares, shares outstanding | 12,061,370 | 12,061,370 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues: | |||||||||||
Gross premiums written | $291,253 | $290,723 | $244,053 | ||||||||
Net premiums written | 273,181 | 271,984 | 219,547 | ||||||||
Net premiums earned | 66,930 | 68,028 | 66,017 | 67,544 | 69,586 | 64,469 | 58,671 | 55,996 | 268,519 | 248,722 | 238,862 |
Net investment income | 6,333 | 6,527 | 7,677 | 8,284 | 8,924 | 8,486 | 9,765 | 10,034 | 28,821 | 37,209 | 47,557 |
Net realized investment gains: | |||||||||||
Other than temporary impairment losses on investments | -501 | -1,239 | -5,914 | ||||||||
Other than temporary impairment losses on investments recognized in other comprehensive income | 541 | ||||||||||
Other net realized investment gains | 36,361 | 28,651 | 12,128 | ||||||||
Total net realized investment gains | -4,366 | 1,158 | 39,881 | -813 | 17,208 | 1,641 | 2,806 | 5,757 | 35,860 | 27,412 | 6,755 |
Other income (loss) | 555 | 5,791 | -158 | ||||||||
Total revenues | 333,755 | 319,134 | 293,016 | ||||||||
Losses and Expenses: | |||||||||||
Net losses and loss adjustment expenses | 24,065 | 36,654 | 38,270 | 38,572 | 30,796 | 35,483 | 34,924 | 31,788 | 137,561 | 132,991 | 153,628 |
Acquisition costs and other underwriting expenses | 28,505 | 27,458 | 27,171 | 26,485 | 28,674 | 28,028 | 24,472 | 24,477 | 109,619 | 105,651 | 95,403 |
Corporate and other operating expenses | 14,559 | 11,614 | 9,691 | ||||||||
Interest expense | 822 | 6,169 | 5,393 | ||||||||
Income before income taxes | 11,294 | 8,128 | 44,798 | 6,974 | 37,155 | 5,056 | 8,440 | 12,058 | 71,194 | 62,709 | 28,901 |
Income tax expense (benefit) | 8,338 | 1,019 | -5,856 | ||||||||
Net income | $11,064 | $9,761 | $33,208 | $8,823 | $33,713 | $6,948 | $8,664 | $12,365 | $62,856 | $61,690 | $34,757 |
Net income | |||||||||||
Basic | $2.50 | $2.46 | $1.30 | ||||||||
Diluted | $0.44 | $0.39 | $1.31 | $0.35 | $1.34 | $0.28 | $0.34 | $0.49 | $2.48 | $2.45 | $1.30 |
Weighted-average number of shares outstanding | |||||||||||
Basic | 25,131,811 | 25,072,712 | 26,722,772 | ||||||||
Diluted | 25,331,420 | 25,174,015 | 26,748,833 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Net income | $62,856 | $61,690 | $34,757 |
Other comprehensive income (loss), net of tax: | |||
Unrealized holding gains | 6,878 | 17,466 | 8,295 |
Portion of other than temporary impairment losses recognized in other comprehensive income (loss) | -4 | -538 | |
Reclassification adjustment for (gains) losses included in net income | -37,177 | -16,951 | 5,448 |
Unrealized foreign currency translation gains (losses) | -341 | 163 | -29 |
Other comprehensive income (loss), net of tax | -30,644 | 678 | 13,176 |
Comprehensive income, net of tax | $32,212 | $62,368 | $47,933 |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Shareholders' Equity (USD $) | Total | Additional Paid-in Capital | Accumulated other comprehensive income, net of deferred income tax | Retained Earnings | Treasury Shares | Ordinary Shares A | Ordinary Shares A | Ordinary Shares B |
In Thousands, except Share data, unless otherwise specified | Treasury Shares | |||||||
Balance at Dec. 31, 2011 | $621,917 | $40,174 | $307,414 | ($130,444) | $2 | $1 | ||
Number at Dec. 31, 2011 | 4,619,005 | 21,429,683 | 12,061,370 | |||||
A ordinary shares purchased | 4,997 | 3,809,415 | ||||||
Ordinary shares issued under share incentive plans | 29,675 | |||||||
A ordinary shares retired | -5,371,419 | -5,371,419 | ||||||
A ordinary shares purchased, at cost | -100 | -82,961 | ||||||
Other comprehensive income (loss), net of tax: | ||||||||
Change in unrealized holding gains (losses) | 13,219 | |||||||
Change in other than temporary impairment losses recognized in other comprehensive income (loss) | -14 | |||||||
Unrealized foreign currency translation gains (losses) | -29 | -29 | ||||||
Other comprehensive income (loss), net of tax | 13,176 | 13,176 | ||||||
Share compensation plans | 2,582 | |||||||
Net income | 34,757 | 34,757 | ||||||
A ordinary shares retired | -112,195 | 112,195 | ||||||
Balance at Dec. 31, 2012 | 806,618 | 512,304 | 53,350 | 342,171 | -101,210 | 2 | 1 | |
Number at Dec. 31, 2012 | 3,057,001 | 16,087,939 | 12,061,370 | |||||
A ordinary shares purchased | 2,370 | 2,370 | ||||||
Ordinary shares issued under share incentive plans | 74,400 | |||||||
Ordinary shares issued to directors | 38,067 | |||||||
A ordinary shares purchased, at cost | -100 | -55 | ||||||
Other comprehensive income (loss), net of tax: | ||||||||
Change in unrealized holding gains (losses) | 514 | |||||||
Change in other than temporary impairment losses recognized in other comprehensive income (loss) | 1 | |||||||
Unrealized foreign currency translation gains (losses) | 163 | 163 | ||||||
Other comprehensive income (loss), net of tax | 678 | 678 | ||||||
Share compensation plans | 4,349 | |||||||
Net income | 61,690 | 61,690 | ||||||
Balance at Dec. 31, 2013 | 873,280 | 516,653 | 54,028 | 403,861 | -101,265 | 2 | 1 | |
Number at Dec. 31, 2013 | 3,059,371 | 16,200,406 | 12,061,370 | |||||
A ordinary shares purchased | 5,444 | 5,444 | ||||||
Ordinary shares issued under share incentive plans | 94,563 | |||||||
Ordinary shares issued to directors | 36,608 | |||||||
A ordinary shares purchased, at cost | -100 | -139 | ||||||
Other comprehensive income (loss), net of tax: | ||||||||
Change in unrealized holding gains (losses) | -30,299 | |||||||
Change in other than temporary impairment losses recognized in other comprehensive income (loss) | -4 | |||||||
Unrealized foreign currency translation gains (losses) | -341 | -341 | ||||||
Other comprehensive income (loss), net of tax | -30,644 | -30,644 | ||||||
Share compensation plans | 2,900 | |||||||
Net income | 62,856 | 62,856 | ||||||
Tax benefit on share-based compensation expense | 37 | 37 | ||||||
Balance at Dec. 31, 2014 | $908,290 | $519,590 | $23,384 | $466,717 | ($101,404) | $2 | $1 | |
Number at Dec. 31, 2014 | 3,064,815 | 16,331,577 | 12,061,370 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities: | |||
Net income | $62,856 | $61,690 | $34,757 |
Adjustments to reconcile net income to net cash used for operating activities: | |||
Amortization of trust preferred securities issuance costs | 77 | 59 | |
Amortization and depreciation | 3,466 | 3,807 | 2,282 |
Restricted stock and stock option expense | 2,900 | 4,349 | 2,625 |
Deferred federal income taxes | -828 | -3 | -1,463 |
Amortization of bond premium and discount, net | 9,103 | 6,696 | 6,981 |
Net realized investment gains | -35,860 | -27,412 | -6,755 |
Gain on the disposition of subsidiary | -5,166 | ||
Changes in: | |||
Premiums receivable, net | -6,698 | -12,136 | 8,594 |
Reinsurance receivables, net | 72,169 | 43,940 | 46,159 |
Funds held by ceding insurers | -6,514 | -11,252 | -5,912 |
Unpaid losses and loss adjustment expenses | -103,994 | -99,639 | -92,263 |
Unearned premiums | 4,186 | 22,515 | -19,927 |
Ceded balances payable | -2,377 | 976 | -4,686 |
Other assets and liabilities, net | -3,398 | -1,436 | -7,190 |
Contingent commissions | 308 | 2,766 | 2,438 |
Federal income tax receivable/payable | -4,734 | 8,473 | -4,621 |
Deferred acquisition costs, net | -3,061 | -3,912 | 3,299 |
Prepaid reinsurance premiums | 474 | 746 | 610 |
Net cash used for operating activities | -12,002 | -4,921 | -35,013 |
Cash flows from investing activities: | |||
Proceeds from sale of fixed maturities | 415,739 | 292,200 | 454,655 |
Proceeds from sale of equity securities | 191,765 | 101,379 | 50,176 |
Proceeds from maturity of fixed maturities | 108,556 | 143,034 | 73,370 |
Proceeds from sale of other invested assets | 12 | 1,114 | |
Proceeds from disposition of subsidiary, net of cash and cash equivalents disposed of $679 | 25,885 | ||
Cash deposited in escrow for purchase of American Reliable | -113,696 | ||
Amount paid in connection with derivatives | -20,550 | -5,421 | |
Purchases of fixed maturities | -615,867 | -465,318 | -457,150 |
Purchases of equity securities | -45,077 | -100,806 | -57,509 |
Purchases of other invested assets | -30,120 | -16 | -13 |
Net cash provided by (used for) investing activities | -109,238 | -9,063 | 64,643 |
Cash flows from financing activities: | |||
Borrowings under margin borrowing facilities | 74,673 | 100,000 | |
Purchases of A ordinary shares | -139 | -55 | -82,959 |
Tax benefit on share-based compensation expense | 37 | ||
Retirement of junior subordinated debentures | -30,929 | ||
Principal payments of term debt | -54,000 | -18,071 | |
Net cash provided by (used for) financing activities | 74,571 | 15,016 | -101,030 |
Net change in cash and cash equivalents | -46,669 | 1,032 | -71,400 |
Cash and cash equivalents at beginning of period | 105,492 | 104,460 | 175,860 |
Cash and cash equivalents at end of period | $58,823 | $105,492 | $104,460 |
Consolidated_Statements_of_Cas1
Consolidated Statements of Cash Flows (Parenthetical) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
Proceeds from disposition of subsidiary, cash disposed | $679 |
Principles_of_Consolidation_an
Principles of Consolidation and Basis of Presentation | 12 Months Ended | |
Dec. 31, 2014 | ||
Principles of Consolidation and Basis of Presentation | 1 | Principles of Consolidation and Basis of Presentation |
Global Indemnity plc (“Global Indemnity” or “the Company”) was incorporated on March 9, 2010 and is domiciled in Ireland. Global Indemnity replaced the Company’s predecessor, United America Indemnity, Ltd., as the ultimate parent company as a result of a re-domestication transaction. United America Indemnity, Ltd. was incorporated on August 26, 2003, and is domiciled in the Cayman Islands. United America Indemnity, Ltd. is now a subsidiary of the Company. The Company’s A ordinary shares are publicly traded on the NASDAQ Global Select Market under the trading symbol “GBLI.” | ||
As of December 31, 2014, the Company managed its business through two business segments: Insurance Operations, which includes the operations of United National Insurance Company, Diamond State Insurance Company, United National Specialty Insurance Company, Penn-America Insurance Company, Penn-Star Insurance Company, Penn-Patriot Insurance Company, American Insurance Adjustment Agency, Inc., Collectibles Insurance Services, LLC, Global Indemnity Insurance Agency, LLC, and J.H. Ferguson & Associates, LLC, and Reinsurance Operations, which includes the operations of Global Indemnity Reinsurance. | ||
The Company offers property and casualty insurance products in the excess and surplus lines marketplace through its Insurance Operations and provides third party treaty reinsurance for specialty property and casualty insurance and reinsurance companies through its Reinsurance Operations. As of December 31, 2014, the Company managed its Insurance Operations by differentiating them into three product classifications: Penn-America, which markets to small commercial businesses through a select network of wholesale general agents with specific binding authority; United National, which markets insurance products for targeted insured segments, including specialty products, such as property, general liability, and professional lines through program administrators with specific binding authority; and Diamond State, which markets property, casualty, and professional lines products, which are developed by the Company’s underwriting department by individuals with expertise in those lines of business, through wholesale brokers and also markets through program administrators having specific binding authority. These product classifications comprise the Company’s Insurance Operations business segment and are not considered individual business segments because each product has similar economic characteristics, distribution, and coverage. Collectively, the Company’s U.S. insurance subsidiaries are licensed in all 50 states and the District of Columbia. The Company’s Reinsurance Operations consist solely of the operations of its Bermuda-based wholly-owned subsidiary, Global Indemnity Reinsurance. Global Indemnity Reinsurance is a treaty reinsurer of specialty property and casualty insurance and reinsurance companies. The Company’s Reinsurance Operations segment provides reinsurance solutions through brokers and primary writers including insurance and reinsurance companies. | ||
The consolidated financial statements have been prepared in conformity with United States of America generally accepted accounting principles (“GAAP”), which differs in certain respects from those principles followed in reports to insurance regulatory authorities. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | ||
The consolidated financial statements include the accounts of Global Indemnity and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. | ||
The Consolidated Statement of Cash Flows for the years ended December 31, 2013 and 2012 that were included in the Form 10-K for the annual periods ended December 31, 2013 and 2012 classified $3.0 million and $0.4 million, respectively, as “Other assets and liabilities, net” within the “Cash flows from operating activities” section. These amounts were properly reclassified to the line item “Amortization and depreciation” in the Consolidated Statement of Cash Flows for the years ended December 31, 2013 and 2012 as included in this Form 10-K for the annual period ended December 31, 2014 (“the December 31, 2014 10K”). These reclassifications do not impact “Net cash flows used for operating activities” nor does it impact any other financial metric or disclosure within the December 31, 2014 10K. The Company does not believe that these adjustments are material to the current or to any prior years’ consolidated financial statements. | ||
Certain other prior period amounts have been reclassified to conform to the current period presentation. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||
Dec. 31, 2014 | |||
Summary of Significant Accounting Policies | 2 | Summary of Significant Accounting Policies | |
Restricted Cash | |||
At December 31, 2014, the Company had $113.7 million of cash in escrow to fund the acquisition of American Reliable on January 1, 2015. | |||
Investments | |||
The Company’s investments in fixed maturities and equity securities are classified as available for sale and are carried at their fair value. 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 fair values of the Company’s available for sale portfolio, excluding limited partnership interests, are determined on the basis of quoted market prices where available. If quoted market prices are not available, the Company uses third party pricing services to assist in determining fair value. In many instances, these services examine the pricing of similar instruments to estimate fair value. The Company purchases bonds with the expectation of holding them to their maturity; however, changes to the portfolio are sometimes required to assure it is appropriately matched to liabilities. In addition, changes in financial market conditions and tax considerations may cause the Company to sell an investment before it matures. The difference between amortized cost and fair value of the Company’s available for sale investments, net of the effect of deferred income taxes, is reflected in accumulated other comprehensive income in shareholders’ equity and, accordingly, has no effect on net income other than for the credit loss component of impairments deemed to be other than temporary. | |||
The Company’s investments in other invested assets are comprised of limited liability partnership interests and are carried at their fair value. The change in the difference between cost and the fair value of the partnership interests, net of the effect of deferred income taxes, is reflected in accumulated other comprehensive income in shareholders’ equity and, accordingly, has no effect on net income other than for impairments deemed to be other than temporary. | |||
The Company’s investments in other invested assets were valued at $33.7 million and $3.5 million as of December 31, 2014 and 2013, respectively. Both of these amounts relate to investments in limited partnerships. The Company does not have access to daily valuations, therefore; the estimated fair value of the limited partnerships are measured utilizing net asset value as a practical expedient for the limited partnerships. | |||
Net realized gains and losses on investments are determined based on the specific identification method. | |||
The Company regularly performs various analytical valuation procedures with respect to its investments, including reviewing each fixed maturity security in an unrealized loss position to assess whether the security is a candidate for credit loss. Specifically, the Company considers credit rating, market price, and issuer specific financial information, among other factors, to assess the likelihood of collection of all principal and interest as contractually due. Securities for which the Company determines that a credit loss is likely are subjected to further analysis through discounted cash flow testing to estimate the credit loss to be recognized in earnings, if any. The specific methodologies and significant assumptions used by asset class are discussed below. Upon identification of such securities and periodically thereafter, a detailed review is performed to determine whether the decline is considered other than temporary. This review includes an analysis of several factors, including but not limited to, the credit ratings and cash flows of the securities and the magnitude and length of time that the fair value of such securities is below cost. | |||
For fixed maturities, the factors considered in reaching the conclusion that a decline below cost is other than temporary include, among others, whether: | |||
-1 | the issuer is in financial distress; | ||
-2 | the investment is secured; | ||
-3 | a significant credit rating action occurred; | ||
-4 | scheduled interest payments were delayed or missed; | ||
-5 | changes in laws or regulations have affected an issuer or industry; | ||
-6 | the investment has an unrealized loss and was identified by the Company’s investment manager as an investment to be sold before recovery or maturity; and | ||
-7 | the investment failed cash flow projection testing to determine if anticipated principal and interest payments will be realized. | ||
According to accounting guidance for debt securities in an unrealized loss position, the Company is required to assess whether it has the intent to sell the debt security or more likely than not will be required to sell the debt security before the anticipated recovery. If either of these conditions is met the Company must recognize an other than temporary impairment with the entire unrealized loss being recorded through earnings. For debt securities in an unrealized loss position not meeting these conditions, the Company assesses whether the impairment of a security is other than temporary. If the impairment is deemed to be other than temporary, the Company must separate the other than temporary impairment into two components: the amount representing the credit loss and the amount related to all other factors, such as changes in interest rates. The credit loss represents the portion of the amortized book value in excess of the net present value of the projected future cash flows discounted at the effective interest rate implicit in the debt security prior to impairment. The credit loss component of the other than temporary impairment is recorded through earnings, whereas the amount relating to factors other than credit losses is recorded in other comprehensive income, net of taxes. | |||
For equity securities, management carefully reviews all securities with unrealized losses to determine if a security should be impaired and further focuses on securities that have either: | |||
-1 | persisted with unrealized losses for more than twelve consecutive months or | ||
-2 | the value of the investment has been 20% or more below cost for six continuous months or more. | ||
The amount of any write-down, including those that are deemed to be other than temporary, is included in earnings as a realized loss in the period in which the impairment arose. | |||
For an analysis of other than temporary losses that were recorded for the years ended December 31, 2014, 2013, and 2012, please see Note 3 below. | |||
Cash and Cash Equivalents | |||
For the purpose of the statements of cash flows, the Company considers all liquid instruments with an original maturity of three months or less to be cash equivalents. The Company has a cash management program that provides for the investment of excess cash balances primarily in short-term money market instruments. Generally, bank balances exceed federally insured limits. The carrying amount of cash and cash equivalents approximates fair value. | |||
At December 31, 2014, the Company had approximately $39.1 million of cash and cash equivalents that was invested in a diversified portfolio of high quality short-term debt securities. | |||
Valuation of Premium Receivable | |||
The Company evaluates the collectability of premium receivable based on a combination of factors. In instances in which the Company is aware of a specific circumstance where a party may be unable to meet its financial obligations to the Company, a specific allowance for bad debts against amounts due is recorded to reduce the net receivable to the amount reasonably believed by management to be collectible. For all remaining balances, allowances are recognized for bad debts based on the length of time the receivables are past due. The allowance for bad debts was $1.5 million and $1.8 million as of December 31, 2014 and 2013, respectively. | |||
Goodwill and Intangible Assets | |||
The Company tests for impairment of goodwill at least annually and more frequently as circumstances warrant in accordance with applicable accounting guidance. Accounting guidance allows for the testing of goodwill for impairment using both qualitative and quantitative factors. Impairment of goodwill is recognized only if the carrying amount of the reporting unit, including goodwill, exceeds the fair value of the reporting unit. The amount of the impairment loss would be equal to the excess carrying value of the goodwill over the implied fair value of the reporting unit goodwill. Based on the qualitative assessment performed in 2014, there was no impairment of goodwill as of December 31, 2014. | |||
Impairment of intangible assets with an indefinite useful life is tested at least annually and more frequently as circumstances warrant in accordance with applicable accounting guidance. Accounting guidance allows for the testing of indefinite lived intangible assets for impairment using both qualitative and quantitative factors. Impairment of indefinite lived intangible assets is recognized only if the carrying amount of the intangible assets exceeds the fair value of said assets. The amount of the impairment loss would be equal to the excess carrying value of the assets over the fair value of said assets. Based on the qualitative assessment performed in 2014, there were no impairments of indefinite lived intangible assets as of December 31, 2014. | |||
Intangible assets that are not deemed to have an indefinite useful life are amortized over their estimated useful lives. The carrying amounts of definite lived intangible assets are regularly reviewed for indicators of impairment in accordance with applicable accounting guidance. Impairment is recognized only if the carrying amount of the intangible asset is in excess of its undiscounted projected cash flows. The impairment is measured as the difference between the carrying amount and the estimated fair value of the asset. As of December 31, 2014, there were no triggering events that occurred during the year that would result in an impairment of definite lived intangible assets. | |||
Reinsurance | |||
In the normal course of business, the Company seeks to reduce the loss that may arise from events that cause unfavorable underwriting results by reinsuring certain levels of risk from various areas of exposure with reinsurers. Amounts receivable from reinsurers are estimated in a manner consistent with the reinsured policy and the reinsurance contract. | |||
The Company regularly reviews the collectability of reinsurance receivables. An allowance for uncollectible reinsurance receivable is recognized based on the financial strength of the reinsurers and the length of time any balances are past due. Any changes in the allowance resulting from this review are included in income during the period in which the determination is made. The allowance for uncollectible reinsurance was $9.4 million and $9.0 million as of December 31, 2014 and 2013, respectively. | |||
The applicable accounting guidance requires that the reinsurer must assume significant insurance risk under the reinsured portions of the underlying insurance contracts and that there must be a reasonably possible chance that the reinsurer may realize a significant loss from the transaction. The Company has evaluated its reinsurance contracts and concluded that each contract qualifies for reinsurance accounting treatment pursuant to this guidance. | |||
Income Taxes | |||
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. | |||
A valuation allowance is provided when it is more likely than not that some portion of the deferred tax assets will not be realized. The deferred tax asset balance is analyzed regularly by management. This assessment requires significant judgment and considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of carryforward periods, and tax planning strategies and/or actions. Management believes that it is more likely than not that the results of future operations will generate sufficient taxable income to realize the remaining deferred income tax assets, and accordingly, the Company has not established any valuation allowances. | |||
Deferred Acquisition Costs | |||
The costs of acquiring new and renewal insurance and reinsurance contracts include commissions, premium taxes and certain other costs that vary with and are directly related to the successful acquisition of new and renewal insurance and reinsurance contracts. The excess of the Company’s costs of acquiring new and renewal insurance and reinsurance contracts over the related ceding commissions earned from reinsurers is capitalized as deferred acquisition costs and amortized over the period in which the related premiums are earned. | |||
The amortization of deferred acquisition costs for the years ended December 31, 2014, 2013, and 2012 was $57.1 million, $53.8 million, and $48.9 million, respectively. | |||
Premium Deficiency | |||
In accordance with accounting guidance for insurance enterprises, the method followed in computing deferred acquisition costs limits them to their estimated realizable value that gives effect to the premium to be earned, related investment income, losses and loss adjustment expenses, and certain other costs expected to be incurred as the premium is earned. A premium deficiency is recognized if the sum of expected loss and loss adjustment expenses and unamortized acquisition costs exceeds related unearned premium after consideration of investment income. This evaluation is done at a product line level in Insurance Operations and at a treaty level in Reinsurance Operations. Any future expected loss on the related unearned premium is recorded first by impairing the unamortized acquisition costs on the related unearned premium followed by an increase to loss and loss adjustment expense reserves on additional expected loss in excess of unamortized acquisition costs. | |||
For the years ended December 31, 2014, 2013, and 2012, the total premium deficiency charges were $0.4 million, $1.7 million, and $0.5 million, respectively, comprised solely of reductions to unamortized deferred acquisition costs within the commercial automobile lines in Insurance Operations. The 2013 premium deficiency charge of $1.7 million was recorded as of September 30, 2013. Based on the Company’s analysis, the Company expensed acquisition cost as incurred for the remainder of 2013 and 2014 for the commercial automobile lines in Insurance Operations. The 2012 premium deficiency charge was recorded as of December 31, 2012. As the charges were a reduction of unamortized deferred acquisition costs in each respective period, no premium deficiency reserve exists as of December 31, 2014 or 2013. | |||
Derivative Instruments | |||
The Company uses derivative instruments to manage its exposure to cash flow variability from interest rate risk. The derivative instruments are carried on the balance sheet at fair value and included in other assets or other liabilities. Changes in the fair value of the derivative instruments and the periodic net interest settlements under the derivatives instruments are recognized as net realized investment gains on the consolidated statement of operations. | |||
Margin Borrowing Facilities | |||
The carrying amounts reported in the balance sheet represent the outstanding borrowings. The outstanding borrowings are due on demand; therefore, the cash receipts and cash payments related to the margin borrowing facilities are shown net in the consolidated statement of cash flows. | |||
Notes and Debentures Payable | |||
In 2013, the Company repaid the entire outstanding principal due on the junior subordinated debentures. The Company’s business trust subsidiaries were cancelled in the 4th quarter of 2013. | |||
Unpaid Losses and Loss Adjustment Expenses | |||
The liability for unpaid losses and loss adjustment expenses represents the Company’s best estimate of future amounts needed to pay losses and related settlement expenses with respect to events insured by the Company. This liability is based upon the accumulation of individual case estimates for losses reported prior to the close of the accounting period with respect to direct business, estimates received from ceding companies with respect to assumed reinsurance, and estimates of unreported losses. | |||
The process of establishing the liability for unpaid losses and loss adjustment expenses of a property and casualty insurance company is complex, requiring the use of informed actuarially based estimates and management’s judgment. In some cases, significant periods of time, up to several years or more, may elapse between the occurrence of an insured loss and the reporting of that loss to the Company. To establish this liability, the Company regularly reviews and updates the methods of making such estimates and establishing the resulting liabilities. Any resulting adjustments are recorded in income during the period in which the determination is made. | |||
Premiums | |||
Premiums are recognized as revenue ratably over the term of the respective policies and treaties. Unearned premiums are computed on a pro rata basis to the day of expiration. | |||
Contingent Commissions | |||
Certain professional general agencies of the Insurance Operations are paid special incentives, referred to as contingent commissions, when results of business produced by these agencies are more favorable than predetermined thresholds. Similarly, in some circumstances, companies that cede business to the Reinsurance Operations are paid profit commissions based on the profitability of the ceded portfolio. These commissions are charged to other underwriting expenses when incurred. The liability for the unpaid portion of these commissions, which is stated separately on the face of the consolidated balance sheet as contingent commissions, was $13.0 million and $12.7 million as of December 31, 2014 and 2013, respectively. | |||
Share-Based Compensation | |||
The Company accounts for stock options and other equity based compensation using the modified prospective application of the fair value-based method permitted by the appropriate accounting guidance. See Note 14 for details. | |||
Earnings per Share | |||
Basic earnings per share have been calculated by dividing net income available to common shareholders by the weighted-average ordinary shares outstanding. Diluted earnings per share has been calculated by dividing net income available to common shareholders by the sum of the weighted-average ordinary shares outstanding and the weighted-average common share equivalents outstanding, which include options and other equity awards. See Note 16 for details. | |||
Foreign Currency | |||
The Company maintains investments and cash accounts in foreign currencies related to the operations of its business. At period-end, the Company re-measures non-U.S. currency financial assets to their current U.S. dollar equivalent. The resulting gain or loss for foreign denominated investments is reflected in accumulated other comprehensive income in shareholders’ equity; whereas, the gain or loss on foreign denominated cash accounts is reflected in income during the period. Financial liabilities, if any, are generally adjusted within the reserving process. However, for known losses on claims to be paid in foreign currencies, the Company re-measures the liabilities to their current U.S. dollar equivalent each period end with the resulting gain or loss reflected in income during the period. Net transaction gains, primarily comprised of re-measurement of known losses on claims to be paid in foreign currencies, were $0.5 million and $0.3 million for the years ended December 31, 2014 and 2013, respectively. Net transaction losses, primarily comprised of re-measurement of known losses on claims to be paid in foreign currencies, were $0.7 million for the year ended December 31, 2012. | |||
Out-of-Period Adjustment | |||
During the preparation of the Company’s consolidated financial statements for the year ended December 31, 2012, the Company identified an error in the consolidated financial statements as of and for the years ended December 31, 2011, 2010 and 2009 related to the recognition of incurred losses on two of the assumed reinsurance treaties at the Company’s Reinsurance Operations. These contracts relate to accident years 2009 and 2010 and have not been renewed. During the years ended December 31, 2009, 2010 and 2011, the Company’s internal calculations over-recorded the profitability of these two treaties, resulting in net income and equity being overstated by approximately $1.6 million over the three year period. There was no impact to the Company’s cash flows during these periods. | |||
The Company corrected this error in its consolidated financial statements as of and for the year ended December 31, 2012 by increasing the “Unpaid losses and loss adjustment expenses” line item on the consolidated balance sheet and the “Net losses and loss adjustment expenses” line item on the consolidated statement of operations by $1.6 million, or $0.06 per diluted share, the cumulative effect of the error. The Company does not believe that these adjustments are material to any prior years’ consolidated financial statements. As a result, the Company has not restated or adjusted any prior period amounts for this error. | |||
Other income (loss) | |||
On December 31, 2013, Diamond State Insurance Company sold all the outstanding shares of capital stock of one of its wholly owned subsidiaries, United National Casualty Insurance Company to an unrelated party. Diamond State Insurance Company received a one-time payment of $26.6 million and recognized a pretax gain of $5.2 million which is reflected in other income (loss). Management deemed this transaction to be an asset sale with the assets primarily comprised of investments and insurance licenses. This transaction did not have a significant impact on the ongoing business operations of the Company. |
Investments
Investments | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Investments | 3 | Investments | |||||||||||||||||||||||
The amortized cost and estimated fair value of investments were as follows as of December 31, 2014 and 2013: | |||||||||||||||||||||||||
(Dollars in thousands) | Amortized | Gross | Gross | Estimated | Other than | ||||||||||||||||||||
Cost | Unrealized | Unrealized | Fair Value | temporary | |||||||||||||||||||||
Gains | Losses | impairments | |||||||||||||||||||||||
recognized | |||||||||||||||||||||||||
in AOCI (1) | |||||||||||||||||||||||||
As of December 31, 2014 | |||||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||||
U.S. treasury and agency obligations | $ | 78,569 | $ | 2,281 | $ | (83 | ) | $ | 80,767 | $ | — | ||||||||||||||
Obligations of states and political subdivisions | 188,452 | 3,718 | (697 | ) | 191,473 | — | |||||||||||||||||||
Mortgage-backed securities | 205,814 | 3,709 | (764 | ) | 208,759 | (4 | ) | ||||||||||||||||||
Asset-backed securities | 177,853 | 713 | (303 | ) | 178,263 | (13 | ) | ||||||||||||||||||
Commercial mortgage-backed securities | 133,984 | 21 | (847 | ) | 133,158 | — | |||||||||||||||||||
Corporate bonds | 380,704 | 3,421 | (709 | ) | 383,416 | — | |||||||||||||||||||
Foreign corporate bonds | 107,572 | 625 | (558 | ) | 107,639 | — | |||||||||||||||||||
Total fixed maturities | 1,272,948 | 14,488 | (3,961 | ) | 1,283,475 | (17 | ) | ||||||||||||||||||
Common stock | 99,297 | 25,689 | (2,938 | ) | 122,048 | — | |||||||||||||||||||
Other invested assets | 33,174 | 489 | — | 33,663 | — | ||||||||||||||||||||
Total | $ | 1,405,419 | $ | 40,666 | $ | (6,899 | ) | $ | 1,439,186 | $ | (17 | ) | |||||||||||||
-1 | Represents the total amount of other than temporary impairment losses relating to factors other than credit losses recognized in accumulated other comprehensive income (“AOCI”). | ||||||||||||||||||||||||
(Dollars in thousands) | Amortized | Gross | Gross | Estimated | Other than | ||||||||||||||||||||
Cost | Unrealized | Unrealized | Fair Value | temporary | |||||||||||||||||||||
Gains | Losses | impairments | |||||||||||||||||||||||
recognized | |||||||||||||||||||||||||
in AOCI (2) | |||||||||||||||||||||||||
As of December 31, 2013 | |||||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||||
U.S. treasury and agency obligations | $ | 78,510 | $ | 3,330 | $ | (166 | ) | $ | 81,674 | $ | — | ||||||||||||||
Obligations of states and political subdivisions | 178,705 | 4,472 | (2,241 | ) | 180,936 | — | |||||||||||||||||||
Mortgage-backed securities | 228,550 | 4,219 | (2,859 | ) | 229,910 | (5 | ) | ||||||||||||||||||
Asset-backed securities | 167,454 | 1,210 | (228 | ) | 168,436 | (19 | ) | ||||||||||||||||||
Commercial mortgage-backed securities | 54,822 | 9 | (856 | ) | 53,975 | — | |||||||||||||||||||
Corporate bonds and loans | 426,872 | 9,112 | (592 | ) | 435,392 | — | |||||||||||||||||||
Foreign corporate bonds | 52,772 | 1,269 | — | 54,041 | — | ||||||||||||||||||||
Total fixed maturities | 1,187,685 | 23,621 | (6,942 | ) | 1,204,364 | (24 | ) | ||||||||||||||||||
Common stock | 191,425 | 63,281 | (636 | ) | 254,070 | — | |||||||||||||||||||
Other invested assets | 3,065 | 424 | — | 3,489 | — | ||||||||||||||||||||
Total | $ | 1,382,175 | $ | 87,326 | $ | (7,578 | ) | $ | 1,461,923 | $ | (24 | ) | |||||||||||||
-2 | Represents the total amount of other than temporary impairment losses relating to factors other than credit losses recognized in accumulated other comprehensive income (“AOCI”). | ||||||||||||||||||||||||
Excluding U.S. treasuries and agency bonds, the Company did not hold any debt or equity investments in a single issuer that was in excess of 4% of shareholders’ equity at December 31, 2014 or 2013, respectively. | |||||||||||||||||||||||||
The amortized cost and estimated fair value of the Company’s fixed maturities portfolio classified as available for sale at December 31, 2014, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. | |||||||||||||||||||||||||
(Dollars in thousands) | Amortized | Estimated | |||||||||||||||||||||||
Cost | Fair Value | ||||||||||||||||||||||||
Due in one year or less | $ | 133,140 | $ | 134,722 | |||||||||||||||||||||
Due in one year through five years | 546,653 | 552,135 | |||||||||||||||||||||||
Due in five years through ten years | 41,831 | 42,469 | |||||||||||||||||||||||
Due in ten years through fifteen years | 11,228 | 11,316 | |||||||||||||||||||||||
Due after fifteen years | 22,445 | 22,653 | |||||||||||||||||||||||
Mortgage-backed securities | 205,814 | 208,759 | |||||||||||||||||||||||
Asset-backed securities | 177,853 | 178,263 | |||||||||||||||||||||||
Commercial mortgage-backed securities | 133,984 | 133,158 | |||||||||||||||||||||||
Total | $ | 1,272,948 | $ | 1,283,475 | |||||||||||||||||||||
The following table contains an analysis of the Company’s securities with gross unrealized losses, categorized by the period that the securities were in a continuous loss position as of December 31, 2014: | |||||||||||||||||||||||||
Less than 12 months | 12 months or longer (1) | Total | |||||||||||||||||||||||
(Dollars in thousands) | Fair Value | Gross | Fair | Gross | Fair Value | Gross | |||||||||||||||||||
Unrealized | Value | Unrealized | Unrealized | ||||||||||||||||||||||
Losses | Losses | Losses | |||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||||
U.S. treasury and agency obligations | $ | 11,728 | $ | (9 | ) | $ | 3,343 | $ | (74 | ) | $ | 15,071 | $ | (83 | ) | ||||||||||
Obligations of states and political subdivisions | 28,684 | (314 | ) | 28,061 | (383 | ) | 56,745 | (697 | ) | ||||||||||||||||
Mortgage-backed securities | 2,818 | (7 | ) | 51,203 | (757 | ) | 54,021 | (764 | ) | ||||||||||||||||
Asset-backed securities | 92,123 | (283 | ) | 1,683 | (20 | ) | 93,806 | (303 | ) | ||||||||||||||||
Commercial mortgage-backed securities | 92,664 | (525 | ) | 26,280 | (322 | ) | 118,944 | (847 | ) | ||||||||||||||||
Corporate bonds | 144,505 | (656 | ) | 3,216 | (53 | ) | 147,721 | (709 | ) | ||||||||||||||||
Foreign corporate bonds | 60,518 | (558 | ) | — | — | 60,518 | (558 | ) | |||||||||||||||||
Total fixed maturities | 433,040 | (2,352 | ) | 113,786 | (1,609 | ) | 546,826 | (3,961 | ) | ||||||||||||||||
Common stock | 20,002 | (2,808 | ) | 1,577 | (130 | ) | 21,579 | (2,938 | ) | ||||||||||||||||
Total | $ | 453,042 | $ | (5,160 | ) | $ | 115,363 | $ | (1,739 | ) | $ | 568,405 | $ | (6,899 | ) | ||||||||||
-1 | Fixed maturities in a gross unrealized loss position for twelve months or longer are primarily comprised of non-credit losses on investment grade securities where management does not intend to sell, and it is more likely than not that the Company will not be forced to sell the security before recovery. The Company has analyzed these securities and has determined that they are not other than temporarily impaired. | ||||||||||||||||||||||||
The following table contains an analysis of the Company’s securities with gross unrealized losses, categorized by the period that the securities were in a continuous loss position as of December 31, 2013: | |||||||||||||||||||||||||
Less than 12 months | 12 months or longer (1) | Total | |||||||||||||||||||||||
(Dollars in thousands) | Fair Value | Gross | Fair | Gross | Fair Value | Gross | |||||||||||||||||||
Unrealized | Value | Unrealized | Unrealized | ||||||||||||||||||||||
Losses | Losses | Losses | |||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||||
U.S. treasury and agency obligations | $ | 9,335 | $ | (166 | ) | $ | — | $ | — | $ | 9,335 | $ | (166 | ) | |||||||||||
Obligations of states and political subdivisions | 61,401 | (2,000 | ) | 9,922 | (241 | ) | 71,323 | (2,241 | ) | ||||||||||||||||
Mortgage-backed securities | 110,304 | (2,859 | ) | 2 | — | 110,306 | (2,859 | ) | |||||||||||||||||
Asset-backed securities | 42,247 | (228 | ) | 3 | — | 42,250 | (228 | ) | |||||||||||||||||
Commercial mortgage-backed securities | 45,642 | (856 | ) | — | — | 45,642 | (856 | ) | |||||||||||||||||
Corporate bonds and loans | 60,306 | (582 | ) | 376 | (10 | ) | 60,682 | (592 | ) | ||||||||||||||||
Total fixed maturities | 329,235 | (6,691 | ) | 10,303 | (251 | ) | 339,538 | (6,942 | ) | ||||||||||||||||
Common stock | 18,622 | (627 | ) | 140 | (9 | ) | 18,762 | (636 | ) | ||||||||||||||||
Total | $ | 347,857 | $ | (7,318 | ) | $ | 10,443 | $ | (260 | ) | $ | 358,300 | $ | (7,578 | ) | ||||||||||
-2 | Fixed maturities in a gross unrealized loss position for twelve months or longer are primarily comprised of non-credit losses on investment grade securities where management does not intend to sell, and it is more likely than not that the Company will not be forced to sell the security before recovery. The Company has analyzed these securities and has determined that they are not other than temporarily impaired. | ||||||||||||||||||||||||
Subject to the risks and uncertainties in evaluating the potential impairment of a security’s value, the impairment evaluation conducted by the Company as of December 31, 2014 concluded the unrealized losses discussed above are not other than temporary impairments. The impairment evaluation process is discussed in the “Investment” section of Note 2 (“Summary of Significant Accounting Policies”). | |||||||||||||||||||||||||
The following is a description, by asset type, of the methodology and significant inputs that the Company used to measure the amount of credit loss recognized in earnings, if any: | |||||||||||||||||||||||||
U.S. treasury and agency obligations—As of December 31, 2014, gross unrealized losses related to U.S. treasury and agency obligations were $0.083 million. Of this amount, $0.074 million have been in an unrealized loss position for twelve months or greater and are rated AA+ or better. Macroeconomic and market analysis is conducted in evaluating these securities. The analysis is driven by moderate interest rate anticipation, yield curve management, and security selection. | |||||||||||||||||||||||||
Obligations of states and political subdivisions—As of December 31, 2014, gross unrealized losses related to obligations of states and political subdivisions were $0.697 million. Of this amount, $0.383 million have been in an unrealized loss position for twelve months or greater and are rated A- or better. All factors that influence performance of the municipal bond market are considered in evaluating these securities. The aforementioned factors include investor expectations, supply and demand patterns, and current versus historical yield and spread relationships. The analysis relies on the output of fixed income credit analysts, as well as dedicated municipal bond analysts who perform extensive in-house fundamental analysis on each issuer, regardless of their rating by the major agencies. | |||||||||||||||||||||||||
Mortgage-backed securities (“MBS”)—As of December 31, 2014, gross unrealized losses related to mortgage-backed securities were $0.764 million. Of this amount, $0.757 million have been in an unrealized loss position for twelve months or greater and are rated AA+. Mortgage-backed securities are modeled to project principal losses under downside, base, and upside scenarios for the economy and home prices. The primary assumption that drives the security and loan level modeling is the Home Price Index (“HPI”) projection. The model first projects HPI at the national level, then at the zip-code level based on the historical relationship between the individual zip code HPI and the national HPI. The model utilizes loan level data and borrower characteristics including FICO score, geographic location, original and current loan size, loan age, mortgage rate and type (fixed rate / interest-only / adjustable rate mortgage), issuer / originator, residential type (owner occupied / investor property), dwelling type (single family / multi-family), loan purpose, level of documentation, and delinquency status as inputs. The model also includes the explicit treatment of silent second liens, utilization of loan modification history, and the application of roll rate adjustments. | |||||||||||||||||||||||||
Asset backed securities (“ABS”)—As of December 31, 2014, gross unrealized losses related to asset backed securities were $0.303 million. Of this amount, $0.020 million have been in an unrealized loss position for twelve months or greater and are rated A or better. The weighted average credit enhancement for the Company’s asset backed portfolio is 20.5. This represents the percentage of pool losses that can occur before an asset backed security will incur its first dollar of principal losses. Every ABS transaction is analyzed on a stand-alone basis. This analysis involves a thorough review of the collateral, prepayment, and structural risk in each transaction. Additionally, the analysis includes an in-depth credit analysis of the originator and servicer of the collateral. The analysis projects an expected loss for a deal given a set of assumptions specific to the asset type. These assumptions are used to calculate at what level of losses the deal will incur its first dollar of principal loss. The major assumptions used to calculate this ratio are loss severities, recovery lags, and no advances on principal and interest. | |||||||||||||||||||||||||
Commercial mortgage-backed securities (“CMBS”)—As of December 31, 2014, gross unrealized losses related to the CMBS portfolio were $0.847 million. Of this amount, $0.322 million have been in an unrealized loss position for twelve months or greater and are rated AA or better. The weighted average credit enhancement for the Company’s CMBS portfolio is 33.5. This represents the percentage of pool losses that can occur before a mortgage-backed security will incur its first dollar of principal loss. For the Company’s CMBS portfolio, a loan level analysis is utilized where every underlying CMBS loan is re-underwritten based on a set of assumptions reflecting expectations for the future path of the economy. In the analysis, the focus is centered on stressing the significant variables that influence commercial loan defaults and collateral losses in CMBS deals. These variables include: (1) a projected drop in occupancies; (2) capitalization rates that vary by property type and are forecasted to return to more normalized levels as the capital markets repair and capital begins to flow again; and (3) property value stress testing using projected property performance and projected capitalization rates. Term risk is triggered if the projected debt service coverage rate falls below 1x. Balloon risk is triggered if a property’s projected performance does not satisfy new, tighter mortgage standards. | |||||||||||||||||||||||||
Corporate bonds—As of December 31, 2014, gross unrealized losses related to corporate bonds were $0.709 million. Of this amount, $0.053 million have been in an unrealized loss position for twelve months or greater and are rated A+ or better. The analysis for this sector includes maintaining detailed financial models that include a projection of each issuer’s future financial performance, including prospective debt servicing capabilities, capital structure composition, and the value of the collateral. The analysis incorporates the macroeconomic environment, industry conditions in which the issuer operates, the issuer’s current competitive position, its vulnerability to changes in the competitive and regulatory environment, issuer liquidity, issuer commitment to bondholders, issuer creditworthiness, and asset protection. Part of the process also includes running downside scenarios to evaluate the expected likelihood of default as well as potential losses in the event of default. | |||||||||||||||||||||||||
Foreign bonds—As of December 31, 2014, gross unrealized losses related to foreign bonds were $0.558 million. All unrealized losses have been in an unrealized loss position for less than twelve months. 96.2% of the securities in an unrealized loss position are rated investment grade. For this sector, detailed financial models are maintained that include a projection of each issuer’s future financial performance, including prospective debt servicing capabilities, capital structure composition, and the value of the collateral. The analysis incorporates the macroeconomic environment, industry conditions in which the issuer operates, the issuer’s current competitive position, its vulnerability to changes in the competitive and regulatory environment, issuer liquidity, issuer commitment to bondholders, issuer creditworthiness, and asset protection. Part of the process also includes running downside scenarios to evaluate the expected likelihood of default as well as potential losses in the event of default. | |||||||||||||||||||||||||
Common stock—As of December 31, 2014, gross unrealized losses related to common stock were $2.938 million. Of this amount, $0.130 million have been in an unrealized loss position for twelve months or greater. To determine if an other than temporary impairment of an equity security has occurred, the Company considers, among other things, the severity and duration of the decline in fair value of the equity security. The Company also examines other factors to determine if the equity security could recover its value in a reasonable period of time. | |||||||||||||||||||||||||
The Company recorded the following other than temporary impairments (“OTTI”) on its investment portfolio for the years ended December 31, 2014, 2013, and 2012: | |||||||||||||||||||||||||
Years Ended December 31, | |||||||||||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||||
OTTI losses, gross | $ | (31 | ) | $ | (280 | ) | $ | (1,258 | ) | ||||||||||||||||
Portion of loss recognized in other comprehensive income (pre-tax) | — | — | 541 | ||||||||||||||||||||||
Net impairment losses on fixed maturities recognized in earnings | (31 | ) | (280 | ) | (717 | ) | |||||||||||||||||||
Equity securities | (470 | ) | (959 | ) | (4,656 | ) | |||||||||||||||||||
Total | $ | (501 | ) | $ | (1,239 | ) | $ | (5,373 | ) | ||||||||||||||||
The following table is an analysis of the credit losses recognized in earnings on fixed maturities held by the Company as of December 31, 2014, 2013, and 2012 for which a portion of the OTTI loss was recognized in other comprehensive income (loss). | |||||||||||||||||||||||||
Years Ended December 31, | |||||||||||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Balance at beginning of period | $ | 54 | $ | 86 | $ | 86 | |||||||||||||||||||
Additions where no OTTI was previously recorded | — | — | 55 | ||||||||||||||||||||||
Additions where an OTTI was previously recorded | — | — | — | ||||||||||||||||||||||
Reductions for securities for which the company intends to sell or more likely than not will be required to sell before recovery | — | — | — | ||||||||||||||||||||||
Reductions reflecting increases in expected cash flows to be collected | — | — | — | ||||||||||||||||||||||
Reductions for securities sold during the period | (4 | ) | (32 | ) | (55 | ) | |||||||||||||||||||
Balance at end of period | $ | 50 | $ | 54 | $ | 86 | |||||||||||||||||||
Accumulated Other Comprehensive Income, Net of Tax | |||||||||||||||||||||||||
Accumulated other comprehensive income, net of tax, as of December 31, 2014 and 2013 was as follows: | |||||||||||||||||||||||||
(Dollars in thousands) | December 31, | ||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
Net unrealized gains from: | |||||||||||||||||||||||||
Fixed maturities | $ | 10,527 | $ | 16,679 | |||||||||||||||||||||
Common stock | 22,751 | 62,645 | |||||||||||||||||||||||
Other | 369 | 184 | |||||||||||||||||||||||
Deferred taxes | (10,263 | ) | (25,480 | ) | |||||||||||||||||||||
Accumulated other comprehensive income, net of tax | $ | 23,384 | $ | 54,028 | |||||||||||||||||||||
The following tables present the changes in accumulated other comprehensive income, net of tax, by component for the years ended December 31, 2014 and 2013: | |||||||||||||||||||||||||
Year Ended December 31, 2014 | Unrealized Gains | Foreign Currency | Accumulated Other | ||||||||||||||||||||||
(Dollars in thousands) | and Losses on | Items, Net of Tax | Comprehensive | ||||||||||||||||||||||
Available for Sale | Income, Net of Tax | ||||||||||||||||||||||||
Securities, Net of | |||||||||||||||||||||||||
Tax | |||||||||||||||||||||||||
Beginning balance | $ | 53,950 | $ | 78 | $ | 54,028 | |||||||||||||||||||
Other comprehensive income (loss) before reclassification | 6,820 | (287 | ) | 6,533 | |||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | (37,123 | ) | (54 | ) | (37,177 | ) | |||||||||||||||||||
Other comprehensive income (loss) | (30,303 | ) | (341 | ) | (30,644 | ) | |||||||||||||||||||
Ending balance | $ | 23,647 | $ | (263 | ) | $ | 23,384 | ||||||||||||||||||
Year Ended December 31, 2013 | Unrealized Gains | Foreign Currency | Accumulated Other | ||||||||||||||||||||||
(Dollars in thousands) | and Losses on | Items, Net of Tax | Comprehensive | ||||||||||||||||||||||
Available for Sale | Income, Net of Tax | ||||||||||||||||||||||||
Securities, Net of | |||||||||||||||||||||||||
Tax | |||||||||||||||||||||||||
Beginning balance | $ | 53,435 | $ | (85 | ) | $ | 53,350 | ||||||||||||||||||
Other comprehensive income (loss) before reclassification | 17,630 | (1 | ) | 17,629 | |||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | (17,115 | ) | 164 | (16,951 | ) | ||||||||||||||||||||
Other comprehensive income (loss) | 515 | 163 | 678 | ||||||||||||||||||||||
Ending balance | $ | 53,950 | $ | 78 | $ | 54,028 | |||||||||||||||||||
The reclassifications out of accumulated other comprehensive income for the years ended December 31, 2014 and 2013 were as follows: | |||||||||||||||||||||||||
Amounts Reclassified | |||||||||||||||||||||||||
from Accumulated | |||||||||||||||||||||||||
Other Comprehensive | |||||||||||||||||||||||||
Income | |||||||||||||||||||||||||
(Dollars in thousands) | Years Ended | ||||||||||||||||||||||||
Details about Accumulated Other | December 31, | ||||||||||||||||||||||||
Comprehensive Income Components | Affected Line Item in the | 2014 | 2013 | ||||||||||||||||||||||
Consolidated Statements of Operations | |||||||||||||||||||||||||
Unrealized gains and losses on available for sale securities | Other net realized investment gains | $ | (57,114 | ) | $ | (27,476 | ) | ||||||||||||||||||
Other than temporary impairment losses on investments | 501 | 1,239 | |||||||||||||||||||||||
Total before tax | (56,613 | ) | (26,237 | ) | |||||||||||||||||||||
Income tax expense | 19,490 | 9,122 | |||||||||||||||||||||||
Net of tax | $ | (37,123 | ) | $ | (17,115 | ) | |||||||||||||||||||
Foreign Currency Items | Other net realized investment (gains) losses | $ | (83 | ) | 252 | ||||||||||||||||||||
Income tax expense (benefit) | 29 | (88 | ) | ||||||||||||||||||||||
Net of tax | $ | (54 | ) | $ | 164 | ||||||||||||||||||||
Total reclassifications | Net of tax | $ | (37,177 | ) | $ | (16,951 | ) | ||||||||||||||||||
Net Realized Investment Gains | |||||||||||||||||||||||||
The components of net realized investment gains for the years ended December 31, 2014, 2013, and 2012 were as follows: | |||||||||||||||||||||||||
Years Ended December 31, | |||||||||||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||||
Gross realized gains | $ | 2,843 | $ | 1,857 | $ | 4,100 | |||||||||||||||||||
Gross realized losses | (703 | ) | (691 | ) | (1,800 | ) | |||||||||||||||||||
Net realized gains | 2,140 | 1,166 | 2,300 | ||||||||||||||||||||||
Common stock: | |||||||||||||||||||||||||
Gross realized gains | 55,907 | 27,302 | 10,630 | ||||||||||||||||||||||
Gross realized losses | (1,351 | ) | (2,483 | ) | (6,175 | ) | |||||||||||||||||||
Net realized gains | 54,556 | 24,819 | 4,455 | ||||||||||||||||||||||
Derivatives: | |||||||||||||||||||||||||
Gross realized gains | — | 1,668 | — | ||||||||||||||||||||||
Gross realized losses | (20,836 | ) | (241 | ) | — | ||||||||||||||||||||
Net realized gains (losses) | (20,836 | ) | 1,427 | — | |||||||||||||||||||||
Total net realized investment gains | $ | 35,860 | $ | 27,412 | $ | 6,755 | |||||||||||||||||||
The proceeds from sales of available for sale securities resulting in net realized investment gains for the years ended December 31, 2014, 2013, and 2012 were as follows: | |||||||||||||||||||||||||
Years Ended December 31, | |||||||||||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Fixed maturities | $ | 415,739 | $ | 292,200 | $ | 454,655 | |||||||||||||||||||
Equity securities | 191,765 | 101,379 | 50,176 | ||||||||||||||||||||||
Other invested assets | — | — | 1,114 | ||||||||||||||||||||||
Net Investment Income | |||||||||||||||||||||||||
The sources of net investment income for the years ended December 31, 2014, 2013, and 2012 were as follows: | |||||||||||||||||||||||||
Years Ended December 31, | |||||||||||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Fixed maturities | $ | 26,788 | $ | 35,669 | $ | 41,969 | |||||||||||||||||||
Equity securities | 5,484 | 5,452 | 5,132 | ||||||||||||||||||||||
Cash and cash equivalents | 61 | 126 | 111 | ||||||||||||||||||||||
Other invested assets | 87 | 141 | 4,802 | ||||||||||||||||||||||
Total investment income | 32,420 | 41,388 | 52,014 | ||||||||||||||||||||||
Investment expense | (3,599 | ) | (4,179 | ) | (4,457 | ) | |||||||||||||||||||
Net investment income | $ | 28,821 | $ | 37,209 | $ | 47,557 | |||||||||||||||||||
The Company’s total investment return on a pre-tax basis for the years ended December 31, 2014, 2013, and 2012 were as follows: | |||||||||||||||||||||||||
Years Ended December 31, | |||||||||||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Net investment income | $ | 28,821 | $ | 37,209 | $ | 47,557 | |||||||||||||||||||
Net realized investment gains | 35,860 | 27,412 | 6,755 | ||||||||||||||||||||||
Change in unrealized investment gains (losses) | (45,861 | ) | 7,301 | 18,417 | |||||||||||||||||||||
Net realized and unrealized investment returns | (10,001 | ) | 34,713 | 25,172 | |||||||||||||||||||||
Total investment return | $ | 18,820 | $ | 71,922 | $ | 72,729 | |||||||||||||||||||
Total investment return % | 1.2 | % | 4.6 | % | 4.6 | % | |||||||||||||||||||
Average investment portfolio (1) | $ | 1,533,104 | $ | 1,549,747 | $ | 1,590,281 | |||||||||||||||||||
-1 | Average of total cash and invested assets, net of receivable/payable for securities purchased and sold, as of the beginning and end of the period. | ||||||||||||||||||||||||
Insurance Enhanced Asset-Backed and Credit Securities | |||||||||||||||||||||||||
As of December 31, 2014, the Company held insurance enhanced asset-backed and credit securities with a market value of approximately $35.8 million. Approximately $16.4 million of these securities were tax-free municipal bonds, which represented approximately 1.1% of the Company’s total cash and invested assets, net of payable/ receivable for securities purchased and sold. These securities had an average rating of “AA-.” Approximately $6.1 million of these bonds are pre-refunded with U.S. treasury securities, of which $0.1 million are backed by financial guarantors, meaning that funds have been set aside in escrow to satisfy the future interest and principal obligations of the bond. Of the remaining $10.3 million of insurance enhanced municipal bonds, $1.3 million would have carried a lower credit rating had they not been insured. The following table provides a breakdown of the ratings for these municipal bonds with and without insurance. | |||||||||||||||||||||||||
(Dollars in thousands) | Ratings | Ratings | |||||||||||||||||||||||
Rating | with | without | |||||||||||||||||||||||
Insurance | Insurance | ||||||||||||||||||||||||
AAA | $ | 1,251 | $ | — | |||||||||||||||||||||
AA | — | 1,251 | |||||||||||||||||||||||
A | — | — | |||||||||||||||||||||||
Total | $ | 1,251 | $ | 1,251 | |||||||||||||||||||||
A summary of the Company’s insurance enhanced municipal bonds that are backed by financial guarantors, including the pre-refunded bonds that are escrowed in U.S. government obligations, as of December 31, 2014, is as follows: | |||||||||||||||||||||||||
(Dollars in thousands) | Total | Pre-refunded | Government | Exposure Net | |||||||||||||||||||||
Financial Guarantor | Securities | Guaranteed | of Pre-refunded | ||||||||||||||||||||||
Securities | & Government | ||||||||||||||||||||||||
Guaranteed | |||||||||||||||||||||||||
Securities | |||||||||||||||||||||||||
Ambac Financial Group | $ | 1,259 | $ | 141 | $ | 0 | $ | 1,118 | |||||||||||||||||
Assured Guaranty Corporation | 3,757 | 0 | 0 | 3,757 | |||||||||||||||||||||
Municipal Bond Insurance Association | 3,614 | 0 | 0 | 3,614 | |||||||||||||||||||||
Gov’t National Housing Association | 599 | 0 | 599 | 0 | |||||||||||||||||||||
Permanent School Fund Guaranty | 1,251 | 0 | 1,251 | 0 | |||||||||||||||||||||
Total backed by financial guarantors | 10,480 | 141 | 1,850 | 8,489 | |||||||||||||||||||||
Other credit enhanced municipal bonds | 5,926 | 5,926 | 0 | 0 | |||||||||||||||||||||
Total | $ | 16,406 | $ | 6,067 | $ | 1,850 | $ | 8,489 | |||||||||||||||||
In addition to the tax-free municipal bonds, the Company held $19.4 million of asset-backed and taxable municipal bonds, which represented approximately 1.3% of the Company’s total invested assets, net of receivable/payable for securities purchased and sold. The financial guarantors of the Company’s $19.4 million of insurance enhanced asset-backed and taxable municipal securities include Municipal Bond Insurance Association ($11.2 million), Ambac ($1.0 million) and Assured Guaranty Corporation ($7.2 million). | |||||||||||||||||||||||||
The Company had no direct investments in the entities that have provided financial guarantees or other credit support to any security held by the Company at December 31, 2014. | |||||||||||||||||||||||||
Bonds Held on Deposit | |||||||||||||||||||||||||
Certain cash balances, cash equivalents, equity securities, and bonds available for sale were deposited with various governmental authorities in accordance with statutory requirements, were held as collateral pursuant to borrowing arrangements, or were held in trust pursuant to intercompany reinsurance agreements. The fair values were as follows as of December 31, 2014 and 2013: | |||||||||||||||||||||||||
Estimated Fair Value | |||||||||||||||||||||||||
(Dollars in thousands) | December 31, | December 31, | |||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
On deposit with governmental authorities | $ | 32,790 | $ | 36,176 | |||||||||||||||||||||
Intercompany trusts held for the benefit of U.S. policyholders | 495,301 | 584,683 | |||||||||||||||||||||||
Held in trust pursuant to third party requirements | 95,828 | 129,339 | |||||||||||||||||||||||
Letter of credit held for third party requirements | 9,340 | 7,068 | |||||||||||||||||||||||
Securities held as collateral for borrowing arrangements (1) | 222,809 | 120,937 | |||||||||||||||||||||||
Total | $ | 856,068 | $ | 878,203 | |||||||||||||||||||||
-1 | Amount required to collateralize margin borrowing facilities. |
Derivative_Instruments
Derivative Instruments | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
Derivative Instruments | 4 | Derivative Instruments | |||||||||||||||||
Interest rate swaps are used by the Company primarily to reduce risks from changes in interest rates. Under the terms of the interest rate swaps, the Company agrees with another party to exchange, at specified intervals, the difference between fixed rate and floating rate interest amounts as calculated by reference to an agreed notional amount. | |||||||||||||||||||
The Company accounts for the interest rate swaps as non-hedge instruments and recognizes the fair value of the interest rate swaps in other assets or other liabilities on the consolidated balance sheets with the changes in fair value recognized as net realized investment gains in the consolidated statement of operations. The estimated fair value of the interest rate swaps, which is primarily derived from the forward interest rate curve, is based on the valuation received from a third party financial institution. | |||||||||||||||||||
The following table summarizes information on the location and the gross amount of the derivatives’ fair value on the consolidated balance sheets as of December 31, 2014 and 2013: | |||||||||||||||||||
(Dollars in thousands) | Balance Sheet | December 31, 2014 | December 31, 2013 | ||||||||||||||||
Derivatives Not Designated as Hedging | Location | ||||||||||||||||||
Instruments under ASC 815 | Notional | Fair | Notional | Fair Value | |||||||||||||||
Amount | Value | Amount | |||||||||||||||||
Interest rate swap agreements | Other liabilities | $ | 200,000 | $ | (13,675 | ) | $ | — | $ | — | |||||||||
Interest rate swap agreements | Other assets | $ | — | $ | — | $ | 200,000 | $ | 1,668 | ||||||||||
The following table summarizes the net gains (losses) included in the consolidated statement of operations for changes in the fair value of the derivatives and the periodic net interest settlements under the derivatives for the years ended December 31, 2014, 2013, and 2012: | |||||||||||||||||||
(Dollars in thousands) | Statement of Operations Line | Years Ended December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||
Interest rate swap agreements | Net realized investment gains | $ | (20,836 | ) | $ | 1,427 | $ | — | |||||||||||
As of December 31, 2014, the Company is due receivables of $5.4 million for collateral posted and $15.3 million for margin calls made in connection with the interest rate swaps. These amounts are included in other assets on the consolidated balance sheets. |
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Fair Value Measurements | 5 | Fair Value Measurements | |||||||||||||||
The accounting standards related to fair value measurements define fair value, establish a framework for measuring fair value, outline a fair value hierarchy based on inputs used to measure fair value, and enhance disclosure requirements for fair value measurements. These standards do not change existing guidance as to whether or not an instrument is carried at fair value. The Company has determined that its fair value measurements are in accordance with the requirements of these accounting standards. | |||||||||||||||||
The Company’s invested assets and derivative instruments are carried at their fair value and are categorized based upon a fair value hierarchy: | |||||||||||||||||
• | Level 1—inputs utilize quoted prices (unadjusted) in active markets for identical assets that the Company has the ability to access at the measurement date. | ||||||||||||||||
• | Level 2—inputs utilize other than quoted prices included in Level 1 that are observable for similar assets, either directly or indirectly. | ||||||||||||||||
• | Level 3—inputs are unobservable for the asset, and include situations where there is little, if any, market activity for the asset. | ||||||||||||||||
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset. | |||||||||||||||||
Both observable and unobservable inputs may be used to determine the fair value of positions that the Company has classified within the Level 3 category. As a result, the unrealized gains and losses for invested assets within the Level 3 category presented in the tables below may include changes in fair value that are attributed to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long-dated volatilities) inputs. | |||||||||||||||||
The following table presents information about the Company’s invested assets and derivative instruments measured at fair value on a recurring basis as of December 31, 2014 and 2013, and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value. | |||||||||||||||||
As of December 31, 2014 | Fair Value Measurements | ||||||||||||||||
(Dollars in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: | |||||||||||||||||
Fixed maturities: | |||||||||||||||||
U.S. treasury and agency obligations | $ | 74,765 | $ | 6,002 | $ | 0 | $ | 80,767 | |||||||||
Obligations of states and political subdivisions | 0 | 191,473 | 0 | 191,473 | |||||||||||||
Mortgage-backed securities | 0 | 208,759 | 0 | 208,759 | |||||||||||||
Commercial mortgage-backed securities | 0 | 133,158 | 0 | 133,158 | |||||||||||||
Asset-backed securities | 0 | 178,263 | 0 | 178,263 | |||||||||||||
Corporate bonds and loans | 0 | 383,416 | 0 | 383,416 | |||||||||||||
Foreign corporate bonds | 0 | 107,639 | 0 | 107,639 | |||||||||||||
Total fixed maturities | 74,765 | 1,208,710 | 0 | 1,283,475 | |||||||||||||
Common stock | 122,048 | 0 | 0 | 122,048 | |||||||||||||
Other invested assets | 0 | 0 | 33,663 | 33,663 | |||||||||||||
Total assets measured at fair value | $ | 196,813 | $ | 1,208,710 | $ | 33,663 | $ | 1,439,186 | |||||||||
Liabilities: | |||||||||||||||||
Derivative instruments | $ | — | $ | 13,675 | $ | — | $ | 13,675 | |||||||||
Total liabilities measured at fair value | $ | — | $ | 13,675 | $ | — | $ | 13,675 | |||||||||
As of December 31, 2013 | Fair Value Measurements | ||||||||||||||||
(Dollars in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: | |||||||||||||||||
Fixed maturities: | |||||||||||||||||
U.S. treasury and agency obligations | $ | 71,294 | $ | 10,380 | $ | — | $ | 81,674 | |||||||||
Obligations of states and political subdivisions | — | 180,936 | — | 180,936 | |||||||||||||
Mortgage-backed securities | — | 229,910 | — | 229,910 | |||||||||||||
Commercial mortgage-backed securities | — | 53,975 | — | 53,975 | |||||||||||||
Asset-backed securities | — | 168,436 | — | 168,436 | |||||||||||||
Corporate bonds and loans | — | 435,392 | — | 435,392 | |||||||||||||
Foreign corporate bonds | — | 54,041 | — | 54,041 | |||||||||||||
Total fixed maturities | 71,294 | 1,133,070 | — | 1,204,364 | |||||||||||||
Common stock | 254,070 | — | — | 254,070 | |||||||||||||
Other invested assets | — | — | 3,489 | 3,489 | |||||||||||||
Derivative instruments | — | 1,668 | — | 1,668 | |||||||||||||
Total assets measured at fair value | $ | 325,364 | $ | 1,134,738 | $ | 3,489 | $ | 1,463,591 | |||||||||
The securities classified as Level 1 in the above table consist of U.S. Treasuries and equity securities actively traded on an exchange. | |||||||||||||||||
The securities classified as Level 2 in the above table consist primarily of fixed maturity securities and derivative instruments. Based on the typical trading volumes and the lack of quoted market prices for fixed maturities, security prices are derived through recent reported trades for identical or similar securities making adjustments through the reporting date based upon available market observable information. If there are no recent reported trades, matrix or model processes are used to develop a security price where future cash flow expectations are developed based upon collateral performance and discounted at an estimated market rate. Included in the pricing of asset-backed securities, collateralized mortgage obligations, and mortgage-backed securities are estimates of the rate of future prepayments of principal over the remaining life of the securities. Such estimates are derived based on the characteristics of the underlying structure and prepayment speeds previously experienced at the interest rate levels projected for the underlying collateral. For corporate loans, price quotes from multiple dealers along with recent reported trades for identical or similar securities are used to develop prices. The estimated fair value of the interest rate swaps is obtained from a third party financial institution who utilizes observable inputs such as the forward interest rate curve. | |||||||||||||||||
There were no transfers between Level 1 and Level 2 during the years ended December 31, 2014, 2013, and 2012. | |||||||||||||||||
The following tables present the changes in Level 3 investments measured at fair value on a recurring basis for 2014, 2013, and 2012: | |||||||||||||||||
Other Invested Assets | |||||||||||||||||
(Dollars in thousands) | Years Ended December 31, | ||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Beginning balance | $ | 3,489 | $ | 3,132 | $ | 6,617 | |||||||||||
Total gains (losses) (realized / unrealized): | |||||||||||||||||
Included in accumulated other comprehensive income (loss) | 65 | 341 | (2,384 | ) | |||||||||||||
Purchases | 30,121 | 16 | 13 | ||||||||||||||
Distributions | (12 | ) | — | (1,114 | ) | ||||||||||||
Ending balance | $ | 33,663 | $ | 3,489 | $ | 3,132 | |||||||||||
The investments classified as Level 3 in the above table relate to investments in limited partnerships. The Company does not have access to daily valuations; therefore, the estimated fair values of the limited partnerships are measured utilizing net asset value as a practical expedient for the limited partnerships. | |||||||||||||||||
Fair Value of Alternative Investments | |||||||||||||||||
Included in “Other invested assets” in the fair value hierarchy at December 31, 2014 and 2013 are limited liability partnerships measured at fair value. The following table provides the fair value and future funding commitments related to these investments at December 31, 2014 and 2013. | |||||||||||||||||
December 31, 2014 | December 31, 2013 | ||||||||||||||||
(Dollars in thousands) | Fair | Future | Fair | Future | |||||||||||||
Value | Funding | Value | Funding | ||||||||||||||
Commitment | Commitment | ||||||||||||||||
Equity Fund, LP (1) | $ | 3,401 | $ | 2,436 | $ | 3,489 | $ | 2,490 | |||||||||
Real Estate Fund, LP (2) | — | — | — | — | |||||||||||||
European Non-Performing Loan Fund, LP (3) | 30,262 | 20,064 | — | — | |||||||||||||
Total | $ | 33,663 | $ | 22,500 | $ | 3,489 | $ | 2,490 | |||||||||
-1 | This limited partnership invests in companies, from various business sectors, whereby the partnership has acquired control of the operating business as a lead or organizing investor. The Company does not have the contractual option to redeem its limited partnership interest but receives distributions based on the liquidation of the underlying assets. The Company does not have the ability to sell or transfer its limited partnership interest without consent from the general partner. | ||||||||||||||||
-2 | This limited partnership invests in real estate assets through a combination of direct or indirect investments in partnerships, limited liability companies, mortgage loans, and lines of credit. The Company does not have the contractual option to redeem its limited partnership interest but receives distributions based on the liquidation of the underlying assets. The Company does not have the ability to sell or transfer its limited partnership interest without consent from the general partner. The Company continues to hold an investment in this limited partnership and has written the fair value down to zero. | ||||||||||||||||
-3 | This limited partnership invests in distressed securities and assets through senior and subordinated, secured and unsecured debt and equity, in both public and private large-cap and middle-market companies. The Company does not have the contractual option to redeem its limited partnership interest but receives distributions based on the liquidation of the underlying assets. The Company does not have the ability to sell or transfer its limited partnership interest without consent from the general partner. | ||||||||||||||||
Pricing | |||||||||||||||||
The Company’s pricing vendors provide prices for all investment categories except for investments in limited partnerships which are measured utilizing net assets values as a practical expedient. One vendor provides prices for equity securities and all fixed maturity categories. | |||||||||||||||||
The following is a description of the valuation methodologies used by the Company’s pricing vendors for investment securities carried at fair value: | |||||||||||||||||
• | Equity prices are received from all primary and secondary exchanges. | ||||||||||||||||
• | Corporate and agency bonds are evaluated by utilizing a multi-dimensional relational model. For bonds with early redemption options, an option adjusted spread model is utilized. Both asset classes use standard inputs and incorporate security set up, defined sector breakdown, benchmark yields, apply base spreads, yield to maturity, and adjust for corporate actions. | ||||||||||||||||
• | A volatility-driven multi-dimensional spread table or an option-adjusted spread model and prepayment model is used for agency commercial mortgage obligations (“CMO”). For non-agency CMOs, a prepayment/spread/yield/price adjustment model is utilized. CMOs are categorized with mortgage-backed securities in the tables listed above. For ABSs, a multi-dimensional, collateral specific spread / prepayment speed tables is utilized. For both asset classes, evaluations utilize standard inputs plus new issue data, monthly payment information, and collateral performance. The evaluated pricing models incorporate security set-up, prepayment speeds, cash flows, and treasury swap curves and spread adjustments. | ||||||||||||||||
• | For municipals, a multi-dimensional relational model is used to evaluate securities within this asset class. The evaluated pricing models for this asset class incorporate security set-up, benchmark yields, apply base spreads, yield to worst or market convention, ratings updates, prepayment schedules and adjustments for material events notices. | ||||||||||||||||
• | U.S. treasuries are evaluated by obtaining feeds from a number of live data sources including active market makers and inter-dealer brokers. | ||||||||||||||||
• | For MBSs, a matrix model correlation to TBA (a forward MBS trade) or benchmarking is utilized to value a security. | ||||||||||||||||
The Company performs certain procedures to validate whether the pricing information received from the pricing vendors is reasonable, to ensure that the fair value determination is consistent with accounting guidance, and to ensure that its assets are properly classified in the fair value hierarchy. The Company’s procedures include, but are not limited to: | |||||||||||||||||
• | Reviewing periodic reports provided by the Investment Manager that provides information regarding rating changes and securities placed on watch. This procedure allows the Company to understand why a particular security’s market value may have changed. | ||||||||||||||||
• | Understanding and periodically evaluating the various pricing methods and procedures used by the Company’s pricing vendors to ensure that investments are properly classified within the fair value hierarchy. | ||||||||||||||||
• | On a quarterly basis, the Company corroborates investment security prices received from its pricing vendors by obtaining pricing from a second pricing vendor for a sample of securities. | ||||||||||||||||
During 2014 or 2013, the Company has not adjusted quotes or prices obtained from the pricing vendors. |
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Goodwill and Intangible Assets | 6 | Goodwill and Intangible Assets | |||||||||||||||
Goodwill and intangible assets relate to Insurance Operations. | |||||||||||||||||
Goodwill | |||||||||||||||||
As of December 31, 2014 and 2013, the Company has goodwill of $4.8 million as a result of a 2010 acquisition, which represents the excess purchase price over the Company’s best estimate of the fair value of the assets acquired. Impairment testing performed in 2014 and 2013 did not result in impairment of the goodwill acquired. | |||||||||||||||||
Intangible assets | |||||||||||||||||
The following table presents details of the Company’s intangible assets as of December 31, 2014: | |||||||||||||||||
(Dollars in thousands) | Useful Life | Cost | Accumulated | Net | |||||||||||||
Description | Amortization | Value | |||||||||||||||
Trademarks | Indefinite | $ | 4,800 | $ | — | $ | 4,800 | ||||||||||
Trade names | Indefinite | 4,200 | — | 4,200 | |||||||||||||
State insurance licenses | Indefinite | 5,000 | — | 5,000 | |||||||||||||
Customer relationships | 15 years | 5,300 | 1,664 | 3,636 | |||||||||||||
Non-compete agreements | 2 years | 50 | 50 | — | |||||||||||||
$ | 19,350 | $ | 1,714 | $ | 17,636 | ||||||||||||
The following table presents details of the Company’s intangible assets as of December 31, 2013: | |||||||||||||||||
(Dollars in thousands) | Useful Life | Cost | Accumulated | Net | |||||||||||||
Description | Amortization | Value | |||||||||||||||
Trademarks | Indefinite | $ | 4,800 | $ | — | $ | 4,800 | ||||||||||
Trade names | Indefinite | 4,200 | — | 4,200 | |||||||||||||
State insurance licenses | Indefinite | 5,000 | — | 5,000 | |||||||||||||
Customer relationships | 15 years | 5,300 | 1,310 | 3,990 | |||||||||||||
Non-compete agreements | 2 years | 50 | 50 | — | |||||||||||||
$ | 19,350 | $ | 1,360 | $ | 17,990 | ||||||||||||
Amortization related to the Company’s definite lived intangible assets was $0.4 million in each of the years ended December 31, 2014, 2013 and 2012. | |||||||||||||||||
The Company expects that amortization expense for the next five years related to the 2010 acquisition will be as follows: | |||||||||||||||||
(Dollars in thousands) | |||||||||||||||||
2015 | (353 | ) | |||||||||||||||
2016 | (353 | ) | |||||||||||||||
2017 | (353 | ) | |||||||||||||||
2018 | (353 | ) | |||||||||||||||
2019 | (353 | ) | |||||||||||||||
Intangible assets with indefinite lives | |||||||||||||||||
As of December 31, 2014 and 2013, indefinite lived intangible assets, which are comprised of trade names, trademarks, and state insurance licenses, were $14.0 million. The Company reviewed internal business unit results, the growth of competitors and the overall property and casualty insurance market for indicators of impairment of its indefinite lived intangible assets. Impairment testing performed in 2014 and 2013 indicated that there was no impairment of these assets. | |||||||||||||||||
Intangible assets with definite lives | |||||||||||||||||
As of December 31, 2014 and 2013, definite lived intangible assets were $3.6 million and $4.0 million, net of accumulated amortization, and were comprised of customer relationships and non-compete agreements. The Company reviewed internal business unit results, the growth of competitors and the overall property and casualty insurance market for indicators of impairment of its definite lived intangible assets. There was no impairment of these assets in 2014 or 2013. |
Reinsurance
Reinsurance | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Reinsurance | 7 | Reinsurance | |||||||
The Company cedes risk to unrelated reinsurers on a pro rata (“quota share”) and excess of loss basis in the ordinary course of business to limit its net loss exposure on insurance contracts. Reinsurance ceded arrangements do not discharge the Company of primary liability. Moreover, reinsurers may fail to pay the Company due to a lack of reinsurer liquidity, perceived improper underwriting, and losses for risks that are excluded from reinsurance coverage and other similar factors, all of which could adversely affect the Company’s financial results. | |||||||||
The Company had the following reinsurance balances as of December 31, 2014 and 2013: | |||||||||
(Dollars in thousands) | December 31, | December 31, | |||||||
2014 | 2013 | ||||||||
Reinsurance receivables, net | $ | 125,718 | $ | 197,887 | |||||
Collateral securing reinsurance receivables | (8,701 | ) | (9,436 | ) | |||||
Reinsurance receivables, net of collateral | $ | 117,017 | $ | 188,451 | |||||
Allowance for uncollectible reinsurance receivables | $ | 9,350 | $ | 9,010 | |||||
Prepaid reinsurance premiums | 4,725 | 5,199 | |||||||
The reinsurance receivables above are net of a purchase accounting adjustment related to discounting acquired loss reserves to their present value and applying a risk margin to the discounted reserves. This adjustment was $4.0 million and $6.0 million at December 31, 2014 and 2013, respectively. | |||||||||
As of December 31, 2014, the Company had one aggregate unsecured reinsurance receivable that exceeded 3% of shareholders’ equity from the following reinsurer. Unsecured reinsurance receivables include amounts receivable for paid and unpaid losses and loss adjustment expenses, less amounts secured by collateral. | |||||||||
(Dollars in thousands) | Reinsurance | A.M. Best | |||||||
Receivables | Ratings | ||||||||
(As of | |||||||||
December 31, | |||||||||
2014) | |||||||||
Munich Re America Corporation | $ | 67,429 | A+ | ||||||
The effect of reinsurance on premiums written and earned is as follows: | |||||||||
(Dollars in thousands) | Written | Earned | |||||||
For the year ended December 31, 2014: | |||||||||
Direct business | $ | 229,978 | $ | 228,652 | |||||
Reinsurance assumed | 61,275 | 58,414 | |||||||
Reinsurance ceded | (18,072 | ) | (18,547 | ) | |||||
Net premiums | $ | 273,181 | $ | 268,519 | |||||
For the year ended December 31, 2013: | |||||||||
Direct business | $ | 232,373 | $ | 215,713 | |||||
Reinsurance assumed | 58,350 | 52,494 | |||||||
Reinsurance ceded | (18,739 | ) | (19,485 | ) | |||||
Net premiums | $ | 271,984 | $ | 248,722 | |||||
For the year ended December 31, 2012: | |||||||||
Direct business | $ | 201,787 | $ | 203,587 | |||||
Reinsurance assumed | 42,266 | 60,393 | |||||||
Reinsurance ceded | (24,506 | ) | (25,118 | ) | |||||
Net premiums | $ | 219,547 | $ | 238,862 | |||||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Income Taxes | 8 | Income Taxes | |||||||||||||||||||||||
The statutory income tax rates of the countries where the Company does business are 35.0% in the United States, 0.0% in Bermuda, 0.0% in the Cayman Islands, 0.0% in Gibraltar, 29.22% in the Duchy of Luxembourg, and 25.0% on non-trading income, 33.0% on capital gains and 12.5% on trading income in the Republic of Ireland. The statutory income tax rate of each country is applied against the annual taxable income of each country to calculate the annual income tax expense. | |||||||||||||||||||||||||
The Company’s income before income taxes from its non-U.S. subsidiaries and U.S. subsidiaries, including the results of the quota share and stop-loss agreements between Global Indemnity Reinsurance and the Insurance Operations, for the years ended December 31, 2014, 2013, and 2012 were as follows: | |||||||||||||||||||||||||
Year Ended December 31, 2014: | Non-U.S. | U.S. | Eliminations | Total | |||||||||||||||||||||
(Dollars in thousands) | Subsidiaries | Subsidiaries | |||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||
Gross premiums written | $ | 173,563 | $ | 229,979 | $ | (112,289 | ) | $ | 291,253 | ||||||||||||||||
Net premiums written | $ | 172,504 | $ | 100,677 | $ | — | $ | 273,181 | |||||||||||||||||
Net premiums earned | $ | 168,743 | $ | 99,776 | $ | — | $ | 268,519 | |||||||||||||||||
Net investment income | 31,420 | 16,715 | (19,314 | ) | 28,821 | ||||||||||||||||||||
Net realized investment gains | 926 | 34,934 | — | 35,860 | |||||||||||||||||||||
Other income (loss) | (65 | ) | 620 | — | 555 | ||||||||||||||||||||
Total revenues | 201,024 | 152,045 | (19,314 | ) | 333,755 | ||||||||||||||||||||
Losses and Expenses: | |||||||||||||||||||||||||
Net losses and loss adjustment expenses | 62,669 | 74,892 | — | 137,561 | |||||||||||||||||||||
Acquisition costs and other underwriting expenses | 70,479 | 39,140 | — | 109,619 | |||||||||||||||||||||
Corporate and other operating expenses | 5,243 | 9,316 | — | 14,559 | |||||||||||||||||||||
Interest expense | 852 | 19,284 | (19,314 | ) | 822 | ||||||||||||||||||||
Income (loss) before income taxes | $ | 61,781 | $ | 9,413 | $ | — | $ | 71,194 | |||||||||||||||||
Year Ended December 31, 2013: | Non-U.S. | U.S. | Eliminations | Total | |||||||||||||||||||||
(Dollars in thousands) | Subsidiaries | Subsidiaries | |||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||
Gross premiums written | $ | 169,618 | $ | 232,374 | $ | (111,269 | ) | $ | 290,723 | ||||||||||||||||
Net premiums written | $ | 169,547 | $ | 102,437 | $ | — | $ | 271,984 | |||||||||||||||||
Net premiums earned | $ | 154,987 | $ | 93,735 | $ | — | $ | 248,722 | |||||||||||||||||
Net investment income | 35,750 | 21,064 | (19,605 | ) | 37,209 | ||||||||||||||||||||
Net realized investment gains | 175 | 27,237 | — | 27,412 | |||||||||||||||||||||
Other income (loss) | (4 | ) | 5,795 | — | 5,791 | ||||||||||||||||||||
Total revenues | 190,908 | 147,831 | (19,605 | ) | 319,134 | ||||||||||||||||||||
Losses and Expenses: | |||||||||||||||||||||||||
Net losses and loss adjustment expenses | 65,337 | 67,654 | — | 132,991 | |||||||||||||||||||||
Acquisition costs and other underwriting expenses | 64,822 | 40,829 | — | 105,651 | |||||||||||||||||||||
Corporate and other operating expenses | 4,745 | 6,869 | — | 11,614 | |||||||||||||||||||||
Interest expense | 1,165 | 24,609 | (19,605 | ) | 6,169 | ||||||||||||||||||||
Income (loss) before income taxes | $ | 54,839 | $ | 7,870 | $ | — | $ | 62,709 | |||||||||||||||||
Year Ended December 31, 2012: | Non-U.S. | U.S. | Eliminations | Total | |||||||||||||||||||||
(Dollars in thousands) | Subsidiaries | Subsidiaries | |||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||
Gross premiums written | $ | 135,176 | $ | 201,791 | $ | (92,914 | ) | $ | 244,053 | ||||||||||||||||
Net premiums written | $ | 134,628 | $ | 84,919 | $ | — | $ | 219,547 | |||||||||||||||||
Net premiums earned | $ | 153,283 | $ | 85,579 | $ | — | $ | 238,862 | |||||||||||||||||
Net investment income | 42,012 | 23,985 | (18,440 | ) | 47,557 | ||||||||||||||||||||
Net realized investment gains | 995 | 5,760 | — | 6,755 | |||||||||||||||||||||
Other income (loss) | (726 | ) | 568 | — | (158 | ) | |||||||||||||||||||
Total revenues | 195,564 | 115,892 | (18,440 | ) | 293,016 | ||||||||||||||||||||
Losses and Expenses: | |||||||||||||||||||||||||
Net losses and loss adjustment expenses | 93,044 | 60,584 | — | 153,628 | |||||||||||||||||||||
Acquisition costs and other underwriting expenses | 59,046 | 36,357 | — | 95,403 | |||||||||||||||||||||
Corporate and other operating expenses | 4,753 | 4,938 | — | 9,691 | |||||||||||||||||||||
Interest expense | — | 23,833 | (18,440 | ) | 5,393 | ||||||||||||||||||||
Income (loss) before income taxes | $ | 38,721 | $ | (9,820 | ) | $ | — | $ | 28,901 | ||||||||||||||||
The following table summarizes the components of income tax expense (benefit): | |||||||||||||||||||||||||
(Dollars in thousands) | Years Ended December 31, | ||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Current income tax expense (benefit): | $ | 6,250 | $ | — | $ | — | |||||||||||||||||||
Non-resident withholding | |||||||||||||||||||||||||
Foreign | 129 | 163 | (628 | ) | |||||||||||||||||||||
U.S. Federal | 2,787 | 859 | (3,765 | ) | |||||||||||||||||||||
Total current income tax expense benefit | 9,166 | 1,022 | (4,393 | ) | |||||||||||||||||||||
Deferred income tax benefit: | |||||||||||||||||||||||||
U.S. Federal | (828 | ) | (3 | ) | (1,463 | ) | |||||||||||||||||||
Total deferred income tax benefit | (828 | ) | (3 | ) | (1,463 | ) | |||||||||||||||||||
Total income tax expense (benefit) | $ | 8,338 | $ | 1,019 | $ | (5,856 | ) | ||||||||||||||||||
The weighted average expected tax provision has been calculated using income (loss) before income taxes in each jurisdiction multiplied by that jurisdiction’s applicable statutory tax rate. | |||||||||||||||||||||||||
The following table summarizes the differences between the tax provision for financial statement purposes and the expected tax provision at the weighted average tax rate: | |||||||||||||||||||||||||
Years Ended December 31, | |||||||||||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Amount | % of Pre- | Amount | % of Pre- | Amount | % of Pre- | ||||||||||||||||||||
Tax Income | Tax Income | Tax Income | |||||||||||||||||||||||
Expected tax provision at weighted average | $ | 3,465 | 4.9 | % | $ | 2,954 | 4.7 | % | $ | (3,283 | ) | (11.4 | %) | ||||||||||||
Adjustments: | |||||||||||||||||||||||||
Non-resident withholding | 6,250 | 8.8 | — | — | — | — | |||||||||||||||||||
Tax exempt interest | (472 | ) | (0.7 | ) | (1,009 | ) | (1.6 | ) | (1,445 | ) | (5.0 | ) | |||||||||||||
Dividend exclusion | (1,340 | ) | (1.9 | ) | (1,135 | ) | (1.8 | ) | (1,060 | ) | (3.7 | ) | |||||||||||||
Other | 435 | 0.6 | 209 | 0.3 | (68 | ) | (0.2 | ) | |||||||||||||||||
Actual taxes on continuing operations | $ | 8,338 | 11.7 | % | $ | 1,019 | 1.6 | % | $ | (5,856 | ) | (20.3 | %) | ||||||||||||
The effective income tax rate for 2014 was 11.7%, compared with an effective income tax rate of 1.6% for 2013 and an effective income tax benefit rate of 20.3% for 2012. The increase in the effective income tax rate in 2014 compared with 2013 is primarily due to an increase in capital gains in 2014 and a $6.3 million withholding tax paid in connection with the $125 million dividend from Global Indemnity Group Inc. to U.A.I. Luxembourg S.à.r.l. The increase in the effective income tax rate in 2013 compared with 2012 is primarily due to the gain on the disposition of a subsidiary and an increase in capital gains in taxable jurisdictions in 2013 compared with 2012. | |||||||||||||||||||||||||
The tax effects of temporary differences that give rise to significant portions of the net deferred tax assets at December 31, 2014 and 2013 are presented below: | |||||||||||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | |||||||||||||||||||||||
Deferred tax assets: | |||||||||||||||||||||||||
Discounted unpaid losses and loss adjustment expenses | $ | 7,492 | $ | 9,459 | |||||||||||||||||||||
Unearned premiums | 3,409 | 3,346 | |||||||||||||||||||||||
Alternative minimum tax credit carryover | 10,473 | 9,947 | |||||||||||||||||||||||
Partnership K1 basis differences | 145 | 178 | |||||||||||||||||||||||
Capital gain on derivative instruments | 4,786 | — | |||||||||||||||||||||||
Investment impairments | 379 | 852 | |||||||||||||||||||||||
Stock options | 2,048 | 1,526 | |||||||||||||||||||||||
Deferred acquisition costs | 187 | 789 | |||||||||||||||||||||||
Stat-to-GAAP reinsurance reserve | 1,424 | 1,359 | |||||||||||||||||||||||
Intercompany transfers | 1,919 | 4,605 | |||||||||||||||||||||||
Other | 3,050 | 2,563 | |||||||||||||||||||||||
Total deferred tax assets | 35,312 | 34,624 | |||||||||||||||||||||||
Deferred tax liabilities: | |||||||||||||||||||||||||
Intangible assets | 3,220 | 3,220 | |||||||||||||||||||||||
Unrealized gain on securities available-for-sale and investments in limited partnerships included in accumulated other comprehensive income | 10,263 | 25,480 | |||||||||||||||||||||||
Investment basis differences | 692 | 400 | |||||||||||||||||||||||
Depreciation and amortization | 16 | 355 | |||||||||||||||||||||||
Other | 871 | 963 | |||||||||||||||||||||||
Total deferred tax liabilities | 15,062 | 30,418 | |||||||||||||||||||||||
Total net deferred tax assets | $ | 20,250 | $ | 4,206 | |||||||||||||||||||||
Management believes it is more likely than not that the deferred tax assets will be completely utilized in future years. As a result, the Company has not recorded a valuation allowance at December 31, 2014 and 2013. | |||||||||||||||||||||||||
The Company has an alternative minimum tax (“AMT”) credit carryforward of $10.5 million and $9.9 million as of December 31, 2014 and 2013, respectively, which can be carried forward indefinitely. The Company no longer has a net operating loss (“NOL”) carryforward as of December 31, 2014. The NOL carryforward was $1.2 million at December 31, 2013. | |||||||||||||||||||||||||
The Company and some of its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. The Company is no longer subject to U.S. federal tax examinations by tax authorities for tax years before 2009. | |||||||||||||||||||||||||
Should the Company’s subsidiaries that are subject to income taxes imposed by the U.S. authorities pay a dividend to their foreign affiliates, withholding taxes would apply. The Company has not recorded deferred taxes for potential withholding tax on undistributed earnings. The Company believes it qualifies for treaty benefits under the Tax Convention with Luxembourg and would be subject to a 5% withholding tax if it were to pay a dividend. Determination of the unrecognized deferred tax liability related to these undistributed earnings is not practicable because of the complexities with its hypothetical calculation. In December, 2014, Global Indemnity Group, Inc. paid a dividend of $125 million to U.A.I. (Luxembourg) S.à.r.l. and accrued for a 5% withholding tax amounting to $6.3 million. | |||||||||||||||||||||||||
The Company applies a more-likely-than-not recognition threshold for all tax uncertainties whereby it only recognizes those tax benefits that have a greater than 50% likelihood of being sustained upon examination by the taxing authorities. The Company had no unrecognized tax benefits during 2014 or 2013. | |||||||||||||||||||||||||
The Company classifies all interest and penalties related to uncertain tax positions as income tax expense. The Company did not incur any interest and penalties related to uncertain tax positions during the years ended December 31, 2014, 2013 and 2012. As of December 31, 2014, the Company did not record any liabilities for tax-related interest and penalties on its consolidated balance sheets. |
Liability_for_Unpaid_Losses_an
Liability for Unpaid Losses and Loss Adjustment Expenses | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Liability for Unpaid Losses and Loss Adjustment Expenses | 9 | Liability for Unpaid Losses and Loss Adjustment Expenses | |||||||||||
Activity in the liability for unpaid losses and loss adjustment expenses is summarized as follows: | |||||||||||||
Years Ended December 31, | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Balance at beginning of period | $ | 779,466 | $ | 879,114 | $ | 971,377 | |||||||
Less: Ceded reinsurance receivables | 192,491 | 240,566 | 283,652 | ||||||||||
Net balance at beginning of period | 586,975 | 638,548 | 687,725 | ||||||||||
Incurred losses and loss adjustment expenses related to: | |||||||||||||
Current year | 153,994 | 140,873 | 149,183 | ||||||||||
Prior years | (16,433 | ) | (7,882 | ) | 4,445 | ||||||||
Total incurred losses and loss adjustment expenses | 137,561 | 132,991 | 153,628 | ||||||||||
Paid losses and loss adjustment expenses related to: | |||||||||||||
Current year | 55,485 | 50,732 | 52,164 | ||||||||||
Prior years | 116,780 | 133,832 | 150,641 | ||||||||||
Total paid losses and loss adjustment expenses | 172,265 | 184,564 | 202,805 | ||||||||||
Net balance at end of period | 552,271 | 586,975 | 638,548 | ||||||||||
Plus: Ceded reinsurance receivables | 123,201 | 192,491 | 240,566 | ||||||||||
Balance at end of period | $ | 675,472 | $ | 779,466 | $ | 879,114 | |||||||
When analyzing loss reserves and prior year development, the Company considers many factors, including the frequency and severity of claims, loss trends, case reserve settlements that may have resulted in significant development, and any other additional or pertinent factors that may impact reserve estimates. | |||||||||||||
During 2014, the Company reduced its prior accident year loss reserves by $16.4 million, which consisted of a $12.5 million decrease related to Insurance Operations and a $3.9 million decrease related to Reinsurance Operations. | |||||||||||||
The $12.5 million reduction of prior accident year loss reserves related to Insurance Operations primarily consisted of the following: | |||||||||||||
• | Property: A $2.1 million increase due to higher than expected emergence on non-catastrophe claims primarily in accident years 2007, 2012, and 2013. | ||||||||||||
• | General Liability: A $3.1 million reduction due to less than anticipated frequency in accident year 2001 and less than anticipated frequency and severity on claims from accident years 2007 through 2010 partially offset by greater than anticipated loss emergence in accident year 2013. | ||||||||||||
• | Asbestos and Environmental: A $7.1 million increase related to policies written prior to 1990 as a result of recent severity being higher than expected due to faster erosion of underlying policy limits. | ||||||||||||
• | Professional: A $19.4 million reduction primarily due to expected loss emergence being much less than anticipated for accident years 2007 through 2011. | ||||||||||||
• | Umbrella: A $2.7 million decrease primarily driven by less than anticipated frequency in accident years 2002 through 2007. | ||||||||||||
• | Commercial Auto: A $3.6 million increase primarily related to accident years 2011 through 2013. Larger vehicles were written prior to 2014 and industry loss development factors were used to project losses. | ||||||||||||
The $3.9 million reduction of prior accident year loss reserves related to Reinsurance Operations was primarily due to better than anticipated loss emergence on property lines partially offset by adverse development related to commercial auto and higher than anticipated severity on the Company’s marine product. | |||||||||||||
During 2013, the Company reduced its prior accident year loss reserves by $7.9 million, which consisted of a $7.6 million decrease related to Insurance Operations and a $0.3 million decrease related to Reinsurance Operations. | |||||||||||||
The $7.6 million reduction of prior accident year loss reserves related to Insurance Operations primarily consisted of the following: | |||||||||||||
• | Property: A $9.2 million reduction primarily driven by better than expected development from accident years 2010, 2011, and 2012 related primarily to lower than expected non-catastrophe severity. | ||||||||||||
• | General Liability: A $6.7 million reduction primarily due to better than expected emergence in nearly all accident years between 2003 through 2011 partially offset by an increase to accident years 1998 through 2002 and 2012 due to higher than anticipated loss emergence. | ||||||||||||
• | Asbestos and Environmental: A $6.8 million increase primarily related to policies written prior to 1990. | ||||||||||||
• | Professional: A $0.7 million increase primarily driven by $2.2 million increase in aggregate from unexpected loss emergence in accident years 2006 to 2008 and 2010 offset by $1.5 million of favorable emergence from accident years 1998 and 2011. | ||||||||||||
• | Umbrella: A $1.1 million decrease primarily driven by better than expected loss emergence in accident years 2002 to 2010 offset by increases in 2011 and 2012. | ||||||||||||
• | Commercial Auto: A $0.9 million increase primarily related to accident year 2011. | ||||||||||||
• | Marine: A $0.9 million increase primarily related to accident years 2011 and 2012. | ||||||||||||
The $0.3 million reduction of prior accident year loss reserves related to Reinsurance Operations was primarily due to better than anticipated loss emergence on property lines partially offset by adverse development on director and officer, general liability, automobile, and marine. | |||||||||||||
During 2012, the Company increased its prior accident year loss reserves by $4.4 million, which consisted of a $4.2 million decrease related to Insurance Operations and an $8.7 million increase related to Reinsurance Operations. | |||||||||||||
The $4.2 million reduction of prior accident year loss reserves related to Insurance Operations primarily consisted of the following: | |||||||||||||
• | General liability: A $6.3 million reduction primarily due to favorable emergence of $4.7 million on small business binding and $3.3 million on casualty brokerage exposures primarily in accident years 2002 through 2005. Partially offsetting these reductions were increases of $2.0 million on construction defect reserves in accident year 2007. The Company also decreased its reinsurance allowance by $0.7 million in this line due to changes in its reinsurance exposure on specifically identified claims and general decreases in ceded reserves. | ||||||||||||
• | Umbrella: A $0.7 million reduction primarily due to continued favorable emergence. Umbrella coverage typically attaches to other coverage lines, so these net decreases follow the decreases in general liability above. | ||||||||||||
• | Property: A $1.2 million increase primarily related to accident year 2011 due to greater than expected loss emergence on a large sinkhole claim. | ||||||||||||
• | Commercial Auto: A $1.2 million increase primarily driven by continued loss emergence on casualty brokerage exposures. | ||||||||||||
The $8.7 million increase in prior accident year loss reserves related to Reinsurance Operations primarily consisted of the following: | |||||||||||||
• | Workers’ Compensation: An $8.3 million increase in workers’ compensation lines primarily related to accident years 2009 and 2010 driven by increased frequency and severity. As a result of these increased losses, the Company recorded $6.0 million in additional premium related to these treaties. | ||||||||||||
• | Marine: A $2.7 million increase in marine lines primarily related to accident year 2011 primarily due to higher than expected reported losses. | ||||||||||||
• | Commercial Auto: A $1.3 million increase in auto liability lines primarily related to accident year 2009 resulting from further unexpected development on non-standard auto treaties which were not renewed. | ||||||||||||
• | Property: A $3.4 million decrease in property lines primarily related to accident years 2009 and 2011 as a result of further development on worldwide catastrophe treaties. | ||||||||||||
Prior to 2001, the Company underwrote multi-peril business insuring general contractors, developers, and sub-contractors primarily involved in residential construction that has resulted in significant exposure to construction defect (“CD”) claims. The Company’s reserves for CD claims ($69.8 million and $70.5 million as of December 31, 2014 and 2013, net of reinsurance, respectively) are established based upon management’s best estimate in consideration of known facts, existing case law and generally accepted actuarial methodologies. However, due to the inherent uncertainty concerning this type of business, the ultimate exposure for these claims may vary significantly from the amounts currently recorded. | |||||||||||||
The Company has exposure to asbestos & environmental (“A&E”) claims. The asbestos exposure primarily arises from the sale of product liability insurance, and the environmental exposure arises from the sale of general liability and commercial multi-peril insurance. In establishing the liability for unpaid losses and loss adjustment expenses related to A&E exposures, management considers facts currently known and the current state of the law and coverage litigation. Liabilities are recognized for known claims (including the cost of related litigation) when sufficient information has been developed to indicate the involvement of a specific insurance policy, and management can reasonably estimate its liability. In addition, liabilities have been established to cover additional exposures on both known and unasserted claims. Estimates of the liabilities are reviewed and updated regularly. Case law continues to evolve for such claims, and uncertainty exists about the outcome of coverage litigation and whether past claim experience will be representative of future claim experience. Included in net unpaid losses and loss adjustment expenses as of December 31, 2014, 2013, and 2012 were IBNR reserves of $26.4 million, $18.2 million, and $14.6 million, respectively, and case reserves of approximately $4.8 million, $4.8 million, and $5.5 million, respectively, for known A&E-related claims. | |||||||||||||
The following table shows the Company’s gross reserves for A&E losses: | |||||||||||||
Years Ended December 31, | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Gross reserve for A&E losses and loss adjustment expenses—beginning of period | $ | 50,155 | $ | 44,767 | $ | 50,601 | |||||||
Plus: Incurred losses and loss adjustment expenses—case reserves | 4,333 | 2,154 | 7,687 | ||||||||||
Plus: Incurred losses and loss adjustment expenses—IBNR | 7,340 | 5,961 | (5,860 | ) | |||||||||
Less: Payments | 5,293 | 2,727 | 7,661 | ||||||||||
Gross reserves for A&E losses and loss adjustment expenses—end of period | $ | 56,535 | $ | 50,155 | $ | 44,767 | |||||||
The following table shows the Company’s net reserves for A&E losses: | |||||||||||||
Years Ended December 31, | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Net reserve for A&E losses and loss adjustment expenses—beginning of period | $ | 23,038 | $ | 20,134 | $ | 25,285 | |||||||
Plus: Incurred losses and loss adjustment expenses—case reserves | 2,754 | 1,351 | 6,934 | ||||||||||
Plus: Incurred losses and loss adjustment expenses—IBNR | 8,241 | 3,506 | (5,683 | ) | |||||||||
Less: Payments | 2,848 | 1,953 | 6,402 | ||||||||||
Net reserves for A&E losses and loss adjustment expenses—end of period | $ | 31,185 | $ | 23,038 | $ | 20,134 | |||||||
Establishing reserves for A&E and other mass tort claims involves more judgment than other types of claims due to, among other things, inconsistent court decisions, an increase in bankruptcy filings as a result of asbestos-related liabilities, and judicial interpretations that often expand theories of recovery and broaden the scope of coverage. The insurance industry continues to receive a substantial number of asbestos-related bodily injury claims, with an increasing focus being directed toward other parties, including installers of products containing asbestos rather than against asbestos manufacturers. This shift has resulted in significant insurance coverage litigation implicating applicable coverage defenses or determinations, if any, including but not limited to, determinations as to whether or not an asbestos-related bodily injury claim is subject to aggregate limits of liability found in most comprehensive general liability policies. | |||||||||||||
In 2009, one of the Company’s insurance companies entered into a settlement agreement to resolve asbestos related coverage litigation related to approximately 3,900 existing asbestos-related bodily injury claims and future claims. The settlement was approved by the Court and a final order was issued in September 2014. | |||||||||||||
As of December 31, 2014, 2013, and 2012, the survival ratio on a gross basis for the Company’s open A&E claims was 10.8 years, 11.3 years, and 11.3 years, respectively. As of December 31, 2014, 2013, and 2012, the survival ratio on a net basis for the Company’s open A&E claims was 8.4 years, 6.7 years, and 7.0 years, respectively. The survival ratio, which is the ratio of gross or net reserves to the 3-year average of annual paid claims, is a financial measure that indicates how long the current amount of gross or net reserves are expected to last based on the current rate of paid claims. |
Debt
Debt | 12 Months Ended | |
Dec. 31, 2014 | ||
Debt | 10 | Debt |
Margin Borrowing Facilities | ||
The Company has available two margin borrowing facilities. The borrowing rate for each facility is tied to LIBOR and is currently approximately 1%. These facilities are due on demand. The borrowings are subject to maintenance margin, which is a minimum account balance that must be maintained. A decline in market conditions could require an additional deposit of collateral. As of December 31, 2014, approximately $222.8 million in collateral was deposited to support borrowings. The amount borrowed against the margin accounts may fluctuate as routine investment transactions, such as dividends received, investment income received, maturities and pay-downs, impact cash balances. The margin facilities contain customary events of default, including, without limitation, insolvency, failure to make required payments, failure to comply with any representations or warranties, failure to adequately assure future performance, and failure of a guarantor to perform under its guarantee. The amount outstanding on the Company’s margin borrowing facilities was $174.7 million and $100.0 million as of December 31, 2014 and 2013, respectively. | ||
Guaranteed Senior Notes | ||
On July 19, 2013, the Company paid the entire outstanding principal amount on its guaranteed senior notes. The payment of $58.6 million consisted of principal of $54.0 million and interest of $4.6 million, which included a make-whole provision of $2.9 million. This payment was funded by borrowing $60.0 million pursuant to the Company’s margin borrowing facilities. | ||
Junior Subordinated Debentures | ||
On September 30, 2013, the Company redeemed the entire outstanding principal amount on its UNG Trust I junior subordinated notes. The payment of $10.4 million consisted of principal of $10.3 million and interest of $0.1 million. This payment was funded by borrowing $10.0 million pursuant to the Company’s margin borrowing facilities. | ||
On October 29, 2013, the Company redeemed the entire outstanding principal amount on its UNG Trust II junior subordinated notes. The payment of $20.8 million consisted of principal of $20.6 million and interest of $0.2 million. This payment was funded by borrowing $20.2 million pursuant to the Company’s margin borrowing facilities. |
Shareholders_Equity
Shareholders' Equity | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Shareholders' Equity | 11 | Shareholders’ Equity | |||||||||||
Dividends | |||||||||||||
The ability of Global Indemnity plc to pay dividends is subject to Irish regulations. Under Irish law, dividends and distributions may only be made from distributable reserves. As of December 31, 2014, the Company’s distributable reserves were $931.5 million. | |||||||||||||
Since the Company is a holding company and has no direct operations, its ability to pay dividends depends, in part, on the ability of its subsidiaries to pay dividends. Global Indemnity Reinsurance and the U.S. insurance subsidiaries are subject to significant regulatory restrictions limiting their ability to declare and pay dividends. See Note 17 for additional information regarding dividend limitations imposed on Global Indemnity Reinsurance and the U.S. insurance subsidiaries. | |||||||||||||
Repurchases of the Company’s A Ordinary Shares | |||||||||||||
The Company allows employees to surrender A ordinary shares as payment for the tax liability incurred upon the vesting of restricted stock that was issued under the Share Incentive Plan. During 2014, 2013, and 2012, the Company purchased an aggregate of 5,444, 2,370 and 4,997, respectively, of surrendered A ordinary shares from its employees for $0.1 million, $0.1 million and $0.1 million, respectively. All shares purchased from employees by the Company are held as treasury stock and recorded at cost. | |||||||||||||
In 2011 and 2012, the Board of Directors authorized the Company to repurchase up to $125.0 million of its A ordinary shares through share repurchase programs. The Company repurchased and retired an aggregate 5,371,419 of its A ordinary shares in the open market and in privately negotiated transactions at an aggregate price of $112.2 million or an average of $20.89 per share. The Company does not have authorization from the Board of Directors to repurchase any additional A ordinary shares as of December 31, 2014. The excess cost of the repurchased shares over their par value was classified to additional paid-in capital. | |||||||||||||
Included in the share repurchases above, on May 9, 2012, the Company announced a self-tender offer pursuant to which it could repurchase up to $61.0 million of its A ordinary shares. On June 14, 2012, the Company accepted for purchase 2,913,464 of its A ordinary shares at a price of $21.75 per share for a total cost of $63.4 million, excluding fees and expenses related to the tender offer. The Company funded the purchase of the shares using cash on hand. Included within the A ordinary shares accepted for purchase were 122,578 A ordinary shares that Global Indemnity elected to purchase pursuant to its option to increase the size of the tender offer by up to 2.0% of the outstanding A ordinary shares. | |||||||||||||
The following table provides information with respect to the A ordinary shares that were surrendered or repurchased in 2014: | |||||||||||||
Period (1) | Total Number | Average | Total Number of Shares | ||||||||||
of Shares | Price Paid | Purchased as Part of | |||||||||||
Purchased | Per Share | Publicly Announced | |||||||||||
Plan or Program | |||||||||||||
January 1 – 31, 2014 | 3,644 | (2) | $ | 25.3 | — | ||||||||
February 1 – 28, 2014 | 362 | (2) | $ | 24 | — | ||||||||
March 1 – 31, 2014 | 1,438 | (2) | $ | 26.23 | — | ||||||||
Total | 5,444 | $ | 25.46 | — | |||||||||
-1 | Based on settlement date. | ||||||||||||
-2 | Surrendered by employees as payment of taxes withheld on the vesting of restricted stock. | ||||||||||||
The following table provides information with respect to the A ordinary shares that were surrendered or repurchased in 2013: | |||||||||||||
Period (1) | Total Number | Average | Total Number of Shares | ||||||||||
of Shares | Price Paid | Purchased as Part of | |||||||||||
Purchased | Per Share | Publicly Announced | |||||||||||
Plan or Program | |||||||||||||
February 1 – 28, 2013 | 362 | (2) | $ | 20.25 | — | ||||||||
March 1 – 31, 2013 | 891 | (2) | $ | 22.78 | — | ||||||||
June 1 – 30, 2013 | 507 | (2) | $ | 23.03 | — | ||||||||
December 1 – 31, 2013 | 610 | (2) | $ | 26.07 | — | ||||||||
Total | 2,370 | $ | 23.29 | — | |||||||||
-1 | Based on settlement date. | ||||||||||||
-2 | Surrendered by employees as payment of taxes withheld on the vesting of restricted stock. |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Related Party Transactions | 12 | Related Party Transactions | |||||||
Fox Paine & Company | |||||||||
As of December 31, 2014, Fox Paine & Company LLC (“Fox Paine”) beneficially owned shares having approximately 92.9% of the Company’s total outstanding voting power. Fox Paine has the right to appoint a number of the Company’s Directors equal in aggregate to the pro rata percentage of the voting shares of the Company beneficially held by Fox Paine for so long as Fox Paine holds an aggregate of 25% or more of the voting power in the Company. Fox Paine controls the election of all of the Company’s Directors due to its controlling share ownership. The Company’s Chairman is a member of Fox Paine. The Company relies on Fox Paine to provide management services and other services related to the operations of the Company. | |||||||||
At December 31, 2014 and 2013, Global Indemnity Reinsurance was a limited partner in Fox Paine Capital Fund, II, which is managed by Fox Paine. This investment was originally made by United National Insurance Company in June 2000 and pre-dates the September 5, 2003 acquisition by Fox Paine of Wind River Investment Corporation, which was the predecessor holding company for United National Insurance Company. The Company’s investment in this limited partnership was valued at $3.4 million and $3.5 million at December 31, 2014 and 2013, respectively. At December 31, 2014, the Company had an unfunded capital commitment of $2.4 million to the partnership. There were no distributions received from the limited partnership during 2014 and 2013. The Company received a distribution from the limited partnership of $5.4 million, of which $4.3 million was recorded as investment income, during 2012. | |||||||||
The Company relies on Fox Paine to provide management services and other services related to the operations of the Company. Starting in 2014, this fee will be adjusted annually to reflect the percentage change in the CPI-U. In addition, the payment of the annual management fee will be deferred until a change of control or September, 2018, whichever occurs first, and is subject to an annual adjustment equal to the rate of return the Company earns on its investment portfolio. Management fee expense of $1.9 million, $1.9 million and $1.5 million was incurred during the years ended December 31, 2014, 2013, and 2012, respectively. As of December 31, 2014, unpaid management fees, which were included in other liabilities on the consolidated balance sheets, were $0.6 million. As of December 31, 2013, prepaid management fees, which were included in other assets on the consolidated balance sheets, were $1.3 million. | |||||||||
Cozen O’Connor | |||||||||
The Company incurred $0.2 million, $0.02 million, and $0.2 million for legal services rendered by Cozen O’Connor during the years ended December 31, 2014, 2013, and 2012, respectively. Stephen A. Cozen, the chairman of Cozen O’Connor, is a member of the Company’s Board of Directors. | |||||||||
Crystal & Company | |||||||||
During each of the years ended December 31, 2014, 2013 and 2012, the Company incurred $0.2 million in brokerage fees to Crystal & Company, an insurance broker. Prior to October 15, 2012, Crystal & Company was known as Frank Crystal & Company. James W. Crystal, the chairman and chief executive officer of Crystal & Company, is a member of the Company’s Board of Directors. | |||||||||
Hiscox Insurance Company (Bermuda) Ltd. | |||||||||
Global Indemnity Reinsurance is a participant in a reinsurance agreement with Hiscox Insurance Company (Bermuda) Ltd. (“Hiscox Bermuda”) effective January 1, 2013. Steve Green, the President of Global Indemnity Reinsurance, was a member of Hiscox Bermuda’s Board of Directors until May, 2014. The Company estimated that the following earned premium and incurred losses related to the agreement have been assumed by Global Indemnity Reinsurance from Hiscox Bermuda: | |||||||||
Years Ended | |||||||||
December 31, | |||||||||
(Dollars in thousands) | 2014 | 2013 | |||||||
Assumed earned premium | $ | 6,383 | $ | 3,053 | |||||
Assumed losses and loss adjustment expenses | 763 | 987 | |||||||
Net balances due to Global Indemnity Reinsurance under this agreement are as follows: | |||||||||
As of December 31. | |||||||||
(Dollars in thousands) | 2014 | 2013 | |||||||
Net receivable balance | $ | 2,897 | $ | 3,337 |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies | 13 | Commitments and Contingencies | |||
Commitments | |||||
The Company entered into a $50 million commitment to purchase an alternative investment vehicle which is comprised of European non-performing loans. As of December 31, 2014, the Company has funded $29.9 million of this commitment leaving $20.1 million as unfunded. | |||||
Lease Commitments | |||||
Total rental expense under operating leases for the years ended December 31, 2014, 2013, and 2012 were $2.6 million, $2.4 million, and $2.2 million, respectively. At December 31, 2014, future minimum cash payments under non-cancelable operating leases were as follows: | |||||
(Dollars in thousands) | |||||
2015 | $ | 2,374 | |||
2016 | 2,279 | ||||
2017 | 2,234 | ||||
2018 | 2,237 | ||||
2019 and thereafter | 2,236 | ||||
Total | $ | 11,360 | |||
Legal Proceedings | |||||
The Company is, from time to time, involved in various legal proceedings in the ordinary course of business. The Company maintains insurance and reinsurance coverage for such risks in amounts that it considers adequate. However, there can be no assurance that the insurance and reinsurance coverage that the Company maintains is sufficient or will be available in adequate amounts or at a reasonable cost. The Company does not believe that the resolution of any currently pending legal proceedings, either individually or taken as a whole, will have a material adverse effect on its business, results of operations, cash flows, or financial condition. | |||||
There is a greater potential for disputes with reinsurers who are in runoff. Some of the Company’s reinsurers’ have operations that are in runoff, and therefore, the Company closely monitors those relationships. The Company anticipates that, similar to the rest of the insurance and reinsurance industry, it will continue to be subject to litigation and arbitration proceedings in the ordinary course of business. | |||||
Other Commitments | |||||
As mentioned in Note 12 above, the Company has a remaining commitment of $2.4 million to the Fox Paine Capital Fund, II. | |||||
The Company is party to a Management Agreement, as amended, with Fox Paine, whereby in connection with certain management services provided to it by Fox Paine, the Company agreed to pay an annual management fee to Fox Paine & Company. See Note 12 above for additional information pertaining to this management agreement. |
ShareBased_Compensation_Plans
Share-Based Compensation Plans | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Share-Based Compensation Plans | 14 | Share-Based Compensation Plans | |||||||||||||||
The fair value method of accounting recognizes share-based compensation to employees and non-employee directors in the statements of operations using the grant-date fair value of the stock options and other equity-based compensation expensed over the requisite service and vesting period. | |||||||||||||||||
For the purpose of determining the fair value of stock option awards, the Company uses the Black-Scholes option-pricing model. An estimation of forfeitures is required when recognizing compensation expense which is then adjusted over the requisite service period should actual forfeitures differ from such estimates. Changes in estimated forfeitures are recognized through a cumulative adjustment to compensation in the period of change. | |||||||||||||||||
The prescribed accounting guidance also requires tax benefits relating to excess stock-based compensation deductions to be prospectively presented in the statement of cash flows as financing cash inflows. The tax benefit resulting from stock-based compensation deductions in excess of amounts reported for financial reporting purposes was $0.04 million for the year ended December 31, 2014. There was no tax benefit resulting from stock-based compensation deductions in excess of amounts reported for financial reporting purposes during 2013 and 2012. | |||||||||||||||||
Share Incentive Plan | |||||||||||||||||
On June 11, 2014, the Company’s Shareholders approved the Global Indemnity plc Share Incentive Plan (the “Plan”). The previous share incentive plan, which became effective in 2003, expired per its terms on September 5, 2013. The purpose of the Plan is to give the Company a competitive advantage in attracting and retaining officers, employees, consultants and non-employee directors by offering stock options, restricted shares and other stock-based awards. Under the Plan, the Company may grant up to 2.0 million A ordinary shares pursuant to grants under the Plan. | |||||||||||||||||
Options | |||||||||||||||||
Award activity for stock options granted under the Plan and the weighted average exercise price per share are summarized as follows: | |||||||||||||||||
Time-Based | Performance- | Total | Weighted | ||||||||||||||
Options | Based Options | Options | Average | ||||||||||||||
Exercise Price | |||||||||||||||||
Per Share | |||||||||||||||||
Options outstanding at January 1, 2012 | 565,981 | — | 565,981 | $ | 20.59 | ||||||||||||
Options issued | — | — | — | — | |||||||||||||
Options forfeited | (96,238 | ) | — | (96,238 | ) | $ | 24.09 | ||||||||||
Options exercised | (5,000 | ) | — | (5,000 | ) | $ | 20 | ||||||||||
Options expired | — | — | — | — | |||||||||||||
Options purchased by the Company | — | — | — | — | |||||||||||||
Options outstanding at December 31, 2012 | 464,743 | — | 464,743 | $ | 19.87 | ||||||||||||
Options issued | — | — | — | — | |||||||||||||
Options forfeited | (5,000 | ) | — | (5,000 | ) | $ | 29.24 | ||||||||||
Options exercised | (14,292 | ) | — | (14,292 | ) | $ | 20 | ||||||||||
Options expired | (32,951 | ) | — | (32,951 | ) | $ | 34 | ||||||||||
Options purchased by the Company | — | — | — | — | |||||||||||||
Options outstanding at December 31, 2013 | 412,500 | — | 412,500 | $ | 18.62 | ||||||||||||
Options issued | 325,000 | — | 325,000 | 31.74 | |||||||||||||
Options forfeited | (125,000 | ) | — | (125,000 | ) | 19.6 | |||||||||||
Options exercised | — | — | — | — | |||||||||||||
Options expired | — | — | — | — | |||||||||||||
Options purchased by the Company | — | — | — | — | |||||||||||||
Options outstanding at December 31, 2014 | 612,500 | — | 612,500 | 25.38 | |||||||||||||
Options exercisable at December 31, 2014 | 312,500 | — | 312,500 | 18.66 | |||||||||||||
During the year ended December 31, 2014, the Company granted 325,000 Time-Based Options under the Plan. Of these options, 25,000 were forfeited during 2014. The remaining 300,000 stock options were issued to the Company’s Chief Executive Officer. See below for vesting schedule related to this stock award. | |||||||||||||||||
The Company recorded $0.3 million, $1.2 million, and $1.2 million of compensation expense for stock options outstanding under the Plan in each of the years ended December 31, 2014, 2013, and 2012, respectively. | |||||||||||||||||
The Company did not receive any proceeds from the exercise of options during 2014 under the Plan. In 2013, the Company received $0.3 million from the issuance of 14,292 A ordinary shares at a weighted average grant date value of $20.00 per share exercised by a former employee of the Company under the previous share incentive plan. In 2012, the Company received $0.1 million from the issuance of 5,000 A ordinary shares at a weighted average grant date value of $20.00 per share exercised by a former employee of the Company under the previous share incentive plan. | |||||||||||||||||
Amortization expense related to options outstanding is anticipated to be $0.3 million in 2015, 2016, and 2017. | |||||||||||||||||
Option intrinsic values, which are the differences between the fair value of $28.37 at December 31, 2014 and the strike price of the option, are as follows: | |||||||||||||||||
Number | Weighted | Intrinsic | |||||||||||||||
of Shares | Average | Value | |||||||||||||||
Strike Price | |||||||||||||||||
Outstanding | 612,500 | $ | 25.38 | $ | 3.2 million | ||||||||||||
Exercisable | 312,500 | $ | 18.66 | $ | 3.2 million | ||||||||||||
Exercised | — | N/A | N/A | ||||||||||||||
NOTE: The intrinsic value of the exercised options is the difference between the fair market value at time of exercise and the strike price of the option. | |||||||||||||||||
The options exercisable at December 31, 2014 include the following: | |||||||||||||||||
Option Price | Number of options | ||||||||||||||||
exercisable | |||||||||||||||||
$17.87 | 300,000 | ||||||||||||||||
$37.70 | 12,500 | ||||||||||||||||
Options exercisable at December 31, 2014 | 312,500 | ||||||||||||||||
The weighted average fair value of options granted under the Plan was $7.92 in 2014 using a Black-Scholes option-pricing model and the following weighted average assumptions. There were no options granted under the Plan in 2013 or 2012. | |||||||||||||||||
2014 | |||||||||||||||||
Dividend yield | 0 | % | |||||||||||||||
Expected volatility | 37.7 | % | |||||||||||||||
Risk-free interest rate | 1.7 | % | |||||||||||||||
Expected option life | 6.9 years | ||||||||||||||||
The following tables summarize the range of exercise prices of options outstanding at December 31, 2014, 2013, and 2012: | |||||||||||||||||
Ranges of | Outstanding at | Weighted Average Per | Weighted Average | ||||||||||||||
Exercise Prices | December 31, 2014 | Share Exercise Price | Remaining Life | ||||||||||||||
$17.87 – $19.99 | 300,000 | $ | 17.87 | 6.7 years | |||||||||||||
$20.00 – $29.99 | — | — | N/A | ||||||||||||||
$30.00 – $37.70 | 312,500 | (1) | $ | 32.59 | 8.8 years | ||||||||||||
Total | 612,500 | ||||||||||||||||
(1)—the weighted average per share exercise price on 300,000 of these shares outstanding is variable. See note below under Chief Executive Officer for additional information. | |||||||||||||||||
Ranges of | Outstanding at | Weighted Average Per | Weighted Average | ||||||||||||||
Exercise Prices | December 31, 2013 | Share Exercise Price | Remaining Life | ||||||||||||||
$17.87 – $19.99 | 400,000 | $ | 18.03 | 7.8 years | |||||||||||||
$30.00 – $37.70 | 12,500 | $ | 37.7 | 1.8 years | |||||||||||||
Total | 412,500 | ||||||||||||||||
Ranges of | Outstanding at | Weighted Average Per | Weighted Average | ||||||||||||||
Exercise Prices | December 31, 2012 | Share Exercise Price | Remaining Life | ||||||||||||||
$17.87 – $19.99 | 400,000 | $ | 18.03 | 8.8 years | |||||||||||||
$20.00 – $29.99 | 19,293 | $ | 22.39 | 0.9 years | |||||||||||||
$30.00 – $37.70 | 45,450 | $ | 35.02 | 1.5 years | |||||||||||||
Total | 464,743 | ||||||||||||||||
Restricted Shares | |||||||||||||||||
In addition to stock option grants, the Plan also provides for the granting of restricted shares to employees and non-employee Directors. The Company recognized compensation expense for restricted stock of $2.6 million, $2.1 million and $1.8 million for 2014, 2013, and 2012, respectively. The total unrecognized compensation expense for the non-vested restricted stock is $3.7 million at December 31, 2014, which will be recognized over a weighted average life of 1.7 years. | |||||||||||||||||
The following table summarizes the restricted stock grants since the 2003 inception of the previous share incentive plan. | |||||||||||||||||
Restricted Stock Awards | |||||||||||||||||
Year | Employees | Directors | Total | ||||||||||||||
Inception through 2011 | 599,806 | 303,974 | 903,780 | ||||||||||||||
2012 | 29,675 | 50,885 | 80,560 | ||||||||||||||
2013 | 81,587 | 50,421 | 132,008 | ||||||||||||||
2014 | 95,694 | 36,608 | 132,302 | ||||||||||||||
806,762 | 441,888 | 1,248,650 | |||||||||||||||
The following table summarizes the non-vested restricted shares activity for the years ended December 31, 2014, 2013, and 2012: | |||||||||||||||||
Number of | Weighted | ||||||||||||||||
Shares | Average | ||||||||||||||||
Price | |||||||||||||||||
Per Share | |||||||||||||||||
Non-vested Restricted Shares at January 1, 2012 | 26,016 | $ | 18.29 | ||||||||||||||
Shares issued | 80,560 | $ | 19.67 | ||||||||||||||
Shares vested | (68,649 | ) | $ | 19.99 | |||||||||||||
Shares forfeited | (3,423 | ) | $ | 20.87 | |||||||||||||
Non-vested Restricted Shares at December 31, 2012 | 34,504 | $ | 17.87 | ||||||||||||||
Shares issued | 132,008 | $ | 22.78 | ||||||||||||||
Shares vested | (67,937 | ) | $ | 22.17 | |||||||||||||
Shares forfeited | (454 | ) | $ | 22.13 | |||||||||||||
Non-vested Restricted Shares at December 31, 2013 | 98,121 | $ | 21.48 | ||||||||||||||
Shares issued | 132,302 | $ | 25.67 | ||||||||||||||
Shares vested | (57,017 | ) | $ | 24.29 | |||||||||||||
Shares forfeited | (1,131 | ) | $ | 22.13 | |||||||||||||
Non-vested Restricted Shares at December 31, 2014 | 172,275 | $ | 23.76 | ||||||||||||||
Based on the terms of the Restricted Share grants, all forfeited shares revert back to the Company. | |||||||||||||||||
During 2012, the Company granted an aggregate of 29,675 A ordinary shares to key employees at a weighted average grant date fair value of $18.60 per share which vest 33 1/3% on each subsequent anniversary date of the grant for a period of three years. During 2012, the Company granted an aggregate of 50,885 A ordinary shares, at a weighted average grant date fair value of $20.29 per share to non-employee Directors under the previous share incentive plan. The fully vested director restricted shares were granted from shares previously forfeited. | |||||||||||||||||
During 2013, the Company granted an aggregate of 81,587 A ordinary shares to key employees at a weighted average grant date fair value of $22.13 per share. Of the A ordinary shares granted in 2013, 11,296 were granted to the Company’s Chief Executive Officer and vest 33 1/3% on each subsequent anniversary date of the grant for a period of three years subject to an accident year true-up of bonus year underwriting results as of the third anniversary of the grant. The remaining 70,291 shares were granted to key employees and will vests as follows: | |||||||||||||||||
• | 16.5%, 16.5%, and 17.0% of the granted stock vest on the first, second, and third anniversary of the grant, respectively. | ||||||||||||||||
• | 50.0% of granted stock vests 100% on the anniversary of the third year subject to accident year true-up of bonus year underwriting results and are subject to Board approval. | ||||||||||||||||
During 2013, the Company granted an aggregate of 50,421 A ordinary shares, at a weighted average grant date fair value of $23.83 per share, to non-employee directors under the previous share incentive plan. | |||||||||||||||||
Included in the 50,421A ordinary shares are 18,838 A ordinary shares earned by the non-employee directors of the Company during 2013 which have a weighted average grant date fair value of $25.38 per share. As of December 31, 2013, these shares were not granted but were considered issued and outstanding for purposes of the financial statement and were subject to shareholder approval of the Plan at the Company’s June 11, 2014 annual shareholder meeting. The shareholders approved the plan at the June 11, 2014 annual shareholder meeting. | |||||||||||||||||
During 2014, the Company granted an aggregate of 95,694 A ordinary shares to key employees at a weighted average grant date fair value of $25.37 per share under the Plan. Of the shares granted in 2014, 5,671 were granted to a key employee and vest 33 1/3% on each subsequent anniversary date of the award for a period of three years and 11,857 were granted to the Company’s Chief Executive Officer and vest 33 1/3% on each subsequent anniversary date of the grant for a period of three years subject to an accident year true-up of bonus year underwriting results as of the third anniversary of the grant. The remaining 78,166 shares were granted to key employees and will vest as follows: | |||||||||||||||||
• | 16.5%, 16.5%, and 17.0% of the granted stock vest on the first, second, and third anniversary of the grant, respectively. | ||||||||||||||||
• | 50% of granted stock vests 100% on the anniversary of the third year subject to accident year true-up of bonus year underwriting results and are subject to Board approval. | ||||||||||||||||
During 2014, the Company granted 36,608 A ordinary shares, at a weighted average grant date fair value of $26.46 per share, to non-employee directors of the Company under the Plan. An additional 18,838 A ordinary shares were issued to non-employee directors on June 12, 2014. These shares were earned by non-employee directors prior to January 1, 2014 and were conditioned on shareholders’ approval of the Plan at the Company’s June 11, 2014 annual shareholder meeting. The shareholders approved the plan at the June 11, 2014 annual shareholder meeting. | |||||||||||||||||
All of the shares granted to non-employee directors in 2014, 2013, and 2012 were fully vested but subject to certain restrictions. | |||||||||||||||||
Chief Executive Officer | |||||||||||||||||
Effective September 19, 2011, Cynthia Y. Valko was hired as the Company’s Chief Executive Officer. | |||||||||||||||||
Ms. Valko’s terms of employment included two equity components including the granting of 300,000 stock options with a strike price equal to the closing price of the Company’s shares on the trading day preceding the start date, or $17.87 per share, and an annual bonus opportunity of which 50% shall be paid in restricted shares based on the market value of the Company’s shares as of December 31 of the subject bonus year. The stock options vested 33 1/3% on December 31, 2012, 2013, and 2014 pending Board approval at the time of vesting. The restricted shares vest 33 1/3% on each anniversary of the subject bonus year. All equity components based on performance are subject to accident year true-up of bonus year underwriting results and are subject to Board approval. | |||||||||||||||||
In 2014, Ms. Valko was awarded an additional 300,000 stock options. The stock options vest as follows: 20% on December 31, 2015, 30% on December 31, 2016, and the remaining 50% on December 31, 2017 and are based on achieving underwriting income, premium volume, and underwriting profitability targets, subject to an accident year true up on the 3rd anniversary of each such year. Vesting of the stock options is subject to continued employment. The exercise price applicable to the Stock Options is $25.00 subject to adjustment based on the Company’s average year-end tangible book value per share, the average interest rate of certain Treasury bonds and the time period elapsed between January 1, 2014 and the date the stock options are exercised. The stock options were granted under and are subject to the terms of the Plan, as amended, subject to shareholder approval of such plan to the extent required to affect such grant under the plan. |
401k_Plan
401(k) Plan | 12 Months Ended | |
Dec. 31, 2014 | ||
401(k) Plan | 15 | 401(k) Plan |
The Company maintains a 401(k) defined contribution plan that covers all eligible U.S. employees. Under this plan, the Company matches 100% of the first 6% contributed by an employee. Vesting on contributions made by the Company is immediate. Total expenses for the plan were $1.2 million, $1.2 million, and $1.1 million for the years ended December 31, 2014, 2013, and 2012, respectively. |
Earnings_Per_Share
Earnings Per Share | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Earnings Per Share | 16 | Earnings Per Share | |||||||||||
Earnings per share have been computed using the weighted average number of ordinary shares and ordinary share equivalents outstanding during the period. | |||||||||||||
The following table sets forth the computation of basic and diluted earnings per share. | |||||||||||||
Years Ended December 31, | |||||||||||||
(Dollars in thousands, except share and per share data) | 2014 | 2013 | 2012 | ||||||||||
Net income | $ | 62,856 | $ | 61,690 | $ | 34,757 | |||||||
Basic earnings per share: | |||||||||||||
Weighted average shares outstanding—basic | 25,131,811 | 25,072,712 | 26,722,772 | ||||||||||
Net income per share | $ | 2.5 | $ | 2.46 | $ | 1.3 | |||||||
Diluted earnings per share: | |||||||||||||
Weighted average shares outstanding—diluted | 25,331,420 | 25,174,015 | 26,748,833 | ||||||||||
Net income per share | $ | 2.48 | $ | 2.45 | $ | 1.3 | |||||||
A reconciliation of weighted average shares for basic earnings per share to weighted average shares for diluted earnings per share is as follows: | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Weighted average shares for basic earnings per share | 25,131,811 | 25,072,712 | 26,722,772 | ||||||||||
Non-vested restricted stock | 100,546 | 53,876 | 17,474 | ||||||||||
Options | 99,063 | 47,427 | 8,587 | ||||||||||
Weighted average shares for diluted earnings per share | 25,331,420 | 25,174,015 | 26,748,833 | ||||||||||
The weighted average shares outstanding used to determine dilutive earnings per share for the years ended December 31, 2014, 2013 and 2012 do not include 312,500, 12,500 and 452,450 shares, respectively, which were deemed to be anti-dilutive. |
Statutory_Financial_Informatio
Statutory Financial Information | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Statutory Financial Information | 17 | Statutory Financial Information | |||||||||||
GAAP differs in certain respects from Statutory Accounting Principles (“SAP”) as prescribed or permitted by the various U.S. state insurance departments. The principal differences between SAP and GAAP are as follows: | |||||||||||||
• | Under SAP, investments in debt securities are primarily carried at amortized cost, while under GAAP the Company records its debt securities at estimated fair value. | ||||||||||||
• | Under SAP, policy acquisition costs, such as commissions, premium taxes, fees and other costs of underwriting policies are charged to current operations as incurred, while under GAAP such costs are deferred and amortized on a pro rata basis over the period covered by the policy. | ||||||||||||
• | Under SAP, certain assets designated as “Non-admitted assets” (such as prepaid expenses) are charged against surplus. | ||||||||||||
• | Under SAP, net deferred income tax assets are admitted following the application of specified criteria, with the resulting admitted deferred tax amount being credited directly to surplus. | ||||||||||||
• | Under SAP, certain premium receivables are non-admitted and are charged against surplus based upon aging criteria. | ||||||||||||
• | Under SAP, the costs and related receivables for guaranty funds and other assessments are recorded based on management’s estimate of the ultimate liability and related receivable settlement, while under GAAP such costs are accrued when the liability is probable and reasonably estimable and the related receivable amount is based on future premium collections or policy surcharges from in-force policies. | ||||||||||||
• | Under SAP, unpaid losses and loss adjustment expenses and unearned premiums are reported net of the effects of reinsurance transactions, whereas under GAAP, unpaid losses and loss adjustment expenses and unearned premiums are reported gross of reinsurance. | ||||||||||||
• | Under SAP, a provision for reinsurance is charged to surplus based on the authorized status of reinsurers, available collateral, and certain aging criteria, whereas under GAAP, an allowance for uncollectible reinsurance is established based on management’s best estimate of the collectability of reinsurance receivables. | ||||||||||||
The National Association of Insurance Commissioners (“NAIC”) issues model laws and regulations, many of which have been adopted by state insurance regulators, relating to: (a) risk-based capital (“RBC”) standards; (b) codification of insurance accounting principles; (c) investment restrictions; and (d) restrictions on the ability of insurance companies to pay dividends. | |||||||||||||
The Company’s U.S. insurance subsidiaries are required by law to maintain certain minimum surplus on a statutory basis, and are subject to regulations under which payment of a dividend from statutory surplus is restricted and may require prior approval of regulatory authorities. In December, 2013, each of the U.S. insurance subsidiaries declared an extraordinary dividend that aggregated to $200 million. In January, 2014, each of the dividends for the U.S. insurance companies was approved by their respective departments of insurance in Pennsylvania, Indiana, Wisconsin, and Virginia. On January 23, 2014, the U.S. insurance companies paid an aggregate of $200 million to Global Indemnity Group, Inc. Applying the current regulatory restrictions as of December 31, 2014, the maximum amount of distributions that could be paid after January 23, 2015 by the United National insurance companies and the Penn-America insurance companies as dividends under applicable laws and regulations without regulatory approval is approximately $35.1 million and $8.4 million, respectively. The Penn-America insurance companies limitation includes $2.8 million that would be distributed to United National Insurance Company or its subsidiary Penn Independent Corporation based on the December 31, 2014 ownership percentages. | |||||||||||||
The NAIC’s RBC model provides a tool for insurance regulators to determine the levels of statutory capital and surplus an insurer must maintain in relation to its insurance and investment risks, as well as its reinsurance exposures, to assess the potential need for regulatory attention. The model provides four levels of regulatory attention, varying with the ratio of an insurance company’s total adjusted capital to its authorized control level RBC (“ACLRBC”). If a company’s total adjusted capital is: | |||||||||||||
(a) | less than or equal to 200%, but greater than 150% of its ACLRBC (the “Company Action Level”), the company must submit a comprehensive plan to the regulatory authority proposing corrective actions aimed at improving its capital position; | ||||||||||||
(b) | less than or equal to 150%, but greater than 100% of its ACLRBC (the “Regulatory Action Level”), the regulatory authority will perform a special examination of the company and issue an order specifying the corrective actions that must be followed; | ||||||||||||
(c) | less than or equal to 100%, but greater than 70% of its ACLRBC (the “Authorized Control Level”), the regulatory authority may take any action it deems necessary, including placing the company under regulatory control; and | ||||||||||||
(d) | less than or equal to 70% of its ACLRBC (the “Mandatory Control Level”), the regulatory authority must place the company under its control. | ||||||||||||
Based on the standards currently adopted, the Company reported in its 2014 statutory filings that the capital and surplus of the U.S. insurance companies are above the prescribed Company Action Level RBC requirements. | |||||||||||||
The following is selected information for the Company’s U.S. insurance companies, net of intercompany eliminations, where applicable, as determined in accordance with SAP: | |||||||||||||
Years Ended December 31, | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Statutory capital and surplus, as of end of period | $ | 253,362 | $ | 251,464 | (a) | $ | 413,303 | ||||||
Statutory net income (loss) | 36,003 | 31,781 | 10,813 | ||||||||||
(a) | Includes extraordinary dividend declared in 2013 for an aggregate of $200 million. | ||||||||||||
Global Indemnity Reinsurance must also prepare annual statutory financial statements. The Bermuda Insurance Act 1978 (the “Insurance Act”) prescribes rules for the preparation and substance of these statutory financial statements which include, in statutory form, a balance sheet, an income statement, a statement of capital and surplus and notes thereto. The statutory financial statements are not prepared in accordance with GAAP or SAP and are distinct from the financial statements prepared for presentation to Global Indemnity Reinsurance’s shareholders and under the Bermuda Companies Act 1981 (the “Companies Act”), which financial statements will be prepared in accordance with GAAP. | |||||||||||||
The principal differences between statutory financial statements prepared under the Insurance Act and GAAP are as follows: | |||||||||||||
• | Under the Insurance Act, policy acquisition costs, such as commissions, premium taxes, fees and other costs of underwriting policies are charged to current operations as incurred, while under GAAP such costs are deferred and amortized on a pro rata basis over the period covered by the policy. | ||||||||||||
• | Under the Insurance Act, prepaid expenses and intangible assets are charged to current operations as incurred, while under GAAP such costs are deferred and amortized on a pro rata basis. | ||||||||||||
• | Under the Insurance Act, unpaid losses and loss adjustment expenses and unearned premiums are reported net of the effects of reinsurance transactions, whereas under GAAP, unpaid losses and loss adjustment expenses and unearned premiums are reported gross of reinsurance. | ||||||||||||
Under the Companies Act, Global Indemnity Reinsurance may only declare or pay a dividend if it has no reasonable grounds for believing that it is, or would after the payment be, unable to pay its liabilities as they become due, or if the realizable value of its assets would not be less than the aggregate of its liabilities and its issued share capital and share premium accounts. Global Indemnity Reinsurance is also prohibited, without the approval of the BMA, from reducing by 15% or more its total statutory capital as set out in its previous year’s statutory financial statements, and any application for such approval must include such information as the BMA may require. Based upon the total statutory capital plus the statutory surplus as set out in its 2014 statutory financial statements that will be filed in 2015, Global Indemnity Reinsurance could pay a dividend of up to $287.1 million without requesting BMA approval. Global Indemnity Reinsurance is dependent on receiving distributions from its subsidiaries in order to pay the full dividend. | |||||||||||||
The following is selected information for Global Indemnity Reinsurance, net of intercompany eliminations, where applicable, as determined in accordance with the Bermuda Insurance Act 1978: | |||||||||||||
Years Ended December 31, | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Statutory capital and surplus, as of end of period | $ | 928,720 | $ | 913,401 | $ | 844,696 | |||||||
Statutory net income (loss) | 44,594 | 31,697 | 21,955 |
Segment_Information
Segment Information | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Segment Information | 18 | Segment Information | |||||||||||
As of December 31, 2014, the Company managed its business through two business segments: Insurance Operations, which includes the operations of United National Insurance Company, Diamond State Insurance Company, United National Specialty Insurance Company, Penn-America Insurance Company, Penn-Star Insurance Company, Penn-Patriot Insurance Company, American Insurance Adjustment Agency, Inc., Collectibles Insurance Services, LLC, Global Indemnity Insurance Agency, LLC, and J.H. Ferguson & Associates, LLC, and Reinsurance Operations, which includes the operations of Global Indemnity Reinsurance Company, Ltd. | |||||||||||||
On December 31, 2013, Diamond State Insurance Company sold all the outstanding shares of capital stock of one of its wholly owned subsidiaries, United National Casualty Insurance Company, to an unrelated party. The financial results of the Insurance Operations for 2013 and 2012 include the financial results for United National Casualty Insurance Company. Management deemed this transaction to be an asset sale with the assets primarily comprised of investments and insurance licenses. This transaction did not have a significant impact on the ongoing business operations. | |||||||||||||
The Insurance Operations segment and the Reinsurance Operations segment follow the same accounting policies used for the Company’s consolidated financial statements. For further disclosure regarding the Company’s accounting policies, please see Note 2. | |||||||||||||
The following are tabulations of business segment information for the years ended December 31, 2014, 2013, and 2012. Corporate information is included to reconcile segment data to the consolidated financial statements. | |||||||||||||
2014:00:00 | Insurance | Reinsurance | Total | ||||||||||
(Dollars in thousands) | Operations (1) | Operations (2) | |||||||||||
Revenues: | |||||||||||||
Gross premiums written | $ | 229,978 | $ | 61,275 | $ | 291,253 | |||||||
Net premiums written | $ | 212,965 | $ | 60,216 | $ | 273,181 | |||||||
Net premiums earned | $ | 211,165 | $ | 57,354 | $ | 268,519 | |||||||
Other income (loss) | 620 | (65 | ) | 555 | |||||||||
Total revenue | 211,785 | 57,289 | 269,074 | ||||||||||
Losses and Expenses: | |||||||||||||
Net losses and loss adjustment expenses | 117,586 | 19,975 | 137,561 | ||||||||||
Acquisition costs and other underwriting expenses | 88,983 | (3) | 20,636 | 109,619 | |||||||||
Income from segments | 5,216 | 16,678 | 21,894 | ||||||||||
Unallocated items: | |||||||||||||
Net investment income | 28,821 | ||||||||||||
Net realized investment gains | 35,860 | ||||||||||||
Corporate and other operating expenses | 14,559 | ||||||||||||
Interest expense | 822 | ||||||||||||
Income before income taxes | 71,194 | ||||||||||||
Income tax expense | 8,338 | ||||||||||||
Net income | $ | 62,856 | |||||||||||
Total assets | $ | 1,288,763 | $ | 641,270 | (4) | $ | 1,930,033 | ||||||
-1 | Includes business ceded to the Company’s Reinsurance Operations. | ||||||||||||
-2 | External business only, excluding business assumed from affiliates. | ||||||||||||
-3 | Includes excise tax of $1,114 related to cessions from Insurance Operations to Reinsurance Operations. | ||||||||||||
-4 | Comprised of Global Indemnity Reinsurance’s total assets less its investment in subsidiaries. | ||||||||||||
2013:00:00 | Insurance | Reinsurance | Total | ||||||||||
(Dollars in thousands) | Operations (1) | Operations (2) | |||||||||||
Revenues: | |||||||||||||
Gross premiums written | $ | 232,373 | $ | 58,350 | $ | 290,723 | |||||||
Net premiums written | $ | 213,705 | $ | 58,279 | $ | 271,984 | |||||||
Net premiums earned | $ | 196,302 | $ | 52,420 | $ | 248,722 | |||||||
Other income (loss) | 5,795 | (4 | ) | 5,791 | |||||||||
Total revenue | 202,097 | 52,416 | 254,513 | ||||||||||
Losses and Expenses: | |||||||||||||
Net losses and loss adjustment expenses | 116,837 | 16,154 | 132,991 | ||||||||||
Acquisition costs and other underwriting expenses | 87,360 | (3) | 18,291 | 105,651 | |||||||||
Income (loss) from segments | (2,100 | ) | $ | 17,971 | 15,871 | ||||||||
Unallocated items: | |||||||||||||
Net investment income | 37,209 | ||||||||||||
Net realized investment gains | 27,412 | ||||||||||||
Corporate and other operating expenses | (11,614 | ) | |||||||||||
Interest expense | (6,169 | ) | |||||||||||
Income before income taxes | 62,709 | ||||||||||||
Income tax expense | 1,019 | ||||||||||||
Net income | $ | 61,690 | |||||||||||
Total assets | $ | 1,264,306 | $ | 647,473 | (4) | $ | 1,911,779 | ||||||
-1 | Includes business ceded to the Company’s Reinsurance Operations. | ||||||||||||
-2 | External business only, excluding business assumed from affiliates. | ||||||||||||
-3 | Includes excise tax of $1,026 related to cessions from Insurance Operations to Reinsurance Operations. | ||||||||||||
-4 | Comprised of Global Indemnity Reinsurance’s total assets less its investment in subsidiaries. | ||||||||||||
2012:00:00 | Insurance | Reinsurance | Total | ||||||||||
(Dollars in thousands) | Operations (1) | Operations (2) | |||||||||||
Revenues: | |||||||||||||
Gross premiums written | $ | 201,790 | $ | 42,263 | $ | 244,053 | |||||||
Net premiums written | $ | 177,832 | $ | 41,715 | $ | 219,547 | |||||||
Net premiums earned | $ | 179,153 | $ | 59,709 | $ | 238,862 | |||||||
Other income (loss) | 568 | (726 | ) | (158 | ) | ||||||||
Total revenue | 179,721 | 58,983 | 238,704 | ||||||||||
Losses and Expenses: | |||||||||||||
Net losses and loss adjustment expenses | 118,515 | 35,113 | 153,628 | ||||||||||
Acquisition costs and other underwriting expenses | 79,910 | (3) | 15,493 | 95,403 | |||||||||
Income (loss) from segments | (18,704 | ) | $ | 8,377 | (10,327 | ) | |||||||
Unallocated items: | |||||||||||||
Net investment income | 47,557 | ||||||||||||
Net realized investment gains | 6,755 | ||||||||||||
Corporate and other operating expenses | (9,691 | ) | |||||||||||
Interest expense | (5,393 | ) | |||||||||||
Income before income taxes | 28,901 | ||||||||||||
Income tax benefit | (5,856 | ) | |||||||||||
Net income | $ | 34,757 | |||||||||||
Total assets | $ | 1,259,083 | $ | 644,620 | (4) | $ | 1,903,703 | ||||||
-1 | Includes business ceded to the Company’s Reinsurance Operations. | ||||||||||||
-2 | External business only, excluding business assumed from affiliates. | ||||||||||||
-3 | Includes excise tax of $936 related to cessions from Insurance Operations to Reinsurance Operations. | ||||||||||||
-4 | Comprised of Global Indemnity Reinsurance’s total assets less its investment in subsidiaries. |
Supplemental_Cash_Flow_Informa
Supplemental Cash Flow Information | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Supplemental Cash Flow Information | 19 | Supplemental Cash Flow Information | |||||||||||
Taxes and Interest Paid | |||||||||||||
The Company paid the following net federal income taxes and cash interest for 2014, 2013, and 2012: | |||||||||||||
Years Ended December 31, | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Federal income taxes paid | $ | 13,997 | $ | 162 | $ | 265 | |||||||
Federal income taxes recovered | 136 | 7,613 | 38 | ||||||||||
Interest paid | 804 | 7,678 | 5,895 |
New_Accounting_Pronouncements
New Accounting Pronouncements | 12 Months Ended | |
Dec. 31, 2014 | ||
New Accounting Pronouncements | 20 | New Accounting Pronouncements |
In February, 2013, the FASB issued new accounting guidance surrounding other comprehensive income. The new guidance requires additional disclosure surrounding amounts reclassified out of accumulated other comprehensive by component. This guidance is effective for reporting periods beginning after December 15, 2012. The Company adopted this guidance effective January 1, 2013. |
Summary_of_Quarterly_Financial
Summary of Quarterly Financial Information (Unaudited) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Summary of Quarterly Financial Information (Unaudited) | 21 | Summary of Quarterly Financial Information (Unaudited) | |||||||||||||||
An unaudited summary of the Company’s 2014 and 2013 quarterly performance is as follows: | |||||||||||||||||
Year Ended December 31, 2014 | |||||||||||||||||
(Dollars in thousands, except per share data) | First | Second | Third | Fourth | |||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||
Net premiums earned | $ | 67,544 | $ | 66,017 | $ | 68,028 | $ | 66,930 | |||||||||
Net investment income | 8,284 | 7,677 | 6,527 | 6,333 | |||||||||||||
Net realized investment gains (losses) | (813 | ) | 39,881 | 1,158 | (4,366 | ) | |||||||||||
Net losses and loss adjustment expenses | 38,572 | 38,270 | 36,654 | 24,065 | |||||||||||||
Acquisition costs and other underwriting expenses | 26,485 | 27,171 | 27,458 | 28,505 | |||||||||||||
Income before income taxes | 6,974 | 44,798 | 8,128 | 11,294 | |||||||||||||
Net income | 8,823 | 33,208 | 9,761 | 11,064 | |||||||||||||
Per share data—Diluted: | |||||||||||||||||
Net income | $ | 0.35 | $ | 1.31 | $ | 0.39 | $ | 0.44 | |||||||||
Year Ended December 31, 2013 | |||||||||||||||||
(Dollars in thousands, except per share data) | First | Second | Third | Fourth | |||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||
Net premiums earned | $ | 55,996 | $ | 58,671 | $ | 64,469 | $ | 69,586 | |||||||||
Net investment income | 10,034 | 9,765 | 8,486 | 8,924 | |||||||||||||
Net realized investment gains | 5,757 | 2,806 | 1,641 | 17,208 | |||||||||||||
Net losses and loss adjustment expenses | 31,788 | 34,924 | 35,483 | 30,796 | |||||||||||||
Acquisition costs and other underwriting expenses | 24,477 | 24,472 | 28,028 | 28,674 | |||||||||||||
Income before income taxes | 12,058 | 8,440 | 5,056 | 37,155 | |||||||||||||
Net income | 12,365 | 8,664 | 6,948 | 33,713 | |||||||||||||
Per share data—Diluted: | |||||||||||||||||
Net income | $ | 0.49 | $ | 0.34 | $ | 0.28 | $ | 1.34 |
Subsequent_Events
Subsequent Events | 12 Months Ended | |
Dec. 31, 2014 | ||
Subsequent Events | 22 | Subsequent Events |
On January 1, 2015, Global Indemnity Group, Inc., a subsidiary of the Company, acquired 100% of the voting equity interest of American Reliable from American Bankers Insurance Group, Inc. by paying $113.7 million in cash and assuming approximately $322.9 million in customary insurance related liabilities, obligations, and mandates. The ultimate purchase price is subject to accounting procedures that are expected to be completed by June 30, 2015. The most recent estimate of the purchase price, based on available financial information, is approximately $117.9 million. This purchase price is subject to adjustment based on GAAP book value of the business as of the date of the closing of the transaction and the future development of loss reserves as specified in the American Reliable SPA. American Reliable’s results of operations will be included in the Company’s results of operations subsequent to the date of acquisition. | ||
The purchase of American Reliable expands Global Indemnity’s product offerings. American Reliable is a specialty company that distributes personal lines products written on an admitted basis that are unusual and harder to place. It complements Global Indemnity’s existing US Insurance Operations that primarily distribute commercial lines products on an excess and surplus lines basis. | ||
In accordance with GAAP, the total purchase price has been provisionally allocated to the tangible and intangible net assets acquired based on management’s preliminary estimates of their fair value and may change as additional information becomes available over the next several months. Accordingly, approximately $87.7 million was allocated to tangible net assets, approximately $27.5 million was allocated to intangible assets, primarily the value of business acquired (“VOBA”), and $2.7 million was allocated to goodwill. Under the | ||
purchase method of accounting, goodwill is not amortized but is tested for impairment at least annually. Pursuant to the Company’s 338(h)(10) election, goodwill is expected to be tax deductible and will be amortized over a period of 15 years. | ||
Goodwill of $2.7 million consists largely of the synergies and economies of scales expected from combining the operations of Global Indemnity and American Reliable. The Company has not yet determined the amount of goodwill to be assigned to each reportable segment. | ||
In connection with the acquisition, the Company has agreed to pay to Fox Paine an investment banking fee of 3% of the amount paid plus the capital required to operate American Reliable on a standalone basis and a $1.5 million investment advisory fee. 267,702 A ordinary shares of Global Indemnity will be issued to pay these fees. These shares will be registered but cannot be sold until the earlier of five years or a change of control. |
Summary_of_Investments_Other_T
Summary of Investments - Other Than Investments in Related Parties | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Summary of Investments - Other Than Investments in Related Parties | GLOBAL INDEMNITY PLC | ||||||||||||
SCHEDULE I—SUMMARY OF INVESTMENTS—OTHER THAN INVESTMENTS | |||||||||||||
IN RELATED PARTIES | |||||||||||||
(In thousands) | |||||||||||||
As of December 31, 2014 | |||||||||||||
Cost * | Value | Amount | |||||||||||
Included in | |||||||||||||
the Balance | |||||||||||||
Sheet | |||||||||||||
Type of Investment: | |||||||||||||
Fixed maturities: | |||||||||||||
United States government and government agencies and authorities | $ | 78,569 | $ | 80,767 | $ | 80,767 | |||||||
States, municipalities, and political subdivisions | 188,452 | 191,473 | 191,473 | ||||||||||
Mortgage-backed and asset-backed securities | 517,651 | 520,180 | 520,180 | ||||||||||
Public utilities | 19,060 | 19,447 | 19,447 | ||||||||||
All other corporate bonds | 469,216 | 471,608 | 471,608 | ||||||||||
Total fixed maturities | 1,272,948 | 1,283,475 | 1,283,475 | ||||||||||
Equity securities: | |||||||||||||
Common stocks: | |||||||||||||
Public utilities | 3,520 | 4,906 | 4,906 | ||||||||||
Industrial and miscellaneous | 95,777 | 117,142 | 117,142 | ||||||||||
Total equity securities | 99,297 | 122,048 | 122,048 | ||||||||||
Other long-term investments | 30,009 | 30,262 | 30,262 | ||||||||||
Total investments | $ | 1,402,254 | $ | 1,435,785 | $ | 1,435,785 | |||||||
* | Original cost of equity securities; original cost of fixed maturities adjusted for amortization of premiums and accretion of discounts. All amounts are shown net of impairment losses. |
Condensed_Financial_Informatio
Condensed Financial Information of Registrant (Parent Only) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Condensed Financial Information of Registrant (Parent Only) | |||||||||||||
GLOBAL INDEMNITY PLC | |||||||||||||
SCHEDULE II—Condensed Financial Information of Registrant | |||||||||||||
(Parent Only) | |||||||||||||
Balance Sheets | |||||||||||||
(Dollars in thousands, except share data) | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
ASSETS | |||||||||||||
Cash and cash equivalents | $ | 46 | $ | 1,746 | |||||||||
Equity in unconsolidated subsidiaries (1) | 1,017,710 | 982,396 | |||||||||||
Other assets | 705 | 683 | |||||||||||
Total assets | $ | 1,018,461 | $ | 984,825 | |||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||
Liabilities: | |||||||||||||
Intercompany notes payable (1) | $ | 108,000 | $ | 108,000 | |||||||||
Due to affiliates (1) | 938 | 2,382 | |||||||||||
Other liabilities | 1,178 | 1,108 | |||||||||||
Total liabilities | 110,116 | 111,490 | |||||||||||
Commitments and contingencies | — | — | |||||||||||
Shareholders’ equity: | |||||||||||||
Ordinary shares, $0.0001 par value, 900,000,000 ordinary shares authorized; A ordinary shares issued: 16,331,577 and 16,200,406, respectively; A ordinary shares outstanding: 13,266,762 and 13,141,035 respectively; B ordinary shares issued and outstanding: 12,061,370 and 12,061,370, respectively | 3 | 3 | |||||||||||
Deferred shares, €1 par value, 40,000 ordinary shares authorized, issued and outstanding (1) | 55 | 55 | |||||||||||
Preferred shares, $0.0001 par value, 100,000,000 shares authorized, none issued and outstanding | — | — | |||||||||||
Additional paid-in capital | 519,590 | 516,653 | |||||||||||
Accumulated other comprehensive income, net of tax | 23,384 | 54,028 | |||||||||||
Retained earnings | 466,717 | 403,861 | |||||||||||
A ordinary shares in treasury, at cost: 3,064,815 and 3,059,371 shares, respectively | (101,404 | ) | (101,265 | ) | |||||||||
Total shareholders’ equity | 908,345 | 873,335 | |||||||||||
Total liabilities and shareholders’ equity | $ | 1,018,461 | $ | 984,825 | |||||||||
-1 | This item has been eliminated in the Company’s Consolidated Financial Statements. | ||||||||||||
See Notes to Consolidated Financial Statements included in Item 8. | |||||||||||||
GLOBAL INDEMNITY PLC | |||||||||||||
SCHEDULE II—Condensed Financial Information of Registrant—(continued) | |||||||||||||
(Parent Only) | |||||||||||||
Statement of Operations and Comprehensive Income | |||||||||||||
(Dollars in thousands) | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Revenues: | |||||||||||||
Total revenues | $ | — | $ | — | $ | — | |||||||
Expenses: | |||||||||||||
Intercompany interest expense (1) | 1,296 | 1,296 | 918 | ||||||||||
Other expenses | 4,484 | 3,848 | 4,169 | ||||||||||
Loss before equity in earnings of unconsolidated subsidiaries | (5,780 | ) | (5,144 | ) | (5,087 | ) | |||||||
Equity in earnings of unconsolidated subsidiaries (1) | 68,636 | 66,834 | 39,844 | ||||||||||
Net income | 62,856 | 61,690 | 34,757 | ||||||||||
Other comprehensive income, net of tax: | |||||||||||||
Equity in other comprehensive income (loss) of unconsolidated subsidiaries (1) | (30,644 | ) | 678 | 13,176 | |||||||||
Other comprehensive income (loss), net of tax | (30,644 | ) | 678 | 13,176 | |||||||||
Comprehensive income, net of tax | $ | 32,212 | $ | 62,368 | $ | 47,933 | |||||||
-1 | This item has been eliminated in the Company’s Consolidated Financial Statements. | ||||||||||||
See Notes to Consolidated Financial Statements included in Item 8. | |||||||||||||
GLOBAL INDEMNITY PLC | |||||||||||||
SCHEDULE II—Condensed Financial Information of Registrant—(continued) | |||||||||||||
(Parent Only) | |||||||||||||
Statement of Cash Flows | |||||||||||||
(Dollars in thousands) | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Net cash provided by (used for) operating activities | $ | (1,598 | ) | $ | 57 | $ | 6,011 | ||||||
Cash flows from financing activities: | |||||||||||||
Purchases of A ordinary shares | (139 | ) | (55 | ) | (82,959 | ) | |||||||
Tax benefit on share-based compensation expense | $ | 37 | — | — | |||||||||
Issuance of intercompany note payable (1) | — | — | 68,900 | ||||||||||
Net cash used for financing activities | $ | (102 | ) | (55 | ) | (14,059 | ) | ||||||
Net change in cash and equivalents | (1,700 | ) | 2 | (8,048 | ) | ||||||||
Cash and cash equivalents at beginning of period | 1,746 | 1,744 | 9,792 | ||||||||||
Cash and cash equivalents at end of period | $ | 46 | $ | 1,746 | $ | 1,744 | |||||||
-1 | This item has been eliminated in the Company’s Consolidated Financial Statements. | ||||||||||||
Supplemental Non-Cash Disclosure: | |||||||||||||
During the years ended December 31, 2014 and 2013, the Company received a non-cash dividend of $2.7 million and $19.1 million, respectively, from one of its subsidiaries which was used to repay intercompany balances due. |
Supplementary_Insurance_Inform
Supplementary Insurance Information | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Supplementary Insurance Information | GLOBAL INDEMNITY PLC | ||||||||||||||||
SCHEDULE III—SUPPLEMENTARY INSURANCE INFORMATION | |||||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Segment | Deferred Policy | Future | Unearned | Other Policy and | |||||||||||||
Acquisition Costs | Policy Benefits, | Premiums | Benefits Payable | ||||||||||||||
Losses, Claims And | |||||||||||||||||
Loss Expenses | |||||||||||||||||
At December 31, 2014: | |||||||||||||||||
Insurance Operations | $ | 21,249 | $ | 579,621 | $ | 102,118 | $ | — | |||||||||
Reinsurance Operations | 3,989 | 95,851 | 18,697 | — | |||||||||||||
At December 31, 2013: | |||||||||||||||||
Insurance Operations | $ | 19,036 | $ | 678,381 | $ | 100,791 | $ | — | |||||||||
Reinsurance Operations | 3,141 | 101,085 | 15,838 | — | |||||||||||||
At December 31, 2012: | |||||||||||||||||
Insurance Operations | $ | 16,235 | $ | 764,737 | $ | 84,130 | $ | — | |||||||||
Reinsurance Operations | 2,030 | 114,377 | 9,984 | — | |||||||||||||
Segment | Premium | Benefits, Claims, | Amortization of | Net | |||||||||||||
Revenue | Losses And | Deferred Policy | Written | ||||||||||||||
Settlement | Acquisition Costs | Premium | |||||||||||||||
Expenses | |||||||||||||||||
For the year ended December 31, 2014: | |||||||||||||||||
Insurance Operations | $ | 211,165 | $ | 117,586 | $ | 45,015 | $ | 212,965 | |||||||||
Reinsurance Operations | 57,354 | 19,975 | 12,036 | 60,216 | |||||||||||||
Total | $ | 268,519 | $ | 137,561 | $ | 57,051 | $ | 273,181 | |||||||||
For the year ended December 31, 2013: | |||||||||||||||||
Insurance Operations | $ | 196,302 | $ | 116,837 | $ | 44,115 | $ | 213,705 | |||||||||
Reinsurance Operations | 52,420 | 16,154 | 9,672 | 58,279 | |||||||||||||
Total | $ | 248,722 | $ | 132,991 | $ | 53,787 | $ | 271,984 | |||||||||
For the year ended December 31, 2012: | |||||||||||||||||
Insurance Operations | $ | 179,153 | $ | 118,515 | $ | 38,177 | $ | 177,832 | |||||||||
Reinsurance Operations | 59,709 | 35,113 | 10,675 | 41,715 | |||||||||||||
Total | $ | 238,862 | $ | 153,628 | $ | 48,852 | $ | 219,547 | |||||||||
Unallocated Corporate Items | Net | Corporate | |||||||||||||||
Investment | and Other | ||||||||||||||||
Income | Operating | ||||||||||||||||
Expenses | |||||||||||||||||
For the year ended December 31, 2014 | $ | 28,821 | $ | 14,559 | |||||||||||||
For the year ended December 31, 2013 | $ | 37,209 | $ | 11,614 | |||||||||||||
For the year ended December 31, 2012 | $ | 47,557 | $ | 9,691 |
Reinsurance_Earned_Premiums
Reinsurance Earned Premiums | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Reinsurance Earned Premiums | GLOBAL INDEMNITY PLC | ||||||||||||||||||||
SCHEDULE IV—REINSURANCE | |||||||||||||||||||||
EARNED PREMIUMS | |||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Direct | Ceded to Other | Assumed from | Net Amount | Percentage | |||||||||||||||||
Amount | Companies | Other Companies | of Amount | ||||||||||||||||||
Assumed to Net | |||||||||||||||||||||
For the year ended December 31, 2014: | |||||||||||||||||||||
Property & Liability Insurance | $ | 228,652 | $ | 18,547 | $ | 58,414 | $ | 268,519 | 21.8 | % | |||||||||||
For the year ended December 31, 2013: | |||||||||||||||||||||
Property & Liability Insurance | $ | 215,713 | $ | 19,485 | $ | 52,494 | $ | 248,722 | 21.1 | % | |||||||||||
For the year ended December 31, 2012: | |||||||||||||||||||||
Property & Liability Insurance | $ | 203,587 | $ | 25,118 | $ | 60,393 | $ | 238,862 | 25.3 | % |
Valuation_and_Qualifying_Accou
Valuation and Qualifying Accounts and Reserves | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Valuation and Qualifying Accounts and Reserves | GLOBAL INDEMNITY PLC | ||||||||||||||||||||
SCHEDULE V—VALUATION AND QUALIFYING ACCOUNTS AND RESERVES | |||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Description | Balance at | Charged | Charged (Credited) | Other | Balance at End | ||||||||||||||||
Beginning of | (Credited) to Costs | to Other Accounts | Deductions | of Period | |||||||||||||||||
Period | and Expenses | ||||||||||||||||||||
For the year ended December 31, 2014: | |||||||||||||||||||||
Investment asset valuation reserves: | |||||||||||||||||||||
Mortgage loans | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
Real estate | — | — | — | — | — | ||||||||||||||||
Allowance for doubtful accounts: | |||||||||||||||||||||
Premiums, accounts and notes receivable | $ | 1,782 | $ | (264 | ) | $ | — | $ | — | $ | 1,518 | ||||||||||
Deferred tax asset valuation allowance | — | — | — | — | — | ||||||||||||||||
Reinsurance receivables | 9,010 | 340 | — | — | 9,350 | ||||||||||||||||
For the year ended December 31, 2013: | |||||||||||||||||||||
Investment asset valuation reserves: | |||||||||||||||||||||
Mortgage loans | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
Real estate | — | — | — | — | — | ||||||||||||||||
Allowance for doubtful accounts: | |||||||||||||||||||||
Premiums, accounts and notes receivable | $ | 1,338 | $ | 444 | $ | — | $ | — | $ | 1,782 | |||||||||||
Deferred tax asset valuation allowance | — | — | — | — | — | ||||||||||||||||
Reinsurance receivables | 9,010 | — | — | — | 9,010 | ||||||||||||||||
For the year ended December 31, 2012: | |||||||||||||||||||||
Investment asset valuation reserves: | |||||||||||||||||||||
Mortgage loans | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
Real estate | — | — | — | — | — | ||||||||||||||||
Allowance for doubtful accounts: | |||||||||||||||||||||
Premiums, accounts and notes receivable | $ | 1,476 | $ | (138 | ) | $ | — | $ | — | $ | 1,338 | ||||||||||
Deferred tax asset valuation allowance | — | — | — | — | — | ||||||||||||||||
Reinsurance receivables | 10,022 | (1,012 | ) | — | — | 9,010 |
Supplementary_Information_For_
Supplementary Information For Property Casualty Underwriters | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||
Supplementary Information For Property Casualty Underwriters | GLOBAL INDEMNITY PLC | ||||||||||||||||||||||||||||
SCHEDULE VI—SUPPLEMENTARY INFORMATION FOR PROPERTY CASUALTY UNDERWRITERS | |||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Deferred | Reserves for | Discount If | Unearned | ||||||||||||||||||||||||||
Policy | Unpaid Claims | Any Deducted | Premiums | ||||||||||||||||||||||||||
Acquisition | and Claim | ||||||||||||||||||||||||||||
Costs | Adjustment | ||||||||||||||||||||||||||||
Expenses | |||||||||||||||||||||||||||||
Consolidated Property & Casualty Entities: | |||||||||||||||||||||||||||||
As of December 31, 2014 | $ | 25,238 | $ | 675,472 | $ | 4,000 | $ | 120,815 | |||||||||||||||||||||
As of December 31, 2013 | 22,177 | 779,466 | 6,000 | 116,629 | |||||||||||||||||||||||||
As of December 31, 2012 | 18,265 | 879,114 | 8,000 | 94,114 | |||||||||||||||||||||||||
Earned | Net | Claims and Claim Adjustment | Amortization Of | Paid Claims | Premiums | ||||||||||||||||||||||||
Premiums | Investment | Expense Incurred Related To | Deferred Policy | and Claim | Written | ||||||||||||||||||||||||
Income | Acquisition Costs | Adjustment | |||||||||||||||||||||||||||
Current Year | Prior Year | Expenses | |||||||||||||||||||||||||||
Consolidated Property & Casualty Entities: | |||||||||||||||||||||||||||||
For the year ended December 31, 2014 | $ | 268,519 | $ | 28,821 | $ | 153,994 | $ | (16,433 | ) | $ | 57,051 | $ | 172,265 | $ | 273,181 | ||||||||||||||
For the year ended December 31, 2013 | 248,722 | 37,209 | 140,873 | (7,882 | ) | 53,787 | 184,564 | 271,984 | |||||||||||||||||||||
For the year ended December 31, 2012 | 238,862 | 47,557 | 149,183 | 4,445 | 48,852 | 202,786 | 219,547 |
Principles_of_Consolidation_an1
Principles of Consolidation and Basis of Presentation (Policies) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Business Segments | As of December 31, 2014, the Company managed its business through two business segments: Insurance Operations, which includes the operations of United National Insurance Company, Diamond State Insurance Company, United National Specialty Insurance Company, Penn-America Insurance Company, Penn-Star Insurance Company, Penn-Patriot Insurance Company, American Insurance Adjustment Agency, Inc., Collectibles Insurance Services, LLC, Global Indemnity Insurance Agency, LLC, and J.H. Ferguson & Associates, LLC, and Reinsurance Operations, which includes the operations of Global Indemnity Reinsurance. | |||
Property and Casualty Insurance | The Company offers property and casualty insurance products in the excess and surplus lines marketplace through its Insurance Operations and provides third party treaty reinsurance for specialty property and casualty insurance and reinsurance companies through its Reinsurance Operations. As of December 31, 2014, the Company managed its Insurance Operations by differentiating them into three product classifications: Penn-America, which markets to small commercial businesses through a select network of wholesale general agents with specific binding authority; United National, which markets insurance products for targeted insured segments, including specialty products, such as property, general liability, and professional lines through program administrators with specific binding authority; and Diamond State, which markets property, casualty, and professional lines products, which are developed by the Company’s underwriting department by individuals with expertise in those lines of business, through wholesale brokers and also markets through program administrators having specific binding authority. These product classifications comprise the Company’s Insurance Operations business segment and are not considered individual business segments because each product has similar economic characteristics, distribution, and coverage. Collectively, the Company’s U.S. insurance subsidiaries are licensed in all 50 states and the District of Columbia. The Company’s Reinsurance Operations consist solely of the operations of its Bermuda-based wholly-owned subsidiary, Global Indemnity Reinsurance. Global Indemnity Reinsurance is a treaty reinsurer of specialty property and casualty insurance and reinsurance companies. The Company’s Reinsurance Operations segment provides reinsurance solutions through brokers and primary writers including insurance and reinsurance companies. | |||
The consolidated financial statements have been prepared in conformity with United States of America generally accepted accounting principles (“GAAP”), which differs in certain respects from those principles followed in reports to insurance regulatory authorities. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | ||||
Intercompany Balances and Transactions | The consolidated financial statements include the accounts of Global Indemnity and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. | |||
The Consolidated Statement of Cash Flows for the years ended December 31, 2013 and 2012 that were included in the Form 10-K for the annual periods ended December 31, 2013 and 2012 classified $3.0 million and $0.4 million, respectively, as “Other assets and liabilities, net” within the “Cash flows from operating activities” section. These amounts were properly reclassified to the line item “Amortization and depreciation” in the Consolidated Statement of Cash Flows for the years ended December 31, 2013 and 2012 as included in this Form 10-K for the annual period ended December 31, 2014 (“the December 31, 2014 10K”). These reclassifications do not impact “Net cash flows used for operating activities” nor does it impact any other financial metric or disclosure within the December 31, 2014 10K. The Company does not believe that these adjustments are material to the current or to any prior years’ consolidated financial statements. | ||||
Certain other prior period amounts have been reclassified to conform to the current period presentation. | ||||
Restricted Cash | Restricted Cash | |||
At December 31, 2014, the Company had $113.7 million of cash in escrow to fund the acquisition of American Reliable on January 1, 2015. | ||||
Investments | Investments | |||
The Company’s investments in fixed maturities and equity securities are classified as available for sale and are carried at their fair value. 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 fair values of the Company’s available for sale portfolio, excluding limited partnership interests, are determined on the basis of quoted market prices where available. If quoted market prices are not available, the Company uses third party pricing services to assist in determining fair value. In many instances, these services examine the pricing of similar instruments to estimate fair value. The Company purchases bonds with the expectation of holding them to their maturity; however, changes to the portfolio are sometimes required to assure it is appropriately matched to liabilities. In addition, changes in financial market conditions and tax considerations may cause the Company to sell an investment before it matures. The difference between amortized cost and fair value of the Company’s available for sale investments, net of the effect of deferred income taxes, is reflected in accumulated other comprehensive income in shareholders’ equity and, accordingly, has no effect on net income other than for the credit loss component of impairments deemed to be other than temporary. | ||||
The Company’s investments in other invested assets are comprised of limited liability partnership interests and are carried at their fair value. The change in the difference between cost and the fair value of the partnership interests, net of the effect of deferred income taxes, is reflected in accumulated other comprehensive income in shareholders’ equity and, accordingly, has no effect on net income other than for impairments deemed to be other than temporary. | ||||
The Company’s investments in other invested assets were valued at $33.7 million and $3.5 million as of December 31, 2014 and 2013, respectively. Both of these amounts relate to investments in limited partnerships. The Company does not have access to daily valuations, therefore; the estimated fair value of the limited partnerships are measured utilizing net asset value as a practical expedient for the limited partnerships. | ||||
Net realized gains and losses on investments are determined based on the specific identification method. | ||||
The Company regularly performs various analytical valuation procedures with respect to its investments, including reviewing each fixed maturity security in an unrealized loss position to assess whether the security is a candidate for credit loss. Specifically, the Company considers credit rating, market price, and issuer specific financial information, among other factors, to assess the likelihood of collection of all principal and interest as contractually due. Securities for which the Company determines that a credit loss is likely are subjected to further analysis through discounted cash flow testing to estimate the credit loss to be recognized in earnings, if any. The specific methodologies and significant assumptions used by asset class are discussed below. Upon identification of such securities and periodically thereafter, a detailed review is performed to determine whether the decline is considered other than temporary. This review includes an analysis of several factors, including but not limited to, the credit ratings and cash flows of the securities and the magnitude and length of time that the fair value of such securities is below cost. | ||||
For fixed maturities, the factors considered in reaching the conclusion that a decline below cost is other than temporary include, among others, whether: | ||||
-1 | the issuer is in financial distress; | |||
-2 | the investment is secured; | |||
-3 | a significant credit rating action occurred; | |||
-4 | scheduled interest payments were delayed or missed; | |||
-5 | changes in laws or regulations have affected an issuer or industry; | |||
-6 | the investment has an unrealized loss and was identified by the Company’s investment manager as an investment to be sold before recovery or maturity; and | |||
-7 | the investment failed cash flow projection testing to determine if anticipated principal and interest payments will be realized. | |||
According to accounting guidance for debt securities in an unrealized loss position, the Company is required to assess whether it has the intent to sell the debt security or more likely than not will be required to sell the debt security before the anticipated recovery. If either of these conditions is met the Company must recognize an other than temporary impairment with the entire unrealized loss being recorded through earnings. For debt securities in an unrealized loss position not meeting these conditions, the Company assesses whether the impairment of a security is other than temporary. If the impairment is deemed to be other than temporary, the Company must separate the other than temporary impairment into two components: the amount representing the credit loss and the amount related to all other factors, such as changes in interest rates. The credit loss represents the portion of the amortized book value in excess of the net present value of the projected future cash flows discounted at the effective interest rate implicit in the debt security prior to impairment. The credit loss component of the other than temporary impairment is recorded through earnings, whereas the amount relating to factors other than credit losses is recorded in other comprehensive income, net of taxes. | ||||
For equity securities, management carefully reviews all securities with unrealized losses to determine if a security should be impaired and further focuses on securities that have either: | ||||
-1 | persisted with unrealized losses for more than twelve consecutive months or | |||
-2 | the value of the investment has been 20% or more below cost for six continuous months or more. | |||
The amount of any write-down, including those that are deemed to be other than temporary, is included in earnings as a realized loss in the period in which the impairment arose. | ||||
For an analysis of other than temporary losses that were recorded for the years ended December 31, 2014, 2013, and 2012, please see Note 3 below. | ||||
Cash and Cash Equivalents | Cash and Cash Equivalents | |||
For the purpose of the statements of cash flows, the Company considers all liquid instruments with an original maturity of three months or less to be cash equivalents. The Company has a cash management program that provides for the investment of excess cash balances primarily in short-term money market instruments. Generally, bank balances exceed federally insured limits. The carrying amount of cash and cash equivalents approximates fair value. | ||||
At December 31, 2014, the Company had approximately $39.1 million of cash and cash equivalents that was invested in a diversified portfolio of high quality short-term debt securities. | ||||
Valuation of Premium Receivable | Valuation of Premium Receivable | |||
The Company evaluates the collectability of premium receivable based on a combination of factors. In instances in which the Company is aware of a specific circumstance where a party may be unable to meet its financial obligations to the Company, a specific allowance for bad debts against amounts due is recorded to reduce the net receivable to the amount reasonably believed by management to be collectible. For all remaining balances, allowances are recognized for bad debts based on the length of time the receivables are past due. The allowance for bad debts was $1.5 million and $1.8 million as of December 31, 2014 and 2013, respectively. | ||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets | |||
The Company tests for impairment of goodwill at least annually and more frequently as circumstances warrant in accordance with applicable accounting guidance. Accounting guidance allows for the testing of goodwill for impairment using both qualitative and quantitative factors. Impairment of goodwill is recognized only if the carrying amount of the reporting unit, including goodwill, exceeds the fair value of the reporting unit. The amount of the impairment loss would be equal to the excess carrying value of the goodwill over the implied fair value of the reporting unit goodwill. Based on the qualitative assessment performed in 2014, there was no impairment of goodwill as of December 31, 2014. | ||||
Impairment of intangible assets with an indefinite useful life is tested at least annually and more frequently as circumstances warrant in accordance with applicable accounting guidance. Accounting guidance allows for the testing of indefinite lived intangible assets for impairment using both qualitative and quantitative factors. Impairment of indefinite lived intangible assets is recognized only if the carrying amount of the intangible assets exceeds the fair value of said assets. The amount of the impairment loss would be equal to the excess carrying value of the assets over the fair value of said assets. Based on the qualitative assessment performed in 2014, there were no impairments of indefinite lived intangible assets as of December 31, 2014. | ||||
Intangible assets that are not deemed to have an indefinite useful life are amortized over their estimated useful lives. The carrying amounts of definite lived intangible assets are regularly reviewed for indicators of impairment in accordance with applicable accounting guidance. Impairment is recognized only if the carrying amount of the intangible asset is in excess of its undiscounted projected cash flows. The impairment is measured as the difference between the carrying amount and the estimated fair value of the asset. As of December 31, 2014, there were no triggering events that occurred during the year that would result in an impairment of definite lived intangible assets. | ||||
Reinsurance | Reinsurance | |||
In the normal course of business, the Company seeks to reduce the loss that may arise from events that cause unfavorable underwriting results by reinsuring certain levels of risk from various areas of exposure with reinsurers. Amounts receivable from reinsurers are estimated in a manner consistent with the reinsured policy and the reinsurance contract. | ||||
The Company regularly reviews the collectability of reinsurance receivables. An allowance for uncollectible reinsurance receivable is recognized based on the financial strength of the reinsurers and the length of time any balances are past due. Any changes in the allowance resulting from this review are included in income during the period in which the determination is made. The allowance for uncollectible reinsurance was $9.4 million and $9.0 million as of December 31, 2014 and 2013, respectively. | ||||
The applicable accounting guidance requires that the reinsurer must assume significant insurance risk under the reinsured portions of the underlying insurance contracts and that there must be a reasonably possible chance that the reinsurer may realize a significant loss from the transaction. The Company has evaluated its reinsurance contracts and concluded that each contract qualifies for reinsurance accounting treatment pursuant to this guidance. | ||||
Income Taxes | Income Taxes | |||
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. | ||||
A valuation allowance is provided when it is more likely than not that some portion of the deferred tax assets will not be realized. The deferred tax asset balance is analyzed regularly by management. This assessment requires significant judgment and considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of carryforward periods, and tax planning strategies and/or actions. Management believes that it is more likely than not that the results of future operations will generate sufficient taxable income to realize the remaining deferred income tax assets, and accordingly, the Company has not established any valuation allowances. | ||||
Deferred Acquisition Costs | Deferred Acquisition Costs | |||
The costs of acquiring new and renewal insurance and reinsurance contracts include commissions, premium taxes and certain other costs that vary with and are directly related to the successful acquisition of new and renewal insurance and reinsurance contracts. The excess of the Company’s costs of acquiring new and renewal insurance and reinsurance contracts over the related ceding commissions earned from reinsurers is capitalized as deferred acquisition costs and amortized over the period in which the related premiums are earned. | ||||
The amortization of deferred acquisition costs for the years ended December 31, 2014, 2013, and 2012 was $57.1 million, $53.8 million, and $48.9 million, respectively. | ||||
Premium Deficiency | Premium Deficiency | |||
In accordance with accounting guidance for insurance enterprises, the method followed in computing deferred acquisition costs limits them to their estimated realizable value that gives effect to the premium to be earned, related investment income, losses and loss adjustment expenses, and certain other costs expected to be incurred as the premium is earned. A premium deficiency is recognized if the sum of expected loss and loss adjustment expenses and unamortized acquisition costs exceeds related unearned premium after consideration of investment income. This evaluation is done at a product line level in Insurance Operations and at a treaty level in Reinsurance Operations. Any future expected loss on the related unearned premium is recorded first by impairing the unamortized acquisition costs on the related unearned premium followed by an increase to loss and loss adjustment expense reserves on additional expected loss in excess of unamortized acquisition costs. | ||||
For the years ended December 31, 2014, 2013, and 2012, the total premium deficiency charges were $0.4 million, $1.7 million, and $0.5 million, respectively, comprised solely of reductions to unamortized deferred acquisition costs within the commercial automobile lines in Insurance Operations. The 2013 premium deficiency charge of $1.7 million was recorded as of September 30, 2013. Based on the Company’s analysis, the Company expensed acquisition cost as incurred for the remainder of 2013 and 2014 for the commercial automobile lines in Insurance Operations. The 2012 premium deficiency charge was recorded as of December 31, 2012. As the charges were a reduction of unamortized deferred acquisition costs in each respective period, no premium deficiency reserve exists as of December 31, 2014 or 2013. | ||||
Derivative Instruments | Derivative Instruments | |||
The Company uses derivative instruments to manage its exposure to cash flow variability from interest rate risk. The derivative instruments are carried on the balance sheet at fair value and included in other assets or other liabilities. Changes in the fair value of the derivative instruments and the periodic net interest settlements under the derivatives instruments are recognized as net realized investment gains on the consolidated statement of operations. | ||||
Margin Borrowing Facilities | Margin Borrowing Facilities | |||
The carrying amounts reported in the balance sheet represent the outstanding borrowings. The outstanding borrowings are due on demand; therefore, the cash receipts and cash payments related to the margin borrowing facilities are shown net in the consolidated statement of cash flows. | ||||
Notes and Debentures Payable | Notes and Debentures Payable | |||
In 2013, the Company repaid the entire outstanding principal due on the junior subordinated debentures. The Company’s business trust subsidiaries were cancelled in the 4th quarter of 2013. | ||||
Unpaid Losses and Loss Adjustment Expenses | Unpaid Losses and Loss Adjustment Expenses | |||
The liability for unpaid losses and loss adjustment expenses represents the Company’s best estimate of future amounts needed to pay losses and related settlement expenses with respect to events insured by the Company. This liability is based upon the accumulation of individual case estimates for losses reported prior to the close of the accounting period with respect to direct business, estimates received from ceding companies with respect to assumed reinsurance, and estimates of unreported losses. | ||||
The process of establishing the liability for unpaid losses and loss adjustment expenses of a property and casualty insurance company is complex, requiring the use of informed actuarially based estimates and management’s judgment. In some cases, significant periods of time, up to several years or more, may elapse between the occurrence of an insured loss and the reporting of that loss to the Company. To establish this liability, the Company regularly reviews and updates the methods of making such estimates and establishing the resulting liabilities. Any resulting adjustments are recorded in income during the period in which the determination is made. | ||||
Premiums | Premiums | |||
Premiums are recognized as revenue ratably over the term of the respective policies and treaties. Unearned premiums are computed on a pro rata basis to the day of expiration. | ||||
Contingent Commissions | Contingent Commissions | |||
Certain professional general agencies of the Insurance Operations are paid special incentives, referred to as contingent commissions, when results of business produced by these agencies are more favorable than predetermined thresholds. Similarly, in some circumstances, companies that cede business to the Reinsurance Operations are paid profit commissions based on the profitability of the ceded portfolio. These commissions are charged to other underwriting expenses when incurred. The liability for the unpaid portion of these commissions, which is stated separately on the face of the consolidated balance sheet as contingent commissions, was $13.0 million and $12.7 million as of December 31, 2014 and 2013, respectively. | ||||
Share-Based Compensation | Share-Based Compensation | |||
The Company accounts for stock options and other equity based compensation using the modified prospective application of the fair value-based method permitted by the appropriate accounting guidance. See Note 14 for details. | ||||
Earnings per Share | Earnings per Share | |||
Basic earnings per share have been calculated by dividing net income available to common shareholders by the weighted-average ordinary shares outstanding. Diluted earnings per share has been calculated by dividing net income available to common shareholders by the sum of the weighted-average ordinary shares outstanding and the weighted-average common share equivalents outstanding, which include options and other equity awards. See Note 16 for details. | ||||
Foreign Currency | Foreign Currency | |||
The Company maintains investments and cash accounts in foreign currencies related to the operations of its business. At period-end, the Company re-measures non-U.S. currency financial assets to their current U.S. dollar equivalent. The resulting gain or loss for foreign denominated investments is reflected in accumulated other comprehensive income in shareholders’ equity; whereas, the gain or loss on foreign denominated cash accounts is reflected in income during the period. Financial liabilities, if any, are generally adjusted within the reserving process. However, for known losses on claims to be paid in foreign currencies, the Company re-measures the liabilities to their current U.S. dollar equivalent each period end with the resulting gain or loss reflected in income during the period. Net transaction gains, primarily comprised of re-measurement of known losses on claims to be paid in foreign currencies, were $0.5 million and $0.3 million for the years ended December 31, 2014 and 2013, respectively. Net transaction losses, primarily comprised of re-measurement of known losses on claims to be paid in foreign currencies, were $0.7 million for the year ended December 31, 2012. | ||||
Out-of-Period Adjustment | Out-of-Period Adjustment | |||
During the preparation of the Company’s consolidated financial statements for the year ended December 31, 2012, the Company identified an error in the consolidated financial statements as of and for the years ended December 31, 2011, 2010 and 2009 related to the recognition of incurred losses on two of the assumed reinsurance treaties at the Company’s Reinsurance Operations. These contracts relate to accident years 2009 and 2010 and have not been renewed. During the years ended December 31, 2009, 2010 and 2011, the Company’s internal calculations over-recorded the profitability of these two treaties, resulting in net income and equity being overstated by approximately $1.6 million over the three year period. There was no impact to the Company’s cash flows during these periods. | ||||
The Company corrected this error in its consolidated financial statements as of and for the year ended December 31, 2012 by increasing the “Unpaid losses and loss adjustment expenses” line item on the consolidated balance sheet and the “Net losses and loss adjustment expenses” line item on the consolidated statement of operations by $1.6 million, or $0.06 per diluted share, the cumulative effect of the error. The Company does not believe that these adjustments are material to any prior years’ consolidated financial statements. As a result, the Company has not restated or adjusted any prior period amounts for this error. | ||||
Other income (loss) | Other income (loss) | |||
On December 31, 2013, Diamond State Insurance Company sold all the outstanding shares of capital stock of one of its wholly owned subsidiaries, United National Casualty Insurance Company to an unrelated party. Diamond State Insurance Company received a one-time payment of $26.6 million and recognized a pretax gain of $5.2 million which is reflected in other income (loss). Management deemed this transaction to be an asset sale with the assets primarily comprised of investments and insurance licenses. This transaction did not have a significant impact on the ongoing business operations of the Company. | ||||
Fair Value Measurement Policy | The Company’s invested assets and derivative instruments are carried at their fair value and are categorized based upon a fair value hierarchy: | |||
• | Level 1-inputs utilize quoted prices (unadjusted) in active markets for identical assets that the Company has the ability to access at the measurement date. | |||
• | Level 2-inputs utilize other than quoted prices included in Level 1 that are observable for similar assets, either directly or indirectly. | |||
• | Level 3-inputs are unobservable for the asset, and include situations where there is little, if any, market activity for the asset. | |||
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset. | ||||
Both observable and unobservable inputs may be used to determine the fair value of positions that the Company has classified within the Level 3 category. As a result, the unrealized gains and losses for invested assets within the Level 3 category presented in the tables below may include changes in fair value that are attributed to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long-dated volatilities) inputs. | ||||
Based on the typical trading volumes and the lack of quoted market prices for fixed maturities, security prices are derived through recent reported trades for identical or similar securities making adjustments through the reporting date based upon available market observable information. If there are no recent reported trades, matrix or model processes are used to develop a security price where future cash flow expectations are developed based upon collateral performance and discounted at an estimated market rate. Included in the pricing of asset-backed securities, collateralized mortgage obligations, and mortgage-backed securities are estimates of the rate of future prepayments of principal over the remaining life of the securities. Such estimates are derived based on the characteristics of the underlying structure and prepayment speeds previously experienced at the interest rate levels projected for the underlying collateral. For corporate loans, price quotes from multiple dealers along with recent reported trades for identical or similar securities are used to develop prices. The estimated fair value of the interest rate swaps is obtained from a third party financial institution who utilizes observable inputs such as the forward interest rate curve. | ||||
The Company’s pricing vendors provide prices for all investment categories except for investments in limited partnerships which are measured utilizing net assets values as a practical expedient. One vendor provides prices for equity securities and all fixed maturity categories. | ||||
The following is a description of the valuation methodologies used by the Company’s pricing vendors for investment securities carried at fair value: | ||||
• | Equity prices are received from all primary and secondary exchanges. | |||
• | Corporate and agency bonds are evaluated by utilizing a multi-dimensional relational model. For bonds with early redemption options, an option adjusted spread model is utilized. Both asset classes use standard inputs and incorporate security set up, defined sector breakdown, benchmark yields, apply base spreads, yield to maturity, and adjust for corporate actions. | |||
• | A volatility-driven multi-dimensional spread table or an option-adjusted spread model and prepayment model is used for agency commercial mortgage obligations (“CMO”). For non-agency CMOs, a prepayment/spread/yield/price adjustment model is utilized. CMOs are categorized with mortgage-backed securities in the tables listed above. For ABSs, a multi-dimensional, collateral specific spread / prepayment speed tables is utilized. For both asset classes, evaluations utilize standard inputs plus new issue data, monthly payment information, and collateral performance. The evaluated pricing models incorporate security set-up, prepayment speeds, cash flows, and treasury swap curves and spread adjustments. | |||
• | For municipals, a multi-dimensional relational model is used to evaluate securities within this asset class. The evaluated pricing models for this asset class incorporate security set-up, benchmark yields, apply base spreads, yield to worst or market convention, ratings updates, prepayment schedules and adjustments for material events notices. | |||
• | U.S. treasuries are evaluated by obtaining feeds from a number of live data sources including active market makers and inter-dealer brokers. | |||
• | For MBSs, a matrix model correlation to TBA (a forward MBS trade) or benchmarking is utilized to value a security. | |||
Statutory Income Tax Rates | The statutory income tax rate of each country is applied against the annual taxable income of each country to calculate the annual income tax expense. | |||
Tax Uncertainties | The Company applies a more-likely-than-not recognition threshold for all tax uncertainties whereby it only recognizes those tax benefits that have a greater than 50% likelihood of being sustained upon examination by the taxing authorities. | |||
Loss Reserves and Prior Year Development | When analyzing loss reserves and prior year development, the Company considers many factors, including the frequency and severity of claims, loss trends, case reserve settlements that may have resulted in significant development, and any other additional or pertinent factors that may impact reserve estimates. | |||
Repurchased Shares | The excess cost of the repurchased shares over their par value was classified to additional paid-in capital. | |||
Share-Based Compensation | The fair value method of accounting recognizes share-based compensation to employees and non-employee directors in the statements of operations using the grant-date fair value of the stock options and other equity-based compensation expensed over the requisite service and vesting period. | |||
For the purpose of determining the fair value of stock option awards, the Company uses the Black-Scholes option-pricing model. An estimation of forfeitures is required when recognizing compensation expense which is then adjusted over the requisite service period should actual forfeitures differ from such estimates. Changes in estimated forfeitures are recognized through a cumulative adjustment to compensation in the period of change. | ||||
The prescribed accounting guidance also requires tax benefits relating to excess stock-based compensation deductions to be prospectively presented in the statement of cash flows as financing cash inflows. | ||||
Financial Information | Global Indemnity Reinsurance must also prepare annual statutory financial statements. The Bermuda Insurance Act 1978 (the “Insurance Act”) prescribes rules for the preparation and substance of these statutory financial statements which include, in statutory form, a balance sheet, an income statement, a statement of capital and surplus and notes thereto. The statutory financial statements are not prepared in accordance with GAAP or SAP and are distinct from the financial statements prepared for presentation to Global Indemnity Reinsurance’s shareholders and under the Bermuda Companies Act 1981 (the “Companies Act”), which financial statements will be prepared in accordance with GAAP. | |||
The principal differences between statutory financial statements prepared under the Insurance Act and GAAP are as follows: | ||||
• | Under the Insurance Act, policy acquisition costs, such as commissions, premium taxes, fees and other costs of underwriting policies are charged to current operations as incurred, while under GAAP such costs are deferred and amortized on a pro rata basis over the period covered by the policy. | |||
• | Under the Insurance Act, prepaid expenses and intangible assets are charged to current operations as incurred, while under GAAP such costs are deferred and amortized on a pro rata basis. | |||
• | Under the Insurance Act, unpaid losses and loss adjustment expenses and unearned premiums are reported net of the effects of reinsurance transactions, whereas under GAAP, unpaid losses and loss adjustment expenses and unearned premiums are reported gross of reinsurance. | |||
Global Indemnity Reinsurance | ||||
Financial Information | GAAP differs in certain respects from Statutory Accounting Principles (“SAP”) as prescribed or permitted by the various U.S. state insurance departments. The principal differences between SAP and GAAP are as follows: | |||
• | Under SAP, investments in debt securities are primarily carried at amortized cost, while under GAAP the Company records its debt securities at estimated fair value. | |||
• | Under SAP, policy acquisition costs, such as commissions, premium taxes, fees and other costs of underwriting policies are charged to current operations as incurred, while under GAAP such costs are deferred and amortized on a pro rata basis over the period covered by the policy. | |||
• | Under SAP, certain assets designated as “Non-admitted assets” (such as prepaid expenses) are charged against surplus. | |||
• | Under SAP, net deferred income tax assets are admitted following the application of specified criteria, with the resulting admitted deferred tax amount being credited directly to surplus. | |||
• | Under SAP, certain premium receivables are non-admitted and are charged against surplus based upon aging criteria. | |||
• | Under SAP, the costs and related receivables for guaranty funds and other assessments are recorded based on management’s estimate of the ultimate liability and related receivable settlement, while under GAAP such costs are accrued when the liability is probable and reasonably estimable and the related receivable amount is based on future premium collections or policy surcharges from in-force policies. | |||
• | Under SAP, unpaid losses and loss adjustment expenses and unearned premiums are reported net of the effects of reinsurance transactions, whereas under GAAP, unpaid losses and loss adjustment expenses and unearned premiums are reported gross of reinsurance. | |||
• | Under SAP, a provision for reinsurance is charged to surplus based on the authorized status of reinsurers, available collateral, and certain aging criteria, whereas under GAAP, an allowance for uncollectible reinsurance is established based on management’s best estimate of the collectability of reinsurance receivables. |
Investments_Tables
Investments (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Schedule of Amortized Cost and Estimated Fair Value of Investments | The amortized cost and estimated fair value of investments were as follows as of December 31, 2014 and 2013: | ||||||||||||||||||||||||
(Dollars in thousands) | Amortized | Gross | Gross | Estimated | Other than | ||||||||||||||||||||
Cost | Unrealized | Unrealized | Fair Value | temporary | |||||||||||||||||||||
Gains | Losses | impairments | |||||||||||||||||||||||
recognized | |||||||||||||||||||||||||
in AOCI (1) | |||||||||||||||||||||||||
As of December 31, 2014 | |||||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||||
U.S. treasury and agency obligations | $ | 78,569 | $ | 2,281 | $ | (83 | ) | $ | 80,767 | $ | — | ||||||||||||||
Obligations of states and political subdivisions | 188,452 | 3,718 | (697 | ) | 191,473 | — | |||||||||||||||||||
Mortgage-backed securities | 205,814 | 3,709 | (764 | ) | 208,759 | (4 | ) | ||||||||||||||||||
Asset-backed securities | 177,853 | 713 | (303 | ) | 178,263 | (13 | ) | ||||||||||||||||||
Commercial mortgage-backed securities | 133,984 | 21 | (847 | ) | 133,158 | — | |||||||||||||||||||
Corporate bonds | 380,704 | 3,421 | (709 | ) | 383,416 | — | |||||||||||||||||||
Foreign corporate bonds | 107,572 | 625 | (558 | ) | 107,639 | — | |||||||||||||||||||
Total fixed maturities | 1,272,948 | 14,488 | (3,961 | ) | 1,283,475 | (17 | ) | ||||||||||||||||||
Common stock | 99,297 | 25,689 | (2,938 | ) | 122,048 | — | |||||||||||||||||||
Other invested assets | 33,174 | 489 | — | 33,663 | — | ||||||||||||||||||||
Total | $ | 1,405,419 | $ | 40,666 | $ | (6,899 | ) | $ | 1,439,186 | $ | (17 | ) | |||||||||||||
-1 | Represents the total amount of other than temporary impairment losses relating to factors other than credit losses recognized in accumulated other comprehensive income (“AOCI”). | ||||||||||||||||||||||||
(Dollars in thousands) | Amortized | Gross | Gross | Estimated | Other than | ||||||||||||||||||||
Cost | Unrealized | Unrealized | Fair Value | temporary | |||||||||||||||||||||
Gains | Losses | impairments | |||||||||||||||||||||||
recognized | |||||||||||||||||||||||||
in AOCI (2) | |||||||||||||||||||||||||
As of December 31, 2013 | |||||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||||
U.S. treasury and agency obligations | $ | 78,510 | $ | 3,330 | $ | (166 | ) | $ | 81,674 | $ | — | ||||||||||||||
Obligations of states and political subdivisions | 178,705 | 4,472 | (2,241 | ) | 180,936 | — | |||||||||||||||||||
Mortgage-backed securities | 228,550 | 4,219 | (2,859 | ) | 229,910 | (5 | ) | ||||||||||||||||||
Asset-backed securities | 167,454 | 1,210 | (228 | ) | 168,436 | (19 | ) | ||||||||||||||||||
Commercial mortgage-backed securities | 54,822 | 9 | (856 | ) | 53,975 | — | |||||||||||||||||||
Corporate bonds and loans | 426,872 | 9,112 | (592 | ) | 435,392 | — | |||||||||||||||||||
Foreign corporate bonds | 52,772 | 1,269 | — | 54,041 | — | ||||||||||||||||||||
Total fixed maturities | 1,187,685 | 23,621 | (6,942 | ) | 1,204,364 | (24 | ) | ||||||||||||||||||
Common stock | 191,425 | 63,281 | (636 | ) | 254,070 | — | |||||||||||||||||||
Other invested assets | 3,065 | 424 | — | 3,489 | — | ||||||||||||||||||||
Total | $ | 1,382,175 | $ | 87,326 | $ | (7,578 | ) | $ | 1,461,923 | $ | (24 | ) | |||||||||||||
-2 | Represents the total amount of other than temporary impairment losses relating to factors other than credit losses recognized in accumulated other comprehensive income (“AOCI”). | ||||||||||||||||||||||||
Summary of Amortized Cost and Estimated Fair Value Through Fixed Maturities | Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. | ||||||||||||||||||||||||
(Dollars in thousands) | Amortized | Estimated | |||||||||||||||||||||||
Cost | Fair Value | ||||||||||||||||||||||||
Due in one year or less | $ | 133,140 | $ | 134,722 | |||||||||||||||||||||
Due in one year through five years | 546,653 | 552,135 | |||||||||||||||||||||||
Due in five years through ten years | 41,831 | 42,469 | |||||||||||||||||||||||
Due in ten years through fifteen years | 11,228 | 11,316 | |||||||||||||||||||||||
Due after fifteen years | 22,445 | 22,653 | |||||||||||||||||||||||
Mortgage-backed securities | 205,814 | 208,759 | |||||||||||||||||||||||
Asset-backed securities | 177,853 | 178,263 | |||||||||||||||||||||||
Commercial mortgage-backed securities | 133,984 | 133,158 | |||||||||||||||||||||||
Total | $ | 1,272,948 | $ | 1,283,475 | |||||||||||||||||||||
Summary of Securities With Gross Unrealized Losses | The following table contains an analysis of the Company’s securities with gross unrealized losses, categorized by the period that the securities were in a continuous loss position as of December 31, 2014: | ||||||||||||||||||||||||
Less than 12 months | 12 months or longer (1) | Total | |||||||||||||||||||||||
(Dollars in thousands) | Fair Value | Gross | Fair | Gross | Fair Value | Gross | |||||||||||||||||||
Unrealized | Value | Unrealized | Unrealized | ||||||||||||||||||||||
Losses | Losses | Losses | |||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||||
U.S. treasury and agency obligations | $ | 11,728 | $ | (9 | ) | $ | 3,343 | $ | (74 | ) | $ | 15,071 | $ | (83 | ) | ||||||||||
Obligations of states and political subdivisions | 28,684 | (314 | ) | 28,061 | (383 | ) | 56,745 | (697 | ) | ||||||||||||||||
Mortgage-backed securities | 2,818 | (7 | ) | 51,203 | (757 | ) | 54,021 | (764 | ) | ||||||||||||||||
Asset-backed securities | 92,123 | (283 | ) | 1,683 | (20 | ) | 93,806 | (303 | ) | ||||||||||||||||
Commercial mortgage-backed securities | 92,664 | (525 | ) | 26,280 | (322 | ) | 118,944 | (847 | ) | ||||||||||||||||
Corporate bonds | 144,505 | (656 | ) | 3,216 | (53 | ) | 147,721 | (709 | ) | ||||||||||||||||
Foreign corporate bonds | 60,518 | (558 | ) | — | — | 60,518 | (558 | ) | |||||||||||||||||
Total fixed maturities | 433,040 | (2,352 | ) | 113,786 | (1,609 | ) | 546,826 | (3,961 | ) | ||||||||||||||||
Common stock | 20,002 | (2,808 | ) | 1,577 | (130 | ) | 21,579 | (2,938 | ) | ||||||||||||||||
Total | $ | 453,042 | $ | (5,160 | ) | $ | 115,363 | $ | (1,739 | ) | $ | 568,405 | $ | (6,899 | ) | ||||||||||
-1 | Fixed maturities in a gross unrealized loss position for twelve months or longer are primarily comprised of non-credit losses on investment grade securities where management does not intend to sell, and it is more likely than not that the Company will not be forced to sell the security before recovery. The Company has analyzed these securities and has determined that they are not other than temporarily impaired. | ||||||||||||||||||||||||
The following table contains an analysis of the Company’s securities with gross unrealized losses, categorized by the period that the securities were in a continuous loss position as of December 31, 2013: | |||||||||||||||||||||||||
Less than 12 months | 12 months or longer (1) | Total | |||||||||||||||||||||||
(Dollars in thousands) | Fair Value | Gross | Fair | Gross | Fair Value | Gross | |||||||||||||||||||
Unrealized | Value | Unrealized | Unrealized | ||||||||||||||||||||||
Losses | Losses | Losses | |||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||||
U.S. treasury and agency obligations | $ | 9,335 | $ | (166 | ) | $ | — | $ | — | $ | 9,335 | $ | (166 | ) | |||||||||||
Obligations of states and political subdivisions | 61,401 | (2,000 | ) | 9,922 | (241 | ) | 71,323 | (2,241 | ) | ||||||||||||||||
Mortgage-backed securities | 110,304 | (2,859 | ) | 2 | — | 110,306 | (2,859 | ) | |||||||||||||||||
Asset-backed securities | 42,247 | (228 | ) | 3 | — | 42,250 | (228 | ) | |||||||||||||||||
Commercial mortgage-backed securities | 45,642 | (856 | ) | — | — | 45,642 | (856 | ) | |||||||||||||||||
Corporate bonds and loans | 60,306 | (582 | ) | 376 | (10 | ) | 60,682 | (592 | ) | ||||||||||||||||
Total fixed maturities | 329,235 | (6,691 | ) | 10,303 | (251 | ) | 339,538 | (6,942 | ) | ||||||||||||||||
Common stock | 18,622 | (627 | ) | 140 | (9 | ) | 18,762 | (636 | ) | ||||||||||||||||
Total | $ | 347,857 | $ | (7,318 | ) | $ | 10,443 | $ | (260 | ) | $ | 358,300 | $ | (7,578 | ) | ||||||||||
-2 | Fixed maturities in a gross unrealized loss position for twelve months or longer are primarily comprised of non-credit losses on investment grade securities where management does not intend to sell, and it is more likely than not that the Company will not be forced to sell the security before recovery. The Company has analyzed these securities and has determined that they are not other than temporarily impaired. | ||||||||||||||||||||||||
Schedule of Other Than Temporary Impairments on Investments | The Company recorded the following other than temporary impairments (“OTTI”) on its investment portfolio for the years ended December 31, 2014, 2013, and 2012: | ||||||||||||||||||||||||
Years Ended December 31, | |||||||||||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||||
OTTI losses, gross | $ | (31 | ) | $ | (280 | ) | $ | (1,258 | ) | ||||||||||||||||
Portion of loss recognized in other comprehensive income (pre-tax) | — | — | 541 | ||||||||||||||||||||||
Net impairment losses on fixed maturities recognized in earnings | (31 | ) | (280 | ) | (717 | ) | |||||||||||||||||||
Equity securities | (470 | ) | (959 | ) | (4,656 | ) | |||||||||||||||||||
Total | $ | (501 | ) | $ | (1,239 | ) | $ | (5,373 | ) | ||||||||||||||||
Schedule of Credit Losses Recognized in Earnings | The following table is an analysis of the credit losses recognized in earnings on fixed maturities held by the Company as of December 31, 2014, 2013, and 2012 for which a portion of the OTTI loss was recognized in other comprehensive income (loss). | ||||||||||||||||||||||||
Years Ended December 31, | |||||||||||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Balance at beginning of period | $ | 54 | $ | 86 | $ | 86 | |||||||||||||||||||
Additions where no OTTI was previously recorded | — | — | 55 | ||||||||||||||||||||||
Additions where an OTTI was previously recorded | — | — | — | ||||||||||||||||||||||
Reductions for securities for which the company intends to sell or more likely than not will be required to sell before recovery | — | — | — | ||||||||||||||||||||||
Reductions reflecting increases in expected cash flows to be collected | — | — | — | ||||||||||||||||||||||
Reductions for securities sold during the period | (4 | ) | (32 | ) | (55 | ) | |||||||||||||||||||
Balance at end of period | $ | 50 | $ | 54 | $ | 86 | |||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income, Net of Tax | Accumulated other comprehensive income, net of tax, as of December 31, 2014 and 2013 was as follows: | ||||||||||||||||||||||||
(Dollars in thousands) | December 31, | ||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
Net unrealized gains from: | |||||||||||||||||||||||||
Fixed maturities | $ | 10,527 | $ | 16,679 | |||||||||||||||||||||
Common stock | 22,751 | 62,645 | |||||||||||||||||||||||
Other | 369 | 184 | |||||||||||||||||||||||
Deferred taxes | (10,263 | ) | (25,480 | ) | |||||||||||||||||||||
Accumulated other comprehensive income, net of tax | $ | 23,384 | $ | 54,028 | |||||||||||||||||||||
Changes in Accumulated Other Comprehensive Income | The following tables present the changes in accumulated other comprehensive income, net of tax, by component for the years ended December 31, 2014 and 2013: | ||||||||||||||||||||||||
Year Ended December 31, 2014 | Unrealized Gains | Foreign Currency | Accumulated Other | ||||||||||||||||||||||
(Dollars in thousands) | and Losses on | Items, Net of Tax | Comprehensive | ||||||||||||||||||||||
Available for Sale | Income, Net of Tax | ||||||||||||||||||||||||
Securities, Net of | |||||||||||||||||||||||||
Tax | |||||||||||||||||||||||||
Beginning balance | $ | 53,950 | $ | 78 | $ | 54,028 | |||||||||||||||||||
Other comprehensive income (loss) before reclassification | 6,820 | (287 | ) | 6,533 | |||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | (37,123 | ) | (54 | ) | (37,177 | ) | |||||||||||||||||||
Other comprehensive income (loss) | (30,303 | ) | (341 | ) | (30,644 | ) | |||||||||||||||||||
Ending balance | $ | 23,647 | $ | (263 | ) | $ | 23,384 | ||||||||||||||||||
Year Ended December 31, 2013 | Unrealized Gains | Foreign Currency | Accumulated Other | ||||||||||||||||||||||
(Dollars in thousands) | and Losses on | Items, Net of Tax | Comprehensive | ||||||||||||||||||||||
Available for Sale | Income, Net of Tax | ||||||||||||||||||||||||
Securities, Net of | |||||||||||||||||||||||||
Tax | |||||||||||||||||||||||||
Beginning balance | $ | 53,435 | $ | (85 | ) | $ | 53,350 | ||||||||||||||||||
Other comprehensive income (loss) before reclassification | 17,630 | (1 | ) | 17,629 | |||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | (17,115 | ) | 164 | (16,951 | ) | ||||||||||||||||||||
Other comprehensive income (loss) | 515 | 163 | 678 | ||||||||||||||||||||||
Ending balance | $ | 53,950 | $ | 78 | $ | 54,028 | |||||||||||||||||||
Reclassifications Out of Accumulated Other Comprehensive Income | The reclassifications out of accumulated other comprehensive income for the years ended December 31, 2014 and 2013 were as follows: | ||||||||||||||||||||||||
Amounts Reclassified | |||||||||||||||||||||||||
from Accumulated | |||||||||||||||||||||||||
Other Comprehensive | |||||||||||||||||||||||||
Income | |||||||||||||||||||||||||
(Dollars in thousands) | Years Ended | ||||||||||||||||||||||||
Details about Accumulated Other | December 31, | ||||||||||||||||||||||||
Comprehensive Income Components | Affected Line Item in the | 2014 | 2013 | ||||||||||||||||||||||
Consolidated Statements of Operations | |||||||||||||||||||||||||
Unrealized gains and losses on available for sale securities | Other net realized investment gains | $ | (57,114 | ) | $ | (27,476 | ) | ||||||||||||||||||
Other than temporary impairment losses on investments | 501 | 1,239 | |||||||||||||||||||||||
Total before tax | (56,613 | ) | (26,237 | ) | |||||||||||||||||||||
Income tax expense | 19,490 | 9,122 | |||||||||||||||||||||||
Net of tax | $ | (37,123 | ) | $ | (17,115 | ) | |||||||||||||||||||
Foreign Currency Items | Other net realized investment (gains) losses | $ | (83 | ) | 252 | ||||||||||||||||||||
Income tax expense (benefit) | 29 | (88 | ) | ||||||||||||||||||||||
Net of tax | $ | (54 | ) | $ | 164 | ||||||||||||||||||||
Total reclassifications | Net of tax | $ | (37,177 | ) | $ | (16,951 | ) | ||||||||||||||||||
Components of Net Realized Investment Gains | The components of net realized investment gains for the years ended December 31, 2014, 2013, and 2012 were as follows: | ||||||||||||||||||||||||
Years Ended December 31, | |||||||||||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||||
Gross realized gains | $ | 2,843 | $ | 1,857 | $ | 4,100 | |||||||||||||||||||
Gross realized losses | (703 | ) | (691 | ) | (1,800 | ) | |||||||||||||||||||
Net realized gains | 2,140 | 1,166 | 2,300 | ||||||||||||||||||||||
Common stock: | |||||||||||||||||||||||||
Gross realized gains | 55,907 | 27,302 | 10,630 | ||||||||||||||||||||||
Gross realized losses | (1,351 | ) | (2,483 | ) | (6,175 | ) | |||||||||||||||||||
Net realized gains | 54,556 | 24,819 | 4,455 | ||||||||||||||||||||||
Derivatives: | |||||||||||||||||||||||||
Gross realized gains | — | 1,668 | — | ||||||||||||||||||||||
Gross realized losses | (20,836 | ) | (241 | ) | — | ||||||||||||||||||||
Net realized gains (losses) | (20,836 | ) | 1,427 | — | |||||||||||||||||||||
Total net realized investment gains | $ | 35,860 | $ | 27,412 | $ | 6,755 | |||||||||||||||||||
Proceeds from Sales of Available-for-Sale Securities | The proceeds from sales of available for sale securities resulting in net realized investment gains for the years ended December 31, 2014, 2013, and 2012 were as follows: | ||||||||||||||||||||||||
Years Ended December 31, | |||||||||||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Fixed maturities | $ | 415,739 | $ | 292,200 | $ | 454,655 | |||||||||||||||||||
Equity securities | 191,765 | 101,379 | 50,176 | ||||||||||||||||||||||
Other invested assets | — | — | 1,114 | ||||||||||||||||||||||
Schedule of Investment Income | The sources of net investment income for the years ended December 31, 2014, 2013, and 2012 were as follows: | ||||||||||||||||||||||||
Years Ended December 31, | |||||||||||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Fixed maturities | $ | 26,788 | $ | 35,669 | $ | 41,969 | |||||||||||||||||||
Equity securities | 5,484 | 5,452 | 5,132 | ||||||||||||||||||||||
Cash and cash equivalents | 61 | 126 | 111 | ||||||||||||||||||||||
Other invested assets | 87 | 141 | 4,802 | ||||||||||||||||||||||
Total investment income | 32,420 | 41,388 | 52,014 | ||||||||||||||||||||||
Investment expense | (3,599 | ) | (4,179 | ) | (4,457 | ) | |||||||||||||||||||
Net investment income | $ | 28,821 | $ | 37,209 | $ | 47,557 | |||||||||||||||||||
Schedule of Total Investment Return | The Company’s total investment return on a pre-tax basis for the years ended December 31, 2014, 2013, and 2012 were as follows: | ||||||||||||||||||||||||
Years Ended December 31, | |||||||||||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Net investment income | $ | 28,821 | $ | 37,209 | $ | 47,557 | |||||||||||||||||||
Net realized investment gains | 35,860 | 27,412 | 6,755 | ||||||||||||||||||||||
Change in unrealized investment gains (losses) | (45,861 | ) | 7,301 | 18,417 | |||||||||||||||||||||
Net realized and unrealized investment returns | (10,001 | ) | 34,713 | 25,172 | |||||||||||||||||||||
Total investment return | $ | 18,820 | $ | 71,922 | $ | 72,729 | |||||||||||||||||||
Total investment return % | 1.2 | % | 4.6 | % | 4.6 | % | |||||||||||||||||||
Average investment portfolio (1) | $ | 1,533,104 | $ | 1,549,747 | $ | 1,590,281 | |||||||||||||||||||
-1 | Average of total cash and invested assets, net of receivable/payable for securities purchased and sold, as of the beginning and end of the period. | ||||||||||||||||||||||||
Municipal Bonds with and without Insurance | The following table provides a breakdown of the ratings for these municipal bonds with and without insurance. | ||||||||||||||||||||||||
(Dollars in thousands) | Ratings | Ratings | |||||||||||||||||||||||
Rating | with | without | |||||||||||||||||||||||
Insurance | Insurance | ||||||||||||||||||||||||
AAA | $ | 1,251 | $ | — | |||||||||||||||||||||
AA | — | 1,251 | |||||||||||||||||||||||
A | — | — | |||||||||||||||||||||||
Total | $ | 1,251 | $ | 1,251 | |||||||||||||||||||||
Summary of Insurance Enhanced Municipal Bonds Backed by Financial Guarantors | A summary of the Company’s insurance enhanced municipal bonds that are backed by financial guarantors, including the pre-refunded bonds that are escrowed in U.S. government obligations, as of December 31, 2014, is as follows: | ||||||||||||||||||||||||
(Dollars in thousands) | Total | Pre-refunded | Government | Exposure Net | |||||||||||||||||||||
Financial Guarantor | Securities | Guaranteed | of Pre-refunded | ||||||||||||||||||||||
Securities | & Government | ||||||||||||||||||||||||
Guaranteed | |||||||||||||||||||||||||
Securities | |||||||||||||||||||||||||
Ambac Financial Group | $ | 1,259 | $ | 141 | $ | 0 | $ | 1,118 | |||||||||||||||||
Assured Guaranty Corporation | 3,757 | 0 | 0 | 3,757 | |||||||||||||||||||||
Municipal Bond Insurance Association | 3,614 | 0 | 0 | 3,614 | |||||||||||||||||||||
Gov’t National Housing Association | 599 | 0 | 599 | 0 | |||||||||||||||||||||
Permanent School Fund Guaranty | 1,251 | 0 | 1,251 | 0 | |||||||||||||||||||||
Total backed by financial guarantors | 10,480 | 141 | 1,850 | 8,489 | |||||||||||||||||||||
Other credit enhanced municipal bonds | 5,926 | 5,926 | 0 | 0 | |||||||||||||||||||||
Total | $ | 16,406 | $ | 6,067 | $ | 1,850 | $ | 8,489 | |||||||||||||||||
Summary of Estimated Fair Values of Bonds Held on Deposit | The fair values were as follows as of December 31, 2014 and 2013: | ||||||||||||||||||||||||
Estimated Fair Value | |||||||||||||||||||||||||
(Dollars in thousands) | December 31, | December 31, | |||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
On deposit with governmental authorities | $ | 32,790 | $ | 36,176 | |||||||||||||||||||||
Intercompany trusts held for the benefit of U.S. policyholders | 495,301 | 584,683 | |||||||||||||||||||||||
Held in trust pursuant to third party requirements | 95,828 | 129,339 | |||||||||||||||||||||||
Letter of credit held for third party requirements | 9,340 | 7,068 | |||||||||||||||||||||||
Securities held as collateral for borrowing arrangements (1) | 222,809 | 120,937 | |||||||||||||||||||||||
Total | $ | 856,068 | $ | 878,203 | |||||||||||||||||||||
-1 | Amount required to collateralize margin borrowing facilities. |
Derivative_Instruments_Tables
Derivative Instruments (Tables) | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
Summarized Information of Location and Gross Amount of Derivatives' Fair Value in Consolidated Balance Sheets | The following table summarizes information on the location and the gross amount of the derivatives’ fair value on the consolidated balance sheets as of December 31, 2014 and 2013: | ||||||||||||||||||
(Dollars in thousands) | Balance Sheet | December 31, 2014 | December 31, 2013 | ||||||||||||||||
Derivatives Not Designated as Hedging | Location | ||||||||||||||||||
Instruments under ASC 815 | Notional | Fair | Notional | Fair Value | |||||||||||||||
Amount | Value | Amount | |||||||||||||||||
Interest rate swap agreements | Other liabilities | $ | 200,000 | $ | (13,675 | ) | $ | — | $ | — | |||||||||
Interest rate swap agreements | Other assets | $ | — | $ | — | $ | 200,000 | $ | 1,668 | ||||||||||
Summary of Net Gains (Losses) Included in Consolidated Statement of Operations for Changes in Fair Value of Derivatives and Periodic net Interest Settlements Under Derivatives | The following table summarizes the net gains (losses) included in the consolidated statement of operations for changes in the fair value of the derivatives and the periodic net interest settlements under the derivatives for the years ended December 31, 2014, 2013, and 2012: | ||||||||||||||||||
(Dollars in thousands) | Statement of Operations Line | Years Ended December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||
Interest rate swap agreements | Net realized investment gains | $ | (20,836 | ) | $ | 1,427 | $ | — |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Company's Invested Assets and Derivative Instruments Measured at Fair Value on Recurring Basis | |||||||||||||||||
As of December 31, 2014 | Fair Value Measurements | ||||||||||||||||
(Dollars in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: | |||||||||||||||||
Fixed maturities: | |||||||||||||||||
U.S. treasury and agency obligations | $ | 74,765 | $ | 6,002 | $ | 0 | $ | 80,767 | |||||||||
Obligations of states and political subdivisions | 0 | 191,473 | 0 | 191,473 | |||||||||||||
Mortgage-backed securities | 0 | 208,759 | 0 | 208,759 | |||||||||||||
Commercial mortgage-backed securities | 0 | 133,158 | 0 | 133,158 | |||||||||||||
Asset-backed securities | 0 | 178,263 | 0 | 178,263 | |||||||||||||
Corporate bonds and loans | 0 | 383,416 | 0 | 383,416 | |||||||||||||
Foreign corporate bonds | 0 | 107,639 | 0 | 107,639 | |||||||||||||
Total fixed maturities | 74,765 | 1,208,710 | 0 | 1,283,475 | |||||||||||||
Common stock | 122,048 | 0 | 0 | 122,048 | |||||||||||||
Other invested assets | 0 | 0 | 33,663 | 33,663 | |||||||||||||
Total assets measured at fair value | $ | 196,813 | $ | 1,208,710 | $ | 33,663 | $ | 1,439,186 | |||||||||
Liabilities: | |||||||||||||||||
Derivative instruments | $ | — | $ | 13,675 | $ | — | $ | 13,675 | |||||||||
Total liabilities measured at fair value | $ | — | $ | 13,675 | $ | — | $ | 13,675 | |||||||||
As of December 31, 2013 | Fair Value Measurements | ||||||||||||||||
(Dollars in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: | |||||||||||||||||
Fixed maturities: | |||||||||||||||||
U.S. treasury and agency obligations | $ | 71,294 | $ | 10,380 | $ | — | $ | 81,674 | |||||||||
Obligations of states and political subdivisions | — | 180,936 | — | 180,936 | |||||||||||||
Mortgage-backed securities | — | 229,910 | — | 229,910 | |||||||||||||
Commercial mortgage-backed securities | — | 53,975 | — | 53,975 | |||||||||||||
Asset-backed securities | — | 168,436 | — | 168,436 | |||||||||||||
Corporate bonds and loans | — | 435,392 | — | 435,392 | |||||||||||||
Foreign corporate bonds | — | 54,041 | — | 54,041 | |||||||||||||
Total fixed maturities | 71,294 | 1,133,070 | — | 1,204,364 | |||||||||||||
Common stock | 254,070 | — | — | 254,070 | |||||||||||||
Other invested assets | — | — | 3,489 | 3,489 | |||||||||||||
Derivative instruments | — | 1,668 | — | 1,668 | |||||||||||||
Total assets measured at fair value | $ | 325,364 | $ | 1,134,738 | $ | 3,489 | $ | 1,463,591 | |||||||||
Changes in Level 3 Investments Measured at Fair Value on a Recurring Basis | The following tables present the changes in Level 3 investments measured at fair value on a recurring basis for 2014, 2013, and 2012: | ||||||||||||||||
Other Invested Assets | |||||||||||||||||
(Dollars in thousands) | Years Ended December 31, | ||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Beginning balance | $ | 3,489 | $ | 3,132 | $ | 6,617 | |||||||||||
Total gains (losses) (realized / unrealized): | |||||||||||||||||
Included in accumulated other comprehensive income (loss) | 65 | 341 | (2,384 | ) | |||||||||||||
Purchases | 30,121 | 16 | 13 | ||||||||||||||
Distributions | (12 | ) | — | (1,114 | ) | ||||||||||||
Ending balance | $ | 33,663 | $ | 3,489 | $ | 3,132 | |||||||||||
Fair Value and Future Funding Commitments Related to These Investments | The following table provides the fair value and future funding commitments related to these investments at December 31, 2014 and 2013. | ||||||||||||||||
December 31, 2014 | December 31, 2013 | ||||||||||||||||
(Dollars in thousands) | Fair | Future | Fair | Future | |||||||||||||
Value | Funding | Value | Funding | ||||||||||||||
Commitment | Commitment | ||||||||||||||||
Equity Fund, LP (1) | $ | 3,401 | $ | 2,436 | $ | 3,489 | $ | 2,490 | |||||||||
Real Estate Fund, LP (2) | — | — | — | — | |||||||||||||
European Non-Performing Loan Fund, LP (3) | 30,262 | 20,064 | — | — | |||||||||||||
Total | $ | 33,663 | $ | 22,500 | $ | 3,489 | $ | 2,490 | |||||||||
-1 | This limited partnership invests in companies, from various business sectors, whereby the partnership has acquired control of the operating business as a lead or organizing investor. The Company does not have the contractual option to redeem its limited partnership interest but receives distributions based on the liquidation of the underlying assets. The Company does not have the ability to sell or transfer its limited partnership interest without consent from the general partner. | ||||||||||||||||
-2 | This limited partnership invests in real estate assets through a combination of direct or indirect investments in partnerships, limited liability companies, mortgage loans, and lines of credit. The Company does not have the contractual option to redeem its limited partnership interest but receives distributions based on the liquidation of the underlying assets. The Company does not have the ability to sell or transfer its limited partnership interest without consent from the general partner. The Company continues to hold an investment in this limited partnership and has written the fair value down to zero. | ||||||||||||||||
-3 | This limited partnership invests in distressed securities and assets through senior and subordinated, secured and unsecured debt and equity, in both public and private large-cap and middle-market companies. The Company does not have the contractual option to redeem its limited partnership interest but receives distributions based on the liquidation of the underlying assets. The Company does not have the ability to sell or transfer its limited partnership interest without consent from the general partner. |
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Intangible assets | The following table presents details of the Company’s intangible assets as of December 31, 2014: | ||||||||||||||||
(Dollars in thousands) | Useful Life | Cost | Accumulated | Net | |||||||||||||
Description | Amortization | Value | |||||||||||||||
Trademarks | Indefinite | $ | 4,800 | $ | — | $ | 4,800 | ||||||||||
Trade names | Indefinite | 4,200 | — | 4,200 | |||||||||||||
State insurance licenses | Indefinite | 5,000 | — | 5,000 | |||||||||||||
Customer relationships | 15 years | 5,300 | 1,664 | 3,636 | |||||||||||||
Non-compete agreements | 2 years | 50 | 50 | — | |||||||||||||
$ | 19,350 | $ | 1,714 | $ | 17,636 | ||||||||||||
The following table presents details of the Company’s intangible assets as of December 31, 2013: | |||||||||||||||||
(Dollars in thousands) | Useful Life | Cost | Accumulated | Net | |||||||||||||
Description | Amortization | Value | |||||||||||||||
Trademarks | Indefinite | $ | 4,800 | $ | — | $ | 4,800 | ||||||||||
Trade names | Indefinite | 4,200 | — | 4,200 | |||||||||||||
State insurance licenses | Indefinite | 5,000 | — | 5,000 | |||||||||||||
Customer relationships | 15 years | 5,300 | 1,310 | 3,990 | |||||||||||||
Non-compete agreements | 2 years | 50 | 50 | — | |||||||||||||
$ | 19,350 | $ | 1,360 | $ | 17,990 | ||||||||||||
Expected Amortization Expense | The Company expects that amortization expense for the next five years related to the 2010 acquisition will be as follows: | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||
2015 | (353 | ) | |||||||||||||||
2016 | (353 | ) | |||||||||||||||
2017 | (353 | ) | |||||||||||||||
2018 | (353 | ) | |||||||||||||||
2019 | (353 | ) |
Reinsurance_Tables
Reinsurance (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Components of Reinsurance Balances | The Company had the following reinsurance balances as of December 31, 2014 and 2013: | ||||||||
(Dollars in thousands) | December 31, | December 31, | |||||||
2014 | 2013 | ||||||||
Reinsurance receivables, net | $ | 125,718 | $ | 197,887 | |||||
Collateral securing reinsurance receivables | (8,701 | ) | (9,436 | ) | |||||
Reinsurance receivables, net of collateral | $ | 117,017 | $ | 188,451 | |||||
Allowance for uncollectible reinsurance receivables | $ | 9,350 | $ | 9,010 | |||||
Prepaid reinsurance premiums | 4,725 | 5,199 | |||||||
Unsecured Reinsurance Receivable that Exceeded Three Percent of Shareholders' Equity | Unsecured reinsurance receivables include amounts receivable for paid and unpaid losses and loss adjustment expenses, less amounts secured by collateral. | ||||||||
(Dollars in thousands) | Reinsurance | A.M. Best | |||||||
Receivables | Ratings | ||||||||
(As of | |||||||||
December 31, | |||||||||
2014) | |||||||||
Munich Re America Corporation | $ | 67,429 | A+ | ||||||
Effect of Reinsurance on Premiums Written and Earned | The effect of reinsurance on premiums written and earned is as follows: | ||||||||
(Dollars in thousands) | Written | Earned | |||||||
For the year ended December 31, 2014: | |||||||||
Direct business | $ | 229,978 | $ | 228,652 | |||||
Reinsurance assumed | 61,275 | 58,414 | |||||||
Reinsurance ceded | (18,072 | ) | (18,547 | ) | |||||
Net premiums | $ | 273,181 | $ | 268,519 | |||||
For the year ended December 31, 2013: | |||||||||
Direct business | $ | 232,373 | $ | 215,713 | |||||
Reinsurance assumed | 58,350 | 52,494 | |||||||
Reinsurance ceded | (18,739 | ) | (19,485 | ) | |||||
Net premiums | $ | 271,984 | $ | 248,722 | |||||
For the year ended December 31, 2012: | |||||||||
Direct business | $ | 201,787 | $ | 203,587 | |||||
Reinsurance assumed | 42,266 | 60,393 | |||||||
Reinsurance ceded | (24,506 | ) | (25,118 | ) | |||||
Net premiums | $ | 219,547 | $ | 238,862 | |||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Income before Income Taxes from its Non-U.S. Subsidiaries and U.S. Subsidiaries | The Company’s income before income taxes from its non-U.S. subsidiaries and U.S. subsidiaries, including the results of the quota share and stop-loss agreements between Global Indemnity Reinsurance and the Insurance Operations, for the years ended December 31, 2014, 2013, and 2012 were as follows: | ||||||||||||||||||||||||
Year Ended December 31, 2014: | Non-U.S. | U.S. | Eliminations | Total | |||||||||||||||||||||
(Dollars in thousands) | Subsidiaries | Subsidiaries | |||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||
Gross premiums written | $ | 173,563 | $ | 229,979 | $ | (112,289 | ) | $ | 291,253 | ||||||||||||||||
Net premiums written | $ | 172,504 | $ | 100,677 | $ | — | $ | 273,181 | |||||||||||||||||
Net premiums earned | $ | 168,743 | $ | 99,776 | $ | — | $ | 268,519 | |||||||||||||||||
Net investment income | 31,420 | 16,715 | (19,314 | ) | 28,821 | ||||||||||||||||||||
Net realized investment gains | 926 | 34,934 | — | 35,860 | |||||||||||||||||||||
Other income (loss) | (65 | ) | 620 | — | 555 | ||||||||||||||||||||
Total revenues | 201,024 | 152,045 | (19,314 | ) | 333,755 | ||||||||||||||||||||
Losses and Expenses: | |||||||||||||||||||||||||
Net losses and loss adjustment expenses | 62,669 | 74,892 | — | 137,561 | |||||||||||||||||||||
Acquisition costs and other underwriting expenses | 70,479 | 39,140 | — | 109,619 | |||||||||||||||||||||
Corporate and other operating expenses | 5,243 | 9,316 | — | 14,559 | |||||||||||||||||||||
Interest expense | 852 | 19,284 | (19,314 | ) | 822 | ||||||||||||||||||||
Income (loss) before income taxes | $ | 61,781 | $ | 9,413 | $ | — | $ | 71,194 | |||||||||||||||||
Year Ended December 31, 2013: | Non-U.S. | U.S. | Eliminations | Total | |||||||||||||||||||||
(Dollars in thousands) | Subsidiaries | Subsidiaries | |||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||
Gross premiums written | $ | 169,618 | $ | 232,374 | $ | (111,269 | ) | $ | 290,723 | ||||||||||||||||
Net premiums written | $ | 169,547 | $ | 102,437 | $ | — | $ | 271,984 | |||||||||||||||||
Net premiums earned | $ | 154,987 | $ | 93,735 | $ | — | $ | 248,722 | |||||||||||||||||
Net investment income | 35,750 | 21,064 | (19,605 | ) | 37,209 | ||||||||||||||||||||
Net realized investment gains | 175 | 27,237 | — | 27,412 | |||||||||||||||||||||
Other income (loss) | (4 | ) | 5,795 | — | 5,791 | ||||||||||||||||||||
Total revenues | 190,908 | 147,831 | (19,605 | ) | 319,134 | ||||||||||||||||||||
Losses and Expenses: | |||||||||||||||||||||||||
Net losses and loss adjustment expenses | 65,337 | 67,654 | — | 132,991 | |||||||||||||||||||||
Acquisition costs and other underwriting expenses | 64,822 | 40,829 | — | 105,651 | |||||||||||||||||||||
Corporate and other operating expenses | 4,745 | 6,869 | — | 11,614 | |||||||||||||||||||||
Interest expense | 1,165 | 24,609 | (19,605 | ) | 6,169 | ||||||||||||||||||||
Income (loss) before income taxes | $ | 54,839 | $ | 7,870 | $ | — | $ | 62,709 | |||||||||||||||||
Year Ended December 31, 2012: | Non-U.S. | U.S. | Eliminations | Total | |||||||||||||||||||||
(Dollars in thousands) | Subsidiaries | Subsidiaries | |||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||
Gross premiums written | $ | 135,176 | $ | 201,791 | $ | (92,914 | ) | $ | 244,053 | ||||||||||||||||
Net premiums written | $ | 134,628 | $ | 84,919 | $ | — | $ | 219,547 | |||||||||||||||||
Net premiums earned | $ | 153,283 | $ | 85,579 | $ | — | $ | 238,862 | |||||||||||||||||
Net investment income | 42,012 | 23,985 | (18,440 | ) | 47,557 | ||||||||||||||||||||
Net realized investment gains | 995 | 5,760 | — | 6,755 | |||||||||||||||||||||
Other income (loss) | (726 | ) | 568 | — | (158 | ) | |||||||||||||||||||
Total revenues | 195,564 | 115,892 | (18,440 | ) | 293,016 | ||||||||||||||||||||
Losses and Expenses: | |||||||||||||||||||||||||
Net losses and loss adjustment expenses | 93,044 | 60,584 | — | 153,628 | |||||||||||||||||||||
Acquisition costs and other underwriting expenses | 59,046 | 36,357 | — | 95,403 | |||||||||||||||||||||
Corporate and other operating expenses | 4,753 | 4,938 | — | 9,691 | |||||||||||||||||||||
Interest expense | — | 23,833 | (18,440 | ) | 5,393 | ||||||||||||||||||||
Income (loss) before income taxes | $ | 38,721 | $ | (9,820 | ) | $ | — | $ | 28,901 | ||||||||||||||||
Components of Income Tax Expense (Benefit) | The following table summarizes the components of income tax expense (benefit): | ||||||||||||||||||||||||
(Dollars in thousands) | Years Ended December 31, | ||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Current income tax expense (benefit): | $ | 6,250 | $ | — | $ | — | |||||||||||||||||||
Non-resident withholding | |||||||||||||||||||||||||
Foreign | 129 | 163 | (628 | ) | |||||||||||||||||||||
U.S. Federal | 2,787 | 859 | (3,765 | ) | |||||||||||||||||||||
Total current income tax expense benefit | 9,166 | 1,022 | (4,393 | ) | |||||||||||||||||||||
Deferred income tax benefit: | |||||||||||||||||||||||||
U.S. Federal | (828 | ) | (3 | ) | (1,463 | ) | |||||||||||||||||||
Total deferred income tax benefit | (828 | ) | (3 | ) | (1,463 | ) | |||||||||||||||||||
Total income tax expense (benefit) | $ | 8,338 | $ | 1,019 | $ | (5,856 | ) | ||||||||||||||||||
Differences in Tax and Estimated Tax Provisions at Weighted Average Tax Rate | The following table summarizes the differences between the tax provision for financial statement purposes and the expected tax provision at the weighted average tax rate: | ||||||||||||||||||||||||
Years Ended December 31, | |||||||||||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Amount | % of Pre- | Amount | % of Pre- | Amount | % of Pre- | ||||||||||||||||||||
Tax Income | Tax Income | Tax Income | |||||||||||||||||||||||
Expected tax provision at weighted average | $ | 3,465 | 4.9 | % | $ | 2,954 | 4.7 | % | $ | (3,283 | ) | (11.4 | %) | ||||||||||||
Adjustments: | |||||||||||||||||||||||||
Non-resident withholding | 6,250 | 8.8 | — | — | — | — | |||||||||||||||||||
Tax exempt interest | (472 | ) | (0.7 | ) | (1,009 | ) | (1.6 | ) | (1,445 | ) | (5.0 | ) | |||||||||||||
Dividend exclusion | (1,340 | ) | (1.9 | ) | (1,135 | ) | (1.8 | ) | (1,060 | ) | (3.7 | ) | |||||||||||||
Other | 435 | 0.6 | 209 | 0.3 | (68 | ) | (0.2 | ) | |||||||||||||||||
Actual taxes on continuing operations | $ | 8,338 | 11.7 | % | $ | 1,019 | 1.6 | % | $ | (5,856 | ) | (20.3 | %) | ||||||||||||
Tax Effects of Temporary Differences That Give Rise to Significant Portions of Net Deferred Tax Assets | The tax effects of temporary differences that give rise to significant portions of the net deferred tax assets at December 31, 2014 and 2013 are presented below: | ||||||||||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | |||||||||||||||||||||||
Deferred tax assets: | |||||||||||||||||||||||||
Discounted unpaid losses and loss adjustment expenses | $ | 7,492 | $ | 9,459 | |||||||||||||||||||||
Unearned premiums | 3,409 | 3,346 | |||||||||||||||||||||||
Alternative minimum tax credit carryover | 10,473 | 9,947 | |||||||||||||||||||||||
Partnership K1 basis differences | 145 | 178 | |||||||||||||||||||||||
Capital gain on derivative instruments | 4,786 | — | |||||||||||||||||||||||
Investment impairments | 379 | 852 | |||||||||||||||||||||||
Stock options | 2,048 | 1,526 | |||||||||||||||||||||||
Deferred acquisition costs | 187 | 789 | |||||||||||||||||||||||
Stat-to-GAAP reinsurance reserve | 1,424 | 1,359 | |||||||||||||||||||||||
Intercompany transfers | 1,919 | 4,605 | |||||||||||||||||||||||
Other | 3,050 | 2,563 | |||||||||||||||||||||||
Total deferred tax assets | 35,312 | 34,624 | |||||||||||||||||||||||
Deferred tax liabilities: | |||||||||||||||||||||||||
Intangible assets | 3,220 | 3,220 | |||||||||||||||||||||||
Unrealized gain on securities available-for-sale and investments in limited partnerships included in accumulated other comprehensive income | 10,263 | 25,480 | |||||||||||||||||||||||
Investment basis differences | 692 | 400 | |||||||||||||||||||||||
Depreciation and amortization | 16 | 355 | |||||||||||||||||||||||
Other | 871 | 963 | |||||||||||||||||||||||
Total deferred tax liabilities | 15,062 | 30,418 | |||||||||||||||||||||||
Total net deferred tax assets | $ | 20,250 | $ | 4,206 | |||||||||||||||||||||
Liability_for_Unpaid_Losses_an1
Liability for Unpaid Losses and Loss Adjustment Expenses (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Summarized Activity in Liability for Unpaid Losses and Loss Adjustment Expenses | Activity in the liability for unpaid losses and loss adjustment expenses is summarized as follows: | ||||||||||||
Years Ended December 31, | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Balance at beginning of period | $ | 779,466 | $ | 879,114 | $ | 971,377 | |||||||
Less: Ceded reinsurance receivables | 192,491 | 240,566 | 283,652 | ||||||||||
Net balance at beginning of period | 586,975 | 638,548 | 687,725 | ||||||||||
Incurred losses and loss adjustment expenses related to: | |||||||||||||
Current year | 153,994 | 140,873 | 149,183 | ||||||||||
Prior years | (16,433 | ) | (7,882 | ) | 4,445 | ||||||||
Total incurred losses and loss adjustment expenses | 137,561 | 132,991 | 153,628 | ||||||||||
Paid losses and loss adjustment expenses related to: | |||||||||||||
Current year | 55,485 | 50,732 | 52,164 | ||||||||||
Prior years | 116,780 | 133,832 | 150,641 | ||||||||||
Total paid losses and loss adjustment expenses | 172,265 | 184,564 | 202,805 | ||||||||||
Net balance at end of period | 552,271 | 586,975 | 638,548 | ||||||||||
Plus: Ceded reinsurance receivables | 123,201 | 192,491 | 240,566 | ||||||||||
Balance at end of period | $ | 675,472 | $ | 779,466 | $ | 879,114 | |||||||
Gross Reserves for Asbestos and Environmental Losses | The following table shows the Company’s gross reserves for A&E losses: | ||||||||||||
Years Ended December 31, | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Gross reserve for A&E losses and loss adjustment expenses—beginning of period | $ | 50,155 | $ | 44,767 | $ | 50,601 | |||||||
Plus: Incurred losses and loss adjustment expenses—case reserves | 4,333 | 2,154 | 7,687 | ||||||||||
Plus: Incurred losses and loss adjustment expenses—IBNR | 7,340 | 5,961 | (5,860 | ) | |||||||||
Less: Payments | 5,293 | 2,727 | 7,661 | ||||||||||
Gross reserves for A&E losses and loss adjustment expenses—end of period | $ | 56,535 | $ | 50,155 | $ | 44,767 | |||||||
Net Reserves for Asbestos and Environmental Losses | The following table shows the Company’s net reserves for A&E losses: | ||||||||||||
Years Ended December 31, | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Net reserve for A&E losses and loss adjustment expenses—beginning of period | $ | 23,038 | $ | 20,134 | $ | 25,285 | |||||||
Plus: Incurred losses and loss adjustment expenses—case reserves | 2,754 | 1,351 | 6,934 | ||||||||||
Plus: Incurred losses and loss adjustment expenses—IBNR | 8,241 | 3,506 | (5,683 | ) | |||||||||
Less: Payments | 2,848 | 1,953 | 6,402 | ||||||||||
Net reserves for A&E losses and loss adjustment expenses—end of period | $ | 31,185 | $ | 23,038 | $ | 20,134 | |||||||
Shareholders_Equity_Tables
Shareholders' Equity (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Information with Respect to A Ordinary Shares that were Surrendered or Repurchased | The following table provides information with respect to the A ordinary shares that were surrendered or repurchased in 2014: | ||||||||||||
Period (1) | Total Number | Average | Total Number of Shares | ||||||||||
of Shares | Price Paid | Purchased as Part of | |||||||||||
Purchased | Per Share | Publicly Announced | |||||||||||
Plan or Program | |||||||||||||
January 1 – 31, 2014 | 3,644 | (2) | $ | 25.3 | — | ||||||||
February 1 – 28, 2014 | 362 | (2) | $ | 24 | — | ||||||||
March 1 – 31, 2014 | 1,438 | (2) | $ | 26.23 | — | ||||||||
Total | 5,444 | $ | 25.46 | — | |||||||||
-1 | Based on settlement date. | ||||||||||||
-2 | Surrendered by employees as payment of taxes withheld on the vesting of restricted stock. | ||||||||||||
The following table provides information with respect to the A ordinary shares that were surrendered or repurchased in 2013: | |||||||||||||
Period (1) | Total Number | Average | Total Number of Shares | ||||||||||
of Shares | Price Paid | Purchased as Part of | |||||||||||
Purchased | Per Share | Publicly Announced | |||||||||||
Plan or Program | |||||||||||||
February 1 – 28, 2013 | 362 | (2) | $ | 20.25 | — | ||||||||
March 1 – 31, 2013 | 891 | (2) | $ | 22.78 | — | ||||||||
June 1 – 30, 2013 | 507 | (2) | $ | 23.03 | — | ||||||||
December 1 – 31, 2013 | 610 | (2) | $ | 26.07 | — | ||||||||
Total | 2,370 | $ | 23.29 | — | |||||||||
-1 | Based on settlement date. | ||||||||||||
-2 | Surrendered by employees as payment of taxes withheld on the vesting of restricted stock. |
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Premium and Losses | |||||||||
Estimated Earned Premium and Incurred Losses, and Net Balances Due | Net balances due to Global Indemnity Reinsurance under this agreement are as follows: | ||||||||
As of December 31. | |||||||||
(Dollars in thousands) | 2014 | 2013 | |||||||
Net receivable balance | $ | 2,897 | $ | 3,337 | |||||
Receivables | |||||||||
Estimated Earned Premium and Incurred Losses, and Net Balances Due | The Company estimated that the following earned premium and incurred losses related to the agreement have been assumed by Global Indemnity Reinsurance from Hiscox Bermuda: | ||||||||
Years Ended | |||||||||
December 31, | |||||||||
(Dollars in thousands) | 2014 | 2013 | |||||||
Assumed earned premium | $ | 6,383 | $ | 3,053 | |||||
Assumed losses and loss adjustment expenses | 763 | 987 |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Future Minimum Cash Payments Under Non-cancelable Operating Leases | At December 31, 2014, future minimum cash payments under non-cancelable operating leases were as follows: | ||||
(Dollars in thousands) | |||||
2015 | $ | 2,374 | |||
2016 | 2,279 | ||||
2017 | 2,234 | ||||
2018 | 2,237 | ||||
2019 and thereafter | 2,236 | ||||
Total | $ | 11,360 | |||
ShareBased_Compensation_Plans_
Share-Based Compensation Plans (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Summary of Award Activity for Stock Options Granted and Weighted Average Exercise Price Per Share | Award activity for stock options granted under the Plan and the weighted average exercise price per share are summarized as follows: | ||||||||||||||||
Time-Based | Performance- | Total | Weighted | ||||||||||||||
Options | Based Options | Options | Average | ||||||||||||||
Exercise Price | |||||||||||||||||
Per Share | |||||||||||||||||
Options outstanding at January 1, 2012 | 565,981 | — | 565,981 | $ | 20.59 | ||||||||||||
Options issued | — | — | — | — | |||||||||||||
Options forfeited | (96,238 | ) | — | (96,238 | ) | $ | 24.09 | ||||||||||
Options exercised | (5,000 | ) | — | (5,000 | ) | $ | 20 | ||||||||||
Options expired | — | — | — | — | |||||||||||||
Options purchased by the Company | — | — | — | — | |||||||||||||
Options outstanding at December 31, 2012 | 464,743 | — | 464,743 | $ | 19.87 | ||||||||||||
Options issued | — | — | — | — | |||||||||||||
Options forfeited | (5,000 | ) | — | (5,000 | ) | $ | 29.24 | ||||||||||
Options exercised | (14,292 | ) | — | (14,292 | ) | $ | 20 | ||||||||||
Options expired | (32,951 | ) | — | (32,951 | ) | $ | 34 | ||||||||||
Options purchased by the Company | — | — | — | — | |||||||||||||
Options outstanding at December 31, 2013 | 412,500 | — | 412,500 | $ | 18.62 | ||||||||||||
Options issued | 325,000 | — | 325,000 | 31.74 | |||||||||||||
Options forfeited | (125,000 | ) | — | (125,000 | ) | 19.6 | |||||||||||
Options exercised | — | — | — | — | |||||||||||||
Options expired | — | — | — | — | |||||||||||||
Options purchased by the Company | — | — | — | — | |||||||||||||
Options outstanding at December 31, 2014 | 612,500 | — | 612,500 | 25.38 | |||||||||||||
Options exercisable at December 31, 2014 | 312,500 | — | 312,500 | 18.66 | |||||||||||||
Option Intrinsic values | Option intrinsic values, which are the differences between the fair value of $28.37 at December 31, 2014 and the strike price of the option, are as follows: | ||||||||||||||||
Number | Weighted | Intrinsic | |||||||||||||||
of Shares | Average | Value | |||||||||||||||
Strike Price | |||||||||||||||||
Outstanding | 612,500 | $ | 25.38 | $ | 3.2 million | ||||||||||||
Exercisable | 312,500 | $ | 18.66 | $ | 3.2 million | ||||||||||||
Exercised | — | N/A | N/A | ||||||||||||||
Options Exercisable | The options exercisable at December 31, 2014 include the following: | ||||||||||||||||
Option Price | Number of options | ||||||||||||||||
exercisable | |||||||||||||||||
$17.87 | 300,000 | ||||||||||||||||
$37.70 | 12,500 | ||||||||||||||||
Options exercisable at December 31, 2014 | 312,500 | ||||||||||||||||
Significant Assumptions Used to Estimate Fair Value of Stock Options Granted Using Black Scholes Option Pricing Model | The weighted average fair value of options granted under the Plan was $7.92 in 2014 using a Black-Scholes option-pricing model and the following weighted average assumptions. There were no options granted under the Plan in 2013 or 2012. | ||||||||||||||||
2014 | |||||||||||||||||
Dividend yield | 0 | % | |||||||||||||||
Expected volatility | 37.7 | % | |||||||||||||||
Risk-free interest rate | 1.7 | % | |||||||||||||||
Expected option life | 6.9 years | ||||||||||||||||
Summary of Range of Exercise Prices of Options Outstanding | The following tables summarize the range of exercise prices of options outstanding at December 31, 2014, 2013, and 2012: | ||||||||||||||||
Ranges of | Outstanding at | Weighted Average Per | Weighted Average | ||||||||||||||
Exercise Prices | December 31, 2014 | Share Exercise Price | Remaining Life | ||||||||||||||
$17.87 – $19.99 | 300,000 | $ | 17.87 | 6.7 years | |||||||||||||
$20.00 – $29.99 | — | — | N/A | ||||||||||||||
$30.00 – $37.70 | 312,500 | (1) | $ | 32.59 | 8.8 years | ||||||||||||
Total | 612,500 | ||||||||||||||||
(1)—the weighted average per share exercise price on 300,000 of these shares outstanding is variable. See note below under Chief Executive Officer for additional information. | |||||||||||||||||
Ranges of | Outstanding at | Weighted Average Per | Weighted Average | ||||||||||||||
Exercise Prices | December 31, 2013 | Share Exercise Price | Remaining Life | ||||||||||||||
$17.87 – $19.99 | 400,000 | $ | 18.03 | 7.8 years | |||||||||||||
$30.00 – $37.70 | 12,500 | $ | 37.7 | 1.8 years | |||||||||||||
Total | 412,500 | ||||||||||||||||
Ranges of | Outstanding at | Weighted Average Per | Weighted Average | ||||||||||||||
Exercise Prices | December 31, 2012 | Share Exercise Price | Remaining Life | ||||||||||||||
$17.87 – $19.99 | 400,000 | $ | 18.03 | 8.8 years | |||||||||||||
$20.00 – $29.99 | 19,293 | $ | 22.39 | 0.9 years | |||||||||||||
$30.00 – $37.70 | 45,450 | $ | 35.02 | 1.5 years | |||||||||||||
Total | 464,743 | ||||||||||||||||
Summary of Restricted Stock Awards Since Inception | The following table summarizes the restricted stock grants since the 2003 inception of the previous share incentive plan. | ||||||||||||||||
Restricted Stock Awards | |||||||||||||||||
Year | Employees | Directors | Total | ||||||||||||||
Inception through 2011 | 599,806 | 303,974 | 903,780 | ||||||||||||||
2012 | 29,675 | 50,885 | 80,560 | ||||||||||||||
2013 | 81,587 | 50,421 | 132,008 | ||||||||||||||
2014 | 95,694 | 36,608 | 132,302 | ||||||||||||||
806,762 | 441,888 | 1,248,650 | |||||||||||||||
Summary of Non-Vested Restricted Shares Activity | The following table summarizes the non-vested restricted shares activity for the years ended December 31, 2014, 2013, and 2012: | ||||||||||||||||
Number of | Weighted | ||||||||||||||||
Shares | Average | ||||||||||||||||
Price | |||||||||||||||||
Per Share | |||||||||||||||||
Non-vested Restricted Shares at January 1, 2012 | 26,016 | $ | 18.29 | ||||||||||||||
Shares issued | 80,560 | $ | 19.67 | ||||||||||||||
Shares vested | (68,649 | ) | $ | 19.99 | |||||||||||||
Shares forfeited | (3,423 | ) | $ | 20.87 | |||||||||||||
Non-vested Restricted Shares at December 31, 2012 | 34,504 | $ | 17.87 | ||||||||||||||
Shares issued | 132,008 | $ | 22.78 | ||||||||||||||
Shares vested | (67,937 | ) | $ | 22.17 | |||||||||||||
Shares forfeited | (454 | ) | $ | 22.13 | |||||||||||||
Non-vested Restricted Shares at December 31, 2013 | 98,121 | $ | 21.48 | ||||||||||||||
Shares issued | 132,302 | $ | 25.67 | ||||||||||||||
Shares vested | (57,017 | ) | $ | 24.29 | |||||||||||||
Shares forfeited | (1,131 | ) | $ | 22.13 | |||||||||||||
Non-vested Restricted Shares at December 31, 2014 | 172,275 | $ | 23.76 | ||||||||||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share. | ||||||||||||
Years Ended December 31, | |||||||||||||
(Dollars in thousands, except share and per share data) | 2014 | 2013 | 2012 | ||||||||||
Net income | $ | 62,856 | $ | 61,690 | $ | 34,757 | |||||||
Basic earnings per share: | |||||||||||||
Weighted average shares outstanding—basic | 25,131,811 | 25,072,712 | 26,722,772 | ||||||||||
Net income per share | $ | 2.5 | $ | 2.46 | $ | 1.3 | |||||||
Diluted earnings per share: | |||||||||||||
Weighted average shares outstanding—diluted | 25,331,420 | 25,174,015 | 26,748,833 | ||||||||||
Net income per share | $ | 2.48 | $ | 2.45 | $ | 1.3 | |||||||
Reconciliation of Weighted Average Shares for Basic and Diluted Earnings Per Share | A reconciliation of weighted average shares for basic earnings per share to weighted average shares for diluted earnings per share is as follows: | ||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Weighted average shares for basic earnings per share | 25,131,811 | 25,072,712 | 26,722,772 | ||||||||||
Non-vested restricted stock | 100,546 | 53,876 | 17,474 | ||||||||||
Options | 99,063 | 47,427 | 8,587 | ||||||||||
Weighted average shares for diluted earnings per share | 25,331,420 | 25,174,015 | 26,748,833 | ||||||||||
Statutory_Financial_Informatio1
Statutory Financial Information (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
United National Insurance Companies | |||||||||||||
Information for United States Insurance Companies & Global Indemnity Reinsurance, Net of Intercompany Eliminations, as Determined in Accordance With SAP and Bermuda | The following is selected information for the Company’s U.S. insurance companies, net of intercompany eliminations, where applicable, as determined in accordance with SAP: | ||||||||||||
Years Ended December 31, | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Statutory capital and surplus, as of end of period | $ | 253,362 | $ | 251,464 | (a) | $ | 413,303 | ||||||
Statutory net income (loss) | 36,003 | 31,781 | 10,813 | ||||||||||
(a) | Includes extraordinary dividend declared in 2013 for an aggregate of $200 million. | ||||||||||||
Global Indemnity Reinsurance | |||||||||||||
Information for United States Insurance Companies & Global Indemnity Reinsurance, Net of Intercompany Eliminations, as Determined in Accordance With SAP and Bermuda | The following is selected information for Global Indemnity Reinsurance, net of intercompany eliminations, where applicable, as determined in accordance with the Bermuda Insurance Act 1978: | ||||||||||||
Years Ended December 31, | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Statutory capital and surplus, as of end of period | $ | 928,720 | $ | 913,401 | $ | 844,696 | |||||||
Statutory net income (loss) | 44,594 | 31,697 | 21,955 |
Segment_Information_Tables
Segment Information (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Summary of Business Segment Information | The following are tabulations of business segment information for the years ended December 31, 2014, 2013, and 2012. Corporate information is included to reconcile segment data to the consolidated financial statements. | ||||||||||||
2014:00:00 | Insurance | Reinsurance | Total | ||||||||||
(Dollars in thousands) | Operations (1) | Operations (2) | |||||||||||
Revenues: | |||||||||||||
Gross premiums written | $ | 229,978 | $ | 61,275 | $ | 291,253 | |||||||
Net premiums written | $ | 212,965 | $ | 60,216 | $ | 273,181 | |||||||
Net premiums earned | $ | 211,165 | $ | 57,354 | $ | 268,519 | |||||||
Other income (loss) | 620 | (65 | ) | 555 | |||||||||
Total revenue | 211,785 | 57,289 | 269,074 | ||||||||||
Losses and Expenses: | |||||||||||||
Net losses and loss adjustment expenses | 117,586 | 19,975 | 137,561 | ||||||||||
Acquisition costs and other underwriting expenses | 88,983 | (3) | 20,636 | 109,619 | |||||||||
Income from segments | 5,216 | 16,678 | 21,894 | ||||||||||
Unallocated items: | |||||||||||||
Net investment income | 28,821 | ||||||||||||
Net realized investment gains | 35,860 | ||||||||||||
Corporate and other operating expenses | 14,559 | ||||||||||||
Interest expense | 822 | ||||||||||||
Income before income taxes | 71,194 | ||||||||||||
Income tax expense | 8,338 | ||||||||||||
Net income | $ | 62,856 | |||||||||||
Total assets | $ | 1,288,763 | $ | 641,270 | (4) | $ | 1,930,033 | ||||||
-1 | Includes business ceded to the Company’s Reinsurance Operations. | ||||||||||||
-2 | External business only, excluding business assumed from affiliates. | ||||||||||||
-3 | Includes excise tax of $1,114 related to cessions from Insurance Operations to Reinsurance Operations. | ||||||||||||
-4 | Comprised of Global Indemnity Reinsurance’s total assets less its investment in subsidiaries. | ||||||||||||
2013:00:00 | Insurance | Reinsurance | Total | ||||||||||
(Dollars in thousands) | Operations (1) | Operations (2) | |||||||||||
Revenues: | |||||||||||||
Gross premiums written | $ | 232,373 | $ | 58,350 | $ | 290,723 | |||||||
Net premiums written | $ | 213,705 | $ | 58,279 | $ | 271,984 | |||||||
Net premiums earned | $ | 196,302 | $ | 52,420 | $ | 248,722 | |||||||
Other income (loss) | 5,795 | (4 | ) | 5,791 | |||||||||
Total revenue | 202,097 | 52,416 | 254,513 | ||||||||||
Losses and Expenses: | |||||||||||||
Net losses and loss adjustment expenses | 116,837 | 16,154 | 132,991 | ||||||||||
Acquisition costs and other underwriting expenses | 87,360 | (3) | 18,291 | 105,651 | |||||||||
Income (loss) from segments | (2,100 | ) | $ | 17,971 | 15,871 | ||||||||
Unallocated items: | |||||||||||||
Net investment income | 37,209 | ||||||||||||
Net realized investment gains | 27,412 | ||||||||||||
Corporate and other operating expenses | (11,614 | ) | |||||||||||
Interest expense | (6,169 | ) | |||||||||||
Income before income taxes | 62,709 | ||||||||||||
Income tax expense | 1,019 | ||||||||||||
Net income | $ | 61,690 | |||||||||||
Total assets | $ | 1,264,306 | $ | 647,473 | (4) | $ | 1,911,779 | ||||||
-1 | Includes business ceded to the Company’s Reinsurance Operations. | ||||||||||||
-2 | External business only, excluding business assumed from affiliates. | ||||||||||||
-3 | Includes excise tax of $1,026 related to cessions from Insurance Operations to Reinsurance Operations. | ||||||||||||
-4 | Comprised of Global Indemnity Reinsurance’s total assets less its investment in subsidiaries. | ||||||||||||
2012:00:00 | Insurance | Reinsurance | Total | ||||||||||
(Dollars in thousands) | Operations (1) | Operations (2) | |||||||||||
Revenues: | |||||||||||||
Gross premiums written | $ | 201,790 | $ | 42,263 | $ | 244,053 | |||||||
Net premiums written | $ | 177,832 | $ | 41,715 | $ | 219,547 | |||||||
Net premiums earned | $ | 179,153 | $ | 59,709 | $ | 238,862 | |||||||
Other income (loss) | 568 | (726 | ) | (158 | ) | ||||||||
Total revenue | 179,721 | 58,983 | 238,704 | ||||||||||
Losses and Expenses: | |||||||||||||
Net losses and loss adjustment expenses | 118,515 | 35,113 | 153,628 | ||||||||||
Acquisition costs and other underwriting expenses | 79,910 | (3) | 15,493 | 95,403 | |||||||||
Income (loss) from segments | (18,704 | ) | $ | 8,377 | (10,327 | ) | |||||||
Unallocated items: | |||||||||||||
Net investment income | 47,557 | ||||||||||||
Net realized investment gains | 6,755 | ||||||||||||
Corporate and other operating expenses | (9,691 | ) | |||||||||||
Interest expense | (5,393 | ) | |||||||||||
Income before income taxes | 28,901 | ||||||||||||
Income tax benefit | (5,856 | ) | |||||||||||
Net income | $ | 34,757 | |||||||||||
Total assets | $ | 1,259,083 | $ | 644,620 | (4) | $ | 1,903,703 | ||||||
-1 | Includes business ceded to the Company’s Reinsurance Operations. | ||||||||||||
-2 | External business only, excluding business assumed from affiliates. | ||||||||||||
-3 | Includes excise tax of $936 related to cessions from Insurance Operations to Reinsurance Operations. | ||||||||||||
-4 | Comprised of Global Indemnity Reinsurance’s total assets less its investment in subsidiaries. |
Supplemental_Cash_Flow_Informa1
Supplemental Cash Flow Information (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Net Federal Income Taxes and Cash Interest Paid | The Company paid the following net federal income taxes and cash interest for 2014, 2013, and 2012: | ||||||||||||
Years Ended December 31, | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Federal income taxes paid | $ | 13,997 | $ | 162 | $ | 265 | |||||||
Federal income taxes recovered | 136 | 7,613 | 38 | ||||||||||
Interest paid | 804 | 7,678 | 5,895 |
Summary_of_Quarterly_Financial1
Summary of Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Summary of Quarterly Performance | An unaudited summary of the Company’s 2014 and 2013 quarterly performance is as follows: | ||||||||||||||||
Year Ended December 31, 2014 | |||||||||||||||||
(Dollars in thousands, except per share data) | First | Second | Third | Fourth | |||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||
Net premiums earned | $ | 67,544 | $ | 66,017 | $ | 68,028 | $ | 66,930 | |||||||||
Net investment income | 8,284 | 7,677 | 6,527 | 6,333 | |||||||||||||
Net realized investment gains (losses) | (813 | ) | 39,881 | 1,158 | (4,366 | ) | |||||||||||
Net losses and loss adjustment expenses | 38,572 | 38,270 | 36,654 | 24,065 | |||||||||||||
Acquisition costs and other underwriting expenses | 26,485 | 27,171 | 27,458 | 28,505 | |||||||||||||
Income before income taxes | 6,974 | 44,798 | 8,128 | 11,294 | |||||||||||||
Net income | 8,823 | 33,208 | 9,761 | 11,064 | |||||||||||||
Per share data—Diluted: | |||||||||||||||||
Net income | $ | 0.35 | $ | 1.31 | $ | 0.39 | $ | 0.44 | |||||||||
Year Ended December 31, 2013 | |||||||||||||||||
(Dollars in thousands, except per share data) | First | Second | Third | Fourth | |||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||
Net premiums earned | $ | 55,996 | $ | 58,671 | $ | 64,469 | $ | 69,586 | |||||||||
Net investment income | 10,034 | 9,765 | 8,486 | 8,924 | |||||||||||||
Net realized investment gains | 5,757 | 2,806 | 1,641 | 17,208 | |||||||||||||
Net losses and loss adjustment expenses | 31,788 | 34,924 | 35,483 | 30,796 | |||||||||||||
Acquisition costs and other underwriting expenses | 24,477 | 24,472 | 28,028 | 28,674 | |||||||||||||
Income before income taxes | 12,058 | 8,440 | 5,056 | 37,155 | |||||||||||||
Net income | 12,365 | 8,664 | 6,948 | 33,713 | |||||||||||||
Per share data—Diluted: | |||||||||||||||||
Net income | $ | 0.49 | $ | 0.34 | $ | 0.28 | $ | 1.34 |
Principles_of_Consolidation_an2
Principles of Consolidation and Basis of Presentation - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Segment | |||
Organization And Basis Of Presentation [Line Items] | |||
Date of incorporation | 9-Mar-10 | ||
State of incorporation | Ireland | ||
Kind of listing | A ordinary shares | ||
Number of business segments | 2 | ||
Amortization and depreciation | $3,466 | $3,807 | $2,282 |
Insurance Operations | |||
Organization And Basis Of Presentation [Line Items] | |||
Number of product classifications | 3 | ||
Restatement Adjustment | |||
Organization And Basis Of Presentation [Line Items] | |||
Amortization and depreciation | $3,000 | $400 |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Significant Accounting Policies [Line Items] | ||||||||||||
Restricted cash | $113,696,000 | $113,696,000 | ||||||||||
Investments in other invested assets | 33,663,000 | 3,489,000 | 33,663,000 | 3,489,000 | ||||||||
Cash and cash equivalents | 58,823,000 | 105,492,000 | 58,823,000 | 105,492,000 | 104,460,000 | 175,860,000 | ||||||
Allowance for bad debts | 1,500,000 | 1,800,000 | 1,500,000 | 1,800,000 | ||||||||
Impairment of goodwill | 0 | 0 | ||||||||||
Impairments of indefinite lived intangible assets | 0 | 0 | ||||||||||
Impairment of definite lived intangible assets | 0 | 0 | ||||||||||
Amortization of deferred acquisition costs | 57,100,000 | 53,800,000 | 48,900,000 | |||||||||
Premium deficiency charges | 400,000 | 1,700,000 | 500,000 | |||||||||
Premium deficiency reserve | 0 | 0 | 0 | 0 | ||||||||
Contingent commissions | 12,985,000 | 12,677,000 | 12,985,000 | 12,677,000 | ||||||||
Net foreign currency transaction gains (losses) | 500,000 | 300,000 | -700,000 | |||||||||
Overstatement of net income and equity over the three year period | 1,600,000 | |||||||||||
Unpaid losses and loss adjustment expenses | 675,472,000 | 779,466,000 | 675,472,000 | 779,466,000 | 879,114,000 | 971,377,000 | ||||||
Net losses and loss adjustment expenses | 24,065,000 | 36,654,000 | 38,270,000 | 38,572,000 | 30,796,000 | 35,483,000 | 34,924,000 | 31,788,000 | 137,561,000 | 132,991,000 | 153,628,000 | |
Proceeds from sale of capital stock | 26,600,000 | |||||||||||
Pretax gain on sale of capital stock | 5,166,000 | |||||||||||
Error Correction | ||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||
Unpaid losses and loss adjustment expenses | 1,600,000 | |||||||||||
Net losses and loss adjustment expenses | 1,600,000 | |||||||||||
Net losses and loss adjustment expenses per diluted share | $0.06 | |||||||||||
American Reliable Insurance Company | ||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||
Restricted cash | 113,696,000 | 113,696,000 | ||||||||||
Business acquisition date | 1-Jan-15 | |||||||||||
Allowance for Reinsurance Recoverable | ||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||
Allowance for uncollectible reinsurance receivables | 9,350,000 | 9,010,000 | 9,350,000 | 9,010,000 | 9,010,000 | 10,022,000 | ||||||
Money Market Funds | ||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||
Cash and cash equivalents | $39,100,000 | $39,100,000 |
Schedule_of_Amortized_Cost_and
Schedule of Amortized Cost and Estimated Fair Value of Investments (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | $1,405,419 | $1,382,175 | ||
Gross Unrealized Gains | 40,666 | 87,326 | ||
Gross Unrealized Losses | -6,899 | -7,578 | ||
Estimated Fair Value | 1,439,186 | 1,461,923 | ||
Other than temporary impairments recognized in AOCI | -17 | [1] | -24 | [1] |
Common Shares | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | 99,297 | 191,425 | ||
Gross Unrealized Gains | 25,689 | 63,281 | ||
Gross Unrealized Losses | -2,938 | -636 | ||
Estimated Fair Value | 122,048 | 254,070 | ||
Other Invested Assets | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | 33,174 | 3,065 | ||
Gross Unrealized Gains | 489 | 424 | ||
Estimated Fair Value | 33,663 | 3,489 | ||
Fixed Maturities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | 1,272,948 | 1,187,685 | ||
Gross Unrealized Gains | 14,488 | 23,621 | ||
Gross Unrealized Losses | -3,961 | -6,942 | ||
Estimated Fair Value | 1,283,475 | 1,204,364 | ||
Other than temporary impairments recognized in AOCI | -17 | [1] | -24 | [1] |
Fixed Maturities | U.S. Treasury and Agency Obligations | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | 78,569 | 78,510 | ||
Gross Unrealized Gains | 2,281 | 3,330 | ||
Gross Unrealized Losses | -83 | -166 | ||
Estimated Fair Value | 80,767 | 81,674 | ||
Fixed Maturities | Obligations of States and Political Subdivisions | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | 188,452 | 178,705 | ||
Gross Unrealized Gains | 3,718 | 4,472 | ||
Gross Unrealized Losses | -697 | -2,241 | ||
Estimated Fair Value | 191,473 | 180,936 | ||
Fixed Maturities | Mortgage Backed Securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | 205,814 | 228,550 | ||
Gross Unrealized Gains | 3,709 | 4,219 | ||
Gross Unrealized Losses | -764 | -2,859 | ||
Estimated Fair Value | 208,759 | 229,910 | ||
Other than temporary impairments recognized in AOCI | -4 | [1] | -5 | [1] |
Fixed Maturities | Asset-backed Securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | 177,853 | 167,454 | ||
Gross Unrealized Gains | 713 | 1,210 | ||
Gross Unrealized Losses | -303 | -228 | ||
Estimated Fair Value | 178,263 | 168,436 | ||
Other than temporary impairments recognized in AOCI | -13 | [1] | -19 | [1] |
Fixed Maturities | Commercial Mortgage-Backed Securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | 133,984 | 54,822 | ||
Gross Unrealized Gains | 21 | 9 | ||
Gross Unrealized Losses | -847 | -856 | ||
Estimated Fair Value | 133,158 | 53,975 | ||
Fixed Maturities | Corporate bonds and loans | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | 380,704 | 426,872 | ||
Gross Unrealized Gains | 3,421 | 9,112 | ||
Gross Unrealized Losses | -709 | -592 | ||
Estimated Fair Value | 383,416 | 435,392 | ||
Fixed Maturities | Foreign Corporate Bonds | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | 107,572 | 52,772 | ||
Gross Unrealized Gains | 625 | 1,269 | ||
Gross Unrealized Losses | -558 | |||
Estimated Fair Value | $107,639 | $54,041 | ||
[1] | Represents the total amount of other than temporary impairment losses relating to factors other than credit losses recognized in accumulated other comprehensive income ("AOCI"). |
Investments_Additional_Informa
Investments - Additional Information (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
Schedule of Available-for-sale Securities [Line Items] | ||||
Gross unrealized losses | $6,899,000 | $7,578,000 | ||
Gross unrealized losses 12 months or greater | 1,739,000 | [1] | 260,000 | [1] |
Investments in insurance enhanced municipal bonds | 16,406,000 | |||
Ratings without insurance | 1,251,000 | |||
Investments in asset backed and taxable municipal bonds | 19,400,000 | |||
Asset backed and taxable municipal bonds as a percentage of total cash and invested assets | 1.30% | |||
AA- Rating | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Investments in insurance enhanced asset backed and credit securities | 35,800,000 | |||
Investments in insurance enhanced municipal bonds | 16,400,000 | |||
Insurance enhanced municipal bonds as a percentage of total cash and invested assets | 1.10% | |||
Insurance enhanced municipal bonds | 10,300,000 | |||
Maximum | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Investments in a single issuer as a percentage of shareholders' equity | 4.00% | 4.00% | ||
Financial Guarantors | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Investments in insurance enhanced municipal bonds | 10,480,000 | |||
Pre-Refunded Securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Investments in insurance enhanced municipal bonds | 6,067,000 | |||
Pre-Refunded Securities | Financial Guarantors | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Investments in insurance enhanced municipal bonds | 141,000 | |||
AA Rating | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Ratings without insurance | 1,251,000 | |||
Municipal Bond Insurance Association | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Investments in asset backed and taxable municipal bonds | 11,200,000 | |||
Ambac Financial Group | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Investments in asset backed and taxable municipal bonds | 1,000,000 | |||
Assured Guaranty Corporation | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Investments in asset backed and taxable municipal bonds | 7,200,000 | |||
Obligations of States and Political Subdivisions | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Gross unrealized losses | 697,000 | |||
Obligations of States and Political Subdivisions | A- Rating | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Gross unrealized losses 12 months or greater | 383,000 | |||
Common Shares | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Gross unrealized losses | 2,938,000 | 636,000 | ||
Gross unrealized losses 12 months or greater | 130,000 | [1] | 9,000 | [1] |
U.S. Treasury and Agency Obligations | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Gross unrealized losses | 83,000 | |||
U.S. Treasury and Agency Obligations | AA+ Rating | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Gross unrealized losses 12 months or greater | 74,000 | |||
Mortgage Backed Securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Gross unrealized losses | 764,000 | |||
Mortgage Backed Securities | AA+ Rating | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Gross unrealized losses 12 months or greater | 757,000 | |||
Asset-backed Securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Gross unrealized losses | 303,000 | |||
Weighted average credit enhancement | 20.50% | |||
Asset-backed Securities | A Rating | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Gross unrealized losses 12 months or greater | 20,000 | |||
Commercial Mortgage-Backed Securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Gross unrealized losses | 847,000 | |||
Weighted average credit enhancement | 33.50% | |||
Commercial Mortgage-Backed Securities | AA Rating | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Gross unrealized losses 12 months or greater | 322,000 | |||
Corporate bonds and loans | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Gross unrealized losses | 709,000 | |||
Corporate bonds and loans | A+ Rating | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Gross unrealized losses 12 months or greater | 53,000 | |||
Foreign Corporate Bonds | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Gross unrealized losses | $558,000 | |||
Percentage of securities in unrealized loss position for twelve months or longer and rated investment grade | 96.20% | |||
[1] | Fixed maturities in a gross unrealized loss position for twelve months or longer are primarily comprised of non-credit losses on investment grade securities where management does not intend to sell, and it is more likely than not that the Company will not be forced to sell the security before recovery. The Company has analyzed these securities and has determined that they are not other than temporarily impaired. |
Summary_of_Amortized_Cost_and_
Summary of Amortized Cost and Estimated Fair Value Through Fixed Maturities (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Due in one year or less, Amortized Cost | $133,140 | |
Due in one year through five years, Amortized Cost | 546,653 | |
Due in five years through ten years, Amortized Cost | 41,831 | |
Due in ten years through fifteen years, Amortized Cost | 11,228 | |
Due after fifteen years, Amortized Cost | 22,445 | |
Fixed maturities, amortized cost | 1,272,948 | 1,187,685 |
Due in one year or less, Estimated Fair value | 134,722 | |
Due in one year through five years, Estimated Fair value | 552,135 | |
Due in five years through ten years, Estimated Fair value | 42,469 | |
Due in ten years through fifteen years, Estimated Fair value | 11,316 | |
Due after fifteen years, Estimated Fair value | 22,653 | |
Fixed Maturities, estimated fair value | 1,283,475 | 1,204,364 |
Mortgage Backed Securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 205,814 | |
Estimated Fair value | 208,759 | |
Asset-backed Securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 177,853 | |
Estimated Fair value | 178,263 | |
Commercial Mortgage-Backed Securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 133,984 | |
Estimated Fair value | $133,158 |
Summary_of_Securities_with_Gro
Summary of Securities with Gross Unrealized Losses (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Less than 12 months, Fair Value | $453,042 | $347,857 | ||
Less than 12 months, Gross Unrealized Losses | -5,160 | -7,318 | ||
12 months or longer, Fair Value | 115,363 | [1] | 10,443 | [1] |
12 months or longer, Gross Unrealized Losses | -1,739 | [1] | -260 | [1] |
Total, Fair Value | 568,405 | 358,300 | ||
Total, Gross Unrealized Losses | -6,899 | -7,578 | ||
U.S. Treasury and Agency Obligations | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Total, Gross Unrealized Losses | -83 | |||
Obligations of States and Political Subdivisions | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Total, Gross Unrealized Losses | -697 | |||
Mortgage Backed Securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Total, Gross Unrealized Losses | -764 | |||
Asset-backed Securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Total, Gross Unrealized Losses | -303 | |||
Commercial Mortgage-Backed Securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Total, Gross Unrealized Losses | -847 | |||
Corporate bonds and loans | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Total, Gross Unrealized Losses | -709 | |||
Common Shares | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Less than 12 months, Fair Value | 20,002 | 18,622 | ||
Less than 12 months, Gross Unrealized Losses | -2,808 | -627 | ||
12 months or longer, Fair Value | 1,577 | [1] | 140 | [1] |
12 months or longer, Gross Unrealized Losses | -130 | [1] | -9 | [1] |
Total, Fair Value | 21,579 | 18,762 | ||
Total, Gross Unrealized Losses | -2,938 | -636 | ||
Foreign Corporate Bonds | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Total, Gross Unrealized Losses | -558 | |||
Fixed Maturities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Less than 12 months, Fair Value | 433,040 | 329,235 | ||
Less than 12 months, Gross Unrealized Losses | -2,352 | -6,691 | ||
12 months or longer, Fair Value | 113,786 | [1] | 10,303 | [1] |
12 months or longer, Gross Unrealized Losses | -1,609 | [1] | -251 | [1] |
Total, Fair Value | 546,826 | 339,538 | ||
Total, Gross Unrealized Losses | -3,961 | -6,942 | ||
Fixed Maturities | U.S. Treasury and Agency Obligations | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Less than 12 months, Fair Value | 11,728 | 9,335 | ||
Less than 12 months, Gross Unrealized Losses | -9 | -166 | ||
12 months or longer, Fair Value | 3,343 | [1] | ||
12 months or longer, Gross Unrealized Losses | -74 | [1] | ||
Total, Fair Value | 15,071 | 9,335 | ||
Total, Gross Unrealized Losses | -83 | -166 | ||
Fixed Maturities | Obligations of States and Political Subdivisions | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Less than 12 months, Fair Value | 28,684 | 61,401 | ||
Less than 12 months, Gross Unrealized Losses | -314 | -2,000 | ||
12 months or longer, Fair Value | 28,061 | [1] | 9,922 | [1] |
12 months or longer, Gross Unrealized Losses | -383 | [1] | -241 | [1] |
Total, Fair Value | 56,745 | 71,323 | ||
Total, Gross Unrealized Losses | -697 | -2,241 | ||
Fixed Maturities | Mortgage Backed Securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Less than 12 months, Fair Value | 2,818 | 110,304 | ||
Less than 12 months, Gross Unrealized Losses | -7 | -2,859 | ||
12 months or longer, Fair Value | 51,203 | [1] | 2 | [1] |
12 months or longer, Gross Unrealized Losses | -757 | [1] | ||
Total, Fair Value | 54,021 | 110,306 | ||
Total, Gross Unrealized Losses | -764 | -2,859 | ||
Fixed Maturities | Asset-backed Securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Less than 12 months, Fair Value | 92,123 | 42,247 | ||
Less than 12 months, Gross Unrealized Losses | -283 | -228 | ||
12 months or longer, Fair Value | 1,683 | [1] | 3 | [1] |
12 months or longer, Gross Unrealized Losses | -20 | [1] | ||
Total, Fair Value | 93,806 | 42,250 | ||
Total, Gross Unrealized Losses | -303 | -228 | ||
Fixed Maturities | Commercial Mortgage-Backed Securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Less than 12 months, Fair Value | 92,664 | 45,642 | ||
Less than 12 months, Gross Unrealized Losses | -525 | -856 | ||
12 months or longer, Fair Value | 26,280 | [1] | ||
12 months or longer, Gross Unrealized Losses | -322 | [1] | ||
Total, Fair Value | 118,944 | 45,642 | ||
Total, Gross Unrealized Losses | -847 | -856 | ||
Fixed Maturities | Corporate bonds and loans | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Less than 12 months, Fair Value | 144,505 | 60,306 | ||
Less than 12 months, Gross Unrealized Losses | -656 | -582 | ||
12 months or longer, Fair Value | 3,216 | [1] | 376 | [1] |
12 months or longer, Gross Unrealized Losses | -53 | [1] | -10 | [1] |
Total, Fair Value | 147,721 | 60,682 | ||
Total, Gross Unrealized Losses | -709 | -592 | ||
Fixed Maturities | Foreign Corporate Bonds | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Less than 12 months, Fair Value | 60,518 | |||
Less than 12 months, Gross Unrealized Losses | -558 | |||
Total, Fair Value | 60,518 | |||
Total, Gross Unrealized Losses | ($558) | |||
[1] | Fixed maturities in a gross unrealized loss position for twelve months or longer are primarily comprised of non-credit losses on investment grade securities where management does not intend to sell, and it is more likely than not that the Company will not be forced to sell the security before recovery. The Company has analyzed these securities and has determined that they are not other than temporarily impaired. |
Schedule_of_Other_Than_Tempora
Schedule of Other Than Temporary Impairments on Investments (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Schedule of Available-for-sale Securities [Line Items] | |||
OTTI losses, gross | ($31) | ($280) | ($1,258) |
Portion of loss recognized in other comprehensive income (pre-tax) | 541 | ||
Net impairment losses on fixed maturities recognized in earnings | -31 | -280 | -717 |
Equity securities | -470 | -959 | -4,656 |
Total | ($501) | ($1,239) | ($5,373) |
Schedule_of_Credit_Losses_Reco
Schedule of Credit Losses Recognized in Earnings (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Schedule of Available-for-sale Securities [Line Items] | |||
Balance at beginning of period | $54 | $86 | $86 |
Additions where no OTTI was previously recorded | 55 | ||
Additions where an OTTI was previously recorded | 0 | 0 | 0 |
Reductions for securities for which the company intends to sell or more likely than not will be required to sell before recovery | 0 | 0 | 0 |
Reductions reflecting increases in expected cash flows to be collected | 0 | 0 | 0 |
Reductions for securities sold during the period | -4 | -32 | -55 |
Balance at end of period | $50 | $54 | $86 |
Schedule_of_Accumulated_Other_
Schedule of Accumulated Other Comprehensive Income, Net of Tax (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Deferred taxes | ($10,263) | ($25,480) | |
Accumulated other comprehensive income, net of tax | 23,384 | 54,028 | 53,350 |
Fixed Maturities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Net unrealized gains | 10,527 | 16,679 | |
Common Shares | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Net unrealized gains | 22,751 | 62,645 | |
Other | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Net unrealized gains | $369 | $184 |
Changes_in_Accumulated_Other_C
Changes in Accumulated Other Comprehensive Income (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | $54,028 | $53,350 | |
Other comprehensive income (loss) before reclassification | 6,533 | 17,629 | |
Amounts reclassified from accumulated other comprehensive income (loss) | -37,177 | -16,951 | |
Other comprehensive income (loss), net of tax | -30,644 | 678 | 13,176 |
Ending balance | 23,384 | 54,028 | 53,350 |
Unrealized Gains and Losses on Available for Sale Securities | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | 53,950 | 53,435 | |
Other comprehensive income (loss) before reclassification | 6,820 | 17,630 | |
Amounts reclassified from accumulated other comprehensive income (loss) | -37,123 | -17,115 | |
Other comprehensive income (loss), net of tax | -30,303 | 515 | |
Ending balance | 23,647 | 53,950 | |
Foreign Currency Items | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | 78 | -85 | |
Other comprehensive income (loss) before reclassification | -287 | -1 | |
Amounts reclassified from accumulated other comprehensive income (loss) | -54 | 164 | |
Other comprehensive income (loss), net of tax | -341 | 163 | |
Ending balance | ($263) | $78 |
Reclassifications_Out_of_Accum
Reclassifications Out of Accumulated Other Comprehensive Income (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Other net realized investment (gains) losses | $36,361 | $28,651 | $12,128 | ||||||||
Other than temporary impairment losses on investments | -501 | -1,239 | -5,914 | ||||||||
Income before income taxes | 11,294 | 8,128 | 44,798 | 6,974 | 37,155 | 5,056 | 8,440 | 12,058 | 71,194 | 62,709 | 28,901 |
Income tax expense (benefit) | -8,338 | -1,019 | 5,856 | ||||||||
Net income | 11,064 | 9,761 | 33,208 | 8,823 | 33,713 | 6,948 | 8,664 | 12,365 | 62,856 | 61,690 | 34,757 |
Reclassification out of Accumulated Other Comprehensive Income | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Net income | -37,177 | -16,951 | |||||||||
Reclassification out of Accumulated Other Comprehensive Income | Unrealized Gains and Losses on Available for Sale Securities | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Other net realized investment (gains) losses | -57,114 | -27,476 | |||||||||
Other than temporary impairment losses on investments | 501 | 1,239 | |||||||||
Income before income taxes | -56,613 | -26,237 | |||||||||
Income tax expense (benefit) | 19,490 | 9,122 | |||||||||
Net income | -37,123 | -17,115 | |||||||||
Reclassification out of Accumulated Other Comprehensive Income | Foreign Currency Items | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Other net realized investment (gains) losses | -83 | 252 | |||||||||
Income tax expense (benefit) | 29 | -88 | |||||||||
Net income | ($54) | $164 |
Components_of_Net_Realized_Inv
Components of Net Realized Investment Gains (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Schedule of Available-for-sale Securities [Line Items] | |||||||||||
Total net realized investment gains | ($4,366) | $1,158 | $39,881 | ($813) | $17,208 | $1,641 | $2,806 | $5,757 | $35,860 | $27,412 | $6,755 |
Not Designated as Hedging Instrument | Interest Rate Swap | |||||||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||||||
Gross realized gains | 1,668 | ||||||||||
Gross realized losses | -20,836 | -241 | |||||||||
Total net realized investment gains | -20,836 | 1,427 | |||||||||
Fixed Maturities | |||||||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||||||
Gross realized gains | 2,843 | 1,857 | 4,100 | ||||||||
Gross realized losses | -703 | -691 | -1,800 | ||||||||
Total net realized investment gains | 2,140 | 1,166 | 2,300 | ||||||||
Common Shares | |||||||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||||||
Gross realized gains | 55,907 | 27,302 | 10,630 | ||||||||
Gross realized losses | -1,351 | -2,483 | -6,175 | ||||||||
Total net realized investment gains | $54,556 | $24,819 | $4,455 |
Schedule_of_Proceeds_From_Sale
Schedule of Proceeds From Sales of Available for Sale Securities (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Schedule of Available-for-sale Securities [Line Items] | |||
Fixed maturities | $415,739 | $292,200 | $454,655 |
Equity securities | 191,765 | 101,379 | 50,176 |
Other invested assets | $1,114 |
Schedule_of_Investment_Income_
Schedule of Investment Income (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Schedule of Available-for-sale Securities [Line Items] | |||||||||||
Investment income | $32,420 | $41,388 | $52,014 | ||||||||
Investment expense | -3,599 | -4,179 | -4,457 | ||||||||
Net investment income | 6,333 | 6,527 | 7,677 | 8,284 | 8,924 | 8,486 | 9,765 | 10,034 | 28,821 | 37,209 | 47,557 |
Fixed Maturities | |||||||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||||||
Investment income | 26,788 | 35,669 | 41,969 | ||||||||
Equity Securities | |||||||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||||||
Investment income | 5,484 | 5,452 | 5,132 | ||||||||
Cash and Cash Equivalents | |||||||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||||||
Investment income | 61 | 126 | 111 | ||||||||
Other Invested Assets | |||||||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||||||
Investment income | $87 | $141 | $4,802 |
Schedule_of_Total_Investment_R
Schedule of Total Investment Return (Detail) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Net Investment Income [Line Items] | ||||||||||||||
Net investment income | $6,333 | $6,527 | $7,677 | $8,284 | $8,924 | $8,486 | $9,765 | $10,034 | $28,821 | $37,209 | $47,557 | |||
Net realized investment gains | -4,366 | 1,158 | 39,881 | -813 | 17,208 | 1,641 | 2,806 | 5,757 | 35,860 | 27,412 | 6,755 | |||
Change in unrealized investment gains (losses) | -45,861 | 7,301 | 18,417 | |||||||||||
Net realized and unrealized investment returns | -10,001 | 34,713 | 25,172 | |||||||||||
Total investment return | 18,820 | 71,922 | 72,729 | |||||||||||
Total investment return % | 1.20% | 4.60% | 4.60% | |||||||||||
Average investment portfolio | $1,533,104 | [1] | $1,549,747 | [1] | $1,590,281 | [1] | ||||||||
[1] | Average of total cash and invested assets, net of receivable/payable for securities purchased and sold, as of the beginning and end of the period. |
Municipal_Bonds_with_and_witho
Municipal Bonds with and without Insurance (Detail) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Financial Statement Details [Line Items] | |
Ratings with insurance | $1,251 |
Ratings without insurance | 1,251 |
AAA Rating | |
Financial Statement Details [Line Items] | |
Ratings with insurance | 1,251 |
AA Rating | |
Financial Statement Details [Line Items] | |
Ratings without insurance | $1,251 |
Summary_of_Insurance_Enhanced_
Summary of Insurance Enhanced Municipal Bonds Backed by Financial Guarantors (Detail) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | $16,406 |
Ambac Financial Group | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 1,259 |
Assured Guaranty Corporation | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 3,757 |
Municipal Bond Insurance Association | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 3,614 |
Gov't National Housing Association | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 599 |
Permanent School Fund Guaranty | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 1,251 |
Financial Guarantors | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 10,480 |
Other Credit Enhanced Municipal Bonds | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 5,926 |
Pre-Refunded Securities | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 6,067 |
Pre-Refunded Securities | Ambac Financial Group | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 141 |
Pre-Refunded Securities | Assured Guaranty Corporation | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 0 |
Pre-Refunded Securities | Municipal Bond Insurance Association | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 0 |
Pre-Refunded Securities | Gov't National Housing Association | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 0 |
Pre-Refunded Securities | Permanent School Fund Guaranty | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 0 |
Pre-Refunded Securities | Financial Guarantors | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 141 |
Pre-Refunded Securities | Other Credit Enhanced Municipal Bonds | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 5,926 |
Government Guaranteed Securities | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 1,850 |
Government Guaranteed Securities | Ambac Financial Group | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 0 |
Government Guaranteed Securities | Assured Guaranty Corporation | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 0 |
Government Guaranteed Securities | Municipal Bond Insurance Association | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 0 |
Government Guaranteed Securities | Gov't National Housing Association | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 599 |
Government Guaranteed Securities | Permanent School Fund Guaranty | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 1,251 |
Government Guaranteed Securities | Financial Guarantors | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 1,850 |
Government Guaranteed Securities | Other Credit Enhanced Municipal Bonds | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 0 |
Exposure Net Of Pre-refunded & Government Guaranteed Securities | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 8,489 |
Exposure Net Of Pre-refunded & Government Guaranteed Securities | Ambac Financial Group | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 1,118 |
Exposure Net Of Pre-refunded & Government Guaranteed Securities | Assured Guaranty Corporation | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 3,757 |
Exposure Net Of Pre-refunded & Government Guaranteed Securities | Municipal Bond Insurance Association | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 3,614 |
Exposure Net Of Pre-refunded & Government Guaranteed Securities | Gov't National Housing Association | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 0 |
Exposure Net Of Pre-refunded & Government Guaranteed Securities | Permanent School Fund Guaranty | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 0 |
Exposure Net Of Pre-refunded & Government Guaranteed Securities | Financial Guarantors | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 8,489 |
Exposure Net Of Pre-refunded & Government Guaranteed Securities | Other Credit Enhanced Municipal Bonds | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | $0 |
Summary_of_Estimated_Fair_Valu
Summary of Estimated Fair Values of Bonds Held on Deposit (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Estimated Fair Value | $856,068 | $878,203 | ||
On Deposit With Governmental Authorities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Estimated Fair Value | 32,790 | 36,176 | ||
Intercompany Trusts Held For Benefit Of U.S. Policyholders | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Estimated Fair Value | 495,301 | 584,683 | ||
Held In Trust Pursuant To Third Party Requirements | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Estimated Fair Value | 95,828 | 129,339 | ||
Letter Of Credit Held For Third Party Requirements | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Estimated Fair Value | 9,340 | 7,068 | ||
Securities held as collateral for borrowing arrangements | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Estimated Fair Value | $222,809 | [1] | $120,937 | [1] |
[1] | Amount required to collateralize margin borrowing facilities. |
Summarized_Information_of_Loca
Summarized Information of Location and Gross Amount of Derivatives' Fair Value in Consolidated Balance Sheets (Detail) (Not Designated as Hedging Instrument, Interest Rate Swap, USD $) | Dec. 31, 2013 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Other Assets | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | $200,000 | |
Fair Value | 1,668 | |
Other Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 200,000 | |
Fair Value | ($13,675) |
Summary_of_Net_Gains_Losses_In
Summary of Net Gains (Losses) Included in Consolidated Statement of Operations for Changes in Fair Value of Derivatives and Periodic net Interest Settlements Under Derivatives (Detail) (Interest Rate Swap, Other Net Realized Investment Gains, USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Interest Rate Swap | Other Net Realized Investment Gains | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Net gain (loss) for changes in fair value and net settlements of derivatives | ($20,836) | $1,427 |
Derivative_Instruments_Additio
Derivative Instruments - Additional Information (Detail) (Other Assets, USD $) | Dec. 31, 2014 |
In Millions, unless otherwise specified | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Collateral posted for derivatives | $5.40 |
Interest Rate Swap | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Margin calls made in connection with interest rate swaps | $15.30 |
Companys_Invested_Assets_and_D
Company's Invested Assets and Derivative Instruments Measured at Fair Value on Recurring Basis (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | $1,439,186 | $1,461,923 |
Common Shares | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 122,048 | 254,070 |
Other Invested Assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 33,663 | 3,489 |
Fixed Maturities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 1,283,475 | 1,204,364 |
Fixed Maturities | U.S. Treasury and Agency Obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 80,767 | 81,674 |
Fixed Maturities | Obligations of States and Political Subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 191,473 | 180,936 |
Fixed Maturities | Mortgage Backed Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 208,759 | 229,910 |
Fixed Maturities | Commercial Mortgage-Backed Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 133,158 | 53,975 |
Fixed Maturities | Asset-backed Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 178,263 | 168,436 |
Fixed Maturities | Corporate bonds and loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 383,416 | 435,392 |
Fixed Maturities | Foreign Corporate Bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 107,639 | 54,041 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 1,439,186 | 1,463,591 |
Total invested liabilities | 13,675 | |
Fair Value, Measurements, Recurring | Derivative instruments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested liabilities | 13,675 | |
Fair Value, Measurements, Recurring | Derivative instruments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 1,668 | |
Fair Value, Measurements, Recurring | Common Shares | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 122,048 | 254,070 |
Fair Value, Measurements, Recurring | Other Invested Assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 33,663 | 3,489 |
Fair Value, Measurements, Recurring | Fixed Maturities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 1,283,475 | 1,204,364 |
Fair Value, Measurements, Recurring | Fixed Maturities | U.S. Treasury and Agency Obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 80,767 | 81,674 |
Fair Value, Measurements, Recurring | Fixed Maturities | Obligations of States and Political Subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 191,473 | 180,936 |
Fair Value, Measurements, Recurring | Fixed Maturities | Mortgage Backed Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 208,759 | 229,910 |
Fair Value, Measurements, Recurring | Fixed Maturities | Commercial Mortgage-Backed Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 133,158 | 53,975 |
Fair Value, Measurements, Recurring | Fixed Maturities | Asset-backed Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 178,263 | 168,436 |
Fair Value, Measurements, Recurring | Fixed Maturities | Corporate bonds and loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 383,416 | 435,392 |
Fair Value, Measurements, Recurring | Fixed Maturities | Foreign Corporate Bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 107,639 | 54,041 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 196,813 | 325,364 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Common Shares | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 122,048 | 254,070 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Other Invested Assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Fixed Maturities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 74,765 | 71,294 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Fixed Maturities | U.S. Treasury and Agency Obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 74,765 | 71,294 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Fixed Maturities | Obligations of States and Political Subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Fixed Maturities | Mortgage Backed Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Fixed Maturities | Commercial Mortgage-Backed Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Fixed Maturities | Asset-backed Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Fixed Maturities | Corporate bonds and loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Fixed Maturities | Foreign Corporate Bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 1,208,710 | 1,134,738 |
Total invested liabilities | 13,675 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Derivative instruments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested liabilities | 13,675 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Derivative instruments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 1,668 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Common Shares | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Other Invested Assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Fixed Maturities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 1,208,710 | 1,133,070 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Fixed Maturities | U.S. Treasury and Agency Obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 6,002 | 10,380 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Fixed Maturities | Obligations of States and Political Subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 191,473 | 180,936 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Fixed Maturities | Mortgage Backed Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 208,759 | 229,910 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Fixed Maturities | Commercial Mortgage-Backed Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 133,158 | 53,975 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Fixed Maturities | Asset-backed Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 178,263 | 168,436 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Fixed Maturities | Corporate bonds and loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 383,416 | 435,392 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Fixed Maturities | Foreign Corporate Bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 107,639 | 54,041 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 33,663 | 3,489 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Common Shares | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Other Invested Assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 33,663 | 3,489 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Fixed Maturities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Fixed Maturities | U.S. Treasury and Agency Obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Fixed Maturities | Obligations of States and Political Subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Fixed Maturities | Mortgage Backed Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Fixed Maturities | Commercial Mortgage-Backed Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Fixed Maturities | Asset-backed Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Fixed Maturities | Corporate bonds and loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Fixed Maturities | Foreign Corporate Bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | $0 |
Changes_in_Level_3_Investments
Changes in Level 3 Investments Measured at Fair Value on Recurring Basis (Detail) (Other Invested Assets, USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Other Invested Assets | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Beginning balance | $3,489 | $3,132 | $6,617 |
Included in accumulated other comprehensive income (loss) | 65 | 341 | -2,384 |
Purchases | 30,121 | 16 | 13 |
Distributions | -12 | -1,114 | |
Ending balance | $33,663 | $3,489 | $3,132 |
Fair_Value_and_Future_Funding_
Fair Value and Future Funding Commitments Related to These Investments (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair Value | $33,663 | $3,489 | ||
Future Funding Commitments | 22,500 | 2,490 | ||
Equity Fund, LP | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair Value | 3,401 | [1] | 3,489 | [1] |
Future Funding Commitments | 2,436 | [1] | 2,490 | [1] |
European Non-Performing Loan Fund, LP | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair Value | 30,262 | [2] | ||
Future Funding Commitments | $20,064 | [2] | ||
[1] | This limited partnership invests in companies, from various business sectors, whereby the partnership has acquired control of the operating business as a lead or organizing investor. The Company does not have the contractual option to redeem its limited partnership interest but receives distributions based on the liquidation of the underlying assets. The Company does not have the ability to sell or transfer its limited partnership interest without consent from the general partner. | |||
[2] | This limited partnership invests in distressed securities and assets through senior and subordinated, secured and unsecured debt and equity, in both public and private large-cap and middle-market companies. The Company does not have the contractual option to redeem its limited partnership interest but receives distributions based on the liquidation of the underlying assets. The Company does not have the ability to sell or transfer its limited partnership interest without consent from the general partner. |
Fair_Value_and_Future_Funding_1
Fair Value and Future Funding Commitments Related to These Investments (Parenthetical) (Detail) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fair value written down | $0 |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Intangible Assets And Goodwill [Line Items] | |||
Goodwill | $4,820,000 | $4,820,000 | |
Impairment of goodwill | 0 | 0 | |
Amortization of definite lived intangible assets | 400,000 | 400,000 | 400,000 |
Indefinite lived intangible assets | 14,000,000 | 14,000,000 | |
Impairment of indefinite lived intangible assets | 0 | 0 | |
Definite lived intangible assets | 3,600,000 | 4,000,000 | |
Impairment of definite lived intagnible assets | $0 | $0 |
Intangible_Assets_Detail
Intangible Assets (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Acquired Intangible Assets [Line Items] | ||
Cost | $19,350 | $19,350 |
Cost and Net Value | 14,000 | 14,000 |
Accumulated Amortization | 1,714 | 1,360 |
Net Value | 3,600 | 4,000 |
Net Value | 17,636 | 17,990 |
Trademarks | ||
Acquired Intangible Assets [Line Items] | ||
Useful Life | Indefinite | Indefinite |
Cost and Net Value | 4,800 | 4,800 |
Trade names | ||
Acquired Intangible Assets [Line Items] | ||
Useful Life | Indefinite | Indefinite |
Cost and Net Value | 4,200 | 4,200 |
State insurance licenses | ||
Acquired Intangible Assets [Line Items] | ||
Useful Life | Indefinite | Indefinite |
Cost and Net Value | 5,000 | 5,000 |
Customer relationships | ||
Acquired Intangible Assets [Line Items] | ||
Useful Life | 15 years | 15 years |
Cost | 5,300 | 5,300 |
Accumulated Amortization | 1,664 | 1,310 |
Net Value | 3,636 | 3,990 |
Non-compete agreements | ||
Acquired Intangible Assets [Line Items] | ||
Useful Life | 2 years | 2 years |
Cost | 50 | 50 |
Accumulated Amortization | $50 | $50 |
Expected_Amortization_Expense_
Expected Amortization Expense (Detail) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Finite-Lived Intangible Assets [Line Items] | |
2015 | ($353) |
2016 | -353 |
2017 | -353 |
2018 | -353 |
2019 | ($353) |
Reinsurance_Balances_Detail
Reinsurance Balances (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Effects of Reinsurance [Line Items] | ||||
Reinsurance receivables, net | $125,718 | $197,887 | ||
Collateral securing reinsurance receivables | -8,701 | -9,436 | ||
Reinsurance receivables, net of collateral | 117,017 | 188,451 | ||
Prepaid reinsurance premiums | 4,725 | 5,199 | ||
Allowance for Reinsurance Recoverable | ||||
Effects of Reinsurance [Line Items] | ||||
Allowance for uncollectible reinsurance receivables | $9,350 | $9,010 | $9,010 | $10,022 |
Reinsurance_Additional_Informa
Reinsurance - Additional Information (Detail) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Effects of Reinsurance [Line Items] | ||
Purchase accounting adjustments | $4 | $6 |
Minimum | ||
Effects of Reinsurance [Line Items] | ||
Unsecured reinsurance receivable percentage of shareholders' equity | 3.00% |
Unsecured_Reinsurance_Receivab
Unsecured Reinsurance Receivable (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Reinsurance Receivables | $125,718 | $197,887 |
Munich Re America Corporation | A.M, Best A+ Rating | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Reinsurance Receivables | $67,429 |
Effect_of_Reinsurance_on_Premi
Effect of Reinsurance on Premiums Written and Earned (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | |||||||||||
Direct business | $229,978 | $232,373 | $201,787 | ||||||||
Reinsurance assumed | 61,275 | 58,350 | 42,266 | ||||||||
Reinsurance ceded | -18,072 | -18,739 | -24,506 | ||||||||
Net premiums | 273,181 | 271,984 | 219,547 | ||||||||
Direct business | 228,652 | 215,713 | 203,587 | ||||||||
Reinsurance assumed | 58,414 | 52,494 | 60,393 | ||||||||
Reinsurance ceded | -18,547 | -19,485 | -25,118 | ||||||||
Net premiums | $66,930 | $68,028 | $66,017 | $67,544 | $69,586 | $64,469 | $58,671 | $55,996 | $268,519 | $248,722 | $238,862 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax [Line Items] | |||
Effective income tax rate | 11.70% | 1.60% | -20.30% |
Deferred tax assets, valuation allowance | $0 | $0 | |
Alternative minimum tax credit carry forward | 10,473,000 | 9,947,000 | |
Net operating loss carryforwards | 0 | 1,200,000 | |
Unrecognized tax benefits | 0 | 0 | |
Interest and penalties for uncertain tax positions | 0 | 0 | 0 |
Liabilities for tax-related interest and penalties | 0 | ||
Global Indemnity Group Inc | |||
Income Tax [Line Items] | |||
Withholding tax paid in connection with the dividend payment | 6,300,000 | ||
Dividends paid | $125,000,000 | ||
Withholding Tax | 5.00% | ||
UNITED STATES | |||
Income Tax [Line Items] | |||
Statutory income tax rates | 35.00% | ||
BERMUDA | |||
Income Tax [Line Items] | |||
Statutory income tax rates | 0.00% | ||
CAYMAN ISLANDS | |||
Income Tax [Line Items] | |||
Statutory income tax rates | 0.00% | ||
GIBRALTAR | |||
Income Tax [Line Items] | |||
Statutory income tax rates | 0.00% | ||
LUXEMBOURG | |||
Income Tax [Line Items] | |||
Statutory income tax rates | 29.22% | ||
IRELAND | Non Trading Income | |||
Income Tax [Line Items] | |||
Statutory income tax rates | 25.00% | ||
IRELAND | Capital Gain | |||
Income Tax [Line Items] | |||
Statutory income tax rates | 33.00% | ||
IRELAND | Trading Income | |||
Income Tax [Line Items] | |||
Statutory income tax rates | 12.50% |
Income_Before_Income_Taxes_fro
Income Before Income Taxes from its Non-U.S. Subsidiaries and U.S. Subsidiaries (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues: | |||||||||||
Gross premiums written | $291,253 | $290,723 | $244,053 | ||||||||
Net premiums written | 273,181 | 271,984 | 219,547 | ||||||||
Net premiums earned | 66,930 | 68,028 | 66,017 | 67,544 | 69,586 | 64,469 | 58,671 | 55,996 | 268,519 | 248,722 | 238,862 |
Net investment income | 6,333 | 6,527 | 7,677 | 8,284 | 8,924 | 8,486 | 9,765 | 10,034 | 28,821 | 37,209 | 47,557 |
Net realized investment gains | -4,366 | 1,158 | 39,881 | -813 | 17,208 | 1,641 | 2,806 | 5,757 | 35,860 | 27,412 | 6,755 |
Other income (loss) | 555 | 5,791 | -158 | ||||||||
Total revenues | 333,755 | 319,134 | 293,016 | ||||||||
Losses and Expenses: | |||||||||||
Net losses and loss adjustment expenses | 24,065 | 36,654 | 38,270 | 38,572 | 30,796 | 35,483 | 34,924 | 31,788 | 137,561 | 132,991 | 153,628 |
Acquisition costs and other underwriting expenses | 28,505 | 27,458 | 27,171 | 26,485 | 28,674 | 28,028 | 24,472 | 24,477 | 109,619 | 105,651 | 95,403 |
Corporate and other operating expenses | 14,559 | 11,614 | 9,691 | ||||||||
Interest expense | 822 | 6,169 | 5,393 | ||||||||
Income (loss) before income taxes | 11,294 | 8,128 | 44,798 | 6,974 | 37,155 | 5,056 | 8,440 | 12,058 | 71,194 | 62,709 | 28,901 |
Non-U.S. Subsidiaries | |||||||||||
Revenues: | |||||||||||
Gross premiums written | 173,563 | 169,618 | 135,176 | ||||||||
Net premiums written | 172,504 | 169,547 | 134,628 | ||||||||
Net premiums earned | 168,743 | 154,987 | 153,283 | ||||||||
Net investment income | 31,420 | 35,750 | 42,012 | ||||||||
Net realized investment gains | 926 | 175 | 995 | ||||||||
Other income (loss) | -65 | -4 | -726 | ||||||||
Total revenues | 201,024 | 190,908 | 195,564 | ||||||||
Losses and Expenses: | |||||||||||
Net losses and loss adjustment expenses | 62,669 | 65,337 | 93,044 | ||||||||
Acquisition costs and other underwriting expenses | 70,479 | 64,822 | 59,046 | ||||||||
Corporate and other operating expenses | 5,243 | 4,745 | 4,753 | ||||||||
Interest expense | 852 | 1,165 | |||||||||
Income (loss) before income taxes | 61,781 | 54,839 | 38,721 | ||||||||
U.S. Subsidiaries | |||||||||||
Revenues: | |||||||||||
Gross premiums written | 229,979 | 232,374 | 201,791 | ||||||||
Net premiums written | 100,677 | 102,437 | 84,919 | ||||||||
Net premiums earned | 99,776 | 93,735 | 85,579 | ||||||||
Net investment income | 16,715 | 21,064 | 23,985 | ||||||||
Net realized investment gains | 34,934 | 27,237 | 5,760 | ||||||||
Other income (loss) | 620 | 5,795 | 568 | ||||||||
Total revenues | 152,045 | 147,831 | 115,892 | ||||||||
Losses and Expenses: | |||||||||||
Net losses and loss adjustment expenses | 74,892 | 67,654 | 60,584 | ||||||||
Acquisition costs and other underwriting expenses | 39,140 | 40,829 | 36,357 | ||||||||
Corporate and other operating expenses | 9,316 | 6,869 | 4,938 | ||||||||
Interest expense | 19,284 | 24,609 | 23,833 | ||||||||
Income (loss) before income taxes | 9,413 | 7,870 | -9,820 | ||||||||
Eliminations | |||||||||||
Revenues: | |||||||||||
Gross premiums written | -112,289 | -111,269 | -92,914 | ||||||||
Net investment income | -19,314 | -19,605 | -18,440 | ||||||||
Total revenues | -19,314 | -19,605 | -18,440 | ||||||||
Losses and Expenses: | |||||||||||
Interest expense | ($19,314) | ($19,605) | ($18,440) |
Components_of_Income_Tax_Expen
Components of Income Tax Expense (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Current income tax expense (benefit): | |||
Non-resident withholding | $6,250 | ||
Foreign | 129 | 163 | -628 |
U.S. Federal | 2,787 | 859 | -3,765 |
Total current income tax expense benefit | 9,166 | 1,022 | -4,393 |
Deferred income tax benefit: | |||
U.S. Federal | -828 | -3 | -1,463 |
Total deferred income tax benefit | -828 | -3 | -1,463 |
Actual taxes on continuing operations | $8,338 | $1,019 | ($5,856) |
Differences_in_Tax_and_Estimat
Differences in Tax and Estimated Tax Provisions at Weighted Average Tax Rate (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax [Line Items] | |||
Expected tax provision at weighted average, Amount | $3,465 | $2,954 | ($3,283) |
Adjustments: | |||
Non-resident withholding | 6,250 | ||
Tax exempt interest, Amount | -472 | -1,009 | -1,445 |
Dividend exclusion, Amount | -1,340 | -1,135 | -1,060 |
Other, Amount | 435 | 209 | -68 |
Actual taxes on continuing operations | $8,338 | $1,019 | ($5,856) |
Expected tax provision at weighted average, % of Pre-Tax Income | 4.90% | 4.70% | -11.40% |
Adjustments: | |||
Non-resident withholding | 8.80% | ||
Tax exempt interest, % of Pre-Tax Income | -0.70% | -1.60% | -5.00% |
Dividend exclusion, % of Pre-Tax Income | -1.90% | -1.80% | -3.70% |
Other, % of Pre-Tax Income | 0.60% | 0.30% | -0.20% |
Actual taxes on continuing operations, % of Pre-Tax Income | 11.70% | 1.60% | -20.30% |
Tax_Effects_of_Temporary_Diffe
Tax Effects of Temporary Differences That Give Rise to Significant Portions of Net Deferred Tax Assets (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred tax assets: | ||
Discounted unpaid losses and loss adjustment expenses | $7,492 | $9,459 |
Unearned premiums | 3,409 | 3,346 |
Alternative minimum tax credit carryover | 10,473 | 9,947 |
Partnership K1 basis differences | 145 | 178 |
Capital gain on derivative instruments | 4,786 | |
Investment impairments | 379 | 852 |
Stock options | 2,048 | 1,526 |
Deferred acquisition costs | 187 | 789 |
Stat-to-GAAP reinsurance reserve | 1,424 | 1,359 |
Intercompany transfers | 1,919 | 4,605 |
Other | 3,050 | 2,563 |
Total deferred tax assets | 35,312 | 34,624 |
Deferred tax liabilities: | ||
Intangible assets | 3,220 | 3,220 |
Unrealized gain on securities available-for-sale and investments in limited partnerships included in accumulated other comprehensive income | 10,263 | 25,480 |
Investment basis differences | 692 | 400 |
Depreciation and amortization | 16 | 355 |
Other | 871 | 963 |
Total deferred tax liabilities | 15,062 | 30,418 |
Total net deferred tax assets | $20,250 | $4,206 |
Summarized_Activity_in_Liabili
Summarized Activity in Liability for Unpaid Losses and Loss Adjustment Expenses (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Balance at beginning of period | $779,466 | $879,114 | $971,377 |
Ceded reinsurance receivables | 192,491 | 240,566 | 283,652 |
Net balance at beginning of period | 586,975 | 638,548 | 687,725 |
Incurred losses and loss adjustment expenses related to: | |||
Current year | 153,994 | 140,873 | 149,183 |
Prior years | -16,433 | -7,882 | 4,445 |
Total incurred losses and loss adjustment expenses | 137,561 | 132,991 | 153,628 |
Paid losses and loss adjustment expenses related to: | |||
Current year | 55,485 | 50,732 | 52,164 |
Prior years | 116,780 | 133,832 | 150,641 |
Total paid losses and loss adjustment expenses | 172,265 | 184,564 | 202,805 |
Net balance at end of period | 552,271 | 586,975 | 638,548 |
Ceded reinsurance receivables | 123,201 | 192,491 | 240,566 |
Balance at end of period | $675,472 | $779,466 | $879,114 |
Liability_for_Unpaid_Losses_an2
Liability for Unpaid Losses and Loss Adjustment Expenses - Additional Information (Detail) (USD $) | 12 Months Ended | ||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2009 | Dec. 31, 2011 | |
Claim | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | ($16,433,000) | ($7,882,000) | $4,445,000 | ||
Unpaid losses and loss adjustment expense reserves | 552,271,000 | 586,975,000 | 638,548,000 | 687,725,000 | |
Unpaid losses and loss adjustment expenses reserves | 31,185,000 | 23,038,000 | 20,134,000 | 25,285,000 | |
Survival ratio on a gross basis for open A&E claims, periods | 10 years 9 months 18 days | 11 years 3 months 18 days | 11 years 3 months 18 days | ||
Survival ratio on net basis for open A&E claims, periods | 8 years 4 months 24 days | 6 years 8 months 12 days | 7 years | ||
Asbestos Issue | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Number of asbestos related bodily injury claims and future claims | 3,900 | ||||
Construction Defect | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Unpaid losses and loss adjustment expense reserves | 69,800,000 | 70,500,000 | |||
IBNR Reserves | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Unpaid losses and loss adjustment expenses reserves | 26,400,000 | 18,200,000 | 14,600,000 | ||
Case Reserves | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Unpaid losses and loss adjustment expenses reserves | 4,800,000 | 4,800,000 | 5,500,000 | ||
Insurance Operations | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | -12,500,000 | -7,600,000 | -4,200,000 | ||
Insurance Operations | Asbestos and Environmental | Accident Years Prior to 1990 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | 7,100,000 | 6,800,000 | |||
Insurance Operations | Property Lines | Accident Years 2010, 2011, and 2012 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | -9,200,000 | ||||
Insurance Operations | Property Lines | Accident Year 2011 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | 1,200,000 | ||||
Insurance Operations | Property Lines | Accident Years 2007, 2012 and 2013 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | 2,100,000 | ||||
Insurance Operations | General Liability | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | -6,300,000 | ||||
Insurance Operations | General Liability | Allowance for Reinsurance Recoverable | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | -700,000 | ||||
Insurance Operations | General Liability | Small Business Binding | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | -4,700,000 | ||||
Insurance Operations | General Liability | Accident Years between 2003 through 2011 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | -6,700,000 | ||||
Insurance Operations | General Liability | Accident Years 2002 through 2005 | Casualty Brokerage Exposures | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | -3,300,000 | ||||
Insurance Operations | General Liability | Accident Years 2007 | Construction Defect | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | 2,000,000 | ||||
Insurance Operations | General Liability | Accident Years 2001, 2007 through 2010, and 2013 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | -3,100,000 | ||||
Insurance Operations | Professional | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | 700,000 | ||||
Insurance Operations | Professional | Accident Years 2006 to 2008 and 2010 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | 2,200,000 | ||||
Insurance Operations | Professional | Accident Years 1998 and 2011 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | -1,500,000 | ||||
Insurance Operations | Professional | Accident Years 2007 through 2011 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | -19,400,000 | ||||
Insurance Operations | Umbrella Lines | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | -700,000 | ||||
Insurance Operations | Umbrella Lines | Accident Years 2002 to 2010 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | -1,100,000 | ||||
Insurance Operations | Umbrella Lines | Accident Years 2002 through 2007 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | -2,700,000 | ||||
Insurance Operations | Commercial Auto Segment | Casualty Brokerage Exposures | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | 1,200,000 | ||||
Insurance Operations | Commercial Auto Segment | Accident Year 2011 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | 900,000 | ||||
Insurance Operations | Commercial Auto Segment | Accident Years 2011 Through 2013 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | 3,600,000 | ||||
Insurance Operations | Marine | Accident Years 2011 and 2012 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | 900,000 | ||||
Reinsurance Operations | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | -3,900,000 | -300,000 | 8,700,000 | ||
Reinsurance Operations | Property Lines | Accident Years 2009 and 2011 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | -3,400,000 | ||||
Reinsurance Operations | Commercial Auto Segment | Accident Year 2009 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | 1,300,000 | ||||
Reinsurance Operations | Marine | Accident Year 2011 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | 2,700,000 | ||||
Reinsurance Operations | Workers' Compensation | Accident Years 2009 and 2010 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | 8,300,000 | ||||
Additional premium | $6,000,000 |
Gross_Reserves_for_Asbestos_an
Gross Reserves for Asbestos and Environmental Losses (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statutory Reserve [Line Items] | |||
Gross reserve for A&E losses and loss adjustment expenses-beginning of period | $50,155 | $44,767 | $50,601 |
Less: Payments | 5,293 | 2,727 | 7,661 |
Gross reserves for A&E losses and loss adjustment expenses-end of period | 56,535 | 50,155 | 44,767 |
Case Reserves | |||
Statutory Reserve [Line Items] | |||
Plus: Incurred losses and loss adjustment expenses | 4,333 | 2,154 | 7,687 |
IBNR Reserves | |||
Statutory Reserve [Line Items] | |||
Plus: Incurred losses and loss adjustment expenses | $7,340 | $5,961 | ($5,860) |
Net_Reserves_for_Asbestos_and_
Net Reserves for Asbestos and Environmental Losses (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statutory Reserve [Line Items] | |||
Net reserve for A&E losses and loss adjustment expenses-beginning of period | $23,038 | $20,134 | $25,285 |
Less: Payments | 2,848 | 1,953 | 6,402 |
Net reserves for A&E losses and loss adjustment expenses-end of period | 31,185 | 23,038 | 20,134 |
Case Reserves | |||
Statutory Reserve [Line Items] | |||
Net reserve for A&E losses and loss adjustment expenses-beginning of period | 4,800 | 5,500 | |
Plus: Incurred losses and loss adjustment expenses | 2,754 | 1,351 | 6,934 |
Net reserves for A&E losses and loss adjustment expenses-end of period | 4,800 | 4,800 | 5,500 |
IBNR Reserves | |||
Statutory Reserve [Line Items] | |||
Net reserve for A&E losses and loss adjustment expenses-beginning of period | 18,200 | 14,600 | |
Plus: Incurred losses and loss adjustment expenses | 8,241 | 3,506 | -5,683 |
Net reserves for A&E losses and loss adjustment expenses-end of period | $26,400 | $18,200 | $14,600 |
Debt_Additional_Information_De
Debt - Additional Information (Detail) (USD $) | 12 Months Ended | 0 Months Ended | |||
Dec. 31, 2013 | Jul. 19, 2013 | Sep. 30, 2013 | Oct. 29, 2013 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | |||||
Outstanding amount of margin borrowing facilities | $100,000,000 | $174,673,000 | |||
Early repayment on junior subordinated notes | 30,929,000 | ||||
6.22% interest rate, guaranteed senior notes, due July 20, 2013 to 2015 | |||||
Debt Instrument [Line Items] | |||||
Outstanding amount of margin borrowing facilities | 60,000,000 | ||||
Early repayment on guaranteed senior notes | 58,600,000 | ||||
Principal amount on guaranteed senior notes | 54,000,000 | ||||
Interest paid on debt | 4,600,000 | ||||
Make-whole provision on guaranteed senior notes | 2,900,000 | ||||
Three-month LIBOR plus 4.05% junior subordinated debentures due September 2033 | |||||
Debt Instrument [Line Items] | |||||
Outstanding amount of margin borrowing facilities | 10,000,000 | ||||
Principal amount on guaranteed senior notes | 10,300,000 | ||||
Interest paid on debt | 100,000 | ||||
Early repayment on junior subordinated notes | 10,400,000 | ||||
Three-month LIBOR plus 3.85% junior subordinated debentures due October 2033 | |||||
Debt Instrument [Line Items] | |||||
Outstanding amount of margin borrowing facilities | 20,200,000 | ||||
Principal amount on guaranteed senior notes | 20,600,000 | ||||
Interest paid on debt | 200,000 | ||||
Early repayment on junior subordinated notes | 20,800,000 | ||||
Margin borrowing facilities | |||||
Debt Instrument [Line Items] | |||||
Collateral deposited to support borrowing | $222,800,000 | ||||
Stated interest rate | 1.00% |
Shareholders_Equity_Additional
Shareholders' Equity - Additional Information (Detail) (USD $) | 0 Months Ended | 12 Months Ended | ||||
Jun. 14, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | 9-May-12 | |
Shareholders Equity [Line Items] | ||||||
Stock repurchase program, number of shares purchased | 5,444 | 2,370 | 4,997 | |||
Stock repurchase program, value of shares purchased | $100,000 | $100,000 | $100,000 | |||
Stock repurchase program, maximum authorized amount | 125,000,000 | 125,000,000 | ||||
Stock repurchase program, price per share of shares purchased | $25.46 | $23.29 | ||||
Stock repurchased and retired, shares | 5,444 | 2,370 | ||||
Percentage of outstanding ordinary shares offered | 2.00% | |||||
Ordinary Shares A | ||||||
Shareholders Equity [Line Items] | ||||||
Stock repurchased and retired, shares | 5,371,419 | |||||
Global Indemnity Group Inc | ||||||
Shareholders Equity [Line Items] | ||||||
Distributable reserves | 931,500,000 | |||||
Treasury Shares | Ordinary Shares A | ||||||
Shareholders Equity [Line Items] | ||||||
Stock repurchase program, number of shares purchased | 5,444 | 2,370 | 3,809,415 | |||
Stock repurchase program, value of shares purchased | 139,000 | 55,000 | 82,961,000 | |||
Stock repurchased and retired, shares | 5,371,419 | |||||
Stock repurchase program, value of shares purchased | 112,195,000 | |||||
Stock repurchase program, price per share of shares purchased | $20.89 | |||||
Tender Offer | ||||||
Shareholders Equity [Line Items] | ||||||
Stock repurchase program, value of shares purchased | 63,400,000 | |||||
Stock repurchase program, maximum authorized amount | $61,000,000 | |||||
Stock repurchase program, price per share of shares purchased | 21.75 | |||||
Stock repurchased and retired, shares | 2,913,464 | |||||
Tender Offer | Elected To Increase Tender Offer By UP To Two Percent | ||||||
Shareholders Equity [Line Items] | ||||||
Stock repurchased and retired, shares | 122,578 |
Information_with_Respect_to_Or
Information with Respect to Ordinary Shares that were Surrendered or Repurchased (Detail) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | |||
Equity, Class of Treasury Stock [Line Items] | ||||
Total Number of Shares Purchased | 5,444 | 2,370 | ||
Average Price Paid Per Share | $25.46 | $23.29 | ||
Total Number of Shares Purchased as Part of Publicly Announced Plan or Program | 0 | 0 | ||
January 1-31, 2014 | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Total Number of Shares Purchased | 3,644 | [1],[2] | ||
Average Price Paid Per Share | $25.30 | [1] | ||
Total Number of Shares Purchased as Part of Publicly Announced Plan or Program | 0 | |||
February 1-28, 2014 | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Total Number of Shares Purchased | 362 | [1],[2] | ||
Average Price Paid Per Share | $24 | [1] | ||
Total Number of Shares Purchased as Part of Publicly Announced Plan or Program | 0 | |||
March 1-31, 2014 | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Total Number of Shares Purchased | 1,438 | [1],[2] | ||
Average Price Paid Per Share | $26.23 | [1] | ||
Total Number of Shares Purchased as Part of Publicly Announced Plan or Program | 0 | |||
February 1-28, 2013 | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Total Number of Shares Purchased | 362 | [1],[2] | ||
Average Price Paid Per Share | $20.25 | [1] | ||
Total Number of Shares Purchased as Part of Publicly Announced Plan or Program | 0 | [1] | ||
March 1-31, 2013 | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Total Number of Shares Purchased | 891 | [1],[2] | ||
Average Price Paid Per Share | $22.78 | [1] | ||
Total Number of Shares Purchased as Part of Publicly Announced Plan or Program | 0 | [1] | ||
June 1-30, 2013 | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Total Number of Shares Purchased | 507 | [1],[2] | ||
Average Price Paid Per Share | $23.03 | [1] | ||
Total Number of Shares Purchased as Part of Publicly Announced Plan or Program | 0 | [1] | ||
December 1-31, 2013 | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Total Number of Shares Purchased | 610 | [1],[2] | ||
Average Price Paid Per Share | $26.07 | [1] | ||
Total Number of Shares Purchased as Part of Publicly Announced Plan or Program | 0 | [1] | ||
[1] | Based on settlement date. | |||
[2] | Surrendered by employees as payment of taxes withheld on the vesting of restricted stock. |
Related_Party_Transactions_Add
Related Party Transactions - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Related Party Transaction [Line Items] | |||
LP distribution recognized as investment income | $32,420,000 | $41,388,000 | $52,014,000 |
Fox Paine & Company, LLC | |||
Related Party Transaction [Line Items] | |||
Company's total outstanding voting power | 92.90% | ||
Minimum voting power required to nominate Directors | 25.00% | ||
Management fees | 1,900,000 | 1,900,000 | 1,500,000 |
Unpaid management fees | 600,000 | ||
Prepaid management fee | 1,300,000 | ||
Fox Paine Capital Fund II Limited Partner | Global Indemnity Reinsurance | |||
Related Party Transaction [Line Items] | |||
Company's investment in limited partnership | 3,400,000 | 3,500,000 | |
Unfunded capital commitment | 2,400,000 | ||
Distribution received from the limited partnership | 0 | 0 | 5,400,000 |
LP distribution recognized as investment income | 4,300,000 | ||
Cozen O'Connor | |||
Related Party Transaction [Line Items] | |||
Cost incurred for legal services rendered | 200,000 | 20,000 | 200,000 |
Crystal & Company | |||
Related Party Transaction [Line Items] | |||
Brokerage fee incurred | $200,000 | $200,000 | $200,000 |
Estimated_Earned_Premium_and_I
Estimated Earned Premium and Incurred Losses (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Related Party Transaction [Line Items] | |||
Assumed earned premium | $58,414 | $52,494 | $60,393 |
Hiscox Bermuda | |||
Related Party Transaction [Line Items] | |||
Assumed earned premium | 6,383 | 3,053 | |
Assumed losses and loss adjustment expenses | $763 | $987 |
Net_Balances_due_to_Global_Ind
Net Balances due to Global Indemnity Reinsurance (Detail) (Hiscox Bermuda, USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Hiscox Bermuda | ||
Related Party Transaction [Line Items] | ||
Net receivable balance | $2,897 | $3,337 |
Recovered_Sheet1
Commitments And Contingencies - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Commitments and Contingencies [Line Items] | |||
Commitment to purchase alternative investment | $50,000,000 | ||
Funded commitment amount | 29,900,000 | ||
Future Funding Commitments | 22,500,000 | 2,490,000 | |
Rental expense under operating leases, net of sub-lease income | 2,600,000 | 2,400,000 | 2,200,000 |
Unfunded Commitments | European Non-Performing Loan Fund, LP | |||
Commitments and Contingencies [Line Items] | |||
Future Funding Commitments | 20,100,000 | ||
Unfunded Commitments | Equity Fund, LP | |||
Commitments and Contingencies [Line Items] | |||
Future Funding Commitments | $2,400,000 |
Future_Minimum_Cash_Payments_U
Future Minimum Cash Payments Under Non-cancelable Operating Leases (Detail) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Future Minimum Payments Under Non-Cancelable Operating Leases With Initial Terms Of One-Year Or More [Line Items] | |
2015 | $2,374 |
2016 | 2,279 |
2017 | 2,234 |
2018 | 2,237 |
2019 and thereafter | 2,236 |
Total | $11,360 |
ShareBased_Compensation_Plans_1
Share-Based Compensation Plans - Additional Information (Detail) (USD $) | 12 Months Ended | 100 Months Ended | 136 Months Ended | 12 Months Ended | 0 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2014 | Dec. 31, 2011 | Jun. 12, 2014 | Jun. 11, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Tax expense resulting from stock-based compensation deductions in excess of amounts reported for financial reporting purposes | $37,000 | |||||||
Stock options granted | 325,000 | |||||||
Stock options forfeited | 125,000 | 5,000 | 96,238 | |||||
Compensation expense, options | 300,000 | 1,200,000 | 1,200,000 | |||||
Weighted average fair value of options granted | $7.92 | |||||||
Compensation expense, restricted stock | 2,600,000 | 2,100,000 | 1,800,000 | |||||
Strike price per share | $31.74 | |||||||
Exercise price applicable | $25.38 | $18.62 | $19.87 | 20.59 | $25.38 | 20.59 | ||
Restricted Stock | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Unrecognized compensation expense for non-vested restricted stock | 3,700,000 | 3,700,000 | ||||||
Weighted average life of non-vested restricted stock | 1 year 8 months 12 days | |||||||
Number of shares issued | 132,302 | 132,008 | 80,560 | 903,780 | 1,248,650 | |||
Weighted average fair value per share | $25.67 | $22.78 | $19.67 | |||||
Restricted Stock | Key Employees | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares issued | 95,694 | 81,587 | 29,675 | 599,806 | 806,762 | |||
Weighted average fair value per share | $25.37 | $22.13 | $18.60 | |||||
Percentage of shares vested on each anniversary of the grant date | 33.33% | |||||||
Vesting period | 3 years | |||||||
Restricted Stock | Key Employees | Vesting Schedule Two | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Percentage of shares vested on each anniversary of the grant date | 100.00% | 100.00% | ||||||
Vesting period | 3 years | 3 years | ||||||
Percentage of stock award subject to vesting | 50.00% | 50.00% | ||||||
Restricted Stock | Key Employees | Time Based Vesting | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares issued | 78,166 | 70,291 | ||||||
Restricted Stock | Key Employees | Stock vest first anniversary of the grant | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Percentage of shares vested on each anniversary of the grant date | 16.50% | 16.50% | ||||||
Vesting period | 1 year | 1 year | ||||||
Restricted Stock | Key Employees | Stock vest second anniversary of the grant | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Percentage of shares vested on each anniversary of the grant date | 16.50% | 16.50% | ||||||
Vesting period | 2 years | 2 years | ||||||
Restricted Stock | Key Employees | Stock vest third anniversary of the grant | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Percentage of shares vested on each anniversary of the grant date | 17.00% | 17.00% | ||||||
Vesting period | 3 years | 3 years | ||||||
Restricted Stock | Current Chief Executive Officer | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares issued | 11,296 | |||||||
Percentage of shares vested on each anniversary of the grant date | 33.33% | 33.33% | ||||||
Vesting period | 3 years | |||||||
Percentage of annual bonus eligible to be paid in shares | 50.00% | |||||||
Restricted Stock | Directors | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares issued | 36,608 | 50,421 | 50,885 | 303,974 | 441,888 | |||
Weighted average fair value per share | $23.83 | $20.29 | ||||||
Restricted Stock | Non Employee Director | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares issued | 36,608 | |||||||
Weighted average fair value per share | $26.46 | |||||||
Number of shares earned not granted until shareholders' approval of share incentive plan on June 11, 2014 | 18,838 | |||||||
Weighted average grant date value of shares earned not granted | $25.38 | |||||||
Restricted Stock | Non Employee Director | Revised Compensation Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares issued | 18,838 | |||||||
Restricted Stock | Key Employee | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares issued | 5,671 | |||||||
Percentage of shares vested on each anniversary of the grant date | 33.33% | |||||||
Vesting period | 3 years | |||||||
Restricted Stock | Chief Executive Officer | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares issued | 11,857 | |||||||
Percentage of shares vested on each anniversary of the grant date | 33.33% | |||||||
Vesting period | 3 years | |||||||
Time Based Option Award | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock options granted | 325,000 | 0 | 0 | |||||
Stock options forfeited | 125,000 | 5,000 | 96,238 | |||||
Time Based Option Award | Current Chief Executive Officer | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock options granted | 300,000 | |||||||
Stock options forfeited | 25,000 | |||||||
Stock options granted (net) | 300,000 | |||||||
Percentage of shares vested on each anniversary of the grant date | 33.33% | |||||||
Strike price per share | 17.87 | |||||||
Stock Options | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Amortization expense related to options in 2015 | 300,000 | |||||||
Amortization expense related to options in 2016 | 300,000 | |||||||
Amortization expense related to options in 2017 | 300,000 | |||||||
Stock Options | Current Chief Executive Officer | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock options granted | 300,000 | |||||||
Exercise price applicable | $25 | $25 | ||||||
Stock Options | Current Chief Executive Officer | December 31, 2015 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Percentage of shares vested on each anniversary of the grant date | 20.00% | |||||||
Stock Options | Current Chief Executive Officer | December 31, 2016 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Percentage of shares vested on each anniversary of the grant date | 30.00% | |||||||
Stock Options | Current Chief Executive Officer | December 31, 2017 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Percentage of shares vested on each anniversary of the grant date | 50.00% | |||||||
Ordinary Shares A | Share Incentive Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares available for grant | 2,000,000 | |||||||
Ordinary Shares A | A Former Employee | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Proceed from exercise of options | $0 | $300,000 | $100,000 | |||||
Number of shares issued | 14,292 | 5,000 | ||||||
Weighted average fair value of options granted | $20 | $20 |
Summary_of_Award_Activity_for_
Summary of Award Activity for Stock Options Granted and Weighted Average Exercise Price Per Share (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Options | |||
Options outstanding, beginning balance | 412,500 | 464,743 | 565,981 |
Options issued | 325,000 | ||
Options forfeited | -125,000 | -5,000 | -96,238 |
Options exercised | 0 | -14,292 | -5,000 |
Options retired | -32,951 | ||
Options purchased by the Company | 0 | 0 | 0 |
Options outstanding, ending balance | 612,500 | 412,500 | 464,743 |
Options exercisable at December 31, 2014 | 312,500 | ||
Weighted Average Exercise Price Per Share | |||
Weighted average exercise price per share, beginning balance | $18.62 | $19.87 | $20.59 |
Options issued | $31.74 | ||
Options forfeited | $19.60 | $29.24 | $24.09 |
Options exercised | $0 | $20 | $20 |
Options expired | $34 | ||
Options purchased by the Company | $0 | $0 | $0 |
Weighted average exercise price per share, ending balance | $25.38 | $18.62 | $19.87 |
Options exercisable at December 31, 2014 | $18.66 | ||
Time Based Option Award | |||
Options | |||
Options outstanding, beginning balance | 412,500 | 464,743 | 565,981 |
Options issued | 325,000 | 0 | 0 |
Options forfeited | -125,000 | -5,000 | -96,238 |
Options exercised | -14,292 | -5,000 | |
Options retired | -32,951 | ||
Options purchased by the Company | 0 | 0 | 0 |
Options outstanding, ending balance | 612,500 | 412,500 | 464,743 |
Options exercisable at December 31, 2014 | 312,500 | ||
Performance Based Stock Options | |||
Options | |||
Options purchased by the Company | 0 | 0 | 0 |
Option_Intrinsic_Values_Detail
Option Intrinsic Values (Detail) (USD $) | 12 Months Ended | |||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Outstanding | 612,500 | 412,500 | 464,743 | 565,981 |
Exercisable | 312,500 | |||
Exercised | 0 | 14,292 | 5,000 | |
Outstanding | $25.38 | $18.62 | $19.87 | $20.59 |
Exercisable | $18.66 | |||
Exercised | $0 | $20 | $20 | |
Outstanding | $3.20 | |||
Exercisable | 3.2 | |||
Exercised | $0 |
Options_Exercisable_Detail
Options Exercisable (Detail) (USD $) | Dec. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Option Price | $18.66 |
Number of options exercisable | 312,500 |
Exercise Price 1 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Option Price | $17.87 |
Number of options exercisable | 300,000 |
Exercise Price 2 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Option Price | $37.70 |
Number of options exercisable | 12,500 |
Significant_Assumptions_Used_T
Significant Assumptions Used To Estimate Fair Value of Stock Options Granted Using Black Scholes Option Pricing Model (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Dividend yield | 0.00% |
Expected volatility | 37.70% |
Risk-free interest rate | 1.70% |
Expected option life | 6 years 10 months 24 days |
Summary_of_Range_of_Exercise_P
Summary of Range of Exercise Prices of Options Outstanding (Detail) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Options outstanding | 612,500 | 412,500 | 464,743 | |
Exercise Price Range One | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Ranges of Exercise Prices, minimum | $17.87 | $17.87 | $17.87 | |
Ranges of Exercise Prices, maximum | $19.99 | $19.99 | $19.99 | |
Options outstanding | 300,000 | 400,000 | 400,000 | |
Weighted Average Per Share Exercise Price | $17.87 | $18.03 | $18.03 | |
Weighted Average Remaining Life | 6 years 8 months 12 days | 7 years 9 months 18 days | 8 years 9 months 18 days | |
Exercise Price Range Two | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Ranges of Exercise Prices, minimum | $20 | $20 | ||
Ranges of Exercise Prices, maximum | $29.99 | $29.99 | ||
Options outstanding | 19,293 | |||
Weighted Average Per Share Exercise Price | $22.39 | |||
Weighted Average Remaining Life | 10 months 24 days | |||
Exercise Price Range Three | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Ranges of Exercise Prices, minimum | $30 | $30 | $30 | |
Ranges of Exercise Prices, maximum | $37.70 | $37.70 | $37.70 | |
Options outstanding | 312,500 | [1] | 12,500 | 45,450 |
Weighted Average Per Share Exercise Price | $32.59 | $37.70 | $35.02 | |
Weighted Average Remaining Life | 8 years 9 months 18 days | 1 year 9 months 18 days | 1 year 6 months | |
[1] | the weighted average per share exercise price on 300,000 of these shares outstanding is variable. See note below under Chief Executive Officer for additional information. |
Summary_of_Range_of_Exercise_P1
Summary of Range of Exercise Prices of Options Outstanding (Parenthetical) (Detail) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options outstanding | 612,500 | 412,500 | 464,743 |
Current Chief Executive Officer | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options outstanding | 300,000 |
Summary_of_Restricted_Stock_Gr
Summary of Restricted Stock Grants Since Inception (Detail) (Restricted Stock) | 12 Months Ended | 100 Months Ended | 136 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Restricted Stock Awards | 132,302 | 132,008 | 80,560 | 903,780 | 1,248,650 |
Key Employees | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Restricted Stock Awards | 95,694 | 81,587 | 29,675 | 599,806 | 806,762 |
Directors | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Restricted Stock Awards | 36,608 | 50,421 | 50,885 | 303,974 | 441,888 |
Summary_of_NonVested_Restricte
Summary of Non-Vested Restricted Shares Activity (Detail) (Restricted Stock, USD $) | 12 Months Ended | 100 Months Ended | 136 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2014 | |
Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Non-vested restricted shares, beginning balance | 98,121 | 34,504 | 26,016 | ||
Shares issued | 132,302 | 132,008 | 80,560 | 903,780 | 1,248,650 |
Shares vested | -57,017 | -67,937 | -68,649 | ||
Shares forfeited | -1,131 | -454 | -3,423 | ||
Non-vested restricted shares, ending balance | 172,275 | 98,121 | 34,504 | 26,016 | 172,275 |
Weighted Average Price Per Share | |||||
Weighted average price per share, beginning balance | $21.48 | $17.87 | $18.29 | ||
Shares issued | $25.67 | $22.78 | $19.67 | ||
Shares vested | $24.29 | $22.17 | $19.99 | ||
Shares forfeited | $22.13 | $22.13 | $20.87 | ||
Weighted average price per share, ending balance | $23.76 | $21.48 | $17.87 | $18.29 | $23.76 |
401k_Plan_Additional_Informati
401(k) Plan - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Defined Benefit Plan Disclosure [Line Items] | |||
Employer's matching contribution percentage on first 6% contributed by employee to a defined contribution plan | 100.00% | ||
Maximum percentage of employee's earnings that the company may contribute to the defined contribution plan | 6.00% | ||
Defined benefit plan expense | $1.20 | $1.20 | $1.10 |
Computation_of_Basic_and_Dilut
Computation of Basic and Diluted Earnings Per Share (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Schedule Of Earnings Per Share Basic And Diluted [Line Items] | |||||||||||
Net income (loss) | $11,064 | $9,761 | $33,208 | $8,823 | $33,713 | $6,948 | $8,664 | $12,365 | $62,856 | $61,690 | $34,757 |
Weighted average shares outstanding-basic | 25,131,811 | 25,072,712 | 26,722,772 | ||||||||
Net income per share | $2.50 | $2.46 | $1.30 | ||||||||
Weighted average shares outstanding-diluted | 25,331,420 | 25,174,015 | 26,748,833 | ||||||||
Net income per share | $0.44 | $0.39 | $1.31 | $0.35 | $1.34 | $0.28 | $0.34 | $0.49 | $2.48 | $2.45 | $1.30 |
Reconciliation_of_Weighted_Ave
Reconciliation of Weighted Average Shares for Basic and Diluted Earnings Per Share (Detail) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Reconciliation Of Basic Weighted Average Shares To Diluted Weighted Average Shares [Line Items] | |||
Weighted average shares for basic earnings per share | 25,131,811 | 25,072,712 | 26,722,772 |
Weighted average shares for diluted earnings per share | 25,331,420 | 25,174,015 | 26,748,833 |
Restricted Stock | |||
Reconciliation Of Basic Weighted Average Shares To Diluted Weighted Average Shares [Line Items] | |||
Non-vested restricted stock and options | 100,546 | 53,876 | 17,474 |
Stock Options | |||
Reconciliation Of Basic Weighted Average Shares To Diluted Weighted Average Shares [Line Items] | |||
Non-vested restricted stock and options | 99,063 | 47,427 | 8,587 |
Earnings_Per_Share_Additional_
Earnings Per Share - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Earnings Per Share [Line Items] | |||
Shares excluded from calculation of diluted earnings per share | 312,500 | 12,500 | 452,450 |
Statutory_Financial_Informatio2
Statutory Financial Information - Additional Information (Detail) (USD $) | 0 Months Ended | 12 Months Ended | |
In Millions, unless otherwise specified | Jan. 23, 2014 | Dec. 31, 2014 | Dec. 31, 2013 |
Statutory Accounting Practices [Line Items] | |||
Aggregate dividend declared under applicable laws by each of U.S. insurance subsidiaries | $200 | ||
Dividends paid under applicable laws and regulations with regulatory approval | 200 | ||
United National Insurance Companies | |||
Statutory Accounting Practices [Line Items] | |||
Maximum amount of dividends payable under applicable laws and regulations without regulatory approval | 35.1 | ||
Penn- America Insurance Companies | |||
Statutory Accounting Practices [Line Items] | |||
Maximum amount of dividends payable under applicable laws and regulations without regulatory approval | 8.4 | ||
Maximum amount of dividends payable under applicable laws and regulations without regulatory approval which would be distributed to wholly owned parent company | 2.8 | ||
Global Indemnity Reinsurance | |||
Statutory Accounting Practices [Line Items] | |||
Maximum amount of dividends payable under applicable laws and regulations without regulatory approval | $287.10 | ||
Maximum reduction in statutory capital allowed without regulatory approval | 15.00% |
Information_for_Companys_Unite
Information for Company's United States Insurance Companies, Net of Intercompany Eliminations as Determined in Accordance With Sap (Detail) (United National Insurance Companies, USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
United National Insurance Companies | ||||
Statutory Accounting Practices [Line Items] | ||||
Statutory capital and surplus, as of end of period | $253,362 | $251,464 | [1] | $413,303 |
Statutory net income (loss) | $36,003 | $31,781 | $10,813 | |
[1] | Includes extraordinary dividend declared in 2013 for an aggregate of $200 million. |
Information_for_Companys_Unite1
Information for Company's United States Insurance Companies, Net of Intercompany Eliminations as Determined in Accordance With Sap (Parenthetical) (Detail) (USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
Statutory Accounting Practices [Line Items] | |
Aggregate extraordinary dividend declared | $200 |
Information_for_United_States_
Information for United States Insurance Companies & Global Indemnity Reinsurance, Net of Intercompany Eliminations, as Determined in Accordance With SAP and Bermuda (Detail) (Global Indemnity Reinsurance, USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Global Indemnity Reinsurance | |||
Statutory Accounting Practices [Line Items] | |||
Statutory capital and surplus, as of end of period | $928,720 | $913,401 | $844,696 |
Statutory net income (loss) | $44,594 | $31,697 | $21,955 |
Segment_Information_Additional
Segment Information - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
Segment | |
Segment Reporting Information [Line Items] | |
Number of business segments | 2 |
Summary_of_Business_Segment_In
Summary of Business Segment Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||||
Revenues: | ||||||||||||||||
Gross premiums written | $291,253 | $290,723 | $244,053 | |||||||||||||
Net premiums written | 273,181 | 271,984 | 219,547 | |||||||||||||
Net premiums earned | 66,930 | 68,028 | 66,017 | 67,544 | 69,586 | 64,469 | 58,671 | 55,996 | 268,519 | 248,722 | 238,862 | |||||
Other income (loss) | 555 | 5,791 | -158 | |||||||||||||
Total revenue | 269,074 | 254,513 | 238,704 | |||||||||||||
Losses and Expenses: | ||||||||||||||||
Net losses and loss adjustment expenses | 24,065 | 36,654 | 38,270 | 38,572 | 30,796 | 35,483 | 34,924 | 31,788 | 137,561 | 132,991 | 153,628 | |||||
Acquisition costs and other underwriting expenses | 28,505 | 27,458 | 27,171 | 26,485 | 28,674 | 28,028 | 24,472 | 24,477 | 109,619 | 105,651 | 95,403 | |||||
Income (loss) from segments | 21,894 | 15,871 | -10,327 | |||||||||||||
Unallocated items: | ||||||||||||||||
Net investment income | 6,333 | 6,527 | 7,677 | 8,284 | 8,924 | 8,486 | 9,765 | 10,034 | 28,821 | 37,209 | 47,557 | |||||
Net realized investment gains | -4,366 | 1,158 | 39,881 | -813 | 17,208 | 1,641 | 2,806 | 5,757 | 35,860 | 27,412 | 6,755 | |||||
Corporate and other operating expenses | 14,559 | 11,614 | 9,691 | |||||||||||||
Interest expense | 822 | 6,169 | 5,393 | |||||||||||||
Income before income taxes | 11,294 | 8,128 | 44,798 | 6,974 | 37,155 | 5,056 | 8,440 | 12,058 | 71,194 | 62,709 | 28,901 | |||||
Income tax benefit (expense) | 8,338 | 1,019 | -5,856 | |||||||||||||
Net income (loss) | 11,064 | 9,761 | 33,208 | 8,823 | 33,713 | 6,948 | 8,664 | 12,365 | 62,856 | 61,690 | 34,757 | |||||
Total assets | 1,930,033 | 1,911,779 | 1,930,033 | 1,911,779 | 1,903,703 | |||||||||||
Insurance Operations | ||||||||||||||||
Revenues: | ||||||||||||||||
Gross premiums written | 229,978 | [1] | 232,373 | [1] | 201,790 | [1] | ||||||||||
Net premiums written | 212,965 | [1] | 213,705 | [1] | 177,832 | [1] | ||||||||||
Net premiums earned | 211,165 | [1] | 196,302 | [1] | 179,153 | [1] | ||||||||||
Other income (loss) | 620 | [1] | 5,795 | [1] | 568 | [1] | ||||||||||
Total revenue | 211,785 | [1] | 202,097 | [1] | 179,721 | [1] | ||||||||||
Losses and Expenses: | ||||||||||||||||
Net losses and loss adjustment expenses | 117,586 | [1] | 116,837 | [1] | 118,515 | [1] | ||||||||||
Acquisition costs and other underwriting expenses | 88,983 | [1],[2] | 87,360 | [1],[3] | 79,910 | [1],[4] | ||||||||||
Income (loss) from segments | 5,216 | [1] | -2,100 | [1] | -18,704 | [1] | ||||||||||
Unallocated items: | ||||||||||||||||
Total assets | 1,288,763 | [1] | 1,264,306 | [1] | 1,288,763 | [1] | 1,264,306 | [1] | 1,259,083 | [1] | ||||||
Reinsurance Operations | ||||||||||||||||
Revenues: | ||||||||||||||||
Gross premiums written | 61,275 | [5] | 58,350 | [5] | 42,263 | [5] | ||||||||||
Net premiums written | 60,216 | [5] | 58,279 | [5] | 41,715 | [5] | ||||||||||
Net premiums earned | 57,354 | [5] | 52,420 | [5] | 59,709 | [5] | ||||||||||
Other income (loss) | -65 | [5] | -726 | [5] | ||||||||||||
Total revenue | 57,289 | [5] | 52,416 | [5] | 58,983 | [5] | ||||||||||
Losses and Expenses: | ||||||||||||||||
Net losses and loss adjustment expenses | 19,975 | [5] | 16,154 | [5] | 35,113 | [5] | ||||||||||
Acquisition costs and other underwriting expenses | 20,636 | [5] | 18,291 | [5] | 15,493 | [5] | ||||||||||
Income (loss) from segments | 16,678 | [5] | 17,971 | [5] | 8,377 | [5] | ||||||||||
Unallocated items: | ||||||||||||||||
Total assets | $641,270 | [5],[6] | $647,473 | [5],[6] | $641,270 | [5],[6] | $647,473 | [5],[6] | $644,620 | [5],[6] | ||||||
[1] | Includes business ceded to the Company's Reinsurance Operations. | |||||||||||||||
[2] | Includes excise tax of $1,114 related to cessions from Insurance Operations to Reinsurance Operations. | |||||||||||||||
[3] | Includes excise tax of $1,026 related to cessions from Insurance Operations to Reinsurance Operations. | |||||||||||||||
[4] | Includes excise tax of $936 related to cessions from Insurance Operations to Reinsurance Operations. | |||||||||||||||
[5] | External business only, excluding business assumed from affiliates. | |||||||||||||||
[6] | Comprised of Global Indemnity Reinsurance's total assets less its investment in subsidiaries. |
Summary_of_Business_Segment_In1
Summary of Business Segment Information (Parenthetical) (Detail) (Insurance Operations, USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Insurance Operations | |||
Segment Reporting Information [Line Items] | |||
Federal excise tax relating to cessions from Insurance Operations to Reinsurance Operations | $1,114 | $1,026 | $936 |
Net_Federal_Income_Taxes_and_C
Net Federal Income Taxes and Cash Interest Paid (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash Flow Supplemental Disclosures [Line Items] | |||
Federal income taxes paid | $13,997 | $162 | $265 |
Federal income taxes recovered | 136 | 7,613 | 38 |
Interest paid | $804 | $7,678 | $5,895 |
Summary_of_Quarterly_Performan
Summary of Quarterly Performance (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Quarterly Financial Information [Line Items] | |||||||||||
Net premiums earned | $66,930 | $68,028 | $66,017 | $67,544 | $69,586 | $64,469 | $58,671 | $55,996 | $268,519 | $248,722 | $238,862 |
Net investment income | 6,333 | 6,527 | 7,677 | 8,284 | 8,924 | 8,486 | 9,765 | 10,034 | 28,821 | 37,209 | 47,557 |
Net realized investment gains (losses) | -4,366 | 1,158 | 39,881 | -813 | 17,208 | 1,641 | 2,806 | 5,757 | 35,860 | 27,412 | 6,755 |
Net losses and loss adjustment expenses | 24,065 | 36,654 | 38,270 | 38,572 | 30,796 | 35,483 | 34,924 | 31,788 | 137,561 | 132,991 | 153,628 |
Acquisition costs and other underwriting expenses | 28,505 | 27,458 | 27,171 | 26,485 | 28,674 | 28,028 | 24,472 | 24,477 | 109,619 | 105,651 | 95,403 |
Income (loss) before income taxes | 11,294 | 8,128 | 44,798 | 6,974 | 37,155 | 5,056 | 8,440 | 12,058 | 71,194 | 62,709 | 28,901 |
Net income | $11,064 | $9,761 | $33,208 | $8,823 | $33,713 | $6,948 | $8,664 | $12,365 | $62,856 | $61,690 | $34,757 |
Per share data-Diluted: | |||||||||||
Net income | $0.44 | $0.39 | $1.31 | $0.35 | $1.34 | $0.28 | $0.34 | $0.49 | $2.48 | $2.45 | $1.30 |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (USD $) | 0 Months Ended | |||
Jan. 15, 2015 | Jan. 01, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Subsequent Event [Line Items] | ||||
Allocated to goodwill | $4,820,000 | $4,820,000 | ||
Subsequent Events | Global Indemnity Group Inc | American Reliable Insurance Company | ||||
Subsequent Event [Line Items] | ||||
Aggregate purchase price | 113,700,000 | |||
Business acquisition date | 1-Jan-15 | |||
Acquired voting equity interest | 100.00% | |||
Customary insurance liabilities, obligations, and mandates | 322,900,000 | |||
Estimated purchase price | 117,900,000 | |||
Allocated to tangible net assets | 87,700,000 | |||
Allocated to intangible assets | 27,500,000 | |||
Allocated to goodwill | 2,700,000 | |||
Amortization period of goodwill | 15 years | |||
Subsequent Events | Global Indemnity Group Inc | American Reliable Insurance Company | Fox Paine & Company, LLC | ||||
Subsequent Event [Line Items] | ||||
Investment bank fee as a percentage of the required capital | 3.00% | |||
Investment Advisory Fees | $1,500,000 | |||
Ordinary shares of Global Indemnity issued to pay fees | 267,702 |
Recovered_Sheet2
Summary Of Investments Other Than Investments In Related Parties (Detail) (USD $) | Dec. 31, 2014 | |
In Thousands, unless otherwise specified | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Cost | $1,402,254 | [1] |
Value | 1,435,785 | |
Amount Included in the Balance Sheet | 1,435,785 | |
Fixed Maturities | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Cost | 1,272,948 | [1] |
Value | 1,283,475 | |
Amount Included in the Balance Sheet | 1,283,475 | |
Fixed Maturities | U.S. Treasury and Agency Obligations | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Cost | 78,569 | [1] |
Value | 80,767 | |
Amount Included in the Balance Sheet | 80,767 | |
Fixed Maturities | Obligations of States and Political Subdivisions | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Cost | 188,452 | [1] |
Value | 191,473 | |
Amount Included in the Balance Sheet | 191,473 | |
Fixed Maturities | Mortgage Backed And Asset Backed Securities | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Cost | 517,651 | [1] |
Value | 520,180 | |
Amount Included in the Balance Sheet | 520,180 | |
Fixed Maturities | Public Utility, Bonds | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Cost | 19,060 | [1] |
Value | 19,447 | |
Amount Included in the Balance Sheet | 19,447 | |
Fixed Maturities | All Other Corporate Bonds | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Cost | 469,216 | [1] |
Value | 471,608 | |
Amount Included in the Balance Sheet | 471,608 | |
Equity securities | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Cost | 99,297 | [1] |
Value | 122,048 | |
Amount Included in the Balance Sheet | 122,048 | |
Equity securities | Public Utility, Equities | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Cost | 3,520 | [1] |
Value | 4,906 | |
Amount Included in the Balance Sheet | 4,906 | |
Equity securities | Industrial, Miscellaneous, and All Others | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Cost | 95,777 | [1] |
Value | 117,142 | |
Amount Included in the Balance Sheet | 117,142 | |
Other long-term investments | Other Invested Assets | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Cost | 30,009 | [1] |
Value | 30,262 | |
Amount Included in the Balance Sheet | $30,262 | |
[1] | Original cost of equity securities; original cost of fixed maturities adjusted for amortization of premiums and accretion of discounts. All amounts are shown net of impairment losses. |
Condensed_Financial_Informatio1
Condensed Financial Information of Registrant (Parent Only) Balance Sheets (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||
In Thousands, unless otherwise specified | ||||||
ASSETS | ||||||
Cash and cash equivalents | $58,823 | $105,492 | $104,460 | $175,860 | ||
Other assets | 34,980 | 22,812 | ||||
Total assets | 1,930,033 | 1,911,779 | 1,903,703 | |||
Liabilities: | ||||||
Other liabilities | 34,998 | 22,955 | ||||
Total liabilities | 1,021,743 | 1,038,499 | ||||
Commitments and contingencies | ||||||
Shareholders' equity: | ||||||
Ordinary shares, $0.0001 par value, 900,000,000 ordinary shares authorized; A ordinary shares issued: 16,331,577 and 16,200,406, respectively; A ordinary shares outstanding: 13,266,762 and 13,141,035 respectively; B ordinary shares issued and outstanding: 12,061,370 and 12,061,370, respectively | 3 | 3 | ||||
Additional paid-in capital | 519,590 | 516,653 | ||||
Accumulated other comprehensive income, net of tax | 23,384 | 54,028 | 53,350 | |||
Retained earnings | 466,717 | 403,861 | ||||
Total shareholders' equity | 908,290 | 873,280 | 806,618 | |||
Total liabilities and shareholders' equity | 1,930,033 | 1,911,779 | ||||
Ordinary Shares A | ||||||
Shareholders' equity: | ||||||
A ordinary shares in treasury, at cost: 3,064,815 and 3,059,371 shares, respectively | -101,404 | -101,265 | ||||
Total shareholders' equity | 2 | 2 | 2 | 2 | ||
Parent Company | ||||||
ASSETS | ||||||
Cash and cash equivalents | 46 | 1,746 | 1,744 | 9,792 | ||
Equity in unconsolidated subsidiaries | 1,017,710 | [1] | 982,396 | [1] | ||
Other assets | 705 | 683 | ||||
Total assets | 1,018,461 | 984,825 | ||||
Liabilities: | ||||||
Intercompany notes payable | 108,000 | [1] | 108,000 | [1] | ||
Due to affiliates | 938 | [1] | 2,382 | [1] | ||
Other liabilities | 1,178 | 1,108 | ||||
Total liabilities | 110,116 | 111,490 | ||||
Commitments and contingencies | ||||||
Shareholders' equity: | ||||||
Ordinary shares, $0.0001 par value, 900,000,000 ordinary shares authorized; A ordinary shares issued: 16,331,577 and 16,200,406, respectively; A ordinary shares outstanding: 13,266,762 and 13,141,035 respectively; B ordinary shares issued and outstanding: 12,061,370 and 12,061,370, respectively | 3 | 3 | ||||
Deferred shares, €1 par value, 40,000 ordinary shares authorized, issued and outstanding | 55 | [1] | 55 | [1] | ||
Preferred shares, $0.0001 par value, 100,000,000 shares authorized, none issued and outstanding | ||||||
Additional paid-in capital | 519,590 | 516,653 | ||||
Accumulated other comprehensive income, net of tax | 23,384 | 54,028 | ||||
Retained earnings | 466,717 | 403,861 | ||||
Total shareholders' equity | 908,345 | 873,335 | ||||
Total liabilities and shareholders' equity | 1,018,461 | 984,825 | ||||
Parent Company | Ordinary Shares A | ||||||
Shareholders' equity: | ||||||
A ordinary shares in treasury, at cost: 3,064,815 and 3,059,371 shares, respectively | ($101,404) | ($101,265) | ||||
[1] | This item has been eliminated in the Company's Consolidated Financial Statements. |
Condensed_Financial_Informatio2
Condensed Financial Information of Registrant (Parent Only) Balance Sheets (Parenthetical) (Detail) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
USD ($) | USD ($) | Parent Company | Parent Company | Parent Company | Parent Company | Ordinary Shares A | Ordinary Shares A | Ordinary Shares A | Ordinary Shares A | Ordinary Shares B | Ordinary Shares B | Ordinary Shares B | Ordinary Shares B | |
USD ($) | EUR (€) | USD ($) | EUR (€) | Parent Company | Parent Company | Parent Company | Parent Company | |||||||
Condensed Financial Statements, Captions [Line Items] | ||||||||||||||
Ordinary shares, par value | $0.00 | $0.00 | $0.00 | $0.00 | ||||||||||
Ordinary shares, shares authorized | 900,000,000 | 900,000,000 | 900,000,000 | 900,000,000 | 900,000,000 | 900,000,000 | ||||||||
Ordinary shares, shares issued | 16,331,577 | 16,200,406 | 16,331,577 | 16,200,406 | 12,061,370 | 12,061,370 | 12,061,370 | 12,061,370 | ||||||
Ordinary shares, shares outstanding | 13,266,762 | 13,141,035 | 13,266,762 | 13,141,035 | 12,061,370 | 12,061,370 | 12,061,370 | 12,061,370 | ||||||
Deferred shares, par value | € 1 | € 1 | ||||||||||||
Deferred shares, shares authorized | 40,000 | 40,000 | 40,000 | 40,000 | ||||||||||
Deferred shares, shares issued | 40,000 | 40,000 | 40,000 | 40,000 | ||||||||||
Deferred shares, shares outstanding | 40,000 | 40,000 | 40,000 | 40,000 | ||||||||||
Preferred shares, par value | $0.00 | $0.00 | ||||||||||||
Preferred shares, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | 100,000,000 | ||||||||||
Preferred shares, shares issued | 0 | 0 | 0 | 0 | ||||||||||
Preferred shares, shares outstanding | 0 | 0 | 0 | 0 | ||||||||||
Treasury shares, cost | 3,064,815 | 3,059,371 | 3,064,815 | 3,059,371 |
Condensed_Financial_Informatio3
Condensed Financial Information of Registrant (Parent Only) Statement of Operations and Comprehensive Income (Detail) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Revenues: | ||||||||||||||
Total revenues | $333,755 | $319,134 | $293,016 | |||||||||||
Expenses: | ||||||||||||||
Income before income taxes | 11,294 | 8,128 | 44,798 | 6,974 | 37,155 | 5,056 | 8,440 | 12,058 | 71,194 | 62,709 | 28,901 | |||
Net income | 11,064 | 9,761 | 33,208 | 8,823 | 33,713 | 6,948 | 8,664 | 12,365 | 62,856 | 61,690 | 34,757 | |||
Other comprehensive income, net of tax: | ||||||||||||||
Other comprehensive income (loss), net of tax | -30,644 | 678 | 13,176 | |||||||||||
Comprehensive income, net of tax | 32,212 | 62,368 | 47,933 | |||||||||||
Parent Company | ||||||||||||||
Revenues: | ||||||||||||||
Total revenues | 0 | 0 | 0 | |||||||||||
Expenses: | ||||||||||||||
Intercompany interest expense | 1,296 | [1] | 1,296 | [1] | 918 | [1] | ||||||||
Other expenses | 4,484 | 3,848 | 4,169 | |||||||||||
Income before income taxes | -5,780 | -5,144 | -5,087 | |||||||||||
Equity in earnings of unconsolidated subsidiaries | 68,636 | [1] | 66,834 | [1] | 39,844 | [1] | ||||||||
Net income | 62,856 | 61,690 | 34,757 | |||||||||||
Other comprehensive income, net of tax: | ||||||||||||||
Equity in other comprehensive income (loss) of unconsolidated subsidiaries | -30,644 | [1] | 678 | [1] | 13,176 | [1] | ||||||||
Other comprehensive income (loss), net of tax | -30,644 | 678 | 13,176 | |||||||||||
Comprehensive income, net of tax | $32,212 | $62,368 | $47,933 | |||||||||||
[1] | This item has been eliminated in the Company's Consolidated Financial Statements. |
Condensed_Financial_Informatio4
Condensed Financial Information of Registrant (Parent Only) Statement of Cash Flows (Detail) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Condensed Financial Statements, Captions [Line Items] | ||||
Net cash provided by (used for) operating activities | ($12,002) | ($4,921) | ($35,013) | |
Cash flows from financing activities: | ||||
Purchases of A ordinary shares | -139 | -55 | -82,959 | |
Tax benefit on share-based compensation expense | 37 | |||
Net cash provided by (used for) financing activities | 74,571 | 15,016 | -101,030 | |
Net change in cash and cash equivalents | -46,669 | 1,032 | -71,400 | |
Cash and cash equivalents at beginning of period | 105,492 | 104,460 | 175,860 | |
Cash and cash equivalents at end of period | 58,823 | 105,492 | 104,460 | |
Parent Company | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net cash provided by (used for) operating activities | -1,598 | 57 | 6,011 | |
Cash flows from financing activities: | ||||
Purchases of A ordinary shares | -139 | -55 | -82,959 | |
Tax benefit on share-based compensation expense | 37 | |||
Issuance of intercompany note payable | 68,900 | [1] | ||
Net cash provided by (used for) financing activities | -102 | -55 | -14,059 | |
Net change in cash and cash equivalents | -1,700 | 2 | -8,048 | |
Cash and cash equivalents at beginning of period | 1,746 | 1,744 | 9,792 | |
Cash and cash equivalents at end of period | $46 | $1,746 | $1,744 | |
[1] | This item has been eliminated in the Company's Consolidated Financial Statements. |
Condensed_Financial_Informatio5
Condensed Financial Information of Registrant (Parent Only) - Additional Information (Detail) (Parent Company, Non-Cash Dividend, USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Parent Company | Non-Cash Dividend | ||
Condensed Financial Statements, Captions [Line Items] | ||
Non-cash dividends received from subsidiaries | $2.70 | $19.10 |
Supplementary_Insurance_Inform1
Supplementary Insurance Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Supplementary Insurance Information, by Segment [Line Items] | |||
Premium Revenue | $268,519 | $248,722 | $238,862 |
Benefits, Claims, Losses And Settlement Expenses | 137,561 | 132,991 | 153,628 |
Amortization of Deferred Policy Acquisition Costs | 57,051 | 53,787 | 48,852 |
Net Written Premium | 273,181 | 271,984 | 219,547 |
Insurance Operations | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Deferred Policy Acquisition Costs | 21,249 | 19,036 | 16,235 |
Future Policy Benefits, Losses, Claims And Loss Expenses | 579,621 | 678,381 | 764,737 |
Unearned Premiums | 102,118 | 100,791 | 84,130 |
Other Policy and Benefits Payable | 0 | 0 | 0 |
Premium Revenue | 211,165 | 196,302 | 179,153 |
Benefits, Claims, Losses And Settlement Expenses | 117,586 | 116,837 | 118,515 |
Amortization of Deferred Policy Acquisition Costs | 45,015 | 44,115 | 38,177 |
Net Written Premium | 212,965 | 213,705 | 177,832 |
Reinsurance Operations | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Deferred Policy Acquisition Costs | 3,989 | 3,141 | 2,030 |
Future Policy Benefits, Losses, Claims And Loss Expenses | 95,851 | 101,085 | 114,377 |
Unearned Premiums | 18,697 | 15,838 | 9,984 |
Other Policy and Benefits Payable | 0 | 0 | 0 |
Premium Revenue | 57,354 | 52,420 | 59,709 |
Benefits, Claims, Losses And Settlement Expenses | 19,975 | 16,154 | 35,113 |
Amortization of Deferred Policy Acquisition Costs | 12,036 | 9,672 | 10,675 |
Net Written Premium | $60,216 | $58,279 | $41,715 |
Supplementary_Insurance_Inform2
Supplementary Insurance Information Unallocated Corporate Items (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Unallocated Corporate Items [Line Items] | |||
Net Investment Income | $28,821 | $37,209 | $47,557 |
Corporate and Other Operating Expenses | $14,559 | $11,614 | $9,691 |
Reinsurance_Earned_Premiums_De
Reinsurance Earned Premiums (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | |||||||||||
Direct Amount | $228,652 | $215,713 | $203,587 | ||||||||
Ceded to Other Companies | 18,547 | 19,485 | 25,118 | ||||||||
Assumed from Other Companies | 58,414 | 52,494 | 60,393 | ||||||||
Net Amount | 66,930 | 68,028 | 66,017 | 67,544 | 69,586 | 64,469 | 58,671 | 55,996 | 268,519 | 248,722 | 238,862 |
Property & Liability Insurance | |||||||||||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | |||||||||||
Direct Amount | 228,652 | 215,713 | 203,587 | ||||||||
Ceded to Other Companies | 18,547 | 19,485 | 25,118 | ||||||||
Assumed from Other Companies | 58,414 | 52,494 | 60,393 | ||||||||
Net Amount | $268,519 | $248,722 | $238,862 | ||||||||
Percentage of Assumed to Net | 21.80% | 21.10% | 25.30% |
Valuation_and_Qualifying_Accou1
Valuation and Qualifying Accounts and Reserves (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Allowance for Loans and Leases Receivable | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Charged (Credited) to Other Accounts | $0 | $0 | $0 |
Other Deductions | 0 | 0 | 0 |
Allowance for Loan and Lease Losses, Real Estate | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Charged (Credited) to Other Accounts | 0 | 0 | 0 |
Other Deductions | 0 | 0 | 0 |
Allowance for Doubtful Accounts | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Period | 1,782 | 1,338 | 1,476 |
Charged (Credited) to Costs and Expenses | -264 | 444 | -138 |
Charged (Credited) to Other Accounts | 0 | 0 | 0 |
Other Deductions | 0 | 0 | 0 |
Balance at End of Period | 1,518 | 1,782 | 1,338 |
Valuation Allowance of Deferred Tax Assets | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Charged (Credited) to Other Accounts | 0 | 0 | 0 |
Other Deductions | 0 | 0 | 0 |
Allowance for Reinsurance Recoverable | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Period | 9,010 | 9,010 | 10,022 |
Charged (Credited) to Costs and Expenses | 340 | -1,012 | |
Charged (Credited) to Other Accounts | 0 | 0 | 0 |
Other Deductions | 0 | 0 | 0 |
Balance at End of Period | $9,350 | $9,010 | $9,010 |
Recovered_Sheet3
Supplementary Information for Property Casualty Underwriters (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items] | |||
Deferred Policy Acquisition Costs | $25,238 | $22,177 | $18,265 |
Reserves for Unpaid Claims and Claim Adjustment Expenses | 675,472 | 779,466 | 879,114 |
Discount If Any Deducted | 4,000 | 6,000 | 8,000 |
Unearned Premiums | 120,815 | 116,629 | 94,114 |
Earned Premiums | 268,519 | 248,722 | 238,862 |
Net Investment Income | 28,821 | 37,209 | 47,557 |
Claims and Claim Adjustment Expense Incurred Related To Current Year | 153,994 | 140,873 | 149,183 |
Claims and Claim Adjustment Expense Incurred Related To Prior Year | -16,433 | -7,882 | 4,445 |
Amortization Of Deferred Policy Acquisition Costs | 57,051 | 53,787 | 48,852 |
Paid Claims and Claim Adjustment Expenses | 172,265 | 184,564 | 202,786 |
Premiums Written | $273,181 | $271,984 | $219,547 |